Does shipping need a licence to sail?

May 8, 2019

Compliance with regulation is considered as a licence to operate in the shipping industry. For good reasons, most owners and operators can assume that even if regulations are formulated to provide a lowest common denominator, they can set sail if they can demonstrate conformance.

But what happens if that permission is the preserve of more than regulators? What if civil society exerted a force on businesses strong enough to make it hard to trade without it? It’s a big and open-ended question; not that long ago a famous British politician insisted there was ‘no such thing as society’.

These days we accept that assessment as incorrect, so numerous are the stakeholder groups and influencers that impact the industry – especially when it comes to environmental performance.
The World Ocean Council, together with Australian National Centre for Ocean Resources and Security and Wageningen University, surveyed owners and operators to understand what a social licence to operate might look like and how it could affect not just shipping but offshore energy and fisheries industries in future.

The question is important in terms of the attention that local and regional regulators as well as NGOs and pressure groups are putting on the stewardship of the oceans and the sustainability of the ‘Blue Economy’, the term for the diverse range of businesses that derive their revenues from the marine environment.

This is especially challenging in relation to special interest groups who are influenced by values, beliefs or areas of interest which are inconsistent with other communities with which the industry interacts; those who make their living from the oceans.

The research identified two ‘layers’ of social licence challenges across a range of Blue Economy sectors. The first layer focused on tangible impacts, related mostly to environmental risks, especially concerns over impacts on biodiversity or amenity, pollution or contamination issues. The second layer focused on intangible impacts; harder to conceptualise, monitor and control, but which create particular challenges for maritime industries.

The survey responses indicated that licence to operate challenges for shipping and ports focused most strongly on amenity and human health, pollution and contamination though for shipping, biodiversity impacts were also a notable concern. This reflects the nature of the most likely environmental concerns for these sectors, which include fuel spills, emissions, noise and dust from port activities and invasive marine species.

The report authors point out that the social acceptability of ocean-based industries will be important to securing the future potential of a Blue Economy – effectively that licence to trade. Maintaining this social licence is a challenge that is experienced differently across different sectors but the loss of that acceptance in one sector could impact the level of societal trust in the broader Blue Economy concept.

Critically, the research found that across all sectors, while the Blue Economy appears to be well-equipped to respond to the technology challenges of environmental risks, a significantly greater challenge appears to lie in the most appropriate response to more intangible impacts.

Though maritime companies can wield technology to solve problems. there is a gap between this and the kind of relationship that understands the values, beliefs and ideologies of the communities of interest with whom the different industries interact.

It seems shipping has the technology, but not necessarily the trust of the communities it serves.

This will continue to be a challenge as the Blue Economy grows, the authors point out. At present it appears these often intractable issues are primarily dealt with in the political realm where decision-makers are asked to mediate between conflicting values, and government lobbying can be expected to occur from both sides of these somewhat polarised debates.

The clear majority of maritime companies which participated in this research, considered themselves to be in a relatively vulnerable position in relation to a social licence to operate. Most felt that their sector is largely accepted and/or tolerated but has occasional issues of concern around social acceptability with particular stakeholder groups.

What the research also shows is that the ambivalence that characterises the relationship cuts both ways.

Interview and workshop participants in the research considered education as critical to a social licence for the shipping and port sectors. The need to inform the general public about the role of these businesses in the economy was often seen as important and included exercises such as open days and education campaigns.

The experience of a Canadian shipping company included a six-month advertising campaign about the role of shipping which was considered to have a positive impact. However at least one participant was sceptical about the extent to which the public were interested in ports or shipping.

The challenge for the industry is that the public doesn’t want to hear about shipping and ports, until something goes wrong. Combine this with recalcitrance from within the shipping industry to any move that raises the profile of the sector that enjoys low levels of scrutiny and the result creates a shield which inhibits long term change.

The reaction such as it is, probably results in some unwanted or even un-needed regulation because politicians have to be seen to be doing something after which there is a return to business as usual. What is lacking is a proactive approach to education and engagement that has been called for every time negative publicity threatens to upset the status quo.

For better or worse, the maritime industry appears content to keep its head down and get on with its day to day business and then respond reactively rather than proactively. Changing that will mean re-writing two thousand years of history and altering the mindset of shipowners who know if they meet regulatory standards, then they’ll probably be left alone.

It’s a strategy that has worked well for the first era of shipping, but whether it is enough to sustain the industry through its next thousand years is far less certain.