Is it time to realign class and flags?

English

Omar Abu Omar, President for Gulf Navigation Maritime and Operation in the UAE, believes it may be time to fundamentally review the role of class for flag states. For example, in the currently depressed shipping market there is “huge competition among class societies on prices,” says Abu Omar “to the extent that some services are being offered virtually for free.”

At the same time, there is a lack of transparency, with some societies registered as charities or government owned, meaning they effectively pay no taxes. In short, he asks, “are class societies really best serving the interests of maritime safety and the environment? “ and “Does IACS membership still carry the same guarantee of quality that it used to?”

One radical idea would be for insurance companies, rather than ship-owners, to pay for class services, he suggests. Especially since, ‘historically, this is why class societies were established - to verify the technical compliance of ships for insurance companies.’

Were classification to revert to being a service paid for by insurance companies - recouped from owners in the form of the premiums they are obliged to pay - this would lead to improved transparency and greater competition among class to prove their quality track record, he believes.

“For sure, this will have a positive impact on the [classification sector’s] added value to the global maritime industry for saving life, property and environment,”

“In addition, the technical competencies of many flags, especially Open Registries (ORs), are limited, meaning they rely on class as Recognized Organizations - while at the same time the flags are controversially the quality auditor for those very class societies.”

“Also, just a few ORs today control a large portion of world shipping, meaning they increasingly play a key role in IMO decision-making with no relation to the size and importance of the countries they represent,” Abu Omar continues.

By contrast, “Arab countries number 23 in totals but unfortunately their voice in the IMO is almost absent,” he points out. ‘Like many other countries they are therefore getting penalized as they have to comply with certain conventions but they have little to say about it. ”

“In short, maybe it is time to re-introduce genuine link between the ownerships of the vessels and their countries, and at the same time to rethink the role of IACS, Class and Flag in order to give more attention to safety, ” believes Omar.

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