Making Headway? Regulatory Compliance in the Shipping Industry
| Date | 01 September 2014 |
| DOI | 10.1177/0964663914529684 |
| Published date | 01 September 2014 |
| Subject Matter | Articles |
Article
Social & Legal Studies
2014, Vol. 23(3) 383–402
Making Headway?
ª The Author(s) 2014
Reprints and permission:
Regulatory Compliance
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DOI: 10.1177/0964663914529684
in the Shipping Industry
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Helen Sampson
Cardiff University, UK
David Walters
Cardiff University, UK
Philip James
Oxford Brookes University, UK
Emma Wadsworth
Cardiff University, UK
Abstract
Globalisation has significantly changed the context of governance and regulation at both a
national and international level. Such change has driven extensive debate on how to achieve
more efficient regulation and better governance within new circumstances. A key concern at
the level of the workplace, however, is how compliance with the standards required by
regulations – whatever their form – is achieved in practice, and it is this that we are mainly
concerned with here. In this article, we make use of a case study undertaken in the shipping
industry in the course of which we carefully discussed the drivers of compliance with sea-
farers and with ship managers, charterers and related personnel. We suggest that a con-
sideration of the perspective of workers and managers is vital in understanding drivers of
compliance and therefore to informing debates on effective regulation.
Keywords
Compliance, economic globalisation, governance, regulation, shipping
Corresponding author:
Helen Sampson, Cardiff University, 52 Park Place, Cardiff CF10 3AT, UK.
Email: sampsonh@cf.ac.uk
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Social & Legal Studies 23(3)
Issues of Global Regulation
Economic globalisation has made governance and regulation the subjects of extensive
theoretical sociolegal discourse. Whilst the literature encompasses many different posi-
tions, a common standpoint is that in the globalised economy, traditional command and
control strategies for regulating public goods such as workers’ health and safety, are, for
many reasons, both ill-suited to regulating the consequences of modern business activ-
ities and inappropriate within current neo-liberal political and economic contexts. As
Santos and Rodriguez-Garavito (2005) argue, what the various critiques have in common
is a diagnosis that ‘regulatory fracture’ and the failure of top-down regulatory
approaches occur as a consequence of the different levels and orientations at which glo-
bal economic activities and regulation operate. The result has been extensive theoretical
debate on what might constitute appropriate regulatory strategies to protect public goods
in these situations. Probably the strongest constellation of ideas to emerge from this
debate is captured by notions of ‘post-regulatory law’ (Teubner, 1986), in which various
new strategies, such as Ayres and Braithwaite’s (1992) arguments for more ‘responsive
regulation’, have been proposed and critically discussed. In line with this, approaches to
regulation in recent decades have been characterised as ‘soft law’ (Snyder, 1994) in
which traditional command and control approaches have given way to the use of alter-
native strategies. ‘Governance’ (MacNeil et al., 2002) and ‘new governance’ (Estlund,
2010) are terms increasingly used to describe such processes. More dynamic roles for
social and economic actors in processes in which regulation is ‘outsourced’ (O’Rourke,
2003) are postulated, and the emergent systems that result are argued to take the form of
‘democratic experimentalism’ (Dorf and Sabel, 1998).
Solutions to the crisis of command and control regulation are therefore diverse but
again, common themes are evident. They often identify the need for new organisational
forms of regulation that are capable of bridging the gap between the state and the market,
harnessing intermediary players and processes and acting in a reflexive way to promote
various forms of ‘regulated self-regulation’, which encourage duty holders to go beyond
mere compliance with regulatory requirements. Sociolegal writers cite many instances of
such forms including decentralised environmental regulation, new forms for worker rep-
resentation (Estlund, 2010), corporate codes of conduct for labour standards (Fung et al.,
2001) and leverage within supply chains (Walters and James, 2011).
In such complex, multilevel, regulatory contexts, a concern at the level of the workplace
is not so much the kind of regulation that is attempted but the question of what is most
influential in relation to compliance in practice. It is with this that we are mainly concerned
in this article. As Bloor et al. (2013) recently outlined, there are essentially four main
strands in the extensive theoretical literature that attempt to explain compliance. In the first
instance, firms may comply with regulation as a result of varying mixes of rational interest,
where negative outcomes are perceived to be associated with non-compliance. For exam-
ple, companies may be effectively motivated by the possibility of regulatory inspection
(see e.g. Vickers et al., 2003). Indeed, as far as evidence of the effectiveness of compliance
strategies goes, that on the role and effectiveness of enforcement probably remains the
strongest (see Tombs and Whyte, 2013, for an elaboration of this point). Additional drivers
here may be market-based, where, for example, companies may regard public knowledge
Sampson et al.
385
of enforcement actions taken against them as damaging to their market position (Gunning-
ham and Johnstone, 1999). It is in relation to consideration of this area that we should
attend to the relationships between organisations across supply chains. In shipping, these
may be complex and have the potential to exert contradictory influences.
Whilst experience of regulatory inspection or the knowledge of enforcement more
generally are powerful drivers of compliance, the fact that enforcement itself may be
a rare event means such instrumental thinking is only partly explanatory. A second strand
of compliance theory identified by Bloor et al. (2013) suggests a more normative influ-
ence, where perhaps inspection and enforcement may act to stimulate a pre-existing cor-
porate propensity towards voluntary compliance (May, 2005, see also Ayres and
Braithwaite, 1992; Gunningham and Sinclair, 1999). May divides compliance into
responses to a deterrent and responses to notions of ‘civic duty’. In doing so, he points
out that:
Regulated entities are not neutral parties that simply respond to signals of regulatory agen-
cies and inspectors. Rather, they bring to the table a set of attitudes and beliefs about the
regulations in question and about the regulatory process. (May, 2005: 321)
A third strand in the literature identified by Bloor et al. (2013) suggests that rather
than stimulating voluntary proactive behaviours, inspection and enforcement may help
create a ‘culture of compliance’ amongst many firms, in which compliance behaviour
is simply taken for granted as the norm (Black, 2008). Finally, the fourth strand of think-
ing outlined by Bloor et al. (2013) argues that firms’ circumstances may also influence
their behaviour. For example, the size or economic sector of firms may influence them to
react differently to the threat of enforcement (Gunningham et al., 2005).
Needless to say it is not regulated entities per se that have beliefs and attitudes but the
personnel from board level to operator level populating them. This article seeks to
develop a better understanding of the attitudes and beliefs that underpin the compliance
of seafarers and vessel managers in relation to health and safety. In understanding ‘what
works’ in terms of regulating social goods such as safety in the workplaces of the glo-
balised economy, it is important to take account of the perceptions of workers and man-
agers concerning these matters – since it is these people who lie at the operational end of
the strategies of global governance and regulation about which academic discourse has
theorised so copiously.
The Case of the Shipping Industry
Shipping is an example of a highly globalised industry characterised by ‘plant’ mobi-
lity, a global labour market, offshoring and outsourcing (Bloor and Sampson, 2009;
Sampson, 2013). As such it provides us with an excellent case study in relation to devel-
oping an understanding of effective global regulation (Sampson and Bloor, 2007).
The regulation of the industry is quintessentially multilevel and can be characterised
as ‘polycentric’. This is especially the case in relation to health and safety and environ-
mental management (Bloor et al., 2013). In the early 20th century, regulation was
largely a matter for the nation states concerned with registering shipping tonnage.
386
Social & Legal Studies 23(3)
Thus, British-owned ships generally operated out of British ports and were registered
as such giving them the right to fly the Red Ensign.1 The regulation of such tonnage
was left to the national authorities concerned, and at this time, international regulation
was sparse.
An early example of the need to build comprehensive international regulations was
provided when the passenger liner Titanic was tragically lost having collided with an ice-
berg in 1912. At the time, there was some controversy over the actions of a nearby vessel
SS Californian which appeared to have ignored the distress flares fired by Titanic. In a
1992 review of the evidence surrounding the case, the UK Marine Accident Investigation
Branch (MAIB) noted that at the time of the incident there were no international agree-
ments relating to the colour of distress flares and therefore no easy way to...
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