Room for Manoeuvre? Regulatory Compliance in the Global Shipping Industry
| Author | Michael Bloor,Emma Wadsworth,Philip James,Susan Baker,Katrin Dahlgren,David Walters,Helen Sampson |
| DOI | 10.1177/0964663912467814 |
| Date | 01 June 2013 |
| Published date | 01 June 2013 |
| Subject Matter | Articles |
Article
Social & Legal Studies
22(2) 171–189
Room for Manoeuvre?
ª The Author(s) 2013
Reprints and permission:
Regulatory Compliance
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DOI: 10.1177/0964663912467814
in the Global Shipping
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Industry
Michael Bloor, Helen Sampson, Susan Baker
and David Walters
Cardiff University, UK
Katrin Dahlgren
U&W, Sweden
Emma Wadsworth
Cardiff University, UK
Philip James
Oxford Brookes University, UK
Abstract
This article combines data from two separate studies of the shipping industry, one on
enforcement of new regulations on the use of low-sulphur fuel and one on supply chain
influences on ship operators’ health and safety policies and practices. The shipping
industry is a valuable natural laboratory for the study of patterns of compliance and
governance in late modernity because it is characterised both by highly developed poly-
centric governance structures and by globalising economic processes including vertically
disaggregated global value chains, outsourcing and offshoring. Segmented markets have
permitted some ‘blue riband’ companies to operate a social license ‘beyond compliance’,
and that such social licenses are more extensive in respect of environment policies than
in health and safety policies that may be attributed to supply chain influences. Ship opera-
tors’ compliance is seen as a combination of instrumental compliance, normative
compliance, a taken for granted culture of compliance and corporate policies of
Corresponding author:
Michael Bloor, Seafarers International Research Centre, Cardiff University, Cardiff CF10 3AT, UK.
Email: BloorMJ@cf.ac.uk
172
Social & Legal Studies 22(2)
labour-force governance. A taken for granted culture of compliance is identified as the
main reason for compliance with the new low-sulphur regulations, which are currently
(uncharacteristically) subject to only limited enforcement effort.
Keywords
Compliance, global governance, polycentric governance, seafarers health and safety
Introduction
This article draws on, and reflects upon, the compliance literature in order to understand
the variable compliance behaviour of ship operators in respect of two different sets of
international shipping regulations, those pertaining to crews’ health and safety and those
pertaining to permitted sulphur levels in vessels’ fuel, which were the subjects of two
contemporaneous qualitative studies, described below. The health and safety regulations
include the implementation of an effective safety management system, provision of
salubrious accommodation, potable water, cooking facilities, the proper stocking of the
medicine chest, the provision and maintenance of emergency and safety equipment such
as lifeboats and fire-fighting equipment, regular drills to effectively operate that equip-
ment, protective clothing and the allowance and documentation of statutory hours of rest.
The low-sulphur regulations were only recently introduced. Since 2006 in the Baltic
Emission Control Area (ECA) and 2007 in the North Sea/English Channel ECA, all ves-
sels in those waters must burn fuel with a sulphur content currently capped at 1.0% and
due to reduce to 0.5% in 2015, while the worldwide sulphur cap is currently 3.5%; EU
regulations require vessels while in port to burn fuels with a sulphur content of no more
than 0.1%; the worldwide sulphur cap is due to reduce to 0.5% in 2020. The additional
cost of compliance with the low-sulphur fuel regulations is considerable and operators
trading in the ECAs are now typically paying more in fuel costs than in crewing costs.
Conceptualisations of compliance, and of its counterpart, legitimacy, stretch back to
Hobbes and Rousseau, embracing luminaries like Weber and Habermas en route (cf. the
discussion in Beetham, 1991: 3–41) and have been meat and drink to lawyers, sociolo-
gists, political scientists and criminologists alike. The study of compliance has become
more complex with the growth of non-state regulatory authorities and standard-setting
bodies, both national and international (cf. the discussion of ‘polycentric’ governance
in Black, 2008). And such study has become more complex still through the growth
of corporate and non-corporate devices (e.g. ‘brass plate’ single ship companies in off-
shore jurisdictions), which facilitate (intentionally or not) the avoidance and sometimes
evasion of compliance (e.g. Levi and Reuter, 2006).
The shipping industry is an excellent natural laboratory for the study of the complex-
ities of compliance and non-compliance for several reasons. First, it exhibits a poly-
centric governance structure, defined by Black as that ‘in which the state is not the
sole locus of authority, or indeed in which it plays no role at all. [it is] marked by frag-
mentation, complexity and interdependence between actors, in which state actors are
both regulators and regulated, and their boundaries are marked by the issues or problems
Bloor et al.
173
they are concerned with, rather than necessarily by a common solution’ (Black, 2008:
138). While Black and others have emphasised fragmentation and complexity, other
writers have used different terms to describe rather similar governance structures;
Ostrom and Ostrom (1999) have written about ‘type II multi-level governance’, with par-
ticular emphasis on the scalar dimension; Frey and Eichenberger (1999) have written
about ‘functional, overlapping and competing jurisdictions’.
The governance of the shipping industry can be seen to be fragmentary, complex,
multi-level and overlapping in character. All vessels must be registered with a national
ship registry and are subject to that nation’s shipping regulations wheresoever the vessel
trades (‘Flag State Control’). Flag states are represented at an international United
Nations (UN) agency, the International Maritime Organisation (IMO), and they give
force in their national laws to those international IMO conventions to which they are
signatories. In relation to many regulations, nation states may also enforce those inter-
national conventions on ships berthing in their own ports, regardless of the vessel’s flag
(‘Port State Control’). Port State Control, the equal treatment of all berthing ships regard-
less of flag, was explicitly developed to address the deficiencies of Flag State Control
and employs ‘smart regulation’ strategies (Gunningham et al., 1998). It sought to incen-
tivise ship operators’ into proactive compliance, most notably through naming-and-
shaming on industry websites those vessels found on inspection to be deficient, and so
influencing the freight rates that the shamed vessels can command (compare Bloor
et al., 2006). Furthermore, states also enforce their own distinctive national regulations;
for example, the Swedish maritime authorities enforce the payment of ‘fairway dues’
from berthing ships to pay the costs of ice-breaking and navigation lights, with those
dues being reduced for vessels which attest that they operate continuously on low-
sulphur fuel. In European Union, port states berthing ships are also subject to EU
shipping regulations (e.g. on the sulphur content of marine fuel burnt in port). In addition
to the ship standards set by IMO, labour standards are set by another UN agency, the
International Labour Organisation (ILO). ILO has a tripartite structure composed of gov-
ernments and workers’ and employers’ organisations. Thus, a non-state actor, the Inter-
national Transport-Workers Federation (with affiliated member unions of seafarers
worldwide), played a pivotal role in framing ILO’s 2006 Maritime Labour Convention,
a consolidation of international labour laws relating to the shipping industry. Further-
more, non-state actors have set-up their own standard-setting international organisations
that enforce those standards through their own ship inspections; the most successful of
these is the Oil Companies International Marine Forum (OCIMF) of 90 companies with
its own Ship Inspection Report Programme (SIRE) inspectorate (www.ocimf.com),
which provides detailed vetting of vessels in the tanker trade. And local statutory bodies,
such as port health authorities, may also act as enforcement agencies in respect of berth-
ing ships. In illustration of overlapping jurisdictions, a port state control inspector may
report a deficiency in a vessel’s International Ship Management code, which is a flag
state responsibility, the non-state SIRE inspectorate can fail a tanker for deficiencies
in both IMO and ILO standards, which could also have been picked up in port state or
flag state inspections, and port health inspectors frequently pick up vessel deficiencies
that are also a focus for port state inspections. Indeed, such overlaps in inspection prac-
tice are a source of complaint from ship operators.
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Social & Legal Studies 22(2)
The second reason for making the shipping industry a focus for studying the complex-
ities of compliance lies in the vertical disaggregation of the industry into complex
‘global value chains’ (Gereffi et al., 2005), where different enterprises seek to specialise
in particular aspects of shipping operations. Typically, a 21st century ship may be owned
by a transnational corporation, operated by a specialist international ship management
company and crewed by a casualised, out-sourced labour force, supplied ‘just-in-time’
and employed by a specialist international crewing company. Such global value chains
are the characteristic features of industries that have been subject to globalising eco-
nomic processes and the shipping industry is arguably...
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