A Call for Class Society Re-Evaluation

By MarEx 2012-12-18 15:44:00

Calling the pending adoption of a new IACS common rules for tankers and bulk carriers "the most fundamental change in the structure of the classification sector in its history," ABS Chairman and Chief Executive Officer Robert D. Somerville has called for a meeting of the principal parties involved ? class, shipbuilders, shipowners, and the leading flag States to "proactively guide the inevitable evolution in class responsibilities towards a preferred end stage."

Somerville made his suggestion when delivering the 2004 President's Invitation Lecture to the Royal Institution of Naval Architects in London on Tuesday.

"A cooperative approach will benefit us all," Somerville asserted while welcoming the emergence of the Round Table of shipowners' associations as "a very positive and proactive step" towards encouraging the needed collaboration.

"I am a firm believer that this industry does have control over its destiny if we all recognize how much we have in common," he told the audience of industry leaders. "Cooperation does not in any way lessen the competitive environment within which each of us operates. But it can promote free and fair competition. And it can encourage a sensible, pragmatic, and technically sound legislative and self-regulatory structure in which to operate," he added.

In addition to the impact of the common rules on shipbuilders, owners and class, other topics that Somerville recommended be put on the agenda of the proposed industry re-evaluation of class included the scope of classification surveys in light of the growing number of inspections to which ships, particularly tankers, are now subject. "If the scope of class was widened, would it pre-empt the need for these additional inspections?" he asked.

"What is at issue is the appropriate definition of class responsibilities," he said. "I believe that there has never been a better time to discuss what those responsibilities should be than now."

Noting that the tanker industry has demanded that older vessels be put through a Condition Assessment Program (CAP) that exceeds class requirements and that the CAP program requires the grading of the vessel's condition on a scale of 1-5, Somerville posed the question of whether class should return to its roots and re-introduce a true "classification" of vessels. "I would argue that, if class was meeting the needs of industry, there would never have been any need for CAP," the ABS chairman said.

Somerville highlighted several other issues that he believes require urgent discussion by the industry with none being more important than the exposure of class societies to unlimited liability. "The current situation is intolerable," Somerville said bluntly. "The shipowner is able to limit his liability. The flag State and port States can claim immunity. Yet the class society is expected to accept unlimited liability for a service where the fee may have been only a few hundred dollars. We cannot insure ourselves against such potentially ruinous exposure," he insisted.

Next month the IACS Council and the Round Table are scheduled to meet to discuss issues of mutual concern. "I urge both sides to think creatively about how these issues can begin to be addressed," Somerville said. "It is within our power to further improve the standards of this industry. I am encouraged that others within the industry are thinking along the same lines, urging substantive proposals for improvement and the elimination of the traditional roadblocks that prevent us from working together. I believe the time to act is now. My challenge is let's get together and begin the process."