EU's Third Maritime Safety Package entered into force - Main elements and implications

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2009

The entry info force of the EU’s Third Maritime Safety Package constitutes the largest ever package of legislative acts on maritime safety. Future focus is now on proper implementation. Strengthened maritime safety rules
 Following the European Parliament’s and Council’s respective approvals in March 2009 and publication in the EU’s Official Journal in May 2009, the Third Maritime Safety Package has now formally come into force in May/June 2009.
The entry into force is the culmination of an intense and at times tough legislative negotiation process launched in November 2005 by the European Commission in accordance with a mandate given by the Council in December 2002 having as its main objective to further increase maritime safety and restore competitiveness of the maritime transport sector by benefitting only operators respecting safety standards and increasing pressure on owners of substandard vessels. The new rules will only have effect in the EU Member States once they have either been implemented into the domestic law of the Member States (directives) or once their agreed application date has passed (regulations).
The package, which was extended underway from seven legislative proposals to eight – six directives and two regulations – is the largest maritime legislative package ever in EU’s history and follows up on the previous so-called ERIKA I and II packages adopted following the 1999 ERIKA and 2002 PRESTIGE oil pollution disasters. These packages i.a. increased port state controls, banned single-hull oil tankers and established the European Maritime Safety Agency (EMSA). The new rules are aimed at strengthening and supplementing existing EU maritime safety legislation and to transpose major international instruments into EU law in order to prevent accidents and to put in place measures to be used in case accidents occur. This will be done by improving the quality of European flags and the rules relating to classification societies; by reviewing legislation on port state control and vessel traffic monitoring; by developing a harmonised framework for accident investigation; and by introducing rules on liability of carriers of passengers by sea in the event of accidents and on insurance of shipowners for maritime claims. The European Maritime Safety Agency (EMSA) will and should have a key role in this respect.
A balanced end result

BIMCO and ECSA have closely monitored the negotiations over the past years and have provided input to the process both vis-à-vis the Council, Member States and the European Parliament. BIMCO and ECSA generally support the intended goal of effectively improving the safety of ships and appropriate actions taken in the event of an accident. This will facilitate operations for quality shipping companies and operators and support the maritime transport sector as a whole. It is considered that the package will indeed contribute to its intended aims and that the final package represents a satisfactory outcome for the industry. Future focus is now on a proper and uniform implementation of these rules.
Key elements in the making
Some of the proposals contained in the package received a lot of criticism underway and were consequently softened in their final versions. This was primarily the case for the proposal for a directive on flag State obligations and the proposal for a directive on civil liability and financial guarantees for shipowners. The original flag State proposal, which many EU Member States resisted since it was seen as an attempt to transfer responsibility for ratifying maritime conventions to Brussels, has been scaled down considerably, while a political commitment was made by Member States at the October 2008 Transport Council meeting according to which they will ratify the 1996 Protocol to the 1976 Convention of the Limitation of Liability for Maritime Claims (1996 LLMC) as well as a number of other conventions no later than 1 January 2012, in order to ensure that all Member States are parties to the latest versions of the international conventions on liability and compensation.
This approach, which will contribute to ensuring a global regulatory framework for maritime transport, is strongly supported by BIMCO and ECSA. We also note with pleasure that the proposal for a Directive on Civil Liability and financial guarantees for shipowners has de facto been reduced to requiring ships operating in EU waters to carry insurance as prescribed in the 1996 LLMC, which has been ratified by a majority of EU Member States already. It is also positive to see that the burdensome requirement for a Member State Certificate of Financial Guarantee has been replaced by a more pragmatic business-related insurance certificate (e.g. from a P&I Club).
On the other hand, interesting elements have seen the day in the final package such as in relation to EU port state control requirements, which in future will also apply to vessels calling at offshore anchorages. Furthermore, EU Member States must designate a competent authority with the power to take independent decisions which, in the event of a rescue operation, will decide on the best course of action to prevent an incident, including which place of refuge should accommodate a ship in need of assistance. Hopefully, this will contribute positively towards avoiding disasters similar to the PRESTIGE.
The six directives and two regulations have the following main content :
The Directive on the insurance of shipowners for maritime claims, which was previously known as the Directive on civil liability and financial guarantees for shipowners, has to be transposed by EU Member States into national law before 1 January 2012. The Directive imposes a mandatory insurance requirement for all EU vessels above 300 GT as well as non-EU flagged vessels above 300 GT calling at EU ports. Member States’ administrations will control that such insurance is in place up to the limits of liability as established by the 1996 LLMC. This effectively means that the directive does not go further than reflecting the current insurance regime, which is positive. If the insurance certificate is not carried on board, the vessel may be detained or even expelled from the port and denied access to other Member States’ ports until the shipowner notifies the certificate.
The Flag State Directive is aimed at improving the quality of European flags mainly by including a mandatory audit plan of national maritime administrations and the certification of their quality management systems. According to the new rules, which must be implemented at national level by 17 June 2011 at the latest, Member States must ensure that an IMO audit of their maritime administrations is carried out at least every 7th year and that the result of this audit is made public. In this sense, the EU goes further than the IMO where both the audit and the publication of its result are voluntary. In addition, Member States are required to control that ships flying their flags effectively respect IMO standards. In light of the above mentioned commitment made by Member States to ratify a number of maritime conventions, the effective consequence of the directive is merely a welcome promotion of international regulations in the IMO. 



As far as ship inspection and survey organisations are concerned, both a directive, which must be implemented at the latest by 17 June 2011, and a regulation have been adopted in order to establish measures to be followed by Member States and create common rules and standards for classification societies. The existing rules have been partly updated and the control of the organisations is generally strengthened. Accordingly, a specialised body will be set up to audit and certify the quality management systems of EU-recognised organisations, to which Member States can delegate the inspection and statutory certification of their ships. In addition, the new rules strengthen the recognition criterion and establish a system of financial penalties for organisations failing to fulfil their obligations. If the shortcomings of a recognised organisation are such that safety is no longer guaranteed, their license will be withdrawn. A much discussed requirement for mutual recognition, which should take into account the most demanding and rigorous standards as the reference, has been put in place concerning class certificates for materials, equipment and components based on equivalent standards. The requirement implies that an EU recognized organisation should accept certificates issued by any of the other EU recognized organisations. The proposal initially received a mixed reaction from the maritime industries, but it is important to note that the intention is only to impose mutual recognition when safety is not at stake. Discussion on the procedure for determining what can and should be subject of mutual recognition is currently ongoing. The requirement will not be applicable in case of statutory certificates and potential problems relating to the extraterritorial application of the rule should therefore not be an issue, although doubt on this point remains. Under the premise and precondition that safety comes first, some shipping circles have expressed sympathy for mutual recognition and believe that the new rules should lead to a reduction in costs without being to the detriment of quality shipping.
The Port State Control Directive, which must be implemented by 31 December 2010 at the latest, seeks to obtain a more efficient and targeted control of ships calling EU ports in order to further reduce substandard shipping. The main idea of the new directive is to amend the existing system in order to ensure that efforts are strengthened towards ships representing a genuine safety risk while conducting fewer controls of quality ships, meaning those which have satisfactory inspection records or which fly the flag of a State complying with the Voluntary IMO Member State Audit Scheme. More specifically the objective is, on the one hand, to replace the individual target per EU Member State to inspect 25 percent of ships by a collective target at EU level to inspect all ships and, on the other hand, to inspect high-risk ships more frequently. Furthermore, substandard ships which simply pass through European waters without calling at a port pose a particular risk and the Member States will therefore step up inspections of ships anchored at sea.
The Directive on Vessel Traffic Monitoring (VTM) entails a strengthened monitoring of maritime transport by means of a system for exchange of information which will increase maritime safety and assist in the prevention of pollution from vessels. The rules, which should be implemented by the EU Member States at the latest on 30 November 2010, amend the 2002 directive establishing a Community vessel traffic monitoring and information system that provides, amongst other provisions, that Member States draw up plans to accommodate, if the situation so requires, ships in distress in their ports or in any other protected place in the best possible conditions in order to limit the consequences of incidences at sea. The VTM directive provides that such plans shall contain i.a. information on the financial guarantee and liability procedures in place for ships accommodated in a place of refuge. The directive also requires Member States to designate a competent independent authority with the power to take decisions concerning the accommodation of ships in need of assistance. In accordance with the 2002 directive, the authority may restrict the movement of such a ship or direct it to follow a specific course, give official notice to the master of the ship to put an end to the threat to the environment or maritime safety, deploy an evaluation team aboard the ship to assess the degree of risk, instruct the master to put into place of refuge or arrange for the ship to be piloted or towed. The directive instructs the European Commission to undertake a review and prepare a report by the end of 2011 examining the mechanisms that exist in Member States to compensate ports for potential economic losses as a result of accommodating a ship in distress that are not covered by existing compensation mechanisms and to consider available policy options. BIMCO and ECSA consider that the strengthening of the VTM directive will contribute to safety, while not restricting maritime transport operations unnecessarily.
The Accident Investigation Directive contains common rules on how to investigate maritime accidents in order to facilitate the expeditious holding of safety investigations and proper analysis of maritime accidents and incidents in order to determine their causes and ensure the timely and accurate reporting of safety investigations and proposals for remedial action. The directive also establishes a systematic compilation of information concerning accidents on all vessels carrying EU flags, which will contribute to ensuring the knowledge needed to better prevent accidents in the future. The new rules, which do not concern the determination of liability, apply to maritime accidents involving ships carrying EU flags and accidents occurring in Member States’ territorial sea and internal waters regardless of flag. BIMCO and ECSA support the directive which, once it has been transposed by Member States at the latest on 17 June 2011, will contribute to quality shipping while avoiding unnecessary impediments for trade.
The Regulation on liability of carriers of passengers by sea in the event of accidents will substantially increase carriers’ liability and increase compensation of passengers in case of death, personal injury or luggage damage. The Regulation will incorporate into EU law the 2002 IMO Protocol to the 1974 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea. Strict liability is established for the carrier for passenger damages occurring in relation to the operation of the ship and the shipowner is obliged to take out insurance. The regulation, which will be applicable from the date of the entry into force of the Athens Convention for the Community and in any case by 31 December 2012 at the latest, applies to passenger ships operating seagoing international services. It will also, at the latest by 31 December 2016 and 2018 respectively, apply to passenger ships of classes A and B operating seagoing domestic services. The European Commission will, no later than 30 June 2013 and if appropriate, present a legislative proposal extending the regulation to ships of classes C and D.

Source: BIMCO