SHIPPING AND THE LAW Xth Edition: “The Shock of the New”
The 10th edition of the international conference Shipping and the Law – “The Shock of the New” has ended. Shipowners, institutions, financial experts have met in Naples to look at the great challenges of maritime sector. During Shipping and the Law, the launch of new infrastructures construction in Naples and Civitavecchia ports was announced. The young shipowners on the fight against climate change: we are at the forefront, but we also need commitments from the authorities. The shipowners: we accept the green economy challenges in the perspective of new sustainable fuels and ships, which will be able to shut down their engines in ports.
The Xth edition of Shipping and the Law, the international conference which brings together every year in Naples the top world organizations of shipowners and an international parterre of legal and finance experts in the maritime sector, was held this year on 9 and 10 October in the 14th century ‘Sala dei Baroni’ of the ‘Maschio Angioino’ castle, symbol of the city of Naples which overlooks its port. The event was focused on “The Shock of the New”, a topic linked to the challenges of our time that also the maritime industry is facing.
Among the many participants were the heads of the shipowners’ associations: the president Esben Poulsson and the vice-president Emanuele Grimaldi of the International Chamber of Shipping (ICS), the world assembly of shipowners; the president elect of the European Community Shipowners Associations (ECSA) and member of the Stena group Claes Berglund, the German Thomas Rehder and the former president of the Greek and European shipowners John Lyras; the president of Confitarma Mario Mattioli and Giacomo Gavarone, president of the Young Shipowners Group. “This year in its tenth anniversary – said Francesco S. Lauro, maritime lawyer and creator of the event – Shipping and the Law has dealt with numerous and high-impact issues: from the evolution of balances and political structures, to the new protectionist barriers that characterize the international scenarios; from the increasingly rapid development of science and technology to the introduction of new regulations aimed at defending the environment, limiting emissions and fighting climate change”. Shipowners accept the green economy challenge to Shipping and the Law. New sustainable fuels and ships. Soon ships will be able to shut down their engines in port. “We are entering the fourth industrial revolution that is different from the previous ones because it is also based on communication and connectivity as well as on technology. There are many challenges that await us, starting with the enormous change in the rules on emissions starting from January that brings us to the road to 2050, when the maritime trade sector has committed to halving its CO2 emissions”. This is the scenario described by Esben Poulsson, president of the International Chamber of Shipping, at the opening of conference. Poulsson also stressed the choice made by the UN to establish large marine protected areas in the oceans and that “the challenges on the environment – he said – involve not only the shipowners, but also the ports and we must ask ourselves what to do from the infrastructure point of view. If we want to get ready for the 2050 deadline, we have no time to lose”.
The theme of the environment was central in this edition of the conference: “The world of shipping – explained Francesco S. Lauro – has three horizons before it: from January 2020 we will face the reduction of sulfur emissions, to 2030 we must look to the changes in the world economic scenario – at the purpose, Mr. Hamish McRae, futurologist and professor at Oxford, had a brilliant intervention – while in 2050 there is the goal of halving the emissions of the sector. During our forum in Naples we discussed on how to develop solutions, knowing that not all the ideas coincide but that from this debate new ways would emerge for the maritime industry to face the abovementioned challenges. Environment and sustainability are a unitary and central theme, that’s the reason why we decided to display to the attendees of Shipping and the Law the whole recent speech in New York held by Greta Thurnberger”.
A challenge immediately captured by the shipowner Emanuele Grimaldi, who announced the production of new ships that will respect the ports’ environment, turning off the engines when they are docked and stopping the columns of smoke that rise from the ships in port: “We have ordered – explains the shipowner – 12 new ships and 5 car carriers. The car carriers are the most efficient ever built, they can carry 7-8000 cars and consume less fuel than their predecessors, which carried only 1,500 cars, so they are much bigger and 4-5 times more efficient than in the past. The ferries in production are among the first hybrids in the world, with a very high battery power that allows them to stand still with zero emission while the shafts – the transmission shafts – which are on the main engine pick up the power peaks that recharge the batteries. When it arrives in port, therefore, the ship can completely shut down the engines and have all the necessary electricity from the batteries, which also recharge even when the ship is not stationary thanks to solar panels. Those innovations mean that Naples will soon have some of the most advanced ships in the world and this should encourage a new Neapolitan pride”.
The young shipowners on the fight against climate change: we are at the forefront, but we also need commitment from the authorities. Strong challenges in the debate, which was also attended by Giacomo Gavarone, president of the Confitarma Young Shipowners Group, particularly focused on security, as underlined Claes Berglund, president elect of the European Community Shipowners’ Associations: “We come from a summer in which many ships” – he said – “have suffered attacks and have been stopped or diverted by the governments of some countries for political reasons. These actions cannot be tolerated, and the European institutions must be at the forefront to protect ships”.
The global pressure for the fight against climate change has also involved the Italian maritime sector, which has therefore taken up the challenge, even with the associated risks, as explained by Mario Mattioli, president of Confitarma: “Using fuels – he said – which have a percentage sulfur content of 0.5% compared to the previous 3.5% limit means a reduction in the sulfur component of 85%, emissions will drop but shipowners will also have to use more expensive fuels that have not yet been fully tested, a major concern in the sector. For this reason, many shipowners are looking at LNG (liquefied natural gas) for gas propulsion which has less harmful emissions. Battery-powered ships are also being developed, which are loaded during the journey and when they enter in the ports they have zero emissions, using the accumulated electricity. The commitment is there, even if I always remember that every ton of goods transported by sea emits much less than if carried by air, rail or road”.
During the Conference were even announced the launch of new infrastructures construction in Naples and Civitavecchia ports. The second day of Shipping and the Law was then dedicated to “The Shock of the New: Maritime Infrastructure Fit for the Future”: the session chaired by Francesco S. Lauro, who was in the 90s president of the Port authority of Naples, opened with a reflection on the future of port infrastructures, with interventions by Francesco di Majo, president of the Central-Northern Tyrrhenian System Authority, Pietro Spirito, president of the Central Tyrrhenian Authority and Umberto Masucci, president of the F2i Holding Portuale. These include the new pier for the connection between Rome and Barcelona and the temporary ticket office at the Beverello pier in Naples. Small interventions that however give way to important infrastructural works in the ports of central-southern Italy and which were announced during Shipping and the Law, which dealt with port infrastructures. The first project to start is the renovation of the Beverello dock in Naples, which will start with the construction of a temporary structure that will be used in the construction phase of the maritime station, to be able to proceed with the demolition of the current ticket offices and start with the construction of the new terminal, which will be a modern structure of 2,400 square meters, in which will be present the services for the passengers: from the reception for embarkation-disembarkation, to the ticket offices, from the stop to the restaurant and to the information, for an investment of 18 million EUR. “The preparatory activities for the start-up of the site are underway – explained Pietro Spirito, president of the Central Tyrrhenian Authority – and we are also having an interview with operators and companies working at Beverello to share decisions. In October we will open the construction site of the temporary ticket offices and so we will be able to free the current maritime station for demolition and the start of the new building”. Spirito also underlined the difficulties for port managers in keeping up with a world, such as that of maritime trade, which changes very rapidly: “Despite the crisis and the opinion of experts – he declared – the size of the fleets is in the commercial sector but that is growing also in the passenger sector. This means that the port infrastructures must adapt to the new fleets, a very difficult task because the administrative procedures in Italy are not in step with the times for the challenges we face”. Even on funding for infrastructure projects Spirito has emphasized that in the future “private individuals will increasingly have to be involved in port investments. The public sector must remain the financing of those investments that do not bring profits, for others we must play a role growing the number of private operators”. In the port system of Rome, instead, the construction of the new pier at Civitavecchia is about to start, which will be dedicated to the connection with Barcelona, a twin project with the Catalan city, which realizes one in turn. “It is a work of eight million of euros – explains Francesco Di Majo, president of the Central-Northern Tyrrhenian System Authority – partly financed by the European Union and presented together in Barcelona. Works will begin next week. The biggest development project is but that of the commercial port of Fiumicino, which provides for an overall investment of 500 million euros. For now we have a loan from the Bei 100 million for Fiumicino and we begin with the first small piece, the construction of the fishing dock, which will allow them to no longer dock in the canal port: in the area of the new dock some shipyards that are in the city will also be relocated. We are in the executive planning phase now and for 2021 the tender will start”. Di Majo also stressed that the port of Civitavecchia had from the EU the “ok” and the funds on the 4 million euro project for the last mile of connection on rail that will help the logistics of the commercial port. The theme of the environment was at the center of the discussion at Shipping and the Law also on the last day of work: a challenge that even the young shipowners have collected, but asking for a commitment on the part of all those involved. “We are already the greenest carriers in the world – explains Giacomo Gavarone, president of the Confitarma Young Shipowners Group – but we have an ever greater commitment, as shown by the cutting of sulfur emissions that comes into force in January. The Shipowners are investing significatively, but we cannot continue without infrastructure. I am thinking of Liquefied Natural Gas, which in Italy does not have yet a refueling point. I know it is not easy for the authorities to set it up, but for example in Barcelona they are doing it. You cannot expect the shipowners who are already investing in spite of the crisis: I remember that mounting a scrubber, which reduces the emissions of ships, costs a million and a half euros, yet the owners are doing it, showing that they are ready for every effort but cannot pay for the ticket alone. In the companies there are also investment funds, which they want useful: it can be explained to them that from the fight against climate change there will certainly be no gains, but it becomes difficult to envisage a financial bloodbath”. As per tradition, Shipping and the Law ended with the analysis of the moment on the maritime trade from the legal point of view, in a country like Italy where, underlined Francesco S. Lauro: “It is absolutely necessary to intervene to unlock the ratification of international conventions with respect to which Italy participated in the drafting, then adhered but “forgot” to complete its ratification. For example, the failure to deposit the instrument of ratification of the London Convention on Limitation of Liability for Maritime Credits is inconceivable, an act that the maritime world has been waiting for years and that in 2012, with the introduction in Italy of the legislation on the insurance of shipowners for maritime credits that presupposes the ratification of the Convention, leaves Italian shipowners in a position of great uncertainty and inferiority compared to those of other countries. Failure to ratify does not, in my opinion, depend on a political will in this sense but simply by forgetfulness, slowness, in short by the usual negligence. It is a masochistic delay that seriously damages the country and its maritime industry on which the current government must act immediately”. The final session of the conference, “The Shock of the New, Legal Responsibility: AI, Future Fuels, Brexit and Others” then examined the legal developments in the sector but also the problems connected with the imminent breakthrough of the Sulfur Cap, the limit to emissions of sulfur launched by the International Maritime Organization and that the ships will have to respect from January 2020. The topic was introduced by a keynote speech by prof. Mans Jacobsson, historic director of International Oil Pollution Compensation Funds (IOPC), who addressed the issue of legal challenges posed by unmanned ships. The round table was chaired by Clive Aston, past president of the Association of London Maritime Arbitrators (LMAA) and by Jonathan Lux, mediator, arbitrator and barrister. It saw the contributions of: the Italian Association of Maritime Law (AIDM) president Giorgio Berlingieri who spoke about the 120 years of the Association and of the shipping law journal ‘Il Diritto Marittimo’; James Leabeater QC, barrister of 4 Pump Court, which examined the legal challenges deriving from Brexit; Paul Schelfhout of SMIT, who talked of the (legal) challenges with the transboundary movement of hazardous waste and disposal arising from the Maersk Honam salvage; Tiejha Smyth, deputy director (FD&D) of the North of England P&I Association, who discussed the theme of the new challenges deriving from the new Sulfur Cap. Shipping and the Law organizer and founder, Francesco S. Lauro, introduced the theme of the incomplete ratification of the Liability Limitation of Maritime Claims Convention (LLMC) , “An Old Story soon to be New’”. Particularly interesting resulted the interventions by: Bruno Castellini, partner of Jones Day, who discussed challenges presented to commercial law and business lawyers by the development of new technologies; of Mark Clough QC, of counsel of the Studio Legale Lauro, who emphasized the need for ports and terminal operators to understand the rights and obligations provided by new EU regulation including state aid in the context of terminal licenses and leases, and the challenges resulting from the ever growing market power of PRC China in this sector; by David McInnes, partner of BDM Law who gave a presentation on the future of international maritime dispute resolution; and by David Pitlarge, partner of Hill Dickinson LLP, who commented on the shifts in the handling and processing of legal claims and on the changing shape of law firms.
Over the past nine years, Shipping and the Law has become an annual appointment for Italy’s maritime industry, building a reputation for high-quality debate in a friendly and informal atmosphere. The event provides an excellent networking opportunity for Shipowners, Charterers, Bankers, Underwriters and P&I Club Managers, leading Maritime Lawyers and Arbitrators, and Political figures from Italy, Europe, and the World. This exclusive event, scheduled every October, takes place in Naples, home to over half of Italian tonnage. As with past editions, the event will include debate from industry leaders on the latest and hottest issues in shipping.