Environmental, Social and Governance (ESG) principles and reporting are highly relevant to the maritime sector, which faces issues such as emissions of greenhouse gases and other air pollutants, recycling, ecological impacts, business ethics, employee health and safety, as well as accident and safety management. About 90% of global trade is transported by sea and the shipping industry accounts for nearly 3% of the world's carbon dioxide (CO₂) emissions. The industry is under immense pressure to become cleaner and greener.
Numerous shipping companies and maritime service providers have adopted Corporate Social Responsibility (CSR) codes. ESG and CSR allow for: (i) the growth of the organisation and an improvement in its reputation; and (ii) environmental protection that will save marine species and the future of humankind.
The International Maritime Organisation (IMO), as the international governing body for shipping, sets out several regulations to protect the environment, through the International Convention for the Prevention of Pollution from Ships (MARPOL), safety of workers through the Safety of Life at Sea Convention (SOLAS) and the welfare of shipping professionals through the International Labour Conference-Maritime Labour Convention (ILO-MLC).
CSR is not imposed on entities but rather adopted by them. Making it mandatory for maritime organisations to comply with CSR would help the shipping industry to: develop green ships, from building and operation to scrapping; ensure the welfare of ships’ crews in terms of safety, security, health and communication; and go a step further than IMO and other international regulations to ensure crews’ enjoy basic rights.
Bunkering and Ship-to-Ship Transfers Codes of Practice
The South African Maritime Safety Authority (SAMSA) has published drafts of the Bunkering Code of Practice and the Ship-to-Ship Code of Practice for Cargo Transfers (Codes).
In September 2022, SAMSA published Marine Information Notice 10-22. This explained that SAMSA, in collaboration with South Africa's Department of Transport and National Ports Authority, had updated the Codes because of several oil spills along the South African coastline (specifically in Algoa Bay) during bunkering activities between 2016 and 2019. As a result, the government had reviewed all policies, procedures and processes for the application, approval, and management of these activities.
The stated purpose of the Codes is to ensure that bunkering / STS transfer operations are conducted with zero harm to the marine environment. The code details the requirements for accomplishing safe bunkering / STS transfer operations to support commercial marine activity.
The Codes are underpinned by the principles of consistency, fairness, objectivity and timeliness in each application for bunkering/ STS transfer approval. SAMSA will ensure that all applications for bunkering licences are dealt with in a transparent manner, within three months from the date that a full and complete submission is made, and that the applicant is advised of the outcome of the application within the stated period.
The various role players will co-operate to ensure that bunkering / STS transfer operations are conducted in an environmentally safe and efficient manner. Entities involved in bunkering operations are encouraged to advise SAMSA about challenges and make suggestions to promote safe operations, considering new technologies available and their benefit.
While SAMSA has invited the public to comment further, it aims to release both Codes as soon as possible.
Marine Pollution (Prevention of Pollution from Ships) Amendment Bill
A further development in the maritime sector is the Marine Pollution (Prevention of Pollution from Ships) Amendment Bill (B5-2022) (MPPPSA Bill).
The MPPPSA Bill aims to: amend the Marine Pollution (Prevention of Pollution from Ships) Act, 1986, to give effect to Annex IV of MARPOL; to incorporate the 1997 Protocol to give effect to Annex VI of MARPOL; and to provide for related matters.
Annexing MARPOL to the Bill means that it will be incorporated into South African law and will have legal force.
In addition, the MPPPSA Bill empowers SAMSA to issue technical standards for dealing with marine pollution from ships on such matters as may be prescribed by regulation, which will have the force of law.
The Bill expands on the Minister's powers to make regulations to include the following:
"(e) To make regulations relating to the prevention of air pollution from ships;
(f) relating to the prevention of pollution by sewage from ships;
(g) relating to the removal of endocrine disrupting substances from sewage streams before it is treated and released;
(h) relating to the permitted types of emission abatement equipment;
(i) relating to the requirements for the disposal of waste generated by the mitigation equipment;
(j) relating to accredited laboratories eligible to test the fuel samples and the costs;
(k) relating to the designation of Emission Control Areas (ECA);
(l) relating to the enforcement of protective measures in particularly sensitive sea areas and other special areas; and
(m) on generally any other ancillary or incidental administrative or procedural matters that are necessary for the proper implementation or administration of this Act.’’.
Opportunities for the future
ESG is gaining traction in various sectors, including the maritime sector. But there is still a lot of work to do to raise standards. Engagements such as the upcoming COP27 in Sharm el-Sheikh, Egypt between 6th – 18th November 2022 are a starting point for figuring out a sustainable way forward.
Written by Andre October, Partner, Sheena Dias, Partner, Sharmila Naidoo, Senior Associate & Lesiba Legodi, Associate from Webber Wentzel
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