Transparency International Urges IMO to Establish Stronger Governance Framework

The International Maritime Organisation (IMO) is at risk of unresolved conflicts of interest due to shortcomings in its governance, according to preliminary key findings of a new study by Transparency International.

Private shipping-industry concerns could have undue influence over the policymaking process at the IMO, concluded the anti-corruption organisation. This could undermine the UN agency’s ability to effectively regulate greenhouse gas (GHG) emissions from maritime trade. According to a report by the European Parliament, the shipping industry could contribute up to 17% of global CO2 emissions by 2050 if left unregulated.

Ahead of critical meetings at the UN International Maritime Organization (IMO) which commence on 3 April, the International Chamber of Shipping (ICS) says that governments must compromise to help IMO agree an ambitious strategy for the further reduction of CO2 emissions by shipping that will match the expectations of the Paris Agreement on climate change. “Governments on all sides of the debate are going to need to show far more willingness to compromise on their current positions or put at risk an agreement on a meaningful strategy. This would greatly undermine the authority of IMO and the future sustainability of the shipping industry” said ICS Chairman, Esben Poulsson. “Agreement upon a mid-century objective for the total reduction of CO2 emissions by the sector, regardless of trade growth, will be vital to discourage unilateral action and to provide the signal needed to stimulate the development of zero CO2 fuels” Mr Poulsson added. “But the very high level of ambition proposed by certain EU Member States – a 70 to 100 percent total cut in emissions before 2050 – is unlikely to achieve consensus support.” Mr Poulsson remarked “While ICS does not fully agree with them in every respect, alternative proposals made by China and Japan merit serious consideration and could form the basis of a possible compromise. China in particular seems to have made a real effort to move away from its previous opposition to establishing CO2 reduction goals for the sector’s total emissions. If EU nations want a global agreement they should acknowledge this by similarly modifying their own positions.” In a briefing note to its member national shipowners’ associations, ICS suggests that if IMO was to set an initial objective of cutting the sector’s total CO2 emissions by, for example, 50 percent, rather than 70 to 100 percent, this would still require a major improvement in ship efficiency over ‘business as usual’. When account is taken of the anticipated growth in maritime trade, ICS says this would still only be possible with the widespread use of zero CO2 fuels. “A mid-century objective similar to that proposed by Japan – which might also enjoy support from nations like China if EU nations were willing to compromise – would still provide a compelling signal to the industry. This should also be sufficient to stimulate the development of zero CO2 fuels leading to a 100 percent CO2 reduction in line with the ambitious vision which IMO must agree” said Mr Poulsson. ICS and other industry associations have previously proposed the need for an ambitious vision in the IMO strategy, making it clear that the ultimate goal is the elimination of all CO2 emissions from international shipping (i.e. 100% reduction) sometime between 2050 and 2100, or as soon as the worldwide availability of zero CO2 fuels makes this possible. In advance of zero CO2 fuels becoming available globally, the industry has also proposed that IMO should adopt the following objectives: Objective 1 – to maintain international shipping’s annual total CO2 emissions below 2008 levels; Objective 2 – to reduce CO2 emissions per tonne-km, as an average across international shipping, by at least 50% by 2050, compared to 2008; and Objective 3 – reduce international shipping's total annual CO2 emissions by an agreed percentage by 2050, compared to 2008, as a point on a continuing trajectory of CO2 emissions reduction.

Image credit: Roberto Venturini/wikimedia.org

Transparency International’s study, which will be published in full in May 2018, assesses three dimensions of the IMO’s governance structure: transparency, accountability and integrity. A summary report released today raises serious concerns:

Journalists indicate that they are unable to report freely on IMO meetings. Non-profit organisations with a consultative membership of the IMO can face expulsion if they criticise the agency or report on country views, for example.

The majority of the world’s commercial fleet (52 percent) is registered in only five states – Panama, Liberia, the Marshall Islands, Malta and the Bahamas – many of which are known as tax havens for ships. Together, these five states contribute 43.5 percent of the total funding from the IMO’s 170 member states. These countries potentially have exaggerated weight in the IMO policymaking processes, particularly when no mechanism exists to protect against undue influence.

Governments are able to appoint employees of corporations, including shipping companies, to their delegations, and they have dominated some delegations. These private-sector delegates can determine their government’s position on IMO policy and are not subject to conflict of interest rules nor to a code of conduct.

The report, however, notes that even in the absence of a comprehensive access to information policy, transparency about the IMO’s administration is high, and that information about the remit, powers and rules of procedure of its assembly, council and committees is easily accessible. The IMO itself is not responsible for who member states appoint to their delegations.

“The IMO was assigned the task of limiting and reducing emissions from shipping under the Kyoto Protocol back in 1997,” said Brice Böhmer, coordinator of the Climate Governance Integrity Program at Transparency International. “However, it took until 2016 for the IMO to even agree on a roadmap towards an initial strategy, due in 2018, and a revised strategy, due only in 2023. A well-functioning organisation’s governance structure should enable decisive action, but the governance flaws identified by our research suggests that this is not happening at the IMO because policy-making could be overly controlled by private companies.”

Transparency International urges the IMO to establish a stronger governance framework. The agency should engage in a transparent process of open dialogue with its external stakeholders (including civil society and industry), to improve transparency, ensure decision-making processes reflect the public interest and apply robust integrity rules and measures.

There should be no delay in action to combat climate change. The Intersessional Working Group on GHG Emissions from Ships meeting in London today should set ambitious targets for reducing emissions in line with the Paris Agreement, and begin taking measurable action now.

“A guiding principle of UN system is that member states must represent citizens’ interests. At the IMO, this could end up being undermined by corporate participation in the place of nation states,” said Rueben Lifuka, vice chair of Transparency International and an environmental consultant. “The IMO has an integral role in helping the shipping industry meet UN Sustainable Development Goal 13 on Climate Change, and Goal 14 on Oceans. Ultimately, it must reform its governance structure to promote transparency and ensure the voices of citizens – alongside industry – are heard.”

Press Release: gsccnetwork.org

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