Urgent reforms needed for the UK to compete globally
To transform the UK Ship Register so that it provides a high-quality, prompt and responsive service to its shipowners and attracts tonnage to the UK flag.
The UK-registered merchant fleet is at the core of Britain’s maritime industry and the Red Ensign at the centre of its identity as a maritime nation, providing an assurance of quality and enabling UK-flagged ships to trade freely around the world. British shipping companies are, of course, free to register their ships wherever best suits their business – but ships flagged in the UK are more likely to be owned and managed in the UK, thus earning wealth for the country. There is also a greater likelihood that UK-flagged ships will be crewed by British seafarers, so contributing to the maintenance and renewal of the maritime expertise and experience on which the wider sector depends. The health and sustainability of the maritime sector depends on the health and sustainability of the UK-registered merchant fleet.
In 2015, the fleet measured 13.7 million deadweight tonnes, having increased modestly over the previous 12 months. However, the fleet remains 18% smaller than five years ago and still only accounts for 0.8% of global tonnage. As a badge of quality, the UK flag is attractive to shipping companies, and its fees are competitive. Its disproportionately small share of the world fleet is attributable, in large part, to the poor service currently provided to shipping companies by the Maritime and Coastguard Agency (MCA). Its levels of service consistently compare unfavourably with those of other ship registers, particularly in relation to its core function of flag-state surveys and technical advice on statutory requirements. A much stronger focus on customer service is needed if the MCA is to compete with other ship registers and attract tonnage to the UK register.
Specifically, the MCA needs to welcome operators of quality tonnage and facilitate the flagging of their ships into the UK. Bringing onto the UK flag a ship that is already flagged on another quality register should be a simple and quick administrative process, which does not involve the MCA questioning the judgment of its counterparts or demanding that the ship be modified. The MCA also needs to define clear standards for routine elements of its core flag-state service, such as guaranteeing that a surveyor will attend a UK-flag ship within six hours of a request from the shipowner and issuing ships’ certificates immediately after successful completion of a survey/inspection. Equally, when approached for specialist advice on the interpretation of a particular International Maritime Organization (IMO) requirement – or on how a generic provision applies to the specific circumstances of a given ship – the MCA needs to provide advice promptly and accurately, to enable shipowners to meet their customers’ requirements.
If such reforms were made, the UK Chamber of Shipping and its partners would work closely with the government to promote the UK flag to international companies.
To increase the number of cadets to at least 1,200 per year by 2020 and reduce the cost of cadet training through the SMarT Plus strategy.
Government Support for Maritime Training (SMarT) funding provides £15m for seafarer training through programmes approved by the Merchant Navy Training Board (MNTB). The fund currently trains some 750-800 cadets per year. The Government has guaranteed that SMarT will remain for the lifetime of this parliament, with a review to be carried out to ensure its ongoing effectiveness and efficiency.
UK seafarer training is believed to be the second-most expensive in the world, which acts as a deterrent to companies investing in Britain’s workforce.
The UK Chamber, MNTB and the Nautilus International trade union are working together to boost the numbers of British seafarers, and are proposing a new, enhanced programme called SMarT Plus.
If implemented, SMarT Plus would result in significant additional funds being provided by the Government to cover the costs of academic courses within the cadet programme – for example, foundation degree, Scottish professional diploma and higher national diploma (HND), but not higher national certificate (HNC) – plus related accommodation and subsistence costs. In return, employers would commit to employing newly qualified seafarers for at least one year. This would offer a means for junior officers to progress more easily in their careers, at a cheaper cost to the employer.
If the existing SMarT fund was doubled, it would increase the total further education spend across the UK by less than 0.3%, suggesting the SMarT Plus option would be good value for money for the Government and companies. It would also significantly increase the likelihood of job creation for British seafarers.
To provide a level playing field for the British supply chain in the awarding of government contracts.
Oil and gas
The UK is one of the main producers of oil and gas in the North Sea, generating more than £40bn of revenue each year and contributing £2.2bn in production tax in 2014/2015. The sector supports more than 330,000 jobs, with around 200,000 people employed in the supply chain (Oil & Gas UK, 2016).
Decommissioning is a new industry that will involve the removal of the large installations from the North Sea. Over the next 35 years, the sector could employ 40,000 people and be worth £50bn. If the UK becomes the first country to initiate decommissioning work, British companies will be in an excellent position to export their expertise to other nations. The costs of decommissioning are high – it is suggested they will exceed £30bn over the next 15 years, although the UK Government has introduced a Decommissioning Relief Deed, reducing the costs by 50 per cent.
The UK Continental Shelf (UKCS) has long been regarded as one the best places to develop offshore wind and tidal farms, with the largest installed offshore wind capacity in the world. Under a strong growth scenario, the sector could deliver £7bn gross value added to the UK economy in 2020/2021 and support more than 30,000 full-time jobs. However, a firm commitment from the Government on a domestic employment development strategy is missing (IRENA-GWEC)
The offshore support vessel (OSV) sector is essential to the UK’s offshore supply chain. British companies that operate these vessels have a leading reputation in the oil and gas and renewable energy sectors. They offer a wide range of support services, including: rig supplies; emergency standby cover; towage; anchor handling; diving support; subsea intervention; and construction. The recent fall in oil prices, the decline of oil and gas production levels from the UKCS, and the delay of decommissioning projects have put great pressure on the UK’s supply chain. This has resulted in a considerable number of vessels being phased out of commercial operations and the loss of thousands of jobs ashore and at sea. In addition, protectionist legislation in other markets – such as the USA and Brazil – limits the opportunities for UK companies to operate overseas.
The UK Chamber does not seek similar protectionism for the sector, but it believes strongly that the Government should provide a level playing field for UK companies by applying criterion of greatest economic benefit to Britain when awarding contracts for work in the oil and gas and offshore renewables sectors, and in cable laying. It should consider the extent to which HM Treasury will benefit – from greater tax revenues and reduced expenditure on social security in respect of people who are able to join or re-enter employment – when considering bids for work on projects in these sectors. If contracts are awarded to foreign companies – even when UK companies have been available to carry out the work – the funds invested by the Government are going overseas, instead of being ploughed back into the UK economy through increased employment and income. Bidders should be required to set out the minimum UK supply chain content that they would use as a condition for entering the tendering process.
To provide funding to the dedicated maritime education and training institutions to update their premises, infrastructure and facilities to match the highest standards of provision throughout the UK, and to employ dedicated staff with relevant seafarer expertise and certification.
There are a small number of further and higher education establishments in the UK that provide seafarer education and training programmes. These facilities are either based on a specific maritime campus or integrated within the educational facility as a whole. UK seafarer education, training and certification is widely prized, and attracts considerable numbers of overseas students who want to train as seafarers, as well as non-UK seafarers seeking higher-level certification training. The UK also provides expertise and training to other countries. However, the condition of the premises and infrastructure of each establishment is variable, as is the equipment available at each – including ship simulator suites and related technology for learning. A block funding grant should be made available to each of these establishments to make their facilities world class so they can provide learning environments that are second to none, with regular updating as required.
In addition, the salaries that educational establishments are generally able to offer are not conducive to attracting seafarers certificated at higher levels and with wide seagoing experience. Such people command high salaries while working at sea, and many do not pay tax on their earnings – so those who wish to make a move ashore into the education profession, to pass on their knowledge and train future generations of seafarers, currently have to take a considerable salary cut. To attract the best of such seafarers, salaries at educational establishments need to match those that can be achieved at sea.
To transform the seafarer written and oral examination system and certification process into an effective, efficient and cost-effective service that meets industry and seafarer needs.
The current examination system and process for issuing seafarer certification needs to be overhauled to ensure it is: educationally rigorous and takes into account current practice; responsive to industry and seafarer needs in terms of the availability and frequency of oral examinations and the suitability of written examinations; and cost-effective, using current techniques and good practice to issue certificates of competency and related documents efficiently.
At the moment, a letter of initial assessment (LIA) – required by those with existing qualifications and expertise (including RN officers) – and a notice of eligibility – required by officer cadets and seafarers to apply for an oral examination – can take many weeks to process, so delaying the opportunities for seafarers to gain certification. The severity of the delays can have a deleterious effect on career progression: officer cadets may suffer ‘knowledge fade’ because of the extended period of time between completing their education and training course to being able to book and take the oral exam. Those with existing qualifications and expertise cannot organise and undertake the identified training and/or sea time until the LIA has been received; this can take many months – we are aware of more than five months in one instance and this does not appear to be untypical.
The written examination system would also benefit from a complete overhaul, to take advantage of current practices and certification – similar to the way in which the DVLA now requires people to pass a theory exam before applying for their driving test. Theory tests are multiple choice, available on demand in a considerable number of locations, and results are provided immediately on completion of the test. While this may not be relevant to all aspects of seafarer knowledge-based testing, practical elements to support and confirm specific knowledge could be assessed through simulated activities on portable devices. This would not negate the need for the oral examination, which is considered to be fit for purpose and of valued rigour. The syllabus requirements for all the examinations will need to be up to date with current good practice and technology on board vessels, and cover the base-level requirements of STCW (the international seafarer training regulations) in an appropriate and pragmatic manner.
The examination and certification system should provide:
- notices of seafarers’ examination eligibility within 10 working days of an application by an eligible applicant
- oral examination slots within a month;
- certificates of competency within 10 working days of passing an oral exam
- letters of initial assessment within six weeks of application
- automatic and immediate reimbursement of any application fee in all cases where these standards are not met.
To transform the Trailblazer apprenticeship development process in England to meet employer and industry needs properly.
The Trailblazer development process is hugely bureaucratic, and has rigid policy requirements that are predicated on ideological dogma and are not differentiated to provide for industry requirements and effective training practices that have identified value, rigour and quality assurance. Seafarer education and training arrangements within the shipping industry are robust, have been developed over time, and are monitored and updated constantly to ensure they meet industry needs. These arrangements are developed and put in place through the MNTB, the shipping industry’s skills body, which is constituted by employers, social partners and the maritime education and training institutions, in conjunction with the Maritime and Coastguard Agency – the industry regulatory body. All training programmes include an appropriate educational qualification, practical training, and application of developing skills on board ship to meet the regulatory sea-time requirements, and are a partnership between employers and education with trainees. The programmes are approved through the MNTB and go through an annual reapproval process to ensure that the industry national occupational standards and STCW are met.
The current Trailblazer requirements and process take no account of existing good practice, and employers have to jump through hoops of differing – and constantly changing – size. These bear no relation to the practicalities and realities of the industry, which operates within a strict international regulatory regime and employs seafarers from all parts of the UK, as well as from overseas. For example, it is completely unacceptable and untenable that the current industry training for entry into enclosed spaces cannot be included as a set course within the apprenticeship standard – yet this is what apprenticeship policy dictates. Likewise with a new Maritime Caterer apprenticeship at rating level, which is not allowed to include specific food safety qualifications or a cooking qualification that would bring valuable coherence to the range of qualifications that shipping companies use when recruiting staff.
The validity, rigour and quality assurance requirements of Trailblazer apprenticeships are not being questioned, but should be at the core of developments for new apprenticeships where none have existed previously. However, where existing systems and processes are demonstrably valid and rigorous, and assure quality – and are fully supported by employers – they should be recognised as apprenticeships where requested by the industry, and certainly for the purposes of accessing the new apprenticeship levy funding. Given that the Scottish government is consulting on wider use of such levy monies, which will probably include current seafarer training programmes as approved by the MNTB, an iniquitous system – and funding – of seafarer training between England and Scotland may be in danger of appearing. This will be to the detriment of shipping companies, with reduced opportunities for young English nationals to embark on a career in the industry.
To implement Directive 2015/1794 in the UK.
Directive 2015/1794 amended the EU directives on protection of employees after their employer’s insolvency, European Works Councils, the information and consultation of employees, collective redundancies and transfer of undertakings as regards seafarers. Most of the amendments bring these directives into line with current UK law. However, the amendments in respect of transfer of undertakings provide important confirmation and clarification that a transfer consisting exclusively of one or more seagoing vessels is not a transfer of an undertaking for the purposes of the directive.
This is highly significant because a ship is a uniquely mobile asset, and the buying, selling and chartering of ships is a key component of the business of a shipowner. Decisions need to be taken rapidly to maximise the benefit from the prevailing market conditions – making the consultation requirements of the directive (and UK law) wholly impracticable. When a company sells a ship, the crew members serving on board are either retained by the company and deployed on different ships, or discharged. Any requirement that the crew must transfer with the ship will reduce the attractiveness to a buyer and will not suit members of the crew if the ship is to be put to use in another part of the world.
This directive was developed by the European social partners for the maritime transport sector and has the strong support of the UK Chamber. It is very important that this directive is implemented while the UK remains a member of the EU. The transposition deadline is 10 October 2017.