shipping sector

Shipping sector and Brazil’s Vale actively impede climate regulation, study says

Study indicates that large maritime commerce groups such as ICS, BIMCO and WSC are actively and collectively “obstructing” global climate change policies related to the shipping sector. 

A new study by British think tank Influence Map establishes a trend of active efforts on behalf on many shipping companies as well as Brazilian commodity exporter Vale to weaken a United Nationals climate agreement proposal affecting maritime transport.

The report, which is being released together with the new round of talks on shipping sector greenhouse gas emissions which began last Monday in London, reveals that the maritime sector has aggressively pressed the UNited Nations in order to obstruct climate change initiatives. This was an attempt to continue to be the only industrial sector in the world currently not regulated by carbon reduction measures.

A 2015 report by the European Parliament estimated that, by 2050, the maritime sector may become responsible for 17% of global greenhouse gas output if it continues to not be regulated. In spite of this, the maritime transport sector remains out of the UN’s Paris Agreement’s reach.

The study by Influence Map reveals that in the most recent World Trade Organization environmental committee, 31% of the countries were represented not by diplomats but by parties with directly related commercial interests. The WTO appears to be the only UN agency that allows such broad corporate representation in its policy making process.

The study shows that the majority of nations that have substantial representation by commercial actors in their delegations appear to have less interest in climate change reduction measures. This includes Brazil and Vale, which sent 5 delegates to the WTO conference in London this June. During the preliminary discussions for the Marine Environment Protection Committee (MEPC) meeting in July, Brazil was criticized for obstructing progress on climate legislation.

As well as Vale, the study points out that large maritime commerce groups such as ICS, BIMCO and WSC are actively and collectively “obstructing” global climate change policies related to the shipping sector. The study states that the transport sector has been able to maintain its business model in relation to carbon emission due to its influence on the regulation process.

Regulation has been paralyzed by powerful shipping associations with the International Chamber of Shipping (ICS) leading the efforts to oppose action on climate change by the WTO.

ICS, together with BIMCO and the World Shipping Council, have acted in conjunction to delay implementation of any climate regulation policies until 2023. The lack of transparency in the shipping sector on emissions contrasts with the rising demand for it by investors. Changes caused by future policies are hard to predict and investors in shipping companies should consult with them to see what they are doing to help abate climate change.

In this context, another reason to worry about Vale is its complete lack of transparency when it comes to risk. The study reveals that the company has been silent to its investors and interested parties in regards to its position on minimizing carbon output in the transportation of commodities.

One of the most notable exceptions is market leader AP Moller-Maersk which transparently releases its positions on climate change and which appears to support ambitious regulation on the matter. Other progressive corporate voices in the sector has also recognized the need for more action on climate change.

Maersk was recently accompanied by the Swedish company Stena Line as well as Scandinavaian commerical associations which publicly support action to decarbonize the shipping industry. Such action suggests potential for a future coalition of progressive voices in the shipping industry to promote broader transparency of corporate climate policies within the WTO.

The report can be read here.

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