Maritime Risk Assessment. Environmental Management

Maritime risk assessment and management has now gained greater concern in view of the need to ensure safety of vessels, people onboard vessels and the environment. Organizations such as the International Maritime Organization have been established and vested with the responsibility of ensuring the safety of offshore operators against any marine hazards. The organization frames rules that stipulate various design solutions based on patterns of previous accidents. Risk is an important topic in the shipping industry that continues to attract the attention of researchers. Generally, efforts of regulating shipping industries are also focused towards ensuring and maintaining safety of creatures leaving in the sea and of people on board vessels.

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Risk management systems primarily relate to the practices, procedures and policies for managing commercial vessels in order to ensure they do not dump their waste materials into the ocean. Maritime risk assessment on the other hand, ensures an effective procedure for offshore operators to determine hazards and guarantee that risks have been minimized to reasonable levels and in the most effective ways. It is vital to have effective and efficient risk management systems in the shipping industry; however, this requires the setting of quality standards.

The success of the International Maritime Organization’s ISM Code risk management system depends on the ability to sense the smallest amount of waste disposal and to rectify the emerging problem before it becomes widespread. It is known in this regard that the shipping industry prefers to adopt approaches that particularly prove to be economically important to them. In the absence of appropriate risk management systems, the shipping industry ought to engage in better practices of discharging their waste into the sea.

Introduction

Risks in the shipping industry continue to remain a major area of concern amongst ship operators and need to be given proper attention through quick and appropriate responses. This implies the need to develop comprehensive risk management systems within the industry. Risk management in this context refers to various instruments used by shipping companies to ensure the safety of vessels, people onboard vessels and the environment. According to Arvanitoyannis (2008), “the characterization of environmental effects envisages identifying those past, present and planned organization’s activities, products or services that have or could have an effect on the environment. It is required to consider the complete life cycle of products/services to assess the environmental effects” (Arvanitoyannis, 2008, p.47). The system ensures development of a safety culture whereby companies can effectively deal with hazards as and when they occur. It also entails establishing a set of guidelines on how risks are managed and how vessels are operated in order to minimize risks. The objective is to provide suitable measures to ensure the safety of the people in the event of occurrence of an accident (Stavins, 2006, p.121).

The International Maritime Organization is vested with the responsibility of ensuring the safety of offshore operators against any marine hazards. The organization frames rules that stipulate various designs and solutions based on patterns of previous accidents. It is the role of this organization to ensure maximum use of risk appraisal procedures in marine operations. It is because of these responsibilities that the application of risk assessment in offshore operations has been given lot of emphasis. Risk assessment refers to the activity of determining risk levels by using diverse techniques such as qualitative and quantitative methods. Qualitative method of risk management involves making a detailed analysis of available data and information concerning maritime risk management. Quantitative risk assessment method involves use of numerical data to assess risk levels. This method provides means of measuring risk consequences and probability of risk occurrence in numeric value and hence calls for careful interpretation. On the other hand, the qualitative risk assessment method entails use of relevant information to determine the level of the risk involved at any given time (Ulven, 2013, p.1). This paper makes a review of the present status, application and appropriateness of the current risk assessment approaches in regard to maritime risks as evidenced in the context of shipping companies by way of their efforts to reduce the number of incidents onboard vessels. The paper particularly examines the complex issues of risk perceptions and discusses the shortcomings of the present systems and regulations by providing comprehensive and effectual solutions in regard to risk management and assessment of risks.

Risk management methodologies

One of the obvious obstacles that hinder development of the shipping industry is its susceptibility to marine related risks and hazards. The most frequently occurring risks and hazards in shipping industries include discharge of waste materials into the sea and formation of effluent that is dangerous for ships and involvement in activities that cause harm to sea creatures. Risks in the shipping industry continue to remain a topic of concern amongst researchers involved in analyzing the industry, which is why it is now faced with new challenges (Hetherington, 2006, p.402). For example, three decades back shipping vessels needed about 50 to 60 people onboard to man all functions but now technological advancement has led to improved ship designs because of which vessels do not need so many people. But at the same time, risks have increased because of enhanced reliance on the ability of human beings, which increases the chances of human faults resulting in accidents. The volume and nature of the business call for adoption of effective risk management methodologies. Risk in this context refers to the probability of loss due to unforeseen occurrences and human actions and errors. In addition, risks in the shipping industry can result from failure of internal systems or by way of natural occurrences. For example, it is known from research studies that accidents are mostly caused because of errors committed by human beings while performing their functions in the organizational setting (Portela, 2005, p. 6).

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According to Georgescu (2011), risk management refers to the process of identifying, analyzing and prioritizing risks. Effective methods and techniques are essential for risk management in the shipping industry. The objective is to ensure implementation of comprehensive risk management systems in order to have the ability to control risks so that they remain negligible and practicable (Georgescu, 2011, p.42). To achieve this capability, the risk management plan must entail ways of determining and assessing potential risks and dangers in the shipping industry. This is vital as it will enhance the safety measures, increase the quality of decisions and reduce incidents involving loss of human lives (Diedrich, 2013, p. 90). In order to ensure adoption of efficient risk management systems, certain measures need to be implemented (Skjong, 2008, p.1289).

Risk management is a complex process that involves the framing of policies and their implementation through concrete action plans. It also involves implementing methods and action plans, as well as frequent evaluation by way of comparing results with the established safety objectives. (Leach, 2010, p. 5). According to Georgescu (2011), the primary aim of risk management methodologies is to ensure that risks are maintained at levels that are within tolerance levels. Shipping is a business that is highly prone to both financial and physical risks and hazards. If this industry is to thrive, it has to adopt new measures and methodologies to ensure systems of controlling hazards and risks (Wilson, 2007, p.369).

In general, insurance plays a vital role in risk management in the shipping industry. It is known that some eventualities associated with the shipping business entail massive financial losses, which is why it is essential to take appropriate insurance coverage to protect all risks. Risk management is an integral part of the shipping business and relates to identification of the risks and their intensities (Georgescu, 2011, p.43). In order to achieve such objectives, it is essential to use quantitative or qualitative methods of risk assessment on the basis of available data. Quantitative methods become useful when numeric data is available and when there is need to estimate the consequences and probability of the risk in numeric values (Organisation for Economic Co-operation and Development, 2007, p.1).

Human factors play a vital role in influencing the effectiveness of risk management processes. According to Diedrich (2013), such resources should be readily available in adequate amounts to ensure effective implementation of risk management processes in the shipping industry. Human factors are imperative in risk management processes in the shipping industry because the industry is significantly reliant on the element of human judgment (Leach, 2010, p. 5). According to Diedrich (2013), it is important to have a well structured methodology for risk management in the shipping industry in order to provide an arrangement for application of human factors. This arrangement is essential because it allows for the provision of insights, intuition, experience and judgment. In addition, it provides diverse sources of information in regard to patterns of risks and hazards faced by the business in the past. Undermining human factors in the risk management process in the shipping business would hinder successful implementation of the process. There are various approaches or methodologies for risk management in the shipping business. The business has mostly adopted the personal, organizational and engineering approaches to implement risk management processes (Joseph, 2003, p.319).

This methodology of risk management assumes that individuals are free agents with the ability to choose between safe and unsafe behaviors (Diedrich, 2013, p. 90). The other risk management methodology relies on using the engineering model. For example, while focusing on the personal risk management approach; shipping businesses focus on the individual’s safety in efforts to prevent accidents leading to personal injury ; “performing each set of activity requires multi-perspective analysis and modelling of all conceivable sources and impacts of risks as well as viable options for decision making and management” (Bichou, 2008, p.5).

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The methodology involving the engineering model focuses on the reliability of engineering processes and on assessments about human reliability. According to Georgescu (2011), “a system of safety management is based on…elaborating clear policies and safety objectives; planning concerning the development of action plans , with the determination of roles and the assignment of responsibilities; implementing the action plans and the methods; periodical evaluation, by comparing the results obtained with the objectives set; and last but not least, improving performance, by identifying malfunctions, periodical updating of the risk evaluation and by taking corrective measures” (Georgescu, 2011, p.44). It is thus apparent that the focus of this risk management methodology is to ensure reliability of the engineering systems in the vessels. In other words, the objective is to ensure that the vessels are reliable and are able to withstand hazards that may occur in the ocean. This approach is similar to the personal risk management methodology because it recognizes the significance of human abilities in risk management. However, in contrast to the personal approach, which considers risks caused by human errors, this methodology suggests that risks occur because of poor human management of engineering resources. According to Leach (2010, p.5), most incidents onboard vessels are caused by the failure of systems that are made and designed by humans. It is in this context that the methodology emphasizes on production of effective human machines, which can withstand diverse conditions without causing risks or adversities. In the shipping business, this risk management methodology ensures use of reliable and well-engineered vessels.

Good and poor practices in the shipping industry

  1. Shipping companies are expected to follow certain risk management guidelines that are framed by the International Maritime Organization by way of its ISM Code. Efforts to regulate shipping industries are directed at ensuring and maintaining the safety of creatures living in sea. It is notable that in the absence of international standards, some shipping companies tend to engage in poor practices of discharging their waste into the sea. The success of the International Maritime Organization’s ISM Code risk management system depends a great deal on the ability to identify even the smallest amount of waste disposal into the sea. This allows for resolving the problems before they assume huge proportions (International Maritime Organization, 2010, p.2). Poor practices adopted by shipping companies result in environmental pollution, which harms all living organisms. Therefore, it is true that human beings have the ability to either preserve or destroy the environment they live in. According to Arvanitoyannis (2008), environmental dumping is a common practice that is evidenced in the shipping industry. This practice is exacerbated by the urge of some shipping companies to have the motive of dumping their waste in the coastal waters of countries that do not have strict environmental laws.
  2. The transfer of waste products from one nation’s territorial waters to that of another is known as trans-frontier shipment of waste. Such disposal of waste proves to be a major threat to sea creatures and to the world at large. This kind of waste disposal is hazardous because it includes varied items such as metallic objects, plastic materials and paper waste that are harmful to living beings in the sea and to the environment (Arvanitoyannis, 2008, p.215). For instance, as ships move from one country to another, they have great potential of dumping their waste products into the ocean. It is known that this kind of discarding into the ocean by shipping companies has been a major environmental issue since the nineteenth century. One major problem evidenced in the shipping industry is the dumping of asbestos into the sea. This problem is becoming a challenge for the shipping industry in relation to environmental pollution. Asbestos is abundantly used in the process of shipbuilding and can be found on different parts of the ship’s body (Liddick, 2010, p. 136). Other potential waste products that might be disposed of by ships include heavy metals, organotins, and the extremely toxic organic tin compound tributyltin. These elements are hazardous to the environment and cause considerable harm to sea creatures and to human beings in general. It is unfortunate that despite introduction of policies by the global community in regard to environmental conservation, the shipping industry has not yet been effectively checked in curtailing the disposal of their waste materials into the sea (Liddick, 2010, p. 136).
  3. Ship dismantling is another example of poor practice evidenced in the shipping industry. The trans-frontier waste is shipped from one country to another and becomes decomposed in the process. As time elapses, ships undergo wear and tear, because of which some of their parts invariably fall into the sea. It is known in this regard that the material used to make ships contains some hazardous components that pose risks in the waters where they happen to fall on account of wear and tear. All these materials pose major health risks to humans as well as sea creatures, in addition to harming the environment (Engels, 2013, p.4). The decomposed parts of ships include harmful elements such as asbestos, oil slush and plastic materials, which pose massive danger to the environment. This practice is apparent in many countries and is evidenced through several studies that have identified most of the emerging economies as well as underdeveloped nations such as Pakistan and Bangladesh that have developed major interests in dismantling of ships. There is a direct relationship between ship dismantling and ocean dumping. Both acts are harmful to the environment and to the safety of workers.
  4. In recognizing the need to conserve the environment, especially the ocean, international agencies have introduced the requirement to comply with codes of conduct that have been implicitly developed as a form of risk management system to be adopted by shipping companies. This combined effort aims at reducing the number of incidents onboard vessels (Ramirez-Llodra et.al. 2011, p.8). However, some shipping companies do not adhere to these established codes; on the contrary, they offload their waste into the sea ocean. This is a kind of water pollution that leads to serious economic and health impacts on marine life as it has the potential of causing massive harm to eco-systems and natural habitats, thus creating large scale risks for the environment. The waste materials dumped into the sea contain large percentage of pollutants and hazardous chemicals, which cause widespread loss of marine life in different parts of the ocean. If such patterns are not controlled, they can lead to the creation of dead zones in the oceans. Most toxic materials dumped into the seas by shipping companies comprise of include dredging materials, manufacturing waste, sewage sludge, and radioactive scrapings (Arvanitoyannis, 2008, p.215).
  5. Prior to the 1970’s, dumping of waste and other materials into the sea was allowed, but in subsequent decades the global community recognized the need to regulate such practices as a means of managing risks associated with environmental protection. Consequently, many international bodies were established, such as The International Maritime Organization, which has the mandate to implement varied forms of risk management systems for shipping companies (International Maritime Organization, 2010, p.2). However, despite the presence of these regulating bodies, some shipping companies still continue to discharge their waste materials into the ocean. The International Maritime Organization has jurisdiction to take measures in ensuring that the shipping industry does not offload or dump waste materials in international waters. Basically, shipping companies are expected to exercise good practices as far as dumping of waste materials is concerned. Ships must adopt good procedures when disposing of oily wastewater and sludge (Dover, 2011, p.8). Good procedures of waste materials disposal require that oily wastewater and sludge be passed though an oil-water separator or through burning sludge rather than directly offloading the waste materials into the water. The entire ship crew is also expected to keep a clear record of each transfer or disposal made by them.

Approaches preferred by shipping companies

In order to manage risk effectively, there is need to analyze all possible implications. Shipping companies are not an exception to other companies because all companies strive to maximize profits. Notably, shipping companies prefer to use approaches that are most appropriate in favoring their business. In the absence of strict laws and governing bodies that aim at checking waste disposal, shipping companies have the tendency of disposing of their wastes into the sea waters as a means of minimizing costs. According to Pollack, (2009) shipping companies are trying their best to reduce the amount of waste materials they produce but their actions are not effective enough to address the issue of environmental pollution. As a matter of fact, shipping companies have adopted and implemented their own applications by way of generating reports about all their actions and the quantities of waste produced by them (Diedrich, 2013, p. 17). A general waste management procedure is clearly in place whereby all shipping companies are held accountable for the disposal of their waste materials. In fact, it is a requirement for shipping companies to make selective collection of waste and to manage the same with the use of the centralized Waste Data Base (Diedrich, 2013, p. 17).

Burritt (2011) has argued that in recent years shipping companies have demonstrated higher levels of responsibility in the context of how they handle waste materials. For instance in Europe, Port of Antwerp has been in the forefront and a pioneer in providing innovative ways to shipping industries on how they can use best practices in risk management and the handling of risks. In order to reduce the risks associated with bad practices, ship owners have been provided freedom to choose collection centres where they would prefer to have their waste collected (Burritt, 2011, p.12).

Practical issues relating to the successful implementation of a risk management system onboard merchant vessels

Risk management systems in the shipping industry were established with the purpose of ensuring safety and reducing the number of incidents onboard vessels (ECM Europe, 2014, p.1). The International Maritime Organization has set standards that all shipping industries are obliged to follow. There are technical standards that have to be followed by vessels using sea waters. The following diagram illustrates how the system works globally because all shipping companies are required to comply with the given systems and procedures:

how the system works globally because all shipping companies are required to comply with the given systems and procedures
Diagram 1. Source: Bichou, K. 2008. Security and Risk-Based Models in Shipping and Ports: Review and Critical Analysis. Centre of Transport Studies. 

It is obvious that safety is paramount to the shipping industries. However, a demoralizing factor is the slow pace at which risk management is being implemented in the maritime industry (Button, 2005, p.43). The entire industry is faced with a lot of issues that are derailing the successful implementation of risk management systems onboard merchant vessels.

International bodies such as the International Maritime Organization have been established and given mandate to fully implement efficient systems of risk management in the maritime industry. The objective of the ISM Code is to improve the safety measures adopted in the shipping industry and to reduce the instances of pollution. Basically, the ISM code establishes international standards that all shipping companies are required to follow, irrespective of their country of origin. Effective implementation of this code is vital in regulating security in the maritime industry (Brooks and Button, 2005, p.1). It is essential to establish a safety culture involving all stakeholders so that they take responsible actions in improving safety and performance of vessels (The World Bank Group, 2014). There are many practical issues that need to be addressed in the context of successful implementation of risk management systems onboard merchant vessels (Bichou, 2008, p.6). According to Pollack, (2009), there is a lot of paper work involved in establishing an efficient risk management system, thus making the whole process too complicated for successful implementation.

Evidently, ISM Code involves voluminous documentation for the shipping companies. Critics argue that some of these processes are irrelevant and do not serve the key purpose of managing risks onboard vessels (Oceans’99, 1999, p.44). Another major issue associated with implementation of the International Maritime Organization’s ISM Code is the lack of sufficient funding. The entire process requires a lot of finance to facilitate its successful implementation. Employees of shipping companies involved in this process are not adequately trained and are thus not able to handle all tasks effectively in mitigating the intensity and occurrence of risks. The mother companies do not offer full support that is necessary to facilitate the implementation process (Portela, 2005, p.9).

Notably, vessels suffer from lack of resources; hence making it difficult to implement the requirements articulated in the ISM Code. For instance, all workers on board are expected to keep a clear record of everything happening including how and where they decompose their waste materials (Asia Pacific Shipping, 2000, p.8). Moreover, establishing a safety culture is not that easy, especially during these hard economic times (Haarstad, 2006, p.12). Risk management systems ensure development of a safety culture through which a set of guidelines are established in regard to how risks are managed and how a company’s vessels are operated to minimize risks. Successful implementation of a risk management system of onboard merchant vessels is vital as it aims to reduce the probability and adverse consequences of hazards and risks (Diedrich, 2013, p. 24). Generally, coming up with procedures, guidelines and techniques to reduce or minimize hazards and risks relative to onboard merchant vessels is fundamental since it prevents occurrence of losses in terms of finances and human lives.

According to Leach (2010), abnormal situations in the context of risk management systems pertain to instances when vessels are unable to effectively adopt risk mitigation measures and to deal with emergencies. For example, there are emergency situations when vessels are unable to ensure the safety of their people onboard because of noncompliance of safety measures prescribed by the International Maritime Organization. Therefore, it is very important that risk management systems of onboard merchant vessels should ensure the enhancement and effectiveness of risks and hazards reduction measures (Dover, 2011, p.27). In this regard, the management systems must ensure commitment on the part of supervisors and ensure effective operational performance by employees that are onboard vessels. International trade greatly depends on the shipping industry, which means that effective implementation of risk management systems is critical to ensure that the smooth functioning of international trade is not hindered by the numerous hazards associated with the business (Arvanitoyannis, 2008, p.211).

According to Leach (2010), implementation of risk management systems in the shipping industry in regard to onboard vessels has been often hindered by lack of sophisticated technology that is required to prevent, detect and mitigate risks and hazards. Risk management of onboard vessels sometimes becomes a challenge due to the vulnerability of the situation and lack of the necessary technological resources needed to ensure effective implementation. Failure of the shipping industry to effectively implement the directions of international conventions that guide shipping operations continues to be an obstacle to implementation of risk management systems of onboard merchant vessels (Diedrich, 2013, p. 63). To ensure successful implementation of risk management of onboard merchant vessels, risk management systems should precisely and clearly detail the practices, procedures and policies for managing onboard merchant vessels. In order to ensure that problems do not occur, risk management systems should ensure development of a safety culture whereby companies do not think of hazards when they occur, but adopt preventive measures through effective utilization of the available resources (Arvanitoyannis, 2008, p.76). More importantly, the shipping industry should ensure provision of adequate and experienced human resources for the successful implementation of risk management systems of onboard merchant vessels (Willis, 2004, p.36).

Conclusion

From the above discussion, it is evident that risks in the shipping industry remain a major issue of concern that needs quick responses. Shipping companies are expected to follow certain risk management guidelines as articulated in the International Maritime Organization’s ISM Code. Efforts to regulate shipping industries are focused on ensuring safety of the environment and of people onboard vessels and of living creatures in the sea. Risk management system is a broad field, but in the context of maritime risk assessment it refers to instruments used by shipping companies to ensure the safety of vessels, people and the environment.

The international maritime organization is vested with the responsibility of ensuring the safety of offshore operators so that there are no marine hazards. There are different methodologies that can be used to access patterns of risks and hazards in the sea. Risk management entails the process of identifying, analyzing and prioritizing risks. Effective methods and techniques are essential for risk management in regard to the shipping industry. As evidenced above, in the absence of enforcement of international standards, some shipping companies tend to engage in poor practices of discharging their waste into the sea.

Enforcement efforts directed at making shipping companies adopt risk management procedures are faced with a lot of resistance from some ship owners that are not open to change or from those that do not have adequate funding to adopt the required technology and to implement the available processes. Nevertheless, successful implementation of risk management systems of onboard merchant vessels is vital in order to reduce the probability and consequences of hazards and risks.

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