IACS will emerge stronger after Brussels probe

Source: Lloyds List

THE International Association of Classification Societies will emerge stronger and with a renewed sense of unity following its commitment to the European Commisssion to open its membership, the organisation’s immediate past chairman said today.

Oh Kong-gyun, who is also chairman and chief executive of Korean Register of Shipping, also indicated that the European Commission’s investigation and IACS’ subsequent commitment had ended any lingering thoughts some class societies may have had about creating a “super-IACS”.

He told Lloyd’s List that when the European probe started, class societies “realised staying together was more beneficial”. Fears about the creation of a super-IACS surfaced eight years ago when Lloyd’s Register, Det Norske Veritas and ABS said they would embark on a tougher ship safety regime than IACS.

Dr Oh added that maintaining IACS as the umbrella organisation for class societies would make its contribution to the maritime community much stronger.

He said the commitment IACS gave to the European Commission to widen membership was “good for the future of IACS and makes IACS an even more stronger organisation”.

The commission launched its probe into possible anti-competitive practices within IACS in January 2008. While the commission did not find any infringement of competition law, in a public statement last week, the commission said it had “adopted a decision that renders legally binding commitments offered by IACS” to address commission concerns that IACS may have infringed rules prohibiting restrictive business practice.

The committments made by IACS include the setting up of “objective and transparent membership criteria and to apply them in a uniform and non-discriminatory manner”. These included detailed rules, such as clear deadlines, for the different steps of the membership application, suspension and withdrawal procedure.

IACS also agreed to ensure that classification societies that are not members of IACS will be able to participate in IACS’ technical working groups, and to set up an independent appeal board to settle possible disputes.

In its statement on October 14, the commission warned that if IACS broke its commitments, the commission could impose a fine of up to 10% of the organisation’s total turnover, without having to prove any violation of commission competition rules.

Dr Oh, who was IACS for much of the time the investigation was underway, said that as a vice-chairman, challenges still remained because the group still has to implement the promises made to the commission.

He added that as a lead technical advisor to the International Maritime Organization, IACS needed to “fortify its position within the IMO”, which included devoting resources to research and development.

Mr Oh said: “My job is to push ahead with all the objectives. The ultimate objective is safe shippng and cleaner seas.”