Kaiun, March, 2003
The Japan Shipping Exchange

Green Award is a global activity

Participation of Japan, a maritime nation, is important

Green Award Foundation, a quality shipping promoter, was invited to the "International Symposium on the Promotion of Quality Shipping", which was held in Tokyo by the Institute for Transport Policy Studies. Green Award Foundation has used the opportunity in actively visiting the Japanese shipping related institutions in order to deepen the understanding of the concept and their activities. Mr. Hans De Goeij (Managing Director), Mr. Jan Fransen (Deputy Managing Director) and Mr. Masato Shinohara (Management Consultant) have talked to us. (Held on 16th January)

Interviewer: During this visit to Japan, it seems that you have visited many shipping related institutions, calling out their participation in Green Award. How was their reaction?

De Goeij: They have showed great interest in the incentive scheme of Green Award, which combines both safety and environment. I think whether to introduce Green Award\'s scheme to the ports, which have already invested in their own incentive scheme, is widely related to their view on ecology. It could be said that this visit to Japan is the beginning of the discussion about the introduction of the scheme.

Interviewer: When contemplating to work with Green Award, would there be any obstacles in the way for Japan?

De Goeij: It is perhaps still too early to answer that question. The objective of the visit is to investigate the actual circumstances of Japan with regard to incentive schemes. Naturally, Green Award scheme is one of the environmental policies, so the national government takes a great role in it. Therefore, we have also spoken to the Japanese government.

Shinohara: This time we have focussed on getting Green Award and its executives known to the Japanese people; throughout the country if possible. Then, it comes to the point of how the next step should be. I think our task has been successfully accomplished.

Interviewer: Could you tell me about your visiting list please?

Shinohara: The Ports & Harbours Bureau and the Maritime Bureau of the Ministry of Land, Infrastructure and Transport, and the port managers of Chiba, Kawasaki, Yokohama, Nagoya, Osaka and Sakai Senboku, at all of which we received a warm welcome. We also visited the Japanese Association of Ports and Harbours and the secretariat of the International Association of Ports and Harbours (IAPH).
At the Japanese Ship Owners\' Association (JSA), we had very meaningful discussions with the chairman, Mr. Sakinaga, and the vice-chairman, Mr. Matsunaga, who is the chairman of the environmental committee of the association. As for the shipping companies, we visited Mitsui O.S.K. lines, Nippon Yusen Kaisha, Kawasaki Kisen Kaisha, and Sanko Line.
We also had the chance to meet many people at the Nippon Kaiji Kyoukai (NK), and an executive of Nippon Kaiji Kentei Kyokai (NKKK). We visited the Ship & Ocean Foundation, which is determined to play an active role in supporting the promotion for general incentive schemes. At the request of the Osaka Prefectural government, we made a presentation at the Marine Systems Engineering Department of Osaka Prefecture University.

Interviewer: What are the merits of making use of Green Award scheme, instead of building up Japan's own incentive scheme?

- A good opportunity to appeal globally the mission of Maritime Japan-

De Goeij: Green Award was founded in the Netherlands. Nevertheless it is the world\'s Green Award. Therefore, we think it is necessary for Japan to extend its influence on this world organisation. It would be something very good for Japan.
Green Award has spent 9 years to build up this organisation, investing a large amount of money to develop a tanker certification system. I think making a new quality shipping scheme without making use of this existing tool would be a big waste of energy. It would be a merit for Japan to use Green Award. We would offer the know-how for free of charge. I think it is the best opportunity now for Japan to join us.
We are a neutral and open organisation. The foundation\'s board of experts consists of the people from maritime related organisations, ports, and ship owners in various countries. Japan is a very important maritime nation, so we would like them to not only join Green Award but also to manage it with us.
Japan is the world\'s number one maritime nation, thus I think having Japan actively take part in the protection of maritime environment and the safety of the seaway would give a major impact to the shipping world. That is to say, it is a good chance to show that Japan is taking a positive attitude to environmental issues.

Interviewer: It seems that it is surely an ideal opportunity for Japan to step forward in the global maritime environmental issue, as Japan being the world\'s number one maritime nation. I think it is necessary for Japan to send its mission to the world.
Now, at the same time, Japan has been working on the rating system of the vessels and operators. It has been seen that Green Award is one of the rating systems for quality shipping. Is it not?

Fransen: At the beginning, during the trial period, Green Award introduced a rating system. The reasoning behind this was to motivate the ship owners to reach an even higher level in quality shipping. It was planned to issue three different certificates, 'Standard', 'Mediocre' and 'Advanced'. However, when the official start was made in 1994, it was decided not to rank them, and only to issue the 'Advanced' ones. Various opinions came up regarding the rating assessment standard and it was hard to agree upon the criteria, thus it was politically concluded not to give ratings.
However, the inspection report, which is handed over to the ship owner and the vessel has a very detailed assessment content. I will refer to the ship owner that registered several sister ships with us. After completing the inspection for all the ships, one of those ships called at Rotterdam Port. So we had the chance to hand over the certificate directly aboard. Then the captain said, "I am not interested in receiving the certificates, but I am more anxious about the results of the inspection." The reason for that is that the report is very detailed, so he can show how better his ship is maintained comparing with the other sister ships." Even among sister ships, a quality competition comes along.

-Green Award is not a rating scheme-

Shinohara: It seems that there are some misunderstandings in the word 'rating'. The Green Award certificates are not for the purpose of rating. It is whether the ship has a certificate or not. The audit results will be presented to the ship owners and the vessels, so at this point they can perceive what their own grades are. They can compare and compete internally, which I think is a very effective means for quality shipping. However, it is not announced publicly. Therefore, I think it is not relevant to call it 'rating'.
The merit of having a Green Award certificate is naturally to obtain an incentive from ports, but a much more important point is to have all the vessels that have the certificate get preferences in various markets. Higher probability in getting a business from a charterer or getting differentiation in charter rates. Another one is a reduction in insurance premiums. After some investigation, we know that some P&I Clubs offers the vessels that are certified by Green Award lower insurance premiums. However, this is an internal information inside the club, thus Green Award is not allowed to mention the names.

Fransen: Coming back to the rating system, I would like to stress that it would be a big burden of work load to the incentive providers though the rating would probably be an effective way to differentiate quality ships. Based on the 9 years' experience, we are now confident that issuing a single type of certificate is better.

Interviewer: If the number of accidents decreases, the insurance premiums automatically decrease. Therefore, insurers say incentive schemes are not exactly matching with the scheme of insurance. How would you look at that?

De Goeij: I do not agree with that. The vessels with the certificate are proved to be of high quality, and being of a high quality should clearly be rewarded. In fact, those ships are really enjoying good treatments worldwide. It includes the charterers as operators. Quality generates business.
I have once been a chairman of some ship insurance association in the Netherlands, so I understand the fact that the insurance companies decide the insurance premiums according to the loss ratio from the past. I personally think this is a wrong way, because this should be only one of the elements to decide insurance premiums.
These insurance companies should focus their eye on how they can minimise their costs in paying the insurance to the clients. The only way is to improve the quality of vessels that cost a lot of insurance. There is a necessity to take into account the quality of the management as well. Insurance payment will certainly decline if the recognition of the responsibility for safety and environment protection improves. Deciding the insurance premiums by only looking at the past record is outdated.
The Green Award certified tankers covers 12% of all the tanker fleet in the world, and 25% of the world seaborne oil. This is an amazingly huge number. We are trying to make some arrangements with the insurers on behalf of the owners of the quality tankers.

Shinohara: We think that the next step is to visit the private sectors such as insurance companies, pilot associations, towing companies, sewage reception facilities in Japan.
Please note that in fact many benefits are given besides the refund of a part of the port charges. What we aim for is the situation where Green Award vessels are given a favour in all the markets that have prices. Things are proceeding in that way actually.

Interviewer: It is a pity that Green Award has not been known much in Japan though it enjoys a high reputation in various shipping markets and the registered vessels are favoured in the world.

Shinohara: Green Award is managed by a limited number of people. Therefore, it was not possible to carry out a campaign worldwide. It keeps a spirit of \'small government\'. The reason we came to Japan was that we received an invitation to a symposium that was hosted by the Institute for Transport Policy Studies of the ministry. We took this opportunity to get Green Award known in Japan.
Green Award will carry out the similar campaign in the countries of loading ports. Regarding tankers, we would also have to take into account Persian Gulf. South Africa has joined and it is effective for bulkers. Therefore, in addition, we will have to approach countries such as Australia and Canada. I think many more incentive providers will join in the future.

Interviewer: It could be said that Green Award is in the process of becoming a global scheme from a one nation scheme. Last of all, please let us know your future visions.

-Forming a maritime environmental global alliance-

De Goeij: The most important issue is to form a global alliance to protect maritime environment. We do believe in the system of Green Award but we do have to act realistically. In other words, other systems do exist. Those aiming for the reduction of NOx or SOx, for the prohibition of TBT(tributyltin)-based antifouling paint etc.
Our scheme focuses on tankers and dry bulkers, but the American Qualship21 is a inspection differentiation scheme for all types of vessels.
The compatibility of all these different schemes is important, in order to avoid duplication of work. The transparency of the systems as to what is being promoted in what kind of concept is also important. It is necessary to exchange opinions among us more to learn from the others to improve the efficiency.
Besides this we are also discussing the possibility to establish a system to certify ports. In other words, we may issue a Green Award Certificate to ports. If it materialises, the ports will not only support Green Award but they will also become Green Award certified ports. We have been working on this for 4 or 5 years now, but we have given a priority on developing a certification system for bulkers, which is now done. We can now restart working on it.

Fransen: Many people asked why Green Award had initially been founded. There are many regulations in this world. IMO is doing a lot of work. The reason PSC was started was that there were some flag states that did not do their job properly. And also, the standardisation of the criteria for classification is another issue of dispute. Green Award system was created because all those existing schemes were half done in their jobs. We think that making people observe the rules is the minimum thing to require. Just staying within this range does not imply that one is contributing to the protection of environment. Business societies can contribute to higher quality of shipping only if there is a circumstance where aiming higher standards than the minimum requirement brings a benefit in business. Green Award is a scheme that focuses on this business sense. If all the vessels obtain the Green Award certificate, then we will no longer need to exist. 'Green Award is not needed any more' is our final objective.

Fransen: I would now like to talk a little more about the incentive. I think many ports feel awkward in providing financial incentives. This is because the revenue falls. Presently the ports that offer incentives are limited to South Africa and Europe. We will make utmost effort in increasing the number of ports of loading such as South Africa. For example, if Iranian Kharg Island joins and gives even 1 or 2% of incentive, it would be an enormous benefit for ship owners. The Japanese participation is also important. For us Japan is on the other side of the globe, so there are many things that we do not know. However, we would like to place Japan in an important position. If Canada also joins, there will be a global network of Green Award. We understand that the participation of Japan is very important for the shipping industry in the world.

Shinohara: What we have realised in Japan is that things cannot develop so quickly. However, there are some shipping companies that now know that their ships are already calling at the ports regularly that offer incentives. Just by registering their ships with Green Award, they can enjoy these benefits immediately. Which company will join us first? This is an extremely important issue in shipping business because the company will be able to make an appeal to the entire shipping markets of the world. The first Green Award vessel in Japan will surely lead to a good business.
The same thing could be said for ports. There is no necessity to provide the incentive of 6% immediately. Even if it is 0%, it counts. By stating worldwide that your port supports the Green Award vessels, it will show that the port is taking initiative in promoting quality shipping. The port will be granted a great honour and obtain an effective marketing tool for port promotion.
Last, we would like to pay our respect to the Japan Shipping Exchange for the promotion of quality shipping and express our gratitude for its support extended to Green Award.

Interviewer: We would like to continue to be the promoter of quality shipping. Thank you very much for your time.

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