European regulators raid classification societies
European competition investigators have launched surprise inspections on shipping classification societies.
Officials from the European Free Trade Association’s Surveillance Authority (ESA), European Commission and national competition authorities, carried out unannounced inspections at the premises of providers of ship classification services for merchant ships in the European Economic Area (EEA) on Tuesday and Wednesday.
Press accounts say that competition authorities have visited the offices of Lloyd’s Register in the United Kingdom, Germanischer Lloyd in Germany, Bureau Veritas in France, RINA in Italy, and Det Norske Veritas in Norway.
“The European Commission has reason to believe that the companies concerned may have violated the competition rules of the EEA Agreement and EC Treaty,” the ESA said. The ESA is apparently involved because Det Norske Veritas is one of the leading classification societies, and Norway is not part of the European Union, but is a member of the European Free Trade Association.
Det Norske Veritas said officials are “conducting an inspection at its head office in Oslo based on information of possible cooperation among IACS (International Association of Classification Societies) members to limit the competition among classification societies.”
“We are not concerned, and cooperate fully with the inspection team from ESA”, said Tore H'if'dt, head of corporate communications at DNV.
IACS said more than 90 percent of the world’s cargo carrying tonnage is covered by the classification design, construction and through-life compliance rules and standards set by the 10 member societies and one associate of IACS.
Other IACS members include the Houston-based American Bureau of Shipping, the China Classification Society, Korea Register, Japan’s Nippon Kaiji Kyokai and the Russian Maritime Register of Shipping. The Indian Register of Shipping is the associate member.
Stewart Wade, a spokesman for the American Bureau of Shipping, said there is “no ABS involvement as yet. Everything is normal.”
ESA said such surprise inspections “are a preliminary step in investigations into suspected restricted practices. The fact that the EFTA Surveillance Authority and the European Commission carry out such inspections does not mean that the companies are guilty of anticompetitive behavior; nor does it prejudge the outcome of the investigation itself.”
IACS has generally been seen as a beneficial organization for ship safety, promoting common standards for building and inspection of ships.
In April 2006 Common Structural Rules for Tankers and Bulk Carriers were implemented with the goal of creating more robust and safer ships. Bob Somerville, then chairman of IACS, said the adoption of the rules were “an historic moment — one of the most important single steps in the development of maritime rules that IACS has ever been involved with.”
Common rules are aimed at preventing shipyards and owners from playing one class society off another in efforts to reduce the amount of steel required in a ship or other sorts of corner cutting.
IACS also has a transfer of class agreement that aims to prevent “class hopping” by ship owners, who in the past might have left one class society that was demanding certain repairs to go to another class society. Now, a ship owner must make all repairs required by his class society before switching to another IACS member. ' Chris Dupin