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ESG at IUMI

The growing pressure and urgency across all sectors of society to respond and find solutions to environmental, social and governance (ESG) issues has led to some rethinking within the marine insurance industry. Individual companies are reconsidering their targets and responsibilities beyond their core businesses to incorporate sustainability. These insurance companies work on a better understanding and overarching principles to identify and define ESG standards that align with their values and commitments as a company. This approach will also guide what information they will seek from clients and other third parties. Considerations may comprise aspects of underwriting, claims handling, loss prevention, investment strategies, recruitment and education. Acknowledging the importance of ESG issues for the industry, some insurance companies have already integrated ESG issues and principles into their corporate strategy and established reporting procedures to ensure compliance with a company’s defined ESG standards.

The results of a membership survey on ESG matters among IUMI's member associations conducted in December 2019 showed a desire to expand IUMI’s role as an educator and facilitator for ESG issues. Over 90% of the respondents said that they were already doing a moderate amount or even a lot of work on sustainability. 65% viewed ESG topics on IUMI’s agenda to be very important or extremely important and would like IUMI to spend more time and effort on such issues. The mandate to include ESG issues on IUMI's agenda could not have been clearer.

IUMI’s overall role and involvement on ESG matters has been tasked to the ESG Working Group which was set up in 2021. The group is in charge of developing a workplan and vision for IUMI’s approach to sustainability. The WG identifies ESG topics which are specifically relevant to the global marine insurance industry. The purpose of the group is to educate IUMI members and raise awareness about ESG related trends and developments relevant for marine insurers. The ESG WG’s focus is to work on tangible and specific topics with direct relevance for IUMI’s membership.

IUMI's support of UNEP Principles for Sustainable Insurance (PSI)

Global initiatives such as United Nations (UN) Sustainable Development Goals (SDGs) have led to growing awareness of ESG issues. In the insurance context, the UN Environment Programme Financial Initiative’s (UNEP FI) Principles for Sustainable Insurance (PSI) are central. UNEP intends the four principles to serve as a global framework for the insurance industry to address ESG risks and opportunities. The four principles are:

  1. Embed environmental, social and governance issues relevant to our insurance business in the decision-making.
  2. Work together with clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.
  3. Work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.
  4. Demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.

The Principles have led to one of the largest collaborative initiatives between the UN and the insurance industry - the PSI Initiative. Over 200 organisations worldwide have adopted the four Principles for Sustainable Insurance, including insurers representing about 30% of world premium volume. The purpose of the PSI Initiative is to better understand, prevent and reduce ESG risks, and better manage opportunities to provide quality and reliable risk protection. In February 2020, IUMI became a supporting institution of the UNEP PSI.

In 2020, the UNEP FI launched the first guideline for “Underwriting environmental, social and governance risks in non-life insurance business”. The guide is not intended as a formal standard which organizations are required to comply with or follow directly. It is instead an optional support tool to help organizations grasp this wide-ranging topic, particularly those with no or limited ESG expertise. The guideline was subject to a public consultation in 2019, and the full 1.0 version of the guide was published in June 2020.

IUMI's support for Poseidon Principles for Marine Insurance

The Poseidon Principles for Marine Insurance (PPMI) are a framework for quantitatively assessing and disclosing the climate alignment of marine insurers' underwriting portfolios. They have been established to engage with the shipping industry and support net-zero insurance as a main focus area. They provide a framework for transparent disclosure based on four principles (Assessment of Climate Alignment, Accountability, Enforcement and Transparency) and they are a first tangible step towards enabling hull & machinery insurers to support shipowners in reducing greenhouse gas (GHG) emissions. The PPMI were launched in December 2021. IUMI is a Supporting Partner of the initiative and encourages interested marine insurers to look into the scheme.

Regulatory developments

Many governments and intergovernmental organisations such as the IMO start to develop rules and regulations on ESG issues, often going beyond the most prominent topic of climate change. Some of these regulations have the potential to impact the business marine insurers write. The EU, for instance, is making significant strides to move its sustainability ambitions forward with the EU Taxonomy Regulation. The purpose of this initiative is to provide companies, investors and policymakers with appropriate definitions and encourage investments in environmentally sustainable economic activities. This is to be achieved with the creation of a taxonomy, i.e. the introduction of a uniform procedure with which the economic activity of companies is classified into categories. The Taxonomy Regulation establishes six environmental objectives:

  • Climate change mitigation
  • Climate change adaptation
  • The sustainable use and protection of water and marine resources
  • The transition to a circular economy
  • Pollution prevention and control
  • The protection and restoration of biodiversity and ecosystems

IUMI will monitor regulatory developments and inform members about the impact they may have on marine insurers.

Climate change

Climate change is considered one of the most pressing issues of our time. It has also been identified by IUMI as a major concern to marine insurers. The effects of global warming are already evident and are changing the nature of the insured assets. The frequency of weather-related catastrophes has increased significantly which drives up losses and leaving some assets uninsurable. The potential impact of climate change is therefore a fundamental issue for regulators. International shipping emitted around 1,056 million tonnes of CO2 annually in 2018 and is responsible for approximately 3% of global greenhouse gas emissions. The Paris Agreement on Climate Change and the work of the International Maritime Organization (IMO) are examples of regulatory efforts to address climate change.

Actions taken by the International Maritime Organization (IMO)

In April 2018, the IMO adopted the Initial IMO Strategy on the reduction of GHG emissions from vessels. The Initial Strategy provides an international policy framework setting out a pathway to reduce and eventually phase out GHG emissions from international shipping as soon as possible. This includes the reduction of CO2 emissions per transport work (carbon intensity) by at least 40% by 2030 and the reduction of the total annual GHG emissions by at least 50% by 2050.

The Fourth IMO GHG Study 2020 is the first IMO greenhouse gas study published since the adoption of the Initial IMO Strategy on reduction of GHG emissions from ships. It demonstrates that whilst further improvement of the carbon intensity of shipping can be achieved, it will be difficult to reach IMO’s 2050 GHG reduction ambitions through energy-saving technologies and speed reduction of ships. Therefore, under all projected scenarios, in 2050, a large share of the total amount of CO2 reduction will have to come from the use of low-carbon alternative fuels.

Actions taken by the European Union

The European Union (EU) is discussing its own regional legislation. On 7 July 2020, the European Parliament’s Environment Committee voted to include CO2 emissions from the maritime sector in the EU Emissions Trading Systems. Part of the revenues are proposed to be used for an Ocean Fund to support innovative green technologies and protect the marine ecosystems. Binding requirements to reduce the annual average CO2 emissions per transport work for all vessels by at least 40% by 2030 were also introduced. The proposals were adopted by the Plenary in September 2020. A proposal for a revised Emissions Trading System with the inclusion of shipping was launched by the European Commission as part of the Fit for 55 package in July 2021. In addition to taxing international shipping emissions and domestic owners, the package includes a requirement for owners to buy cleaner fuels and ports to ramp up supply of shore power and liquefied natural gas (LNG) as fuel.

Private sector initiatives 

The Poseidon Principles for Marine Insurance (PPMI) are a framework for quantitatively assessing and disclosing the climate alignment of marine insurers' underwriting portfolios. They have been established to engage with the shipping industry and support net-zero insurance as a main focus area. They provide a framework for transparent disclosure based on four principles (Assessment of Climate Alignment, Accountability, Enforcement and Transparency) and they are a first tangible step towards enabling hull & machinery insurers to support shipowners in reducing greenhouse gas (GHG) emissions. The PPMI were launched in December 2021. IUMI is a Supporting Partner of the initiative and encourages interested marine insurers to look into the scheme.

 

Illegal, unregulated, unreported (IUU) fishing

Seafood is a nutritious meal for millions of people across the world and an essential food protein in many developing countries. A major problem for sustainable fisheries management is illegal, unregulated and unreported fishing (IUU fishing). Vessels engaged in IUU fishing activities do not use legal fishing gear, do not follow fisheries management regulations and/or do not comply with regulations on quotas, fishing areas, closed seasons or prohibited species. The IUU catch is not recorded in catch registers. This is an important aspect because fishing stocks are estimated based on these registers. IUU fishing destroys marine habitats, adds pressure to fish populations that are already at risk of over-exploitation and undermines efforts to responsibly manage and protect the ocean. It exploits the natural resources of coastal nations, reduces economic opportunities and threatens food security, particularly in developing countries, and has therefore environmental and social implications.

Marine insurers can support the suppression of IUU fishing activities by refusing or cancelling insurance to vessels which have been blacklisted for involvement in illicit actions. The ocean conservation group Oceana in cooperation with UNEP FI’s PSI have engaged with marine insurers and associations including IUMI to develop guidelines to mitigate the risk of insuring vessels and companies associated with IUU fishing. There are also initiatives to develop an insurance policy provision managing IUU risks and a tool (likely a website) to assist insurers in evaluating the risk that a vessel may be engaging in or supporting IUU fishing.

IUMI supports the adoption of the Cape Town Agreement (CTA) of 2012 on the Implementation of the Provisions of the 1993 Protocol relating to the Torremolinos International Convention for the Safety of Fishing Vessels. This IMO treaty to address fishing vessel safety is not in force yet. The absence of an international mandatory regime makes effective control and monitoring of fishing vessels difficult. The CTA sets minimum requirements on the design, construction, equipment, and inspection of fishing vessels of 24 meters in length and over. The agreement further facilitates better control of fishing vessel safety by flag, port and coastal States. Swift ratification of the CTA is therefore desirable and supported by IUMI.

 

Plastic litter

Over 300 million tons of plastic are produced every year for use in a wide variety of applications. At least 8 million tons of plastic end up in the oceans annually. Researchers estimate a plastic leakage into the ocean in 2040 of 29 million tons. Under the influence of UV radiation, wind, currents and other natural factors, plastic fragments into small particles, termed microplastics (particles smaller than 5 mm) or nanoplastics (particles smaller than 100 nm). Marine species ingest or are entangled by plastic debris which causes severe injuries and death. Plastic pollution threatens food safety and quality, human health, and coastal tourism.
The main sources of marine plastic are land-based. However, ocean-based plastic originates primarily from the fishing industry, nautical activities and aquaculture. In 2018, the IMO’s Marine Environment Protection Committee (MEPC) adopted the IMO Action Plan to address marine plastic litter from ships. It aims to enhance existing regulations and introduce new supporting measures to reduce marine plastic litter from vessels. One aspect of the Action Plan is the consideration of a compulsory mechanism to declare the loss of containers at sea.

The contents of lost containers contribute to marine litter. The carriage of so-called “nurdles” (pre-production plastic pellets) is a particular concern. Nurdles are in widespread use and large quantities of containers of this commodity are being shipped. In October 2011, the ‘Rena’ ran aground on the coast of New Zealand resulting in the loss of containers of plastic resin pellets. In Hong Kong after Typhoon Vicente in July 2012, containers with over 150 tonnes of plastic resin pellets were lost at sea which later washed up on the southern Hong Kong coast. In 2017, a spill of approximately 2 billion plastic resin pellets (49 tonnes) from a shipping container in Durban, South Africa, required extended clean-up efforts, with pellets also washing up on the shore in Western Australia. Similarly, the ‘Trans Carrier’ spill in the German bight resulted in a loss of 13 tonnes of nurdles and pollution of Danish, Norwegian and Swedish coastlines. In May 2021, the MV X-Press Pearl spilt 11,000 tonnes of plastic pellets off the shore of Colombo, Sri Lanka. If nurdles are lost overboard, the consequences to the environment are significant as they float and can be widely distributed. Marine wildlife often mistake nurdles for food, causing injury and entering the food chain.

Considerations are ongoing in the IMO's Sub-Committee on Pollution Prevention and Response (PPR) to address the risk of plastic pellets ending up in the oceans. Moreover, at the 5th United Nations Environment Assembly (UNEA-5) in Kenya in March 2022, a total of 175 nations endorsed the resolution to end plastic pollution, which has grown into an epidemic amounting to some 400 million tonnes annually - a figure that is projected to double by 2040. The resolution establishes an Intergovernmental Negotiating Committee (INC) that will begin its work in 2022 with the ambition of completing a draft global legally binding agreement by the end of 2024. The INC is expected to present a legally binding instrument that would address the full lifecycle of plastics, the design of reusable and recyclable products and materials, and the need for enhanced international collaboration to facilitate access to technology, capacity building and scientific and technical cooperation.

 

Ship recycling

Ships are considered hazardous waste under international environmental law such as the Basel Convention and the EU Ship Recycling Regulation. According to the NGO Shipbreaking Platform, 763 ocean-going commercial ships and floating offshore units were sold to the scrap yards in 2021. Of these, 583 of the largest tankers, bulkers, floating platforms, cargo- and passenger ships ended up on the beaches of Bangladesh, India and Pakistan. The process of dismantling often does not occur in safe and environmentally sound working conditions. The practice of “beaching” vessels to break them up poses significant risks to the health and safety of the workers. It also causes environmental damage due to the toxic materials released during the process. Ship recycling is therefore related to the "E" and the "S" of "environmental, social and governance" issues.

The IMO's Hong Kong Convention is aimed at ensuring that ships when being recycled do not pose any unnecessary risk to human health and safety or to the environment. The Hong Kong Convention was adopted in May 2009 but has not yet entered into force. Regulations in the Convention cover the design, construction, operation and preparation of ships to facilitate safe and environmentally sound recycling and the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements. Ships to be sent for recycling will be required to carry an inventory of hazardous materials which will be specific to each ship. IUMI supports the ratification of the Hong Kong Convention to ensure a minimum standard of safety and environmental standards during the dismantling of ships.

The EU put in place its own regulatory measures. From 31 December 2018, the EU Ship Recycling Regulation mandates the recycling of all large sea-going vessels sailing under an EU flag to take place in yards included in the European List of ship recycling facilities. The regulation aims to make ship recycling safer and environmentally sound. The latest edition of the European List of ship recycling facilities published in November 2020 contains 43 yards, including 34 yards in Europe, 8 yards in Turkey and 1 yard in the USA.

The EU Ship Recycling Regulation has implications for marine insurance. Insurers involved in actions which may be considered illegal exports of ships to yards not included on the European List of ship recycling facilities may be held liable. Being associated with unsustainable practices such as “beaching” of vessels may further lead to reputational risks. IUMI is raising awareness for this issue by holding presentations and webinars on the topic. IUMI further supports the work of the Ship Recycling Transparency Initiative (SRTI) which aims at ensuring better labour and environmental standards by requiring shipowners to disclose their ship recycling policies and practices.

Illegal, unregulated, unreported (IUU) fishing

Seafood is a nutritious meal for millions of people across the world and an essential food protein in many developing countries. A major problem for sustainable fisheries management is illegal, unregulated and unreported fishing (IUU fishing). Vessels engaged in IUU fishing activities do not comply with safety measures on board, do not use legal fishing gear, do not follow fisheries management regulations and/or do not comply with regulations on quotas, fishing areas, closed seasons or prohibited species. The IUU catch is not recorded in catch registers. This is an important aspect because fishing stocks are estimated based on these registers. IUU fishing exploits the natural resources of coastal nations, reduces economic opportunities and threatens food security. It therefore has both, environmental and social implications.

IUMI supports the adoption of the Cape Town Agreement (CTA) of 2012 on the Implementation of the Provisions of the 1993 Protocol relating to the Torremolinos International Convention for the Safety of Fishing Vessels. This IMO treaty to address fishing vessel safety is not in force yet. The absence of an international mandatory regime makes effective control and monitoring of fishing vessels difficult. The CTA sets minimum requirements on the design, construction, equipment, and inspection of fishing vessels of 24 meters in length and over. The agreement further facilitates better control of fishing vessel safety by flag, port and coastal States. Swift ratification of the CTA is therefore desirable and supported by IUMI.

Marine insurers can support the suppression of IUU fishing activities by refusing or cancelling insurance to vessels which have been blacklisted for involvement in illicit actions. The ocean conservation group Oceana in cooperation with UNEP FI’s PSI have engaged with marine insurers and associations including IUMI to develop guidelines to mitigate the risk of insuring vessels and companies associated with IUU fishing. There are also initiatives to develop an insurance policy provision managing IUU risks and a tool (likely a website) to assist insurers in evaluating the risk that a vessel may be engaging in or supporting IUU fishing.

 

Seafarers' wellbeing

Crew change crisis

Seafarers are at the heart of the maritime sector. They are enablers of global shipping and without them international trade of the essential goods and products around the world would collapse. The COVID-19 pandemic has created an unprecedented crew change crisis. Hundreds of thousands of seafarers have been stranded working aboard ships beyond the expiry of their contracts. Meanwhile, thousands of seamen and women were unable to reach ships for crew change, leading to financial uncertainty for themselves and their families.

This is an unacceptable way to treat seafarers who are key to maintaining the global flow of essential (and less essential) goods. Fatigue after extended periods at sea has significant consequences on the physical and mental wellbeing of seafarers. It also increases the risk of maritime accidents and environmental disasters, and poses a wider threat to the integrity of global supply chains which depend on safe and reliable maritime transport.

Recognising a shared responsibility to resolve the crew change crisis, IUMI signed the Neptune Declaration on Seafarer Wellbeing and Crew Change in January 2021. The Neptune Declaration urges the implementation of four main actions to address the crisis:

  • Recognise seafarers as key workers and give them priority access to COVID-19 vaccines.
  • Establish and implement gold standard health protocols based on existing best practice.
  • Increase collaboration between ship operators and charterers to facilitate crew changes.
  • Ensure air connectivity between key maritime hubs for seafarers.

IUMI supports swift and tangible improvements for the more than 1.5 million seafarers from around the world, helping them to reunite with their families and enabling them to join ships and earn a living.

Code of Conduct on Seafarers' Rights

The shipping industry is required to comply with the International Labour Organization (ILO) Maritime Labour Convention (MLC) and other international conventions covering the human rights (which include labour rights) of workers. Alongside increased public awareness of the role of seafarers, there is a growing demand from consumers, investors, business partners, civil society and governments via increasing regulatory requirements for more transparent and sustainable supply chains that address human rights as well as environmental concerns throughout the supply chain, including logistics segments. Ensuring that seafarers’ rights and welfare are respected is critical in the shipping industry’s sustainability journey. The Sustainable Shipping Initiative published a Code of Conduct on Seafarers' Rights in October 2021. It seeks to reinforce compliance with the MLC and other relevant maritime conventions and goes beyond by focusing on valuing seafarers and the full spectrum of their human rights.

Fatigue

Ships’ crews are under increasing pressure from competitive voyage schedules and have to handle their tasks with fewer crew members. Evidence from accident records and research literature both point to the serious impact that sleepiness and fatigue may have on the safety and welfare of seafarers. Fatigue has short and long-term effects on seafarers and measures must be taken to reduce the risk of fatigue. IUMI addressed this topic in a webinar to raise awareness for this issue which can have serious implications for the safety of the crew, the vessel, its cargo and the environment.

Sexual assault and harassment (SASH) at sea

In the wake of widespread allegations of sexual harassment in the maritime industry, calls to ensure the safety and security of seafarers, including women seafarers, have been widespread. In February 2022, the IMO's Sub-Committee on Human Element, Training and Watchkeeping (HTW) discussed to the revision of a model course on "Personal Safety and Social Responsibilities" with a view to including specific content to establish appropriate maritime workplace behavioural norms. Psychological safety, mental health, wellbeing, including SASH, constitute relevant areas of ILO's remit. The IMO there will coordinate its efforts with the ILO and has invited IMO member States to submit proposals to the Maritime Safety Committee for consideration and action.

In this context the U.S. Department of Transportation and the Maritime Administration (MARAD) released new safety standards to govern the U.S. Merchant Marine Academy’s Sea Year following a sexual abuse case while at sea. The "Every Mariner Builds A Respectful Culture" (EMBARC) Standards were launched by MARAD in December 2021.

 

Ship recycling

Ships are considered hazardous waste under international environmental law such as the Basel Convention and the EU Ship Recycling Regulation. According to the NGO Shipbreaking Platform, 763 ocean-going commercial ships and floating offshore units were sold to the scrap yards in 2021. Of these, 583 of the largest tankers, bulkers, floating platforms, cargo- and passenger ships ended up on the beaches of Bangladesh, India and Pakistan. The process of dismantling often does not occur in safe and environmentally sound working conditions. The practice of “beaching” vessels to break them up poses significant risks to the health and safety of the workers. It also causes environmental damage due to the toxic materials released during the process. Ship recycling is therefore related to the "E" and the "S" of "environmental, social and governance" issues.

The IMO's Hong Kong Convention is aimed at ensuring that ships when being recycled do not pose any unnecessary risk to human health and safety or to the environment. The Hong Kong Convention was adopted in May 2009 but has not yet entered into force. Regulations in the Convention cover the design, construction, operation and preparation of ships to facilitate safe and environmentally sound recycling and the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements. Ships to be sent for recycling will be required to carry an inventory of hazardous materials which will be specific to each ship. IUMI supports the ratification of the Hong Kong Convention to ensure a minimum standard of safety and environmental standards during the dismantling of ships.

The EU put in place its own regulatory measure. From 31 December 2018, the EU Ship Recycling Regulation mandates the recycling of all large sea-going vessels sailing under an EU flag to take place in yards included in the European List of ship recycling facilities. The regulation aims to make ship recycling safer and environmentally sound. The 7th edition of the European List of ship recycling facilities published in November 2020 contains 43 yards, including 34 yards in Europe, 8 yards in Turkey and 1 yard in the USA.

The EU Ship Recycling Regulation has implications for marine insurance. Insurers involved in actions which may be considered illegal exports of ships to yards not included on the European List of ship recycling facilities may be held liable. Being associated with unsustainable practices such as “beaching” of vessels may further lead to reputational risks. IUMI is raising awareness for this issue by holding presentations and webinars on the topic. IUMI further supports the work of the Ship Recycling Transparency Initiative (SRTI) which aims at ensuring better labour and environmental standards by requiring shipowners to disclose their ship recycling policies and practices.

Bribery and corruption

In February 2020, IUMI co-sponsored a paper to the IMO with a proposal to develop a guidance to address bribery and corruption in the maritime sector. A key objective in this work should be to align actions in the maritime sector with the UN Convention against Corruption (UNCAC). The Facilitation Committee (FAL 44) established in October 2020 a Correspondence Group on “Guidance to Address Maritime Corruption” under the coordination of the Marshall Islands. The group’s primary aim is to develop draft guidance to implement anti-bribery and anti-corruption practices and is still ongoing. Members of the Group suggested that the high-level interests should be:

1. integrity and the willingness to work towards eradication of corruption in accordance with the United Nations Convention against Corruption;
2. the desire to create simple, maritime ship/port interface focused guidance and a GISIS (Global Integrated Shipping Information System) module which is legally based and which avoids retaliation; and
3. the necessity of relevant parties to act on and address reports of alleged corruption.

The Correspondence Group finalised the draft guidance and proposals for a GISIS module which will be considered at the 46th session of the Faciliation Committee in May 2022.

In February 2022, the Maritime Anti-Corruption Network released the results and lessons learned from ten years of collecting data of corrupt demands in maritime trade. This data has been collected in over a decade through MACN’s Anonymous Incident Reporting platform, a system designed to allow the maritime industry to report when it has been faced with corrupt demands in ports globally. To date, the reporting system has close to 50,000 incidents reported in over 1,000 ports, across 149 countries.

 

Conflict minerals

Supply chain due diligence requirements regarding so-called conflict minerals aimed at greater transparency, are applicable or introduced by (supra) national law makers. EU Regulation 2017/821, which came into force on 1 January 2021, puts in place a framework for EU based importers of certain metals and minerals origination from conflict-affected and high-risk areas (CAHRAs). The purpose is to ensure that trade into the EU is not funding conflicts and human rights abuses.

Importers, traders, smelters and refiners of concentrates and ores containing 3TG (tin, tantalum, tungsten and gold) and metals containing or consisting of 3TG have to carry out obligatory due diligence checks on suppliers and origin of the materials.

The importers, including those who are not established in the EU, must declare minerals and/or metals for release and circulation in the EU. Smelters and refiners who exercise any form of extraction and/or metallurgy processing aiming at producing a metal from a mineral, are under the same due diligence obligation. Downstream users who do not directly import any of these materials are exempted from this obligation.

The supply chain due diligence obligations can be summarized as follows:

  • adopt a supply chain policy for 3TG and communicate this to suppliers and the public; this includes risk assessment, a strategy to respond to identified risks, third party independent audits in the supply chain,
  • implement due diligence standards as per OECD guidance;
  • senior management to establish strong company management systems to control, hold records of the process and report,
  • incorporate appropriate contractual provisions in the supply chain,
  • provide for information and disclosure to authorities, and
  • establish a complaint procedure for stakeholders including access to an external expert.

Similar provisions are part of the US ‘Dodd-Frank’ Act section 1502 aiming at the Democratic Republic of Congo (DRC) and neighbouring countries.

 

Diversity & inclusion

IUMI represents more than 40 national member associations from around the globe and works closely with affiliate organisations from a wide array of maritime stakeholders with international backgrounds. It is therefore IUMI's goal to represent this variety of members in IUMI's policy positions. Moreover, IUMI aims to include a diverse range of members as related to their geography, gender and age in the Technical Committees and Forums. The Committee and Forum Chairs are requested to consider these aspects when they recommend candidates during the annual elections.

 

Livestock transports

Livestock carriers are a special type of ship intended to transport cattle, sheep and other animals. Most of the vessels engaged in this trade are converted from a general cargo vessel, i.e. not specifically designed for the purpose of carrying live animals. Converted livestock carriers are often fitted with multiple decks to accommodate the cattle. This set-up enhances the windage area and impacts the stability of the vessels. As these ships are often converted only after sailing in the trade they have been designed for originally, the fleet of livestock carriers has a fairly high average age which is often associated with fatigue in the strength of the structure as well as old main engines and propulsion systems. The track record of livestock carriers involved in major incidents is therefore relatively poor. Examples include the sinking of the Gulf Livestock 1 in the East China Sea in September 2020 with 43 crew and 6,000 cattle onboard and the capsizing and subsequent sinking of the Queen Hind in Romania in November 2019 with 14,000 sheep onboard.

The welfare of live animals during maritime and road transport poses additional safety as well as ethical concerns. Often, appropriate care cannot be afforded to the large number of animals being transported, leaving them exposed to food and water deprivation, rough seas, heat and cold stress. Overflow of faecal material regularly leads to faecal soiling of feed and water troughs as well as coat contamination. Due to the severe stress and suffering of the animals during long voyages, the New Zealand government in April 2021 banned live cattle exports by sea, with a two-year period to phase out the trade. Other countries such as the UK are considering to ban live animal exports and introducing further elements of animal welfare in transport, such as reducing maximum journey times, giving animals more space and headroom during transport, and stricter rules on transporting animals in extreme temperatures or by sea.

The PSI’s ESG Guide for Non-Life Insurance includes risk mitigation examples and good practice related to animal welfare for the live transport of animals. Marine insurers covering these risks are encouraged to review the treatment of animals during transport and to promote best practice among their insureds.