My headline says it all: we now have a new expansion for the familiar BWMS abbreviation but, more importantly, we don’t really know yet what Britain’s exit (Brexit) will fully mean for Europe, for the world economy and for shipping in the long run. I’ll leave aside that it’s actually the United Kingdom as a whole, not just Great Britain, that has voted to leave the EU, but I guess ‘UKexit’ doesn’t roll off the tongue so smoothly.
There have been many blogs written, opinion pieces published and forecasts issued about Brexit’s effect on shipping, but none – so far as I can see – on its impact on ballast water management.
At first sight – not much. Ratifications to the Ballast Water Management Convention (BWMC) are not affected by whether the UK is in Europe or not and when it enters into force, a ship’s flag state or owner’s domicile will make no difference to whether it has to comply. And EU regulations on water quality will not lose their force because one member leaves the union. Some might argue that, without the UK at the negotiating table, EU rules might be different than they would otherwise be, but the differences are unlikely to be major. That era has already started: on 28 June, an EU summit took place with no UK representative for the first time in 40 years.
The real impact on the BWMS community will be much the same as on other equipment sectors, centring on investment and market forecasts. Especially for those whose finances are in sterling, many systems have just become more expensive. And they are not cheap to start with. But the chief executive of one non-UK, non-EU manufacturer pointed out to me that the price of some his components – sourced from the UK – has just gone down.
A bigger concern is the longer-term impact of Brexit on raising the money. With its adverse impact on global trade hitting already weak shipping markets, raising the cash to pay for BWMSs will become more difficult. For manufacturers – not just of BWMSs – any financial difficulties for customers will be reflected in fewer orders for their products. In the BWMS arena, this will mean that buying decisions will be delayed until absolutely the last minute: something that manufacturers desperate to see a return on their R&D and type-approval investments can ill-afford.
Their hope now lies with another EU member: Finland. Its president approved ratification of the BWMC on 17 June but my contacts in Finland’s Ministry of Transport and Communications told me today (30 June) that “we still have some internal administrative steps to take” before ratifying the convention and no timetable could be predicted.
Based on end-May data, Finland’s ratification would trigger the convention’s entry into force. Then we will really see who has got the time, the resources and the money – both manufacturers and shipowners – to make it all work in practice.