Supplementary Memorandum by the Department
of Trade and Industry, Isle of Man Government (FUS 41B)
THE FUTURE OF THE UK SHIPPING INDUSTRY
At the request of my Minister, the Hon David
North, MHK, I enclose for the attention of your Committee a paper,
which has been prepared to illustrate our view of the contribution
which the Isle of Man Shipping Register makes to Maritime London.
The Minister has read comments attributed to
Mr Buckley of The Baltic Exchange in his evidence to the Committee,
to the effect that our Register is of no value to Maritime London.
The Minister was concerned to read these reports and firmly believes
that the views expressed are misleading and should not be allowed
to go unchallenged.
Staff Training Ground for the British Merchant
The Isle of Man Ship Managers run comprehensive
cadet training programmes for the supply of future merchant navy
officers who are then available, as a pool of labour, to the whole
of the British merchant marine. As the majority of Isle of Man
registered vessels have British owners this provides an advantage
to the British owners both directly through Manx registered vessels,
which they own, and indirectly through the availability of skilled
labour for British owned vessels on other registers.
It is understood that the majority of such cadets
are UK residents.
Staff Training Ground for "Maritime London"
The ship managers on the Island are the main
trainers of merchant navy officers in the British merchant marine.
This pool of officers, who have considerable relevant skills and
experience, is a major source of trained labour for the "Maritime
London" institutions when the officers seek to "come
ashore" to work. Without the Manx industry it is unlikely
that this pool would be available.
It is understood that up to 75 per cent of marine
related shore jobs are filled by ex-merchant marine officers.
A large proportion of marine institution vacancies on the Island
are also filled by ex-merchant navy officers. (The Baltic Exchange
is the exception to this as its staff requirements are somewhat
different from the other members of "Maritime London").
Voluntary Contribution Scheme
The UK paper "Chartering a New Course"
proposes a scheme through which contributions made by British
owners and managers would provide funding to support staff training
for the British maritime industry. It is considered likely that
Manx ship managers and owners, who manage and operate UK ships,
would be prepared (and willing) to make contributions to the proposed
scheme both as the Island has second British Register status and
as a further means of demonstrating IOM equivalency with the main
Use of the Services Provided by "Maritime
The Isle of Man maritime industry extensively
uses the services provided by "Maritime London" and
must, therefore be considered to be a major customer.
For example, there is a sophisticated ship mortgaging
system on the Island, which utilises the services of London law
firms and finance houses both through their London headquarters
and through local subsidiaries and branches. Major UK banks which
provide funding for the maritime industry include the Royal Bank
of Scotland, Barclays, National Westminster and the Midland Bank,
all of whom have IoM representation.
It is understood that where financing is arranged
through local subsidiaries/branches they, along with their clients,
do have some say in how and where finance is accessed and, as
customers themselves, can choose whether to use "Maritime
London" or other international finance centres. Were the
Manx industry to take its finance business to other international
providers this would have a detrimental effect on "Maritime
"Maritime London" insurers obtain
extensive business from the Manx industry both through local subsidiaries
and through London headquarters. This business includes personal
indemnity (cargo, baggage, crew, etc.), fixed rate (hull and machinery),
war risks and captive insurance business.
IoM ship managers administer the payroll accounts
of sea going staff employed under contracts outside of the Isle
of Man and the UK, not only on Manx and British ships, but also
in respect of British and foreign crews employed on foreign flagged
vessels. The payroll monies for the crews pass through financial
institutions on the Island (which are subsidiaries/branches of
"Maritime London" institutions) and through the London
institutions themselves, thereby, generating business and income
for "Maritime London". The throughput is estimated as
being between tens and hundreds of millions of pounds per year.
In many senses the IoM is a very important customer
for "Maritime London" and whilst the Island's industry
could survive without "London" because of its international
perspective and level of diversification "Maritime London"
would potentially find some difficulty replacing the business
it receives from the Island were it to be lost or substantially
"Maritime London" Use of Services
Provided by the Isle of Man
The obverse of the coin is that "Maritime
London" institutions themselves do choose to utilise IoM
subsidiaries/branches for certain financial transactions as the
Island is outside the EU. This allows the London institutions
to access a well regulated banking sector where costs are internationally
competitive, regulation, although strict, is not at unacceptable
levels and where there is considerable flexibility of operation
which allows finance to be accessed, at competitive rates, across
all international markets.
"Maritime London" has extensively
used the IoM Register, as a quality register within the Red Ensign
Group, when it has chosen not to use the UK Register and has not
been prepared to register vessels with foreign flag states.
As a business centre the Isle of Man has an
international reputation for quality, regulation and integrity
and the Government of the Island has a reputation for quality,
stability and responsiveness. This reputation is attractive to
"Maritime London" and encourages them to use the services
available in the Island rather than from many of our competitors
who cannot compete on these issues.
Many of the leading names of "Maritime
London" operate in or through the Island, these include:
Shell, BP, Maersk (UK), Bibby's, Andrew Weir, Bank Line, Denholms,
Swires, Sea Containers, Kerr McGee.
Non-London international names utilising the
Island include Safmarine, V Ships, Schulte and Canadian Pacific.
"Input" Into Maritime London
The Manx maritime industry has many links and
considerable involvement with "Maritime London" and
the shipping industry internationally, including:
(a) membership of representative organisations
The IOMSA, and many of its individual members, are also members
of the British Chamber of Shipping, which is a constituent part
of "Maritime London". As a contributor to "Maritime
London" through this link the Manx industry adds to the weight
of "Maritime London" when it seeks to influence the
direction of the maritime industry internationally.
Internationally, the Manx industry also
has influence through membership of the International Chamber
of Shipping and the International Shipping Federation and this
can, when the objectives of the Manx industry and "Maritime
London" coincide, be used to mutual benefit;
(b) relationship with UK owners The
Manx industry has influence with "Maritime London" through
its relationship with UK owners who have ships managed
from the Island and ships on the IOM Register.
Colin F Douglas
Director of Marine Administration
9 March 1999