Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Supplementary Memorandum by the Department of Trade and Industry, Isle of Man Government (FUS 41B)


  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 Marine

  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 British Register.

Use of the Services Provided by "Maritime London"

  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 London".

  "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 reduced.

 "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

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