Classification Societies and their changing role in a difficult maritime environment.

Classification Societies are non-governmental organizations very often referred to by mariners as the “CLASS”. Ever since their role developed the classification societies (CS) have rendered yeoman service to mariners by not only prescribing but ensuring implementation of the  standards for the construction and classification of ships and offshore structures.

The Flag States have the responsibility to ensure vessels under their flags are designed, constructed and operated to the standards laid down by the Administration. In effect his is actually ensured by the CSs on behalf of the flag states. Class takes no responsibility for the safety, fitness for purpose, or seaworthiness of the ship, this responsibility lies with the Administration. Which is one reason the Flag States may at their discretion not recognize some CSs.

The challenge before the societies, being the SME (Subject Matter Expert) for setting technical rules, confirming  designs and calculations, surveying vessels and structures during the process of construction and commissioning to periodic survey of vessels to ensure continued compliance to meet the rules rests with the Class. The scope of their work is vast and covers all of the maritime spectrum from oil platforms, offshore structures, and submarines to survey of diesel engines, important shipboard pumps and other vital machinery.

The ship, its components and machinery are built and maintained to the standards required by their class, Flag States withdraw certificates if a ship does not maintain its class. This indeed has been their developing role since 1760, when the Register Society was formed. This was the first classification society and become Lloyd’s Register in 1834. Bureau Veritas (BV) was founded in Antwerp in 1828, and moved to Paris in 1832. The rest is history.

With the march of time, the maritime world has become exceedingly dependent on the CSs. This then appeared to the business stake holders of the society as a business opportunity. Not just that, it also met further requirements and filled the gaps in the expertise that Flag States had. Building SME in every field can be expensive. Duplicating talent is expensive. So with time the Flag States have off loaded some of the work to Recognized Organizations (RO) and Recognized Security Organizations (RSO). These could or should have been other entities which would take on this responsibility and so ensure there were no conflicts of interest. However, the Flag States have found it convenient to, in general, delegate their Flag State responsibility of RO and RSO too to CSs. Sure it is a case of wearing two hats. After all the RO representing the Flag State is charged in principle to ensure the CS performs to the satisfaction of the Flag State. In this case, by and large though the RO and CS are one!

The plot further thickens, when the CS’ take on the consulting responsibilities too. Is it any surprise that clients prefer a registrar as training providers and consultants they implement a system.  The thought process behind ISPS Clause A/9.2.1 is implicit in the philosophy that an assessment and an approval must be with two different entities. Now imagine where the same CS has consulted, met the training requirements and put together the management system coming to audit and certify the organization! And by the way it is also the class for the vessel. The conflict of interest argument has in this way been thrown overboard. A management system developed by an experienced third party, other than the CS, will not only enable their organization to run more efficiently and gain them the certifications they need to conduct business with certain customers, but will also provide both parties the independence and enable due diligence.

In my view the three in one responsibility that the CSs have taken over the years have diluted their ability to maintain independence and continue to be an unbiased SME. Thinking in another direction, it is also a case of monopolization, if this trend continues, soon one or the other or several of the CS could become the Micro Soft for the maritime industry. When large organizations as Enron work hand in hand with Arthur Anderson as their auditors, the conflict of interest will come in and will be to the determent of the maritime industry and to the values of the CSs.