Ship Management and Its Essentials - Coursework Example

Question How have the social responsibilities of ship management business managers changed over the years? What now is a major part in their business policies? Give relevant examples of genuine companies if possible. Management, according to the traditional school of thought, is based on the assumption of the universality of management, and believes that its main function is creative problem solving. (Erven. L, Bernard. The Five Functions of Management. Creative Problem Solving. Department of Agricultural Economics. Ohio State University Extension). However, these assumptions have undergone many changes and today ship management is a specialized area and involves a wide variety of functions some of which are: Technical management – focusing on asset protection from an owner’s perspective Crew management –includes recruitment , union relations, training, education and safety-instruction courses, travel arrangements etc Purchasing/warehousing Commercial management Health, safety and environment Corporate management The first three areas are the ones traditionally focused upon, while the fourth area has been professionalized gradually. The last two areas are comparatively new functions and of these, health, safety and environment have great social implications and they constitute major components of Corporate Social Responsibility (CSR). (Corporate Social Responsibility and the Bottom of the Pyramid. Abstract Dynamics). CSR itself is composed of two areas, namely “Social Responsibility” and “Social Contribution.” (Corporate Social Responsibility and the Bottom of the Pyramid. Abstract Dynamics). Social Responsibility means complying with laws and regulations, respecting social precepts, and being ethical and fair in all business activities. In the context of ship management, it implies making all efforts for safety in navigation and cargo operations and ensuring environmental preservation. Social Contribution means being “Good Corporate Citizens” who contribute to the betterment of society and serve the society. Maritime operations necessarily involve many countries and cultures and it is essential that the business should comply with local laws and regulations and respect their ethical and moral standards, culture, tradition, and customs. (Social and Environmental Report. Copyright(C) 1996-2007 Kawasaki Kisen Kaisha, Ltd. All Rights Reserved). Thus the social component of ship management is much more pronounced when compared to others. Ship management business managers have traditionally been concentrating on running their business in the most profitable manner, but in the process, they often used to cut many corners. History is replete with examples of ship crew and entire ships falling prey to many catastrophes caused by faulty management. Over the course of time, the human aspect of ship management, particularly relating to working conditions of crew, came to assume greater priority. These functions involve social responsibilities and may therefore be considered to be the first of the social responsibilities that ship management business managers had to contend with. These social responsibilities gradually became institutionalized, governed by national and international laws. Thus managers were obliged to conform to these requirements and they became statutory requirements rather than social responsibilities. However, new areas of concern came to the fore, requiring ship managers to take on greater social responsibilities. These are mainly in the area of health, safety and environment. While health and safety again are subject to statutory regulations, environmental issues required ship management business managers to formulate their business policies with an increased focus on environmental issues. In fact, over the years, these issues have come to occupy a major part of their business policies since otherwise their operations themselves were under threat in many parts of the world. Example Kawasaki Kisen Kaisha, Ltd (K Line Group) has a fleet strength of 398 and operates all over the globe. Their activities impose a heavy environmental load, both on land and at sea. The group accepts the social responsibility when its first corporate principle is stated as “Diligent efforts for safety in navigation and cargo operations as well as for environmental preservation” (Environment. Copyright(C) 1996-2007 Kawasaki Kisen Kaisha, Ltd. All Rights Reserved). The K Line group has enunciated an Environmental Policy in May 2001. (Environment. Copyright(C) 1996-2007 Kawasaki Kisen Kaisha, Ltd. All Rights Reserved). The policy identifies exhaust emissions, wastes of power sources, and marine pollution as issues integral to the functions of managing maritime transportation. The policy sets out three “Behavioral Directions” to be complied with in all their activities. These can be considered the management policy in respect of social responsibility as practiced by the K Line Group. These directions are: 1. To preemptively prevent spillage of fuel and oil, both own and cargo, and other hazardous substances, during normal operations and accidents, and manage exhausts and wastes both at sea and on shore, if possible by recycling. 2. Incorporation of technology that reduces exhaust emissions, avoiding the use of hull paints harmful to marine life and also ozone-depleting substances. 3. To impart training and education in safe navigation and environmental matters to all employees and take part in social activities connected with the environment. The group has introduced an Environmental Management System (EMS), which was awarded ISO14001 Certification in 2002. The EMS all services and also started publishing a "Social & Environmental Report" since 2004 The group specifically lists nine activities aimed at addressing environmental issues, namely; 1. Education and training of all crew to ensure safety in operations as per a Company Safety Management System (SMS), prevent pollution by strengthening ship hulls and increasingly introducing double hull ships for all types of cargo. 2. Managing the disposal of waste oil and dirty water, using treatment and recycling options as far as possible. 3. Control of ballast water 4. Use of tin-free (TF) paints instead of Tributyltin (TBT) paints since 2005 5. Use of engines with lower emissions and use of fuels with lower sulfur content 6. Use of more environmentally friendly refrigerant gases in refrigerated containers 7. Better planning and use of better ships, engines, schedules and achieving efficiency in operations 8. Reduction in electricity and paper consumption, and better waste disposal systems 9. Better waste disposal practices at container terminals. The K Line Group also claims to pay attention to the area of social contributions as distinct from social responsibilities by voluntarily participating in environmental activities all over the world and using an environmental accounting method that emphasizes its Environmental Management System (EMS). “An Environmental Management System (EMS) is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency” (Environmental Management Systems [EMS]. U.S. Environmental Protection Agency). The increasing importance given to social responsibilities in the ship management business is reflected in the recognition accorded to organizations that display exemplary performance. Disposal of ships ballast is now controlled by all countries and many documented procedure are suggested. The International Maritime Organizations (IMO) Marine Environment Protection Committee (MEPC) has for example, set out a new set of ballast water management guidelines, and exemplary compliance is recognised. A recent example is the Lloyds Registers Ballast Water Management Plan (BWMP) notation awarded to OSG Ship Management (Gr) Ltd for its fleet of tankers and chemical carriers. (Lloyd’s Register Awards OSG Ship Mangement Fleet Ballast Water Notation. News and Events News Release). The ship management business has identified two critical issues that need to be addressed by all. Both of them involve social responsibilities and hence the business policies of mangers necessarily have to accommodate them prominently. They pertain to crew availability, training and management and environmental issues. Crewing costs come to almost half of a vessel’s running costs and liabilities for environmental lapses can be staggering. Both these issues are of comparatively recent origin and hence they have come to represent a major part of the business policies of ship management business managers. (On My Mind – Ship Management International – Issue 2 July/August 2006). Question 2 Explain how a new Container Terminal/Port Development may cope with or influence the external environment in which they operate. Give relevant examples of external environments (minimum 7). A container terminal or a port development project involves the establishment of a variety of features, though not all of them are found at all terminals or ports. Most of the features impact directly on the external environment in which the projects are located. Both container terminals and port development projects need to address the manner in which they cope with or influence the external environment in terms of these features. These features include; 1. Road and rail connectivity 2. Modern communication facilities 3. Equipment for handling containers 4. Container repair and maintenance facilities 5. General infrastructural requirements such as security, fire fighting, power supply, water supply etc 6. Wash systems for interiors and exteriors of containers, with heavy environmental pollution risks. 7. Administrative buildings and facilities 8. Facilities for inspections and other statutory compliances including quarantine facilities 9. Facilities to handle refrigerated containers, and many others. (Container Terminals. The Port of Los Angels). However, there are some crucial differences that need to be noted between container terminals and port development projects. Container terminals handle only goods in transit – they do not handle people. Secondly, ship crew management and the operational aspects of shipping are not functions associated with container terminals. Thus port development and new container terminals involve many activities and features that are common, and also many that are mutually exclusive. (G. Sciuttol., A. Deritol., A. Traverso., G. DeHepiane. & G, Pietronave. Port Development vs. Technological Development: The Challenge of Keeping the Pace. Paper from: Maritime Engineering and Ports III, CA Brebbia & G Sciutto (Editors). ISBN 1-85312-923-2). Further, it is not essential that all container terminals be situated on the sea side. Many container terminals are now located inland, near areas where goods are produced or needed. Though they are similar to container terminals situated at the sea side, they necessarily involve transportation of heavy goods loads over longer distances by road or rail. The impact of new container terminals and port development activities will be extremely important in the areas of health and environment. Each of these features has an impact on the external environment in which they operate. 1. Road and rail connectivity: Ports and container terminals involve the movement of heavy goods vehicles by road or the movement of goods and containers by rail. Thus both major roads and railway lines become necessary. Establishment of these requires coping with the local environmental issues, change in land use patterns and major investments in infrastructure. However, these add value to the external environment by promoting investment and employment and aiding in the overall development of the region. (URS Cash and Associates. Other Projects Port Facilities &Container Terminals). 2. Modern communication facilities are the backbone of any business activity in the twenty-first century. The time sensitivity of cargo movement is increasingly recognized and communications play a vital role in ensuring this. Any new container terminal or port development will have a huge impact on the external environment since it will be accompanied by a quantum jump in communications facilities in the area itself. (Regulations. Law on Port Facilities of the People Republic of China). 3. Equipment for handling containers are installed with a view to speeding up the loading and unloading of cargo. They involve massive fabricated structures and equipment, many of which are landmarks of the skyline where they are situated. They impose restrictions on the proximity of airports and other facilities. 4. Container repair and maintenance facilities involve mostly steel fabrication work requiring skilled manpower, power and suitable raw materials. The external environment will thus be influenced by providing a market for good and services. (ICTSI-International Container Terminal Services, Inc). 5. General infrastructural requirements such as security, fire fighting, power supply, water supply etc are the ones most actively engaged with the external environment of a container terminal or a port development project since they require the use of local resources and personnel. Since a container terminal or port development cannot exist in isolation as an island of modern facilities, many of these will have to be shared with the local community. The very availability of power, water and personnel is heavily dependant on the immediate external environment, many of them under government control, and it is necessary that such projects work in close cooperation with local authorities and institutions in these areas.1 6. Wash systems for interiors and exteriors of containers are an essential requirement of any container terminal. The waste water generated by these activities may contain hazardous ingredients and strict monitoring, treatment and control are essential, since they would have serious health and environmental implications. These functions are usually governed by local rules and procedures and it is imperative that they are complied with.2 7. Administrative facilities at container terminals and ports impact on the external environment mainly in the matter of personnel and staffing. A major project of this nature needs the services of competent and qualified personnel with exposure to an international working environment. The local community has the opportunity to promote and provide such personnel. 8. Inspections, statutory compliances are closely connected to the local laws governing all aspects of international trade. Taxation and customs constitute a major part of these functions, but health aspects have the potential to develop into very serious crises in the event of laxity. Nowadays, the potential for rapid spread of human and animals diseases across international borders is recognized and given much importance, particularly after the recent avian flu epidemics. Maritime trade using container terminals and ports are seen as vital points of prevention and thus laws and inspections have been made stringent because of the likely impact on the external environment. Thus container terminals and ports need to be well prepared to cope with these issues. (Globalization, Trade and Health. Normative and practical Aspects of International Law. World Health Organization). 9. The increasing use of refrigerated containers has introduced a new dimension to the functioning of container terminals and ports. With depletion of the ozone layer and global warming becoming issues of increasing concern, the use of refrigerant gases is strictly regulated and need to be monitored carefully. Repairs and maintenance of such containers poses severe hazards that could have an impact on the external environment. Uninterrupted power supply is an essential requirement and nowadays some such containers are equipped with remote monitoring facilities. (Cargo - Containers. Handling Procedures. Steamship Mutual). Thus it can be seen that while any new container terminal or port development has to cope with many factors linked to their external environments, the projects also have the potential to influence them positively. Laxity in conforming to performance parameters could at the same time have serious harmful repercussions on the external environment. Word count (Q1) 1166 Word count (Q2) 1052 Total word count 2229 Work Cited Erven. L, Bernard. The Five Functions of Management. Creative Problem Solving. Department of Agricultural Economics. Ohio State University Extension. Retrieved March 15, 2007, from http://extension.osu.edu/~mgtexcel/Function.html Corporate Social Responsibility and the Bottom of the Pyramid. Abstract Dynamics. Retrieved March 15, 2007, from http://abstractdynamics.org/2006/10/corporate_social_responsibilit.php Corporate Social Responsibility and the Bottom of the Pyramid. Abstract Dynamics. Retrieved March 15, 2007, from http://www.total.com/static/en/medias/topic307/TFE_2002_en_AR_04_CSR.pdf Social and Environmental Report. Copyright(C) 1996-2007 Kawasaki Kisen Kaisha, Ltd. All Rights Reserved. Retrieved March 15, 2007, from http://www.kline.co.jp/corp/report_e.html Environment. Copyright(C) 1996-2007 Kawasaki Kisen Kaisha, Ltd. All Rights Reserved. Retrieved March 15, 2007, from http://www.kline.co.jp/corp/env_e.html Environmental Management Systems [EMS]. U.S. Environmental Protection Agency. Lloyd’s Register Awards OSG Ship Mangement Fleet Ballast Water Notation. News and Events News Release. Retrieved March 15, 2007, from http://www.lr.org/News+and+Events/Lloyds+Register+awards+OSG+Ship+Management+fleet+ballast+water+notation.htm On My Mind – Ship Management International – Issue 2 July/August 2006. Retrieved March 15, 2007, from http://www.aspships.com/documents/PDF/MattDunlopShipMgmtIntnlAug06.pdf Container Terminals. The Port of Los Angels. Retrieved March 15, 2007, from http://www.portoflosangeles.org/facilities_Container.htm G. Sciuttol., A. Deritol., A. Traverso., G. DeHepiane. & G, Pietronave. Port Development vs. Technological Development: The Challenge of Keeping the Pace. Paper from: Maritime Engineering and Ports III, CA Brebbia & G Sciutto (Editors). ISBN 1-85312-923-2 URS Cash and Associates. Other Projects Port Facilities &Container Terminals. Retrieved March 15, 2007, from http://www.cashassociates.com/refriger.htm Regulations. Law on Port Facilities of the People Republic of China. Retrieved March 15, 2007, from http://www.tdctrade.com/report/reg/reg_030904.htm ICTSI-International Container Terminal Services, Inc. Retrieved March 15, 2007, from http://www.ictsi.com/www1/mict_infrastructures.htm United States General Accounting Office - March 2000 PORT INFRASTRUCTURE Retrieved March 15, 2007, from http://www.gao.gov/archive/2000/rc00058.pdf State of Ohio Environmental Protection Agency - Container Washing Operations - Division of Hazardous Waste Management -DHWM Guidance Document Date: January 2003. Retrieved March 15, 2007, from http://www.epa.state.oh.us/dhwm/pdf/Container_Washing_Operations_Guidance.pdf Globalization, Trade and Health. Normative and practical Aspects of International Law. World Health Organization. . Retrieved March 15, 2007, from http://www.who.int/trade/distance_learning/gpgh/gpgh7/en/index2.html Cargo - Containers. Handling Procedures. Steamship Mutual. Retrieved March 15, 2007, from http://www.simsl.com/cargo---containers.html#Container%20Cargo%20Refrigerated%20Cargo Read More