Maritime regulatory reform is welcomed – but domestic progress must consider the global challenges for insurers

The UK Government’s consultation on maritime autonomy regulation closed this week. Kennedys submitted a response commending the recognition of the need to update the current regulatory framework, but urging caution in respect of potential additional risks to insurers arising from the Government’s proposals.

Key proposals

As set out in our previous article, the Government’s Future of Transport programme aims to “shape transport innovation and make the UK a world leader in transport movement”.

The consultation covered a broad range of topics, including proposals on use the term MASS, defined as "MASS includes every description of vessel or craft used in navigation that can for any part of its voyage, fully or in part navigate or operate autonomously or through remote operations".

The definition for a Remote Operator was also proposed as:

The consultation considered the extent of ports’ and harbours’ powers to cover MASS, and whether these powers need expanding or enhancing, and (encouragingly) included a section dedicated to insurance liability challenges – an area often overlooked in the initial stages of regulatory reform.

Potential risks for insurers

Updated, clear definitions and systems of operation designed to respond to the advances in technological innovation are essential to the maritime industry and its insurers. However, while we understand the need to avoid the risk of any new regulation unintentionally excluding certain categories of vessels or operators, care needs to be taken to ensure that the wordings are not so wide as to blur the lines between different operating systems.

The definition of the MASS itself could prove challenging, as the current proposal would cover vessels which do not currently require compulsory insurance. This could result in gaps in cover or additional legislation to cover these vessels.

The interrelationship between the various levels of autonomy could provide the regulators and insurers with an even bigger headache. In a few, short years it is entirely foreseeable that fully autonomous vessels are interacting with remotely operated vessels which have an element of human control, as well as with ‘traditional’, non-autonomous vessels.

Using the consultation language, the ‘MASS master’ may change multiple times during a voyage, as may the proposed Remote Operation Centre (ROC). Any future regulation will need to consider how and when responsibility shifts, and whether, in fact, one single entity has – or should have - overall control for the entire voyage.

As we have previously discussed, a significant challenge will be protecting the ‘cyber safety’ of vessels. Traditional vessels, with crew on board, are already facing substantial cyber risks from criminals seeking to disable or take control of vessels.

The vulnerability of ROCs – which could include ports and harbours which take control of such craft or equipment within their areas of operation for the purposes of pilotage, positioning etc. – to cyber attacks could pose substantial additional risks to insurers. Multiple entities with the power to disable or override navigation systems would prove an attractive target for malicious actors seeking to gain control of a vessel.

The transfer of control of the vessel from the ship to the shore or to an autonomous system (which could be on board or ashore, or both) will also have consequences on the seaworthiness of the vessel. Condition and classification surveys are almost certainly going to have to extend to beyond the vessels themselves and include ROCs, as well as considering the use of multiple ROCs over the course of one voyage.

Ultimately, insurers will need to have the capability to survey and be satisfied with the autonomous systems that the vessels will be using.

Comment

Shipping regulations are experiencing a period of significant change as regulators seek to reflect innovation around autonomous technology and the ‘green’ agenda. Both of these challenges should be forefront in the minds of ship operators, owners and insurers as both require coordinated, global commitment and investment in terms of research and development.

Global collaboration and cooperation is key to the success of any maritime regulatory reform. Shipping is a global industry and has successfully operated through the use of international conventions and regulations for many decades. Domestic endeavour is to be encouraged, but with this must come international discussion and consultation. The UK Government’s ambitions are welcomed and may be seen as seizing the initiative - but the global community must be open to harmonious change and modernisation. A fractured patchwork of domestic regulation will result in increased confusion, contrary to the aims of the global shipping community seeking to embrace the benefits of autonomous innovation.

Read other items in London Market Brief - February 2022

Read other items in Marine Brief - February 2022

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• Maritime regulation subject to UK Government review to reflect increase in automation
• Is your cargo safe on board an autonomous vessel?