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While we can only guess at the exact reason or Lloyd’s motivation for adopting Arctic sailing guidelines, in general it is not surprising that an insurance firm would issue their own Arctic shipping standards. There may be several reasons for this.
Firstly, the Polar Code is a goal-based standard. This implies that in many instances it will be up to the national administration to interpret the more detailed requirements the code sets forth. For instance, the Polar Code may allow for so-called category C ships (ships which under the Polar Code have the lowest ice strengthening requirements) to be exempted from polar-class requirements. However, the criteria for such exemptions will typically not be specified and it may be left to the national administration to decide. Possible ships in this category would include certain large cruise ships.
Secondly, the Polar Code does not address the fundamental challenges resulting from the infrastructure deficit in the Arctic. Currently, only 5 percent of the Arctic is considered to have sufficient navigational charts necessary for safe navigation, according to an IMO submission by the International Hydrographic Organisation. Yet as our Arctic mapping service (www.arkgis.org) shows ships are traversing most of the Arctic.
Other issues such as challenging communication environments and a lack of reliable ice and iceberg data and the ability to predict the presence of old-ice inclusions in first-year sea ice are other risk factors that are not addressed by the Polar Code, even though they provide significant risks to ships and thus to their insurers.
In this sense, additional guidelines are not necessarily only guidance on how to implement the Polar Code, but they can be a measure for insurance companies to raise concerns not addressed by the Polar Code or to address its weaknesses. Such needs may stem from the fact that, from an insurance point of view, it is virtually impossible to get reliable risk data from the Arctic. This is due both to the lack of historical data as well as to the changing nature of the Arctic, including an increasing number ships with limited experience sailing in ice covered waters now sailing through the Arctic. Consequently, risk premiums are difficult to calculate, and insurers may therefore seek other means to minimise their risks.
WWF’s view is that the current Polar Code, in particular as it relates to specifying environmental protection measures, is weak. This would also be a concern for insurance companies in the event of large oil spills. The Polar Code currently does not contain any explicit measures for reducing risks related to oil spills directly, despite the fact that the Arctic Council’s Arctic Shipping Assessment identifies this as the biggest environmental threat from shipping. In this sense, it is likely that increasingly more insurance companies will scrutinise the Polar Code and its enforcement and follow Lloyd’s example of issuing their own dedicated standards to guide their customers when operating at this fragile and challenging environment.
The author is a climate and sustainable industries advisor for WWF Norway.