Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019

Lord Adonis Excerpts

Wednesday 20th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these regulations will be made under powers in the European Union (Withdrawal) Act, and are needed if we leave the EU without a deal. Marine equipment, as we are discussing today, is the collective term used to describe a ship’s safety and pollution prevention equipment. Examples include lifejackets, fire extinguishers and navigation lights.

Marine equipment is regulated globally by the International Maritime Organization, the IMO, under three international conventions: the International Convention for the Safety of Life at Sea, the International Convention for the Prevention of Pollution from Ships and the International Regulations for Preventing Collisions at Sea. Collectively, these international conventions require flag state administrations, such as the UK, to ensure that marine equipment complies with certain safety requirements regarding design, construction and performance standards; and to issue the relevant certification before equipment is installed on board a ship flying its flag. The flag state in the UK for these purposes is the Maritime and Coastguard Agency, the MCA.

Historically, each EU maritime administration had its own systems and requirements for the approval or conformity assessment of marine equipment. To help the free movement of goods, the EU adopted legislation to harmonise the way in which EU member states implement the IMO conventions. This legislation allows member states to designate conformity assessment bodies on behalf of the EU to issue an EU-wide approval for marine equipment.

Marine equipment approved in accordance with the EU legislation may be installed on any EU-registered ship, and the international obligation of each EU member can be discharged accordingly. The MCA, on behalf of the Secretary of State, has designated 10 conformity bodies for the EU which approve marine equipment in the UK. In the event of no deal, the MCA intends to convert these 10 bodies from EU-notified bodies to UK-approved bodies, to allow for continuity in the method of approval for marine equipment in the UK, and to ensure that the UK continues to meet its international obligation.

The MCA regularly meets with these 10 bodies and has kept them informed of the proposals. The 10 bodies have been supportive to ensure that the UK continues to have a functioning statute book. Similarly, the MCA regularly meets with manufacturers of marine equipment, and has received only positive feedback on the proposed instrument.

The EU directive 2014/90, known as the marine equipment directive, and related legislation established the harmonised EU system, criteria for designating conformity assessment bodies, mechanisms for ensuring the compliance of equipment, and remedial measures for removing risks to the safety of life. The regulations in this case, which this SI is changing, includes the Merchant Shipping (Marine Equipment) Regulations 2016, which implement the 2014 marine equipment directive in UK law. The Act also makes provision in Section 8 for regulations to correct deficiencies in retained EU law arising from the UK’s withdrawal from the EU.

These regulations make the changes needed to the marine equipment regulatory framework to adapt the EU approval system to one that can function effectively as a UK approval system, if we leave without a deal. The regulations retain the status quo as far as possible to avoid market confusion and allow continuity of operations for manufacturers. Specifically, the regulations do not change the design, construction and performance standards applicable to marine equipment; the methods for conformity assessment of marine equipment; the requirements to become a designated conformity assessment body; and the mechanisms for protecting the UK market against fraudulent or unsafe equipment. The regulations will allow UK ships to continue to use marine equipment that has been approved under the EU system. However, the regulations also establish a new approval system. The regulations make changes needed to ensure the UK approval system works, for example by changing references to “member state” and “the Commission” to “the United Kingdom” and “Secretary of State”.

Noble Lords may be aware that, once again, the SLSC recommended that these regulations be upgraded to the affirmative procedure. Again, I am grateful to the committee for its careful consideration of the regulations. The committee noted that in a no-deal situation it is the Government’s long-term aim that UK ships will use the UK approval system only. The committee was concerned about the additional costs for manufacturers that might need to seek an EU approval as well as a UK approval. As we set out in the new Explanatory Memorandum, the regulations before the committee do not place any limit on how long the UK ships can use EU-approved equipment. Therefore, there will be no additional costs for manufacturers as a result of this SI. If anything were to change in the future, the Government would introduce regulations to remove the time limit only after widespread consultation and careful consideration of the costs and benefits.

[Lord Adonis (Lab)]

The Minister said that there would be no additional costs to manufacturers. But will there be additional costs to ship owners—that is, to the consumers?

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Moved by

[Lord Adonis]

Leave out from “that” to the end and insert “this House declines to approve the draft Regulations because they were not subject to consultation or an impact assessment.”

[Lord Adonis]

My Lords, I am very grateful to the Minister for her rapid-fire introduction. I hope she will not mind me saying that the only thing that she said which I welcome is that there will be a plain English marine information note. She said that this would be for foreign ship owners, but may I suggest that she also circulates it to Members of your Lordships’ House, because we might find the plain English version a great deal more comprehensible than these regulations.

No one can doubt the importance of the issues that we are talking about, even at this late hour—although the noble Lord, Lord Grade, may think it superfluous for us to pay any attention to them at all because it is keeping him from his dinner. We are talking about life-saving appliances, firefighting equipment, navigation equipment, pollution prevention and reduction equipment and so on—literally life and death equipment in respect of ships and the operation of a safe marine industry. So it is important that we get this right, and the noble Baroness and her department are doing their level best to do so.

I have a question and a comment. The noble Baroness may have answered the question, but I need to be clear that I fully understand it so that people reading the account of our debate fully understand it. The big question is what is meant by “choice” in paragraph 7.2 of the Explanatory Memorandum, which says:

“Under these Regulations, UK ships will have the choice of two types of approved marine equipment: (i) equipment which has EU approval … or (ii) equipment which has been approved under the UK system which these Regulations establish”.


When I read that, it worried me, because the choice might mean that you have a confused situation where operators could potentially opt for the less demanding standards in respect of this equipment, as our standards diverge over time. That is not a situation, I think, that the House would welcome—let alone our EU partners, who might then raise some serious questions about trade between our countries.

I need to explain what I think is the situation for the Minister to tell me whether I am correct. There is not in fact a choice. The actual situation is that ship owners that are operating on exit day and that have EU equipment can simply continue operating with EU equipment without any end date. But what is the situation for new ships—or is it new equipment on ships? I am already reaching an issue that it is important to clarify. Is it new equipment that can meet UK standards rather than EU standards, or is it just new ships? I would welcome a clarification of what the actual regime is. If I have got it correct, the issue is not that they have a choice but that equipment and/or ships procured after exit day can observe new UK standards, insofar as they diverge from EU standards—one would hope that they do not diverge, or we could get a gaming situation in respect of different standards.

Simply in seeking to explain this to the House, I have already noticed one issue: namely, can ships that are in operation on exit day which have existing EU-approved equipment replace that equipment to the previous EU standard, or will they be required to have equipment of the new UK standard? Or does the new UK standard requirement apply only to completely new ships? I am not a shipping industry expert, but I imagine that a lot of this safety equipment goes together and that mixing and matching to different standards would not be a good thing. I would be grateful if the noble Baroness would confirm that the actual situation is that there is not actually a choice but that it is a question of dates.

I shall make a point that I make all the time—it does not become a less significant point just because this is about the 100th time I have made it—that, given the issues at stake here, there should clearly have been consultation with the industry. There has not been consultation, but we get a new formulation for the lack of consultation in each of the regulations. Sometimes it is “focused stakeholder engagement” and sometimes it is “trusted stakeholders”. In the Explanatory Memorandum of this one we are simply told, at paragraph 10.1:

“The marine equipment industry has been informed of the Department’s intention”.


That is all it says, and then it says that thereafter there has been “informal engagement”. There is not even a pretence of consultation in this regulation. The industry has simply been informed.

As for safety standards, of course it is the job of the Government and Parliament to set those safety standards. My concern is that they will not be in any way diminished and that there is nothing in these regulations—and in particular the prospect of UK regulations diverging from existing EU regulations—that could lead anyone to expect that they will be diminished over time.

[Lord Mackay of Clashfern (Con)]

My Lords, this amendment is dependent on the requirement of consultation and a document setting out the effect of the regulations. As far as I know, there is no requirement for either of these in any of the empowering statutory provisions. Therefore, this is by no means a basis for the amendment that the noble Lord, Lord Adonis, has signified. As I understand it, what is happening is that the regulations, which previously were all European regulations, will continue to apply in the same form, but with the expression of these regulations in the UK area of shipping.

Perhaps I should mention that I am an Elder Brother of Trinity House: what effect that has on this, I am not sure, but I will mention it just to be certain. I am certainly concerned with the safety of shipping and I believe that the instrument is, too, in that it preserves the existing standard of safety, both in Europe and when it passes from Europe to us here. It is the same standard and I cannot for the life of me see any reasonable basis on which this regulation could be set aside. It would be a drastic thing to set it aside and I ask the same question that I asked the last time I spoke on something like this: has the noble Lord, Lord Adonis, asked anybody who is affected by this whether they would like this regulation to be set aside?

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[Baroness Sugg]

I thank noble Lords for their consideration of the final regulations of this evening. International conventions require each flag state administration to approve marine equipment, and once we have left the EU it would not be appropriate for the UK to fulfil its international obligations through an EU system that we can no longer influence. That is why we are setting up the UK system. It will allow the 10 UK-based conformity assessment bodies to continue offering services to the UK market. If we allowed only EU-approved equipment, those bodies would be in the strange position of having to relocate to the EU to provide to the UK market.

We understand that we need to ensure that the UK bodies can continue to offer EU-approved equipment. The new regulations apply both to existing ships and new ships, which will all be able to use either EU-approved equipment or UK-approved equipment. That does not have a time limit currently. The Government will consider whether we should move towards the UK system, but that would be done only after very careful consideration and consultation with the industry.

There will be no reduction in standards under the regulations. As I said in my opening statement, they retain the existing international standards set at IMO level, and that is what we will stick to. They apply the same familiar process and procedures to marine equipment approvals, to minimise disruption to industry. As the noble Baroness, Lady Randerson, noted, some of the 10 UK-based EU-notified bodies have a global client base—and long may that continue. They are global operations and have offices internationally. We anticipate that some of the UK-based notified bodies with offices in the EU will make contingency plans to enable them to maintain their EU-notified body status, but we have no information about any of the UK-based notified bodies moving there. These are global companies that provide to a global market, and we expect them to be able to continue to do so.

Both the EU system and the new UK system are established on IMO standards, so manufacturers do not need to produce to two standards. A UK manufacturer may maintain its existing EU approval and keep EU market access, while also maintaining UK market access.

No formal consultation has been done on this instrument, but the MCA and the department regularly meet the assessment bodies and the manufacturers. Both groups recognise that the regulations are needed to maintain the status quo, and I am pleased to be able to say to the noble Lord, Lord Rosser, on our final SI this evening, that both the UK Chamber of Shipping and Nautilus, the seafarers union, are participants in the MCA industry committees, and have been consulted. These meetings occur very frequently, every three to six months.

This statutory instrument is necessary: if the House does not approve it, there will be no legal basis for UK notified bodies to continue operating in the country. The companies and those who work for them would therefore face uncertainty. If this SI were not approved, we would not be able to accept equipment from the EU or investigate non-compliance. So it is essential. We have not carried out a full impact assessment of the regulations because their purpose, intent and real-world effect is to do everything possible to minimise cost and disruption. Noble Lords should be aware that the impacts and costs to business of not making these regulations would be significantly higher—as I said, it would lead to uncertainty.

I hope that I have managed to address the points that have been raised. I thank all noble Lords who contributed to the transport SI debates. I am genuinely grateful for their scrutiny; these are important pieces of secondary legislation, and the House is certainly doing its job in scrutinising them. Marine equipment approvals are, of course, vital to ensuring the safety of those on board ships and the protection of the marine environment. I hope that noble Lords will agree that this SI is essential to ensure that the legislation on marine equipment approvals will continue to work effectively in the UK in the event of no deal.

[Lord Adonis]

My Lords, I join in the appreciation of the Minister for the meticulous way in which she has handled our debates this evening. However, I want to clarify one point: that when the Explanatory Memorandum uses the word “choice”, it means that there will indeed be a choice on an ongoing basis, and that ships and their owners will be able to choose whether they have EU-approved and certified or UK-certified equipment—they will not have to shift from one to the other by virtue of the fact that they are purchasing the equipment after exit day.

[Baroness Sugg]

That is indeed the case. They have a choice: UK or EU. That is for new and existing ships and there is no time limit on that choice through the regulations.

[Lord Adonis]

My Lords, I thank the Minister for clarifying that point. My one final remark is that a felicitous moment in the debate was the revelation that the noble and learned Lord, Lord Mackay, is an Elder Brother of Trinity House. He shares that great distinction with Sir Winston Churchill, who used to appear frequently in the uniform of an Elder Brother of Trinity House. I hope that the noble and learned Lord might do so in future in the House, so that his great and esteemed rank is fully on display. On that note, I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.