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

Lord Rosser Excerpts

Wednesday 20th February 2019 Lords Chamber

Finally, I want to mention briefly once again the issue of the impact assessment. Paragraph 12 of the Explanatory Memorandum claims that there is no significant impact on business so there has been no impact assessment, but paragraph 10 gives some detail on the “Consultation outcome”, including that manufacturers were concerned about having to pay for things twice. Can the Minister clarify whether there was a proper consultation process? Patently, there is an impact on business—on manufacturers, on the people who own and run the ships and on the notified bodies which may be going to move abroad. It is important that the Government accept that the policy of simply stating that there is “no impact” without any evidence because they have not done any consultation is not good enough in the case of these SIs.

[Lord Rosser (Lab)]

The Explanatory Notes say that:

“The purpose of these Regulations is to ensure that the UK can continue to comply with its international obligations by applying international standards to marine equipment placed on UK ships and enforce those standards”.


As I understand it—and as has already been said—the kind of marine equipment covered includes life-saving appliances, crew accommodation, navigation, fire protection and maritime pollution prevention. Despite that, the Explanatory Memorandum states in paragraph 7.9 that:

“These Regulations are unlikely to draw attention from the general public but will be of interest to UK manufacturers, UK conformity assessment bodies for marine equipment and UK ship operators”.


Apart from the general public, who appear to have been excluded, another rather important group does not appear to have been consulted if the wording of the Explanatory Memorandum is to be taken at face value: those who work on ships—the officers, crew and their representative organisations. I say do not appear to have been consulted or involved because paragraph 10.1 of the Explanatory Memorandum states that,

“informal engagement has included regular meetings at long established forums with key industry stakeholders”.

What were the dates of these regular meetings and were the trade unions there as “key industry stakeholders”?

The Secondary Legislation Scrutiny Committee—as has already been said—recommended that this instrument should be subject to the affirmative resolution procedure because of the impact it may have on industry. At present, organisations known as EU-notified bodies assess and approve the conformity of marine equipment, with 10 such bodies based in the UK. These UK-based bodies will become UK-approved bodies on exit day and if any wish to retain their notified-body status in the EU they will need to seek notification from an EU member state. According to the Government, to do this they will need to relocate to the EU. Apparently, the Government are aware that some of the larger notified bodies have started this process already where they are relocating to one of their EU-based offices. What will be the difference between a UK-approved body based in the UK and a notified body based in the UK which has relocated to one of its EU-based offices as regards its powers, role and regulation, and what will be the difference between the two as far as the industry, including seafarers, is concerned?

Paragraph 7.2 of the EM states:

“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”.


What do the Government believe are the advantages and disadvantages of the two types of approval from the point of view of ship owners and the seafarers who crew the ships? That is not clear from the Explanatory Memorandum.

The Government’s position is that, while on exit day the UK will facilitate continued acceptance of EU-approved products, this provision will at some stage be time-limited. What considerations will the Government take into account in determining when to time-limit this provision, and what will be the impact on the industry? Marine manufacturers have expressed concerns that they will have to pay twice for conformity assessment in the future when this happens. What is the Government’s response to that?

On the point about paying twice, the Government say in the Explanatory Memorandum that this instrument,

“will not require manufacturers … to pay twice”,

and that this would or could apply only following further secondary legislation,

“should the Government decide to time limit the continued acceptance of EU approved marine equipment”.

That is in paragraph 3.4 of the EM, but in paragraph 3.3 it says that it is government policy,

“eventually to time limit this provision”,

of continued acceptance of EU-approved marine equipment. Which is correct: paragraph 3.3, which states that the Government have already made a policy decision to time-limit this provision, or paragraph 3.4, which says “should the Government decide” to time-limit this provision—that is, that no such policy decision has been made?

Paragraph 6.2 of the Explanatory Memorandum refers to the current Merchant Shipping Notice being,

“updated to reflect the changes necessary as a consequence of the UK leaving the EU”,

and says that a draft of this revised Merchant Shipping Notice accompanies the Explanatory Memorandum. Can the Minister confirm that the MSN amendment 3 attached to my copy of the Explanatory Memorandum is the draft revised MSN referred to in paragraph 6.2? If it is, could she spell out the nature of the revisions that are being made to the current MSN by this draft revised MSN now in front of us?

Paragraph 7.3 of the EM states:

“The design and performance standards to which the approved prototype(s) was constructed form the ‘benchmark’ against which all subsequent production of the equipment is measured”.


Who will carry out that measurement after we leave the EU? Will they have to be bodies based in the UK or could they also be bodies that have been designated as an EU-notified body?

Paragraph 12.3 of the EM refers to the impact on businesses and the public sector being limited to “minor familiarisation costs”. What exactly are those costs, and where and how will they be incurred?

Lastly, can the Government explain the impact of this SI on new IMO regulations covering marine equipment, which are to be introduced after this SI comes into effect and before any future trade deals between the UK and the EU are agreed and implemented?

Since this—I hope—will be the last occasion this evening on which I will speak—

[Noble Lords]

Hear, hear!

[Lord Rosser]

I knew I would get approval for at least something I said. I take this opportunity, after a fairly long evening, to express my thanks to the Minister for dealing with these SIs in her usual good-natured and patient manner.

[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.