“Many countries have long coastlines, many countries have many ships, but few have managed to exploit the sea’s potential better than this little country up here at the ice edge, and even fewer have managed to do so generation after generation,” said Sturla Henriksen, Norwegian Shipowners’ Association Director General, at its 100 year anniversary seminar in September. In an interview with Norway Exports, Henriksen talks about the NSA’s milestones and the challenges facing the industry.
The Norwegian Shipowners’ Association (NSA) first came about in 1909 when representatives of the local shipowners’ associations met with former Norwegian Prime Minister Christian Michelsen, the NSA’s first president, to create a national association for the industry.
Today, the NSA boasts 163 shipowner members employing 55,000 seamen from 50 different countries on nearly 1,500 vessels. Norway is the fifth largest shipping nation. Its maritime industry is the second largest industry after petroleum with a total NOK 100 billion in value creation and 100,000 employed.
“Our key achievement has been our ability to manifest the value of the association through 100 years,” said Henriksen. “We have emerged as strong, vibrant organisation and prominent representative of the industry. That is the main achievement.”
|“A strong maritime tradition, a wide maritime environment, and an indomitable will to continuous innovation is cultivated in our main and only competitive advantage: our unique maritime expertise,” said Sturla Henriksen, NSA Director General, in his speech marking NSA’s 100 year anniversary.
© Norwegian Shipowners’ Association
The Industry Unites
There were many factors leading to the creation of the NSA. The industry gradually began to be subject to international rules. In 1900, the United Kingdom introduced compulsory load lines on ships, which became applicable for Norwegian ships ten years later. In 1903, the Seaworthiness Act was adopted in Norway and introduced the first public ship control. Employer liability also became an issue. In 1907, the coastal route companies were forced to accept the collective agreement for sailors and stokers.
“Around the turn of the century, there were a number of circumstances,” said Henriksen. “The formation of the trade unions, new regulatory regimes, new legislation on seamen, and the (Norwegian) maritime directorate was established. So it was quite obvious that the industry was faced with a different social and economic environment.”
Norway’s history as a maritime nation began long before the association was formed. The shipping industry made particular progress in the second half the 19th Century when Norwegians went from carrying timber to become the third largest maritime nation. The country lost many sailors – and half the merchant fleet- during the war. But when world trade picked up, it was soon among the world’s leading and largest in the transport of goods.
It was the discovery of petroleum at the Ekofisk field in the North Sea in 1969 that spurred the development of the offshore industry into a whole new dimension. Norway’s maritime expertise became the basis for its development as an oil and gas industry and its later expansion into the most specialised and advanced maritime segments.
Since then it has grown to become the world’s second largest offshore fleet, including supply ships, anchor handling tugs and floating production storage and offloading vessels. Maritime offshore companies represent half of NSA’s members.
One of the recent important events during the history of the NSA has been the introduction of the Norwegian International Ship (NIS) register. In the 1980s, flagging out became unavoidable due to strong pressure on the freight market. But thanks to the establishment of the NIS, the fleet rose back up to more than 55 million dead weight tonnes, after having fallen to 10 million. As of last year, there were 385 ships registered in NIS and owned by Norwegians.
“The introduction of the NIS in 1987 was a pivotal turning point after a long period of decline in the Norwegian fleet,” said Henriksen.
“We want to have a significant part of the Norwegian controlled fleet under the Norwegian flag because it will reflect our position as a large maritime nation and will also be an element in the influence we are able to exercise in international bodies,” he said. “In a way, a large Norwegian flag fleet contributes to our weight in international issues.”
“We facilitate the process and welcome the growth, but our point of view is that is a commercial decision to be made by the companies,” Henriksen added. “We would welcome a development whereby the Norwegian flag becomes more attractive.”
|Vessel Star Istind owned by Grieg Shipping, one of NSA’s 163 members.
© Norwegian Shipowners’ Association
The other main issue facing NSA’s members has been the introduction of the tonnage tax scheme in 1997 and the adoption of a new taxation scheme in 2007 following the European Union model, according to Henriksen. Two Norwegian shipowners have won the fight against the government and its new tax scheme, whilst a third case was found in favour of the government. All three cases are about to be forward to the Norwegian Supreme Court in January, with a resolution expected sometime in the spring of 2010.
“This is an extremely important matter because it is a retroactive tax worth NOK 21 billion,” said Henriksen. “It is a matter which involves our Constitution and we are of the opinion that it is unconstitutional.”
Going forward, the NSA will be focusing on other big issues as well, namely the impact of the financial crisis. The NSA has been in active dialogue with the authorities on helping shipping companies get access to capital. It was instrumental, for example, in getting the government earlier this year to extend the borrowing scheme with Eksportfinans, the Norwegian export credit institution for export financing.
Its other big focus areas will be climate change and the reduction of harmful emissions to air and sea, as well as the piracy situation off the Horn of Africa. But in the long term, the two dominant issues will be the education of seafarers and constant innovation, both on the regulatory side and through research and development.
“Norwegian shipping companies have always been at the forefront of development,” said Henriksen. “We are a major shareholder in MARINTEK and have organized the largest private sponsored initiative on competence through 14 – and on the way to becoming 20 -- sponsored professorships under the Global Maritime Knowledge Hub.”