Ethical bunkering: a fairy tale or reality?

In spite of the title, I’ll resist the urge to begin with “Once upon a time…”.

There’s no doubt that this is an important time for the bunker industry. Our industry is undergoing a period of dramatic and unprecedented change which affects us all. Do you know anybody in our business that isn’t busy, moving at a hundred miles an hour, eyes fixed on their laptop or phone?

I’m going to ask you to slow down for a minute and to think about where we’re headed as an industry. We’re at a crossroads, faced with some important choices.

IBIA is the International Bunker Industry Association and we aspire to be the voice for the global bunker industry. We represent the industry from suppliers to buyers – the entire industry value chain. That’s all of you reading this today.

There are three factors which have the potential to radically change the landscape in which we operate and it’s only natural that these are covered in an industry conference:

Regulatory change (e.g. mandatory MFMs in Singapore & the 2020 global sulphur cap);
new technology (e.g. digital platforms, automation and mass flow meters); and
counter party risk and the reduced availability of credit

However, there is another topic which is rarely discussed and which I feel is more important than all of these. But it’s almost as though we’re too embarrassed to acknowledge it.

We need to talk about ethics and we need to talk about it right now. Ethics, at its core, means doing the right thing regardless of whether or not there’s a legal obligation to do so.

There are many reasons to be proud of our industry. The bunker industry, as the servant of shipping, powers global trade; we bring prosperity to every corner of the globe; and the global bunker industry is a significant charitable benefactor. I believe that the majority of us are operating ethically – that is, within both the spirit and the letter of the law.

However, it’s naïve to believe that these are the first things that everybody thinks of when they think of the bunker industry. In fact, to many this would be a fantasy or fairy tale description of our industry. There are times when these facts are less evident to the public and when a darker side to the industry is hinted at or revealed. This harms all of us which is the reason why we need to talk about it now.

I recently had the opportunity to talk directly with the Netherlands Authority for Consumers and Markets. They’re leading the recently announced price fixing investigation and while the details of their investigation are confidential they did make some interesting comments. In one month’s time, 8-9 November, we’ll be addressing our members in Singapore at the IBIA Annual Convention where the effects of the Mass Flow Meter legislation are beginning to have a real impact in the market. IBIA fully supports the MPA’s efforts to ensure that the legislation is effective.

Licenses are being revoked and, in some instances, the survival of some companies is under threat. It is regrettable that some individuals’ illegal, unethical actions end up damaging the livelihoods of others that are caught up in the ripple effect.

Is the bunker industry an Ugly Duckling that will flourish and grow up to become a beautiful swan or are we more like the Naked Emperor with a completely false image of reality and how we’re perceived by others?

What is ironic is that there is compelling evidence that ethical businesses are more profitable than others. It pays to do the right thing! In addition to enjoying a healthier bottom line, there are numerous other benefits:

Ethical companies are perceived as positive role models in society
Ethical companies become trusted business partners
Ethical companies have improved levels of customer and employee loyalty
Acting ethically has a positive effect on a company’s brand value

However, it will be argued by some that making a business case for ethics might suggest a lack of commitment and sincerity; and, that companies need to embrace the ethical approach by deciding to prioritise the long term, the intangible and the existential over the specific and measurable.

At IBIA we are certain that the time for philosophical debate and talking is over: our industry needs to act! As the industry association, we will not watch from the side lines while the debate is left to the cynics and critics. It’s important that we present a balanced view of the current situation. These days we face a barrage of 24 hour breaking news and the media competes for our attention with melodramatic headlines and click bait. At times it can seem that the world is lurching from crisis to crisis and that life is progressively worsening. However, this is simply not true. It’s a fact that global rates of hunger; poverty; illiteracy; child mortality and pollution have all improved significantly in the past 25 years.

– We’ve made more progress over the last 100 years than in the first 100,000
– 285,000 more people have gained access to safe water every day for the last 25 years
– In the last 50 years world poverty has fallen more than it did in the preceding 500

However, these facts are rarely considered worthy of headlines. And so, when we consider the reality of our own industry let’s avoid melodrama and take a sober, balanced view of how things are. These days it’s too easy to be a critic and there are many who mistake cynicism for wisdom and the voice of experience. They’ll claim that the entire industry is crooked or that they are the only virtuous operator in the room. However, at IBIA we’re optimists as well as pragmatists and, in the case of the bunker industry, I view cynicism as the first defence of those who have given up and who are unwilling to invest any effort in trying to improve life for others. The bunker industry is a family and like all families there are times when we face difficult circumstances. The best way to manage these difficult times is by discussing the key issues openly – in a constructive, pragmatic way – and solving them together.

I’m appealing to you – our members – and the entire industry to join us in this endeavour. At IBIA we represent all stakeholders and thus it’s natural that we should lead these conversations on your behalf. Doing the right thing and making informed choices have never been more important in our industry. Our intention is not to lecture you – rather it’s our role to listen and to better understand the challenges that you face. It would be interesting hear your views on a range of topics, such as:

Do you believe that MFM technology will become the global standard?
Is it true that a significant minority of suppliers in some markets are unaware of the regulations that govern pricing? This was one of the findings in an academic study of the local market in the Netherlands.
Will the market reward people who do the right thing?
What proportion of ship owners will comply with IMO regulations post 2020?

Now is the time to act and IBIA has already engaged a number of its members in a Working Group to develop the “IBIA Guide to Best Ethical Practice”. The guide will:

Create an ethical code which encompasses the entire bunker industry value chain
Develop an IBIA Ethics & Compliance Accreditation programme
Clarify the relationship between Ethics, Anti-Corruption, Sustainability and CSR
Highlight success stories within the bunker and maritime industry

In conclusion, although we are pragmatists at IBIA we are also optimists and we are confident that the bunkering industry will improve its image and be perceived as a good corporate citizen. If we collectively commit to a better bunker industry then:

IBIA will endeavour to help you avoid kissing too many frogs along the way;
IBIA will get you to the ball before midnight (on 31 December 2019); and
Maybe “Happily Ever After” will become a reality for the entire industry!

The above is based on a presentation given by Justin Murphy at the ARACON conference in Rotterdam on Octiber 12, 2017. You can comment on the issues raised here or offer to help IBIA in this endeavour by emailing Justin: justin.murphy@IBIA.net