Unicorn among the Cedars: On the Possibility of Effective ‘Smart Regulation’ of the Globalized Shipping Industry

Abstract

This article considers the prospects for effective regulation of emerging globalized industries by examining the effectiveness of the ‘smart regulation’ approach associated with the port state control enforcement regime for seafarers’ health and safety. Smart regulation seeks to generate incentive structures that promote proactive compliance by ship operators. Drawing on an international comparative study, which included extensive observation of ship inspections in India, Russia and the UK, it is suggested that the main reason why the hoped-for ‘market in virtue’ is only weakly present turns on the perceived and actual inconsistencies in the implementation of the regulatory regime. These contrasts exist cross-nationally, and are manifested in terms of differences in the local character of enforcement practice, and in levels of trust in national regulatory administrations. The strong overall regulatory framework, the political will to avoid damaging maritime accidents, and the well-developed system of port state control, all suggest that the shipping industry may be taken as a test case for the possibility of effective smart governance of a globalized industry. The limited gains achieved in this sector thus bode ill for effective future governance of other emerging globalizing industries.