Regulatory intermediaries in global environmental governance: A case of shipping industry

This paper scrutinizes the role of private actors acting as regulatory intermediaries in governing environmental standards for the global shipping. Shipping, an industry that enables effective linkages within the global value chains by serving about 90% of global trade, is a significant contributor to pollution of marine environment and global air emissions. Previous research indicated a high degree of regulatory fragmentation within shipping environmental governance, as well as highlighted widespread involvement of private actors as regulators who act by setting, monitoring and implementing voluntary standards (e.g., codes of conducts, regulatory contracts, certification, reporting schemes). Recent studies in regulation and governance have criticized the approach that focuses solely on the interactions between rule-makers and rule-takers. They pointed out that regulatory intermediaries, or in-between actor engaged by a third party to help them achieve their regulatory goals, shall be added to the analysis of global governance in order to shed light on the nature of transnational interactions and provide more nuanced analysis of interests, power, and accountability. To redress the research gap, this paper develops an account of classification societies as rule intermediaries who are shaping, translating and managing regulatory instruments within the shipping environmental governance. Basing on qualitative empirical material, this paper investigates the interactions between rule-makers (IMO, nation states, port authorities, regional organizations and the EU), rule-takers (shipping operators), and rule-intermediaries (classification societies) that engage in governance of vessels-based pollution. Classification societies, an institution that emerged in the 18th century to categorize ships according to their insurance risks, currently occupy a unique position as non-governmental standard-setting bodies as regards design, construction and maintenance of vessels. The material for the study consists of interviews, participant observation, and existing repositories of information analyzed with tools of qualitative process tracing. The framework of rule-makers, rule-takers, and rule-intermediaries offers a novel perspective upon the dynamics of relationships between classification societies and public actors involved in shipping environmental governance, as well as in global environmental governance in general. I argue, that the case of shipping grants a unique perspective on the power dynamics within the industry of verification, auditing, and third-party quality assurance. It suggests two broader lessons for the study of regulatory intermediaries in global environmental governance. First, my findings emphasize the advantage for public rule-makers to have regulatory intermediaries, as the involvement of the latter can address gaps in regulatory regimes, without having to deploy significant resources. Second, they show that the emergence of global environmental regime in shipping established by international maritime conventions did not reduce the power of classification societies as private regulators, but rather strengthened their role as regulatory intermediaries placing a flag State at the arm-length from the vessels flying its flag. The autonomy of private regulatory intermediaries thus lessens the leverage public rule-makers have over private rule-takers. Understanding the two sides of regulatory intermediation is essential to critical review of the mechanisms that aim at transparency and accountability in global environmental governance.