Maritime industry contributes as much as 13% to the national economy – MMF

Chairman of the Malta Maritime Forum Godwin Xerri

Last Updated on Thursday, 6 April, 2023 at 12:24 pm by Andre Camilleri

Over 90,000 vessels are registered under the Malta flag

Semira Abbas Shalan

The Maritime industry contributes to as much as 13% to the national economy, generating over 20,000 places of employment, Chairman of the Malta Maritime Forum Godwin Xerri said.

The Malta Maritime Forum’s scope is to provide a platform for as many players as possible within the Maltese maritime industry, as well as foreign companies established in Malta.

Speaking to The Malta Business Weekly, Chairman Xerri and CEO of the forum Kevin J. Borg spoke about the current issues the industry faces, as well as the forum’s prominence within the industry.

Xerri, one of the co-founders of the MMF, was asked why the forum was established, as well as if it has succeeded in fulfilling its purpose.

Xerri described the objective of the forum as the voice for all those whose livelihoods centre from the sea. He said that Malta lacks any form of raw materials, relying on the people, the sun and the sea.

“Our forefathers were clever enough to use the sea and Malta’s strategic position in the Mediterranean as an asset, and what we do today is a reflection of what they built upon,” Xerri said, hence using Malta’s position as a steppingstone for distribution.

“The forum is fulfilling that role with humility. Till this very day we keep receiving applications from people, companies, to join the forum. That in itself is proof that people are looking at this forum as a viable source where to get their voice heard,” Xerri said.

Xerri said that one issue the forum is tackling at European Union level is the issue of the ‘one size fits all’ approach. He said that Malta and island states have their own realities and challenges, which is where the forum comes in, with the need to be relevant to the members and the country.

If there are measures which can impact Malta negatively, we propose alternatives, he said. One challenge European ports are facing is, as part of Europe’s ‘Fit for 55’ pledge, shipping lines and containers would be subject to taxes to counter environmental impact. This, however, will not be extended to non-European ports.

Xerri said that he is pleased that Members of Parliament are aware and voicing their concern over this, working for a common voice.

“The forum is meeting its purpose as long as it is relevant to the realities affecting our maritime industry,” Xerri said, adding that a lot more still needs to be done.

Xerri continued that the forum tries to be apolitical, considering themselves as a forum of companies, people and professionals, rather than a lobby.

Chairman Xerri is stepping into the shoes of two important predecessors, Dr Joe Borg, and Judge Emeritus Joseph Zammit McKeon. Asked what he plans to achieve during his tenure, as well as his immediate priorities, Xerri insisted on quality, seriousness and providing solutions.

“We appreciate the quality of the standard both gentlemen brought to the forum. Thanks to them, the forum is today identified as being professional, serious, and correct in its interactions between government and industry,” he said.

His intention is to continue on their path, which is the path to listen, relate with members, take into account their considerations and hesitations, and propose to government solutions to the problems.

“We are there to propose solutions. Criticising is healthy, but with criticism one must also be responsible to provide solutions. Whether the solutions we propose are acceptable for government is beyond us. There are political dimensions, but the forum has no particular agenda apart from the maritime industry itself,” Xerri added.

He said that there is so much to be done that it is impossible for one person to do it alone. The necessary focus must be given to the maritime industry, as it contributes as much as 13% to the national economy, generating over 20,000 places of employment.

Xerri said that all the forum asks is for the need for focus and dedication, which can only be done through a dedicated Maritime Authority, which currently, is in conjunction with other activities.

“We have to be conscious that we must compete with all other ship registrations in Europe. We must present, persuade, and be present for every ship, yacht which is brought under the Malta Flag,” he said.

Xerri said that Malta lacks an element of marketing, adding that we should showcase our ports, the flag, as well as the excellent legislative background on the maritime industry.

“We must showcase our products, and ensure that when we attract business, we can also cater for it,” Xerri explained, saying that one aspect the forum is pushing on is the efficacy of the decision making process, which would also be facilitated through a dedicated maritime court.

Borg explained that there is international investment in Malta’s port operations, with the Freeport and Valletta cruise port being on international companies’ agenda. A maritime court would have efficient redress of any company who could have their case heard in Malta, Borg added.

Xerri continued to explain how the drive for standard in bringing the best practices into play is essential to the forum. He said that the forum is currently working on creating awareness and commitment, with regards to complying with Environment, Social and Governance (ESG) criteria within the maritime sector.

He spoke about the importance of the Malta Flag, with the need to move from quantity towards quality. He said the flag became synonymous with the maritime industry, with it being the fifth largest in the world, and over 90,000 vessels registered under it.

Xerri said that the merit in the flag is the product of what has been done in the past, and also through consistent support by different administrations to ensure that the Malta flag remains at the forefront.

“Growing in number is one measure of success, but one has to analyse and be aware of where the numbers are coming from and the continuous analysis of who is subscribing to the Malta Flag,” Xerri said.

Xerri said that quality is as important as quantity, and so there must be analysis to ascertain that all sectors within the shipping industry are attracted to the Malta Flag. He said that there are different conventions which ascertain that shipping is operated at a standard.

He highlighted that it is more challenging to attract business these days, as some countries manage to obtain more value from getting a vessel registered under their flag through the attraction of ship management companies.

“We cannot rely only on fiscal advantages to attract business but having Malta as a maritime nation giving a total solution to the ship owner, is in our opinion something which will be more sustainable and permanent,” he said.

Xerri added that people equate ‘facilitating’ with being less stringent.

“That is not the case – safety of life at sea has to be paramount. Regulations must be adhered to, pollution prevention has to be paramount, but on the other hand we have to understand the requirements of the ship owner and facilitate it, be it through better banking services or less bureaucracy. We must find the right solution,” he said.

Malta sits at the executive committee of the International Maritime Organisation (IMO), which is an advantage, Xerri said. Having Malta retain its position on the whitelist for the last 15 years is a large credit, meaning that ship owners having registered under the Malta Flag stand to benefit, Xerri added.

He said that insurance wise, having a ship owner tick all the boxes, adhering to all the conventions and applying them, means diligence and efficiency, which poses a lesser risk.

The Malta Flag is the first flag of choice from among all other European countries who have within their maritime policy the possibility to register ships under their flag, being described as leaders.

Xerri said that there is a global responsibility to fight against unprofessional shipping, and because the Malta flag is at the forefront, there is the responsibility to ensure that shipping within the EU is not suffering through unfair competition.

“The EU guarantees quality and standard of ships, but this is not prevalent in all flags. We have to make sure that the levels we have attained help attract other flag states to raise their standards,” Xerri said.

Xerri said that despite having to do much more to address the realities of the maritime industry, the forum is there to make sure that policies to not come at a ‘one size fits all’ solution, and the “niche maritime organisation” will continue to be a viable source where people in the maritime sector can seek to get their voices heard.

The first part of this interview was carried in The Malta Independent on Sunday on 2 April

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