Risk Management

The introduction of ISM Code was the first step for the shipping industry to move from perspective regulatory approach to a Goal setting approach. A change from ‘Tell me what to do' to ‘Show me how to do it' and then to ‘Involve me in it' was taking place in the shipping industry. (Wang 2006)

On 1st July 2010 there were number of amendments introduced in the ism code, one of which was revision of clause 1.2.2.2.The existing subparagraph should be now read as follows

"Assess all identified risks to its ships, personnel and the environment and establish appropriate safeguards" (IMO 2010)

The ISM code before amendment had elements of risk based approach in managing safety, but it was never said so, now the new amendment makes it explicit that companies employ some form of risk Management methodology when making a SMS and have documentary evidence to it. (Anderson 2010)

This paper is going to analyze the practical issues in successful implementation of risk management strategies as a part of companies Safety management system by comparing and contrasting different risk management methodology and by analyzing good and poor examples.

2. Discussion

Due to the commercial nature of shipping, companies have choice of choosing the flag state which benefits the company. In this case some flags pay close attention to the safety and environmental aspects of its registered vessel, while the so called Flag of convenience (FOC) approach the issue in a more commercial business way. (Quirk 1999) The external ISM audits are conducted by some flag states, while some delegate this responsibility to the classification societies. But these external audits have a limited effect on a company's safety and pollution prevention aspect, as for some company it's complying with the minimum required to get