A risk appraisal system regarding the implementation of maritime regulations by a ship operator

The shipping industry operates in a regulatory framework, where the International Maritime Organization (IMO) is the leading regulatory body. The role of the IMO is to propose maritime regulations to its member states. The successful worldwide implementation of a maritime regulation depends on how many member states adopt it. However, many maritime regulations are not adequately implemented worldwide. As a result, ship operators have found themselves in an uncomfortable position in developing their business in an unstable regulatory regime. This paper proposes an extendable and applicable methodology involving a System of Hierarchical Scorecards (SHS) to measure the implementation costs and benefits of a newly introduced or existing maritime regulation by ship operators. The regulators may use the results in evaluating newly introduced and/or existing regulations through taking into account the economic burden that will be generated to ship operators. In this paper, SHS is extended to demonstrate its applicability on evaluating a ship operator’s organization with regard to his regulatory implementation performance by the means of a case study.