Cover Story: Isle of Man Round Table Debate

In the latest in our series of round table debates, SMI drew together leaders of the Isle of Man shipping cluster to discuss key issues facing shipping. Chaired by SMI Editorial Director Sean Moloney, panellists included Dan Jespersen, Managing Director, 7C Shipping;
Bruce McGregor, Director, PDMS Registry & Regulatory; Harry Robertson, General Manager, MIDOCEAN (IOM); Sven Fromm, Managing Director, Clever Marine Services; Russell Kent, Managing Director, Manx Ocean Crewing; Mark Robertshaw, Senior VP Commercial & Sales, Brightwell Payments; Richard Turner, Managing Director Shell Ship Management; David Morter, Deputy Director, Isle of Man Ship Registry.

Sean Moloney
Every time I come here I think it’s an amazing place to be. You’ve got a great shipping cluster – it’s vibrant. Why is it a great place to do business?

Dan Jespersen
From our point of view it is due to the tax-neutral position. We can have investors coming in from all jurisdictions to pay the tax where our investors are, rather than go into elaborate tax solutions and schemes. It takes a difficult aspect out of the whole equation and simplifies our structures tremendously.

Sean Moloney
What is the strength of the cluster?

Dan Jespersen
The Isle of Man  has a huge history and the Ship Registry has a very good name. We benefit from that recognition. We all know each other as well, which is a real draw.

Russell Kent
I’d agree. There is a good collaboration between a lot of the companies here. From the crew management side there are a lot of crew managers on the island, but the nature of our business means we are not all in direct competition.
So, that encourages cooperation.
The Isle of Man Shipping Association has made a big impact as well. It encourages cooperation.

Sean Moloney
Who are the members of the Shipping Association?

Russ Kent
Everyone around the table here is a member, except for the Ship Registry. But we work very closely with them. We cannot sing the praises of the Ship Registry enough and it is borne out by the Registry themselves. One of their key strengths is that they are approachable.

Bruce McGregor
There is a real international reputational aspect to that, which is what we are all selling globally. If no one had ever heard of the IoM or our registry that would be difficult and we wouldn’t be in the position we are now. The reputation of the Registry and the island plays a vital part in the growth of our business.

Sven Fromm
There are short ways to achieve this, not only geographically but bureaucratically. You can pick up the phone and talk to Dick Welsh and you are talking to the boss of the Ship Registry and you get an educated decision within five minutes. Something that in Germany would take you at least two weeks. It is a good thing we are so close together. The non-existing bureaucracy is a big advantage here.

Sean Moloney
Do you look to the Isle of Man Registry as the organisation setting the global reputation of the Isle of Island?

Sven Fromm
In shipping, yes.

Harry Robertson
The flag is a big draw, that is for sure.

David Morter
I think the Isle of Man sells itself anyway. You guys shouldn’t sell yourself short as ship managers on the Island. That’s where I started off, in this building. There is a reputation out there that the work done by all the guys around this table is up there with the best in the world. I think all the organisations are part of the greater reputation of this Island. It is a very small Island and you have to get it right. If you don’t get it right, then you don’t exist in business very long.

Dan Jespersen
I liked the Isle of Man for the same reason that was behind us coming here in the first place and that is because you have a vision. You have something you want to achieve. People who come here come here for the vision, a professional mentality. You have a very vibrant community within shipping here, with people who have an opinion.

Richard Turner
The important thing is the opinions you have and you have direct channels to the decision makers. You are in a strong position where you can be listened to – whether they pay any attention to you is another thing!

Mark Robertshaw
I think the island brings traditional values. It is like stepping back in time – in terms of the safety, security and lifestyle. This is a pull factor for attracting the right talent. The island is a safe haven but it is also forward thinking. The Government here is investing in broadband and IT, and payroll capability over here, so the Isle of Man has the best of both worlds.

Richard Turner
That is the attraction because we came here 35 years ago and we are still looking to be here in 30 years’ time. If you look at other jurisdictions like Cyprus and Singapore, they are always up and down. Values have always stayed the same here. That takes away the risk factor.

Sean Moloney
What is causing that? We see markets changing, but what makes the Isle of Man a success?

Richard Turner
You’ve got the closeness. We all talk and we have the resources around us to make it work.

Bruce McGregor
That is important. The nature of an island itself is that you stand out. Here, if you want to make something of it, yes you have the access but you have to make something of it.

Sean Moloney
Is it a danger Bruce when you’re in an environment in the IoM and feeding off each other you become a little bit cut off from what else is happening around the world?

Bruce McGregor
Again, I think the island factor works in our favour. Because we know from experience that you can’t stay here and expect it to come to you. As an island you’ve got to go out there and get it. We would be a lot smaller than we are if we didn’t go further afield.

Russell Kent
That’s the nature of the shipping business – we are dealing with international clients on a daily basis so that experience in dealing with the different regimes is discussed within our community. So, I wouldn’t say we are insular; we have to look externally to continue our business.

Sean Moloney
What are the challenges you face here on the island?

Dan Jespersen
One is that obviously we are an island, and we have an international business. We need to move out of the island to align ourselves with customers. And transportation on and off the island is difficult.
As a shipping industry we are very outward looking. Even though we have great support, we feel we hit a wall with people on the island with people not being as outward looking as we are. Perhaps that would be a luxury and maybe other jurisdictions have it even more difficult.

Russell Kent
There are some external threats to the island as well. Looking at the finance sector, the island is in a constant state of battle trying to meet the appropriate international regulations that various institutions are forcing the Isle of Man to comply with. But members of these institutions are not necessarily looking at their own jurisdictions. You have other jurisdictions where there is non-disclosure of structures. So on one hand you have entities like the US telling us we have to get our house in order but actually, in terms of KYC, and knowing the beneficial owners and the structures, we are whiter than white. But the perception from 30 or 40 years ago is that the Isle of Man is still a dirty tax haven. It is not. Rather, the Isle of Man is an international finance centre that is white-listed by the OECD and complies with all relevant international obligations. We do feel sometimes as a small jurisdiction we get picked on.

Sean Moloney
Is that down to organisations like the Shipping Association needing to better market the island?

Russell Kent
There is an element of that. It does have a knock-on effect for shipping. Shipping as a business area is classified as high-risk for the bank, so they are hot on due diligence. Because of the nature of our business, we are trading internationally and it is a challenging environment.

Sven Fromm
I agree with Russell there. There is a much clearer company structure here than in certain jurisdictions in the EU. Since the economic crisis you have seen lots of companies head over to Ireland where it was very easy to set up a company. So it is quite unfair for the IoM to be pointed as an offshore tax haven.

Richard Turner
You’re right. It is a case of getting out there and marketing the IoM and address these misconceptions that are 30 or 40 years out of date.

Sean Moloney
Every time you come to the Isle of Man, people talk to you and say ‘do you realise we do this, or do you realise we do that?’ When you look internationally, the Registry does a great job is being visible around the world. Some people who don’t come here may see the Isle of Man as just the registry. Is there a lot more you could be doing to push yourselves up?

Richard Turner
This is why we try to define our direction; working with the government especially. Being able to market ourselves and the island. People who come over here get passionate about the island very quickly. And the passion drives us to want to do things with the Shipping Association and with the right input pushing us forward.

Mark Robertshaw
There is a new system where we are creating that maritime cluster going forward. The association has grown so much recently.

Russell Kent
We have around 70 members of the Isle of Man Shipping Association. And as Mark has alluded to, we are looking at restructuring to make it into a more relevant entity for the overall maritime cluster on the island. We are looking at rebranding it from the Isle of Man Shipping Association, traditionally drawn from the technical managers and a few crewing managers here on the island, to IoM Maritime, which we are proposing will be a public-private partnership. We will have all interested stakeholders sitting around the table, as well as the Government. One issue the Ship Registry has at the moment, it that on one hand it is a regulator and has to fulfil its requirements as a flag state administration, while on the other hand it wants to go out and push and promote business. At the moment there is an internal conflict – how can they do out and sell their flag whilst being the regulator? Within this proposal, if this public-private partnership takes over the marketing aspect of the Isle of Man Ship Registry, then it can leave the Ship Registry to deal with the regulatory side.

Sean Moloney
How far down the line are you with this?

Russell Kent
We’ve been discussing with the Ship Registry and we have a framework proposal for it. We have a few more meetings with Ministers to finalise things. It is possible we will have something in place by the end of the year.

Bruce McGregor
The thing is, we started the process with the involvement of international events such as London International Shipping Week. We want to make sure the IoM is getting itself a reputation for being seen and available.

Harry Robertson
I think it’s safe to say everyone around this table when they go off they are singing the praises of the Isle of Man.

Sean Moloney
But there could be benefits of having a collective focus internationally.

Dan Jespersen
Coming back to what Ross said earlier, I think we need to address some of the misconceptions about the Isle of Man. Perhaps we should go and be more focused and inform rather than just praise.

David Morter
I would echo that. The Government is going out and talking to people, but no one believes a government. We took a decision eight years ago to take away the government branding from majority of things the flag does.

Russell Kent
They changed their name to the IoM Ship Registry and formally it was the Isle of Man Marine Administration. This is what we are trying to achieve with the Isle of Man Maritime.

David Morter
It takes away that government veneer.

Sean Moloney
You mention Mersey Maritime. I’ve heard there may be a coming together of Mersey Maritime and the Isle of Man

Mark Robertshaw
We have a working partnership with them. We are members of Mersey Maritime and they are members of our association. We work in collaboration with them and there are a lot of synergies in place. For instance, we have a strong engineering base here, and they have ship yards there. We have corporate structures and different assets so there is a symbiotic relationship.

David Morter
That is also one of the changes that has happened over the past four to five years, particularly the changes within the Shipping Association. The realisation that the Isle of Man is part of the North West of England. Anything that happens 60 miles to the East will sooner or later happen here, so we might as well join in.

Russell Kent
The CEO of Mersey Maritime did come over last year and gave a presentation about their ideas and those of the government on the Northern Powerhouse. And the Isle of Man should be considered within that as well.

Sean Moloney
Maritime UK looks towards Mersey Maritime at being a torch-barer for what clusters are doing well. What the Isle of Man is doing well is being appreciated internationally through the flag. Some sort of working together would be amazing.

Russell Kent
Collaboration is the word. The Isle of Man and Mersey Maritime is seen as an international jurisdiction. And certain business may look to relocate to the Isle of Man but may not look to the UK.

Bruce McGregor
Relationships come from people and a lot of people around this table have a great relationship with Chris Shirling-Rook and the other guys at Mersey Maritime so it is there already and we can engage with them very easily.

Sean Moloney
Looking at the growth of the cluster, how do you fit in to other international clusters? How do you see the cluster growing?

Richard Turner
I think that is easy. We have changed drastically from what we were to where we are now and that goes with the members we are getting: before they were very ship-centric so looking inwards. As has been said, we all talk about the benefits of the island, but as a group we are much stronger. We have the right direction and we all believe in the same thing and are following a definitive strategy within the cluster now. We are seeing more and more people who aren’t involved in shipping coming into the Isle of Man and that is having a big influence. For me it is about growing that influence.

Bruce McGregor
Collectively as a group you have more clout and capability. We can approach things, which perhaps, as an individual organisation, would be challenging, but as a group we can achieve great things. For example, if we wanted to go to the Far East with a particular message, we could do that.

Sean Moloney
To be honest with you, the international community would welcome that. They like to look at best practice and look at what other clusters are doing; and shipping is really cluster-orientated at the moment.

David Morter
Where we need to be careful here is, the Isle of Man is not just a shipping cluster any more it is a maritime cluster, it’s different. I’ve been in the industry on the Island for a while, historically the Ship Register would go out and sell both itself and the sector, but getting industry to come with us was difficult.

Sean Moloney
Is it reliant on this new look, this new branding of the maritime cluster – Isle of Man Maritime?

Mark Robertshaw
I think the island’s overall strategy is to encourage start-ups over here, and given the IT capabilities, better broadband and protection of data, this is making a difference. That on top of the government’s commitment, offering £50m investment fund for start-ups. I think that will be the new wave of businesses coming to the Isle of Man. A strong traditional maritime sector combined with the forward-thinking capabilities and I think you will see more start-ups.

Russell Kent
I do think IoM Maritime is one of the objectives of the new set up. The new proposal is to set up Isle of Man Maritime which would absorb the Isle of Man Shipping Association as well as the separate Isle of Man Maritime Group. All three entities would as such be known as Isle of Man Maritime. And the plan is for this to happen by the end of the year.

Richard Turner
This needs to happen because the types of new members we are getting are right across the board.

Sven Fromm
There are also other opportunities to grow. For example, there is a wind park being built at the north of the island in 2020, where we have the chance to handle the maintenance and logistical demands of this wind park. Also development of a gas field in Manx territorial waters is another opportunity. If that ends up having a licence holder from the Isle of Man then that has the potential of further boosting the cluster size.

Sean Moloney
As you grow the cluster, you’ve got to attract the right people in. How are you doing that?

Dan Jespersen
I think that is the key of the Mersey Maritime cluster – getting our name out there. Getting more people understanding what the Isle of Man offers through those different collaborations.

Mark Robertshaw
Nothing has been finalised yet, but we are looking at collaborating with John Moores University, and whether we can do something here. We are looking for ideas where we can grow our talent locally. We are also the collaborative association for the Mersey-Manx Cadets. We are growing our Manx cadets. The idea is that at a future date these cadets will come back to the island and strengthen the maritime community here.

Dan Jespersen
This is exactly the point. The next step is to attract the talent from the schools on the island to join the maritime industry rather than maybe financing. Getting across the point that the maritime sector can be an exciting career on the island as well as internationally.

Richard Turner
That is a really important message actually. I’ve got children that age and if I said to him ‘would you want to work on a ship?’ he would probably say ‘no I don’t want to do that’ – but then if you say that the maritime clusters offers more than just working at sea that would help promote all our maritime activities here on the Isle of Man. A lot of people, who do come here, never end up leaving!

Mark Robertshaw
Attracting the talent, the Isle of Man probably has done a good a job as it has educated young people. Compare the Isle of Man to Singapore or London and the cost of living is so high.

Richard Turner
There are no residency restrictions here either. Our immigration is still controlled by the UK Border Force.

David Morter
I would counter that slightly. We do have our own immigration officers, and it is a lot easier to speak to them than it would be in the UK. Again, it is all about being a small jurisdiction with lower levels of bureaucracy.

Sean Moloney
Looking at the growth potential, you’ve been alluding to, it’s about attracting new businesses in. You’ve got a lot of advantages here. If you go back to what Singapore was like 35 years ago,  you’d have a tanker centre and some managers would have branch offices. Now look at it, the way the Government had supported it and it has attracted new business. Is that feasible in the Isle of Man?

Richard Turner
I think it is. If we, as a group, give the right message. If we are saying the right message we can attract big business. Shipping is going to be the new e-game, because it has to be IT centric and it has to be efficient. What can IT do for us?

David Morter
And the infrastructure. It is not just maritime business, but all the industries on the island are driving this move forward, at a pace, for example, the latest satellite and communications technology is being developed right here on the island, now.

Sean Moloney
Gentleman, thank you very much for your time.


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