The bigger picture

NORWAY’S shipping industry is in trouble. At least it could be. With names such as Bergesen being taken over by foreign interests, and other owners upping sticks to head abroad, the Norwegian government is under more pressure than ever to restore faith in what is still the country’s second largest industry.

One of the bugbears of the Norwegian shipping fraternity is the regulatory framework, which is much stricter than elsewhere. The Norwegian government has finally succumbed to pressure and issued a white paper proposing a move towards EU standards in a bid to improve the shipping industry’s competitive position.

According to Nils Thommessen, partner at law firm Wiersholm Mellbye & Bech, shipowners are fairly positive about the paper but would like to see more done, particularly when it comes to taxation. Norway’s tonnage tax is the highest in Europe, and the particular Norwegian net wealth tax also contributes to the competitive difficulties of Norway’s shipping industry. Shipowners, like the rest of the maritime community, must now adopt a wait-and-see approach on whether the paper can indeed deliver the level of competitiveness needed to help Norway maintain its place on the maritime map.

A more competitive regulatory environment should certainly mean more work for Norway’s maritime lawyers who, like most lawyers around the world, have been feeling the pinch as a result of the decline in volume of shipping work. The response by some Norwegian firms has been to scale down their maritime departments. Others, meanwhile, are doing just the opposite.

“Traditional wet work may be diminishing, but there is plenty of growth in other areas, particularly marine insurance,” says Thommessen. Earlier this year, Wiersholm Mellbye & Bech significantly expanded its maritime team with the arrival of Erik Blaker, one of the most prominent lawyers in the marine insurance field, and two of his colleagues from Lindh Stabell Horten.

“By broadening the department we can offer more and more services. It is all about meeting the needs of the owners, looking at where they need assistance and adapting the firm to meet them,” says Blaker.

“Expansion is a little against the tide at the moment but it’s the right way to do it,” adds Thommessen.

But it’s not only insurance expertise that owners need. As Thommessen points out, shipping has become more of a financial commodity than ever. “With the ability to hedge every contract, there is more asset play than before. To be a good lawyer, not only do you have to understand the traditions of the industry, you also need to understand the broader financial picture,” he says.

Shipping work may be on the decline, but one advantage Norwegian lawyers have is the size of the market. Norway may control the third largest fleet in the world, but the maritime community itself is relatively small and close-knit, making it easy to build up good, long-term working relationships. Although some owners may be contemplating setting up abroad, they are a loyal breed and like to maintain some links with their homeland, which can only be good news for lawyers. There is also talk of setting up a dedicated maritime arbitration institute in Oslo, which would certainly help keep legal business in the city.

Norway has the added bonus of plenty of high-calibre law students coming on stream every year. “Given the maritime traditions in Norway, it is relatively easy to attract young people to maritime law,” says Thommessen. But you have to put the work in. For example, Wiersholm holds a series of seminars for law students, invites them to visit its offices, takes on trainees and builds up relationships with students in the early stages of their study so they can follow and support them through university. “It’s all about having a presence,” says Thommessen.

“In 10-15 years there will be no shipping industry in Norway,” prophesised Hakon Petteren, managing director of Bergesen, earlier this year. “Shipowners are moving away from Oslo and the brains behind the industry here will inevitably die out in the long-term. As the pool of people diminishes dramatically, the question will be ‘Why Norway?’ ” Shipping in Norway may be facing one of its greatest challenges to date but, as Wiersholm has shown, by constantly adapting to the changing needs of the industry, continual growth is possible.