Mutual risk: P&I insurance clubs and maritime safety and environmental performance

This paper examines the role of co-operative self-regulation, or co-management, in safety and environmental regulation in the shipping industry. The focus is on Protection and Indemnity (P&I) Clubs in which third-party liabilities of 90% of the worldʹs fleet (by tonnage) are insured. In theory, this creates a mutual interest amongst shipowners in minimising risk. The paper examines how this mutual interest is translated into individual behaviour, and the institutional challenges involved in maintaining mutuality within and between the Clubs. There follows an evaluation of the legitimacy of enrolling private interest groups in regulation in which a wide range of actors hold a stake. The paper concludes that P&I Clubs make a modest contribution to safety and environmental regulation, but also have some potentially unfavourable wider social implications.