Artificial Intelligence (AI) provides the shipping industry with an opportunity to improve decision-making capabilities. For example, data taken from ships may be converted into vessel performance monitoring and predictive guidance, to predict vessels’ carbon emissions. This has been seen recently with Wallenius Wilhelmsen and can in turn play an important part in the drive to reduce carbon emissions / improve carbon transparency. To take advantage of AI, shipping companies will need to be mindful of the developing legal framework governing the use of AI when negotiating contracts with AI providers.
For a company with operations in both the UK and EU this is likely to be challenging due to the divergence between the proposed UK and EU regulations:
- The UK government has published proposals for regulating the use of AI technologies, with a focus on encouraging innovation. The proposals set out six cross-sectoral principles, including ensuring that AI is appropriately transparent and explainable. Regulators in different sectors will then be given the ability to set out more detailed interpretations of the principles according to their specific sectors.
- In contrast with the UK’s proposed “light touch” regulation, the draft EU AI Act provides AI developers and users with more prescribed requirements and obligations regarding specific uses of AI. The newly published EU AI Liability Directive further sets out a framework for the provision of compensation to individuals in the event AI systems cause damage. Examples of high-risk AI systems identified in the draft AI Act include the management and operation of critical infrastructure which has the potential to impact the shipping industry. High-risk AI systems will be subject to specific obligations and requirements, including implementing a risk management system.
Suppliers of AI will need to ensure that they have the necessary technical documentation to provide users with clear instructions on the use of the AI systems. The contracts negotiated, whether they be for the procurement of AI or collaboration on an AI system, will need to address the specific risks generated by the use of AI, for example what happens when a fault in the AI occurs, especially where more autonomous systems are used. Contractual protection may be provided in the shape of specific warranties or a governance process, which address the transparency of the AI system. Although the emergence of a legal framework may provide greater clarity and transparency in this fast growing area, the divergence between regulations across jurisdictions is likely to further complicate the development and adoption of AI for shipping companies operating globally.