Reliability of International Safety Management (ISM) Code Implementation in Operational Risk Management of Shipping Industry

Abstract

In an industrial scope, the industry itself cannot be separated from a risk, and the shipping industry is no exception. The risk itself can possibly emerge from the company’s internal environment and there is a risk that emerge from company’s external environment. Therefore, companies are required to be able to manage the risks that may arise and give various impact. Basically, if the company can manage the risks, then the risks can potentially become opportunity, or it can also be said that it is a positive risk. On the other hand, if the risks lead to losses and the company cannot manage properly, this is a negative risk that needs to be managed by the company. In a shipping industry, there is an internationally recognized safety management system, namely the ISM Code, where the code regulates aspects of safety management in ships. With the implementation of an optimal safety management system, shipping company can basically apply the ISM Code instrument as a risk management effort, particularly in operational risk. Shipping company need to understand that they are obliged to create a safe work environment for their employees.

Keywords: Risk management, ISM Code, Integration