intertanko and council agenda overview members’ meeting singapore 2 november 2009 peter m. swift
DESCRIPTION
INTERTANKO Overview US Issues: Massachusetts Lawsuit EPA Vessel General Permit CARB Emission Standards Committee Reports IACS – EU Competition Law clearance Other BusinessTRANSCRIPT
INTERTANKO and
Council Agenda Overview
Members’ MeetingSingapore
2 November 2009
Peter M. Swift
INTERTANKO OverviewCouncil : 11 November 2009, London
Membership & FinancesExecutive Committee Elections Organisational Review
Greenhouse Gas Emissions (& Virtual Arrival)PiracyPilotageMarine Issues: STS; MSDS; Lifeboat SafetyEU Issues: “0.1% Sulphur at Berth”; “Mutual Recognition”
Criminalization / Fair Treatment Facilitation PaymentsFinancial Crisis / Markets
INTERTANKO OverviewUS Issues: • Massachusetts Lawsuit• EPA Vessel General Permit• CARB Emission Standards
Committee Reports
IACS – EU Competition Law clearance Other Business
PIRACY - Gulf of Aden/Somali CoastINTERTANKO Activities
Providing members with topical information on events and best practice guidance and as part of industry’s liaison with the naval authorities, administrations and other organisations.
Activities include:• Testimony to US Congress on International Piracy• Delegate with UN Contact Group and Working Groups on
Piracy• Industry spokesperson at Djibouti meeting finalising regional
code• Member IMO Correspondence Group revising MSC
Guidance Circulars• Providing MNLO Secondee to MSCHOA• Development of Industry Best Management Practices • Participation in Naval Shared Awareness and De-Confliction
(SHADE) Meetings
PIRACY - Gulf of Aden/Somali CoastINTERTANKO Activities
Activities include: (continued)
• Contributed to production of Anti--Piracy Charts• Developing Merchant Shipping Communication
Plan• Developed Piracy Model Clauses• Providing regular Security Bulletins to Members• Providing Routing Guidance• Developing Industry Positions on Arming of
Ships• Participating at Industry Seminars• Frequent contacts with national governments
Piracy - Somalia
• OCIMF/INTERTANKO/Industry Guide:
Piracy - The East Africa/Somalia Situation
Practical Measures to Avoid, Deter or Delay Piracy Attacks
Best Mangement Practices – Version 2
Best Management Practices to Deter Piracy in the Gulf of Aden
and off the Coast of Somalia
(Version 2 - August 2009)
I n an effort to counter piracy in the Gulf of Aden and off the Coast of Somalia, these best management practices are
supported by the following international industry representatives:-
1. I nternational Association of I ndependent Tanker Owners (I NTERTANKO)
2. I nternational Chamber of Shipping (ICS) 3. Oil Companies I nternational Marine Forum (OCIMF) 4. Baltic and International Maritime Council (BI MCO) 5. Society of I nternational Gas Tanker and Terminal Operators (SI GTTO) 6. I nternational Association of Dry Cargo Ship Owners (I NTERCARGO) 7. I nternational Group of Protection and Indemnity Clubs (I GP&I ) 8. Cruise Lines I nternational Association (CLI A) 9. I nternational Union of Marine I nsurers (I UMI ) 10. J oint War Committee (J WC) & J oint Hull Committee (J HC) 11. I nternational Maritime Bureau (IMB) 12 I nternational Transport Workers Federation (I TF) These best management practices are also supported by:- 1) Maritime Security Centre Horn of Africa (MSCHOA) 2) UK Maritime Trade Organisation (UKMTO Dubai) 3) Maritime Liaison Office (MARLO)
PIRACY – Gulf of Aden/Somali Basin
Guidance for Gulf of Aden / Somalia
• Pre-transit:Assess RiskPlan self-protection/defensive measuresRegister Company and Ship with MSCHOAIF appropriate, join Group Transit
• During transit: Stay alertReport regularly to UKMTO, Dubai (or to MARLO)Follow “best management practices”
Criminalisation – an update
• Captain Mangouras (“Prestige”- Spain) : European Court of Human Rights
• “Hebei Spirit” (South Korea)
• “Tosa” case (NYK VLCC – Taiwan)
• “Full City” (COSCO Bulk carrier – Southern Norway)
Industry-wide support for adherence to the IMO-ILO Guidelines on the Fair Treatment of
Seafarers in the event of a Maritime Accident; and growing support for strengthening of same.
Facilitation Payments
In order to trade efficiently (smoothly) Facilitation Payments are frequently made to Authorities, Pilots, Terminal Officials, Inspectors, and more
But
Owners are expected to warrant that no bribes (and in some cases also no facilitation payments) will be paid during the performance of the contract and that owners are obliged to indemnify charterers from all consequences if any such payments are made.
DocCom is developing model clauses, e.g. for Voyage Charters:….. any waiting time caused by the owners refusal to pay a facilitation payment or bribe shall count as laytime or if on demurrage time on demurrage, even if the vessel formally lacks any local certificates, clearances or there are any other … circumstances or formalities that ordinarily could prevent laytime from starting, if the reason the owners do not have such approval etc. is because owner has refused a facilitation payment or bribe.
EU Issues
EU Directive 2005/33/EC requiring use of 0.1% Sulphur Marine Fuel at Berth
1 January 2010 Deadline - (Not aligned to MARPOL Annex VI)
Issues arising:Safety & technical ; 3 grades of fuel ; Supply (logistics)
INTERTANKO-OCIMF Position:• Delay in implementation (6 or 12 months) but subject
to verifying that compliance measures have been initiated
• Port State Control officials to be properly primedPosition is supported by class societies and insurers
Global Financial Crisis
Markets
INTERTANKO’s Anti-Trust/Competition law Compliance Statement
INTERTANKO’s policy is to be firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKO’s and its members’ activities in these markets. These laws include the anti-trust/competition laws which the United States, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. INTERTANKO’s activities will be conducted in compliance with its Anti-trust/Competition Law Guidelines.
MarketsMarkets
Credit crunch – liquidity; financing; exposures; covenants & more….
• Oil prices ?• Steel prices ?• Newbuild / scrap prices ?• Economic slowdown (or meltdown !) ?• Green agenda slowdown ?• Markets ?• Other ?
Global Financial Crisis (end 2008)
Global Financial Crisis (end 2009)
• Demand : World trade & by sector
• Supply : Ships on Order & Fleet development
• Tanker market
• Shipbuilding capacity
World Trade & GDP
-16
-12
-8
-4
0
4
8
12
1619
7219
7419
7619
7819
8019
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
10
Wor
ld Im
port
s% y
-y
-1.5
-0.5
0.5
1.5
2.5
3.5
4.5
5.5
6.5
GD
P %
y-y
OECD WorldImports of Goods
IMF GDP
Source: Clarksons (September 2009)
World Oil Demand vs. GDP
-4
-3
-2
-1
0
1
2
3
4
5
619
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
10
% c
hang
e (y
ear o
n ye
ar)
IMF GDP
Oil Demand
Source: Clarksons (September 2009)
Seaborne Crude Imports
040,00080,000
120,000160,000200,000240,000280,000320,000360,000400,000440,000480,000
2003
-Q1
2003
-Q3
2004
-Q1
2004
-Q3
2005
-Q1
2005
-Q3
2006
-Q1
2006
-Q3
2007
-Q1
2007
-Q3
2008
-Q1
2008
-Q3
2009
-Q1
kmt
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
y-o-
y %
cha
nge
seaborneimports
growth
Source: Clarksons (September 2009)
Total Oil Products Imports
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,00020
03-Q
1
2003
-Q3
2004
-Q1
2004
-Q3
2005
-Q1
2005
-Q3
2006
-Q1
2006
-Q3
2007
-Q1
2007
-Q3
2008
-Q1
2008
-Q3
2009
-Q1
kmt
-3
0
3
6
9
12
15y-o-y %
change
productsimports
growth
Source: Clarksons (September 2009)
Green Shoots of Recovery ?
Demand increases ?More long-haul crude; more refinery imbalances (and emerging opportunities ?)
CRUDE Production (mbd) 2008 2009 2010OPEC 31.27 29.02 29.19
NON-OPEC (Selected)Brazil 2.40 2.60 2.83Canada 3.35 3.38 3.43The United States 8.51 8.92 9.00Azerbaijan 0.88 1.04 1.18Kazakhstan 1.43 1.51 1.66Russia 9.79 9.78 9.78Mexico 3.19 2.93 2.69North Sea 5.20 4.90 4.54
Orderbook Development
0
50
100
150
200
250
300
350
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 now
gros
s to
nnag
e (m
illio
ns)
othergascontainerbulkertanker
Source: Clarksons (September 2009)
Tanker Fleet Development
0
50
100
150
200
250
300
350
400
450
500
550
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
dead
wei
ght (
mill
ion) 10-24 tanker
handyMRPanamaxAframaxSuezmaxVLCC
Source: Clarksons (September 2009)
Orderbook by ship type(as % existing fleet)
Source: Clarksons (September 2009)
33
64
41
15
33
0
10
20
30
40
50
60
70
Tanker Chemical Bulk carrier Container ship LPG carrier
perc
enta
ge o
f cap
acity
Some are advocating
Some are advocating
Compulsory Scrapping Schemes
Compulsory Scrapping Schemes
Tanker sales for demolitionand VLCC freight rate
Source: INTERTANKO
m dwt USD / day
* Until week ending 4 September** Sales for demolition until 4 September*** Clarkson Freight rate AG-Japan week ending 4 September
0
6
12
18
24
30
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09*0
20,000
40,000
60,000
80,000
100,000VLCCs sales for demolition
<200,000 dwt sales for demolition**
VLCC freight rate***
Source: Baltic Exchange/INTERTANKO
USD/dayUSD/day
Average tanker freight rates (based on Baltic Exchange rates)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2001 2002 2003 2004 2005 2006 2007 2008 8m09
VLCC AG-Japan, 250,000 ts
Suezmax Wafr-US 130,000 ts
Aframax N Sea-UKCont, 80,000 ts
Product Caribs-US, 38,000 ts
Other market influences ?
• Strength and timing of the “financial recovery”
• Future energy prices
• The elasticity of demand to energy prices (and taxes)
• Reactions to “Global warming” / Outcomes from UNFCCC-COP15
• Government interventions
Lower Freight Rates & Fleet surpluses (in ALL sectors – not just tankers)
Implications ?
• Challenge to maintain quality and standards
• Challenge to meet the issues of the day
• and government interventions ?
Shipbuilding output and forecast
Source: Worldyards/INTERTANKO Aug 09
m cgtm cgt
2631 33
38
26
26
55
42
15
3 0
914% 26
38%
4876% 62
95%67
99%
0
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Available capacityOrderbookHistorical deliveries
Shipyard output potential - surplus
Implications ?
• Distressed sales / lower prices
• Quality and standards maintained or weakened
• Pressure on suppliers and sub-contractors
• Greater customer focus & customisation
• and government interventions ?
Thank you For more information, please visit:
www.intertanko.com www.poseidonchallenge.com
www.shippingfacts.comwww.maritimefoundation.com
London, Oslo. Washington, Singapore and Brussels
United Nations Contact Group (CGPCS)
• Contact Group steers the overall programme • WG 1 : measures to improve the coordination of, and information
sharing between, the various naval forces present in the region and their interfacing with civilian shipping
• WG 2 : programmes to facilitate the prosecution of those caught and suspected of piracy
• WG 3: facilitates development of industry “Best Management Practices” to counter piracy and their application within the international shipping community
• WG 4 : communications and outreach strategies for use within
Somalia and to the wider international community as part of capacity building programmes - this latter to be in conjunction with other UN programmes already on the ground within the region
Piracy – Industry positions
Eliminating piracy is a SHARED RESPONSIBILITY between the maritime industry and governments,
BUT
Establishment of LAW AND ORDER on the high seas is the responsibility of governments
Our first concern is for the safety and welfare of our seafarers, both at sea and in port,while also concerned for the security of our ships and their cargoes !
Role of Governments
• Provide and maintain sufficient assets in the region (EUNAVFOR, NATO, CTF, National Navies)
• Establish and ensure a coordinated approach (via SHaDE and Mercury)
• Establish and ensure a single, or at least compatible, rules of engagement (CGPCS)
• Develop necessary legal authorities to prosecute pirates (e.g. nationally or in third country such as Kenya)
• Develop a long term solution to the Somalia problem on land (CGPCS)
IMO Action
IMO Maritime Safety Committee (MSC) updated guidance to governments and industry
• MSC.1/Circ.1333 - PIRACY AND ARMED ROBBERY AGAINST SHIPS, “Recommendations to Governments for preventing and suppressing piracy and armed robbery against ships”
• MSC.1/Circ.1334 - PIRACY AND ARMED ROBBERY AGAINST SHIPS “Guidance to shipowners and ship operators, shipmasters and crews on preventing and suppressing acts of piracy and armed robbery against ships”
and issued• MSC Circulars endorsing the BMPs from the GCPCS
Arming Ships – Industry position
Armed guards or arming ships’ crews is NOT an INTERTANKO advocated approach
• Legal issues for flag states and port states• Serious potential safety concerns• Major liability and insurance issues in the event of
death or injury• Risk of collateral damage• Potential to provoke an escalation of fire power by
the pirates
Arming Ships
“ INTERTANKO believes that the use of armed guards, security forces or mercenaries onboard merchant ships has to be a matter for each individual owner or manager to assess as part of their own risk assessment, and as a consequence is unable to endorse any of those companies or individuals offering such services. “
Summary and Challenges
• Both industry and governments recognize that eliminating piracy is a shared responsibility and each is doing their part
• Significant progress has been made by both
• BUT, more must be done to eradicate piracy and we must work together to do it
• Maintaining assets and resources will be a challenge for both governments and industry associations over the medium/longer term
• Adherence to Best Management Practices is still incomplete
• Any escalation of activity/levels of violence will create new challenges
• The “solution” to the Somali problem stills seems very distant
• There is a risk that the “Somali” model is copied elsewhere