Ship Construction File CESA Seoul, 18-19 September 2009

Design Transparency v. Intellectual Property Protection IMO GBS requirements: All necessary structural safety information shall be made available throughout the lifetime of the ship. Consequently, the IMO initially considered the ship as only storage location to ensure this requirement. The shipbuilding industry supports improved transparency of ship design and construction for safety purposes but subject to intellectual property (IP) protection principles. Safety improvement / strengthened IP protection: no conflicts and only complimentary The current draft SCF requirements could be interpreted in a way that shipyards would have to provide very detailed, comprehensive and sensitive technical information. Moreover, such information would be required to be stored on board of the ship which is not a secure place to apply IP protection measures, despite the fact that substantial parts of that information provides no support of any kind to the operation of the vessel. Shipbuilders from all major shipbuilding countries and regions have raised concerns to the IMO that the SCF requirements as how they are drafted could endanger the property right of shipyards and subsequently encourage sub-quality products, slow down the innovation progress, jeopardize the maritime safety level and undermine the whole maritime community. MSC 85 has finally acknowledged the importance of achieving the right balance between design transparency and IP protection and instructed the GBS work group to take such concerns into consideration when finalizing the SCF guidelines. The Committee expects that the industry could propose detailed solutions and design practical, effective and well balanced guidelines implementing the SCF requirements.

Cross Industry Initiative Could become a “lighthouse project” for the Tripartite approach: all major shipbuilders, shipowners and classification societies around the globe are joining the forces. Developing an industry model to implement the ship construction file (SCF) requirements. Joint submission to IMO MSC 87 (by 9 February 2010): - SCF guidelines and information content - Related amendments to SOLAS and / or GBS verification guidelines Coordinated by CESA, representatives from CESS, BIMCO, INTERTANKO, INTERCARGO, ICS, OCIMF and IACS have agreed to work together to develop an industry model to implement the SCF requirements. An info paper from the cross industry partners has been submitted to IMO MSC 86 reporting the progress made and requesting the IMO to wait for the outcome of the industry initiative before deciding on the SCF Guidelines. The Committee expects that the industry proposal would be ready by MSC 87. The cross industry partners have agreed on a short and long term work plan during MSC 86. Reaching an agreement on the SCF guidelines and the information content would be the prior work items before the 2009 Tripartite meeting (September 18). The detailed discussions for an industry standard to implement the SCF requirements could be carried out after MSC 87.

Cross Industry Common Principles The SCF is a mandatory set of documents linked to the ship from delivery until the dismantling. Ship owners must have access to information for safe operation of the vessel, including maintenance, repair and for emergency situations. The concept of property (with regard to IP), its importance and impact shall be recognised. All necessary structural safety information shall be made available throughout the lifetime of the ship, along with the obligation of respecting the IP protection principles. Availability of additional structural information, not related to the safe operation, maintenance and repair of the ship may be subject to commercial agreements. The cross industry partners have agreed to join the forces based on the following principles.

SCF on Board – SCF Supplement Ashore (Promising Solution under Consideration) The mandatory SCF includes the SCF on board and a part of the SCF Supplement ashore that is related to safe operation. Highly IP sensitive information required by the mandatory SCF, if not absolutely necessary and relevant to be on board: - Its full content => “SCF Supplement ashore” - Its reference, summary and access procedures => “SCF on board” Storage: - SCF on board: Full or a part copy at the shipowner’s office and full copy at the same location as the SCF Supplement - SCF Supplement ashore: ideally a dedicated archive centre The cross industry partners have developed a possible “SCF on board – SCF Supplement ashore” solution to reach both safety and IP protection goals. Under this solution, there would be two sets of documents, i.e. the SCF on board and the SCF Supplement on shore. The SCF guidelines shall cover all structural information for safe operation, maintenance, repair and for emergency situations, which would include the SCF on board and a part of the SCF Supplement ashore that is related to safe operation. For the highly IP sensitive information which is covered by the SCF guidelines but not absolutely necessary and relevant to be on board, its full content shall be included in the SCF Supplement on shore while its reference and access procedure would be an integral part of the SCF on board. For the SCF on board, the owner may keep the full or a part of the copy at its office on shore. The SCF Supplement ashore and a full copy of the SCF on board should be at an ashore location, ideally stored by a dedicated archive service which is to be set up and operated by the industry. Such archive service should be “long life” and function according to international archiving standards.

+ + Yard Property Information IP Sensitive Information Highly IP All Subject to Appropriate IP Protection Highly IP Sensitive Information Safety Related Information No matter their IP sensitivity 1. Required by SCF Guidelines but NOT necessary on board; 2. NOT required by SCF Guidelines but kept ashore based on bi-lateral agreement; Not Necessary On Board + Necessary On Board The cross industry partners have developed a possible “SCF on board – SCF Supplement ashore” solution to reach both safety and IP protection goals. Under this solution, there would be two sets of documents, i.e. the SCF on board and the SCF Supplement on shore. The SCF guidelines shall cover all structural information for safe operation, maintenance, repair and for emergency situations, which would include the SCF on board and a part of the SCF Supplement ashore that is related to safe operation. For the highly IP sensitive information which is covered by the SCF guidelines but not absolutely necessary and relevant to be on board, its full content shall be included in the SCF Supplement on shore while its reference and access procedure would be an integral part of the SCF on board. For the SCF on board, the owner may keep the full or a part of the copy at its office on shore. The SCF Supplement ashore and a full copy of the SCF on board should be at an ashore location, ideally stored by a dedicated archive service which is to be set up and operated by the industry. Such archive service should be “long life” and function according to international archiving standards. + SCF Supplement On Shore Archive SCF On Board

Advantages of the Archive System Improved safety can be promoted. Long-term data storage can be guaranteed. In case the SCF onboard is damaged, destroyed or lost and no copy is kept ashore by the owner, the archive service can provide a replacement. For the highly IP sensitive information which is not absolutely necessary and relevant to be onboard, an ashore archive system can provide better IP protection than leaving it onboard. Serious IP infringement cases can be minimized for all parties concerned. Such an archive system presents advantages such as: The information can be preserved on a long term basis. It could safeguard against data loss due to corporate default (e.g. bankruptcy, loss of information). In case the SCF onboard is damaged, destroyed or lost and no copy is kept ashore by the owner, the archive service can provide a replacement. For the highly IP sensitive information which is not absolutely necessary and relevant to be onboard, an ashore archive system can provide better IP protection than leaving it onboard. Serious IP infringement cases can be minimized for all parties concerned. Therefore the industry approach has gone beyond the original purpose of the design transparency requirements. It ensures the availability and better management of the ship structural information to all maritime stake holders on a long term basis.

Features of the Archive System Location and access procedures: in the SCF on board and the shipowner’s office Quick delivery: deliver the information to authorised parties within a defined deadline Practical IP control procedures according to various IP sensitivities Unconditional access to ship owners, class and flag states if for safe operation purposes or pursuant to legal proceedings Owner(s) of the ship shall keep both the SCF on board and SCF Supplement on shore updated Important features related to the archive system are: Information regarding the location and access procedure to the system and the summary are provided in the SCF on board and the copy of such information is provided to the owner’s office on shore. Upon the first call of request, the system shall deliver the requested information to authorized parties within a defined deadline. Access procedures vary depending on the IP sensitivity of the requested information. But such procedures should be practical and shall not generate disproportionate burden. Ship owners, class and flag states should be provided with the right of unconditional access to the system if it is for safe operation purposes or pursuant to legal proceedings. Unconditional access means that property owners/holders of the information shall not withhold the information or charge fees based on IP rights. Such unconditional access shall follow the IP protection procedures provided by the industry standard. In line with the SCF requirements, owner(s) of the vessel shall keep both the SCF on board (and its copy in their office) and the SCF Supplement ashore updated. In case of changing ship owners, notification and verification procedures are needed for the new access.

The Industry Standard Issues to be discussed: - Definition of each SCF information item - IP sensitivity of each SCF information item - Practical security system for SCF (hardware and software methods of protection) - “Standard” procedures for access to SCF (on board and on shore) - Plan for dedicated archive centre(s) Timing: from MSC 87 to January 2015 As mentioned earlier, the priority for the cross industry partners now is to agree on the amended text of the SCF guidelines and the SCF information content so that we can prepare the joint submission to MSC 87. The work is progressing and is on the right track. We are confident that the cross industry partners would be able to reach the principle agreement in time. As for the detail implementations (our long term work plan), such as the ranking of IP sensitivity of each SCF information item which largely depends on the definition of each item and ship types, the access procedures, hardware and software for the security system, the establishment of dedicated archive centers (e.g. funding, operation questions), they should be discussed after MSC 87 if the cross industry submission is accepted by the IMO. We would have then enough time to develop the details until entry-into-force date of the GBS, which is January 2015 at the earliest.

From Now to MSC 87 Agree on the main principles and directions at Tripartite 2009 Fine-tune the joint industry submission to MSC 87 by December 2009 Promote the industry approach among the flag states and call for support from the IMO Members MSC 87: cross industry meeting to decide on targeted timelines for next steps Our tasks from now to MSC 87 are: Agree on the main principles and directions at Tripartite 2009 Fine-tune the joint industry submission to MSC 87 by December 2009 Promote the industry approach among the flag states and call for support from the IMO Members MSC 87: hopefully, if MSC 87 accepts our joint submission (fully or partially), we would take the chance to hold a cross industry meeting in London to decide on targeted timelines for next steps, namely designing the detailed industry standard to implement the SCF requirements.

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