The impact of the EU on Japanese shipping Presentation to INTERTANKO’s members in Japan By Ketil Djonne, advisor to INTERTANKO in Brussels

How does Brussels have an impact on Japanese interests? Firstly, there is a direct effect on Japanese vessels when calling at European ports since there is a growing tendency in Europe to make European rules applicable to all flags through Port State Control Secondly, the EU has an indirect impact on Japanese shipping through its increasing influence on international rulemaking particularly in the IMO Thirdly, the EU has an influence on the competitivness of Japan’s European based competitors through it control of tonnage tax schemes etc. 18/09/2018 INTERTANKO in Tokyo

The “Erika” accident increased Brussels presence in shipping. Focus on: Year 2000 Lack of flag state implementation Inadequate class response and control Lack of transparency Double standards with charterers An international system with agreed rules but serious lack of implementation and control 18/09/2018 INTERTANKO in Tokyo

is a place for INTERTANKO to be.. I can see a growing importance for the EU! No doubt - Brussels is a place for INTERTANKO to be..

In the wake of the Erika (early 2000), INTERTANKO’s mission was: Avoid a European repetition of post-Exxon Valdez! Secure support for international rules! Good INTERTANKO network in Brussels already before the accident happened (first chairman visit in 1993, Brussels tanker event in 1998) Chairman W.Hoegh immediately met Commission Vice President de Palacio (Jan. 2000) Close co-operation with Commission in initial phase in order to have a dialogue on the input behind the proposals to come 18/09/2018 INTERTANKO in Tokyo

Brussels politics: The three main decisionmakers Commission (Propose and monitor implementation) ECJ Commission Court European Parliament (Opinion & Veto) Council (Decides and implements) 18/09/2018 INTERTANKO in Tokyo

Interacting with the Commission Loyola de Palacio (Margaritis Schinas) Commissioner for Transport and Energy Policy Francois Lamoureux Director General Fotis Karamitsos Director for maritime policy Willem de Ruiter Jean. Trestour Wolfgang Elsner Unit staff members 18/09/2018 INTERTANKO in Tokyo

Erika I Proposal for an EU Regulation on (regional) phasing out of single hull tankers Proposal for radical amendments in the EU directive on Port State Control Proposal for radical amendments to the EU directive on Licensing of Class 18/09/2018 INTERTANKO in Tokyo

Erika II Proposal for a new EU Directive on Monitoring & Reporting of maritime traffic Proposal for EU Regulation establishing a European Maritime Safety Agency Proposal for a European third layer of oil pollution compensation (“COPE”) and a “wish-list” for future changes to the IOPC/CLC system 18/09/2018 INTERTANKO in Tokyo

INTERTANKO’s priorities Encourage international rules (phase-out, COPE, VDR) Ensure long-term EU support for the IMO Oppose any erosion of the power of the ship master Promote transparency on charterer in PSC-data Promote places of refuge Avoid inclusion of shipping in the directive on liability for restoration of environmental damage Generally improve the standing of the tanker industry in Brussels 18/09/2018 INTERTANKO in Tokyo

“Political Agreement” EU “Co-decision” Com Com EP Council Preparation Initiative EP “Pre Decision” Formal Proposal “Political Agreement” & “Common Position” EP opinion “First Reading” EP approves or rejects “Second Reading” Commission withdraws Council adopts “Conciliation” 18/09/2018 INTERTANKO in Tokyo

The keys for INTERTANKO influence Brussels A good understanding of the system Recognised as a credible partner Can provide valuable input from industry also in Asia The ability to get in early The ability to be reliable and long term The ability to prioritise and to “steer rather than obstruct” 18/09/2018 INTERTANKO in Tokyo

Numerous discussions and position papers... Chairman Lars Carlsson meets De Palacio again in June 2001 Position papers and numerous written input Co-operation with ECSA, ICS and others Chairman, other INTERTANKO members and staff meet all EP spokesmen + other MEPs, Commission officials and not the least Member State’s officials frequently and regularly in order to put across the views of the international tanker industry 18/09/2018 INTERTANKO in Tokyo

In dialogue... MEP Theo Bouwman EP Green coordinator MEP Dirk Sterckx, ”Monitoring & Reporting EP Committee. Chairman Konstantinos Hatzidakis MEP Mark Watts ”Port state control, VDR” INTERTANKO Chairman & staff 18/09/2018 INTERTANKO in Tokyo

Erika I package adopted December 2001 Regulation No 417/2002 on the phasing out of single hull tankers. Implementation in conformity with MARPOL 13G Directive 106/2001 on Port State Control. Implementation in Member States by 22 July 2003 Directive 2001/105 on licensing of “recognised organisations”. (Class Directive) Implementation in Member States by 22 July 2003. 18/09/2018 INTERTANKO in Tokyo

2/3 of Erika II package adopted in June 2002 Directive 2002/59 on Monitoring & Reporting of maritime traffic Compulsory VDR by 2007/2008 at the latest Compulsory AIS for tankers at first survey after 1.1.2003 Coordinated, and adequately equipped, system of places of refuge in Europe by Feb. 2004 A electronically based reporting, monitoring and data surveillance system for ships entering or passing EU waters by end of 2008 18/09/2018 INTERTANKO in Tokyo

Erika II package adopted in June 2002 Establishment of EMSA with a “mandate” to assist Member States and Commission in Updating EU legislation on maritime safety and pollution Implementing maritime safety and pollution legislation Training of port state and flag state officials Facilitating EU-wide co-operation in maritime accident investigation Provision of objective, reliable and comparable information on maritime safety Providing technical assistance to new Member States 18/09/2018 INTERTANKO in Tokyo

So, what has been achieved? “Phase-out” moved from EU to IMO Retrofitting of VDR partly moved from EU to IMO Third layer “COPE” moved from EU to IOPC “Weather ban” from bad to acceptable “Port of refuge” obligation imposed on governments Naming of charterer in PSC detention data Shipping exempted from environmental damage directive The need to take a global approach to air pollution broadly accepted 18/09/2018 INTERTANKO in Tokyo

What’s next? Implementation of Erika regulations PSC, Licensing of class, phase-out, monitoring, PRF A shift from maritime safety to (horizontal) environmental issues Environmental liability issues Air pollution from sea going vessels Consolidation of EU role in global maritime politics EU membership of the IMO and the establishment of the European Maritime safety Agency (EMSA) Co-ordination of EU reactions to US security initiatives 18/09/2018 INTERTANKO in Tokyo

Brussels The main ”players” Commission (The executive) ECJ Commission Court European Parliament (Direct election) Council (Member States) 18/09/2018 INTERTANKO in Tokyo

Erika I: The remaining issue of liability Proposal for a European third layer of oil pollution compensation (COPE) and a “wish-list” for future changes to IOPC/CLC system Annex to IOPC close to adoption Amended Commission proposal from June 2002 The other issues (distribution of financial contributions, the limitation rights, criminal fines) Liability for restoration of environmental liability (relationship with IOPC, HNS, Bunkers) 18/09/2018 INTERTANKO in Tokyo

INTERTANKO: Goal & Strategy Safeguard the international system of IOPC and CLC Retain current sharing of financial responsibility Avoid introduction of liability for restauration of environmental damage in Europe Work closely with P&I, ITOPF, ICS and others to demonstrate for European decision makers that the current international system should be preserved 18/09/2018 INTERTANKO in Tokyo

Air pollution Under the EU’s air emissions policy, land-based sources have substantially reduced their air emissions. Now the focus turns to shipping. 18/09/2018 INTERTANKO in Tokyo

EU Commission on air pollution Communication on air pollution strategy to be presented end of 2002: 1.5% sulphur cap on fuel in EU territorial waters by 1.1.2005 Amendment of EU directive 99/32 on sulphur in heavy fuel. Focus on use of 0.2% in ports Special regime for ferries EU Member States ratification of MARPOL Annex VI The future: NOx, VOC, climat gases? 18/09/2018 INTERTANKO in Tokyo

INTERTANKO: Goal & Strategy To encourage ratification/implementation of Annex VI To limit European rules on 1.5% in HFO to IMO SECA areas To encourage abolition of 0.2% cap on MDO under Directive 99/32 – or to limit 0.2% to use in ports To seek exemptions for fuel utilised for tankers’ main engines whilst in ports To inform decision-makers on practical realities and to build alliances 18/09/2018 INTERTANKO in Tokyo

EU membership of the IMO? • Commission Recommendation to the Council 9.4.2002 • Currently the Commission has observer status but can not speak or vote • Strong legal arguments in favour but resistance amongst EU Member States • Better coordination NOW is the key objective, especially on security issues 18/09/2018 INTERTANKO in Tokyo

INTERTANKO: Goal & Strategy Encourage active EU support for the IMO Avoid a “regionalisation” of IMO Work closely with EMSA in order to ensure continued support for a European global approach to regulatory affairs Work closely with EMSA on implementation of the Erika-decisions in order to secure efficient, smooth and fair implementation for international tanker operators 18/09/2018 INTERTANKO in Tokyo

Maritime security The US is acting on many levels: ILO • IMO OECD Multilateral CSI C-TPAT Bilateral ADVANCE NOTICE 24 H. RULE SHORE LEAVE Unilateral 18/09/2018 INTERTANKO in Tokyo

EU Maritime Security Policy: From Reaction to Action In December 2002 the Commission will present two Communications. A Communication on maritime security which will include: An EU regulation making the IMO agreement mandatory under EU legislation. An EU Directive on Seafarers ID. • The Communication will also address the issues of: Possible government guarantees for terrorist insurance. An EU programme for port & terminal security A possible coordinating role for EMSA in the field of maritime security 18/09/2018 INTERTANKO in Tokyo

EU Maritime Security Policy (Cont.) A second Communication on EU external border control. This will examine the following issues: Possible EU routines for controlling people and cargoes in ports. The results of the EU-US customs negotiations on CSI and cargo-manifest rules as well as other transparency and information exchange rules. A joint EU police commando, trained and ready to intervene on-board vessels and also in international waters. 18/09/2018 INTERTANKO in Tokyo

Conclusions (I) Throughout the Erika debate INTERTANKO has fought regional initiatives and turned most of these into sensible solutions to the benefit of the Japanese tanker industry Europe, not the least the Commission and the Parliament, have come a long way in accepting the role of the IMO The EU has gained “self-confidence”, however, and EMSA will develop this further. EMSA will therefore become a key partner for INTERTANKO The shift of focus to broader environmental issues creates new challenges for the tanker industry. 18/09/2018 INTERTANKO in Tokyo

Conclusion (2) • The EU will continue to exert its influence on the world stage by increasing its activity in the IMO. This development should not be seen as a threat only, INTERTANKO can also make use of the EU’s bargaining power. • The EU will also increase its contribution to global maritime regulations by making IMO maritime security rules mandatory EU legislation. • With the advent of EMSA, and of better coordination within the IMO, the EU’s importance for Japanese shipping will increase. Japan and INTERTANKO need to be active in EU 18/09/2018 INTERTANKO in Tokyo

The future ”Triangle of power” in shipping politics? Japan USA EU 18/09/2018 INTERTANKO in Tokyo