international shipping associations The ROUND TABLE of international shipping associations

International Chamber of Shipping (International Shipping Federation) BIMCO International Chamber of Shipping (International Shipping Federation) INTERCARGO INTERTANKO

Vision for the shipping industry: “ A responsible, sustainable and respected industry able to influence its own destiny ”

The ROUND TABLE of international shipping associations – voluntary cooperation to: Promote common policy positions – representative of wide common membership Provide strong and united shipowner “voice” in International Forums Ensure more effective use of limited resources Avoid surprises / resolve potential conflicts in policies

Examples of Round Table cooperation Joint submissions to IMO Common positions with respect to EU issues Establishment of INTERGROUP as formal stakeholder interface with EU Parliament, Commission, Council and EMSA Tripartite meetings of owners, builders and class Flag State guidelines (updated) The “image” of shipping – working with IMO et al

AGENDA Maintaining Supremacy of IMO & International Maritime Law Common Structural Rules & Goal Based Standards Criminalisation of Seafarers Challenges to Industry Governance Structures Other: People issues Piracy Ship Recycling Environmental Challenges Competition Rules Security Oil Pollution Liability (& Compensation)

Maintaining Supremacy of IMO & International Maritime Law Against the challenges of Local and Regional Legislation

15 years ago the US Today Europe !!

Increasing politicization of regulation Examples: Phase out of single hull tankers West European Particularly Sensitive Sea Area Moves to open up CLC/Fund Convention and link with substandard shipping Penal sanctions adopted by EU, criminalising accidental pollution Why? Coastal state interests versus flag states, and reduced influence of maritime constituency Power of EU Commission

THE EUROPEAN INSTITUTIONS & the power plays Commission (The executive) EMSA European Parliament (Direct election) Council (Member States)

HOW IT WAS: Examples of positive regulatory developments (the “IMO spirit”) ISM Code and STCW (training) post ‘Estonia’ passenger ferry measures IMO bulk carrier safety package Development of ILO ‘Super Convention’ Outcomes broadly based on technical merits of arguments put forward. Industry viewpoint understood, if not always accepted.

HOW IT IS: The Challenges Today More political drivers and less consideration of the technical, operational, and commercial interests More unworkable, inconsistent and illogical regulation and less consideration of the practical aspects More pressure for local / regional regulation and less willingness to adopt and apply international regulation

Maintaining Supremacy of IMO & International Maritime Law What are the threats? 15 Years Ago the United States (OPA90) Today the European Union Politics post Erika and Prestige Conflict with International legislation (UNCLOS, MARPOL) Criminalisation EU Commission proposals for EU Common Position at IMO

Maintaining Supremacy of IMO & International Maritime Law International Regulation for an International Industry What the industry seeks from the Asian region: Consistent support for IMO and the international approach Rejection of regional initiatives If possible, avoidance of “block” voting to combat EU moves in this direction

Maintaining Supremacy of IMO & International Maritime Law International Regulation for an International Industry Questions: How can we involve Asian industry more effectively? What are the principal concerns seen through Asian eyes? Can the RT interact better with Asian shipping community on these matters?

Common Structural Rules & Goal Based Standards

Common Structural Rules Background Concerns over erosion of design margins and construction tolerances due to: Competition for Market Share by Classification Societies More refined design capabilities Pressure from shipyards to minimise steel weights Pressure from owners for lower costs of newbuildings

Common Structural Rules Consequences of reduced design margins Greater focus is placed on ship maintenance procedures Increasing concerns expressed by regulators on structural integrity of existing ships Challenges to function of classification societies Introduction of Goal Based Standards for ship construction at IMO

Common Structural Rules Current situation TANKER rules (JTP) developed by Lloyds Register, ABS, Norske Veritas (LAN): Generally acceptable to much of industry (subject certain caveats) but not all Limited support from other IACS members BULK CARRIER rules (JBP) developed by 7 IACS members: Mixed reception from industry (many caveats) Support from LAN IACS members not forthcoming Only limited harmonisation of design assumptions and modelling techniques between JTP and JBP IACS under considerable strain to maintain cohesive position and internal harmony

Common Structural Rules Outstanding issues Around harmonisation : Influence of prescriptive requirements Wave shear force and wave loads Buckling and ultimate strength Finite Element Calculation procedure Fatigue analysis Industry acceptance of : Corrosion allowances Verification of coatings (application & performance)

Goal Based Standards Introduced in to IMO by Bahamas and Greece following Prestige accident Initially addressing ship structural standards, but with potential for extension to much of SOLAS and MARPOL legislation and more Principles still being debated versus other methodologies (prescriptive versus risk based)

Simplified Tier Concept Goal-based Safety Objectives Tier I Tier II Goal-based Functional Requirements Design and Construction Maintenance Operation Tier III Verification of Compliance Class Rules (Detailed requirement) Tier IV Code of Practice for Construction, Maintenance and Operation Tier V

Common Structural Rules Is there support for the principle of Common Structural Rules ? Subject to clarification of current drafts, is it now prudent to support the latest versions of both JTP and JBP rules, while at the same time encouraging further progressive harmonisation between the tanker and bulker rules ? How important is IACS unity and what can industry do to support & encourage this ?

Criminalisation of Seafarers

CRIMINALISATION Traditionally accidents have been regarded as quite distinct from deliberate acts Attitudes have changed (scapegoat mentality) e.g. Captain Mangouras, The Karachi Eight EU Directive on Ship-Source Pollution (despite wide industry coalition) Canadian Bill C-15 US approach (whistle blowing, enormous fines and rewards)

Criminalisation INDUSTRY supports the investigation and prosecution of illegal discharges of oil from ships. INDUSTRY strongly objects to criminalising accidental oil pollution and to treating seafarers as criminals Any criminal offence of pollution from a ship must be clearly defined and in accordance with international law. Any penalties imposed on someone found guilty of such an offence must be proportionate. There should also be parity with any penalties imposed for pollution from land based sources. Any suspects must be treated fairly, impartially and in accordance with international law on human rights.

Criminalisation Additionally INDUSTRY expects coastal states to comply with their existing treaty law obligations to provide adequate, affordable, oil waste reception facilities. In order to safeguard the lives of seafarers and the marine environment, INDUSTRY urges coastal states to ensure proper contingency plans are put in place so that adequate assistance and if necessary a place of refuge can be made available to a ship in distress.

CRIMINALISATION Do Asian owners share these concerns ? Is there a downside in fighting this? How / where should we be concentrating our efforts? & INDUSTRY principles: are they universally supported?

Challenges to Industry Governance Structures Classification Societies Flag Classification Societies Port State Control P&I Clubs

The good, the bad and … all legitimate Selection of Flag The good, the bad and … all legitimate

Challenges for Flag IMO Flag State Audit (currently voluntary but pressure to make mandatory) Port State Control - Currently: white, black and grey lists - EU moving to target non-audited flags with preferential treatment measures Political, public, union and media pressures – especially on open registers Industry currently providing guidance / recommendations, and moving to do more

Flag State Guidelines - industry advice

Challenges for Classification Societies EU Challenge on Role of Class – perceived conflict of interest between statutory and classification activities Common Structural Rules – ability to deliver while maintaining IACS harmony Role relative to Goal Based Standards – IMO/Flag states versus IACS control of Goal Based Standards Who sets class agenda – owners, builders, flag states or class managers ? Example coatings standards (IMO – DE discussion)

Challenges for Port State Control (PSC) Need : Better harmonisation and consistency of standards, training, etc. across all PSC regimes Consistency in inspection and targeting criteria – based in part on analysis of PSC records and not arbitrary mechansisms, such as quota systems Global sharing and mutual recognition of records between MoUs, with data logged in central system such as EQUASIS Uniformity in internal procedures, such as clear grounds for detention, independent appeal panels, close-out of deficiencies, etc. & To ensure that the integrity of PSC is maintained

Challenges for P&I Clubs & Club Boards OECD Report – Role of P&I in respect of substandard shipping IOPC Revision Procedures Pending Compulsory Insurance requirements Who manages the agenda – Shipowners or Club Managers ?

Challenges to Industry Governance Structures Do Asian shipowners share the same concerns over these challenges for Flag, Classification Societies, Port State Control and P&I Clubs ? What are the particular concerns ? Could we be doing more collectively to address any of these concerns ?

Two Questions that we have asked ourselves: Can the Round Table involve regional shipping voices more effectively in global (and other regional) arenas ? Does the Round Table have a role in supporting local and regional shipping associations in their local and regional issues ?

AGENDA Maintaining Supremacy of IMO & International Maritime Law Common Structural Rules & Goal Based Standards Criminalisation of Seafarers Challenges to Industry Governance Structures Other: People issues Piracy Ship Recycling Environmental Challenges Competition Rules Security Oil Pollution Liability (& Compensation)

PEOPLE ISSUES (HUMAN FACTORS) Heavy recent concentration on “hardware” issues (e.g. accelerated phase-out, CSRs, goal-based standards etc) Yet people still “cause” most incidents

PEOPLE ISSUES (HUMAN FACTORS) Industry has to address : Shortages of qualified officers (BIMCO/ISF 2005) Renewed criticisms of training standards (time to review STCW 95 ?) Implications/causes of fatigue (ISPS etc.) Manning levels In the background, CONMARCON

PIRACY Extent of the problem Focus of attention on Regions - Malacca Straits - Somalia - West Africa Developments

There is still a problem Worldwide: - 2003 445 attacks - 2004 325 attacks Malacca Straits - 2003 28 attacks - 2004 37 attacks

Crew Members: - 2004 30 killed, 30 missing In Malacca Straits - 2004 4 killed, 3 injured, 36 kidnapped Indonesia accounts for 25% of all attacks worldwide

Somalia Concerted attacks against larger ships 60 nm off the coast West Africa - Denial of a problem - Lagos has the highest record of attacks

Targets Tug + Tows Low in the water Slow moving Small Tankers Bulk Carriers

Current developments Improved cooperation and joint patrols in Malacca Strait, July 2004 Pan-Asia anti-piracy initiative – Regional Cooperation Agreement or ReCAAP Malaysian Maritime Enforcement Agency – 6 patrol boats up to 40 vessels plus helicopters within 5 years.

Current developments (cont.) Inventus UAV Unmanned Aerial Vehicle Reconnaissance system for aerial surveillance Secure Ship - 9000 volt pulse to deter boardings Shiploc Ship security alert system Ship tracking device

PROBLEMS REMAIN Hot Pursuit Lack of Resources Need for an effective deterrent

Ship Recycling – ship breaking, scrapping, demolition Notes

International guidelines on “best practice”

Ship Recycling Industry supporting: measures to ensure that ship recycling not just a sound but a sustainable industry development of effective regulation through adoption of the relevant elements of the: - IMO Guidelines on Ship Recycling - ILO Safety & Health Guidelines on Shipbreaking - Technical Guidelines of the Basel Convention

Ship Recycling Issues for shipowners Green Passport – format to be standardised IMO Guidelines - key elements to be made mandatory via international convention - guidance notes being developed on the implemenation of the Guidelines Inventory of Hazardous Materials document - still only limited utilisation Demolition Contract related to the IMO Guidelines (such as BIMCO Demolishcon) - only limited application to date

Ship Recycling Issues for shipbreakers In general there is a need for: development and introduction of Code of Practice for HSE management and/or legislation to ensure compliance with best practice / international conventions ”breaking yards” to be licensed & specifically: Breakers need to adopt and implement: Ship Recycling Plan as set out in the IMO Guidelines Health and Safety plans as set out in the ILO Guidelines Plans for the handling of hazardous waste as set out in the Basel Convention

Environmental Challenges Air Emissions (Low sulphur bunker issues) Ballast Water Management

IOPC Compensation Limits - as revised 2003/2005 100 200 300 400 500 600 700 800 10 20 30 40 50 60 70 80 90 110 120 130 140 150 160 SDR Millions 151 302 453 604 755 906 1,057 1,209 USD Millions '000 GT 1992 Fund, SDR 203 m, USD 307 m 1992 CLC pre STOPIA Supplementary Fund (as from 3.3.05) SDR 750 m, USD 1 133 m)