Tanker Market Outlook 2005 Key Concerns Facing the Tanker Industry - An INTERTANKO Perspective By John C. Fawcett-Ellis General Counsel & Regional Manager Asia-Pacific Singapore, 27 September 2005

- representing responsible oil and chemical tanker owners worldwide - promoting Safer Ships, Cleaner Seas and Free Competition

-strict membership criteria based on quality and performance

The strength of INTERTANKO  230 members – operating some 2,200 tankers  280 associate members  26 staff lead by MD – Dr P Swift  Oslo, London, S’pore and Washington DC  Chairman – Mr S Van Dyck  14 committees  4 regional panel

INTERTANKO’s vision for the tanker industry: “ A responsible, sustainable and respected industry able to influence its own destiny.”

Key industry goals  Regulatory environment which supports safe shipping operations, environmental protection and adherence to internationally adopted standards and procedures  Properly considered international regulation of shipping  Global regulation for a global industry, adopted and implemented uniformly

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

Increasing politicization of regulation 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

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

HOW IT WAS: Examples of positive regulatory developments (the “IMO spirit”)  ISM Code and STCW (training) 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

Meeting Society’s expectations ( “ our licence to trade”) - including the environmental challenges

The world expects us to have 0 accidents. Even though % of oil is delivered safely It takes only one accident to change the industry

Tanker incidents: Source: LMIS, Informa, press, INTERTANKO Number

Development of tanker oil spills Source: ITOPF. Number of spills above 700 tonnes.

Accidental oil pollution from tankers and tanker trade Source: ITOPF, Fearnleys 1000 bn tm m ts spilt

 Meeting Society’s expectations ( “ our licence to trade”)  - including the environmental challenges  Maintaining International versus Regional and Local legislation  Overhauling the governance structure of the industry:  - Class, Flag, Port State Control  Reversing the trend to increased criminalisation  Ensuring the commitment of all stakeholders to continuous improvement Key issues for Tanker Owners

Designers Shipbuilders Equipment Suppliers Class Charterers Operator/Manager Financiers / Guarantors Owner Commitment to Continuous Improvement by all stakeholders in the maritime businesses Cargo Owners Brokers P&IHull insurers Ports & Terminals Coastal States Waterways authorities Flag states Bunker suppliers Pilots Tug operators Labour providers Salvers Repairers Paint Suppliers Agents Spill Response Ship Breakers

Tanker Event 2006 Singapore March 2005 The Poseidon Challenge

INTERTANKO Publications  Guide to bunkering of ships for the purposes of Annex VI to MARPOL  A Guide for correct entries in the Oil Record Book  A Guide to Tanker Charters  Tanker Bills of Lading - A Practical Guide  Guiding Principles to Emergency Management and Crisis Communications

Thank you