2012 International Chamber of Shipping Representing the Global Shipping Industry We acknowledge with thanks the use of photos from the following associations and their member shipping companies:
ANAVE, Spain BW Shipping, Singapore Canadian Shipowners’ Association Chamber of Shipping of America China Ocean Going (Group) Co Confitarma, Italy Cyprus Shipping Chamber Danish Shipowners’ Association Finnish Shipowners’ Association Hong Kong Shipowners’ Association Interferry Irish Chamber of Shipping Japanese Shipowners’ Association Royal Association of Netherlands Shipowners Swedish Shipowners’ Association Turkish Chamber of Shipping Union of Greek Shipowners Verband Deutscher Reeder, Germany ReviewAnnual 2012
Representing the Global Shipping Industry
ICS (the International Chamber of Shipping) is the principal international trade association for shipowners, concerned with all regulatory, operational and legal issues.
ISF (the International Shipping Federation) is the identity used by ICS when representing the industry on employment affairs issues.
The membership of ICS (and ISF) comprises national shipowners’ associations representing all sectors and trades from 36 countries, covering more than 80% of the world merchant fleet. 2 3
page Contents page 4 Chairman’s Overview 31 Asian Developments 5 Office Bearers and Secretariat 32 EU Developments 34 US Developments 6 Key Issues in 2012 6 The ‘Costa Concordia’ Disaster 34 Trade Sanctions 8 The Piracy Crisis Continues 38 LLMC Increases 10 Navigating the Politics of Climate Change 39 Passenger Ship Liability 40 Environmental Salvage Awards 15 The Year in Review 41 Rotterdam Rules 15 Low Sulphur Fuel 42 Competition Issues 16 Ballast Water Management 44 Investigation of IG of P&I Clubs 17 Changes to MARPOL 45 Flag State Performance 18 Ship Recycling 45 Shipping Policy and Free Trade 18 Shipbuilding Standards 46 Shipbuilding Policy 19 Cargo Safety 49 Canal Issues 21 Tanker Safety 50 Industry Representation and Co-operation 22 Malacca and Singapore Straits 52 Publications 24 E-Navigation and ECDIS 54 Organisational Matters 24 Training Standards 27 Work Hour Regulations 55 ICS Board of Directors 27 Employment Relations 56 Committee Structure 29 Maritime Labour Standards Membership 30 ILO Minimum Wage ICS Chairman, Spyros M Polemis Greece
Chairman’s Overview
4 THIS ICS ANNUAL REVIEW provides The latter sometimes placed strain are reconciled so far as possible in a a good opportunity to take stock of on the maintenance of the global sound and practical manner. events during the last 12 months that regulatory framework on which the may help to shape the future direction shipping industry depends to operate As this Annual Review makes clear, of our great industry, and of some of efficiently. I am very pleased to report the next few years will be very difficult, the major challenges that lie ahead. that this framework, underpinned with global economic uncertainty, a Sadly, this will be the last occasion on by IMO Conventions, remains firmly chronic oversupply of tonnage, and which I provide the opening remarks intact and is still strongly supported truly enormous cost pressures, not to this comprehensive review of ICS’s worldwide, by governments and least with respect to bunkers, as we activities on behalf of the global industry alike. But there continues move towards burning low sulphur shipping industry. The influence to be a need to be vigilant against fuel. Shipowners also face the that ICS brings to bear on maritime unilateral or regional regulation, not prospect of being charged billions of regulatory affairs is considerable; least with respect to measures to dollars per year for carbon emissions, something which - despite the huge address shipping’s CO2 emissions. despite being by far the most political and technical complexities energy efficient mode of commercial involved - ICS does with considerable During my tenure at ICS, we have transport. New requirements for success, but with characteristically seen the adoption of a radical IMO ballast water management also quiet efficiency. agreement that will dramatically reduce present a serious challenge, with air pollution and, in July 2011, the first respect to both their technical and However, in a world of mass media, ever global agreement covering an economic viability. and with a plethora of different entire industrial sector that will ensure interest groups vying for attention, that shipping reduces its CO2 emissions Of more immediate concern, false modesty is no longer seen as by 20% per tonne/km by 2020, with shipowners and their crews continue to a virtue. Therefore, as soon as I further significant improvements in face the wholly unacceptable scourge came to appreciate the remarkable energy efficiency going forward. of piracy, off the coast of Somalia breadth of ICS’s activities, the depth and elsewhere. I have said it before of its expertise and the respect which With respect to the safety and welfare and I will say it again, it really is time it enjoys amongst governments of the seafarers that we employ, and for the international community to worldwide, one of my tasks as on whom the world depends for the make it clear, and for governments Chairman has been to try to increase efficient transportation of 90% of to understand, that criminal attacks understanding and awareness of ICS’s world trade, we have seen major against international shipping cannot vital role within the shipping industry adjustments to the International and will not be tolerated. at large. I hope that this expanded Safety Management (ISM) Code and ICS Annual Review will contribute the IMO STCW regime governing Meanwhile, the dangers of to that task. Like most things in life training standards, as well as the complacency with respect to the which we take for granted, the service adoption of the ILO Maritime Labour industry’s otherwise generally excellent provided by ICS is something that the Convention. This is in addition to the safety record have been put into the industry would find very hard indeed incremental but numerous changes spotlight by the ‘Costa Concordia’ to do without. to detailed regulations governing tragedy and other recent accidents ship construction and equipment, that will inevitably result with a robust ICS, its member national shipowners’ maritime law and insurance, and the response from the regulators. It must associations and the industry which smooth operation of shipping markets, be hoped that this response will be they represent have witnessed a which all help to ensure that shipping measured and based on a thorough great deal of change since I was remains safe, clean and remarkably analysis of the facts, as well as a first elected Chairman six years ago, efficient. These are all important proper debate about the technical against a backdrop of booming developments in which ICS, and merits of arguments for any proposed shipping markets which then plunged its members, have played a crucial changes to rules or procedures. ICS into deep recession, as well as major part, helping to ensure that the best will of course contribute actively to challenges on the regulatory front. interests of the industry and society this debate in the year ahead. ICS Vice Chairman 2011/12 I am very pleased that my last few 5 months in office have coincided with the appointment of Mr Koji Sekimizu as the new Secretary-General of IMO. I am especially pleased that, whilst sharing ICS’s ultimate goal of zero accidents and zero impact from shipping on the environment, he too believes that more should be done to explain the impressive performance of the industry to its international regulators, to politicians and to high level policy makers. ICS looks forward to participating alongside IMO at Captain Dirk Fry Mr Trygve Seglem Mr Frank Mr Gerardo the ‘Rio + 20’ United Nations Summit Cyprus Norway Leonhardt Borromeo on Sustainable Development in June Germany Philippines 2012.
It has truly been a pleasure to serve as the Chairman of ICS, as well as a Secretariat great responsibility. I have very much Mr Peter Hinchliffe Secretary General enjoyed my contact with the member national associations, and I must express my deep appreciation to the Mr Simon Bennett Mr John Murray ICS Board of Directors, and to those Director External Relations Director Marine who contribute with such dedication Ms Linda Howlett Mrs Natalie Shaw to the vital work of ICS’s expert Director Legal Affairs* Director Employment Affairs committees which produce ICS policy Ms Kiran Khosla Mr David Tongue positions and develop invaluable Director Legal Affairs* Director Regulatory Affairs guidance on industry best practice. Miss Camilla Arana Mr James Langley I wish my successor well, and I Policy Officer Senior Adviser am very confident that under his Mr Phillip Binks Miss Emily Rowley leadership ICS will continue to serve Adviser Adviser the best interests of our industry in Mr Alistair Hull Mr John Stawpert the highly considered and professional Technical Manager Senior Adviser manner to which we have become so accustomed. Mrs Susan Gray Mrs Shantel Ryan Director Finance and Publications Manager Spyros M Polemis Administration Mrs Anita Pow Chairman Mrs Kathryn Hall Administrator Personal Assistant to Shipping Policy Secretary General Miss Julie Rogers Mrs Catherine Howlett Administrator Administrator Marine Department Publications *position held jointly KEY ISSUES IN 2012 The ‘Costa Concordia’ Disaster
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EVERYONE IN SHIPPING recognises the a ‘state of the art’ vessel manned by a need to be prepared for the unexpected. highly qualified crew who were using What was not foreseen was that the the latest navigational equipment. defining event of 2012 would be the tragic loss of the ‘Costa Concordia’ and On 13 January 2012, in the full glare of that the safety record of the industry the world’s media, the cruise ship ‘Costa would be put under the spotlight in the Concordia’ grounded and capsized off most dramatic way imaginable. This the coast of Italy with over 4,000 people high profile disaster may also have on board. Tragically, at least 30 lives implications for other types of ship were lost. This serious maritime casualty beyond the cruise sector, and it will appears to have been a text book case almost certainly have a significant of an accident that should never have influence on the immediate regulatory happened, made all the more poignant agenda at IMO. by the 100th anniversary of the sinking of the ‘Titanic’ with which comparisons Safety of life at sea must always remain have inevitably if erroneously been the highest priority and the way in made. That said, questions are being which the industry addresses any issues asked about what might have occurred raised by this major accident may had a similar incident taken place at reflect on its reputation for years to a more remote location away from come. It will be vital for the industry sophisticated search and rescue services. to understand the sequence of events that led to the disaster, which involved The Italian cruise ship struck rocks in 7 the Tyrrhenian Sea just off the eastern regulatory discussions at IMO, as well as under further scrutiny. The debate shore of Isola del Giglio, with media in the European Union and the United about the large size of modern cruise reports suggesting that the vessel came States. The European Commission has ships, and arrangements concerning too close to the island in what are well already announced that it will launch a insurance for liabilities, are also likely to charted waters. It seems the impact public consultation and legislative review be given renewed attention. Proposals ripped an enormous gash on the port during the course of 2012 while the US to review the proper application of the side of the hull, flooding parts of the Congress is conducting its own hearings IMO International Safety Management engine room and causing loss of power given that a large proportion of cruise (ISM Code) are also anticipated. to propulsion and electrical systems. ship passengers are US nationals. With water flooding in, the ship reached For the moment at least it seems the island several hours later, where it It is hoped that the Italian government that politicians and regulators are grounded in shallow water with most of will present the results of its preliminary commendably refraining from knee- the starboard side underwater. investigations for consideration by jerk responses until the causes of the the IMO Maritime Safety Committee accident are fully understood. However, With ICS support, the Cruise Lines as soon as possible, although its task this approach may yet change during International Association (CLIA) and the is complicated because the disaster the year ahead as more facts about this European Cruise Council (ECC) led the is subject to a criminal investigation. unfortunate incident are released and immediate sector-specific public relations While it is still far too early to know the criminal proceedings in Italy receive response. More importantly, CLIA what the outcome of the accident further close attention across the media. members have been conducting a root investigation will be, questions raised and branch review of their safety and by the media suggest that as well as operational procedures. However, ICS navigational issues and emergency will be closely involved in the inevitable procedures, stability issues may come KEY ISSUES IN 2012 The Piracy Crisis Continues
8 IT IS IMPORTANT to recall that the intervention with a more aggressive because ships are out of sight and out continuing crisis in the Indian Ocean stance has reduced the pirates’ rate of mind. and attacks against shipping by Somali of success. Thankfully, the number of pirates have already led to over 60 crew held in Somalia is also at a lower Government abdication of seafarers losing their lives and over level than has been the case for some responsibility for ship security to 4,000 seafarers being taken hostage. time, with about 200 seafarers currently private armed guards, to whom Piracy has also been estimated to cost in captivity, although it must be shipping companies are now resorting the global economy billions of dollars stressed that this situation is still totally in increasing numbers, is not a viable a year and is causing untold damage unacceptable. long term solution for eliminating to the economies of Africa and the piracy. However, because of their Middle East. But the principal concern In February 2012, the Prime Minister growing use, ICS is now pressing IMO, of ship operators is humanitarian. It of the United Kingdom hosted a and the International Contact Group is simply unacceptable that so many major intergovernmental conference working under the auspices of the seafarers have been killed, while on Somalia. ICS welcomed the UN, to give urgent consideration to hundreds more are still being held commitments made to try to restore the regulation of armed guards and captive in appalling conditions. government and civil society in this the criteria against which they might Thousands of seafarers still have to conflict ridden country, the absence be vetted. The GUARDCON contract traverse the danger area in serious fear of a functioning state being one launched by BIMCO is a very helpful for their lives, and the strain on their of the underlying causes of violent tool, but it does not address every legal families must also not be forgotten. Somali pirate attacks. However, problem to which shipping companies addressing these issues will take years and Masters might potentially be Notwithstanding the success of current if not decades and the Conference exposed. military deployments, there is still a did not appear to result in any firm pressing need for the governments political commitment, or new action, Another key objective of ICS is to of those nations with the largest to eliminate or significantly reduce ensure that every captured pirate is military navies in the region to increase the scourge of Somali piracy in the sent to trial. Counter-piracy efforts resources available to the extent that immediate future. have been greatly discredited by the is necessary to have a game changing lack of appropriate domestic legislation impact. In co-operation with the ICS believes that governments must in many nations, including any offence rest of the industry, including those task their military forces to take the of ‘intent to commit piracy’. This has organisations supporting the excellent attack to the pirates and ensure that led to a continuation of the absurd ‘Save Our Seafarers’ campaign, ICS is the military assets required to do this situation whereby pirates who are committed to helping ensure that the are maintained in theatre so that they captured by navies are sometimes problem of piracy retains sufficient can continue to defend merchant released back to Somalia. ICS has political and public attention, so ships in the best way possible. therefore welcomed the focus of the that the crisis might be properly and Encouragingly, in March 2012, EU February Conference on the need for decisively addressed during 2012. governments signalled that they apprehended pirates to be arrested, may be moving in this direction, and taken to a court of law and, if found Some press reports may have given extended the mandate of Operation guilty, imprisoned, including the the impression that the level of piracy Atalanta until 2014. However little announcement to establish a new off Somalia is decreasing. But as data mention was made at the February Regional Anti-Piracy Prosecutions from the military makes clear, pirate Conference of the obligations of Intelligence Co-ordination Centre capability is actually higher than governments under the United Nations based in the Seychelles. ever. However, counter-piracy work Convention on the Law of the Sea to in terms of compliance with the Best protect merchant ships and their crews ICS has also welcomed the Management Practices developed by the from piracy, and the fear persists that determination of governments to break industry in co-operation with navies (an the current level of pirate attacks is the financial chain through legal action updated version – BMP 4 – was issued something which governments might against criminal financiers investing in October 2011) and sustained military be willing to continue to tolerate in piracy wherever in the world they Year 2009 2010 2011
Pirate Attacks 117 127 151 Disruptions 14 64 27 Piratings 46 47 25
Source: EUNAVFOR
are identified. However, the shipping their crews to months if not years of for shipping companies and manning industry would be deeply concerned appalling treatment. This includes agencies to help support seafarers and by any suggestion that the payment of torture and murder, which has already their families affected by pirate attacks. ransoms, in order to secure the release been the result when ransoms have of seafarers being held hostage, should not been paid. In the event that Finding a solution to piracy remains be prohibited or somehow criminalised. ransom payments were prohibited a clear priority for ICS, which now The UK Foreign Office has advised or criminalised, many seafarers finds itself participating in numerous that this is not the intention behind a and shipping companies would meetings at IMO and the various new international task force on pirate understandably refuse to sail in the working groups set up by the financing that is being established affected danger area, with significant International Contact Group on Piracy in 2012. However, the possibility implications for the large proportion off the Coast of Somalia. While all of banning ransoms has received of world trade, including about 40% these meetings, in London, New York considerable media attention and of the world’s oil shipments, which and elsewhere, are taking important sometimes unhelpful comment from is transported via the Western Indian decisions with respect to detailed senior politicians who should perhaps Ocean. facets of the problem, they are be more mindful of unintended perhaps symptomatic of the fact that consequences. To reiterate, the primary concern of consideration of piracy is becoming the industry is humanitarian, and institutionalised and that governments In the event that seafarers are shipowners have a duty of care to their may still be side stepping the real taken hostage, the inability of the crews and their families. Mention issue of how to tackle the pirates international community to eliminate must therefore be made of the militarily. The time has surely come for piracy or to rescue hostages means important work of the Maritime Piracy a clear message from the international that shipowners have no option but Humanitarian Response Initiative, to community of zero tolerance of piracy to pay ransoms. The alternative which ICS has contributed, that has across the globe. would be for shipowners to abandon compiled good practice guidelines KEY ISSUES IN 2012 Navigating the Politics of Climate Change
10 IN JULY 2011, 150 or more IMO exists to apply for flag state waivers. Member States concluded a ground Reducing CO2 emissions through breaking agreement to reduce the reducing fuel consumption is a matter shipping industry’s CO2 emissions. of enlightened self interest for ship This is the first such global agreement operators, and the industry is fully for an entire industrial sector. As a engaged in the continuing discussions result of amendments to the MARPOL at IMO about refining the EEDI and Convention, new ships will have to extending it to ship types for which be built with an Energy Efficiency EEDI formulae have not yet been Design Index (EEDI), while from 2013 finalised due to the more problematic all ships, including existing ships, will nature of the calculations. have to utilise a Ship Energy Efficiency Management Plan (SEEMP) in order to Above all, the IMO agreement is control fuel consumption and reduce strongly supported by shipowners emissions. because of the overriding need for global rules for a global industry. If As a result of this IMO agreement on different rules were to apply to ships at technical and operational measures, different ends of a voyage there would and the steps that ship operators be chaos, inefficiency and serious are already taking to reduce fuel market distortion. A regional approach consumption, ICS is confident that to reducing ships’ emissions would also shipping can deliver a 20% reduction be far less effective in actually reducing in emissions per tonne/km by 2020 CO2. Climate change, of course, is a across the entire global industry. global challenge.
Objective observers might be forgiven Notwithstanding the considerable for thinking that this IMO agreement efforts being made to reduce ship is a very impressive achievement, emissions through technical and especially as shipping is already, by operational measures, the industry is far, the most energy efficient form under pressure to accept the additional of commercial transport. However, a burden of so called Market Based number of governments still expect Measures (MBMs). Market Based much more. In the context of the Measures to reduce CO2 remain a very new Green Climate Fund that was controversial issue among shipowners. established by the most recent United Some governments argue that MBMs Nations Climate Change Conference, will somehow incentivise shipowners some governments have actually to achieve further efficiency gains, and proposed that shipping should pay as might bridge the gap they perceive much as US$40 billion per year for the between the significant efficiency privilege of transporting 90% of the improvements that shipping is already world’s trade. delivering and the expectations that total maritime trade will continue The IMO agreement on technical to expand in response to the (long and operational measures enjoys term) predicted growth of the world the full support of the shipping economy. industry. ICS has recommended that all new ships currently covered But in the face of rising fuel costs, by the regulations are delivered shipowners reasonably believe that with an EEDI, even though flexibility they already have every incentive to improve their fuel efficiency. The The first of these is that the UNFCCC, developing nations. In simple terms, 11 introduction of low sulphur fuels, as and its high level discussions about this can perhaps be seen as the price part of a separate IMO agreement, replacing the Kyoto Protocol, is in for persuading developing nations is also expected to increase bunker large part driving the agenda. In to agree to continue negotiations costs by in excess of 50%. With 2012 addition, there are the significant, on a new UN climate change looking like one of the most financially and some would argue unrealistic, accord, scheduled for adoption in difficult years for shipowners in living commitments that have already 2015. This new UN agreement is memory, now is certainly not the been pledged by nations such as EU intended to include carbon reduction time to introduce an additional cost Member States, to reduce their total commitments by emerging economies, pressure in the form of an MBM. CO2 emissions dramatically. Unless not just from developed or so called Many in the industry are concerned IMO can demonstrate that it is making ‘Annex I’ nations as is the situation that some governments are more real progress towards the development at present. Between now and the interested in how much money can of an international MBM for shipping, next UN Climate Conference, in Qatar, be squeezed from shipping through the industry may be faced with the in December 2012, the UNFCCC an MBM, rather than any further unwelcome prospect of regional members will begin to consider how, emissions reduction that this might action. and from whom, this money is going actually deliver. to be raised. The other important political reality The challenge for ICS, as the is the decision by the most recent A high level working group set up industry’s principal international trade UN Climate Change Conference by the UN Secretary General and association, is that despite shipowners’ in Durban, in December 2011, to chaired by the premiers of Norway justified suspicions about MBMs, it is establish the Green Climate Fund. and Ethiopia has appeared to suggest necessary for the industry to address This aims to generate US$100 billion that some US$16 billion per year the politics of climate change and per year by 2020, in order to help could be raised from international some difficult realities. mitigation and adaptation projects in shipping. But in a more recent World
IMO agreement on technical regulations will reduce ships’ CO2 MARPOL Annex VI, Chapter 4 adopted July 2011
Regulations EEDI requires New ships New ships New ships enter into force new ships to must improve must improve must for over 90% of meet agreed efficiency 10% efficiency improve world fleet efficiency up to 20% efficiency targets 30% Ship Energy Efficiency 20% CO2 50% CO2 reduction Management reduction per per tonne/km Plan (SEEMP): tonne/km (industry goal) mandatory (industry goal) implementation for all ships
2013 2015 2020 2025 2030 2050 Comparison of CO2 emissions between different modes of transport grams per tonne-km Source: NTM, Sweden
12 600 Towards an IMO MBM ICS is leading industry representation on the discussions at IMO to develop a Market Based Measure for shipping, with IMO having a view to adoption in 2014. In 2011, ICS members took the important decision to declare the industry’s preference for an MBM directly linked to fuel consumption, Air rather than an emissions trading scheme (ETS). If governments decide 500 freight that an MBM should be adopted, ICS members have agreed that a 747-400 mechanism linked to fuel consumption is the one that most shipping 1,200 km companies could probably live with in order to ensure a level playing flight field and the avoidance of serious market distortion, concluding it 540 would be far simpler to manage and more transparent than an ETS. In a welcome move, the IMO Secretary-General has announced the intention of IMO to conduct a full impact assessment of the various 400 MBM proposals, with detailed terms of reference to be developed in 2012.
Bank report, prepared for the G20 and almost certainly viewed by many 300 Summit in Cannes in November 2011, emerging economies as a tax on trade it was suggested that shipping should – a form of ‘green protectionism’. contribute some US$25 billion per year. And the demands do not stop there. However, the paramount goal for the Some governments have publically shipping industry is the avoidance suggested that only a proportion of of ‘double charging’ through any money collected from shipping contributions to the UNFCCC and should actually go into the Green Fund, via any MBM agreed at IMO. There 200 and that a significant chunk should would therefore seem to be a need for go straight into the treasuries of the a clear linkage between any IMO MBM governments collecting it, implying and any shipping contribution to the that the charge imposed on shipping Green Fund. Heavy could actually be even more, perhaps truck as much as US$40 billion per year. The other political reality that shipping Cargo with has to address is the UNFCCC principle Cargo vessel 100 trailer The position of ICS is that if of Common But Differentiated vessel 2,000- governments decide that shipping Responsibility (CBDR), whereby the over 8,000 should contribute to the Green emission reduction commitments 8,000 dwt 50 Fund, then the payments should accepted by developing nations are dwt be proportionate to shipping’s less than those of mature economies. 21 contribution to the world’s total CO2 The challenge has been how to 15 emissions. To contribute the kind reconcile this with the IMO principle of sums which the World Bank has of no more favourable treatment 0 suggested would be totally inequitable for ships under different flags. On Representing the Global Shipping Industry
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the one hand, the European Union being hotly debated) as well as a flag agree to such an approach should not threatens regional action if IMO fails state waiver with respect to the EEDI be underestimated. to deliver on CO2, while on the other, (although the industry has decided not developing nations - led by China, to make use of this). ICS will continue to support IMO as India and Brazil - remain opposed to the body where discussions about a supporting an IMO agreement which Securing support for an IMO MBM shipping MBM and any contribution they fear might prejudice their position from nations like China and India will to the Green Fund should take place at the high level UNFCCC negotiations. also require account to be taken of However, the industry will firmly resist CBDR. However, reconciling the CBDR any notion that it can be regarded In the event, with the industry’s full principle with an IMO MBM, which as a cash cow, and will continue to support, IMO has already proved itself must apply equally to ships of all flags emphasise that the best means of to be eminently capable of delivering a in order to avoid market distortion, delivering meaningful CO2 emission global solution for shipping which can will not be an easy task. But if any of reduction will be through technical be reconciled with the CBDR principle. the money collected by an IMO MBM and operation measures, rather than a The July 2011 agreement, which was channelled to the Green Fund mechanism whose principal purpose is adopted binding global regulations for (perhaps via an IMO compensation simply to raise money. technical and operational measures to fund into which money raised from reduce ships’ emissions, will enter into shipping was paid) this could perhaps force in January 2013 and will apply to be a means of meeting the CBDR at least 90% of the world’s tonnage. principle. Developing nations would To address CBDR, the agreement be receiving more money than they included regulations on technology were contributing, while preserving transfer and technical assistance for the level playing field for shipping. developing nations (although the However, the challenge of persuading details of how this will work are still nations such as China and India to 14 Representing the Global Shipping Industry The Year in Review
Low Sulphur Fuel demand. This is complicated by the 15 fact that it is not yet fully known In 2008, IMO adopted radical which additional areas may be amendments to MARPOL Annex VI designated as ECAs. For example, the governing atmospheric pollution, European Parliament has proposed which for most ships will require that all EU waters within 200 miles the use of expensive, distillate of the coast should be declared as grade, low sulphur fuel. While sulphur ECAs. Whether this will be the use of exhaust gas cleaning accepted by EU Member States, or in systems (scrubbers) is permitted turn will be supported by the scientific as an alternative, it is still unclear studies required to gain IMO approval, whether these will be technically, is still an open question. environmentally, or economically viable for use on a widespread basis. When the MARPOL amendments were adopted, ICS welcomed the The enormity of this change, and its IMO agreement as an acceptable economic impact on shipping should compromise, although this was not be underestimated. Fuel is by in the context of the even more far the largest operational cost for draconian measures proposed by shipowners and has already increased many governments, and the threat in price by about 300% since 2000. by the EU to impose an immediate The current 50% price differential regional solution if IMO was unable between distillate and residual fuel to deliver a global agreement. oil is predicted to increase further if However the implementation of the the new demand that will be created new requirements will be far from by the MARPOL requirements is not easy, and ICS is closely monitoring the matched by increased supply. Exhaust progress that is being made to ensure gas scrubbers, assuming they work, that the demand from shipping for and that questions are resolved about distillate fuel can actually be met. the waste that is produced, have been In the United States, it is still very predicted to cost in excess of US$2 unclear whether or not enough fuel million per engine if fitted on board will be available for the US shipping larger ships. industry, let alone the huge amount of international shipping that trades Perhaps the most controversial in and out of the world’s largest requirement in MARPOL Annex VI economy. concerns the need for ships operating in Emission Control Areas (ECAs) to Recent studies supported by the burn fuel with no more than 0.1% European Community Shipowners’ sulphur as from 2015. At present, Associations (ECSA) have also the Baltic, the North Sea, and the suggested that the modal shift to entire West and East coasts of the US land transport that will probably and Canada have been designated as result from the application of the sulphur ECAs by IMO, at the request 0.1% limit on sulphur in fuel could of the governments concerned. This greatly damage local short sea presents a major challenge for the oil shipping while being detrimental refining industry which will have to to the local environment. This is expand the production of compliant also a big concern for Great Lakes low sulphur fuel to meet the new trades affected by the US/Canada 16 IMO agreement to reduce atmospheric pollution from ships Ballast Water Management The IMO Ballast Water Management (BWM) Convention was adopted with great urgency by governments in 2004, Sulphur content of fuel in order to address environmental permitted in Emission concerns about damage to local Control Areas aquatic ecosystems caused by the unwanted introduction of foreign micro-organisms, which is apparently 1.5% facilitated by international shipping. The adoption of the BWM Convention was a classic case of aspirational legislation. For reasons that are well understood, including the economic 1.0% damage to the US economy from the unwanted influx of zebra mussels, there was huge political pressure for IMO to adopt the Convention 0.1% eight years ago. But the equipment needed to comply with the new requirements, and the complex Year 2005 2010 2015 technical guidelines needed to ensure proper implementation, had not then been developed, which is why it is ECA. These concerns are now shared only now that governments are almost by many governments, but it remains Timetable for new limits to in a position to ratify. to be seen if any will request that IMO sulphur content in ships’ fuel should now revisit the requirements. agreed by IMO Following an increase in the number of ratifications it had been expected While there is a formal mechanism 2010 - Emission Control Area that the Convention would enter into in the IMO agreement to complete (ECA) limit reduced to 1% force during 2012. However, at an a review by 2018 of progress made (from 1.5%) IMO meeting in January 2012, some towards meeting the demand for major changes were proposed to 0.5% sulphur fuel that is meant to 2012 - Global limit reduced to important draft guidelines on ballast be used outside of ECAs by 2020, ICS 3.5% (from 4.5%) water sampling and analysis that has been pressing IMO to start work 2015 - ECA limit reduced to 0.1% will be used by port state control now on developing a methodology inspectors, which would be very that can consider all of the major 2020 - Global limit to 0.5% but damaging to shipowners if adopted. changes required by the new regime. a review in 2018, with authority ICS made a strong statement at For political reasons, the US and EU to delay implementation, will the end of the IMO meeting about governments have so far been reluctant determine whether this is the direction that had been taken to support the ICS proposal. But this achievable. and, supported by many flag states, issue of fuel availability is becoming 2025 - Global limit to 0.5% these draft guidelines will now be increasingly pressing, and ICS will again notwithstanding the result of the reconsidered. However, this now make a formal written proposal to the 2018 review. means that these sampling guidelines IMO Marine Environment Protection will not be agreed until at least 2013, Committee in October 2012. which in turn is expected to further Representing the Global Shipping Industry
delay the additional ratifications Changes to MARPOL comprehensive regulatory framework 17 needed to bring the Convention into and the widespread global force. This creates other problems In addition to the high profile enforcement of the International for shipowners due to the fixed dates discussions addressing CO2 and other Convention for the Prevention of by which existing ships have to install atmospheric emissions, a wide range Pollution from Ships (MARPOL). the very expensive new treatment of other environmental issues remain equipment as required by the on IMO’s agenda requiring detailed In July 2011, IMO adopted changes to Convention’s time line. input from ICS. A large proportion Annex V of the MARPOL Convention, of ICS resources is committed to concerning garbage, that will enter There are still genuine concerns participating in the ongoing work into force in January 2013. These about the availability of suitable of numerous IMO Committees and were supported by detailed guidelines equipment, the robustness of the type working groups which are constantly adopted by the Marine Environment approval process, the huge expense updating environmental regulations Protection Committee in March 2012. of retrofitting existing ships, and and technical codes. There is now a new requirement the present limited possibilities for specifying that discharge of all treatment systems for larger vessels. Meanwhile, at the ‘high’ political garbage into the sea is prohibited, That said, progress is now being level, ICS plans to support IMO in its except where expressly provided made to approve various ballast water participation at the ‘Rio+20’ United otherwise (the discharges still treatment systems as an alternative Nations Conference on Sustainable permitted, in certain circumstances, to ballast water exchange at sea once Development in Brazil in June include food wastes, cargo residues this is no longer permitted. 2012. This will provide a unique and water used for washing deck opportunity to highlight the success and external surfaces containing Completion of this work is long that the industry and IMO have had in cleaning agents or additives which overdue given that new ships are delivering continuous improvement in are not harmful to the marine already meant to be constructed shipping’s environmental performance environment). Following the parallel with these expensive new treatment through the development of a adoption by IMO of new Guidelines systems. ICS has contributed significantly to this work and Reduction in number of major oil spills per year (over 700 tonnes) continues to provide a consultant to Source: ITOPF the GESAMP (Joint Group of Experts on the Scientific Aspects of Marine Environment Protection) Ballast 250 Water Working Group that has been conducting the detailed assessment of the new equipment’s environmental 200 acceptability. Meanwhile, ICS continues to encourage full co-operation with local ballast water exchange requirements wherever it is 150 safe for ships to do so.
So long as the BWM Convention 100 has not entered into force, this will continue to encourage the development of local requirements 50 that are at variance to those agreed by IMO (see separate item on United 223 94 64 31 States Developments). The possibility 0 remains of ballast water chaos. 1972-1981 1982-1991 1992-2001 2002-2011 18 on Garbage Management Plans that basis in advance of the Hong Kong must be carried on board ships, ICS Convention entering into force. will be reviewing its own model plan and best practice guidelines for Shipbuilding Standards shipowners. The maintenance of high standards Somewhat controversially, in July of ship construction is of the utmost 2011 IMO also adopted amendments importance. The objective of ICS to MARPOL Annex IV concerning is that shipbuilding standards will the prevention of pollution by continue to be taken forward so sewage from ships, which include that with an appropriate level of the possibility of governments maintenance, and adequate margins establishing ‘Special Areas’ for the for corrosion, future ships will be prevention of such pollution from constructed so that they will continue passenger ships, and which designate to be ‘fit for purpose’ throughout the Baltic Sea as the first such Special their typical 25 year life span. Area. The impact of passenger ships with respect to nitrate pollution of ICS continues to participate in a the Baltic is widely acknowledged cross industry initiative, co-ordinated to be insignificant in comparison by the International Association to major sources of pollution such of Classification Societies (IACS) as agriculture. The operational to provide guidance on the implications of compliance and harmonisation and amendment of the difficulties of finding suitable Guidelines on Transitional Measures the Common Structural Rules (CSRs) reception facilities are out of all for Shipowners Selling Ships for for bulk carriers and tankers. The proportion to the environmental Recycling, whose development was intention is to provide a harmonised benefit. The real concern, however, led by ICS. The industry Guidelines set of rules, for use by all class is the precedent this might create are specifically intended to help societies, on common aspects of hull for the introduction of all sorts of improve safety and environmental structure design, supplemented by other MARPOL ‘Special Areas’ being conditions in recycling yards in dedicated sections on the specific established, potentially applying to advance of the entry into force of the requirements for these two ship types. all ship types. ICS has already had to new Convention. IACS has been overwhelmed by the counter suggestions that the Annex IV huge number of comments received Special Area might also apply to cargo ICS continues to co-operate in from shipowners, a large proportion ships which typically have 20 persons an ambitious IMO programme to of which have led directly to proposals on board as opposed to 2,000. There promote the new Ship Recycling for rule changes. While the careful is a danger that such special pleading Convention. In March 2012, IMO attention being given to this feedback by coastal states may gradually serve adopted further guidelines on from industry is very welcome, it to erode the concept of a truly global implementation for Parties supported seems that the finalisation of the new regulatory framework. by guidelines for the authorisation rules, so that they may be submitted of ship recycling facilities. It is very to governments at IMO (for use Ship Recycling much hoped that these will now be with the IMO Goal-based Standards applied by those governments with initiative) is now likely to be delayed ICS remains firmly committed to the authority over the vast majority of until 2013. early entry into force of the IMO facilities which are located in Asia. (Hong Kong) Convention on the The early identification of sound Closely related to the IACS CSRs, IMO Safe and Environmentally Sound recycling facilities should greatly continues to finalise arrangements Recycling of Ships, not least through assist efforts by shipowners to meet for the implementation of the the promotion of the inter-industry their responsibilities on a voluntary 2010 amendments to the SOLAS Convention concerning the new 19 ‘Goal-based Standards’ (GBS) for the construction of bulk carriers and oil tankers of 150m or over in length. It has now been resolved that class societies should pay for the GBS verification process, but questions remain as to whether there is an adequate number of suitably qualified auditors.
In China, in October 2011, the Chairman led an ICS delegation to the latest round of ‘Tripartite’ discussions about shipbuilding standards with representative organisations of shipowners, classification societies and shipyards. Topics considered included: measures to reduce CO2 emissions including the application of the EEDI and requirements to ensure the provision of adequate ship’s power; the challenges presented by the implementation of the IMO Ballast Water Management and Ship Recycling Conventions; and the review being undertaken by IACS of its Common Structural Rules. ICS will be co-ordinating the arrangements for the next Tripartite meeting to be held in Korea in November 2012.
Cargo Safety The transport of goods by ship may sometimes involve a high degree of physical risk due to the dangers presented by the harsh conditions that often prevail at sea. For the most part these are risks that can be successfully and safely managed by ship operators and their crews. However, such risks can be seriously multiplied when insufficient care is given to the safe loading of cargoes, a factor which is sometimes beyond shipowners’ direct control. While IMO has been very successful with respect to ensuring that shipbuilding standards and Representing the Global Shipping Industry
20 safe navigational procedures are widely Meanwhile, container shipping measure would help to address wider enforced by governments, the rigorous companies continue to be concerned security concerns about the content of application of IMO standards does not by the incidence of shippers providing containers. In a welcome move, the always extend so effectively to those incorrect container weights, and International Association of Ports and actions that occur far beyond the the need to ensure that marine Harbors (IAPH) gave its support to this ship/port interface. terminals always verify the weight of initiative at the end of 2011. loaded containers against the cargo These fears have recently been brought manifest, prior to loading on board Disappointingly, for reasons not home in a most disturbing manner. ship. Following a proposal to the IMO entirely clear, some governments There is now very serious concern (and Maritime Safety Committee made by have so far been lukewarm about the anger) throughout the industry about ICS and the World Shipping Council industry proposal to amend the SOLAS the recent loss of several ships carrying (WSC), IMO has been considering how Convention and it remains to be seen nickel ore/iron ore fines loaded in India, it might establish a new international how the concept will be taken forward the Philippines and Indonesia, apparently regulatory requirement to address this during 2012. But in the absence of a due to cargo liquefaction causing problem. requirement that container weights cargo to shift dramatically. Some declared by shippers are verified cargoes, it seems, are being deliberately The industry’s aim is that all exported by terminals it seems likely that a misdeclared. Especially upsetting was cargo containers should have their substantial number of containers will the tragic loss of 22 seafarers on the weights verified, and that this continue to be misdeclared and that ‘Vinalines Queens’ after loading a nickel information should be confirmed overweight containers will continue ore cargo in Indonesia, in December by the marine terminal upon receipt, to pose a serious risk to safe ship 2011. It must be stressed that such and before vessel loading, and made operations, to ships’ crew, and to other problems are not confined to Asia, with available to the ship operator so it personnel in the transport chain. bulk carrier operators reporting that can be used for stowage planning. the water content of iron ore cargoes is As well as improving safety, such a being similarly misdeclared by shippers in Brazil. Total losses 1994-2011 by number of vessels (over 500 GT) Source: IUMI ICS acknowledges that the issues are 200 complex, but the root of the problem would seem to be the refusal of some 180 shippers to allow the appointment of independent surveyors to conduct 160 cargo testing in accordance with IMO requirements, plus the commercial 140 pressure placed on Masters to accept potentially unsafe cargoes at what are 120 often remote locations. The prevention of similar incidents is an utmost priority. 100 In co-operation with IMO, Intercargo (which represents bulk carrier 80 operators) the International Group of 60 P&I Clubs, and the governments of those nations where problems seem to 40 exist, ICS is endeavouring to help find a solution that will assist shipowners 20 and Masters to resist any pressure to accept unsafe cargoes. 0 ‘94 ‘95 ‘96 ‘97 ’98 ‘99 ‘00 ‘01 ‘02 ‘03 ’04 ’05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 Tanker Safety 21
In 2012, IMO will be approaching the end of a major review of tanker safety that is set to result in some important regulatory changes. This was in response to a major report by an Inter Industry Working Group on Fires and Explosions on Board Tankers, to which ICS contributed with the Oil Companies International Marine Forum (OCIMF) and Intertanko, and which was presented to IMO in 2007 following a sequence of sometimes fatal explosions on tankers.
ICS has played an active part in the discussions at IMO on the extension of the practice of ‘inerting’ cargo tank atmospheres. At a meeting of the IMO Fire Protection Sub Committee in 2011, an important decision was made with respect to the proposed new mandatory requirements for the inerting of chemical tankers. The new carriage requirements will apply to new ships over 8,000 dwt. In conjunction with the International Parcel Tankers Association (IPTA), ICS had highlighted the environmental impact of operating IG equipment, and had indicated that a carriage requirement for sub 5,000 dwt chemical tankers could be problematic. The IMO decision is therefore compatible with the ICS position. Subject to the adoption of the new regulations by the Maritime Safety Committee in May 2012, this development will be addressed in a new edition of the ICS Tanker Safety Guide (Chemicals) which ICS intends to finalise in 2013.
ICS fully supports the proposals to amend SOLAS to provide for the application of inert gas (IG) to new oil and chemical tankers above 8,000 dwt. It should be noted, however, that IMO decided that the possible extension of new measures to existing tankers of less than 20,000 dwt would only be 22 considered in the light of experience governing international waterways gained following introduction of IG as enshrined in the United Nations on new ships of 8,000 to 20,000 dwt. Convention on the Law of the However, a serious explosion in Korea Sea (UNCLOS), so that individual in January 2012 which involved a small ships are not charged for safety chemical tanker might put renewed services. However, this has had to be pressure on IMO to accelerate its reconciled with the challenge faced consideration of IG for existing ships, by the littoral states of Indonesia, as might a major fire on board a Malaysia and Singapore in financing chemical tanker that occurred in navigational safety. the Gulf during March 2012 (which involved the additional drama of local ICS has conducted a detailed survey of ports refusing to provide a place of incident reports which it is anticipated refuge for the stricken ship, contrary will result in the development to IMO Guidelines). of proposals to enhance the management of traffic in the Straits. It is important to recall that a In October 2011, ICS presented the disturbing conclusion of the original report’s findings to the maritime industry report that informed the IMO administrations of the littoral states at review was that otherwise competent a meeting in Kuala Lumpur. and qualified seafarers are still prone to bypass accepted procedures Only a very small proportion of during cargo operations, and that transits result in accidents or near this had been a factor in a number misses. However, the ICS survey of sometimes fatal explosions on has identified heavy shipping traffic, tankers. The solutions are complex, inappropriate speed and the loss of involving matters that do not always situational awareness as significant readily lend themselves to prescriptive factors that need to be addressed. regulations, such as how to further The ICS report praises the skill and inculcate a genuine ‘safety culture’ professionalism of those managing, amongst ships’ crews, which the new operating and navigating ships in edition of the ICS Tanker Safety Guide the Malacca and Singapore Straits. Chemicals will seek to address. However, it is imperative that safety continues to be prioritised. ICS Malacca and Singapore Straits has therefore also suggested that improvements could be made with Each year there are more than respect to the location of pilot 70,000 transits by ships through the boarding areas and the timing of pilot Straits of Malacca and Singapore, departures. There is also concern which is one of the world’s most about the understanding and use of strategically important international navigation systems such as ECDIS, AIS waterways, linking the Far East to the and radar, both at sea and ashore. Indian Ocean, the Middle East and Of the incidents examined, which Europe. While wishing to help ensure involved a range of vessels from tugs navigational safety and environmental to tankers, 68% resulted in collisions. protection of the Straits, the long standing objective of ICS has been to Encouragingly, the littoral states have encourage the maintenance of the welcomed the ICS report and are principles of freedom of navigation already taking measures to further Representing the Global Shipping Industry
23 Representing the Global Shipping Industry
24 improve navigational services in the technical specifications of various coverage and ECDIS operating Straits. In conjunction with ICS, it shipboard devices. In particular, ICS anomalies, ICS is also questioning is hoped that they will make a joint is still seeking to ensure that national proposals by Australia (and other submission to IMO, advising on the authorities will not regard Virtual Aids governments) to amend the SOLAS current status of this important work. to Navigation as a cheaper means Convention with the effect of of providing statutory services, and prohibiting the operation of ECDIS Meanwhile, although it has taken that they continue to be seen as a in the Raster Chart Display System somewhat longer than expected, complement rather than a replacement (RCDS) mode. There are also worries the littoral states are about to start for physical aids to navigation. about the ambiguity of suggested new conducting sea trials in the Straits with rules on updating relevant hardware respect to a Marine Electronic Highway A pressing issue concerns arrangements on board that could imply that ship (MEH), although a number of issues for the introduction, in July 2012, of operators might constantly have to need to be resolved such as whether the new mandatory IMO requirements replace very expensive equipment. an AIS component will be incorporated. for ECDIS (Electronic Chart Display While it is ICS’s intention to request and Information Systems), which ICS With the carriage of ECDIS about to that ships actively participate in these has long supported provided that become mandatory, ICS continues to trials, this will not be possible until the industry’s definition of ‘sufficient highlight the importance of training detailed planning is complete and Electronic Navigation Chart (ENC) seafarers in its use. ICS has therefore the infrastructure is fully in place. availability’ can be met before the contributed to the production of ICS has stressed the importance of phased-in carriage requirement guidance on issues of competency and standardisation and interoperability becomes effective. ICS has been training which has been co-ordinated between shore based components closely monitoring progress at by the Nautical Institute. ICS has also of e-navigation in order to avoid the International Hydrographic submitted its own detailed proposals shipping having to communicate with Organization (IHO) towards meeting on ECDIS training requirements to the unharmonised e-navigation resources the ENC coverage necessary to make IMO Sub Committee on Standards in different geographical regions. The the mandatory carriage of ECDIS viable. of Training and Watchkeeping which question of free access during the meets in May 2012. These suggest trials to these MEH data services, in In particular, ICS has been engaged best practice recommendations accordance with UNCLOS principles, with the IHO and other interested for the timing of delivery of ECDIS also still needs to be resolved. organisations in discussions over training for both new and existing potential ‘operating anomalies’ that seafarers, taking account of present E-Navigation and ECDIS have been identified with ECDIS. A requirements for upgrading training as test has been developed by IHO that all contained in the 2010 amendments to ICS welcomes the great potential companies have been encouraged to the STCW Convention. of e-navigation for improving use in order to detect such anomalies. navigational safety. However, ICS Disturbingly it has become apparent Training Standards continues to emphasise the need for that not all ECDIS systems may be a ‘user focused’ approach, so that fully effective, with a third of those The competence of seafarers is a e-navigation is not driven solely by tested reportedly failing to display most critical factor in the safe and ideas from equipment manufacturers significant underwater features in the efficient operation of ships, and has or the availability of new technology. ‘standard’ display mode. At least one a direct impact on the safety of life at ICS is currently engaged in detailed manufacturer has confirmed to IHO sea and the protection of the marine discussions at IMO, and also within that earlier versions of its ECDIS will environment. The IMO Convention the International Association of not display some types of wreck and on Standards of Training, Certification Marine Aids to Navigation and underwater obstructions in any display and Watchkeeping for Seafarers Light House Authorities (IALA), mode, necessitating the continued use (STCW) constitutes a comprehensive about the implementation of IMO’s of paper charts. set of regulations intended to e-navigation strategy. This includes maintain the highest standards of user needs and services, and the In view of concerns about full ENC competence globally. In particular, the 25
STCW Convention places important require existing ratings to undergo in refresher training for qualified responsibilities on maritime employers. order to comply with their minimum seafarers, as well as the introduction safe manning requirements. of detailed standards of competence In January 2012, wide ranging for the new grade of Able Seafarer amendments to the STCW From January 2013, all new seafarers mentioned above. There are also Convention entered into force, commencing training will be required new competence tables and training having been adopted by a Diplomatic to do so in accordance with the new requirements for personnel on oil and Conference in Manila in June 2010. training and competence standards chemical tankers and gas carriers. With immediate effect, companies are in STCW 2010. However, until 2017 now required to comply with the new governments may continue to renew Although not a direct responsibility STCW minimum rest hour provisions and revalidate existing certificates of companies, the industry will wish for seafarers (see page 27). Many of in accordance with current STCW to ensure that as many governments the other new requirements will be provisions which applied immediately as possible comply with the revised phased-in between now and 2017. prior to January 2012. requirements to report to IMO the actions that have been taken to Some governments are now expected Numerous amendments were implement the new STCW standards. to begin applying the new STCW adopted by IMO to take account This will be necessary, by July 2013, if requirements on a national basis, of recent technical developments governments wish to maintain a place such as enhanced five yearly refresher requiring new shipboard skills, such on the IMO ‘white list’ of nations training, or the new mandatory as the use of Electronic Chart Display that have demonstrated continuing requirements for the on board and Information Systems (ECDIS) or adherence to STCW standards, training of ratings to be documented. the need to give more emphasis to so as to avoid port state control This includes training for the new environmental management. But difficulties for their ships, or flag state STCW grades of Able Seafarer Deck the changes also cover such matters recognition problems for seafarers and Able Seafarer Engine, which as new training requirements for working on foreign ships to whom many flag states are expected to leadership and teamwork, enhanced they have issued STCW certificates. 26 ICS anticipates that there may be a need to clarify the interpretation of how some of the new standards are to be applied, for example with regard to how new refresher training should be implemented, delivered and assessed or when the new security training requirements enter into force. There is already evidence that some maritime administrations may be intending to apply the new requirements over zealously.
The overriding objective of ICS and its member national shipowners’ associations is that the standards required by the STCW Convention, as amended in 2010, are put into effect as soon as possible, and that the highest standards of seafarer competence will continue to be maintained worldwide. In 2011, ICS therefore published a new edition of the ISF Guidelines on the IMO STCW Convention to advise shipping companies and shipboard personnel of their fundamental obligations as required by the ‘Manila amendments’. As well as providing advice on compliance, the Guidelines also give background information on the philosophy underlying the competence-based approach to training which the STCW Convention seeks to promote.
In 2012, ICS aims to complete its ambitious schedule of revising its widely used ISF on board training record books to take account of the Manila amendments. Updated On Board Training Record Books for deck and engine ratings (including the grades of Able Seafarer Deck and Engine) have already been published, and revised training record books for deck and engine officer trainees should be published in the first half of 2012. ICS/ISF is currently in discussion with major labour supply nations such The rationale for the new STCW records of the hours of work and 27 as the Philippines about the use and requirements, which were adopted rest on board ship by using the ISF approval of the updated books. in 2010, was to ensure that the Watchkeeper software, which, as IMO requirements are compatible well as producing individual seafarer’s As a result of the STCW amendments, with those contained in the ILO records in the format recommended employers should now generally have Maritime Labour Convention (MLC) by ILO and IMO, allows companies and far greater confidence in the validity once it enters into force. The task crews to ensure that they comply fully of seafarers’ certificates, regardless of IMO was complicated because with both the ILO and IMO limits. An of the country of issue. This is not the regimes adopted by IMO and upgraded version of ISF Watchkeeper to say that questions about the ILO were developed for different Version 3, which allows account to be quality of training in many training purposes. STCW prescribes minimum taken of the new IMO STCW rest hour institutes have been eradicated rest hours from the safety perspective, limits, was launched during 2011. completely. However, there is now while the ILO Convention also takes a clearer sense that all seafarers account of social issues, such as the Employment Relations working internationally are part of point at which additional payments the same global profession, in which for overtime should normally be An unusual feature of international the paramount importance of safety made and the extent to which work shipping, which observers from of life at sea and the protection of hours may be subject to negotiation outside the industry sometimes find the marine environment is far more between employers and unions in surprising, is that there is a powerful widely recognised. collective bargaining agreements - and global seafarers’ trade union issues outside the remit of IMO. in the form of the International Work Hour Regulations Transport Worker’s Federation. The ICS is satisfied that the changes to ITF has a direct impact on seafarers’ The prevention of fatigue amongst minimum rest hours agreed by IMO employment and working conditions ships’ crews and its potential impact are fully compatible with the ILO on a worldwide basis. Whether on safety is a major priority for requirements, although in practice employers like it or not, the ITF is the industry and its regulators. In they are somewhat stricter. In reality, probably as relevant today as when January 2012, as a result of the given that the STCW amendments it was founded over 100 years ago, entry into force of Chapter VIII of have already entered into force although the employment conditions the IMO STCW Convention, new they are likely to become the enjoyed by seafarers in 2012 are of and stricter regulations came into default regime for port state control course greatly improved and compare force governing seafarers’ hours of inspectors. An important aspect of extremely favourably to those which rest. The minimum rest that must STCW 2010 is the so called ‘Manila they would receive in similar jobs be received in any 7 day period exception’ clauses which continue to ashore. is now 77 hours rather than 70 permit occasional deviation from the hours and the flexibility previously normal minimum rest hours provided At the 2011 Annual General Meetings permitted by the ‘2 day derogation’ compensatory rest is provided. While of ICS and ISF, the decision was taken rule under the IMO rules has now lacking the flexibility of the old ‘2 to fully integrate the two associations. been removed so that seafarers must day derogation’ rule, this will allow However, the International Shipping always have 10 hours rest in any some flexibility during periods of peak Federation is the identity which ICS 24 hour period with no exceptions work load, particularly important for will continue to use when addressing (apart from during emergencies). A short sea operators. However (with labour relations questions as a most important requirement is that the exception of emergencies) all ‘partisan’ employer’s organisation. shipping companies are now required seafarers are now prohibited from As part of a major strategic review to maintain, on a mandatory basis, being on duty for more than 14 hours which led to the decision to integrate individual records of seafarers’ hours within any 24 hour period. ICS and ISF, one of the important of work and rest that may be subject issues identified was the need to to inspection by port state control. Many companies are now ensuring strengthen dialogue with ITF at both that they are maintaining accurate strategic and working levels. The aim of member national shipowners’ associations, which have their own relationships with their national trade unions that are affiliated to ITF, is to be actively co-operative on non- contentious practical matters, but to stand firm when required.
ISF has a long standing institutional role with ITF as its official ‘social partner’ at the International Labour Organization (ILO), and has common cause with ITF national union affiliates on many issues such as piracy and the unwarranted criminalisation of seafarers, as well as matters relating to the regulation of safety and high quality training. In the sphere of employment relations, however, the characteristic relationship between ISF and ITF has sometimes been more confrontational, primarily due to ITF’s ‘Flag of Convenience Campaign’ against open registers, and its insistence that ship operators pay ITF minimum wage rates in the face of the threat of boycott action by its dock worker affiliates.
In recent years, however, less emphasis perhaps than hitherto has been given to this more difficult aspect of relations with ITF. In part this has been due to the positive focus given by both sides to the successful development of the ILO Maritime Labour Convention and its subsequent implementation. The relationship between ISF and ITF has also evolved due to the emergence of the International Maritime Employers’ Committee (IMEC), which comprises individual companies, and is now an associate member of ISF/ICS, and the establishment of the International Bargaining Forum which conducts international wage negotiations with ITF. ISF’s historic refusal to negotiate directly with ITF about seafarers’ terms and conditions, which is a tonnage threshold has already been of the ISF Labour Affairs Committee, 29 matter for individual companies achieved and companies therefore Arthur Bowring (Hong Kong) served and their national associations, is need to be ready to ensure full as the employers’ spokesman, therefore less of an issue. Relations implementation and compliance with supported by 25 delegates from with ITF have also improved following the MLC standards. national shipowners’ associations. the resumption of discussions at the ILO Joint Maritime Commission about The ILO MLC addresses a wide The vast majority of companies a revision of the ILO Minimum Wage range of matters including, amongst should not have any difficulty for Able Seafarers (see page 30). others, the obligations of shipping complying with the substance of companies with respect to seafarers’ the Convention, since this is largely In May 2012, in order to explore contractual arrangements, the derived from existing ILO maritime means of further improving responsibilities of manning agencies, standards and accepted good co-operation, ISF held a high- working hours, health and safety, employment practice. However, the level meeting between senior crew accommodation, catering enforcement mechanism is new, and representatives of national standards, and seafarers’ welfare. it will be important to avoid teething shipowners’ associations and ITF As an official social partner, under problems as some of the more union affiliates in London, the the tripartite ILO process, ISF was detailed requirements are applied and first such meeting outside of the responsible for negotiating the text of interpreted. institutional setting of the ILO for the Convention on behalf of maritime over 10 years. It is hoped that this employers, with governments and During the course of 2012, ISF will be first of several meetings at seafarers’ trade unions. ISF therefore expects to publish an updated edition which ISF and ITF members will be has a very special interest in wanting of its Guide to the MLC. The first able to identify issues on which they to assist the Convention’s smooth edition was produced shortly after can collaborate more effectively, implementation. the MLC was adopted in 2006, and while maintaining dialogue on those sought to introduce ship operators matters on which there may still be An important aspect of the to their obligations under the new fundamental differences of approach. Convention’s enforcement will be the regime. In the intervening period, issuance by flag administrations of much work has been done by Maritime Labour Standards Maritime Labour Certificates, usually several ILO tripartite working groups, following inspection by a Recognized comprising governments, unions and For the large majority of seafarers, Organization such as a classification national shipowners’ associations to employment conditions at sea already society, appointed by the flag state. ensure that all concerned understand match, or in most cases comfortably There is also a separate requirement their responsibilities. This second exceed, those that they could obtain for ships to maintain a Declaration edition has therefore been updated in shore based employment at home. of Maritime Labour Compliance. to take account of these recent However, the maintenance of good Importantly, compliance with the clarifications from ILO. Additional employment conditions is crucial to the MLC will be subject to port state guidance has also been added in industry’s ability to attract and retain control as well as to inspection by flag order to help maritime employers the competent and well qualified administrations. apply the ILO standards in a practical seafarers on whom it depends. manner. In December 2011, in Geneva, Following ratification by a growing ISF co-ordinated shipowner It is hoped that the second edition number of flag states including the representation at a major tripartite of the ISF Guide will prove useful major open registers (26 of the 30 meeting of governments, employers in assisting shipping companies in nations required, at the time of and unions which agreed terms of preparing for the implementation of writing) the ILO Maritime Labour reference for a Special Tripartite the MLC by governments, whether Convention (MLC) is expected to Committee that will oversee proposals in their capacity as flag states, port enter into force globally very soon, for amendments to the ILO MLC once states or labour supply nations. ISF’s probably during 2013. The required it enters into force. The Chairman intention is to promote and help Representing the Global Shipping Industry
30 deliver the global level playing field of decent maritime labour standards that both the shipping industry and seafarers require.
ILO Minimum Wage About two thirds of the world’s 1.5 million merchant seafarers come from developing countries. While wage rates are commonly affected by a seafarer’s country of residence, the shipping industry generally provides high levels of remuneration to all those employed at sea. Indeed, the shipping industry is probably unique in that it has a mechanism for recommending minimum acceptable international wage rates.
The Minimum Wage for Able Seafarers is agreed by the International Labour Organization (ILO) Joint Maritime Commission (JMC) which comprises representatives of national shipowner’s associations and seafarers’ unions. ISF (the identity used by ICS when acting as an employers’ organisation) is the co-ordinator of the Employers’ Group at the JMC while the International Transport Workers’ Federation (ITF) co-ordinates seafarers’ representation. Unlike other ILO institutions, the JMC is bipartite and does not involve governments.
In January 2012, the ILO Minimum ILO headquarters in Geneva Wage for Able Seafarers increased to US$555 a month from the previous figure of US$545 which had come 2013 and US$585 for 2014, with wage figures are realistic given the into effect in 2009 in line with an no further revision expected to take continuing uncertainty created by earlier schedule of agreed increases. effect until at least 2015. This will the global economic crisis. ISF had This latest increase followed an hopefully provide employers with the previously explained to ITF that agreement by the JMC which met in stability they need during the difficult employers simply could not agree Geneva at the end of April 2011. economic circumstances anticipated to any immediate further increases. In reality, the JMC has agreed a four in the years ahead. However, while many unions year deal whereby the ILO minimum recognised the need to help safeguard wage will increase to US$568 for ISF believes that the new ILO employment for seafarers, some unions were clearly disappointed by Asian Developments to contract with local Ship Pollution 31 this response. The JMC therefore Response Organisations (SPRO) agreed to adopt a schedule of To a certain extent, some parts of in order to enter Chinese ports increases that will apply until 2015. the shipping industry have been commenced from 1 January 2012 and shielded from the effects of the global was enforced in all ports from March. ISF remains strongly committed to economic slowdown by continuing In November 2011, at the invitation the principle of the ILO Minimum growth in Asia, driven especially by of the International Group of P&I Wage recommendation which is now China’s inexorable expansion and Clubs, ICS and representatives of the referenced in the new ILO Maritime its seemingly insatiable demand for China and Hong Kong Shipowners’ Labour Convention, although it has in raw materials. However, in early Associations met with the Chinese fact existed for over 50 years. While 2012, China announced its intention Maritime Safety Agency in Beijing. it is only recommendatory, and is to subtly rebalance its economy, Shipowners’ concerns about the not directly relevant to other seafarer with less emphasis on massive ability to comply with the requirement grades, it has a strong moral authority further infrastructure growth and a to pre-contract with an approved and is particularly important for redirection of resources into increased SPRO by the initial 1 January 2012 employers in developing countries. personal consumption. While China implementation date were conveyed, The ILO Minimum Wage also is still expected to continue to grow at along with concerns about the very influences many collective bargaining an impressive rate, this shift in policy high SPRO retainer fees that had been agreements, including those enforced could eventually have implications quoted. The initial implementation by ITF, and is sometimes referred to in for the future expansion of China’s process has been problematic but it is legal rulings. demand for shipping services. In hoped that it will be smoother going the longer term, moreover, it has forward. The ILO Minimum Wage is substantially also been suggested that as wage higher than that paid for comparative differentials between Chinese It is generally accepted that the centre work ashore in developing countries. workers and those in other emerging of gravity of the shipping industry Moreover, the actual minimum wage economies reduce, there may a is moving towards Asia. A positive is significantly higher, typically perhaps relocation of manufacturing towards development is that Asian maritime 50% more, once overtime hours (fixed Latin America and, in particular, to administrations have become at a minimum of one and a quarter Mexico with its close proximity to increasingly confident and articulate times basic pay) and other mandatory the United States. More immediately, when presenting their views at fora ILO requirements, such as payments however, with most of the Eurozone such as IMO, not least on issues such for leave entitlements, are taken into now in recession the current concern as the regulation of CO2. In particular, account. It is also only a minimum. is that this is likely to have a direct ICS has found common ground with Most ratings from developing impact on maritime trade as the China with respect to its emphasis countries receive significantly more, import of Chinese products is reduced. on efficiency improvements, as while officers receive substantially opposed to setting absolute targets more, with differentials between On the regulatory front, Asian for emission reductions as favoured officers from OECD and developing nations generally have a track record by the EU. India has also made an countries continuing to narrow. of being less inclined towards the important contribution to the debate adoption of unilateral shipping by warning of the dangers of CO2 regulations at variance with regulation being applied as a form of international standards agreed by green protectionism. In a welcome IMO. However, one issue that ICS move, in December 2011, India has been following closely has been ratified Annex VI to the MARPOL the China Pollution Regulations. The Convention governing atmospheric Regulations came into effect in 2010 emissions, which also includes the and introduced new operational and technical and operational measures liability requirements for shipowners. for CO2 reduction agreed by IMO in Implementation of the requirement July 2011. Representing the Global Shipping Industry
32 As reported elsewhere, ICS has single currency will weather the storm welcomed the pragmatic approach and hold together in the longer term. of Asian authorities towards While the current recession in the the development of maritime Eurozone will almost certainly have a competition regulation. This includes negative impact on global shipping the adoption, in June 2011, of markets, if the Eurozone crisis worsens guidelines concerning non-rate fixing the effect on the world economy could agreements such as consortia, by the be very serious indeed. More Asia Pacific Economic Co-operation immediately, however, the European forum (APEC) which is becoming debt crisis also means that a major increasingly active on maritime issues. source of ship financing has virtually dried up, with most of the major ICS continues to enhance its good shipping banks being located in Europe. relations with the Asian Shipowners’ Forum (ASF) whose membership Despite the political and economic comprises national shipowners’ turmoil in Europe, the EU institutions associations, many of which also remain committed to taking forward belong to ICS. As a sign of this their agenda with respect to maritime increasing co-operation, ASF has regulation. In co-operation with the participated in recent meetings with European Community Shipowners’ the Consultative Shipping Group Associations (ECSA), ICS seeks to (CSG) of maritime administrations ensure that proposals in Europe remain organised by ICS, while the ASF compatible with the global maritime Secretary General now attends ICS regulatory framework which the Board meetings. In May 2012, in shipping industry requires. Australia, the ASF Annual Meeting will for the first time be held back-to- Notwithstanding IMO’s achievement back with that of ICS. in adopting a package of international regulations to reduce shipping’s CO2 EU Developments emissions, the European Commission is proceeding with the development During 2012, the of regional measures for shipping in situation in Europe is the event that IMO is unable to reach expected to be agreement on Market Based Measures. dominated by the While this decision is disappointing, continuing crisis with respect to the the time scale for the implementation long term viability of the Euro. This of such measures is believed to be has been brought about by the five years, and the Commission is diverging economic circumstances understood to remain serious in its within individual EU Member States, preference for a global solution to not least with respect to increasing be agreed at IMO. Nevertheless, in unsustainable levels of sovereign debt. consultation with ECSA, ICS has EU leaders, in numerous crisis summits, submitted comments to a formal have sought to respond by providing consultation by DG Climate Action, support to failing economies such as disputing the rationale for a regional Greece, as well as pumping huge regime and reiterating opposition to amounts of money into the Eurozone the inclusion of shipping into the EU banking sector as a whole. However, Emissions Trading Scheme (ETS). the jury is still out on whether the In public, the European Commission is still open minded about applying the ETS to shipping. But the application, in January 2012, of a regional ETS to international aviation, has not been a pleasant experience for the Commission which has had to face vigorous opposition from the United States and China, amongst others, who have indicated they may take retaliatory measures such as cancelling orders for European aircraft. It remains to be seen whether the EU will back down with respect to aviation, but if it should do so it is difficult to see how an ETS could then justifiably be applied to shipping, which unlike aviation already has an international agreement in place that will dramatically reduce emissions.
As discussed elsewhere in this Annual Review, other important EU files include: the draft Directive on the implementation of the IMO regulations on sulphur emissions, which may include the extension of Emission Control Areas; its response to the ‘Costa Concordia’ cruise ship disaster, and the implementation of the EU Passenger Liability Directive; and the ongoing investigation by the Competition Directorate of the International Group of P&I Clubs. The continuing commitment of the EU to counter-piracy operations in the Gulf of Aden is also most important and is greatly appreciated by the international shipping industry.
Another most important issue is the current review of the EU State Aid Guidelines for the Maritime Sector which will decide whether to permit the continuation of tonnage tax regimes in Europe. The review is important because EU tonnage tax schemes have provided a model for similar regimes that are now applied by governments throughout the 34 world, and are vital for shipping in continue to seek to implement rules port, and are still subject to legal order for it to operate in what are at variance to both Federal and challenge by the Pacific Maritime volatile and highly cyclical global international requirements. Indeed, Association. However, following markets. However, the review is one characteristic of the Obama US ratification of the IMO MARPOL complicated because it is being Administration that has been a source requirements on sulphur emissions overseen by the Competition of frustration for shipping has been from ships, it is hoped that the Directorate rather than DG MOVE the apparent reluctance of the current temptation for individual US States as has previously been the case, the US Administration to defend Federal to develop their own environmental former perhaps not being so familiar regulations from infractions by US rules will diminish. with the unique circumstances that States. apply to shipping. At the request A particular example of unwelcome of ECSA, ICS is therefore submitting A positive development in April regulation adopted by an individual US comments to the Commission in 2012 was the publication by the US State is that adopted by Massachusetts. favour of the maintenance of the Coast Guard of its final rule making This stipulates that visiting tankers that status quo. on ballast water treatment, which do not elect to comply with certain adopts a ‘kill standard’ for marine additional requirements will be subject US Developments micro-organisms which matches that to financial liabilities in excess of those adopted in the IMO Ballast Water set out in Federal law in the event of Unlike Europe, the US Management Convention. However, a pollution incident. The issue for ICS economy is showing serious questions remain as to has been one of principle, due to the signs that it is beginning whether the US standards for type encouragement that this coercive law to recover, although whether this will approval of equipment (in line with its might give to other US States to take be sustained far beyond the Environmental Technology Verification their own unilateral actions, which Presidential election in November Program), or the ballast water will result in conflicting regulations. 2012 is unknown, as is the extent to sampling standards that will be used In co-operation with other industry which this will feed into increasing to inspect ships trading to the US, will associations, ICS has therefore been demand for shipping. An interesting be consistent with those expected to involved with a legal challenge. The development is that the United States adopted by IMO in 2013. The door is intention of the action was to make is gradually reducing its dependency also still open for the Coast Guard to the US Coast Guard defend its own on foreign energy supplies as it introduce more stringent treatment regulations. Disappointingly, however, dramatically increases its exploitation standards if it is established that the the Coast Guard has so far shown of shale gas. In November 2011, the technology has become available in little interest in doing this for what Administration also announced its the future, which will be of concern are principally assumed to be political proposed five-year plan for offshore to those shipowners investing money reasons. oil drilling which called for the into expensive treatment equipment opening of new areas in the Gulf of now. Moreover, the problem remains Trade Sanctions Mexico and Alaska. Another of some individual US States still interesting ‘known unknown’ is the considering the implementation of One of the major political dramas impact that the expansion of the treatment standards 100 times more being enacted in 2012 is the action Panama Canal (which is due to be stringent than what has been agreed being taken by the international completed in 2014) will have on US at IMO and for which the equipment community in response to Iran’s shipping trades, especially containers. required simply does not exist. nuclear programme. In a worst case scenario, tension in the Middle East In view of the run-up to the ICS is also engaged in the ongoing could lead to closure of the Straits of Presidential elections, legislative saga of California’s unilateral Hormuz through which so much of activity within Congress is expected air pollution rules, which in the world’s oil passes, with dramatic to be limited, although US Federal contravention to UNCLOS apply to effects on oil prices and the recovery regulatory agencies still have a full ships within 24 miles of the US Coast of the world economy. However, the agenda, while individual US States even if not calling at a Californian immediate preoccupation for ICS Representing the Global Shipping Industry
35 Representing the Global Shipping Industry has been the challenge presented by The new EU sanctions announced in reinsurance cover from other EU 37 sanctions legislation. January 2012 extend to the carriage based reinsurers. of petrochemical products and In co-operation with the International crude oil, and will fully apply to any All International Group Clubs have Group of P&I Clubs, ECSA and the existing contracts from May and July included in their rules, in one form Chamber of Shipping of America, ICS respectively. These actually build upon or another, either express sanctions has sought to provide information previous sanctions relating to any to cover termination or exclusion via national associations about the items that might assist Iran’s nuclear provisions for imprudent or improper impact on shipping companies of programme in terms of the territory trading. The effect of these rules sanctions against Iran announced by and the entities to which they apply. is to withdraw or exclude cover the European Union and the United In short, the sanctions apply to in relation to sanctions offending States. It remains to be seen whether shipowners incorporated or domiciled voyages. In other words, if a shipping other important trading nations will in EU nations, to ships registered in company undertakes such a voyage introduce similar sanctions. or flying the flag of an EU Member its liabilities will not be insured by the State, and to all vessels, regardless of International Group. There is undoubtedly a need for place of registration, which trade to governments to provide greater clarity EU ports. This restriction will therefore also and uniformity with respect to the have an impact on any compulsory application of sanctions, whether in However, the EU sanctions also apply insurance certification required by the context of Iran or other nations, to insurers within the EU, prohibiting IMO Conventions (while payment such as Syria, to which they might be them from issuing or maintaining for liabilities that are subject to directed. The situation is not helped insurance with regard to any compulsory insurance may also by the fact that governments no sanctionable activity or trade. They be caught by the prohibitions in doubt want their sanctions legislation therefore apply to P&I Clubs (and their the sanctions). As a consequence, to be as ambivalent and flexible in its reinsurers) as well as to hull insurers shipowners in breach of sanctions interpretation as possible, in order to (and their reinsurers), which are may also be violating flag state law, further their foreign policy objectives. incorporated, domiciled or regulated even if the flag state is not connected within an EU Member State. Most with the EU. As well as monetary The sanctions so far enacted against P&I Clubs, and a large proportion of fines, penalties may include detention Iran have an impact far beyond EU or hull insurers, are located in Europe, of the vessel and suspension of the US operators, even for ships flagged while most reinsurance is provided in vessel’s certificate of registry. in and trading to countries outside London or in the United States, where the EU and US. This is because most it will also be affected by the US In April 2012, it was still uncertain marine insurance (and reinsurance) is sanctions. what the exact scope of the sanctions based in London; while US legislation would be. However, the concern will prevent tanker operators that call With specific regard to third party remains that those responsible for in Iran from trading to the US. liability insurance provided by the developing sanctions policy may have International Group of P&I Clubs little understanding of the wider Although many questions raised by (IG), the EU sanctions will also affect consequences for shipping and trade, shipowners have been addressed by vessels that would otherwise fall many of which may be unintended. extensive advice produced by the outside the jurisdiction of EU Member International Group of P&I Clubs, States, even if such vessels have there is still some uncertainty as to their P&I insurance with a non-EU the precise scope of the sanctions, registered P&I Club. This is because particularly with regard to their such a Club (if an IG member) will be impact on compulsory insurance unable to obtain access to reinsurance cover as required by the Civil Liability from the EU based Clubs via the IG (CLC) and Bunkers Conventions for oil Pooling Agreement. A non-EU Club pollution. will also be unable to access market Representing the Global Shipping Industry
38 LLMC Increases In April 2012, the IMO Legal Committee agreed significant increases to the limits of liability under the Limitation of Liability for Maritime Claims Convention 1996 (LLMC). Under the IMO ‘tacit amendment’ procedure, the 51% increases will come into effect in 2015. In addition to general maritime claims, the LLMC limits also apply to claims under IMO Conventions governing liabilities for bunker spills (other than claims covered by the Civil Liability Convention) and wreck removal once the Nairobi Convention enters into force.
The increases were made at the initial request of Australia in response to the ‘Pacific Adventurer’ bunker oil spill in Queensland in 2009 where the clean-up costs were thought to have exceeded the applicable limitation amount. Australia had support from 20 co-sponsoring nations, which meant that the fact the limits would be increased was probably never in doubt. In the event the real debate was about the quantum of the increases. Australia had made it clear from the outset that it was seeking the maximum amount possible via the tacit amendment procedure, namely 6% per year calculated on a compound basis from 1996. However, Japan was firmly of the view that the increases should not be higher than the rate of inflation during the relevant period (some 2.7% per year compounded).
Throughout the debate at IMO over the past two years, ICS observed that the industry was open to a discussion of increases, but that these had to be based on the criteria specified in the ‘tacit amendment’ procedure, namely the claims history, inflation, and the soon following ratification by EU continue, and it is still unclear what 39 effect on the cost of insurance. Member States) not least the need the rates will be and whether larger for certification of insurance cover for ships will be covered. Some nations continued to express terrorism and war risks. doubt as to whether any increases Although the IG P&I Clubs have were justified in view of the statistics In co-operation with ECSA, and the now decided to issue certificates of compiled by the International Group International Group of P&I Clubs insurance for the non-war risks arising of P&I Clubs. These showed that (IG), ICS is also seeking to address under the EU PLR and the IMO Athens only a small number of claims had the similar problems that may arise Protocol, they have yet to decide on not been compensated fully under as a result of the enforcement of the the provision of IG Club cover for the the present limits. There was also EU Passenger Liability Regulation war/terrorism risks. a robust discussion about how (PLR) with which ship operators must inflation should be calculated with comply from 31 December 2012, and In October 2011, ICS met with EU many states supporting the Japanese which broadly mirrors the IMO Athens governments to obtain their views position. It was acknowledged that Protocol requirements. on the structure of the insurance it was not possible to quantify the vehicle proposed by Marsh Ltd, and effect of increased limits on insurance The issues are complex, but the from the limited responses received premiums because that would depend thorny issue of terrorism cover has it would seem that governments on future claims. But if a major hampered implementation of the IMO will accept it, notwithstanding the incident now occurs that is subject to Protocol since IMO Members States practical difficulties that might arise the higher limits, then this is likely to first rejected industry arguments for claimants in the aftermath of a be reflected in increased premiums that terrorism is an attack on society casualty, such as the need to deal soon afterwards. at large and that the costs should with a multiplicity of insurers for therefore be borne by governments. their individual indemnities. The ICS believes that the final increases Instead IMO decided that the provision governments’ approach appears to agreed by IMO are a reasonable of such cover should be left to the be guided by a general understanding calculation. It remains to be seen market. that such cover might not be available what economic impact the new limits elsewhere and that this is the best that will have on the industry after they The potential liabilities to which the can be obtained from the commercial come into effect in 2015. However, it Clubs might be exposed under the market. But it is uncertain whether is to be hoped that the increases will Athens Protocol are huge, perhaps they are fully au fait with all of the ensure that the principle of limitation in excess of US$5 billion per ship potential complexities involved of liability will be maintained, which is in a worst case scenario. The P&I vital if shipowners are to continue to Clubs communicated their difficulties Given the complication of having have access to affordable insurance. It in providing cover for terrorism to have separate terrorism cover, is also hoped that the new limits will (which could have implications for the industry is trying to persuade not deter less developed nations from the insurance they provide to non- governments to develop a common subscribing to the LLMC. passenger shipping) and a compromise position with regards to port state was arrived at by the IMO Legal acceptance of insurance certificates. Passenger Ship Liability Committee in 2006, whereby cover ICS and ECSA are also encouraging for terrorism could be limited to governments to ensure that when Questions relating to passenger US$500 million. However, this IMO ratifying the Athens Protocol they liability insurance are likely to receive compromise was underpinned by a make the important reservation, as additional attention as a result of the scheme proposed by the insurance agreed and recommended by IMO, ‘Costa Concordia’ cruise ship tragedy. broker Marsh Ltd. While Marsh has with respect to shipowners’ liability However, the immediate focus of ICS advised its scheme will be up and for war and terrorism risks. However, is the implications of the entry into running in time for the application some detailed discussions will be force of the 2002 Protocol to the IMO of the EU PLR at the end of 2012, needed between now and the end of Athens Convention (which is expected questions about the scheme’s viability the year. Representing the Global Shipping Industry
40 Environmental Salvage Awards In co-operation with the International Group of P&I Clubs, ICS continues to lead shipowner representation on salvage issues, particularly in relation to the smooth operation of the Lloyd’s Open Form and SCOPIC (special compensation) regime.
ICS is maintaining its firm opposition to proposals from the International Salvage Union (ISU) for a new separate award for ‘environmental salvage’ when salvors have carried out operations in respect of a ship or cargo which has presented a threat of damage to the environment. ICS is deeply sceptical about the proposal, believing that salvage services are already generously rewarded under the present system.
A working group established by the Lloyd’s Salvage Group, in which ICS participates, has reached a stalemate following the ISU’s inability to demonstrate that its proposal would improve salvage response, or deliver cost savings to those paying for salvage services. However, the ISU has succeeded in persuading the Comité Maritime International (CMI) ,the international association of maritime lawyers, to give consideration to its proposals for a revision of the IMO Convention on Salvage and also to amend the Lloyd’s Open Form (LOF).
Despite the lack of industry consensus, a CMI working group has already started work on possible amendments to the LOF. ICS regards this development with particular dismay since it appears to involve the discussion of proposals to amend what in effect is a private contract without the involvement of at least one of the parties, whilst regimes such as the Hamburg and 41 bypassing the long standing forum Hague/Visby Rules, taking account of already established to carry out such modern multi-modal transport and work which is the Lloyd’s Salvage ‘door to door’ delivery practices. Group. In March 2012, ICS and the International Group of P&I Clubs ICS recognises that the new rules wrote formally to CMI, setting out may not be perfect, and in some shipowners’ concerns in the strongest respects are overly complex. However, possible terms. maintenance of the status quo is not a realistic option. If the Rotterdam The ISU’s proposals with respect Rules do not take hold then the to environmental awards will United States and the EU will almost be discussed further at the CMI certainly pursue their own regional Conference, in Beijing, in October regimes and the opportunity for 2012 at which ICS will be represented. global uniformity will be lost for Given that CMI does not plan to invite another generation. Following a detailed presentations to be made on thorough and detailed analysis of the these issues by all of the interested Rotterdam Rules, ICS members have parties, it is of the utmost importance therefore concluded that the new that the report of the CMI working regime must be strongly promoted by group is as balanced as possible the shipping industry in order to avoid and reflects the division within the the risk of a proliferation of regional industry. The CMI should also bear cargo liability regulations. in mind that amendments to IMO Conventions have to be proposed by Encouragingly, the United States governments, and that the IMO Legal appears to be committed to the Committee is unlikely to entertain early ratification of the Convention. proposals that fail to demonstrate any With the full support of US carriers compelling need. and shippers, the State Department has prepared a file to be put before ICS does not believe that the Congress which is expected to proposals concerning environmental take this forward after the 2012 salvage enjoy the support of most Presidential Election. This will almost national maritime law associations, certainly give critical momentum to and in March 2012 ICS published a the process of ratification worldwide, detailed position paper reiterating the with China and other Asian nations arguments as to why they should not likely to wish to align their regimes be supported. with the US. Meanwhile, although some parts of the European Rotterdam Rules Commission, who may have been influenced by the European Shippers’ ICS continues to promote the Council (ESC), have been ambivalent ratification of the Rotterdam Rules about the UNCITRAL Convention, on cargo liability which were for the moment at least the EU has formally adopted in 2009 by the put aside plans for a regional cargo United Nations Commission on liability regime, and many EU States International Trade Law (UNCITRAL). are proceeding towards ratification. The Rotterdam Rules are intended Moreover, the doubts about the to replace outdated cargo liability Rotterdam Rules displayed by the ESC 42 are not shared by the Global Shippers’ those parts of the world where they of the antitrust immunity which is Forum which embraces US and Asian are still permitted, ICS policy is to still enjoyed by the international liner shippers. defend the continued existence of industry in US trades. Fortunately, liner conferences and other similar this Bill is now dead and little further While those who were deeply exemptions to competition law such action is anticipated until after the involved in the negotiations, such as discussion agreements. The EU Presidential elections in November as ICS, are clear about the need to Competition Directorate, however, 2012. The FMC has reached no encourage governments to ratify continues to argue forcefully that its firm conclusions as to whether any and implement the Rotterdam Rules, foreign trading partners should follow changes are warranted with respect there still appear to be reservations its unilateral example of making to current US competition regulations in some quarters, including in Asia, shipping companies’ participation in such as the Ocean Shipping Reform about the benefits of the new such mechanisms illegal. Act. However, the FMC study does regime. An ongoing priority for ICS, seem to provide evidence in support in co-operation with local national ICS has therefore welcomed the of maintaining the status quo should associations and bodies such as publication, in February 2012, by there be further calls for the US to the Asian Shipowners’ Forum, is to the United States Federal Maritime follow the example of Europe. explain to these interests why the Commission (FMC) of its detailed Rotterdam Rules should be supported. study of the impact of the EU Meanwhile, in Asia, following on prohibition on US trades. Many of from the decision by Singapore that Competition Issues the FMC’s conclusions appear to its block exemption from competition support the ICS position in favour rules for liner shipping agreements Compliance with competition law of the maintenance of the status will be extended until 2016, ICS has is most important given that even quo with respect to current antitrust welcomed the similar decision by ‘technical’ violations by shipping immunity that applies in non-EU Japan, in June 2011, to maintain its companies can result in penalties trades. Antitrust Immunity System until at amounting to tens of millions of least 2015. Japan has also concluded dollars. In May 2011, most of Based on its examination of the that the EU repeal of antitrust the major international container period 2006-2010, the FMC has immunity has led to increased lines were presented with a concluded that the repeal of the EU volatility of freight rates in European sharp reminder of this when the Block Exemption has apparently not liner trades, as well as a rise in European Commission launched a resulted with any relative decline surcharges levied by individual carriers. dawn raid on numerous company in EU freight rates compared with In addition, the Japanese government offices. Apparently this was to Far East/US trades. In other words, was concerned that the drastic establish that its major shake-up of shippers in EU trades have not been rationalisation of liner services by competition rules in 2008 is being advantaged as a result of the EU individual carriers which has ensued fully complied with. It is understood decision compared to shippers in since the downturn, and which has that the European Commission was Far East/US trades where the EU resulted with a reduction of available not responding to any particular prohibition does not apply. There also services, was partially a result of the complaint; nor is there reason to appears to have been an increase in lines’ reduced ability to co-operate. believe that there has been any non- rate volatility in EU trades, compared compliance. (However, in March to Far East/US trades, and the ICS has welcomed the agreement 2012, the European Commission also FMC suggests that the activities of by the Asia Pacific Economic demonstrated its power by fining discussion agreements that are still Co-operation forum (APEC), in June 14 international logistics companies, permitted in non-EU trades may have 2011, on guidelines on maritime including UPS and Kuehne & Nagel, had a ‘dampening effect’ on rate competition rules, specifically for €169 million for collusion with respect volatility. co-operation agreements which to security surcharges.) do not involve rate setting, such as A Bill introduced to the US Congress consortia. Although a far looser form The above notwithstanding, in in 2010 proposed removal of much of co-operation than conferences, Representing the Global Shipping Industry
consortia have provided stability to markets, helping guarantee the maintenance of scheduled services to more remote destinations and permitting efficiencies such as slot sharing on containerships. In particular, consistent with arguments presented by ICS (and the World Shipping Council) at an earlier APEC consultation meeting in Tokyo, ICS has welcomed the recommendation that filing requirements should be left to the discretion of individual governments, since these are commonly requested by those governments which continue to allow a more flexible approach with regard to co-operation between shipping companies.
A number of other Asian jurisdictions are also reviewing the application of antitrust law to shipping as part of their development of general competition law. The latest country to do this is New Zealand. In September 2011, ICS submitted comments to the New Zealand Productivity Commission and urged the New Zealand government to consider the maintenance of practices permitted in the rest of the Asia- Pacific.
In January 2012, New Zealand released a draft report of its enquiry into international freight transport services which recommends that its exemption for ratemaking or capacity limiting agreements be repealed, but that the exemption for non-ratemaking activities should be retained, conditional on filing the agreements with the Ministry of Transport. Representing the Global Shipping Industry
44
EC Investigation of IG of IG, the Commission having opened therefore emphasised that the mutual P&I Clubs formal proceedings in 2010. The insurance arrangements provided Commission had stated that it was by the P&I Clubs are efficient and ICS firmly believes that the current simply conducting an investigation, cost effective. For their part, the system of mutual third party and that this did not imply that there Commission officials who were then liability insurance provided by the was any proof of infringement. The involved had stressed that they were International Group of P&I Clubs (IG) Commission had also advised that not intent on destroying the system continues to serve the best interests it had opened the investigation on but were interested in the quotation of ship operators and their customers its own initiative and that it had not procedure, release calls, and the extremely well, alongside serving the received any formal complaints. availability of commercial P&I insurance interests of claimants and the general outside the International Group system. public. In particular, the mutual It was originally understood that insurance arrangements provided by the Commission wished to examine In 2011 the Commission sent out the Clubs enable the provision of the whether certain provisions of the IG questionnaires to individual shipping very high levels of insurance required Agreement and Pooling Agreement, companies seeking further information under international liability conventions, notably the Group’s claims sharing on the application of the IG Agreement, under which compensation to and reinsurance arrangements, and also requested detailed claimants is generally paid regardless of might somehow lessen competition documentation and information from fault and without legal wrangles. between the Clubs or restrict the the IG Clubs. However, developments access of commercial insurers or other have been much slower than expected, ICS is therefore closely following mutual P&I insurers to the relevant apparently due to the appointment of the European Commission’s markets. In bilateral discussions with a new team of case handlers. investigations of the activities of the the Commission, ICS and ECSA have Flag State Performance Nevertheless, ICS believes that a Table for 2011 has been modified 45 balance has to be struck between the slightly in order to address feedback In a globalised industry such as commercial advantages of shipowners from governments, including shipping, there is nothing inherently selecting a particular flag and the comments at the IMO Flag State wrong with a regulatory system in need to discourage the use of any Implementation Committee which which the flag which a ship chooses ship register that does not meet its questioned some of the criteria used to fly is different to the country of international obligations. While it is by ICS and whether the data might beneficial ownership. In particular, shipping companies that have primary be presented in a more positive ICS believes that generalised responsibility for the safe operation of manner. distinctions between the performance their ships it is the flag state that must of open registers and so called enforce the rules. However, the purpose of the new traditional maritime flags are neither Table is the same: to encourage helpful nor relevant. Pejorative terms ICS has therefore been a strong shipowners to examine whether a such as ‘flags of convenience’ have supporter of the IMO Member State flag state has substance before using more to do with industrial relations Audit Scheme and has welcomed it and to encourage them to pressure issues of the 1980s than the situation the decision by IMO for the audits to their flag administration to effect any which pertains to 2012. Flag states become mandatory in 2014, once improvement that might be necessary. such as Bahamas, Liberia, Hong the first round of voluntary audits ICS makes no apology for continuing Kong and Singapore are amongst is complete. In March 2012, IMO to subject flag states to scrutiny, in the very best performers in terms finalised a draft of its IMO Instrument the same way that ships and company of their implementation of IMO and Implementation Code, which will procedures are rightly subjected to ILO requirements and port state underpin the mandatory scheme inspection by governments. The control inspection records, while the subject to adoption by the 2013 IMO overriding interest in promoting high ownership profile of many OECD ship Assembly. However, in the interests performing flags is that they are registers now includes large numbers of transparency, ICS believes that the less likely to tolerate sub-standard of foreign owned shipping companies. results of the IMO audits should be operators who would otherwise enjoy published, and that, as a minimum, an unfair commercial advantage over information should be made available the vast majority of fully compliant by IMO as to whether maritime shipping companies. administrations have actually put themselves forward for inspection. Shipping Policy and Free Trade In the meantime, ICS has welcomed the decision of some of the major For the past four years the shipping regional port state control authorities industry has been confronted with to request information as to whether unprecedented economic turmoil. audits have been conducted as part of Much of the industry is still struggling their criteria for targeting inspections. with the serious consequences of a truly massive contraction in economic As a complement to the IMO activity, with global trade estimated Scheme, and as a service to the to have declined by nearly 10% in industry, ICS continues to produce 2009. While trade picked up a little, its annual Shipping Industry Flag especially in Asia, the latest World State Performance Table which Trade Organization projections for collates various data available in the 2012 are not very positive and overall public domain and which can be global trade is probably not much downloaded from the ICS website. improved on the levels that existed However, under the supervision of before 2008. The practice of sound ICS’s member national shipowners’ shipping policy by governments is associations, the presentation of the therefore as important as ever. 46 Shipping policy involves long market based measures for CO2 restrictions by Argentina on ships term engagement by ICS and its emissions. that have called at the islands will member national associations be of great concern because of the in the largely unseen diplomatic ICS has continued to give input, negative precedent that could be activity necessary to help ensure the via national associations, on issues set with respect to the maintenance maintenance of the open markets ranging from problems of market of maritime free trade principles which the shipping industry needs access to government interference elsewhere. to operate competitively and in local markets. The CSG is also a efficiently. Shipping also requires useful conduit for the discussion of Although of little immediate comfort a regulatory ‘level playing field’ sensitive diplomatic issues, such as to those individual companies that and, in view of the great market the treatment of piracy. may still be struggling to survive, one volatility being experienced during consolation is that governments so far the current economic downturn, the In addition to the broader role of appear to have made a determined continuation of the certainty provided the CSG as a forum for discussion effort to avoid the excessive use of by the tonnage tax regimes that of shipping policy and trade issues, protectionist measures, (although in now apply to shipping companies it still maintains its original function early 2012 some backward looking in most countries. In June 2011, as providing a means for the moves were proposed within the ICS made these important points world’s major shipping nations to EU with respect to government (as well as highlighting the issue of communicate with the United States procurement). But the recovery Somali piracy) as one of the leading government, which historically has of the world economy is still far industry participants at a major often been slightly detached from from certain, and it will remain Conference of the world’s transport the mainstream of the international important for ICS, and like-minded ministers in Leipzig, organised by shipping community. ICS will governments, to remain vigilant. In the OECD International Transport participate at the next CSG dialogue particular, ICS remains committed Forum, which has continued to focus meeting with the United States, in to the inclusion of shipping in any on the implications for transport Washington DC, in June 2012. new agreement on services that as it emerges from the economic may be agreed by the World Trade downturn. ICS will again be A major concern of ICS national Organization (WTO), in order to representing the industry at the next shipowners’ associations has been codify the liberal trading practices OECD transport ministers’ conference to discourage governments from which already apply to most shipping in May 2012. responding to the current economic markets. However, progress towards crisis with protectionist measures, a new WTO deal on trade remains More routinely, ICS continues to which will only damage world trade slow, largely due to significant place great importance on relations further. More particular has been differences between governments on with the Consultative Shipping the need for governments to avoid issues such as agriculture. Group (CSG) of governments, measures that restrict fair and open which is the guardian of maritime access to shipping markets. A Shipbuilding Policy free trade principles. In June case in point, which received close 2011, in co-operation with ECSA attention in 2011, was the apparent Shipping, of course, is the servant of and the Royal Belgian Shipowners’ attempts by the Chinese authorities world trade and just as it benefited Association, ICS held a seminar on to restrict access to Chinese terminals from the boom years of the mid trade policy for CSG governments for the ultra large bulk carriers 2000s its fortunes are now also at their meeting in Brussels. In operated by the Brazilian iron ore inextricably linked to the recent fall conjunction with ASF and the producer Vale, although this issue in the demand for its services. But Singapore Shipping Association, a now seems to have been settled many of the problems confronting similar event was organised in April satisfactorily. Likewise, whilst ICS shipping have undoubtedly been 2012 at the CSG meeting held in has no opinion about the underlying exacerbated by shipowners placing Singapore which, inter alia, discussed issues surrounding the future of orders for far too many ships, with the possible trade implications of the Falkland Islands (Malvinas), any far too few cargoes to carry. With Representing the Global Shipping Industry
47 48 Representing the Global Shipping Industry
vast amounts of new tonnage being to meet, in order to explore further Panama Canal, Mr Alberto Alemán 49 delivered during 2012, in many trades what constitutes market distortion Zubieta, who has been pivotal there is now a major glut of ships. and the means of achieving greater in overseeing the current Canal transparency on government expansion and strengthening liaison Current markets would appear to support measures. ICS will attend a with industry has announced that he be demonstrating just how seriously meeting that OECD is organising in will step down from his post later this damaging the oversupply of ships Paris in June 2012, with the goal of year. ICS looks forward to working has been to shipowners’ revenues, encouraging the resumption of the with his successor, Mr Jorge Quijano, with many now struggling to meet talks as soon as possible, even if little who will take over in September 2012. their operating costs. However, immediate movement is anticipated. the problems of individual owners In January 2012, ICS hosted a aside, the biggest danger perhaps In view of the serious supply/demand meeting of international industry is the overcapacity that exists in the imbalance that currently prevails it representatives with a delegation shipyards, with an almost obsessive is clear that speculative ordering of from the Panama Canal Authority commitment to market share ships that have no economic purpose (ACP) to discuss the future of being displayed by the three major should be discouraged. Whatever operations after 2014, when the truly shipbuilding nations: China, Korea might seem rational from an individual impressive Canal expansion project and Japan, where 90% of world company’s perspective might not be is scheduled for completion. There tonnage is built. Even if shipyards good when seen in the context of the was a positive exchange about the go bankrupt, it is likely that their industry as a whole and the individual ACP’s preliminary thoughts on how governments will step in so that companies it comprises. Canal tolls might change. In general, they can continue to produce ships the ACP indicated that it would like which few people want, other than However, one thing on which to introduce more segmentation in speculators who may be foolishly ICS is clear is that it will resist any its tolls in order to better respond to tempted by knock down prices. suggestion that all ships above a market fluctuations that affect the However, a market might be found certain age should automatically be competitiveness of the Canal as a for otherwise unwanted Chinese scrapped. ICS will continue to resist route. The industry had understood ships by the Chinese fleet itself, with the concept of a maximum age for that these ideas were at an early China having a widely recognised ships which, as well as damaging the stage and would be subject to much goal of seeking to carry a much larger commercial interests of large numbers further discussion. ICS was therefore proportion of its cargoes – perhaps of companies, would remove surprised when, at the end of April 50% - on board its own vessels. incentives to maintain older ships and 20I2, the ACP announced major would have negative implications for toll increases, for many larger (non- It is therefore a source of safety and environmental protection. container) ships, of 15% over the next disappointment that the OECD has two years, commencing in July, with confirmed its decision to terminate Canal Issues even larger increases for many smaller negotiations on a new agreement vessels. In addition, the ACP has to eliminate subsidies and market The Panama and Suez Canals reduce announced general increases in tariffs distorting mechanisms in the the length of many sea voyages by for security and oil spill response shipbuilding industry. This was thousands of miles, but the privilege services, both of which are mandatory primarily due to differences between of using them is expensive. Individual for ships passing through the Canal. the European Commission and Asian transits by large vessels can cost The industry is expected to oppose governments about the treatment hundreds of thousands of dollars. these developments very strongly. of pricing of new ships in any new While both Canals are dedicated to agreement, the latter wishing instead providing excellent service they are Meanwhile, ICS has opposed the 3% to concentrate on the elimination of also very much committed to profit toll increases announced by the Suez subsidies - a position supported by maximisation. Canal Authority (SCA) in December ICS. However, the OECD Working 2011, at a time when the industry is Party on Shipbuilding will continue The current Administrator of the still struggling to manage the effects 50 of the global financial crisis. Suez associations therefore remains as ICS enjoys good relations with many Canal tolls have remained frozen for essential as ever. The strength of other intergovernmental bodies that the past three years in recognition ICS’s advocacy at IMO (and the impact on shipping including the of difficult shipping markets. ICS various other fora that impact on International Association of Marine therefore co-ordinated an industry shipping) is very much dependent on Aids to Navigation and Light House response to the SCA, explaining the ICS member associations which Authorities (IALA), the International that the economic situation has not present agreed ICS positions to their Hydrographic Organization (IHO) improved and requesting that the maritime administrations in advance and the World Meteorological increases be adjusted or deferred. of intergovernmental meetings. ICS Organization (WMO). ICS also Disappointingly, however, the member associations collectively has consultative status with the increases went ahead unchanged in develop the industry’s global positions International Mobile Satellite March 2012. through a comprehensive structure of Organization (IMSO), which is the specialist committees (see page 56). body that oversees public safety Following the dramatic political and security communication services events in Egypt in 2011, and the Using its separate ISF identity as including the Global Maritime Distress collapse of other major sources of an employers’ organisation, ICS is and Safety System (GMDSS). In foreign income such as tourism, the also an official social partner at the addition, ICS attends meetings of SCA is no doubt under pressure to Geneva-based International Labour both the Paris and Tokyo MOUs on maintain its revenue. To the SCA’s Organization (ILO) and acts as Port State Control. credit, the Canal has continued to Secretary to the Employers’ Group on function smoothly. However, ICS all ILO maritime issues. As an employers’ organisation, and has since repeated its request for full an official ‘social partner’ at the and proper consultation between the In addition to interacting with ILO, the opposite number of ISF is industry and the SCA, particularly individual governments during the International Transport Workers’ whenever toll adjustments are being meetings at IMO in London and ILO Federation (ITF). As reported contemplated. in Geneva, ICS continues regular elsewhere, in April 2012 national attendance at more general policy shipowner associations and ITF union Industry Representation and meetings held by the United Nations affiliates held a meeting to exchange Co-operation in New York, the World Trade views on matters of common interest, Organization (WTO), the Organization the first such meeting outside the As the principal international for Economic Co-operation confines of the ILO for a decade. It is association for the shipping and Development (OECD), the intended that this positive dialogue industry, the primary focus of ICS Consultative Shipping Group (CSG) will continue. In addition, ISF representation is the International of maritime administrations, the continues to be a member of the Maritime Organization (IMO). ICS United Nations Conference on Trade International Committee on Seafarers’ participates actively in virtually every and Development (UNCTAD), the Welfare (ICSW) which embraces IMO Committee and Sub-Committee World Customs Organization (WCO), secular and religious seafarers’ as well as numerous specialist and, in so far as they are relevant to welfare organisations. working and correspondence groups. seafarers, bodies such as the World ICS is therefore acknowledged by Health Organization (WHO). Given In view of the importance of ensuring governments as representing the the importance of discussions about global regulation for a global industry, considered views of all international CO2 emissions reduction, ICS has ICS continues to work closely ship operators. also taken up consultative status with the European Community with the United Nations Framework Shipowners’ Associations (ECSA) in Whilst efficient global shipping Convention on Climate Change communicating on issues with Europe depends on a system of uniform (UNFCCC) and represented the that are relevant from an international global rules, ship operators still live industry at the last UN Climate perspective, and participates in in a world of nation states. The Change Conference (COP 17) in consultations organised by the EU importance of national shipowner’s Durban in December 2011. institutions. In the United States, ICS Representing the Global Shipping Industry
51
IMO in session ICS/ISF Publications 2012
Shipping Federation
International Chamber of Shipping International
Available www.marisec.orgfrom Marisec Publications
52 works with the various US agencies (IMCA), the International Maritime changes necessitated by the STCW that impact on shipping in liaison with Employers’ Committee (IMEC), the 2010 amendments. the Chamber of Shipping of America, International Support Vessel Owners’ which by agreement officially Association (ISOA), the International Anticipating the entry into force of represents ICS in US discussions. Parcel Tankers Association (IPTA), the the ILO Maritime Labour Convention, Additionally, ICS enjoys good relations Society of International Gas Tanker a new edition of the ISF Guidelines with the Asian Shipowners’ Forum, and Terminal Operators (SIGTTO) and to the ILO MLC is expected to be whose members are also national the World Shipping Council (WSC). published in the first half of 2012, shipowners’ associations. ICS is in order to take account of the also now developing a relationship Publications various clarifications agreed by with the Asia Pacific Economic ILO since the MLC was adopted in Co-operation forum (APEC) which is A large proportion of ICS resources 2006. Incorporating new advice on becoming increasingly engaged with is devoted to the production of compliance and the adoption of best maritime transport matters. publications for the benefit of the employment practices, it is hoped industry. Issued under the banner of that this publication will come to be ICS works closely with a diverse range Marisec Publications, ICS publishes regarded as a sister publication to the of other industry organisations that over 30 titles which provide guidance definitive ICS/ISF Guidelines on the are engaged generally on transport on regulatory developments and Application of the International Safety issues, including the International industry best practices, especially Management (ISM) Code. Chamber of Commerce (ICC), the with regard to safety, environmental International Organization for protection and employment standards. Work is now well advanced on Standardization (ISO), the Business a new edition of the ICS Tanker and Industry Advisory Committee to Under the badge of ISF, ICS currently Safety Guide (Chemicals). This is a the OECD (BIAC), the International has an ambitious programme to major undertaking but publication Organization of Employers (IOE) and update various publications to reflect is anticipated in 2013. Looking the World Ocean Council (WOC). the entry into force, in January 2012, forwards, a work group has also of the 2010 amendments to the IMO been established to begin a review Last but not least, ICS enjoys Convention on Standards of Training, of the current edition of the ICS good relations with various Certification and Watchkeeping Tanker Safety Guide (Gas). Work is specialist industry bodies such as for Seafarers (STCW). In 2011, this also underway on a new edition of the International Association of included publication of fully updated the ICS Bridge Procedures Guide to Classification Societies (IACS), the Guidelines to the STCW Convention, take account of developments in International Group of P&I Clubs (IG), followed by revised on board training e-navigation. the International Union of Marine books for deck and engine ratings, Insurance (IUMI), the International which take account of the new STCW Meanwhile, in co-operation with the Association of Port and Harbors grades of Able Seafarer Deck and Oil Companies International Marine (IAPH), the International Maritime Engine. Updated on board training Forum (OCIMF) and the Society Pilots’ Association (IMPA), the Nautical record books for deck and engine of International Gas Tanker and Institute (NI), and the Global Shippers’ officer cadets, that will address the Terminal Operators (SIGTTO) work has Forum (GSF). This, of course, is in new STCW competence standards, progressed on a new consolidated addition to close co-operation with are due to be published in the first edition of the Ship to Ship Transfer other specialist international shipping half of 2012. In co-operation with Guide that will cover petroleum, associations including BIMCO, the its partner IT Energy, ISF has also chemical and gas operations. Cruise Lines International Association launched a new edition of its popular Publication is expected during 2012. (CLIA), Intercargo, Interferry, ISF Watchkeeper computer software, Intermanager, Intertanko, the Oil which allows seafarers’ work and Companies International Marine rest hour records to be maintained Forum (OCIMF), the International in accordance with IMO and ILO Marine Contractors Association regulatory requirements, including Representing the Global Shipping Industry
53 54 Organisational Matters truly reflect the considered views of the entire global shipping industry. The current ICS membership comprises national shipowners’ The Secretariat and staff of ICS is associations from 36 countries, provided by Maritime International representing all sectors and trades Secretariat Services Limited (Marisec), and over 80% of the world merchant which is wholly owned by ICS. fleet (see inside back page). In Marisec also continues to provide January 2012, the International services to the International Support Maritime Employers’ Committee Vessel Owners’ Association (ISOA). (IMEC), which engages in collective bargaining negotiations with In October 2011, ICS relocated to seafarers’ unions, joined ICS as an bright new offices at St Mary Axe in Associate Member. the City of London. In December, the new office and meeting facilities were Peter Hinchliffe continues to serve officially opened by the ICS Chairman as ICS Secretary General. Since his in the presence of representatives ICS appointment in September 2010 he from the various international Secretary has already overseen some significant maritime organisations with whom General, organisational changes. ICS works most closely. Peter Hinchliffe The 2011 Annual General Meeting The 2011 Annual General Meeting took the important decision to fully of ICS (and the final Annual General integrate the ICS organisation with Meeting of ISF) was hosted by the that of the International Shipping German Shipowners’ Association in Federation (ISF). For all intents and Hamburg in May. Under the new purposes ICS and ISF are now the articles of association, the four ICS same organisation and the articles Vice Chairmen elected for 2011/2012 and rules of ICS have been amended were Captain Dirk Fry (Cyprus), Mr accordingly. However, ICS will Frank Leonhardt (Germany), Mr continue to use the separate identity Trygve Seglem (Norway) and Mr of ISF when representing the industry Gerardo Borremeo (Philippines). An as an employers’ organisation, expanded Board of Directors, which for example at meetings of the meets three times a year, was also International Labour Organization elected by the ICS AGM, as shown or when dealing with labour affairs on the opposite page. Mr Spyros M questions. Polemis (Greece) continued to serve as Chairman following his re-election Since June 2011, the Committees of in 2010. ICS and ISF have been combined into a single structure, as shown overleaf, Mr Polemis has served as ICS reporting to a single ICS Board of Chairman for the last six years and Directors, membership of which has has announced that he does not been expanded and to which all intend to seek re-election for 2012/13. Full Members that subscribe to both A successor will be elected at the trade association and employment ICS Annual General Meeting in May affairs services are now entitled to be 2012, which will be hosted by the represented. This will help to ensure Australian Shipowners Association in that the positions adopted by ICS Port Douglas, Queensland. Representing the Global Shipping Industry
ICS Board of Directors 2011-2012
Australia Mr Noel Hart 55 Bahamas Mr Chris Oliver Belgium Mr Peter Vierstraet Canada Mr Gerry Carter Cyprus Captain Dirk Fry Denmark Mr Carsten Mortensen Finland Mr Jan Hanses France Mr. Christian Garin Germany Mr Frank Leonhardt Greece Mr Anastasios Papagiannopoulos Hong Kong Mr. Robert Ho Ireland Mr John Dolan Italy Mr Stefano Messina Japan Mr Hiroshi Hattori Liberia Mr Mark Martecchini Mexico Mr Luis Ocejo ICS Chairman, Spyros M Polemis opens the new offices at St Mary Axe Netherlands Mrs Karin Orsel Norway Mr Trygve Seglem Philippines Mr Gerardo Borromeo Singapore Mr Esben Poulsson Sweden Mr Lars Höglund Turkey Mr Tamer Kiran United Kingdom Mr Michael Parker United States Mr Charles Parks
ICS Secretariat ICS Organisational Structure
Shipping Policy Committee Chairman: Maritime Law Mr John C Lyras Labour Affairs Committee Greece Committee Chairman: Chairman: Mr Viggo Bondi Mr Arthur Bowring Norway Hong Kong
Insurance Manning & Training Committee Full Members Committee Chairman: Chairman: Mr Matheos Los Associate Members Mr Tjitso Westra Greece Netherlands 56 Board of Directors Chemical Carriers Oil Tanker Panel Panel Chairman: Chairman: Mr Joseph Ludwiczak Mr Roger Restaino Liberia Liberia
Marine Passenger Ship Committee Bulk Carrier Panel Chairman: Panel Captain Trevor Smith Chairman: Chairman: Singapore Mr Tom Strang Mr Dimitrios Fafalios United Kingdom Greece
Container Gas Carriers Panel Panel Chairman: Chairman: Mr Mike Downes To be confirmed United Kingdom
Offshore Dangerous Goods Panel Panel Chairman: Chairman: Mr David Blencowe Mr John Leach Denmark United Kingdom
Construction & Equipment Radio & Nautical Sub-Committee Sub-Committee Chairman: Chairman: Captain Paul Jones Mr Maurizio d’Amico Singapore Italy
Canals Environment Sub-Committee Sub-Committee Chairman: Chairman: Mr Koichi Inoue Ms Teresa Lloyd Japan Australia Members of the International Chamber of Shipping
FULL MEMBERS AUSTRALIA Australian Shipowners Association BAHAMAS Bahamas Shipowners’ Association BELGIUM Royal Belgian Shipowners’ Association BRAZIL Syndarma•• BULGARIA Bulgarian Shipowners’ Association• CANADA Canadian Shipowners’ Association CHILE Chilean Shipowners’ Association CHINA China Ocean Shipping (Group) Co•• CROATIA Mare Nostrum, Croatian Shipowners’ Association• CYPRUS Cyprus Shipping Chamber DENMARK Danish Shipowners’ Association FINLAND Finnish Shipowners’ Association FRANCE Armateurs de France GERMANY German Shipowners’ Association GREECE Union of Greek Shipowners Hellenic Chamber of Shipping• HONG KONG Hong Kong Shipowners’ Association INDIA Indian National Shipowners’ Association IRELAND Irish Chamber of Shipping ISLE OF MAN Isle of Man Shipping Association•• ITALY Confederazione Italiana Armatori (Confitarma) JAPAN Japanese Shipowners’ Association KOREA Korea Shipowners’ Association KUWAIT Kuwait Oil Tanker Co. LIBERIA Liberian Shipowners’ Council MEXICO Grupo TMM S.A. NETHERLANDS Royal Association of Netherlands Shipowners NORWAY Norwegian Shipowners’ Association PHILIPPINES Filipino Shipowners’ Association SINGAPORE Singapore Shipping Association SPAIN Asociación de Navieros Espanoles SWEDEN Swedish Shipowners’ Association• Swedish Shipowners’ Employer Association•• SWITZERLAND Swiss Shipowners’ Association• TURKEY Turkish Chamber of Shipping UNITED KINGDOM UK Chamber of Shipping UNITED STATES Chamber of Shipping of America
ASSOCIATE MEMBERS Abu Dhabi National Tanker Co. (Adnatco)• BW Fleet Management Pte. Ltd• Chamber of Shipping of British Columbia• Cruise Lines International Association (CLIA) European Dredging Association (EuDA) Interferry• International Maritime Employers. Committee (IMEC) Sail Training International Shipping Australia Ltd• World Shipping Council• • Trade Association Only •• Employers Organisation Only Representing the Global Shipping Industry
International Chamber of Shipping
38 St Mary Axe London EC3A 8BH Tel +44 20 7090 1460 Fax +44 20 70901484 [email protected] www.ics-shipping.org