Latin American Panel (Lap) 8Th Meeting

Thursday, March 13, 2008 Our Ref.: JJ-30345/850003

DRAFT MINUTES

INTERTANKO LATIN AMERICAN PANEL (LAP) 8TH MEETING MARCH 12-13, 2008

THE PALMS HOTEL 3025 COLLINS AVE. MIAMI BEACH, FLORIDA

ATTENDEES:

COMPANY NAME

INTERTANKO US Office Joseph ANGELO (Secretariat) RightShip Eric CLARKE AGEMAR Jan de KOK PMI Comercio Jose Luis HERNANDEZ ABS Americas Tom KIRK Petrobras Luiz Carlos KUSTER US Coast Guard Headquarters Jeffrey LANTZ Blank Rome LLP Greg LINSIN Teekay Carlos LOZANO Tradewind Tankers Carlos Juan MADINABEITIA (Chairman) Heidmar Jose PERAZA Grupo TMM Manuel PORTILLO Ultragas Michael SCHRODER Southport Maritime Luis TEWES INTERTANKO Singapore Office Tim WILKINS

APOLOGIES RECEIVED FROM:

Anatares Naviera Gustavo PEREYRA

(Draft) Minutes from the xx Meeting of the yy Committee Page 1 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______AGENDA:

1. Anti-trust/competition law compliance 2. Minutes from the last meeting 3. Overview of INTERTANKO issues 4. INTERTANKO Environment Committee issues 5. Class role on environmental issues – ABS view 6. Air emissions from ships 7. US Coast Guard brief 8. US Coast Guard Voluntary Disclosure Policy 9. Human Element and Tanker Officer Training Standards (TOTS) 10. Navigation through the Maracaibo Channel 11. “Blue Sky” Thinking 12. INTERTANKO Annual Tanker event 13. Any other business 14. Next meeting

The Chairman opened the meeting by welcoming all those in attendance and thanking them for coming to Miami Beach, Florida. He noted the good attendance at this panel meeting and encouraged all members of the panel to continue to pursue growth of the membership of the panel throughout the Latin American region.

The Secretariat advised the panel of the proposed meeting schedule, logistical arrangements for the meeting and arrangements for the Welcome Dinner.

1. ANTI-TRUST/COMPETITION LAW COMPLIANCE

At the start of the meeting the Secretariat reminded participants of INTERTANKO’s Anti- trust/Competition law Compliance Statement and that the meeting was being conducted in compliance with INTERTANKO’s anti-trust/competition law guidelines.

2. MINUTES FROM THE LAST MEETING

The draft minutes of the panel’s 7th meeting which was held on October 31 – November 1, 2007 in Buenos Aires, Argentina were approved as stand.

3. OVERVIEW OF INTERTANKO ISSUES

The Secretariat provided the panel with an overview of the latest major issues that involve INTERTANKO. His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPoverview-Power.ppt

His presentation focused on membership, finances, the Secretariat, panel structure, law suits, pilots, Council and corporate communications.

In discussing the membership of INTERTANKO, the Chairman pointed out that there were currently four members from the Latin American region. He emphasized that it was in the members’ best interest to identify and target new potential members so that the concerns of the independent tanker owners in the Latin American region could be more strongly voiced in the Council. Those members and associate members attending the panel meeting agreed to identify

(Draft) Minutes from the xx Meeting of the yy Committee Page 2 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______potential members in their country, make personal contacts with these companies and inform the Secretariat of those that provide positive reactions, so the Secretariat can follow-up with the company through emails and a personal visit.

The Secretariat informed the panel of the 2008 annual budget for the association and the 2008 new membership and associate membership fees approved by the Council at its meeting in November 2007. He also told the panel about the new personnel that had recently joined the Secretariat staff. With regard to the panel structure, he advised the panel of the changes that would be proposed to the upcoming Council meeting regarding the Hellenic and Asian panels, but that no changes were being proposed to the Latin or North American panels. He gave the panel an update of the status of the lawsuits that INTERTANKO was involved in or closely monitoring and the Executive Committees decision to establish a Communications and Public Relations Advisory Group to develop effective ways to communicate decisions of the Executive Committee and the Council.

The panel was very pleased to learn that a Discussion Group had been formed between INTERTANKO and the International Maritime Pilots Association (IMPA), that its first meeting in January was successful and that there was agreement to meet again to discuss issues of mutual interest. In this regard, panel members said that their biggest concern was liability and they hoped that the Discussion Group would discuss how the pilots could accept responsibility and liability for their actions when an incident occurred. While it was recognized that each country has different rules and regulations that govern pilots, it was suggested that the system used by the Panama Canal authority might be a good example to use as a basis for the Discussion Group. One panel member suggested an insurance market for pilots. While another member felt that such a market would further increase pilot rates and could result in a conflict of interest with the ship’s P&I Club insurance. It was recommended that pilots should be made aware of the risks and consequences of incidents that occur which may be helpful in training them to respond accordingly. The Secretariat thanked the panel for this valuable input and said that he would do his best to make sure that these matters were further discussed at the next Discussion Group with IMPA.

4. INTERTANKO ENVIRONMENT COMMITTEE ISSUES

Mr. Tim Wilkins, INTERTANKO’s Environmental Manager and Secretariat of INTERTANKO’s Environment Committee, provided the panel with a thorough overview and update on activities and issues being addressed by the Environment Committee. His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPEnvironment-power.ppt

The issues he addressed included port reception facilities, ballast water, ship recycling, biofouling, anti-fouling systems, environmental awareness and benchmarking, whale strikes and environmental organization liaison.

In discussing reception facilities, he informed the panel that there was very little feedback on inadequate reception facilities from the Latin American region and he encouraged members to provide such feedback. He brought to the attention of the panel the INTERTANKO web site on reception facilities which provided 9 reasons why to report inadequate reception facilities and what can be done with the report. It was pointed out that the Terminal Vetting Database contains some information when an inadequate reception facility is encountered, but it would be necessary to “dig a little deeper” to obtain more details to submit a sufficient report.

With regard to ballast water management, he encouraged panel members to report any technology developments that they become aware of, any problems they encounter with port state control

(Draft) Minutes from the xx Meeting of the yy Committee Page 3 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______officers and any local or national ballast water regulations or requirements that are implemented in the Latin American region.

On ship recycling, he informed the panel that their input developed at our panel meeting in Panama in February 2007 was extremely helpful and instrumental in influencing the 5 main elements of the INTERTANKO strategy on ship recycling which has blossomed into the industry measures. He also encouraged the sharing of information on the development of the hazardous material inventory. It was agreed by all that it would be much easier to develop this inventory for a new ship when being built in the shipyard because the information could be obtained from the supplier. One panel member suggested that such a requirement should be included in the shipbuilding contract.

With regard to Environmental Awareness and Training, at the request of many of the panel members, the Secretariat agreed to look into the development of a basic environmental training session that could be made available to members in the Latin American region.

5. CLASS ROLE ON ENVIRONMENTAL ISSUES – ABS VIEW

Mr. Tom Kirk, Director for Technology and Business Development for ABS Americas, provided the panel with an overview of the classification society role on environmental issues from the American Bureau of Shipping view point. His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPClassRoleEnvironIssues.ppt

The presentation informed the panel about the well known growing “green revolution”, the various waste management concerns at the international, regional, national and local levels, the various waste streams from ships, an effective environmental management program for the shipowner and the role of the class society in promoting environmental safety.

6. AIR EMISSIONS FROM SHIPS

The Secretariat provided the panel with an update on the recent developments at IMO on reducing air emissions from ships through the revision of Annex VI of MARPOL. His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPAnnex6-Power.ppt

His presentation addressed the three options that have emerged from the recent IMO Bulk Liquids and Gases Subcommittee meeting in February 2008 – Option 1, Global, Option 2, Global/Regional and Option 3, Global/Regional with Micro Emission Control Areas to control SOX and particulate matter emissions. He informed the panel that INTERTANKO and a number of countries supported the Global solution, while other industry groups and countries supported Option 3. The panel all agreed that Option 3 was not a viable option for the ship operator because of all the problems that were associated with the need to carry three different types of fuels for use in each emission area.

He also informed the panel about the various options that are being considered to control NOX emissions. He told the panel about the IMO planned schedule for adopting amendments to Annex VI to further reduce emissions from ships. In this regard the 57th session of the Marine Environment Protection Committee will be meeting March 31 – April 4 with the objective of “approving” the revision to Annex VI for submission to its 58th session. It is expected that at MEPC 58 in October 2008, the amendments to Annex VI will be formally “adopted” under the provisions of Article 16 of MARPOL. They would then enter into force in February 2010 at the earliest. It was agreed by all that the ultimate goal should be the adoption of a solution at IMO that would be accepted by the US, the European Commission and the state of California.

(Draft) Minutes from the xx Meeting of the yy Committee Page 4 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______7. US COAST GUARD BRIEF

Mr. Jeffrey Lantz, US Coast Guard Director for Commercial Regulations and Standards, provided the panel with an overview of US Coast Guard activities in port state control, maritime security boardings, enhancements in the Marine Safety program and marine environment issues. His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPUSCG1.ppt

On port state control he informed that panel that from 2003 – 2006 detentions by the US Coast Guard have dropped, but for 2007 there was an increase in detentions and that although there was also an increase in detentions for tankers calling at US ports, overall detentions of tankers was below the average for all ships. He further indicated that for 2007, he expected that more flag states would be added to the qualifying registries for QUALSHIP 21 which would further increase the number of ships eligible for this incentive program.

The Chairman asked Mr. Lantz if the US Coast Guard had been working with the Vina del Mar MOU on port state control. He informed the panel that the US Coast Guard currently have observer status with the Vina del Mar Mou, as they do with the other port state control MOUs around the world and that the Coast Guard participates in their meetings, as well as in individual working groups for the purpose of sharing information, utilizing best practices and harmonizing port state control efforts around the world.

With regard to port security boardings, he pointed out that the purpose of these boardings was to verify a ship’s security performance and he identified the main areas of focus by the boarding officers. He then explained what additional security measures may be imposed upon a ship arriving from a country that is not maintaining effective anti-terrorisms measures. His presentation identified the following countries falling in this category – Cameroon, Equitorial Guinea, Guinea-Bissau, Indonesia, Liberia, Mauritania and Syria. However, he pointed out that in some of these countries, in particular Indonesia, certain ports and terminals were excluded from requiring the additional security measures. He said that the US Coast Guard issues advisories identifying which ports in these countries require the additional measures. The Secretariat informed the panel the INTERTANKO has published each of these US Coast Guard advisories in our Weekly News.

On enhancing the US Coast Guard Marine Safety program, he identified the main elements which are improving the Coast Guard’s marine safety capacity and performance, enhancing service delivery to mariners and industry customers and expanding outreach and advisory mechanisms for industry and communities. He emphasized that the main focus of these enhancements was to restore professionalism, respect and trust in the US Coast Guard. He strongly encouraged panel members to bring to the Coast Guard’s attention any problems or encounters with the US Coast Guard that are not consistent with this philosophy.

In closing, he emphasized that the US Coast Guard has established a web site http://homeport.uscg.mil that is an excellent source of information on the US Coast Guard, its programs and its outreach to the maritime industry.

8. US COAST GUARD VOLUNTARY DISCLOSURE POLICY

Mr. Greg Linsin of Blank Rome and formerly the US Department of Justice’s Senior Attorney in the Environmental Crimes Division provided the panel with an overview of the US Coast Guard’s recently issued Voluntary Disclosure Policy. His presentation can be seen at http://www.intertanko.com/upload/presentations/LinsinLatin%20American%20Panel%20II %20(2).PPT

(Draft) Minutes from the xx Meeting of the yy Committee Page 5 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______His presentation informed that panel that the US Coast Guard’s Voluntary Disclosure Policy was issued in November 2007 with the overall objective to encourage and reward proactive compliance efforts by ship operators. If certain conditions are satisfied and a new violation is voluntarily reported to the US Coast Guard, the Coast Guard may forego referral of a corporate or company violation to the US Department of Justice. To qualify a company must have implemented a compliance management system (CMS) to prevent, detect and correct violations PRIOR to a violation being detected by the Coast Guard. Such a management system must:

1. Contain clear policies and standards, 2. Designate a senior corporate official with responsibility for compliance, 3. Contain a monitoring and auditing regime, 4. Have an effective training program, 5. Provide incentives for managers and employees to comply, and 6. Contain procedures to promptly correct a violation and modify the CMS.

His presentation went on to identify the factors that will be considered by the US Coast Guard when a violation is discovered by the company through an audit or implementation of the CMS. However, he emphasized that the participation is this program was not a guarantee of immunity.

In closing, he provided a summary of potential benefits of a properly structured CMS implemented in good faith. They included:

1. Help in positively changing a corporate culture, 2. Significantly reduce environmental noncompliance within the company, 3. May avoid referral to US Department of Justice for criminal prosecution, 4. If referred to US DOJ, it could influence DOJ charging decisions, possibly resulting in – a. declining to prosecute; b. a deferred prosecution agreement, or c. reduced charges. 5. Help establish legal and factual predicate for “rogue employee” defense, and 6. If there is a conviction, help mitigate the penalty under sentencing guidelines.

He summed up by recommending that any reputable company would benefit by establishing a program in accordance with the newly established US Coast Guard Voluntary Disclosure policy.

9. THE HUMAN ELEMENT AND THE TANKER OFFICER TRAINING STANDARDS (TOTS)

Mr. Tim Wilkins provided the panel with an update on human element issues the INTERTANKO is working on with a focus on the newly developed Tanker Officer Training Standards (TOTS). His presentation can be seen at http://www.intertanko.com/upload/presentations/LAPTOTSTim.pdf

His presentation informed the panel that INTERTANKO established the TOTS initiative to address the increasing tread in tanker accidents and ease compliance with the oil companies Officer Matrix Requirements. However, he emphasized the TOTS was not intended to be a replacement or an alternative to the Tanker Endorsement.

He explained that there were four elements to TOTS – training record books (to address time in rank and time with company), computer based assessment (to address time in rank), company verification (to address time in company) and ship specific practical simulator verification/training. Three levels of training record books have been established – the Command module for Masters and Chief Officers, the senior engineer officers module and the junior officer tanker module for

(Draft) Minutes from the xx Meeting of the yy Committee Page 6 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______deck and engine. In addition, there is a generic record book module for time with company which provides a template, but requires a company to make it company specific. The computer based assessment is a CD-ROM that verifies a candidates understanding of “time in rank” tasks. The company verification is a computer based assessment based upon company verification to verify a candidates understanding of “time with company” which must be tailored made company specific. The ship specific practical simulator verification/training is based upon simulator training designed to meet the TOTS standard which can be run by an externally accredited maritime training center. It trains and verifies tanker type knowledge with 6 courses in 3 areas – crude oil tankers, product carriers and chemical carriers. The target launch date for TOTS is April 22 at the INTERTANKO Annual Tanker Event in Istanbul, Turkey.

10. MARACAIBO CHANNEL

The panel did not discuss this matter.

11. “BLUE SKY” THINKING

The Secretariat provided the panel with a brief overview of the INTERTANKO Council discussions on “Blue Sky” thinking. He reminded the panel that there were four general areas under which “Blue Sky” thinking was being considered - Business Environment and Industry Development, Regulatory and Governance, Environmental and Social Pressures and Human Element and Operational Challenges.

Due to limited time, the Council at its November 2007 meeting was only able to discuss issues related to the Human Element and Operational Challenges. In this regard, the Council had raised the following issues:

1. Seafarer shortage is a problem; 2. Need to market positive aspects of shipping industry to attract youth; 3. Need for better accommodation on newbuildings; 4. Need tangible benefits for crew – satellite communications and internet on ships; 5. Need to improve crew training and skills; 6. Need for uniformity in training standards; 7. Better pay for officers and crew; 8. Concern over migration to LNG ships; 9. Need commitment to cadets; 10. Criminalization of seafarers is a large discouragement to go to sea; and 11. All of industry must work together to address these issues.

The panel was pleased to note that many of these issues were consistent with the issues raised by the panel at its last meeting.

Another issues raised in this panel meeting was that there was too much paperwork and recording keeping required of the ship’s officers and we should be looking for ways to reduce this burden on the crew. The Secretariat informed the panel that all of these issues will be further considered by the Executive Committee at its meeting in September.

(Draft) Minutes from the xx Meeting of the yy Committee Page 7 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______12. INTERTANKO ANNUAL TANKER EVENT

The Secretariat provided the panel with the current schedule and tentative program for the 2008 INTERTANKO Annual Tanker Event which is scheduled to take place at the Swissotel The Bosporus in Istanbul, Turkey from April 20-23, 2008 and encouraged all panel members to attend.

13. ANY OTHER BUSINESS

The Chairman raised the issue of refugees at seas. He indicated that this was a humanitarian matter and there was a need for ships to render assistance when refugees are found at sea. In this regard, he pointed out that the IMO and the United Nations High Commission for Refugees (UNHCR) have been working on this issue for many years and had produced a publication entitled “RESCUE AT SEA” which is a guide to the principles and practice that should be applied to migrants and refugees. He suggested that this might be an issue that could be further discussed at the upcoming INTERTANKO Annual Tanker Event in Istanbul. The Secretariat informed the panel that he would send a copy of the joint IMO/UNHRC publication to each member of the panel and that he would raise the suggestion to include this subject at the upcoming Annual Tanker Event to those running the event.

14. NEXT MEETING

The panel agreed that its next meeting should take place in Mexico, tentatively during the week of October 27-31, 2008. The venue for this meeting would be determined at a later date.

The panel also agreed that it should hold one of its meetings in 2009 in Chile. In this regard the Secretariat was requested to consult with Ultragas, the INTERTANKO member in Santiago, for their recommendation regarding when and where the meeting should be held.

(Draft) Minutes from the xx Meeting of the yy Committee Page 8 of 8 held in xx on the [Day][Month][Year] Issue No 1 Our Ref.: JJ-30345/850003 Approved by:______