Latin American Panel November 6, 2013

Leading the way; making a difference

Latin American Panel November 6, 2013

INTERTANKO OVERVIEW

JOSEPH ANGELODEPUTY MANAGING DIRECTOR


MEMBERSHIPBUDGET

SECRETARIATCURRENT MAJOR ISSUES

OCIMF SIRE WG/INTERTANKO VCANNUAL TANKER EVENT


MEMBERSHIP

220+ Members3,000+ Tankers

270+ Million DWTMembers in 40+ countries300+ Associate Members


INTERTANKO Membership


2011 2012 2013 (Actual) (Actual) (Budget)

Total Operating Income (US$) 7,753,228 6,886,363 7,267,490

Total Operating Expenses (US$) 6,886,593 6,021,965 7,241,710

Operating Result 866,635 864,398 25,780

Non-operating Income/expenses 88,303 321,319 -25,000

Result for Year 954,938 1,185,717 780

BUDGET


20 STAFF MEMBERS IN 4+ OFFICES Oslo (8), London (10), Singapore (1), USA (1) + Brussels

STAFF INCLUDES- Managing Director - Deputy Managing Director & Director of Regulatory Affairs- Technical Director (+ Technical Manager in London)- Marine Director (new)- General Counsel

SECRETARIAT


CURRENT MAJOR ISSUES

SustainabilityFive-Year Strategic Plan

Ballast water managementPiracy

Greenhouse gas emissions


• Charter/freight rates not covering basic vessel operating costs

• Earnings not supporting forward investment

• Charter party terms which are not balanced and at times ignored

SUSTAINABILITY


May 2012 – INTERTANKO Council agreed to:

1. Development of an optimal speed model to show the relationship between the time charter equivalent earnings and CO2 emissions, based on a known freight rate for a specific route and different tanker speeds

SUSTAINABILITY


TC equivalent and emission at various speeds

$/day

7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.00

8,000

16,000

24,000

32,000

40,000

0

3,000

6,000

9,000

12,000

15,000

CO2 emission

TCE Laden

TCE Ballast

Speed

Assumed market $12,000 per day bunker price $600 per tonne

Tonnes CO2 emisson


2. Expand scope of the INTERTANKO WorldScale Committee to include commercial issues that have an impact on tanker operations, including:

• proper promotion of speed optimization• rising fuel costs• broker’s fees• certain charter party clauses regarding purging

and cargo heating; and • possible decoupling the fuel costs from the

commercial transactions

SUSTAINABILITY


Nov 2012 – COUNCIL agreed that INTERTANKO should develop an action plan to raise the profile of sustainability to the top level of the oil companies

Feb 2013 – EXCOM agreed that there is a need for an INTERTANKO sustainability campaign.

1. Initial focus should be on practical issues that might be changed in the short term 2. Next steps to develop key messages and to identify key focus areas for campaign3. Submit to May 2013 Council meeting for approval

SUSTAINABILITY


SUSTAINABILITY PROJECT

Aim

To realign tanker industry’s key stakeholders for the re-creation of balanced tanker trading conditions and fair risk sharing that will allow quality shipping regardless of market cycles

SUSTAINABILITY


May 2013 – INTERTANKO COUNCIL agreed that INTERTANKO should:

1. Develop a voluntary Code of Conduct on Tanker Chartering – a best practice guide

- Payment of freight and demurrage- Vetting procedures- Trading ethics

2. Send letter from Chairman to charterers 3. Establish late payment database 4. Work on Vetting inspection costs 5. Expand message to wider audience

SUSTAINABILITY


Pilot study results - Demurrage


Sept 2013 – INTERTANKO Executive Committee1. Adjustments to Worldscale should be taken back to the

Council in November with a proposal for alternatives that might readdress some of the terms and rebalance risk in the short and longer term.

2. There is also a separate debate to be had around Vetting costs and this should be taken to the Council.- Cost and availability of inspectors- Minimizing the number of vetting inspections- The proper use of SIRE- Transparency - which needs to be defined- Review of TMSA

SUSTAINABILITY


Major Issues• Sustainability • Human Element • Tanker safety and performance• Greenhouse Gas Emission reduction• Air emissions reduction• Ballast water management • Maritime security threats• Chemical tanker operations

Five-Year Strategic Plan


PIRACY - Somalia

2011 Statistics (IMB)- 237 attempted incidents- 28 hijackings

2012 Statistics- 75 attempted incidents- 14 hijackings- 7 commercial ships, 5 dhows, 2 fishing

2013 Statistics (thru October 22) - 11 attempted incidents

- 2 hijacking ( 2 dhows)


Significant reduction of piracy incidents off Somalia

• Better industry compliance with BMP4

• Enhanced military strategy and tactics

• Enhanced use of armed guards


BEST MANAGEMENT PRACTICES (BMP)

Three essential requirements that cannot be over emphasized:

• Register with MSCHOA• Report to UKMTO• Implement Self Protection Measures


INTERTANKO position regarding the use of armed guards

INTERTANKO believes it is the responsibility of the international navies to ensure the right of free passage on the high seas including the use of vessel protection detachments on merchant shipsINTERTANKO does not advocate the arming ships' crewsINTERTANKO believes that the use of private armed guards or private security forces onboard merchant ships has to be a matter for each individual owner or manager to assess as part of their own voyage risk assessment


IMO Maritime Safety Committee• MSC.1/Circ.1405 – Interim Guidance to Shipowners,

Ship Operators and Ship Masters on the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

• MSC.1/Circ.1406 – Interim Recommendations for Flag States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

• MSC.1/Circ.1408 – Interim Recommendations for Port and Coastal States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

IMO


IMO Maritime Safety Committee• MSC.1/Circ.1443 – Interim guidance to private maritime

security companies providing privately contracted armed security personnel on board ships in the High Risk Area

• MSC.1/Circ.1444 – Interim guidance for flag States on measures to prevent and mitigate Somalia-based piracy (compilation, in a single reference document, the best practices, codes and standards developed by IMO to date)

IMO


• IMO MSC requests International Standards Organization (ISO) to develop standard for guidelines and the certification of private maritime security companies providing PCASP

• Standard to be based upon MSC.1/Circ.1443 – Interim guidance to private maritime security companies

• ISO Specification 28007 published Dec 20, 2012• Independent third party certification of PCASP

under way in various countries

ISO


GUARDCON

• Contract for the employment of security guards on vessels

• Developed by BIMCO to provide clearly worded and comprehensive standard contract to conclude agreements with security services

• Reviewed by INTERTANKO Documentary Committee and endorsed for use by members


Rules on Use of Force (RUF)

BIMCO Guidance on Rules for the Use of Force (RUF) by Privately Contracted Armed Security Personnel (PCASP)

• adopted after significant consultation with broad industry, insurance and legal sectors

• supplements GUARDCON

100 Series Rules - An International Benchmark for Commercial Maritime Rules for the Use of Force (RUF)

• development of ISO standard underway• intended to supplement ISO 28007


West Coast of Africa

• Incidents in 2013 (IMB, as of October 22) - 31 incidents - 4 hijackings• Initially, the model is for tankers to be taken,

barges filled with cargo, then ships released • New name – Extended Duration Robbery (EDR)• These pirates are much more violent in pursuing

their objective• Most recent hijacking October 23, offshore supply

vessel, C-Retriever, owned by Edison Chouest Offshore, off the coast of Nigeria, 2 US crewmembers kidnapped


West Coast of AfricaINTERTANKO action: • Drafted guidance for Members specific to the

piracy problem in West Africa• Interim guidance issued by RT in Dec 2012• RT letter to IMO Secretary General requesting

matter be brought to the attention of the UN Security Council with a request for assistance to local constabulary activity in the area (Feb 2013)

• Prompted by INTERTANKO intervention as IMO Maritime Safety Committee (June 2013), SG agrees to write to UN SG on the matter


West Coast of Africa

• In addition, UK Foreign Office and OCIMF working together on launching a co-ordination center in the region (similar to UKMTO)

• More recently, African Winds launched on October 4 by Nigeria – 14 day training program for 221 troops from Nigeria, Morocco, Senegal, Ghana, Togo, Benin, and Cameroon by special forces from US, UK, the Netherlands and Spain


• EEDI & SEEMP mandatory since 1 Jan 2013• Market Based Measures – No progress• New Initiative – Operational efficiency or Monitoring, Reporting & Verification (MRV)• USA – submission at MEPC 64 (Oct. 2012) • EU – Stakeholders Meeting on (Dec 2012) • Some countries working jointly to develop new approach – USA and EU part of the group

GREENHOUSE GAS EMISSIONS


OPERATIONAL EFFICIENCY (US) – Three phases1. Data collection to determine the baseline2. Trial period to establish practical rating system3. Required operational efficiency scheme

EUROPEAN COMMISSION APPROACH4. Develop details of “monitoring, reporting and

verification (MRV) system”5. Finalize obligatory measuring, reporting and

verifying of maritime CO2 emissions after 2013

NOTE : MRV system is essentially the same as Phase 1 and part of Phase 2 of Operational Efficiency


INTERTANKO Council agreed (May 3013) • Support the MRV concept in principle

• Continue assessments on the best possible model• Ship’s efficiency is the best method of measuring

performance improvement with fuel consumption being the critical parameter

• Collect data from Members on annual fuel consumption of their tankers

• Collect additional data which would assist in determining the best INTERTANKO definition of ship’s efficiency when assessing the various proposals (i.e. time and distance in laden and ballast voyages, cargo amount, etc.


OCIMF Sire WG/INTERTANKO Vetting VC• Initiated by INTERTANKO VC Chairman• Initial focus was “the decline in the use of

the SIRE system by OCIMF members”• Meetings in Nov 2012 and Jan 2013• Issued discussed included:

- Increased sharing of ship inspection statistical data- Improved feedback systems on ship inspections and inspectors

- Development of best practice guidance on important areas of marine risk assurance- Development of matters related to crew competency

TANKER VETTING


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2014 ANNUAL TANKER EVENT

Venue – New York City

Dates – May 5 - 9, 2014

Events: Executive Committee MeetingCouncil Dinner and MeetingAnnual General MeetingGala DinnerTanker SeminarWorkshop


THANKYOU!!WWW.INTERTANKO.COM

Documents

Latin American Panel November 6, 2013