Gallagher Marine Systems Seminar July 24, 2013

Leading the way; making a difference

Gallagher Marine Systems Seminar July 24, 2013

INTERTANKO’S MAIN ISSUES

JOSEPH ANGELODEPUTY MANAGING DIRECTOR


INTERTANKO MISSION Provide Leadership to the Tanker Industry

in serving the Worldwith the SAFE, ENVIRONMENTALLY

SOUND AND EFFICIENT seaborne transportation

of oil, gas and chemical products


PRIMARY GOALLead the CONTINUOUS IMPROVEMENT

of the Tanker Industry’s Performance in striving to achieve the Goals of:

Zero FatalitiesZero Pollution

Zero Detentions


MEMBERSHIP is open to independent tanker owners and operators of oil and chemical tankers (i.e. non-oil companies and non-state controlled tanker owners) who meet the membership criteria.

ASSOCIATE MEMBERSHIP is available to any entity with an interest in the shipping of oil and chemicals.


MEMBERSHIP220+ Members

3,200+ Tankers

280+ Million DWTMembers in 40+ countries

MORE THAN 70% OF THE INDEPENDENT TANKER FLEET

300+ Associate Members


SUSTAINABILITYBALLAST WATER MANAGEMENT

PIRACYGREENHOUSE GASTANKER VETTING

2014 ANNUAL TANKER EVENT

MAIN ISSUES


1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

275

329

383

437

491

545

3,300

3,920

4,540

5,160

5,780

6,400

dwt Number

TANKER SUPPLY


2009 2009-10 2009-11 2009-12 2009-130

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

*2013 110 days

Accumulated losses VLCCs, Suezmaxes & Aframaxes


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 emission


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 Nov 2013 Council meeting for approval

SUSTAINABILITY


May 2013 – INTERTANKO COUNCIL agreed that INTERTANKO should:

1. Develop a Code of Conduct on Tanker Chartering – a best practice guide- Payment of freight and demurrage- Vetting procedures- Brokers role

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

SUSTAINABILITY


Ballast Water Management

May 2012 - INTERTANKO Council recommends comprehensive document detailing technical, operational and compliance challenges and proposing solution to be sent to IMO

August 2012 – Joint submission to IMO’s MEPC 64 co-sponsored with Liberia, the Marshall Islands, Panama, BIMCO, CLIA, INTERCARGO, InterManager, IPTA, NACE and WSC


INTERTANKO (Etal) SubmissionExplains the challenges being faced for effective implementation of the BWM Convention and to provide proposals to address those challenges

Submission covered FOUR key areas:

1. Guidelines for approval of ballast water management systems (G8);

2. Availability of Ballast Water Management Systems (BWMS);

3. Survey and certification requirements 4. Procedures for port State control

IMO MEPC 64 (Oct 2012)


1. Revision of the G8 GuidelinesDecided not to amend the G8 guidelines (at this time), BUT agreed to request BLG subcommittee to develop additional guidelines on the application of the G8 guidelines to address the issues raised in our submission

2. Availability of BWMS Established a correspondence group (lead by Japan) to develop an Assembly resolution regarding the implementation of Regulation B-3

OUTCOME OF MEPC 64


3. Survey and certification requirementsAgreed with our proposal to issue an MEPC Circular

4. Sampling and analysis procedures for PSCAgreed with INTERTANKO proposal to instruct BLG (and FSI) Subcommittee that sampling and analysis procedures for PSC should be no more stringent than what is required for type approval of BWMS

OUTCOME OF MEPC 64


Type approval. INTERTANKO joint submission on type approval guidelines accepted. Increased transparency of type approval process and more info provided to ship operators on BWM system capabilities and limitations.PSC procedures. Agreed to undertake a trial period for port state control sampling and analysis. The trial will commence once the BWM Convention has entered into force and will initially run for 2-3 years.

During trial period, it is agreed that port state control officials will refrain from initiating criminal sanctions against the vessel and its crew should the sampling show that the discharged ballast water does not meet the standards in the BWM Convention.

OUTCOME OF BLG 17 (Feb 2013)


Assembly resolution on implementation dates – correspondence group outcomeAgreement amongst a large majority of the group that there should be an extension of the implementation schedule for existing shipsOpposing views almost equally divided as to whether this extension should apply to new ships Extension considered for both new and existing ships was to delay the installation dates until the ship’s first renewal survey after the entry into force of the BWM Convention.


1. BWMS Type ApprovalApproves both type approval certification documents and guidance to administrations on the type approval process resulting in more information being provided to ship owners on the capabilities of the BWMS as well as the ranges/limiting conditions in which BWMS can operate

2. Port State Control Procedures Approves trial period (2-3 years) for PSC sampling, during which PSC will not detain or criminalize on the basis of a failed discharge test, providing the BWMS is being operated according to the type approval and manufacturers requirements (US reserved its position)

OUTCOME OF MEPC 65


3. Implementation Dates for installing BWMS- Agree to a draft Assembly resolution recommending governments implement the Convention based on the entry into force date of the convention, as opposed the dates currently provided in the IMO BWM Convention.

- The new installation schedule considers ALL vessels constructed before entry into force as existing vessels. - These existing vessels will then have until their first renewal survey (IOPP Certificate under Annex I of MARPOL) after entry into force of the BWM Convention to install a BWMS.

OUTCOME OF MEPC 65


Final regulations issued March 2012Main requirements include:

– BWM plan and record keeping– BWM standard (same as IMO), review in 4 yrs– Compliance schedule (similar to IMO), (no

intent to align schedule with Assembly resolution)

– Acceptance of “Alternative” BWMS for 5 years

(13 BWMS accepted under AMS)– BWMS not required if no discharge in US

waters– New ships (12/1/13) may request an extension

USCG BWM Requirements


Vessel General Permit (VGP) Dec 2008– BWM plan and record keeping;– BWM exchange;– Allows states to impose additional

requirements;New VGP issued March 28, EIF Dec 19, 2013

– BWM Standard the same as USCG– Implementation dates the same as USCG– No EPA approval process for BWM systems– No extensions for new ships (??)

US EPA VGP BWM Requirements


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 July 15) - 9 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


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

• Piracy off the west coast of Africa is worsening• First six months of 2013 (IMB) - 31 incidents - 4 hijackings - 56 hostages taken• 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 (5th) last week off the coast of

Gabon while waiting to berth at Port Gentil


West Coast of Africa

INTERTANKO 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)

In addition, UK Foreign Office and OCIMF working together on launching a co-ordination center in the region


• 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


2014 ANNUAL TANKER EVENT

Venue – New York City

Dates – May 5 - 9, 2014

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


THANKYOU!!WWW.INTERTANKO.COM

Documents

Gallagher Marine Systems Seminar July 24, 2013