INTERTANKOINTERTANKO

An Introduction & Key issues facing the An Introduction & Key issues facing the tanker industry todaytanker industry today

Presented byPresented by

John C. Fawcett-EllisJohn C. Fawcett-EllisLegal Counsel & Regional Manager Asia-PacificLegal Counsel & Regional Manager Asia-Pacific

Dalian, 24 June 2004Dalian, 24 June 2004

- representing representing responsible oil and responsible oil and chemical tanker owners chemical tanker owners worldwideworldwide

- promoting Safer Ships, promoting Safer Ships, CleanerCleaner Seas and Free Seas and Free CompetitionCompetition

-strict membership strict membership criteria based on quality criteria based on quality and performanceand performance

The The International Association of Independent International Association of Independent Tanker OwnersTanker Owners

INTERTANKO INTERTANKO todaytoday• 240 240 MembersMembers

• 2,202,2000 tankers tankers

• 160160 million dwt million dwt

• Average age: 13.5 yearsAverage age: 13.5 years

• 270 270 Associate MembersAssociate Members

• 27 Staff /27 Staff / 66 Consultants Consultants

Oslo London Singapore Washington

INTERTANKO in Asia - PacificINTERTANKO in Asia - Pacific

MembershipMembership

- AustraliaAustralia – Botany Bay Shipping Group – Botany Bay Shipping Group- ChinaChina – – Hebei Ocean Shipping Co, Cosco Dalian (Ass. Member), Hebei Ocean Shipping Co, Cosco Dalian (Ass. Member),

China Shipping, Nanjing Tanker Corporation & Sinochem China Shipping, Nanjing Tanker Corporation & Sinochem ShippingShipping

- Hong KongHong Kong – Anglo-Eastern, Associated Maritime, Eurasia, – Anglo-Eastern, Associated Maritime, Eurasia, Fairmont, HK Ming Wah, Parakou, TCC, Unique, Wah Kwong & Fairmont, HK Ming Wah, Parakou, TCC, Unique, Wah Kwong & WallemWallem

- JapanJapan – Daiichi Chuo, Daitoh Trading, Iino Lines, Kawasaki Line, – Daiichi Chuo, Daitoh Trading, Iino Lines, Kawasaki Line, Kyoei Tanker, Meiji Shipping, Mitsui OSK, Tokyo Marine, NYK, Kyoei Tanker, Meiji Shipping, Mitsui OSK, Tokyo Marine, NYK, Nissho, Shinwa, Taiheiyo, YuyoNissho, Shinwa, Taiheiyo, Yuyo

- MalaysiaMalaysia – MISC, Aurora, Sutrajaya, Barber Shipmanagement – MISC, Aurora, Sutrajaya, Barber Shipmanagement- SingaporeSingapore – NAS, Petroships, PCL, Thome, TESMA, World Tankers, – NAS, Petroships, PCL, Thome, TESMA, World Tankers, - South KoreaSouth Korea – SK Shipping, Hanjin (Ass Member) – SK Shipping, Hanjin (Ass Member)

INTERTANKO IN ASIAINTERTANKO IN ASIA

• Regional Office opened in Singapore in 1999Regional Office opened in Singapore in 1999

• Regional Panel since 1998 Regional Panel since 1998

• Executive Committee members:Executive Committee members:

- Mr KH Koo - TCC – Vice Chairman, - Mr KH Koo - TCC – Vice Chairman,

- Mr Joseph Kwok – AET / MISC - Mr Joseph Kwok – AET / MISC

- Mr Shirakuma - NYK- Mr Shirakuma - NYK

INTERTANKO’s Objectives:INTERTANKO’s Objectives:

• Powerful voice for the tanker industryPowerful voice for the tanker industry

• Provide members with first class Provide members with first class information and servicesinformation and services

A powerful voice for the tanker A powerful voice for the tanker operators worldwide:operators worldwide:

• IMOIMO

• Dialogue with industry counterparts Dialogue with industry counterparts

• Partnership with USCGPartnership with USCG

• Lobbying on behalf of the tanker Lobbying on behalf of the tanker operators with EU & Washington DCoperators with EU & Washington DC

• Washington State litigation – Victory Washington State litigation – Victory in the Supreme Court of the USin the Supreme Court of the US

Membership services:Membership services:

• Weekly newsWeekly news

• www.intertanko.comwww.intertanko.com

• Advice to members on Advice to members on Operational/Technical/Legal mattersOperational/Technical/Legal matters

• Port & Terminal informationPort & Terminal information

• Freight and Demurrage Information PoolFreight and Demurrage Information Pool

• Terminal Vetting DbaseTerminal Vetting Dbase

• Practical publications on technical issuesPractical publications on technical issues

Key issues facing tanker Key issues facing tanker operators:operators:

• ISPS Code – enforcementISPS Code – enforcement

• Revisions to International Oil Spill Liability & Revisions to International Oil Spill Liability & Compensation RegimeCompensation Regime

• Criminalisation of seafarersCriminalisation of seafarers

• Restoring trust with regulators / image of Restoring trust with regulators / image of the industythe industy

ISPS key issues:ISPS key issues:

• Enforcement – 1 July deadlineEnforcement – 1 July deadline- What if a vessel has had its security plan approved but does - What if a vessel has had its security plan approved but does notnot have a certificate on board? have a certificate on board?- Detention – if so for how long?- Detention – if so for how long?- Will PSC target specific vessel types?- Will PSC target specific vessel types?

• Inspections by PSCInspections by PSC- ensuring security does not compromise safety- ensuring security does not compromise safety- Shanghai MSA – were only given a month to train their - Shanghai MSA – were only given a month to train their inspectorsinspectors

• C/P considerationsC/P considerations - Laytime / demurrage- Laytime / demurrage- Additional port expenses- Additional port expenses

Security clause – Voyage Security clause – Voyage ChartersCharters

Key Considerations:Key Considerations:

• Validity of Notice of ReadinessValidity of Notice of Readiness

• Allocation of the risk of delay to the Allocation of the risk of delay to the vesselvessel

• Provision of information by charterersProvision of information by charterers

• Warranting compliance with ISPS code Warranting compliance with ISPS code and other security regulationsand other security regulations

• Allocation of costs, losses, liabilitiesAllocation of costs, losses, liabilities

• Nomination of alternative portsNomination of alternative ports

Revisions to International Oil Revisions to International Oil Spill Liability & Compensation Spill Liability & Compensation

RegimeRegime• Current IOPC regimeCurrent IOPC regime

- CLC - CLC

- Fund- Fund

- Supplementary Fund- Supplementary Fund

• Strict but limited liabilities for tanker ownersStrict but limited liabilities for tanker owners

• Post incident fund by oil receiversPost incident fund by oil receivers

• Total compensation available approx 1bn USDTotal compensation available approx 1bn USD

IOPC – the pressure for IOPC – the pressure for reform:reform:• Should the regime not just compensate oil Should the regime not just compensate oil

victims efficiently but also tackle sub-victims efficiently but also tackle sub-standard shipping?standard shipping?

• Advocates of reform Oil Companies, EU Advocates of reform Oil Companies, EU StatesStates

• Reform would most likely increase owners Reform would most likely increase owners liability/insurance costs whilst sub-liability/insurance costs whilst sub-standard operators would continue and standard operators would continue and not care of the consequencesnot care of the consequences

Criminalisation of seafarersCriminalisation of seafarers

• The master of the Prestige – continued The master of the Prestige – continued detention by Spanish authoritiesdetention by Spanish authorities

• Disincentive to join the industry – Disincentive to join the industry – shortage of good crewsshortage of good crews

• No ship is safe without a responsible, No ship is safe without a responsible, well trained, motivated and happy crewwell trained, motivated and happy crew

• Seafarers often not accorded the same Seafarers often not accorded the same human rights as othershuman rights as others

Restoring trust with Restoring trust with regulators / image of the regulators / image of the

industyindusty• The major incidents of the The major incidents of the ErikaErika (12.12.99) and (12.12.99) and

the the PrestigePrestige (19.11.02) have fuelled a massive (19.11.02) have fuelled a massive regulatory attack on the tanker industryregulatory attack on the tanker industry- Accelerated phase out of SH tankers- Accelerated phase out of SH tankers- Pressure to reform the IOPC regime- Pressure to reform the IOPC regime- Move to criminalise accidental pollution- Move to criminalise accidental pollution

• Major challenge to take control of our own Major challenge to take control of our own industry – show that the industry is responsible & industry – show that the industry is responsible & quality focussed – zero tollerance – not one drop quality focussed – zero tollerance – not one drop of oil...of oil...

ConclusionConclusion

The world needs energy; our industry is there to The world needs energy; our industry is there to provide a safe, environmentally sound, provide a safe, environmentally sound,

efficient and cost effective transportation efficient and cost effective transportation solutionsolution

INTERTANKO is there to promote the tanker INTERTANKO is there to promote the tanker industry; to encourage ever higher standards industry; to encourage ever higher standards and technical innovationand technical innovation so that the industry so that the industry may live up to the zero tollerance to pollution may live up to the zero tollerance to pollution

of the public and regulatorsof the public and regulators alikealike

THANK YOUTHANK YOU

谢谢大家

www.intertanko.comwww.intertanko.com