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ASIAN PANELASIAN PANEL March 2, 2010
INTERTANKO INTERTANKO OVERVIEW OVERVIEW
REPORTREPORTJOSEPH ANGELO
DEPUTY MANAGING DIRECTOR
MEMBERSHIP MEMBERSHIP
BUDGETBUDGET
SECRETARIATSECRETARIAT
COUNCIL ISSUESCOUNCIL ISSUES
PIRACYPIRACY
GREENHOUSE GASESGREENHOUSE GASES
EXCOM ISSUESEXCOM ISSUES
US ISSUESUS ISSUES
MEMBERSHIPMEMBERSHIP
• 270+ Members
• 3,100+ Tankers
• 250+ Million DWT• Members in 40+ countries
• MORE THAN 75MORE THAN 75%% OF THE OF THE INDEPENDENT TANKER FLEETINDEPENDENT TANKER FLEET
• 330+ Associate Members
MEMBERSHIPMEMBERSHIP
0
55
110
165
220
275
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
500
1,000
1,500
2,000
2,500
3,000
3,500
No. members
m dwt
No. ships
Members/million dwt No. of tankers
BUDGETBUDGET
2008 2009 2010
(BUDGET)Total Operating Income (US$) 8,689,980 8,603,025 7,291,509
Total Operating Expenses (US$) 8,473,822 6,511,325 6,767,825
Operating Result 216,158 2,091,700 523,684
Non-operating Income/expenses -291,883 270,000 -25,000
Result for the Year -75,725 2,361,700 498,684
BUDGETBUDGET
• Reasons for large operating surplus for 2009 year end
- Virtual retention of all members in 2009- Disciplined control of discretionary expenditures (limiting of activities)- Expenditures benefiting from strong US dollar against British pound and Norwegian Kroner
• Membership fees for Members and Associate Members in 2010 to be reduced by 10%.
SECRETARIATSECRETARIAT
• 24 STAFF MEMBERS IN 4 OFFICES
Oslo (12), London (10), Singapore (1)
USA (1) + Brussels, Manila (consultant)
• STAFF INCLUDES
- Managing Director
- Technical Director
- Director, Regulatory Affairs
- Marine and Chemical Director
- General Counsel
COUNCIL ISSUESCOUNCIL ISSUES
NEW LEADERSHIP
ORGANIZATION REVIEW
TANKER MARKET
CRIMINALIZATION OF SEAFARERS
FACILITATION PAYMENTS
PILOTS
NEW LEADERSHIPNEW LEADERSHIPCHAIRMAN – Graham Westgarth
Teekay Shipping (Canada)
VICE CHAIRMEN –
David Koo, Valles Shipping (Hong Kong)
Bengt Hermelin, SAMCO (Singapore)
Robert Johnston, OSG (USA)
FOUR NEW EXECUTIVE COMMITTEE MEMBERS, including
Carlos Juan Madinabeitia, Tradewinds (Venezuela)
ORGANIZATION REVIEWORGANIZATION REVIEW
Operational• Clarify priorities• Narrow scope• Reduce administrative burden• Improve communications• Reduce number of meetings• Subcommittees are of value, but there are too
many
Structural• Executive Committee role vs Council role is
unclear• Structure is heavy• Regional panel role is unclear
ORGANIZATION REVIEWORGANIZATION REVIEW
Council• Discusses and approves the key issues, policies and
priorities of INTERTANKO for the following year• Elects the Executive Committee• Approves the membership fees for the following year• Approves the accounts and auditor’s report
Executive Committee • Implements the strategy and priorities of
INTERTANKO, as directed by the Council, and the direction of the secretariat
• Establish working group to review priorities and scope of activities
ORGANIZATION REVIEWORGANIZATION REVIEW
Regional panels• Panel Chairman a member of the Executive Committee• Panel Chairmen, in conjunction with the regional
membership, to decide the appropriate arrangements and frequency of meetings for maximum effectiveness
Committees• Decide frequency of meetings based upon workload
Secretariat• Develop improved communications through web site
and other available means• Reduce administrative workload
World GDP and oil demand change
Source. IMF/BP/IEA/Fearnleys
-3
-1
1
3
5
7
9
11
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
GDP growth - IMF
Oil demand growth - IEA
Tonne miles growth - Fearnleys
%
Oil/tanker demand correlates with Economic growthPositive growth projected – but there is still uncertainty
Tanker deliveries, removal, phase out
m dwt
YearGrowth in tanker fleet since 2000The fleet will continue to grow even if all SH tankers are
phased out(Delays in deliveries must be anticipated)
-35
-25
-15
-5
5
15
25
35
45
55
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Deliveries
Phase out
Conversion
Demolition
Deliveries - deletions = fleet increase
Tanker fleet development(Assumed max phase out, orderbook March 2009, include chemical tankers)
Tanker fleet increase 2003-2012: 70%
m dwt number
290
339
388
437
486
535
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
3,300
3,920
4,540
5,160
5,780
6,400
dwt
number
Seaborne crude oil tradeVolume back to the 1970s level
bn tonne-miles
Source: INTERTANKO, Fearnleys
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1970s 1980s 1990s EST00s
-38%
+36%
+19%
Oil demand, tonne-mile, tanker fleet indices
Source: IEA, Fearnleys, INTERTANKO
Tanker fleet increase 2002-2010: 46%
95
100
105
110
115
120
125
130
135
140
145
150
155
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Oil demand index
Tonne miles crude tanker index
Tanker fleet index
Tankers used for floating storage
Source: EA Gibson
Number
17
61
12
42
Tankers tied up in storage has saved the marketand may be major wild card in 2010
0
20
40
60
80
100
120
140
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
LR1/Panamax
LR2/Aframax
Suezmax
VLCCs
Source: E.A. Gibson
Chinese oil import
China will be the most important market for tankers
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Products
Crude
Source: BP Review/IEA
mbd
CRIMINALIZATIONCRIMINALIZATION
• Criminalization of seafarers- “Prestige”- Spain- “Hebei Spirit” (South Korea)- “Tosa” case (NYK VLCC – Taiwan)- “Full City” (COSCO Bulk carrier – Southern Norway)
• Industry-wide support for adherence to the IMO-ILO Guidelines on the Fair Treatment of Seafarers in the event of a Maritime Accident
• Council agreed that INTERTANKO- needs a strategy on the issue of criminalisation of seafarers as a base for its future work- develop a position paper for use in discussion with governments and others based on factual examples
FACILITATION PAYMENTSFACILITATION PAYMENTS
• Facilitation Payments are frequently made to Authorities, Pilots, Terminal Officials, Inspectors, and more for “smooth” trade
• However, Shipowners are expected to warrant that no bribes (and in some cases also no facilitation payments) will be paid during the performance of the contract and that owners are obliged to indemnify charterers from all consequences if any such payments are made.
FACILITATION PAYMENTSFACILITATION PAYMENTS• Raise the issue with OCIMF, Round Table partners and
Governments, as applicable
• Members are encouraged to report incidents to INTERTANKO
• INTERTANKO Documentation Committee is developing model clauses, e.g. for Voyage Charters:….. any waiting time caused by the owners refusal to pay a facilitation payment or bribe shall count as laytime or if on demurrage time on demurrage, even if the vessel formally lacks any local certificates, clearances or there are any other … circumstances or formalities that ordinarily could prevent laytime from starting, if the reason the owners do not have such approval etc. is because owner has refused a facilitation payment or bribe.
PILOTSPILOTS
• Discussion Group meetings with the leadership of the International Maritime Pilots Association (IMPA) and the American Pilots Association (APA)
• Aim is to improve maritime safety and to explore areas for future cooperation with pilot groups
• Issues have included bridge resource management, criminalisation of seafarers, maritime casualties, engine failures and pilot safety when embarking
• Meetings have been very successful in gaining trust
• IMPA/APA President proposed joint signing of Memorandum of Agreements (MOAs) to formalize relationship
• Council has authorized Chairman to sign MOAs
EXCOM ISSUESEXCOM ISSUES
GREENHOUSE GAS EMISSIONSPIRACY
US POLICY ISSUESEU ISSUES
WORKPLAN PRIORITY REVIEWCHINESE MARINE POLLUTION REGS
CONDITIONS OF CLASSMERCURY IN CRUDE OILS
IMO YEAR OF THE SEAFARERFDIP
FDIPFDIP
Freight and Demurrage Information Pool
• Helps members with demurrage and other claims against charterers which are not dealt with on a timely basis
• On average, takes only 30 days from reporting a claim to the FDIP before payment is received
• Last year the FDIP assisted in the settlement of claims totalling over USD 5 million
• Annual fee is USD 1440 for entire fleet no matter how many claims are chased
• For further information contact Michele White ([email protected])
US ISSUESUS ISSUES
• Massachusetts lawsuit
• EPA Vessel General Permit
• California Air Resources Board (CARB) air emission
• Emission Control Area
• Sanctions
MASS LAWSUITMASS LAWSUIT
INTERTANKO CONCERNS
• District Court 2006 decision upholds Coast Guard authority over vessel operations in US waters
• Reinforces unanimous US Supreme Court decision in 2000 when INTERTANKO took the state of Washington to court
MASS LAWSUITMASS LAWSUIT
DEVELOPMENTS
• In July the District Court Magistrate Judge issued his recommendation to the District Court to grant the U.S. Government's motion for a permanent injunction enjoining the State of Massachusetts from enforcing the tug escort and vessel manning provisions of the states oil spill prevention regulations.
• The State of Massachusetts has objected to this recommendation
• We await the District Court’s decision
MASS LAWSUITMASS LAWSUIT
NEW DEVELOPMENT• New Mass law imposes triple the fines if an oil spill
occurs and tank vessel did not provide the state with advance notice, have a tug escort and have a state pilot on board (USD750K per day)
• State trying to indirectly regulate tank vessel operations in Buzzard's Bay, which is contrary to the Supreme Court decision in state of Washington
• USCG sent a letter expressing deep concern about the new law, but extremely unlikely they will take the lead in taking Massachusetts to court political reasons.
• If successful, will very likely be used by other states, including Washington, as a vehicle to get around the state pre-emption
EPA VGPEPA VGP
INTERTANKO CONCERNS
• Federal Court orders EPA to develop regulations for all ship discharges under NPDES permit system of Clean Water Act
• Judge acknowledges that US Coast Guard has authority under certain laws, but believes that Congress also gave authority to EPA under Clean Water Act
• Ruling has two federal agencies responsible for same subject matter
EPA VGPEPA VGPDEVELOPMENTS• VGP requirements have been effective since
February 2009.
• Environmental groups have sued EPA stating that the VGP discharge requirements, in particular those relating to ballast water, are not stringent enough.
• Lake Carriers Association, American Waterways Operators and World Shipping Council have sued EPA requesting the court to vacate the VGP
• Consideration extended until Feb 2010
• Expected outcome is that court will maintain in place the existing VGP, while remanding the VGP back to EPA for reconsideration.
CARB AIR EMISSIONSCARB AIR EMISSIONS
INTERTANKO CONCERNS
• CARB implements unilateral requirements that are not consistent with IMO standards
• Fuel switching to low sulphur fuels could have safety implications
CARB AIR EMISSIONSCARB AIR EMISSIONS
DEVELOPMENTS• June 2009 US District Court denies PMSA motion to
dismiss CARB air emission regulations for ocean-going vessels
• Court also ruled that California has the authority to apply the regulations 24 miles from their coast because they only applied to ships entering Californian ports
• PMSA to take matter to US Appellate Court
• In August San Francisco Harbor Safety Committee meeting discusses engine failures in San Francisco Bay as a result of fuel switching to comply with this CARB regulation. CARB representative at the meeting made it very clear that suspending the CARB regulation is not an option.
NORTH AMERICAN ECANORTH AMERICAN ECA
• Proposal submitted by Canada and USA to IMO MEPC 59 meeting July 2009
• Approved for circulation for adoption
• Expected to be adopted at MEPC 60 (March 2010)
• Expected to enter into force Aug 2012
• When in force:– Sulphur content 1.0% or less– Sulphur content 0.1% or less after 1 Jan 2015
SANCTIONS SANCTIONS
• Iranian sanctions
- Both houses of US Congress have passed bills
- Pertain to someone who provides ships to deliver refined petroleum products to Iran
- INTERTANKO developing charter party clause
• Ban on paying ransom to pirates
- US considering amendment to UN resolution 1844 which would ban payment of ransom to Somalia pirates
- Also considering possible Executive Order
- If either enacted, could impact ships calling in US or companies operating such ships