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Latin American Panel November 6, 2013

Latin American Panel November 6, 2013. INTERTANKO OVERVIEW JOSEPH ANGELO DEPUTY MANAGING DIRECTOR. MEMBERSHIP BUDGET SECRETARIAT CURRENT MAJOR ISSUES OCIMF SIRE WG/INTERTANKO VC ANNUAL TANKER EVENT. MEMBERSHIP 220+ Members 3,000+ Tankers 270+ Million DWT Members in 40+ countries

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Latin American Panel November 6, 2013

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  1. Latin American PanelNovember 6, 2013 INTERTANKO OVERVIEW JOSEPH ANGELO DEPUTY MANAGING DIRECTOR

  2. MEMBERSHIP BUDGET SECRETARIAT CURRENT MAJOR ISSUES OCIMF SIRE WG/INTERTANKO VC ANNUAL TANKER EVENT

  3. MEMBERSHIP 220+ Members 3,000+ Tankers 270+ Million DWT Members in 40+ countries 300+ Associate Members

  4. INTERTANKO Membership

  5. BUDGET 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

  6. SECRETARIAT 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

  7. CURRENT MAJOR ISSUES • Sustainability • Five-Year Strategic Plan Ballast water management Piracy Greenhouse gas emissions

  8. SUSTAINABILITY • 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

  9. 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

  10. TC equivalent and emission at various speeds $/day Tonnes CO2 emisson

  11. SUSTAINABILITY • 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

  12. 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 campaign 3. Submit to May 2013 Council meeting for approval

  13. 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

  14. 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

  15. Pilot study results - Demurrage

  16. SUSTAINABILITY Sept 2013 – INTERTANKO Executive Committee 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. 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

  17. Five-Year Strategic Plan 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

  18. 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)

  19. Significant reduction of piracy incidents off Somalia • Better industry compliance with BMP4 • Enhanced military strategy and tactics • Enhanced use of armed guards

  20. BEST MANAGEMENT PRACTICES (BMP) Three essential requirements that cannot be over emphasized: • Register with MSCHOA • Report to UKMTO • Implement Self Protection Measures

  21. 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 ships • INTERTANKO does not advocate the arming ships' crews • INTERTANKO 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

  22. IMO 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

  23. 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)

  24. ISO • 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

  25. 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

  26. 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

  27. 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

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

  29. West Coast of Africa • In addition, UK Foreign Office and OCIMF working together on launching a co-ordinationcenter 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

  30. GREENHOUSE GAS EMISSIONS • 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

  31. OPERATIONAL EFFICIENCY (US) – Three phases Data collection to determine the baseline Trial period to establish practical rating system Required operational efficiency scheme EUROPEAN COMMISSION APPROACH Develop details of “monitoring, reporting and verification (MRV) system” 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

  32. 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.

  33. TANKER VETTING 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

  34. 50% Discount* 50% discount for members - order your copy through www.witherbyseamanship.com * Members Only

  35. 2014 ANNUAL TANKER EVENT Venue – New York City Dates – May 5 - 9, 2014 Events: Executive Committee Meeting Council Dinner and Meeting Annual General Meeting Gala Dinner Tanker Seminar Workshop

  36. THANKYOU!! WWW.INTERTANKO.COM

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