European Commissions’ Proposals on the Safety of the Seaborne Oil Trade (Euro OPA)

1. European Commissions’ Proposals on the Safety of the Seaborne Oil Trade (Euro OPA) - implications/issues SSY Monte Carlo Tanker Event, 2000

2. SSY Monte Carlo Tanker Event, 2000

3. Response to ‘Erika’ SSY Monte Carlo Tanker Event, 2000

4. European Concerns Post ‘Erika’ • “Public opinion is no longer prepared to tolerate such accidents” • That vessels considered unsuitable for the US will switch to European trading (post OPA) • “Manifestly sub-standard vessels should be banned” • Single hull ships should be banned SSY Monte Carlo Tanker Event, 2000

5. EC Age Concerns Post ‘Erika’ • “Some ships pose a manifest risk to maritime safety because of their age, flag and history” • “The Erika disaster demonstrates the risk presented by old ships” • “There is a general correlation between age and accidents to ships” SSY Monte Carlo Tanker Event, 2000

6. Tanker Total LossesJan 1992 - March 1999 77 vessels Source: European Commission SSY Monte Carlo Tanker Event, 2000

7. Voyage Market Handysizes Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

8. Voyage Market Handymaxes Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

9. Voyage Market Panamaxes Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

10. Voyage Market Aframaxes Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

11. Voyage Market Suezmaxes Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

12. Voyage Market VLCCs Average Age by Main Discharge Area SSY Monte Carlo Tanker Event, 2000

13. Proposed European RegulationsImpact Upon Single Hull Vessels SSY Monte Carlo Tanker Event, 2000

14. Problem With Published Data - What is it showing? SSY Monte Carlo Tanker Event, 2000

15. Small TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

16. Small Tanker Fleet - year of build hull configuration (no of ships) Average age = 19 years SSY Monte Carlo Tanker Event, 2000

17. Handy TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

18. Handy Tanker Fleet dwt- year of build hull configuration (no of ships) Average age = 19 years SSY Monte Carlo Tanker Event, 2000

19. Handymax TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

20. Handymax Tanker Fleet- year of build hull configuration (no of ships) Average age = 10 years SSY Monte Carlo Tanker Event, 2000

21. Panamax TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

22. Panamax Tanker Fleet - year of build hull configuration (no of ships) Average age = 17 years SSY Monte Carlo Tanker Event, 2000

23. Aframax TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

24. Aframax Tanker Fleet- year of build hull configuration (no of ships) Average age = 12 years SSY Monte Carlo Tanker Event, 2000

25. Suezmax TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

26. Suezmax Tanker Fleet- year of build hull configuration (no of ships) Average age = 13 years SSY Monte Carlo Tanker Event, 2000

27. VLCC TankersHull Configuration SSY Monte Carlo Tanker Event, 2000

28. VLCC Tanker Fleet - year of build hull configuration (no of ships) Average age = 13 years SSY Monte Carlo Tanker Event, 2000

29. Proposed European RegulationsEstimated Vessel Replacements (no. of ships) SSY Monte Carlo Tanker Event, 2000

30. Proposed European RegulationsEstimated Vessel Replacements (% of fleet) SSY Monte Carlo Tanker Event, 2000

31. European Criticisms of Practice • “No significant difference between freight rates for young and old tankers” • “Prices often dictated by cheapest oldest tonnage” • “Difficult to make quality pay” • “Low cost operators gaining market share at expense of long standing companies - entailing a risk for safety” SSY Monte Carlo Tanker Event, 2000

32. European Criticisms of Practice • “Other players are implicated in the phenomenon of sub-standard shipping - in particular the cargo owners” • “The fact that ships of appalling condition continue to to be employed for transportation of oil shows that charterers do not have sufficient disincentives to give up their intolerable practice of deliberately selecting low quality tonnage” • “Shipowners of convenience only exist because there are charterers who care little about the quality of ships they charter” SSY Monte Carlo Tanker Event, 2000

33. European Message to Oil Co.s • “...oil companies without waiting the adoption of the first package of directives should undertake by voluntary agreement to refrain in future from chartering tankers older than 15 years (unless appropriate inspections show them to be in a satisfactory condition) ...” SSY Monte Carlo Tanker Event, 2000

34. European Message to Class Soc.s • Proliferation of class societies with varying standards • “Not all IACS members meet the requisite high standards” • EC concerned that performance of class soc “does not always meet the standards required” • Increase tendency for “class hopping” SSY Monte Carlo Tanker Event, 2000

35. Other Key European Messages • Normal framework for international action on maritime safety under the IMO “falls short of what is needed to tackle the causes of such disasters effectively” • Deplores widespread use of flags of convenience • Criticism of ‘Atomisation’ of ownership and use of ‘brass plate’ companies • Difficult to identify financial interests and decision makers responsible for operation of ships SSY Monte Carlo Tanker Event, 2000

36. Likely Outcome • Oil Co.s will tighten up their chartering policies • The demand for modern tonnage will be greater • If the European proposals succeed other countries (e.g. Japan, Australia) may follow • The increase requirement for new tankers may therefore be even higher • New ships continuing to get premiums over old • Owners finally being paid fairly for quality SSY Monte Carlo Tanker Event, 2000