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PI, OWNERS AND QUALITY SHIPPING

• ROUND TABLE OCT 2004

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REPRESENTATIVE BODIES

• ICS, BIMCO, INTERCARGO, INTERTANKO, AND IMO,
  INTERNATIONAL GROUP, UGS, ETC
• ALL HAVE STRENGTHS AND WEAKNESSES AND ROLE
• SHIP-OWNER ISSUES ARE TOO IMPORTANT TO NOT DO
  BETTER RESPONDING TO THEM

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CCC ACTION

• COOPERATION
• COORDINATION
• COLLABORATION
• ACTION

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ROUNDTABLE

• WE ARE COMMITTED TO WORKING TOGETHER
• WE HAVE NO PRIDE OF AUTHORSHIP
• WE ARE INTERESTED IN CONTINUOUS IMPROVEMENT IN
  THIS FAST PACED WORLD
• WE DO NOT ACCEPT THAT THE CURRENT WAY IS THE BEST
  WAY

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PI ONE LINK IN THE CHAIN OF RESPONSIBILITY
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THE REALITY IS THAT API CERTIFICATEIS A
LICENSE TO TRADE
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WHAT IT MEANS

• GO ALMOST ANYWHERE IN THE WORLD AND BE VIEWED AS
  ACCEPTABLE AND FINANCIALLY WORTHY (the owner is
  RICH!)
• OPERATIONAL ERRORS UP TO 4 BILLION ARE COVERED,
  1 BILL OIL
• INCIDENT MANAGEMENT BY CLUB, OWNER CAN VANISH
• IT IS A QUALITY SHIP

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PI SYSTEM BASED UPON

• PRESUMPTION OF GOOD INTENT
• TRUST, ALL WILL MEET THEIR OBLIGATIONS
• SHARING OF RISKS, POOLING AND BUYING POWER
• OWNER PAYS SOME SEMBLANCE OF HIS REAL COST TO THE
  SYSTEM
• EACH OWNER/OPERATOR OPERATES RESPONSIBLY

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SO ?
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Looks can be deceiving
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And again
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COMMON THREADS

• MOST VESSELS FULLY CLASSED
• ALL PRESENTED AS GOOD MEMBERS
• MOST ARE OPERATING
• ALL WANTED TO JOIN IG
• THESE ARE NOT UNIQUE

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WOE REJECTION RATE

• APPROXIMATELY 2-3 OF VESSELS PRESENTED TO WOE
  GET REJECTED
• WHAT HAPPENS TO OUR KNOWLEDGE?
• WHERE DO THEY GO?
• WE REINSURE SOME

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THE SUBSTANDARD CONCERN THE BETTER THAN BAD

• WHAT ABOUT THE SHIPS THAT ARE NOT THIS BAD?
• THE ONES WITH
• INADEQUATE CREWS
• MARGINAL MAINTENANCE
• DISAPPEARING OWNERS
• WHAT ARE THEY?
• ARE THEY IN THE GROUP?

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CLUBS ARE ACTING

• THERE ARE MORE SURVEYS
• NOT UNIFORM IN THE GROUP
• DO THEY GO FAR ENOUGH?
• DO THEY COVER THE OFFICE OPERATION?
• NOT ALL CLUBS ARE EQUALLY TOUGH

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PI IS ONE LINK IN CHAIN OF RESPONSIBILITY

• APPROXIMATELY 25 OTHERS
• PI IS A VITAL ONE
• LICENSE TO TRADE
• EVERY SHIP-OWNER HAS A STAKE IN THE SUBSTANDARD
  GROUP SHIP
• WE ARE NOT JUST LOOKING TO PI

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HOW MANY VETTINGS IS ENOUGH?CAN NOT KEEP
ADDINGOTHER LINKS IN CHAIN HAVE FAILED
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• Gothenburg, Oct 25 -- The Norwegian pilot who
  arrived on board to assist the master of
  chemical/oil carrier MCT Alioth (12358 gt, built
  1999) after it had berthed at Mongstad terminal
  found the Russian master so drunk that he decided
  to take over the command of the vessel. The pilot
  contacted the police ashore and dropped the
  anchors in the fairway. The vessel is not allowed
  to leave this position until a new master has
  arrived on scene. The vessel has been fined
  Nk5,000. -- Westax Marine Services AB.

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WE NEED FROM PI(and other links) (must get)

• BETTER COOPERATION, COORDINATION, COLLABORATION,
• RECOGNITION OF KEY ROLE TAKE INITIATIVE
• WORK WITH OWNERS GROUPS EARLY
• IMPROVE GOVERNANCE TO BE MORE OWNER RESPONSIVE
• SPEED OF RESPONSE TO ISSUES

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SPECIFICALLY

• MAKE CONCRETE AND SUBSTANTIVE PROPOSALS FOR
  IMPROVEMENT
• WORK TO OVERCOME ROAD BLOCKS WITHIN GROUP (1
  VETO)
• REVISIT GROUP GOVERNANCE AND OPERATION
• WORK WITH OWNER GROUPS ON ISSUES IMMEDIATELY eg
  CLC

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• REQUIRE SURVEYS FOR LOWER QUALITY VESSELS
• EXCHANGE INFORMATION ON VESSELS (AND OWNERS?)
• EVALUATE OWNER DISINCENTIVES FOR LOSSES
  (INCENTIVES FOR QLTY)
• GROUP AUDIT PROCESS
• DEAL PROACTIVELY WITH BRUSSELS

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• AGREE AND ENFORCE MINIMUM STANDARDS
• ESTABLISH FINANCIAL CAPABILITY STANDARDS FOR
  OWNERS (????)

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GROUP IS HUGE ASSET

• WE REALLY APPRECIATE THAT THE CLUBS AND GROUP ARE
  A BIG ASSETWORLD TRADE IS MADE POSSIBLE
• PROTECT BEST PARTS, IMPROVE THE OTHERS
• WHERE AND HOW DO INITIATIVES FOR IMPROVEMENT COME
  FROM?

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CLUBS AND GROUP HAVE NARROW MANDATE

• ARE THESE PROPOSALS WITHIN MANDATE?
• ARE THEY APPROPRIATE?
• HOW ELSE GET SAME OUTCOME?

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COR

• CHAIN OF RESPONSIBILITY
• EVERY LINK MATTERS
• AT THE ROUND TABLE WE WANT ALL THE LINKS TO LIVE
  UP TO THEIR RESPONSIBILITIES
• IN TODAY'S WORLD THAT MEANS
• CONTINUOUS
  IMPROVEMENT

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CONTINUOUS IMPROVEMENT

• WE NEED TO INSIST UPON THE SAME COMMITMENT TO
  CONTINUOUS IMPROVEMENT THAT RESPONSIBLE
  SHIP-OWNERS HAVE
• WE MUST INSIST UPON RESPONSIBLE SHIP-OWNERS

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CONCLUSION

• THIS IS 2005
• BUSINESS AROUND THE WORLD IS UNDER INTENSE
  SCRUTINY, HELP OURSELVES NO ONE ELSE WILL
• ACCEPT THE NEW WORLD
• CCC ACTION