Erik'Ranheimintertanko'com

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• Erik.Ranheim_at_intertanko.com
• Manager Research and Projects
• Main issues facing the tanker industry
• China Logistics 19 October 2005

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INTERTANKO
The International Association of Independent
Tanker Owners For Safe Transport, Cleaner Seas
and Free Competition

• Spokesman/representative
• Service/advice
• Meeting place

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Representation

• IMO, International Chamber of Shipping
• UNCTAD, Oil Companies International Marine Forum
• IACS, International Assoc. of Classification
  Societies
• OECD/IEA of PI Clubs
• Brussels.
• Washington
• ..

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INTERTANKO Membership

• 255 Members
• 2,380 tankers
• 192 million dwt
• 40 countries
• 70 of independent fleet
• 280 Associate Members

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Main issues facing the global tanker industry

• Safety performance
• Current maritime regulatory environment
• Players in the tanker industry
• Challenges ahead

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Environmental concerns
Zero tolerance
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Tanker incidents down
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Reported tanker incidents 1978 - 2005
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Reported tanker incidents 9 ms 2005 - total 104
HullMachinery (18 engine, 2 hull)
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Tanker pollution down
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Accidental pollution from tankers oil spilt per
tonne mile 1990 - 2005
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Accidental oil spills from tankers Major
structural accidents - 000 tonnes
Source INTERTANKO/ITOPF
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Tanker accidental oil spills down 80
ts spilt
000 bn tonne-miles
99.9999 of the oil arrived safely
Source ITOPF
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Oil pollution into the sea Maritime sources
Source GESAMP
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Total losses down
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Tanker total losses by size
No
60 below 60,000dwt
1988 1996 29 CTLs 1996
2005 14 CTLs
Source Clarkson Shipyard Monitor/INTERTANKO
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Tanker and bulker total losses

Source Clarkson Shipyard Monitor/INTERTANKO
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Explosions
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Large tankers explosion before IGS requirements
1983/1985

• Tanker Size dwt Year
• Seatiger, 123,692 1979, 2 fatalities
• Atlantic Empress 292,666 1979, 29
• Energy Determination 321,186 1979 , 1
• Albahaa B 239,410 1980, 6
• Mycene 238,889 1980, 6

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Recent tankers explosion

• Tanker Size GT Year
• Bow Mariner 22,587 2004, 21 fatalities
• Vicuna 23,197 2004, 2
• NCC Mekka 6,499 2004 , 2
• Panam Serana 6,499 2004 , 2
• Sun Venus 4,356 2004, 2
• Sunnny Jewel 4,386 2004, 3
• Isola Azura 9,383 2005, 2

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Tanker Explosion 2001-2005
25/20 15/7 13/24 8/3 8/3
Source Informa/INTERTANKO
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Average age down
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Tanker incidents and age development

SourceLMIS/Informa/INTERTANKO
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Tanker pollution and age development
Years
000 ts
SourceLMIS/Informa/INTERTANKO
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Tanker fleet double-hull development

Source Fearnleys/INTERTANKO
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• In shipping high standards reflect the quality of
  the owner not the regulatory regime
• Erik Murdoch
• Director of Risk Management, The Standard PI
  Club

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Regulatory Environment
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Poseidon challenge

• Leading members of our community, politicians,
  regulators and charterers alike, appear to be
  digesting the fact that mere legislative or
  penalising measures are already reaching their
  limitations as a driver for further improvement.
  Many have even started to express their concerns
  that all such externally imposed controlling
  devises are becoming counterproductive or even
  harmful.
• Emmanuel Vordonis, Executive Director Thenamaris
  Ships Management,
• Member of INTERTANKOs Executive Committee

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Regulation vs self regulation
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Regulating safety
Self regulation
Compliance culture Bureaucracy Check list
mentality stops initiative
Confusion Lack of global standards
Right balance provide the best safety culture
Alienation Lack of motivation and
flexibility Procedures purely to meet reg. req.
Unsafe - Chaos
Formal regulations and controls
Source INTERTANKO
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Chain of Responsibility
SHIPOWNER
CLASS SOCIETIES
CHARTERER
SHIPYARDS

• Governments Law, Courts, Insurers

CARGO OWNER
INSURERS
PORTS TERMINALS
TRAFFIC MANAGEMENT
FLAG STATES
For the system to work, liability has to be
shared
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Challenges
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Challenges to the industry

• Supremacy of IMO International Maritime Law
  versus regional and local legislation
• Liability - moves to open up CLC/Fund Convention
• Annex VI implementation
• Criminalising accidental pollution - Penal
  sanctions adopted by EU
• Common Structural Rules Goal Based Standards
• Ship Recycling
• Ballast water management
• Security - (ISPS costs to be reflected in
  Worldscale)
• Phase out

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MARPOL Annex VI Air emissions - how to ensure
compliance

• All ships of 400GT and above
• Entered into force May 19th, 2005
• Existing ships no later than 1st scheduled
  drydocking or no later that May 2008
• New ships 19 May 2005
• Areas to be considered
• SOx/fuel quality
• NOx spare parts and repairs
• VOC vapour return lines new technologies
• Incinerators (type approved )
• Bunkering procedures
• Bunker Delivery Note
• Sample
• Ships Note to Flag States reports on
  non-compliance
• Fuel switch for use of LSF in SECAs

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Ratification

• Ratified by 22 Governments that have a combined
  tonnage over 50 of World tonnage
• Azerbaijan, Bahamas, Bangladesh, Barbados,
  Bulgaria, Cyprus, Denmark, Finland, Germany,
  Greece, Japan, Liberia, Marshall Islands, Norway,
  Panama, St. Kitts and Nevis, Samoa, Singapore,
  Spain, Sweden, United Kingdom, Vanuatu.
• Not ratified by for example
• China, S Korea, France, Netherlands, Middle East
  Countries, US
• Bunkering in a non party port followed by a
  call in a party port Potential source of
  trouble out of ships control

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Criminalisation

• Traditionally accidents have been regarded as
  quite distinct from deliberate acts
• Attitudes have changed (scapegoat mentality)
  ref. Captain Mangouras, ERIKA, The Karachi Eight
  TASMAN SPIRIT
• EU Directive on Ship-Source Pollution (despite
  wide industry coalition) Canadian Bill C-15 US
  approach (whistle blowing, enormous fines and
  rewards

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IACS Common Rules for Tankers as from April 2006

• INTERTANKO initiative started more than five
  years ago
• Objectives were to
• eliminate class competition on scantlings
• embrace the intentions of goal-based standards
• meet the requirements of industry and the
  shipyards
• will apply for double hull tankers of 150 m and
  above.
• Ships should be designed with a fatigue life of
  25 years based on N Atlantic winter conditions,
  with corrosion additions also based on 25 years,
  at least equivalent to or even in excess of all
  current Class regulations.

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Ship Recycling
Industry Code of Practice (1999)
ILO Basel Guidelines

• Shipping Industry Feedback
• Workable
• Practical
• Objectives Met

IMO Guidelines (2003)
Consideration of Mandatory Elements

• Market Forces
• Shipping Industry
• Green Recycling

International Ship Recycling Convention
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Ballast Water Management Meeting the Treatment
Standard Treatment Technology

• Meeting the Treatment Standard
• Ballast Water Exchange and/or Treatment
  Technology

Ships Constructed before 2009 with BW capacity
1500-5000, treatment technology in use after 2014
Ships Constructed before 2009 with BW capacity
less than 1500 and greater than 5000, treatment
technology in use after 2016
Phase in for Treatment System Installation (B-3)
Ships Constructed on or after 2009 with BW
capacity less than 5000, treatment technology in
use from 2009
Ships Constructed after 2009 but before 2012 with
BW capacity greater than 5000, treatment
technology in use after 2016
Ships Constructed at 2012 or after with BW
capacity greater than 5000, treatment technology
in use after 2012
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Ballast Water Management Meeting the Treatment
Standard Treatment Technology

• Case Studies
• 40,000dwt Product Tanker to be delivered July
  2007
• Ballast water capacity greater than 5000m3 so
  will be able to conduct ballast water exchange
  until 2016, when it will then have to have been
  retrofitted with a ballast water treatment
  system.
• B) 8,000dwt Chemical Tanker to be delivered July
  2007
• Ballast capacity of less than 5000m3 but greater
  than 1500m3, will have to be retrofitted with a
  ballast water treatment system by 2014.
• Existing VLCC delivered 2003
• Ballast water exchange until 2016, retrofitted
  after 2016. BUT, if prototype system installed
  and test programme approved by IMO, 5 year
  exemption given, upgrade system in 2021.

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Phase out history

• In the aftermath of Exxon Valdez, 0n 18 August
  1990, the US President signed into law the US Oil
  Pollution Act of 1990 (OPA 90). This was the
  first regulation which has mandated double hull
  design for tankers with a building contract after
  30 June 1990 and with a delivery after 31 Dec.
  1992
• First IMO phase out initiated by the US OPA 90 -
  ratified by IMO March1992 - enforced as from July
  1993
• Accelerated IMO phase out initiated by Europe as
  a result of the ERIKA accident outside France -
  ratified by IMO April 2000 - enforced as from
  September 2001
• Further acceleration of IMO phase out initiated
  by Europe as a result of the PRESTIGE accident
  outside Spain - ratified by IMO December 2003,
  enforced as from April 2005 - enforced by Europe
  as from October 2003
• The European Unions Regulation (1726/2003) on
  single hull tankers took effect on 21st October
  2003
• Both ERIKA and PRESTIGE carried Heavy Fuel Oils
  that can pollute up to ten times more than crude
  oil.  IMO therefore adopted a new regulation
  Regulation 13H of Annex I of MARPOL 73/78
  banning the carriage of heavy grade oil as cargo
  in single hull oil tankers as from 5 April 2005.

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Phase out Regulations

• 13G
• Category 1 - non PL/SBT (pre-MARPOL) tankers out
  by 2005
• Category 2/3 out by 2010 or 2015 subject to
  administrations
• Double bottom or side tankers until 25 years
• 13H
• Heavy grades of oil in double hull tankers
• Provisions for some heavy crude oils, double
  bottom/side tankers and domestic trade
• OPA90 schedule/size limit different
• Conversion to PL/SBT - DH
• Annex II revision not phase out, but will shut
  SH tankers out of vegoil trades as from 2007

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Phase out

• Special provisions
• 13 G (5) - double bottom/sides - CAS requirement
• 13 G (7) - SH trading beyond 2010/25 years
• 13 G (8) (b) entry into ports or offshore
  terminals (provisions (5), (7)
• 13 H (5) - double bottom/sides - trading beyond
  2010/25 years
• 13 H (6) (a) - crude oil having a density at 15ºC
  higher than 900 kg/m3 but lower than 945 kg/m3
• 13H (6) (b) - 600 tons dwt and above but less
  than 5,000 tons dwt - SH until 25 years
• 13 H (7) - exclusively within an area under its
  jurisdiction,
• 13 H (8) (b) entry into ports or offshore
  terminals (provisions (5), (6)

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Implementation policies
Source WWW.INTERTANKO.com
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Conclusion

• Strong industry performance, but no complacency
  
• Zero tolerance to oil pollution
• Formal Regulations must provide room for
  flexibility and new initiatives
• Most pending regulations are common industry
  regulations
• Industry challenge to ensure global standards and
  regulations
• Cooperation with all the members in the maritime
  responsibility chain will provide the best results

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INTERTANKOs aim

• Strong responsible, sustainable and respected
  industry able to influence its own destiny