The International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, has welcomed the decision by the European Commission competition directorate to close its investigation into the activities of the International Group of P&I Clubs.

ICS Director of Legal Affairs, Kiran Khosla remarked: “ICS has always firmly stated that the current system of mutual third party liability insurance provided by the International Group continues to serve the best interests of ship operators and their customers extremely well, alongside serving the interests of claimants and the general public. In particular, the mutual insurance arrangements provided by the Clubs enable the provision of the very high levels of insurance required under international liability conventions, under which compensation to claimants is generally paid regardless of fault and without legal wrangles.”

ICS has closely followed the European Commission’s investigations of the activities of the IG, the Commission having opened formal proceedings in 2010. The Commission had stated that it was simply conducting an investigation, and that this did not imply that there was ever any proof of infringement. The Commission had also advised that it had opened the investigation on its own initiative and that it had not received any formal complaints.

In bilateral discussions with the Commission, ICS and the European Community Shipowners’ Associations (ECSA) have previously emphasised that the mutual insurance arrangements provided by the P&I Clubs are efficient and cost effective.

“We are very pleased that the Commission officials involved now appear to understand the benefits of the current system.” said Ms Khosla.

The International Chamber of Shipping (ICS), which represents all sectors and trades and over 80% of the world merchant fleet, has called on the International Maritime Organization (IMO) to address some critical issues concerning the imminent implementation of the IMO Ballast Water Management (BWM) Convention.
Despite delays by governments with respect to ratification, the 2004 BWM Convention, which is intended to prevent damage to local ecosystems by invasive species of marine micro-organisms carried in ships’ ballast water, is expected to enter into force within the next two years.

ICS Director of Regulatory Affairs, David Tongue, explained: “Shipping companies represented by our member national associations have serious concerns about the availability of suitable ballast water treatment equipment, the robustness of the type approval process and, above all, the difficulties of retrofitting tens of thousands of existing ships within the time frame established by the BWM Convention.”
In an important submission to the IMO Marine Environment Protection Committee, which meets in October, ICS has requested that the issue of fixed dates for the retrofitting of expensive new equipment by large numbers of ships, perhaps as many as 60,000, needs to be addressed urgently. ICS believes that a serious discussion is needed at IMO before the Convention enters into force.

In particular, in view of the bottlenecks that will be created when the Convention enters in force, with many ships having to be retrofitted either before their next special survey or their next intermediate survey, ICS has proposed that the IMO should modify the BWM Convention’s requirements so that existing ships should not be required to be retrofitted with treatment equipment until their next full special survey. In view of the pressures on shipyards that will need to fit the equipment, this would smooth out implementation over a 5 year timeline around the date of entry into force of the Convention, rather than two or three years as at present.

Moreover, in order to make it possible for other ships to be retrofitted within the required timeline, ICS proposes that ships approaching their 4th special survey should be exempted from the equipment requirements.

Mr Tongue added: “Given that the costs of fitting the treatment equipment may be in the order of 1 to 5 million dollars a ship, it does not make economic sense for older ships approaching the end of their lives to incur this huge expenditure. However, the impact on the environment of exempting them would be negligible since these ships will still be required to perform deep water ballast exchange at sea for the 2 or 3 remaining years that most of them will continue to operate.”

In the event that IMO does not accept the suggestion that ships should not be required to retrofit until their next 5 year renewal survey, ICS suggests that ships over 18 years old should be exempted from the equipment requirements.

In practice, changes to the BWM Convention cannot be adopted until after it enters into force, but given the importance of ensuring smooth implementation ICS sees no reason why IMO cannot agree provisional changes with respect to detailed implementation in advance.

In a separate submission to IMO, ICS has requested that IMO considers modifying its current draft guidelines for type approval of equipment, and for ballast water sampling and analysis that will be used by port state control, so that as far as possible they are comparable with those recently adopted by the United States.

David Tongue commented: “A large proportion of the fleet will have to comply with the US requirements which cannot be changed. For the sake of global uniformity we think it would be helpful if the relevant IMO Guidelines can be modified.”

A most important consideration, according to ICS, is that the US standards for type approval of equipment, under its Environmental Verification Program, are far more robust than the IMO equivalent. Some of the equipment which has already been approved in line with original IMO standards has already had to be withdrawn because it has been demonstrated not to deliver the agreed IMO ‘kill standard’ for removing unwanted marine micro-organisms.

The International Maritime Pilots’ Association (IMPA) and the International Chamber of Shipping (ICS) have joined forces to update a brochure aimed at shipping companies and seafarers, reminding them of the vital need to ensure that ladders used for pilot transfers are safe and always rigged correctly.

The revised brochure – ‘Shipping Industry Guidance on Pilot Transfer Arrangements’ – is supported by a wide range of other international shipping bodies. It takes account of the latest amendments to the Safety of Life at Sea Convention (SOLAS) concerning pilot ladders, which came into effect on 1 July 2012.

IMPA Secretary General, Nick Cutmore, explained: “Sadly, pilots continue to lose their lives as a result of accidents while boarding or disembarking from ships, and many more have been seriously injured. We are therefore very pleased by the support we have received from ICS, as well as from other industry organisations and unions, in helping to promote the message to seafarers and to shipping company management about the vital need to rig pilot ladders safely in accordance with SOLAS.”

ICS Secretary General, Peter Hinchliffe, added: “When pilots come aboard ships it is to help seafarers during critical and demanding phases of a voyage. It is incumbent on ship operators and their crews to do everything possible to ensure safety during pilot transfer operations, which always involve a degree of risk, even when conditions are good. Some common causes of accidents still appear to be defects in the structure of the ladder treads or ropes, or a lack of a proper securing of the ladder to the ship.”

The updated guidance is being distributed throughout the industry by the national shipowners’ and pilots’ associations that make up the memberships of ICS and IMPA. The brochure is also supported by the International Group of P&I Clubs, BIMCO, CLIA, Intercargo, IPTA, Intertanko, OCIMF, SIGTTO, ITF, IFSMA and the Nautical Institute.
An electronic copy of the IMPA/ICS brochure can be downloaded from the IMPA and ICS websites.

Low sulphur switch will have billion dollar implications says ICS

The International Chamber of Shipping (ICS), whose 36 member national shipowners’ associations represent all sectors and trades and more than 80% of the world merchant fleet, has called on the International Maritime Organization (IMO) to accelerate a critical study into the global availability of low sulphur fuel for ships.

ICS has been expressing concern for some time about whether sufficient fuel will be available to allow ships to comply with strict IMO regulations aimed at reducing sulphur emissions and whether, as result of insufficient supply, the costs for those ships which are able to obtain the required fuels might be prohibitively expensive.

In an important submission to the IMO Marine Environment Protection Committee (MEPC), which meets in October, ICS is once again pressing IMO to start work now on a study that can consider the impact all of the major changes required by the new MARPOL regime, before it is too late for the oil refining industry to respond and invest.

There is already a formal mechanism in MARPOL Annex VI for IMO to complete a review, by 2018, of progress made towards meeting the demand for 0.5% sulphur fuel that must be used globally outside of Emission Control Areas (ECAs) by 2020 or 2025. However, ICS stresses that the enormity of the switch to distillate and its economic impact on shipping should not be underestimated.

ICS Secretary General, Peter Hinchliffe said: “Governments will surely want to avoid any perception that a blind eye has been turned to the practical implementation of the measures as the issue of fuel availability becomes increasingly pressing. It is essential that a global fuel availability study is carried out sufficiently in advance of 2020 in order to give the refiners adequate time to invest and react. The major refinery upgrading required could take a minimum four or five years, perhaps longer, and we fear that completing the study in 2018 would simply be too late.”

He added: “The need to move forward the IMO study is more important than ever now that the European Union has signalled that it will definitely implement the 0.5% requirements in 2020, even if the IMO study results suggest, as permitted by MARPOL, that full implementation should be postponed until 2025 to ensure the availability of sufficient quantities of compliant fuel.”

In its submission to IMO, ICS has suggested that a preliminary IMO study of the availability of compliant fuel, taking into account the introduction of the 0.1% sulphur in fuel requirements to be used in the Baltic Sea, North Sea and the North American ECAs in 2015, would provide a suitable test case. Such a study would provide a projection of possible scenarios resulting from the introduction of the 2015 0.1% ECA standard, against the background of the world market. This could then be considered in comparison with the real situation encountered in 2015.

Mr Hinchliffe emphasised: “When the global requirement to switch to distillate was adopted four years ago, ICS supported the agreed IMO timetable as an acceptable compromise. But if the switch to low sulphur fuel is to be successful, those governments that advocated such ambitious goals need to do everything possible to help ensure that the refineries are able to deliver. We strongly believe this means undertaking the required studies of fuel availability as soon as possible.”

Fuel is by far the largest operational cost for shipowners and has already increased in price by about 300% since 2000. However, the current 50% price differential between low sulphur distillate and the residual fuel oil that is currently in use is predicted to increase further if the new demand that will be created by the MARPOL requirements is not matched by increased supply. (Exhaust gas cleaning systems or ‘scrubbers’ have been predicted to cost in excess of US$2 million per engine if fitted on board larger ships. However, it is still unclear whether these will be technically, environmentally, or economically viable for use on a widespread basis before the 2015 or 2020 deadlines).
—ends—

Notes To Editors:

• Timetable for new limits to sulphur content in ships’ fuel agreed by IMO (2008 amendment to MARPOL Annex VI):
2010 – Emission Control Area ( ECA ) limit reduced to 1%
(from 1.5%)
2012 – Global limit reduced to 3.5% (from 4.5%)
2015 – ECA limit reduced to 0.1%
2020 – Global limit to 0.5% but a review in 2018, with authority to delay implementation, will determine whether this is achievable.
2025 – Global limit to 0.5% notwithstanding the result of the 2018 review.