IMO rules should be subject to impact and sustainability assessment says ICS

There are some clearly identifiable steps which need to be taken to enhance shipping’s already very impressive record of maritime safety, according to International Chamber of Shipping (ICS) Secretary General, Peter Hinchliffe.

Speaking at the IMO Alternative World Maritime Day Event in Bahrain this week, Mr Hinchliffe stressed the need for mandatory provisions to provide a place of refuge for ships in need of assistance, plus timely and obligatory reporting of casualty investigations by Flag States to the International Maritime Organization (IMO). This would replicate the handling of aviation incidents.

Environmental protection and crew and passenger safety can be addressed better by raising the current level of guidance on providing a place of refuge to a new level of obligation, he said.

Pointing out that accidents may happen even under the most stringent regulatory regimes, Mr Hinchliffe said the industry’s ability to learn from such incidents was hampered when accident investigations were not conducted in a timely fashion or the outcomes were not reported to the IMO.

“The track record of rapidly decreasing environmental impact by the shipping industry is the most powerful measure of the steady increase in the safe design, construction and operation of ships,” he told those attending the IMO event.

Sustainability, as highlighted by the recent United Nations Rio+20 Summit on sustainable development, is also a key issue for shipping he explained, stressing that safety, environmental protection and the global quest for reduced dependence on fossil fuel are “inextricably linked”.

Careful adjustment in key areas will ensure that shipping remains a top performer with respect to the environmental pillar of sustainability for the foreseeable future, said Mr Hinchliffe.  But he also championed the need for a formal “impact and sustainability assessment” that will allow IMO to take full account of economic sustainability when drafting new maritime legislation. “The subject of impact assessment has been recognised at IMO but we have yet to see this being transformed into reality,” he said, adding that this issue also puts the spotlight on the argument against regional and local legislation which cannot possibly take into account its impact on international trade.

“Without shipping the world’s social and economic sustainability is in real jeopardy,” warned Mr Hinchliffe “Ninety percent of world trade is carried at an environmental cost of three percent of the world’s CO2 inventory and it doesn’t take a big conceptual leap to see that, with legislation already in place or awaiting ratification, the environmental influences of shipping are managed and limited already.”

ICS is concerned about proposals on environmental salvage and the York Antwerp Rules

Following a meeting of its Insurance Committee today, the International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, has reiterated its firm opposition to proposals from the International Salvage Union (ISU) for a new separate award for ‘environmental salvage’, in cases where salvors have carried out operations in respect of a ship or cargo which has presented a threat of damage to the environment.

ICS is also very concerned about controversial proposals with respect to the future for the York Antwerp Rules on General Average.

Both topics will be considered by the Comité Maritime International (CMI), the international association for maritime lawyers, which is holding its conference in Beijing next week, at which ICS will be represented.

“ICS remains deeply sceptical about the proposal for a separate environmental salvage award, especially as salvage services are already generously rewarded under the present system.” said the ICS Insurance Committee Chairman, Matheos Los.

In co-operation with the International Group of P&I Clubs, ICS leads shipowner representation on salvage issues, particularly in relation to the smooth operation of the Lloyd’s Open Form (LOF).

ISU maintains that its proposal will allow for a “merit” based award for salvors’ services to avoid or minimise damage to the environment which, they say, the present system with SCOPIC, a tariff based-system of financial reward, does not provide.

However, ICS contends that the IMO Salvage Convention, and indeed Lloyd’s Open Form which is based on the Convention, already provides for a system that allows for recognition of environmental benefit and which, with SCOPIC, provides for a generous financial reward to salvors.

ISU wishes to have a standalone environmental award in addition to the traditional property award.  This would apparently be based on an assessment of the theoretical benefits of savings made to the environment.

However, the concern of ICS is that inevitably such an award would require the introduction of expert evidence with complicated tools, as has been seen in US Natural Resource Damage Assessment cases.  Such an assessment would not only prove complicated and costly but would ultimately prolong the awards process.

“Such a complicated and drawn out process would be in no one’s interest, not least the salvors, who in any event have previously expressed great satisfaction with the current SCOPIC regime,” said Mr Los.

A working group established by the Lloyd’s Salvage Group in which ICS participates, reached a stalemate following the ISU’s inability to demonstrate that its proposal would improve salvage response, or indeed deliver cost savings to those paying for salvage services.  Somewhat surprisingly however, in view of the generally unenthusiastic response from interested parties in the industry, the ISU succeeded in persuading the CMI to give consideration to its proposals for a revision of the IMO Salvage Convention and to amend the Lloyd’s Open Form.

Mr Los remarked: “Given this lack of consensus – or indeed consensus amongst national maritime law associations, many of whom appear to share ICS’s and insurers’ doubts – ICS very much hopes that CMI will take proper account of shipowners’ views at its important meeting in Beijing.”

At the CMI Conference, ICS will also be resisting changes proposed to the York Antwerp Rules governing General Average, following discussions initiated within CMI.

As with the CMI discussion about possible amendment of the Salvage Convention, there are some serious concerns about the need for a revision at all, particularly in the present economic situation when shipowners are facing strong pressures.

“ICS is particularly concerned that any revision could destroy the uniform global regime that has developed and is presently provided very effectively by the 1994 York Antwerp Rules,” said Mr Los.

ICS notes that the International Union of Marine Insurance (IUMI) also believes that the proposals require further detailed consideration, not least to ensure shipowners’ agreement, and that the discussion should therefore be put back until 2016.

The International Chamber of Shipping (ICS), which represents over 80% of the world merchant fleet, has welcomed the acknowledgment by governments at the International Maritime Organization (IMO) that there will be significant problems with the implementation of the Ballast Water Management (BWM) Convention.

However, ICS feels that the type-approval process for expensive new treatment equipment is seriously flawed and that much more work still needs to be done by governments to rectify the current situation.  Shipowners are being required to invest billions of dollars in new treatment systems that may not always work in practice.

Speaking at the end of this week’s meeting of the IMO Marine Environmental Protection Committee (MEPC), ICS Secretary General, Peter Hinchliffe, said: “It is good that many governments seem to accept shipowners’ arguments that it will be very difficult indeed to retrofit tens of thousands of ships within the timeline of two or three years after entry into force as the Convention text currently requires.  IMO has agreed to develop an IMO Assembly Resolution, for adoption in 2013, to facilitate implementation to work smoothly.”

In the discussions ahead, ICS will continue to press for its proposed solution that existing ships should be defined as those having been constructed prior to entry into force, and that retrofitting should not be required until the next full five year survey, rather than the next intermediate survey should this be sooner.

“It is vital that we ease the log jam by spreading implementation over five years rather than two or three.” said Peter Hinchliffe.

ICS remains concerned that a number of governments still do not appear to appreciate the scale of the challenge faced by the shipbuilding and repair community in order to cope with the vast number of ships that will be required to install the new treatment systems.

ICS is also very disappointed that many shipowner concerns about the robustness of the type-approval process have been disregarded or sidelined during the MEPC meeting.

“The BWM Convention was designed to assure the ability to meet the required standard by a treatment system installed on an operating vessel, not in the vacuum of a test facility.” said Mr Hinchliffe.

ICS contends that enforcement and compliance actions will not be taken against treatment system manufacturers or test facilities, but rather against shipowners who in good faith may have installed a type-approved system that when subject to the variables in a real life operating environment may fail to perform as required.  A robustly type-approved system, costing between one and five million dollars per ship, should reasonably be expected to operate effectively under all of the normal operating conditions encountered at sea.

ICS is therefore disappointed at the unwillingness of IMO Member States to consider reopening the G-8 Guidelines on type-approval.  ICS believes this will make it harder for governments that have not yet done so to consider immediate ratification of the BWM Convention, or for shipowners to invest in the new equipment before they are legally required to do so.  The reluctance of many IMO Members States to reconsider the type-approval guidelines will therefore be in the best interests of no one, least of all the environment.

The text of the ICS intervention during the final plenary discussion about the BWM Convention at the IMO MEPC is attached.  The intervention was supported by China and the some of the world’s largest flag states, including Liberia, Malta, Marshall Islands, Panama and Vanuatu, whose implementation of the Convention will be vital in order for it to have genuine global application.

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Switch to Low Sulphur Fuel has Implications for Shore-Based Industry Too says ICS
The International Chamber of Shipping (ICS), whose member national shipowners’ associations represent more than 80% of the world merchant fleet, has expressed disappointment and concern at a decision by the International Maritime Organization (IMO) to reject its call to accelerate a critical study into the global availability of low sulphur fuel for ships.

A small majority of IMO Members States, led by the United States, rejected an ICS submission to the IMO Marine Environment Protection Committee (MEPC), which was debated this week in London. Nevertheless, the IMO vote was very close indeed. As well as having the support of major shipping nations such as China and several open registers, ICS was supported by some EU Member States.

ICS was pressing for IMO to start work without further delay on a comprehensive fuel availability study that could consider the impact of all the changes required by the new MARPOL Annex VI regime, to reduce atmospheric pollution, before it is too late for the oil refining industry to respond and invest.

Shipowners are worried about whether sufficient fuel will be available to allow ships to comply with the strict IMO regulations on sulphur emissions and whether, as a result of insufficient supply, the costs for those ships that are able to obtain the required fuels might be prohibitively expensive. In some trades this could lead to significant modal shift to shore based transport, with negative consequences for congestion and the environment. These are issues that were not anticipated when the regulations were agreed.

Speaking after the vote at the IMO MEPC, ICS Secretary General, Peter Hinchliffe remarked:
“Some governments still appear to have their heads in the sand with respect to fuel availability. What will be the impact of ships switching to distillate on the availability of diesel for road transport or heating oil for homes? We still think it’s essential that a global fuel study is carried out sufficiently in advance of 2020 to give the refiners adequate time to invest and react. The major refinery upgrading required could take a minimum of four or five years, perhaps longer, and we believe that completing the study in 2018 would simply be too late.”

ICS argues that the need to move forward the IMO study is more important than ever, especially as the EU has already decided that it will definitely implement the 0.5% sulphur requirements in 2020, even if the IMO study results suggest, as permitted by MARPOL, that full implementation should be postponed until 2025.

“ICS has not given up, and we will bring the issue back to IMO next year” said Peter Hinchliffe. “The issue is just too important. The enormity of the switch to distillate and its economic impact on shipping, and indeed the world economy as whole, should not be underestimated or swept under the carpet.”

ICS emphasises that when the global requirement to switch to distillate was adopted in 2008, ICS supported the agreed IMO timetable as an acceptable compromise.

However, if the switch to low sulphur fuel is to be successful, ICS believes that those governments that advocated such ambitious goals need to do everything possible to assure themselves and the industry that the refineries are able to deliver. ICS still believes this means undertaking the required studies of fuel availability as soon as possible.

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 had 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.

Fuel is by far the largest operational cost for shipowners and has already increased in price by about 400% 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 yet further if the new demand that will be created by the MARPOL requirements is not matched by increased supply.

The International Chamber of Shipping (ICS), which represents 80% of the world merchant fleet, has welcomed the outcome of an important meeting between governments to advance navigational safety in the strategically vital Malacca and Singapore Straits, where there are about 70,000 transits by ships each year.

During a meeting last week in Singapore, of the ‘Co-operative Mechanism on Safety of Navigation and Environmental Protection in the Straits of Malacca and Singapore’ (which involves the littoral states of Singapore, Malaysia, and Indonesia), ICS expressed concern about the continuing lack of new large scale navigational charts.

ICS Marine Director, John Murray explained: “We all want to deliver safety and environmental benefits in the Straits which is a primary objective of the Marine Electronic Highway project.  But these benefits simply cannot not be realised unless navigational charts are based on modern and appropriate hydrographic surveys.”

Encouragingly, says ICS, this deficiency was acknowledged at the meeting by the littoral states.  India, moreover, one of the many observer nations present, offered the use of a survey vessel to conduct appropriate hydrographic surveys in the area.  Training of personnel from Malaysia and Indonesia in hydrography has also been offered. ICS believes that this offer by India to support hydrographic surveys and the production of appropriate navigation charts may lead to real progress being made with respect to safety of navigation in the region.

At the meeting of the Co-operative Mechanism in Malaysia, ICS presented updated results of its detailed survey of safety incident reports to the maritime administrations of the littoral states.

While only a very small proportion of transits through the Straits lead to accidents or near misses, the ICS survey identified heavy shipping traffic, inappropriate speed and the loss of situational awareness as significant factors that need to be addressed.  ICS also highlighted concerns about the understanding and use of navigation systems such as ECDIS, AIS and radar.

ICS has therefore welcomed the many other projects now being taken forward by the Co-operative Mechanism including the removal of wrecks in the region, the establishment of a tide, current and wind measurement system, as well as ongoing projects for the replacement and maintenance of aids to navigation and the provision of emergency towing vessels.