2012

International Chamber of Shipping Representing the Global Shipping Industry

We acknowledge with thanks the use of
photos from the following associations
and their member shipping companies:

ANAVE, Spain
BW Shipping, Singapore
Canadian Shipowners Association
Chamber of Shipping of America
China Ocean Going (Group) Co
Confitarma, Italy
Cyprus Shipping Chamber
Danish Shipowners Association
Finnish Shipowners Association
Hong Kong Shipowners Association
Interferry
Irish Chamber of Shipping
Japanese Shipowners Association
Royal Association of Netherlands Shipowners
Swedish Shipowners Association
Turkish Chamber of Shipping
Union of Greek Shipowners
Verband Deutscher Reeder, Germany
 Annual
Review
2012

Representing the Global Shipping Industry

ICS (the International Chamber of Shipping)

is the principal international trade
association for shipowners, concerned with
all regulatory, operational and legal issues.

ISF (the International Shipping Federation) is

the identity used by ICS when representing
the industry on employment affairs issues.

The membership of ICS (and ISF) comprises

national shipowners associations
representing all sectors and trades from 36
countries, covering more than 80% of the
world merchant fleet.
2
 3

page Contents page

4 Chairmans Overview 31 Asian Developments
5 Office Bearers and Secretariat 32 EU Developments
34 US Developments
6 Key Issues in 2012
34 Trade Sanctions
6 The Costa Concordia Disaster
38 LLMC Increases
8 The Piracy Crisis Continues
39 Passenger Ship Liability
10 Navigating the Politics of Climate Change
40 Environmental Salvage Awards
15 The Year in Review 41 Rotterdam Rules
15 Low Sulphur Fuel 42 Competition Issues
16 Ballast Water Management 44 Investigation of IG of P&I Clubs
17 Changes to MARPOL 45 Flag State Performance
18 Ship Recycling 45 Shipping Policy and Free Trade
18 Shipbuilding Standards 46 Shipbuilding Policy
19 Cargo Safety 49 Canal Issues
21 Tanker Safety 50 Industry Representation and Co-operation
22 Malacca and Singapore Straits 52 Publications
24 E-Navigation and ECDIS 54 Organisational Matters
24 Training Standards
27 Work Hour Regulations 55 ICS Board of Directors
27 Employment Relations 56 Committee Structure
29 Maritime Labour Standards Membership
30 ILO Minimum Wage
 ICS Chairman, Spyros M Polemis
Greece

Chairmans Overview
4 THIS ICS ANNUAL REVIEW provides The latter sometimes placed strain are reconciled so far as possible in a
a good opportunity to take stock of on the maintenance of the global sound and practical manner.
events during the last 12 months that regulatory framework on which the
may help to shape the future direction shipping industry depends to operate As this Annual Review makes clear,
of our great industry, and of some of efficiently. I am very pleased to report the next few years will be very difficult,
the major challenges that lie ahead. that this framework, underpinned with global economic uncertainty, a
Sadly, this will be the last occasion on by IMO Conventions, remains firmly chronic oversupply of tonnage, and
which I provide the opening remarks intact and is still strongly supported truly enormous cost pressures, not
to this comprehensive review of ICSs worldwide, by governments and least with respect to bunkers, as we
activities on behalf of the global industry alike. But there continues move towards burning low sulphur
shipping industry. The influence to be a need to be vigilant against fuel. Shipowners also face the
that ICS brings to bear on maritime unilateral or regional regulation, not prospect of being charged billions of
regulatory affairs is considerable; least with respect to measures to dollars per year for carbon emissions,
something which - despite the huge address shippings CO2 emissions. despite being by far the most
political and technical complexities energy efficient mode of commercial
involved - ICS does with considerable During my tenure at ICS, we have transport. New requirements for
success, but with characteristically seen the adoption of a radical IMO ballast water management also
quiet efficiency. agreement that will dramatically reduce present a serious challenge, with
air pollution and, in July 2011, the first respect to both their technical and
However, in a world of mass media, ever global agreement covering an economic viability.
and with a plethora of different entire industrial sector that will ensure
interest groups vying for attention, that shipping reduces its CO2 emissions Of more immediate concern,
false modesty is no longer seen as by 20% per tonne/km by 2020, with shipowners and their crews continue to
a virtue. Therefore, as soon as I further significant improvements in face the wholly unacceptable scourge
came to appreciate the remarkable energy efficiency going forward. of piracy, off the coast of Somalia
breadth of ICSs activities, the depth and elsewhere. I have said it before
of its expertise and the respect which With respect to the safety and welfare and I will say it again, it really is time
it enjoys amongst governments of the seafarers that we employ, and for the international community to
worldwide, one of my tasks as on whom the world depends for the make it clear, and for governments
Chairman has been to try to increase efficient transportation of 90% of to understand, that criminal attacks
understanding and awareness of ICSs world trade, we have seen major against international shipping cannot
vital role within the shipping industry adjustments to the International and will not be tolerated.
at large. I hope that this expanded Safety Management (ISM) Code and
ICS Annual Review will contribute the IMO STCW regime governing Meanwhile, the dangers of
to that task. Like most things in life training standards, as well as the complacency with respect to the
which we take for granted, the service adoption of the ILO Maritime Labour industrys otherwise generally excellent
provided by ICS is something that the Convention. This is in addition to the safety record have been put into the
industry would find very hard indeed incremental but numerous changes spotlight by the Costa Concordia
to do without. to detailed regulations governing tragedy and other recent accidents
ship construction and equipment, that will inevitably result with a robust
ICS, its member national shipowners maritime law and insurance, and the response from the regulators. It must
associations and the industry which smooth operation of shipping markets, be hoped that this response will be
they represent have witnessed a which all help to ensure that shipping measured and based on a thorough
great deal of change since I was remains safe, clean and remarkably analysis of the facts, as well as a
first elected Chairman six years ago, efficient. These are all important proper debate about the technical
against a backdrop of booming developments in which ICS, and merits of arguments for any proposed
shipping markets which then plunged its members, have played a crucial changes to rules or procedures. ICS
into deep recession, as well as major part, helping to ensure that the best will of course contribute actively to
challenges on the regulatory front. interests of the industry and society this debate in the year ahead.
 ICS Vice Chairman 2011/12
I am very pleased that my last few 5
months in office have coincided with
the appointment of Mr Koji Sekimizu
as the new Secretary-General of
IMO. I am especially pleased that,
whilst sharing ICSs ultimate goal of
zero accidents and zero impact from
shipping on the environment, he too
believes that more should be done to
explain the impressive performance
of the industry to its international
regulators, to politicians and to high
level policy makers. ICS looks forward
to participating alongside IMO at Captain Dirk Fry Mr Trygve Seglem Mr Frank Mr Gerardo
the Rio + 20 United Nations Summit Cyprus Norway Leonhardt Borromeo
on Sustainable Development in June Germany Philippines
2012.

It has truly been a pleasure to serve

as the Chairman of ICS, as well as a Secretariat
great responsibility. I have very much Mr Peter Hinchliffe Secretary General
enjoyed my contact with the member
national associations, and I must
express my deep appreciation to the Mr Simon Bennett Mr John Murray
ICS Board of Directors, and to those Director External Relations Director Marine
who contribute with such dedication Ms Linda Howlett Mrs Natalie Shaw
to the vital work of ICSs expert Director Legal Affairs* Director Employment Affairs
committees which produce ICS policy Ms Kiran Khosla Mr David Tongue
positions and develop invaluable Director Legal Affairs* Director Regulatory Affairs
guidance on industry best practice.
Miss Camilla Arana Mr James Langley
I wish my successor well, and I Policy Officer Senior Adviser
am very confident that under his Mr Phillip Binks Miss Emily Rowley
leadership ICS will continue to serve Adviser Adviser
the best interests of our industry in Mr Alistair Hull Mr John Stawpert
the highly considered and professional Technical Manager Senior Adviser
manner to which we have become so
accustomed. Mrs Susan Gray Mrs Shantel Ryan
Director Finance and Publications Manager
Spyros M Polemis Administration Mrs Anita Pow
Chairman Mrs Kathryn Hall Administrator
Personal Assistant to Shipping Policy
Secretary General Miss Julie Rogers
Mrs Catherine Howlett Administrator
Administrator Marine Department
Publications *position held jointly
 KEY ISSUES IN 2012

The
Costa Concordia
Disaster
6
EVERYONE IN SHIPPING recognises the a state of the art vessel manned by a
need to be prepared for the unexpected. highly qualified crew who were using
What was not foreseen was that the the latest navigational equipment.
defining event of 2012 would be the
tragic loss of the Costa Concordia and On 13 January 2012, in the full glare of
that the safety record of the industry the worlds media, the cruise ship Costa
would be put under the spotlight in the Concordia grounded and capsized off
most dramatic way imaginable. This the coast of Italy with over 4,000 people
high profile disaster may also have on board. Tragically, at least 30 lives
implications for other types of ship were lost. This serious maritime casualty
beyond the cruise sector, and it will appears to have been a text book case
almost certainly have a significant of an accident that should never have
influence on the immediate regulatory happened, made all the more poignant
agenda at IMO. by the 100th anniversary of the sinking
of the Titanic with which comparisons
Safety of life at sea must always remain have inevitably if erroneously been
the highest priority and the way in made. That said, questions are being
which the industry addresses any issues asked about what might have occurred
raised by this major accident may had a similar incident taken place at
reflect on its reputation for years to a more remote location away from
come. It will be vital for the industry sophisticated search and rescue services.
to understand the sequence of events
that led to the disaster, which involved The Italian cruise ship struck rocks in
 7
the Tyrrhenian Sea just off the eastern regulatory discussions at IMO, as well as under further scrutiny. The debate
shore of Isola del Giglio, with media in the European Union and the United about the large size of modern cruise
reports suggesting that the vessel came States. The European Commission has ships, and arrangements concerning
too close to the island in what are well already announced that it will launch a insurance for liabilities, are also likely to
charted waters. It seems the impact public consultation and legislative review be given renewed attention. Proposals
ripped an enormous gash on the port during the course of 2012 while the US to review the proper application of the
side of the hull, flooding parts of the Congress is conducting its own hearings IMO International Safety Management
engine room and causing loss of power given that a large proportion of cruise (ISM Code) are also anticipated.
to propulsion and electrical systems. ship passengers are US nationals.
With water flooding in, the ship reached For the moment at least it seems
the island several hours later, where it It is hoped that the Italian government that politicians and regulators are
grounded in shallow water with most of will present the results of its preliminary commendably refraining from knee-
the starboard side underwater. investigations for consideration by jerk responses until the causes of the
the IMO Maritime Safety Committee accident are fully understood. However,
With ICS support, the Cruise Lines as soon as possible, although its task this approach may yet change during
International Association (CLIA) and the is complicated because the disaster the year ahead as more facts about this
European Cruise Council (ECC) led the is subject to a criminal investigation. unfortunate incident are released and
immediate sector-specific public relations While it is still far too early to know the criminal proceedings in Italy receive
response. More importantly, CLIA what the outcome of the accident further close attention across the media.
members have been conducting a root investigation will be, questions raised
and branch review of their safety and by the media suggest that as well as
operational procedures. However, ICS navigational issues and emergency
will be closely involved in the inevitable procedures, stability issues may come
 KEY ISSUES IN 2012

The Piracy
Crisis Continues
8 IT IS IMPORTANT to recall that the intervention with a more aggressive because ships are out of sight and out
continuing crisis in the Indian Ocean stance has reduced the pirates rate of mind.
and attacks against shipping by Somali of success. Thankfully, the number of
pirates have already led to over 60 crew held in Somalia is also at a lower Government abdication of
seafarers losing their lives and over level than has been the case for some responsibility for ship security to
4,000 seafarers being taken hostage. time, with about 200 seafarers currently private armed guards, to whom
Piracy has also been estimated to cost in captivity, although it must be shipping companies are now resorting
the global economy billions of dollars stressed that this situation is still totally in increasing numbers, is not a viable
a year and is causing untold damage unacceptable. long term solution for eliminating
to the economies of Africa and the piracy. However, because of their
Middle East. But the principal concern In February 2012, the Prime Minister growing use, ICS is now pressing IMO,
of ship operators is humanitarian. It of the United Kingdom hosted a and the International Contact Group
is simply unacceptable that so many major intergovernmental conference working under the auspices of the
seafarers have been killed, while on Somalia. ICS welcomed the UN, to give urgent consideration to
hundreds more are still being held commitments made to try to restore the regulation of armed guards and
captive in appalling conditions. government and civil society in this the criteria against which they might
Thousands of seafarers still have to conflict ridden country, the absence be vetted. The GUARDCON contract
traverse the danger area in serious fear of a functioning state being one launched by BIMCO is a very helpful
for their lives, and the strain on their of the underlying causes of violent tool, but it does not address every legal
families must also not be forgotten. Somali pirate attacks. However, problem to which shipping companies
addressing these issues will take years and Masters might potentially be
Notwithstanding the success of current if not decades and the Conference exposed.
military deployments, there is still a did not appear to result in any firm
pressing need for the governments political commitment, or new action, Another key objective of ICS is to
of those nations with the largest to eliminate or significantly reduce ensure that every captured pirate is
military navies in the region to increase the scourge of Somali piracy in the sent to trial. Counter-piracy efforts
resources available to the extent that immediate future. have been greatly discredited by the
is necessary to have a game changing lack of appropriate domestic legislation
impact. In co-operation with the ICS believes that governments must in many nations, including any offence
rest of the industry, including those task their military forces to take the of intent to commit piracy. This has
organisations supporting the excellent attack to the pirates and ensure that led to a continuation of the absurd
Save Our Seafarers campaign, ICS is the military assets required to do this situation whereby pirates who are
committed to helping ensure that the are maintained in theatre so that they captured by navies are sometimes
problem of piracy retains sufficient can continue to defend merchant released back to Somalia. ICS has
political and public attention, so ships in the best way possible. therefore welcomed the focus of the
that the crisis might be properly and Encouragingly, in March 2012, EU February Conference on the need for
decisively addressed during 2012. governments signalled that they apprehended pirates to be arrested,
may be moving in this direction, and taken to a court of law and, if found
Some press reports may have given extended the mandate of Operation guilty, imprisoned, including the
the impression that the level of piracy Atalanta until 2014. However little announcement to establish a new
off Somalia is decreasing. But as data mention was made at the February Regional Anti-Piracy Prosecutions
from the military makes clear, pirate Conference of the obligations of Intelligence Co-ordination Centre
capability is actually higher than governments under the United Nations based in the Seychelles.
ever. However, counter-piracy work Convention on the Law of the Sea to
in terms of compliance with the Best protect merchant ships and their crews ICS has also welcomed the
Management Practices developed by the from piracy, and the fear persists that determination of governments to break
industry in co-operation with navies (an the current level of pirate attacks is the financial chain through legal action
updated version BMP 4 was issued something which governments might against criminal financiers investing
in October 2011) and sustained military be willing to continue to tolerate in piracy wherever in the world they
 Year 2009 2010 2011

Pirate Attacks 117 127 151

Disruptions 14 64 27
Piratings 46 47 25

Source: EUNAVFOR

are identified. However, the shipping their crews to months if not years of for shipping companies and manning
industry would be deeply concerned appalling treatment. This includes agencies to help support seafarers and
by any suggestion that the payment of torture and murder, which has already their families affected by pirate attacks.
ransoms, in order to secure the release been the result when ransoms have
of seafarers being held hostage, should not been paid. In the event that Finding a solution to piracy remains
be prohibited or somehow criminalised. ransom payments were prohibited a clear priority for ICS, which now
The UK Foreign Office has advised or criminalised, many seafarers finds itself participating in numerous
that this is not the intention behind a and shipping companies would meetings at IMO and the various
new international task force on pirate understandably refuse to sail in the working groups set up by the
financing that is being established affected danger area, with significant International Contact Group on Piracy
in 2012. However, the possibility implications for the large proportion off the Coast of Somalia. While all
of banning ransoms has received of world trade, including about 40% these meetings, in London, New York
considerable media attention and of the worlds oil shipments, which and elsewhere, are taking important
sometimes unhelpful comment from is transported via the Western Indian decisions with respect to detailed
senior politicians who should perhaps Ocean. facets of the problem, they are
be more mindful of unintended perhaps symptomatic of the fact that
consequences. To reiterate, the primary concern of consideration of piracy is becoming
the industry is humanitarian, and institutionalised and that governments
In the event that seafarers are shipowners have a duty of care to their may still be side stepping the real
taken hostage, the inability of the crews and their families. Mention issue of how to tackle the pirates
international community to eliminate must therefore be made of the militarily. The time has surely come for
piracy or to rescue hostages means important work of the Maritime Piracy a clear message from the international
that shipowners have no option but Humanitarian Response Initiative, to community of zero tolerance of piracy
to pay ransoms. The alternative which ICS has contributed, that has across the globe.
would be for shipowners to abandon compiled good practice guidelines
 KEY ISSUES IN 2012

Navigating
the Politics of
Climate Change
10 IN JULY 2011, 150 or more IMO exists to apply for flag state waivers.
Member States concluded a ground Reducing CO2 emissions through
breaking agreement to reduce the reducing fuel consumption is a matter
shipping industrys CO2 emissions. of enlightened self interest for ship
This is the first such global agreement operators, and the industry is fully
for an entire industrial sector. As a engaged in the continuing discussions
result of amendments to the MARPOL at IMO about refining the EEDI and
Convention, new ships will have to extending it to ship types for which
be built with an Energy Efficiency EEDI formulae have not yet been
Design Index (EEDI), while from 2013 finalised due to the more problematic
all ships, including existing ships, will nature of the calculations.
have to utilise a Ship Energy Efficiency
Management Plan (SEEMP) in order to Above all, the IMO agreement is
control fuel consumption and reduce strongly supported by shipowners
emissions. because of the overriding need for
global rules for a global industry. If
As a result of this IMO agreement on different rules were to apply to ships at
technical and operational measures, different ends of a voyage there would
and the steps that ship operators be chaos, inefficiency and serious
are already taking to reduce fuel market distortion. A regional approach
consumption, ICS is confident that to reducing ships emissions would also
shipping can deliver a 20% reduction be far less effective in actually reducing
in emissions per tonne/km by 2020 CO2. Climate change, of course, is a
across the entire global industry. global challenge.

Objective observers might be forgiven Notwithstanding the considerable

for thinking that this IMO agreement efforts being made to reduce ship
is a very impressive achievement, emissions through technical and
especially as shipping is already, by operational measures, the industry is
far, the most energy efficient form under pressure to accept the additional
of commercial transport. However, a burden of so called Market Based
number of governments still expect Measures (MBMs). Market Based
much more. In the context of the Measures to reduce CO2 remain a very
new Green Climate Fund that was controversial issue among shipowners.
established by the most recent United Some governments argue that MBMs
Nations Climate Change Conference, will somehow incentivise shipowners
some governments have actually to achieve further efficiency gains, and
proposed that shipping should pay as might bridge the gap they perceive
much as US$40 billion per year for the between the significant efficiency
privilege of transporting 90% of the improvements that shipping is already
worlds trade. delivering and the expectations that
total maritime trade will continue
The IMO agreement on technical to expand in response to the (long
and operational measures enjoys term) predicted growth of the world
the full support of the shipping economy.
industry. ICS has recommended
that all new ships currently covered But in the face of rising fuel costs,
by the regulations are delivered shipowners reasonably believe that
with an EEDI, even though flexibility they already have every incentive to
improve their fuel efficiency. The The first of these is that the UNFCCC, developing nations. In simple terms, 11
introduction of low sulphur fuels, as and its high level discussions about this can perhaps be seen as the price
part of a separate IMO agreement, replacing the Kyoto Protocol, is in for persuading developing nations
is also expected to increase bunker large part driving the agenda. In to agree to continue negotiations
costs by in excess of 50%. With 2012 addition, there are the significant, on a new UN climate change
looking like one of the most financially and some would argue unrealistic, accord, scheduled for adoption in
difficult years for shipowners in living commitments that have already 2015. This new UN agreement is
memory, now is certainly not the been pledged by nations such as EU intended to include carbon reduction
time to introduce an additional cost Member States, to reduce their total commitments by emerging economies,
pressure in the form of an MBM. CO2 emissions dramatically. Unless not just from developed or so called
Many in the industry are concerned IMO can demonstrate that it is making Annex I nations as is the situation
that some governments are more real progress towards the development at present. Between now and the
interested in how much money can of an international MBM for shipping, next UN Climate Conference, in Qatar,
be squeezed from shipping through the industry may be faced with the in December 2012, the UNFCCC
an MBM, rather than any further unwelcome prospect of regional members will begin to consider how,
emissions reduction that this might action. and from whom, this money is going
actually deliver. to be raised.
The other important political reality
The challenge for ICS, as the is the decision by the most recent A high level working group set up
industrys principal international trade UN Climate Change Conference by the UN Secretary General and
association, is that despite shipowners in Durban, in December 2011, to chaired by the premiers of Norway
justified suspicions about MBMs, it is establish the Green Climate Fund. and Ethiopia has appeared to suggest
necessary for the industry to address This aims to generate US$100 billion that some US$16 billion per year
the politics of climate change and per year by 2020, in order to help could be raised from international
some difficult realities. mitigation and adaptation projects in shipping. But in a more recent World

IMO agreement on technical regulations will reduce ships CO2

MARPOL Annex VI, Chapter 4 adopted July 2011

Regulations EEDI requires New ships New ships New ships

enter into force new ships to must improve must improve must
for over 90% of meet agreed efficiency 10% efficiency improve
world fleet efficiency up to 20% efficiency
targets 30%
Ship Energy
Efficiency 20% CO2 50% CO2 reduction
Management reduction per per tonne/km
Plan (SEEMP): tonne/km (industry goal)
mandatory (industry goal)
implementation
for all ships

2013 2015 2020 2025 2030 2050

 Comparison of CO2 emissions
between different modes of
transport grams per tonne-km
Source: NTM, Sweden

12
600 Towards an IMO MBM
ICS is leading industry representation on the discussions at IMO to
develop a Market Based Measure for shipping, with IMO having a
view to adoption in 2014.
In 2011, ICS members took the important decision to declare the
industrys preference for an MBM directly linked to fuel consumption,
Air
500 rather than an emissions trading scheme (ETS). If governments decide
freight
that an MBM should be adopted, ICS members have agreed that a
747-400
mechanism linked to fuel consumption is the one that most shipping
1,200 km
companies could probably live with in order to ensure a level playing
flight
field and the avoidance of serious market distortion, concluding it
540 would be far simpler to manage and more transparent than an ETS.
In a welcome move, the IMO Secretary-General has announced the
intention of IMO to conduct a full impact assessment of the various
400
MBM proposals, with detailed terms of reference to be developed in
2012.

Bank report, prepared for the G20 and almost certainly viewed by many
300 Summit in Cannes in November 2011, emerging economies as a tax on trade
it was suggested that shipping should a form of green protectionism.
contribute some US$25 billion per year.
And the demands do not stop there. However, the paramount goal for the
Some governments have publically shipping industry is the avoidance
suggested that only a proportion of of double charging through
any money collected from shipping contributions to the UNFCCC and
should actually go into the Green Fund, via any MBM agreed at IMO. There
200 and that a significant chunk should would therefore seem to be a need for
go straight into the treasuries of the a clear linkage between any IMO MBM
governments collecting it, implying and any shipping contribution to the
that the charge imposed on shipping Green Fund.
Heavy could actually be even more, perhaps
truck as much as US$40 billion per year. The other political reality that shipping
Cargo has to address is the UNFCCC principle
Cargo with
100 vessel The position of ICS is that if of Common But Differentiated
vessel trailer
2,000- governments decide that shipping Responsibility (CBDR), whereby the
over
8,000
8,000
dwt
50

should contribute to the Green
Fund, then the payments should
emission reduction commitments
accepted by developing nations are
dwt

15 21
be proportionate to shippings less than those of mature economies.
contribution to the worlds total CO2 The challenge has been how to
emissions. To contribute the kind reconcile this with the IMO principle
of sums which the World Bank has of no more favourable treatment
0 suggested would be totally inequitable for ships under different flags. On
 Representing the
Global Shipping
Industry

13

the one hand, the European Union being hotly debated) as well as a flag agree to such an approach should not
threatens regional action if IMO fails state waiver with respect to the EEDI be underestimated.
to deliver on CO2, while on the other, (although the industry has decided not
developing nations - led by China, to make use of this). ICS will continue to support IMO as
India and Brazil - remain opposed to the body where discussions about a
supporting an IMO agreement which Securing support for an IMO MBM shipping MBM and any contribution
they fear might prejudice their position from nations like China and India will to the Green Fund should take place
at the high level UNFCCC negotiations. also require account to be taken of However, the industry will firmly resist
CBDR. However, reconciling the CBDR any notion that it can be regarded
In the event, with the industrys full principle with an IMO MBM, which as a cash cow, and will continue to
support, IMO has already proved itself must apply equally to ships of all flags emphasise that the best means of
to be eminently capable of delivering a in order to avoid market distortion, delivering meaningful CO2 emission
global solution for shipping which can will not be an easy task. But if any of reduction will be through technical
be reconciled with the CBDR principle. the money collected by an IMO MBM and operation measures, rather than a
The July 2011 agreement, which was channelled to the Green Fund mechanism whose principal purpose is
adopted binding global regulations for (perhaps via an IMO compensation simply to raise money.
technical and operational measures to fund into which money raised from
reduce ships emissions, will enter into shipping was paid) this could perhaps
force in January 2013 and will apply to be a means of meeting the CBDR
at least 90% of the worlds tonnage. principle. Developing nations would
To address CBDR, the agreement be receiving more money than they
included regulations on technology were contributing, while preserving
transfer and technical assistance for the level playing field for shipping.
developing nations (although the However, the challenge of persuading
details of how this will work are still nations such as China and India to
14
 Representing the
Global Shipping
Industry

The Year
in Review
Low Sulphur Fuel demand. This is complicated by the 15
fact that it is not yet fully known
In 2008, IMO adopted radical which additional areas may be
amendments to MARPOL Annex VI designated as ECAs. For example, the
governing atmospheric pollution, European Parliament has proposed
which for most ships will require that all EU waters within 200 miles
the use of expensive, distillate of the coast should be declared as
grade, low sulphur fuel. While sulphur ECAs. Whether this will be
the use of exhaust gas cleaning accepted by EU Member States, or in
systems (scrubbers) is permitted turn will be supported by the scientific
as an alternative, it is still unclear studies required to gain IMO approval,
whether these will be technically, is still an open question.
environmentally, or economically
viable for use on a widespread basis. When the MARPOL amendments
were adopted, ICS welcomed the
The enormity of this change, and its IMO agreement as an acceptable
economic impact on shipping should compromise, although this was
not be underestimated. Fuel is by in the context of the even more
far the largest operational cost for draconian measures proposed by
shipowners and has already increased many governments, and the threat
in price by about 300% since 2000. by the EU to impose an immediate
The current 50% price differential regional solution if IMO was unable
between distillate and residual fuel to deliver a global agreement.
oil is predicted to increase further if However the implementation of the
the new demand that will be created new requirements will be far from
by the MARPOL requirements is not easy, and ICS is closely monitoring the
matched by increased supply. Exhaust progress that is being made to ensure
gas scrubbers, assuming they work, that the demand from shipping for
and that questions are resolved about distillate fuel can actually be met.
the waste that is produced, have been In the United States, it is still very
predicted to cost in excess of US$2 unclear whether or not enough fuel
million per engine if fitted on board will be available for the US shipping
larger ships. industry, let alone the huge amount
of international shipping that trades
Perhaps the most controversial in and out of the worlds largest
requirement in MARPOL Annex VI economy.
concerns the need for ships operating
in Emission Control Areas (ECAs) to Recent studies supported by the
burn fuel with no more than 0.1% European Community Shipowners
sulphur as from 2015. At present, Associations (ECSA) have also
the Baltic, the North Sea, and the suggested that the modal shift to
entire West and East coasts of the US land transport that will probably
and Canada have been designated as result from the application of the
sulphur ECAs by IMO, at the request 0.1% limit on sulphur in fuel could
of the governments concerned. This greatly damage local short sea
presents a major challenge for the oil shipping while being detrimental
refining industry which will have to to the local environment. This is
expand the production of compliant also a big concern for Great Lakes
low sulphur fuel to meet the new trades affected by the US/Canada
16 IMO agreement to reduce atmospheric pollution from ships Ballast Water Management
The IMO Ballast Water Management
(BWM) Convention was adopted with
great urgency by governments in 2004,
Sulphur content of fuel in order to address environmental
permitted in Emission concerns about damage to local
Control Areas aquatic ecosystems caused by the
unwanted introduction of foreign
micro-organisms, which is apparently

1.5% facilitated by international shipping.

The adoption of the BWM Convention

was a classic case of aspirational
legislation. For reasons that are well

1.0% understood, including the economic

damage to the US economy from the
unwanted influx of zebra mussels,
there was huge political pressure
for IMO to adopt the Convention
0.1% eight years ago. But the equipment
needed to comply with the new
requirements, and the complex
Year 2005 2010 2015 technical guidelines needed to ensure
proper implementation, had not then
been developed, which is why it is
ECA. These concerns are now shared only now that governments are almost
by many governments, but it remains Timetable for new limits to in a position to ratify.
to be seen if any will request that IMO sulphur content in ships fuel
should now revisit the requirements. agreed by IMO Following an increase in the number
of ratifications it had been expected
While there is a formal mechanism 2010 - Emission Control Area that the Convention would enter into
in the IMO agreement to complete (ECA) limit reduced to 1% force during 2012. However, at an
a review by 2018 of progress made (from 1.5%) IMO meeting in January 2012, some
towards meeting the demand for major changes were proposed to
0.5% sulphur fuel that is meant to 2012 - Global limit reduced to important draft guidelines on ballast
be used outside of ECAs by 2020, ICS 3.5% (from 4.5%) water sampling and analysis that
has been pressing IMO to start work 2015 - ECA limit reduced to 0.1% will be used by port state control
now on developing a methodology inspectors, which would be very
that can consider all of the major 2020 - Global limit to 0.5% but damaging to shipowners if adopted.
changes required by the new regime. a review in 2018, with authority ICS made a strong statement at
For political reasons, the US and EU to delay implementation, will the end of the IMO meeting about
governments have so far been reluctant determine whether this is the direction that had been taken
to support the ICS proposal. But this achievable. and, supported by many flag states,
issue of fuel availability is becoming 2025 - Global limit to 0.5% these draft guidelines will now be
increasingly pressing, and ICS will again notwithstanding the result of the reconsidered. However, this now
make a formal written proposal to the 2018 review. means that these sampling guidelines
IMO Marine Environment Protection will not be agreed until at least 2013,
Committee in October 2012. which in turn is expected to further
 Representing the
Global Shipping
Industry

delay the additional ratifications Changes to MARPOL comprehensive regulatory framework 17

needed to bring the Convention into and the widespread global
force. This creates other problems In addition to the high profile enforcement of the International
for shipowners due to the fixed dates discussions addressing CO2 and other Convention for the Prevention of
by which existing ships have to install atmospheric emissions, a wide range Pollution from Ships (MARPOL).
the very expensive new treatment of other environmental issues remain
equipment as required by the on IMOs agenda requiring detailed In July 2011, IMO adopted changes to
Conventions time line. input from ICS. A large proportion Annex V of the MARPOL Convention,
of ICS resources is committed to concerning garbage, that will enter
There are still genuine concerns participating in the ongoing work into force in January 2013. These
about the availability of suitable of numerous IMO Committees and were supported by detailed guidelines
equipment, the robustness of the type working groups which are constantly adopted by the Marine Environment
approval process, the huge expense updating environmental regulations Protection Committee in March 2012.
of retrofitting existing ships, and and technical codes. There is now a new requirement
the present limited possibilities for specifying that discharge of all
treatment systems for larger vessels. Meanwhile, at the high political garbage into the sea is prohibited,
That said, progress is now being level, ICS plans to support IMO in its except where expressly provided
made to approve various ballast water participation at the Rio+20 United otherwise (the discharges still
treatment systems as an alternative Nations Conference on Sustainable permitted, in certain circumstances,
to ballast water exchange at sea once Development in Brazil in June include food wastes, cargo residues
this is no longer permitted. 2012. This will provide a unique and water used for washing deck
opportunity to highlight the success and external surfaces containing
Completion of this work is long that the industry and IMO have had in cleaning agents or additives which
overdue given that new ships are delivering continuous improvement in are not harmful to the marine
already meant to be constructed shippings environmental performance environment). Following the parallel
with these expensive new treatment through the development of a adoption by IMO of new Guidelines
systems. ICS has contributed
significantly to this work and Reduction in number of major oil spills per year (over 700 tonnes)
continues to provide a consultant to Source: ITOPF
the GESAMP (Joint Group of Experts
on the Scientific Aspects of Marine
Environment Protection) Ballast 250
Water Working Group that has been
conducting the detailed assessment of
the new equipments environmental
200
acceptability. Meanwhile, ICS
continues to encourage full
co-operation with local ballast water
exchange requirements wherever it is 150
safe for ships to do so.

So long as the BWM Convention 100

has not entered into force, this
will continue to encourage the
development of local requirements 50
that are at variance to those agreed
by IMO (see separate item on United 223 94 64 31
States Developments). The possibility 0
remains of ballast water chaos. 1972-1981 1982-1991 1992-2001 2002-2011
18 on Garbage Management Plans that basis in advance of the Hong Kong
must be carried on board ships, ICS Convention entering into force.
will be reviewing its own model
plan and best practice guidelines for Shipbuilding Standards
shipowners.
The maintenance of high standards
Somewhat controversially, in July of ship construction is of the utmost
2011 IMO also adopted amendments importance. The objective of ICS
to MARPOL Annex IV concerning is that shipbuilding standards will
the prevention of pollution by continue to be taken forward so
sewage from ships, which include that with an appropriate level of
the possibility of governments maintenance, and adequate margins
establishing Special Areas for the for corrosion, future ships will be
prevention of such pollution from constructed so that they will continue
passenger ships, and which designate to be fit for purpose throughout
the Baltic Sea as the first such Special their typical 25 year life span.
Area. The impact of passenger ships
with respect to nitrate pollution of ICS continues to participate in a
the Baltic is widely acknowledged cross industry initiative, co-ordinated
to be insignificant in comparison by the International Association
to major sources of pollution such of Classification Societies (IACS)
as agriculture. The operational to provide guidance on the
implications of compliance and harmonisation and amendment of
the difficulties of finding suitable Guidelines on Transitional Measures the Common Structural Rules (CSRs)
reception facilities are out of all for Shipowners Selling Ships for for bulk carriers and tankers. The
proportion to the environmental Recycling, whose development was intention is to provide a harmonised
benefit. The real concern, however, led by ICS. The industry Guidelines set of rules, for use by all class
is the precedent this might create are specifically intended to help societies, on common aspects of hull
for the introduction of all sorts of improve safety and environmental structure design, supplemented by
other MARPOL Special Areas being conditions in recycling yards in dedicated sections on the specific
established, potentially applying to advance of the entry into force of the requirements for these two ship types.
all ship types. ICS has already had to new Convention. IACS has been overwhelmed by the
counter suggestions that the Annex IV huge number of comments received
Special Area might also apply to cargo ICS continues to co-operate in from shipowners, a large proportion
ships which typically have 20 persons an ambitious IMO programme to of which have led directly to proposals
on board as opposed to 2,000. There promote the new Ship Recycling for rule changes. While the careful
is a danger that such special pleading Convention. In March 2012, IMO attention being given to this feedback
by coastal states may gradually serve adopted further guidelines on from industry is very welcome, it
to erode the concept of a truly global implementation for Parties supported seems that the finalisation of the new
regulatory framework. by guidelines for the authorisation rules, so that they may be submitted
of ship recycling facilities. It is very to governments at IMO (for use
Ship Recycling much hoped that these will now be with the IMO Goal-based Standards
applied by those governments with initiative) is now likely to be delayed
ICS remains firmly committed to the authority over the vast majority of until 2013.
early entry into force of the IMO facilities which are located in Asia.
(Hong Kong) Convention on the The early identification of sound Closely related to the IACS CSRs, IMO
Safe and Environmentally Sound recycling facilities should greatly continues to finalise arrangements
Recycling of Ships, not least through assist efforts by shipowners to meet for the implementation of the
the promotion of the inter-industry their responsibilities on a voluntary 2010 amendments to the SOLAS
 Convention concerning the new 19
Goal-based Standards (GBS) for the
construction of bulk carriers and oil
tankers of 150m or over in length.
It has now been resolved that class
societies should pay for the GBS
verification process, but questions
remain as to whether there is an
adequate number of suitably qualified
auditors.

In China, in October 2011, the

Chairman led an ICS delegation to the
latest round of Tripartite discussions
about shipbuilding standards with
representative organisations of
shipowners, classification societies
and shipyards. Topics considered
included: measures to reduce CO2
emissions including the application of
the EEDI and requirements to ensure
the provision of adequate ships
power; the challenges presented
by the implementation of the IMO
Ballast Water Management and
Ship Recycling Conventions; and the
review being undertaken by IACS of
its Common Structural Rules. ICS will
be co-ordinating the arrangements for
the next Tripartite meeting to be held
in Korea in November 2012.

Cargo Safety
The transport of goods by ship may
sometimes involve a high degree
of physical risk due to the dangers
presented by the harsh conditions
that often prevail at sea. For the
most part these are risks that can
be successfully and safely managed
by ship operators and their crews.
However, such risks can be seriously
multiplied when insufficient care is
given to the safe loading of cargoes,
a factor which is sometimes beyond
shipowners direct control. While IMO
has been very successful with respect to
ensuring that shipbuilding standards and
 Representing the
Global Shipping
Industry

20 safe navigational procedures are widely Meanwhile, container shipping measure would help to address wider
enforced by governments, the rigorous companies continue to be concerned security concerns about the content of
application of IMO standards does not by the incidence of shippers providing containers. In a welcome move, the
always extend so effectively to those incorrect container weights, and International Association of Ports and
actions that occur far beyond the the need to ensure that marine Harbors (IAPH) gave its support to this
ship/port interface. terminals always verify the weight of initiative at the end of 2011.
loaded containers against the cargo
These fears have recently been brought manifest, prior to loading on board Disappointingly, for reasons not
home in a most disturbing manner. ship. Following a proposal to the IMO entirely clear, some governments
There is now very serious concern (and Maritime Safety Committee made by have so far been lukewarm about the
anger) throughout the industry about ICS and the World Shipping Council industry proposal to amend the SOLAS
the recent loss of several ships carrying (WSC), IMO has been considering how Convention and it remains to be seen
nickel ore/iron ore fines loaded in India, it might establish a new international how the concept will be taken forward
the Philippines and Indonesia, apparently regulatory requirement to address this during 2012. But in the absence of a
due to cargo liquefaction causing problem. requirement that container weights
cargo to shift dramatically. Some declared by shippers are verified
cargoes, it seems, are being deliberately The industrys aim is that all exported by terminals it seems likely that a
misdeclared. Especially upsetting was cargo containers should have their substantial number of containers will
the tragic loss of 22 seafarers on the weights verified, and that this continue to be misdeclared and that
Vinalines Queens after loading a nickel information should be confirmed overweight containers will continue
ore cargo in Indonesia, in December by the marine terminal upon receipt, to pose a serious risk to safe ship
2011. It must be stressed that such and before vessel loading, and made operations, to ships crew, and to other
problems are not confined to Asia, with available to the ship operator so it personnel in the transport chain.
bulk carrier operators reporting that can be used for stowage planning.
the water content of iron ore cargoes is As well as improving safety, such a
being similarly misdeclared by shippers
in Brazil. Total losses 1994-2011 by number of vessels (over 500 GT)
Source: IUMI
ICS acknowledges that the issues are 200
complex, but the root of the problem
would seem to be the refusal of some 180
shippers to allow the appointment
of independent surveyors to conduct 160
cargo testing in accordance with IMO
requirements, plus the commercial 140
pressure placed on Masters to accept
potentially unsafe cargoes at what are 120
often remote locations. The prevention
of similar incidents is an utmost priority. 100
In co-operation with IMO, Intercargo
(which represents bulk carrier 80
operators) the International Group of
60
P&I Clubs, and the governments of
those nations where problems seem to 40
exist, ICS is endeavouring to help find
a solution that will assist shipowners 20
and Masters to resist any pressure to
accept unsafe cargoes. 0
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Tanker Safety 21
In 2012, IMO will be approaching the
end of a major review of tanker safety
that is set to result in some important
regulatory changes. This was in
response to a major report by an Inter
Industry Working Group on Fires and
Explosions on Board Tankers, to which
ICS contributed with the Oil Companies
International Marine Forum (OCIMF) and
Intertanko, and which was presented to
IMO in 2007 following a sequence of
sometimes fatal explosions on tankers.

ICS has played an active part in the

discussions at IMO on the extension
of the practice of inerting cargo tank
atmospheres. At a meeting of the IMO
Fire Protection Sub Committee in 2011,
an important decision was made with
respect to the proposed new mandatory
requirements for the inerting of chemical
tankers. The new carriage requirements
will apply to new ships over 8,000 dwt.
In conjunction with the International
Parcel Tankers Association (IPTA), ICS had
highlighted the environmental impact
of operating IG equipment, and had
indicated that a carriage requirement
for sub 5,000 dwt chemical tankers
could be problematic. The IMO decision
is therefore compatible with the ICS
position. Subject to the adoption of
the new regulations by the Maritime
Safety Committee in May 2012, this
development will be addressed in a new
edition of the ICS Tanker Safety Guide
(Chemicals) which ICS intends to finalise
in 2013.

ICS fully supports the proposals to

amend SOLAS to provide for the
application of inert gas (IG) to new oil
and chemical tankers above 8,000 dwt.
It should be noted, however, that IMO
decided that the possible extension of
new measures to existing tankers of
less than 20,000 dwt would only be
22 considered in the light of experience governing international waterways
gained following introduction of IG as enshrined in the United Nations
on new ships of 8,000 to 20,000 dwt. Convention on the Law of the
However, a serious explosion in Korea Sea (UNCLOS), so that individual
in January 2012 which involved a small ships are not charged for safety
chemical tanker might put renewed services. However, this has had to be
pressure on IMO to accelerate its reconciled with the challenge faced
consideration of IG for existing ships, by the littoral states of Indonesia,
as might a major fire on board a Malaysia and Singapore in financing
chemical tanker that occurred in navigational safety.
the Gulf during March 2012 (which
involved the additional drama of local ICS has conducted a detailed survey of
ports refusing to provide a place of incident reports which it is anticipated
refuge for the stricken ship, contrary will result in the development
to IMO Guidelines). of proposals to enhance the
management of traffic in the Straits.
It is important to recall that a In October 2011, ICS presented the
disturbing conclusion of the original reports findings to the maritime
industry report that informed the IMO administrations of the littoral states at
review was that otherwise competent a meeting in Kuala Lumpur.
and qualified seafarers are still prone
to bypass accepted procedures Only a very small proportion of
during cargo operations, and that transits result in accidents or near
this had been a factor in a number misses. However, the ICS survey
of sometimes fatal explosions on has identified heavy shipping traffic,
tankers. The solutions are complex, inappropriate speed and the loss of
involving matters that do not always situational awareness as significant
readily lend themselves to prescriptive factors that need to be addressed.
regulations, such as how to further The ICS report praises the skill and
inculcate a genuine safety culture professionalism of those managing,
amongst ships crews, which the new operating and navigating ships in
edition of the ICS Tanker Safety Guide the Malacca and Singapore Straits.
Chemicals will seek to address. However, it is imperative that safety
continues to be prioritised. ICS
Malacca and Singapore Straits has therefore also suggested that
improvements could be made with
Each year there are more than respect to the location of pilot
70,000 transits by ships through the boarding areas and the timing of pilot
Straits of Malacca and Singapore, departures. There is also concern
which is one of the worlds most about the understanding and use of
strategically important international navigation systems such as ECDIS, AIS
waterways, linking the Far East to the and radar, both at sea and ashore.
Indian Ocean, the Middle East and Of the incidents examined, which
Europe. While wishing to help ensure involved a range of vessels from tugs
navigational safety and environmental to tankers, 68% resulted in collisions.
protection of the Straits, the long
standing objective of ICS has been to Encouragingly, the littoral states have
encourage the maintenance of the welcomed the ICS report and are
principles of freedom of navigation already taking measures to further
Representing the
Global Shipping
Industry

23
 Representing the
Global Shipping
Industry

24 improve navigational services in the technical specifications of various coverage and ECDIS operating
Straits. In conjunction with ICS, it shipboard devices. In particular, ICS anomalies, ICS is also questioning
is hoped that they will make a joint is still seeking to ensure that national proposals by Australia (and other
submission to IMO, advising on the authorities will not regard Virtual Aids governments) to amend the SOLAS
current status of this important work. to Navigation as a cheaper means Convention with the effect of
of providing statutory services, and prohibiting the operation of ECDIS
Meanwhile, although it has taken that they continue to be seen as a in the Raster Chart Display System
somewhat longer than expected, complement rather than a replacement (RCDS) mode. There are also worries
the littoral states are about to start for physical aids to navigation. about the ambiguity of suggested new
conducting sea trials in the Straits with rules on updating relevant hardware
respect to a Marine Electronic Highway A pressing issue concerns arrangements on board that could imply that ship
(MEH), although a number of issues for the introduction, in July 2012, of operators might constantly have to
need to be resolved such as whether the new mandatory IMO requirements replace very expensive equipment.
an AIS component will be incorporated. for ECDIS (Electronic Chart Display
While it is ICSs intention to request and Information Systems), which ICS With the carriage of ECDIS about to
that ships actively participate in these has long supported provided that become mandatory, ICS continues to
trials, this will not be possible until the industrys definition of sufficient highlight the importance of training
detailed planning is complete and Electronic Navigation Chart (ENC) seafarers in its use. ICS has therefore
the infrastructure is fully in place. availability can be met before the contributed to the production of
ICS has stressed the importance of phased-in carriage requirement guidance on issues of competency and
standardisation and interoperability becomes effective. ICS has been training which has been co-ordinated
between shore based components closely monitoring progress at by the Nautical Institute. ICS has also
of e-navigation in order to avoid the International Hydrographic submitted its own detailed proposals
shipping having to communicate with Organization (IHO) towards meeting on ECDIS training requirements to the
unharmonised e-navigation resources the ENC coverage necessary to make IMO Sub Committee on Standards
in different geographical regions. The the mandatory carriage of ECDIS viable. of Training and Watchkeeping which
question of free access during the meets in May 2012. These suggest
trials to these MEH data services, in In particular, ICS has been engaged best practice recommendations
accordance with UNCLOS principles, with the IHO and other interested for the timing of delivery of ECDIS
also still needs to be resolved. organisations in discussions over training for both new and existing
potential operating anomalies that seafarers, taking account of present
E-Navigation and ECDIS have been identified with ECDIS. A requirements for upgrading training as
test has been developed by IHO that all contained in the 2010 amendments to
ICS welcomes the great potential companies have been encouraged to the STCW Convention.
of e-navigation for improving use in order to detect such anomalies.
navigational safety. However, ICS Disturbingly it has become apparent Training Standards
continues to emphasise the need for that not all ECDIS systems may be
a user focused approach, so that fully effective, with a third of those The competence of seafarers is a
e-navigation is not driven solely by tested reportedly failing to display most critical factor in the safe and
ideas from equipment manufacturers significant underwater features in the efficient operation of ships, and has
or the availability of new technology. standard display mode. At least one a direct impact on the safety of life at
ICS is currently engaged in detailed manufacturer has confirmed to IHO sea and the protection of the marine
discussions at IMO, and also within that earlier versions of its ECDIS will environment. The IMO Convention
the International Association of not display some types of wreck and on Standards of Training, Certification
Marine Aids to Navigation and underwater obstructions in any display and Watchkeeping for Seafarers
Light House Authorities (IALA), mode, necessitating the continued use (STCW) constitutes a comprehensive
about the implementation of IMOs of paper charts. set of regulations intended to
e-navigation strategy. This includes maintain the highest standards of
user needs and services, and the In view of concerns about full ENC competence globally. In particular, the
 25

STCW Convention places important require existing ratings to undergo in refresher training for qualified
responsibilities on maritime employers. order to comply with their minimum seafarers, as well as the introduction
safe manning requirements. of detailed standards of competence
In January 2012, wide ranging for the new grade of Able Seafarer
amendments to the STCW From January 2013, all new seafarers mentioned above. There are also
Convention entered into force, commencing training will be required new competence tables and training
having been adopted by a Diplomatic to do so in accordance with the new requirements for personnel on oil and
Conference in Manila in June 2010. training and competence standards chemical tankers and gas carriers.
With immediate effect, companies are in STCW 2010. However, until 2017
now required to comply with the new governments may continue to renew Although not a direct responsibility
STCW minimum rest hour provisions and revalidate existing certificates of companies, the industry will wish
for seafarers (see page 27). Many of in accordance with current STCW to ensure that as many governments
the other new requirements will be provisions which applied immediately as possible comply with the revised
phased-in between now and 2017. prior to January 2012. requirements to report to IMO the
actions that have been taken to
Some governments are now expected Numerous amendments were implement the new STCW standards.
to begin applying the new STCW adopted by IMO to take account This will be necessary, by July 2013, if
requirements on a national basis, of recent technical developments governments wish to maintain a place
such as enhanced five yearly refresher requiring new shipboard skills, such on the IMO white list of nations
training, or the new mandatory as the use of Electronic Chart Display that have demonstrated continuing
requirements for the on board and Information Systems (ECDIS) or adherence to STCW standards,
training of ratings to be documented. the need to give more emphasis to so as to avoid port state control
This includes training for the new environmental management. But difficulties for their ships, or flag state
STCW grades of Able Seafarer Deck the changes also cover such matters recognition problems for seafarers
and Able Seafarer Engine, which as new training requirements for working on foreign ships to whom
many flag states are expected to leadership and teamwork, enhanced they have issued STCW certificates.
26 ICS anticipates that there may be
a need to clarify the interpretation
of how some of the new standards
are to be applied, for example with
regard to how new refresher training
should be implemented, delivered
and assessed or when the new
security training requirements enter
into force. There is already evidence
that some maritime administrations
may be intending to apply the new
requirements over zealously.

The overriding objective of ICS and

its member national shipowners
associations is that the standards
required by the STCW Convention,
as amended in 2010, are put into
effect as soon as possible, and that
the highest standards of seafarer
competence will continue to be
maintained worldwide. In 2011,
ICS therefore published a new
edition of the ISF Guidelines on the
IMO STCW Convention to advise
shipping companies and shipboard
personnel of their fundamental
obligations as required by the Manila
amendments. As well as providing
advice on compliance, the Guidelines
also give background information
on the philosophy underlying the
competence-based approach to
training which the STCW Convention
seeks to promote.

In 2012, ICS aims to complete its

ambitious schedule of revising its
widely used ISF on board training
record books to take account of the
Manila amendments. Updated On
Board Training Record Books for deck
and engine ratings (including the
grades of Able Seafarer Deck and
Engine) have already been published,
and revised training record books
for deck and engine officer trainees
should be published in the first half of
2012. ICS/ISF is currently in discussion
with major labour supply nations such The rationale for the new STCW records of the hours of work and 27
as the Philippines about the use and requirements, which were adopted rest on board ship by using the ISF
approval of the updated books. in 2010, was to ensure that the Watchkeeper software, which, as
IMO requirements are compatible well as producing individual seafarers
As a result of the STCW amendments, with those contained in the ILO records in the format recommended
employers should now generally have Maritime Labour Convention (MLC) by ILO and IMO, allows companies and
far greater confidence in the validity once it enters into force. The task crews to ensure that they comply fully
of seafarers certificates, regardless of IMO was complicated because with both the ILO and IMO limits. An
of the country of issue. This is not the regimes adopted by IMO and upgraded version of ISF Watchkeeper
to say that questions about the ILO were developed for different Version 3, which allows account to be
quality of training in many training purposes. STCW prescribes minimum taken of the new IMO STCW rest hour
institutes have been eradicated rest hours from the safety perspective, limits, was launched during 2011. 
completely. However, there is now while the ILO Convention also takes
a clearer sense that all seafarers account of social issues, such as the Employment Relations
working internationally are part of point at which additional payments
the same global profession, in which for overtime should normally be An unusual feature of international
the paramount importance of safety made and the extent to which work shipping, which observers from
of life at sea and the protection of hours may be subject to negotiation outside the industry sometimes find
the marine environment is far more between employers and unions in surprising, is that there is a powerful
widely recognised. collective bargaining agreements - and global seafarers trade union
issues outside the remit of IMO. in the form of the International
Work Hour Regulations Transport Workers Federation. The
ICS is satisfied that the changes to ITF has a direct impact on seafarers
The prevention of fatigue amongst minimum rest hours agreed by IMO employment and working conditions
ships crews and its potential impact are fully compatible with the ILO on a worldwide basis. Whether
on safety is a major priority for requirements, although in practice employers like it or not, the ITF is
the industry and its regulators. In they are somewhat stricter. In reality, probably as relevant today as when
January 2012, as a result of the given that the STCW amendments it was founded over 100 years ago,
entry into force of Chapter VIII of have already entered into force although the employment conditions
the IMO STCW Convention, new they are likely to become the enjoyed by seafarers in 2012 are of
and stricter regulations came into default regime for port state control course greatly improved and compare
force governing seafarers hours of inspectors. An important aspect of extremely favourably to those which
rest. The minimum rest that must STCW 2010 is the so called Manila they would receive in similar jobs
be received in any 7 day period exception clauses which continue to ashore.
is now 77 hours rather than 70 permit occasional deviation from the
hours and the flexibility previously normal minimum rest hours provided At the 2011 Annual General Meetings
permitted by the 2 day derogation compensatory rest is provided. While of ICS and ISF, the decision was taken
rule under the IMO rules has now lacking the flexibility of the old 2 to fully integrate the two associations.
been removed so that seafarers must day derogation rule, this will allow However, the International Shipping
always have 10 hours rest in any some flexibility during periods of peak Federation is the identity which ICS
24 hour period with no exceptions work load, particularly important for will continue to use when addressing
(apart from during emergencies). A short sea operators. However (with labour relations questions as a
most important requirement is that the exception of emergencies) all partisan employers organisation.
shipping companies are now required seafarers are now prohibited from As part of a major strategic review
to maintain, on a mandatory basis, being on duty for more than 14 hours which led to the decision to integrate
individual records of seafarers hours within any 24 hour period. ICS and ISF, one of the important
of work and rest that may be subject issues identified was the need to
to inspection by port state control. Many companies are now ensuring strengthen dialogue with ITF at both
that they are maintaining accurate strategic and working levels. The
aim of member national shipowners
associations, which have their own
relationships with their national trade
unions that are affiliated to ITF, is
to be actively co-operative on non-
contentious practical matters, but to
stand firm when required.

ISF has a long standing institutional

role with ITF as its official social
partner at the International Labour
Organization (ILO), and has common
cause with ITF national union affiliates
on many issues such as piracy and
the unwarranted criminalisation of
seafarers, as well as matters relating
to the regulation of safety and high
quality training. In the sphere of
employment relations, however, the
characteristic relationship between
ISF and ITF has sometimes been more
confrontational, primarily due to
ITFs Flag of Convenience Campaign
against open registers, and its
insistence that ship operators pay
ITF minimum wage rates in the face
of the threat of boycott action by its
dock worker affiliates.

In recent years, however, less

emphasis perhaps than hitherto has
been given to this more difficult
aspect of relations with ITF. In part
this has been due to the positive
focus given by both sides to the
successful development of the ILO
Maritime Labour Convention and its
subsequent implementation. The
relationship between ISF and ITF has
also evolved due to the emergence of
the International Maritime Employers
Committee (IMEC), which comprises
individual companies, and is now an
associate member of ISF/ICS, and the
establishment of the International
Bargaining Forum which conducts
international wage negotiations with
ITF. ISFs historic refusal to negotiate
directly with ITF about seafarers
terms and conditions, which is a tonnage threshold has already been of the ISF Labour Affairs Committee, 29
matter for individual companies achieved and companies therefore Arthur Bowring (Hong Kong) served
and their national associations, is need to be ready to ensure full as the employers spokesman,
therefore less of an issue. Relations implementation and compliance with supported by 25 delegates from
with ITF have also improved following the MLC standards. national shipowners associations.
the resumption of discussions at the
ILO Joint Maritime Commission about The ILO MLC addresses a wide The vast majority of companies
a revision of the ILO Minimum Wage range of matters including, amongst should not have any difficulty
for Able Seafarers (see page 30). others, the obligations of shipping complying with the substance of
companies with respect to seafarers the Convention, since this is largely
In May 2012, in order to explore contractual arrangements, the derived from existing ILO maritime
means of further improving responsibilities of manning agencies, standards and accepted good
co-operation, ISF held a high- working hours, health and safety, employment practice. However, the
level meeting between senior crew accommodation, catering enforcement mechanism is new, and
representatives of national standards, and seafarers welfare. it will be important to avoid teething
shipowners associations and ITF As an official social partner, under problems as some of the more
union affiliates in London, the the tripartite ILO process, ISF was detailed requirements are applied and
first such meeting outside of the responsible for negotiating the text of interpreted.
institutional setting of the ILO for the Convention on behalf of maritime
over 10 years. It is hoped that this employers, with governments and During the course of 2012, ISF
will be first of several meetings at seafarers trade unions. ISF therefore expects to publish an updated edition
which ISF and ITF members will be has a very special interest in wanting of its Guide to the MLC. The first
able to identify issues on which they to assist the Conventions smooth edition was produced shortly after
can collaborate more effectively, implementation. the MLC was adopted in 2006, and
while maintaining dialogue on those sought to introduce ship operators
matters on which there may still be An important aspect of the to their obligations under the new
fundamental differences of approach. Conventions enforcement will be the regime. In the intervening period,
issuance by flag administrations of much work has been done by
Maritime Labour Standards Maritime Labour Certificates, usually several ILO tripartite working groups,
following inspection by a Recognized comprising governments, unions and
For the large majority of seafarers, Organization such as a classification national shipowners associations to
employment conditions at sea already society, appointed by the flag state. ensure that all concerned understand
match, or in most cases comfortably There is also a separate requirement their responsibilities. This second
exceed, those that they could obtain for ships to maintain a Declaration edition has therefore been updated
in shore based employment at home. of Maritime Labour Compliance. to take account of these recent
However, the maintenance of good Importantly, compliance with the clarifications from ILO. Additional
employment conditions is crucial to the MLC will be subject to port state guidance has also been added in
industrys ability to attract and retain control as well as to inspection by flag order to help maritime employers
the competent and well qualified administrations. apply the ILO standards in a practical
seafarers on whom it depends. manner.
In December 2011, in Geneva,
Following ratification by a growing ISF co-ordinated shipowner It is hoped that the second edition
number of flag states including the representation at a major tripartite of the ISF Guide will prove useful
major open registers (26 of the 30 meeting of governments, employers in assisting shipping companies in
nations required, at the time of and unions which agreed terms of preparing for the implementation of
writing) the ILO Maritime Labour reference for a Special Tripartite the MLC by governments, whether
Convention (MLC) is expected to Committee that will oversee proposals in their capacity as flag states, port
enter into force globally very soon, for amendments to the ILO MLC once states or labour supply nations. ISFs
probably during 2013. The required it enters into force. The Chairman intention is to promote and help
 Representing the
Global Shipping
Industry

30 deliver the global level playing field

of decent maritime labour standards
that both the shipping industry and
seafarers require.

ILO Minimum Wage

About two thirds of the worlds 1.5
million merchant seafarers come from
developing countries. While wage
rates are commonly affected by a
seafarers country of residence, the
shipping industry generally provides
high levels of remuneration to all
those employed at sea. Indeed, the
shipping industry is probably unique
in that it has a mechanism for
recommending minimum acceptable
international wage rates.

The Minimum Wage for Able

Seafarers is agreed by the
International Labour Organization
(ILO) Joint Maritime Commission
(JMC) which comprises representatives
of national shipowners associations
and seafarers unions. ISF (the
identity used by ICS when acting as
an employers organisation) is the
co-ordinator of the Employers Group
at the JMC while the International
Transport Workers Federation (ITF)
co-ordinates seafarers representation.
Unlike other ILO institutions, the
JMC is bipartite and does not involve
governments.

In January 2012, the ILO Minimum ILO headquarters in Geneva

Wage for Able Seafarers increased to
US$555 a month from the previous
figure of US$545 which had come 2013 and US$585 for 2014, with wage figures are realistic given the
into effect in 2009 in line with an no further revision expected to take continuing uncertainty created by
earlier schedule of agreed increases. effect until at least 2015. This will the global economic crisis. ISF had
This latest increase followed an hopefully provide employers with the previously explained to ITF that
agreement by the JMC which met in stability they need during the difficult employers simply could not agree
Geneva at the end of April 2011. economic circumstances anticipated to any immediate further increases.
In reality, the JMC has agreed a four in the years ahead. However, while many unions
year deal whereby the ILO minimum recognised the need to help safeguard
wage will increase to US$568 for ISF believes that the new ILO employment for seafarers, some
unions were clearly disappointed by Asian Developments to contract with local Ship Pollution 31
this response. The JMC therefore Response Organisations (SPRO)
agreed to adopt a schedule of To a certain extent, some parts of in order to enter Chinese ports
increases that will apply until 2015. the shipping industry have been commenced from 1 January 2012 and
shielded from the effects of the global was enforced in all ports from March.
ISF remains strongly committed to economic slowdown by continuing In November 2011, at the invitation
the principle of the ILO Minimum growth in Asia, driven especially by of the International Group of P&I
Wage recommendation which is now Chinas inexorable expansion and Clubs, ICS and representatives of the
referenced in the new ILO Maritime its seemingly insatiable demand for China and Hong Kong Shipowners
Labour Convention, although it has in raw materials. However, in early Associations met with the Chinese
fact existed for over 50 years. While 2012, China announced its intention Maritime Safety Agency in Beijing.
it is only recommendatory, and is to subtly rebalance its economy, Shipowners concerns about the
not directly relevant to other seafarer with less emphasis on massive ability to comply with the requirement
grades, it has a strong moral authority further infrastructure growth and a to pre-contract with an approved
and is particularly important for redirection of resources into increased SPRO by the initial 1 January 2012
employers in developing countries. personal consumption. While China implementation date were conveyed,
The ILO Minimum Wage also is still expected to continue to grow at along with concerns about the very
influences many collective bargaining an impressive rate, this shift in policy high SPRO retainer fees that had been
agreements, including those enforced could eventually have implications quoted. The initial implementation
by ITF, and is sometimes referred to in for the future expansion of Chinas process has been problematic but it is
legal rulings. demand for shipping services. In hoped that it will be smoother going
the longer term, moreover, it has forward.
The ILO Minimum Wage is substantially also been suggested that as wage
higher than that paid for comparative differentials between Chinese It is generally accepted that the centre
work ashore in developing countries. workers and those in other emerging of gravity of the shipping industry
Moreover, the actual minimum wage economies reduce, there may a is moving towards Asia. A positive
is significantly higher, typically perhaps relocation of manufacturing towards development is that Asian maritime
50% more, once overtime hours (fixed Latin America and, in particular, to administrations have become
at a minimum of one and a quarter Mexico with its close proximity to increasingly confident and articulate
times basic pay) and other mandatory the United States. More immediately, when presenting their views at fora
ILO requirements, such as payments however, with most of the Eurozone such as IMO, not least on issues such
for leave entitlements, are taken into now in recession the current concern as the regulation of CO2. In particular,
account. It is also only a minimum. is that this is likely to have a direct ICS has found common ground with
Most ratings from developing impact on maritime trade as the China with respect to its emphasis
countries receive significantly more, import of Chinese products is reduced. on efficiency improvements, as
while officers receive substantially opposed to setting absolute targets
more, with differentials between On the regulatory front, Asian for emission reductions as favoured
officers from OECD and developing nations generally have a track record by the EU. India has also made an
countries continuing to narrow. of being less inclined towards the important contribution to the debate
adoption of unilateral shipping by warning of the dangers of CO2
regulations at variance with regulation being applied as a form of
international standards agreed by green protectionism. In a welcome
IMO. However, one issue that ICS move, in December 2011, India
has been following closely has been ratified Annex VI to the MARPOL
the China Pollution Regulations. The Convention governing atmospheric
Regulations came into effect in 2010 emissions, which also includes the
and introduced new operational and technical and operational measures
liability requirements for shipowners. for CO2 reduction agreed by IMO in
Implementation of the requirement July 2011.
 Representing the
Global Shipping
Industry

32 As reported elsewhere, ICS has single currency will weather the storm
welcomed the pragmatic approach and hold together in the longer term.
of Asian authorities towards While the current recession in the
the development of maritime Eurozone will almost certainly have a
competition regulation. This includes negative impact on global shipping
the adoption, in June 2011, of markets, if the Eurozone crisis worsens
guidelines concerning non-rate fixing the effect on the world economy could
agreements such as consortia, by the be very serious indeed. More
Asia Pacific Economic Co-operation immediately, however, the European
forum (APEC) which is becoming debt crisis also means that a major
increasingly active on maritime issues. source of ship financing has virtually
dried up, with most of the major
ICS continues to enhance its good shipping banks being located in Europe.
relations with the Asian Shipowners
Forum (ASF) whose membership Despite the political and economic
comprises national shipowners turmoil in Europe, the EU institutions
associations, many of which also remain committed to taking forward
belong to ICS. As a sign of this their agenda with respect to maritime
increasing co-operation, ASF has regulation. In co-operation with the
participated in recent meetings with European Community Shipowners
the Consultative Shipping Group Associations (ECSA), ICS seeks to
(CSG) of maritime administrations ensure that proposals in Europe remain
organised by ICS, while the ASF compatible with the global maritime
Secretary General now attends ICS regulatory framework which the
Board meetings. In May 2012, in shipping industry requires.
Australia, the ASF Annual Meeting
will for the first time be held back-to- Notwithstanding IMOs achievement
back with that of ICS. in adopting a package of international
regulations to reduce shippings CO2
EU Developments emissions, the European Commission
is proceeding with the development
During 2012, the of regional measures for shipping in
situation in Europe is the event that IMO is unable to reach
expected to be agreement on Market Based Measures.
dominated by the While this decision is disappointing,
continuing crisis with respect to the the time scale for the implementation
long term viability of the Euro. This of such measures is believed to be
has been brought about by the five years, and the Commission is
diverging economic circumstances understood to remain serious in its
within individual EU Member States, preference for a global solution to
not least with respect to increasing be agreed at IMO. Nevertheless, in
unsustainable levels of sovereign debt. consultation with ECSA, ICS has
EU leaders, in numerous crisis summits, submitted comments to a formal
have sought to respond by providing consultation by DG Climate Action,
support to failing economies such as disputing the rationale for a regional
Greece, as well as pumping huge regime and reiterating opposition to
amounts of money into the Eurozone the inclusion of shipping into the EU
banking sector as a whole. However, Emissions Trading Scheme (ETS).
the jury is still out on whether the In public, the European Commission is
still open minded about applying the
ETS to shipping. But the application,
in January 2012, of a regional ETS
to international aviation, has not
been a pleasant experience for
the Commission which has had to
face vigorous opposition from the
United States and China, amongst
others, who have indicated they may
take retaliatory measures such as
cancelling orders for European aircraft.
It remains to be seen whether the
EU will back down with respect to
aviation, but if it should do so it is
difficult to see how an ETS could
then justifiably be applied to shipping,
which unlike aviation already has an
international agreement in place that
will dramatically reduce emissions.

As discussed elsewhere in this

Annual Review, other important
EU files include: the draft Directive
on the implementation of the IMO
regulations on sulphur emissions,
which may include the extension of
Emission Control Areas; its response
to the Costa Concordia cruise ship
disaster, and the implementation of
the EU Passenger Liability Directive;
and the ongoing investigation by
the Competition Directorate of the
International Group of P&I Clubs. The
continuing commitment of the EU
to counter-piracy operations in the
Gulf of Aden is also most important
and is greatly appreciated by the
international shipping industry.

Another most important issue is the

current review of the EU State Aid
Guidelines for the Maritime Sector
which will decide whether to permit
the continuation of tonnage tax
regimes in Europe. The review is
important because EU tonnage tax
schemes have provided a model for
similar regimes that are now applied
by governments throughout the
34 world, and are vital for shipping in continue to seek to implement rules port, and are still subject to legal
order for it to operate in what are at variance to both Federal and challenge by the Pacific Maritime
volatile and highly cyclical global international requirements. Indeed, Association. However, following
markets. However, the review is one characteristic of the Obama US ratification of the IMO MARPOL
complicated because it is being Administration that has been a source requirements on sulphur emissions
overseen by the Competition of frustration for shipping has been from ships, it is hoped that the
Directorate rather than DG MOVE the apparent reluctance of the current temptation for individual US States
as has previously been the case, the US Administration to defend Federal to develop their own environmental
former perhaps not being so familiar regulations from infractions by US rules will diminish.
with the unique circumstances that States.
apply to shipping. At the request A particular example of unwelcome
of ECSA, ICS is therefore submitting A positive development in April regulation adopted by an individual US
comments to the Commission in 2012 was the publication by the US State is that adopted by Massachusetts.
favour of the maintenance of the Coast Guard of its final rule making This stipulates that visiting tankers that
status quo. on ballast water treatment, which do not elect to comply with certain
adopts a kill standard for marine additional requirements will be subject
US Developments micro-organisms which matches that to financial liabilities in excess of those
adopted in the IMO Ballast Water set out in Federal law in the event of
Unlike Europe, the US Management Convention. However, a pollution incident. The issue for ICS
economy is showing serious questions remain as to has been one of principle, due to the
signs that it is beginning whether the US standards for type encouragement that this coercive law
to recover, although whether this will approval of equipment (in line with its might give to other US States to take
be sustained far beyond the Environmental Technology Verification their own unilateral actions, which
Presidential election in November Program), or the ballast water will result in conflicting regulations.
2012 is unknown, as is the extent to sampling standards that will be used In co-operation with other industry
which this will feed into increasing to inspect ships trading to the US, will associations, ICS has therefore been
demand for shipping. An interesting be consistent with those expected to involved with a legal challenge. The
development is that the United States adopted by IMO in 2013. The door is intention of the action was to make
is gradually reducing its dependency also still open for the Coast Guard to the US Coast Guard defend its own
on foreign energy supplies as it introduce more stringent treatment regulations. Disappointingly, however,
dramatically increases its exploitation standards if it is established that the the Coast Guard has so far shown
of shale gas. In November 2011, the technology has become available in little interest in doing this for what
Administration also announced its the future, which will be of concern are principally assumed to be political
proposed five-year plan for offshore to those shipowners investing money reasons.
oil drilling which called for the into expensive treatment equipment
opening of new areas in the Gulf of now. Moreover, the problem remains Trade Sanctions
Mexico and Alaska. Another of some individual US States still
interesting known unknown is the considering the implementation of One of the major political dramas
impact that the expansion of the treatment standards 100 times more being enacted in 2012 is the action
Panama Canal (which is due to be stringent than what has been agreed being taken by the international
completed in 2014) will have on US at IMO and for which the equipment community in response to Irans
shipping trades, especially containers. required simply does not exist. nuclear programme. In a worst case
scenario, tension in the Middle East
In view of the run-up to the ICS is also engaged in the ongoing could lead to closure of the Straits of
Presidential elections, legislative saga of Californias unilateral Hormuz through which so much of
activity within Congress is expected air pollution rules, which in the worlds oil passes, with dramatic
to be limited, although US Federal contravention to UNCLOS apply to effects on oil prices and the recovery
regulatory agencies still have a full ships within 24 miles of the US Coast of the world economy. However, the
agenda, while individual US States even if not calling at a Californian immediate preoccupation for ICS
Representing the
Global Shipping
Industry

35
Representing the
Global Shipping
Industry
has been the challenge presented by The new EU sanctions announced in reinsurance cover from other EU 37
sanctions legislation. January 2012 extend to the carriage based reinsurers.
of petrochemical products and
In co-operation with the International crude oil, and will fully apply to any All International Group Clubs have
Group of P&I Clubs, ECSA and the existing contracts from May and July included in their rules, in one form
Chamber of Shipping of America, ICS respectively. These actually build upon or another, either express sanctions
has sought to provide information previous sanctions relating to any to cover termination or exclusion
via national associations about the items that might assist Irans nuclear provisions for imprudent or improper
impact on shipping companies of programme in terms of the territory trading. The effect of these rules
sanctions against Iran announced by and the entities to which they apply. is to withdraw or exclude cover
the European Union and the United In short, the sanctions apply to in relation to sanctions offending
States. It remains to be seen whether shipowners incorporated or domiciled voyages. In other words, if a shipping
other important trading nations will in EU nations, to ships registered in company undertakes such a voyage
introduce similar sanctions. or flying the flag of an EU Member its liabilities will not be insured by the
State, and to all vessels, regardless of International Group.
There is undoubtedly a need for place of registration, which trade to
governments to provide greater clarity EU ports. This restriction will therefore also
and uniformity with respect to the have an impact on any compulsory
application of sanctions, whether in However, the EU sanctions also apply insurance certification required by
the context of Iran or other nations, to insurers within the EU, prohibiting IMO Conventions (while payment
such as Syria, to which they might be them from issuing or maintaining for liabilities that are subject to
directed. The situation is not helped insurance with regard to any compulsory insurance may also
by the fact that governments no sanctionable activity or trade. They be caught by the prohibitions in
doubt want their sanctions legislation therefore apply to P&I Clubs (and their the sanctions). As a consequence,
to be as ambivalent and flexible in its reinsurers) as well as to hull insurers shipowners in breach of sanctions
interpretation as possible, in order to (and their reinsurers), which are may also be violating flag state law,
further their foreign policy objectives. incorporated, domiciled or regulated even if the flag state is not connected
within an EU Member State. Most with the EU. As well as monetary
The sanctions so far enacted against P&I Clubs, and a large proportion of fines, penalties may include detention
Iran have an impact far beyond EU or hull insurers, are located in Europe, of the vessel and suspension of the
US operators, even for ships flagged while most reinsurance is provided in vessels certificate of registry.
in and trading to countries outside London or in the United States, where
the EU and US. This is because most it will also be affected by the US In April 2012, it was still uncertain
marine insurance (and reinsurance) is sanctions. what the exact scope of the sanctions
based in London; while US legislation would be. However, the concern
will prevent tanker operators that call With specific regard to third party remains that those responsible for
in Iran from trading to the US. liability insurance provided by the developing sanctions policy may have
International Group of P&I Clubs little understanding of the wider
Although many questions raised by (IG), the EU sanctions will also affect consequences for shipping and trade,
shipowners have been addressed by vessels that would otherwise fall many of which may be unintended.
extensive advice produced by the outside the jurisdiction of EU Member
International Group of P&I Clubs, States, even if such vessels have
there is still some uncertainty as to their P&I insurance with a non-EU
the precise scope of the sanctions, registered P&I Club. This is because
particularly with regard to their such a Club (if an IG member) will be
impact on compulsory insurance unable to obtain access to reinsurance
cover as required by the Civil Liability from the EU based Clubs via the IG
(CLC) and Bunkers Conventions for oil Pooling Agreement. A non-EU Club
pollution. will also be unable to access market
 Representing the
Global Shipping
Industry

38 LLMC Increases
In April 2012, the IMO Legal
Committee agreed significant increases
to the limits of liability under the
Limitation of Liability for Maritime
Claims Convention 1996 (LLMC).
Under the IMO tacit amendment
procedure, the 51% increases will
come into effect in 2015. In addition
to general maritime claims, the
LLMC limits also apply to claims
under IMO Conventions governing
liabilities for bunker spills (other than
claims covered by the Civil Liability
Convention) and wreck removal once
the Nairobi Convention enters into
force.

The increases were made at the initial

request of Australia in response to
the Pacific Adventurer bunker oil
spill in Queensland in 2009 where the
clean-up costs were thought to have
exceeded the applicable limitation
amount. Australia had support from
20 co-sponsoring nations, which
meant that the fact the limits would
be increased was probably never in
doubt. In the event the real debate
was about the quantum of the
increases. Australia had made it clear
from the outset that it was seeking
the maximum amount possible via
the tacit amendment procedure,
namely 6% per year calculated on a
compound basis from 1996. However,
Japan was firmly of the view that
the increases should not be higher
than the rate of inflation during the
relevant period (some 2.7% per year
compounded).

Throughout the debate at IMO over

the past two years, ICS observed that
the industry was open to a discussion
of increases, but that these had to be
based on the criteria specified in the
tacit amendment procedure, namely
the claims history, inflation, and the soon following ratification by EU continue, and it is still unclear what 39
effect on the cost of insurance. Member States) not least the need the rates will be and whether larger
for certification of insurance cover for ships will be covered.
Some nations continued to express terrorism and war risks.
doubt as to whether any increases Although the IG P&I Clubs have
were justified in view of the statistics In co-operation with ECSA, and the now decided to issue certificates of
compiled by the International Group International Group of P&I Clubs insurance for the non-war risks arising
of P&I Clubs. These showed that (IG), ICS is also seeking to address under the EU PLR and the IMO Athens
only a small number of claims had the similar problems that may arise Protocol, they have yet to decide on
not been compensated fully under as a result of the enforcement of the the provision of IG Club cover for the
the present limits. There was also EU Passenger Liability Regulation war/terrorism risks.
a robust discussion about how (PLR) with which ship operators must
inflation should be calculated with comply from 31 December 2012, and In October 2011, ICS met with EU
many states supporting the Japanese which broadly mirrors the IMO Athens governments to obtain their views
position. It was acknowledged that Protocol requirements. on the structure of the insurance
it was not possible to quantify the vehicle proposed by Marsh Ltd, and
effect of increased limits on insurance The issues are complex, but the from the limited responses received
premiums because that would depend thorny issue of terrorism cover has it would seem that governments
on future claims. But if a major hampered implementation of the IMO will accept it, notwithstanding the
incident now occurs that is subject to Protocol since IMO Members States practical difficulties that might arise
the higher limits, then this is likely to first rejected industry arguments for claimants in the aftermath of a
be reflected in increased premiums that terrorism is an attack on society casualty, such as the need to deal
soon afterwards. at large and that the costs should with a multiplicity of insurers for
therefore be borne by governments. their individual indemnities. The
ICS believes that the final increases Instead IMO decided that the provision governments approach appears to
agreed by IMO are a reasonable of such cover should be left to the be guided by a general understanding
calculation. It remains to be seen market. that such cover might not be available
what economic impact the new limits elsewhere and that this is the best that
will have on the industry after they The potential liabilities to which the can be obtained from the commercial
come into effect in 2015. However, it Clubs might be exposed under the market. But it is uncertain whether
is to be hoped that the increases will Athens Protocol are huge, perhaps they are fully au fait with all of the
ensure that the principle of limitation in excess of US$5 billion per ship potential complexities involved
of liability will be maintained, which is in a worst case scenario. The P&I
vital if shipowners are to continue to Clubs communicated their difficulties Given the complication of having
have access to affordable insurance. It in providing cover for terrorism to have separate terrorism cover,
is also hoped that the new limits will (which could have implications for the industry is trying to persuade
not deter less developed nations from the insurance they provide to non- governments to develop a common
subscribing to the LLMC. passenger shipping) and a compromise position with regards to port state
was arrived at by the IMO Legal acceptance of insurance certificates.
Passenger Ship Liability Committee in 2006, whereby cover ICS and ECSA are also encouraging
for terrorism could be limited to governments to ensure that when
Questions relating to passenger US$500 million. However, this IMO ratifying the Athens Protocol they
liability insurance are likely to receive compromise was underpinned by a make the important reservation, as
additional attention as a result of the scheme proposed by the insurance agreed and recommended by IMO,
Costa Concordia cruise ship tragedy. broker Marsh Ltd. While Marsh has with respect to shipowners liability
However, the immediate focus of ICS advised its scheme will be up and for war and terrorism risks. However,
is the implications of the entry into running in time for the application some detailed discussions will be
force of the 2002 Protocol to the IMO of the EU PLR at the end of 2012, needed between now and the end of
Athens Convention (which is expected questions about the schemes viability the year.
 Representing the
Global Shipping
Industry

40 Environmental Salvage Awards

In co-operation with the International
Group of P&I Clubs, ICS continues
to lead shipowner representation on
salvage issues, particularly in relation
to the smooth operation of the Lloyds
Open Form and SCOPIC (special
compensation) regime.

ICS is maintaining its firm opposition

to proposals from the International
Salvage Union (ISU) for a new
separate award for environmental
salvage when salvors have carried
out operations in respect of a ship or
cargo which has presented a threat
of damage to the environment. ICS
is deeply sceptical about the proposal,
believing that salvage services are
already generously rewarded under
the present system.

A working group established by

the Lloyds Salvage Group, in which
ICS participates, has reached a
stalemate following the ISUs inability
to demonstrate that its proposal
would improve salvage response, or
deliver cost savings to those paying
for salvage services. However, the
ISU has succeeded in persuading
the Comit Maritime International
(CMI) ,the international association
of maritime lawyers, to give
consideration to its proposals for a
revision of the IMO Convention on
Salvage and also to amend the Lloyds
Open Form (LOF).

Despite the lack of industry

consensus, a CMI working group
has already started work on possible
amendments to the LOF. ICS regards
this development with particular
dismay since it appears to involve
the discussion of proposals to
amend what in effect is a private
contract without the involvement
of at least one of the parties, whilst regimes such as the Hamburg and 41
bypassing the long standing forum Hague/Visby Rules, taking account of
already established to carry out such modern multi-modal transport and
work which is the Lloyds Salvage door to door delivery practices.
Group. In March 2012, ICS and the
International Group of P&I Clubs ICS recognises that the new rules
wrote formally to CMI, setting out may not be perfect, and in some
shipowners concerns in the strongest respects are overly complex. However,
possible terms. maintenance of the status quo is not
a realistic option. If the Rotterdam
The ISUs proposals with respect Rules do not take hold then the
to environmental awards will United States and the EU will almost
be discussed further at the CMI certainly pursue their own regional
Conference, in Beijing, in October regimes and the opportunity for
2012 at which ICS will be represented. global uniformity will be lost for
Given that CMI does not plan to invite another generation. Following a
detailed presentations to be made on thorough and detailed analysis of the
these issues by all of the interested Rotterdam Rules, ICS members have
parties, it is of the utmost importance therefore concluded that the new
that the report of the CMI working regime must be strongly promoted by
group is as balanced as possible the shipping industry in order to avoid
and reflects the division within the the risk of a proliferation of regional
industry. The CMI should also bear cargo liability regulations.
in mind that amendments to IMO
Conventions have to be proposed by Encouragingly, the United States
governments, and that the IMO Legal appears to be committed to the
Committee is unlikely to entertain early ratification of the Convention.
proposals that fail to demonstrate any With the full support of US carriers
compelling need. and shippers, the State Department
has prepared a file to be put before
ICS does not believe that the Congress which is expected to
proposals concerning environmental take this forward after the 2012
salvage enjoy the support of most Presidential Election. This will almost
national maritime law associations, certainly give critical momentum to
and in March 2012 ICS published a the process of ratification worldwide,
detailed position paper reiterating the with China and other Asian nations
arguments as to why they should not likely to wish to align their regimes
be supported. with the US. Meanwhile, although
some parts of the European
Rotterdam Rules Commission, who may have been
influenced by the European Shippers
ICS continues to promote the Council (ESC), have been ambivalent
ratification of the Rotterdam Rules about the UNCITRAL Convention,
on cargo liability which were for the moment at least the EU has
formally adopted in 2009 by the put aside plans for a regional cargo
United Nations Commission on liability regime, and many EU States
International Trade Law (UNCITRAL). are proceeding towards ratification.
The Rotterdam Rules are intended Moreover, the doubts about the
to replace outdated cargo liability Rotterdam Rules displayed by the ESC
42 are not shared by the Global Shippers those parts of the world where they of the antitrust immunity which is
Forum which embraces US and Asian are still permitted, ICS policy is to still enjoyed by the international liner
shippers. defend the continued existence of industry in US trades. Fortunately,
liner conferences and other similar this Bill is now dead and little further
While those who were deeply exemptions to competition law such action is anticipated until after the
involved in the negotiations, such as discussion agreements. The EU Presidential elections in November
as ICS, are clear about the need to Competition Directorate, however, 2012. The FMC has reached no
encourage governments to ratify continues to argue forcefully that its firm conclusions as to whether any
and implement the Rotterdam Rules, foreign trading partners should follow changes are warranted with respect
there still appear to be reservations its unilateral example of making to current US competition regulations
in some quarters, including in Asia, shipping companies participation in such as the Ocean Shipping Reform
about the benefits of the new such mechanisms illegal. Act. However, the FMC study does
regime. An ongoing priority for ICS, seem to provide evidence in support
in co-operation with local national ICS has therefore welcomed the of maintaining the status quo should
associations and bodies such as publication, in February 2012, by there be further calls for the US to
the Asian Shipowners Forum, is to the United States Federal Maritime follow the example of Europe.
explain to these interests why the Commission (FMC) of its detailed
Rotterdam Rules should be supported. study of the impact of the EU Meanwhile, in Asia, following on
prohibition on US trades. Many of from the decision by Singapore that
Competition Issues the FMCs conclusions appear to its block exemption from competition
support the ICS position in favour rules for liner shipping agreements
Compliance with competition law of the maintenance of the status will be extended until 2016, ICS has
is most important given that even quo with respect to current antitrust welcomed the similar decision by
technical violations by shipping immunity that applies in non-EU Japan, in June 2011, to maintain its
companies can result in penalties trades. Antitrust Immunity System until at
amounting to tens of millions of least 2015. Japan has also concluded
dollars. In May 2011, most of Based on its examination of the that the EU repeal of antitrust
the major international container period 2006-2010, the FMC has immunity has led to increased
lines were presented with a concluded that the repeal of the EU volatility of freight rates in European
sharp reminder of this when the Block Exemption has apparently not liner trades, as well as a rise in
European Commission launched a resulted with any relative decline surcharges levied by individual carriers.
dawn raid on numerous company in EU freight rates compared with In addition, the Japanese government
offices. Apparently this was to Far East/US trades. In other words, was concerned that the drastic
establish that its major shake-up of shippers in EU trades have not been rationalisation of liner services by
competition rules in 2008 is being advantaged as a result of the EU individual carriers which has ensued
fully complied with. It is understood decision compared to shippers in since the downturn, and which has
that the European Commission was Far East/US trades where the EU resulted with a reduction of available
not responding to any particular prohibition does not apply. There also services, was partially a result of the
complaint; nor is there reason to appears to have been an increase in lines reduced ability to co-operate.
believe that there has been any non- rate volatility in EU trades, compared
compliance. (However, in March to Far East/US trades, and the ICS has welcomed the agreement
2012, the European Commission also FMC suggests that the activities of by the Asia Pacific Economic
demonstrated its power by fining discussion agreements that are still Co-operation forum (APEC), in June
14 international logistics companies, permitted in non-EU trades may have 2011, on guidelines on maritime
including UPS and Kuehne & Nagel, had a dampening effect on rate competition rules, specifically for
169 million for collusion with respect volatility. co-operation agreements which
to security surcharges.) do not involve rate setting, such as
A Bill introduced to the US Congress consortia. Although a far looser form
The above notwithstanding, in in 2010 proposed removal of much of co-operation than conferences,
 Representing the
Global Shipping
Industry

consortia have provided stability

to markets, helping guarantee the
maintenance of scheduled services
to more remote destinations and
permitting efficiencies such as
slot sharing on containerships. In
particular, consistent with arguments
presented by ICS (and the World
Shipping Council) at an earlier APEC
consultation meeting in Tokyo, ICS
has welcomed the recommendation
that filing requirements should be
left to the discretion of individual
governments, since these are
commonly requested by those
governments which continue to allow
a more flexible approach with regard
to co-operation between shipping
companies.

A number of other Asian jurisdictions

are also reviewing the application
of antitrust law to shipping as part
of their development of general
competition law. The latest country
to do this is New Zealand. In
September 2011, ICS submitted
comments to the New Zealand
Productivity Commission and urged
the New Zealand government to
consider the maintenance of practices
permitted in the rest of the Asia-
Pacific.

In January 2012, New Zealand

released a draft report of its enquiry
into international freight transport
services which recommends that
its exemption for ratemaking or
capacity limiting agreements be
repealed, but that the exemption
for non-ratemaking activities should
be retained, conditional on filing
the agreements with the Ministry of
Transport.
 Representing the
Global Shipping
Industry

44

EC Investigation of IG of IG, the Commission having opened therefore emphasised that the mutual
P&I Clubs formal proceedings in 2010. The insurance arrangements provided
Commission had stated that it was by the P&I Clubs are efficient and
ICS firmly believes that the current simply conducting an investigation, cost effective. For their part, the
system of mutual third party and that this did not imply that there Commission officials who were then
liability insurance provided by the was any proof of infringement. The involved had stressed that they were
International Group of P&I Clubs (IG) Commission had also advised that not intent on destroying the system
continues to serve the best interests it had opened the investigation on but were interested in the quotation
of ship operators and their customers its own initiative and that it had not procedure, release calls, and the
extremely well, alongside serving the received any formal complaints. availability of commercial P&I insurance
interests of claimants and the general outside the International Group system.
public. In particular, the mutual It was originally understood that
insurance arrangements provided by the Commission wished to examine In 2011 the Commission sent out
the Clubs enable the provision of the whether certain provisions of the IG questionnaires to individual shipping
very high levels of insurance required Agreement and Pooling Agreement, companies seeking further information
under international liability conventions, notably the Groups claims sharing on the application of the IG Agreement,
under which compensation to and reinsurance arrangements, and also requested detailed
claimants is generally paid regardless of might somehow lessen competition documentation and information from
fault and without legal wrangles. between the Clubs or restrict the the IG Clubs. However, developments
access of commercial insurers or other have been much slower than expected,
ICS is therefore closely following mutual P&I insurers to the relevant apparently due to the appointment of
the European Commissions markets. In bilateral discussions with a new team of case handlers.
investigations of the activities of the the Commission, ICS and ECSA have
Flag State Performance Nevertheless, ICS believes that a Table for 2011 has been modified 45
balance has to be struck between the slightly in order to address feedback
In a globalised industry such as commercial advantages of shipowners from governments, including
shipping, there is nothing inherently selecting a particular flag and the comments at the IMO Flag State
wrong with a regulatory system in need to discourage the use of any Implementation Committee which
which the flag which a ship chooses ship register that does not meet its questioned some of the criteria used
to fly is different to the country of international obligations. While it is by ICS and whether the data might
beneficial ownership. In particular, shipping companies that have primary be presented in a more positive
ICS believes that generalised responsibility for the safe operation of manner.
distinctions between the performance their ships it is the flag state that must
of open registers and so called enforce the rules. However, the purpose of the new
traditional maritime flags are neither Table is the same: to encourage
helpful nor relevant. Pejorative terms ICS has therefore been a strong shipowners to examine whether a
such as flags of convenience have supporter of the IMO Member State flag state has substance before using
more to do with industrial relations Audit Scheme and has welcomed it and to encourage them to pressure
issues of the 1980s than the situation the decision by IMO for the audits to their flag administration to effect any
which pertains to 2012. Flag states become mandatory in 2014, once improvement that might be necessary.
such as Bahamas, Liberia, Hong the first round of voluntary audits ICS makes no apology for continuing
Kong and Singapore are amongst is complete. In March 2012, IMO to subject flag states to scrutiny, in
the very best performers in terms finalised a draft of its IMO Instrument the same way that ships and company
of their implementation of IMO and Implementation Code, which will procedures are rightly subjected to
ILO requirements and port state underpin the mandatory scheme inspection by governments. The
control inspection records, while the subject to adoption by the 2013 IMO overriding interest in promoting high
ownership profile of many OECD ship Assembly. However, in the interests performing flags is that they are
registers now includes large numbers of transparency, ICS believes that the less likely to tolerate sub-standard
of foreign owned shipping companies. results of the IMO audits should be operators who would otherwise enjoy
published, and that, as a minimum, an unfair commercial advantage over
information should be made available the vast majority of fully compliant
by IMO as to whether maritime shipping companies.
administrations have actually put
themselves forward for inspection. Shipping Policy and Free Trade
In the meantime, ICS has welcomed
the decision of some of the major For the past four years the shipping
regional port state control authorities industry has been confronted with
to request information as to whether unprecedented economic turmoil.
audits have been conducted as part of Much of the industry is still struggling
their criteria for targeting inspections. with the serious consequences of a
truly massive contraction in economic
As a complement to the IMO activity, with global trade estimated
Scheme, and as a service to the to have declined by nearly 10% in
industry, ICS continues to produce 2009. While trade picked up a little,
its annual Shipping Industry Flag especially in Asia, the latest World
State Performance Table which Trade Organization projections for
collates various data available in the 2012 are not very positive and overall
public domain and which can be global trade is probably not much
downloaded from the ICS website. improved on the levels that existed
However, under the supervision of before 2008. The practice of sound
ICSs member national shipowners shipping policy by governments is
associations, the presentation of the therefore as important as ever.
46 Shipping policy involves long market based measures for CO2 restrictions by Argentina on ships
term engagement by ICS and its emissions. that have called at the islands will
member national associations be of great concern because of the
in the largely unseen diplomatic ICS has continued to give input, negative precedent that could be
activity necessary to help ensure the via national associations, on issues set with respect to the maintenance
maintenance of the open markets ranging from problems of market of maritime free trade principles
which the shipping industry needs access to government interference elsewhere.
to operate competitively and in local markets. The CSG is also a
efficiently. Shipping also requires useful conduit for the discussion of Although of little immediate comfort
a regulatory level playing field sensitive diplomatic issues, such as to those individual companies that
and, in view of the great market the treatment of piracy. may still be struggling to survive, one
volatility being experienced during consolation is that governments so far
the current economic downturn, the In addition to the broader role of appear to have made a determined
continuation of the certainty provided the CSG as a forum for discussion effort to avoid the excessive use of
by the tonnage tax regimes that of shipping policy and trade issues, protectionist measures, (although in
now apply to shipping companies it still maintains its original function early 2012 some backward looking
in most countries. In June 2011, as providing a means for the moves were proposed within the
ICS made these important points worlds major shipping nations to EU with respect to government
(as well as highlighting the issue of communicate with the United States procurement). But the recovery
Somali piracy) as one of the leading government, which historically has of the world economy is still far
industry participants at a major often been slightly detached from from certain, and it will remain
Conference of the worlds transport the mainstream of the international important for ICS, and like-minded
ministers in Leipzig, organised by shipping community. ICS will governments, to remain vigilant. In
the OECD International Transport participate at the next CSG dialogue particular, ICS remains committed
Forum, which has continued to focus meeting with the United States, in to the inclusion of shipping in any
on the implications for transport Washington DC, in June 2012. new agreement on services that
as it emerges from the economic may be agreed by the World Trade
downturn. ICS will again be A major concern of ICS national Organization (WTO), in order to
representing the industry at the next shipowners associations has been codify the liberal trading practices
OECD transport ministers conference to discourage governments from which already apply to most shipping
in May 2012. responding to the current economic markets. However, progress towards
crisis with protectionist measures, a new WTO deal on trade remains
More routinely, ICS continues to which will only damage world trade slow, largely due to significant
place great importance on relations further. More particular has been differences between governments on
with the Consultative Shipping the need for governments to avoid issues such as agriculture.
Group (CSG) of governments, measures that restrict fair and open
which is the guardian of maritime access to shipping markets. A Shipbuilding Policy
free trade principles. In June case in point, which received close
2011, in co-operation with ECSA attention in 2011, was the apparent Shipping, of course, is the servant of
and the Royal Belgian Shipowners attempts by the Chinese authorities world trade and just as it benefited
Association, ICS held a seminar on to restrict access to Chinese terminals from the boom years of the mid
trade policy for CSG governments for the ultra large bulk carriers 2000s its fortunes are now also
at their meeting in Brussels. In operated by the Brazilian iron ore inextricably linked to the recent fall
conjunction with ASF and the producer Vale, although this issue in the demand for its services. But
Singapore Shipping Association, a now seems to have been settled many of the problems confronting
similar event was organised in April satisfactorily. Likewise, whilst ICS shipping have undoubtedly been
2012 at the CSG meeting held in has no opinion about the underlying exacerbated by shipowners placing
Singapore which, inter alia, discussed issues surrounding the future of orders for far too many ships, with
the possible trade implications of the Falkland Islands (Malvinas), any far too few cargoes to carry. With
Representing the
Global Shipping
Industry

47
48
 Representing the
Global Shipping
Industry

vast amounts of new tonnage being to meet, in order to explore further Panama Canal, Mr Alberto Alemn 49
delivered during 2012, in many trades what constitutes market distortion Zubieta, who has been pivotal
there is now a major glut of ships. and the means of achieving greater in overseeing the current Canal
transparency on government expansion and strengthening liaison
Current markets would appear to support measures. ICS will attend a with industry has announced that he
be demonstrating just how seriously meeting that OECD is organising in will step down from his post later this
damaging the oversupply of ships Paris in June 2012, with the goal of year. ICS looks forward to working
has been to shipowners revenues, encouraging the resumption of the with his successor, Mr Jorge Quijano,
with many now struggling to meet talks as soon as possible, even if little who will take over in September 2012.
their operating costs. However, immediate movement is anticipated.
the problems of individual owners In January 2012, ICS hosted a
aside, the biggest danger perhaps In view of the serious supply/demand meeting of international industry
is the overcapacity that exists in the imbalance that currently prevails it representatives with a delegation
shipyards, with an almost obsessive is clear that speculative ordering of from the Panama Canal Authority
commitment to market share ships that have no economic purpose (ACP) to discuss the future of
being displayed by the three major should be discouraged. Whatever operations after 2014, when the truly
shipbuilding nations: China, Korea might seem rational from an individual impressive Canal expansion project
and Japan, where 90% of world companys perspective might not be is scheduled for completion. There
tonnage is built. Even if shipyards good when seen in the context of the was a positive exchange about the
go bankrupt, it is likely that their industry as a whole and the individual ACPs preliminary thoughts on how
governments will step in so that companies it comprises. Canal tolls might change. In general,
they can continue to produce ships the ACP indicated that it would like
which few people want, other than However, one thing on which to introduce more segmentation in
speculators who may be foolishly ICS is clear is that it will resist any its tolls in order to better respond to
tempted by knock down prices. suggestion that all ships above a market fluctuations that affect the
However, a market might be found certain age should automatically be competitiveness of the Canal as a
for otherwise unwanted Chinese scrapped. ICS will continue to resist route. The industry had understood
ships by the Chinese fleet itself, with the concept of a maximum age for that these ideas were at an early
China having a widely recognised ships which, as well as damaging the stage and would be subject to much
goal of seeking to carry a much larger commercial interests of large numbers further discussion. ICS was therefore
proportion of its cargoes perhaps of companies, would remove surprised when, at the end of April
50% - on board its own vessels. incentives to maintain older ships and 20I2, the ACP announced major
would have negative implications for toll increases, for many larger (non-
It is therefore a source of safety and environmental protection. container) ships, of 15% over the next
disappointment that the OECD has two years, commencing in July, with
confirmed its decision to terminate Canal Issues even larger increases for many smaller
negotiations on a new agreement vessels. In addition, the ACP has
to eliminate subsidies and market The Panama and Suez Canals reduce announced general increases in tariffs
distorting mechanisms in the the length of many sea voyages by for security and oil spill response
shipbuilding industry. This was thousands of miles, but the privilege services, both of which are mandatory
primarily due to differences between of using them is expensive. Individual for ships passing through the Canal.
the European Commission and Asian transits by large vessels can cost The industry is expected to oppose
governments about the treatment hundreds of thousands of dollars. these developments very strongly.
of pricing of new ships in any new While both Canals are dedicated to
agreement, the latter wishing instead providing excellent service they are Meanwhile, ICS has opposed the 3%
to concentrate on the elimination of also very much committed to profit toll increases announced by the Suez
subsidies - a position supported by maximisation. Canal Authority (SCA) in December
ICS. However, the OECD Working 2011, at a time when the industry is
Party on Shipbuilding will continue The current Administrator of the still struggling to manage the effects
50 of the global financial crisis. Suez associations therefore remains as ICS enjoys good relations with many
Canal tolls have remained frozen for essential as ever. The strength of other intergovernmental bodies that
the past three years in recognition ICSs advocacy at IMO (and the impact on shipping including the
of difficult shipping markets. ICS various other fora that impact on International Association of Marine
therefore co-ordinated an industry shipping) is very much dependent on Aids to Navigation and Light House
response to the SCA, explaining the ICS member associations which Authorities (IALA), the International
that the economic situation has not present agreed ICS positions to their Hydrographic Organization (IHO)
improved and requesting that the maritime administrations in advance and the World Meteorological
increases be adjusted or deferred. of intergovernmental meetings. ICS Organization (WMO). ICS also
Disappointingly, however, the member associations collectively has consultative status with the
increases went ahead unchanged in develop the industrys global positions International Mobile Satellite
March 2012. through a comprehensive structure of Organization (IMSO), which is the
specialist committees (see page 56). body that oversees public safety
Following the dramatic political and security communication services
events in Egypt in 2011, and the Using its separate ISF identity as including the Global Maritime Distress
collapse of other major sources of an employers organisation, ICS is and Safety System (GMDSS). In
foreign income such as tourism, the also an official social partner at the addition, ICS attends meetings of
SCA is no doubt under pressure to Geneva-based International Labour both the Paris and Tokyo MOUs on
maintain its revenue. To the SCAs Organization (ILO) and acts as Port State Control.
credit, the Canal has continued to Secretary to the Employers Group on
function smoothly. However, ICS all ILO maritime issues. As an employers organisation, and
has since repeated its request for full an official social partner at the
and proper consultation between the In addition to interacting with ILO, the opposite number of ISF is
industry and the SCA, particularly individual governments during the International Transport Workers
whenever toll adjustments are being meetings at IMO in London and ILO Federation (ITF). As reported
contemplated. in Geneva, ICS continues regular elsewhere, in April 2012 national
attendance at more general policy shipowner associations and ITF union
Industry Representation and meetings held by the United Nations affiliates held a meeting to exchange
Co-operation in New York, the World Trade views on matters of common interest,
Organization (WTO), the Organization the first such meeting outside the
As the principal international for Economic Co-operation confines of the ILO for a decade. It is
association for the shipping and Development (OECD), the intended that this positive dialogue
industry, the primary focus of ICS Consultative Shipping Group (CSG) will continue. In addition, ISF
representation is the International of maritime administrations, the continues to be a member of the
Maritime Organization (IMO). ICS United Nations Conference on Trade International Committee on Seafarers
participates actively in virtually every and Development (UNCTAD), the Welfare (ICSW) which embraces
IMO Committee and Sub-Committee World Customs Organization (WCO), secular and religious seafarers
as well as numerous specialist and, in so far as they are relevant to welfare organisations.
working and correspondence groups. seafarers, bodies such as the World
ICS is therefore acknowledged by Health Organization (WHO). Given In view of the importance of ensuring
governments as representing the the importance of discussions about global regulation for a global industry,
considered views of all international CO2 emissions reduction, ICS has ICS continues to work closely
ship operators. also taken up consultative status with the European Community
with the United Nations Framework Shipowners Associations (ECSA) in
Whilst efficient global shipping Convention on Climate Change communicating on issues with Europe
depends on a system of uniform (UNFCCC) and represented the that are relevant from an international
global rules, ship operators still live industry at the last UN Climate perspective, and participates in
in a world of nation states. The Change Conference (COP 17) in consultations organised by the EU
importance of national shipowners Durban in December 2011. institutions. In the United States, ICS
Representing the
Global Shipping
Industry

51

IMO in session
 ICS/ISFons
i
Publica1t2
20

eration
ipping Fed
onal Sh
Internati
ing
amber of Shipp
onal Ch tions
Internati Publica
Marisec rg
le from
Availab www.marisec.o

52 works with the various US agencies (IMCA), the International Maritime changes necessitated by the STCW
that impact on shipping in liaison with Employers Committee (IMEC), the 2010 amendments.
the Chamber of Shipping of America, International Support Vessel Owners
which by agreement officially Association (ISOA), the International Anticipating the entry into force of
represents ICS in US discussions. Parcel Tankers Association (IPTA), the the ILO Maritime Labour Convention,
Additionally, ICS enjoys good relations Society of International Gas Tanker a new edition of the ISF Guidelines
with the Asian Shipowners Forum, and Terminal Operators (SIGTTO) and to the ILO MLC is expected to be
whose members are also national the World Shipping Council (WSC). published in the first half of 2012,
shipowners associations. ICS is in order to take account of the
also now developing a relationship Publications various clarifications agreed by
with the Asia Pacific Economic ILO since the MLC was adopted in
Co-operation forum (APEC) which is A large proportion of ICS resources 2006. Incorporating new advice on
becoming increasingly engaged with is devoted to the production of compliance and the adoption of best
maritime transport matters. publications for the benefit of the employment practices, it is hoped
industry. Issued under the banner of that this publication will come to be
ICS works closely with a diverse range Marisec Publications, ICS publishes regarded as a sister publication to the
of other industry organisations that over 30 titles which provide guidance definitive ICS/ISF Guidelines on the
are engaged generally on transport on regulatory developments and Application of the International Safety
issues, including the International industry best practices, especially Management (ISM) Code.
Chamber of Commerce (ICC), the with regard to safety, environmental
International Organization for protection and employment standards. Work is now well advanced on
Standardization (ISO), the Business a new edition of the ICS Tanker
and Industry Advisory Committee to Under the badge of ISF, ICS currently Safety Guide (Chemicals). This is a
the OECD (BIAC), the International has an ambitious programme to major undertaking but publication
Organization of Employers (IOE) and update various publications to reflect is anticipated in 2013. Looking
the World Ocean Council (WOC). the entry into force, in January 2012, forwards, a work group has also
of the 2010 amendments to the IMO been established to begin a review
Last but not least, ICS enjoys Convention on Standards of Training, of the current edition of the ICS
good relations with various Certification and Watchkeeping Tanker Safety Guide (Gas). Work is
specialist industry bodies such as for Seafarers (STCW). In 2011, this also underway on a new edition of
the International Association of included publication of fully updated the ICS Bridge Procedures Guide to
Classification Societies (IACS), the Guidelines to the STCW Convention, take account of developments in
International Group of P&I Clubs (IG), followed by revised on board training e-navigation.
the International Union of Marine books for deck and engine ratings,
Insurance (IUMI), the International which take account of the new STCW Meanwhile, in co-operation with the
Association of Port and Harbors grades of Able Seafarer Deck and Oil Companies International Marine
(IAPH), the International Maritime Engine. Updated on board training Forum (OCIMF) and the Society
Pilots Association (IMPA), the Nautical record books for deck and engine of International Gas Tanker and
Institute (NI), and the Global Shippers officer cadets, that will address the Terminal Operators (SIGTTO) work has
Forum (GSF). This, of course, is in new STCW competence standards, progressed on a new consolidated
addition to close co-operation with are due to be published in the first edition of the Ship to Ship Transfer
other specialist international shipping half of 2012. In co-operation with Guide that will cover petroleum,
associations including BIMCO, the its partner IT Energy, ISF has also chemical and gas operations.
Cruise Lines International Association launched a new edition of its popular Publication is expected during 2012.
(CLIA), Intercargo, Interferry, ISF Watchkeeper computer software,
Intermanager, Intertanko, the Oil which allows seafarers work and
Companies International Marine rest hour records to be maintained
Forum (OCIMF), the International in accordance with IMO and ILO
Marine Contractors Association regulatory requirements, including
Representing the
Global Shipping
Industry

53
54 Organisational Matters truly reflect the considered views of
the entire global shipping industry.
The current ICS membership
comprises national shipowners The Secretariat and staff of ICS is
associations from 36 countries, provided by Maritime International
representing all sectors and trades Secretariat Services Limited (Marisec),
and over 80% of the world merchant which is wholly owned by ICS.
fleet (see inside back page). In Marisec also continues to provide
January 2012, the International services to the International Support
Maritime Employers Committee Vessel Owners Association (ISOA).
(IMEC), which engages in collective
bargaining negotiations with In October 2011, ICS relocated to
seafarers unions, joined ICS as an bright new offices at St Mary Axe in
Associate Member. the City of London. In December, the
new office and meeting facilities were
Peter Hinchliffe continues to serve officially opened by the ICS Chairman
as ICS Secretary General. Since his in the presence of representatives ICS
appointment in September 2010 he from the various international Secretary
has already overseen some significant maritime organisations with whom General,
organisational changes. ICS works most closely. Peter
Hinchliffe
The 2011 Annual General Meeting The 2011 Annual General Meeting
took the important decision to fully of ICS (and the final Annual General
integrate the ICS organisation with Meeting of ISF) was hosted by the
that of the International Shipping German Shipowners Association in
Federation (ISF). For all intents and Hamburg in May. Under the new
purposes ICS and ISF are now the articles of association, the four ICS
same organisation and the articles Vice Chairmen elected for 2011/2012
and rules of ICS have been amended were Captain Dirk Fry (Cyprus), Mr
accordingly. However, ICS will Frank Leonhardt (Germany), Mr
continue to use the separate identity Trygve Seglem (Norway) and Mr
of ISF when representing the industry Gerardo Borremeo (Philippines). An
as an employers organisation, expanded Board of Directors, which
for example at meetings of the meets three times a year, was also
International Labour Organization elected by the ICS AGM, as shown
or when dealing with labour affairs on the opposite page. Mr Spyros M
questions. Polemis (Greece) continued to serve
as Chairman following his re-election
Since June 2011, the Committees of in 2010.
ICS and ISF have been combined into
a single structure, as shown overleaf, Mr Polemis has served as ICS
reporting to a single ICS Board of Chairman for the last six years and
Directors, membership of which has has announced that he does not
been expanded and to which all intend to seek re-election for 2012/13.
Full Members that subscribe to both A successor will be elected at the
trade association and employment ICS Annual General Meeting in May
affairs services are now entitled to be 2012, which will be hosted by the
represented. This will help to ensure Australian Shipowners Association in
that the positions adopted by ICS Port Douglas, Queensland.
 Representing the
Global Shipping
Industry

ICS Board
of Directors
2011-2012
Australia Mr Noel Hart 55
Bahamas Mr Chris Oliver
Belgium Mr Peter Vierstraet
Canada Mr Gerry Carter
Cyprus Captain Dirk Fry
Denmark Mr Carsten Mortensen
Finland Mr Jan Hanses
France Mr. Christian Garin
Germany Mr Frank Leonhardt
Greece Mr Anastasios Papagiannopoulos
Hong Kong Mr. Robert Ho
Ireland Mr John Dolan
Italy Mr Stefano Messina
Japan Mr Hiroshi Hattori
Liberia Mr Mark Martecchini
Mexico Mr Luis Ocejo
ICS Chairman, Spyros M Polemis opens the new offices at St Mary Axe Netherlands Mrs Karin Orsel
Norway Mr Trygve Seglem
Philippines Mr Gerardo Borromeo
Singapore Mr Esben Poulsson
Sweden Mr Lars Hglund
Turkey Mr Tamer Kiran
U
nited Kingdom Mr Michael Parker
United States Mr Charles Parks

ICS Secretariat
 ICS Organisational Structure
Shipping Policy
Committee
Chairman:
Maritime Law Mr John C Lyras Labour Affairs
Committee Greece Committee
Chairman: Chairman:
Mr Viggo Bondi Mr Arthur Bowring
Norway Hong Kong

Insurance Manning & Training

Committee Full Members Committee
Chairman: Chairman:
Mr Matheos Los Associate Members Mr Tjitso Westra
Greece Netherlands

56
Board of Directors
Chemical Carriers Oil Tanker
Panel Panel
Chairman: Chairman:
Mr Joseph Ludwiczak Mr Roger Restaino
Liberia Liberia

Marine
Passenger Ship Committee Bulk Carrier
Panel Chairman: Panel
Captain Trevor Smith
Chairman: Chairman:
Singapore
Mr Tom Strang Mr Dimitrios Fafalios
United Kingdom Greece

Container Gas Carriers

Panel Panel
Chairman:
Chairman:
Mr Mike Downes
To be confirmed
United Kingdom

Offshore Dangerous Goods

Panel Panel
Chairman: Chairman:
Mr David Blencowe Mr John Leach
Denmark United
Kingdom

Construction
& Equipment Radio & Nautical
Sub-Committee
Sub-Committee
Chairman:
Chairman: Captain Paul Jones
Mr Maurizio dAmico Singapore
Italy

Canals Environment
Sub-Committee Sub-Committee
Chairman: Chairman:
Mr Koichi Inoue Ms Teresa Lloyd
Japan Australia
 Members of the International Chamber of Shipping

FULL MEMBERS
AUSTRALIA Australian Shipowners Association
BAHAMAS Bahamas Shipowners Association
BELGIUM Royal Belgian Shipowners Association
BRAZIL Syndarma
BULGARIA Bulgarian Shipowners Association
CANADA Canadian Shipowners Association
CHILE Chilean Shipowners Association
CHINA China Ocean Shipping (Group) Co
CROATIA Mare Nostrum, Croatian Shipowners Association
CYPRUS Cyprus Shipping Chamber
DENMARK Danish Shipowners Association
FINLAND Finnish Shipowners Association
FRANCE Armateurs de France
GERMANY German Shipowners Association
GREECE Union of Greek Shipowners
Hellenic Chamber of Shipping
HONG KONG Hong Kong Shipowners Association
INDIA Indian National Shipowners Association
IRELAND Irish Chamber of Shipping
ISLE OF MAN Isle of Man Shipping Association
ITALY Confederazione Italiana Armatori (Confitarma)
JAPAN Japanese Shipowners Association
KOREA Korea Shipowners Association
KUWAIT Kuwait Oil Tanker Co.
LIBERIA Liberian Shipowners Council
MEXICO Grupo TMM S.A.
NETHERLANDS Royal Association of Netherlands Shipowners
NORWAY Norwegian Shipowners Association
PHILIPPINES Filipino Shipowners Association
SINGAPORE Singapore Shipping Association
SPAIN Asociacin de Navieros Espanoles
SWEDEN Swedish Shipowners Association
Swedish Shipowners Employer Association
SWITZERLAND Swiss Shipowners Association
TURKEY Turkish Chamber of Shipping
UNITED KINGDOM UK Chamber of Shipping
UNITED STATES Chamber of Shipping of America

ASSOCIATE MEMBERS
Abu Dhabi National Tanker Co. (Adnatco)
BW Fleet Management Pte. Ltd
Chamber of Shipping of British Columbia
Cruise Lines International Association (CLIA)
European Dredging Association (EuDA)
Interferry
International Maritime Employers. Committee (IMEC)
Sail Training International
Shipping Australia Ltd
World Shipping Council

Trade Association Only
Employers Organisation Only
Representing the Global Shipping Industry

International Chamber of Shipping

38 St Mary Axe
London EC3A 8BH
Tel +44 20 7090 1460
Fax +44 20 70901484
[email protected]
www.ics-shipping.org