ICS Board Meets in London, UK

The Board of Directors of the International Chamber of Shipping (ICS), whose member national shipowners’ associations represent all sectors and trades and over 80% of the world merchant fleet, met in London on 6 February.

Piracy

ICS members reviewed the continuing threat to shipping from Somali pirates in the Indian Ocean. Noting that the capability of Somali pirates is actually higher than it has ever been, ICS believes that effective compliance with Best Management Practices by shipping, and sustained military intervention with a more aggressive stance, has reduced the pirates’ rate of success. However, the current situation remains totally unacceptable, with about 200 seafarers still being held hostage in the most appalling conditions, with thousands more still having to transit the danger area in constant fear of their lives.

ICS national associations agreed to work to ensure that the problem of piracy retains sufficient political and public attention so that the crisis might be properly and decisively addressed during the year ahead.

ICS Chairman, Spyros M Polemis explained:

“Recent press reports might give the impression that the level of piracy off Somalia is decreasing. However, most ship operators will be aware that this is not an accurate representation of the current situation. The ICS Board has therefore identified three specific immediate objectives:

We need to persuade governments to task the military to take the attack direct to the pirates, while at the same time continuing to defend merchant ships in the best way possible. Second, every apprehended pirate should be arrested, taken to a court of law and, if found guilty, imprisoned. Thirdly, governments must break the financial chain through legal action against criminal financiers investing in piracy wherever in the world they are identified.”

ICS welcomed the international conference on Somalia that will be hosted by the United Kingdom on 23 February, and agreed that its member national shipowners’ associations will lobby their governments hard, in advance of the international conference, with respect to the three key objectives identified by ICS.

Reducing CO2 Emissions

The ICS Board reviewed the industry’s position with respect to progress being made at IMO on further measures to reduce CO2 emissions from international shipping, including refinements to the Energy Efficiency Design Index (EEDI) – which was adopted as part of the ground breaking international agreement reached at IMO in July 2011 and which will apply to new ships from 2013 – and discussions at IMO about possible Market Based Measures (MBMs). ICS also reviewed the operational and technical measures now being taken by existing ships, in support of the industry’s target of improving efficiency per tonne/km by 20% by 2020.

With respect to the EEDI, ICS confirmed its complete opposition to the application of the EEDI to existing ships.

“This is not what the EEDI was developed for, and the goals set for the design of new ships, and the complex formulae developed for them, are completely inappropriate for the existing fleet.” said Mr Polemis “ICS will be making the industry’s considered view on this clear at the next meeting of the IMO MEPC.”

ICS also confirmed its strong opposition to a proposal from the Bahamas to IMO whereby governments would specify limits on the CO2 emissions of individual ships (as determined by fuel consumption) and which would subsequently be reduced over time.

“If a ship’s CO2 allowance was exceeded during the time period specified, it would have to go off-hire and a second ship chartered as replacement. The problem is compounded by the reality that the fuel consumption of two identical ships can vary dramatically according to trading patterns and other variables such as weather. ICS members confirmed that such an approach was very worrying and should be firmly opposed.” said Mr Polemis.

The Bahamas’ proposal has been made with the apparent intention of being an alternative to other Market Based Measures that have been proposed at IMO. ICS is concerned that some might see this as being a superficially attractive means of stopping the adoption of an MBM.

Mr Polemis remarked “As well as being highly damaging to large parts of the industry, the Bahamas’ proposal would alter the level playing field and distort competition.”

The ICS Board also discussed the outcome of the UN Climate Change Conference in Durban, which has agreed to establish a Green Climate Fund for developing countries, seeking $100 billion a year by 2020, and proposals by the World Bank that shipping might be expected to contribute a quarter of this money.

Mr Polemis remarked “The ICS Board agreed that many governments seemed more interested in how much money can be raised from shipping, rather than the progress we are already making in reducing our emissions through technical and operational measures. We have said it before, and we will say it again, shipping is not a cash cow and should never be seen as one. Any such notion will severely damage shipping’s competitiveness and thus adversely affect the consumer greatly.”

Mr Polemis added “It is internationally accepted that IMO is the appropriate forum for discussion about further CO2 reduction measures by shipping, and it is counter-productive and will crucially affect the level playing field if the EU was to adopt a regional Emissions Trading Scheme for shipping. The focus must be on collective discussions about a global approach.”

Costa Concordia

The ICS Board discussed the Costa Concordia tragedy and agreed that the disaster would certainly influence the regulatory agenda of IMO, and that the industry would contribute constructively to the discussions. ICS would welcome the earliest possible publication of the Italian accident investigations.

ICS acknowledges that the safety performance of the industry will be under review, but it is still far too early to know what the detailed outcome of the accident investigation will be and it is therefore not appropriate for ICS to provide any definitive comment on the incident. ICS reiterates that safety of life at sea is always the industry’s highest priority, and ICS will contribute fully and constructively in the discussions at IMO, or in other regulatory bodies, that take place in response to this major casualty.

Cargo liquefaction

The ICS Board expressed serious concern about the recent loss of several ships carrying nickel ore/iron ore fines loaded in India, the Philippines and Indonesia, apparently due to cargo liquefaction causing cargo to shift dramatically. ICS members were especially disturbed by the recent tragic loss of 22 crew on the Vinalines Queens after loading a nickel ore cargo in Indonesia.

ICS acknowledges that the issues are complex, but the root of the problem would seem to be the refusal of some shippers to allow the appointment of independent surveyors to conduct cargo testing in accordance with IMO requirements – plus the commercial pressure placed on masters to accept potentially unsafe cargoes at what are often remote locations.

The ICS Board agreed that the prevention of similar incidents was of the utmost priority and that in co-operation with IMO, insurers, and the governments of those nations where problems seem to exist, ICS would endeavour to help find a solution that would assist shipowners and shipmasters to resist any pressure to accept unsafe cargoes.