Tag Archives: IMO

Greening the Shipping Industry

ballast water

The shipping industry faces the cost of complying with a deluge of new rules(issued by the International Maritime Organisation (IMO)). To make matters worse, it is in the middle of a slump caused by too many ships chasing too little trade.  As the deadlines for all these rules approach, shipping bosses are firing off distress flares. Masamichi Morooka, chairman of the International Chamber of Shipping (ICS), a lobby group, lamented on March 19th that the cost could run into “hundreds of billions” of dollars. He begged regulators to take into account the dire state of shipping

One of the first big expenses will be for cleaner fuel. Ships used to burn the cheap, unrefined crud, laden with sulphur and other nasties, that is left over when oil is refined. The fine soot that such fuel gives off can cause premature deaths from asthma and heart attacks. So in 2005 the IMO started to limit the sulphur content of maritime fuel, especially in “emission-control areas” along heavily populated coasts in North America and Europe. These limits are set to be tightened drastically,  Such fuels currently cost about 50% more than unrefined “residual” grades…

Shipping firms are also under pressure to cut their emissions of carbon dioxide and other greenhouse gases. The IMO reckons that ships cause about 2.7% of total man-made emissions, a bit more than planes but a lot less than cars and trucks. Under a convention it has brought into force this year, ships will have to introduce fuel-economy measures with the aim of reducing their emissions by 20% by 2020 and 50% by 2050….

The IMO is also pressing on with planned new rules on cleaning up ships’ ballast water. These may come into effect this year, once enough national governments have signed up for them. A study last year in the Journal of Marine Engineering and Technology* reckoned that around 60,000 ships worldwide would need refitting with one or more cleansing units, costing up to $1.7m each. In that case, shipping firms could be whacked with a bill of the order of $50 billion…

New proposals to make shipping greener, and push it further into the red, keep popping up. This week the European Parliament’s environment committee backed proposals for recycling levies on vessels calling at EU ports. This would pay for safer scrapping of old ships, which can contain asbestos and other toxic materials….

At a conference in Athens recently John Platsidakis, a Greek shipping boss who chairs an association of bulk-cargo operators, grumbled: “We carry 90% of world trade and we emit only 2.7% of the CO2 but still we are treated as if we are acting with indifference to the environment.”…[A]irlines, for example, have lobbied more shrewdly than shipping firms. But then again, the shipping industry is bigger and more fragmented than aviation, making it harder for it to present a united front. Many small, family-owned shipping firms have publicity-shy bosses and lack the sophisticated public-relations machines that giant firms deploy….[T]he ICS seeks to represent the entire global merchant-shipping fleet with just 20 people. The industry’s sluggish lobbying has meant that rules get passed before it has a chance to object to them. And once they are passed, it is much harder to get them changed.

The shipping industry: Sinking under a big green wave, Economist, Mar. 30, 2013, at 69

The Price for Shipping Minerals: life

Harita Bauxite IMO 8103664

A dark underbelly exists in Indonesia’s thriving trade with China. Since late 2010 five ships loaded with Indonesian minerals have sunk when bound for China, with huge loss of life. Little has been done to break the deadly trend. Indeed, plenty of interests have an incentive to hush it up. The latest ship to founder is the Harita Bauxite, a bulk carrier which sank on February 17th near the Philippines. Of its 24 crew, who were all or mainly from Myanmar, ten were rescued, one of whom later died. Fourteen were still missing when the search was called off two weeks later.

The vessel is thought to have been carrying nickel ore, a potentially deadly cargo, loaded on Obi island in the remote Indonesian province of Muluku and destined for China’s steel mills. In terms of the global bulk trade, shipments of nickel ore from Indonesia to China are tiny: just 2m-3m tonnes out of more than 4 billion tonnes of bulk goods carried each year on over 9,000 vessels. Yet this backwater trade accounted for four of the 20 bulk freighters lost worldwide during 2010-11, and for 66 of 82 deaths, according to Intercargo, an association of ship owners.

ll four ships were found to have sunk because the cargo had liquefied. Nickel ore is dangerous because if it gets too wet, the fine, claylike particles that are often present in the ore turn the cargo to a liquid gloop that sloshes about the holds with such momentum that even a giant ship can capsize. The four ships had loaded during Indonesia’s rainy season. The ore is typically stockpiled in the open. Quite how the Harita Bauxite foundered is not yet clear, but if liquefaction was a factor, as many in the shipping industry suspect, it will have been another entirely avoidable tragedy.

Preventing liquefaction should be fairly simple. It involves checking the moisture content of susceptible commodities. If they are too wet, a surveyor will deem the cargo unsafe and not to be loaded. Time and again in Indonesia, checks have been inadequate. With the bulk-shipping business in the doldrums, the profitable nickel trade is a siren call for ship owners and charterers. Indonesia’s ministers and mandarins in Jakarta, the capital, refuse to comment on the tragedies and have done little to tighten policing at faraway ports in Sulawesi, Muluku and Papua.

Ship captains report intimidation by miners and agents if they refuse to accept cargo. A leading marine insurer says the ports’ remoteness makes it hard to sample cargoes reliably. Local officials turn a blind eye to unsafe practices. Peter Lundahl Rasmussen at Bimco, a maritime association, says surveyors trying to do their job have been assaulted or arrested.

With insurance claims mounting, shipping bodies and insurers have issued plenty of instructions about how to load nickel ore safely, especially in Indonesia. The International Maritime Organisation (IMO), the UN agency responsible for shipping safety, is also taking steps to tighten the regulations for commodities that can suffer liquefaction.

But the IMO’s process is a glacial one, and the new rules will not clear its various committees and be promulgated until at least 2015. Even then, the organisation relies on its members to enforce regulations. In Indonesia, in other words, the impact of tighter rules may be minimal. Moreover, existing and planned legislation covers ore depots and the ports, but not the transit between the two, where rain may do its dangerous work. Steve Cameron at RTI, a risk consultancy, argues that it would be more effective if mining companies faced charges of corporate manslaughter for not ensuring that their ore reaches ships in good condition.

Shipping: Deadly Trade, Economist, Mar. 23, 2013, at 46.

 

The Wild West of the Oceans; pirates, private security firms and human rights

Private security teams patrol the decks of around 40% of large vessels in the “high-risk area” that stretches from the Persian Gulf to the Seychelles in the south and the Maldives in the east. When pirates attack, these armed guards respond with flares or warning shots. This usually scares off assailants (or sends them in search of easier prey). If it fails, they fire at an attacking boat’s engine, before finally turning their sights on the pirates. No ship carrying armed guards has so far been hijacked.

Most of the companies providing these guards are British, typically started by entrepreneurial former special-forces types. A four-man team can charge $45,000 for safe passage through the high-risk area. The cost to shipowners is partly offset by savings on insurance.

The idea may seem simple but its legal framework is not. Under the United Nations Convention on the Law of the Sea a ship’s crew, including guards, must abide by the home laws of a vessel’s flag state. But these vessels ply international waters, meaning that regulation is scant. An array of standards created since 2009 suggests good practice for private security teams, but none is legally binding.

Spurred on by the International Maritime Organization (which will debate the issue at a meeting next month), governments are now trying to write rules for armed guards at sea, such as how they buy and store the lethal tools of their trade. Britain wants a voluntary set of rules in place by the end of 2012, detailing the acceptable use of deadly force and systems for company auditing and accountability. It may suggest and define a “proportional” response to pirate attacks, along with approved weapon types and standards of training. Other countries are making moves too. American law now allows for the self defence of US-flagged ships within tight rules of engagement. India also allows armed guards; Greece is considering a similar step. The Japanese government is pondering a change to its strict laws, which prohibit civilian armed guards on ships.

The United Arab Emirates will this year start allowing armed international teams into its ports. At present most teams use Sri Lanka, Oman or Djibouti for weapons storage between jobs. They run the risk of prosecution if they carry arms in the territorial waters of Yemen and other states. John Bennett, of the Florida-based Maritime Protective Services says some firms play safe by throwing their guns overboard before heading home.

Pressure for new rules has come in part from human-rights organisations. Unknown numbers of Somali pirates have been killed at sea since 2005 as a result of clashes with naval and private protection forces. In at least one incident, security guards killed Somali fishermen, mistaking them for pirates. Such incidents evoke bad memories. The last thing that anyone wants, says Steven Jones, director of the Security Association for the Maritime Industry (SAMI), is a “Blackwater of the sea” (Blackwater, now renamed Academi, is a private security firm which was sued in Iraq after the shooting of 17 civilians. It denies any wrongdoing.)

The new British rules may help to shape those adopted by other countries in future. They emphasise transparency, with the aim of differentiating respectable companies from domestic or international “mavericks”. But complying with them will be voluntary and is likely to involve extra costs. Firms may simply move to territories with less demanding regimes. That could create two tiers in the security industry: one that is respectable and regulated, and one that lives by improvisation, not by the law. A bit like the pirates.

Piracy and private security:Laws and guns, Economist, Apr. 14,2012, at 69

The Costs of Fighting Oil Pollution, the offshore oil exploration and exploitation industry

The Caribbean region including Jamaica and other Small Island Developing States lacks the resources to combat a major oil spill, delegates to a regional convention on oil spill prevention and response have been warned.  Opening the convention to discuss oil spill prevention, preparedness and response in the Gulf of Mexico, keynote speaker Christopher Cargill, Chairman of the Petroleum Corporation of Jamaica, said Jamaica and other islands in the region do not have access to vast amounts of resources to combat major oil spills of the magnitude of the BP Deepwater Horizon incident – which occurred two years ago this month in the Gulf of Mexico.

He told delegates: “We understand that the BP Deepwater Horizon incident involved 47,000 persons, 600 vessels and 120 aircraft and the responders had access to a Spill Liability Trust Fund.  The development of a mechanism for cooperation is therefore a critical part of the preparedness in the region as Jamaica and other small states will have to rely heavily on their neighbours to the north for assistance in dealing with such events. “  The objective of last week’s convention, held in Kingston, Jamaica from April 11-13th, was to further regional preparedness and cooperation to oversee the offshore oil exploration and exploitation industry and to improve oil spill response preparedness and capabilities.

This was third such forum and aimed to complete a Caribbean Multinational Authorities Matrix to aid regional plans towards the offshore oil exploration industry. The previous discussions looked at the legal and policy frame work for drilling operations and issues related to preparedness and response to pollution incidents arising from oil and gas exploration and exploitation.  According to Bertrand Smith, Director of Legal Affairs at the Maritime Authority of Jamaica (MAJ): “This meeting was important to Jamaica as we ratified the IMO Oil Pollution and Response Convention (OPRC) two years ago and are currently incorporating its provisions into national legislation to deal with discharges from oil and gas platforms, among other things.”  The convention was sponsored by the Maritime Authority of Jamaica and the Petroleum Corporation of Jamaica under the auspices of the International Maritime Organization (IMO), United Nations Environment Programme (UNEP) and the Regional Activity Centre/Regional Marine Pollution Emergency Information and Training Centre (RAC/REMPEITC).

Excerpt, Caribbean Lacks Resources to Combat Oil Spills Warns Jamaica, the Maritime Executive,  April 16, 2012