FFSA Insurance and Legal Committee The Tanker Industry Today “Key Issues” 12 February 2008 Peter M Swift

Key issues for tanker operators - not unique to this sector Maintaining an international framework of consistent, high standards Ensuring availability of good people and quality ships Delivering best environmental performance

Tanker Industry is, however, accustomed to being under the spotlight Watched by: Regulators Politicians Public Licences to trade rigorously applied by: Flag states Classification Societies Insurers Charterers Monitored by: Coastal and Port states Good ships / good people

Upholding International Regulation and customary international law Supporting IMO with active participation Encouraging ratification of IMO (and ILO) Conventions Engaged in “processes” in US (Washington), Europe (Brussels) and elsewhere Prepared to challenge conflicts and contradictions through the courts

Examples of actions by Tanker industry to ensure consistency in International Standards Full support for IMO Member State Audit scheme plus transparency in findings Championed the development of Common Structural Rules for Tankers Established with others a regular Tripartite dialogue between international shipbuilders, classification societies and ship Led the campaign for greater harmonisation and uniformity in procedures across Port State Control regimes Advocacy of - self regulation based on industry best practices, - support “effective”, fit for purpose, legislation - continuous improvement

INTERTANKO’S Poseidon Challenge - encourages all parties to commit to: - continuous improvement - working with all partners Good ships / good people

The HUMAN ELEMENT Guiding principle: Human Resources are respected as an asset, not treated as a cost !

Tanker Industry initiatives supporting recruitment, training and retention Raising awareness of the industry, targeting young people as well as media, politicians, regulators and the public ( Enhanced cooperation with educators/trainers Policies for cadet berths and training facilities on ALL new ships Programmes for maximum utilisation of cadet berths on existing ships Developing industry standards for Tanker Officer Training, covering proficiency and experience Running seminars and workshops for officers and seafarers on Tanker Industry issues (e.g. vetting seminar in Manila)

Industry initiatives supporting our crew’s welfare and well-being Speaking out against unjustified criminalisation, and challenging bad laws through the courts Actively supporting IMO-ILO guidelines on Fair Treatment of Seafarers (in event of Maritime Accident) Campaigning for improved conditions for shore access when security constraints active Working to reduce multiple and overlapping inspections Promoting solutions to lessen technical and operational burden of equipment, systems and associated paperwork Prepared guidelines for safe handling of cargoes and fuels, tank cleaning and entry, and lobbying for better HSE information on cargoes and bunkers Developed guidelines on implementing ILO Convention on “work and rest hours” Promoting higher standards of accommodation as industry “norms”; (including e.g. broadband, etc.)

TOTS - Tanker Officer Training Standards (new INTERTANKO initiative) Covers officer competences and training, as well as time in rank and time with company An alternative approach to oil companies’ “Officer Matrix” requirements, based upon “Time in Rank” and “Years with the Operator” Incorporates training modules onboard and ashore, as well as verification processes TMSA compatible Addresses “Quality and Experience”

Tanker Industry action on key environmental challenges Established international Forum to address inadequacies of reception facilities Developed interim policy on Responsible Recycling ahead of proposed Convention Implemented Antifouling Convention ahead of formal entry into force Trialled procedures to develop solutions to meet new Ballast Water Management requirements; also now addressing biofouling issues Developed procedures to limit Volatile Organic Compound (VOC) emissions from cargo tanks Produced guidelines on minimisation of ship generated waste Proposed solutions to reduce globally harmful exhaust gas emissions (atmospheric pollution) for existing and new ships Actively engaged in developing measures to reduce Green House Gas emissions (principally CO 2 ) from today’s and tomorrow’s ships

Air Pollution Revision of MARPOL Annex VI Adopted September 1997 Entered in to Force May 2005 (US, Canada and others not yet parties) Revision initiated at MEPC July 2005 SECAs from May 2006 Target date for adoption of Revision 2008 Applies to ca. 60,000 ships (today)

The Regional Patchwork of Regulation California has introduced state regulations US considers ratification of Annex VI Draft bill introduced in to US Senate for US waters plus Canada mulls own requirements Norway has introduced NOx Tax; Japan considering similar measure SECA proposals under discussion for US coasts, Mediterranean, … EU bides times on revision of Sulphur Directive EU other Ports under pressure to act unilaterally May 2006 IMO: Nov 2007 EU: Aug 2007

INTERNATIONAL CONVENTIONS WHO GOVERNS SHIPPING ? COMMUNITY INTERESTS - LOCAL LAWS / REGULATIONS REGIONAL REGULATIONS INTERNATIONAL SHIPPING

INTERNATIONAL CONVENTIONS MARPOL Annex VI Who governs Shipping ? - Environmental pressures COMMUNITY INTERESTS - -LOCAL LAWS / REGULATIONS California, West Coast/Canadian Ports, Rotterdam, Antwerp, Helsinborg, Other REGIONAL REGULATIONS EU / USA (EPA) INTERNATIONAL SHIPPING

Atmospheric Pollution from Ships CHOICES TO BE MADE ! Application(s) 1.Globally 2.Regionally/locally Solution(s) 1.Cleaner fuels (globally) - LSFO or Distillate (Simple and effective, easy to monitor) 2.Existing HFO bunkers with abatement technologies (Complex, not yet proven systems) 3.Combinations with multiple fuels (Complex; requires ship and engine modifications) 4.Adopt trading systems (currently rejected) And all at some cost to owners, and all requiring time to phase-in

Initiatives on reducing Green House Gases Joint industry programmes examining options for: (i) existing ships, (ii) new ships Evaluating “economic” options: levies; incentive schemes; emissions trading Tankers today more efficient than ever before: one litre of fuel on a modern VLCC (Very Large Crude Carrier) moves one tonne of cargo more than 2,500 kilometres - more than twice as far as 20 years ago

Exhaust Gas Scrubber Development Sources: Krystallon Ltd., Wärtsilä Corporation