Maritime Trades Department Executive Board Meeting March 8-9, 2012 TANKER INDUSTRY OVERVIEW JOSEPH ANGELO MANAGING DIRECTOR

INTERTANKO WORKPLAN PRIORITIES TANKER MARKET TANKER INCIDENTS CURRENT MAJOR ISSUES

INTERTANKO INTERNATIONAL ASSOCIATION OF INDEPENDENT TANKER OWNERS Non-profit organization Established in 1970 Voice of the independent tanker owners

MEMBERSHIP MEMBERSHIP is open to independent tanker owners and operators of oil and chemical tankers (i.e. non-oil companies and non-state controlled tanker owners) who meet the membership criteria. ASSOCIATE MEMBERSHIP is available to any entity with an interest in the shipping of oil and chemicals.

INTERTANKO MISSION Provide Leadership to the Tanker Industry in serving the World with the SAFE, ENVIRONMENTALLY SOUND AND EFFICIENT seaborne transportation of oil, gas and chemical products

INTERTANKO PRIMARY GOAL Lead the CONTINUOUS IMPROVEMENT of the Tanker Industry’s Performance in striving to achieve the Goals of: Zero Fatalities Zero Pollution Zero Detentions

MORE THAN 75% OF THE INDEPENDENT TANKER FLEET MEMBERSHIP 230+ Members 3,200+ Tankers 280+ Million DWT Members in 40+ countries MORE THAN 75% OF THE INDEPENDENT TANKER FLEET 330+ Associate Members

SECRETARIAT - Managing Director 21 STAFF MEMBERS IN 4+ OFFICES Oslo (8), London (11), Singapore (1) USA (1) + Brussels STAFF INCLUDES - Managing Director - Deputy Managing Director - Technical Director - Director, Regulatory Affairs - Marine Director - General Counsel

WORKPLAN PRIORITIES CORE PURPOSES Safety/Technical Seafarers Environment Marine Operations Regulatory/Legal Tanker Information

SEAFARERS Criminalization Crew competence Shore access Fair treatment of seafarers Crew visas Seafarer Id documents Accommodation spaces Cadet berthing Fatigue ILO/MLC 2006

TANKER MARKET Deep concern that the current tanker market rates are consistently below ship owners’ operating costs. INTERTANKO’s Chairman, Capt Graham Westgarth “If these rate levels continue for a long period, this could lead to a situation where sustainability of the oil transportation industry is threatened.” “Our Members operate tankers to the highest standards and will continue to do so. Operating for a prolonged period in an environment where tanker owners are not even covering their operating costs is obviously not a situation that can be maintained.”

TANKER MARKET $/day

TANKER SUPPLY m dwt number

TANKER SUPPLY m dwt Under above assumptions, 6% growth is necessary to regain same market balance in 2014 as in 2008

Tanker Incidents and accidental pollution Includes all tankers types and sizes

MAJOR ISSUES High level discussions with OCIMF Piracy* Greenhouse gas emissions Ballast water management Sustainability of the Tanker industry Tanker Safety/Performance

PIRACY - Somalia - 237 attempted incidents 2010 Statistics (IMB) - 49 hijackings (21% of incidents) 2011 Statistics (IMB) - 237 attempted incidents - 28 hijackings (11% of incidents) 2012 Statistics (IMB) (As of Feb 29) - 26 attempted incidents - 4 hijackings (15% of incidents)

PIRACY INTERTANKO FOCUS Actions members can take to protect themselves Actions we want governments to take to protect our members

FOCUS AREAS - INDUSTRY Best Management Practices (BMP) Citadels Armed guards

BMP4 Three essential requirements that cannot be over emphasized: Register with MSCHOA Report to UKMTO Implement Self Protection Measures

CITADELS Industry developed guidance on citadels Describes the construction and use of a Citadel in order to provide effective protection against determined intrusion Guidance does not recommend or endorse the use of a Citadel; aim to present the relevant facts to enable the Ship Owner/Operator to reach a reasoned conclusion as to whether or not to utilise a Citadel Guidance has been approved by NATO, EUNAFOR and CMF and is available on their web sites

ARMED GUARDS INTERTANKO position regarding the use of armed guards INTERTANKO believes it is the responsibility of the international navies to ensure the right of free passage on the high seas including the use of vessel protection detachments on merchant ships INTERTANKO does not advocate the arming ships' crews INTERTANKO believes that the use of private armed guards or private security forces onboard merchant ships has to be a matter for each individual owner or manager to assess as part of their own voyage risk assessment

ARMED GUARDS IMO Maritime Safety Committee MSC.1/Circ.1405 – Interim Guidance to Shipowners, Ship Operators and Ship Masters on the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area MSC.1/Circ.1406 – Interim Recommendations for Flag States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area MSC.1/Circ.1408 – Interim Recommendations for Port and Coastal States regarding the use of Privately Contracted Armed Security Personnel on Board Ships in the High Risk Area

FOCUS AREAS - GOVTS Increased "Government Will" to eradicate piracy off Somalia Cease the use of mother ships Increased prosecution of convicted pirates Increased naval assets in the region Increased public awareness to drive the desired increase in "Government Will“ Action to address the root cause of piracy ashore in Somalia

SOS CAMPAIGN SaveOurSeafarers (SOS) campaign initiated by INTERTANKO. Joined by BIMCO, ICS, ITF and INTERCARGO Contracted with PR firm to increase public, business and government awareness Phase One – - Ad in Financial Times and World Street Journal - www.SaveOurSeafarers.com web site - Letters to UN SG, Heads of State and EU President - Interviews with press and news media - Press releases after incidents

SOS CAMPAIGN Phase Two – - Social media (Blog, Twitter, Facebook, etc) - Actively engage policy makers - Further ads, press releases and interviews - Seek high profile name to assist in cause Wider industry involvement, now includes support from 30 maritime associations/organizations Steering committee established to brainstorm ideas, prioritize work items and manage budget Phase Three - More focus on high level politicians

THANK YOU!! WWW.INTERTANKO.COM