INTERTANKO Madariaga European Foundation Brussels 3 & 4 May 2005 International Association of Independent Tanker Owners Madariaga European Foundation Brussels 3 & 4 May 2005 Compensation and liability - the need for international regulation Kristian R. Fuglesang Ladies and Gentlemen Tanker shipping is vital for the welfare of everyone. Tanker shipping is not without risks, but the industry’s record is generally very good. Despite some well known and regrettable accidents, the amount of pollution caused by tankers has been substantially reduced over the last decade. The industry is committed to quality and maintaining the improvement. Elimination of substandard shipping remains one of our main goals. The loss of the Erika and the Prestige is regretted by everyone. The spills had an immediate effect upon the marine environment, fish, bird, beaches and tourism. Seeing the soiled beaches, it may be difficult to be dispassionate, but that is what we have to be. I would like to: put the accidents in perspective refer to the compensation and liability system that exists refer to developments of these, and conclude that we need international as opposed to regional or national rules

Global primary energy consumption by fuel million tonnes oil equivalents Notes Source: BP

World oil supply 1900-2005 mbd

Crude oil seaborne trade

The world needs tankers

AS AN INDUSTRY WE MAY NOT BE LOVED BUT WE ARE NEEDED                                                            World Oil Consumption 3.6 billion ts Transported by sea 2.2 billion ts 60% transported by sea.

Regular supply critical

Gasoline price at the pump Notes The world has ended up in a squeeze between too high growth in Asia in particular China, and tight supply of commodities. The demand has to be adapted to the supply of commodities and we now see that the supply of oil and other commodities in fact is limited. Tanker built late eighties and early 90s may not have the same technical lifetime as the olds single hull VLCCS

Annual Releases, best estimates Oil into the Sea Annual Releases, best estimates

The world expects us to have 0 accidents. Even though 99.9997% of oil is delivered safely It takes only one accident to change the industry

Tanker incidents: 1978-04 Number Source: LMIS, Informa, press, INTERTANKO

Reported tanker incidents 2004, all sizes/types Source: LMIS, Informa, press, INTERTANKO

Development of tanker oil spills Source: ITOPF. Number of spills above 700 tonnes.

Accidental oil pollution from tankers and tanker trade m ts spilt 1000 bn tm Notes Source: ITOPF, Fearnleys

Large pollution accident since 1990 represents 72% of quantity spilt Notes Source: ITOPF,INTERTANKO

Percentage of inspected ships detained Port State Control Percentage of inspected ships detained Notes

1992 Civil Liability Convention 1992 Fund Convention

Compensation limits 29.04.2005

Main features of CLC/Fund strict liability (i.e. liability regardless of fault) prompt compensation of victims without prolonged litigation owner entitled to limit his liability international system the system works – well tested

Tanker industry fully supports the international oil spill compensation system encourage further ratification assessment of payment balance between shipowners and oil receivers after the 3rd tier has been operational for some years reopening: a Pandora’s box

Bunker spills convention 2001 HNS convention 1996

Need for international standards Slow ratification process increases pressure for unilateral regulation

Threats to US federal law pre-eminence But ALL politics are local INTERTANKO vs. State of Washington (2000) - overturning state laws on manning, design, construction and operation USCG vs. State of Massachusetts (pending) State of California – vetoed on Escort Tugs, etc. (2004) New Jersey (possibly Delaware) threatening to ban single hulls (2005) EPA challenged on Ballast Water discharge exemptions (2005) Local and state air emission legislation (ongoing) State ballast water regulations (ongoing) But ALL politics are local

International vs. local, national and regional Liability – EU Penal Sanctions vs. International Conventions Safety & Environment – EU (Post Erika & Prestige) vs. IMO/Marpol & SOLAS Sulphur Levels / Air Emissions – EU, USA vs. IMO Security – MTSA vs. ISPS Ballast Water Management – US et al vs. IMO Notes

EU Maritime Safety Package III Amendment to Directive on Vessel Traffic Monitoring and Information Liability and Compensation (principally Passengers) Recasting of Legislation on Port State Control Role of Classification Societies Marine Casualty Investigations in the EU Maritime Labour Standards Flag State Initiative But how about earlier programmes – Places of Refuge, Ratification of Conventions, Reception facilities

Should this man have been detained for more than two years without trial ?

Increasing Criminalization Imprisonment of seafarers (Captain Mangouras et al) Detention of Tasman Spirit crew and salvors EU Directive on Criminal Penalties (including accidental damage)

Criminal sanctions for ship-sourced pollution INTERTANKO support the investigation and prosecution of illegal discharges oil from ships. INTERTANKO strongly objects to criminalising accidental oil pollution and to treating seafarers as criminals Any criminal offence of pollution from a ship must be clearly defined and in accordance with international law. Any penalties imposed on someone found guilty of such an offence must be proportionate. There should also be parity with any penalties imposed for pollution from land based sources.

Criminal sanctions for ship-sourced pollution - continued Any suspects must be treated fairly, impartially and in accordance with international law on human rights. INTERTANKO also requests coastal states to comply with their existing treaty law obligations to ensure that adequate, affordable, oil waste reception facilities. Further, in order to safeguard the lives of seafarers and the marine environment, INTERTANKO urges coastal states to ensure proper contingency plans are put in place so that adequate assistance and if necessary a place of refuge can be made available to a ship.

Jean-Serge Rohart, CMI Chairman “Every effort made by a state or group of states or region to move out of our existing framework undermines the process of unification of maritime law and the efforts accomplished in this domain over the last 30 or 40 years”. Jean-Serge Rohart, CMI Chairman He also added: “It is very dangerous. That the European Union should seek to better assure its security is perfectly legitimate but it is desirable that it should do so in co-operation with the whole of the world maritime community, which means principally within the IMO.

Vision for the tanker industry: “ A responsible, sustainable and respected industry able to influence its own destiny.”

Key industry goals - effective regulation Regulatory environment which supports safe shipping operations, environmental protection and adherence to internationally adopted standards and procedures Properly considered international regulation of shipping Global regulation for a global industry, adopted and implemented uniformly

Thank you www.intertanko.com www.shippingfacts.com Europe is more concnered with the effect of shipping rather than being shipping nations. Europe is acting more like ports states than shipping nations