INTERTANKO HELLENIC FORUM Report on U.S. Issues and Activities Jonathan Benner Troutman Sanders, LLP Washington, D.C. Athens, 08 October 2002

Operational Advantage In A Difficult Environment

ISSUES SECURITY –Vessel and crew access –Cost of security programmes –Pollution impacts of world events Insurance –New Coast Guard Role REGULATORY –Air emissions from diesel engines –Ballast water control and management –Only Water Separators –Tank Pressure/Level Monitoring Devices – Salvage capabilities

POST - 11 SEPTEMBER CONCERNS Port Security –Coast Guard Role –Department of Homeland Security –Impact on Safety Mission –Advance Notice Reporting –Inspections and Escorts

WHAT’S SO SENSTIVE ABOUT PORTS? 2001: 5,400 Ships Make 60,000 Port Calls 6,000,000 Containers Annually, Limited Direct Inspection 95 Per Cent Foreign Trade Is Maritime Ports Tend to be in or Near Najor Metropolitan Centers

WHAT IS U.S. DOING? Detailed Vulnerability Assessments of 55 U.S. Ports IMO Initiatives by Coast Guard

PROBLEMS Divided Authority –USG controls navigable waters –States, localities control terminals and inland Florida, others?

U.S. TREATMENT OF VESSEL PERSONNEL Who’s in Charge? –Immigration and Naturalization Service –U. S. Consular Service, Department of State –Coast Guard –U.S. Customs Service

U.S. TREATMENT OF VESSEL PERSONNEL (continued) Is There A Policy? –Intertanko receives variety of reports –Variations from port-to-port Visa holders Persons without visas –Common threads Crew list visas disfavored Individual visas required Certain nations disfavored Little discretion at local level

U.S. WATCH LISTS Approximately 30 Nations on List –Even visa-ed personnel may encounter difficulties if from these nations –List is Classified, includes: Pakistan Indonesia Malaysia Nations of reported al-Quaeda presence –Evidence suggests additional “problem” nationalities

U.S. WATCH LISTS (continued) –Evidence Suggests Additional “Problem” Nationalities Ukraine? Burma? Philippines? Turkey Russia?

INTERTANKO OBJECTIVES Uniformity and Predictability Awareness by U.S. authorities Internal Coordination among U.S. Authorities of Industry Requirements Workable, Practical Visa Process –Application process, duration, cost, must reflect realities of seafarers’ lives. Quality of Life Aboard Vessel Maintenance of Ability of Owners to Put Qualified Personnel Aboard Ships

INTERTANKO OBJECTIVES (continued) Quick and Measurable Reduction of Number of Negative Incidents Aboard Vessels. Open Communication with Authorities

ACTIONS TO DATE Technical Meetings with Coast Guard, INS, Consular Service Top-level Meeting at INS on 3 October (joint meeting with WSC)

PROGNOSIS No “Thunderclap” Solution Fairly Rigid Measures for Foreseeable Future Decline in Incidents as USG and Owners Adjust to New Realities

OTHER SECURITY ISSUES AIS Requirements –Installation on vessels delivered after 1 January 2003, all ships delivered after 31 December 2004 Vessel Security Plans –Quaere: relation to ISM, OPA 90 Customs Requirements Terminal Practices –Restrictions on Crew Access

KEEP IN MIND U.S. Has Suffered Serious Attack Credentialing of Seafarers is Primitive Many Documented Cases of Ship- Jumping Improved Credentialing Will Have Side Benefits for Top Companies Crew Costs Likely Affected U.S. Ultimately Must Find Methods That It can Accept if Applied Against It.

LEGISLATION Port Security Legislation –Funding is difficult issue Homeland Security Legislation Terrorist/Insurance Legislation Appropriations Bills Stalled

LEGISLATION (continued) Congress stalled internally –Close margins between parties –Partisan disagreement between President and Congress –November Elections Possibility of “Lame Duck” Session

LEGISLATION (continued) Environmental Terrorism –OPA’s “Responsible Party” Faces Serious Problems in case of Terrorist Attack Coverage Who pays Liability Limits Intertanko and Industry Seek Terrorist Exclusion and Access to Pollution Funds

REGULATORY ISSUES

AIR EMISSIONS Intertanko Participates in Proposed Rule U.S. to Adopt Annex VI MARPOL EPA Appears to Have Ambitions Re Non- U.S. Vessels Enviros Controlling Through Court Case

BALLAST WATER Awaiting Coast Guard Final Rules Legislation Pending Technology Trials State/Local Governments Are Problem

TANK LEVEL MONITORING DEVICES Devices Required by Section 4110 OPA –Sensitive to loss of one per cent cargo –Installed single hull tank vessels by 17 October 2007 Coast Guard Issues Final Rule Intertanko Evaluating Options, Assessing Impacts

OILY WATER SEPARATORS Strict Inspection in U.S. Criminal Penalties Record Keeping Critical ISTEC Action Item

SALVAGE/FIREFIGHTING Coast Guard Proposed Rule Requires Contractual Arrangements With Salvors, Firefighters Shipowner Must Ensure Qualifications of Contractor Intertanko Opposes CG Proposes to Build Industry on Back of Tanker Sector

RECAP Security Issues Have Created, and Will Continue to Create, Problems for Owners Legislative Picture Unclear –Department of Homeland Security (where is Coast Guard) –Port Security Act Coast Guard Rules Have Large Potential for Economies of Ship Operations