Leading the way; making a difference North American Panel October 22, 2013 INTERTANKO OVERVIEW JOSEPH ANGELO DEPUTY MANAGING DIRECTOR

Leading the way; making a difference MEMBERSHIP BUDGET SECRETARIAT CURRENT MAJOR ISSUES OCIMF SIRE WG/INTERTANKO VC ANNUAL TANKER EVENT

Leading the way; making a difference MEMBERSHIP 220+ Members 3,000+ Tankers 270+ Million DWT Members in 40+ countries 300+ Associate Members

Leading the way; making a difference INTERTANKO Membership

Leading the way; making a difference (Actual) (Actual)(Budget) Total Operating Income (US$)7,753,228 6,886,3637,267,490 Total Operating Expenses (US$)6,886,5936,021,9657,241,710 Operating Result 866, ,398 25,780 Non-operating Income/expenses 88, , ,000 Result for Year 954,9381,185, BUDGET

Leading the way; making a difference 20 STAFF MEMBERS IN 4+ OFFICES Oslo (8), London (10), Singapore (1), USA (1) + Brussels STAFF INCLUDES - Managing Director - Deputy Managing Director & Director of Regulatory Affairs - Technical Director (+ Technical Manager in London) - Marine Director (new) - General Counsel SECRETARIAT

Leading the way; making a difference CURRENT MAJOR ISSUES Sustainability Five-Year Strategic Plan Ballast water management Piracy Greenhouse gas emissions

Leading the way; making a difference May 2012 – INTERTANKO Council agreed to: 1. Development of an optimal speed model to show the relationship between the time charter equivalent earnings and CO 2 emissions, based on a known freight rate for a specific route and different tanker speeds SUSTAINABILITY

Leading the way; making a difference TC equivalent and emission at various speeds $/day Tonnes CO2 emisson

Leading the way; making a difference 2. Expand scope of the INTERTANKO WorldScale Committee to include commercial issues that have an impact on tanker operations, including: proper promotion of speed optimization rising fuel costs broker’s fees certain charter party clauses regarding purging and cargo heating; and possible decoupling the fuel costs from the commercial transactions SUSTAINABILITY

Leading the way; making a difference Nov 2012 – COUNCIL agreed that INTERTANKO should develop an action plan to raise the profile of sustainability to the top level of the oil companies Feb 2013 – EXCOM agreed that there is a need for an INTERTANKO sustainability campaign. 1. Initial focus should be on practical issues that might be changed in the short term 2. Next steps to develop key messages and to identify key focus areas for campaign 3. Submit to May 2013 Council meeting for approval SUSTAINABILITY

Leading the way; making a difference May 2013 – INTERTANKO COUNCIL agreed that INTERTANKO should: 1. Develop a voluntary Code of Conduct on Tanker Chartering – a best practice guide - Payment of freight and demurrage - Vetting procedures - Trading ethics 2. Send letter from Chairman to charterers 3. Establish late payment database 4. Work on Vetting inspection costs 5. Expand message to wider audience SUSTAINABILITY

Leading the way; making a difference Sept 2013 – INTERTANKO Executive Committee 1. 1.Adjustments to Worldscale should be taken back to the Council in November with a proposal for alternatives that might readdress some of the terms and rebalance risk in the short and longer term There is also a separate debate to be had around Vetting costs and this should be taken to the Council. - Cost and availability of inspectors - Minimizing the number of vetting inspections - The proper use of SIRE - Transparency - which needs to be defined - Review of TMSA SUSTAINABILITY

Leading the way; making a difference Major Issues Sustainability Human Element Tanker safety and performance Greenhouse Gas Emission reduction Air emissions reduction Ballast water management Maritime security threats Chemical tanker operations Five-Year Strategic Plan

Leading the way; making a difference PIRACY - Somalia 2011 Statistics (IMB) attempted incidents - 28 hijackings 2012 Statistics - 75 attempted incidents - 14 hijackings - 7 commercial ships, 5 dhows, 2 fishing 2013 Statistics (thru August 31) - 10 attempted incidents - 2 hijacking ( 2 dhows)

Leading the way; making a difference Significant reduction of piracy incidents off Somalia Better industry compliance with BMP4 Enhanced military strategy and tactics Enhanced use of armed guards

Leading the way; making a difference BEST MANAGEMENT PRACTICES (BMP) Three essential requirements that cannot be over emphasized: Register with MSCHOA Report to UKMTO Implement Self Protection Measures

Leading the way; making a difference 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

Leading the way; making a difference 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 IMO

Leading the way; making a difference IMO Maritime Safety Committee MSC.1/Circ.1443 – Interim guidance to private maritime security companies providing privately contracted armed security personnel on board ships in the High Risk Area MSC.1/Circ.1444 – Interim guidance for flag States on measures to prevent and mitigate Somalia-based piracy (compilation, in a single reference document, the best practices, codes and standards developed by IMO to date) IMO

Leading the way; making a difference IMO MSC requests International Standards Organization (ISO) to develop standard for guidelines and the certification of private maritime security companies providing PCASP Standard to be based upon MSC.1/Circ.1443 – Interim guidance to private maritime security companies ISO Specification published Dec 20, 2012 Independent third party certification of PCASP under way in various countries ISO

Leading the way; making a difference GUARDCON Contract for the employment of security guards on vessels Developed by BIMCO to provide clearly worded and comprehensive standard contract to conclude agreements with security services Reviewed by INTERTANKO Documentary Committee and endorsed for use by members

Leading the way; making a difference Rules on Use of Force (RUF) BIMCO Guidance on Rules for the Use of Force (RUF) by Privately Contracted Armed Security Personnel (PCASP) adopted after significant consultation with broad industry, insurance and legal sectors supplements GUARDCON 100 Series Rules - An International Benchmark for Commercial Maritime Rules for the Use of Force (RUF) development of ISO standard underway intended to supplement ISO 28007

Leading the way; making a difference West Coast of Africa First six months of 2013 (IMB) - 31 incidents - 4 hijackings - 56 hostages taken Initially, the model is for tankers to be taken, barges filled with cargo, then ships released New name – Extended Duration Robbery (EDR) These pirates are much more violent in pursuing their objective Most recent hijacking (5 th ) off the coast of Gabon while waiting to berth at Port Gentil

Leading the way; making a difference West Coast of Africa INTERTANKO action: Drafted guidance for Members specific to the piracy problem in West Africa Interim guidance issued by RT in Dec 2012 RT letter to IMO Secretary General requesting matter be brought to the attention of the UN Security Council with a request for assistance to local constabulary activity in the area (Feb 2013) Prompted by INTERTANKO intervention as IMO Maritime Safety Committee (June 2013), SG agrees to write to UN SG on the matter

Leading the way; making a difference West Coast of Africa In addition, UK Foreign Office and OCIMF working together on launching a co-ordination center in the region (similar to UKMTO) More recently, African Winds launched on October 4 by Nigeria – 14 day training program for 221 troops from Nigeria, Morocco, Senegal, Ghana, Togo, Benin, and Cameroon by special forces from US, UK, the Netherlands and Spain

Leading the way; making a difference EEDI & SEEMP mandatory since 1 Jan 2013 Market Based Measures – No progress New Initiative – Operational efficiency or Monitoring, Reporting & Verification (MRV) USA – submission at MEPC 64 (Oct. 2012) EU – Stakeholders Meeting on (Dec 2012) Some countries working jointly to develop new approach – USA and EU part of the group GREENHOUSE GAS EMISSIONS

Leading the way; making a difference OPERATIONAL EFFICIENCY (US) – Three phases 1. 1.Data collection to determine the baseline 2. 2.Trial period to establish practical rating system 3. 3.Required operational efficiency scheme EUROPEAN COMMISSION APPROACH 1. 1.Develop details of “monitoring, reporting and verification (MRV) system” 2. 2.Finalize obligatory measuring, reporting and verifying of maritime CO2 emissions after 2013 NOTE : MRV system is essentially the same as Phase 1 and part of Phase 2 of Operational Efficiency

Leading the way; making a difference INTERTANKO Council agreed (May 3013) Support the MRV concept in principle Continue assessments on the best possible model Ship’s efficiency is the best method of measuring performance improvement with fuel consumption being the critical parameter Collect data from Members on annual fuel consumption of their tankers Collect additional data which would assist in determining the best INTERTANKO definition of ship’s efficiency when assessing the various proposals (i.e. time and distance in laden and ballast voyages, cargo amount, etc.

Leading the way; making a difference OCIMF Sire WG/INTERTANKO Vetting VC Initiated by INTERTANKO VC Chairman Initial focus was “the decline in the use of the SIRE system by OCIMF members” Meetings in Nov 2012 and Jan 2013 Issued discussed included: - - Increased sharing of ship inspection statistical data - Improved feedback systems on ship inspections and inspectors - - Development of best practice guidance on important areas of marine risk assurance - Development of matters related to crew competency TANKER VETTING

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Leading the way; making a difference 2014 ANNUAL TANKER EVENT Venue – New York City Dates – May 5 - 9, 2014 Events:Executive Committee Meeting Council Dinner and Meeting Annual General Meeting Gala Dinner Tanker Seminar Workshop

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