An Executive Development Program World Maritime University Malmo INTERTANKO The Tanker Owners Perspective Port State Control 19 th October Capt Howard Snaith Director, Marine, Ports Terminal Environmental & Chemical Section

Anti-Trust/Competition Law Compliance Statement INTERTANKO’s policy is to be firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKO’s and its members’ activities in these markets. These laws include the anti-trust/competition laws which the United States, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. INTERTANKO’s activities will be conducted in compliance with its Anti- trust/Competition Law Guidelines.

Summary of Today's Lecture 13:45 – 15:15 1. Introduction to INTERTANKO 2. Impact of PSC on the Tanker Industry Common Goals “Good Practice” 15:15-15:30 Coffee Break 15:30 – 17:00 3. Optimal & Effective PSC How to Improve PSC performance Effectiveness of PSC Conclusions

International Association of Independent Tanker Owners A non-governmental organization established in 1970 to speak authoritatively and proactively on behalf of tanker operators at international, regional, national and local level Representing oil and chemical tanker owners 260 Members 40+ countries 2,650+ tankers 220 million dwt 75% of independent tanker fleet 81% of chemical tanker fleet 300 Associate Members 1. 1.INTERTANKO

MISSION “Provide leadership to the Tanker Industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products.” VISION for the TANKER INDUSTRY “A responsible, sustainable and respected Tanker Industry, committed to continuous improvement and constructively influencing its future.” 1. INTERTANKO

INTERTANKO Goals 1. Be the representative forum of choice for all quality tanker owners and managers. 2. Enhance public and political awareness of the importance and positive performance of the tanker industry. 3. Promote balanced terms of trade and a competitive, transparent and sustainable tanker industry. 4. Lead the development, acceptance and implementation of uniform, worldwide international tanker standards 5. Lead in establishing and maintaining partnerships, cooperation and open and constructive dialogue with the relevant maritime authorities, organizations, associations and special interest groups. 1. INTERTANKO

INTERTANKO Members Goals Zero Detentions Zero Pollution Zero Fatalities

1.ISM/Maintenance Requirement 1.1Entry of Tank vessels into Membership 1.2 IACS Classification Societies 1.3 Recognised Insurance Cover 1.4Transparency of Ownership 1.5 State Owned Companies entry criterion 1.6 IMO Voluntary Flag State (When the IMO Voluntary Flag State audits are in force, INTERTANKO Members shall register their tankers under those flags that have satisfactorily completed their [latest] IMO Member State audit and have made public the findings and recommendations of the audit. (This will be a future criterion as the work on the IMO Flag State Audit is not sufficiently advanced yet. However, the Council endorsed at its meeting in London 10th September 2005 that a flag criterion be added in due course and that this decision should be made public) 2.Best Practices 2.1 Budget Resources 2.2 Breaches of MARPOL 2.3Reporting Deficiencies to Class 2.4Leading Industry Performance 2.5IMO Pilotage Recommendations for Danish Waters 2.6Guide for Correct Entries in the Oil record book 2.7 Right Whale Avoidance 2.8 Best Practice - Cadet Berths 2.9IMO Guidelines for Lifeboat Safety 2.10Incident Transparency 2.11 Ballast Water Management Plan 2.12 Emergency Response for Damage Stability 2.13 Monitoring Members Detentions 1. INTERTANKO Membership criteria/Best practices:

INTERTANKO Services INTERTANKO represents and promotes the interests of responsible oil and chemical tanker owners worldwide and provides members with technical, operational, legal, documentary and other support services, information and advice 1. INTERTANKO 25 Secretariat London, Oslo, Washington & Singapore 14 Committee’s and 4 Regional Panels 50+ Work Items on the Agenda

Member Company Regional ManagerIssue Manager Member Company INTERTANKO Position Issue Developing an INTERTANKO Position 1. INTERTANKO

Q-Quest Sub-Committee Secretary: Howard Snaith Management Committee Secretary: Peter Swift Shipowner Issues Sub- Committee Secretary: Peter Swift Governance Structure 14 Committees 4 Regional Panels

Example: INTERTANKO’s Vetting Committee 20 Members Provide mandate for INTERTANKO position on Vetting & PSC issues Vetting Committee Issues & Work Program: Tanker Officer Training Standard WG (TOTS) Terminal Vetting Database WG Vetting Clause WG TMSA Working Group Detention Statistics & Age WG SIRE Inspector WG Officer Matrix WG Vetting Publication WG Age of The vessel ILO 180 & STCW Hours of Work & Rest 1. INTERTANKO

INTERTANKO Services INTERTANKO represents and promotes the interests of responsible oil and chemical tanker owners worldwide and Provides members with technical, operational, legal, documentary and other support services, information and advice 1. INTERTANKO

Weekly NEWS –issue background and updates –port information disbursements reception facilities –terminal vetting database terminal experience and information –Q88 –Benchmarking databases –Presentations Meeting possibilities –INTERTANKO tanker events –committee meetings –seminars –workshops INTERTANKO Services: Using INTERTANKO

1. INTERTANKO Advice on charter party questions Aadvice on international regulations Market information –statistics –world economy –oil market –tanker and chemical fleet –casualties and oil spills Guidance and information publications –50% off the purchase price of publications Freight and Demurrage Information Pool –a database of charterers' records on settlement of freight and demurrage –receive assistance in securing payment of outstanding demurrage claims INTERTANKO Services: Using INTERTANKO cont.

Work Program Air Emission AIS - Automatic Identification Systems - (Navigation) Antifouling paints - (Environment) Anti-terrorist legislation - shipowners' liability Anti-trust/Competition Law - (Legal and Documentary ) Average Most Probable Discharge (AMPD) - (North American Issues) Ballast Water Guidelines - (Ballast water ) Ballast Water Legislation - (Ballast water ) Best Management Practices for the control and reduction of “inadvertent” cargo vapour emissions from tankers - (Air Emission) Best Practise - Cadet Berths - (Human Element) Biofuels - (MARPOL Annex II The Revisions) Bunkering - general - (Bunkers) Charter Party Advice - (Legal and Documentary ) Charter Party forms - (Legal and Documentary ) Claims of Affiliates and under Bills of Lading clause – P&I cover prejudiced - (Charter Party Advice ) Coating on cargo tanks - (Technical ) Company Security Officers (CSOs) – guidelines on training and certification - (Security) Compensation limits for oil pollution - (Tanker facts) Co-operation with pilot associations - (Pilotage) Crew Visas - (Security) CRUCLEAN - (Technical Projects) Crude oil densities - (Phase out) CRUMECON - (Technical Projects) Danish Pilotage & Model Clauses - (Pilotage) 1. INTERTANKO

Electronic Charts - (Navigation) Emission Trading - (Air Emission) Environmental Awareness - (Environment) EU Ship Source Pollution Directive litigation - (Legal and Documentary ) Fatigue - (Human Element) GHG Indexing of Ships - an INTERTANKO Model - (Air Emission) Global integrated shipping information (GISIS) database HNS Convention Hydrogen Sulphide in Bunkers and Crude Oil - (Bunkering - general) Industry Reception Facilities Forum - (Reception Facilities) Inter-Industry Group reports to the IMO on human factors - Regarding Inert Gas International best Practices Maritime Pilotage - (Pilotage) Bunkering Guide - (SECA) Chartering Publications - (Legal and Documentary ) MARPOL Annex II VOCON Operational Procedure - (Air Emission) ) INTERTANKO’s Freight and Demurrage Information Pool - (Legal and Documentary ) - (Oil Spill Liability and Compensation) Joint War Committee (JWC) - (War Risk Cover) Lifeboat Working Group - (Lifeboats) LOF 2000 (SCOPIC) - (Pollution Prevention) Long Range Identification and Tracking (LRIT) - (Security) MARPOL Annex VI - (Air Emission) Material Safety Data Sheet (MSDS) - (Technical ) (Vetting/Ship Inspections) Newbuilding Standards: Extended guarantee/net-scantlings/corrosion margins - (Technical) Oil Pollution Clause - (INTERTANKO Model Clauses) 1. INTERTANKO

Oil Spill Liability and Compensation - (Insurance) Oil supply and demand - (Research and Projects) OPA90 - (Regulatory schedules) Operational/Safe Manning - (Human Element) OPRC-HNS Protocol - (Chemical ) Overview of the 1992 CLC & Fund Regime - (Insurance) Phase out statistics - (Research and Projects) Pilotage - (Marine safety) Piracy updates - (Piracy) Pollution casualties - ITOPF - (Casualties) Pollution Prevention - (Environment) Port Costs – Worldscale clause - (INTERTANKO Model Clauses) Port State Control - (Research and Projects) Product evaluation and cargo classification by 12th Session of ESPH 12 Working Group - (MARPOL Annex II The Revisions) Protection of Bunker Tanks - (Technical ) Protective coatings of dedicated seawater ballast tanks required in all types of ships and double-sided skin spaces of bulk carriers - (Technical ) Questionnaire 88 - (Vetting/Ship Inspections) Reception Facilities - (Environment) Revised IBC Code & MARPOL Annex II - (MARPOL Annex II The Revisions) Sale and purchase - (Research and Projects) Salvage & firefighting requirements - (North American Issues) ) SECA Entry Guide - (SECA) Security, terrorism - (Piracy) Sewage Regulations - (Environment) Single-hull tanker phase-out calculator - (Phase out) 1. INTERTANKO

SIRE (Ship Inspection Reporting System) - (Vetting & port state control) SMPEP & SOPEP - (Pollution Prevention) SOPEP-National Contacts - (Pollution Prevention) Tank Level and Pressure Monitoring (TLPM) - (Technical) Tanker Chartering Seminars - (Legal and Documentary ) Time Charterparty Clauses TMSA - (Vetting/Ship Inspections) TOPIA 2006 charterparty clause (for all tankers) - (INTERTANKO Model Clauses) Total tanker incidents (Casualties) TOTS (Tanker Officer Training Standards) - (Vetting/Ship Inspections) Trading requlations/sailing restrictions - (Ports and Terminals ) Tug escorts - (North American Issues) Under Keel Clearance (UKC) Guidelines - (Navigation) US - Automated Manifest System (AMS) US Coast Guard Chemical Transportation Advisory Committee USCG QUALSHIP 21 - (Port state control) Vapour Emission Control Systems Standards Vessel Data Recorders (VDR, Black boxes) Vetting/Ship Inspections War Risk Cover Whale and Cetacean Conservation Winch Brake Settings Worldscale Wreck Removal Convention 1. INTERTANKO

Liaison INTERCARGO International Chamber of Shipping (ICS) BIMCO Oil Companies International Marine forum (OCIMF) Individual oil companies Ports Associations (reception facilities, terminal vetting) Pilots PSC (MoUs) Local, National, Regional and International regulatory bodies Other associations (FOSFA/NIOP) Governments (IMO) 1. INTERTANKO Round Table of International Shipping Associations (RTisa)

2. The Impact of PSC on the Tanker Industry In 2005 EQUASIS published their analysis of data in the EQUASUS database Port State authorities check the compliance with international conventions of foreign ships visiting their ports. EQUASIS includes inspection data provided by three of the regional port state control regimes, Paris MoU, Tokyo MoU and U.S. Coastguard (USCG). INTERTANKO participated actively and provided its input

2. The Impact of PSC on the Tanker Industry The EMSA/EQUASIS 2005 report on detentions is grouped into five sections: a)The Fleet Population b)Classification Societies c)P&I d)Port State Control e)Trade Associations, Industry Vetting Programs and Shipping Companies.

2. The Impact of PSC on the Tanker Industry Results of the statistical analysis show that those ships with IACS class were less likely to be detained in 2005 (3.2%) than those with non-IACS societies (17.3%) or whose IACS status has been withdrawn (10.64%). By number, half of the fleet in the Equasis database is classed with an IACS member; But by tonnage, ships under IACS class societies dominate – 90% overall, and 95% for large and very large ships.

2. The Impact of PSC on the Tanker Industry In a similar context, ships insured outside the International Group of P & I Clubs (IG) were more likely to be detained in 2005 (9.24%) than those inside the Group (3.06%) particularly among cargo ships. The Equasis figures indicate 88% of the fleet by tonnage is covered by IG insurers

2. The Impact of PSC on the Tanker Industry A concern of the industry and regulators alike is that ships should not be subject to unnecessarily frequent inspections. The following tables show the level of annual inspections by the three regional port state control regimes which contributed to EQUASIS for the period 2000 to 2005.

2. The Impact of PSC on the Tanker Industry Table 142 does not indicate a significant difference among the three PSC regions

2. The Impact of PSC on the Tanker Industry Table 141 shows that the number of individual ships inspected has risen steadily in the period 2000 to The frequency of inspection of ships has remained fairly constant with around a third of inspected ships inspected once and a third inspected twice in each year.

2. The Impact of PSC on the Tanker Industry Source EQUASIS Processed by EMSA

2. The Impact of PSC on the Tanker Industry Several professional maritime trade associations and vetting programs supply information to EQUASIS on ships covered by their schemes. Such schemes are either ship-based (e.g. OCIMF) or company-based (e.g. INTERTANKO & INTERCARGO) and relate to certain ships types. They aim to provide a mark of quality for ships covered by them.

2. The Impact of PSC on the Tanker Industry Table 186 indicates that a majority of relevant ships are not covered by the vetting schemes and trade associations providing data to EQUASIS. However of the large and very large oil, chemical and gas tankers around one half are covered by Intertanko while nearly 90% (2213 out of 2502) are covered by OCIMF.

2. The Impact of PSC on the Tanker Industry Further analysis suggests that medium, large and very large ships covered by one of the vetting schemes and trade associations are inspected more frequently than those ships not covered. For example, large ships covered by Intertanko were each inspected on average 2.25 times (225,3%) compared with 1.53 times (153.5%) for the relevant types not covered by Intertanko.

2. The Impact of PSC on the Tanker Industry The following table show the detention rates of ships covered by each of the schemes compared with ships of the same type which are outside the relevant scheme. The detention rate is the ratio between the number of detentions and the number of inspections in the Paris MoU, Tokyo MoU and USCG regions in 2005.

2. The Impact of PSC on the Tanker Industry The EQUASIS analysis shows that the fleet in these associations has an impressive safety performance record in 2005 as measured by its detention rate. For Example, despite being subjected to three times as many inspections, the detention rate of the INTERTANKO fleet is much lower (1.7%) than non-Intertanko members (3.1%).

3. Optimal & Effective PSC EQUASIS & INTERTANKO has revised Questionnaire 88 (Charterers Questionnaire) to take into account new information and regular questions that have now become current by Brokers, based partly on legislative changes over the years. INTERTANKO expects to issue further revised editions in the future to ensure that this questionnaire remains up-to-date and continues to be seen as an industry standard

3. Optimal & Effective PSC An important aspect within the revision is a question pertaining to CAS, (Condition Assessment Scheme), which asks if the vessel has a statement of compliance issued under the provisions of the Condition Assessment Scheme as relevant to MARPOL. This has being of immense value to port state control officers and other industry bodies in helping them assess which ships are single hull, which are double hull and which have undergone CAS

Coffee Break

3. Optimal & Effective PSC INTERTANKO Standard Inspection Feedback Forms PSC An essential Feedback System for Continual Improvement

3. Optimal & Effective PSC Based on comments and cooperation with our membership, The INTERTANKO Vetting Committee developed a Standard Inspection Feedback form. The purpose of this form is to supply confidential information that can be used in a constructive & statistical manner to assist in our ongoing discussions with Port State Control, Oil Major Vetting Departments, and establishments such as CDI and SIRE. Part 2 of the questionnaire relates to Port State Control inspections We encourage INTERTANKO members to supply their vessels with a copy of this form with the request that the forms be completed for each inspection as appropriate. We also request that these forms be completed on each occasion that a commercial or PSC inspection takes place whether the results are positive or negative.

3. Optimal & Effective PSC INTERTANKO Port State Control Inspection Feedback Form

3. Optimal & Effective PSC Some Examples of the Results PSC Inspection feedback

3. Optimal & Effective PSC PSC Inspection feedback

3. Optimal & Effective PSC PSC Inspection feedback

3. Optimal & Effective PSC PSC Inspection feedback

3. Optimal & Effective PSC PSC Inspection feedback

3. Optimal & Effective PSC PSC Inspection feedback

3. Optimal & Effective PSC Port State Control Integrity Instances around the world where PSC integrity is compromised Disadvantage to Serious Quality Owners Disadvantage to Professional PSC authorities. Our colleagues at INTERCARGO have developed a confidential feedback form to address this.

3. Optimal & Effective PSC INTERCARGO & INTERTANKO working with industry colleagues. Seeking independent 3rd party to confidentially and impartially handle and host the database for this feedback

3. Optimal & Effective PSC Optimising SIRE and CDI To Assist PSC Via Confidentiality agreements with both OCIMF’s SIRE System for Oil Tankers & The CDI Inspection system for Chemical & Gas Tankers Access is gained to the Statutory information contained in the Ship inspection reports PSC can help target inspections towards the sub-standard ship and reward the quality Only 3% of PSC authorities use this functionality

3. Optimal & Effective PSC The Impact of the Vetting & Screening Systems: SIRE CDI Commercial Vetting Inspections

3: Goals & Good Practice ”Harmonised standards and training of inspectors” We still see different standards in different parts of the world, a common, level playing feild enables all players to understand what is required and enable them to meet requirements

3: Goals & Good Practice ”Common, Global, Sub-Standard Targeting Systems” Although targeting systems such as used by the Paris MoU, USCG and others are effective, we still see different targeting systems around the world.  Harmonisation eases compliance  Closes loop holes

3: Goals & Good Practice Consistent Clear Grounds for Detention Not all PSC Authorities release guidelines regarding what is a clear ground for a detention. : Level Playing feild : No surprises

3: Goals & Good Practice ”Standard Global ”Independent” Detention appeals procedures.” Port State legal Appeals exist for each state ”BUT” a legal appeal is ”NOT” Independent Such a legal appeal is to the same authority that detained the ship, impartial?

3: Goals & Good Practice Paris MoU Review Board Subsequent to INTERTANKO’s meeting with the Paris MoU Advisory Board - during 2001 We raised our concerns regarding the lack of an independent review process in the case where an owner feels his vessel has been detained unjustly. After several Trials by the Paris MoU this process came into effect AND has proved successful in enabling some detention records to be cleaned

3: Goals & Good Practice TOKYO MOU Detention Review Board INTERTANKO and its ‘Round Table’ colleagues wrote to the Tokyo MoU proposing that a similar, (To the Paris MoU) independent detention review board be created within the Tokyo MoU, we are very pleased to announce that The Tokyo MoU have now instigated such a process and issued guidelines on their website Whilst the findings of the Tokyo MoU Detention Review Panel are not binding, they may provide justification for the detaining port State to amend its inspection data already inserted in the APCIS system. The recommendation of the Panel can not be used as a ground for claiming a financial compensation. But it allows for an independent vehicle for a detention review. A full overview of the procedures are available on the Tokyo MoU web site We are very grateful to the Tokyo MoU for taking our views and proposals onboard.

3: Goals & Good Practice Mediterranean MoU Review Board Subsequent to our meeting & presentation to The Mediterranean MoU Board, we are pleased to advise that the Med’ MoU has indicated that it proposes to instigate an independent detention review process (similar to that practised by the Paris MoU).

3: Goals & Good Practice Development of rewards / incentives for the Good Owners Ships especially Tankers are still over inspected, our aim is too seek rewards for the good owner by reduced inspections for the quality ship, and increased targeting and inspections for sub-standard ships

3: Goals & Good Practice Close out of Deficiencies INTERTANKO is seeking the creation of a system that will enable deficiencies to be effectively closed out and shown as such on the EQUASIS web site. Currently these remain “open” in EQUASIS leading to incorrect assessments by “users”

4. Conclusions We believe PSC is effective BUT - Greater focus on the sub-standard ship PSC Integrity “MUST” be maintained Rewards for the Quality owner INTERTANKO firmly supports the role of PSC INTERTANKO cooperates with PSC to eradicate sub- standard shipping.

Thank you for your attention