1. 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.

2. The Challenges facing the Tanker Industry Dragos Rauta 5 June 2008 Statoil-Hydro, Stavanger

3. INTERTANKO Today 290 + members operating ca. 2950 ships > 80% of the independent oil tanker fleet and > 85% of the chemical carrier fleet 330 + associate members: in oil and chemical tanker related businesses 15 Committees – 5 Regional Panels Principal Offices – London and Oslo Representative Offices in US, Asia and Brussels Observer Status at IMO, IOPC, OECD and UNCTAD International Association of Independent Tanker Owners

4. INTERTANKO – The Voice of the Tanker Industry MISSION To 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, respected Tanker Industry, committed to continuous improvement and constructively influencing its future. ONE OF THE ASSOCIATION’S PRIMARY GOALS Lead the continuous improvement of the Tanker Industry’s performance in striving to achieve the goals of: Zero fatalities, Zero pollution, Zero detentions International Association of Independent Tanker Owners

5. The Tanker Industry Today Tanker Industry’s Goals: aligned to those of the IMO Safe and secure Environmentally responsible Reliable Efficient (Low cost)

6. Key challenges for tanker industry - not unique to the sector Maintain an international framework of consistent, high standards Deliver best environmental performance Ensure availability of good people and quality ships

7. CHALLENGES BEFORE US The “People” Challenge the availability of properly trained staff (afloat as well as ashore)

8. The “People” Challenge What do we know? Formally a shortage of officers today and the gap in supply will grow, but it is more than just “quantity” Weaknesses identified? - e.g. Skills, Competence, Knowledge, and Experience, (Fatigue?) and more? Similar issues for shore management, especially if the supply pool from ships dries up

9. Crew treated as second class citizens – bordering on the inhumane Shore leave denied Crew changes prohibited Access to medical treatment restricted Mustering during inspections Excessive charges for terminal transits Etc…………

10. Criminalisation - and unfair treatment Criminalisation legislation - “Find the guilty” culture rather than a thorough investigation of the cause Failure to adhere to guidelines on “Fair Treatment of Seafarers” – in particular after a marine accident BUT is Industry prepared to stand-up ?

11. Too many inspections! Adding unnecessarily to fatigue and stress - obvious redundancies in the monitoring and verification programmes - failure to share information frequently results in overlapping inspections - non-uniformity in interpretations creates its own problems

12. The Tsunami of Paperwork Senior officers report spending up to half of their time filling in forms, answering e-mails and requests for information

13. Manuals that are incomprehensible Language issues Installation rather than instruction manuals Incomplete in content Inconsistent in functional scope But also sometimes simply unavailable

14. Inadequate equipment Equipment NOT Fit For Purpose OWS / ODME’s Incinerators (undersized) Loading calculators Cranes Lifeboats ! and Inadequate shoreside reception facilities

15. Regulation without recognition of ramifications Ballast Water Management Systems Emission abatement technologies Multi-fuel ships …………… Somebody has to make it work! - or carry the can if it does not work!

16. Regulation without recognition of ramifications Sulphur Emission Control Areas, the Baltic and the North Sea May 2006 IMO: Nov 2007 EU: Aug 2007 AND A further burden for the crew! Potential for complications and confusion

17. And the list goes on !! Non-availability of Material Safety Data Sheets for cargoes and bunkers Pressure on Masters from Charterers, Terminal Operators and Owners ………………..

18. LIFE at sea - quality of accommodation Owners too readily accept “norms” of shipyards as acceptable standard Insufficient attention to personal communications, shipboard training facilities and much more ………………………

19. The People Challenge Availability and Quality Issues But a guiding principle: Human Resources are respected as an asset, not treated as a cost !

20. The People Challenges - recruitment, training and retention Raising awareness (www.maritimefoundation.com)www.maritimefoundation.com Co-operation with educators/trainers Policies for cadet berths and training facilities on all new ships Developing industry standards for Tanker Officer Training, (TOTS), covering proficiency and experience Caring for crews’ welfare and well-being

21. Our crews’ welfare and well-being Speaking out against unjustified criminalisation Campaigning for improved conditions for shore access when security constraints active Working to reduce multiple and overlapping inspections Promoting solutions to lessen technical and operational burden of equipment, systems and associated paperwork Prepared guidelines for safe handling of cargoes and fuels, tank cleaning and entry, and more Developed guidelines on implementing ILO Convention on “work and rest hours” Promoting higher standards of accommodation as industry “norms”; (including e.g. broadband, etc.)

22. Tanker Industry Today Proud of our people, proud of our ships Proud of our performance – but not complacent !

23. INTERTANKO GUIDES Guide to Vetting Process Guidance on compliance with ILO 180 Manual of Good Practice for the Maintenance of Tanker Structures (together with TSCF) Guide to Bunekring of Ships (MARPOL Annex VI) Guide to COW and cargo heating criteria Oil cargo losses and problems with measuremet Explanation and Guidelines for pumping calculations Guide for correct entires in the ORB (machinery) Port Information on the web site Tanker Specification Awareness Guide COT Corrosion Awareness Guide

24. INTERTANKO Tanker Officer Training Standards (TOTS)

25. TOTS - The Issue Increasing Tanker Incidents Proliferation Oil Major Officer Matrix Requirements: “Time Rank” & “Time in Company” Difficult to comply with Stifles Promotion Contradictory Gaps in Officer Matrix Experience Determination that we will manage our future Assurance of competency training standards

26. TOTS Pictogram

27. “Ease compliance” with Officer Matrix Requirements Establish TOTS as Industry standard Provide alternative method of measuring experience Provide a coordinated response by INTERTANKO Provide comfort to Oil/Cos via a structured controlled process Enhance competency based training Provide verification of understanding Ensure compliance with today’s rules & regulations Members Commitment to Support TOTS WOULD OIL COMPANIES ACCEPT IT? WOULD THEY CONTRIBUTE TO FURTHER IMPROVE IT? TOTS - The Objective

28. THE ENVIRONMENTAL AGENDA Anti-fouling Systems Ballast Water Management ACCIDENTAL POLLUTION Ship Recycling Port Reception Facilities Waste Management Marine Noise Pollution Whale Strikes Spill Prevention and Response Planning VOC REDUCTIONS MARPOL ANNEX VI – outstanding issues GHG EMISSIONS - issues Training and Awareness Liaison with Environmental Organisations Environmental Benchmarking

29. Accidental Pollution Source: ITOPF/Fearnleys 1000 ts spilt bntonne-m -45% -33% -82% Reduction per tonne miles - - record small - - thus, a continuous challenge

30. Tanker incidents by type and accidental pollution 1000 ts oil pollutionNo. incidents Source: INTERTANKO/LMIU/ITOPF/various continuous monitoring of incidents

31. Reported tanker incidents Number Source: INTERTANKO/LMIU/various a concerning development Increasing Trend…. Or Is it Increased Reporting Only?

32. Tanker incidents 2007 by type - the human factor ! Source: INTERTANKO/LMIU/various

33. Tanker incidents 2007 by age Incidents/no tankers: 325 incidents 13% 21% 33%

34. Tanker incidents: engine related No Source: INTERTANKO/LMIU/various 0102030405060 2002 2003 2004 2005 2006 2007 1970s 1980s 1990s 2000s NK Built: 2007 incidents by % of fleet per decade of build:

35. Investment in New Tonnage - Move to Double Hulls More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet double hulled in 2010 Assumed all SH tankers phased out by 2010

36. Average age tankers above 10,000 dwt (1970-2007) Years 6 8 10 12 14 16 1970197319761979198219851988199119941997200020032006

37. VOC REDUCTIONS CRUCOGSA Study – The physical behaviour of crude oil during transit at sea Observations on 75 different crudes 2500 measurement onboard 35 crude oil carriers Noticed and understood the causes of in- transit VOC releases INTERTANKO VOCON operational measure VOCON p/v valve KVOC, Venturi – systems developed and used by members of INTERTANKO

38. MARPOL ANNEX VI outstanding issues Issues with SECAs –BDN information not always correct or clear –Fuel test results showing non compliance –Incompatibility problems on LSFO –Time spent for switch over –Problems on supply of 0.10% MGO VOC Management Plan A smooth and rapid transiton to use of marine distillates

39. CONTROLLING ENVIRONMENTAL IMPACT BEST PRACTICE Best & safest practices = each industry does what designed/expected to do –refining industry provides clean, low-sulphur marine fuels –shipping industry provides safe, efficient transportation –engine manufacturing industry develops technology to improve ships’ energy efficiency Using ships to perform waste management is obstacle to innovation to achieve further increases in ships’ energy efficiency - including reduction of CO2 emissions

40. GHG EMISSIONS Climate change not questioned One high priority - search for efficiency gains Trade increase => fleet increase Larger, more efficient ships = less GHG / tonne-mile Main engine specific fuel consumption 20% lower than 10 years ago Shipping is part of the solution rather than being the problem itself Tanker owners & INTERTANKO totally committed to remaining at the forefront

41. GHG Emissions Reductions Many issues Fleet growth as economy and trade grow Post Kyoto – COPENHAGEN 2009 IMO or other External pressures – charterers, shippers, society, politicians Focus is already on Aviation Existing ships / new ships Indexing of units, fleets, industry CO2 trade-offs ? Emission trading scheme – Europe/international ??

42. GHG Emissions Reductions measures Reduction options on existing ships Technical and commercial feasibility assessments Carbon (CO 2 ) indexing Design Index (New); Operational Index (existing) Market Mechanisms (Economic Instruments) Emissions Trading, Carbon Levy (Fuel tax), Incentive Schemes Research New and existing ships, energy saving; hull, machinery One litre of fuel on a modern VLCC moving one tonne of cargo more than 2,500 kilometres - more than twice as far as 20 years ago

43. GHG Emissions Reductions Operational Measures Tanker Owner –ME performance optimisation –Shaft generators –Optimising production on consumption of steam –Hull and propeller maintenance/efficient anti-fouling coatings –Trim optimisation Tanker & Cargo Owners –Voyage optmisation programme (weather; speed) –Cargo volume versus ship’s carrying capacity –Port & Terminal congestions/waiting –Logistics in general

44. Global dependence on oil tanker transportation World Oil Consumption 3.8 billion ts Transported by sea 2.4 billion ts > 60% transported by sea

45. Joint actions Oil Companies Tanker owners and The society Need safe transportation of oil at sea! Strong cooperation is a must! Joint efforts would bring: Mutual Trust Confidence

46. INTERTANKO’S Poseidon Challenge encourages all parties to commit to: - continuous improvement - working with all partners

47. Regulation vs. Self Regulation Acting in parallel ! Promoting self-regulation Adopting “best practices” Producing industry guidelines Developing programmes, procedures, etc. Support “effective” regulations

48. THANK YOU “Proud of our people, Proud of our ships” For more information, please visit: www.intertanko.com www.poseidonchallenge.com www.shippingfacts.com www.maritimefoundation.com