In the Press

Friday, January 20, 2012, 8:45 AM

Coast Guard, NAMEPA formalize partnership that promotes marine environmental protection.

The U.S. Coast Guard and the North American Marine Environment Protection Association announced an agreement to co-develop and implement outreach, training and educational materials aimed at reducing maritime pollution. Under the memorandum of understanding, signed during a ceremony at Coast Guard Headquarters, Jan. 10, the Coast Guard will expand its marine environmental protection education and outreach program within NAMEPA’s strategic alliances. Furthermore, the Coast Guard will collaborate with NAMEPA to develop an elementary school curriculum that will focus on reducing marine debris.

“NAMEPA is honored to be partnering with the U.S. Coast Guard and the Coast Guard Auxiliary in our shared goal to ‘Save our Seas’,” said Carleen Lyden-Kluss, co-founder and executive director of NAMEPA. “Through this partnership, we will be able to join forces in promoting the reduction of marine debris, and help in the education of the public about the risks associated with careless disposal of litter. It is our hope that this initial effort will be followed by future projects which serve to protect our marine environment and promote respect and care for it.”

“By partnering with NAMEPA to increase outreach efforts to students who will be future stewards the world’s ocean, we are fulfilling the Coast Guard’s maritime stewardship mission to protect our valuable marine environment.” said Vice Adm. Brian Salerno, the Coast Guard’s Deputy Commandant for Operations.

Maritime Industries Academy Foundation Receives Donation

Thursday, January 19, 2012

Search continues for cruise ship survivors.

Financial Times.

Rescue workers on Sunday freed a honeymooning South Korean couple who had been trapped in the Costa Concordia cruise liner that foundered off the Italian island of Giglio on Friday night, but the discovery of two elderly men in a submerged part of the vessel took the confirmed death toll to five.

The search was continuing for at least 15 people possibly still missing among the 4,229 listed as having been on board. The 3,216 passengers were said to be mostly Italians but included some 20 nationalities. Two of the confirmed dead were French tourists.

The 114,500-tonne vessel, built in Italy and launched in 2006, was operated by Costa Crociere, an Italian unit of Carnival, one of the world’s largest cruise companies. It had been sailing up the Tuscan coast towards Savona at the start of a cruise bound also for France and Spain.

Analysts suggested the shipwreck could reduce Carnival’s profits by a 10th this year, with the longer-term impact harder to quantify.

Francesco Schettino, Italian captain, was arrested on Saturday, accused of multiple manslaughter, causing a shipwreck and abandoning ship more than three hours before the last known survivors were taken off on Friday night, Italian prosecutors said. Speaking before his arrest, the captain said he and crew members were the last to have evacuated. He said the ship was “more or less” 300m off the island when it hit a rock that he said was not marked on charts. The weather was fair at the time.

Francesco Verusio, prosecutor leading the investigation, said the captain had carried out a “clumsy manoeuvre” too close to the island, possibly 150m away. Despite their giant size – the Costa Concordia is almost 300m – some cruise ships are known to sail close to Giglio’s small harbour to give passengers and islanders a nice view.

The ship’s black box has been recovered. Investigators are asking why the captain did not launch an SOS for about one hour after the ship first hit submerged rocks and started listing as it took on water. Passengers described scenes of panic and confusion after the initial impact that ripped a long gash in the hull. They were initially told there had been an “electrical fault”. Some swam to shore.

Admiral Giampaolo Di Paola, defence minister, said the disaster had been caused by “gross human error”. Corrado Clini, environment minister, questioned whether such large ships, which he noted did not have double hulls, should be allowed to pass so close to land, especially inside a maritime reserve.

The accident comes at the beginning of “wave season” between January and March when the most lucrative summer cruise bookings are made. Analysts said this period could account for about a third of all cruise bookings, and was often when the most profitable deals were arranged.

Carnival, a dual-listed American-British company, operates over 100 ships with brands including P&O, Cunard and Princess Cruises. It accounts for almost 50 per cent of the global cruise market. The shares have already fallen almost 30 per cent in the past year, as the rising cost of fuel and the softening consumer sentiment have worried investors.

The accident is likely to reignite concerns over whether safety regulations have kept pace with the growing size of cruise ships, the largest of which now carry twice as many passengers as just a decade ago.

Clay Maitland, a veteran shipping lawyer who administers the Marshall Islands registry – the world’s third-largest ship registry – said it was time to speak out about the dangers of “gigantism”. The largest cruise ships afloat can carry 2,000 passengers more than the Costa Concordia.

Mr Maitland said: “When you’re dealing with a ship that has thousands of people on it … if something goes wrong, how do you get all those people off?”

The accident is also likely to fuel a debate – which had already been rekindled after the grounding of the container ship Rena off New Zealand in October – over standards of training for ships’ crews.

Although cruise lines – which pay well compared with other shipping companies – can generally attract high-quality officers, Nautilus, the maritime officers’ union, questioned whether other crew members were well enough trained for evacuations.

“While the core crew … are trained to high levels, the passenger staff, we believe, receive only minimal training,” Andrew Linington, Nautilus’s head of communications, said. “It’s a fraction of the safety training given to airline cabin crew.”

Carnival, a dual-listed American-British company, operates more than 100 ships with brands including P&O, Cunard and Princess Cruises. It accounts for almost 50 per cent of the global cruise market.

Concordia disaster revives question of ship size

By Robert Wright, Financial Times.

The Italian disaster (above) highlights the logistical problems of evacuating giant cruise ships, some of which can carry up to 6,000 passengers

As Italian prosecutors question Francesco Schettino, the Costa Concordia’s master, about the immediate circumstances that led the ship to run aground and keel over on Friday, industry specialists believe the incident will provoke fresh questions about safety.

The central one is as old as the cruise ship industry itself: how many passengers and crew can safely be evacuated in an emergency? The struggle of the 4,300 passengers and 1,000 crew on board the Concordia to leave – and the deaths of at least five – suggest to some observers that, at least with existing escape technology and crewing, the answer may be “fewer people than some ships hold”.

Clay Maitland, a veteran shipping lawyer who administers the Marshall Islands registry, the world’s third-largest ship registry, points out that some cruise ships – such as Royal Caribbean International’s Allure of the Seas – carry as many as 6,360 passengers and more than 1,000 crew.

“There are questions about the practicability of getting that number of people off,” Mr Maitland says. “Getting people off the [Costa Concordia] is no joke – and that is tiny compared to some of the monsters that are out there.”

The evacuation concerns go alongside worries across much of the shipping industry about the challenges of finding properly qualified crew for all the thousands of ships being delivered annually.

Cruise lines – which pay officers far better than most other shipping companies – can generally attract high-quality deck officers and engineers. But most of the hundreds of other crew members aboard the largest vessels receive only four to five days’ initial safety training each, according to Andrew Linington, head of communications for Nautilus International, a trade union for ships’ officers.

“While the core crew … are trained to high levels, the passenger staff, we believe, receive only minimal training,” Mr Linington says. “It’s a fraction of the safety training given to airline cabin crew.”

The growing size of cruise ships reflects the same economic principles that have created increasingly large container ships and dry bulk carriers. Operating a ship of twice the capacity of a smaller vessel seldom costs twice as much. Bigger vessels enjoy significant economies of scale.

The European Cruise Council, the industry’s European trade body, insists the sector’s safety record has been the best in the travel industry over the past 20 years. All involved accept that modern cruise ships are far more manoeuvrable and have better navigation equipment than any previous type of passenger ship.

But Friday night’s scenes, according to those involved, raise questions about whether existing safety arrangements have kept pace with ships’ changing scale. The 1,000 or so passengers of the great 20th century Atlantic liners could all muster at lifeboat stations on the same deck as each other, Mr Maitland points out. Arrangements for evacuating 5,000 passengers are inevitably more complex.

Mr Linington says the basic escape equipment – lifeboats, fast rescue boats and life rafts – on board most ships have barely changed since the aftermath of the Titanic disaster, which claimed 1,500 lives in April 1912. Friday’s accident may start a fresh debate about whether new types of escape craft, which look less like ordinary lifeboats and more like a detachable part of the ship, should be considered.

“A lot of designers have come up with good, technically feasible proposals,” Mr Linington says.

The hope for the industry must be that a rethink will come before an accident – perhaps a fire – strikes in even more difficult circumstances than Friday’s.

Mr Maitland says the industry should think itself lucky the Concordia’s accident took place in calm water near land.

“Suppose it was out in the middle of the Caribbean or the Mediterranean in a storm?” he asks

Dangers of carrying nickel ore highlighted by UK Club

The UK P&I (protection-and-indemnity) Club has put out fresh warnings on the dangers of carrying nickel-ore cargoes following the loss of the 56,000-dwt Vinalines Queen (built 2005) over Christmas.

But it is the only marine insurer to act despite increasing concern that the need for caution is still not getting across.

Although the cause of the loss is not officially confirmed as cargo- related, the tragedy — which claimed 22 lives — is being widely viewed as due to excess moisture in the cargo because of a series of similar losses in late 2010.

In its warning, the UK P&I Club said: “The club considers that all members who carry this commodity regularly or are contemplating entering this market should continue to exercise caution prior to accepting such cargoes for shipment, especially cargoes originating from Indonesia and the Philippines, and to contact the club if they have specific concerns.”

The Vinalines Queen was carrying a cargo of nickel ore loaded in Indonesia when it went down off the Philippines over the Christmas holiday.

None of the other clubs, including the Vinalines Queen P&I insurer, the London Club, have put out warnings.

An official from the London Club, however, earlier told TradeWinds that although the cause of the accident had not been confirmed, the “working theory” is that there might have been excess moisture in the cargo.

The UK Club added that apparent failure of earlier warnings is a worry. It said: “It is because of these efforts that this most recent loss has received such expressions of concern from all corners of the maritime industry.”

Last week, industry association Intercargo secretary-general Rob Lomas said: “Clearly more needs to be urgently done to stop this appalling, unnecessary loss of life.”

The rallying call has also been taken up by industry commentator Clay Maitland who is a partner in the Marshall Islands ship registry.

Maitland said: “There continues to be a crying need for greater information, understanding and enforcement of regulations — as well as testing — of cargoes that may liquefy. Nickel ore is one such.”

“It is also clear that bulker losses like that of the Vinalines Queen are taking place within specific trades and with similar destinations in the Far East.

“It would be very helpful if the International Maritime Organisation [IMO] could study these specific trades, with the objective of getting the word out on hazardous bulk cargoes.

“Many of the ships that have been lost have crews and flag states that are not likely to have the necessary information on the risks involved, and the measures that need to be taken, in handling dangerous or difficult cargoes.”

By Adam Corbett London. Tradewinds, Friday 13th January 2012.

Maitland: armed guards are owners’ responsibility

A leading ship register executive has distanced himself from the IMO’s stance on armed guards, writes Neville Smith

Although the IMO’s Maritime Safety Committee has issued guidelines giving flag states discretion over the use of armed guards on ships, one flag state executive has called for a new international convention to cover private navy operations that would distance nag states from responsibility for licensing an armed response to piracy.
Speaking in a personal capacity at International Registries, wruch a few days before the MSC manages the Marshall Islands’ register, admined the industry had “passed a threshold” in the use of armed guards, but said responsibility for vetting rested with shipowners rather than governments.

“‘Armed guards are now necessary and we agree with that, but there are a lot of problems with it. You are never going to get the flags to issue a piece ofpaper authorising the use of armed guards and you’re not going to get a document prohibiting it.

We are not going to take shipowners of the hook when they say they have flag state authority to put armed guards on board ships.”
This is something of contradiction of the IMO stance and the outcome of the recent MSC meeting, which issued interim guidelines stressing the responsibility of owners to seek the approval of flag states before contracting with them.

Instead, Maitland said a new international convention should be developed quickly

www.fairplay.co.uk

Maitland in ‘rules of engagement’ call

Clay Maitland. managing panner of the International Registries Inc (lRI). the administrator of the Marshall Islands nag state. attempted to put the record strait on the IRI”s anti· piracy stance at a recent meeting in London.

“The Marshall Islands cannot accept military vessels,” Maitland said emphatically.

He was replying to mcdia reports which suggested the flag state would register vessels providing armed escorts through the pirate infested water of the Gulf of Aden and the Indian Ocean.

“Action must be undertaken under the rule of law, but at present this docsn’t exist.” he said. He went on to call for naval vessels to be given ‘rules of engagement whcn facing allcgcd pirate vcssels in Somali waters.

He said that the Marshall Islands flag state was not against the use of armed guards, but was definitely against the use of a private navy. “Armed guards are a better idea than people in 40 ft boats,” he asserted.

Maitland said that although the naval coalitionforces had met with success  in the Gulf of Aden. This had resulted in driving thc pirates out into thc Indian Ocean, which is almost impossible to directly patrol.

“The ‘catch and release’ tactics imposed by many governments on their navies have not been helpful in containing piracy, but where naval forces stop, search, destroy and occasionally release suspects, has been more effcctive in deterring attacks,” he said.

He attacked so called industry spokcsmen who advocated action without offering specifics. Maitland expressed concern that a “mindless cscalation of violence at sea will extract a heavy price from seafarers,who are likely to be held hostage and subject to summary execution, much in the manner practised by terrorists”

Maitland also confirmed that the flag state would welcome proposed International Convention on the Suppression of Piracy, currently being discussed at the IMO.

He  went 0n to outline the things that could and should be done. such as:

• Persuade governments to enact strong: national laws, promoting the ability to pursue and capture pirates and destroy their ‘Motherships’ by criminalising ‘conspiracy to carry out piratical acts’

•Implement UNCLOS and SUA 1988,which provide adequate international legislation to permit such national laws to be enacted

•Continue to require the insurance industry to dcmand the adoption and following of best management practices (BMP)

•Ensure that navies must become more flexible and adaptable t0 the kind of ‘asymmetrical’ patrol and control work. For which larger grey-hulled vessels are proving inadequate

Maitland warned that the suppression of piracy is going to require a much greater level of specialised training. The current convoy escort programme may be more effective than is currently suggested. Perhaps in the hands of the Coast Guard or naval forces.

Ship Management International, May/June 2011. Issue 31

Italy urged to set up own marine environment protection association

Lloyd’s List 23rd May

Chairmen of Namepa and Cymepa say Italian shipowners should help clean up the country’s seas

PROTECTING the marine environment has become a key priority for the maritime industry during the last decade, with ballast water management being a key focus for regulators and ship operators.

What is being done, though, about general litter in the world’s seas and oceans?

Over the past few years, environmentalists have drawn attention to the ever-growing ‘plastic continent’ found in the middle of the Pacific Ocean, with the shipping industry allegedly a major contributor. Yet most people will never see this man-made mass of rubbish floating in the sea and truly realise its significance.

However, if anyone wants to address environmental issues, looking closer to home is a good place to start.

That’s why Clay Maitland, founding chairman of the North American Marine Environment Protection Association, has urged Italian shipowners to set up a similar organisation to promote safer and cleaner seas in and around the Mediterranean country.

Speaking at the Mare Forum Italy in Sorrento, an Amalfi coast holiday hotspot, Mr Maitland recalled the wonderful time he’d had the previous day, on a corporate trip hosted by Giuseppe Bottiglieri to visit the stunning, privately-owned Li Galli islands.

“I do, however, have a controversial issue to raise,” he said.

Mr Maitland revealed how most guests had arrived for the daytrip carrying swimwear and towels, with the aim of taking a dip in the sea after a long lunch.

Some may have decided against the idea of a swim because the water was too cold; but others were put off when they saw what was floating along the shoreline.

“Along with some other people, I couldn’t help but notice, on the way there, that the water was full of plastic trash and garbage,” Mr Maitland said.

One of the potential causes of this could be rubbish being thrown overboard from the high number of passenger vessels transporting both Italians and tourists along the coastline and elsewhere in the Mediterranean.

This image of a lack of cleanliness in the region is not helped by the fact that Naples, a 40-minute hydrofoil journey from Sorrento and Capri, has suffered a waste collection crisis that has seen huge numbers of rubbish bags piled up on the city’s pavements.

There is no reason why Italians cannot clean up its seas, though, Mr Maitland said.

“This is a universal problem and I would propose an Italian Marine Environment Protection Association — Italmepa.”

His idea was supported by George Tsavliris, chairman of Cymepa of Cyprus and principal of Tsavliris Salvage Group. He told Lloyd’s List that Italy’s status as a hub of international shipowners with a modern fleet would make it an ideal country to form such an organisation.

“Why not do a Mepa?” he said. “It would be very well placed and we could help set it up through the International Marine Environment Protection Association.”

Italian shipowners who want to promote the maritime industry could also take advantage of the large number of foreigners flocking to its sunny coastline.

“With Mepas, you link up with the tourist industry,” Mr Tsavliris said. “Cymepa helped develop Cyprus’ blue flag beach concept that sets certain standards of cleanliness for shipping and ensures beaches are clean and safe.

“Remember that shipping includes coastal boats — and if you get hotels and the rest of the tourist industry on board, it not only helps promote the message, but also increases the economies of scale and reduces administration costs for Mepas.”

With Mepas in Cyprus, Turkey and the first organisation in Greece, an Italian set-up would continue to add to a cleaner Mediterranean, he added.

Intermepa, set up in 2006, has seven member countries so far and includes associations from Greece, Cyprus, Australia, Turkey, North America, Ukraine and Uruguay — but it would like to see this number grow.

“There are lots of European Mepas, but it’s not enough,” said Mr Maitland.

“The shipping industry often talks about its image, about how there’s a lot that shipping does actually do for the environment, but for which it gets little credit.

“It’s time the industry was recognised for cleaning the seas — and that’s what we’re trying to do around the world: show we are, in fact, committed to cleaner seas.”

He also pointed out the benefits of being a member of a Mepa. A major advantage is corporate social responsibility; the message this sends out to customers is becoming an increasing priority for international companies.

A shipowner established in an environmental association is likely to be more professional than others, which reflects well on a company’s image.

“If you support a certain standard for the environment, it can indirectly reflect high standards in other elements of your business,” Mr Tsavliris said.

The Danish maritime community is already notorious for promoting cleaner shipping. But big names such as Maersk and Torm — who insist other companies with which they work follow environmental practices — certainly add weight to the argument that supporting environmental organisations is a good idea.

According to Mr Maitland, the worst situations occur when “financial types” in companies push the environment down the priority list.

“The problem with this industry is that generally it is not anticipatory, but instead is reactive,” he said.

He highlighted the extent of cost cutting on environmental measures with the example of energy giant BP. Last year, it suffered catastrophic financial losses and damage to its reputation when Deepwater Horizon, the Transocean rig it was chartering in the Gulf of Mexico to extract oil, exploded and caused the worst ever pollution of US waters.

The multi-billion-dollar company had ironically been a founding member of Namepa, but resigned its membership eight months before the disaster for “budgetary reasons”. The membership price is just $1,500 per annum.

Examples like this should drive home the message to members of the shipping community that they need to make an effort, Mr Tsavliris said.

“We have to show we are not just operating for profit, but we also have a conscience. I would feel ashamed and upset if I was working in the shipping sector but was not involved with the environment,” he added.

Both he and Mr Maitland are ready and waiting to help the Italian shipowning community clean up their seas — so hopefully it will just be a matter of time before they come forward and create Italmepa, promoting a greater public image of shipping.

www.lloydslist.com

Marshall Islands turns down anti-piracy vessels

Government supports forceful action but refuses to accept privately armed or military ships on to register

Steve Matthews – Friday 20 May 2011

THE Marshall Islands will not register the proposed fleet of privately armed anti-piracy patrol vessels, Clay Maitland, managing partner of International Registries Inc, has confirmed.

Moreover, until there is an International Maritime Organization convention on the suppression of piracy, as the Marshall Islands is advocating, no reputable open register can do so, he said.

Speaking on behalf of the Marshall Islands government, Mr Maitland said: “The Marshall Islands cannot and will not flag these vessels. The Marshall Islands is an independent state, but has a “compact” with the US government that the US Coast Guard acts as the coastguard for the Marshall Islands.”

The Marshall Islands cannot accept military vessels on to its register. “There is no legal basis for the registration of a warship on any open register,” he said. Mr Maitland stressed the Marshall Islands is in favour of forceful action against pirates, wherever they are, “but it must be taken in accordance with the rule of law”.

Such action, other than by navies, cannot be done without an international convention, which does not currently exist. “The use of mercenaries is not sanctioned under international law.”

He voiced disagreement with the IMO’s position that it is up to individual flag states to sanction any action — and that piracy is already adequately covered by the United Nations Convention on Law of the Sea.

The Marshall Islands is calling for the adoption of a new international convention on the suppression of piracy. Despite the reputation of the IMO for being slow moving, Mr Maitland cited the speed with which the International Ship and Port Facility Security Convention was adopted and suggested the same process could be applied to a piracy convention.

“In the event of a shooting war with pirates in the Indian Ocean, which is where we are headed, there must be rules of engagement that enable action to be taken against pirate groups. If shooting starts, seafarers will be at risk and in the line of fire. Whatever action is taken must be in accordance with a legal framework that does not exist,” Mr Maitland said.

The absence of an international agreement on the suppression of piracy — and, in particular, the involvement of what is a private navy — concerns the Marshall Islands. Its position is that the use of armed guards on board ships is better than a private navy.

Neither the Marshall Islands nor any flag can guarantee crews would follow rules of engagement, laying them open to potential lawsuits.

“We are not against the use of armed guards, but do not endorse private navies. But that does not mean we are against it,” he said. This apparently ambiguous position reflects the uncertain legal status of any privately-sponsored anti-piracy “navy”.

For the same reason flag states cannot give formal authority for the use of armed guards, but generally take a neutral position while tacitly supporting owners who take that decision.

The Marshall Islands supports the recent creation of the Security Association for the Maritime Sector, set up to vet organisations supplying armed guards and will be meeting with it during Nor-Shipping next week to discuss maritime security issues.

www.lloydslist.com/piracy

www.tradewinds.no

Maitland calls for Piracy Law

By Adam Corbett 17th May

International Registries Inc (IRI) partner Clay Maitland is playing down talk that the Marshall Islands flag is ready to register a new private navy to protect shipping off the Gulf of Aden and Indian Ocean.

As earlier reported in TradeWinds, Maitland confirmed talks had taken place with London broker Jardine Lloyd Thompson, which is spearheading the plan, but insisted that he believes the legal basis for such an operation does not currently exist.

Responding to the suggestion that the new so called Convoy Escort Programme (CEP) could act as a Marshall Islands coastguard Maitland said that an agreement was already in place for the United States coastguard to provide that role.

Maitland conceded that in principle the Marshall Islands flag, managed by IRI, is not against the establishment of CEP and is not totally eliminating the possibility of future involvement.

He told TradeWinds: “We are not against a private navy patrol. But it cannot be sanctioned by a flag state without an international convention.”

He urged the International Maritime Organisation to set the wheels in motion for the establishment of a new International Convention on the Suppression of Piracy.

He said that the IMO needed to act quickly so that security forces in the region could act with more legal certainty when what he believes will be an inevitable escalation of violence in the region occurs.

“We are a pro shipowner registry and we want to see a legal basis set up before we get to a situation where there is a shootout,” he said.

He said the IMO had demonstrated it could act quickly in the past when it established the International Ship and Port Security Code.

The Marshall Islands is also calling for greater quality control in the private security sector and is backing the recently established Security Association for the Maritime Industry (Sami).

Lloyd’s List Feb 10 2011:
Industry oblivious to unlimited liability

International Registries managing partner Clay Maitland warns shipowners could face unprecedented financial burdens in future oil spills

Rajesh Joshi – Thursday 10 February 2011

SHIPPING is blissfully oblivious to the looming calamity of unlimited liability created by the Deepwater Horizon oil spill, International Registries managing partner Clay Maitland has warned, writes Rajesh Joshi .

Mr Maitland, whose organisation manages the Marshall Islands registry, which also flagged Deepwater Horizon, said the estimated liability of $50bn-$60bn — theoretically unlimited — that has befallen BP sets a stark precedent.

Individual shipowners could also face unprecedented financial burdens in any future oil spill from a ship. However, chief financial officers and chief executives across the industry were “complacent” on this issue at best and at worst had not even begun to understand what lay in store.

“The likes of BP and Transocean can bear a burden of $50bn-$60bn. But can your company handle such a liability? One struggles to see how even a strong giant like Maersk can survive such a hit,” Mr Maitland said.

He added that investors and charterers also did not understand that Deepwater Horizon had eliminated the old rule of thumb that “all liability is channelled through one responsible party”.

The new norm is a sharing of liability and no category would be spared.

Shipowners, flag states, third-party crew suppliers and various other elements of the maritime cluster ought to be prepared in future to shoulder the burden.

The industry urgently needed to wake up to these realities, and “get into the business of risk management” to have in place “reasonable and sensible allocation mechanism” for these risks before the next major spill caused by a ship, Mr Maitland said.

Fairplay 17th Feb 2011:

20110217M 33

Tanker Operator Jan 14th:

UN and IMO to address piracy(Jan 14 2011)Early next month, the IMO will host a ceremony to launch an ‘actionplan’ to promote 2011’s World Maritime Day theme – Piracy:Orchestrating the Response.The proceedings, to be held on 3rd February, will be headed by theUN Secretary General Ban Ki-Moon, and the IMO SecretaryGeneral Efthimios Mitropoulos and other luminaries, including theNATO Secretary General, the executive director of the UN Office onDrugs and Crime and the executive director of the World FoodProgramme.Leading US maritime lawyer and shipping industry commentator,Clay Maitland said; “It is to be hoped that something tangible andconcrete will emerge from this gathering of the captains and thekings.”He thought that one positive outcome could be a specific actionplan, containing the following:1. A determination that financial instruments, bank accounts andother assets used by pirates, including but not limited to ransomproceeds, will be traced and blocked, much in the manner nowemployed by UN sanctions regimes.2. An international Convention on the Suppression of Piracy(COSP), granting universal military and political authority tosuppress piratical acts. This instrument should include specificprovision for:• Jurisdiction in the courts of law of states party to the convention;• The right to carry arms and armed guards on board merchantvessels;• The duty of port states and flag states to respect the right ofmerchant vessels and their crews, to bear arms, in defence againstpirates and similar assailants;• The sequestration of bank accounts, financial instruments and allother tangible and intangible assets, including vessels, employed bypirates;• The universal and inalienable right of seafarers of all nationsregardless of their nationality, or of the flag states or states ofregistry of the vessels in which they serve, to the protection of theinternational community.Articles 100 through 111 of the UN Convention on the Law of theSea (UNCLOS) are valuable and important, in that they represent abasis in universally accepted international law.In particular, Article 100, entitled ‘Duty to Co-operate in theRepression of Piracy’, provides as follows – ‘All States shall cooperateto the fullest possible extent in the repression of piracy onthe high seas or in any other place outside the jurisdiction of anyState’, he pointed out.“The long and circuitous dialogue, couched in vague and anodyneterms, to the effect that ‘we really should do something aboutpiracy’ has become threadbare and increasingly embarrassing. It’stime to get down to business; calls to action are fine and dandy, butthe specific action to be taken is clear, apparent and long overdue,”Maitland stressed.

Seatrade September 4th

Seatrade Issue 4 September 2010

David Hughes, Singapore Strait Times

STRAIT TALK
Deep Horizon and risk
Last week this column looked at how shipping, and world trade, could suffer because of the political reaction to the Deep Horizon drilling platform disaster.
This week I want to look at how the Gulf of Mexico pollution incident has lessons for the shipping industries.
The political problems mentioned last week stem from a misplaced view that the offshore oil industry and shipping, and particularly tanker shipping, are very similar industries.
That is not really true but they both share at least one characteristic. They both involve high levels of risk.
Clay Maitland is managing partner of International Registries Inc (IRI) which runs the Marshall Islands ship registry. For several months now he has been running a deliberately thought- provoking blog, which he is at pains to say represents his personal view’s and not IRI’s or the Marshall’s.
In a recent blog he noted that BP investors will now lose their dividends for an undetermined period. That of course means pensions and saving funds – primarily in the UK and US, will suffer.
He writes, ‘The reality of risk is now apparent, and for the first time in history, a maritime-related event has had repercussions in the homes of, to use a current expression,’small people’. While President Barack Obama is being widely blamed for his diktat to BP, this is also what risk can mean.’
Mr Maitland notes that experts in the maritime and other industries have been warning for many years that when something goes wrong, the consequences can be extensive, and widely destructive.
He says that while risk can never be eliminated it can be minimised. And he argues that the first principle of risk minimisation is to enhance built-in redundancy. This means that if one safety net fails, there is another one beneath it. He says that was not the case with Deep Horizon well.
Mr Maitland goes into the BP case in much more depth which I don’t intend to. There will be plenty of enquiries and reports into what went wrong in due course.
In general, though, his point is that big corporations are inevitably run by ‘number crunchers’ who don’t put enough value onto guarding against risk. In the case of the shipping industry the risks can be very high; witness for example the Prestige, Erika, Exxon Valdez, Amoco Cadiz and Torrey Canyon.
Another case that springs to mind is that of the Cosco Busan which hit San Francisco’s Bay Bridge causing a relatively small spill of bunker fuel. That accident resulted in significant and very obvious pollution and huge consequences for the manager of the vessel.
So how can the shipping industry guard against risk? The scope for technical improvements to reduce risk, to build in redundancy, is fairly limited but cannot be discounted. In fact the industry has had to address the issue in the form of double hull for tankers, improving the safety and construction standards of bulk carriers and now we are moving into the area of goal based standards.
The Cosco Busan incident is worth mentioning partly because a spill like that is one of ship operators nastier nightmares.
The accident happened because of human failures but before we go there does Mr Maitland’s argument concerning redundancy apply? Hitting the bridge caused an oil spill because the bunker tanks were located at the vessel’s side. Rupturing the hull also meant breaching the bunker tanks. That is an area which can and is be addressed. The San Francisco spill, it is to be hoped was wake up call for owners.
In the shipping industry, however, the biggest risk, and at the same time main defence against catastrophe is its workforce. So the obvious area to concentrate on is the human element. Put simply the questions ship operators need to ask are, do we have have enough people on board and are they sufficiently trained and experienced?
For what it is worth I believe the answers are too often ‘no’ in both cases. Partly I think it because the industry and its insurers still do not see proper training and adequate manning as fundamental to managing risk at sea.

Ship Management International

March/April 2010

OVER HEARD

Clay Maitland, Managing Partner at IRI Inc, addressing the 4^th Capital Link Invest in International Shipping Forum

“There is no question that we are in the presence of a massive contraction in trade. This comes after a significant expansion of the world fleet during the last decade.  Over the last five years, this has averaged 7% per year, by capacity, of new ships ordered.  During January of 2010, the global fleet expanded further, totalling 80,770 ships of a total of 890.2 million gross tons at the beginning of February.

“Most of the new ships entering the market have been under construction in China and Korea.  This brings me to my first prediction, which is that notwithstanding all the talk of cancellations, most of the ships under construction will be completed and will enter the maritime supply chain over the next few years.

“When it comes to predictions, the old adage “you pays yer money, and you takes yer choice” still applies.  But some predictions seem to me to be very wise.  One prediction is very interesting.  This is put forward by researchers at DnB NOR Bank, to the effect that Chinese annual iron ore imports will continue to increase, and could peak as high as 1.3 billion tons a year before 2020.  This would be double last year’s level, and would create a demand for a further 584 capesize bulkers by then.

“I believe that overcapacity will continue to afflict the global shipping market, as deliveries of new tonnage are pushed back by most shipowners from the years 2009 and 2010 to 2012.  This means that the total supply in the global market will increase by 56% in 2012 – by which I mean newbuildings – by about 56%, by 2012, to 103 million dwt.

“I also fearlessly forecast that the considerable fall in vessel values and prices is going to greatly reduce the profitability of ship yards in China, Korea, and elsewhere.  We saw that during 2008 and 2009, where the average price of all of the major ship types fell by 30% to 40%.”

www.shipmanagementinternational.com

From Lloyd’s List:

China policy is a threat to recovery

Plans to boost shipping sector mean cancelled ships will still be built, International Registries Inc partner warns

Steve Matthews – Thursday 1 April 2010

WHILE the global economic recovery appears to be gaining strength, offering a good omen for world trade, the shipping industry should remain cautious because the risk from the massive orderbook is still there and the number of cancellations could be fewer than many people expect as China seeks to boost its shipbuilding and shipping sectors.

That was the central message from Clay Maitland, managing partner of International Registries Inc, speaking at the Capital Link Invest in International Shipping Forum in New York last week. However, in the longer term, he believes China’s shipping and shipbuilding industries will have to evolve more in line with those in the rest of the world.

Referring to a recent prediction that Chinese iron ore imports would continue to rise and could reach 1.3bn tonnes a year by 2020, more than double the 2009 level and requiring a further 584 capesize bulk carriers, he pointed to a “little noticed agreement for a 55% increase in coking coal prices, a critical element in the manufacture of steel”.

Last year, China imported about 30m tonnes of coking coal, an increase from virtually zero in 2008.

“There will be a significant economic recovery in 2010, and I think the omens are better than many of us realise for a resumption in the growth of seaborne trade,” he said. But in reference to the drying up of traditional forms of credit, he said financing remained a major problem.

“One of the biggest problems in securing finance is the collapse in vessel asset values. While it is a hopeful sign that initial public offerings seem to be making a modest comeback, some of the real losses, and possible bankruptcies in the shipping industry, may lie ahead,” Mr Maitland said.

He expressed concern about the excessive orderbook and in particular that despite many reported cancellations by Western owners, a lot of these supposedly cancelled ships will in fact be built.

“Western owners may boast about cancelling ships to be built in Chinese yards, but these ships will continue being built, and many will become Chinese-owned and financed at a lower price,” he said.

“Media reports give the impression of a lot of cancellations, but the problem is how you define cancellations. Although cancellations are being reported, in many cases the ships will probably still be built, especially in China, due to government measures with Chinese shipping companies taking delivery.

“They could sell them or use them, but we will still see a glut of supply bigger than many people expect. This needs clear expression and raises questions as to how the industry will handle this problem.”

He also voiced concerns about the quality of construction in some Chinese yards, with ships being built to non-International Association of Classification Societies’ class standards and possibly not meeting international standards, which could cause problems in future.

“So there is ambiguous news in this message of continued economic growth,” he suggested, with overcapacity continuing to afflict the global shipping market as deliveries are pushed back.

“The considerable fall in vessel values and prices is going to greatly reduce the profitability of shipyards in China, South Korea, and elsewhere,” he said.

Mr Maitland highlighted the fact some leading Chinese shipbuilders have received significant financial support from the government and state-owned banks.

“Domestic Chinese banks have considerably increased their advances to the shipbuilding sector, while China’s Exim Bank has used export credits to extend the amount available to local shipyards and their customers, including foreign shipowners.”

Mr Maitland’s point was reinforced by confirmation by Exim Bank at a conference in China, held at the same time as the Capital Link event in New York, that it will increase efforts to assist Chinese yards in winning new orders from both domestic and foreign owners using a variety of financial structures. It

The bank will also assist owners seeking to switch orders to different ship types.

He also warned that the continuing overhang of newbuildings generated further risks for shipping, including speculative purchases, inexperienced operators, decline in quality and a lack of transparency of owners and management. There was also a danger of growing protectionism as some countries seek to support domestic shipping and shipbuilding.

Shipping has become increasingly dependent on China for cargo generation, but as its economy develops this will have an impact on shipping and its approach to shipping could also change. As its domestic economy grows, China hopes to provide significant domestic demand for shipping.

“China’s aim is to maintain control of the raw materials it needs, and its own supply chain. China currently follows a strategy of supporting its shipping industry by owning its ships. As capital is drawn down, it may, however, see the wisdom of acquiring overseas partners — integrating into world markets rather than dominating them,” Mr Maitland suggested.

“As its shipping sector matures, China is likely to find that, as costs increase, financial subsidies to the industry, including builders, carriers and banks, become less attractive. To sustain its shipping industry against competition China will have to focus on a strategy of independent ownership and management.”

From The Sea:

From www.ci-online.co.uk

Maitland speaks out on vessel quality
By John Fossey

At a presentation held in London yesterday, Clay Maitland, a maritime attorney with more than 40 years experience in the shipping industry spoke out about quality issues in international shipping. He also used the opportunity to launch his own website (www.claymaitland.com) and blog on the subject.

Joined by Dr Hans Payer, a former member of Hamburg-based Germanischer Lloyd – the classification society – and Michael Grey, an expert on the maritime industry and former editor of Lloyd’s List, he stressed there was a need for all parties ‘to buy into vessel quality’.

‘What has all too often been lacking in our industry is the sense that enhancement and improvement of quality, afloat and ashore, is our common interest, he said. ‘We are all stakeholders nowadays. We are all in this together.’
In particular, the industry veteran wants bankers/financiers to not support and advance loans to sub-standard regimes (registries) and companies. He cited the case of the collapse of New York-based Eastwind Shipping earlier this year as a case in point.
‘Eastwind was dogged over the years by ship detention and casualties that were a warning to all of us who cared, or dared, to notice that all was not well,’ he explained. ‘Where quality is wanting, financial risk is also often higher and so it is in bankers’ interest to support quality too.’

He suggested charterers, shippers and cargo underwriters could also do more, stressing that P&I Clubs, classification societies, flag state administrations, the International Maritime Organisation, the European Union and OECD were ‘all invested in controlling risk, liability exposure, political censure and loss’.

While acknowledging that the shipping industry had done rather well on safety in recent years, Maitland said that there was still a ‘significant market for bottom feeders and sub-standard ships’.

Maitland’s concern is that without the industry sorting out and working collectively to foster safer and better ships that public opinion could turn against the international shipping industry and/or governments impose unnecessary regulation.

He explained: ‘We are only one oil spill away from being on the minds and web pages of millions. The vast increase in the speed and ease of digital communication has battered down the walls that once insulated so many of us from public response, and from criticism, and ultimately from accountability, for the choices that we make.’

Payer and Grey both stressed the need for better training of crew and raised concerns over the current trading climate and the trend for shipowners to reduce costs by cutting back on crew complements and maintenance and repair programmes.

Payer stressed: ‘There is a real danger that ship safety may be compromised, particularly in the longer term. Should the economic recovery take longer, ships will have to be scrutinised more carefully and closely by inspectors, port state control, etc.’

From Singapore Business Times

Striving to make a difference

A new blog is asking the right questions to improve shipping operations

By DAVID HUGHES

THOSE who lay the blame (and there are many) for most of the global shipping industry’s ills on the rise of open registers – or ‘flags of convenience’, as they would say – do not necessarily list Clay Maitland among their heroes.

Mr Maitland has been a prominent figure in the world of open registers for many years, working for and eventually becoming an owner of International Registries, Inc (IRI). Until the late 1990s, IRI ran the Liberian Registry and since then has concentrated on developing the Marshall Islands register.

At present, the Liberian Registry, now run by IRI’s arch rival Liberian International Ship & Corporate Registry (LISCR), is the world’s second largest ship register while Marshall Islands ranks No 4.

The recent elections to the International Maritime Organization (IMO) Council (IMO) provide an interesting reflection on attitudes towards commercially run shipping administration.

The largest open register is Panama’s, which is government-run. Few are likely to deny that the country is now making great efforts to improve the quality of its operation, or that it still has a long way to go. Both Liberia and Marshall Islands, on the other hand, have very good compliance records. That incidentally can be confirmed by looking at the flag performance table published by the Round Table of international associations (www.marisec.org/flag-performance).

Guess which one of the three was elected to the Council. Panama, of course.

Mr Maitland, however, has been a strong and unashamed supporter of commercially run shipping administrations or ‘open registers’ – a term, I believe, he may have coined. And he certainly believes that high quality and open registers can go together.

However, he believes that quality ought to matter to all parties involved in shipping. Last week, he launched an Internet blog (www.claymaitland.com), which he says he hopes will ‘start a dialogue and debate in the shipping industry worldwide to stimulate support for my quality objectives’.

At a press briefing, Mr Maitland said that he wanted to build support for action to create safer ships, cleaner seas and greater protection for the environment.. He said: ‘The achievement of these goals is vital during the current recession, to prevent slippage in quality due to financial pressures.’

He was at pains to stress that he was ‘blogging entirely as an independent person, expressing my own views’. Three other well-known industry figures are involved in the initiative – former Germanischer Lloyd head Hans Payer, former Lloyd’s List editor Michael Grey and freelance journalist Neville Smith – and will contribute to the blog.

During the press briefing, Mr Maitland stressed that he wanted to involve ‘upstream’ players in the shipping chain, such as insurers, charterers and bankers.

He said that the importance of ensuring high-quality operations was now widely accepted throughout the shipping industry. In that respect, it is now a different world from 20 years ago. He warned, however, that there were still ‘bottom feeders’ who cut costs by running substandard ships.

He was particularly concerned about the role of the banks. He cited the example of the collapse of the major New York-based company Eastwind. He said that banks had continued to lend to the company even though it had become clear it was having big quality issues. He said that Marshall Islands had thrown the company’s ships, 35 of them, out of its register a couple of years ago but bankers had continued to back it, and it was able to re-flag elsewhere. He said that the banks had taken a hit as a result.

Dr Payer warned of the consequences of cutting down on maintenance or on training. He said: ‘Although we have made great progress in the past in improving shipping safety from the situation in the 1980s and 1990s, society will not tolerate any noticeable decline in ship safety and environmental protection performance now.

‘We all have to be vigilant and alert to any indication of slackness developing in safety standards in shipping.’

Mr Grey said that his greatest fear was of a catastrophic accident caused by a fatigued watchkeeper falling asleep on the bridge of a small tanker and it colliding with a big passenger ship at anchor. Writing in the new blog, Mr Grey suggested considering the consequences for shipping if something like that happened and everybody found out that the industry had been warned about the problem of fatigue for years and done nothing about it.

He said: ‘Owners are colluding in the practices, records are being improperly kept, or unashamedly ‘flogged’.’

‘We all know that these practices are dangerous, because the casualty investigators tell us so. We all know that instead of a little ship running up on a beach, or impaling herself on a rock, or striking a glancing blow, such an accident fictitiously recounted above is a distinct possibility. Only good fortune has so far prevented it. But still any attempts to ban watch operations and examine the manning of small, intensively run ships provoke instant objections from vested interests in the industry. Are we doing ourselves a favour? Or playing with fire?’

Mr Maitland clearly believes in what he is arguing, and he is prepared to put his own money up to spread the quality message. He also accepts that he needs to engage with the Asian shipping community. It is likely that he will be visiting Japan, Singapore and Hong Kong soon. He is looking for more industry figures to join his band of bloggers, and the next one could well be from this part of the world.

Then there’s the big question: Will this make any difference? Actually, I think it might. The debate on quality is not over. There is still much more to be done, and Mr Maitland’s blog and his group of like-minded commentators can at least help to make sure the right questions are asked.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

From Fairplay

THE SHIPPING industry’s safety issues “can only be fixed” by organisations such as banks and insurers, according to Clay Maitland, managing partner of International Registries, which manages the Marshall Islands Register.

Speaking in a personal capacity in London, Maitland said most of the industry had “found the value of quality” over the past few years, but “there is still a market for the ‘bottom feeders’ in this industry”.

The comments picked up on themes aired by Maitland earlier this year (Fairplay 24, 5 March 2009), but he has now added supporters to his campaign, including Hans Payer, formerly a member of Germanischer Lloyd’s executive board, and Michael Grey, a former editor of Fairplay and Lloyd’s List.

Maitland’s criticisms were directed at both small, little-known flag states and organisations as well as larger and better known bodies.

He said the Panama Register includes non-IACS organisations among its recognised bodies. He also criticised some major classification societies for acting “as umbrellas or cloaks of respectability for phantom ‘administrations’ by acting” as their recognised organisations.

Maitland launched a blog yesterday at www.claymaitland.com to “start a dialogue and debate in the shipping industry worldwide to stimulate support for my quality objectives”.

Definition: 'Ginger Group'

1. A group within a sector or industry, seeking to inspire the rest with its own enthusiasm and activity.

2. A group that actively works for more radical change to the policies and practices of the industry, while still supporting the goals of the entire industry.

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These are my own views or the views of my guest columnists and not those of International Registries, Inc (IRI) of which I am a Managing Partner, nor those of the Marshall Islands ship registry which it administers.They also are not the views of the North American Marine Environment Protection Association [NAMEPA], of which I am Chairman.

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