Asian Regional Panel

18 September 2007

Tokyo

INTERTANKO ISSUES

Peter M. Swift

INTERTANKO Today

• Promote & protect the interests of our members

• Provide information and services

• Assist with advice

VISION: A responsible, sustainable, respected Tanker Industry, committed to continuous improvement and constructively influencing its future.

Key issues for Tanker Owners / INTERTANKO

• Business environment

• Legislative developments & Global governance

• Environmental issues

• The “manning” challenges

Asian Regional Panel

Business Environment

Tanker fleet developmentm dwtm dwt

0

92

184

276

368

460

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 P07 P08 P090

1,040

2,080

3,120

4,160

5,200

dwt

number

NoNo

Assumptions for period until 2009:Scheduled phase out for the period: 15.5 m dwt including 4.2 m dwt that should already have been phased out earlier than 2007Assumed removals 2007 – 2009: 29 m dwt (including conversion + other demolition)

Record ordering - despite high prices (mdwt)

20

40

60

80

100

120

Dec-92

Jun-93D

ec-93Jun-94D

ec-94Jun-95D

ec-95Jun-96D

ec-96Jun-97D

ec-97Jun-98D

ec-98Jun-99D

ec-99Jun-00D

ec-00Jun-01D

ec-01Jun-02D

ec-02Jun-03D

ec-03Jun-04D

ec-04Jun-05D

ec-05Jun-06D

ec-06

95/105,000 dwt

150,000 dwt

280,000 dwt

40/45,000 dwt

Source: Fearnleys

0

10

20

30

40

50

60

70

80

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Handy

Chem/Spec)

Panamaxes

Aframaxes

Suezmaxes

VLCCs

1993 and earlier sizes except

VLCCs were defined differently

Demolition: slowed in recent years(mdwt)

0

4

8

12

16

20

24

28

3219

69

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

0

5

10

15

20

25

30

84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Others/NK Bangladesh Pakistan India Taiwan Korea China

Average age steadily reducing (tankers above 10,000 dwt)

Years

6

8

10

12

14

16

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Double-hull percentage rising steadily

%

622

5159

67 68 73 76 79 82 85

9478

4941

33 32 27 24 21 18 15

0

20

40

60

80

10019

91

1997

End

02

End

03

End

04

End

05

End

06

End

07

End

08

End

09

End

10

SH/DB/DS

DH

% dwt share* :

* Assumes phase out according to regulations (rounded upwards, 25 years after 2010.

Asian Regional Panel

Business Environment

Possible Business Discontinuities

(Single Hull) Tanker Phase Out- an “uncertainty” post 2010

m dwtm dwt

Assumptions :MARPOL phase out allows for trading until the age of 25 years old, max 2015The EU alternative does not allow SH trading after 2010.DB/DS can trade until the age of 25 years old, but here cut off 2015

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

MARPOL (min phase out - trading of SHuntil 25 years)EU + no SH after 2010

OPA90

Conversions to Double Hulla further “uncertainty”

Built 10-30, 000 dwt

30-52, 000 dwt

60-72, 000 dwt

90-113, 000 dwt

(incl 6 obos)

120-148, 000dwt

VLCCs TOTAL

1970s 3 2 0 0 0 0 5

1980-1984

8 36 9 1 0 0 54

1986-1989

11 12 0 3 3 1 30

1990-1998

2 9 1 18 2 2 34

TOTAL 24 59 10 22 5 3 123

Panama Canal Expansion

Completion 2014New Dimensions for third lane:

49 metres (160 ft) Beam366 metres (1,200 ft) LOA15 metres (50 ft) DraughtUp to about 170,000 DWT (12,000 TEU)

Tankers5/2007: 5/2008: 5/2009:

Laden $3.29 $3.70 $3.98Ballast $2.61 $2,94 $3.18(based on 1st 10,000 PC/UMS net tonnage)

Asian Regional Panel

Legislative Developments & Global Governance

Global Governance - or confusion !

Global GovernanceThe ideal:

International legislation – implemented promptly and uniformly applied (and in US at least supremacy of federal law)

Consistency with International Law

Uniform standards in flags, class and port state control (even charterers !)

Global GovernanceUnilateralism (actual and potential):

Liability regimes (and limitation of liability)

Ship Source Pollution Directive

Tanker Phase-out

Security regimes

Environmental issues – ballast water, air emissions, recycling

INTERNATIONALCONVENTIONS

WHO GOVERNS SHIPPING ?

COMMUNITY INTERESTS- LOCAL LAWS / REGULATIONS

REGIONALREGULATIONS

INTERNATIONAL SHIPPING

INTERNATIONALCONVENTIONS

MARPOL Annex VI

Who governs Shipping ?- Environmental pressures

COMMUNITY INTERESTS

-LOCAL LAWS / REGULATIONS

California,West Coast/Canadian

Ports,Rotterdam, Antwerp,

Helsinborg,Other

REGIONALREGULATIONSEU / USA (EPA)

INTERNATIONAL SHIPPING

Federal / State Law pre-emptions

Historically:• State of Washington

Currently:• Massachusetts• Ballast Water discharges (EPA)• California Air Resources Board Air

Emission Standards

Asian Regional Panel

Environmental issues

Key environmental challenges:

• Ballast Water Management

• Pollution of the Oceans

• Responsible Recycling

• Anti-fouling paints

• Atmospheric Pollution (in port and at sea)

/ Air Emissions (global climate change)

Asian Regional Panel

The “manning” challenges

The “Manning” Challenges

• Current and future shortages

• Quality gap (training and experience)

• ILO 180 / MLC implementation

• Charterers’ requirements difficult to fulfil

RESPONSE to the many “Manning” Challenges

Includes:• Human Element in shipping Committee• Tanker Officer Training Standards (TOTS)• Cadet Berths – Survey & Policy• STCW revision / IMO Human Element Committee• Image of industry (knowledge & awareness)

Reported tanker incidents reducing – until 2005/6 (with Human error cases increasing)

Number

0

200

400

600

800

1000

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0

84

168

252

336

420

00 01 02 03 04 05 06

War

H & M

F & E

Grounding

Collis.

Misc

Tanker incidents 2006 by type

13%28%

9%

33%17%

Collision

Grounding

Fire/Explosion

Hull & machinery

Misc/unknown

Collision

Groundings

Hull & Machinery (27 engine, 3 hull related)

Misc.

F & E

Reported tanker incidents Jan-Dec

2006 - total 264

Asian Regional Panel

Other Issues

ILAMA / INTERTANKO / INTERCARGOJOINT FEEDBACK FORUM

LIFEBOAT USER GROUP

ILAMA, INTERTANKO and INTERCARGO have launched a joint feedback forum where end-users (crews) of lifeboats and other Life Saving Appliance (LSA) equipment can comment on how effective

such equipment is and how efficiently it functions.

The aim of the forum is to produce feedback and input to the manufacturers, which will help to improve design of life saving equipment and thereby enhance safety in the industry, taking a

crucial step towards achieving the goal of zero fatalities.

E-mails (which may be anonymous) will initially be channelled through INTERTANKO, noted and processed in the strictest

confidence, and then directed on to ILAMA for action.

PLEASE INFORM US OF YOUR CONCERNSemail : lifeboats@intertanko.com

Poseidon Challenge- commitment to continuous improvement- commitment to working with all partners

Poseidon Challenge – Istanbul, April 2008

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