UN secretary-general Ban Ki-moon

The London based International Maritime Organization (IMO) will pay host to the United Nations (UN) secretary-general Ban Ki-moon and the Duke of Gloucester as it hosts a series of celebrations and events to be this week to mark a number of major milestones in the history of IMO.

In addition to hosting the 100th session of the IMO Council, the week will see IMO inaugurate its newly-refurbished headquarters, commemorate 60 years since the adoption of the IMO Convention and 50 years since that Convention entered into force, as well as mark the 25th and 20th anniversaries, respectively, of the World Maritime University (WMU) and the IMO International Maritime Law Institute (IMLI).

UN secretary-general Ban Ki-moon will today give a special address to the IMO Council. He is expected to highlight the work of IMO not just in terms of the service it provides in regulating the maritime industry, but also in the wider context of the international agenda set by the United Nations, including IMO's work to support the Millennium Development Goals, protect the environment and promote sustainable development. Ruth Kelly, Secretary of State for Transport for the United Kingdom, IMO's host government will also address the Council.

Click here to read about the week’s celebrations in detail.

Two new futures contracts based on the Baltic Dry Index (BDI) were launched last week by London based brokerage ICAP and Oslo based Imarex. Based on a basket of key dry bulk shipping routes covering handy, supramax, panamax and capesize vessels, the BDI is a widely accepted barometer of the health of the dry freight markets.

Aimed at banks, hedge funds and private investors looking to increase their exposure to the volatile dry bulk shipping markets, the new contracts provide an alternative to existing forward freight agreement contracts based on specific routes and vessel sizes. Movements in the BDI correlate to a high degree with movements of some of the most highly traded dry bulk shipping shares.

The BDI is published daily by the Baltic Exchange.

The failure of the legal challenge by an Intertanko-led group of shipping industry bodies to the European directive on criminal sanctions for ship source pollution has caused uncertainty about the status of EU law in regard to international conventions.

Intercargo chairman Nicky Pappadakis said: “We have concerns as to the implications of this ruling and the standing of international conventions.”

The European Court of Justice ruled that the validity of the EU Directive 2005/35/EU on ship source pollution cannot be assessed by reference to the international conventions MARPOL 73/78 and UNCLOS 1982.

But Intertanko and its consortium partners say this leaves open the door for other legal fora to rule on how the directive is to be interpreted consistently with these conventions The coalition of applicants challenged the Directive in the English High Court as being inconsistent with, and contrary to, the internationally harmonised rules on the same issue contained in MARPOL 73/78 and UNCLOS 1982.

Intertanko chairman Nick Fistes said: “These proceedings were brought to uphold the principle of the shipping industry being regulated on a global basis with regulations that are legally certain and capable of uniform application. Furthermore, they were brought to ensure the fair treatment of seafarers and others engaged in the shipping industry. We are very concerned at the Court’s ruling and its implications for the shipping industry.”

The chairman of the Greek Shipping Co-operation Committee, Epaminondas Embiricos, pointed to the implications for non-EU countries saying: "The effects of this possibly far reaching judgment must now be given serious thought, primarily by those non European Union States whose MARPOL and UNCLOS treaty rights are being prejudiced.”

On the same theme Colin de la Rue, partner, Ince & Co, noted: “The ruling appears to mean that if there are concerns about the compatibility of a Community instrument with international maritime law, these cannot be tested in the European Court and can be examined only if flag States outside the Community refer them to other international tribunals.”

Poorly sited offshore windfarms are a danger to shipping

The Chamber of Shipping has warned the government not to “build on the motorway” when it sanctions new offshore windfarms. The Crown Estate has launched its Round Three leasing programme for the delivery of up to 25 GW (gigawatts) of new offshore windfarm sites by 2020.

Mark Brownrigg, director-general, Chamber of Shipping, said: “To use a land-based analogy: when planning offshore sites, please don’t build on the motorway! Or on the hard shoulder. But do build in the fields.”

Responding to the proposals he said: “The shipping industry supports the Government’s objective of increasing the percentage of Britain’s energy needs supplied by windpower. However, the Round Three leasing programme needs to consider carefully both the environment and the existing users of the seaways around the UK.”

He added: “Offshore windfarms can pose serious threats to shipping – because of the navigational safety implications when windfarms are located to close to established shipping routes and where they cause interference to ships’ radar. And where ships are forced to deviate around windfarm sites, that may negate some of the environmental benefits they were intended to bring.”

The Chamber says that it will continue to monitor planning applications to ensure that shipping’s safety, efficiency and low environmental impact are not compromised, while engaging positively with developers.

In his introduction to the latest Greek Shipping Co-operation Committee Annual report, the London-based body's chairman Epaminondas Embiricos says the GSCC has made clear its opposition to CO2 taxes to Greece's shipping minister. Mr Embiricos said that the topic was many discussed at “several productive meetings” with the Minister of Merchant Marine George Voulgarakis.

The GSCC chairman says: “We explained to Mr Voulgarakis why we oppose any form of tax, including any Emission Trading Scheme, being imposed on vessels’ CO2 emissions. The emission of CO2 by vessels is an inevitable result of transporting the world’s trade. There is no alternative, non-carbon based fuel, currently available, nor will such a fuel be available in the foreseeable future. Thus limiting or reducing CO2 emissions can only be achieved through limiting or reducing trade, at the expense of the global economy.”

He continues: “Every incentive already exists for vessels to be as fuel efficient as possible in view of the very high price of fuel, which has increased more than five fold over the last few years. In fact CO2 emissions per ton mile transported show a significant and steady decrease over recent years, and there is no justification for a shipping carbon tax which would amount, simply, to a penalty, while having no discernible effect in further reducing CO2 emissions.”

Mr Embiricos also refers to evidence that shipping emissions slowed global warming.

He says: “Furthermore, recent studies have shown that when looking at vessel emissions as a whole, the net effect produced is global cooling, not global warming. This is as a result of sulphate aerosols and methane reduction outweighing the CO2 warming effect. The IMO is meeting in June to discuss this matter and it is imperative that before taking any potentially harmful decisions, the necessary effort should be made to get the science right. It would be ludicrous to seek to impose a tax on vessel CO2 emissions or to impose an ETS scheme if indeed shipping contributes to global cooling rather than warming.”

Leading maritime industry figures speaking in China at a Lloyd’s Register-organised meeting have urged global shipbuilders and suppliers not to let the current shipping boom distract them from what must remain their top priority: the construction of quality vessels.

The comments, made at the 7th annual meeting of Asia’s LR's China National Committee (CNC), came as global shipbuilding capacity was set to eclipse 50 million compensated gross tons next year, raising concerns about the number of inexperienced yards entering the market and the growing pressure to find increasingly scarce skilled workers.

Zhang Guangqin, the president of the China Association of National Shipbuilding Industry, said with the appreciation of the Yuan, rising interest rates, and surging raw material and labour costs already threatening to curb the global appetite for new ships, any slip in shipbuilding quality could bring an end to the current demand cycle.

“Quality issues are the best excuses for ship owners to stop ordering and, with so many challenges emerging for the yards to manage, strengthening quality management should be the most urgent and important task,” Mr Zhang told delegates in Sanya, Hainan Island. “This year needs to be the Year of Quality for China’s marine industries.”

The CNC meeting hosted by Lloyd’s Register was attended by more than 40 of the country’s top builders, owners and designers who collectively challenged the industry to renew its commitment to quality, noting that failure to do so would reach beyond the industry to adversely impact on the overall ‘Made in China’ brand.

Lloyd's Register has developed a voluntary assessment programme, designed to support the practical implementation of the forthcoming ILO Maritime Labour Convention (MLC, 2006) on new and existing ships.

LR notes that, while not yet mandatory, the MLC is a significant development in international shipping described as a 'bill of rights' for maritime labour, is expected to come into force by 2012. But ratification may take place even earlier. The convention has been drafted to help ensure that all seafarers, regardless of their nationality and the flag of the ships they work on, can enjoy decent working and living conditions.

Lloyd's Register believes that the MLC, 2006 will have a direct and positive impact on crew recruitment and retention and maritime safety - key issues for all those involved in shipping. The new convention sets minimum standards on issues such as conditions of employment, accommodation, recreational facilities, food and catering, health and safety protection, medical care, welfare and social security protection issues. Detailed requirements of the convention aim to tackle issues associated with the causes of fatigue, occupational accidents, recruitment, employment opportunities and working and living conditions for an estimated 1.2 million seafarers.

Roland Ives, Lloyd's Register's ILO development manager, commented: "The convention will affect nearly all operators. Its compliance and enforcement provisions will ensure that MLC, 2006 requirements are to be respected even on ships flying the flag of countries that have not ratified it, thus helping establish a level playing field. In the future it may be possible for port state control to detain any ship for non-compliance on a labour related issue. This convention represents a major international initiative to eliminate sub-standard shipping and is a positive development for those operators who support the recruitment and retention of well motivated seafarers.”

Captain Richard Coates, FNI has been elected as president of the Nautical Institute, the international professional body for qualified seafarers and others with an interest in nautical matters He succeeds Captain Nicholas Cooper and will serve for two years.

In his inaugural address, he stressed the importance of the role of the Nautical Institute, and of increasing this influence through major growth of the international membership, while working ever harder to encourage the recruitment of younger members.

He added: “The Nautical Institute is a unique body, with a highly qualified, experienced and motivated membership. Our opinions and experience become ever more worthwhile in a world where core values are easily forgotten or overlooked.”

The US insurance rating organisation AM Best maintained mutual insurer TT Club’s financial strength and issuer credit ratings at A- (Excellent) and has set the outlook for TT Club as ‘stable’.

According to the rating organisation combined ratios between 105% and 110% are anticipated in 2008/09 which is line with that achieved in 2007 of 108%. Despite some weakening last year of risk-adjusted capitalisation noted by AM Best, the rating decision reflects the opinion that TT Club will maintain a strong capital position both this year and next.

Commenting on the rating announcement, Paul Neagle, chief executive of TT said: “We are delighted that in a highly competitive market our financial strength continues to meet the needs of Members, brokers and outside authorities alike. On investments Neagle noted: “While TT Club’s investment portfolio is not directly exposed to losses arising from sub-prime debt, our conservative investment strategy has been and remains sensitive to further changes in the interest rate environment.”

TT’s 2007 financial results show an investment return last year of USD 23.m, just fell short of the 2006's record high USD 25.2m.

Mr Neagle said: “Concerns remain high over the rising claims in sectors such as bodily injury and handling equipment. Although the surge in claims experienced in 2006 has not re-occurred, we remain vigilant in taking action on loss prevention and deductibles to ensure that the Club’s operating performance is maintained.”

The former secretary of state’s representative (Sosrep) for the UK’s Maritime & Coastguard Agency Robin Middleton has been awarded a CBE in the Queen's birthday honours. The role of Sosrep involves coordinating and taking responsibility for all salvage cases wich carry a significant risk of pollution in UK waters. During his eight years as Sosrep he was involved in over 650 incidents, including managing last year's MSC Napoli incident.