Libyan unrest

Last week's seizure by UK authorities of about GBP100m bank notes being carried in containers on board the Sloman provider highlight the problems now facing shipowners as unrest continues in Libya. The ship's German owner Sloman Neptun had already decided not to call at Tripoli when the ship was ordered to return to the UK. The cash was taken off the vessel and placed in secure storage.

Shipping law firm and Maritime London members Ince & Co has published an overview of the sanctions now being imposed.

In article posted last week on the company's website, Ince & Co partner Michelle Linderman, provides an analysis of how sanctions affect shipping. The article gives a detailed explanation of the current situation and the sanctions taken specifically against Colonel Gadaffi and his family and the country's ruling elite.

Ms Lindermann advises: “Where vessels are ordered to load or discharge in Libya care must be taken by both Owners and Charterers in complying with the various international sanctions. For those involved in shipping it is important that they keep up to date with the latest developments particularly in relation to the main ports. With the opposition apparently in control of the cities of Benghazi and Tobruk and the [Gadaffi] regime remaining in control in Tripoli, issues could arise in relation to both the supply of goods to these and other Libyan ports; and, whether these ports can be considered unsafe.”

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A government-appointed review of tax allowances has concluded that seafarers’ income tax concessions and the tonnage tax scheme are crucial for the future of the UK Merchant Navy. The measures were included in an Office of Tax Simplification (OTS) investigation into more than 1,000 tax reliefs for companies and individuals.

The review sought to determine the future of allowances that were potentially time-expired, lacking policy rationale, or of negligible value or excessive administrative burden. Following an initial three-month investigation, the OTS produced a report for Chancellor George Osborne which recommends that tonnage tax is retained and which points out that SED helps to ‘maintain the competitiveness of the UK in an international market’.

Seafarer union Nautilus International's general secretary Mark Dickinson wrote to the OTS to stress the importance of both schemes in safeguarding the employment of training of British seafarers. The union has welcomed the outcome of the investigation. The report states that there is no reason for abolishing SED on simplification grounds, although it suggests that the rules could be clarified so that they are more closely linked to STCW qualifications and to the type of vessel served on.

Mr Dickinson says: “It is clear the OTS has listened to the representations made by Nautilus, and we are relieved that what had been initially seen as a significant threat to the future of these vital support measures has eased.”

“However,” he cautions, “it is important to note that these are only recommendations and we will continue to lobby MPs and ministers to ensure that nothing is done to damage the recruitment, training and retention of British seafarers.”

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Merchant shipping’s already huge carbon footprint is set to increase massively, based on present international trade potential, Dr Martin Stopford, managing director of Clarkson Research, has forecast. He was speaking to a monthly meeting of WISTA-UK (part of the Women’s International Shipping & Trading Association) where he also said shipping had to face a shipbuilding surplus as bad as in the 1970s.

Addressing the meeting, at the offices of law firm Reed Smith, he spelled out just how much energy the shipping industry– the fleet as a whole comprises 1.3bn tonnes deadweight – already uses. If today’s trends continued, seaborne cargo would rise from 8bn to 26bn tonnes in 2050, a much bigger carbon footprint. It had to be asked whether that would be environmentally possible, and how much of it would be propelled by fossil fuel. Fifty years from now, the carbon footprint might be 300% greater.

“With peak oil in prospect and billions of new consumers flooding into the world markets, fossil fuels will become scarcer,” said Dr Stopford.

On supply and demand he said that following the shipping freight boom of most of the last decade, we were moving into the cyclical element. It looked like 2010 would be the peak for shipyard deliveries, with 97m gross tons having been completed. The latest figures showed that the fleet was growing at 7%. Until the beginning of the boom the growth rate had been about 2% a year. The industry needed to deal with a shipbuilding surplus which is as bad as in the 1970s, said Dr Stopford.

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The London P&I Club says the way crews responded to two recent onboard cargo fires has highlighted the value of both fire-fighting training and realistic shipboard drills for ships’ crews. In the latest issue of its StopLoss Bulletin, the club refers to a case where smoke was seen by the crew of a containership to be escaping from a container stuffed with bone meal in bulk.

The crew quickly established the best means of fighting a fire involving that commodity and then executed a well-drilled plan to extinguish the fire by flooding the container using a fire-fighting lance connected to a fire hose.The lance was introduced into the box through a hole which the crew punctured in the roof of the container. The same technique was deployed when the bone meal inside a second container also started to self-heat.

By contrast, another crew’s response to a fire in cotton bales loaded in a tweendecker was significantly less effective. While the master’s decision to deploy the CO2 fixed fire-fighting system was fully compliant with the IMDG Code recommendations, the crew’s failure to ensure that the cargo space was sealed before releasing the gas rendered the CO2 wholly ineffective.

The master subsequently sent the fire team into the cargo spaces to fight the fire with hoses. Unfortunately, one of the fire team apparently became disoriented in the thick smoke, suggesting that he had not received adequate training in fire-fighting techniques. He fell from the tweendeck level to the tank top, sustaining severe injuries.

The club notes, “Whereas the operators of the containership had a well-developed training programme, which included realistic drills on a range of different fire types and locations, there was no such prudent practice in place on the other ship. Owners must be aware of their obligations to conduct regular and realistic onboard emergency drills to the requirements of the flag state, SOLAS Convention and as provided for under the ISM Code Section 8 Emergency Preparedness”.

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The seafarers' union Nautilus and the Chamber of Shipping have agreed a new deal covering piracy risks in the Indian Ocean. While the deal does not extend the additional where additional pay is due it does give crew members the right not to sail on ships not following the officially recognised Best Management Practices to prevent boardings.

The deal covers ships entered in the Chamber of Shipping that transit the area bounded to the north by the Suez Canal to 10°S and 78°E. The section of the Gulf of Aden between 45°E and 53°E and north of a straight line connecting Cape Guardafui and the western tip of the Island of Socotra is deemed a “high risk” zone and the remainder of the area designated above be deemed an “at risk” zone, due to the continuing activities of pirates operating from Somalia.

The agreement provides that all ships transiting the “high risk” zone should remain within the Internationally Recommended Transit Corridor (IRTC).

Operators of any ships not remaining within the Transit Corridor (other than for reasons purely related to safety of life at sea, weather, navigational safety or military instructions) should allow any of their seafarers who choose not to proceed to the high-risk zone not to join the ship or to leave the ship at a preceding port as appropriate.

Operators of ships should continue to make special additional payments to all crew members of 100% of normal pay, payable in half-day increments, in respect of each day or half-day during which the ship is in the high-risk zone, in recognition of higher risks associated with transiting this area. This does not apply where special measures, such as military escorts have been arranged.

All ships transiting the “at risk” zone should adhere to the advice contained in the latest edition of the industry “Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area”, as appropriate for the ship.

Operators of any ships not observing the Best Management Practices as appropriate for the ship should allow any of their seafarers who choose not to proceed into the “at risk” zone not to join the ship or to leave the ship at a preceding port as appropriate. .

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Global expansion leads to more cement demand

Global cement cargo volumes are forecast to continue to increase throughout the next 15 years, according to a new report.

World Cement to 2025 by UK-based market consultants Ocean Shipping Consultants says that annual volumes are likely to rise from the estimated 33bn tonnes of 2010 to around 4,2bn tonnes a year by 2015, and about 5.9bn tonnes a year by 2025. This represents overall forward expansion of approximately 78%.

OSC says however that growth will be far from uniform across individual countries and regions however, with some areas set for extensive expansion against far more moderate growth or decline in some mature markets. Over the past decade the global cement trade expanded by 1.4bn tonnes (84%), with about 73% of this overall growth coming from East Asia alone.

OSC notes that bulk carrier freight rates often play a critical role in shaping cement trading patterns, and the scale of the changes in dry bulk carrier freight rates in recent years has inevitably had significant impact on seaborne trade patterns, changing the economic feasibility of individual routes and altering the sea/land transportation cost relation.

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The International Bunker Industry Association (IBIA) welcomed a record number of 985 members and their guests to its 17th Annual Dinner at the Grosvenor House Hotel in London last week. The popularity of the dinner, which was previously held at the Hilton, on London’s Park Lane, enabled the association to move the event to a larger venue for 2011.

Charlotte Egan, IBIA event manager, says, “The decision to move the event to the Grosvenor House was a wise one. Its capacity for dinners is one of the largest in London. We were confident from the success of the 2010 event that numbers were going to keep increasing, and we were right. This is the largest number of stakeholders in the bunker industry that we have ever had under one roof, and I really don’t see it starting to slow down.”

The IBIA Annual Dinner focuses on bringing members and non-members together for one night of networking, making it the biggest event for the bunker industry in the UK. Members and their guests enjoyed a fabulous three-course dinner, with pre- and post-dinner drinks receptions, which gave them ample time and opportunity to meet with key members of the bunker industry.

Ian Adams, IBIA chief executive, says, “Since I started with IBIA in 2001, it has always been my ambition to take the Annual Dinner to one of the largest venues in London. It was quite an experience on the night to see close to a thousand people networking and enjoying the dinner, which I am proud to say has now reached its pinnacle. I look forward to seeing this grow even further in 2012.”

The IBIA Annual Dinner will return to the Grosvenor House, a JW Marriott Hotel, in February 2012.

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The Society of Marine Industries is running a practical seminar for all sizes of company to look at the impact of the new UK Bribery Act. According to the organisers, the conference will cut through the speculation and give practical guidance on what to do to avoid prosecution and/or major commercial disputes and answer questions such as:

• How can we still get projects secured abroad?
• Facilitation payments for customs clearance, applications, phones – OK?
• Can we use agents as we now do and pay their fees regardless?
• Do we need to have a compliance officer and what if we don't have one?
• Is corporate hospitality now illegal?
• Can we exchange New Year's presents?
• Should a company be concerned with a third party's business actions?

The event features presentations from the Institute of Business Ethics, Hill Dickinson, Watson, Farley & Williams and Moore Stephens and takes place 30 March in London.

For further details email: events@maritimeindustries.org

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In just over four weeks, Seatrade will host an evening of celebration held amidst the medieval splendor of the Guildhall in the heart of the City of London. Over 350 international maritime leaders will gather to celebrate outstanding contributions that have been made over the last year for safe, efficient, and environmentally friendly shipping.

Guests include the Seatrade Awards Panel of judges and assessors, maritime associations, and government bodies, as well as a host of industry heads. The Guest of Honour, HRH The Princess Royal will present the awards.

See www.seatrade-global.com/awards for further details.

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