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Tuesday, October 16, 2018


The third part of the INTERTANKO Annual General Meeting at Monte Carlo was a dedicated session on the topic of closer cooperation between owners and charterers in promoting safer tanker operations.

Moderator:Richard du Moulin, Chairman & CEO, Marine Transport Corp


Michael Carthew, Vice President, Chevron Shipping Co LLC

Otto H Fritzner, Executive Vice President, Stolt-Nielsen Transportation Group

Paul Slater, Chairman, First International Group of Companies

According to the session moderator, Richard du Moulin, before all the other links in the Chain of Responsibility, there were the owners and charterers. Due to the commercial conditions which pertain, it is more challenging than ever before for the two parties to cooperate. Yet at the same time, political and regulatory pressures for continuously improving safety performance standards are bringing the two sides closer together. In addition, a growing industry awareness of the benefits which can arise from a partnership approach is supporting greater cooperation.

Representing an oil major which not only charters significant tonnage but also operates a large owned fleet, Michael Carthew described the adversarial arrangement which has traditionally hindered the free flow of information between owner and charterer. Of necessity, charterers have to rely on second-hand information when making ship vetting decisions. At Chevron the emphasis is on ensuring the integrity of this information to the greatest extent possible, and decisions are made on a ship by ship basis. In this process knowledge of the shipowner and/or manager is becoming increasingly important. The company categorises owners, and only those acknowledged to be ‘excellent’ or ‘average’ come into consideration. In the Chevron system, an average owner does everything an excellent owner does, only a little less consistently. Chevron recognises the value of cooperation and the principle that quality should be rewarded, but believes a lot of hard work remains to be done to resolve the issues which have surfaced recently. For example, certain issues relating to accountability still need to be confronted. It is time to change the Chain of Responsibility to the Chain of Accountability.  Across the chain, there is a need for a dramatic increase in the quality of the dialogue and availability of information.  Let us work together to make INTERTANKO’s membership synonymous with quality.

Otto Fritzner pointed out that just as there are substandard shipowners, there are also substandard charterers, and that there are still too many poor quality ship inspections being carried out. Charterers and cargo owners also need to commit to, and be subject to, greater levels of transparency. The cause of greater cooperation between owners and charterers will benefit from a commitment by other links in the responsibility chain in specific areas, not least better enforcement of existing rules. Fewer inspections of a higher quality than is currently the norm and coordinated training programmes for port state control inspectors worldwide are key elements. In addition, mini-audits of ISM Code compliance will promote higher standards. Otto Fritzner concluded that all the yardsticks for identifying and weeding out substandard tonnage are in place. They just need to be accorded a higher level of transparency and to be used by all parties exercising a degree of control, including the charterer.

Paul Slater stated that shipping is still traded as a commodity in the offices of many oil companies and traders and that, in most senses, the owner is still the poor relation in the partnership. Evidence is given by the fact that tanker owners are paid for their services after the cargo has been delivered, rather than on or before delivery as is the case in most other commercial transactions. Charterers not prepared to pay for quality tonnage should consider the example of Total Fina Elf which has paid FFr 1 billion towards the cleanup of the French coastline after the Erika spill. A tanker¹s history should be fully documented, said Paul Slater, from when it leaves the building berth to the time it reaches the scrap yard, and this history should be accessible to chain of responsibility participants. Equally as important, these participants must use this ship information in the appropriate manner, and transactions between the shipowner and each of the participants should also be suitably documented over the life of the ship. In this way a strong level of trust between shipowner and charterer, amongst others, could be established.