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Monday, September 24, 2018

Further details of the INTERTANKO General and Council meetings in Hong Kong

Volatile tanker markets, shipyard overcapacity, large orderbooks, 2001 being a record year for low oil pollution from tankers, lower OPEC production due to a shift to other producers like Russia were some of the issues discussed at the INTERTANKO meetings on 4 and 5 November when it considered the state of the industry

Added to this was the serious terrorist attack on the Limburg in Yemen, and the uncertainties generated by the potential of a military threat against Iraq. These were only a few aspects of the very complex situation facing tanker owners. Nothing could be described as static.

The Council re-emphasised the need for prompt ratification of MARPOL Annex VI dealing with air pollution. Although air pollution from ships is low, other industries have reduced their air pollution, and regulators are working on rules to reduce shipping’s share even further. Tanker owners have and will continue to play their part in this, but it is essential that new rules need to be such that they can be implemented in practice. For this purpose, there must be a proper match of the regulatory requirements and the availability of suitable fuels that can be used by ships at acceptable prices. There are various plans for emissions trading. The Council saw the attractions of such schemes, but felt that the main emphasis had to be on the supply of appropriate fuels.

The Council discussed and agreed revisions to the membership criteria. INTERTANKO was the first shipping association to introduce membership criteria, and further work will be undertaken to formalise the assessment of compliance with the aim of ensuring the Association’s reputation for the quality of its membership.

INTERTANKO's Insurance Committee Chairman, Mr. Ken Marshall, provided a report to the Executive Committee and Council on Terrorism Liability and an update on IOPC/EU developments relating to oil pollution liability. The Insurance Committee was requested to continue to back up the Secretariat in relation to the IOPC/EU developments on oil pollution liability, Terrorism Liability, and ITC. The dialogue was continuing with the IG on re-insurance and on matters relating to shipowners’ exposure in the event of a terrorist attack.

A prime concern was that it may be questioned whether shipowners have adequate insurance or legal defences to protect their companies and shareholders in the event of an oil spill caused by a terrorist act, particularly at a time when (inter alia) IG Clubs had deleted terrorism from cover.

The terrorist threat to shipping, combined with factors such as the introduction of the exclusion relating to terrorist acts in P&I policies, as well as legislative developments likely to materialise in the US, had made this problem more tangible.

Whilst both the Civil Liability Convention (CLC) and the Oil Pollution Act (OPA) 90 (and CERCLA) contain defences for intentional acts committed by third parties, there are several ways to render these defences of limited or of no use for an owner. Contributory negligence by the shipowner provides for loss of the defence under both the CLC and OPA 90 (and CERCLA). OPA 90 (and CERCLA) in addition contain several other avenues that bring the shipowner back into the liability chain such as failure to co-operate in a spill clean-up and breach of Federal safety regulations. Now that anti-terrorist plans, Security Officers etc. are likely to be required from shipowners by US authorities another avenue to the breaching of limits will potentially open up.

The Council meeting on 5 November addressed the the Limburg incident led by Capt. Peter Raes of Euronav SA. It had taken quite some time before the Yemeni authorities finally accepted that the explosion was the result of a terrorist attack, and not an internal explosion. Capt. Raes mentioned the particular support from Limburg’s flag state during the difficult negotiations with the Yemeni authorities. It was apparent  that the terrorists had undertaken  reconnaissance and comprehensive  preparations before hitting one of the few laden tanks at mid-length.  One frightening aspect was that such an attack could be executed with a relatively small amount of explosive.

The delays caused by the implementation of the Turkish Straits transit regulations was another issue considered in Hong Kong. Representatives of some of the oil companies and INTERTANKO had had a first meeting to explore approaches to the relevant interests in Turkey with the purpose of ensuring that transit of the Turkish straits could take place both safely and efficiently. The Council agreed to the multilevel approach adopted by INTERTANKO in its contacts with the Turkish government (for immediate suspension of the rules and an offer to work together to find practical and internationally acceptable solutions to any safety problems that may exist in relation to tankers transiting the Straits), with the Worldscale Associations and with regard to the documentary issues.

In addition to approving a number of new members and associate members, appointing new members of various committees, the Council also took note of written reports from all of INTERTANKO’s committees and regional panels.

Contact: Erik Ranheim,