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» STRAIGHT TALK 8 – Can the last one out please shut the door!

» FIRST PERSON16 – Alfonso Castillero, Vice-President, Liberian Registry

» NOTEBOOK

» SHIPMANAGEMENT

10 – MOL teams up with Synergy Group to launch new shipmanagement and training business – INTERTANKO elects Nikolas Tsakos as its new Chairman – News Focus: Investing the technical expertise in PE

20 How I Work – Henrique Pestana

75 Opinion – Mark Brattman

Cover Story

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SHIP MANAGEMENT INTERNATIONAL – ISSUE 52 NOVEMBER/DECEMBER 2014THE MAGAZINE FOR THE WORLD’S SHIP OWNERS & SHIP MANAGERS»

Issue 52 November/December 2014 Ship Management International

» REGIONAL FOCUS22 Singapore – 6th Singtel Maritime ICT Round Table – ISSS brings managers and owners together in Singapore

42 Hong Kong – Hong Kong holds on to its treasured status

6th SingtelMaritime ICTRound Table

» MARKET SECTOR34 Training – The Human Factor

38 Technical Management – Tailored to fit

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» OBJECTS OF DESIRE78 – Our pick of the most coveted creations

» REVIEW80 – Bringing you the best in arts & culture

» LIFESTYLE82 – Singing the register

» MARITIME MEDICAL48 Heartbeat

» ANTI-PIRACY & MARITIME SECURITY70 – West Africa threat ‘still emerging’ – Maritime security company takes action on new threats50 Ebola

– Ebola – no need for travel or trade ban

61 Classification – First class cooperation

» MARINE PROPULSION65 – Scrubbers find favour to meet new sulphur standard

» SHIP REPAIR68 – Conversion work in the Singapore area

SHIP MANAGEMENT INTERNATIONAL – ISSUE 52 NOVEMBER/DECEMBER 2014

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THE MAGAZINE FOR THE WORLD’S SHIP OWNERS & SHIP MANAGERS»

» COMMENTARY47 Slater on money – Shipping is a business not a capital casino

Ship Management International Issue 52 November/December 2014

» BUSINESS VIEWPOINT52 P&I & Law – IUMI clear in making industry views heard – Insurers thwart Jones’ ‘Code of Conduct’ proposals – Time is right for harmony over General Average

» DISPATCHES72 – Europe confronts the ‘death boats’ of the Med


http://www.vsmts.com

8

Straight Talk

Only weeks after speakers and delegates attending an international shipowning andshipmanagement conference in Singapore debated the difficulties in attractingtoday’s graduates to choose a career in shipping, news landed on our desks of the

decision by a German ship owner to move his ships from the German flag with the resultantloss of 486 German and European crew.

Boxship owner Reederei NSB blamed the “economic status" of the domestic shippingindustry for the "forced" move, which it first warned it was considering in June. Its tone was morestartling when it said that due to the poor market conditions, the employment of German andEuropean sailors was no longer economically feasible and that keeping the German flag wouldthreaten the company’s existence. The market position in shipping constrains investors and shipowners to take measures to preserve one-ship companies, it said; measures which included theability to lower ship operating costs and flag out.

Company CFO Lutz Weber said that he regretted that “even with the involvement ofpolitics and associations, we weren’t successful in bringing the framework of support for theGerman flag to another level, which would ensure a European employee at sea; the long-termability to compete internationally; and secure maritime knowledge in Germany. Unfortunately,Germany, as a maritime location, offers European and German sailors no prospects.”

Harsh words indeed especially when you consider that NSB has the most vessels flagged inGermany of any ship owner. But it raises the difficult issue of why such decisions are also beingpegged to money, and where is the CSR element? The industry goes on about the need forcredible CSR but is the industry really onboard when its real gaze is focused continuously on thebottom line.

Profits are necessary for companies to survive but so are competent seafarers and thisparticular loss of 486 fully trained European crew members will rankle with those purists callingfor greater investment in the right people for the job. Depletion of the European seafarer poolwill have long-term implications because without that HR investment and personnel nurturingnow, who will be there in 20 years’ time to manage the fleets from the shore. Or maybe that willbe flagged out too?

Happy reading Sean Moloney

Welcome toShip Management International

Can the last oneout please shutthe door!


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Notebook

Mitsui O.S.K. Lines (MOL) isfurthering its growth in Indiawith the launch of a

shipmanagement company and trainingcentre in conjunction with Chennai-basedSynergy Group.

The Japanese company says theobjective of the move is to integratetechnical know-how accumulated over 130years of vessel operation with the SynergyGroup’s shipmanagement methods.

Spokesman Yuki Fujiwara explainedwhy MOL had chosen the Synergy Groupto join up with: “While there are othercompanies that have mainly Indian staffmembers and are operated in countriesother than India, the Synergy Group isbased in India and operates there. Also, it is a

newly established company that ispositioned for growth and we think thatwe and the Synergy Group’s topmanagement can share our philosophyand approach to business.”

The new company, MOL SynergyMarine (Singapore), is already managingsix product tankers, however, Mr Fujiwarasaid MOL’s basic policy is still unchanged:“Our owned vessels are managed mainlyby our existing in-house shipmanagementcompanies.”

The link up with the Synergy Grouphas also seen the creation of a newtraining centre in Chennai, which hostedan opening ceremony in October. It isequipped to train shipboard crew in allaspects of ship operations including

navigation, watch keeping, cargo handlingand ship maintenance.

“The Synergy Group proposed to usthe establishment of a new training centreequipped with the latest technologysimulators to offer added services,”explained Mr Fujiwara.

The new simulators include those forship manoeuvring, liquid cargo handling,engine room and ECDIS (ElectronicChart Display & Information System).

Mr Fujiwara said the centre wouldinitially be used for Indian seafarers ofclients which the Synergy Group andMOL Synergy has already builtrelationships with but, as a second step,would like to provide for other potentialclients. �

MOL teams up with Synergy Group tolaunch new shipmanagement and

training business


11

Notebook

INTERTANKO’s Council of Membershas elected Nikolas Tsakos (picturedleft) as its next Chairman. Mr Tsakos,

who has been a Council member since2002 and Vice Chairman since 2012,succeeds Graham Westgarth (picturedright) who has stepped down after fiveyears in the post.

“The last five years of leading theindependent tanker owners have been bothrewarding and challenging,” said MrWestgarth. “The industry has been throughone of the worst recessions in recent history,while at the same time we have had to dealwith the scourge of piracy and a plethora ofnew legislation. This meantINTERTANKO had to remain focused onour mission of providing support to our

members, being a respected voicein the legislative environment andraising awareness of the importanceof shipping to the global economy,while at the same time increasingour emphasis on the commercialsustainability of the industry.

“The selection by Council ofNikolas Tsakos as the nextChairman is an inspired one and Iam certain he will continue to lead

the organisation for the benefit ofINTERTANKO Members and of thetanker industry.”

Nikolas Tsakos, President and ChiefExecutive of Tsakos Energy Navigation, willwork in shifting the focus ofINTERTANKO more towards commercialsustainability while retaining its emphasison technical and operational issues.

He said: “I look forward to leadingINTERTANKO as it continues to advancethe interests of the independent tankerowners. We can make a difference in thetechnical, operational, regulatory andcommercial arenas in which we work; wecan make a day-to-day difference for ourmembers; and we can make a difference forour industry.” �


Following the INCEINEBOLU'sgrounding on rocks at

south eastern AstypalaiaIsland, Aegean Sea, Greece,the casualty sustainedsubstantial damage from theforepeak through to holdnumber one.

Tsavliris embedded andsecured a Yokohama fender,protected by extra tyres, infront of the collision bulkhead.The purpose of adopting thisstrategy was to provide a safebuffer against the force of theseawater that would beencountered during theonward towage, drasticallyaverting the overall damage tothe casualty.

INTERTANKO electsNikolas Tsakos as its

new Chairman

http://www.mtmshipmanagement.com

12

Notebook


If speculative market commentary is tobe believed, then somewhere between$7bn and $12bn will have been

invested by private equity in shipping thisyear. A sizeable amount indeed, but whenyou consider the monetary value of thefunds themselves, this figure is still a drop inthe ocean. Private equity has been a majorplayer in shipping for some years, and thesize of the collective sums invested inshipping this year shows that this continuesto be the case.

But as with any shipping investment,private equity plays are cyclical and as oneprivate equity party divests, others invest andany purchaser has to ask serious technicalquestions surrounding their investments. Thespecific questions depend on the type ofinvestment and there are many differentprivate equity models, from investing in anewbuild programme destined for third partymanagement under the ultimate control ofthe PE owner, the purchase of single ships orsmall groups of ships for trading, through tothe purchase of complete fleets andmanagement organisations.

In each instance, different technicalquestions arise. If the investment is in aprogramme of newbuilds, are the shipyardsperforming and delivering what theypromised; are milestones in newbuildingprogrammes correctly achieved before

more money has to be released? If theinvestment is in a single ship or a smallgroup of ships that are already on the waterand trading, are those vessels suitablyequipped for the future challenges that willbe presented by upcoming regulation? Thelast thing PE wants is a surprise, hefty bill forinstalling additional equipment or to be aparty in proceedings for environmentalviolations. If the PE player is contemplatingpurchase of an entire fleet and itssupporting organisation, how does theperformance of that fleet and itsmanagement stack up against itscompetitors?

Jeff Wilson, Director of MarineConsulting for Europe at BraemarIncorporating The Salvage Association,agrees these are difficult questions butadmits they are highly pertinent when youconsider the investment risks involved.

Private equity players are exceptionallyskilled at devising financial models andstructuring deals to make assets viableplays but Mr Wilson said the PEpurchaser is supported by BraemarSA, which provides advice to private equity purchasers on alltechnical matters relating to thevessels, fleets or companiesthat they are considering aspart of a deal.

“Any private equity investor wantssomeone who understands the hardware theyare investing in and who can give a valuedopinion on that hardware, and in the case of afleet purchase with third party managementan opinion on the effectiveness of the fleet’smanagement is just as important as anopinion on the technical aspects ofthe vessels. We are regularlyasked to give an opinion onhow the vessel or wholefleet is being managedor how effectivelyCapEx and OpEx hasbeen set andbenchmarked,” he said.

“Ship brokers do abrilliant job valuingvessels

News FocusInvesting the technicalexpertise in PE




http://www.senatgroup.com


http://www.nedcon.ro

14

Notebook


but they don’t necessarily have the skills togive an opinion on the condition of the shipor fleet, the effectiveness of its management oran opinion on its OpEx and CapEx budgetsand their underpinning assumptions. That’s aniche service and only something that peoplewho have been in shipmanagement canprovide,” said Mr Wilson.

And when you break it all down it makesclear sense. If an owner says he is running aship or a fleet on a given number of dollars aday, is that good or is it bad? How much ofthis expenditure is on spares, maintenanceand crew costs and how much of it is on otherareas that may not add value to the ship’soperating capability but which are necessaryOpEx overheads? A key question with OpExis whether or not savings can be made.“Where we score very highly is that a lot ofour guys were previously superintendents orfleet managers, so to them looking at a fleetbudget and comparing it to widerexpectations and norms is second nature – it’stheir bread and butter and they know thetechnical operation of ships and fleets insideand out.”

“If a PE group is buying a ship they wantto know what the capital expenditure onequipment is going to be over the next fiveyears so if the ship manager has not lookedinto ballast water management systems orconsidered other upcoming developmentsin environmental compliance, it is going tobe expensive and the purchaser needs to beaware of the risk at the outset. He may onlyjust have taken on a ship to discover thereare some technical issues that need to bequickly resolved.”

“We support the private equity purchaserby guiding them on these technical issues andensuring that they are equipped with enoughsupport and expertise to make a fullyinformed decision about their investment. Wealso provide the same support when theprivate equity owner comes to consider saleof the asset and they are preparing theirprospectus, whether it’s a ship or a whole fleet.

“It is all about knowing the connectivitybetween the commercial realities of running aship and the technical knowhow of how yourun ships, plus an awareness of private equity’scommercial needs once they take on the shipas a going concern; that is our unique sellingpoint,” said Mr Wilson.

What is clear is that there is no room formistakes when it comes to taking on a vesselas an asset play. If you take on a ship for 25years as a long term investment you havethe time to deal with a lot of issues but if youare only taking on a ship as an asset to earnincome for a closed ended fund or as part ofa shorter term play, a detailed understandingof forthcoming exposure is needed. “Ifduring that time you have spent two orthree years installing equipment or dealingwith things which should have been dealtwith before, or which weren’t fully apparentat the start of the deal, then it is too late. Anadditional service we provide is to supportthe upgrading and maintenance of shipsafter the purchase, and to continue to advisethe private equity owners on maintenanceplans and execution in addition tomonitoring of budgets, if that is requested.”

As Mr Wilson stressed, what is differentabout private equity is that they have proper

exposure in a way that banks haven’t. Thebank works on the principal of lendingmoney and receiving interest on the moneylent but not actually owning the asset.Private equity has an owners’ interest inhow that ship is run.

“Our job is not to tell them how tomake an investment, but there is anunderstanding that they have risks theywant to manage and our expertise is helpingthem understand the technical risk ofacquiring either a ship or interestingly, awhole fleet of ships. When PE is intosomething it has a finite life, and theknowledge that the investment has a finitelife means that there is a shorter timescale torecoup any unexpected exposure and costs.

“We have always provided accurate andtimely technical knowledge to stakeholdersin the marine industry, especiallyprofessionals who either need technicalsupport or who expect advice to interprettechnical information relating to ships andnew builds. But the entry of private equitygroups into shipping has seen us matchthose skills much more directly with financeproviders so that they are supported all theway through their investment decisionmaking processes and afterwards as ownersof vessels and shipping companies. BraemarSA is perfectly placed to support PE firmsand other shipping finance providers via itsglobal network of highly qualified marineconsultants and through its close workingrelationship with its sister companies withinthe broking division who carry outcomprehensive research into shippingtrends,” he concluded. �

http://www.aviormarine.com

Ask Alfonso Castillero about histypical day or typical routine, andhis first answer is perhaps

predictable. “In shipping, every day isdifferent, and every day brings a newchallenge.”

However, he elaborated: “A typical dayfor me will begin with the ritual ofresponding to the emails which have comein overnight. Ship registration is a 24-hourbusiness, and it is always office hourssomewhere in the world while you areasleep. After that, it is time for my other job– taking the children to school. Then it is offto the office.

“Depending on what is happening, mytime is typically taken up with meetings,telephone calls, catching up with newdevelopments and anything else which isrequired to ensure that the registry’s clientsreceive the well-informed, first class servicethey are entitled to expect. If time allows, Iwill try to find an opportunity to exerciseduring the working day. It is important toremain fit both physically and mentally.”

Mr Castillero turned heads earlier thisyear when it was announced that, after 16years in the Panamanian maritime sector, hewas leaving his post as Director-General ofthe Panama Ship Registry to join the

Liberian Registry as Vice-President. Hisdecision, he said, was motivated ‘by acommitment to develop my passion toprovide the shipping industry with the bestservice available, as part of a renowned,dedicated and successful team’.

Speaking to SMI, he said: “We are wellprepared for controlled expansion. LISCRwill continue to innovate in order to make adifference. We will compete in an ethicalmanner, offering efficient and responsiveservice, solutions and products. It’s assimple as that.”

What, then, would he say are the keyissues for ship registers around the worldright now? “Shipping is becomingincreasingly regulated,” he said. “Safety,security, environmental and politicalpressures on the industry are arguablygreater than at any time previously.Responsible sectors of the industry willaccept and observe the rules, regulationsand responsibilities that are devolved upon

them and, in many cases, will anticipatethem and be in a position to respond in atimely manner. Ship registers are a case in point.”

There is, he said, ‘unstoppable progress’in the industry, in terms of both ships andtheir cargoes. “But change and evolution arenot something new for ship registries.Liberia’s administration is well prepared forthe changes that are taking place now andfor those which will come into effect in thefuture. We will continue to use ourexperience, and our access to cutting-edgetechnology, to help ensure regulatorycompliance for the owners of even thelargest new ships.”

It is, he said, important to bear in mindthat there are always new and viable optionsto explore in a globalised industry such asshipping. “LISCR has the necessary long-term vision, professionalism, ethics andinnovative strategy to provide its clientswith the value-added service they need.

16

First PersonAlfonso CastilleroVice-President, Liberian Registry


“We will compete in an ethical manner,offering efficient and responsive service,

solutions and products”

17

First Person


http://www.delmarsafety.com

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Liberia has developed good, strong,lasting relationships with its clients, builton trust and reputation. There is clearevidence of a lasting commitment onboth sides.”

Mr Castillero emphasised the vitalrole that flag states have to play in theconduct of quality shipping – an efficientship registry is an integral part of safe andsuccessful international maritime trade, hesaid. “If you want to judge the quality of aship register, look at its port state controlperformance (PSC) and rankings, look atits Flag State Performance Table ratings,look at its IMO Member Audit Schemeperformance, or even talk to the ownersand crew whose ships fly the flag.”

In difficult economic times, and indifficult markets, responsible ship ownersand operators are likely to be morediscerning than ever in their choice ofservice providers and business partners,he added. “So once again it is time forowners to be asking themselves if theirship registers are doing enough for them,and whether they are taking a proactiveapproach to problem-solving rather thansimply reacting to industry events, bywhich time it is often too late to take thesort of initiatives which can make thedifference between success and failure.”

Among recent initiatives by theLiberian Registry, are its exclusiveHarmonised Audit Programme, whichoffers ship owners the option ofcombining vessel certification for ISMand ISPS Codes and the annual safetyinspection into a single visit, with cost andtime savings for owners and operators.

“Liberia’s value-added serviceeliminates the need for engaging three

different auditors,” he said. “The key tobeing able to offer such services isLiberia’s global network of more than 300nautical inspectors and auditors, trainedexclusively by the LiberianAdministration, who are conductingISM/ISPS and MLC 2006 verificationand certification audits for many ship owners.”

Also recently, Liberia has introduced asophisticated programme to screenadvance notice of ship arrivals, as part of adetention prevention plan. Its AdvancedNotices of Arrival (ANOA) and ZoneNotification schemes are designed to beproactive in terms of preventing a vesseldetention by PSC or other inspectionbodies; they increase awareness of theship owners and operators with a view toensuring compliance with internationalrequirements, said Mr Castillero.

All Liberian vessels calling at US, EU,Australian and Chinese ports mustprovide an ANOA, which can be used bythe Liberian administration to assess theprobability of a PSC boarding.Appropriate steps can then be taken ifnecessary to prevent a detention. Liberiaalso informs ship owners and operators ofany PSC Concentrated InspectionCampaigns (CICs) and recommendsaction where necessary. “Based onfeedback from the various MoUs,Liberian-flagged ships have performedvery well during the CICs.”

There has also been the launch ofLiberia’s ‘FlagState App’ to enable owners,managers, operators and others tocommunicate and interact with the registryon a round-the-clock basis. From an iPhone,iPad or android device, users can read about

news and developments; access a globalmaritime events calendar and add events totheir calendar and share upcoming events;verify the authenticity of certificates anddocuments; search Liberia’s global networkof inspectors and auditors; validate seafarercredentials; submit an MLC ComplaintResolution Form; track the daily vesselpositions on an interactive world map of allLiberian-flagged ships; and quickly accessthe registry’s Facebook, Twitter andLinkedIn profiles.

When away from the office (if not themobile device) Mr Castillero said his mainhobby is spending time with his family.“But I also enjoy golf, boxing and Brazilianjiu-jitsu, a martial art and self-defencesystem which promotes the concept thatsmaller, weaker people can successfullydefend themselves against bigger, strongerassailants by using proper techniques, witha premium placed on performance. Youcould argue that those same principlesapply in business.”

What would he say is his personalapproach to work and to that elusivework/life balance? How would he advisethose coming into the industry?

“It is extremely difficult to achieve theoptimum life/work balance. The industryplaces such heavy demands on your timeand energies that there can be little roomfor anything else. When I am at work, mynumber one priority is making sure thatthe client is happy. When you arecommitted to service, it becomes yourworld. But one should never lose sight ofthe fact that the health and happiness ofone’s family must always be a priority.

“If I could offer any advice to peoplejust coming into the industry, it would beto listen and learn, to work hard, to havethe courage to seize opportunities whenthey arise, and not to take themselves tooseriously. There are so many experiencedpeople in shipping, and the knowledgethey have acquired needs to be passed onto a new generation. That new generationwill then add to the general knowledgebase as the shipping industry continues to evolve.” �

First Person


“If you want to judgethe quality of a shipregister, look at itsPSC performanceand rankings”

“It is extremelydifficult to achieve

the optimumlife/work balance”

20

How I workSMI talks to industry leaders and asks the questionHow do you keep up with the rigours of the shipping industry?

Anaval architect and marineengineer by trade, HenriquePestana has over 20 years’

experience in the maritime industry.

Beginning his career by setting up his ownsmall ship design firm, Mr Pestana has sincebroadened his skillset through roles atshipowning and shipmanagement

companies and is now Head of Design atpower and automation technologies firmABB. As Mr Pestana told SMI, his pastexperience in this field has been of greathelp to this role, which involves a great dealof engagement with ship designers: “Mytitle is a little bit misleading because wedon’t do ship design at ABB, we engagewith ship designers to create concept

HENRIQUE PESTANAHead of Design, ABB


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designs in order to test the technical andeconomic feasibility of our technology and solutions.

“My role enables us to bridge ourtechnology with different segments’requirements and to do this through shipdesign. It’s not only about fitting differenttechnologies into different types of vessel,it’s all about how that type of vessel couldbe designed differently to the optimisedtechnology and whether that will bebeneficial to the ship’s operation. My role isalso to challenge the organisation and toquestion whether we properly understandthe drivers of different segments.”

Mr Pestana does indeed hold anexcellent understanding of the needs ofdifferent segments, having worked as aFleet Superintendent at ship ownerTransinsular, where he realised “whatoperations are all about”. Later, he joinedGearbulk in Weybridge, UK, asNewbuilding Manager, where he stayed fora couple of years and “learned a lot aboutship operations and their drivers and howthis all relates to the design of ships”.

He then moved to manage a fleet of ro-ros and ro-pax vessels in Liverpool, UK,with Meridian Marine Management, wherehe was a Fleet Director. Mr Pestanadescribes this past role at Meridian as a“fantastic experience” and said: “It was myfirst experience with passenger vessels,which are more complex in some waysthan commercial vessels – for example, it’sas important to have the toilet systemworking as the main engine!”

Mr Pestana holds a Master’s Degree inNaval Architecture and MarineEngineering from Instituto SuperiorTécnico (IST), Lisbon, and an MBAdegree from Bradford University School ofManagement. Completing his MBAshortly after leaving Meridian, he said this

qualification has been of great help, in hisprofessional life and beyond: “I find ituseful, full stop. It’s a life-changing thingbecause it allows you to be less biased inevery aspect of your own life – you areforced to confront the reality of a situation.I would really recommend it. I believe weare living in an era when people decide totake an MBA in order to get a better joband to have better pay but I don’t think thatalways necessarily follows. But most peopleI know who have completed the coursehave found it useful in terms of changingthe way we think and in helping us toproblem solve.”

So, how is Mr Pestana putting theseproblem solving skills into action at ABB?He said one of the greatest challengesfacing the company is in understanding thedrivers and fundamentals of differentshipping operations and the need to beopen to potential solutions to improvethose operations. “For example, cruisevessels in the 1970s and 1980s saw achange from two-stroke engines to four-stroke engines, with a considerable penaltyon fuel consumption and they did that inorder to save space, which they then turnedinto more revenue through more space forpassengers. Optimising operations is notalways straight forward and it does requiresome open-minded attitudes. Whatmatters is to understand operationsbecause that’s how you makeadvancements. It’s not necessarily aboutnew technology, it can be about applyingexisting knowledge in new ways.

Revolutionary things can come from achange of mindset,” he said.

In recent times, ABB has announcedthat ‘profitability’ is the company’swatchword. Commenting on this, MrPestana said: “We are a profit organisation –we are owned by shareholders. But theother side of using profitability is that wewant to understand how our customersgenerate profit and to really understand this,we need to look beyond the obvious fuelefficiencies, fuel savings, maintenance costsavings etcetera, to understand how and ifwe can influence different areas.

“Our technology is very appropriate foricebreaking so we are very curious aboutthat and we already have vessels with ABBelectrical propulsion sailing in the NorthPassage. On the more conventionalmarkets, I think we are just living normalcycles. I am a little sceptical and unsure as towhat will happen with the container marketas I think there are still too many vessels outthere and I see ship owners ordering moreand more.”

Describing how ABB is using itstechnology to help civilian populations, MrPestana said: “We believe pressure fromsociety in terms of pollution in harbourcities will grow stronger. We have developeda concept called ‘Zero Emissions Port Call’.With today’s technology, it is alreadypossible for a container vessel to shut off allcombustion engines and use batteries whenthe ship is in harbour and to do all portoperations without any emissions. Withtoday’s technology, you can have batteries in containers onboard which you thenunload to be charged. Of all areas ofemissions which come from vessels, there is still one which has not been addressedand that’s smoke particles. That happens tobe the most harmful form of emission forlocal populations.” �

Shipmanagement: How I Work


“Revolutionary thingscan come from a

change of mindset”

http://www.spectec.net

22

Regional Focus: Singapore

The spectacular vista seen from theJewel Box restaurant at Singapore’sFaber Peak proved to be the perfect

backdrop to this year’s Sixth SingTel MaritimeICT Round Table debate. This annual debateis fast becoming a must-attend event amongthe shipping industry in Singapore as ownersand managers alike discuss and discover bestpractice when it comes to seeking ways tobetter utilise ICT to benefit their fleets.

And this year was no exception. Withthe theme of the debate centring onoptimising cost to achieve vessel operationalefficiency, the 11 Round Table panellistswere quick to enter the debating arena.Shipping needs to embrace the Smart Age –or the Maritime Industrial Internet as it hasbeen called. According to a McKinseyGlobal Institute report, over 50 billiondevices are likely to be internet-connectedby 2020, with an Engineering SoftwareReliability Group estimate suggesting thatup to $20 billion could be saved across100,000 ships through smart decisions onenergy efficiency, predictive maintenanceand downtime avoidance.

There are concerns that the shippingindustry is lagging behind in not embracingthe internet as fully as it should be. Thebenefits that could be derived from utilisingsmart applications onboard ship and usingemerging technology to increaseefficiencies in the way today’s ships areoperated and managed are not being fullygrasped by the industry.

The panel discussed the challenges andopportunities that exist in this area andfocused in some detail on what needed tochange for shipping to move fully into thetechnological age.

Maritime internet revolution andharnessing the power of the internet

Capturing the power of the internet iscrucial in driving forward innovation in theglobal shipping industry but for this tosucceed, mind sets have to change, the panelheard. Application developers need to workcloser with bandwidth providers to ensurewhatever solutions are being offered, meet theprecise needs of the shipping industry. Shipowners also need to understand where thetrue returns on investment lie as they considerthe investment options ahead.

However, the shipping industry’s trackrecord in embracing change is not good.While there are definitely champions andgame changers out there willing to pushforward the boundaries of what is the norm,there are still the naysayers who are content toembrace the status quo until they have nooption but to embrace change or they areforcefully convinced that the returns oninvestment are there to be earned.

According to Capt Tey You Huat, SeniorResearch Fellow at National University ofSingapore (NUS), only 15% of globalshipping is fully utilising the power of theinternet. There is an argument to say thatmany in the industry are looking to the

explosion in email usage as the scapegoat forhalting progress in internet usage. The panelacknowledged that while the introduction ofemail solved a lot of communicationproblems onboard ship and even now wasnot seen as a bad tool, had the technologicaltransition over the past 20 years been fromtelex to full blown internet onboard ship, asopposed to email, then the industry may beenjoying greater efficiencies than it currentlyis. The industry is at the mid-way point butthere is still a long way to go. Capt MichaelElwert, Director, Group Strategy, HR &Support at Thome Group of Companies,encapsulated the mood of the panel when heexpressed sadness that the shipping industrywas slow in embracing change. “There aredefinitely stars out there – owners andoperators who are at the forefront of theinternet revolution and use what is there totheir benefit, but as an industry we are verypoor. We are not using the full potential of theinternet in how we connect with ouroperations, either between the functionsonboard or between ship and shore.”

Vibhas Gaag, Vice President Fleets at BWFleet Management Singapore, stressed thathis company sat firmly within the 10%-15% ofglobal shipping companies currently believedto be embracing the internet. In order toincrease this percentage, one has to put aproper business plan together to persuadeship owners that such an investment is goodfor them. The take-up may have beenfragmented with some industry stakeholders


Moderator: Sean Moloney, Editorial Director, Ship Management InternationalPanellists: Bobby Khoo (1), Fleet Director, AET Tankers; Shaj Thayil (2), Global Head, Technical Services at APL;Vibhas Garg (3), Vice President, Fleets, BW Fleet Management; Capt Vijay Rangroo (4), Managing Director,MTM Ship Management; Capt Tey You Huat (5), Senior Research Fellow, National University of Singapore;Christopher Kirton (6), Managing Director, Norstar Ship Management; Hemant Pathania (7), Managing Director& Chief Operating Officer, NYK Shipmanagement; Charlie Tay (8), Deputy General Manager, Singa Star; LimKian Soon (9), Head, Satellite, Business Group, Singapore Telecommunications Ltd; Capt Michael P Elwert (10),Director, Group Strategy, HR & Support, Thome Group of Companies.

6th Singtel Maritime ICT Round TableOptimising cost to achieve vessel operational efficiency

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adopting full internet usage onboard andothers just managing with email, but thepossibilities are improving with more satellitesbeing launched and the development ofappropriate apps improving. Any futuregrowth in usage will depend on educationand leadership. Adding to that point, BobbyKhoo, Fleet Director at AET Tankers Pte Ltd,stressed that people have misconceptions thatwhen you have internet you can get data anytime you want. “Under the MLC if the Captis sleeping, do you want to wake him up? I amup for broadband, we have to disciplineourselves.” he questioned.

Controlling cost by leveraging availabletechnology beyond connectivity

With vessel operating expenses stillexceeding daily vessel hire rates in manyvessel sectors and with little sign of a freightmarket recovery in the foreseeable future,many ship owners are looking to whateveroptions they have to cut costs even furtherwithout damaging the tradeable andsaleable value of their assets. Establishing abroadband communications pipeline isonly the first step. Beyond loweringconnectivity costs, ship owners can reapmore savings by optimising availabletechnology to improve crew productivity,reduce workload, streamline processes andautomate workflows. But as Charlie Tay,Deputy General Manager at Singa Star,stressed that while the evolution ofcommunication technologies have resultedin major communication improvements,when it comes to the shipping industryleveraging these capabilities, not all shipowners are running big fleets with bigbudgets available “for fanciful technologies”.You only need to look at the fishing fleets inChina and Taiwan which have requirementsfor just voice, he said.

What is happening outside of theindustry to affect greater use of availabletechnology? Environmental and energymanagement requirements are also expectedto increase as the drive towards more hybridships enters the operating debate. Shipbunkering costs are getting more expensiveand environmental emissions regulations are


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becoming more stringent placing more emphasis on the need formore alternative shipboard energy sources such as solar panels andwind and other types of power.

How will all this affect our technology and communication?Many in the industry think it will strongly push communicationsneeds up, but this then brings in important issues such as managingthe data in an efficient way as well as controlling communicationscosts. As Michael Elwert stressed, the economies of scale factor willalso be stricter so boosting the need to be more efficient. Efficiency isnot just cost but data management as well as how owners andmanagers can run their operations in a more organised approach,taking into account the need for rest hour onboard ships. Budgetmeetings with owners and customers often result in theirexpectations for service delivery going up and up and themanagement fees going down. Capt Tey Yoh Huat said efficienciescan be improved and costs reduced if the right applications areproduced but this situation is still a long way off. Any efforts made toleverage existing technology to reduce costs have to take into accountother stakeholders such as ports with panellists arguing that there hasto be better ways to communicate between ship and shore thanthrough a late arriving email.

Capt Vijay Rangroo, Managing Director of MTM ShipManagement, shared his views on the cost versus efficiency ratio. Thedebate is less about the cost of connectivity but what are users gettingout of it. That is before you consider other challenges facing shipowners and managers when a ship goes from one satellite region toanother. It is not communication costs that are concerning theindustry, more the cost of the applications and making them fit intothe available bandwidth. As Vibhas Garg, underlined, his companydiscovered that if internet was not used onboard his company’s shipsthen his company would have needed to employ three more shore-based staff to carry out the additional tasks. “It is not thecommunication cost that is at stake; it is that we can’t take advantageof the internet.”

Need to better integrate offshoreand onshore data

Better integration of offshore and onshore data can help to drivegreater efficiency onboard but with the push towards greater use ofsensors onboard ship and the overflow of available data, more needsto be done to better capture and analyse this information. Today’sships are producing more data but what is being done with it; what isthe analysis? An analogy can be drawn with the explosion in officebound emails with many inboxes finding themselves crammed with400-500 emails per day – 95% of which may not be relevant! AsChristopher Kirton, Head of Ship Management at Norstar ShipManagement stressed, dealing unnecessarily with an influx of emailscan delay people doing the job they are paid to do with the addeddownside that emails can also make it easy for people to pass onresponsibility for a task to someone else. “So while the technology isimproving and we are looking to gather more data, the fundamentalquestion is what are we doing with the data and how can we use it to


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do our jobs better and make sure the ships aredoing their jobs better? I feel sorry for Mastersand Chief Engineers because they are littlemore than secretarial and administrative staffon ships these days and spend a lot of timeanswering queries from people,” he said.

The challenge for the industry is how thisnew technology could be used to improvecrew operations; drive in fuel savings andreduce vessel downtime. Hemant Pathania,Chief Operations Officer of NYKShipmanagement, is a supporter of Big Dataand his company has already implemented aproject called Sims2 whereby everythingonboard the ship is transmitted ashore,including exhaust temperatures, trim andspeed, lube oil feed rate. This enables theshore office to monitor a ship’s performanceand to seek ways to save money. While today’stechnology promises a lot, you have to ask thequestion whether there has been any notableincrease in productivity ashore from the daysprior to a computer sitting on everyone’sdesks? And the same is on the ships becausethe number of people has not changed norhave their requirements. So until the industry

can get some real monetary benefit throughmaybe a reduction in personnel, the benefitsof the smart age will be questioned.

As Hemant Pathania contended, today’sseafarers are multinational and come fromdifferent education systems. And while allowners want cheaper crew, some crew maynot be as competent as employers wouldexpect them to be. Therefore owners needimproved technology and systems to analysea vessel’s performance from shore. Yes we canmonitor fuel savings; monitor inventorycontrol and regulate downtime reduction butone of the main benefits is supporting theneed for strong crew competency.

Weighing up the technology optionsTechnology choices are available to

help ship owners better manage thecompromise between cost and quality.They have the flexibility and choice todeploy only what is required, for examplechoosing L-band instead of Ku-band. As thepanel discovered, when it comes tosatisfying a technological need onboardship, there needs to be more of ‘a connect’

between the bandwidth provider and theapplication provider certainly ifperformance is to be delivered at anacceptable cost.

A prime example of this is videoconferencing between ship and shore – anoften necessary aspect of shipmanagement,especially when it comes to staff appraisals,the panel said. But costs can rise sharplybecause the application provider is strivingto deliver the performance criteria in theavailable bandwidth. Using Skype tocommunicate from ship to shore is out of the question because it takes up the entire bandwidth.

Agreeing that bandwidth limitationscan affect the use of applications like Skypeonboard ship, Lim Kian Soon, Head ofSatellite at SingTel Satellite, said work has tobe done to develop applications that satisfybusiness needs yet uses less bandwidth. Hesaid: “In some of our voice applications, wehave deployed a very high compressionratio so the service doesn’t cost a few dollarsa minute but only a few cents per minute.We have also enabled a video surveillance


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application where cameras on all vesselsutilise very low bandwidth.

While some around the table pointed tothe constraining problems of limitedbandwidth onboard ship, suggesting that untilnew satellite goes up, the shipping industrywill have to live with what it has. Lim KianSoon was quick to stress that there was avariety of new technologies available but theyare dependent on what applications are beingoperated. Defending a suggestion from ShajThayil that it was up to established companieslike SingTel to influence the applicationproviders “because you know the bandwidth,what is available and how best to utilise it,” heagreed that the industry has to work with thebest of breed to put together a solution.

Future-proofing processes onboard shipIf there was one thing the panel all agreed

on is that the internet is here to stay butmaking today’s technology future-proof is achallenge when you consider how quicklytechnology is changing. What was cuttingedge 10 years ago is the norm now. Thetechnology is here but the question is how

much does the industry want to invest in it?Technology will continue to have to step upto the mark but the biggest problem ownersand managers have is choosing the rightonboard technological solutions. It is moreabout how can personnel work smarteronboard? Michael Elwert pointed to effortsunderway in Thome to give all of the crewon one ship, as a pilot project next year,iPads and smart phones to improve andsmarten up the way they communicateonboard ship. So instead of crewmembershaving to go around knocking on eachother’s doors, they can text work colleaguesand when a Master holds a meeting he cansend the agenda by smart phone instead ofprinting it out and pinning it on the messnoticeboard.

Saving money onboard ship is one thingand helping ships meet their obligations intransporting the cargo whether it is resolving acommercial query in the middle of the nightor ensuring a ship is meeting all of itsinternational regulatory requirements isanother. What is clear is that when theindustry talks about IT investments, they

need to put them into a business case toensure they are value added.

In ConclusionThe biggest dilemma facing ship

owners today is how to ensure the industrycomes out of this recession stronger andfitter than when it went into it. Costs have tobe kept under control and ships and theirprincipals have to be future proofed toensure the industry and everything it meansto global trade can be sustained. What wasclear from the debate was that the industryis moving quickly towards a world of BigData with the emphasis firmly on dataanalysis to the benefit of optimum vesseloperation. And with that comes a greaterreliance on ship-to-shore connectivity.

There is still only a small percentage ofship owners today utilising the power of theinternet but greater cooperation betweenairtime providers and software/appdevelopers in improving the developmentand availability of much-neededapplications to the market will provide thenecessary return on investment that someowners demand for them to see an



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Michael Elwert: “We will finalise anonboard HRIS system which has integratedthe databases between ship and shore.Through this, the Captain does the flightbookings and the system raises the email tothe travel agent automatically and raises theinvoice for the flight. We have updatedtraining matrix onboard – when the crew doonboard training it updates automatically sowe can see what training has been donewithout asking. We have payroll on thesystem. In the pipeline we also have an e-appraisal system we are looking at that isinterlinked and pushing for the smartphone/tablet onboard one of our ships. Wewill also focus on barcoding which is alsoupdating the planned maintenance systems.”

Hemant Pathania: “I don’t know howmuch this technology will reducemanpower but it has enabled us to workwith crew who will be less experienced inthe future. That is one of the advantages ofhaving the technology.”

Chris Kirton: “We have internetonboard all our ships and a token systemwhich is paid for by the company and we havededicated a certain amount of bandwidth tofree phone calls. We have a mixture of vessels

that are deep sea or coastal and we tend tosupply an internet dongle to our crew whenthey are on the coastal vessels. Movingforward, the internet is here to stay and youhave to accept it will be here. Most youngstersdon’t communicate by email and use instantmessenger and expect it to be there.”

Shaj Thayil: “There is no doubt that theinternet is a given thing onboard. Coming toapplications, one is about continuousimprovement on existing applications whichis an ongoing thing and another is to addressthis rising complexity of ships where you haveelectronic engines and where the ships aredifferent. It is the ability to address thisincreased complexity through informationexchange which we are trying to work on.”

Bobby Khoo: “How can we make useof 24/7 internet connectivity to make moremoney, generate more revenue? I agreeinternet is the only way, but discipline mustcome in.”

Vijay Rangroo: “I would like to see someform of compatibility regarding theequipment whereby I have a station and, likemy phone, I can have a two year contract.Because technology is moving so quickly it isunfair at this price for us to jump in as first user

advantage doesn’t work with the owner – hewants to be the last user.”

Vibhas Garg: “Our ambition for the next12 months will be to get video conferencingonboard all our ships. To be able to pick upenergy management data for which we arealready working with some vendors to installthe equipment and to develop software wherewe minimise emails and start picking up dataautomatically and distributing it across theoffices. Plans are there.”

Capt Tey: “Internet has become a hygienefactor, in other words, if you don’t have it youare no good and the younger generation all liveby the smart phone and are internet savvy. Theonly question is how do owners make use ofthis information and technology? How do weprovide the experience factor back to the crewonboard? Then the expectation of the crewcan be lowered.”

Charlie Tay: “We are talking about alot of new solutions to improve efficienciesbut we must look at the ultimate cost to putthese features into play. VSat is the solutionbut all these applications will come at afuture cost to you. If an owner is keen to putthese applications we are looking at VSat asa total solution.”



embracing of the internet as economicallyviable. Efficiency is not just cost but datamanagement as well as how owners andmanagers can run their operations in a moreorganised approach. Technology will play abigger role in helping to bridge this gap butlateral thinking and an open mind as to howsoftware technology and the internet can bedeveloped to achieve this goal is crucial toshipping really starting to see benefits.

Time and time again we hear that costof communications is not the issue. Whatis at stake is how can communications bebest used to enhance and improveonboard operations? This is not justlimited to the day-to-day movement of theship and cargo but also ensuring the shipand its crew meet their internationallegislative obligations. Ships have tobecome more compliant with global and

regional regulation and that puts a lot ofstress and burden on the senior officersonboard. This situation will not go away;if anything it will get worse. But with thecorrect data analysis and onboard vesseloperational monitoring then theadministrative process can only beimproved, so reducing the burden on thecrew and taking out the presence ofpotential human error. �

What are the panel’s priorities over the next 12 months?


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It is not often that the leaders in global third party shipmanagement and theirshipowning counterparts congregate in one room but the inaugural InternationalShipowning and Shipmanagement Summit, held this year in Singapore, offered that

precise opportunity and the debate was fierce. The important role played by the niche manager; the benefits of ship owners and ship

managers working more closely together as well as how best to project shipping’s imagefurther afield, were all major topics under discussion.

Industry heavyweights such as Peter Cremers, CEO of the Anglo Eastern Group;Roberto Giorgi, President of VShips; Capt Dirk Fry from Columbia Shipmanagement;Rajaish Bajpaee, CEO of Bernhard Schulte Shipmanagement; as well as Claes EekThorstensen, President of the Thome Group were brought together for the first time in yearsto give their views and comments.

They were joined in the sessions and debating panels by key players such asInterManager; Bibby Ship Management; SingTel; MTM Ship Management; the SingaporeShipping Association (SSA); Braemar ACM Shipbroking; Videotel and YoungShip.Delegates and invited guests then joined Bibby Ship Management at the Prelude RooftopBar for the end of Summit Cocktail Reception. �

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ISSS bringsmanagers andowners togetherin Singapore

1/ Dirk Fry deep in discussion

2/ Bibby COO Chris Stone

3/ Thome's Claes Eek Thorstensen

4/ ISSA President Abdul Hameed Hajah

5/ InterManager President Gerardo Borromeo

6/ Roberto Giorgi

7/ Peter Cremers from Anglo Eastern and

Seaspan's Rob Grool

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33Issue 52 November/December 2014 Ship Management International


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Market Sector: Training


In the maritime industry, the ethos is asimple one – you cannot put a price onsafety, only on accidents.But often a major cause of incidents is

human error, and that is what the Danish-headquartered Maersk Training is nowfocusing on within its simulated facility,MOSAIC (Maersk Offshore Simulation andInnovation Centre).

It is turning from the more traditionalways of training to putting people in ‘real-life’ situations to see how they work underpressure – the ultimate test in seeing whatthey have learned and ensuring they worksafely and efficiently.

“What we are doing here is we aremoving away from what training was like afew years ago – it used to be you trained askill, and now we train the person,” saidRichard Lightbody, Communications Co-ordinator at Maersk Training.

“That is because the person is valuableto the company and so much of what goeswrong in life comes down to the actiontaken by somebody and so we’ve beenputting a little bit more behind certificates –we don’t train for certificates, we train forcompetence and so a growing number ofour courses have a soft side to them. It’sfunny to watch hardened seafarers being putthrough situations where they’ve got toopen up a little; but more because thenature of a crew onboard has changeddramatically over the last 20 years.”

MOSAIC was launched to improve anddevelop the skills of the offshore maritimesector and now has an adjoining facility forthe oil and gas industry.

It has very much been in demand,especially due to the disastrous consequencesof the Macondo oil well explosion in 2010which left 11 people dead and caused amassive oil spill in the Gulf of Mexico.

“We are focusing on the offshore marketand as far as we can see it will be beneficial forall parts of the offshore market because wecan do this for drill ships and offshore supplyvessels (OSVs) because we combine theengine room and the bridge and then take theleadership skills, the theory and then use thesimulators,” said Karsten Haegg, ChiefInstructor Maritime, Maersk Training.

MOSAIC has four full mission bridgeswith 360° views and they are all interlinked soif you have an exercise going on for, say,offshore supply vessels, you can have fourOSVs in the same scenario, looking out foreach other at the same time.

“We’ve been doing it with the oil and gaspeople for a while now and it’s a ‘steal’ fromthe air industry because they have longrealised that people react differently to thesame situations and the outcome can be verydifferent,” explained Mr Lightbody.

“We give them a programme, set themoff and then we introduce the odd littlething here or there – we don’t say ‘how doyou get out of this situation’, we let themfind themselves in a situation to see howthey react.”

“For a long time we have been running,for example, bridge resource management(BRM) courses where bridge crews come toa simulator and are then put under somestress to see what they do onboard. What weare doing here is to combine all the

departments. It is an enhanced way of doingthis,” said Mr Haegg.

MOSAIC II brings together all theremaining elements to complete the picturefor all offshore, particularly crews from thesame department and those performingcross-functional duties such as EmergencyResponse Teams and those managing majoremergencies, both on and offshore.

“What they are doing is, across the week,having people skills or management classes,then trying things out as differentdepartments but then we try to combine thedifferent departments and exercises and haveone big exercise they are all involved in.”

This high level way of training has beenrunning at Maersk for just a year now and MrHaegg says it has been well received by clients.

“We have had very positive feedbackfrom course participants and also fromowners and clients.”

Though this way of training is currentlybeing focused on the offshore sector, the‘human factor’ element is one which couldeasily transfer into the training for theshipping industry, according to Mr Haegg.

“We do not yet have any of these specialenhanced courses for bigger vessels, such ascontainer ships – we do have normal BRMcourses but once again it will be possible to dothe same for these types of vessels.”

Is that the plan – to roll more ‘humanfactor’ type courses out across theshipping sector?

“Only if we get requests for that becausewe are focusing on the offshore market,”said Mr Haegg. “So, if we get a request, forinstance, from a liner department for

The humanfactor

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container vessels, it would be possible.However, for the moment on the engineside of our simulator we do not have acontainer vessel engine, so we would haveto invest in that, but it would be possible.”

There are also more safety issuesassociated with the offshore industry.

“If we take, for instance, a containervessel sailing from A to B and somethinghappens in the engine room, it will stop andwill lay there and drift and they will havesome time to think about what to do. If youtake a drill ship, drilling all the time, ifsomething happens on that then it will startto drift off position and it could be that weend up with another Macondo distaster.

“The operation is more delicate in theoffshore market but then again we can saythat a container vessel leaving port, if thingshappen at that time, then it also requires thecaptain and officers to have good leadershipskills to take the correct decision.”

The simulator experience is all filmedand then used during the debriefing.

“They debrief on thehuman side, just as muchas the technical side,”said Mr Haegg, whoexplained thattechnically somethingmight have beenfollowed correctly butthen something extramight be thrown intothe mix to change things.

Six years agoMaersk Training was anin-house facility but it is

now totally open and most of the peopletrained are non-Maersk. Training takesplace not just at the company’s Danishheadquarters but all over the worldincluding the UK , US, Brazil and India.

How does Mr Haegg see trainingdevelop over the next couple of years?

“Team training will be big. We have alot of new people coming into theindustry and they need that kind of teamspirit. We are lucky to have clientsthinking in the same way and we aremoving towards entire project-specificsimulation with team training.”

He added: “The main aim is, ofcourse, to give people competences onthe job they are doing because all of themhave a piece of paper telling everybodythat they are allowed to do this but it isputting it into practice.”

Maersk Training firmly believes there isa growing understanding of the need for thenon-technical aspect of training – whatsome people refer to as soft skills.

Jesper Nielsen, Peoples SkillsConsultant at Maersk Training, who runscourses for the offshore market onleadership, said there were six non-technicalskills they were teaching – situationawareness, decision making, teamwork,communication, leadership and stressmanagement.

“What you do most of the time is youpromote the best specialists but notnecessarily the best leaders and leadership is askill that you need to train like everything else.You need to know how to develop people.”

Are people surprised by the way theyreact themselves?

“I think they have a lot of eye openers,”said Mr Nielsen.

Not only does it make sense for thecompany and save money in terms ofaccident avoidance, he believes it alsosaves money in that people stay longer atthe company.

“All people want to develop and do agood job. If you are a good leader you cancreate a good working environment.”

Mr Haegg said with the big demand forskilled personnel in offshore and also forlarger vessels such as container ships,training was paramount and it was also agood way of attracting and retaining crew.

“The good people want to improve ontheir skills so it’s not always money thatmakes a job attractive. They also want to bein a company which will provide sometraining and where they can developthemselves within their areas. It also makesthem feel valued if someone is going toinvest in them.” �


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Market Sector: Technical Management

The need to offer an entirely bespoke solution for technicalmanagement cannot be overstated, particularly when acontrasting range of vessels are being looked after by the same

shipmanagement company. Bibby Ship Management has a diverse technically-managed fleet which

includes container/RORO vessels, tankers, bulk carriers, accommodationbarges and a variety of offshore vessels. Chris Stone, Chief Operating Officer,said: “We currently provide technical management from offices in Liverpool,Singapore and Aberdeen. Onshore, we employ 10 technical superintendentsacross these three locations, supported by a number of vessel managers, fleetpersonnel officers and support staff.

Mr Stone said: “Given the diversity of both our managed fleet and ourcustomer base, a ‘one size fits all’ solution would not allow us to provide thegreatest level of service to our clients. Each vessel has its own specifictechnical requirements, each client has different expectations and needs, andproviding a bespoke, tailored solution to each party means that we can truly


Tailoredto fit

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Market Sector: Technical Management

get to the heart of what is required. This, inturn, allows us to form long-term, sustainablepartnerships with our clients and a level ofstability that is often lacking in our industry.

When asked what are the greatest issuesand challenges facing those working in thefield of technical management, Mr Stonesaid: “Safety is always our primary concern,and unquestionably should be everybodyelse’s. Complexity brings challenge, andwith today’s vessels being undoubtedlymore complex than ever, along withincreased regulation, our main focus ineverything that we do is to ensure the safetyof the people aboard and of the vessel itself.There is no compromise on safety.

“Budget control is also vital; we oftenwork to tight margins and ensuring ourbudgets are properly controlled is crucial. On-budget dry dockings, the biggest element ofour maintenance budget, are paramount tothis end. With vessel operating costspredicted to rise over the next two years, thiswill only become more of a challenge.”

With the ‘distance’ between ship andshore having been reduced dramaticallythrough communications, Mr Stoneexplained how this has benefited Bibby ShipManagement’s clients: “In the simplestterms, the advancement of ship-shorecommunications means that we are able tomaintain a constant link between our shorestaff and the vessel. Gone are the days ofhaving to wait for a vessel to dock before weknow of any issues; we now have detailedvessel performance data at every stage of avoyage and can prepare for maintenancebeforehand, turning problems aroundquickly and minimising vessel downtime.This undoubtedly saves our clients valuabletime and money.”

Mr Stone added that having an effectiveplanned maintenance system (PMS) inplace is essential in order to ensure clientsare provided with “an efficient, safety-conscious technical management service, aswell as maintaining an acceptable level ofcost control”.

“We operate a suite of computerisedplanned maintenance systems across ourtechnically-managed fleet, giving us a level

of flexibility and versatility in the range ofvessels that we are able to manage. As such,when we take a ship into management, weare able to adopt the PMS that that vesseluses, minimising delays and ensuring asmooth handover.

“Our technical superintendents aretasked with ensuring that the PMS has beendeveloped to take into accountmanufacturer recommendations and surveyrequirements, while vessel chief engineersare responsible for ensuring that all routinemaintenance activities are undertaken inaccordance with the plan.

“The systems that we use mean that bothour seagoing and shore-based staff can haveaccess simultaneously, ensuring that we have acomplete grasp of required maintenance at alltimes, regardless of where the vessel is. Thesystems also require the maintenance of alllifesaving, fire-fighting and other emergencyequipment, specifically identifying these as“critical” and further strengthening ourcommitment to safety.”

Duncan McLennan, Technical Director,Columbia Shipmanagement, agreed on theimportance of planned maintenance systems:“At Columbia Shipmanagement, we utiliseelectronic planned maintenance systems andthese allow for a uniform maintenance systemto be applied to vessels, which are able to storeeffective amounts of historical informationregarding maintenance, allowing accuratetrends to be identified and rectified. Thesesystems are also easily audited and candemonstrate compliance with requirementsto any interested party.”

Columbia Shipmanagement (CSM)provides technical management services forapproximately 180 vessels, with four of the

company offices taking responsibility forthese. The company’s Cyprus office, headedup by Andreas Hadjipetrou, Maurice Bakerand Duncan McLennan, is responsible forapproximately 80 of these vessels and theTechnical Department is split into wet anddry fleets led by four fleet managers.

Mr McLennan added: “There is nosingle solution to technical management andit is obvious that the requirements of oneowner may differ significantly from those ofanother. Therefore it is extremely importantthat the client is provided with a servicefitting their expectations and requirements.After all, technical management is in reality aservice industry and a satisfied customerbecomes a repeat customer.”

Describing the greatest issues facingthose working in the field of technicalmanagement, he added: “There are anumber of significant challenges facingtechnical management at present. Amongthese we can single out areas such as newlegislation i.e. ballast water treatment, wherea significant financial burden will be placedon owners to comply with legislation at atime when end users are continually pressingfor reduced freight rates and fuel prices andother associate costs are high. Ensuring thatcompliance is achieved in the most costeffective manner is particularly challenging.

“Another challenge is to secure, train andmaintain a crew supply adequate to meet thedemands of today. Technology is advancingand becoming more complicated togetherwith a regulatory environment of everincreasing complicity and this presentschallenges to attract skilled seafarers to whatis an arduous career.”

Mr McLennan also discussed how themanner in which seafarers communicatewith vessels has changed drastically over theyears and the impact this has had ontechnical management. “Seafarers whostarted their careers communicating by telexand with the assistance of radio officers arenow able to telephone and email their officesat the touch of a button.

“It is not only the speed but the sheervolume of information transmitted whichchanges the relationship here. A closer


“There is nocompromise on safety”

Chris Stone, ChiefOperating Officer,

Bibby ShipManagement

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Market Sector: Technical Mangement

partnership between the ship and officemeans that more accurate information flowallowing cost savings in areas of purchasingwhere there is less room for error whenordering spare parts for example.Additionally, expert remote assistance andsupport is readily available in the event ofequipment malfunction which in turn leadsto less downtime due to failure ofmachinery.”

When asked how technicalmanagement can assist shipping companiesin improving their buying power, MrMcLennan said: “Sound technicalmanagement is a powerful tool to improveshipping companies’ buying power. The useof electronic planned maintenance systemsallows effective planning of maintenanceacross a fleet which in turn identifies areaswhich would benefit from bulk purchasingof spare parts as opposed to individualorders. For example, planning andcoordination of dry docking can achievesignificant savings where block bookingscan be achieved with a preferred shipyard.Early identification of requirements forlegislative compliance can allow an actionplan to be created leading to cost effectiveimplementation rather than waiting for thelast minute rush.”

Ecoships, a fully-owned subsidiary ofNewport Shipping Group, is making stridesin green technical management, havingintroduced a customised version of the SixSigma DMAIC approach to process andperformance evaluation, in order tooptimise the energy-efficiency of vesselsunder its management.

The technique has already resulted inEcoships’ managed ships benefiting fromup to 15% greater fuel efficiency, resulting insubstantial reductions in CO2, NOx andSOx emissions.

“We specialise in eco-friendly and fuel-efficient shipping tools, techniques andtechnologies,” said General Manager Capt.Aykut Yilmaz. “This is our core strength.Our three primary goals are safety, fuelefficiency and minimum ecological impact.Through our suite of software tools, we canachieve these goals. For us, ‘eco’ refers toboth ecology and economy, so being ‘eco-smart’ really pays off. We provide shipowners with the most economical solutionfor optimising their operations.

One of the first vessels to benefit fromEcoships’ eco-smart approach is the25,000dwt bulk carrier Bulk Rose. The vessel,delivered from Turkey’s Cicek Shipyard in2011 and taken under Ecoships managementin January 2014, was initially consuming840g/dwt of fuel per day. It now consumes750g/dwt/day.

Ecoships used the DMAIC techniqueto identify the best technical andoperational energy-efficiency solutionsavailable, such as trim optimisation andweather routing software, along with de-rating engines and retrofitting hardwaresuch as rudder fins, shaft generators andwaste heat recovery systems.

“Bulk Rose was fitted with a shaftgenerator and we had access to most of thesignals and measurements. But weidentified that a minimum 10% reduction infuel consumption could be achieved byoperational optimisation,” explained Mr Yilmaz.

“After analysing the data, we decided toretrofit a shaft power torque meter andmonitoring solution for better analysis of thedata along with optimal voyage planning andweather routing systems. We then fed all ofthis data into our software for real-timeanalysis of fuel consumption. The result wasthat we were able to improve energyefficiency by 11%.”

“Our focus is firmly on safety andoperating the vessels with zero harm to theenvironment, at all times maintaining theintegrity of the hull and machinery, keepinga close hands-on approach to OPEX, andchartering the vessel in the most profitabletrades. Our DMAIC approach achievesthis,” he added.

Six Sigma DMAIC, a set of techniquesused to Define, Measure, Analyse, Improveand Control operational performance andprocesses, was first developed by Motorola in1986 and has now become central to a widenumber of companies’ business strategies. �


“A satisfied customerbecomes a repeat

customer” Duncan McLennan,Technical Director,

ColumbiaShipmanagement

http://www.transamerica.com.uy


http://www.csm-sg.com

http://www.csm-d.com

http://www.columbia-shipmanagement.com

42

Regional Focus: Hong Kong

With strong links to the mainland, particularly to the Pearl River Delta (PRD),Hong Kong serves as a strategic gateway to China. However, with more shipsstill being managed from its shores than any other location, and with many of

the largest and oldest ship management companies headquartered there, its future as animportant global shipping hub is assured. And that is before you factor in the significant costadvantages it has over its competitors.

“In overall terms Singapore has taken the lead in Asia and is the undisputed ‘shippinghub’ of the region,” said Bjorn Hojgaard, Chief Executive Officer of Univan. “But Hong Kongtoday has the advantage of being a cheaper location to operate from than Singapore, andwith a similar attractiveness to the human capital that is so important for any serviceindustry,” he said.

As Mr Hojgaard contends, Hong Kong’s strength is its “truly cosmopolitan view of theworld, attractiveness for talent as well as having a currency pegged to the US dollar. This isimportant because it means you know your cost relative to your revenue, freeing you upfrom surprises, he claimed.

“Hong Kong is a ‘world city” with a well-established pro-business climate, rule of law anda strategic location as a gateway to China, but in the longer term, if there were anysignificant changes to the ‘one country, two systems’ status of the city then thisposition could be under threat,” he stressed.

Confident that the Hong Kong maritime cluster will remain asstrong as ever given its long tradition in shipping as well as the support ofa large group of local ship owners, ship managers, and other shipping-


holds on to itstreasured statusHong Kong

43


related activities, Bernhard Schulte Shipmanagement ChiefExecutive Officer and long-time Hong Kong resident RajaishBajpaee is mindful of the benefits that a supportive government canhave on an industrial sector.

He told SMI: “What Hong Kong needs, perhaps, is a morefocused industry strategy, one which will demonstrate theGovernment's commitment to preserving Hong Kong's majormaritime hub status based on its underlying strengths of maritimeheritage, strong entrepreneurial culture, skilled and productiveworkforce, strong value of ethics, good governance, effective rule oflaw, proactive flag state administration, a major international tradingand financial centre, and above all being part of China with itsconnectivity to the hinterland. Geographical proximity to otheremerging markets also adds to its overall competitiveness,” he said.

“Overall China is extremely important to Hong Kong becauseoutside of shipping, Hong Kong is hugely dependent on changes inthe larger China story,” said Mr Hojgaard. “The shippingcommunity in Hong Kong has benefited from its proximity toChina for more than a decade now, but shipping is a global businessand on a stand-alone basis Hong Kong is a proud home for many ofthe best names in shipping. Freight rates in most segments continueto be dismal but perhaps the rather conservative and traditionalowner profile of Hong Kong-based companies makes the city lessexposed as balance sheets here are normally very strong and able toweather the cycles.”

But it is the areas of cost and productivity which are starting toput Hong Kong apart. Mr Hojgaard again: “Today, costs in HongKong are comparable to many other shipping hubs in the world.Hong Kong is perhaps 15%cheaper than Singapore butcost is not the main reason

for Hong Kong’s success. The availability of talent and the workethos of Hong Kong workers are among the highest in the world.Hong Kong employees are very productive and go the extra mile,making them a very valuable work force.”

Keith Mullin, CEO of Gulf Oil Marine, believes that cost is stillan issue for Hong Kong: “Cost, undoubtedly, is one of thechallenges for Hong Kong, especially compared to other mainlandports. However, the relatively high cost has secured a number ofintangible value advantages to the shipping industry. First andforemost, it has driven the marine industry (in fact all Hong Kongindustries), towards higher value. In short, the higher cost is offset byincreased value and productivity. As such, Hong Kong hasn’t lost itscompetitiveness despite its higher costs.

“With service quality and government efficiency, Hong Kongports are comparatively strong in offering high service frequency,high productivity, streamlined customs, strong intellectual propertyprotection, quality assurance and experts in shipping to bothmainland China and overseas. And these are all critical reasons forship owners, especially cargo owners, choosing Hong Kong. Ofcourse, with the drive toward higher value, the industry is able toattract highly qualified resources here – and as one can imagine, avirtuous cycle thus begins.

Mr Mullin remains realistic about the relationship betweenthe giant industrial powerhouses of Hong Kong and Singapore.He told SMI: “Both operate and specialise in different segmentsof the marine market. And they have surprisingly significantcomplementarities; when one thrives, it is often not at theexpense of the other, something we have witnessed throughoutthe many episodes of upswings and downswings in the marinebusiness. We have certainly seen the inroads made by Singaporebut at the same time, we’ve also seen the Hong Kong marinecluster grow in other segments.”

So with this in mind, what does he believe are Hong Kong’sweaknesses and what are its strengths? And with the

globalisation of shipmanagement and ship owning, is thefuture for clusters like Hong Kong under threat?

Mr Mullin again: “With strong links to the


OverheardPeter Cremers,CEO, Anglo Eastern Group

44

mainland, particularly to the Pearl River Delta (PRD), Hong Kongserves as a strategic gateway to China supported by its free flow ofinformation and capital, transparent custom clearance services, efficientcommunication, legal and financial systems, simple tax structure,service quality and government efficiency.

“Although Hong Kong faces intense competition from themainland ports, especially PRD ports such as Yantian and Shekou, itstill retains its competiveness in the cluster with its unique strength. Ithas a huge variety of outstanding high value-added services sectorssupporting the marine industry. As a global metropolis, Hong Kong hasattracted international marine industry expertise in a variety of areas,such as ship brokerage, ship insurance, charterers and law firms, etc. TheCity is an ideal platform for the marine-related stakeholders to network,exchange ideas and explore new opportunities. As such, with moreglobalisation, Hong Kong will offer even more synergies between port,shipping and value-added service, a direct result of having all thesehigh-quality shipping manpower resources in one place,” he said.

Vikas Grewal, , Head of the Business Division at FleetManagement , believes that Hong Kong’s weakness lies in that it doesnot market itself as much as cities like Singapore.

“What disrupts clusters in not globalisation itself but the will andextent of resources that governments put into making those clustersbusiness friendly to the maritime industry. Clusters that innovate andremain tuned to what the industry requires have little to fear,” he said.

Mr Bajpaee again: “Hong Kong is, and has been, home to majorinternational ship management companies and it is how the localindustry with its resilient and responsive characteristic adapts itselfto the challenges of globalisation, and overall changing market andgeo-political scenarios, to make itself relevant and competitive inwhatever positions it finds itself.”

So where can Hong Kong see its business opportunitiesmaterialising from? How important is the China element to what itcan offer and how is the industry dealing with the continuing globalfinancial crisis?

“Hong Kong has its distinct advantages in that it is closer toChina —a huge and fast growing ship owning market and it isalso closer to Japan — the largest ship owning market,” arguedVikas Grewal.

“It remains an important financial hub of Asia and has worldclass infrastructure to support businesses. Moreover, Singaporetoday with its strong currency and high cost of living does not offerany significant cost saving. I feel that for the shipmanagementbusiness, Hong Kong and Singapore are important hubs to haveyour offices in. To be in only one of the two would bedisadvantageous,” he stressed.

“China’s 12th Five-year Plan placed strong focus on thecountry’s domestic logistics industry; that will definitely have spill-over benefits to the Hong Kong maritime industry. Under theCloser Economic Partnership Arrangement (CEPA), it will be fareasier for Hong Kong marine service providers to set up business inthe mainland, creating more opportunities especially for small tomedium-size ship companies to develop deeper links with mainlandChinese businesses, hence enjoying the direct effects of thesouthern China’s economic dynamism,” Mr Mullin said.

“The 2008 global financial crisis has heightened the awarenessthat the centre of shipping and trade business has moved fromEurope to Asia. Hong Kong has been able to adapt to and has takenfull advantage of that shift. The crisis, in fact, pushed the industrytoward greater efficiencies; firms surviving this prolonged crisis willindeed be far more resilient.” �

Ship Management International Issue 52 November/December 2014Ship Management International Issue 52 November/December 2014

“When it comes to growing our shipmanagement business,we have to be careful that we attract the kind of people who paythe right levels and endorse our quality standards as there is arisk that some clients will use you for your name, so we have tobe very choosy.

“Hong Kong has a number of cost advantages over itscompetitors with the main advantage being that its currency islinked to the US dollar. While companies are not moving back toHong Kong we are seeing tonnage moving back. This is all goodnews for this region; ship owners are here and the market is here.”


http://www.angloeasterngroup.com

http://www.wilhelmsen.com/shipsservices

47

Slater onmoney

Paul Slater is Chairmanand CEO of First

International Corporation


Shipping is a businessnot a capital casinoShipping is a very capital intensive business dominated by private

companies that compete aggressively on a global basis. Mostshipping companies are privately owned, do not report their

activities in public, raise equity on a private placement basis and havevery strong banking relationships. But during the last 15 years there hasbeen a surge of new companies going public in New York and this hasattracted the attention of various types of investment funds who hadhitherto not invested in shipping. The main types are Private Equityfunds and Hedge funds which manage investments for Pension fundsand other Institutional groups as well as wealthy private individuals.

The PEs and Hedge funds have various investment time framesdepending on the individual fund, but the norm has been three to fiveyears and with a return expectancy of 15% to 20%.

The boom shipping markets of the last decade produced someextraordinary shipping profits that further encouraged these funds toget deeper into shipping in the false belief that these shipping profitswere a new norm. The problem is that the profits mainly came fromselling ships or their construction contracts and not from anyconsistent cash flow or charter income from operations, as the volumeof new ships delivered or under construction vastly exceeded thedemand for cargo movements in nearly all sectors.

By the time the bubble burst in 2008 there were dozens of newcompanies going public with the support of the PE funds and theshipping banks which had also experienced their own boom.

The collapse of the global financial markets had little immediateeffect on shipping because of the lag time of the newbuilding contractsand the fact that most of the new ship owners traded their ships on thespot markets instead of on long term time charters. Most of the publiccompany investments that have been made over the last five years havegenerated few if any profits, because the ships have kept trading in thespot markets or haven't been delivered yet. The spot freight marketstoday are still not producing rates that do other than cover operatingexpenses and some interest on debt, and even then do not provideincome for the entire year. Why because there are too many ships of alltypes and little or no increase in demand by cargo interests.

Also we still have companies raising money to speculate onnewbuildings, Scorpio, Ardmore, DHT, and Salt etc. No period cover isbeing obtained by these companies as major charterers are notprepared to commit to owners who may sell the ships tomorrow, andmeanwhile operate them as cheaply as possible. So when do the PEboys wake up? They all track each other so any exits are likely to triggerothers and the ships will not be sold to new PE/Hedge funds but intothe S&P markets which are much more knowledgeable and effectivethan Wall Street.

The recent collapse of the share prices of most publicly tradedshipping companies and the very high volumes of trade in their shares,highlights the fact that most of these companies have traders asshareholders and not institutions. They are not experienced in shippingand only interested in the price volatilities of the shares.

Furthermore the almost total collapse of the German KGinvestment markets and their shipping banks has indicated howvulnerable the public US equity markets for shipping are. Given thesefacts, shipping companies with substantial debt, large newbuildingorders and no period charter cover will be vulnerable to even greatershare price reductions. This will cause serious defaults of their debtfinancing, force the sale of existing assets, cancellation or sale ofnewbuilding contracts, and yput the companies into bankruptcy.

Major dry-cargo buyers are determined to not let freight rates getback to the dizzy heights of 2005 when 60% of the landed price of ironore in China was in the freight. Cargo suppliers in the dry markets areequally concerned to contain freight rates as cargo demand is dropping.

The oil markets have their own issues with crude oil prices sharplydeclining, with the arrival of large quantities of US domestic crude (andgas). Also with the growth of new refineries in the Middle East, Indiaand China and closures in Northern Europe the seaborne movementsare changing.

This is not to say that the private shipping companies are notsuffering but they are better able to focus on the long-term issues ofoperating and maintaining quality ships for the carriage of cargoes andnot the variability of ship values. �

48 Ship Management International Issue 52 November/December 2014

Heartbeat

Joint venture to tackleseafarer stressSeafarer stress is to be tackled by a new

joint venture, which aims to expandthe support services available to

maritime personnel.March on Stress and Human Rights at

Sea will work together to help build resilienceand support psychological wellbeingincluding providing a bespoke package ofTrauma Risk Management (TRiM) for themaritime industry.

TRiM is a peer support system whichseeks to build resilience by keepingemployees functioning after traumatic eventsby providing support and education to thosewho require it. By training practitioners at anoperational level throughout an organisation,TRiM aims to identify those who are notcoping after potentially traumatising eventsand ensure they are signposted to professionalsources of help.

Professor Neil Greenberg, Clinical andManaging Director of March on Stress, said:“We are delighted to work together withHuman Rights at Sea (HRAS) and themaritime community to safeguard thepsychological wellbeing of maritimepersonnel.

“While only about 3% of the UKpopulation are likely to suffer from Post-Traumatic Stress Disorder (PTSD),personnel working in high-risk or traumaexposed organisations experience muchhigher rates of PTSD.

“We recognise that while HRAS worksto promote the fair and humane treatmentof individuals who work as seafarers,unfortunately there will inevitably be timesthat mariners’ mental health will beadversely affected by their work.

“The important association betweenMarch on Stress and HRAS will help tobuild resilience for individuals and themaritime industry through theprevention, detection and treatment ofoccupational and operational stress,including PTSD.”

David Hammond, Founder of HRAS,said: “The HRAS partnership with Marchon Stress is yet another step forward infurther developing the expanding scope ofHRAS support services within themaritime environment and specifically forseafarers who have been the victim ofabuses during their employment. This newservice also prepares maritime businesses inidentifying, training for and dealing withemerging psychological issues.

“I am delighted once again to beworking closely with an internationallyrecognised partner whose pedigree andexperience intimately supports the HRASaim and objectives. Without suchcollaborative partnerships HRAS wouldnot be able to expand its services toseafarers and deliver tangible support tothem on a global basis.” �

The International Seafarers'Welfare Awards 2015 havebeen launched. For seafarers,

the backbone of the industry, welfareservices and facilities can be a lifelinewhen working away from home for longperiods of time.

These awards recognise excellencein the provision of welfare services byshipping companies, welfareorganisations, ports and individuals - onship and ashore. They showcase goodpractice in the industry, and highlight thecommitment and dedication shown bymany - in the service to seafarers.

With nominations now open,seafarers are encouraged to recognisethose that have shown them exceptionalservice this year. Seafarers are welcometo nominate for the award categories:Seafarers' Centre of the Year; ShippingCompany of the Year; Port of the Year;and The Dr Dierk Lindemann WelfarePersonality of the Year.

The International Seafarers' WelfareAwards 2015 will be held at theInternational Maritime Organisation inLondon on 9th June 2015 and will bepresented by Mr Koji Sekimizu,Secretary General of the IMO.Nominations close on 2nd February2015. Visitwww.seafarerswelfareawards.org to findout more and to make a nomination. �

Spotlighton seafarerwelfare

http://www.seafarerswelfareawards.org

Arange of new remote marinetelemedicine kits has beenlaunched by US-based

communications company DigiGone,providing real-time teleconferencing withemergency medical service professionalsusing satellite or terrestrial wireless kits.

The DigiMed kits, which enable face-to-face consultations between patients anddoctors, are said to be ideal for ships andoffshore oil platforms as well as aviation

and land-based applications. Thereare three versions with the

most advanced –DigiMed Plus –providing Bluetoothsensors including a digital

thermometer, bloodpressure cuff, blood glucose

meter and other medical devices,

The SecureChat software makes itpossible to send encrypted high-qualityreal-time video over satellite channels ormobile links, using a small fraction of thebandwidth needed for other commercialvideo services.

“The low-cost portable DigiMed kits,packaged with our SecureChat software,will revolutionise telemedicine, enablesuperior remote doctor-patientconsultation services and potentiallyprovide huge cost savings to companies,”said Michael Dunleavy, President ofDigiGone.

“DigiMed provides a must-haveaffordable medical lifeline for people wholive, work or travel in remote areas.”

The compact, lightweight, portable kitscome in small ruggedized soft cases whichare easy for transport and storage. �

49

Maritime Medical: Heartbeat


New telemedicine kits are launched



http://www.ygeiamedical.com

The World Health Organization’s International HealthRegulations (IHR) Emergency Committee met for thethird time recently to discuss the Ebola outbreak in West

Africa and reiterated its recommendation that there should be nogeneral ban on international travel or trade.

It was felt a general travel ban would be likely to cause economichardship and could consequently encourage more people to moveabout uncontrolled from affected countries therefore raising the riskof the spread of the deadly virus.

The Committee also highlighted the importance of keeping airtravel and the movement of ships as normal as possible, includingthe handling of cargo and goods, to and from the affected areas, toreduce the isolation and economic hardship of the affectedcountries.

This recommendation has been backed by many including theLiberian Registry which has supported the IMO by stating thereshould be no general ban on international travel or trade due tothe Ebola virus.

Scott Bergeron, CEO of the Liberian International Ship &Corporate Registry, the US-based organisation which managesthe Liberian Registry, said: “Liberia supports the IMOrecommendations wholeheartedly and believes that shippingshould continue to operate safely and efficiently, and trust thecommon sense of owners and charterers in these difficult times.

“The Ebola virus continues to claim thousands of innocentvictims, mainly in West Africa, many in Liberia. The LiberianRegistry is deeply saddened at this tragic loss of life, although itsships and crews, and its operations are not directly affected by thevirus in any way.

“A number of ship owners have contacted us to express support forthe Liberian people, and some have helped to provide much-neededsupplies to affected areas. We will be continuing to co-ordinate moreefforts of this kind over the coming weeks.”

A number of countries have recently introduced entry screeningmeasures including Panama, where the Panama Canal Authoritysaid it would monitor the last 10 port calls of all vessels arriving inthe waterway – a major artery in global trade.

It has issued an advisory to all shipping agents,owners and operators stating a number of actions hadbeen implemented for the prevention of the Ebola virus,including maintaining close contact with MINSA’s (Ministryof Health’s) Maritime Sanitation Unit, which will be alertedabout any vessels arriving in Canal waters whose previous 10 portswere from an Ebola affected country.

If an Ebola case is suspected onboard then the MINSA’s expertphysician’s opinion must be received by the Panama CanalAuthority (ACP) before the Canal personnel boarding and if Ebolais diagnosed, the vessel placed into quarantine until MINSAauthorities declare it safe for boarding.

The US, Brazil and Argentina are among other countries whohave tightened port entry procedures with the US Coast Guardsaying it would screen individuals coming into the country off shipsfrom Ebola affected areas.

In the UK, Public Health England has been helping to roll outenhanced screening for Ebola starting at Heathrow airport, thenGatwick airport and St Pancras Station (Eurostar) in passengersthat Border Force officers identify as travelling from the Ebola hotspots of Sierra Leone, Liberia and Guinea but no plans are yet inplace for ports.

A statement from the Port of Dover – Europe’s busiest ferry portand the UK’s second busiest cruise port – said: “The recent decisionby the Government to screen for Ebola at certain major UKgateways is a direct response to the current crisis in West Africa.Whilst the Government says the risk to the UK is very low, the Portof Dover will support whatever measures the Government deemsappropriate for the port to ensure it remains a secure place foreveryone travelling in and out of the UK.

“Being one of the UK’s most important international gateways,we understand the need for vigilance. As with all matters relating toborder security, we will continue to liaise closely with theresponsible agencies, including UK Border Force and Public HealthEngland in order to maintain the highest levels of security.”

It also appears that many people who have to travel the globe forwork, are also wanting reassurance they will be safe.

no need for travel or trade banEbola

Maritime Medical: Ebola


UK-based risk consultancy Drum Cussac said it had seen asignificant rise in requests for bespoke Travel Risk Assessments thatspecifically include the risks associated with the Ebola virus disease.

With no indication the rise in Ebola cases will be halted in WestAfrica, it says companies are forward planning to keep their travellersprotected globally and ensure businesscontinuity.

Drum Cussac’s Travel RiskAssessments outline the key risks and offermitigation measures tailored for andappropriate to each client’s businessrequirements.

The Drum Cussac InformationServices team delivers 24/7 analysisservices from Drum Cussac hubs inEurope, the Middle East, Africa, Asia Pacificand North America and the team worksclosely with clients to provide customisedresearch, analysis and intelligence tosupport client risk management priorities.

Chris Dell, Director InformationServices, said: “The cost to companies toassist their personnel can become a severe

business risk if they haven’t already taken steps to mitigate suchevents. We often see rises in specific travel risk assessments as mediafocus turns to world events that have a potential to disrupt businesscontinuity and we are delighted to assist with plans for riskmitigation.” �

Maritime Medical: Ebola



As if their “to do” list was not longenough, the 11 members of thepolitical forum of the International

Union of Marine Insurance have just addedtwo more tasks.

These relate to the controversialproposal for a Trade in Services Agreementwhich could have a significant impact onshipping and insurance; and to theperceived need for the transfer of shiprecords as a condition of class wheneverthere is a sale from one owner to another.

At any one time, vigorously led by itschairman Helle Hammer, the politicalforum is lobbying on well over a dozentopics of moment to the maritime world.Ms Hammer leads IUMI’s determination toensure the viewpoints of marine and energyunderwriters are heard clearly in decision-making circles, including contributing its

expertise to the work of committees of theInternational Maritime Organization.

More than 500 marine underwritersfrom many countries gather annually forIUMI’s annual conferences – there havebeen 140 of them to date, the latest in HongKong (the first time the event was onChinese soil). The get-together brings outall the key issues of the day, but “we wantedIUMI to be more than just a conference,and to take on a more active role in relationto many issues,” Ms Hammer told SMI. Thecreation of the political forum has broughtIUMI closer to other interests in themaritime world: “Obviously there arelimited resources within the administrativestaff of IUMI, but several organisationswork with us, so it has made sense for us tojoin forces and use the common voice wehave at IMO and other organisations.”

While most participants in the shippingsector shy away from describing theiractivities as political, IUMI is refreshinglyfrank about the purpose of its endeavours. Itdecided in May 2012 that what was missingfrom its committee structure was a ‘politicalforum’ to lend it more firepower. IUMI,comprising 48 national associations, seesthe relatively new body as much more thanyet another committee.

The establishment of the politicalforum complemented a salvage forum setup by IUMI the previous year under thechairmanship of Nick Gooding, a highlyexperienced former London cargounderwriter who since the beginning of2014 reinforces the lobbying as the insurers’alternate representative at IMO.

Ms Hammer is ideally placed to lead thepolitical forum. Much of her career has been


IUMI clear in makingindustry views heard

Business Viewpoint: P&I & Law

By James Brewer


bound up with politics, having aninvaluable insight into the workings ofgovernment gained when she was a statesecretary – a kind of extra-parliamentaryvice-minister – in Norway’s trade andindustry ministry, and later in the financeministry. She then became part of a teampromoting Norway’s business drive in fourcities in the US, heading the Houston officewith a focus on oil and gas, before returningto Oslo to take up her current post asManaging Director of Cefor, the NordicAssociation of Marine Insurers.

The political forum has its origin inthe initiative of IUMI immediate pastpresident Ole Wikborg, a director of theBergen-based Norwegian Hull Club, whopushed for reform under what is known asthe IUMI 2015 Strategy. The forumreports to the governing IUMI executivecommittee, headed since this Septemberby new IUMI Chairman Dieter Berg ofMunich Re. It “is a very hands-on,working forum,” said Ms Hammer. “We gothrough lots of IMO documents, andfilter through the issues of relevantconcern. Our members represent severalnational insurance associations and we allwork on different issues. What we take upis also very much driven by what peopleraise with us.”

With such a geographical spread ofmembers, the forum meets during theannual IUMI conference, and during everyspring meeting of the executive committee,and the attendance record is notably high –even though much of the business is carriedout by email exchanges.

One of the newer priorities is the‘disappearance’ of ship records in the courseof sales transactions. These includedocuments relating to engine wear,machinery, steel thickness, spares,drydocking, and bunker and lubricating oil.

The paradox is, said Ms Hammer, “ifyou buy a car, you will ask for its servicerecord; if you buy a ship, you will notnecessarily get this. It is not uncommon forthe technical manager of the sellingcompany to take the reports with him. Thatis something to do with the proprietary

rights that the previous owner will haveassumed, and we can understand that.

“Usually the argument is that they havebuilt their own maintenance system andprogrammes, so you do not leave that toyour competitor. That means that class doesnot necessarily get the information eitherand we think there is something wrongabout withholding the maintenance andservice history of the vessel. We are trying tosee if there is some way of protecting theproprietary rights of companies, and gettingthat information out. Again, IACS is key,and I know that they are looking at somerules for procedure.”

Removal of records, which some peoplemight suspect can be a cover for inadequatemaintenance, has already been highlightedby among others Cefor and the LondonJoint Hull Committee.

The political forum is meanwhilemonitoring as best it can the behind-closed-doors Geneva talks between 50 nations fora global Trade in Services Agreement. TISAhas been initiated by the United States,European Union and Australia, “to addressmajor and fundamental barriers to trade inservices affecting the United States and theglobe.” It will seek to widen dramaticallymarket access, foster substantialderegulation and ease cross-border dataexchange, affecting financial servicesincluding insurance and its marine andenergy segments.

The forum can take credit forintensifying debate over the issue ofcatalytic fines in ships’ engines: thediscussion “is moving in a very positivedirection at the moment,” observed MsHammer. “Everyone had talked aboutchanges encouraging low sulphur fuel froman environmental perspective. We knowalready there are some problems with theoperation and how it is treated onboard. Wehave met with the relevant officials of IACSand national associations: they nowconfirm that they will look at unifiedrequirements in treatment systems. Theywill establish a working group to look atthat, and advise industry to participate in it.IUMI will be invited to be onboard and that

would not have happened if we had notbeen vocal on this.

The big disappointment for the forumso far has been the rejection of an initiativethat came from the IUMI loss preventioncommittee. “We tried to get the memberstates of the Paris Memorandum ofUnderstanding on Port State Control torelease ship risk profile and companyperformance information from the Equasisdatabase which is used by insurers in theirrisk assessments.” Such information hasbeen gained from the Paris New InspectionRegime which is designed to increaseoversight of all merchant ships calling intoEuropean ports.

IUMI made it clear that informationfrom Equasis was an important supplementto information from class, surveys, fleetrecords and known company performance,and said that further data including detailsof ship detentions would help them in theirunderwriting approach and risk assessment.IUMI’s formal letter on the subject,followed up by telephone and emailexchanges, met with a firm refusal from themember states – and there was alsoopposition from ship owners.

“This is an issue we may want to revisit,”said Ms Hammer, “as the Tokyo MoU has,as of 2014, established a similar regime toParis, and we have not yet been in anyformal contacts regarding the release oftheir information.”

Current priorities for the political foruminclude the European Commission August2014 study on civil liability for offshoreaccidents in Europe; Arctic sailings; thePolar Code, an IMO instrument that willprobably become mandatory in 2015;places of refuge for stricken ships; ballastwater management (“we are not quiteconvinced by all the new technologies,although new regulations are already inplace in the US”); EU-wide mutualrecognition of classification societies tocarry out statutory surveys and certificationon behalf of member states; and fire-fightingcapability on containerships, anothersubject about which the political forum hasbeen in talks with classification societies. �


55


Marine underwriting agentJonathan Jones hassucceeded in his aim of

spurring widespread debate about the“unfair” charging practices of someunderwriters – although his attempts toput the practitioners on the spot have sofar been thwarted.

Ahead of the 2014 conference of theInternational Union of Marine Insurance,Mr Jones wrote an open letter to its oceanhull committee urging the introduction of avoluntary code of market conduct for thehull and machinery underwriters who leadon policies. The way some of those leaderswrite business is, he alleges, taking unfairadvantage of the underwriters who follow(i.e. take a lesser share of a given risk) onpolicy slips, and leaving in the dark clientswho operate and manage ships.

Mr Jones in his 40 years in the market,first at Lloyd’s and then as an independentagent and consultant running his owncompany JLJ Maritime of Greece and

Hong Kong, has a reputation foroutspokenness and innovation – his latestventure is a facility for ships 20 years old andover, which are often spurned byunderwriters on age grounds.

The IUMI committee, chaired by LarsRhodin of the Swedish Club, rejected thecode of conduct proposal from Mr Jones oncommercial, legal and confidentialitygrounds, but Mr Jones says he will persist inhis campaign, dismissing the committee’sreasoning as flimsy.

“The leader owes a duty of care to the follower,” Mr Jones told SMI. “If theleaders thought that they could be suedby the followers that would bring greateraccountability. I think that if the capitalproviders [those who put up the moneyto enable marine and other portfolios of business to be written] realised that the leader had a duty of care, it mightmake them think. It would certainly make the leading underwriter act more responsibly.”

Mr Jones says that some followers havemisconceptions about the role of leader andoften subscribe to a policy because theyconsider a particular leader has a goodreputation. The core of the problem is notin London, asserts Mr Jones, but elsewherein places where “underwriting agents havenot been brought up on the concept ofUtmost Good Faith [a duty in insurancecontracts under English law] or similarseemingly archaic, but in reality vital to theconduct of business, concepts of behaviour.”

He is particularly worried about thedominant position of Scandinavian insurerswhich he says control at least 40% of theworld’s P&I market and have come toinfluence significantly the hull and machinerymarket. He asks rhetorically: “What, incomparison with English law and practice, isknown of Nordic law and practice by a Greekor Hong Kong ship owner?”

The London market, the oldest andlargest marine insurance provider, does notcharge following underwriters. Elsewhere,


Insurers thwart Jones’‘Code of Conduct’

proposalsBy James Brewer



“the amount of money that certainunderwriters make from their followingunderwriters in claims handling charges isdramatic, and I wonder if ship owners areaware of the money these insurers aremaking – because if they were they wouldsurely want some rebated to them! Further,regarding those who charge claims handlingfees, I wonder if they pass the recovery ofthese monies back to their reinsuranceunderwriter?”

Mr Jones said that earlier in 2014 hehad occasion to obtain a legal opinionunder English law, regarding the “follow theleader” clause. The opinion clearly statedthat subject to the wording of the clause,followers were bound to follow thesettlements of the leader. But if the leaderagreed a settlement which was not strictlywithin the terms of the contract or if he hadnot acted with due diligence in agreeing thesettlement, then the leader might be heldliable by the followers for recompense.

Some international underwriters oftenwere paid for claims handling by followingunderwriters. Such fees could be substantialand make a tremendous difference to theoverall profitability of the accounts of theleaders. “Do these payments enhance theleading underwriter’s duty of care andshould the the method of calculation ofsuch fees be disclosed to followingunderwriters?” asked Mr Jones.

Questioning whether there was an“abuse of dominant market position” byScandinavian insurers who write both hulland P&I, he said that such insurers hadreintroduced RDC (collision) and FFO(fixed and floating object) claims forcoverage by hull underwriters withoutvisible increased premium whilstmaintaining the deductible at the samelow level as granted by P&I underwriters.This move in his view appeared to behighly beneficial for underwriters whooffer both types of cover, as it not onlyreduced significantly the exposure ofP&I but provided another element for theunderwriting concern to charge thefollowing underwriters for claimshandling fees.

“Leaders who charge the followersclaims handling fees, which are often inaddition to the enhanced premium levelthey receive as the leader, seem to be in awin-win situation,” said Mr Jones.

Mr Jones illustrated by means of arecent claim of $2m what happens with aclaims-charging leader and a non-chargingleader. He said that the Scandinavian leaderoutsourced services to consultants, lawyersand surveyors which cost $108,000, andadded $160,000 “for work on the case.”With enhanced leader’s premium plus othercovers and P&I, he would be sitting pretty –compared with a London-style leader whowould pay the claim plus share of $108,000as would the followers.

Conflict might arise where the leaderhas a modest share of the hull insurance but100% (as is normally the case) for P&I, saidMr Jones. Take salvage: if you have 100% ofthe P&I and only 10% of the hull, you mightbe keener to have a claim in the hull bookrather than P&I. Hull underwriters naturallywould naturally want a stricken vessel takento safety for repair, whilst P&I underwriterswould want the vessel towed well away fromthe coast, to avoid expensive pollution.

Further, Mr Jones suggests that whileP&I underwriters do not as general rulemake General Average contributions,General Average should no longer beconfined to hull and cargo but shouldinclude P&I interests as contributors.

Expanding on his theme, he asked:“What is the position if leaders reinsure asignificant proportion of their share withoutthe knowledge of the followers – shouldthis be disclosed? What if leaders enjoy alevel of deductibles such that they haveminimum or no exposure to a claim, butcharge claim handling fees to followers?”

Mr Jones believes there is considerablesympathy for his viewpoint among the 150or so active hull underwriters globally, incontrast to the standpoint of “only” 13members of the International Group of P&I Clubs.

Followers needed to be fully informedof the reason leaders decide to leadparticular accounts and in the interest of

transparency the premium the leaderreceives should also be disclosed. After all,premium is the all important in motivation.

Fleets are underwritten these days byvarious combinations of underwriters fromLondon, Scandinavia , Austria , India ,China, Hong Kong , Singapore ,Switzerland, France, Italy, Germany, Russiaand Japan. Every underwriter’sunderstanding of the role of the leader andthe leader’s benefits varies in great measure,said Mr Jones.

Under his proposed Hull Leaders Codeof Conduct, all leaders would have theoption to sign, and the followers could takecomfort from those leaders who did signand make up their minds about those whodid not.

Mr Rhodin insisted that it was theship owner who decided through hischoice of underwriter what kind ofemergency response and claims leadingcapability were required.

Replying to Mr Jones’s assertions viaopen letter, Mr Rhodin underlined thatcasualty handling has become verydemanding because of the increasedtechnical complexity of vessels, mediaattention and the need to deal withauthorities in several jurisdictions. It wasessential for the assured to have onedecision maker to relate to over the manycomplex issues that arose in an emergencyand during the claims settlement process.There were not many insurers who had theorganisation, expertise and experienceneeded to support the assured.

Some Scandinavian companies wereamong those who had comprehensive in-house claims resources, while othersoutsourced. The following capacity woulddecide whether to sign up on the basis ofthe quality of the claims leader.

Mr Rhodin warned that full disclosureof terms and conditions of participatingunderwriters would be contrary tocompetition law. He said that theInternational Marine Claims Conferencesome years ago drafted a Leaders’ Code ofConduct, only for it to be met with a lack ofmarket enthusiasm. �

http://www.swedishclub.com

5858


Ship operators have long drawn comfort from the fact that asystem is in place to ensure that after a casualty, the costs ofproceeding with the voyage and getting the cargo to

destination will be allocated between all the parties. That system is General Average, incorporated into contracts

of carriage usually through the York Antwerp Rules in a versionagreed in 1994.

A botched attempt to update the Rules itself became acasualty: the embarrassing 2004 revision which has largely beenignored because of the way it was introduced and because itsterms upset ship owners.

With an opportunity on the horizon to restore a measure ofharmony, the failure of the 2004 version has served to underline theimportance of consensus, says Kiran Khosla, Director of LegalAffairs at the International Chamber of Shipping.

Despite the worries occasioned by the failure of the 2004Rules, the system of General Average encased in the 1994 Ruleshas survived. Better still, hostility to it from underwriters seemsto have softened.

Although the commercial underwriters’ continuedmisgivings were aired during the annual conference this year inHong Kong of the International Union of Marine Insurance, froma ship owner’s perspective there appeared to be grounds for mildoptimism that with constructive discussion, the parties may beable to arrive at an agreed position which addresses theunderwriters’ concerns and leads to reduced costs but whichdoes not undermine the fundamental principles underlying the system

Going back 20 years, IUMI initially called for General Averageto be abolished, but backed down when it recognised the difficultiesof doing away with a concept embedded in the law of mostmaritime nations. Instead, IUMI began to argue for incrementalchanges to be made to the 1994 Rules.

Time is now on the side of those who are reaching out forconsensus. Attention will be focused on what new rules if any will beadopted at the 2016 conference in New York of the ComitéMaritime International, a convention of national maritime lawassociations that is the guardian of the Rules.


Time is right for harmonyover General Average

By James Brewer

5959


After rejecting at its meeting in Beijing in October 2012 whatone average adjuster described as “rather half-hearted” proposals forrevisions, the CMI decided to form a working group to carry out amore detailed review.

In her presentation to IUMI, Ms Khosla set out with exemplaryclarity what General Average means to the industry as a casualtymanagement system. It allows action by a ship’s master to manage thecasualty without delay; the master’s independence of action does notprejudice the interests of any party, as all will contribute to the risk andcost of dealing with the casualty and resuming the voyage. The cost willbe borne by all parties involved in the venture pro rata according to thedegree of interest they each have in it (value of ship, cargo, bunkers,freight), as long as the casualty was not the fault of the ship owner.

One of the great benefits of General Average, said Ms Khosla, isthat it is understood by all parties and this is important at times ofcrisis. It means that action – often urgent – is not delayed, a risk thatwould lead to even greater losses, by the need to start negotiations,as the rights and obligations of everyone are already set out.

It means also, she said, that in the event of danger the masterdoes not have to make a choice between preserving the interests ofthe ship or some or all of the cargo. The master can concentrate onthe navigation and safety of the vessel, taking whatever decisions arenecessary in the interests of all.

Surprisingly, CMI promulgated the 2004 Rules without thesupport of shipowning interests as represented by ICS, BIMCO,Intertanko and Intercargo. What annoyed the ship owners anddoomed the document were that its provisions no longer permittedcrew wages at a port of refuge, and salvage expenses to berecoverable in General Average.

Yet again, when a set of proposals was tabled at the CMI in 2012designed to ameliorate these provisions in the 2004 Rules to winship owners’ agreement, there was no proper consultation with ICSand therefore no opportunity to consult with national ship owners’associations and their shipping company members, recounted Ms Khosla.

This time however it seems that there will be space forconstructive discussion on the controversial areas: salvage, wages ofcrew, and financial issues (commission, interest, and currency).

The 1994 Rules allow apportionment of salvage paidindependently, for example under a Lloyd’s Open Form contract.IUMI describes this as a duplication of the costs of obtaining asalvage award and that therefore salvage should be excluded from aGeneral Average adjustment. “We have pointed out however thatnot all ship owners’ expenses are necessarily included in a salvageaward, or some expenses might have been incurred after a salvageaward is obtained,” said Ms Khosla. “These cases are not many butthe sums involved can be significant.”

A proposal taking account of ship owners’ concerns wouldretain salvage in the Rules and exclude it only in cases such as wherethere is an award of the Lloyd’s Open Form type and where therewould be no adverse impact on owners.

Seeking to remove the allowance for paying crew wages in a port ofrefuge, underwriters argue that this is a loss caused by delay, andcontrary to the general principles of the Rules. They want shipownersto recover such costs from insurances such as loss of hire cover.

Ms Khosla responds that allowance of wages while a ship is at aport of refuge and undergoing repairs is a long-standing, acceptedprinciple of General Average. It is a direct and quantifiableconsequence of the casualty and the General Average act and inmany cases, the amounts can be significant. Furthermore, it isneither relevant nor appropriate to refer to other insurances thatmight be available to cover this loss since not all ship ownersnecessarily have these insurances.

Ms Khosla said: “We are consulting with our members on theseproposals and it is too early to say what the consensus opinion willbe. The early signs are that ship owners wish to retain thefundamental principles of the General Average system.”

On the financial issues, which include reviewing the provisionson interest, “my feeling is that our members will be more receptive tochanges.” For instance, a fixed rate of interest looks outmoded, butmore discussion is needed to find a solution that would reflectcommercial interest rates.”

The ICS legal director said that at present there is widespreaduniformity of General Average adjustments on the basis of the 1994Rules, “which are functioning well and are widely known andapplied. The last thing that is needed is a third set of Rules that fail.”

One of the thorny questions raised during the IUMIconference was of responsibilities in relation to uninsured cargo– said to be up to 20% of all cargo, and accounting for a great dealof the cost incurred in casualties. Underwriters asked howuninsured cargo could be made to bear its share of the burden.While there was no clear answer, Benson Chiu, Hong Kong-based managing director for Greater China for Richards HoggLindley/Charles Taylor Adjusting, appealed to IUMIunderwriters: “Please sell more cargo insurance!”

Adding his voice to the plea to restore consensus in 2016, MrChiu said General Average was an “effective part of the casualtymanagement tool box, provides an allocation of significant costs andis internationally understood, and reserves rights so that legal debatetakes place after the casualty not during it.“

Carrie Poon, Head of Claims at Hong Kong branch of AXACorporate Solutions, told IUMI why reservations persisted. Shecomplained that “cargo has no say in General Average. It is alwaysdeclared by master, crews or shipowner.”

It was unfair because cargo at no fault had to share in it, and hadto provide a guarantee before delivery. It gave insufficient time andmaterials to review policy coverage, causation, and defence, and theadjustment was often a protracted process.

There was a lack of information on adjustments, and a lack ofstatistics – Ms Poon asked how many declarations were made in ayear, how long did they take to conclude, what were their causes, andhow much was paid by the respective interests? �


http://www.europeanshippingweek.com


Business Viewpoint: Classification

Diplomacy is surely one of the most important qualitiesrequired for a successful chairmanship of IACS, theInternational Association of Classification Societies.

“The IACS chairman has to be diplomatic, and has to find theright balance between members sharing technical know-how andmembers keeping knowledge for themselves,” said PhilippeDonche-Gay, head of Bureau Veritas’ marine and offshore divisionand current IACS Chairman. “And the focus is on technical matters– when we meet, we are not allowed to discuss anything that relatesto commercial or financial matters.”

When IACS came under scrutiny six years ago, following theshock raids of the five European IACS members by EuropeanCommission competition inspectors, the apparent contradiction(or balancing act) within the association was laid bare.

On the one hand, IACS members are expected to cooperate onrules and technical information in the pursuit of better safety at sea.On the other hand, the inspectors at the time were focusing onphrases such as ‘common rules for tankers and bulker carriers’, leadingsome to suggest that this would be the end of IACS as we knew it.

But turn the clock forward, and IACS has successfully driventhrough its Common Structural Rules for tankers and bulkers, is ontrack to create new requirements for stronger containerships, and isfocusing on initiatives to improve passenger ship safety in the wakeof the Sewol tragedy – among a myriad of other projects.

Mr Donche-Gay said the entry into force of the newharmonised CSRs in July 2015 will be the biggest priority of his

chairmanship. Individual classification societies are now in theprocess of submitting their new rules, based on these unifiedrequirements, for IMO approval. This project, which started 12years ago, has been an impressive achievement, he said.

“This is where you see the power of IACS. This sort of projecttakes time – harmonisation requires discussion and agreementbetween the equivalent of several hundred engineers.”

However, IACS’ work to strengthen container ships, which hesaid is the second topic on his list, is being tackled in a different way.

“The reason why the CSRs are possible is that bulkers/tankersare a relatively mature market segment. But container ships, in termsof technology and design, are still pretty much a moving target. Thesize of container ships has almost trebled in the past 10 years, if notmore so – therefore you still have lots of changes that may require anadaptation of the rules.”

The market clearly required some position from IACS in thissector, he said, following first the MSC Napoli and then the MOLComfort casualty.

Hence IACS members are working to adopt additionalrequirements covering the strength of large container ships and alsoextending to additional functional requirements such as loadingpatterns. The work is also taking into account the progress of theJapanese authorities’ investigation into the MOL Comfort. “This is avery big piece of work that will lead not to Common Rules but tomore precise and stronger Unified Requirements relating to thestrength of these big ships,” said Mr Donche-Gay. “It is a very big

First classcooperationBy Felicity Landon


► The fallout of the Sewol tragedy in April included theresignation of the Korean Register’s CEO, Chon Young-Kee.

A spokesman for KR told SMI: “The Sewol tragedy hasprompted the Korean government to amend its existingregulations to strengthen coastal passenger ship safety. The focusis on areas that have been identified by the authorities as, so far,being contributory factors in the accident – i.e., cargo securing,life-saving appliances, etc.

“We have also reviewed our own rules, regulations andprocedures to identify any areas for improvement concerningcoastal passenger ship safety and have taken relevant measuressuch revising our guidance for car ferries and the provision oftraining for seafarers serving onboard coastal passenger ships.”

He added: “The IMO has also been actively discussing waysto improve coastal ferry safety, with the focus on developingguidelines for ship owners when considering the purchase ofsecond-hand ferries; guidelines for undertaking conversions offerries; and guidelines for when ship owners are considering achange of route for domestic ferries.

“KR has been actively monitoring the work undertaken by IMOon this issue and has submitted its comment on the second draftGuidelines to the IMO project team for their consideration.”► Situations such as the Sewol incident affect everyone as an

industry, said a spokesman for Lloyd’s Register. International


piece of work and will probably be finished by the end the firstquarter 2015.

“This is important because of the events that happened; ofcourse, there have been a lot of articles in the press and it isimportant we find a way to reassure the industry of what is beingdone. Giving more visibility is part of this – it relates again to thetechnical legitimacy of IACS. And it is an example of where webalance competition and cooperation.”

Each time there is some sort of incident or casualty in thisindustry, it triggers work and also the inevitable ‘you should havedone it before’ comments, he points out. And that takes him on to thesafety of ferries and cruise ships, another area of priority for IACS.

“This is a segment that is particularly important because it isabout the lives of people,” said Mr Donche-Gay. “The CostaConcordia triggered lots of new initiatives and the role of IACS hereis to work and support the IMO on new regulations.”

Ferries are a particularly emotive topic following the tragedyof the Sewol. “These ships are very sensitive in the way they arebuilt; by definition, if anything goes wrong then stability can beaffected in a very dramatic way and the safety factor goes downvery fast,” he said.

The crucial message is that great care is needed whentransforming such ships, to ensure that stability is not affected, hesaid. “But the problem is, with so many ferries worldwide, many ofthem are not classified by IACS and in some cases they are beyondIMO jurisdiction because they are in domestic waters. So theinitiative of the IMO secretary general is to put an additional focuson incentivising national flags to impose strong regulations in theirown territorial waters. The objective is to produce guidelines forAsian countries particularly to adopt and implement, because that iswhere you have the biggest quantity of ferries. There is a pattern ofnot taking care of stability issues when doing conversions. And veryoften it is overloading of ships – if you are operating at twice abovewhat you are supposed to, you will have issues.” �

1/

2/


requirements are clear but differ fordomestic operations, he said. “Lloyd’sRegister provides services that fit withlocal requirements and the needs of theoperator and we support domesticadministrations with advice gained in ourinternational capacity.”

It is clear that human element issuesplayed a major part in recent casualties,from the Sewol to the Costa Concordia, hesaid – “and how we are tackling this in themarine industry remains a challenge forus all”.

LR is offering services providing newinput taken from other industries inenhancing risk mitigation in operationalprocedures. “Companies such as P&OFerries and BC Ferries are activelypromoting developments in these areas.”

A recent highlight was the completionof the Lynceus project, a collaborationinvolving LR to develop a distributedwireless sensor network system that willenable a ship’s safety officer or team to

monitor the location of each passenger orcrew member for safe evacuation, and tomonitor in real time the status and spreadof the emergency, such as floor or fire.

Lloyd’s Register is also focusingstrongly on the safe application ofalternative fuels/power for the ferrymarket – notably LNG, methanol andbatteries. It is currently supportingTransport Canada with the introduction ofLNG to its domestic ferry fleet.

In the wider market, LR hasintroduced its Gas Fuelled Readiness(GR) notation, in response to industrydemand for clarity over options for gasreadiness. This gives different levels ofreadiness to use gas as a marine fuel.

“While LNG as fuel has been adoptedin projects that make commercial sensealready, like Northern Europe ferry routes,

most deepsea players who are interested inthe potential of gas-fuelled operations arenot yet ready to commit to LNG fuel butwant to have the option to adopt gas as afuel in the future built into newbuildingprojects,” said the spokesman. “GR willform part of LR’s rules for gas-fuelled ship,and so reflects all safety and operationalrequirements to meet the global standardsfor gas operations.”

LR’s largest LNG-as-fuel applicationto date is the Viking Grace.►ClassNK has released new

technical rules and guidance for thesurvey and construction of inlandwaterway ships. These includerequirements on survey, material, welding,hull construction, equipment, stability,machinery and electrical installation, fireprotection, load line and other factors.

As the Japanese class society hasexpanded its global activities, particularlyacross South America, the number ofinland waterway ships on its register hasalso grown, to about 15% of all vesselsclassed over the past year alone.

“The inland vessel sector is a veryimportant part of ClassNK activities,” saida spokesman. “ClassNK has over 400inland vessels, accounting for over900,000 gt, on its register. However,within the past month alone, we haveregistered an additional 30 barges, with atotal gross tonnage of roughly 38,000, inline with these new rules. The rules andguidance have received a favourableresponse from owners and operators.

“ClassNK has always had rules inplace for inland waterway vessels.However, with the number of thesevessels on our register growing each year,we felt it was necessary not only to updateour rules and guidance but also to provideshipbuilders and the industry with astraightforward way of implementingspecific rules and guidance to ensure thesafety of their fleet. �


1/ Philippe Donche-Gay, head of Bureau Veritas’ marine and offshore division, IACS Chairman

2/ Yellow ribbons in remembrance of the victims of the Sewol ferry tragedy which sunk on April 16, 2014


http://www.marinesoftware.co.uk

65

Marine Propulsion

There are substantial capital or long-term cost and logisticalissues allied to whatever strategy is adopted by ship owners tomeet the imminent, tougher sulphur emission limits in

designated emission control areas(ECAs). The approach of the 1st January 2015 implementation date for

cutting the amount of sulphur permitted in marine fuels from thecurrent 1.0% to 0.1%, for ships sailing in ECA waters, hasconcentrated minds. The areas involved are the Baltic Sea, theKattegat, the North Sea and English Channel, the 200 nautical milebelt along the coasts of the US and Canada, and the US Caribbean.Other sulphur ECAs are planned.

Furthermore, the allowable sulphur content in marine fuelsglobally is due to fall in 2020 from 3.5% to 0.5%. The IMO hasproposed a fuel availability study that could lead to a postponementby five years. However, the EU is taking a tougher line, as it intends toimplement the 0.5% sulphur cap in all EU waters outside ECAs in2020 even if IMO delays the global limit. The writing has been onthe wall since the 2010 introduction of the ruling requiring shipscalling at EU ports to switch to 0.1% sulphur fuel when in port.

There are basically three ways to complywith the impending

0.1% ECA sulphur limit. This can be achieved by switching to marinegas oil (MGO), or by adopting an LNG or methanol fuel system, orthrough the installation of treatment plant to remove the sulphur fromengine and boiler exhaust gases.

The recurring higher running costs associated with the use ofconsiderably more expensive MGO, relative to 1.0% sulphur or 3.5%sulphur fuel oil, will be the path taken by companies for which thealternative solutions are not a practical or viable proposition.

As to the options, the building or conversion of vessels to run onsulphur-free natural gas has accelerated and has commanded the widestattention. But this year’s quickened pace of uptake of exhaust gastreatment plant is a significant development. The fact that many of theship owners specifying ‘scrubbers’ are leading players in their particularmarkets or service areas is surely an endorsement of the concept.

Payback time can be the winning card for scrubber solutions,especially where vessels such as ferries, shortsea traders and cruise shipsspend a high proportion or all of their time within ECA zones. Threemain concepts are available: open, closed and hybrid systems. Theopen loop scrubber is technically the most straightforward, utilising aseawater spray on the exhaust gas. The oxides of sulphur (SOx) reactwith the water, to form sulphuric acid. No chemicals are needed as thenatural alkalinity of seawater neutralises the acid. The wash water is

treated and monitored at the inlet and outletto ensure that it complies with IMO-

stipulated discharge criteria.In the closed loop method, an option for vessels

operating in waters with extremely low alkalinity, exhaustgas entering the scrubber is sprayed a solution of water andcaustic soda, neutralising the sulphur oxides. A small bleed-off is obtained from the closed loop and treated to complywith IMO requirements. The hybrid type offers vesseltrading flexibility in allowing operation in either open orclosed loop mode.

European shortsea and logistics specialist DFDS fitted aprototype Alfa Laval PureSOx scrubber on ro-ro freight

carrier Ficaria Seaways in 2008. In 2013, thecompany retrofitted the new sulphur removal planton three other trailerships. A further five ro-ro

Marine PropulsionScrubbers find favour tomeet new sulphur standard

By David Tinsley


1/


Marine Propulsion

freight vessels and three ro-pax ferries have received the Alfa Lavalabatement technology over the course of 2014. In addition, theoperator is considering retrofitting another 10 ships that are compatiblewith scrubber systems.

The largest installations of scrubber plant ordered to date are thosewhich have been nominated for Norwegian Cruise Line’s twoBreakaway Plus-class newbuilds to be delivered by Meyer Werft in2015 and 2017. German specialist Green Tech Marine will provide fiveGTM-R scrubbers for each shipset of five main engines ranging inoutput from 14,400kW to 16,800kW, thereby serving a powerconcentration of 76,800kW.

Green Tech Marine was also contracted to install a total of 28scrubbers on six ships of the existing fleet, with the work completionprogramme running between the spring of 2014 through 2016.

Carnival Corporation has also made a resounding commitment toscrubber technology, having this year rolled out plans to increase thenumber of installations of the ECO Exhaust Gas Cleaning (ECO-EGC) system to more than 70 vessels across its brands, up from 32announced in 2013. The US group is investing around $400m todesign, build and fit the system, tailored to the space restrictions incruise ships and effective in major pollutant removal across theoperating profile, at sea, manoeuvring and in port.

Freshwater-based closed-loop Wärtsilä exhaust gas scrubbersfeature in each of Algoma Central Corporation’s C$50m Equinox-classbulkers ordered in China for operation on the Great Lakes and StLawrence Seaway. With a claimed effectiveness equating to the removalof at least 97% of SOx emissions, the system is designed to serve eachvessel’s main and auxiliary engines and oil-fired boiler, enabling

unfettered use of heavy fuel oil (HFO) within the aegis of the NorthAmerican ECA.

Another milestone reference in the region was provided bythe 26,800gt ro-ro/lo-lo vessel Oceanex Connaigra, phased intoyear-round duty on the fixed weekly service between Montrealand St John’s, Newfoundland. The con-ro hosts the firstcommercial application of the Dry Exhaust Gas Cleaning System(DryEGCS), a dry scrubber plant developed by the Germancompany Couple Systems.

Ignazio Messina, one of Europe’s ro-ro pioneers, put down amarker for the industry three years ago when it introduced the first of aseries of deepsea ro-ro/container carriers fitted with WärtsiläHamworthy seawater-based exhaust scrubbers serving the auxiliarymachinery and boiler. This ensured that residual fuel with a sulphurcontent up to 4.5% could continue to be used while meeting theJanuary 2010-implemented EU regulation imposing a 0.1% sulphurcap for ships in port.

Now the Genoese firm is phasing into service a second series of45,000dwt vessels equipped with an extended scrubber systemencompassing the main engine as well as the auxiliaries and boiler,thereby also ensuing compliance with the imminent IMO 0.1%sulphur limit in ECAs. �

1/ Wärtsilä's hybrid scrubber solution offers the flexibility for vessel

operation in seawater, low-salinity waters, and ports.

2/ "Finnlines": Wärtsilä scrubber systems have been nominated by Finnlines

for six modern ro-ro vessels

2/


http://www.port-it.nl

http://www.shipping2015.com


68

Ship Repair

Ship Management International Issue 52 November/December 2014Ship Management International Issue 52 November/December 2014

Keppel Shipyard, part of the KeppelOffshore & Marine Group, is a leading exponent of the

FPSO/FSO conversion market. In thismarket, Keppel has been involved is some119 such projects since 1981. This yearKeppel has delivered four such projectsduring this year, and has another two due fordelivery before the end of 2014.

The two due for delivery are the107,000dwt Armada Sterling 11 for BumiArmada Berhad, and 94,225 dwt RatuNusantara for M3nergy Offshore. There arealso three FPSO projects currently underway– the 128,829 dwt Bertam for LundinServices to be stationed offshore Malaysia,the 159,000 dwt Turritella for SBM Offshore,the unit to be stationed in the Stones Fieldoffshore Australia, and the 166,468 dwtKraken, for Bumi Armada Berhad, for theKraken Field in the UK sector of the NorthSea. Keppel is also involved in the extensiverefurbishment of an existing FPSO – ApacheEnergy’s 101,832 dwt Ningaloo Vision, whichwill go to the Van Gogh Field in theExmouth Basin, offshore Australia.

Earlier this year Keppel was involved incontract discussions with Norway’s GolarLNG for the conversion of one (plus twooptions) existing LNG tankers to specialised

Floating Storage and Regasification Units(FSRU). The first of these ships, the 126,277m3 Moss-type, 1975-built Hilli, has nowarrived at Keppel’s Benoi Shipyard. The vesselhas been in lay-up for several months. Thesecond vessel, for which Keppel has signed aLetter of Intent (LoI), is her sistership, the1976-built Gimi. It is expected that this willbecome a definite contract later this year.

Sembawang Shipyard, part of SembcorpMarine, is also heavily involved in theconversion market. The long-term FSOconversion project for Mobil Cepu – theGagak Rimang, was completed during earlyOctober and has now left the shipyard forstation offshore Indonesia on the Banyu Uripfield in the Cepu oil block in East Java forExxon/Mobil. Sembawang Shipyard wasresponsible for the full EPC contractinvolving this project. The vessel, withcapacity of two million barrels, is able tocontain 1.7 million barrels or equal to 250million litres. This FSO will be hooked to themooring tower on the bottom of the sea. If,next year, Banyu Urip field produces 165,000barrels per hour, the vessel is ready to store theproduction of 10 days.

Meanwhile, the first of the two EuronavVLCCs has arrived at the yard for conversionto FPSO for Total/Saipem. The two vessels

will be in the yard for 32 months total, theFPSO conversion work lasting some 28months, the second vessel due in the yardwithin the next four months. The first vessel,the VLCC Olympia has arrived and hersistership, Antarctica, will arrive before the endof the year.

The two sisterships will be convertedinto two turret-moored FPSOs for theKaombo project offshore Angola,approximately 150 kms from the coast. Themajor work will include refurbishment ofthe VLCCs, construction engineering, thefabrication of flare, helideck, upper turretand access structure, integration of thetopsides modules (which will be fabricatedat Saipem’s Indonesian yard on Batam) andlower turret components, and pre-commissioning of the FPSOs. The twoconverted FPSO units, owned by Total, willeach have an oil treating capacity of 115,000barrels per day, a water injection capacity of200,000 barrels per day, a 100 million scfdgas compression capacity and a storagecapacity of 1.7 million barrels of oil.

Jurong Shipyard, also part of SembcorpMarine, has won a $696m contract toconvert a shuttle tanker into a FPSO forOOGTK Libra, a joint venture betweenBrazil’s Odebrecht Oil & Gas and Teekay

Conversion work inthe Singapore area

1/

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Ship Repair


Offshore. The contract involves theconversion of the 130,596 dwt NavionNorvegia shuttle tanker to a FPSO thatincludes detailed engineering, installationand integration of topside modules,installation of external turret and powergeneration, accommodation upgrading aswell as extensive piping and electrical cablingworks.

Scheduled for completion in the thirdquarter of 2016, the FPSO will have thecapacity to produce 50,000 barrels per dayand 4 millon m3 of natural gas/day, and isexpected to be chartered to Petrobras forwork on the Libra field in the ultra-deepwater section of Brazil’s Santos Basin.Operating as an early well-test unit, theFPSO will be on a 12-year charter once itbegins its contract in late 2016.

Petrobras had nominated TeekayOffshore and Odebrecht Oil & Gas’s 50/50joint venture as the lead commercial bidderon the Libra project. The FPSO unit isexpected to be owned and operated by thejoint venture company and will service theLibra pre-salt field in the Santos Basinoffshore Brazil, which is expected to startoperations in late 2016.

The block covers approximately 1,550kms2 in water depths of around 2,000 m(6,500 feet). The reservoir depth is around3,500 m below the sea floor (11,500 feet).Brazil’s ANP has estimated that total grosspeak oil production could reach 1.4mbarrels per day. This will be the first FPSOconversion contract to be carried out atSembcorp Marine’s new SembmarineIntegrated Yard @ Tuas (SIY).

Meanwhile, Jurong Shipyard has beencontracted by Japan’s MODEC OffshoreProduction Systems (Singapore), to completethe repair and life extension, and conversionof a VLCC into a Floating Production Storageand Offloading (FPSO) vessel as part of theTEN Development Project. This is the 22ndFPSO conversion project which JurongShipyard is working on with MODEC. TheVLCC, the 300,995 dwt Centennial J, arrivedin Jurong’s Salumun yard earlier this year.

When completed in the fourth quarter of2015, the TEN Development FPSO will havea capacity of production and treatment of80,000 barrels per day of crude oil, 65,000barrels per day of produced water, and 180MMscfd of gas, with an on-board storagecapacity of 1.7 million barrels. The facility willinclude for delivery 132,000 barrels per day offiltered, de-aerated seawater.

The TEN Development FPSO will beexternal turret moored in 1,000 to 1,800metres water depth and operated byMODEC, on behalf of their client TullowGhana, a wholly-owned subsidiary of TullowOil. The FPSO will host multiple subseatiebacks from three reservoirs (Tweneboa,Enyenra, and Ntomme) in the Deep WaterTano block off of the coast of Ghana, WestAfrica.

Malaysia’s Malaysia Marine & HeavyEngineering (MMHE), Pasir Gudang,part of the MBO Group, has won twocontracts for long term conversions, thefirst involving a tanker to a FloatingStorage Unit (FSU) and the second froma drilling rig to a Mobile OffshoreProduction Unit (MOPU)

The first contract involves EATechnique’s 47,172 dwt, 1996-built tankerFois Nautica Tembikai, which will be convertedby MMHE to a FSU for a charter withPetronas for service offshore Malaysia. Thisthe second similar conversion carried out byMMHE for this owner, The Nautica Maua,having been completed last year.

The second new contract involvesCoastal Energy’s jack-up rig EP 7, formerlyHerculese 250, which will be converted to aMobile Offshore Production Unit (MOPU)over the coming months. This is the thirdsimilar conversion carried out by MMHE forthis rig owner over the past few years. Theyard is also carrying out a similar conversioninvolving the jack-up rig Rubicon.

Currently in Batamec’s shipyard on theIndonesian Island of Batam is the 4,863 grtoffshore sub-sea construction vessel SurfSupporter, which is being extensively modifiedfor a contract with Fugro in Australia. She isowned by Australia’s RY Offshore, andmanaged by Australia’s Go Offshore, Perth.She was built in India’s Magazon Dock,Mumbai during 2012 and has been sailing asthe Go Surf until this year, when she arrived inBatamec during September.

Work to be carried out by Batamecincludes the installation of a deck crane, andaccompanying modules, a 15-tonne heli-deckand side sponson tanks and extensive changesto the accommodation. She is due to leaveBatam during November. �

1/ Left to Right: The Stones FPSO under

conversion in Keppel, The Surf Supporter in

Batamec, The FSO conversion in MMHE

Anew operations room has just beenopened in Ghana by theSalamanca Group to cope with

what the Director of Maritime Security saysis “still a very much emerging area” in piracyand other criminal activity.

Anthony Rix said the threat was stillvery high in West Africa and with no clearsolution. Indeed, latest figures show therehave been 51 confirmed incidents off thecoast of Guinea so far this year and manymore will have gone unreported. The maincrimes in West Africa are still theft ofrefined products and petty crimes offvarious ports.

However, unlike the Gulf of Aden anddue to complex legal and administrativeissues, private maritime security companiesare still prevented by law from puttingarmed guards onboard vessels, having torely instead on the co-operation of local andgovernment forces.

“Because of the problems providingdecent maritime security in the region andindeed some of the risks there which are alot higher than they currently are in theIndian Ocean, we decided to provide a verypersonal service to vessels and theirmasters,” said Mr Rix.

“We started in Accra, Ghana becausewe have a permanent representationthrough our regional manager there andwhat we are able to do is cover the area fromIvory Coast round to Gabon.”

He said Salamanca, a UK-headquarteredcompany, had access to a good and variedrange of intelligence through personalcontacts in the military, navy, coast guardand also at government level.

“That is one of the key things,” he said.“You get websites like the InternationalMaritime Bureau which is very good andthey report, we suspect, some of theincidents but a lot of the incidents gounreported and some of the incidents thatget reported, when you actually scrapebelow the surface, you will find they arespurious, so we are unable to provide thatground truth.”

Mr Rix said: “When a ship comes inthey get in touch with us hopefully two orthree days before they arrive in the areaand because within Salamanca we have abusiness intelligence and investigationdivision, we are able to provide them withfairly high level reports on the countriesand also on the maritime environmentand then we can drill down again intodetail so the Master, rather than gettingjust one report saying it’s frightfullydangerous here, actually gets a lot moredetail and it is tailored to his particularpassage and programme.”

Of the challenge of working with localnavies, he said: “It gets easier the more you doit. For example, we’ve been on an oil rig offBenin for over a year and we have a reallygood working relationship with the Beninnavy and the Benin marines who we workalongside but then you do get issues like liability.

“In the Indian Ocean we haveour own guards who aretrained, they arecontracted

to us and the sort of regulatory liability regimeis pretty tight. It’s much vaguer when you startdealing with someone else’s armed forces withwhom you don’t have a contract.”

And liability issues can be even morecomplex in some cases. Just last December,the German Federal Office of Economics andExport Control (BAFA) introduced a newrequirement that companies must hold a newlicence and weapons permit if they putsecurity operatives onboard a Germanregistered ship.

Dr Maximilian Guth, a lawyer atHamburg-based law firm Dabelstein andPassehl, said: “From a German insurance lawperspective, a problem could arise which isowed to the fact that if the Gulf of Guineapiracy/robbery occurs in waters subject to thejurisdiction of the coastal state and therespective legislation forces theowner/charterer to employ local securityoperators onboard if the owner’s/charterer’spolicy contains a clause stipulating theemployment onboard of specifically namedor vetted security operators and the securityoperators actually deployed onboard do notcomply with these stipulations.”

The legal consequences will dependon how the respective clause is worded –if it is a valid ‘exclusionclause’, the validitywill be

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Anti-Piracy & Maritime Security


West Africa threat ‘still emerging’

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Anti-Piracy & Maritime Security


decided on the basis of the very strictunfair contract terms legislation and theassured would not be covered if differentoperators than those named in the policyor no operators at all or un-vettedoperators are employed and due to this aninsured event occurs.

The clause could also be drafted as an‘Obliegenheit’, which is in some aspectssimilar to an English warranty and theassured would only risk losing cover if heacted culpably, for example carelessly,recklessly or intentionally when decidingon the employment of security operatorsthat are not in compliance with the termsof the policy.

Esther Mallach, Partner at the firm,added: “Also, as far as insurance issues areconcerned, there might be policy causes incertain insurances stipulating that theinsured must cooperate only withspecifically named or vetted securityoperators which, again, might conflict withthe Gulf of Guinea situation in practice.

“Risk alteration under the policy mayalso become relevant when sailing in theGulf of Guinea in which case the voyagehas to be reported beforehand lest to riskloss of cover.”

Mr Rix explained how they overcomeliability issues in a number of ways: “For theparticular oil rig in Benin we advised the oilcompany what was actually required and onthat particular model the oil company had acontract with the Benin authorities, a MoU,and so essentially they contract the guardsand then we are there sitting alongside theOIM to advise him.”

Does Mr Rix foresee that the situationin West Africa improving any time soon?

“I can’t see any particular turning pointbecause in the Gulf of Guinea at themoment things are not being approached ata regional level and I think there needs to bea regional response. Until there is a regionalresponse to it, and possibly until there is abetter naval capability there, things willcontinue much as they are.”

Salamanca also has plans to expand itsoperations hubs elsewhere but is remainingtight-lipped about exact locations.

“Ten years ago there were very fewmaritime security companies – you couldprobably count them on one hand. WhatSomali piracy has done is to produce whatis now a really mature and professionalindustry,” said Mr Rix.

“You can just look around the worldand see where there are other issuesconcerning maritime security and becauseof the way the maritime commercial worldis going, it would be stupid for us not tolook at some of those areas.” �

Maritime security companytakes action on new threats

As threats to maritime security become more sophisticated, one company isexpanding its specialist support to meet rising demand in offshore security,port security, risk management and cruise ship protection.

Neptune Maritime Security’s action comes as owners and operators face agrowing complexity of risks from piracy and maritime crime as well as organisedcrime syndicates, some of which feed into terrorist networks.

Neptune will continue to operate its successful core vessel protection as well as furtherbuild on its risk consultancy services and mitigation operations in hazardous areas.

Founded in 2009 by two former members of the UK's maritime special forces,Neptune has offices in Dubai, the UK, Tokyo and Singapore.

Business Development Manager Jeremy Johnson said: “The threat from piratesand well-organised criminal syndicates is becoming increasingly sophisticated. Theirreach stretches across the Asia, Middle East and Africa (AMEA) region as well as partsof North and South America to pose a potential threat for executives, operators andowners in a range of maritime sectors, including ports, offshore and the cruise market.

“Protection by prevention is key in the effective management and mitigation ofrisk, whether it is at sea, in port, in onshore and offshore environments.”

In addition to an increase in attacks on merchant shipping, the oil and gas sector hasbecome a valuable target for a new wave of organised criminal organisations in SoutheastAsia. There have been 129 reported incidents of maritime crime so far in 2014 in theregion, according to latest figures from the Regional Co-operation Agreement onCombating Piracy and Armed Robbery Against Ships in Asia (ReCAAP).

The Vietnamese -flagged Sunrise 689 was among the latest of 16 tankers to behijacked so far in 2014 when it was boarded near the Malacca Strait in October.

Off the coast of Guinea in West Africa, latest figures show 51 confirmedincidents so far this year. Hijackings and theft continue as well as kidnaps of oil andgas workers and senior crew.

Port and terminal owners and operators face increasing instability, particularlyin North Africa and the Middle East. There are more than 12,000 ports worldwide,according to IHS's Sea-web and major threats include civil unrest and potentialterror attacks.

Neptune has strengthened its safety and security provision with a comprehensiverange of services to support identification, management and mitigation of business risks.They include vessel and facility security surveys, consultancy services, bespoke riskassessments, staff training, emergency response plans, and health and safety planning aswell as low profile protection, chaperone services and armed security. �

DispatchesShipping business reports from around the world

72 Ship Management International Issue 52 November/December 2014Ship Management International Issue 52 November/December 2014

DispatchesShipping business reports from around the world


Europe confronts the‘death boats’ of the medBy Thomas Ország-Land

Dispatches


Ship captains are trapped by conflictingpolitical and economic forcesexploited by criminals and terrorists

profiting from the death of thousands ofirregular passengers in their attempt to crossthe Mediterranean to Europe.

The International Organization forMigration (IOM) has just disclosedcalculations reckoning that more than 3,000migrants drowned in the Med during thefirst nine months of this year – twice thetotal for all of last year. AmnestyInternational has also just released meatyand dramatic research findings demandingand probably provoking substantialforthcoming remedial action by theEuropean Union (EU).

Their move has already yieldedpromising results. Frontex, the EU borderprotection agency, has responded byannouncing the deployment of six rescueships and three aircraft in OperationTriton, starting now, on a monthly €2.9m(£2.3m) budget.

It is a start but far more financial andindeed legislative commitment is

essential, at once, if thetoll of

disasters at sea is to be reduced. For themoment, the EU is still failing its obligationsdefined by the international maritimerescue regime under the Law of the SeaConvention that it has championed.

The business interests of the shippingindustry in the widening tragedy werepainfully demonstrated at Limassolharbour, Cyprus, in September when some300 refugees declined to disembark fromthe cruiser Salamis Filoxenia that hadrescued them, causing damage estimated bythe ship owners at hundreds of thousandsof euros.

The IOM is the leading inter-governmental organisation in the field ofmigration; and it works closely withgovernmental, inter-governmental and non-governmental partners worldwide. Itsmandate is to serve the interest of all partiesinvolved in the mass movement of people.Its report, Fatal Journeys: Tracking LivesLost During Migration (Geneva,September 29), includes probably the mostauthoritative tally of migrant fatalities at sea.

But its authors caution that for everydeath that enters its statistics, perhaps twoothers may have gone unrecorded.

Its publication follows the loss, also inSeptember, of some 500 passengers,

among them 100 children,in the sinking of an

immigrants’ boat bound from the Egyptianport of Damietta to Europe and rammeddeliberately by another vessel near theMaltese coast, according to survivortestimonies. Another boat sank at the sametime with hundreds of lives lost near theLibyan coast.

Even such disasters can earn thetraffickers hundreds of thousands of eurosin fares collected before embarkation. Thestudy describes Europe as the mostdangerous destination in the world forirregular migrants.

William Lacy Swing, the IOM ChiefExecutive, has called on governments “tostop this violence against desperatemigrants”. The companion report issued byAmnesty projects a path towards fulfillingthat objective.

Amnesty is an enormously influentialglobal human rights organisation thatdeploys the power of public opinion in aquest to enforce the rule of international laweven in lawless territories. It sometimesholds sway even in the corridors oftyrannical power, let alone the legislatures ofdemocratic EU member states. Henceindeed the investment in Frontex’s Tritonmaritime rescue mission, announced justdays after the publication of the Amnestyreport, deploying new equipment pledgedby Finland, France, Holland, Spain andPortugal as well as Iceland.

However, the Frontex initiative has alsoprompted Italy to consider ending its

unilateral and temporary Mare Nostrumsearch and rescue operation in the

Mediterranean. Amnestyfears that ending its

mission now would

74

Dispatches


put the lives of thousands of passengersimmediately at risk.

Amnesty’s landmark report – LivesAdrift: Refugees & Migrants in Peril in theCentral Mediterranean (Brussels, September30) – calls on the EU to expand andsynchronise its inadequate existing maritimesafety services as required under the Searchand Rescue (SAR) treaties.

It also seeks an early review of the EU’sDublin accords that place unfairresponsibility for the refugees on thecountries of their disembarkation – anddiscourage ship captains from engaging inrescue operations at sea. And it wants safe andlegal arrangements for the orderly travel ofship passengers beyond the reach of criminals.

These proposals are of huge interest tothe shipping industry.

The migrants are very unwelcome in theEU in its current mood of insecurity after theprolonged recent world recession exploitedby populist politicians. The ensuing socialtension affecting the transport industries isexplored by a timely essay issued by theeminent Royal Institute of InternationalAffairs, Millions on the Move/The WorldToday (London, August 15).

Europe’s apprehension is reinforced byinsidious terrorist threats emanating from theconflagration engulfing the Middle East andNorth Africa across the Med, the principalcause of the current upsurge of the seabornerefugee traffic. The United Nations HighCommissioner for Refugees estimates thevolume of that traffic at over 165,000 so farthis year, almost three times the number in2013. Yet the refugee numbers may well riseexponentially in the coming months.

The flood is fed by the brutal politicaland religious confrontations raging in Syriathat have already produced millions ofinternal as well as external refugees, theviolent current territorial expansion of theIslamic State “caliphate” and localisedadditional wars fought in many places in thewake of the “Arab Spring”.

Indeed, most of the refugees rescued atsea during recent months originated fromSyria as well as Afghanistan. They includedthousands of Palestinians from Gaza holding

forged travel documents and smuggledthrough Egypt by Hamas, a Jihadist terrororganisation in charge of that territoryblockaded by its neighbours, according toresearch findings published by theauthoritative Gatestone Institute, aninternational policy think-tank, in Palestinians& the Death Boats Scandal (Washington,September 27). A one-way passage through aHamas smuggling tunnel plus the perilous sea journey towards Europe was said to costover €4,000.

Witnesses rescued at sea recall themaritime people-smugglers as inept sailorsoften undisciplined, temperamental andcruel. They are given to controlling theirdefenceless passengers at gunpoint andabusing and even murdering them at sea. Thegangs operate overcrowded and unseaworthyvessels, Amnesty asserts, that sometimes getlost, run out of bunker fuel, experience enginebreakdowns and/or take in water.

Their passengers are in danger ofdehydration because of an absence ofsufficient drinking water supplies onboard.They are exposed to intoxication by thefumes of the engine or asphyxiation due to overcrowding and lack of air in theengine rooms.

Life jackets and other essential safetyequipment are almost never available. Deadlyincidents are frequent “even,” as the Amnestyreport put it, “when the boats are not sinking”.

Appallingly, passengers in sinking vesselshave watched commercial shipping passivelystanding by after merely alerting the nearestmaritime authorities.

This is in contravention of theInternational Maritime Organisation’s Safetyof Life at Sea Convention that obliges shipmasters to render assistance to those indanger of being lost at sea and to proceedwith all speed to their rescue regardless oftheir nationality, status or the circumstances inwhich they are found. The related SARConvention requires maritime states toprovide adequate coordinated rescue services.

In the absence of proper rescue efforts bythe Mediterranean governments, someindividuals have sought to do what little theycould to confront the mounting tragedy –

and they have been rewarded by saving lives.Thus Chris and Regina Catrambone, aphilanthropist, yachting couple based inMalta, recently spotted an empty winterjacket floating, like a ghost, in the waters nearthe Italian island of Lampedusa, the locationof a major fatal shipwreck. They felt theycould not ignore the challenge.

So they have launched an advancedsearch and rescue vessel, probably the firstsuch craft ever in private ownership. Their483gt Phoenix, a converted 1973 fishingtrawler, sails under the flag of Belize. Theship is staffed by professional personnel andequipped with two long-range surveillancedrones, deployed on the initiative of itsowners but in close coordination with theregional maritime authorities. It is operatedon a €2m budget.

Many commercial ships also play their partin the rescue of passengers at sea, of course.Such operations can prove very expensive.

The Cyprus-based liner SalamisFiloxenia bound for Haifa in Israel withmostly Russian cruise passengers onboardrescued some 300 dehydrated migrants,more than 60 of them children, from anovercrowded fishing boat sinking in roughseas late in September. The captain returnedto Cyprus and docked at the port ofLimassol. But, to his astonishment, therescued Syrians refused to disembark as theywanted to be taken to Italy.

Why? Because, they explainedillustrating the argument advanced byAmnesty, refugees to the EU under itsDublin accords become the responsibility ofthe country of their initial disembarkation –and they could reasonably expect bettertreatment in Italy than in Cyprus.

Eventually, the captain managed to coaxthe disgruntled families off the ship, to betaken to a camp near Nicosia. But by thenthe cruise had been aborted and the Russianpassengers put up in hotels and treated toalternative transport at the expense of theshipping company. �

Thomas Ország-Land is an author

and award-winning foreign

correspondent who writes on global

affairs.


ITIC is often asked by ship managers to comment on thewording of a ‘ship manager undertaking’ or ‘letter ofundertaking’ (LOU) which they have been asked to sign. This

is a situation which has become more relevant in the currentfinancial markets.

A ship manager’s undertaking is traditionally a documentprovided by a bank or other lender or financial institution (‘thebank’), but usually written in the guise of an LOU from the shipmanager to the bank which states that, in consideration forremaining as (or being appointed as) the manager of the vessel, theship manager will undertake that:(a) any and all claims the manager may have in respect of the vessel against third parties shall rank second to the claims of the bank;(b) any and all claims the manager may have against the vessel’s insurers will also be subordinate to the claims of the bank;(c) the manager will forgo its right to bring a claim (or obtain security) against the vessel or the owner for any funds it is owed; and(d) the ship management agreement will not be amended during the term of the loan which the bank is providing to the owner.

Clearly, the manager must take care when being asked to signthese documents.

It must always be remembered that the original ship managementagreement (usually subject to a BIMCO Shipman 98 or 2009agreement) is with the owner, who remains the manager’s principal.Therefore, the ship manager must not agree to any LOU unless themanager has the owner’s full permission to do so, as some of the termswithin the LOU can be contrary to the interests of the owner.

It is always sensible to have the LOU countersigned by theowner if the manager can arrange it. Failing this, the managershould obtain the owner’s written permission to sign it. ITICwould not recommend that the manager signs any LOU whichincludes multiple parties as they can become confusing andcontain many provisions that do not relate to the manager.

The LOU is an agreement between the manager and the bankand should remain that way. However, this should not stop themanager having the owner sign the document to show that it hasgiven permission for the manager to enter into the LOU.

If the LOU substantially alters the shipmanagementagreement, the manager may need to consult with its professionalindemnity insurer, as most covers are based on the managementbeing “on terms no more onerous than those of the BIMCOShipman 98 or Shipman 2009 form unless otherwise agreed bythe insurer.” Also, the manager may be concerned as to how itsprofessional indemnity insurance would be affected by it signingan LOU. The general answer is that there would be no effect, asthe cover is there in the event that the manager’s negligentperformance of the insured service leads to or causes a loss to athird party. What is most important about the signing of an LOUis that the manager is giving up its right to recover funds that maybe owed to it.

ITIC will be launching an e-learning video which will look inmore depth at the specific points which ship managers should bewary of in this regard. This will be available on ITIC’s websitefrom December 2014. www.itic-insure.com �

Opinion

A general guide to shipmanagers’ undertakings

Mark Brattman, Legal Adviser, International TransportIntermediaries Club (ITIC)

»

http://www.itic-insure.com

http://www.inmarsat.com


» High-tech hot shotAt first glance, this camera looks like something you might have used a few decades ago

but in fact it uses the latest technology.The Leica M Edition 60 camera has been produced to mark 60 years since the release

of the legendary camera, the Leica M3. Everything on the outside looks 1954 andthere is no screen but the technology inside is very much 2014.

Just 600 have been produced and included in the special edition box is the LeicaSummilux-M 35mm f/1.4m ASPH lens, also constructed of stainless steel.

Leica M Edition 60 Camera £12,000

www.leica.com

» Gadgets on the goThere are gadgets galore in this new Bentley MulsanneSpeed which made its official debut at the recent ParisMotor Show.The car, with its formidable looks, combines luxury withperformance and is the perfect on-the-move office with itsbackseat features of wi-fi hotspot, 60GB onboard harddrive and fold down work tables equipped with iPads andBluetooth keyboards.There are also two entertainment screens, Bluetoothheadphones, a 2,200-Watt Naim audio system and a frostedglass bottle cooler with bespoke crystal champagne flutes –so your in-car leisure time can be just as luxurious.

2015 Bentley Mulsanne Speed Price: TBA

www.bentleymotors.com

» Par for the courseKnow the best way onto the green and see precise yardages to hazards with thislatest gadget from navigation specialists TomTom.The Golfer GPS watch will help you know every inch of around 34,000 courses,with course updates available wirelessly from your smartphone.It is waterproof, has a battery life of up to 10 hours and comes in two colouroptions – grey/green and white/green.

TomTom Golfer£199.99

www.tomtom.com

Objects of desire

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Objects of Desire


» Super subWitness the wonders of the ocean beneath the waves

without getting wet in this fantastic ultra-compactultra-lightweight submersible which fits into the majority

of superyachts.Up to three people can fit in the capsule, which has DNV GL

classification and boasts leather seats and climate control. The standard 150m Super Yacht Sub 3 package includes training,certification fees, charger, air-conditioning and one-year warranty.

U-Boat Worx Super Yacht Sub 3 €900,000

www.uboatworx.com

» Top glassThese beautiful speakers make a stunning addition to any room andare ‘green’ in more than the colour, having been crafted fromrecycled glass.The rear-vented 4ft tall Rinz Sound speakers are each hand made inGreat Britain by designer Arina Sprynz and are available in achoice of six colour options including Emerald Green, picturedhere.The company provides a bespoke colour matching servicealong with full installation and support with wirelessconnectivity.

Rinz Sound Recycled Glass Speakers£18,000

www.rinzsound.com

» Hidden depthsYou can see what’s lurking beneath the surface with this clever gadget for anglers.

The Deeper Fishfinder is a smart sonar for iPhones, iPads and Android phones thatgives you information about the fish, the pond bed, water temperature and obstacles

you might bump into, and then relays this to the screen of your phone or tablet.About the size of a tennis ball, you just tie it on a fishing line and cast out to check the

depth and fish in the area. It works to a maximum depth of 40 metres.

Deeper Fishfinder£167.99

www.amazon.co.uk

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Review


» Warships at a GlanceBy Michael Pearce, Captain Henry DuffyUniversity of Plymouth Press

Legendary jazz singer Tony Bennett teams upwith pop princess Lady Gaga in this unlikelycollaboration, which is sure to widen theappeal of jazz to younger music lovers.The duo first met in 2011 and collaboratedon his album Duets II singing The Lady is aTramp. This album features jazz standards bypopular composers such as George Gershwinand Cole Porter, with tracks includingAnything Goes and Let’s Face the Music andDance. There are also solos from Gaga (LushLife) and Bennett (Sophisticated Lady).You won’t be able to help crooning along tothis one!

» Cheek to CheekTony Bennett/Lady GagaInterscope/Columbia

In the summer of 1914, as the First World War took hold acrossEurope, Royal Navy cadets were issued with a pocket-sizedhandbook containing silhouettes of all warships in action acrossthe globe, so they would be able to recognise both friendly andenemy vessels if they ever went to war.Now, to mark the centenary of the outbreak of the war, Warshipsat a Glance has been reprinted by University of Plymouth Press asa tribute to the cadets and midshipmen – many of them justteenagers – who fought and died for their country.Originally compiled by noted naval expert Fred T Jane, and published by Sampson Low, Marston & Co, the book includes the vessels of 35international navies, including those of Britain, Germany, the US and Japan.Among the first to receive copies of the book in 1914 were young cadets at the Britannia Royal Naval College in Dartmouth and the reprintincludes notes by one of them – Cadet Alec Lister Tidd, born in 1900, who joined the college in January 1914 and four years later on 15thNovember was made a Sub Lieutenant and witnessed the surrender of Germany’s High Seas Fleet seven days later.

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books, theatre, dining, events, culture, films, festival, music, art, dvd, wine


Gastro-Botanica isthe contemporarycuisine created bychef Jason Tan at thispopular newrestaurant inSingapore BotanicGardens.The restaurant, whichis co-owned by Tanand Renny Heng,serves up dishes withan emphasis on well-sourced meats,poultry and seafood and botanicals such as fruits and herbs, tubers, vines and fungi.The Discovery Menu includes such plates as Carabinero Prawn, Foie Gras à la Chinoise,Maine Lobster, Hungarian Mangalitsa Pork and Cocoa ‘Pebbles’ and costs S$248.

This exhibition of paintings, drawingsand watercolours by French artist PaulCézanne (1839-1906) traces hislifelong attachment to HortenseFiquet, his wife, mother of his only sonand his most painted model.The exhibition features 24 of theartist’s 29 known portraits of herincluding the oil painting MadameCézanne in the Conservatory, from1891, from the MetropolitanMuseum’s collection.The works were painted over a periodof 20 years and her expression in thepainted portraits has been variouslydescribed as remote, inscrutable,dismissive, and even surly.

» Corner HouseSingaporewww.cornerhouse.com.sg

1/ Madame Cézanne in a Red ArmchairAbout 1877, Oil on canvas,Museum of Fine Arts, Boston

» MadameCézanneShowing now untilMarch 15, 2015www.metmuseum.org

Acclaimed author of the best-sellingguide to punctuation, Eats, Shoots and Leaves, Lynne Truss has come upwith this mesmerising Gothic tale of acat with nine lives – her first novel inover 10 years.The hugely original story is set in acottage on the coast on a windy evening,when under a pool of yellow light, twofigures face each other across a table – aman and a cat.The tale is so unusual yet so terrifyinglyplausible that it demands to be told in asingle sitting. The man clears his throat,and leans forward, expectant. ‘Shall webegin’ says the cat…

» Cat Out Of HellBy Lynne TrussHammer

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Lifestyle


Lifestyle


“There are so, so manystudies showing the

benefits of singing andof music”

John Pryce-Jones

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LifestyleLifestyle

In a parallel universe, John Pryce-Joneswould like to be Minister for Music.Actually, he’d quite like the position in

this universe, too, but he has yet to persuadethe government to agree to such anenlightened proposal.

“If I was appointed, the very next day at9am, every school would sing the registerand then have half an hour of singingtogether. It would very quickly change a lotof things,” he said. “There are so, so manystudies showing the benefits of singing andof music. I have files full of these articles. Ihave been to Westminster to see the variousdepartments, MPs, etcetera, trying

desperately to get this message through, butwith very little effect. There is a mass ofresearch that you really can’t argue with. Butit isn’t politically vote-catching.”

This conversation ‘began’ when I tookthree 15-year-olds to a concert of classicalmusic at the Royal Albert Hall. Once theyhad got over the hilarity of the fact thatthis was a Grand Organ Gala, all threewere totally absorbed by the drama, thetriumph, the poignancy, the emotion ofthe music, and at the end were swept awaywith enthusiasm. To be clear, this was notan entirely fair test – all three are studyingfor music GCSE – but it nevertheless

made them unusual in the context ofsociety today.

John Pryce-Jones was the conductor forthe performance. The Conductor andArtistic Director of Halifax Choral Society,he has worked with the Welsh NationalOpera, Opera North, the D’Oyly CarteOpera Company and the Northern BalletTheatre, amongst many others, andconducted major orchestras throughout theUK and in 11 other countries.

My teenage concert-goers were slightlyunkind in suggesting that their presence inthe Albert Hall brought the average age ofthe audience down to about 90. But that


Singingregisterthe

By Felicity Landon

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Lifestyle


comment might have been overheard byMr Pryce-Jones, who between pieces spoketo the audience about the need to engagemore young people in classical music.

So, I called him the next day and asked:Why are so few young people captivated by,interested in, or even aware of Bach, Handel,Strauss, Mozart, Widor, Parry, Elgar…?

“In schools, by and large, classical musicor listening to classical music is very muchon the periphery at the most,” he said.“Obviously young people are exposed tolots of different genres of music – but leastof all classical music, so unless your familyhappens to be that way inclined, many arejust not really particularly aware of it.

“Unless you go to a big concert like theone in the Royal Albert Hall, classical musicisn’t so immediately appealing as a rocknumber or a pop song or whatever – whichis short and fairly lacking in any depth ofcontent, other than maybe the words. So itisn’t something to which they are exposedor which they are encouraged to listen to.”

The Halifax Choral Society has tried allmanner of things to get young people alongto its concerts – including sendinginvitations to the heads of music at localsecondary schools offering tickets for £1 oreven free. “But the only response we had wasfrom one school – where my wife teachessinging. You have to drag young peoplescreaming, almost, into the concert hall.”

However, Mr Pryce-Jones is critical ofthe government’s headline-grabbing ideathat every child should have the chance tolearn a musical instrument.

“Yes, they should, but it isn’t just a caseof giving a child an instrument. Imagine aclass of six children – the first lesson is allabout how to assemble the clarinet. By thetime it’s explained and put together, thelesson is over. The next lesson you are a bit

quicker so you have a short time to find outthat, if you put your fingers on the holes,you might get a sound out of it. Thechildren are told – that note is Middle C.And they say: What is Middle C? It is liketrying to do quantum physics withouthaving learned that two plus two is four.The background just isn’t there.”

He’s a huge promoter of the methodcreated by Hungarian composer ZoltánKodály, using a child-developmentapproach. This introduces children tomusical concepts through listening, singingor movement – only when the child isfamiliar with the concept does he or shelearn how to notate it.

“When Kodály was asked the questionwhen should a child’s music educationstart, his answer was – nine months beforethe birth of the mother! This system isbased on teaching subconsciously andlater making it conscious.”

When Mr Pryce-Jones based weeklymusic lessons at his daughter’s village schoolon this system, the results were phenomenal,he said. It’s not about demanding perfectpitch from the start – in fact, each sessionstarted with him singing ‘hello everyone’ andthe pupils singing back ‘hello’. Never mindthe pitch, hear the voices.

By the end of the first term, suddenlythey all started to sing the same notes, andeven boys were putting their hands up tostand in front of the class and sing thegreeting on their own.

“People in the school still talk aboutthat and the enthusiasm and also thechildren’s aptitude for other things. Andwhat is wrong with that? It’s so simple, butit isn’t politically interesting. It’s muchmore exciting to say ‘every kid will have thechance to have a clarinet’ – which is acomplete waste of time.

“The first word a baby learns is mamaor dada. They don’t come out saying ‘Isthis a dagger which I see before me?’ Wecan’t expect children to sing and readmusic before they have learned the basics.We have to give them the vocabulary.Then they can decide.”

It isn’t just the value of the singing,according to Mr Pryce-Jones – it’s all aboutconfidence, being able to stand up andknow that you are the only one who hasyour particular voice, and it’s also aboutmuch broader behavioural issues.

“We run a Yorkshire Youth Choir, withcourses and concerts. Their behaviourwhen we go on tour is fantastic. We teachthem respect. We have singers from aged 10to 22. The senior singers we appoint asmentors, and they show respect for the 10year olds. And the 10 year olds look up tothe 20 year olds. That is all to do withsinging, because they are singing in a group.

“We had one A-level aged boy whowas evidently very shy and very badlybullied at school. So much so that hewouldn’t go to school – until he found outabout the Yorkshire Youth Choir, andcame along and found 70-80 other youngpeople who had the same interests as himand didn’t make fun of him because of hishaircut or because he was shy. Theylaughed with him, not at him, and thething that kept him going was theknowledge that in six or eight weeks’ timethere would be a week’s course withpeople with whom he could interact.”

Incidentally, Zoltán Kodály believed [toquote the British Kodály Institute] that:“Music should belong to everyone…musicis a spiritual food for which there is nosubstitute…there is no complete spirituallife without music…there are regions of thehuman soul which can be illuminated onlythrough music.”

There was, apparently, a six year old inthe audience at the Royal Albert Hall. Thiswas his first concert and by the interval hewas getting tired, so his parents took himhome. When he woke up the followingmorning, his first question was: "Can we goto the second half now?" �

“We can’t expect children to sing and read musicbefore they have learned the basics. We have togive them the vocabulary. Then they can decide”

John Pryce-Jones


http://www.thome.com.sg

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