In shipping, there’s little that one can count on from year to year. The word “change” comes to mind immediately. Another constant is a steady hand at the helm at the International Association of Independent Tanker Owners (INTERTANKO), the voice of the world’s collective tanker market. So, when Joe Angelo replaced long time (10+ years) INTERTANKO stalwart Peter Swift as INTERTANKO Managing Director less than 4 months ago, industry watched closely for any changes in course. But INTERTANKO's new MD is anything but an unknown quantity and he clearly hit the ground running. In April, MarPro caught up with him at his Arlington, VA offices for a SITREP on the world of tankers. Angelo summed up his service thus far by saying, “Just over 100 days into my tenure as MD, I would rather have us be proactive as opposed to be reactive to what happens around us.”
Well-known to industry and the regulatory community alike, Angelo previously spent six years at INTERTANKO as Director of Regulatory Affairs and the Americas and also as Deputy Managing Director, starting in 2009. With Katharina Stanzel – coming to INTERTANKO from the IOPC Funds and ITOPF where she was involved in marine pollution claims management – already established as Deputy Managing Director, INTERTANKO leadership remains in good hands. A detailed work plan is already in place, featuring what Angelo characterizes as six major work focus areas, further broken down into 25 high priority work items. A quick review of Table 1. below reveals that Angelo, Stanzel and the entire INTERTANKO will have their hands full in the coming months.
We asked Angelo to rank the priority items in terms of importance. Reluctant to place more importance on one item over another, he did concede, “These are the major issues and sub-issues that our members want to focus on for 2011. Ranking them – I haven’t done it and I’m not sure it is necessary. Having said that, the number one burning issue on the plate of INTERTANKO and probably most of the shipping industry, is piracy.”
Piracy, Piracy, Piracy
As 2011 kicked off, the INTERTANKO Executive Committee decided that a more aggressive role – doing more in terms of addressing piracy – was in order. Angelo fleshed out the INTERTANKO plan, which consists of a two phase approach. “Starting out, we signed a contract with a public relations firm, who helped us establish Phase I and Phase II. Phase I is complete and it consisted of four major elements, kicked off by a March 1st Advertisement in some major global publications.” That AD, Angelo explained, directed readers to a WEB site (www.saveourseafarers.com) which prompts readers to send a letter to their head of government imploring that these governments take on piracy, eliminate motherships and ultimately come up with a solution. By the end of April, the site had recorded more than 40,000 hits and had generated more than 10,000 letters.
Phase II, now underway, involves engaging the press, social media outreach, blogs, press releases and finally, seeking to engage a high profile name to take on the cause. Of the final effort, Angelo hopes to have this accomplished in the next 12 months. INTERTANKO remains active in other ways, as well. These include educating members on the use of citadels, armed guards and other evasive, defensive techniques. Angelo also clarified INTERTANKO’s positions on armed guards and the proposed practice of arming mariners. “We believe that it is up to each individual owner to do their own risk assessment and determine what’s best for their company and ships. We also believe it up to government to provide freedom of the high seas. INTERTANKO does not believe crews should be armed.”
Ship Vetting – and Terminals, too
Angelo addresses the thorny issue of ship vetting by showing some of that proactive leadership that he promises from the outset. “Just as the oil majors have instituted their vetting system to ensure quality in shipping, we’ve instituted, through our WEB site, a terminal database which allows the Master of the ship to submit data – good and bad – through a simple numbering system, one through five. We contact the terminal with regard to any poor rating immediately. And, we ask them what they intend to do to rectify the situation. We can’t make anyone do anything but this has been ongoing for three years and has had some impact.” Angelo adds, “Our members also report when they encounter inadequate reception facilities here in the U.S. and the rest of the world. We provide the Coast guard with an anonymous report, so our member is not exposed. The Coast Guard then makes sure that terminals do have adequate facilities for reception before they allow the terminal certificates to be renewed. Internationally, we report to IMO who sends it on to individual port states.”
With regard to the proliferation of tanker vetting in today’s business environment, Angelo insists, “We do not question the need for these inspections. However, once a quality inspection is conducted by a responsible, recognized organization, it should be accepted by everyone.” With regard to the Oil Companies International Marine Forum (OCIMF) SIRE process, INTERTANKO meets regularly with the oil majors to raise concerns about vetting matters, with an eye towards improving the process. Angelo also admits, “Right now, the biggest issue for our members is the burden presented by the vettings whereby some inspectors are looking for nothing but as many deficiencies as they can find.” Beyond this, he says, one oil major’s vetter won’t be accepted by another oil major, resulting in multiple, redundant inspections. Add to this the third party traders and other entities that won’t accept any SIRE vetting, flag state, class and port state control inspections, and the real burden to tanker owners becomes obvious. Angelo says flatly, “It is out of control.”
Regulatory Focus: INTERTANKO addresses the looming Ballast Water Treatment crisis
In case you were wondering which of the two dozen environmental and regulatory changes facing tanker owners was of most concern, Joe Angelo was unequivocal in his focus on the Ballast Water Management issue. “The most difficult thing facing us right now is ballast management and treatment. We have the international convention, adopted by IMO but not yet in force. IMO says that the equipment is available and that it should be installed. We are canvassing our members right now to gather as much data as we can so that we can go to the upcoming MEPC meeting and provide good information for the committee. Right now, we are somewhat concerned about the large number of ships that would have to comply by the 2012 deadline and we don’t see how the manufacturers are going to be able to produce enough equipment for our members and all of shipping, for that matter,” explains Angelo.
While The MEPC meeting in July is important from the IMO perspective, Angelo points to the bigger concern over what might happen in the United States. As a U.S. Coast Guard veteran, Angelo in April expressed a “high degree of confidence” that they would eventually do the right thing. He added, “I would be very surprised if the initial standard does not meet the IMO requirement. But, we also worry about the ludicrous standards being considered in California and New York. As an industry advocate, we are working with both states – all of the stakeholders, actually – to convince them that they need to look at this whole issue. It’s an uphill battle, but we’re giving it a try.”
Insurance: OPA 90 – leave it alone
The Oil Pollution Act of 1990 and the response, prevention and liability compensation evolving from that have been very effective in the United States in reducing oil spills. That’s the view from INTERTANKO. Joe Angelo continues, “That’s a piece of legislation that has proven its effectiveness. When congress last year was proposing all sorts of legislation as a result of the Deepwater oil spill, that was of concern to not only tanker owners but all of the shipping industry.” Angelo also points out that the risks associated with offshore drilling are completely different than that of the energy transportation industry.
In response to the proposed changes to insurance and prevention laws, the full gamut of shipping industry advocates – including INTERTANKO – spent considerable time last year trying to convince Congress that the legislation was not necessary. Of particular concern to INTERTANKO were the proposed amendments to limits of liability for damage and other standards that have been around for 150 years. Angelo says, “We certainly understood the need and the desire by congress to properly compensate families of the 11 men tragically killed in the accident, but we did not think it necessary to open the whole issue up the shipping world. It is our position that OPA 90 has served industry and indeed all stakeholders well. While we were please to see that congress did not pass the new legislation, we continue to work to make sure any future changes are reasonable and practical, should they choose to go that route.”
Tankers & the Freight Market: a cautionary word
With regard to the state of current market conditions, Angelo declined to go into specifics but he declared firmly, “It is no secret that the tanker market right now is not very good. There are too many tankers out there for the available business.” And while no one really knows how long these conditions can last, Angelo added a word of caution: Tanker members are currently being paid a certain rate for their services, but their costs to provide that service are significantly higher than that. They can only maintain that level for a certain period of time. “After that,” asks Angelo, “what could possibly happen? Well, there could be conditions that could impact safety on the ship and so we are engaging in dialogue with the oil companies in particular to see if this is of concern to them, as well. As we move through this tough tanker market, I’m not saying that the rates today do not support safe operations. What I am saying is that downstream, we’re concerned that it might manifest itself into safety issues and we are starting to explore that issue. We are trying to be proactive; that’s all.”
INTERTANKO: mariner competency goes beyond STCW
Joe Angelo readily admits that INTERTANKO members are concerned about officer competency. And, in part, as a response to the ‘officer matrix requirements’ developed by the oil majors, INTERTANKO has developed its own tanker officer training standards (TOTS). Angelo says, “Those oil major requirements are extremely difficult to meet and INTERTANKO supports a process which allows members to involve their officers in a process that will ensure that their people are trained to a standard well above the STCW requirements. The goal here is that a member would put his people through the training and that could be used by the oil majors as an alternative to the officer matrix. Thus far, some of the oil majors, on an irregular basis have accepted our TOTS program as an alternative to the officer matrix. We’re looking to develop that program further that system so that more of the oil companies accept our program standards. And this links to the officer retention problem. We feel that in doing that, we’ll first and foremost improve competency but also help in terms of crew retention.”
Greenhouse Gas emissions (GHG)
Angelo says that INTERTANKO is watching the gathering storm over greenhouse gas emissions (GHG). Laying out the INTERTANKO position on this key environmental issue, he explains, “It goes without saying that shipping contributes about 3 percent of the world’s GHG emissions, and shipping should play a role in reducing GHG emissions. In that regard, there are three fronts addressing the situation. The IMO, looking to mandatory requirements to reduce GHG, to a much lesser extent, you have the UNFCCC, and on the sideline, and watching right now, you have smaller entries like the European Commission along with the US looking the same way.” He continues, “INTERTANKO believes that shipping should reduce its footprint, it should be done through IMO and it should be across the board for all international shipping and it should be done as soon as possible.”
The IMO’s upcoming MEPC meeting (62) in July will be, in Angelo’s estimation, a key moment in reducing GHG emissions. As IMO looks to adopt an Energy Efficiency Design Index (EEDI), INTERTANKO fully supports the adoption of the index and other market-based measures. Angelo adds, “We’re not sure what market-based solutions are best right now, but we want to make sure that the options are fully fleshed out. We support IMO action on the EEDI in July, and in doing so, it would demonstrate its competency in this area and allow the UNFCCC to say IMO has taken action and then acknowledge that IMO should be the controlling body. This would also allow flag states such as the US and the EU itself to acknowledge that IMO’s action represent a way forward and the right way to go.”
Particulate Matter, NOx & SOx
Many industry observers concede that it was INTERTANKO that boldly stepped forward a number of years ago and proposed to IMO the changing of ship’s fuel to distillates. Angelo, remembering the early proposal, says, “We were the scourge of the industry. In the end, the MEPC member states of the IMO saw the wisdom of what we proposed and they adopted these measures into Annex VI. This required all ships to eventually deal with their stack emissions.” Today, IMO allows this to be accomplished in one of two ways – through the changing of fuels or through abatement technology aboard the ship. “In our view – and now that IMO has provided two alternatives – it is up to our members to decide which method to employ to meet those requirements.” However, Angelo points out one thing shipowners should consider when making this decision is that shipboard abatement technologies create another waste stream and the associated treatment and disposal issues for an owner to deal with.
Another fly in the ointment, says Angelo, is that current IMO rules contain no testing requirements for fuel delivered to ships to prove that they comply with the standard. And, explains Angelo, unlike the gasoline you pump into your car that has been tested and certified by the government as being in compliance, no such safeguard is in place for ship-owners. As a result, they routinely receive fuel that does not measure up. All he is asking for, says Angelo, is for government (or their designees) involvement in the testing of fuel so that it meets the requirements of IMO protocols. As it stands now, the onus arguably rests with the owners, who have little control over quality beyond the quality statement delivered to the ship at the time the bunkering occurs. “That has to change,” says Angelo.
International Standards for International Shipping
Angelo describes the ideal approach to most issues facing tanker owners and shipping companies in general as, “International Standards for International Shipping.” Theirs is arguably no one better qualified to help INTERTANKO members make that philosophy a reality than Angelo, a 1971 graduate of the U.S. Merchant Marine Academy and eventually rose to Senior Executive Service (SES) with the U.S. Coast Guard. As the Coast Guard’s first Director of Standards for Marine Safety, Security and Environmental Protection, he also served as a key negotiator and head of numerous delegations for the U.S. to major maritime safety and environmental protection committee meetings and conferences at the International Maritime Organization (IMO).
Joe Angelo needs no on-the-job-training as he moves the INTERTANKO agenda forward on the global stage. Fully accustomed to crafting agreements and compromises to a host of tough issues, his leadership comes at just the right time for INTERTANKO and, indeed, all global shipping stakeholders.
(As published in the 2Q edition of Maritime Professional magazine - www.maritimeprofessional.com)