Indian Ocean Piracy Suppressed, by Marex

Piracy in Asia

By MarEx 2015-09-16 11:34:17

EU Navfor, BIMCO and NATO were unanimous in their opinion that piracy in the Indian Ocean is suppressed but not eradicated.  The combination of measures – Best Management Practice 4 (BMP4), Armed Security Teams and a heightened naval presence – are proving effective at ensuring the pirate investors regard the risk to reward ratio as not in their favour.

They were keen to emphasize however, that the measures work in unison, and that any relaxation of armed guarding, BMP4 or the naval patrols may result in a return to piracy by the Somalis. The military believe probing attacks are being conducted to test defenses and these are occurring mainly in the Gulf of Aden. The conditions ashore have not changed and capacity building has, so far, been totally ineffective. Illegal fishing has re-emerged as a significant challenge and two Iranian fishing dhows have been hijacked in last three months.  Gerry Northwood OBE, COO of leading maritime security firm MAST, said in a statement earlier this week that “the current security framework is working, but it remains extremely fragile and dependent on international navies maintaining a presence in the Indian Ocean, BMP4 being diligently applied, and for at least the majority of vessels to be protected by armed guards.” He warned that there is an increased risk with convicted pirates being released and returning to their homes in Somalia, reportedly seeking work as armed guards in ocean going fishing vessels. “This is a potentially risky situation. It is not a big step from providing security on a fishing vessel to taking the vessel hostage and using it as a pirate mothership,” he said.   South East Asia With the recent increase in piracy activity in SE Asian waters, the Malaysian authorities are keen to demonstrate they are taking pro-active measures to prevent it.  Armed guards were discussed as a potential solution but given the legal complexities, with vessels passing through different states territorial waters, to be effective, an agreement would need to include the Indonesians and Singaporeans. A modified version of Best Management Practices (BMP) tailored to SE Asia is due out soon. Northwood said: “It can take time before armed guards on ships in SE Asia become an effective measure, but this is a move in the right direction. Our advice is that all vessels should be putting in place the appropriate risk assessed security measures.” He added: “When making the risk assessment, factors to be taken into account include the physical attributes of the vessel (speed, freeboard, access points etc.), cargo and routing. Ideally the measures to be put in place should be from a menu of options, including crew training, access to a citadel, and other BMP4 passive measures where possible.”  

Gulf of Guinea The Maritime Trade Information Sharing Centre, Gulf of Guinea (MTISC-GoG) has been established in Ghana as the equivalent of the Indian Ocean’s UKMTO. Under reporting is a significant issue in the Gulf of Guinea as the authorities are not keen on the publicity it generates.

Australia Delays Shell BG Takeover Decision, by Marex

Shell & BG 1

By MarEx 2015-09-16 20:20:47

Australia’s competition watchdog flagged concerns on Thursday that Royal Dutch Shell’s proposed $70 billion takeover of BG Group may lessen gas supply competition in eastern Australia and delayed a final decision on the bid to November.

The Australian Competition and Consumer Commission (ACCC) said a large number of market participants had expressed concerns that the proposed takeover may lead Shell’s Arrow Energy to sell its gas into BG’s Queensland Curtis liquefied natural gas plant (QCLNG) for export.

Queensland Curtis LNG is one of Australia’s largest capital infrastructure projects, involving US$20.4 billion of investment from 2010-14.

“If the proposed acquisition resulted in less supply of gas to the domestic market, therefore, this could substantially lessen competition to supply domestic gas users and lead to higher domestic prices and more restrictive contractual terms,” ACCC Chairman Rod Sims said in a statement.

The commission said it now planned to issue a final decision on November 12.

In response to the regulator’s concern about gas sales by Arrow Energy, which is 50-50 owned by Shell and PetroChina, Shell said BG already had enough gas to meet all its commitments.

“Arrow and QCLNG collaboration could assist the development of Arrow’s undeveloped resources to potentially accelerate additional gas supplies into both the domestic and export market,” Shell said in an emailed statement.

The takeover has already been cleared by U.S. and Brazilian anti-trust authorities. It still needs approvals from Australia’s Foreign Investment Review Board and China to go ahead.

Shell said it remained confident the deal would be completed in early 2016.

Some of Australia’s biggest manufacturers fear Shell’s takeover of BG could worsen what they see as a lack of competition in the country’s eastern gas market, spurred by three new LNG export plants, including BG’s, in Queensland.

“This burst in demand for gas over a very short timeframe for the LNG industry is effectively upending the east coast gas market,” Sims said in a speech at a gas conference on Thursday, outlining the commission’s preliminary impressions on a review of the east coast gas market due in April 2016.

He said the commission had evidence that after the LNG projects were approved, many Australian industrial gas users went from a market where they received three to five offers of supply on negotiable terms, to a market where they received no offers or only one true offer on inflexible terms.

Watch: Refugees Left Stranded Across Europe, by Marex

The Captain Elias camp on the island of Kos, Greece, a makeshift building where authorities have been directing refugees to stay while awaiting registration papers, was closed on September 10.

Médecins Sans Frontières/Doctors Without Borders (MSF), used the building for medical consultations, and is seriously concerned there is now no provision of accommodation of any sort for new arrivals.

Since March, an MSF team has worked inside the Captain Elias structure and around Kos, conducting more than 4,450 medical consultations, treating patients mainly for chronic diseases that need medical follow-up, upper respiratory tract infections, skin infections, muscle pain and gastro-intestinal diseases.


“It is unacceptable that this closure was not accompanied by any decision from the authorities to provide other facilities for refugees arriving in Kos,” said Elisa Galli, MSF field coordinator in Kos.

“Captain Elias was far from ideal, but now people have absolutely nowhere to go. There is no clarity on what will happen next, and authorities are not assuming their responsibilities about the well-being of these vulnerable people.

“As we have said repeatedly, the authorities need to ensure that adequate reception facilities are provided.”

The building housed several hundred people at a time.

While living conditions were sub-standard it was the only place where new arrivals could seek free shelter and have access to water, toilets and showers.

Refugee 1

Three thousand people are currently scattered around Kos town waiting for permission to leave the island, which usually takes an average of eight days.

“Without any shelter the refugees are exposed to weather conditions that soon will get worse, and they have little or no access to water and sanitation.” said Galli.

“Furthermore they are exposed to potential attacks by unidentified groups that have targeted migrants in the city of Kos in the last few weeks.

“It is simply not safe to be a refugee and stay in the streets.”

To improve conditions in the Captain Elias site and in the absence of any management from the authorities, MSF has installed water points and latrines and has been cleaning the building every day.

MSF has also distributed essential relief items such as blankets, hygiene kits and energy bars.

Germany Struggling

Meanwhile, Germany re-imposed border controls on Sunday after Europe’s most powerful nation acknowledged it could scarcely cope with thousands of asylum seekers arriving every day.

A day before deeply divided European Union ministers tackle the migrant crisis, the U.N. refugee agency also called on every member state to take in a share of asylum-seekers under a Brussels plan which some countries are fiercely resisting.

Berlin announced that the temporary measure would be taken first on the southern frontier with Austria, where migrant arrivals have soared since Chancellor Angela Merkel effectively opened German borders to refugees a week ago.

“The aim of these measures is to limit the current inflows to Germany and to return to orderly procedures when people enter the country,” said German Interior Minister Thomas de Maiziere.

Open borders among the European countries which signed the Schengen Treaty are a crucial part of the E.U. project, but controls can be re-introduced, provided they are only temporary.

“The free movement of people under Schengen is a unique symbol of European integration,” the E.U.’s executive Commission said in a statement. “However, the other side of the coin is a better joint management of our external borders and more solidarity in coping with the refugee crisis.”

Emergency Meeting

At an emergency meeting on Monday, interior ministers from the E.U.’s 28 member states will discuss Commission proposals to redistribute about 160,000 asylum seekers across the bloc.

“We need swift progress on the Commission’s proposals now,” the Commission said in a statement issued as tens of thousands of people fleeing war and poverty in Syria and other parts of the Middle East, Asia and Africa made their way north.

EU envoys meeting on Sunday evening in Brussels failed to break the deadlock, with some eastern states still refusing to accept binding quotas of refugees. They argue the plan will draw more people to Europe and disrupt their homogeneous societies.

More Lives Lost

Amid the political bickering among European governments, the crisis claimed yet more lives. On Sunday 34 refugees, almost half of them babies and children, drowned off a Greek island when their boat sank, the coastguard said.

Four babies, six boys and five girls died when the wooden vessel carrying them overturned on Sunday morning, about three miles (5 km) east of the small island of Farmakonisi, close to Turkey’s coast, the service added.

Tens of thousands of mainly Syrian refugees have braved rough seas this year to make the short but precarious journey from Turkey to Greece’s eastern islands, mainly in flimsy and overcrowded inflatable dinghies.

Call for IMO Seafarers’ Committee, by Marex

IMO Committee

Maitland, head of International Registries Inc.

By MarEx 2015-09-12 20:38:41

Clay Maitland, head of International Registries Inc. and keynote speaker at London International Shipping Week’s inaugural “Big Maritime Welfare Debate” last week, opened proceedings by calling for a Seafarers Standing Committee at the IMO, as well as better access to data by flag states on rates of illness, suicide and deaths on board. 

He also called for the U.K. government in particular to take a lead role in determining how best to protect seafarers’ rights.

“When it comes to seafarers’ rights, flag states are in a darkened room,” said Maitland. International Registries Inc. runs the world’s third largest ship registry, the Marshall Islands flag. “There is no database to refer to in advocating for the seafarer, but if that information was out there the political pressure would then be there to support the seafarer.”

The successful event was a collaborative effort by four maritime welfare charities – Seafarers UK, Mission to Seafarers, Sailors’ Society and Apostleship of the Sea – and was hosted at the Willis Building auditorium with 150 in attendance. 

Maitland went on to say that the Maritime Labour Convention (MLC) was already out of date, that connectivity at sea needed to be addressed and that action on seafarer rights was unlikely until the abuse of many of the world’s crews was highlighted more effectively. 

He then joined a panel discussion chaired by Barry Bryant, Director General of Seafarers UK, and including Per Gullestrup of Clipper Group, Grahaeme Henderson of Shell and David Hammond of Human Rights at Sea that debated whether the industry was yet going far enough to ensure the physical and psychological health of our seafarers.

Three other panel discussions took place during the afternoon. The Mission to Seafarers’ the Revd. Canon Ken Peters chaired a debate on whether there was such a thing as fair treatment for seafarers. Martin Foley of the Apostleship of the Sea chaired a discussion on the MLC and the reality of its impact on the welfare of seafarers. A panel, chaired by Stuart Rivers of the Sailors’ Society, then looked at the impact of technology on the future provision of welfare services to seafarers.

What Will it Take to Melt Antarctica’s Ice ?, by Marex

Antartic Ice 1

By MarEx 2015-09-12 21:01:59

New work from an international team including Carnegie Institution for Science’s Ken Caldeira demonstrates that the Earth’s remaining fossil fuel resources would be sufficient to melt nearly all of Antarctica if burned, leading to a 50- or 60-meter (160- to 200-foot) rise in sea level. 

Because so many major cities are at or near sea level, this would put many highly populated areas where more than a billion people live under water, including New York City and Washington, DC, sates the report published in Science Advances.

“Our findings show that if we do not want to melt Antarctica, we can’t keep taking fossil fuel carbon out of the ground and just dumping it into the atmosphere as CO2 like we’ve been doing,” Caldeira said.  “Most previous studies of Antarctic have focused on loss of the West Antarctic Ice Sheet. Our study demonstrates that burning coal, oil and gas also risks loss of the much larger East Antarctic Ice Sheet.”

Caldeira initiated the project with lead author Ricarda Winkelmann while she was a Visiting Investigator at the Carnegie Institution for Science. Winkelmann and co-author Anders Levermann are at the Postdam Institute for Climate Impact Research; co-author Andy Ridgwell is at the University of California Riverside.

Although Antarctica has already begun to lose ice, a complex array of factors will determine the ice sheet’s future, including greenhouse gas-caused atmospheric warming, additional oceanic warming perpetuated by the atmospheric warming and the possible counteracting effects of additional snowfall.

“It is much easier to predict that an ice cube in a warming room is going to melt eventually than it is to say precisely how quickly it will vanish,” Winkelmann said, explaining all the contributing factors for which the team’s models had to account.

The team used modeling to study the ice sheet’s evolution over the next 10,000 years, because carbon persists in the atmosphere millennia after it is released. They found that the West Antarctic ice sheet becomes unstable if carbon emissions continue at current levels for 60 to 80 years, representing only six to eight percent of the 10,000 billion tons of carbon that could be released if we use all accessible fossil fuels.

“The West Antarctic ice sheet may already have tipped into a state of unstoppable ice loss, whether as a result of human activity or not. But if we want to pass on cities like Tokyo, Hong Kong, Shanghai, Calcutta, Hamburg and New York as our future heritage, we need to avoid a tipping in East Antarctica,” Levermann said.

The team found that if global warming did not exceed the two degree Celsius target often cited by climate policymakers, Antarctic melting would cause sea levels to rise only a few meters and remain manageable. But greater warming could reshape the East and West ice sheets irreparably, with every additional tenth of a degree increasing the risk of total and irreversible Antarctic ice loss.

This is the first study to model the effects of unrestrained fossil-fuel burning on the entirety of the Antarctic ice sheet. The study does not predict greatly increased rates of ice loss for this century, but found that average rates of sea level rise over the next 1,000 years could be about  three centimeters per year (more than one inch per year) leading to about 30 meters (100 feet) of sea level rise by the end of this millennium. Over several thousand years, total sea level rise from all sources could reach up to 60 meters (200 feet).

“If we don’t stop dumping our waste CO2 into the sky, land that is now home to more than a billion people will one day be underwater,” Caldeira said.

Antartic Ice 2

This chart shows how Antarctic ice would be affected by different emissions scenarios. (GtC stands for gigatons of carbon.) It is provided courtesy of Ken Caldeira and Ricarda Winkelmann.

Indonesia to Rejoin OPEC , by Reuters.

OPEC Indonesia

By Reuters 2015-09-13 19:28:10

Indonesia is reactivating its membership of the Organization of the Petroleum Exporting Countries in December, OPEC said last week, which would add almost three percent to the group’s oil output already close to a record high.

The Southeast Asian country would be the fourth-smallest producer in OPEC ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries.

Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group at the start of 2009 as oil prices hit a record high, and rising domestic demand and falling production turned it into a net oil importer.

In a statement, OPEC said Indonesia’s request to reactivate its full membership was circulated to OPEC members and following their feedback, OPEC’s next meeting on December 4 will include the formalities of reactivating its membership.

“Indonesia has contributed much to OPEC’s history,” the statement from the group’s Vienna headquarters said. “We welcome its return to the Organization.”

Indonesia’s Energy Minister, who OPEC said will be invited to December’s meeting, said the country would return as a full member.

The development is no great surprise as in OPEC terms Indonesia never really left. OPEC termed its departure a “suspension.” Ecuador, which rejoined in 2007, set a precedent for a return from suspension. OPEC sources made clear the door was always open.

Indonesia’s status as a net importer had raised the question of whether it would return as a full member given that OPEC’s Statute says any country with a “substantial net export of crude petroleum” may become a full member.

OPEC pumps more than a third of the world’s oil and is engaged in a defense of market share, having dropped its long-standing policy of cutting output to support prices in November 2014.

The addition of Indonesia’s output will boost OPEC’s production by about 2.6 percent based on July output figures towards 33 million barrels per day (bpd) – far in excess of OPEC’s 30 million bpd official target.

OPEC output has not been above 32 million bpd since 2008, before Indonesia’s exit.

Indonesia produced 840,000 bpd in July, according to the International Energy Agency, and OPEC pumped 31.88 million bpd in July according to a Reuters survey – the highest monthly rate on record from the current 12 members.

Vessel and Crew Missing, Marex

Missing vesselStock Photo

By MarEx 2015-09-09 15:04:16

The Malaysian-flagged general cargo ship Sah Lian has been missing in the South China Sea since Saturday, September 5. The vessel left Kuching on September 2 and was transporting 500 tons of general cargo. It was reported missing when it did not arrive at the Port of Limbang on schedule Saturday. The Malaysian Maritime Enforcement Agency (MMEA) has launched a search for the vessel and its 14 crewmembers.

The Sah Lian’s owner was last in contact with the ship’s captain on September 3.

While it is too early to link the missing vessel to piracy, the South China Sea has experienced a marked increase in piracy and robbery this year. In July, the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) said that incidents of piracy and armed robbery had risen 18 percent in the first half of 2015 compared to the same time period in 2014. There were 106 incidents reported between January and June 2015 and just 90 last year.

The rise in Southeast Asian piracy has prompted the Association of Southeast Asian Nations (ASEAN) to establish a permanent security presence. Last weekend, pirates attacked six vessels in the Malacca and Singapore straits. Authorities believe the same group was involved in each incident.

In August, Malaysia and Indonesia formed a joint rapid deployment team to respond to the increasing number of incidents in the region. Southeast Asia has become a hotbed of maritime piracy in the past year.

Crack Could Delay Panama Canal Opening, Marex

Panama Canal CrackBy MarEx 2015-09-09 14:59:01

Just one week after saying a crack in one of the Panama Canal’s new lock chambers wouldn’t delay its April 2016 opening, the Panama Canal Authority (ACP) has backtracked and announced that, well, maybe it could.

In a statement released September 7, the ACP announced that it is awaiting a report from the contractor, Grupo Unidos por el Canal (GUPC), on the causes and solutions for the crack that appeared in the canal’s Cocoli Locks. The ACP will reassess the canal’s projected completion date after receiving the report.

Filling of the locks began on June 22, and the ACP announced in late August that the canal had sprung a leak. ACP and GUPC officials met on August 22 to discuss the steps that would be taken to repair the crack.

“At this time, ACP has designated two independent external structural engineers to conduct an objective evaluation of the reasons for this localized issue and to assess GUPC’s solution,” the Authority said in a statement. “While this important step takes place, the ACP is encouraged by the overall progress of the program, which has now reached 93 percent completion.”

The Panama Canal expansion was initially scheduled to be completed in 2014 to coincide with the 100-year anniversary of the opening of the existing canal, but cost overruns, work stoppages and delays have pushed the opening to April 2016.

Panama hopes the $5 billion expansion will stimulate its economy by increasing trade flows to and from the U.S. East and Gulf Coasts as well as Latin America. Upon completion, vessels up to 12,000 TEUs will be able to transit the canal.

Indonesia’s Shipping Strategy Includes 22 New Ports, by Marex

Indonesian Ports

By MarEx 2015-09-09 14:18:30

As part of President Joko Widodo’s ongoing plan to establish Indonesia as a global shipping hub, state-owned port operator Indonesia Port Corporations (IPC) has announced that it will build 22 ports in the next five years. According to officials, IPC is investing more than $3.5 billion in the project, which it is financing through a combination of internal cash flow and loans.

In May, IPC raised $1.6 billion, and the company also secured a $2.5 billion loan from several foreign banks. The company expects to raise another $1 billion before 2017 and to begin construction on the first eight ports, which will each have a capacity of 2.5 million TEUs, before the end of the year. The eight ports are expected to be operational by 2018.

On September 1, the Port of Rotterdam Authority signed a partnership agreement with IPC to begin development of the deepsea port Kuala Tanjung, which will be near the city of Medan on the Strait of Malacca.

The Malaccan Strait is one of the most important shipping routes in the world. President Widodo, who was elected in October 2014, has made strengthening the maritime sector a cornerstone of his policy to promote economic growth. Kuala Tanjung is one of the primary projects in Indonesia’s national maritime strategy.

Ship Detained Over Crew Wages, Food, Hygiene , by Marex

AMSABy MarEx 2015-09-10 17:52:30
The Australian Maritime Safety Authority (AMSA) has detained the Panama flagged bulk carrier MV Apellis after an inspection revealed a number of deficiencies relating to the working conditions of the crew.
The MV Apellis is operated by Pyrsos Shipping Co Ltd and chartered by Hudson Shipping Lines.
AMSA inspected the vessel at Esperance grain jetty after receiving a complaint from the International Transport Workers Federation raising concerns about the welfare of the crew. Once on board, the AMSA surveyor discovered a number of deficiencies including:
• Seafarers not being repatriated as required by their employment agreements;
• Seafarers not being provided a monthly account of wages for the month of August;
• One crew member found to be working beyond medical restrictions;
• No working washing machine in crew laundry;
• Inadequate quality or nutritional value of food; and
• Seafarers not paid monthly as required by their employment agreements.
The vessel has been detained on the matter of non-payment of wages. The MV Apellis will remain under detention by AMSA until this deficiency is rectified.
The vessel is crewed by a mix of Indonesians and Ukrainians.
Safety Standards
AMSA’s General Manager of Ship Safety, Allan Schwartz, said that the proper treatment of seafarers is just as important as the proper maintenance of ships’ equipment – a failure in either system can lead to serious accidents.
“All ships in Australian waters need to comply with Australian standards,” Schwartz said. “Seafarers live difficult lives often spending many months at sea away from their families and friends. Any vessel which is found to be in breach of the MLC or other Australian standards will be detained by AMSA and repeat offenders risk being banned from Australian waters.”
Human Rights
“The AMSA detention of this vessel for breaches of the MLC is a clear statement to both the flag state and the owner to address the abuses occurring on board,” says David Hammond, CEO and Founder of Human Rights at Sea.
“Breaches of both labour rights and human rights appear to be common. Some of the reported issues include cruel, inhumane and degrading treatment of the crew. The question is, what will the flag state will do in this case?”
The maritime union, ITF’s Assistant National Coordinator Matt Purcell said a volunteer ITF inspector boarded the ship to meet with the crew after receiving a complaint.

“The person we sent up the gangway was distressed by what he saw and said the crew were fearful of repercussions,” Purcell said.

“Food and water is being rationed, which as well as being an outright contravention of MLC, it’s also inhumane.

“We have one crewmember, the steward on $200-a-month, another the, chief engineer, claims he hasn’t received a single cent in eight months. The majority of the crew just want to go home to their families after their ordeal.

“There is also a concern that there is not enough stores to sustain the crew on their scheduled voyage to Indonesia.”

ITF President Paddy Crumlin said he was worried there would be an increase in these incidents of exploitation as Australia’s Abbott Government moved towards further relaxing shipping regulation through amendments to the Coastal Trading Act.