A group of 21 Chinese firms are suing CNOOC Ltd and ConocoPhillips for compensation of over 141 million yuan ($22.80 million) for losses suffered due to oil spills at the duo’s operations in 2011, according to court documents. Leaks at the Penglai 19-3 oilfield, a joint exploration project by the two oil majors, were first discovered in June 2011. The spills polluted 6,200 square km of water in the Bohai Bay area before the field was finally sealed in late October that year.

The aquaculture farmers said ConocoPhillips and CNOOC failed to inform the public quickly about the spills, causing them to continue using polluted seawater in their sea cucumber farms, according to court documents posted on the Tianjin Maritime Court’s microblog page on Wednesday. Lawyers from ConocoPhillips China said the plaintiffs did not have legal certificates for seafood farming and that the compensation amount sought by the farmers was too high, according to court documents of the trial, which opened on Tuesday. China’s State Oceanic Administration ordered ConocoPhillips and partner CNOOC in April 2012 to pay 1.683 billion yuan ($272 million) in compensation for damage done to the region’s marine ecology following the spill, as well as to fund environmental protection efforts in the Bohai Sea.

The oil firms had also reached an agreement with the Ministry of Agriculture in January 2012 to pay 1 billion yuan to settle compensation claims stemming from oil spills in north China’s Bohai Bay. 

ConocoPhillips has a 49-percent stake in the field, which is 51-percent owned by China’s top offshore oil and gas firm CNOOC. The field, with daily production of about 160,000 barrels, was restarted in February 2013. ($1 = 6.1869 Chinese yuan renminbi)

On 11 December, three former employees of ST Marine of Singapore were charged in the State Courts of Singapore under the provisions of the Prevention of Corruption Act (PCA) and the Penal Code. They are Chang Cheow Teck, Mok Kim Whang and Ong Tek Liam. 

Chang was the President of ST Marine from March 2008 to April 2010, and was the President of Singapore Technologies Aerospace from May 2010 to June 2014. He has been charged with a total of three charges under section 6(b) read with section 29(a) of the PCA. Mok was the Senior Vice President (Tuas Yard) of ST Marine from 1 June 2000 to 31 July 2004. He has been charged with one charge under section 6(b) read with section 29(a) of the PCA. 

Ong was the Group Financial Controller and Senior Vice President (Finance) of ST Marine from April 2007 to December 2012. She has been charged with a total of 118 charges under section 477A of the Penal Code.  

The charges against the former employees are not expected to have any material impact on the consolidated net tangible assets or consolidated earnings per share of the ST Engineering Group for the financial year ending 31 December 2014, said the company in a statement. 

“ST Engineering is committed to maintaining high standards of corporate governance and recognizes that fraud is detrimental to the reputation of the ST Engineering Group. ST Engineering does not condone fraud, including corruption and bribery, and is fully committed to proactively mitigating the risk of its occurrence.”

The charges follow an investigation by the Corrupt Practices Investigation Bureau (CPIB) that commenced in 2011.

Three holes were torn in the hull of a bulk carrier when tropical storm Queenie sent the loaded vessel smashing onto its berthing dolphin in Bohol, the Philippines. The now-stuck MV Goldeneye fell victim to huge waves. Its side was scraped and hull punctured, according to a Philippine Coast Guard (PCG) official. The ship’s bunkers must be offloaded and the vessel refloated before it can be pulled off its grounding and towed to a drydock, reports SeaShip News. However, the PCG has concerns that waves caused by another tropical storm, Ruby, could free the vessel and cause an oil spill from the 300 tonnes of bunkers onboard.

Putting Philippines’ east coast towns at risk, Bunkerworld commented that “a spill of that magnitude is enough to trigger a national disaster.” The MV Goldeneye was loaded with limestone at the time of the incident.

India is speeding up a navy modernisation programme and leaning on its neighbours to curb Chinese submarine activity in the Indian Ocean, as nations in the region become increasingly jittery over Beijing’s growing undersea prowess.

Just months after a stand-off along the disputed border dividing India and China in the Himalayas, Chinese submarines have shown up in Sri Lanka, the island nation off India’s southern coast. China has also strengthened ties with the Maldives, the Indian Ocean archipelago.

China’s moves reflect its determination to beef up its presence in the Indian Ocean, through which four-fifths of its oil imports pass, and coincides with escalating tension in the disputed South China Sea, where Beijing’s naval superiority has rattled its neighbours. “We should be worried the way we have run down our submarine fleet. But with China bearing down on us, the way it is on the Himalayas, the South China Sea and now the Indian Ocean, we should be even more worried,” said Arun Prakash, former chief of the Indian navy.

“Fortunately, there are signs this government has woken up to the crisis,” he said. “But it will take time to rebuild. We should hope that we don’t get into a face-off with the Chinese, that our diplomacy and alliances will keep things in check.”

Prime Minister Narendra Modi’s government has ordered an accelerated tendering process to build six conventional diesel-electric submarines at an estimated cost of 500 billion rupees ($8.1 billion), in addition to six similar submarines that French firm DCNS is assembling in Mumbai port to replace a nearly 30-year-old fleet hit by a run of accidents.

The country’s first indigenously built nuclear submarine – loaded with nuclear-tipped missiles and headed for sea trials this month – joins the fleet in late 2016. In the meantime, India is in talks with Russia to lease a second nuclear-propelled submarine, navy officials told Reuters.

The government has already turned to industrial group Larsen & Toubro Ltd, which built the hull for the first submarine, to manufacture two more nuclear submarines, sources with knowledge of the matter said.

Elsewhere in the region, Australia is planning to buy up to 12 stealth submarines from Japan, while Vietnam plans to acquire as many as four additional Kilo-class submarines to add to its current fleet of two. Taiwan is seeking U.S. technology to build up its own submarine fleet.

Japan, locked in a dispute with China over islands claimed by both nations, is increasing its fleet of diesel-electric attack submarines to 22 from 16 over the next decade or so.

OUTNUMBERED

India’s navy currently has only 13 ageing diesel-electric submarines, only half of which are operational at any given time due to refits. Last year, one of its submarines sank after explosions and a fire while it was docked in Mumbai.China is estimated to have 60 conventional submarines and 10 nuclear-powered submarines, including three armed with nuclear weapons.

Ma Jiali, an expert at the China Reform Forum’s Centre for Strategic Studies which is affiliated with the Central Party School, said Beijing’s top concern in the Indian Ocean was safeguarding the passage of its commodities, especially oil. “There are many voices in India who believe the Indian Ocean belongs solely to India, and no other country belongs there. That line of thought is common – but of course it shouldn’t be viewed like that. Our (China’s) view is that there should be dialogue and discussion between China and India.” With India building its navy to about 150 ships, including two aircraft carriers, and China holding around 800 in its naval fleet, the two are more likely than not to run into each other, naval officials and experts say.

David Brewster, a strategic affairs visiting fellow at the Australian National University, said India will do everything it can to recover its dominant position in the Indian Ocean. It may seek naval cooperation with Japan and Australia, and expand a military base on the Andaman Islands which lie about 140 km (87 miles) from the Malacca Straits, he said. “India sees the presence of any Chinese naval vessel as an intrusion. There is a big ramp-up in their presence, which is clearly intended to send a message to India,” said Brewster.

India has engaged in intense diplomacy with Sri Lanka about the Chinese submarine presence, reminding it that New Delhi must be informed of such port calls under a maritime pact they signed this year along with the Maldives. India has also muscled into an $8 billion deep water port that Bangladesh wants to develop in Sonadia in the Bay of Bengal, with the Adani Group submitting a proposal in October. China Harbour Engineering Company, an early bidder, was the front-runner.

“If China continues down this path and continues with this level of presence in the Indian Ocean then the Indians will feel they need to respond,” said Brewster. (C) Reuters 2014.

By Dr Vijay Sakhuja

Six years ago, in November 2008, a group of Pakistan-based terrorists landed at unsecured waterfronts in Mumbai , the financial capital of India, and attacked public places such as hotels, restaurants, and a railway station. Although the Indian security forces were quick to respond, the attack, popularly referred to as 26/11, exposed three significant gaps in India’s maritime security apparatus: a. the porous nature of India’s coastline; b. the poor surveillance of the maritime domain; and c. the lack of inter-agency coordination.

Post the 26/11 attacks, the Indian government undertook a number of proactive measures to restructure coastal security and push the defensive perimeter further away from the coast into the seas. The focus was on building national maritime domain awareness (NMDA) grid via a number of organisational, operational and technological changes. The Indian Navy has now set up the National Command Control Communication Intelligence (NC3I) network that hosts the Information Management and Analysis Centre (IMAC).

It connects 41 radar stations (20 Indian Navy and 31 Coast Guard) located along the coast and on the island territories, and helps collate, fuse and disseminate critical intelligence and information about ‘unusual or suspicious movements and activities at sea’. There are plans for additional coastal radar stations to cover gap/shadow zones in the second phase; these are currently addressed through deployment of ships and aircraft of the Indian Navy and the Coast Guard. he IMAC receives vital operational data from multiple sources such as the Automatic Identification System (AIS) and the long-range identification and tracking (LRIT), a satellite-based, real-time reporting mechanism for reporting the position of ships. This information is further supplemented by shore based electro-optical systems and high definition radars. Significantly, maritime domain awareness is also received through satellite data.

There are 74 AIS receivers along the Indian coast and these are capable of tracking 30,000 to 40,000 merchant ships transiting through the Indian Ocean. The AIS is mandatory for all merchant ships above 300 tons DWT and it helps monitoring agencies to keep track of shipping and detect suspicious ships. However the AIS a vulnerable to ‘data manipulation’. According to a recent study, the international shipping manipulates AIS data for a number of reasons, and the trends are quite disturbing. In the last two years, there has been 30 per cent increase in the number of ships reporting false identities. Nearly 40 per cent of the ships do not report their next port of call to prevent the commodity operators and to preclude speculation. Interestingly, there is growing tendency among merchant ships to shut down AIS, and ‘go dark’ and spoofing (generating false transmissions) is perhaps the most dangerous. It can potentially mislead the security forces who have to respond to such targets and on finding none, leads to loss and wastage of precious time and human effort which adversely affects operational efficiency of the maritime security forces. At another level, small fishing boats can complicate maritime domain awareness; however, it is fair to say that they can also be the ‘eyes and ears’ of the security agencies. Indian authorities have undertaken a number of steps, including compulsory identity cards for fishermen; registration of over 200,000 fishing boats and tracking them through central database; security awareness programs, etc. Furthermore, Marine Police Training Institutes have been established. They are coordinated by the apex National Committee for Strengthening Maritime and Coastal Security (NCSMCS) that is headed by the Cabinet Secretary. The Indian government has also drawn plans to reinforce the NMDA via multilateral cooperation. It is in talks with at least 24 countries for exchanging information on shipping to ensure that the seas are safe and secure for global commerce. India has placed maritime security high on the agenda through active participation in the Indian Ocean Rim association (IORA), the Indian Ocean Naval symposium (IONS), the East Asia Summit (EAS), the ASEAN Defence Ministers Meeting (ADMM) Plus. Additionally, it is in talks with other countries to institutionalize intelligence exchange among the respective security agencies.

The Indian Navy and the Coast Guard have been at the helm and have developed a sophisticated strategy that involves joint exercises, hot lines, exchange of intelligence and training with a number of navies. It will be useful to explore if the NC3I is suitably linked to the Singapore-based Information Fusion Centre (IFC) established at Changi Command and Control Centre (CC2C), which has received much acclaim as an effective MDA hub. It is fair to argue that weak legislations can compromise maritime security. In this connection, it is important to point out that the Coastal Security Bill drafted in 2013 is yet to be tabled in the Indian Parliament. Unfortunately, the draft Piracy Bill placed before the law makers in 2012 lapsed due to priority given to other issues.

Source: http://cimsec.org/; This article has been republished with permission.

Dr Vijay Sakhuja is the Director, National Maritime Foundation, New Delhi. The views expressed are those of the author and do not reflect the official policy or position of the National Maritime Foundation. He can be reached at director.nmf@gmail.com.

This article is courtesy Institute of Peace and Conflict Studies (IPCS), New Delhi and originally appeared at http://www.ipcs.org/article/india/india-reinforces-maritime-domain-awareness-but-challenges-remain-4764.html.

On November 27 at or about 1030 hours (local time), the Royal Thai Navy (RTN) reported to the ReCAAP ISC that the hijacked tanker Srikandi 515 has been identified and located at approximately 9 nm off Narathiwat province, Thailand by the RTN and Thai Marine Police. The Thai authorities also apprehended eight perpetrators onboard Srikandi 515.

The ship was also reportedly repainted and renamed from “Srikandi 515” to “Chong Li 2”. The palm oil cargo onboard the vessel was apparently left intact. The vessel was subsequently escorted back to Songkhla, Thailand for further investigation.

On October 9, the Indonesia-registered product tanker, Srikandi 515 was boarded by suspected pirates in Sampit waters, Central Kalimantan, Indonesia. Srikandi 515 was en route to Gresik, East Java, Indonesia from Sampit, laden with 3,100 tons of palm oil. The perpetrators reportedly blindfolded and tied the crew; took control of the vessel and sailed in a north-westerly direction.

On October 22, the assailants forced the crew of Srikandi 515 onto a life raft and abandoned them in the middle of the sea. The next day, the crew was found and rescued by Vietnamese fishermen, who brought them to Chendering, Malaysia. It was later reported that the crew was transferred to the Indonesian Embassy in Kuala Lumpur, Malaysia on October 35.

The ReCAAP ISC commends the RTN and Thai Marine Police for the successful apprehension of the perpetrators as well as the recovery of the vessel and cargo. Investigation of the incident is currently ongoing and the ReCAAP ISC is working closely with the ReCAAP Focal Point (Thailand) to establish what had transpired onboard Srikandi 515 between 9 Oct 14 and 27 Nov 14.

IMO adopts a new set of regulations on navigation in polar waters now in force

 United Nations’ International Maritime Organization (IMO) has adopted global, binding regulations to enhance safety of navigation in polar waters. After several years’ intense negotiations, the IMO Maritime Safety Committee (MSC) has today adopted a new set of regulations on navigation in polar waters, including the waters around Greenland. The IMO hereby takes a great step towards making the Polar Code in its entirety internationally binding. The Polar Code covers all aspects of navigation in polar areas – from the construction of ships, the training of crews and navigation to improved coordination of search and rescue operations. The Polar Code will apply to passenger ships, and it will also apply to cargo ships with a gross tonnage above 500. Director General of the Danish Maritime Authority Andreas Nordseth states: ”I am pleased that, with the adoption of the navigational safety issues of the Polar Code, we have taken yet another great step towards an internationally binding set of regulations to enhance the safety of ships navigating polar waters.” Before the Polar Code becomes effective, the environmental provisions on navigation in polar areas must also be adopted by the IMO Environment Protection Committee (MEPC) in the spring of 2015. However, the provisions have already been approved by the MEPC in September 2014. Therefore, it is expected that the entire Code will be adopted to become effective at the turn of the year 2016/2017.

[Sayaringo STaGE a next-generation LNG carrier]

 Mitsubishi Heavy Industries, Ltd. (MHI) has completed development of the “Sayaringo STaGE,” a next-generation LNG (liquefied natural gas) carrier. The Sayaringo STaGE was developed as a successor to the “Sayaendo1,” the company’s highly acclaimed LNG carrier evolved from carriers with Moss-type2 spherical tanks that offer a high level of reliability. The adoption of apple-shaped tanks (ringo being the Japanese word for “apple”) has enabled a near 16% increase in LNG carrying capacity without changing the ship’s width, while incorporation of a hybrid propulsion system has boosted fuel efficiency by more than 20% compared to the Sayaendo (and more than 40% vis-à-vis earlier carriers). Leveraging the Sayaringo STaGE’s capacity for transporting North American shale gas safely and efficiently, MHI plans to undertake extensive business activities promoting the new vessel as a strategic product among its LNG carrier offerings.

Whereas the Sayaendo has a continuous cover over spherical pea-shaped tanks, the tanks adopted on the Sayaringo STaGE have an apple-like shape with the upper half bulging more than the lower half. The new apple-shaped tanks constitute an improved version of high-reliability Moss-type tanks, and they have been adopted on the Sayaringo STaGE as part of MHI’s initiative to develop a vessel in the New Panamax3 category, i.e. capable of passing through the newly expanding Panama Canal which is expected to go into service early in 2016. The new structural configuration succeeds in efficiently increasing LNG carrying capacity. STaGE, an acronym deriving from “Steam Turbine and Gas Engines,” is a hybrid propulsion system combining a steam turbine and engines that can be fired by gas. The components of the Sayaringo STaGE system are the “Ultra Steam Turbine plant” (UST), a highly efficient reheating steam type marine turbine developed independently by MHI, a dual-fuel diesel engine capable of operating on both gas and oil, and an electric propulsion motor. Plant efficiency has been significantly improved through the UST’s effective use of the engine’s waste heat, resulting in a propulsion system enabling high-efficiency navigation throughout a full range of speeds. The basic design of the Sayaringo STaGE has now been completed, with the vessel’s LOA (length overall) set at 297.5m, width at 48.94m, depth at 27.0 and draft at 11.5m. Four apple-shaped tanks are featured. The developed design provides 180,000 cubic meters (m3) in total LNG tank capacity, but capacity can be set in accordance with the customer’s transport needs. Since MHI developed the Sayaendo in 2011, orders have been steady, commencing with the first order that called simultaneously for two vessels. To date a total of eight vessels have been ordered, including one ordered through MI LNG Company, Limited, a joint venture with Imabari Shipbuilding Co., Ltd. Now, with the Sayaringo STaGE as a successor ship to the Sayaendo offering increased transport capacity and greater fuel performance, MHI aims to conduct brisk marketing activities for its next-generation LNG carriers delivering superlative environmental performance in its quest to make a robust contribution to the global LNG transport industry. 1 “Sayaendo” takes its name from the peapod-shaped continuous steel cover over its spherical aluminum tanks. Integrated with the ship’s hull, this innovative structure was developed by MHI with technical support from Aker Arctic Technology Inc. of Finland. 2 Moss-type LNG carriers use independent spherical cargo tanks to transport LNG. The spherical tanks are supported by a cylindrical skirt integrated with the hull and covered with a hemispherical steel cover attached to the main deck. 3 New Panamax indicates the maximum size of ships navigable through the newly expanding Panama Canal. Maximum dimensions are 366m in LOA, 49m in width and 15.2m in tropical freshwater (FTW) draft.

Sometimes captains face demands for bribes or facilitation payments at a port before shore passes are granted. Sometimes they are fined for fabricated issues relating to their crew’s nationality, their documentation or the inspection of their vessel. 

And sometimes these requests come with the threat of violence or physical detainment.

The rationale of the people requesting money:  Everyone does it.  It’s not bribery; it’s courtesy. If I don’t bring something back I will lose face.

I need it; they can afford it.

According to the United Nations, corruption adds 10 percent or more to the cost of doing business in many parts of the world. Corruption can interrupt investment, restrict trade, reduce economic growth, and distort the facts and figures associated with government expenditures. Moreover, corruption in certain countries contributes to

poverty and income inequality.

According to Transparency International, in very corrupt states, the most corrupt sectors are very often the police, the bottom rung of the legal system, and the political parties, the very top of the political structure. 

“This is not something you can tackle on your own as one company or as one shipping nation. It requires collective action by the industry and also close cooperation with inter-governmental organizations,” says Maria Bruun Skipper, senior adviser for the Danish Shipowners’ Association. The association is one of 43 members of the Maritime Anti-Corruption Network (MACN), a global business network working toward its vision of a maritime industry free of corruption. Established in 2011 and formalized in 2012, MACN consists of vessel owners, cargo owners and service providers. 

MACN and its members promote good corporate practice in the maritime industry for tackling bribes, facilitation payments, and other forms of corruption. MACN also collaborates with governments and international organizations to identify and mitigate the root causes of corruption in the maritime industry and to develop sustainable solutions. Last month the Danish Shipowners’ Association hosted a conference as part of Danish Maritime Week that saw shipowners speak openly about the challenges they face. For example, a leading bulk shipping company that runs a tramp service spoke of the difficulties for trampers to make arrangements in advance. This can make them easy targets. The crews may not be familiar with local cultures and routine practices. Therefore they might see it as easier to pay a bribe than argue with officials. 

Negotiating power can depend on time pressures, negotiating skills, threats of violence and threats to the business. “Within MACN we have developed an online training toolbox for captains to demonstrate best practice when they are met with a demand for a facilitation payment. It is for the captain and also the operator on shore because the captain needs shore support,” says Skipper. “It is important that the captain is prepared. He should know what he can do, the relevant regulations, and he should also be aware that there might be some ways of handling the situation at a personal level that can help. This might be how he addresses the port official. Be assertive, polite and confident. Try to explain that the decision is not up to him by saying things such as: I trust you are aware that you are asking me to break my company’s rules.”

As well as the toolbox, MACN has been initiating action on shore. The group chose Nigeria for a series of consultations and surveys to identify specific challenges. The local authorities were willing to be involved. A sector reform in Nigeria in 2004 has been followed up more recently by a national development strategy focused on improving competitiveness.

The findings of the study demonstrated a number of organizational problems, including the amount of red tape involved. For example, 142 signatures can be required to process a cargo in Lagos. The officials have broad discretionary powers and limited accountability. Integrity is not emphasized, and corruption is widely accepted and rationalized. Pressure from higher ranks to comply with established corrupt practices is also frequent. 

As a result of the collaborative project, MACN is encouraging the development of an anti-corruption policy, improved controls and training. The organization will continue to work with authorities in Nigeria to help them change the current situation.

MACN is considering taking the issue of bribes to IMO. “The IMO has not really been active on this, but at MACN we are talking about how we can bring the issue into the political arena,” says Skipper. The benefits for the shipping industry are significant: increased efficiency, reduced cost and reduced risk of fraud, blackmail and other security threats. 

MACN is continuously seeking commitment from United Nations agencies and other international organizations on how they can endorse and officially support initiatives going forward.

The Seven Principles upheld by MACN members:

Compliance Program Requirements 

Members should create and maintain an anti-corruption compliance program that reflects and is designed to address the risks pertinent to the company’s business. Senior management and/or the board of each member should give explicit and visible support to the anti-corruption compliance program.

Members should confer responsibility for the anti-corruption compliance program on trustworthy officers who are sufficiently independent and empowered to fully implement the program.

Proportionate Procedures

Members should have clearly articulated policies and procedures that comply in full with the laws which apply to them and, as a minimum, prohibit all forms of corruption and give specific guidance on facilitation payments with the ultimate aim of their elimination. The policies and procedures should be proportionate to the risks faced by the various parts of each member, as well as the nature, scale and complexity of the organization’s activities, and should apply to all employees as well as third parties that act on behalf of the member.

Risk Assessment

Members should assess external and internal corruption risks on a regular basis and document their findings. 

Training and Communications

Awareness of policies and procedures should be reinforced through communications and training to employees and, where appropriate, third parties. A record should be kept of all training provided.

Monitoring and Internal Controls

The anti-corruption compliance program should include features designed to prevent and detect incidents of bribery, facilitation payments and other forms of corruption through appropriate monitoring and auditing protocols. Internal controls should be implemented to protect the integrity of financial and accounting procedures such that the company keeps fair and accurate books, records and accounts. The program itself should be audited regularly and improved or updated as necessary .

Reporting, Discipline and Incentives

Members should provide employees with access to methods for asking questions and/or reporting concerns. Those asking questions or reporting concerns in good faith should be able to do so without fear of retribution. Members should investigate credible reports of improper behavior and should implement appropriate corrective actions when necessary. Compliance with the anti-corruption compliance program should be encouraged through incentives for proper behavior and, where necessary and appropriate, enforced through discipline for improper behavior.

Due Diligence

Members should conduct risk-based due diligence on counterparties as well as in respect of the hiring and oversight of third parties and business partners. The due diligence should include an anti-bribery commitment from third parties

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