compliance and enforcement a shipowner operator perspective · • psc could check the eca history...
TRANSCRIPT
Compliance and Enforcement ‐a shipowner / operator perspectiveComments on 2015 compliance
Enforcement –What can we expect?
Economics of compliance: why comply? Roger Strevens, Wallenius Wilhelmsen Logistics
WWL
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Own fleet 60 ROROs– Deep sea, global
153year heritage
‘Factory to dealership’– 4.3m moves by sea, 6m
by land
USD3bn
Enviro frontrunner
MMT - Regulatory Affairs Slide no. 4
The Importance of Strict Enforcement of the Sulphur Regulations
Niels Bjørn MortensenDirector, Regulatory AffairsMaersk Maritime Technology
EEDI
WWL 2015 compliance
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MGO Scrubbers
Except MGO, compliance solutions still maturing
Economically, best long-term compliance solutions unclear
WWL compliance approach under continuous review
Competitive motivation to minimise cost
Exploring all compliance possibilities
Sulphur Frontrunner
Cumulative SOx saving– ≈ French annual SOx
Frontrunner philosophy– ‘Exceed responsibilities today to reduce
risk and cost tomorrow’
A decade of S innovation– Deep tech. & oper. experience– Real enviro commitment
4 Stream Approach
About 4 Stream Approach
ULSFO Bunker Oil
Distillate Fuels (MGO)
Other Energy Sources (LNG)
Exhaust Gas Cleaning Systems
Leveraging low sulphur experience & expertise
Working on a broad scale– Expect need for more than one solution
Best solution for a vessel depends on:– Age– Size– Trading pattern– Design specifics
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∆ ≈ USD300/t 40-70t/d USD10-20k/d
Per vessel
WWL’s 2015 ECA perspective
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Other issues:– Extent– Impact– Uncertainty
Hard hitting regulation
Industry game changer
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Poor enforcement
EC study – 1/1000 inspection rate– Fines inadequate
WWL: ‘approx.’ 1 sulphur inspection
Bunker theory / practice mismatch
Rumours– Some buy no LS HFO– BDN’s with blank % S ?
As regulatory cost increases enforcement more than regulation alone drives compliance– Enforcement is prime driver of compliance
Weak enforcement & high costs creates temptations– Bad behaviour rewarded, good punished– Inverted regulatory dynamic
Negative for environment & health
Difficult for compliance solution providers
A level playing field?
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Detection Technology– Vessels underway– Legal standing
Jurisdiction– Territorial waters– ‘Compound infractions’
Enforcement: 2 main issues
?
Much work to do regarding enforcement on the high seas
6 November 2014Regulatory AffairsSlide no. 13
An Aframax tanker can save USD 120-150,000 on a voyagefrom the Atlantic to Primorskand back again by burningHFO instead of MGO.
50 mill. tons of oilout of Primorsk + 25 mill tons out of Ust Luga annually.
Distance sailed withinthe ECA: ~3300 NM
Legal uncertainty
• Can a coastal state issue fines for non-compliance committed outsideits waters of jurisdiction?
• EU Sulphur Directive states: Sanctions must be: • Effective• Proportionate• Dissuasive
• If applied to the last 12 NM, but not the first 800 NM, it may still begood business to be non-compliant.
06-11-2014Maersk Maritime Technology Slide no. 14
So why comply?
It’s the law and it’s not optional!
Doing the right thing, even if no one is watching
Strategy
Contractual requirement
Vessel financing
Risk mitigation
Market sentiment
Customers care
Interests– Commercial– Contractual– Strategic
Risks– Supply chain– Brand
Business ethicsFair competition
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Shipping and shippers: bound to compliance
It’s not personal, it’s business
Situation will not self-correct,
Was getting little attention and
…more likely to get worse 2020+
Unacceptable business risk
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Trident Alliance: enlightened self‐interest
Single issue shipping network Sulphur regulation Fair competition through effective enforcement & transparency
www.tridentalliance.org
Strong message Aligned: environment, health & industry
Unexpected, but welcome Now a regular headline issue
We are the Trident Alliance
23 Leading shipping companies (so far)
Wide range of company sizes Issue applies to all
See yourself here?
Approach & Initiatives
Innovation Faster, cheaper & more extensive detection Focussing of resources
Satellite control of drones, Portable fuel analysis devices
Transparency Leading by example
Greatest potential for TA
Not all regulatory problems need regulatory solution…
CommunicationAwareness ‘The tricks of the trade
Collaboration with RO’s
Enforcement: regular headline issue
The ‘tricks of the trade’ - how to cheat
• Many scenarios – explore two:
• Feign ignorance
• False BDN, false allocation tanks
06-11-2014Maersk Maritime Technology Slide no. 22
How to cheat?
• Ignorance: ”Never heard about these new rules!”
• Pro:• In a low enforcement regime, this could go on for years.• If caught, the penalty woudl probably be lower than in case of deliberate non-
compliance.
• Con:• If will only work the first time you are caught.• PSC could check the ECA history of the ship and issue penalties for previous
non-compliant trips in the ECA.
06-11-2014Maersk Maritime Technology Slide no. 23
How to cheat?• False Bunker Delivery Notes
• BDNs state: 3500 t HFO and 1500 t MGO
• Reality: 4800 t HFO and 200 t MGO
• False tank allocation • 3500 t HFO in dedicated HFO tanks
• 1300 t HFO in MGO tank (former LSFO tank)
• 200 t MGO in MGO tank
• Oil Record Book • Recording fuel consumption from MGO tank when inside ECA
• Shift to ”real” MGO upon entering port
06-11-2014Maersk Maritime Technology Slide no. 24
Bunker Delivery Notes –BDN - come in all shapes and formats
06-11-2014Maersk Maritime Technology Slide no. 25
Commercial from a stamp manufacturer:
06-11-2014Maersk Maritime Technology Slide no. 26
• When you need a stamp or seal you need it now, not next week. That’s why Walker Companies specializes in delivering customized stamps overnight and… creating corporate seals while you wait.
Summary
• Generally poor enforcement efforts to date • How will jurisdictional issues be resolved?• S Regulation has unprecedented cost, impact• Most will comply, but a temptation exists• Weak enforcement – bad for new fuels• Trident Alliance: fair competition objective,
communication focus. Join us!• Tricks of the trade – sunlight is the best disinfectant!
06-11-2014Maersk Maritime Technology Slide no. 28