Sea Views: Several operators ignore ISM deadline

A number of owners and operators are still 'resisting' the mandatory requirement to implement the International Safety Management (ISM) Code.

This is despite the looming deadline of July 1 for the final phase of its introduction that applies to general cargo vessels exceeding 500 GRT. The first phase, applicable to tankers, passenger ships and bulk carriers, took effect on July 1, 1998, yet some operators of these vessels have still avoided implementation and run the risk of Port State Control (PSC) detention in doing so.

Information from the main classification societies clearly shows that evasion of compliance is by no means uncommon in this region, and statistics suggest that a significant number of second-phase owners and operators are now delaying the introduction of the required safety management systems (SMS).

Furthermore, it would appear that some are hoping for some form of relaxation to the July 1st deadline, such as seen with STCW 95 last February, when the International Maritime Organisation (IMO) controversially recommended to PSC authorities that enforcement of STCW 95 could be waved (in certain cases) for six months, until July 31.

Present indications from the IMO suggest that for ISM phase 2, there will be no such amnesty, which gives rise to the prediction that PSC detentions for contravention of the code will show a marked increase after July 1.

Such companies that manoeuvre to avoid compliance are, undoubtedly, sub-standard companies and it should not be forgotten that sub-standard ships are, undoubtedly, operated by sub-standard companies. This, undoubtedly, underlines the increasing need for comprehensive policing by PSC authorities.

For its efforts in the introduction of PSC, the UAE deserves whole-hearted applause. But it is worrying that parallel support from other Gulf states has not been forthcoming.

The responsibility of flag administrations should also not be forgotten and for this reason, the logic behind the ban on ten flags of convenience (FOC) that was imposed last year by the UAE government is fully understandable. Yet, similar caution regarding other flag administrations, that do not operate open registries, might also be necessary.

For example, a company that operates three small, ageing tankers and one ro-ro vessel, is able to bypass the system due to family links of the owner with the flag administration of the vessels, which happens to be another Gulf state.

Furthermore, crews have gone unpaid for months and many angry creditors (in the UAE and elsewhere) are lining up for payment of debts that run into hundreds of thousands of dollars, while safety standards onboard the ships are seriously lacking.

Such antics are being tacitly condoned by this particular flag administration. This is by no means uncommon throughout the industry where less than reputable flag states are involved.

The only effective method to stamp out such maritime pariahs is for particular PSC authorities to act decisively against them and the recent suggestion made by the Maritime Transport Committee of the Organisation for Economic Cooperation and Development (OECD) to give more 'teeth' to the IMO would also help to regulate this particular area, that is of concern to the respectable maritime community.

Seacor Smit announces first-quarter results: Seacor Smit have announced net earnings for the first quarter ending March 31 of $11.4 million, or $0.55 per fully diluted share, on operating revenues of $103.6 million.

In the same period, last year, Seacor earned $12.1 million, or $0.62 per fully diluted share, on operating revenues of $93.2 million. Net earnings in the immediately preceding quarter ended December 31 were $18.6 million, or $0.93 per fully diluted share, on operating revenues of $109.8 million.

Operating revenues declined $6.1 million, or 5.6 percent, from the fourth quarter of 2001. Lower offshore marine revenues accounted for $4.7 million, or 77 per cent, of this decrease.

Fleet utilisation declined in the U.S. but increased internationally. Worldwide rates per day worked were lower except for U.S. anchor handling towing supply and overseas supply and crew vessels.

Marine related revenues also reflected lower gross income from vessel sales and time out of service while converting a supply boat to standby safety service.

Offsetting these declines were additional revenues generated by new vessels added to the fleet and the return to service of certain vessels previously relocated between operating regions. The remaining $1.4 million, or 23 per cent, decline in operating revenues resulted primarily from less retainer fees and spill response activity of the company's environmental service business.

Fifteen U.S. utility vessels were permanently removed from service at the beginning of 2002 and are being held for sale. Excluding the effect on utilization of these vessels, which did not operate in either the fourth or first quarter, worldwide fleet utilization was 80.6 percent in the first quarter of 2002, down from 83.5 percent in the fourth quarter.

Twenty-eight additional vessels, primarily U.S. utility and crew, were out-of-service at the end of the first quarter due to market conditions.

IRA adds $100 to Far East/ Mideast routes: Effective June 1, member lines of the Informal Rate Agreement (IRA) have announced that a rate restoration of $100 per TEU will take effect on trades from the Far East to destinations in the Middle East.

The increase will be applied on top of existing rates and will be applicable for all types of equipment from Far Eastern countries including Korea, China (including Hong Kong) and Taiwan to all destinations in the Middle East

Japan is excluded since rate increases already took effect there from April 1.

Members of IRA are: APL, Cosco, Hyundai Merchant Marine, Islamic Republic of Iran Shipping Lines, Maersk Sealand, Mitsui OSK Lines, NYK Line, Norasia Container Lines, Orient Overseas Container Line, P&O Nedlloyd, Pacific International Line, Senator Lines, Uniglory Marine Corp., United Arab Shipping Co., Wallenius Wilhelmsen, Wan Hai Lines and Yang Ming Marine Transport Corp.

Mumbai plans new container terminal: A new container terminal is to be built at Mumbai Port (India's fifth busiest) and private companies will be invited to build and operate it, according to The Economic Times.

The government-owned Mumbai Port Trust (MPT) has announced that bids for the $204 million, three-year project will be submitted during May and that the MPT is hoping to award a 30-year build-operate-transfer contract to a private company by December 2002.

When completed, the terminal will increase the port's annual container handling capacity from 600,000 TEU to one million TEU and will enable the terminal to handle vessels carrying 3,000 containers, compared with the current limit of vessels carrying about 700 containers.


Frank Kennedy is a marine consultant based in Dubai