highlighting the serious concerns and continuing problem of piracy and ship hijacks in the Gulf of Aden, the Somali Basin and in the Indian Ocean. The letter expressedly condemns the criminal acts and dangers of Somali pirates on maritime security and the safety of international shipping and trade, The ASF strongly urges the UN and IMO, both in their individual and collective capacities, to act within their supreme power immediately to counter the state of lawlessness and to restore the safety of maritime navigation in the Gulf of Aden and off the coast of Somalia and in the Indian Ocean.

Mr Johnson W. Sutjipto, the Chairman of the ASF said, “The situation has gotten out of hand – the lack of action on the part of the international community has resulted in an almost 500% increase in the number of attacks over the past 3 years. As such, the ASF views this as a matter of extreme urgency, and strongly urges the adoption of an united and dynamic approach to deal with the root of the piracy problem in the Gulf of Aden and off the coast of Somalia. ”

Mr S S Teo, the Chairman of the ASF Ship Navigation and Environment Committee, remarked, “Many ships and crews have been kidnapped in these 2 years by those Somali pirates for extorting heavy ransom from shipowners to secure their release. In addition to the massive ransoms paid by the shipping community, the financial burdens associated with maritime piracy include, among other things, excess fuel costs and higher insurance premiums. This is an utterly unreasonable burden and cost to the shipping industry - more decisive action must be taken immediately! ”

Mr Yasumi Kudo, Chairman of the ASF Shipping Economics Review Committee, added, “Given the inherent volatility of some commodity markets, high profile incidents of maritime piracy can have serious economic impacts far beyond their immediate target. The Gulf of Aden is an important stretch of waters where many fully laden ultra large crude oil carriers (ULCC) transit from the Middle East to Asia. These pirate attacks, if allowed to persist, can result in serious environmental consequences and also cause further fluctuations in the global price of crude oil.”

Mr Li Shanmin, the Chairman of the ASF Seafarers Committee also commented, “We must also consider the immeasurable human cost. We must protect the innocent lives of our seafarers and to give their families a peace of mind when their close-kin sail the sea. We need the UN and IMO to take immediate steps to counter this problem as it has also aggravated the shortage of seafarers’ supply with such a situation. Many potential seafarers are now afraid to go to sea!”

Mr Yuichi Sonoda, the ASF Secretary General, echoed, “The Asian shipping industry as well as the global shipping industry is extremely concerned about the situation. The current lawlessness and the lack of a credible deterrent appears to have encouraged the spread of pirate attacks to other areas of Africa and elsewhere. The ASF wants the UN and IMO to take urgent and effective action to remove the intolerable threats on international shipping and their effects on the smooth flow of global trade.”

For further information, please contact Mr Yuichi Sonoda, Secretary General of the Asian Shipowners’ Forum, at the contact address shown in the header. Please also visit ASF’s website www.asianshipowners.org.

* * * * *

Notes

The Asian Shipowners’ Forum (ASF) is a voluntary organisation of shipowner associations and its aim is to promote the interests of the Asian shipping industry. It is estimated that the ASF represents about 50% of the world’s cargo carrying fleet.

The ASF consists of the following 8 members:
Australian Shipowners Association (ASA)
China Shipowners’ Association (CSA)
Federation of ASEAN Shipowners’ Associations* (FASA)
Hong Kong Shipowners Association (HKSOA)
Indian National Shipowners’ Association (INSA)
Japanese Shipowners’ Association (JSA)
Korea Shipowners’ Association (KSA)
National Association of Chinese Shipowners (NACS)

*FASA is composed of:
Filipino Shipowners’ Association (FASA-FSA)
Indonesian National Shipowners’ Association (FASA-INSA)
Malaysian Shipowners’ Association (FASA-MASA)
Myanmar Five Star Line (FASA-MFSL)
Singapore Shipping Association (FASA-SSA)
Thai Shipowners’ Association (FASA-TSA)
Vietnam Shipowners’ Association (FASA-VSA)

Between the ASF AGMs, the ongoing work is carried out by the five Standing Committees;
Seafarers Committee (SC)
Shipping Economics Review Committee (SERC)
Ship Insurance and Liability Committee (SILC)
Safe Navigation and Environment Committee (SNEC)
Ship Recycling Committee (SRC)

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1. World Economy
The SERC delegates shared the common view that the major developing economies, including China and India, have retained their strong economic growth, in contrast to the slow recovery from recession in developed countries, and will continue to be the main focus for the revival of the global economy. The delegates agreed that it was important for carriers to develop an accurate perception of the overall trade situation through better access to reliable trade information and understanding of macroeconomic trends in order to improve decision making and avoid misjudgements. Bearing this in mind, the meeting reaffirmed the importance for CEOs of Asian shipping companies to calmly consider the facts regarding the impact of the current global recession and lessons learned from this time as they review their business operations.

2. Dry Bulk and Tanker Shipping
1) It was recognised that the dry bulk market had made a remarkable recovery, following on from the historical low record of the Baltic Dry Index in December 2008, and currently remains firm, despite turbulent swings, mainly due to the constantly growing volumes of imports of iron ore and coal by China and India. The delegates noted that Chinese demand would drive the 2010 global seaborne trade in iron ore past 1 billion tonnes for the first time, and consequently the concern over the possible huge number of new buildings being delivered in 2010 could be mitigated.

2) As for the tanker sector, the market remained sluggish, regardless of vessel types and trades in 2009, partly due to the low demand for crude oil and petroleum products in developed countries and the slow retirement of single-hull tankers. It was recognised by some delegates that the market in 2010 would likely remain on a softening trend for the time being, in light of the high supply of new buildings.

3. Liner Shipping
1) All the delegates recognised that the entire container shipping industry remained in unprecedented difficulties and seemed to face a deficit of approximately US$20 billion in 2009. Under the current circumstances, the meeting recognised that it was critical for shipping companies to facilitate a constructive relationship with shippers to obtain their correct understanding on the severity of the current crisis and subsequent impacts.

2) In connection with the Intra-Asia trade, it was reported that the container cargo movement has maintained a year-on-year increase since September 2009, thanks to the upward trend of the Asian economy since 2nd Quarter of 2009, although the total volume in 2009 appeared to slightly trail 2008. Taking into account the expected further increase of cargo movement by the launch of the free trade agreement between China and ASEAN on 1st January 2010, the delegates shared the view that demand in the Intra-Asia trade as a whole would likely maintain a positive trend, but noted that the market was still fragile and could face volatility due to increased market entrants as a result of current low charter rates.

3) As for the US / Far East trade, the delegates noted that the supply and demand balance and general space utilisation were at a more favourable level since the end of 2009, as a result of the scale reduction of ship operations made in response to the sluggish US economy. Concern was also expressed that there still remained a huge capacity laid up globally at around 10% of the total container fleet, which could easily affect the brittle supply and demand balance in the trade, depending on the extent of any reintroduction of capacity.

4. Antitrust Immunity
With regard to the anti-trust immunity system for ocean carrier agreements, reports were made on the recent developments in countries and regions such as US, EU, India and China. Recognising the ASF’s long-standing stance that carrier agreements contribute to an improvement of service quality/efficiency and that anti-trust immunity system is absolutely indispensable for healthy development of the shipping industry as well as the whole trading industry, the delegates agreed to make continued efforts to seek the understanding of concerned parties such as governments and shippers for the necessity of the immunity system and important role of carrier’s agreements.

5. Environmental Issue
The meeting noted the latest developments on environment issues discussed at the IMO, which will have huge impacts on the operations of shipping companies. The members unanimously recognised that it was essential for the shipping industry, as part of its corporate social responsibility, to work together to address the reduction of gas emissions from ships. Anticipating that fuel oil prices will continue to increase, due not only to normal market forces, but also expected fuel-levies such as a low-sulphur surcharge, the delegates shared the common understanding of the need for developing new technologies for the improvement of fuel-efficiency. The members also took note that slow steaming was one effective mean to reduce emission and save fuel consumption. In reference to any implementation of slow steaming, shipping companies were encouraged to consult with shippers and make their utmost efforts to obtain shippers’ understanding.

6. Future Role of SERC
The Chairman proposed to review the future role of SERC from various standpoints and the delegates agreed to exchange their views in the next SERC meeting at the 19th ASF to be held in Hong Kong on 25 May 2010.

7. Other Issues

1) With regard to Panama Canal Tolls, the delegates express their grave concern over the increasingly high tolls. The meeting agreed to make a submission in the name of the ASF to the Panama Canal Authority seeking a more meaningful reduction of a longer duration in light of the protracted economic crisis faced by the world shipping industry.

2) The delegates also exchanged their views on recent topics surrounding the shipping industry, such as US and Asian regulatory developments, transportation security issues, and the WTO negotiations on maritime transport services.

* * *
The ASF Shipping Economics Review Committee (SERC) is a forum for senior executives of Asian shipping lines to review macroeconomic trade information and developments, as they relate to shipping and trade. The objective of the SERC is to improve the quality of executive decision-making by the review of available macroeconomic data and the sharing of perspectives on major trade and shipping policy issues.

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2.
The meeting was attended by 19 representatives of shipowners’ associations from China, India, Japan, Korea, Chinese Taipei and ASEAN, as represented by the Federation of ASEAN Shipowners’ Associations (FASA) which is composed of the shipowners’ associations of Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
3.
Mr. S.S. Teo, President of Singapore Shipping Association chaired the SNEC meeting on behalf of FASA.
4.
During the meeting, the Committee considered and discussed various current issues concerning the safe navigation of ships and the protection of the marine environment.
5.
On the Piracy and Armed Robbery problem manifested worldwide, the Committee expressed grave concern on the almost 40% increase in the number of pirate incidents in 2009 as compared with 2008. In particular, the Committee noted that over 50% of the reported incidents had taken place in waters off Somalia, in the Gulf of Aden and the Red Sea, with 47 vessels hijacked and 867 crew taken hostage.
Recognizing the very serious threat of imminent pirate attacks and hijacks in the Gulf of Aden, the Meeting strongly urged all Governments and the United Nations to take more actions to deal with this problem and to help protect international shipping through the Gulf of Aden and off the coast of Somalia. Meanwhile, the Committee agreed that all transiting ships should remain highly vigilant and adopt the Best Management Practices approved by the International Maritime Organisation (IMO) to tackle this pressing problem. Shipowners should adopt the voluntary reporting system provided by the Maritime Security Centre – Horn of Africa (MSCHOA) and to seek the assistance of the escort and security services provided by the multi-national naval forces stationed in that area.
18th SNEC Press Release – 19 March 2010 1
18th SNEC Press Release – 19 March 2010 2
6
The Committee noted that there is currently a proposal by the United States to ban the payment of ransoms for acts of piracy.
The Committee expressed great concern that in the absence of any effective efforts to stop piracy, a ban on ransom payments would have a very adverse effect on the crews being held hostage by pirates. Such a proposal will also place additional burdens on the families of the crew.
The Committee further urged each member Association to convey their concerns to their respective governments.
7
The Committee expressed grave concern that the National Hydrographic Office of India had, in early February 2010, issued a NAVAREA VIII warning for the arbitrary closure1 of, for all intents and purposes, the entirety of the Bay of Bengal to all flights and shipping activities on 7 and 9 February 2010. It is the Committee’s opinion that such very short notice and unilateral nature of the closure of the Bay of Bengal, a major shipping lane, is not in accordance with IMO regulations.
8
Whilst the Committee supports every effort to enhance maritime safety and the protection of our marine environment, the Committee is however worried that the Ballast Water Convention 2004 might enter into force very soon. Whilst there are a number of IMO-approved ballast water treatment systems available, these systems are not necessarily operationally effective for all types and sizes of ships. As ships not in compliance with the provisions of the Convention may be barred from a State party to the Convention once it enters into force, the lack of suitable systems for all types and sizes of ships might have serious repercussions on the industry.
Furthermore, the Committee also expressed concern that the installation of a ballast water treatment systems might have unintended consequences with regard to a vessel’s energy efficiency.
As such, the Committee hopes that States would take due consideration prior to ratification as a number of operational issues remain to be addressed.
9
The Committee noted with regret that adoption of the Copenhagen Accord at the 15th United Nations Climate Change Conference (COP15) last December provided little guidance with regard to international shipping.
The Committee recognises that the onus now lies with the International Maritime Organisation to take a pro-active role with regard to the development of a road map aimed at reducing Greenhouse Gas Emissions from ships so as to avoid the imposition of unilateral regulations by individual States.
1 Based on Indian newspapers reports, the closure of the Bay of Bengal was apparently for the test launch of India’s Agni III ballistic missile.
18th SNEC Press Release – 19 March 2010 3
In closing, the Committee reiterated that any measures adopted must meet IMO principles.
10
The members of the Committee expressed their appreciation to the SSA for hosting the 18th Interim Meeting of the SNEC in Singapore.
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Editor’s note:
The Asian Shipowners’ Forum is a voluntary organization of the shipowner associations of Australia, China, Chinese Taipei, Hong Kong, India, Japan, Korea and the Federation of ASEAN Shipowners’ Associations comprising shipping associations of ASEAN countries. The aims of the ASF are to promote the interests of the Asian shipowning industries. Between annual ASF meetings, the ongoing work is carried out by the five Standing Committees; the Shipping Economics Review Committee, the Seafarers Committee, the Ship Recycling Committee, the Safe Navigation and Environment Committee, and the Ship Insurance and Liability Committee. It has been estimated that ASF owners and managers control and operate nearly 50% of the world’s cargo carrying fleet.
For any further questions, please contact:
Mr. Daniel Tan,
Secretary
ASF Safe Navigation & Environment Committee
Tel: (65) 62225238

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Attending the meeting were the Secretary-General of the ASF and delegates representing the
shipowner associations of China, Chinese Taipei, Hong Kong, Japan, and the Federation of
ASEAN Shipowners’ Associations (FASA), as represented by delegates from the shipowner
associations of Indonesia, Malaysia, and Singapore.
The meeting was preceded by a half-day seminar on The Rotterdam Rules, attended by the
delegates to the meeting as well as by members of the Hong Kong Shipowners Association, the
Hong Kong Maritime Law Association and the Hong Kong Shippers Council.
The Committee discussed the Rotterdam Rules, in particular the several areas of concern that
have been expressed by shipowners and shippers. While the Committee was of the opinion that
widespread ratification of the Rules would provide global consistency, which is desirable, it
acknowledged that there remain some aspects of the Rules that shipowners continue to feel
uncomfortable with. Members agreed to continue to further study the Rules with their
governments.
The Regulation of the People’s Republic of China on the Prevention and Control of Marine
Pollution from ships has been causing concern amongst the international maritime community,
for the reason that, although the Regulation came into force on 1st March 2010, no implementing
code or regulations have yet been developed. The Committee noted that some ASF members
had been in touch with the authorities in the PRC, and had been assured that until the
implementing codes had been published, full enforcement of the Regulation would be postponed.
The Committee expressed its deep concern over the wide scope of the proposed United States
sanctions against the exportation of refined petroleum products to Iran. The potential
regulations would seem to indicate that all domestic and foreign entities that might be involved
in shipping such cargoes to Iran, or even insuring or reinsuring the cargo or ships, could be
subject to the sanctions. While the sanctions would be through domestic legislation, the effect
of the sanctions would have international effect. The Committee is of the strong opinion that
legislation that would seek to affect the international community should only be promulgated
through the United Nations, and encourages all Governments to express their concern at the
proposed unilateral action by the United States.
The Committee once again expressed its deep concern at the treatment of seafarers who are
unfortunately involved in maritime accidents. While recognising that local legal procedures
must be followed, the Committee is concerned that seafarers who are involved in accidents are
being treated as criminals as a response to and to satisfy public concern about the effects of the
incident, even when it is clear that there has been no recklessness, criminal intent or obvious
fault involved. There would seem to be many incidents where the only fault of the seafarers
would appear to be in the wrong place at the wrong time. The Committee urges all
Governments, particularly those in the developed world, to reconsider the harm they are doing
both to the recruitment of future seafarers as well as to the reputation of their legal systems by
politicising such incidents and treating seafarers with little regard for their human rights and
being assumed guilty until proven innocent.
The next meeting of the Committee will be held in Hong Kong on 25th May 2010, just before
the 19th annual meeting of the Asian Shipowners Forum.
For more information, please contact the Secretary of the Committee, Arthur Bowring, at the
contact address shown in the header.
Editor’s note:
The Asian Shipowners Forum consists of 8 Shipowner Associations in the Asian region, being
those from Australia, China, Chinese Taipei, Hong Kong, India, Japan, Korea and the
Federation of ASEAN Shipowners’ Associations (FASA), which comprises the Shipowner
Associations of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The
Secretariat of the ASF is located in Singapore. The aims of the ASF are to promote the interests
of Asian shipowners and operators. Between annual ASF meetings, ongoing work is carried out
by five “S” Committees; the Shipping Economics Review Committee, the Seafarers Committee,
the Ship Recycling Committee, the Safe Navigation and Environment Committee, and the Ship
Insurance and Liability Committee. It has been estimated that ASF Owners and Managers
control and operate around 50% of the world’s cargo carrying fleet.

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