The Asian Shipowners’ Forum (ASF) reiterates its call that more urgent counter piracy actions will need to be taken whilst still expecting a much awaited UN resolution on the root cause of the Somali piracy problem on land.

The ASF has proposed its Counter-Piracy Proposal to be seriously considered for adoption by the United Nations (UN). If adopted, the ASF would expect armed military personnel, sponsored and managed by the UN, to provide much needed protection to merchant ships and their crews transiting the pirate ridden waters in the Gulf of Aden and the Indian Ocean. The key idea is to use floating bases on sea to serve as embarkation or disembarkation points for these armed military personnel.

The Chairman of the ASF, Mr Noel Hart said “The international community must demonstrate a stronger commitment to their obligations under the United Nations Convention on the Law of the Sea (UNCLOS), to ensure sufficient protection and security for merchant ships and their crews serving world trade and economy.” He added, “If an effective and ultimately permanent solution is not found, we can anticipate shipping and trade between the East and the West will be severely curtailed and that longer and more expensive trade routes would have to be utilised, thus imposing an unwanted additional cost on the global community. And of course, for some regional trades, there is no alternative route”.

Mr Patrick Phoon, Chairman of ASF Safe Navigation and Environment Committee (SNEC), who has led discussions in developing this proposal, said “It is extremely urgent that the ASF proposal should be implemented as soon as possible as international shipping and trade, and most importantly of lives of the ships’ crews, are all at the mercy of these ruthless Somali pirates”.

The ASF recently participated in the meeting convened by the Working Group 3 (Strengthening Shipping Self-Awareness and Other Capabilities) of the Contact Group on Piracy off the Coast of Somalia (CGPCS) in Washington DC on 28 February 2012. At that meeting, the summary of the ASF proposal was provided to the meeting participants.

The ASF now expects its Proposal to be referred to the other Contact Group’s Working Group, Working Group 1 (Military and Operational Coordination, Information Sharing, and Capacity Building), for their deliberations.

The ASF hopes to gain support from the international shipping community on this Counter Piracy proposal.
********

For media enquiries, kindly contact:
Elvin Tan
Executive Officer
Asian Shipowners’ Forum (ASF)
Tel : (+65) 6325 4737
Email : elvintan@asf.com.sg
The Asian Shipowners’ Forum (ASF) is a voluntary organisation of the shipowners’ 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 aim of the ASF is to promote the interests of the Asian shipowning industries.
It has been estimated that ASF owners and managers control and operate nearly 50% of the world’s cargo carrying fleet.

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1. World Economy
In light of overall economic outlook emanating from the sovereign debt crisis, straining
global financial markets, weak economic growth and unacceptably high
unemployment in advanced economies, as well as elevating inflationary pressures on
emerging economies, SERC delegates recognised that the global economy was close
to plunging into a double-dip recession, unless all necessary actions are taken by
policymakers. Under these circumstances, the meeting noted the importance of
senior executives of shipping companies making their individual business decisions
based on evaluation of accurate market and trade data to support smooth flows of
global trade, coupled with considering the recent experience of the industry during the
difficult period since the collapse of Lehman Brothers in 2009.
2. Dry Bulk and Tanker Shipping
1) Dry Bulk
Delegates heard a report on recent upward trends in the Capesize market since the
summer of 2011 mainly in the wake of accelerated charter of vessels due to typhoons
occurring in the Asia region in the summer and recovering demand for iron ore shipped
to China against a backdrop of relatively lower global prices. It was reported that
although stable seaborne growth is expected to continue partly due to firm demands
for urbanisation in the emerging countries, the current recovery was unlikely to be
sustainable in the long-term and the market would be difficult over at least the next few
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PR1NOU 24th SERC (final_rev).doc
years as a direct result of the continued introduction of new vessel capacity and the
sluggish global economy. In the meantime, some positive impact on prospects of the
market was also noted resulting from accelerated scrapping of obsolete vessels and
expected further consolidation in Chinese shipyards.
2) Tanker
It was reported that the overall tanker market still remains sluggish, mainly due to
factors such as overcapacity coupled with slower demolitions and slower than
expected phasing out of single-hull vessels. In addition, other factors are higher prices
for crude oil and gasoline triggered by disruptions in the Middle East that are
undercutting recovery in petroleum demand in advanced nations, reduced number of
vessels used for floating storage as well as negative economic sentiments present in
the market, despite firm demand in emerging countries that have exceeded the level of
the previous year. The delegates noted the view that the market does not look good
for 2012 and beyond. Supply will still outpace demand, hampering market recovery
until 2016. The challenge to the industry participants will be how to respond to the
supply and demand gap.
3. Liner Shipping
1) Overall
Container business is now facing new challenges which are structurally different from
the 2009 downturn, followed by a sharp decline in cargo volumes. The meeting
recognised that liner shipping could be at risk of falling into a prolonged slump, owing
to the current supply-demand trends. Delegates shared a sense of concern that the
market could encounter further deterioration, given that it is estimated that new
capacity of 2 million TEU has been ordered since the middle of 2010.
2) Transpacific trade
As for the transpacific trade, it was reported that US containerised imports had faltered
with the third consecutive monthly drop in year-over-year volume from June 2011 due
to the sluggish US economy suffering a slow improvement in the unemployment rate
and poor performance in the housing market which has depressed consumer
spending. As for volume growth in coming years, it was reported that total volume in
the eastbound trade is forecasted to be down to 2.7% this year and 4% to 5% in 2012
on a year-on-year basis, but others had other perspectives for trade growth. Amid the
difficult time facing the liner industry, shipping companies are urged to make efforts to
provide views to customers to help them recognise the characteristics of the liner
business, especially the close correlation between the quality of liner services and the
scale of investment implemented by the shipping companies, in order to achieve a
sustainable liner business in the long term.
3) Intra-Asia Trade
In connection with the intra-Asia trade, container traffic in the trade remained relatively
brisk, with a steady growth of 5.6% to approximately 9.23 million TEU for the first eight
months in comparison with the same period in 2010. The delegates shared some
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PR1NOU 24th SERC (final_rev).doc
concerns over supply and demand trends, as well as steadily escalating costs and the
impact of port congestion. The delegates also noted that the market would continue to
be relatively firm owing to increased trade liberalisation in the Asian region and strong
demand in emerging countries. With regard to the flood in Thailand, the delegates
expressed their expectation for the earliest possible normalisation of economic
activities from current disruptions.
4. Antitrust Immunity
Reports were made on recent developments on the antitrust immunity systems for
ocean carrier agreements around the world. The delegates welcomed recent
decisions by the Singapore and Japanese governments that their antitrust immunity
systems should be maintained. It was also noted positively that APEC formally
adopted a set of guidelines related to liner shipping in June 2011, which recommends
APEC member economies continue to exempt non-ratemaking agreements between
ocean carriers from their respective competition laws. The delegates reaffirmed the
ASF’s long-standing position that the antitrust immunity system for all liner agreements
is indispensable for the healthy development of the shipping industry as well as the
whole trading industry.
5. Other Issues
1) A report was made on recent developments on Greenhouse Gas (GHG) emissions
and the delegates expressed concern about the possible risk of the entire shipping
market being covered by an emission trade scheme introduced by the EU. The
members expressed a concern about the risk that the shipping industry will become a
major source of funding for non-shipping sectors, initiated by the High-level Advisory
Group on Climate Change Financing (AGF). The delegates fully agreed that realistic
and effective measures to reduce GHG emissions should be dealt with in the IMO.
2) Reports were made regarding the accelerated increase in piracy attacks off the
Coast of Somalia and in the Indian Ocean, and delegates expressed grave concern
about this situation. It was recognised that all possible countermeasures should be
taken by governments and international organisations in order to ensure the safe
navigation of vessels transiting high risk area.
* * *
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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19th April 2012
Stop Piracy and Save our Seafarers
There would almost seem to be an unfortunate acceptance, or perhaps fatigue with the issue, of the fact that seafarers and their families are still being severely affected by the threat and danger of piracy. This is not only in the waters off Somalia, where 13 vessels and 197 seafarers are currently being held hostage1, but also and increasingly in the waters off Benin and Nigeria.
The Seafarers Committee of the Asian Shipowners Forum, which met today in Manila, the Philippines once again expressed its strong concern at the continuing threat of piracy attacks on commercial shipping. While thanking the navies in the area for their support and the various Governments for their commitment to the eradication of the threat of piracy, the Committee continued to have deep concern about the effects on seafarers and their families of the traumatic and lasting effects of piracy attacks and long periods being held hostage.

Mr. Li Shanmin, the Chairman of the Seafarers Committee, said “The situation continues to be a serious crisis, one that deeply affects the mental health of seafarers and their families as well as the carriage of world trade. We demand, that the threat to our seafarers and their families is not forgotten, and that all possible is done to alleviate the situation”.
The 17th Interim meeting of the ASF Seafarers Committee was hosted by the Filipino Shipowners Association (FSA), and held in Manila, the Philippines, under the chairmanship of Mr. Li Shanmin, Deputy Managing Director of COSCO Manning Cooperation Inc.. Attending the meeting were the ASF Secretary-General and delegates from the shipowner associations in China, Chinese Taipei, Hong Kong, Japan, Korea and FASA, as represented by the Philippines, Singapore and Malaysia. During the meeting, the Committee also discussed other issues of concern to Asian shipowners.

~ends~

The Asian Shipowners’ Forum is a voluntary organisation 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.
__________
1Source: IMB Piracy Reporting Centre, 18th April 2012

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The 15th Interim Meeting of the ASF Ship Recycling Committee was held in Jiaosi Yilan ,Taiwan on 23 March 2012. The meeting was attended by the Secretary General of the ASF and eleven delegates from the ASF member associations of China, Chinese Taipei, Hong Kong, Japan and FASA as represented by Indonesia, Malaysia and Vietnam. The Association of Asian Classification Societies made a presentation to the meeting. The attendance list is attached.

The meeting was hosted by the National Association of Chinese Shipowners (NACS) and chaired by Mr. Bronson Hsieh, the Chairman of the ASF SRC.

The delegates expressed their appreciation to the NACS for arranging the meeting in Jiaosi Yilan, Taiwan.

1. The SRC is pleased to note that the 2012 Guidelines for Safe and Environmentally-Sound ship Recycling and the 2012 Guidelines for the Authorization of Ship Recycling Facilities have been adopted at the IMO 63rd Marine Environment Protection Committee (MEPC63) meeting held in February 2012 to assist in the implementation of “Hong Kong International Convention for the Safe and Environmentally-Sound Recycling of Ships, 2009”.
The SRC encourages IMO member governments to ratify the Convention as early as possible.

2. The ASF SRC encourages ASF Owners to develop and maintain the Inventory of Hazardous Materials (IHM) for their ships and recycle their ships following as much as possible the requirements of the Hong Kong Convention at acceptable and competent ship recycling yards.

3. In this regard, the SRC recognizes the importance of sharing information on the development of IHM (i.e.; recognized organization, cost, time period, total number of approved IHMs, etc.) among the ASF members.

4. The adoption of Hong Kong Convention led to an increasing awareness towards safe and environmentally-friendly ship recycling in the world shipping industry, and it will require serious enhancement of the green ship recycling capacity which satisfies the standards of the Hong Kong Convention.
The SRC notes, however, that there is concern that the availability of green ship recycling yards and their capacity would be short in the near future.
In this respect, the SRC strongly encourages the major ship recycling countries to improve the ship recycling yards in their countries.

5. The SRC also agreed to further strengthen the exchange of information with concerned parties and the report of situation in each country on ship recycling.

6. Finally, it was confirmed that Asian shipowners, as major players in the global shipping industry, will continue to discuss ways in which shipowners can promote safer and more environmentally-sound ship recycling.

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The Asian Shipowners’ Forum (ASF) 22nd Interim Meeting of the Safe Navigation & Environment Committee (SNEC) was held in Singapore on 26 March 2012. The Meeting was chaired by Mr. Patrick Phoon, President of Singapore Shipping Association and attended by shipowners’ representatives of the ASF.
During the Meeting, the Committee expressed great anger and disappointment at the ongoing threat of piracy and armed robbery, especially those posed by Somali pirates in the Somali Basin, Arabian Sea and the Indian Ocean. The Committee also expressed great concern at the increasing threat of piracy off the coast of West Africa, especially off Benin and Nigeria. In addition to the grave threat to seafarers, the threat of maritime piracy has prompted various organizations to increase costs in response.
Recalling the Counter-Piracy Proposal1 by the ASF at the Contact Group on Piracy off the Coast of Somalia (CGPCS) Meeting in Washington on 28 February 2012, the Committee strongly urges the United Nations (UN) to promptly adopt the ASF proposal to deal with the Somali piracy problem.
The ASF proposal, initiated by the SNEC, calls for the setting up of floating bases to serve as embarkation or disembarkation points for armed military personnel to board merchant ships, and to provide them and their crew with the much needed protection when they transit the pirate-infested waters. The armed military personnel, if the proposal is adopted, will be expected to be sponsored, managed and supervised by the UN.
The SNEC Chairman, Mr Patrick Phoon said, “Over the past 5 years, nearly 200 ships have been hijacked and over 3000 seafarers have been taken hostage by Somali pirates. Shipowners have also been held to ransom. This is a very serious criminal activity which simply cannot be tolerated and must be stopped!”
1 Please see ASF Press Release and attachment issued on 7 March 2012. http://asianshipowners.org/2012/03/25/asf-proposes-new-mitigation-measure-for-combatting piracy/
22nd SNEC Press Release – 26 March 2012 2
He added, “The UN has to step in urgently to help the international shipping community. I will further urge all States and Maritime Nations in the UN and the International Maritime Organisation (IMO) to cooperate and to take stronger, pro-active action, both on-shore and at sea, thus honouring their obligations under the UN Convention on the Law of the Sea (UNCLOS) to ensure sufficient protection and security for merchant ships and their crews.”
As a result of the absence of any effective and unified long-term action on the part of the world’s states, shipowners are being forced to take independent measures and steps to ensure the safety and well-being of the seafarers on board their ships.
The Committee also reaffirmed its strong commitment to the protection of life and property at sea and to the preservation of a pollution-free marine and atmospheric environment.
The Committee recalled that, in June 2011, the IMO had adopted amendments to MARPOL Annex VI which will give effect to mandatory measures to be implemented by shipowners to reduce emissions of greenhouse gases (GHGs) from international shipping. The measures represent the first ever mandatory global greenhouse gas reduction regime for an international industry sector.
In this regard, the Committee welcomed the adoption of guidelines intended to assist in the implementation of the mandatory Regulations on Energy Efficiency for Ships in MARPOL Annex VI, which will enter into force on 1 January 2013. This once again demonstrates that the IMO is eminently capable of delivering a global solution for shipping that has clearly defined short-term and long-term goals that are realistic, pragmatic and implementable.
During the Meeting, the Committee also considered and discussed other issues of concern relating to maritime safety and environment protection.
* * * * *
For any queries relating to this Press Release, please contact:
Mr. Daniel Tan,
Secretary
ASF Safe Navigation & Environment Committee
Tel: (65) 62225238
Email: fasa@pacific.net.sg
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
22nd SNEC Press Release – 26 March 2012 3
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.

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At the 17th Interim meeting of the Asian Shipowners Forum (ASF) Ship Insurance and Liability
Committee (SILC), held in Hong Kong on 15th March 2012, representatives of Asian shipowners
expressed their strong concern about the effect of recently introduced sanctions on innocent third
parties and the global shipping industry.
Sanctions are increasingly being introduced and frequently updated and revised, with an increasing
number of countries being targeted. The sanctions that have been introduced would appear to be
intentionally vague in nature, with the apparent attempt to encourage companies to trade with an over
abundance of caution. Sanctions are issued by many bodies and in many ways are illogically different
in wording and nature. Transgression might occur in a way that was, at the time, unpredictable, so
many will find that it is better to play safe. As Robert A. Ho, the Chairman of the meeting remarked,
“Shipping is a global business, and as such can find itself on the wrong side of sanctions for entirely
the wrong reasons. We call upon all concerned to issue sanctions only through the United Nations, to
better ensure consistent wording and application”.
One example is the recent European sanctions, as contained in Council Decision 2012/35/CFSP dated
23rd January 2012. These sanctions prohibit the provision, directly or indirectly, of insurance and
reinsurance related to the transport of Iranian crude oil, petroleum products or petrochemical products.
While it is understandable that the prohibition of hull or cargo insurance would be an effective addition
to the sanctions, the provision of liability insurance is a different matter for the reason that liability
insurance protects innocent third parties. The Committee calls upon the European Union to provide a
derogation in the implementing Regulation to exclude the application of the prohibitions on
insurance/reinsurance to the provision of compulsory and/or third party liability insurance cover and its
underlying reinsurance arrangements.
The 17th Interim meeting of the ASF Ship Insurance and Liability Committee was hosted by the Hong Kong
Shipowners Association, and held in Hong Kong under the chairmanship of Robert A. Ho, Fairmont
Shipping (HK) Ltd. The Chairman of the SILC, Mr. George Chao, was unable to attend due to illness, and
members sent their best wishes for his speedy recovery. Attending the meeting were the ASF Secretary-
General and delegates from the shipowner associations in China, Chinese Taipei, Hong Kong, Japan, Korea
and FASA. During the meeting, the Committee also discussed other issues of concern to Asian shipowners.
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.
~ends~

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