Saturday, 24 January 2009

Industry Snapshots

Indonesian ferry sinks with up to 300 on board. In the latest in a string of ferry disasters in Asia, the “Teratai Prima” sank last Sunday off Sulawesi Island in heavy seas. Thirty five survivors have been found. Observers say that the ferry was carrying considerably more than the 267 people manifested, and that the death toll may be closer to 300. There have been rising concerns about ferry accidents in Asia, particularly in the Philippines and Indonesia. The Teratai Prima ferry was on a passage between Pare Pare in South Sulawesi and Samarinda in East Kalimantan when it sank at night, when most passengers were asleep. Survivors have claimed that the boat capsized in rough seas. "I felt that the ferry was listing to the left, then suddenly it turned upside down," said Yulianus Mangande, who was picked up by fishermen. “I had to swim in the dark in heavy seas until the morning." The ship’s Captain has been severely criticised for his decision to sail despite a storm warning being in force. In 2007, up to 50 people may have perished when a fire broke out on a ferry plying between Jakarta to Bangka. This was preceded by more than 500 deaths in a December 2006 casualty when another Indonesian ferry carrying 600 people sank on a voyage between Java and Borneo. Just a few months ago, in June 2008, more than 850 people lost their lives in the “Princess of Stars” capsize in a Philippines storm.

After COSCO, Armada (Singapore) Pte faces the fallout of excessive speculation in shipping derivatives, with losses estimated at $375 million. The figures are “projected losses if the market stays the way it is now,” Singapore based Managing Director Tommy Jensen Rathleff told Bloomberg. They represent a “conservative estimate,” he said. Armada is now under Singapore court protection. Freight Forward Agreements, essentially hedging tools, have been used in the last few years by many operators to speculate wildly in rising markets, according to analysts. The chickens are now coming home to roost. Armada operates around 50 vessels and its clients include biggies ArcelorMittal and BHP Billiton. It has lost most of the money, a cool $240 million, gambling on Panamax FFA’s. The company has now filed a “Chapter 15 petition” in New York, Bloomberg reports, seeking protection from US creditors. Amongst the big names that have filed similar petitions are Ukraine’s Industrial Carriers, Britannia Bulk Holdings and Atlas Shipping of Copenhagen. Armada, now bankrupt, had posted a profit of $131 million last year.

32 Seafarers die in Pirate attacks in 2008, according to the annual piracy report of the International Maritime Bureau. The IMB says the 2008 figures for hijackings and deaths surpass all figures recorded by the Piracy Reporting Centre since it began its worldwide reporting function in 1992. The increase is mainly because of the rampant attacks off the Somali coast, with September being the worst month. Alarmingly, the IMB says that the pirates are now better armed and more prepared to attack the crew than ever before. Fortunately, other areas of the world have witnessed a decline in such attacks. The IMB’s Capt. Mukundan praised Indonesian efforts in this connection, saying that the country “should be applauded for its sustained efforts in curbing piracy and armed robbery in its waters.” The Malacca Strait witnessed just two attacks last year; however, robberies in the anchorages of Bangladesh and in Tanzanian ports, particularly Dar es Salaam, continue to be a concern.

Netherlands to bring five Somali pirates home for trial Radio Netherlands reports that prosecutors aim to use an Article in the Netherlands’ criminal code “which has never before been used”. The announcement comes even as coalition and other warships struggle to decide what to do with captured pirates, as legal systems worldwide are known to be limited in cases of pirate prosecution. The Netherlands Article 381 of the criminal code, which addresses piracy, is likely to be used for the first time. According to this Article, the captain of a pirate ship can be sentenced to up to 12 years, while crewmembers can receive up to nine years imprisonment. It is felt that Netherlands has jurisdiction in this case, as the pirates were caught when they attacked a ship flying the Netherlands Antilles flag. Meanwhile, around six pirates of the many fleeing the VLCC “Sirius Star” with a 3 million dollar ransom faced instant justice recently. They drowned when their boat capsized in heavy seas. One pirate body was washed up ashore with $153,000 stuffed in his pockets. “Money for nothing”, said a seafarer wag in Mumbai.



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