Friday, 28 August 2009

Industry Snapshots

Egyptian fishermen turn the tables on Somali pirates, killing at least two of them and sailing home with the rest imprisoned on board. Held for four months, the 34 fishermen were taken hostage by Somali pirates in April. Egyptian Deputy Foreign Minister Ahmed Rizq said in a statement that the crew "have safely entered the Red Sea waters on their way home with all 34 fishermen on board, along with eight Somali pirates." There are conflicting reports about the rescue; one says that the fishermen attacked the Somali pirates with machetes, tools and the pirates' own guns. Some reports say that seven bodies of pirates have been found washed up on Somali beaches, and that the owner, Hassan Khalil, of the boat hired local Somali gunmen to effect the rescue. Egyptian security agencies may also have been involved. Incidentally, two of the owner’s sons are part of the fishermen crew. One of them, Hamad, told Egyptian media over the phone that the pirates had treated them harshly, and that many of the crew were “in a horrible mental state".

Kolkata Port Trust revives plans to develop Sagar Island port for handling dry bulk and container cargo. Continuing problems of navigation at Haldia have resulted in the Shipping Ministry looking at Sagar as an alternative option, media reports suggest. Earlier plans of putting up a container terminal at Diamond Harbour have come to nought, as there are difficulties getting the required land from the Ministry of Defence.

Maersk CEO Nils Smedegaard Andersen says that shipping will lag global recovery. Talking to reporters in Copenhagen, the CEO of the world’s biggest container company felt that although the worst was ‘probably over’, any shipping recovery would be slower due partly to shipping capacity increases. "Given deliveries of vessels in container shipping and tankers, it is likely that the shipping cycle will be somewhat slower in improving, but we are optimistic that the things that we are doing for the long term are right," he said. Maersk has reported huge losses for the first half of this year; its cost cutting program, mainly involving workforce paring, has saved it between $1 billion and $1.5 billion so far.

Vijay Chibber report recommends major changes to the Shipping Ministry. A panel set up early this year has proposed measures for
increasing efficiency at major ports. Areas covered include port corporatisation, delegation of power, land use and captive use of port facilities, public private partnerships (PPP), dredging, environment and security clearances. Particular recommendations include increased operational freedom to the management of major ports, a suggestion that the government accord one time clearance for security firms and a country wise clearance for crews, besides commercialisation and corporatisation of major ports in a timeframe, amendment of the Major Port Trusts Act, 1963 and the Indian Ports Act, 1908. Additionally, in a move that may have far reaching consequences, the panel recommends an alternative to the present PPP bidding: the ‘Swiss Challenge Method’ bidders selection. The report also says that the procedures for present PPP projects need to be simplified to enable quick decisions. Dredging should, as far as possible, be granted by long term depth guarantee contracts, with preference given to the Dredging Corporation of India for maintenance dredging. Industry analysts say that many of these changes have been on the anvil for a while and that some of these reforms are needed urgently so that ports can make speedy and pragmatic decisions.


Friday, 21 August 2009

The strange case of the ‘Arctic Sea’ hijack

The tale of the ‘Arctic Sea’ gets curiouser and curiouser. The missing Russian cargo ship was reportedly sighted last weekend off the Cape Verde islands in the Atlantic. However, confusion still reigns, with the Russian ambassador to the islands having denying similar reports earlier. In addition, at the time of writing this report, the Arctic Sea’s managers say that they are "unaware of any report that the ship has been located".

The last known contact with the Arctic Sea was in the end of July. The ship had left the Finnish port of Pietarsaari on July 23 en route to the Algerian port of Bejaia with a cargo of 6500 tonnes of sawn timber. Owned by Solchart Management AB owned and Maltese registered, the ship reported trouble on July 24, saying that up to a dozen masked and armed men claiming to be police officers boarded the vessel at about 3 a.m. and tied and assaulted the 15 member crew. "The members of the crew were allegedly assaulted, tied, gagged and blindfolded and some of them were seriously injured," the Maltese maritime authority had said in a written statement at the time. The crew reported that the attackers left the Arctic Sea in an inflatable lifeboat after many hours.

During the hijack, the ship was seen to be performing ‘extreme manoeuvres’, according to a spokeswoman for the Swedish police. The managers reported the hijack to police in Helsinki, Finland, on July 28; the same day, the ship made a routine VTIS report to the Dover Coast Guard as it passed through the English Channel, but did not mention anything unusual. Crew members last spoke to Swedish police on August 31 when Swedish authorities called the ship and spoke to someone they think was the Captain. The ship, believed off the French Coast at the time, then seems to have then vanished until she was sighted by a spotter plane off Portugal. Interestingly, European Union officials say that a second attack on the ‘Arctic Sea’ was reported off the Portuguese coast, giving rise to speculation that this was carried out by stowaways who had remained on board after the first attack.

Meanwhile, Russian naval vessels ‘authorised to use force’ were hunting the Arctic Sea headed by its patrol ship ‘Ladny’. The Maltese Maritime Authority revealed later that the ship was headed towards the Atlantic. It was also revealed that NATO was monitoring the ship’s movements.
In fact, the Russian news agency Itar Tass reports that the original tip off giving the Arctic Sea's location came from NATO. In the end, five Russian naval vessels, including frigates and nuclear submarines were reportedly sent off Cabo Verde to intercept the vessel.

The full story may well be known by the time Marex goes to print. Speculation is rife in marine circles, however, that the ship may have been hijacked by drug or arms smugglers, as Cabo Verde is a key transit point for cocaine trafficking from Latin America. Some say that the crew could well have a hand in the disappearance of the ship, given that the incident happened in the well monitored waters of Europe.

Ingemar Isaksoo, a Swedish police investigator, told a news agency: “This is the first time I have heard about something like this happening in Swedish waters.” A spokesperson for the Swedish Coast Guard echoed this sentiment, saying that the last known hijacking of a vessel in Swedish waters occurred in the 16th century.

Just before going to press, we have learnt that the Russian's now say that the Arctic sea has been retaken. According to the Russian Defence Minister, eight people of Estonian, Latvian and Russian nationality were arrested during the operation to liberate the Arctic Sea. Investigations revealed that on July 24, 2009, these people boarded the Arctic Sea and using the threat of arms and demanded that the crew change course. The Arctic Sea then sailed on to an African route indicated by the aggressors and turned off its navigation equipment.

Mr Serdyukov reported on the measures taken in accordance with the President's instructions concerning the disappearance of the Arctic Sea and the Russian crew on board. Earlier on during the meeting, Mr Serdyukov reported to President Medvedev that the crew of the Arctic Sea has been released.

One has a feeling that this mystery has still a long way to go before all is revealed.

Industry Snapshots

India detains North Korean Ship on suspicion that it may be carrying nuclear material. The detention follows the MV Mu San dropping anchor off Hut Bay Island in the Andamans without permission. When discovered, she led the Coast Guard on a six hour chase after which she was detained. The ship, bound for Iraq, had entered Indian waters on August 5. Indian officials later confirmed that a preliminary investigation by nuclear scientists did not throw up any radioactive material on board the ship, which is carrying a large sugar consignment. Ashok Chand, a senior police officer in India's Andaman and Nicobar islands, told Reuters that investigations were still in progress. Security agencies are also investigating a call by the vessel to Karachi in Pakistan last year. North Korea is known to have helped Pakistan develop its missile capability and its military nuclear programme, and recent reports have indicated that the same unholy ties exist between the governments of Pyongyang and Myanmar today. Indian authorities confirm that the ship may be taken to the Indian coast for a more thorough investigation. U.N. member states are authorised to inspect North Korean ships and destroy any goods transported in violation of a Security Council resolution following the North Korean nuclear tests earlier this year. "With increasing reports of North Korea helping Myanmar build a nuclear reactor, any vessel floating in Indian waters without a possible reason will be checked and India is rightly concerned," said Naresh Chandra, a former envoy to Washington.

66 feared dead in Tonga ferry disaster, one that the Prime Minister described as "devastating" for the tiny Pacific island with a population of just 100,000. According to eyewitness reports, the ageing ferry ‘Princess Ashika’ capsized at high speed on a routine run. Amongst the casualties were British, French, Japanese and German nationals. Dive teams from New Zealand and Australia were used to try to locate survivors in the wreck, which is lying in 35 metre deep waters. Hundreds of relatives protested angrily at the shipping company's wharf in Nuku'alofa claiming that the 34 year old Princess Ashika should not have been allowed to sail; the ferry had been plagued with breakdowns ever since being purchased from Fiji a few weeks ago. Reports say that the ferry capsized after some cargo on board shifted.

Baltic Dry Index has worst week since October as Chinese demand for coal and iron ore collapses. The index dropped 17 percent during the week, its worst since last year’s October crash. “The Chinese have backed off and it’s starting to show in the number of shipments this month,” says Gavin Durrell of Island View Shipping. Many analysts have been predicting that the recent Chinese coal and iron ore imports that caused the index to rally earlier this year were too good to last, and that speculation driving the BDI was bound to end in tears for some. The recent boost in Chinese imports meant that demand for bulk carriers jumped, bolstered by the port congestion at many Chinese ports. Meanwhile, Chinese steel importers are said to be negotiating annual iron ore prices with producers.

Hong Kong based operators agree to pay $10 million
in Cosco Busan case, says US Department of Justice. Fleet Management has pleaded guilty to violating the Oil Pollution Act of 1990 as well as obstruction of justice and false statements charges in the Nov 2007 allision of the Cosco Busan with the Bay Bridge after the ships departure from the Port of Oakland, San Francisco. The pilot, Capt. John Cota, has already been sentenced to ten months in jail and community service for his part in the incident. Reports say that Fleet would also have to implement a compliance plan for better training of officers on their ships. The company admitted that the crew of the ship did not have adequate knowledge of some of the ship's navigational equipment, besides other shortcomings.



Friday, 14 August 2009

A Case of schizophrenia at sea

Edward D’Cunha, a Goregaon resident, joined SCI as a trainee in 1993. In 1997, following a schizophrenic episode on board a vessel, he underwent medical treatment and rejoined the company. D’Cunha says he was subsequently forced to quit SCI in 2000 after more episodes; he has now moved the courts, asking that his job be given back to him. He wants to be reinstated either as a Second Officer on a SCI offshore supply vessel or be given an office job.

In the initial stages of the disease years ago, D’Cunha often saw ghosts during the day, suffered memory lapses and was paranoid about stalkers in a crowd. His psychiatrist (and founder of Maitri, a support group for schizophrenia) Dr. Harish Shetty diagnosed schizophrenia. Undergoing treatment, D’Cunha managed the library system at ABN AMRO’s Business Process Outsourcing centre in Lower Parel for a while.

Schizophrenia is a mental disorder that manifests itself in the patient experiencing a distortion of reality. All senses may get affected: sight, hearing, taste, smell and touch. Auditory hallucinations, paranoid or bizarre delusions or disorganized speech and thinking with significant social or occupational dysfunction are not uncommon. Caused by chemical (dopamine) imbalance in the brain, it is a disease hidden from public view: India alone has 7 million sufferers. The only way out is prolonged medical treatment and counselling, which helps.

Edward D’Cunha has now moved the High Court in Mumbai, claiming that SCI forced him to resign in 2000: his father Stanley had earlier claimed that Edward signed a resignation letter when he was suffering a schizophrenic episode. Justices Ranjana Desai and Amjad Sayed have reportedly asked SCI orally whether it could reconsider its decision and accommodate D'Cunha, who had suffered repeated episodes before his departure from the company almost a decade ago.

D'Cunha had pleaded with the Maharashtra disability commissioner in 2002, asking that SCI should take him back because it had not complied with the provisions of the Persons with Disabilities Act. The plea was dismissed by the disability commissioner in 2006 on the grounds that Edward had resigned voluntarily. However, Pradeep Havnur, Edward’s lawyer, says that the law was not followed in this case and that D'Cunha was incapable of taking a decision on his resignation at the time. Under the PWD Act, mental illness is treated as a disability. Havnur told the Times of India recently, "The Act has a specific provision that bars discrimination against a person employed with the government who acquires a disability during service.''.

Under such circumstances, the law says that employers must shift the person who has a disability to another post with the same pay scale and service benefits in case he is found unable to perform his present duties because of disability contracted during service. If no such job is available, he should be kept on a supernumerary post until a suitable post is available or he attains the age of superannuation.

Many in the industry will sympathise with the D’Cunha family here, but it does not need to be said that a mentally medically unfit Second Officer can well be a huge hazard to safety at sea. The solution may turn out to be alternate office job that D’Cunha is pleading for, but that is for the courts to decide now. Regardless, this case may well set a precedent for the rights of Indian seamen who develop a disability during their employment: physical or mental.



Friday, 7 August 2009

‘Theotokos’ Chief Engineer joins Master and Chief Officer, pleads guilty.

A Greek Chief Engineer pleaded guilty on August 1 in New Orleans for violating environmental laws and making false statements to the U.S. Coast Guard, the US Justice Department announced in a statement. Georgios Stamou, Chief Engineer of the Dominican registered M/V Theotokos, pleaded guilty to one felony violation of the Act to Prevent Pollution from Ships and one felony violation for making a false statement. He joins the Captain, Panagiotis Lekkas and the Chief Officer Charles P. Posas who pleaded guilty to multiple felony counts in mid July. In fact, the Filipino Chief Officer became the first individual to be charged under a US law designed to combat the introduction of invasive species into national waters.

The Master and Chief Officer have pleaded guilty to four felonies on pollution, ship safety and obstructing a US Coast Guard investigation. When the USCG boarded the 1984 built, 71,242 dwt Theotokos in New Orleans for a Port State Inspection in October 2008, two different violations were found. A summary of the first: The ship’s crew had discovered a two foot long crack in the rudder and reported it verbally to the Owners earlier, in China. Ballast water from the Afterpeak tank was leaking out of this crack. To make matters worse, oil from a fuel tank was found leaking into the Afterpeak. The Master, in clear contravention of Marpol rules, ordered that this tank be pumped overboard at sea. Not only that, he ordered that the sounding pipe to the tank be obstructed, so that if a sounding were taken by PSC inspectors, water would show on the sounding line and not oil. The USCG was not fooled, and the Master and Chief Officer were detained and charged under two different statutes that address invasive species as well as pollution.

In the second violation and according to court documents, C/E Stamou found, at some point after he joined the Theotokos, that the oily water separator had stopped working. Although he spoke with a Superintendent on a voyage from Korea to Panama and informed him that the OWS was not operational, the Chief Engineer also ordered the crew to discharge bilge waste directly overboard knowing fully well that this was against regulations . Additionally, none of the discharges was recorded, as required, in the vessel’s oil record book, which was presented to the USCG at the PSC inspection.

On October 1, 2008, both these infringements were found by the USCG and the crewmembers charged. All three have now pleaded guilty. Hearing for sentencing has been scheduled for Stamou for November 5 this year. Sentencing for both Lekkas and Posas is set for October 14.

The US Port and Waterways Safety Act (PWSA) requires that a vessel operator must report all hazardous conditions to the Coast Guard prior to arrival in a U.S. port. A hazardous condition does not have to be a definitive danger but need only be “a condition that may adversely affect the safety of any vessel, bridge, structure or shore area or the environmental quality of any port, harbour or navigable waterway of the United States”. A high profile campaign has been ongoing for four years, one that has resulted in hundreds of millions of dollars in fines levied on defaulting ships. Mariners who face charges as a result are usually found guilty for presenting falsified oil record books to authorities in a US harbour instead of the high seas pollution itself.

In another conviction last month, Spanish company Consultores de Navegacion were ordered to pay a fine of more than $2 million and serve three years of probation for criminal violations related to the overboard discharge of oil contaminated bilge waste on the high seas by the chemical tanker M/T Nautilus.

Says John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, “Illegal pollution from ships continues to be a problem. Failing to properly dispose of bilge waste and lying to Coast Guard inspectors is unacceptable and those who choose to ignore the law face prosecution”.




Piracy to rise as monsoon ends , says Combined Maritime Task Force 151. The coalition of navies from around the world guarding shipping off Somalia and in the Gulf of Aden have warned Masters of an anticipated increase in piracy incidents when the southwest monsoon ends, calling for merchant ships to increase their vigil against the menace. Recent rough weather in the Somali Basin have meant fewer attacks on vessels transiting the area but that is likely to change as the monsoon wanes and the high seas improve. "The prior preparation and vigilance of merchant mariners at all times of day and night is more important now than ever," warned Turkish Rear Adm. Caner Bener who is the commander of the force, adding that CTF 151 is “constantly adapting the way we do our business as the pirates adapt and modify their tactics." Around 30 ships and aircraft from well over a dozen countries are on patrol off the Somali coast. Bener’s statement comes after a Commanders’ meeting was held at sea recently. Echoing his warning, his Deputy, Commander Tim Lowe, says, "In this environment, the importance of merchant mariners as first line defenders against pirates is absolutely vital. The crews of those merchant vessels that have employed evasive manoeuvring and other defensive measures to protect their ships and their cargoes have proven to be more successful at evading attack." CTF151 says that slow ships with low freeboards that do not keep proper lookout are most likely to be attacked.

Shipping Minister discloses statistics in Lok Sabha. The Hon’ble Union Minister of Shipping, Mr. G.K. Vasan, told the lower house that about 1,00,000 Indian seafarers, of whom about 30,000 are working on Indian ships, are in the profession today. About 8,000 to 10,000 fresh seafarers join the profession every year, two thirds of who join foreign flagships because of better wages, a better taxation regime, shorter contract periods and continuity after being sponsored by foreign companies. Mr. Vasan’s written statement was in reply to a question raised in the Lok Sabha.

Indian fleet growth to remain under pressure this year, say analysts, with access to funds being a major drawback. Experts believe that the Union Budget has dampened industry spirits given that the tax sops and an easing of credit that was expected did not materialise. Industry sources say that although companies like Essar Shipping are trying to raise capital to buy ships as asset prices are low, the overall market sentiment remains bleak. The pre budget proposals sent to the Finance Ministry of a Rs 10,000 crore corpus for fleet expansion in the country are forgotten and funds remain scarce. Alarmingly, almost forty percent of the 9 million GRT ageing Indian fleet needs to be replaced in the next few years, but the raising of debt remains a big issue. As a result, for example, Varun Shipping is reportedly looking for second hand ships instead of the aggressive shopping list it had earlier and SCI needs almost $2.5 billion to fund its planned purchase of about thirty ships. Meanwhile, recent financial results declared by many companies have been disappointing.

Economic Offences Wing (EOW) arrests head of Maritime Training Institute for defrauding 70 students of Rs 7 crore. Police say Manoj Dubey was running a bogus company, Searock Institute of Education Research and Development Private Limited, in Andheri, Mumbai. Students claim the institute said it had 500 ships and promised them jobs, charging them Rs. 4 lacs each for a two year officer training programme. Instead, says Mayur Patel, one student, they were made to attend language courses. Additionally, "in February 2007, we were sent for a camp to Karjat where we were given vada pav for food. When I inquired with the Indian Maritime Board and the director general of Shipping Office, I learnt that the institute was not approved by them," he said. Another student told reporters, "When we went to the institute's office for a refund, their staff threatened us. Later we found out Dubey had stopped visiting his office." Police say they are looking for Dubey’s two brothers who may be party to the swindle.

Abandon crew! Once again, writes David Osler for Lloyds List, “Crew abandonments are becoming commonplace.” ITF officials confirm this with statistics that show that the global economic slump has resulted in an upward spiral of these incidents, “with new cases coming in so thick and fast that up to date figures are difficult to calculate”. In scenes, which may bring back the eighties’ recession for some, abandoning of crews without wages, repatriation or even without food and water are on the rise. In one such case, says Lloyds MIU, owners of the ‘Rioni’ stuck in the Congo have even refused to repatriate the body of a Ukrainian crewmember that died on board. Then we wonder why so few want to join the profession!