Monday, 30 May 2011

Countries ‘carving up the Arctic’, says Wikileaks

Oil companies “rushing to extract the fossil fuels that caused the melting in the first place"- Ben Ayliffe

Seemingly unconcerned with the accelerated rate of ice melt in the sensitive and frigid North- or perhaps because of it- stakeholder nations have planned to ‘carve up the Arctic’, Wikileaks reveals. Secret US embassy cables released by the whistleblower website show that some countries are eyeing Arctic resources- oil, gas, even rubies and aluminium. Oil reserves in the region are estimated to be equivalent to those the North Sea and are a major factor in the Arctic rush. Another factor: sea routes to the East that will be a third shorter than at present as ice melts; moreover, these will avoid the Suez Canal and the piracy swamped Indian Ocean.

One commentator says that the rush to the Arctic is reminiscent of the 19th century and the division of Africa and her resources by the West. Wikileaks says that the Danish Foreign minister Per Stig Moeller joked with the Americans at a conference, saying "if you stay out, then the rest of us will have more to carve up in the Arctic".

The Arctic Council member states - Russia, the United States, Canada, Denmark, Norway, Finland, Sweden and Iceland – meet regularly to discuss their interests in the Arctic. And, although many are shocked at the rush for Arctic oil and the opening up of sea routes that are serviced by ageing Russian icebreakers- and what environmentalists see as a potentially catastrophic Russian plan to locate nuclear power generating reactors on platforms in the region-analysts say that this commercial momentum in the Arctic is by now irreversible.

Inevitably, there are political undertones to the exploitation of resources. Greenland, an autonomous Danish dependent territory with limited self-government, is seen by the US as on "a clear track to independence", according to the leaked cables. The US sees this as "a unique opportunity" for American gas and oil companies to get a foothold; Former US Ambassador to Denmark James P Cain is quoted in the cables saying that he introduced Greenland's government to New York financiers "to help the Greenlanders secure the investments needed for such exploitation".

Wikileaks reveals that, after Russian Artur Chilingarov planted a Russian flag via submarine on the seabed under the North Pole, a senior Russian official told the US that this was a deliberate move by the Kremlin and that Chilingarov was "following orders from the ruling United Russia party". Russian Ambassador Dmitriy Rogozin told NATO, "the 21st Century will see a fight for resources and Russia should not be defeated in this fight". Tension is also reported between other countries, including allies Canada and the US, over these resources. Canadian Premier Stephen Harper reportedly told NATO to keep out of the Arctic; he felt that some European countries without Arctic territories were trying to use NATO to give them "influence in an area 'where they don't belong'".

Environmentalists are expectedly aghast at these ongoing developments. They point to recent reports by Professor Peter Wadhams of Cambridge University and the findings of the Intergovernmental Panel on Climate Change (IPCC), both of which say that the ice melt has accelerated rapidly in recent years. Professor Wadhams says, in fact, that it has ‘gone off a cliff’, the ice having both thinned and shrunk, and that, in summer, "it could easily happen that we'll have an ice free North Pole within a year or two". The IPCC said in Copenhagen recently, after 400 scientists met at a conference, that sea levels will rise by more than 5 feet in this century.

"Instead of seeing the melting of the Arctic ice cap as a spur to action on climate change, oil companies are rushing in to extract the very fossil fuels that caused the melting in the first place," environmentalist Ben Ayliffe told the BBC.

Oil companies seem to be unmindful of the criticism, though, and are aggressively lobbying their governments to give them a slice of the action. British firm Cairn Energy is reportedly at the forefront of the Arctic oil rush. The company's Commercial Director Simon Thomson told the BBC, "We're leading the charge".


Monday, 23 May 2011

Indian Government to allow armed guards on Indian flagships

Meanwhile, security firms promote code of conduct and ethics to keep out ‘cowboys’
The Indian government will allow armed guards aboard the country’s merchant ships to ward off pirates. A report carried by the Times of India quotes Director General of Shipping SB Agnihotri as saying, "We have decided to allow the armed guards on Indian flagged merchant vessels. The standard operating procedures (SOP) for the recruitment of armed guards and use of firearms will be finalised within in a month." Shipowners will be given the mandate to use former defence personnel as armed guards. "We are not comfortable with the thought of allowing private security guards as their unknown background can pose a risk to the lives of crew members."

The move comes after the number of pirate attacks have sharply increased, and after the furore created by the ‘Asphalt Venture’ hijack. The pirates kept six Indians back when releasing that vessel last month after a reported $3.5 million ransom was paid, intending to use the hostages as bargaining chips to negotiate- with the Indian government- the release of well over a hundred suspected Somali pirates in Indian custody. A high-level joint cabinet committee in India had met after the incident and examined the prospect of deploying armed commandos in plainclothes on merchant vessels. Comprising of the secretaries of the ministries of home, external affairs, shipping, and law, the committee examined whether Indian naval commandoes could be utilised along the lines of sky marshals deployed in the US on commercial aircraft. Widespread opinion at the time said that India was perceived as the prime target of Somali pirates, following robust Indian naval actions since January against them.

The Indian National Ship Owners' Association (INSA) and the National Union of Seafarers of India (NUSI) have welcomed the decision of the shipping ministry, the TOI says, quoting INSA chief executive officer Anil Devli, "India does not have a policy of allowing armed guards. This move will definitely provide a sense of security to the crew members threatened by pirates.”

In connected developments, maritime security firms across the world are coming together to create a code of conduct and ethics with the launch of the Security Association for the Maritime Industry (SAMI). With a surge in security providers, some with questionable backgrounds, shipowners are hard pressed to decide which ones are most suitable. To manage what some say is a complex mess, SAMI wants to ‘bring together security providers and the maritime industry to forge robust, reliable and reassuring vetting processes and standards’. SAMI founder Peter Cook points out quality issues with some security agencies, “It is fair to say that the current business opportunity is attracting companies who have gained experience ashore rather than at sea. This does have implications for the quality of service, the understanding of seafarers and ships, and of the foundations many start-up firms are built upon.”

One commentator says that finding an appropriate security firm today is, for the shipowner, like finding a random plumber, pointing out that many security guards are just ‘cowboys’. One hopes that the Indian armed response to piracy will be better organised than that.

Friday, 20 May 2011

Did NATO ships leave dozens of Africans to die of starvation at sea?

"Everyone was either praying or dying"

Earlier this month, NATO denied claims by the British newspaper ‘The Guardian’ that its navy left scores of migrants fleeing Libyan violence aboard a disabled boat in the Mediterranean to die of starvation. The story has created a furore in Europe, with critics alleging that NATO’s lethargic bureaucracy and indifference are responsible for 61 deaths at sea.

"Every morning we would wake up and find more bodies, which we would leave for 24 hours and then throw overboard," Abu Kurke, an Ethiopian survivor, told the Guardian. "Everyone was either praying or dying."

The Guardian says that 62 Africans died out of a total of 72 men, women and children in the boat that drifted for 16 days in late March and early April this year. The refugees from Eritrea, Ethiopia, Nigeria and Sudan had earlier received some food and water from a helicopter after its Ghanaian Captain called a refugee organisation in Rome, but that soon ran out. The organisation had informed the Italian coast guard about the refugees’ plight; the report alleges that nothing was done despite the helicopter indicating to the refugees that help was on its way. Contact was lost with the boat after the satellite phone battery ran out.

Out of fuel and drifting many days later, survivors say that two aircraft were seen approaching from a nearby warship that the Guardian believes was the French aircraft carrier Charles de Gaulle. The refugees held up two babies in a vain attempt to indicate their distress as the aircraft flew low over them, but the pilots flew away.

Running out of food, the migrants started dying until just ten were left. Included were the parents of the two infants- the children died later. One survivor died soon after the boat eventually docked back in Zlitan, near Misratah, Libya, on April 10. Kurke says he survived by drinking his own urine and eating toothpaste.

The violence in Libya has created huge additional dangers for economic migrants from Africa, an estimated 30,000 of who are said to have made the voyage this year from Libya or Tunisia after paying smugglers up to 3000 US dollars apiece. For years, the Libyan government allowed the country to be used as a launch for refugees fleeing to Europe- usually Italy- across the Mediterranean. UN officials say that about 800 migrants from Africa have already died at sea. A boat carrying 600 desperate migrants capsized off the Libyan coast last week; only 400 were rescued. Two other boats with hundreds of passengers each have disappeared in recent weeks, and 250 died on April 6 when their boat sank off the island.

NATO has denied the Guardian’s claims with regard to this latest tragedy. NATO spokeswoman Carmen Romero told reporters in Brussels, "NATO vessels are fully aware of their responsibilities with regard to international maritime law on safety of lives at sea." The French claimed at first that the ‘Charles de Gaulle had’ was not in the area, but then refused comment when the Guardian produced documents that showed that the ship had indeed been there.

Many are appalled at this latest incident, because survivors claim that NATO aircraft spotted them on two different occasions and ignored them. Moses Zerai, the Rome-based priest called by the boat’s Captain says, "This crime cannot go unpunished just because the victims were African migrants and not tourists on a cruise liner."

Refugee rights campaigners have demanded an investigation into the deaths. UNHCR, United Nation's refugee agency, has asked for more cooperation between commercial and military vessels in the Mediterranean. “The Mediterranean cannot become the wild west,” said spokeswoman Laura Boldrini. “Those who do not rescue people at sea cannot remain unpunished.”


Monday, 16 May 2011

Baltic launches the BALTEX

The Baltic exchange, home of the bellwether Baltic Dry Index and others, will soon roll out a new index – the Baltex. The UK’s Financial Services Authority (FSA) has authorised its subsidiary Baltic Exchange Derivatives Trading Ltd (BEDT) to run a Multilateral Trading Facility to offer trading in Forward Freight Agreements (FFAs). The Baltex, a central screen based trading solution for the dry FFA market, will go live shortly, a Baltic press release said after a meeting of their Board on May 4.

Baltic Exchange chairman Mark Jackson said, “In establishing and funding the Baltex system, the Baltic continues its core role in facilitating the development of the shipping marketplace in all its forms. This is the right response to broad market developments and emerging regulatory change.”

Baltic Exchange chief executive Jeremy Penn said that the Baltex would be the only FFA trading platform authorised by the FSA, adding, “We are pleased to have finally received the FSA’s approval and Baltex will be opening for business very soon. We have held back the launch to allow companies wishing to participate enough time to deal with the formalities of signing documentation.”

FFAs are essentially derivatives- risk management tools that derive their value from underlying assets. In the shipping industry, the underlying asset is the freight rate for a specific physical trade route. FFAs are meant to allow interested parties to hedge exposure to the freight market and so manage their risks. Started in the early 90’s, FFAs today have evolved into more complex instruments today in line with other derivates markets; like other derivates markets, they have attracted many speculators as well.

The Baltic Exchange says that the Baltex will be “underpinned by the highest supervisory and compliance standards”, and a high level of market support. “This is a trading system created by the shipping market and presents a unique opportunity for all freight derivatives stakeholders to benefit from faster execution and a more efficient transmission to clearing. It has been designed to attract new financial and commodity-orientated participants who prefer to trade in a regulated environment,” a statement says.

The Baltex, developed over the last two years, will trade Dry Bulk voyage FFAs and Time Charter FFAs- both Trip and Average- for frequented trade routes. Based on technology developed by Elysian Systems , the BEDT run system screens will provide FFA prices live; the system will also support straight through processing to international clearing houses across the world, displaying real time information to participants but keeping the trader’s identity secret to all except the nominated broker. The Baltex will have a custom made screen layout with warnings and can be modified to individual trading needs. It will also have a ‘view only’ function for those who want to see market conditions without trading. The exchange hopes that the genesis of the user friendly system, developed in collaboration with the market, will make it a popular choice for brokers, ship owners and other interested parties.

FFAs conventional thinking says is that the market for FFAs will soon come to surpass the underlying physical market in terms of dollar value. Critics point out that the mismanagement of broader derivates was responsible in large part for the near collapse of the international financial system that hit the world recently- and that FFAs are today used similarly by many, more for speculation rather than hedging risk. That may be true, but FFAs are here to stay anyway; perhaps a well regulated Baltex will help keep malpractices out of the system.

Thursday, 5 May 2011

Hostage sailor’s distraught wife questioned by cops for ‘threat SMS’

Sampa Arya says she threatened to kill herself to get justice for husband.

Sampa Arya, the wife of the hostage Third Officer Ravinder Singh of the MV Suez, has been questioned by police after she allegedly sent a ‘threat message’ to a member of leader Rahul Gandhi’s staff in early April. Sampa, a teacher with a three year old son, has been running from pillar to post for many months in Delhi trying to garner government support to rescue her husband from the clutches of Somali pirates. She has often been critical on television and otherwise of the Government’s response to her desperate plight.

Sampa Arya’s husband Ravinder Singh Gulia is one of the 22 crew aboard the MV Suez that was taken hostage by Somali pirates on August 2 last year. Red Sea Navigation, the Egyptian owners, have long declared inability to pay ransom and the crew is reported to be in dire straits.

Sampa started knocking on political doors in Delhi last year. In March this year, a visibly distressed Sampa had pleaded with Congress Leader Sonia Gandhi on behalf of the Indian hostages, telling reporters, “We have knocked on several doors, including that of the Prime Minister, but to no avail. We beg Sonia to get the government to help save our husbands, children and brothers from being killed.” Sampa had accused the government of indifference at the time, saying that their response was “shocking.”

The authorities say that Sampa sent a threat SMS this month from her hometown Rohtak to one of Rahul Gandhi’s aides, who then lodged a police complaint at the Tughlaq Road police station in Delhi. The cops traced the number, discovered it was hers and questioned her at length. Sampa was later released by the police who said that she was desperate to get justice for her husband and was “harmless.”

A senior police officer said, “A team was sent to Arya’s house and we interrogated her at length. We had received a complaint and we passed it on to our counterparts in Haryana. We did not find anything amiss after we questioned her.”

Sampa has confirmed the incident. The Indian Express quotes her as clarifying, “Since last year, I have been meeting all leaders, including the Prime Minister, but nothing has resulted from those meetings. I even went to Rahul Gandhi’s office. They were not ready to give me his phone number, but I overheard someone in his office dictating the number of his personal assistant. I noted it down and sent an SMS that I will kill myself if nothing is done.”

“While there was no news of my husband, police came to my house on April 15 and questioned me at length. They wanted to know how I got the number and why I sent the SMS,” she said.

“I told them that I will go to any length to get justice for my husband.”


Wednesday, 4 May 2011

“Canal Istanbul”: crazy, magnificent or an election fantasy?

Turkish Prime Minister says project will dwarf Panama and Suez canals.

Turkish Prime Minister Recep Tayyip Erdogan is taking forward what he calls his "crazy and magnificent" plan to make a man made canal connecting the Sea of Marmara and the Black Sea. An alternative route for the thousands of ships that today use the Bosphorus Straits annually, the ambitious “Canal Istanbul” will be 30 miles long, 25 metres deep and 150 metres wide, and, according to him, an unparalleled feat of engineering “We are building the canal of the century, a project of such immense size that it can't be compared to the Panama or Suez canals," he said.

The canal will turn the city of Istanbul into “two peninsulas and an island,” Erdogan says, and will
see as many as 160 ships a day sailing through it. Declining to give estimates on the Canal Istanbul’s cost or the exact location to avoid land speculation, Erdogan said that planning for the canal will take two years. Istanbul Mayor Kadir Topbas estimates that the project will cost more than $10 billion and take eight years to build.

"Istanbul will become a city with two seas passing through it," Erdogan announced at an election rally recently.

Turkey wants to keep shipping, particularly tankers, away from the 19 mile long Bosporus that winds through the city of Istanbul and its 12 million inhabitants. A winding and difficult waterway to navigate, the Bosphorus is one of the world’s busiest chokepoints for oil laden ships. About 3 million barrels a day are sent through it on ships. Besides Russia, Bulgaria, Ukraine, Romania and Georgia use the Straits regularly. Erdogan says that 139m tons of oil, 4m tons of liquefied petroleum gas and 3m tons of chemicals pass through the Bosphorus annually, creating a huge environmental and safety risk to the densely populated city.

"Bosphorus traffic will be reduced to zero," he said. "Water sports will take place on the Bosphorus, transport within the city will be established and Istanbul will return to its former days."

Opposition leaders in Turkey are sceptical about Erdogan’s plan, some dismissing it as an election fantasy or an invitation to corruption. Republican People’s Party head Kemal Kilicdaroglu was dismissive. "This country needs men who think and produce, but not crazy men. This project is not about people. It's about making AK (Erdogan’s party) supporters rich." Nonetheless, environmental groups and analysts have given a cautious green signal to the project, saying it is eminently achievable.

The Istanbul Canal will allow VLCCs to enter the Black Sea, therefore reducing demand for small tankers. “If this canal is built and if the infrastructure in the Black Sea follows in terms of port expansion, bigger vessels could absorb the volumes of smaller ships,” Bloomberg quotes analyst Luis Mateus as commenting. “The canal would also alleviate congestion and have faster transit times, but the industry needs to follow and adapt itself to a change in transport dynamics.”

Erdogan, a former mayor of Istanbul, says he wants to have the project well completed by 2023, the centenary of the declaration of the Turkish Republic. “Turkey deserves a crazy, magnificent project like this by 2023,” he says.