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INTERCARGO ANNUAL MEETING 14 OCTOBER 2008 CHAIRMAN'S ANNUAL REPORT

Although clearly disturbing and unsettling times for the world's economy, we should perhaps be ready, as Intercargo, to remind ourselves and the analysts watching every aspect of market intelligence of those unchanging factors which have arisen in every shipping cycle in living memory. Not all challenges are for the worse and I would like to share some thoughts as to what the future may bring for all of us in the dry bulk sector.
Firstly, it has been very clear within Intercargo for some time that what we will undoubtedly see in the coming years - irrespective of any changes in the market, will be a flight towards Quality with chartering interests moving the world's dry bulk staples increasingly demanding better and higher quality shipping services.
Our own analysis due for final publication later this month confirms the sentiments outlined in the Paris MoU PSC report, that in general terms, the port State control record of the dry bulk sector has deteriorated in the last year.
As Intercargo, we must acknowledge that fact, but it is pleasing to note that taken as a whole, Intercargo entered vessels had a lower Deficiencies per Inspection rating of 1.74 in 2007 than in the previous year, whereas the non-Intercargo entered vessels deteriorated to 2.89.
But even as Intercargo, we must continue to make every possible effort to work together to strive for the «safe, efficient and environmentally friendly» dry bulk sector that my predecessor Fred Tsao, so admirably coined.
To do this, our Work Programme has been carefully honed in the last two days to reflect both the short and long term issues affecting our member's concerns.
If nothing else, it is a privilege to be part of an Association which takes its responsibilities towards safety and the environment so seriously.
But as Intercargo has long pointed out, «safety» and our long-term concern for the environment should not be an «either - or» consideration and we will continue to place safety where it should be - at the forefront of our activities.
But perhaps we should also seek to inform the outside world that «Polluting Ships and uncaring Shipowners» is an image that has - for some time, had no place in the strategic vision of Intercargo and its Round Table partners. Exactly how we will achieve some of these extremely challenging goals will occupy our Committees for some time to come but both our Technical and Executive Committees have renewed their pledges towards global solutions which result in a net environmental benefit for just about everyone in society who directly or indirectly benefits from the economic effects of shipping — the greenest form of transport there is.
My last comment on the progress that is being made for the environment concerns two aspects - the support that this organisation has for global solutions, especially the work being undertaken in IMO and secondly, the role of shipowners themselves, who are striving through innovative technical and operational techniques to improve their environmental performance. We look to many parties to play their part in this matter, noting, as ever, that regulatory and technological advancement do not come without cost.
But our Work Programme remains our strategic document within which we can justifiably claim that over the last year, Intercargo with the support of its Round Table partners has made substantial progress.
As one example, last month's IMO Dangerous Goods Sub-Committee meeting looked at the contentious issue of the conditions under which Direct Reduced Iron should be carried.
To do this, Intercargo sought the opinions of its members and with the best-ever feedback on a single issue, secured a mandate from the membership to press for «inert only» conditions for DRI «C» in order to improve on the safety record for this volatile commodity.
Working with this mandate, Intercargo then sought to convince others of our case and working with the entire Secretariat and a painstakingly organised scientific case supported by the International Group of P&I Clubs, we were able to convince others at IMO.
Stowaways were another area where in the last year, Intercargo was able to provide a platform for Members to discuss areas where different processes would ease their administrative burden whilst at the same time, providing a humanitarian solution to this difficult issue. The provision of an IMO Stowaway Focal Point was the result of these collective Round Table efforts and whilst it is fair to say that for a variety of reasons, use of the facility by Bulk Carrier owners has not been that great, any such provision will surely be advantageous at some future point and is therefore worth promoting and preserving.
Continuing the theme of collective pressure to effect safety-orientated change, Intercargo has of course been extremely active in the «Excessive Loading Rates» issue and I am pleased to add my support to Mr Richard Rawlinson, Chairman of Intercargo's Technical Committee, together with
Societies, who have contributed and continue to contribute to the work in resolving loading rates.
Whatever views may exist elsewhere, Intercargo believes that fundamentally, Classification Societies can and should be measured by reference to their safety credentials. We look forward to ensuring that this relationship which has existed with Class for many decades continues to thrive in order to reflect Intercargo's desire for a Flight to Quality.
But whereas hearts and minds may appear to be focussed on Market Conditions, the reality is that Training and Manpower issues are likely to determine the key to our collective success over the next 25 years.
Intercargo's Correspondence Group has already been formed and we hope that our members will - as ever, give their time and energies to moulding the future industry by contributing their opinions and expertise to this Group. One aspect that we may perhaps usefully ask the Group to look at would be whether port State control targeting could be made more sophisticated, thereby reducing pressures on better-performing ships through lower levels of inspections. We have noted in our report that the average number of
inspections on Dry Bulk ships appears to have increased in the first half of 2008 compared with the previous year.
But whilst on the subject of seafarers that I have to mention two issues very dear to my heart - Criminalisation for Accidental Pollution and Piracy.
«Criminalisation» has been a matter for intense debate and legal challenge, which our members have actively supported - morally and financially. In some shape or form, this fight must continue to some logical conclusion and we hope to play our part in securing such a deal for our current, and hopefully future, seafarers.
But events since mid July have reminded us that the costs of transporting dry bulk and other commodities, includes a human one if the voyage is one which passes the coastline of Somalia where modern-day pirates terrorise those that are fully entitled to enjoy their Right of Innocent Passage.
At its peak, six Bulk Carrier and over 137 seafarers were denied this basic right, and more including those on other types of vessels.
Although some of these Bulk Carriers were owned by our members and some were not, this makes no difference whatsoever and we call on all parties to free these hostages and cease their activities immediately.
I am pleased to say that no one single issue has galvanised the Round Table and other industry partners such as the International Transport Workers Federation, to try and put pressure on all parties to eradicate this appalling practice. Press Releases may well be the visible sign of action to Intercargo members of this activity, but it is the collective action at the highest possible level in the UN, other regional groupings and elsewhere that will secure the
challenge of taking details of our Work Programme to our members and other potential members in their own regional centres. Such sessions will undoubtedly enable us to gauge the feeling and sentiments of members more successfully and in this regard, I would like to pay particular tribute to our members from Asia who remain very supportive of what we are trying to achieve.
Intercargo is now at its strongest and more focussed than it has been for some time.
One of the reasons for this is through the dedication and hard work of Roger Holt who has played a key role as Secretary General from 1999 until today, when he hands over the baton to Rob Lomas. We look forward to continuing to work with Roger over the next year in his role as Intercargo's Consultant Director and naturally, we wish Rob every success and confidence in taking Intercargo to the next phase of its member-focussed, quality orientated and objective-driven development.
We should never forget that in excess of 90% of world trade is carried, and will continue to be carried, by ships.
Nicky Pappadakis

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