GMS Warns E.U. on Beaching Ban

By MarEx 2015-05-22 18:10:59

GMS has called upon the European Commission to think carefully before banning beaching as an option for recycling European ships following the very positive study visits by a Japanese delegation and representatives from the Danish Shipping Association (DSA) to shipyards in Alang.

The improvements made by some of the yards have led to a rise in standards to ensure compliance with the forthcoming Hong Kong Convention. The DSA is on record as saying in an article on its website that: “We consequently saw, among other things, workers wearing safety equipment and undergoing six-monthly routine medical check-ups.

“We also noted that the shipyards were engaged in operations such as asbestos handling, and regularly compiled reports from water and soil pollution tests etc. Finally, we were able to personally observe that three of the shipyards had laid a concrete base beneath the beach to stop seepage of harmful substances.”

A beaching ban by the European Commission will be counterproductive as it would discourage improvements in the ship recycling industries of South Asia.

Firstly, it will mean that E.U. flagged ships will be able to be recycled only in Turkey and China. The Turkish recycling market has a finite capacity with only 20 small yards and China’s demand for steel from recycled ships varies greatly year to year. Currently there is little demand in China for scrap steel and there has not been for about a year and a half. This situation will undoubtedly lead to some E.U. flagged ships changing flag to register with states where no such ban is imposed to allow them a realistic choice of recycling destinations.

Secondly, prices will also be severely affected as E.U. registered ships forced to deal with only Turkish yards could face a collapse in value. Traditionally, southern Asian prices have been higher by about 40-60 percent than in Turkey and China due to the higher demand and value for ship steel, machinery, equipment, spares and ancillary items. Incidentally, most of these items are re-used; a more environmentally friendly option.

Banning beaching will only discourage other yards in the region from raising standards, thereby destroying the current ‘virtuous circle’ of improvements among shipyard owners in Alang.

If all yards in India are excluded from European approval, regardless of the improvements they have made in their infrastructure and work procedures, they will have no interest whatsoever to support their government’s ratification of the Hong Kong Convention.

Finally, and perhaps most importantly, for the European Commission to base its decision on beaching on secondary data (instead of primary investigation) is illogical. There is no reasonable justification for the European Commission to punish its own members without thorough analysis.

So for these reasons GMS urges the Commission to see for themselves the improvements that have been made by some of the shipyards in Alang and is happy to extend an open invitation to officials from the Commission, and to officials from E.U. member states responsible for ship recycling.

“The last visit by officials from the EU was back in 2009 and much has changed for the better since then. It would be a travesty of justice now that yard owners in Alang are making huge improvements to working conditions for the EU to make a decision without seeing for themselves the positive changes made in the region. GMS would be happy to organize such a visit,” said Dr Anil Sharma founder and CEO of GMS.


West Coast Longshoremen Approve New Contract

By MarEx 2015-05-22 17:29:13

U.S. West Coast Longshore workers have overwhelmingly voted to ratify a tentative contract agreement reached in February with employers represented by the Pacific Maritime Association (PMA).

Members of the International Longshore and Warehouse Union (ILWU) voted 82 percent in favor of approving the new 5-year agreement that will expire on July 1, 2019. The previous contract was ratified in 2008 with a vote of 75 percent in favor.

Voting results were certified today by the ILWU’s Coast Balloting Committee, which was chosen by Coast Longshore Caucus delegates elected from each of the 29 West Coast ports.

“The negotiations for this contract were some of the longest and most difficult in our recent history,” said ILWU International President Robert McEllrath. “Membership unity and hard work by the Negotiating Committee made this fair outcome possible.”

The new agreement provides approximately 20,000 good-paying jobs in 29 West Coast port communities. The contract will maintain excellent health benefits, improve wages, pensions and job safety protections; limit outsourcing of jobs and provide an improved system for resolving job disputes, said ILWU in a statement.

Long Beach Board of Harbor Commissioners President Doug Drummond has praised the result. “I would like to heartily congratulate the men and women of the International Longshore and Warehouse Union on their approval today of the new West Coast labor contract for ports including Long Beach. I would also like to extend my congratulations to the companies of the Pacific Maritime Association for their approval of the contract.

“This new pact is terrific for management and labor, and proves that by working together, we can build a partnership that will continue to help to improve this economy and provide jobs all across the United States.

“I’d also like to thank Long Beach Mayor Robert Garcia and Port CEO Jon Slangerup for their part in urging everyone to reach this mutually beneficial agreement.

“On behalf of the Port of Long Beach and the Long Beach Board of Harbor Commissioners, this is a job well done. We all look forward to many years of strong and fruitful efforts to keep trade moving.”

The National Retail Federation’s Vice President for Supply Chain and Customs Policy Jonathan Gold, said: “At long last the year-long contract dispute between the ILWU and PMA has come to an end. Shippers can rest a bit easier knowing that the West Coast ports will be more stable over the next few years. While we are happy to see the contract ratified it’s not going to be long before we are going through this process all over again.

“The past year was fraught with disruptions, slowdowns and partial shutdowns. This is something we will no longer tolerate. The world is changing, and our ports must adapt to ensure they provide shippers with the predictability and stability they need. We can no longer accept last-minute negotiations and months and months of talks while slowdowns and stoppages disrupt the global supply chain and international trade.

“Negotiators need to begin their talks early enough to have an agreement in place well before another contract expires without active or passive threats to the economy and the millions of jobs dependent on our nation’s ports and supply chain. The current process is impractical and unsustainable and fails to meet even the most basic requirements of a modern, global supply chain.

“A new process is needed for labor and management on both coasts. Stakeholders cannot afford to go through this process every couple of years. We need a new system in place that benefits all parties and provides for the efficient transportation of the nation’s cargo and commerce.”


India Plans New Oil Subsidy Rules

By Reuters 2015-05-22 17:14:51

India plans to reform rules governing the level of discounts upstream state oil firms including ONGC offer to retailers, a senior finance ministry official said on Friday, a move that could expedite the sale of a stake in the company.

The government hopes to sell shares in ONGC and India Oil Corp. to raise about a third of its budget target for asset sales of $11 billion – and reduce its fiscal deficit to 3.9 percent of GDP in the 2015/16 fiscal year.

Currently ONGC (Oil and Natural Gas Corp), Oil India and GAIL (India) sell crude and fuels like cooking gas at discounted rates to partly compensate retailers for losses they incur on selling fuels at government-set rates.

But the finance ministry and oil ministry are in talks to work out a mechanism for easing the subsidy burden for the upstream companies, Ratan P. Watal, expenditure secretary at the Ministry of Finance, told reporters on Friday.

Earlier, sources told Reuters that the oil ministry had set a new subsidy formula for the April-June quarter that would exempt upstream companies from discounting sales of crude oil and refined products if global oil prices are up to $60 per barrel.

India had to defer plans to sell a 5 percent stake in state-run oil company ONGC last year as investors wanted a clarity on subsidy payments, which had previously been set by government decree, creating uncertainty around its earnings outlook.

Market experts said that if talks between the two ministries lead to the temporary subsidy arrangement being prolonged, that would make the ONGC stake sale a more bankable proposition.

“Investors have been asking for more clarity on ONGC’s subsidy outgo, and that will be key for a divestment to take place,” said Mahesh Patil, co-chief investment officer at Birla Sun Life Asset Management.

“We still need to see what the final formula is.”


Finance Minister Arun Jaitley gave a bullish view on asset sales, telling a news conference called to mark Prime Minister Narendra Modi’s first year in power that deals worth 500 billion rupees ($7.9 billion) were “in the pipeline”.

Officials worry that a downturn in the Indian stock market, which has unwound most of its gains for the year, could hurt government fundraising plans. India has missed its privatisation target for the last five years in a row.

ONGC shares rose 1.5 percent on Friday. They have shed 18 percent in the year since Modi’s election victory, while the benchmark Sensex Index is up by 15 percent in that period, according to Reuters data.

Reuters reported exclusively earlier that the oil ministry had set interim rules to exempt upstream state firms from giving any discounts on crude and refined fuels if global oil prices average up to $60 a barrel this quarter.

For prices beyond $60 a barrel the companies will have to give a discount of 85 percent of the incremental oil prices and this discount will rise to 90 percent for additional prices beyond $100 a barrel.

ONGC chairman D.K. Sarraf later confirmed receiving a government order concerning the subsidy formula and said the details were in line with Reuters’ reporting.

Last quarter, the government had exempted ONGC, Oil India, and GAIL from paying any subsidy after a crash in global crude prices. Currently global oil prices are hovering around $66 a barrel.

On the top of the discount, state-run fuel retailers – Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum – are compensated by the finance ministry for selling cooking gas and kerosene at cheaper rates.

The government directly transfers subsidy for cooking gas into the bank accounts of consumers.

Last fiscal year domestic kerosene sales accounted for a third of overall revenue losses of 723 billion rupees ($11.4 billion) of state fuel retailers.

($1 = 63.5300 Indian rupees)


Myanmar Argues Cause of Rohingya Crisis

By Reuters 2015-05-22 17:08:24

The head of the Myanmar state from which thousands of Rohingya Muslims are fleeing denied that persecution had prompted the exodus after the United States called on the country to deal with its root causes.

Many Rohingya have become prey to human traffickers on the journey south to Thailand, Malaysia and beyond as they flee what U.S. Deputy Secretary of State Antony Blinken said on Friday were “the desperate conditions they face in Rakhine State”.

Rakhine Chief Minister Maung Maung Ohn told Reuters after meeting United Nations officials on Friday: “I am disappointed by, and completely disagree and reject such unfounded allegations by the United States.”

“This (migration) is human trafficking, not (due to) political or religious discrimination at all.”

Blinken, who was visiting Myanmar on Thursday and Friday, told Myanmar’s leaders they needed to address discrimination and violence against the minority Rohingya.

The majority of the more than 3,000 migrants who have landed on Malaysian and Indonesian shores this month were Rohingya Muslims, Blinken had told reporters.

The crisis flared in Southeast Asia after a Thai crackdown on human trafficking led criminals to abandon overloaded boats in the Bay of Bengal and the Andaman Sea rather than risk trying to smuggle or traffic them through preferred routes in Thailand.

The United Nations refugee agency UNHCR estimated on Friday that some 3,500 migrants are still stranded on boats with dwindling supplies, and repeated its appeal for the region’s governments to rescue them.

Myanmar’s navy discovered two Thai trafficking boats off the coast of Rakhine on Thursday, one carrying migrants and the other empty, the state government said in a statement on Friday.

“One is loaded with around 200 Bengali people,” it said, using the government term for illegal migrants from Bangladesh.

“The people on the boat were all from Bangladesh,” said Rakhine State government executive secretary Tin Maung Swe. “We will deport them.”

Maung Maung Ohn said he would take a U.N. group to meet the migrants to show they were victims of trafficking, not persecution.

Myanmar has faced international criticism for not doing enough to help those at sea or stem the flow of migrants.

Migrant boats are often a mix of people from Bangladesh seeking to escape poverty at home as well as Rohingya.


Most of Myanmar’s 1.1 million Rohingya are stateless and live in apartheid-like conditions in the state. Almost 140,000 were displaced in deadly clashes with majority Buddhists in Rakhine in 2012. They are denied citizenship and have long complained of state-sanctioned discrimination.

Myanmar denies discriminating against the group and has said it is not the source of the problem. It does not recognize the Rohingya as an ethnic minority, and instead classifies the group as Bengalis. Most Rohingya reject the term and many have lived in Rakhine for generations.

Myanmar military chief General Min Aung Hlaing cast doubt on the origin of many of the refugees in comments carried in Myanmar’s state media on Friday.

He “hinted that most victims are expected to assume themselves to be Rohingya from Myanmar in the hope of receiving assistance from UNHCR” at a meeting with Blinken on Thursday, the state-backed Global New Light of Myanmar newspaper reported.

“He stressed the need to investigate their country of origin rather than to accuse a country,” the newspaper said.

Scores of Rohingya are paying off people smugglers and returning to the squalid camps they used to live in after being held for months on overcrowded ships off the coast of Myanmar.

Malaysian Prime Minister Najib Razak on Thursday pledged assistance and ordered the navy to rescue thousands adrift at sea, and a Thai official said Myanmar had agreed to attend an emergency conference on the crisis on May 29.

Malaysia and Indonesia have said they would allow the thousands still at sea to come ashore temporarily, but Thailand has said it would not follow suit.


MARAD Hosts National Maritime Day Observance

By MarEx 2015-05-22 16:33:44

On Thursday, May 21, at 10:00 a.m. EDT, the Maritime Administration (MARAD) hosted a National Maritime Day Observance at the U.S. Department of Transportation headquarters building in Washington D.C. and Maritime TV was there to cover it.

Maritime Day recognizes the thousands of dedicated American Merchant Mariners who serve in the maritime industry and honors those who perished in service to our country.

Click here to view the 2015 National Maritime Day Observance Ceremony.

To view the webcast broken up by presentation please visit 2015 National Maritime Day Events


Oil Platform on Fire in Gulf of Mexico

By Reuters 2015-05-22 13:17:33

An oil platform caught fire and was evacuated in the U.S. Gulf of Mexico offshore Louisiana in the early hours of Friday, though no injuries were reported, the U.S. Coast Guard said.

Fire-fighting crews worked to contain the fire on Friday near Breton Island, 50 miles (80 km) offshore New Orleans, the Coast Guard said. All 28 people were evacuated from the platform.

It was unclear what caused the incident or how much oil leaked into the ocean, but the Coast Guard said it has observed a 1.4 nautical mile rainbow sheen drifting southwest of the platform.

The platform, owned by Texas Petroleum Investment Co, has an estimated 4,000 barrels of crude oil on board, the Coast Guard said. It was not clear if the company also operated the well.

The well has been shut and production stopped, the Coast Guard said.

The company was not immediately available for comment.

The severity of Friday’s incident is so far unclear, though it will likely cause jitters after the blowout of BP’s Macondo oil well in the Gulf of Mexico in April 2010 caused the worst offshore oil spill in U.S. history.

Initial response vessels were on scene and the cause of the incident was being investigated.

The Texas Petroleum Investment Co is a Houston-based, private exploration and production company with operations along the Gulf coast of Texas, Louisiana, Mississippi, and Alabama, according to its LinkedIn profile. The company was founded in 1989 and operates more than 2,000 producing wells, it said.