22nd Meeting of INTERTANKO’s

ENVIRONMENTAL COMMITTEE1000hrs-1800hrs Wednesday 31st May 2006

INTERTANKO London OfficeSt Clare House30-33 Minories

London EC3N 1DDTel: +44 207 977 7010 Fax: +44 207 977 7011

INTERTANKO’s Anti-Trust/Competition law Compliance Statement INTERTANKO is firmly committed to maintaining a fair and competitive environment in the world tanker trade, and to adhering to all applicable laws which regulate INTERTANKO’s and its members’ activities in this market. These laws include the anti-trust and competition laws, which the US, the European Union and many nations of the world have adopted to preserve the free enterprise system, promote competition and protect the public from monopolistic and other restrictive trade practices. This meeting will be conducted in compliance with these laws and in accordance with INTERTANKO’s anti-trust/competition law guidelines.

1. Minutes2. Membership

Policy Issues

3. Ship Recycling4. Port Reception Facilities5. Ballast Water Management6. Air Pollution7. Environmental Sustainability in Shipping

Reporting Items

8. ISTEC Related Issues9. Guide to Environmental Management Systems10. Marine Noise Pollution11. Anti-fouling Systems12. North Atlantic Right Whale13. Environmental Awareness Guides 14. Training and Awareness15. Environmental Challenge16. Environmental and Shipping Organisations17. Date and Place of next Meeting18. Any Other Business

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1. Minutes

The Minutes from the previous meeting held in Dubai on 15 and 16 November were circulated on 19th December 2005. No comments have been received.

The Committee is invited to approve the Minutes from the last meeting.

2. Membership

Please note that the following two individuals have been nominated to replace current members on the Environmental Committee:

Miss. Maria Sotiriou, Group Environmental Officer of OSG Shipmangement (GR) Ltd.

Mr. Jørn Andresen, Senior QA Manager of Dampskibsselskabet "NORDEN" A/S

The Committee is invited to note and welcome the two replacements from the member companies.

An updated list of current members is enclosed for the Committee’s information.

The Committee will recall at its last meeting that a request for further membership should be made based on three available seats and if no further recommendations had been forthcoming from the Environmental Committee or the Asian Regional Panel.

At present we have received interest from two member companies: 1) Consolidated Marine Management (Greece), and 2) American Eagle Tankers Inc. Limited (Singapore), and are awaiting confirmation of their support and commitment for the Committee.

The Committee is invited to consider its options for filling the third and final seat on the Committee.

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Policy Items

3. Ship Recycling

3.1 Interim Strategy

Ship recycling continues to progress rapidly in all areas including IMO, UN, EU and nationally. INTERTANKO has maintained an active role in its participation with the industry working group as per the mandate provided by the Committee at its last meeting. The following summarises, chronographically, the developments since the last Committee meeting:

December 2005 IMO Assembly agree to proceed with an IMO Convention due for adoption in the 2008/9 biennium

December 2005 Basel/ILO/IMO Working Group meeting held in GenevaFebruary 2006 Clemenceau case increases pressure for recycling facilities in EuropeMarch 2006 IMO MEPC, draft Convention tabled for consideration by NorwayApril 2006 European Parliament Hearing (EP Hearing) on Ship Recycling jointly

organised by an Environmental NGO Platform and the Shipping Industry Working Group

April 2006 European Commission task force request meeting with shipping industry

While there has been a wide acceptance that the IMO are now in the driving seat with regards to an international solution for this issue, there is considerable pressure from European Members of Parliament, individual European members States and the environmental organisations to ensure that action is taken between now and the final adoption of the IMO Convention in 2008/9.

Following the EP Hearing in April, the industry associations agreed that it would be worthwhile considering further an Interim Strategy for the shipping industry which would pre-empt any pressure from Europe and the individual states to develop regional or national legislation respectively. This Strategy could be based on the draft Convention together with the more practical elements of the IMO Guidelines. Not only would this allow the shipping sector to remain proactive on the matter it would also assist in driving the development of the Convention within the IMO.

A draft Interim Strategy has been drawn up by INTERTANKO and is under consideration by the members of the other industry associations. The Strategy is enclosed for the Environmental Committee’s consideration and approval.

The Committee is invited to consider the Interim Strategy and amend as necessary.

3.2 IMO Convention

Members will note the industry’s submission to MEPC 54 circulated to the Committee on 27 January. The submission proved useful in ensuring that the main concerns of the industry were raised and incorporated into the text of the Convention.

The main elements from the second draft of the IMO Convention following MEPC 54 have been included in the Interim Strategy and Committee members will note the similarity between the main text of each Strategy point and the regulations as presented in the enclosed document.

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Following and noting consideration of the Interim Strategy, the Committee is invited to comment on the current draft text of the IMO Convention as enclosed. Specific elements of interest have been highlighted in yellow and may require more in-depth discussion.

4. Port Reception Facilities

4.1 Industry Port Reception Facilities Forum

An updated Action Plan for the Industry Port Reception Facilities Forum is enclosed below for the Committee’s information.

Work within the Forum has now begun to focus more on the efforts underway with the IMO’s Action Plan which is based largely on the original Industry Forum Plan. INTERTANKO will be participating in the forthcoming meeting of the IMO’s sub-Committee on Flag State Implementation (FSI) and will be making an intervention based on the commentary agreed upon by the Forum, and enclosed below for information:

4.2 GISIS: IMO Port Reception Facility Database

At its last meeting the Forum received an introductory presentation to the new IMO Global Integrated Shipping Information System – GISIS. This is seen as an important step in providing industry with instant access on the availability of facilities in all port around the world. A quick demonstration of the system will be provided to the Committee. For those wishing to view the website prior to the meeting, please log into the following URL:

http://gisis.imo.org/Public/Default.aspx

The Committee will be invited to comment on the GISIS database and its usefulness to INTERTANKO’s members.

4.3 Technical Problems Associated with Ship to Shore Waste Transfer

Part of the Action Plan for both the Forum and now the IMO involves the gathering of detailed information on technical problems at the ship/shore interface. Examples of previously detailed problems include poor pumping on the ship and shore; poor access to suitably sized manifolds; type of waste receptacle being inadequate.

Members of the Forum feel that this aspect of the Forum’s work needs to be examined further and have proposed a Workshop in late autumn to further explore where the problems exist and what possible solutions could be put forward. However, it was also felt that an initial assessment should be made by both ship and port associations to ascertain the exact extent to which these problems exist.

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The Committee is invited to consider and provide details of any technical problems which have been encountered between the ship and shore when discharging any type of MARPOL waste.

4.4 IMRA Database

Alongside the GISIS system, INTERTANKO has been invited to endorse the International Marine Residue Associations (IMRA) ‘Ship Database’ system. While GISIS simply lists facilities and facilitates the submission of alleged inadequate facilities, IMRA’s system attempts to provide owners and ports with a delivery receipt system allowing for the traceability of waste from ship to reception facility and treatment plant.

The Committee is invited to consider the Ship Database provided for by IMRA and comment on the value to INTERTANKO members and its endorsement by INTERTANKO in general.

5. Ballast Water Management

5.1 IMO Ballast Water Guidelines

At present the following six sets of Guidelines have been adopted by the IMO:

Guidelines for Ballast Water Management Equivalent Compliance (G3). Guidelines for Ballast Water Management and the Development of Ballast Water

Management Plans (G4) Guidelines for Ballast Water Exchange (G6) Guidelines for the Approval of Ballast Water Management Systems (G8) Procedure for the Approval of Ballast Water Management Systems that make use of

Active Substances (G9) Guidelines for approval and oversight of prototype ballast water treatment technology

programmes (G10)

Copies of those Guidelines which have been adopted can be found on the INTERTANKO website, http://www.intertanko.com/templates/intertanko/issue.aspx?id=18570

The following four sets of Guidelines are due for adoption at MEPC 54 in October:

Guidelines for ballast water exchange design equipment standards (G11) Guidelines for sediment control on ships (G12) Guidelines for additional measures including emergency situations (G13) Guidelines on designation of areas for ballast water exchange (G14)

Further work is underway on the following final sets of Guidelines:

Guidelines for ballast water sampling (G2), to be further considered at the next BLG meeting in early 2007

Guidelines for risk assessment under regulation A-4 (G7), to be further considered at the next BLG meeting in early 2007

Guidelines for port State control under the BWM Convention, with sections of G2 relating to port State control to be forwarded to FSI 14 (the 14th session of the IMO Sub-Committee on Flag State Implementation due to be held between 5 and 9 June) as a basis for discussion when developing the PSC Guidelines

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The Committee is invited to note the progress on the development of these Guidelines and consider any further action as appropriate.

5.2 Ballast Water Regulation Database

Since the upgrading of the INTERTANKO website the ballast water regulation database has been removed. While the database was not fully up to date we have received a number of enquiries as to the whereabouts of the database and when it would be back on line, indicating that the membership use this on a regular basis, especially now that ballast water management plans are being revised and updated.

It is therefore deemed necessary to both update and revise the database which should be included on the new website. In order to fully update the system, members of the Committee are invited to consider any improvements to the old system and its information. Additionally, a list of ballast regulations which INTERTANKO currently has on file is included below. Should any members have additional information above what is provided they are requested to provide this to the secretary for inclusion in the database.

ArgentinaAustralia (National)Australia (State of Victoria)Baltic Sea (HELCOM recommendations)Baltic Sea (Klaipeda)Black Sea (Ukraine and Georgia)Black Sea (Novorossiysk)BrazilCanada (National)Canada (Vancouver)Chile

Great LakesIsraelNew ZealandUK (Orkney’s)USA (National)USA (California)USA (Maryland)USA (Michigan)USA (Oregon)USA (Virginia)

The Committee is invited to consider the list above and provide details of any other local, national or regional requirements which may be added to the database.

5.3 Model Ballast Water Management Plan

INTERTANKO and ICS’s Model Ballast Water Management Plan was last updated in 2000. This second edition has now out of print and the intention is to update and release a third edition taking into account the IMO Convention and associated Guidelines.

The text of the current Model Plan is given below for the Committee’s consideration.

The Committee is invited to comment on the Model Plan and give guidance on its improvement.

5.4 Treatment System Technology

It is widely acknowledged that a number of treatment systems under development are beginning to make positive strides in being able to meet the IMO Convention treatment standards. One such vendor is Ocean-Saver, a company who have already been in touch with a number of our members and have requested to present to the Committee at this meeting. They will be present at the end of the meeting to present the Ocean-Saver system and answer questions on the state of the ballast treatment market, the possibility of being able to meet the IMO and proposed US

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requirements, and the time-frame envisaged for the merchant fleet to install and test such systems in line with the IMO implementation dates.

6. Air Pollution

Dr. Timothy Gunner will be present at the meeting to provide an overview of the developments on both Greenhouse Gas (GHG) Emissions and MARPOL Annex VI. For consideration prior to the meeting, Dr. Gunner’s presentation is given below:

7. Environmental Sustainability in Shipping

In maintaining an open mandate on the issue of sustainability, the secretariat has been discussing the application of corporate and social responsibility within the tanker industry with HNA Maritime, an independent consultancy who’ve also been in touch with a number of INTERTANKO members and associate members. As the direction of the issue is still undecided INTERTANKO proposed to stage a workshop together with HNA in which industry leaders interested in this issue could discuss and cooperate on the future direction of Corporate and Social Responsibility in the tanker industry. The following is an overview of the proposed workshop:

Quote

Corporate Responsibility and the Tanker Industry Forum:

Tanker owner/operators continue to face pressure to demonstrate to stakeholders – oil majors, investors, insurers, regulatory authorities, activists – that they have taken all the steps necessary to avoid environmental, health and safety incidents aboard their ships. And this goes well beyond simple regulatory compliance. To avoid EHS incidents – and to convince stakeholders that they can be counted on to avoid EHS incidents – owners need to demonstrate that they have a formal approach to risk management in place, and that monitoring and managing risk is just as important, and as much an integral part of day-to-day operational focus, as avoiding delays or running a ship under capacity.

At the same time, while owners appreciate the value of a formal approach to Corporate Responsibility and Risk Management (CRRM), they also know that they are expending a large (and growing) amount of time and resources on compliance and risk management-related issues.

Tanker owners therefore need to put in place a formal approach to managing risk (and demonstrating compliance) that allows them to accurately and inexpensively:

Measure and monitor environmental, health, safety and security performance at a ship-board, region and fleet level;

demonstrate compliance against regulatory codes and standards; use measuring and monitoring techniques to “embed” a strong safety culture in their employees, use EHS performance information to improve their policies and reduce their costs; demonstrate to oil majors and other customers that they have a strong risk management system

in place in order to avoid excess inspection and vetting.

In short, they need to make risk management and compliance monitoring a positive tool for reducing costs and improving company performance. How can a ship owner begin to do this?

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INTERTANKO, in cooperation with HNA Maritime, are planning a stakeholder workshop that will look at how the tanker industry can develop a common and efficient approach to Corporate Responsibility and Risk Management. It will involve representatives from all the interested industry groups (owners, insurers, banks, regulators), and will propose a pilot program for setting a standardized approach to CRRM that may include cross-industry KPIs and better use of IT and data collection techniques. It will be held at the INTERTANKO London offices on July 25th, 2006.

Unquote

The Committee is invited to consider the merits and direction of such an initiative, and consider whether INTERTANKO members should be encouraged to participate in such a workshop.

For further guidance the draft INTERTANKO statement on the issue, as circulated following the last Committee meeting, is enclosed:

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Report Items

8. ISTEC Related Issues

8.1 Heavy Weather Ballast

ISTEC noted that there was a continued problem of locating reception facilities to take heavy weather ballast. While it was explained that INTERTANKO had made substantial headway on the issue of reception facilities at the IMO, emphasis had not so far been made on this element. ISTEC agreed that this was a problem for the members and that it would be beneficial to include reference to this in the future IMO action plan.

The Committee is invited to note the information relating to heavy weather ballast and comment as appropriate.

8.2 Guide to engine room sludge treatment

An ISTEC Working Group has been convened to develop a guide to engine room sludge treatment. During discussion on the issue, ISTEC agreed that the guide should include treatment of all engine room wastes such as sludge, bilge water, sewage, effluent from the inert gas scrubber and washing from boilers. ISTEC further agreed that there is a need to enhance the quality of the “down stream” elements like number, location and design of holding tanks, pipeline, etc. This should also include measures to reduce the drains from ship’s installations (every tank should have a water drain) and seek for a complete segregation of different types of wastes. To that extent, it was agreed to include in Chapter 1 of the guide a new item entitled; “Reducing onboard production of waste”.

ISTEC invited the Working Group drafting the guidelines to consider that future ships should be designed to deal with onboard wastes without the use of incinerators. There are more and more restrictions to use incinerators close to shore and places like Italy and California forbid the use of these while ships are in territorial waters.

Environmental Committee and ISTEC member, Mr. Tagliavia, reported that the Italian administration forbids Italian flagged ships to discharge any oily-water at sea. In other words forbid the use of OWS systems and that all discharges are delivered to shore facilities. The problem is not in Italy when such facilities are available but flagged Italian ships might not be able to comply with the rule in other parts of the world where such facilities are not available.

Finally, ISTEC noted the decision from INTERTANKO’s Executive Committee to initiate a discussion with OCIMF and oil companies and clarify on whether they could accept transfer of sludge to slop tanks, at least as an alternative solution in case reception facilities are not available and use of incinerators is forbidden.

The Committee is invited to note the discussion and decisions of ISTEC and comment as appropriate.

9. Guide to Environmental Management Systems

At its last meeting, the Committee agreed with the proposal by Capt. Reppas to update the publication, ‘A Guide to Environmental Management Systems’. Capt. Reppas will be present at the meeting and consideration will be given to the aspects and developments which should be included in the new draft.

The Committee is invited to consider the current draft of the Guide and provide input as to the expansion of the document in its second edition.

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10. Marine Noise Pollution

There have been no developments on this issue since the Committee’s last meeting. The mandate remains as a watching brief.

The Committee is invited to take note.

11. Anti-fouling Systems

There are at present a number of studies underway in relation to both TBT antifouling systems and new technology anti-fouling systems. Of particular interest to the Committee is a study completed by Stolt-Nielsen Transportation Group (SNTG) which is tabled below:

The study concludes that the net environmental benefit from banning TBT based anti-fouling systems was negative and that any future ban on alternative biocides should be conducted in terms of the net environmental benefit.

The Australian Shipowners’ Association has also been working on this issue and has produced a briefing paper and guidance note for its members, both of which are included below:

The Committee, in light of the documents tabled at the meeting, is invited to consider INTERTANKO’s future policy and research activity on this issue.

12. North Atlantic Right Whale

The Committee, last meeting, recommended that INTERTANKO maintain a watching brief on this issue and in particular on the developments at the International Whaling Commission (IWC). The Committee raised concerns over the demonstrable evidence related to the number of ship strikes and the significance of this in relation to whale population threats.

The IWC met early in May 2006 and formed for the first time a Ship Strike Working Group. Although the report from the Working Group meeting notes that the extent of the problem is still largely unknown, the Working Group pressed forward in suggesting the following items for its own action:

a) identify large-area and small-area hot spots of dense shipping globally; b) offer guidance for improved reporting and data management and processing from IWC member

nations as well as others; c) review geographical distribution of stranding networks to identify gaps in coverage; d) initiate a cost-benefit analysis of selected mitigation measures;

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e) further work to develop mitigation measures; f) evaluate the potential for whale-related data into Automatic Identification System (AIS) data that

appear on vessel radar screens.

Furthermore, the Working Group felt that, in order to assess the extent of the problem, the IWC Scientific Committee should consider the following:

a) identify whale stocks potentially most threatened by ship strikes; b) check identified high-density shipping lanes for potential overlap with high whale density or known

migration routes; c) analyse the links between underwater noise and collisions; d) further investigate the relationship between vessel type, speed and risk of collision; e) continue work to develop methods for quantifying mortality due to vessel strikes, including involving

stranding networks more closely.

Finally, and of particular note, the following recommendations were given for further action by the IWC:

a) All national progress reports on cetacean research submitted by IWC members should include ship strikes data in a format allowing their full utilisation.

b) Set up a centralized international database on ship strikes - using a template with standardized parameters - developing a data repository

c) As appropriate, adopt national and regional legislation, rules and action plans to reduce the impact of ship strikes, with priority for high-risk areas.

d) Identify and circulate information on training material for crew and maritime and marine officials. e) Continue the work within the Ship strikes Working Group, widen its membership and circulate the

progress report widely.

The Committee is invited to note the outcome of this first IWC Working Group meeting and in particular the recommendations relating to maritime training; the promotion of national and regional legislation, and; reporting, and suggest further action by INTERTANKO as appropriate.

13. Training and Awareness

In liaising with Dr. Kingston, the next appropriate date for an Environmental Awareness Course would be 7th and 8th October, at Heriot-Watt University, Edinburgh.

The Committee is invited to consider the date and provide the mandate to begin immediate publicity about the course to all INTERTANKO members.

14. Environmental Awareness Guides

Guides on MARPOL Annex VI, Annex II and Ship Recycling will be completed during the course of the summer and released in the autumn.

The Committee is invited to take note.

15. Environmental Challenge

Preparation for the Environmental Challenge launch has been delayed due to the prioritisation of the Poseidon Challenge. We anticipate being able to launch the second Environmental Challenge during the course of the summer.

The Committee is invited to take note.

16. Environmental and Shipping Organisations

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As recommended at its last meeting, INTERTANKO co-authored a submission to the IMO on anti-fouling systems with WWF. In addition, INTERTANKO maintains liaison with the following bodies in relation to certain items on its Environmental Agenda:

Greenpeace and the NGO Platform Ship RecyclingHELCOM, REMPEC and PEMSEA Reception FacilitiesIPIECA, UNESCO Environmental SustainabilityGloBallast (UN and IMO) Ballast Water Management

The Committee is invited to take note.

17. Date and Place of next Meeting

In an email circular to the Committee the next meeting was proposed for Vancouver, as illustrated,

Date Venue Comments

November 2006* Vancouver Hosted by Teekay Shipping (Canada) Ltd.

February/April 2007 London Back-to-back with ISTEC?

September/October 2007 Barcelona Hosted by Tradewind Tankers SA

February/April 2008 London Back-to-back with ISTEC?

Autumn 2008 Singapore* Week commencing 20th November

For further guidance the Committee is invited to consider whether it would be appropriate to also stage a short meeting after or prior to the proposed Environmental Awareness Course due to be held 7th and 8th October in Edinburgh. This coincides with IMO’s next Marine Environment Protection Committee (MEPC 55) meeting in London which will be held between 9th and 13th October.

The Committee is invited to consider and decide the date and place of the next two Committee meetings.

18. Any Other Business

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