A Quarterly Magazine from ABS
Summer 2006
F
aced with a zero tolerance public and governmental
approach to incidents involving tankers, the Oil Companies
International Marine Forum (OCIMF) introduced a best-practices
guide for tanker operators, the Guide for Tanker Management and
Self Assessment (TMSA) in late 2004. TMSA includes organized,
specific recommendations to track key performance indicators
relating to a number of occupational health, safety, quality and
environmental (HSQE) issues – making, in effect, a comprehensive
corporate management review guide.
In absorbing its requirements, some shipowners found a mélange of
requirements, some of them new and some extensions of existing
management systems such as the ISM Code. In response, ABS
developed a series of informational seminars and also updated and
expanded its own HSQE Guide to be an all-encompassing, single
management systems guide.
While TMSA is directed at tankships, the sector that first took up the
HSQE initiative, the ABS Guide is equally applicable to any ship type.
A Quarterly Magazine from ABS
Summer 2006
COVER:
Greece controls over 16 percent of world tonnage by deadweight – the largest
merchant fleet in the world – and has a merchant seafaring history that
archaeological evidence suggests dates back about 10,000 years. This issue
of Surveyor looks at many of the issues confronting the current and future
leaders of the Greek shipping community.
FEATURES:
2
Looking Forward
4
The New Technocrats
8
A Positive Oracle for Greece’s Merchant Marine
Andreas Martinos of Minerva Marine, one of the next-generation family shipowners,
talks about why shipping captivates the soul and of the future challenges facing the
industry.
Hariklia, Natalia and George Moundreas bring new ideas to the family’s shipowning
activities with their fledgling NGM Energy venture.
George Gratsos, President of the Hellenic Chamber of Shipping, welcomes the recent
surge in interest in shipping on the part of the Greek Government and worries about
how best to encourage future generations of Greek seafarers.
11
Maritime Labor Revolution
18
IMO, the New ILO Convention and Related Issues
22
Law and the Human Element
Earlier this year the International Labor Organization adopted a comprehensive new
labor standard for the world’s maritime industry that should improve life on board for
seafarers of all nations.
Efthimios Mitropoulos, Secretary-General, International Maritime Organization, provides
a personal assessment of the importance of human factors to maritime safety.
Nick Pappadakis, Chairman of Intercargo and Chairman of Helmepa, appraises the
impact of legislation on seafarer motivation.
Published by ABS.
For permission to reproduce any
24
The Voyage of Continuous Improvement
One company’s Quality transformation proves that continuous improvement is more
than just a catchphrase.
portion of this magazine, send
a written request to:
Stewart Wade
ABS World Headquarters
ABS Plaza
28
ABS’ New SESC Center
ABS Piraeus is the new European center for ABS Safety, Environmental and Security
Certification.
16855 Northchase Dr.
Houston, TX 77060 USA
Joe Evangelista, Editor
Christopher Reeves, Graphic Designer
32
Viewpoint
Adamantios M. Lemos of Unisea Shipping Ltd. contends that respect is a cornerstone of safety at sea
Sharon Tamplain, Graphic Designer
Sherrie Anderson, Production Manager
Stewart Wade, Vice President
Copyright © 2006 by ABS.
Photo Credits
Cover courtesy Minerva Marine (top), Joe Evangelista (bottom); IBC, 2, 6, 8, 10, 13, 14, 22-24, 28, 30 Joe Evangelista;
IFC courtesy NGM Energy; 3 courtesy Minerva Marine; 4, 5, 7 courtesy Nicholas G. Moundreas Shipping; 9 courtesy
Anangel Shipping; 11, 12, 15 courtesy ILO; 16-17 courtesy Thenamaris; 18-21 courtesy IMO; 25-27 courtesy CMM Inc.
Summer 2006
•
Surveyor
1
Normally, Surveyor seeks out shipping’s elder
statesmen for stories and observations accumulated through decades of industry activity. This
time we met with Andreas A. Martinos of
Minerva Marine Inc., who at 26 is among the
youngest of the next-generation family ship
owner entering a decision-making role at his
company, to share some thoughts, expectations
and concerns in his own words as he looks forward from the helm on the voyage ahead.
“I
n the last decade, the shipping business
has seen great transformation and
change. Corporate structures, accountability, strict regulation and control, clients
ness for the long term, and I look forward to
being part of that future as it unfolds.
Shipping is a wonderful business full of challenge and change – even the routine is different every day. I first went on board one of our
ships when I was about 15. She was the
Matilda, a single-hull tanker built in 1989 in
Korea and the Queen of our company. Today,
just over ten years later, you hardly see any
single-hull tankers trading in the West.
Shipbuilding too has changed. Ten years ago,
when you built a ship it made the front page
of Tradewinds. Now it seems people order
them by the dozen, like eggs. Far Eastern shipyards produce one after another in recordmaking times using many new techniques and
technologies – mega-blocks, skid methods,
floating docks and so on – and physically the
vessels are rather similar, with little to differentiate them.
While our business is full of excitement, it is
also full of concerns. Shipbuilding capacity
and newbuilding orders are still increasing. As
the fleets grow, recruiting and training of seafarers has become a very big worry, which
expands when one starts thinking that today’s
seafarers make tomorrow’s superintendents
and site teams.
In addition, you worry about competition,
although Greeks don’t like to say it. I’ve never
heard anyone actually say it, but I think
everyone worries about competition. Many
times, you’ll see that when one Greek does
something many others do it too. So, I worry
that this outstanding market that we have
been enjoying for so long will eventually produce an oversupply of ships. I worry because
the stakes are enormous. A wrong strategic
decision can cancel all of a company’s good
past performance.
Andreas A. Martinos
2
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•
Summer 2006
vetting ships and offices, tanker management
self assessment – these are all new things.
How much further this transformation has to
go, which of the alterations have been correct
and what aspects of this overall evolution
have been for the better, only time will tell.
Shipping has a fascinating past and promises
an equally fascinating future. I am in the busi-
But what should the shipowner do? Are business fundamentals changing? Are we neglecting some important thinking because we are
all in a state of Nirvana market? I don’t know
the answer; maybe no one does.
What I am certain of is that we live in an age
of growth and technological change that is
affecting most individuals and all
industries, including shipping.
The world is constantly moving
faster and distances don’t matter
so much any more, which means
we all face increased, global competition. The younger generation
has to be ready to adapt to these
changes. To do so, we have to
remain rational and work professionally, with diligence and focus
on maintaining quality in our
industry; we have to create a good
working environment within our
companies; and we must try to
not be influenced by distractions.
Everyone faces his own distractions, but I am thinking of those affecting the
shipowner’s business decisions generally.
There are many people trying to sell you a
point of view – brokers, for example, and
industry analysts who are wrong at least as
often as they are right. Three different persons
will give you six different opinions. You can’t
follow them all. And anyway, the final
responsibility is yours. What you have to do is
perform your own studies and form your own
opinions – and stick with them.
In the end, shipping is all about providing safe
and efficient transport services. Hence, focusing on quality service to our customers is the
way to get things right. Transparency is a key
to this – sometimes the missing key. It is a big
change from previous generations’ ways of
doing things, but business today requires you
to be not afraid to state what you do, how you
do it, and who is behind your company.
You hear many complaints about Tanker
Management Self Assessment, for example.
But it is just part of a big effort to try to make
shipping a more professional business. Many
of the things we are asked for have already
been implemented in other industries. You
can’t imagine a big industrial company today
operating without referring to KPIs (key performance indicators), for example. Ten years
ago, you couldn’t imagine KPIs applied to a
shipping company. Oil major charterers now
regularly ask for them.
One question now going around is, will the
rise of new corporate entities and increased
consolidation leave traditional shipowning
behind? I don’t think so. The traditional
shipowner brings something unique to the
business. I know personally from some
clients that charterers like traditional family
shipowners – good, professional, transparent
companies that follow corporate practices, but
still family companies where they know the
person whose ‘yes’ is actually a ‘yes’. A stocklisted company has no head, but a family
company can move quickly, with decision and
authority.
Concern that “this
outstanding market will
produce an oversupply
of ships”.
So, despite the many unknowns and worries
in our industry today, I am not worried for
the future of traditional shipowning – provided the traditional shipowner modernizes his
company. Speaking about Greeks, at least, I
can say that traditional shipowners are in this
business because they love it. And that love is
strength.
Shipping is a time-consuming and demanding
occupation. It completely absorbs you and
expects you to be always ready to respond
quickly and efficiently. But we also know that
it will always reward you and offer never ending experiences. We Greeks are sentimental
people whose country is very close to the sea.
The sea permeates our life; it is in our blood.
I was born near Athens in the seaside area of
Glyfada and have lived my life by the sea. My
business is on the sea and, when the weekend
comes, my recreation is on the sea. For me,
there is nothing better than this. Most
shipowners, I think, feel this kind of feeling.
They are inspired by the sea and want to give
their life back to the sea.
And the magical thing is that you know this
from the first moment you step aboard a ship.
You know it in your heart that this business
is for you. It captivates you and it never ends.
”
Summer 2006
•
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3
T H E N E W T E C H N O C R AT S
New mentalities and technologies are in the winds of change
brought by next-generation
Greek shipowners
he post-War generation of Greek
shipping was famous for a freewheeling
style that figured its current accounts
on the back of cigarette packs and tracked its
widespread financial holdings and business
activities with the same mental processes used
to record the events and relationships of its
extended families. Two generations later,
those once mainstay practices are largely the
stuff of after-dinner stories. Just as the gunfighters and free spirits of the Wild West
slowly gave way to the laws and fences of a
more rigid modernity, so the once secretive
yet free-spirited society of the shipping industry is giving way to the regulation, scrutiny
and transparency required by a world that
increasingly values standard corporate forms
and practices.
T
The maturation of the shipping industry is
accompanied by a generational change, now
in its second edition, as shipowners in their
20s and early 30s begin to take up the reins of
established companies or establish their own
firms. The bestowing of lighthearted vessel
names, the establishment of high-tech offices,
the readiness to accept outside ship management and the openness to stocklisted companies are just a few of the signposts setting the
youngest generation of Greek shipowner apart
from its predecessors.
If any single thing captures the generational
difference in Greek shipping, it is the names
of the first two chemical carrier deliveries
recently taken from Korea’s 21st Century
Shipyard by Nicholas G. Moundreas
Shipping: Mojito, named for a rum-based
cocktail, and Mini Me, named after the ugly
little villain in the Austin Powers series of
movies. Bestowed by the new generation of
owners in the family, such names are quite a
shock for those used to symbolic appellations
on the bow recalling holy sites, historic places
and beloved family members.
4
Surveyor
•
Summer 2006
“The names are fun, quite different from what
our father would choose,” says Natalia
Moundreas.
In addition to the names, the chemical tankers
represent a new direction for the family, which
has traditionally focused on dry cargo. The
company is run by Hariklia, Natalia and
George Moundreas, all around 30 years old
and all graduates from London universities
with master degrees in shipping. After returning
to Piraeus and working several years beside their
father Nicholas – co-founder 40 years ago of
dry bulk operators Good Faith Shipping – it
eventually came time to fly on their own wings.
“One of the points we brought up was the
tanker phase-out that would be beginning in
2007,” says George. “No one knows yet how
strict it will be, but I hope it will help the
newer ships of this type.”
“Today we are happy we did, because the market is good for these vessels,” adds Natalia.
“Two years later, we can say that the timing
was excellent. So, even though there are a lot
of differences between the generations, one
thing that never changes is that timing – or
luck – is still one of the most important ingredients to success,” she adds.
Subtle Encouragement
“Three years ago, when we decided it was
time to go ahead with a new project focusing
mainly on new buildings or modern vessels
(as the Moundreas family), the dry cargo
market was booming and the vessel price
was really high, so it was rather risky to go
for a dry bulk carrier,” says Natalia. “We
had studied the chemical sector intensely
and followed the market closely over the
past years and thought it was a very good
investment at the time,” she says.
Before launching their own business, the
three spent a number of years working alongside their father in Piraeus. While Nicholas
never pressured his children to take up the
family business, he simply made it part of
their lives. “Many of my friends have asked
when, how and why I decided to go into
shipping,” says Natalia. “My answer is that
it just seemed natural; I knew it without ever
having thought of it. Even though we never
Summer 2006
•
Surveyor
5
George and Natalia
Moundreas bring new
thinking to the family
business, co-founded by
their father Nicholas (right)
some 40 years ago.
discussed it at home, when I was still a child
I already knew that I would go to London
and study shipping.
“The younger generation’s familiarity with
office gadgetry, electronics and technology is
an integral part of the way it does business
today. We tend to take a more technocratic
view of the business than the older generation,” says George. “While the older generation typically doesn’t have great familiarity
with computers, we rely quite heavily on
Information Technology. It makes things simpler and faster, and enables us to do the job
without spending 20 hours a day in the
office.”
The rise of technocracy has as much to do
with client demands as with the availability
of technology, he says. “The business environment today is one of constant change to
which the young generation can more easily
accept and adapt. For example, we are establishing procedures and processes, avoiding the
one-man shop that was typical in the past,
especially with Greek shipowners. We are also
taking on ISO standards and transparent operations, which are other things the older generation didn’t favor.”
Among the things the older generation didn’t
favor is the use of ship management, which
6
Surveyor
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Summer 2006
many of its sons and daughters see as a way
of easing into new sectors. Moundreas, for
example, will have six new chemical tankers
in its fleet when all deliveries are completed
in 2007. Presently the ships operate in the
spot market, though the owners are in discussions with oil majors. While the company
builds its experience and reputation in the
chemicals sector it is using established ship
managers V.Ships for technical management
of the vessels.
“In parallel with their employment we are
establishing our own operations here in
Piraeus,” says George. “We have invested
heavily in IT and in human resources, hiring
people with good field experience. Our surveyors and engineers inspect the vessels and
cooperate with V.Ships.”
Technocrats at Work
The Moundreas siblings laid the groundwork
for their new endeavor with a substantial
up-front investment in technology. The
software systems they are installing cover
such necessities as tanker management self
assessment, telecommunications, technical
programs connected to the vessels and remote
access to the office – all the electronic
components of the modern office now
being applied to the ancient business of
shipping. The software systems alone had a
list price of about 300,000 euros – a very difficult investment to green light for a generation
unaccustomed to Word for Windows, let
alone complex suites of management software
packages, electronic offices and a worldwide
intranet.
For the tanker sector, technocracy is a
strategy that fits well with the ever-rising
expectations that society and, importantly,
oil majors have of maritime companies as
corporate citizens.
“Our business has changed a lot in that the
traditional shipping company has become
more corporate,” George adds. “We have
to be on the lookout for these changes as
they appear and incorporate them into our
business. For example, if you want to entertain the opportunity of entering into the
capital markets, you have to have a structure
that is more open, more transparent and
that demonstrates a sense of duty to the
wider community.”
If there is any break with the strategies of the
past it may be most evident in the openness
to the thought of outside investors. The
Moundreases note that an educated shipping
investment sector appears to be developing in
the US markets. If it does, and if institutional
investors develop a better understanding of
the shipping industry, there may be future
opportunities for public offerings. “You cannot
exclude capital markets from your thinking
today,” says George. “You must at least have
it in the back of your mind as a way to
expand faster and relatively cheaply, if the
timing is good.”
“I think the main difference from our father’s
generation is also that he was the founder of
this business and built it up from nothing. We
came into a big company with an established
name. It is our job to do something new and
go forward with it,” says Natalia. “The new
company, NGM Energy, is a parallel scheme
to Good Faith. In the future, we expect to
enter the dry market and expand in the
tanker sector. This is just the beginning.”
Summer 2006
•
Surveyor
7
A Positive Oracle for
Greece’s Merchant Marine
Encouraging government support through education
he idea that Greece should set down
a day on which to honor its merchant
marine arose within the Executive
Committee of the Hellenic Chamber of
Shipping about two years ago. The proposal
was accepted by the Greek Government
and the country’s first official celebration of
Merchant Marine Day was held on 30 March
this year, bringing with it a long-sought nod
of validation for Greece’s merchant shipping
industry.
T
The Hellenic Chamber of Shipping is a body
designated under Greek law as the official
advisor to the State on matters affecting
merchant shipping. Although there has been
virtually no progress in many years on issues
George
Gratsos,
Hellenic
Chamber of
Shipping
surrounding the Greek flag, Chamber of
Shipping president George Gratsos says there
is good reason to be optimistic that recognition is awakening in both the Greek
Government and that its indifference to the
importance of the merchant shipping sector to
the country’s economy may be changing.
Educated in the US at the Massachusetts
Institute of Technology, Gratsos has been
associated with the Chamber for much of
his professional life and is in his second
term as Chamber president. “Greece controls
16.1 percent of world tonnage by deadweight
– the largest merchant fleet in the world –
and has a merchant seafaring history that
archaeological evidence suggests dates back
about 10,000 years,” he says. “We brought
to the attention of Government that it
was very remiss of us Greeks that we had
not yet picked a day to honor this legacy. The reply to our proposal was, ‘what
a good idea – why didn’t you think of
this before?’”
President
And so a door, closed for years, started
to open. Celebrated informally last
year, 2006 marked the first official
Merchant Marine Day with an event
attended by the President of the Greek
Republic, Secretary-General Mitropoulos
of the IMO and many other dignitaries. This year, Merchant Marine
Day was designated as 5 April, but celebrated on 30 March to accommodate
the schedules of its notable guests.
A permanent date for Merchant
Marine Day has not yet been set,
though its timeframe is. As its purpose
is not only commemorative but also
urgently practical – to awaken interest
in a sea career among the nation’s
youth – the day needs to fall near the
time of year when students fill out the
forms that declare the direction of their
higher educational pursuits.
“There is a worldwide shortage of officers,
upwards of 10,000 according to some
8
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•
Summer 2006
sources, and we in Greece have a
youth unemployment rate of 25 percent,” says Gratsos. “So, one purpose
of Merchant Marine Day is to remind
our young people that the maritime
industry can provide not only a goodpaying job at sea but also promises a
career ashore through the many maritime companies established here. A
Greek captain – and you can become
a captain by the age of, say, 33 – will
have a take-home salary of about
€ 8,000 per month while on board.
This translates to a net of about
€ 4,000 per month over the year,
which is an excellent salary. True,
it is hard work on board but then
you are home for several months.
Ultimately, it becomes a question of
how one wishes to organize one’s life,”
he says. “Our complaint is that it is a choice
that many young people didn’t know they
had, because effective Government efforts to
promote a maritime career among young people have been lacking.
“We consider it particularly important for
young Greeks to want to become ship’s officers. Our ships cost anywhere from a few million to about 250 million dollars. Cruise ships
cost even more. It’s only natural that if you
are going to entrust such an asset to someone’s
control, you would prefer he be someone who
has graduated college (Merchant Marine
Academy), shares your culture and speaks the
same mother language as you,” he explains.
“Now, we shipowners have no complaints
against other nationals and use officers from
all over the world,” he adds, “but we think
it extremely important to at least make it
known that this is good employment for
young Greeks. Further, as advisors to the
Greek State it is our duty to promote our sincere belief that it is in the long-term interests
of the nation to retain the ship operations
know-how of its captains and engineers.
“Know-how is strength. ABS, for example,
has know-how in ship structures and machinery, which is a strength that it sells. We have
knowledge of ships and ship operations. This
is the value we add to the community – the
local community and the world community.”
The Chamber distributed a brochure to
schools around Greece and, reports Gratsos,
has noted growing interest among its target
audience. But with Greek shipping a world
maritime power for decades, the question
arises as to why only now is this recognition
taking hold. Gratsos answers with an observation on human nature first articulated by the
ancient Greek storyteller Aesop: familiarity
breeds contempt.
“It is very easy for people to take something
for granted when it is around every day,”
he says. “The important and sometimes
difficult thing is to appreciate what you’ve
got while you’ve got it. Unfortunately, we
Greeks get carried away sometimes and don’t
really think about strong things as needing
to be promoted. For example, although we
have the largest merchant fleet in the world,
and contribute seven percent of the country’s
GDP, is there a national merchant marine
museum anywhere in Athens or Piraeus?,”
he asks rhetorically, adding “Have you seen
the maritime museum in Lisbon? It’s huge,
beautiful, and right on the waterfront –
and they don’t even have a substantial merchant marine any more.
“Some shipowners have established small
merchant marine museums on their home
islands but collecting artifacts for a central
museum has not yet been done. There is a
naval museum but civilization didn’t start
with warships. In fact, the first warships were
converted merchant ships. Now it appears
that the government is starting to collect
some old vessels and we have heard that it
may even get a Liberty Ship soon.”
Summer 2006
•
Surveyor
9
Another cause underlying Government’s historical lack of recognition for merchant shipping is that shipowners have not enjoyed a
handsome popular image in Greece, says
Gratsos. Unpretty shipowner caricatures were
standard fare in a certain genre of old Greek
movies, creating a pop culture aversion that
reflected itself in political distancing by populist politicians. One MP even publicly made
a play on words perpetuating the image,
exchanging the Greek word for shipowner,
efoplistes, with efoplou-listes, meaning ‘armed
robber’.
“Maybe the politicians didn’t understand us,
and maybe we didn’t reach out well to them
either,” Gratsos says. But with some effort
over time the ice is melting, he says, pointing
to convincing arguments on shipping’s contribution to the Greek economy, which began
six years ago with a major study organized by
shipowner John Lyras. Today’s figures, as per
an updated study carried out for the Hellenic
Chamber of Shipping last year, report 38,000
ships, Greeks directly employed by the
country’s 12,000 maritime companies, with a
further 250,000 employed in either supporting
or dependent sectors.
Those numbers have finally hit home, with
the present Prime Minister promising, on
taking office, to concentrate on supporting
tourism and shipping as Greece’s two most
important industries. For Gratsos, it is high
time. “The most rapidly growing merchant
shipping nation in Europe is Germany,” he
says. “They have figured out how to support
their shipping industry and, in the process,
revitalized the port city of Hamburg. Germany
has managed to advertise itself as a European
shipping center, while we have not.
“Our hope is that Government understands
that in order to maintain ‘the goose that lays
the golden egg,’ we have to keep the knowhow here,” he says. “We also hope that it will
be able to find ways in which to encourage
the development and the retention of this
know-how, much in the way other countries
in Europe have done. It is not just for the
benefit of the shipping industry, but for the
good of the country as a whole.”
All of which adds up to Merchant Marine
Day being very important both for Greece and
for Greek shipping. “Since the end of the
Junta in 1974, I don’t remember any Greek
head of State attending any merchant shipping event. Looked at from outside, it may
not seem like a grand moment but it really is
a landmark event. We consider it one of the
best things we have achieved so far.”
ABS Europe
Eastern Region
Vice President,
Dimitrios
Houliarakis,
meets with
HCS President,
George Gratsos
Meanwhile, with oracles an ancient part of
Greek culture, one particular tradition brought
the Chamber of Shipping an encouraging
augury in 2006. Among the ways to ring in
the New Year in Greece is to “cut the pita”,
an event in which a group of people divide a
large sweet with a coin hidden inside. The
person whose piece contains the coin has a
portent of good luck in the coming year.
This year, for the first time ever, the Chamber’s
pita party was attended by the President and
Vice President of the Greek parliament, as well
as a number of ministers and MPs – a powerful
signal of high-level recognition of merchant
shipping. Better still, after the pita pieces were
passed out one remained unclaimed, and for
the first time in Gratsos’ memory no guest
caught the coin – perhaps an oracle that this
year’s good luck will belong to everyone.
10
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Summer 2006
Putting the Focus on the Seafarer
The new consolidated International Maritime Labor Convention promises
a fair and level playing field for all elements of the shipping equation
n what has been hailed as a landmark
development in labor history, the
International Labor Organization (ILO)
adopted a comprehensive new labor standard
for the world’s maritime sector in February
this year. Endorsed across the board, from
trade unions and employers to governments
and the Holy See, the new consolidated
I
Title 4, Health protection, medical care, welfare and social security protection; and Title 5,
Compliance and enforcement.
Under the Convention, ships larger than
500 GT engaged in international voyages or
voyages between foreign ports will be required
to carry a “Maritime Labor Certificate” and a
“Life at sea will still be difficult and dangerous for the world’s 1.25 million
seafarers, but we are confident that the adoption of this comprehensive convention
on maritime labor standards, while not eroding existing seafarers’ rights, will
provide the appropriate environment for the emergence of a new maritime world
order that will provide opportunities for women and men to obtain decent and
productive work, in conditions of freedom, equity, security and human dignity.”
– Archbishop Silvano Tomasi, the Holy See’s permanent observer to the UN in Geneva,
addressing the International Labor Conference in February 2006
International Maritime Labor Convention
(MarLab) offers a unified vision of mutual
rights and obligations among the three elements of the industrial maritime equation.
The Convention text is divided into five
sections or Titles, supported by standards
and guidelines for its users. Title 1 addresses
Minimum requirements for seafarers to work
on a ship; Title 2, Conditions of employment;
Title 3, Accommodation, recreational
facilities, food and catering;
“Declaration of Maritime Labor Compliance”.
Shipowners will be required to declare a kind
of labor management system, much as they do
with safety under ISM, and shipmasters will
be responsible for carrying out the plans and
providing documentary evidence of compliance. The flag State will review the shipowners’ plans to verify and certify that they are
in place and being implemented.
ILO’s Geneva headquarters
Summer 2006
•
Surveyor
11
been ratified by any significant
number of countries.
For example, one of the most ratified Conventions covers medical
examinations of young people,
but it dates back to 1921 and has
reached only 81 ratifications in
85 years; a seafarer welfare convention from 1987 has only 15
ratifications; a Social Security
Convention, revised in 1987, has
just 3 ratifications; a labor inspection Convention from 1996 has
been ratified by 11 nations;
recruitment and placement of seafarers, from the most recent conference in 1996, has been ratified
by 9 States; and seafarer’s hours
of working and manning, despite
transformation into EU legislation,
has only been ratified by 17 States.
The fruit of four years of intensive tripartite
endeavour, the Convention knits together
and updates some 65 international Conventions and recommendations approved at ILO
conferences over the past 80 years. It is a
standout victory for the ILO membership,
which has never before managed to produce
a Convention or Recommendation
so widely acceptable.
Tripartism Key to ILO
The ILO is an unusual labor organization in
that all three parties to the condition of labor
– governments, employers and workers – are
represented at its deliberations. Each nation
sends a tripartite delegation to the ILO representing Government, shipowners and organized labor. The International Shipping
Federation, the association that shipowner
associations belong to, acts as a secretariat
to coordinate all shipowner efforts, while
the ITF acts as a secretariat coordinating
the various unions.
What distinguishes the ILO from other institutions is that its deliberations are always
tripartite and that the organization has to
reach consensus among all three sides. Since
1920, the ILO has convened many international conventions and made many resolutions concerning the rights and working conditions of seafarers, most of which have not
been effective and very few of which have
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The long road to a unified
maritime labor convention began
with the so-called Geneva Accord of 2001.
The maritime agenda at ILO is set by a bipartite group, the Joint Maritime Commission,
comprising shipowners and the unions – the
sides called ‘the social partners’ in labor language. In 2001, the social partners agreed that
ILO Conventions were not being ratified at
an effective level, and in the Geneva Accord
decided to amalgamate all existing ILO
maritime instruments into one Convention.
Major ILO conferences were held in
September 2004 and April 2005, with the
aim to complete a new text consolidating
and editing the principles, rights and standards that had been proclaimed in dozens
of Conventions and Recommendations over
the previous eight decades. Attended by 551
delegates representing governments, employers and seafarers from 88 countries, the
conference approved the draft Convention
after weeks of intense deliberation. At the
following 94th Session of the ILO, held 7-23
February 2006, some 900 delegates from about
100 countries approved the Consolidated
Maritime Labor Convention by a vote of
314-0, with four countries abstaining.
“This is the quintessential expression of
what would be decent work on ships,”
said Cleopatra Doumbia-Henry, Director
of the ILO’s International Labor Standards
Department, on adoption of the Convention.
In an interview with the ILO online magazine, she said “The text has gone as far as any
text can go as it establishes clear definitions
of rights, while it allows at the same time a
necessary degree of national discretion in the
delivery of those rights with transparency,
consultation and accountability.”
Commenting on the years of dialogue behind
the Convention, she added, “Tripartism and
social dialogue are key tools in getting beyond
policy and ideological dead ends. They can
reconcile the pressures for productivity and
competitiveness with sustainable development
and improvement in living conditions for all.
In the maritime sector, we have shown how
this can be done. The Maritime Labor
Convention shows that tripartism can give
constructive responses to the challenges of
this globalized industry and to globalization
more generally.”
Ratification
The next step is ratification. The hope and
expectation is that, through a blend of ‘firmness and flexibility’ MarLab will be acceptable
to all maritime and labor-supplying countries
and become the “fourth pillar” of international maritime regulation, alongside the
three IMO Conventions that have helped
define the modern maritime world: the
International Convention for the Safety of
Life at Sea (SOLAS), the Standards of
Training, Certification and Watchkeeping
Convention (STCW) and the International
Convention for the Prevention of Pollution
from Ships (MARPOL). The Convention will
come into force after it has been ratified by 30
ILO member States with a total share of at
least 33 per cent of world gross tonnage.
While there is a value in being the flag
that tips the balance for ratification of the
Convention, no one is rushing to grab the
honor. Each ILO member State is now carefully performing its own gap analysis to determine where existing legislation covers provisions in the Convention, how it can interpret
the provisions and so on. There are many
decisions to be taken before a State can put
its signature on the declaration of maritime
labor compliance that says the 14 areas
addressed by the document are covered by
State legislation.
“Liberia will be preparing national legislation
to enable it to ratify the Convention, but it
will not be the first to ratify,” says Jerry Smith,
senior advisor to the Liberian delegation and
spokesperson at the Conference. “We will
do so when a number of questions have been
answered. The first is to be satisfied that
seafarers on board our ships will have the
necessary protections, and that Liberia’s
clients, the shipowners, are likewise satisfied
with the protections the Convention offers
them. For example, a German owner will be
bound by the Convention for its German flag
ships when Germany ratifies – the EU is likely
to recommend ratification by all its members
– but Liberia will have to be satisfied that the
same owner will want the same conditions
for its Liberian flag ships. We expect they
will but we have to be sure.”
Another question that flag
States must answer, says
Smith, applies to laborsupplying countries.
“MarLab assigns some
responsibilities to laborsupplying countries to provide bona-fide, licensed
manning agents that treat
all employment conditions
properly and correctly. So
flag States have to ask if
the labor on ships flying
their flag is covered by the
legislation in the laborsupplying countries. If a
labor-supplying country
hasn’t ratified existing
labor conventions, is it
incumbent on the flag
State to verify that seafarers in that country are engaged and
employed through bona fide manning
agents within that country? That’s a huge
responsibility.”
Jerry Smith,
Senior Advisor to the
Liberian Delegation
Unprecedented Government
Involvement
One of the greatest benefits to the new
Convention is that it will provide harmonized conditions for seafarers regardless of
under which flag they serve, says one nation’s
Director for Shipping Policy, who has headed
her country’s delegation at three diplomatic
ILO conferences.
“This is the first time I have seen so many
governments so actively involved over so long
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a period of years,” she says.
“One of the achievements was
to get governments to confide
in the process and openly
discuss their reasons for not
ratifying present Conventions.
The point of the exercise was
to give member States a voice
in details of the Convention,
allowing them some flexibility
in accepting general principles
while working out details that
they could not accept for
internal reasons.”
Joe Cox,
President of the American
Chamber of Shipping
For example, a government
could accept the general
principle that all seafarers
are entitled to 30 days paid
vacation per year, without
accepting the further details that vacation
days lost to, say, illness or accident unrelated
to work must be compensated by the employer, which may conflict with national labor
legislation already in place.
“This was a very innovative exercise, which
from the start was determined to take place
with close cooperation from all parties.
Through more government involvement, it
was hoped that consensus could be reached,
which would be essential to the ratification
process. There was unprecedented support
for this approach,” she says, “which is reflected in the fact that no government voted
against the new text.”
This consensus was achieved through many
hours of hard negotiation on a number of
sticking points that required a lot of work
from all sides to resolve. Among the tough
questions addressed were, does the definition
of ‘seafarer’ include anyone working onboard
a ship or only those performing seaman’s jobs?
Should the master be excluded from the regulations on hours of work and rest? Does the
Convention’s scope apply to strictly coastal
vessels, and what does that mean for countries
with big cabotage fleets serving huge coastlines or immense island groups?
In the end, the Convention amalgamates all
but two previous ILO maritime conventions,
one relating to the security aspect, the seaman’s ID, and one on pensions, which ultimately was accepted as a matter left to individual governments. So, while close cooperation produced the successful adoption of the
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Convention, no one is claiming that the past
four years of meetings and conferences were
one long love-fest.
“The Convention will give better protection
vis-à-vis safety standards – especially in such
elements as work and rest hours,” she says.
“When these are uniformly applied, and
combined with other issues affecting the
standard of quality of life on board, there
will be a positive impact on recruitment
in the shipping industry. It would be easier
to attract and keep well-qualified and wellmotivated seafarers if they know they will
be provided with decent conditions,” she
explains. “Altogether, this gives port and
flag States some influence on the quality of
shipping. Attracting people to the shipping
industry is essential because the world is
dependent on the knowledge, skill and
motivation of the whole maritime cluster.”
Enforcement Critical
The key to the success of any new convention
is ensuring compliance and developing a
means of enforcement. This is taken up by
MarLab under Title V, compliance and
enforcement. It gives responsibilities to the
flag States to inspect ships under a body of
law within its own legislation, and to issue
certificates of compliance with the
Convention.
Normally, the only enforcement mechanism
to an ILO convention is an internal ILO
process called the Article 22 process, in which
labor complaints against a country are brought
before a panel of experts at the ILO. The
group of experts reviews the case, hears both
sides and if they find the country is not complying – nothing happens. One cannot compel a sovereign state to take any action. But
once the new Convention is in force, a signatory port State will be allowed to examine
vessels to ensure they are upholding minimum
labor standards, and those without a maritime
labor certificate on board or failing inspection
can be detained until brought into line – creating a sovereign commercial pressure to stick
with the program.
The Convention requires “inspections,
monitoring and other control measures” and,
while “inspections” (on board ship) are clearly
defined, “monitoring and other control measures” are not. The International Association
of Classification Societies is developing pro-
posals on how to handle the role of the
Recognized Organizations under MarLab.
At press time, no individual flag State had
yet taken a decision as to how it will enforce
the Convention – whether to keep the business in-house or delegate it to Recognized
Organizations. Most likely, according to
industry observers, is that it will be handled
in much the same way as ISM. The International Association of Classification
Societies is presently developing its position
relative to MarLab.
Meanwhile, the Convention is being hailed as
a seafarers’ ‘Bill of Rights’. “Nobody can be
threatened with being sacked if he complains
about conditions onboard,” says Joe Cox,
President of the American Chamber of
Shipping and member of the US delegation.
“In fact, the complaint process on the
enforcement side enables a seafarer or a representative organization – not just unions but
also such groups as the Seaman’s Church
Institute and the Mission to Seafarers – to
make a formal complaint that a flag State or a
port State is being negligent regarding conditions on board. In addition to creating a level
field, the Convention also involves the same
concepts as SOLAS in that it includes a compliance mechanism so that signatory States
can enforce the Convention,” he says.
While MarLab gives seafarer unions protections they have wanted in place for a long
time, it also gives some protections for the
other two sides of the labor equation. For
example, with the Convention in force,
shipowners flying the flags of signatory States
could find themselves shielded against trade
union strong-arming.
“The idea is to raise standards in general,” says
Jerry Smith. “The Convention achieves this
by providing a level playing field, a body of
legislation essentially applicable to all flags
and all shipowners ensuring that seafarers are
treated under a common standard. The actual
standards on board the ship – size of accommodation, amount of food, the way seafarers
are repatriated, the way one deals with medical issues and so on – are not going to change
significantly due to this Convention. What
does change are the new enforcement mechanisms for both flag and port states, and the
procedures developed for seafarers to register a
complaint.”
“There is nothing of substance in this Convention that would bother the vast majority
of shipowners,” says Joe Cox. “The enforcement is going to have an impact in that it will
require inspections and certificates. But the
substantial impact will be on the lower echelon of shipowner – substandard shipping.”
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Putting the Focus on the Seafarer
IMO, the New ILO
Convention and
Related Issues
By Efthimios E. Mitropoulos
Secretary-General, International Maritime Organization
T
he Memorial to Seafarers that
stands at the entrance to the IMO
Headquarters in London is a constant reminder of the central role of seafarers
in the maritime world. The lone seafarer
standing on the bow of a ship symbolizes not
only their fortitude to sail to the unknown in
defiance of the elements and in pursuit of
shipping’s peaceful aims but also their solitude
in an environment which, increasingly, looks
alien to that of their forebears.
The Memorial also reflects the importance
that IMO attaches to the human element in
safety of navigation, maritime security and
prevention of marine pollution, given the
involvement of the human element in all
aspects of marine endeavours, from the drawing board to sea trade, and given also the high
proportion of accidents and casualties at sea
attributed to human error.
The international conventions and protocols
adopted by IMO over the years to prevent,
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mitigate and deal with the aftermath of casualties and incidents, address all the technical
aspects of ship design, construction, equipment and operation, as well as the education
and training of seafarers. Working conditions
are addressed by the International Labour
Organization (ILO), and its new consolidated
Maritime Labour Convention, adopted in
February this year, is quite rightly being
referred to as the “fourth pillar” of the international regulatory regime for quality shipping, complementing the three most important IMO technical treaties – the SOLAS,
STCW and MARPOL Conventions – by
introducing, in the maritime profession, the
social element necessary to ensure decent
working conditions to which all seafarers
have a right.
The fact is that quality seafarers will only be
attracted to the industry in the first place if
they can feel confident of finding working
conditions appropriate to a modern, hightechnology, 21st Century industry – one that
recognizes that there is a clear interdependence between seafarers occupational health
and safety and the safety and security of shipping and the protection of the marine environment.
The links between ILO and IMO go much
further than the fact of having developed
complementary maritime conventions. The
two Organizations have collaborated most
effectively over the years on many specific
seafarer issues.
Currently, IMO and ILO have two Joint
Working Groups in the legal field: one on liability and compensation issues and one on the
fair treatment of seafarers.
The Joint IMO/ILO Ad Hoc Expert Working
Group on Liability and Compensation regarding Claims for Death, Personal Injury and
Abandonment of Seafarers, established in
1999, has developed two resolutions and related guidelines (one on Provision of financial
security in case of abandonment of seafarers, the
other on Shipowners’ responsibilities in respect of
contractual claims for personal injury to, or death
of, seafarers) which were adopted by the IMO
Assembly and the Governing Body of ILO,
with the Guidelines taking effect on 1
January 2002. It is regrettable that, while the
vast majority of seafarers work under fair conditions and have the support of their employers when things go wrong on board ship, some
are still subject to harsh treatment and unreasonable conditions. It is, therefore, for organizations such as ILO and IMO to look for
appropriate standards to safeguard the legitimate interests of the seafarers and the two sets
of Guidelines aim at providing them and their
families with a level of protection that has
hitherto been lacking in respect of two fundamental areas of social welfare.
Although the new ILO Maritime Labour
Convention is likely to go some way towards
providing a solution to many related issues,
the aforementioned joint Group will continue
to examine all the issues of financial security
for seafarers and their dependants with regard
to compensation in cases of personal injury,
death and abandonment, and to monitor the
implementation of the Guidelines. The Group
will also consider the development of longerterm sustainable solutions to address the problem of financial security with regard to compensation in cases of death or personal injury
and abandonment.
Earlier this year, the Director General of ILO,
Mr. Juan Somavia, and I sent joint letters to
nine States urging them to make every effort
to help resolve ten identified cases of seafarers
that had been abandoned on ships flying their
flag. To date, seven of those States have
replied to the joint letters and three of the ten
cases have already been satisfactorily resolved.
We will continue to take steps to bring to
similar successful conclusions any pending or
new cases of abandonment that may be
reported to either Organization.
The Joint IMO/ILO Ad Hoc Expert Working
Group on the Fair Treatment of Seafarers in
the Event of a Maritime Accident met in
early 2005 and in March 2006 and has developed Guidelines on fair treatment of seafarers
in the event of a maritime accident, which were
Efthimios E. Mitropoulos,
Secretary-General,
International Maritime
Organization
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nition of their vital contribution
to the community, seaborne
trade and the economy at large.
On board, ships are an unusual
place of work, operating in a
highly-dynamic environment
with set routines of shift work
disrupted only by arrival at,
working in, and sailing from
port. This existence involves
living in the place of work for
prolonged periods, creating a
unique form of working life that
almost certainly increases the
risk of human error, with a very
clear link between seafarers’
working conditions and levels
of fatigue and tiredness among
ships’ crews.
adopted by IMO’s Legal Committee in April
and are also being submitted to the ILO
Governing Body, which meets in June, for
adoption.
Member Governments are invited to implement the Guidelines as from 1 July 2006
and, in this regard, they recognize seafarers
as a special category of worker who – given
the global nature of the shipping industry and
the different jurisdictions applying in the
countries they sail into – need special protection, especially in relation to contacts with
public authorities. The objective of the
Guidelines is to ensure that seafarers, following a maritime accident and during any investigation and detention by public authorities,
are treated fairly and that detention is for no
longer than necessary.
Their adoption is a genuine demonstration
of the IMO spirit of co-operation and compromise, of the recognition that it is vital to promulgate them by consensus as soon as possible
and, thereby, to send a clear signal to seafarers
around the world that it is the wish of the
IMO family that they should be treated fairly.
I am sure this will be appreciated by the maritime community at large and the seafarers in
particular. As to next steps, it is now essential
that all States make good use of the Guidelines so that fairness and the upholding of the
basic rights of seafarers become a consistent
good practice throughout the world. Seafarers
should, in all instances, be treated with the
respect and dignity they deserve, in full recog20
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Indeed, fatigue has emerged as
a significant contributory factor to maritime
accidents – along with several other factors
such as communication, competence, culture,
experience, health, situational awareness,
loneliness, isolation, stress and working
conditions. An analysis of 187 instances
of groundings and collisions carried out
by IMO’s Sub-Committee on Flag State
Implementation (FSI) indicates that, in
150 cases, or some 80 percent, the human
element was a contributory factor. Broadly
equivalent results have emerged from similar
analyses carried out by the accident investigation bodies of several countries, including
the 2004 study on “Bridge Watchkeeping
Safety” issued by the United Kingdom’s
Marine Accident Investigation Branch.
In this regard, IMO and ILO have developed
a joint process for investigating human
factors, a step-by-step systematic approach
for use in the investigation of human factors
in incidents and accidents. As a result of the
adoption of Assembly Resolution A.884(21),
this process is now included in the IMO Code
for the Investigation of Marine Casualties
and Incidents, as Guidelines for the Investigation
of Human Factors in Marine Casualties and
Incidents. The Code is currently being
reviewed by the FSI Sub-Committee, with
a view to making it mandatory, in whole
or in part, in the future.
In looking at issues which can affect casualty
rates, the IMO Principles of Safe Manning
identify all of the many variables involved in
determining safe manning levels for ships and
are quite comprehensive – as are the principles to be observed for establishing watchkeeping arrangements and the hours-of-rest
provisions within the STCW Convention.
In this respect, IMO has also issued practical
guidance on fatigue mitigation and management (MSC/Circ.1014).
However, against the background of continuing accidents attributable to fatigue, a view
has emerged that perhaps the time has come
for the safe manning principles to be reassessed. IMO’s Maritime Safety Committee
(MSC) is being asked to approve new work
dealing with the review and revision of the
Principles of Safe Manning with a view to
considering, for example, whether it might
be appropriate to identify factors against
which flag and port State administrations
can evaluate manning levels on ships of
similar type, size and trade.
All of the work being carried out by IMO in
relation to seafarers and the human element
in general complements, or will complement,
many of the measures contained in the new
ILO Convention. The work being done by
the two IMO/ILO joint working groups is
testimony to this and, at IMO, we look
forward to continuing and strengthening
further our collaboration with ILO on these
and related matters.
ly important when seen against the background of the reported shortage of seafarers
that continues to cause concern. The
BIMCO/ISF manpower update of 2005 puts
the global shortage of officers at around two
per cent and indicates that, while there is an
overall surplus of ratings, recruitment levels
need to be increased to meet anticipated
demands – particularly for officers – and that
it is imperative to reduce the number of
officers leaving the industry after only a
few years of service.
In today’s world, a seafarer might be regarded
primarily either as an asset or as an operating
cost; it depends largely on the shipowner’s
point of view. But those at the quality end
of the market will clearly put the emphasis
on the benefits to be gained from employing
seafarers who are properly qualified, trained
and have the competence and welfare support
they need to manage today’s ships efficiently,
safely, securely and in a socially- and environmentally-responsible manner. Proper working
conditions will attract the right people.
On the regulatory side, IMO – and where
appropriate, in collaboration with ILO – will
always do what it can to support the seafarer.
In the end, effective global implementation
of IMO’s safety, security and environmental
standards will always be dependent on human
factors and, in this respect, a debt is owed
to seafarers – as well as to all the other dedicated professionals who contribute to making
the shipping industry what it is today.
Maintaining morale within the seafaring
profession is, therefore, hugely important
and we should be concerned about any moves,
albeit made in the name of greater security or
environmental protection, that may have the
undesirable effect of restricting or even denying seafarers their much-needed shore leave
or introducing measures for criminalizing incidents at sea not attributable to wilful acts.
In the former case, it is essential to ensure
that the implementation of maritime security
measures do not curtail the rights and freedoms of maritime workers nor their mobility
as they exercise their profession – when, for
example, they board their ship to work, take
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To truly create a safer industry – and I would
say this is true of any industry – you need
individual commitment, which is an act
of will. This will must be supported by userfriendly legislation that provides a level
international playing field and does not
encourage multiple, conflicting interpretations of what the law is.
Companies can have all the ‘safety culture’
and ‘open environment’ they want, but the
situation ultimately turns on the guy who
has his hand on the valve. He is the one
that all our good work has to reach.
Accidents happen in the best of companies.
Rules and regulations can limit risk, but not
eliminate it. I have four-and-a-half years’ sea
time in my seaman’s book, and I can say from
personal experience that the true presence
of safety on board is not a product of legislation, but of education and encouragement.
Conversely, the true absence of safety on
board is a product of learned discouragement.
Law and the Human Element
Nick Pappadakis, President, A.G. Pappadakis & Co., Chairman,
Intercargo and Chairman, Hellenic Marine Environmental Protection
Association gives a personal appraisal of the impact of legislation on
seafarer motivation.
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egislators have spent more than a
decade raising shipping industry awareness of the ‘human element’ and its
relation to safety at sea. Now it is time they
remind themselves of that same human
element and its relation to effective safety
regulation.
L
Fear of incarceration for what amounts to
doing your job scares young people away from
the industry – bad enough for our future – and
encourages early retirement of the experienced people who would normally pass their
skills on to the next generation. Thus, it steals
from the present and robs from the future.
I started in this business on 7 February 1961.
When I started, the industry was totally
unregulated. Now it is totally overregulated.
Through all those years and all that experience, one thing I have learned is that you
cannot make things safer solely by word of
law. Law can create a framework of regulatory
responses that try to ratchet up safety and
environmental protection. But it cannot
create the human willpower to do the
right thing.
We have seen this effect in our own company.
Recently, a captain and a chief engineer, each
about 50 years old, surrendered their seaman’s
books and took shoreside jobs, not for lack of
love of the sea but for fear of unjust imprisonment and other penalties. They cannot be
faulted for this decision.
But extend this effect through all the world’s
maritime companies over the coming years,
and you will see that the real harvest of
seafarer criminalization is not a safer environment, but the loss of many people at the
prime age of experience, knowledge, skill
and interest – the very foundations of the
maritime safety that everyone wishes to
retain and promote. I am sure the legislators
who made up this law did not have this
consequence in mind.
Meanwhile, I see bulk carriers becoming
more regulated, more complex vessels – not
by nature, but by necessity. As the world goes
increasingly further afield in its search for
raw materials, it is beginning to make greater
demands for more complex equipment and
techniques in loading, discharge and ballasting. For example, we are now seeing cargoes
loaded offshore at anchorages from barges
laden at shore facilities, and high-volume
terminals demanding extremely rapid ballasting/deballasting to increase ship throughput.
In this age of reducing time in port, ships
need to be more flexible to the demands
and needs of the people who use them. So
I further predict that, when the dry bulk
market falls off, charterers will prefer a
panamax bulk carrier that can discharge
at a capesize berth. Such a ship would need
to be robust, with holds certified to accept
the fifty-ton grabs often used with capesizes,
which implies strengthened tanktop and
structures below. In fact, I am designing ships
to do just that.
The transport of goods by sea is something
civilization cannot do without and, as the
maritime world and its ships increase in
complexity, the maritime industry’s overall
level of safety will rest more and more on its
experienced and motivated seafarers – working on board and ashore. Therefore, we need
to find ways of making legislation that is
achievable, reasonable and plausible.
When I was young, I was very fortunate that
our family yacht was once docked next to
that of the great Jacques Cousteau, who
visited with us several evenings. He told me
back then that with its deplorable treatment
of the marine environment, our fundamental
self-sustaining source of protein, mankind
had managed to shoot itself in both feet at
once. Society’s present desperation to clean
up the marine environment shows it has
finally recognized that truth. The sea will
self-renew if you let it. Industry will not.
Our legislators must wake up now, lest we
shoot ourselves in both feet again, irreparably
damaging the generational transfer of maritime knowledge and interest that is the
fundamental and self-sustaining source of
safety at sea.
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One company’s Quality transformation proves that continuous
improvement is more than just a catchphrase
I
n February this year, Consolidated Marine
Management (CMM) of Piraeus, Greece,
became the first company worldwide to
be awarded the HSQE notation by ABS.
The notable achievement is just the latest
in a series of progressively difficult Quality
milestones marking the company’s long
voyage of self-improvement.
CMM operates LPG and product carriers,
providing technical management for vessels
in the fleet of Latsco Shipping of London and,
since 1982, it has been one of world’s leading
operators of very large gas carriers (VLGCs).
In its present fleet are two VLGCs of up to
82,000 m³ capacity and four product carriers,
with three VLGCs under construction.
Recognizing that even a successful company
must change with the times if it is to retain its
leadership position long-term, CMM began its
journey of self-improvement in 1997 with its
preparation for ISM certification. In fact, the
only letter in HSQE that represents a statutory requirement is ‘S’, for certification to the
International Safety Management (ISM)
Code. The others – Q for Quality under
ISO 9000, E for environmental protection under ISO 14000, and H for
health and safety under OHSAS
18000 – indicate voluntary efforts
over and above the statutory
minimums.
Kostas Vlachos,
Chief Operating Officer,
CMM
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The HSQE notation awarded by ABS goes
even further. It is evidence that an audit
of CMM has verified the company to be in
compliance with the standards delineated in
ABS’ Guide for Marine Health, Safety, Quality
and Environmental Management. The new
Guide expands upon previous Safety, Quality
and Environmental standards by adding
management system criteria for the marine
industry based
on the specification for
Occupational Health and Safety Management
Systems (OHSAS 18001), which require that
a company establish, implement and maintain
documented occupational health and safety
objectives throughout the organization.
In the highly competitive shipping world,
where these certifications are increasingly
seen by clients as quality differentiators
among their service providers, ‘voluntary’
may be something of an understatement of
their importance.
“Oil companies in particular have become
very concerned in the rise of what appear to
be companies that are ‘audit-savvy’, meaning
they can pass an ISM audit without the actual
pain of compliance – the way schoolchildren
sometimes learn how to pass tests rather than
learning the lessons,” says Captain Steve
Blair, head of ABS’ Piraeus-based SESC
(Safety, Environmental and Security Certification) division. “As a result, about two years
ago they introduced Tanker Management Self
Assessment (TMSA) as a kind of commercial
filtering process for their tanker service
providers. Naturally, charterers want maximum confidence in the quality of the operations backing the tankers carrying their
products.
“The qualities a company needs to develop
to comply with TMSA are the kinds of
qualities it can develop through compliance
with various parts of HSQE certification. So,
the various HSQE notations are meaningful
certifications because they address very
specific aspects of a company’s operations,”
he explains.
“Everyone recognizes the international ship
security certificate and safety management
certificates as necessary because they are
statutory documents. What many don’t realize
is that a management system, implemented
effectively, can control all ship operations,”
he adds. “The more comprehensive a management system, and the more understanding
among staff of that management system, the
more smoothly it will operate and the less
the likelihood of incidents, accidents, vessel
downtime, port delays
and so on.”
For companies operating
gas carriers, those points
represent not only service differentiations and
key performance indicators valued under
TMSA, but also that
safe and efficient practices are at work on
board.
Training a Key to Quality Operations
CMM’s corporate
structure is based
VLGCs carry mainly propane and butane,
operating in a specialist field in which welltrained and disciplined crews are as valuable
an asset as the vessels themselves. Complex
cargo systems in which accurate control of
temperature, pressure and other aspects of
cargo handling are not just matters of good
practice, but also critical aspects of regular
operation.
on training procedure
and reporting.
For example, CMM’s VLGCs carry propane
at atmospheric pressure, refrigerated to -42°C.
For terminals without big refrigeration plants,
a temperature rise of even one or two degrees
in the cargo can cause a significant slowdown
in discharge rate while the terminal cools the
incoming liquefied gas stream. Or, something
as simple as the late closing of the air lock
door at the entrance to the ship’s motor room
can trigger an emergency shutdown on board
that will seriously delay discharge. For highvolume terminals whose business requires reliable vessel turnover, such slowdowns make
black marks against a ship’s performance
record, with the knock-on effect of damaging
the reputation of ship and operator.
It is no surprise, then, that CMM makes a
substantial investment in the skill sets of its
personnel. The company divides training into
three general phases: classroom, simulator and
shipboard. Theoretical studies and simulator
Summer 2006
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25
the sea in general, that a sea career doesn’t
mean being a seafarer forever. Rather, for
those willing to better themselves there is
the opportunity to build a very good career
ashore.”
practice are provided at training centers
in the UK and in Greece, and knitted
together through on-the-job training
aboard the vessels.
In addition, there is a two-month overlap for
vessel handover, where the incoming team of
ship’s officers familiarize themselves with the
vessel by working alongside their predecessors.
“It is a cost for the company, but we don’t
have any other practical option if our goal is
to cultivate good officers who truly know the
job of running an LPG carrier,” says CMM
Chief Operating Officer Kostas Vlachos.
As CMM’s management-level officers are
all Greek, another goal for Vlachos is to
bring a greater number of young Greeks into
a seafaring career. “Fewer and fewer Greeks
go to sea, making the number of officers
much lower than the real demand that the
Greek shipping community has even today,”
he says. “Therefore everyone, including the
Government, must find ways to give incentives to our young generation, to make them
understand that the shipping profession is a
good one and not one you enter because you
have failed at University.
“At CMM we say to young people that we,
as a company, offer good career prospects. All
of our staff who work the vessels come from
the vessels – the superintendents, the port
captains, most of the shore personnel. After
reaching the level of master or chief engineer,
if they are good, we give them the opportunity to continue as shore personnel. I use this as
an example to underline to young people who
are thinking of coming to this company, or to
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His own career to date is an example of
where self-improvement can take you.
Kostas Vlachos joined the Hellenic Coast
Guard in 1982 and was assigned to the
Merchant Ships Inspectorate division of
Greece’s Ministry of Merchant Marine.
He served the Ministry in various capacities
until 1997, becoming the representative
of the Ministry at IMO and serving on
the subcommittee on dangerous goods,
the bulk chemical committee, the Marine
Safety Committee and finally the Marine
Environmental Protection Committee. He
also served on the expert panel convened to
formulate new Solas regulations on roro passenger vessels following the Estonia accident.
This experience has proven very valuable
to his work with CMM. He joined the company in 1997 as Quality and Safety Officer/
Designated Person Ashore (DPA), as the
company was beginning its voyage into the
ISM Code. He became Operations Director
in 2004 and Chief Operating Officer in 2005.
In his 15 years with the Merchant Ships
Inspectorate, Vlachos had the opportunity
to examine the operations of many maritime
companies as well as the various Recognized
Organizations, like classification societies,
providing statutory services to flag Administrations. Among the lessons he brought from
this previous life were the importance to a
modern maritime organization of structure,
procedure, discipline and constant training.
While it took a good measure of promotion
and convincing, the result is a new corporate
structure based on training, procedure and
reporting.
“I couldn’t apply the thinking of a Coast
Guard officer to a commercial entity, because
the two mentalities don’t really go together,”
he says. “So I took the good things – the
structure – and tried to help this company
develop so that it could work for the benefit
of the customers, the business, the people and
the owners.”
“I do believe we have made a great improvement since 1997,” he adds. “The main change
is that nothing is done here unless it is part of
our procedures. If we find something is lacking, or we consider a new idea to be right, we
first issue it as a circular and work with that
for a year, and once it merges into our system
adopt it into our procedures. The main thing
is that none of us imagine working outside
procedures today.”
It was a key part of the owners’ wishes to
transform CMM into a professional company
that functions with the same level of discipline, reporting, accountability and transparency that one finds in a stocklisted corporate entity, even though there are no plans
for the time being for a public offering. The
point was to demonstrate to an increasingly
demanding client base a willingness to go
above and beyond the minimum statutory
requirements. Vlachos’ approach was to make
a stepwise improvement, with each certificate
a step towards a higher, harder goal.
Stepwise Improvement
Seven months after bringing Vlachos on
board, CMM received certification to the
ISM Code from ABS. Over the following
years the company slowly added certification
to ISO 9000, ISO 14000, and then OHSAS
18000 for the complete HSQE certification
award.
“If you don’t set targets, your organization
cannot achieve great things,” says Vlachos.
“People have to know towards what goal
they are working and for what reason things
must change.
you and the competition,” he adds. “Shipping
is an extremely competitive, difficult field,
where all the serious players today are constantly looking for ways to stand out to their
clients. This makes service delivery a very
important differentiator, which is why we
work so hard to achieve continuous improvement.”
“As auditors, we can promote the benefits of
the various components of HSQE certification, we can educate and train staff, and we
can advise operators on their best course of
action within the HSQE world. What we
can’t do is operate the management system
for them,” says ABS’ Steve Blair. “At the
moment there are too many companies out
there walking the tightrope of nominal compliance – there isn’t a lot wrong with their
systems, but not a lot right, either. What I
hope we see in the future are a lot more
CMMs, companies that have embraced fully
the requirements of our HSQE Guide and
have implemented it in a professional and
meaningful way. These are industry leaders.”
“Continuous improvement is a continuous
challenge: to improve the condition of the
vessels, the service this company gives its
customers, safety onboard the vessels, protection of the environment, and the training
and education of all our staff,” says Vlachos.
“This means that continuous improvement
is for everybody’s benefit – owner, customer,
and staff. If you believe that you have reached
the end of improvement, I believe you have
lost the game.”
“So, as we went for each certificate we publicized the reasoning
behind it – this certificate will
assist our vessels and our crews
in health matters, and this other
one will help the environment
and improve our image to the
customers and the public, etc.
Using the certificates as targets
for improvement clearly identified for everybody the company’s
new direction, and what each
certificate would achieve for it.
In this way we have improved
not only our operating record,
but also our service delivery,”
he says.
“For me, the more you improve,
the bigger the difference between
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27
ABS’ New SESC Center
ABS Piraeus is the new European center for the ABS Safety, Environmental and
Security Certification department
n early 2006 ABS relocated its Safety,
Environmental and Security Certification
(SESC) department to Piraeus, Greece,
creating a new center for management system
certification services that will serve a growing
number of clients in Europe and the Middle
East who are now embarking on the long
voyage of continuous improvement. The
department is led by Captain Steve Blair,
Division Head of SESC for ABS, and a
team of three experienced surveyor-auditors,
Evangelos Papasthatis, George Pittas and
Panagiotis Nikiteas.
I
The ABS SESC team in
Europe, Division Head Capt.
Steve Blair (rear) and
surveyor-auditors (left to
right) Panagiotis Nikiteas,
Evangelos Papastathis and
George Pittas.
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Summer 2006
The SESC organization within ABS is responsible for auditing and certification under the
International Safety Management (ISM)
Code and the International Ship and Port
Facility Security (ISPS) Code. In support of
these statutory certifications, ABS offers two
additional products to its clients: the ABS
Guide for Marine Health, Safety, Quality and
Environmental Management (the HSQE Guide)
and the ABS Guide for Ship Security (SEC)
Notation. Each covers voluntary efforts over
and above the requirements of ISM and ISPS
through which companies may wish to
demonstrate a commitment beyond the
minimum statutory requirements.
ABS first published a safety, quality and
environmental management guide in 1999.
The latest edition has been expanded to
incorporate the requirements of OHSAS
18000, a specification for occupational health
and safety management derived from British
Standards. Although it has not yet been
adopted by ISO, it does provide guidance
for companies wishing to implement occupational health and safety issues within their
management systems.
HSQE is not a single certification, but a set
of certifications based on the relevant
international standards (ISM
for safety, ISO 9000 for
Quality, ISO 14000 for
the environment and
OHSAS
18000 for health) that offer companies specific points of focus for their management systems, from which they can choose according
to their particular needs.
The international standards on which Q, E
and H are based are not mandatory requirements, but voluntary commitments.
Companies often comply with them because
they are led in that direction by their clients.
These certifications demonstrate compliance
beyond the required minimum and are seen
generally as a mark of quality that brings a
competitive edge, or at least puts a company
in the top tier of competitors. In February
2006, Piraeus-based Consolidated Marine
Management (CMM) became the first company worldwide certified to the requirements
of ABS’ new HSQE Guide.
Among the drivers behind the maritime
industry’s movement towards certification
beyond ISM was a push for professionalism
from the energy sector, led by the Oil
Companies International Marine Forum
(OCIMF). In 2004, OCIMF introduced a
best-practices guide for tanker operators, the
Guide for Tanker Management and Self
Assessment (TMSA). Within TMSA are
specific requests to track key performance
indicators (KPIs) relating to quality, safety,
environmental matters and occupational
health and safety.
Because TMSA asks for a comprehensive
management review on a number of different
fronts, some tanker owners who initially took
it up found themselves trying to reconcile
new and existing management system requirements. In response, ABS developed a single
management systems guide to wrap all such
requirements together. This integrated management system, says Blair, is assisting clients
in fully embracing TMSA and showing their
commitment to operate over and above
minimum requirements.
And, while TMSA is directed at tankships,
the sector which first took up the HSQE initiative, ABS wrote its Guides in such a way
as to apply to any ship type.
“We have HSQE clients in the bulk carrier
industry and, in the US, there are even some
inland tug and tank barge operators embracing it,” says Blair. “CMM in Greece is our first
client worldwide certified to HSQE and it is
being followed by a number of companies
wanting to demonstrate their further commitment to quality.”
There is a sound commercial aspect to certification, says Blair. “I see certification not in
terms of making a profit but more in terms
of loss prevention. Operating a management
system may in the end bring savings, but I
believe the most important way of looking at
it is that the money and time and effort spent
implementing the management
system will be paid back in
the fact that vessels
will experience less downtime and delays
attributable to the vessels themselves. Just
think of not losing $50,000 per day due to
detention or some other failure – to which
you have to add the loss of confidence in the
ship by the charterers, and the fact that loss
of confidence in one ship often passes on to
all the ships in a company’s fleet.
Industry is seeking guidance
on compliance with HSQE
and TMSA requirements. ABS
Director SES Certification,
Capt. Pat Fallwell, leads one
of many courses at the ABS
Academy.
“These are meaningful certifications,” he adds.
“They have substance and, if the management
systems they stand for are properly applied,
they can change a company for the better.”
In speaking about ship operations and management systems, Blair knows exactly what
he is talking about. He was a captain, trained
and raised in the glory days of oil company
house fleets, serving throughout the 1970s
and 1980s in the fleet of Texaco Overseas
Tankships, the UK shipping arm of former
US oil major Texaco.
“I was brought up in the environment that
they are promoting today, run with discipline,
policies and procedures,” he says. “The quality
of those fleets and the management systems
Summer 2006
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29
that ran them 30 years ago, is what the oil
majors are trying to push on the independent
fleets today. Most majors have moved away
from large fleet operations, seeing chartering
in tonnage as a more viable proposition. But
they want to see their hired ships operated to
the same standards and quality levels that
they themselves used to apply. One of the
mechanisms they have introduced to accomplish that goal is TMSA, which supplements
statutory mandates by acting as a kind of
commercial filtering process.”
Blair’s post-bridge career prepared him well
for his current position. After leaving the sea
Blair worked in cargo and P&I surveying and
tanker vetting, joining ABS in 1996. Between
the first and second mandatory deadlines for
ISM (July 1998 and July 2002), he worked as
a hard-hat-and-boiler-suit surveyor, adding
certification in almost all ABS survey processes to his skills set. For the past five years he
has been ABS’ divisional head of SESC, stationed in Dubai.
“We relocated the SESC headquarters from
Dubai to Piraeus to have a central location
from which we can serve a growing client
base in Europe and our established customers
in the Middle East,” he says. The number of
companies looking to move above and beyond
statutory minimums is increasing, and with
it a growing need for training. What we need
in the industry are more companies following
CMM’s lead in embracing HSQE in a
professional and meaningful way, and I
look forward to having a role in helping
them achieve that.”
Through Auditors’ Eyes
“I believe we have the best-trained auditors
out there; and the statistics back that up,” says
Captain Steve Blair, Division Head of Safety,
Environment and Security Certification (SESC)
for ABS Europe, based in Piraeus, Greece.
“Vessels with an ABS Safety Management
Certificate on board have historically had very
few problems with Port State detention.”
Captain Steve Blair,
ABS Division Head of Safety
Environment and Security
Certification
The SESC staff act as both coordinators and auditors. In addition to performing audits themselves,
they coordinate the activities of the 50-plus surveyor-auditors in ports throughout Europe, Africa
and the Middle East. Blair’s primary role is maintaining relationships with flags and clients, while
the team deals with questions raised by auditors,
flag Administrations, owners and port States.
“Documentation review is just one component
of auditing the effective operation of the management system,” says Blair. “Our auditors have
been trained to also look at whether people
know what they are doing, whether they understand their roles and responsibilities and whether
they can perform the functions assigned to them
by the company. The management system documentation is the guide by which they carry
out their work, but if it isn’t understood and
followed, it isn’t worth very much.”
The auditor attends the vessel to verify the
effective implementation and operation of the
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Summer 2006
Company management system on board. He
does this by reviewing documentation and
records and by interviewing a random selection
of the officers and crew. “We go on board to
verify that they are operating in accordance with
their management system and its documented
procedures,” says Blair. “It’s a verification
process, in the same way a class surveyor verifies
a vessel is being maintained in accordance with
class Rules.”
“The effectiveness of a management system
is often reflected in the condition on board its
vessels,” says surveyor-auditor George Pittas.
“Even though you are not there as a surveyor,
you keep your eyes open to the condition of the
ship because, after all, these certifications represent concrete practices. Say you review a company’s documentation and its records are spotless, the checklists and forms are perfectly filled
in but when you go on board you notice the
lifeboat looks like it hasn’t been swung out in
a very long time. That’s when you investigate
further. Normally, bad things don’t exist in a
vacuum, so if one thing is wrong, others probably
are as well.”
“I often ask crew members how their lives
have changed over the past 10 years of ISM,”
adds auditor Panagiotis Nikiteas. “They usually
say their living and working conditions have
considerably improved.”
ABS Maritime Services and its New
Training Center Debut in Greece
In June this Year ABS unveiled ABS
Maritime Services Hellas, a for-profit affiliated
company to ABS providing training and
marine services that go beyond traditional
classification services. Located on the fourth
floor of ABS’ building on Skouze Street
in Piraeus, it shares premises with another
new ABS service in Greece, the Safety
Environment and Security Certification
(SESC) Division recently relocated from
Dubai.
Headed by Kostas Klapanis, ABS Maritime
Services will handle non-classification marine
services including the Rapid Response
Damage Assessment (RRDA) emergency
response service,
Condition
Assessment
Program (CAP)
surveys, risk
management and
engineering services. It will also
operate a newly
constructed
training center
that will offer a
wide range of
marine related
courses. Another
Kostas Klapanis,
ABS affiliate,
ABS Maritime Services
ABS Nautical
Systems which supplies advanced fleet management software systems to Greek and other
shipowners is already located in the building.
“We assist clients with anything maritime
apart from classification,” says Klapanis.
“There are many obligations today apart from
class – ISM created a number of obligations
when it was introduced eight years ago,
and TMSA has expanded those obligations
geometrically.
“There is a need for training of shipping company office staff and afloat personnel in quality and safety management, and other areas,”
says Klapanis. “In recent years, clients have
asked for training assistance in classification
matters, survey requirements – how to survey
things, how they can best prepare for a survey,
and so on – and for education in how to
handle new requirements and responsibilities in, for example,
the tanker sector.
“One reason for this
new training need is
that some office personnel are not as experienced as they were in the
past when most superintendents and port captains came to the office from sea careers and
just a small number came from a more academic or purely commercial background,” he
explains. “The pendulum has now swung the
other way, and there are more people entering
shipping with business degrees but without
much real experience on the vessels, so they
need schooling in many aspects of shipping.”
Initially, the training center will offer courses
in ISM, SESC and TMSA-type matters
taught by Steve Blair and his SESC team.
Future courses will include the LNG training
courses developed in ABS Korea that have
brought attendees to Koje Island from all
over the world.
ABS Maritime Services will be far more
than a training center, however. “We will be
continually assessing the range of services we
provide and we will develop new ideas for
additional products and services, running from
educational seminars to consultation services,
in direct response to client needs,” Klapanis
explains. One of the future offerings will be
a familiarization program in coatings to help
prepare industry for the expected new statutory requirements.
“By the end of the year, IMO will establish its
first requirements on coatings,” says Klapanis.
“Maritime companies will need to know
what this means for them, so we are creating
courses to train shipping company personnel
in how to inspect coatings during vessel
construction, and how to inspect and repair
coatings in existing ships.
“ABS Maritime Services will do its best to
provide professional services that cover any
non-classification maritime needs – professional services of the caliber that ABS has
always provided,” he says.
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Viewpoint: Respect is a Cornerstone
of Safety at Sea
Adamantios M. Lemos,
Unisea Shipping Ltd.
f you’re going to hand over control of a
multimillion-dollar asset to a group of
people in your employ, you’d better know
them well and bring them very close to you.
It’s wonderful to have great ships with the
best equipment and all the extras, but if you
don’t put the right people on board, train
them well, support them, give them good
living conditions and treat them right,
you’re finished.
I
of safety on board, what kind of situation is
created by giving a crew a substandard ship?
People are the center of our industry. I think
the secret to the success of Greek shipping is
that the traditional shipowners were always
able to run their ships well with good people,
who felt they belonged and were dedicated
to their ships.
We regularly inspect secondhand ships for
purchase, and we see too many that we consider substandard, from late 1980s-built, allhigh-tensile steel vessels which had problems
coming out of the yards to others that just
haven’t been well maintained.
At Unisea, as at Ceres before, we believe
our people, ashore and at sea, are the most
important asset we have – and that’s how
we treat them.
Worse still, in the record-high markets of the
past two years, ships that should have gone to
scrap years ago are still able to get work and
are still trading – with full certifications.
It goes beyond all of the rigorous training
that our shipboard personnel receive
on-board and ashore through our crewing
company, Unisea Philippines. Our ships
have dedicated crews, for whom their ship
is like a second home. We know our crews
on a first-name basis; we meet and get to
know their families. After many years of
dedication and perseverance we have been
able to duplicate the natural closeness that
we have with our Greek crews in the
Philippines, and we are very proud of that.
Though Charterers’ demands have improved
the quality of the world tanker fleet, I don’t
think we will see a similar movement in the
dry cargo sector in the near future. It doesn’t
appear that the majority of charterers are
sufficiently concerned about the quality of
the shipping they use, at least to judge from
the number of poor-quality dry cargo ships
trading today.
This aspect of ‘human factors’ is something
to which we have dedicated a lot of time and
effort. Admittedly, it isn’t the most economical strategy for ship management. But you
can’t have consistently safe, reliable, quality
ship operations if you cut corners.
This brings up the subject of substandard
shipping, something I actively work against
through industry committees and my participation on the board of the UK P&I Club
and the board of Helmepa. If training,
dedication and morale are the cornerstones
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I recently visited M/V Bulk Africa, a Unisea
managed ship, while it was discharging. The
ship is spotless, and we are very proud of her.
But right there you could see other ships coming in to the terminal to discharge that looked
as if they were held together only by their
paint – and yet they are in the same trade.
The dry bulk sector is about ten years behind
the tanker sector in terms of cleaning up its
act. The common structural rules will help
very much with this, though at present they
do need some straightening out. Nevertheless
it’s a step in the right direction.
Vetting inspections and TMSA requirements
have clearly helped improve the tanker sector
and in some form would also improve the dry
bulk sector – while also helping the good
owners – but I don’t think that it would be
easy for dry cargo charterers to make this push
for best practices. I only hope that it will not
come from regulators responding to a substandard ship-related disaster.
TX 03/06 12000 6058