Partnerships and Relations between Charterers and Owners in the current economic landscape

1. Partnerships and Relations between Charterers and Owners in the current economic landscape Maintaining Trust and Transparency in Turbulent Times: The continued need for charterer and owner partnerships in a market downturn Image Courtesy of NORDEN AS OCIMF Pre-Conference Seminar Shipping China Energy 2009 Shanghai Tim Wilkins Regional Manager Asia-Pacific Environmental Manager

2. ...20 minutes... • INTERTANKO • Turbulent times...positive trends • Safety and environmental performance • Trust and Transparency

3. 1. INTERTANKO International Association of Independent Tanker Owners A non-governmental organization established in 1970 to speak authoritatively and proactively on behalf of tanker operators at international, regional, national and local level • Representing oil and chemical tanker owners 290 Members 2,950+ tankers 80% of independent tanker fleet 85% of chemical tanker fleet 330 Associate Members

4. 1. INTERTANKO MISSION • To provide leadership to the Tanker Industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products. VISION FOR THE TANKER INDUSTRY • A responsible, sustainable, respected Tanker Industry, committed to continuous improvement and constructively influencing its future. ONE OF THE ASSOCIATION’S PRIMARY GOALS • Lead the continuous improvement of the Tanker Industry’s performance in striving to achieve the goals of: Zero fatalities Zero pollution Zero detentions

5. Maintaining Trust and Transparency in Turbulent Times: The continued need for charterer and owner partnerships in a market downturn • Turbulent Times? But positive trends in safety and environmental protection to be maintained...

6. Accidental oil pollution into the sea and tanker trade 2. Turbulent times...positive trends 1000 ts spilt Billion tonne-miles Record low pollution in 2008: 2,000 ts Source: INTERTANKO/ITOPF/Fearnleys

7. Tanker incidents and accidental oil pollution 2. Turbulent times...positive trends Number incidents Based on data from LMIU, ITOPF and others

8. charterer and owner partnerships in a market downturn 3. Trust and Transparency 3.1 Trust • TMSA - benchmarking • Officer and crew competence 3.2 Transparency • Information sharing • Incident reporting

9. TMSA and TMSA 2 Gap Analysis 85% of INTERTANKO’S comments were taken into account. http://www.intertanko.com/templates/intertanko/issue.aspx?id=44647 TMSA 2 Benchmarking database http://www.intertanko.com/templates/TMSA2.aspx?id=44407 3.1 Trust – TMSA TMSA Benchmarking

10. Officer Retention Benchmarking Building of the officer retention benchmarking database is underway and a test version of this database will be available for review in 2009 Crew Retention Benchmarking Building of the crew retention benchmarking database is underway and a test version of this database will be available in 2009. 3.1 Trust – TMSA TMSA Benchmarking

11. 3.1 Trust – Officer and crew competence Oil Company Response to Human Error Incidents • Currently STCW does not supply the level of comfort required • Tanker Endorsements do not supply the level of comfort required Major Casualties within the Tanker Industry confirm the exposure to risk when inappropriate levels of familiarity, expertise & experience are held within the ship-board management team. (TOTAL) Officer Matrix Requirements (“Time with Company” and “Time in Rank”) • TOTAL • KOCH • DOW • Conoco Phillips • Chevron • Shell

12. 3.1 Trust – Officer and crew competence Tanker Officer Training Standards (TOTS) Summary • INTERTANKO response • Enhance competency based training • Provide verification of understanding • Ensure compliance with today’s rules and regulations • “Ease compliance” with Officer Matrix Requirements • Ensure that the team onboard will operate the tanker environmentally aware and safe • Provide comfort to Oil/Cos/Chrt’s via a structured and controlled process

13. 3.2 Transparency – Information sharing Terminal Safety - Terminal Vetting Database What • Terminal Vetting • Tankers are vetted but are sometimes asked to make fast to poor quality berths • The vetting process works for ships, so why not for terminals? Why • enhance safety at the terminals • improve member efficiency by influencing terminals to ‘fix’ problems • maintain industry safety record

14. 3.2 Transparency – Information sharing Terminal Safety - Terminal Vetting Database 1 – Poor Worse than average in all areas, needs a lot of improvement 2 – Below Average Worse than average in some areas, could use some improvements 3 – AverageFully adequate 4 – Above Average Better than average in some regards 5 – Excellent Of a very high quality in all regards How it’s used: Level 1: Vessel Manager can review terminals prior to vessel’s call. Level 2: Owners are encouraged to discuss “poor reports” with the Terminal. Level 3: The INTERTANKO Vetting Committee will assist in cases where the Terminal does not respond or responds poorly to the owner’s requests and will be tasked to follow-up with any terminals not responding to Owner’s observations.

15. 3.2 Transparency – Information sharing Terminal Safety - Terminal Vetting Database • To date we have received over 7000 reports (100 hundred companies) • Induced at least three terminals to make extensive improvements • Started constructive dialogue with many others • Reached agreement to work in partnership with BP • Received dozens of enquiries from terminals around the world requesting feedback on their terminals in order for them to review and improve (if necessary!)

16. 3.2 Transparency – Information sharing INTERTANKO Terminal Satisfaction Sheet • INTERTANKO has now made available a "Terminal Satisfaction Sheet" • This enables the ship and the company to acquire useful feedback from the terminal regarding the ships performance prior to the ships departure. Primarily pertaining to the safety aspects of the vessel with a focus on continual improvement. • Another simple one page feedback form!

17. Confidential Information Reporting Platform: a standard incident reporting format that may be used to enhance the level of information and feedback we receive within INTERTANKO with regards to accidents and incidents, root cause analysis and the categorisation system for the incidents and accidents themselves. Potential to become an industry standard. Common Database for use and population by members Shared information on root cause Incidents@intertanko.com 3.2 Transparency – Incident reporting

18. 3.2 Transparency – Incident reporting

19. 3.2 Transparency – Incident reporting

20. 3.2 Transparency – Incident reporting

21. 3.2 Transparency – Incident reporting

22. 3.2 Transparency – Incident reporting • Tanker operators reporting to charterers on incidents and root cause analysis • Reciprocal transparency requested in charterers use of ‘technical hold’ situations • Allow for corrective action to be taken swiftly by operator • Partnership between tanker operators and charterers – incident reporting and information sharing - ITOSF

23. ...20 minutes? • INTERTANKO • Turbulent times...positive trends • Safety and environmental performance • Trust and Transparency • TMSA – benchmarking • Officer and crew competence • Information sharing • Incident reporting

24. thank you For more information please visit www.intertanko.com tim.wilkins@intertanko.com