There are too many seafarers on ships unable to go home, to transit from their ships to ports, and society has to be aware of the risk we are taking when we are not allowing crew to transit, according to Rolf Thore Roppestad, CEO of marine insurer and International Group P&I Club Gard, who gave a keynote speech at last week’s Marine Insurance Asia virtual conference.
Thore Roppestad said that Gard, in alliance with the shipping industry and a UN initiative, had engaged to improve conditions for the transit of crew. “It has not been easy and the task is far from finished. I can only say that some of the countries which had been very positive had been some of the key maritime countries in Asia,” Thore Roppestad said. He particularly praised the Singapore protocols, which he thought were one of the best ways of managing this crisis.
Thore Roppestad noted that, if a crew member had been on a ship half a year or eight months longer than contract, he or she was probably not the best person to be on a ship, and might easily “step wrong”. “We are all human beings. And we have to be aware of the risks we are taking by pushing crew in the way we have seen in the past year”, he said.
In his speech on Asia’s growing influence in sustainable maritime, Thore Roppestad covered a range of areas where the marine insurance sector, “a small wheel in the far larger global maritime industry”, could contribute to the industry’s sustainability.
The Gard CEO said that sustainability was all about balance between economic development, environmental development and social development. He observed that the marine insurance sector was lucky in that it worked in an industry that was closely knitted together with the sustainable development principles of the UN. “There are three areas that we are working on every day. These are to help protect the lives and livelihoods of seafarers, to help to make the oceans cleaner and safer, and to enable business growth for our members and clients”, Thore Roppestad said, adding that sustainability was much more than a buzzword; “it is what we are working on every day”.
With Asia controlling 50% of the world’s fleet, having more than half of the 200 largest ports, and building 90% of the world’s tonnage, Asia had a big part to play in the sustainability drive. The routes of Asia to America and Asia to Europe were both twice the size of the historical largest trade route, between America and Europe.
While shipping had become more efficient, it still had ambitious goals when it came to reducing carbon emissions. “I think that the development towards lower emission levels is certainly a big challenge”, said Thore Roppestad, noting that the world’s population would continue to grow (and thus, presumably, the amount of goods being shipped), but shipping had to reduce its emissions.
In conjunction with Windward and its Predictive Intelligence Platform, Gard put together a heat map of actual incidents. This showed that, when grounding and collisions by region were adjusted for sailing days, Asia East and Asia West were the two safest regions in the world, with the Americas region being the most risky, followed by Europe, and then Africa.
Thore Roppestad said that one reason for this might be geography. The trading routes in North and South America go more on rivers. However, Thore Roppestad said that he was “also confident that if you dig deeper you will probably find signs of good practice impacting the figures that you have seen”, adding that he would not be surprised if the level of investment that we have seen in Asia in the past 10 years was not a significant contributor to the overall picture.
Gard’s loss prevention department will soon be releasing an analysis on the Gard web site relating to the grounding and collision heat map. “It is important for shipowners to understand the risks that they face in different areas”, he said, while also observing that the same ships were calling at Asian ports as are calling at American ports and European ports. “So the differences relate to things other than the ship and its crew”.
Thore Roppestad said that sharing of experiences was one thing that the marine insurance industry could do. “Although the marine insurance industry might be a small industry, still we are a necessary part of the maritime industry in total. We are actually, a few handfuls of companies, providing a good overview of the industry as a whole.”
Some practical examples of how the marine insurance industry could help were:
- Casualty response
- Speaking with one industry voice.
Thore Roppestad said that all 13 International Group Club boards took the decision last year to put sustainability high on the agenda of the group.
I think that with one industry voice of the world’s fleet we have some impact. “What we are doing today is important because we will be measured in the future on what we do today.”
Thore Roppestad noted the strong contributions of other organizations such as Cefor and IUMI. “So we need to stay together as an industry”, he said.
Gard has adopted “outreach” methods, “seeking a better working relationship with authorities, which the insurer hopes will lead to more effective and technically superior responses to serious casualties.”
Many casualties can be dealt with in a better way than they are at the moment, said Thore Roppestad. Together with the International Group Gard is starting to liaise with international maritime authorities to be prepared for accidents when they occur.
These efforts aim to:
- Prevent a serious incident becoming a disaster
- Keep loss and damage to a minimum
- Protect the environment
- Protect the member’s reputation
- Keep costs as low as possible
- Develop competence and experience in-house
All of these complement the International Group’s P&I outreach.
Thore Roppestad said that Gard had been involved in discussions with all major maritime countries and had run workshops with maritime authorities in Brazil, the US, China, Singapore, Japan and several European countries. “We have seen practical and clear benefits from that work”, he said, adding that “when you are better prepared, you will solve a casualty quicker and with fewer consequences than if you start unprepared”.
Citing an instance in China where trust and cooperation had enables a smooth solution to a problem, Thore Roppestad said that “it’s not a question of if an accident happen, but when, so that if you have a plan, you can just go for it”.
Harnessing data to minimize risk
Thore Roppestad recounted that a couple of years back the insurer started a geofencing exercise, trying to spot which vessels in the Gard portfolio might run the risk of loading nickel ore with too high a water content.
Gard drew a map based on weather data, and if a bulker breached one of these geofences then the member got a notice about the situation. “We asked the shipowner to make sure that a proper cargo sample was taken before it was loaded onto the ship”. Thore Roppestad said that he thought this was one area where marine insurers could work on sustainability to reduce losses. Last year Gard gave advice to more than 100 ships calling at Indonesia or the Philippines, two countries where nickel ore cargoes had been of concern due to inaccurate documentation and insufficient testing regimes.
Since 2010 more than 100 seafarers had lost their lives in casualties associated with nickel ore loaded in Indonesia and the Philippines.
Gard therefore tracks vessels entering areas where nickel ore is loaded in specific trouble sports.
Realize business opportunities in the transition to a decarbonized economy.
Thore Roppestad said that the fact that there would be an energy transition was not in doubt. “We will go towards a society with cleaner energy and its actually happening quite quickly”. Offshore wind was developing rapidly in Asia, with Taiwan being Gard’s biggest market in the region at the moment. “I think that the group clubs have many of the competencies to handle offshore wind as they can traditional maritime activities”. It was encouraging to see the development of offshore wind in Asia, he said.
Referring to the significant decline in the number of oil spills over the past five decades, Thore Roppestad said that this was a combination of requirements from authorities, ship design with double hull, shipowners taking responsibility, banks providing finance, and insurance companies standing behind new liability regimes. “Many of us didn’t like [it] at the time but which I think we have to admit, did work”.
Here Thore Roppestad mentioned the leading role that the International Maritime Organization (IMO) had to play. “I think that IMO is not always the fastest moving organization, but it is the organization which has been the key driver of many of the developments towards a more sustainable maritime industry. A strong IMO is important for future developments”.
Answering questions from the audience, Thore Roppestad was asked to what extent the group clubs were working together to share data. He said that there was a subcommittee in the IG working on this. His main response was that, while it was important to share more data (notwithstanding having to be aware of the competitive constraints and regulations) but that this should not start from the general principle of sharing lots of stuff and seeing what happened as a result. “It’s important to look at what the problems are that we want to solve, and then to see what data can be shared to solve that”, he said.
“Geofencing, for example, could be done in a wider context than Gard. Work on mapping incidents goes into the safety workstream of the International Group. So when we have targeted problems that we would like to solve, I think we could do a lot more to share data”, he said.
Another questioner asked to what extent Gard saw Asia as an area for growth in the short-to-medium term.
Thore Roppestad said that if had been asked that question a few years ago, his answer would have been “yes”. Now, however, while the answer was still “yes”, it came with a “but”.
There are very challenging political situations, with more tensions today between east and west than there have been for many years.
This makes it challenging for relatively small global operations, as we are, to handle the situation. “We see more sanctions coming from different angles, and just lately we have had not only the EU and American sanctions, but also the separate British sanctions”. Thore Roppestad said that he was a big supporter of global trade, free trade.
“I hope that these political challenges will not be too bothersome. It’s certainly a challenging global environment, but rest assured, I think Gard and other marine insurance companies will continue to build competence in Asia. We certainly have ambitions to continue to increase our footprint.”