August 27, 2015

Mainstream Outlaws

The New York Times recently ran a bunch of articles on lawlessness on the high seas that was pretty scathing of international shipping. The series- ‘The Outlaw Ocean’- does not have to be taken too seriously, though. It is poorly researched, spews too many bromides and, in addition, extrapolates the sins of the worst players in the shipping and fishing industries to the entire maritime industry. It suggests that the disregard for the environment at sea is endemic. It lumps seamen, migrants, fishermen and stowaways together. It suffers from pieces that are too damn long, as if the strength of an argument is proportional to the number of words used to peddle it. 

The series is sensationalist at best and dead wrong at worst. From a long list of rubbish that I could quote, just a little- It tells us that murders regularly occur offshore. That egregious crime is routinely committed with impunity.  That thousands of seafarers, fishermen and migrants die under suspicious circumstances each year (this is probably accurate, given the situation in the Med today, but the fatality rates are implied as extending to seamen. That, on average, a large ship sinks every four days. That 99% of the crimes committed at sea go unprosecuted and barely noted. 

Even with the New York Times gets it right- when it talks about the flags of convenience or nobody having the inclination to enforce weak laws, it does not say anything new. I suspect that the only reason some- mainly Western- maritime associations have taken the articles seriously is because it is the NYT; I will, however, just write off the series without further ado.

A clipping from an Indian magazine, “The Week,” that Manoj Joy of ‘Sailors Helpline’ emailed me has more significance. The report, ‘Prisoners at Sea’ details how ‘recruitment sharks and a callous government continue to put the lives of Indian seafarers at risk.’ (I would have added ‘and corrupt managers’ to this).  It tells us the stories of people you will probably never hear of again. The story of Captain Shreepal Singh of the Ocean Star that disappeared four years ago, whose family has been doing the rounds of government agencies- even Rahul Gandhi- to find out what happened to him, all without effect. The older story of the ill-fated Jupiter 6 and its ten Indian sailors; the tug vanished a decade ago towing a bulk carrier to Alang. The bulk carrier was found adrift off South Africa with the tug missing; nothing is known of the fate of the crew. The families have had to spend years in courts fighting for their right to be compensated. 

From callousness, we come to criminal collusion. The Week writes about a half dozen case like Chennai’s Vasantha Raghavan’s. This is the story of thousands of Indian seamen, who, ever since the abomination of the implementation of the STCW convention twenty years ago, have been lured into shipping, taking huge loans to ‘train’ as cadets or ratings. Raghavan landed up in Malaysia to join a ship and was forced to work as a cleaner in a hotel; he was beaten up and tortured when he protested. We know that many, many others work on substandard and unsafe ships- some no better than floating coffins- ‘placed’ there by touts and officials from even Director General of Shipping approved agencies. This scandal is an open secret; the fact that nobody can get his (thankfully, few women are joining the profession) first berth without paying somebody or the other is the rule, not the exception. 

Cadets- like Nikhil Silvi and Vignesh Kumar, both mentioned in the article, who collapsed in a tank on a ship- often die on these unsafe ships without anybody in the industry or its regulators giving a damn about them, their remains, or the plight of their families.

Sorry, New York Times, but the sea is not the outlaw; it is as clean as it always was. There are no outlaws in shipping anyway, at least the part of it that is managed from India; the criminals here are firmly in the mainstream. Thanks to a government that does not care about its seamen, a regulator that is powerless to criminally prosecute even a doorman in a shipping agency and an industry that does not feel the need to clean up its act or weed out the corrupt, the criminals have taken over the system. The lunatics have taken over the asylum.

No, there are no outlaws in shipping anymore. And that is the biggest tragedy of all.


August 13, 2015

Clerks or sailors?

It is remarkable, but hardly surprising, how well informed the young seagoing officers of today are about regulatory and administrative paperwork. They know all about which forms to fill in when and which manuals should be cross-referenced with which procedures. They know all about matrices and vetting inspection administration and can reel off minute details about the latest Marpol annexures with ease. They know chapter and verse of a company’s increasingly onerous (and, usually, equally useless) administration requirements. They know all this because shipping has brought them up this way. 

The problem is that- when you combine this unholy stress on paperwork with our inability to attract youth of calibre, our insistence on shortening sea time requirements with questionable distance learning programmes and our disregard for how much paperwork contributes to fatigue and its aftermath- the problem is that these youngsters do not get- because of this- enough experience on the water that is critical to making a halfway decent officer. The problem is that they are spending too much time at a desk and too little on the main deck or the bridge. The reality is that administration- whether at sea or ashore- is the salad, not the main dish. The problem is, therefore, that the tail is wagging the dog.

This is a systematic snafu. Managers ashore push manuals and paperwork onto crews for two reasons. One, they want cheap- read free- clerks at sea to do administrative stuff (just one example, payroll) that clearly belongs ashore. Two, they want to escape responsibility and liability if anything untoward happens (We told the Master and the crew; we required them to fill up forms in triplicate. They screwed up. In any case, the Master has overriding authority- read our manuals! Therefore, error of servant, Melud! Yay, you can hang the crew, but we ashore are home free!)

It does not help the cause- the running of a merchant ship- that much of the paperwork is duplicated or unnecessary, takes too much time and is drafted by outdated ex-seamen with low general management skills. It does not help that the regulations thrust on these managers by the IMO, Flag or Port States and the like are often made by people who have no clue about life on the water. It does not help that, over the years, layer upon layer of paper has been loaded on ships without any overview as to what is actually required and what old documentation needs to be discarded. It does not help that the imperative to cover one’s backside- the default setting of many in shipping- is a big reason why we are where we are today. 

It does not help that the system is self-propagating, like a parasite in your intestine. 

You know, all these manuals and checklists are only plans, and, as the old military saying goes, no battle plan survives first contact with the enemy. Unfortunately, by overstressing manuals and checklists, we are breeding a generation of seafarers who often cannot think beyond what is written down and mandated, whose ability to think outside the box is severely compromised and whose instinct to take the initiative has been alarmingly deadened. We have spread the disease of a clerical mindset, ignoring the fact that clerks cannot be sailors. That clerks are, almost by definition, followers, not leaders. That we want our seamen to be exactly the opposite.  

We claim merchant seamen are in the second most dangerous profession in the world, but what we are doing is hobbling them and making their working lives even more unsafe. This may be an extreme analogy, but we do not ask soldiers to fill checklists during incoming fire, do we?

Keep the paper in shoreside offices where it can keep do the least damage and allow everybody to pretend they are busy; our crews have enough to do at sea already. Have a culture of thoughtful compliance- maximum in practice but with minimum paperwork. And for heaven’s sake, employ one or two data entry operators in your overstaffed offices, instead of laying a claim on your seamen’s’ time that is much better spent on more important things.

But we won’t do that. Maybe we need a piece of paper to tell us to do so. 


July 30, 2015

Insanity in the Arctic

Despite strident protests from environmentalists and dire warnings from Lloyd ’s of London, the largest insurance market in the world, Royal Dutch Shell is hell bent on resuming oil exploration in the Arctic this month. This is after the firm won approval to do so from the US Department of Interior in April under a ‘revised’ Chukchi Sea Exploration Plan that lives on the hope, and a lot of hot air, that no Deepwater Horizon like disaster will occur in the pristine environment of the frigid north. 

This approval also ignore Shell’s antics in the Arctic three years ago, defies logic, ignores the almost complete absence of emergency infrastructural support in a region that is both climatically hostile and ecologically fragile.  President Obama’s reversal of a de-facto ban on Arctic drilling is testimony to two things: the power that the oil industry wields over governments, and mankind’s blinded greed.

Meanwhile, British energy company BP said this month that it had agreed to settle US Federal and State claims of $18.7bn over the 2010 Deepwater Horizon disaster that decimated the waters of the US Gulf. A US Judge has ruled that BP was, besides being reckless, guilty of gross negligence and wilful misconduct. The cost to BP of pumping hundreds of millions of gallons of crude oil into the Gulf totals to almost fifty four billion dollars so far. It can afford this quite easily, which is a big part of the whole problem.

Back to Shell, which had stopped Arctic exploration three years ago after its rig had snapped a tow cable while rushing to get out of Alaskan waters to escape State taxes. That rig ran aground in the Gulf of Alaska and was later scrapped. To add to this mess, oil response equipment reportedly failed basic testing. 

The Deepwater Horizon spill response involved some eighty US Coast Guard vessels and aircraft. Coast Guard officials have reportedly said that they lack, in the Arctic, even the most basic information on how to respond to or to contain an oil spill under the ice. To add to the alarming scenario, their nearest base is about 500 miles away, and the Artic hosts, quite regularly, hurricane force winds, drifting icebergs and ten-metre swells. 

As to the cost of a potential catastrophe, Lloyd’s has said that cleaning up any oil spill in the Arctic, particularly in ice-covered areas, would present "multiple obstacles, which together constitute a unique and hard-to-manage risk." Could the truth be plainer?

The reality is as simple as it is frightening, and it is this: Oil companies are incapable of safely exploring for oil in the Arctic. In the event of an inevitable incident, responders will be clueless and will be severely hamstrung by the geography, climate and by logistical difficulties. The risk may not be financially mitigable. In addition, the destruction of even a small part of this pristine region will have consequences we cannot- or will not- even begin to imagine. 

And the likelihood of this happening? I am no expert, but an article in Newsweek says that petroleum engineers and environmental experts at the Bureau of Ocean Energy Management- a government agency-  have concluded that there would be a 75 per cent chance of a “major oil spill” if the Chukchi Sea oil development were to proceed. 

Think about it. A three in four chance of a disaster.

The risk is too high. Way too high. There should be a complete ban on polar oil exploration and drilling. Starting with the current Shell plans- those that former US Vice President Al Gore calls, quite correctly, insane.


July 16, 2015

Death of the shipowner

For shipping, the biggest impact of the financial crisis that began in 2008 has to be the demise of the traditional shipowner.  The biggest tragedy is that the whales the industry welcomed at the time- private equity that shipping thought would be its saviour, would fund it and refinance its loans after the banking system kind of collapsed and cheap loans were no longer available- were, in reality, sharks. That they would suck the lifeblood out of the traditional shipowners, leaving them emaciated and bringing them to their knees.

Tens of billions of dollars have been invested by private equity in global shipping since 2009.  This money – and more will come- controls shipping today. It is in command even where it collaborates with brick and mortar ship owners. In any event, it is speculative; private equity is an asset gambler and not a ship owner. It orders ships recklessly, regardless, and will sell them as soon as it makes a profit. Do not make the mistake of assuming it is a new kind of ship owner- we do not call a speculator on the stock exchange an industrialist, do we?

This shark is the reason why, even after seven years of one of the worst recessions on record, the industry still struggles- and no end is in sight- with overtonnaging issues. It is the reason why this capital-intensive industry has no clarity, amidst the volatile and wild ordering of ships that continues still, on what might lie ahead. It is the reason why this cyclical industry is struggling today to figure out what its future is. The main reason why the industry’s confidence levels, as per a Moore Stephens survey that came out this month, have fallen to the lowest rating recorded in the life of the survey that was launched in- guess what?- 2008. 

I am afraid that private equity funding is here to stay. Even though some of these speculators have lost their shirts in the last few years, there is- thanks to our penchant for printing more and more money in response to a financial crisis- still a huge amount of cash sloshing around out there.  Unallocated billions looking to be parked somewhere. Some of the private equity that is struggling today thanks to its own miscalculations about shipping- a gamble gone wrong- will go public and list on stock exchanges to distribute their losses- there are enough patsies out there. Others, part of the too-big-to-fail old boy’s club that controls governments, will either absorb these small (to them) losses or seek bailouts, if it comes to that. After all, there is good precedent for this. 

A secondary reason that private equity will remain in shipping is that few alternatives offer the chance to these funds to get in and out of an industry easily. Doing that will usually involve exit strategies, and handling plant, machinery and labour. That requires managing labour laws if you close down and exit.  These folk do not have the bandwidth, experience or expertise to do all this.

In comparison, shipping is easy.  Put in a smallish (for these funds) amount to buy a ship or ten; no questions will be asked about the provenance of the money. Hand the ship over to a third-party manager. Let that entity operate the vessel for as long as you decide it should. Sell whenever you want, relatively quickly with low hassles. No laws seem to apply for either starting or shutting down ships in this industry.  

What about the labour when we shut down, you ask?  What about labour laws- that are complicated anywhere in the world, and make exit strategies a nightmare? What about the crews on these ships? 

Don’t make me laugh. Those crews are not valued assets, despite what everybody mouths these days. They are contractual labour. Besides, those same shipmanagers will tell us how to shaft the crews. They have the required creativity and domain expertise to do so.