April 23, 2010

Reef Grief

The grounding of the Shen Neng 1 in the Great Barrier Reef threatened, at one point, to become the greatest environmental disaster in Australian history, but that is not the real problem. The incident will undoubtedly result in tougher regulations, perhaps compulsory pilotage around the reef and thus increased costs for ship owners, but that is par for the course.

The Shen Neng 1 is either owned or not by Cosco directly or indirectly, but that is not the real issue either, even if Cosco has had three pretty major disasters in the last four years to its credit, including the high profile Cosco Busan case. (Initial reports said Cosco were the owners of this ship too, and then Shenzhen Energy was named, with some suggesting that that itself was actually a Cosco subsidiary).

The Great Barrier Reef is a World Heritage Site, but that is not the issue either. Neither is the fact that that the world’s largest reef is bigger than the United Kingdom and extends over 344,400sq km. I can even ignore, with some difficulty, the wonderful fact that it is, as the Guardian says, “home to 30 species of whales, dolphins and porpoises; six species of sea turtles; 125 species of shark, stingray and skate; 5,000 species of mollusc; nine species of seahorse; 215 species of birds; 17 species of sea snake; 2,195 known plant species and more than 1,500 species of fish.” No wonder it is considered on par with the Galapagos Islands by conservationists. No wonder the Australian Prime Minister called the incident “an absolute outrage”. No wonder that the Master and Chief Officer of the Shen Neng 1 have been arrested, as also the officers of another ship taking a similar short cut. (The court was told the first mate of the Shen Neng had never navigated through the reef before, and due to fatigue had not reprogrammed the GPS navigation system after a course change.)

"This is the $60bn-a-year, largely foreign-owned coal industry that is making a coal highway out of the Great Barrier Reef," says Bob Brown, leader of the Australian Greens party," but that is not the real issue either. Neither is the fact that many ships seem to regularly take dangerous shortcuts as they sail with Australian coal to that country hungry for raw material, China.

I do not know what will happen to the Shen Neng 1 as I write this piece a few days after the incident; it is quite likely that its story will have run the course by the time this appears in print. It is clear, thus far, that the Captain of the bulker took a short cut through a prohibited area and was miles from where he should have been. He did not have a non-compulsory pilot on board. His first mate on watch may or may not have been sleeping when the ship ran aground near the Douglas shoal and started leaking oil. By all accounts, the salvors have done an exceptional job, pumping out oil from the vessel and working her free from the reef without little environmental damage and just four tonnes of oil spilled. (In contrast, the reported oil slick off the Orissa coast in India a couple of days ago, one that threatens the delicate ecology and the Olive Ridley Turtle there- and where an Essar owned vessel was involved, will not be cleaned as quickly, or at all).

Whatever. Those are not the real issues either.

To me, the biting issues thrown up by the Shen Neng 1- issues that should matter to the entire regulatory and commercial shipping industry- are blindingly clear. Foremost among them is the immediate need to answer this question: “In an era of officer shortages and in a future where staggering officer deficits are forecast, how do we ensure competent crews?”

In this connection, we seem ignore the fact that it takes around a decade to produce a Master or Chief Engineer from scratch. We ignore, at our peril, the real issues of fatigue and short manning that have been around for at least two and a half decades. (We will gloss over the Shen Neng’s mate’s fatigue issues too, just wait and see.) We disregard the fact that much larger ships are being built today than ever before and even larger ones are being contemplated for the future; some of those will be monstrous even by today’s standards. We ignore the fact that hitherto closed areas, many of them pristine environmental ones like the Arctic, are now opening up for commercial shipping. We only concentrate on the commercial advantage of economies of scale; we disregard the realities of operating in a future that will be even more skewed, and so we disregard the potential scale of future disasters. Those will be monstrous too.

The second big issue is of course China, or rather the international management of an emergent maritime superpower. As things stand today, much maritime regulation and oversight in China is left to local bodies and is below par. Regardless, that country will have, in the near future, large tonnage built and registered under its own flag. That tonnage will carry Chinese crews. The fact that China is a superpower that is getting stronger every year coupled with its huge demand for raw material- including coal- will mean that the international community gathered under a somewhat irrelevant United Nations (and IMO) will not be able to put the required pressure on that country to clean up its maritime act. The consequences for maritime and environmental safety of this scenario will be massive. Flags of convenience have long been criticised for similar issues; the Chinese flag is likely to be far worse. Large numbers of substandard ships, managements and crews may well be let loose on the high seas.

The final issue here is one of economics. Stricter State regulation, cleaner fuels and ballast water, tougher emission and other controls and more expensive crews (the natural outcome of any shortage, more so in an industry that works on a daily wage demand and supply paradigm) will see ship owner margins being squeezed hard. Owners will need deeper pockets to survive any cyclical downturn. There will continue to be a chasm between regulation and compliance in the maritime industry; there always has. As always, there will be pressure to cut corners, whether in areas like the Great Barrier Reef or in management boardrooms. The combination of an upward spiral of escalating costs and a downward spiral of standards of safety is a very real possibility.

In the not too distant future, there will be more accidents on bigger ships with a larger number of less than competent crews (of any nationality) - and there are higher chances of catastrophe. Except for worrying about liability and costs, shipping is doing next to zilch about addressing the real issues.