July 26, 2012

Shipping's last-straw threat


Forget China. The unchecked, repetitious reckless and malicious behaviour of Western countries remain the bigger threat to peace and economic growth - and trade-in South Asia and the Middle East. 

The Iran oil embargo is going the Iraq way. The aim of the game, as in Iraq, is to give the dog a bad name and starve him. Therefore sanctions, same as in Iraq. If, as a result of the isolation, half a million children under five die because of malnutrition or lack of medicines (567,000 died as a direct result of sanctions against Iraq, according to UN figures; a price US Secretary of State Madeline Albright said on TV was 'worth it') then it is just tough bananas again. 

Because of US led sanctions, Iranian crude output has fallen to a 22 year low; it was pumping 4.1 million barrels a day in January 2008, it now pumps only 3.2 million. Iran is losing $3 billion in lost revenue every month; 60% of its shipping company NITC's tankers are being used for storage of oil that has nowhere to go. 

And who in the world is covering this shortfall? US ally Saudi Arabia, Russia and- guess what- Iraq, with plundering Western companies and US lackeys in the government laughing all the way to the bank. Incidentally, the US announced recently that all American assets belonging to NITC would be frozen. Iraq redux.

True, about 20 countries have been 'granted' waivers by the self-appointed policemen of the world; they can import Iranian oil 'at lower levels'. Indian and Japanese governments will underwrite their vessels because the western dominated insurance market is closed to them, thanks to the sanctions, effectively stopping their ships unless alternate insurance is arranged (see ''Marine Insurance or economic warfare?' published May 3 here). Nonetheless, the impact on energy starved India of a continuing choke of Iranian oil will be extremely severe. 

Oil industry experts are now saying that Iranian crude output is headed even lower to roughly half its 2011 numbers, and will plunge to a record 1.3 million barrels a day this month. The tanker trade is not doing much better internationally, as we know, with owners struggling to break even. Should there be a further decline in demand- or a further decline in oil prices that have started rising again- the tanker segment of the industry might find that it is well and truly on the mat. Parts of it geared to carry Iranian oil already are.

Overall, shipping is not complaining so far; the oil embargo has forced most countries to seek new markets, caused a major shift in demand and disrupted fuel supplies in some countries. Additionally, it is not a bad thing for shipping that NITC's tankers are effectively grounded, Iranian front companies notwithstanding, as the sanctions have taken out the Iranian fleet from a market that simply has too many ships floating around for its own good.

The threats to shipping from planned western hegemony over the region-that nobody seems willing or able to check-cannot be overstated. US and European sabre rattling has usually led to a major military conflict here, as it did in Iraq. Shipping today can ill afford the dying of trade, escalated war risk premiums, threats to its assets and other upheaval that another war in the region is guaranteed to unleash.

Even a low intensity conflict is enough to choke an industry already gasping for breath. Iranian response to the sanctions so far has mainly been twofold: One, it is talking in Istanbul on nuclear issues with the 'P5+1' - Britain, China, France, Russia, the United States and Germany- with much grandstanding shown at the pulpit there by all concerned. Iran has, elsewhere but simultaneously, repeatedly threatened to close down the Straits of Hormuz, arguably the most critical chokepoint for shipping in the world, given that forty percent of the world's seaborne oil passes through it- and a fifth of all oil- 17 million barrels everyday in 2011.  

The US and Iran have clashed before- in 2008- in and around Hormuz. They are on track to do so again. If that happens and escalates, the resultant chaos that will hit shipping will make the present economic upheaval look like a Sunday school picnic. Chances of an all out Iran-US war may be low now, but chances of a skirmish are not. Keep an eye out.

As the camel said before the concluding piece of straw was strapped onto his back, things are bad enough as it is. 

(You may also be interested in Marine insurance or economic warfare?)

July 19, 2012

The hawk and the minnow

graphic- Telegraph, India.

There is something simple in the thought that India can counter China's 'string of pearls' strategy by ratcheting up military spending or expanding Indian military presence in the region. India's simultaneous strategy of building alliances with countries as far away as Vietnam and Japan- its own string of pearls, if you will, to encircle China- are likely to be a little more successful. But just a little, because India is operating from a position of immense weakness- that it continues to ignore at its own peril.

The soon to be commissioned Indian Naval Air Station NAS Baaz (the word means 'Hawk') at Campbell Bay near the Nicobar Islands- which will superintend the six degree channel close to Indonesia- seems like an excellent idea on the face of it; after all, anything from a quarter to forty percent of the world's trade (50,000 ships) passes through here every year before entering the Malacca Straits, as does, more importantly, eighty percent of Chinese oil.  Campbell Bay is to become India's easternmost forward operating base; military aircraft and ships will spy on the Malacca and Sunda Straits from here; experts also seem to think, somewhat simple mindedly, that India will be able to threaten to choke the Malacca Straits after Baaz is up and flying.

It is equally naive to think that Baaz will be able to contain the sixty percent of naval assets that the US wants to deploy in the Asia Pacific as part of its new 'rebalancing' strategy for the region- something India, with its non-alignment bent- is understandably wary about.

Some Indian weaknesses are apparent and do not need elaboration- economic and military disadvantages, for example. India will not be able to trade blows with China on these two fronts. The Chinese string of pearls- the projection of Chinese geopolitical, military and diplomatic power through the Malacca Straits right up to the Persian Gulf- operates from a position of strength. Countering this effectively- even with tacit American backing- will require more than just dreaming, or a Baaz or two. 

Other Indian weaknesses are not so apparent- well, they are, actually, but it is assumed that they either will be sorted out or are peripheral. Trust me, they are not peripheral at all; they are absolutely central to our ability to project power in the waters around us.

Corruption, for example. It is laughably asinine that a country whose coastline remains porous almost four years after the Mumbai terror attacks- even Somali pirates have been 'found' on the mainland not so long ago, having swum there- can project its naval or military power thousands of miles away from its shores with any confidence. Corruption's close cousins- ineptitude, unaccountability, nepotism and lethargy- will continue to ensure the failure of both policy and execution in future. The fact that corruption- endemic in Indian politics, industry and bureaucracy- has spread alarmingly into the military establishment is well known by now. At least I have little confidence that this has not castrated the country's ability to defend itself- or to project its military power (I was aghast when I heard a former Army Chief say, reacting to a question on corruption in the armed forces, 'But we are not as bad as Pakistan!' Is that our benchmark now?)

In addition, in connection with the NAS Baaz, one question is this: In a country riddled with corruption, are such military decisions taken keeping the national interests of a billion Indians in mind, or are they taken for the personal interests of a dirty dozen or two? What is the quality of these decisions?

India- already being referred to as the first "Fallen Angel" of the BRIC countries-has other huge weaknesses that make it unsuitable, to put it mildly, to aspire to be a regional satrap. Rising disparity and destitution (there is something odd in the statistic that says that more people have been 'lifted' from poverty but destitution has increased) have created a schism in society- the Naxalite 'Red Corridor' is the prime example of this. The country's resources are on fire sale; everybody- politician, industrialist, intermediary, and bureaucrat- wants a piece of the action. Critical institutions hollowed out by corruption and mismanagement, administrative paralysis, public and private sector corruption are today, when combined with a young population, a dry tinderbox waiting for a spark. All the ingredients are already in place. Major civil unrest is simply a matter of time.

What does this have to do with China or Baaz, I hear you asking. I could somewhat cynically reply that a country that cannot control Dal Lake in Srinagar has no business trying to control the Indian Ocean, but that would miss the bigger point, which is this:

Conflicts between large nations rarely end up in military face offs these days- and they have not for a long time, because the stakes are too high in a nuclear world. Powerful countries usually attain their geopolitical objectives (or personal loot objectives, as in Iraq) in other, insidious ways. Lies. Subterfuge. Proxy wars. Spreading influence. Strengthening economic ties. Bribing. Plundering natural resources after bribing. Spreading discontent within disaffected populations in target countries.

We are no stranger to these ways; our enemies have succeeded too often here. We have played the game ourselves- in Bangladesh and Sri Lanka for example, and are playing it in Eastern Africa today. The Indo-Chinese game will see all these tactics again, especially since the Chinese are allied with Pakistan and its 'death by a thousand cuts' strategy targeted at India. The problem for India is that its social schisms, born out of rising disparity on one hand and destitution of many of its citizens on the other, are weakening it at the very point where the enemy will logically attack.

So, expect more unrest in the Northeast, in the Red Corridor and elsewhere. And, while it is true that China suffers some of the same problems as we do- corruption and internal unrest, for example- it nevertheless pursues its geopolitical interests with single-mindedness, strength, integrity of purpose and continuity. India does not.

So, there will likely be no India-China face off in the Malacca Straits or anywhere else. That is not the way today, and we are too weak. I believe that we will only get strong if we address the tumultuous issues at home first.

We won't become stronger with NAS Baaz. Not while that hawk is crippled with a broken wing. We cannot be sharks in the Bay of Bengal and minnows at home; that does not compute, because minnows are only good as bait.


July 12, 2012

At sea, the dreaded C-word

Almost all seamen above a certain ago who are reading this carry a cancerous time bomb in their lungs- the ingredients of a disease that, if it explodes, will kill them quickly, in a year or two. Mesothelioma is an incurable cancer. Many of you-and I- may have also brought its chief ingredient home, clinging to our clothing and our suitcases. We may have unwittingly exposed our families to painful death.  The ingredient-asbestos- has been present in large quantities on almost all the ships we have worked on. Not that a large amount is required to kill you; a few fibres and minute particles will do that just as efficiently.

The young are not immune to it either, because asbestos- banned in fifty odd countries- is freely used in many others even today, including in India and China, the world's biggest shipbuilder. Despite amendments to SOLAS- that came into effect last year- banning its use in shipbuilding. Despite WHO's guidelines. Despite recommendations from medical experts across the world. Despite nobody disputing that exposure to asbestos can cause Mesothelioma. Despite the ILO saying that 100,000 die each year due to asbestos related diseases, 125 million people are exposed to it at the workplace today. 

Asbestos- once considered miracle material because it was hard, could be used anywhere and did not burn- was found on most ships built up to the 60's. Used extensively in paints, insulation sheets, boilers and firewalls, a ship's closed atmosphere- accommodation or engine room- meant that asbestos particles released into the internal atmosphere remained in circulation, in the air and on the surfaces around. "One US study of merchant marine seamen found that 17 percent of the men studied displayed bodily abnormalities consistent with asbestos exposure and related diseases," says a US report. That is, one in six seamen displayed symptoms of asbestos related mayhem. 

Look at the other numbers that have come out of the US, where,  according to the Florida based Mesothelioma centre, " almost one third of merchant marine seaman who passed away during World War II as a result of their occupation were not killed overseas by enemy fire or any other act of war. More than 100,000 thousand dedicated merchant mariners died many years later from illnesses like mesothelioma and lung cancer caused by exposure to asbestos." 

Anybody care to put a number to how many have seamen have died or suffered since then?

The IMO's 2009 Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (that will come into force in 2015, if my memory is not shot completely) states, “An appendix to the Convention will provide a list of hazardous materials the installation or use of which is prohibited or restricted in shipyards, ship repair yards, and ships of Parties to the Convention. Ships will be required to have an initial survey to verify the inventory of hazardous materials, additional surveys during the life of the ship, and a final survey prior to recycling.” 

But this inventory, dubbed the Green Passport, and the 'Asbestos Free' certificate issued in connection, is often undermined by commercial interests. Listen to what Nick Bennett had to say in Lloyd's list in 2010- “Having spent the last eight years undertaking hazardous materials assessments on a range of vessels throughout Australasia, I can attest that I do not believe I have ever found a vessel of any type or age, including at least one new building, which does not contain some amount of asbestos-contaminated material in its plant or structure.”  

Mr Bennett adds that companies offer asbestos-free certificates “who simply do not have the expertise or necessary independence to make such attestations for which the end user should be reliant". It is precisely because the ban on asbestos is being regularly subverted that we have seen Australia and the EU take other measures to try to ban 'asbestosised' ships from entering their ports. I wish the Indian authorities would do the same especially at Alang, whose workers- many living in shanties inside dirty and dusty scrap yards, are horrendously exposed to asbestos and therefore Mesothelioma. Just like seamen.

In 2006, the Indian Supreme Court found that 16 percent of ships chopped up at Alang had asbestos traces. An Alang based safety officer and union official said at the time, "I can't say we haven't had (tuberculosis) or deaths, just not an epidemic." And, "Whether workers survive or die in their village, no one knows."  The ongoing fracas with the ex Exxon Valdez coming to the Alang graveyard is about asbestos too, in addition to mercury, arsenic and all the other goodies they bring us. 

Meanwhile, are you a seaman? Do you suffer from abdominal pain, fatigue, hoarseness, and weight loss? Do you think you have handled asbestos material on ships or inhaled any miniscule fibrous particles? Any loved ones displaying similar symptoms, or spitting up blood, or are jaundiced or have blood clots? Have fibres attached themselves to tissues around vital organs, causing inflammation? These are typical symptoms of mesothelioma; the onset of which almost invariably means death in less than two years.

It may be too late for those of us already exposed to asbestos: only time will tell. I know I have handled asbestos on many ships when I was younger, in the accommodation and engine room both. I know I have inhaled it for much of my working life; I just don't know for how long or how much.

That is because seamen do not know, usually, whether the ships they work on are asbestos free or not. They do not know for sure if the paints they use are clean, or that a ship is not picking up asbestos in one form or another during its voyage- in cargo, stores or whatever. They can only hope that some of the newer ships they work on were asbestos free at least when they were built. Hope, not trust.

It is shocking that, decades after the dangers of asbestos first became known, seamen continue to be knowingly exposed to a substance that causes incurable cancer, by an industry that has abrogated its primary responsibility to provide safe working conditions for them.

Not so shocking, actually, if you see what else goes on out there.

July 05, 2012

Burying the ass in the well

Every year, the first working day of July- today, as it turns out- is when the second batch of the six-month GP Ratings Pre-Sea course commences for the year across India. Unfortunately, the run up to the last two batches- including the present one, where the story still has to play out- has been anything but smooth. The acrimony, confusion and finger pointing between the regulators on one hand- the Directorate General of Shipping and its authorised body, the Board of Examinations for Seafarers Trust (BES) - and maritime training institutes on the other seems to be increasing, the largest bone of contention being a shortfall- through a BES controlled All India Common Entrance Test (CET) - in intake. The situation is complicated by the fact that the MET institutes cannot afford to antagonise the DGS beyond a point, subject as they are to the approval and audit regime of the regulator.  This didn't stop some of them from going to court last time, though.

The smaller problem is that everybody- including seemingly secondary players like managers and shipowners- is right, in their narrow-minded way; one has sadly come to expect such self-centred killing of the golden egg laying goose as a given in the industry. The bigger problem is that everything everybody- without exception- is doing is guaranteed, unless things are changed quickly, to destroy the seafaring profession. Because they are looking at numbers instead of quality of graduates- the only thing that will make Indians preferred employees with shipowners. Because they are looking at short-term profit instead of sustainable growth.  Because corruption and middlemen have taken over the game.

The last DG, Mr Agnihotri, made no secret about his opinion- valid, in my view- that too many in the MET establishment were profiteering instead of making a profit. The MET establishment- somewhat understandably- says that the infrastructure and faculty conditions of the DGS are such that costs are high. The first CET  last year (a series of CETs, actually) did not produce enough numbers to fill all the DGS approved seats across the country; this resulted in great confusion around the new year, with some institutes going to court and, based on the ruling (later reversed), taking in trainees all on their own. The DGS came down on this practice later. In any case, many institutes blamed the BES for the poor calibre of entrants- including some CET failures who were allowed to join. They also claimed- somewhat disingenuously, considering that touts were feeding the institutes, which they still do, through the CET apparatus- that they were able to get much better calibre of students earlier, and much higher numbers too. Other abrasive issues included high fees being charged by some institutes, which the BES claimed make them automatically less preferred. Some institutes said that a CET was not necessary, given that the BES was already controlling standards through the Exit Examination - written, practical and oral- being conducted by them for every graduating batch.

Of course, the elephant in the room was always the 'placement' issue- the organisation of the first on-board berth for graduates- which brings us to the story of the present batch. At the time of writing this, indications are that many institutes are up in arms because many of their seats remain unfilled after the CET. Indications are - though I can hardly be sure- that CET failures will not be accommodated this time around, and the last batch resultant 'management quota' is not an option, given court rulings and the hesitance from MET setups to go against the DGS wishes.

The placement issue is an old story; the twist today is that the regulatory and commercial arms of the industry are openly acknowledging what everybody has known for years- that graduates, even toppers from the Exit Examinations, are simply not finding any jobs without paying people sitting in shipowners' or shipmanagers' offices. These include more than a few Master Mariners, by the way, who seem to have graduated to becoming professional touts today. The bogey of 'agents' or middlemen that many of us raise is a red herring, therefore; after all, those agents are bribing people in those offices to give graduates a job.

While Indian shipowners refuse to fulfil their statutory responsibility (in some cases), training institutes are being held responsible for the no-job scenario. On the street, nobody is talking about raising standards of Indian seafarers or excellence at the MET level; training institutes just want to fill up their seats. Nobody is talking anymore about raising Indian seafarer market share to 9 percent- a figure some clueless management consultancy outfit threw at the shipping establishment a couple of years ago, and which was quickly digested without a single thing being done to make it happen. Instead, the commercial industry and the regulators are both clamouring for a reduction in intake- even zero intake, some of them are saying.

I have a sneaking suspicion that the shortfall in the present batch of GP Ratings is a managed affair. Somebody may have decided, in the corridors of power, that it is better to have some MET institutes shut down instead of producing people who do not get jobs. Unfortunately, this is the wrong end of the stick. It is also a vicious circle that will result in a further downward spiral in standards- squeezing the training establishment may well result in a fee war that will eventually guarantee this, as institutes bleed, some of them to death.

Right now everybody is covering their behinds. The blame game is on; everybody is protecting their own interests. Everybody is behaving like the farmer whose donkey fell in the well and who decided that it wasn't worthwhile getting the ass out since he was old and useless, and so decided to bury him there instead- alive. That is what the industry is doing to the profession, make no mistake.

Anyway, if I can complete the parable about the donkey. The farmer, having made the decision to bury the guy, grabbed a shovel and began to throw dirt onto the donkey in the well. After howling for sometime, the donkey became quiet, desperately thinking about survival. What he then started doing was simple- he would shake off each shovel of dirt and- as it built up in the well- take a step up. The farmer, shovelling away, was amazed when the donkey, having reached the edge of the well, happily trotted off.

The simple minded will say that there is a moral to this- when life shovels dirt on you, shake it off and take a step up- never ever give up. I am sure the preachers- of which they are many in our fraternity- will advertise this course of action as the best in our present predicament. They will point to the donkey for inspiration without doing anything else.

Actually, I like a different ending to the story. In that parable, the donkey, after trotting away from the well, becomes very angry at the farmer's betrayal. Enraged, he runs back and bites the farmer- no prizes for guessing where. The bite gets infected and the farmer dies of sepsis.

Moral of the alternative story? When you do something stupid, and then try to cover your ass, it always comes back to bite you.


July 03, 2012

FUBAR's parable, revisited

As I contemplate writing a piece on the present state of affairs in the "new sheep-to-the-old-slaughter" category, I am reminded of another piece I wrote a year and a half ago. Here it is, again, with my usual apologies:

FUBAR's parable