Paolo d’ Amico: ”SIRE 2.0 is a game changer"

7 July 2023

Paolo d’Amico’s interview with Giannis Theodoropoulos (Naftika Chronika) 

In his interview with Naftika Chronika, the INTERTANKO chairman discusses the prerequisites for the decarbonisation of the shipping industry, the need to attract more seafarers and the impact of the CII regulation. Mr d’ Amico also refers to the tanker market outlook and the recent developments with regard to piracy.

As we gradually enter the post-pandemic era, what are your priorities as chairman of INTERTANKO?

As Chairman, INTERTANKO Members’ priorities are also my priorities. INTERTANKO prioritises decarbonisation, making the industry attractive for seafarers, the implementation of Russian sanctions, ESG reporting, and developing and introducing SIRE 2.0.

Regarding the current situation in Ukraine and, in particular, the imposition of sanctions on Russia, INTERTANKO is fully engaging with the G7 regulators on the oil price cap requirements to protect the interests of its members. Furthermore, to help members navigate sanctions, we have issued a series of clauses, created due diligence questionnaires, and a process template for all to use.

INTERTANKO has also led the way in developing an ESG Reporting framework for the tanker industry and is now moving into the next phase of establishing more detailed industry standards for ESG. That was achieved through INTERTANKO’s engagement with the regulators as the mandatory requirements for ESG and non-financial reporting began to take effect, especially here in Europe with the advent of the Corporate Sustainability Reporting Directive (CSRD).

Since the OCIMF’s SIRE 2.0 project began, INTERTANKO members have been engaged in its development and have provided invaluable input. Let’s be clear, SIRE 2.0 is a game changer and focuses on the human element of the tanker crew and the operator’s performance. We will also provide members with a Seafarers’ Guide to SIRE 2.0 and organise awareness sessions for members to share their experiences throughout the transition phase.

Since shipping’s decarbonisation is undoubtedly linked to technological developments, what initiatives will the Round Table promote to prepare seafarers for the industry’s next day?

Decarbonisation is a serious global challenge. Therefore, each INTERTANKO member is developing strategies to fit their trade. In general terms, INTERTANKO believes that ocean-going shipping will have limited access to low- and zero-carbon content fuels for the next 10 years or more. So, during this first period, the general strategy has been to improve ships’ efficiency through better design, increased use of energy-saving devices, and enhanced trade logistics.

New ships will be able to transition from fossil to renewable fuels when they are available on the market in sufficient quantity; training seafarers properly and exchanging information about sustainable solutions is vital in this context.

In addition, shipping companies will develop training strategies depending on the choice of future energy sources. The Round Table commonly accepts all these aspects.

In recent years, seafarers have faced significant challenges, one of which is that despite their unwavering efforts, their role has not been adequately recognised by governments worldwide. With this in mind, do you think young people will be reluctant to join the maritime profession, increasing the global shortage of seafarers?

Retention has been an issue for the industry post-pandemic, but if you look after your crew and are loyal to them, they will, in turn, reward you with their loyalty.

In the future, we must ensure we offer young seafarers a life that is fit for the role we need them to fulfil but also meets their expectations.

So, we must treat them well, respect their capabilities, pay them attractive salaries, and give them access to things expected in their home life. The internet, for example, can no longer be considered a luxury but a necessity for everyone.

Then, we need to offer them careers, not just 5-month employment periods. To understand what makes a career at sea attractive, we are asking seafarers their opinion in a wide-ranging questionnaire. Once we have those findings, we can then look to address any other issues.

Finally, we cannot ignore 50% of the population – we need to increase the number of women at sea.

Members of the international shipping community have criticised the metrics and implementation of the CII. What is your opinion? Do you think the CII will create a two-tier market? What feedback have you received from charterers so far?

Efforts were made to convince governments at the IMO that the CII rating concept would be inadequate for shipping. In any case, the CII regulation is now in place and work to minimise its challenges continues. I do not see a risk for a two-tier market because every ship faces the same rating challenges.

The CII rating does not consider that the same ship operated by the same company under different trade conditions would get different ratings that may not reflect its real inbuilt and operating efficiencies. Therefore, INTERTANKO has been urging regulators to move away from rating the ship’s “carbon intensity” and towards targeting the reduction of net GHG emissions.

Moreover, in addition to the CII as a short-term measure, the shipping industry also needs governments to scale up the availability of renewable energy to produce alternative fuels on a well-to-wake basis so that the shipping industry can achieve the IMO’s long-term GHG emission reduction targets.

We are also working on contractual issues faced by INTERTANKO members when trying to incorporate a CII clause into their charter parties. In the spirit of assisting market adoption, INTERTANKO decided not to produce its own clause and instead put its support behind the CII Clause drafted by fellow RT Association BIMCO.

Nevertheless, we believe that more clarity, awareness, and cooperation are required from Charterers – some of whom are openly critical of the sole industry clause trying to establish a framework on the newly introduced Owner-Time Charterer relationship within the context of CII regulations. Disagreement over the CII regulations should not be confused with criticism over the sole industry clause that is trying to make sense of them.

How are the EU sanctions impacting the tanker market?

Sanctions have created a need for information and documentation across several new areas. INTERTANKO has developed and delivered best practices to establish basic quality criteria for the tanker fleet, including two model charter party clauses tailored to tankers, due diligence questionnaires for use during cargo loading and STS operations, and a template for due diligence procedures to facilitate a standard approach across the industry.

We are also present at high-level EU meetings and regularly engage with representatives from HM Treasury and the European Commission (DG FISMA and DG MOVE).

We are also present at high-level EU meetings and regularly engage with ΗM Treasury and European Commission (DG FISMA and DG MOVE) representatives.

Although the Indian Ocean’s High- Risk Area designation was removed on 1 January 2023, regional conflicts, intensified military activity and heightened political tensions continue to pose a threat to commercial vessels operating in this geographic region. What measures does INTERTANKO recommend to its members to avoid the risk of armed piracy?

The High-Risk Area designation had served its purpose by warning about the extra precautions required in that region; therefore, it had to be removed. That being said, the threat to seafarers in many areas worldwide continues to exist, particularly in the Gulfs of Aden, Oman and Guinea. In addition, the spillover from the Yemen war and the tension between States in the Middle East have resulted in ships being attacked and seafarers being killed.

Using drones to attack ships in the Gulf of Oman to make a political point has to end. So, working with the military and others, we have created a guide for seafarers to help them stay safe.

Sadly, the risk of kidnapping in the Gulf of Guinea is again high. INTERTANKO and its partner organisations are working closely with Nigeria and other regional governments to address this unacceptable criminal behaviour.

Only through working collaboratively with our military and civilian partners can we ensure that the world’s trade can flow freely and seafarers can go about their routine work without threat to their lives.

How can you incentivise large shipping groups to join INTERTANKO?

INTERTANKO represents quality tanker owners and welcomes new members regardless of size. Our Members wish to lead and influence how the tanker industry's priorities take shape now and in the future.

 

This article has been reproduced with kind permisison of Gratia Publications

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