ICS Chairman comments on Arctic shipping

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Esben Poulsson, Chairman of the International Chamber of Shipping (ICS) and President, Singapore Shipping Association, gave his view on Arctic shipping at an event hosted by the Arctic Frontiers organised in Singapore this morning (Friday).
“Singapore today is one of the world’s largest maritime flag states, so its ship owners have an obvious interest in the opportunities presented by the Arctic.  The fact that Singapore is a Permanent Observer at the Arctic Council, as well as an important player at the UN International Maritime Organization – the IMO – is therefore very welcome.
The shipping industry is fully aware of its responsibilities for maintaining very highest standards of safety and environmental protection.  We fully recognise the special sensitivities surrounding Arctic shipping, but we take our responsibilities very seriously wherever in the world our ships may be operating.
Thirty years ago we typically had about 25 or 30 serious pollution incidents worldwide every year.  While our goal is to get this to zero, today we have only just one or two such incidents each year, despite a truly massive increase in the number of ships and shipping movements globally.
Despite the great remoteness of the Arctic region, and the obvious risks presented by sea-ice, the operating conditions which our ships routinely confront in the North Atlantic are frequently far worse.
There are really three main areas of opportunity in the Arctic for shipping:

  • For vessels supporting offshore energy exploration and extraction. Although at the moment, as result of lower energy prices, this has become more uncertain, and for political reasons may also be impacted by the expected shift from fossil fuels if the world begins to decarbonise in line with the Paris climate change agreement.
  • Then there is point-to-point ‘destination’ shipping – the transport of oil and gas exports, plus raw materials such as iron ore, as well as supplying the needs for expanding Arctic communities with the necessities of modern life;
  • And third – the area which gets most attention from the mainstream media – full transits between Europe and Asia, via the Northern Sea Route over the top of Russia.

But while the situation may change if the ice sheet continues to recede, the current importance of the Northern Sea Route should probably not be exaggerated.
Commercial transits are now regularly taking place in the ice-free summer months – something that was impossible even a few years ago.  And depending on the destination, voyage times between Asia and Europe can almost be cut in two.   But we are still talking about only 40 complete transits a year, and there were only 19 in 2016.  To put this in context, there were about 50,000 transits via the Suez Canal.
Moreover, the need to employ the services of very expensive Russian ice breakers, and operate with special ice class ships at slower speeds, means that the Northern Sea Route is probably only viable for ships trading to ports north of Shanghai.
This may change in the future, but the main focus of much of the industry is primarily increased destination shipping, and any possible expansion of support vessel activity servicing the offshore energy industry.
My time is short, but I will conclude with some thoughts about the regulations we need to ensure strong environmental protection.
Through the IMO, we already enjoy a comprehensive global regulatory framework that applies throughout the Arctic region.  The new Polar Code, which entered into force in January, should deliver a further level of confidence, using a risk-based approach that addresses hazards relevant to the type of ship operation, the ship’s location and the season of operation.
The MARPOL Convention for pollution prevention, which now also embraces the new IMO Polar Code, has been ratified by virtually every maritime nation and is enforced across the entire world fleet, supported by a sophisticated global system of port state inspections.  This makes non-compliance exceedingly difficult, especially in the waters of Arctic coastal states which have very robust enforcement systems. This includes Russia which belongs to both the North Atlantic and Asia Pacific port state control regimes, whose member nations in these regions share very detailed information about every individual ship, employing sophisticated and co-ordinated targeting systems.
Despite our best efforts, we must always prepare for the unfortunate possibility of accidents and pollution incidents.  The biggest challenge is how to provide suitable coverage for Search and Rescue and – if ever needed – the necessary oil pollution response capability.  This is beyond the scope of my remarks today, but I understand this is currently a high priority for the Arctic Council, with whom we co-operate through our global trade association, the International Chamber of Shipping.
In the meantime, we are pleased that the members of the Arctic Council, which are also of course members of IMO, continue to pursue their goals via the very successful regulatory framework provided by IMO, so that together we can make the full implementation of the Polar Code a continuing success.”