August 19, 2010 - U.S. export controls have minimal impact on trade in so-called "green" technology, such as wind turbines, solar panels and energy efficiency devices, according to a 37-page report released Wednesday by the Commerce Department's Office of Technology Evaluation.

The report, Critical Technology Assessment: Impact of U.S. Export Controls on Green Technology Items, found that most of these technologies do not require an export license from the Bureau of Industry and Security (BIS).

Licensed green technology-related exports represented 0.05 percent of total U.S. exports and 0.004 percent of all energy sector exports in 2008. Of the $1.3 billion in total U.S. exports in 2008, BIS identified 5.8 percent ($75 billion) as green technology-related exports, and only 0.9 percent ($697.4 million) of these required an export license.

In the report, the agency specifically reviewed green energy projects receiving grant money from the 2009 American Recovery and Reinvestment Act and loans from the Energy Department's Loan Guarantee Program, established in the 2005 Energy Policy Act. It also surveyed industry members of BIS's Technical Advisory Committees and information from companies that develop green technologies.

Some of the "dual-use" components, or items with both commercial and military applications, used in wind turbines, solar panels, alternative fuel vehicles, water purification systems and energy efficiency devices may require export licenses.

The report found, for example, that makers of carbon fiber and machine tools used to make wind turbine blades complain about the lengthy process to obtain BIS export licenses for shipping their products to customers overseas.

"Two companies with production facilities in the United States that are industry leaders for tape laying and tow/fiber placement machines used to manufacture windmill turbine blades are considering moving production of these machines overseas, especially because of the increased demand for wind turbines," the Office of Technology Evaluation report warned.

Exports of metal-organic chemical vapor deposition equipment require export licenses in most cases and are used to produce solar cells and LED lighting products. A U.S. producer has watched international sales of its technology go to overseas competitors due to the export licensing delays, the report noted.

In response to the report's findings, BIS said it will issue exporter guidance clarifying which tape laying and tow/fiber placement machines would be controlled for national security purposes, and monitor the volume of export license application received for chemicals, chemical equipment, industrial gas turbines and components, and thermal imaging cameras and adjust its export licensing policy and regulations where possible.

The agency plans to develop a green technology working group to identify emerging technologies that can support green technology initiatives that may be subject to an export license requirement in the future, and work with the Commerce Department's International Trade Administration on harmonizing export promotion efforts in the energy sector.

In addition, BIS said it would work with other federal agencies to develop "a license exception, fast-track license review, and/or a one-time product/end-user review procedure for the export of items for civilian (i.e. non-military) green-related end-uses only."

 

Mumbai collision a warning to shippers       

  

Make sure you have the right insurance policy, warns lobby group   

 

August 24, 2010 - The vessel collision off the coast of Mumbai has served as a warning to shippers to make sure they have the right insurance policy, according to online shipper forum Shippers' Voice. 

The collision between the 2,100teu MSC Chitra and cargo ship Khalija 3, which resulted in hundreds of containers falling into the sea and closing the Indian ports of Mumbai and Nhava Sheva for several days, will result in insurance claims for various losses. 

But many of the shippers making claims are bound to find they won't be compensated because they have the wrong sort of cover, claims the site. 

Shippers' Voice said: "Many shippers will find that they either do not have insurance cover, or that which they have has, hidden within the small print, exclusion clauses that limit or nullify their claim. 

"Some will be surprised at just how little they can claim, despite the value of the consignment. And those expecting compensation for the indirect costs of delayed or lost cargo will be greatly disappointed and frustrated. 

"There may also be wrangling between the salvers and those to whom the cargo originally belonged - the salvers will expect recompense for their work from someone." 

There may also be disputes over which party is to blame for containers slipping from the vessel.
Shippers' Voice added: "This serves as a warning to all shippers. 

"Although such incidents are rare, unless you are well prepared, have taken appropriate measures to protect your interests and have contingency plans to protect the indirect costs on your supply chains and those of your customers, you could be a huge loser if unlucky enough to be caught up in such an incident."

 

 

New EU rules on social security contributions could hit shipping companies      

   

 

August 20, 2010 - Leading accountant and shipping industry adviser Moore Stephens has warned that companies operating EU-flag vessels will need to be aware of new regulations from Brussels governing the payment of social security contributions which came into effect on 1 May this year.

 

Prior to the inception of the new rules, mariners were taxed under EC regulations in the vessel's flag state, subject to certain exceptions. The position remains substantially the same under the new rules, with social security contributions for seafarers being paid in the member state in which the vessel upon which they are employed is flagged.

 

But Moore Stephens partner Steve Durman points out, "The exceptions to this rule have been greatly simplified under the new regulations, with the result that the only exception now will involve contributions in respect of seafarers who are remunerated by an 'undertaking' in a member state where they reside, in which case the legislation of the member state of residence will apply.

"So, for example, seafarers resident in the UK working on German-flag vessels but paid by a UK-resident agent of the shipping company will be subject to UK national insurance and their agent will be treated as their employer for national insurance purposes. Given the disparity between levels of social security contributions throughout the EU, the industry will need to be alert to the financial implications for their employment strategies under the new rules."

 

EPA Takes Action on HBCD and Benzidine      

    

 

August 19, 2010 - EPA today released action plans on benzidine dyes, hexabromocyclododecane (HBCD), as well as nonpylphenol (NP) and nonylphenol ethoxylates (NPEs), outlining proposed restrictions on the chemicals under the Toxic Substances Control Act (TSCA). EPA says it will add HBCD, NP, and NPE to its Chemicals of Concern list, issue "significant" new use rules for those three chemicals, and, for HBCD and benzidine dyes, impose new reporting requirements on EPA's Toxic Release Inventory and potentially ban or limit the manufacture or use of the chemicals.

Benzidine dyes are used in the production of consumer textiles, paints, printing inks, paper, and pharmaceuticals. HBCD is used as a flame retardant in expanded polystyrene foam in the building and construction industry, as well as in some consumer products. EPA says that HBCD has been shown to be persistent and bioaccumulative in the environment and may pose potential reproductive, developmental, and neurological effects in people. NP/NPEs are used in industrial applications and consumer products, including detergents and food packaging.

The chemical industry took particular issue with the action plant on HBCD, arguing that research has supported its claims that the fire retardant does not pose a health risk. "We want the public to have confidence in the strength of our regulatory system and in the products used in commerce," says Mike Walls, ACC v.p./regulatory and technical affairs. "At the same time, we remain concerned that the EPA chemical action plan process does not include a transparent science-based approach to chemical assessment and chemical management."

 

Mexican ports increased movement 33%      

    

 

August 23, 2010 - Mexico ports moved during the period covered from January to July this year, 2'029,841 TEUs, representing an increase of 33.3% over the same period of 2009, when mobilized 1'552,456 containers.

According to the information provided by the General Coordination of Ports and Merchant Marine (CGPyMM) of Mexico, containers mobilized in July 2010 exceed the movement recorded during the same period in 2008, when the ports of the country moved 1'857,139 units.

The busiest port was Manzanillo, located in the Pacific, with a total of 816,074 TEUs, or 40.7% over the previous year, followed by Lazaro Cardenas port which moved from January to July 427,226 containers, 38% more than in 2009, on the coast of the Gulf of Mexico, Veracruz is ranked in first place with 337,339 containers, 21% more than last year and Altamira, 276,038 TEUs, or 28.9% more than in 2009.

In all the Mexican port system handled from January to July 156'028,180 tons of cargo, which is 12.7% higher than that transferred during the same period in 2009.

Movement of petroleum and petroleum products accounted for 50.3% of total cargo, while mineral bulks reached 37'094,585 tons, corresponding to 23.8% of total, and agricultural scored 6'707,360 tons, representing 4.3%.

In the management of general containerized cargo were obtained a total of 16'616,121 tons, which represents 10.6% of the national total, while general loose cargo participated with 6.9% of national total with 10'729,896 tons.

Management of different fluids handled 6'378,427 tons of oil, which reached a share of 4.1% of total cargo moved by ports.

 

 

Get ready for the Rotterdam Rules        

  

Dealing with liability, they are expected to be ratified soon and have a far-reaching impact on maritime commerce  

 

August 25, 2010 - AFTER having read some 5,000 words on the Rotterdam Rules on carrier liability, I have quite a headache. That, I hasten to add, is no reflection on the writing skills of the article's author, Craig Neame, a partner in London-based law firm Holman Fenwick Willan (HFW).

The problem is that the Rules - which have taken years to put together and are now awaiting ratification by individual states - cover an incredibly complex subject. Mr Neame says they will have a far-reaching impact across the whole of maritime commerce.

The article, which appeared in both the July issue of Britannia News and HFW's Shipping and Logistics, says that 'there will barely be an untouched area'.

It warns that owners need to keep a close eye on who is signing and ratifying. If the US ratifies, the UK follows and China shows a renewed enthusiasm, there is a very good chance the Rules will achieve widespread adoption. Owners who are ahead of the game will probably steal a competitive advantage, while avoiding the extra costs that last- minute solutions always bring.

Global solution
The International Chamber of Shipping (ICS) - which supports the ratification of the Rules as providing a modern legal framework for liability - also sees US ratification as key. ICS legal expert Kiran Khosla told BT the crucial point is that the Rules will provide a global solution and avoid a patchwork of competing regulations. The shipowners' body came to this position with several reservations as the Rules can be seen as increasing carriers' liabilities.

Mr Neame in his article notes the opposing views on the Rules with supporters arguing that, by replacing the current 'patchwork' of maritime and unimodal conventions for road/rail/inland water transport, the unnecessary costs that inevitably arise out of legal complexity will be eliminated. Many also think that, if the provisions in the Rules seeking to promote electronic bills of lading are successful, further cost reductions will be achieved.

On the other hand, those opposed to the Rules say they are poorly drafted, ill-conceived and too ambitious.

The article does not take a position on which view is right and which is wrong, but looks at potential 'real world' impacts that the Rules will have on shipowners if they come into force.

The Rules can no longer be changed, which means that they must either be adopted 'as is' or rejected in full. According to Mr Neame, the Rules present both 'strategic threats and opportunities' and it is essential that owners start planning for their possible introduction soon.

The Rules, he says, will require owners to undertake a review of all their contractual arrangements and operating procedures to ensure compliance. Where necessary, commercial, operational, insurance and legal staff will have to be given extensive training. The Rules will also have an impact on day-to-day cargo claims handling by shipowners and P&I Clubs.

Mr Neame goes into considerable detail on the implications of the Rules coming into force. I will not even try to summarise it. His article can be found on the HFW website.

 
One thing I did notice was that the strange and, uniquely nautical, legal concept of general average could become just something for the history books. Apparently, while the Rules expressly state that they are not seeking to regulate or change general average, in reality they will. Mr Neame explains that general average payments are due only to shipowners from cargo interests when there has been no breach of the contract of carriage.

General average
Under the new Rules, unlike the Hague and Hague-Visby Rules, an error of navigation or management of a ship does not constitute a breach of contract, provided due diligence to make the vessel seaworthy has been exercised. In the Rotterdam Rules, if a casualty causing cargo damage arises because of negligence of the master or crew, no general average contributions will be payable. So the occasions when general average can be declared are likely to be greatly reduced.

The cynics among us will not be surprised by one of Mr Neame's predictions. He says: 'There is no doubt, however, that there will be a period of increased claims activity and litigation as the courts seek to clarify the effect of the Rules in the real world. In the short term, the overall effect will probably be to increase legal expenditure on cargo claims and waste management time.'

So will the Rules really come into force? When I spoke to Ms Khosla of the ICS earlier this week, she said it now seemed quite likely that the US would ratify the Rules. Once this happens, it is probable that other major countries will do the same.

So anybody involved in container shipping at any senior level needs to read up on just what the Rules could mean for their business. There could be a lot of people suffering from headaches, real and metaphorical, in shipping offices around the world when they try to get to grips with the intricacies of the Rotterdam Rules.