Marino World January-February 2016 Edition

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VOLUME XI NO. 1 ISSN 1908-0972

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JANUARY - FEBRUARY 2016

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Embark on a lifelong career.

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We know that a good crew is what makes a voyage successful. Because of this we are enthusiastic about hiring and retaining the best crew and supporting their development throughout their career.

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Cover Story

PH TO SHIPMANAGEMENT Education MANESE ALERTS SCHOOLS

Feature SAYS AMBASSADOR MASSIMO ROSCIGNO

EMSA, NO MORE Governance

DUTERTE MARITIME PLATFORM Training

6 10 13 16 27

IGF CODE NEXT

Content

ABOUT THE COVER Layout by: Jhon Henson Ong

A paradigm shift: a foreigner sensing Philippine upward transition rather than the usual Filipino worship on anything foreign. We are solid

on manning, increasing onboard leadership as observed even by BIMCO. Going great, Maritime Philippines!

EDITORIAL BOARD Publisher

Editorial Consultant

Lyn Bacani

Creative Director

B. Cortes Lagac

Content Critique

Commo. Dante Jimenez

Eva Tan

Jhon Henson Ong

Legal Counsel

Atty. Manuel Obedoza Jr.

News and Feature Writers Coca H. Strobar

Ligaya Caban

Contributors

Ms. Merle San Pedro RAdm. Adonis Donato Atty. Cristina Beltran

International Contributors

F R Chowdhury

Mark Millar

Account Executive Karen Mainar

Richard Teo

Circulation Assistant Joana Marie Tud

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Publisher’s Note

OPPORTUNITIES AMIDST CRISIS The world continues to reel in financial crisis. China’s economy leads the downturn, with India sagging by the side. Falling oil prices hit hard on the Middle East; by extension, hitting further on Filipino overseas workers. Offshore drillings and explorations appear to be a bright prospect. But these, again, are in doldrums.

Biting the bullets are container and bulk ships. These giants are on lay-up by the hundred, the lucky ones used as floating storage for lack of cargo. Some are sold at bargain prices, the older ones sent to the cutters prematurely to recover pennies from usual competitive values.

Banks and funding institutions scrutinize borrowers with scalpel trim; thus, new orders are cancelled or postponed --- the ghosts haunting shipyards to bankruptcy, even matinee names in global shipping.

Things are bad, yes. But an opportunity for zip for those with less baggage like the Philippines. As said, things are not half-empty but half-filled.

First, in manning. Shipowners shop the world for the best at least cost. This is where Filipino seafarers come in

critically. They are competent, dedicated and resilient to vagaries of the economy.

They have proven great in the makeovers of matured economy searching for best value for their money (read, Norway and other major shipping nations).

Second, in shipmanagement. The country could be a shipmanagement hub, cost-competitive and dynamic in talent and tract. When cents are counted to survive, the Philippines is a beacon of saving grace (no pun intended).

Third, in shipbuilding. And repairs, that may stimulate allied business like parts manufacturing, skills upgrade all the way to steel industry development mandatory for any economy to be world-class.

Currently, we can increase the areas for ship lay-ups. From here, we can transition to collateral services like renovation, retrofitting and naval architecture. Chandling could come up easy, so is decommissioning, junk and salvaged parts recycling.

We just need to summon our creative spirit, show our smarts in business (fueled by passion we display in partisan politics). We must have faith in ourselves

and not pawn our future to outsiders who, naturally, should prioritize their own interest.

Be warned, other nations are gearing up to covet what we pride ourselves with. Nigeria leads Africa in developing maritime potentials. It funds scholars to study all over to be front liners.

We are hosting Nigerians in maritime education and training. Vietnam and Myanmar are spending big budget on their maritime schools and facilities. We trained Vietnam and Thailand in rice productivity. Hopefully, we do not repeat history in that we ended up importing rice from these nations we tutored.

In People Power, we surprised the world of our democratic nobility. In stormy times, let us charter to greater horizons as testimonial to our inbred seafaring soul. Be not afraid, damn those torpedoes as we have written earlier.

After all, when God close the door, He open windows.

And the smaller you are, the faster to connect.

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cover story

ClassNK Koichi Fujiwara

PH TO SHIPMANAGEMENT

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visiting Japanese senior executive has expressed what many Filipino maritime stakeholders are secretly obsessed with: the transition to management, from manning.

Millar

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This seems to be a part of a trilogy of forecasts. First, the call of then-IMO SecGen Koji Sekimizu on thousands of officers up to the 2030’s needed (in fact, demanded) by global fleets. Second, is the trend noted by the Baltic and

International Maritime Council (BIMCO) that the Philippines is slowly migrating to a majority of onboard officers.

And now, Mr. Koichi Fujiwara, EVP and Chief Certification Officer of

ClassNK Manila GM Kobayashi

Nippon Kaiji Kyokai, heralds what appears to be the third visioning: “We are now paving the road for the future, the Philippine maritime industry maybe moving to shipmanagement… Maybe, it is the future of the Philippines shipping industry.”

Mr. Fujiwara issued the statement in the context of the professional offerings of ClassNK, in an exclusive interview with Marino World right after the firm’s 5th Prime Management Seminar 2016 (on MLC 2006, PSC, ISO) last February 16th at the Diamond Hotel in Metro Manila.

The in-house seminar started in 2012.

Cost plus.

Singapore is now the center of the shipping industry in Asia. But maybe Singapore is very expensive now to do that business. The Philippines has the basics for the business: skills of seafarers and history.

Japanese companies are moving business centers from the Lion City to Manila, or some basic functions. Difficult points remain but they’re trying to move while the economy affecting freights.

Fujiwara confirms, “We work to support such kind of development as far as possible. We are preparing our business in that direction.”

Expansion.

ClassNK-Manila is on its 40th anniversary. Its core business is vessels inspection but now expanding to management of seafarers issues. Based in Japan, Singapore and Philippines are focused areas of operations.

ClassNK-Manila is now concerned with seafaring and shipmanagement matters.

The Philippines is very important to Japanese shipping, 70% of crews onboard are Filipinos. ClassNK was concentrated on inspection of ships, with

a history spanning over one hundred years. Its’ unwavering commitment to providing clients with the best possible services is reflected in their register which boasts over 240 million gross tons or roughly 20% of the world’s merchant fleet including the largest shares of bulk carriers and gas carriers.

In its view, the problem of the global shipping industry is the human element --- for safety, against pollution, for the environment. A positive development (best program), though, is that the seafarers market is now composed by many nationalities especially from developing countries, including the Philippines.

The Philippines is better developed in shipping than the Africans, Indonesians, Myanmar. Maritime national fleet is very difficult to manage safely. The quality of seafarers is very important for the future of the shipping industry.

In that sense, the Philippines is a key player for the Japanese commercial fleet crewed by 70% Filipino merchant marines. It is a large national risk, this Japanese dependency on foreign seafarers. But Japanese shipping companies are now establishing education system and training centers in the Philippines which are sophisticated and building up.

On a broader view, it is for Japanese

shipping companies to handle. Major shipping companies do that by themselves: collect the people, educate, train and put their graduates onboard their fleets.

But for other shipping companies, it is necessary to collect the skills of seafarers from the Philippines. The average level of Philippine seafarer, frankly, is not so high. How, then, could one evaluate or grade the education training system in the Philippines? Just a matter of fleet, or on the standard of the international shipping industry?

Come the experts.

ClassNK works for the international shipping industry, mainly confined to the Japanese shipping industry. Now, the society is expanding to international shipping of all.

The Philippines is a key target of the business.

Japanese interests have developed many businesses in the Philippines about seafarers, building up direct rapport with MARINA. EMSA has triggered major reforms on the Philippine seafarers education system. ClassNK supports the Philippine position in picking the best points from EMSA that are pragmatic and doable.

The objective of ClassNK is how

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PH TO SHIPMANAGEMENT

Marine Management Systems Auditor, Maritime Labor Systems Inspector, Safety Management Systems Department - Implementation and Update of MLC, 2006 (Including PSC Deficiencies on MLC Matters); ClassNK experts invites discussions

to upgrade the Philippine shipping industry. It shall offer advices based on international standards. Then it shall show the means how to cope with that.

Finally, to certify with documentation readily acceptable in the world market.

Seminar goals.

In full candor, Fujiwara says, “Today’s seminar is in line with our business… workshop, to achieve our objectives in the Philippines.

(A) part of the seminar is for shipmanagement companies, MLC, ISM, PSC. This is our vision in the Philippines.”

Speakers and their topics are: •

Mr. Samuel Batalla, Chief of STCW Office, MARINA - Monitoring of Maritime Education and Training Institutions in the Philippines;

•

Capt. Naoki Saito, Manager, Certification Service Planning Dept - New Training Requirements and ClassNK Maritime Education and Training Audit Project KAIBIGAN;

•

•

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• Mr. T.C. Tian, Jack, Deputy Director of Certification, Marine Management Systems Auditor - Instruction for Transition Audit to ISO 9001 The seminar provided the best solution for Philippines maritime society; topics synchronized with important and current issues; presentation customer-oriented.

More than 120 attended coming from the Philippines, Japan and Singapore.

Synergy.

Teaming of expertise.

ClassNK proposes to assist as a third party to the Philippine government and give the Philippine companies evaluation. This is very objective, more so if the Philippine government accepts the evaluation emanating from tripartite sources: government, ClassNK and the company.

Without an independent third party, results may not be internationally accepted. After all, it is hard to expect fair evaluation when the users are also the only ones verifying, certifying. The government and the company are also less updated on up-to- the- minute facts or trends.

A shipping classification society surveys new and old ships to “rate” seaworthiness evaluated from published rules and standards. In 1760 in London, Lloyd’s Register was established as the world’s first shipping classification society. Major seafaring nations now have similar societies: American Bureau Of Shipping (USA), Bureau Veritas (France), Det Norsk Veritas (Norway), and Nippon Kaiji Kyokai (Japan).

Mr. Yoshinori Kozeki, GM of Safety, Management Dept, ClassNK - Recent Trends of Port State Control Inspections;

ClassNK is basically a quality assurance company.

A government has its own quality assurance system, but often not enough. The shortfall occurs not just in the Philippines but also in Japan and in other governments.

Mr. Saturo Yanase, Manager,

The problem is verification of

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the quality of assurance. The government is working for its own nationals, not as an objective and independent third party.

The government is also involved (and should be) in the performance of that industry, with pressures on the perception of policies and actions, let alone partisan and personal political imaging.

Batalla speaks MARINA policies

COVER STORY

Fujiwara expounds, backed by senior executives

ClassNK gathers and masticates the very latest information in the international market, directions of inter-governmental dialogues, international Conventions and regional Agreements; even bilateral protocols when essential to clients.

It monitors and joins industry and professional meetings, more so IMOsponsored gatherings. Given data and directions from various sources, ClassNK is confident it knows where things are going, how to react best and within timelines.

A sad reality is that Asian countries do not have enough information.

The Philippines and Japan are mutually dependent. The Japanese shipping industry now cannot stand without Filipino seafarers. The Philippines considers Japan as a very important client (often, a patron) bonded by friendship and cooperation.

Kaibigan.

Capt. Saito says the most crucial issue in maritime education and training in Philippines in 2015 was the review of the recognition of higher maritime education institutions by a tandem of important government offices, CHEd and MARINA.

He opines that although ISO9001 is mandatory under the STCW Convention, it is not enough to ascertain the quality of education and training activity. Hence, they would like to launch new audit service to maritime education institutions in Philippines.

And why a new audit? Because there seems to be 91 maritime higher education institutions in here, a lot more than other countries --- a herculean task for MARINA to minister. Capt. Saito thinks the issue is not only quality of the education but also efficiency of education; how the training institutions update teaching curricula and training facilities, how the institutions contribute to the seafarers.

ClassNK’s biggest clients are the shipowners who want qualified seafarers to maintain or develop their fleets.

CHEd-MARINA audit will be conducted continuously in higher institutions and also at training centers.

At Project Kaibigan, Capt. Saito offers ClassNK as the “third party, totally independent society. Then, we would like to contribute to the present situation in Philippines from third party audit activity point of view.”

Domestic.

An example of the concern of ClassNK is the roll-on, roll-off (RoRo) ferry boat built in Japan, the M/V Starlite Pioneer.

This state-of-the-art vessel is owned by Starlite Ferries with Mr. Alfonso Cusi as Chairman of the board. Four more newbuilts are on order to ply domestic waters, two for delivery this April and the other two at year end.

Classed by ClassNK, the focus of the society is to ensure safety. ClassNK considers the project very important as lives are at stake; more so on the particulars of archipelagic Philippines with varied coastal challenges, unpredictable micro-weathers between her waters and thousand islands spread over the awesome Pacific.

The Pioneer was launched 10 December last year at Pier 13 of the Manila North Harbor attended by industry majors and senior government officials. Over-all length is 66.80 meters, gross tonnage at 2,682 MT, with cruise speed of 13.5 knots per hour, a “knot” equals to one nautical mile or 1.852 kilometer.

The Starlite ferries are among the showcases of ClassNK in underscoring its essential role in the safety of navigation.

Education

Chairman Manese warns industry

At 41st PAMI Convention

MANESE ALERTS SCHOOLS Joint Manning Group (JMG) Chairman Eduardo U. Manese warns maritime schools on rough sailing given, “70,000 students in 69 Philippine maritime schools completed their academic requirements but only 5,000 will find shipboard requirement in domestic or oceangoing ships.”

The well-respected leader, barely warming his JMG Chair, was speaking at the 41st PAMI Annual Convention and General Assembly held February 19 to 20, at the Asian Institute of Maritime Studies (AIMS), Metro Manila.

“We try our best to put (hire) as many as possible with our association JMG. But I think the number is huge so this is where I think we should develop something.

Myanmar looking at the Philippines as a major challenge. He senses other nationals competent and qualified within the neighborhood could give us stiff competition now.

Shipowners and major fleet operators are searching for crew around the globe. For one, South Africa has a large population, establishing the schools, with committed government support.

Frontman.

JMG is an umbrella organization of independent, long- standing maritime and manning associations including: •

Filipino Association for Mariners’ Employment (FAME)

Despite this critical figure, the Philippines remains to be the premium source of seafarers by world’s maritime industry covering over 30% of the market share.

•

Filipino Shipowners’ Association (FSA)

•

Intl Maritime Association of the Phil (INTERMAP)

But we cannot be complacent with that. Of course we do recognize the emergence of foreign contenders trying to penetrate the global maritime market.”

•

Phil Association of Manning Agencies and Shipmanagers (PAMAS)

•

Phil-Japan Manning Consultative Council (PJMCC)

Manese recalls his recent visit of maritime institutes in the Asia-Pacific region. He was impressed by Vietnam’s huge schools and enrollment; so with

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Crisis.

The keynote speaker was sharing with

candor: “There is now growing concern amongst industry stakeholders, the market situation, several companies including major ones around the world have been greatly affected. You heard prominent names in shipping going bankrupt.

Market is so bad, it’s really very bad…

(T)he hire that Capesize get is not enough to pay for its operating cost much less the capital cost involved...And from the industry’s point of view, we don’t see improvement in the next two years.”

With business so volatile, Manese underscores shipowners are so meticulous in hiring the best of crew.

They are so afraid that an off-hire caused by negligence or some human error could have tremendous negative impact on the already edgy business.

He further notes the Bulk Sector is suffering tremendously. Ship lay-ups are now common. In Malalag, Davao del Sur, there are 20 big ships in cold lay-up --- still counting and will sit there for over 12 months, claims Manese.

The shipbuilder Tsuneishi looks at six months to start operating, should the market improve. But Manese “do not see any improvement.” In Greece alone, there are 300 ships inquiries for lay-ups, with crew mostly from the Philippines.

Manese ties things together: if there are no ships, where will you put the graduates? He calls for cooperation, perhaps establish a permanent committee between JMG and PAMI to study, review and act that “depends on the situation.”

The other cheek.

As maritime jobs dry-up, schools feel squeezed by Maritime Industry Authority (MARINA) on its third Category of Recognition released July 13, 2015.

From 25 recognized in marine officer courses last February 23 (MARINA Second Final List), 23 schools were added, making it 48 out of 91 maritime schools nationwide.

Based on the Status of Maritime Higher Education Institutions (MHEIs) for SY 2015-2016, 22 were added with recognitions in both Merchant Marine (Deck) Officer Program (BS in Marine Transportation) and in Merchant Marine (Engineer) Officer Program (BS in Marine Engineering).

Noted as Subject to Carrying Capacity and Delineation of the BS Program from the Enhanced Support Level Program (ESLP), 21 from the Feb 23 List were added to “undergoing review” for BSMT and BSMarE recognitions.

“Subject to Restricted Admission” is an additional category in the third MARINA WhiteList. 25 MHEIs in BS Marine Transportation and 24 in BS Marine Engineering are listed. 25 with restrictions in BS Marine Transportation.

85 are eligible to offer the ESLP for Deck Ratings (ESLP-Deck); 79 may offer ESLP for Engine Ratings (ESLPEngine). Most of these MHEIs are also recognized in BSMT and BSMarE programs.

MARINA Deputy Administrator for Regional Concerns C/E Fred Haboc says, “MARINA and CHED should be able to come up with the Final List. In what form I still do not know.”

MARINA is, yet, busy computing carrying capacity based on CMO 20 2015, 40, 50% and 60% KPI. This means of 100 students who finished three-year academic requirements, 40 should be deployed at the minimum, 50% on the second year, and 60% on the third.

Backing.

Manese reiterates his appeal on working together to surmount competitions from other nationals and impress shipping principals on Filipino competence.

He reminds the educators, “Our principals’ biggest concern is always

safety, they don’t sacrifice safety.”

JMG is exerting best effort to place as many cadets as possible but “… but I think the number is huge we should develop something,” laments Manese.

He confides JMG is working for the upgrade of instructors. Funding is ready for the software but donors are needed for the hardware. He is optimistic that with teaming up, there are major principals willing to put stakes into the development of the Filipino crew.

Reforms.

Haboc reports MARINA has programs for maritime education and training, short-term to only 2017 since, “we can only chew and swallow one at a time.”

Top on the shelf is full implementation

by January 2017 of requirements of STCW 2010 amendments; with all Filipino seafarers certified accordingly.

Haboc believes MARINA has the roadmap but humps and time may summon much.

C/E Haboc shall team-up with Capt.

Herminio Estaniel, Jr., the latter STCW Office Executive Director. They will simplify procedures, reduce shimmering ideals to doable practicals.

Light banter: Oca of PAMI, Cruz of DepEd

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MANESE ALERTS SCHOOLS

PAMI’s Jimenez pounds on views

Among the changes to implement: -

-

-

-

MARINA Circular 2016-01 deleting daily journal as a requirement for the exams Implementation of Shipboard Training (SBT), pre-discussed with Administrator Mejia and Capt.

Estaniel.

The 12-month structured program, as long as it is structured in the bridge watchkeeping, and another 6 months would be in other position relevant to the program. BSMT should be on deck, OS and AB acceptable with Training Record Book (TRB) requirement.

36-month training program without TRB. Even OS, wiper without any

TRB, one may still be endorsed for graduation. But there must be validation of sea service and evaluation of the seafarers whether certain competencies are achieved by the student.

In structured training, the company and the school Shipboard Training Officer (STO) should be on board to monitor their cadets. Communications/ interactions may be documented via digital apps like Yahoo, FB or emails.

Monitoring should not be a problem even for this one of the critical criteria in the triangulation.

A memorandum circular from MARINA may be forthcoming to reduce gross tonnage of ships from 500 to 250, allowing usage for the SBT. This

received enthusiastic applause from the educators as a training ship may now be in the backbench as being too expensive.

Other speakers and their topics: -

DepEd Asst-Sec Elvin Ivan Uy, Planning the K-12 Curriculum

-

Mr. Michael Amon, MAAP, Best Practices

-

Ms. Susan Borillo for C/E Cleto del Rosario, MAAP, Transition to ISO 2015

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C/M Renante Garcia, MAAP, Instructors’ Development Office (IDO) in Curriculum Development

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*MAAP, Maritime Academy of Asia and the Pacific

PAMI leadership honors MARINA Haboc

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Feature

SAYS AMBASSADOR MASSIMO ROSCIGNO

EMSA, NO MORE Marino World was granted a one-on-one interview by the Italian Ambassador to the Philippines, H.E. Massimo Roscigno. The exclusive privilege was held at the Italian Embassy in Makati City, January 25th.

We asked what we thought was a sensitive question, “Is the EMSA issue on the competency of our Filipino seafarers still a big concern of Italian shipowners?”

We were surprised by the Ambassador’s quick answer and its certainty: “Well no more, the problem was solved. As you know, we have discussed this long with the Filipino authorities, me along with other Ambassadors of the European Union. We discussed this regularly… Finally, we came to a comprehensive agreement with the renovation of Filipino training facilities which was deemed satisfactory by the European Union.”

Just about three years back, European Union’s European Maritime Safety Administration (EMSA) threw a boner on the Philippine maritime system, threatening to withdraw recognition on the country’s competency certifications. This will certainly disqualify Filipino seafarers from boarding EU ships, losing a huge block of good-paying jobs.

There were exchange of protocols, the Philippines accepting EU/EMSA auditors to evaluate the country’s curriculum, training facilities and other maritime infras. President Aquino even took priority concern with executive orders and egged

national legislators to urgently pass laws complementing standards of EU and international Conventions.

These took some time and gritty resolve. But the Ambassador is among those happy with the results and the current applications.

Inter-government.

On EU realities, the Ambassadors clarifies sensitive technicalities: some sectors are exclusively EU, others on joint jurisdiction and sectors exclusively of member states. He says EMSA is a little complicated because the concern migrates to shipping and maritime industry, for one.

He illustrates division in categories, just to make it simpler: •

Transport industry - joint jurisdiction of EU and member states. Italy can make initiatives; so does EU and both should coordinate

•

Preservation of marine environment and species, etc - exclusive competence of EU along trade, Customs, monetary policy.

Italy can take strategic views about the industry but in many aspects it has to coordinate with EU, making things technically complicated and pragmatically sensitive. However, he sees EU is trying to promote an integrated maritime policy.

Nevertheless, integration offers challenges again, he warns. Because whenever one talks of seas and oceans, everything is connected.

When a member state takes an initiative in energy or fishery, it impacts on other members as they share the same sea, the same ocean.

Therefore, Roscigno observes, EU doesn’t allow members to have a single policy that are so independent from each other; they have to consult almost in everything.

In a wider sense, the maritime industry includes not only shipyards, shipbuilding, ship transport but marine environment, coastal development, coastal communities, pollution, fishing, over fishing, offshore platform, so many others --- very complicated.

But certain bodies harmonize the activities of member states, EMSA for one on maritime security. They consult, meet and give inputs to mold an EU safety standard, but accounting views of each member, relates the Ambassador on the process. (Alongside the pitch for one policy, he admits to priority interest on issues about cruise ships where Italy is strong.)

Filipino seafarers.

In local love letters of puberty, “Italy” is always there: I Trust And Love You. Small wonder the light-heartedness remains to adulthood, to the professions. For MARINO WORLD

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EMSA, NO MORE

H.E. Roscigno and IMAPHILS GM Nicolo Terrei at Cebu inauguration

Ambassador Roscigno confirms Italian shipowners prefer Filipinos for many reasons: professionalism, dedication to work, knowledge of English. They participate actively in the life of the ships. Over time, they become part of the ship, always involved and with enthusiasm.

Confirms His Excellency, “Our merchant fleet is one of the most modern in the world because over half of the ships are less than 5 years old, which means there has been a huge effort renewing the fleet. The Italian shipowners have been commissioning ships, a lot in the past few years.

And it is no less than the Ambassador to notice the expanding range of Phil-Italia business activities here: maritime training, hiring of seafarers, management of ships, shipping services and similar activities --- Elburg an ideal example of an Italian company here.

I’ve seen it myself because I was Consul General in Shanghai from 2006-2010. While I was there, I saw many Italian shipowners who came to order and get ships from Chinese shipyards. I have attended personally maybe 20, 25 to 30 ceremonies.”

The Ambassador schedules meetings yearround with representatives of Italian ships.

And he openly confirms Filipino seafarers are often rated best in the world ---well trained, dedicated, and in the level of skills of others.

This is almost a changing of the guards. For as famed Italian seafarers diminish over the years for economic and various reasons, Filipino merchant mariners come to forth to assuage Italian shipowners of the same excellence. At lower costs.

Ship registry.

As of 2015, Italy is the tenth in the world merchant fleet; vessels under the Italian flag is about 700 with a total of 19 million Gross Registered Tonnage (GRT).

Ambassador Roscigno clarifies, “(B)ut if you consider the number of Italian-owned ships under different flags… in percentage, the Italian number is higher. We escalate to the fifth or perhaps, 4th place if we put in all the Panama, Liberian…registered, it more than doubles.”

Modern fleet Since 1998, Italian flagged vessels doubled; vessels less than five years of age is 50%.

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Sectoral growth.

Italy remains one of the biggest builder of passenger vessels. In fact, Fincanteri, a public company, recently received an order of two passenger vessels from MSC and four vessels from Carnival.

“One is Mediterranean Shipping (MSC), strong in container transport shipping and second in the world after Maersk. MSC is under Panamanian flag, but totally Italianowned.

Why does this happened, well you know better than I do. Tax is always a major issue especially in the shipping industry, so it increases competition. Italian tax system is quite important in determining the decision of the shipowners.

A few years back there were some facilitations. Obviously, more need to be done.”

Another sector of growth is the Italian ship registry, very important for the government.

But the Ambassador accepts these are difficult years for the budget, “…I don’t think in a short term we can see any dramatic improvement about it. In the medium or longer term, I’m sure there will be more efforts towards this purpose, hopefully some

form of deduction.”

Leisure and luxury.

Italy is 1st in the world’s yacht builders, based on the 2014 Global Order Book, a report issued annually by the Boat International Group. Key players in Global Yacht Industry are Azimut Benetti (Italy), Baglietto (Italy), Cheoy Lee Shipyards (Korea), Dyna Craft (Taiwan).

In 2012, Italy’s share of boat production in the world is 12,010 over 629,115.

In 2008, 53% of boats produced in Italy were for export, 47% for the Italian market.

In 2014, exports made up 93% of yachts sold and production for Italian market had fallen to 7%. Figures for boat leasing in Italy are positive: contracts rose 10.9% in the first eight months of 2015 from the year before, and the value of the contracts surged 113.7%, according to Assilea.

Filipino seafarers are in high demand from all European countries; about 20, 000 Filipinos are on board Italian- owned vessel.

Top agencies of Filipino seafarers for the passenger vessels are Magsaysay and PTC. Filipino seafarers on the Italian fleet are mostly aboard passenger ships which need more qualified personnel, more than container or cargo ships.

Ambassador Roscigno even hopes, “(W)e can have more often passenger ships coming because the Philippines is being eyed by many operators as an interesting destination for cruise ships.”

Training.

The Italian Maritime Academy (IMA) is the first academy established by RINA outside Italy and the first in the Philippines. IMA

FEATURE

is engaged in the preparation of Filipino seafarers, particularly for Italian- flagged vessels.

Commenting on Philippine labor, Ambassador Roscigno recalls a labor agreement with the Philippines, signed during the 2015 visit of President Aquino in Rome. The Italian Government will fund training to improve the language skills of Filipino workers and family going to Italy.

“In other words, we want to see them reaching higher levels in the scale of labor where more qualifications are required. It doesn’t concern directly the shipping industry, but it will affect all kind of activities…

When you talk about training the family, it can also include the seafarers,” explains the ambassador.

Crisis.

Ambassador Roscigno holds a very pragmatic view of global shipping, “Now a very difficult moment for the shipping industry. There is an over capacity of transport so the market is unbalanced ---capacity in excess of the demand, too many ships going around the sea.

The industry boomed in this past few years, and then what happen when you have an oversupply of freight capacity? The cost of shipping goes down, and it is not remunerative anymore so what happens when you have many shipowners?

In several countries, including Italy, they ordered new ships and they still have to make payments for the ships. But the business goes down, that’s a big problem. Some have to sell them or undersell them. It’s a crisis, quite sensitive now. It affects everybody.

These things go by cycle, I’ve seen it in many sectors, especially in the maritime sector. When we have a cycle, we move, high demand, everybody rushes to order new ships because business is great, because international trade is booming.

Navigazione covering the route of North and South America. Lloyd Triestino covered the farthest routes including Australia.

Then you have these series of effect of over capacity, especially Asian countries came into the business with strong carrying capacity.

And also many Asian flag carriers.”

The two other government-owned companies were Tirrenia di Navigazione and Adriatica di Navigazione. Privatization and free-market competition followed, imposed by European Union rules. Governments were restricted to run shipping business and all European operators can freely navigate Europe.

Better grasp.

Our kind diplomat.

“For the passenger ships, my understanding is relatively better. There has also been an increase; but, proportionally not as much as the cargo industry.

Ambassador Massimo Roscigno was born in Rome, graduated from the University of Trieste with a law degree (‘77) and a doctorate in European Studies at the University of Rome La Sapienza (‘79).

Actually now our passenger shipbuilding industry is doing quite well. We have a number of big orders. We have some of the main cruise companies in Italian. The Costa cruise, ships built by Italy, remains under Italian flag based in Genoa even if bought years back by the Carnival Cruises, the big American conglomerate.

I’m proud we make the best cruise ships in the world because of the quality of materials, the quality of designs. In fact, orders are coming from other countries as well.”

Clip of history.

Italy was once “Lord of Blue Waters” with the city kingdoms of Venice and Florence.

The first company, Italia di Navigazione, was established in 1932, from the merger of Navigazione Generale Italiana (Genoa), Sabaudo (Turin), and Consulich (Trieste).

The first government-owned company engaged in passenger and goods was Italia di

He joined the diplomatic service in ‘81, Directorate General for Emigration and Social Affairs, Foreign Affairs; posted First Vice Consul in New York, then Deputy Head of Mission, Manila, 1988 to 1992.

Four years, he served back at the Ministry of Foreign Affairs till posted as Deputy Head of Mission, Beirut (’95), Consul General, Los Angeles (’99) and the Diplomatic Institute (2003).

Roscigno was Consul General in Shanghai (2006), Deputy Central Director for Asia Pacific, Directorate General for Globalization and International Relations (2010) and Deputy Chief of Protocol at the Ministry (2012).

His Excellency presented credentials to President Aquino on 4 February 2013 as Ambassador Extraordinary and Plenipotentiary of Italy to the Philippines.

Italian shipowners at Elburg conference last year

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15

Governance

Unveiled at MMP Forum

DUTERTE MARITIME PLATFORM

“How can we partner”

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D

avao City Mayor Rodrigo Roa Duterte is first among presidential candidates to accept the invitation of the Movement for Maritime Philippines (MMP) to present his platform of government, particularly on the maritime industry.

State visitor, we have to close NAIA, the airport. Manila gets too many landings from big and small aircrafts, commercial or private.

Hence, congestion develops even in terms of goods and services, simply because there are no airports to take care of the assets. Passengers from Manila usually bear three hours delay. This is not an issue on airplanes nor maintenance but of congestion: at any given time, there are about two dozens or more international flights and local aircrafts flights lining up for the final approach to land. It takes more than two hours for air traffic controllers to decongest --- but demanding three hours wait for those onward to Cebu or Davao.

This was on the Talakayang Eleksyon: Pagsulong ng Bayan, Maritima ang Kasagutan held at Davao Merchant Marine Academy Southern College of the Philippines (DCSP), January 27th, attended by a cross section of the maritime industry like maritime cadets, seafarers and families, fishermen, instructors, manning agencies, government agencies and the public.

MMP Chairman, Atty. Brenda Pimentel, observes national candidates have lapsed in mentioning platforms relevant to the maritime industry. Thus, they organized to “bring up the consciousness of people, of the presidentiables” on what the maritime industry is for the elect to lead the initiative.

Pimentel is also the president of PhilMaritime Research, Studies and Services, a convenor of MMP with the Phil Association of Maritime Institutions (PAMI), Phil Association of Maritime Training Centers (PAMTC) and Integrated Seafarers of the Philippines (ISP).

Panelists.

Duterte answered panelists from maritime associations, like: Ms. Merle Jimenez-San Pedro, PAMTCI Ms. Arlene-Abuid Paderanga, PAMI Dr. Elizabeth Salabas, Phil Coast Guard Auxiliary (PCGA) Capt. Rogelio Paramio, Marino PartyList Mr. Leo Santiago, Maritime Journalists Asso (MJAP) Infrastructure.

Duterte holds these views on congestion: •

Airports - Every time there is a

•

Ports - Even now, not enough to handle the imports, exports and decongestion. An exporter contracts to load cargo but the shipment fails to arrive on the designated time.

This is often due to horrendous traffic, apprehensions from separate enforcers of various towns and cities along the route, and limited access to highways during peak hours.

Add to these the closure/gridlock of EDSA, repairs on Roxas Boulevard, suspension of access to favorable roads.

When cargo does not arrive on time, the exporter pays daily demurrage, adding to his expenses and making him less competitive. He cannot even project how many days he must pay. 104 million Filipinos must sacrifice for one port and one airport.

Duterte says economy worldwide is simply the law of supply and demand.

Whatever they need that they don’t have, they ask us to export. What we need that we don’t have, we import. So what is the secret of economic order? You need ports for goods and services; airlines for overseas workers, experts, supervisor.

“It’s now free, you can hire Malaysians, you can hire Singaporeans and they can hire us,” (referring to the Asean integration in effect 2015).

US bias.

He cannot understand USA duplicity of her Trans Pacific Partnership (TPP) over our existing General Agreement on Tariff and Trade (GATT) and APEC. Duterte points out USA raised the ante (the pot, as in poker games) in that before being a member of TPP, the country’s must be evaluated on its technology, gross domestic product (GDP) or total income, purchases and nationals working.

Given this US style, Duterte questions “how can we partner with everybody.”

He laments the US excluded us but accepted Malaysia, Singapore and Indonesia. He surmises politics is complicating the headaches of commerce and trading. After all, Duterte quips, the warships are deployed on what secret plans?

Business drag.

It is critical for importers and exporters to ascertain their computations; delays must be predictable, controllable, and should not last more than a day.

When a Manila ordinance closed streets linking the pier and the delivery routes, so many went bankrupt --- some even committing suicide during the Christmas season. Ships have docked but cargo cannot be off-loaded as trucks are unable to maneuver as usual as, the North and South harbors practically just one direction.

Corruption.

Duterte feigns cynical: kill in the process, push over the other. Who has a “friend” in the traffic, whose trucks are “guests,” who can give “tips” at the Customs gate, to Customs men --- then they may bypass the line, zoom over to the front.

These Duterte cannot tolerate. He already thinks “business in this country is survival.” Placing in position incompetent ones in the already challenging nature of business is almost suicidal for the Filipinos.

A businessman loads the banana with the equation of going for the cheapest,

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DUTERTE MARITIME PLATFORM

the fastest and the safest means. Duterte claims “(W)e have the infrastructure, the buildings, there’s an expansion going on.”

On the build-ups, there’s even a contentious issue on not seeking the permission of the local government of Davao City. Duterte is willing to let it pass, “(A)nyway, it’s just a matter of putting an imprimatur and nothing else is involved.” But in building the infrastructure of roads, one does not build a port without the access road.

He hopes these are completed on time, rhetorically asking why the rush; and suspects the rush is because “bayad na yan” (paid for) with money changing hands in time for the elections. Duterte claims they never have time to talk to him about the law because the law says Davao City must give its approval or its concurrence.

It was rushed, just like the MRT (in Manila), Duterte insists.

Sea as survival.

Duterte accepts the fundamentals of a good economy as of today is “very good.”

He advocates building more ports because the sea is survival, and we must guard our resources like water which

carries everything as food and transport.

He notes we are an archipelago of 7,250 islands, use the waters and have the longest coastline. So we have to take into account the travel of people, local industry, our food security, and everything about life.

But even bathing at sea every Sunday with the family is “maritime trouble.” We are the window facing the Pacific Ocean with the El Nino phenomenon. The heat wave and the cold front crosses over, so much water evaporates and triggers the rampages of El Nino.

He warns that in Cotabato, soil is drying up severely reducing produce that may force us to import our needs. He prays for the Philippines and for Laos, Vietnam and Thailand where we traditionally import rice.

bright one to come up with programs like Biyayang-dagat and Masagana 99.

These were very good programs although a little bit expensive but not worthless at all.

Biyayang-dagat allowed small fisherfolk to take out loans. To help them pay back, the program widened the market for fish products and improved the fishery sector.

Masagana 99 spread the use of a highyielding rice variety developed by the International Rice Research Institute (IRRI) to increase productivity. It is credited for launching the Philippine Green Revolution, making the nation self-sufficient in rice and export rice for the first time.

Shipbuilding.

Govt programs.

“This world will last for about another maybe 1,000 years. In the coming days, we would be eternally dependent on each other for food and services and for all, so there’s going to be a lot of movement, mobility and for the goods, maybe air services. We would need more ships, we would need more warm bodies, manpower, sailors to move these ships.

For Duterte, a way to resolve is for the State to interdict, to intervene. He recalls Marcos was ousted because of this and that, lust for power. But for all the faults of Marcos, Duterte thinks he is the only

(A) lot of things that will be moved around the world, food and everything because as we grow older, this universe, we will have more people, more needs, more demands… (T)hat is why there

It would take years to recover; giving Duterte the aches to withdraw from the race since The President has the duty to see to it that in the table of every Filipino, rich or poor, there must be food that is available and affordable.

His platform before MMP

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GOVERNANCE

Explains up close and personal

should be shipbuilding not only in Luzon or maybe in the Visayas and Mindanao, “ explains Duterte.

Training ships.

Duterte plans to buy or rent about five moored or lay-up ships to be panned out to agencies as training ships for cadets.

If not in use by the shipowners, he will request them to donate or lease out the vessels.

If they are not cooperative, Duterte will find ways to strong-arm in the interest of the people by way of court cases on taxes, hidden wealth and similar legal processes. If one is worth his person and the Presidency, he will act for the people --- as he did in Davao City which led to development and progress because the people believe in him.

Scholarships.

PAMI officer and AIMS President Paderanga grounds her question on maritime education and training as capital-intensive but students and trainees are mostly from the lower income bracket; that schools and training centers continuously import modern equipment to comply with regulations without Government support; while seafarers remit some $5.4- ELOOLRQ Paderanga then asks, “Do you see yourself extending government support through tax holidays and/or incentives and rationalize regulatory regime for maritime education and training?”

Duterte grounded his answer on his Davao City experience. When his daughter, Inday, succeeded as mayor, she sponsored about 4,000 scholars.

With peace and order assured, she spent heavily on the youth. When Duterte returned to the post, this social initiative must be sustained but became a budgeting problem.

Being money of the people, the scholarship grants must be for achievers at 85% grade. And some are already nurses, lawyers; Mayor Inday even funding special careers, like medicine, for the best and the brightest who, Duterte hopes, will help build this country.

To Paderanga, Duterte forwards a proposal: subsidy for the schools, allowing schools to set procedures and examinations. He just implores that standards be not too stiff for the “ordinary” minds. He may set a particular sum for a particular discipline (i.e. education, seafarers, maritime) and would not impose grades like 85 or 80.

78 may be acceptable.

One-stop shop.

Duterte is aware of “agony and travails” of overseas workers, even seamen in a different situation. One is also uprooted from family, with loneliness that kills.

Depression sets when the wife gives birth and you are not around. For that alone, Duterte gives OFWs the highest of respect. If he becomes President, he will give what OFWs want.

Paramio of Marino PartyList says there are more than 450 private manning/ crewing agencies and shipmanagers in the country employing more than 400,000 seafarers. Delays in processing documents sometimes lead to cancellation of overseas employment.

He then asks how will Duterte shorten the process to avail of immediate employment.

Duterte: Not just seafarer documents but all clearances or permit in three days, maximum. He plans an Overseas Maritime Authority, or something.

Marine Authority, one department or maybe an agency with 5 to7 signatories, acting within 30 days. One should not follow-up, just get a card and give the agency the problem of processing.

Mulcting is also be avoided if one is not seen in the premises.

Every province or city shall have processing centers, including the Professional Regulation Commission (PRC).

He adds governance is common sense.

He quotes US President Lincoln’s famous lines that the government is of the people, by the people --- but here, it is not for the people. The government in the Philippines is “all corrupt to the core.” Duterte is convinced a bureaucrat commits a crime when one demands applicants to keep coming back, to ask for grease money.

He repeats all are working for the same paradigm: about the sea, employment of MARINO WORLD

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DUTERTE MARITIME PLATFORM

“Bayad na yan”

Phil is ranked 29th on 35 flag of registration with .44% of the total deadweight of world fleet per 2012 UNCTAD maritime review.

seafarers. Why, then, should applicants move from agency to another agency?

He wants one overseas maritime authority, period.

•

Waiting period is 30 days, Duterte will provide the needs, all the computers necessary. If there are no ocular or physical examinations, do not procrastinate and issue the document.

End of story, Duterte stresses.

•

Phil is Number 5 in 2012 world’s largest shipbuilding country after China, Japan, Korea and Brazil; Number 4 in 2014.

•

Topmost in seafarers for international merchant ships.

•

In domestic shipping, 74.38% of our shipping operators are single proprietors; corporations, 25% and cooperatives, .59% of the total 2,369 ships here.

•

About 45,000 are employed in shipbuilding and ship repair; we have 7 shipyards considered Class A, 12 medium-sized and 99 for small ships per MARINA in 2013.

•

There are 91 MHEIs, 117,556 enrollees (2011); 110 training institutions nationwide.

•

The world’s second largest shipping nation; fishing contributes 85% of revenue; the maritime industry

He wishes to see everybody transacting business with government. If necessary, government will work Saturdays; of course, with corresponding increase in pay.

General info.

Before Duterte answered questions, Ms. Merle Jimenez-San Pedro cited maritime clips: •

•

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Shipping moves 90% of world’s goods; a fundamental industry that has long been neglected in the Philippines.

25% of OFW remittances are from seafarers, roughly US$5.375 billion in 2014.

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accounts for 1.7 % of the revenue overall.

Further, Ms. Jimenez-San Pedro gave fast facts on allied industries, viz: •

On transport and storage, the maritime industry accounts for 15.6% of the cost with employment at 3.3% of all industries.

•

We are considered a major fishing nation producing 3.1 million tons of fish and marine products; 25.4% of total fish production with 1.5 million employed; 1 million fisheries, 1.8% or 196B to the GDP fishery products and exports valued at US$1.2B.

•

Considered Number 3 as world’s producer of farmed seaweeds, of tuna and top exporter for shrimp, prawns.

•

One of only six countries of the Coral triangle protecting the coral reefs and fisheries for food security.

More blessings for the country, underscores Ms. San Pedro: •

Huge renewable energy like

GOVERNANCE

geothermal, hydro, wind, wave and solar energy; with 1.38 million barrels of oil resource and 3.48 trillion cubic feet of natural gas reserves.

•

•

With 9.7 million hectares of farmland, marine wealth and wetlands to feed millions of Filipinos.

Number 3 in gold deposits, 4th in copper, 5th in nickel and 6th in chromite.

Ms. San Pedro also spills the downside: we are considered the most disasterprone country, most vulnerable to climate change according to environmental groups.

But these do not depart us as Number 1 of 18 countries with mega-diverse environment, very rich in both marine and non-marine resources; 25th worldwide on animals and species.

Per 2014 PPA report, passengers

reached 55.9 million, an increase of 3.94%. Ship calls total 362,994 vessels, a decrease of 1.82%. This is because our ports do not have the capacity for bigger ships that carry larger loads --confirming Duterte’s criticism on lack of infrastructure.

Combined earnings of ports for 2015 is PhP12.567-b.

Marino PartyList.

Senatoriable Dante andPartyList Marino Mr. Dante Liban andLiban Marino PartyListAlejandre Florence Alejandre (First Florence (First Nominee) Nominee) gavebefore speeches the gave speeches the before forum formally forum formally started. started.

Alejandre says says Marino Marino will will “give “give Alejandre and expand expand scholarship scholarship programs programs and for deserving deserving maritime maritime students students in in for Mindanao” and and aa host host of of service service Mindanao” programs for for seafarer seafarer family. family. Other Other programs nominees are are also also officers officers of of DCSP: DCSP: nominees Lawrence Edwin Edwin Eusebio, Eusebio, Atty Atty Reneriza Rene Lawrence Rizza Mamburam, Lamb Bernardo Mambura,Mr. Mr.Christ Chrislam Vicente and and Capt.

Capt. Rogelio Rogelio Paramio.

Paramio.

Vicente

Commitment.

After the forum, Duterte signed the Commitment prepared by MMP: “The Philippines is in a most advantageous position with Godgiven vast maritime endowments… complemented by … hard-working coastal fisherfolks, globally competent seafarers, able maritime executives, and ever expansive-looking maritime communities.

Recognizing this, the development of a national maritime agenda will form part of my government platform to achieve an inclusive economic progress under my leadership.”

As of press time, MMP still awaits responses from Mr. Mar Roxas, VP Jejomar Binay, Senators Grace Poe and Miriam Santiago who are also on the ballot for president this 2016.

Excites the crowd

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Feature

MPCF’s Evita Jimenez

MPCF ELECTRONICS LIBRARY

DIGITAL LEARNING FOR SAFETY AT SEA The Library for Safe Seafaring (L4SS) is an electronics library installed at Mariners Polytechnic Colleges Foundation (MPCF) enabling it to connect worldwide. This digital wonder has become a landmark with only a few academic institutions in the Bicol Region operating a similar facility.

A grant from Elsevier Foundation of USA and Holland, L4SS has been operational at MPCF for almost two years now. It is a one-of-its-kind project as Mariners is the only recipient maritime institution in the whole of Southeast Asia.

L4SS users are able to connect on-line via the Internet to partner-libraries in the world for easier, wider and more effective research and quicker access to information.

Aside from landbased users, those onboard ships may also benefit from the digital library’s focus on safe seafaring, up-to-date and relevant education materials; enhancing the learning of both

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students and teaching faculty.

during maritime disasters.

“The L4SS library is helping us maritime cadets in so many ways with its modern features. Materials on maritime studies especially on the topic Safe Seafaring are digitally-available using the globallyconnected electronics library and we don’t have to go out of the campus,” says Midshipman Ralph Arky B. Picache, a BSMarE student. He is a recipient of the Most Outstanding Bicolano Maritime Cadet of the Year (Engineering Category) award.

The project upgrades MPCF library into a modern repository of maritime publications, Internet-linked computers which continue to be available to faculty and students even long after graduation and already on-board ocean-going vessels. L4SS also continues its appeal with wide categories like technology, science, health and issues of family, society and culture, all funneling to building capacity on maritime safety.

A study showed Filipinos, especially those on coastal communities, are naturally resilient to life at sea. L4SS aims to complement and selected MPCF, already positioned in Bicol, one of the country’s poorest coastal regions.

Actually, L4SS is Elsevier Foundation’s response to sea mishaps worldwide.

MPCF was given the grant to directly impact on future seafarers and current instructors, the latter holding influence on the thinking and attitude of maritime students.

Aside from being ISO-9001 certified, MPCF is a top performing maritime school, students and faculty assist the Coast Guard (PCG) in rescue/retrieval operations. It is also recognized as having dependable ship crew, even

To expand the connectivity of L4SS, efforts are underway to create more linkages with other electronics maritime libraries themed on information on ‘Safety at Sea.’

Electronics library

The goal of L4SS is to institutionalize the use of the upgraded library as a valuable learning facility for quality education and training, enabling MPCF to continue to produce more safety-conscious and trained seafarers as licensed officers and crew, compliant with international quality standard on maritime safety.

The success of L4SS should inspire other schools to join the model, given that MPCF is a leading institution among 80

members of the Association of Maritime Institutions (PAMI) and Association of Maritime Training Centers (PAMTCI) of the country.

and the STCW ’78 Convention on the setting-up of safety-conscious systems in maritime institutions,” declares MPCF Trustee Ms. Evita Jimenez.

“L4SS has enhanced the awareness among the members of the Mariners academic community on the importance of avoiding maritime disasters which has become a major global worry.

It also supports the advocacy of the International Maritime Organization

On the side, L4SS will contribute in addressing concerns on the EMSA audit on maritime education and training in the country to be compliant to demands of the international seafaring industry.

Alumni donate books

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OPINION

CLASSIFICATION SOCIETIES F.R. Chowdhury

Classification Societies (CS) are organisations that influence on the design, construction and safety of ships; classification defined as ‘a division by groups in order of merit’ – precisely what was attempted in the early days of ship classification. It was done for the benefit of shipowners, cargo owners and underwriters in order to ascertain if a particular ship represented a reasonable risk.

Lloyd’s Register of Shipping is the oldest society.

Tradition.

It was customary in the 17th and 18th centuries for merchants, shippers and underwriters to meet in coffee houses in London to discuss business. Ship lists were circulated which contained information on ships, particular useful to underwriters in evaluating the degree of risk involved in insuring the ships and cargoes.

One was owned by Edward Lloyd, originally at Tower Street but later moved to Lombard.

Lloyd provided a list or bulletin about ships as far back as 1702. It was withdrawn but reissued in 1734 and continued until December, 2013 as Lloyd’s List --- glorious, nonstop publication for 279 years. When ship information got more formalized, eventually a Register was published.

Originally, classifying ships and insuring them went on under the same roof. When separated, both activities took the name of the coffee house proprietor; classification as Lloyd’s Register of Shipping in 1760 to examine merchant ships and classify them according to their condition. The organization’s expertise and activities extended far wider to shore-based industries, offshore exploration and installations.

Today, Lloyd’s Register of Shipping is an independent authority, non-profit, and relying entirely on fees charged for surveys and other services rendered. It is controlled by a committee representing shipowners, ship and engine builders, the Institute of London Underwriters, the Royal Institute of Naval Architects and Shipbuilders. Most international CS follow the same pattern.

Institute.

A CS is now very much like a standard institute. It has its own rules and regulations for construction and classification of different

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kinds of ships. It acts without any prejudice to anyone’s interest. If the ship concerned meets the standards laid down in the Rules, then she is classed and she remains classed as long as she maintains the standards.

This has earned a high degree of trust and fame for the CS and has made it equally acceptable by almost all concerned in shipping. The role and function of the CS will be better understood by analysing its relationship with other organisations involved in shipping.

Shipowners.

For the shipowner, CS is possibly one of the best technical consultancy services available.

A good shipowner will always like to have an efficient ship. By having the vessel classed, he will have the services of the Society Surveyor available whenever there is a deficiency or breakdown and would get the best advice as to how the ship can be put back into same efficient order as it were before.

The modern classification rules involve mandatory inspection of each and every part and component of the ship, her machinery and equipment, once every four years, which automatically ensures good upkeep and maintenance. Besides, the shipowner enjoys the confidence of the market as long as the ship is classed.

Underwriters.

It was for underwriters that the CS was first created who required guidance on assessment of maritime risks. In the early days, the assessment was based on the capability of the Master; later, on the capability of the ship.

Insurers would only cover a ship providing it had been built and maintained to Class requirements and standards.

To demonstrate that a ship was classed with a Society, their mark was put on the side of the ship which was eventually combined with load line requirements for freeboard. The insurance policy in most cases will stand void if the vessel goes out of Class.

Administration: The CS is a big help for the Administration because of CS impartial role and total dedication to standardization. The Administration entrusts certain statutory

functions to CS but the Administration remains legally and morally responsible for survey and certification under various international conventions.

That is why established maritime nations continue to deal with Passenger Ship Safety Certificate, Cargo Ship Safety Equipment and Safety Radio Certificates directly, whereas the other ones such as Safety Construction, Load Line, IOPP, etc. are dealt with by the Societies with the Administration having a supervisory role.

The authorization or delegation by the Administration will evidently refer to the condition that the subject vessel must be classed with the concerned Society so that the Society is in the full picture of the ship. The biggest advantage the Administration (and the shipowner) derives is that the vessel can be inspected/surveyed almost anywhere through the global network of the CS. When the Safety Certificate (which the Administration may be dealing with directly) expires with the vessel in a foreign port, the Administration may authorise “case to case” basis for the Society to deal with the same on behalf of the Administration. The Rules and Regulations developed by the Society are sometimes regarded as an asset to some of the developing countries who may not have the resources and the expertise to develop their own.

The Administration can only delegate functions and not responsibilities. Hence, the Administration has to find way to monitor the work of CS. Most agreements are based on IMO Resolutions 739 and 789.

The CS remain obliged to make available survey status and other information to the Administration. In some cases the Administration can directly access through Internet necessary ships’ files with the CS. Some Administrations also conduct formal audit of the CS. However, to get the best out of CS, the national administration has to be competent.

With ships being subjected to more survey, audit, inspection and certification, it has now become almost customary to delegate most of the functions to CS. The Administrations retain control over them by two means: •

Keep ISM audit and certification to their own control

F R Chowdhury is a former Director General of Shipping, Bangladesh. He is also an Ex-Deputy Chief Examiner of UK-MCA, Maritime Administrator of Gibraltar and Maritime Adviser to GOP, Kingdom of Bahrain.

Editor’s Note. The author is an acknowledged expert in maritime issues and concerns, with worldwide lectures and experience. But his fertile mind cannot be confined in any one area; he must explore yonder horizons –- socio-political, economic trends --- truly a Renaissance spirit.

•

By audit and inspection of all cargo ships once every 30 months

The UK Administration (UK-MCA) also deals directly with passenger ship certification. Administration like that of the Bahamas appoint a number of (non-exclusive) inspectors/ surveyors around the world for conduct of mandatory requirement of annual inspection to check and monitor performance.

This annual inspection is essentially a national requirement.

International.

IMO deals with technical aspects of maritime matters such as safety at sea and the protection of the maritime environment.

IACS is an association of major CS; IACS is an associate member of IMO as an observer with consultative status.

Perhaps, IACS is the most active member amongst private international organisations providing IMO with data, information and advice vital for adoption of various safety conventions (IACS has no voting right; only member states take decisions).

In safety construction, IMO has the SOLAS Convention which gives guidelines on requirements relating to Sub-division and fire protection; Load-Line Convention dealing with stability requirements and closing devices. Yet, the Tonnage Convention indirectly encourages construction of stronger and safer ships with sufficiently spacious machinery space.

It is the CS which has made complete Rules and Regulations for construction of steel ships by incorporating ingredients of various conventions, protocols, codes and resolutions of IMO. So far it has worked so well that there has been no need for a separate Convention on ship construction.

Many countries have Safety Construction rules, which are quite identical to Society Rules because of having the common safety provisions from international instruments but none possibly as elaborate as the Classification Rules.

Stakeholders.

The shipping world today deals exclusively with classed vessels. It is so easy to find all the particulars from the Classification Register.

A class record even shows major accident or damage including any outstanding condition of class.

The owner is more readily accessible to the market; the buyer, charterers, shipper, or even broker acts with confidence and knowledge. Classification is a central point of convenience for all parties dealing with shipping.

Without Class.

Classification in most countries is still not a legal requirement, but one can hardly think of a ship without being classed. In fact, most ships would be built under class. SOLAS74 (as amended) Part A-1 Regulation 3-1 now requires ships to be designed, constructed and maintained in compliance with structural, mechanical and electrical requirements of a recognized classification society. No financial institution will ever finance purchase of a ship that is not classed.

A ship without ‘class’ can neither be insured nor mortgaged. It will be difficult to find crew willing to sail on it. Nobody will risk giving cargo on such a ship and the ship will hardly have any value in charter or sale market ---classification is virtually a must!

Limitations.

CS cannot do unscheduled inspection (the role of Flag State Administration) nor the Port State Control (the role of the Port State Administration). However, once CS is informed of deficiency of one of its classed vessels, it will probably put the vessel ‘off class’ if such deficiency affects the safety and the sea-worthiness.

CS would not get into inquiry/ investigation that would involve the conduct of the owners/ managers/ master and crew which may displease them. CS cannot play any

role STCW Convention except issue of ISO certificate to training institute. Training and certification of seafarers, issue of SMD and Flag State Endorsement are for the Administration.

IACS. Major CS are organized International Association of Classification Societies (IACS) to maintain a common approach towards safety standards. IACS attends the IMO meetings as ‘observer’ and makes valuable contributions with its research and findings.

IACS regular members are: 1.

LR Lloyd’s Register (UK) www.lr.org

2.

BV Bureau Veritas (France) www.veristar.com

3.

DNV-GL German-Norwegian merged - www.dnvgl.com

4.

ABS American Bureau of Shipping (USA) - www.eagle.org

5.

RINA Registro Italiano Navalo (Italy) - www.rina.org

6.

NK Nippon Kaiji Kyokai (Japan) www.classnk.org.jp

7.

CCS China Classification Society www.ccs.org.cn

8.

KR Korean Register www.krs.co.kr

9.

RS Register of Shipping (Russia) www.rs-class.org

10. IRS Indian Register of Shipping www.irclass.org 11. PRS Polish Registry of Shipping www.prs.pl 12. CRS Croatian Register of Shipping (associate member)

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Regulation

IMO POLICY STATEMENT

CONSENSUS AND COOPERATION International Maritime Organization (IMO) Secretary-General Ki-tack Lim of South Korea took office on the first day of 2016, opening his policy statement with the usual Thanks You’s but with clear priorities as executive head of the UN specialized agency on maritime matters.

Posted on the IMO website, Dr. Lim pledged strengthened partnerships between developing and developed countries, between governments and industry and between IMO Member States and regions.

In essence, he will focus on implementation of international treaties; collaterally, build capacities of developing economies to secure resources for compliance.

Lim was the eighth elected SecretaryGeneral of the organization by the 114th session of the IMO Council in June 2015 for a four-year period beginning 1 January 2016. The election was endorsed by IMO’s

Assembly at its 29th session in November, 2015.

“IMO currently faces an array of issues.

With the collective wisdom and insight of IMO Member States and other stakeholders, I am confident we can meet these challenges and continue to forge a future where shipping meets the needs of the world in a safe, secure and sustainable way…

My vision is one of strengthened partnerships – between developing and developed countries, between governments and industry, between IMO Member States and regions. I will also endeavour to strengthen communication between the maritime industry and the general public, I see IMO acting as a bridge between all these stakeholders in what I have referred to as “a voyage together”.

Fleshing out the words, Sec-Gen Lim confirms overarching objectives:

on over 110 years' experience as a leading classification society, ed its PrimeManagement to offer a total management certification or Health, Safety, Environment, Quality management systems, available h a service network of over 130 offices across the world. 's Management” is a total management solution tailored to suit your needs e your organization a competitive edge in an increasingly challenging . For further more details about “PrimeManagement” please visit our at www.classnk.com

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effective implementation of international conventions and regulations

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building capacity in developing countries, particularly small island developing States and least developed countries

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promoting IMO’s global status

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contributing to shared growth for all Member States

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the efficient performance of the Secretariat.

Reflecting an Asian communal tradition, the South Korean national pledges to use consensus and cooperation to develop and deliver on its mission.”

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Business

Senator Angara

MAJOR QUESTIONS FOR GLOBAL SHIPPING Abstract from RatingsDirect Released 11 February 2016

By Standard & Poor’s Rating Services (McGraw Hill Financial network) With Allied Commentaries Standard and Poor organized a Q&A among the 16 shipping giants it is rating to gather impressions for investors on the global outlook of shipping for 2016 and the oncoming years.

For this report, S&P’s primary credit analysts are Ms. Izabela Listowska of Frankfurt and Ms. Rachel J. Gerrish of London, with six secondary contacts; two from New York, two from London and one each from Tokyo and Taipeh.

Overly large drybulks and containerships are chasing too few cargo and from fading demand due reduced growth from developing countries.

The tanker segment may be the brightest spot in 2016, given one-year time charter of VLCC averaged US$48.000/day from US$28,000/day a year ago.

2. SUBSECTORS FACING BIGGEST CHALLENGES IN 2016?

3. CAN OPERATORS BE INSULATED FROM WEAK RATE AND VOLATILITY?

Drybulk shipping rates are lowest in 30 years as supply continues to outstrip demand, aggravated by low imports of iron ore and coal by China, the world’s largest buyer.

A large Capesize drybulk carrier is about US$5,000/day from 2008’s US$185,000/ day. S&P does not see any rebound without demand-side stimulus or supply-side relief. Scrapping older ships is wiped out by new vessel deliveries, unless postponements/cancellations soar.

1. WILL SHIPPING SUPPLY AND DEMAND BALANCE IN 2016?

Container lines are experiencing severe freight-rate volatility and downward pressures on primary and secondary routes. They cannot increase freight rate due to low bunker prices and rapid deliveries of ultra-large containership.

No, because of (1) current large global fleet already on waters due deliveries of new ships ordered when prospects were promising, (2) continued race (between container lines) for larger and more efficient vessels and, (3) poor discipline among shipowners, in general.

On the positive, bunker price dropped presenting a buffer. Disciplined capacity management of the large players will help; so with capacity reduction of major liner alliances.

The top ten questions of investors with commentaries by S&P, viz:

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Exports from Asia to Europe contracted, intra-Asian trades slowed.

No, container liners face low revenue because fixed contracts are few and short-term while bulk of trading is at market rate at the time of shipment.

Some carriers, including the Narvios group, have charter-out agreement with a remaining average of 3 to 5 years at rate above cash flow breakeven levels.

These may help but will not fully insulate operators from weak rate and fragile prospects. Companies need to renew a portion of their charter portfolio on a regular basis. Being static could impact on earnings.

4. BIGGEST DOWNSIDE CREDIT RISKS FOR SHIPPING? Four of them, viz: •

Sharper slowdown in China; and will continue in S&P’s view.

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Acceleration of orders for newbuildings. Historically, shipping sectors have poor supply discipline.

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Scarce and expensive funding,

the mix still secured bank loans, secured bonds and private equity.

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Oil price increase, hitting vessels operators across all shipping segments. Large tankers may be too pricy used as floating storage.

5. UPSIDE FOR GLOBAL SHIPPING? Increasing OPEC production quota to stimulate oil trades, oil demand, and tanker rates.

Stronger-than-expected Chinese economic growth in infrastructure and urbanization.

Better growth in developed markets like the US and EU to counteract slack in Asia.

6. IMPORTANT ECONOMIC INDICATORS IN SHIPPING FORECASTS? S&P takes economic growth and oil prices as fundamental drivers of credit risks for shipping.

GDP makes major contributions to trade volumes and S&P keeps faith in overall growth, despite. China is a key engine, emerging market economies are slowing down. Brazil and Russia in recession, the US, EU, India and Japan are picking up.

Oil prices have been halved in the past 6 months. S&PP forecasts average WTI and Brent crude oil prices at $40/bbl, $45 in 2017 with companies benefitting from reduced fuel bills over the medium term.

7. ORDER NEW SHIPS IN 2016?

Yes, but lower due vulnerable earnings.

Industry subsectors may vary: container liners may continue ordering ultra-large containerships; drybulk orders may dry out. But as vessel prices are attractive now, new orders may continue.

8. MERGERS & ACQUISITION IN 2016?

Large-scale M&A may not be in oil and oil trade and drybulk as there are no tangible benefit.

Expansion may be in newbuilds or second-hand vessels (mostly those in distress).

B. They may manage but rating downgrades may be in the offing.

C. Sharper slowdown in China, sudden oil price increase or more ordering of new ships pose the biggest threats to credit quality.

Cost efficiencies and stronger bargaining position may trigger merger like those of Hapag-Lloyd and CSAV, Neptun Orient container shipping and terminal activities of the French CMA CGM.

D. Tanker operators may be bearish, drybulk and container liners will continue to struggle.

9. HOW IMPORTANT IS ADEQUATE LIQUIDITY?

Shipping companies and port infra could face “tough” industry realities, claims Harry Lesser of Moorgate Communications, based in London.

Very, liquidity is the pillar of credit support, crucial in maintaining credit quality. S&P notes of its 16 rated clients, all but one liquidity exceeds uses by more than 1.2x in the next 12 months.

10. CAUSE OF CHANGES IN RATINGS? S&P’s outlook is stable for 2/3 of the shipping companies they are rating.

Firstly, their earnings and credit metrics are fairly resilient. Secondly, their liquidity should remain adequate over the coming year.

Negative ratings are occasioned by: •

Protracted industry downturn

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Unable to renew charter at favorable rate

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Weak-than-forecast cargo volume

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Intensified cost pressures due higher fuel costs

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Aggressive debt-funded ordering

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Eroding liquidity

S&P Overview.

A. The 16 shipping companies it rates, particularly drybulk and containership operators, will face tough industry conditions amid oversupply of vessels and fragile global demand.

Parallels.

Mr. Lesser’s commentaries practically reflect S&P forecasts: •

Weak global demand for trade cannot sustain oversupply of ships

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Industry depends on China agonizing with sharper slowdown

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Sudden rebound in oil prices will eliminate financial buffer which keep most operators in the black.

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Capital growth scarce

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Most will weather but 25% of those rated by S&P may suffer rating downgrade.

Liquidity of the 16.

Strong: Wan Hai Lines and BW Group.

Adequate: Nakilat, MISC, POA Sovcomflot, Capital Product Partners, Navios Maritime Acquisition, Navios Maritime Midstream, Hapag-Lloyd, Scandferries, CMA CGM, Eletson Holdings, Overseas Shipholdings, Global Ship Lease.

Less Than Adequate: Navios Maritime Partners, Navios Holdings.

S&P underscores rating actions are currently not warranted as a rating committee should exercise the function.

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Feature

Lacks Infra and Qualified Seafarers In 2010, the UN’s International Maritime Organization (IMO) has decided that the STCW Convention will be amended every 5 year in practical amendment and every 10 year in comprehensive amendment.

IGF CODE NEXT

to minimize the risk to the ship, its crew and the environment, owing to the nature of the fuels involved.

Next amendments include IGF Code which provides the training and operation of ships using low-flash point fuel, mainly LNG fuel ships.

The STCW Amendments is in force 1 January 2017 and includes the IGF Code. The limited timeline underscores the lack of infras and qualified seafarers worldwide.

training on LNG fuelled ships training for both basic and advanced training.

Another important point is the qualification of the instructors, not only on LNG fuelled ship but also ice water navigation which is required. Not many are experienced in this new but mandatory requirement.

Basically, IGF Code takes the MARPOL Convention as environment protection measure; training and operational requirements from STCW Convention.

Nowadays, 49 LNG fueled ships are operated as coastal ferry, patrol vessel, tug and chemical tanker, none for commercial shipping. But on order are 62 LNG fueled ships launched until 2018 focused on commercial shipping like container and Ro-Ro vessels, gas carrier, PCC and bulk.

A presentation on this was made by Capt.

Naoki Saito, Manager of Certification Service Planning, ClassNK at the Simulation User Conference held in Singapore January 28th.

IGF Code sets up two types of training: •

Basic, mandatory for seafarers responsible for designated safety duties;

Saito explained new training requirements of the IGF Code is to provide mandatory provisions for the arrangement, installation, control and monitoring of machinery, equipment and systems using low flashpoint fuels, such as liquefied natural gas (LNG). This is

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Advanced, mandatory for masters, engineer officer and all personnel with immediate responsibility for the care and use of fuels on ships.

ClassNK may provide the latest information for maritime administrations, maritime training institutions, shipping company and simulator manufacturers to prepare for the implementation of amendments of STCW Convention.

In advanced training, at least one month of approved seagoing service that includes a minimum of three bunkering operations will be necessary.

Furthermore, two of the three bunkering operations may be replaced by approved simulator training. This is very important because it is difficult to have three bunkering operations within one month seagoing experience. Certainly, bunkering simulator training will be popular in advanced training.

Capt. Saito claims a practical method for demonstrating competence is simulator

ClassNK

4th PrimeManagement Cup Around 80 players competed February 17 at the Orchard Golf and Country Club, fresh from the PrimeManagement seminar held a day before at the Diamond Hotel, Metro Manila.

4th PrimeManagement Cup Winners

Class A 2nd Runner-up - Arturo Varela Class B Champion - Tomohito Takeuchi

Class B 2 Runner-up - Ryo Matsunaga nd

Low Gross Champion - Geok Seng Leong Class A Champion - Augusto Arreza, Jr. Class A 1st Runner-up - Tsutomu Harada

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Winners with EVP Fujiwara, Manila GM Kobayashi

Class B 1st Runner-up - Armando Morales

Class C Champion - Tatsuya Aburano Class C 1st Runner-up - Hiroshi Sekine

Class C 2nd Runner-up - Kokweng Leong

Nearest to Pin (Hole 14) - Augusto Arreza Jr.

Fun Hole Winners

Longest Drive (Hole 4) - Roberto Umali

Nearest to Pin (Hole 3) - Jose Melchor del Pilar

Longest Drive (Hole 18) - Takeshi Miyazaki

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