American Club Circular No. 15/17 1 JUNE 5, 2017 CIRCULAR NO. 15/17 TO MEMBERS OF THE ASSOCIATION Dear Member: THE INTERNATIONAL GROUP OF P&I CLUBS: 2016/17 ANNUAL REVIEW The International Group of P&I Clubs, of which the American Club is of course a member, has very recently published its 2016/17 Annual Review, a copy of which is attached for Members’ ready reference. The document is available on the International Group’s website and is also being posted on the Club’s own website. It contains a review of several of the most important issues with which the International Group has been collectively engaged over the preceding twelve months. It is hoped that Members will find it to be of considerable interest speaking, as it does, to the very broad range of activity with which the Group concerns itself on behalf of the shipping community throughout the world. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB annual review 2016/17 2 annual review 2016/17 ContentsKey Facts (SOURCE: CLARKSONS) 01 CHAIRMAN’S STATEMENT4 02 EXECUTIVE OFFICER’S STATEMENT 6 03 REINSURANCE10 04 MARITIME LABOUR CONVENTION 200614 05 LARGE CASUALTY OUTREACH PROGRAMME18 06 AUTONOMOUS SHIPS 20 07 OIL POLLUTION 22 08 CLUB CORRESPONDENTS 24 09 PIRACY 26 10 ON THE RADAR28 TOTAL MUTUAL TONNAGE IN THE GROUP CLUBS NOW EXCEEDS 1.27 BILLION GT AT APRIL 2017, THE WORLD FLEET COMPRISED JUST UNDER 94,000 VESSELS TOTALLING 1.272 BILLION GT THE NAIROBI WRECK REMOVAL CONVENTION NOW HAS 34 CONTRACTING STATES THE CAPTURE OF THE PRODUCT TANKER “ARIS 13” OFF SOMALIA IN MARCH 2017 WAS THE FIRST SUCCESSFUL CAPTURE IN THE REGION IN FIVE YEARS THE AMENDMENTS TO THE MARITIME LABOUR CONVENTION 2006 ENTERED INTO FORCE IN JANUARY 2017 THE SUEZMAX OIL TANKER “TORREY CANYON” WAS SHIPWRECKED OFF THE WESTERN COAST OF CORNWALL, ENGLAND, 50 YEARS AGO ON 18 MARCH 1967 THE AMERICAN CLUB CELEBRATES ITS CENTENARY IN 2017 3 annual review 2016/17 4 There is, however, some cause for optimism to be derived from the significant growth in 2016 in global seaborne trade, with Clarksons reporting that the volume of trade added in 2016 matched the historical high levels of the boom years of the 2000’s. The annual rate of growth is now settling to around 2-3% and 2016 saw a respectable recovery in the dry bulk sector after a very poor performance in 2015. SHIPOWNERS SUPPORT THE SYSTEM Group-entered tonnage increased by just under 4 % during 2016, and remains around 90% of the world fleet, a testament to the continuing attractiveness and efficiency of the mutual system in delivering the best solutions for shipowners’ P & I needs. THE PAIN IN SPAIN Notable events in 2016/17 include the “Prestige” Spanish supreme court ruling, delivered in 2016, which cut through the traditional rights of shipowners and their insurers to limit liability pursuant to the widely adopted international maritime convention regimes. The implications of this decision, by a state which has signed up to the CLC and IOPC Fund regimes are, for shipowners and marine underwriters in particular, very far reaching. Although the litigation has not reached the end of the road, and is unlikely to do so for some years, the decision demonstrates the need for concerted action by shipowners, their insurers and the IMO and IOPC Funds. These groups need to encourage states to not only sign up to the international convention regimes, but also to respect and apply these consistently within their te