American Club Circular No. 30/1 6 1 JULY 21, 2016 CIRCULAR NO. 30/16 TO MEMBERS OF THE ASSOCIATION Dear Member: THE INTERNATIONAL GROUP OF P&I CLUBS: 2015/16 ANNUAL REVIEW The International Group of P&I Clubs, of which the American Club is of course a member, has very recently published its 2015/16 annual review, a copy of which is attached for Members’ ready reference. The document is available on the International Group’s website at www.igpandi.org and is also being posted on the Club’s own website at www.american-club.com. 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 2015/2016 23 KE Y FACTS 01 Total entered tonnage in the Group Clubs now exceeds 1.08 billion GT. 04 Annual world fleet growth has remained steady at 4% over the last three years. 07 The STOPIA and TOPIA voluntary oil pollution compensation agreements have been in force for a decade. 08 Claims pooling arrangements between mutual P&I Clubs date back to 1899. 05 The global order book has fallen 12% by vessel numbers and 8% by GT since the beginning of 2016. 02 The UK Insurance Act 2015 will enter into force on 12 August 2016. 06 29 States, representing just under 60% of the world fleet, are now signatories to the Nairobi International Convention on the Removal of Wrecks. 03 Piracy incidents and successful vessel captures continue to decline year-on-year. 04 Chairman’s Statement 08 Executive Officer’s Statement 10 Pooling and Reinsurance 12 Sanctions 14 Maritime Labour Convention 18 Places of Refuge – EU operational guidelines 20 UK Insurance Act 2015 22 Cargo Liquefaction – the challenges continue 25 On the Radar CONTENTS 45 The shipowners’ liability cover provided by the Group Clubs, and through the Group’s claims pooling and reinsurance arrangements, is a key factor in enabling world seaborne trade, the protection of the marine environment and of the interests of both public and private victims of maritime accidents. Furthermore, the spread of risk across Club’s mutual tonnages, and the cost efficiency of the collective reinsurance purchases, delivers significant benefits to the shipowner members of the Group Clubs. TONNAGE CONTINUES TO GROW 2015 saw further growth in total Group entered tonnage, which increased from 1,047 billion GT as at August 2014 to 1,088 billion GT as at August 2015. 1 Source: Clarksons World fleet growth over the past year has remained broadly static and, according to Clarksons in 2015, it was just under 4%, down from the highs of between 7% and 9% annual growth in the 2000s. In addition, new building deliveries over the past year show a marked reduction in all vessel sectors. After a significant decline in demolition activity in the second half of 2015, scrapping has now resumed to around same levels as it was a year ago. CHAIRMAN’S STATEMENT Group owners’ tonnage 1200 1000 800 600 400 200 0 GT Millions ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 25 20 15 10 5 0 US$000/day Shipping Cycle 2010-2016: ClarkSea Index (The ClarkSea Index is a weighted average of the earnings of Tank