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Polar Shipping: A 2014 Recap

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By Captain David (Duke) Snider, FNI FRGS
The year 2014 was indeed one of intriguing activity in the Polar Regions. The maritime world and public in general began the year captivated by the almost hourly updates from the Russian ship Akademik Shokalskiy, captive in the Antarctic Ice.  
 
Antarctic CaptivityIt certainly wasn’t the first time a ship had become beset in polar ice conditions, nor will it be the last. What caught the attention of the world was that modern technology and the thirst for a moment in the spotlight prompted regular Internet postings by blog and other means highlighting the “plight” of the ship from several onboard.  French and Chinese light icebreakers attempted to close the distance between open water and the beset ship but could not get sufficiently close to break her out. Even the United States Coast Guard’s Polar Star was diverted to assist. The decision was then made to fly a helicopter from the Chinese ship Xue Long to repatriate the hapless high paying passengers and “science party”. A short time later, having never declared a distress, and knowing the ice conditions would change, the Master and crew steamed clear of the ice under their own power. In the end, the Australian government shelled out nearly $2m Australian in “rescue efforts”. Shortly after the Akademik Shokalskiy steamed clear of the ice, the Russians felt the situation had been so distorted as to its danger in the press that a formal statement was made at IMO making it clear that the Akademik Shokalskiy and her crew were well suited to the conditions, and at no time in danger and that the Master of the vessel did not declare distress.

The Polar Code

The playing out of the Akademik Shokalskiy incident became a backdrop for more frenzied efforts at IMO to finalize drafts and meet Secretary General Koji Sekimizu’s desire for a mandatory Polar Code as soon as practicable.  

Throughout 2014, various committees, sub-committees and working groups struggled to finalize consensus-based drafts of a Polar Code; however, the Secretary General’s strict timetable demanding an adoption before 2017 unfortunately resulted in the gradual streamlining of the initial robust drafts. In order to meet the timelines set down, issues that were remotely contentious or not subject to almost total consensual agreement were watered down or omitted.  

Many parties were disappointed to see a much weaker document evolve into what was finally approved by the Maritime Safety Committee (MSC) in November. Others leapt to declare a new age of safety and environmental protection for Antarctic and Arctic waters. 

Come the end of 2014, the Polar Code was still some way from actualization. The entire Part II – Prevention of Pollution must still go through the Maritime Environmental Protection Committee adoption, then the Council must approve both parts submitted by MSC and MEPC. Still, given the SG’s direction, there will be a mandatory Polar Code in existence by the first of 2017; however, it will not be the powerful and robust direction it was originally envisioned to be.  

As a result, many classification societies and flag states are already issuing “guidance” to close gaps that have been left by the leaner “more friendly” Polar Code. The Nautical Institute is moving forward with their plans to put in place an Ice Navigation Training and Certification Scheme to meet basic requirements of the human element chapter of the Polar Code with defined standards of training and certification.

Ice Conditions

Climatically, 2014 was more in line with 2013 as a heavier ice year overall in the Arctic this summer. This followed a particularly bad year in the North American East coast, where heavier ice trapped ships and lengthened the icebreaker support season into May. In the Arctic, conditions were much tougher than the low record years of the past decade that led up to the last two. No one with any real understanding of global climate change would suggest that 2013 and 2014 can be held as the “end of global warming”; however the variability experienced shows that it will not be easy-going for polar shipping in the near future and that ice conditions will continue to wax and wane.

Polar Traffic

Traffic in the Polar Regions still has not met the expectations of some over-optimistic forecasts. The Northern Sea Route (NSR) experienced a dramatic reduction in traffic this year. Less than two dozen full transits were reported and initial figure indicate only 274,000 tons of cargo moved compared to 2013’s 1,356,000 tons. Though ice conditions in the NSR were somewhat more difficult in 2014, conditions were heavier in the Canadian Arctic. 

Notably absent this year was an expected repeat Northwest Passage transit by Nordic Bulk after their landmark Nordic Orion voyage in 2013. Fednav’s latest arrival, MV Nunavik, did however make a westbound transit late in the season.

Routine destination traffic, which includes the resupply of Arctic communities and export of resources, continues to show incremental increases in both the NSR and Northwest Passage (NWP). However there has been some cooling of interest in hydrocarbon exploration over the past year, whether it is as a result of sanctions against Russia for their activities related to Ukraine, or uncertainty of regulatory environment in American waters.  

In the Antarctic region, traffic statistics remain static, driven mainly by research, resupply of research stations and the occasional adventure cruise vessel.

Ice Ship Orders and Construction

The growing interest in polar ice shipping is being felt in ship orders and construction. Numerous ice class ships are on the order books, and some notable orders and deliveries are those of Nordic Bulk with their Baltic ice class new builds and Canada’s Fednav with delivery of their newest icebreaker cargo ship Nunavik. The latter made news with the first unescorted commercial cargo vessel transit of the Northwest Passage this summer.  

Russia has announced and commenced the construction of their new design conventionally powered icebreakers as well as three LK60 nuclear powered icebreakers. Russia is also building a number of icebreaking search and rescue vessels to meet their commitment to increase SAR capability after wholeheartedly embracing the Arctic Council’s 2010 Arctic SAR agreement.  

At the beginning of the year, Russia took possession of the novel oblique icebreaker, Baltica.  Shortly after delivering the Baltica, Finland’s Arctech Helsinki Shipyard announced a contract to build three icebreakers for the Northeast Sakhalin oil and gas field. Perhaps the largest Russian driven high ice class construction is the DSME designed 170,000m3 icebreaking LNGCs to be built for LNG export from the new Yamal field. These ships will be operated by a number of companies including SOVCOMFLOT, MOL and Teekay over the life of the Yamal project. A fleet of six support icebreakers for port and channel clearing, as well as line support in heavier coastal ice will also be built. Three more ice class shuttle tankers were ordered from Samsung Heavy Industries by SOVCOMFLOT for delivery by April 2017.

China is building a new icebreaker to complement their secondhand Xue Long, delivery in 2016; Britain has begun the work to acquire a new 130m icebreaker for delivery in 2019; Australia intends to replace the Aurora Australis hoped for by 2018 with the bidding narrowed to three contenders in the fall; Germany is not far behind in plans to replace the venerable Polar Stern; and, Finland has a new Baltic LNG fuelled Icebreaker under construction and has announced a billion Euro plan to replace their current fleet of icebreakers in coming years. 

India has also announced plans to build a polar research icebreaker to be operational before the end of the decade. Columbia has announced plans to build and send an ice-capable research ship to Antarctica while Chile’s president announced in December plans to build an ice-capable research ship for Antarctic service as soon as practicable.

Though the American built light icebreaker research vessel Sikiluaq entered service this past year, the United States and Canada continue to be mired in indecision or delays with respect to ice-capable ship construction. There are no clear plans to consider replacing the ageing United States Coast Guard’s polar class ships, and Canada’s much vaunted announcement of the acquisition of the new generation polar icebreaker, which was named by the government as the John G. Diefenbaker, has seen cost increases and delays in delivery. The original delivery of 2017, for the Diefenbaker has slid to the right, first to 2020 and now rumored to be 2022.  Reports now indicate the original construction cost of $750m CDN has climbed to well over $1.2B CDN. Given the advancing age of Canada’s venerable icebreaking fleet, it is surprising that only one replacement has been approved.  

The Royal Canadian Navy’s plans to build 6-8 ice-class Arctic Offshore Patrol vessels has experienced similar cost overruns and delays even before steel has been cut. News reports at the end of 2014 indicated the number of ships that could be obtained would likely be fewer than originally announced, and only three vessels could be built for the allocated budget.

Changes in Arctic Offshore

Russia’s almost frantic growth in Arctic exploration and exploitation over the past decade has taken a downturn in the past months. As a result of increasing sanctions put in place by European Union, the United States and other nations, and the rapidly dropping price of oil in the last weeks of 2014, Russia has either seen the gradual pulling away of western partners, or has terminated contracts themselves (such as the recent termination of contracts with Norwegian OSV operators), and reduced projections for hydrocarbon export. As a result, hydrocarbon exploration and exploitation activities in the Russian Arctic began to slow in the latter part of the year.   

In the midst of pullbacks from exploration, Russia has continued to bolster their Arctic presence, opening the first three of ten Arctic search and rescue centers in 2014, taking delivery of the first of six icebreaking search and rescue ships and increasing naval presence capability.

Risks Remain Evident

Just as the situation with the Akademik Shokalskiy indicated in the Antarctic in the beginning of the year (in the latter part of the Antarctic shipping season), an incident with a Northern Transportation Company Limited barge adrift in the Beaufort Sea at the end of the Arctic shipping season highlighted the remote nature of polar shipping operations.  In each case, the situations were exacerbated by the lack of nearby rescue resources. While the Akademik Shokalskiy eventually broke free on her own, the NTCL barge was left to freeze into the ice over the winter as the tug initially towing was unable to reconnect and no other resources were close enough to recover the nearly empty fuel barge.

Discovery of the Wreck of HMS Erebus

One long standing search and recovery mission did result in a very successful search this year as the Canadian Coast Guard ship Sir Wilfrid Laurier and onboard researchers from Canadian Hydrographic Services and Parks Canada discovered the well preserved remains of Sir John Franklin’s flag ship HMS Erebus in the waters near to King William Island in the Canadian central Arctic.  

Under command of Sir John Franklin, HMS Erebus and Terror set out from England in the mid 1800’s in what was thought to be the most technologically advanced and therefore “bound to be successful” effort to discover and sail the Northwest Passage. Tragically, both of Franklin’s ships became hopelessly trapped in the ice, the crews eventually abandoned both vessels and were never seen alive again. Most of the Canadian Arctic was charted in the many searches at sea and from ashore in search of survivors, many relics were discovered including a note that described the abandonment, but the vessels themselves remained lost until this summer when HMS Erebus was discovered.

This post originally appeared in The Maritime Executive.

Global Analysis

Je Suis Charlie

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As editors at CIMSEC we primarily deal with the realm of maritime security, not satire of French culture & society. However, the ultimate purpose of our study is the securing of peace – the kind of peace in which people may enjoy that bounty of freedoms, including speech and press, which we often take for granted and that are so anathema to civilization’s enemies. Those enemies murdered 12 French citizens in cold blood – 10 Charlie Hebdo staffers exercising their freedom of speech, and 2 heroic police officers, one of whom was a Muslim himself, defending it. Sometimes that speech is polite, many times it’s rude – but only our freedom’s protection, never its censure, is ever worth a fight. To that end, we publish two choice covers from the Charlie Hebdo magazine – if for no more reason than that the terrorists who went on a rampage in Paris hated them, and as a sign of solidarity with those showing they will not be pressured by such barbarity.

As we reflect, remember that though the watchwords are, “Je Suis Charlie” (We Are Charlie) – we are not. We have never had our places of businesses firebombed for what we do, and carried on nonetheless. Zealot murderers do not know most of us by name, nor do they know where to find us personally. Remember that the lessons we learned from this massacre must be more than this moment of chest-thumped, but ultimately safe, solidarity.

– Matt, Scott & Chris

charlie-hebdo-no1163-011014

*If Mohammed returned…
*I’m the prophet, idiot.
*Die, infidel

 

o-OVERWHELMED-570

*Mohammed overwhelmed
*It’s hard to be loved by idiots

South Pacific/Oceania

Nauru: A Lesson in Failure

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Have you ever heard of Nauru? This small island of the South Pacific is not very well-known but its story could be representative of the one of humanity.

A little history

Nauru was formerly called “pleasant island” and if it may have been really pleasant, it is no longer the best tourist destination.

With its 21 square kilometers for less than 10 000 inhabitants, it is the second smallest state in the world after the Vatican.

As many islands in the South Pacific, Nauru was colonised by a European state in the 19th century. The German Empire settled in the small island to make it part of its protectorate of the Marshall Islands.

During this time, the Australian prospector Albert Fuller Ellis discovered phosphate in  Nauru’s underground. Phosphate is widely used in agriculture and is an essential component in fertiliser and feed.

After contracting an arrangement with  the German administration, Ellis began mining in 1906.

But soon, WWI happened and Australia, New Zealand and the UK took over Nauru and started administrating the island and its phosphate. In 1923, the League of Nations gave Australia a trustee mandate over Nauru, with the United Kingdom and New Zealand as co-trustee.

Then the Japanese troops occupied the small island during WWII. It’s only in 1968 that Nauru gained its independence, shortly after buying the assets of the phosphate companies. This enabled Nauru to become one of the richest island in the South Pacific.

All Used Up

Between 1968 and 2002, Nauru exported 43 millions of tons of phosphate for an amount of 3,6 billions Australian dollars. But 21 square kilometers is a small area to have mines everywhere and now there is no phosphate left.

The Land of the Fat

In the meantime, people of Nauru started having access to a lot of money and  to live the American way. Apart from phosphate, there are very few resources on the island. Therefore, most products were imported, including big American cars and fat food. It did not take long before inhabitants of Nauru  became the most obese people in the world, which led the British journal ‘The Independent’ to call Nauru ‘the land of the fat’. Indeed, according to the World Health Organisation, 97 percent of men and 93 percent of women in Nauru are overweight or obese.

Those people who used to eat fish, coconuts and root vegetables now eat imported processed foods which are high in sugar and fat. Now, more  than 40% of the population is affected with type 2 diabetes, cancers, kidney and heart disease.

Money, Money, Money

In the 80’s, Nauru was very rich. However, soon, growing corruption, bad investments and big spending on the government’s side made Nauru a very indebt country.

Nauru’s bank accounts are all in Australia, simply because there are no banks in Nauru (the only one left, the National Bank of Nauru is actually insolvent). In October 2014, an Australian court ruled that Nauru owed 16 million Australian dollars to US-based investment fund Firebird, which had lent money to the government of the small island. But  the government of Nauru did not respect the  court’s decision and it defaulted on the bonds. Since it did not reimburse Firebird, its debt soon amounted to 31 million Australian dollars. Firebird had then prevented Nauru’s government from accessing its bank accounts held in Australia and had frozen all of Nauru’s acounts. Nauru’s administration immediately warned that it was about to run out of cash and that it could not pay for essential goods, such as generator fuel, and public servant salaries. It would have been a national disaster because from the 10% people who have a job in Nauru, 95% are employed by the government. Nauru’s unemployment rate is estimated to be 90 percent. The government clearly needed money to buy fuel to produce energy, since it did not invest in renewable energies. Without fuel, no possibility to have a functioning hospital or to have fresh water, because sea water is pumped and then desalinated, a process that needs lot of energy. And without fuel, all the planes stick to the ground.

Finally, Nauru merely won the court case and did not have to repay Firebird. Is this decision linked to the fact that Nauru hosts Australia asylum-seekers in a detention center? Maybe. If all the planes stick to the ground, that means that the center is no longer running; every day, new asylum seekers come and  go, and so do doctors, lawyers and others.

Furthermore, the Asian Development Bank (ADB) declared that although Nauru’s administration has a strong public mandate to implement economic reforms, in the absence of an alternative to phosphate mining, the medium-term outlook is for continued dependence on external assistance (mainly from Australia and China). In 2007, the ADB estimated  Nauru GDP per capita at $2,400 to $2,715. That’s not a lot!

Public enemy n°1

In the 1990s, Nauru became a tax heaven and started selling passports to foreign nationals.

It led the inter-governmental body based in Paris, the Financial Action Task Force on Money Laundering (FATF), to add Nauru to its list of 15  non-cooperative countries in its fight against money laundering. Experts estimate that Nauru triggered a $5 trillion shadow economy. According to Viktor Melnikov, previous deputy chairman of Russia’s central bank,  in 1998 Russian criminals laundered about $70 billion through Nauru. The island  started suffering the harshest sanctions imposed on any country, harsher than those against Iraq and Yugoslavia. European banks did no longer allow any dollar-denominated transactions which involved Nauru. This is why in 2003, under pressure from FATF, the government of  Nauru introduced anti-avoidance legislation. The result was quick: foreign capitals left the island. Two years later, satisfied by the legislation and its effects, the FATF removed Nauru from its black list.

The difficult relationship between Australia and Nauru

There is a very special relation between Australia and Nauru. Australia administered Nauru  from 1914 to 1968. However, Nauru did not seem entirely satisfied with the Australian administration. Indeed, in 1989, Nauru took legal action against its former master in front of the International Court of Justice (ICJ). Nauru was attacking the Australian way of administrating the little island and in particular Australia’s failure to remedy the environmental damage caused by phosphate mining.

You can find the judgement here.

In 1993, Nauru and Australia notified the ICJ  that, having reached a settlement, the two parties had agreed to discontinue the proceedings : Australia had offered Nauru an out-of-court settlement of 2.5 million Australian dollars annually for 20 years.

In 2001, Australia asked Nauru to help it fight immigration. The two countries signed an agreement  known as “the Pacific solution”. In exchange for an important economic aid, the small island of 21 square meters agreed to host a detention center for people seeking asylum in Australia. This agreement officially came to an end in 2007 but the two countries are still looking for a solution to help Nauru’s economy survive. Which means the detention center is still running.

Furthermore,  we know that a significant portion of Nauru’s income comes in the form of aid from Australia. In 2008, Australia committed €17 million in aid for the 2009 financial year, along with assistance for “a plan aimed at helping Nauru to survive without aid.”

In November 2014, the Australian independent Tasmanian MP Andrew Wilkie wrote to the International Criminal Court (ICC) asking it to investigate Abbott’s government for crimes against humanity over its treatment of asylum seekers .

Abbott’s government has consistently argued that its offshore processing and resettlement policies have stopped people attempting to arrive in Australia by boat and therefore saved lives. For the moment, asylum seekers who arrive to Australia by boat will be refused visas and the ‘Pacific Solution’ is implemented; under this policy, asylum seekers arriving without authorisation are sent to Australian-funded detention camps in Nauru or the island of Manus in Papua New-Guinea rather than being allowed to claim asylum on the Australian mainland. In September 2014, Canberra paid 40 million Australian dollars to the government of Cambodia for Phnom Penh to welcome asylum seekers from Australia. Furthermore, a new legislation from September 2014 will make it harder for asylum seekers already in Australia who arrived by boat to make visa applications.

Nauru’s diplomacy

After having sold many passports, the Nauru’s government decided to communicate on positive actions.

In 2008, immediately after Kosovo declared independence from Serbia, Nauru recognised it as an independent country.

One year later, along with Russia, Nicaragua, and Venezuela, Nauru recognised Abkhazia and South Ossetia, two breakaway regions from Georgia. After a war with Georgia, Moscow had tried to secure international recognition for the two regions. According to the Russian newspaper  ‘Kommersant’, Russia gave $50 million in humanitarian aid to the little Pacific state.

Nauru is Kiribati’s neighbour, an atoll famous for disappearing and for sending the first climate change refugees abroad, to Fiji. With no space left to grow food or to live, no fresh water and always more refugees coming, the people of Nauru might also desert their island soon.

Hopefully, the story of the small island of Nauru will not be a sample to the history of humanity’s little island orbiting the sun!

Alix is a writer, researcher, and correspondent on the Asia-Pacific region for Marine Renewable Energy LTD. She previously served as a maritime policy advisor to the New Zealand Consul General in New Caledonia and as the French Navy’s Deputy Bureau Chief for State Action at Sea, New Caledonia Maritime Zone

Asia-Pacific, Cyber War, Podcast

Sea Control 64 – North Korea, The Interview, and Cyber Warfare

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seacontrol2We discuss North Korea, “The Interview”, and Cyber Warfare on today’s podcast. CIMSEC regular writer Jake Bebber joins us along with ASPI’s Hayley Channer and Klée Aiken join us for the discussion and a special end segment on Bond villains and 60’s fun fairs.

DOWNLOAD: Sea Control 64 -North Korea, The Interview, and Cyberwar

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