BC Shipping News - September 2012

INSIDE: B.C. PORT ACTIVITY UPDATE

BC SHIPPING NEWS

Volume 2 Issue 7

www.bcshippingnews.com

September 2012

Commercial Marine News for Canada’s West Coast.

International trade

The Trans-Pacific Partnership: Where’s the beef?

Industry insight Don Krusel, President & CEO, Prince Rupert Port Authority: Turning the tide of history

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September 2012

Volume 2 Issue 7

Contents

On the cover: Fairview Container Terminal, Port of Prince Rupert Photo courtesy of Prince Rupert Port Authority

Cover Story - P.20

There’s more to port progress than competition: Ray Dykes reports on B.C. port activities.

Photo credit: Ray Dykes, PR Plus

10 Industry insight Turning the tide of history Don Krusel has a lot to smile about these days. With billions being invested in port infrastructure and new business ventures, Prince Rupert’s time has finally come.

32 Search and rescue

West Coast SAR (Part Three) In this third of a three-part series, Joe Spears looks at “black swan” events and the preparedness of Canada’s SAR regime from a mariner’s point of view.

44 Tugs & barges

The passing of the log carrier The extent of Syd Heal’s knowledge of the West Coast shipping industry is unparallelled. Syd’s article on the fate of the log carrier — right up to the recent departure of the Haida Brave — proves the point.

D E P A R T M E N T S

F E A T U R E S

Don Krusel

6

News briefs / industry traffic

18

History lesson

26

Supply chain

28

International trade

36

Polar shipping (I)

39

Polar shipping (II)

40

Legal affairs

42

Maritime law

48

Marine engineering

51

Maritime security

Letters to the editor and news That girl in the harbour

By Lisa Glandt

CN teams up with B.C. Gateway partners The Trans-Pacific Partnership: Where’s the beef? By Darryl Anderson Skating on thin ice: The IMO Polar Code — By Jeffrey J.Smith Arctic navigation — a summary of Captain Duke Snider’s workshop Limitation of liability in maritime claims: The unbreakable limit remains broken — By David S.Jarrett A conversation with Professor Edgar Gold — By Jane McIvor Another top-notch class of marine engineers from BCIT Conference focuses on topical maritime security issues September 2012 BC Shipping News 3

September 2012 Volume 2/Issue 7 Publisher McIvor Communications Inc. President & Editor Jane McIvor

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Darryl Anderson Lisa Glandt Michael Gurney David S.Jarrett Jeffrey J.Smith

Contributing Writers Ray Dykes Dr. Edgar Gold Syd Heal Don Krusel K.Joseph Spears

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EDITOR’S NOTE It came by sea and I can’t live without it

T

he title of this editorial note is not original — it comes from the IMO’s Day of the Seafarer campaign back in June, but is such an appropriate slogan for this issue of BC Shipping News with our focus on ports. This saying — “it came by sea and I can’t live without it” — is a good reminder of how much we (i.e., the global “we”) are dependent on the safe, efficient and environmentally sustainable movement of goods that we use throughout the day (check out the video on Youtube, it’s really well done).

It’s more than that though. There’s the other side: “We sent it by sea and it has sustained our economy and provided me with a well-paying job.”

While British Columbia has been “blessed by geography”, as aptly noted

by Don Krusel, President & CEO of Prince Rupert Port Authority in our interview on page 10, we’ve also been

blessed with strong leadership in the port sector.

The ability to manage the growth that drives our economy is no small feat and, as you’ll read in the articles we have herein, that growth is gaining momentum. The number of records being broken at ports throughout the province is astounding — and it’s not just the two big ports of Vancouver and Prince Rupert. Nanaimo, Port Alberni, Port McNeill, etc., are all reporting record volumes.

This isn’t happening by magic. The fact that we’re in a position to take advantage of this increased volume is a testament to the leadership we are currently enjoying.

I for one would like to say ‘well done’.

— Jane McIvor Member of:

International Sailor’s Society Canada

September 2012 BC Shipping News 5

INDUSTRY traffic Two new members for GVHA Board of Directors

T

from the United Kingdom (FCCA) and Australia (FCPA, CA, CIA, FIIA). He holds two graduate degrees (Master of Business Administration and Master of Accounting).

Previously, John was a board member of the Princess Margaret Hospital Foundation in Australia for 14 years, helping raise funds to improve the quality of care for sick children.

GVHA also announced that Bill Wellburn has been elected as an

independent director to the Board. Bill returns to the Board with vast financial knowledge and history of GVHA which will be invaluable assets to the organization as they plot their future direction.

Bill is a chartered accountant and University of Victoria graduate who has served on many community and business boards. Bill is the current Chair of Coast Capital Savings and the past Chair of the Provincial Capital Commission.

Photos courtesy of Greater Victoria Harbour Authority

he Greater Victoria Harbour Authority welcomed John Doyle, Auditor General of BC, to its Board of Directors. Prior to his appointment in 2007, he was the Deputy Auditor General responsible for all assurance operations within the Office of the Auditor General of Western Australia. John previously held several academic positions.

John is a Chartered Accountant (CA) and also holds designations

John Doyle.

Mustang Survival announces new Commercial/Industrial Business Development Director

M

ustang Survival recently announced the appointment of Shannon Ward to the position of Director of Recreation & Commercial Business Development.

Ward has been the Director of Recreation Business Development since 2009, leading the company’s strategic business development partnerships and long-term strategy for the market. Now, with adding responsibility for the commercial and industrial markets to her portfolio, she will work closely with industry veteran and Director of PRO Sales, Mike Grupa, to foster the development of key partnerships within the commercial and industrial communities.

To learn more about Mustang Survival and its commercial and industrial solutions, visit www.mustangsurvival.com/professional.

Bill Wellburn.

Photos courtesy of Mustang Survival

6 BC Shipping News September 2012

NEWS BRIEFS Online at www.bcshippingnews.com...

BC Shipping News is more than just the magazine you receive in the mail. We’re constantly working to provide the most comprehensive coverage of the West Coast commercial marine industry and this means you’ll find more exclusive articles and up-to-the-minute news posted on our website. Here are just two examples of exclusive stories found only at www.bcshippingnews.com.

North American ECA update: Chamber of Shipping WCMRC spill exercise demonstrates readiness of B.C.’s workshop provides answers to respond to marine oil spills st rior to the August 1 implementation of the North s part of its certification program, Western Canada American Emission Control Area, Captain Stephen Marine Response Organization (WCMRC) is required Brown and the Chamber of Shipping hosted a panel to demonstrate to Transport Canada its capability and session, giving the marine industry an opportunity to learn preparedness to handle various oil spills. The oil spill exerabout and discuss issues such as the delay of Canadian legis- cise program is carried out over the three-year certification lation; supply; compliance in the U.S.; and compliance plans period. This past summer, WCMRC and a host of stakeholdof other shipping sectors, like cruise. ers and observers gathered at the Delta Town and Country Panel members represented the supply industry (Tony Inn in Delta, B.C. to undertake a tapletop exercise to respond Brewster, Marine Petrobulk); government (Captain John to a spill of approximately 10,000 tonnes (10 million litres) Yeung, Transport Canada Marine Safety and Security), the in Haro Strait. cruise industry (Greg Wirtz, North West and Canada Cruise The exercise was conducted on a real-time basis and events Association); and the U.S. shipping industry (T.L. Garrett, and challenges were presented at a realistic pace and with Pacific Merchant Shipping Association). a realistic scenario. Participants — more than 100 in total Even though the legislation is delayed in Canada, ship — were a diverse group, representing all levels of governowners and operators are being encouraged to comply during ment, First Nations, emergency response organizations and this interim period, likely to last until the end of November a variety of marine industry sectors. The hypothetical spill 2012. This summary — exclusive to www.bcshippingnews. involved a grounded barge on Kelp Reef with a breached hull. com — gives a comprehensive update on all of the issues you BC Shipping News provides the full story with photos online should be watching. at www.bcshippingnews.com.

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September 2012 BC Shipping News 7

INDUSTRY traffic Peninsula Waste Water Services joins Tervita family

8 BC Shipping News September 2012

Photo courtesy of Tervita

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eninsula Waste Water Services, along with other CCS Corporation companies, including Hazco, Concord, Beck, and HMI, are now part of the Tervita Corporation — a leading privately-held North American environmental and energy services company with $5+billion in revenues.

Established in 1997, PWWS has operated an oily wastewater and waste oil treatment facility at the Federal Government’s Esquimalt Graving Dock in Victoria, B.C. The facility treats and disposes of oily water, bilge water, waste fuel, waste oil and sludges for the shipyards working in the Graving Dock as well as visiting cruise ships, naval vessels and freighters. The facility also handles hazardous, regulated and nonregulated wastes.

In 2008, PWWS was purchased

by HAZCO Environmental Services, a division of CCS Corporation. The

Still servicing the marine industry, PWWS now operates as Tervita. partnership allowed PWWS to explore new growth and innovation in the marine industry.

In March of this year, CCS Corporation united more than a dozen

business units under Tervita Corporation — a dynamic new brand offering a comprehensive suite of services covering every stage of the production lifecycle, production services, energy marketing and reclamation offerings.

Tervita President and CEO John Gibson said of the transition: “Our vision is to create a better future by growing our global leadership in environmental and energy solutions.

We’re developing new technologies and processes to address today’s challenges such as water treatment, tailings management and reclamation.”

Despite being a new brand name, the 25-year history of Tervita’s roots makes for an interesting story, one that BC Shipping News will include in a future issue when we look at the business of waste management and, specifically, how PWWS is leading the way on the West Coast in marine services and disposal/recycling solutions.

INDUSTRY traffic ClassNK releases world’s first Harmonized CSR Software First classification society to support new shipbuilding rules

C

lassNK (Chairman and President: Noboru Ueda) has released the world’s first software package for use with the new International Association of Classification Societies (IACS) Harmonized Common Structural Rules (CSR) for bulk carriers and oil tankers, which were released at the beginning of July 2012. The release makes ClassNK the first classification society to release Harmonized CSRcompliant software for use by the maritime industry.

IACS’ new Harmonized CSR have been widely anticipated as the next step in shipbuilding requirements, not only unifying the existing CSR for bulk carriers and tankers, which were introduced in 2006, but also incorporating the IMO’s Goal Based Standards (GBS) with the aim of further rationalizing shipbuilding regulations. In order to incorporate input from industry groups and end-users, IACS released the first draft of the rules for public comment on July 1, 2012.

ClassNK Executive Vice President Takuya Yoneya, who oversaw the leading class society’s development of the new software, says that the Harmonized CSR will have a major impact on shipbuilding and design: “As a new set of global requirements for the industry, new software will be essential for yards and designers to efficiently test and implement the new rules. By releasing this new software for use with the first draft of the new Harmonized CSR, we hope to make it easier for yards and designers around the world to familiarize themselves with the new requirements, as well as make use of the rules for new ship designs.”

The new software is not just an update but a complete renewal of ClassNK’s existing CSR software, which is widely used at shipyards around the world. “Our goal with this new software,” says Dr. Yoneya, “was to incorporate not only our extensive experiences with the CSR, but also the insights and opinions of leading shipyards and designers in the development process.”

As a result, in addition to strengthening features included in ClassNK’s existing software, the new Harmonized CSR software provides brand new functions such as a “Case Study” tool which allows users to rapidly assess the effects of changes to the parameters of initial ship designs, as well as a new function to automatically generate 3-D models for hull structural analysis directly from rule calculation data.

The new software is not only able to make use of data produced by existing CSR software, but has also been designed to smoothly integrate with all major 3-D CAD/CAE software systems and ship performance calculation

software, making data transfer between systems an easy process.

“This new software is not just a calculation tool, but a total design support system,” says Dr. Yoneya. “Thanks to the new features and tools included, we are confident that this software will not only support the development of safer ships, but also improve design quality, and increase the speed of the ship design process.

In order to support the implementation and testing of the first draft of the Harmonized CSR, ClassNK is providing its new software at no charge to shipyards and designers around the world.

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September 2012 BC Shipping News 9

INDUSTRY INSIGHT

Photo courtesy of Prince Rupert Port Authority

Turning the tide of history

D

on Krusel has a lot to smile about these days. As President & CEO of the fastest growing port in North America, Krusel keeps careful watch as billions are spent on infrastructure upgrades, foreshore development and logistics supply chain improvement. It wasn’t that long ago that the board of the Prince Rupert Port Authority (PRPA) was facing some tough decisions on the port’s future.

Call it fate, destiny or, more likely, strong leadership, Prince Rupert’s time to shine has come. For anyone familiar with Prince Rupert’s history — and the way fate has had a funny way of keeping growth just out of reach — it’s a pleasure to see success come their way.

BCSN: PRPA is enjoying unprecedented growth — could you describe the catalysts for this?

DK: There are two waves to explain the growth: the first was related to converting Prince Rupert into a container gateway for the inbound movement of high value goods. Our advantage is that we’re the shortest land/sea link between the heartland of North America and Asia. In about 2004, the industry was experiencing a tsunami wave of containers hitting the West

10 BC Shipping News September 2012

Don Krusel, President & CEO, Prince Rupert Port Authority Coast and there wasn’t sufficient capacity in the system for it. Prince Rupert had an action plan to bring on capacity in such a way that we could move containers very quickly and efficiently right through from the West Coast to the North American heartland without being blocked by local traffic.

Prince Rupert had an action plan to bring on capacity in such a way that we could move containers very quickly and efficiently...

Just as the Fairview Container Terminal was being completed (in 2007), we experienced a second wave of growth in outbound goods to China and Asia. China is maturing as an economic society — the middle class is growing at 40 million per year with an urbanization rate that will see 350 million Chinese over the next 20 years moving to urban centres. This puts a big demand on the import of commodities like coal (which is really driving some of our numbers now), potash, lumber products and soon to be energy products such as LNG. So

we are preparing for that — it’s going to be much bigger than what we’ve experienced so far.

We’re also watching the progress of the Trans-Pacific Trade talks. Canada cannot be left on the sidelines of this.

Anybody in the transportation sector, especially in port development can only applaud free trade agreements and anything that levels trade barriers.

BCSN: Could you provide some context in terms of the Port’s economic impact?

DK: Sure. In 2011, the PRPA saw record growth — our terminal operators processed a total of over 19 million tonnes, representing a 17 per cent increase over 2010; and saw total revenues for 2011 reach $26.2 million, an increase of over 33 per cent from 2010.

Our operations have directly created 920 full-time jobs in B.C. since 2009, bringing total employment from Port economic activity to over 2,300. The dramatic growth at Fairview Terminal in 2011, which saw total volume grow by over 20 per cent from 2010, has helped make Prince Rupert the fastest growing container port in North America.

BCSN: What about Prince Rupert’s overall performance compared to other ports?

INDUSTRY INSIGHT things in the past have worked against us, including the focus of attention on Vancouver. That’s not to say it wasn’t for good reason — there wasn’t sufficient volume and activity to support two gateways historically. Vancouver had a head start and had much greater political and social clout. Today, there are other factors that come into play — we have this new wave of activity that needs an outlet on the West Coast and there is a need for capacity development. Prince Rupert offers that.

Everyone is now recognizing that Prince Rupert offers a solution to Canada’s trade objectives to the Asia-Pacific...

If you look at the Asia-Pacific Gateway Corridor Initiative — the first priorities were really about unlocking bottlenecks and smoothing out congestion issues in the Lower Mainland. We don’t have congestion issues by virtue of how small the Port is and how vast the land area is but that still isn’t going to solve the problem. There’s going to be a requirement to move millions of tonnes of commodities through the West Coast and Prince Rupert actually has the land base to facilitate this kind of growth. Everyone is now recognizing that Prince Rupert offers a solution to Canada’s trade objectives to the AsiaPacific, and as a result, we’re getting a lot of attention and support.

For example, consider CN Rail’s role.

Because our container initiative was really a “trade corridor initiative”, it could not have been even considered unless CN was behind it and they have been there right from Day One. When we came up with the concept and presented it to CN — back in the days when Paul Tellier was the CEO — they gave it the green light. And when Hunter Harrison took over as CEO of CN in 2003, he was also an enthusiastic supporter of Prince Rupert’s plans.

That kind of support right from the top was really what enabled us to be successful. I can’t emphasize that enough.

We wouldn’t have invested a dollar if CN hadn’t been onboard.

We recently opened up the Port Interpretive Centre that displays Prince Rupert’s positioning in the world. We have one display that shows the routing of goods manufactured in Asia. It’s loaded in Shanghai, taken across the Pacific, then offloaded in Prince Rupert and railed to the retail marketplace in the Midwest. We’re trying to make the point that we’re just one cog in the wheel and it’s important to understand how we fit in to the world’s economic activity. It’s all about supply chain activity and integrating the entire supply chain.

We also have a graphic of our 2020 Vision model — to the supply chain manager, that’s the Mona Lisa. You can’t paint a nicer picture of what an

Photo courtesy of Prince Rupert Port Authority

DK: Prince Rupert has been one of the fastest growing ports for the last three years for containers and we’re growing at an average of 18 per cent per year. The overall general growth is in the three to five per cent range. Having said that, our denominator is small so in actual terms, Los Angeles/Long Beach is still growing with higher volume but nevertheless, we are experiencing considerable growth. I don’t know that there’s another container terminal that has gone from zero to capacity in five years and that’s basically what we’ve done.

One of the key factors in comparing Prince Rupert to other ports is that, because we are still an infant in our development, we have a lot of land for expansion and are able to meet the demands for the exports of Canadian and North American resources. As the closest port to Asia and the closest port to North American resources, we’re in a pretty idealistic position.

Comparing ourselves to the East Coast is difficult because of the different marketplace — where we focus on Asian trade, the East Coast deals with European trade and so are impacted more with the economic turmoil of the Eurozone. While there are no silos when it comes to world economics, and what starts in Europe can have rippling effects into Asia and China, Europe is a mature economy whereas China is still developing and requires the resources needed to accommodate the high rate of growth of their middle class.

BCSN: In Dr. Hick’s book, Canada’s Pacific Gateways, he writes: “The development of a port, regardless of how well it may be blessed by nature, is utterly dependent on the enthusiastic support of the transportation organizations operating in its access corridor. Almost as important is the support and favour of the government in power.” Could you put this into context of Prince Rupert’s current port development.

DK: That quote is a good example of the reality we’re experiencing right now. If you look at the last 100 years, there’s no doubt that Prince Rupert was on the short end of support and our growth was hampered as a result.

Prince Rupert is blessed with geography and cursed by history. So many

Left to right: Prince Rupert Mayor Jack Mussallem, Dr. William Hick and Don Krusel.

September 2012 BC Shipping News 11

Photo courtesy of Prince Rupert Port Authority

INDUSTRY INSIGHT

Don and Mayor Mussallem present a cheque from the Community Investment Fund (CIF) to the Prince Rupert Youth Soccer Association in June, 2012. integrated gateway should be and that’s the beauty of being a late-blooming port — we were able to learn about the challenges other ports experienced. We had a blank canvas and we asked ourselves how we could create the most effective, efficient and economical gateway in North America — that’s really what we’re creating. We’re in an enviable position — the critical mass is there for us to develop almost all at once. We started with a blank canvas and brought all of the forces together to enable us to do something pretty spectacular.

It spoke to incredible foresight — 80 per cent is being in the right place at the right time but the critical part is the last 20 per cent — that’s knowing you’re in the right place at the right time and planning for it — and that’s Prince Rupert right now.

BCSN: Could you provide an overview of the activity underway [Ed. note: for additional details on current activity in Prince Rupert, check out Ray Dykes’ article on page 20 in this issue].

DK: Over the next 10 years, there is going to be several billion dollars’ worth of expansion occurring in Prince Rupert and that’s if you don’t count the development of LNG facilities currently being investigated. If you count that as well, you’re suddenly at a whole other level — billions upon billions. In the near term, we’re going to be starting on 12 BC Shipping News September 2012

the Ridley Island Road, Rail and Utility Corridor — that’s a $90 million project that opens up over 1,000 acres of land and is the foundation of our 2020 Vision. This will accommodate bulk handling facilities for commodities.

Then there’s the Fairview Container Terminal expansion (about $250 million for the first stage and another $400 million for the second stage) which will bring us to two million TEUs per annum. We’ll also be breaking ground on the Ridley Road Connector next year — a private commercial road that links Fairview Terminal out to Ridley Island along the waterfront to avoid the issue of truck traffic that many other major container gateways experience. And, another element of the 2020 Gateway Vision is the development of an integrated logistics park to locate warehousing, distribution activity, stuffing and de-stuffing activity. This will take place all in one integrated location and connected by a six-kilometre private road.

CN Rail is investing in an additional rail siding — a $20 million project — that will allow for 12,000-foot trains to be handled, and just recently announced that they’ll be spending $155 million on the Northern Corridor with an expectation that volume through that Edmonton to Prince Rupert route will double by 2015.

And then there are a number of bulk terminals that will be developed over the next five years. Right now, Ridley Terminals coal facilities are undergoing a $250 million expansion and they are investigating a further expansion to increase capacity to almost 50 million tonnes annually.

BCSN: I see your 2020 Vision also includes short sea shipping.

DK: Yes, with our proximity to Alaska, we see some great opportunities to service that marketplace. Right now, the market is served through Puget Sound ports and all of that traffic is sailing right past our doorstep. It’s a marketplace that seems like a natural fit for Prince Rupert.

BCSN: And cruise activity?

DK: That has softened in the last couple of years but we see it coming back and we’re working hard to bring it back. The Alaska theatre is re-emerging after some policy decisions in Alaska (for example, a high head tax on cruise passengers) were reversed. One of the initiatives we’re looking at is a waterfront development right by the cruise dock that will serve as a tourist hub as well as a commercial and public gathering place.

While we have a very positive social licence, we also recognize that we can’t take that for granted...

It’s quite an ambitious and exciting development with a lot of new buildings and public access points that will enhance the tourism experience for cruise passengers as well as create a cultural centre for activities of the First Nations community. It will be a public location — that’s important because as the port expands, we’re seeing the loss of some of the waterfront that the community used and this is a way to give back some of that public access in an enhanced and enjoyable way. In terms of timing, we could see a start in 2013.

BCSN: I notice that in much of your communications, you take a keen interest in engaging the community.

DK: Yes, that’s very important for us. While we have a very positive social licence, we also recognize that we can’t take that for granted and if we don’t put

INDUSTRY INSIGHT Photo courtesy of Prince Rupert Port Authority

a lot of effort in right now to maintain it, it takes twice the effort to try to win it back. When we developed the container terminal, we got everyone together to look at the challenges that more mature ports face and what it would take to avoid some of those problems. The integrated logistics park, for example, we don’t want warehouses scattered all over Prince Rupert and so we are creating a platform to address that.

I remember when we built the container facility and had the grand opening in September 2007, Prince Rupert had a population of about 13,000 and we had 6,000 people show up for the open house at the terminal. The Mayor at the time had a speech which got everyone chanting “Phase Two, Phase Two”. If you opened up a container facility in Los Angeles, you wouldn’t get 700 people there and if you did, they’d all be carrying placards.

Back then, our social licence was easy to define — it was all about creating jobs and prosperity. The community was, economically, on its knees and on the verge of being a ghost town. I didn’t have people stopping me on the street to ask about environmental issues or viewscapes — it was “where can I apply for a job”. We see that changing and, while people are still focussed on jobs, they are more and more concerned about the environmental and social impacts of what we’re doing. So it gets back to making the effort to ensure that we don’t lose that social licence.

BCSN: Is that part of the reason why you were the first port on the West Coast to sign up for the Green Marine program?

DK: Because we’re growing and changing so fast, we needed outside assistance and direction to be able to ensure what we are doing is environmentally sustainable and Green Marine is an effective way for us to do that. It allows us to connect with people who can provide ready-made templates on proven best practices.

Some of the other initiatives that we’ve been able to implement to address sustainability include shore power for the container facility — the only one in Canada (and the equivalent of taking 800 automobiles off the road); and radiation detection screening — and again, the first in North America to have had

September 12, 2007 at the grand opening of Fairview Container Terminal. Left to right: Dr. Paul Evans, then Co-CEO & Chairman, Asia-Pacific Foundation; Don Krusel; David Emerson, then Minister of International Trade and Minister for the Pacific Gateway; and Mr. Dale MacLean, then Chairman, PRPA Board.

100 per cent radiation screening. We operate on a philosophy based on three pillars: safely, securely and sustainably and these initiatives speak to that philosophy.

We didn’t do these in response to any government regulation or requirement.

We want to be leaders in sustainability.

One only has to be in Prince Rupert to see the beauty and in spite of the fact that we’re growing to this huge size and at a phenomenal rate, we’re doing it in an appropriate fashion.

BCSN: Another aspect of community relations is First Nations partnerships.

Could you describe your efforts in that area?

DK: The container development project thrust us into the First Nations consultation process (with the Coast Tsimshian). Because nothing had really happened in Prince Rupert for decades, one forgot that when you’re expanding developments, you have to consult. It was a learning experience for us and at the end of that multi-year process, I think we came out the better for it. We have almost leap-frogged ahead of other ports because the agreement we negotiated with the Coast Tsimshian creates the foundation for future growth and activity. The framework agreement

is beneficial to us as a port because it creates a very high level of security to be able to expand and grow in the future. It’s also beneficial to the Coast Tsimshian because it ensures their participation in job creation, contracting opportunities and financial returns as a result of future growth and expansion. It has created a relationship that ensures all parties will work together to expand the activity of the port.

BCSN: What about some of the trends in port development? Are you seeing an impact from things like greater automation and technological advances?

DK: Automation will always be a trend in every industry because we’re always trying to do things faster and more economically, but the most significant trend in our industry is the growth of the logistics chain model.

Everyone is recognizing that you can’t work in a silo and all of the players in the entire logistics chain have to work collaboratively to succeed. The best example is the success of our container initiative — we couldn’t have done that without total collaboration with CN or our terminal operator.

If I could use the Asia-Pacific Gateway Corridor Initiative as an example, the strength of it isn’t so much the billions September 2012 BC Shipping News 13

INDUSTRY INSIGHT of dollars being put into projects but rather the collaboration of everybody to identify which infrastructure projects had the highest priority. If you go down to the U.S., they are most admiring of the fact that the APGCI gets everyone in Western Canada working with the same goals and objectives.

What we’re working toward is a “glass pipeline” where all clients and service providers...can look into that glass pipeline at any point from origin to destination.

In Prince Rupert we have a unique advantage — unlike larger ports who have competing terminals, competing railway operators and service providers — we’re starting from a small core and we’ve been able to create that collaboration. It’s much easier for the government to support something where all of the logistics chain providers in a particular gateway are singing strongly from the same song sheet. And that’s going to continue. It’s a sort of vertical integration — the more the terminal operators work collaboratively with the mine or lumber mill and then with

14 BC Shipping News September 2012

the transportation side, whether it be trucking or rail and the shipping line, the better the supply chain becomes.

What we’re working toward is a “glass pipeline” where all clients and service providers — the customer, the railroad, the terminal operator — can look into that glass pipeline at any point from origin to destination. We’re bridging the technology, the data and the various operational components to create that kind of transparency.

One of the other aspects of how Prince Rupert has taken advantage of some of the technological advances is, as we touched on earlier, how we were able to plan in much of the plumbing infrastructure from the start of our expansion. The radiation detection screening for example. A lot of other Canadian ports are now up to the same standard but when we first opened up, we were the only North American port that had 100 per cent radiation screening.

Incidentally, because of these initiatives and the leadership that Prince Rupert had in that security aspect, we were selected as one of the pilots (along with the Port of Montreal) for a Beyond the Borders initiative that will see cargos undergo one screening despite two borders. Starting this fall, Canada Customs and U.S. Customs will be

working collaboratively to process containers through Prince Rupert and this will be a perimeter clearance for all of North America. There will be no potential delays at the U.S. border for those goods moving through Prince Rupert as they come into the North American marketplace. The pilot will last for a couple of years but, once again, we’ll be ahead of everybody else because of that.

There will be no potential delays at the U.S. border for those goods moving through Prince Rupert as they come into the North American marketplace.

BCSN: I understand there are a number of other projects being considered for Prince Rupert in the future — LNG facilities, for example.

DK: Yes, we have two groups looking at sites for LNG facilities in Prince Rupert — one is British Gas and the other is a joint venture between Petronas from Malaysia and Progress Energy from Calgary. Both projects would be world-scale LNG facilities.

They’re spending millions right now to confirm geotechnical and engineering capabilities and are working with pipeline companies to route a gas pipeline to Prince Rupert.

There is also the Pinnacle Pellet Terminal. It’s in the final stages of an environmental review. The unfortunate aspect of that project is that it’s located in the inner harbour and close to residential developments and homes.

Because it’s a small scale development — between one and two million tonnes per year — the economics could not work to build it elsewhere on Ridley Island. You’d have to construct the pier a great distance from the shoreline in order to accommodate the size of vessels needed and the cost involved for that would turn it into a mega-project.

It would take tens of millions of tonnes of product to make it economical.

BCSN: I’ve heard it asked a number of times in the media why Enbridge didn’t propose a pipeline that would end in Prince Rupert instead of Kitimat. Do you have some insight into that?

DK: Enbridge is a pipeline company and there are no two ways to suggest

that the easiest and shortest pipeline routing to tidewater is through Kitimat — there’s another mountain range that separates us. Douglas Channel cuts its way through the last remaining coastal mountain range so to get to Prince Rupert you’d have to get that pipeline over it. However, I would suggest that the safest marine routing is through Prince Rupert while admitting that the most economical pipeline routing is to Kitimat. It’s an economic versus environmental versus ease of operation decision that was played out. Enbridge’s predecessor looked at both sites and decided on Kitimat.

BCSN: What about beyond 2020?

What do you see in terms of growth for Prince Rupert?

DK: It really will depend on whether there’s continued growth in the commodity sector. By 2020, China will be set with a flow of commodities and resources that will be able to sustain its growth. I’m not sure there’s going to be any major leaps — India might become a key player or Brazil for potash. After 2020 it will be sustained growth but nothing like the size and magnitude we’re facing over the next 10 years.

BCSN: Do you see either the Panama Canal expansion or a potential northern shipping route having an impact?

DK: I may be wrong but I think the Panama Canal expansion is going to be a “big yawn”. It will offer shippers and logistics providers more choice but I don’t think there is any pent up activity waiting for that hub to open up. It will have a greater impact the further south you go — Los Angeles/Long Beach will be affected to the greatest extent but even then it won’t be a huge impact.

All containers are not created equal — it’s what’s inside the container that really matters. Prince Rupert’s traffic is built on just-in-time, high-value automobile parts or consumable goods that need to be on store shelves quickly and it wouldn’t make sense for the shipper to divert just to save a few extra dollars.

For Vancouver and Prince Rupert it will be a non-event.

In the cruise sector as well, neither Vancouver or Prince Rupert are in a marketplace that have cruise activity through the Panama but you might see some larger vessels being repositioned September 2012 BC Shipping News 15

INDUSTRY INSIGHT for the summer season into the Alaska cruise theatre. From the perspective of commodities, there could be some benefits to moving routes — to service Brazil, for example, but they are rich in resources already (except perhaps for potash) and are well-serviced by East Coast ports.

BCSN: What about the northern route?

DK: There’s no certainty in that yet.

I don’t see anybody building a 20-year business model to ship through the

northern route. There are insurance issues, risk issues and infrastructure issues that have to be overcome and, quite frankly, we’ve got so many other things on our mind we’re waiting to see how that emerges. There might be some opportunities from a provisioning aspect as resource development opens up in the North but we haven’t seen much of that yet.

BCSN: One of the key issues facing all industry sectors today is the looming

About Don Krusel

B

orn and raised in Prince George, Don obtained a B.Ed. degree in History/Geography from the University of Victoria and his Masters in Business Administration degree from Western University in London, Ontario. He pursued a career in financial planning and analysis in the banking sector (he is a Certified Management Accountant) before moving to Prince Rupert.

“Both my wife and I were from smaller towns.

Prince Rupert wasn’t really on our list but we decided to try it for a couple of years…and we’ve stayed for over 25.”

Don started his career with the Port in 1987 as Manager of Finance and Administration and was appointed to the position of President and Chief Executive Officer in February of 1992. He is a past Director of the British Columbia Trade Development Corporation in Vancouver, the Western Transportation Advisory Council, the former Chairman of the Canadian Delegation of Ports for the American Association of Port Authorities and served as Chairman and Director of the Association of Canadian Port Authorities from 1999 to 2001.

In 1996 he was appointed by the then Federal Minister of Transport, the Honourable David Anderson, to Chair a Task Force to study the Northwest Transportation Corridor and is currently a Director of the Northwest Corridor Development Corporation which was formed as a result of the Task Force recommendations.

Don met his wife, Gail, while attending the University of Victoria. They recently celebrated their 33rd Wedding Anniversary. They have one daughter, Olivia, who is entering her second year of University.

Don, Gail and Olive Krusel.

16 BC Shipping News September 2012

retirement surge. What sort of impact will that have on Prince Rupert?

DK: Within the PRPA, we have a big challenge ahead in recruiting talent.

We’ve grown from less than a dozen to just under 50 employees in five years and we’re going to have grow even faster in the coming years should everything come to fruition. And it’s not just our organization but others who plan on locating and building facilities in Prince Rupert.

There’s a greater challenge to recruit professional talent into the hinterland than there is in the Lower Mainland.

All too often, professionals are married to professionals — you might be able to find an engineer, for example, who is interested in coming to Prince Rupert but their spouse might not be able to find a rewarding career. That’s the professional level — then with all of these construction projects, to get the trades and construction workers is also challenging.

Right now we’re at the tipping point.

For the longest time, there was pent up demand from the slowdown in the forestry and fishing industries and we were able to repatriate people from those sectors. Now, we know that the terminals are starting to find it more and more challenging and as they increase staffing levels, there are less people available for other businesses — the Safeway store or the bank.

Work is being done to address this — for example, the Pacific Gateway Skills Table. That project is working to identify labour gaps and what trades and professions are most needed. We also hope to work collaboratively with First Nations on these kinds of issues but it’s a generational thing that will need work. You can’t just reach into the First Nations community and pull out a skilled pipefitter. You have to plan years in advance. That’s the problem with this type of challenge. You can’t just suddenly create welders and yet, though you could see it coming years ago, no one was willing to put money into it. The trades require apprenticeship positions and the economic activity wasn’t there to justify it.

BCSN: Do you have any advice for the next generation looking to get into port management?

INDUSTRY INSIGHT DK: While certain skills — whether it be engineering or logistics management, finance or technical skills — are important to rely upon, you really want a person who has a big picture view of the world — someone who is knowledgeable and has an understanding of world events and how all of the economic forces either collide or dance in harmony and to anticipate what’s coming in the future.

At one point, as recently as a decade ago — Prince Rupert was a small, inward-focussed regional port where our opportunities and challenges were dependent on whether the sawmill up the line was cutting lumber or it was a good year for fishing. Today, it’s more important to look at world economic factors — the exchange rate or financing variables — things that are now driving Prince Rupert’s economy.

BCSN: Looking at your own career, could you describe some of the benefits as well as challenges?

DK: It’s a very exciting and yet demanding career. I have always enjoyed the fact that one has to become knowledgeable in so many different sectors — you have to understand the coal industry and the potash industry or forestry and grain and now, because of LNG, we have to get a new encyclopedia on the gas industry and the transportation of gas, both pipeline and liquefied form. It’s exciting and vibrant.

It’s extremely gratifying to be part of a gateway that is growing and seeing things materialize from concept to plan to drawings to reality and then operation. I still remember the feeling I had when I walked on the cruise dock for the first time — I remember looking down at my feet at the grated flooring and my mind went to the number of times I had looked over the engineering drawings and here I was standing on the structure.

Then seeing the first cruise ship come alongside — it was quite emotional to be a part of the entire planning and execution stage and actually see it happen and to be able to share that with the community.

I was there from the start of Fairview terminals — it was the vision we had of containerization and the whole Prince Rupert team really believed in the idea.

When we first posed the idea, people laughed — that was understandable because at the time because the business model for container terminals was that you had to be in a major metropolitan area with a large local market and we had none of that. Many experts and critics felt it wouldn’t be successful but we said that’s why we’re going to be successful, we’re building a true gateway corridor. It’s panned out quite well.

Just in the last while — and that’s perhaps why I’ve been up there so long — it really has been an interesting

challenge. I sometimes describe it as running a relay without knowing where the finish line is — and that’s probably a good thing because it’s lasted over 10 years and we’re always thinking that the end is just over the next hill. BCSN Ed.Note: For those who have not yet done so, read Dr. William Hick’s Canada’s Pacific Gateways for a fascinating and in-depth accounting of port development in British Columbia. The Port of Prince Rupert published the book which is available through www.amazon.ca.

About the Prince Rupert Port Authority

P

rince Rupert was built in the first years of the 20th Century as the railhead for the Grand Trunk Pacific Railway. Plans were drawn for a West Coast port of major stature and prime waterfront lands were reserved for port and railway development. The project’s principal promoter and GTP Manager, Charles Melville Hays, lost his life in the sinking of the RMS Titanic and by the time the last spike was driven in 1914, the railway-building era was drawing to a close and Canada was moving into economic recession. The GTP slipped into bankruptcy and shortly after the outbreak of war in 1919, it was absorbed by Canadian National Railways (today’s CN Rail).

For over 75 years, Prince Rupert’s fortunes lay in the fishing and forestry industries. In 1972, the Port of Prince Rupert was declared a National Harbour and by 1975, the construction of the first of its facilities, Fairview Terminal, was completed.

The building and continued expansion of Prince Rupert port facilities provided the impetus for development throughout Northwestern Canada and was an engine driving economic growth in this region. With the distinct advantage of being the closest North American port to Asia by up to three days, the Port of Prince Rupert is uniquely positioned as the shortest trade route with Asia with fast and efficient rail and road access (only 100 hours to Chicago). It is one of the deepest ice-free harbours anywhere in the world and one of the safest North American ports with easy access to international shipping lanes. Total land holdings are over 965 hectares, 14,000 hectares of owned harbour and a navigable waters footprint of over 350 kilometres of coastline.

PRPA is responsible for the overall planning, development, marketing and management of the commercial port facilities within Prince Rupert Harbour. With five worldclass terminals — Fairview Container Terminal, Northland Cruise Terminal, Ridley Terminals Inc., Atlin Terminal and Prince Rupert Grain, the Port of Prince Rupert is North America’s fastest growing port.

Vision: To be a leading trade corridor “gateway” between North American and Asian markets.

Mission: To develop and grow the Port of Prince Rupert in an economical, safe and environmentally sound manner.

For more information, please visit www.rupertport.com.

September 2012 BC Shipping News 17

HISTORY LESSON

That girl in the harbour

By Lisa Glandt

Librarian/Archivist, Vancouver Maritime Museum

B

urrard Inlet bustles with ships of all sizes and keeps tourists and locals alike fascinated by the harbour’s development and industry.

Amidst all this activity is the sculpture of a girl in a wetsuit, serenely watching the harbour from her perch on a granite boulder just off the northern shore of Stanley Park.

While often mistaken as a replica of Copenhagen’s Little Mermaid statue, she is actually a skin diver with flippers on her feet and a mask pushed up on her forehead.

She is known as Girl in Wetsuit, created by Elek Imredy after being commissioned in 1971 by the Harbour Improvement Society. While often mistaken as a replica of Copenhagen’s Little Mermaid statue, she is actually a skin diver with flippers on her feet and a mask pushed up on her forehead.

Imredy envisioned that the statue symbolized British Columbia’s modern spirit of exploration and specifically placed her so that she gazes out towards B.C.’s continental shelf. Imredy stated “She represents Vancouver’s dependence on the sea and the necessity to use the sea for the benefit of all.”

18 BC Shipping News September 2012

Elek Imredy was born April 13, 1912 in Budapest, Hungary. He received formal art training in Hungary before fleeing in 1956 and settling in Vancouver, B.C. in 1957. From 1965 to 1968 he taught evening courses at the Vancouver School of Art and Vancouver City College (Langara) with classes in drawing techniques and anatomy. He was one of the founders of the Western chapter of the Canadian Sculptor’s Society. In 1968, he married Doreen (Peggy) Lehti. During his career, Elek Imredy created many small sculptures for private, religious and educational institutions. He participated in numerous public exhibitions between 1958 and 1989 and his sculptures were exhibited across Canada, the United States and Europe. Major commissions were executed in bronze, wood, granite,

limestone, fibreglass and concrete.

Some of his more notable works include a life-size statue of Prime Minister Louis St. Laurent in the Supreme Court in Ottawa; a bust of archivist Major J.S. Matthews at the City of Vancouver Archives; a sculpture of Judge Matthew Begbie (Begbie Square) and Lady of Justice at the Vancouver Law Courts.

The woman who posed for Girl in Wetsuit was Vancouverite Debra Harrington, whose father Clyde was a professional photographer. Imredy initially modelled the statue in clay before he created a fibreglass replica.

VANCOUVER MARITIME MUSEUM Lisa Glandt has been the Librarian/Archivist for the Vancouver Maritime Museum since 2007. She started volunteering at the museum in 1999 sharing maritime stories with school children and now she preserves the stories. She can be contacted at archives@vancouvermaritimemuseum.com.

Photos courtesy of Vancouver Maritime Museum.

This version was then sent to Rome to be cast in bronze since he could not find a suitable foundry in Vancouver at the time. The rock base in the harbour was raised 30 inches so that the statue would sit above the water at high tide. On June 10, 1972, the statue was formally unveiled. Each year until his death in 1994, Imredy and his companions would return to Stanley Park and wait for low tide so they could clean the statue and then hold a birthday party for her on the shore, handing out birthday cake to those walking by on the seawall.

Girl in Wetsuit has become an enchanting landmark for visitors to Stanley Park and to the boats that enter the harbour. The Vancouver Maritime Museum is pleased to hold a collection of archival materials and artifacts related to the Girl in Wetsuit from the Imredy family. In honour of her 40th birthday, the VMM is currently exhibiting a collection of images and sketches that chronicle Elek Imredy’s process as he created Girl in Wetsuit.

Elek Imredy with the clay sculpture of Girl in Wetsuit.

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September 2012 BC Shipping News 19

poRTS

B.C. ports review:

There’s more to port progress than competition

By Ray Dykes

T

he “big C word” in Robin Silvester’s life these days is not “competition” as some might think, but “collaboration”.

As President & CEO of Port Metro Vancouver, the busiest export facility in all of North America, Silvester knows all about competition with the Ports of Los Angeles, Long Beach, Seattle, Tacoma, and even British Columbia’s rapidly rising star, Prince Rupert.

But his communication is peppered with talk of the need for collaboration if the premier Canadian port and B.C.’s crown jewel is to continue its current success.

After a record year in 2011 at 122.5 million tonnes, Port Metro Vancouver was racing toward another milestone performance at the half-year mark in 2012.

Silvester doesn’t have a crystal ball, but on current indications, he feels the year will end up three per cent over 2011 and that means another record for the port which handles over $200 million a day in cargo.

The greatest challenge he’s facing each day is dealing with this accelerated growth in a responsible way. “We have to balance the needs of Canada to trade with our local communities and their need for a sustainable life while minimizing the environmental impact of a growing port,” Silvester says.

“Collaboration must be at the heart of everything we do. Collaboration is the

20 BC Shipping News September 2012

key to building our economy and securing our future.”

Not that B.C.’s ports don’t have their critics at home and especially south of the 49th Parallel. Headlines from the recent United States Federal Maritime Commission (FMC) report on Canadian ports often highlighted talk of “unfair competition”.

Cautious optimism could well be the slogan of British Columbia’s major ports as they reflect over their half-year performance in 2012.

But some local marine experts are wondering “what’s all the fuss?”. The report couldn’t find any untoward, sneaky competitive action by Canadian ports and may just go down as a political fireball shot into the air to boost the support of certain U.S. Senators.

Silvester, who is also Chair of the Association of Canadian Port Authorities, issued a circumspect statement late in July pointing out that “Canadian port authorities operate as financially independent entities that compete effectively with ports across North America.”

He notes the FMC report found that carriers shipping cargo through Canadian and Mexican ports did not violate any U.S. law, treaty, agreement or FMC regulation and says this

underscores the importance of ongoing free trade between Canada and the United States.

“There’s no evidence to back up unfair competition and I hope the claims will suffer a timely death.”

He adds in the meantime that Canadian port authorities “will move forward with cautious optimism that healthy competition, as well as close cooperation, will continue to take place between Canada and the U.S., as it has for many years”.

In fact, cautious optimism could well be the slogan of British Columbia’s major ports as they reflect over their half-year performance in 2012.

Most are doing reasonably well, several have major infrastructure projects underway, and so far a slowdown in China hasn’t hurt trade too much.

There’s a frenzy of major projects — from oil sand pipelines to natural gas plants — as well as expansions and upgrades at several terminals.

British Columbia port capacity is rising to meet demand and if you want a blistering pace to highlight that growth, Prince Rupert has the statistics and the projects.

The port that, not so many years ago, followed one bad year with another has been the envy of its North American competitors over the past few years.

Ranked fifth among the top North American West Coast ports by volume at a record 19.3 million tonnes

PORTS in 2011, Prince Rupert fully expects to set another throughput record in 2012, according to Shaun Stevenson, Vice President, Trade Development & Public Affairs, for the Prince Rupert Port Authority.

And Stevenson has the ammunition.

At the half year, container movements through Prince Rupert’s expanding Fairview Terminal were up 79 per cent at 272,000 TEUs (20-foot equivalent units). Admittedly, the base is much lower than say Los Angeles or Long Beach, but the rapid growth in containers and the mounting popularity of the shorter, faster northern route to the U.S. Mid-West and its massive markets is not to be denied.

However, it’s not just containers spurring Prince Rupert along as coal is up over 14.5 per cent to the end of June and that’s after setting a record pace of 9.6 million tonnes in 2011 through the expanding Ridley Terminals. Grain is down six per cent, but is still seen as heading for a strong market year.

The recovering forest products industry is also sustaining hope in smaller ports, which once had booming export shipments of lumber and pulp and paper products. Raw log shipments figure more prominently today than a decade ago but there are signs that some smaller ports are re-inventing themselves through diversity rather than placing sole reliance on the forest industry.

Here’s how the major B.C. ports were faring at the half year: Port Metro Vancouver The leading port on the West Coast of North America continues to make huge strides. Last year, at a record 122.5 million tonnes, the export-heavy port that was built on bulk handling had its best year ever and more is expected in 2012.

To the end of June 2012, coal continued to lead the way as the largest single commodity shipped at just under 17 million tonnes and up over 10 per cent from the same six months of 2011. This performance was led by Westshore Terminals, which had a record six months at 13.4 million tonnes, underscored by a record month in May at 2.8 million tonnes. A six week partial shutdown at Westshore from October 1 will force adaptations as the facility takes out its remaining single coal car dumper and adds a new twin dumper and exit and entry train positioners, including an exit positioner for the existing twin dumper for the first time.

Westshore, which shipped a record 27.3 million in 2011, completed an earlier 16-day shutdown in late March to replace chutes on three key transfer towers and reported less impact on shipping than expected, even though the terminal was unable to dump any trains and one of its two deepsea

berths was idled. The upgrades will see Westshore’s throughput capacity rise from 29 to 33 million tonnes a year.

In the Inner Harbour, Neptune Bulk Terminals is also undergoing an equipment upgrade designed to swell its coal-handling capacity from 8.5 to 12.5 million tonnes. Neptune shipped 12.8 million tonnes in 2011 made up of coal, potash and specialty agricultural products in what was a record year for the North Vancouver facility.

Port Metro Vancouver continues to hold a dominant position for Canada when it comes to all other West Coast ports handling container traffic.

Port Metro Vancouver continues to hold a dominant position for Canada when it comes to all other West Coast ports handling container traffic. At the half, TEUs were up six per cent after being slightly down in 2011 at 2.5 million. Major items in the boxes were exports of lumber, wood pulp and specialty crops, while imports were led by household goods, construction and materials, and industrial, auto and vehicle parts.

Grain, specialty crops and feed were down five per cent in 2011, but so far in 2012 were showing signs of strength again, led by wheat and canola.

Autos, which took a beating in 2011 dropping 22 per cent to 298,113 units,

Photo credit: Ray Dykes, PR Plus

Westshore Terminal (with Deltaport in the background) had a record-breaking six-month total with 13.4 million tonnes of coal shipped.

September 2012 BC Shipping News 21

PORTS were bouncing back through June 2012 and were up 50 per cent.

Port Chief Silvester is confident cruise fortunes will also start to head back toward their past glory and welcome local economic impact. After a massive drop of over 300,000 passengers as cruise lines made adjustments in 2010, there was a 12 per cent boost in 2011 to 663,425. In 2013, Silvester predicts substantial growth in Vancouver as Disney Wonder returns after an interlude with rival Seattle.

Silvester says “we shot ourselves in the foot collectively by enabling growth in Seattle,” but with the cruise lines promoting the once highly popular Alaska cruises again, Port Metro Vancouver should be able to fight back.

Huge infrastructure projects underway in the port — from improved roads to rail overpasses — are expected to increase the speed of traffic and improve living conditions for local residents in the 16 municipalities around port lands and trade routes. Led by the province, the port is supporting efforts, Silvester says, to “unclog road, rail and marine bottlenecks across the Lower Mainland” with over $4 billion in projects slated for the next few years.

Prince Rupert The little port that could continues to shine and capture more and more attention. Its key Fairview Container Terminal is eyeing further phases of

expansion and should have its second phase underway by year’s end to lift container capacity to 1.2 million TEUs. This stage will add a second berth and another 15 acres to the terminal if operator Maher Terminals decides to go ahead as expected. Another phase is expected to take the TEU count to two million a year.

The rapid rise in throughput tonnage year over year mentioned earlier for B.C.’s second busiest port has Shaun Stevenson, the Prince Rupert Port Authority Vice President of Trade Development & Public Affairs, glowing these days with “things looking good right across the board.”

It doesn’t hurt, either, that there is $15 billion in capital projects at various stages of investment. Key among these is the $90 million Ridley Island Road, Rail and Utility Corridor, which is expected to start construction this year opening the door to further development on the island home of Ridley Terminals and Prince Rupert Grain.

There’s a new $30 million wood pellet or biofuel terminal proposed

by Pinnacle Pellets of Prince George now going through its environmental assessment stage, which plans to use an idle Westview Terminal site on the central waterfront.

But, the major projects are two LNG export facilities backed by two of the world’s leading natural gas

Photo courtesy of Greater Victoria Harbour Authority

Ogden Point in Victoria welcomed its four millionth cruise passenger in mid-August.

22 BC Shipping News September 2012

players — the British BG Group and the Malaysian government-owned oil and gas company Petronas. The separate facilities are at the site assessment and feasibility stage of their development leading to a decision to invest likely by 2014 or early 2015.

The only deflating note in a list of improving performances has been cruise ship traffic which has suffered a dramatic downturn from several years ago. In 2011, only 54,500 passengers called and in 2012 to date, only one large cruise ship and four smaller cruise vessels have docked.

The PRPA has improved infrastructure around the cruise facility and expects to attract more traffic as the popularity of the Alaskan cruise run regains some of its old vitality.

And for something different, the port did a heavy lift of pulp mill components from barge to the loading of a ship at anchor.

Kitimat The complex process of allocating available crown land for terminal facilities has the District of Kitimat in a waiting game. There’s lots of land around the private port that could be used and there are proposals for at least three private docks, says Mayor Joanne Monaghan, who is hoping the province will free some land up soon.

Currently, Rio Tinto Alcan owns two of the three private docks and Shell

Photo courtesy of Nanaimo Port Authority

Road salt continues to be a staple commodity for Nanaimo Port Authority.

PORTS

The idea is to develop Stewart as a port for the distribution of ore and logs and possibly for aggregate, but the venture is still in its early stages.

Stewart Another port with potential, this northernmost B.C. destination has one private dock still in operation, a barge terminal and a new Mayor, Glena Durant, who wants to create a “New World Port.”

The idea is to develop Stewart as a port for the distribution of ore and logs and possibly for aggregate, but the venture is still in its early stages.

The existing facility, Stewart Bulk Terminals, loads about one ship a month with shared zinc and copper cargoes trucked in from Yukon Zinc and Huckleberry Copper Mine. Part-owner and Superintendent, Roland Soucie, says in 2011 total tonnage reached over 135,000, with copper making up 85,000 tonnes, zinc 45,000 tonnes, and rock from a local quarry another 7,000 tonnes.

The bulk terminal is amid an expansion and this year plans to double its land size and improve its ship-side loading capability.

Victoria With its relatively new President & CEO, Curtis Grad, firmly at the controls, the good ship Greater Victoria Harbour Authority has ambitious plans that go beyond being B.C.’s busiest

Photo credit: Ray Dykes, PR Plus

Canada the other and their plans mean there is no spare capacity.

Seemingly always on the verge of something great, Kitimat has many suitors knocking on its door for use of its natural harbour and surrounding lands. These include rival LNG plants, pipeline proposals, an aggregate facility, and other projects as yet unnamed.

Late in July, the Consul-General of the People’s Republic of China toured the harbour and surrounds with B.C. foreign investment and local officials to see what is available for economic development.

“That sort of thing is starting to happen and it didn’t happen before,” says an enthused Mayor Monaghan.

Catalyst Paper’s private terminal in Crofton is back on stable footing following questions about its financial viability. cruise port on passenger and ship call volumes.

Grad says the Master Plan for Ogden Point is progressing beyond the original technical review and is now in its second phase — two consultants are doing a market assessment — to explore cruise and marine (non-cruise) opportunities.

“We see all kinds of demand from the market,” says Grad, who feels the GVHA will be at the final master planning stage by the first quarter of 2013.

Ogden Point has four deepsea berths largely used by cruise ships (up to five a day during the summer peak for the highly popular capital city), a passenger

helicopter base, and loads of onshore land that could be better utilized.

Cruise ships pay the bills for the harbour authority and in 2011 they didn’t disappoint with 206 cruise ship calls and over 435,000 passengers coming ashore to dabble in a wide variety of attractions and excursions led by visits to Butchart Gardens. Victoria recorded its four-millionth passenger in mid-August in what has become a “powerful driver” in the regional economy, says Grad.

This year, a record 229 cruise ship calls are booked involving 25 different vessels which will bring over 475,000 passengers and more than 200,000 crew ashore. In a jointly-funded project,

New brand for Nanaimo Port Authority

N

anaimo Port Authority unveiled a new look over the summer. “We had our old logo for close to 40 years — the braid of rope with the bastion in the middle,” said Doug Peterson, Manager of Marketing & Sales. “At the time, it represented Nanaimo’s place in the marine industry as well as the community.”

With the development of Path 2025, the NPA’s strategic plan which sets the path for the port’s infrastructure upgrades and modernization, it was agreed that a new image should be developed to accurately reflect future direction.

“The new logo, with a predominant ‘N’, resembles like the funnel of a ship and indicates a progression which ties in with our new path,” continued Peterson. “The bars running through it represent sea, land and air — the three areas where we have vested interests.”

The NPA enlisted the help of local graphic design instructor Nancy Page from the Vancouver Island University who provided a number of options for the port’s consideration. “The logo we chose reflected a modern image that mirrored our strategy,” said Peterson.

September 2012 BC Shipping News 23

PORTS floating dry dock operation; a log ship repair; and 11 yacht trans-shipments as the GVHA continues to pursue a more diversified future.

Crofton The private terminal facility owned

by Catalyst Paper at Crofton, north of Duncan, continues to handle over a half-million tonnes of pulp and paper in break bulk and short sea shipping each year.

In 2011, it totalled just over 600,000 tonnes and in the year to date (to June) it was ahead of that pace at 370,000 tonnes.

Served by Swire and Star shipping lines, the two-berth facility also barges forest products to Vancouver and Seattle. After some doubts over its future, Catalyst has resolved its financial viability and the mood is better with hiring underway, according to Director of Distribution, Gerry Roluff.

Tonnages this year are expected to be about the same at last year.

Nanaimo Once the busiest port on Vancouver Island for cargo, Nanaimo is undergoing somewhat of a resurgence as it seeks to duplicate tonnage volumes of a decade ago. With DP World now managing its cargo terminals at Assembly Wharf and Duke Point, the Nanaimo Port Authority is enthusiastically looking ahead.

In the first half of 2012, shipments were up 12 per cent over 2011, and NPA President & CEO, Bernie Dumas, says fortunes are starting to turn around

Photo courtesy of Port Alberni Port Authority

both the federal and provincial governments partnered with the GVHA to install a mooring dolphin 70 metres from the end of a 240-metre pier at Ogden Point to allow the handling of larger cruise ships up to 315 metres and accommodating 2,600 passengers.

Other plans underway by the GVHA include the upgrading of Fisherman’s Wharf, which should go through a rezoning by the end of the year to allow “a refinement of what’s already there”, says Grad.

The GVHA has named an anchor tenant for its CPR Steamship Terminal revitalization in the downtown by the B.C. Legislature with the highlyacclaimed Salt Spring Island artist Robert Bateman creating a gallery on one floor and the home office of his foundation on another.

The harbour authority has a longterm lease for the historic old building and hopes to convert it into a tourist attraction and natural commercial funnel into a new international ferry terminal planned for nearby. The Belleville International Ferry Terminal would bring all U.S. bound ferries together in one spot with a modern departure and arrivals concourse, but to date the funding and design have not been settled.

Non-cruise harbour activities have included ocean carrier hull cleaning in the main harbour channel; the return of a cable-laying ship and storage with Ogden Point as its base; a submarine

FRPD work on the installation of the breakwater off the end of Harbour Quay’s Argyle Pier in Port Alberni.

24 BC Shipping News September 2012

after years of being beaten up by falling forest product revenues and closing mills.

Shipments in 2011 almost topped the one-million tonne mark, largely made up of exports of lumber, pulp and raw logs at 807,802 tonnes. Imports of kaolin, road salt and fuel transfers made up the remaining 175,619 tonnes.

Year to date (June) figures show further gains over the same six months of 2011, with logs down only slightly at 389,536 tonnes; lumber up over 25,000 tonnes at 103,839; general cargo up slightly at 72,721 tonnes; and pulp reaching 3,992 tonnes after having no shipments at all in the same half year of 2011.

Cruise ship numbers haven’t taken off at the hoped for pace with the building of an attractive, permanent facility, which is now also the home of the port authority offices, but Dumas says 2013 will be better with nine large cruise ships visiting compared to four in 2011 and five this year. The port hopes to attract 20 to 25 per year by 2015.

With its wealth of global experience (it operates over 60 terminals), DP World is keen to start a container feeder service to Vancouver. Trials in June worked well and interest is growing, says Dumas.

Nanaimo has also seen increasing numbers of Vancouver-bound vessels stopping for anchorage in its harbour, netting enough revenue to at least cover the cost of running its patrol boats.

Meanwhile, the Pacific Northwest Marina Group has signed with the port authority to revitalize the aging downtown Nanaimo marina in a $9 million project over two years, and leading to a 30-year lease for the Sidney, B.C. group.

And in June this year, the port also discharged 55 wind turbines heading for Cape Scott in the north of the island.

This non-traditional cargo handling at Duke Point supports the port’s plan to make that facility the hub of its international and domestic freight business.

“We are starting to turn the corner after a number of years with pretty depressing numbers,” adds Dumas.

Port Alberni With a new CEO at the helm from early July in the form of Zoran Knezevic, the Port Alberni Port Authority continues

PORTS to feel its way into a new era of its history. Apart from raw log shipments and some lumber, the port would largely be a collection of marinas with some domestic fish traffic and short sea shipping cargo.

Port Alberni moved enough tonnage in 2011 to rank as the second busiest port on Vancouver Island.

Port Alberni moved enough tonnage in 2011 to rank as the second busiest port on Vancouver Island. The attractively situated port handled 1.5 million tonnes of both domestic and international cargo last year. In international tonnage, logs led the way at 864,936 tonnes, followed by lumber at 106,542 tonnes. Domestic tonnages involved largely logs at 500,955 and about 2,500 of miscellaneous coastal cargo.

In the year to date (June 2012), total exports of forest products are up by almost 70,000 tonnes at 467, 282 over the same six months of 2011.

There were two cruise ship visits in 2011 by Holland America Line, but none were scheduled for this year. The port is hopeful it will do better in the shoulder seasons of 2013 as a “unique, niche cruise destination” and has already confirmed HAL for one visit in May. The largest recent investment made by the port authority was for a reconfiguration of the floats at its China Creek Marina, including water and power for the first time for all boats. But, the most significant waterfront development in years will be the jointly-funded $8 million-plus Fishermen’s Harbour Project, with the addition of a 410-foot by 50-foot floating breakwater installed off the Harbour Quay’s Argyle Pier.

As well, Port Alberni is keen to play a role in the federal and provincial governments’ Gateway Port Initiative now involving only Port Metro Vancouver and Prince Rupert. It would take investment in its own and regional infrastructure such as road and rail links, but the port says it could help relieve bottlenecks at Port Metro Vancouver terminals in future, especially when opportunities in short sea shipping and break bulk cargoes are leveraged.

Port McNeill It’s an unlikely winner of the title of busiest facility on Vancouver Island, but Port McNeill holds that honour after shipping 1.6 million tonnes of aggregate to the U.S. in 2011.

Owned and operated by Polaris Minerals Corporation the single-berth terminal is on a pace to load 2.25 million tonnes or more this year as the construction market in the San Francisco Bay area and northern California finally lifts off.

“There are some seriously big projects underway from a new football stadium to rail expansion,” says Polaris President & CEO, Herb Wilson. He prides his operation on the fact that loading is so efficient by the 40 to 45 employees that typical shipments of 75,000 tonnes have been completed every time without any ship demurrage.

Ray Dykes is a former journalist who has worked his way around the world as a writer/photographer. Ray can be reached at prplus@shaw.ca.

September 2012 BC Shipping News 25

supply chain

End-to-end supply chain collaboration CN Teams up with B.C. Gateway partners

I

n an effort to make supply chain logistics effortless and give customers efficient and reliable service, CN has partnered with port and terminal operators to ensure that deliveries are seamless from depot to destination.

Whether that destination is in North America or overseas, these Service Level Agreements (SLAs) have made moving cargo through the ports easier, faster and more transparent. With more collaboration, better metrics, and faster handover times, CN is giving customers the ability to track shipments and manage their logistics for overall smoother deliveries.

The B.C. ports of Vancouver and Prince Rupert are key gateways for imports and exports from Asia. CN has direct connections to these ports and a network of over 21,000 miles of track to inland North American destinations, reaching close to 75 per cent of the

population. With expanding markets in Asia, CN and West Coast Canadian ports are ready to capitalize using the natural advantages that shipping through the Pacific North West offers.

Prince Rupert has the distinction of being the closest West Coast port to Asia by over three days travelling time, and the deepest inland harbour in North America, offering year round service. And CN’s rail line from Prince Rupert to Chicago is less steep, making the route more fuel efficient and cost effective for customers.

Lonny Kubas, CN General Manager for Asia, spends most of his time on the ground in Asia and the Canadian West Coast ports. He has seen traffic increase substantially in the last few years: “Companies are realizing the benefits of our coastal advantages and are getting on board. Being so close to Asia is one plus, but we also have the advantage of

our connectivity. Customers like being able to ship from Asia to Canada and still get to major U.S. markets using our strategically located intermodal terminals and facilities. We provide good service. We know our customers. We know the ports.”

CN has considerable presence in Asia and has recently started to focus on expanding its commercial scope in Vietnam and India. Vietnam is a growing competitor in the manufacturing and exportation of furniture, textiles, footwear, rice and coffee, as well as the importation of consumer goods and lumber. India is one of the world’s fastest growing economies and presents lucrative market possibilities. Both these countries offer exciting opportunities for CN customers. With a focus on supply chain, and first mile/last mile initiatives aimed at reducing transit times and improving efficiency, CN

Image courtesy of CN Rail

Not only is Prince Rupert closer to Asia by three days, CN’s rail line is less steep, making the route more efficient.

26 BC Shipping News September 2012

supply chain Photo courtesy of CN Rail

is well positioned to expand its world reach.

In May 2010, CN signed an agreement with Port Metro Vancouver that would give all stakeholders at the port access to information on service related matters. It would allow for better communication and provide a way of measuring key performance indicators in order to provide better service to customers at the port. In September 2010, CN, along with Maher Terminal and the Prince Rupert Port Authority, made a similar agreement. For the first time, the exchange of electronic data was allowed between all parties, giving a significant edge to logistics management.

For stakeholders, it has been a formidable partnership. For CN’s customers, it has been nothing short of remarkable.

Overall service improvements have been achieved and customers are taking notice. It has required hard work and teamwork. And this is just the beginning. CN is continuing to strive to be a complete supply chain enabler.

From left to right: Dave Bedwell, Executive Vice President COSCO Canada; Russ Perdue, Account Manager Intermodal CN; Louis Fedele, Account Manager Intermodal CN (retired); Liang Bo, President COSCO Canada; Peter Ladouceur, Assistant Vice President Sales & Marketing CN; Mark Schepp, Vice President and General Manager Maher Terminals; Charles Lau, Operations Manager COSCO Canada.

September 2012 BC Shipping News 27

INTERNATIONAL TRADE

Trans-Pacific Partnership: Where’s the beef?

By Darryl Anderson, Managing Director Wave Point Consulting

A

s readers of BC Shipping News were enjoying the Canada Day long-weekend, trade officials from nine countries were meeting in San Diego for the 13th Trans-Pacific Partnership (TPP) negotiating round.

On June 20, the day immediately after Ottawa had been invited to join these free trade talks, there was a spat of initial media coverage of the demands from the United States, Australia and New Zealand for unfettered access to Canada’s highly protected dairy and poultry markets. Surely there was more to this trade file than the prospect of cheep beef, dairy and poultry to grace and festoon our summer barbeques and plates. For this reason this article will seek to shed light on “where’s the beef” in terms of both the political agenda and substance behind Canada’s entry into the Trans-Pacific Partnership.

Political context Ms. Debra Steger, Professor of Law at the University of Ottawa, recently observed that the United States, the European Union and others, including Canada, have, for all intents and purposes, abandoned the World Trade Organization (WTO) as the primary focus of their trade negotiation initiatives. Ms. Steger asserts that “instead, the priority in developed-country capitals is on negotiation of preferential “new generation” economic and trade agreements with other major partners, 28 BC Shipping News September 2012

as well as plurilateral negotiations, such as the Trans-Pacific Partnership”.

The TPP has its origin in the equally slow and laborious dealings of the AsiaPacific Economic Co-operation Forum (APEC), a 21-member collective that seeks to promote free trade within and beyond the Asia-Pacific region. Canada, seeking to advance a free trade agenda and leverage its geographic location on the Pacific Ocean coastline, joined APEC in 1989. At that time, member countries included Japan, Indonesia, Australia, Brunei, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the United States.

Throughout the 1990s, other countries — including Chile and Vietnam — also joined APEC. In 2009, nine of APEC’s members hoping to expedite many of their goals created a new TPP forum to advance their trade interests.

The geographic location of the countries were as follows: a) The Americas: United States, Peru and Chile; b) Asia: Vietnam, Brunei, Singapore, Malaysia; and c) Australia/New Zealand.

By November 2011, it was becoming clear that there were a number of substantial trade policy topics well beyond simple market access for dairy and poultry that were being negotiated in the TPP even if Asia-Pacific countries such as Canada, China, Indonesia, Japan, and South Korea were not participants.

Canada initially opted not to join the TPP forum and it was not until

Prime Minister Stephen Harper’s Conservative Party was elected to a majority government in June 2011 that the federal policy approach began to change.

The Trans-Pacific Partnership defining features TPP trade officials have identified five defining features that, in their opinion, will differentiate this free trade agreement from other forums and boost the competitiveness of member countries. The five features are: • Comprehensive market access — eliminate tariffs and other barriers to goods and service trade and investment.

• Fully regional agreement — to facilitate the development of production and supply chains among TPP members.

• Cross-cutting trade issues — regulatory coherence, competitiveness and business facilitation, small and medium-sized enterprises and redevelopment.

• New trade challenges — promote trade and investment in innovative products and services, including those related to digital and green technologies.

• Living agreement — enable updating of the agreement to address future trade issues.

Mr. Jean-Michel Laurin, VicePresident, Global Business Policy for the Canadian Manufactures and

INTERNATIONAL TRADE Exporters stated that the “TPP is likely to become a blueprint for Asia” and the fact that the United States was a participant was also cited as being vital to Canada’s strategic trade interests.

The federal government perspective When asked to provide input on the issue, the Honourable Ed Fast, Minister of International Trade, Minister for the Asia-Pacific Gateway and Member of Parliament for Abbottsford, B.C. provided the following perspective for BC Shipping News readers: Over the past several years, our government has been aggressively expanding trade and investment ties throughout the fast-growing Asia-Pacific region to create jobs, growth and long-term prosperity for workers and families here at home.

As a Pacific nation, Canada’s interest in joining the Trans-Pacific Partnership (TPP) is consistent with our active, ongoing and growing presence in the AsiaPacific region.

Canada welcomes the support of the United States and all TPP member states for our participation in the TPP negotiations. This is an important step in an ongoing process that will provide Canada the opportunity to enter into the negotiations.

Canada looks forward to helping develop a 21st Century agreement that benefits all TPP countries, as a full and ambitious partner at the table.

Joining the TPP negotiations is a key pillar of Canada’s ambitious pro-trade plan and will strengthen our efforts to broaden and deepen our trading relationships with Asia-Pacific markets.

Strategic insights Ms. Laura Dawson PhD, President of Dawson Strategic, a consulting firm specializing in cross-border trade and market access issues, provided BC Shipping News with some valuable insights on the topic of the TPP. Ms. Dawson is the author of “Can Canada Join the Trans-Pacific Partnership? Why Just Wanting is Not Enough,” (CD Howe Institute, 2012).

Q) Why should Canadian exporters and importers care about the TransPacific Partnership when China is not included?

A) Most of Canada’s trade is with slow or no-growth mature economies

— the United States and Western Europe. The remainder is with emerging markets. Yes, China is the largest single emerging market Canada trades with but the TPP represents a promising aggregation of markets characterized by growth rates in the six to 10 per cent range, large populations, and young populations with a median age less than 30.

Furthermore, Free Trade Agreements (FTAs) with China seldom go beyond the basic provisions set out in the WTO. The TPP is dealing with new trade issues that have come to the fore since the North American Free Trade Agreement (NAFTA) including trade in services, labour mobility, government procurement, and trade regulations for state-owned enterprises.

Finally, by establishing a foothold with fast-growing Pacific economies, Canada can develop investment and supply chains, working with other TPP partners to service the Chinese economy, rather than compete against them. Canada currently has no other FTAs in the Asia-Pacific region.

Q) From a Canadian business perspective what trade policy irritants, or market access issues should the federal government be addressing in this trade forum?

A) The Organization for Economic Co-operation and Development (OECD) estimates that between six and 10 per cent of the price of a good is the result of regulatory costs including border delays, paperwork duplication, and complicated rules of origin. With up

to 40 per cent of global trade captured within a single TPP agreement, many of these costs can be reduced, providing a direct benefit to Canadian businesses.

Secondly, state-owned enterprises (SOEs) play a major role in the economies of new entrants to the trading world such as China and Vietnam. The TPP will contain provisions to ensure that SOEs abide by commercial rules of competition and dispute settlement.

Another market access benefit of the TPP is that Canada already has an established trading regime under the NAFTA with Mexico and the United States. This means that we already have similar rules for things like standards and technical barriers, investment, etc.

As the dominant partner in the TPP, it is quite likely that U.S. preferences will shape the final agreement. Canada and Mexico will have a competitive advantage vis-à-vis other TPP partners because we have already done the work required to integrate our trade and commercial policies with those of the United States.

Q) What is a possible timeline for a successful deal, and what impact do you think the U.S. presidential election this fall will have on the pace of negotiations?

A) Much has been made of the ambitious negotiating schedule of the TPP but it has probably been oversold in order to avoid comparisons to the endless rounds of WTO talks. An agreement by the end of 2012 will not be possible. An agreement by the end of

Photo courtesy of Department of Foreign Affairs and International Trade Canada

July, 2012, Minister Fast meets with stakeholders of the Asia-Pacific Gateway and Corridor Initiative. (L.to R.) Jon Somers, VP of Marketing, Canpotex; Andy Smith, President & CEO, B.C. Maritime Employers Association; Bob Wilds, Managing Director, Greater Vancouver Gateway Council; Yuen Pau Woo, President & CEO, Asia-Pacific Foundation of Canada; Kim Baird, Tsawwassen First Nations Chief; Minister Fast; Larry Berg, President & CEO, Vancouver International Airport Authority; Jon Garson, VP of Policy Development, B.C. Chamber of Commerce; and Ruth Sol, President, Western Transportation Advisory Council.

September 2012 BC Shipping News 29

INTERNATIONAL TRADE 2013 might be possible but the U.S. presidential election will serve to slow the process — at least temporarily — as will the potential admission of Japan. The focus on new issues will slow down the negotiations but the TPP parties seem ambitious and focused on a result, unlike the Doha Round that became paralyzed by deadlock.

Business community priorities Mr. Laurin emphasizes the fact that a renewed trade agenda presents the government with an opportunity to improve the effectiveness of the business community’s input, and better co-ordination by the government will help ensure that government policy outcomes are aligned with the priorities of Canadian firms.

The federal government seems to be heeding the advice of the Canadian business community on the need for improved consultation. In July 2012, Mr. Fast conducted a western consultation tour that focused on ways to build on Canada’s competitive advantages and further deepen trade and investment ties throughout the Asia-Pacific region. However, it appears that Canada’s trade consultation efforts fall short of some other TPP participants.

An Australian Department of Foreign Affairs and Trade (DFAT) official responded to a request for information.

Sam Kealey, Investment and TPP Section, Office of Trade Negotiations, indicated that the Australian federal government has completed ”a number of different activities in 2008 to obtain the perspectives of a wide range of potential stakeholders on a possible Trans-Pacific Partnership Agreement.

These activities included raising awareness through information on our website and advertising in national newspapers, consultations in each state and territory, meetings with interested parties and seeking submissions from stakeholders. Many of the submissions on our website are in fact from this period before negotiations started in March 2010. Over the period since 2008, DFAT has continued to interact with a wide range of industries and business, including through the submission process, formal consultations in states and territories as well as less formal discussions. Over 800 different stakeholders were invited to the initial Sydney consultations alone. Representatives from the port and logistics sector have periodically participated in the consultation process.”

Conclusion Canadian trade officials suggest that the current TPP membership represents a market of 510 million people and a GDP of $17.6 trillion. With the participation of Canada and Mexico, the market will comprise 658 million people and a GDP of $20.5 trillion. However, BC Shipping News readers are perhaps more interested in knowing how much attention should be devoted to the maritime commerce opportunities that may arise because of the TPP given the fact that most of our North American trade is land-based and already governed by NAFTA provisions.

To help answer this question, the chart in Figure 1 was prepared. It compares and contrasts Canada’s bilateral merchandise trade with an existing and potential TPP member country (Japan) with TPP members in South America and non-TPP member countries in Asia using Statistics Canada data for the period 2006 to 2011. Merchandise trade data for 30 BC Shipping News September 2012

Figure 1. Comparison of Canada’s bilateral merchandise trade with TPP and Non-TPP member countries. the United States and Mexico have been excluded from the analysis since these countries represent limited opportunities for more maritime commerce for B.C. ports.

The chart clearly shows that the bilateral merchandise trade with non-members of the TPP in Asia have had a significantly stronger growth rate than the TPP member countries in Asia or South America. This is no coincidence since non-TPP member countries include China, Indonesia, South Korea, Philippines, Twain and Thailand. The result of the TPP member countries would be even lower if potential member Japan was not included.

The above results strongly suggest that members of the B.C. port and shipping community should no doubt support the TPP initiative and hold federal politicians accountable for delivering results in markets that will yield both intermediate and long-term benefits.

Minister Fast observed that the federal government’s efforts “to deepen Canada’s trade and investment ties in the fast-growing Asia-Pacific region are being facilitated by our strategic investments and partnerships in building the AsiaPacific Gateway. Since 2006, our government has invested $1.4 billion into Asia-Pacific Gateway infrastructure projects, an amount that has been leveraged to almost $4 billion with the participation of provincial and municipal governments and the private sector.”

While it may be comforting for those in the transport and business community to think that the Asia-Pacific Gateway represents a single cohesive Canadian strategy towards Asia, analysis of international trade developments suggest that a more nuanced and multi-track trade policy would be appropriate since a great deal of our existing trade occurs with fast growing countries outside of the TPP process. By coming late to the TPP forum Canada has perhaps missed an opportunity to influence the negotiating process whereby other APEC countries could have been enticed to join.

Darryl Anderson is a Victoria-based maritime and transportation consultant. He maintains an active independent research practice focusing exclusively on maritime transportation and policy issues. Darryl can be reached at wavepoint@shaw.ca.

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SEARCH AND RESCUE

West Coast SAR...

Part Three: Black swans — marine mass rescue operations

By K. Joseph Spears

S

earch and rescue has been very much in the news recently with the announced closure of the Kitsilano Canadian Coast Guard Base but we will leave that issue for another time. In order to have this discussion on a black swan event (i.e., an unexpected, catastrophic event) we need to examine SAR from a broad ocean management perspective to see how all the components fit together. In this article, Part Three and final installment in our look at West Coast SAR, we examine Canada’s ability to respond to a mass rescue operation from the mariner’s perspective. It has been said that mass rescue operational planning is more critical than ever but often remains undervalued by SAR organizations who are “responders”, not planners.”

This article argues for more inclusive planning.

The United States Coast Guard has developed a comprehensive approach to Mass Rescue Operations (MROs) to “generate consistency, raise awareness, identify stakeholders and provide continuity between existing emergency plans”. The MRO Planning Guidance states: “The success of a MRO is contingent upon the seamless efforts of search and rescue agencies, the company, mutual assistance assets, and Good Samaritans. Success is also contingent upon effective plans and the 32 BC Shipping News September 2012

exercising of those plans.” There has been a recent series of MRO exercises in the various Coast Guard Districts around the United States (http://www. uscg.mil/pvs/Exercises.asp) and a full scale exercise called “Black Swan” will be hosted in April of 2013 involving a cruise ship.

Until the worst happens, we will never know, as a nation, if we are ready to handle a major incident like the Costa Concordia...

As a coastal nation, Canada has an obligation to respond to SAR incidents in its waters under the UN Convention on the Law of the Sea (UNCLOS). Canada participates in a number of international organizations such as the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), and has agreed to adopt search and rescue (SAR) standards and practices in accordance with the Convention on International Civil Aviation, the International Convention on Maritime Search and Rescue, and the International Convention for the Safety of Life at Sea (SOLAS). In addition it has reciprocal agreements with the U.S. for assistance.

Until the worst happens, we will never know, as a nation, if we are ready to handle a major incident like the Costa Concordia — a low-probability, high-consequence event. Black swan events are often characterized by initial surprise followed by rationalization and explanation after the fact. On the other hand, a “white swan” event is a predictable occurrence based on past history. Given the historical records of past marine casualties, major maritime disasters can and do occur and might be amply called white swan events.

Canada needs to be prepared, as part of its ocean management strategy, to deal with both black and white swan SAR incidents.

As stated in the Canadian National SAR Manual Annex 7B Major Maritime Disaster SAR Contingency Plan: “There is no fundamental distinction between a major maritime disaster and other maritime distress incidents except in scale, and in the scope of the response required.” That is why planning and training exercises by all parties involved in SAR on an ongoing funded and sustained basis is so critically important. Gaps identified in both real and tabletop exercises can be very helpful to SAR commanders and planners to develop and enhance a robust SAR capability buttressing Canada’s National Search and Rescue Plan and

SEARCH AND RESCUE the Major Maritime Disaster Plan for the Victoria Search and Rescue Region.

In 1986, the Government of Canada established a National Search and Rescue Program (NSP) — a co-operative effort by federal, provincial and municipal governments along with other search and rescue (SAR) organizations.

The objective of the NSP is to save lives by enhancing SAR prevention and provide effective and affordable services in Canada’s areas of SAR responsibility. As mentioned, the Department of National Defence is the lead department, assisted by dedicated SAR vessels of the Canadian Coast Guard and all government vessels with a secondary SAR response capability. The Victoria JRCC has the authority to charter vessels if required. A good example of this is the recent distress call from two crew members in a fishing vessel off Port Hardy who were allegedly physically threatened by the vessel’s master. The response came from a RCMP patrol vessel. Most Canadians don’t realize that, prior to the inception of the Canadian Coast Guard in 1963, the RCMP Marine Division provided much of the search and rescue capability on Canada’s coasts. This is the subject of a very interesting book recently published by the late Constable Kenneth John Haycock — The History of the RCMP Marine Services.

maritime distress incident or other distress incident occurring on the waters of the search and rescue region for which the rescue co-ordination centre is responsible, and of such scale that the federal search and rescue (SAR) system alone can no longer co-ordinate, control and respond to all aspects of the search for and recovery of survivors, and/or the preservation of life.

Normally in a major maritime disaster the number of persons in distress is unusually large and vital support from other agencies not normally party to, or used by, the SAR system is required.

With respect to non-governmental resources, the Annex further states: Civilian Resources — There are in Canada extensive resources available through civilian authorities or private companies and individuals for possible use in responding to a major maritime disaster. SRR commanders shall ensure that these are identified to the extent possible, and that adequate liaison is maintained to facilitate their effective participation in an emergency. Lists of key (single point of contact) personnel shall be available in the plan.

No one level of government or group has the funding or resources available to provide a complete comprehensive SAR response on a consistent basis to cover Canada’s 28,000-kilometre West Coast. It is almost impossible to provide all the necessary SAR resources in

the Victoria SRR to respond to all possible scenarios. A robust marine SAR response requires a comprehensive approach involving all levels of government and the private sector using the latest technology and local knowledge.

Co-ordination by the JRCC is key.

Being a world-class maritime nation requires fostering a “truth to power” discussion on our ability to respond to SAR incidents.

Being a “world-class” maritime nation requires fostering a “truth to power” discussion on our ability to respond to SAR incidents. The term “truth to power” was often used by the former commandant of the U.S. Coast Guard, Admiral Thad Allen, to allow people to challenge the status quo and raise issues and concerns in a free and open forum with decision makers. Anyone in the SAR community should not be afraid to ask the hard questions such as — “are we ready for a major maritime disaster?”

This includes officials of local government and First Nations up and down our coast who would be involved in a major incident. It also requires a full and frank discussion and dialogue of the risks and responses by all interested parties as well as regular SAR exercises. Annex 7 of

It is time for Canada to look at its preparedness to respond to its own black swan event.

It is time for Canada to look at its preparedness to respond to its own black swan event. In Canada, the National SAR manual sets out all of the obligations of the parties with respect to marine SAR and is a worthwhile read for any mariner interested in the subject. A copy of the document can be found at http://loki.cgc.gc.ca/cansarp/ sarmanuals/nsm.pdf. Canada’s Major Maritime Disaster response is set out in the National SAR Manual in Chapter 7 and requires each SAR region to have a SAR Contingency Plan as noted in Annex 7B: For the purposes of this plan, the term “major maritime disaster” means a

Is Canada ready to respond to an incident like the Costa Concordia if it happened here on the West Coast?

September 2012 BC Shipping News 33

search and rescue the National SAR Manual states at 4 (e): “Contingency plans, particularly those involving outside agencies, must be regularly subjected to formal exercises.”

In Part One of this series on SAR, we examined the Coast Guard auxiliary, now called the Royal Canadian Marine Search and Rescue (RCM-SAR) and the important role they play, especially in remote areas where they would typically be the closest SAR first responders. We also examined the importance of local mariners and their ability to respond when called to assist — this was well highlighted in The Boatlift, a video documenting the evacuation of 500,000 people by boat during the September 11 Twin Towers attack. That video is available for viewing at www. bcshippingnews.com.

In Part Two of our series, we looked at the importance of the Victoria Joint Rescue Co-ordination Centre (JRCC) and their capabilities as the lead in communication and co-ordination of all SAR resources. In a major marine

34 BC Shipping News September 2012

incident (or black swan event), this coordination, coupled with the experience and training of the JRCC, will allow for the optimization and allocation of scarce SAR resources. Response will need to be a seamless team effort — as happens every day with SAR responses in the Victoria SRR. The difference here is in the potential magnitude of the crisis, higher casualties and longer duration of the rescue operation.

This would be especially so on remote sections of our coast.

As one mariner stated in The Boatlift, we should never say “we should have”.

As one mariner stated in The Boatlift, we should never say “we should have”.

We need to continually build on and strengthen SAR response on the West Coast. It is in every mariner’s interest.

The professionalism of paid and unpaid SAR responders in the Victoria SRR

needs to be recognized and a mechanism developed to integrate their (and other interested parties) input on an ongoing basis. This will lead to great resilience in the SAR system. The same applies to the depth of a potential private sector marine response. We can learn from the United States Coast Guard’s comprehensive approach to Mass Rescue Operations and adapt this approach to Canada. For Canada to continue to be ocean strong with a worldclass SAR response, we need to plan and exercise to be ready for black and white swan events, “so others may live”.

Mariners helping mariners on our coast has always been world-class.

Joe Spears is the Principal of the Horseshoe Bay Marine Group and has developed marine crisis management training for various private sector firms.

He assisted Transport Canada in the Queen of Oak Bay incident outside his office in Horseshoe Bay in 2005. Joe can be reached at kjs@oceanlawcanada.com.

polar shipping

Skating on thin ice: The IMO Polar Code

By Jeffrey J. Smith Chair, National Council Canadian Institute of Marine Engineering

T

hree centuries after Europe’s search for a passage through Arctic waters began in earnest, the last frontier for the commercial shipping industry has opened up. The age of exploration and development in both polar regions is underway, marked by territorial claims to extended maritime areas, increased fishing, more direct navigation routes and retreating sea ice.

The increased presence of ships —and more ships of all types — in the Arctic and Antarctic Oceans has important implications for trade and governance.

How should the industry build ships for operation in high latitudes? What is the role of the coastal states involved?

How can the International Maritime Organization (the IMO) arrive at useful standards for the safe construction and operation of ships in ice-covered waters? Are polar waters so much different that safe navigation must be a matter of specific legislation and uniform standards? So far the consensus among industry, government and international stakeholders has been one of a specific geographic approach to regulating shipping in polar waters. The emerging vehicle for safe shipping is the IMO’s Code of Safety for Ships operating in Polar Waters — the Polar Code.

There are challenges to defining what is meant by polar and ice-covered waters, and who should be responsible for shipping safety in them. To begin with,

36 BC Shipping News September 2012

polar waters are generally considered to be the ocean areas at latitudes higher than 60° N and 60° S. In the Arctic, a large part of that area is in the territorial seas and exclusive economic zones of the six coastal states concerned: Canada, Russia, Denmark, Norway, Iceland and the United States. No such national jurisdictional regime exists for the Antarctic; the treaty system for that continent governs the presence of states and their activities, prohibiting territorial (and maritime area) claims.

Moreover, in the high north, ice-covered areas are found south of 60° N, for example in the Bering Strait area.

Further, the presence and risks from ice varies widely across polar areas.

For the moment, the IMO is satisfied to describe polar areas as being latitudes higher than 60°. The ability to regulate shipping in polar waters is related to these considerations because Arctic basin states do not act as coastal states given that foreign flag shipping does not use their northern ports to any great extent. In the Antarctic, the ability and interest of the states with outposts on the continent to regulate shipping is essentially non-existent.

Antarctica does not have commercial ports and few states with settlements are interested in shipping other than to sustain their presence. For the moment at least, and whatever the present standards to build and operate ships in

polar waters, the key players are vessel owners, flag states and classification societies. And the IMO.

There are challenges to defining what is meant by polar and ice-covered waters, and who should be responsible for shipping safety in them.

To understand the development of the IMO’s Polar Code and its implications for commercial shipping, a brief history lesson is useful. Events combined during the 1980s to give impetus to the growth in polar shipping. One was the 1982 United Nations Convention on the Law of the Sea (UNCLOS) which confirmed and substantially added to the offshore areas that could be claimed by coastal states, namely the concept of a national resources space 200 nautical miles into the sea known as the exclusive economic zone (EEZ) and, further offshore, the extended continental shelf. It is the latter area — which, with the EEZ, is not able to be claimed around Antarctica because of the Antarctic Treaty system — that has been the subject of much work in recent years. That is because Arctic coastal states had a 10-year time limit, either until 2009 for states which had signed UNCLOS before 1999 or, as in the case of Canada’s accession in 2003, a fresh

POLAR SHIPPING period of 10 years to complete seabed geology and bathymetric surveys to justify an “extended landmass” of a state’s continental area reaching more than 200 nm offshore. Canada’s claim is due to the UN Commission on the Limits of the Continental Shelf in late 2013.

...easing of tensions between states around the Arctic basin enabled cooperation for the creation of the Arctic Council...

A second impetus for increased shipping in polar waters was the end of the Cold War after 1989. This easing of tensions between states around the Arctic basin enabled co-operation for the creation of the Arctic Council (which, with the six states that border the Arctic, now includes Finland and Sweden).

The 1990s saw two wide-ranging environmental studies of shipping in the Arctic [the International Northern Sea Route Program (INSROP) sponsored by researchers in Norway, Russia and Japan, and the Arctic Operational Platform Project (ARCOP)]. They came out of the 1991 agreement of Arctic states to the Rovaniemi Declaration, a commitment to joint action for environmental protection of the region.

By 1998, the Arctic Council began to promote the development of environmental measures for ships operating in Arctic waters — work that necessarily had to engage the IMO. A third factor in the creation of a specific regime for shipping safety in polar/ice-covered waters has been climate change. This has revealed itself increasingly in recent years, with sea ice in the high north reduced from 1976 through 2006 by 45,000 km2 every year, more rapid melting of ice, thinner

ice overall and changed extents of ice.

The rate of ice melting in the Arctic can be called fairly alarming. A 2009 article in the Journal of Geophysical Research concluded that there had been a loss of more than 40 per cent of the total volume of Arctic ice during the five years from 2003 to 2008. A shorter route for shipping between Asia and Europe and certain North American ports inevitably had to result.

A fourth phenomenon is the accessibility of natural resources in the Arctic basin area, especially seabed petroleum, because of receding ice, innovations in exploration and recovery technologies, and sustained high prices for energy that makes development in remote areas economically feasible. Oil rigs in Brazil’s offshore and the Gulf of Mexico can now drill in water depths of more than 3,000 metres. Drilling in the continental shelf off Brunei in the South China Sea, for example, is routinely done to depths of 5,000 metres in the earth’s crust. Moreover, the Arctic basin area is thought to contain perhaps 25 per cent of the world’s proven energy reserves (with figures of 75 per cent natural gas and 25 per cent petroleum of that amount recently suggested). The U.S. Geological Survey puts Arctic reserves at 22 per cent of the global total; 50 billion tonnes of “oil equivalents”.

Coupled with these factors are increased public perception (and sensitivity) of environmental concerns in both polar regions, growing shipboard tourism, a greater regard for indigenous peoples of the high north, and national concerns for security and jurisdictional control around the Arctic.

In 2002, the IMO published “Arctic Guidelines” for shipping and ice navigation. Not surprisingly, these first nonbinding Guidelines were concerned

only with Arctic waters and were primarily about ice-strength standards for ships. In the following years, it was evident that ships operating in Antarctic waters — the Southern Ocean — faced the same risks. It was also clear that a single overall requirement for strength and structural integrity was not flexible and would result in ships being overbuilt for ice conditions they might not necessarily encounter. During discussions of the issue, each Arctic state had its own view of ice strength and there was no clear categorization of the risks for a single overall area. A “presence of ice” approach was agreed upon.

It was to include “polar waters where local ice conditions present a structural risk to a ship”. It encompassed areas where ice covers more than one-tenth of the sea surface.

...the Arctic basin area is thought to contain perhaps 25 per cent of the world’s proven energy reserves...

Such matters are now addressed in the current 2009 Guidelines. Again, the Guidelines are not mandatory. The IMO means for them to be, in its phrasing, recommendatory. Moreover, an eventual compulsory Polar Code will only govern ships on international voyages. It will be up to the coastal states of the Arctic area to legislate the application of the Code to vessels on internal voyages. (The waters around Antarctica, by definition international waters, would have no such local voyages exemption.) A scaled or stepped approach to hull strength for ships depending on the thickness of ice to be encountered and time they will operate polar areas is now a major feature of the 2009 Guidelines. The Guidelines incorporate the seven categories of “Polar Class”

September 2012 BC Shipping News 37

POLAR SHIPPING vessel-strength standards prescribed by the International Association of Classification Societies (IACS) in its “Unified Requirements for Polar Class Ships”. The categories, ranging from PC1 (“year-round operation in all ice types”) to PC7 (“summer/autumn operation in thin first year ice”) will bring into an eventual Code the structural strength requirements necessary across four areas of a new vessel: Bow, Bow Intermediate, Midbody and Stern.

The design load parameters specific to each of the seven Polar Classes include crushing failure, flexural failure, load patch dimensions, displacement and longitudinal strength. The crushing and flexural failure requirements for Polar Class 1 vessels are more than 10 times greater than those for summer season only Polar Class 7 vessels.

Arriving at an effective Polar Code means balancing interests, including the particular requirements of flag states and the industry, classification societies and marine underwriters.

There are four parts to the 2009 Guidelines: construction standards (namely the Polar Class standard above); equipment; operational arrangements; and environmental protection and damage control. While the requirements of each are discrete or standalone without much compliment to other parts, the value of the Guidelines — and an eventual Code — is to be found in their entire application to safe navigation and pollution prevention. The Guidelines are an amalgam of the architectural and the operational.

Standards for construction are only a few pages removed from ice pilot qualifications and crewing standards. The risk of sea ice as “a serious structural hazard to all ships” is the main theme of the Guidelines and the reason why construction provisions are extensive. How a Polar Code will “fit” the Safety of Life at Sea Convention (SOLAS) and Maritime Pollution Convention (MARPOL) scheme (as well as other multilateral IMO treaties such as the Load Line Convention) and not simply be a stand-alone body 38 BC Shipping News September 2012

of requirements for the entirety of vessel design and operation in ice-covered waters, is an important question in the years to come.

Arriving at an effective Polar Code means balancing interests, including the particular requirements of flag states and the industry, classification societies and marine underwriters. The concerns of Arctic coastal states in particular have been an additional complicating factor to designing a scheme of mandatory compliance for vessel operators. Accordingly, the IMO has considered three approaches to developing a mandatory Code: (i) amending SOLAS and related treaties; (ii) negotiating a stand-alone Polar Code convention; and (iii) simply making the Code obligatory as a matter within SOLAS. Each has its merits and drawbacks. An entirely new convention seems attractive, but will require a treaty-making process all its own that will be protracted and perhaps inefficient to administer. Amendments to SOLAS and MARPOL can be done although the trend of state acceptance of MARPOL Annex VI air emissions standards has been slow. The SOLAS scheme is arguably becoming unwieldy and difficult to amend in a timely way.

The preferred approach — as with the International Safety Management (ISM) Code of the 1990s — may be to graft the Polar Code onto SOLAS as an additional chapter, making consequential amendments elsewhere as needed.

The 2009 Guidelines and a Polar Code will not replace national control of shipping navigation. That means Arctic states (recalling again the international nature of Antarctic waters) will need to consider their vessel traffic routing schemes, the adequacy and maintenance of navigational aids, and the quality of charts they publish. They will also have to review national pollution control regulations and the consistency of them with MARPOL. There are other obligations that Arctic states will confront because of increased polar shipping, among them search and rescue capacity, ice monitoring and information delivery, and pollution response measures.

Canada has been active in the IMO’s Working Group on the Development of a Mandatory Polar Code which met

most recently in February 2012. Canada has recommended the Code prescribe additional training and experience for mariners in understanding sea ice conditions, and that a planned operations manual for polar vessels contain details about the types of escort services to be provided to vessels. Like Russia, Canada emphasizes the right of Arctic states over environmental protection in ice-covered waters under UNCLOS Article 234. Work continues to assess whether the Code should apply to naval ships, yachts and fishing vessels. The IMO has considered recommendations from environmental groups for a ban on heavy fuel oil use in Arctic waters (in addition to the present voluntary ban in the Antarctic area), to introduce a “safe speed” for vessels in polar regions, and for tighter controls on anti-fouling coatings.

A Polar Code...is the most ambitious regulatory undertaking in the IMO’s six decades of work.

A Polar Code, although it will apply to only a fraction of the global shipping industry, is the most ambitious regulatory undertaking in the IMO’s six decades of work. That is because the Polar Code has the goals of vessel safety and environmental protection widely ranging from construction to crew training to certification standards. And it is also because the various parties concerned with shipping in Arctic and Antarctic waters have competing interests. There couldn’t be a more complex inter-disciplinary exercise. A usable, effective Code is a few years away. To be properly workable, the range of subjects to be dealt with, especially vessel certification and crew training, will need innovative design. In a world of international regulation and greater uniformity, a Polar Code as it is now being conceived is a useful advance. Its successes, however, will only be realized by co-operation between those involved and continued work on the basics of safe shipping.

Jeffrey Smith is an Ottawa lawyer and the Chair of the Canadian Institute of Marine Engineering. This article was first presented at Mari-Tech 2012 in Ottawa.

POLAR SHIPPING Arctic navigation: Still too soon for regular shipping

C

aptain Duke Snider, Regional Director Fleet, Canadian Coast Guard Pacific Region, was the guest speaker at the Chamber of Shipping of British Columbia’s seminar on Arctic Navigation and Development.

In addition to providing the CCG’s perspective on operations in the Arctic, Captain Snider gave attendees a realistic view of expectations when considering northern shipping routes.

Captain Snider’s qualifications on the subject matter are extensive — he is an an Ice Pilot/Ice Navigator; lead author of Transport Canada’s “Ice Navigator Standards”; and author of the recently published book, Polar Ship Operations — A Practical Guide. He is also the Chair of the Nautical Institute’s Ice Navigation Project which is taking a lead role in pushing for the development of minimum standards for polar navigation within the International Maritime Organization.

The CCG’s mandate in the Arctic stems from the Oceans Act and Indian and Northern Affairs Canada’s Northern Strategy. Through initiatives such as Continental Shelf mapping, research, small craft harbour construction and regulatory review, the CCG’s Arctic activities also include icebreaker operations, search and rescue, navigational aid and waterways maintenance as well as environmental response.

According to 2010 statistics from NORDREG Canada, 140 vessels undertook 272 voyages with the NORDREG zone (i.e., Arctic Canada Vessel Traffic Services zone). 2011 numbers were similar with most traffic being destination-oriented (i.e., in and out).

While interest in polar shipping has been increasing as the length of an “icefree” season gets longer, Captain Snider noted that challenges to on-water operations would exist for some time to come.

First among these is the unpredictability and variability of the ice. “While we are seeing open water now slightly before July and slightly after October, ice variability is something that will continue to slow down the development of commercial shipping routes,” Snider said. And the remote nature of

the region means little infrastructure, supplies or services. “Help is not around the corner — the Arctic is a ‘come as you are’ operation. You must take everything you’ll need.”

In summarizing the challenges facing ships, Captain Snider reported that: • There is no shipyard, fuel capacity or salvage capability between Nuuk and Dutch Harbour (however noted that Island Tug & Barge has committed over $12 million in assets to operations, taking a huge step forward in what is currently there).

• Search and rescue capability is limited.

• There is a lack of complete “modern standard” charting and varying chart datums.

• While high frequency radio is available, sun spot activity impacts on reliability; other methods of communications — INMARSAT, MET/NAVAREAS and MCTS — are getting better but are still not 100 per cent reliable.

• There is no oil spill response organization in the Arctic however CCG is working toward a final configuration that will see 18 sites with community specific kits; three depot sites (Tuktoyaktuk, Iqaluit and Churchill); and a Rapid Air Transportable kit stationed at Hay River and designed to be flown into any community with a 3,000-foot-plus landing strip.

Another challenge to Arctic operations is the availability of experienced ice pilots and guidelines. “You need at

least 10 years of experience and even then, experience needs to be defined by the type of ice,” Snider said when commenting on the limited number of ice pilots. With no international recognition or certification, Captain Snider stressed the importance of the work being done by the Nautical Institute in this area through the Ice Navigation Project.

One useful resource recently written by Captain Snider is the book, Polar Ship Operations — A Practical Guide.

The first few chapters set the stage, providing information on the environment and climate; general geography and infrastructure; and types of ice (there are nine different development stages of ice coupled with nine different ice floe sizes combined with varying degrees of concentration!). With the background established, Snider then outlines required preparations for cold weather, ice operations, passage planning and shiphandling. He also dedicates one chapter to emergency and environmental response and insurance.

Checklists contained in the Appendices provide a quick snapshot of the kind of preparation required for bridge, engine room, deck, and lifesaving and firefighting equipment operations.

Captain Snider’s book is available through the Nautical Institute’s website (www.nautinst.org) or the Nautical Mind Bookstore in Ontario (www.nauticalmind. com).

Captain Stephen Brown and Captain Duke Snider.

September 2012 BC Shipping News 39

legal affairs

Limitation of liability in maritime claims: The unbreakable limit remains broken

By David S. Jarrett A Vancouver lawyer with Bernard & Partners

I

n an earlier edition of BC Shipping News, I discussed the Federal Court decision in Société Telus Communications v. Peracomo Inc. That case dealt with whether the defendants, Mr. Vallée and Peracomo Inc., a company of which Mr. Vallée was the sole shareholder and which owned the fishing vessel the Realice, could limit their liability pursuant to the Marine Liability Act (the “Act”) and the Convention on Limitation of Liability for Maritime Claims, 1976 (the “Convention”) following Mr. Vallée cutting Telus’ underwater cable. As readers may recall, the Federal Court held that Mr. Vallée’s actions in cutting Telus’ submarine cable, not once but twice, to free his crab cages was negligent and that Telus’ loss was solely due to Mr. Vallée’s intentional and deliberate actions.

Consequently, the Court held that the defendants could not limit their liability to $500,000 pursuant to the Act and the Convention nor were they entitled to coverage from their insurers as Mr. Vallée’s conduct was both intentional and reckless.

Since there was no insurance coverage, Telus was left with a large damages award that it would unlikely be able to fully recover from the defendants, despite having arrested the Realice.

This case broke new ground in Anglo Canadian law in that this was the first time that the limitation contained in the Convention should be broken.

40 BC Shipping News September 2012

The defendants appealed the trial decision to the Federal Court of Appeal.

The Federal Court of Appeal recently released its judgment dismissing the defendants’ appeal and thereby continuing Mr. Vallée’s unfortunate legacy of being involved in the only case where a Court has disallowed a claim of a right to limit liability.

...Mr. Vallée first attempted to cut the cable with a handsaw and then achieved success by using an electric circular saw to cut the cable in two.

Among other things, the defendants raised the following issues in their appeal: 1. Mr. Vallée’s liability and Telus’alleged contributory negligence; 2. The defendants’ right to limit their liability; and 3. The defendants’ loss of insurance coverage.

Although the Federal Court of Appeal was sympathetic to Mr. Vallée’s plight, it noted that the evidence was that his equipment would get hooked to the bottom in an area roughly parallel to Telus’ underwater cable approximately seven or eight times over the course of the eight-week fishing season and Mr. Vallée had pulled the same cable to the surface in 2005 following a similar incident. The Federal Court of Appeal

noted that Mr. Vallée hooked the same cable approximately one year later and was determined to put an end to such inconvenience by cutting it. Like the trial court, the Federal Court of Appeal focused on Mr. Vallée’s conduct in undertaking this “dangerous” cutting operation noting that the cable was 100 km long, of considerable weight and that Mr. Vallée first attempted to cut the cable with a handsaw and then achieved success by using an electric circular saw to cut the cable in two.

Mr. Vallée’s liability and Telus’ contributing negligence The Federal Court of Appeal held that Telus was not negligent in either failing to notify the defendants of the cable or not burying the cable as Mr. Vallée should have had up-to-date charts onboard and he should have been aware of the numerous Notices to Mariners regarding the same cable. Most importantly, Mr. Vallée failed to take steps to determine whether the cable was in fact in use, notwithstanding the fact that in 2005 he lifted the cable to the surface and that he would snare anchors and equipment on the same cable seven to eight times during an eight-week fishing season and yet failed to take steps to determine whether the cable was in fact in use.

Further, Mr. Vallée had an unapproved electronic chart onboard that did not show the cable. The Court of Appeal stated that an up-to-date electronic

LEGAL AFFAIRS chart programmed to the proper scale would have shown the cable. The Federal Court of Appeal did not agree with the defendants’ submissions that Mr. Vallée had sufficient knowledge of the area to not require him to carry the most upto-date charts on the vessel as allowed by the Charts and Nautical Publications Regulations, 1995.

Limitation of liability The current international statutory framework on limitation for maritime claims is contained in the Convention.

The Convention has the force of law in Canada pursuant to section 26 of the MLA. As the Realice’s gross tonnage was less than 300, section 29 of the Marine Liability Act sets its maximum liability for any claims other than those for loss of life or personal injury at $500,000.

Articles 1 and 2 of the Convention allow owners, charterers, managers and operators of seagoing ships to limit their liability for claims for, among other things, damage to property if such damage occurs in direct connection with the operation of a ship. However, Article 4 of the Convention does not allow the benefit of limitation of liability when the loss was caused either “with the intent to cause such loss” or “recklessly and with knowledge that such loss would probably result”.

The Federal Court of Appeal also rejected the defendants’ appeal that they should be able to limit their liability stating that this was an “exceptional case” and that Telus met its very heavy burden of breaking limitation by proving that Mr. Vallée intended to cut the cable and that such action caused loss to Telus.

The Federal Court of Appeal also rejected Mr. Vallée’s argument that he never intended to diminish the value of the cable as he thought it was abandoned and therefore useless as Mr. Vallée was not required to know the exact value of the cable or that it was in use for Telus to claim the cost of repairing the same.

The Federal Court of Appeal concluded that the trial judge made no error in concluding Mr. Vallée’s cutting the cable was the only cause of Telus’loss.

The defendants’ loss of insurance coverage Insurance is not in place to cover for intentional acts but only for fortuitous events. The intentional conduct of Mr. Vallée voided the defendants’ insurance pursuant to Section 53(2) of the Marine Insurance Act. The Federal Court of Appeal found that there was no palpable and overriding error in the trial judge’s decision that the defendants’ insurers were able to deny coverage as Mr. Vallée’s conduct was deliberate and intentional and that Telus’ loss was attributable to that conduct.

As the loss that the defendants sought insurance coverage for was solely attributable to the willful misconduct of Mr. Vallée, the Federal Court of Appeal concluded that this loss was not covered.

unenviable position of being personally liable for the $1.2 million judgment in favour of Telus, the defendants’ appeal was dismissed.

The Federal Court of Appeal’s decision was released on June 29, 2012 and the parties have 60 days to apply to the Supreme Court of Canada for leave to appeal this decision. We understand that as of the date of writing this article there has been no appeal filed of the Federal Court of Appeal’s decision.

As a practical matter, based on the trial and appeal decisions in this case, a party seeking to recover damages beyond limitation may face the unwelcome result of a hollow victory as the same conduct that allows limitations to be broken prevents there being a possibility of recovery of such higher amounts from an insurer.

Status of possible appeal to the Supreme Court of Canada Despite the Federal Court of Appeal’s expression of sympathy for Mr. Vallée’s

David S.Jarrett is an associate and maritime lawyer with Bernard & Partners and can be reached at jarrett@bernardpartners.com

September 2012 BC Shipping News 41

MARITIME LAW

A conversation with Professor Edgar Gold

By Jane McIvor

W

hile Professor Edgar Gold has had many honours bestowed upon him during the course of his career, the most recent celebration of his contributions to international maritime law took him by surprise. During a trip to Halifax to speak at a large international maritime conference over the summer, Professor Gold was presented with The Regulation of International Shipping: International and Comparative Perspectives: Essays in Honour of Edgar Gold (available through Brill — www.brill.com).

Those practising maritime law will need no introduction to Professor Edgar Gold, however for the rest of us, a bit of background is required to shed light on why over 30 of the world’s most prominent maritime lawyers and other maritime experts would secretly contribute to a book in honour of one man.

His list of accomplishments are too long to describe in detail here but, briefly, Professor Gold spent 16 years in the merchant marine, including several years in command (and holds British and Canadian Master Mariner qualifications) before obtaining his Bachelor of Arts and Bachelor of Laws from Dalhousie University and his Ph.D. in International Maritime Law from the University of Wales. He was Professor of Law (1975 – 1994) and Professor of Resource and Environmental Studies (1986 – 1994) at Dalhousie University, Halifax, and is a founding member of Dalhousie Law School’s Marine and Environmental Law program. He is a former President of the Canadian Maritime Law Association; a former Executive Director of the Dalhousie Oceans Studies Program and the Oceans Institute of Canada. He was also a senior partner with a major Halifax law firm for many years. He has written over 250 published works in the areas of maritime law, international marine, offshore energy and environmental law and policy, maritime training, and international ocean development. He has received an honorary degree from the Canadian Coast Guard College 42 BC Shipping News September 2012

Left to right: Professor Edgar Gold, Kaity Arsoniadis-Stein, and Peter Leckie Wright.

(1992), was awarded the Commander’s Cross of the Order of Merit by the German Government, the Order of Canada in 1997, the Order of Australia for “services to maritime law and protection of the environment…” in 2004, and an honorary doctorate from the World Maritime University in Sweden in 2007. He is now based in Brisbane, Australia.

BC Shipping News was treated to an opportunity to meet with Professor Gold while he was in Vancouver this past summer (thanks to Kaity ArsoniadisStein, President and Secretary-General of the International Ship-Owners Alliance of Canada). Given the limits on time, we chose two issues to discuss: 1) polar navigation; and 2) tanker traffic on the West Coast.

In considering the question of how development of northern shipping routes would impact on the West Coast shipping industry, Professor Gold started by noting that he was involved in a collaborative project between Japan, Russia and Norway (to be joined later by European Union countries) that looked at all aspects of Arctic shipping about 10 years ago. Two distinctly different areas of arctic shipping development were identified: navigation into the Russian Arctic for the extraction of resources;

and as a transit route for cargo ships.

“The Russian Arctic has enormous forestry, mining and oil and gas resources and a number of countries (Finland and Norway, for example) are already active in the area,” said Professor Gold.

“The Russians allow countries to do this providing they create infrastructure — terminals, pipelines, etc. The second aspect, the transit issue is a bit more problematic. I think we’re jumping the gun a bit at this particular stage though — it’s not something that’s just around the corner.”

Professor Gold cited two reasons to back up his assertion. Through his work on the previously mentioned project, Gold interviewed international shipping chambers and major shipping players and asked about their interest in a northern sea route. “They were interested if they could save fuel and time,” said Gold, “but if it wasn’t available on a year-round basis it would mean repositioning for part of the year and that’s a non-starter because of the additional costs involved and the obligations to shippers in order to deliver. Secondly, if they have to use icebreaker support or start building/ running ice-strengthened ships then you lose most of the commercial advantage that might be gained.”

maritime law Gold said that, to some extent, the media has played up the notion of an ice-free northern route as part of its reporting on global warming. “The uninformed reader imagines hundreds of ships going through the northern sea route but we don’t even know at this point if it’s going to be as ice-free as everybody says and if it is, the ice-free routes may not be the most direct.” He also pointed out that insurance would come, if at all, with extremely high premiums until underwriters were assured of adequate services to mitigate risks — for example reliable chart information, salvage, towing, rescue or spill response.

Regarding the development of a mandatory polar code, Professor Gold agreed that some type of codified passage regulatory system should be put in place prior to full-scale shipping navigation in the Arctic. “Now is the time to set up limitations of the types of ships as well as the type of ancillary services required. Unfortunately, the shipping industry is notorious for doing things after the fact. Every major step forward in the maritime sector has been based on some type of disaster, even going back to the Titanic.”

Gold wasn’t much more optimistic about government action either.

“Governments are generally reluctant or very slow to respond to a need if it’s going to fall outside of their tenure.”

The solution, Gold felt, lies with some type of private sector foundation funding and it is likely that the maritime industry will have to step in if they are interested enough.

When asked to forecast a timeline, Gold considered 10 years to be optimistic. “I don’t see the big container companies risking high value ships in that area,” he said. “I think bit by bit, you’ll start to see double hull tankers and bulk carriers with lower value cargos and I know China is interested in Arctic and Antarctic development and are doing quite a lot of research work. I think it’s more likely that you’ll see more research coming out of that sector.”

And despite enormous risk implications, cruise shipping companies have shown interest, especially in the Antarctic. Gold estimated that within the next 10 years, there would be

specialized adventure cruises to the Arctic, some bulk carriers with low value cargo and oil and gas development… “and that will require a big discussion on whether extraction should be by pipelines or tankers or both with coastal state rights and environmental considerations.”

Focusing on tanker traffic for the remaining time available, Professor Gold considered the issue of B.C.’s current debate on the expansion of traffic along the West Coast.

Gold expressed surprise over the current debate considering that the traffic here is very light compared to other areas of the world such as the Dover and Malacca Straits. Even in comparison to the East Coast, he described a different perspective and approach to the much heavier traffic, including significant offshore oil and gas development and a huge fishing industry with much larger ships — all operating under much more adverse weather conditions than on the West Coast.

“...I often think that the B.C. maritime consciousness is not quite as strong as it could be whilst, at the same time, the local environmental movement has been particularly strong,” “Despite the fact that Vancouver is one of the main maritime centres of this country, I often think that the B.C. maritime consciousness is not quite as strong as it could be whilst, at the same time, the local environmental movement has been particularly strong,” said Gold. “I used to be a tanker captain and now I like to call myself a ‘reformed polluter’ as I’ve always been very much on the environmental side. I was involved in some of the early work in IMO and the development of the various marine pollution conventions. Regrettably I now feel that the environmental movement has been hijacked by its more extreme factions who are well funded and well organized.”

Gold goes on to say that, because developments on the West Coast will invariably impact on developments in other parts of the world, he is suspicious

of the ulterior motives of other interests. “I sometimes think that not only are extremists running the environmental movement but in turn they are being manipulated by other interests concerned with the flow of commercial maritime traffic as well as the use of various ports.”

The general media often play a role in distorting the realities of shipping as well. “There’s a whole gamut of opinion which is either manipulated or uninformed. I remember being called by a journalist about the MV Rena incident off New Zealand, and she started off by saying it was a terrible tanker accident. When I explained that it wasn’t a tanker but a container ship with very little oil pollution, and then described how the accident happened, she admitted that her editor wouldn’t find this interesting.”

Despite the fact that maritime accidents occur, maritime navigation has never been safer. Human error — while playing a role in most accidents — is buffered by collision avoidance systems and improved traffic systems. Gold noted that ships transiting the coast are well regulated and inspected and he praised the U.S. Coast Guard for their certification process, providing for some of the best vetted ships in the world.

“Accidents can happen but if you look at the statistics, it’s pretty good considering the amount of activity out there.”

Gold recommended a review of statistics that could be found through the International Tanker Owners Pollution Federation website (www.itopf.com).

“They have a lot of experience dealing with very serious spills all over the world and provide technical advice and information on all aspects of pollution response, including on-site clean-up advice, pollution damage assessment, assistance in spill response planning and the provision of training and information.”

“Prevention is better than cure and I’m not saying that there wouldn’t be a big fall out from a large tanker accident, but risk is a part of life and sometimes you can worry too much about something which might not happen. We must be realistic and always remember that shipping is an essential part of our prosperity.” BCSN September 2012 BC Shipping News 43

tugs & barges

The passing of the log carrier

By Syd Heal

I

earlier this year as deck cargo aboard a Chinese owned semi-submersible, the Development Way. The ship and its deck cargo must have attracted as much attention when seen at sea as it did when at anchor in Vancouver Harbour loading a veritable convoy of the two barges and several tugs.

The log barges have been a part of the B.C. coastal scene since 1925 when a small fleet of 11 U.S. war-built wooden hulls were purchased out of layup in Lake Washington by Washington Tug & Barge. Known as the Ferris hulls (after their designer), they were built as a quick solution to the pressing need for ships as the First World War was

Photo courtesy of Seaspan International

t seems certain that, even though she has long since been forgotten by most of the local shipping world, a sentimental tear or two might have been shed for the passing of the second of the only two self-propelled, self-dumping log ships to grace our coast. I speak of the Haida Brave, the second and smaller of the two memorable vessels that were once the pride of MacMillan Bloedel through their operating company Kingcome Navigation Co. Ltd. Haida Brave and its companion log barge Straits Logger, a reliable old workhorse and the veteran among the current fleet, ignominiously travelled towards the breaker’s yard in China

The Haida Brave.

44 BC Shipping News September 2012

approaching its end. Constructed from inadequately seasoned fir lumber, only a very small number went to sea as commercial vessels and usually with a very short life. Fire, a propensity for marine accidents and rot ensured as much.

British Pacific Log Transport Company was incorporated in B.C. in 1925. This company was a 50/50 joint venture between prominent Vancouver shipbuilder and ship owner John Coughlin and two officials from Washington Tug & Barge, Edgar Worthington and James Bloomfield. It seems reasonably certain that the vessels were purchased from the U.S. Shipping Board at dirt cheap prices. Wooden freighters had been a commercial failure and the usual way of disposing of them was to burn them on a shore site with the metal fittings and fastenings being the net value for scrap.

In service on the B.C. coast, they were generally towed by big old steam tugs of which there was a good supply in the 1920s. The wooden barges were relatively small with dimensions of 268’x46’x24’ and of 2,250 grt. The deadweight they actually loaded with logs is not known, but it was probably not much over 3,000 tons. The first barge to go into service was the Bingammon and the last active wooden log barge was the Biscayne which sank off Cape Beale lighthouse in 1932 although one,

tugs & barges the Addison, lasted as a hulk as part of the Powell River breakwater until it sank at its moorings in 1943.

The transportation of logs in barges was a sound enough concept as losses from adverse weather and marine borers literally ate up logs at an incredible rate. Logs held in seawater for any length of time soon lost value. As the wooden barges’ short life unfolded it became obvious to the coastal logging interests of the day that steel hulls were a better answer, but the idea of purpose building would not take hold as long as there was a cheaper alternative. Some deepsea sailing ships were converted to barges before and after WWI usually following accidents where they were written off as constructive total losses and cut down to barges. The best known of these were probably the Melanope, a former wool clipper and passenger carrier in the Australian trade which became a coal hulk at Vancouver for the CPR; and the Drumrock, owned by Hecate Straits Towing Company which was led Publication by well-known local shipping personalBC Shipping NewsJohnson. This vessel, ity, B.L. “Barney” a former British four-masted barque, Issue had a capacity of about 4,000 tons of July/August logs and it set a new standard for log barges compared to the smaller wooden barges.

Size Island (half vertical) The need for page economically delivered

towing industry, was a struggling company that failed to grasp the potential of the diesel engine and the decline of steam in the tugs and was also affected by the depression of the 1930s. In that period, the three barges were acquired

by Island Tug & Barge Ltd. of Victoria headed by Harold Elworthy who soon identified himself as the leader in the development of the log barge, a position he more or less retained until Island Tug became part of the merger that formed Seaspan in 1970. Renamed with

the “Island” prefix, the Island Gatherer was lost in 1936, but the Island Carrier and Island Forester remained the mainstay of the log carrying fleet on the B.C. coast until after the Second World War. After WWII, the B.C. coastal forest industry expanded at a prodigious rate. When the war ended, pulp and/ or paper mills were operating at Powell River, Port Alberni, Port Alice and at two locations in Howe Sound. Postwar expansion, in addition to changes and improvements made at most of

Endurable Designs designs@ral.ca

pulp logs became paramount and

Deadline movement June 6, 2012in Davis rafts or flat rafts

was neither practical nor economical.

Features During WWI, a fleet of high-quality Annual Shipyards update large BC sailing ships owned

by German Industry Insight (Jonathan interests were interned mostly at Whitworth, President, Santa Rosalia in Mexico. Acquired very Seaspan Marine Corp.) cheaply by the Robert Dollar Company in San Francisco after the war, they were put back to sea as sailing vessels, but there were too many problems with them, including the difficulty of manning with experienced officers and crew. Three of the ships were transferred to the Canadian register and became part of the fleet of Pacific Coyle Navigation who cut them down to log barges named Pacific Carrier, Pacific Forester and Pacific Gatherer.

Pacific Coyle, once the giant of the B.C. September 2012 BC Shipping News 45

tugs & barges were the Seaspan Rigger (renamed Seaspan Phoenix) of 1980 and the Rivtow Hercules of 1981. These two, along with the Seaspan Forester (ex-Island Forester), built in 1970 and the largest of all the B.C. log barges at 20,000 tonnes dwt capacity when built, remain as three of the surviving fleet of four active log barges in commission.

tugs towed to Victoria from Venezuela in two spectacular voyages). Conversion took place between 1954 and 1956 and drastically enlarged the capacity of the available fleet so it was not until 1957 that Straits Towing, Vancouver Tug and Crown Zellerbach plunged heavily and took delivery of a total of five self-dumpers. The last in this group of 12 ships was built in 1965 as the Rayonier No.4.

The self-dumpers needed a substantial shore-based loading point or a crane barge to create extra loading capacity. In some instances it could be very cumbersome. By 1960, the forest companies, always on the lookout for faster delivery and quicker turnaround, saw B.C. Forest Products take delivery of the twin-craned Forest Prince, the first of 13 self-loading, self-dumping log barges built for both the forest companies and the tugboat operators.

She was to be the smallest of the twincraned log barges. (Two smaller barges fitted with a single crane are included in this group). The last of this group

The concept of the log ships was supportable economically on the basis that there was a large, reliable log supply...

Photo credit: Rod Innes

Photo credit: Don Rose

the existing mills, saw new complexes at Crofton, Nanaimo, Campbell River, New Westminster, Tahsis, Prince Rupert and Kitimat and from the time of the first W.A.C. Bennett government in 1953, a policy of maximum expansion was encouraged although some muchmooted projects like mills on the north coast never came to pass. The need for economically delivered pulp logs became paramount and movement in Davis rafts or flat rafts was neither practical nor economical. The need to expand the log carrier fleet became more urgent as new mills came on stream.

Early postwar efforts were very tentative as if both the forest product companies and the towing industry were sniffing the air looking for direction. The Powell River Company commissioned the first two purpose-built self-dumping log barges in 1954, the Powell No. 1 and Powell No. 2, but Harold Elworthy at Island Tug saw an opportunity and acquired seven discarded Lake Maracaibo shallow draft tankers from Shell and Esso (which his

Top: the Straits Logger; below: the Haida Monarch.

46 BC Shipping News September 2012

There was a long gap of 10 years from the building of the Island Forester, Crown Zellerbach No. 1 and Swiftsure Prince which were all commissioned in 1970, to the building of the Seaspan Rigger in 1980. Perhaps a reason for this was to enable the industry players to judge the success of MacMillan Bloedel’s two self-propelled, self-loading and selfdumping barges which were designated as Log Ships by their owners. The first and largest — the Haida Monarch — came out in 1974 with a cargo capacity of 15,000 short tons. As a precaution against being tempted into too radical a new design in untested waters, her hull was that of a conventional log barge.

This ship — for realistically she jumped the line between self-propelled ships and towed barges — was designated as a ship rather than a barge by her owners.

It also has to be said that barges with engines are a ship-type known in many parts of the world and there is no rigid guideline, but it appears that size also relates to the distinction between a powered barge and a ship.

The concept of the log ships was supportable economically on the basis that there was a large, reliable log supply and a need to get them to the mills in the most economically feasible and shortest time. The model showed that with higher speed and faster turnaround and the certainty of full loads, the log ships could deliver a larger tonnage than comparable tug and barge units at a lower overall cost per unit of logs. In the 1970s there was still a widespread belief that the coastal forests were a virtually inexhaustible resource and the towing companies were under constant pressure to keep up with the

tugs & barges needs of the forest industry, or, as some feared, surrender their toehold to forest product companies that had bigger resources for financing vessels.

MacMillan Bloedel, Crown Zellerbach and B.C. Forest Products all made big investments in their own equipment and then, in 1978, M&B built the Haida Brave, a smaller more radical design of ship than its larger consort.

The 10,000 short ton Haida Brave was an improvement on its predecessor when it came to crew accommodation and heavier capacity cranes. Their speed was about the same, but with the best brains available, a great deal of discussion and thought went into her design.

Despite all this effort, the Haida Brave was not as successful as her larger consort. With her finer lines, she was more tender and had a distinct tendency to prematurely dump when caught in poor conditions. When this happened with a full load, losses of time, collection costs and unrecoverable logs were probably expensive enough to undermine the economic model even when helped by insurance.

Over the next 20 years, slow deterioration in the forest industry due to economic, trade, managerial and political issues saw MacMillan Bloedel suffer more ‘downs’ than ‘ups’ and in an effort to dispose of what it termed non-core assets it sold its own tug and barge operator, Kingcome Navigation to Seaspan and with it the two log ships changed owners. Seaspan, which probably had never been enthralled by the log ships, soon laid them up.

In 2005, Seaspan took a leap of faith and rebuilt the Haida Monarch as a towed barge at a considerable cost.

With engines removed, capacity was increased to about 17,000 short tons when she re-emerged as the Seaspan Survivor. The accommodation was stripped out and the more modern, heavier capacity cranes of the Haida Brave were substituted. Once the Haida Brave sacrificed her cranes, she had no further purpose and she never sailed again. Between carrying her last load of logs and going to China she was in layout for close to 10 years.

The history of the B.C. log barges now spans 86 years. Will it make the century? Probably, but only just, as by then

the rebuilt Seaspan Survivor will be 55 years old (of which her last 20 years will have been spent as a barge). Even with first class maintenance she is more likely to become economically obsolescent before her materials get so old that she no longer becomes worth the upkeep. She was renamed the Seaspan Survivor because it is anticipated that she will be the last of the breed. A new cycle has already started with small,

relatively cheap flat-deck barges lacking any onboard loading or unloading arrangements now increasingly carrying logs. The four log barges now in commission, the last of an estimated 64, will gradually reduce in number until we reach the final survivor.

Syd Heal, a veteran of the marine industry and a prolific writer and publisher of marine books, can be contacted at: richbook@shaw.ca

September 2012 BC Shipping News 47

Marine Engineering Another top-notch class of marine engineers from BCIT More photos online at www.bcshippingnews.com/photo Photos courtesy of BCIT

C

ongratulations to BCIT’s Marine Engineering Class of 2012!

Family, friends and marine industry representatives were on hand to watch as graduates of the Marine Engineering Program received their certificates. “We are proud to have you represent us,” said Jay Notay, Dean of the BCIT School of Transportation.

Chief Instructor Sanjeev Sarwal told recruits to “go out and invent your future,” noting that “from tomorrow on, you will be in the driver’s seat of your life”. Valedictorian Jordan Sallstrom gave special recognition to BCIT staff Jeff Otto, Russell Oye and Sanjeev Sarwal for their guidance and leadership throughout the four-year program.

Receiving their 2012 Certificate for Marine Engineering were: Elize Duggleby-Chouinard, Steven Hart, Marc-Andre Houde, Graeme Jack, Ziad Jihanger, Eugene Karaev, Ahmed Khan, Siddarth Kulkarni, Sheroy Mistry, Vincent Percy, Ronald Saenz, Jordan Sallstrom, Adrian Sumera, and Andrew Swann.

Achievement Awards were given to: • Vincent Percy (Oak Maritime Award presented by Jeff Otto) • Jordan Sallstrom (Algoma Central Corporation Award presented by Captain Jim Pound)

BCIT Marine Engineering graduating class stand with Tony Gugliotta, Chair, BC Board of Governors (bottom row, far left); Don Wright, President, BCIT (bottom row, second from right); and Jay Notay, Dean, BCIT School of Transportation (bottom row, far right).

• Steven Hart (British Columbia Ferry Services Award presented by Captain Jamie Marshall) • Graeme Jack (Chamber of Shipping of British Columbia presented by Captain Stephen Brown)

• Sheroy Mistry (Nautical Professional Education Society of Canada Book Award presented by Captain David Whitaker) New Associate Dean welcomed r. Richard Gerd Julius Wiefelspuett has been appointed to the position of Associate Dean, Marine Campus, BCIT. Dr. Wiefelspuett joins BCIT with 30 years’ experience in the International Maritime sector. Prior to joining BCIT, Dr. Wiefelspuett has held positions as Managing Director with Wartsila in Asia and, as Group Aftersales Director for Hamwor thy PLC.

D

Not to be published until August 20, 2012!

More to follow in the October issue of BC Shipping News.

Quality welding solutions for the marine industry.

48 BC Shipping News September 2012

The 38th Annual Golf Tournament was made possible by the generous support of sponsors, donors and volunteers.

Thank you! for making our event a great success!

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MARITIME SECURITY CHALLENGES 2012 OCTOBER 1-3, 2012

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VICTORIA, B.C. CANADA

Presenting topical maritime security issues in a stimulating global environment.

Photo by: Corporal (Cpl) Brandon O’Connell, MARPAC Imaging Services, Esquimalt © 2011 DND-MDN Canada

Conference panels for this event have been designed to cover a full spectrum of security and defence issues, with a particular focus on the latest global maritime developments and its associated challenges, including: Developments in aircraft carriers • Dr. Andrew Erickson, Associate Professor, China Maritime Studies Institute, US Naval War College • Dr. Probal Ghosh, Senior Fellow, Observer Research Foundation • Rear-Admiral Tom Cunningham, Assistant Chief of Naval Staff (Aviation & Carriers), Royal Navy • Rear-Admiral Thomas Moore, Program Executive Officer, Aircraft Carriers, USN Shipbuilding and future naval requirements • Rear-Admiral (USN ret’d) Brad Hicks, Integrated Warfare Systems and Sensors, Lockheed Martin • Rear-Admiral (USN ret’d) Mike Moe, Director of Seapower Capability Systems, Raytheon The illegal movement of people and illicit cargoes at sea • Dr. Peter Chalk, Senior Political Scientist, RAND Corporation • Dr. Andreas Schloenhardt, University of Queensland TC Beirne School of Law • Vice-Admiral Hernando Wills, Chief of Naval Operations, Colombian Navy

Security issues in the Gulf of Guinea • Dr. Martin Murphy, Atlantic Council • Rear-Admiral E.O. Ogbor, Nigerian Navy • Captain (USCG ret’d) Paul Gugg, Head Security Officer, Chevron Shipping Company • Captain (USCG ret’d) Phillip Heyl, Chief, Air and Maritime Branch, AFRICOM Maritime Applications of unmanned and autonomous vehicles • Professor Antonios Tsourdos, Head of Autonomous Systems Group, Defence Academy of UK • Vice-Admiral (USN ret’d) Kevin Cosgriff, Textron Systems • Dr. Mae Seto, Defence Research and Development Canada • Major General (USAF ret’d) Kevin Kennedy, Textron Systems

Find out more about conference speakers and the MSC 2012 programme.

Presented by Royal Roads University

www.mscconference.com In co-operation with Maritime Forces Pacific of the Royal Canadian Navy

Connect with maritime and industry leaders!

Contact the MSC 2012 Secretariat for sponsorship opportunities.

250.472.7644 / msc@dearmondmanagement.com 50 BC Shipping News September 2012

Asia-Pacific Center for Security Studies Sponsored by

BC SHIPPING NEWS

maritime security

Conference to focus on topical maritime security issues

By Nicole Johnson, Asia-Pacific Security Analyst, MARPAC

M

aritime Security Challenges 2012 (MSC12) will be the fifth edition of the highly successful, internationally respected, biennial conference focusing on topical maritime security issues. This year’s conference — hosted by Royal Roads University, in co-operation with Maritime Forces Pacific (MARPAC) of the Royal Canadian Navy, and the AsiaPacific Center for Security Studies — will be held from October 1st to 3rd in Victoria, British Columbia in some of the city’s most prestigious venues.

Many observers have described the 21st Century as a maritime century in view of the world economy’s remarkable dependence on the sea.

Building on the success of previous MSC iterations, MSC12 will bring together subject matter experts and security practitioners from around the world to examine the most complex and challenging issues currently emerging in the global maritime domain.

Over the course of the three-day event, attendees will be given the opportunity to participate in both formal panels and informal networking opportunities with military, coast guard and government officials, academics, policy experts and industry representatives.

The value of this conference is reflected in the support from several major sponsors, including Textron Systems Canada, Lockheed Martin Canada, and Raytheon Canada.

Many observers have described the 21st Century as a maritime century in view of the world economy’s remarkable dependence on the sea. Paradoxically, however, navies of the Western world, particularly following the global financial crisis, have been burdened by a lack of defence resources which could seriously undermine the overall performance of navies and their ability to

conduct unilateral and international security operations. These challenges are most evident when navies attempt to build and modernize their fleets, a process that will be discussed by government, naval and industry representatives during the panel on shipbuilding and future naval requirements.

A separate discussion will also analyze the developments of aircraft carrier programs in China, India, the United Kingdom and the United States.

Carrier programs have become a popular topic of discussion in recent months following reports that the U.K. will only operate one of its two Queen Elizabethclass aircraft carriers, which are currently under construction, and that the U.S. may plan to reduce its carrier fleet in the near future. This reality will likely influence operational capabilities and procurement decisions for the U.S. and U.K., both of which desire to maintain strategic international influence.

These developments can be compared with the carrier programs of India and China — two nations that have experienced a tremendous surge in economic

growth and military expansion, particularly in their carrier forces. These contrasts will be discussed by various experts, including a China specialist from the U.S. Naval War College, and officials from the United States Navy and the Royal Navy. Another nation that has recently engaged in ambitious naval planning is Brazil, which currently has the largest navy in Latin America. An officer from the Brazilian Navy will provide an overall update during a luncheon presentation.

In previous editions of the Maritime Security Challenges conference series, various discussions took place on how to tackle the issue of piracy and its threat to the international shipping industry in the Gulf of Aden and the north-west Indian Ocean. This year’s MSC piracy panel topic, however, will focus on the other side of the African continent where regional navies and coast guard fleets are beginning to battle with criminal organizations in the Gulf of Guinea — the latest “hot spot” for oil production and pirate attacks. An increase in oil demand has

Images from past Maritime Security Challenges conferences.

September 2012 BC Shipping News 51

MARITIME SECURITY led to greater risks of hijackings, which could seriously disrupt much-needed regional economic development. These issues, among others, will be examined by several speakers at this year’s conference, including a representative of USAFRICOM, a Rear-Admiral of the Nigerian Navy, and a security official from a commercial shipping firm, followed by a separate presentation by a world-renown fisheries scientist on the state of the global fisheries.

Transnational maritime crime, notably maritime drug and human smuggling, are widely described as a critical issue currently facing policy makers of the 21st Century. Many argue that criminal organizations benefit from the effects of globalization given that technological developments in trade and communications have enabled illegal maritime activities to evolve and thrive. In this year’s conference, several panelists will examine the challenges associated with illegal movement of people and illicit cargoes at sea, including several subject matter

52 BC Shipping News September 2012

expert academics, as well as the Chief of Naval Operations of the Colombian Navy.

The final panel of MSC12 will focus on the future uses, applications and challenges of designing and operating unmanned and autonomous vehicles.

Despite a number of challenges in their development, including the ability to perceive and respond to threats in uncertain environments, the uses of these vehicles are growing considerably. Many navies around the world are beginning to integrate unmanned surface vehicles into their fleets in an effort to reduce risks to personnel while maintaining security support. The risk of more regionalized threats has also increased the need for unmanned undersea vehicles for littoral and antimine warfare operations. These uses, coupled with the ability to conduct surveillance and deliver increasingly lethal payloads, are anticipated to change the nature of combat, which will be discussed by several industry and defence experts, including engineers engaged

in unmanned and autonomous vehicle development.

The Maritime Security Challenges conference series began in 2005, followed by four other successful iterations that convened world-renown experts to discuss a variety of maritime-related developments and associated challenges. Conference topics have generally concentrated on maritime security threats in the IndoPacific, but have also discussed timely events, such as global anti-terror initiatives, Indian Ocean piracy, climate change, offshore disputes and the emergence of Asia as an economic powerhouse. This MSC series has grown considerably over the past few years with over 200 delegates from 22 countries attending in 2010.

For more information on Maritime Security Challenges 2012 conference, please visit www.mscconference.ca, and be sure to join us on Facebook, LinkedIn, and our conference blog for regular event updates, and further analysis.

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