The Shetland Oil Disaster: The cut-price recipe for catastrophe

FUTURE oil disasters are most likely to be caused by the effects of the ageing world tanker fleet and the increasing number of vessels registered with poorly regulated and under-resourced countries.

The current problem stems from the drop in oil prices and the over-capacity of the tanker fleet. Since the oil boom of the 1970s there have been too many ships chasing too little business. This has led to oil companies forcing down freight rates, resulting in tanker operators cutting costs.

One way of doing this is to use increasingly old vessels, such as the Braer, 17 years old, and the 19- year-old Aegean Sea, which polluted north-western Spain after running aground near La Coruna on 3 December.

While all ships are supposed to be regularly inspected, older vessels are more likely to break down and suffer structural damage. In 1991, almost three-quarters of all tonnage lost was more than 15 years old. Despite the Braer being passed as seaworthy in the past six months, it is not surprising that it was carrying an extra four-man Polish maintenance team when her engines stopped off the Shetlands. Her ageing parts would need continuous repair and replacement.

While elderly vessels pose an inevitable problem with deteriorating equipment, it is human fallibility, or a combination of the two, that causes most disasters: 80 per cent of accidents at sea are attributed to human error, 90 per cent in collisions and groundings.

Falling standards of crews and management are a consequence of cost-cutting. One of the simplest ways to reduce overheads is to register a ship with a country that has low charges and allows the use of cheap labour. The system, known as 'flag of convenience', is growing rapidly. Between 1987 and 1992, the Liberian fleet grew by 7 per cent, Cyprus 30 per cent, the Bahamas 120 per cent and Malta almost 487 per cent. Nearly a third of the world's tanker fleet is under the Liberian or Panamanian flags.

Savings come from using cheap labour, often Filipino or Korean, which can cost about half a British crew by avoiding paying pension contributions, national insurance and higher tax rates. The ship registration fees are also relatively low.

Last year, the Braer's Filipino crew complained to the International Transport Workers' Federation that they were overworked because of undermanning.

The mixture of nationalities can lead to language problems. Indeed, the coastguards and the helicopter pilots both reported difficulties communicating with the Braer crew, which comprised three Greeks, 31 Filipinos and four Poles, during their rescue.

While there is no suggestion that the men on the Braer were not properly qualified, the standard of training in the Philippines is variable and seamen's certificates can be bought.

Many flag-of-convenience countries also lack the resources to enforce standards. In 1991, the Bahamas had 973 ships on its register, but only 15 full-time surveyors. Cyprus had more than 1,350 ships but only nine surveyors. Like many other experts, Julian Parker, secretary of the Nautical Institute, believes this lack of resources is part of the attraction for unscrupulous owners. 'Some companies that own rustbuckets simply move about until they find a country that will allow them to trade,' he said.

Flag-of-convenience vessels make up about a third of the world's merchant tonnage, yet account for about 60 per cent of its losses.

However it is too simplistic to blame the flagging system and an elderly fleet for all the problems. This was demonstrated by the disaster involving the American registered Exxon Valdez, which spilled 11 million gallons of oil off Alaska in 1989. Furthermore Liberia - with whom the Braer is registered - has a better safety record than the world's average and is marginally safer than the United States.

How then can the world's tanker fleet be made safer?

'You can never design a tanker that will not spill oil - for as long as they sail on the ocean there will be disasters,' believes Professor John King, of Cardiff University's department of maritime studies. This view is shared by most oil and marine experts. Whatever technology is used, it is impossible to guard against nature and human error. The oil lobby argues that although the number of accidental spills has risen in the past couple of years the trend since 1974 has been downward.

The Shetland disaster has hardened the resolve of environmentalists and shipping regulatory groups to improve safety. But it is unclear what action would be effective or affordable.

Following the grounding of the Braer, a single-skin vessel, there were calls for the compulsory introduction of double skins on all tankers. This was the United States' response to the Exxon Valdez. But the merits of double skins are doubtful. Many designers believe a double-skinned hull would protect the tanker from low-speed groundings and collisions but would have no effect in more serious accidents.

There is also a danger that gas could build up between the two skins of the hull, causing a risk of fire or explosion. Almost all experts believe a double skin would have failed to prevent the Braer's hold rupturing. Nevertheless, the International Maritime Organisation, the United Nations body responsible for regulating world shipping, has accepted the concept. From next year all new tankers will be expected to have double-skinned hulls.

The IMO will also require tankers more than 25 years old to be brought up to the standard of newly-built vessels after 1995. It remains to be seen whether the IMO members implement the new measures - the IMO has a reputation in some quarters as a 'toothless talking shop'.

Alternative types of hull are available. The mid-deck tanker design divides the fuel tanks horizontally into upper and lower spaces. If the lower tanks are holed, the pressure of seawater is supposed to keep the oil from flowing out. If the upper section is damaged, only half the fuel will be lost.

Following the Valdez incident, the US also introduced unlimited liability on tanker owners for the cost of cleaning up an oil spill and for compensating people affected. The European Parliament has called on European countries to take similar action. The EC is looking at tightening the rules governing tanker traffic following the accidents with the Braer and the Aegean Sea.

Questions also arise about the quality of crews and managements. The IMO is drawing up an agreement that lays down standards of competence, including training of crews, and compliance among the countries that operate flags of convenience.

It is also concerned about the growing number of classification societies - which provide a shipping 'MoT certificate' - as some of their standards and resources are poor.

While many of these proposed improvements should make a difference, there remains a fundamental contradiction between having cheap fuel and keeping the world's oceans and coasts relatively free from oil.

Tanker and oil companies, suffering from low prices and the recession, are reluctant to invest large sums in further safety measures.

----------------------------------------------------------------- Safety record of merchant fleets (2m tons and above) 1987 to 1991 ----------------------------------------------------------------- Nationality % lost of fleet Nationality % lost of fleet (Flags of convenience in caps) ----------------------------------------------------------------- ST VINCENT/GRENADINES 1.00 Singapore 0.23 South Korea 0.95 LIBERIA 0.20 CYPRUS 0.90 Sweden 0.19 MALTA 0.81 Netherlands 0.17 VANUATU 0.70 China 0.15 PHILIPPINES 0.58 Brazil 0.15 Turkey 0.50 Taiwan 0.11 Greece 0.48 Denmark 0.10 PANAMA 0.44 Poland 0.10 India 0.44 Canada 0.09 BAHAMAS 0.38 Romania 0.07 Italy 0.33 Germany 0.06 Norway 0.31 France 0.04 Indonesia 0.30 BERMUDA 0.04 Yugoslavia 0.29 Spain 0.04 World average 0.29 UK 0.04 HONG KONG 0.28 Russia 0.02 USA 0.23 Japan 0.02 Australia 0.02 ----------------------------------------------------------------- Source: The Institute of London Underwriters -----------------------------------------------------------------