Iran Tanker Safety Risks Rise as Ship Classifiers Get Forced Out

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December 5, 2012

By Jonathan Saul

LONDON, Dec 5 (Reuters) – Western pressure that forced foreign ship classifiers out of Iran has increased safety risks, including the danger of an Iranian vessel spilling oil on another country’s coast, the chief executive of Lloyd’s Register said.

Last month, the China Classification Society became the last of the world’s top companies in the field to confirm it had stopped verifying safety and environmental standards for Iranian vessels – a requirement for insurance and access to ports.

British classifier Lloyd’s Register, the oldest in the industry and still among the biggest, said in April it had withdrawn from Iran, citing sanctions pressure.

“We are going into the unknown, absolutely. When you have internationally trading assets or assets that may affect other nations, then the matter of safety should not become a political tool,” its chief executive, Richard Sadler, told Reuters.

“The implications are that we have safety critical assets at sea for which the leading experts in safety are not verifying those ships. What is going to be the effect on somebody else’s coastline if it goes wrong?” Sadler said in an interview on Wednesday.

China and other countries in Asia, including South Korea, continue to buy Iran’s oil, but the loss of major ship certifiers has raised concerns over the quality of insurance coverage and the future maintenance of Iranian ships.

“Even though the trade has dropped, there are still Iranian ships out there trading. I am not saying they are running them as substandard but we have less control over them,” Sadler said.

“When a ship trades outside Iran, if it fails because of poor maintenance, because of poor compliance with international regulations, the effect of an oil spill is going to affect other nations.”

Iran is under growing pressure over its nuclear program, which the West suspects of having a military purpose despite Tehran’s denials.

Companies are cutting ties with its vital shipping sector, which transports most of its crude oil, for fear of losing lucrative U.S. business.


Lloyd’s Register’s annual business with Iran was around three million pounds ($4.8 million), compared with hundreds of millions of dollars in contracts in the United States.

“Iran is probably one of the most highlighted areas where we walked into a political minefield,” Sadler said.

Sadler said there was U.S. pressure and the company, which is 100 percent owned by a charity, took a “pragmatic” decision.

“We were told if we continued it would put our other businesses at risk. We run this company as a commercial company and we cannot afford to exclude America from our activity,” he said.

“This is such a big political issue. No matter what a good classification society says, whilst it maybe academically right, the political pressure will override the academic logic of what I am saying.”

The world’s top 13 certifiers are all members of the International Association of Classification Societies(IACS) and some of them had provided Iran with cover.

The IACS classes more than 90 percent of the world’s merchant fleet. There are more than 50 classification societies.

Other IACS members, including Germany’s Germanischer Lloyd and France’s Bureau Veritas have left Iran in recent months after being targeted by U.S. pressure group United Against Nuclear Iran (UANI), whose board includes former U.S. ambassadors and former U.S. and British intelligence chiefs.

UANI, which is funded by private donations, defended its campaign against certifiers.

“It is rather disingenuous to portray business with Iran as an exercise in public safety, given how many companies and individuals stand to profit from it,” a UANI spokesman said.

“Iran’s shipments are illegitimate, and as such no legitimate business should be certifying them.” ($1 = 0.6209 British pounds)

(Editing by Anthony Barker)

© 2012 Thomson Reuters.

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