Tankers, crimes, and fortunes

Andrew Craig-Bennett delves into the past as he worries about today’s growing dark fleet.

Balzac never wrote, “Behind every fortune there is a crime”.

He wrote, in Le Père Goriot, in 1834, “Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait”.

It was Mario Puzo, who, with a respect for the intellectual property of others worthy of a Netflix director, wrote the short and misleading version as the epigraph to his novel The Godfather, and attributed it to Balzac. Mere intellectual dishonesty, the sort of thing that is now considered trivial.

There is an awful lot wrong with the shadow fleet, and we are wondering what is going to happen next. Either nothing happens, and our industry carries on in the way that we are used to, or things go very wrong indeed.

The tanker business hasn’t always been very honest.

I happen to know, and can tell anyone who doesn’t know, that each crude oil has a unique chemical fingerprint which can be shown up using gas chromatography mass spectroscopy, and used to identify the origin of any parcel of crude and any residual fuel oil left after a parcel of that crude has been refined. I know this because, 40 years ago, I was investigating the theft of fuel oil on a large scale – a large scale, no mere adjustment of time charterers’ bunkers, as widely practiced by some dry cargo owners – but theft of oil cargo on a large scale by tanker owners.

It’s a point that anyone looking to buy and to transport oil that might possibly have come from Russia may like to keep in mind.

Thirty years ago, if one were responsible for fixing a large tanker on behalf of her owners, one might drop into an office in New Bond Street and chat to a courteous gentleman of a certain age, himself the scion of a great tanker owning dynasty that had fallen on hard times, about taking a couple of million barrels from the Middle East to apartheid South Africa, in defiance of the Arab League embargo, everything arranged, no questions asked, and one of the great fortunes in today’s tanker industry is widely said to have been materially improved by doing just that, very regularly.

Another of the great fortunes of today’s tanker industry was associated, in the minds of those in the know at that time, with some rather odd dealings in oil cargoes at the time of the Iran-Iraq War.

The tanker industry hasn’t always been the responsible and respectable end of carriage of goods by sea. We just like to think that it is, now, because huge efforts have been put into making it so. Unfortunately we all left the stable doors wide open, and our horses have already bolted, harnessed to the cart that is about to be driven through the reputation of modern merchant shipping.

And there doesn’t seem to be much that we can do about it unless governments want to do something, and as usual, some governments don’t want to do anything other than turn a blind eye to dishonesty.

This has suited us for decades. We are all used to the mountains of legal fictions on which we operate.

If you are a government, and you want to know where a cargo of crude or heavy fuel oil came from, regardless of what the documents say or where it has been transhipped, take a sample and analyse it.

That’s if you want to, of course. But let’s suppose a government, for reasons of its own, doesn’t want to? The documents all look perfectly good.

What about the carrying tanker’s insurances?

Here’s another little problem ; back in the 1960s, governments didn’t want to trust those fly by night P&I Clubs and their possibly shonky reinsurers. They wanted to trust each other. And so a tanker’s CLC certificate, her evidence of insurance under the Civil Liability Convention, without which she can’t carry a cargo of persistent oil in bulk, is issued by her flag state against a blue card issued by her liability insurers. And if her flag state chooses to issue a CLC Certificate against a blue card issued by Cheap and Dirty Insurance Company Ltd, paid up share capital one hundred Somali shillings, then a port state may conclude that there is nothing to be done.

Do we perhaps have a problem ?