Naval Interest:

THE TIGER VISITS THE DRAGON

The Tiger and the Dragon are not best friends but the
Dragon 

prefers "soft power" at the moment, and the Tiger is not a 

war monger. So once in while they visit each other just to

confirm that neither is currently intending on devouring the 

other. It has been six years since Indian Warships ("The 

Tiger") have visited the Dragon's lair (Shanghai). On June 13, 

2012 the Indian warships SHIVALIK, KARMUK, and SHAKTI 

and their combined crews of about 1400 sailors started a

a goodwill tour on the Dragon's turf. 

 In the U.S. and British navies we call such activities "showing 

the Flag". Despite the casual sounding name such fleet 

activities are really very formal diplomatic missions. It takes a 

mature and well developed navy to conduct such operations, 

naval forces are the only armed forces that regularly engage 

in diplomacy.The Indian fleet at the time of this visit was

led by Vice Admiral Anil Chopra, Chief of the Eastern 

Command.The Vice Admiral met with the top officials of the 

Chinese People's Liberation Army's Navy who visited the 

ships.

 This was the first visit to China in six years by Indian naval 

vessels. Both nations have made serious efforts to

demonstrate emerging rapprochement, despite border 

disputes and misgivings about each other's rise in economic 

and naval power. The ships visit is considered a high point of 

defense exchanges this year. Both countries have designated 

this a year of "friendship and cooperation". Indian 

ambassador to China S. Jaishnakar was in Shanghai

and told Indian news services that the ships visit was 

planned to make maximum public impact. There was public 

visitation,and Chinese school children and naval band 

performances. 

Our own take on the visit of the Tiger with the Dragon is 

simple. If India was as weak as Vietnam or the Philippines 

this wouldn't be happening. The Dragon only deals with the 

strong it simply eats the weak. Earlier in the week the Indian 

Navy demonstrated its friendship with the Dragon's other 

powerful neighbor, the Land of the Rising Sun. The question

that is yet to be answered is, will the combined naval power 

of India and Japan be used only to secure their own borders 

or will these two powers combine to apply pressure on the 

Dragon to also deal fairly and peacefully with its weaker 

neighbors on the South China Sea?  Its a matter of "face". If 

China is seen as dealing fairly with its neighbors as opposed 

to giving in to "American demands" it is more likely to settle 

the maritime boundary issues in accordance with international 

law. The Dragon is voracious with serious territorial 

ambitions, but not stupid or politically unaware. It prefers soft 

power, but the emphasis is always on power.

 India and Japan are regional powers. Are they willing to use 

that power in combination on behalf of the weaker nations of 

the region? The United States has been the World's 

policeman for too long. The image between Cop and Bully 

has become blurred. If India and Japan were to be insistent 

on good dragon behavior, the United States could fade into

the role of auxiliary policeman. The Dragon knows that it 

would have little chance against a combination of India and 

Japan and that a Japan facing China's guns would never be 

alone. With the U.S. Pacific fleet entering as back up the 

Dragon would be headed to the bottom of the sea. But with 

the United States not being a shrill voice at the table the 

Dragon can afford to be gracious with its neighbors, even if in 

truth it would cheerfully eat them all if it could. The Indian 

Navy is a force in the world, the world is waiting to see if it will 

also become a moral force.

 

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Merchant Marine and Marine Environmental Safety:

The Coast Guard Safety Equipment Approval Process; Why Can't the Coast Guard Deal With "Best Available Technology"

 The Kevin Costner and Stephen Baldwin Law Suit is back from a New Orleans Jury. The Lessons for the Maritime Industry are Deeper than the Headlines

 Famed Hollywood actor Kevin Costner invested millions of dollars earned in the film industry in a little known corner of the maritime industry. He helped develop oil spill clean up technology  which offered the opportunity to actually recover and reuse oil lost at sea. The technology, we can assure you, works and it works better than the usual equipment deployed in the wake of major oil spills.

  For investors looking for something truly "green" to invest in, the Costner and friends company "Ocean Therapy Solutions" looked like a winner. Other possibly green minded Hollywood personalities also invested , among them actor Stephen Baldwin and his business associate Spyridon Contogouvis. 

 At one point Costner possibly lost as much as $20 million on his earliest attempts to develop and market the product. His major problem as we see it, was that he had a non Coast Guard approved product in what was basically a compliance market. While he had the best available technology the Coast Guard routinely operates its equipment approval processes on the basis of compliance with recognized codes and standards. 

 The Coast Guard seems to struggle and consume an inordinate amount of time and make incredible demands on those approaching it with major improvements in technologies seeking the all important "Coast Guard approved label. Oil spill clean up devices are just one example we are familiar with. The Navy and the Coast Guard itself buy "throw-able devices" for the rescue of crew and passengers lost overboard that are not Cost Guard approved simply because they know these products are superior, best available technology. Meanwhile commercial vessel owners continue to invest in the old style "ring buoys" because they are Coast Guard approved and they are obligated to have the prescribed number of these devices aboard. Such owners are loath to then go out and buy the "best available technology" just to have it. Safety equipment doesn't generate direct revenue for anyone but the sellers of safety equipment. So an antiquated approval process unable to deal efficiently with approval applications based on "best available technology" works to keep major improvements off the basically compliance based market.

 In the case of "Ocean Therapy Solutions" the 2010 British Petroleum Oil Spill in the Gulf of Mexico first pushed up the urgency of getting Coast Guard approval, then the desperation of British Petroleum led to a major purchase of the "best available technology" regardless of the status of the Coast Guard approval.

 Caught up in the uncertainty were Costner, Baldwin and Spyridon.

Costner apparently was willing to risk all. Baldwin and Spyridon sold out just before British Petroleum did the unthinkable and made a firm commitment to buy regardless of Coast Guard approvals. Baldwin and Spyridon sold their stock in Ocean Therapy Solutions for approximately $1.5 million. In doing so they missed out on a potential windfall that they estimated to be in excess of $17 million. Baldwin and Spyridon sued Costner.

 We can now report that the New Orleans jury found for Costner who maintained throughout the trial that he did not withhold any information from stockholders and that Baldwin and Spyridon were aware of the "tentative" commitment of British Petroleum to buy the technology. The sale of their stock, according to New Orleans press accounts, took place before the final actual signing of a contract for sale.

 Our purpose isn't to applaud or second guess the jury. We simply wish to point out that the root source of the struggle of Ocean Therapy Solutions began with an antiquated, inefficient and unresponsive Coast Guard safety equipment approval process and that this process keeps important lifesaving technological improvements off the market. In the Ocean Therapy Solutions case we don't know how many other stockholders like Baldwin and Spyridon became disillusioned and began to despair that their investment would ever make a profit. But we are dead certain that a maritime industry outsider or group of outsiders would be surprised by the inability and reluctance of the Coast Guard to approve best available technology. If the oil recovery equipment in question had obtained approval in a reasonable time the company would have followed a more normal growth pattern. It may have prospered or it might have even been knocked right out of the market by even better innovations. But the nearly impossible approval process bred investor frustration and deterred any better technology that might be out there. 

 Ours is a very complex and enclosed area of economic endeavor with lots of quirks, not always visible to even the most astute business man from outside this industry. Consider the barge surplus that began to manifest itself in the inland towing industry in the 1980s. The surplus was driven in large measure by medical doctors and other non maritime investors looking for a better return on their investments than what the stock market was producing at the relevant time. These outsiders invested heavily in new barges and at first prospered. Unfortunately, none of their investment counselors and brokers knew when to tell them to stop. Seemingly without warning, the barge market became flooded and cargo rates went down and resale value of even new barges plummeted for a while. Everybody lost. experienced barge lines lost revenues for a while, though their fleets were upgraded, some lost so much that there was some consolidation among the operators. As a result, a smaller number of barge companies operate today than before the doctors started to invest. Most of the doctors and other outside investors lost the lion's share of value in their investments.

 Costner, Baldwin  and Spyridon take away from the lawsuit an appreciation of how bitter things can become when investors who originally come aboard an enterprise for the long haul lose confidence. Those of us who are professionals in the maritime sector should take a few lessons away as well. First the primary regulator of our business, the U.S. Coast Guard needs attention across a broad spectrum of issues related to the regulation of our activities not just the equipment approval process. Second it is highly unlikely that the needed reform will come from either our hopelessly gridlocked Congress or some other logical outside source like the Department of Homeland Security's (DHS) Inspector General's Office. According to the National Mariner's association in the last four years the DHS Inspector General's Office of Audits has systematically eliminated or reassigned every real maritime expert they ever had and now appears incapable of performing any type of compliance or performance audit of Coast Guard activities. Of course, if one asks the DHS Inspector General about it you will be told that that they have "experts".  But check with the National Mariner's Association which tracks the operations of the office and you will learn that only one licensed merchant marine officer with a technical degree in maritime operations is still employed and he was removed from his lead position in the Coast Guard audit and reassigned non maritime duties. The "experts" the Inspector General speaks of are simply accounting trained general auditors that the Assistant Inspector General in Charge of Audits self designates "experts". They have no third party certification as such, and no occupational licenses related to marine operations, you would be hard pressed to even find a Navy or Coast Guard veteran in the group. Certainly no one in the maritime industry would recognize any of the DHS Inspector General's Coast Guard audit team members as a "maritime expert".The regulatory environment in our industry is a mess, but not the only mess affecting the investment outlook.

 At the time of the barge oversupply fiasco the WORKBOAT Magazine "Workboat Index" of related common stocks either wasn't being published or wasn't as well known as today. This first of its kind stock index is so far one of far too few investor's tools for learning about maritime sector investment opportunities. We never seemed to have evolved real investment counselors who know our industries. We "salty dogs" are not the only sources of innovation or investment in our industries. Sometimes great innovations come from unexpected , even inexperienced sources. We are by nature conservative, for ours is a dangerous calling and caution is a virtue. Innovations must be tested. But we must find a way to more efficiently test for best available technologies and better ways to guide new investors through the minefields of the group of businesses that admiralty law refers to as "marine adventure". The as yet unfinished experience of Ocean Therapy Solutions is far too common, and far too discouraging to the new comers to our "adventure". 

 As far as we know at the moment the oil recovery units still have not received final Coast Guard approval. If that is correct than the compliance market is still closed to this improved and proven technology and it will take another massive  environmental disaster to generate any more significant sales. Those of us who have been gainfully employed and invested in the maritime sector need to start examining our industry and demanding better service by the government regulators. We also need to encourage anything that generates more confidence in outside investment. We can not afford many more sad tales like the saga of Ocean Therapy Solutions. Hollywood wasn't a direction from which we were expecting investment cash and technological innovation but we sure prefer these American's to China as a source of capital and ideas. Who knows where the next great maritime idea will come from? What can we do as an industrial community to make the risks more transparent, make the predictions of reward more accurate, and the regulatory way more smooth? What is the price of continued inaction?   

            
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 Portable Running Light

Sailing, Rowing,  Boat Building,  Pirates  Even!

A VIDEO VISIT WITH THE LONG BOAT COMPANY!

              



The Long Boat Company is a bit like wilderness; you may not be able be aboard as often as you would like but it's good for the soul just to know its there. I first became aware of the existence of the Longboat company when I encountered former American Admiralty Bureau Examiner and retired Coast Guard Officer Bill Riley one night in Annapolis wearing a straw "boater" with horns.

  "Viking Summer Dress Hat" he nonchalantly explained. Then he explained how he belonged to this crew of viking boat replica builders and reinactors and general row and sail abouts who basically just like to row and sail about the Chesapeake in an authentic Viking long boat recreation, in or out of Viking costume.  They also generally like to consume prodigious quantities of "mead and ale" , or "whatever beer you got". The Longboat company generally, actually, usually, more or less sorta, avoids actual looting and pillaging, but they always like to look and sound the part in or out of costume, Can I hear an "ARRRRRRRRRRRR!".

 Really doesn't it do that part of your maritime heart that secretly admires the daylights out of the fictional "Capt. Jack" good to know that on any given day from March through November and at other unpredictable times, somewhere on the Chesapeake's quaint waterfronts there is a viking replica with a bedraggled boat keeper in it who upon seeing you, in your Sunday best with your best girl on your arm, will greet you with a warm and friendly "A goat and two pigs for the woman, mate!

 The hyperlink below takes you to a short video on the Longboat Company by early AAB commentator "SWORDWHALE". Apparently our own blog member "Teanna" is also a Longboater. . We can't all be Longboaters but ain't it good to know they are out there ? ARRRRRRRRRRRRRRRRRRRRRR!


http://www.youtube.com/watch?v=VsSthLD-DD8

Sailing, Rowing,  Boat Building,  Pirates  Even!

A VIDEO VISIT WITH THE LONG BOAT COMPANY!

              



The Long Boat Company is a bit like wilderness; you may not be able be aboard as often as you would like but it's good for the soul just to know its there. I first became aware of the existence of the Longboat company when I encountered former American Admiralty Bureau Examiner and retired Coast Guard Officer Bill Riley one night in Annapolis wearing a straw "boater" with horns.

  "Viking Summer Dress Hat" he nonchalantly explained. Then he explained how he belonged to this crew of viking boat replica builders and reinactors and general row and sail abouts who basically just like to row and sail about the Chesapeake in an authentic Viking long boat recreation, in or out of Viking costume.  They also generally like to consume prodigious quantities of "mead and ale" , or "whatever beer you got". The Longboat company generally, actually, usually, more or less sorta, avoids actual looting and pillaging, but they always like to look and sound the part in or out of costume, Can I hear an "ARRRRRRRRRRRR!".

 Really doesn't it do that part of your maritime heart that secretly admires the daylights out of the fictional "Capt. Jack" good to know that on any given day from March through November and at other unpredictable times, somewhere on the Chesapeake's quaint waterfronts there is a viking replica with a bedraggled boat keeper in it who upon seeing you, in your Sunday best with your best girl on your arm, will greet you with a warm and friendly "A goat and two pigs for the woman, mate!

 The hyperlink below takes you to a short video on the Longboat Company by early AAB commentator "SWORDWHALE". Apparently our own blog member "Teanna" is also a Longboater. . We can't all be Longboaters but ain't it good to know they are out there ? ARRRRRRRRRRRRRRRRRRRRRR!


http://www.youtube.com/watch?v=VsSthLD-DD8

MERCHANT MARINE HISTORY

THE JONES ACT FLEET'S FINEST HOUR

An Evacuation Bigger Than Dunkirk

 Image USCG

  In our "Merchant Marine Interest" section one of the books that we recommend for every American to read is titled "THE WAY OF THE SHIP". We highly recommend this book because it is the first real attempt by maritime historians to effectively describe the importance and national security contributions of our domestic fleets that carry people, and goods and perform services on our inland and coastal waters. We have taken pains to explain the vital role that these commercial work vessels and their crews have played as a reserve for our traditional deep sea Merchant Marine which is often weakened in times of peace. We have lamented the number of times the Congress has failed to act to protect this domestic fleet from foreign competition. We have often used examples from World War II and Vietnam to illustrate our high regard for the vessels and crews of these domestic fleets. We had every intention to tell you as soon as we could about the latest example of how much this fleet and its crews can contribute to national security in the form of their activities in the evacuation of Lower Manhattan in the wake of the terrorist attacks of 9/11. A maritime evacuation, bigger than Dunkirk. But we really can't tell the story better than the professional cinematographers and narrator Tom Hanks in the video that we have hyper-linked to below.  

http://www.youtube.com/embed/MDOrzF7B2Kg?rel=0

MERCHANT MARINE INTERESTS:

THE CONTINUING SOVEREIGNTY DISPUTE OVER THE FALKLANDS ISLANDS DAMPENS OIL EXPLORATION.

Editorial note: 3/2/2015 Since publication Russia has formed an alliance with Argentina and announced that the Bear favors the Argentine claim. So the dispute continues with new fuel provided by Russia. Our analysis stands. Argentina has no claim under international law. 

Falkland Islands blank.svg by Hogweard  Creative Commons

 Argentina just doesn't get it. Both traditional and codified international law recognizes only one indisputable claim to sovereignty, effective settlement. Only the British have ever effectively settled the Falklands. There are no Argentine citizens on the islands so no one is ever likely to vote for a transfer of sovereignty. Illegally, in the 1980s Argentina attempted to perfect their claim through an illegal resort to armed conflict and were roundly defeated by the British. So no matter who may have been the first western sailor to spot or land on the Falklands, it was the Brits who stayed, defended against all challengers, built towns, and farms, and ports , and established the rule of law. The issue is decided both by effective settlement and force of arms. Yet Argentina is at it again.

 Argentina has publicly stated that it considers oil and gas exploration of the Falkland Islands illegal and threatens international drilling contractors with legal action if they do not obtain permits for exploration in Argentine waters when exploring anywhere in the Falklands. The Energy Secretariat of Argentina has said that Desire Petroleum , Rockhopper Exploration, Argos Resources, Borders and Southern Petroleum, and Falkland Oil and Gas Ltd. do not have valid permits to explore in Argentine waters. Argentina threatens legal action if exploration by these companies continues 

 In a disputed sea area like the waters surrounding the Falklands it is difficult to say with certainty where the Exclusive Economic Zone of the Falklands stops and the Exclusive Economic Zone of Argentina begins. But two things are certain; each is entitled to a clearly defined exclusive economic zone (EEZ) and the Argentine claim can never extend to the passages between the islands. But the claim of Argentina in this matter is nothing more than another sour grapes attempt at a land grab without use of force of arms, but rather with the use of lawyers to make business dealing that should be straight forward; complex and annoying. 

 The world, the Falklands, and Argentina all need the oil. Marine drilling contractors need recognized permit processes and royalty arrangements to bring out the oil. Argentina does have legitimate claims to an EEZ that abuts the EEZ of the Falklands, but they are neighbors , not a break away territory of Argentina. Everybody has neighbors, claims of real estate ownership based on proximity can't be valid in the face of long standing effective settlement and defense by force of arms. Argentina would be better served negotiating proper EEZ boundary lines. It's over Argentina, stop acting like a bunch of spoiled Nazis the people of the Falklands are British by choice, language, affinity, and family ties. The people of the Falklands have a right to self determination and they have not chosen Argentina, and after you invaded their homes with guns , they are never likely to choose you. So settle the EEZ business realistically and let's get on with the oil exploration. 

 If you resort to the gun again by going after oil exploration vessels in the vicinity of the Falklands we foresee you being pushed back again by naval force. If the EEZs question has to be resolved by force of arms, the world will recognize a British right to carve a decent security zone out of what should be your otherwise rightful EEZ. 

 Grow up Argentina! Maybe if you could learn to be a good neighbor and a stable democracy in a hundred years or so your proximity might finally work for you. First, the Falklanders have to not fear you. A period where you allowed them to use your proximity to mutual economic advantage, a period of free travel between the Falklands and the mainland, could lead to some intermarriage.  Great Britain has never said that it would hold the Falklanders to the Crosses of St. George and St. Andrew by force against their wills. Britain has only come to the defense of a people who feel they are British, whose homes you invaded. Your Nazi like behavior has set back any possibility of unification of the Falklands with the mainland by at least one hundred years. Argentina, you will never be family with the Falklands if you can not be peaceful and cooperative neighbors. And you will never force those Brits off their islands.

 .

 

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                       Lonely Planet ,The Falklands

Naval Interest:

How Far Will The Dragon Swim?

THE TIGER VISITS THE LAND OF RISING SUN:Indian and Japanese Naval Units Exercised Together Recently.

 The "Tiger" (Indian Navy) transited out of the Indian Ocean, passed the Dragon's lair (Chinese Coast) and entered the waters of the "Land of the Rising Sun" during the week that started June 6, 2012. India and Japan both have concerns over a certain swimming dragon that lives between them. Supposedly, this concern had little to do with their recent joint naval exercise which focused on search and rescue operations. The Dragon, no doubt, saw things differently. Indian and Japanese naval forces have exercised together before, but as part of international exercises that involved additional navies. This time India and Japan got together on their own with no third party broker. 

 Four vessels of the Indian Navy participated in the exercise; a destroyer a supply ship, a frigate, and a corvette. The Japanese Maritime Self Defense Force (JMSDF) provided numerous naval aircraft and two destroyers. The exercise was the result of a visit to Japan last year by Indian defense minister A K Anthony. Later a number of Japanese naval vessels will travel to Indian naval facilities.and take part in another military exercise. 

 The names of the participating Japanese naval vessels were not available to us at press time. We also have relatively little information right now on the Indian exercise participants. We do have the following however,  The Indian ships included a SHIVALIK class frigate, a KASHIN class guided destroyer, the INS RANA was probably involved since she was in the immediate area having just finished a visit and exercise with South Korea.

 While the exercise was low key and focused on search and rescue the dragon could not help but notice the following points which we noticed. First this exercise was strictly bilateral, there was no third party broker, most notably the United States. This may have been an exercise based on search and rescue operations but these weren't salvage tugs participating, but powerful warships of both nations. Navies that "cooperate" in missions like search and rescue, and humanitarian operations have a much easier time in cooperating in combat operations if the need arises. Extensive "cooperation" can lead to near virtual "interoperability" comparable to the NATO fleet. Clearly the Tiger and the Land of the Rising Sun are intent on keeping their sovereignty and territory intact, with or without a "big brother" in the form of a United States naval commitment. 

 While India and the United States continue to hold each other at arms distance over a variety of issues, it is virtually inconceivable that the United States would not come to the military defense of Japan. The United States has committed to increasing its Pacific Fleet even while absorbing budget cuts. In the face of the independent resolve of Japan and India alone, the dragon my find long distance swimming not as attractive as it once thought. The challenge to the United States is to find a way to resolve differences with India, the world's largest democracy, and present a united front against all of the Dragon's overseas territorial ambitions that run counter to traditional international law. Our thought is that such a united front need not have an American face.

  At stake are the legitimate territorial sea and exclusive economic zone rights of our stalwart but weak ally the Philippines, and China's weaker neighbors like Vietnam, as well as our use of important trade routes. India, with its relatively non aligned credentials, could be an honest broker in forums where these maritime boundary disputes are eventually determined. By contrast the United States and its closest allies in the area would present a "face" issue for the Chinese leadership in these matters. India and Japan are the most powerful states directly affected by the Dragon's maritime territorial ambitions.  The United States has several horses in this race but no territory. One has to wonder if we wouldn't be well advised to let Japan and India take the lead in both political demands and naval presence while we insure that the Dragon understands that no matter how big the swimming dragon grows, the U.S. Pacific fleet will put its throw weight behind Japan and India if push comes to shove. However, out of respect for the greater immediate stake that India and Japan have in the good behavior of the swimming dragon, and acknowledgement of the fact that we have no territory at risk; we are content for the time being to simply back the hand of these two strong regional powers.