According to a Forbes report, EU Ship Database has raised a fresh storm by questioning about the Japanese owner of Mauritius Oil Spill ship.
What is it?
The Indian Ocean island of Mauritius continues to face an unprecedented ecological, human health and economic impact from the devastating oil spill of August.
At the center of the controversy lies the Wakashio bulk carrier, the cause of the disaster. Now, an important EU Ship Transparency Database, called EQUASIS (Electronic Quality Shipping Information), administered by the European Maritime Safety Authority in Lisbon, Portugal, is raising more questions about the Japanese owner of the Wakashio.
With demands growing for a full international inquiry into how the bulk carrier – one of the largest ships in the ocean – came to crash into a network of internationally protected nature reserves along Mauritius’ coral reefs, questions are starting to be asked about the business operations of the vessel owner itself, Japan-based Nagashiki Shipping Co Ltd (reportedly known as Changfeng Steamship company in Japan). This is particularly relevant as Mauritius prepares its multi-billion dollar legal case for damages from the vessel’s insurers.
Mismatch in Statements
There is a growing mismatch between statements made by the company’s representatives, what is listed on the company’s website and what international shipping databases are showing.
Addressing Secretive Shell Companies and ‘Flags of Convenience’ in global shipping
One of the biggest reasons for this opaqueness is the widespread use of secret offshore shell companies by the global shipping industry. 70% of global shipping are registered with the six major ‘Flags of Convenience’ countries (Panama, Liberia, Malta, Marshall Islands, Singapore, Hong Kong) whose registration system makes it easy to hide shipping assets and limit how much multi-billion dollar shipping companies have to pay out in the event of an environmental catastrophe as was seen with Mauritius.
Although Nagashiki Shipping is based in Japan and presents itself as a Japanese Shipping Company with a long maritime history in Japan, not one of its vessels are registered in Japan. They are all registered in ‘Flags of Convenience’ nations, such as Panama, the Marshall Islands and Liberia.
In previous meetings over the past decade, the G20 has taken on free trade, climate change and tax transparency. Global shipping lies at the nexus of all three, and has been left without sufficiently strong and independent international oversight. With 80% of world trade passing through the economies of the G20, and major changes needed to wean the industry off fossil fuels in the next decade, this may be the right window to intervene, especially with a new U.S. Presidential team coming into office.
The failure of the UN Shipping Regulator, the IMO, to take action last week on shipping emissions and Arctic pollution once more reminded the world that public trust has been completely eroded with the UN-affiliated shipping institution. Rather than being multilateral institution representing safety of seafarers, coastal communities, tax authorities and the planet, the IMO is now largely regarded as a trade body primarily focused on the interests of the global shipping industry.
The case of the Wakashio is a perfect case example for why wholescale shipping reform and data transparency is needed to improve vessel safety and sustainability.
EQUASIS Unexplained Records
Shipping information is available under a range of databases. One of those databases is called Electronic Quality Shipping Information System or EQUASIS, that is administered by the European Maritime Safety Agency, based in Lisbon, Portugal.
It was established as a joint project by the French Government and the European Union, is free to access with just a simple registration, and provides all public information on vessels to bring transparency to the shipping industry.
A quick look through the database reveals some unexplained records concerning the Wakashio.
Insurance Issues
Questions about Wakashio’s insurance
The international law under which Mauritius will be filing for insurance payout, the 2001 Bunker Fuel Convention, is very specific on the need for vessel insurance. Indeed, many ports would not admit a vessel without having insurance.
However, questions have been raised about what sort of insurance the Wakashio had.
The Wakashio was defined as a Total Constructive Loss on July 25 2020, the day it ran aground. This should have been the last time any insurance could have been taken for the vessel. On August 6, oil had started leaking. And yet, according to the EU’s EQUASIS database, the vessel’s insurance with Japan P&I Club was incepted on August 7, 2020, a day after oil had started leaking.
What makes this even more surprising is that these insurance records no longer appear on the EQUASIS database, even though such insurance details had appeared for other vessels long after a sinking or total loss, and also given that the rear stern of the Wakaskhio continues to be on Mauritius’ reefs and likely to remain there until after the cyclone season through to Spring next year.
There have also been several unexplained changes to the Wakashio’s records since the vessel was ruled an Total Loss on 25 July.
Shipowner, Nagashiki Shipping, was asked whether they issued any instructions to alter any documentation for the Wakashio since its grounding on July 25, and a spokesperson for the shipowners responded on November 1 that they had not.
It is unclear why and how the EU’s EQUASIS database would have recorded that the ship’s records would have been updated since the July 25 Total Loss.
The EQUASIS database also allows the public to view the corporate structure of various shipping interests.
Question on Ship’s Business Structure
At a MOL-Nagashiki Shipping Press Conference on the Wakashio oil spill, hosted at MOL’s Headquarters in Tokyo on August 9, Nagashiki Shipping’s President and CEO Yoshiaki Nagashiki publicly stated that Nagashiki Shipping owns 11 vessels, which he specified as bulk carriers, container ships and tankers.
He was giving a joint press conference along with MOL’s Executive Vice President, Akihiko Ono, and MOL’s Head of Safe Operations Division, Masanori Kato.
However, using the EU’s shipping database, EQUASIS, it is only possible to identify five vessels owned by Nagashiki Shipping (one of which was added this month on November 1, the Admiral Jimmu).
Japanese Newspaper reports at the time of the August 9 Press Conference show CEO Yoshiaki Nagashiki saying “Our company owns a total of 11 vessels. Of these, only the vessel, ‘The Wakashio’ was managed in-house. The remaining vessels are outsourced.”
Nagashiki Shipping was asked by Forbes to provide a list of all the vessels owned by the company on October 30, but have not responded to these requests.
Upon noticing that vessel ownership was changing in Nagashiki Shipping’s several shell holding companies, Forbes reached out for an explanation about the rationale of the restructure of Nagashiki’s business since the Wakashio’s grounding on July 25. The question was also raised whether there had been any changes in the shipping assets held by the Panama shell company of Okiyo Maritime Corp, which the Wakashio was registered under.
On November 1, in response to a question whether there had been any changes since July 25, a spokesperson for Nagashiki Shipping responded with, “There has not been any restructure of our business.”
It is therefore challenging to reconcile this November 1 statement by the Nagashiki Shipping spokesperson, remarks made by the CEO of Nagashiki Shipping at the MOL Press Conference on August 9, vessels listed on Nagashiki Shipping’s website in July, with data found in international ship safety databases such as EQUASIS administered by the European Union.
Data from the EU’s EQUASIS database reveal further questions about the ownership of 7 of the 11 vessels listed on Nagashiki Shipping’s website. That is almost two-thirds of Nagashiki’s fleet.
10 Critical Questions
Here are the ten unanswered questions about ownership of these 11 vessels.
- Changes to Nagashiki Shipping’s website
At the time of the grounding, there were 11 vessels listed on Nagashiki Shipping’s website. Today, there are only ten.
A closer examination reveals that the Nord Sakura is no longer on Nagashiki Shipping’s website.
- Nord Sakura changed names and owners
It also appears that since the grounding of the Wakashio, the Nord Sakura changed names and owners.
A search through EQUASIS reveals that the Nord Sakura was renamed as the Invictus on 1 October 2020.
It has a new company owner, Invictus Shipping Corp, which only has one ship under management, the Invictus.
The Invictus now has a Greek owner, Coral Shipping Company, which owns 13 vessels, including Invictus Shipping Corp and the Invictus (the former Nagashiki Shipping’s Nord Sakura). 11 of Coral Shipping’s vessels are registered with the Marshall Islands. The Nord Sakura was also registered with the Marshall Islands before the change of ownership.
So, the Nord Sakura and renamed Invictus had a change of ownership since the Wakashio grounding.
- Jupiter Express owned by MOL
The oil tanker, Jupiter Express, listed on Nagashiki Shipping’s website is owned by MOL Product Tankers Ltd, whose address is that of Mitsui OSK Lines Headquarters in Tokyo.
This is one of four of Nagashiki Shipping’s vessels with a close relationship with Mitsui OSK Lines, the other three being the Wakashio, the MOL Seabreeze and the Eternal Sunshine. It is flagged with the Marshall Islands.
So, again, another vessel that does not appear to be owned by Nagashiki Shipping.
- Ore Amazonas owned by NYK Lines
A bulk carrier listed on Nagashiki Shipping’s website, the Ore Amazonas, is owned by a Panama-registered shell company called Kamishio Maritime / Santos. Kamishio Maritime / Santos only owns one vessel, the Ore Amazonas. Its registered address is another of the ‘big three’ Japanese shipping companies, Nippon Yusen KK (NYK Line) (Nippon Yusen Kaisha).
Three shipping lines dominate Japan. They are Mitsui OSK Lines (MOL), NYK-Line and K-Line. All three recently announced a large multi-billion dollar alliance with their container ships, called the ONE Alliance.
So according to EQUASIS, the Ore Amazonas does not appear to be owned by Nagashiki Shipping and is flagged in Panama.
- Ocean Clarion owned by NYK Line
Another bulk carrier listed on Nagashiki Shipping’s website, the Ocean Clarion, is owned by a Panama-registered shell company called Myoken Maritime Corp. Myoken Maritime Corp only owns one vessel, the Ocean Clarion. Its registered address is another of the ‘big three’ Japanese shipping companies, Nippon Yusen Kaisha, or NYK Line.
So according to EQUASIS, the Ocean Clarion does not appear to be owned by Nagashiki Shipping either and is flagged in Panama.
- Takeshio owned by the giant Malaysian Kuok Group
A sister ship of the Wakashio, the Takeshio, listed on the Nagashiki Shipping website also raises several flags. The Takeshio is owned by a Singaporean shell company called Peony Shipping.
Peony Shipping has two ships registered to it, the Takeshio and the Glorious Kauri. The Glorious Kauri does not appear on Nagashiki Shipping’s website.
Peony Shipping also appears to be linked to another company called Pacific Carriers Ltd, that is once more based in Singapore and linked to ten vessels. Pacific Carriers Ltd is a wholly owned subsidiary of Singaporean giant, the multi-billion dollar Malaysian Kuok Group, that has large shipping and plantation interests across South East Asia and had owned interests in the South China Morning Post and Shangri-La chain of hotels.
So EQUASIS highlights that the Takeshio does not appear to be owned by Nagashiki Shipping and is flagged in Panama.
- Eternal Sunshine owned by tanker group Asahi Tanker Co Ltd
The oil products carrier, Eternal Sunshine, appears to be owned by Asahi Tanker Co Ltd, a large Japanese tanker company.
This vessel was built in 2019.
Asahi Tanker has 269 staff and Mitsui OSK Lines is identified as a Major Shareholder.
A search through Equasis reveals 22 vessels owned by Asahi Tanker Co Ltd, all of them either oil tankers or chemical tankers.
So from EQUASIS, it does not appear that the Eternal Sunshine is owned by Nagashiki Shipping, and is flagged in Liberia.
- Mimitsu owned by the Daiichi Chuo Shipping Group
The bulk carrier, Mimitsu, is owned by a Panama shell company, Mimistu Shipholding Corp, which only has one ship associated with it, the Mimitsu.
The registered owner of Mimitsu Shipholding Corp is First Marine Service Co Ltd, based in Tokyo Japan. First Marine Service Co Ltd is a subsidiary of the Daiichi Chuo Shipping Group. The Daiichi Chuo Shipping Group was Japan’s fifth largest shipping company until it collapsed in 2015 with over $1 billion debt to almost 600 creditors. One of its biggest assets was Star Bulk Carrier, one of the largest bulk carrier companies in the world.
The recently restructured Daiichi Chuo Shipping Group (known as Daiichi Chuo Kisen Kaisha) is the main supplier of Capesize Bulk Carriers for Iron Ore and Coral to Nippon Steel’s, Sumitomo Metal Industries, the third largest steel manufacturer in the world. The Wakashio was also a Capesize Bulk Carrier for Iron Ore.
According to statements on its website, First Marine Service Co Ltd earned $60 million last year and has several ties with business entities associated with MOL, such as its bank, Sumitomo Mitsui Banking Corporation and several MOL-business unit related customers, MOL Techno-Trade Ltd, MES Machinery Co Ltd, Mitsui Engineering & Shipbuilding Co. Ltd.
Again, EQUASIS shows that the Mimitsu does not appear to be owned by Nagashiki Shipping, and is flagged in Panama.
- Addition of the Admiral Jimmu
A new bulk carrier vessel has now appeared and registered to Nagashiki Shipping, called the Admiral Jimmu on 1 November 2020. This new vessel is not listed on Nagashiki Shipping’s website.
It is owned via one of Nagshiki Shipping’s shell companies, Panama-based Moon Rise Shipping Co SA.
EQUASIS reveals that Moon Rise Shipping Co SA owns four of Nagashiki Shipping’s vessels, the NSC Kingston, Ultra Prosperity, MOL Seabreeze, and now Admiral Jimmu.
The Admiral Jimmu also appears to have a close relationship with Daiichi Chuo Shipping Group’s subsidiary, First Marine Service Co Ltd, who is named as the managing company (ISM Manager). First Marine has several business ties to MOL-related affiliates, as seen from the Mimitsu. The vessel is flagged in Liberia.
- Questions about Wakashio shell company Okiyo Maritime Corp
So this brings us to a Panama shell company that held the Wakashio, and which the Prime Minister of Mauritius, Pravind Jugnauth acknowledged on August 31 was the legal entity that signed the Lloyds salvage agreement for the Wakashio.
Nagashiki Shipping have acknowledged that Okiyo Maritime Corp is wholly owned by them (and it is clear on EQUASIS that Okiyo Maritime is linked to Nagashiki Shipping).
However, on the evening of July 25 when the Wakashio hit the reefs of Mauritius, there were two vessels listed owned by Okiyo Maritime Corp. This second vessel was not one of the vessels listed on Nagashiki Shipping’s website.
Today, that vessel is no longer listed under Okiyo Maritime Corp.
Nagashiki was asked to explain this second vessel under Okiyo Maritime Corp. This question was not responded to.
Need for transparency over Nagashiki Shipping’s operations and structures:
There have been several questions about the operations and structures of Nagashiki Shipping.
Unanswered operational questions about the Wakashio
Ten key operational questions have been publicly raised about the Wakashio on October 30 but have not been fully addressed. In terms of the questions about how Wakashio was able to maintain around-the-clock contact with the Wakashio given the nature of the Nagashiki Shipping Headquarters appearing like a residential property, a spokesperson responded on November 1 with “Nagashiki shipping have an established 24/7 emergency contact system to support the Captain.”
‘Dark Forces’ surrounding lawyers
On September 2, there were concerns expressed by the former lawyers of the Captain of the Wakashio. After the grounding, the Captain had appointed the the very senior Mauritian lawyer, Yousuf Mohamed, one of the longest serving lawyers in Mauritius and former Deputy Speaker of the Mauritian Parliament. In media interviews in Mauritius, he described the ‘dark forces’ at work that led to his team being replaced with a set of lawyers appointed by the Wakashio’s owner, whom he described as having different objectives as that of lawyers appointed to just represent the interests of the captain.
Changes to Nagashiki Shipping’s vessel ownership structures after the Wakashio grounding:
On November 1, a spokesperson for Nagshiki Shipping when asked whether Nagshiki Shipping had issued any instructions to alter any documentation since the Wakashio’s grounding on July 25, responded that they had not.
With questions and changes to the ownership structure to two-thirds of Nagashiki Shipping’s fleet, there is a need for independent scrutiny of the company given the devastation wreaked on Mauritius.
It will also be a test for the Japanese authorities present in Mauritius to see how robust they are in investigating the conduct of their own shipping industry.
For a spokesperson of Nagashiki Shipping to have said that, “There has been not been any restructure of our business,” there appears to have been a lot of unanswered questions about Nagashiki’s 11 vessels, with changes or discrepancies with almost two-thirds of Nagahsiki’s fleet in just a few short weeks since the Wakashio grounded.
Nagashiki Shipping have not responded to clarifications on the vessels that it owns today and at the time of the grounding on July 25.
Questions about what MOL knew
With Mitsui OSK Lines appearing to have such a close working relationship with Nagashiki Shipping (at least three of the eleven vessels – the Wakashio, the MOL Seabreeze, and the Jupiter Express are frequently used by MOL), it is also surprising that there was no clear fact-checking at the Press Conference on August 9 at MOL’s Headquarters in Tokyo. That press conference had MOL’s Executive Vice President, Akihiko Ono, and MOL’s Head of Safe Operations Division, Masanori Kato also addressing the media when these statements were made.
Akihiko Ono is one of the most senior executives at MOL, reporting directly to the President and CEO and holding responsibilities as Chief Compliance Officer and Chief Information Officer – key positions to be aware of Nagashiki Shipping’s compliance with MOL’s standards and data disclosure. Since the grounding, Ono now holds MOL’s responsibility for “recovery of environmental damage from the Wakashio incident and contribution to the Mauritian community.”
Given the close working relationship between MOL and Nagashiki Shipping, MOL has been approached to clarify the ownership of the vessels of Nagashiki Shipping that was stated at the press conference at MOL’s Headquarters on August 9.
Also noteworthy from the MOL Press Conference on August 9 was MOL’s Head of Safety and Managing Executive Officer, Masanori Kato, saying that the original voyage plan was to sail 10 to 20 miles off the south side of Mauritius Island, but “the waves were high and we were shifting north to avoid cliffs.”
Satellite analysis of the region at the time does not reveal any adverse weather patterns in close vicinity of Mauritius, and certainly none that impacted the trajectory of any other large ocean-bound vessel. Satellite analysis from global maritime analytics firm, Windward, also reveal that the Wakashio had been on a straight line course for four days before it struck Mauritius’ reefs.
Putting the Wakashio within 20 miles of Mauritius’ coastline would have been highly risky and not authorized by Mauritian officials, as satellite analysis of passing maritime traffic reveals. This raises even more questions about who developed and authorized the voyage plan of the Wakashio to travel between 10 and 20 miles of Mauritius’ coastline, unnecessarily putting the island at risk of such a large vessel.
Forbes has reached to ask for clarifications of Kato’s remarks and an explanation for how such a Voyage Plan to place the Wakashio between 10 and 20 miles of Mauritius’ coastline could have been approved.
Since the Wakashio grounding, neither MOL nor Nagashiki Shipping have answered ten foundational operational questions raised about the Wakashio and route planning, monitoring and inspections. If this was a genuine accident, more transparency was to be expected to ensure such an incident does not occur again.
Need for G20 reform of global shipping
While the various legal cases are likely to drag on for years for the Wakashio, the complex business structures surrounding the Wakashio’s owner and operator is a perfect example for why there needs to be global shipping reform.
Climate change is opening up new passages across the Arctic. Allowing vessels to travel through risky icy conditions without appropriate safety standards, nor adequate transparency of ownership and operational data, is highly risky.
The opaqueness of global shipping and vessel ownership structures needs to end, and pressure from world leaders, financial markets and shipping customers will become the biggest driver for change. The shipping industry will fight tooth and nail to prevent the world shining the light at the industry.
However, if we are to move to enter a more sustainable era by the end of the decade, reform of Flag States and fixing Ship Registrations must become a G20 Agenda item within the next few years. Perhaps a new era of multilateralism under a Biden-Harris Presidency in the U.S., combined with leadership from the EU, U.K., Canada, Australia and New Zealand could usher this in.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Forbes
