CONFIDENTIAL

4.

International Maritime Consultative Organisation

17.

Mr. Pao may raise the issue of IMCO recommendations concerning limitations of tank sizes in new oil tankers. He seems to feel rather strongly about this and asked whether we would take up the case, but Hong Kong as an Associate Member of IMCO has little voice. We have offered him access to our documents on the business of IMCO so that he could be accurately informed as to those deliberations. D.T.I. would be interested to hear his views if they concern ships intended for British registry. Otherwise he should make his points to the Liberian Government.

18. I might add that I am in favour of IMCO proposals to recommend the limitation of tank sizes, I feel that oil tankers have grown too big too fast. They are unwieldy and lack manoeuvrebility and therefore present an unnecessary threat

to the maritime environment. A casualty in one of these ships could destroy recreation environment and marine ecology over a wide area for many years.

19. The purpose of large size is to effect economy through scale, and yet the main cost of the end product is due to taxation at the reception country. It is the practice of taxing oil that is inspiring the development of monster tankers.

20.

In conclusion I would like to point out that we are very interested in helping Hong Kong shipowners and the Hong Kong economy as much as possible. Mr. Pao has some enlightened ideas. I particularly admire his initiative in crew training. His officers' conditions of appointment are much improved, but still fall short of those offered by the oil companies with whom he competes for staff.

21.

I am very much concerned at maintaining standards of accommodation, equipment and safety, and do not wish to create another flag of convenience if it means a lowering of standards, and a sullied reputation for Hong Kong.

To summarise

22.

(1) In the short term Mr. Pao might as well accept

the extant position:-

(a) British registry involves commitments

which must be met. In the case of officer manning, where officers are not available, powers of exemption is invoked by the Director of Marine.

CONFIDENTIAL

(b)

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