VZCZCXYZ0876
RR RUEHWEB

DE RUEHCP #0434/01 2790944
ZNR UUUUU ZZH
R 060944Z OCT 09
FM AMEMBASSY COPENHAGEN
TO RUEHC/SECSTATE WASHDC 5218
INFO RUEHLO/AMEMBASSY LONDON 0726
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/SECNAV WASHDC
RHEFDIA/DIA WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC

UNCLAS COPENHAGEN 000434 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR OES, EUR/NB 
LONDON FOR EST COUNSELOR WHITTLESEY 
 
E.O. 12958: N/A 
TAGS: ECON EWWT PGOV PREL SENV DA
SUBJECT: DANISH SHIPOWNERS PRIORITIZE CONCERNS 
 
(U) SENSITIVE BUT UNCLASSIFIED; PROTECT ACCORDINGLY.  NOT FOR 
INTERNET DISTRIBUTION. 
 
¶1.  (SBU)  Summary.  Senior officials of the Danish 
Shipowners Association (DSA) list anti-piracy cooperation, 
reliance on free-market allocation of resources to prevent 
overcapacity, and care in setting proposed climate-change 
restrictions on the emission of maritime greenhouse gases 
(GHG) as their most pressing concerns.  Danish shipowners, 
who own or manage roughly 25 percent of the world's maritime 
capacity, believe the international naval task force 
currently patrolling the high-risk sea lanes off the Horn of 
Africa will be needed for an extended period.  Regarding 
maritime capacity, the influential association is advocating 
that subsidies to the global shipbuilding industry be used 
sparingly to prevent overcapacity and instability in the 
highly cyclical global shipping sector.  Lastly, as the UN 
Climate Change Conference (COP-15) in Copenhagen approaches, 
shipowners insist they are moving rapidly to more 
energy-efficient propulsion systems, but fear that a 
one-size-fits-all cap on transportation emissions might 
overshadow the environmental benefits of maritime (vice 
overland) shipment of most of the world's trade flows.  End 
summary. 
 
¶2.  (U)  In a September 29 dinner with visiting state 
legislators from California, DSA Chairman Lars Vang 
Christensen argued against job-saving subsidies for maritime 
industries, which some governments were considering in the 
current economic recession.  He particularly warned against 
national subsidies to shipbuilding concerns, which he 
believes would inevitably lead to overcapacity and 
destabilizing volatility in global freight rates. 
Christensen told his guests that maritime shipping was a 
highly cyclical industry by nature, but that shippers were 
fairly adept at factoring in the ebb-and-flow of global trade 
by monitoring well-recognized leading indicators.  It would 
be much more difficult, however, to adjust maritime capacity 
efficiently if nations introduce measures that undercut 
market mechanisms that signal the maritime sector when to add 
or reduce capacity.  Due to significant capital investment 
and lengthy lead times involved in adjustments of the global 
fleet, DSA strongly prefers less government interference in 
the markets. 
 
--------------------------------------------- 
Piracy:  plateauing but still a major concern 
--------------------------------------------- 
 
¶3.  (SBU)  DSA's executive vice president Jan Fritz Hansen 
and Anja Nielsen, an executive of the Danish shipowning giant 
A.P. Moller-Maersk, both discussed at length the continuing 
challenge of maritime piracy, particularly off the east coast 
of Africa.  They agreed that the multi-national task force 
patrolling the waters off Somalia and the adjoining sea lanes 
has greatly improved the security situation -- and they hope 
it continues as long as possible (the Danish Navy led a 
multi-national force for part of last year and plans to 
deploy a high-endurance frigate early next year).  In an 
unsolicited remark, Christensen said that almost all 
shipowners strongly prefer to leave the security of 
commercial ships to naval forces, rather than develop a 
self-protection capability.  Due to a lack of expertise in 
this specialized field, as well as concerns over financial 
liability should a self-defense action go awry, DSA's 
position is to avoid any consideration of private security 
assets for its vessels.  In an unexpected aside, Maersk's 
Nielsen added that while military protection on the high seas 
was most welcome, her company (the world's largest maritime 
fleet) would actually prefer to negotiate with pirates for 
the return of captured crew, rather than risk violent 
confrontation.  Both Hansen and Nielsen expressed their 
conviction that piracy is not a short-term phenomenon, and 
may actually intensify due to the increasing sophistication 
of seaborne criminals and the large amounts of money involved. 
 
--------------------------------------------- -------- 
Climate change: We'll contribute; look at big picture 
--------------------------------------------- -------- 
 
¶4.  (SBU)  The final point conveyed by Christensen was his 
assertion that the shipping industry wants to actively 
participate in the  global effort to reduce greenhouse 
emissions.  He stated that DSA and individual shipowners are 
currently funding research and development of ever more 
fuel-efficient vessels and that significant reduction in the 
maritime transport component of global GHG will be achieved 
-- both corporate responsibility as well as bottom-line 
considerations were driving this effort forward.  Christensen 
did caution, however, that as world leaders negotiate a 
global response to climate change, it is essential that they 
take a holistic approach; specifically, that if GHG emission 
restrictions are established, the overall impact of various 
industries should be taken into account.  Negotiators need to 
bear in mind that measures hindering commercial maritime 
fleets' ability to keep up with (eventual) global trade 
growth could shift the movement of goods to other less 
environmentally-efficient modes of transport. 
 
¶5.  (SBU)  When later asked if nuclear energy would be 
considered as an alternative means of maritime propulsion, 
DSA's Jan Hansen replied that even if it was found 
economically and technologically beneficial, the general 
public opposition in Denmark would never permit its 
consideration. 
 
Fulton 
FULTON