The Swedish Club
No. 1 - 2012 April MANAGING the media in a high-profile casualty situation Page 24-27
Criminalisation of seafarers Page 9-11
UNSUNG HEROES of the MV “Rena”Page 28-29 THE SWEDISH CLUB TRITON 1-2012
Content | No. 1 - 2012 April
Leader | Exposure has become reality! 3
MarketING & | 140 years old, full of new-born energy The Swedish Club is a mutual marine insurance BUSINESS DEVELOPMENT | and a prosperous future 4 company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight, Demurrage & Defence, Charterers' Liability, Hull & Risk & operations | Happy New Policy Year! 5-6 Machinery, War risks, Loss of Hire insurance and any additional insurance required by shipowners. The Club also writes Hull & Machinery, War risks and Loss FINANCE | Result 2011 6-7 of Hire for Mobile offshore units and FPSO's.
FD&D | Freight Demurrage & Defence insurance Head Office Sweden | – State of Affairs8 Visiting address Gullbergs Strandgata 6 411 04 Gothenburg Postal address P.O. Box 171 P&I | Criminalisation of Seafarers 9-11 SE-401 22 Gothenburg, Sweden Tel +46 31 638 400 | Scindia Duties and Longshore Activities in Fax +46 31 156 711 | the United States 12-14 E-mail [email protected] Emergency tel +46 31 151 328 Club information | News from Gothenburg 15 Greece 5th Floor, 87 Akti Miaouli GR-185 38 Piraeus, Greece P&I | The High Cost of failing “Grain Clean” in Tel +30 211 120 8400 | Australia 16-17 Fax +30 210 452 5957 E-mail [email protected] | United States Coast Guard grants petition Emergency tel +30 6944 530 856 | to limit OPA 90 liability for Selendang Ayu | Hong Kong Suite 6306, Central Plaza Oil Spill 18-20 18 Harbour Road, Wanchai, Hong Kong Tel +852 2598 6238 safety | Titanic and SOLAS 1912 - 2012 21 Fax +852 2845 9203 E-mail [email protected] LOSS PREVENTION | P&I Claims Analysis 22-23 Emergency tel +852 2598 6464 Japan room 103, 6-1, 1 Chome, media | Under the spotlight kaigan, Minatu-Ku | – Managing the media in a high-profile tokyo 105-0022, Japan | Tel +81 3 6459 0870 casualty situation 24-27 Fax +81 3 6459 0871 E-mail [email protected] POLLUTION | Unsung heroes of the MV Rena grounding Emergency tel +81 3 6459 0870 | 28-29 Norway House of Business, 6th floor Postal address tjuvholmen Allé 3 Club information | Notice Board 30 N-0252, Oslo, Norway Tel +47 9828 0514 The Swedish Club | MRM 31-33 Mobile +47 9486 1205 | E-mail [email protected] Academy Out and about with MRM 32-33 Emergency tel +46 31 151 328
| The Swedish Club Triton is published three times a year Club information Staff presentations and distributed free of charge. The Swedish Club Triton | Marine Claims Manager, is an editorially independent newsletter and opinions expressed by external contributors are not necessarily | Johan Kahlmeter 34, 36 those of The Swedish Club. Articles herein are not intended to provide legal advice and the Club does not | P&I Claims Manager, accept responsibility for errors or omissions or their | Maria Berndtsson 35-36 consequences. For further information regarding any issue raised herein, please contact our head office in | News from Piraeus 37 Gothenburg. | News from Asia 38 Editorial Advisory Board Maria Berndtsson, Susanne Blomstrand, Hans Filipsson, Henric Gard, Birgitta Hed, | News from Oslo 39 Johan Kahlmeter, Anders Leissner, Lars A. Malm, Lars Rhodin, Tony Schröder, Carola Weidenholm. | Varbergs Fortress 40 Production co-ordinator Susanne Blomstrand. | Out and about 41-42 PR-consultant TRS Public Relations Ltd., London. Layout Eliasson Information, Gothenburg. | Staff news43 Cover photo iStockphoto. | Club quiz 43 Print PR Offset. 1204PR5000B | © The Swedish Club Club calendar 44 Articles or extracts may be quoted provided that The Swedish Club is credited as the source. 2 www.swedishclub.com THE SWEDISH CLUB TRITON 1-2012
Leader | MD Lars Rhodin
Exposure has become reality!
Dear members and associates, PHoto:
Shipping has been hit by some major casualties Jonas Ahlsén recently. Apart from our own Rena container ship grounding in October last year, the industry saw the Costa Concordia cruise ship capsize in January this year. How can these incidents happen? How can these severe groundings occur? I was asked that question by my children and it was not that easy to answer in Lars Rhodin fact. Yet it looks so banal with a picture of a ship on Managing Director the rocks. Suffice it to say, casualties are rarely the re- sult of a single error. They are, with few exceptions, In underwriting we consider exposure. It is present, the result of concurrency of many circumstances or it is imminent and yet so remote it seems. Risks are through a complex chain of events. Naturally, some- obvious but it’s not uncommon to hear “it will not thing must have gone very wrong on the bridge in happen to us - we have far better systems”. In the both New Zealand and Italy. Expectations in shipping Rena and Costa Concordia cases, exposure has be- are now for even more emphasis being put on bridge come reality. The probability of these casualties is low team management in general and passage planning but when they occur it is a sharp reminder of the risks in particular in future. The need for continuous Mari- involved in shipping. It is necessary to rate exposure time Resource Management training has again been across the entire insurance portfolio. To this end, re- underlined. sponsible underwriting requires every member to Casualty response is a joint effort between ship- play their part. Only then can the underwriting be re- owners and underwriters’ partners in chief. Few garded as sustainable over the longer perspective. responses follow textbook examples on how to pro- The Club saw a volatile claims year in 2011 coupled ceed; they are always subject to change. They often with modest support from investments. The outcome become very challenging, not least from an environ- of the technical account quite significantly deviates mental and political points of view. Our greatest chal- from the actuarial expectation. In 2010 we had the lenge in the Rena case was the lack of response re- opposite experience with virtually every area and sources locally. The ship ran aground in an extremely product working our way. In 2011, we stood the test exposed position in the Bay of Plenty, 12 miles off the and showed resilience in the face of adversity. Under- port of Tauranga. An effective response was also im- writing should be assessed over a longer period in paired by severe weather conditions that occur from terms of volatility. Over the past three years we have time to time, making it too dangerous to continue progressed well in terms of business volumes, results the operation. Yet the response is relentless in its en- and free reserves. We also receive the strongest ap- deavour to carry on despite logistical problems. In my proval endorsement ever which was shown in the view, the owners of the vessel should be commended latest members’ questionnaire. After all, this is what for their devotion, patience and will to constructively really counts moving ahead; sustainability combined deal with the situation in the aftermath of the inci- with excellent services. dent. With best regards,
3 THE SWEDISH CLUB TRITON 1-2012
Marketing & Business Development | State of the Market
“140 years old, full of new-born energy and a prosperous future”
are well founded and make sense from a business perspective Our office in Oslo has done a tremendous job and has been helped by the good timing of our entry, as well as a need from owners and brokers for fresh, new, local, long-term capacity. Henric Gard At the moment the vast majority of the business underwritten Director, emanates from Scandinavian owners and brokers. Over the next Marketing & Business Development year we intend to carefully explore business based and produced outside Scandinavia, provided of course that the quality and History is important and most, if not all, companies or or- pricing is in line with our models. ganisations are a product or a reflection of their history. History on the other hand does not tell us much about the future. An Getting the price right (immediately) important differentiator is that companies or organisations that is still the key after 140 years analyse, learn and act on what history teaches us have a better P&I business is generally long-term and the marine market chance of influencing or even creating their future. continues to be a commodity market. Major market claims, like the Costa Concordia, will of course have an impact on current The 101st P&I renewal has just finished rating levels but a major obstacle against a much-needed, firm, At the time of writing we have just finished our 101st P&I re- upward rate correction is overcapacity. The concept of general newal. Every renewal has its own characteristics and every re- increase has never attracted the marine market and probably newal is different, as is this one. In the current freight market never will. It is therefore paramount to get the price right (im- environment where shipowners are struggling, costs such as mediately) as the market is very liquid and the possibility of insurance are naturally being focused on more by owners as well adjusting the pricing over time demands almost magical skills. as managers. It is therefore pleasing to be able to report that Nevertheless, the marine side of our business remains very im- this year’s P&I renewal also ended satisfactorily from the Club’s portant to us and our commitment to further diversify within perspective. Not only did we achieve our general increase set by the marine portfolio remains strong. the board, we also managed to expand our renewal portfolio and received firm commitments of a sizeable tonnage amount to Celebrating 30 years of “delivering the firm” in Asia attach during the year. We take this as yet another endorsement In 2012 we also celebrate 30 years of being and operating in of the Club’s ambition to slowly but steadily build a portfolio Asia. Our Hong Kong office opened in 1982 and offers The of high quality shipowners and managers with an eye for stabil- Swedish Club all-in-one concept to Asian shipowners and ity, financial resilience and a service concept second to none. charterers. Over the years the Asian region has become increas- Although, we expect the overall growth rate to slightly slow ingly important to us and today around 30% of the Club’s P&I down in the short-term, due to factors beyond our control, the portfolio is dealt with by our Hong Kong office. Being able to Club has managed to expand the P&I portfolio by well over see the formidable growth and development that the region in 30% since 2009 and transformed from a small to a mid-sized the past, present and future has, is exciting and a strong motiva- P&I club. tor for all of us at the Club to continue to “deliver the firm” to Asian owners and brokers. Heading towards our first energy renewals The Swedish Club has a long and proud history from its A year has past since starting our most recent business line, En- founding in 1872 to the present day. For most people 140 years ergy, and we are rapidly approaching a series of first renewals. is a very long time, and that’s true. On the other hand it is also The first year of operation has been very satisfactory and I dare proof that the Club has been able to use its history in order to say that we have proceeded according to plan, if not ahead of adapt, adjust, develop and move forward. This important work them. Our portfolio currently consists of over 30 accounts and is continuing at full strength and rest assured – “we are with covers well in excess of 200 offshore units. This is indeed a good you at all times and all the way”. start and ratification that the Club’s diversification ambitions
4 THE SWEDISH CLUB TRITON 1-2012
Risk & Operations | Marine Renewal 2012
The historic reason why 20 February is the date for greater extent than many times before, about manag- renewing P&I insurance, is because this was the time ing both exposure and expectations. of the year when a new trading season could begin. In conclusion the Club did very well in both re- So, a new trading season has begun but admittedly it spects. In contrast to the past two winters in our re- leaves us with slightly mixed emotions. gion, this one has so far been very mild and accom- From the Club’s perspective we have met our tar- modating. gets as far as rates are concerned and we added some That cannot be said about the state of the shipping new tonnage. market where icy winds continue to blow, exposing From the owners’ perspective however, the outlook relationships to frostbite on the back of the ongoing is of course very troublesome and uncertain indeed. financial turbulence. From the outset it was clear that this renewal was, to a Happy New Policy Year!
Managing our business partners’ expec- In conclusion, the Club’s overall financial tations with renewal surrounded by a lot of standing remains strong and when taking uncertainty about the state of the economy the overall situation into account we were in future, is of even greater importance pleased that this year’s renewal could be than before. For us it has been natural to Lars A. Malm handled in a balanced manner. The Club’s take a longer view of the rating structure Director, position has improved year-on-year and it and finding an equitable balance between Risk & Operations is clear that results, enhanced risk manage- the timing of rate corrections over time and ment, service and re-emphasized focus on the ability of meeting our requirements. As ness. We have already taken the first step marketing are paying off well. always there are levels that you simply can- and introduced certain interactive features During the policy year 2011/12 we added not deviate from. The alternative to unsus- on our website enabling our business part- further business to our P&I portfolio. At tainable levels is of course de-risking. We ners to make various transactions on-line policy year-end 2012/13 we are expecting to are in the process of enhancing the Club’s through The Swedish Club On Line plat- have a combined owners/charters book of already strong financial position making us form (SCOL). For more information about approximately 55 million gross tonnes. As an even more solid business partner where SCOL, please see page 30. we have elaborated before – but it deserves stakeholders can feel comfortable that they Work on refining our Internal Capital to be said again – size is important only if are investing in future certainty. Due to the Model continues to increase, and over the sustainable over the long-term. The Club’s current financial turmoil, predictability long-term, this will have a positive impact growth with this renewal is very pleasing is increasingly more important than ever. on our members. and again reflects the most profound sup- The Club has delivered sustainable tech- port and genuine commitment to the Club nical underwriting results in recent years P&I Renewal from its business partners. and even though 2011 was something of As far as claims on the P&I side is con- a disappointment in that respect – we are cerned, 2011 was admittedly slightly worse Marine Renewal confident that we will be “back in black” than expected. We noticed an increase in Marine & Energy renewals have, over the going forward. We are in many respects the number of larger claims. We can safely years, gradually become spread out over continuing our efforts in taking the Club to say that the number of smaller claims in the year, the significance of the 1 January the next level. the categories of “Cargo” and “Crew” has renewal is today somewhat less than it used increased a lot over the past five years. 2011 to be. Having said that, some of the Club’s Development of IT solutions also started rather well in terms of return most important members still renew on continues on our investments. The latter part of 2011, this date. The Marine and Energy insur- We are continuing to develop IT solutions however, performed less satisfactorily in ances are the owners’ most basic protection on our website and for smart phones to sup- this respect and left us with less contribu- port our business partners’ day-to-day busi- tion than expected. 9 continues on page 6
5 THE SWEDISH CLUB TRITON 1-2012
Finance | Result 2011 Tough
THE CLUB reports a twelve-month Group Pooling Agreement and Excess of loss of USD 9.3 million (2010: +29.5), Loss reinsurance cover – works well. which is a fall of USD 20.9 million claims Premium volume increased by 9% com- compared to the profit reported for the pared to last year. The new business area, first six months of the year. The dete- Energy, was responsible for more than rioration in the second half of the year one-third of the overall premium volume is primarily due to three major P&I year increase of USD 14 million. All insur- claims, along with a decline in the eq- ances classes, with the exception of Hull & uity portfolio. Machinery, reported increased premium volumes. Major P&I claims put figures The total cost for reinsurance relative The Club can expect to have just be- to premium volumes is at the same level low one P&I claim per year in excess compared to 2010. However, reinsurance of the USD 8 million pool retention. spending fell substantially in 2011 for the For almost four years, August 2007 – in deficit Marine class, Loss of Hire. This was due to May 2011, there were none. After that, the phase-out from a quota share reinsur- things changed dramatically and in less ance to an excess of loss cover, which took than four months we had three claims when the container ship Rena hit ground place over last year. in excess of that amount. off the coast of Tauranga, New Zealand. The first was the bulk carrier, Pioneer This casualty also involves wreck removal Energy Pacific. On 20 June 2011 this vessel was and in January 2012, the P&I claims res- The new business area, Energy (launched 1 involved in a collision at Rio Parma in ervation was increased from USD 125 to March 2011), performed in line with busi- Argentina, striking and damaging a USD 175 million. For this vessel, the Club ness plans and reported a net earned pre- terminal structure. The current reserva- also has claims costs for Hull & Machinery mium of USD 4.4 million. Furthermore, tion for this casualty is USD 16 million. and Increased Value. no major claims were reported. This busi- The next incident occurred on 29 ness area is primarily managed from our July, and this time it was the bulk car- Underwriting result newly opened office in Oslo. rier B Oceania, which sunk off the coast Despite the unfavourable trend in claims, of Malaysia after colliding with another the underwriting loss was limited to USD Marine business vessel. A wreck removal operation has 11.8 million (2010: +17.7) and the overall The Marine business area consists of Hull been initiated and the current claims combined ratio was 110% (2010: 87). This & Machinery, Increased Value, Loss of reservation is USD 45 million. clearly indicates that our solid reinsur- Hire and War. Overall, a slight loss was re- Disaster struck again on 4 October ance structure – not least the International ported and the combined ratio was 104%.
Happy New... against unwanted fortuitous incidents in Energy business last year proved to be very relation to their property and earnings. successful and should be seen as another 9 continued from page 5 The amount of support you can afford to way for us to safeguard delivery of sustain- give members is very much correlated with able results over time. the long-term sustainability of the differ- Further diversification on the Marine ent classes of insurance the Club engages side, and for the Club as a whole, is obvi- in. The margin of support can be increased ously more important when the market is by adding additional sustainable classes of anything but firm. Even though the mar- business. ket could be described from our point of Last year we took yet another important view as “dull” we still enjoy reaffirmed and step in diversifying by introducing the loyal support from our members on the Energy Class of business. The Club has property side of our business. This can be been able to deliver rather good results on achieved by us de-risking and diversifica- the Marine side in recent years. Adding the tion, enabling us to take a more holistic ap-
6 THE SWEDISH CLUB TRITON 1-2012
Finance | Result 2011
2011 2011 OCTOBER 2011 Ju ly June However, the situation varies for each in- 29 Tuesday4 surance class. Smaller classes are reporting Friday stable underwriting returns that are even 20 higher than in 2010. This compensates Monday for the downturn in Hull & Machinery, which had a poor year. The majority of growth in this business area comes from War, related to the coverage that we pro- investment portfolio at year-end was USD vide against pirate attacks in the Gulf of 315 million (2010: +297). During the au- Aden. However, even though the War tumn, when volatility in the equity market coverage that we provide our shipowners was extreme, the Club took a cautious ap- makes a positive contribution to the Club’s proach. At the end of August, we sold half overall result, we all naturally wish it was of the equity holdings in exchange for US unnecessary. treasuries. In January 2012, we re-entered the market and obtained the same expo- Claims costs sure that we had back in August 2011. In 2011, 15 claims in excess of USD These risk management measures did not 500,000 were reported, which is the same have any noticeable impact on the result, frequency as last year. However, the severi- since we basically re-entered the market ty of claims was much higher in 2011. Dur- at the same level. But, the low exposure to ing 2010, the two most expensive claims equities during this turbulent period did (both on the Marine side) amounted to make life a bit more pleasant for us! USD 2.5 and 6.5 million respectively. This An underwriting deficit of almost USD year, there were eight claims (compared to 12 million and a financial result of just two last year) where the estimated claims USD 2.5 million was not what we aimed cost before reinsurance exceeded USD 2 for. However, given what has happened million, and some of them, as mentioned on both the claims side and in financial earlier, have reservations far above the markets, we are nevertheless satisfied. Let’s amounts reserved in 2010. hope that 2012 will be more in line with our expectations. Or why not – even a lit- Financial result tle better! Jan Rydenfelt Director, The financial result for 2011 was USD 2.5 Finance & Reinsurance, IT million (2010: +11.6) and the value of the
proach to our members’ overall insurance increased its H&M book slightly and this 2012. Our average share on Energy is 3.5% commitments with the Club. is mainly through organic growth. Due to and we will maintain this level of commit- Last year we reported a slightly better the de-risking strategy we see that our aver- ment in 2012. As mentioned in connection outcome than expected in terms of large age share written fell during 2011 and is with P&I above, but even more relevant to claims. For 2011 it is correct to say that expected to continue to drop during 2012. Marine & Energy: “Size is important only the number of large claims increased. For Overall, this is in line with our current if sustainable over the long-term”. This 2012 we cannot see, despite the problem- cycle management. statement is more relevant to the property atic shipping markets, that shipping activi- side of the business, because for obvious ties will drop significantly. To this end, Energy Renewal reasons it is far more commoditized than we expect large claims will remain fairly The Energy business that we started on 1 the liability side. stable and at a high level. Acknowledging March 2011, has developed better than this of course means that we will have to expected. We are currently involved in make sure that rates are set accordingly. more than 30 accounts and we expect to As far as volume is concerned the Club has increase that volume slightly throughout
7 THE SWEDISH CLUB TRITON 1-2012
FD&D | Legal update
Freight Demurrage & Defence insurance
The Club’s FD&D portfolio continued to develop positively in 2011. As of 1 February 2012, 738 vessels (29.2 million GT) were insured for FD&D risks compared to 693 vessels in 2010 and 580 vessels in 2009. Our ambition is, obviously, to continue this growth and develop the portfolio further in all State markets. FD&D insurance is an important supplement to the other classes of insurance, in particular in these turbulent times with a high demand for legal services. of Affairs Looking at the FD&D statistics, it is obvious that the Club’s members have had, and continue to have, difficulties. The market turbulence in 2007 and 2008 led to 312 FD&D claims being registered in 2008, a record num- ber. This represented 0.44 claims per entered vessel. In 2009, the number of claims was down to 0.37 followed by 0.29 in 2010 and the figure for 2011 is 0.35. One reasonable assumption is that if the markets will stabilize then fre- Anders Leissner quency will continue to go down. Having said this, market turbulence, and Director, not least long periods of depressed markets, vastly increases the risk for large Corporate Legal & FD&D legal disputes when parties can no longer meet their contractual obligations. In 2011, the Club assisted several owner-members in disputes concerning Freight Demurrage & Defence insurance is a values in the region of USD 50–100 million as a result of early termination of long-term time charterparties. Our assessment is that, regretfully, we have legal cost insurance. The insured has access to not seen the end of this trend as numerous companies that grew too rap- the expertise of the Club’s Freight Demurrage & idly in 2007-2009 still constitute a high default risk. Consequently, even if Defence lawyers and has also cover for legal costs claims frequencies are falling the risk for large claims in 2012 remains high. up to USD 5 million regarding a wide range of One way of measuring the results of insurance business is calculating the disputes pertaining to the operation of the vessel combined ratio, which is claims costs in relation to premiums and operation- that are not covered by any other class of insurance. al costs. Despite a five-year period that has been exceptionally challenging for the FD&D class (and its members) the average combined ratio for these years is 107%. Compared to the target of 100% the achieved result is quite accept- able although over the long-term it may be a sign that, structurally, premium levels are too low. After all, FD&D premium levels have been relatively stable for the past ten years. On the other hand, the level of legal costs has not been stable – our assessment is that the average hourly rate for a London lawyer has risen by at least 25% over the same period. In 2011 there was also frequent usage of the Club’s FD&D services in re- spect of topical issues such as sanctions and piracy. Loading of iron ore and nickel ore fines in India and Brazil also generated complex charterparty dis- putes with which the Club’s lawyers have assisted. However, again, the far most common type of intervention concerned various types of debt collect- ing. One particularly problematic situation was unpaid bunker invoices. Irre- spective if an unpaid bunker invoice gives rise to a maritime lien in the vessel (that varies between countries) the owner and the Club will have an onerous task fighting off arrest attempts by the supplier in one port after another and eventually the owner may be left with no other option but to pay the invoice themselves. Finally, a word of caution. In times like these guarantee letters have greater importance. Indeed, it may be desirable for the owner to know that the performance by the charterer for a time charterparty (e.g. hire payment) is guaranteed by a larger and better-known entity. However, variations in the underlying contract without consent by the guarantor may discharge the guarantor under the guarantee letter. There is a very simple remedy to avoid such a fatal situation – do not forget to seek consent from the guarantor when amending the charterparty!
8 THE SWEDISH CLUB TRITON 1-2012
FD&D | Legal update P&I | Criminalisation of Seafarers
Freight Demurrage & Defence insurance Criminalisation P h oto: State of Seafarers iStockphoto of Affairs Learning from the past
Capt Faz Peermohamed Partner, Ince & Co LLP to improve the future London In the aftermath of a casualty, parti- ordinary citizen who relies upon quality Faz Peermohamed is a cularly in high profile incidents seafarers safely steering those crucial goods Partner at the London offices where pollution is involved, history and energy carriers to deliver his everyday of Ince & Co LLP and heads Ince’s Global Admiralty has an unfortunate tendency to re- needs in a safe and timely manner. Group. He is renowned for his peat itself as far as unfair treatment The issues surrounding the alleged unfair ability to handle all aspects of seafarers is concerned. Local au- treatment of seafarers have arisen despite of Admiralty work, from thorities and prosecutors will inevi- the fact that mandatory safeguards for the collisions, salvage, total losses, tably face immense pressure from protection of individuals, and seafarers in groundings and shipboard the public to deal effectively with particular, already exist under international fires to general shipping those assumed to be responsible for law. disputes. He is particularly the incident – and it is often the crew known for his expert advice who suffer the consequences. Situ- Universal Declaration of Human in the highly charged ations such as that faced by Captain Rights (UDHR) atmosphere following a maritime casualty. Mangouras, the master of the Pres- The UDHR provides that everyone has the tige, suggest that there is a need for right to leave any country and return to his laws which more effectively under- own. It is therefore normally difficult to pin the human rights of the accused justify withholding of a passport, let alone in highly-charged cases of this sort. hotel arrest or detention in custody, on the mere ground that the individual has been Olivia Murray Protecting the Seafarer charged with an offence, unless there is at Senior Associate, Ince & Co LLP – International Law least a reasonable possibility that he could, London if convicted, be punished by a term of im- There is valid concern within the indus- Olivia Murray is a Senior try that the trend towards an assumption prisonment. Associate at Ince & Co LLP. of criminality on the part of the seafarer Olivia has particular experience and owner is likely to deter good quality UNCLOS 1982 (UNCLOS) in work relating to seafarer individuals from a seafaring career. In a cli- There are also safeguards set out in UNC- rights; she is an active member mate of criminalisation, another legitimate LOS, specifically under Article 230, which of the CMI International concern is that enquiries may never reveal constitute an internationally agreed balance Working Group on the Fair the true cause of an incident for crew may between public concerns about pollution Treatment of Seafarers and has fear self-incrimination. None of this can be on the one hand and the recognised rights recently been appointed Chair of the Group. good for the shipping industry, nor for the of the accused including the liberty of 9 continues on page 10 9 THE SWEDISH CLUB TRITON 1-2012
P&I | Criminalisation of Seafarers
9 continued from page 9 foreign seafarers, on the other. Article 230 effectively bars coastal public states from imprisoning foreign seafarers for any pollution offence authorities. beyond their territorial waters, or for one within those waters, un- The stated less involving a wilful and serious act of pollution. However, there objective of the have been concerns expressed within the international maritime Guidelines is to ensure community that these restrictions have not always assisted the de- that seafarers are treated fairly fendant. following a maritime accident and during any investi- gation and detention by public authorities and that detention MARPOL 1973/1978 (MARPOL) is for no longer than necessary. The human rights and other legiti- The principal international regulations to prevent pollution from mate interests of seafarers involved should be respected at all times. ships are those set out in MARPOL. Importantly, MARPOL In November 2011 the IMO Assembly adopted a resolution en- recognises the importance of the distinction between operational titled ‘Promotion as widely as possible of the application of the 2006 (i.e. intentional) and accidental spills. Accordingly, intentional dis- Guidelines on Fair Treatment of Seafarers in the Event of a Mari- charges are prohibited except where certain stringent conditions are time Accident’ (the Resolution). The Resolution calls upon govern- met and MARPOL provides an exemption from liability in certain ments to give effect to the Guidelines, and invites interested parties circumstances. In the case of accidental spills this exemption may to assist in raising awareness of the Guidelines. avail a master or shipowner where the discharge resulted from dam- age to the ship or its equipment provided he did not act with intent The IMO Code of the International Standards and Recom- or recklessness. mended Practices for a Safety Investigation into a Marine Cas- ualty or Marine Incident (the Code) Industry concern regarding the protection of Seafarers The Code was adopted in 2008 and entered into force in January There has been concern expressed - not only by shipping and seafar- 2010. It is designed to facilitate objective marine safety investiga- ing bodies but also by human rights organisations, international tions for the benefit of flag States, coastal States, the Organization legal bodies and governments - that the recognised rights of seafar- and the shipping industry in general. Its stated objective is the pro- ers were not being respected for domestic political reasons. Recent vision of a common approach for States to adopt in the conduct years have seen measures introduced, therefore, with a view to ad- of marine safety investigations into marine casualties and marine dressing the issues that repeatedly seem to arise. incidents. The Code recognises and addresses the vulnerability of seafarers in the aftermath of a casualty and Chapter 12 of the Code IMO Guidelines on the Fair Treatment of Seafarers in the Event provides mandatory standards in relation to obtaining evidence of the Maritime Accident (the Guidelines) from seafarers. The Preamble to the Code expressly refers to the The Guidelines were adopted by the IMO and ILO in 2006 and, IMO Guidelines mentioned above and indeed the Legal Commit- whilst not legally binding, they are intended to establish interna- tee of the IMO has expressly acknowledged that these should be tional norms for governments and courts to take into account. In implemented in tandem with the Code. the context of pollution cases, the particular vulnerability of seafar- ers to extended detention has been recognised in the Guidelines Key issues for Shipowners/Managers and Crew which provide, inter alia, that a port or coastal state should ‘use all If a casualty is not managed properly to protect both crew and available means to preserve evidence to minimize the continuing need company, the consequences could be dire and include the risk of for the physical presence of any seafarer’ and recognise that seafar- severe penalties (custodial as well as monetary) for all concerned ers require special protection, especially in relation to contact with and a real danger of reputational damage. There can be little doubt
The Prestige 3 Scapegoats The Prestige, carrying 77,000 tons of fuel oil, is a well-known example of a situation where, it has been suggested, the public authorities have been keen to deflect blame from themselves and find a scapegoat. Nearly ten years after the ship broke up, Captain Mangouras is still waiting for his criminal trial to take place. Cases prior and subsequent to the Prestige, however, have demonstrated that, far from be- ing a one off, such instances of potential unfair treatment of seafarers continue to occur.
10 THE SWEDISH CLUB TRITON 1-2012
P&I | Criminalisation of Seafarers
that the approach taken Media Strategy by the media affects both A common media strategy should be agreed upon with your lawyers public opinion and, poten- and any external communication should be carefully considered tially, the actions taken by the in order to protect the crew and company’s reputation, to mitigate authorities. By keeping these the risk of litigation or criminal prosecution and to manage public issues in mind it may be possi- perception. In applicable cases, reassuring the public as to the exist- ble to minimise the damaging impact of a ence of an international regime for the provision of compensation casualty. Effective casualty management is or crew release may assist in assuaging anxiety which will inevitably essential following a high profile incident and exist where significant pollution damage has occurred. Past cases an awareness of the potential for unfair treatment of the have demonstrated that managing public perception regarding the crew should be at the heart of the incident response. availability of international regimes and possible compensation can assist in reducing the level of claims. Awareness of International Safeguards relating to the Fair Treatment of Seafarers Conclusion For a shipowner and his crew to have a fighting chance of protect- Clearly the ideal situation is to prevent casualties from occurring in ing the crew in the aftermath of a casualty it will be crucial that the first place. A momentary lapse of concentration on the bridge they, and their advisors, have an awareness of the safeguards avail- can result in a life changing crisis for both crew and owners. If the able to seafarers under international law, both mandatory and non worst does occur, however, every decision taken in those first few binding. It is also important to ensure that local authorities and hours and days after a casualty will have a long term impact on prosecutors are aware of those safeguards, preferably before charges every aspect of the case – from the potential criminal liability of are brought and the decision to prosecute is taken. They should also crew and shipowner’s shore representatives to a shipowner’s repu- be aware of the potential for cross-border measures to be taken tation and the eventual cost of the incident. In time, a company’s against them in particular circumstances. A shipowner’s representa- reputation will be measured less by reference to the original cause tive, for example, should be aware that he could potentially be vul- of the casualty but more in terms of how it was perceived to have nerable to a European Arrest Warrant being issued in the aftermath responded. When it comes to the fair treatment of seafarers, to the of a casualty abroad. extent it is possible, ‘prevention’ is always better than ‘cure.’ Once an entrenched position against the crew has been taken by local Information management – External and Internal authorities and prosecutors, it may well be hard for them to ‘back Many parties with conflicting interests will pressure owners for the down’ and crew and owners may well find themselves facing crimi- urgent provision of information. It will be crucial to put in place nal proceedings for years to come. dedicated channels of communication to ensure that information Whilst measures such as the Guidelines and the recent IMO As- is gathered and analysed as soon as possible so that a consistent sembly Resolution on the subject are encouraging, it is clear that approach can be adopted. Internal communications should also there is still much to be done and it remains to be seen whether all be carefully considered and managed, in particular in relation to parties involved can work together to ensure that seafarers are treat- the creation of post-incident documents. Particular care should be ed fairly and consistently in the aftermath of a casualty. taken regarding the release of information and documents relating to causation. Such information should be carefully considered with your lawyers in the first instance.
The Tasman Spirit The Hebei Spirit In 2003, for example, the treatment of the crew and the sal- The Hebei Spirit collision in 2007 vage master in the Tasman Spirit incident prompted wide- resulted in some 11,000 tonnes of spread condemnation. This tanker, laden with Iranian crude oil, crude oil leaking into the Yellow Sea and grounded at the entrance to Karachi Port, eventually breaking up and lead- was the largest oil spill in South Korean histo- ing to a spill of some 34,000 tonnes of oil. The case is illustrative of a situ- ry. The detention and treatment of the tanker’s ation where focus upon the alleged failings of the crew served to deflect master and chief officer was the subject of sig- attention from suggestions that local authorities may be at fault. All the nificant protest and condemnation across the Greek crew on duty were detained as well as the salvage master (who only maritime industry and the case highlights the attended after the vessel broke up). The ‘Karachi 8’, as the detained group difficulties foreign seafarers may face in the became known, were held for almost nine months and were released only politically charged context of a major oil spill. after intense political pressure and continued lobbying by many interna- tional organisations as well as the Greek Government and European Union.
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P&I | Scindia duties Scindia Duties and Longsh ore Activities in the United Sta tes
Longshore work in the United States the stevedore and his longshore employees the can easily create personal injury liabil- duty of exercising due care under the circum- ity exposure for an unwary shipowner. stances. Thus, while the primary responsibility This article addresses the duties owed for the longshoremen’s safety ostensibly rests Keith B. Letourneau Shareholder by a shipowner to longshoremen in the with the stevedore, the vessel owner also owes Bell, Ryniker & Letourneau States, and provides recommendations a standard of care to the longshoremen. That Houston to minimize such exposure. standard encompasses three duties to long- shoremen servicing the vessel: (1) the “Turno- Keith Letourneau received a The leading United States Supreme Court case ver Duty,” (2) the “Active Control Duty,” and Bachelor of Science degree with setting forth the obligations of a vessel owner (3) the “Duty to Intervene.” honors from the United States is Scindia Steam Navigation Co. v. De Los Coast Guard Academy in 1980. Santos, 451 U.S. 156 (1981). Scindia stands for 1. The “Turnover Duty” His military service included ex- two important propositions. The “Turnover Duty” requires the vessel perience as a deck watch officer Firstly, as a general matter, the shipowner owner to furnish a reasonably safe ship, and to aboard a medium endurance cutter in Florida and as com- may rely upon the stevedore to avoid expos- warn the longshoremen of hazards from gear, manding officer of a Coast Guard ing longshoremen to unreasonable hazards. equipment, tools and the workspace to be used patrol boat stationed along However, under U.S. maritime law and the during cargo operations “that are known to the southeast Texas coast. He U.S. Longshore and Harbor Workers Com- the ship or should be known to it in the exer- holds the rank of Commander, pensation Act (“LHWCA”), a vessel owner cise of reasonable care.” However, the vessel U.S. Coast Guard, Retired. He cannot recover against a stevedore employer owner is not obligated to warn the stevedores graduated in 1989 from the for any injuries that occur to a longshoreman. about hazards that are open and obvious, or Marshall-Wythe School of Law, Moreover, in the event that the vessel owner dangers that “a reasonably competent steve- College of William and Mary, as breaches one of its duties to the longshoreman dore should anticipate encountering.” For a member of the Order of the Coif. Mr. Letourneau served as a (discussed below) resulting in injury, the long- example, in a recent case, the Fifth Circuit trial attorney for both the Coast shoreman can sue the vessel owner for negli- Court of Appeals (which governs federal pro- Guard’s Procurement Law Divi- gence. Under joint and several liability princi- ceedings in Texas, Louisiana and Mississippi) sion and the Admiralty Section of ples that apply pursuant to U.S. maritime law, found that a longshoreman, who was injured the U.S. Department of Justice’s if we hypothesize that the vessel owner is 10% because of an open and obvious defect in a Civil Division. He is a founding at fault, the longshoreman 20%, and the steve- stow of steel coils in the cargo hold, could not shareholder in the law firm Bell, dore employer 70%, the vessel owner nonethe- recover against the vessel owner, operator or Ryniker & Letourneau, P.C., based less would be responsible for 80% of the dam- charterer. In that case, one of the steel coils in Houston, Texas. He is licensed ages awarded. fell from atop the stow onto the longshore- to practice in Texas and Virginia, and admitted before numer- This result follows because joint and sev- man resulting in the loss of a leg. The court ous federal district and appel- eral liability principles under U.S. maritime found that a “vessel owner has no legal duty to late courts, including the Third, law shift the risk of uncollectibility from an prevent or alleviate an unsafe condition in the Fourth, Fifth and Seventh Circuit innocent plaintiff to a culpable tortfeasor. cargo hold resulting from an improper stow Courts of Appeals. The LHWCA’s compensation bar essentially when the condition is open and obvious to the transforms the stevedore into a judgment- longshore workers.” proof defendant. Additionally, the stevedore’s Vessel owners may wish to consider some worker’s compensation carrier generally inter- preventative measures before arriving in a U.S. venes in any suit against owners or charterers port. To ward off potential liability exposure to recover medical care costs expended on the in the event a longshoreman claims injury, longshoreman’s behalf. Consequently, the ves- owners may be able to satisfy their Turnover sel owner, rather than the longshoreman, bears Duty obligations through the use of a check- the brunt of fault attributable to the stevedore, list identifying potentially hazardous condi- despite Scindia’s first proposition. tions, perhaps coupled with a simple vessel dia- Secondly, Scindia holds that the vessel owes gram showing the main deck, cargo holds and
9 continues on page 14 12 THE SWEDISHSWEDISH CLUB TRTRITONITON 1-2012 P h oto: Stefan Eliasson
Scindia Duties and Longsh ore The Turnover Duty The Active Control Duty Activities in the United Sta tes The Duty to Intervene
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P&I | Scindia duties
9 continued from page 12 other areas where the longshoremen are scheduled to work. Intervene” may be implicated if the master or chief officer is Prior to the vessel’s arrival in port, one of vessel’s officers contractually obligated to supervise cargo operations, or if ves- should carefully inspect each of these areas, and note on the sel equipment used during such operations is not operating checklist any potentially hazardous conditions, for example, properly, for example, ship’s winches or cranes. with respect to hatchways, latches, ladders, lighting, twist Numerous accidents have occurred over the years involv- locks, wires, cables, equipment lying about, rusty conditions ing vessel cranes while operated by longshoremen. Generally, of deck and handhold surfaces, etc. The checklist could note such cases have involved the failure to properly maintain crane where any repairs are being conducted, and the scope of the components and equipment in good operating order. Own- project (to place the stevedore on notice of not only where re- ers should consider tasking their technical superintendents to pair work is ongoing, but where re- ensure that ship’s cranes are regularly pair work is being considered). Inspect vessel equipment inspected and serviced, and current Provided vessel workspaces are in on all class certifications. good condition, it may make sense to and spaces Often times, the charter agreement take a series of digital photographs of allocates responsibilities for cargo the spaces where the longshoremen stowage to the charterer “under the will work, including access ladders, Document any potentially master’s supervision,” and sometimes to document the condition during the vessel owner and charterer have the pre-arrival walk through. To hazardous conditions entered into an Inter-Club Agree- complete the turnover process, upon ment, or incorporated it by reference arrival in port, the chief mate could Convey this information into the charter. These arrangements present the checklist to the steve- may affect how a case brought by the dore, and the two could walk the to the stevedore prior to longshoreman against both the ves- vessel where the longshoremen will sel owner and charterer will be de- work noting any areas of concern. commencing cargo opera- fended, but do not necessarily alter If the vessel provides any equip- tions whether the longshoreman may bring ment employed during longshore suit against both parties in the first work, for example, twist locks, lash- instance. To avoid assisting the long- ing chains, hooks, etc., such equip- Stay out of active cargo shoreman by pointing fingers at each ment should be regularly inspected, operations other, it is important at the inception serviced, and replaced as necessary, of such a suit to work out the defense with documentation provided (or arrangements between vessel owner perhaps at least made available) to Service and inspect the and charterer if at all possible. the stevedores evidencing the condi- The vessel owner’s duty to intervene tion of such equipment at the start of ship’s cranes regularly does not extend to open and obvi- longshore operations. ous transitory conditions (1) created entirely by the stevedore, (2) under its control, or (3) relating 2. The “Active Control Duty” wholly to the stevedore’s own gear and operations. The “Active Control Duty” is breached if the vessel owner “ac- tively involves itself in the cargo operations and negligently Summary injures a longshoreman” or “if it fails to exercise due care to In summary, whiles stevedores are purportedly the party pri- avoid exposing longshoremen to harm from hazards they may marily responsible for the safety of longshoremen in the States, encounter in areas, or from equipment, under the active con- in the event of an accident resulting in personal injury or trol of the vessel during the stevedoring operation.” Before death, owners face considerable liability exposure should the longshore activities commence, the master or chief mate may vessel breach one of the three Scindia duties (Turnover, Active wish to instruct vessel personnel to stay completely clear of Control, or Duty to Intervene), especially because any liability loading or unloading operations, leaving such work to the of the stevedore is attributable to the culpable defendant(s) longshore gangs. By doing so, owners may avoid the “Active under U.S. maritime law. The best method to obviate such Control Duty” in its entirety. liability is to institute regular procedures to satisfy or avoid breaching these duties: inspect vessel equipment and spaces; 3. The “Duty to Intervene” document any potentially hazardous conditions; convey this Lastly, under the “Duty to Intervene”, a vessel owner owes information to the stevedore prior to commencing cargo op- a duty to intervene if “contract provision, positive law, or erations; stay out of active cargo operations; and service and custom” dictates “by way of supervision or inspection [that inspect the ship’s cranes regularly. These suggestions should the vessel owner] exercise reasonable care to discover danger- help to minimize owner’s liability exposure in the event of a ous conditions that develop within the confines of the cargo longshoreman’s accident. operations that are assigned to the stevedore.” The “Duty to
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Club Information | News from Gothenburg
Biting the bullet
As a shipowners’ association we know – as well as our members do – the difficult times that are presently keeping a firm grip on shipping. Many shipping indices are point- ing south. At the same time shipowners’ underwriters face increased claims frequency and severity – in particular on Tony Schröder cargo and crew claims (personal injuries, illnesses etc.). Hull Area Manager claims follow the commercial shipping market (or are rather Team Gothenburg anti-cyclical) in so much as that when shipping is booming, so are claims. When shipping is at its peak hull claims rise, when shipping is in the doldrums, hull claims are less frequent. On the liability side however, this is not the case. P&I claims On our service side we are pleased to advise that we have are exposed to new legislation, increased limits of liabilities, strengthened our Marine claims side by employing Magnus harder political stances and jurisdictional difficulties. P&I Johansson as a Senior Claims Executive. Magnus is a Naval clubs are therefore seeing a broader field of claims, whilst at Architect and was previously a Superintendent with Broströms the same time the cost per claim is on the rise. Clubs are going (bought by Maersk in 2008) and before he joined the Club he to have to bite the bullet of the increased claims trend. Due to was Sales and Project Manager at the largest shipyard in the sad state of the shipping market, shipowners are going to Gothenburg, Götaverken Cityvarvet. Magnus’ technical back- have to bite the bullet too, this year as well, some more than ground will be a first-class reinforcement of the technical side others – however hopefully they will not bite the dust! 2012 of Marine claims handling. We have further employed Caroline will no doubt be a year of endurance – let’s hope that we all Stenman Dencker, a lawyer, as a Marine Claims Adjuster. As a get through it stronger and more vitalised. full marine claims service provider Marine Claims Adjusting is P&I renewals are never easy, but this year the gap between an integral and important part of the Club’ service structure. claims trends on the one hand – and the poor state of the We are glad to have them both onboard. shipping market on the other – made it extra challenging. On the marketing side Team Gothenburg will in the spring We and our good members have however managed to come – March through May – have various Club evenings, breakfast through this with a mutual understanding and renewed con- meetings and lunch seminars. Focus will be on Maritime Re- fidence. That is our ultimate guiding star as a shipowners’ source Management (MRM). We hope to see many of you in Club. We have a responsibility to safeguard the Club’s well- Oslo, Bremen, Hamburg, Istanbul or Copenhagen! being – for the best of the shipowners!
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P&I | Cleanliness of holds The High Cost of failing “Grain Clean” in Australia pumping system, moisture, the hatches, areas of the ship ‘up close’ which the crew odours, rust scale, grease or oil stains and cannot normally even see - let alone reach most importantly, previous cargo residues. to clean. So the first lesson to learn is: James Neill AQIS inspection “Make sure the ship is clean and gives a Solicitor Aus Ship AQIS does a very similar inspection to the good impression of cleanliness so that it Sydney, Australia ‘independent’ surveyor’ but their objectives decisively passes the first inspection done are slightly different. AQIS is focused on without a cherry picker – so the inspector Recently a ship arrived in Adelaide, the ‘quality’ of Australia’s exports. They has no cause to call for a cherry picker.” Australia. The owners of that ship look at the holds because ‘dirty’ holds re- were experienced and careful. They sult in ‘dirty’ cargo. Why do vessels usually fail? knew Australia was tough on ‘grain At the risk of stating the obvious, it is There are three main reasons: clean’ – they had instructed the important to remember grain is food and 1. The holds were simply not close to clean master to clean the hold and had must be fit for human consumption. It is enough to pass when inspected. received the master’s assurance that therefore perhaps not surprising these in- everything was “OK”. Three weeks spectors are careful. 2. The ship was nearly good enough to later they were writing a cheque for The initial inspection by the under- pass and with the right advice and su- over A$200,000 for cleaning. How writer’s surveyor tends to take place at the pervision it might have passed. did this happen and what are the anchorage and the inspection by AQIS 3. That particular surveyor applied a high- lessons for the rest of us? normally takes place at the berth. er standard than others would have.
TheExport Control Act (1982) requires How the inspections are conducted Case Study 1 both the Australian Quarantine and When a ship fails, it is wrong to assume the A 1997 built Panamax bulk carrier arrived Inspection Service (AQIS) and an inde- master and owners lacked diligence. That at the anchorage in early October 2011 pendent marine underwriter’s surveyor to is almost never the case. Usually the mas- with an ETB of ten days later. The under- inspect the vessel’s holds before loading ter and owners know they are going to be writer’s inspector attended on board, at the grain. (For ease of reference in this paper inspected and they usually make a serious anchorage (via a launch) a few days before I will call these two people “The Inspec- effort to pass. The surveyors however look the ETB, and failed the ship. The inspector tors”.) in areas the crew cannot easily get to - high reported he had found a large number of The vessel must pass both inspections areas, behind ladders, behind manhole cov- deficiencies including infestation with in- before it can load. ers, on top of underdeck beams, behind sects in a void space behind a panel within bulkheads and into void spaces and those a hold and substantial quantities of residue The independent inspector are the areas that usually cause failure. from previous cargos in high areas of the The underwriters ‘independent’ inspec- Usually inspections are initially con- ship. The ship was delayed two weeks and tor is ‘independent’ in the sense he works ducted without using cherry pickers and cleaned and fumigated with the ship’s crew for an independent company but he is ap- usually not only about “what the Inspector and shore labour using cherry pickers and pointed by the cargo underwriters and ob- sees” but also “about the general impres- high-pressure washing. The cleaning cost viously that is his focus. sion the Inspector forms.” Many ships pass was more than A$200,000. This is an ex- When ships fail, many owners ask us, “Is these first inspections BUT if either sur- ample of point ‘1’ above – i.e. a ship that that guy helping out the shipper because veyor has doubts about the cleanliness of was perhaps not close to passing. they are not ready to load?” The answer is areas they cannot properly see, they ask for “No’. cherry pickers to be provided. Usually, that Case Study 2 He is not appointed by the shippers and is when the trouble starts - because inspec- A 2011 built ship arrived at an Australian in our experience he is not influenced at all tion by cherry picker is tough to pass. Even port in 2011. The ship was less than six by the shippers’ or charterers’ commercial ships that have just come from dry dock months old and had only made a few voy- interests. His focus is entirely on certifying have failed when inspected using cherry ages. The ship passed inspection at an- the ship as fit to load with respect to the pickers. The reason is the inspector looks at chorage by the underwriter’s inspector
16 THE SWEDISH CLUB TRITON 1-2012 P h oto: TSC
Some crews have successfully used ladders and platforms to clean high areas prior to inspection.
but then failed AQIS’ survey when at the • Some crews have successfully used lad- Recommendations berth. The ship was subsequently cleaned ders and platforms to clean high areas 1. Read and understand the “lessons” out- using the ship’s crew and shore labour us- prior to inspection. lined in this article. ing cherry pickers and high-pressure wash- • Very careful cleaning the low reachable 2. Arrive with a very clean ship!! ing. The ship was delayed ten days and the areas creates a good impression with the (Not so easy in the real world.) cleaning cost was over A$200,000. This inspectors. is an example of two inspecting surveyors 3. Appoint your own surveyor to inspect Thirdly, owners should consider getting having different opinions and the differ- your ship before the official inspec- their own surveyor to attend BEFORE ent standards two surveyors can have when tions take place. The cost is usually well the underwriters and AQIS attend so as conducting the same inspection. It is also worth it compared to failing inspection to ‘pre-inspect’ and then have the surveyor an example of a ship that perhaps ‘could’ and having to clean. supervise additional cleaning prior to the have passed had the owners obtained good 4. Appoint your own surveyor to accom- actual inspections, so as to increase the advice and supervision. pany the inspectors. This can make the chances of passing first time. On numerous difference sometimes. occasions this has worked successfully. What lessons can we learn? 5. If you did not follow the recommenda- Fourthly, owners should consider getting Firstly, owners should note this is a com- tions above and your vessel fails, im- their own surveyor to attend during the in- mon and expensive problem. We do not mediately contact the owners P&I sur- spections. These inspections are very much know the statistics but believe over the last veyor to provide advice. three years at least ten ships per year have a matter of ‘opinion’ and ‘degree’ and 6. If cleaning is required, seek advice from failed these surveys and incurred cleaning therefore owners can sometimes positively the P&I surveyor and accept that ad- costs of about A$200,000 per ship. influence that ‘opinion’ by using a senior surveyor who is ‘a local’ and ‘respected’. vice. Much money and time has been Secondly, owners can do something to One never knows for sure but we think we wasted pursuing alternatives against the minimise the risk. If the ship is fixed to have seen surveyors achieve good results in recommendations of the P&I surveyors. load grain in Australia the crew should this respect. 7. When contracting with cleaning com- clean the holds thoroughly: Finally, it is usually a false economy for panies, get several quotes and try to • If the next cargo is grain from Australia owners not to send their own surveyor. On contract for a lump-sum amount if pos- and it is safe to do so, get the crew up one spectacular occasion an owner was pre- sible. Also take heed of local experience on top of the previous cargo before dis- pared to send a surveyor but decided the and the advice of your agent. Lower charge and clean the high areas while cost of a helicopter to that anchorage was daily rates are not a bargain if the task you can. just too high and so did not send him – takes more days. the owners subsequently spent more than A$200,000 cleaning that ship.
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P&I | OPA United States Coast Guard grants petition to limit OPA 90 liability for Selendang Ayu Oil Spill
On 27 January 2012 the United dang Ayu grounded on the exposed, rocky States Coast Guard National Pollution coastline of northwest Unalaska Island. Funds Center (the “NPFC”) issued a deci- The ship broke in half shortly after the sion upholding the right of the owner and grounding, resulting in the total loss of the Herbert H. Ray Jr. operator of the Selendang Ayu to limit ship and its cargo of soy beans, and the dis- Managing Shareholder their liabilities under the U.S. Oil Pollu- charge of approximately 350,000 gallons Keesal, Young & Logan Anchorage, Alaska, USA tion Act of 1990 (“OPA”) arising from the of bunker fuel and diesel from the ship’s Selendang Ayu oil spill. The NPFC’s deci- double bottom fuel tanks, which ruptured sion allows the ship’s owner and operator on impact. Tragically, six of the ship’s crew Bert Ray received his B.S. degree from the College of William and (the “RP”) to limit their OPA liabilities to perished when a U.S. Coast Guard heli- Mary in 1982, an M.S. degree USD 23,853,000.00, based on the ship’s copter crashed while lifting them from the from George Mason University gross tonnage and the applicable OPA lim- stricken ship. in 1986, and a J.D. degree from it at the time of the casualty. The OPA re- the University of Oregon in 1988. lated liabilities resulting from the incident The response He is a member of the Alaska Bar have exceeded USD 130,000,000, and The Coast Guard and the State of Alaska Association, the Washington Bar the NPFC’s decision entitles The Swed- established a command center at Dutch Association, the Maritime Law ish Club, the International Group, and Harbor, Unalaska Island, a commercial Association of the United States, the Group’s reinsurers to be reimbursed fishing port located approximately 40 and Litigation Counsel of Amer- ica. He has a diverse, general for their OPA expenditures in excess of miles by air from the site of the grounding. litigation practice that includes the OPA limit from the Oil Spill Liability Personnel from The Swedish Club, the RP, environmental, maritime, com- Trust Fund (“the Fund”). the Club’s local correspondent, and nu- mercial, securities, malpractice merous oil response contractors travelled and white collar criminal mat- The casualty to Dutch Harbor to coordinate and handle ters. He practices extensively in The fully-laden Panamax bulk carrier was the response, settle claims, and represent state and federal courts, as well on a voyage between Seattle, Washington the ship’s owners and operators in the of- as in commercial arbitrations, and Xiamen, China in December 2004 ficial government investigations which en- and before administrative agen- when the casualty occurred. On 6 Decem- sued. Despite the fierce winter conditions, cies. He regularly represents clients in casualty responses in ber 2004, while transiting the Bering Sea the Club’s contractors were successful in Alaska and along the US West north of the Aleutian Islands, the crew removing more than 100,000 gallons of Coast, serving as lead counsel shut down the main engine, after discov- fuel from the ship’s wing tanks and engine during response operations and ering a crack in one of the cylinder liners. room tanks, by pumping the fuel into port- in resulting litigation. He also has With a storm approaching, the crew iso- able tanks and flying them to shore by heli- significant experience represent- lated the cracked cylinder liner, with the copter. Shoreline cleanup operations began ing clients in natural resource intention of restarting the engine and sail- in December 2004 and were completed in damage assessments conduct- ing to a port of refuge. However, after they the summer of 2006. ed by state and federal agencies. successfully isolated the damaged cylinder, Despite the fact that the Bering Sea is the they could not restart the main engine. largest and most productive commercial The storm reached the ship before local fishery area in the United States, the Club tugs could take her under tow, and drove and its consultants were able to avoid the the ship towards shore. When the tugs closure of several large commercial fisheries, and a U.S. Coast Guard Cutter arrived on and to settle all claims asserted by commer- scene, they were unable to halt the ship’s cial fishermen without litigation, with the drift in the stormy seas and winds. During exception of one frivolous lawsuit that was this time, the ship’s crew struggled under dismissed by the Court. The Club settled extremely trying conditions to repair and the claims of local landowners whose lands restart the main engine. were impacted by the spill, and conducted On the afternoon of 8 December, after a cooperative natural resource damages as- drifting for more than 50 hours, the Selen- sessment with state and federal officials.
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United States Coast Guard grants petition to limit OPA 90 liability for Selendang Ayu Oil Spill P h oto: U nified Command
The ship broke in half shortly after the grounding.
Shortly after the grounding, the State of strated that while the wreck itself posed removed. A local contractor was able to Alaska demanded that the owner remove no risk of harm to the environment, a remove the remaining superstructure for a the wreck of the Selendang Ayu. Given the large-scale wreck removal operation at the small fraction of the cost of removing the size of the vessel, and the remote, exposed exposed, remote location of the wreck, and entire wreck. location of the wreck, removal of the wreck the resulting environmental disruption, would have been very expensive. The Club, posed significant environmental risks. As Limitation of liability its local correspondent and consultants a result of these efforts, the State of Alaska Under OPA, an RP is strictly liable for arranged for the removal of all remaining ultimately agreed that the wreck could response costs and damages arising from pollutants from the wreck. They then met be left in place, so long as the superstruc- an incident. However, the RP may limit with State of Alaska officials and demon- ture remaining above the waterline was 9 continues on page 20
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P&I | OPA P h oto: U nified Command
On 8 December 2004, the Selendang Ayu grounded on the exposed coastline of Unalaska Island. 9 continued from page 19 its OPA liability if it demonstrates that the crack in a main engine cylinder liner, and misconduct, or the violation of any United Incident was not caused by gross negligence, the crew’s inability to restart the engine States laws. willful misconduct, or the violation of a after isolating the cracked cylinder. The RP The RP also had to address claims that U.S. statute or regulation governing ship was required to prove that these events were the crew waited too long to notify the operations. In addition, the RP must dem- not the result of gross negligence or willful Coast Guard and local officials about the onstrate that it timely notified the United misconduct on its part. Because the engine engine casualty, and delayed in searching States of the incident, and that it provided room was flooded when the ship grounded, for salvage tugs to respond. More than 12 reasonable cooperation and assistance in and the ship’s chief engineer and second hours elapsed from the time the engine lin- response to the spill. The burden of proof engineer died in the helicopter crash, much er crack was discovered until local officials is on the RP to prove by a preponderance of the evidence regarding the cause of the were notified that the ship was drifting to- of the evidence that it is entitled to limit its cracked liner, and the inability to restart the wards shore. The Club and its correspond- OPA liability. engine, was lost when the ship grounded ent were able to demonstrate that there Because it may take several years before an and the helicopter crashed. were no tugs available to respond to the RP is in a position to prove that it is entitled The Club, its correspondent, and engi- casualty when it occurred, and that the tugs to limit its OPA liability, and it takes sev- neering experts interviewed the surviving that eventually responded would not have eral years for the NPFC to adjudicate such members of the ship’s crew and other en- arrived any sooner. a claim, the RP may incur OPA response gineers and technical superintendents em- The decision to grant limitation of liabil- costs and damages that exceed the limita- ployed by the RP, examined the ship’s main- ity is the first step in what will be a substan- tion amount, before the NPFC determines tenance records, and reviewed photographs tial recovery for the IG and their reinsurers whether the RP is entitled to limit its liabili- of the engine taken by the crew while they from the NPFC. Ultimately, this recovery ty. One purpose of the Fund is to reimburse struggled to restart it. As a result of the will improve the Group’s loss record with RPs who establish they are entitled to limit evidence obtained during this forensic the reinsurance market, benefitting rein- their OPA liability, and who have incurred investigation, they were able to persuade surers as well as all of the Clubs and their OPA costs that exceed the liability limit. the NPFC that the cracked cylinder liner members. In the case of the Selendang Ayu, the and the inability to restart the engine were proximate causes of the grounding were the not caused by gross negligence or willful
20 THE SWEDISH CLUB TRITON 1-2012
Safety | SOLAS P h oto: Ralph White/CORBIS Titanic and SOLAS (Safety Of Lifes At Sea) 1912 - 2012
Hans Filipsson Deputy Area Manager Team Gothenburg
The Titanic sails away from the dock for her maiden voyage in 1912.
Sailing on the Seven Seas is often (or maximum cargo intake). Overloading described in a romantic way but so will lead to a reduced freeboard and less many losses throughout history tell stability as a result. another story. While shipping is per- haps the most international of all Titanic – the biggest disaster ever industries, it is also one of the most On 10 April 1912, the S/S Titanic began dangerous. Despite the fact that her maiden voyage, bound for New York ships have never been so technically City, with Captain Edward J. Smith in advanced as they are today, acci- command. dents still happen. Just before midnight, on 14 April 1912, cessive forms is generally regarded as the the luxury, British, passenger liner sank most important of all international trea- Today’s shipping industry is a lot bigger after colliding with a huge iceberg. The ties concerning the safety of merchant than it was a hundred years ago and we can Titanic was said to be one of the most ships. at least say that the relative number of dis- modern and unsinkable ships of the time The main objective of the SOLAS Con- asters, and the loss of life, has been reduced. and therefore only carried 20 lifeboats vention is to specify minimum standards However, there is still a great need for on her fateful maiden voyage, four more for the construction, equipment and op- safety improvements and training for both than required by the British authorities. eration of ships, compatible with their officers and ratings. Unfortunately, that was less than half the safety. Flag States are responsible for en- number needed to accommodate every- suring that ships under their flag comply The Merchant Shipping Act one on board. with its requirements, and a number of About thirty-five years before the Titanic About 1500 passengers including ship certificates are prescribed in the Conven- disaster, the British Government presented personnel lost their lives. Men and mem- tion as proof that this has been done. a proposal for increased safety at sea, the bers of the 2nd and 3rd class were less likely “Merchant Shipping Act”. It was a result of to survive. 97 per cent of the women in 100 years have passed hard work from Mr Samuel Plimsoll who first class survived. Overall, only 20 per The Titanic disaster occurred almost 100 was a colourful pioneer in the field of im- cent of the men survived, compared with years ago to the day before this issue of proved safety at sea. almost 75 per cent of the women. Triton is distributed among members and Mr Plimsoll was elected to the Parlia- The Titanic was the biggest disaster by other business partners. ment in 1868, at the age of 44. He started a far and publicity was enormous. A large The time from when Mr Samuel Plim- campaign against unseaworthy vessels and, number of the passengers were among the soll was elected in 1868, also very much at the start of his campaign, became very most prominent people of the day. It was reflects the time when The Swedish Club unpopular among established politicians decided that something had to be done to has been one of the players in marine and those with financial interests in the avoid such disasters in the future. insurance. The Swedish Club was es- coal trade. tablished in 1872 and we will not only He continued his mission and we can The SOLAS Convention continue to provide shipowners with in- still see the “Plimsoll Line” (Load Line) The first version of SOLAS was adopted surance cover, but also continue contrib- painted on both sides of all vessels. The in 1914, in response to the Titanic disas- uting to the important work for improved “Load Line” shows the minimum freeboard ter. The SOLAS Convention in its suc- safety at sea.
21 THE SWEDISH CLUB TRITON 1-2012
Loss Prevention | P&I
P&I Claims Analysis
This is a brief article from a comprehensive study about P&I claims over the past ten years that will soon be published. This study will look specifically at cargo, illness and injury claims, which have occurred on bulker, container and tanker vessels and address the specific issues to why these claims occur. There is a worrying increase in claim frequency since 2009 Joakim Enström but also an increase in the average claim cost. This is the same Loss Pevention Officer for all the three claim categories and vessel types. One of the reasons for this increase could be the financial crisis and eco- suffering from an illness the Club has developed a Pre Engage- nomic uncertainty in the world since 2008. This uncertainty ment Medical Examination (PEME), which is a more compre- does not only affect companies but is likely to create stress to hensive examination. If the PEME is completed correctly it is employees as well. likely that a serious illness will be discovered.
Cargo Injury The average cost of a cargo claim is stable. However, with a Injuries mostly occur during normal maintenance work. Ap- large increase in frequency the total cost would be substantial. proved procedures are disregarded and unfortunately it is com- Between 2010 and 2011 the total cost increased by around mon that neither a work permit or risk assessment has been 20%. issued. The most expensive cargo claim category is contamination, An ISM requirement has been in place since 1 July 2010 for which is mainly an issue for tankers and bulkers. Wet damage companies to have shipboard operational procedures that are is the most expensive claim category for container vessels. based on risk assessments. The purpose of a risk assessment is In order to prevent contamination, it is imperative to take to carry out a careful examination of shipboard operations to cargo samples. There are unfortunately numerous cases where verify that there are adequate controls in place making risk lev- the vessel has loaded an entire consignment and discovered af- els acceptable. terwards that it was contaminated. If the risk assessment has been completed correctly it is likely that most risks will be addressed. If a work permit has also Illness been issued for the specific job it should be obvious to crew The two most common illnesses are cardiovascular disease and members how to complete the job safely. problems with the digestive system. Cardiovascular disease is almost three times as common as problems with the digestive Immediate causes system. So why do accidents happen? Has the crew not received enough This is a huge concern, as cardiovascular disease remains one training, lacking experience, suffering from fatigue? Are they of the biggest causes of death worldwide. disregarding procedures? Is the company not explaining what To prevent these issues and ensure that crew members are is expected of their employees? healthy and fit for duty, the normal medical examination seems There are usually many reasons why an accident happens but to be insufficient. It will take years of unhealthy living for a the immediate cause is usually obvious. Most people are aware serious illness to develop. To be able to discover if a person is when something is dangerous but for some reason believe that
22 THE SWEDISH CLUB TRITON 1-2012
Loss Prevention | P&I 45000 0.7 40000 0.35 40000 0.6 35000 0.3 35000 30000 0.5 0.25 30000 25000 25000 0.4 0.2 20000 20000 0.3 0.15 Frequency 15000 Frequency Cost per vessel
15000 Cost per vessel 0.2 0.1 10000 10000 0.1 5000 5000 0.05
0 0 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Cargo, Injury, Illness: Bulker, Container, Tanker – Claims >= 5000 USD Cargo: Bulker, Container, Tanker - Claims cost >= USD 5000
6000 0.25 10000 0.16 9000 0.14 5000 0.2 8000 0.12 7000 4000 0.1 0.15 6000 3000 5000 0.08
0.1 Frequency 4000 Frequency 0.06
Cost per vessel 2000 Cost per vessel 3000 0.04 0.05 2000 1000 0.02 1000
0 0 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Illness: Bulker, Container, Tanker - Claims cost >= USD 5000 Injury: Bulker, Container, Tanker - Claims cost >= USD 5000
the risk is acceptable. We hear about these miscalculations and the root causes need to be identified and rectified. every-day in the news. The problem with a vessel is that the con- In a well functioning safety culture most people realise the sequences can be enormous and even fatal. importance of procedures and are aware of the consequences of not following them. The procedures can be seen as something There are some recurring immediate causes: positive that will benefit their own safety and that it is worth Lack of planning the trouble of e.g. using a safety harness, filling out the work Lack of experience permit correctly and following the actual requirements. No clear guidelines This is what MRM is all about Not following company procedures The above issues are similar to the immediate causes in the Col- Procedures are unclear or not extensive enough lisions and Groundings study (see article in Triton 2-2011). This Not being assertive is expected, as the failure will most likely be from human error. This once again emphasizes the importance of a good safety cul- Not recognising dangerous situations ture and improving the knowledge about human errors, which Disregarding own safety and well-being MRM (Maritime Resource Management) is all about. Poor communication Conclusion Lack of safety culture To prevent these claims it’s essential for a proper safety culture The immediate causes mentioned above would indicate a pos- to be established at the company. For the company to success- sible lack of safety culture. One of the difficulties in implement- fully implement a safety culture it is essential that all involved ing a good safety culture is that safety for one person can be receive training, are informed about the importance of the safe- different to another. To change these habits it is imperative that ty system, that all concerned are aware that they are expected to everyone onboard knows what is expected of them. Shoreside follow procedures and that it is unacceptable to disregard safety. activities need to be clear about policy and company culture. All employees need to receive proper training and follow-ups
23 THE SSWEDISHWEDISH CLUB TRTRITONITON 1-2012
Media | Communications strategy
UND ER THE SPOTLIGHT
Managing the media in a high- profile casualty situation
24 THE SWEDISH CLUB TRITON 1-2012 P h oto: MorgueFile Media | Communications strategy
UND ER THE SPOTLIGHT
All shipowners have operational risk exposures: the loss of life, environmental damage and property and economic losses potentially associated with a casualty. Much can be done to reduce risks, through proactive loss prevention, rig- orous training and adherence to sound procedures, but the fact remains that no owner is immune from the possibility of Tony Redding Director, TRS Public Relations a major casualty. Such events can find the owner at the cen- Canterbury, UK tre of public controversy, largely fuelled by hostile media coverage. TRS Director Tony Redding The reputational threats associated with shipping are inherent and is a public relations and crisis should be recognised as such by all owners with concern for their communications specialist standing in the market and the wider world. We live in a world of 24/7 with over 25 years’ experience rolling news and social media. The public dimension of these risk ex- in the maritime and casualty response sectors. TRS Public posures simply cannot be ignored. It is no longer enough to do a good Relations is based in Canter- job when a casualty occurs, the owner must also be seen to do a good bury, Kent, UK and has a large job. An effective response must be recognised for what it is. This is not international client base in easy to achieve, as accidents – by definition – are highly negative events. the maritime industries. Tony So, it is important to be realistic when considering the matter of media Redding has organised and communications in such grossly adverse circumstances. Equally, the participated in over 250 crisis obvious difficulties are no excuse for not trying! Indeed, a failure to training workshops and simu- communicate effectively in a crisis is likely to exacerbate the economic lations worldwide, from the damage on all fronts. Americas and Europe to the Middle East and Far East. He has assisted shipowners faced Understanding how the media works with significant accident and This issue is best considered by reviewing the characteristics of the vari- issues management challeng- ous types of media. Here, the key broadcast outlets – primarily the es, concerning oil spills, fires, major TV news channels with an international reach - shape public explosions, groundings and perceptions and heavily influence the direction taken by other media loss of life. (including mass circulation newspapers). An owner with no experience of media exposure in major accident situations will feel the “culture shock” in these circumstances. There is that surprisingly accurate cuta- way image of the grounded vessel, sitting on the reef. How was that done in a matter of a few hours, with no help from our Technical De- partment? How did they find the Master’s wife? How did they get hold of the identity of the Master in the first place? Perhaps the biggest shock is the speed required for effective media communications. When challenged on a dangerously sensitive issue, it is useless to offer a response the next day (having talked it over with the lawyers). When morning comes, the media attention is elsewhere and a fresh challenge has emerged. It is too late! It is so easy to find yourself on the backfoot, permanently or two steps behind the media agenda. 9 continues on page 26
25 THE SWEDISH CLUB TRITON 1-2012
Media | Communications strategy
Convincing and skilled communicators, from within the senior management group, should be identified and trained for a challenging public role following a high profile accident.
continued from page 25 Print media have more time to explore and investigate your message across. You must also be prepared to EX- 9 the accident and its causes. Privacy and media intrusion PLAIN THINGS and put them into context. are hot issues in the UK, driven by the various phone There is also the delicate matter of fair treatment. This hacking scandals. The owner should assume that ALL is an extremely rare commodity during coverage of a investigative tools will be used in a really big story. “Pub- major story involving loss of life, pollution and, perhaps, lic interest” may offer some degree of defence for intru- the suggestion that safety took a back seat to profit. It is sion (although it does not excuse criminal activity). The important to remember that fair treatment is not yours by central point is simple: the bigger the story, the more the right, but needs to be worked for (and deserved!) media can be expected to commit resources and money to investigate. Frankly, the owner’s main concern in such Preparing for media response situations is more likely to be the accuracy of media re- The first preparatory step is recognition that media cov- ports, rather than any inaccuracies. erage is an integral part of major casualty/spill response. One consideration here is the ability to source news The extra media-related workload during a high pressure leads and photos/video clips from social media. The in- operational response needs to be recognised and allowed discretions associated with social media are legendary. for. The procedures for efficient media response should Many companies have already responded by issuing a be formalised and included in the company’s Emergency Social Media Policy for their employees (although, of Response Plan. Drills should include the “public compo- course, the effectiveness of such measures is questionable, nent” (media/relatives/other audiences). There should be to say the least, in relation to the children of employees!). dedicated training in the public response aspects of casu- Many shipping professionals are surprised at the me- alty management. Convincing and skilled communica- dia’s level of ignorance on shipping matters. This can be tors, from within the senior management group, should especially acute in the broadcast media. In one case – be identified and trained for a challenging public role some years ago – a CNN planner asked the author if he following a high profile accident. could arrange permission for a TV reporter and crew to It makes sense to make a pre-event response agree- land by helicopter on the main deck of a burning tanker. ment with media specialists. It also makes sense to train When it was pointed out that the vessel in question was with these advisors, so as to identify and coach company on fire at the stern, the caller argued that it was a big spokespersons and, in addition, create awareness and un- ship and “surely it would be safe to land at the front”. On derstanding of the full impact of public and media issues. another occasion, a lady representing a major TV news This process should also involve consideration of the channel asked if the Salvage Master and his team could owner’s vulnerabilities, at company, ship and incident refloat the ship during daylight hours, “as, naturally, we level. From the company perspective, sensitivities may in- want to film it!” volve problems with a particular class of vessel or a track Such incidents may be amusing (in retrospect), but record including past incidents of a serious nature. From they do make a serious point. Successful media commu- the standpoint of the vessel involved, the vulnerabilities nications in casualty situations is not just about getting might concern age, flag, manning, port state record and
26 P h THE SWEDISH CLUB TRITON 1-2012 oto: iStockphoto
Media | Communications strategy
The answers need to come fast and they need to be convincing. The owner needs to be honest and avoid any temptation to mislead. The very essence of good media response is to know just how far to go, in terms of detail.
any past incidents. Remember that no amount of clever that they will remain prime targets for journalists and public relations and smart communications can paper TV reporters until their repatriation. Even then, they over operational failures by the crew or the owner’s emer- and their families may still be hounded, if news interest gency team ashore. Every important operational option remains strong. should be considered from a public interest perspective A last point on “security”: every member of the owner’s (for example: How long did it take to make the call for response team is “on duty” for every second spent out- tug assistance? Why were non-essential personnel left on side the hotel room. Smiles, jokes and a glass of beer are board, given the risk of a second explosion? With his ves- open to misinterpretation and exploitation in situations sel so heavily damaged, why did the Captain sail parallel involving loss of life and severe pollution damage. There to the coast, rather than head out to sea?). Negative really is NOTHING FUNNY about a marine accident. perceptions can multiply rapidly unless clear and firm To conclude, in today’s world it is a big mistake to fail responses are forthcoming. The answers need to come to recognise the power of the media and public opinion. fast and they need to be convincing. The owner needs to Once an owner loses control of the public dimension, be honest and avoid any temptation to mislead. The very he will find it almost impossible to restore the situation. essence of good media response is to know just how far to Negative views tend to root deeply and quickly, as the go, in terms of detail. search for scapegoats gathers momentum.
Attending on scene Some accidents attract a very large media presence on- scene. They will arrive with all the paraphernalia of mod-
ern electronic new-gathering. The owner’s spokesperson MorgueFile
may soon be participating in daily media briefings hosted oto: h by Coast Guard or Government Ministry. P There are certain issues which are fundamental for suc- cessful response on-scene. They include solidarity and security. “Solidarity” requires the maintenance of public positions which (so far as possible) are aligned with those of the shore authorities. This may not be easy, but disa- greements are best kept private, if possible. The media feasts on division. It is good practice to avoid criticising those parties you may be working with for many weeks to come. As for “security”, it is important to protect the crew and their families from media intrusion. Seafarers are often traumatised by their experiences. Bear in mind
27 THE SWEDISH CLUB TRITON 1-2012
Pollution | Cleanup operation Unsung Heroes of the MV Rena grounding
On 5 October 2011, in the early hours of the morning, the container ship MV Rena ran aground at full steam on the Astrolabe Reef on its approach to the Port of Tauranga on New Zealand’s east coast. John D. Owen Senior Claims Manager With 1,368 containers on board, 32 of Team Piraeus which contained hazardous materials, as well as 1,648 tonnes of heavy fuel oil, the stricken ship became the first major con- spearhead container and debris recovery. tainer and oil spill disaster New Zealand Passionate Kiwis, who love their coast, has faced – calling for the largest coastal soon made it quite clear to the authorities clean-up ever. that, like it or not, they were going to be a Following the grounding of the vessel part of the clean-up effort. and the initial release of about 300 tonnes Throughout the process the local tan- of fuel and cargo – the sight of oil on the gata whenua (“people of the land” - the local white sandy beaches was an unprec- indigenous people) have proven to be a real edented event in New Zealand. However, inspiration; their efforts have set a fantas- although some oil stains remain in the tic example of a motivated and cohesive landscape, much of the 300 tonnes of fuel community effort to restore the coastline spilt when the vessel started to break up – which is such an important part of their was cleaned up in a very short time by a heritage and culture. Iwi (“peoples” - social massive voluntary effort from the people units of Maori) have worked hand in hand of Tauranga and others around the Bay of with the Club’s appointed contractors The owners of the Plenty. throughout the response, putting in a huge voluntary effort collecting debris along the Rena and the Club Initial Response coast – with company staff assisting in re- wish to recognise and pay ITOPF (The International Tanker Own- covery, and with the labour teams focused ers Pollution Federation) were amongst the on the hardest hit areas. tribute to the huge effort of first experts on the scene, and with their worldwide experience in dealing with oil Motiti Island the people of New Zealand spills, provided invaluable guidance on Motiti Island lying closest to the Astrolabe and their response in the appropriate way to remove and clean reef sits only seven kilometres south of the the contaminated shoreline. Different stricken Rena. As such a great deal of the collectively helping techniques are required and guidance was oil and debris came ashore here. Residents provided on what was most appropriate for had been faced with an enormous and clean the beaches the circumstances of this case. daunting clean-up task as tonnes of con- An incident command centre (ICC) tainer debris soaked in oil had coated the was set up in a disused supermarket, with shores of their precious island. Braemar knowledge, crucial in navigating the cliffs professional salvors being appointed and and Unimar have been working closely and bays and assisting in the approach to experts flying in from all over the world. with the community around the rocky culturally sensitive areas. Collectively, the Based upon not dis-similar events in the and inaccessible coastline, reaching areas local community at Motiti and the vari- South of England following the grounding where containers and debris were wedged ous contractors and voluntary teams, who of the MSC Napoli, this included the spe- between large boulders and jammed into all received appropriate health and safety cialised Braemar/Unimar team appointed rocky inlets. Working with the commu- guidance have, with the use of helicop- by the owners and The Swedish Club to nity provided a wealth of first-hand local ters and specialised beach craft, collected
28 THE SWEDISH CLUB TRITON 1-2012
Pollution | Cleanup operation P h oto: Maritime New Zealand
Volunteers cleaning Papamoa beach in the 100th volunteer cleanup operation held since Rena gounded on Astrolabe Reef.
hundreds of tonnes of cargo and container wood debris and thousands of food packets. of the community and the invaluable assis- debris. The owners of the Rena and The Swedish tance with all of the shoreline recovery this Club encouraged Braemar to work closely would have taken longer with more wildlife January 2012 with the landowners and local iwi to for- exposed to the oil. From the tip of the Co- Seven metre swells battered the MV Rena mulate an innovative operational plan. It romandel Peninsula, to the southeast, down on the night of 7 January. By the morn- involved employing iwi labour to assist past the islands of Matakana and Motiti, ing of the 8th, the Rena had broken in two, in the most labour-intensive areas of the and along the coast line around Cape Runa- and while the bow section remained firmly shoreline recovery and with the help of ma- way towards the city of Gisborne. Tangata grounded on the reef, the split caused the chinery ashore, barges and helicopters, they Whenua and community members have left two sections to slew away from each other began New Zealand’s biggest ever shoreline a strong and lasting impression on everyone and settle lower in the water. This triggered recovery effort focused on one single beach. who has worked closely with the Rena re- the release of debris and oil sheen into the More than 850 tonnes of debris and 12 con- covery. sea. The easterly winds and currents pushed tainers have been recovered from the beach the contents of several hundred additional line with minimal environmental and wild- Our Thanks containers and debris as wide as the length life impact (the island is home to endan- The owners of the Rena and the Club wish of football fields, trailing north towards gered New Zealand dotterel) on Matakana to recognise and pay tribute to the huge the beautiful unspoilt beaches of Matakana Island’s beautiful and unspoilt character. effort of the people of New Zealand and Island and Waihi Beach on the mainland. In addition to the main salvage opera- their response in collectively helping clean By the morning of the 9th, Tangata When- tion, the significant cost of the operations the beaches following the initial events of ua on Matakana Island had swarmed onto coordinated by Braemar and their sub- 5 October 2011, and then subsequently the the beach, picking up milk powder packets contractors have been met by The Swedish storm of 8 and 9 January when the stern spewing out of shattered containers, loose Club, but without the huge volunteer effort section sank. Thank you all.
29 THE SSWEDISHWEDISH CLUB TRTRITONITON 1-2012
Club Information | Notice Board
ed. The implementing regulation, Council Regulation 267/2012, New Average Adjuster in Sweden was issued just before this article was printed. The material provi- The Swedish government has appointed sions of the Regulation substantially reflect the corresponding Magnus Widebeck, as Sweden’s new Aver- provisions in the Decision. As a result, members are required to age Adjuster. Magnus Widebeck is currently note in particular that there is no P&I cover available for the trans- Chief Judge at Nyköping District Court. Phd portation of Iranian petroleum products after 1 July and Iranian Candidate Paula Bäckdén at the University petrochemical products after 1 May. Detailed and updated infor- of Gothenburg, Department of Law, has been mation about the Iranian sanctions can be found on the Club’s appointed deputy Average Adjuster. Mag- website. nus Widebeck is taking over from Professor Svante O. Johansson who held the position Iran sanctions update – USA of Average Adjuster from 1998 to 2011. Svante O Johansson was On 21 November 2011, the USA expanded its Iranian sanc- appointed a Justice of the Supreme Court on 30 June 2011 by the tions by way of Executive Order 13590 in particular lowering the Swedish government. dollar thresholds for prohibited activities such as transportation and insurance of Iranian refined petroleum products. Addition- New General Correspondents for the ally, on 31 December, the National Defence Authorisation Act for French Atlantic and Channel Coasts fiscal year 2012 was issued, which in essence prohibits non-USA We have now completed our annual review of the List of Cor- financial institutions to do business with Iranian financial institu- respondents and the updated list is available online. You may have tions. Further sanctions are expected; inter alia, a limit of 180 days noted there is one significant change regarding correspondents for vessels that have called into an Iranian port before calling at a along the French Atlantic and Channel coasts. As from 20 Febru- USA port. Detailed and updated information about the Iranian ary 2012, correspondents for each single port aren’t listed. Instead, sanctions, as well as other sanction regimes, can be found on the we have listed McLeans (Paris) as our sole correspondent for the Club’s website. area. They will respond for both H&M and P&I matters. We be- lieve it is advantageous for the Club, our members and masters of SCOL – The Swedish Club On Line insured ships to have one single correspondent to contact in case Since the launch of our new SCOL extranet site in July assistance is required. Also, in line with the common aim of all In- 2011, the number of SCOL users has constantly increased, and we ternational Group clubs in supporting a number of correspondents have received a lot of – mainly positive - feedback from users. in relation to work available, and to encourage investment in train- Our ambition with the new extranet is to improve user-friend- ing and succession planning of those listed, we strongly believe this liness, enable personal user settings and enhance the documenta- is a step in the right direction. We look forward to many years of tion platform, all of which we take great pride in having achieved. good cooperation with McLeans’staff. But as with all systems, there is always room for improvement. We are keen to receive feedback from users on how to improve even Iran sanctions update – EU more, which will be used in the development work. Examples of On 23 January 2012, the EU issued enhanced sanctions such suggestions, include a future release that will include multi- against Iran by way of Council Regulations 54/2012 and 56/2012. downloads of insurance documents, together with enhanced re- Notably, the Central Bank of Iran, Bank Tejerat and Tidewater port functionality, enabling the user to make tailor-made reports Middle East Co are all added as designated persons generally pro- on insurance, claims and records data. In the recent P&I renewal, hibiting EU individuals and entities to engage in financial transac- SCOL has been put to the test as the main channel for providing tions with these parties. Since Tidewater operates a number of Ira- insurance certificates and other insurance documentation to mem- nian ports this has particular significance to the shipping industry. bers and insurance brokers, which has worked out very well. When In addition to the regulations set out above, Council Decision new documents are posted on the insurances you are involved in, 2012/35/CFSP was adopted. This prohibits the import, purchase you will receive a notification of this by email. Lately, we have or transport of Iranian crude oil, petroleum and petrochemical however received a number of questions about how to limit these products as well as the provision of financial assistance, insurance notifications to areas of interest only, and would therefore like and reinsurance in relation to such products. These provisions are to take the opportunity of informing all users that these settings stated to be without prejudice to the execution (until 1 July 2012 are available under “My Settings” at the top of the page. Choose for crude oil and petroleum products and 1 May 2012 for petro- “Insurance” (directly below your username at the top of the page). chemical products) of certain contracts concluded before 23 Janu- Choices under the tab “Notification rules” will enable you to set ary 2012. The Council Decision also provides for the sale, supply the areas of interest you want to be notified about. or transfer of key equipment and technology for the petrochemical industry in Iran (or Iranian-owned enterprises engaged in that Annual General Meeting 2012 industry outside Iran) to be prohibited. Council Decisions are only immediately effective against the The Swedish Club's Annual General Meeting 2012 will governments of Member States. In order to have legal effect on be held on 14 June at 2 p.m. at the Elite Park Avenue Hotel in companies and individuals, an implementation regulation is need- Gothenburg.
30 THE SWEDISH CLUB TRITON 1-2012
The Swedish Club Academy | MRM Rolling out MRM amongst the Greek membership The Swedish Club has run a training their training activities (some operate their centre in Piraeus, Greece, since the 1980s own in-house training centres), we have de- for the use and benefit of the Greek ship- cided to promote direct access to the MRM ping community. The courses have been training material through an MRM licence Martin Hernqvist really appreciated and MRM has been one agreement among our Greek membership. Managing Director of the courses on offer. Many of our Greek In February this year we met a number of The Swedish Club Academy AB members - well ahead of any mandatory re- our Greek members to discuss this opportu- quirements - have taken part in the MRM nity and the message was well received. The courses, but the demand for MRM courses MRM training programme can not only be As a result of the February in Greece has been replaced by demand for used to increase safety and efficiency but also meetings, the Club will organise these courses in other locations as well, such to integrate the non-Greek officers and crew a training event in Greece for new as the Philippines and the Ukraine. With an into the company’s culture and make them MRM Workshop Leaders on 29-30 increasing number of Greek shipping com- feel part of the “family”. The strong family May. Greek members interested panies employing foreign officers and crew, feeling of many Greek shipowners in the in an MRM licence should get in and with an increasing number of compa- past is believed to have been an important touch with Martin Hernqvist at The nies who wish to get closer to their crew, factor not only for loyalty and retention but Swedish Club Academy. for example by being in greater control of also for good incident records. MRM discussion group on We welcomE all people interested in MRM issues to join the have done the course. All means of ensuring that the MRM mes- MRM discussion group on the internet site “LinkedIn”. LinkedIn sages are implemented and not forgotten after training should be is the world’s largest professional network with over 120 million used as far as possible, and this may be one such means. members. Membership is free of charge. We hope that this group Two quick steps to join: First, set up your own LinkedIn account will be useful for discussing MRM issues both for those already at www.linkedin.com. Then search for the group “Maritime Re- using MRM and those who are new to the concept. The group can source Management (MRM)” and click Join Group. also help keeping MRM “alive” for the companies and people who
Martin, I fully endorse your view that high profile events such reticence to contribute to the case study, we have found the as Costa Concordia should be reviewed from an MRM perspec- resulting group discussions to be excellent. We have put over tive so that lessons can be learned and such a terrible incident 225 delegates through our MRM training in the last two years is never repeated. In P&O Ferries we have found one of the and all delegates have said how beneficial the training was many benefits of MRM training is that it creates an open en- and importantly it gives them “tools within their toolbox” to vironment which encourages all the delegates to speak up as use when they are back onboard their respective ships. Not they review case studies. In our company we have used inci- one delegate has raised any concerns or said the MRM dents that delegates are familiar with, such as the BRAER, but training was not beneficial. also company related incidents. This is akin to “Open Heart Comment made by John Garner, Fleet Director at P&O Ferries, Surgery” for some delegates but once they get over their on 21 January 2012 in the LinkedIn MRM discussion group
New MRM training providers Since the latest issuE of Fremantle Maritime Simulation Centre, Fremantle, Australia The Swedish Club Triton, we have Wärtsilä Land & Sea Academy, Busan, South Korea welcomed the following training Maritime Education and Training Services Pte Ltd, Singapore establishments to the MRM Hanseatic Training Institute, Manila, Philippines network: Maritime State University, Vladivostok, Russia ABB Marine Academy, Helsinki, Finland
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The Swedish Club Academy | MRM P h oto: The Swedish Club Swedish The
16-17 November 2011 Participants at the MRM Workshop Leader meeting held on 16- 17 November 2011 at Southfield Agencies, Manila, Philippines. The following MRM training Out and About providers were represented at the meeting: Anglo-Eastern Maritime Training Centre, CMA Ships, IDESS Maritime Centre, Marlow Navigation, PHILCAMSAT, Southfield Maritime Train- with MRM ing Foundation and Wallem Maritime Training Centre Philippines. P h oto: The Swedish Club Swedish The
21-22 November 2011 Participants at the MRM Workshop Leader meeting held on 21-22 November 2011 at Sirius Training & Education Institute (STEi) in Singapore. The fol- lowing training providers were represented at the meeting: Anglo-Eastern Ship Manage- ment, International Bunker Industry Association, Kuwait Oil Tanker Company S.A.K, Lanka Academy of Technological Studies, Malaysian Maritime Academy, Precious Shipping, Sin- gapore (Nan Tong) International Maritime Institute, Sirius Training & Education Institute and Wavelink Maritime Institute.
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The Swedish Club Academy | MRM The Swedish Club Academy | MRM P h oto: The Swedish Club Swedish The
25 November 2011 Employees of the first MRM training provider in South Korea, Wärtsilä Land & Sea Academy in Busan, received MRM Workshop Leader training on 25 November 2011. P h oto: The Swedish Club Swedish The
28 November 2011 On 28 November 2011, a three-hour "Introduction to MRM" seminar was held by Martin Hernqvist of The Swedish Club Academy at the Maritime State University named after admiral G.I. Nevelskoi in Vladivostok, Russia. The majority of the participants were University lecturers and people representing the local shipping community. STCW Manila amendments If we are correct, the Maritime Resource Management The areas concerned for the STCW Convention are: course is the first training programme to receive national accept- Reg. A-II/1 for Bridge Resource Management ance in accordance with the STCW Manila amendments. Since Reg. A-III/1 for Engine-room Resource Management the STCW requirements are of major importance to seafarers, Reg. A-II/2 and A-III/2 for Use Leadership and Managerial the shipping companies and training providers, the certification Skills received by the Maritime Department of the Swedish Transport Reg. A-II/1, A-III/1 and A-III/6 for Application of Leadership Agency in February 2012 made us both proud and happy. and Teamworking Skills. MRM theme for social events during 2012 With a number of high-profile incidents taking place recently, Maritime Resources Management (MRM) will be held at the fol- the interest in Maritime Resource Management (MRM) issues has lowing dates and locations: increased. To meet demand and give members and Club represent- 28 March – Breakfast meeting in Oslo atives an opportunity to discuss these preventative measures, The 18 April – Club Evening in Bremen Swedish Club decided to make MRM the theme for a number of 19 April – Club Evening in Hamburg European Club events taking place in 2012. 25 April – Lunch seminar in Piraeus The presentation ofThe Impact of Attitudes and Cultures on Ma- 26 April – Lunch seminar in Istanbul rine Accidents - How to manage risk through implementation of 15 May – Seminar in Copenhagen
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Club Information | Staff presentations
Johan Kahlmeter From summer trainee to Marine
Carola Weidenholm Corporate Claims Manager Communications goals, coach co-workers and give them the During his time at sea, his interest for A three-month internship can turn environment to perform as well as pos- the legal and insurance aspects of shipping out to be a winning ticket to an in- sible, Johan explains. It is on me to keep developed, so he decided to return to uni- teresting career with opportunities the team together and go through the rou- versity, this time to study for a Master of to work abroad and moving forward tines to see how they can be improved and Science in Shipping & Logistics at Chalm- to a managerial position. At least if updated to provide a better service to our ers in Gothenburg. When he finished in you have the right education, com- members, he adds.” 2005 he didn’t think it was enough and petence and ambitions. That is a car- followed up with a year in Oslo to study bon copy of Johan Kahlmeter, our Practice in New York for an L.LM degree in Maritime Law. It new Head of Marine Claims in Team When Johan turned 20 he moved to Nor- turned out to be a good decision, as he here Gothenburg. way to study nautical science at Vestfold met his girlfriend, Tonje. Maritime University College. Directly Fresh out of law school he was offered to Despite his fairly young age, Johan already thereafter he went to sea for a shorter time take on a traineeship at the law firm De- has a wide experience from both time at to work as a deck cadet on tankers and Ro- Orchis, Wiener & Partners in New York, sea and handling Marine and P&I claims Ro ships. so in January 2007 he went off to the Big in different parts of the world. But this is “It came natural for me to be interested Apple. the first time he takes on a managerial po- in navigation, shipping and the sea and to “When I had been there for a couple of sition which demands for a somewhat dif- choose an occupation in the area, as my months, I was contacted by our HR di- ferent approach. family and I have been sailing for as long as rector, Helena Wallerius Dahlsten. She “I will handle claims as before but now I can remember and we spent a great deal my role is also to present the company of the Summers on our boat, says Johan.” 9 continues on page 36
34 P THE SWEDISH CLUB TRITON 1-2012 h oto: The Swedish Club Swedish The
Maria Berndtsson Our new P&I Claims Manager In the Summer of 2011 The Swed- and have the opportunity to carry through esting to get the experience of living in ish Club decided to transform the ideas that have grown during my years as a another country; even though Switzerland organisation at the head office in claims executive,” she continues. is pretty similar to Sweden, there are still Gothenburg. Two teams became many differences, says Maria” one: “Team Gothenburg” and Curious of the insurance business In 1997 she, her husband and two sons within that division a new depart- When Maria started her studies to become moved back to Sweden. Maria soon started ment called P&I Claims was formed. a Master of Law at Lund University in as a Claims Executive at Gard, where we The post of manager went to Maria 1980, her aim was to work in finance or found her and succeeded in getting her Berndtsson, who has extensive ex- insurance, or to become a judge. For added over to our team in 2009. perience of claims handling from experience, she went on directly to district- “As I had been at Gard Sweden for more both Stena Rederi, Gard and since court practice for two and a half years. At than 12 years, I felt that the offer was in- three years back The Swedish Club. that time her interest in the sea and ship- teresting and it was time to move on for ping together with a curiosity about the new experiences and a boost forward in my “I found the job too interesting not to ap- insurance industry had taken over, so she career, tells Maria. It is an opportunity to ply when I had the opportunity! I am in a decided to take up an offer from the insur- develop your skills when you move to an- position in life where I have gained a lot of ance department at Stena Rederi. There she other job; even if you have the same tasks, experience, worked many different claims stayed for four years until it was time to every company functions differently and cases and my kids are grown up, so I have move abroad. there are new people to learn from.” both the time and desire to take on some- “My husband Anders was offered a job thing new, tells Maria. It is also an interest- in Switzerland so we moved to the Zürich ing challenge to develop a P&I department area and stayed for five years. It was inter- 9 continues on page 36
35 THE SWEDISH CLUB TRITON 1-2012
Club Information | Staff presentations
9 continued from page 34 9 continuesdfrom page 35 wanted to meet me in New York A skilled team for an interview – for a position Two years later it was time at the head office – during the to take on the newly created Clubs board meeting in the city, position as Head of Claims he explains.” – P&I, but she is also still working as a Senior Claims Two years in Hong Kong Executive. He came back in June 2007 for “I think my role is a little a permanent position as Claims Executive at the head office in different than many other managers, as I work my own P&I Gothenburg. In October two years later it was time for yet another cases in parallel. For me it is an advantage as I keep in close move: Johan took over Tony Schröder’s position at our Hong Kong contact with developments in the claims handling business office, when he decided to move back to Gothenburg for the job as and by that with the reality for the co-workers, she explains. Area Manager. Being manager is not only about being the one who makes “I have been an exchange student in Perth, Australia, studied in final decisions and manages things, according to Maria. Oslo and was a trainee in New York, so for me it felt like a matter “Naturally, the role includes implementing the manage- of course to take the opportunity to work in Hong Kong. The tim- ment’s strategy in a clear way, so we can all work towards the ing was also pretty good, as my partner just finished her law stud- same goal. But I think it is just as important to be supportive ies and got a job at Mannheimer Swartling in Hong Kong, Johan and accessible for your co-workers and be able to build trust tells.” within the group. This is an organisation with very skilled spe- In 2011 the team organisation in Gothenburg was transformed cialists, so my role as manager is not to always “know it all”, and a new position emerged – Head of Claims – Marine, Claims but to trust the co-workers, be a discussion partner and con- Manager. tribute with my experience in the area. “Tonje and I got on very well in Hong Kong, both with the culture, hustle and bustle, high pace and our jobs, but when the Maria in brief position as Head of Marine Claims came up I realised it was an Name: Maria Berndtsson opportunity that would not appear very often, so it became time to Title: Head of Claims – P&I, Senior Claims Manager return home, he explains.” Age: 52 Johan in brief Family: married to Anders with two sons, Wilhelm 20 and Fredrik Name: Johan Kahlmeter 18 Title: Head of Marine Claims and Claims Manager Team Gothenburg Background: 1980-85 she studied at Lund University to become a Master of Law and then went on to district-court practice for Age: 32 two and a half years. In 1988 her interest in the insurance sector Family: partner Tonje who he met studying in Oslo and maritime life took her to Stena’s insurance department, be- fore she moved to Switzerland for five years. Back in Sweden in Background: Johan opened with a Bachelor of Science (BSc) degree 1997 she started at Gard as a Claims Executive and stayed until in Nautical Science at Vestfold Maritime University College, 2000–2003. she moved to The Swedish Club almost three years ago. He almost immediately moved on to study for a Master of Science (MSc) in Shipping & Logistics at Chalmers University of Technology in Spare time: Marias major interest in sports is evident in many Gothenburg, 2003–2005 and complementary studies at Oslo Univer- ways. In the winter she enjoys downhill as well as cross-country sity to obtain a L.LM degree in Maritime Law. He also spent some time skiing and she has even done the 30 km women’s Vasa ski race at sea on tankers and Ro-Ro-ships as well as traineeships at both The three times! In summertime she and her family like to sail, and in Swedish Club in Gothenburg and the law firm DeOrchis, Wiener & Part- 2011 they followed the coast of Norway for an unforgettable ex- ners in New York. Before he took on his new position as Head of Claims perience of fjords, cliffs and midnight sun. Maria also takes time to – Marine and Claims Manager, he spent two years at our Hong Kong run and in May she will run the Gothenburg half marathon for the office as a Claims Executive. fourth time. Spare time: he and Tonje sails a lot in their own boat during the sum- Of current interest: our new Head of Claims – P&I, Senior Claims mer months. When there is time he also enjoys scuba diving. In winter Manager in Team Gothenburg they often go to Tonje’s family cabin in the Norwegian mountains for At The Swedish Club since: September 2009 skiing. This summer he hopes to find time to sail in both Denmark, Sweden and Norway for the entire holiday. Of current interest: our new Head of Marine Claims and Claims Man- ager in Team Gothenburg At The Swedish Club since: June 2007
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Club information | News from Piraeus P h oto: iStockphoto
MRM has a lot to offer to the safety of shipping
Yet another Greek crisis was solved a few weeks ago when the coalition government decided to endorse the ECB/ troika/EMU demands at the 11th hour. Actually, the deadline for the acceptance was moved back on a daily basis for more than a week. The EMU countries have now decided that they Tord Nilsson did not trust the Greek government to implement all the aus- General Manager/Area Manager terity measures that have been agreed and therefore will ask Team Piraeus for tougher demands on delivery on the promises from the Greeks. At the same time when politicians, banks and lenders are likely to continue to be cornerstones of the Greek economy are trying to solve current financial problems people in Greece going forward, provided the interests of these segments of the are starting to feel the pain and suffer as a result of increased economy are dealt with properly. income taxes, higher consumption taxes, higher real estate On The Swedish Club front in Greece we have seen a big taxes and lower wages for public workers and people work- increase in the interest for our MRM program, both from our ing for troubled businesses. Shops are closing down, the grid- members and non-members. Two things are new. Firstly our locked streets from three years ago are now less crowded and MRM program has been approved by the Swedish Maritime an increasing number of families have difficulties providing for Authority as complying with the Manila Annex to the STCW themselves. regulations. Secondly we are offering our MRM program in The frustration of the people against Greek politicians and another suit more customized to owners own in-house training against the people offering the restructuring of the Greek programs and at a cost which is difficult to beat. We hope to loans was seen recently when massive demonstrations resulted see an increasing number of people joining as we really feel that in buildings being set on fire and clashes with riot police in our MRM program has a lot to offer with regards to the safety central Athens. And although the vandalism is, as always, the of shipping. work of a small minority of people who believe it is their God- We have just concluded the P&I renewal and we are happy given right to destroy things, people in Greece seems to have to see new accounts coming in and the present one’s staying. had enough with the way the country is governed and what Times are tough for our members and we have had a bit of a they have been offered as a solution. Investments are needed, rocky year as well, with a higher than expected frequency of restructuring of the public sector needs to be done and there large claims (we were spared over the last three years) and with needs to be a plan for how Greece will develop as an independ- financial returns below expectations. Shipping fortunes seem ent, debt-free and forward looking country. Too much energy to be in dire straits for the foreseeable future but we hope to is being wasted looking back and not enough for the solutions bounce back pretty quickly as our business model is set-up to of the future. Greece could be the Green Energy dynamo of cater for years like 2011 without much affect on long-term de- Europe, but for that, laws need to be changed and investments velopments. in infrastructure are on the wish list. Shipping and tourism
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Club information | News from Asia
The outcome of this renewal came as a vote of confidence P&I renewal is never easy. This one for 2012/13 is par- The freight markets are not expected to improve much dur- ticularly difficult. The members of the Club, whether owners ing the year. A large number of newbuilding tonnage will be or operators, are under tremendous pressure to reduce costs as delivered, and the freight markets will continue to be under freight markets, whether dry, wet or container trade, have been pressure. Recently BDI (Baltic Dry Index) hit a 26-year low at at very low levels for a long time and probably will continue to 647 points. For many shipowners freight income is not enough be for a long time to come. to pay operating costs. On the other hand P&I clubs need to increase premium Crew costs including compensation packages, bunkers, port levels in order to keep up higher claims payments due to ever- charges etc are increasing. Many newbuilding deliveries will increasing owners’ liabilities and claims inflation. Pressure on need to be manned, further exposing the problem of the short- both sides tends to put pressure on partnership relationships. age of quality crew. Financial pressure will affect ships’ mainte- Nonetheless, the Club managed to achieve its target on the nance and the ships’ condition in general. risks renewed thanks to the strong support from our loyal All these factors in combination may lead to more claims members. After all, the Club belongs to the members as a and less premium income. As our members face difficulties whole. particularly in claims, disputes or casualty situations, they will The charterer’s liability insurance class renewal was relatively need the Club’s support and assistance even more. We will con- uneventful, as was the FD&D class. tinue to develop our competence. Business volumes fell slightly, while premium rates rose. The outcome of this renewal came as a vote of confidence. We not only managed to increase premiums, we also added a large number of committed new tonnage. As members face lots of difficulties in 2012, the Club will also face challenges including managing sustainable growth Ruizong Wang whilst maintaining good services to the members by upholding Managing Director/Area Manager adequate resources. Team Asia
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Club Information | News from Oslo P h oto: KS Drilling KS
Reflections on our first 12 months of operation The KS Endeavour on a Heavy Lift Vessel before the fire. During our first 12 months of operation we gained started to increase in particular on larger accounts with good some 30 accounts. The vast majority of these are “local” ac- loss records. counts produced to us by Norwegian-based brokers, but there We also saw increased average deductible levels in 2011, have also been a few International accounts provided by Lon- which will hopefully become more permanent allowing insur- don brokers. At the time of writing, we have written more than ers to build up stronger reserves to pay for future larger claims. 30 accounts comprising some 250 units. We are very happy This year will be a year of consolidating existing accounts for with our achievements so far which are also in line with our The Swedish Club Energy Team, but we also expect to broaden Business Plan. The first year’s underwriting results were also our business with a few more high quality International Ac- positive and satisfactory. counts. So overall we can safely say that things are looking 2012 started with the total loss of the rig “KS Endeavour”, positive. where a blow-out and fire occurred on 16 January and melted the whole rig within a few days. The Hull & Machinery and Hull Interest Insurances were placed in March 2011 and led- off by the Norwegian Hull Club. We wrote a fairly modest “following” line so exposure was relatively limited. 2011 was not a great year for the whole Energy insurance Verner Rydning sector (on and offshore) and lead insurers are now looking Senior Manager for increases. Competition between various markets has also Team Oslo Energy
39 THE SWEDISH CLUB TRITON 1-2012 Club Information | Out and About P h oto: Varbergs Fortress Anna Jolfors
It is time to visit our last fortress in the annual report. We have already looked into Carlstens Fortress in spring of 2008, Älvsborgs Fortress dressed in heavy snow 2009, and Bohus Fortress in sparkling autumn colours 2010; for 2011 we look closer into Varbergs Fortress when the summer was at its fairest. Stand- ing on a cliff, this fortification has a – a history about kings, wars, great view out over the North Sea and was the perfect place to control the coast lines from less longed-for prisoners and a monster visitors from other countries armed forces.
It all started in 1287, when the Danish count Jacob Nielsen began to build the fortress as protection after he had been ac- cused of killing their king Erik Klipping a year earlier. In 1305 he decided to pass it on to Norway, who augmented it during rock, which occurred in 1565 during the tory from the Halland county and, last the coming centuries until the area, after Nordic seven-year war. but not least, the Bocksten’s Man. He is an the Treaty of Brömsebro, in 1645 became From the Middle Ages right up to 1931 extremely well preserved corpse of a man Swedish. Around 1,000 farm labourers the fortress also served as a prison, and from The Middle Ages – even his real hair worked every day during 30 years to con- both the medieval dungeon as well as the and clothes from the time remains! The struct what, at the time, were classed as the individual cells have been preserved. Today discovery is the first one found with poles most modern defenses. During the 18th the visitors have a more pleasant stay (and pegged through the body. He had been century the fortress was maintained by the can leave whenever they please!). murdered and the poles should prevent Swedish army, and when they no longer The views from the fortress out over the him from haunting the village. needed the building at the start of the 19th Cattegat is beautiful and in summertime The history tells that the moat of the for- century, there were plans to blow the whole you can see the sailing boats come and go tress is to be inhabited by a small lake mon- thing up. from the marina near by. The walk along ster. In August 2006, a couple of persons the ramparts also offers a magnificent claimed to have seen the monster – de- Prison and war panorama of the Varberg town and the scribed as brown, furless and with a 40 cm From the mountain where Jacob built his coast, and inside the walls you will find a long tail – emerge from the dark water and castle, there is not much handed down to bed & breakfast, the county museum, a devour a duck. Unfortunately, we didn’t posterity but a lot has been done since his blacksmith’s workshop, a café and restau- have that luck when we visited the fortress time. The whole rock was covered with soil rants. The ceremonial areas and premises with our camera! and four bastions were built – one in each are popular for a variety of festivities, for The Annual Report will be printed and corner and one more in the middle of the example balls and weddings. During the ready in the beginning of May but will be wall, facing the sea. The bastions have dif- summer months both residents of Varberg published at our website around mid-April. ferent names. Clockwise you are first met and tourists gather in and around the for- by “The white monk” in northeast, then tress for just a stroll or a picnic at sunset. “The grey monk” in southeast, “The red monk” in southwest, “The dyke bastion” in A poled man and a monster west and “The forge bastion” in northwest. The County Museum of Varberg is located The fortification was reinforced in south in the oldest parts of the castle, and has Carola Weidenholm and southwest as the enemy pretty easily exhibitions about the fortress’ history, art Corporate could place canons at the facing Rantzau from the ”Varberg School”, cultural his- Communications
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Club information | Out and About
From left: Jack Nilsen (Willis AS), Hogne Nesse (Höegh Autoliners AS ) and Tony Schröder (The Swedish Club). Breakfast Meeting in Oslo 28 March 2012 The Club hosted its established annual breakfast seminar at Ship- a presentation by Martin Hernqvist, The Swedish Club Academy, pingklubben in Oslo on 28 March. About 30 guests from the Nor- on this seminar’s main topic: “The Impact of Attitudes and Cultures wegian shipping and energy community enjoyed a breakfast buffet on Marine Accidents. How to manage risk through implementation before being briefed by Henric Gard on the Club’s current state of of Maritime Resources Management (MRM).” This was the fourth affairs and by Verner Rydning on the Club’s inaugural year of writ- consecutive breakfast seminar in Oslo and with such a great turn- ing energy business (a very successful start!). This was followed by out, we will undoubtedly return next year. Cocktails and golf in Singapore 29-30 March 2012 Following the Club’s Board Meeting in Singapore on 29 From left: Lawrence Lau (Cosco Hong Kong Insurance Brokers), From left: The Swedish Ambassador to Singapore March, a cocktail reception Ruizong Wang (The Swedish Club Hong Kong) and James Wang Ingemar Dolfe together with Jan Rydenfelt (The was held at the Singapore Shuang (GC Tankers Pte Ltd). Swedish Club). Cricket Club for board members and business associates. On 30 March, The Swedish Club Singapore Grand Classic 2012 golf competition was held at the Tanah Merah Country Club.
From left: Lars Rhodin (The Swedish Club) together with Zhang Lansui (Da Sin Shipping Pte Ltd) exchanging From left: Lennart Simonsson (Chairman of The Swedish Club their experiences from the golf Board), Ng Siong Tee (Kontiki Shipping), his wife Roselyn and competition. Jun Yanagawa (Diamond Star Shipping Pte Ltd).
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Club information | Out and About P h otoS:
Christmas Dinner in Piraeus Club Swedish The 8 December 2011 The Club invited members and business associates to the tra- ditional Christmas Dinner at the Yacht Club in Piraeus on 8 December last year. The dinner, like many of the previous ones, was well attended and the guests were entertained (as in previous years as well) by the “Lucia” procession consisting of the Scandinavian Church Choir and parts of the Club’s man- agement team and staff.
The Swedish Club management and male staff from the Piraeus Among the guests were Stavroula Serbesi, Demetri Dragazis (to the left), office entertained guests with the traditional Swedish drinking Arcadia Shipmanagement, Dimitrios Latsco (London) and member song “Helan går”. Antonatos, Vasco Shipmanagement and of The Swedish Club Board was Dimitris Dalacouras, Conbulk Shipping. welcomed by Managing Director Lars Rhodin. P h otoS: TSC
Managing Director Lars Rhodin greeting all guests welcome to the traditional Christmas Dinner on Donsö.
From left: Dick Höglund (Tärntank Rederi), Sven-Olof Kristensson (Tarn Chartering), his wife Marianne and Runa-Britt Höglund. Traditional Christmas Dinner on Donsö 14 December 2011 From left: Christian The Club gathered members in Gothenburg’s southern archipelago Nilsson (Rederi AB for a traditional Christmas dinner at the Isbolaget restaurant in Älvtank) and Daniel December last year. Backman (Sirius Rederi AB).
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Club information | Staff News / Club Quiz Staff News Head office Gothenburg
Daniel Brand, Claims Executive, FD&D, resigned from the Club on 11 March 2012, after two and a half years of service. We wish him all the best in his future career.
Caroline Stenman Dencker, Assistant Marine Claims Adjuster, joined Team Gothenburg on 5 December 2011. She has a BA in CLUB Political Science from San José State University in California and an LLM from the University in Gothenburg. She has also studied Quiz Maritime Law at Oslo University.
Fritiof Granberg, Marine Claims Adjuster, retired from the Club When on 1 December 2011, after nearly 34 years of dedicated service to the did the Club start to underwrite Club and its members. We wish him all the best for the future and a P&I risks? happy retirement. 1 1872 X 1900 2 1910
Malin Högberg, Assistant Claims Executive, joined Team What Gothenburg on a one-year traineeship from 1 February 2012. She is the given name of Mr Plim- has studied Maritime Law at Oslo University and holds a Deck soll? Officer Class VII Certificate. 1 Samuel X Edward 2 Line Magnus Johansson, Senior Claims Executive, Marine, joined Team Gothenburg on 9 January 2012. He is an engineer with an MSc in Mechanical Engineering from Chalmers University, Gothenburg Two ships and holds an MBA from the Gothenburg School of Economics and insured by the Club got trapped Commercial law. He previously worked for Götaverken Cityvarvet in the Suez canal in 1967 re- AB. maining in the Great Bitter Lake for eight years. What are the name of the ships? Frida Wåhlin, Assistant Claims Executive, joined Team Gothenburg 1 Kraka and Nanny on a one-year traineeship from 23 January 2012. She graduated X Nippon and Killara from Chalmers Technical University with a BSc in Shipping and 2 Kolsnaren and Hallaren Logistics. Mail your answer to [email protected]. PIRAEUS The first right answer will be awarded a Club give-away. Tejpal Dhesi, FD&D Manager, has resigned from the Club’s Piraeus office after more than 12 years of dedicated service to the Club and its members. We wish her all the best in her future career. Club Quiz 3-2011 Winner of Club Quiz in Triton No 3-2011 is John Samartzis of J.P. Samartzis Maritime Enterprises Manos Strongilos, Technical Manager Marine Claims, joined Company S.A. in Piraeus. The right answers to the the Club’s Piraeus office on 1 February 2012. He has a Master of questions are: Science in Marine Engineering from the University of Newcastle 1. 1,406 and previously worked as Marine Superintendent/Fleet Manager for 2 1982 several shipowners in Greece. 3. 1982
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Club calendAr For further upcoming events, please refer to www.swedishclub.com/Club Calendar
2012
18 April Club Evening Bremen 19 April Club Evening Hamburg 25 April Members' Luncheon Piraeus 26 April Members' Luncheon Istanbul 7-11 May Marine Insurance Course Gothenburg 12 May GöteborgsVarvet Half Marathon Gothenburg 15 May Lunch Seminar Copenhagen 13 June Board Meeting Gothenburg 14 June Annual General Meeting Gothenburg 4 October Board Meeting Athens 6 December Board Meeting London
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