North Sea innovation The U.S. Maritime Skuld Defence Services Transportation Security Act PAGE 4 PAGE 8 PAGE 25

beaconSKULD magazine NO 1 MAY 2003

Outbreak of Severe Acute Respiratory Syndrome (SARS) PAGE 20 EDITOR’S corner

Springtime in Oslo! Leaving the long winter behind. Successful renewals accomplished. Lighter days. Contents Have you noticed the change in Beacon’s layout? Somewhat lighter, friendlier, different, but still recognisable. Do you like it, or not? Please tell us! TheMEMBERS U.S. INMaritime FOCUS: Transportation Summer’s approaching and with it the high season for North Sea innovationurity Act 4 travelling. A nice place to visit is Haugesund on the southwest coast of Norway. I went there recently and The U.S. Maritime Transportation found the North Sea’s tanker specialists Knutsen OAS Shipping AS with their Managing Director Trygve Security Act 8 Seglem. Read all about it on page four. LOSS PREVENTION: Not all is looking bright in our world today. SARS is Weather Routing – reducing losses spreading, and with it the possibility of our members being affected. Lawyer Christopher Hall of our at sea and costly delays 12 Hong Kong office has brought us a timely article. LOSS PREVENTION: As always in our magazine, there are some legal topics for you to read. And on the loss prevention side: Million dollar beans 14 Weather routing services, the danger of entry into enclosed spaces and an article on the possible LOSS PREVENTION: adversities of soya bean carriage. Entry into enclosed spaces 18 Get the latest from our Finance department and some information on recent organisational changes within Skuld. The most important change being an enhanced focus on Defence services. After all, that is what we are here for; to protect and indemnify you, and if needed: To Defend You!

BEACON (SKULD MAGAZINE) ADDRESS ENJOY YOUR READING! is the official publication of P.O Box 1376 Vika Assuranceforeningen Skuld N-0114 Oslo, Norway (Gjensidig) Tel +47 22 00 22 00 Fax +47 22 42 42 22 Ingeborg Berge No. 1 May 2003

Issue 181 CONTENTS

PAGE 4 PAGE 8 PAGE 12 PAGE 20

Outbreak of Severe Acute Respiratory House-warming and New Year Syndrome (SARS) 20 28 Organisational changes in Skuld LEGAL NOTES: 29 Cargo claims – who is the carrier? 23 Personnel news 30 Setting new standards 24 Oslo syndicates 31 Skuld Defence Services 25 Contact Skuld 31 Skuld’s investment policy pays off 26 VIEWPOINT: Skuld meets its targets Skuld co-sponsors Heyerdahl Award 27 32

E-MAIL EDITOR IN CHIEF Entire contents © 2003, all rights FRONT PAGE [email protected] Ingeborg Berge reserved. Reproduction in whole or Living with the fear of SARS, in part, without written permission Hong Kong. Photo: Chris Hall VISIT OUR WEBSITE EDITORIAL STAFF from Skuld , is prohibited. Opinions www.skuld.com Lise Larson expressed by writers in Beacon are not necessarily those held by Skuld. LAYOUT Skuld assumes no responsibility Transmission AS for unsolicited material

REPRO AND PRINTING Gan Grafisk as

BEACON 3 MEMBERS IN FOCUS

North Sea innovation

Technical know-how and expertise connect with innovation at the gateway to the North Sea. Knutsen OAS Shipping AS in Haugesund, Norway keeps growing while operating its technically advanced fleet and continually looks out for innovative, technical solutions for serving major oil companies. - Yes, we are optimistic about the future, says Trygve Seglem.

By Ingeborg S. Berge, Skuld, in Haugesund, Norway

The charming town of Haugesund on the A large number of Knutsen’s experienced is only eight and a half years – an impressive west coast of Norway is the home of staff, crew and officers are from the record in the tanker business. Knutsen OAS Shipping AS. With an office Norwegian west coast. There is an onshore set right by the sea, modern maritime staff of 50 covering development projects -Our customers – the main oil and architecture and an equally modern, and and operation, and approximately 800 petrochemical companies – are few, growing, fleet, they are well equipped for people at sea. The majority of officers large, powerful and demanding, says the future. remain Norwegian, while crews are Trygve Seglem. -And, yes, we look at this mainly Norwegian or Filipino. Though a as positive. This gives us a challenge, The company was founded in 1896 and few vessels are now under British flag and allows us to continually improve our was, in the 1930s, the third largest and two new LNG carriers will have business. shipping group in Norway. Knutsen OAS Spanish flag, most vessels are still started off as a typical North Sea trader, registered in Norway. Newbuildings with long term contracts engaged in fishing activities and expanded with first class charterers into tanker business and liner trades. Technically advanced fleet The strategy drawn up in 1984 still holds After investments in the tanker business With the North Sea on its doorstep and water: ‘Newbuildings with long term at the beginning of the 1970s, the company the pipeline to the onshore gas terminal contracts with first class charterers’. ran into financial difficulties during the at Kårstø passing beneath the sea right tanker crisis at the end of the decade. outside its windows, it is only natural Some 20 vessels have been ordered over that Knutsen OAS entered into oil and the last 15 years. As a rule, a long term In 1984, there was time for a major gas related carriage. contract with the charterer is finalised restructuring of the company. The before the building of the vessel starts. Knutsen family sold out and the current The company currently operates a This also means that the design of the majority shareholders, Jens Ulltveit-Moe technically advanced and modern fleet of vessels, to a large extent, can be tailor- and Trygve Seglem took over. Seglem shuttle tankers, chemical/product tankers made according to specifications from came to play a leading role in the and, most recently, LNG tankers – an the charterer. successful rebuilding of the company, area where most growth is expected. The starting off its newbuilding strategy with fleet consists of 26 ships, with seven The majority of the vessels are on long two shuttle tankers delivered in 1987. newbuildings coming in 2003-2005. term contracts. However, four of the Although the oldest vessel was built in shuttle tankers operate on COA contracts 1987, the present average age of the fleet in the North Sea with spot voyages in

4 BEACON Knutsen has a total of eleven shuttle tankers. Picture shows the Ragnhild Knutsen loading crude oil from a North Sea buoy between. There is a pooling agreement When natural gas is cooled down to Gross revenue of the fleet operated by with JoTankers in Bergen, involving three minus 163°C before loading into LNG Knutsen OAS Shipping in 2002 was NOK vessels trading on the spot market. carriers, the degree of know-how and 1,400 mill., with an operating profit of competence needs to be all that much approximately NOK 800 mill. Shuttle tankers in the North Sea – higher with the carrier. chemical tankers world-wide Up to now the owners have not seen Shuttle tankers came into business along LNG carriage is a fairly new priority the need of being listed on the stock with the development of the ‘oil age’ in area for Knutsen OAS, but one where exchange. -On the contrary, says Seglem, the North Sea. These advanced tankers profitability and growth are expected. -seeing what happens to other companies were built for the purpose of loading crude oil directly from buoys in open sea. Presently there is a newbuilding Loading directly at the oil fields means programme for two large LNG tankers flexibility and the bypassing of pipelines (138,000 m3) to be delivered from Bilbao, FACT FILE and other infrastructure, hence cost Spain in 2004, and destined for long term KNUTSEN OAS SHIPPING AS efficiency. Weather conditions in the North contracts with Spanish energy companies. ■ Established 1896 Sea can be severe in the wintertime and In addition, there is an important pilot ■ Reorganised in 1984 with new the vessels are specifically designed to project on the west coast of Norway. owners Jens Ulltveit-Moe and withstand fierce North Sea storms. Naturgass Vest is opening its onshore Trygve Seglem production plant on Kollsnes in August ■ Fleet consists of 12 shuttle Starting from the base of its first two 2003 and has entered into a contract tankers (including one FSU), shuttle tankers in 1987, Knutsen OAS for a small LNG carrier (1,100 m3) for 12 chemical/product tankers and today has a total of 11 shuttle tankers, carriage of gas to local customers. one LNG tanker plus one FSU (Floating Storage Unit). ■ Newbuilding programme of two Two newbuildings will be delivered from Trygve Seglem drew up a rough example shuttle tankers, two product Korea in 2005. of the cost of LNG carriers: Chemical tankers and three LNG tankers tankers today sell at roughly USD 30-40 Innovation programme within The company also entered the chemical mill., a shuttle tanker for operation in the PNG and VOC and product tanker business with its rough North Sea is priced at USD 70-100 ■ Head office in Haugesund, first chemical tanker in 1990. The fleet now mill., while a large LNG tanker costs in Norway includes 12 such tankers, trading world-wide. the region of USD 170 mill. ■ Staff of 50 onshore and approx- imately 800 at sea (majority of LNG – a club for the few No problem financially officers are Norwegian, crews LNG (Liquid Natural Gas) is a club for the According to Seglem, Knutsen OAS so far mainly Norwegian or Filipino) few, says Per Lothe, Project Director at has had the assets needed for investments. ■ Gross revenue (2002) of the fleet Knutsen OAS. So far, LNG carriers have Banks have been helpful, and Knutsen operated by Knutsen OAS been extremely expensive, and extensive OAS has succeeded in remaining a Shipping NOK 1,400 mill. rules and requirements call for advanced privately owned company. Operating profit NOK 800 mill. expertise.

BEACON 5 MEMBERS IN FOCUS -Safety in all areas is a priority for us, says Trygve Seglem. -This goes from vessel design to operation and from top officers down to the youngest crewmember. The goal is to reduce any risk to the lowest possible level

in the business, this is not very inviting. (The Safety, quality and the environment Future looking bright day of the interview was coincidentally the Operating in a market consisting of the The multi-national oil and petroleum same day the news broke that Norway’s world’s leading oil and petrochemical companies continue to be Knutsen OAS’ largest shipping company, Bergesen, companies, Knutsen OAS has extremely customers. Newbuilding of large LNG had been sold to a Hong Kong based safety conscious customers. At the same tankers does not mean that the company shareholder. ed.) time they need to meet all other national is shifting focus from crude oil (shuttle and international rules and regulations tankers) and chemical carriage to gas regarding safety and environmental carriage. FACT FILE protection. TRYGVE SEGLEM -We aim at being a total supplier for ■ Age: 52 -Safety in all areas is a priority for us, leading oil companies when it comes to ■ Married, two daughters says Seglem. -This goes from vessel carriage of crude oil, chemicals and gas, ■ Managing Director of Knutsen design to operation and from top officers as well as other technical solutions in OAS Shipping AS down to the youngest crewmember. The connection with such carriage. And, yes, ■ Education: B.Sc. Marine goal is to reduce any risk to the lowest we are very optimistic about the future, Engineering, Newcastle possible level. (It goes without saying ends Seglem. University, 1974 that this sounds like music to the ears ■ Experience: Shipping industry of an insurance company…). ever since, including Statoil (the Norwegian state oil company) for seven years ■ Joined Knutsen OAS Shipping AS in 1983 as Project Director and Owner ■ Became Managing Director in 1988

Board Memberships: ■ Vice President, Norwegian Ship Owners Association ■ Chairman of Committee Norwegian Hull Club ■ Member of Committee Assuranceforeningen Skuld ■ Board Member/Chairman of various companies within the Knutsen Group

Knutsen OAS is situated in Haugesund, on the Norwegian west coast

6 BEACON New technical solutions and aiming for new business

Det Norske Veritas has made PNG (Pressurised Natural Gas) carriers into a new standard

With its own project department, The key to innovation, Per Lothe points With this solution, even small gas fields Knutsen OAS is well prepared for out, is looking into research already may become profitable, and gas can be development of new and advanced made, own competence and experience, delivered to new markets. technology. Project Director Per Lothe and then applying this knowledge to is enthusiastic about the competence new fields. KVOC – the Knutsen approach to VOC within Knutsen OAS, and how this Today, the most precious part of an oil competence, together with quite a bit PNG cargo is left to evaporate into thin air while of creativity, has led to development -We had standard vessel design and we loading. Evaporation of VOC actually leads of new technical solutions. had standard pipeline design for carriage to a loss of the buyer’s cargo and, in of pressurised gas, says Per Lothe. addition, makes nature bear the costs in One example is PNG (Pressurised -Pipeline technology has seen huge terms of pollution. -We have a solution Natural Gas) carriers. Another is KVOC, developments, particularly over the last for this, says Per Lothe, -and we are the Knutsen approach to VOC (Volatile ten years. Pair these elements together, proud to say that this solution will reduce Organic Compound). and what do you get? A new type of gas evaporating gases by 70 to 90%. carriage, not liquid gas this time, but PNG (Pressurised Natural Gas) to be According to Intertanko, the total annual loaded on-site wherever the need arises. evaporation of VOC globally is more than ten mill. tons. This equals a full day of -THE KEY TO INNOVATION, PER LOTHE Det Norske Veritas has made the solution the world’s production of crude oil. POINTS OUT, -IS LOOKING INTO into a standard by establishing a new RESEARCH ALREADY MADE, OWN vessel class for PNG carriers. Extensive tests have been carried out. COMPETENCE AND EXPERIENCE, AND Knutsen OAS’ VOC solution has been THEN APPLYING THIS KNOWLEDGE TO -We see vast possibilities here, says Per patented and is now ready for installation. NEW FIELDS Lothe. -As for shuttle tankers there is -We are hoping for a breakthrough for direct loading out on the offshore fields, the first contract, says Per Lothe. meaning flexibility, cost efficiency and no -When the market is ready, so are we. need for pipelines or onshore infrastructure.

BEACON 7 By Charles B. Anderson, President, Anchor Marine Claims Services Inc.

The U.S. Maritime Tran Photo: Courtesy of U.S. Coast Guard

8 BEACON Photo: Courtesy of U.S. Coast Guard

The Maritime Transportation Security Act will help prevent a repeat of September 11 sportation Security Act

The final weeks of 2002 saw an extraordinary amount of activity in the U.S. Congress, aimed at improving the security of U.S. ports and waterways. The centerpiece of this legislative activity – the Maritime Transportation Security Act (MTSA) – was signed into law by President Bush on November 25, 2002. The MTSA addresses Congress’ concern that U.S. ports are particularly vulnerable to breaches in security and may be used by terrorists as a means for delivery of weapons of mass destruction. The Act mandates broad measures to increase port and vessel security, encourage investment in long-term technology, and manage security risks.

Facility and vessel vulnerability Commercial vessels that may be involved maritime industry including vessel assessments in a transportation security incident must owners and operators, federal, state and The MTSA requires the Coast Guard also prepare security plans that: local law enforcement agencies, port to conduct ‘vulnerability assessments’ authorities, shipping agents, P&I clubs, of vessels and facilities that may be •are consistent with the National classification societies and maritime involved in a ‘transportation security and Area Plans industry associations. Skuld and Anchor incident,’ defined as an incident • identify a ‘Qualified Individual’ with Marine representatives participated in resulting in significant loss of life, full authority to implement security these meetings and can supply additional environmental damage, transportation actions details to interested members on request. system or economic disruption. These • deter, to the maximum extent The Coast Guard intends to publish an assessments are aimed at identifying practicable, a transportation security interim final regulation on the security weaknesses in physical security, protection incident using contract security plans no later than June 2003 and a final systems, communications and procedural measures rule by November 2003. The Coast Guard policies. The Coast Guard has indicated • describe training and drills has stated that it wishes to align U.S. that it may pass the responsibility and • include provisions for maintaining domestic maritime security requirements cost of conducting the assessments to physical and personnel security. with the International Ship and Port vessel owners and operators. Facility Security (ISPS) Code and recent Pending issuance of regulations SOLAS amendments which will come Maritime transportation security plans implementing these requirements, last into force on July 1, 2004. The new legislation requires the Coast Fall the Coast Guard issued a voluntary Guard to prepare a National Maritime guidance document (Navigation and Transportation security cards Transportation Security Plan, and Area Vessel Inspection Circular 10-02) intended The MTSA will require transportation Plans for each of the 43 Captain of the to assist vessel owners and operators security cards for access to the secure Port (COTP) Zones in the U.S. to establish protective measures for areas of a vessel or facility. The cards are their specific vessels. In addition, the mandatory for any individual allowed Coast Guard has held a series of public unescorted access to a vessel’s secure meetings seeking input on the security areas; any individual issued a license The Act gives the US Coast Guard new powers to plans from a broad cross-section of the or certificate by the U.S. Coast Guard; enforce port and vessel security

BEACON 9 The MTSA requires the Coast Guard to issue an annual report on foreign flag vessels calling at U.S. ports

vessel pilots; individuals engaged on a Organization (ILO) may meet this conditions of entry into the U.S. by vessels towing vessel assisting a tank vessel; or requirement. arriving from the port, deny entry to the any individual with security sensitive U.S., or provide public notice to passengers information. Cards will be denied to Foreign port assessments of the ineffective anti-terrorism measures. individuals with criminal records, who The Coast Guard will be required to have been refused entry to the U.S. assess anti-terrorism measures at any Automatic identification systems under U.S. immigration laws, or who foreign port from which vessels depart Vessels operating in U.S. waters pose a security risk. It remains unclear on voyages to the U.S. or that otherwise must have automatic identification whether crewmembers who have been pose a security risk. Factors to be systems (AIS) that electronically transmit detained on board vessels by INS will be considered include procedures for information about the vessel’s speed, eligible for transportation security cards. screening containerized cargo and baggage, course, heading, location, and other In addition to the security cards, crew- access control, vessel security, and data. By July 1, 2003 all tankers and members must carry and present licensing and certification of compliance most passenger vessels must be acceptable identification credentials. It is with security standards. If a foreign port equipped with AIS. anticipated that mariners’ identification does not maintain effective anti-terrorism cards issued by the International Labor measures, the Coast Guard may prescribe Photo: Courtesy of U.S. Coast Guard

10 BEACON Photo: Courtesy of U.S. Coast Guard

All commercial vessels operating in U.S. manifest information 24 hours before waters must have AIS by December loading on a vessel. One source of 31, 2004. confusion is the absence of a clear AMONG THE MOST CONTROVERSIAL definition in the regulations of the term OF THE MTSA’S PROVISIONS ARE International Intermodal ‘carrier’, which may include a registered AMENDMENTS TO U.S. CUSTOMS Transportation Security owner, bareboat charterer, NVOCC, LAW AUTHORIZING THE CUSTOMS The MTSA authorizes the Coast Guard to or a time- or voyage charterer. The SERVICE TO REQUIRE CARGO establish a program to evaluate and regulations do not prohibit private INFORMATION THROUGH ELECTRONIC certify secure systems of international contractual arrangements between DATA INTERCHANGE SYSTEMS PRIOR intermodal transportation. The program ‘trade partners’ that may allocate TO CARGO ARRIVAL OR DEPARTURE. will include standards and procedures responsibility and liability for compliance for screening and evaluating cargo prior with the regulations. Charterparty to loading at a foreign port, securing clauses may attempt to allocate specific cargo and monitoring security while in responsibility for filing the declarations transit, as well as standards for ensuring as well as liability for damages and compliance. penalties arising from non-compliance, international standards or (4) whose laws but after entry into the U.S. it is the or regulations are insufficient to allow Separate cargo identification and Master of the vessel who remains tracking of ownership and registration performance standards will be responsible to produce the manifest to histories. developed for containerized cargo, the U.S. Customs. including development of performance Civil penalties standards for the physical security of Report on foreign flag vessels The MTSA authorizes civil penalties of shipping containers, seals and locks. The MTSA requires the Coast Guard to up to USD 25,000 for each violation of issue an annual report on foreign flag maritime security statutes or regulations. Transmittal of information vessels calling at U.S. ports, focusing on to customs service those nations whose vessels (1) appear Conclusion Among the most controversial of the as Priority III or higher on the Coast The new maritime security legislation MTSA’s provisions are amendments to Guard Boarding Priority Matrix (a system has already caused significant changes U.S. Customs law authorizing the used to target vessels for inspection that in the way vessel owners and operators Customs Service to require cargo assigns each ship a score based on five conduct their business. The MTSA and information through electronic data performance categories – operating its implementing regulations will require interchange systems prior to cargo company, flag state, classification society, closer scrutiny of security measures arrival or departure. This has led to the prior history and service); (2) have on ships and at shore facilities, closer so-called "24-hour Rule" which requires presented false, incomplete or fraudulent cooperation between vessel owners, carriers to provide accurate cargo information concerning passenger or crew charterers, and shippers to ensure that manifests, crew identity or qualifications, reporting requirements are met, and or registration or classification of vessels; greater transparency in owners’ and The Coast Guard will be required to assess anti-terrorism measures at any foreign port where (3) whose registration or classification operators’ shore-based organization vessels depart on voyages to the U.S. procedures are noncompliant with and operations.

BEACON 11 LOSS PREVENTION Weather forecasting information maximises safety while allowing the Master to meet demanding commercial schedules. The satellite image on the far right shows Hurricane Andrew.

Weather Routing

The following article was provided by the company WNI Oceanroutes. Quite a few of our Members avail themselves of weather routing services, and we have seen several examples of the benefit of these services when it comes to safety, efficiency and judicial purposes. We trust this article will be of interest to members.

Weather conditions are no doubt still one Unfortunately, this is not the case as conditions, but also the effect these of the most dangerous factors to be there are still shipping companies which conditions would have on an individual encountered when being at sea. Since do not avail their Masters of the increasing vessel's speed. Optimum Ship Routing mariners first took to the high seas, the amount of weather forecast information was born and differs from initial weather weather has extolled a heavy cost in available to maximise both the level of routing by providing each individual terms of human life. Over the centuries safety and commercial return on vessel with not only a safe passage, but this cost has been reduced, but in these investment. With the advantages of also one that is commercially efficient. technologically advanced days one would either shore-based or on board Optimum An Optimum Recommendation may take expect losses to be near to zero. Routing Systems providing accurate a vessel through a period of adverse and professional analysis of all available weather, but in doing so, it will never weather forecasts and ship information, place the vessel in danger and is designed FACT FILE a Master can be sure the correct route to provide the earliest possible safe ■ WNI OCEANROUTES is sailed. In this manner, it is possible to arrival at the desired destination. ■ Established 1952 achieve maximum levels of safety for the ■ Staff of over 700 vessel and crew whilst still meeting today's Oceanography, meteorology ■ 27 offices in 13 countries demanding commercial schedules. and engineering ■ Over 50 years experience The state of the sea at any one time is a ■ World's most comprehensive Shore-based weather routing complex interaction of wind waves, swell marine weather database Shore-based weather routing has been waves and current. The effect of these, ■ Up to 18,000 voyages available for over fifty years. Initially the along with the wind itself, on a vessel/- supported each year information provided to mariners at sea cargo combination is difficult to judge. ■ Services provide return on was merely the provision of a route During the course of the voyage, it is investment of 9:1 recommendation, avoiding as much of necessary to model these ‘speed down’ ■ Web sites: the forecasted adverse weather en route effects in order to calculate where the www.oceanroutes.com as possible. As computer technology vessel will be in, say, 24 hours’ time, and www.oceanroutes.co.uk developed, it was possible to forecast ultimately to calculate the Estimated ahead not only the weather and sea Time of Arrival. Part of this calculation

12 BEACON Photo: NOAA

– reducing losses at sea and costly delays

Oceanroutes Orion Pro on board optimum routing voyage, with the vessel providing daily schedules. To meet this challenge, system shows route comparisons for a vessel sailing reports on position, course, speed and shipping companies use a variety of German Bight to Baltimore. Prior to departure, but fuel/diesel remaining on board. computer software packages to manage looking +210 hours ahead on a chart of wave heights, alternative routes are compared with a northabout their operations. The correct software option selected by the Master. Sub-windows show Time charter benefits can greatly improve fleet management the route comparison statistics, a pictogram of the For the time charterer, Optimum Ship and schedule integrity. But more vessel’s position at +210 hours and the expected Routing has advantages beyond the safe importantly, it can be instrumental in wind speed/direction, primary and secondary swell and efficient operation of the vessel. reducing losses at sea and costly delays. directions/periods, and current speed/direction There are also benefits in terms of the speed and consumption for the voyage Internet access is the derivation of the ‘performance checked against the charter party Using the Internet for vessel tracking speed’ of the vessel, the speed the description. This is recognised provides a distinct advantage free from vessel could have made through the throughout the shipping industry, not the negative attributes that come with water in calm sea and wind conditions. just by time charterers, but also by some software applications. There is no owners and in courts of arbitration. transmission or processing of data, The modelling requires a mix of nautical which in turn reduces communications engineering, meteorology and oceano- Technological advances costs and frees computers to run other graphy, but in many areas of the theory, Initially, all messages sent to a vessel had applications. Perhaps the greatest there are no known scientific equations to be delivered by cable through a radio advantage of a web-based service is its that can be applied. Thus, algorithms station, then by telex over radio, and most convenience. Accessing the information need to be developed using a database recently by satellite communications via the Internet allows managers to of experiences with different vessels, direct from the sender to the receiver. monitor weather conditions and plan cargoes, wind, sea and swell conditions. Each upgrade in communications on voyages from anywhere in the world, For more than 50 years, Oceanroutes board opened up further possibilities for from any computer connected to the has been extending such a database to the shore-based routing companies as web, and at any time. include the experience of almost one they were able to send more and more million voyages. detailed text-derived information to each Real time vessel positions and sailed vessel's Master. In the early 1990s, it and planned routes, along with ten days Poorly-defined facts became a commercial possibility to of forecast global weather, are now It is, however, not just the complexities of transfer data between the shore and available, all superimposed on a single the ship at sea that need to be considered. vessels at sea, and this opened up a new chart. This is a vast improvement from the Facts are required, although basic and often area of technological development. standard latitude and longitude position poorly-defined, such as vessel speed and reports used in most operations. Fleet fuel levels at the commencement and Ship operators must track vessel managers can now see the exact status end of the voyage. The weather routing movements and keep up to date on the of the fleet and work proactively to avoid provider will receive the Master’s latest weather conditions. This is a potentially damaging sea conditions Commencement/End of Sea Passage, sizeable task when several vessels are whilst still meeting voyage schedules. or position of Fullaway/Drop-off Pilot. located in different oceans and each Cooperation will continue during the vessel is trading with multiple port

BEACON 13 LOSS PREVENTION By Nicola Mason, Skuld (Far East) Ltd., Hong Kong

Million dollar beans Photo: Stephainie Maze/CORBIS

14 BEACON Photo: John Foster/CORBIS

South American soya beans should have a maximum moisture content of 12%

A number of substantial soya bean claims have been made regarding cargo loaded in South America and discharged in the Far East. In all cases, the moisture content of the soya beans exceeded 12%, which, according to Club experts, can result in soya beans deteriorating and overheating.

One claim is in excess of USD 13 million. moisture content exceeded 12%, which What is alarming, however, is that This claim involved the deterioration and as mentioned above can result in the notwithstanding this known risk, the overheating of cargo on a voyage from soya beans deteriorating and overheating contractual specifications for minimum Brazil to Japan. It is interesting to note (particularly where cargoes were shipped moisture content of soya beans shipped that in this claim there is no evidence in high temperatures or on relatively long from South America is commonly 14%. that the ship or owners did anything voyages). Consequently, cargo interests are wrong; even so, they are facing claims for agreeing to a specification which carries millions of dollars. According to experts, The danger of shipping soya beans with a with it a risk of deterioration and over- the soya beans become unstable due to the high moisture content, i.e. with a moisture heating. Indeed, cargo interest’s beans’ inherent vice; the microbiological content in excess of 12%, is nothing new. underwriters are aware of this and action occurring as a consequence of high Indeed, it was judicially acknowledged still accept underwriting the risk moisture content at time of shipment. by the House of Lords in Soya Gmbh v notwithstanding the universal held In all these cases, the soya beans’ White 1983 1Lloyd’s Rep. 222 at 125 view stated above. (per Law Diplock). HOW CAN OWNERS PROTECT THEMSELVES?

The main cause event, enquiries should be made as to Loading method The main cause of heating in soya bean whether there are any further analysis The method of loading should be recorded. cargo is excessive moisture. Thus, certificates available showing the actual For instance, was the cargo loaded enquiries should be made to provide as moisture content of the cargo, or directly onto the vessel from the much information as possible on this individual portions of the cargo. shippers’ silo, say by conveyor belt, point. The following are examples of or pneumatically? Or was it loaded such enquiries. Careful checks should be made regarding indirectly by transfer to trucks? rainfall during the period at the load port, Often, certificates only confirm that the particularly during loading operations. As the effectiveness of ventilation will cargo complies with the maximum Was any cargo loaded in the rain (check depend on the extent of free space above moisture content, typically 14%. In this whether a rain LOI was given)? If it rained the cargo, a note should always be kept during loading, check whether any as to whether the hold was slack or fully difficulties were encountered in the loaded up into the hatch-way. Loading soya beans in Brazil – careful checks should timely closing of the hatches. be made on loading conditions

BEACON 15 Checks that silos or bins are in good working order and how long the soya beans have been in storage are recommended

Repeated handling and transfers of soya at the load port. A specialist cargo The temperatures referred to above are beans can result in physical damage to surveyor may be particularly helpful those of the beans themselves – not the the beans, which in turn can increase the in monitoring the condition of the cargo atmospheric temperature. The temperature susceptibility to damage. In addition, it during loading. Moisture and temperature of the beans will tend to approach the can be very helpful to know how the readings of the cargo as it is being put daily mean atmospheric temperature cargo was transported to the port – by into the holds can provide an indication upon prolonged storage. This temperature barge down the river or by train or truck? as to the likely deterioration of the cargo can be higher where silos or storage during the voyage. bins are subject to prolonged solar If the cargo was shipped in the rainy or radiation. Most analysis certificates are high moisture season and uncovered Moisture content and storage based on composite average samples. transportation of the cargo to the port or Soya beans can be stored for long Soya beans are a natural product. The vessel was used, this could result in an periods as they are cool and dry when average figure will vary, and portions of increase of moisture in the cargo upon put into storage. Elevated moisture levels the cargo may have a moisture content loading. For example, if the cargo was can lead to increased respiration of the significantly above the average value shipped on board by a conveyor belt, beans as well as growth of moulds, both shown on the certificates. Thus, if soya check whether the conveyor belt was of which lead to heating and deterioration bean cargoes are to be loaded with a covered or not. in quality. The effects can vary from mild moisture content approaching 12 to 14%, discoloration to caking, blackening and careful consideration should be given In addition, checks that local silos or rotting of the beans with an associated to instructing a specialist surveyor. bins are in good order can be useful. In foul odour. one case, investigations uncovered that Physically wet cargo should not be the silos used for the cargo required Most quality certificates stipulate a loaded, or should be removed from substantial repairs shortly after the maximum moisture content of 14%. the hold if already loaded. vessel had departed. In addition, find Soya beans can be carried safely at this out how long the cargo was stored in moisture level if they are relatively fresh Relevant documents & records the silos or bins before being loaded and stored coolly. However, reports from At the load port on board the vessel. the United States indicate that for soya Ideally, the following documents should beans stored at a temperature of about be obtained for each cargo of soya beans Appointing a surveyor 20°C with a 14% moisture content, a loss carried, particularly so in the event that a When loading soya bean cargo, particularly in quality may be expected after around claim for damage to the cargo is made: in South America, consider whether it is 40 to 45 days. However, if beans have worthwhile appointing a surveyor to assist already been stored for some weeks at 1. Pre-loading survey report, if possible that temperature and moisture content, 2. Moisture certificate or certificate of A SPECIALIST CARGO SURVEYOR loss of quality can be expected in cargoes quality at shipment MAY BE PARTICULARLY HELPFUL arriving, for example, in the Far East 3. Cargo hold bilge soundings and bilge IN MONITORING THE CONDITION from South America. At 25°C and 14% pumping records of the voyage OF THE CARGO DURING LOADING. moisture, the safe storage period is 4. Copies of both the head charter party reduced to around 30 days. and if possible, any sub-charter party

16 BEACON Photo: The Image Bank Photo:

(if acting for charterers); if acting for Although the quality of the soya beans owners, only the head charter party will have changed since loading, some may be available useful information may be obtained from FIND OUT THE INTENDED USE OF THE 5. Copies of bill of lading samples. If samples are taken, some CARGO AND WHETHER IT IS GOING TO 6. Copies of mates’ receipts samples should be taken of surrounding BE MIXED OR BLENDED, OR USED 7. Statement of Facts at the load port cargo as well as of the visibly deteriorated UNBLENDED. IN ONE CASE IT APPEARS 8. Stowage plan (especially if loading cargo. A careful record of readings and THAT ALTHOUGH THE CARGO WAS from more than one port) samples should be kept and hence the USED, THE LAWYERS ACTING FOR THE recommendation to involve a cargo CARGO INTEREST SEEM TO BE CLAIMING During the voyage expert as soon as possible. FOR THE WHOLE VALUE OF THE During the voyage, a ventilation record AFFECTED CARGO, WITHOUT GIVING of the hold should be made and ideally Find out the intended use of the cargo CREDIT FOR ANY EVENTUAL SALVAGE. records should also be kept of the ambient and whether it is going to be mixed or temperature and relative humidity, the blended, or used unblended. In one case temperature of the cargo and the relative it appears that although the cargo was humidity in the hold. Having noted this, used, the lawyers acting for the cargo excess of 12% except insofar as such the usual manner of loading holds to interest seem to be claiming for the loss, liability, damage or expense was capacity and into the hatch-way may whole value of the affected cargo, without caused by owners’ breach of their make taking measurements in the hold giving credit for any eventual salvage. obligations under this charter party." impractical. The charter party Danger to crew and stevedores The ventilation records from the ship and Owners can insert the following clause As a natural product, in circumstances the deck log abstracts should be given to into the governing charter party: where ventilation has been inadequate or the club as soon as there are any allegation where there has been excessive mould of cargo damage so the records can be "Charterers acknowledge that soya growth, a soya bean cargo may well have reviewed and evidence preserved. beans shipped with a moisture content in an oxygen deficient atmosphere in the excess of 12% may deteriorate and/or hold. This could be potentially hazardous At the discharge port overheat due to microbiological action. to human life. Entry into cargo spaces, If you are notified of a cargo claim whilst Charterers shall indemnify owners therefore, should only take place after the vessel is at the discharge port, it is against all consequences of shipping testing for adequate ventilation. important to make sure that you get a soya beans with a moisture content in good surveyor or soya bean cargo expert. excess of 12% and, in particular, shall Acknowledgements indemnify owners against any loss, Holmes Hardingham Glenn Winter If unloading is already under way, make liability, damage, delay, or expense, of Burgoynes D A Robbins careful records of the extent and pattern whatsoever nature, which owners may of the damage in the cargo. Photographs incur as a result of being held liable for are helpful, as are temperature and overheating and/or deterioration of soya moisture surveys. beans shipped with a moisture content in

BEACON 17 LOSS PREVENTION

Entry into enc The danger of entry into enclosed spaces, and the precautions to be taken in case of entry, should be familiar to any mariner. The following example, brought to us by one of our members, does, however, show that necessary precautions are not always taken and that fatal accidents do happen.

At 2100 hours on 27 December 2002 by opening the P/V valve (press-vacuum) The deck watchman called the officer on Bosun and pump man were in the for 4 stb. When the tank had been duty and he raised the alarm. All cargo process of completing work related to depressurised, Bosun and pump man operation was stopped, crew mustered and changing a gasket on a blind flange for removed the blind flange to change the equipment prepared for tank rescue. a tank-cleaning gun. The tank had gasket. During this work, Bosun lost a Meanwhile, the terminal was informed previously been pressurised with N2 bolt into the tank. He decided to enter and they sent a team to assist the vessel (nitrogen) and the tank entrance hatch the tank to pick up the bolt. He knew with the rescue. had been sealed off. During the that if the bolt was sucked into the pressurising of N2, some minor leaks impeller of the cargo pump during The tank was opened and ventilation was were discovered, and on 4 stb there was discharging in Europe, they would not installed to free the tank of gas. Meanwhile, a minor leak on the blind flange for the be able to discharge the tank without the pump man and the AB (able-bodied opening where one tank-cleaning gun destroying the cargo (propylene oxide). seaman) on duty (fully equipped with had been removed. (These are removed Bosun told the pump man that he would CABA – compressed air breathing when carrying the product in question, enter the tank and pick up the bolt. apparatus – including one extra for the propylene oxide, to avoid leaks in the gun Pump man told him that it was dangerous Bosun) entered the tank and found the itself. This product needs a blanket of to do so, but Bosun picked up a filter Bosun lying on the platform approx- N2 during loading, transport and mask, broke the seal to the entrance imately in the middle of the tank. He was discharging, so there must be no leaks hatch and entered the tank. After a few unconscious and had a long cut in the 1 of N2.) seconds pump man and the deck crew in back of his head. About a /2 litre of blood the vicinity of the tank could hear him was on the platform. Around 18 to 20 A leak was discovered in this particular falling from the ladder and onto the minutes after he entered the tank, they flange and the tank was depressurised middle platform. were able to secure him in a safety harness and lift him out.

18 BEACON Photo: Courtesy of Rautaruukki Profiler AS Photo: Courtesy of Rautaruukki Profiler

Always beware of potential danger and work by the rules losed spaces

When on deck, the Chief Officer started 4) The filter mask used is only for 1) Filter masks shall be removed from with HLR (Heart and Lung Rescue) and fumes, and is only to be used when all the Company’s vessels (only dust oxygen. He continued until the paramedic 21% oxygen is present masks allowed) from ashore arrived and the Bosun was 5) The hard hat was taken off before 2) CABA for sampling, tank work brought to the hospital. The Bosun was entering the tank (like cleaning/spraying, etc.) will be declared dead on arrival at the hospital. purchased for all vessels The Bosun and pump man started the 3) A circular will be issued, stressing At the maritime inquiry, held four days work at 0800 in the morning and they that entry into enclosed spaces later, no new items were revealed. were to stop work at 2100 hours. They demands a permit, that any violation However, all procedures and routines had a one hour break for lunch and one of such shall result in dismissal and related to entry into enclosed spaces hour for dinner. that hard hat and strap shall be used had been broken: whenever on duty The crew on board did a great job in 4) Posters related to entry into enclosed 1) Neither the Officer on duty nor the getting the Bosun up from the tank in a spaces and the danger involved will Chief Officer had been informed short time. The rescue team did all they be sent to all vessels for posting in 2) The tank had not been measured, could; however, sadly to say, they did not lobby/mess room and crew changing gas-freed or declared safe for entry. succeed in saving him. room All procedures were broken and no permit issued This tragic accident was discussed at the 3) The N2 seal to the tank had been Company’s Safety Committee a week broken before entry (N2 seal – later, and the following was decided: danger seal)

BEACON 19 By Chris Hall, Skuld (Far East) Ltd., Hong Kong

Outbreak of Severe Acute Resp

SARS, the alarming new respiratory disease, has so far been reported in Asia, North America and Europe. The largest outbreaks have been in China, Hong Kong, Singapore, Vietnam and Canada. Symptoms facilities. Receiving early medical attention SARS usually begins with a fever greater increases the chance of recovery. than 100.4°F (38°C) and, on some occasions, other symptoms, including chills, headaches The best treatment is not yet known. and body aches. Some people also experience Antibiotics have not been effective. mild respiratory symptoms at the beginning. Treatments have included antiviral agents, After two to seven days, patients may such as ribavirin, in combination with oral develop a dry, nonproductive cough and or intravenous steroids. The illness can have trouble breathing. In 10 to 20% of be severe, and even fatal, but with prompt cases, patients have required mechanical medical attention, most patients should ventilation. recover. The current fatality rate is 4%.

Spread of SARS When SARS is suspected Experts think that SARS is spread by According to the World Health Organisation, close contact between people. It is most SARS should be suspected if (1) a person likely spread when someone with SARS has a fever of over 100.4 °F (38°C) and coughs droplets into the air and someone (2) has a cough, shortness of breath and/or else, usually within three feet, breathes difficulty breathing, and (3) either has had them in. SARS may spread more broadly close contact within ten days of onset of through the air or from touching objects symptoms with a SARS patient, or a that have become contaminated. history of travel within ten days to a SARS-affected area. SARS appears to be less contagious than influenza. Given international travel and If SARS is suspected, the owners/Master the potential severity of the illness, however, should do the following: SARS must be treated seriously. (1) Urgently consult with a doctor as Treatment to whether the suspected case is likely SARS patients require prompt, professional to be SARS. If already in port, the medical care. Crewmembers with suspected cases of SARS must be treated at a port with good medical Masks for protection against SARS on sale outside Skuld’s Hong Kong office

20 BEACON piratory Syndrome (SARS)

BEACON 21 Skuld’s Hong Kong office is taking no risks

crewmember should be examined by • The patient should be isolated in a At the port a doctor. single, well-ventilated room with Upon arrival, the SARS patient may be (2) Be ready to proceed immediately to separate bathroom facilities, if possible. hospitalized for three weeks or more. a port with good medical facilities. An • Interaction with the patient should The crew and vessel may be examined or airlift may not be possible, as many be limited. screened for SARS. Crewmembers with such services are refusing to carry •Crewmembers interacting with the no symptoms of SARS, but who have SARS patients. patient should wash their hands been in close contact with the SARS (3) Follow the usual port health procedures frequently with liquid soap. patient, may be placed in quarantine for infectious diseases and any special • Disposable gloves should be used for ten days or more. SARS-specific procedures that exist. for any contact with body fluids of the A number of authorities, such as those in patient. If a number of crewmembers are the Philippines, Malaysia, Singapore, • The patient should cover his mouth or hospitalized and/or quarantined, or if Hong Kong and the Panama Canal, have nose with a tissue before sneezing or the vessel is deemed contaminated, the already imposed special procedures for coughing. The patient should also vessel may be delayed or quarantined for vessels that have recently traded to SARS- wear a surgical mask during close some time. As many governments are affected ports. Other ports may commence contact with other crewmembers. very nervous about dealing with SARS, similar procedures. The procedures vary, •Crewmembers interacting with the other problems may arise. but may include vessel and crew screening SARS patient should wear surgical and quarantining, advance health reporting masks and protective goggles. N95 or and shore leave restrictions. These P3 masks are recommended. CREWMEMBERS WITH NO SYMPTOMS procedures may apply regardless of Members should supply their vessels OF SARS, BUT WHO HAVE BEEN IN whether SARS is suspected on board. with masks, goggles and gloves, CLOSE CONTACT WITH THE SARS Non-compliance could result in heavy especially when trading to known PATIENT, MAY BE PLACED IN penalities and even imprisonment. Contact SARS-affected areas. QUARANTINE FOR TEN DAYS OR local agents well in advance of arrival for •Crewmembers should avoid sharing MORE. further details. Be prepared for delays. utensils, towels and linen with the (4) Explain to the health authorities SARS patient until these items have Skuld is ready to assist any members with before arrival the sick crewmember’s been well washed. SARS-related questions or problems. symptoms and history of travel. •Crewmembers should clean contami- Members should also inform Skuld, nated surfaces with good disinfectants. Much of the information above is from which will assist in making the necessary • Generally, crewmembers should the US Centers for Disease Control arrangements. maintain good health and observe (www.cdc.gov/ncidod/sars) and the (5) Take care to limit spread of SARS to good hygiene and sanitation practices. World Health Organisation other crewmembers prior to arrival. They should avoid touching their (www.who.int/csr/sars.en). Please check In this regard, the Centers for Disease mouth, nose and eyes to prevent their sites for more information and Control and WHO have recommended spreading the diseases. Key areas of regular updates. We would like to thank guidelines for SARS patients in homes, the vessel should be disinfected the Hong Kong Shipowners Association and which we have adapted for a vessel: regularly, especially shared and common Seaborne Agencies Pte. Ltd. in Singapore areas, bathrooms, the galley and mess. for their contributions to this article.

22 BEACON LEGAL NOTES By Jonathan Hare, Skuld, Oslo

Cargo claims – who is the carrier?

Readers who have experienced litigation may have had the feeling that a document with a perfectly straightforward meaning became anything but clear once lawyers started examining the small print. There is, however, some good news in a recent House of Lords decision involving a Skuld member which shows that common sense has a part to play.

The Starsin was on time charter to The owners’ position was upheld in printed conditions at the time of issue of Continental Pacific Shipping and the first instance in the High Court but the bill of lading. In order to find out who performed a voyage from Malaysian overturned by a majority in the Court the carrier is, it makes business common ports to Antwerp and Avonmouth. Liner of Appeal. The case then went to the sense for a shipper to turn to the face of bills of lading were issued bearing the House of Lords which has just delivered the bill and, in particular, to the signature charterers’ logo and name. The bills its judgment. Owners’ position was held box, rather than clauses at the bottom of were signed by the charterers’ port to be correct. Cargo owners could not column two of the reverse on the bill." agents "As Agents for Continental Pacific recover from owners under the bill of Shipping (The Carrier)". However, anyone lading. It is important to note that the identity of with the time (and good enough eyesight) carrier clause was ineffective because it to read the clauses on the reverse of the The Court stated that it "must seek to did not fit with what was on the face of bill would have found an identity of carrier give effect to the contract as intended the bill. If the charterers had not featured clause and demise clause stipulating so as not to frustrate the reasonable so prominently on the face of the bill, the that the owners were the carriers. The expectations of businessmen….. Given position would have been entirely different. question which arose was one which P&I the speed at which international trade As always, much turns on how the bill is club claims handlers regularly face – is transacted, there is little time for filled out and signed. who was the carrier and therefore examining the impact of barely legible responsible for cargo claims under the bill of lading – the owners or the charterers?

The owners, entered with Skuld, argued for a common sense approach. Any trader or bank would naturally assume on looking at the face of the bill that the charterers were the carriers. Cargo interests argued that the standard clauses on the reverse of the bill should prevail with the result that owners were the carriers.

A victory for common sense – the court stated that there is little time for examining the impact of barely legible printed conditions given the speed of international trade

BEACON 23 Skuld’s Piraeus office is included under the new certification Only minor adjustments were required to bring Skuld’s non-Scandinavian offices into the new standard. Picture shows Skuld’s team in Hong Kong Setting new standards

Skuld’s Scandinavian offices received their quality certificate (ISO 9002:1994) in March 1999. Ever since it has been a challenge keeping our quality system – Compass – updated and consistent with daily routines. This has proved successful as, through each repeat audit by DNV (Det Norske Veritas), we have succeeded in keeping our certificate validated.

The new ISO 9001: 2000 standard The new standard is better adjusted to Congratulations to Hong Kong As the former quality standard is becoming service providers and should prove of and Piraeus outdated, our quality management system greater benefit to a company like Skuld During this last audit, the quality certificate has recently been upgraded to fulfil the and its members. The standard places was also upgraded to include our offices demands of the new quality standard a sharper focus on management’s in Piraeus and Hong Kong. These two ISO 9001:2000. responsibility and staff involvement and, offices were not part of the 1999 most importantly, on customer satisfaction. certification. Basically these offices, The quest for continual improvement is still though not formally certified before, had of vital importance to us and been operating by the same routines and we hope that quality standards as our other offices. this is reflected Preparing for a formal certification in the service involved some information, training and provided. internal auditing, but only minor adjustments had to be made to comply with the new ISO standard. Congratulations!

The eight principles of quality management 1. Customer focus 2. Process approach 3. System approach to management 4. Active leadership 5. Decisions based on facts 6. Involvement of staff 7. Mutually beneficial relationships with suppliers 8. Continual improvement

Skuld’s quality management system now meets the new standard ISO 9001:2000

24 BEACON Skuld Defence Services

Skuld has introduced a unified approach to defence cover by consolidating all defence work in a new entity known as Skuld Defence Services. Many of the Association's members rely heavily on Skuld's advice and support in defence matters. We therefore wish to provide an enhanced service by placing it in the hands of a small number of experienced lawyers. The aim is to provide a prompt and pro-active approach that is consistent throughout all Skuld offices.

Executive Vice President Arthur responsibility for emergency response. For Any questions regarding the new Pilkington will head Skuld Defence information on Arthur Pilkington’s back- organisation can be addressed to Services. He will also be responsible for ground, please see "Organisational Arthur Pilkington (tel: +47 22 00 22 00, the development of new and related changes in Skuld", page 29. e-mail [email protected]). types of cover, as well as having continued

The following lawyers will be part of the team, some of whom will also continue to deal with P&I cases within the existing syndicates. Oslo Arthur Pilkington, EVP Jonathan Hare, Senior Vice President Frank Riley, Senior Vice President Sara Gillingham, Senior Lawyer Kenneth Stewart, Senior Lawyer Janet Ching, Lawyer Christopher Walker, Lawyer Jan Andersen, Trainee Lawyer Hong Kong Nicola Mason, Vice President Lawrence Chen, Lawyer Christopher Hall, Lawyer Piraeus Dominic Hurst, Senior Lawyer Michael Boje Larsen, Senior Lawyer Elina Souli, Lawyer

Many members rely heavily on Skuld’s advice and support in defence matters

BEACON 25 Skuld’s investment policy pays off

The year ending 20 February 2003 was another difficult one for investors. As in 2000 and 2001, Skuld’s long term investment profile continued to pay off, probably leaving Skuld’s 2002 performance among the best in the International Group.

Global stock markets fell for the third drop so significant that low investment weakness and diminishing confidence consecutive year, dragged down by income for 2002 is inevitable. in the market economy as multiple corporate scandals and fears about the high-profile corporate accounting global economy. All leading equity FIXED INCOME PORTFOLIO scandals were revealed. markets fell dramatically, with losses Still, the fixed income portfolio experienced exceeding 20% in both the US and UK. another rewarding year. With a return of POSITIVE RESULTS Stockmarkets in continental Europe were 7.3% measured in USD, the active portfolios Completing the year, the investment hit the hardest, with Germany leading the outperformed the benchmark by 0.2%. portfolio had generated a performance fall by 40%. Bond valuations rallied as interest rates of +1.0% in USD terms (-0.6% measured declined substantially throughout the in local currency). Although less than EQUITY PORTFOLIO year, particularly in the second and third desired, the Club takes pleasure in At year end, Skuld’s equity portfolio had calendar quarters of 2002. This was presenting positive results in a year with returned a negative performance of 18% driven by concerns over a potential extreme turbulence and significant value measured in USD. Despite a moderate ‘double-dip’ in the economy, mounting deterioration for other investors. allocation to equities, this represents a geopolitical tensions, equity market Skuld remains confident in the prudent approach of seeking returns through Investment returns 2002 controlled risks and financial- and 10% operative diversification. A fixed income portfolio with a duration and currency 5% profile that matches the insurance liabilities, combined with a global equity 0% exposure, remain the cornerstones of Feb.02 May 02 Aug.02 Nov.02 Feb.03 the portfolio. Through a research-based -5% investment philosophy, long term asset allocation and professional management -10% by world leading investment managers, Skuld will continue to deliver investment -15% results that contribute to a strengthening of the Club’s reserves and operations. -20%

Equities Fixed Income Skuld’s long term investment profile continued to pay Total off in 2002

26 BEACON Heyerdahl and stone carvings Thor Heyerdahl is the inspiration behind the Award Head to head on Easter Island

Skuld co-sponsors Heyerdahl Award

The Thor Heyerdahl International Maritime Environmental Award was launched in 1999 by Thor Heyerdahl and the Norwegian Shipowners’ Association. The sponsorship behind the award has been expanded, and we are proud to announce that Skuld is now one of the sponsors for the Award.

The purpose of the Award is to: diploma and prize money up to USD •contribute to an improvement of the 100,000, is awarded every second year. FACT FILE global environment The Thor Heyerdahl International ■ Thor Heyerdahl (1914-2002) • announce to all sections of society the Maritime Environmental Award for 2003 ■ Studied biology, geography and environmental benefits of shipping as a will be presented during Nor Shipping, anthropology, cared very much mode of transport June 2003 in Oslo. for the environment and battled • serve as an inspiration for implementing fiercely for his theories on new, specific environmental measures. Skuld is represented on the Expert maritime contacts between Committee by COO Tor Erik Andreassen. civilisations of the past To qualify for the Award, candidates must ■ 1947: proved his theories on have distinguished themselves for the For more information on Thor Heyerdahl population of Polynesia from benefit of the marine environment. and the Award, please see South America through his 101- The Award, consisting of a statuette, http://www.heyerdahlaward.com. day voyage on Kon Tiki, a copy of an ancient balsa raft ■ 1950s: Archeological research on Galapagos Islands and Easter Island ■ 1960s-70s: Experimental voyages with traditional reed boats RA I, RA II and Tigris, proving possible ancient transatlantic contacts ■ 1980s-90s: Archeological projects in the Maldives, Easter Island, Peru and Tenerife ■ Several honorary doctorates, awards, extensive production of books, articles and films

Kon-Tiki comes close to land

BEACON 27 Douglas Jacobsen toasts the choir House-warming and New Year

Skuld moved to new offices in Members, business associates, friends A welcoming speech by CEO Douglas Ruseløkkvn. 26, Vika, Oslo in December. and all Oslo staff were invited, and some Jacobsohn was followed by tapas and On 6 March 2003, we hosted a combined 150 people crowded into our new premises. wine. COO Tor Erik Andreassen sings house-warming and "New Year’s Eve" Our office is all on one floor now, but has in a choir, Choriolis, and invited them to party – "New Year" of course to celebrate ample room for mingling in the reception join us, adding to the warm and friendly the successful 2003-2004 policy year area, wide corridors and open office atmosphere. renewals, completed 20 February. spaces.

1) Harald Harlem and Roger Østern share a photo opportunity 2)Choriolis in full swing 3) Lise Larson and Christin Norløff enjoy the buffet

1 2 3

28 BEACON Tor Erik Andreassen Arthur Pilkington Dan Lennhammer Chief Operating Officer (COO) EVP Defence Services and Emergency Response EVP Claims and Technical Services Organisational changes in Skuld

As of January 2003, there have been some organisational changes in Skuld. A new position of Chief Operating Officer (COO) has been created, and an enhanced focus on defence services has led to the set-up of a new defence group. Skuld’s Management Board (MB) has been strengthened, and now consists of CEO, COO, CFO, EVP Marketing, EVP Claims and Technical Services, EVP Defence Services and Emergency Response and SVP Human Resources.

Tor Erik Andreassen Arthur Pilkington including a number of high profile cases Chief Operating Officer (COO) EVP Defence Services and Emergency such as the Braer, Estonia and Sea Response Empress. He will continue to be in Skuld’s former Executive Vice President, charge of Skuld’s emergency response. Head of Underwriting Tor Erik Arthur Pilkington has moved from his Andreassen (42) has entered the new position as Executive Vice President, Dan Lennhammer position of Chief Operating Officer. He Claims in order to head Skuld’s Defence EVP Claims and Technical Services takes overall responsibility for Skuld's Services and Emergency Response. syndicates and all matters pertaining to Dan Lennhammer is Skuld’s new Skuld's marketing, underwriting, claims The motives for creating a separate Executive Vice President Claims and and technical services. defence group are to enhance service to Technical Services and has responsibility members and to establish a unified for Skuld’s claims handling in all Skuld Tor Erik will focus on the organisation approach towards defence matters syndicates. and management, and sees increased throughout all Skuld offices. There will efficiency and business focus as his main also be greater focus on the development Dan’s main objective is to set goals, challenges. of new and related types of cover and the develop good routines and guidelines possibility of offering services to non P&I for claims handling and follow up. In Tor Erik Andreassen holds a MSc in members (see article on page 25). order to increase efficiency and cost- Naval Architecture and Marine Engineering effectiveness, he is currently conducting from the Norwegian Institute of Technology. Arthur Pilkington (46) is a graduate a full analysis of the claims organisation. He has several years’ experience from (LL.B) from the University of Glasgow. He shipping related companies. Before practised as a solicitor in Glasgow and Dan Lennhammer (38) has a Master of joining Skuld in 1998 he was a Vice Edinburgh before moving to Oslo where Law and studies in Business Administration President in North Sea Line, Fred. Olsen he joined Skuld as a lawyer in 1986. He from the University of Stockholm, Sweden. & Co. in Oslo. He joined Skuld as Vice established Skuld’s Hong Kong office in He joined Skuld Stockholm in 1993 as President Risk Management, and from 1989 and was in charge there until 1993 Claims Executive. Dan was promoted to year 2000 became Executive Vice when he became Deputy Claims Director Deputy Claims Director in 1997 and President, Head of Underwriting. in the Oslo head office. He was promoted Regional Vice President for Skuld to Claims Director in 1994 and then held Stockholm in 1999. From year 2000, he the position Executive Vice President, has been engaged in various projects, Claims from 1999. Over the years, Arthur including the closure of the Stockholm has been involved in many casualties office.

BEACON 29 Personnel news

Arne Solhusløkk Rune Harald Skogseide Ketil Urdal Ellen Haugom Lawrence Chen

OSLO Underwriting Manager in Skuld since April HONG KONG Arne Solhusløkk, 31, started working as 2001. He has 15 years’ experience from Lawrence Chen, 29, started working as Accounting Executive on 3 March. Arne Fred. Olsen & Co in different positions, a Lawyer in our Hong Kong office in is educated as an Auditor and has two as well as three years’ experience from December 2002. Lawrence studied marine years’ relevant experience from KPMG. Storebrand ASA/If/Gard Services AS technology and maritime law at Dalian Arne was on temporary employment in working with marketing and underwriting. Maritime University in China for six and a Skuld for six months before starting half years where he received his BSc and his permanent position. Ellen Haugom, 42, was promoted to LLM degrees in 1997 and 2000 respectively. Senior Vice President Human Resources Since then, he worked in the Commercial Rune Harald Skogseide, 29, has accepted and Office Administration on 1 January. Department at China Shipping’s head the position of IT Consultant She has studied at Teacher Training office for about one year. During the period Datawarehouse and started mid April. College and has taken different management February 2001 to September 2001, he was Rune has three years of higher education programmes at the Norwegian School of employed by S.G&Co, a maritime law firm, in Information Technology. For the Management, Executive School, BI. Ellen where he worked as trainee attorney, last three years, he has worked as a has worked in Skuld since 1997, first as specialising in the field of maritime and consultant on Skuld’s new IT system Senior Personnel Adviser, and since 2000, admiralty affairs. He carried out a LLM through IBM/Christiania Consulting. as Vice President HRM/Office Adm. session, majoring in maritime law, from Before joining Skuld, she worked for 15 October 2001 to September 2002 at Ketil Urdal, 47, was appointed Vice years in different positions and companies Southampton University, UK, before President Underwriting in Syndicate 1 on in the HR field, both in private and public joining Skuld’s Hong Kong office. 1 May. Ketil has worked as Underwriter and administration.

30 BEACON Contact Skuld

Oslo syndicates To ensure a more optimum use of resources Oslo Hong Kong and to account for changes in the member Assuranceforeningen Skuld (Gjensidig) Skuld (Far East) Ltd. structure, as of 1 May, the former four Ruseløkkveien 26 Room 2909, China Resources Bld 26 syndicates in the Oslo office have been P.O. Box 1376 Vika Harbour Road reshuffled into three. N-0114 OSLO Wanchai Telephone: +47 22 00 22 00 HONG KONG The change involves a slight redistribution Telefax: +47 22 42 42 22 Telephone: +852 2836 3909 of members, market areas and staff. Emergency telephone: Telefax: +852 2836 3219 The basic structure is as follows: +47 952 92 200 Telex: (802) 69571 SKULD HX E-mail: [email protected] Emergency telephone: Syndicate 1: +47 952 92 200 Head of Syndicate: Lars Dueled Bergen E-mail: [email protected] Geographical market: France, Belgium, Skuld Bergen AS Italy, Luxembourg, Monaco, Netherlands, Nedre Ole Bulls plass 3 Piraeus Portugal, Spain, Switzerland, United P.O. Box 75 Skuld Hellas Kingdom N-5803 BERGEN 1-3 Filellinon Street Telephone: +47 55 30 18 60 GR-18536 PIRAEUS Syndicate 2: After office hours: +47 90 50 49 07 Telephone: +30 210 459 4190 Head of Syndicate: Claes Westman Telefax: +47 55 30 18 70 Telefax: +30 210 459 4194 Geographical market: Canada, Estonia, Emergency telephone: Telex: (601) 21 24 98 SKLD Finland, Latvia, Lithuania, Poland, Russia, +47 952 92 200 Emergency telephone: Sweden, Ukraine, USA E-mail: [email protected] +47 952 92 200 E-mail: [email protected] Syndicate 4: Copenhagen Head of Syndicate: Egil Gulbrandsen Assuranceforeningen Skuld (Gjensidig) – Internet Geographical market: Germany, Norway Den Danske Afdeling www.skuld.com Frederiksborggade 15 The former head of Syndicate 1, Jonathan DK-1360 COPENHAGEN K Hare, is taking on new responsibilities as a Telephone: +45 33 43 34 00 member of our Defence Services team. Telefax: +45 33 11 33 41 Emergency telephone: For details on staff members for each +47 952 92 200 syndicate, please see Skuld’s web site: E-mail: [email protected] http://www.skuld.com/offices BEACON 31 VIEWPOINT Douglas Jacobsohn President and Chief Executive Officer, Skuld

Skuld meets its targets

The P&I industry is strange. In contrast realised that we had achieved practically At our end, we are naturally turning over to most other comparable businesses, each and every one of our goals. In actual every stone in order to limit expenditure. we renegotiate all our business deals at fact, we maintained a higher volume than Reduced costs for our own specific once, or at least in the course of some expected, while at the same time achieving reinsurance programme, and a massive few weeks. We do not even limit these an average premium increase beyond the focus to limit external legal costs, are renegotiations to clients, whom we tend budgetary goals. only two very recent examples of such to call members – we even negotiate efforts. At the same time, we continue with suppliers of key ‘raw materials’, Members may argue; well thank you very to provide the Skuld service, which we like for instance reinsurance, at the much, you loaded us with a considerable believe, is second to none. same time! increase in premium and at the same time passed on the largest increase in Some people have said that the renewal Fixing both your income and vital parts of the Excess Market Re-insurance contract process is the one time of the year where your expenses simultaneously may seem in many years, and you call it a success? the Club and its members sit at opposite both sensible and practical, but when Our answer would be a resounding ‘yes’. sides of the table. Looking back at the done in parallel and under time pressure, Persistent claims, combined with shrinking outcome of the renewals, I believe we all it can be a mind-boggling exercise. premiums, have been haunting the Club sat at the same side of the table and Needless to say this process, commonly results for the past five years. Add addressed the best interests of the Club. referred to as the renewals, becomes a dwindling financial returns to the equation The loyal support of our members in very hectic season for Club staff. But and regrettably the only true recovery this process proves that. Now it is our even more so, it is an extremely important from dark red figures is found in premium turn to prove that we are worthy of process in relation to the financial outcome increases. No, I haven’t forgotten the your continued support. of the following policy year for the Club. substantial invoices you have paid to cover additional supplementary calls over A Happy New Policy Year to all our I am happy to report that Skuld’s recent the past few years. However, while members! renewals, in every respect, should be supplementary calls can do a lot to correct considered a success. At the outset, our the past, they do little or nothing to set a ambitions were high, but as the clock better course for the future. To increase ticked beyond noon of February 20th, we the base premium to a sustainable level in relation to claims has been an absolute pre-requisite for the future of your Club. Douglas Jacobsohn

32 BEACON