CURRENTS Issue Number 28 • June 2009 CURRENTS Issue Number 28 • June 2009 Fighting the Scourge of The Politics and Realities of Wreck Re- 4 Piracy at Sea 22 movals: The Case of the Sea Diamond A Seafarer’s Viewpoint: A Practical Ship Registers Can Help Owners 6 Approach to Counter Piracy 24 Through Challenging Times The Only ‘Screen Door’ a Vessel IMO Update Highlights 8 26 Needs: Dare to Care for your Crew Meet the staff at Shipowners Claims Shipowners Must Notify Government of 10 Bureau (Hellas), Inc. in Piraeus 28 Any Payments to Medicare Beneficiaries New California Regulations for Use FD&D Corner 12 of Low Sulfur Fuel By Vessels 30 Vessel Lay-Ups: The Beginning of an 14 A Surveyor’s Perspective 33 Increased Use of SCOPIC? CORRESPONDENT PROFILE: Drugs in the Caribbean 16 36 The View from Gibraltar The Asian Gypsy Moth Infestation Seafarers’ Scourge: STDs 18 Season Is Upon Us 38 Elevating Costs Of All Class GT Breakdown 20 Casualty Response 39 MANAGEMENT CHANGES CURRENTS is edited by: THE FOLLOWING APPOINTMENTS HAVE BEEN MADE TO THE STAFF Dr. William H. Moore OF THE SHIPOWNERS CLAIMS BUREAU, INC., THE MANAGERS: designed by: NEW YORK KIM ABOOBAKER IT Support Specialist Kay MulitMedia CECILIA CASADO Senior Staff Accountant illustrated by: MARY EVANS Underwriting Assistant Mr. John Steventon INTRODUCTION by: Joseph E.M. Hughes Chairman & CEO Shipowners Claims Bureau, Inc. The introduction to CURRENTS No. 27 looked for- However, preliminary figures indicate a significant ward to the 2009 renewal season. The last edition also increase in the Club’s free reserves over the period from described the presentations entitled “Building on the about $36 million to nearly $45 million, with a similar Past, Welcoming the Future” which members of the uplift in the Club’s free reserves per entered ton. management team had been making to the maritime This has been stimulated by an improving trend community in various locations around the globe. in claims development for earlier years—notably Their purpose was to describe the great changes 2007—and a very subdued result for the current policy which had taken place in recent years. The Club’s year at present, although this is, of course, at a very current status as a modern mutual with a global reach early stage. Given the recent bounce in the equity was explained. Looking to the future, the presentation markets, there are grounds for cautious optimism that sought to show how the Club aimed to add value to its further progress will be achieved over the medium Members’ business activity in the challenging eco- term through increasing investment support. nomic times which lay ahead. In summary, the Club looks forward to further The presentations were well received, forming a progress during the current policy year—with an eye, useful platform from which the renewal of the Club’s of course, to the financial difficulties which afflict the business was conducted last February. world economy in general. In the result, the Club enjoyed a satisfactory However, its technical fundamentals are sound, renewal season. Year-on-year premium increases of its core business is performing well, legacy asbestosis over 25% for P&I and nearly 29% for Defense cover problems have been resolved, its operational capa- were achieved. Looking forward, the historic loss bilities are second-to-none, as is its global reach, its ratios of renewed business imply that, for 2009, on the investment portfolio is carefully balanced, and it has an renewal rates obtained, an underwriting result better excellent platform for future development. than break-even should be achieved. While much has been achieved, much remains to As a follow-up to the efforts made toward the end be done and, overall, prudent growth is in prospect. of 2008, an updated form of the presentation will be The continuing success of the Club depends upon its made to Members and the Club’s other friends over the Members and other friends in the market. All can be months ahead. certain that it will continue to focus on the provision This will include Club results for the first quarter of unsurpassed service to all its customers in the fulfill- of the current calendar year, i.e. as of March 31, 2009. ment of its enduring mission! These look highly encouraging, although the develop- ment of the 2008 policy year—and more particularly, for obvious reasons, that of 2009—are still immature. 3 by: Denzil Stuart Denzil Stuart Associates London FIGHTING THE SCOURGE OF PIRACY AT SEA In spite of some signal successes by coalition naval forces The EU politicos in Brussels have said that prosecut- in repelling or preventing attacks by Somali pirates in the ing pirates remains a challenge as European navies operate Gulf of Aden and further south off the East African coast, under different rules of engagement. Also, it wants to one fact remains irrefutably clear: the problem is going to ensure that pirates transferred to Kenya do not face the be around for a long time yet. death penalty. After all, Alexander the Great tried to wipe out piracy It has been reported that between August 27, 2008, around 330 BC. However, piracy remained a major impedi- and May this year, 320 suspected pirates were captured by ment to shipping in the Mediterranean two centuries later coalition naval forces. Of that total, eight suspects were at the height of the Roman Empire. killed in firefights, but 175 were simply detained, disarmed Today, over 2,000 years later, one of the world’s main and then released, according to Lloyd’s List. trade arteries, used by around 20,000 ships a year, is the It seems that legal hurdles abound at every turn (as this happy hunting ground for pirates who daily become more was written it was revealed that half of all those arrested resourceful, audacious and violent. in the UK on suspicion of terrorist activity or links are A significant danger flag was hoisted mid-May when released without charge). However, there is interna- it was reported that an Indian seaman was shot dead by tional consensus that what is happening at sea cannot be pirates on board the cargo ship Sea Princess II and his seen or tackled in isolation from what is taking place on body thrown into the sea, and one of his colleagues was land—political-speak for establishment of a stable Somali shot and injured, after a ransom had been paid. The ship government for a start. was later released. In January, the IMO-inspired Djibouti Code of In 2007, a crew member of a Taiwanese-flag fishing Conduct, signed by 17 states, was introduced to solve vessel was murdered, apparently because the owner was the “East African problem” through co-operation, in a reluctant to pay the ransom demanded. manner consistent with international law, to fight piracy. Experts believe that a catalyst came in April when In practical terms, this means sharing intelligence, using pirates failed to hijack the US-flag containership piracy information centres in Mombasa, Dar es Salaam MAERSK ALABAMA, followed by a violent attack on and Sana’a, intercepting suspected ships, supporting another US-flag ship, a bulk carrier, possibly in retaliation victims and prosecuting individuals attempting armed for the deaths of three pirates in the successful operation robbery at sea. to free Capt. Richard Phillips, the MAERSK ALABAMA’s In May, Lloyd’s threw its weight behind this initia- master who offered himself as a hostage to ensure the tive, and chairman Lord Levene urged global business safety of his crew. to lend its clout to a pan-East African response to the It has been said that once a US-flag ship and crew were scourge of piracy. in the frame, a new ball game had begun; that may still At the same time this pledge by Lloyd’s was made, remain true as events further unfold. Spyros Polemis, chairman of the International Chamber Some 16 nations at the last count —including Russia, of Shipping, told a security conference in London that China, Japan and South Korea—have warships in the “nations have a duty of zero tolerance to hijackers until region, which covers 1.1m square miles, a truly vast area piracy is completely eradicated with a political solution.” that is difficult to police. There had been 100 reported attacks since last summer, he A big overarching problem is that when there is success said, and the problem must be solved from onshore. and pirates are captured, whether from the failed state He also rebutted remarks from delegates that P&I of Somalia or Yemen, no one seems to know what to do clubs have been slow to deal with cases and are refusing with them since there is no coherence or uniformity of law to pay ransom money. “The clubs are not turning their or instruction on the part of governments, flag states or backs,” he asserted. ports. Like the crippled ship that is carrying oil or danger- There has been no dearth of suggestions from other ous cargo, a port of refuge is hard to find. quarters on how to deal with this menace, which is hitting Some pirates have been landed in Kenya and elsewhere, shipowners’ pockets—payment of ransoms, increased and a few have even appeared in French courts. In many crew costs, provision of security services and equipment, cases, however, the captured pirates are released and higher insurance costs, legal bills and ships’ downtime – within days, sometimes hours, they are again infesting just at a time when they can least afford it.