Issue 24 - June 1999

Board report Miller’s new ASPAC chairman Ship inspection report Greek shipping special report

New look for Club website TeamMail extends the service Californian oil spill plans Medicals produce major savings

Renewals boost tonnage

A healthy proportion of the new business was from new buildings - in excess of 350,000 gross tons, deepening the quality of the Club’s fleet as well as boosting its size. The average age of new entries was approximately 14 years compared to 20 years for ships withdrawn at renewal.

Renewal negotiations this year have been tough for all the P&I clubs as owners pressed hard for reduced premiums in a relatively soft insurance market and extremely depressed freight and charter markets.

The 1999/2000 entry represents a positive endorsement of the UK Club’s efforts to combine competitive pricing with effective service. Certainly, these renewal returns are consistent with the Club’s policy of increasing the quality of ships on its books. They also illustrate the significance which owners attach to the mutual system and to the unparalleled expertise it provides in underwriting, claims handling and service.

S&P top rating for UK Club

The UK P&I Club ‘maintains a dominant and leading position in terms of gross call income and free reserves. This position supports comfortably the high severity, low frequency loss nature of the majority of its member vessels.’

This is the view of international rating agency Standard & Poor’s which has again ranked the Club in the leading group of marine mutuals with a top “Api” financial strength rating. The UK Club is one of only two Clubs to have been accorded the top ranking every year since Standard & Poor’s began their assessments of P&I Clubs in 1994. The report commends the UK Club for its operating performance, which ‘utilises fully the investment revenues, from the large level of funds available, to smooth member calls. Underwriting appears well managed with a good five year average combined ratio around 100%.’

It continues: ‘International Group membership and strong reserves engender very strong stand alone financial flexibility.

‘Reserves and total funding continue to be strong and very stable at 4.9 times the level of paid claims. This level of funding has allowed the club to decrease the level of supplementary calls required of members.’

Miller company replaces partnership The Managers have changed their structure. With the approval of the Club’s Members at the recent SGM, the former partnership was replaced as Managers by a new company called Thomas Miller (Bermuda) Ltd with effect from 16 April 1999. The UK Club Directors have agreed a formal change in the Club’s bye-laws to reflect the change in the Managers organisation. Terence Coghlin, Miller's chairman, said “I am pleased that, while doing away with the outmoded concept of partnership and spreading ownership far more widely among those working for the firm around the world, we shall be keeping Millers private, independent and dedicated to the service of the Club and of its Members.”

Mutual system remains best option

The strategy will be developed to eliminate any perceived weaknesses of the mutual system whilst at the same time strengthening the value of a mutual club to the Members.

EC and IGA

The Board noted the EC’s formal decision confirming exemption for the International Group Agreement (IGA) for ten years and negative clearance for the Pooling Agreement on 12th April.

A positive decision had been in doubt and there were fears that the Group's valuable Pooling and reinsurance arrangements would be undermined. Shipowners and shipowner associations inside and outside Europe, and Board members, including the Chairman and Deputy Chairmen, had helped persuade the Commission to come to a positive decision.

Pooling security

The Board reviewed the 1999 Pooling Agreement, including a new provision to enable Pooling Clubs to obtain security for outstanding obligations from any Club which ceases to be a party to the Pooling Agreement.

Finance and investments

The Board noted that the free reserves on the Club's balance sheet were standing at a record high of $412 million at 20th February 1999. Investments have made a major contribution, adding some $95 million to the Club's funds in the past year, while a fall off in the level of claims reflected in part the Club's loss prevention measures.

1996 Policy Year closed

Given the strong reserve position, the Board decided to close the 1996 policy year without further call. The supplementary call for 1996 had already been cut to 25 per cent from an originally planned 40 per cent.

Overspill calls

The Board considered a report from the International Group Managers about improving the basis of allocation of overspill calls. This is currently on a tonnage basis, with a sliding scale to lessen the impact on larger ships. The report concluded that all alternative ways of allocating the call created problems of unfairness. The UK Club has in any event significantly reduced the potential for an overspill call through a special reinsurance and the catastrophe reserve which together protect UK Club Members up to approximately $1.27 billion of overspill.

Spill response services

Pre-contracted spill management and response facilities in the United States have been arranged for Club Members.

Y2K developments

The directors considered a report on developments to help Members address Year 2000 issues, following the circular in February. The latest steps included development of the IMO sponsored Code of Good Practice and the ICS sponsored Year 2000 Safety Protocol, to which it is hoped all major shipowners, charterers and port operating organisations will subscribe. Signatories to the Protocol would waive their rights to bring claims against others for any deviation and delay caused solely by compliance with the Code of Good Practice. The Board confirmed support for both the Code and the principle of the Protocol.

Training project A P&I course, devised by UK Club Managers, will make its debut in London in September 1999. This course will comprise four elements addressing the differing requirements of members’ staff: - an Insight into transport law and insurance - a practitioners’ guide based on the Club Rules - advanced technical matters including case studies - strategic advice for risk managers, finance directors and principals. Year 2000 guide Practical Guidelines for Year 2000 Contingency Planning is aimed at helping shipowners draw up contingency plans for dealing with Year 2000 problems. The UK Club and the other International Group clubs have worked with BIMCO, the London insurance market’s Joint Hull Committee and the International Chamber of Shipping to produce the book. It includes a CD-ROM which carries the text and that of Lloyd’s Register’s Guidelines for Year 2000 Projects. The package is being distributed free to UK Club Members. Much vital work has been done to fix or replace suspect systems and equipment. However, it is now generally accepted that the most thorough and conscientious remediation programme cannot guarantee that critical IT systems and electronic microprocessors will function correctly. Even those whose systems function perfectly may be at risk from customers, suppliers, business partners or third parties.

Adverse ship reports continue to decline

The inspectors’ 1998 report, presented to the UK Club board, revealed that a further 340 vessels (64 per cent) incurred comments advocating improvements while 173 (33 per cent) were given a high rating with no comments.

Some 532 ships were visited by the UK Club’s ship inspectors during last year, bringing the total since the scheme started in 1990 to 4468. The 1998 inspections concentrated on north west Europe (160), USA (169) and Singapore (57), but were also carried out in the UAE, Japan, Argentina, Chile, South Korea, Australia, China, Taiwan and India.

The proportion of adverse reports has continued to decline, suggesting industry-wide loss prevention and quality initiatives are helping to improve standards.

With inspections being concentrated on ships over 10 years old, it was not surprising that more than three quarters of those found wanting were over 15 years old. More than half were classified with the China Register, Russian Register and Bureau Veritas.

In fact, all ships over 10 years old undergo condition surveys on entering the Club. These are conducted before entry, if possible, although most are carried out within one month. In 1998, files were opened for condition surveys of 318 ships as follows:

• Standard entry requirement 249 (78 per cent)
• Inspectors’ visits 22 (7 per cent)
• Claims 31 (10 per cent)
• Miscellaneous 16 (5 per cent)

Visits by location
The Club’s inspectors visited 532 ships during 1998, spread all around the world.

Major claims stemming from equipment, mechanical and structural failure have lessened since 1990. Structural failure claims have dropped from a peak of 55 in 1991 to around 20 a year.

UK Club Managers recognise that ship age is not necessarily an indicator of poor quality but acknowledge that a high percentage of ships attracting adverse comments are more than 20 years old.

Port State Control continues to operate to varying standards and criteria across the world, detaining at least 143 UK Club ships in 1998. Many of the 22 ships found wanting last year were seen in well run ports with strong Port State Control - mainly in the USA, northern Europe and Singapore. Only two vessels appeared to have a record of PSC detention.

The Managers will continue to build up evidence about ISM certification among Club Members.

Miller’s new ASPAC chairman

Herry Lawford has been appointed Chairman of Thomas Miller (Asia Pacific) Ltd from 6th April. He will have overall responsibility for the activities of the mutual Clubs managed by Miller’s in the Asia Pacific region, particularly the UK P&I, TT and Transport Intermediaries’ clubs.

He succeeds David Martin-Clark, the founder Chairman of Thomas Miller (Asia Pacific), who is retiring from Miller’s after 38 years service. The directors registered their appreciation of David’s service to the Club throughout that period.

Herry Lawford graduated in law and joined Miller’s in 1967. He specialised in handling P&I and Defence claims and travelled widely in Asia Pacific countries, working particularly closely with the UK Club’s Members in Japan.

Between 1976 and 1981, he combined his claims handling role with that of Secretary of the International Group of P&I Clubs. In 1984, Herry became the first Chairman of the managers of Transport Intermediaries Mutual, later the International Transport Intermediaries Club (ITIC).

He returned to the UK Club in 1993 as Service Director and recently added the role of Loss Prevention Director. He will continue to be responsible for the delivery of the Club’s services worldwide co-ordinated from London.

David Martin-Clark and Herry Lawford have played prominent roles in the management team which has expanded the representation of the Miller transport clubs in Asia Pacific in recent years.

This has included the setting up of branch offices for the UK and TT Clubs in Singapore; extending the role of Transport Mutual Services in Sydney to include P&I claims handling and advisory services; and overseeing the China operation with its new offices in Beijing, Shanghai and Taipei, reporting to Hong Kong.

Greek shipping: a very long relationship indeed

“Many times and instances where we would have had difficulty doing things, I just picked up the phone and called the right person in the Club. It is done immediately, whether it is a guarantee or bond, whether it is backing, legal support or what have you.”

According to George Makris, representing Greek owners through the Tridentine Maritime Agency in New York, this is what you get when you deal with the UK P&I Club.

These most generous sentiments are recorded in the Club’s 1995 history Mutuality. While UK Club executives would not accept such sweeping compliments wholesale, they would like to feel there’s something in what Mr. Makris said.

Greek shipping is undergoing major changes. With over one-third of the Greek-controlled merchant fleet on its books, the UK Club is sharing the challenges.

They reflect a widespread feeling among members in general and the Greek contingent in particular. They can only be the product of a long relationship.

The cultural patterns of Greek shipping involve very long relationships indeed. Mutuality draws attention to a composite portrait of a Greek shipowner, built up over time.

“Be he an owner-master plying the Aegean or an expatriate in Monaco or New York overseeing an international tanker fleet, the attitude and pattern of progress are similar. An element in securing that progress is protecting the assets and insuring against ruinous liabilities”.

Not that those liabilities should be open ended. Greek shipping organisations have played a major role in securing successive limitations to the liabilities of P&I clubs in relation to claims arising from possible massive incidents.

The first known Greek entrant Embiricos appeared on the Club’s 1885 list. Numbers and tonnage increased steadily after the First World War. Rethymnis & Kulukundis were the first Greek owners to enter ships from their London base in the early 1920s.

As lower cost Greek shipping established itself, more vessels operating out of Piraeus, London and other ports found their way onto the UK Club’s books. By 1939, around 10 per cent of the Club’s Members were Greek.

The Greek community has stayed loyal to the Club during a number of upheavals and developments in the P&I world, not least the formulation of underwriting principles in the 1970s, associated with significant premium rises.

Today, over one-third of the Greek merchant fleet - approximately 25 million tonnes, spread between more than 950 vessels - is placed with the UK P&I Club. It represents around 27 per cent of the total. The tonnage profile is heavily oriented towards tankers (around 48 per cent) and bulkers (36 per cent). Dry cargo ships, OBOs, gas carriers, containers and passenger vessels each account for two to three per cent. Over 40 per cent of ships are bulkers and 24 per cent tankers. Dry cargo, passenger vessels and reefers account for between four and seven per cent each.

Greek owned and managed vessels account for around 16 per cent of the world’s merchant tonnage - about 72 million tonnes, distributed across over 2,500 vessels.

Traditionally, Greek owners have been skilled in operating older tonnage profitably. In every sector the Greek fleet is older than the world average. The Greek-controlled container fleet - which has gone up more than fivefold in five years - and the tanker fleet have average ages of 19 and 21 respectively. The industry averages are 10 years for containers and 16 for tankers.

Like ship operators worldwide, the Greeks have had to contend with the Asian crisis and its adverse effects on world trade; a tightening of the regulatory environment via ISM, STCW and Port State Control; and a hardening in shipping finance. However, Greek owners continue to be resilient and resourceful. As ship values have fallen, skilful purchases have been made and more are anticipated by owners who have husbanded their resources in expectation of sale and purchase bargains.

The importance of Greek shipping within the Club is reflected by the presence of Peter Wright, one of the global senior management team, in Piraeus. His re-location was the first of a number of steps taken towards a comprehensive P&I service.

Since the beginning of October, the new area management structure has been in place. Three account teams, based in Piraeus, London and Sunderland, and staffed by some 30 executives, have been looking after all aspects of Greek Members’ business. Overseen by Operations Director Steve Harvey, the main functions are general advice, claims handling, correspondent liaison and promoting members’ interests. People claims for London and Piraeus are handled by Area Group L3 under Andrew Jones and for Sunderland by S2’s Ernie Foster. Nigel Brooks is at the heart of the underwriting service.

There is no doubt that the Club’s Greek membership will continue to be fundamentally important to the success of the Club as a whole.

Playing their part In 1938, Basil Mavroleon became the first Greek shipowner to be elected to the Board of the UK P&I Club. At that time the Greek shipping community accounted for approximately 10% of the Club’s entries. Since then Greek Board representation has grown with their participation in the UK Club. One of the current deputy chairmen is Aleco Kairis of N.J. Goulandris Limited. The other Greek community directors are Norman Baptist of Seatrans Shipping Services Ltd., Constantine Caroussis of Chios Navigation Ltd., Gregoris Hadjieleftheriadis of Eletson Corporation, John Ioannidis of Olympic Shipping & Management S.A., Nicholas Lykiardopulo of Lykiardopulo & Co. Ltd., and Dimitri Manthos of Admanthos Shipping Agency.

Daniel Evans H1 Area Director The Piraeus office (H1) has developed significantly since the setting up of Thomas Miller (Hellas) in 1996 to provide an active representative base for liaising with members. It began by explaining the Club’s policies, providing ad hoc advice and acting as a feedback channel for Members’ views and requirements. On 20th February 1998, Thomas Miller (Hellas) added the role of claims handling syndicate, dealing with P&I and FD&D claims worldwide for Greek-based Members. The office has also incorporated the correspondent role. There are now six claims handlers with a wide variety of legal and practical shipping experience. Peter Wright is the senior resident Miller person and Daniel Evans is the H1 Area Director with overall responsibility for the office. Between them, the executives offer specialist assistance on large claims, dual UK and Greek legal qualifications and extensive contacts. “Having Greek nationals in our office is tremendously important,” explains Daniel Evans. “In Athens and Piraeus, Members very much appreciate being able to discuss their claims, seek advice and hear about issues face to face and in their own language.”

Charles Elmer L1 Area Director The L1 area group is dedicated solely to Greek-controlled tonnage with the desire of many of these Members to manage their entire insurance affairs through their London offices because of the City’s hull and other markets. The eight-strong claims handling team have vast legal and practical experience between them, some of it in owners’ employment. L1 Area Director Charles Elmer says his initial priority is concentrating on contact and communication. “Since our formation in September, we have visited every Member we serve - a total of more than 100 operators. We have pledged to provide them with a minimum of two visits per year to discuss claims matters and general Club issues.”

Angela Gamblin S2 Area Director The Sunderland office was the base of the Sunderland P&I Club before its incorporation into the UK Club in 1990. It has strong historical links forged over 50 years since the first Greek operator, Tsavliris, joined the Sunderland Club. These have been strengthened by the steady flow of Greeks studying for their maritime and naval architecture qualifications in the north east of England. The senior claims handlers in area group S2 have over 60 years’ seafaring, legal and commercial experience. The group handles P&I, Defence and personal injury claims. S2 Area Director Angela Gamblin says: “Although we are a self-sufficient team, we are not isolated from the Club’s global network. The development of modern data and video communications enables us to participate effectively in the delivery of coherent and effective service wherever our Members may trade.”

Year 2000 conference in Athens Last June, Thomas Miller organised a major conference in Athens on ‘Meeting the Challenge of the Year 2000 in the Shipping Industry’. It was attended by a wide range of representatives from the Greek shipping community. Athens was one of five venues around the world hosting this conference, reflecting the level of enquiry from Greek interests. It featured expert speakers on Year 2000 problems on board ship: contractual, legal and insurance issues; and practical response measures. Ship2000 toolkits were made available to delegates to help them address compliance problems.

New look for Club website

The UK Club’s website at www.ukpandi.com has undergone an extensive overhaul to make a wider range of information accessible to Members. Content is now updated every two or three days, so it is well worth bookmarking and referring to it regularly and frequently via a mere mouse click.

Much material is presented in the new house style demonstrated by this publication and others issued recently by the Club.

Making Contact is now fully on-line and reflects the 1999 personnel line-up throughout the Miller network of regional offices. The broader network of correspondents providing immediate and local response even in the most remote areas is also on-line. Detailed changes in personnel and other contact details will be fed into that system upon notification by correspondent offices.

Essential UK Club publications include circulars for Members’ and their brokers’ reference. The latest issues of UK Club News and Loss Prevention News can be read, and the Club’s new Rules and List of Correspondents is illustrated on the home page.

Stop press items of loss prevention advice are also provided on the home page, through the Loss Prevention Bulletin service. This is a weekly update on hazards reflecting correspondents’ and other Members’ experiences.

The website provides an ideal springboard into the domain of international shipping. The links page is a useful compendium of shipping companies, ports, trade and regulatory bodies and newspapers and journals.

While much of the above content is open to all, key service areas are maintained in an on-line services area, accessible only by password. You don’t have to be a Member to obtain a password but you do need to obtain a registration from the Club.

If you need assistance in accessing or navigating the UK Club website, call Philip Whitehouse at the Club’s London office, or e-mail him on philip.whitehouse@thomasmiller.com

TeamMail extends the service

e-mail has become a sufficiently widespread factor in transactions between Club Members and Managers and their agents for its further use to be encouraged.

Although the Club has been using e-mail internally since 1987, the past two years have seen a huge increase in the use of external e-mail via the Internet and other proprietary systems.

According to UK Club Service Director Herry Lawford: “We believe that e-mail is now sufficiently reliable for us to encourage Members, correspondents and others to take advantage of its low cost, speed and convenience.”

In most Managers offices, staff ensure that incoming e-mails are monitored regularly and acknowledged as soon as possible. To ensure that Members’ messages do not languish in individual mailboxes when staff are out, the Managers have put a ‘TeamMail’ system in place in the London and Sunderland offices and in the underwriting department. For other offices and departments, Members are reminded that individual e-mail addresses are typically . A full list of e-mail addresses for all staff is given in the Club’s List of Correspondents, in Making Contact and on the Club website at www.ukpandi.com The Managers internal aim is for messages to take no longer than 10 minutes to reach any addressee anywhere in the world. Those sent via the Internet, however, occasionally take some hours to reach the Managers. Members are advised to check mailboxes for messages from the system administrator in case a message has "bounced". It may have been wrongly addressed in some small particular; only those exactly addressed will get through. e-mail alone should still be regarded as inadequate for very urgent or important messages. Apart from the vagaries of the Internet, it is just possible that the relevant part of the Managers system might be down for maintenance or repair.

This has given rise to the following procedures: 1. e-mails should be addressed to Team Mailboxes. For example, the L1 group’s Team Mailbox will be: London1.ukclub@thomasmiller.com 2. The body text should include the same addressee and reference information as a fax. Where known, the case handler’s name and file reference should be used (as well as the Member’s) in addition to the full file heading. 3. Team Mailboxes will generate an automatic acknowledgement as soon as a message reaches the mailbox. At that point, the message will have been passed on to the addressee or someone else who will deal with it. 4. Internal procedures will require Miller’s to use its Team Mailboxes when responding to e-mails on case files.

Attachments to e-mails should if possible be Microsoft Office 97 or Lotus SmartSuite 97 compatible. Other applications may not be viewable on the Managers systems. Photographs should be sent in JPEG or GIF compression format. Questions or suggestions for improving e-mail communications would be welcomed by: e-mail administrator, administrator@thomasmiller.com.

Spill response services for dry cargo ships

The UK Club has arranged pre-contracted spill management and response facilities in the United States for its Members from the beginning of May. All Members with dry cargo vessels which trade to the United States and are insured for pollution risks have automatic access.

Spill managers Corbett & Holt of Washington DC and Concord, Massachussetts have been engaged to assist entered dry cargo ships involved in spills in the United States. The two largest US oil spill response organisations - Marine Spill Response Corporation and National Response Corporation - will provide spill response services. The scheme is not mandatory and Members can opt out if they have alternative spill managers.

Although there is no legal requirement for dry cargo ships trading to the United States to make advance arrangements to deal with spills, their absence can cause delays and additional expense. The UK Club’s facility will enable owners to take immediate action to manage any pollution incident cost effectively and responsibly.

Nigel Carden, Claims Policy Director for the Managers explains: The management of the early stages of an incident is crucial for minimising environmental damage and controlling clean up costs. The new arrangements will enable our Members to react quickly in pollution incidents.

The Club is also reviewing proposed regulations relating to oil spill contingency response plans for dry cargo ships which trade to California, due to take effect from 1 September 1999. Owners will be required to have such plans approved by the California Office of Oil Spill Prevention and Response (OSPR), from whom Certificates of Financial Responsibility (CoFRs) for US $300 million must also be obtained.

The Club will encourage OSPR to make the response plan requirements more manageable for compliance purposes. Members will be aware of separate third party proposals for a statewide response plan which could facilitate certain aspects of compliance. However, the OSPR regulations contain many requirements which remain specific to the owner or operator of the vessel and are not included in the elements which can be addressed in a statewide plan.

Mr Carden has advised Members, therefore, to await publication of final regulations and further guidance before making firm decisions on achieving compliance.

Similarly, owners and operators of non-tank vessels will also have to obtain CoFRs from OSPR from 1st September. They have indicated that the procedure for obtaining them will be similar to that which already exists in California for tankers. OSPR is expected to issue CoFRs when owners produce Club Certificates of Entry.

Tankers: general average extension

A change to the pollution Rule excludes reimbursement of sums which would have been recoverable in general average had the owner contracted on terms equivalent to the York-Antwerp Rules 1994 (YAR 1994). This relates to efforts by tanker charterers to impose clauses upon owners forcing them to bear the costs of preventing or minimising environmental damage even where such costs were recoverable from the charterer under YAR 1994. The exclusion relates to incidents occurring after 20 February 1999.

Members waiving their G/A recovery rights in relation to these risks will be able to buy additional special cover from the ground up. This cover has a limit of $10 million and is now available for $1600 per voyage. It protects against pollution risks excluded by the new proviso to the pollution rule (Rule 2, section 12). Detailed terms are available from the underwriting department in London.

The Club continues to support owners in opposing efforts by charterers to alter the liability balance reflected in the York-Antwerp Rules. Owners are therefore recommended to decline charterparty clauses in which rights of recovery in general average are waived. However, the Club recognises that some owners may agree such clauses for commercial reasons and the Club is therefore making available special cover at competitive rates to those who need it.

Club Rules and Correspondents books combined

The Club’s List of Correspondents and the 1999 Rules and Bye-Laws have been published by the Club and sent to Members. The book lists key contacts in the Club’s regional offices and the extensive Correspondents’ network. There is guidance on electronic communication via the Internet. The Club Rules and Bye-laws are separated for easy reference. The cover follows the Club’s new design style, as per UK Club News and Making Contact. If you have any views about this new format, please contact Nick Whitear, Marketing Director Thomas Miller P&I Ltd.

Crew medicals produce major savings

The UK P&I Club’s pre-entry medical examination (PEME) scheme is proving highly successful in screening applicants whose health is not good enough to allow them to serve as crew aboard Members’ ships. In the two and a half years since its inception, over 5,000 crew candidates have been processed and over six per cent have been rejected.

Several owners with passenger, bulk carrier and other fleets subscribe to the scheme, which lays down exacting criteria in respect of infectious tropical and other diseases, and a range of disorders. Applicants are required to undergo tests for AIDS, liver and lung functions, hepatitis A and B, and full blood count.

The main grounds for rejection have been liver disorders, followed by hepatitis B, high blood pressure, TB, diabetes, lung, heart and renal problems, and hearing loss.

When a crewman falls ill on board, the employer may be required to foot the bill for medical and related costs at the port of disembarkation and the seaman’s home port, and for repatriation, substitution, sickness wages and compensation.

During the period 1994 to 1997, P&I clubs in the International Group are estimated to have paid out US $25.5 million as a consequence of ill health becoming manifest on board ship. In 1996, the Philippines, which supplies more than 20 per cent of the world’s seafarers, accounted for over US $7 million of that total. The real costs might be considerably higher as many repatriation claims fall below the P&I clubs’ deductibles.

Against this background, the scheme was launched in the Philippines in August 1996. Over time, that country’s medical examination standards have not prevented a consistently disproportionate level of subsequent illnesses and repatriation among Filipino seamen. Three Manila clinics were commissioned by the UK Club, on behalf of owners, to carry out examinations according to guidelines and standards taken from the Merchant Shipping Notice M 331, issued by the UK’s Department of Transport.

In the first two years, some 2,700 Filipino applications produced an eight per cent rejection rate, in particular through hepatitis B, renal problems and high blood pressure.

Since then, the number of shipowners supporting the scheme has increased quite considerably and clinics have been added in India, Croatia, Thailand and the United Kingdom.

Over the next 12 months, the UK Club expects some 8,000 people to be examined in the participating countries and in new ones. Ireland, the Ukraine, the Netherlands and some Caribbean countries are under consideration.

The Club is looking into more stringent medical tests, finding and briefing appropriate clinics, strengthening participating membership and maintaining a database.

The Club estimates the direct costs of the scheme so far at over US $400,000 - $80 for each of 5,000 examinations. Since nearly all those rejected (over 300) would have to be repatriated at some time anyway, an estimated cost of US $10,000 to US $25,000 per head produces huge savings many times the cost of the scheme.

“We do not need to be that specific about the savings,” says Kit Chan, who co-ordinates the scheme for the UK Clubs Managers. “We have already proved that they have been considerable. Extending PEME into more fleets in the same countries and in new states will produce more and more savings.

“We will continue to concentrate on the Philippines and a number of other countries where the medical and repatriation costs are particularly high. We will also be developing the scheme in terms of criteria and standards encouraging Members to join, especially those running passenger vessels and other ships with high crew complements.”

What PEME looks for The PEME scheme works on the basic principle that it is better to exclude an applicant at an initial examination if there is any doubt about his continuing fitness. The participating clinics need to be satisfied in each case that no disease or defect is present which could be aggravated by working at sea or represents an unacceptable health risk to the individual or to others. A seaman is deemed unfit if suffering from: infectious diseases malignant neoplasms endocrine and metabolic diseases diseases of the blood disorders of the nervous, cardiovascular, respiratory, digestive, urinary or musculo-skeletal systems tropical diseases mental disorders skin conditions eyesight deficiencies.