LP News Issue 15 - October 2002

US proposals respond to maritime threat

"Transportation by sea has always held inherent danger, but the risks of terrorist attack by maritime venture will pose serious concerns to vessel operators as new legislation imposes additional duties."

'Suspicious sounds' in the cargo hold were enough to compel the US Coast Guard in Newark, NJ, to detain the Liberian-flagged container ship Palermo Senator six nautical miles offshore while the FBI and Department of Energy conducted further examination. While no stowaways were found, the Coast Guard determined the cargo on that vessel posed a potential risk to public safety, as traces of radiation were detected. The vessel, carrying 655 containers, had arrived in Newark from Valencia, Spain, after recent port calls in Saudi Arabia and the United Arab Emirates. The Coast Guard also established a three-tiered security zone around the vessel and warned that violators were "subject to a penalty of up to $50,000, imprisonment for not more than five years, or both." Even though no planned terrorist attack was found, US authorities' quick reaction to those initial 'suspicious sounds' evidences a new system of seaboard security in a post 'September 11' world.

A year after the attacks, it is clear that the American perspective on global terrorism has forever changed. But it was not the nation's first wake-up call. For example, the terrorist hijacking of the Achille Lauro, which began on October 7, 1985 off the coast of Egypt, made world-wide news when Palestinian terrorists seized the cruise ship, held the crew and some of the passengers hostage and killed an American passenger. Following that attack, an American appellate court warned that "American passengers simply do not carry American public policy on their backs wheresoever they may venture." Hodes v. S.N.C. Achille Lauro ed Altri-Gestione, 858 F.2d 905, 915 (3rd Cir. 1998). Americans now must be cautious in defending liberty against foreign-based terrorism venturing to US shores. The American system of commercial transportation, which had contributed largely to the nation's growth and prosperity, could be abused to create mass destruction and loss of life not only aboard ship but also in the country's own harbours.

With the renewed reality of marine-related terrorism and the events of September 11, the US Government as well as the maritime industry are responding with swift proposals. For example, under the proposed Comprehensive Seaport and Container Security Act of 2002, American Customs agents will be granted new powers to police NVOCCs and inspect outgoing cargo at foreign facilities. For ocean shippers, the proposed legislation significantly shifts the responsibility to license and regulate ocean transport intermediary services from the Federal Maritime Commission to US Customs. In addition, the proposed bill requires the pilot, master, operator, or owner (or the authorised agent of such owner or operator) of every vessel required to make entry or obtain clearance under the customs laws of the United States to transmit electronically a cargo manifest within 24 hours of departing for a US port. Violation of the proposed law would result in criminal penalties.

Security concerns are also being raised with respect to controlling crews while vessels are at US ports. The US State Department has proposed to eliminate crew list visas, which are commonly used to allow foreign seafarers shore leave. Likewise, the US Immigration and Naturalization Service and US Coast Guard have asked shipowners to employ and pay tens of thousands of dollars for mandatory armed security guards for ships docked at US ports. They have also denied certain crewmembers, mostly Pakistanis and those from other Middle Eastern countries, permission to enter the US. The US Maritime Administration is working at the international and domestic level to develop 'smart card' technology to provide a reliable secure transportation worker identification system, track employment records, minimise fraudulent documentation, and facilitate access to secured areas.

To pay for these new security measures, some US legislators have outlined details of a port security tax. For example, the proposed charge for an average 75,000-tonne crude oil delivery translates into a $22,000 charge to charterers per ship call. The tax also include a $15 per TEC on containers, $.45 per tonne for crude oil, and $.01 per tonne for dry bulk cargo. The new security does not come without costs.

In addition to the governmental response, private action has been initiated to address cargo and port safety. Hutchison Whampoa Ltd, PSA Corporation Ltd., and P&O Ports announced that the three port operators, who together control 70% of the world's container traffic, will pool resources to deploy automatic tracking detection and security technology for containers entering the US. Driven and initially funded by industry, this initiative called "Smart and Secure Tradelanes" (SST), will focus on container security and tracking and will be built on existing infrastructure and technologies. Phase One SST will deploy baseline infrastructure, hardware (including electronic seals, sensor devices and sophisticated scanners) and web-based software to secure and track containers in real time. The SST deployment also calls for an integrated security and container security system to register individuals, authorise roles, and capture tracking and security events throughout the supply chain. Containers will be tracked and automatically authenticated from the point of manufacturing, port of loading, transshipment port and to final discharge in the US.

Increased security measures may assist in limiting terrorism, but they are not likely to eliminate it. The events of a year ago brought the issue of fighting terrorism to the forefront of the American consciousness and the nation's government policy agenda. Transportation by sea has always held inherent danger, but the risks of terrorist attack by maritime venture will pose serious concerns to vessel operators as new legislation imposes additional duties. While the effectiveness of such measures remains to be tested, Members should nevertheless continue to consult with the Club and its correspondents to ensure they are meeting the regulations and are aware of any local rules affecting their day-to-day operations.

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HONG KONG

Enforcement of foreign judgements

The very nature of a contract of international carriage of goods, and in particular, a choice of law and jurisdiction clause under it, may sometimes render a judgement necessarily having to be obtained in a foreign country and only to be enforced at home subsequently.

The following passage considers the civil procedural rules and instruments of Hong Kong in relation to enforcement of a foreign judgement. Regard is also given to the changes brought about after the handover of Hong Kong to the People's Republic of China after 1 July 1997. A special reference is also made with respect to the reciprocal position of UK-Hong Kong judgements' enforcement.

Under the present law of Hong Kong, having obtained a civil judgement in a foreign country, it may be enforced in one of three ways:

1. to register the foreign judgement with the Hong Kong court pursuant to the Foreign Judgements (Reciprocal Enforcement) Ordinance (Cap. 39) and enforce it as if it is a Hong Kong judgement 'statutory method'; or

2. to commence a separate action with the foreign judgement being itself the cause of action 'enforcement in common law'; or

3. given the inapplicability of (1) and (2), to start the original cause of action afresh in Hong Kong.

The first/statutory method is quicker, cheaper, and can avoid the potential delay brought about by a challenging and dissenting judgement debtor, vis-à-vis the situation in (2) or (3) when a litigation is instituted.

The third option is obviously the least preferable as in corollary it is saying that the foreign judgement obtained is simply a futility. The risk of the case - mostly under contracts of international carriage of goods - being time-barred already is also likely.

A) Statutory registration:

As to the statutory method, basically a foreign judgement can be registered in Hong Kong only if there are reciprocal arrangements for the recognition and enforcement of Hong Kong judgements between Hong Kong and that foreign country, as is provided in the Foreign Judgements (Reciprocal Enforcement) Ordinance, in pursuance to the Rules of the High Court (Order 71).

A schedule attached to the Foreign Judgements (Reciprocal Enforcement) Ordinance lists those countries with whom Hong Kong has a reciprocal status for registration/enforcement of judgements; notably, the Commonwealth countries.

For UK judgements and the present position, please see section (C).

It is noteworthy that all along, the People's Republic of China (even after the handover) and the United States do not enjoy the status of judgement registration in Hong Kong.

B) Reciprocal enforcement in common law:

In common law - method (2) - a foreign judgement is considered to constitute an enforceable debt between the judgement creditor and the judgement debtor. As such, the Hong Kong court will not allow defences to be entered against the merits of the case itself (which is taken to have been judged in the foreign country).

To satisfy the Hong Kong judiciary, the applicant must overcome the restrictions laid down by The Foreign Judgement (Restriction on Recognition and Enforcement) Ordinance Cap. 46 (which is equally applicable to the statutory means), such that:

1. the judgement so obtained under the foreign jurisdiction/proceedings is not in breach of/or contrary to a valid and agreed dispute resolution clause under the contract (i.e. an exclusive Hong Kong law and jurisdiction clause); or

2. the judgement debtor (in Hong Kong) has brought to, or agreed to, or submitted themselves to the bringing of that foreign jurisdiction or those proceedings.

A foreign judgement will not be enforceable if both (1) and (2) are not satisfied.

Certain steps/actions are not to be taken as submission to the foreign jurisdiction as to (2), namely: filing a dispute against the foreign jurisdiction; applying for a stay of the foreign proceedings for the purpose of arbitration; protecting/obtaining release of property seized or threatened within the foreign proceedings.

C) Post handover changes:

Prior to 1 July 1997, UK judgements were enforceable in Hong Kong by virtue of the Judgement (Facilities for Enforcement) Ordinance Cap. 9 by way of registration within one year. The registration, however, did not require reciprocity.

The Hong Kong Reunification Ordinance after the handover states, however, that any provisions conferring privileges upon the UK or other Commonwealth countries or territories (other than those providing for reciprocal arrangements) shall have no further effect.

In the past, Hong Kong judgements were enforceable in the UK on the basis that Hong Kong was part of the Commonwealth. As from 1 July 1997, Hong Kong's Commonwealth status deceased, it seems Hong Kong judgements are no longer readily enforced in the UK. With that lack of reciprocity, as now being required by virtue of changes made by the Reunification Ordinance, UK judgements by means of registration ceases to be effective.

As a matter of principle, the Foreign Judgement (Restriction on Recognition and Enforcement) Ordinance is still applicable to the Commonwealth countries provided reciprocity is respected and enforced.

At present, the countries that have given a positive reply to the Hong Kong Department of Justice initiative for enforcement reciprocity, to the effect that their judgements are recognised as reciprocal in Hong Kong are: Australia, New Zealand, Israel, Germany, Singapore, Belgium, France, Italy, the Netherlands.

D) Recommendations:

1. always pay attention to any choice of exclusive law and jurisdiction clause under a contract of international carriage of goods;

2. never act to agree or submit any foreign proceedings which you do not intend and/or agree. Usually filing of a jurisdiction dispute is the most unequivocal representation of non-submission (especially if you want to circumvent the risk of non-acknowledgement of a service of summon from a foreign country).

PANAMA

Supreme Court affirms decision

The Supreme Court recently affirmed a decision by the First Maritime Court of Panama wherein that Court refused to decline jurisdiction on the basis of forum non conveniens. The lower Court also refused to honour the validity of the releases executed by the heirs of the deceased crew members. Respecting the release question, the Supreme Court held that it was premature for the Maritime Court to have ruled on the validity of the releases at this time but should have deferred such decision pending a trial on the merits. The High Court drew a distinction between this case and others it had already decided involving the validity of releases, in that a point as raised in the plaintiffs' complaint sought a declaratory judgement holding the releases null and void because of alleged undue influence, fraud, lack of informed consent, etc.

The Supreme Court pointed out that in this case, the plaintiffs did not sue the employer of the deceased crew members, but rather they brought the action against the interest of the colliding vessel with whom there existed no contract of employment (POEA). The High Court went on to observe that any attempt by defendant to invoke as a defence the forum selection or jurisdictional clause in the employment contract would not prosper in this case, since there was no contractual relationship between the deceased crew members and the defendant.

Respecting the forum non conveniens aspect, the High Court held that the lower Court was correct in refusing to decline jurisdiction because it was not satisfied that the taking of proof, production of witnesses and experts as well as the need for judicial or other inspections, would be extremely onerous for the parties. The Court considered that there are sufficient mechanisms in the Code of Maritime Procedure to accomplish those ends. As a consequence of this decision, the case will have to be tried on its merits at which time the defendant can reassert its defence as to the existence of valid releases.

Court rules against claimant

In probably the first decision involving claims by Filipino crewmember since its creation, the 2nd Maritime Court of Panama, refused to decline jurisdiction on the basis of forum non conveniens and held that the arguments advanced in support of such declination were not sufficiently convincing in the light of the procedures provided in the Maritime Code. The Court did however, order the case returned to the Philippines on the basis of the forum selection clause in the contract of employment, as well as on the defence of lis pendens based on the fact that there is a similar action pending between plaintiff and his employer - the shipowner or its agents - in the Philippines.

In enforcing the forum selection clause, the Court found that the parties (plaintiff and his employer - the shipowner or its agents) had entered into a contract in which they had agreed to the jurisdiction to which they would submit any controversy flowing from such contract, and thus their intention should be respected barring any extraordinary circumstances, which did not apply to this case.

Finally, the Court ordered that the security initially posted for the release of the vessel from arrest in Panama, was to be retained by the Court pending the finalisation of the proceedings in the Philippine Courts.

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DISCRIMINATION CLAIMS

Americans with Disabilities Act

A Texas federal judge's ruling allowed the discrimination claims of disabled cruise line passengers to go forward against a Scandinavian cruise operator operating out of the port of Houston USA.

In a September 9, 2002 ruling, US District Judge John D Rainey rejected the foreign owned but Miami based cruise line's argument that foreign-flagged ships do not have to comply with the Americans with Disabilities Act (ADA).

According to the plaintiffs in the case, it is alleged the cruise ships that sailed out of the Port of Houston denied mobility-impaired passengers access to programmes, services and facilities available to other passengers. In addition they also charged surcharges for use of accessible cabins and for assistance from crewmembers. It was also claimed that the cruise operator is headquartered in Miami, and that the vast majority of its cruises are purchased by Americans.

Litigation continues and any further developments will be reported in future editions of Loss Prevention News.

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PERSONAL INJURY CLAIMS

Hydrogen sulphide alert

"While the dangers relating to hydrogen sulphide (H₂S) are not new there is a growing body of evidence suggesting that H₂S levels in some crude oils is on the increase. The reason for this apparent increase is unclear.

"H₂S is known to be present in crude oil exported from a number of countries including Iran, Qatar, South America, Mexico, Poland, Latvia, Russia and Turkey. Recently higher than normal amounts have been detected in Brent crude and within the last few days very significant amounts of H₂S have been found in the ullage spaces of two tankers loading fuel oil cargo at Jubail in the Arabian Gulf.

Terminal operators should remain alert to the dangers posed by the presence of H₂S, either within cargoes being delivered or remaining within the residues from a previous cargo. The precautions and procedures described within ISGOTT must be strictly adhered to.

"The advent of inert gas and closed loading systems has largely negated the need to open tanks except for non-routine purposes, although reducing tank pressures to near zero for sampling is a relatively common practice.

"Purging for cargo preparation is also common, thus the planned release of the entire tank atmosphere, particularly where unexpectedly high levels of H₂S are involved, poses a significant danger to individuals in the immediate and, in some cases, the not so immediate, area.

Some countries, particularly in Europe, have already stipulated maximum H₂S levels in tanks prior to loading and some terminal operators, most recently BP, have reduced their acceptable arrival levels from 10ppm to 5ppm.

"In view of the above, we believe that it is sensible to encourage all crude vessels to monitor tank atmospheres and to advise of H₂S levels in order that terminal operators may gauge the magnitude of what is clearly a growing problem. In addition, it may be prudent to encourage the monitoring of fuel oil vessels from areas which historically are known to pose a problem, such as, Jubail. Regarding measurement, please be aware that while Draeger type tubes provide an accurate indication of H₂S levels regardless of whether the tank atmosphere is inerted or not, H₂S readings taken with an electronic meter in an inerted atmosphere do not.

"Readers are asked to take note of the above and to advise operational staff, surveyors and other relevant personnel accordingly."

The Club has also been advised that in some cases shore installations have been turning away fuel oil stock with H₂S. It is believed these stocks could be finding their way into the bunker stream thereby affecting all Members not just tanker operators.

Most people know H₂S by its rotten egg smell, however crew should be reminded that it could be fatal to rely on this method of detection as H₂S deadens the sense of smell very quickly. A more reliable method of determining concentrations of H₂S is by the use of Draeger type tubes or by the use of personal warning monitors.

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CALIFORNIA - USA

New non-tank vessel salvage requirements

Many Members will have heard from their spill managers that the California contingency plan regulations regarding salvage, firefighting and emergency lightering requirements for non-tank vessels trading to the State will become effective on 28 October 2002.

The main feature of the requirements is for the planholder to sign a contract with a salvage company which has the appropriate expertise and available equipment to respond within the required time frame. The California Office of Spill Prevention and Response (OSPR) announced on 20 September 2002 that they would accept the alternative of a Letter of Intent, signed by the salvage, firefighting and emergency lightering service provider, as evidence of compliance with their Non-tank Vessel Contingency Plan (C-Plan) regulations. A copy of the Letter of Intent or Contract must be submitted to OSPR for each Contingency Plan.

There are four salvors which provide the services as required by the regulations. Their contact details and their fee schedules are listed below:

Salvage Company	Vessel type	2003 Annual Fee
Company: Donjon Marine Contact: John L. Witte, Jr. Phone: 1 908 353 2600 Fax: 1 908 353 2710 Website: www.donjon.com	Tank Ships Tank Barges Non-tank ships	$475/vsl/yr $225/vsl/yr $200/vsl/yr
Company: National Fire & Salvage Team (N-FAST) Contact: Scott Powell Phone: 1 281 288 5200 Fax: 1 281 528 6400 Website: www.foss.com	Tank Ships Tank Barges Non-tank ships	$400/vsl/yr $300/vsl/yr $150/vsl/yr
Company: Marine Response Alliance (MRA) Contact: Jeff Taylor Phone: 1 206 443 7808 Fax: 1 206 443 8026 Website: www.marineresponsealliance.com	Tank Ships Tank Barges Non-tank ships	$500/vsl/yr $300/vsl/yr $150/vsl/yr
Company: Resolve Marine Group (RMG) Contact: Joseph Farrell Phone: 1 954 764 8700 Fax: 1 954 764 8724 Website: www.resolvemarinegroup.com	Tank Ships Tank Barges Non-tank ships	$300/vsl/yr $200/vsl/yr $100/vsl/yr (no fee for 2002)

Members with non-tank vessels trading to California should therefore liaise with their spill manager to ensure that appropriate arrangements can be made with a chosen salvage company to comply with the new requirements of the California law.

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UNITED STATES OF AMERICA

Oily water separation equipment

The US Coast Guard has recently established an Oily Water Separation Systems Task Force (OWSSTF) to examine a wide range of issues related to oily water separation equipment and its use on vessels in US waters. Coast Guard personnel and other law enforcement personnel are scrutinising the use and functionality of oily water separation systems more carefully than ever before, and US authorities have made it clear that they will seek jail sentences for masters and chief engineers of ships committing pollution offences. Many times, even if no pollution incident has occurred, the Coast Guard and US prosecutors, upon the mere 'discovery' of flexible hose in the engine room, will commence a Grand Jury investigation seeking to prosecute an alleged illegal by-passing of the oily water separation system and/or the presentation of an oil record book containing 'false entries'.

US Government's modus operandi

Coast Guard investigators and prosecutors appear to have focused their efforts on alleged bypasses of shipboard oily water separation equipment through the use of flexible hoses and flanges in order to effect illegal overboard discharges. While the US has no jurisdiction over unauthorised discharges by foreign-flag vessels in international waters in violation of MARPOL, it does, indeed, vehemently investigate and prosecute false oil record book entries, obstruction of justice and witness tampering.

Criminal sanctions

There is a broad array of criminal sanctions available to the US government in the investigation and prosecution of cases involving a suspected criminal offence. Recently, there has been an exorbitant number of investigations regarding alleged MARPOL and other environ-mental offences. The United States treats such violations seriously, and has demonstrated that it will spare no expense in the investigation of such matters.

Recommendations for owners/operators/managers and shipboard personnel to avoid and respond to US authorities inspections and criminal investigations:

• Owners/operators/managers and shipboard personnel must, at all times, obey all international and US environmental regulations;
• As a matter of practice and procedure, all flanges should be removed from any flexible hoses maintained onboard vessels, so as to avoid creating wrongful suspicion of an illegal by-pass of the oily water separation equipment;
• Blank off any flanges located at or near the oily water separating equipment and overboard discharge valves, which may exist as original or modified construction, but are not used as a matter of course;
• All entries in the oil record book must be truthful, and in compliance with MARPOL requirements;
• All shipboard personnel must be truthful and forthcoming during all port state inspections;
• Owners/operators/managers must not attempt to influence officers and/or crew as to their discussions with the authorities, other than to insist that the officers and crew are honest and forthright with all authorities; and
• Legal assistance, including criminal counsel, must be engaged as soon as possible in order to assess the situation and provide advice to the owner/operators/managers/officers and crew, including engaging individual counsel for all officers and crew, as necessary and appropriate.

To clause or not to clause

It's not unusual to hear about pressure being put on the carrier to issue clean bills of lading. After all, if a bill is claused the requirements of the corresponding documentary credit will generally not be met, the seller of the cargo may not be paid and he will probably be in breach (possibly repudiatory breach) of the sale contract.

If the carrier succumbs and issues a clean bill when the goods are not in fact in apparent good order and condition when received by the vessel, he risks being found liable for defects actually in existence at that time. At least where the Hague Visby Rules apply, the issue of a clean bill is prima facie evidence of the carrier's receipt of the cargo in apparent good order and condition. When the bill has been transferred to a third party acting in good faith it is conclusive evidence of apparent good order and condition at that time.

It is often argued that, notwithstanding the issue of a clean bill, defects in goods existed when they were received by a vessel. It is not so common for the argument to be that the master claused the bill without a basis for doing so. However that was the situation in the David Agmashenebeli. (The David Agmashanebeli [2002] EWHC104 Commercial Court)

The facts

In May 1995, 33,319.98 tonnes of urea was shipped in bulk onboard the David Agmashenebeli, at Kotka for carriage to Beihai, China. There was a dispute over the fitness of the vessel's holds for loading. It seemed that the dispute was resolved by agreement that loading would commence on condition that the master would sign clean mates receipts, clean bills and a letter of indemnity.

However a dispute then arose about the condition of the cargo. The master protested about its moisture, colour and contamination. According to cargo interests' surveyors, based on random inspection and analysis results, its condition was normal and it had the correct colour.

The dispute was not resolved before the ship sailed from Kotka and the master endorsed the statement of facts "cargo discoloured, also foreign materials e.g. plastic, rust, rubber, stone, black particles found in cargo".

The mate's receipt was similarly claused. When the ship arrived at Beihai the bills had still not been issued but on the day the vessel arrived the bills were signed, claused with the same wording.

The consequences of the clausing included the rejection of the bills by the buyer's bank. The market price fell. Although the buyers eventually agreed to buy the cargo, they did so at a reduced price.

Clausing the bill

The main issue concerned the clausing of the bills of lading and the effect of Article III rule (3) of the Hague Visby Rules, (Article III rule (3) provides that "after receiving the goods into his charge the carrier or the master or agent of the carrier shall on demand of the shipper issue to the shipper a bill of lading showing among other things...(c) the apparent order and condition of the goods".) which the parties agreed were incorporated in the bills. The carrier is clearly under a duty to issue a bill showing the specified information, including the apparent order and condition of the goods. The question was whether this duty is a duty to:

• objectively and accurately describe the actual apparent order and condition of the cargo (as cargo interests argued); or
• describe the apparent order and condition of the goods as an ordinary and reasonably skilled master reasonably and honestly believed it to be (as the carrier argued).

The master is required to exercise his own judgment on the appearance of the cargo being loaded. If he honestly considers that it is not, or not all, in apparent good order and condition and his view could properly be held by a reasonably competent and observant master, then he is entitled to qualify the bill accordingly, even if not all or even most such masters would necessarily agree with him. He might wish to take expert advice but that is a matter for his judgment. In the normal case he is entitled to form his own opinion from his own observations. However, expressing an honest view of itself is not enough because if a master, however honestly, takes an eccentric view of the apparent condition of the cargo, which would not be shared by any other reasonably observant master, he would not be justified in issuing a bill which was qualified to reflect his view.

The wording of the clausing is also a matter for the master's judgment. However his duty is to use words which have a range of meaning which reflects reasonably closely the actual apparent order and condition of the cargo and the extent of any defective condition which he, as a reasonably observant master, considers it to have. (The word "actual" here surely refers to the carrier's duty as outlined above.)

The Judge found that, before loading, the cargo did include foreign matter but no more than about 0.01% or about 3mt and the total quantity of discoloured cargo was about 1%.

The contamination was so slight that no reasonably observant master would have referred to it in the mate's receipts. Although a reasonable master might have thought it appropriate to refer to the discolouration, it was misleading not to make clear that it only related to about 1% of the cargo. Any reasonably observant master would have made it clear that only a small proportion of the cargo was likely to be affected.

By using unqualified words as he did, the master misrepresented the apparent order and condition of the urea and the carrier was accordingly in breach of the duty imposed by Article III, rule 3.

The claimants did no better with the other ways they brought their claims. The Judge considered that it would not be fair, just and reasonable to add any duty of care which might impose a stricter obligation on the master. He also disagreed that a contractual term should be implied that the master would only sign bills which accurately stated the apparent order and condition of the goods. He considered that, where the Hague Visby Rules apply, there is no need to imply a term imposing a duty higher than the duty imposed by Article III rule (3). Nor was a higher duty justified by a bailment relationship. The issue of a bill is purely ancillary to the bailment and has no bearing on the care of the goods and there is no reason why it should attract the duty of care imposed on the bailee.

It was not open to the master to conclude that the whole of the cargo was not in apparent order and condition because a small proportion was discoloured or because a great proportion was "off white" and the mate's receipt stated it to be "white".

However any reasonably observant master would have been bound to record that the urea was not entirely white in colour and would have been more likely than not to clause the bills to record the discolouration of a (small) proportion of the cargo.

The Judge accordingly concluded that if the master had fulfilled his duties under Article III, rule 3, he would have claused the bills, not by reference to contaminants but to partial discolouration. Consequently the claimants failed to prove that the master's breach of Article III, rule 3, caused them any loss.

While the tests applied by the Judge seem to comply with good sense, they may yet be challenged particularly in view of the comments which were made by the Court of Appeal in the Arctic Trader. On this occasion the Judge was able to hold that these comments were not binding upon him but the debate over the master's duties to clause or not to clause and if so, how, may not be over yet.

The question which arose there was whether owners owed an implied contractual duty to charterers to exercise reasonable care when signing mates receipts or bills of lading.

The answer was that the owners did not owe such duty. However, Evans LJ considered that the masters' duty under Article III, rule 3

"requires an accurate statement of fact...It is moreover, in our judgment, an unqualified or 'absolute' contractual undertaking, not merely one which the shipowner, or the master, must take reasonable care to perform".

Although these views were not binding on the Judge in the David Agmashenebeli, it is not unlikely that they will be referred to again and, when they are, they could be more sympathetically receive.

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Handle with care!

Following recent incidents with cargoes loaded in the former USSR, the People's Republic of China and Egypt, the following guidance is issued to Members.

Scrap metal consignments from the above areas may be contaminated with radioactive material. Members are advised to obtain clear written statements from consignors in these areas that they have carried out a thorough survey and that the consignment does not contain such material. If a Member is unsure about the possible presence of radioactive contamination then a radiation survey should be requested before loading.

Members should be aware that in most countries the facilities which process scrap metal are fitted with sensitive radiation detectors and all incoming vehicles have to pass through these before the load is accepted.

There are also many ports which have fixed and mobile radiation detection equipment. It is therefore likely that any consignment that is radioactive will be detected after unloading from a vessel.

There are two principal sources of scrap metal which can give rise to radioactive contamination but it should be stressed that the levels of contamination are usually so low that they do not present a hazard to the ships crew.

Firstly scrap metal which has arisen from military facilities may contain traces of Tritium, Radium 226 and other isotopes which are used in military instruments. In addition, pipework and metal which has been used in the nuclear power industry may become mildly radioactive due to the activation of Cobalt 60 in the steel as the result of radiation.

Secondly, pipework from oil well drilling has a tendency to concentrate the natural radioactivity which is present in seabed mud.

In both cases these scrap metals may be carried without hazard providing they are correctly declared, packed and labelled in accordance with IAEA Transport Regulations. At the low levels usually encountered, many of these consignments could be carried unpackaged and would not require labelling as long as there would be no escape of the radioactive contents from the conveyance during routine transport. If items such as pipework are being sent to a facility which cleans them and returns them to use, then clearly the consignment is not radioactive waste. If it falls within the definition of 'excepted matter' it may be carried without affecting P&I Club cover.

However if such a consignment of radioactive material is waste for disposal it cannot be 'excepted matter' and the exclusion of nuclear risks set out in Rule 5f will apply. In that case Members should check whether they are protected by a nuclear liability insurance arranged by the consignor.

If Members carry consignments of scrap metal they are advised to consider the purchase and use of a simple hand-held gamma radiation monitoring instrument if they have any doubt about the authenticity of the cargo declaration or the source of the material.

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DAR ES SALAAM - TANZANIA

Weighbridge accuracy

The photographs, above and below, highlight a novel way of saving time on a weighbridge not long enough to take a complete articulated unit.

We are advised that instead of uncoupling the trailer the front end of the unit is weighed, the unit then drives through leaving the rear axle on and another reading taken. The readings are then added together. This is done both empty and full the difference being the weight of the commodity.

The Club strongly recommends that:

• Members be aware that port weighbridge figures in Dar Es Salaam could be suspect.
• Members should contact the Club's correspondent if outturn figures are to be based on weighbridge calculations alone.
• Members should make charterers aware that there could be a problem with outturn figures in this port.
• As a general rule:
  • Members should always make sure, if possible, hatches are sealed prior to leaving the load port in the presence of a third party surveyor.
  • Invite charterers/receivers to attend at the discharge port to witness the seal breaking.
  • Always conduct an independent draft survey, inviting charterers/receivers to attend.
  • Closely monitor any spillage at time of discharge, keeping photographic and written evidence. If spillage is excessive contact the Club's correspondent.
  • If Members are faced with shortage claims based on weighbridge figures it is essential for weighbridge calibration records to be checked. The actual method of use of the weighbridge itself should also be checked for irregular practices as above.

Hatch coaming drains

Hatch coaming drains are still proving to be one of the major sources of ingress of water into a vessel's holds, from which there can be virtually no heavy weather defence if they are either missing or defective in some way. Usually fitted at the aft two corners of the hatch coamings, the drains are basically provided to allow water that manages to pass through the hatchcover sealing gasket, to run aft, along the coaming channels, and drain from the channel to the vessel's deck rather than entering the cargo hold below. Seas breaking on a vessel's decks however, frequently reach the height of the hatch coaming, and unless some means is provided to close the drain, water will pass up the drain, fill the channel and from there pass to the cargo hold below. On large vessels, there may also be drains fitted at the forward ends of the coamings in additional to those aft.

Non-standard hatch coaming drain

Lloyd's Rules 2002 specify

4.2.9 Drain openings are to be arranged at the ends of drain channels and are to be provided with effective means for preventing ingress of water from outside.

(c) Where the drains are not provided with an approved automatic means of preventing water entering the hold, the drains are to be capable of being closed by a screw plug or cap which is to be attached by a strong keep chain to the drain.

8.1.2 Drain openings are to be arranged at the ends of drain channels and to be provided with efficient means for preventing ingress of water from outside, such as non-return valves or equivalent.

It is essential therefore, that whatever approved device is fitted at the drains, it is in position and fully operational at the commencement of the voyage. Water ingress arising from wasted or missing sections of non return ball valve arrangements, open pipes, or even hardened lengths of canvas hose, cannot usually be defended as damages arising from heavy weather. Even if only a small amount of seawater gains ingress through such openings, the claims by cargo interests, particularly in respect of damages to bulk cereal products, can and will be substantial.

Well-maintained hatch coaming drain

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SANTOS - BRAZIL

Theft from containers

The seals on the containers were checked immediately before loading in the United States and checked again immediately upon landing at Santos. In two cases, the seals on landing were found to be different and in one case no seal at all was present. In one case, later in the day, a routine check by Brazilian Customs on empty containers discharged from the same vessel found most of the missing cargo from one of the boxes.

The Club's investigative unit, Signum Services Limited, found that the cargo being shipped was carried in cartons 205mm x 250mm x 485mm and that when the loaded containers, all stowed below deck, were in their stowage positions there existed a gap of between 250mm and 300mm between the container doors, a steel walkway and safety railings in the hold. This gap enabled the doors of the container to be opened sufficiently for a man to enter the container and the cartons of computer equipment passed out through the open door.

Further investigations showed that in the case of the two containers examined routinely by Customs these had been stowed immediately adjacent to one of the containers from which cargo had been stolen. In the other two cases, empty containers had either been stowed adjacent or nearby.

It was clear from all the enquiries that stevedores at the port were obtaining details of containers stuffed with this valuable cargo which were due to be discharged and also the stowage positions of empty boxes which were also scheduled to be landed at Santos.

During the twelve or more hours between the time that the vessels came alongside and the boxes in question were actually discharged, the stevedores were busy in the holds below deck, out of view, stripping the contents of full containers and putting them in empties which could later be taken out of the terminal without the stringent security measures applied to loaded boxes.

The vessels' agents have placed security guards onboard whilst the vessel is in port but it will be difficult for these guards to prevent this type of theft.

Signum have recommended that, if possible, 20-foot boxes instead of the usual 40-foot be used to carry this cargo and the containers stowed door to door, above deck on tiers 86 and 88, in order that it is impossible to open the doors. Even if 40-foot containers are used, these too should be stowed on the third or fourth tier above deck.

With the stevedores at this port now knowing that they can open container doors up to 300mm whilst they are stowed in the racks below deck and the fact that the cargo is being stolen onboard before passing over the ship's rail, it is important that empty containers are, if possible, stowed above deck in higher tiers to prevent other cargo which could be passed through this relatively small gap being stolen.

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SOMALIA

Hijacking

A recent hijacking of a 14,921 gt bulk carrier off the northern Somalian coast has highlighted the increasing threat of piracy to commercial shipping in this area. The ship developed engine problems and due to adverse weather was forced to find the nearest suitable anchorage point to undertake some relatively minor repair work about 6 nm off the Somalian coast. Within a few hours the ship was boarded by gunmen who overwhelmed the crew and there followed twenty-two days of tense negotiations. The ship was eventually released but only after a payment was made to the local warlord and the German navy provided an escort back to international waters. Experienced professionals have suggested that the owners were extremely fortunate to get the ship out this quickly without any of the crew being harmed or even killed.

It is the first time that a ship of this size is known to have been seized and is an indication that the pirates will no longer limit themselves to yachts and brown water craft. To this extent, the IMB has now warned that the risk of an attack to vessels straying near to Somalia's coast has increased from "one of possibility to a certainty". The threat is particularly acute in the north eastern region of Somalia called Puntland, which has unilaterally declared independence from the Government in Mogadishu. A recent spate of attacks on ships, has been concentrated near the town of Bossaso where competing warlords have been engaged in a civil war for the past two years. This area is perhaps the poorest and most lawless in Somalia and kidnap and ransom demands have clearly become an easy and lucrative means of obtaining much needed US dollars to fund their war-chests.

It is therefore the recommendation of the Club that all masters passing through the Gulf of Aden are instructed to keep at least 50 nm from the coast of Somalia otherwise they face a very real threat of being hijacked. They should be made fully aware of the risks that are associated with sailing any closer.

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CHINA

Fumigation of wood shipments

The Chinese government has recently published a new regulation on the fumigation of wooden packaging for shipment to mainland China, which took effect as from 1 October 2002.

A pest-risk analysis by China's packaging experts shows that wooden crates for goods from the EU have been found to contain various pests that are dangerous to forests, such as the cerambycide, scolytidae, bostrychidae and rhinotermitidae etc. With the aim of protecting China's forests, ecological environment and tourism resources, in accordance with the provisions of the People's Republic of China's law on the entry and exit quarantine of animals and plants and its implementing rules, the following emergency quarantine measures must be taken:

• The wooden packaging for goods from the EU must be bark-free, heat- or fume-treated or processed with other methods acknowledged by the Chinese authorities, and carry an official certificate from the quarantine authority of the exporting country approving the above quarantine treatment. Treated wooden packaging must be labelled, indicating the method, place and the unit that applied the treatment or its code. The technical requirements of the treatment should be published separately. For goods with non-wooden packaging, exporters must present a Non-wooden Packaging Declaration.
• When goods from the EU enter China, importers must report to the entry and exit inspection and quarantine authority and present a plant quarantine certificate or a Non-wooden Packaging Declaration. The entry and exit inspection and quarantine authority will sample and inspect according to the relevant regulations.
• Packaging that qualifies will be issued an Entering Goods Pass. Disqualified packaging must undergo hazard-free treatment by the importers under the supervision of the inspection and quarantine authority or returned together with the goods.
• All the Customs at the border ports will tighten up the inspection and supervision of the goods from the European Union. Whether or not the entry and exit inspection and quarantine authority lists the goods from the EU on the List of Commodities Subject to Inspection and Quarantine, the Customs will check for an additional Entering Goods Pass issued by the entry and exit inspection and quarantine authority. With regard to goods applying for port transfer, the Customs of the transfer ports will check for the Entering Goods Pass issued by the local entry and exit inspection and quarantine authority before releasing the transferred goods.

The UK P&I Club would like to thank the following for contributions to Loss Prevention News:

US maritime security threat - Otis Felder, Attorney of Kaye, Rose & Maltzman, Los Angeles, California, USA

Supreme Court Panama - David Robles, Attorney of De Castro & Robles, Panama

Americans with Disabilities Act - Dan Tadros, Attorney of Chaffe, Mc Call, Phillips, Toler & Sarpy, New Orleans, USA

Hydrogen sulphide alert - Oil Companies International Marine Forum (OCIMF)

Oily water separation equipment - Fowler Rodriguez & Chalos, Attorneys, New Orleans, USA

To clause or not to clause - Hugh Dalzell, Solicitor of DLA Shipping and Marine Insurance Group, London, UK

Fumigation of wood shipments to China - Chen Xiangyong, Lawyer of Wang Jing & Co, Guangzhou, China