LP News Issue 17 - November 2004

IN THIS ISSUE:

• Accidents - are they avoidable?
• Cargo matters
• Stowaways
• Regulations
• Taking care
• P&I entry
• Case summaries
• Personal injury
• ISPS summary
• Miscellaneous
• SUPPLEMENT - ISPS ship security

Accidents - are they avoidable?

Taken from the UK Club's series of Human Factor seminars, presented to over 2,000 people worldwide. What is an accident? An accident or incident is an unplanned chain of events which has, or could have, caused injury or illness and/or damage to people, assets, the environment or reputation. Modern research has shown that the basic components of an accident can be shown as the simple 'formula':

And that by adding the concept of breached, or missing, controls and defences a simple accident can be shown diagrammatically (below).

But accidents are not as simple as this, because usually there are several breached or missing controls and defences. More importantly almost all accidents consist of a series of interlinking 'events', in which each event becomes either a new hazard or a new target in its own right. In the presence of further targets or hazards and new and further breaches of defences and controls, a second event is created and so on. During accident investigations it is not uncommon to identify five, six or even seven interlinking events before the final event or accident becomes a reality.

The concept of the 'event chain' or 'incident trajectory' is shown below.

Reverting to the simple accident diagram and the 'formula' in the text box on the front page, if one of the controls or defences had not been breached there would not have been an accident. If detected, the resultant 'near-miss' or 'dangerous occurrence' could still have been reported, investigated and acted upon as if it were the real thing.

The usual mechanism, whereby controls and defences are breached, is an unsafe act by an individual at the sharp end. Occasionally, they may be breached by an inherent unsafe condition but these too will invariably have been caused by the acts or omissions of people, which may be nothing more than a simple and unintentional mistake. Such unsafe acts or unsafe conditions are generally referred to as active failures.

While active failures are interesting - indeed much can be learnt from them - a lot more can be learnt, and more effective remedial measures put in place, by addressing the sick camel in the first place.

Conventional wisdom (below), dictates that in order for an accident to happen, defences of some kind will have been breached, usually by an unsafe act, carried out in a specific situation and in the presence of hazards of some kind.

What changed this long-established view, which as a basis for the new model is still correct, was some highly original research sponsored by one of the oil-majors and carried out at two major universities, one in the UK and one in the Netherlands. The research originally set out to establish the role of the human being in the accident equation but very quickly established an 'alternative' theory of accident causation. Because of the triangular shape of the basic model of the theory, it became known as the 'Tripodian' view of accident causation. Basically it uses the 'conventional' diagram shown below, left, but adds a third component general failure types (GFTs).

This 'alternative' model of accident causation is shown in the diagram below.

The research accepts that, properly investigated, there is much in a reactive sense to be learnt from accidents. It also recognises, that unsafe acts or active failures can be reduced using tools aimed at modifying human behaviour. The research suggested that the problem with attempting to learn solely from active failures is that; (a) there are potentially millions of them; (b) they will rarely be repeated in the same way, and; (c) the circumstances in which they occurred will never be exactly the same.

More importantly the research established once and for all that the 'sick camel' could be made considerably healthier by managing what are called the general failure types (GFTs) of which there are just eleven. Using a medical analogy, the GFTs could be considered as the vital organs of the 'safety body'. If properly managed in terms of their inherent health or strength, these could actually help prevent large numbers of accidents from ever happening at all. Once again, in medical terms it's a bit like having a healthy heart and preventing heart attacks, or being vaccinated against pneumonia or 'flu' - all designed to prevent illness in the first place. Thus rather than acting in response to an incident we seek instead to act before an incident.

The research, delved deep into the causation theory in order to establish a concrete link between breached defences and controls, and active and latent failures, thus the Tripod causation model was born (see diagram below).

Secondly, it introduces the policy maker at the very start of the chain, thus illustrating the clear relationship between commitment by the policy makers at the beginning of the chain and the results at the end of the day.

By comparing the diagram of the Tripod causation model and the simple accident diagram on the front page, it should become obvious that the link between the two is established through failed defences (for the target) and failed controls (for the hazard). The combined accident model, known as the Tripod-BETA tree, complete with all basic components is shown in the diagram (below).

Bearing in mind that any accident consists of a series of interlinking events, a completed accident tree can be exceedingly complex indeed.

Active failures

Both defences and controls are breached by 'active failures'. Active failures are the failures close to the accident event that defeat the controls and defences on the hazard and target trajectories. In many cases, these are the actions of people, i.e. unsafe acts. Human errors are implicated in at least four out of five active failures, but human error as we have already seen is a broad term that includes a number of different sources of error.

Not all active failures are human actions. Physical failure of controls and defences also occur due to conditions such as over-stress, corrosion or metal fatigue. These are often referred to as 'unsafe conditions'. Having said that, human actions are often implicated as contributory causes to this form of active failure but they are not, in themselves, unsafe acts. For instance, a designer may have failed to identify the need to use a particular high-tensile material in a specific circumstance, thus sometime later causing component failure.

Latent failures

As already mentioned, latent failures are the 'vital organs' of the safety equation. Latent failures are deficiencies, or anomalies, that create the preconditions that result in the creation of active failures. Management (the so-called policy or decision makers) decisions often involve the resolution of conflicting objectives. Decisions taken using the best information available at that moment prove to be fallible with time. Also, the future potential for adverse effects of decisions may not be fully appreciated, or circumstances may change that alter their likelihood or magnitude.

The accident-producing potential of latent failures may lay dormant for a long time, only becoming apparent when they combine with local triggering factors - active failures, technical faults, abnormal environmental conditions or abnormal system states; some of which even the best HSE management systems will have absolutely no control over whatsoever.

Rather than dealing with an infinite number of active failures, it is reassuring to note that there are just eleven latent failures on which to work to ensure absolute good health.

The eleven latent failures, which constitute the general failure types (GFTs) are:

• HARDWARE
• DESIGN
• MAINTENANCE MANAGEMENT
• PROCEDURES
• ERROR-ENFORCING CONDITIONS
• HOUSEKEEPING
• INCOMPATIBLE GOALS
• COMMUNICATIONS
• ORGANISATION
• TRAINING
• DEFENCES

Carriage of coal cargoes

Several incidents have highlighted further possible problems arising out of the 'safe carriage of coal cargoes'.

It appears that there are still possible problems relating to the information provided by the shipper and/or his appointed agent. The IMO Code of Safe Practice for Solid Bulk Cargoes clearly states that the master shall be provided in writing the characteristics of the cargo and the recommended safe handling procedures for loading and transport.

In a recent loading in the Far East, the master was presented with a shipper's declaration which gave a brief outline of the cargo characteristics which included the following:

“This cargo is not considered liable to emit significant amounts of methane. This cargo is not considered liable to spontaneous combustion.”

The master had studied the relevant entry in the IMO Code and followed the recommendations of the Code under the heading 'General requirements for all coals'.

For the first 24 hours of the voyage the holds were surface ventilated to release any methane evolved from the cargo. No methane was detected in this period and the hold ventilation was closed. The hold atmospheres mentioned were monitored for methane, carbon monoxide and oxygen twice daily in accordance with recommended procedures. However, within four days of sailing from the load port, it was noted that the levels of carbon monoxide in some of the cargo holds showed a steady rise. The master reported these figures in his daily report and requested advice.

The results of these tests indicated that there was a possible spontaneous heating problem with the cargo and the master was advised to follow the recommendations of the IMO Code described under the heading 'Special precautions self-heating coals'. In particular, he was advised to completely close down the cargo spaces, sealing all joints in covers, ventilators, etc with Ramnek tape. He reported air movement through the coaming drains and these were also closed. Within a short period of time, the levels of carbon monoxide and oxygen began to fall and this fall continued through the voyage. Discharge was completed with no problems.

In respect of coals liable to spontaneous heating, the Code recommends that the hatches should be closed immediately after completion of loading in each cargo space. The atmosphere in the cargo spaces should be monitored and, if the carbon monoxide level shows a steady increase, then the cargo spaces should be completely closed down. The covers could also be additionally sealed with suitable sealing tapes.

It should be noted that even well-fitted hatchcovers may be weathertight to rain and seas over the deck. However, with various rolling movements of the ship, the covers may not be 'airtight'. Leakage of air into the cargo space will then assist spontaneous heating of the coal. Subsequent heating of the coal will set up thermal movements within the cargo space, hot products of combustion out of the space and a fresh supply of oxygen into the space to assist further oxidation and heating of the coal.

It is suggested that ships chartered to carry coal cargoes should be provided with an adequate supply of sealing tape to maintain effective sealing of the cargo spaces.

Members should note that this incident highlights the need to closely follow the recommendations of the IMO Code related to the carriage of coal.

UKRAINE

Discharge of bagged rice

The Ukraininan ports' State Sanitory Authority (SSA) boards ships immediately on arrival to inspect the apparent condition of the cargo. If mould is found to be present, even if only on the cargo packing, the SSA will prohibit discharge of all cargo from the holds where the mouldy bags were found. The position held by the SSA in these circumstances is a tough one and it is difficult to negotiate with them and the cargo receivers. The cargo receivers will reject the cargo claiming it does not correspond to the clean bills of lading on the grounds of the SSA's findings. Occasionally, mould may be apparent only on the outside of the bags, but in many cases the rice adjoining the material of the bag is also affected. It should be stressed that it makes no difference to the SSA where the mould was found, or the possibility of segregating sound from the damaged bags, as further discharging of sound bags is often forbidden.

This problem concerns mainly ships arriving from Chinese load ports, where the cargo is occasionally packed in single woven polypropylene bags (not double bags) and is stored (prior to loading) in stacks in an open area covered only by tarpaulin. As a consequence, some bags become wetted / collect moisture prior to and during loading operations. During a long passage from China to the Black Sea, stowage of the cargo inside the holds - ie. without sufficient vertical and horizontal channel ventilation - will also add to the development of mould.

Members should be aware of the extreme action being taken by the Ukrainian authorities and be particularly careful when loading this type of cargo, especially from Chinese ports at this time.

SINGAPORE

Stowaway regulations

Ships prior to their arrival must declare the presence of stowaways onboard to the Singapore Authorities. On arrival, the ship must proceed to the quarantine anchorage for immigration and port formalities clearance where the master will have to sign a bond of US$10,000 for each stowaway.

The authority will enforce these bonds if the stowaways are found missing from the ship prior to the departure clearance. The ship must therefore ensure that the stowaways are kept locked onboard during the entire port stay. Ships whilst at the quarantine anchorage are not allowed to carry out cargo operations and/or receive stores or bunkers. To perform these operations, the ship must shift from the quarantine anchorage to a proper berth or anchorage after the immigration and port formalities have been completed.

We advise all Members to be fully aware of the above and to inform their chartering and operations departments accordingly.

BRAZIL

Stowaways from African ports

The Club has been made aware of several cases concerning stowaways hiding in ship's rudder housings, specifically with ships coming from African ports in ballast to load sugar in Brazil. Stowaways have apparently discovered that the void space around the rudder stock is the best place to hide from the local stowaway search, since this place is not easily accessible from inside the ship.

Crews should be instructed on this new stowaway strategy, intensifying the stowaway search to include the rudder housing. Crew may have access to the rudder housing by opening any of the available accesses in the steering gear room.

One case involved a Member's ship, which was on a regular run between Djibouti and Yanbu al Bahr, Saudi Arabia. The ship was of conventional construction, but with a peculiarity in the rudder area which the stowaways could make good use of. On arrival at Jeddah anchorage where the ship called for bunkers, a stowaway was found sitting on top of the rudder assembly. This stowaway was a Kenyan national, who had entered the rudder cavity in Djibouti and had travelled for two days in the cavity, less than two metres above the water line with the noise of the propeller and steering gear constantly in his ears. When discovered, the stowaway was barely conscious.

As the stowaway had no documentation with him, and due to difficulties in repatriating stowaways from Saudi Arabia, the stowaway returned with the ship to Djibouti, where temporary travel documentation was obtained to allow for his repatriation. Prior to again sailing from Djibouti, the master requested a search of the rudder cavity. A mooring boat from the Port Harbour Office was used for the inspection, with a crewmember climbing into the rudder housing to check and confirm the space empty.

In other cases of stowaways being discovered in the rudder housing, they were found to be in very poor health and in one case two stowaways were unfortunately found dead.

We advise all Members of this situation and recommend that crews intensify stowaway searches and ensure that hard to reach positions on the ship, like the rudder housing, are thoroughly searched.

MOMBASA - KENYA

Problems with disembarking stowaways

A recent decree, issued by the Kenyan authorities, states that non-Kenyan stowaways are no longer permitted to be disembarked and be placed in the safe custody of the Mombasa Port Police pending investigation and eventual repatriation.

Non-Kenyan stowaways may only be disembarked when a consular/embassy official has confirmed their nationality and the requisite emergency travel documents have been issued. The stowaways will then be disembarked and taken directly to the airport. Unfortunately, it is almost impossible to have necessary repatriation documentation on hand in time.

Most embassies are situated in Nairobi. Even if the officials manage to coincide their arrival in Mombasa with the arrival of the ship, the necessary flight schedules and seats may not be available for the stowaways to be transferred directly from the port to the airport. In some exceptional cases, Tanzanian stowaways can be removed in time, as the Tanzanian consular representative is located in Mombasa.

DURBAN - SOUTH AFRICA

Stowaways - ISPS Code

To disembark stowaways in Durban, South Africa, the following requirements must now be in place:

• Ships arriving in Durban from a foreign port are required to give 96 hours notice of stowaways onboard providing the ship is ISPS compliant. If the ship is not compliant with the ISPS code then this could hinder the disembarkation of stowaways.
• Ships arriving at Durban whose last port of call was a South African port, will be allowed to disembark stowaways without giving notice provided that they meet with the National Ports Authority's requirements.
• Ships arriving at Durban Roads from a South African port that wish to disembark stowaways at the outer anchorage will be allowed to do so, provided they meet with the National Ports Authority's requirements.
• Ships leaving Durban harbour where stowaways are found onboard after the ship has left the anchorage will be allowed to disembark the stowaways, provided they meet with the National Ports Authority's requirements.

In all cases where stowaways have been found onboard a ship from either a foreign port or a South African port, a pre-arrival form from the National Ports Authority of South Africa must be completed by the ship's local agent and forwarded, prior to the stowaway or stowaways disembarkation, to:
1. Maritime Rescue Coordinating Centre, Cape Town
2. Durban Port Control
3. Port Security Officer, Durban

We advise Members of the above requirements, which may be subject to changes, and also advise that local immigration requirements must also be complied with.

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WEST COAST USA

Reoccurrence of Chinese stowaways

Towards the end of May 2004, two entered vessels, a container and bulk carrier arrived at Long Beach, California and Vancouver, Canada respectively. Each had sailed from Busan, Korea, around the middle of May, one from the main container terminal and the second from Pier 5, bulk cargo, which is adjacent to the terminal.

During the voyage to Long Beach on the container vessel, three Chinese stowaways, all originating from Fujian, were found hiding in the deck container stack area. There was no evidence of any crew involvement in secreting the stowaways aboard and it was suspected that they had gained access during the vessel's stay in Busan.

In the case of the bulk carrier, seven Fujianese stowaways were discovered hiding in a void space below the forecastle and above the fore peak tank. In this case, they alleged that crew had assisted them to gain access to the vessel.

During the course of investigations it transpired that a third non-club entered vessel had also been found in Long Beach to have four Fujianese stowaways aboard, again hiding in above-deck container stacks.

In this instance, no evidence was present that the crew had assisted them and similarly the vessel had sailed from Busan during the same period.

From enquiries and debriefing of the stowaways, it appears that Korean Nationals in Busan provided help and, in some cases, the stowaways had been housed in Busan pending the discovery of a suitable vessel.

Fortunately, there is no suggestion that the stowaways had gained entry to containers and the most likely explanation is that they boarded the vessel at a time when the gangway was unattended. Certainly in respect of the non-club related incident, four Chinese were allowed onboard the vessel in the company of two Korean Nationals, who alleged that they were from owners. No evidence existed of them having left the vessel.

It is obviously important that owners and operators provide training and adequate supervision to those crew members responsible for vessel security in ports, although within increasing numbers of crew members, providing adequate cover becomes increasingly difficult.

If crew are not adequate to cater for this obligation, then consideration should be given to recruiting a security officer to supplement vessel security whilst in port. Certainly, Members should afford renewed attention whenever vessels are calling at this terminal.

New limits on sulphur in marine fuels

New regulations shortly to come into force are contained in Annex VI of the regulations of MARPOL 73/78 (International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978). Annex VI was actually adopted by the IMO as far back as 1997 but, like all IMO regulations, only comes into force 1 year after it is ratified by a certain number of states having a certain percentage of the world's tonnage. This occurred on 18 May 2004 when it was ratified by Samoa so it will come into force on 19 May 2005. Annex VI covers the prevention of air pollution from ships. The problem being that when fuels are burnt in engines the gasses they produce contain sulphurous oxides (known as SOx) and nitrous oxides (known as NOx) and scientists tell us that these play their part in environmental pollution, acid rain etc.

One of the main reasons why shipping is now being targeted is not that ships are putting out more of such polluting gasses but that land based industries have been subjected to such regulations for some time and have therefore been decreasing their emissions which means emissions from ships form a bigger percentage.

Annex VI therefore sets a global limit on the sulphur content of marine fuels of 4.5%. This will supercede the limit of 5% in the international fuel standard, ISO 8217.

Annex VI also contains provisions for what are know as 'SOx emission control areas' (or SECAs) which will have much more stringent controls on sulphur emissions and will limit the sulphur content of fuels to 1.5%. The first SECA will be the Baltic Sea and this will come into force 1 year after Annex VI, i.e. on 19 May 2006. There are moves to make the North Sea and English Channel the next SECA but this is not likely to come into force until possibly March 2007.

The European Union has also decided to bring in its own regulations. This would appear to be because of the EU's frustration at the delay between Annex VI being adopted by IMO in 1997 and it coming into force in 2005. Fortunately, the EU has fallen into line with the regulations concerning SECAs but have their own rules for distillate fuels. The EU directive covers the use of distillate fuel within member states national waters, i.e. within the 12 mile limit, or alongside berths and allows a maximum sulphur content of 0.2% (some exceptions have been negotiated). It is possible that this limit will be reduced to 0.1% in 2010.

So what are the implications of this? Marine fuels supplied worldwide have an average sulphur content of between 2.5% and 3.0% with only 0.5% of all fuels supplied containing over 4.5% sulphur. So the global limit will have very little practical effect on ships.

However the same cannot be said of the SECA limit of 1.5% sulphur. None of the grades of residual fuel in the present IFO 8217 standard have a limit on sulphur which would comply with this. So if a vessel wanted to continue using residual fuel, it would have to have a separate low sulphur fuel oil and would have to properly segregate it. In fact the only grade of fuel in the ISO 8217 standard which would meet the SECA limit is DMA or gas oil, both the normal grades of MDO, DMB and DMC, have a limit on sulphur of 2.0%. Not only could this mean segregated storage tanks but it also raises the possibility of dual pumping systems etc - one way round this would be to change over to low sulphur fuel early enough so that the transfer system and daily use tanks are flushed through before the vessel enters a SECA.

If a vessel uses diesel oil in its generators and goes into an EU member state port, it will also have to have low sulphur gas oil to comply with the 0.2% limit, with even more segregated storage tanks etc. The EU regulations (which came into force in 1999) only cover distillate fuels so a uni-fuel ship using only residual fuel in its generators as well as main engine, could continue to use fuel oil of upto 4.5% sulphur in port as long as it is not in a SECA.

One point to bear in mind is that the cylinder oil used in large slow speed diesel engines is highly alkaline to counteract the acidic conditions produced when burning high sulphur fuel oil. The affect of using low sulphur fuel could lead to the situation where excess alkalinity occurs. There has been very little research done on this but it is thought that excess alkalinity could be as corrosive as excess acidity. The grade of cylinder oil should therefore be matched to the sulphur content of the fuel and both owners and engine manufacturers may have to consider the possibility of dual cylinder oil systems.

Annex VI puts the burden on bunker suppliers to supply fuel which conforms with the sulphur limits but the burden on demonstrating compliance will be on ships and their owners. The requirements to cover this aspect include retaining bunker delivery receipts, which will have to show the sulphur content, of all fuels received for 3 years and for the taking of what will be known as 'regulatory samples' so that, should a port authority require it, it can be tested to prove compliance. What is of interest is that IMO has decided that this sample should be taken by the continuous drip method at the receiving vessel's bunker inlet manifold i.e. not on the bunker barge. Owners will also have to ensure that not only do the crew properly segregate low sulphur fuel but that they also properly document it and the change over procedure so that the evidence is available. Retaining the documentary evidence and regulatory samples for the required period may require dedicated storage.

Further information can be obtained from The International Bunker Industry Association : http://www.ibia.net

UNITED STATES OF AMERICA

USCG enforcing ballast water management regulations

From 13 August 2004, the USCG began enforcing US ballast water management regulations. The master, owner, operator or person-in-charge of any ship equipped with ballast water tanks that is bound for ports or places in US waters must ensure that complete and accurate ballast water management (BWM) reports are submitted in accordance with 33 CFR 151.2041, and signed BWM records are kept onboard the ship for a minimum of two years in accordance with 33 CFR 151.2045.

The final rule titled 'Penalties for Non-submission of Ballast Water Management Reports' (33 CFR 151, subpart D, as amended 14 June 2004) implements a maximum US$27,500 a day civil penalty and class C felony provisions for failing to submit BWM reports and failing to maintain BWM records. The final rule also expands existing BWM reporting and record keeping requirements to include all ships equipped with ballast water tanks that transit to any US port or place of destination, regardless of whether the ship operated outside the exclusive economic zone (EEZ) of the US or the equivalent Canadian zone.

We expect that the USCG captain of the port (COTP) will in most cases take a tiered approach to enforcement actions starting with letters of warning (LOW), notices of violation (NOV), civil penalties, suspension and revocation (S&R), captain of the port orders and then, in a worst case situation, criminal charges. Conversely, COTPs may also consider including superior compliance recognition programmes for those operators who continuously show superior compliance with new or existing BWM requirements.

The only ships that are exempt from the mandatory BWM requirements under the final rule are:

• Ships that operate exclusively within one COTP zone;
• Crude oil tankers engaged in coastwise trade; and
• Ships of the Department of Defense, Coast Guard, or any of the armed services as defined within 33 USC 1322 (a) and (n).

AUSTRALIA

Crew immigration clearance requirements

From 1 July 2004, the transitional period of the requirement for all crew of non-military ships entering Australian waters to carry a passport and identity document for presentation at immigration clearance ends.

The identity document must show and confirm the person concerned as a seafarer employed on that ship. The passport and document must be located on the ship as it enters Australia at a proclaimed port or a place other than a proclaimed port, if permission for it to do so has been granted by the Australian Customs Service.

Under the Migration Act 1958 (Cth), authorised officers of the Department of Immigration now have the authority to impose a penalty on the master, owner, agent and charterer of a ship due to crew members' non-compliance. In one recent case an infringement notice was issued to the local agent of a foreign ship for the failure of a crew member to be in possession of the required identity document. The agent has been fined AUS$5,000.00, which must be paid within 28 days.

In these circumstances it seems clear that the Department of Immigration is now determined to enforce the new requirements regarding identification documents. Therefore, care should be taken to ensure that all crew of non-military ships entering Australian waters carry with them the required documentation.

PANAMA CANAL

Accident and cargo claims

We have recently noted changes in the manner in which administrative claims for vessel accidents and cargo damage are being processed by the Panama Canal Authority (PCA). The organic law of the Panama Canal provides that the PCA is responsible for damages suffered by vessels, their cargoes, crew or passengers while transiting the Panama Canal and which are caused by the negligence of the PCA. The law further provides that the PCA shall promptly adjust and pay such damages. The enabling statute governing the operation of the Panama Canal by the Panama Canal Commission, US administered predecessor of the PCA, contained a similar provision regarding the disposition and adjudication of the aforementioned claims. For the first few years subsequent to its assuming full control of the operation and maintenance of the Panama Canal, the PCA did in fact promptly adjust and pay such damages, in line with its often-repeated position that the Panama Canal would continue to be administered in the same or better manner as in the past.

We are aware of at least one claim wherein the PCA has failed or declined for reasons best known to its administrator and legal department, to make a final adjudication of said claim, even though that claim had been pending before the PCA for over 21 months. Additionally, claimants advised the PCA more than 10 months ago that they would not be presenting further information and documentation with respect to their claim and specifically requested that the claim be adjudicated.

This apparent new position by the PCA respecting the handling and adjudication of administrative claims is a source of great concern because the PCA is attempting to assert that it cannot be sued until it adjudicates a claim regardless of the time it (the PCA) takes to adjudicate such claim. If the PCA takes this seemingly capricious position to an extreme, a party, whether shipowner, cargo owner or passenger, could be waiting indefinitely for their claim to be adjudicated, without having any other recourse under the law (as interpreted by the PCA) to force the PCA to resolve its claim and reimburse the claimant for any damages suffered as a consequence of the fault of the PCA.

UNITED STATES OF AMERICA

The dangers of entering confined spaces

In a recent incident, a ship's second engineer lost his life when he entered and became trapped in the main engine's scavenging air receiver. In this case, the ship reported that the second engineer was missing prior to sailing. Despite an extensive search by ship's personnel of all areas including many searches of the machinery spaces and the main engine, the engineer could not be found therefore it was presumed he had gone ashore and missed sailing. Upon arrival at the next port the individual was found deceased behind an access door to the main engine scavenging air receiver.

It was determined that the engineer entered the scavenging air receiver alone. The reason for entering the receiver is not known, although engine maintenance was performed in that space whilst at the first port and, therefore, he may have returned to inspect the area for tools left behind or to retrieve something. It appears that after his entry, the easily-moved, inward-opening, hinged door accidentally closed (see photographs). Investigators believe that at that time, the upper left dog - due to its weight and perhaps the vibration of the door as it closed - moved, allowing its edge to catch the circumferential lip at the opening. Once caught, even with the loosened fastener, the door could no longer be opened from inside the receiver. The engineer would have initially had sufficient quantities of oxygen to breath, but when the engine was started the conditions inside the receiver would have dramatically changed and caused the fatality.

It is important to note that the second engineer was an experienced mariner who, it was reported, was trained and familiar with the ship's confined space entry procedure. In all previous instances, he had followed the procedures and safely performed maintenance inside the space. Unfortunately, on this occasion he entered without informing anyone or having an assistant stationed outside.

Main engine crankcases, scavenging air spaces, exhaust ducting, boiler drums, furnaces, stack casings, condensers, sewage plant tanks and other systems, equipment, and components may present potential 'confined space' type hazards that mariners may, on occasion, not associate as confined spaces and therefore not take the precautionary steps needed.

A confined space may be defined as any location that, by design, has limited openings for entry or egress and is not intended for continuous human occupancy. This definition applies regardless of whether or not the atmosphere is explosive or toxic. See related US Department of Labor, Occupational Safety & Health Administration information by accessing their website at www.osha.gov

It is strongly recommended that:

• All vessels complying with the International Safety Management Code (ISM) have a specific plan for entering confined spaces outlined within their Safety Management System.
• The confined space entry procedures include and identify various types of shipboard spaces such as those previously mentioned that could be encountered and which should be treated as confined spaces.
• Crew safety meetings address the identification of confined spaces and provide instruction on confined space entry procedures.
• Individual crew members that work in confined spaces review existing entry procedures and requirements regularly.
• All other vessels and maritime operations falling outside of ISM requirements develop and include in their marine safety programmes similar confined space identification and entry procedures.

JAPAN

Compulsory insurance requirements for non-tanker vessels

From 1 March 2005, in accordance with the newly amended Japanese Law on Liability for Oil Pollution Damage, all ocean-going, non-tanker vessels of 100 gross tons or more must comply with the requirements of compulsory insurance when calling at a Japanese port.

Liability The English version of the amended Law on Liability for Oil Pollution is not available. However the Japan Ministry of Land, Infrastructure and Transport (MLIT) has posted a summary on its website from which it is clear that the new law imposes strict, joint and several liability on the shipowner and charterer of the vessel for damage caused by a bunker spill.

Insurance

MLIT's summary announcement indicates that insurance required under the new law must include coverage for damage caused by bunker pollution and coverage for the expenses of wreck removal. The amounts of insurance cover must be sufficient to meet both personal claims and other claims in accordance with the limits provided under the 1976 LLMC.

Charterers - which may include time charterers but not voyage charterers - are also liable under the law. However MLIT has confirmed that if the owner has a Club Certificate of Entry onboard the vessel, the charterer will not be required to supply another insurance certificate.

What Members should do in order to comply with the new requirements

• Carry the relevant certificate of insurance onboard.
  For owners insured with any of the International Group of P&I Clubs, the Club's Certificate of Entry will be accepted. However the Certificate of Entry must be an original.
• Report the status of insurance before entering a port or certain designated sea areas.

This article provides preliminary advice in response to queries from Members, but as noted above, since an English version of the law is not available, Members are encouraged to visit the MLIT website for updated information and to download the report form, when it is made available. The website also includes the MLIT's contact details and can be found at the following address: http://www.mlit.go.jp/english/maritime/insurance_portal.htm

AUSTRALIA

Confirmation of P&I entry

Members who are trading to Australia should be aware that the Australian Customs Service (ACS) is now insisting upon sighting a confirmation of ships' P&I entry prior to granting them permission to sail from any Australian port.

We have been advised of cases where ships have been delayed until the P&I Club in question has provided a fax confirmation. ACS stated that they would accept fax copies of the confirmation until 20 April 2004, after which ships should be able to produce an original certificate of entry.

(1) Mayban General Assurance BHD, (2) AMI Insurans BHD, (3) Malaysian National Insurance BHD, (4) Sharikat Takaful malaysia BHD -v- (1) Alstom Power Plants Ltd, (2) Alstom T&D Ltd [2004] EWHC 1038 (Comm)-QBD

Query: Is inability of goods to withstand the ordinary perils of a sea voyage a new category of inherent vice?

A transformer was shipped from Ellesmere Port, UK, to Malaysia under an 'all risks' cargo policy. When it arrived, it was found seriously damaged and had to be returned to the UK for repairs . The shipper lodged a claim against his insurer alleging loss caused by some unusual event in the course of the voyage. The insurers rejected the claim citing inherent vice on the basis of the transformer's inability to withstand the ordinary incidents of carriage by sea from the UK to Malaysia during the winter months.

On the facts, the weather conditions encountered were not unusual and the transformer had been properly secured. The evidence accepted by the court was that the joints of the transformer began working loose when subjected to stresses and strains of the kind that could be expected to be encountered in the course of carriage.

A charterer cannot limit his liability in respect of damage to ship

A fire and explosion occurred onboard the CMA Djakarta in 1999 whilst she was on time charter to CMA CGM for trading in CMA CGM's liner service. The incident was attributed to two containers filled with bleaching powder. The charterparty provided that the vessel was to be employed in carrying lawful containerised merchandise “excluding any goods of a dangerous, flammable or corrosive nature”.

In the arbitration that followed, the arbitrators found the charterer in breach of the 'dangerous cargo' clause and upheld the owner's claim for damages in the sum of US$26.6m for repairs including salvage and owners' demand to be indemnified in respect of all cargo claims and general average contributions.

The arbitrators ruled, following the decision of Thomas J in the Aegean Sea [1998] that the charterer could not limit his liability under the 1976 Convention because his acts or omissions in relation to the shipment of the cargo were acts or omissions done in his capacity as charterer, not as shipowner. The arbitrators' decision was upheld by Steel J on appeal to the Commercial Court.

The Court of Appeal has now overturned this decision. Longmore LJ who gave the leading judgment, said that he believed Steel J and Thomas J had both “started from the wrong point”. In reaching their decision that the charterer must be acting “as an owner” before he is entitled to limit his liability, both judges appeared to have relied to some extent on the history of the United Kingdom legislation and its incremental approach to the widening of the category of persons entitled to limit their liability. This interpretation was also putting a gloss on the word 'charterer' which was not apparent from the words used. He cited the dicta of Lord Macmillan in a case on the interpretation of the Hague Rules: “The interpretation of international conventions must not be controlled by domestic principles but by reference to broad and generally acceptable principles of construction. The duty of a court is to ascertain the ordinary meaning of the words used, not just in their context but also in the light of the evident object and purpose of the convention”.

Longmore LJ then looked at Article 1 of the 1976 Limitation Convention and said that two matters were immediately noticeable. First, two classes of people are accorded the right to limit, shipowners and salvors; secondly, the word 'shipowner' is defined and is said to mean 'the owner, charterer, manager or operator of a seagoing ship'. The mere fact that 'charterer' is part of the definition of the word 'shipowner' cannot of itself mean that a charterer (an expression otherwise unqualified) has to be acting as if he were a shipowner before he can limit his liability.

Longmore LJ then went on to look at whether a claim for loss or damage to the vessel by reference to which a charterer seeks to limit his liability is a claim which falls within art. 2.1(a), i.e was it contemplated in the 1976 Convention that the tonnage of that vessel could be used to calculate the charterer's limitation. He concluded that the answer was no. On the facts, the only head of claim in respect of which the charterer could limit his liability was the indemnity for cargo claims. His conclusion was that limitation was available to a charterer qua charterer but damage to the ship itself was excluded from the scope of claims subject to limitation. A charterer's ability to limit will therefore depend on the type of claim that is brought against him rather than the capacity in which he was acting when his liability was incurred.

Leave to appeal to the House of Lords was refused.

Construction of a damage limitation clause in a contract for the carriage of goods by sea to see if the same is qualified by Art. 10 of the Hague Rules ('the Gold Clause Trap')

Fifty five coils of electrolytic tin plate were damaged by seawater. The Hague Rules were incorporated into the contract of carriage.

Article IX Hague Rules; “The monetary units mentioned in this convention are to be taken to be gold value.”

Clause 6(B)(b)(i) of the B/L: By the [Hague Rules], "… if the loss or damage is proved to have occurred at sea or on inland waterways; for the purpose of this sub-paragraph the limitation of liability under the Hague Rules shall be deemed to be £100 Sterling, lawful money of the United Kingdom per package or unit …”

The loss was calculated at NZ$ 613,667.25 and Dairy Containers, the B/L holder, were awarded this sum by the first instance judge in NZ. The carrier however contended that the deeming provision in Clause 6(B)(b)(i) applied and that he was entitled to limit his liability to £100 Sterling, lawful money of the United Kingdom per damaged coil, making a total liability of £5,500. This was upheld by the Court of Appeal. This case came before the Privy Council by way of Dairy Containers' appeal against the Court of Appeal's decision. Dairy Containers argued that the limitation figure of £100 had to be interpreted by reference to Article IX, the 'Gold Clause'.

The Privy Council accepted that the effect of Art. IX was that the figure referred to in Art. IV (5) (the original limitation provision) was the gold value, not the paper value, of pounds sterling (the Rosa S [1988] 2 LLR 574).

Had the Hague Rules been incorporated compulsorily, the deeming provision would have fallen foul of Article III (8) (provision making null and void any attempt to lessen liability as provided by the Rules). On the facts, the carriage was not governed by any international convention or by the laws of Korea and New Zealand and the application of the Rules by contractual incorporation and the deeming provision in Clause 6(B) was therefore valid.

Lord Bingham, delivering the judgment, said: “The general rule should be applied that if a party, otherwise liable, is to exclude or limit his liability or to rely on an exemption, he must do so in clear words. A term in the bill cannot be repugnant to any provision of the Hague Rules if the term in question represents a modification of the Hague Rules provision agreed by the parties in exercise of their freedom to agree what they will. It would similarly be absurd to hold that a clear contractual limitation agreed by the parties is invalidated by article III rule 8 of the Hague Rules.”

The carrier's maximum liability was therefore £5,500.

REPUBLIC OF IRELAND

Personal injury claims: a changing landscape

Background

In an effort to tackle the high cost of insurance in Ireland the Government recently introduced legislation to implement two new initiatives. They are:

• the establishment of the Personal Injuries Assessment Board (PIAB); and
• the introduction of strict new procedures for the handling of personal injuries litigation.

Key features

• The function of PIAB is to offer a speedy and cost-effective means of dealing with personal injury claims without the involvement of lawyers.
• Under the scheme all personal injury claims must be referred to PIAB before proceedings may be issued. In respect of employers' liability claims, the scheme became operational on 1 June, and, earlier than expected, was extended to include motor accident and public liability claims as from 22 July 2004.
• This role of PIAB is limited to assessing claims and issuing awards which can be accepted or rejected by the parties. PIAB has no role in determining liability and will not make any findings of fact relating to fault or negligence.
• PIAB will only make an assessment where the prospective defendant admits liability. This is done on a 'without prejudice' basis and in any subsequent court proceedings liability can be contested.
• Where there is no admission of liability for the purposes of a PIAB assessment, it will issue a release certifi cate, which will allow the claimant to proceed to court in the normal way.
• The notification of the claim to PIAB will stop time running under the statute of limitations.

Assessment of claims is based on written evidence, which is made available to both parties. If a respondent disputes the claimant's medical evidence, PIAB will refer the medical evidence to an independent expert.

Each claim is assessed by a panel which comprises medical, financial, legal and other experts and is chaired by a member of PIAB.

Claims are assessed by reference to a PIAB Book of Quantum, which identifies the appropriate levels of compensation payable for different types of personal injury. This is available on the PIAB website at www. piab.ie

If both parties accept PIAB's ruling, the award is binding. Where either or both parties reject the assessment, the claimant must issue proceedings within a period of six months and the claim will be treated 'as new' without any reference to the prior PIAB process.

Operation of PIAB to-date

At this early stage, there is no information publicly available regarding the number of claims handled or the rate of acceptance of assessments. Its immediate impact has been limited by the fact that a huge number of court proceedings were issued in advance of the introduction of the scheme in order to avoid its application. In due course PIAB will publish statistics on its website regarding the claims handled and assessments accepted.

A flowchart identifying the key steps in the PIAB process is shown below.

Civil Liability and Courts Act 2004 The aim of this legislation is to speed up and streamline personal injury litigation, to discourage exaggerated claims and to penalise claimants who give false and misleading evidence. Key features In personal injury claims each party is required to swear an affidavit verifying the allegations made in the pleadings; criminal penalties are provided for false or misleading claims. A defendant may require the plaintiff to provide details of any previous personal injury claims made and any court awards received or settlements reached. This novel provision is aimed at discouraging serial litigants. To reduce lengthy oral hearings, the court can direct that evidence be given on affidavit; the right to cross-examine is preserved however. The Act will reduce the limitation period for the commencement of personal injury actions from three to two years (effective from 31 March 2005). Plaintiffs are required to serve a notice in writing setting out the terms upon which they are prepared to settle a claim. In determining costs the court can take the offer, and the defendant's refusal to accept it, into account. Up to now, the scope for making a formal settlement offers, by means of a payment into court, has been limited to defendants. The legislation gives the court power to direct the parties to engage in a mediation process and the court has power to penalise, in costs, a party who refuses to do so. Rules of court are to be introduced to streamline the handling of personal injury claims with the introduction of case management procedures and provision for pre-trial hearings. In dealing with claims, the court must have regard to the PIAB Book of Quantum although it is not bound to follow its guidelines on compensation levels.

Implications for insurers and ship operators

These two initiatives, namely the establishment of the PIAB and the introduction of new procedures and penalties under the Civil Liability and Courts Act 2004, will significantly alter the personal injury regime in Ireland by reducing the time and cost involved in processing personal injury claims where liability is admitted and by streamlining the litigation process where cases are contested.

ISPS and legal implications

With the entry into force of the ISPS Code, we summarise below some of the key requirements and legal implications.

• SOLAS was amended in December 2002 to include a new Chapter XI-2 addressing ship security.
• In addition, the International Ship and Port Facility Security (ISPS) Code was adopted.
• The ISPS Code came into force on 1 July 2004.

• Passenger ships, including high-speed passenger craft;
• Cargo ships, including high-speed craft, of 500 gross tonnage and upwards;
• Mobile offshore drilling units;
• Shore facilities serving such ships engaged on international voyages.

A Ship modifications

As of 1 July 2004 vessels are required to:

• Fit and carry an automatic identification system;
• Show the ship identification number internally and externally;
• Have a compliant ship security alert system.

Vessels are required to:

• Carry a ship security plan which has been approved by, or on the behalf of, the flag state;
• Obtain and carry an international ship security certificate issued or authorised by the flag state;
• Carry a continuous synopsis record issued by the flag state;
• Carry additional information onboard relating to parties responsible for crew appointees, parties to charterparties, and those responsible for deciding the employment of the ship;
• Have available onboard a record of certain other security related information eg: the ship's level of security in at least the last ten previous ports.

As of 1 July 2004 shipping companies are required to obtain an international ship security certificate in respect of each ship that they operate. In order to do so the company must:

• Appoint a company security officer who should have knowledge and training in the relevant security matters;
• Carry out a ship security assessment;
• Designate an officer on each ship as the ship security officer;
• Produce a ship security plan, ensuring that the plan is approved by or on behalf of the flag state, available onboard the vessel at all times and that the measures outlined in the plan are implemented.
• Ensure that appropriate security drills and exercises are carried out;
• Provide appropriate resources to the ship to carry out the security plan.

As of 1 July 2004, Regulation 9 of XI-2 establishes that a contracting government, will have the right to exercise various control and compliance measures, including:

• Port state control inspection to verify that a valid international ship security certificate (or interim certificate) is held onboard;
• Inspection of the ship's security plan with limited access allowed to specific sections of the plan relating to the non-compliance, subject to the consent of either the flag state or the master;
• If there are 'clear grounds' then the port can impose 'additional control measures'.

These may include evidence or reliable information that:

• The vessel does not correspond with the requirements;
• Documentation is not valid or has expired;
• The master or ship's personnel are not familiar with the security procedures;
• The vessel has embarked persons, or loaded stores in violation of the ISPS Code;
• The vessel has not completed a declaration of security.

These may include:

• A more extensive inspection of the ship;
• Delaying or deviating the ship;
• Detention of the ship;
• Restriction of operations within the port;
• Refusal of port entry/expulsion of the vessel from the port.

• When this occurs, the port state should advise the appropriate facts to the port state authorities of the next appropriate ports of call, if known, and any other appropriate coastal states;
• Such notifications should remain confidential;
• This can be imposed where the inspecting officers of the contracting government have 'clear grounds' to believe that the ship poses an immediate threat to security;
• It can only be imposed while the non-compliance giving rise to such action remains in force;
• If a ship is unduly detained or delayed or expelled it shall be entitled to compensation for any loss or damage suffered;
• Necessary access to the ship shall not be prevented for emergency or humanitarian reasons and for security purposes.

Paper trail: ISPS requires more procedures, certifications, drills etc. most of which will be the responsibility of owners. As noted above, ISPS allows considerable scope for intervention by local port state authorities.

Charterparties: Owners and charterers may seek to incorporate protective clauses into their charterparties and contracts of carriage dealing with liability as a consequence of non-compliance with the ISPS Code. Useful guidelines have been provided by BIMCO see the BIMCO ISPS Clause for Time Charterparties and the BIMCO ISPS Clause for Voyage Charterparties. In the absence of any contractual wording the position will be uncertain.

Insurance cover: The ISPS Code forms part of the vessel's flag state requirements. Non-compliance with the ISPS Code on the part of owners may therefore amount to a breach of the insurance terms. ISM compliance is built into the International Hull Clauses 2002 and may be found added as a term of other hull policies. In the event of a vessel being found non-compliant and being denied entry or expelled from a particular port, this could also give rise to deviation which may need to be insured separately.

Cargo claims: detention of the vessel, or delays arising in connection with non-compliance with the ISPS Code may give rise to cargo claims for delay, loss of profit, or physical loss of perishable goods.

Conclusion

Owners are faced with a host of additional requirements and legal implications. In order to avoid delay or detention of their vessels, owners will have to continue to ensure good communication and a high degree of vigilance to ensure that wherever their vessels trade they are going to comply with the applicable security measures for individual ports.

Good Practice posters 3

The Club has just published the third set of its highly-acclaimed Good Practice posters. If you wish to receive further copies, contact the Loss Prevention Department.