Governmental intervention in marine casualties

In Swedish Club’s latest issue of Triton the insurer has reported on governmental intervention in marine casualties, which was the theme for the Panel Debate at the Members’ Day preceding the Club AGM.

Managing Director Lars Rhodin wrote that seaborne transportation was no longer a shared risk in the way it was historically perceived. From the shipowners’ side it was clear that there was a reliance on P&I clubs and underwriters to do their job as partners in an effective response. Both the reputation of shipowners’ and their status in the value chain were now at peril in the event of major casualties.

“Government agencies act on public demand and may have less experience in dealing with those situations where contingency plans need to work in practice”, said Rhodin.

Political pressures, he said, were omnipresent. “My take is that casualty response leadership is absolutely critical. The Swedish Club has developed an Emergency Response Training Programme in which we can train, learn and be prepared together before it happens”, Rhodin said.

On the panel Captain Jonathan Walker, Chairman Asia Pacific of London Offshore Consultants (LOC), shared his experiences and also suggested some remedies. “I work for both insurers and authorities,” he said, adding that “I have been both in front of the authority’s desk or the harbour master being chastised for doing something wrong, and I have also been behind the same desk – at that time (hopefully) being reasonable and diplomatic with the shipowner or insurer in front of me.”

Walker recalled the case where he was called in as an expert witness in the case of 146,840 gt tanker Hebei Spirit (now the Hong Kong-flagged Gloria 21 / Sea Glory, IMO 9034640). In that case the VLCC, which had been safely anchored, was struck by a Samsung crane barge in December 2007, leading to a spill of 10,000 tonnes of fuel and becoming known as Soputh Korea’s worst oil-spill ever..

“The Master and Chief Officer did everything possible to mitigate that pollution and everything that followed was done correctly, but despite all their efforts they were incarcerated in South Korea for 18 months,” Walker said.

According to a 2009 report, compensation was mostly to be paid by China Shipowners Mutual Assurance Association (China P&I) and Skuld P&I (thence the International Group), which were insurers for the Hebei Spirit, with some paid by Samsung Fire and the Lloyd’s market.

(Insurance: China P&I $9m, Skuld P&I $1bn, hull (KRW360bn Samsung fire & Marine Insurance, Lloyd’s market $500m)

Walker referred also to the Petron Corp-chartered tanker Solar 1 incident in the Philippines in August 2006, where oil ended up on nearby beaches. “This became a very emotive topic – mostly because the president was in danger of impeachment and this was a good opportunity to distract attention away from her,” he said.

Walker said that “what we must remember when dealing with authorities is that what you may think is normal in your country may not be the same in their country. We have to respect the laws that they have and we have to deal with them. We must cooperate with the authorities at every level if we can. However, sometimes it goes wrong.”

Slow and convoluted investigations and legal processes were a problem – “the longest I have dealt with being 10 years, and at the end of it there were only two people still dealing with it who started on the case”. Corruption and extortion were major problems.

Government intervention could also include:

  • visa issues for responders – “often the experts aren’t there, and getting the right people in is delayed because we can’t get visas”;
  • salvage equipment being held up by Customs – “the people don’t realise how urgent this is”;
  • seeking approvals with officials – “if they don’t understand it, they won’t give approval”;
  • and uncontrolled interference by locals.

Overstepping jurisdiction was another frequent issue, said Walker. “We find that authorities don’t actually understand their areas of responsibility. Maybe another authority steps in, or another country. Some local authorities are unclear what is the jurisdiction of the casualty, and therefore just assume authority. “We also encounter the ‘crusader mentality’ of some authorities. For example, there is a local election and someone needs to show that they are in charge.”

“But often, authorities simply don’t understand what is going on”, he said. “There is a lack of experience and lack of knowledge, and a refusal to listen. They really don’t understand the technologies to deal with these casualties.”

Walker had some specific suggestions on what could be done to cope with such events. “We need to know who we have to deal with. We need a unified IMO approach to develop a marine investigation code as a transparent process. We can’t have seafarers held for many months just because the local authority can’t understand what caused the casualty, and finds itself driven by all these emotive issues. The ILO/IMO needs to make that clear.”

He urged more IMO member states to sign up to the Nairobi International Convention on the Removal of Wrecks 2007.

Finally, he said that communication and a proactive approach were vital. “The authorities I deal with haven’t a clue what a P&I club is. It is important that insurers do regularly talk to governments. Because authorities change all the time, this has to be a continuous process. “Governments should instigate systems where they have people in place who know what they are dealing with. Insurers need to be proactive; my view is, get the right people out there as quickly as possible. There are a lot of situations where the information and evidence are lost, so an understanding of the casualty is lost. It’s so important to get people out there on time.”