The Swedish Club. No July. Page Fred W.Y. Cheng. Page Moving forward. with good speed. Page 4-5

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1 The Swedish Club No July Page Michael Vinnen Fred W.Y. Cheng Sun Jia-Kang New Board members Page Moving forward with good speed Page 4-5

2 Content No July Leader A year of anniversaries! 3 Market State of the market 4 Club Information News from Piraeus 6 The Swedish Club Academy 7-9 News from Asia 10 LEGAL Expo 2010 New Immigration regulations for the sea-bound area 11 AGM Annual report New Board members Keynote speaker Panel discussion Out and about Club Information Anniversary P&I Cargo liability cargo Iron ore fines Injury National Health Service Pollution This is ITOPF SALVAGE Lloyd's salvage arbitration system club information The Nya Älvsborg fortress Basic facts / New members 47 Out and about Board members elected by the employees 51 Staff news 51 Club calendar 52 The Swedish Club is a mutual marine insurance company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight, Demurrage & Defence, Charterers' Liability, Hull & Machinery, War risks, Loss of Hire insurance and any additional insurance required by shipowners. Head Office Sweden Visiting adress Gullbergs Strandgata Göteborg Postal adress P.O. Box 171 SE Göteborg Sweden Tel Fax swedish.club@swedishclub.com Emergency tel Greece 5 th Floor, 87 Akti Miaouli GR Piraeus Greece Tel Fax mail.piraeus@swedishclub.com Emergency tel Hong Kong Suite 6306, Central Plaza 18 Harbour Road, Wanchai Hong Kong Tel Fax mail.hongkong@swedishclub.com Emergency tel Japan Suzuyo Hamamatsucho Building 5F Kaigan, Minato-Ku, Tokyo Japan Tel (24 hour tel) Fax mail.tokyo@swedishclub.com The Swedish Club Triton is published three times a year and distributed free of charge. The Swedish Club Letter is an editorially independent newsletter and opinions expressed by external contributors are not necessarily those of The Swedish Club. Articles herein are not intended to provide legal advice and the Club does not accept responsibility for errors or omissions or their consequences. For further information regarding any issue raised herein, please contact our head office in Göteborg. Editorial Advisory Board Peter Andersson, Susanne Blomstrand, Henric Gard, Birgitta Hed, Anders Leissner, Lars A. Malm, Lars Rhodin, Tony Schröder, Carola Weidenholm. Production co-ordinator Susanne Blomstrand PR-consultant TRS Public Relations Ltd., London. Layout Eliasson Information, Göteborg Cover photo IStockPhoto Print PR Offset The Swedish Club. Articles or extracts may be quoted provided that The Swedish Club is credited as the source PR5200B

3 Leader MD Lars Rhodin A year of anniversaries! Dear members and associates, As you have no doubt noticed, we have entered a year of anniversaries. 100 years of P&I and 30 years of office presence in Piraeus. Yet again, the Club was formed 138 years ago, back in Every company and every business activity is started for a reason. Perhaps even more so for a mutual. Most mutuals are started out of necessity; to address specific needs which are not already catered for. That also applies to The Swedish Club. Steamships presented a new risk scenario, as did the growing liabilities placed on shipowners. Most companies however, do not stand to celebrate 100 years, let alone 138! Someone once said No history no soul and that is true. In today s terminology, it can be said that the soul is embedded as a part of the brand name. History is past deliveries. It is our experience and knowledge known to the members and in the market, and it is the foundations on which to develop the Club further. BUT, there is no time to rest on one s laurels. The world is moving fast and we need to respond to changes as they emerge. The successful company, or club for that matter, is the one moving fast, quicker than its peers. Hedging risk or marine insurance, as in our case, is as old as trade and barter. Yet, to price exposure today is quite different from yesterday. History aside, we must not forget that we are as good as we can service the next casualty giving rise to a claim. We are known for service excellence, flexibility and quick response. That is our approach. It is up to us to demonstrate that on every occasion. And, we will not let you down. On that occasion, we can make a difference. What about going the extra mile? Yes, we do. Our Maritime Resource Management programme is but Lars Rhodin Managing Director one example. It is designed to reducing exposure to shortcomings in human behaviour. It is not enough to establish that a mistake has been made. Most underwriters would stop here; to see whether the loss qualifies for indemnity. We take it further. We need to know why and thereafter address the underlying reasons the root cause of the mistake. Only then can we learn, with a view to preventing a recurrence. Our Annual General Meeting has just taken place. The AGM is very much part of The Swedish Club s soul. It is a meeting place for business, networking and joy. Working for the Club, we take pride in the number of members, brokers and associates returning to the event year after year. But again, we all attend for a reason. It is not only to enjoy a dinner with traditions going back as long as anyone can remember. It is a venue to exchange views, build on relationships and learn more. Those are the values we have in common. Those are the values we will continue to develop. Yours sincerely, PHoto: Jonas Ahlsén 3

4 Market State of the Market Moving forward with good speed Henric Gard Director, Marketing & Business Development We have now moved well into 2010 and have left a, for the Club, good year behind us. This is true both from an underwriting as well as a financial perspective. Our recently published annual report 2009, available both on our web (www. swedishclub.com) and in printed form, shows clear evidence of that. The insurance year 2010 has so far been encouraging, and we have continued to add new members and additional tonnage to our growing P&I portfolio. From our latest basic facts, one may have noticed that we now have a combined P&I portfolio (owners and charterers) of approximately 44.2 million GT. When it comes to Hull, we have continued to navigate well during the first two quarters, and we will soon be entering the quieter summer period, which hopefully will give our staff a well-deserved rest and time to re-charge the batteries before the autumn and the renewal season begins. Overall, we are pleased to notice that our book of business is still performing in line with our expectations. Different patterns Last year s harsh economic realities have, without doubt, influenced the shipping industry. From a claims perspective, we have noticed different patterns during 2009 for P&I and for Hull. When it comes to P&I, our statistical material clearly indicates that frequency has not gone down because of less shipping activities during the downturn. Instead, we have noticed a slight increase in frequency, mainly in respect of crew claims, and a small increase in the average claim size compared to The average claims figure is, however, well below the corresponding figures for the years 2004 to For Hull, the same statistics paint a different picture, in that both frequency and average claims size seem to have decreased somewhat compared to Our analysis of all this is that the recession and the lower shipping activity have had a notable impact on Hull, whereas P&I seems unaffected by the economic climate. It also tells us that we have to be observant and quick on our feet to adjust our Hull model when the economy is returning to a more normal mode, in order to make sure that rating levels are commensurate with exposure taken onboard. Most of our fellow P&I clubs within the International Group have now also published their 2009/10 results, and overall it looks as if most, if not all, clubs are presenting positive bottom lines, although some clubs still struggle to get it right when it comes to the underwriting results. With new conventions coming into play, 4

5 Photo: istockphoto together with a stricter application of relevant laws in most jurisdictions, the need for further exposure adjustments is highly likely. Celebrating the past, the present and the future In 2010 we are celebrating 100 years of P&I, 30 years of our presence in Greece, and 10 years of our Marine Insurance Course. These are three important anniversaries in our companies long and proud history. We hope that you were able to celebrate these with us at our AGM, or that you will be participating at other venues hosted by the Club during the year. In late May a special supplement followed with Lloyd s List, dedicated to our company which not only summed up the past but also gave you a steer on how we view the future and where we are heading. We hope you have seen and read the supplement, and that you found it good and interesting reading. The supplement has been made possible thanks to our loyal members, business partners and suppliers supporting the publication with advertisements. Please accept our sincere thanks for your continued support, loyalty and commitment. Moving forward with good endorsements During 2010 I have visited all our offices, a large number of members, prospective members and business partners (brokers). I have taken part in our Club evenings in Gothenburg, Hamburg and Bremen as well as our members lunches in Piraeus and Istanbul and, last but not least, our annual breakfast seminar in Oslo. All the activities have been very well attended, and the common denominator in all these meetings and activities has been the positive feedback and appreciation for The Swedish Club and our ideas for the future that I and my fellow colleagues have felt and received. This strengthens and confirms our beliefs that we are moving in the right direction. It is of course very encouraging and a great motivator for all of us at the Club to increase the speed at which we move forward. It is also highly satisfactory to notice the increased interest in the Club and the positive reviews in industry reports that we have received lately from the insurance broker community. The brokers are, without doubt, our most important source and distribution channel for business, and our aim is to deepen our relationships with the broking community even further, to the benefit of both the Club and the brokers. An appetite for progress To sum-up, your Club is moving forward with good speed and with an appetite for further progress and as always you can rest assured we are with you all the time and all the way. 5

6 Club information News from Piraeus Photo: Nikos Kokkalias The port of Piraeus. Tord Nilsson General Manager Piraeus 30 years in Greece Thirty years ago, The Swedish Club opened a small office in Piraeus. It was our first office outside Sweden. It followed an, at the time, very controversial decision for the Club to transform from being a national to an international marine insurer. The shipping crisis of the late 1970s in combination with a government unsympathetic towards shipping had taken its toll on Swedish shipowners. They had invested heavily in newbuildings during the shipping boom a few years earlier. Now they were faced with severe financial strains, as expensive newbuildings had to go straight from the newbuilding shipyards to lay-up locations. To improve the balance sheet for the Swedish shipowners, many ships had to be sold and chartered back, and the keenest to buy were the Greeks. Many of the Greek owners had made a lot of money following the economic recovery after the second world war by trading liberty ships, which they bought at low prices after the war as tokens of appreciation from the allied forces for their contributions during the war. The Greeks were instrumental in securing overseas supply lines for the allied forces by providing them with seafaring expertise. The Swedish Club had very limited experience of Greek shipowning, although our first entry for a Greek shipowner goes back to around There was a big influx of new members, and the Club thought that the best way of getting to know these new members better and to continue to provide hands-on claims service was to open an office in Piraeus. The office was opened in 1980 by Stefan Length-Persson, who actually later became my first boss at the insurance broker firm of Arvid Bergvall AB. The first few years were successful with regard to the volume of new business, but results were a bit disappointing. Fredrik Kruse was sent down to take over after Stefan and to head our claims team. Volume of business was reduced and refined whereupon results improved. Since these humble beginnings, the office has thrived and developed through different leaderships and employees. Clas Rydén was the head of the office for almost 15 years, and really embraced the Greek shipping community, making the Club one of the major players in the Greek market. We now employ 16 people in the office and have about 100 members. The Greek shipping community has been very supportive of us, and we have seen tremendous loyalty from our Greek members over a long period of time. We have some shipowners who have been around since the beginnings and we currently have five board members from Greece Dr John Coustas from Danaos, Mr Demetri Dragazis from Latsco (London) Ltd, Mr Andonis Lemos from Enesel, Mr Diamantis Manos (representing the Constantakopoulos family) from Costamare and last, but far from least, Captain John P. Samartzis from JP Samartzis. So, where do we go from here? Well the target is set more tzatziki and more souvlaki. First of all we have to look after and take care of our current members and make sure that their best interests are looked after. Secondly, results are also something we need to be focused on, as good results will provide us with a stable financial base. Thirdly, there will be a renewed focus on attracting members who fit our profile, and with whom we can have long relationships with, as we want the next 30 years in Greece to elevate the Club to the next tier in The Swedish Club development saga. 6

7 Club information The Swedish Club Academy PhotoS: The Swedish Club Class of 2010 gathered outside The Swedish Club office. Marine Insurance Course 2010 Sharing knowledge and expertise The Marine Insurance Course was launched ten years ago, and has since proved to be successful and greatly appreciated among members and business associates. This year s course was held from 3 5 May, with 33 participants from nine different countries. The course deals with a range of major aspects of marine insurance, such as Protection & Indemnity, Hull & Machinery, Freight Demurrange & Defence as well as underwriting, reinsurance and loss prevention. The presentations and workshops are all led by in-house expertise with different areas of competence. We want to thank everyone involved in this year s event. The dates for next year s course are yet to be decided. Keep an eye on our website for more information. Discussions concerning Pollution with workshop leader Anders Holmberg. Mr Erik Heje Werenskiold of Marsh AS in Oslo receiving his certificate from the hands of Lars Rhodin. Thursday evening was spent on the island of Donsö where dinner was served at Restaurant Isbolaget. 7

8 Club information The Swedish Club Academy Out and about with The Swedish Club Academy 15 March 2010 MRM information seminar at Casa Marinero, Intramuros, Manila, Philippines. 17 March 2010 MRM seminar at Netship s Officer and Crew Conference, Manila, Philippines. 17 March 2010 Management representatives at OSG Shipmanagement s Officers Conference in Manila, Philippines, where an MRM presentation was made. 8

9 New MRM training providers Martin Hernqvist Managing Director The Swedish Club Academy AB 19 March 2010 MRM Workshop Leader training for Philippine training providers at Marlow Navigation Training Centre, Manila, Philippines. 7 May 2010 The MRM presentation at the Danish Maritime Authority s annual staff conference was well received. (However, the photo was taken during the conference s team building exercise.) Azalea Maritime Training Centre, Bijela, Montenegro On 23 April, The Swedish Club Academy signed an MRM training agreement with Azalea Maritime Training Centre in Bijela, Montenegro. The Training Centre trains seafarers both in STCW and tailor made courses for various Principals one of the most important being the Mitsui O.S.K. Lines Ltd to whom Azalea Maritime also supplies well trained crew. Norwegian Maritime Officers Association, Oslo, Norway An MRM training agreement has also been signed with the Norwegian Maritime Officers Association in Oslo, Norway. The association s main purpose is to take care of its members economic and social interests, and to improve overall safety at sea. By the end of 2005, the association had 7,800 members who served in foreign going vessels, domestic trade, offshore service, fishing vessels and other shipping trades. The association s headquarters is located in Oslo, with branch offices in Bergen and Ålesund. 25 May 2010 Workshop Leader training for our new MRM training provider Azalea Maritime Training Centre in Bijela, Montenegro. 9

10 Club information News from Asia Photo: istockphoto Hong Kong from Victoria Peak. Ruizong Wang Managing Director Hong Kong Shipping development in Asia particularly China Many new shipping companies emerged in Asia, and in particular in China, in the aftermath of the international financial crisis, predominantly in the dry bulk sector. The underlining thinking for most companies as regards getting into shipowning was to take advantage of lower ship prices and the general belief that China s economy will continue to grow at fast speed for many years to come, which generated demand for shipping. Although many new owners may not be very optimistic about the immediate future of the shipping market, they argue that they would be in a better position to survive even if the shipping market gets somewhat worse. They would have a competitive advantage due to lower financial costs on their ships compared to those owners who bought their ships at much higher prices. Many of the new owners are not entirely new to the shipping business. They have, one way or the other, been involved in the shipping or sea transport business. In China, many of the new owners had the painful experience of paying very high freight costs for the cargoes they had to carry, and witnessed the good days during the period from 2004 until the first half of 2008, the unprecedentedly prosperous market in shipping history when the owners pocketed huge mount of profits. Many of the new owners have their own cargo or control over some cargo they trade. They would think they had the comparative advantage in controlling the cargo they trade. When times were bad in shipping, they would give priority to their own ships to carry their cargo. Large steel companies, state owned or private, almost all set up their own shipping arms to own or control ships. All five state-owned thermal energy power companies have established joint venture shipping companies to own ships; many commodity traders, particularly dry bulk traders, also bought into shipping. Even some shipyards were forced to become shipowners, where some buyers had defaulted on taking delivery of the ships in the yards. Many new shipowners have also benefited from relatively easy finance for buying ships in China. Chinese banks were largely unaffected by the international financial crisis, or credit meltdown. Actually, due to the Chinese Central Government s stimulus plans and appropriate relaxed monitory supply policy aimed at powering China s economy through the financial crisis, ship finances are relatively easy for many new owners. A number of large Chinese banks showed a keen interest in getting into ship finances, where they have stayed away in the past. China s Central Government is now trying to cool down the over-heated property market, and tries to limit the money supply to the real estate market. It may be expected that more money will flow from the Chinese banks into ship finances. On my recent trips to China I heard stories that many shipowners have placed newbuilding orders, taking advantage of easy finances and lower new building prices. It appears certain that many newbuildings are to come. 10

11 Legal Immigration Expo 2010 Photo: istockphoto New immigration regulations for the sea-bound area Amazing skyline of Pudong district in Shanghai, China with all the buildings of World Expo Opposite the Bund on Huangpu River. Jason Wu Assistant Claims Executive Team Asia Expo 2010, officially Expo Shanghai China, is being held at Shanghai (from 1 May to 31 October). The site of the event is at both ends along the Nanpu Bridge- Lupu Bridge area, situated along both sides of the Huangpu River; this is in the central area of Shanghai City. The Chinese people will focus on their theme better city, better life and try their best to present to the world that this is a successful, splendid and unforgettable exposition. Without doubt, 2010 Shanghai Expo will be the largest international gathering of its kind. The area of the 2010 Expo covers 5.28 square kilometres straddling the Huangpu River, and more than 190 countries and 50 international organizations have registered to participate in the exposition, as with million visitors anticipated to come from both home and abroad, it is expected to be the largest ever. A wide range of security measures On the other hand, the Shanghai government is very cautious about such a largescale exposition, and a wide range of new security measures are, therefore, being considered, in order to ensure that the exposition will be as secure as possible, in order to display the country s fast development and growing power. The security measures mainly apply to three areas: transport on sea, air and land. As far as sea transport is concerned, new, temporary immigration regulations are being imposed by the Shanghai Government on ships calling at Shanghai port or its vicinity. These regulations are imposed on a temporary basis and follow exactly the same period as Expo 2010, starting from 1 May 2010 and ending on 31 October Under the new regulations, the Immigration Official will apply a stricter custody policy on ships calling at Shanghai port or its vicinity, by sending boarding immigration officers to stay on board the ship; the officers will switch their duty every five days, all costs/expenses associated with this are charged to the shipowners. To which vessels do the new regulations apply? The new regulations strictly apply to the vessels calling at Shanghai Port when: They are sailing through the Huangpu River (where the terminals of Shanghai are located), especially for vessels sailing within the expo exhibition area. (located close to the Lu Pu Bridge on Huangpu River, as mentioned above); They are at an inner anchorage/outer anchorage (including Wu Song, Jiang Ya, Heng Sha, Chang Jiang Kou and Lv Hua anchorages); the vessels who are at the unique inner anchorage, Wu Song, would be placed under comparatively stricter custody. Who will pay the extra expenses, and what costs might be regarded as an extra expense? It should be pointed out that, as per the customary practice of the port of Shanghai, no security/immigration officers are required to board or stay on board when the ship at the anchorage. Due to Expo 2010, this practice is now being imposed, and the shipowner is required to cover such extra expenses, that is: lodging/ meals/transportation, etc. Any suggestions for the shipowner? The new regulation is applied without exception to all vessels who meet the above conditions. Owners have no alternative, but are required to pay the extra expenses. However, the shipowner is recommended to check with their agent for a possible cost reduction. Some agents are able to obtain a reduction by relying on their good relationship with the relevant department. Should you have any further questions regarding to this new regulation, please do not hesitate to contact me by sending an to jason.wu@swedishclub.com 11

12 AGM Annual Report Members from around the world gathered in Göteborg on 17 June for The Swedish Club s 138 th Annual General Meeting. Presenting his report, Managing Director Lars Rhodin noted the significance of The Swedish Club is celebrating 100 years as a P&I provider. He also noted that 30 years had passed since the Club opened its offices in Greece, an important landmark in the Club s international development. He said the Club had enjoyed three decades of very good relationships in the Greek market and described 2009 as a successful year in which many of the most important goals were achieved. Managing Director Lars Rhodin presenting his report at the Annual General Meeting. Lars Rhodin said that The Swedish Club is on track to expand its insurance portfolios and enhance its financial strength. Positive outcomes were achieved across all classes of business in There had been significant growth in the P&I portfolio. Furthermore, the Club s Hull Action Plan had produced excellent results ahead of forecast. The year ended profitably, with a surplus double that achieved in The Club s free reserves now stand at a record level. The perfect storm Lars Rhodin told the AGM: Shipping has passed through a very difficult time. It might be described as The perfect storm. This industry is a cyclical business, but the speed and force with which the freight markets collapsed took everyone by surprise. For The Swedish Club however, the sun came out again in 2009! We achieved an underwriting surplus and investment returns recovered. The Swedish Club produced an underwriting surplus of USD 14.8 million in 2009 (USD 7.2 million in 2008). Free reserves rose from USD million to USD million. An excellent platform for progress The Club s Managing Director said that the absence of major claims over the past two years, the easing of claims inflation, a strong P&I performance and the achievement of a combined ratio of less than 100%, over two consecutive years, gave an excellent platform for more progress in a new era of selective, controlled growth. He commented: We are interested in fleets supported by high quality management teams, both shipboard and shore-based. He added: During 2009 we took some important initiatives. We enhanced our risk management capabilities, through the introduction of new internal Capital Model. We also completed the biggest change in our reinsurance arrangements for a quarter of a century, consolidating our requirements in a new and more cost-effective multi-line approach. In addition, we established The Swedish Club Academy AB, a new vehicle to further develop the Maritime Resource Management (MRM) training network, now with 60 licensed providers. We are focusing on the central issue - the human element. 12

13 Photo: Jonas Ahlsén Marking a century of service with a year of achievement Claims frequency In the P&I sector there was an increase in claims frequency, largely due to a rise in crew claims. As for H&M, there were fewer large claims due to the world economic downturn and lower levels of shipping activity, together with slow steaming. On the P&I front, the largest single claim fell just below the Club s retention. Three new Board Members In presenting his report, Lars Rhodin paid tribute to the efforts of the Club s Board. He also welcomed three new members to the Board: Michael Vinnen, Managing Partner of F. A. Vinnen of Bremen; Fred Cheng, Chairman of Shinyo Group Ltd, of Tokyo; and Sun Jia-Kang, Managing Director of Cosco Container Lines, Shanghai. The highlights of The Swedish Club s year included: A doubling of the operating surplus, to USD 14.8 million (with insurance activities and investment income making broadly equal contributions). A net combined ratio of 94%. A P&I book, as at 1 July, of 1,342 vessels totalling 44,2 million GT (28 million GT, owners P&I). FD&D cover provided for 711 vessels. A Hull & Machinery portfolio of 1,357 vessels (54.4 million GT), with a total value of USD 11.5 billion. The future will hold fresh challenges Looking ahead, Lars Rhodin concluded: Our members operate in an extremely harsh regulatory environment. Their liability burdens grow year on year. Whilst the recession has reduced the number of major claims and may have resulted in a lower level of attritional claims, regulatory enforcement is now so tough that even the global economic deep-freeze has failed to reverse the prevailing trend of higher claims costs. We know shipping is an easy target for regulators. We know that environmental sensitivities can only increase and that traditional maritime defences will continue to be eroded. Put simply, there is now zero tolerance of mistakes. This will continue to influence insurance exposures in the future. We must also remember that claims frequency and cost can be expected to rise during a period of economic recovery. The future will hold fresh challenges, but Lars Rhodin concluded: The Swedish Club s aim, as always, is to provide the best available insurance service to members. 13

14 AGM New Board member Continuing a proud family Michael Vinnen is Managing Partner of F. A. Vinnen & Co, the oldest shipping company in Bremen and one of the oldest in Germany. This company was founded in 1819 with origins back to 1797 and was named F. A. Vinnen in 1912, under the leadership of Michael Vinnen s great grandfather. Now a member of the Wünsche Group, F. A. Vinnen operates a fleet of 10 container vessels, with capacities of up to 4,300 TEU. New Board Member Michael Vinnen, F. A. Vinnen & Co Michael Vinnen looks forward to the company s bicentennial in 2019: We are proud of our history and remain traditional in our approach - in the sense that we take good care of our crews, ships and commercial relationships. Many relationships are long-established and a number actually predate containerisation! F. A. Vinnen has a fleet of ships built from the mid-1990s onwards. Michael Vinnen: We specialise in medium range container tonnage and the vessels trade worldwide mostly in time charters. We are very much at home in this sector. We prefer a lively market and we participate in a dynamic business environment. We have considered other areas of shipping but, for the present, we remain firmly focused on the container trades. This is a huge industry and offers plenty of scope for growth. Member of the Club since 2006 F. A. Vinnen has been a Member of The Swedish Club since Currently, all vessels in the fleet are entered for Hull & Machinery. The latest delivery is Hyundai-built, a 4,300 TEU Panamax delivered last December. A sistership will join the fleet in early Historically, F. A. Vinnen ships were built in Germany, Poland and, more recently, Korea. Michael Vinnen says: We now look to Korea and China for future projects and we are actively exploring the market. Charter rates have improved of late but, at the same time, the price of good quality secondhand tonnage has risen even faster. At present, market trends favour a solution based on newbuildings. 14

15 tradition Photo: Jonas Ahlsén Encouraging signs in the market Encouraging signs in the market have appeared of late: Very recently, we began to see the first new orders for containership newbuildings since the Summer of This is a signal. We want to continue to develop our fleet, growing in size overall and, at the same time, replacing some of the older ships - although replacement, as such, is not a pressing issue. We have no interest in high energy expansion. It is much more important to maintain our profile of high quality, in a strong combination of good ships and attractive financial projects for ourselves and possible coinvestors." Seventh generation shipowner Michael Vinnen is a seventh generation shipowner. The company he heads has the energy of a young management team: We are young in outlook and our ability to respond effectively to changing market conditions. This combination of youth and history is echoed in our offices. Our building is 100 years old but has a new, ultra-modern top floor offering panoramic views across the Weser. Michael Vinnen spent five years with other German owners before joining F. A. Vinnen in He succeeded his father, Christel Vinnen, in He recalls: My father stepped back and made the transition easy for me. By then I had come to appreciate the value of his way of doing business. This approach is based on close long-term relationships with charterers, yards, suppliers and many other parties. We always put the emphasis on people. Taking a positive view of future prospects Looking at future prospects in the container trades, Michael Vinnen takes a positive view: When things went bad last year, some players said they could see no future in the business. They were wrong! The recent shortfall in Panamax tonnage saw rates jump very quickly almost as fast as when they went down! Market forces are working well and this market is very much alive. Container shipping is a vigorous sector and it will continue to grow faster than the world economy as a whole. There is still plenty of scope for natural growth in this business. At the same time, we should expect the market to function in a more volatile way in the years ahead. Indeed, it is likely to prove just as volatile as other shipping sectors. F. A. Vinnen s current priorities include the continued exploration of strategies to grow to a fleet of around 15 ships: In our view, newbuilding prices are likely to remain favourable over the next 12 months. We have the financial resources to order new ships and we may well do so in this environment. Shipping is a small community Shipping has a strong hold on Michael Vinnen: I have now spent 16 years in this business and I am proud to continue the family tradition. I have very fond early memories of visiting my grandfather in his office and accompanying him on visits to the port of Bremen. What I really like about shipping is the people. This industry is a small community, even at the international level. It is very different to many industries which, today, are largely anonymous in character. I like the international aspect of shipping globalisation has been a reality in this business for a very long time. An Economics graduate from Freiburg University, Michael Vinnen joined a Boston-based investment bank. His four years at university were followed by a similar period working in other fields before he entered shipping. By then I was ready. I wanted to be part of the shipping business. I took my own path and demonstrated to myself that I could succeed in other fields and with other owners before continuing the family tradition. Michael Vinnen and his wife, Julia, have three young children: two boys and a girl. I try to keep my weekends free for the family. My wife and I are interested in music and we sing in a church choir. I am very fond of Bach, but also like popular music. I m proud to join the Board Turning to F. A. Vinnen s relationship with The Swedish Club, Michael Vinnen says: We decided to leave the German market four years ago. We are very happy with our move to The Swedish Club. It is a very good Club and I like its personal approach, which is perhaps not so evident in Germany. I am surprised and proud to join the Board. It is a great honour. I will do my best to fulfil expectations! I have a tendency to get fully involved and I welcome fresh opportunities to give something back to the industry, as I do at the social level within my local community. The Swedish Club has an important contingent of German Members and, naturally, I can offer a German perspective on issues before the Board. I also have some natural advantages, in that I am half German, half Scandinavian! My mother is Finnish. My Grandmother was Swedish. Not surprisingly, I have a deep affection for Sweden. 15

16 AGM New Board member The market is good and is Fred W. Y. Cheng is widely known as an experienced VLCC (Very Large Crude Carrier) player. The Chairman of Tokyo-based Shinyo International is the driving force behind Vanship, the VLCC joint venture established with UNIVAN s founder, the late Captain Vanderperre. New Board Member Fred W.Y. Cheng, Shinyo International Fred Cheng recalls: We set up the joint venture in 2000, beginning with a couple of vessels acquired from and chartered back to Dreyfus. We did a lot of bulk carrier business, ordering four Panamax newbuildings from Japanese yards. Our VLCC activities began in 2002, with the acquisition of a single-hulled vessel chartered to Formosa Petrochemical Corporation. We then purchased our first double-hull, in a joint venture with SK Shipping Co Ltd. A special affinity for VLCCs Fred Cheng has been active in shipping for 37 years: People regard me as a VLCC man. I have always had a special affinity for this class of vessel. This began during the Summer of 1973, when I was a graduate working with my father who was a shipowner. I remember we were driving to the New York office, crossing the Brooklyn Bridge. We suddenly saw the TT Brooklyn, one of the last VLCCs to be built in the Brooklyn Yard. This ship was magnificent - she seemed to fill the entire East River! Later I had a chance to talk to some of those involved in her construction. They told me that many finishing touches, including the masts, were left to later, to ensure she cleared all the East River bridges. I became more impressed when I appreciated that day rates for VLCCs could be as high as USD 120,000! This is equivalent of around halfa-million a day in 2010 terms! We have seen rates of up to USD 200,000 in recent times, but this is still less than half what a VLCC could command in I get it right on most occasions That day on the Brooklyn bridge shaped Fred Cheng s life: Over the years I haven t been too bad at predicting the VLCC market. I get it right on 16

17 set to get better Photo: Jonas Ahlsén most occasions. And I have seen some extremes. From the highs of the first half of the 1970s, the VLCC market declined and stayed down for the best part of 25 years. By the mid-1990s, however, Fred Cheng was convinced that it was time to order new generation VLCCs: Several factors led me to this conclusion. Firstly, the 1970s-built VLCCs were approaching 25 years and their replacement was inevitable. Secondly, I was the first to see that China would have a huge impact on global shipping markets. In essence, I got the timing right and began ordering in During my career I have signed orders for over 30 VLCCs. Fred Cheng has experienced the downs as well as the ups. He has learnt many lessons, not least the importance of direct control of business enterprises. He bounced back in 2000, following a meeting with Captain Vanderperre: He wanted to get into owning and he was prepared to invest to achieve his goals. The result was Vanship. We now operate a core fleet of six double-hull VLCCs. The latest newbuild was delivered this June and we are expecting another new vessel in June of next year. Most of our tankers are on long-term charter to Cosco s Dalian-based tanker arm. Our other long term charter customers include Sinochem, Formosa Petrochemical, SK Shipping and S-Oil. Looking to a future of profitable trading Having experienced market highs and lows over four decades, Fred Cheng knows that something completely new can always arise: It is true that I have seen most things, but what I had not seen (nor had anyone else) was a global banking crisis of such proportions. Naturally, this put everyone under great strain. Yet there are also positive aspects. We saw the shipping markets bounce back strongly during At the same time, the banking crisis retarded ordering, especially in the VLCC sector. Today s market is by no means bad and that brake on ordering bodes well for the future. In my view, we can now look forward to two or three decades of profitable trading, with good times typically lasting twice as long as bad times. An appetite for good business Captain Vanderperre died in September of last year, but Vanship continues. Fred Cheng retains an appetite for good business: I want to expand the core VLCC fleet, as this, in my opinion, is still the best market in shipping. It looks good and is set to get better. We can expect 2011 to be broadly similar to this year but we should reach a very good market in Fred Cheng s views are shaped largely by the strong growth potential in markets such as China and India: Last year we went through the worst economic downturn in memory, yet the number of cars on Chinese roads increased by 50 per cent. That is mind-boggling! In India, new highways now link the big urban centres and car sales are soaring. With this in mind we are seeking new sources of capital. We continue to develop very good relations with the Chinese banks. We refinanced our first newbuilding with China Merchants Bank and we are currently considering proposals involving China Construction Bank, concerning the second new VLCC. Our current financiers also include ICBC, DVB, BNP, Credit Suisse, NIBC and the Bank of Nova Scotia. Shipping is addictive Fred Cheng is an outright enthusiast for shipping: It is addictive - as anyone involved in it will tell you. Besides, people like me have no real choice. We have a skills set which simply isn t applicable elsewhere! When he has an opportunity to relax, Fred Cheng likes to watch movies: I love movies of all kinds, but particularly science fiction and fantasy. If I had to do something other than shipping, I would like to make movies. Fred Cheng and his wife have three children, now in their twenties. His two sons are involved in transportation and shipping. Fred Cheng s father was proud of his roots and often talked of the importance of planting seeds: He was talking about relationships and he was right. He used to say that you only need one or two seeds to flower in order to prosper. In this business, human contact is everything. Honoured and proud to become a Board Member Vanship has five VLCCs entered with The Swedish Club for P&I and FD&D. Fred Cheng reflects: Once again, it is all about personal relationships. Our links to this Club go back to the days of Lars Lindfelt. I am happy, honoured and proud to become a member of the Club s Board. 17

18 AGM New Board member Continued expansion in the Dr Sun Jia-Kang, Managing Director of COSCO Container Lines, (CO- SCON) Shanghai, joined the Board of The Swedish Club in June. COSCON has been a member since Currently, it has 21 vessels entered for P&I insurance and 20 vessels for Hull & Machinery cover. New Board Member Dr Sun Jia-Kang, Cosco Container Lines A Senior Engineer with a PhD in Management, Dr Sun joined CO- SCO at Tianjin in 1982 and served, successively, as Section Manager, Deputy Manager of the Shipping Department, Manager of Container Transport Division III and Manager of Container Transport Division II, the latter at COSCON s Beijing headquarters. His later career involved a series of senior appointments: General Manager of the Transport Division, Assistant President of COSCO (Group) Company, Vice-President of COSCO Hong Kong and Vice-President and Managing Director of COSCO Pacific Co. Ltd. He became COSCON s Managing Director in COSCO is a vast enterprise and CO- SCON now ranks with the largest providers of container shipping services. Dr Sun is proud of COSCON s remarkable growth: We now rank No. 1 in China and Asia and No. 4 in the world, with a capacity of around 600,000 TEUs. We will certainly continue to expand. The COSCON fleet will be enlarged by the delivery of many newbuildings over the period. By the end of 2013 the COSCON fleet will have a capacity exceeding one million TEUs. The current fleet consists of over 150 vessels. Dr Sun: The largest of the ships are in the 10,000 TEUs class. We already have eight vessels of this type; they began to enter service during We now look forward to the delivery of the first of our 13,000 TEUs vessels. The first of this mega class, building at Korean and Japanese yards, will be delivered next year. Greater operating efficiencies These huge ships offer much greater efficiencies. The per unit advantage amounts to around 20 per cent in reduced costs, over smaller vessels. At the moment our newbuilding programme is made up of 43 ships, totalling some 400,000 TEUs. The orders include eight 13,000 TEUs vessels and 20 ships in the 4,000 TEUs class. We have also placed orders for vessels of 5,000 TEUs. Dr Sun has some strong views on the balance between vessel size and trading efficiency: The trend towards larger vessels is driven by economics. It is possible that we will see the arrival of 16,000 TEUs vessels by At the same time, COSCON believes that 13,000 TEUs is the optimum size for mega container ships, at least for the foreseeable future. The current capacities of the Suez and Panama canals, both actual and envisaged, set the limit at this point. We want to achieve economies of scale and remain free of operating restrictions. Very good future prospects On the status of the container trades following the savage global downturn, CO- SCON s Managing Director is optimistic: I believe this industry has very good future 18

19 container trades prospects. The pace of recovery is likely to be slow over the next two or three years, but the recovery will continue. We will work with our commercial partners to support this recovery, after the financial difficulties of recent times. Dr Sun joined COSCO 28 years ago: I have spent virtually my entire working life with one company. Early on, I spent time in the tanker chartering department, followed by periods in the container and bulk carrier businesses. In 1993, COSCO s container operations were centralised in Beijing. I spent 10 years in Beijing before moving to Hong Kong in 2002, as Managing Director of COSCO Pacific. Four years later I went to Shanghai as COSCON s Managing Director. Photo: COSCON One of the most interesting aspects of COSCON is that it is active in so many areas of the container business. For example, COSCO Pacific is the leading shareholder in the world s largest container manufacturing plant. Our activities, of course, also include large enterprises concerned with container leasing and logistics. Well-defined set of commercial goals COSCON s Managing Director has a well-defined set of commercial goals. Dr Sun has three fundamental priorities. The first, naturally, is to select the right strategies for future direction. Secondly, I have direct responsibility for the selection of senior managers holding key positions around the world. In South East Asia, our Headquarters is in Singapore. In Europe, we are headquartered in Hamburg and in the United States our main offices are in New Jersey. In all, COSCON has 17 main branches across the world. Our success depends heavily on regional leadership of the highest quality. Thirdly, there is the vital matter of cashflow. The last two years have been difficult and world financial structures have been under enormous strain - to the point where virtually every company in the world was short of money! It is very important that financial barriers to growth are overcome. Fortunately, COSCON has the financial resources to overcome such challenges. COSCON operates over 80 international shipping routes, connecting over 150 major ports in more than 50 countries. This impressive global service network includes over 400 sales and service points. The company takes pride in delivering schedule accuracy. On the domestic front, over 20 services are provided. COSCON also has over 300 freight operations in Beijing, Shanghai, Shenzhen, Hong Kong, Xiamen, Qingdao, Guangzhou, Dalian, Tianjin and other coastal and inland cities. Major engine for the world economy Looking at China s place in the world economic order, Dr Sun says: China, of course, is a major engine for the world economy. At this time, however, the United States and the European Union countries are the two economic groups which provide the main engine. From the perspective of the developing world, however, China is very important not least because it creates confidence amongst the developing economies. It serves as a positive example of achievement. Dr Sun s day consists of a busy round of briefings and meetings: I arrive early in the morning, check my s, get up to speed with the news and deal with any urgent business. I also draft agenda notes for the Daily Operations Meeting. The usual series of conferences and meetings then continues. Every day is very busy! Dr Sun s wife is a design graduate and a specialist in architectural design. Their son is studying at the University of Cornell in the United States: He studies finance and economics and has obtained a Master s in Applied Economics. He is now working on his PhD. I don t think he will follow a career in shipping; his future is likely to be in economics or banking. Pleased to be joining The Swedish Club Board Turning to COSCON s relationship with The Swedish Club, Dr Sun said: This Club is very special, with solid traditions and a very professional management team. He adds: I am very pleased to be joining the Board of The Swedish Club. I hope to contribute, drawing on my knowledge and experience. The atmosphere between Club members is very friendly. The Club s Directors come from many different countries, cultures and business backgrounds. These differences are a strength, as we can help and support each other. 19

20 AGM Keynote speaker Carola Weidenholm Corporate Communications Zap in to the Hom You see them on busses and trains, in the supermarket queue and cruising in the streets, literally anywhere you turn even in your own home. They are the new species: Homo Zappiens. Born with a computer mouse in one hand, a mobile phone in the other, and with an earpiece stationed in the right ear they seem to be able to do a thousand things at the same time. At this year s AGM Wim Veen, Professor of Delft University of Technology, gave us an insight to their world and view of life. Homo Zappiens are born in the 1990s or later and have grown up with TV, video games, Internet and mobile phones as a natural part of life. They are used to multi tasking like watching TV, listening to music, surfing the Internet and speaking or chatting with their friends in the same breath. They also search for knowledge in a new way; scanning the information on for example a website, looking for symbols, icons and colours instead of starting to read. They do the same thing with a book, instead of reading it from start to finish. Modern communication technologies have taught them from an early age to develop new skills and exhibit new behaviour that may show us how future society will be organized and how it will deal with technology. Taking control of information Earlier generations watch Homo Zappiens with a sigh, calling them unfocused and torn in different directions, but for them it is everyday life. And actually, research Homo Zappiens High speed Multi tasking Non-linear approaches Iconic skills first Connected Collaborative Active Learning by searching Learning by playing Instant payoff Learning by externalising Using fantasy Homo Sapiens Conventional speed Mono tasking Linear approaches Reading skills first Stand alone Competitive Passive Learning by absorbing Separating learning and playing Patience Learning by internalising Focused on reality The characteristics of Homo Zappiens vs former generations according to Wim Veen (based on Marc Prensky) on this species show that they can zap four-five TV programmes at the same time and afterwards, when asked, give an account of what happened in all of them. It isn t magic, but rather a strategy where they have learnt the communication structure of TV shows and to process discontinuous information to create an entirety. Children of today think and act different in dealing with information. They learn to select from birth and do not feel the information overload, as they are better prepared to deal with it. They also use devices that customise and give them control over the information flow washing over us every day. You rarely see them stuck listening to the radio or watching TV; instead they go online and choose from a website when and where to watch or listen to a programme or a song. Nor do you see these kids sitting and waiting for information or knowledge to come to them; they just go on-line, put out a question and in just minutes they can have answers from people all over the world. These so called net geners even have a written lingo of their own created to fit the screen, where for example CWOT means complete waste of time, FTF face-toface and gr8 means great. Pretty smart when you mess about on the mobile and want to save space and time, but it is sometimes impossible for us of ancient generations to understand. Innovative tools for learning Statistics tell us that 15 million people play the videogame World of Warcraft and in the Netherlands alone 65 % of the youngsters are gaming every day. It must influence them in some way badly say most adults, but research shows the opposite. Gamers learn social structures, to achieve targets, to decide a strategy and as they play together they gain power only when it is accepted by the group all very important skills for an employee to function well in a work place. Researchers have also shown that there is no relationship between violent games and violence in real life. Our offices are becoming more and more virtualised with e-learning and net conferences, and already today surgeons can learn how to operate before working on us humans. The police can work a virtual crime scene to learn how to act in reality without risking to destroy evidence. This saves a lot of time and money and is also ecofriendly as you can reduce travelling. Shell has taken these new ideas to heart and have, to- 20

21 Photo: Jonas Ahlsén o Zappiens gether with Delft University, created a virtual 3D exact replica of a drilling site where the workers learn how to act when on board. Employees practice tasks drawn from reality by making choices of actions in different situations and the system gives them back a reaction of good or bad. It may be about how to take care of chemical waste or to detect the mistakes, in for example the equipment, shown on the screen and correct them by clicking the mouse on different icons. This has been part of reducing the accidents on Shell substantially. Homo Zappiens in a work place According to Wim Veen, we are moving from a representative culture to a participatory, where vertical institutions face a horizontal public domain due to a steep increase of access to information. This also means that we are going from closed economies to open and from hierarchically built organisations to flat. The reasons are the opportunities to share information and knowledge and the new generation s willingness to collaborate, which will reshape the structure of future companies. To begin with, Homo Zappiens can be hard to catch as they have other demands on a job than the regular Homo Sapiens. So what can you do to attract them to your office? We already know that they are the generations for whom learning is playing and school is for meeting friends rather than learning. For them it is important that work is a constant challenge or they will get bored. Freedom is also of the essence the boss telling them what to do or not to surf the Internet during working hours will not have a happy, committed Homo Zappiens. Creativity is the third catchword. Ask them to solve a case in a new way and provide them with questions that need answers with new perspectives. As you can see in the summary on the facing page Homo Zappiens and Homo Sapiens are shaped in different ways. How will we marry these two into a work place? This is the Gordian knot of the future for companies to solve. The advice from Wim Veen can be summed up as: take the Homo Zappiens into your enterprise in the same way as you would have acted if you where merging with another company. Take the Homo Zappiens into your enterprise in the same way as you would have acted if you where merging with another company. Next to their physical existence Homo Zappiens also have a virtual existence and they are of equal value. They integrate the two worlds and do not consider them different it is a natural part of their life according to Wim Veen's research. Wim Veen in brief Occupation: Professor at Delft University of Technology in Holland. Background: Secondary school teacher, and teacher trainer. Known for: his research into new concepts for learning and the changing pedagogy that comes with uses of Information and Communication Technologies (ICT) in education. He is working on new forms of learning for insurance, furniture, IT, oil and other process industries across Europe. Books: Homo Zappiens: Growing Up in a Digital Age, written together with Ben Vrakking Current: speaker on the subject Homo Zappiens learning & teaching in future education at The Swedish Club s Members Day

22 AGM Panel discussion Why do people make mista Human behaviour and the The Swedish Club s Members Day 2010, on 17 June, included a panel discussion on the sensitive issues surrounding marine accidents and the significance of human error. Martin Hubbard, Head of the P&I/Marine Liabilities Division of Lloyd s Brokers Tyser & Co, acted as Moderator. In his introduction he said that human error had long been recognised as a primary cause of marine accidents and claims. The problem is compounded by the severe crew shortage, estimated at around 50,000 seafarers. Martin Hubbard set the tone for the debate by asking: Do we have to accept that crews will always make mistakes, or can we reduce errors? The four panellists were: Rob Grool, Group Managing Director of Wallem Shipmanagement, Hong Kong; Captain Gustaf Grönberg, Senior Vice-President and Fleet Captain of Star Cruises, Malaysia; Peter Grönwoldt, Managing Director of Harren & Partner Ship Management, Bremen; and Martin Hernqvist, Managing Director of The Swedish Club Academy AB, Gothenburg. The panel considered four key questions: 1. Is there a correlation between shoreside management and accidents on board ships? 2. What are the main reasons for fewer casualties for tankers and cruise ships compared to others? 3. What are the features of a genuine safety culture? 4. Does ISM make a difference in reduction of errors? Rob Grool Wallem Shipmanagement No blame culture is a total nonsense Rob Grool became Group Managing Director of Wallem one of the world s leading shipping and ship management groups in He joined The Swedish Club s Board the following year. Rob Grool holds strong views about the ISM Code. He supports the Code s intent but remains an outspoken critic of its effectiveness. Rob Grool said that a company s management style, standards, procedures and safety culture all have an impact on the way the ship is run. Yet, at the same time, a ship cannot be run from the office: The people on board have to manage their ship. All we can do is to support, train, brief, de-brief, guide and, to some extent, check on them. He described the no blame culture as a total nonsense: Such a thing cannot exist. If you follow best or good working practices, if you abide by the company regulations, if you follow tested and proven procedures, then still things can go wrong. But at least you have followed best practice. However, if you shortcut or ignore good working practice, then you are loading responsibility on your shoulders, for which you will be held accountable. Call it blame; I don t mind. You knew better and still you decided that you could get away with giving up control over a risk. You will be blamed for that. At the same time, Rob Grool stressed that seafarers should be made to understand that policy does not include shooting the messenger bringing bad news: I suppose it is human nature to try to hide mistakes and talk down the extent of the damage, but we all know that bad news does not improve with age. Through our predeparture training, briefing and daily communication with the ship we must give the people on board the comfort that they can always call for help and that the only stupid question is the one you did not dare to ask. As for fewer tanker casualties, Rob Grool challenged this perception: we find that tanker crews have more personal accidents and tankers have more navigational near misses than bulk carriers, car carriers and other dry cargo ships. He said that bulk carrier crews get more practice, given their high intensity workload. On safety culture, Rob Grool said safety awareness could not be imposed by memos and instructions: Safety culture does not mean taking no risks! It means knowing what you are doing, reducing risks to manageable levels and not being afraid to hit the emergency stop button, taking a step back, assessing the situation and then move forward again knowing that the management will back you 100%. Rob Grool made short shrift of the question concerning ISM s effectiveness, pointing out: we will never know what the industry would have been like without it. ISM was, however, not a new thing at the time of its arrival. Much more comprehensive safety codes and systems existed long before. 22

23 kes? reasons why Captain Gustaf Grönberg Star Cruises Errors are accepted but negligence or carelessness is not. Captain Grönberg joined Star Cruises, Malaysia, shortly after its establishment in As Senior Vice President and Fleet Captain, he has oversight of a safety and quality regime designed to zero accident principles. He joined The Swedish Club s Board in Gustaf Grönberg said commitment from top management is the most important factor for accident-free operation, including recruiting the right people and offering them good conditions which motivate and retain them. He said: A high staff turnover is a serious threat to safety. He cited the use of psychological assessments in industries such as nuclear power, civil aviation and aerospace. Star Cruises has been applying similar tests since 1997 for the recruitment of deck and engine officers. He also underlined what is at stake, given that Star Cruises vessels operate daily in some of the world s most congested waters, including Hong Kong and Singapore. On the issue of no blame culture, he said: Whereas an honest error is accepted, negligence in not following Standard Operating Procedures (SOPs) is unacceptable. There is a clear dividing line between acceptable and unacceptable behaviour. He went on to emphasise the role of SOPs in the early detection of errors. As for fewer casualties involving cruise ships, Captain Grönberg had no doubts as to the reason: Many cruise companies have adopted the pilot co-pilot system for their bridge operations and have implemented SOPs that are designed to reduce the risk of a one person error accident. These SOPs have been developed to detect and trap an error before it leads to serious consequences. Once again, Gustaf Grönberg made a clear distinction: Errors are accepted but negligence or carelessness is not. He added: There must be a strong encouragement to report near misses and own errors with reporting systems in place that should be simple to use. People need to feel that they are reporting such incidents without fear of being blamed. According to Captain Grönberg, a good safety culture has been achieved when people follow SOPs because they want to, not because they have to. Star Cruises Fleet Captain had some criticism of the ISM Code. He said its aim was to minimise poor decision-making contributing directly or indirectly to an accident yet the ISM Code does not address human factors at all! He warned: This is a serious deficiency and needs to be recognised and addressed if the ISM Code is to be effective. Captain Grönberg said that The Swedish Club s Maritime Resource Management training addressed the key human factors. Due to a fundamental gap in the ISM regime, he argued that error management must be developed as a vital part of a proper Safety Management System for shipping. In aviation it is understood that, because of our limitations, human error cannot be entirely eliminated but must be managed. Star Cruises has made efforts in our navigational procedures, trying to put in place defences, so that no single human error shall result in a serious accident. The cornerstones are the pilot co-pilot system, closed loop communication and a strong emphasis on challenge and response between the two navigators. Good training is a worthwhile investment Peter Grönwoldt Harren & Partner Peter Grönwoldt became Managing Director of Harren & Partner Ship Management in He has special expertise in the areas of insurance and claims. The substantial Harren fleet is operated to standards which exceed current regulatory requirements. Peter Grönwoldt addressed the fundamental question: Why do people make mistakes? He has no illusions: The reason for a mistake is always, without exception, human error. Collisions, groundings, explosions all happen because of human error. He emphasised the point by observing that no vessel volunteers to become a casualty. He added that people make mistakes for three reasons: lack of training or poor quality training, ignorance, or an over-estimation of their skills and experience. Peter Grönwoldt said good training may be expensive but it is a worthwhile investment. The Harren & Partner approach is to apply quality management 9 continues on page 24 23

24 AGM Panel discussion 9 continues from page 23 strategies throughout the entire fleet of tankers, bulkers, container feeders and other ships. Training takes place on the company s premises before officers join vessels, regular seminars for officers and crews are held and there is strong emphasis on shipboard training, backed by a simplified reporting system for both shipboard trainers and supervisory teams. Peter Grönwoldt added: We see too many crew members who obviously got their licences and certificates under the Christmas tree or similar places and who pass medical examinations even though they can t see red or green or are otherwise seriously ill when testified fit for service. We need to learn more about our limitations Martin Hernqvist The Swedish Club Academy AB Martin Hernqvist is Managing Director of The Swedish Club Academy AB, established at the beginning of this year to continue the highly successful development of a global network of 60 Maritime Resource Management (MRM) providers. Martin has been closely associated with MRM since its introduction during the early 1990s. Martin Hernqvist began with the premise that people make mistakes when mental picture and reality differ. He said: People don t make mistakes deliberately they do what they think is right! He continued: We need to learn more about our limitations, focus on attitudes and establish safe organisational cultures. Maritime Resource Management helps to ensure that when people take decisions they have a mental picture which corresponds with reality. Martin Hernqvist then addressed a potentially sensitive issue: the influence of culture on the individual s ability to challenge mistakes and unsafe acts. The sensitivity, of course, surrounds culture when linked to nationality. Using a Power Distance Index as a tool, he said that it showed that Malaysians, Panamanians and Filipinos were the least inclined to challenge, whereas European nationalities are most inclined to challenge. He went on to say that there were actually three cultural influences at work: nationality, professional and organisational. He stressed that the latter was where the real work needed to be done: Organisational culture exerts a very strong influence on behaviour on board vessels. Questions, answers and comments from the floor Moderator Martin Hubbard stirred the open session with two questions: Does the increased fear of criminalisation encourage people to cover up errors? How serious does a mistake have to be in order to sack someone? Several Members responded, dealing with a range of issues: John Coustas (Danaos Corporation) said that performance incentives conflict, to some extent, with safety: People make mistakes. We say safety is No. 1, yet we reward performance. Instead, we must put safety culture above performance. Christiane Scola (Reederei Nord Klaus E. Oldendorff) pointed to cultural influences and questioned the excessive westernisation of regulatory systems. Martin Hernqvist responded by referring to the Power Distance Index and the goal of moving people from the risk-exposed end of the scale to the less dangerous end. The Swedish Club s Lars Malm asked what triggers a safety culture which exceeds regulatory requirements. He also asked whether there was a payback for such investment. Captain Grönberg, of Star Cruises, responded. He said that, in his company s case, the level of commitment was so strong that all solid proposals for safe, accident-free operation were funded. He added: I can demonstrate that our investment produces insurance savings. He then gave an example of an error in which an officer failed to follow the SOP and call the Master when proceeding in confined waters in foggy conditions. Fortunately, the officer did challenge the Pilot and a serious incident was avoided. Nevertheless, an investigation found that the officer s attitude was inappropriate: It was an unacceptable error and we had to let him go. Khalid Hashim (Precious Shipping) asked whether any advice could be offered to the CEO of BP in a catastrophic spill situation. Rob Grool (Wallem) made the comment: If you think training is expensive, try having an accident. Lars Rhodin, Managing Director of The Swedish Club, brought the session to a conclusion with the observation that one of the key points was the need to make a clear distinction between what is an acceptable error and what is unacceptable behaviour. 24

25 AGM Out and about PhotoS: The Swedish Club Marlene Bernaert, Marsh nv, and the other guests at her table on speaking terms with a waiter, also from Café Kølbert. Early Arrivals Dinner at the Concert Hall on 17 June A waitress from Café Kølbert flirting with Brian Starer at Squire, Sanders & Dempsey, New York. The dinner for early arrivals with the traditional seafood buffet was this year served a stone s throw from the hotel where most of the guests were hosted. The entertainment for the evening was given by Café Kølbert a crazy bunch of waiters and waitresses. More pictures from the dinner for early arrivals can be found on under the section Out and About. Celia Lopera Merino of Muñoz & Montañes in Valencia enjoyed good company at the table. Joe Balls at Omni Ltd, London and the head waitress from Café Kølbert keeping an eye of the other waiters. The Swedish Club toast masters and choir, consisting of from left: Jakob Osvald, Tony Schröder, Lars Malm, Henric Gard and Lars Rhodin encouraged the guests to sing-along. Cheering guests at the dinner tables waiting for the dessert to be served. 25

26 AGM Out and about PhotoS: Jonas Ahlsén About 250 guests attended the traditional AGM dinner at the Banquet Hall, Elite Park Avenue Hotel. AGM Dinner on 17 june The traditional AGM Dinner was held at the Banquet Hall, Elite Park Avenue Hotel on 17 June. Kjell Blixt, Éclair Rederi AB, Stockholm attended his 50 th consecutive dinner this year. Jacqui Owen sitting to his left. More pictures from the AGM Dinner can be found on under the section Out and About. 26 Christiane Scola, Reederei Nord Klaus E. Oldendorff GmbH, Hamburg, enjoying a good dinner and nice company at the table.

27 After the dessert, the entertainment Duratrion entered the stage with their dynamic performance and the festive evening ended on a high note with a sparkling indoor fireworks show. Lars Rhodin handed over a donation to the Swedish Sea Rescue Society, represented by its chairman, Folke Patriksson. John Coustas of Danaos Corporation had the honour to hold the speech of thanks after the AGM dinner. 27

28 AGM Out and about The Swedish Club Grand Classic at Delsjö Golf Club on 18 June Closest to pin was won by Tom Prest, Willis and he was also the winner of Longest Drive. PhotoS: The Swedish Club More pictures from the golf tournament can be found on under the section Out and About. The Best Team winners were from left: Ma Lianjun, GC Tankers, Singapore, Ruizong Wang, The Swedish Club Hong Kong and Tu Shuoqing, China Shipping Container Lines, Shanghai. Henric Gard congratulates Sune Johansson, Fairwater Marine AB, Gothenburg, the winner of The Swedish Club Grand Classic

29 PhotoS: The Swedish Club Team International standing and Team Sweden sitting in front. The Swedish Club Mutual Cup As always the AGM festitivies started with the traditional soccer game at Heden. It was a tough and exciting soccer match and finally Team Sweden managed to beat Team International by five goals to two, including a penalty kick by Erik Johansson in Team Sweden. Beverages and snacks were served during and after the game and quite a few spectators had found the way to watch the game. Beverages and snacks tasted good on this sunny afternoon. More pictures from the Mutual Cup can be found on com under the section Out and About. It was a tough fight to win the ball Supporters for Team International watching the game. but all players are friendly thanking each other for a good and fair game! 29

30 AGM Out and About A day on the Swedish West Coast going south On June 18, a bus trip was arranged for Varberg, which is a small summer town on the West coast an hours drive from Gothenburg. The trip first went to the fortress right by the sea and Varberg Museum with The Bocksten Man. He is a medieval bog corpse the only one in the world in a costume preserved from the 14 th century. The reconstruction of his face and body gives you the opportunity to come face to face with a man from the Middle Ages. After the visit to Varberg, lunch was served at Restaurant Nord 57 o at Träslövsläge close to the sea before the bus went back to Gothenburg again. Posing outside the fortress. Standing from left: Paul Bertolo, Cobelfret NV, Antwerp, Maria Vanagtmael, Michael Vinnen, F. A. Vinnen & Co Sitting from left: Nina Johansson, Carola Weidenholm and Karoline Alfredsson, all representing The Swedish Club. PhotoS: The Swedish Club Lars Rhodin, to the right, enjoying the nice weather with the Club s correspondent in New York, Don Messick and his wife Janice. Lunch was held at restaurant Nord 57 o at Träslövsläge, a short drive from Varberg. From left: Richard Walker, Risk Exchange Ltd, HK, Michael Vinnen, F. A. Vinnen & Co, Bremen, Cheryl Starer, Lars Rhodin and Brian Starer of Squire, Sanders & Dempsey, New York. 30

31 Club information Anniversary Time for celebration 100 years of P&I As we are reminded from time to time, The Swedish Club possesses a long and glorious history. Established almost 140 years ago, the Club is still thriving, maintaining its independence and its unique position as the only true all-in-one marine insurance provider. Particularly in England, a plethora of mutual hull clubs had developed during the 18th and 19th centuries. The first Nordic marine insurance company was, however, actually established in Copenhagen in The history of marine insurance, Frans Malmros Former Managing Director of The Swedish Club ( ) which is considered to be the oldest and most international of all forms of insurance, is as old as the river and caravan trade in Assyria. It spread from there to the merchants in the Mediterranean area, to the city republics of Italy and, with tradesmen emigrating, to northern Europe. The history of Protection & Indemnity clubs, however, is much shorter and the first such association, Shipowners Mutual Protection Society was formed in London in It was later renamed Britannia Steamship Insurance Association Ltd, and is still very much in existence. One of the reasons for the establishment of P&I clubs was undoubtedly the great flood of people emigrating from Europe to America in the middle of the 19th century, and the burdens placed on shipowners in terms of loss of life and personal injury claims. At the time of its formation, The Swedish Club focused solely on insuring the hull and machinery of Swedish flag steamers, most of them British-built, second-hand tonnage. Going through the Club s approximately 2,500 metres of archive, it can be established that the first time the concept of an Indemnity Club was mentioned was in connection with the foundation of Skuld in The Club s directors were of the opinion that they were not in a position to deal with such matters, but at the same time considered Skuld s statutes of such importance that they obtained copies to be circulated among their members. In the majority of cases, however, Swedish owners entered their vessels for P&I risks with The West of England. A new Club After more than ten years of consideration, the Association took the important decision in 1910 to form a P&I Club, as an affiliated company, with the same board of directors and the same management as its parent company. The new club was actually not mutual in the true sense of the word, as it was owned by the hull club and not directly by its insured. The rules were strongly influenced by existing ones. Members of the new entity consisted solely of members of the hull association, and the operation commenced on 1 January 1911 with an entry of 157 ships. Policy number 1 was issued to the steamer Håkan, of Göteborg, 499 GRT, owned by the Steamship Company Avanti. The premium amounted to SEK The s/s Håkan was built at South Shields, England in The S/S Håkan Here, it may be opportune to remind our readers, just briefly, of the essential difference between P&I cover and Hull cover. The former indemnifies the shipowner against his legal liabilities, whilst the latter indemnifies him against the physical loss of or damage to his ship. In some cases, however, the two covers overlap. Why P&I? The underlying reason for the creation of P&I associations, like The Swedish Club and its English colleagues, was the increasing liabilities being placed on shipowners. It goes without saying that even in earlier times, shipowners were subject to legal obligations but enforcement was, at best, weak. Some historical milestones might be of interest: 1870 The owners of the Westernhope found liable for loss of cargo The first Workmen s Compensation Act was passed. 9 continues on page 32 Photo: By courtesy of Båtologen/Klubb Maritim 31

32 Club information Anniversary 9 continued from page The Hague Rules were put into effect In the case of Furness Withy v. Ruder, it was established that liability for damage in collision arising under a towage contract and not by reason of negligence on the part of the injured vessel, was not a liability by way of damages. The risk was therefore not covered, and subsequently the P&I rules were extended to cover the liability. The unique all-in-one concept was born! As a natural consequence of the ever increasing shipowner liabilities, the P&I clubs continued to modernise its rules to meet the demands of new legislation. The matter of reinsurance was always high on the agenda and until the early 1920s it was mainly the German market that was deemed to offer satisfactory terms. In 1923 however, a shift towards the London market was initiated, and a long period began of placing the Club s reinsurance with Lloyd s Underwriters. The P&I business continued to develop well, and Swedish shipowners, by and large, were happy to place their risks with the Club. By the end of the 1940s, there were moves in the Board to merge the P&I Club with the Hull Club, and in 1950, assets and commitments were transferred to the original Swedish Club. The unique all-in-one concept was born! Reinsuring with competition Negotiations concerning reinsurance continue to be an important issue, and in 1956 the Board is advised that the London market is unwilling to renew the contract on acceptable terms. The consequence was that the Club accepted an offer of reinsurance from the West of England. The first tangible contact was made with the London Group of P&I Clubs (The London Group), which later was to be renamed The International Group of P&I Clubs (IG) Through the reinsurance arrangement with West of England, The Swedish Club became one of its largest members and as such, was offered a seat on their Board and, from 1982 to 1991, one of The Swedish Club s Directors also participated in West of England s committee meetings. Back in 1899 five P&I Clubs, namely the UK Club, Britannia, the Standard Club, Newcastle and Sunderland entered into the first pooling agreement. Today, all 13 mutual P&I clubs are bound by a pooling agreement as well as what can be called a non-competition agreement. The Swedish Club became a full member of the International Group as of 20 February Nine out of ten ships plying the oceans of the world are covered by the members of the International Group. Going international The internationalisation of the Club took off in earnest a few years after the Suez Canal crisis in The Club s speedy action concerning the two Swedish vessels, the Nippon and the Killara, trapped in the Canal together with twelve foreign ships, made its mark on the international shipping arena. According to Swedish war risks conditions, the vessels were to be deemed to be total losses, if they could not be utilised by its owners within ten months. The ten months having passed, the Club promptly paid SEK 46 million to the owners. No other market had ever reacted so swiftly, and a favourable image of the Club was created. Merger talks The international hull membership grew at a good pace but, regrettably, this could not be said of the P&I business to the same extent. Discussions have been initiated on a number of occasions in the Club s history, about mergers and coordination with other insurance companies with a view to broadening the base of the Club s activities. The latest such discussions were the rather far-reaching negotiations with Skuld in In all instances, however, talks, discussions and negotiations led to nothing. The Club s leading idea of independence from other insurance companies, remains to this day! Tragedy, blackout, the marbled murrelet Among the 2.5 kilometres of files, preserving the history of the Club, there are naturally a great number of tales of tragic, dramatic, curious and even fictitious claims and on many occasions claims involving large sums of money. One tragic case involved a Swedish passenger vessel en route from Göteborg to New York. As a precautionary measure, the ship s self-closing doors, which, among other things, closed all the corridors, were tested every day at a definite time. The passengers had been alerted and the test was preceded by an alarm signal. Two middle-aged ladies, however, interpreted the signal as abandon ship and threw themselves through the closing door and became jammed in them. Each of them had an arm cut off. Another case, less tragic, but with international entanglements as a consequence, occurred in the Sound, which separates/connects Sweden and Denmark. The vessel, registered in Helsingborg, sailing from Oslo to the Swedish port of Helsingborg, cast anchor in the roads, allowing the office staff to have a party on board. At the same time, the Contiscan Cable, which unites the Swedish and Danish power supply, broke in two, and legend has it that darkness spread across both sides of the Sound. The youngest deck hand, who had been at the forecastle when the anchor shifted, remembered having seen blue electrical arcs in the water. The Master, on his first command, lost his job. In November 1997, the bulker MV Kure ruptured her hull while shifting along the berth in Humbolt Bay, California. As a result, 1872 Foundation of The Swedish Club 1910 The Swedish Club P&I Association established 1923 Reinsurance placed at Lloyd s 1924 The Hague Rules agreed 1926 Workmen s Compensation Act 1936 Extension of P&I rules 32

33 17.2 tonnes of bunker oil was spilt in an ecologically sensitive area. Clean-up costs alone amounted to about USD 11 million. On the environmental side, the worst affected resource was a bird, namely the Marbled Murrelet, a species that nests only on the mossy branches of old growth Californian Redwood trees. To compensate for the loss sustained to that bird species, already on the verge of extinction and listed as threatened and endangered in the U.S., the Club agreed to purchase harvesting rights from commercial forest companies in northern California enabling the Marbled Murrelet to continue its precious life. Such harvesting rights do not come for free... The Marbled Murrelet. and a bizarre claim Fraudulent behaviour is regrettably not uncommon, and on occasions private surveillance is used with the aim of disclosing the truth about a person s medical status. Injured persons claiming to Photo/creator: GUS VAN VILET SOURCE: U.S. F ISH AND WILDLIFE SERVICE be more or less immobile have been found driving their cars to the supermarket for weekly shopping or indeed coaching their children s football team. A bizarre type of fraud was discovered in relation to a seafarer who, due to severe stomach pains, had to be disembarked en route from Nigeria to Sao Sebastio in The crewmember was taken off the vessel by helicopter and brought to hospital in Vitoria, Brazil where his condition was diagnosed and a hemicolectomy allegedly preformed. Once the seafarer was repatriated to Manila he again suffered considerable pain and had to be admitted to hospital. The treating physician became suspicious of the medical records received from the hospital in Vitoria during the medical examination performed and decided to take precautionary measures in obtaining medical evidence of what was established during the course of the surgery. It became obvious that the hemicolectomy (an operation to remove part of the large bowel) allegedly performed and charged for had not taken place at all. When confronted with the X-ray film and DVD evidencing the true circumstances and the minor surgery performed instead of the required hemicolectomy, the Brazilian doctor involved had to reconsider his position and the invoice he had issued. The list of more or less plausible P&I cases is virtually inexhaustible. Claims handling puts the Club s experts to the test every day. Owner s P&I cover capped Until the late 1990 s shipowners P&I cover was unlimited and the P&I insurance and the hereto attached reinsurance with overspill arrangements were designed to cater for all eventualities. But in time, with legislation becoming increasingly hostile towards shipowners, sentiments for limiting indemnities were expressed in many quarters, and in 1996 the clubs of the International Group agreed on a formula, where a ceiling was set, albeit a high one. The future ain t what it used to be Unlike our predecessors, who on many an occasions doubted the wisdom of being active in the P&I arena, I am not. The competition may be razor-sharp, despite the non-competition agreement between the 13 International Group clubs, but The Swedish Club is known for its swift and fair claims handling, its ambitious and skilled staff and its unrivalled member-oriented approach. The advantages of a self-managed club are obvious, and a steady stream of new members has come to appreciate our way of doing business. One of our predecessors used to quip The future ain t what it used to be! But it never was. We have to change with the times, and The Swedish Club will continue to do just that, always skilfully responding to members needs The P &I Association merg ed with the Hull club 1956 Agreement to reinsure with West of England 1970 Board discussions whether to insure foreign flag vessels 1971 Non-competition agreement between the P&I Clubs 1982 Full membership of The London Group of P&I Clubs 1996 Introduction of limited liability in P&I 33

34 P&I Cargo Liability Justice at last! The Supreme Court of New Zealand handed down its decision in the Tasman Pioneer case on the 16 April 2010, finding in favour of the Tasman Orient Line. The case had been lost in two previous instances, but the Supreme Court put things straight and corrected the lower courts misinterpretation of Article 4(2) (a) of the Hague Visby Rules, which protect a carrier in respect of loss or damage arising or resulting from act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship. Fredrik Kruse Senior Claims Manager Team Göteborg III The Tasman Pioneer was a general cargo vessel on time charter to Tasman Orient Line. The owners were entered with The Swedish Club for both P&I and H&M. The charterer was the carrier under the Bills of Lading and the defendant in these actions. At the time of the accident, the vessel had left Yokohama, after having arrived from New Zealand with containerised cargo, and was bound for Pusan. The master was running behind schedule, and saw an opportunity to take a shortcut and save time by steaming between the islands of Biro Shima and Kashiva Shima, at the southern end of the central Japanese island of Shikoku, instead of following the usual route to the open sea. It was not a very good decision to make this night-time transit at a speed of 15 knots with strong winds at 35 knots and rain partly obscuring the radar images. However, during the narrow transit the master did decide to abort the passage, but the vessel had come too close to the island of Biro Shima and touched bottom twice, at 0255 on 3 May In spite of the grounding, the master kept the vessel steaming for a couple of hours before he anchored and then called the owners, who in turn called in the vessel s underwriters. A few days later, the vessel was beached, with cargo holds numbers one and two completely flooded. The master was later criticized for his post-grounding conduct, as he failed to notify the Japanese Coast Guard of the grounding or to appoint Nippon Salvage to avoid further aggravation of the cargo damage. Instead, he continued his voyage for a couple of hours after the grounding incident, although he knew that the vessel was taking on water and was down by the head. However, there were no evidence presented that damage to the cargo was aggravated by any subsequent events following the grounding. It was the grounding alone that led to the flooding of cargo holds one and two, and it actually took about a week for the salvors to mobilise pumping equipment to start refloating the vessel. Settlement negotiations Prior to the case proceeding before the High Court of New Zealand, we made serious efforts to settle with two local New Zealand law firms, each representing various cargo claimants to the amount of USD 8.7 million and USD 3.4 million. The charterer as defendant managed to limit liability to about USD 4 million, and a corresponding limitation fund was established. GA contribution from cargo was about USD 2 million. We held several meetings with both claimants, and in the end managed to settle with the smallest claimant, whilst the other decided to go forward with the court proceedings. The High Court of New Zealand The first court hearing was held 9 May 2007, and continued over subsequent days. The plaintiffs main argument was that it was not the grounding itself that had caused damage to the cargo, but rather the master s post-grounding misconduct, which seriously aggravated the loss and was the main cause of the plaintiffs extensive losses. The defendants could not rely on Article IV Rule (2) (a), because the master did not act in good faith after the 34

35 Photo: The Swedish Club Had the decision of the High Court and the Court of Appeal stood unchallenged, there would have been a great deal of uncertainty as to what error in navigation encompassed. The Tasman Pioneer. casualty. The master could not be said to be navigating or managing the vessel if he acted in bad faith. The defendants submitted that the correct interpretation of the exemption in Article IV was that, even if damage to the cargo arose indirectly from a failure adequately to care for the vessel, as long as the carrier exercised due diligence as to seamanship and providing a competent crew, he is protected from the consequences of incorrect decisions made by the master and the crew. The defendants referred to a number of cases which were all examples of the principle that, whatever the master does in management or in navigation, even if driven by his own motives, remains within the exemption. The Judgment The High Court concluded that the master s initial decision to try to use the restricted passage to speed up the voyage, and his subsequent decisions to abort the passage, were motivated by good faith, and thus made in the navigation and the management of the ship. However, after the grounding the master s decisions were made in order to absolve himself from responsibility or blame for the grounding. Consequently, those actions did not amount to an act, neglect or default in the bona fide navigation or the management of the ship, and the exemption did not apply. Judgement was, therefore, awarded in favour of the cargo interests. 9 continues on page 36 35

36 P&I Cargo Liability Cargo Iron Ore Fines 9 continues from page 35 The Court s interpretation of Article 4 Rule 2 (a) came as a complete surprise to the maritime world, since none of the leading texts had identified any bona fide elements in the Rule. The decision was criticized, because it cannot be correct that the carrier has to depend on the subjective intentions of the master in order to be able to refer to the exemption. The Court of Appeal of New Zealand The carrier appealed the lower court s decision, arguing that the defence was available for any navigational act, reckless or otherwise. The majority of the court concluded that the conduct of the master was not an act, neglect or default... in the navigation or in the management of the ship for the purpose of Article IV (2) (a), because such selfish and outrageous behaviour could not be conducted in the navigation or management of the ship. The actions of the master in his delay in notifying salvors and local authorities had not been motivated by his paramount duty to the safety of the ship, crew and cargo, but by his intention of avoiding blame. The majority of the court dismissed the appeal. None of the judges however considered there to be any reason for implying an obligation of good faith into the Article IV(2) (a) exclusion, and the High Court judgement can, therefore, be treated as not being good law. The Supreme Court The carrier s application for leave to appeal to the Supreme Court was granted, and the case was heard in October The Supreme Court rejected the approach of both the High Court and the Court of Appeal, and went on to say that the carrier is responsible for loss or damage caused by matters within their direct control i.e. commercial fault, such as the seaworthiness and manning of the ship at the commencement of the voyage. However, the carrier is exempted from liability for the acts or omissions of the master or crew in the navigation and management of the ship, unless their actions amount to barratry. Since barratry was never pleaded, it was not possible to argue that the master s actions constituted barratry. The Supreme Court held that the carrier is protected by the exemption in Article IV (2)(a) and allowed the appeal. Comments The decision of the Supreme Court of New Zealand was welcomed. Had the decision of the High Court and the Court of Appeal stood unchallenged, there would have been a great deal of uncertainty as to what error in navigation encompassed. It would not have been in the interest of a uniform interpretation of the Rule to read in requirements in addition than those already available in the leading texts. This is even more important today, when we see many countries expressing heavy criticism of the Rotterdam Rules which might postpone a ratification of this convention and extend the further application of the Hague Visby Rules amongst the major trading nations. Iron Ore Fine Bruce Hung Claims Manager The Swedish Club Hong Kong Ltd Iron Ore Fine is cargo sensitive to moisture content, and it endangers ship s stability if it loads with excessive water content. It creates a free surface effect,and the ship might lose her stability at sea and end up sinking. Most shipowners are aware of the risks when loading iron ore fine or the like, or concentrate in South East Asia, and in particular at Indian ports. When a few sinking incidents occurred immediately after loading of a similar cargo at Indian ports, evidence indicated that the cargo had greater moisture content than permissible. The most recent incident as reported was the sinking of the Hong Kong Flag ship Asian Forest on 18 July It is important for shipowners to consider how to ensure that the ship can sail from the loading port with sufficient stability and at a safe mode throughout her voyage. In order to achieve this, shipowners in a majority of cases are to nominate their own surveyor whenever their ship is calling at these ports to load Iron Ore Fine or the like. The surveyor appointed is required to inspect the condition of the cargo before loading, and more importantly, its moisture content (by both can test and laboratory analysis) which must be within the TML (Transportable Moisture Limit). This is to reconfirm and ascertain that the information provided by the shipper is correct when, according to BC Code loading of bulk cargo, the shipper is obliged to provide a cargo quality certificate for their cargo to the shipowners prior to loading, This prevents the possibility that, the cargo might have been exposed to rainy weather while it is waiting for loading at quayside, although analysis of the cargo might have been completed by the shipper s surveyor days before. The survey fee normally in this circumstance is for the safety of the ship, and is on account of the shipowners who ordered the survey. On 28 May 2010, the Indian Ministry of Shipping issued a circular to all Port Trust of Indian ports in which it defined that various requirements have to be complied with by parties including the shipper, port, vessel agents, shipowners, master 36

37 loading at Indian Ports (c) On the completion of loading, the holdwise finding of the P&I surveyors on the moisture content and the cargo trimming is required to be submitted. (d) A shiftwise report of the P&I surveyor on CAN test and on the spot moisture test is required to be submitted. (e) The vessel s agents are to provide a declaration to the port that the vessel is strengthened to load high density cargo in all the cargo holds, and they are also required to submit the relevant page of the stability booklet. (f) There should be a continuous survey by the surveyors appointed by the charterers/shippers. C. The surveyors representing the other interests will have to work along with the P&I surveyor, and their findings should meet with his satisfaction, and has to be accepted/approved by the owners surveyor. Iron Ore Fine cargo sensitive to moisture content. and charterers etc, these including but not limited to the following compliances: Compliances A. A P&I surveyor has to be appointed by the owners P&I club or the owners themselves (head owners themselves). The surveyor shall produce his job assignment letter from head owners/ owners P&I club to the authorities to confirm that he is really representing the interest of the owners (head owners)/their P&I Club. The P&I surveyor has to confirm/accept/certify the results obtained by the charterers surveyor/shippers surveyor before it is submitted to the Mercantile Marine Department to issue the clearance for the vessel to sail. This procedure is vital to have the confirmation/assurance on the cargo loading from a surveyor who is appointed by the vessel s interest (owners/owners P&I). In most cases, the charterers /shippers surveyors are more inclined to make savings for the cargo interests by ignoring the safety of the vessel. B. The authorities have also specified other compliances to ensure that the safety of the vessel is maintained throughout. Some of the compliances are as follows; (a) TML certificate provided by the shippers together with the shipping bill to be issued by a Directorate General of Shippingapproved first class laboratory. (b) The moisture content certificate for cargo drawn from the vessel s holds during loading is to be issued by a Governmentapproved laboratory. D. In addition to the above, all the other specifications required to be complied with have to be met in order to get MMD (Mercantile Marine Department) clearance. E. Please note that without MMD clearance, an MDC (Marine Dues Clearance) will not be issued by the port and without an MDC the Customs will not issue the port clearance. Playing an important role In the above circumstance, owners/p&i club s surveyor is playing a very important role in certifying that the cargo is within the requirement in particular as regards its moisture content, and moreover in accepting the findings of the shipper/charterer s surveyor. A ship cannot obtain a port clearance from the port authority without a P&I -approved surveyor attending the ship on her loading of Iron Ore Fine at Indian ports. This obviously becomes a statutory requirement/rule of the port. Recommendation Owners are, however, recommended to arrange their surveyor s attendance via their P&I club or the club s local correspondent for their ship loading this cargo at Indian Ports. If they have their ship time-chartered out, it is suggested they ask the charterer to pay the survey fee, or at the time of fixing the cargo to have this survey requirement taken into their account, so that there is no doubt, and have the clause clearly stated in the Charterparty that the cost of this survey is on the account of the charterer. The above Information is mainly provided by GAC India 37

38 Injury NHS Opportunism and the UK Nigel Griffiths Chairman of the Marine Advisory Medical Service London & Singapore Nigel Griffiths is a specialist in medical law and frequently used as an expert by The Swedish Club. The Overseas Visitors Hospital Charging Regulations 1, last revised in 2007, directs Health Care Trust s (HCT s) in UK on how and to whom charges may be levied in respect of medical treatment. The United Kingdom has entered into agreements with various countries for the provision of free healthcare for overseas nationals, when the illness arises in UK. Recent evidence has shown that HCT s have been attempting to charge ship owners for medical treatment of crew without reference to the legislation in place. Recently, the Marine Advisory Medical Service has uncovered and disputed two substantial bills of GBP , and GBP from two different HCT s. This opportunistic approach by HCT s shows a deplorable ignorance by the staff who should be most familiar with the provisions contained in the legislation. Free of charge All Accident and Emergency treatment in UK, is free of charge to all nationals (Sec 6.7), and no charge is actually made until the patient is admitted as an inpatient. All nationals of member states of the European Union (EEA) are entitled to free healthcare under the European Community (EC) Social Security Regulations (Regulations (EEC) 1408/71 and 574/72), with the exception of the UK s Channel Islands, which fall outside of the provision. The European Health Insurance Card (EHIC) was introduced in 2004 and is the preferred option for identifying individuals entitled to free healthcare. However, in accordance with Sec 7.12 possession of an EHIC card is not an absolute requirement to receive All necessary treatment free of charge. A passport, (National) identity card is sufficient evidence. Exceptions Exceptions do exist as follows (Sec 7.16 a f): Andorra, Monaco, San Marino, the Vatican City, Greenland, Faroe Islands, UK s Channel Islands and Northern Cyprus. For the purpose of the Regulation it does include the following (on a territorial basis): France: Guadeloupe, Martinique, Guyenne, French Guiana, Reunion, St Pierre and Miquelon. Spain: The Balearic Islands, Canary Island, Ceuta and Melilla. Portugal: The Azores and Madeira. Bilateral agreements are also in place with the following countries: Anguilla Armenia Australia Azerbaijan Barbados Bosnia British Virgin Islands Croatia Falkland Islands Georgia Gibraltar Iceland Isle of Man Kazakhstan Kirgizstan Macedonia Moldova Montenegro Montserrat New Zealand Russia Serbia Slovenia St. Helena Tajikistan Turkmenistan Turks & Caicos Islands Ukraine Uzbekistan Who is entitled to free care? As a great number of seafarers are from countries listed above, their entitlement to free health care is of significance to many shipowners. Investigations have shown that local agents are unfamiliar with who is and is not entitled to free care, and rely on the Overseas Patients Manager to guide them. It is especially important that agents do not enter into an agreement for the seafarer to be treated as a private patient, which would invalidate the overseas privilege to free or reciprocal healthcare. To protect the public interest, in addition anyone presenting with an infectious communicable disease listed in the following table, or anyone detained under the mental health legislation 3 (6.7g) of England and Wales or Scotland, irrespective of nationality are entitled to free healthcare. Presently the EEA countries are as follows 2 : Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Irish Republic Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom 38

39 National Health Service Infectious communicable diseases Acute encephalitis Acute poliomyelitis Amoebic dysentery Anthrax Bacillary dysentery Cholera Diphtheria Food poisoning Leprosy Leptospirosis Malaria Measles Meningitis Meningococcal septicaemia (without meningitis) Mumps Ophthalmia neonatorum Paratyphoid fever Plague Rabies Relapsing fever Rubella Salmonella infection Severe Acute Respiratory Syndrome (SARS) Scarlet fever Smallpox Staphylococcal infections Tetanus Tuberculosis Typhoid fever Typhus Viral haemorrhagic fevers Viral hepatitis Whooping cough Yellow fever There are special provisions for seafarers. Any seafarer working on a UK registered ship is also entitled to free healthcare in UK. Offshore workers in UK waters and on the UK sector of the Continental Shelf are entitled to free healthcare, providing his employer or contractor has his principal place of business in the UK. A commonly encountered defence from Overseas Patients Managers is that the illness did not arise in UK, in instances when the illness or accident arose at sea. The document states clearly (ch 9 Page 54) that if the seamen s need for treatment arose in UK, or on a voyage to the UK, it will be treated as arising in UK. In practice we have also demonstrated that a ship that has diverted towards UK to disembark a seafarer, is by definition also considered to be bound for UK. The seafarer personally is never responsible for settlement of the bill, the onus always being transferred to the ship owner under Sec HIV is given special mention, and is not treated free of charge, but any treatment for associated communicable diseases, for example tuberculosis are (sec 6.7f). It is much easier for the HCT to claim from a third party such as a ship owner as this involves much less paperwork than recouping the funds via government channels, and the money is received much faster by the Trust. Notwithstanding, it serves as no excuse that to seeks payment for a service which should be provided free and is not, is not an acceptable mechanism open to the HCT. Concluding, the two major reasons given by Overseas Patients Managers for not accepting entitlement under the Regulations are: That the accident or illness did not arise in UK or The EEA national must be in possession of a European Union Health Insurance Card Both of the above are invalid arguments and are addressed in detail above. Any bill presented to anyone who is exempt is unlawfully presented, and as such should be returned to the HCT endorsed that it is unlawful, stating the reason together with supporting evidence (copy of passport, etc). Footnotes 1 Implementing the Overseas Visitors Hospital Charges NHS 2nd Ed For continuing update of European Union Member States please refer to: europa.eu/about-eu/27- member-countries/index_ en.htm 3 Mental Health Act 2007, and Mental Health (Care and Treatment) (Scotland) Act 2003 Photo: istockphoto 39

40 Pollution ITOPF This is ITOPF Dr Karen Purnell Managing Director ITOPF, London Dr. Karen Purnell is a graduate of the Royal Society of Chemistry, with a PhD in chemical physics. Before joining ITOPF as a technical adviser in 1994, she worked on toxic waste management and environmental remediation in the nuclear industry and as a research chemist at several universities. Since then she has attended several major oil spill incidents in many different countries including the Sea Empress, in the UK in 1996, the Prestige in Spain in 2002 and the Tasman Spirit in Pakistan in In May 2009, Dr. Purnell succeeded Dr Tosh Moller as Managing Director of ITOPF upon his retirement. The Torrey Canyon incident in 1967 acted as the catalyst for the compensation regimes that are in place today, as well as the establishment of ITOPF. The International Tanker Own For those of you who knew my predecessor, Tosh Moller, you will appreciate that I have the benefit of an even higher vantage point from which to see farther than one might get from standing on the shoulders of men less lofty in stature! As a scientist I would agree with Newton s words: in order to gain a clearer view of where ITOPF should be in the future, it makes sense to review the past and to reflect Sir Isaac Newton, 1676 on some of the principles that form the foundation of the Federation. With the support of the entire team at ITOPF, we ve If I have seen further it is only by standing on the shoulders of giants been doing precisely that and asking ourselves, what is it that makes ITOPF such a unique and valuable ally to our shipowners and their P&I insurers? The establishment of ITOPF When ITOPF was first established as a not-for-profit organisation in 1968, it was primarily for the purpose of administering the shipowners voluntary compensation regime, TOVALOP (Tanker Owners Voluntary Agreement concerning Liability for Oil Pollution). However, ITOPF s founding fathers also foresaw the need for a team of well qualified scientists able to offer 24/7 technical support in the event of a spill of oil or Hazardous and Noxious Substances (HNS). With the termination 40

41 Photos: ITOPF ITOPF Technical Advisers on site during an incident. ITOPF Technical Advisers are available 24/7 to provide technical advice to all parties on behalf of its shipowners and their insurers. ers Pollution Federation Ltd of TOVALOP in 1997, this very quickly became the key service provided by the Federation. ITOPF has now grown into a mature and well respected organisation comprising 28 staff who are either part of the team of technical advisers on emergency call or who play a valuable role supporting it in some other way. All can benefit from ITOPF Undoubtedly, the wisdom of those responsible for establishing the Federation s funding mechanism is to be commended. By paying dues in proportion to the tonnage insured for P&I cover, no shipowner or insurer is burdened disproportionately and all can benefit from ITOPF s services. From ITOPF s perspective our impartiality can be demonstrated to all stakeholders, including governments, NGOs and environmental agencies. Our technical advice is provided as a service for the benefit of all parties, and on behalf of the shipping community and its insurers as a whole, not only the individual shipowner and insurer involved in a particular incident. Furthermore, our funding mechanism enables us to have the freedom to pursue those activities of greatest merit without the need to seek reimbursement of costs. This is of particular importance when ITOPF is asked to provide expert advice and training on oil spill preparedness and response by countries that cannot afford to pay. Our shipowners also see the benefit of us having such freedom as they appreciate that a country is far more likely to be pragmatic and reasonable in their actions if it has had training in oil or HNS preparedness and response and is aware of the need for actions to be technically reasonable. The strategy with four key areas Overseen by an impressive Board of Directors (whose collective expertise would be the envy of any shipping or maritime company), ITOPF s strategy has been developed so as to fulfil its mission, namely to promote an effective response to marine spills of oil, chemicals and other substances. To achieve this objective our strategy 9 continues on page 42 41

42 Pollution ITOPF ITOPF Technical Adviser making a survey of oysters. ITOPF Technical Advisers are frequently asked to assess claims for pollution damage to fisheries and other resources. ITOPF working alongside the China Maritime Safety 9 continued from page 41 identifies four key areas: Response to Marine Spills; Damage Assessment & Claims Analysis; Training & Education; and Research & Development (R&D). In taking ITOPF into the next decade it is timely to reflect on what changes have taken place in these four key areas, which may influence our strategy for the future. Response to Marine Oil Spills In the area of responding to marine spills, encouraging and supporting a governmentled response as the best formula for achieving a successful outcome remains a priority for the Federation. Although it sometimes feels like an up-hill struggle (even with shipowners who mistakenly believe that a shipowner-led response will give them greater control over activities and costs), the benefits of this approach are clear. A government-led response, if properly anticipated, funded and implemented inevitably leads to a prompt, more efficient and cost-effective response than one in which the shipowner is expected to respond, often with little in the way of infrastructure or support. This will be even more the case for HNS incidents. ITOPF s work with government agencies to prepare them for such events, together with our network of experts worldwide mean that we can rapidly assemble specific and targeted local support on behalf of the shipowner and his insurer. Although this tactic may at first seem less reliable and ad-hoc, experience has shown that a flexible approach that makes use of local expertise facilitates cooperation with government agencies. Damage Assessment and Claims Analysis Undoubtedly, in recent years the area of environmental damage assessment has seen an exponential increase in claims (both in number and in magnitude) against shipowners and their insurers. In the 1970 s and 1980 s, ITOPF s technical advisers spent much of their time dealing with response issues. Clean-up of most small spills would be over within a week or two, perhaps requiring little else other than modest follow-up from the office in London or a technical assessment of claims for the clean-up. Now, even the smallest of spills can endure for months or even years after the incident as claims for environmental damage, that can run into 10 s or even 100 s of millions of $, are submitted, often with little in the way of credible science to support them. As a consequence, and for the immediate future, the focus for ITOPF s technical staff is on staying one step ahead of the application of more and more sophisticated, yet often esoteric, methods to assess and value damages arising from spills, especially spills of HNS. Training and Education Increased risk of spills as a result of increases in shipping traffic, or the introduction of new regulations, often necessitate greater investment in training and education in a particular country or region. Time spent by ITOPF in the USA developing relationships with Federal and State agencies has borne fruit in recent years. A good example of this is the drafting of MOUs between the International Group of P&I Clubs and Trustees. Such agreements are designed to promote amicable and cost-effective settlement of Natural Resource Damage (NRD) claims whilst placing ITOPF in a facilitating role. China is an area of particular focus for ITOPF, reflecting both the increased 42

43 Photos: ITOPF Agency on oil spill preparedness and response. UK MCA dispersant sea trials. Support of R&D projects is an important part of ITOPF s remit. risk of spills and the importance of sharing technical expertise, especially as the Chinese authorities seek to improve their regulations governing preparedness and response to oil and chemical spills from ships. Reciprocal internships and several training courses and seminars provided by ITOPF to personnel within the Maritime Safety Agency (MSA) have contributed to a greater understanding of our respective roles. We anticipate that ITOPF s work with the maritime authorities and other agencies, particularly the scientific organisations in China, will increase in the short to medium term as the relationships develop and the demand for technical knowledge increases. Research & Development (R&D) At a time when R&D budgets are continually being cut, ITOPF s technical advice is sought by various R&D organisations keen to develop research proposals that will produce meaningful and useful results for the spill response community. ITOPF sits on the UK Maritime and Coastguard Agency s Research Advisory Committee and, whenever possible, works to coordinate research objectives between this agency and other R&D organisations worldwide. This collaborative approach ultimately makes best use of the limited funds available. The area of R&D is one that ITOPF s Directors have specifically identified for increased involvement in the future. Important to remain in touch For a small, specialised team of people needing to juggle emergency response whilst fulfilling its strategic objectives, it is important for us to remain in touch with the needs of our shipowners and their insurers. This will ensure that we can use our resources wisely and to the benefit of the wider maritime community. In this way, we can maintain a clear view of our goals and the path that we need to take to achieve them. If you would like more information about ITOPF or would like to receive publications electronically, please contact Information Officer, Deborah Ansell, at deborahansell@itopf.com 43

44 Salvage Lloyd's Salvage Arbitration System Lloyd s Salvage Arbitration System Over the past year the Council of Lloyd s has concluded a major reform of the arrangements for the panel of Lloyd s Open Form (LOF) salvage arbitrators. This came about after review and discussion of the existing arrangements with its users, the arbitrators, the Admiralty Solicitors Group, etc. Extended panel of arbitrators Over the last couple of years, the panel of salvage arbitrators has consisted of three first instance arbitrators and one appeal arbitrator. The arbitrators have during the last few years been denied the option of acting as counsel in those salvage arbitration cases that were assigned to a fellow arbitrator. This has meant a considerable reduction in the workload and income for the arbitrators. After consultations with all sides of the industry, such as the International Chamber of Shipping, the International Salvage Union, the International Union of Marine Insurers, the Joint Hull/Cargo committees, the International Group of P&I Clubs and the Admiralty Solicitors Group, the Council of Lloyd s gave notice of termination to the existing panel of salvage arbitrators and invited them, as well as all other Queen s Counsels acting as admiralty barristers, to apply for a position on a new extended panel of arbitrators. On this panel, the option of acting as counsel on cases other than their own would be reinstated. This, however, would only be allowed under strict rules in order to prevent conflicts of interest. Members of the new panel The new panel of arbitrators was established on 1 October 2009, and it consisted of five first instance arbitrators, namely Timothy Brenton QC, Michael Howard QC, Simon Kverndal QC, Lionel Persey QC and Jeremy Russell QC. The position of appeal arbitrator has been reassigned to Mr Justice Nigel Teare, who was previously for many Lars Landelius Salvage Consultant to The Swedish Club Gothenburg years the Lloyd s Appeal Arbitrator, until he was admitted to the Commercial Court, where he now sits as a judge. Assignment principle In principle, Lloyd s will continue to assign salvage arbitrations to the first instance arbitrators on a rotation basis. Lloyd s will, however, reserve their right to deviate from this principle, if there are clear and strong reasons so to do. If, for example, a particular arbitrator has fallen behind in the issuance of his awards, he might be by-passed in the rotation system, in order for him to catch up, and the upcoming case will be given to the next arbitrator in line. Also, when an arbitrator has acted as Counsel instructed by a particular party, Lloyd s may have to use its discretion if the appointment of him as the arbitrator next in line might give rise to a conflict. The arbitrators will henceforth be appointed for a term of five years, after which their appointment can be renewed by the Council of Lloyd s. An appointment can also be terminated by the Council of Lloyd s at its absolute discretion with six months notice. The Council of Lloyd s will make appointments totally impartially, following consultation with the contract users. There has long been a general wish to make all salvage awards public. This issue is under discussion, and it is hoped that it will be agreed and adopted in the not too distant future. 44

45 Photo: istockphoto The Lloyd's Building in London 45

46 Club information The Nya Älvsborg fortress Carola Weidenholm Corporate Communcations If you arrive in Gothenburg by boat, you encounter Nya Älvsborg a 17 th century fortress at the entrance to the harbour. About 30 minutes further on, you reach the head office of The Swedish Club on the south river bank. This year we have got the inspiration to embellish our annual report from the fortress. Look further at our website or order the report form us if you haven t already received it. On three occasions in history the Danish navy knocked on the door to the city of Gothenburg with anything but good intentions, but had to return home unsuccessful having been held back by the Swedish navy. It all started with the Danish King, Kristian IV, who disembarked with his fleet on the islet of Kyrkogårdsholmen on 5 April 1644 and erected a log cabin with cannons that he named Gottenbrille. By early May the Danes had been put to flight and had burned down their building before leaving. This led the Mayor of Gothenburg to write to the government to request that Kyrkogårds-holmen should be fortified. And during a battery armed with four cannons was built under the supervision of the fortification officer Johan Wärnschiöldh. After yet another attack from the Danes, he was also put in charge of the constructing the new fortress that became the starting point for the Nya Älvsborg fortress. The work was initiated in 1650 but was not completed until the 1670s. Tordenskjöld vs. Lillie The peace lasted for a number of decades, until 2 May 1717 when the Danish-Norwegian Kattegat squadron, lead by Peder Tordenskjöld, made its way unnoticed past the fortress. The Gothenburg squadron repelled the attack and said farewell with a salvo of cannon fire from Nya Älvsborg. But Tordenskjöld hadn t given up. On the evening of 20 July 1719, he returned with his men and succeeded in placing 26 cannons and four mortars on two neighbouring islands. From there he opened fire on the Nya Älvsborg fortress. However, the then governor, lieutenant colonel Johan Lillie, fought back. He was an experienced soldier who had taken part in the campaigns both in Germany and Norway, and history tells us that it was 46

47 Photo: Anna Jolfors Club Information Basic facts New members largely his actions that saved the fortress and the city from the Danes. This made him so popular, that songs and poems were written in his honour. There was even a proverb created for him: The Danes pick no Swedish Lillies (his surname was Lillie which means lily in English). High society and tourists Nya Älvsborg functioned as a fortress until 1869 and during the latter part of the 19th century it was a popular outing for Gothenburg s upper classes who wanted to breathe fresh air, smoke cigars and drink Swedish Punch. Today, the fortress is declared a historical monument of special value and is a popular tourist attraction. Every summer you can take a boat trip to the islet to experience an unusual environment and have a cup of coffee at the Governors Café, or even rent the fortress for a conference or corporate event. Read more at Basic facts per 1 July 2010 New Members Protection & Indemnity (including Charterer s Liability) Number of vessels 1,342 Average age 10.2 GT (million) 44.2 Freight Demurrage & Defence Number of vessels 711 Average age 8.5 GT (million) 27.3 Hull & Machinery Number of vessels 1,357 Average age 10.0 GT (million) 54.4 Loss of Hire Number of vessels 393 Average age 8.1 GT (million) 14.9 Alpha Shipmanagement Pte Ltd Singapore PI Beibu Gulf Shipping Limited Hong Kong TL Fair Wind Chartering Pte Ltd China PI, FO Fujian Guohang Ocean Shipping (Group) Co. Ltd China PI Kanway Line Co. Ltd Hong Kong PI Nordic Hamburg Shipping GmbH & Co. KG Germany HM, LH Rewood Ocean Shipping Co., Limited China PI Tongli Shipping Co., Ltd China PI FO = Freight Demurrage & Defence HM = Hull & Machinery LH = Loss of Hire PI = Protection & Indemnity TL = Charterer s Liability 47

48 Club information Out and about Breakfast meeting at Shippingklubben in Oslo a tradition in the making! On 25 March 2010, a sunny and admittedly quite early morning, the Club held its second annual breakfast meeting in Oslo for brokers, prospects and members. Yes, annual meeting! The Club intends to continue with this format in beautiful Oslo. The breakfast meeting was held at Shippingklubben, from where there is a marvellous view of Oslo and the Oslo Fjord. This year, The Swedish Club held its breakfast meeting back-to-back with the Cefor AGM. This had its pros and cons. The pros being that many people from the Scandinavian shipping and insurance industry had gathered in Oslo, but the cons being that the AGM dinner contrary to the breakfast meeting is an event that ends later rather than earlier. However, a number of brave souls got out of bed and gathered at Shippingklubben for a buffet breakfast. Managing Director Lars Rhodin presented the Club s development over the Photo: istockphoto year; Business and Marketing Director Henric Gard dealt with market perception and progress, whilst Area Manager Tony Schröder rounded off the proceedings by presenting Team Göteborg I that serves the Scandinavian market. The message was well received. We will, of course, see our friends for breakfast again next year at Shippingklubben for a tradition in the making! Istanbul luncheon On 14 April 2010 the Club held its fourth consecutive luncheon in Istanbul for the prominent Turkish shipping market. The luncheon was well attended by our good members, brokers and prospects alike. Lars Rhodin MD, reported on the Club s splendid progress over the past year, a Club that has now risen rapidly in the wake of the financial turmoil of 2008 and a Club that has an appetite for progress! The Club is financially stronger than it has ever been, and this fact, coupled with an indisputable and thorough service model has created a keen interest in the Club. The Swedish Club gets more inquiries than ever before. It is continuously growing on the Turkish market, and the fleet continues to be impressive; by country the fleet is still the youngest entered with the Club! Area Manager, Tony Schröder, also stated that Turkey remains a prime market and that we will continue to assist and focus on our good members with the renowned The Swedish Club service concept. Photo: istockphoto 48

49 Photo: TSC Birgitta Hed, Senior Claims Manager at the Club gave a presentation with the title: "How fit is your crew?" The annual Club evenings took place on 20 and 21 of April in Hamburg and Bremen. Once again, the events were well-attended, and we are pleased and honoured that so many members, brokers and associates found their way to Hafen-Club and Park Hotel Bremen. Encouraging! We like to think the reason for attending the Club Evenings is a genuine interest in The Swedish Club. By being transparent about what we stand for and how we perform, and by sharing our experiences with the objective of reducing risk and costs to members, we aim at building and maintaining a true partnership with quality shipowners, managers and service partners. Managing Director, Lars Rhodin, shared the latest Club news in his State of Affairs presentation. Tradition prescribes a specific topic and we wish to put our stars on display. Birgitta Hed, Senior Claims Manager P&I, gave a presentation of crew illness and injury claims development, PEME - How Fit is Your Crew? Food for thought for the forward-thinking among us, and it went down well. Just as an aide memoire, the key topic questions for the PEME session included: Club evenings in Hamburg and Bremen What can we learn from the recent crew claims cost and frequency development? Can anything be done to break the adverse claims trend? Are seafarers exploiting the weaknesses in standard health checks? What should the process be, and how can The Swedish Club PEME make a difference? We want to thank our guests so much for attending and for making the Club Evenings worthwhile and memorable. It could not be done without your support. Club evening with ITOPF This year s first Club evening in Gothenburg was as popular as ever. 55 persons made their way to the former theatre, Storan, in the city centre, to listen first to our MD Lars Rhodin followed by Karen Purnell and Henk Renken from The International Tanker Owners Pollution Federation (ITOPF). Lars Rhodin further informed that all areas of our business show good results, and that P&I volumes are increasing. He also took the opportunity to mention our celebration of 100 years as a P&I Club, our 30 th anniversary in Greece and 10 years of the Marine Insurance Course (MIC). Karen Purnell presented ITOPF and the services they offer the shipping industry. She also told us that the role of the federation is advisory and to share their knowledge of reducing oil spills. Henk Renken showed us two case studies with bulk carriers, where they attended on site: MV Full City, on 31 July 2009 and MV Gulser Ana, on 26 August the same year. Additional information about ITOPF can be found on page 40. Open House in Piraeus To mark the occasion of The Swedish Club s 30 year presence in Greece and also celebrate the Posidonia week, our Piraeus Team held an Open House event at our offices, on Wednesday 9 June. The event was well attended by many of our Greek members and associates who enjoyed the warm and friendly atmosphere, chatting over a glass of cool wine. 49

50 Club information Out and About Photo: Stefan Eliasson Maria Berndtsson, The Swedish Club, still in good shape along the streets in Gothenburg. Jörg Erdtmann, NSB Niederelbe Schiffahrtsgesellschaft mbh & Co KG, with his welldeserved medal at the finish in Slottskogen. Photo: Marathonphoto Göteborg Half Marathon 22 May 2010 The annual Göteborg Half Marathon took place on 22 May This year, 58,122 runners had signed up, of whom 38,459 finished the race. The day of the race saw temperatures of up to 30 degrees Celsius, with very little wind, making this year s race one of the toughest ever. A large number of participants chose to abort the race, and many had to seek medical advice due to exhaustion and dehydration. However, all the runners in The Swedish Club Team finished the course! The team this year consisted of 34 members, business partners and employees of the Club. We gathered on the evening before the race for a pasta dinner at Pasta Etc Grande, kindly hosted by Holman, Fenwick & Willan, to stock up on some carbohydrates and prepare ourselves for the coming day. After the race, a well-deserved Mediterranean buffet was waiting for us at the traditional Post-Race Banquet held at Språkcafeet, co-hosted by The Swedish Club and Transbulk 1904 AB. The Swedish Club Team was represented by runners from: Aon Benfield, Hamburg Cobelfin NV, Antwerp EMS Insurance Brokers AS, Oslo Holman Fenwick & Willan, London, Paris, Piraeus Junge & Co, Hamburg NSB Niederelbe Schiffahrtsgesellschaft bmh & Co KG, Buxtehude The Swedish Club, Gothenburg Transbulk 1904 AB, Gothenburg 50 Photo: Marathonphoto Come and run with us next year! For further information about the race, please visit We would like to take this opportunity to thank all of those in The Swedish Club Team who made a donation to The Swedish Sea Rescue Society.

51 Club information Out and About / Staff News Staff News Head office Göteborg Karoline Alfredsson has accepted permanent employment and been appointed Claims Executive in Team Göteborg I as from 1 June The Swedish Club Board Members, elected by the employees Fredrik Kruse, Senior Claims Manager in Team Göteborg III, has retired after more than 32 years of dedicated service to the Club. During all his years with the Club Fredrik has worked in all our offices. He started in 1978 at the head office in Gothenburg. In 1981 he moved to our Piraeus office for three years. From he went back to serve in Gothenburg again and in 1988 he served in our Hong Kong office for a period of six months. Back to Gothenburg for a period of about nine years as manager for the then P&I department he opened our London office where he served as manager for about three years. After that it was time to move to Greece and Piraeus again for a period of four years. On behalf of the Club and its members, we would like to take this opportunity to thank Fredrik for his efforts during all these years and wish him a long and happy retirement. Ingrid Andersson resigned from the Club s Board in connection with the Board Meeting on 16 June. She has been a member of the Board since 1989 and is succeeded by Elisabeth Rydén. At the same time she was thanked for her services by the staff and a gift was handed over. Agneta Barryd, Receptionist, retired from the Club in February this year after 12 years of dedicated service in her role as the voice of the Club. Many of our readers who have called or visited the Club s head office have no doubt appreciated Agneta s professional and accommodating service. We wish her all the best for the future and a happy retirement. PIRAEUS Efi Saisana-Palyvou joined the Club s Piraeus office on 21 June. Efi will take up the position as Office Assistant in Team Piraeus Vivian Roinioti has resigned from Team Piraeus after six years of service as Team Assistant. We wish her all the best in her future career. Elisabeth Rydén will succeed Ingrid Andersson as a Board Member elected by the employees. Elisabeth joined the Club in 2003 and in January 2010 she assumed the position as the Club's first Compliance Control Officer, a new position within the organisation. Elisabeth holds a Bachelor of science in Business Administration from University of Gothenburg, Schools of Business economics and Law and she has also studied at the University of Leicester. 51