NEW. The RISK. of complex technologypage gas-fuelled ships Page overall view on rescue at sea Page MRM course module Page 9

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1 The Swedish Club No November Safe gas-fuelled ships Page The RISK of complex technologypage NEW MRM course module Page 9 FIRST overall view on rescue at sea Page Page 6-8 Member & Partners survey: A fantastic endorsement! Page 4-5

2 Content No November Leader The expected and the unpredictable! 3 MarketING & Member & Business BUSINESS DEVELOPMENT Partners Survey Risk & operations Managing future exposure and members expectation 6-7 Club information TSC Blog 7 the Swedish Club MRM 8-9 Academy Out and about with MRM Club information Basic Facts 15 Loss prevention In Focus new area on our website 15 Are fuel oil separators really to blame? The risk of complex technology P&I New amendment to the Inter-Club Agreement 21 SHIP DESIGN Safe gas-fuelled ships safety FIRST overall view on rescue at sea FD&D Capture the moment Renegotiating charterparties Legal Revised German Marine Insurance Clauses a brief introduction Club information Staff presentations Senior P&I Claims Executive, Françoise Fouchier-Matte 32 P&I and FD&D Claims Manager, andrew Bates 33 Notice Board News from Gothenburg 36 News from Piraeus 37 News from Asia 38 News from Oslo 39 Out and about Staff news 43 Club quiz 43 Club calendar 44 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. The Club also writes Hull & Machinery, War risks and Loss of Hire for Mobile offshore units and FPSO's. Head Office Sweden Visiting address Gullbergs Strandgata Gothenburg Postal address P.O. Box 171 SE Gothenburg, 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 room 103, 6-1, 1 Chome, kaigan, Minatu-Ku tokyo , Japan Tel Fax mail.tokyo@swedishclub.com Emergency tel Norway House of Business, 6th floor Postal address Tjuvholmen Allé 3 N-0252, Oslo, Norway Tel Mobile mail.oslo@swedishclub.com Emergency tel The Swedish Club Triton is published three times a year and distributed free of charge. The Swedish Club Triton 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 Gothenburg. Editorial Advisory Board Maria Berndtsson, Susanne Blomstrand, Hans Filipsson, Henric Gard, Birgitta Hed, Johan Kahlmeter, 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, Gothenburg. Cover photo Rosita Kjellberg Green Print PR Offset. 1111PR5000B The Swedish Club Articles or extracts may be quoted provided that The Swedish Club is credited as the source.

3 Leader MD Lars Rhodin The expected and the unpredictable! Dear members and associates, The members and us have been enjoying a benign claims environment for the last couple of years. Part of this pattern has no doubt been correlated to the post situation, with lower levels of shipping activity seen overall. In particular, we have seen a slowdown in navigational claims, most of which would have been severe. Such claims would more often than not fall under the Marine account rather than P&I. High severity P&I claims however, in our assessment, are rather attributable to the random factor than the business cycles per se. Our expectation has been a rise in navigational claims as shipping activities started to close in on pre-2008 levels. It is fashionable to identify inflection points in our business in an effort to decide trends. We saw an inflection point as early as mid- to late Navigational claims are on the rise again, no doubt. Why is that? And what can we do about it? It is the fact that a disproportionate number of groundings and collisions occur whilst pilots are onboard. Why is that? There is definitely something in the interface between pilots and bridge teams that can be improved in terms of behaviour and in particular, in terms of communication. In our Maritime Resource Management programme we have launched a new training module called Working with Pilots and VTS. It is designed to address the interaction required for successful cooperation between officers, pilots and traffic services. We think this module is the first of its kind and necessary in a comprehensive resource management effort. Casualties are expensive and we are mindful that shipowners and underwriters shoulder the consequences without remedy! Standard & Poor s revised its ratings outlook for the Club from BBB stable to BBB positive. In their assessment, we are better positioned to build a solid platform for growth and capital development than before, as they have noted from our results in Lars Rhodin Managing Director the last couple of years including H Such development is welcome and progress is important for us, as it is for any organisation. We are mindful that key success factors are member quality and consistent delivery of services by the Club that meet members expectations. Yet we operate in a volatile environment where levels of claims frequency and severity are expected but still unpredictable, in common with the movements in the financial markets. What is important is to be consistent over the long-term and then to manage the unpredictable. We have taken an important step in increasing efficiency and enhancing member services; the two teams in Gothenburg have been integrated into one unit Team Gothenburg under the leadership of Tony Schröder. The change is driven by resource management and our ambition to improve. For the members previously serviced by the two different teams, there will be little to no change in your day-today contacts with underwriting and claims. On a final note, I hope you as members and brokers have started to enjoy the benefits of your personalised version of our extranet Swedish Club On Line (SCOL). This business platform is there to facilitate information flow, transactions and analyses. It is quite a leap forward in our effort to make us even user-friendlier, your business life easier and administration more efficient. The feedback we have received so far is very positive. With best regards, PHoto: Jonas Ahlsén 3

4 Marketing & Business Development Member & Business Partners Henric Gard Director, Marketing & Business Development A fantastic endorsement! As is well known - curiosity has killed many cats and I might add that complacency has definitely been a strong factor for all sorts of companies running into problems. The importance to listen, learn and, when necessary, adapt or adjust after receiving constructive feedback from your customers and your suppliers, can neither be underestimated nor neglected. For this specific reason we asked our members and business partners to participate in a bi-annual survey to take the temperature of our relationships and get valuable feedback about our performance. 1. Are you satisfied with the treatment and approach of The Swedish Club? 4 2. Are you satisfied with the quality and promptness of the insurance documentation provided? 3. Please state your general opinion of your claims experience with The Swedish Club? 4. Are you satisfied with the response and immediate actions taken by the Club upon notification of claims? 5. Are you satisfied with the support level and advice given by the Club during the claim s process? 6. Are you satisfied with claim settlements and adjustments? More than satisfied % Satisfied % Dissatisfied % Disappointed % n/a % More than satisfied % Satisfied % Dissatisfied 0 % Disappointed 0 % n/a % More than satisfied 9 13 % Satisfied % Dissatisfied % Disappointed % n/a % More than satisfied % Satisfied % Dissatisfied 0 % Disappointed % n/a 9 13 % More than satisfied % Satisfied % Dissatisfied % Disappointed % n/a % More than satisfied % Satisfied % Dissatisfied 0 % Disappointed % n/a % Positioning The Swedish Club for the future Our aim is to use the feedback to improve and continue to develop the Club in a way that our current membership and our business partners feel happy and comfortable with. Another aim is of course to position the Club to be attractive to prospective members now and in future. The survey consists of 12 direct questions and is available to invited participants electronically, making it easy to respond and not too timeconsuming. The response rate this year was just under 40%, which at a first look might seem like a poor outcome. Analysing the data in more detail reveals that members representing close to 60% as well as brokers representing approximately 50% of entered tonnage, have taken the time and given us their feedback. On these pages you will find the results illustrated, question by question. The satisfaction level of our membership and our business partners continues to be very high. In our 2009 survey, the combined result over the same 12 questions was evidence that 80% of our membership and business partners were either more than satisfied or satisfied with our performance. The outcome for 2011 is 83%, which of course is a step in the right direction. The

5 Survey Have you ever visited The Swedish Club s web site com? If yes, please state your opinion of the quality. Yes - More than satisfied 9 13 % Yes - Satisfied % Yes - Dissatisfied 0 % Yes - Disappointed 0 % No % 8. Have you used the SCOL system on The Swedish Club s web site? If yes, please rate your degree of satisfaction in relation to your requirements and expectations. Yes - More than satisfied % Yes - Satisfied % Yes - Dissatisfied 0 % Yes - Disappointed % Not used SCOL % 9. Have you visited the Loss Prevention section on our homepage? Yes No % % 10. Are you satisfied with the quality of The Swedish Club s loss prevention efforts? Alternatives More than satisfied Satisfied Dissatisfied Disappointed 9 13 % % 0 % 0 % % 11. Have you read our publication The Swedish Club Triton? If yes, please state your opinion of the quality. Yes - More than satisfied % Yes - Satisfied % Yes - Dissatisfied 0 % Yes - Disappointed 0 % No % 12. Are you satisfied with the overall quality and performance of The Swedish Club as your marine insurance provider? More than satisfied Satisfied Dissatisfied Disappointed % % 0 % 0 % average has been reduced by questions 3, 4, 5, 6, 7, 8, 10 and 11 to which well over 10% of answers received have responded no/not applicable. Especially encouraging is the outcome in relation to question number 12, the general questions, in which 100% of the responding participants said that they are either more than satisfied or satisfied of the overall quality and performance of the Club as their marine insurance provider. The corresponding figure in 2009 was 99%. That is a fantastic endorsement for all the employees at the Club and will serve as a real challenge and motivator for all of us to continue to deliver high value products to our stakeholders. Thank you for your valuable inputs and answers Last but not least, on behalf of The Swedish Club, I would like to take the opportunity to thank all the responding parties for their valuable feedback and participation. Your answers will be analysed further and small adjustments will be made here and there for us to have even more satisfied members and business partners in the years to come. We are indeed a curious Club, but thankfully not at all complacent, and rest assured we are with you all the time and all the way! 5

6 Risk & Operations Marine Renewal 2012 Managing future exposure and members expectation 120% vs modelled exposure Lars A. Malm Director, Risk & Operations Underwriters should manage risk exposure properly and at the same time consider members expectations. In order to rate exposure, we need to utilise risk selection, rating tools and modelling business scenarios. To this end, we need to keep our stakeholders expectations in mind. In addition, delivering top-quality service to members is the main priority. Re-entering volatile times It is only three years since the most recent global financial crisis. From now on owners will potentially face the headwind of yet another challenging period in addition to the excessive supply of tonnage. It appears that the economic downturn may affect shipping evenly across various segments this time. Only the Offshore and Energy sectors appear to be exceptions. We have seen a greater number of large claims. The average cost per claim (severity) has remained relatively stable even though a slight increase has been noted. We believe the main reason for this trend is the global financial recovery to date. Even though we are nowhere near the level of claims frequency experienced during a significant increase has been noted, in particular for navigational claims. Will the wheels again adapt a slower pace? There are already signs of greater lay-up activities. Most of them are warm or in fact merely idling. They do, however, indicate that the shipping industry could be facing 100% 80% 60% 40% 20% 0% Graph No. 1 Total claims cost capped at USD 2 million vs modelled exposure. 100% 80% 60% 40% 20% 0% Graph No. 2 Claims (fgu) frequency (>=USD 500,000) vs modelled exposure

7 Club Information TSC Blog Blog summary challenging times. It is fair to say that in the past the Club benefited from a benign claims environment during an economic downturn. It remains to be seen whether we can expect to see a similar correlation between a possible slowdown of the economy and an associated reduction in the number of large claims. Claims picture As clearly illustrated in graph No. 1, you will see that there has been a steady increase in claims costs. The increase in claims costs is mainly driven by a greater number of large claims (XS USD 500,000), which can be seen in graph No 2. Loss Prevention activities Our Loss Prevention activities have increased throughout the year. Two major publications have been produced, where H&M and P&I claims have been analysed. In addition, our Interactive Root Cause Analysis (IRCA) has now been successfully implemented. The annual findings of the IRCA are reported back to the membership via our annual publication Claims at a glance. In addition, The Swedish Club Academy has increased its reach significantly and today more than 80 licensees have signed up to our in-house Maritime Resource Management (MRM) leadership programme. Going forward, we expect even greater pressure on owners and managers to trim their operational costs in the current unsupportive freight market. In addition, we can assume that the shortage of experienced crews and officers will continuously cause challenges to the industry. As a result, we may experience an effect on claims. To this end our Loss Prevention activities will become even more of a priority and an added value. Limitation of shipowners liabilities today and tomorrow was the topic for the panel discussion at the Club s Members Day in Gothenburg on 16 June. The panel consisted of Andrew Bardot (International Group of P&I Clubs), Professor Erik Rösaeg (Scandinavian Institute for Maritime Law), Mrs Lone Scheuer Larsen (Torm A/S) and Brian Starer (Squire Sanders & Dempsey LLP) and was moderated by Thomas Kühl (Pandi Marine Insurance Vermittlungs GmbH). Questions that were addressed were Why should shipowners be entitled to limit liability? and Do liability regimes constitute incentives for shipowners to take loss preventing measures? The discussion continued on the blog on the Club s website where the following comments can be found: Limitation of Liability is necessary to enable shipowners to trade and buy insurance cover but I cannot support the concept of "Forum Shopping" [that follows a non-universal liability regime] I was a little disappointed that the Panel felt it was extremely unlikely a universal Limitation system was achievable going forward. That should be the aim of the maritime nations It seems to me that the principle of limitation is coming under increasing threat, especially from politicians in countries which have been affected by shipping accidents. The Pacific Adventurer case off the coast of Queensland, Australia is a very good example but there are a number of less well-publicised cases. Until such time as the shipping industry gains a more effective political platform to express itself, it is difficult to see any change It is important to focus on the practical implications of changing the system. For instance, if insurance (instead of the shipowners' liability) was to be capped and limitation would be made on the basis that shipping companies are limited companies, it seems quite likely that the response to severe casualties would be adversely affected If one would dare (!) to draw any conclusion there seems to be consensus to a certain degree that some kind of corporate limitation should apply at the end of the day limitation will always apply because shipping companies are generally limited by nature. However, whether there should be separate limitation regimes (or preferably a universal regime) is certainly subject for debate; and there are clearly strong views concerning both the fundamental concept as well as the fine print. The discussion continues! Anders Leissner Director, Corporate Legal 7

8 The Swedish Club Academy Maritime Resource Management (M Launching new MRM tools to help members prevent claims Martin Hernqvist Managing Director The Swedish Club Academy AB From a claims perspective The Swedish Club has seen a rise in frequency during That results for an insurance company vary from one year to another and deviate from forecast figures are neither abnormal nor unexpected from our perspective. It is the nature of our business, something that we are well aware of. However, from a member perspective, a major incident involving an own ship often comes unexpected. Members who have experienced major claims are normally very open to strengthening their loss prevention efforts with the clear goal that this should never happen again. Be proactive However, the lesson they just learnt was expensive. Much better, and far less expensive, would have been to launch the loss prevention efforts in advance, to avoid these incidents from happening in the first place. In hindsight, it is easy to know what should have been done. To be proactive is much more difficult. Accidents can happen to anyone At the SAN conference (Sjöfartens Arbetsmiljönämnd/ Maritime Joint Work Environment Council) held in Gothenburg on 20 October 2011, many of the speakers expressed concern about the difficulties to make shipping companies invest in safety unless they have not themselves experienced major incidents and learnt that accidents can happen to them as well, not just to others. A challenge for many shipping companies seems to be to learn from others and invest in safety and training prior to the incident, not after. Mandatory requirement? With a year like 2011 fresh in mind, and with most of the major claims related to resource management issues, it would be very tempting to learn from the Club s experience of these claims and make Maritime Resource Management training It is our belief that internal motivation to invest in training, as opposed to external pressure, produces better results. a mandatory requirement for a Swedish Club membership. No doubt a successful implementation of MRM amongst the Club s members would have a major positive impact on the claims frequency and the consequential possibility to offer the market s most attractive premiums. The issue has also been up for discussion in the Club during the course of this year. The present stance of the Club s management, however, is that an MRM licence shall be a decision taken by the member himself. It is our belief that internal motivation to invest in training, as opposed to external pressure, produces better results. And the individual member who do invest in MRM training, and will be able to show results, will certainly be rewarded during the insurance renewals. Increase awareness about MRM To assist members in keeping incident levels and premiums down, we will increase our efforts to market the MRM concept as the most important means to prevent claims. To increase awareness about MRM, we will make MRM the theme for a number of member gatherings during We will also expand the MRM toolbox by adding new MRM tools and training material that shall assist members in their work to enhance safety, efficiency and job satisfaction in their organisations both onboard and ashore. Join the MRM network All these initiatives will be part of the campaign to obtain more members as MRM licensees. The number of Swedish Club members who subscribe to an MRM licence is increasing and our long-term objective is that all members shall opt to join the MRM network with the purpose of increasing their competiveness and attraction in the market. Please visit or send an to academy@swedishclub.com for more information about MRM. 8

9 RM) Photos: Rosita Kjellberg Green New MRM course module: Working with pilots and VTS Experienced an accident with pilot onboard, anyone? Yes, we thought so. And you are not alone. According to the latest five-year statistics, The Swedish Club members have reported on average nearly two incidents per week where a pilot was onboard at the time of the incident. The total claims cost for these incidents was nearly USD 100 million. Most of them are navigational incidents, i.e. collision, contact or grounding. If these figures are to be considered large or small, readers may judge for themselves. Compared to the number of successful pilotage made, the frequency of claims with pilot onboard is perhaps not that large. And what would the number of navigational incidents have been if the pilots had not been onboard at all? We don t know. However, there are probably few situations onboard a ship where proper resource management are more important than in pilotage situations. This also means that when accidents occur during pilotage, the contributing factors are most often related to failures in resource management. Such factors could be unclear roles and responsibilities, lack of briefings and communication. These problems may in turn lead to failures in establishing a shared mental model and difficulties in maintaining situation awareness throughout the passage. Cultural issues and lack of challenges are other typical MRM factors involved in these accidents. Even if all these issues are already covered in the MRM course, the frequency and consequences of incidents with pilot onboard made us take the decision to launch a dedicated MRM module on Working with pilots and VTS. The intention is to provide additional, and optional, material that will explain in more detail what the message of the existing MRM modules mean to me - as master, bridge officer, pilot or VTS operator in pilotage and VTS situations. This is what we are addressing in the new module with the obvious purpose of making this part of a ship operation as safe as possible. The new module has been worked out following a series of meetings with parties of the MRM network representing both pilotage organisations and ship owners. Our objective is that the module shall be equally useful to shipping companies, pilot organisations and VTS centres. 9

10 The Swedish Club Academy Maritime Resource Management (M Out and About with MRM 1 August P&O Ferries is celebrating the accreditation of its Maritime Resource Management training programme by the UK Maritime and Coastguard Agency. P&O Ferries was the first UK shipping company licensed by The Swedish Club Academy to offer MRM training, which it has now provided for 175 masters, deck and technical officers, and fleet managers from its own business and other companies. John Garner, fleet director of P&O Ferries says: We ve embraced MRM training for its focus on the human element of risk management and it is our aim that all of our own deck and technical officers will have attended courses by the end of next year. It is also heartening to see the uptake from other companies, for example we recently put six Dover port pilots through the course. He adds: Personnel attending this training already have highly developed technical skills, so the focus is not on technical tasks. MRM is all about developing the attitudes and leadership qualities that enable the most effective application of technical skills and experience, as therein lies the key to accident prevention and best practice. P&O Ferries work in this area has already been recognised by the Institute of Marine Engineering, Science and Technology and accredited by the Nautical Institute. Photos: The Swedish Club From left to right: V.F. Khodakovskiy, rector of KSMA, Capt Walter Wekenborg, Director of Training & Human Resources, Marlow Navigation and Hermann Eden, Chairman, Marlow Navigation. 8 October In connection with the Kherson State Maritime Academy's (KSMA) celebration to welcome new cadets, Marlow Navigation and the KSMA signed a training cooperation agreement for Substantial support to improve the Academy's training facilities has already been provided by Marlow Navigation since This includes introducing Maritime Resource Management (MRM) training to the Academy's trainees. Other clients and training partners, including The Swedish Club Academy, were invited to the festive events of 8 October. It was wonderful to see the large number of new cadets joining the inauguration parade at a time when the shipping industry is facing tough challenges in attracting young people to a seafaring career. Thanks to KSMA's energetic rector V.F. Khodakovskiy and his dedicated team, the number of new cadets at the Academy has increased steadily over the past ten years. 10

11 RM) Workshop leaders of the P&O Ferries MRM training team, left to right: Simon Richardson, head of safety management, Julia Hambrook, training officer, Matt Hyde, training manager, and Alan Goodden, safety manager. Photos: The Swedish Club 9 June The Swedish Club Academy congratulates Capt Yashwant Chhabra (second from left) author of the book "A Mariner's Guide to Preventing Collisions" that was formally released by Dr Agnihotri, DG Shipping, Govt. of India, (third from right) in Mumbai. As India s first workshop leader for Maritime Resource Management (MRM) training in 1995 and still active with MRM, Capt Chhabra has a deep understanding of both problems and remedies related to collisions. We congratulate Capt Chhabra who, besides his work as Manager Training Standards with Anglo-Eastern Ship Management Ltd., has managed to put together this impressive work. For further information about the book, please contact the publishers directly at info@marexbulletin.com 11

12 The Swedish Club Academy Maritime Resource Management (M Out and About with MRM 22 June MRM Workshop Leaders attending a meeting at The Swedish Club Academy. The meeting was the third in a series of MRM Workshop Leader meetings carried out from April to June 2011 with a special focus on the new MRM module concentrating on pilotage and VTS issues. Participants represented the Transnet National Ports Authority - South Africa, Satakunta University of Applied Sciences, Dutch Pilots organisation, Kalmar Maritime Academy Linnaeus University, Norwegian Maritime Academy, Fremantle Simulator and The Swedish Club September Picture from the social event, (which partners were invited to), held in connection with EuroShip Services and UBEM's officer conference in Odessa, Ukraine. The theme of the conference was MRM and teamwork with Martin Hernqvist of The Swedish Club Academy and Chris Wincott of Precious Associates as the main speakers. The event was organised by Univis Crewing Agency in Odessa. 12

13 RM) Photos: The Swedish Club September The participants at the Tärntank Ship Management's officer conference enjoy dinner at Pensionat Styrsö Skäret after an "Introduction to MRM" seminar presented by Martin Hernqvist of The Swedish Club Academy. The MRM topic created a lot of good discussions and the participants from the Philippines, Poland and Sweden all contributed with lively comments and through sharing their own experiences September Prospective MRM Workshop Leaders (including a few observers) attending a train the trainer event at The Swedish Club Academy, Gothenburg. Companies represented were: ABB Marine, Costamare Shipping Company S.A., Crew Chart Ship Management AB, DEME, EuroShip Services Limited, F.A. Vinnen & Co. (GmbH & Co.KG), G. Marconi Radar Operators Institute, Jan De Nul N.V., Laurin Maritime, MST Mineralien Schiffahrt Spedition und Transport GmbH, MTC- Hamburg, Polarcus DMCC, Sustainability and Maintenance Global Center, VDAB and Wallenius Marine. 6 October MRM Workshop Leaders attending a meeting in Odessa. The meeting was part of the project to roll out Maritime Resource Management training in the Ukraine ahead of mandatory requirements introduced by the STCW Manila amendments. The driving force behind the project is Marlow Navigation Ukraine and the project is co-financed by DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbh). Training providers attending the meeting were: Marlow Navigation Cyprus, Marlow Navigation Ukraine, Odessa Maritime Training Center (OMTC), OMTC - Kherson branch, Kherson State Marine Academy (KSMA) and The Swedish Club Academy. 13

14 The Swedish Club Academy Maritime Resource Management STCW Manila amendments Major revisions to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (the STCW Convention), and its associated Code were adopted at a Diplomatic Conference in Manila, the Philippines, on June The amendments, to be known as The Manila amendments to the STCW Convention and Code are set to enter into force on 1 January 2012 with full compliance by 1 January The amendments aim at bringing the Convention and Code up to date with recent developments and to enable them to address issues that are anticipated to emerge in the foreseeable future. Amongst the amendments adopted, there are a number of important changes to the Convention and Code. These changes include training in: Resource Management and Leadership & Teamwork. Although the revised STCW focuses on training areas identified as being of significant importance for the enhancement of safety at sea, there may be confusion on how to interpret and translate the revised STCW requirements into national regulations. Issues discussed are: What is the difference between Resource Management training and Leadership & Teamwork training? How should this training be organised and structured so that intended results are achieved? How can we assess the results of non-technical training? How do we integrate the non-technical training with technical training? Information to Maritime Administrations and Training Providers Maritime Resource Management A brief guide on the STCW Manila amendments in respect of Resource Management and Leadership & Teamwork training September 2011 Developing people for safer shipping In a document produced by The Swedish Club Academy we aim at providing answers to these questions. We invite Administrations, training providers, shipping companies and other concerned parties to read and take note of the contents of this document. We hope that the document shall assist in the understanding of human factors and lead to a successful implementation of human factors training in the maritime industry. The document has been published at com/academy accessible via a link on the front page. New MRM training providers Since the latest issue of The Swedish Club Triton, we have welcomed the following training establishments to the MRM network: Costamare Shipping Company S.A., Athens, Greece EuroShip Services Ltd., Purfleet, United Kingdom Sirius Training & Education Institute, Singapore Kuwait Oil Tanker Company (KOTC), Safat, Kuwait Fremantle Maritime Simulation Centre, Fremantle, Australia Wärtsilä Land & Sea Academy, Busan, South Korea 14

15 Club Information Basic facts / Loss Prevention In Focus Basic facts per 1 November 2011 Protection & Indemnity (including Charterer s Liability) Number of vessels 1,421 Average age 8.6 GT (million) 49.9 Freight Demurrage & Defence Number of vessels 747 Average age 8.1 GT (million) 29.0 Hull & Machinery Number of vessels 1,362 Average age 9.1 GT (million) 55.3 Loss of Hire Number of vessels 539 Average age 7.7 GT (million) 20.6 Login and check out In Focus on A new Loss Prevention initiative is the In Focus area on our website. Under the ISM requirement owners are obliged to carry out monthly safety meetings or safety committee meetings onboard their vessels. This obligation stems from Chapter 5 of the ISM Code: Master s responsibility and authority and furthermore from 5.1.2, motivating the crew in the observation of that policy. The obligation can also be derived from the Code of Safe Working Practices for Merchant Seamen, where it is stated that the safety committee should meet regularly: , The frequency of meetings will be determined by circumstances but as a general guideline, the committee should meet about every 4-6 weeks. The Club will publish on a monthly basis a new Monthly Safety Scenario (MSS) to assist owners in their efforts of complying with the above regulations. Alternative scenarios will be uploaded on Swedish Club Online (SCOL) at the Loss Prevention site. It will be easy to download the MSS and enter the written conclusions from the meeting and feedback this to the shorebased organisation. Earlier this year we launched our new electronic B2B platform, SCOL. We did so to enable a higher rate of transactions at a reduced cost and lead-time. In addition, SCOL will enhance transparency and facilitate us in sharing useful information with our business partners. The latest development in this respect is Safety Management Support (SMS), which is a benchmarking tool on the Loss Prevention site in SCOL. When using this app, owners can benchmark performances in comparison with other similarly composed fleets insured by the Club. The Swedish Club Marine Insurance Course Sharing knowledge - The date for our next Marine Insurance Course in Gothenburg is set to 7-11 May An on-line application form will be posted on our website in early January

16 Loss Prevention Fuel oil separators Are fuel oil separators rea l Matthew Iles Business Manager Alfa Laval Marine & Diesel Equipment, Stockholm, Sweden Matthew Iles is a Mechanical Engineer from UK. He has worked for Alfa Laval for 16 years, and has since 2008 been responsible for the global sales and development of High Speed Separators used for Fuel and Lube oil cleaning in the Marine and Diesel power industries. Although there has been a standard method for testing separation performance since 2004, there is no standard method of verifying the results. That fuel oil separators should be correctly sized for the task they will perform sounds obvious. Yet the number of cases of damage to engines related to catalytic fines in the cleaned HFO is rising and claims costs for insurers are up, along with downtime costs for the shipowners. Could undersized separators be the cause? A brief look at the history In the early 90s, DNV began working on a standard method for independent verification of separation performance in centrifugal separators for marine fuel. DNV invited the three main manufacturers of centrifugal separators to participate. As global market leader, Alfa Laval took the lead, together with MAN and BP, and was active in developing the method and establishing it as a standard. Alfa Laval also developed software to interpret and display the results of particle analysis of cleaned oil, using laser diffraction, the only repeatable and verifiable method available then and now. In 2004, DNV introduced the Separation Performance Standard, expressed as Certified Flow Rate, CFR, offering a voluntary Type Approval of separators with CFR as part of Class Notation FUEL. Higher flow equals lower separation efficiency Separation efficiency is related to the flow into the separator. The higher the flow rate, the more particles are left in the oil and therefore the lower the separation efficiency. As the flow rate is reduced, particle removal increases and cleaning efficiency improves. However, it is essential to know at what capacity adequate separation efficiency is reached in the typical case. Based on the reproducible Dyno Test Method, the CFR standard provides this information. CFR a safe level for efficient separation A separator's CFR is the throughput rate at which 85% of 5 micron Dyno particles (simulating harmful cat fines) are removed from the test oil (simulating a high viscosity fuel oil). The CFR represents a safe and verified level for continuous, efficient separation. Alfa Laval s expectation was that, with CFR measured for every separator, the customer would be able to compare fuel oil separators based on separation efficiency rather than throughput capacity. Thus, it would provide clear criteria for sizing of separators and eliminate the risk of installing an undersized unit. Maximum recommended capacity The alternative to using CFR as the base for separator choice is to rely on the manufacturer s own stated Maximum Recommended Capacity (MRC), which is not necessarily related to any specific level of separation efficiency. However, this could be compared to buying a filter without specifying the mesh size not a problem if you trust the supplier and the supplier has a clear understanding of your process and specific needs. But it would be open to the risk of error or abuse from less competent or scrutable suppliers. Proven technology from Alfa Laval Understandably, fuel oil separators are sometimes blamed for the problems of engine damage from cat fines. Alfa Laval has invested intensively in developing the CFR in order to avoid just this uncertainty. High speed separators are our business, and we have proved the technology works over many years. Now external factors are making efficient cleaning of fuel oil more important than ever. These include sharply rising fuel prices and tougher restrictions on sulphur emissions, resulting in the increasing use of low-sulphur fuels containing higher levels of cat fines. The big question For the shipowner, the potential benefits of the CFR standard are clear. It should make it possible to compare different separators on equal terms before deciding on purifiers for newbuildings or retrofit installations. It should no longer be necessary to trust the claims of the supplier when there is an independent international performance standard to rely on. So why are there still high claims costs due to engine damage, with separator performance under suspicion as a contributing factor? 16

17 ly to blame? One possibility is that since CFR is not requested in the majority of cases (most owners do not use DNV s Class Notation FUEL) many separators are still sold according to MRC. Another is that separator manufacturers are responsible for conducting the tests themselves, in conjunction with class societies, and they are not necessarily impartial. A third explanation is that, although the CFR test method itself is standard, the choice of analysis method is not part of the standard it has been left open with the words laser diffraction method, or equivalent. Unfortunately, other analysis methods used are subjective, depending on what can be distinguished by the naked eye. They are subject to non-homogeneous sampling and they are unverifiable. This means CFR test results for the same equipment can differ between different classification societies. What s the answer? Despite these negative aspects, the intentions behind CFR certification are worthy. It is a good place to start when choosing equipment since it shows a certain level of commitment from the separator manufacturer some suppliers are unable to state CFR. However, CFR certification alone is not enough to guarantee the performance. In the short term, if equipment buyers are in doubt when comparing CFR capacities from different manufacturers, it may help them to know that Alfa Laval is the only supplier using the repeatable and verifiable analysis method specified in the standard to verify the efficiency of their separators. I refer to the laser diffraction method. We also recommend that operators make use a service from DNVPS called Fuel System Check (FSC), which involves Alfa Laval Flex Separation System with S-separators for cleaning heavy fuel oils with densities of up to 1,010 kg/m3 and viscosities up to 700 cst/50ºc. taking and analyzing samples from various points in the fuel system. This is especially relevant now since it is also possible to order an analysis of the particle size distribution; a critical factor influencing separation performance on cat-fines. In the long term, Alfa Laval would like to see the CFR standard owned and driven by an independent body in the same way as for Bilge and Ballast water treatment. All-in-all, it will benefit equipment buyers to talk to Alfa Laval. There are many factors in the whole fuel treatment process that can contribute to engine wear. We are application leaders, with unique know-how and experience in the field of mineral oils and onboard fuel management. We worked with the development of the CFR standard and we developed the software to interpret and display the results of analyses of the cleaned oil, using laser diffraction. 17

18 Loss Prevention Bridge design The risk of complex technology Joakim Enström Loss Prevention Officer There is a vast amount of technical equipment to assist an officer on today s modern vessels. The bridge may have an Integrated Bridge System (IBS) where important equipment is connected and projected on multiple displays in the cockpit. Using the equipment properly gives the navigator good situational awareness and eases the workload. Even in congested waters an officer should be able to keep track of critical traffic, monitor radio communications and plan for the next alteration. But this is only possible if the officer understands the bridge equipment and has sufficient knowledge about it. If not, the equipment can become a risk. It doesn t matter if the bridge has the most advanced ECDIS (Electronic Chart Display and Information System) unit with integrated e-navigation and bridge equipment classed as per DNV standard, if the officers using it have not received the proper training or have sufficient knowledge. Knowledgeable officers and technology is a great tool, which enhances safety and relieves pressure. Lacking the required knowledge can instead increase the risk. Human error - the most common cause Most accidents are caused by human error, not technology failure. The immediate cause is very often that a person made a disastrous decision or mistake, not that some machinery or equipment failed. Evidence from many collisions or groundings show that the officer had been monitoring the situation but had not understood, or had misunderstood, the information displayed on the bridge equipment. It is not unusual that the root cause is a lack of knowledge, inexperience or poor procedures. ECDIS an important equipment The most important equipment on today s modern bridge, is probably the Electronic Chart Display and Information System (ECDIS) unit. There s no doubt that ECDIS is an excellent tool that has enhanced navigation and given the navigator a better overview while increasing situational awareness. The International Maritime 18

19 Photo: The Swedish Club THE SWEDISH CLUB TRITON Organization (IMO) made ECDIS mandatory on new passenger vessels and tankers from By 2018, all vessels will have to have ECDIS onboard, which means that owners and managers will have to buy systems whether they like it or not. Proper training is necessary It also means that all officers need to be trained to use ECDIS and for some flags type-specific ECDIS training will be necessary. This is something that has been highlighted many times before in different media but it is worth mentioning again, as it might be difficult for certain shipping companies to achieve the deadline of 2018 for having a compliant ECDIS system and all the officers trained. It is paramount that all bridge officers are fully aware of how the ECDIS functions, its limits, chosen settings and what an approved ECDIS actually is. Having an officer operating this essential equipment and not knowing enough about it could pose a serious risk. E-navigation IMO also has an ambitious project called e-navigation, which is supposed to increase safety on the bridge and help the bridge officer. 9 continues on page 20 19

20 Loss Prevention Bridge design 9 continues from page 19 The risk of complex technology E-navigation is defined as: e-navigation is the harmonised collection, integration, exchange, presentation and analysis of maritime information onboard and ashore by electronic means to enhance berth-to-berth navigation and related services, for safety and security at sea and protection of the marine environment. In future the idea is that ECDIS will be integrated into e- navigation where the vessel and shore can share data and provide a greater level of safety for all vessels in the vicinity. But there are also criticisms in the industry that the IMO is developing regulations that are too rigid, out of date and are inflexible to technological advances. IMO s specifications for ECDIS are specific about what the unit should be able to do, but unfortunately there is no agreed standard in the maritime industry about the user- and interface-friendliness of the ECDIS. The Nautical Institute has also raised concerns about the risk of different displays, settings and controls on different systems. Voluntary class notation Det Norske Veritas (DNV) has a voluntary class notation for Integrated Navigation Systems that not only focuses on the technical aspects but also on the human factor, which is called NAUT-AW (ICS). It is a new class notation and so far no manufacturers have any products fulfilling the rules criteria, but some are closer than others. DNV also has a service called DNV SeaSkill, which certifies courses such as those for ECDIS to verify quality and content. Certification is based on the DNV Learning Programme standard and other relevant information. Officers must have sufficient knowledge There is a risk when the bridge equipment is integrated, that if a small error in one unit occurs e.g. in the main GPS, and the back-up GPS is not automatically chosen, the GPS defaults can lead to dead reckoning. Another major risk is officers thinking that they know all about the equipment but they actually lack important knowledge. This maybe because they ve been badly trained, or have had no training at all. Lack of knowledge was one of the causes in a recent grounding. In this case the master made a split decision and left the fairway because he was worried about a reef in front of him. His decision was based solely on the information displayed on the electronic chart as he thought this would be sufficient. He did not check the paper chart. The electronic chart unit was not a fully-approved ECDIS as per the IMO and IHO S57 standards and the electronic chart did not display the shallow area where the vessel grounded, which was clearly visible on the paper chart. In another case relating to bridge equipment that happened during an overtaking manoeuvre, the officer made the alteration on the autopilot, which is not unusual. Unfortunately the officer had not checked the autopilot s setting, as the rudder limit and rate of turn were set very low. The alteration was too slow and the officer on the overtaking vessel did not realise that a collision was imminent until it was too late. These two accidents show the importance of having officers with sufficient knowledge who can identify an error or incorrect settings at an early stage. It is essential that the officer continually verifies that the system is healthy and is aware of potential risks. The risk of assuming that all equipment is in good condition can be catastrophic. Best approach to new technology The best approach to new technology is to embrace it, but also question its purpose and then learn if the equipment will enhance the officer s performance and increase safety or not. The Nautical Institute has called for the industry to remain focused on safety issues as much as all the benefits that can be achieved from all the new technology. Technology advancements are something positive but it s very important to have a contingency plan if something malfunctions and to know the limits of the specific equipment. This can be addressed using defined procedures in the vessel s Safety Management System (SMS) but will only work if senior management at the shipping company have a strong belief in safety and training. Human resources play an important role in safety Master Mariner and former pilot Hans Hederström is one of the developers of CSMART s training facility in Netherlands and says: At quite an early stage in my career I realised that human resources play a similarly important role in safety as pure technical skills. It has repeatedly turned out that it does not help if a vessel has the most advanced navigational equipment if work on the bridge is not organized for safe and efficient operation and also takes the well-being of people into account. Staff Captain Robert Bodin at Star Cruises also believes this and explains: It s very popular to state that officers are over-reliant on new integrated bridge equipment but it s very important to separate between reliance, ignorance and recklessness when it comes to the officer. To be over-reliant is to be ignorant to the chosen settings and being unaware of the limits. The difficulty is to detect at an early stage if a device is malfunctioning and then rapidly change the navigation mode. To be able to do this, the bridge team needs to have pre-planned and drilled back-up procedures. It s essential that the officers on the bridge have a thorough understanding of the complex systems that IBS and ECDIS are. 20

21 P&I Inter-Club Agreement New amendment to the Inter-Club Agreement comes into force from 1 September 2011 Françoise Fouchier-Matte Senior Claims Executive Team Gothenburg In August 2011, the International Group Clubs published a circular informing their Members that the Inter-Club New York Produce Exchange Agreement 1996 (the 1996 Agreement) had been amended to incorporate a new provision dealing with security. The amended version of Clause 9 of the 1996 Agreement now reads as follows: (9) If a party to the charterparty provides security to a person making a Cargo Claim, that party shall be entitled upon demand to acceptable security for an equivalent amount in respect of that Cargo Claim from the other party to the charterparty, regardless of whether a right to apportionment between the parties to the charterparty has arisen under this Agreement provided that: (a) written notification of the Cargo Claim has been given by the party demanding security to the other party to the charterparty within the relevant period specified in clause (6); and (b) the party demanding such security reciprocates by providing acceptable security for an equivalent amount to the other party to the charterparty in respect of the Cargo Claim if requested to do so. Background The Inter-Club New York Produce Exchange Agreement provides a simple mechanism for settling cargo claims by apportioning them between owners and charterers. The purpose was to avoid costly litigation between the Clubs of the International Group and speed up the claim s settlement process. However, in recent years it appeared that the time and the high level of costs incurred for obtaining securities under the 1996 Inter-Club Agreement, became an issue that encouraged the International Group to amend the 1996 Agreement. This new provision states that where a cargo claimant obtains security from one of the contracting parties to the charterparty, the other contracting party is obliged to provide the contracting party (which is to issue the security in favour of the cargo claimant) with a counter-security of the same amount if requested to do so. If the other contracting party fails to act accordingly, they will be in breach of their obligations under the amended version of the 1996 Agreement. It must be stressed, that this reciprocal entitlement to security is conditional to the contracting party intending to issue security to the cargo claimant notifying the other contracting party of the said cargo claim, in accordance with the terms set out in clause 6 of the 1996 Agreement. It should also be noted that security can be demanded even if a right of apportionment has not arisen. Application of the 2011 amendment The 1996 Agreement amended in 2011 came into force on 1 September The IG Clubs recommend their members apply the 2011 Agreement to all NYPE/Asbatime charterparties and claims arising under the aforementioned charterparties. The 2011 Agreement applies to charterparties entered into on or after 1 September 2011, and to claims arising under such charterparties either by way of: a specific reference to the ICA 1996 (as amended September 2011), or if the charterparty refers to the ICA 1996 or any amendments thereto or similar wording. The parties can also decide to incorporate into charterparties entered into before 1 September 2011 and to claims arising under such charterparties, if the parties to such charterparties agree expressly to incorporate the 2011 Agreement by way of an addendum to the charterparties. The IG Clubs Circular is published on The Swedish Club website. 21

22 Ship Design LNG (Liquefied Natural Gas) Safe gas-fuelled ships The growing awareness about environmental issues and stricter emission requirements, makes natural gas as a fuel evermore interesting around the world. The high price of fuel is also a factor pushing owners to consider alternatives to oil fuels. In this reality it is more important than ever to focus on the safety aspects of ship design, as well as on practical safety challenges like bunkering and crew competence. But we need to balance the act, and not put limitations into force that are unnecessary from an objective safety aspect. The Bergensfjord ferry is one of 22 LNGfuelled vessels in operation in Norway. She is one of a fleet of five and was delivered in Torill Grimstad Ostberg Principal Engineer, DNV Høvik, Norway Torill Grimstad Ostberg is Principal Approval Engineer at the approval centre in Høvik, Norway. Works with class approval of machinery piping, ship s piping and cargo handling systems. A majority of her work is related to using gas as fuel in ships. She has been at DNV for nearly 15 years, of which 3 months was spent in Singapore, 2 years in Shanghai, and the rest at Høvik in Norway. It started with the Glutra, a car ferry delivered in January The first LNGfuelled supply ships Viking Energy and Stril Pioneer were delivered in After this, 13 more passenger ferries, three more supply ships and three coast guard ships have been delivered, while another five supply ships, five shuttle ferries, two RoRo ships, one HSLC catamaran and one bulk boat are in the approval and construction process with DNV class at this point of time (September 2011). Main safety challenges when using LNG as a ship fuel Not everything can be done in the same way in other types of ships as it is done in gas carriers. But the same basic principles and safety challenges apply: 1. Avoid ignition of the natural gas (except inside the combustion chamber). This must be done by keeping strict boundaries between the locations where gas can be safely located and where it cannot. In gas carriers, this is done by separating the cargo area from the rest of the ship. Where gas pipes lead into the engine room they must be within double ducts. In other types of ships the same principles must be applied, but since the main purpose of the ship is not to carry gas, the dedicated area for the gas tanks and systems may be inside other areas of the ship. Mechanical ventilation to remove any gas, and ensuring that a space where gas can potentially leak out has a lower pressure than surrounding safe spaces, is one important barrier for avoiding the release of gas from a hazardous to a gas-safe space. Entrances need to be fitted with air locks between such hazardous and safe spaces, so that there is no direct communication of air. There must be fuel pipes to the consumers in the engine room, as well as ignition sources. It has to be assured that gas in flammable concentration cannot reach ignition sources. This can be done by using barriers like double pipes, gas detection, ventilation or shut down arrangements. 2. Avoid the very cold LNG cooling down normal ship steel, as normal ship steel becomes brittle at low temperatures. 3. Avoid any external force causing damage to the LNG tank or the gas systems. 4. Avoid fires being able to heat the tank system. For tanks located on open decks this means installing water spray for cooling and for tanks below deck this means physical barriers (cofferdams, fire insulation) between the tank location and spaces with a fire risk. Risk picture for gas fuel tanks An LNG tank for fuel must be designed in accordance with the requirements of the IGC Code (The International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk) for cargo tanks, which has proven over decades to be a suitable standard for gas tank design. The main risks involved for gas fuel tanks include: leakage from the tank connections escaping into safe areas with ignition sources, providing potential explosion risks (or actually deflagration) liquid gas (cryogenic temperatures) from tank connections or leakage points in related piping hitting a ship s structure causing brittle fracture external fire heating the tank and causing rapid pressure increase a tank being mechanically damaged in a way that can cause both potential gas release to safe spaces and subsequent explosion risk, low temperature impact and 22

23 Photo: Harald Valderhaug This is what can happen to ship steel if exposed to liquid natural gas, so leakage protection has to be included in the designs. Arrangement of the gas supply and engine rooms of the gas supply vessels Viking Energy and Stril Pioneer (courtesy of Cryo). Jan-Olof Grönhult Business Development Manager, DNV Malmö, Sweden Jan-Olof Grönhult has worked in the maritime industry for over 35 years. Started his career at Swedish shipowners such as Salén (Reefer Division) and Gorthon Lines. Has spent the last 20 years with DNV, both in Sweden and abroad. He is currently Senior Principal Surveyor at DNV, responsible for Market & Business Development in Sweden. fractures for ship steel, with potentially severe consequences for the ship. As long as the risks of damaging the tank are kept very low, a location under accommodation or away from accommodation will not make a difference to the risk picture. Two engine room principles Both engine room principles are drafted in the coming IGF Code (International Code on Safety for Gas-Fuelled Ships). For gassafe engine rooms, all gas piping until the gas injection into the combustion chamber is to be located inside a double pipe or duct. The double pipe must be extraction ventilated and fitted with gas detection, or inert gas filled and kept monitored at overpressure. In addition the basic requirement is for this double pipe to be gas-tight towards the engine room. ESD protected machinery space principle On smaller low pressure gas, or dual fuel engines, double piping on the engine may be difficult. And a hood above a diesel engine would make engine maintenance impossible. Therefore a new equivalent way to keep the engine room atmosphere safe was introduced with the Glutra ferry. This is in the DNV rules and IMO Interim Guidelines called the ESD protected, or shut down protected, machinery space. Such machinery space is considered gas-safe under normal operation, but under certain abnormal conditions has the potential to become gas-dangerous. The safety of the ESD protected machinery space is assured though the following requirements: A high ventilation rate in the engine room compartment. The machinery space must have a simple geometrical shape. A redundant gas detection system must be implemented in the machinery spaces, automatically shutting down gas supply and disconnecting ignition sources. At least two separate machinery spaces are required. Pressure in the gas supply piping within the machinery spaces must not exceed 10 bar. Conclusion The experience of building safe gas-fuelled ships has already reached 22 ships in operation, car and passenger ferries, supply ships, We are certain that natural gas is a fuel for the future coast guard ships, and several other types are under construction. The ships have different engine room arrangements, with either shut down protection or gas-safe. From a safety aspect the required boundaries around tank connections and piping, and limitations to give protected locations of tanks, will assure that also future LNG-fuelled ships will be built like this, safely. Looking briefly at the operational aspects, it is important to have good training schemes for the crew operating gas-fuelled ships. Bunkering has not been presented in this article but is perhaps the main risk in LNG fuel operations, and has to be addressed properly. The switch to the use of gas as fuel in ships is very positive for the global environment, if release of unburned gas is limited. We are certain that natural gas is a fuel for the future, and that it can continue to be a safe fuel also in ships that are not tankers, as it has already been for more than a decade. 23

24 Safety First Independent Responder Safe Transfer FIRST overall view on re Carola Weidenholm Corporate Communications What do you get if you put together an industrial designer, a captain and a former captain turned project manager? The answer is FIRST First Independent Responder Safe Transfer a new effective and safer system for rescuing people in distress from life rafts at sea, launched by The Swedish Sea Rescue Society (SSRS). There is still more testing to perform but so far they have received the answers they need to carry on the development. The results have been presented at several maritime conferences, for example at the IMO (International Maritime Organization) meeting in London last year where they received a positive response. Through this SSRS hopes to recommend the IMO to reform the international rules and regulations for mass evacuation. Lifting rafts aboard In 2007, Fredrik Falkman, Industrial Design AB, Jörgen Lorén, Stena Line and Mikael Hinnerson, SSRS put their heads together and decided to do something to enhance the rescue procedures at sea. I met up with Mikael and Jörgen for an interview at World Maritime Day at Chalmers University on 29 September to hear more about the project. During the years we had experienced rescue situations and found parts in the procedures that did not work as well as we had wished. This led us to discussing how we could improve the system and four years ago we started FIRST under the management of The Swedish Sea Rescue Society in Gothenburg, Mikael tells. Despite severe accidents, the progress is slow when it comes to rescues in our industry. After the Estonia loss a lot happened concerning deck stability but very little as to the rest, says Jörgen. This led us to formulate the question: what can we, as a helping ship, do with the equipment available that makes the rescue operation safer, quicker and less complicated? The basic idea of the FIRST system is that any ship that happens to be first on the scene in a mass evacuation situation should be able to recover life rafts filled with people by lifting them directly to safety onboard. This means recovering raft-loads of up to 40 Photo: Rescue Heli 901 A ship has been evacuated. Passengers and crew are at sea in rafts made for launch and recovery. The rescuing ship starts to circle the rafts, calming the sea inside the turn a manoeuvre efficient in up to force 9 winds and 3-4 m waves. The rescuing process 24 1 The CRRC is used to connect rafts filled with survivors to a Multi Purpose Crane. It has the power to tow large rafts to the crane if needed. 2 3 A Close Range Rescue Craft, CRRC, is launched from the helping ship with a light weight Drive Thru Cradle.

25 scue at sea persons at a time rather than just one or a few, which is the case today with helicopters or other systems. If a raft is lifted every six minutes which is possible you have 400 survivors rescued in just an hour! One of the greatest benefits is that you do not have to transfer people, which can be both time-consuming and hazardous even in calm waters. At the same time rafts are removed from the water and thereby makes it easier for the rescuing crew to keep track on which rafts in the water still have people inside and which are empty or rescued. Today s life rafts are not designed to be lifted directly from the water when loaded. We believe that it would be a relatively small step to develop current Davit Launch Rafts to be lifted laden, given new regulatory demands says Mikael. Equipment Close Range Rescue Craft, of Rescuerunner type Lifting cradle for the rescue boat the construction makes it easier to handle and launch in bad weather Crane on aft part of the ship, where the wind turbulence is lesser, to take the rafts on board Liferafts which are constructed to be recovered with a full load of people onboard Training The rafts used today, require a lot of training for a lot of crew. Some education of the crew is necessary with the FIRST system but overall it is easier to handle, includes fewer actions and takes less time to learn than the methods used today. The FIRST project estimates that there is a need of about 10 in the crew with this education on each voyage. Project FIRST in brief FIRST stands for First Independent Responder Safe Transfer and is a co-operation between The Swedish Sea Rescue Society, Stena Line and Chalmers University for developing safe and effective equipment and methods for mass evacuation at sea. Necessary parts to realise the project: Amendment of rules Rafts that should be lifted on board by a crane can not be too big (holding a maximum of around 40 persons). Today there is a demand for one of the crew to be on board each raft, which turns the industry more and more towards larger rafts taking distressed. This standard has to be changed. Web: Less training needed One of the main obstacles to overcome is the actual hooking up of distressed life rafts in bad weather. But the project has a solution for that as well! Our recommendation is to use what we call a Close Range Rescue Craft, CRRC, in our case a Rescuerunner, which is small and light enough to be launched undramatically and used for recoveries in most types of sea. It requires a crew of only one or two persons, it requires little training, and it is powerful enough to tow big rafts, explains Jörgen. The CRRC is not only easy to launch in all weathers, it is also easy to upright after a capsize, restart the engine and continue the work. This type of rescue craft creates better confidence and keeps the crew safer during the rescuing process, adds Jörgen. The FIRST methods require less education and training than the systems used today. We have put a lot of time into simplifying the process. In a crisis situation it is important that there are as few actions required as possible and the system is easy to handle there should not be any room for hesitation, says Mikael. This winter, FIRST will be tested with loaded life rafts in the cold Swedish waters, assisted by the Stena Jutlandica with Jörgen Lorén as captain. This will add some more knowledge to the project and hopefully we will see a quicker, more effective and safer rescuing process in the near future. SSRS in brief The Swedish Sea Rescue Society is a non-profit association founded by some real enthusiasts in More than 100 years later the enthusiasm still remains and they are always prepared to be of assistance when ever there is a need. In 2010 the Swedish Sea Rescue Society carried out 3274 missions. The society carries out 70% of all sea rescues in Sweden surviving solely on donations and memberships. The organisation also works with preventative information, research and development, as for example the project FIRST which you can read about in this article. Web: PhotoS (2-6): SSRS The flexible construction, light weight and drive thru nature of the cradle makes launching less dramatic, even in bad weather. Rafts with survivors are lifted laden and lands on to the deck. In this way up to 40 survivors can be rescued to the safety onboard in every lift. No transfer of survivors is done in the water. A positive side effect is that empty rafts can be lifted as well, reducing unnecessary use of search and rescue resources. 25

26 FD&D Charterparties Tejpal Dhesi Barrister and FD&D Manager Team Piraeus We do believe it is an appropriate time for members to look carefully at their charterparty contracts and review them, to ensure they are kept up to date The Freight, Defence & Demurrage Class has seen a proliferation of disputes in recent months. This isn t surprising when we look at the market in which we are operating. In 2008 we witnessed the collapse of the commercial market and its consequent effect upon charters and trading activities. It was still a shock to see major banking entities collapse and how the domino effect impacted upon the charters that were in place. Charterers up and down the line found that they could terminate or renegotiate their charters already in place. At times, depending on how the opponent was behaving and complying with their charterparty obligations, owners did not hesitate to act and protect their interests. The classic action saw many FD&D Classes readily incur the time, cost and expense of obtaining a Rule B attachment of an opponent s assets, normally a bank account. This was in the autumn of The Haldia decision This all changed when the New York courts faced the Haldia Decision of 18 October 2009 (see article Rule B Overrule of previous decision in Winter Storm in The Swedish Club Letter No ). Rule Bs would no longer exist in their 2008 guise. Despite reassurances from the New York maritime fraternity that post-2009 and after the Haldia case, nothing would change and Rule Bs would be easy to obtain, it is in fact harder in 2011 to obtain such bank account attachments. It is even harder if the parties have not obtained their respective awards or judgments. Of course, there will be exceptions and some cases will successfully make it through the net and get their security in the form of a Rule B. Still in operation is the very quaint obstacle that if an opponent has managed to register a presence in New York, attaching a bank account can not be done. A more convoluted route may be available and a good result may be achieved at the end of the day, depending on circumstances. Only time will tell. Time is of the essence But if New York will not help us and there is every indication it will, we will have to explore other avenues and jurisdictions. Whilst one door closes, another is waiting to open. We have started to refocus our efforts on getting security in South Africa, where a number of obstacles against sister ship arrests has been lifted. This is very good news for the arresting party, but it must be borne in mind that information which is available and accessible on the internet can also be used to obtain an ex parte order in the first place. Therefore, it is important to be aware and forewarned about information that can easily be accessed and utilized from other sources, inter alia, websites. Whilst we see that a number of matters have been successfully concluded from the 2008 policy year, we can see that in 2009 and 2010, many disputes arose that mirrored Yet again hire or freight is not being paid or being paid late. Experience has shown us that time is of the essence, we must immediately deal with any deductions, and if a legally feasible argument is not forthcoming we must be proactive and act quickly to recover funds by starting proceedings or securing our claim. Small Claims Procedure Alternatively we can employ the simple and well-tested method of appointing an arbitrator. It is amazing how even today, a simple appointment of an arbitrator in London Arbitration, subject to English law, can have the desired effect of money being duly received or a dispute being resolved. The appointment fee of about GBP

27 Photo: Stefan Eliasson THE SWEDISH CLUB TRITON Capture the Moment (subject to current and Applicable LMAA Terms) can often represent money well spent. However, there is currently a trend for using the Small Claims Procedure. Whilst this may be a time- and costeffective measure, it is worth remembering that appointing an arbitrator only takes minutes, which is not the same as allowing the other party to agree upon on arbitrator within 14 days. Such a period of time can lose the urgency of an immediate solution or agreement. The moment must be seized, not lost. Nowadays the Small Claims Procedure, which was stipulated in the LMAA Terms 2006, is contained in the updated LMAA Terms The procedure itself has not changed. It still requires that if a sole appointment is not agreed within 14 days, the parties must submit the claim with supporting documentation to the LMAA. They will then appoint an arbitrator and are free to appoint anyone suitable without consulting any of the parties to the arbitration. The fee as stipulated by the LMAA must also be paid at this time. Thereafter opponents must submit their defence within 28 days and owners can submit a reply within 21 days. That is essentially a conclusion of the procedure, and the arbitrator not appointed by the parties, must reach a decision and issue an award. There is no right of appeal on any such award. We raise these points about the Small Claims Procedure because we have noticed that more and more charterparty clauses on arbitration apply this to amounts of up to USD 100,000. Initially the Small Claims Procedure was designed for claims up to USD 25,000, and with inflation perhaps up to USD 50,000. But for any higher amount, members are advised to carefully consider its applicability and amounts to which it should apply. USD 50,000 is perhaps the maximum. Of course freedom of contract means the parties can always agree to apply the procedure for higher amounts, for example where there is a specific dispute concerning an off-hire event, or a specific clause in the charterparty. But it may not be suitable where more complex issues arise and the drawbacks of the procedure may not assist. The two main drawbacks appear to be that an arbitrator must be appointed by the LMAA and no right of appeal on any decision exists. It is a fact that under English law and the Arbitration Act 1996, it is inherently more difficult to lodge an appeal. But we are sure the losing party would like to explore such an option as oppose to it being removed outright from the start, so it is not an option that is available. It is time to review the charterparties We do believe it is an appropriate time for members to look carefully at their charterparty contracts and review them, to ensure they are kept up to date with the currently prevailing political, legal and practical developments. Therefore, because of the frequency with which changes are presenting themselves, a word of caution is submitted with respect to relying upon too many charterparties being back to back. What worked in 2008 may still apply, but it may have changed; therefore it is well worth undertaking a complete and thorough review of any such contractual obligations in A prudent uninsured party will always ensure they have done their research properly. They will have captured the moment when it presented itself. If you have any queries, please do not hesitate to contact your FD&D class at the Club. 27

28 FD&D Renegotiating Charterparties Renegotiatin In the current shipping crisis, with collapsing freight rates, many charterers suffer from having entered long-term charterparties, which have turned out to be unprofitable. In order to cut losses and stay in business some charterers seek to get out of, or renegotiate, the terms of the fixture. In other situations with increased performance costs caused by new ship safety regulations, or similar, it could well be the shipowner who wants to get out of the deal. This article examines Jonas Rosengren is a partner at Advokatfirman Vinge KB, specialising in maritime law and dispute resolution. He is a Fellow of the Chartered Institute of Arbitrators, and has experience of maritime arbitrations under the ICC, SCC and LMAA rules as well as ad hoc arbitrations. some practical and legal issues relating to renegotiating charterparties. Commercial renegotiation In many cases where the charterer is suffering under an unprofitable charterparty there will be commercial pressure on the shipowner to renegotiate. If the parties have a close business relationship the shipowners may agree to an adjustment of the rate to preserve good relations; a renegotiation of the charterparty becomes a trade-off for future business opportunities. If the charterer is at risk of being driven out of business by the unprofitable fixture, the shipowner may be caught in a dilemma. If he does not agree to renegotiating, the charterer may be forced to repudiate the charterparty and enter into insolvency. The shipowner then faces losing the underlying business and being forced to conclude a charterparty at a lower market rate. On the other hand, renegotiating the deal may not only mean less profit for the shipowner but cause financial difficulties and breach of covenants under the loan agreements. Legal issues have little role to play in renegotiations driven by commercial considerations. However, shipowners considering renegotiating a charterparty should examine if this will have any effect on their loan agreements (including security agreements) and on the shipbroker s commission. Legal arguments for renegotiating In situations where a commercial renegotiation of the charterparty is not a realistic alternative, or perhaps as a prelude to such renegotiations, charterers may consider invoking legal arguments for escaping from or renegotiating the charterparty, due to the radically changed market conditions. How the arguments are framed will depend on the applicable law, but charterers will generally seek to argue that they should be discharged from their obligations, or that the charter rate should be adapted as a result of the changed circumstances. English law has developed the doctrine of frustration, Jonas Rosengren Advokatfirman Vinge Gothenburg, Sweden which operates to bring the contract to an end when, after the contract was concluded, events occur which make performance of the contract impossible, illegal, or something radically different from that which was in the contemplation of the parties at the time when they concluded the contract. The effect of the doctrine is to discharge the parties from any further obligation under the charterparty. However, the doctrine operates within narrow confines and it is not sufficient to bring about frustration that a contract becomes more burdensome and expensive to perform. English judges possess no general power to adapt contracts or relieve contracting parties of their obligations on the grounds of hardship (British Movietonews Ltd. v. London & District Cinemas Ltd [1952] AC 166). It is sometimes claimed that English law is especially strict on enforcing contractual obligations in order to foster certainty and predictability, whereas other legal systems may take a more lenient or fairness-based approach in giving effect to changed circumstances on the parties obligations under the contract. One may question whether this claim is wholly warranted. Under Section 36 of the Contracts Acts, Scandinavian law gives the courts the possibility of modifying a contract term if it is considered unreasonable with regard to, amongst other things, the contents of the agreement and subsequent circumstances. Notwithstanding the broad wording of this provision, it has a very limited application to commercial agreements and it will not be applied to upset the risk allocation agreed between the parties under a charterparty. Nor will other doctrines developed in case law to deal with changed circumstances, such as the doctrine of assumptions, be successfully relied on by a charterer to escape from a bad bargain because of changed market conditions. It is another matter that remedies may be available if a certain price adjustment or currency conversion mechanism turns out to have unintended consequences which do not reflect the parties original intention (see ND 1985 s. 234, Norwegian arbitral award). The doctrines developed in other legal systems to deal with these problems may vary in approach and effect but it is difficult to find legal systems which would allow a charterer to 28

29 g charterparties escape from an unprofitable charterparty even in radically changed market conditions (for a recent survey of the laws of European legal systems, see Hondius (ed.) Unexpected Circumstances in European Contract Law, 2011). It may be noted that the Belgian Court of Cassation in a recent and much discussed judgment (Scafom International BV v Lorraine Tubes SAS, 19 June 2009) held that a seller was entitled to renegotiate a contract for the sale of steel tubes where the steel price, after the conclusion of the contract and before delivery, rose by about 70%. The Court applied the UNID- ROIT Principles of International Commercial Contracts, which rarely, if ever, would apply to a charterparty. Renegotiation clauses In view of the narrow confines of the legal doctrines to alleviate the consequences of financial hardship due to changed circumstances, parties sometimes want to include an express renegotiation clause in the contract. The clauses, known as renegotiation, review or hardship clauses, typically stipulate that under certain defined circumstances a party shall be entitled to request renegotiation of the charterparty, or a certain contract term (generally the charter hire). Some clauses are designed to protect the shipowner and not the charterer from increased costs due to changes in maritime state aids legislation, ship safety regulations etc. (one can refer to the situation in The Elli and Frixos [2008] 2 Lloyd s Rep 119). A renegotiation clause should ideally be drafted to meet the particular needs of the parties and carefully set out the conditions for operating the clause. The enforceability of a renegotiation clause may vary depending on the wording of the clause and the applicable law. A bare agreement to negotiate in good faith has been held unenforceable as a matter of English law (see Walford v. Miles ([1992] 2 AC 128). However, recent case law suggests that it will be enforceable if the contractual provision goes further and gives some guidelines as to the result to be achieved by the renegotiation (see Petromec Inc v Petrolio Brasileiro SA Petrobras (No 3) [2006] 1 Lloyd s Rep 121). Renegotiation clauses that do not give any guidance as to the consequences of the parties failure are likely to cause difficulties in interpretation. Some generally worded clauses may be construed as nothing more than a right for a party to request renegotiating. If the parties want something more they should be specific. One alternative is to provide that an expert or arbitrator to adapt the contract with the view to restoring contract equilibrium. This alternative preserves the contract relationship but may lead to many practical problems: What is the contract equilibrium and how should an arbitrator go about restoring it? Arbitral proceedings take time and what contract terms should apply before an award is issued? If the contract is adapted by arbitration can the terms set by a binding award be changed by further operation of the renegotiation clause? If the parties are not careful there is a risk that the operation of the clause creates more questions than it is intended to solve. Another alternative is to provide that failure to Parties should carefully consider the consequences before inserting a renegotiation clause in their charterparty. agree within a certain period should entitle a party to terminate the charterparty. This will create pressure on the party responding to a request for renegotiation to agree, and avoids procedural difficulties. Termination in the case of a failed renegotiation is the default alternative provided by the ICC Hardship Clause However, the question whether the conditions for the operation of the clause are met could be tricky to determine, especially in relation to excessively onerous or similar expressions. A word of caution Changing conditions is a part of the game in shipping and the law is not there to discharge the parties from unprofitable bargains as a result of changed circumstances. Renegotiation clauses could provide a safety valve for some long-term contractual relationships, but it should be recalled that this comes at the expense of contractual certainty. Even if the renegotiation clause is set to operate within narrow limits, the mere presence of the clause in the charterparty may generate spurious claims for renegotiating as soon as the fixture becomes unprofitable. Therefore, parties should carefully consider the consequences before inserting a renegotiation clause in their charterparty. If they still decide to do so they should draft the clause to fit the particular contractual relationship and are strongly recommended to seek legal advice in order to avoid the legal difficulties that may arise from the operation of the clause. 29

30 Legal Revised German Marine Insurance Clauses Dr. Dieter Schwampe Rechtsanwalt Dabelstein & Passehl Hamburg, Germany Dr. Maximilian Guth, LL.M. Rechtsanwalt, Solicitor Dabelstein & Passehl Hamburg, Germany DTV-ADS The German Insurers Association GDV developed the new German market clauses for the insurance of seagoing ships (DTV- ADS 2009) as an answer to the need for restructuring and simplifying the existing German marine insurance clauses. The backbone of the previous Allgemeine Deutsche Seeversicherung clauses (ADS) dates back to When those clauses no longer Dr. Dieter Schwampe has been the managing partner of Dabelstein & Passehl since 2001 and has over 25 years of experience within the area of marine insurance and shipping law in general. He is a lecturer in marine insurance, shipping and transport law at the University of Hamburg and the author of numerous books and articles on marine insurance and shipping law. Dr. Schwampe is Chairman of the CMI Working Group on Marine Insurance, Vice Chairman of AIDA s Working Party on Marine Insurance and Member of the Legal & Liability Committee of IUMI. He is the immediate past-president and president-elect for 2012 of the German Maritime Law Association. He frequently advises P&I clubs, H&M underwriters and ship owners and is regularly nominated as an arbitrator. Dr. Maximilian Guth joined Dabelstein & Passehl in He holds an LL.M. in Maritime Law from the University of Southampton and wrote his doctorial thesis within the area of marine insurance. Dr. Guth frequently advises P&I clubs, H&M underwriters and ship owners and, due to his further qualification as a Solicitor of England and Wales, also advises on English maritime law. He is a member of various associations, such as the German Maritime Law Association and frequently publishes articles within the area of Maritime law. met the market requirements they were partly replaced or amended by the DTV Hull Clauses in 1978, 1992 and Furthermore, special clauses have been developed, known as Marine Prints, as a reaction to court decisions and market developments. Finally, brokers have developed their own clauses to meet the respective market requirements. To bring light into this contract jungle, GDV set up a working group in 2007, for which one of the authors of this article, Dieter Schwampe, acted as a legal advisor. Whilst the task of the working group was initially confined to hull insurance, the scope of its work was later broadened, to also finally include loss of hire, increased value and war risk insurance. After three years of work including detailed discussions with owners and brokers, GDV released the new clauses, named DTV-ADS 2009, in July Structure The DTV-ADS 2009 generally kept the structure of the ADS 1919 by setting out general clauses in part one (para. 1-53) and closing provisions in part seven (para ). Whenever there is a reference to DTV-ADS 2009 in a policy, these provisions will apply. Provisions in all other parts part two: Hull and Machinery, para ; part three: Increased Value, para ; part four: Loss of Hire, para ; part five: Mines Clause, para. 82; part six: War Risks, para are only applicable in cases of an express agreement thereto within the policy. Part 1 General clauses Not too many changes were made to the general clauses compared to the ADS 1919/ DTV Hull Clauses, but where there are changes they are significant. One of the main changes is that, in general, wilful misconduct or gross negligence is required on the assured s side to forfeit his rights under the respective insurance. Only in connection with the pre-contractual disclosure obligation (para. 22) is ordinary negligence sufficient. In contrast thereto, within the ADS 1919/DTV Hull Clauses, simple negligence is generally sufficient. It follows that the DTV-ADS 2009 clauses are more favourable on this point from an assured s point of view, compared to the ADS 1919/DTV Hull Clauses. Only within the area of risk alteration, where according to clause 11, DTV Hull Clauses, the assured only forfeits his rights when he acts with wilful misconduct, are the DTV- ADS 2009 clauses disadvantageous from an assured s point of view as gross negligence is now enough to forfeit the assured s rights. In relation to seaworthiness, the DTV- ADS 2009 has introduced a new approach with para The insurer is now not relieved from cover in the case of unseaworthiness, but rather in the case of a breach of ship safety regulations, a concept already familiar from the Norwegian Marine Insurance Plan. The burden of proof of (lack of) causation has been moved to the assured s side, which from a ship owner s point of view is certainly not an improvement. However, the ship owner can save cover by showing, alternatively, that he did not act with gross negligence. ADS/DTV Hull Clauses, in comparison, put the burden of proof of cause on the insurer s side, but relieve the insurer if the assured cannot exonerate himself from ordinary negligence. There has been a lot of debate on the new concept of the DTV-ADS 2009 with ship owners, which finally led the GDV to offer the old unseaworthiness concept as an alternative option (para. 33.2). Another important change has been made in connection with the question of the insurance of the risk of piracy. Having 30

31 2009: A brief introduction been part of the traditional all-risk cover under 28 ADS, the DTV-ADS 2009 has moved the piracy risk from hull insurance (para DTV-ADS 2009) to war risk insurance (para ). Further noteworthy changes in their chronological order are: express stipulation of the interests insured within the respective insurances (para. 1.2); the right of the insurer to reduce the agreed value in cases where an overvaluation is no longer dependent on a somewhat unclear material overvaluation (sec. 6 (2) ADS 1919) but on an overvaluation of at least 20%, and it is excluded if either the insured had no knowledge, or the insurer had knowledge, of the overvaluation (para. 10); the insurance ends once the vessel continues or resumes its voyage without the consent of the classification society in cases where the class expires, is restricted or withdrawn (para. 26.2); insurers can, in cases of general average, no longer limit their liability when the contributing value of the vessel exceeds the agreed value sec. 30 (8) ADS 1919 has not been adopted within the DTV-ADS 2009 (para ); introduction of a new exclusion for losses caused by cyber attacks, chemical, biological, nuclear etc. weapons (para. 36). Part 2 Hull and Machinery Insurance Compared to the cover provided by the ADS 1919 and the DTV Hull Clauses, three noteworthy changes have been introduced within the DTV-ADS 2009 regarding Hull and Machinery Insurance: Firstly, the cover for loss or damage due to latent defect, inherent vice or breakage of the vessel s shaft, which is confined to machinery damage under ADS 1919/ DTV Hull Clauses, has been extended to damage to the hull. Furthermore the defective part itself is insured as long as such was classed by a classification society (para. 59). Secondly, the DTV-ADS 2009 requires, in cases of partial loss, the involvement of a surveyor only when the parties disagree on the amount of damage (para. 63) in contrast, according to sec. 74 ADS 1919, a surveyor had to be involved in every case. Finally, it is worth noting that in cases of constructive total loss it is only necessary to sell the vessel by way of a public auction when the parties cannot agree on the value of the vessel in damaged condition (para ) according to sec. 77 (1) ADS, the sale by public auction has to be carried out in every case. Part 3 Increased Value In respect of increased value, the German market operated on the basis of the DTV Interest Clauses 1978/2004. These clauses contained, besides the increased value provisions, provisions as to freight and the insurance premium paid in cases of total loss. Part three of DTV-ADS 2009 has kept the threefold structure of cover for interest, freight and insurance premium, but has significantly shortened the wording. Part 4 Loss of Hire Insurance It is the first time that the German market has been provided with standard clauses for a loss of hire insurance. These clauses were drafted on the basis of Chapter 16 of the Norwegian Marine Insurance Plan. Part 5 Mines Clause The provisions of the DTV Mines Clause have been adopted in part five of the DTV- ADS If agreed, the cover is extended to damage caused by derelict weapons left behind after a war (para. 82.2). According to para of part six of the DTV- ADS 2009, the same is insured under the war risks insurance. Part five is therefore an extract insurance of the full war risk insurance provided by part 6. Part 6 War Risk Insurance The newly introduced standard clauses within part 6 of the DTV-ADS 2009 for war risk insurance are based on the institute war and strike clauses-hulls. Since the Second World War no war risk insurance has been written in Germany and it is the first time since then that the German market has been provided with a set of standard clauses on this. Part 7 Concluding Clauses The closing provisions of part seven of the DTV-ADS 2009 contain a five-year preclusion period (para. 89), stipulating that German law applies to the contract (para. 90) and finally gives the court at the insurer s place of business the exclusive jurisdiction for any dispute (para. 91). Outlook The DTV-ADS 2009 is a new, well-structured, clear, balanced set of provisions. They provide clear improvements for ship owners, which significantly outweigh the few clauses in which cover has been tightened. However, the German hull insurance market, like many others, is rather conservative, so it may take some time until the new clauses replace the ADS/DTV Hull Clauses market-wide. 31

32 Club Information Staff presentations New Senior P&I Claims Executive, Françoise Fouchier-Matte: With a disposition for building trust Carola Weidenholm Corporate Communications Françoise Fouchier-Matte has many strings to her bow, with more than 18 years experience from three different fields of the maritime business, paired with a solid education in the area. Add to that: two children, lots of hobbies, a new country to call home, a new job and a new language to learn, and an active curious person emerges. She has her background in Maritime Law but also studied economics for four years. After her diploma in 1992, she started at La Touline an association for maritime employees where she assisted seafarers with job searching and training. One year later it was time to move on to France Shipmanagement, where she worked in the legal and sea personnel departments for six years. In 1998 she got an offer from Skuld in Paris, but only a year later they closed their office. This didn t stop Françoise. Together with four other former colleagues she started a new company: France P&I, and soon after that she was hired by Skuld s head office in Oslo. Time to move to a new country and the job as claims handler for their French-speaking members. Adding a French angle In 2001 Françoise returned to Paris and her company as a legal advisor. But the appetite for experiencing another country grew, and in February this year she was contacted by a recruitment company about a post as Senior Claims Executive at The Swedish Club. The timing was good, so she sold her shares in France P&I, packed her bags and gathered the family for a move to Gothenburg, Sweden. I already knew quite a lot about the Club from my years in the business and had heard about the high level of service, so of course I was interested! I also saw it as a step forward for me in the maritime industry, explains Françoise. The Swedish Club is a stable company and not too big, which I think is important for the working environment. I also read about their core values on the website proactive, reliable and committed and think it is a great foundation for a company which corresponds with how I want to work, she continues. Françoise has experience from three parts of the maritime business: shipping, insurance and as correspondent. She has also worked closely with the French-speaking world, which is a welcome addition to the Club s competence. My knowledge of the French language and culture is an advantage, as we do business with many French-speaking countries, for example in Africa. I have had many connections with Africa in my work over the past ten years and learnt a lot about their way of working, which sometimes can be a bit different to what we are used to. As a claims handler she thinks it is essential to have good relationships and long-term trust on the market. You also have to be clear, distinct and reliable in your decisions. I think it is important to apply the same rules for everyone, as well as having both the possibility and ability to say no when necessary, for example when a claim goes against our mutuality. Françoise in brief Age: 42. Hometown before Gothenburg: Bayonne, France Family: married to Jean-Christophe and two children, Antton 6 and Bastien 4. Spare time: hasn t had time to start any activities in Sweden yet, but in France she sang in a choir, played the piano and enjoyed some laps in the swimming pool. Before she had her children she also played rugby. Rugby is part of my heritage from my mother s side, as she is Basque, and I also love team sports. She is very keen on Basque history and culture to keep in touch with her roots. Background: holds an LL.M from the University of Bordeaux and a post graduate diploma in Maritime Law from the University of Brest. On top of that she has more than ten years experience of claims handling. Françoise has also worked for Skuld in Paris and Oslo and was co-founder of France P&I in Paris. Of current interest: our new senior claims executive, P&I. At The Swedish Club since: June

33 New P&I and FD&D Claims Manager, Andrew Bates: Around the world by law Carola Weidenholm Corporate Communications New Zealand, England, Kuwait and now Hong Kong. With the law as his field of activity, Andrew Bates likes to work his way around the world. And since 16 May this year he has settled down in the former British colony with The Swedish Club s Team Asia. Primarily he deals with our FD&D cases but he also takes care of P&I claims when necessary. Earlier he spent just under five years in Kuwait City at the state-owned hydrocarbon umbrella organisation, Kuwait Petroleum Corporation. Here he worked as an in-house lawyer specialising in shipping and petroleum exports. It was also in Kuwait he met his future wife. Broadening the competence Andrew moved from New Zealand in 1998 to see what London had to offer a lawyer with a few years of experience. I wanted to explore another side of shipping in England, as this is the foundation of the industry. It was also a good opportunity for me to broaden my work experience, he tells. His first job in the UK was at Lloyd & Co and then, in 2000, he moved on to work as a solicitor at the shipping firm MFB Solicitors for just over three years. In 2003 it was time to enter the P&I market at Thomas Miller, UK, where he worked with both P&I and FD&D claims. Here he stayed until 2006 when he was recruited to Kuwait Petroleum Corporation. Kuwait gave me invaluable experience in my occupational field as well as an insight into the Arab world and culture. I have fond memories of the work and the people. The Middle East is an incredibly interesting region and I hope to visit there again. Holds the need for integrity highly Last year he was approached by a recruitment consultant about the job as claims manager at The Swedish Club in Hong Kong. He already knew quite a lot about the company from his years in the shipping industry but learnt more when he went to the head office in Sweden to meet with the HR director, Helena Wallerius Dahlsten and the FD&D manager Anders Leissner for an interview. It was not easy to decide to move from Kuwait but my wife and I wanted to live closer to our native countries, New Zealand and Thailand, so the grand parents can see more of our first child. We were also curious about what the seething life of Hong Kong could offer, he says. The Club has a good reputation in the shipping industry. There is a culture of maintaining high integrity, and the Swedish trait of showing respect to all people comes through, which I like. Right now Andrew mainly deals with charterparty disputes on behalf of Asia based members of The Swedish Club. The days pass very quickly as there is a lot to do. My job is to give the members what they pay their premium for clear legal advice and solutions to problems. As this is a mutual company it is also important to remember to always treat every member equally, he finishes. Andrew in brief Age: 41 Hometown: Christchurch, New Zealand Family: married to Orathai and a daughter, Kimberley, 18 months. Spare time: spends a lot of time with his family but also enjoys mountain biking on Lantau Island s many trails. When he has time he likes to read, mainly non fiction, but he is also fond of the British author Sebastian Faulks. Background: holds a Bachelor of Law degree from the University of Canterbury, New Zealand. He is also a qualified barrister and solicitor in NZ as well as a solicitor in the UK. Andrew has about 10 years experience of in-house legal work and P&I. Previously he worked for the Kuwait Petroleum Corporation. Of current interest: our new Claims Manager, FD&D and P&I At The Swedish Club since: May

34 Club Informnation Notice Board Photo: Eukor Henric Gard new member of the Cefor Board Henric Gard, Director of Marketing & Business Development at The Swedish Club has been elected member of the Cefor Board of Directors from April He is succeeded by Lars A. Malm, Director, Risk & Operations at The Swedish Club. Cefor is a Nordic marine insurance organisation with the aim to promote quality marine insurance, through comprehensive statistics, competence building, agreed all risks conditions and a common public voice. For more info on Cefor please refer to Brazilian Iron Ore Sinter Feed Concern has been raised about the transportation of Iron Ore Sinter Feed from Brazilian ports, in particular the ports of Ponta da Madeira, Tubarao, Itaguai, Santana and Sepetiba. It has been noted that certain Brazilian shippers have been classifying Iron Ore Sinter Feed as a type C cargo without providing supporting documentation as per the IMSBC Code. Testing has shown that Sinter Feed has flow characteristics of a Type A cargo and therefore may liquefy if shipped with moisture content in excess of its flow moisture point (FMP.) Brazilian Iron Ore Sinter Feed is to be treated as a Type A (mineral concentrate) cargo within the IMSBC Code unless proven otherwise. Therefore the member is to demand from the shipper a transportable moisture limit (TML) certificate and a signed certificate or declaration of the moisture content prior to loading. These certificates must be attained by the shipper in accordance with the methods outlined in the IMSBC Code. Note: Due to the alleged inadequacy of testing facilities in Brazil it is advised that the member informs the shipper of their demands well prior to loading in order to prevent delays. For further information regarding bulk cargo liquefaction, please see P&I Circular 2510/2010, which can been found on our website News/Circulars or contact our claims executives. Captain Gilbert Fausto Cabrera to the left, being honoured by Young-Cheol Noh of EUKOR Car Carriers for his and his crew s extraordinary efforts during the tsunami in Japan. Car Carrier Morning Cedar escaped the tsunami EUKOR vessel M/V Morning Cedar escaped the tsunami. She was alongside in the port of Onahama discharging lumber when the earthquake struck in Japan on 11 March Within minutes of the violent 4-5 metre tidal wave sweeping into the port, the vessel s mooring lines snapped and the vessel started to move violently. Captain Gilbert Fausto Cabrera and his crew immediately decided to make an unassisted emergency deberthing in order to escape the quayside and avoid danger and damage to crew and vessel. After some dramatic manoeuvring to get out of the violent port basin and simultaneously avoiding collisions with nearby vessels, the crew managed to steer clear of all obstacles and eventually bring the MV Morning Cedar out to safe waters a few nautical miles off the coast. Magnus Axelsson new Chairman IG IT Sub Committee Since mid-july this year, Magnus Axelsson of The Swedish Club is Chairman of the International Group IT Sub Committee. He joined the group on its start, on his 35 th birthday! 9 April 2001, and has been on the committee ever since. The Sub Committee s responsibilities have increased considerably over the last few years as has the number of members, who now include represent- 34

35 atives from all P&I clubs. Magnus took over from John Trew, of Britannia, who says: Magnus has been on the Sub Committee for 10 years and has made a significant contribution during that time. He has all the skills and experience needed for the role and I wish him well. The Sub Committee has over the years been involved in the following projects; IG website, the Repository, Feesable, miscellaneous statistical databases, and now the latest and also largest project the DCP, Data Collection portal. BMP 4: Shipping industry s best practices for piracy protection updated The fourth edition of the shipping industry s Best Management Practices for Protection against Somali Based Piracy (BMP4) has been released after a long waiting period. This replaces BMP3 and reflects the experiences of the industry over the past 12 months. BMP 4 is supported and endorsed by the combined naval forces EUNAVFOR, NATO, CMF, UKMTO and INTERPOL. The implementation of BMP has proved to be the best defence against Somali-based piracy. The latest edition of the pocket-sized booklet includes a new executive summary detailing the three fundamental BMP requirements, namely register with MSCHOA, report to UK- MTO and implement self protection measures (SPMs). BMP4 also includes an aide memoire illustrating how to avoid being a victim of piracy and a revision of the places considered part of the High Risk Area for Somali pirate activity. Changes and additions include a clarification about reporting requirements, a sub-section on the prosecution of pirates, information about the use of citadels, considerations about ballistic protection for the crew who may be required to remain on the bridge during a pirate attack including the security of access points and review etc. Also included is the use of armed security guards and suggestions for both companies and ship captains planning a voyage through high-risk areas. BMP 4 also has a new sub-section on Prosecution of Pirates Assisting Law Enforcement Authorities, which was produced in conjunction with INTERPOL and new advice about the use of ship protection measures. Adopting BMP guidelines remains the best preparation against piracy for vessels traversing the Gulf of Aden and the Indian Ocean. BMP4 uses hard-won experience and knowledge gained since version 3 to update the practical knowledge and guidance for owners and operators. BMP4 builds on the previous guidelines providing more detailed guidance preand post-attack, and it now reflects the reality that many ship operators are using armed guards. BMP 4 makes it clear that where any guards are deployed they must not be an alternative to BMP 4, but an additional layer of defence. BMP4 is endorsed by virtually all industry organizations including BIMCO, ICS, INTERCARGO, INTERTANKO, ITF, OCIMF and SIGTTO, to name a few, and is currently due for distribution in early September. The potential consequences of not following BMP 4 are considered to be severe and the Club strongly recommends members and clients to get acquainted with these new guidelines. P&I Rules & Exceptions 2012 The Swedish Club is proud to present the third, revised edition of our publication P&I Rules & Exceptions which is soon on its way to the printing house. This new edition, as its precursors, is containing supportive comments to our P&I Rules and is an helpful working tool as well as source of information for parties working, or involved in any other way, with P&I insurance. New for this edition of the book is that you will also find a digital version on The Swedish Club Online (SCOL) website accessible for members and business associates. We hope that you will find this new revised version to be both interesting and useful and that it will help you in your daily work, no matter if this is the work of a member, broker, or any other party of the shipping industry. Stowaways embarking in Turkish ports Because of its geographical location, Turkey provides a convenient crossing point from Syria, Iran and Iraq to the EU. The ports close to Syria on the southern Turkish coast have traditionally been a preferred place for stowaways to board ships. Since these ports increased security, a growing number of stowaways have been boarding at other ports in Turkey where security measures are less developed. Shipowners are therefore advised to show extra vigilance and increase their own security measures when calling in Turkish ports. 35

36 Club Information News from Gothenburg Photo: istockphoto Facing the future Tony Schröder Area Manager Team Gothenburg The summer has passed and we are now well into the autumn the Club is moving forward into the future closing in on its 140 th anniversary! In constantly progressing, we have recently made an internal change. On 1 September 2011, we merged the two teams that operated out of Gothenburg into one unit Team Gothenburg. For external users of the Club s services this should only be noticeable by the fact that the service machinery is working in an even better and more well oiled fashion. Your points of contact will be the same. We are all very pleased with this internal change, and it is with great pride that we have now started to work together as one unit keeping up our good service and support towards our member and broker community. We will also aim at enhancing and refining our market presence. The proverb and the famous quote Change is the only constant by the ancient Greek philosopher Heraclitus, whom was known for his doctrine of change, fits in well and rings true at least from a larger perspective over time. For us, this particular change was driven by internal efficiency and resource management plainly to be better geared to face future challenges. We have three pillars in the new Team Gothenburg unit. Heading up these three pillars are Maria Berndtsson, recently appointed as Head of Claims P&I, Johan Kahlmeter as Head of Claims Marine and Hans Filipsson as Deputy Area Manager and Head of Underwriting. These three pillars work closely together and utilise the deep in-house knowledge that is shared alike amongst naval architects, lawyers, master mariners, economists and engineers, etc. This, coupled with nearly 140 years of claims knowledge, spanning over every variety of marine insurance, makes us unique. The team of course draws great assistance from our in-house Loss Prevention, Risk & Operation and Corporate Communications to name a few. There is hardly any other underwriter in the world that truly does all classes of marine insurance, under one roof, and as such we have an incredible opportunity to discuss all angles of shipping and marine insurance just across the desk, or over a quick cup of coffee. This makes us as a unit wide-ranging and very knowledgeable with the aim of assisting all our good friends with world class service. Another pleasing announcement in the Team is that we have strengthened our claims services by adding Françoise Fouchier- Matte, who is an experienced P&I claims handler, as a Senior Claims Executive. She is French and adds further vigour to the Club s internationalisation. Françoise joined us in June We are also pleased to announce another recruitment Malin Gustafsson joined us in August as an Underwriting Assistant. We have grown, especially on Owners P&I but also in War insurance, and Malin will add extra vitality and strength to this important underwriting service. We warmly welcome both Malin and Françoise and their families to the Club. Over the past couple of months we have continued to add some new members, sometimes from new countries in the Club s perspective, such as Bulgaria (extremely gratifying!). We hope that all new members will discover, like their fellow members in the Club have, that their choice of a new business partner in The Swedish Club is something that they will cherish and value in times to come. We hope to see each and every one of you soon facing the future together! 36

37 Club information News from Piraeus Photo: istockphoto Academy of Athens educating people on solid pillars. Training people properly it will pay off! A great summer has passed and we have had the first few rains with quite severe flooding in Piraeus as a result. The fact that the city s streets were filled with garbage, as most garbage dumps have been blocked by unhappy public workers, added to the chaos. Strikes that used to be a semi-weekly occurrence are now happening almost daily and transportation has been hit hardest. Everybody in Greece seems to be unhappy with the current situation and the measures that have been introduced so far have not resulted in the much hoped for results. Everybody is waiting to see what will happen. A recent survey amongst Greek shipowners revealed that future prospects for shipping are low. Sentiments for the next few years are at the lowest point in many years, something that Martin Stopford Clarkson s survey recently re-confirmed. The outlook for most shipping segments looks dismal. Greek shipowners have always been good at predicting the shipping market s ups and downs and have been able to time buying and selling as if they had a crystal ball. The current state of the market may provide buying opportunities when distressed assets need Tord Nilsson General Manager/Area Manager Team Piraeus to be sold, as banks are moving in and closing down credit lines and calling in loan covenants. The problem for prospective buyers is the lack a capital provided by financiers. Only people with a really good credit history and quite a bit of cash can get the much-needed loans. We have seen an increase in the frequency of both P&I and H&M claims. Crew claims have been on the increase for quite a while and it now seems likely we will see an increase in other crew-related claims, namely, navigational claims. Crew quality has been an issue for both shipowners and insurers for a long time, and it seems the worry we have all had is now reality. We have been providing crew training for many years through our Maritime Resource Management (MRM) programme and although many of our members have sent their crews to our training courses we hope that more people will do so, as we firmly believe in the benefits of these courses. Employ the right people and train them properly it will pay off. 37

38 Club information News from Asia Photo: istockphoto There is no doubt that Singapore has become an important international maritime centre in Asia. Singapore on course to become an International Maritime Centre The Singaporean government set up The Maritime and Port Authority of Singapore (MPA) in 1996 with a mandate to develop Singapore as a premier global hub port and International Maritime Centre (IMC) among other things. Actually, long before establishing the MPA the Singaporean government had embarked on a course of developing Singapore as an International Maritime Centre. Singapore introduced preferential tax laws for shipowners in order to attract shipping companies to move to Singapore. New shipping companies moving to Singapore would enjoy tax exemption for the first ten years, which could be extended upon application and review. Noticeably, some Hong Kong shipowners and ship managers moved to Singapore in the 1990s and 2000s. Many European shipowners have moved their operations to Singapore over the past ten years. A large number of Japanese shipowners have moved their ships to Singapore for ship management services. In recent years some Chinese shipowners and operators have moved from China to Singapore. Meanwhile some Indian shipping companies are making the same move. According to the MPA about 1.92 billion gt called into the port of Singapore in 2010; container throughput amounted to 28.4 million teus; cargo throughput over million tons; bunker sales over 40.9 million tons; and ships over 48.8 million gt were registered in the Singapore Registry, among the top 10 ship registries in the world. Perhaps by any single measurement some other cities or states may produce larger numbers. For example, Shanghai exceeded Singapore a couple Ruizong Wang Managing Director/Area Manager Team Asia of years ago to become the world s number one port in terms of container throughput; whereas the tonnage of ships flying the Singaporean flag still lags behind the tonnage of Hong Kongflagged ships. But there is no doubt that Singapore has become an important international maritime centre in Asia. Following the shipping companies moving to Singapore, other sectors of the maritime industry also thrived: bulk commodities trading, ship financing, marine insurance, legal services etc. The maritime cluster is rapidly expanding in Singapore, and the trend is continuing. Last year the Singapore Shipowners Association held its annual dinner party for its members. More than two thousand people attended the event. It is anticipated that this year s dinner party will be even bigger in terms of participants. The sheer number of people attending such an event will make other cities in the region envious. Singapore is a very important market for the Club. Five years ago the Club had only two members in Singapore. Now there are about 15 members. 38

39 Club Information News from Oslo Photo: istockphoto In line with business plan for 2011 Our targets for 2011 s underwriting have been reached. We have received strong support, primarily from Norwegian brokers, but also from a number of clients in our first year of operation. As of October 2011, we have written 30 accounts, with an average participation of approximately 4%. The number of Rigs & FPSOs on our books will soon exceed 200 units, with an average line of approximately USD 10 million per unit. We are aiming to widen our book of business in 2012, and also increase our share on existing accounts, where possible and feasible. We intend to continue our marketing efforts towards brokers and clients. We feel that competition for business has recently increased, both from Lloyd s Markets based in London and in Oslo. Both local market leaders, Gard and Norwegian Hull Club, are under some pressure and trying to retain their position and lead Verner Rydning Senior Manager Team Oslo Energy lines/market orders. We are here mainly to support the Scandinavian market. We are currently focusing on improving and refining our underwriting processes and administration routines, based on our first nine months experience and valuable input from brokers, clients and reinsurers. We will soon be ready for the 2012 renewal season with most accounts renewing from 1 January to 1 July The news from Oslo are still good. 39

40 Club Information Out and About Cocktail Reception in Hamburg 29 September 2011 In conjunction with the Club s Board Meeting in Hamburg a cocktail reception was held at Der Übersee-Club. The reception was well attended by board members and business associated. From left: Christian Ross (Georg Duncker GmbH, Hamburg), Eva van Heek Lilljegren (The Swedish Club) and Michael Vinnen (F.A. Vinnen & Co, Bremen). Managing Director Lars Rhodin greeted all guests welcome to the cocktail reception. From left: Peter Rybarczyk (Reederei NORD, Hamburg) and Hans Detlev Olsen (Leonhardt & Blumberg Gmbh, Hamburg). From left: Thomas Hackman (Marine Assekuranz GmbH, Hamburg), Hans Filipsson (The Swedish Club) and Thomas Rehder (Carsten Rehder Schiffsmakler und Reederei GmbH & Co, Hamburg). 40 From right Sumate Tanthuwanit (Regional Container Lines, Bangkok) and his son Borvornsint Tanthuwanit. From left: Heike Warnke (Junge & Co Versicherungsmakler GmbH, Hamburg), Anders Leissner (The Swedish Club) and Helmut Ponath (NSB Niederelbe Schiffahrtsgesellschaft mbh & Co KG, Buxtehude).

41 Club information Out and About Photo: Anna Lundberg The traditional gala dinner was held on the Vasa museum around the old famous wreck of the Swedish warship Vasa where a delicious dinner was served with traditional Swedish fresh products. Just as the conference as a whole, the gala dinner had participants from all over the world. WISTA-AGM in Stockholm attracted 220 leading ladies The 31 st WISTA International Conference and Annual General Meeting was held in Stockholm September, Karoline Alfredsson, Claims Executive at the Club attended the event of which The Swedish Club was one of the proud sponsors. WISTA stands for Women s International Shipping & Trading Association and is an international organization for women in management positions involved in maritime transportation business and related trades. The organization currently has over members in 30 National WISTA Associations and this year the annual conference managed to attract not less than 220 ladies from 27 different countries. The theme of the conference was Leadership Opportunities for the future and discussions were held regarding what is required from the leaders of tomorrow within shipping. The conference had many interesting and renowned speakers and one of them was the IMO Secretary General Mr. Mitropolous who held a speech concerning global development. During the Annual General Meeting a new president was elected for the WISTA International and the chosen woman was Karin Orsel from the Management Facilities Group. 41

42 Club information Out and About Mats jumped high... NSB Sport Festival 2011 The annual NSB Sport festival in Buxtehude took place on 16 September this year. As a sponsor, The Swedish Club participated with three athletes who stretched beyond their limits to defend the Club s honour. We would like to take this opportunity of thanking NSB Niederelbe Schiffahrtsgesellschaft mbh & Co for arranging this well-organised event....and Anders long. Per-Magnus going for gold on the running track. The Swedish Club Team from left: Mats Fielding, Anders Holmberg and Per-Magnus Jonasson. 42