B) Maritime Industry

B.3 Law of the Sea

TIM CARTER AND KRIS DE BAERE

Who owns the sea?

The ownership of sea and the oceans was not an issue until the 16th century, the era of colonialism and the period when Spain and Portugal were laying claim to large parts of the world.

In the Roman period, the Mediterranean was called the Mare Nostrum, Latin for “our sea”.  However, the Romans claimed the right to command rather than the right to own. In general, Roman law accepted the freedom of the seas as a legal regime[1].

In the 12th century, the first states were claiming exclusive rights on the sea. In that period, Venice was the maritime centre of the modern world and in order to control their expanding activities, they claimed exclusive authority over their coastal waters. Other important maritime states such as Genoa, England and the Nordic countries followed. The idea of the territorial sea was born and was there to stay.

In 1609, the Dutch philosopher Hugo Grotius published “Mare Liberum” formulating the principle that the sea was international territory and all nations were free to use it for seafaring trade. This idea was limited to the open sea, not land-locked seas, bays or coastal waters[2].

In the same period Spain, Portugal and Britain favoured the idea of “Mare Clausum” as published by John Seldon in 1652. Ocean, seas and any other navigable body of water could be under the jurisdiction of a single state and closed or not accessible to other states[3].

This controversy gave rise to many conflicts and finally the maritime states moderated their demands. The Mare Liberum idea triumphed. In his ‘De Dominio Maris’ of 1702, Cornelius Bynkershoek found a workable formula, restricting maritime dominion to the actual distance within which cannon range could effectively protect it. This became universally adopted and developed into the three-mile limit[4].

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Figure 1 Mare Liberum versus Mare Clausum (De Baere , 2018)

In the 20th century new economic parameters surfaced. People discovered that the sea and seabed host an abundance of natural resources such as fish, crude oil and minerals and in 1945, based on the international law principle that every nation has the right to protect its natural resources, the United States extended their control to all the natural resources on the continental shelf. Soon, other nations such as Chile, Peru and Ecuador followed and extended their rights to 200 miles in order to protect their fishing grounds.

United Nations Conference on the Law of the Sea (UNCLOS)

In 1956, the United Nations held its 1st Conference on the Law of the Sea (“UNCLOS I”) in Geneva, Switzerland. UNCLOS I resulted in four treaties, concluded in 1958:

  • Convention on the Territorial Sea and Contiguous Zone , entry into force: 10 September 1964
  • Convention on the Continental Shelf , entry into force: 10 June 1964
  • Convention on the High Seas , entry into force: 30 September 1962
  • Convention on Fishing and Conservation of Living Resources of the High Seas , entry into force: 20 March 1966

Although UNCLOS I was considered a success, it left open the important issue of the width of territorial waters. A second conference held in 1960 again failed to reach agreement. It was not until 1973 that a third conference, UNCLOS III[5], was successful. The main trigger for this conference was still the issue of varying claims of territorial waters. Some countries claimed 3 nautical miles, while others claimed a lot more.

In 1982, the treaty previously agreed in 1973 was declared open for ratification and in 1994 the Convention came into force as the Convention of Montego Bay. The convention comprises 17 parts and 9 annexes with 436 articles. Today, the Convention has been ratified by 168 parties, which includes 167 states and the European Union. The most remarkable absentee is the USA, although the U.S. has, unilaterally, adopted many of the treaty’s features, the most important being the adoption of the 200 mile Exclusive Economic Zone (EEZ) in 1977[6].

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figure 2: UNCLOS III Membres[7]

UNCLOS III

The main topics in this Convention include:

  • Territorial sea & contiguous zone
  • Straits used for international navigation
  • Archipelagic status and transit regimes
  • Exclusive economic zones (EEZ)
  • Continental shelf jurisdiction
  • Deep seabed mining,
  • The exploitation regime,
  • Protection of the marine environment,
  • Scientific research,
  • Settlement of disputes.

Within the context of this publication, we will limit ourselves to the main topics relevant to the field of maritime health.

The international zones of maritime jurisdiction

UNCLOS classifies the sea into a series of zones as the basis for determining jurisdiction, as shown on the diagram below

B-3-3-4.gif

Figure 3 The international zones of maritime jurisdiction[8]

Every coastal state has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles (nm) from the low water line as shown on officially recognized charts. Commercial ships of all nations have the right of innocent passage through this zone. Innocent passage requires that the ship does not pose any public danger or gain economic advantage from the territorial waters[9].

The contiguous zone extends an additional 12nm beyond the 12 nm territorial sea (totaling 24 nm from shore). In this area the coastal state is permitted to "prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations".

States may claim an Economic Exclusion Zone (EEZ) extending for up to 200 nautical miles from the low water line, except where this is closer to another country (UNCLOS Art 57).  The coastal state has the exclusive right to the exploration and exploitation of the sea and seabed and it is estimated that 90% of living marine resources are caught within this zone. More than 100 of 140 coastal States claimed an EEZ. Rights to explore the seabed further may be granted.

The High Seas include all parts of the sea that are not included in the EEZ, in the territorial sea or in in the internal waters of a state, or in the archipelagic waters of an archipelagic state. The high seas belong to humanity (Mare Liberum), everyone is free to explore this area without the permission of a coastal state, and international legislation applies.

The statute of a ship at sea


[10]: Principle of extra territoriality

The world’s seas and oceans are divided into 2 parts:

  • Territorial waters
  • High Seas (Mare Liberum)

Military ships (or state ships not engaged in commerce) enjoy extra territoriality. This means that they are exempt from the applicability of jurisdiction of the local law or tribunals. These ships represent a sovereign part of the flag state.  Wherever the military or state ship is, only the law of the flag state is applicable.  Diplomatic means must be used to resolve any issues. 

However, military ships do not enjoy the right of innocent passage. Whenever a military ship is entering the territorial waters of another country, it must request, and be granted, permission to pass. If not this entrance might be considered as an act of war.

Merchant ships, on the other hand, enjoy only a partial extra territoriality. They are not part of the territory of the flag state. The laws of the flag state are applicable when in international waters and every warship has the right to ask for the identification of a merchant vessel. When a merchant ship is sailing inside a nation’s territorial waters, the law of the territory is applicable. Outside the territorial water of a signatory country, the flag state rules are applicable. It is at the high seas that the difference between a black and white listed (see Ch. 3.4.4) flag state becomes of major importance.

 

[1] Post, A. (1983). Deep sea mining and the law of the sea. The Hague: Martinus Nijhof.

[2] Grotius, H., & Struik, A. (2012). Hugo Grotius. Createspace Independent Publisher.

[3] Lesaffer, R. (2017). Mare clausum (The Closure of the Sea or The Ownership of the Sea) 1635 John Selden. In S. Dauchy, , G. Martyn, A. Musson, & H. Pihlajamäki, Transmission of Western Legal Culture. 150 Books that Made the Law in the Age of Printing (pp. 190-194). Springer.

[4] Kanti Saha, T. (2010). Legal methods, Legal systems and research. New Delhi: Universal .

[5] United Nations Convention on the Law of the Sea, Montego Bay, 10 December 1982, United Nations Treaty Series, vol.

1833 (p.3), 1834 (p.3), 1835 (p.3)

Available from https://treaties.un.org/Pages/showDetails.aspx?objid=0800000280043ad5&clang=_en

[6] United Nations. (2010). United nations Treaty Collection. Opgehaald van CHAPTER XXI , Law of the Sea, 6 . United Nations Convention on the Law of the Sea, Montego Bay, 10 December 1982: https://treaties.un.org/pages/ViewDetailsIII.aspx?src=TREATY&mtdsg_no=XXI-6&chapter=21&Temp=mtdsg3&clang=_en

[7] Wikipedia. (2018, Augustus 9). Wikipedia, the free encyclopedia. Opgehaald van List of parties to the United Nations Convention on the Law of the Sea: https://en.wikipedia.org/wiki/List_of_parties_to_the_United_Nations_Convention_on_the_Law_of_the_Sea

[8] Lallier, L., Broggiato, A., Muyldermans , D., & Vanagt, T. (2016). Marine Genetic Resources and the Access and Benefit-Sharing Legal Framework. In L. Stal, & M. Cretoiu, The Marine Microbiome (pp. 453-472). Springer.

[9] United Nations Convention on the Law of the Sea, Montego Bay, 10 December 1982, United Nations Treaty Series, vol. 1833 (p.3), 1834 (p.3), 1835 (p.3). Art. 2(1), 3, 5, 17.

Available from https://treaties.un.org/Pages/showDetails.aspx?objid=0800000280043ad5&clang=_en

[10] De Baere , K. (2018). Maritime Administration (unedited). Belgium: N.A

B.4 Flag state control

TIM CARTER AND KRIS DE BAERE 

What is Flag State?

Every merchant ship must be registered to a state. Ship owners can choose in which state to register their ships and this is based on a number of economical, regulatory and logistical factors. The state that a ship is registered to is its flag state. This state then has regulatory control over the commercial vessels registered under its flag.

History

The flag or ensign of a ship is a very basic part of maritime history and the assorted maritime flags that flutter on every ship testify to centuries of seafaring heritage and tradition.

If you ask children to make a drawing of ship, without exception they will add a flag.

Before the era of radio telecommunication, the main role of a ships flags was to communicate. Again, following tradition, a ship was and is required to fly its ensign when entering and leaving a harbour, when sailing through foreign waters and when a warship signals for the ship to do so.

Historically, national states have ascribed nationality to ships in the same way they would ascribe nationality to citizens. This practice had a number of purposes.

Firstly, ship owners felt the need for protection of their ships, whilst these were sailing on the high seas and exposed to a number of dangers, including piracy. The granting of nationality to the ship, and the consequent right to fly the flag of that country, allowed the ship to seek the protection of that country against any individual or third state which threatened her interests. Secondly, the granting of nationality signified the jurisdiction of that state over the ship and therefore a specific set of rules governed the relations amongst the members of the ship community[1].

For example, until 1990, if more than 50% of the owners of a ship had Belgian nationality the vessel automatically obtained the Belgian nationality and was entitled to fly the Belgian flag. In the old days the captain also had to be Belgian because he had some public law functions. Today a ship obtains a nationality by simple registration in a national register of origin and this dictates the legal status of the ship. The certificate of registry proves the nationality of the ship.

Duties of the Flag State

Various international conventions and regulations define the duties of a flag state, including the:

  • International Convention for the Prevention of Pollution from Ships (MARPOL 73/78),
  • International Convention for the Safety of Life at Sea (SOLAS)
  • International Convention on Standards of Training, Certification and Watch keeping for Seafarers (STCW 78/95)
  • Convention on International Regulations for Preventing Collisions at Sea (COLREG) 1972 International Convention on Load Lines (LL) 1966
  • United Nations Convention on the Law of the Sea (UNCLOS) 1982

Through these conventions, the IMO, being the only international rule-maker with a universal impact, is promoting “Safe, secure and efficient shipping on clean oceans” through a coordinated system of international conventions, codes, regulations, guidelines and recommendations. However, IMO has no direct authority on board of the ships. The flag state executes this authority, as defined by the United Nations Convention on the Law of the Sea (UNCLOS)[2], in particular in

  • Article 91.1: “Every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly. There must exist a genuine link between the State and the ship”
  • Article 91.2: “Ships shall sail under the flag of one State only and… shall be subject to its exclusive jurisdiction on the high seas.”
  • Article 94: “Every State shall effectively exercise its jurisdiction and control in
  • administrative, technical and social matters over ships flying its flag” That is, Flag States shall ensure compliance by vessels flying the flag or of their registry with applicable international rules and standards, established through the competent international organization or general diplomatic conference, and with their laws and regulations adopted in accordance with the UNCLOS convention.
  • Article 97: “No arrest or detention of the ship, even as a measure of investigation, shall be ordered by any authorities other than those of the Flag State in relation to matters of collision or any other incident of navigation on the high seas”
  • Article 217: “Flag States shall ensure compliance by vessels flying the flag or of their registry with applicable international rules and standards, established through the competent international organization or general diplomatic conference, and with their laws and regulations adopted in accordance with the UNCLOS convention”.

The Flag State has the overall responsibility for the implementation and enforcement of international maritime rules & regulations for all ships granted the right to fly its flag.

In addition the main federation of national ship owner organisations, the International Chamber of Shipping, publishes its own listing of the responsibilities and performance of Flag States each year, as a guide to its members[3]. It is important that the Flag States participate in the work of the international organisations, such as the IMO and act as a middleman between these organisations and the ship-owners.

The Flag State meets its obligation by imposing minimum standards as provided in their national legislation. Conformity with the national law is the responsibility of the flag but is mostly delegated to recognized organizations inspecting vessels and issuing certificates to vessel and crew. Very often these recognized organizations are the traditional classification functioning on behalf of the national government. Some big maritime countries still have a traditional dedicated maritime inspection service in place.

As an example, this means that the Flag State has an important responsibility when it comes to the

  • living and working conditions on board
  • sanitary conditions
  • medical stores put on board
  • equipment of the hospital
  • training of the crew and responsible officers
  • application of the work and resting periods

The Flag State is the sole agent responsible for issuing certificates of competence and medical fitness and for deciding whether certificates issued by other national authorities are acceptable. This means they are governing the training standards including first aid instructions and advanced medical education as well as the criteria for fitness to work at sea.

Not all Flag States show the same sense of duty when it comes to enforcing international standards. A ship operates under the laws of the flag she is flying, so vessel owners often register in other nations to take advantages of reduced regulation and lower administrative fees.

Flags of convenience

The term “flag of convenience” (FOC) refers to the registration of a ship in a sovereign state that is different from that of the ship's owners.

The ship owner may choose not to register their ships in the country where they are based to achieve tax reductions or lower administrative fees. They may want to avoid stringent, national regulations enforced by active inspection regimes that apply IMO rules without compromise, as these may lead to increased operating costs3. In this situation the ship owner will need to register the ship in a nation with an open registry (OR), or a nation that allows registration of vessels owned by foreign entities.

Not all Flag States show the same sense of duty when it comes to enforcing international standards. Open registers do not necessarily enforce safety standards, minimum social standards or trade union rights for seafarers[4].

However, care is needed when using the expression “Flags of convenience”. Not all flags with ORs have poor standards and some FOCs have excellent safety records, e.g. the Bahamas or Panama. Unfortunately others have a poor reputation and appear more interested in the revenue from ship registrations than enforcing the minimum standards as laid down in the relevant conventions.

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Figure 12.2‑1 FOC Countries[5]                                                               

The lack of effective regulation and enforcement by substandard Flag States has been one of the factors leading to the rise of ‘port state control’ (Ch. 3.5), that is inspections of ships by the national maritime authority when a ship is in port

A Flag State’s reputation depends upon statistical data on the frequency and severity of shortcomings at inspection found during Port State inspections. Port States share data on an annual basis and this is used to categorise the quality of Flag States into those on the white, grey and black lists. If a Flag State is placed on the so-called “blacklist” or “targeted list” derived from this analysis there are major repercussions for the owner who flies that particular flag, a so called black flag. The owner’s ship will be subjected to an increased amount of Port State scrutiny due to the poor standards found on ships of that Flag State. As a minimum, there will be a loss of time and the likelihood of increased detentions. Ships registered to countries on the white and grey lists are said to be flying white and grey flags respectively.

Reassuringly, we see that 86% of the Flag of Convenience ships (ITF list) fly a white flag.

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Figure 12.2‑2 Paris MoU B/W/G listing of Flag Of Convenience ship’s – own work based Paris MoU data & ITF publications

 

  1. [1] Pamborides GP, International shipping law: legislation and enforcement, Springer, 1999.
  1. [2] The American Heritage Dictionary of the English Language, Fourth Edition, Houghton Mifflin Company, 2009.
  1. [3] http://www.ics-shipping.org/docs/default-source/Flag-State-Performance-Table/flag-state-table-201860D178F38DF5.pdf?sfvrsn=2 [accessed October 2018]
  1. [4] International Transport Workers Federation, ITF. Available from: itfglobal.org [accessed August 2018]
  1. [5] Haus, 2010 at Wikipedia, Available from: https://en.wikipedia.org/wiki/Flag_of_convenience [accessed August 2018]

B.6 Classification Societies

TIM CARTER AND KRIS DE BAERE

History

Since ancient times shipping and insurance are closely related. Phoenicians, Greeks and Romans knew the principle of hull insurance. The combined value of ship and cargo became so important that ways of protecting by transferring or sharing risk became necessary.

During the 18th century, merchant shipping was a growing industry and the shipping community started to feel the need for insurance to protect their growing assets. Initially, this was done on a mutual basis at Lloyds’ in London. Later, specialized and private insurance companies were founded.

In the 18th century, all involved in shipping gathered at Edward Lloyds’ coffee house in London to gossip and make deals including sharing the risks and rewards of individual voyages. This became known as “underwriting” after the practice of signing ones name to the bottom of a document pledging to make good a portion of the losses if the ship didn’t make it in return for a portion of the profit.[2]

In the early days, Lloyds (London) gathered an insurance monopoly and ship owners from outside London felt excluded and decided to insure each other against losses, a concept that exists still today in the Protection and Indemnity clubs or P&I clubs. As Kenneth Bilbrough, put it in 1903, ‘The whole principle of Mutual Clubs is, if there is a loss all owners contribute, and if there is a gain all owners get the return’.[3]

However, the underwriters needed a way to evaluate the risk they were insuring and thus had to find a way to assess the quality of the ships.

At that time, an attempt was made to 'classify' the condition of each ship’s hull and equipment on an annual basis. The condition of the hull was divided into 5 classes according to the state of its construction and its continuing soundness (or lack thereof). The purpose of this classification system was not to assess safety, fitness of the construction and its equipment or seaworthiness of the ship. It was to evaluate risk. On this basis, in the 19th century, various “Classification Societies” were founded. 

A classification society is a non-governmental organization in the shipping industry, often referred to as 'Class'.

Classification of Ships today

The practice of dividing vessels into different classifications has changed. Classification Societies today have drawn up elaborate sets of technical requirements on how ships have to be designed and built to meet minimum standards of technical quality. Known as the rules and regulations of the Classification Societies, they are based on the major international regulations, conventions, standards and codes or have been developed at the request of the shipping industry.

Today a ship either meets the relevant class society’s rules or it does not. Therefore it is either 'in' or 'out' of 'class'. Classification societies do not issue statements or certifications that a vessel is 'fit to sail' or 'unfit to sail', merely that the vessel complies with the required codes.

Obviously, for different types of vessels, different sets of (additional and/or specific) regulations have been developed.

The area of interest of the Classification Societies is not limited to a vessel’s construction, but also involves cranes, pumps, engines, firefighting installations and other equipment vital to the ship's function.

As well as providing classification and certification services, the larger societies also conduct research at their own facilities in order to improve the effectiveness of their rules and to investigate the safety of innovations in shipbuilding.

Classification societies are private organisations and not official bodies. In case of an accident with a ship that does not meet the classification standards, the society will not take any responsibility.

Classification Process

Classification Societies set technical rules and confirm that designs and calculations meet these rules. They also survey ships and structures during the process of construction and commissioning.

The Classification Society issues a certificate once a vessel has been built and they have confirmed that it meets the technical requirements, as stipulated in their rules and regulations.  The “Classification Certificate”, is sometimes split into separate certificates such as “Classification Certificate for Hull” and “Classification Certificate for Machinery”.

However, Classification Societies are not only engaged in the designing and building process of ships, Even more importantly, they constantly follow up the condition of vessels and its equipment through periodical inspections (surveys). These may be yearly, bi-yearly up to every five years depending on the specific item inspected. In addition, at regular intervals, a Class surveyor inspects the whole vessel and its equipment to confirm the safe condition of the vessel. As a worst case scenario, the “class” can be suspended, if anomalies exist.  However, as a daily practice, a “condition of Class” or “recommendation” is issued. This gives the ship owner time to rectify the technical problem before further action is taken.

Such a comprehensive inspection takes time and to avoid a vessel having to wait to allow these necessary inspections, and delays in the commercial operation of the vessel, “Class” societies have introduced the “continuous surveys”. 

Continuous surveys spread the required inspections over a period of time, allowing the ship owner to call for a specific survey when this fits into the commercial schedule of the vessel. However this also means that a vessel is in practice almost constantly under inspection.

Whereas the principal involvement of Classification Societies is the classification of ships, which sets standards of quality and reliability during their design, construction and operation, “Class” also carries out statutory inspections for national administrations, to verify the requirements set by international shipping conventions and codes.

All maritime nations require that ships and other marine structures flying their flag meet certain technical standards; in most cases these standards are deemed to be met if the ship has the relevant certificate from a member of the International Association of Classification Societies (IACS) or the European Maritime Safety Agency (EMSA).[4]

Classification Societies may be authorized to inspect ships, oil rigs, submarines, and other marine structures and issue certificates on behalf of the Flag State under whose flag the ships are registered.[5]

International Association of Classification Societies (IACS)[6]

The International Association of Classification Societies (IACS) is an association of ten classification societies and states that it is

 “Dedicated to safe ships and clean seas, IACS makes a unique contribution to maritime safety and regulation through technical support, compliance verification and research and development. More than 90% of the world's cargo carrying tonnage is covered by the classification design, construction and through-life compliance Rules and standards set by the ten Member Societies and one Associate of IACS”.

The IACS has a consultative status with IMO.  It is the only non-governmental organization with observer status that is able to develop and apply rules. These rules have resulted in the International Convention for the Safety of Life at Sea (SOLAS).

The members of IACS are:

Classification societies and their responsibilities

[7]

A Classification Society governs design, construction and maintenance of a ship and provides the ship with all necessary documents throughout its life.

Class societies are private organisations and not official bodies. In case of an accident with a ship that does not meet the classification standards, the class society will not take any responsibility. 

However, the responsibility of the Classification Societies in case of an accident is currently controversial and a matter of legal debate.

Class hopping and the Transfer of Class Agreement

Most ships start their life under one of the reputable high end Class Societies. However, after a few years (15 years on average) maintaining the high standards of a top classification society can become costly and ship owners may consider transferring to a society with less stringent demands.

The cost of complying with the maritime regulations on which classification is based varies hugely depending on the conditions the classification society applies to a vessel. Estimates range from 2,750 USD/day to 7,500 USD/day for a 20 year-old bulk carrier of 30,000 dwt and from 3,100 USD/day to 9,500 USD/day for a 14-year old product tanker of 40,000 dwt[8].

This tactic of continuing to seek classification at the lowest cost finally compromises the safety of the ship and crew. The TOCA or Transfer of Class Agreement existing between IACS members tries to remedy this weakness. 

The objectives of TOCA are double. First, TOCA is designed to allow for traceability of ship’s class and secondly “class-hopping” should be discouraged by requiring the “gaining society” in a class transfer to perform a “Special Survey” or “Intermediate Survey” for ships aged 15 years and over.

In addition, TOCA requires the transfer, to the “gaining society”, of the ship’s classification survey history.

References

  1. International Association of Class Societies, IACS, Classification societies what, why and how? London, IACS, 2006
  2. Fayle, E, A history of Lloyds Register, Macmillan and Company Ltd, http://brittlebooks.library.illinois.edu/brittlebooks_closed/Books2009-09/wrigch0001hisllo/wrigch0001hisllo_ocr.txt [accessed August 2018].
  3. Watson N, 150 Years of the London P&I Club 1866-2016, London P&I Club, https://www.londonpandi.com/documents/150th-history/ [accessed September 2019]
  4. Maritime connector, Classification society & IACS, http://maritime-connector.com/wiki/classification-society/ [accessed September 2019]
  5. International Association of Classification Societies, IACS, iacs.org.uk [accessed August 2018].
  6. Morgan M. Are classification societies demigods in Shipping Industry?, 1 june 2016. Available from: https://www.linkedin.com/pulse/classification-societies-demigods-shipping-industry-meredith-morgan [accessed August 2018].
  7. Cariou P. and Wolff F-C. Do Port State Control inspections influence flag- and class-hopping phenomena in shipping ?. 2010. <hal-00455155>. Available from: https://hal.archives-ouvertes.fr/hal-00455155/document. [accessed August 2018].
  8. Pagonis T, The Chartering handbook. Piraeus: Hellenic Shipbrokers Association; 2009. 85p.

 

[1] International Association of Class Societies, IACS, Classification societies what, why and how? London, IACS, 2006

[2] Fayle, E, A history of Lloyds Register, Macmillan and Company Ltd, http://brittlebooks.library.illinois.edu/brittlebooks_closed/Books2009-09/wrigch0001hisllo/wrigch0001hisllo_ocr.txt [accessed August 2018].

[3] Watson N, 150 Years of the London P&I Club 1866-2016, London P&I Club, https://www.londonpandi.com/documents/150th-history/ [accessed September 2019]

[4] Pagonis T, The Chartering handbook. Piraeus: Hellenic Shipbrokers Association; 2009. 85p.

[5] Maritime connector, Classification society & IACS, http://maritime-connector.com/wiki/classification-society/ [accessed September 2019]

[6] International Association of Classification Societies, IACS, www.iacs.org.uk  [accessed August 2018].

[7] Morgan M. Are classification societies demigods in Shipping Industry?, 1 june 2016. Available from: https://www.linkedin.com/pulse/classification-societies-demigods-shipping-industry-meredith-morgan [accessed August 2018].

[8] Cariou P. and  Wolff F-C. Do Port State Control inspections influence flag- and class-hopping phenomena in shipping ?. 2010. <hal-00455155>. Available from: https://hal.archives-ouvertes.fr/hal-00455155/document. [accessed August 2018].

B.5 Port state Control

TIM CARTER AND KRIS DE BAERE

What is Port State Control?

The responsibility for ensuring that ships comply with the provisions of national and international rules rests upon the owners, masters and the Flag States. Some Flag States fail to fulfil their commitments as specified in agreed international legal instruments and subsequently some ships may sail in an unsafe condition, threatening the lives of the crew as well as the marine environment.

Port State Control is the process by which a nation exercises authority over foreign ships when those ships are in waters subject to its jurisdiction. Nations that are party to certain international conventions are empowered to verify that the ships of other nations, which are operating in their waters, comply with the obligations set out in those conventions[1]. In addition, a nation may enact its own laws, imposing requirements on foreign ships trading in its waters.

More practically speaking, Port State control is a system of harmonized inspection procedures designed to target sub-standard ships with the main objective being their eventual removal from international trading[2].

ILO states: “The practical consequence of the port state control provisions of Title 5, are that ships of all countries, irrespective of ratification, will be subject to inspection in any country that has ratified the Convention, and to possible detention if they do not meet the minimum standards of the Convention.

All ships, whether or not their flag state has signed the ILO convention, can be inspected by port state control inspectors and will be treated likewise.

The “Memorandum of Understanding on Port State Control in Implementing Agreements on Maritime Safety and Protection of the marine Environment “ (MoU 1982) outlines the conditions imposed by the most important international conventions, in a co-ordinated check system[3].

It is important to note that the MoU is an agreement between maritime administrations and not governments. This detaches the memorandum of all political responsibilities and consequences.

Paris Memorandum of Understanding

The origins of port state control in Europe lie in the memorandum of understanding between eight North Sea States signed in The Hague in 1978.

This agreement dealt mainly with the enforcement of shipboard living and working conditions, as required by ILO Convention no. 147. However, just as the Memorandum was about to come into effect, in March 1978, the super tanker, ‘Amoco Cadiz’ grounded off the coast of Brittany, France, resulting in a massive oil spill. This incident caused a strong political and public demand for far more stringent regulations with regard to the safety of shipping.

This pressure resulted in a more comprehensive memorandum that covered

  • Safety of life at sea.
  • Prevention of pollution by ships.
  • Living and working conditions on board ships.

Subsequently, a new, effective instrument known as the Paris Memorandum of Understanding on Port State Control was adopted in January 1982. Initially signed by 14 European countries, it entered into operation on 1 July 1982[4].

Since that date, the Paris Memorandum has been amended several times to accommodate new safety and marine environmental requirements from the IMO, as well as other important developments such as the various EU Directives which address marine safety.

Today, the Paris MoU incorporates 27 participating maritime administrations and covers the waters of the coastal European States and the North Atlantic basin from Canada to Europe. The countries are Belgium, Bulgaria, Canada, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Latvia, Lithuania, Malta, the Netherlands, Norway, Poland, Portugal, Romania, the Russian Federation, Slovenia, Spain, Sweden and the United Kingdom.

B-5-1.png

Figure 12.3 2 Country members of Paris MOU 20186

Other Regional MoUs

Worldwide there are currently nine regional agreements on Port State control, with 126 member states.

These regional agreements are:

  • The Paris Memorandum of Understanding on Port State Control 1982 (Paris MoU) (27 members)
  • The Acuerdo De Viña del Mar Agreement on Port State Control 1992 (Latin American Agreement) (13 members)
  • The Memorandum of Understanding on Port State Control in the Asia-Pacific Region 1993 (Tokyo MoU) (18 members)
  • The Memorandum of Understanding on Port State Control in the Caribbean Region 1996 (Caribbean MoU) (10 members)
  • The Memorandum of Understanding on Port State Control in the Mediterranean Region 1997 (Mediterranean MoU) (9 members)
  • The Memorandum of Understanding on Port State Control For the Indian Ocean Region 1998 (Indian Ocean MoU) (19 members)
  • The Memorandum of Understanding on Port State Control for the West and Central Africa Region 1999 (Abuja MoU) (23 members)
  • The Memorandum of Understanding on Port State Control in the Black Sea Region 2000 (Black Sea MoU) (7 members)
  • The Riyadh MOU 2004 (6 members)
  • Wikipedia Port state Control

Figure 12.3‑3 Regional memoranda of understanding[5].

Signatories to the Paris MOU (blue), Tokyo MOU (red), Indian Ocean MOU (green), Mediterranean MOU (dark green), Acuerdo de Vina del Mar (yellow)[1], Caribbean MOU (olive), Abuja MOU (dark red), Black Sea MOU (cyan) and Riyadh MOU (navy).

The United States Coastguard (USCG), although not a signatory to any of the MoUs, carries out Port State control for compliance with the US Code of Federal Regulations and other International Maritime Conventions.

Port State Control: relevant instruments

The intention of PSC is to ensure compliance with the requirements laid down in the major international maritime conventions. These conventions are called ‘relevant’ instruments in the Memorandum and include the IMO conventions relevant to ship safety and environmental protection, as well as the ILO Maritime Labour Convention 2006.

Basic Principles[6]

Under the Paris MoU, Member States agreed to inspect 25% of the estimated number of individual foreign merchant ships that enter their ports during a 12 month period. This percentage - as well as the relevant instruments - is different in the other regional MoUs. It is very important that these inspections do not cause any economic disadvantage and all possible efforts are made to avoid unnecessary delay of the ship. The inspections are unannounced. In general, the “average” ship will not be inspected within 12 months of a previous inspection in a MoU port, unless there are “clear grounds” for further inspection.

All ships are inspected according to the same guidelines, regardless of which flag they fly.

The Port State Control Officer

A Port State Control Officer (PSCO) carries out Port State control inspections. Also referred to as an Inspector, the PSCO is a properly qualified person, authorized to carry out Port State control inspections in accordance with the relevant MoU, by the Maritime Authority of the Port State by who employs them. . All PSCOs carry an identity card, issued by their maritime authority, and act under its authority.

Various training courses and Seminars for PSCOs are organized by national Maritime Authorities, the European Maritime Safety Agency (EMSA) and the Secretariat of the Paris MoU.

PSCOs board a ship without announcement and start their inspection with a verification of the ship's documents for completeness and validity. Then the PSCO will carry out an expanded inspection of the ship's condition and the required equipment. The Captain will receive an official inspection report consisting of Form A and B. Form A lists the ship's details and the validity of the relevant certificates. Form B shows the list of deficiencies found (if any), with an action code which describes a timeframe for correction of each deficiency. If clear grounds are established that the ship forms a hazard to safety and/or the environment, the PSCO has the right to detain the ship in port until defects have been remedied or even ban the ship from visiting in future (see 12.3.6.3) until the respective deficiencies have been rectified and resurveyed.

The PSC authority will either resurvey using its own inspectors or ask for a survey report from the classification society surveyor (see 12.4) to verify the rectification. In case of a detention or banning the PSC authority has the right to charge for their inspection activities. Any detention or banning has to be reported as soon as possible by the authority to the Flag State, the classification society and the IMO. Data about the inspection and the timeframe for rectification is entered in a computer system used by all members of a regional PSC agreement[7].

Refusal of access or the banning of ships by PSC

There are three reasons for a ship to banned, that is to be refused access to ports in the Paris MoU region:

  • When a ship flying the flag of a State on the black list of the Paris MoU has been detained 3 times within a period of 36 months
  • When a ship flying the flag of a State on the grey list of the Paris MoU has been detained 3 times within a period of 24 months
  • When a ship jumps a detention
  • When a ship does not call at the agreed repair yard following a detention

Other MoUs may have slightly different criteria depending on the agreement.

Inspection Efforts by Paris MoU

The number of individual ships inspected in the Paris MoU region is increasing. In 2017, the total number of inspections was 17,916. The percentage of ships detained rose from 3.42% in 2015 to 3.84% in 2016 and has stabilised in 2017 at 3.82%.

In 2017, the average number of inspections per ship was 1.17 inspections per year and the average number of deficiencies per inspection was 2.3

All member States reached the 25% inspection commitment in the Memorandum. The individual and joint efforts of Paris MoU members are published in the “annual report”[8].

Ship Targeting

Every day PSCOs select a number of ships for a Port State control inspection throughout the region. To facilitate such selection, the central computer database, known as ‘THETIS’ is consulted for data on ships’ particulars and for the reports of previous inspections carried out within the Paris MoU region.

The THETIS information system, hosted by the European Maritime Safety Agency, informs national PSC authorities which ships are due for an inspection. It also provides data on ships’ particulars and reports of previous inspections carried out within the Paris MoU region.

Each ship in the information system will be attributed a ship risk profile (SRP), in accordance with Annex 7 of the Paris MoU text. This SRP will determine the priority for inspection, the interval between its inspections and the scope of the inspection. 
Ships are assigned high, standard or low risk based on generic and historic parameters and calculated according to an agreed protocol.6

A ship’s risk profile is recalculated daily taking into account changes in the more dynamic parameters such as age, the 36 month history and company performance. Recalculation also occurs after every inspection and when the applicable performance tables for flag and recognized organizations are changed[9].

  • High Risk Ships (HRS) are ships that meet criteria to a total value of 5 or more weighting points.
  • Low Risk Ships (LRS) are ships that meet all the criteria of the Low Risk Parameters and have had at least one inspection in the previous 36 months.
  • Standard Risk Ships (SRS) are ships that are neither HRS nor LRS.

Every selected ship has to pass at least an initial inspection. This includes a check of the relevant certification and documentation of the ship and its crew, as well as a check of the overall condition of the ship including the bridge, the accommodation, the main deck and the engine room. A “paper check” alone is not sufficient.

If “clear grounds” are assessed, as defined in the Paris MoU, a more detailed inspection will be carried out. Further assessments are then carried out at intervals dependant on the ship’s risk profile.

Deficiencies, Detentions and Rectifications[10]

The PSCO will exercise professional judgment in determining whether to detain the ship until the deficiencies are rectified or to allow it to sail with certain deficiencies without unreasonable danger to safety, health, or the environment, having regard to the particular circumstances of the intended voyage.

During inspection the PSCO will further assess whether the ship and/or crew is able to:

  • navigate safely throughout the forthcoming voyage;
  • safely handle, carry and monitor the condition of the cargo throughout the forthcoming voyage;
  • operate the engine room safely throughout the forthcoming voyage;
  • maintain proper propulsion and steering throughout the forthcoming voyage;
  • fight fires effectively in any part of the ship if necessary during the forthcoming voyage;
  • abandon ship speedily and safely and effect rescue if necessary during the forthcoming voyage;
  • prevent pollution of the environment throughout the forthcoming voyage;
  • maintain adequate stability throughout the forthcoming voyage;
  • maintain adequate watertight integrity throughout the forthcoming voyage;
  • communicate in distress situations if necessary during the forthcoming voyage;
  • provide safe and healthy conditions on board throughout the forthcoming voyage;
  • provide the maximum of information in case of accident (as provided by the voyage data recorder).

If the result of any of these assessments is negative, taking into account all deficiencies found, the ship will be detained. A combination of deficiencies of a less serious nature may also warrant the detention of the ship.

For further details on the detention of ships and the causal deficiencies, please consult the Paris MOU website and more exactly the document “Guidance on Detention and Action Taken”[11]

Does the Port State Control System work?

The Paris MoU annual reports demonstrate a steady decrease in the number of deficiencies and detentions found over recent years.  In 2017, the detention rate for combination carriers, commercial yachts, general cargo & multi-purpose ships and heavy lift ships was above average. The other ship types have lower detention rates.  For more details, the annual MoU reports can be consulted.[12]   

B-5-3.pngB-5-4.png

Figure 12.3‑11 Paris MoU infographics 19

Major Deficiencies 2017

B-5-6.png

Figure 12.3‑12 Detention rate per ship type 2015- 2017 12

B-5-7.png

Figure 12.3‑13 Deficiencies per category. 12

 

The “medical” inspection by PSC officers 

The “medical” inspection of ships by the PSCO is based on 2 legal instruments, the Memorandum of Understanding (MoU) and the ILO convention No 147[13].

Besides the improvement of the safety of life at sea and the prevention of the pollution by ships, the improvement of the working and living conditions on board ships is mentioned as a third objective.

The ILO convention is more specific and prescribes a set of standards relating to the minimum age and the medical examination of seafarers, the prevention of accidents, social security, shipboard conditions of employment and living arrangements to be observed in merchant shipping registered under any signatory flag state. ILO also includes the officer’s STCW certificates of competence.

Any Port State Control inspection starts with the verification of the documents on board the ship. These documents include, amongst others, the certificates of medical fitness of the crew, vaccination lists, de-ratting certificate and the certificate of yearly inspection of the medicine chest and medical equipment.

As part of the inspection of the ship, special attention is given to the condition and use of the shipboard hospital, state and settings of the refrigerators and deep freezers, the hygienic condition of the galley and the condition of the sanitary provisions.

The PCSO thoroughly checks all deficiencies regarding conditions on board and takes action as deemed appropriate. If necessary, the ship will be detained until appropriate corrective action is taken.

The introduction of a “maritime labour certificate” (MLC) enhances the inspection of ships. Issued by the Flag State, or its recognised organisation, this certificate verifies that labour conditions on board comply with national legislation. It will have a validity of 5 years and identifies the “ship-owner” as responsible to satisfy the obligations of the Convention.

A second certificate, a declaration of maritime labour compliance, covers the national law and the owners plan for implementing 14 areas of standards regarding

  • minimum age
  • medical certification
  • qualifications of seafarers
  • seafarer employment agreements
  • use of a recruitment and placement services
  • hours of work or rest
  • manning levels
  • accommodation
  • on board recreational facilities
  • food and catering
  • health and safety and accident prevention
  • on board medical care
  • on-board complaint procedures
  • the payment of wages.

Port State Control is central to verifying compliance with the 2006 MLC. The possession of the Maritime Labour Certificate and the Declaration of Maritime Labour Compliance will be prima facie evidence of such compliance.

A more detailed inspection is conducted if there are “clear grounds” or “reasonable grounds” for suspecting that the ship has been re-flagged to avoid compliance or there are complaints alleging non-conformance. Non-conformities with the relevant international conventions may result in detention.

References

1. International Chamber of Shipping, ICS, Key facts, overview of international shipping industry. Available from: http://www.marisec.org/shippingfacts [accessed August 2018].

2. European Maritime safety Agency, EMSA, The world merchant fleet in 2016, Statistics from Equasis. Available from: http://www.emsa.europa.eu/ [accessed August 2018]

3. European Maritime safety Agency, EMSA, The world merchant fleet in 2013, Statistics from Equasis. Available from: http://www.emsa.europa.eu/ [accessed August 2018]

4. United Nations Conference on Trade and Development, UNCTAD, review of maritime transport 2011.  Available from: http://unctad.org/en/docs/rmt2011_en.pdf [accessed May 2012].

5. United Nations Convention on the Law of the Sea III, UNCLOS III, UN, London, 1973, art 91, 92, 94 and 97. Available from: http://www.un.org/depts/los/convention_agreements/texts/unclos/unclos_e.pdf [accessed August 2018]

6. Paris Memorandum of Understanding, Paris MoU. Available from: www.parisMoU.org [accessed August 2018]

7. Greenaway C, Port State Control – A guide for members, London, Thomas Miller and Co, 1998.

8. Somers E, Inleiding tot het internationaal zeerecht, Universiteit Antwerpen, 2004.

9. Oya Özçayı, Z, The impact of Caspian oil and gas development on Turkey and challenges facing the Turkish straits, The Marmara Hotel, Istanbul, 2001.

10. Port State Control. Available from: https://en.wikipedia.org/wiki/Port_State_Control , [Accessed August 2018].

11. UK P&I Club. Available from:http://www.ukpandi.com/  [Accessed August 2018].

12. Paris Memorandum of Understanding, Paris MoU, Annual report 2017.  Available from: https://www.parisMoU.org/2017-paris-MoU-annual-report-%E2%80%9Csafeguarding-responsible-and-sustainable-shipping%E2%80%9D  [Accessed August 2018]

13. Det Norske Veritas, DNV, The Paris MoU New Inspection Regime, Hovik, 2010.

14. Paris Memorandum of Understanding, Paris MoU, Explanatory note – “White”, “Grey” and “Black List”. Available from:

https://www.parisMoU.org/system/files/Explanatory%20Notes%20Annual_0.pdf [Accessed August 2018]

15.  Mikhail Perepelkin, Sabine Knapp, German Perepelkin, Michiel de Pooter, A method to measure flag performance for the shipping industry, 2009.

16. Pietro del Rosso,  Port State Control, unpublished course, I.I.S.S. “Amerigo Vespucci” – Molfetta – Italy & Mediterranean Training Center Ltd, SD.

17. Paris Memorandum of Understanding, Paris MoU.   Available from: https://www.parisMoU.org/sites/default/files/Information%20on%20detention%20and%20action%20taken.pdf [Accessed August 2018]

18. Paris Memorandum of Understanding, Paris MoU.   Available from: https://www.parisMoU.org/sites/default/files/Information%20on%20detention%20and%20action%20taken.pdf [Accessed August 2018]

19. Paris Memorandum of Understanding, Paris MoU. Available from:  https://www.parismou.org/infographic-paris-mou-annual-2017 [Accessed August 2018]

20. International Labor Organization, ILO. Available from: www.ilo.org [Accessed August 2018].

21. Ludwiczak J, Marine Labor Convention INTERTANKO North American Panel Meeting, Stamford CT - 20 March 2006.

22. World Health Organization, WHO. Available from: www.who.int [Accessed August 2018].

23. STCW convention, IMO. Available from: www.IMO.org [Accessed August 2018]

24. International Labor Organisation, ILO. Available from: www.ilo.org [Accessed August 2018)

25. Paris Memorandum of Understanding, Paris MoU. Available from:  https://www.parismou.org/inspections-risk/library-faq/banning [Accessed August 2018]

 

[1] Greenaway C, Port State Control – A guide for members, London, Thomas Miller and Co, 1998.

[2] European Maritime safety Agency, EMSA, The world merchant fleet in 2016, Statistics from Equasis. Available from: http://www.emsa.europa.eu/ [accessed August 2018]

[3] Somers E, Inleiding tot het internationaal zeerecht, Universiteit Antwerpen, 2004

[4] Paris Memorandum of Understanding, Paris MoU. Available from: www.parisMoU.org [accessed August 2018]

[5] Port State Control. Available from: https://en.wikipedia.org/wiki/Port_State_Control , [Accessed August 2018].

[6] Paris Memorandum of Understanding, Paris MoU. Available from: www.parisMoU.org [accessed August 2018]

[7] UK P&I Club. Available from:http://www.ukpandi.com/  [Accessed August 2018].

[8] Paris Memorandum of Understanding, Paris MoU, Annual report 2017.  Available from: https://www.parisMoU.org/2017-paris-MoU-annual-report-%E2%80%9Csafeguarding-responsible-and-sustainable-shipping%E2%80%9D  [Accessed August 2018]

[9] United Nations Conference on Trade and Development, UNCTAD, review of maritime transport 2011.  Available from: http://unctad.org/en/docs/rmt2011_en.pdf [accessed May 2012].

[10] Paris Memorandum of Understanding, Paris MoU.   Available from: https://www.parisMoU.org/sites/default/files/Information%20on%20detention%20and%20action%20taken.pdf [Accessed August 2018]

[11] Paris Memorandum of Understanding, Paris MoU.   Available from: https://www.parisMoU.org/sites/default/files/Information%20on%20detention%20and%20action%20taken.pdf [Accessed August 2018]

[12] Paris Memorandum of Understanding, Paris MoU, Annual report 2017.  Available from: https://www.parisMoU.org/2017-paris-MoU-annual-report-%E2%80%9Csafeguarding-responsible-and-sustainable-shipping%E2%80%9D  [Accessed August 2018]

[13] Merchant Shipping (Minimum Standards) Convention, 1976 (No. 147), revised by the MLC 2006.

B.7 International collaboration in Maritime Health

TIM CARTER AND KRIS DE BAERE

Introduction 

Common interest groups in the maritime sector find benefits in collaborating across international boundaries. Representative organisations usually bring such interests together and participate in discussions with international agencies and with maritime authorities. The most clearly formalised of these arrangements is the tripartite basis for the International Labour Organisation ILO, where, alongside governmental agencies, employers and employees are represented by their respective international organisations (see below) and are commonly termed ‘the social partners’.

The social partners are just one example of a wide range of interest groups who are in contact with their constituents, around the world and who play an important part in improving the standards and efficiency of maritime businesses and in safeguarding the health, safety and welfare of those who work in them. There are hundreds of maritime organisations of this sort. Those directly relevant to maritime health are described here. Others, which have an interface with maritime health, are listed.

In most cases, international collaborative bodies are federations of national organisations that represent their members’ interests at the national level. A few exist solely as international associations with direct membership rather than a federated approach.

Employers - The International Chamber of Shipping (ICS)

The ICS, that also operates as the International Shipping Federation when acting on seafarer employment related topics, is a federation of the national shipping employers’ associations worldwide.[1] Its members also include organisations that represent specific sectors of the industry, such as cruise liners and tankers. It has a formal role at ILO as one of the social partners and is active in discussions at the International Maritime Organisation (IMO) and other international forums. It lobbies on behalf of its members’ but does so with a view to ensuring that their reasonable concerns are met, without compromising and, where possible, by improving standards of shipping for the benefits of users, employees and the environment. It also, as the Federation, negotiates on behalf of employers about the wages of seafarers.

 Specialist employer organisations that play an active role on health matters include:

  • Intermanager – ship management companies on the provision of medical care and medical aspects of crewing in managed ships[2]
  • Intertanko – independent tanker operators[3]
  • OCIMF – Oil Companies International Marine Forum.[4] Intertanko and OCIMF are both active on safety and health aspects of bulk liquid cargo transport.
  • CLIA – Cruise Lines Industry Association[5] on health and medical care for passengers and crew on board cruise ships.

Seafarers – The International Transport Federation (ITF) 

ITF is a federation of affiliated national trade unions.[6] Its representative role extends beyond seafarers to include dockworkers and those employed in other modes of transport such as road, rail and air. For seafarers it acts as their representative as a social partner at ILO and is active at IMO and in other international forums. It also plays a major role in giving advice to member unions and runs international inspection and advisory services to ensure that employers, port authorities and others do not compromise the rights or employment contracts of seafarers. It has campaigned over the years on subjects such as the abuse to seafarers and lack of union recognition on ships flagged to open registries, the so called flags of convenience. It has also been running campaigns on health and welfare issues, such as HIV/AIDs. In this particular case it has campaigned for  both prevention and about minimising the stigma attached to the condition.

ITF is also host to and provides the funding for the independent charity ITF Seafarers’ Trust.[7] This charity provides funding and other forms of support for initiatives aimed at improving the health and welfare of seafarers worldwide.

Insurers 

In past centuries the shipping industry has played a major role in the development of modern insurance as a way of pooling risk across a number of ship owners. This in turn led to the industry developing methods for classifying the risks of particular ship types, cargoes and liabilities. Marine insurance still has three main branches:

  • Hull and machinery insurance, for the ship itself and risks of loss or damage
  • Cargo insurance, for the cargo on board
  • Liability for crew and other third party risks. This insurance covers the health care cost of seafarers and so is directly relevant to maritime health.

P&I (Protection and Indemnity) Clubs 

Introduction

A P&I Club is an independent, non-profit making, mutual insurance association, providing cover for its ship owner and charterer members against third party liabilities. The fundamental difference between mutual and other types of insurance company is that a mutual is not trying to make a profit, has no shareholders and exists purely for the benefit of the insured ship owner. Mutual insurance is a collective self-insurance that operates at cost.

Under the idea of mutualism, various ship owners pool their resources together in order to meet losses suffered by each individual ship owner who is a member of the same mutual insurance.

The basic principle is that the contributions/mutual premium paid by the ship owners in relation to any one year should be sufficient to meet all the claims, reinsurance and administrative expenses of the P&I-Club for that year. Policy years run from 20 February to 20 February, rather than the calendar year, as that was the traditional date for the opening of the commercial shipping lanes in the Baltic Sea.

A ship owner / shipping company insured with a P&I-Club is called a ‘Member’ and the premium paid by a Member is a ‘Call’.  If there is a shortfall because claims are high, the Members may pay a pro rata ‘additional call’,  also called ‘back call’. If there is a surplus, a return may be made to the Membership, or the surplus transferred to reserve to meet losses on other years. The funds of the mutual are invested and the investment return is used to benefit the Members. The Members are both the insurer and the insured. Note that seafarers are ‘third parties’ in this relationship and any costs that arise from their medical care are liabilities that the members of the club are obliged to pay for.

The term ‘Club’ is used because ship owners decided to join forces and form a well-defined group that would pool liability costs. Each club is controlled by its members through a board of directors or a committee, elected from the membership.  A management company, often originating from a law firm, carries out the day to day management of the Club, handling of the claims, investment and administration etc.

 

History of P&I Clubs

In the mid-18th century, ship-owners could insure their vessels with two hull insurance companies or Lloyds.  At that time, there was no perceived need for liability insurance as ship-owners' exposure to third party claims was negligible. However, legal developments during the latter half of the 19th century resulted in a significant increase in ship-owners liabilities and the need for additional and specific insurance was generally acknowledged. The first liability insurance club was founded in 1855 as an offshoot of a mutual hull insurance club, and others quickly followed. The clubs started their activities by insuring against liability for collisions and damage to fixed objects, such as docks, which were excluded from the hull cover. This cover was called ‘protection’ insurance. The introduction of statutory liability for loss of life and injury to passengers gave rise to a new liability that was covered by the establishment of mutual ‘indemnity’ arrangements. At that time, liability for cargo could still be avoided by appropriate exemption clauses in contracts of carriage. However, further legal developments in the late 19th century resulted in ship-owners facing cargo claims, notwithstanding the terms of the contracts of carriage, and in 1874 the ‘Indemnity Clubs’ started to insure liabilities for loss of or damage to cargo. Fusion of the functions of the ‘Protection’ and ‘Indemnity’ mutual associations gave rise to the ‘Protection & Indemnity Clubs’, which have continued to adapt their cover to the developing requirements of the shipping industry. 

The P&I Clubs today

P&I Clubs cover a wide range of liabilities including:

  • Personal injury to, illness or death of crew, passengers and others on board,
  • Cargo loss and damage,
  • Oil pollution,
  • Wreck removal
  • Collision damage
  • Dock damage.

Ship owners usually have to pay out first and then reclaim from their Club. There is normally an agreed ‘deductible’, that is the ship operator agrees to pay a fixed sum themselves, with the Club meeting costs in excess of this.

Cover is available only for those risks that are regularly and commonly encountered by the majority of the membership since these are the risks that each Member has agreed to share. Liability in respect of these risks is normally unavoidable under the provisions of international or national laws or commercial risks that Members are unable to avoid contractually. Members are also expected and required to make full use of whatever legal rights they may have to exclude or limit their liability in order to protect the common funds of the Club. In other words, there is a duty to mitigate loss, including medical costs and expenses for crew, passengers and others. With regard to people, the cover responds to a complicated web of legislative, contractual and tort-based liabilities in which the Member requires the assistance of the Club to manage events that are unfolding at sea, in ports, clinics and hospitals around the world. Further information on liability is available in Ch xxx.

Clubs also provide a wide range of services to their members on claims, legal issues and loss prevention, and often play a leading role in the management of casualties. The Clubs impose standards of seaworthiness on the vessels insured and require that they fully comply with the requirements of their flag state. Many specify their own standards for medical fitness to work at sea, with the aim of reducing the crew liabilities arising from illness on board. Further information is available in Ch xxx. The Clubs have their own inspectors to confirm compliance with these requirements. They also have worldwide networks of correspondents who deal with local aspects of claim handling.

The International Group of P&I Clubs

Approximately 90% of the world's ocean-going merchant tonnage is covered by the 13 P&I Clubs and their affiliates who make up the International Group of P&I Clubs.[8]

These 13 Clubs are based variously in the United Kingdom, Scandinavia, Bermuda, Luxembourg, the United States and Japan. There are, in addition, a number of small independent Clubs, as well as some P&I facilities in the commercial market. The International Group of P&I Clubs is a ‘Club of Clubs’ which exists to

·      provide a forum for discussion of legal and technical issues affecting the member Clubs

·      provide a mutual reinsurance scheme for the member Clubs through the International Group Pool and its associated Excess Loss Reinsurance contracts,

·      monitor the transfer of business between member Clubs under the terms of the International Group Agreement.

It also acts from time to time as a lobbying organization in relation to the development of maritime law and practice internationally.

The 13 members of the International Group of P&I Clubs are:

1.     American Club

2.     Assuranceforeningen Gard  with its subsidiary Gard P&I (Bermuda) Ltd.

3.     Assuranceforeningen Skuld with its subsidiary Skuld Mutual Protection and Indemnity Association (Bermuda) Ltd.

4.     The Britannia Steam Ship Insurance Association Limited

5.     The Japan Ship Owners' Mutual Protection & Indemnity Association

6.     The London Steam-Ship Owners' Mutual Insurance Association Limited

7.     The North of England Protecting & Indemnity Association Limited

8.     The Shipowners' Mutual Protection & Indemnity Association (Luxembourg)

9.     The Standard Steamship Owners’ Protection & Indemnity Association (Bermuda) Limited with its subsidiaries :

a.     The Standard Steamship Owners’ Protection and Indemnity Association (Europe) Ltd.,

b.     The Standard Steamship Owners’ Protection and Indemnity Association (London) Ltd.

c.     The Standard Steamship Owners’ Protection and Indemnity Association (Asia) Ltd. A reinsured subsidiary association

10.  The Steamship Mutual Underwriting Association (Bermuda) Limited with its subsidiary The Steamship Mutual Underwriting Association Ltd.

11.  The Swedish Club

12.  United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited with its subsidiary  United Kingdom Mutual Steam Ship Assurance Association (Europe) Ltd.

13. West P&I Club

 

What is covered?

A P&I Club will compensate a Member for the costs the insured has incurred, such as:

  • Medical costs, hospitalization, incidental expenses such as food and accommodation and other costs related to injury to or illness of a seafarer.
  • Costs and expenses for the repatriation of a seafarer and his personal belongings.
  • Costs for a funeral and other costs related to the death of a seafarer or the costs and expenses of the repatriation of the remains (coffin/urn) and personal effects.
  • Costs and expenses for sending a substitute to replace the repatriated or dead seafarer or a seafarer who has to be left behind for ongoing care.
  • The payment of compensation or damages related to the injury, illness or death of a seafarer.
  • The payment of wages of an injured, ill seafaerer.
  • Costs related to the loss or damage to personal effects of a seafarer.

Settlement of such claims can sometimes be slow and involve legal disputes. This can have adverse effects on the rehabilitation and return to work of the seafarer, leading to hardship for the crewmember and their dependents.

Professional Bodies

A wide range of professionals work with the maritime sector and many of these have their own organisations to represent them in international forums, as well as often playing a part in training, professional development and networking. Among those professions specific to the sector examples include:

  • International Federation of Ship Masters Association[9]
  • International Maritime Pilots Association[10]
  • The Institute of Marine Engineering, Science and Technology[11]
  • The Nautical Institute[12]

Other organisations represent professions, some of whose members work in the maritime sector, for example, the International Maritime Health Association (IMHA).

International Maritime Health Association (IMHA)

IMHA is a membership organisation for health professionals, mainly medical doctors.[13] It actively works with other international organisations to improve the standards and consistency of maritime health practice. Like most other professional associations it also plays an important role in providing support for its members and opportunities to network and exchange information on best practice.  Again, like most other professional groups it represents a diversity of interests, from academics and government, industry and trade union advisers to commercial maritime health clinic managers and staff.

International Maritime Health Foundation (IMHF)

The IMHF is a non-profit scientific foundation that was registered in Poland in 2018 (see https://www.imhf.pl ). Its primary purpose is to disseminate scientific knowledge on maritime health and related fields. The principle means for doing so is by supporting the scientific journal International Maritime Health in collaboration with partner organisations. The Foundation provides oversight and financing for the journal and it also hosts an Expert Panel of maritime health professionals. With the help of the panel the Foundation organises expert workshops on current issues in maritime health. It also seeks to raise awareness about good practice and to encourage scientific investigations on maritime health risk and their prevention.

Seafarer Welfare Organisations 

The International Seafarers’ Welfare and Assistance Network (ISWAN) acts as a forum for a range of bodies concerned with the welfare of seafarers: spiritual, mental, physical, mental and economic.[14] Members include ship owner and trade union federations, those providing seafarer centres in ports and the various mission bodies that have been the pioneers of welfare provision since the early 19th century. The latter also have their own representative body, the International Maritime Christian Association (ICMA).[15]

ISWAN undertakes regional welfare development projects, assists with sporting and fitness related activities for seafarers and runs a 24 hour multilingual helpline that can advise distressed seafarers on how best to seek help for their problems. In recent years it has played an active part in managing programmes to help seafarers and others  with the humanitarian aspects of piracy. Funding for the work of ISWAN comes from several charitable trusts and to a smaller extent from subscriptions and donations from other maritime organisations. Further information on seafarer welfare and organisations active in this area can be found in Ch xxx.

[1] International Chamber of Shipping www.ics-shipping.org

[2] Intermanager www.intermanager.org

[3] Intertanko www.intertanko.com

[4] Oil Companies International Marine Forum www.ocimf.com

[5] Cruise Line Industries Association www.cruising.org

[6] International Transport Federation www.itfglobal.org

[7] ITF Seafarers Trust http://www.seafarerstrust.org

[8] International Group of P&I Clubs, IGP&I.   http://www.igpandi.org

[9] International Federation of Ship Masters Association www.ifsma.org

[10] International Maritime Pilots Association www.impahq.org

[11] The Institute of Marine Engineering, Science and Technology www.imarest.org

[12] The Nautical Institute www.nautinst.org

[13] International Maritime Health Association www.imha.net

[14] International Seafarers Welfare and Assistance Network http://seafarerswelfare.org

[15] International Christian Maritime Association www.icma.as