CLUB CALENDAR - Swedish Club · PDF fileClub Calendar 40 The Swedish Club ... ied in the Digest of Justinian, ... three documents per bill of lading this would amount to a staggering

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CLUB CALENDAR

November 28th 2006Board Meeting in Paris

November 30th 2006Winter lunch for members and associates in Göteborg

November 30th 2006Christmas Dinner for members and associates on Donsö

December 14th 2006Christmas Dinner for members and associates in Greece

March 22nd 2007Board Meeting in New York

May 7th – 11th 2007Marine Insurance Course in Göteborg

June 13th 2007Board Meeting in Göteborg

June 14th 2007Annual General Meeting in Göteborg

No. 2 - 2006, November

Member Questionnaire 2006

UNSAFE PORTSUNSAFE PORTSon account of iceon account of ice

Page 20

WHAT’S KILLINGturbochargers?

Page 26

NEW INSURANCEfor newbuildings

Page 22

Page 36

New Board MembersPage 14

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The Swedish Club is a mutual ma ri ne in su ran ce

com pa ny, owned and con trol led by its mem-

bers. The Club writes Hull & Mach i ne ry, War risks,

Pro tec tion & In dem ni ty, Loss of Hire, Freight

De mur ra ge & De fen ce in su ran ce and any

additional in su ran ce required by shi pow ners.

Leading article “But ships are but boards, sailors but men…” 3 General Average A wave of change for container carriers 4 P&I Containers overboard 6 Odessa – warning 8 The Swedish Club Academy Marine Insurance Course 2006 9 Annual General Meeting International Group well-positioned to face future challenges 10 Male and female leadership: a question of emphasis 12 New board member – Dockwise: charting a course for a heavyweight champion 14 New board member – Contribution to Stena’s pursuit of excellence 14 Crew 120 days alert on Filipino crew claims 16 Club Information Basic Facts 17 New Members 17 Club Correspondent WK Webster Group 18 Navigational Hazards Unsafe ports on account of ice 20 Insurance New insurance for newbuildings 22 Loss Prevention What’s killing turbochargers? 26 Club Information News from Asia 25 News from Piraeus 27 The Swedish Ship Götheborg Now in China 28 Mythological decorations with much symbolism 30 MRM ST Education & Training adopts MRM as the cornerstone of its corporate culture 32 Resource Management steps ashore 32 Wallem Maritime Training Centre Qingdao receives MRM licence 32 Club Information Integration of Göteborg Team I and II 33 FD&D E-mails – a legal update 34 The Scandinavian Shipping Gazette Review 35 Club Information Member Questionnaire 2006 36 Out and About 38 Staff News 39 Public Holidays 39 Club Calendar 40

ContentThe Swedish Club Letter 2–2006

www.swedishclub.com

Head Office Sweden

Gullbergs Strandgata 6, P.O. Box 171SE-401 22 Göteborg, SwedenTel +46 31 638 400Fax +46 31 156 711E-mail [email protected] tel +46 31 151 328

Hong Kong

Suite 6306, Central Plaza18 Harbour Road, Wanchai, Hong KongTel +852 2598 6238Fax +852 2845 9203E-mail [email protected] tel +852 2598 6464

Greece

5-7, Agiou NicolaouGR-185 37 Piraeus, GreeceTel +30 210 452 2397Fax +30 210 452 5957E-mail [email protected] tel +30 6944 530 856

Japan

Suzuyo Hamamatsucho Building 5F.2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, JapanTel +81 3 5442 5466 (24 hour tel)Fax +81 3 5442 5922E-mail [email protected]

3

Dear Friends,

During the second half of the 19th century, commerce in Sweden prospered and many shipowners established freight companies, employing steamships in parallel with their more traditional sail-ing ships. Efforts were made to admit steamships to the same in-surance companies as the sailing ships. It was soon realised, how-ever, that it was too diffi cult to combine these two branches of hull insurance and the insurance companies refrained from covering steamships, which frequently suffered severe engine damage.

The idea of an independent mutual hull insurance association developed against this background and this idea came to fruition almost 135 years ago. The name of the association was Sveriges Ång-fartygs Assurans Förening.

Our predecessors were proactive and visionary. They knew that they must take their fate in their own hands to avoid loss and avoid being forced to accept solutions dictated by others. Little did they know that their creation would last for more than a century. A mu-tual P&I association was established in 1910, managed by the same organisation and the fi rst non-Swedish risks were accepted in the mid-1970s. The Swedish Club owes its survival today to the contin-ued internationalisation of its business, where the domestic market is dwarfed by the inroads made overseas.

As you are all aware, Skuld approached us earlier this year with a proposal to integrate the activities of the two clubs. We had a duty to our members to explore that proposal and to consider our options. After a long and sometimes intense process, the Board of The Swedish Club decided at its meeting in Paris on November 28th to draw to a close the discussions with Skuld. The Board con-

cluded that the Club should continue to operate as an independent provider of quality Hull and P&I services. Consequently, we will continue to develop as the preferred choice of fastidious owners. In doing so, we will encourage you, our members, to invest in our future as a sovereign source of marine insurance covers.

In an ever changing environment in which ships’ values increase, responsibilities are shifted to shipowners and the demand for service never halts, it is more important than ever to prepare for the future. The requirements of legislators for higher solvency and the signifi -cance of evaluations made by rating institutes are but two reasons, which make us look to the future with added focus.

Finally, please accept our good wishes for the festive season and for a peaceful and prosperous 2007!

Yours, as always,

The Swedish Club Letter is published twice a

year and dist ri bu ted free of char ge to vessels

insured with us and to our mem bers.

The Swedish Club Letter is an edi to ri al ly in de -

pen dent new slet ter and opi ni ons ex pres sed by

external contri bu tors are not ne ces sa ri ly those of

The Swe dish Club. Articles herein are not in-

tended to provide legal advice and the Club does

not ac cept re sponsi bi li ty for errors or omis si ons

or their con se quen c es. For further information

regarding any issue raised herein, please contact

our head office in Göteborg.

Editorial Advisory Board Susanne Blomstrand, Birgitta Hed,

Claes Lindh, Lars Malm, Frans Malm ros, Tord Nilsson, Peter Stålberg

Production co-ordinator Susanne Blomstrand

PR-consultant TRS Public Relations Ltd.

Layout Eliasson Information, Göteborg

Print PR Offset, Mölndal

© The Swedish Club. Articles or ex tracts may be quoted provided that The Swe dish Club is cre di ted as the source.

0611PR5500B

Leading ArticleThe Swedish Club Letter 2–2006

“But ships are but boards, sailors but men…And then there is the peril of waters, winds and rocks.”

Shylock in ‘The Merchant of Venice’

COVER PHOTO: REINIER JANSEN Partner Re, Zürich

Frans Malmros Managing Director

4

■■ The principles embodied in general av-erage (GA) for the carriage of goods by the sea have existed from time immemorial. The origin of GA is said to date from Rhodian law of approximately 800BC and was later embod-ied in the Digest of Justinian, which governed mercantile transactions in the Mediterranean and Adriatic seas. The law of general average does not depend upon any particular written instrument but on a general rule of maritime law which becomes operative on the existence of peril.

Despite the histori-cal provenance of GA its declaration often comes as a shock to parties involved in a maritime incident. In recent years the surprise has been somewhat contained by the inclusion of a general aver-age absorption clause in most hull covers. The general average can be recovered in full from hull underwriters, up to a pre-agreed amount, without the need to approach cargo interests for their contribution. More recently the Baltic and International Marine Council (BIMCO) has endeavoured to introduce an average bond wording into bills of lading to reduce time re-quired for GA security collection.

Some form of securityIn order to ensure payment by interests in-volved in the common maritime adventure such as cargo, containers, freight at risk and time-charterers’ bunkers on board, shipown-ers need to obtain some form of security. This is usually in the form of an unlimited guaran-tee from insurers and a ‘bond’ (purely a paper document and not, for instance, a ‘perform-ance’ bond) from cargo receivers together with the commercial invoices involved. The wordings of these documents have been in ex-istence for some time and generally agreed in the distant past by committees from Lloyd’s, shipowning interests and adjusters and are acceptable internationally. Cash deposits are collected where cargo is uninsured or some doubts may be raised as to the solvency of the insurer concerned. Shipowners only have what is known as a possessory lien over the cargo so

4

The Swedish Club Letter 2–2006 General Average

such security must be lodged before release to receivers which could cause further delay and disruption.

Large general average absorption clauses

Bulk cargoes do not generally cause too many problems with regard to the collection of gen-eral average security, as there is usually only a handful of cargo interests involved. The prob-lem is really one for the container industry. Container operators will usually have large

general average absorp-tion clauses in their hull policies with some running into millions of dollars. Owners in major casualties (such

as the recent ‘Hyundai Fortune’) may, how-ever, fi nd that the absorption covers are not suffi cient and may not want to claim under them. Nevertheless there is no real option but to undertake a full-scale general average secu-rity collection.

In practical terms this means that contact must be made with every insurer and receiver of all cargo and every container, noting its size and whether refrigerated, on board the vessel. The appointed average adjuster must ensure that full security has been lodged by every in-terest involved.

Collection is a mammoth taskWith the larger classes of container carriers now being built this could involve in excess of 8,000 containers and actual bills of lading holders – if not more. With a minimum of three documents per bill of lading this would amount to a staggering 24,000 pieces of pa-per. Collection is a mammoth task even in this electronic age. In cases involving salvage, especially Lloyd’s Open Form, it is likely that the appointed adjusters will also be collecting salvage security from cargo interests as well as general average security.

Although general average security is given, as per Rule D of the York/Antwerp Rules, rights as to contribution are not effected. A payment may still be avoided in the case of agreed or proven unseaworthiness of the ves-

Mr Keith JonesFellow of the Association

of Average Adjusters

Benfi eld Corporate Risk, London

sel or breach in the contracts of carriage. Any major casualty is likely to be a challenge for shipowners and cargo interests alike and more so in cases involving multi-bill of lading ship-ments. Cargo interests will want their cargoes delivered as soon as possible in order to meet market deadlines and maintain cash fl ow. The carrier may come under considerable pressure from shippers who hold the threat of moving their (longstanding) custom elsewhere.

Effects can be minimised in the fi rst in-stance if shipowners ensure that they have adequate limits in their absorption clauses. Many hull policies are renewed year on year without any thought to review or increase such amounts.

What would happen…?From a chartering perspective it is essential that there is more discussion as to what would happen in the event of a casualty with regard to general average. The owner or operator has sole discretion as to whether he will utilise the absorption cover or whether he will require general average security to be collected. Nevertheless it is prudent to ask the owner or operator whether there is a general average absorption clause in the hull cover, whether a policy deductible is applicable and what these amounts are.

Operators now sometimes have to rely on feeder vessels for fi nal delivery given the ever in-creasing size of container ships. Whilst the original carrier may have suffi cient general aver-age contingencies, the feeder operator may not – small though this part of the car-riage may be in comparison to the overall voyage. Op-erators and slot charterers also need to consider the implications for car-goes carried by feeder vessels. For instance, they should consider introduction of some form of general av-

GENERALv r g – a wave of chan

5

The Swedish Club Letter 2–2006 General Average

5

erage absorption cover for cargoes shipped un-der their bills of lading on another vessel. This could also apply to container vessels that are shared by a number of slot charterers. Whilst this is an extra cost it can be argued that the savings from avoiding a potentially angry cli-ent base and possible loss to another carrier would far outweigh any premium paid.

Shipowners should also expect input from their appointed average adjusters and their underwriters. This requires a move from the traditional approach to security collection. It takes staunch resolve and accurate fi gures for an adjuster to decide in the early stages of a casualty that security could only be collected from cargo above a certain value. Such action would, however, reduce the costs of adjust-ment and collections dramatically.

Not the fi rst timeA recent case illustrates the scope for change. A relatively small general average, although above the absorption amount in the hull cover,

involved 200 containers on a feeder vessel car-ried under fi ve bills of lading – one for each of the slot charterers involved. Collection of security from 200 cargo interests would have resulted in the costs of adjustment being one of the major allowances and was an unwelcome outcome. At the adjusters instigation the shipowners and slot charterers (or representatives), eventually met and agreed to lodge security on behalf of ‘their’ cargo so that security was collected from the fi ve, as opposed to 200, in-terests. Unfortunately this took almost three months to resolve. The situation would have been quite different if thought to such eventu-alities had been given at the time of the charter. Suitable clauses could have been agreed and inserted in the contracts. As already men-tioned, it is not as if this is the fi rst time that a maritime casualty has occurred where general average has been declared.

Small additional workIt would not be too diffi cult to incorporate a

general average clause into charter contracts. Items detailed could include the actual ab-sorption limit in the hull policy, the format for security lodged, procedures prior to cargo transhipment, the fi nancing arrangements for such transhipment, incidence of storage charges on containers awaiting provision of security and calculation of cargo values in the possible absence of commercial invoices. The question of cargo values should be easier to resolve in future as more information is now required at the point of shipment, especially where cargoes to the United States are con-cerned, in order to comply with the Maritime Transportation Security Act 2002 (MTSA). Inclusion of a cost insurance and freight (CIF) value would seem to be a very small additional work load compared to the potential savings that could be made. Are there any container operators willing to sail on the new wave of general average?

■

ge for container carriers

PHO

TO: BA

NA

NA STO

CK LTD

6

The Swedish Club Letter 2–2006

6

P&I

■■ If the containers sink to the bottom and unfortunately land on any of the many Na-tional Marine Sanctuaries that surround the U.S., in the Pacifi c and Atlantic Oceans and Great Lakes, the fi nes and damages that can be imposed on the unlucky vessel, as well as her owners and operators, can be huge.

In fact, the Marine Sanctuaries Act (MSA) imposes strict liability on any vessel that de-stroys or injures any national marine sanctu-ary resource, regardless of due diligence. The only defenses allowed by the Act, 33 U.S.C. §§ 1431-1445(b), are act of God, act of war, act of a third party, and acts authorized by state or federal government. However, the defense of “act of God” will not be available if the vessel knew or should have known of an impending danger, such as severe weather conditions. Ac-tivities “authorized” by state or federal govern-ments do not include the general permission all vessels have to sail over marine sanctuaries that are shown on navigation charts.

Congress enacted the MSA years ago be-cause of concern over the increasing deg-radation of marine habitats and the public demand for their preservation for ecological, recreational, educational and aesthetic value. However, as administered by the Secretary of Commerce, the MSA can sometimes seem like a draconian solution.

In July 2006, the owners of the Med Tai-pei, a container vessel that lost 15 containers overboard, one of which was found lying on the Monterey Bay National Marine Sanctuary, paid U.S. dollars 3.25 million to settle all the fi nes and the damages alleged by the U.S. gov-ernment. The sanctuary is clearly marked on the chart for Monterey Bay, California.

The 40 feet containers had in them a va-riety of cargo, including furniture, auto tires,

are not subject to set-off.The ship’s owner and vessel are also liable

for the reasonable costs incurred by the gov-ernment in response to any incident, as well as the damages resulting from injury to the sanctuary, plus interest. Included in the defi ni-tion of “damages” is (I) the cost of replacing, restoring, or acquiring the equivalent of the injured sanctuary resource, and (II) the value of lost use of a sanctuary resource pending its restoration or replacement, or (III) the value of the injured or destroyed resource if it cannot be restored or replaced.

If this were not enough, the MSA provides criminal penalties for damages caused to a sanctuary. In addition, a person refusing an authorized offi cer to board a ship to investigate a violation of MSA can be fi ned and impris-oned for up to six months.

A shipowner or vessel penalized under the MSA must act promptly to allege a defense. Relief may be obtained from the federal court by the fi ling of a complaint within 30 days of the Order. Section 1437(d)(2). After that, the penalties or damages cannot be challenged and must be paid. The government must give notice of the penalties imposed or the oppor-tunity for a hearing.

The government can obtain an injunction in order to prevent or abate any imminent risks of destruction or damage to a sanctuary.

A suit for response costs and damages will be barred unless the government fi les suit within three years, not from the date of the incident but from the time the government completes a damage assessment and restora-tion plan for the damaged sanctuary. That could take months or maybe years.

The fi nal bad news under the MSA, is that the statute expressly provides that the claims

wheel chairs and cyclone fencing. One of the containers was spotted sitting on the sanctu-ary in 4,000 feet of water by a remotely op-erated research camera. The photos showed the serial number of the container, which was easily traced back to the ship.

The container had been lost as the ship rolled in heavy weather, but a U.S. Coast Guard report revealed the containers had not been safely secured on deck: There were faulty welds on anchor points for the containers, as well as missing d-rings. The ship would have been liable under the MSA even if it had been seaworthy, but the Coast Guard report only made the situation worse.

William Douras, Acting Superintendent for the Sanctuary Program on the West Coast, said, “It is important for shipping companies to execute due diligence when carrying cargo through national marine sanctuaries, as they will be expected to pay for damages that occur from their operations.”

One reason the damages can be astronomi-cal is that a person or ship violating the MSA is subject to a civil penalty of not more than USD 100,000 for each violation, and each day of a continuing violation is a separate viola-tion. On top of that, the violator must pay interest and costs.

A vessel in violation of the MSA, or any regulations or permits thereunder, is liable in rem for any penalties assessed, and such penalties constitute a maritime lien. The of-fending vessel can be arrested and sued in federal court. Moreover, a vessel, including its equipment, stores and cargo, is subject to forfeitures under § 1437(d). The forfeiture is considered a separate recovery in addition to any civil penalty under § 1437 or civil dam-ages under § 1443. The proceeds to forfeiture

Losing containers overboard in U.S. waters may have consequences far mo

Mr M.E. DeOrchisOf Counsel

DeOrchis Wiener & Partners, LLP, New York

Mr Vincent M. DeOrchisPartner

DeOrchis Wiener & Partners, LLP, New York

M.E. De Orchis, founder of De Orchis, Wiener & Partners, New York, has practiced Admiralty law since 1948 and has been described by the Journal of Commerce as the “maritime lawyer’s lawyer”.

Vincent M. De Orchis, heads the Firm and is an advisor to the U.S. State Department on drafting a new UNCITRAL Transport Convention. He is a titular member of the CMI.

77

The Swedish Club Letter 2–2006 P&I

ore serious and far more expensive than the value of the lost cargo.

fi led by the government for damage to a sanc-tuary are not subject to the shipowner’s right to limit liability. Tug Allie-B v. USA, 273 F.22 936 (11th Cir. 2001).

If there is a choice – go the other way!

It should be noted that there are other grounds for becoming a victim of the MSA. A vessel that dropped an anchor on a sanctuary paid a million U.S. dollars to avoid prosecution. The shipowner attempted to defend itself by argu-ing the new boundaries of the sanctuary were not on the British admiralty charts used by the master, because NOAA (National Ocean and Atmospheric Administration, an agency under the U.S. Department of Commerce) had failed to provide the new coordinates of the sanctu-ary to anyone other than the U.S. government chart maker. The U.S. government did not relent in its claim against the shipowner.

Treasure hunters who used prop wash de-fl ectors to salvage for treasure were hit with USD 211,130 in fi nes, plus interest, for injur-ing protected sea grass in a marine sanctuary. A dredging company was held strictly liable for damage to a grounding site in a marine sanctu-ary. Sanctuaries may be located in state as well as federal waters. A preliminary injunction was upheld restraining a salvage company from an operation in a marine sanctuary. As a matter of law, salvors are not engaged in any activity “authorized by state or federal law” when they salvage in a marine sanctuary.

The bottom line for masters is that if there is a choice about sailing over a National Ma-rine Sanctuary marked on a U.S. navigation chart, go the other way.

■

The sanctuary is clearly marked on the chart for Monterey Bay.

8

The container vessel in question was moored alongside the berth at Odessa container port with the assistance of a pilot and two tugs. During this, a procedure steel bracket on one of the fenders penetra-ted no 4 bunker tank. According to the authorities the spilt quantity was estimated to have been approximately 74 tonnes.

The Club’s expert, appointed from London Offshore Consul-tants, concluded that the fenders at this berth were in very poor condition, and that the bunker tank had been penetrated because the fender in question had rotated approximately 45 degrees to the position shown in the photograph above. The following day after our surveyor’s attendance some of the fenders, including the one which damaged the vessel, were replaced by the Port Authority and subse-quently destroyed by them.

The State Ecological Inspection (SEI) presented a claim for USD 24.5 million for damage to the environment. This was based on a tariff of USD 329 per kilo of oil spilt. Our member was held liable even though there does not appear to have been any environmental damage in the area as a result of the spill. The spilt oil was largely contained within booms around the vessel and was cleared up.

The Port Authority presented a claim for USD 7.6 million. This amount covered their alleged clean-up costs with an additional fi xed amount based on a tariff of USD 84 per kilo of oil spilt. The advice received by the Club is that the actual clean-up costs were a fraction of the sum claimed.

Negotiations with the Port Authority and the SEI were initially very diffi cult and protracted. Meetings were repeatedly postponed and the opponents sometimes failed to show up at the appointed time. It became evident at an early stage that the above parties were not prepared to discuss a reduction of the amounts claimed and the negotiations focused instead on the wording of the respective bank guarantees requested.

SEI could not understand why the Club insisted that payment under the guarantees must be accompanied by an “enforceable jud-

gement”, meaning a judgement of the Court of Appeal and not just a fi rst instance judgement. According to Ukrainian law a judgement issued by the Court of Appeal is immediately enforceable. Maybe SEI had in mind a similar case involving another club where SEI managed to convince the judge to declare the fi rst instance judge-ment enforceable. The bank of course refused to honour a bank guarantee based on a fi rst instance judgement but was subsequently forced to pay following huge pressure from SEI.

The Ukrainian court has now given judgement against the vessel for the full amount of the en-vironmental claim. The trial of the claim against the vessel took place within ten weeks of the inci-dent, making it very diffi cult to present a full and proper defence of the claim in this matter. There

were also numerous breaches of Ukrainian procedural law by the trial judge.

The maritime legislation in force in the Ukraine can therefore result in claims for seemingly minor incidents being totally out of proportion compared to the damage caused. The approach of the courts can also make it diffi cult to obtain a fair trial.

We would like to warn our members about the situation in Odessa. Members should take utmost care during berthing opera-tions. Fender systems, particularly those in the container port, are not up to standard. Many of the fenders were found to be worn out and if these fenders have rotated to the position shown in the picture above they could expose steel brackets that can easily penetrate the vessel’s shell plating. The fenders that were replaced by the Port Authorities were replaced by old fenders and not new ones.

Similarly, members should take proper precautions during bun-kering operations to prevent overfl ow of bunkers. Very strict bunker procedures must be implemented and followed by the crew. Indeed, members should even avoid taking bunkers at Odessa unless abso-lutely necessary considering the very large amounts that may be claimed for minor spills.

■

w a r n i n g !

The Swedish Club Letter 2–2006 P&I

8

Fredrik KruseSenior Claims Manager

Team Göteborg III

PHO

TO: LO

ND

ON

OFFSH

ORE CO

NSU

LTAN

TS LTD, LO

ND

ON

■■ We would like to bring to the attention of our members the very

diffi cult situation at the port of Odessa, Ukraine, in case of pollution

incidents. Vessels may be delayed for very long periods and million dol-

lar bank guarantees may be requested before the vessels are allowed

to sail. One of our members’ vessels has recently experienced a delay of

not less than four weeks following a bunker spill of some 74 tonnes. Fender systems are not up to standard.

9

Marine InsuranceCourseGöteborg, May 15th -19th 2006

■■ The Marine Insurance Course 2006 was held at the head offi ce of the Club for the sixth consecutive year, in mid-May. Twenty-seven people, representing members, brokers, correspondents and reinsurance companies, from eight different countries, attended the fi ve-day course. Club employees, all experts in their respective area, gave presentations that covered the major aspects of marine insurance, such as P&I, Hull & Machinery, FD&D, and reinsurance and loss prevention.

The next Marine Insurance Course will be held May 7th-11th 2007. Further information and an online application form are available on the Loss Prevention section of our website, www.swedishclub.com.

■

The Class of 2006, together with a few Club employees, gathered outside the head offi ce in Göteborg.

The conference room provides an informal environment where questions and discussions about the various subjects are encouraged.

Senior Advisor Clas Brantmark, explaining the Club’s Ship Manager Evaluation process to an intrigued audience.


9

The Swedish Club Academy

Workshops are an important part of the Marine Insurance Course. The participants are given the opportunity to solve a wide range of problems that claims handlers and underwriters are faced with in the marine insurance business today, under the guidance of a Club expert.

PHOTOS: THE SWEDISH CLUB

10

International Gto face futurechallenges

Andrew Bardot became Executive Offi cer of

the International Group of P&I Clubs in March,

succeeding Lloyd Watkins. The Swedish Club

is one of 13 International Group members.

Together, they insure the third party liabilities

of some 90 per cent of world ocean-going

tonnage (including 95 per cent of all tankers).

Previously, Andrew Bardot was Senior Partner

at maritime law specialists Bentleys, Stokes &

Lowless. His new challenge is to contribute to

the International Group’s development as an

eff ective ambassador for the Clubs and their

shipowner members. In his presentation to

delegates at The Swedish Club Members’ Day

in June, he explored some of the issues now

confronting the international P&I community.


10

Annual General Meeting

PHO

TO: A

LSÉNS FO

TO, LERU

M, SW

EDEN

11

roup “well-positioned” ■■ The International Group’s three main functions are reinsu-rance, representation and the exchange of information. The coor-dination of the Clubs’ claims-sharing agreement – known univer-sally as the “Pooling Agreement” – is a major responsibility. This agreement sets out the arrangements under which all qualifying claims in excess of the USD 6 million retention are shared between International Group members. Andrew Bardot said: “As might be expected, much of our work centres on defi ning and refi ning the scope of cover and the rules and guidelines under which claims are shared.”

The representative function is becoming more important. The International Group is a forum allowing the Clubs to develop com-mon positions, in the interests of shipowners.

The third main function, information exchange, is also gro-wing in importance: “Increasingly, the Clubs share information on a wide range of issues, such as pollution, personal injury, maritime security, the provision of places of refuge for casualties and the car-riage of hazardous cargoes.”

The International Group is founded on three agreements: the constitution (which, inter alia, sets out objectives and membership criteria), the Pooling Agre-ement and, in addition, the Internatio-nal Group Agreement (IGA) – which provides a framework for vessel quotation.

The International Group reinsurance programme is one of the largest global reinsurance contracts. “Under this contract, rein-surance is provided at cost to our members. This represents the highest level of cover available in the market.”

Historically, the International Group has worked within a modest budget. More recently, however, it has expanded to meet a wider and more demanding role. Its representative function is proactive and now includes liaison with organisations such as IMO, UNCTAD, OECD and UNCITRAL, together with governments and the EU. The International Group has consultative status with the IMO and makes an important contribution to the drafting of new conventions, protocols and codes.

A small secretariat, headed by Andrew Bardot, is responsible for the International Group’s day-to-day activities. The work program-mes are progressed by Club managers serving on its subcommittees and working groups. “This is one of the International Group’s great strengths. It has a wealth of expertise, readily available through the Club managers.

“There are some occasions, of course, when confl icting views have to be reconciled. For example, there are differences of attitude towards the huge increase in liability recently introduced under the Athens Convention. This, in turn, is part of a much wider debate on very large vessels, higher risk exposure and issues of mutuality.

“It is important to take account of the practicalities of shipping and insurance when developing a common position. We have our critics, who feel we tend to take too long to develop a common po-sition on specifi cs, but this is inevitable given that the International Group is responsible, collectively, for the third party liabilities of most of the world fl eet.

“Unfortunately, the wide range of our activities has yet to be fully recognised. We have over 50 subcommittees and working groups, dealing with a very diverse range of issues. Our work is progressed in close cooperation with other industry associations, including the International Chamber of Shipping, INTERTAN-KO, BIMCO and OCIMF.”

A change in the IGA’s status under EU Competition Rules is now on the horizon. The current exemption expires in 2009 and the IGA will be open to legal challenge from that point. Andrew Bardot said: “It will be business as usual post-2009. We will continue to follow the procedures adopted under the terms of the exemption. The Group will continue to report to Brussels on an annual basis as presently and will report any material change in the operation of the Group or in the markets within which the Group operates, which might have implications for the operation of the IGA.”

All International Group Clubs face the increasing burdens of fi nancial regulatory compliance. Andrew Bardot said: “There is a growing tendency to supervise by regulation. This has resulted in increasingly onerous solvency and capital adequacy requirements. Our members have no specifi c problems here, other than the fact that this regulatory burden continues to grow.”

The Clubs also have concerns about the escalation of national and regional challenges to long-established international conven-

tions: “The signifi cance of this problem cannot be under-estimated. In Europe, the role of our EU Strategy Working Group is of growing importance. We have an obligation to explain our po-sition and present the industry’s argu-ments. We should not expect people

in Brussels to be instant experts in the matters which cause us most concern. Fortunately, there is a growing willingness amongst MEPs to listen to our arguments. The International Group needs to build on this, by applying a new and more direct communica-tions strategy, to reinforce our relationships with the EU and other regulators.”

The International Group continues to support international conventions, as opposed to regional and national solutions which might fragment the global regulatory system. Andrew Bardot said: “International conventions establish and maintain a level playing fi eld for owners. We share industry concerns over the EU’s inter-ventionist tendencies, evident in regulatory packages such as Erika 3 and the Ship Source Pollution Directive. We also face challen-ges to traditional rights of limitation and signifi cant increases in liability. In addition, the risk exposures grow as ever larger vessels enter service.”

The reinsurance market’s ability to meet new demands, ari-sing from expanding shipowner liabilities, depends to some extent on external factors that are beyond infl uence. Signifi cantly, this year’s reinsurance renewal was late. Reinsurers were anxious to as-sess their exposure to claims arising from the extreme weather of 2005 – particularly the US Gulf hurricanes – before concluding the contract.

The principal concern for the Clubs, however, is the character of the political and public focus on ship standards. Andrew Bardot ad-ded: “The Group and its members have taken many quality-related initiatives, but the P&I community is not a frontline policeman. The role that the P&I Clubs can play in relation to quality shipping issues need to be put into a proper perspective and should be seen as a supporting, rather than surplanting, the primarly roles of Clas-sifi cation, Flag State and Port State Control in this area.

With so much change under way, the International Group has much work to do. Fortunately, we are in good shape. We continue to function effectively. The International Group is well-placed to deal with future challenge.”

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11

Annual General Meeting

“The role that the P&I Clubs can play need to be put in a proper perspective”

12

■■ There are marked differences between male and female leadership styles but Dr Robért maintained that there was no clear-cut division between the sexes. Indeed, around one-third of women happily tolerate (or even prefer) a male leadership style, whilst a similar proportion of men are comfortable working within a framework of female leadership. The latter style places the leader centrally – rather than on a pinnacle – and puts less emphasis on highly structured working.

Rigmor Robért says: “The brain’s left side is responsible for male ‘warrior’ behaviour, whereas the right side (the ‘soul’ side) is the seat of empathy and sensitivity. Men and women both display these qualities and it would be wrong to suggest that women are always more empat-hetic than men. It would be true, however, to say that women do not switch off feelings of empathy as readily as men do.”

Most people, male or female, are right-handed. Those right-handed activities requiring power, accuracy, focus and dexterity are controlled by the “warrior” left side. Interestingly, women and the left-handed are more sensitive to touch and pain on the left side of their bodies. There are also important gender differences in relation to age and the changing balance between “war-rior” and “soul” behaviours.

Dr Robért says: “Younger men tend to sup-press soul behaviour. After all, ‘business is war’! And business does tend to be defi ned in warlike terms. Markets are ‘captured’, territory is ‘con-quered’ and competitors are locked into ‘price wars’. Group behaviours and rituals are employed to reinforce warrior feelings, through ‘team working’ and commitment to ‘core values’.

“Later in life, men begin a process of change. A new balance may emerge as a man takes stock of his life and listens to his soul side. He begins to attach more importance to emotional considerations. Men in the 40-50 age group are at a dangerous age! Much the same can be said of women, but for different reasons. They can develop the belief that they have damaged themselves by always putting the interests of others fi rst. These feelings can generate highly negative self-criticism, which may be harmful.”

In a stressful workplace, good performance often results in the set-ting of even tougher goals. In this corrosive environment, men and women are forced to rely on warrior behaviour. Rigmor Robért says: “Stress in short bursts is good, but it can be damaging to behave as a warrior for long periods. Certainly, living permanently as a warrior is dangerous to health. This point needs to be appreciated if men and women are to work together in harmony. Women fi nd it particularly diffi cult to behave as warriors for long periods. Women who try tend to be known as ‘dragons’!”

These differences of emphasis on warrior and soul behaviours are ancient structures. These behaviours reach back into one million years or more of human history. They centre on the female’s interaction with her child and the male preoccupation with hunting and other warrior concerns. Male leadership has fi rm goals and is structured for effi ciency. Aims are well defi ned and tasks are promptly allocated. Rigmor Robért says: “Men favour silence when they need to ‘focus’, whereas women prefer to chatter. If women in the workplace are silent, they are not working effi ciently. Instead, they are signalling that something is very wrong. Chatting allows a woman to ‘hear what she thinks’. The function of thinking aloud underpins the mother-child relationship. It should always be remembered – particularly by men – that human life begins under female leadership.”

A male senior executive might regard his female counterpart’s small talk as an unnecessary digression, or even a worrying sign of emotional insecurity. The woman has a very different perspective. She regards it

as “natural” to share personal thoughts when she feels comfortable in the presence of a colleague. Yet this marked difference between the sexes begins to erode with age. Dr Robért says: “When men grow older, their behaviour develops female characteristics. They learn to switch on the soul side more frequently, despite having spent so much time, over the years, engaged in warrior behaviour. It is then that the motorcycle or younger woman may put in an appearance, in a demonstration of a man’s search for his ‘true’ identity.

“In these circumstances there may be a greater interest in (and ap-preciation of) activities which relate to the soul side. These include re-cognition of the inherent value of a rich social life, the importance of humour, the peace extended by natural surroundings, the rewards of exercise and a new understanding of the importance of rest and a good night’s sleep. This process, when under way in the 50 plus male senior executive, should make it somewhat easier for him to understand his female counterpart.

“The soul side, meanwhile, is eager to remodel the individual’s ‘life biography’. A life cannot be altered, as such, but personal perception of life history chan-ges over time. This can be a dangerous period for the maturing woman. She revisits her bio-graphy. She may then conclude that she did too much to please others and was too submis-sive in her relationships. New behaviours may

emerge, which are less inclined to follow the wishes of others. At this point, some women decide to spend more time as warriors and seek to satisfy an appetite for ‘unlived experiences’.”

In Dr Robért’s view, behavioural distinctions between the sexes have foundations extending far beyond the reproductive imperative: “So much is imprinted by parents and friends and in other social rela-tionships. The very fi rst question asked about a person is: ‘Is it a boy or a girl?’. All that follows will emphasise gender. The true signifi cance of imprinting is known from rare cases of accidental amputation of the penis. Such a boy might be brought up as a girl, with no knowledge of his male origins. Yet, on discovering the truth later in life, it is possible for such a person to adapt successfully to life lived as a man.”

The key differences between male and female leadership tend to centre on focus, power and control. “The warrior qualities of male lead-ership include the ability to defer small talk until the hunt is over (the ‘focus’). The qualities of power and control contribute by emphasising the ‘team machine’ and a group belief in invincibility.”

Was Prime Minister Margaret Thatcher “male”? Dr Robért says: “Certainly, Mrs Thatcher had many male qualities. Yet, at the same time, she never hesitated to use her soul side and to exploit strong emo-tional feelings.”

Rigmor Robért’s interest in psychotherapy refl ects her fascination with people and what it really means to be a human being. She says: “It is remarkable to experience the honesty of the one-to-one interaction of psychotherapy. It is like putting an ear to the other person’s heart.”

Her professional life is demanding and a personal balance must be struck with the challenges and rewards of family life. Rigmor Robért’s husband, also a medical doctor, is well known internationally as an envi-ronmental strategist. He is the author of a recent book setting out benign environmental options for governments. The couple have two sons, one an engineer and the other specialising in environmental economics. At the heart of this family is the duality of science and people – requiring all the components of personality provided by that most remarkable instrument, the human brain.

■

Male and female

“When men grow older, their behaviour develops female characteristics”

12

The Swedish Club Letter 2–2006 Annual General Meeting

13

e leadership:a question

of emphasis

Rigmor Robért is a doctor specialising

in occupational medicine. She is also

an analytical psychologist, author,

broadcaster and lecturer on creativity,

life balance, confl ict management and

male and female leadership qualities.

The latter subject provided the theme

for Dr Robért’s presentation at The

Swedish Club Members’ Day in June.

Members of the predominantly male

audience suddenly found themselves

beginning to think hard about the

dynamics of interaction between men

and women in the workplace.

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■■ André Goedée joined Nedlloyd in the mid-1970s as a Second Offi cer: “Things were very different then. My fi rst experience was with general cargo steamships.” He moved to Neddrill three years later, fi nding a new world in the offshore industry: “Many companies, including Nedlloyd, converted bulk carriers into drill ships at this time. In fact, Nedlloyd was one of the fi rst to do so. The offshore envi-ronment was stimulating and extraordinarily competitive. There was a pioneering spirit in the air. It was a specialised market demanding, above all else, consistent strong performance. This was much to my taste.”

In the late 1980s André Goedée became a member of Neddrill Nederland’s management team. In 1990, however, his career took a fresh turn. He joined Wijsmuller Transport, then a division of Heerema, as General Manager Op-

Dockwise: charting a course for a heavyAndré Goedée, Chief Executive Offi cer of heavy transportation

specialists Dockwise, became a member of The Swedish Club’s

Board in June of this year. André Goedée began his professional

life in shipping. He graduated from Scheveningen Merchant

Marine College and joined Nedlloyd Shipping in 1974. A Master

Mariner, his combination of shipping knowledge and career ex-

perience in the off shore industry provides a perfect background

for his current responsibilities – heading a

heavy transportation major with a substan-

tial off shore oil and gas client portfolio.

erations. This company was struggling prior to purchase by Heerema. André Goedée says: “I was offered the job as I had business experience in a large, structured organisation and, in addi-tion, I knew the offshore sector – a major gen-erator of heavy transportation requirements. Previously I had been a Wijsmuller Transport client and they knew me to be a tough negotia-tor. Perhaps they felt it would be easier to move me to the other side of the table! Either way, I have no regrets.”

During September 1993 Wijsmuller Trans-port merged with Dock Express (then a Royal Vopak division) to establish Dockwise, the world’s largest ocean heavy transportation pro-vider. Breda-based Dockwise operates a fl eet of 15 semi-submersible heavy transport vessels.

André Goedée says: “The merger period was an exciting time. Both parties had real-

ised that aggressive price competition threat-ened their destruction. Dockwise’s creation recognised that essential fact. The companies served different clients and had very different corporate cultures. Within a year, however, we forged one group with one culture. It was tremendously satisfying and I still take pride in this outcome. The success that followed is due to the strong foundations laid in that fi rst 12 months.”

His career took another direction in 1995, when he became Executive Vice-President of Heerema Group in Geneva. He recalls: “In merger situations there are always com-promises and concessions. With the merger completed, the new company had a top-heavy senior management team. I approached Peter Heerema and argued that, as the youngest, I should leave. He had other ideas. He wanted me to stay with the Group and asked me to work with him in Geneva. This was a chal-lenging time. I found Peter to be businesslike and very straightforward. I have always en-joyed a good relationship with him.”

In 1999 André Goedée faced a fresh chal-lenge, when he took the position of Chief Executive Offi cer of a specialised division of the Vedior Group. This international business sources highly educated professionals and An-dré Goedée was responsible for six countries and 8,000 workers – primarily in the fi nan-

New Board Member

Contributing to Stena’s pursuit of excel

■■ Christer Schoug has been involved in shipping and ship management, particularly conversion projects and newbuildings, since 1982. He graduated in naval architecture from Göteborg’s Chalmers University, having ear-lier gained a BSc in mechanical engineering.

He says: “It was always assumed that I would enter the family engineering business, but I decided to become a marine specialist during my military service.”

Following three years service with the Swedish Navy as Marine Engineer, Christer Schoug became a Coordinator in the Out-fi tting Department at Kockum Shipyard,

Newly-appointed Stena RoRo Managing Director Christer

Schoug joined The Swedish Club’s Board in June. As Shipping

Coordinator he represents Stena in its entirety, including tan-

ker operators Stena Bulk/Concordia and ferry operators Stena

Line, as well as Stena RoRo. Stena is a long-standing Club mem-

ber. The relationship between Stena and The Swedish Club

extends back to the 1960s. Today, 34 Stena vessels are entered

with the Club for Hull & Machinery and 19

for P&I.New Board Member

Malmö. He took the job at the prompting of some friends from his university days. In 1987 a long association with ferries began when he moved to Scandinavian Ferry Lines/Sweferry at Helsingborg. During 1991-1995, as Fleet Manager, he was responsible for all operations, maintenance, conversion and newbuildings for the busy ferry routes linking Sweden with Denmark and Germany.

The move from Kockum came with re-cognition that Swedish shipbuilding was on the wane. “Nevertheless, it was an interesting time, with the yard building two cruise ves-sels – Jubilee and Celebration – for Carnival.

When the decision was made to close the yard, I looked for something new, and my chance came when Scandinavian Ferry Lines sought a Superintendent for the Malmö/Copenha-gen route. Subsequently, I began to ‘climb the ladder’ and became the Fleet Manager after a number of years as Superintendent. This company operated a sizeable fl eet of 12 ves-sels but had a pleasant, intimate atmosphere. As a member of its small management group I had the chance to get involved in all project stages, from origination to the fi nal phase of implementation.”

In 1995 Christer Schoug’s responsibilities widened when he became Newbuilding Ma-nager at Stena RoRo. This was a signifi cant appointment. The company took delivery of three new RoRos from Italian builders, to-gether with four RoPax ships built in Spain during 1995-2000, three RoRos from China during 1999-2003, two RoPax ships from Kor-ea in 2000-03 and two more of this type from Norwegian builders whereof one is underway. This was followed by a 2+2 RoPax order for Russian builders.

“Working with Stena RoRo is an outstan-


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9 continues on page 16

yweight championcial, medical, legal and engineering sectors.

In 2003, however, André Goedée re-turned to Dockwise as CEO, succeeding Bert Bekker. He says: “There is so much variety within Dockwise. Its assignments range from the transport of small motor yachts, at one ex-treme, to 73,000-tonne production and drill-ing platforms at the other. I must admit that I did have mixed thoughts about returning to Dockwise. It took me several months to make up my mind. Yet the more I thought about it, the more attractive the prospect became. I found plenty to do to improve Dockwise’s position. Within three years Dockwise has de-veloped into an outstanding commercial and fi nancial success.

“Dockwise is well-positioned to benefi t from the rig boom. Drilling contractors have around 90 rigs on order and the existing world fl eet of 600 rigs remains highly mobile. We expect a busy future. At the same time, new entrants will increase competition and this has prompted us to re-position ourselves as specialists for large, high value assignments (including “fl oat-overs”) and as the preferred door-to-door heavy transportation provider. Over time, this will reduce dependence on the global market for rig moves.”

Dockwise is headquartered in Breda, with overseas offi ces in Houston, Shanghai and Perth. New offi ces are to be opened in

Busan and Lagos. During this year the com-pany launched its new service portfolio. An-dré Goedée says: “Our clients are confronted with the complexities of managing the entire transport process, when they would much pre-fer to remain focused on their core business activities. We now provide signifi cant added value, through our capacity to assume total responsibility.”

The Dockwise fl eet consists of fi ve open-deck heavy transport vessels and four heavy transport/product carriers. In the main, these units are deployed for transportation assign-ments involving drilling rigs and offshore plat-form assemblies. In addition, two dock-type vessels transport port and industry-related cargoes. Four other vessels are luxury yacht carriers, operated by a US-based division.

The fl eet includes Blue Marlin. This is the world’s largest heavy transport vessel, follow-ing a conversion at Hyundai Mipo, Ulsan. One impressive recent assignment for Blue Marlin involved the transportation of the 30,000 tonnes SBX US missile defence system, from Texas to the Pacifi c, via South America.

In a recent public statement, André Goedée talked about his fl eet renewal plans. These call for “new, state-of-the-art vessels, the largest in their market segment.” He adds: “We are investing very heavily in our new organisation and service portfolio. There must be a corre-

sponding commitment for fl eet renewal. We have a clear concept for our new generation heavy transport vessels but we want to build at attractive prices. For this reason, we are in no great hurry.”

André Goedée puts forward a direct style: “I like an open approach and I need a team around me showing trust and respect. I can be tough and I believe in results ... in getting things done.”

Dockwise became a member of The Swed-ish Club in 2003, entering 13 vessels for Hull & Machinery. André Goedée is a strong sup-porter of the Club. He says: “Most of all, I like the Club’s professionalism. It is refreshing to deal direct with the people who are involved with your ships. They are good listeners and that’s important too.”

As for his personal contribution to the Board’s activities, André Goedée says: “I will be participating in the work of the Finance Committee and I may have some ideas to offer here. But I am also happy to learn. We are very interested in the complex insurance arrange-ments required for huge oil and gas contracts. There are some substantial challenges on this front for Dockwise and other service provid-ers.”

■

lenceding experience. From the start, the great thing was my freedom to put together the project teams of my choice. We soon fi nalised specifi cations for new ro-ro and ro-pax ships. It was a remarkable period. The main aim was to maximise cargo capacity. Ten years on, the pendulum has swung back. There is now an emphasis on capacity and the delivery of a distinct ‘passenger experience’. We have also recognised the rapid development of a broader cargo mix, including containers.”

The new RoPax concepts in 1995 were de-veloped against the backdrop of the Estonia tragedy. New safety measures were incorpora-ted before new regulatory requirements were fi nalised. “We took a gamble and we managed. These new ships were far ahead of their time and accurately anticipated the new rules.”

There was also Stena’s innovative approach to environmental management: “The pione-ering initiatives here included the introduction of catalytic exhaust gas systems. These have still to become a regulatory requirement, alt-hough this is now on the way.”

In August of last year major group-rela-ted responsibilities were added to Christer

Schoug’s portfolio. He became Stena’s Ship-ping Coordinator, with overall management of the marine related technical functions ex-tending across the group. This May he suc-ceeded Carl-Otto Dahlberg as Stena Ro-Ro Managing Director. He also joined Stena Bulk Managing Director Ulf Ryder as a Deputy Managing Director of Stena Rederi.

On his appointment as Stena RoRo Ma-naging Director, Christer Schoug says: “Carl-Otto is a remarkable man. He has the world’s entire fl eet of ro-ros stored in his head! I have a slightly different character, more the project team type and for this reason my fi rst priority is to prepare Stena RoRo for the highly inte-grated team-working that is now required, as we begin to introduce new tonnage for both Stena Line and Stena RoRo.

“Stena RoRo continues to fi ne tune its winning commercial formula, providing fl ex-ible vessels which, at the same time, match the exact operational needs of specifi c routes.” Stena’s drive to innovate remains as strong as ever. This was demonstrated by the 2003 deli-very of the fi rst “CLEAN” certifi ed roro, Stena Foreteller from China. Two sisters followed -

Stena Forecaster and Stena Forerunner. They all operate in the Baltic, between Hangö and Lübeck. The CLEAN notation is signifi cant, as the environmentally vulnerable Baltic is de-signated a “Particularly Sensitive Sea Area”.

Stena Line has four main business areas: Scandinavia, the North Sea, the Irish Sea and freight. It operates 38 vessels, including fast ferries, traditional combi-ferries, ropax vessels and pure cargo carriers on 18 routes.

Looking to the future, Christer Schoug says: “We need to invest in new tonnage but the market is now dominated by high build prices. It is diffi cult to place orders when prices are so high. In any event, the Asian yards are full; fi n-ding a slot before 2010 is a real challenge. With this in mind, we are now looking towards a new generation of yards, primarily in Asia.”

Stena Bulk now operates 71 tankers, total-ling more than 6.3 million DWT. It has full management responsibility for the listed com-pany Concordia. The latter’s fl eet includes the two pioneering “V-MAX” VLCCs, which set a new benchmark for innovative tanker design. Four years on, the fi rst of the 49,900 DWT


15


16

“P-MAX” product tankers, Stena Paris, was delivered. Built on V-MAX principles, these ships also feature double enginerooms and rudder/steering systems.

A milestone was reached last year with the naming in Göteborg of the tanker Stena Arc-tica – the largest Swedish-fl agged ship in the Swedish merchant fl eet. Stena Arctica’s pri-mary role is to transport Russian crude from the Gulf of Finland. By 2008 Stena Bulk/Con-cordia will be operating a fl eet of about a dozen large, ice-strengthened tankers.

There is signifi cant cooperation between Stena Bulk and a number of other operators such as the Russian major Sovcomfl ot. Ear-lier this year the two parties started building a pool of 10-15 ice-strengthened tankers. The

■■ The Supreme Court of the Philippines has ruled that a seafarer is subject to the Labor Code concept of permanent disability which states that those who are unable to perform their customary work for more than 120 days are deemed totally and permanently disabled. In the three cases decided by the Court, the Court awarded USD 60,000 in disability benefi ts to seafarers who were unable to work for more than 120 days. The Court did not consider the fact that the seafarers may have been “fi t to work” after the 120th day.

The applicability of the 120 days Labor Code principle to seafarers’ claims is being contested by the Filipino manning industry associations. Some of the arguments against said decision are as follows:

1. The labor law principle of 120 days is not applicable to seafarers’ claims. Seafarers’ benefi ts are governed by the POEA contract in the same manner that Labor Code benefi ts are governed by the Labor Code. There is no provision in the POEA contract providing total and permanent disability benefi ts for those ill/injured for more than 120 days. The POEA contract provides total and permanent dis-ability benefi ts for those ill/injured with a grading of Grade 1. The POEA contract does however provide sickness wages of 120 days for those who suffer work-related injury/illness.

2. Section 20(3) of the POEA contract clearly states that the benefi ts due under the contract are separate and distinct from the benefi ts provided under the Labor Code such as the Social Security System, Overseas Workers Welfare Administration, Employees Compensa-tion Commission, Philippine Health Insurance Corporation and Pag-ibig. Seafarers’ do in fact claim for their benefi ts under the POEA contract and also, in addition, their benefi ts under the Labor Code such as the Social Security System, Employees Compensation Com-mission, etc.

As of this writing, the Supreme Court still has to decide the Motions

that have been fi led contesting the decision. In the meantime, the said 120 days decisions are considered to be law in the Philippines. It is thus important that certain procedures be followed in order to lessen its impact.

1. Reports of illness or injury must be done immediately to ensure prompt monitoring of seafarers’ condition. The 120 day period be-gins to run the moment the seafarer becomes ill or injured.

2. Company designated physicians must closely monitor the treatment of the seafarer. A report must be made immediately after the initial consultation and on the 30th, 60th and 90th day of treatment in order to determine a plan of action before the 120th day.

3. Requests for approval of any medical procedure must be acted upon immediately. Those involved in the approval of such procedures must realize the consequences of any delay.

All those involved in the processing of Filipino crew claims must be fully aware of the consequences of any delay in the treatment of a seafarer. The worst thing that can happen is to have a Filipino seafarer declared “fi t to work” on the 121st day when it could have been done on the 120th day.

Below is a summary of the Crystal Shipping case decided on October 20th 2005 and the Remigio case decided on April 12th 2006.

The Crystal Shipping CasePermanent disability is the inability of a worker to perform his job for more than 120 days.

Seafarer was employed under the old POEA Standard Employment Contract. He was diagnosed with “swelling neck and lymphatic glands right side in neck” and was repatriated on August 18th 1998. He under-went a total tyroidectomy with radial neck dissection and also radioac-tive iodine therapy. The company doctor gave him a disability grading

objective is to ship up to 25 million tonnes of Russian crude annually from the Baltic to the UK/Continent.

Christer Schoug comments: “The key event here was the opening of the Primorsk terminal in 2001. Some 57 million tonnes of oil was transported from the Gulf of Finland last year. Stena Bulk now aim to develop the ‘B-MAX’, a Baltic tanker with an extremely wide body and shallow draft, capable of carry-ing up to 250,000 tonnes of cargo. This type, of course, will also have duplicated propulsion and steering.”

Christer Schoug looks forward to parti-cipating in the work of The Swedish Club’s Board: “This is an interesting area. As Ship-ping Coordinator I have the overall respon-

sibility for Stena Group’s marine insurance arrangements. I want to make a useful con-tribution to the Board and I also know I have a lot to learn.”

As for the challenges ahead, Christer Schoug adds: “One important concern for the Club is the man-machine interface and its impact on safety. It would be unwise to allow the process of automation to continue without some vigorous intervention in this area.

“Another challenge, of course, is the need to build a stronger platform for The Swedish Club. We have to address a number of issues concerning long-term sustainability and this matter needs to be approached with an open mind.”

■

120 days

9 continuued from page 15Contributing to Stena’s pursuit of excellence

alert on Filipino Crew Claims

The Swedish Club Letter 2–2006 Crew

16

17

of Grade 9. He sought the opinion of his own doctor who declared him totally and permanently disabled with a grading of Grade 1. Both the Labor Arbiter and the NLRC awarded total disability benefi ts of USD 60,000.

The Supreme Court, through Justice Quisumbing, affi rmed the ruling thus:

“Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. As gleaned from the records, respondent was una-ble to work from August 18th 1998 to February 22nd 1999, at the least, or more than 120 days, due to his medical treatment. This clearly shows his disability was permanent.”

“Total disability, on the other hand, me-ans the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accusto-med to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s earning capacity.”

“Petitioners tried to contest the above fi ndings by showing that re-spondent was able to work again as a chief mate in March 2001. No-netheless, this information does not alter the fact that as a result of his illness, respondent was unable to work as a chief mate for almost three years. It is of no consequence that respondent was cured after a couple of years. The law does not require that the illness should be incurable. What is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability. An award of a total and permanent disability benefi t would be germane to the purpose of the benefi t, which is to help the employee in making ends meet at the time when he is unable to work.”

Crystal Shipping, Inc. and/or A/S Stein Line Bergen vs. Deo P. Natividad, G.R. No. 154798, October 20th 2005, First Division, Justice Leonardo A. Quisumbing, Ponen-te.

The Remigio CaseA total disability is considered permanent if it lasts continuously for more than 120 days.

The seafarer was employed as a musician (drummer) under the old POEA contract. On March 16th 1998, the seafarer suffered chest pains and eventually had a triple coronary artery bypass in New Orleans. After

repatriation, he fi led a claim for permanent total disability benefi ts.The manning agent referred the seafarer to their company doctor

who wrote “he may go back to sea duty as a piano player or guitar player after 8-10 more months”.

The Labor Arbiter did not award disability benefi ts as no medical report showing a Grade 1 disability was submitted and the fact that seafarer can go back to work after 8-10 months showed he was not disabled. The NLRC affi rmed the decision adding that seafarer’s habit of smoking two packs a day is a willful act that contributed to his disa-bility. The Court of Appeals likewise did not award disability benefi ts

as there was not enough evidence submitted to show that seafarer was actually unable to work as a musician.

The Supreme Court reversed the decision. The Court said that the Labor Code concept of permanent total disability must be applied to the facts of the case. In the recent case of Crystal

Shipping Inc. vs. Natividad, “permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body.” Seafarer was declared unfi t to work as a drummer for at least 8-10 months. This in itself already constitutes permanent total disability.

The Court further ruled:“Indeed, playing drums per se requires physical exertion, speed and

endurance. It demands the performance of hitting strokes and repetitive movements that petitioner, having undergone a triple coronary bypass, has become incapacitated to do. The possibility that petitioner could work as a drummer at sea again does not negate the claim for permanent total disability benefi ts. ...what is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability.”

“We do not agree that petitioner’s admission that he was a heavy smo-ker is enough ground to disqualify him from entitlement to disability compensation ... we have held that a worker brings with him possible infi rmities in the course of his employment and while the employer is not the insurer of the health of the employees, he takes them as he fi nds them and assumes the risk of liability...”

Bernardo Remigio vs. National Labor Relations Commission, C.F. Sharp Crew Mgt., Inc. & New Commodore Cruise Line, Inc., G.R. No. 159887, April 12th 2006, Second Division, Justice Reynato Puno, Ponente.

For further information, please contact our Philippine correspon-dent, Del Rosario Pandiphil Inc. or Birgitta Hed, The Swedish Club.

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Mr Ruben T Del RosarioMANAGING DIRECTOR

Del Rosario Pandiphil Inc, Manila

The Swedish Club Letter 2–2006 Crew

17

Hull & Machinery

Number of Vessels Entered 1,643 Average Age 10.6 GT (million) 66.6Protection & Indemnity

Number of Vessels Entered 782 Average Age 13.1 GT (million) 21.8Freight Demurrage & Defence

Number of Vessels Entered 446 Average Age 8.4 GT (million) 15.7

NEW MEMBERSMarch 2nd – Sept. 15th 2006

BASIC FACTSper November1st 2006

Alcon Holding Co Inc, Greece H&M

P&I

Angelicoussis (Agelef), UK/Greece H&M

Archipelago Ships Management S.A., Greece H&M

P&I

FD&D

Coster Navigation S.A., Greece P&I

FD&D

Dalian Ocean Shipping Co, PRC P&I

(already entered for H&M)

Goldbeam International Ltd, Hong Kong H&M

Golden Crown Shipping Co. Ltd, UAE P&I

Harmony Navigation S.A., Greece H&M

P&I

FD&D

Olympic Gulf Tankers Ltd, Greece P&I

FD&D

Reederei Thomas Schulte GmbH & Co KG, Germany H&M

Schiff ahrtskontor Altes Land GmbH & Co KG, Germany H&M

Schlüssel Reederei KG, Germany H&M

Sunwise Navigation Holdings (HK) Ltd, Hong Kong H&M

Trade Fortune Inc, Greece P&I

FD&D

18

Club CorrespondentThe Swedish Club Letter 2–2006

18

■■ W K Webster, our Hull Correspondents in the United Kingdom and Singapore, will be celebrating their 150th Anniversary in fi ve years time having been established in 1861. They have been representing Scandinavian Hull Underwriters since the 1880’s and have been the Club’s Hull Correspondents for the best part of 50 years. From their early be-ginning as a small Average Agent they have expanded into a Maritime Casualty/Claims Group made up of a number of companies, each offering expertise in a particular fi eld of Maritime and Transport claims (please view www.wkwebster.com). After opening an of-fi ce in Singapore in 1969 they were appointed as the Club’s Hull Correspondents for Singa-pore.

When The Swedish Club became a full member of the International Group, they needed a P&I correspondent in the United Kingdom and they appointed Pandi Claims Limited, which is a wholly owned subsidiary of the W K Webster Group.

StructureFor many years W K Webster traded as an unlimited liability partnership. It was wholly owned by the partners. In 2004 W K Web-ster incorporated and now trades as a limited liability company. The shareholders all work within the company on a full time basis. It is completely independent and has no outside shareholders. This means that the owners have direct hands-on control of the company’s business.

Claims ServicesThe Webster Group is able to assist The Swed-ish Club and its members in any type of marine casualty. It includes within its in-house staff qualifi ed maritime solicitors and barristers, marine engineers, master mariners and ex-perienced average adjusters. Not only is the company involved in dealing with casualties and claims that arise in the United Kingdom and surrounding waters but it also acts as cor-

respondent for the Club in cases where there is a connection with the London legal system either by way of arbitration or court proceed-ings. W K Webster International Pte Ltd in Singapore fulfi ls a similar role for the Club in the South East Asia region. Both offi ces oper-ate a 24 hour casualty response service so that if a member of the Club has any form of casu-alty or potential claim, they have access to the W K Webster resources at any time of the day or night.

On receiving notice of a casualty either di-rectly from the member or through the Club, Webster will immediately respond in the ap-propriate manner. Details of the casualty will be obtained and a recommendation made to the Club as to what action should be taken. This might involve the appointment of a local surveyor – W K Webster maintain a compre-hensive network of marine surveyors world-wide. They may be asked to assist in fi nding a tug to tow a disabled vessel or to refl oat in the event of a grounding. From time to time they may be faced with fi res and explosions on board vessels entered with the Club. Whatever the problem, Webster either has a suitable re-source in-house or “knows a man who can”. In many respects, Webster acts as an extension of the claims service in The Swedish Club offi ces and is certainly complementary to the facilities which the Club offers to its members. Web-ster very much sees its role as one of rendering assistance to the Club in servicing the needs and requirements of its members. In particular they try to establish cost effective solutions in casualty situations and thereby assist the Club and its member in returning a damaged vessel to its normal trading.

Worldwide RepresentationBecause of its worldwide representation, W K Webster is in a unique position to assist the Club in identifying and establishing a contact and dialogue with third parties, be they own-ers and underwriters in collision cases, salvors, port authorities, etc. Likewise through the

use of their in-house qualifi ed legal person-nel, they are in a position to attend on site of casualties and to obtain evidence. There is a team of legally qualifi ed personnel to perform this service to work closely with surveyors ap-pointed on behalf of the Club.

Claims ProcessAs soon as all relevant information has been collected – and it must be stressed how impor-tant it is to collect relevant information and evidence whilst it is still fresh and the trail is hot – Webster will report in detail to the Club and put forward recommendations for the further handling of the claim with a view to protecting the member’s interests. Frequently a case strategy is developed with the Club for the purpose of defending liability against third party claimants or where appropriate, protect-ing and pursuing recoveries against third party tortfeasors.

One of the most important aspects of a cas-ualty situation is to make sure that appropri-ate security is obtained and/or exchanged with third parties and this is an aspect of claims handling in which Webster can provide assist-ance to the Club and its members.

Webster maintains close contact with all the major towage and salvage companies and is therefore well placed to assist in the negotia-tion of salvage contracts and settlements with salvors. Likewise it maintains a relationship

A Correspondent at a Glance

W K Webster GroupThe Swedish Club’s H&M correspondent in the U.K. and Singapore

19

The Swedish Club Letter 2–2006 Club Correspondent

19

with the Marine Coastguard Agency which can be extremely benefi cial to the Club’s mem-bers’ interests.

Example of a casualty situationBy way of an example, a loaded tanker was pro-ceeding to enter the English Channel close to Land’s End with only one main engine in op-eration. The Marine Coastguard Agency was very concerned about this and was considering using its statutory powers to order the vessel to take a tug. On that occasion Webster was in constant contact with the Coastguard and the vessel and was able to give assurances to the Coastguard that if the situation deteriorated, contingency plans had been put in operation and that tug assistance would be made avail-able extremely quickly if needed. With the knowledge that Webster was involved, the Coastguard agreed not to use its statutory power to order the vessel to take a tug imme-diately and she was able to make Rotterdam without the need for any tug assistance.

An unusual caseFrom time to time, unusual cases occur. One such was a 4,000+ DWT fl at barge being towed across the Atlantic from Canada to Eu-rope. During severe weather, the towage con-nection broke and the barge was lost in the mid-Atlantic. In spite of an air search being mounted, the barge was not located. Some six

weeks later the barge grounded on a beach in South East Ireland at the top of the spring tides. This was in a remote rural area. The farmer whose land joined the beach where the grounding occurred, considered this a golden opportunity and drove his tractor to the water mark to assist in putting a line on the barge in an effort to secure it to the shore. Obviously this attempt to secure the barge was wholly inappropriate but in the exercise a large wave swamped the tractor which could not be re-started. The farmer publicised the grounding and the media paid it considerable attention. Many sightseers converged on the area and in the process trampled the farmer’s fi eld to the extent that he had to move his cattle to a neighbouring fi eld. This had a knock-on effect as the purpose of the adjoining fi eld was to grow the grass to use as silage to feed the cattle whilst waiting for the appropriate market. The farmer brought an action in the High Court in Dublin for salvage and claimed as out of pocket expenses replacement of his tractor, physical damage to his fi elds and loss of mar-ket for the cattle!

P&I ServicesOn the P&I side, Pandi Claims Limited, cor-respondents for the Club in the United King-dom, serves the needs of the Club and its mem-bers in a similar way. Not only is it involved in defending liability for cargo claims but also

becomes involved in cases where there is pol-lution and personal injury/loss of life. More recently it has seen an increase in the number of stowaways on board vessels coming to the United Kingdom. Although the regime for dealing with stowaways in the United King-dom is not easy from a shipping perspective, by maintaining good relationships with the Immigration Authorities, it frequently proves possible to land the stowaways and arrange for them to be repatriated. This is extremely intensive work, usually carried out in a very short period of time and often out of working hours.

A stowaway caseIn December 2003, a stowaway was reported to be on board a vessel en route from West Af-rica to Tilbury. Preliminary enquiries were put in hand by Pandi Claims Limited through the master to try to identify the stowaway and his country of origin. The vessel arrived at Tilbury on the evening of December 24th and the UK authorities were of a mind to defer dealing with the situation until after Christmas Day. They suggested that as the stowaway had been on board for a number of days without undue diffi culty to the master or crew, the situation should remain the same whilst the vessel was in port. Pandi Claims pointed out that it was not quite so attractive for a stowaway to go over the side of the vessel in the Bay of Biscay in late December compared with absconding on the dry land of Tilbury! This occurred at a time when the UK was very sensitive to il-legal immigrants and the threat of terrorism and when this was pointed out to the authori-ties they immediately found the necessary re-source to take the stowaway from the vessel. He was held in secure premises on shore and was successfully repatriated from the United Kingdom two days later. There was no delay to the vessel’s schedule as a result of the prompt action taken.

To sum upWherever and whatever the nature of a casualty or claim confronting the Club’s member in the United Kingdom or in the Singapore region, the W K Webster Group is able to respond and make available the appropriate resource to the Club and its member.

■

From left to right: Mr Frank Holden, General Manager, HCMS, WKWMr Mike Telford, Director, WKW/Pandi Claims Mr Steve Wareham (standing), Director, Pandi ClaimsMr John Redman, Director, WKW/Pandi Claims.

20

The Swedish Club Letter 2–2006 Navigational Hazards

20

■■ This short discussion regarding the un-safety of ports on account of ice is, if you will, a follow-up on our article on “The Hazards of Ice” published in The Swedish Club Letter No 2-2003. Every year the insurance industry experiences claims on account of ice. Trading wise the most affected areas are Northern Eu-rope, the Baltic Sea, Canada and the US. Ice and the P&I Clubs have a common history in that the P&I Clubs’ renewal date, the 20th of February each year, was, traditionally, the date on which the Baltic opened for trading again after the winter. The basis for the below dis-cussion is that of English law, unless otherwise stated.

Safe port – a matter of lawThe classic defi nition of what constitutes a safe port was provided in The Eastern City [1958] 2 Lloyd’s Rep.127: “A port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, be-ing exposed to danger which can not be avoided by good navigation and seamanship.” Safety is a question of fact, but the criteria which has to be applied in determining whether a port is a “safe port” is a matter of law.

Prospectively safeThe primary obligation on the charterers is to order the ship only to ports which, at the time when the order is given, are prospectively safe. The law does not require the port to be safe at the time of the vessel’s arrival, although if the port has become unsafe in the time since the order was given, the charterers will come under a secondary obligation to give fresh orders to another prospectively safe port. The charterers’ obligation is thus not a continuing obligation, but one that relates to the time of the order. Further, the obligation is not broken by a state of unsafety prevailing at the time of the order which will have been cured before the ship’s arrival.

In addition, a port must be prospectively safe for the particular ship. Some ships are built to withstand enormous amounts of ice, whilst other vessels need only encounter a lit-tle ice before being damaged. The condition of the vessel is also important when trading in icebound ports, for example, if it is in ballast or laden, or any other factors which will affect the effi ciency of the vessel going through ice. Ice may also have a serious impact on the sea-worthiness of the vessel. If icing forms on the

vessel’s structure above the waterline this may cause instability to the vessel and endanger her seaworthiness. If the vessel is trading in a cold climate for a while there is also a risk that ballast will freeze in. If so, the cargo lifting capacity will decrease.

A skilful master must take this into ac-count and make a reasonable allowance for this and charterers may consequently not get the full cargo loaded. Charterers could claim deadfreight if the vessel sails with partial car-go. However, if the master’s steps prove reason-able it is diffi cult to see that he can be criticised for this.

The approach and departure voyagesThe relevant period of time referred to in The Eastern City covers the entire period the vessel is using the port, from the moment of entry to the time of departure. In certain circum-stances, it is also extended to risks encountered in the approaches to a port, for example ice

preventing safe access. In exceptional cases, it may even cover dangers encountered quite far away from the nominated port (for example, if the port is some way up a river). However, it is essential that the danger is linked with the use of the nominated port. Owners are to remain responsible for the navigation of the vessel, but if ice interferes with the route to or from the port then it will interfere with the safety of approach and departure.

It was said in The Sussex Oak [1950] 83 Ll.L. Rep. 297,that “…it is immaterial in point of law where the danger is located, though it is obvious in point of fact that the more remote it is from the port the less likely it is to interfere with the safety of the voyage. The charterer does not guarantee that the most direct route or any particular route to the port is safe, but the voyage he orders must be one which an ordinary skilful Master can fi nd the way of making in safety.”

If there are other alternative safe routes to the port which are navigable without undue risk, the port is not unsafe. The same princi-ples apply on departure, when of course the changed condition of the ship (laden or bal-last) should be taken into account.

Use of the port The port must also be safe for the vessel to use. It does not have to be safe for continu-ous use, so long as there are adequate warn-ing systems in place to enable the ship to leave safely if a danger occurs. Charterparties often make express provision for the parties’ rights and obligations in ice conditions. The purpose of such ice clauses is generally to give the ship-owners/master additional rights in situations involving ice where the conditions are not so bad that the safety of the vessel is immediately threatened.

Standard ice clauses usually permit the master not to proceed when navigational marks have been withdrawn for the winter, the port is icebound or there is a risk that the vessel cannot safely enter or leave the port on account of ice. An ice clause will often overlap with the general provisions on safe ports. Ice clauses, as war clauses, are also put in place to prevent frustration of the charter.

In voyage charterparties, ice clauses vary in form and shape but the end result is much the same, which is to direct the master to seek alternative orders from the charterers if the loading or discharging port is inaccessible, or if the master considers it dangerous to enter or remain at a port due to ice.

Some forms say that the fi xture is null and

UNSAFE PORTSUNSAFE PORTSon account of

21

The Swedish Club Letter 2–2006 Navigational Hazards

21

void if the vessel cannot reach the load port due to ice (Gencon/Norgrain). Some stand-ard clauses also provide for the extra payment to the owners, usually at the demurrage rate. Time lost by travelling with icebreaker assist-ance and in convoy is usually for charterers’ account.

DelayA port may be rendered unsafe if obvious dan-gers or obstructions, such as severe ice, cause delays of suffi cient duration. It has been held that the delays have to be of such duration as to involve “inordinate delay”. The meaning of “inordinate delay” was explained by the Court of Appeal in The Hermine [1979] 1 Lloyd’s Rep. 212. It must be such a period of delay that would frustrate the charter. A danger or obstruction which results in a delay to the ship of any shorter duration will not render the port unsafe.

Good navigation/seamanshipThere are dangers of some sort at almost all ports, but dangers which are avoidable by ordi-nary good navigation and seamanship will not render a port unsafe. Conversely, if more than ordinary skill is required to avoid danger the port or place may not be safe. If the port turns out to be unsafe the owner has a right to refuse to proceed (this also follows from Scandina-vian law e.g. Swedish Maritime Code, Chapter 14 section 65).

In the case of time charters, the charter-ers must cancel the original nomination if it turns out that, while the ship is en route, the port they have nominated has since become unsafe. Similarly, if a subsequent state of un-safety arises when the ship is at the port but while she may still avoid the danger by leaving, the charterers must then order the ship out of the danger and give the owners a new nomina-tion. If the master elects to force ice, instead of waiting for icebreaker assistance, charterers will not be liable.

Conditions at a port, or the information provided about a port, may be such that the standards of good seamanship require the master to take the initiative to seek out his own local information and forecasts. Such advice could normally be found either from available nautical handbooks, Admiralty Pi-lots, the agent, the Port Authority or any other likely source, like the BIMCO website. The nautical aspects are deemed to be within the shipowner’s domain of knowledge, and if so, consequently the shipowner usually has to

carry the full liability for the damage.If more than ordinary skill is required to

avoid a danger the port or place may not be safe. On the other hand, an error made by a competent (or at least ordinarily competent and skilful) master in an adequate port system will not make the charterers liable, for exam-ple, if the master makes an error in relation to the available icebreaker assistance, the charter-ers would not be liable.

By its very nature, ice is constantly chang-ing and, as such, it is an unpredictable phe-

nomenon. It is not always possible to predict with certainty the severity of ice. Relevant factors, however, are the salinity of seawater, wind, sea state, and currents. Even so, ice con-tinues to present diffi culties, even to experi-enced masters with up-to-date information on ice conditions.

If damage on account of ice is feared, a crew is best advised to document the situation with photographs or video. Damage typically occurs on the inbound or outbound voyage and the argument frequently arises whether the vessel should have waited for icebreaker assistance. A port which would naturally be icebound for certain months of the year is not necessarily an icebound port within the mean-ing of an ice clause (nor an unsafe one) if it is kept open by icebreakers.

Chain of causationIt is frequently argued by charterers that al-though the port was unsafe, the damage suf-fered was caused, not as a consequence of the port being unsafe, but by the negligence of the master; he should have noted the danger him-self and refused to enter.

Under English law, it is necessary to show an unbroken chain of causation between the order to go to a port and the damage. In certain situations (very obvious unsafety) the master may be obliged to do so - or else, if the ship is damaged, owners will not be entitled to claim against charterers. In other situations, how-ever, the master is entitled to proceed on the assumption the charterers have complied with their obligations as to safety, and if the master acts reasonably, even though mistakenly, in the situation confronting him, it is unlikely that his actions will be held to have been the ef-

Tony SchröderClaims Executive

Team Asia

fective cause of the damage (The Stork [1955] 1 Lloyd’s Rep. 349).

The same principle applies where the master’s fears are allayed by the charterers or their agents. Under English law, the fact that a vessel has agreed to proceed into an ice area (e.g. Shelltime clause 4) does not mean that the owners have waived their right to claim for any damage caused by ice, albeit this is largely dependent upon the wording of the contract.

A typical scenario arises where a vessel has been ordered to a port where there is ice and, as a consequence, she suffers damage to her propeller, rudder or hull. Usually there will be a claim for both subsequent repairs and loss of hire. A performance claim may also fol-low if the vessel has been forced to continue trading with a damaged but still operational propeller, albeit at reduced revolutions. In worse cases even the main engine might have suffered damage due to stresses and overload getting through the ice. Claims relating to engine damage, however, will normally only succeed if it can be proven that the engine has been overstressed to avoid a danger, typically grounding.

Warranted safetyUnder English law charterers may even be in breach despite their lack of knowledge as to the unsafety of the port or berth. Their order must be to a port which is in fact prospectively safe at the time the order is given and not merely to a port which they have no reason to believe is prospectively unsafe.

In Scandinavia it is more probable that the Court would require negligence on part of the charterer for him to be in breach.

A third possibility – “simple bad luck”Any unsafe port case on account of ice will turn on fi ndings of fact. The onus of proving that the port was unsafe on account of ice lies with the shipowner. However, it does not nec-essarily follow from proof of the damage and the fact that the shipowner exercise skill and care that the port is unsafe.

As pointed out in The Mary Lou [1981] 2 Lloyd’s Rep. 272: “…care and safety are not necessarily the opposite sides of the same coin. A third possibility must be taken into account, namely that the casualty was the result of simple bad luck.”

■

PHOTO: THE SWEDISH CLUB

22

■■ The Swedish Club is one of very few marine insurance companies that offer a range of products broad enough to cover most of the needs of ship-owners.

We will soon complement the products we have by adding an insurance that specifi cally targets the

needs of shipowners with newbuildings on order. Our fi rst contact with owners has traditionally been when they have started to look for suppliers of H&M, P&I and FD&D insurances. We do in some cases cover FD&D for newbuildings and for the crew whilst travelling to and from the shipyard just prior to delivery.

We feel that owners need to start looking at their insurable interests long before delivery, as there are risks relating to the newbuilding that could affect owners adversely. Only a few owners currently do this.

Our Newbuilding Risks Insurance is one product and it encompasses three areas:

1. Cover for liabilities in respect of superintendents and other shipowners’ personnel attending newbuildings.

This insurance includes liabilities under the terms of the employment contract to pay damages or compensation for personal injury, illness or death of the superin-tendent whilst attending the NB site or travelling to and from the site. < Hospital, medical, repatriation, funeral or other expenses necessarily incurred

in relation to the superintendent whilst attending the NB site.< Legal liabilities, whether statutory or framed in tort, as well as approved

contractual liabilities and legal and other costs incurred to protect or defend against recoverable liabilities.

< Cover for personal injury liabilities and liabilities to third parties due to the acts of superintendents/personnel.

< The limit of the cover is USD 6 million for each accident or occurrence.< Deductible USD 5,000.

2. Cover for the fi nancial loss a shipowner will have if the vessel on order is not delivered or is delayed

This cover can be tailor-made to encompass only non-delivery or to include dif-ferent aspects of physical damage and/or other events resulting in a delay of the delivery of the vessel.< Bankruptcy of the shipyard can also be covered, as can political risks.< The value of a vessel might have risen during the time between signing the

contract and the actual delivery. If the vessel is lost prior to delivery, own-ers will only receive their down-payments back. Any increase in the price of newbuildings or in freight rates is not insured. If a vessel is built on the back of a charter contract, the charterers will be able to cancel the contract and the owner will loose out on the revenue generated by the contract. The cost of acquiring similar tonnage will in most instances, mean additional costs for shipowners. The same principle applies for linear operators, as lead times and costs to fi ll the gap for a vessel that is not delivered or delayed can be substantial.

< Limit of cover – between USD 500,000 and USD 5 million, but can be higher and can be variable.

< The cover can be extended to include physical damage to the vessel, delayed delivery and insurance of refund guarantees.

< There will be limited capacity for this product as the risk for a total loss is considerable in certain areas of the world, due to the risk of earthquakes and severe weather. This means that we will have to limit the number of risks writ-ten in a certain yard, area or region. Once the limit has been reached, we may have to decline cover or revise premiums to properly refl ect the aggregation of risk.

3. Cover for legal disputes relating to the newbuilding contract.

This is a traditional FD&D cover for newbuilding disputes.■

■■ The P&I cover that can be offered by a club in the Internatio-nal Group is ultimately regulated by the Poo-ling Agreement, “the Pool”, in which the clubs in the Group share certain layers of the P&I risks they insure. When agreeing to share risks, it is natural that only agreed risks can be shared, that the risks are “poolable”, and this has an effect on what type of cover can be afforded.

Many of the International Group clubs have however be-come aware of needs for types of cover that borders to or are closely linked to the P&I cover, but which risks are not “poo-lable”. Several clubs offer, therefore, additional or extra cover for certain risks. The clubs underwrite these risks themselves, with or without reinsurance, with the result that the clubs offer different types of covers in this respect.

The P&I coverThe key word in P&I insurance, “liabilities”, denotes legal liabilities, i.e. liabilities that follow from shipowners’ underta-kings under contracts or liabilities that follow from applicable mandatory law. The point of departure for any P&I risk is furthermore that the shipowner is covered in respect of lia-bilities incurred by him in his capacity as owner, operator or charterer of the entered ship; as opposed to being a shipowners’ general liability cover.

As regards liabilities in respect of persons, the P&I insu-rance accordingly covers legal liabilities that arise as a direct consequence of the operation of the entered ship. Consequent-ly, liabilities in respect of persons during newbuildings are excluded from P&I cover.

Shipowners, however, often provide crew for a new ship prior to taking over the ownership (during building or when taking delivery of the ship) and the crew then normally signs on under the terms of the crew contract, under which the shipowner is liable. What is more, liabilities towards other personnel attending at the building site, superintendents, are also excluded from P&I cover. This is also the case for liabili-ties to third parties, such as the yard, that are incurred by the

The Swedish Club Letter 2–2006 Insurance

2222

New Insurance for Newbuildi

Cover for liabilities in respect of superintendents and other shipowners’ personnel attending at newbuildings

Annica BörjessonClaims Executive

Team Göteborg I

Tord NilssonArea Manager

Team Göteborg I

9 continues on page 24

1

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■■ Traditionally, cov-er has been available from the insurance market for:

1. The consequences of physical dam-age to the vessel under construction or to the shipyard or subcontractors’ facilities. The indemnity payable in event of loss would be loss of future charter hire or profi t, or increased cost of replacement.

2. Loss of stage payments paid into the shipyard as a result of a failure to honour a bank guarantee following cancellation of the shipbuilding contract.

Recent developments both in the shipping and shipbuild-ing industries and in the insurance market, have made this whole subject more interesting.

Industry DevelopmentsShipyard order books in most of the major shipbuilding na-tions are full until 2009 or beyond. Slots for newbuildings in shipyards have become an increasingly valuable commodity that can be traded in their own right. Newbuilding values and contract prices have increased steeply.

Shipowners with ships on order for delivery in the next two or three years should ask themselves the following questions:l What will my newbuilding be worth at current prices on

delivery, either to me or to another owner?l Is the shipyard required to deliver a replacement vessel if

the cause of non-delivery is force majeure?l Could the delivery of my vessel, or series of vessels, be af-

fected by an event that occurs even before the keel is laid for my fi rst vessel?

l What would be the consequences if the newbuilding is not delivered as specifi ed in the terms of the building con-tract?

- Charter cancellation- Loss of profi t on anticipated sale- Loss of “embedded value”/overvalue in current contract- Increased cost of replacement for the vessel- Loss of “non–contractual expenditure”, such as legal ex-

Cover for the fi nancial loss a shipowner will have if the vessel on order is not delivered or is delayed

ngs

■■ The Club may, as a service to future P&I and FD&D members, insure the newbuilding contract against FD&D risks. This FD&D cover is provided on an ad hoc basis and is subject to special condi-tions and entails that the member will enjoy legal support as well as cover for legal costs in case there will be a dispute under that contract. The member will be greatly assisted, when as-sessing the risks of the newbuilding process, to know that he has access to legal expertise in the event of a dispute. In addi-tion, the cover enables the Club and the member to develop an early business relationship.

The newbuilding contract is in essence a sales contract between a yard, (the builder) and a buyer. One fundamental question under this contract is at what point of time title is passed. Usually, title (and risk) in the construction remains with the builder until delivery, but occasionally does the con-tract provide that title is passed to the buyer after the fi rst instalment has been paid. In all circumstances, the buyer is re-quired to pay huge sums in advance, and the buyer will clearly be concerned about the extent to which his assets are protected in the event that the vessel is not delivered. The Club would like to take this opportunity to address two questions that are frequently raised.

1. What are the buyer’s rights to damages in the event of non-delivery due to total loss of a ship during the construction process?

Where there is a total loss during the construction this will most likely mean a complete end, frustration, to the newbuild-ing contract and the contract itself is likely to provide for the mechanism by which it is to be terminated and what the im-plications are. Under most contracts, the buyer will then be entitled to have all the instalments repaid to him. However, re-paying the instalments will usually be the limit of the builder’s liability and if so a buyer can obtain additional insurance to get protection against the effects of non-delivery. In the absence of contractual provisions, the result under English common law is the same in that the newbuilding contract becomes frus-

2 3 Newbuilding contracts from an FD&D perspective

Anders LeissnerFD&D Manager

Team Göteborg III

9 continues on page 24 9 continues on page 25

Tord NilssonArea Manager

Team Göteborg I

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shipowner through these persons.

Additional cover requestedThis is, therefore, an area where additional cover is often re-quested. The Swedish Club offers, as do most of the other Group clubs, what is known as “Pre-Delivery Crew Cover”, which extends the P&I cover towards crew for a period prior to the delivery of the ship. The Swedish Club also offers “Crew Familiarisation Cover”, which is an additional cover for lia-bilities arising from the presence of crew and other shipow-ners’ personnel onboard, i.e. liabilities towards third parties, on ships for which the member has not yet taken over the ownership. The observant reader will now have noted that liabilities towards other shipowners’ personnel, i.e. other than the crew, are not covered under either of these extra or ad-ditional covers.

New Swedish Club insurance productOwing to an increasing demand and in order to avoid poten-tial gaps such as the one just identifi ed, The Swedish Club has developed a new product to provide cover for liabilities towards and in respect of third party liabilities incurred by the shipowner through superintendents and other personnel instructed to supervise a newbuilding at the yard. The article “New Insurance for Newbuildings“ in this newsletter gives further details and describes how the product is designed to be combined with Newbuilding FD&D and the Builder’s Finan-cial Risk cover. The cover can of course also be underwritten separately.

The cover in respect of persons is modelled as an additio-nal P&I cover and thus it provides the additional cover that is needed, while remaining a practical and logical solution to the demand. This means that liabilities in respect of super-intendents and other personnel attending a newbuilding are covered to the same extent as the crew are under ordinary P&I insurance, with a limit of USD 6 million for each accident or occurrence.

The risk assessment, the claims handling and the under-standing of the risk are very similar to those of the ordinary P&I cover, which we consider to be a major advantage. And, since the P&I insurance is an insurance of liabilities, it follows that there is no need for enumeration and the cover is therefore consistent. We believe that this cover will serve our members well in preventing gaps between different types of insurance and in providing a coherent solution.

Further information can be provided by our underwriters on request.

■

penses, fi nancing expenses, corporate establishment ex-penses, superintendency costs.

Insurance Market DevelopmentsThe insurance market has become more fl exible, and adapts to the needs of its clients. We will focus here on a few of the areas that prospective owners may not have considered, or that they may have considered to be unavailable:

1. Insurance for physical damage coverage is traditionally purchased for the latter stages of the construction of the vessel. The values now and the values that are potentially at risk in shipbuilding contracts have led many shipowners to consider purchasing more comprehensive cover, both in terms of conditions and period.

Destruction of a shipyard today by an earthquake or hurricane, for example, may result in the non-delivery of the buyer’s vessel contractually due in three year’s time. The fi nancial loss sustained will be no less painful simply because it was caused by an event that occurred two years before the keel was due to be laid. Consideration should be given to purchase of cover at the point when the exposure is identifi ed, not when the physical asset becomes visible!

2. Non-delivery may not be caused by physical perils. Many people can remember the disruption to ship-building contracts caused by the break up of the former Yugoslavia in the late 1980s, and by the subsequent problems in the Russian economy. These two factors re-sulted in a number of contracted vessels remaining un-delivered. More recently, the fi nancial problems of some Polish shipyards have resulted in contractual defaults. It has traditionally been possible to purchase coverage from the insurance market only for the loss caused by the non-honouring of the state or national bank refund guar-antees that support the shipyard’s responsibility to repay stage payments when a contract is cancelled. New develop-ments in the market now mean that it is possible to extend this type of policy in a tailored manner to cover also the overvalue and/or “non-contractual expenditure” caused by such an event. It is thus possible to come close to locking in potential profi ts or avoiding the potential of unrecover-able losses.

3. It may also be possible to insure refund guarantees that are provided by private banks, as the availability of effective credit insurance is much improved.

4. Alternatively, if the credit rating of the counterpart makes the inclusion of credit risks impossible or unrealistically priced, coverage may be bought to indemnify losses re-sulting from contract cancellation caused by specifi ed force majeure perils. These will commonly include most of the catastrophic perils that may have a dramatic and wide-ranging effect on the shipyard’s ability to deliver, such as war, embargo, epidemics, destruction of infrastructure, etc.

■

1Cover for liabilities in respect of superintendents and other shipowners’ personnel attending at newbuildings

9 continued from page 22 2Cover for the fi nancial loss a shipowner will have if the vessel on order is not delivered or is delayed

9 continued from page 23

The Swedish Club is well-placed to assist members with any of the risks described in this article, either through its

own internal capacity and facilities, or through our excellent connections with other specialist markets.

25

The Swedish Club Letter 2–2006 Insurance / News from Asia

25

trated. However, whether or not instalments should be repaid will be subject to the Court’s decision to allow the builder to retain expenses incurred.

In the event the contract is not terminated immediately but instead continues to run beyond the agreed delivery date, the buyer will usually be entitled to liquidated damages, which is a pre-estimation of the buyer’s losses. The usual standard form newbuilding contract will entitle the buyer liquidated damages up to a certain number of days, after which he will have the right to terminate the contract. If the buyer exercises that right, he will normally lose his entitlement to liquidated damages that have accrued, and instead he will get a refund of the pre-delivery instalments that he has paid up to the date of termination. However, force majeure and other special cir-cumstances can permit the delivery date in the contract to be extended and in that case the builder will not be liable to pay liquidated damages.

Newbuilding contracts usually provide that the builder must insure the ship during the construction process against catastrophes such as earthquakes, fl ood, fi re, etc. The buyer may wish to ensure that he is entitled to receive directly the insurance proceeds up to the amount of his instalments, in particular if there is a situation where the builder are in fi nan-cial diffi culties or if the builder fi les a counterclaim against the buyer. In that case the buyer should ensure that the benefi t of the builder’s policy is assigned to the buyer, alternatively the buyer should be named as co-assured in the policy.

If the total loss is due to negligence or a breach of contract by the builder and if the contract does not limit the buyer’s compensation to repayment of the instalments (or liquidated damages), the buyer may be entitled to sue the builder for damages corresponding to the buyer’s actual losses that were reasonably foreseeable at the time of the contract. Presumably, these would include additional costs (if any) of having the yard or another yard build the same ship e.g. if the cost has gone up and the loss in the rate of hire that the buyer might have charged for the use of the ship in the market.

2. How does a buyer secure pre-delivery instalments that are paid to builder?

The pre-delivery instalments that the buyer pays to the builder during the construction process are normally secured by a “re-fund guarantee”, which is an undertaking from a bank or other security provider that it will make the payment on the builder’s behalf if the builder should fail to do so. This guarantee often includes accrued interest. The buyer should seek to obtain an “on-demand” guarantee, since he will otherwise need an arbitration award or court judgement in order to invoke the guarantee.

Standard contract forms do not normally contain provi-sions that require the builder to provide a refund guarantee, and it is therefore often necessary to insert this as an adden-dum.

■

3Newbuilding contractsfrom a FD&D perspective

9 continued from page 23

■ ■ The Götheborg has fi nally arrived at her desti-nation – Guangzhou. On July 18th 2006 a crowd of over 3000 people were waiting on the passenger pier in Guangzhou to welcome and celebrate the arrival of the ship. The masts of the ship fi rst appeared over the horizon at about 11.00 am. On board were their Majesties, the King and Queen of Sweden and other dignitaries. The ship sounded eight cannon shots and the arrival was celebrated by people dancing, singing and applauding, amid scenes of great jubilation.

The ship did not berth at the terminal from which the sailing ship The Götheborg departed 264 years ago, because the confi guration of the Pearl River bank has undergone changes and the old terminal area is no longer navigable. Götheborg has been at sea for over nine months, calling at eight ports in Europe, South America, South Africa and Australia en route. She departed from her home port of Göteborg, Sweden, where The Swedish Club is located, on October 2nd 2005.

The City Government and Guangdong Provin-cial Government staged a number of grand welcome ceremonies and celebrations during the week. These included a welcome ceremony on the ship’s arrival at Guangzhou; a dinner party for their Majesties, the King and Queen; a dinner banquet for the sailing ship Götheborg attended by 800 people including their Majesties, the King and Queen; an open-air concert at night on the bank of the Pearl River by the ship, etc. The city maintained a festival atmosphere for the entire week.

The ship remained in Guangzhou for a month. She was open for public visits, but the number of vistors per day was limited to 5000. Tickets sold out quickly.

Just as shipowners are increasingly trading with China, so too The Swedish Club has been very suc-cessful in recent years in attracting new business from China. The visit of the Götheborg served as a reminder to the people of China of a long-established trade re-lationship that has always been mutually benefi cial to both countries.

■

Newsfrom

AsiaThe Götheborg arrivesin Guangzhou

Ruizong WangManaging Director

The Swedish Club Hong Kong Ltd.

26

■■ Is the turbocharger a fragile and underde-veloped piece of machinery that is just waiting to blow up or is there something that is killing turbochargers?

Turbocharger failure is the number one main engine claim for the Club, measured both as frequency and cost. The Club has ex-perienced 129 signifi cant cases of turbocharger failures in the period 1995-2005, at a cost of more than USD 10,000 for each. The total claims cost amounted to nearly USD 21 mil-lion.

An examination of the Club’s casualty re-ports shows that approximately 40% of the turbocharger failures are caused by the turbo-charger itself, while the rest are consequential failures.

Failure causes

Foreign Object (21%) Foreign object damage is more common on medium-speed engines due to their inherent design: such engines have more moving parts, a greater level of vi-bration, and higher exhaust temperatures than slow-speed engines. The lower frequency of failure in slow-speed engines may also result from most of these engines being equipped with a mesh that prevents foreign objects enter-ing the turbocharger. Approximately 60% of the failures related to foreign objects are caused

The Swedish Club Letter 2–2006 Loss Prevention

26

causes listed above, but for which it is diffi cult to de-termine the exact cause.

Unknown (29%) There is no information regard-ing the cause of failure in almost 1/3 of the cases. This may be due to the ves-sel owner not presenting a suspected cause, or there may be no informa-tion available.

Time of failureThe total running hours is given by the total running hours of the engine, and this reveals little about the history of the turbocharger. This makes it diffi cult to analyse the time of failure accurately.

Most failures occur between fi ve and ten years of operation – a period that coincides with the special survey. It is possible that ship-owners delay scheduled maintenance of the turbocharger until after a scheduled special survey.

Expensive claims can arise due to remote locations or due to other aggravating circum-stances. The vessel might need tug assistance, or spare parts may need to be sent to an iso-lated area. A sensitive cargo might deteriorate due to delays or loss of power.

■

by main engine debris, whilst the origin of the foreign object is unknown in 40% of cases.

Overspeed (11%) This is a fairly common cause, and it often originates from a scavenge fi re or from a heavy engine load in adverse weather. Overspeed can lead to mechanical failures such as bearing failure or damage to turbine wheels

Poor Maintenance/Faulty Installation (9%) A fair number of failures were caused by poor maintenance or faulty installation. This may be the result of hiring non-skilled labour or a lack of supervision during maintenance work. Turbochargers running for more than the pre-scribed number of hours has not been included in this category.

Latent defect (7%) It is very diffi cult to dis-tinguish between latent defects of the material or construction, and fatigue. The process often involves many people and laboratory testing. In some cases in which it has been alleged that a latent defect caused the failure, the operating hours of the turbocharger were very high, and the cause may well have been fatigue or ex-ceeded running hours for vital components.

Lube oil system (8%) Two types of lube oil failures were identifi ed during the study: con-tamination and pump failure. Lube oil con-tamination originates from the use of inferior bunkers, while no explanation was found for the pump failures.

Bearing failure (4%) Bearing failure is rare. The main reason for bearing failure is be-lieved to be inferior quality replacement parts or the use of non-genuine parts.

Other causes (12%) This category con-tains cases whose cause is alleged to be, for example, corro-sion, thermal stress, fatigue, and exceeded running hours. Such cases may be attribut-able to any one of the

turbochargers?What’s killing

PHO

TO: TH

E SWED

ISH CLU

B

Anders Hultman

Loss Prevention, Project Coordinator

27


27

Turbocharger rotor damaged by foreign objects.

Newsfrom

Piraeus

Clas RydénGeneral Manager

The Swedish Club Greece

Summer wins

■ ■ I am writing these greetings from Greece, where the Board has gathered at the Royal Olympic Hotel, next to the Athens Gate and overlooking the temple of Zeus. We will be holding a reception after the board meeting for members and for potential future members .

We have enjoyed a good summer, which started off with a very success-ful Posidonia. This was the fi rst time that The Swedish Club had an entry in the Posidonia Cup sailing regatta. The event took place in the Bay of Faliron outside Piraeus on May 30th. We were lucky to be able to race the Okyalos, a 49-foot racing yacht designed by Judel-Vrolijk. (Photos from the event can be viewed on our website “Out and About”.) With George Ertsos at the helm we won both races in our class. The Posidonia Cup is sponsored by Lloyd’s Register, and we received the cup at Lloyd’s Register’s reception at Astir Palace in Vouliagmenis the same evening.

The summer continued in a very positive way when Costamare’s latest newbuilding, the Cosco Hellas, came to Piraeus for the christening and mai-den voyage ceremony. The container vessel was at the time the biggest in the world, at 9,500 TEUs.

We are very pleased to welcome two new staff members to the Greek offi ce: Mrs Dimitra Ilia and Mrs Ma-ria Yiassa. (Please see Staff News on page 39). The number of members is steadily growing, as is the number of vessels and we will make sure that we maintain our high standard of service, expertly aided by Dimitra and Maria.

■

Loss Prevention /News from Piraeus

Facts· The Club experienced 129 cases of turbocharger failure between 1995-2005, at a cost of more than USD 10,000 each.

· The average cost per claim is approximately USD 163,000.

· 60% of failures result from consequential damage.

· Foreign objects entering the turbocharger is the most common cause of failure.

Ways to prevent failure· Preventing foreign object damage by installing a mesh

in the air/exhaust intake works well with slow-speed engines. This cannot be used on medium-speed engi-nes, however, as it degrades performance.

· Close attention should be paid to the engine and the turbocharger in heavy weather to avoid overspeed. Ensure that all alarm systems and shut-down systems are functioning.

· Follow the manufacturer’s maintenance and service instructions. Contact the manufacturers after change of address, change of ship management, etc., to ensure that they have the correct mailing address.

· Keep maintenance records up-to-date and perform service as scheduled.

· Ensure that fi lters and purifi ers for lubricating oil are in sound condition. Take samples of the lubricating oil. The quality of the oil should be carefully monitored and tested, and contaminated or poor quality oil should be changed before damage occurs.

· Use spare parts only from reliable suppliers.

28

The Swedish Club Letter 2–2006 The Swedish Ship Götheborg

Fremantle, Australia, May 13th – 25th 2006

The leg between Port Elizabeth and Fremantle was the longest, and nautically the most challenging, of the voyage to China. The ship made it through the “Roaring Forties”, the part of the Indian Ocean between latitudes 40° and 50° South, without any mishaps. This area is character-ised by strong western winds and is a real test for any ocean-going ves-sel. Captain Peter Kaaling and his crew succeeded in making a very fast crossing of the Indian Ocean, and arrived at Australia and the waters off

Fremantle a week ahead of schedule. The port call in Fremantle was exactly 400 years after the Dutch East India Com-pany made the fi rst historically documented jour-ney to Australia, in 1606. The visit started with an exciting meeting between an in-digenous Swedish Sami and Austral-ian Aborigines, the latter showing traditional dances, while the Sami presented gifts of Sami handcraft. The arrangements were very well received by the public and a total of 11,000 persons visited the ship in Fremantle.

The Swedish Ship

…

PHOTO: PER GROTH, WITH COURTESY OF SOIC

PHO

TO: PER G

ROTH

, WITH

COU

RTESY OF SO

IC

PHOTO: PEDER JACOBSSON, WITH COURTESY OF SOIC

In the previous issue of The

Swedish Club Letter (No. 1-

2006), we started to follow

the Götheborg on her jour-

ney from Sweden to China,

and our story ended in Re-

cife, Brazil, the day before

New Year’s Eve. We will now

continue to report from the

trip from Brazil to China.

Jakarta, Indonesia, June 18th – 28th 2006

Sailing was superb on the leg between Fre-mantle and Jakarta. The ship passed en route through the Sunda Strait, the world’s most pirate-infested waters with more than 100 attacks a year. The strait is also one of the world’s most frequented shipping lanes. The leg was sailed faster than expected, and the Götheborg anchored off Jakarta, in the “Thousand Islands” archipelago. Interest for the Götheborg in Jakarta, measured by the number of visitors and degree of media cover-age, surpassed all expectations. The ship was visited by more than 10,000 persons, in spite of the fact that it was open to the public for only two and a half days.

■■ The Swedish ship Götheborg is a replica of the historic East India-man merchant vessel Götheborg that foundered off the entrance to the harbour of the city of Göteborg on September 12th 1745. The idea of building a replica of an 18th century ship and sail her to China was born during the marine archaeological excavations of the wreck carried out between 1986 and 1992. It took more than ten years to build the Göthe-

borg. Building methods, handcraft techniques and materials from the 18th century have been used as far as possible. The ship was completed in June 2002, launched, and underwent sea-trials in her home waters and along the Swedish coast. She left Göteborg on October 2nd 2005 on her expedition to China.

28

29


Göteborg

Cádiz

Recife

Cape TownNelson Mandela Metro

Fremantle

Jakarta

Hong KongGuangzhou

Shanghai

now in China

PHO

TO: W

ITH

CO

URT

ESY

OF

SOIC

PHOTO WITH COURTESY OF SOIC

Guangzhou, China, July 18th – August 19th 2006

The Götheborg was once again escorted by the Navy, on its way out from Jakarta, through the Galatea Sound to the offi ng. The greatest challenge on the fi nal leg for China has been to avoid the tropical storms and typhoons that often hit the South Chi-na Sea during this season. The ship once more crossed the equator, which must be celebrated, of course, with a traditional bap-tizing ceremony, with a gathering in front of King Neptune and a bath of herring marinade! The passage in to Guangzhou took place in several stages. First stop was in Nansha, the outer harbour of Guangzhou, where she arrived on July 18th. The photo was taken when their majesties the King and Queen of Sweden embarked the ship in Nansha. In our News from Asia on Page 25, you can read more about the ship’s arrival and stay at Guangzhou.

Shanghai, China August 29th – October 29th 2006

On August 29th the ship sailed into the harbour of Shanghai, the fi nish of this long outbound journey. Shanghai and Göteborg, the ship’s home port, are sister cities and the Götheborg stayed in Shanghai until the end of October. The major part of this time was set aside for company events arranged by partners and sponsors of the expedition but it was also open to the public.

The stop in Shanghai meant a much needed oppor-tunity for an overhaul of the Götheborg. The daily wear and tear, the sun and salty splashes of water has taken its toll on the ship which has sailed the oceans for almost a year. Several weeks of maintenance and repairs will restore the Götheborg to its original state and get her ready for the long voyage back to Göteborg.

29

PHO

TO: W

ITH

CO

URT

ESY

OF

SOIC

30

■■ I am one of the few professional ships carv-ers in Europe and has been working on the Götheborg project for over fi ve years, initially researching the histori-cal background to decorative work for the ship, then designing and carving the decorative work, including the lion which is now in place. I also carved the fi gurehead for the Swedish school ship Gunilla and worked on the reconstruction of the Jenny Lind fi gurehead.

Ashield bearing the emblem of the Swedish East India Company forms the centre pieces of the Götheborg’s tafferel. The anagram of the Swedish East India Company appears in many forms, one of which is against the rays of a setting sun, which can be seen radiating behind the two fi gures facing the shield, arranged in a pose that suggests a fanfare to the company amidst the dawning of a new age which was very much a symbol of the times.

Greek mythology has been the source of inspira-tion throughout the ages and the two fi gures facing the shield come from this source, depicted here in the lively fl amboyant Baroque style, when such allegorical fi gures were a popular form of decoration with the many myths that had suitable salty tales to tell.

Triton – scary and helpfulTriton inherited some of his fathers powers and aided the Olympians in their war against the giants by frightening the enemy with the terrifying sound he could produce by blowing into his conch shell. He also appears in the legend of the Argonauts when he shows the sailors which route to

take in order to regain the Mediterranean, and so a useful fi gure to have on board.

The name Triton was often applied not just to a single divinity, but to a group of beings, their upper half taking human form and lower half the tails of fi shes. They were the male attendants of Poseidon and often appear playing around him in the waves with their female counterparts the Nereids. It is in this form that the fi gure is de-picted, with a Nereid to the starboard side of the shield.

Links can be drawn between these fi gures and the mermen and mermaids of later legends where they both help and hinder seafarers, interweaved with stories akin to the Greek Sirens, who lured sailors onto the rocks with their song. The Ro-mans replaced Poseidon with Neptune riding in his chariot pulled by sea horses or hippocamps and carrying his trident.

The Nereids, daughters of Nereus and Doris, granddaughters of Oceanus, were a type of Nymph. These female spirits were believed to in-

habit various aspects of nature. In spite of their divine character, they were not immortal, living for a mere 9,620 years! But they were granted the privilege of remaining young and beautiful.

The fairy kingdoms of other folklore bear similarities to their role of inhabiting specifi c plants, fl owers and places.

The Nereids domain was the sea, Dryads were forest nymphs. Crowned with oak leaves they would guard the trees with an axe to pun-ish those that abused them. Certain areas such as sacred woods known


30

Mythological D ecorations with mBy Andy Peters

Ships carver

PHOTO: ANDY PETERS, WITH COURTESY OF BREAKWATER PUBLISHING AB

31


31

much symbolism

If you are interested in the story of the Swedish East India Company (foun-ded in 1731), we can recommend the book The Great East India Adven-ture written by Robert Hermansson. It is available in Swedish, English and Chinese and you can read more about it on www. breakwater.se

as Groves were inhabited by Alseids specifi c trees also had their nymphs such as the ash trees which were inhabited by Meliads.

The air is said to be full of these divine spirit beings. In Shakespeare’s Tempest Prospero draws upon their powers: “Nymphs called Naiads of the windring brooks / With your sedged crowns and ever-harmless looks”. They were harmless until roused to protect their domain, or in matters of love. In the story of Hylas, a servant of Hercules was sent to fi nd water. He came upon a spring where Naiads were bathing. Captivated by his beauty they lured him into the water and carried him away to their world.

The most beautiful nymphsAmong all the nymphs the Nereids were the most beautiful. The Nereid Thetis was sought in marriage by both Zeus and Poseidon, but it was de-clared that she would bear a son more powerful than the father. Poseidon then sought to marry another Nereid called Amphitrite instead, whilst Zeus arranged for her to be married to a mortal. Despite her protests at such a match being beneath her dignity, she was married to Peleus and bore him a son, Achilles. She dipped him in the river Styx to make him invulnerable to mortals and thereby escape his destiny all except the heel by which she held him.

Nereids are sometimes described as personifying the countless waves of the sea where they live attending to Poseidon. They too possess some of his powers in the ability to calm storms by blowing softly into their conch shells.

As the tafferels and areas permissible for carved work were reduced, fi gurative work was replaced with other forms of decoration, such as scrolling acanthus, which also began to develop into lighter forms. At the point where the tafferel turns into the quarter piece there are two C scrolls, which become a key element in the emerging rococo style, where they were inverted to produce the distinctive asymmetrical forms. The

use of decorative motifs is continued across the roof of the quarter galler-ies, where scale patterns are framed in scroll work and and palm leaves, giving a hint of the exotic orient with whom the ship would trade.

The C scrolls end in undulating foliage reminiscent of seaweed moved by water leading into the tail of a dolphin. This interweaving allows the composition to transform back to fi gurative work, where the dolphin becomes fully three dimensional as he wraps himself around the quarter piece from where he has a good vantage point.

These intelligent creatures have long been associated with the role of guide and companion to sailors. There are many legends where they have saved shipwrecked mariners, or those lost at sea themselves become dolphins.

In Greek mythology, as king of the fi sh they too attends Poseidon. When he sought to marry the Nereid Amphitrite, she was delivered to him by a dolphin, which in baroque art is depicted in this highly stylised thick lipped mythical creature, who’s fl exible form could be adapted to suite many decorative features, particularly as supporters to galleries and as fi gurative work to tafferels that had become too shallow to allow standing fi gures.

The tafferel is the name given to the large panel at the top of the stern. In the early 1700’s attempts were made to reduce the amount of carved work, partly as a cost cutting exercise, and partly to increase the effi ciency of the ships. This led to the introduction of a cove line thus reducing the depth of the tafferel. Carved work was permitted above this line, whilst below the decoration is painted.

■

This article is reprinted by courtesy of Breakwater Publishing AB. It was fi rst

published in the Götheborg Courier No. 5, June 2006.

PHOTO: ROBERT HERMANSSON, WITH COURTESY OF BREAKWATER PUBLISHING AB



■■ ST Education & Training Pte Ltd. (STET), the parent company of the Club’s Maritime Resource Management (MRM) training partner in Singapore, STET Maritime Education Pte Ltd, has embraced the MRM concept, making it the company’s governing corporate culture. A number of company di-rectors and managers have undergone training in MRM during 2006, with the objective of making MRM the core of STET’s culture. The intention is that senior management will cascade MRM principles and infl uence staff

through personal commitment and practice in their day-to-day operations.

Mike Chen, CEO of STET, says: “Firstly, we identifi ed our core values: excellence, loyal-ty, innovation, teamwork and ethics (ELITE). These values should leaven all our activities, both internal activities and activities directed at our customers. The recognition of ELITE values, however, is only the fi rst step, propa-gating these values is another step. We have adopted a culture and a way of working built upon the MRM concept, in order to commu-nicate, demonstrate and reinforce the ELITE values.”

“STET must have an organisational cul-ture that helps us to reach our goals, if we are to sustain our leading role in our core compe-tency areas and broaden our scope to embrace

Resource ManagementSteps Ashore■■ Resource management training started in the aviation industry in the early 1980s as a means of improving fl ight crew cooperation and minimising the risk of aircraft accidents. The Swedish Club embarked on a project some ten years later to develop a resource management training programme aimed at the shipping industry. The project led to the development of what is now called “Maritime Resource Management” (MRM). The results of breakdowns in crew teamwork and communication are dramatic and highly visible in shipping, as they are in aviation. The results of poor management and staff performance, in contrast, affect profi ts and productivity in many shore-based industries, and these results may be more diffuse and the causes considered more diffi cult to deal with. It is our view though, not least as a consequence of globalisation and increased competition, that companies in many other industry sectors will be forced to search for new tools to retain competitiveness. Effective resource management will be one of these tools, and the most provident companies in any industry are likely to lead the way.

For The Swedish Club, resource management training of seafarers will continue to be a primary objective, but bringing MRM principles and tools ashore, not least into our member companies, would be a most welcome deve-lopment.

(See also the article above describing STET.)■

Wallem Maritime Training Centre Qingdao Receives MRM Licence■■ Wallem Maritime Training Centre Qingdao (WMTCQ) in China joined the group of MRM licensees in September 2006. WMTCQ is a result of the joint venture between Cosco Qingdao and Wallem Ship Management. WM-TCQ is situated in the Laoshan Mountains, close to the major port of Qingdao, and is headed by Training Director Captain Fraser Betts. WMTCQ offers many other courses for seafarers in addition to the MRM course, including courses in maritime English. We wish WMTCQ good luck with its training activities and look forward to successful cooperation.

■

ST Education & Training Adopts MRMas the Cornerstone of its Corporate C

Martin HernqvistManager

Maritime Resource Management

new initiatives and expanded competencies. We embrace and believe strongly in the MRM concept, and we have established important tenets that must be followed.”

The tenets of STET’s organisational cul-ture are:

1. Individuals have a responsibility to create, maintain and support a blame-free culture with an open climate; ensure that commu-nication is effective and closed-loop; strive and maintain a common STET mental pic-ture, and challenge concepts that are out-side the limits of STET’s common mental picture.

2. Individuals are honest with colleagues and customers; base actions upon mutual re-spect and trust; strike a balance between

MRM training is now available at 21 training providers world-wide.

The Swedish Club Letter 2–2006 MRM

32

Integration of Göteborg Team I and II■■ As previously advised on the Club’s web-site, we have integrated Team Göteborg I and Team Göteborg II to form the new Team Göte-borg I. The change in organisation took effect on September 1st 2006.

The integration of the teams has been driven by the Club’s strategy to constantly improve the services available to members in all respects, from underwriting to technical as-sistance and claims. The formation of the new team provides better opportunities to serve our members and to develop new business in markets where our activities have been low. In addition, we believe that resources will be used and managed more effi ciently, to the benefi t of our members.

The new Team Göteborg I is primarily re-sponsible for Scandinavia, Belgium, France, Switzerland and Turkey.

The Area Manager for Team Göteborg I is Tord Nilsson. Birgitta Hed, formerly head of Team Göteborg II, has been appointed Deputy Area Manager with special responsibility for claims services within the team.

The members of Team Göteborg I are:Tord Nilsson, Area Manager

Birgitta Hed, Deputy Area Manager

Patrik Almström, Claims Executive, Collision/Salvage

Ingrid Andersson, Hull Claims Adjuster

Clas Brantmark, Senior Advisor

Annica Börjesson, Claims Executive, P&I Legal

(on a six month assignment with Team Asia from September 1st 2006)

Ingalill Dahl, Underwriting Assistant

Ann Duff, Underwriting Assistant

Daniel Eriksson, Claims Executive, P&I Legal

Fritiof Granberg, Hull Claims Adjuster

Anette Gustafsson, Underwriting Assistant

Anders Holmberg, Claims Executive, P&I Nautical/Pollution

Peter Jacobsson, Underwriter

Marie Johansson, Team Assistant

Björn Josefson, Credit Control

Örjan Karlsson, Claims Executive, Collision/Salvage

Marianne Oldemark, Team Assistant

Cecilia Persson, Assistant Underwriter

Christina Zanini, Team Assistant

Claes Åman, Senior Staff Surveyor

ulture

Mike Chen, CEO of STET, uses MRM to strengthen corporate culture.

Wallem Maritime Training Centre, Qingdao, is beautifully located in the Laoshan Mountains.

the need for innovation and the constrain-ing wisdom based on personal experience; maintain fl exibility and are responsive to customer needs; encourage constructive criticism and derive appropriate lessons from it.

3. Individuals must ensure that we pull in the direction that STET is going; proceed with maximum effort to accomplish the task once a decision has been taken, ir-respective of differing personal views; see problems as challenges; give of one’s total commitment and dedication to the success of STET, and encourage oneself and others to venture forth.

4. Individuals must play a role in STET’s mar-keting effort, irrespective of the size of the

contribution. They have a responsibility to maintain a positive attitude and to project their professional passion to:

· offer a fair share of work and accept full responsibility for that work.

· deliver the highest standard of service and participate as a team player.

· share their knowledge and experience freely and readily, and be prepared to em-bark on life-long learning.

· see obstacles as opportunities to learn and occasions to do things differently, and be personally responsible for updating their professional knowledge.

Mike Chen concludes: “Being successful in business requires the highest possible parti-cipation and contribution from all employees at all levels. We wish to nourish effi cient team-work and a work environment that is characte-rised by respect, creativity and open communi-cation. For us, as an MRM training provider, this is to practise what one preaches.”

■

The Swedish Club Letter 2–2006 MRM / Club Information

33

34

■■ As more and more communication is sent via e-mail, courts and arbitrators seem to be charged to decide an increased amount of disputes concerning the legal implications of e-mail correspondence. Inevitably, the question has arisen whether traditional legal requirements for documentation and correspondence can be met if the document or correspondence is electronic, i.e. an e-mail. Are the present laws obsolete and need to be adjusted to fi t in with modern means of communication? Given two recent judgments from English courts the answer to that question is not necessarily yes.

Does it matter to which company e-mail address a notice regarding commencement of arbitration is sent?

This question was answered by The English High Court in The “EASTERN NAVIGATOR” [2005] EWHC 3020. The owners had commenced arbitration proceedings under a NYPE char-terparty pursuant to the LMAA Small Claims Procedure by way of sending a notice by e-mail to the charterers’ e-mail address as it appeared in Lloyd’s Maritime Directory and on the charterers’

homepage. The charterers disputed that the notice had been properly served on the basis that the e-mail address belonged to the charterers’ department for cargo bookings. It was alleged that the clerical staff who received the e-mail (and subsequent e-mails from the Tribunal once the arbitral proceedings had been commenced) ignored the mail as spam and it was claimed that they had no reason to pay attention to the mail as they were under the impression that serious

legal correspondence should go through appropriate channels which, the charterers alleged, did not include the relevant e-mail address.

The court made a judgement in owners’ favour holding that this type of notice (and other types of notice) may well be served by way of an e-mail. Further, as the notice was sent to the address that was held out to the world as charterers’ only e-mail address, service had effectively been made. However, in reaching its conclusion the court made some remarks that deserve atten-tion. It was confi rmed that merely clicking on the “send” icon does not automatically amounts to “good service”. It is also required that the e-mail is despatched to the intended recipient and further that it is not rejected by the system – something that may be more diffi cult to prove for an e-mail than it is for a telefax. Furthermore, the court stated that it may be circumstances where there are several e-mail addresses for a number of different divisions of the same company where dispatch to a particular e-mail address is not good service.

How can there be a valid signature in an e-mail?

This issue was discussed by the by the English Court of Appeal in METHA v J PEREIRA FERN-ANDES SA [2006] EWHC 813 (Ch). The case, which was not a maritime case, concerned the validity of a guarantee sent by e-mail on behalf of one company director to a creditor in order to persuade the creditor to withdraw a petition that would have resulted in the company being wound up. It was concluded that two requirements needed to be fulfi lled in order for the relevant guarantee to be valid: (1) the e–mail must constitute a suffi cient note or memorandum, and (2) it must be suffi ciently signed by the director.

The answer to the fi rst question was in the affi rmative. However, the answer to the second question was negative. The relevant e-mail was not signed in a conventional way, nor did it con-tain the director’s name or initials at the end or anywhere else in the e-mail. The only reference to the director was the e-mail address at the top of the document and this was not considered to be suffi cient. The Court explained that in order for a signature to be valid the name, initials and possibly even a pseudonym (!) must be inserted into the document in order to give, and with the intention to give, authenticity to it.

The above judgements suggest that the courts are reluctant to give electronic correspondence special treatment but instead they apply the usual criteria in order to determine its legal implica-tions. Indeed, Judge Pelling QC states in METHA v J PEREIRA FERNANDES SA that “the fact that the document is created electronically as opposed to a hard copy can make no difference”. However, from a practical aspect, it is clearly easier to alter electronic correspondence and it is also easier to challenge its validity than is the case with, for instance, a signed telefax. The Club would therefore recommend that documents and correspondence of particular importance are sent by telefax.

■

E-mails – a legal update

Anders LeissnerFD&D Manager

Team Göteborg III

The Swedish Club Letter 2–2006 FD&D

34

35

The Swedish Club Letter 2–2006 The Scandinavian Shipping Gazette

35

REVIEW Articles provided by The Scandinavian Shipping Gazette www.shipgaz.com

Russian register to introduce environmental notationsSSG-TALLINN ■ The Russian Maritime Register has drawn

up requirements for ships that take environmental meas-

ures in order to receive the class notations ECO and ECO

Design. These requirements involve equipment and sys-

tems for reducing or avoiding emissions and discharges

to the air and water. The notation ECO can be granted to

ships under construction or existing ships that satisfy the

requirements for control and limitation of emissions/dis-

charges. The ECO Design notation will be granted to ships

under construction or passenger ships and ships in coastal

shipping, which satisfy even more stringent requirements.

The Russian Maritime Register says that the requirements

have been drawn up on the basis of international conven-

tions for environmental protection, but that they are even

more stringent than these conventions. (04.09.06)

Rising accident trend in the Baltic SeaSSG-GÖTEBORG ■ In 2005, 151 vessel accidents occurred

in the Baltic Sea region, of which 13 led to smaller oil spills.

Compared with the fi rst years of the 21st century, acci-

dents at sea have more than doubled. According to Hel-

com, which compiles the statistics based on reports from

national authorities in the region, part of the increase can,

however, be explained by changed reporting routines.

Collisions and groundings are by far the most common

accidents. The current trend is that the collision share

of the total number of accidents is increasing while the

grounding share is decreasing. About 42 per cent of the

accidents were caused by human error. During the period

2000–2005, 8–9 per cent of the accidents led to some kind

of pollution. According to Helcom, about 50,000 vessels

trade in the Baltic Sea region every year. (02.10.06)

Shipping invention awarded Nobel diplomaSSG-GÖTEBORG ■. At the Scandinavian Technical Fair in

Stockholm, the mobile oil recoverer CMI.OR was awarded

a SKAPA diploma in memory of the inventor Alfred Nobel.

The diploma is awarded annually for the most signifi cant

Swedish innovations. CMI.OR was developed by Claes

Olofsson, who is also a ship’s master at Wallenius. All the

ships in the Wallenius fl eet are now being equipped with

CMI.OR, which can be used in the event of oil spillage

on board, clearing up oil spills ashore and non-chemical

cleaning in e.g. engine rooms. (12.10.06)

Multi-solutions for tighter Marpol emissionsSSG-TØNSBERG ■ Changes designed to tighten air emis-

sion controls of shipping via IMO’s Marpol Annex VI must

be based on a multiple of solutions, according to the

secretary general of the International Bunker Industry

Association (IBIA), Ian Adams at the association’s conven-

tion in Monaco. According to Adams, the international

community wants to see a further reduction in sulphur and

other emissions to the air from ships. IBIA supports this,

but the association cannot support simplistic one-stop

solutions to the problem. “The bunker industry, both users

and providers, believes that a combination of low sulphur

heavy fuel oil, distillate fuels, alternative fuels and emission

abatement equipment such as scrubbers will together give

the shipping industry the means to cut emissions without

compromising the safety and effi ciency of global shipping,”

he said. His comments were made with clear reference to the

suggestion from Intertanko that all shipping burn only dis-

tillate fuels. Adams said such a move would be very diffi cult

to implement without compromising safety and effi ciency.

(30.10.06)

Fewer pirate attacks at seaSSG-TØNSBERG ■ A total of 174 pirate attacks were reported

up to September, down from 205 in the same period last

year. Of the 174 attacks, 113 ships were boarded, 11 ves-

sels were hijacked and 165 hostages taken. In all, 20 crew-

members were kidnapped and six were killed. The pirate

hotspots continue to be Bangladesh and Nigeria, according

to the International Maritime Bureau (IMB) in its latest piracy

report, but other areas mentioned in the report are Somalia

and Indonesia. (01.11.06)

Increased safety at sea with Swedish inventionSSG-GÖTEBORG ■. Autoliv’s founder, Lennart Lindblad,

has developed a new system for the automatic tensioning

of straps for goods transportation. The invention could be

important for shipping since it can prevent the cargo from

shifting while in transit. Shifting cargo is a problem in ship-

ping since it can cause serious accidents. (06.11.06)

Demand for ice-classed ships growingSSG-GÖTEBORG ■. The demand for ice-classed ships and

experienced crew is growing. This is the conclusion drawn

at the exchange forum Operating in Ice arranged by Ger-

manischer Lloyd last week. At the conference, more than

50 participants discussed the specifi c challenges facing

ice-classed ships and icebreakers. Possible dangers and

damage when operating in the frozen Baltic Sea and how

to prevent this were important items on the agenda. More

advanced technology and experienced crews concerned all

the participants. Representatives of Deltamarin Contracting

LTD highlighted the question of experienced crews as a key

to preventing accidents and failures. Therefore the company

will develop a special education program in navigation for

its crews. The actual planning of the education program will

take place in spring, 2007, the company promises. (08.11.06)

French institute warns ECSSG-GÖTEBORG ■. France’s premier maritime body, Institut

Francaise de la Mer, has warned the European Commission

against implementing a proposal providing for mutual rec-

ognition by classifi cation societies of certifi cates for marine

equipment on board ships. The institute claims the proposal

risks having a negative impact on the quality and safety

of onboard marine equipment by treating “ships as collec-

tions of assorted types of equipment” rather than “coherent

wholes”. “In any complex assembly the presence of a sole

certifi cation organisation is a necessary condition for the

clarity of relations between diff erent parties concerned”, the

French institute claims. (23.11.06)

36

2

The Swedish Club Letter 2–2006 Club Information

36

■■ Feedback from our members is vital for our endeavor to improve services at all times. Service to our shipowners and charterers is what we are here to do and we must always bear in mind that we must develop and improve this service.

We receive individual member feedback at meetings and the like, of course, while the member questionnaire is another useful tool for us to meas-ure our performance. We do not intend to measure our performance in isolation at any one time, but we do intend to defi ne areas of our operations in which we can improve.

The 2006 Member Questionnaire response rate for members was 32% and 30% for brokers. This may appear to be rather low, but a substan-tial number of long-standing members and brokers have participated, for which we are grateful. We have estimated that more than 50% of the ton-nage entered was represented in the responders. The response rate was higher this year than it was in the previous member questionnaire, conducted in the early part of 2004.

Accordingly, here are the results of the ques-tionnaire illustrated by graphs attached to the re-spective questions.

The overall result is quite satisfactory and mar-ginally better than that measured in the previous questionnaire. In particular, the score for “Prompt casualty response” is higher. The Club is mem-ber-driven and it is therefore important to us that the members feel that there is an effi cient casualty response team, capable of urgent attendance at emergencies.

Another area that has improved is the percep-tion of the quality of The Swedish Club’s loss pre-vention efforts. We have always emphasized loss prevention and we have seen our mission as that of distributing knowledge of claims experience throughout the membership, with a view to mini-mizing losses.

We had anticipated that the score for questions relating to the online “SCOL” system on the Club’s website would be higher than they actually were. It does take time to become familiar with the system of navigation around loss statistics and claims in-formation, but we feel that the “Not used” column should certainly be reduced.

The last question concerned “Overall quality and performance” of the Club and this question is very important. We aim to be your preferred marine insurance provider and we will work even harder to meet your requirements. The overall score is quite satisfactory, but we are not compla-cent. We shall continue to improve our services and products at all times.

■

Member QuLars RhodinDeputy Managing Director

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4

5

6

7

8

Are your satisfi ed with the treatment and approach of The Swedish Club?

Please state your general opinion of your claims ex-perience with The Swedish Club.

Claims

Have you used the “SCOL” system on The Swedish Club’s web site? If yes, please rate your degree of satisfac-tion in relation to your requirements and expectations.

Have you ever visited The Swedish Club’s web site (www.swedishclub.com)? If yes, please state your opinion of the quality.

Are you satis-fi ed with claim settlements and adjustments?

Are you satisfi ed with the support level and advice given by the Club during the claim’s process?

Are you satisfi ed with the response and immediate actions taken by the Club upon notifi cation of claims?

Are you satisfi ed with the quality and promptness of the insurance documentation provided?

1

Website

Underwriting

37

The Swedish Club Letter 2–2006 Club Information

37

uestionnaire 2006

9

10

11

Are you satisfi ed with the overall quality and perfor-mance of The Swe-dish Club as your marine insurance provider?

Have you read our publication “The Swedish Club Let-ter”? If yes, please state your opinion of the quality.

Are you satisfi ed with the quality of The Swedish Club’s loss prevention eff orts?

Have you visited the Loss Prevention section on our homepage?

12

Loss Prevention

The Swedish Club Letter

Overall Quality

38

Out and AboutThe Swedish Club Letter 2–2006

A cocktail reception was held at Hotel Grand Bretagne in conjunction with The Swedish Club Board Meeting in Athens on October 5th 2006 and among all the distinguished guests were Mr Athanassios Kavoukas (Transmar Ship-ping Co), Mrs Margarita Kavouka (Transmar Shipping Co), Mr Konstantinos Pournaropoulos and Frans Malmros.

Credit where credit is due ■ ■ For the fi rst time in my golfi ng life, I have been awarded the “longest drive” in a golf competition. That happened, according to the latest issue of The Swedish Club Letter, at Bin Hai Golf Club, Shanghai at end of March this year. Those having played with me know that this would be nothing but a miracle. There is however a simple explanation; the printer got it wrong! The rightful winner of the longest drive competition was Mr Franco Tian of Sinodragon, Dal-ian – congratulations ! The same applies to the total winner of the tournament; that was Mr Liu Guo Lian of Cosco Container Lines, Shanghai rather than Mr Ruizong Wang of The Swedish Club as it appeared in the article. Congratulations again !

Lars Rhodin

Board Meeting in Athens

From left to right: Mr Frans Malmros with Mr Vassilis J. Katsikis (Katsikis & Sigalas

Reinsurance Days 2006■ ■ The Reinsurance Days 2006 were held at Slussens Pensionat on the island of Orust on September 13th-14th. Mr David Lega, former elite swimmer in the Swedish National Team for Disabled, lectured on positive thinking and a speedy two-hour tour with RIB-boats completed the meeting. Further photos from this event can be viewed on our website in the section “Out and About”.

Golfi ng at the Bin Hai Golf Club, Shanghai. From left to right: Mr Wang Jing (nearest to pin) of Wang Jing & Co, Guangzhou, Mr Ruizong Wang, Mr Liu Guo Lian (winner) of Cosco Container Lines, Shanghai, Mr Lars Rhodin and Mr Franco Tian (longest drive) of Sinodragon, Dalian.

PHOTOS: THE SWEDISH CLUB

PHO

TO: TH

E SWED

ISH CLU

B

39

Lars Forster * 29 April 1917

† 24 June 2006

Lars Forster is no longer with us, but his memory lives strong among both former and present employees at The Swedish Club.

It is diffi cult to imagine a more typical representative for the Gothenburg shipping industry. His father was a ship yard man and in keeping with the style and following his education as a naval architect at Chalmers Technical College, he became a ship yard engineer.

Already in 1951 he was employed as a surveyor at The Swedish Club, where he stayed until his retirement as chief staff surveyor in

1978. He was awarded the Association’s Distinguished Service Medal for his efforts. Lars experienced several spectacular ship accidents travelling all around the world

and his reputation among both owners’ surveyors and ship yard technicians was solidly established.

Lars was a kind and helpful person with a great interest in people, especially those from Göteborg. His memory for people was unsurpassed even at an old age; he was a living encyclopaedia.

We, all his old friends, will miss him and remember him with gratitude.Per Erik Hedborg

Former Managing Director of The Swedish Club

Inger Cunningham, joined the Club’s Finance depart-ment on July 24th 2006 as Accounting Offi cer. Prior to joining the Club, Inger worked with SEB (Skandi-naviska Enskilda Banken AB), Pharmadule Emtunga

AB and Willis AB, all in Göteborg.

Dimitra Ilia, joined the Club’s Piraeus offi ce as Team Assistant on July 17th 2006. Dimitra is a graduate of Montmorency College in Melbourne and originates from Australia. Prior to join-ing the Club, Dimitra worked

for Holman Fenwick International in Piraeus for the last eight and halv years as a legal secretary/personal assistant.

Maria Yiassa, joined the Club’s Piraeus offi ce as As-sistant Underwriter on Sep-tember 1st 2006. Maria holds a BSc in Maritime Studies and International Transport from the University of Wales, Cardiff and a degree in Eco-

nomics and Business Administration from Athens. Prior to joining the Club, Maria worked as a Business Development Manager for AIG in Greece.

Gert Josefsson, Staff Sur-veyor in Team Göteborg I, succeeded Benny Johansson as Technical Manager in our Hong Kong offi ce on July 17th 2006.

Annica Börjesson, Claims Executive in Team Göteborg I, joined the Club’s offi ce in Hong Kong on September 1st 2006 for a six month assign-ment.

Göran Rudelius, Assistant Claims Director, retired from the Club on June 16th after almost 30 years of dedicated service to the Club and its member. He was fi rst em-ployed in the Hull Claims Department as a legal and

nautical expert. With time he was promoted


STAFF NEWS

Staff News Public Holidays

PUBLIC HOLIDAYSwhen The Swedish Club offi ces are closed

November 2006 – April 2007

Head offi ce Sweden

Emergency tel +46 31 151 328

December 24th -26th 2006 Christmas HolidaysDecember 31st 2006 New Year’s EveJanuary 1st 2007 New Year’s DayJanuary 6th 2007 EpiphanyApril 6th-9th 2007 Easter Holidays

Greece

Emergency tel +30 6944 530 856

December 24th -26th 2006 Christmas HolidaysDecember 31st 2006 New Year’s EveJanuary 1st 2007 New Year’s DayJanuary 6th 2007 EpiphanyFebruary 19th 2007 Ash MondayMarch 25th 2007 Annunciation and National HolidayApril 6th-9th 2007 Easter Holidays

Hong Kong

Emergency tel +852 2598 6464

December 25th-26th 2006 Christmas HolidaysJanuary 1st 2007 Western New YearFebruary 17th-20th 2007 Chinese New YearApril 5th 2007 Ching Ming FestivalApril 6th-9th 2007 Easter Holidays

Japan

24 hour tel +81 3 5442 5466

November 3rd 2006 Culture DayNovember 23rd 2006 Labour Thanksgiving DayDecember 23rd 2006 The Emperor’s BirthdayJanuary 1st 2007 New Year’s DayJanuary 8th 2007 Coming of Age Day February 12th 2007 National Foundation DayMarch 21st 2007 Vernal Equinox DayApril 30th 2007 Green Day

and headed the department for many years. After some years in other employment Göran rejoined The Swedish Club and served as As-sistant Claims Director in Hong Kong until his retirement.

Pernilla Myrefelt, Claims Executive, has resigned from the Club after nearly eight years of dedicated service at the Club’s Claims & Legal Support Department and Team Göteborg III. We wish Pernilla all success in her future career.

Irene Fotopoulos, Team Assistant, has resigned after seven years of dedicated service at the Club’s Piraeus offi ce. We wish Irene all suc-cess in her future career.

Benny Johansson, Techni-cal Manager, has resigned from the Club after six years of dedicated service at the Club both in Göteborg and Hong Kong. We wish Benny all success in his future ca-reer.

1 1

CLUB CALENDAR

November 28th 2006Board Meeting in Paris

November 30th 2006Winter lunch for members and associates in Göteborg

November 30th 2006Christmas Dinner for members and associates on Donsö

December 14th 2006Christmas Dinner for members and associates in Greece

March 22nd 2007Board Meeting in New York

May 7th – 11th 2007Marine Insurance Course in Göteborg

June 13th 2007Board Meeting in Göteborg

June 14th 2007Annual General Meeting in Göteborg

No. 2 - 2006, November

Member Questionnaire 2006

UNSAFE PORTSUNSAFE PORTSon account of iceon account of ice

Page 20

WHAT’S KILLINGturbochargers?

Page 26

NEW INSURANCEfor newbuildings

Page 22

Page 36

New Board MembersPage 14

Documents

CLUB CALENDAR - Swedish Club · PDF fileClub Calendar 40 The Swedish Club ... ied in the Digest of Justinian, ... three documents per bill of lading this would amount to a staggering