New Stoploss On STS, Inspections and Liquefaction

 P&I, P&I Club, publications  Comments Off on New Stoploss On STS, Inspections and Liquefaction
Feb 252011

StopLoss the London P&I Club’s loss prevention publication is available now in both English and Mandarin. Both versions can be downloaded by clicking here.

Also, spoken versions of StopLoss, again in both English and Mandarin, will very shortly be available as podcasts on

Listeners can subscribe to the podcasts via iTunes and can also receive notice of postings on Twitter by following Continue reading »

Strangler In The Fridge Preview

 P&I, P&I Club, pilotage  Comments Off on Strangler In The Fridge Preview
Mar 312008

…Oops, that should have been Stranger On The Bridge, “Strangler In The Fridge” was a sort of code during production. If you want to know what we get up to when not working on Maritime Accident Casebook check out the trailer etc. for Stranger On The Bridge here.

There is a bit of form filling before you get to the link.

2008 – pouring trouble on oiled waters

 MARPOL, oil, P&I, P&I Club, Pollution  Comments Off on 2008 – pouring trouble on oiled waters
Dec 272007

Whatever lays on the other side of the misty horizon of New Year’s Eve one thing is fairly certain: more seafarers will be arrested, fined and jailed following maritime accidents. On particular, punishments for non-compliance with MARPOL regulations will continue to increase to previously unheard of levels, beyond the $13.3 million average per year for the past decade.

In its parting shot for 2007, the Standard Club‘s bulletin for December warns: “…the level of fines will continue to increase until it is felt that the shipping industry is getting its house in order”. We’ll see P&I clubs cracking the whip over their members. Standard warns that those of its members who find themselves facing a MARPOL violation fine will have to prove that they did everything reasonably necessary to avoid non-compliance – with the burden of proof being on the shipowner. After the high level of claims over the past 18 months. P&I club are likely to become more forceful, for shipowners it’ll be a matter of getting into the act or getting out of the club.
 The US is dropping the hammer on violators in a big way and more seafarers will face the agression of the US Coast Guard but, as Standard says: “…these prosecutions and breathtaking fines would not be possible unless engineers persisted in bypassing the oily water separator (OWS), dumping sludge overboard and falsifying the oil record book. Most prosecutions are based upon physical evidence in the form of pipes and hoses, confessions or testimony of engineers or circumstantial evidence gleaned from oil record books. In some cases, so called ‘whistleblowers’, who stand to gain financially from a successful prosecution, alert the authorities to what is going on onboard….Whatever the source of evidence, it is obvious that these illegal practices continue to exist and are fairly widespread in the shipping industry…” And it isn’t just marginal operators who are guilty of trying to play fast and loose with MARPOL, it’s some household names, too.

Practices range from by-passing oily water separators and their alarms to simply throwing oily sludge from filters and purifier over the side. In the case of prosecution by US authorities, the discharge does not have to be inside its jurisdiction. Crew and shipowners find themselves faced with falsifying records, such as the oil record book, concealing equipment used to bypass the oily water separator or the destruction of documents such as engine room logs whioch amount to obstruction of justice.

So, yes, they are out to get you.

Money, of course, is a key. Standard highlights: “….failing to purchase and install the best available technology, limiting the discharge of oil waste in port, cutting corners on maintenance, generally incentivising chief engineers to keep within budget regardless of any operational problems and failing to ensure adequate experienced manning of the engine room…problems can also arise as a result of poor systems of shoreside management control over the waste management process, due to inadequate training and auditing to ensure compliance. In other cases, there are cultural aspects resulting
in a rigid hierarchy in the engine room, which actively discourages junior engineers from questioning any improper practices and, if necessary, directing such concerns to shoreside management… There are also cases that have resulted from the deliberate acts of individual engineers, either as a result of laziness or incompetence. These so-called ‘bad apples’ are often the stated reason given by the ship operator for the practices onboard, although this should not always be taken at face value. There may be reasons for engineers acting improperly if they feel they have not received sufficient training or support, in the form of proper equipment and spares, in order to deal with the normal and sometimes abnormal operational problems in the engine room.”

In brief, then, MARPOL violations result from company cultures in which certain crewmen are encouraged to short-circuit waste management systems, given inadequate systems and training in the first place, where monitoring compliance is poor and where shipboard culture discourages the questioning of improper practices and discourages seafarers who are aware of them from doing anything about it.

Those seafarers, of course, will be the ones facing the inside of a prison cell.

Violating MARPOL isn’t good business practice. It’s dumb. Over the next year it won’t just be arrest happy USCG personnel and income-happy political administrations but other countries, too, which will be impressing upon shipowners and crew just how dumb dumping oil is.

 Posted by at 11:48

Biggest claims aren't second raters

 P&I, Uncategorized  Comments Off on Biggest claims aren't second raters
Dec 222007

P&I clubs face a fundamental shift in claims exposure

FOR shipowners and their P&I clubs, 2007 was the year in which the record claims experience of the previous policy year began to look “more like a plateau than a peak”, according to leading Lloyd’s broker and P&I specialist HSBC Insurance Brokers.In its Protection and Indemnity Report 2008, HSBC says that not only was the claims profile of the 2006 year by far the worst ever recorded, it was also probably evidence of a fundamental shift in claims experience.

Noting that, in terms of both numbers of pool claims and total value, 2007 is already running ahead of the figures recorded at the corresponding time last year, HSBC warns that the picture is as likely to deteriorate still further as it is to improve, and that there are no factors to indicate that 2006 and 2007 will be anything other than similar. It adds, “It is unlikely that any decisions for the 2008 renewal will have been made on the presumption that claims for 2007 will tail off.”

“Paradoxically,” adds HSBC, “the biggest claims are by no means confined to shipowners that would be classified as in any way second-rate. On the contrary, they are more often than not attributable to shipping companies that would be welcomed with open arms if they were in the market for a new club.”

Nick Riddle, Executive Director, Global Marine practice at HSBC, says, “The random nature of these catastrophic losses leaves the clubs with a dilemma. Do they impose draconian penalty increases where the record alone appears to justify it, thereby alienating otherwise top-quality members? Alternatively, do they attempt to mitigate potential high exposure and alienate arguably more marginal members that, through good fortune or otherwise, have maintained an historical claims record to be proud of? The reality is that club underwriters will get their money where they can, which unfortunately means that smaller owners — and particularly those without capable broker representation — will suffer the most.”

In its most comprehensive and analytical P&I report to date, HSBC examines a number of shipping market trends, and also looks at other specific developments in the P&I market during 2007. Commenting on suggestions that 2007 had been tipped to be a year of consolidation in the P&I sector, it says, “It is unlikely that any club mergers will be concluded in the foreseeable future. Consolidation in the mutual P&I sector is superficially attractive but, in practice, individual agendas, long-term loyalties and the lack of an overriding imperative all militate against the likelihood of a merger going ahead.”

As for the prospect of new clubs entering the market, HSBC says recent attempts to form a Greek P&I Club are – like previous, similar efforts — likely to fail unless sufficient support can be secured from larger shipping companies, in order to achieve the necessary economies of scale. “We suspect that the International Group is not too concerned,” concludes HSBC.

On the subject of the recent significant increases in rates – and restriction of cover — for passenger ships, HSBC says, “It is becoming apparent that the inherent risks of passenger shipping are not a good mutual fit with cargo ships and, because passenger tonnage forms a small minority of the total club entry, its needs will be always be a secondary consideration. However, there are some major corporations participating in the cruise business that are too astute to allow themselves to be treated as second-class citizens for long. It would be no surprise if investigations are already ongoing to determine how the benefits of the mutual system can be applied for the advantage of this sector.”

Commenting on the need for insurance providers to meet, by 2010, specific solvency capital requirements under the EU Solvency 2 initiative, HSBC concludes, “Solvency 2 will undoubtedly make the insurance world a much more orderly place in the long term. Whether it really benefits the members of a mutual P&I club is a different matter. We are unaware of any claim not being paid by a member of the International Group of P&I Clubs because the club had insufficient assets.”

 Posted by at 11:35  Tagged with: , ,