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Warning to Mariners: Korean coast fish and aquaculture nets – SEA Watch August 2014

August 6, 2014
 
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Issue 12 - August 2014

Welcome to the August 2014 edition of SEA Watch with more updates and commentary on what’s happening in the world of shipping and marine insurance.

A lot has happened during the month of July including the MH 17 disaster, an escalating battle between Israel and Palestine, ISIS militants causing death and havoc in Iraq plus all the rest of it. We do not live in a peaceful world and the USA’s and EU’s increasing reluctance to engage the people responsible suggests it will get worse.

The good news is that ‘Jokowi’, the son of a carpenter with an excellent ‘can do’ record as the Governor of Jakarta, has been elected as president of Indonesia. If he can hold on to his principles and has party support to enforce them, then Indonesia and the SE Asian area could benefit hugely from a new rising economy and 252 million new consumers. Let’s hope that Jokowi proves to be the man that his people think he is.

Back on the SEA Watch front, our first article concerns the Maritime Labour Convention (MLC), its first birthday and what it has accomplished so far. Early days yet of course. However, the MLC has the potential to achieve huge and positive change, particularly in respect of FOC flag states and the developing countries which supply much of the world’s seafarers. Read on to see how you can contribute.

Our second article has been sent to us by SEAsia’s new regional office in Hong Kong which has been registered as SEAsia (China) Limited. SEAsia HK is managed by Tony Wong, Master Mariner and Solicitor. Tony is assisted with SEAsia work in HK by Clive Beesley who works full time for SEAsia’s alliance partner, C Solutions. Tony and Clive provide an insight into some very pragmatic and efficient wreck removal claims control and resolution processes which took place some months ago in Hong King.

Our next offering is from Oliver Rentzow, SEAsia’s transport claims specialist. The Chinese economy is changing rapidly as China shifts from an export focus to a local consumer focus. Oliver provides us with an overview of the now rapidly changing logistics and freight forwarding industries which must update to meet new demands. No streets are paved with gold but there seem to be huge opportunities.

Our fourth article comes from Mr JH Ji, an expert on ship contact damage to stationary fishing nets and floating seaweed farms, who works with Capt GC Song and his teams at KOSAC/SEAsia Korea. Mr Ji’s article explains the type of nets used, the seasons in which they are deployed, the damage and claims which can be suffered as well as some important loss prevention advice for mariners and managers.

Our fifth piece is from Willum Richards, a well known GA adjuster in Singapore who now resides in New Zealand and is that country's only GA specialist. Willum’s company is now a part of the SEAsia and C Solutions joint networks and he knows more about the intricacies of H&M claims adjusting than most of us will ever know. His summarized article relates to the common problem of damage repairs which are often deferred (usually for trading reasons) until after the H&M policy has expired. The issue then is as to the amount that the insured may claim. Willum explains the uncertainties and how to avoid them.

Last but not least, we’ve got a SEAsia network update based on input kindly sent to us by Michelle Megson, GM of Times Marine/SEAsia UAE with offices in Sharjah, Fujairah and Dubai. Headed up by Alan Coleman, SEAsia UAE has seen many changes since their opening in 1992 and the local working environment seems to becoming much more bureaucratic and more costly. Look out for your editor’s brilliant (?) suggestion on how to reduce operating costs.

Read on and enjoy and let us all hope that those in charge of the world may ultimately have the wisdom to do what Richard Branson proscribes in his latest book titled, “Screw business as usual”. Branson is the consummate ‘golden boy’ and name dropper but there is serious merit in his lateral thinking and ultimate goals. A copy to be sent to Mr Joko perhaps?

Ancient Mariner

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The MLC’s 1st Birthday: sea change or sea of doubts?

Much fanfare took place last year in preparation for the coming into force of the Maritime Labour Convention 2006 (MLC) in August 2013. A total of 30 flag state ratifications were required to achieve this. Almost one year later, the ILO’s website shows that the MLC has now been ratified by 63 flag state countries including the UK, Singapore, Panama and Norway. Notable abstainers include China and the USA.

So how is the MLC actually doing with respect to meeting its goals to improve the lives of 1.5 million seafarers by way of the provision of what the ILO terms as “decent work” (i.e. the availability of employment in conditions of freedom, equity, human security and dignity).

The fact is that in many of the countries that have ratified the MLC, decent work conditions already existed for seafarers. This was due in part to previous ratifications by these MLC member countries of some or all of the 68 separate ILO seafarer conventions that have now been consolidated into a single and more readily enforceable MLC.

On the other hand, in some of the countries that are now a party to the MLC, the impact has been quite dramatic in terms of the many new obligations that are required to enacted under flag state national law to protect seafarer rights. The MLC, under its equivalency provisions, provides a fair degree of latitude to flag states so as to facilitate easier enactment into national law. Only time and further research will tell us just how ‘equivalent’ some of that new legislation actually is.

One of the unique aspects of the MLC is that there is no real escape from its decent work obligations as they effectively apply to all vessels and their owners, regardless of whether a vessel’s flag state has ratified the Convention. How can this be? Well, the MLC contains a “no more favourable treatment” provision that ensures that the owner of a vessel registered in a flag state that has not ratified the Convention shall not obtain a commercial or legal advantage over the owner of a vessel registered in an MLC flag state.

The MLC’s ‘level playing field’ rule is enforced by the Port State Control (PSC) provisions of Title 5 of the Convention whereby ships of all flag states (irrespective of MLC ratification) are subject to PSC inspection in any country that has ratified the Convention.

PSC have been busy and a significant number of MLC non-compliant vessels have been detained worldwide, pending immediate rectification of MLC deficiencies. Some of these detained vessels had only just been issued with flag state MLC certificates to prove full compliance. This suggests that the flag state inspectors involved (often Class acting as “recognised organisations” for the flag state) did not properly understand their new MLC audit job. Or were they perhaps encouraged by shipowner pressure to check all the boxes and issue and nice new MLC certificate?

The bottom line is that there is no real advantage to any flag state to try and avoid the obligations imposed by the MLC, because MLC member or not, you’re going to have to comply if your ships are trading internationally. This must ultimately be a good thing for the shipping industry and seafarers everywhere. So it’s not surprising that flag state MLC ratifications at the ILO continue with Belize and Iran having just signed up and no doubt there will be many more flag states to follow.

So is there any downside to the MLC? Well your editor has recently been in communication with a young seafarer, Anastasia Kohanuk, who is currently working at sea for the northern summer on board a European ferry. Anastasia is a BSc Maritime Business and Management student at John Moores University in Liverpool. She is conducting an MLC survey amongst active seafarers as a dissertation project for her degree studies.

Anastasia’s MLC survey form is available at:

https://docs.google.com/forms/d/1gSU17vZcjtKYfxBjh5jaSYw6Or1uu3lBctfhKdFbyjU/viewform?usp=send_form

Anastasia’s survey has already generated a lot of seafarer interest and the full results will be available in May 2015. However, the initial findings are that seafarers seem to be frustrated and doubtful of two things:

1. They are having a difficult time in understanding all of their MLC entitlements due to a lack of readily available and easy to understand learning materials. In fact, many of them would actually pay to find out more.

2. They cannot see there has, as yet, been any positive impact on their pre MLC working conditions. For example, a particular concern is that there has been no visible improvement in their on-going job security, especially when working on short term contracts.

Problem 1. is critical and your editor’s search of the internet has only turned up one well written but fairly lengthy MLC learning document produced by the ITF. Good but no colour coding or flow diagrams to help in making it easier for seafarers to follow a complex legal regime. Can any of our readers point to an easy to follow MLC guide for seafarers apart from the many IG P&I Club guides that seem to target their shipowner members?

Problem 2. may be due to the fact that the MLC has only been in force for just under a year. Further, for any new flag state which ratifies the MLC, its implementation in that country will occur only one year after the date of that flag state’s ratification. However, much of the current frustration and doubt seems to stem from unhappiness with the MLC’s seafarer complaints process. In short, the current evidence is that it does not seem to be delivering satisfactory results. Nor is it negating the fear of persecution that is guaranteed under the MLC.

On the face of it, the two issues of seafarer concern noted above may well be linked together as no system is going to work properly if the people it is designed to protect do not possess a good working knowledge of what benefits it provides and how it operates. So if Problem 1. is dealt with effectively, Problem 2. should start to diminish.

The other important aspect is that the MLC, which has recently been amended to bring it up to date, must be viewed as a developing template for flag state legislation. It therefore seems certain that as MLC gaps and deficiencies are identified, the MLC will continue to evolve to hopefully become even more effective in securing “decent work” for seafarers.

No doubt Anastasia’s final survey results and BSc dissertation will help to tell us all more about how the MLC is actually working at sea in relation to accomplishing the ILO’s goals for the provision of decent work. Your editor and SEA Watch would therefore encourage you and the seafarers working on your vessel to participate in Anastasia’s survey on the MLC’s current effectiveness. The bonus for all will be happier crews, safer ships and better productivity.

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Wreck Removal Claims Control

Earlier this year, a small cargo vessel called at Hong Kong for bunkers while on passage from China to Indonesia. She carried a bagged cargo used in the construction industry that had been loaded and stowed by Charterers under the terms of a Gencon voyage charter party.

While entering the harbour, the vessel suddenly and inexplicably developed a heavy list that quickly increased to a reported 45 degree. Her crew, fearing that the ship would suddenly capsize and sink, abandoned ship. The positive result was that all crew were safely rescued and survived to tell the tale. Regrettably, the ship itself was not so fortunate as it drifted ashore onto a rocky shoreline. The ship grounded and came to rest with a list over to her port side of about 80 degree. This put the ship’s main deck edge and various openings underwater. Progressive flooding then occurred, inclusive of the engine room space, with resultant damage.

Prompt and efficient response, from the Hong Kong office of the vessel’s P&I Club, produced a rapid and proactive approach to assessing and controlling the problem. Communications with the Hong Kong maritime authorities were immediately initiated. Surveyors were then appointed along with Legal and Claims Consultants to investigate, advise on the best course of action and minimise liability exposure.

An informed assessment of the situation was accomplished and a CTL scenario (whereby the cost of salvage and repair exceeded the H&M insured value) was quickly predicted and later confirmed. This foresight enabled the formalities of 'abandonment' of the vessel to insurers to be dealt with promptly and the P&I Club to agree that a wreck removal operation was required. Local wreck removal capabilities were investigated without delay. Within a matter of days (rather than weeks) the plight of the vessel and her cargo were the subject of an invitation for wreck removal bids sent out to an international contingent of salvage/wreck removal contractors.

After a prompt evaluation of the bids in terms of both cost and technical planning (accomplished in weeks rather than months) a wreck removal contract was awarded. The winning bidder was a joint venture group capable of providing resources and hardware from both Hong Kong and China. The contract itself, based on BIMCO’s well known “WRECKFIXED” terms (essentially a 'no cure, no pay' contract), was prepared by C Solutions.

The first stage of the operation was to remove the cargo to lighten the ship. Thereafter a parbuckling (rotational leverage) operation took place. Once upright, the ship was patched and dewatered prior to onward towage to China for demolition. She departed from Hong Kong at the end of May 2014 (exactly 99 days after the date of the casualty).

Our SEAsia and C Solutions colleagues in Hong Kong are pleased to have had the opportunity to assist both the ship owners and their P&I Club from start to finish. They also wish to thank all concerned, including the Hong Kong Marine Department who exhibited the highest level of professionalism throughout, for their combined efforts in controlling and resolving a difficult situation both promptly and economically.

The respective team leaders for SEAsia and C Solutions in Hong Kong were:

SEAsia (China) Limited Tony Wong +852 6259 3169 tonywong@seasia-group.com

C Solutions (Hong Kong) Limited Clive Beesley +852 9335 6163 clivebeesley@csolutionslimited.com

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Freight Forwarding and Logistics in China: get ready for the big, new wave

In this month’s issue of SEA Watch, we will take a look at the logistics market in China that appears to be at the brink of huge change and improvement with government blessing. Our intention is to highlight the new opportunities that are already opening up to the freight forwarding industry both in and outside of China.

The current situation

As recently reported by the well known and highly regarded Economist magazine and other sources, the Chinese logistics industry is out-dated and inefficient. Most warehouses are old and un-mechanised. Goods are transferred up to a dozen times from vehicle to vehicle as they make their way across the country. There are no cargo hubs that help link freight from rail to road. The decrepit and overloaded lorries that ply China’s new multi-lane highways are unable to find a return cargo on more than one third of their trips.

To add to the problem, the industry is hampered by provincial laws which often require advance approval to cross provincial borders. Sometimes trucks have to endure provincial customs checks and even unload and reload their cargo from one truck to another. This increases transportation time and the risk of spoiling and theft, which is evidently endemic.

So why has this all happened? Much of the investment in infrastructure in recent years has gone to facilitate exports. Now, as China’s government shifts its focus to consumption at home, it is finding that the domestic logistics industry is woefully inefficient.

China has over 700,000 trucking operators, most of them one-man outfits. (The USA has about 7,000.) Scale is essential to the business, but the top 20 Chinese  operators all together make up barely 2% of the market. Companies compete so fiercely on price that most barely make any profit and so lack the funds needed to modernise or achieve economies of scale.

The situation was made worse by sleepy state-owned enterprises such as Sinotrans and China Post who control the markets for air freight and domestic post. Foreign express-delivery firms have been granted only limited licences for domestic delivery. More importantly, foreign firms are burdened with high costs that make it hard to compete for frugal customers against lean local rivals.

The changes

The good news is that there appears to be a bright light at the end of the tunnel. The Chinese central government is concerned about the inefficiency of the local  logistics industry and its ultimate cost to the economy. Plans have therefore been made to reform the industry with the goal of lowering costs and allowing companies to grow larger. This will no doubt take time. However, as you read this article, reports are that money from private equity funds is already flowing into China thereby boosting the process of modernising the logistics industry.

Much of the growth seen recently centres around the e-commerce industry, which is getting larger in terms of revenue every day. Fearing that high costs for delivery of online purchases to remote areas of China may choke off their recent growth, e-commerce firms have generated a high local market demand for cost efficient and competitive logistics. This goal can either be achieved by developing their own distribution networks or by buying in logistic services from third party logistic providers.

The provincial border control problem is another matter but this issue is well within the control of the central government. The expectation is that to ensure the success of the necessity for an internal consumer driven economy, it will be dealt with either by forceful persuasion or changes in the law.

The future

The demand within China for first class logistics solutions is on the rise. The Chinese government has realised that significant changes must be made to bring the worn out and underfunded logistics industry forward into the 21st century. With available warehouse space per person at less than a tenth the level in the US at present, the potential growth could be of tremendous proportions. At SEAsia, we believe that now is the time for our freight forwarding clients and their insurers to take a much closer look at the current logistics developments and plans in China to assess how they might best invest and profit from its certain growth.

As for logistics claims loss prevention and control, SEAsia anticipates that there will be a greater need for such expertise in China as well. To facilitate faster and more culturally aware responses in the region, SEAsia has already established its own office in Hong Kong as SEAsia Solutions (China) Ltd. SEAsia China is headed up by Tony Wong, a Master Mariner and Solicitor with many years of experience in the liability defence industry. Tony and his team, along with SEAsia’s network surveyor’s in China, look forward to supporting China’s new wave of logistics growth and consumer driven prosperity.

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Warning to Mariners: Korean coast fish and aquaculture nets 

SEAsia’s network partners in Korea are KOSAC/SEAsia Korea, headed up by Capt GC Song. Some of the most intensive and detailed work we have done with Capt Song and his team over the past decade has been in regard to the investigation and control of allision incidents between ships and large stationary but floating fishing nets or seaweed (laver) farms off the Korean coast.

For those of you not familiar with the term “allision”, this describes a collision contact between a ship and a floating or other object which is not a ship e.g. a buoy or a jetty. The liability that then arises is normally covered under the Fixed and Floating Object (FFO) terms of a ship owner’s P&I insurance cover.

Civil and criminal liability

If a vessel navigating in Korean waters comes into contact with a stationary fishing net, laver farm or other floating aquaculture facility, then it is a certainty that the owners of the facility will immediately contact the Korean Coast Guard. The CG have access to both VTS and AIS data and they will very quickly establish the identity of the vessel involved. If the vessel is still inside Korean waters, then the vessel will be stopped and detained to facilitate immediate investigation.

The primary purpose of the Korean CG investigation is to establish whether the vessel involved came into contact with the facility due to negligence on the part of the crew or due to an intentional act. The CG’s role is not to determine the scope of the damage and the losses suffered. If the CG establish that the contact was due to crew negligence, then they will close their file as the contact damage and compensation aspects are considered to be a civil law matter. If the contact was deemed to be intentional – very rare of course – then it is considered to be a criminal act and a penalty or fine will be levied against the vessel and the owner.

Damage to floating stationary fishing nets off Yeosu (March to December)

Between March to November each year, stationary nets are moored in water depths of 5 m to 30 m for seasonal fishing of anchovy, yellow tail and mackerel. The nets are normally lifted twice each day, at slack tide. Smaller nets will usually be tended by two fishing vessels. Larger nets, up to 400 m long and 200 m wide, will usually require three fishing vessels with a total crew count of up to 50 fishermen to handle them.

Photo 1. Model of a stationary fishing net showing construction, buoying and anchors.

The buoyed and anchored stationary net construction is quite complex, as can be seen from the net model at photo 1. It can therefore be expected that if a vessel strikes a net, the repairs required will be extensive, costly and time consuming with resultant loss of fishing income.

Photo 2. Chart extract showing the stationary fishing net area (orange border line) and the nearby vessel traffic zone.

The relevant area in which stationary nets are deployed off Yeosu is bordered with an orange line and shown in the attached chart extract at photo 2. It will be seen that to the top and right of the area bordered by the orange line area lies a vessel traffic zone shown in magenta (purple). The relatively close proximity of the fishing net area and the traffic zone can give rise to the risk of ship contact with stationary fishing nets if ships do not stay inside the zone. Further, ships having left the traffic zone and ships inbound, towards the traffic zone, have also incorrectly set their courses to pass inside the orange line net deployment area and have come to grief because of it.

SEAsia Korea have had to deal with no less than five ship and stationary fishing net incidents in the above area over the past few years and all of them, even after insisting that claimants mitigate their losses, have proved to be costly.

Damage to floating stationary laver culture facilities (September to May)

Laver (seaweed) cultivation takes place from September through to May of the following year. The standard unit for laver cultivation is known as a “chaek” which is 40 m in length. However, a laver facility can extend up to the equivalent of three chaeks in length (120 m), dependent upon the equipment and resources available to the local village responsible for its care and harvesting.

Photo 3. A typical laver net Chaek showing buoying, and netting.

Photo 3. shows a typical laver facility with multiple rows of nets, buoys, rope connections and pillars which secure the nets to the sea bottom. The laver seed is implanted in September and harvesting then takes place every 20-30 days through to May. Once the last harvest is completed, the laver nets are dismantled and brought ashore for winter storage and maintenance.

If ship contact damage to laver nets is suffered during the harvest season, it may not be possible for the nets to be repaired and re-set within the current season unless it has occurred during the first few months. If not, then claims for loss of income would therefore extend to the end of the relevant season and can be very high.

In a recent laver contact damage case handled by SEAsia Korea, it was discovered that the laver nets had not been deployed in the correct licensed position. The error was due to a GPS position plotting error made by the laver facility operators. This occurred due to a discrepancy in the GPS datum between Tokyo datum and WGS 84 datum.

Photo 4. Showing the alleged laver net positions by reference to Tokyo GPS datum and the ship’s track in red.

SEAsia Korea utilized this finding (which showed that the vessel had only just grazed along the southern edge the net zone at a single point) to help defend the shipowner and their P&I Club against a claim for over USD 360,000.00. Photo 4 shows the position of the nets and the vessels track according to the claimants. Photo 5 shows the same scenario with the GPS datum as corrected by SEAsia Korea. The end result was that the laver net damage final settlement was reduced to only 30% of the claimed amount.

Photo 5. Showing the  actual laver net positions after GPS conversion to WSG 84 datum and the same ship’s track.

Loss prevention and control advice

1. It is essential that ship owners and managers ensure that their Masters are made fully aware of the dangers posed by stationary net fishing (March to December) and laver net aquaculture (September to May) which take place off Korea’s Yeosu coast each year. Warning: the current Korean provincial regulations do not make mandatory the fitting of either lights or radar reflectors to stationary nets or laver farms. Some stationary nets are fitted with lights but laver nets do not usually fit any lights.

2. Cautions are already posted on charts as well as in Pilot Books but the evidence is that Passage Planning is not being properly accomplished in accordance with both the SOLAS and SCTW Conventions [see IMO Res A.893 (21)]. An error made at this stage could prove to be very expensive in terms of both damage settlement and lost time to the vessel.

3. Bearing in mind the room for error (up to 400 m) in relation to the incorrect GPS positioning of fishing and laver nets due to the difference between Tokyo and WSG84 datum, it is suggested that vessels should not pass closer than 1 n mile (1852 m) to the charted or posted position of any net located off the Korean coast.

4. VDR data should be saved (for say 30 days), as a routine precaution, for all transits of the Yeosu coastal area off Korea. If a claim is then brought against the vessel for net or other damage which is alleged to have occurred during the vessel’s transit dates and times, then the vessel will have its own objective and detailed evidence available to refute or defend such claims. If an incident occurs during transit, then the VDR data must be saved and specialist/manufacturer’s assistance may be required to accomplish both saving and effective downloading

5. Call SEAsia to assist you and your vessel if a contact incident occurs. We will quickly assess the situation, confirm instructions with your P&I Club and then immediately mobilise expert surveyors from KOSAC/SEAsia Korea to site. We will investigate, obtain and preserve evidence, advise and ensure the best possible defence outcome for the shipowner and their P&I Club.

As a closing comment, it would obviously be sensible for the Korean regulations to be amended to make the fitting of both warning light and radar reflectors on stationary nets and laver farms compulsory. The cost to do so would not be high and almost certainly less than the cost of single large allision incident. Would it therefore not make sense for the P&I Clubs to lobby the Korean government for change? Might it also make sense for the P&I Clubs to consider offering to subsidise the cost of the fitting of such low cost warning devices for at least the first two years? What do our readers think?

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H&M adjusting: the “reasonable cost of repairs” when repairs are undertaken after the policy expires

Section 69(3) of the English Marine Insurance Act 1906, which applies to most ITC Hull policies, deals with the measure of indemnity allowed for a partial loss/damage to a ship by stating:

(subject to any express provision [to the contrary] in the policy…): Where a ship has not been repaired, and has not been sold in her damaged state during the [period of the] risk, the assured is entitled to be indemnified for the reasonable depreciation arising from the unrepaired damage, but not exceeding the reasonable cost of repairing such damage computed as above.

A legal argument has recently surfaced which suggests that where there is unrepaired damage remaining at the end of the policy year, then in the absence specific wording, the correct and only way to adjust the claim is under Section 69(3), even if the repairs have quite reasonably been delayed until the next routine docking.

Those that disagree (most average adjusters) with the above argument point to issues with the interpretation of the relevant sections, various legal decisions and the practice of adjusters and insurance markets in settling such claims for many years. The argument has, however, generated an unhelpful level of market uncertainty.

Ships commonly have unrepaired damage at the end of the policy for a number of reasons including commercial convenience, accident occurred just before expiry etc.

If the aforementioned legal argument were to be confirmed and there is in fact unrepaired damage at the policy expiry, insurers could then INSIST that the shipowner is entitled only to the lesser of either the depreciation in the vessel at that time or the estimated cost of repairs (ECOR), even if the repairs are later accompished.

The ECOR is exactly that – an estimate. Further, it is common for additional damage to be found during the repair period or costs can also escalate.

The depreciation in vessel value is often the same or more than the cost of repairs. A potential buyer may discount the purchase value by the ECOR and possibly something for the delay during repairs.

However, take a vessel worth $500,000 as a going concern and $280,000 as scrap. The depreciation can never be more than $220,000 ($500,000 - $280,000). This would be the most the shipowner could recover for unrepaired damage even if the repairs actually costs $300,000 or more.

The fully insured shipowner could then be placed in a situation where, due to inadequate damage estimates or fluctuations in the ship or scrap value markets, he would be left significantly out of pocket when he actually completes the repairs.

In order to overcome the aforementioned uncertainty, the Association of Average Adjusters introduced the following Probationary Rule of Practice in May, 2014 (which will likely be accepted in May 2015) :-

A4 COST OF REPAIRS 2) Where a claim for particular average arises and the Assured has elected to repair the vessel, the Assured is entitled to: a) recover the reasonable cost of repairs in terms of section 69(1) of the Marine Insurance Act 1906, irrespective of whether repairs are carried out before or after the expiry of the policy. b) defer repairs, subject to Class approval, to the first reasonable opportunity which is likely to be the next routine overhaul or dry-docking period. Any increase in the overall cost of repairs arising from deferment beyond the first reasonable opportunity will be for the account of the Assured.

Meantime, it is suggested that any H&M insured and their broker who wishes to ensure certainty on this important and practical issue going forward, should consider the insertion of a clause in their H&M policy based on (or of similar effect) to the above Probationary Rule. Such incorporation would serve to negate any possible misinterpretation or misuse by insurers of S. 69 (3) of the MIA 1906. For those readers who may wish to read the full article, please click on www.wrconsulting.co.nz

Willum Richards Consulting Ltd 30 Mataraki Place Wanaka Otago 9305 New Zealand

Tel: +64 (0)3 443 5134 / +64 21 132 1863 Email: willum.richards@wrconsulting.co.nz

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Times Marine: SEAsia’s network partner in the UAE

SEAsia has had the privilege of working with Times Marine/SEAsia UAE for many years. Headed up by Group CEO Alan Coleman, with the capable assistance of General Manager Michelle Megson, the SEAsia UAE team have always proved themselves to be at the top of their game in terms of speed of response and the quality of their work.

Michelle has been kind enough to send us an update on their current UAE operations. A group photo request was a tough ask as their team is constantly on the move from one survey job to another. So we have created a photo collage of the key team members instead.

Established in Sharjah 1999, with a staff of just two people, Times Marine/SEAsia UAE has expanded – though pure hard work and dedication – to a total of three UAE based offices that extend their services to Fujairah and Dubai as well. In 2003, Times Marine entered into an association with Aalmar Surveys Ltd in London which operate as a specialist global hub office for pre-purchase surveys with network surveyors based in 30 countries around the world.

Closer to home, Times Marine/SEAsia UAE now provides a total team of eleven people, including six highly experienced surveyors undertaking P&I entry surveys, towage and lashing warranty work as well as casualty investigation and control. Operational matters are not easy as the UAE consists of seven emirates which each maintain their own internal autonomy over a variety of issues. To conduct business, three of the emirates now require separate annual trade licenses and the establishment of locally registered branch offices.

The future seems to be that the other four emirates will soon impose the same local requirements. Thus, together with the increasing cost of obtaining individual port licenses and port entry passes, Michelle foresees a further and significant increase in operating cost overheads for marine surveyors and all other businesses operating in the UAE. If you combine these rising cost elements with hard pressed ship owner clients calling for a reduction in survey fees, the result is obviously going to be problematic for all concerned.

SEAsia in Singapore and other SEAsia network offices are suffering from similarly increasing overhead problems along with client demands for survey and correspondent work to be billed at rates which are often less than the market price five years ago. Something has to give, so what‘s the answer? Well apart from saving on surveyor wages by strapping a Go-Pro video camera unit (with internet connectivity to head office) onto a chimpanzee wearing coveralls and a safety helmet, your editor cannot think of a useful solution.

OK, the above idea sounds crazy but do any of our readers have any sensible suggestions as to how to deal with the current high regional overheads/low survey fee expectations problem? And how about the related and on-going shortage of marine surveyors due to the increasing shortage of 2nd career/former mariners? If you do and if they work, then SEAsia and many others would no doubt pay for the solution.

Meantime, the Times Marine/SEAsia UAE team (just good people, no chimps) are standing by to assist you and your vessel in the UAE.

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