Page 8: of Maritime Reporter Magazine (February 1997)

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Maritime Reporter Magazine, page 7, Feb 1997

Maritime Reporter Magazine, page 8, Feb 1997

Maritime Reporter Magazine, page 9, Feb 1997

MARINE FINANCE

LANGSTEN SUP & BAABYGHERI AS

ULSTEIN SHIPYARD /

SASEBO /

HYUNDAI MIPO /

I.H.I. /

OSHIMA SH|TOUILDING

OSHIMyHIPBUILDING

OSHIMlfSHIPBUILDING

MjdUl ENG.8SHIPBUILDING

J^ABARI SHIPBUILDING

TA LLOYD

ISM CODE

ThfcJegal, commerical & economic consequences by Guy E. C. MaiHand

In imposing Jk higher degree of accountability

Management) Code ca\be seen to have some fairly sharp teeth which will alter existing corpora^ proce- dures and legal structures,Vs well as private commercial rel\tion- ships.

In aiming to promote safe opera- tional practices ashore as well afloat, the Code is also about ho1 companies are formed and run. Its dominant theme is accountability — from the vessel at sea to the cor- porate suite — and it rewrites a number of familiar rules and roles.

The Code can be looked upon as a part of a continuing erosion of immunities traditionally available to owners and operators, together with a broadening and extension of liability and accountability to other sectors of the shipping indus- try.

Prior to the ISM Code, there existed a number of institutional relationships and practices which acted as buffers to give the indus- try, including underwriters, a cer- tain degree of protection froi unlimited and unforeseen liabili

This is fundamental to almostrall contracts for the carriage of roods by sea, and for marine instance.

Because it was possible tof control exposure, a shipownerrisk of being liable for loss or dfemage has been predictable, anfl therefore insurable at an ac^ptable cost.

These buffers incited the division of responsibility fjdr safety manage- ment betweenr owners, agents, operators, managers and charter- ers, and tl^ common use of sepa- rate shipjnng companies with low capitalisation and common owner- ship.

Man/ of these relationships and practices will now change: one will involve the burden of showing what is called "due diligence," which broadly means that an owner or operator would not legal- ly be responsible for losses caused by the negligence of a ship's crew, if it can be shown that the owner or agents exercised "due diligence" at the beginning of the voyage to make the vessel seaworthy.

In principle, in the past, a navi- gational error that puts a vessel on the rocks would not be imputed to the owner or operator unless the courts find "privity" on their part, meaning actual or constructive knowledge. Courts, particularly in the U.S., go to great lengths to find such privity, and clearly the ISM

Code will from now on be a power asset to lawyers and judges^m ling so. tide 4 of the Code requires thataiompanies designate/a person ashore responsible to top manage- ment for monitoring tne safety and pollutioX aspects/of shipbourne operation\ and fior ensuring that adequate l^cy/rces and supports are applied.

This "linl^ nfyv imposes a degree of knowledge \nd control that could seldom, in tfce past, be docu- ment! and verifiei

I^ould, for example, determine whether an operator cWn resist the femands of a charterer to enter port in poor weather or Vhen the crew have not had their mandatory rest period.

It will be more difficult to rSTy on the safety net of insurance cWer where there has been a lack of

The link between the ship and top management also changes the practice whereby owners are enti- tled to limit their liability under the Carriage of Goods by Sea Act (COGSA), or the Hague Rules as they are known in the U.S., if a casualty occurs without their actu- al fault or privity. If prior knowl- edge is found to exist, it is possible that the cargo P&I underwriter may decide that it deprives the owner and manager of coverage.

Clearly, the broad and compre- hensive nature of the Code's provi- sions will facilitate the linkage of any unseaworthy condition with a

New Contracts

Orders are listed alphabetically, by vessel type. Publish^is not responsible for errors or omissions. For additional information on this, or ottrer ship market information, con- tact: FERLISHIP, Paseo De San FranciscoDeSalp<8,28003Madrid, Spain, tel: +341 441 4138; fax:+341 441 4138.

Owner/Operator Shipyard Typo

FARSTAD SHIPPING

SWIRE PACIFIC OFFSHORE

EAGLE MARITIME

PAN OCEAN SHIPPING

SHINWA KAIUN

TOP GLORY

MITSUI O.S.K. LINES (MOL)

NYK LINE

NIPPON STEEL CORP.

MITSUI O.S.K. LINES (MOC)

AHTS

ANCHOR HANDLING

BULK CARRIER

BULK CARRIER 3£00 71,790 20,000 170,000 30,000 47,300 46,700 228,000 49,400

KUMAMOTO FERRY

ANDERS UTKILENS

EMILIANA MARITIMA

MARNAWFINAVAL

SOVCOMFLOT

ARMIN KLINGEJJ

BERTRAM F

COSCO

AUSTAL SHIPS PTY LTD

AUKRAINDUSTRIER AS

UNDENAU GmbH SCHIFFWERFT

AARHUS FLYDEDOCK

ULJANIK SHIPBUILDING

QING SHAN SHPYD

CHINA SHIPBUILDING CORP.

ALABAMA SHIPYARD

SAMSUNG

PTRAL

SAMSUNG

CATAMARAN

CHEMICAL

CONTAINER

CONTAINER 16,000 14,400 8,000 47,500 'IRAN SHIPPING LINE

LEONHARDTSBLUMBERG

NORASIA

NORASIA LINE

SCHOELLER

CORAL CONTAINER UNES

NYKAOKYO SEMRAKU

UNKNOWN

OMI CORP.

SADRA

SAMSUNG

JIANGNAN

UNKNOWN

MAWEI SHIPYARD

CASSENS WERFT

SHINKURUSHIMA DOCK

UNDENAU GmbH SCHIFFWERFT

CASSENS WERFT

DAEWOO

CONTAINER

CRUDE CARRIER

THENAMARIS

UNKNOWN

BRUNO OUIRICONI

DREDGING CORP OF INDIA

HAM

SODRANORD

VAN OORD ACZ

CONOCO

MORE OG ROMSDAL FYLXES

JSC SEVRYBA

CHEMGAS

SAMSUNG

KVAERNER MASA-YARDS INC

IHC HOLLAND NV

VEROLME

IHC HOLLAND NV

SAMSUNG

AST111EROS ZAMACONA

ORSKOVS STAALSKIBSVAERFT

UNKNOWN

CRUDE CARRIER

CRUISE

DREDGER

DRILLSHIP

FERRY

FISHING

GAS TANKER 150,000 105,000

LAURITZEN KOSAN TANKERS

IRAN ISLAMIC REPUBLIC

GERMAN GOVERNMENT

CHEMGAS

WESTFAL4ARSEN

U.S. MILITARY SEALIFT

ARKHANGELSK SHIPPING

SIMONSEN 8 SLANG

HAI SUN HUP

WESTFLEET MANAGEMENT

UNIVERSAL ABOITIZ

UNKNOWN

WATER JET SHIPPING

NORWEGIAN INTERESTS

SOLSTAD SHIPPING

MEDITERANSKA PLOVIDBA

DONG BANG FORWARDING

MINOAN UNES

BP + MAERSK TANKER

CERES HELLENIC

NIARCHOS GROUP

TANKER RACIF1C

MING WAH

HYUNDAI HEAVY INDUSTRIES (HHI)

SADRA

KROGER-WERFT

KANREI SHIPBUILDING

MITSUI ZOSEN

AVONDALE SHIPYARD

TROGIR SHIPYARD

ABG SHIPYARD

HITACHI SINGAPORE

HYUNDAI HEAVY INDUSTRIES [HHI)

GAS TANKER

GENERAL CARGO

HYDRO. RESEARCH

LPG

MULTI-PURPOSE

OBO

FBM ABOITIZ MARINE

KVAERNER SINGAPORE

SOVIKNES VERFT

ULSTEIN VERFT AS

SPLIT

DAE SUN

FOSEN MEK VERKSTEDER AS

DAEWOO

SAMSUNG

DAEWOO

SAMSUNG

NAMURA ZOSENSHO

PASSENGER FERRY

PLATFORM SUPPLY

REEFER

RoRo

RoRo PSSGR. FERRY

TANKER

SCINICARIELLO SHIP MGT.

STENERSEN

UNICOM MANAGEMENT SVS.

WAHKWONG

ASIAN ETERNAL SHIPPING

AP MOLLER SINGAPORE PTE.

CARL F PETERS

NANJING CHANGJIANG

PACIFIC CARRIERS

PRIMORSK

NAMURA ZOSENSHO

JIANGNAN

ULJANIK SHIPBUILDING

FUKUOKA SHIPBUILDING

PAN-UNITED SHIPYARD

DALIAN SHIPYARD

CHEUNG KU MARINE IND.

BOHAI SHIPYARD

ONOMICHI

DAEDONG SHIPBUILDING

TANKER

TANKER 22,000 2,850 5,350 19,150 110.000 4,320 12,800 6,000 148,500 300,000 105,000 105,000 100,000 13,000 47,500 11,500 17,500 110,000 6,500 35,000 46,500 46,000

WAHKWONG

AP MOLLER

CERES HELLENIC (G P UVANOS)

IGLAFKI MARITIME

N OCEAN

A SZKOLA MORSKA

S AUTHORITY

DAUAN SHIPYARD

DAEWOO

SAMSUNG

NKK CORP.

DAEWOO

MITSU9ISHI H.I.

REMONTOWA

DUBAI DRYDOCKS

TANKER

TRAINING VESSEL

TUG 44,000 126,000 150,000 150,000 310,000 failure of tfte owner or operator's system of management. One omen of change is tlmt hull underwrit- ers, under the IT*C Hulls clauses, have extended theVequirement of due diligence to incKde "superin- tendents or any of tfte assured's onshore management". \This has the effect of avoiding nail and machinery-related claims result- ing from poor maintenance.

There will also be a link between the ISM Code and national laws.

Take OPA90, for example. Its def- inition of those liable for a pollut- ing vessel is very broad and includes owners, operators and bareboat charterers. However, the

Code, in prescribing that a

Document of Compliance (DoC) is 8 Maritime Reporter/Engineering New:;