Bryant’s Maritime Blog – 22 February 2010

Headlines: Cosco Busan ship manager fined $10 million; UK – payment to pirates of ransom not contrary to public policy; Somalia – Asian Glory used again for logistical support of pirates; Gulf of Aden – pirate activity remains high; IMO – piracy reported during December; UK – ship detained due to rag blocking crack in hull; USCG – towing vessel stability; USCG – improper assembly of shaft seals; CBP – fines for transporting aliens without proper documentation; TSAC meeting; SLSDC Advisory Board meeting; FMC meeting; FMC – Commissioner Brennan’s statement re NVOCC tariff filing; IMO – ISM Code, 2010 edition; and New Zealand – customs requirements for cruise ship departures.

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DOJ – Cosco Busan ship manager fined $10 million

The Department of Justice (DOJ) issued a news release stating that the ship management firm that operated the Cosco Busan in November 2007 when it allided with an abutment of the San Francisco-Oakland Bay Bridge spilling a harmful quantity of oil has been sentenced to pay a criminal fine of $10 million. The company pleaded guilty to a criminal violation of the Oil Pollution Act of 1990 (OPA 90), as well as felony obstruction of justice and making a false statement. The company was also ordered to implement a comprehensive compliance program that will include heightened training and voyage planning. The compliance plan will be subject to auditing and court supervision. (2/19/10).

UK – payment to pirates of ransom not contrary to public policy

The UK High Court of Justice, Queen’s Bench Division, Commercial Court ruled that it is wrong to categorize the payment of ransom to Somali pirates for return of a hijacked vessel, its crew, and its cargo as contrary to public policy. In the instant case, plaintiff owned cargo on a vessel that was hijacked on the high seas by pirates and taken to Somalia. Plaintiff had insurance with defendant insurer that covered losses due to piracy. Plaintiff filed a claim with defendant for the value of the cargo, asserting that the cargo was either an actual total loss or a constructive total loss. The vessel owner then paid a ransom and the vessel, its crew, and its cargo were released by the pirates. Defendant refused to pay plaintiff’s claim and litigation ensued. The court held that, in the circumstances, loss of the cargo was neither actual nor inevitable. Plaintiff argued that possibility of payment of the ransom should not be considered in deciding the insurance claim since such payment is contrary to public policy. In dismissing plaintiff’s assertion, the court stated that payment of ransom is not illegal as a matter of English law. It is true that payments of ransom encourage repetition, but if the crews of hijacked vessels are to be taken out of harm’s way, the only option is to pay the ransom. Diplomatic or military intervention cannot usually be relied upon and failure to pay may put in jeopardy other crews. Masefield AG v. Amlin Corporate Member Ltd, [2010] EWHC 280 (Comm) (February 18, 2010). Note: This is an altogether a highly commendable decision in a difficult case. No one favors the payment of ransom (whether in a maritime or land-based criminal situation), but the alternative of leaving the vessel, its cargo, and especially its crew in the hands of pirates is significantly worse. In the present situation, prevention of the hijacking in the first place is the only answer.

Somalia – Asian Glory used again for logistical support of pirates

The EU Maritime Security Centre-Horn of Africa (MSC-HOA) issued a press release stating that the hijacked vessel Asian Glory has again been used in logistical support of Somali pirates. On February 18, it put to sea from its anchorage in Heredeere and conducted logistical pirate transfers further south off the Somali coast. It then returned to its anchorage at Heredeere. The vessel has remained under pirate control since its hijacking on 1 January. (2/19/10).

Gulf of Aden – pirate activity remains high

The EU Maritime Security Centre-Horn of Africa (MSC-HOA) issued a press release stating that pirates continue to roam the International Recommended Transit Corridor (IRTC) in the Gulf of Aden in search of prey. Masters of vessels in the Gulf of Aden and the northwestern portion of the Indian Ocean are urged to keep a good lookout and to adopt the best management practices (BMP). (2/19/10).

IMO – piracy reported during December

The IMO issued a circular summarizing reports received during December 2009 of acts of piracy and armed robbery against ships. Reports of 27 such acts were received during the month. MSC.4/Circ.147 (1/5/10).

UK – ship detained due to rag blocking cracked hull

The UK Maritime and Coastguard Agency (MCA) issued a press notice stating that it issued a Detention Notice to a foreign cargo vessel when it was observed that the vessel had a crack in its port side hull plating in way of the number 2 water ballast tank. A photograph included in the press notice shows that a rag had been stuffed into the crack. Investigation revealed that the vessel had sailed from two previous ports with this hull damage with the company instructing the master to continue its voyages. The MCA noted that the vessel will not be released from detention until all items found are rectified to the required international standards. (2/19/10). Note: While enforcement action against ships, owners, and crew is oftentimes excessive, this may be an instance where the reverse is true.

USCG – towing vessel stability

The US Coast Guard posted Lessons Learned 01-10 regarding the importance of operating vessels with full regard for the vessel’s stability letter. Investigation of the 2006 sinking of the tug Valour revealed that, contrary to its stability letter, it was operated with open cross-connections between port and starboard fuel tanks. When the tug rolled in heavy weather, the cross-connection allowed for excessive transfer of fuel to the lower tank, exacerbating the roll and resulting in the sinking of the tug. (2/18/10).

USCG – improper assembly of shaft seals

The US Coast Guard issued Lessons Learned 02-10 regarding the dangers that may result from the improper assembly of shaft seals. A towing vessel had a new shaft seal installed. During assembly, three-quarter inch bolts were used rather than the M20 metric bolts that were called for. The two sizes are very similar, but not the same. The bolts soon loosened, allowing the seal assembly to separate from the flange mounting service. When astern propulsion was applied, water passed up the shaft into the engine room, resulting in flooding. The master intentionally grounded the vessel to avoid sinking. (2/18/10).

CBP – fines for transporting aliens without proper documentation

The US Customs and Border Protection (CBP) issued a notice announcing that it has made changes to the existing memorandum of understanding (MOU) relating to mitigation of carrier fines for transporting aliens without proper documentation. It has also recalculated the performance levels that CBP will use to measure carrier performance of its travel document screening responsibilities pursuant to the MOU. CBP will commence applying the revised performance standards on April 23. Carriers should submit a signed revised MOU by that date. 75 Fed. Reg. 7616 (February 22, 2010).

TSAC – meeting

The Towing Safety Advisory Committee (TSAC) and its working group on revision of NVIC 04-01, sponsored by the US Coast Guard, will meet in New Orleans on March 9-10. 75 Fed. Reg. 7615 (February 22, 2010).

SLSDC Advisory Board – meeting

The Saint Lawrence Seaway Development Corporation (SLSDC) Advisory Board will meet in Washington, DC on March 5. 75 Fed. Reg. 7650 (February 22, 2010).

FMC – meeting

The Federal Maritime Commission (FMC) issued an official notice regarding the March 3 public hearing on passenger vessel financial responsibility. Requests to participate in the hearing must be submitted by February 19. Participants must submit fifteen (15) copies of their prepared hearing statement by February 26. 75 Fed. Reg. 7599 (February 22, 2010).

FMC – Commissioner Brennan’s statement re NVOCC tariff filing

The Federal Maritime Commission (FMC) posted the statement of Commissioner Joseph E. Brennan in opposition to the petition for exemption for non-vessel-operating common carriers (NVOCCs) from the requirement to publish tariff rates online and adhering to those rates. He contended that granting the exemption exceeded the authority of the FMC under the Shipping act of 1984, as amended, and gave the NVOCCs an unfair advantage over vessel-operating common carriers, while making FMC oversight more difficult. (2/19/10).

IMO – ISM Code, 2010 edition

The IMO issued a news release stating that the 2010 edition of the International Safety Management (ISM) Code is now available. It includes all related guidelines and consolidates all amendments to the Code adopted since publication of the 2002 edition. (2/19/10).

New Zealand – customs requirements for cruise ship departures

The New Zealand Customs Service posted a list of customs requirements for cruise vessels departing from New Zealand. (2/19/10).

If you have questions regarding the above items, please contact the editor:

Dennis L. Bryant

Bryant’s Maritime Consulting

4845 SW 91^st Way
Gainesville, FL 32608-8135

USA

1-352-692-5493
dennis.l.bryant@gmail.com

http://brymar-consulting.com

© Dennis L. Bryant – February 2010

Redistribution permitted with attribution