The release of the British couple Paul and Rachel Chandler by Somali pirates at the weekend after 13 months of captivity has put the issue of piracy onto the front pages of the British press. While the focus has been on payment of a ransom, thought to be about USD1m, for the two pensioners who were sailing their yacht near the Seychelles before being seized the wider problem of Somali piracy has also been given unusually prominent coverage. About 20 ships and over 400 seafarers are currently being held.

News of the Chandlers' come as international moves to combat piracy continue and also after an awards ceremony last week to recognise individuals who have contributed to fighting piracy.

Piracy is a long running problem in Somalia

The Round Table of International Shipping Associations (RTisa) attended the 7th Plenary Session of The Contact Group on Piracy off the Coast of Somalia, at the UN in New York, as NGOs in an advisory capacity.

RTtisa made a statement on the industry’s continued commitment to deterring and defeating piracy off the coast of Somalia. It focused on: RTisa's development, production and distribution of the latest (third) edition of the Best Management Practices document (BMP3); the direct and indirect costs of operating continuously in a high-risk environment; urging all governments to robustly pursue the prosecution of those committing acts of piracy on the high seas; the need for better coordination of independent national convoys; and the need to provide industry associations with information on ships which are not following the reporting requirements of BMP3.

Meanwhile a medal ceremony and reception was held at the Chamber of Shipping where Foreign Office minister Henry Bellingham presented the European Defence Medals to 12 Merchant Navy Liaison Officers judged to have made an exceptional contribution working in partnership with the Royal Navy to combat piracy and ensure the safe transit of merchant vessels.

The president of the Chamber of Shipping and chairman of Oil Companies International Marine Forum, Jan Kopernicki, said: “Piracy is a long running problem in Somalia and growing off the West coast of Africa. This skilled collaboration between merchant seafarers and naval personnel to ensure sea routes remain secure is proving invaluable for all involved. I am delighted to congratulate the merchant seafarers involved and welcome the recognition that this medal offers.”

The 12 Merchant Navy Liaison Officers who were awarded European Defence medals are:

Captain Colin Shoolbraid, BP Shipping
Captain Michael Hawkins, BP Shipping
Captain Steve Barber, Shell International Trading and Shipping Company
Captain Roger Harding, The Maersk Company
Captain Geert Koffeman, The Maersk Company
Captain Howard Snaith, INTERTANKO
Mr Stuart Walker, International Marine Transportation
Mr Jon Hobbs, Carnival UK
Captain Ko Shindo, NYK Line
Captain Steven Moon, BW Fleet Management
Captain Aaron Cooper, Chevron Shipping Company
Captain Laureano Larrauri, Teekay
Mr Simon Church, EU Naval Force

back to top

The International Transport Intermediaries Club (ITIC) says that shipbrokers are being required to sign formal agreements with their principals in the light of a worldwide trend towards stricter anti-corruption legislation, and ahead of the implementation of the new UK Bribery Act in April 2011. Maritime London member Watson, Farley & Williams has published a comprehensive general overview of the Act.

According to ITIC, the typical document presented to brokers will set out the principal’s prohibition of the payment of bribes and/or the provision of other inducements.

There will often be a general ban on ‘inappropriate entertainment’ without defining exactly what that might be. Brokers will be required to confirm their adherence to the principal’s policies, and will often be required to agree to allow their records to be audited. And it is some of the ‘additional’ provisions that can cause the most difficulties. In the US, the Foreign Corrupt Practices Act 1977 (as amended) has been around for a number of years. It has not been unusual for a provision to be inserted into contracts saying that the other (non-US) party would not do anything in breach of the Act.

When the UK statute comes into force, if someone acting for a company (not just an employee but also a third party agent or broker) gives or receives a bribe, the company will need to demonstrate that it has adequate procedures in place to prevent such corruption. If the company cannot do so then it may face a criminal prosecution and be liable to a substantial fine. This requirement to demonstrate procedures has led to the appearance of written documents on shipbrokers’ desks.

ITIC claims director Andrew Jamieson says, “Over more recent times, a tendency has developed for companies to issue formal agreements setting out their ‘ethical trade policies’. ITIC has seen agreements from principals based in many different countries. These documents are often in the form of separate agreements sent to brokers to sign, although sometimes the provisions are included as part of commission agreements. Whatever the format, it is important to make sure that these agreements are not used as an excuse to insert other rights, obligations or responsibilities.”

Mr Jamieson cautioned: “It is unlikely that brokers will be able to avoid signing these types of agreements, and the greater emphasis on regulatory compliance will make them more common. Brokers should ensure that the provisions are limited to their own actions and that any rights granted to the principal are reasonable and directly relevant to the transaction in question.”

back to top

The London P&I Club has set a general increase of five per cent in annual P&I call rates for the 2011/2012 policy year. A statement says that the club’s financial position had strengthened substantially by the beginning of the current year.

It adds: “Since then, the number of claims has been lower than expected, but several members suffered large casualties in the first few months of the year, serving to demonstrate that overall claims costs can remain high even when the claim numbers moderate. The subsequent period has been more benign, particularly at the attritional level.”

The club’s owned mutual tonnage has increased by more than 2m gt during the year so far. The charterers’ portfolio has also increased, so that the club’s total entry stands at nearly 42m gt. The club says that fixed income holdings remain the dominant asset class in the portfolio managed by the club’s quota share reinsurer in Bermuda, reflecting the club committee’s risk appetite and tolerance.

This year to date, the return on the club’s investments and cash stood at 3.8 per cent at end-August 2010. At the same time, investment conditions remain uncertain and a cautious approach in this area continues to be an important part of the committee’s forward planning.

back to top

The Shipowners’ Club has announced it will make no general increase for the 2011/12 policy year due, it says, to a “strong underwriting performance coupled with a small investment return result in a USD23.9m overall surplus, increasing free reserves to USD159.2m.

Shipowners’ specialises in providing liability insurance to smaller and more specialised vessels.

Commenting on the recent Board decision, Charles Hume, CEO stated, “We have applied general increases during recent renewals but in view of our encouraging first half results and the challenging operating environment still being experienced by many of our members, we are pleased to announce now that no general premium increase will be applied for the 2011 policy year. That said, underwriters will be looking closely at the claims record and premiums paid by each Member and also assessing closely the risks associated with every vessel type. It is through this sort of prudent underwriting that the financial stability of the Club will be maintained.”

Unaudited half-year figures show gross earned income of USD96.3m, which represents a 14% increase in debited income over the same period last year.

The club notes: “In keeping with the experience of other P&I insurers, Shipowners reports a reduction in the number and value of claims despite the total number of vessels entered with the Club being reasonably constant at around 28,000 since 2007. With claims reduced and income increasing, the six-month underwriting performance is predictably strong. In this regard, Shipowners reports an anticipated technical account surplus of USD21.1m, producing a combined ratio of 75.4%.”

back to top

Shipping industry recruitment up

London-based global maritime recruitment specialist and Maritime London member Spinnaker Consulting has posted the strongest set of results in the company’s thirteen year history.

Crediting the recession for having produced a leaner cost base, Spinnaker’s chairman Phil Parry commented on the irony that it sometimes takes tough times “to remind us of some of the fundamental principles of business.”

The company says that since mid-August 2009 it has seen demand in the shipping recruitment market return to pre-crash levels. Turnover is back up to 2008 highs with a smaller headcount and lower costs.

“The impact on the bottom line has been entirely positive therefore,” said Parry.

“We really do have an excellent group of people right now who stuck out the downturn and whose knowledge and experience in shipping has helped them achieve record personal earnings this year.”

Despite unaudited turnover and profit both increasing by more than 50% the company is however cautious about the industry's prospects. “We are very conscious that absent a sharp rise in scrapping, vessel supply will shoot up over the next couple of years,” said the company’s MD Steve Cox. “Quite what impact this will have on demand for staff remains to be seen but we struggle to see how freight rates will be maintained.”

Spinnaker reports that in 2010 vacancy numbers in the technical and shipmanagement sector are up more than 60% on 2008 figures while professional services recruitment is running at 90% of previous levels and commercial vacancies 70%, but still otherwise higher than in any other year since 1997 when the company was established.

back to top

back to top

UK-based international maritime design, engineering and risk management consultancy BMT Group says that two of its senior executives have been invited to become members of Lloyd’s Register’s Technical Committee. Dr Phil Thompson, BMT group sector director for Transport and Muir MacDonald RCNC, managing director of BMT Defence Services Ltd will join the influential body that was formed over 100 years ago and advises on standards for the maritime industry.

Dr Phil Thompson commented: “The role of Lloyd’s Register’s Technical Committee is key to addressing the complex challenges currently faced by the maritime industry. I hope to add further value to the committee by providing access to the wealth of knowledge and experience that BMT has developed through its extensive maritime operations across the globe.”

Muir MacDonald went on to say: “With the need to exploit the sea in an ever more safe, environmentally responsible yet economic way, it’s an exciting time to bring BMT’s innovative insight and uniquely impartial perspective to this eminent committee’s work.””

back to top

The North P&I club has written a new handbook on collecting and preserving factual evidence which is being published by the Nautical Institute to help raise levels of responsibility and professionalism within the international shipping industry.

The Mariner’s Role in Collecting Evidence Handbook is a companion to the Nautical Institute's existing guide The Mariner’s Role in Collecting Evidence in Light of ISM.

The handbook was launched at a major maritime seminar in Newcastle upon Tyne last week. Speaking at the Institute’s seventeenth biennial ‘The Mariner and the Maritime Law’ seminar at the Hilton Newcastle Gateshead hotel, North’s joint managing director Paul Jennings said,

“Shipping is one of the safest and most sustainable forms of global transport but we face increasingly punitive legislation and liabilities. We thus need to do everything we can to demonstrate to politicians, regulators and the media that seafarers are responsible professionals - which includes responding correctly to and learning from any mistakes. This new handbook will help us all to do just that."

Tony Baker, head of loss prevention at North and the handbook’s main editor, said,"‘The most important reason for collecting and preserving good factual evidence is to establish what really happened. Once that it is known, it is relatively easy to work out how it can be prevented from happening again. The process leads to an increased awareness of potential problems and hence greater care and professionalism on board, making life safer for everyone.”

The handbook and guide package is available from The Nautical Institute, price GBP45, ISBN 978 1 906915 13 1. North is publishing its own version of the handbook for circulation to members as part of the club’s comprehensive series of loss-prevention guides.

back to top

Lloyd’s underwriter, Liberty Syndicates, has hired a dedicated marine hull underwriter. Rob Henbury has taken the position of class underwriter and will head up this line of business. Operating from Liberty Syndicates’ underwriting box at Lloyd’s, he will underwrite a full range of Marine Hull business including hull and machinery ‘all risks’, total loss, building risks and ancillary interests including port risks, loss of hire, tows and average disbursements.

Commenting on the appointment, Liberty Syndicates’ CEO Nick Metcalf said: “We’re delighted to welcome Rob to Liberty Syndicates. The addition of Marine Hull fills a crucial gap in our Marine Division and supports the strategy of enhancing the Syndicate’s product offering, which further increases our position as a must see market.”

back to top

Maritime London member Seatrade is now taking entries for their 2011 Seatrade Awards.

Established in 1989, the prestigious Seatrade Awards reward those who have demonstrated innovative solutions for safe, efficient and environmentally friendly shipping, in keeping with the goals and objectives of the International Maritime Organization.

Official entry forms can be downloaded from www.seatrade-global.com/awards. Deadline for entries is 31 December 2010.

back to top