ECDIS needs to be better understood

The Standard Club has warned owners that they must act now to comply with training requirements for the Electronic Chart Display and Information System (ECDIS). A special edition of the P&I club's newsletter Standard Safety explain the new legislation relating the mandatory carriage of ECDIS on most ships which is being phased in over the next few years.

The club advises its members that they need to understand that “ECDIS is radically changing how ships are navigated”.

It adds that this “quantum change” in how ships are navigated with ECDIS needs to be understood primarily by those on the ship’s bridge but also by those mariners in marine and safety departments ashore.

“If watch-keepers using ECDIS, even as an aid to navigation, are not properly trained in its use or fully understand the functionalities of each specific type of ECDIS unit, the risk of incidents resulting from ECDIS assisted collisions and groundings is likely to increase,” the club warns.

The club is distributing two training CDs, provided by manufacturers ECDIS Ltd and TRANSAS, with its newsletter, to explain ECDIS and to simulate how ECDIS operates.

The club says: “The legislative requirements for ECDIS training are daunting. The sheer numbers and scale of the training required is going to test many companies’ ability to complete the training in time and interpret the varying flag state’s requirements. Companies need to plan for this immediately if not already started.”

It notes that many companies already have ECDIS fitted onboard their ships and yet do not insist that the watch-keepers be trained in its use, the argument being that ECDIS is not being used as a primary means of navigation and is not a mandatory requirement.

The club comments: “This is a short-sighted approach and, in any event, ECDIS training will become a requirement under the revised STCW code when the Manila amendments enter into force on 1 January 2012.

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Dutch law offers scant Chapter 11 protection

As an increasing number of shipowners face cashflow problems due to the number of companies seeking Chapter 11 bankruptcy protection under US law seems also likely to rise. While Chapter 11 is often seen as given protection from ship arrests worldwide it appears this is not case everywhere, and in particular not in the Netherlands, something that could implications for vessels trading around the northern European coast and also for London based creditors.

Netherlands law firm AKD says that, while beleaguered shipowners may be looking increasingly to Chapter 11 filings to protect their financial interests, the fact is that Chapter 11 does not enjoy the force of law throughout the world, and certainly not in the Netherlands.

Haco van der Houven van Oordt, head of the shipping & offshore team at AKD’s headquarters in Rotterdam, says: “In the light of recent events, many observers are predicting a rush on the part of shipowners to seek Chapter 11 protection. But the Netherlands is a place where creditors can still pursue the attachment of assets despite a Chapter 11 filing.”

“Nobody – and that includes the banks - wants to see shipping companies forced out of business,” says Mr van der Houven van Oordt. “On the other hand, one cannot expect the banks to forgo the opportunity to ring-fence their losses in cases where they deem this to be the most propitious course of action.” He adds: “Some observers have predicted an increase by owners in the use of bankruptcy protection filings, and evidence from the banks suggests that a number of owners have indeed threatened to take such steps absent an agreement to restructure their debt.”

According to AKD Chapter 11 or similar protection does not enjoy worldwide currency. Mr van der Houven van Oordt says: “It works in those countries – including the US, the UK and in fact many others – which adopt a universal approach to cross-border insolvencies. But there are other countries, most notably The Netherlands, which adopt a territorial approach to bankruptcy."

“Banks can take action against the assets of a debtor in the Netherlands, even if the debtor is in liquidation or subject to similar proceedings. Under Dutch law, it is possible to act for banks and to auction vessels in the Netherlands, despite insolvency and/or liquidation proceedings being in place in other countries.” explains Mr van der Houven van Oordt.

AKD says that the Netherlands is also a jurisdiction in which very few claims enjoy priority over mortgage claims. Moreover, it is widely recognised as a haven for those looking to attach ships and/or to arrange for their swift judicial auction, and counter-security is seldom required. There are very few legal hurdles to pass in order to obtain leave for attachment and, in addition, there is no obligation for the claimant to pursue its claim in the courts of The Netherlands following the attachment.

Mr van der Houven van Oordt says, “While most mortgages are enforced in Rotterdam, a significant number are also dealt with in Amsterdam. All ships proceeding to Antwerp have to transit the River Scheldt, where they are also subject to Netherlands jurisdiction. And so it is that a number of mortgagees are known to have taken active steps in the past to direct vessels to ports in the Amsterdam – Rotterdam – Antwerp range for the specific purpose of bringing themselves within the jurisdiction of the Dutch courts.

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Responding to changing circumstances, and especially the widespread use of private armed guards, a fourth edition of the 'Best Management Practices for Protection against Somalia Based Piracy' (BMP4) has been launched. At the same time the International Chamber of Shipping (ICS) in association with the European Community Shipowners' Associations (ECSA), has compiled a reference document collating the policy and rules of flag states on the carriage of arms and private armed guards on board vessels.

Supported by all major shipping associations, the BMP4 provides invaluable information to help all shipping companies, ship's masters and crew to fully prepare their ship for transit through the High Risk Area, in order to avoid, deter or delay piracy attack.

Changes include a section on the three fundamental requirements of BMP 4, an aide mémoire on how to avoid being a victim of piracy, a checklist for company planning and, expanded guidance on the possible use of private guards. BMP 4 is endorsed by EUNAVFOR, NATO, CMF, UKMTO and INTERPOL.

ICS says that, since they were first published, implementation of Best Management Practices has consistently proved to be the best defence against Somalia based piracy. The tabulated information on flag states' rules has been added to the ICS website and is proving to be a popular reference tool for shipowners and other interested parties within the shipping community.

Kiran Khosla, ICS director of legal affairs and secretary of the ICS' maritime law and insurance committees, says: "When the information is compiled together like this it is interesting to see the similarities and variations in approach throughout the international community. Piracy remains a major cause for concern among shipowners and the wider shipping industry and we are not surprised that members are keen to ensure they are up to speed with the latest recommendations and advice.

"The consensus view among ICS national shipowner associations remains that private armed guards are a clear second best to military personnel. However, in view of the current crisis, ICS has had to acknowledge that the decision to engage armed guards, whether military or private, is a decision to be made by the ship operator after due consideration of all the risks and subject to the approval of the vessel's Flag State and insurer," she said.

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The film is presented by Edward Stourton

Steamship Mutual, a leading P&I Club and Maritime London member, has produced a film entitled “PIRACY – The Menace at Sea” designed to assist masters and their crews to implement effective action to deter piracy and to reduce the vulnerability of merchant vessels in areas affected by pirates.

The film focuses on Best Management Practice Guidelines (BMP) issued by the shipping industry and is presented by former BBC newscaster Edward Stourton.

The film has so far been well received, described by the Royal Navy as "essential guidance for any Mariner who is intending to operate in or close to the Indian Ocean."

Chris Adams, head of loss prevention at Steamship Insurance Management Services said: “It is important that all vessels transiting the high risk area have a copy of this DVD onboard, and that seafarers watch it in order to maximise their prospects of avoiding capture. The human cost of piracy is less prominent than it should be and we owe it to our seafarers to do the most that we can to assist them from becoming victims of this unacceptable menace.”

See www.simsl.com/Publications/order-form-request-a-copy.html to order a copy.

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Norwegian Shipbrokers Association (NSA) and shipowners’ association BIMCO have launched a series of consultations with the European and Asian sale & purchase sector on the revision of SALEFORM93.

The industry’s most widely used standard contract for the sale and purchase of secondhand ships, SALEFORM 93, has been the subject of a revision process by the NSA and BIMCO over the past 12 months.

Three half day SALEFORM consultations will take place in Oslo (Thursday 22 September), London (Monday 26 September) and Singapore (Thursday 6 October) and are open to all. Input from these meetings will be taken to BIMCO’s Documentary Committee meeting in November.

More details can be found at: www.shipbroker.no or www.bimco.org

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The North of England P&I club has reported free reserves increasing by 30% to stand at USD312.4m at 20 February 2011. North also reports a rise in premiums to US$314.2m and a growth in net assets to USD810.4m.

Joint managing director Alan Wilson says: “We have seen a substantial increase in our free reserve, achieved via a positive underwriting surplus of USD55mwith a combined ratio of 78.8% and an investment income of USD17 million. Financial stability is vitally important and North is entering its twentieth consecutive year of no unbudgeted supplementary funding.”

Mr Wilson also states that the strength and conservatism of the club’s balance sheet produces capital rated at ‘AAA’ using Standard & Poor's capital model.

“This strength is underlined by the club’s internal assessment of regulatory capital, which shows the available regulatory capital is in excess of 200% of the anticipated Solvency II requirement.”

North says that it has has directed significant resource and time to ensuring the club will be fully compliant with Solvency II requirements.

Joint managing director Paul Jennings confirmed that total entered tonnage reached a record 150m gt at the 20 February 2011 renewal and that the club is making progress towards its strategic aim of insuring a significant percentage of the world’s fleet .

However Mr Jennings says that North “moves forward with an air of caution, ensuring that the club remains diligent in order to maintain its current robust position”.

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The Shipowners’ Club has set a dedicated team of underwriters and claims handlers to service its expanding book of business in the offshore sector.

The P&I club, which specialises in covering small and specialist vessels worldwide, has announced measures to reorganise its London branch. This included the setting up of two internal syndicates, bringing together both underwriters and claims handlers specialising in specific geographical regions; a third syndicate will focus on the offshore sector. Providing liability insurance to the vast array of offshore and platform support vessels, from anchor handlers, tugs and workboats to the fast crew boats employed in the energy industry, already forms a prominent part of the Club’s portfolio. Shipowners plans to develop its reach to owners and brokers of this vessel type even further.

Charles Hume, chief executive of the Club comments: “The syndicate concept is one that we believe will ensure the club’s high service levels are maintained and indeed enhanced. We recognise that our membership in the offshore sector represents a key element of our overall business. We expect this specialist syndicate to provide both outstanding service to existing Members and to further develop our market share in this area, which demands significant expertise.”

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Braemar (incorporating The Salvage Association) has announced the dates for its latest Port and Shipyard Familiarisation courses to be held at Falmouth. The courses provide background knowledge and understanding within the marine insurance claims market on aspects of ships, shipyards and their repair procedures.

Taking place between 4 – 7 and 18-– 21 October, the courses will deliver a practical insight into port operations, ships and ship repairs, and provide a bridge of knowledge between marine claims handling professionals and the ship repair and ship building sectors.

The courses are primarily focussed on candidates from the marine insurance market who will be given expert guidance throughout the course by an experienced marine surveyor acting as mentor.

Reporting that the current quota of courses are filling up fast, Nigel Clark, managing director of Braemar (incorporating The Salvage Association), said: “We are delighted to continue to offer to this sector of the marine market a leading training programme which provides claims handling staff with a practical insight onto the technical aspects of marine surveying, casualty investigation and reporting techniques, together with a hands on guide to ship and ship repair operations.”

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Julie Lithgow takes up new role in September

The London based Institute of Chartered Shipbrokers has appointed Julie Lithgow as its new director. Ms Lithgow has a significant track record within the maritime industry and has high level management experience within both the regulatory and commercial sectors. In her current position as head of business intelligence at Pole Star, Ms Lithgow works with governments, naval authorities and ship owners on vessel tracking systems, ship security and IMO regulations.

Previously communications and marketing manager for V.Holdings, she also held the position of planning and development manager of the Nautical Institute, the professional body for qualified seafarers.

Ms Lithgow said: “I am delighted to be joining the Institute of Chartered Shipbrokers as it celebrates its centenary year. Its reputation as the leading organisation for shipping professionals worldwide is well established, and Branch growth across the globe reflects this. The shipping industry has an increasing need for professional education provision so this is a very exciting albeit challenging time for the Institute and its relevance has never been greater.”

She continued: “It is also a great privilege to follow in the footsteps of Alan Phillips whose vision of moving the Institute always forward, increasing its international presence and ensuring the highest standards of professional ethics continues to inspire us.”

Ms Lithgow will take up her position in September.

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