Marine surveying profession plays an important supporting role to the many parties, stakeholders and regulatory bodies in the global commercial and leisure sectors of the marine industry. About 90% of the world trade is done seaborne.
Marine surveying profession plays an important supporting role to the many parties, stakeholders and regulatory bodies in the global commercial and leisure sectors of the marine industry. About 90% of the world trade is done seaborne.
Marine surveying profession plays an important supporting role to the many parties, stakeholders and regulatory bodies in the global commercial and leisure sectors of the marine industry. About 90% of the world trade is done seaborne.
Marcos A. Gonzlez R. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 2
Assignment No.1 Task No. 1 The marine surveying profession plays an important supporting role to the many parties, stakeholders and regulatory bodies in the global commercial and leisure sectors of the marine industry a) Discuss the developments in trade and trading patterns in both sectors of the marine industry b) Explain the role of the regulatory bodies involved in the marine industry c) Explain the roles of the parties and stakeholders involved in the marine industry Minimum criteria to be met: 1.1, 1.2 and 1.3
Discuss the developments in trade and trading patterns in both sectors of the marine industry Commercial Sector The commercial sector is by far the largest of the sectors in the marine industry since about 90% of the world trade is done seaborne. Due to its size and complexity it has to be explained dividing it into several groups but before, an explanation of the trading patterns has to be done in order to understand how big and complex really it is. In the last years of the 20 th century Asian countries leaded by China became the manufacturers of the world. A combination of cheap labor, immense natural resources and favorable laws for internationals companies to establish their factories in countries like China, Vietnam, India, Thailand and Philippines made Asia the factory of the world for a very wide range of products such as clothing, electronics, cars and even ships. Despite their natural resources availability in the above mentioned countries, the industrial growth requires now huge quantities of raw materials that have to be imported from different places around the world depending of course on what material is needed, distances between ports, cost associated and even political issues. a) Crude, oil products and Gas Energy is required in almost any human activity in these days thats why is not a surprise that oil and its products, gas and coal are among the major commodities traded worldwide. The oil price has been around the 100US$ per barrel during the last years but it doesnt mean that the quantities traded have been reduced, on the contrary it continues rising. Traditional supplying countries as those in the Persian Gulf, Russia and Venezuela have new competitors in the market especially those countries with offshore industry such as Mexico, UK and Brazil. But oil not processed and refined has little use. Some countries Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 3
such as Ecuador export oil and import refined oil products due to it lacks of refineries. Heavy oils from Venezuela can processed by its own refineries or especially adapted refineries in USA or Curacao. Crude oil is produced worldwide with some countries that held bigger reservoirs than others and some countries with nothing at all, but no one, despite its reservoirs, production and exporting capacity can reach the 15% of the market share. On the other hand, there are more crude oil importing countries than producers but their crude oil imports will depend on how industrialized they are and how much crude oil they can produce and refine. A clear example of this is the USA who is one of the largest producers in the world but due to its industrialization and life style it has to import large amounts of crude to compensate the deficit, being one of the largest importers as well. To make this picture clearer, the USA imports more crude oil than the next 3 countries (together) in the top importing ranking. Lets see some of the largest importers and exporters of crude, oil products and gas Crude Oil Oil Products Gas Ranking Exports Imports Exports Imports Exports Imports 1 Saudi Arabia USA Russia European Union Russia European Union 2 Russia China European Union Netherlands Qatar Japan 3 Iraq Japan USA China Norway USA 4 Iran India Netherlands Singapore European Union Germany 5 Nigeria Korea, South Singapore USA Canada Italy 6 UAE Germany Saudi Arabia Japan Algeria United Kingdom 7 Norway Italy Korea, South France Netherlands France 8 Angola France India Korea, South USA Korea, South 9 Venezuela Spain Kuwait Germany Indonesia Turkey 10 Kuwait Netherlands Venezuela Spain Bolivia China Table 1. The world largest importers and exporters of crude oil, oil products and gas. Source CIA World Fact Book (12)
It is easy to see that some countries are included in both categories for the same product, e.g. the USA is the 3 rd oil products exporter and the 5 th importer at the same time. This can be somehow related to the location of trading hubs in locations such as Singapore, Rotterdam or the some of the Mediterranean countries. Large importer and exporter countries use to share the markets they attend or the supplies sources they have. For example, the USA buys crude from a large list of supplying countries in order to create competition in the price and avoid a cut in the supply due to political issues or natural disasters. Exporting countries do the same in order to avoid dependence on one single customer or due to political issues, e.g. is Venezuela who has changed its traditional relation with the USA and start to export higher quantities to Asian markets, especially China.
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According an article published by www.reuters.com by Ron Bousso on October 4th 2013 ( 1 ), there is a shift in the trading patterns of oil related to fewer taxes and regulations, lower feedstock and energy cost in refineries located in the Middle East, Asia and the USA. These favorable conditions allows them to compete in better conditions to refineries located in Latin America or Europe that serve local markets. In order to do so, they are using larger product carriers known as LR2s around 75.000 tones. Mr. Bousso quotes in his article Mr. Dario Scaffardi who is general manager of Saras group (independent refinery in Italy) who said during the Oil and money conference held in October 2013 in London that The whole dynamics (of trading) is changing The basics of refinery have always been to have refining centers close to the consumption centers and crude oil on the long haul and the products were in the short haul. A lot of logistical problems related to bringing small parcels of products to a variety of small ports These changes are also related to the availability of determined crude oils to some refineries, e.g. are the refineries located in the US Gulf Coast which have large amounts of light sweet crudes produced in the areas around them. With capacities of 600.000 bpd, they are aiming to the international market (especially Europe) instead of remain with local customers only. In order to compensate the shipping costs, the tankers in use now can be twice bigger than those only 20 years ago, allowing to reduce 3 to 4 US$ per barrel according to what Mr. Tony Fountain, head of refining and marketing at Reliance Industries said in the conference. Its clear that competing with overseas refineries that can sell large quantities at lower cost is not easy to local refineries located across Europe which caused many of them to close down. Another change is the large storage terminals and hubs that guarantee somehow the supply in cases where the shipping suffers interruptions as was mentioned above. It has to be kept in mind that the market is in a continue change, according www.oilindependents.org (2) Brazil has plans to reach the 5 million bpd in 2020, Colombia has doubled its production in just 5 years and in the present are close to 1 million bpd. Argentina has found a 6 billion barrels reservoir in Vaca Muerta formation. Despite the short distance from South America to USA, China is working hard creating links with several countries in the region in order to ensure energy sources, increasing the traded quantities from 100.000 bpd in 2000 to around 1 million bpd in the present.
Latin American trading patterns are particularly important for the author of this assignment due to his geographical location as surveyor. Marianna Parraga prepared an analysis for www.reuters.com (3) where is mentioned how Latin American countries are rising their oil products imports from the USA despite the region has some countries with huge reservoirs of oil (Mexico, Venezuela, Brazil, etc.). Since 2008 the top importers countries doubled the quantities imported and at the same time, oil exports from the top exporters to USA has fallen around 20%. There are several reasons for the increased imports such as growing economies, new power plants (fueled by diesel, fuel or gas), increase in vehicles Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 5
sales, etc. Since the refineries planned to be built in the next years are in the early stages of design in most of the cases, its expected that the imports of oil products will rise even more since new refineries will take long time to be in service and theres no sign of a economical recession in the region as a whole despite bad signs in Argentina and Venezuela which is a particular case where politics has a strong influence. Gas is considered to be a cheaper, cleaner and environmentally friendly fuel. The largest exporter in the world by far is Russia with the European Union as its best customer which at the same time is the first importer of the world 400% above the 2 nd in rank, Japan. It is repeated the situation that some countries are among the largest exporters and importers at the same time such the above mentioned European Union, 1 st importer and 4 th exporter at the same time with a deficit of around 300%.
b) Dry bulk cargo Dry bulk can be a very interesting sector to analyze. According to Genco Shipping & Trading Ltd. (www.gencoshipping.com) (4) in 2012 approximately 4 billion tons of dry bulk was traded seaborne, which is one third of the whole dry bulk traded by sea. The majority of bulk cargo is constituted by iron ore, coal and grains. With minor quantities cement, agricultural products, mineral, forest products and others. In overall, between 1999 and 2006 trade of bulk cargoes rose 35% which is in most of the cases related to economies such China. It has to be kept in mind that cargoes such as grains and coal are much related to seasonal changes which can lead to changes in trading patterns due to expected or unexpected weather related issues. The freight rates can vary tremendously in very short period of times due to many factors, especially the offer and demand of commodities and of course, the tonnage available at any moment. This volatility is also related to the size of the ships due to the fact that Capesize vessels are basically used for the steel and thermal coal industries. Panamax vessels are more commonly used for the transportation of grains and soybeans, steel products, cement, bauxite and alumina while handysize and handymax vessels have more stable markets than larger vessels as they serve a wider market with trading patterns much more dispersed (5).
When it comes to the main traffic areas, Asia appears again in the top of the list. Data obtained from Fearn researchs (Astrup Fearnley) tracking in 2003 60% of the dry cargo by volume was destined to Asia and 30% to Europe in the segment of vessels over 50.000 dwt. All other continents are basically exporters (5)
Steel industry is by far the major commodity traded in the sector with around 50% of market share in volume of the seaborne trade; this includes materials associated with the steel production such as iron ore, coking coal, scrap, manganese, etc. Other dry bulk commodities include thermal coal, grain, forest products, fertilizers, bauxite and alumina and other cargoes. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 6
Grain has some particularities to be considered, for example grain requires more DWT tonnage than an equivalent weight of heavier iron ore or coal. Also, grain cargoes usually take longer times in port against much more shorter times for steel and coal highly efficient terminals. Weather related problems can affect strongly the grain market being rains and temperature changes the most critical issues. This can cause changes in the tonnage demand with very short notice in determined areas which will depend on the availability of the grain considered in other countries that can supply the unexpected shortage. Owners take deep look at all these and other factors when consider options of scrapping, upgrading or new building. Iron ore Iron ore with limestone and coking coal are the raw materials for manufacturing steel. It can be found in different quantities all around the world. According www.blackiron.com (6)
the world production was 2.4 billion tones and in 2012 according Genco Shipping (4) were exported 1.1 billion tons of steel worldwide being China (which is the worlds largest producer as well), the European Union, Japan and South Korea the main importers and Australia, Brazil, India and South Africa the main exporters. Its interesting that only 3 companies, Vale SA, BHP Billiton Limited and Rio Tinto plc produced in 2010 around 63% of the total seaborne market (information of AME Mineral Economics). From the total produced quantities only around 42% are traded by sea according to Macquarie Research and in 2010 reached for first time the 1 billion tons shipped according the International Steel Statistics Bureau www.issb.co.uk (7) , a 12% increase compared to 2009 levels.
Figure 3. Seaborne supply and demand of Iron Ore. Source: Black Iron (6) Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 7
Figure 4. Iron Ore production by country in the last years and near future expectations with the data available at 2010. Black Iron (4) When it comes to the vessels used for Iron Ore transportation, most of the time Capesize vessels are used in long haul trading routes. Since capesize vessels are the biggest bulk carrier vessels, only few ports and terminals around the world can receive these ships, its clear that these ports will be located especially in the countries with large imported / exported quantities.
Coal Coal can be divided in coking (also called metallurgical) coal and steam (also called thermal) coal being used to produce coke to feed blast burners in steel production and as fuel for power generation respectively. It Coal is a very abundant commodity with expected remaining reservoirs that could last between 150 and 200 years with the current extraction rates when compared with around 50 years for gas and oil (it varies on different sources consulted). Since it is produced in a wide list of countries worldwide, theres no dependence of a particular region. The quantities of coking coal traded will depend basically on the steel manufacturing industry and as was stated above, the steel production and trading is rising and so is the coal consumption which has increased faster than any other fuel since 2000. The 5 biggest coal consuming countries are China, USA, India, Russia and Japan being Asia the biggest market by region according data from the World Coal Association www.worldcoal.org (8) . In relation to the reservoirs, we find again China, USA, Russia and India as the countries with the biggest reservoirs. Most of the countries have coal reservoirs but in many cases theyre not economically or technically extractable. The steam coal as stated previously is used in power generation with a recent rise in the quantities traded due to its lower price compared with more expensive fuels as gas and fuel oil. Since power generation is dependent on the weather, the traded quantities and Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 8
patterns are driven by seasonal changes. In relation to the major exporters Australia again is in the list and China again is the major importer worldwide. Coal is usually traded in Capesize and Panamax vessels in Asia and in the case of Europe, theres a preference for Panamax vessels according Genco Shipping (4)
Grains Grain trading has a much longer history when compared with oil and coal. It can be traced back to the Phoenicians age the first grain trades from the actual Lebanon to the colonies established in the Mediterranean Sea and other nations around the Black Sea. Even then, the trading was subject to seasonal fluctuations, mostly weather related. As the centuries passed by, the grain trade was not only related to seasonal changes but also it was related to the empires politics, as its mentioned in The ancient mariners by Casson, L (9) where the author states that one of the reasons of the Roman Empire used to conquer Egypt was to cut the grain supplies to other rival nations rather than guarantee the own supply since Rome was a minor customer for Egypt. This can give an idea of the importance of the grain trade through the mankind history. In the present the grain trade is not longer used as excuse for conquer a rival nation but has become more complicated in other aspects. Todays contracts between buyers and sellers include information as grain grades, standards used and gluten content when the grain is used for human consumption and the metabolizable energy of the grain when used for livestock. At the end, the value of the grain depends of its nutritional content rather than the availability or abundance of certain grains but when within a certain grade or quality, price drives the competition between exporters. Grain has an interesting consideration, its costly to transport when compared to its relative value. Todays trading patterns actors at international markets are large scale millers and processors as the customers and on the other side, the sellers can be international grain trading firms, and in some countries national exporting trading agencies. The contracts are usually based on standard contracts established by the Grain and Feed Trade Association (GAFTA) based in London which is constituted by traders, brokers and processors coming from around 76 countries (www.gafta.com). Contracts for international trade of grain include certificates of quality issued at the exporting country where the quality standards agreed are assured by an official agency. Other factors that may not be covered by the official grades given by the exporting grades but that can be included in the contract can be moisture or dockage. Grains are tested against physical attributes (easy to test and low cost) and intrinsic characteristics (expensive and longer time to get the results). Surveyors are most likely to be hired on the first case rather than the second one. In relation to trading, it will be sub divided in several groups depending on the grain. Using the November 2013 United States Department of Agriculture circular data tables, it will mentioned the 5 major importers and exporters for the trade year 2012 / 13 with the quantities traded in thousands metric tons
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Wheat Exports
Thousand metric tons
Country Quantity Exported (2013) Quantity Exported (2010) Variation 2010 - 2013 1 European Union 22.621 22.279 342 2 Australia 21.269 13.764 7.505 3 Canada 18.581 18.992 -411 4 Russia 11.289 18.556 -7.267 5 India 7.060 60 7.000
As it can be seeing, India was in 2010 far away from being a major exporter but lately the government lowered the floor price in order to make it more competitive in the international markets. Imports
India lifted the ban for exports of non basmati rice in 2011 making Indian rice very competitive in the international markets, especially in Africa where Vietnam, Thailand and Pakistan lost terrain as traditional suppliers.
Country Quantity Exported (2013) Quantity Exported (2010) Variation 2010 - 2013 1 Argentina 29.405 19.030 10.375 2 Brazil 26.074 8.627 17.447 3 Ukraine 15.100 10.977 4.123 4 European Union 7.855 4.293 3.562 5 Australia 5.450 4.414 1.036
Imports
Thousand metric tons
Country Quantity Imported (2013) Quantity Imported (2010) Variation 2010 - 2013 1 Japan 17.775 2.228 15.547 2 European Union 11.805 6.734 5.071 3 Saudi Arabia 10.200 9.047 1.153 4 South Korea 8.264 4.000 4.264 Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 11
5 Mexico 7.550 750 6.800
The major producers and consumers will not be mentioned since it is considered more important for this assignment the major importer and exporter countries. The reason the variations in quantities imported or exported was included just to show how a country or even a region traded quantities can vary in just 3 years by millions of tons. Whatever a country is trading today, can be completely different 2 or 3 years and it will depend on many factors that will not be covered in this assignment.
c) Containerized Cargo Containers are used to carry basically any kind of cargo since therere about 16 different types of containers according www.iccl.org (verificar referencia). They can be handled easily by cranes, lifts and reach stackers allowing relatively short times in port when compared with the volumes of cargo handled. Once in the pier, usually theyre transported by trucks and then continue by truck or train to its final destination. With data from the World Shipping council is shown the top exporters of containerized cargo of 2010. Its very easy to see how China is by far the major exporter of the world by almost 3 times its closest competitor (USA). In relation to continents, again Asia has 7 countries in the top 10 list.
Top Exporters (millions TEU's)
Country 2010 1 China 31.3 2 USA 11.2 3 Japan 5.7 4 South Korea 5.2 5 Taiwan 3.4 6 Thailand 3.4 7 Germany 3.0 8 Indonesia 3.0 9 Malaysia 2.5 10 Brazil 2.3
In the importers group, the names are basically the same with some slight difference in the rank order. Again, Asia has more countries in the list than any other continent (7 countries) and the difference between the first 2 places and the rest of the list is considerable big. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 12
Top Importers (millions TEU's)
Country 2010 1 USA 17.6 2 China 12.0 3 Japan 6.1 4 South Korea 4.5 5 Germany 2.8 6 Other Arabian Gulf 2.7 7 United Kingdom 2.5 8 Indonesia 2.5 9 Taiwan 2.5 10 Hong Kong 2.5
General comments for commercial sector As can be seeing, most of the seaborne trade in all segments takes places in Asia (China, South Korea, and Japan especially), USA and the European Union with increasing participation of emerging economies such India and Brazil. Australia has a very strong presence in dry bulk cargoes. This has to be taken in account for the future surveyor at the moment of establishing his business on his own account. It is of particular interest for the author of this assignment the Latin American area since its the area where his business will be established. Its clear that Brazil and Argentina are the biggest bulk cargo exporters in the region with iron ore and grain respectively. The free trade agreement between USA and Colombia made possible that 800 Colombian companies entered the North American markets since the agreement entered into force according recent statements from the USA secretary of state John Kerry in the Organization of American States on November 18, 2013. Venezuela, Ecuador, Brazil and Mexico are the top exporters of oil but Colombia, Trinidad and Tobago are getting into the business too. Panama expects to open the new expansion of the channel in 2015, which have a strong enough reason for ports in the eastern seaboard of the USA to make the modifications needed to handle post panama vessels, (Baltimore, Norfolk and Miami ports and others considering the option). According the Panama Canal Authority, by 2025 will be doubled the cargo volume transited in 2005 but some of the critics against the expansion is that the recent years expansion in trade between the USA and China cannot be sustained for the next years as some adjustments have to be made. In any case, the expansion will make it easier for the east coast ports of the USA to trade with Asia. It has to be considered that the investments needed to handle post Panamax ships are huge and wont happen shortly. According an article of Steve Banker in Forbes (www.forbes.com) the best guess is that growth of ocean cargo to the east coast (of the USA) from Asia will exceed that to the west coast, but not be dramatically larger in any given year. Still, over the course of a few decades, cargo flows could look dramatically. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 13
Its clear that world trade has expanded several times since just few decades ago as was shown in the table below. Theres no reason to believe will be a contraction that reduce the volume of cargoes to those of 1970s decade, what would happen and was shown also, is changes in the trading areas from one country or region to another.
It just needs few minutes to see that all continents have increased somehow the traded volumes of cargo somehow. Oceania for example, has very small quantities of oil traded but increased several times the dry cargo loaded. Probably the most dramatic change is Asia with an increase of almost 15 times in the dry cargo segment, leaded without any doubt by China but followed by countries as South Korea, Japan and Indonesia.
Leisure Sector This sector is not well defined since the vessels that can be intended to be used as leisure, at the same time can have a commercial purpose such as yachts chartered by their owners but to the effects of this assignment, leisure will be understand as those vessels used for recreational and sports purposes including motor yachts, sail boats, small crafts, etc. used or not with commercial purposes. It has to be kept in mind that not all small crafts belong to the leisure sector e.g. pilot boats. The leisure sector when compared to the commercial sector can seem very small but when looking in detail, huge quantities of money are discovered. This can be easily seen in the report of Super Yacht Intelligence 2012 (www.superyachtintelligence.com) where the super yacht industry is deeply studied (13) (super yacht is defined in the study as those yachts of 30 meters of length or more). Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 14
Quoting information of Super Yacht Intelligence, the super yacht industry directly or indirectly contributed with 24 billions of Euros, around 140.000 land based jobs, 33.000 crew and 100.000 day workers / contractors to the world economy. Direct contribution is understood as the total amount of services consumed by the yachts (e.g. salaries, operation and maintenance, chartering, etc) and indirect contribution is understood as those expenses associated with the supply chain needed to the industry to work such as manufacture of components used on board, brokerage services, administration services, etc. If we consider that the super yacht fleet worldwide is around 4000 units in 2010 and most of the sector is based in Europe and North America, the importance of the sector is paramount in those countries with maritime leisure tradition especially when its clear that the number of yachts have been increasing continuously for at least more than 25 years (quadrupled since 1985 until 2010) with a strong increase after 2000 and without indication that the growth will stop (together with its impact on the world economy).
Fig 5. Yachts delivered per year since 1985 Fig 6. Fleet size since 1985 Source: Super Yacht Intelligence
The building industry is mainly based in Europe where are built almost 70% of the total deliveries worldwide. North America follows in a far second place with 21% and the rest of the world with just 10%. The 2012 order book reflects minor changes, which means that no significant changes are expected in the building industry. A deeper look at the yacht building yards locations is shown in the figures 7 and 8. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 15
Fig 7. Origin of ships built by country Fig 8. Breakdown of the order book by country Source: Super Yacht Intelligence
Italy, Netherlands, Turkey, Germany and the UK are the countries with highest presence in super yachts building industry. Europe is not only the origin of most of the super yachts but also the predominant base for them, being the Mediterranean sea ports the preferred choice for homeports and cruising. Leisure sector has the particularity that since in most of the cases the yachts and craft are not intended to make profit so they can spend weeks at port. 6 months per year in its home port is a normal period of time for a yacht. Other data about the yacht industry Most of the super yachts are motor powered with 79% of the present fleet with tendency to increase based on the present order book. Average fleet age 21 years Annual expenditure average (not including crew wages and berthage): 1.650.000 Euros Average LOA: 40.3 meters Switzerland (without any coast) is one of the highest contributors to the banking sector associated to the yacht industry. The numbers related with smaller boats differ a lot from those of the mega yachts, where for instance in France are registered 880.000 boats in 2005 (Maine International Trade Center, International Opportunities for Maine, Boat Building and Marine Trade). In this sub sector of the leisure, the USA have won a good reputation for building high quality boats which together with the dollar weakness of the recent years have increased the exports to Europe. Countries such as Italy, Canada and France import around 1 billion dollars in boats per year, Spain imported in 2007 1.6 billion dollars. If we consider that Italy and France are the 1 st and 3 rd worldwide manufacturers of boats, we can create a mental image of the size of this business. New countries are mentioned in this sector such as China wheres estimated that the pleasure market reach 10 billion dollars worth next decade. The United Arab Emirates Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 16
have a fleet of 30.000 leisure boats and have plans to expand the berthing capacity by 30.000 before 2012. The smaller the boat the less chances the owner require a surveyor but for those surveyors working on the geographical areas mentioned above and with the proper experience, always will be opportunities since the money involved is huge and the fleet is quite big.
Explain the role of the regulatory bodies involved in the marine industry
The regulatory bodies are those with capacity in implementing rules for the marine industry. It will be included in this section the insurances used in the industry because of their interest and the pressure they can impose in the safety and protection of the environment. The maritime industry mixes 2 very important things for the human being, money and human life. In the last decades the environment has join the group due to the impact caused by some accidents and the day to day activities in the marine environment and as a natural consequence of the global awareness in the last years regarding the environment. There are many parties involved in the maritime safety, some of them as regulating bodies and others as regulated parties. Maritime administrations (including Port State Control authorities) and Classification Societies are important actors in the regulating bodies side. The International Maritime Organization formed by members of the maritime administrations, major classification societies and other organizations as observers is the major regulating body worldwide and serves as a meeting place to discuss and update the maritime legislation. International Maritime Organization IMO The International Maritime Organization cannot be considered a regulatory body but is the source of the base legislation used by the maritime administrations worldwide to operate and assess foreign and national ships (it adopts legislation while maritime administrations implement legislation). It is a meeting point where delegates of 169 member countries discuss the technical issues of the maritime industry (no commercial issues are discussed) with the goal of improving the safety and security on board and the protection of the environment. According the organization web site (www.imo.org) The International Maritime Organization is a specialized agency of the United Nations which is responsible for measures to improve the safety and security of international shipping and to prevent marine pollution from ships. It is also involved in legal matters, including liability and compensation issues and the facilitation of international maritime traffic The maritime industry is probably the most ancient international industry in history and during centuries it was managed separately by each maritime nation, especially those with strong maritime tradition, mostly located in Europe. Marianne Harvey in its paper The Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 17
Origins of IMO (14) says Each shipping nation had its own maritime laws. There were comparatively few international treaties and those that existed were not accepted or implemented by all maritime states. The result was that standards and requirements varied considerably and were sometimes contradictory. It was not only 1948 when the recently born United Nations Organization convened a conference to be held in Geneva between February 19 th and March 6 th in order to study the issue of the maritime industry regulations, especially those related to safety. The result was the Convention for the Establishment of an Inter-Governmental Maritime Consultative Organization (IMCO). Even though, it was not until 10 years later that the convention was accepted by signing countries, mostly because there were doubts about the role of the organization regarding the commercial side of the industry, which some countries (Denmark, Norway and Sweden) intended to include in the duties of the organization as they try to do in 1955 in the 7 th session of the Transport and Communications Commission and in the 10 th session of the General Assembly in the same year. With the Japanese deposit of its acceptance done on March 17, 1958 were met the conditions given for the coming into force of the convention. During that 10 years period between 1948 and 1958 occurred the 3 rd SOLAS Convention and the International Convention for the Prevention of Pollution of the Sea by Oil (OILPOL Convention). Also, several regulations were revised and/or updated such as Collision Regulations, safety of navigation, meteorology and ice patrols. During the 1 st IMO assembly, held in London between January 6 th and January 19 th the organization accepted the responsibility of updating a set of established treaties including the 1948 SOLAS (which entered into force in 1952), the International Regulations for Preventing Collisions at Sea, the International Code of Signals and the International Convention for the Prevention of Pollution of the Sea by Oil and the unification of the tonnage measurement. It was just 2 years later when the SOLAS convention became the 1 st convention held by the IMO. 55 countries participated in that convention resulting in 55 resolutions, some of them requiring the IMO to carry out several actions. SOLAS came into force in 1965. According the IMO performance indicators (C 105/3(a)/1) from the 30 th September 2010, 159 out of 169 member states has ratified the SOLAS 1974 and the Load Lines 1966 conventions making them the most ratified conventions of the IMO. As at August 2010 there were 52 IMO conventions and 42 of them were in force. Even not all countries ratify such conventions, those who did have around 98% of the worldwide fleet and have to be kept in mind that even a country doesnt sign a convention, its ships must follow it when going to a signing country ports. IMO auspice the conventions where the instruments are discussed and agreed, once those instruments come into force (by acceptance of a certain number of flag states) they Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 18
become mandatory. Usually theyre called statutory requirements and can be divided in 4 divisions 1. Ships design and stability 2. Pollution 3. Accident prevention 4. Damage control In the present theres no doubt about the role of the IMO as it demonstrate the paramount importance of having international standards that were developed, agreed implemented, and enforced by basically all the maritime nations of the world facilitating the acceptance of ships registered in a certain country by another country. This is the only way to regulate the international maritime industry. National Maritime Administrations Each country government has the right to establish policies, laws and regulations of their own in regard to the maritime industry. This legal framework is influenced and basically based on the United Nations Convention of the Law of the Sea (UNCLOS), international conventions, IMO resolutions and codes the country has signed in. The maritime administration of each country are the legal entities assigned with the responsibility of ensure the safety, security of the crews and ships and the protection of the environment while complying with the international laws that could apply. Flag states assume responsibilities when become part of an IMO instrument and the maritime administrations are in charge of such responsibilities. The national administrations have a long list of duties such as Regulation of construction, equipment and repairs of ships Issuance, suspension or withdrawal of certificates to ships, seafarers, service providers, educational centers, surveyors, yards and any other entity that the national laws establish. Inspections and surveys (national and foreign) Registration of ships and seamen Investigation of casualties, wrecks, collisions, pollution, fraudulent certificates, etc. (UNCLOS and some IMO conventions require that the results of such investigations are made public) Crew issues as working conditions, welfare, manning, medical requirements, etc. Salvage Legal such as international conventions, national legislation, litigation, etc. Act on behalf of the flag state government with other maritime administrations and on conventions, IMO sessions and wherever the law establish Any other given by the national legislation The IMO through the resolution A.847(20) gives the guidelines to the national maritime administrations on how to implement the IMO instruments. It states the following in the point 1.2 Under the provisions of the United Nations Convention on the Law of the Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 19
Sea (UNCLOS) and of the above IMO conventions (SOLAS 1974, MARPOL 73/78, Load Lines 1966 and STCW 1978) Administrations are responsible for promulgating laws and regulations and for taking all other steps which may be necessary to give this instruments full and complete effect so as to ensure that, from the point of view of the safety of life at sea and protection of the marine environment, a ship is fit for the service for which it is intended. It is clear that the responsibility lies on the administration shoulders which must ensure that the international conventions are followed, implemented and improved by means of national legislation. When a government sign in a convention, it should start to prepare its national legislation (laws, codes, regulations), infrastructure, educational programs and whatever is needed in order to be ready at the moment the convention comes into force. Deeper details about the resources a maritime administration needs can be found in the resolution A.847(20) of the IMO. When considering the responsibilities of the administrations plus the duties mentioned above it is easy to consider the maritime administrations the most important regulatory body of the maritime industry. It is important to mention that the IMO can support and give technical assistance to the maritime administrations in order to help them fulfilling their responsibilities. In some cases, flag states authorize certain organizations to act on their behalf to perform surveys and inspections and issue the certificates required by the IMO instruments. These organizations are known commonly as Recognized Organizations (RO) and usually are well known classification societies (e.g. IACS members) but is the administration who have to the right assess the capabilities of the organization and approve it or not as a recognized organization (in the IMO resolution A739(18) can be found the minimum requirements and standards a RO must have and the A789(19) includes the specifications for surveys and certification function of the ROs). This is the case of flag states such as Panama, Bahamas, Marshal Islands, etc who delegate the authority of issuing certificates and perform surveys to such organizations and probably the reason lies on the fact that ships flying those flags are all around the world and its easier to the flag state rely on the experience, knowledge and established network of the classification societies. In any case, the administration have to monitor the work done by the RO and always retain the authority to carry out the surveys that are considered necessary in order to be sure that the ships flying its flag comply with the due regulations. One of the most important responsibilities assumed by the flag states is to ensure that the vessels flying its flag comply with what is established in the international conventions. In order to be able to ensure compliance, administrations can and must: 1. Avoid ships to sail when the seaworthiness is in doubt 2. Survey of ships including technical, operational and crew related issues during the construction and service life. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 20
3. Proceed accordingly in those cases of ships flying its flag that violated an international regulation. (In these cases, administration is informed either by a port state control of a foreign country or by the RO in charge of the ship). An investigation and follow up surveys may apply. 4. Create the laws that include penalties to the violation of international (and national) regulations. 5. Ensure that the crews comply with the training and certification required by ensuring they possess the knowledge and skills needed for each rank. Examples of deficiencies that surveyors performing statutory surveys on behalf of an administration that can lead to detention of the ship are (only as example and not limited to): SOLAS 1. Failure of operation of the propulsion machinery or other essential machinery on board such as emergency generator, emergency lighting, steering gear, radio equipments, navigational equipment, etc. 2. Bilges condition. Oily water mixture in the engine bilges, thermal insulation contaminated with oil, etc. 3. Insufficient capacity or deterioration of life saving equipment and fire fighting, fire detection, fire alarms and related equipments. LOAD LINES CONVENTION 1. Corrosion or damage in structural parts of the ship on extended areas subject to loads and stress 2. Lack of approved stability information 3. Deterioration of closing devices that compromise the water tightness of the ship MARPOL 1. Malfunction of the 15 ppm alarm, discharge monitoring and control system, bilge water separation system, etc. 2. Unauthorized discharge piping (magic pipes) 3. Not enough capacity in the sludge tanks or sewage holding tanks for the intended voyage.
In not all cases the administrations comply with their responsibilities regarding surveying the ships to ensure the safe conditions of the vessels and other issues on board, thats the cases of the so called sub standard ships, which means that theyre below the standards set for the industry for safety, security, pollution prevention, etc. Based on that, in the late 70s a group of European countries agreed to audit the working and safety conditions in foreign flagged vessels. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 21
The concept of the inspection of foreign vessel using common rules for a group of countries located in a determined geographical area spread and even the IMO encourage this practice. In the present we have the Tokyo MOU, Via del Mar MOU, Caribbean MOU, Mediterranean MOU, etc. Its interesting to remark that the United States of America dont belong to any memorandum of understanding. The port state control officer has the authority to detain a ship if its considered that safety, health and / or environment are in risk. In the annual report of the Paris MOU (2007) the top list reasons for detentions are: 1. Certification of the crew and the ship 2. Safety conditions of the ship (fire safety, navigation, etc) 3. Working and living condition of the crew 4. Maritime security 5. Marine pollution prevention 6. Operational issues 7. Management Every MOU has established a common set of rules and regulations that port state control officers of each country belonging to the MOU will use to assess the conditions on board and determine whether or not to detain the ship and should deficiencies are found, the time frame to fix it (them) and will depend of the severity of the deficiency how much time is considered necessary to fix the issue. The idea of having common rules is due to the fact that vessels usually call on ports of the same geographical area during the same voyage. Having a common set of rules and a common data base of inspections, avoid delays with several surveys done in a short period of time and at the same time guarantee somehow that surveys will be done, doesnt matter the port or the country. It has to be kept in mind that even when a flag state belongs to a MOU it doesnt mean that another flag state belonging to the same MOU will not audit ships flying its flag but usually the main target are convenience flagged vessels, especially those included in the black list. Also, recognized organizations that act on behalf of a flag state are categorized according the performance of the ships they certified. An example of this can be found in the 2012 annual report where is stated that the combination of the Sierra Leone flag and the Phoenix Register of Shipping resulted in 41% detention rate. Each MOU will determine how often a ship must be inspected. In the case of the Paris MOU they give longer inspection intervals to flags / RO included in the white list while ships with flags / RO included in the black list are inspected more frequently (no discriminitation should be made based on the flag, the standards apply for all the flags in the same way). This change was introduced in 2011 and resulted in a lower number of inspections but in a higher number of detentions. Paris MOU categorize the flag states in 3 divisions or lists, the white list which represent those flags with low detention rates due to high standards found on board ships flying their flags. Black list is just the opposite and grey indicates an average performance with caution of not falling in the black list. In the white list France, Germany and Hong Kong are in the top 3 positions; Bolivia, Tanzania and Togo are located in the bottom of the black list being Bolivia the only one categorized Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 22
as high risk. In the recognized organizations segment, the top 3 positions are American Bureau of Shipping, Det Norske Veritas and Lloyds Register while on the other side are located Phoenix Register of Shipping, INCLAMAR and the Albanian Register of Shipping. The fact that the PSC have the authority to detain the ship doesnt mean that its the main goal and usually detained ships and their respective owners / operators are encouraged to fix the deficiencies as soon as possible, even SOLAS in chapter I/19 and other conventions where the PSC is mentioned, establishes that all efforts should be made to avoid the detention of the vessel. But, in case that an evident sub standard ship is found, detention will be used as a mean to find the real owner behind the vessel in order to making responsible for the damages the ship can cause. It can be the case that a particular ship is banned to enter a MOU area, e.g. several detentions. Once on board, the PSCO officer will inspect based on the rules of the MOU he belongs to but as an example to show, the Paris MOU code of deficiencies is listed 1. Certificates (ship, crew and documents) 2. Structural condition of the ship 3. Water / weather tightness of the ship 4. Emergency systems 5. Radio communication 6. Cargo operations including equipment 7. Fire safety 8. Alarms 9. Working and living conditions 10. Safety of navigation 11. Life saving appliances 12. Dangerous goods 13. Propulsion and auxiliary machinery 14. Pollution prevention (MARPOL annex I to VI, anti fouling system) 15. ISM 16. ISPS 17. Maritime Labor Convention related issues In order to inspect the above, Paris MOU uses 17 conventions (IMO and ILO) as reference. SOLAS, MARPOL, UNCLOS, COLREG, STCW and LOAD LINES convention has set the roles of both the port state and the flag state as well.
Classification Societies In the 18 th century the insurers based in England, specifically in London prepared a method to assess the technical condition of the vessels insured. The vessel itself was classified according the general conditions of the hull on annual basis inspections on an A E I O U scale. The equipment on board was classified with the letters A B Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 23
C that later on were replaced with the numbers 1 2 3 which resulted in the classification A1 as the highest standard of condition; in the present is simpler, ships are in compliance (in class) or not (out of class, suspended or class withdrawn). This method of classification spread in the maritime countries, in Europe first and then as far as Russia and Japan forming the classification societies known today. In the present there are around 50 classification societies worldwide but those included in the International Association of Classification Societies cover around the 94% of the world tonnage. The IACS define a classification society to those entities that comply the following (consider that the administrations are the entities who authorize the class societies so even an entity doesnt fulfill these requirements, a particular administration can consider it a classification society)
1. It publishes its own classification Rules (including technical requirements) in relation to the design, construction and survey of ships2, and has the capacity to (a) apply, (b) maintain and (c) update those Rules and Regulations with its own resources on a regular basis; 2. It verifies compliance with these Rules during construction and periodically during a classed ship's service life; 3. It publishes a register of classed ships; 4. It is not controlled by, and does not have interests in, ship-owners, shipbuilders or others engaged commercially in the manufacture, equipping, repair or operation of ships; 5. It is authorized by a Flag Administration as defined in SOLAS Chapter XI-1, Regulation 1 and listed accordingly in the IMO database, Global Integrated Shipping Information System (GISIS).
The role of the classification societies is recognized in the SOLAS convention stating that ships shall be designed, constructed and maintained in compliance with the structural, mechanical and electrical requirements of a classification society which is recognized by the Administration in accordance with the provisions of regulation XI-1/1, or with applicable national standards of the Administration which provide an equivalent level of safety Load Lines convention recognize such role as well.
The main objective of the classification societies is to verify that ships are built and maintained according the proper standards. Other roles the classification societies have assumed is to act on behalf of the maritime administrations to survey and issue statutory certificates to the ships flying the flag of the state of such administration. Lately they have included in their scope of service quality assurance and risk assessment. The classification surveyor has to verify the structural integrity of the vessel by inspecting the hull condition, verify the reliability of the propulsion plant, electrical generators, steering gear and any other equipment installed on board in order to provide essential services for the safe operation of the ship. The surveyor uses as reference in the surveys, the classification society rules and regulations and the international instruments that may apply to a particular ship especially when acting on behalf of a flag state as recognized organization for issuing statutory certificates. The classification process can include the following by the appointed surveyors: Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 24
Review of the construction plans and assistance to the building shipyard to verify construction is done in compliance with rules and the approved plans Verify that the structural steel to be used as well as components such as main engines, generators, boilers, pressure vessels, etc are built and certified according the rules of the class. Usually this is done in the suppliers yards so all materials and components will be in good order when coming to the shipyard. Attendance to the sea trials, witness the test of the equipments and systems required by the rules to be tested. Once all the above is done satisfactorily, the class request is sent to the classification society office where, if considered appropriate, a class certificate is issued. The ship must remain during her service life in a survey program in order to keep the certificate of class valid. All the above is done by means of visual inspections, tests, measurements, trials and checks according the surveyor experience, guidelines given by the society and the rules and regulations to be followed. During the service life of the ship, additional surveys will be annually, intermediate (between the second and third annual survey) and the class renewal / special survey which is held every 5 years. As the ship becomes older is normal the surveys are strengthened due to the fact that corrosion and structural damages (fractures, deformation, etc) can appear as the years pass by. Surveys out of the water are included in the program and will be requested more often as the ships age increases. During the survey, is almost impossible that the surveyor can verify all the structure of the ship or the machinery included in the classification certificate. For this purpose, the surveyors use a guideline that has been prepared based in the experience of years (centuries) in business with special attention to those items more likely to suffer corrosion, stress and fatigue. It can happen that the conditions on board lead to a suspension or withdraw of the class, or sometimes, change the class notation (decision will be taken by the class society). Can be as well that the conditions dont require a class suspension but instead, remedial actions have to be taken in a certain period of time in order to keep the class. In those cases the surveyor can gives a class condition which means that theres situation that must be deal with in order to keep the class. The way to deal with conditions of class can be repairs, additional surveys, measurements, etc. The International Association of Classification Societies (IACS) in its paper CLASSIFICATION SOCIETIES Their Key role says something interesting; A ship which hold all the statutory certificates and is classified against the highest standards is not guaranteed will not suffer any accident due to the fact that theres no way to verify the conditions of safety on board in the day to day operations. It is understood that ships are built according the rules of a classification society and its the duty of the owner or operator to keep them in compliance with such rules. It means that the main responsibility of the safety on board and pollution prevention lays on the owner / operator and its the duty of Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 25
the regulating bodies to verify its properly done. In those cases where the ship suffers a damage that could compromise her class certification, the society must be informed immediately in order to schedule a survey and support in the repair process. Considering that some flag states authorize classification societies to act in their behalf for issuing statutory certificates its very important to know that in those cases where the class is suspended or withdrawn the flag state should be notified by the classification society and then, in most of the cases the ships statutory certificates are invalidated until proper corrective actions are taken. The role of the classification society surveyor, besides all what is stated in previous paragraphs is quoted by the IACS like The utmost care and discrimination have been exercised by the Committee in the selection of men of talent, integrity, and firmness as Surveyors, on whom the practical efficacy of the system and the contemplated advantages must so materially depend; the Committee have in their judgment appointed those persons onlywho appeared to them to be most competent to discharge the important duties of their situations with fidelity and ability, and to ensure strict and impartial justice to all parties whose property shall come under their supervision
Its interesting to remark that this concept was given back in 1834. Words such as talent, integrity, firmness, competent, fidelity, ability, strict and impartial justice to all parties are of paramount importance when the surveyor, not only those of the classification societies, is described in the field and not just in the paper.
Ships are classified according a specific group of rules which may vary depending on the ship type, navigation area and the service she will do. The classification notation will be composed by the following (it may be the case that several of them are used together)
Main class symbol. Defines the compliance of the all of the ships construction aspects with the specific rules of the society that apply. Construction mark. The construction mark when assigned is used to identify the surveying procedure used for the first class assignment. Service notation. When assigned, is used to identify the service(s) the ship is intended to do by the owner. In those cases where several different services are intended, the ship has to comply with all the rules that may apply. Navigation notations. When assigned, it defines the specific navigation areas where the ship can operate. Service and operational notations. When assigned, they define the areas or special services the ship is intended to do (e.g. dredgers) Additional class notations. When assigned, they define any additional requirement given by the owner at the moment of the ship building. Its interesting to notice that most of them says when assigned and that, mostly they define what the ship will do and where. Classification societies surveyors can perform several types of programmed surveys during the service life of the ship. The general goal of these programmed surveys is to Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 26
assess whether the ship is in compliance with the rules or not. Non programmed surveys can be done in those cases where the ship suffers a damage which can compromise her class. The scope of the surveys can be as follows (most of the information taken from the Germanishers Lloyds and DNV regulations) Annual survey. As the name says, its done every 12 months with a window period of 3 months (it means that can be done since 3 months before the due date until 3 months later of the due date). Some of the items the attending surveyor has to inspect are: This is a general survey, includes inspection of the main structural elements of the hull. Certificates as required by the rules (e.g. life boats falls) The machinery, cargo holds and equipment on board will be inspected randomly depending on the type of ship and her age. The closing devices of hatches, ramps, doors, etc and their tightness. Shell doors (bow, stern, sides) located in Ro-Ro ships and passenger ships including function test of the opening / closing functions and indication devices. Anchor and steering gear visual inspection Visual inspection of the machinery spaces including safety aspects such as emergency escapes free passage, fire sources, cleanliness, etc. Test of quick stop / closing of pumps, valves, motors, separators, boilers, fans, etc Bilges: condition, alarms and level monitors, actuators, etc. Communication devices between bridge and machinery locations such as control room, steering gear room, thruster rooms. Etc Power supply systems, including switchgears Fire: pumps and mains, detection systems, fixed extinguishing systems, etc. Surveyor has to verify the maintenance done on such systems according the rules of the class, administration, manufacturer and relevant IMO instruments. Especial attention to be taken to those equipments that must be maintained by an authorized service provider (e.g. fixed fire systems) Load lines marks to be verified Stability information to be verified Fire doors operation test General alarm functionality Life boat, rescue boat, launching and recovery systems ISM related items. The surveyor will list any finding that may be associated to deficiencies of the safety management system despite the issuing authority Some additional tests can be required by the attending surveyor in order to ensure ship comply with the rules. This will depend on the class type, notation, age and the criteria of the attending surveyor.
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Intermediate survey. This survey is done between the second and third annual survey in a 5 years survey cycle. The window for this survey goes from 3 months before the second year survey to 3 months after the third year survey. Specific rules establish what should be inspected but it can include ultrasonic test of the hull. The annual survey requirements are to be inspected. DNV dont give any special requirement in intermediate surveys when the ship is less than 5 years. The ballast tanks will be inspected depending on the ships age. If the results are not satisfactory to the surveyor, additional tanks of the same type may be required for inspection. Depending on the case, some tanks may be required to be inspected annually. Signs of corrosion, structural damages and the condition of the coating are of special interest for the surveyor. Cargo holds are to be inspected depending the detail of the inspection on the type of cargo, age of the ship and the criteria of the surveyor Crack test on determined structural members according class rules but with especial interest in areas of high stress in locking devices, hinges, stoppers, etc. (dye penetration and magnetic particles NDT can be used according the class rules) Elastic mounting of deck houses including springs, insulation, connections to the hull and securing devices. In the machinery some measurements are to be done or proof that have been done by approved crew members. Such measurements can be: crankshaft deflections on main engines and auxiliary generators, axial trust bearing clearances in the main shaft(s) and/or turbine rotors, insulation test done in auxiliary generators and selected electric motors Operational test of the following: emergency generator(s) and emergency switchboard(s); machinery and electrical installations operability Automation equipment according class rules
Class renewal surveys. It is done every 5 years. Items mentioned in annual and intermediate surveys The class renewal survey has to be done in dry dock or slip way unless a dry dock survey was carried out within a period of time approved by the class. In any case, the keel, the rudder and the bottom plating have to be inspected by the surveyor. The rudder inspection as most of the items will be more detailed as the ship gets older and can be the case that the surveyor requests to dismantle the rudder stock to inspect clearances, corrosion presence, etc. Hull elements known to have suffered by stress and fatigue such as those located in areas as cargo holds, tanks (fore peak and aft peak tanks must be inspected in any class renewal, engine foundation, etc. The class rules Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 28
include the list of items to be checked but the surveyors criteria will apply. The frequency at which structural tanks of Fuel, Lube Oil and potable water have to be inspected internally will depend on the age of the ship. The detail of the inspection of structural items and how deep the surveyor has to inspect will depend on the age of the ship. The rules of the class give guides about the last. Tightness test of tanks, pipe tunnels and void spaces. Thickness measurements according the criteria of the attending surveyor Engine room structure, especially tank top, shell plating and brackets. If considered necessary, thickness measurement will required. Depending on the age of the ship, the chain cables will be inspected and after the 10 years survey, weight of the anchor(s) to be checked. Continues class renewal items included for machinery and electrical systems to be verified Main engines, auxiliary systems and propulsion system(s) according to the rules. Surveyor can request to dismantle a component in order to verify its condition (e.g. bearings, pistons, cylinders, etc.). Run test can be requested by the surveyor for auxiliary systems (deck equipment as winches can be included) as considered necessary. Generators, essential motors, switchgears, protective and interlocking devices, etc to be inspected externally. Insulation test is to be done. Any additional test as considered necessary by the surveyor to ensure that the machinery and the electrical systems are reliable and can be used without any restriction. Fire protection and fire fighting systems according the rules Other requirements that will depend on the ship type
Example of the DNV rules regarding the thickness measurement according the age of the ship (16) (on the next page) Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 29
Example of DNV rules regarding the inspection of tanks according the age of the ship (16)
Additional surveys that classification societies surveyors can attend are bottom surveys, tail shaft surveys, thrusters surveys, boilers and steam generators surveys, etc.
P&I Clubs and Marine Insurance The Insurances in the marine industry are of paramount importance due to the risks associated with the ocean trading. Today, insurance can be split in P&I clubs and marine insurance in general. The idea of having insurance is exactly the same than any other industry, to protect against the losses caused by unexpected events. The definition according the 1906 marine insurance act (17) is A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure. The role of the surveyor is to verify that the ship or offshore Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 30
installation comply with the requirements given to minimize the risks to the lowest reasonable and economically level. The requirements may vary depending on the ship type, service, geographical area where the ship operates, etc. and can be that the ship just comply with flag state and international regulations or additional requirements or conditions may given depending on the risks and the operations to be done. It can be the case that the surveyor is appointed when an unexpected event occurred to investigate the causes and to assess the extent and severity of the damages. It has to be kept in mind that insurance is a private operation between the owner and the insurer he chooses, its included in the regulatory bodies because of their interest in the marine venture safety and because they may request additional measures to be taken in order to protect the crew, the ship and the environment. Another point important to remark is the fact that only those entities with interests in the marine venture have the right to be assured. P&I Clubs The history of the Protection and Indemnity (P&I) clubs begins in the 19 th century when the ship owners faced liabilities not covered by the hull underwriters. The solution found to this problem by the owners was to associate themselves in clubs in order to cover the claims made against the members. Since a particular club is a mutual association formed only by the owners of the ships insured by that club, theres no interest in profits. The clubs ask their members to pay calls annually. The calls made by the owners are just to cover the administrative expenses and costs, the claims, reinsurance costs, etc. If the calls are insufficient, the club members are asked for additional calls but on the other hand, if theres an excess of funds, next year calls will be lowered. The 13 main P&I clubs form the International Group of P&I Clubs and provide insurance to more than 90% of the worldwide tonnage. According Robert C. Seward in his paper The Role of Protection and indemnity Clubs (19) , the 13 P&I clubs work together in 2 ways. The first one is covering the claims in excess of 5 million dollars up to 25 million dollars (individual clubs will cover the first 5 million dollars). Then, the group of 13 clubs is re insured as one collective contract for claims higher than 30 million dollars (5 per club plus 25 covered by the group of clubs). The second area where the clubs cooperate is in their areas of interest such as loss prevention, discussions in the IMO, shipping contracts, etc. This can be easily done since theres no competition between the clubs (there are no profits) in the same way than the classification societies (IACS). The P&I cover against liabilities claims made by third parties due to ships operation and use, nothing related to the ship construction itself (claims not covered by the hull and machinery insurance). Example of the risk covered by the P&I clubs are: 1. Death or injury of people resulting by activities related to the ship (e.g. crew, passengers and others if caused by the ship) 2. Liabilities caused by stowaways or people rescued at sea Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 31
3. Liabilities from collisions (e.g. damages caused to another (other) ship(s), floating or fixed objects, deaths and injuries. 4. Liabilities from groundings (e.g. pollution and consequent damages) 5. Liabilities arising from cargo loss and / or damage(damaged cargo due to ships condition, e.g. water ingress to the cargo holds) 6. Liabilities arising from wreck removal (costs related to removing the wreck) and towage operations 7. Legal and other costs related with these claims The service provided by the clubs start at the moment that something happen and a claim against the ship may arise. The clubs have the technical knowledge to help the owners to prevent bigger damages by sending local representatives to assist the master dealing with the situation. Legal advice when required can be provided as well by the clubs and of course, when required, pay the claims. The club will assist the owners to proof the ship is not liable of the damages caused. Local surveyors appointed by the clubs representative will help in this. Clubs not only count with surveyors, in any case they count with lawyers, local technical and commercial advisers. Surveyors can be appointed also to go on board on regular basis to check the conditions of the ship. It can be done annually or when the ship enters the club. This is done probably due to the fact that clubs dont trust in the classification society or the flag state of the ship since in some cases the classification societies have been criticized for its lack of initiative at the moment of facing sub standard ships since it may jeopardize the relationship with the owner (claim obviously denied by the classification societies). The items inspected by surveyors are related to safety, security, water tightness of cargo holds, operations on board and all the flag state and international conventions requirements that may apply. The club will evaluate the survey results in order to assess the continuity of the ship (or the owner) in the club or like in some cases, amend the cover due to specific circumstances. This situation occurred to the author of this assignment when a P&I surveyor inspected a general cargo ship where he use to work. The condition of the cargo hatch covers was very poor (they were not water tight). Since the ship was carrying containers only in coastal navigation (it was a feeder vessel), the club agreed to eliminate any coverage for cargo damages / losses. In this case, if the surveyor wouldnt be appointed and a claim would arise, probably the club would refuse to pay since the owner knew the conditions of the hatches before the claim arise. In any case, since the clubs are formed by owners who take major care of their business, a particular member can be asked to leave the club if its considered that its not keeping or operating his ships in the proper standards. The club may refuse to pay a claim if the owner didnt take all the reasonable steps to limit the liability. Thats why the club must be contacted whenever is necessary so a surveyor, lawyer or whoever is needed can assist the master.
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Marine Insurance Marine insurance dates from ancient ages, back to the Roman Empire making of it one of the earliest insurances developed. In those days the risks were associated with pirates and weather conditions (depending on the trading zone and the season). The marine insurers usually cover the hull and machinery for the ship owners and the cargo for cargo owners. As stated above, cargo can be covered by the P&I clubs, so who pays when the cargo is lost or damaged? The cargo owner should go first against the carrier; if its found that carrier has no liability the cargo owner should claim his own insurance. Its clear to see how many parties involved trying to protect their own interests and surveyors are a very important part of the process! The offshore / energy industry being part of the maritime industry requires insurance as well against the same risks any ship can face but somehow with higher level of severity and in some cases higher level of probability, thats why additional measures have to be taken in order to reduce such risks. Being one of the most dangerous industries of the world, insurance is a most. In marine insurance and especially in offshore industry there is a term that must be clear for the surveyor. Warranty is a compromise that the assured takes to ensure that something in particular will be or will not be done, a condition must be met or a statement of facts is affirmed or denied. In case the warranty is not strictly complied with, the insurer is discharged for liability. The surveyor can be requested to attend a ship or installation in order to verify that the terms of the warranty are followed by the assured. This would be called a warranty survey and is based on the fact that offshore installations are usually huge in size and fiscal value, with high risks involved (weather, fire, pollution, personal accidents, etc). The surveyor should be familiar with the nature of the operations, risks associated, geographical area weather patterns (hurricane areas), etc. The warranty surveyor has a particularity, he oversees not only conditions are met but also, that operations are done according the standards of the industry. Examples of operations where a warranty surveyor may be appointed are: 1. Transit and positioning of jack ups, semi submersible units, wind turbines, etc. 2. Installation of structures (including seabed structures) 3. Towage 4. Heavy lift 5. Laying of pipes and cables
Explain the roles of the parties and stakeholders involved in the marine industry
Many parties have interests involved in the shipping industry, interests that always worth a lot of money and as always happens when money is involved, conflicts and claims may arise when the operation is not completed in the way it was intended to be. Marine surveyors may be required by many of the parties involved in the marine industry in order Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 33
to carry out surveys on their behalf and gather information that will be of paramount importance before taking a decision (purchase, start a repair), in law courts, issue an insurance policy, start an operation (heavy lift, positioning of offshore units), etc. In the present, the stakeholders of a marine adventure can access information like never before in the history. Almost any ship can be checked on line and all her history verified not only by classification societies, port and flag states but also by insurers and cargo owners. This information is very important at the moment of taking decisions by the interested parties such as considering to use or not a determined vessel if her safety records dont fulfill the requirements imposed by the cargo owner. Sites such Equasis (www.equasis.org) launched by the European Union as part of its campaign Quality Shipping collects information from different sources about the ships conditions. This information is available to the interested parties. In the following pages, the role of the stakeholders of the marine industry will be explained and a brief explanation of when they may require a marine surveyor will be given. Cargo owners The marine industry was born to fulfill the need of transport goods to / from far regions for trading. Ancient civilizations such as the Phoenicians traded grains in the Mediterranean Sea before the Greek and Roman empires. Through the centuries the trading routes were expanded when the navigation techniques allowed doing that and from short voyages in the Mediterranean Sea adventurers started to search new routes for trading. In that spirit Italian, Spanish and Portuguese sailors as Christopher Columbus and Ferdinand Magellan to name just a few, discovered new lands that changed the known world. Today, the cargo owners just want that their cargo arrives in time and in the conditions its supposed to be to its final destination without so many adventures (new markets are found in different ways!). Cargoes can be almost anything, from a cell phone made in china and sent to Europe to oil extracted in Venezuela and shipped to USA. In the same way cargo owners can be international branched companies to individuals that are sending small packages through a courier. Its easy to understand that the worth of the cargoes can be millions of dollars in a single shipment. Due to the complexity of international trading, the change of the ownership of the commodities must be established before the purchase / sale agreement is done. In order to clarify that, the INCONTERMS were defined to make clear where the seller pass the responsibility of the cargo to the buyer (INCOTERMS will not be explained further because its considered is out of the scope of this assignment). Since the ownership of the commodities can change in different places during the voyage, the cargo owners can be importers or exporters depending on the location. Cargo also needs to be insured even though theres no legal obligation to do so. With so many risks associated with the marine venture, theres no cargo owner who takes such risks on his own. As stated in the Insurance section, cargo can be insured twice, by the cargo owner and by the carrier being any damage paid by whoever is liable. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 34
Additional to all what is mentioned above, the cargo must pass through customs, storage while the due inspections (custom, sanitary, agricultural, etc) and processes are done in the ports of departure, arrival or transit. Not all cargo owners deal with all these aspects; for the single individual that is shipping therere specialized companies with all the logistics necessary to fulfill the needs of their clients. Major industries that trade huge quantities of cargo usually have internal departments dealing with the documentation and requirements for the shipments and the probable consequences that unexpected events occurred during the voyage caused to the cargo. Surveyors may be appointed by cargo owners for several reasons including the inspection of the condition of the cargo when loading or offloading (to verify that the specifications agreed are met), damages occurred to the cargo during the voyage, holds condition before loading (to verify if theyre suitable for the intended cargo), ships draughts (used to verify the quantities loaded / offloaded) and any other situation that may affect the cargo or the purchase / sale agreement when related to cargo issues. The role of the surveyor verifying the condition of the ship prior to begin the cargo operations is in one way related to the responsibilities the cargo owner have from few decades ago to avoid the use of sub standard ships. European Union created the Quality Shipping Campaign in the 90s to avoid sub standard shipping in its waters. Cargo owners under this campaign are intended to use safely operated ships rather than sub standard ships. Surveyors through their inspections on board are the representatives of the cargo owners when verifying such conditions. Its important to remark that under the 1992 Civil Liability and Fund Conventions requires that those with interest in the cargo must contribute with the compensations that may arise after an oil spill when the level of liability of the owner is exceeded. The idea of this is again, deterring cargo owners and shippers from using sub standard ships even if it means that higher freight rates will apply.
Ship Owners, Charterers, Operators Being the cargo transportation the reason the marine industry was born, were the ship owners who provide the means to fulfill that need. The definition of owner varies, several were found The ship owner is the person who equips a ship (also fits out a ship), provides her with the necessary provisions and crew and runs or operates her Capt Pierre Desek, www.maritimeknowhow.com; IHS Fairplay (18) defines the registered owner as the entity who appears in the ships certificates. The Maritime Labor Convention defines the owner as the owner of the ship or another organization or person, such as the manager, agent, bareboat charterer, who has assumed the responsibility for the operation of the ship from the owner and who, on assuming such responsibility, has agreed to take over the duties and responsibilities imposed on ship owners in accordance with this convention; Other similar definitions can confuse because a management company (term explained later) can be considered the owner and acquires some liabilities according the convention (the proprietor of the ship may not be the entity that has the responsibility of the operations). SOLAS gives to the administrations the right to define the owner. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 35
The owner / operator are the main sole responsible for the maintenance of the ship according the rules of the flag state and classification society that may apply. In some cases, owner flag their ships with low standard flags and classification societies (as mentioned in the Port State Control section above) which allows them to offer unfairly lower freight rates. In case of pollution, the Civil Liability Convention (CLC) says that the owner and not any other party involved (manager, charterer, commercial operator, cargo owner, flag state and classification society) is the responsible for oil pollution. Owners can be responsible as well for other issues that may include crew related matters such as wages, medical costs, liability in case of injury or death, repatriation cost, etc. (ILO Convention covers most of these topics). Since the introduction of the ISM code, the operator or charterer have legal liability in case of accidents since therere requirements for maintenance of the ship, training of the crew, procedures for the operations on board considering the risks involved, etc. The DOC owner may have legal responsibility if a casualty results in a law court trial. The manager (or management company) is commonly the entity that operates the vessel. It can be a technical management company which is in charge of the day to day operation of the ship including ships maintenance, dealing with the classification society, supply of spares, riding teams, crew, etc. Usually they are the company in the DOC and for this reason theyre in charge of the safety management system. Examples of these companies are V.Ships (www.vships.com) and Bernard Schulte http://www.bs-shipmanagement.com. It can be the case that the managers dont deal with the commercial side of the business, which can be done by a broker, a charterer, the owner or a commercial operator. Any combination can be found in the industry; an example can be the company Mediterranean Shipping Company MSC which operates commercially hundreds of ships but every ship belongs to a single company which name is somehow related to the ship, then, MSC have management companies based in different parts of the world (one of them in Hong Kong) which provide technical management. So, the commercial side headquarter is in Geneva, the technical management can be in Hong Kong and the registered owner can be based in any country with favorable conditions. This is the base of what is known as the one ship one company concept, spread widely around the world as an effective mean to limit liabilities and companies such as MSC are known as Group Beneficial Owner (definition used by HIS Fairplay 18 ). Some flags require that the registered owner be a company registered in the same country. There are cases when a bank is the owner of a ship (cases where the ship is a guarantee for the loan), the bank is the registered owner but the entity that received the loan and operates the ship is defined as the disponent owner. The charterer is an entity that hires a ship for a voyage(s) or period of time. Organizations such as BIMCO (www.bimco.org) and the International Chamber of Shipping (www.marisec.org) have standardized the chartering contracts but, its common that amends and changes are done according the requirements of the parties involved. The operational costs have to be clearly defined in the contract. Also must be defined who will be the ship manager, and what costs will be assigned to the charterer (usually fuel and port services) and which remain with the owner. Theres another point that must be clear if Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 36
its possible to sub charter the ship. The freight cost will depend on the cargo (special requirements of cleanliness, type of cargo, etc), ships condition (sub standard vessels freight is lower than those who comply fully with the regulations), ships availability (less availability, higher freights), etc. In medium to long term charters, the charterer may be known as the operator which is the entity who operates commercially the ship and gets the profits obtained from the ships operations. During the charter period, all the financial and legal responsibilities assumed by the owner on his role, remain with him. Finance, Insurance and legal Due to the high quantities of money involved in the industry, its common practice that banks and even governments provide financial assistance to the owner at the moment of purchasing or building ships. Governments usually get involved in cases where companies of the same country will be the owner or when local shipyards will be in charge of the building. The last is the case of Royal Caribbean International who got financial assistance from the Finnish government in 2 ways, first with a loan by 40% of the total 1.05 billion dollars needed in loans issued by the Finnish government agency Finnish Export Credit Ltd., the second one, when they (the government) guaranteed a big portion of the total of the loans. As mentioned above, the banks may become the registered owners in these situations. Other conditions may be imposed by the banks before giving a loan, e.g. to use a recognized technical management company while the duration of the loan or to void purchases of ships of certain age. Not only for purchasing and building are needed financial resources by the ship owners, other reasons may be fleet re-vitalization (very common in passenger ships, cost per ship can be easily 50 million dollars), repairs and upgrading of equipments including new legal requirements issued by the administrations. Some of the biggest shipping banks (those which lend money to the industry) are Nordea Bank AB, DNB ASA, HSH Nordbank AG and Commerzbank. The last five years (from 2008) the industry has faced rough times due to low freight rates and over capacity of the ships (conditions usually connected); this resulted in severe losses to the banks. The situation arise during cargo booms when owners ask loans that usually are easily approved by the banks, when the ships capacity over pass the demand or the cargo offer drops by other factors, the crisis begins. It has to be mentioned that the value of the ships is related to the freight cost of the cargo she is designed to load. For the small cargo or leisure owner, the situation can be somehow similar. Those banks that are familiar with the maritime business can issue loan more easily than those banks that never have deal with the industry. Usually the banks will consider the same things than for any other business, such as credit records of the applicant, nature and opportunity of success of the proposed business, risks involved, securities offered to pay the loan, etc. A good business plan and all the documentation needed in order and updated (it may include but not limited to surveys, taxes paid, financial balances, etc) can help a lot at the moment of asking for a loan in the maritime industry. The insurance sector was explained in the regulation bodies section of this assignment due to its capacity of imposing conditions in aspects related to the safety and operations of Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 37
the ships and offshore units. It covers the losses or damages, partial or total of ships, cargo, terminals and 3 rd parties involved with the ships. Therere several kinds of insurance, being hull & machinery and P&I the most common known. Shipyards have to insure the ships while they are in the building process (common risks are fire, injuries to workers, delays, etc). War risks which are used by those ships sailing in a determined period of time in a determined area which are considered to be at war (hull and machinery insurance dont cover such risks). Theres another insurance available is the Increased value, which cover the difference between the compensation the owner gets from the insurance after a casualty and the cost of a ship of similar characteristics in the market. The legal departments of the different stakeholders, law firms and law courts are who deal when disputes arise from the complex situations found in the maritime industry. Owners vs. charterers or managers, cargo owners vs. ship owners, crew vs. managers or owners, everything is possible to happen when any of the parties involved consider the agreements have not been respected with perjure to their interest. Big companies have legal departments which usually deal with the day to day operations and as advisors to the other departments of the company. When cases come to the court, specialized law firms are required to defend the interests involved. The specific body of laws that deal with these cases is known as admiralty law, it covers activities and offenses that have occurred in oceans and other navigable waters including rivers and lakes, also some commercial activities that are done ashore but related to the maritime shipping industry are covered by the admiralty law. Usual topics covered by admiralty law are (not limited to) charter parties disputes, claims arose from crew members, dock workers passengers or their families due to injuries or death caused during the service or as consequence of the service on board, cargo claims, liabilities that may arise from collisions, groundings, etc. Law firms are not only required when disputes arises, purchase / sale agreements, crew contracts and compensations, legal requirements issued by governments, agencies or administrations and any other operation where they could be required by its nature. Freight forwarders, agents and brokers Freight forwarders are those companies who deal with the shipping needs of customers who regularly are not involved in the business. Individuals who need to send a box overseas or a yacht owner who needs to reposition his boat from the Mediterranean Sea to South America can be clients of the freight forwarders. In the scope of services usually provided are customs paperwork and tax payment, handling, packing, insurance, storage and the documentation required in each case and country and obviously the shipment of the goods. Freight forwarders can have their own means of transportation (e.g. FedEx, DHL), also they can lease containers and stow all the goods inside and once the container is full, just send it as any other container. At the destination, an agent will open the container, do any custom required payment and deliver the cargo as agreed. In those cases where the cargo requires special conditions (e.g. yachts repositioning) the freight forwarder will be in charge of finding the best solution such as charter a ship for such purpose. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 38
The ships agents are the local representatives of the ship and owner (managers or operators). They work on behalf of the principal and act as an intermediary with local authorities, ship chandlers, bunker companies, customs, tug boats, etc. so they need to have a good contact list of the mentioned above. Their knowledge and expertise of the local procedures ensure an efficient and fast response to the ships and principal requirements. A good agent should inform the master about any situation that he consider necessary should as special procedures that may differ from other ports (specially in those cases where the master is not familiar with the port) such as commercial, safety and security requirements, approximate costs of the supplies the ship needs, custom requirements for signing off crew, etc. All the expenses the ship incurred during her visit will be paid by the agent who will invoice the principal later, in this way the principal just have to check the balance sent by the agent and make a single payment instead of several payments to different supplier in all the port the ship may call, obviously the agent will charge for the services done with a fee based usually on the requirements attended or a flat fee that include everything what the ship may request but of course, the owner has to pay additionally for the expenses incurred by the agent on his name. This is what means as agents only, the owner agrees to assume and pay all the obligations resulted from his vessel as long as the agent didnt exceeded the authority given by the principal. All correspondence related to his role as agent must include As agents only in order to be entitled to the protections available for his role. The agent usually works on behalf of the principal but this doesnt mean that he cannot act for any of the other parties that may be involved in the voyage as instructed and agreed with the principal. There are several categories of agents such as port agent which is basically the one described above, the cargo agent who can deal with the cargo issues in those cases where the principal is not dealing with the cargo issues, but can as well the case of the subsidiaries of a liner who will be in charge of securing cargo for the line. In any case, the scope of the services provided by the agent will depend on the needs of the principal and those parties involved in the voyage. The role and name of any other agent that attend the vessel will be determined in a case to case basis. The brokers are intermediaries who act between cargo owners and ships operators and between buyers and sellers of ships. Its common that ship brokerage specialize in determined area, e.g. dry bulk or tankers chartering but it can be found in the market big brokerage companies that can handle several types of cargoes and the sale & purchasing of ships of different characteristics. The sale and purchase brokers (S&P) deal with all the details of the selling process plus financial issues, probably will advise the buyer about the possibilities of employment for the ship once shes acquired (condition of the market, present and in the near future). In the leisure sector is common to find S&P brokers as well. The cargo brokers can work for a ship owner whos looking cargo for his ship or for a cargo owner whos looking a ship to transport his cargo. To be able to do his job properly, the broker must have a database of ships including the real time position, the average freights, the cargoes available, etc so he can offer his clients bigger earnings with lower expenses. As was mentioned above in dry bulk cargo section (page 4), the dry bulk cargoes are transported in ships whose size will depend on the cargo and thats a factor Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 39
that brokers must keep in mind all the time and probably cause some kind of specialization for the brokers. The Institute of Chartered Shipbrokers (http://www.ics.org.uk/) and the Federation of National Associations of Ship Brokers and Agents (https://www.fonasba.com/ship-agents-and-brokers) are some of the institutions which provide training and standards for the industry. Port Authorities, dry docks and repair yards The port authorities are in charge of running the day to day activities in the port areas. It can include (but not limited to) the designation of berths for the arriving ships, safety and security rules of the port areas, registry of supplying companies allowed to work inside the port such as stevedoring companies, ship chandlers, etc. Every port according their national legislation may have different levels of authority and duties, one of them can be forecast changes in the trading patterns and take the proper actions such as expansions, new equipments for faster and more efficient operations, (e.g. the expansions planned and in progress in the USA east coast as consequence of the Panama channel expansion, explained in the general comments for the commercial sector above), also they have the duty to make more attractive the port to the shippers when compared to ports located in the same area (e.g. Miami port and Fort Lauderdale port in Florida, USA). There are several ways to achieve this goal such as lower rates and general costs for the shippers, faster operations, and better transportation in and out of the port facilities (train, roads, barges, etc) depending on the type of cargo. The port authorities can be designated by the national or state government or can be a private company with authority delegated by the responsible authority (privatization definition can be found in the Guidelines for Port Authorities and Governments on the privatization of port facilities by the United Nations Conference On Trade And Development (15) As can be seeing, the port authority is much related to the competitiveness of the port (commercial duties) but for this assignment, I will go in more detail with the activities related directly with the ship and her crew. First, the International Ship and Port Facilities Security Code (ISPS) which was created as a one of the measures taken after the terrorist acts on September 11 th in the USA. The ISPS regulates the way security on board and in the port facilities is handled and its the port authority duty to ensure the code is implemented accordingly by preparing the procedures needed, controlling the access to the facilities and any other code requirement. Other important aspect is the safety rules to be followed by all the parties involved in the port facilities including the ships in berth or anchorage. Personal protection equipment, procedures, work permits, bunkering permits, evacuation plans in case of emergencies, etc. are ruled by the port authority designated department (this information must be known by the ships agent whos in charge of sharing it with the ships serviced), also usually theres a fire department or team that depends directly on the port authority and must be prepared to fight fires on board and in the terminals and warehouses, considering all the different types of cargo than can be stored such as dangerous goods. Pollution accidents also are under the duties of the maritime administration which must be informed of any accident occurred within the port which must have ready the procedures to respond it. In some cases, when the spill is responded by Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 40
ships crew, the port authority must authorize the use of dispersant (probably together with the national maritime administration). The repair yards and dry docks are facilities where major repairs are carried out in ships. The dry dock must have the entire infrastructure needed for such repairs such as heavy cranes, basin (which will determine the size of the ships allowed). Therere 3 basic types of dry docks, the graving which is a basin where the ship is entered and then the gates at the basin opening are closed and the water pumped out, allowing the ship to rest in blocks located according the ships docking plan. The second type of dock is the floating dry dock which is sunk until the ship to be repaired can enter, and then is re floated. Theres a third type of docking system which is the Syncrolift where several cranes or winches lift the vessel working synchronized. This allows transferring the vessel to a different place within the yard leaving open the possibility of lifting / lowering another ship, not like a regular dry dock where only one ship can be attended. 2 other types of dry docking is the mobile travel lift which is usually used with yachts and the marine rail way or slipway. It has to be kept in mind that the dry dock also has regular docking facilities that usually are done to carry out repairs in water (wet dock). The dry docking and repair yards must be familiar with the rules that may apply (national and international, class, etc), must have certified providers in those cases where such condition is required (e.g. steel, machinery, etc). Their workers also have to be certified when required such as the welders. Non destructive testing (NDT) must be a usual practice in dry docks to verify the quality of the work done and to find faults in materials. Also the dry docks must provide the services ships may require such as shore connection for electrical power, sea water for the fire line and cooling systems, etc.
Fig 10. Repair yard with dry dock in northern Europe
Task No. 2 The four photographs (figures 1,2,3 and 4) are scenarios where marine surveyors will be instructed to carry out a specific kind of survey Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 41
Using these photographs identify in each case which group(s) of marine surveyors would be involve and state why
Transportation of a semi submersible platform by a heavy transport carrier (Fig. 1) Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 42
For these particular operations, commercial surveyors will be appointed. By the nature of the operations shown in the picture and the commercial aspects involved (insurance, claims, etc), commercial surveyors will be part of the operations mostly to help to carry it out with the lowest reasonable risk accepted (As Low As Reasonable Possible ALARP) by all parties. It is clear that insurance companies dont want to take unnecessary risks. Thats why a well experienced surveyor will check all the aspects involved in the operation in order to reduce the risks to an acceptable level Due to the complexity involved in the transportation operation, a warranty company will be required for issuing insurance. Such companies will appoint a surveyor to ensure that the warranty terms are followed and all the international and national regulations plus the procedures and standards of the industry are properly followed as well. The warranty surveyor may participate in the risk assessment that must be done prior the beginning of the operations but it has to be kept in mind that the conditions present during the risk assessment can change suddenly (e.g. weather conditions). Mitigating actions to be carried out in case the conditions change must be specified before the operations start. The level of risk acceptable must be agreed between all the parties involved in the operations and be included in the risk matrix to be used in every risk assessment. In short, surveyor must assure that: 1. Risks are identified and then, eradicated or reduced to a permissible level 2. All conditions that can affect the operations were considered and proper measures were taken. 3. The mitigating actions in case of accident are established, are clear and understood by all parties and the resources available. 4. Ensure that all resources (material or human) are available at the moment they may be needed. 5. Participate in all the stages of the project from planning to the execution. 6. In some operations with higher risks, the surveyor must issue a certificate of approval prior to the beginning of the operations. This certificate is issued on site. Damage yacht following a storm Fig 2 The surveyors specialized in small craft and leisure vessels have the experience and knowledge needed to deal with the special characteristics of this kind of vessels. Due to the diversity of materials, equipment, manufacturing techniques, sizes and other factors, among this group of surveyors can be split in more specialized areas. Yachts are assets Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 43
that may cost a lot of money for their owners and logically are protected with insurance; surveyors in most of the cases are appointed by the insurance company to assess the extension and severity of the damages, report the facts of the incident, repair options and possible costs. It has to be considered that in a first moment may be is not possible to assess all the damages and additional opening up can be required before a damage survey report can be issue. Also, the surveyor may be appointed to oversee the repair process to ensure that everything is done according the rules and regulations that may apply while the costs are kept within the budget; in these cases is very likely that payment is not done until the surveyor approves the repair works. Usually the surveyors appointed for these types of surveys are not involved in establish whos responsible for the damage in those cases where the damage is result of an accident and not by natural causes (authorities are more likely to be in charge of the investigation), hell be more involved with the repair process. It has to be kept in mind that insurance companies require that surveyors send the reports of the accidents (or incidents) ASAP. When the surveyor is appointed for a damage survey, he must ensure that all proper measures are taken to avoid additional damages to the boat and the equipment on board, especially sensitive equipment such as electric and electronic equipment. Cargo damaged Fig 3 A cargo surveyor may be appointed in those cases where the cargo suffered a change in its original condition(s) in such a way that cannot be used as intended. Since it is an issue related to the condition of the cargo transported, a cargo surveyor is the most suitable person to be appointed in this case. The surveyor must assess the extent and nature of the damage and in some cases find out the cause of the damage but this will not be easy to find especially when the master and the crew dont cooperate as instructed by their principal. In those cases, the surveyor must exercise his skills to try to collect as much information as possible given the circumstances (part of his duties is to collect as much as possible objective evidence that can be used to prove or refute claims). As stated above, cargo can be double insured. The P&I clubs deal with claims arising from cargo damage representing the owner and cargo insurers represent the cargo owners. This may lead to a situation where surveyors representing different interest find themselves on board. A professional behavior must prevail at all times. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 44
The surveyor must ensure that the cargo dont receive further damage by taking the proper measures to avoid such situation. Actions such as removing or separating the cargo which didnt suffered damage, find the source(s) of the damage and fix it before it affects the rest of the cargo, changing operation procedures, repairing the cause of the damage (e.g. cargo hold hatches rubbers) can be helpful when avoiding further damages. This is very important since in case the claimant is compensated for the damages, he will be compensated only for the damages caused, not by the full cost of the cargo. A surveyor can be appointed to inspect the cargo at the moment it is being loading on board to establish in what condition it is. Such condition and quantity must be included in the Bill of Lading (B/L) and will be the reference to establish if at the end of the voyage the damage suffered damage or a shortfall (also the P&I coverage is invalid if such entrance in the B/L is missing). In this cases, surveyor may remind the captain (as the responsible for the cargo) to log any condition that may affect the cargo during the voyage such as weather reports, ventilation provided, inspections and any other relevant to the type of cargo on board. Structural Damage after a collision Fig. 4 The nature of the damaged showed in the picture involve the structure of the ship, area where especially class surveyors are involved. The surveyor must assess the extent and nature of the damages, estipulate the repairs to be done in order to keep the ship in class. For this particular example, the ship cannot be in class until the proper repairs are done according class standards. Its very likely that the cargo is unloaded and temporary repairs done to allow the ship proceed to the repair yard (the ship is allowed to sail for a single voyage). The survey will determine the seaworthiness of the ship considering the damage suffered in those structural elements that would impair the ships structural integrity, water tightness and weather tightness. The classification society based on the survey report and the surveyor recommendations will decide what repairs must be done immediately and which ones can be deferred to the next periodical survey. Additional actions may be required such as connecting weakened elements to stronger ones, cement boxes, etc. It is very important that the surveyor includes the obvious damages, plus fractures, buckling, corrosion and deformations found that may be were there before the accident but in any Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 45
case would affect the structure of the ship. As general rule, any defect that affects the classification of the ship must be repaired, so its very important that the surveyor is well familiarized with the rules and regulations of the classification society. Once the repair process is done, a new survey will be required by the classification society to delete the class conditions. The extent of the survey will depend on the damage but in a case like in the picture, probably will be similar to a Special Survey (5 years) and all the repair process must be done according the rules and regulations of the classification society including the certification of the staff involved and the materials and machinery used. In most of the cases and depending on the conditions of the damage(s), the flag state and the port state must be notified (its the owners responsibility to inform) to carry out the investigations of the accident, prevent further pollution (in such cases where theres oil spilled), evacuate the crew and passengers, etc. If a third party is involved, the P&I club must be notified as well. All these parties may require appointing a surveyor on behalf of each one of them. Task 3 In setting up a new marine surveying business you have to consider the market place, legal and business issues a) Discuss the areas you would research in setting up your business.
Most of the strategy is explained in the business plan prepared for the business that is intended to be initiated. The areas to be explored are the result of the knowledge of the author about the geographical area where hes intended to work (Colombia, Venezuela, Panama in an initial stage) and his professional experience working as engineer in several types of ships and offshore installations. The following areas will be explored: 1. Local surveying companies. Some research has been done already and the results indicate that theyre overload with work. Information obtained indicates that theyre willing to hire individual surveyors when their capacity is exceeded e.g. hire a surveyor per individual surveys without establishing a permanent work relationship. This way of work can be attractive considering that the surveyor can work with his own clients plus those works given by local companies. Some of the companies that have been contacted are http://www.consemargroup.com/ and http://www.atlasmarine.net/ 2. Local representatives of P&I clubs and insurances. Insurance such as P&I clubs is one of the main customers the author is intended to contact. In a first stage local representatives will contacted and in a second stage, direct personal contacts will be scheduled, very likely traveling to the UK so they claim handlers can meet Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 46
personally the author. Its planned to carry out ultra sonic test of water tightness of cargo holds which can be of interest for the P&I clubs. Additionally, pre entry surveys, cargo damage surveys (in some particular cases), etc. The corporation of Lloyds agents will be contacted plus other insurance companies based in the area. 3. Local classification societies (not belonging to IACS). In Panama there are some classification societies which are recognized organizations by the Panamanian maritime administration. Usually they work with small feeder vessels in the Caribbean basin and pacific coast of central and South America which doesnt want to pay the cost of a recognized classification society and usually consider is not necessary to do so, especially because these organizations are not so strict in their inspections. This option has to be considered carefully since the reputation as a professional surveyor can be jeopardized but it has to be kept in mind that as surveyor my work will be to report findings, what the classification society does after is behind the control of the surveyor. 4. Local maritime administrations (Colombia, Venezuela, Panama). As certified ISM code internal auditor, maritime administrations can be interested in such qualification. It is known that at least in Venezuela the surveyors working on their behalf need qualifications beyond those the author posses (further investigation have to be done in Colombia; in both countries therere no recognized organizations, the administration carry out all the surveys through their surveyors network). 5. Local training institutions which lack in some level of well prepared lecturers or as usually happen, are not updated with the latest rules and regulations in the industry. In the case of Colombia, the merchant marine is ruled by navy officers which are not familiar with IMO conventions in the same way that a merchant marine officer can be after years on board. The main institution in Colombia is SENA http://www.sena.edu.co/Paginas/Inicio.aspx and it was already contacted (an appointment will be scheduled in the near future). In Venezuela and Panama the situation is different due to the diversity of options in the market and the requirements asked by the administrations to provide training in the maritime area. 6. Local owners for those cases where they may need the advice of a surveyor such as purchases, repairs, performance of the machinery (engines), ISM internal audits, etc. In this point it has to be considered the experience of the surveyor since its not the same to survey a small leisure boat than survey a VLCC. Container ships, general cargo ships and bulk carriers will be the segment to be focused on. In an initial stage, bigger international companies will not be contacted unless the technical superintendent or manager is known. The reason of this strategy is to avoid waste of time in something that may have little or no results. Another way to contact local owners is to offer technical advice in those cases where their technical department lacks of experience. Local companies where the surveyor has work previously or where known colleagues are working will be the first to be contacted. 7. Agents. They will be contacted since they are the local representative of the principals (ship and cargo owners, charterers) and work for the ships on all their Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 47
local needs. This option is of particular interest where claims arises against the ship due to damages to cargo, injuries caused to the crew or passengers, damages to installations etc (even though all these can be appointed through a P&I club). Additional to the local agents, the agents of the Corporation of Lloyds and the survey and claims team will be contacted 8. Law firms offices located in the geographical area such as Clyde and Co. (http://www.clydeco.com/offices/caracas/) and Northon Rose (http://www.nortonrosefulbright.com/latin-america/offices/caracas/) can be contacted. Similar local law firms e.g. http://www.sabatinop.com/inicio.php and http://www.luiscovaa.com/ will be contacted 9. Other areas such as leisure (owners, marinas, insurance), tankers, cargoes, financial institutions etc will not be considered since theyre out of the scope of experience and knowledge of the author or they dont have strong presence in the area where the business is intended to be.
b) Explain the legal aspects of setting up different types of businesses.
The legal requirements to set up a business (legal entity as it can be translated from Spanish) will differ from country to country. A brief description will be done of the most common type of business or legal entities available and the pros and cons of each one. Since the author is planning to establish his business in Colombia, further information will be provided about Colombian regulations. There are some common requirements that any business must comply with such as a name, an address, financial capital and purpose of the business. As stated above, the specific requirements may vary from country to country. 1. Sole trader. The sole trader is the basic business form where one person register a name (usually his own full name) and can start almost immediately his / her business without any additional requirement (in Venezuela therere a lot a additional requirements). The advantages of the sole trader figure is the independence since theres nobody else taking decisions, the sole trader can and have to take all the decisions of the business, from day to day operations till the decisions that will affect the future of the business e.g. business plan. The sole trader doesnt have to report to anybody about his actions, financial results, decisions, etc. (its his own boss) but this doesnt mean that he doesnt have to declare earnings to the national taxation entity as the law requires. This figure also allows to subcontracting man power when required which can be favorable when the work load cannot be attended by the sole trader alone and at the same time dont rise the financial obligations permanently; If the work load is steady on the time, the sole trader can consider to change the business figure and expand the business. On the other hand, the down side of the sole trader figure is that hes responsible with his whole capital for the debts of the business, this is unlimited Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 48
liability. Another point to consider is that as sole trader, some clients may be reluctant to work with, especially bigger companies and corporations and public entities. Another issue to be considered when working with this figure is that the sole trader depends on his clients and must try as much as possible to respond to their needs which usually are to be available 24/7 as most of the marine surveyors in the market but for the sole trader is most important since its his business, not somebody else business. 2. Partnership. As the name implies, a group of partners pool their knowledge, financial resources and whatever else is required to start and run the business. Under the common law legal system the partners manage the business (day to day and future affecting decisions) and are liable personally for all the debts but in some cases such as the limited partnership some partners limit their responsibilities in exchange for running the business and in the limited liability partnership all the partners somehow limit their liability. When the knowledge and experience of the partners comes from different backgrounds it can help to provided a wider scope of services to the clients which definitely is a good advantage. An example can be surveyors with deck and engine backgrounds coming from tankers, bulk carriers, cruise ships etc. On the other hand, the main down of the partnership comes from the fact that at the moment of taking decisions that may affect the business or even less important decisions, the partners must agree on the decision taken. In those cases where theres no agreement, it can be the end of the partnership. This particular business form have different regulations depending on the country, in case this will be the choice the surveyor have to do further research in the country where hell be established. 3. Limited Liability Company (Ltd or PLC in the UK). The main difference between the LLC and the sole trader and partnership is that the shareholders in the LLC are responsible only for the debts up to the shareholding of each one of them. According Rocket Lawyer (http://www.rocketlawyer.com/article/why-start-an-llc- limited-liability-company-advantages-and-disadvantages.rl) Unlike sole proprietorships or partnerships, LLCs allow you to shield yourself from personal liability if your business goes bankrupt or injures someone or otherwise runs into legal trouble. This means that, although your business might fold, courts and creditors will generally not be able to take your personal assets. In other words, your business and personal responsibility and assets are separate. While in the partnership the partners cannot sell their part of the business, in the limited liability companies the shareholders can sell at any moment their part in the stock markets (PLCs) or privately (Ltd companies). In some countries as Mexico and Argentina there are legal limits to the quantity of shareholders (50) and the management of the business must be delegated to a board of directors. Which business form should be established will depend entirely on the surveyor(s) but it has to be kept in mind that a big company probably will not wish to work with a sole trader (at least for bigger projects). A limited company would be the preferred choice for big Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 49
companies but the requirements for such business are more difficult to comply with and find suitable partners may not be easy.
c) Explain the elements that have to be considered in developing a business plan
A business plan is a statement of what a business is intended to be in the future. The goals must be set and included together the strategies to achieve such goals in the plan considering the situations that may affect the performance of the business. Such situations are analyzed though methods such SWOT (Strength Weakness Opportunities and Treats). In short, the business plan when used by a sole trader who is starting his business stops the guessing and starts to take seriously the situations that will affect the business during the day to day operations. The business plan must include the following information (information required for a one person business) Description of the business (overview) including mission and vision statements Who will be the segment of the market intended to attend (clients) and how they will be reached Objectives (goals) of the business Services or products to be offered Financial review including projections, growth plans and cash flow Market and business environment analysis (SWOT analysis) Marketing and business strategy Action plan Resources needed (financial resources, human resources, legal advisors, equipment, etc) Prices including the strategy to get such prices (costs, competitors, value of the service provided) and how the clients will be charged (by hour, by job, etc) Billing policies including procedures for quoting, billing and collecting amounts due Performance indicators (also known as KPIs, used to determine if the goals have been reached) Other information may be added to the business plan depending on the size of the business such as a summary and company organization. Information such as the financial review, management process and the company description will be more detailed and probably more complicated in bigger companies. In some cases is normal that financial institutions require a business plan before granting lends (in those cases, the financial projections are of paramount importance). A model business plan is attached to this assignment using the information and ideas that the author has to start his business. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 50
Marine surveying requires working in difficult and changing environments a) Discuss how the physical, work environment may affect the surveyor in the course of carrying out a survey in both sectors of the industry
The surveyor may find himself in work environments that may affect his health or even his life if common sense and some basic rules are not followed. Some of the most dangerous work environments are mentioned then 1. Tanks. The different tanks located on board have to be inspected by different reasons. a. Ballast tanks: structural elements contained inside the tanks make mandatory to carry out inspections on regular basis. The frequency of such inspections will depend on the age of the ship. The risks associated with ballast tanks are low oxygen levels, flooding during the inspection, hits, cuts (by sharp corroded metal), etc. Especial care must be taken in tanks that have suffered damage e.g. after a collision or grounding. b. Cargo tanks on tanker ships have to be inspected especially in product and chemical tankers when new (different) cargo will be loaded and such inspection is a requirement. Risks associated with such inspections are low level of oxygen and poisonous vapors, corrosive substances remaining in the tank surfaces, etc. c. Other ships tanks such as fuel, lube oil, sewage tanks, etc have particular risks such as hydrocarbon or H2S vapors which need specific gas analyzers. In any case, the crew must follow the proper procedures (as explained later) and ensure that the conditions for safe entry into confined spaces are followed 2. Engine and technical spaces require specific personal protection equipment (PPE) for the risks associated with such spaces such as ear protection and steel toe shoes, but additional PPE may be required according to the ships safety management system (SMS) and ships specific conditions. 3. Yards. When working in repair yards and shipyards the surveyor may find himself in conditions that require special attention such as those caused by cranes carrying heavy weights, welding process, sand blasting and most of the process in the yard. The use of helmet, steel toe shoes, gloves, goggles is usually mandatory but following the yard rules and use common sense is of paramount importance for avoiding accidents. Another point that surveyor must consider specially when working as sole trader are the working periods of time. Surveying of ships may require the surveyor to adapt his schedule to the client schedule and since the ship will not wait, the surveyor may work for long periods of time in order to finish the survey in time. This situation may lead to fatigue and cause an error in the survey or even worse, an accident. Other situation that must be Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 51
considered when talking about the work environment is the long periods away from home. This situation may affect the surveyor when situations arise at home that may disturb his judgment or safety awareness.
b) Discuss the regulatory regimes that surveyors in the commercial and leisure sectors must consider to protect themselves and their surroundings
The marine surveyor does his job in different places on board and geographical locations around the world. In most of the countries nowadays there are laws that rule the safety in different industrial places such as port facilities and ships. The surveyor has to comply with all the applicable laws that may apply on his duties regardless the location where the surveys been done. It is of paramount importance that the surveyor is familiar with the safety regulations before to start the job to avoid any trouble. To do so, surveyor can contact the agent who should provide any relevant information. The Safety Management System on board the ships, the local legislation and any health and safety management system are the main regulations to be followed. All of them have the same basic objectives; prevent health affecting issues, injuries and loss of lives. To reach those objectives, the laws and codes must include the safety rules that may apply to the ship operations such as entries to confined spaces (tanks, cofferdams, etc), personal protection equipment (EPP) to be used according the job, location, etc. Also, the conditions that must be met before initiate a job must be complied strictly to avoid accidents; such conditions must be included in the relevant work permits such as permit to entry in confined spaces which must specify minimum oxygen levels for safe entry, personnel involved (guard at the entry), lighting, etc. It is important that ships staff thats familiar with the procedures and the ship escort the surveyor at all times. When surveys are carried out on board ships where theres no safety management system (e.g. fishing vessels and leisure vessels), local and flag state rules and regulations must be followed strictly. When the surveys include tasks to be done in shipyards, repair yards and dry docks such installations must inform the safety regulations to be followed in their yards. It may be the case that the yards posses some certification such as OHSAS 18001 which will provide the guiding regarding safety procedures (OHSAS 18001 is the equivalent ashore of the Safety Management System on board). The surveyor has to take care not only about accidents but also about long term issues that may affect his health. Risks such asbestos, noise, chemicals exposure, etc. without being protected with proper PPE used correctly can cause damages to the health that will not show any sign until health is compromised. Thats why special care must be taken in cargo spaces, pump rooms, tanks, etc. that may be contaminated with substances that may compromise the health. Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 52
Safety in the work place has some responsibilities from the employer to his employees but this doesnt mean that the employee has no responsibility at all. An example of this is that every employee must use the PPE provided by the employer, follow the procedures established and report any situation that may affect his own or others health and safety. Not doing so may lead to dismissal or even legal consequences. On the other hand, usually the employer by law (depending on the country) must: 1. Establish the safety and health policy where is stated the organization objectives relating to the safety 2. Provide the proper PPE for every job 3. Ensure that the employees are well familiarized with the use of the PPE, emergency duties and the tasks to be done before they start (considering the risks involved) 4. Create and implement the proper operational procedures (considering the risks involved and the safety legislation) and accident reporting procedures; many times by law, the employer must report the accidents to the local authorities which can be the flag state or the port state. Employers must report deaths, some injuries such as those that impedes the employee to come back to his duties in 24 hours (usual period of time) e.g. fractures, amputations, burns, electric shock, etc. Other situations that may be required to be reported (incidents) to the authorities can include fires, collapse of structures (such as cranes), etc. Also, it can be required to report deceases such as gastrointestinal deceases in the passenger ships, illness caused by virus, etc. 5. Guards against the risks that may affect people not involved in the work (e.g. guards around openings in the floor, protection against chemical or biological exposure, etc) 6. Provide the equipment to be used in case of emergency such as firefighting equipment, first aid and medical equipment, rescue equipment, etc (this will depend on the legislation, installations and operations done). The employer must ensure that the personnel familiar with such equipment and tasks are available at any time it can be required. 7. Any other that each country and / or organization may request. 8. All of this applies in the same way to the self employed surveyor.
FALTAN REFERENCIAS DE LA PAGINA 5 Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 53
List of References (1) Reuters, by Ron Bousso, Oct 2013. Oil Trade Patterns Shift as Refineries go Global [Online] Available at http://www.reuters.com/article/2013/10/04/refineries-trade- idUSL6N0HU1CA20131004 accessed November 2013 (2) Independent Petroleum Association of America, March 14th 2012 Shifting Petroleum Trade Patterns: Latin America Reorients [Online] Available at http://oilindependents.org/shifting-petroleum-trade-patterns-latin-america-reorients/ accessed November 2013 (3) Reuters, by Marianna Parraga, Nov 17 th 2013. Analysis: Latin America Grows Increasingly Hooked on U.S. Fuel Imports [Online] Available at http://www.reuters.com/article/2013/11/17/us-oil-latam-imports- idUSBRE9AG07120131117 accessed December 2013 (4) Genco Shipping & Trading Limited, no date of publishing available. Industry [Online] available at http://www.gencoshipping.com/industry.html accessed December 2013 (5) Astrup Fearnley, by Jarle Hammer, July 2004, [Online] available at http://www.fearnresearch.no/index.gan?id=140&subid=0 accessed December 2013 (6) Black Iron Inc., no date of publishing available. Iron Ore [Online] available at http://www.blackiron.com/Investors/Iron-Ore/default.aspx accessed December 2013 (7) International Steel Statistics Bureau, no date of publishing available, [Online] available at http://www.issb.co.uk/global.html accessed December 2013 (8) World Coal Association, no date of publishing available, [Online] available at http://www.worldcoal.org/coal/uses-of-coal/ Accessed December 2013 (9) Casson Lionel, The ancient mariners, Seafarers and Seafighters of the Mediterranean in ancient times, 2 nd Edition, Princeton University Press. 1991. (10) United Nations Conference on Trade and Development, by the UNCTD Secretariat, September 1998 [Online] Available at http://unctad.org/en/docs/posdtetibd1.pdf Accessed December 2013 (11) Steven D. Peterson, Peter Jaret and Barbara Findlay Shenck. Business plans kit for dummies. 3 rd edition. John Wiley and Sons, 2010. (12) Central Intelligence Agency, no date of publishing available, The World Factbook [Online] available at https://www.cia.gov/library/publications/the-world-factbook/ accessed November 2013. (13) Super Yacht Group, February 2013, Economic Analysis of the Super Yacht Industry [Online] available on request from www.superyachtintelligence.com requested by email on November 2013. (14) International Maritime Organization, Marianne Harvey, 2012. The Origins of IMO [Online] available on http://www.imo.org/KnowledgeCentre/ReferencesAndArchives/Documents/Harvey,%20 Marianne.%20The%20Origins%20of%20the%20International%20Maritime%20Organizatio n-%20Information%20Resources.%20%20%20IMO,%202012.pdf Accessed on November 2103 Marcos A. Gonzalez Unit Assignment 1 January 14th, 2014 Page 54
(15) United Nations Conference on Trade and Development, by the UNCTD Secretariat, September 1998. Guidelines for Port Authorities and Governments on the privatization of port facilities [Online] available at http://unctad.org/en/docs/posdtetibd1.pdf accessed on November 2013 (16) Det Norske Veritas, January 2011 Survey Requirements, [Online] available at https://exchange.dnv.com/publishing/rulesship/2011-01/ts701.pdf accessed on November 2013 (17) United Kingdom Legislation, originally published in 1906, online copy available at http://www.legislation.gov.uk/ukpga/Edw7/6/41/contents accessed in December 2013. (18) IHS, no data of publishing available, [Online] available at http://www.ihsfairplay.com/About/Definitions/definitions.html (19) Seward Robert, November 2002, The Role of the Protection and Indemnity (P&I Clubs) [Online] available at http://www.itopf.com/_assets/documents/seward.pdf
Additional bibliography 1. International Maritime Organization web site www.imo.org 2. International Association of Classification Societies web site www.iacs.org and http://www.iacs.org.uk/document/public/explained/CLASS_KEY_ROLE.pdf 3. Det Norske Veritas / Germanischer Lloyds web site http://www.dnvgl.com/ 4. Germanischer Lloyds rules for classification of ships available at http://www.gl- group.com/infoServices/rules/pdfs/gl_i-0-0_e.pdf 5. Paris Memorandum of Understanding web site and reports available online a. https://www.parismou.org/about-us/history b. https://www.parismou.org/system/files/Paris%20MoU%2C%20incl%2036th%20 amendment%20%28final%29.pdf c. https://www.parismou.org/sites/default/files/Annual%20Report%202012%20% 28final%29.pdf 6. International Chamber of Commerce web site http://www.iccwbo.org/products-and- services/trade-facilitation/incoterms-2010/ 7. International group of P&I Clubs web site http://www.igpandi.org/ 8. The UK P&I Club web site http://www.ukpandi.com/ 9. United States Foreign Agricultural Service web site http://www.fas.usda.gov/data/search?f[0]=field_report_type%3AWorld%20Production %2C%20Markets%2C%20and%20Trade%20Reports
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Contents Task No. 1 ............................................................................................................................................ 2 Discuss the developments in trade and trading patterns in both sectors of the marine industry ........................................................................................................................................... 2 Commercial Sector ....................................................................................................................... 2 Leisure Sector ............................................................................................................................. 13 Explain the role of the regulatory bodies involved in the marine industry.......................... 16 International Maritime Organization IMO ................................................................................ 16 National Maritime Administrations ........................................................................................... 18 Classification Societies .............................................................................................................. 22 P&I Clubs and Marine Insurance ............................................................................................. 29 Explain the roles of the parties and stakeholders involved in the marine industry ........... 32 Cargo owners .............................................................................................................................. 33 Ship Owners, Charterers, Operators ....................................................................................... 34 Finance, Insurance and legal.................................................................................................... 36 Freight forwarders, agents and brokers .................................................................................. 37 Port Authorities, dry docks and repair yards .......................................................................... 39 Task No. 2 .......................................................................................................................................... 40 Transportation of a semi submersible platform by a heavy transport carrier .................... 41 Damage yacht following a storm .............................................................................................. 42 Cargo damaged .......................................................................................................................... 43 Structural Damage after a collision .......................................................................................... 44 Task 3 ................................................................................................................................................. 45 a) Discuss the areas you would research in setting up your business. ............................. 45 b) Explain the legal aspects of setting up different types of businesses. .......................... 47 c) Explain the elements that have to be considered in developing a business plan ........ 49 a) Discuss how the physical, work environment may affect the surveyor in the course of carrying out a survey in both sectors of the industry............................................................. 50 b) Discuss the regulatory regimes that surveyors in the commercial and leisure sectors must consider to protect themselves and their surroundings .............................................. 51 Bibliography ......................................................................................... Error! Bookmark not defined.
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