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The Nautical Institute


The Nautical Institute

A PRACTICAL GUIDE - 2nd edition

Published by The Nautical Institute

202 Lambeth Road, London SEl 7LQ, England
Telephone: +44 (0)20 7928 1351
Fax: +44 (0)20 7401 2817
Publications e-mail: pubs@nautinst.org
Worldwide web site: http://www.nautinst.org

First edition published 1986 Reprinted 1988

Second edition published 2000

Copyright © The Nautical Institute, 2000

All rights reseIVed. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form by any means, electronic, mechanical, photocopying, recording or
otherwise, without the prior written permission of the publishers, except for the quotation of brief
. .
passages ill reVIews.

Although great care has been taken with the writing and production of this volume,
neither The Nautical Institute nor the authors can accept any responsibility for errors, omissions
or their consequences.
This book has been prepared to address the subject of ship command. This should not,
however, be taken to mean that this document deals comprehensively with all of the concerns
which will need to be addressed or even, where a particular matter is addressed, that this document
sets out the only definitive view for all situations.
The opinions expressed are those ofthe authors only and are not necessarily to be taken as
the policies or views of any organisation with which they have any connection.
Readers and students should make themselves aware of any local, national or international
changes to bylaws, legislation, statuto!), and administrative requirements that have been introduced
which might affect decisions taken on board.

All photographs and diagrams acknowledged

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Foreword ..............................................................................................................................................5
by CaptainE.M. ScottRNRRD .... FNI, Senior Vice President, The Nautical Institute
by Captain TJ. Bailey FNI, Chainnan ofthe Conunand Book and Scheme Revision Group
The Nautical Institute Command Diploma - the road to promotion ..............................................................8
by Captain P. Boyle MRIN FNI
Letter to anewly promoted maste1: ..................................................................................................................... 10
by Captain AC. Collop MNI
SECTION I - Responsibilities of the Sbipmaster
1 The Nautical Institute on conunand ...................................................................................................... 11
A COl.D1cil report prepared by The Nautical Institute Command Working Group
2 What a ship owner requires from a master......................................................................................... .15
by Captain P. Chawla MICS FNI, General Manager Quality Assurance and Training,
Anglo Eastern Ship Management Ltd.
3 Training for conunand ........................................................................................................................... .21
by Captain P. Roberts BSc FNI
4 The master's responsibilities in law. ...................................................................................................... .27
by Captain M.S. Maclachlan MICS FNI
5 The ISM Code and the mastet: ............................................................................................................. .33
by Captain L MathisonFNI, Fleet Safety Manager, Bibby Harrison Management Services Ltd
6 Health management on board ....................•.......................................................... .40
by Dr. A.C. Kulkarni, Consuitant in Diving Medicine, India
7 International oil pollution legislation and conventions - an update. ................................................ .44
by Captain N.K GuptaMICSMNI,Jawaharlal NehruPort Trust, India
8 Marine insurance and the mariner ........................................................................................................48
by Mr. P. Anderson BA (lIons) FNI
9 Surveys and the shipmastet: ................................................................................................................... 59
an extract prepared by Lt CdrJ.A Hepworth RN Ret'd MNI from the
Ship SUrvey andAudit Companion by Captain W. Vervloesem AMNI
10 Flag states and the shipmaster. ................................................................................................................ 70
by Captain DJ.F. Bruce FNI, Liberia
11 Port sbte control and the U.S.A ........................................................................................................... .80
Principal features at a glance - an extr.act from Port State Control,
published by the UK P&l Club 1998
12 Distress -the master's responsibilities. ..................................................................................................87
extracts from PerilatSea andSalvage - The International Chamber of Shipping
13 Salvage - contracts and the master........................................................................................................89
by Mr. c.P. Beesley, Companion, Ince & Co., London
SECTION 11 - Management
14 Conunercial management and the shipmastet: ................................................................................. .101
by Cdr. RL. Tallack RNR RD" BSc FNI, Northstar Maritime & Environmental Consultancy
15 Managing safety on board ................................................................................................................... 114
by Captain C.M. Mahidhara FNI

CDNTENTS (continued)

16 Measures of economic efficiency in shipping..................................................................................... 118

by Professor R.O. Goss MA PhD FNI, Department of Maritime Studies, CardiffUniversity
17 Running costs. ........................................................................................................................................ .121
by: M; J_~~ • D-;''W'nard ·(~hc'i bl Plrt1lUiOtl o{fi'm:rplay Publicdions lJd from th' 00ck oflhl same ILame m rh,17 !hip Ma1l.agunnn Sin,,)
18 Managing people on board ................................................................................................................. .129
by Captain E.M. Scott RNR RD·· FNI
19 Managing shipboard maintenance. ..................................................................................................... .132
by Captain U. Zuber, Osterreichischer L10yd Shipmanagement, Austria
20 Managing information technology at sea .......................................................................................... .136
by Mr. DJ. Patraiko BSc MBA MNI, Project Manager for The Nautical Institute
21 Managing risk on board ....................................................................................................................... .142
by Captain TJ. Bailey FNI
22 Planning a dry-dock. ............................................................................................................................. .148
by Mr. J.L. Hutchinson CEng MIMarE
23 Managing dry dock maintenance........................................................................................................ .153
by Captain S. Chandorkar MNI
24 A guide to the 'Crewman 'standard ship management agreement .................................................. .163
by Photis M. Panayides BSc, University of Plymouth
(reproduced from SEAWAYS, the journal ofThe Nautical Institute)
25 Managing social relationships with multi-cultural crew8. ................................................................. .166
by Captain A. Achuthan ExC MICS MNI
26 On your own .......................................................................................................................................... .175
by Mr. CJ. Parker BSc FNI, Secretary, The Nautical Institute
SECTION III - Operational aspects of command (practical)
27 Port procedures...................................................................................................................................... .183
by Captain C.M.R. L10yd FNI
28 Picking up the pilot .............................................................................................................................. .187
by Commodore R.M. Thorn CBE FRGS FNI
29 Navigation in pilotage waters............................................................................................................... .189
by Captain F. Baillod FNI
30 What the salvage tug will want to know in the event of damage.................................................... .194
by Captain D. Hancox FNI, consultant salvage master
31 Towing - receiving the tug and making fast.. .................................................................................... .197
by Captain W.V. Hopper MNI, formerly Towing and Operations Superintendent,
United Towing Company Ltd.
32 Shiphandling and berthing with tugs................................................................................................. 200
by Captain R.W. Rowe FNI
33 Anchoring systems - some insights for mariners.............................................................................. 210
by Captain A.O. Ojo and ProfessorJ. King MSc FRIN FNI, Cardiff University
34 Anchoring and anchorage in strong tides............................................................................................214
by Captain S. Chaudhari FNI
35 Anchoring a VLCC. ............................................................................................................................... 21 7
by Captain C.A. McDowall MSc CEng MIMechE MRINA FNI


CONlENTS (continued)

36 Man overboard - rescuing survivors from the sea ............................................................................226

by Captain M. Williams FNI
37 Masters standing orders. .......................................................................................................................229
by Captain EH. Beetham FRSA FRIN FNI
38 Working with the chief engineer.......................................................................................................... .233
by Mr. M.Jerlmvic CEng. Chief Engineer, Croatia
39 Working with the catering department .............................................................................................. 240
by the Committee of the Association of Marine Catering and Supply
40 Using shipboard computer-based maintenance systems. ..................................................................245
by Captain M. Macleod FNI
41 Entry into enclosed spaces. .................................................................................................................. 260
by Captain F.GM. Evans BA CertEd GradlFE FNI
42 Safety on deck in rough weather......................................................................................................... 266
by Captain E.W.S. Gill FNI
43 Fire and damage control.. .................................................................................................................... 269
by Mr. G.B. Standring, Managing Director, Marine Safety Services Ltd.
44 Bunkers - what the master needs to know......................................................................................... .273
by Mr. D. BarrowMIBIAFInstPetAMNI
45 Onboard training and development .................................................................................................. 278
by Captain LA Holder ExC lVIPhil FRIN FNI
46 Altered command responsibilities for pirates, stowaways, illegal drugs and terroris.m ............... 284
byBrigadier(Ret'd)B.AH. PanittCBE, Ccmpanion, Chainrun1, InternationalMaritime Security
47 Seafarers and welfare support ..............................................................................................................289
byThe Rev'd CanonK. Peters, COI'l'IpIIlion,Justice and Welfure Secretary, The Mission to Seafurers
SECTION IV - Technical and environmental
48 Modem communication systems and GMDSS. .................................................................................293
by Mr. I. Waugh, Mobile Radio & Satellite Conununications Training & Consultancy

49 Marine paint technology.......................................................................................................................297

by Mr. K.E.M. Haugland,Jotun-Henry Clark Ltd.
50 Standing by a newbuilding .................................................................................................................. 307
by Mr. M.P. Coles lEng AMIMarE, ClriefOfficer (E) R.F.A.,
MoD Integrated Logistic Support Manager
51 Ship structures inspection and maintenance. ......................................................................................311
via lACS, summarised by Lt CdrJA Hepworth RN Ret'd MNI
52 The use of electronic aids to navigation ............................................................................................ 314
Marine Guidance Note MGN 63 (M+F), February 1998
53 Working on secondment ...................................................................................................................... .320
by Captain RF. Walker BSc MCIT MNI, Mobil Shipping and Transportation Company
54 Waste management on ships. ............................................................................................................... 324
by CaptainD.NL YeomansBAFNI
55 Ballast water environmental and safety issues. .................................................................................. 329
by Mr. DJ. Patraiko BSc MBAMNI, Project Manager for The Nautical Institute

CONTENTS (continued)

56 Oil pollution prevention and emergency response - the shipmaster's responsibilities................ 334
by Captain CJ. Shill MNI, Chevron Shipping Company
57 Weather routeing and voyage planning ............................................................................................. 340
by Captain F. Baillod FNI
58 The Nautical Institute Command Partnership and Diploma Scheme. ............................................ .348
SECTION V - case studies
59 Man overboard ..................................................................................................................................... .350
60 The grounding of passenger vessel HANSEATIC.............................................................................. 352
extracts from the Transportation Board of Canada,
Marine Occurrence Report Number M96HOO16


by Captain E.M. Scott RNRRD" " FNI

Senior Vice President, The Nautical Institute

SHIPMASTERS TODAY AND THOSE IN COMMAND OF NAVAL VESSELS have unique authority which is different to that of
the factory manager or civil servant. Ships, although under thejurisdiction of the Flag State, are treated in law as
independent 'out-posts'. The master and commanding officer are expected to uphold the general rule of law and
to ensure the safety of the crew and the ship using their best judgement.
Distress, search and rescue are mutual responsibilities and are shared between ships and shore coordination
centres. Still, the oceans are too wide for any nation adequately to provide emergency coverage economically, so
the principles of self-sufficiency are reinforced. But as every shipmaster is aware, the environment of command is
changing. The old values are still expected but there are a growing number of restrictions which make command
more difficult.
In commercial fleets, economics, efficiency and competition are a dominant influence. There are few
overmanned cargo ships and seldom enough time or resources to meet all demands. The networks of trade
sustained by shipping tend towards longer logistic supply lines as more products are manufactured in developing
countries and consumed in the developed world. Under these terms, quality of service becomes ever more
With the growing trend towards free flags, ships are becoming increasingly exposed to port state and regional
inspections. Unless they are on a regular trade, shipmasters never quite know what to expect when visiting ports
in other countries.
Shipmasters are becoming more exposed to unlawful practices which are generally outside their control. The
pressure on economic migrants is increasing and stowaways are becoming more numerous. Piracy shows no
signs of being brought under control and ships continue to be used for traffic in narcotics.
Although ships may have a life expectancy in excess of twenty years the shipping industry, like all others, is
taking advantage of new technology. There is thus a widening gap between the outfit and control of new and old
ships. The crew, of course, have to interchange and are therefore exposed to amore varied spectrum of technology
than ever before.
Few masters, except perhaps in coastal trades, would disagree that manning is now universally international.
My own relatively small vessel currently has seven nationalities of crew and they all work well together as a team.
However, for a shipping company, the problems of identifYing the best personnel for command is becoming
more difficult because those moving into the senior chief officer range now come from many different countries,
backgrounds and cultures.
It cannot be assumed that the essence of command can just be picked up. Assuming authority and managing
the voyage through delegation, whilst exercising good judgement to keep many often conflicting demands in
balance whilst optimising the owner's return on the venture, is not ajob for the uninitiated. Indeed, shipmasters
today are exposed to an increasingly severe climate offinancial penalties for injury, negligence, environmental
damage and poor out-turns.
In my own current part of the industry, passenger safety and care for passengers even when not on board is my
responsibility. A careless accident could cause my company to become involved in litigation costing millions of
Where people are concerned, the days are long since past when the role of the ship's staffwas simply to take
the ship safely from one location to another. There is significant competitive advantage in repeat passengers and
we want to create an atmosphere where passengers will choose us again.
I want to emphasise that command, like all other aspects of management, is changing. Being a good chief
navigator is essential but it is not enough. Shipmasters have to be able to contribute to the success of their
companies and it is with this in mind that The Nautical Institute has developed the Command Partnership
Programme and revised this book on Command.
The Nautical Institute has taken the view that ifwe as shipmasters want standards to improve we have to play
our part in achieving this objective. The command book and scheme is our contribution to providing international
industry-wide support to our future captains.
by Captain TJ. Bailey FNI, Chainnan of the Command Book and Scheme Revision Group

WHEN TIIE FIRST EDITION OF THE NAUTICAL INSJ'ITUI'E ON COMMAND was published in 1986 my predecessors had the
difficult task ofdistilling the best advice into a single publication. They did so with admirable skill and the book
has sold in large numbers since that time.
But with the passage oftime there have been significant changes to our industl1', not only in terms oflegislation
and technology but also in the manner in which ships and shipping companies are operated, the background of
the people involved and continuing changes in training and career development. Changes in technology - have
taken us from steam power to 'cyber power' and the Internet. Many more ships are now owned by banks and
finance companies; they are operated by ship management companies and more and more seafarers are employed
on a contract basis - there is no longer the philosophy ofa 'job for life'.
In trying to revise and review this fundamental work, it was necessal1' to reflect on these factors and to consider
the parallel development of The Nautical Institute as an influential professional group.
Evel1'where knowledge horizons are expanding and so it was felt necessal1' to provide a framework in which
to structure the 'bestad!iice 'into a format that would be most helpful to busy people who want to do the right thing
and who want to avoid costly mistakes.
We took the model of the ISM Code as an underlying template. The functions of policy, procedures,
implementation, review, audit and improvement are the elements of management. The master's role then becomes
one of developing clarity of purpose, achieving results with least effort and encouraging positive participation
from the crew.
The content of the book is not exhaustive and nor can it be: so much of the role of master/commander can
only be learnt by experience. To cover evel1' possible experience with written articles would be impossible and
nonproductive - the prospective master/commander must learn for himself.
In this new edition the spread of authors is more international, reflecting the changes in Institute membership,
ownership, registration and manning. The authors have provided an extraordinary richness of response which
emphasises one crucial point behind the whole of this exercise. As masters we hold independent positions but no
single master could have written this book on his own. Although often lonely, our position is not alone and the
focus of our professional Institute can bring together a relevant collection of advice and guidance to build up that
level of knowledge and awareness which provides 'goodjudgement'.
Let us take maritime law as just one subject. How much should the master know and to what level? Whole
libraries have been written on maritime conventions, mandatol1' provisions, guidance notices, contract law, charter
parties, bills oflading, insurance and now there is environmental legislation, health and safety, international law
and the laws of coastal states. We have tried to provide some basic advice for the master.
The section on management has been expanded and the legal chapters have been redesigned to reflect the
changing status of international conventions and the importance of customer satisfaction.
Captain Peter Boyle, my predecessor who put the original book together, asked past Command Diploma
students to discuss the value offollowing a command development programme. Their comments make encouraging
Captain Ian Mathison introduces the ISM Code which is, of course, new but it will soon become mandatol1'
for all ships. For some, there is experience already of its implementation but for many this is not the case. Using
the code to improve company and shipboard performance is such a sensible and positive resp onse to this mandatol1'
New techniques and issues have been introduced where they are topical and The Nautical Institute can be
helpful through the knowledge and experience of its members.
Captain Alan McDowall admirably covers the anchoring of large ships. Environmental issues like waste
management are put into perspective by Captain Derek Yeomans and Mr. David Patraiko addresses ballast water
safely issues. The demise of the radio officer has caused much controversy but GMDSS is covered by former
radio officer Mr. Ian Waugh. Similarly, Captain Murdo McLeod brings the use of shipboard computers for
maintenance much more up -to-date.

A number of chapters from the old book are reproduced because of their classic value and some are redeveloped.
The chapter on navigation in pilotage waters by Captain Francois Baillod encourages good master/pilot relationships
and describes practical safe management in passage planning.
To all the contributors who have helped to provide an answer to that difficult question" What is the best advice
that I ccmgive shipmasters:" - a very sincere and heartfelt "Thank you".
I would also like to express my sincere thanks and admiration to all the staffat The Nautical Institute headquarters
for their unfailing support throughout the project.

The road to promotion
by Captain P. Boyle MRIN FNI

It is twelve years since The Nautical Institute developed its Connnand Diploma scheme. There have been many
changes since then and The Nautical Institute Command Working Group consider that the time has come for a
new edition ofthe study guide and a reappraisal.
What does the intemational shipping industry require of its captains? They must be skilful at doing their job is
the short answer but in order to achieve this a captain hasjust about to be all things to all men. Not only must he
be very good at the quantifiable skills of navigation, stability, cargo care, ship handling, pollution prevention,
safety, commercial awareness, etc. but he must also be very good in more fuzzy areas such as man management,
relationships with owners, charterers, agents and with port and national authorities, stevedores and pilots.

In the previous paragraph I have deliberately stated that captains must be 'very good' at doing their tasks. Any
lesser standard is not good enough for the industry. How can captains become 'very good' at what they do? In
times gone by future captains learned much of their skills by watching and absorbing the style and ability oftheir
superior officers. They usually did this under some form of apprenticeship scheme attached to one shipping
company, slow promotion to senior officer level where the company could ascertain whether the chief officer was
suitable command material and eventually promotion to command of his own ship. Surely one of the most
satisfying events in any seaman's life. There was a mutual acceptance that the company and the new captain
would be good for one another. Even when personnel moved between companies their training was similar and
national characteristics and cultural styles determined the quality of training.
All has now changed. Systems of employment at sea today are very different to what they were twenty years
ago. Standards oftraining are, in many cases, not good enough. It is no use absorbing the style or the ability of an
inadequately trained senior officer. Owners, however, still require captains. It is expected thatthe Seafarers Training
Certification and Watchkeeping requirements as amended in 1995 (STCW'95) will address the problem of
inadequate training and ensure that there is an acceptable minimum standard for all seamen. Minimum standards
are not good enough for captains however.
How can today's shipowner identify the right man to promote to captain? The system is such that he can no
longer watch a potential captain, perhaps over a period of years, before giving him a command. What is more,
many modern shipowners, not having knowledge of ships other than as cost centres, do not know what to look for
in a future captain. The Nautical Institute Command Partnership Scheme will give the holder an edge when
seeking promotion and it will indicate to owners that a person undertaking such a course of study is worthy of
Change is taking place throughout the world at an increasing rate. Aided by IT, the Internet, increasing use of
computers, etc. the totality of knowledge is growing exponentially. Ship's captains can't afford to get left behind.
The master ofa ship is every bit the managing director of his enterprise as his colleague running a factory ashore.
His financial responsibilities are huge and frequently in excess of 100 million dollars of ship and cargo. It requires
an intelligent, numerate and literate person to run such an enterprise. Participating in the Command Partnership
Scheme will enable the person of the right calibre to develop his potential to the full, a potential which may well
carry him to the highest levels of ship operations.
Some twelve years ago, the first person to enrol in the Nautical Institute Command Diploma scheme was
Captain Peter Roberts FNI. After being awarded his diploma he went on to achieve command, became Marine
Superintendent of a shipping company, wrote a very successful book (Ship Safoty and Cargo Management in Por~ a
Nautical Institute publication) and he is now a successful maritime consultant. Captain C.M. Mahidhara FNI says
"the Command Diploma Course..... brought new enthusiasm and zeal to my job..... 1 think it will be useful for
anyone aspiring to command, as it is a very practical guide". Captain Michael Fagan MNI says that he approached
a number ofprospective employers before agreeing to work for his present employer. "In every case the interviewer
seemed to be more interested in the Command Diploma than in anything else..... taking the Diploma made me
think again about all manner of various issues and made me go back to the pen". Captain Fagan goes on to say
that doing the Command Diploma Course has stimulated his intellectual curiosity.
CaptainJames T. Jamieson MNI found that the Diploma Course was mentally stimulating and he obtained the
Luddeke prize for the highest overall score in 1997. He goes on to say "I would urge all senior chief officers and
newly promoted masters to undertake the Diploma for their own benefit as it will make them better officers".


CaptainJohn Dunne MNI obtained his Command Diploma in 1995 and was promoted to command in 1996. He
states "I attribute my achieving command to two main factors - that I had worked at completing the company's
own 'promotion checklisf and that I had completed the Nautical Institute Command Diploma Scheme and was
able to send a copy of the diploma to my employers". Ian C. Biles Master Mariner, BEng (Hons) MA CEng MNI
obtained his Command Diploma in 1990. In 1992 he started up his own very successful consultancy business. Ian
says "the Command Diploma was to start my mind thinking again and to return to the routine of studying. Having
been away from 'academia' for some time since passing my master's certificate I felt I could go further and the
Command Diploma was my first step". Ian has fulfilled his ambition as the letters after his name indicate and he
goes on to say that "Having now developed the study ethic I have continued with what I see as my 'Continual
Professional Development".
Captain Christopher J. Shill MNI obtained his Diploma in 1996. He says "I found the Command Diploma
Scheme an extremely useful aid to furthering my career" ..... :'undertaking the scheme helped my promotion
prospects..... seen by (my company) as positive and has been rewarded". Captain Martin Stott MNI obtained his
Diploma in 1994 and achieved command in 1996. He subsequently changed emp loyers and states "the Diploma
stood me in good stead when applying for (my present) position". He goes on "The scheme was very rewarding in
completing it". Captain Stoll achieved the highest marks in the scheme in 1994. Captain RS. Gilbert (the 1998
Command Diploma prizewinner) goes on to say that "the master was in no doubt as to what my aspirations were.
I also had a break in command employment and being able to pick up the Command Diploma after a period was
an advantage to me".
The foregoing gentlemen, being men of achievement, have suggested a number of areas where this second
edition of The Nautical Institute on Command can be modified and updated. Their suggestions have been
Today's favoured management style is that of the "network" rather than that of the "hierarchy". The manager
in the network is needed for his expert knowledge and not solely for his ability to be a good subordinate. The
good shipowner and manager will understand that and allow the captains in their organisational networks to
contribute their unique expertise to the profitability of the company. Up to date expertise can only be achieved
through continuous learning. The Nautical Institute Command Partnership Scheme and Diploma is a step in the
right direction.

by Captain A.C. Collop MNI
Dear Bill
Congratulations on your well-deserved promotion. On thinking back to my own first command and all its pitfalls, I thought
maybe that you would appreciate a bit of advice. As far as discipline and your comportment as captain are concerned, you
will have made up your own mind about these aspects long ago. The following arejust a few bits of practical advice.

On taking over command, the outgoing captain may not know it is your first trip and will not have written his handover
notes on that basis. Therefore, when talking things over with him, make sure he sticks to the subject. A master being relieved
visibly drops quite a burden from his shoulders and is inclined to be talkative - especially to another master. He will talk
about everything under the sun if you let him and it will often be difficult to keep him to the point.

After reading the handover notes your best bet is to read the incoming and outgoing e-mails, telexes and faxes at least for
the current month. It is by far the best way to find out what has been going on and you often come across items not in the
handover notes. Read them while the relieved master is still aboard and ask questions about things you are not sure about.

Make sure you know where everything is and who keeps what. There is nothing more embarrassing than having a
superintendent or repair s<pad chief asking where such and such a document or plan is and you do not know. The mate and
chief will probably be busy and there is no-one to ask. Most companies will have handover forms, usually requiring you to
sight and sign for these, but not all items are always included. They are normally not important - except on that one vital

For instance, ifyou have to take over on the run, say by helicopter offDubai a day before you go in to load, make sure you
know where the last port clearance is kept. Failure to find it can land you in trouble with the next port authorities.

Port authorities, in some parts of the world, can be very unpleasant for the master. I don't mean surveyors, port state
inspectors and such like - they usually do a reasonable job. It is the Customs, Immigration, Port Health and some Harbour
Authorities who can cause problems. They often seem to have a power far out of proportion to their responsibilities or their
capabilities. Sometimes even the Agent, usually the master's best friend, can be on their side in some ports. Generallyyoojust
have to grit your teeth and bear it.

Before arriving in port, read all the pertinent books carefully. Do not do what I did on my first trip in command. Before
arrival at Rotterdam I had heard that it was a free port. "Oh, good" I said to myself, "no port papers to do". So I didn't do any,
despite the doubts ofthe Chief Steward, who also happened to be new at thejob. We sailed blithely in with absolutely nothing
done. A goodjob we had an excellent agent there. We spent the next few hectic hours running round, getting the officers and
crew to sign manifests, counting the cigarettes and bonded stores, typing crew lists - the lot. The port authorities were very
good to me that time. In fact, they laughed their heads off!

Try to get on with the chief engineer, so there is no 'divide and conquer' syndrome on board. If you find yourself with a
bad cook, get rid of him as soon as you can. Ifyou have a good one, then spoil him. He'll help to make a happy, contented
ship. We British tend to treat the catering staff with contempt. Try not to and you will have a happier ship.

You will have to look after some thousands of dollars and other currencies. Make certain you keep a note of every penny
going in or out ofthe safe. I usually keep an 'In and Out' account on the computer and back it up with a ledger type book. If
you don't do this or let it slide you can have problems at the end ofthe month or upon being relieved yourself. Also, do not
let the outgoing captain short change you when he hands over the cash to you. Every last cent must be accounted for - or you
could find yourself out ofpocket. I have seen some relieved masters miss their flights home due to money they cannot trace.

Pilots can be a pain in the neck at times. There is usually no problem with them when entering port or manoeuvring. It's
the tying up when the problems usually start. They think you have a large crew and you can see your three men on the foc's'le
head, desperately trying to put out springs and headlines and let go the tug at the same time. If you get a pilot who gives loads
of unnecessary orders when tying up, then I found it best to relay them all over the walkie-talkie - but omit sometimes to
press the 'send' button. As you know, I was an offshore pilot myselfat one stage of my career. Due to this I don't agree at all
that pilots should interfere with the ropes and wires. I seldom did.

Finally, when you leave your first pur! as master, remember you have no 'I.' plates on <isplay. None ofthe other ships
around you know it is yoor debut. Always ask the pilot to point out the next buoys or marks before leaving. Things are easier
now, when you can mark them on your radar displays.

Anyway, Bill, all the very best ofluck and love toJenny and the girls.


Chapter 1


A CouncH report prepared by The Nautical Institute Command Working Group

Nature of command Management decisions relating to the best use of

COMMAND is EXERCISED through the organisation on resources require a different supporting structure
board a ship, which has been developed over a long which must enable those concerned to acquire all
time to minimise the risk of danger to the ship when relevant information and provide the opportunity for
at sea. everybody involved with the use of resources to
The characteristic of a command structure is that understand their role in optimising results or
it is quick to respond; so enabling decisions to be taken minimising costs. Similarly, when running a meeting
to avoid accidents. where conflicting demands on down time or
resources are involved between departments, the
The master or commanding officer is ultimately captain is best placed to adopt the role of chairman
responsible for ensuring that the command to weigh up the arguments and assign priorities.
organisation is effective. He has to satisfy himself that
the vessel can be run safely by day and night in all The level of involvement of the shipmaster in the
prevailing weather conditions and port situations. He management of the ship depends upon company
delegates authority to his subordinates to operate the policy. Where all decisions are devolved to the ship,
ship under his command. with management in support, the master becomes
accountable for vessel performance, retaining
A ship is also a commercial or fighting unit and maximum revenue, keeping stores, maintenance and
has to be managed accordingly. This involves labour costs within budget, and minimising losses.
communications between departments on board and
with the supporting organisation ashore. In addition Alternatively, some companies maintain a
to his other duties, the captain therefore has an centralised contro I system so that the master is
important coordinating role. As titular head ofthe ship primarily concerned with navigational safety, ship
the captain must be a leader and a counsellor. handling andcrewwelfare.

By law the shipmaster has to have a certificate of In between there are a variety of different
competency and has the authority to take decisions approaches which depend upon the type of ship
in the best interests of the ship, her cargo and all being operated and the management style of the
who sail in her. Where the safety of the ship is company. Whichever system is used it is the captain
concerned he has the duty not to take his ship to sea who must retain the coordinating role.
if, in his opinion, the vessel is unseaworthy. Where the Navy is concerned, the manning levels
are such and the tactical demands so immediate that
Advantages and limitations of the there is an establishedro le for the commanding officer
cOOlmand structure who is backed up by a specially trained ship's
The supporting organisation on board, of which company. The complexity of modern warfare also
the captain is the head, derives its structure from the dictates that a very responsive and dynamic approach
need for routines and a system of communication is adopted towards the interpretation and use oftactical
which feeds information to him quickly and dataandweapon systems. The conceptofappointing
accurately. It follows that the captain, with his a principal warfare officer to a ship relates more to
experience and overall appreciation, is the best the principles of management than to a traditional
person to assess a situation and take the appropriate system of passing orders down the line.
decisions, especially in an emergency.
Command decisions need systematic
Delegation evaluation
Delegation is necessary to maintain continuous When considering the basis upon which
operation of the ship. It is not an exact process and command decisions are made, the, Council of The
depends upon the relationship between people and Nautical Institute recommend that a careful analysis
the tasks to be undertaken. Successful delegation is undertaken of all those factors which can influence
requires that a ship be operated on consistent policy the way decisions are taken on board.
lines so that particular phases of operation may be
delegated without having to pass more instructions This is necessary whenever an incident is being
than the junior can assimilate at the time. investigated and a proper system of enquiry must be

introduced. To this end The Nautical Institute has
produced a check list which should be used by all Members of The Nautical Institute
parties involved as a way of establishing the underlying Command Worldug Group
causes of the accident and the remedies to be Captain TJ. Bailey FNI, HSS master.
implemented. The checklist is included at the end of Capt.... P. Boylo FNI, various/bulkers, Vice-President.
this chapter. Captiin K. Apploby FNI, various/offshore supply and
anchor-handling tugs.
Promotion from chief officer to captain is Captain G.P. Blyth MNI, worldwide tramping.
significant. Clearly, the human qualities (professional Commodore C.A.F. Buchanan MNI RN, submarine
competence, ability to plan and carry through a and surface ships.
programme of work, flexibility, stamina, integrity, the Captain R. CahilI FNI, various/containers.
ability to make decisions, leadership and that sixth Captain W. Crosbie ExC MNI, various/tankers.
sense or shipboard awareness), which make for a Captain G.A. Fades MNI RN, various surface
good captain, cannot be tested by examination alone warships.
and the process of selection is crucial. Captain WJI. Eggert MNI, various/spent nuclear fuel
Notwithstanding, there are fewer traditional Captain C.P. Marge.on FNI, various/reefers and
companies with a full programme of career container ro-ro.
development from cadet to master and, increasingly, Captain J.M. MWT"Y FNI, various/gas carriers!
the modern officer is having to go out and sell his bulkships.
Captan P. Nlnd MNI, variouslbulkers.
services in a variety of companies overseas. It is C",tain F.W. Quick FNI, hovercraftlhydrofoils ferries.
unlikely that such an officer will have received any Captain R.M. Thorn FNI, various Royal Fleet
formal training after completing studies for his Auxiliaries.
master's certificate of competency. Mr D. William. FNI, formerly shiphusband and owner.
Mr CJ. Parker FNI, Secretary.
The Council of The Nautical Institute therefore
believe it is desirable to have a voluntary scheme for
be delegated; equally important then is the industrial
those who want to follow a programme of study to
or military context in which the ship is operated.
prepare themselves for command.
In one sense the commanding officer is the head
The Nautical Institute therefore believe it is
of a command tree, in another sense he is part ofit.
desirable to have a voluntary scheme for those who
Certain decisions he can make concerning the use
want to follow a programme of study to prep are
themselves for command. To this end the Institute has ofpeople and resources; buthe seldom decides which
cargo will be carried, which weapon systems fitted,
prepared this self-development programme leading
who will be appointed, promoted or trained. In this
to a Command Diploma. Further details appear in
sense the organisation has to assume some
chapter 58.
responsibility for command, yet this may not be fully
Need for properly defined terms recognised in law.
The concept of command is given two principal Problems arise therefore when the same words are
meanings in general English usage. In one sense it given different meanings in the varied contexts in
implies the subject or area under command: in an which they are used. Ifsteps are to be taken to improve
active way it means to order or demand with authority. the effectiveness of command then it is essential that
Command is expressed atthree levels: in terms of definitions are provided which differentiate between
society as a whole; in the context of an organisation the different aspects of command and the way it is
and specifically on board. exercised.

Authority is a more ambiguous word since at one Definitions

level it implies a legal power or right, but on the other Accountability: The process by which control is exercised
hand it has an equally positive meaning as the over decisions and actions which is
implicit in the concept of responsibility.
influence exercised by virtue of character, office,
mental or moral qualities. Authority: The power and the right to require
obedience to instructions.
A commanding officer is given one kind of
authority by status but because he works within an Authority, The authority given to an individual by
organisation he needs a management authority to legal: society to fulfil specific obligations within
control resources to achieve objectives and personal the law.
qualities of competence and ability to obtain support. Authority, The authority given to an individual by
organisational: military oc commercial organisations to
Delegation is entrusting authority to a deputy, but discharge the function oI command in
the problem with this general idea is that there are pursuit of military or commercial
certain obligations implicit in command which cannot oij ectives.


Authority, The authority exercised by virtue of Liability, The civillialXlity attaching to an employer
personal: character, experience and officer-like vicarious: for the negligence of his employees.
Management: The process of involving people and
Authority, The authority given to an individual utilising other resources to achieve a
shipboard: derived from legal and organisational given obj ective.
authority to meet the obligations of the
commission or voyage. Responsibility: The duty to meet obligations.

Chain of The means by which orders are passed Responsibility, The duty placed upon those concerned
command: down devolving authority. legal: with the control of seagoing craft to
ensure that the ship is operated within
Charge of the Authority delegated to an officer for the the law.
ship: safe conduct of a vessel in accordance
with standing orders and captain's Responsibility, The obligation placed upon those in
instructions. organisational: organisations owning the ship to ensure
that it is provided with competent
Command, naval: The authority vested in an individual to personnel, material and is in a fit state to
direct, coordinate and control naval fulfil the requirements of the commission
forces. or voyage.
Command, ship: The authority to direct and control a ship. Responsibility, The moral/ethical and professional way
personal: through which command is exercised
Commanding Captain of a naval ship commissioned
officer: by the appropriate national defence Responsibility, The responsibility which attaches to the
authority who has ultimate responsibility ultimate: captain ofa ship for its overall safety and
for the safe conduct and fighting efficiency.
efficiency of the ship and the wellbeing
of the ship's company. In the event of Ship m an ager: An individual or company contrncted by
death or incapacity command normally the ship owner to carry out the
descends to the Executive Officer and operational management ofthe ship. Full
then by seniority through those entitled management will comprise crewing,
to exercise ship command. technical management, insurance, freight
management, accounting, chartering,
Delegation: Entrusting authority to a competent provisions, bunkering and operations. A
person and holding that person ship management contrnct may include
accountable to the level set. all or some of the above provisions and
is usually negotiated in relation to a 12
Designated A suitably qualified and experienced shore monthly budget. Sometimes additional
person: based employee required under the ISM payment may be requested for training
Code for monitoring the safety and
pollution prevention aspects of the
operation of each ship with the Ship m aster: The captain ofa merchant ship qualified
responsibility to ensure that adequate by the appropriate certificate of
resources and shore-based support are competency who is appointed by the ship
applied when needed. The designated owner. He has the responsibility to
person should have both independence efficiently prosecute the voyage and an
and authority to report deficiencies to the overriding responsibility to ensure the
highest level of management and is safety of his passengers, crew, ship and
responsible for ensuring that non-
cargo with the duty generally to save and
conformities derived as a result of the
preserve life at sea. In the event of his
safety management system are rectified. death or incapacity command descends
Discipline: The requirement for personnel to comply to the second in command who is the
with regulations and respond to authority. senior deck officer and then tbrough the
other deck officers in order of rank.
Liability, The obligations to pay compensation for
civil: damage caused through negligence. Ship owner: The person or persons whose names
appear in the ship's register. They may
Liability, The liability to suffer a fine or penalty for be the managing owner, ship's husband
criminal: breach of a Regulation. or other person entrusted with
management. The owner seeks to use his
Liability, The criminal liability arising when spec- ship(s) for profitable enterprise but in so
strict: ified regulations are unwittingly doing has to comply with national and
breached. It is often called 'absolute international legislation. The shipowner
liability' though the regulation imposing has to ensure that the ship's safety
it usually provides defences which can certificates are in order, thatthe ship is
be pleaded on proof of certain seaworthy, properly manned and in a fit
circumstances. condition to meet the requirements ofthe
intended voyage.

Status of the 'The IMO Assembly invites 3. Organisational responsibility ashore
shipmaster in Governments to take necessary steps to (a) Was the captain adequately prepared by training and
international law: safeguard the international shipmaster experience to meet the contingency?
Resolution A443 in the proper di scharge of his (b) Did the captain have all the relevant information
(XI) International responsibilities in regard to maritime and equipment on board and know how to use it?
Maritime safety and the protection of the marine (e) Was the ship adequately provided with trained
Organisation environment by ensuring that: personnel to carry out efficiently and safely the
15 Nov 1979 (a) The shipmaster is not constrained routine duties?
by the shipowner, charterer or any (cl) Was the ship adequately provided with trained
other person from taking in this personnel and material to meet the contingency?
respect any deci~on which, in the (e) What action was taken to support the captain at
professional judgement of the the scene of the accident?
shipmaster, is necessary; (f) What systems of accountability were in operation
(b) The shipmaster is protected by for the safe operation of the ship. her commercial
appropriate provisions, including performance and crew incentives?
the right of appeal, contained in,
4. Personal respon~bility
inter alia, national legislation,
(a) 'Who was in charge at the time of the incident?
collective agreements or contracts
(b) What steps were taken to avoid the incident?
of employment, from unjustifiable
(e) Were the actions taken consistent with company
dismissal or other unjustifiable
instructions and the operating philosophy on board?
action by the shipowner, charterer
(d) Were the actions taken consistentwith good seaman-
or any other person as a
like practice?
consequence of the proper exercise
of his professional judgement General
What corrective measures were taken?

Note: These facts may also be used to determine legal

The Council of The Nautical Institute concludes liabilities but must first be subjected to legal tests of
that the principles and practice of exercising effective reasonableness and remoteness.
command at sea is an essential part of the expertise of
the nautical profession.


Annex - In the event of an incident
Any person investigating a marine incident should
establish the basis upon which command decisions
were taken.

1. The incident
(a) Record what happened and all relevant times with
supporting documentation.
(b) Record all relevant communications.
(e) Establish what steps were taken after the event to
minimise the risk of danger to those on board the
ship, the cargo, life, property and the marine
j / 1 ><

environment. I l-de=l~ I
2. Ultimate responsibility on board
(a) 'What was the organisational structure on board and
what normal or special operating precautions were
established to minimise the risk of the incident
(b) Had authority been delegated properly? '----
(e) Did subordinates fully understand their obligations
and duties?
(d) Were there available enough competent personnel
to carry out routine duties?
(e) Were there available enough competent personnel
to meet the contingency? Figure 1. 1 In the event of an incident
(f) Ifnot, what compensating measures were adopted?


Chapter 2


by Captain P. Chawla FNI MICS

General Manager, Quauty Assurance and Training, Anglo Easlern Ship Management Limited

Captain Chawla stnrtedhis seagoing career in 1974 and was appointed mcmter in 1986. In 1992 he was brought ashore to set up the
quality management system thrcughout the Anglo Ea~ern Group. Captain Chawla has represented the Hong Kong Ship Owners
Association and The Inte rnational Ship Managers Association at the Wo.

Introduction a port state control inspector, the terminal

TIlE STRUCTURE OF SHIP OWNING companies has been representative, a charterer's representative and the
changing continuously over the last couple of decades. company's engineering superintendent.
A 'ship owner' today might be a large corporation. a The voyage orders have been changed and you
company ownedby doctors or lawyers, atradinghouse are to go to an additional port. The original bills of
or a bank. etc. The traditional ship owning office has lading are not available, and the charterer's
therefore given way to a number of different styles of representative would like you to accept a letter of
management of ships. The expectations from a ship's indemnity and discharge the cargo.
master may therefore be quite different in different
companies. What actions do you have to take?
In order to put forward to you a wide range of You sort out the situation with the charterers,
views of what ship owners expect from their ship vetting inspectors, port state inspector and the
masters, a survey was carried out amongst senior superintendent and are about to get some rest when
executives ofvarious ship owners and ship managers. the second officer comes up to you. He has just spoken
The views of a few serving ship masters were also to his family and has been informed that his home
taken, to see whether there was any difference in the was damaged by a typhoon. He would like to be
perceptions ofthe ship owners and presently serving relieved immediately, as he is extremely worried about
senior ship masters. I am pleased to say that the good the welfare of his family.
qualities listed by the shipowners as well as the serving Handling all these situations require differenttypes
ship masters were very similar.
of skills and qualities. Handling emergencies,
This chapter is essentially a collection of the understanding the commercial business ofthe ship and
common requirements which were put forward by motivating the ship crew are just a few of the abilities
various people, mingled with my personal views. I expected from a ship master.
take this opportunity to thank all those who were kind Since the time man learnt the art ofbuilding a ship,
enough to assist in the writing of this chapter and hope the person in charge - the master - has been fully
that the students of the Nautical Institute Command responsible for the safety of people, sbip and cargo
course and newly promoted masters find it useful in on board his ship and will continue to be so as long as
their daily lives on bo ard. people are required to operate ships. Hence some of
Let us consider a few situations you may find the qualities expected by a ship owner from a master
yourself in as a ship's master. You are sailing on afully have not changed over the centuries. What is written
loaded VLCC, in the North Sea, through terrible in this paper will therefore, in some part, be arepetition
weather. It is 0400 hours, and you are called up to the of traditional advice available in many books.
bridge by the chiefofficer. You rush to thewheelhouse At the same time, seafaring has changed
and are told "the second engineer just called saying significantly in the last couple of decades. Crew sizes
they have a problem with the fuel oil system and it have reduced from 30 to 40, to the present day norm
may take some time to repair". You quickly look at of 12 to 22 people on most ships.
the chart and realize you have just 2 hours before the
ship drifts into shallow waters! Global Positioning Systems (GPS), GMDSS,
electronic navigation charts combined with the
What will be your actions? International Safety Management (ISM) Code and
You are lucky. The engineers are able to run the STCW 95 require learning ofnew skills andnewways
engines and you arrive in port safely, after being awake of management on board.
on the bridge for twenty hours.
The shipping industry is presently going through
The immigration, customs, port health, agent and a phase of serious introspection and change. The ISM
ship chandler are followed by two vetting inspectors, Code, STCW 95, Port State Control, Risk Assessment,

Quality Assunmce ISO 9002, e-mail and a number of anybody, in the proper discharge ofbis respcllSibilities
other developments are challenging traditional in regard to maritime safety and the protection of the
methods of worn: and management of ships. These marine environment.
changes will affect every crew member on board, but
2. Thorough knowledge
as master you will be affected the most.
If the company has decided to give you command,
Change is always difficult in any industry. As a you have obviously been considered competent! The
master in today's world, you need to manage this reason for making this point is that a master's
change. Traditional values, which have served us well responsibility includes certain new areas, for which
over the centuries, will need to be retained. New ideas nobody else on board may have adequate knowledge,
will have to be tried out with an open mind and for example, seaworthiness (legal and commercial
nurtured with care so that the next generation of implications). A good knowledge in such subjects is
seafarers is trained to cope with the new demands of therefore essential. Maintaining a good reference
the industry. library on board is helpful to refresh your knowledge.
Managing this change is a responsible task and will In this changing world ofnew regulations, it is also
require y our devoted attention as a ship's master. The important that you stay abreast of the changes in
list of desirable qualities and advice collected together regulations. The ISM Code also implies that the
here will, we hope, assist you to appreciate the industry codes and guidelines must be adhered to as
traditional values and at the same time manage this applicable. A modem day master thus needs to read
change. We hope they help you meet the various a lot and it is essential that the process of continuous
demands made on you while in command as a ship's leaming is maintained even after attaining command
master. of the vessel. Try to read as much as you can, about
the developments in the industry. The Nautical
No individual is likely to possess all these qualities Institute magazine .sEAWAYS is a good one to start
in a perfect balance, and different circumstances will with! As a master, you need to know your ship
require the use of different methods, so do not dissect thoroughly. You are expected to know the full details
your personality to shreds over it! Knowing your ofwhatever is happening on board y our vessel. A first
personal strengths and weaknesses is the first step in hand knowledge is especially important when you are
good management. reporting a problem of any kind to the ship owner or
Before I list the qualities desired by shipowners, it manager.
is probably worth mentioning something that no 3. Personnel management skills f
master must ever forget. Ship owning is a commercial communication skills f leadership
venture with the aim of earning profits for the ship The efficient running ofa ship, similar to an office
owner or the shareholders of the ship. As a master or any business unit, is dependent on the contribution
you are the owner's representative and therefore every of each individual on board. A master is the leader of
decision that you take must be in the interest ofthe this team. He is expected to be capable of motivating
owners. At the same time, you are also the crew's his team.
representative with the owners. This leads us to the
first and the most important responsibility and desired What do 'leadership' and 'motivation' mean? Every
quality of a master. seafarer knows that the work people do, is sometimes
done superbly and at other times it is done atrociously.
1. Safety of people, sWp, cargo and environment The main reason for that difference is motivation or
Under all legal systems, for centuries past, the the lack of it. It is the difference between doing as
master is fully responsible for the safety of the people little as one can get away with and doing everything
on board, the ship, the cargo and the environment. one possibly can. Motivation is the art of helping
By giving you command the ship owner entrusts you people to focus their minds and energies on doing
with his multi million-dollar asset - his ship. The cargo their worn: as effectively as possible. It is the art of
owners entrust you with their cargo, which may be creating conditions that allow everyone to give out
worth millions of dollars, and above all the crew their best.
entrusts you with their lives. Society expects you to
take care of the environment. The ship owner and Innumerable books and theories have been written
others expect you to carry out your duties with the on motivation. In the 'real world', even ifyou were to
highest sense ofresponsibility at all times. read all the theories, the facts do not always allow the
direct application of the theories. There is no
Recognizing the importance of your motivational technique which works with everyone.
responsibilities the law gives you complete and In fact it is unlikely that the same technique will work
'overriding authority' in all matters of safety of the with the same individual all the time.
crew, ship, cargo and environment. In resolution
A.443(Xl),IMO urged governments to take steps to So what does work? How does a master motivate
safeguard the ship master from being pressurised by his crew? How does a master lead his team? I mention


below some ofthe beliefs that have served me well in 4 Commercial skills
my experience of sailing with seafarers of eighteen Different trades and different owners have very
different nationalities in a variety of companies. different expectations from masters in terms of their
commercial duties. On a container liner service public
All human beings, irrespective of colour, religion, relations with agents and appreciation of keeping to
nationality or cultural diversity like to be treated with schedules may be the most important commercial
respect, compassion and impartiality. Irrespective of expectation. On a bulk carrier, loading the last possible
any cultural differences, if you treat people as you tonne of cargo, or 1lllderstanding the importance of
would like to be treated, you will not go wrong. You hold cleanliness surveys may be more important than
should be able to understand the other persons arriving at the pilot station on schedule.
viewpoint. You must treat others with respect, even if
you disagree with their views. People like to be An owner expects the master to make decisions
recognized for their efforts in public, but prefer to be keeping in mind the effect ofthe decision on the profits
reprimanded only in private. People like to participate and reputation of the shipowner. A master must
in decisions affecting them and appreciate their views therefore try to learn the requirements of the trade
being listened to attentively. People like to be given and the owner's special requirements in detail. A
responsibility and left alone to carry out the task in master is expected to have a thorough knowledge of
their own way. commercial matters. The syllabus covered for
certificate of competency examinations is typically of
Most people try to do a good job. If they are not an academic nature only. You need to supplement it
performing to your satisfaction, other factors like their by extensive reading in order to gain sufficient
training level, working environment and relationships
practical knowledge.
with their immediate supervisor may need to be
investigated. To get the best out of people, you need The legal interpretations of seaworthiness, safe
to convince them why the job needs to be done well. port, arrived ship, deviation, delivery, notice of
readiness, speed and consumption clauses in charter
Motivating people requires strong communication parties, are some of the topics on which you may need
skills. To be able to communicate well with people to supplement your knowledge. Legal responsibilities
you need to relate well with people. Without going assumed by the master's signature must be clearly
into any theories on interpersonal relationships, it is understood. Never sign a paper without reading it
sufficient to remember that an important part of carefully and understanding the liabilities that you or
communicating is LIS1ENING. If you are having the owner may be subjected to, by signing it.
problems in motivating people, talk to them and you
will find thatby solving their problems, your problem The master must take a keen interest in reading
of motivating them gets solved by itself. You should the governing charter-parties, understanding the
be easily approachable at all times. possible problems with bills of lading, and
understanding the master's legal obligations under
In today's work environment, the traditional tasks voyage and time charters. A good knowledge of P&l
of navigation and cargo work have been made easier Club rules and marine insurance clauses, are some of
by technology. Keeping a lookout with the help of a the thingsthatwouldhelp in becoming a commercially
radar is far easier than sitting in a crow's nest, in astute master.
freezing weather. Loading a tanker from a remote
control ro om is certainly easier than opening valves There are a number of good books available on
with a long spanner. But the task of motivating the commercial knowledge for ship masters, including
staff on board has not changed. some published by The Nautical Institute. The Institute
can help in directing you to the right ones.
The autocratic ways of the past are no longer
acceptable in shipping, or in society. Hence as a 5. Handling of emergencies
master, it will be necessary that you learn as much as Every ship owner expects a master to be able to
you can on how modern day participative handle all shipboard emergencies with a good
management can be carried out on board. Having said presence of mind and with rational, logical thinking.
that, there should be no hesitation on the part of a The ability of the master to handle emergencies
master in being assertive and taking full control and effectively is one of the most important qualities
responsibility, whenever required, especially during required and perhaps the most difficult to predict.
How does one learn to handle this responsibility?
Safety meetings, quality circles, senior officers The traditional advice is training, training and more
meeting, etc. whether done formally or informally over training. In the past, one obtained the necessary skills
coffee time, are all designed to encourage participative by observation of seniors and through personal
management in day to day operation of the ship. experience. Traditional ship owning companies were
Remember, you are only as good as your tearn. Lead able to retain the same seafarers for many years.
by setting agood example in all the qualities that you Promotions to senior ranks were slow and training was
want your team to have. given a high priority.

Every senior master will agree that there is no 8. Honesty
substitute for hands-on, on the job training. A chief A ship owner entrusts the master with his multi
officer doing ship handling, or leaming to direct an million-dollar asset. It is therefore a position of great
emergency drill under the watchful eye ofa master is responsibility. Even the slightest suspicion or doubt
perhaps the best way to train for 'Command', But about the honesty or integrity of the master is likely
today, with fast turnaround in ports and reduced to result in adverse consequences!
manning levels, senior officers seem unable to devote
adequate time for training theirjuniors. The traditional 9. Public relations
methods oftraining therefore need to be supplemented A ship owner expects the master to present a good
with modern aids like simulators. image of his company to all the people with whom he
deals e.g. port state inspectors, charterers, shippers,
Simulators provide the opportunity of practising surveyors, port authorities, etc. Tact, diplomacy and a
response to all kinds of emergencies, which cannot be pleasant manner go a long way in presenting a good
replicated in on-the-j ob training. Courses like bridge image of the vessel and its owner.
resource management, bridge team management, etc.,
In some ports, the number of visitors may well be
may not get the adrenaline flowing fully, but they do
help an aspiring master to gain some skills, which can overwhelming and consequently trying on the master's
prove useful in emergencies. patience. Yet it is in the master's own interest that all
shore authorities are treated with courtesy and respect.
An important aspect of handling emergencies Mistreated shore personnel can create problems, when
expected by shipowners from their masters is good least expected! At the same time, there may be
ship-shore communications. A master must ensure that situations that require a master to be assertive, in order
in any emergency the ship ownerfmanagers are to protect the owner's interests. For example, getting
continuously updated on the evolving situation. In any stevedores to sign damage reports, or firmly telling
emergency a number of stakeholders e.g., owners, the pilot that you do not consider it prudent to proceed
charterers, shippers, consignees, underwriters, P &1 at "full sea speed" in two mile visibility in heavy traffic!
Club, etc., need such information as fast as possible.
A master is expected to be appropriately dressed
While the first priority must always be to handle and presentable at all times. This may require
the emergency situation itself, the master must try to alternating between full uniform to attend to the
send in reports on the progress of handling the owner's customers and dirty overalls to accompany
emergency in the best way he can. the surveyor!

6 Analytical thinking 10. Administrative skillsfreports writing

Today, thanks to satellite communications amaster Managing a ship is like operating a small village.
can contact the office at any time. The shipowner's The large number of tasks, with a limited number of
office may be able to give decisions in an emergency, people, requires a lot of administrative skills. A
and may even like to do so, but it must be understood methodical approach is essential. Not many seafarers
that their decisions are based on the information given like doing mundane jobs, such as filing and record
by the master. The shipowner therefore relies heavily keeping. For centuries seafarers have been proud of
on the master for a correct analysis of the situation on their hands· on approach to problems and have
board. A good analytical mind is essential. A master considered 'pap erwork' to be ajob beneath the level
must investigate the situation carefully, objectively, of'practical people'. Unfortunately, over the years the
and in depth, in order to provide the office with the laws in every country have increasingly relied on
best possible information. 'paper' evidence. Courts and lawyers cannot do
without it.
You must therefore, try to develop the ability to
stand back, and review a situation and consider the Efficient record keeping is therefore an essential
pros and cons of every action and its short term as part of a master's responsibilities and must be carried
well as long term effects. out The importance of keeping factual and precise
logs must be fully understood. The ISM Code, in fact,
7. Self-motivation has made the task of proper record keeping of all
The ISM Code recognizes that a safety management aspects of shipboard operations a regulatory
system can only succeed with 'commitment from the obligation.
top'. This includes the shore management as well, but in
case ofa ship, in most situations, it is the commitment of It is expected that a master can write reports in
the master, which determines the success of the safety a clear, factual and concise manner. Writing accurate
management system on board. reports is especially important in case of emergencies!
accidents which may lead to claims or legal cases. A
It is expected by the ship owner that the master poorly written 'statement of facts' may cost your
does not need to be renrinded to carry out his duties. owners millions of dollars ! The Nautical Institute book
It is expected that the master will be self-motivated, The Mariners Role in Collecting Evidence is an excellent
enthusiastic and committed about his job. guide to assist you.


11. Information technology In practical terms, when delegating, you need to
2000 is the decade of information technology (IT). explain:
Personal computers, e-mail, digital cameras, etc. are
WHY - Why thejob needs to be done?
changing working practices in every office in the
WHAT - What needs to be done?
world. It is affecting work practices on board the ships
WHO - Wlio must d'o thejob?
too. It is very likely that within the next three to five
WHEN - When does the jcib have to be done?
years a number of work practices will change
significantly due to rapidly declining ship-shore HOW - How should the job be done?
communication costs. It is quite possible that in case 13. Maintenance
ofabreakdown, you may be seeking advice ofa shore Most companies expect extensive maintenance
based specialist by showing him the broken equipment work to be carried out by the ship's crew because of
via video-conferencing over satellite! the increasing pressure on repair costs.
A modern day master is therefore expected to A master is expected to be able to organise, plan
possess or acquire some computer skills to be able to ;and monitor such maintenancejobs. This may often
handle the increasing expectations ofshore personnel involve organising a large number of "riding crew".
to exchange / receive information. Manning levels are Equipment and material required for the repairs or
unlikely to increase and paperwork is unlikely to maintenance will need to be planned carefufly.
reduce. Computers can help in a small way to manage
,documentation better. You are also expected to be familiar with the
various technical guidelines issued by dassification
12. Delegation societies and other bodies on methods of repair and
A master is expected to be in control of all that is maintenance.
happening on hislher ship. It is not humanly possible
for the master to do everything by himself. Learning Conclusion
to delegate may be difficult in the first few days/months The qualities desired by a ship owner can be
·of getting command, but it is essential that a master remembered very easily. The word 'ship master'
learns to delegate. In the beginning when you try to ·covers them all!
-delegate work, some ofthese thoughts may cross your
;S Safety of crew, ship and cargo
ifyou want a job done properly, do it yourself
H - Honest/hard-working
I - Ingenious and adequate knowledge ofIT
True - but ifyou try to do every job yourself, you P - Personnel management
will not have the time to do your ownjob. What ifhe M - Money/commercial and maintenance skills
makes a mistake? But don't we all make mistakes A - Analytical thinker
.sometimes. Mistakes can be corrected. But I'll lose ;S -SeJfmotivated
.control. You will actually increaseyour contro\.Junior T - Thorough knowledge/training
·officers will be more motivated on being given the E - Emergency handling skills
responsibility, and you will have more time to get other R - Relations with shore personnel
jobs done. The important point to remember when
Getting your first command is a great occasion.
-delegating is that the person to whom thejob is being
Prepare yourself well for it with the 'Command
given must understand it clearly and must be capable
·of doing it. The keywords to remember when Scheme' and then take up thejob with confidence and
delegating are well expressed in these verses of maturity. Keep your common sense sharp at all times
.and you will make a success ofit.
Rudyard Kipling:
Getting 'command' is the first step. Building up a
"I kept six honest serving men.
reputation 'as a good master' with the ship owner and
They taught me all I knew.
gaining the respect of your crew are the goals that
Their names were What and When and Where,
you must aim for. Thejob ofa ship master may have
Why and How and Who."
its drawbacks, but it is still one of the finestjobs in the

MASTER Charterer-
more speed, more cargo

Chief Engineer-
bad fuel F***

Port Authority -
Ballast water contamination

Fig/", 2. 1 All .. a days work'


Chapter 3


by Captain P. Roberts BSc FNI

Captain Robertsserved his apprenticeship WJth Elder Dempster Lines, remaining at sea WJth the Ocean Groupforthenexttwenty-five
years until they withdrewfrom ship owning. He commanded Panamax Bulk Carriers with the International United ShippingAgency
afHong Kong, and was appotntedMarine Superintendent ofCatheart Shipping Ltd. in London. He now works as a consultant with
London and Offshore Consultants Ltd.
He is the author a/The Nautical Institute puhlicatton ItWatchkeeping Safety and Cargo Management in Port", is afounder
Member and Fellow afThe Nautical Institute andpresently serves on its COW'lcil, Education and Training Committee and the Bulk
Camer Working Group.
AU views ""Pressed in this chapter are entirely personal and do not reflect those ojhlspresent orprevious employers.

first casualties was the training budget. This has
Competency qualify its holder to command a ship?
resulted in a manpower shortage both in tenns of
To the examining authority, the answer appears to be
quantity and quality. Although there is still areluctance
yes. To most informed observers in the marine on the part ofmany ship operators to invest in training,
industry, the answer must be no, or at best partially.
there are signs that resources are once again being
The statutory certificate, or licence, made available. Without investment in all stages of
demonstrates that the holder has a proven level of training, covering initial (pre-sea), intennediate (pre-
knowledge of the theory of the operation of a ship, certification) and ongoing (updating), there will
mainly from a safety and legal point ofview. Important continue to be insufficient properly qualified personnel
though these aspects may be, in order to effectively available to efficiently operate the world fleet.
and efficiently command a ship a lot more skills are
In the past, those aspiring to command acquired
the necessary skills from the traditional training
Prominent amongst the skills which are usually schemes of established ship owners. Whilst the fine
omitted from most courses for statutory certificates details of such systems changed over the years, the
are: end product was of a unifonnly accepted standard.
Commercial awareness. As one rose through the ranks. often slowly, there was
General management abilities. time for everyone to be exposed to a wide variety of
Personnel management and interpersonal skills. events, and undertake a vast range of activities. which
Practical ship handling. provided the experience necessary to make reasoned,
informed decisions. Many of the newly emerging
So just how does the aspiring master acquire the nations followed a system adopted by one of the
training necessary for successful command. Some of traditional maritime powers.
the required knowledge can be obtained by reading
and studying the published works of experienced Today there is a whole range of different training
practitioners. Other skills can best be acquired by schemes in place, with widely varying standards. With
attending training courses, particularly those involving increased mobility oflabour, and the intemationalising
simulators. However, there will always remain those of shipboard staff, it is difficult to know what skills are
most desirable attributes which can only be assimilated possessed by today's seafarers. Despite the recent
by that great teaching method known as experience. I changes to the STCW convention, it will be a long
believe this covers bothj ob experience and experience time before the candidate for command can rely on
oflife. Command is still one of the few remaining true an industry system to provide him with the education
crafts, in the traditional sense. No amount of fonnal and training necessary for him to acquire all of the
qualifications can replace the breadth of knowledge requisite skills.
that comes from doing thejob for an extended period, So, except for the few lucky seafarers employed
preferably under the guidance ofa variety of different by first class operators, most have to rely on their own
experienced and professional teachers - the true resources for their maritime training and education.
original craft master and his apprentice.
In many ways command is an occupation which relies
Background on personal initiative, the captain is frequently on his
The industry has endured an extended period of low own in a hostile environment - be that physical or
returns on capital employed. When economies were commercial. Hence perhaps it is afitting introduction
sought in order to improve profitability, one of the to this career that he has to organise his own training.

One must not think that the master's job is so moving ahead or astern, and the effects of draft
different than many other occupations in other and trim.
industries. Essentially, the master is the general S. Anchor in an open roadstead.
manager of that small commercial unit of operation 9. Anchor in a specific location in a confined
known as a ship. His only difference from others anchorage.
holding that title is that he is often acting completely 10. Manoeuvres in confined waters, sea lanes, narrow
alone, as he is usually physically separated from all channels, etc.
other management assistance and backup. 11. The use of engines, thrusters, and tugs.
12 Manoeuvre to pick up a pilot in open waters.
The formal training for command as provided by 13. Manoeuvre to pick up a pilot in confined waters,
the STew certificate structure is well documented channels, rivers, etc.
elsewhere, and the reader aspiring to command can 14 Unberthing and proceeding to sea; plan passage
readily obtain this information from statutory with a pilot.
regulations and a whole range of other commercial 15. Plan the approach to a berth.
publications. I limit the scope of this short chapter to 16. Manoeuvring in heavy weather. Heaving to.
those aspects of command for which I believe no 17. Manoeuvring alongside another vessel.
formal training exists, and whilst I do not have the
answer as to how the aspiring commander can acquire Sometimes it is useful for the officer to present the
these skills, I hope I can provide some pointers, and a master with a formal plan designed to assist with his
few points on which to ponder. ongoing training. The Command Diploma Scheme
run by the Nautical Institute is very useful in this
Shiphandling respect. It inc ludes a log book, with a section on ship-
There are a few books describing the principles of handling. The presentation of such a log book may
ship handling, and providing hints from experienced encourage an otherwise reluctant master to permit his
practitioners. The candidate for command should junior the opportunities to practice and acquire ship
study these carefully, but there can be no substitute handling skills.
for learning by doing it yourself. One should not loose
any opportunity to watch masters and pilots in action, One often hears the term ship handling being
try to relate their actions to principles discussed in the referred to as seamanship. But I prefer a much wider
textbooks. It is especially useful to anticipate their definition of that term. Seamanship is the application
actions, try to imagine what you would do in the of common sense and experience to the marine
circumstances, before action is taken. environment.

As you gain more experience on the bridge, you Personnel management

should actively enquire from masters and pilots the I have always believed that a majorpart ofthe master's
reasons for their actions. Many of these professionals job is personnel management. For this he receives no
will be only too willing to teach ajunior officer who formal training. Indeed, a lot of personnel skills are a
shows an active interest, though usually few will offer reflection on his character. That is not to say that these
advice if this is not requested. skills cannot be improved by training and, of course,
they certainly change with experience.
Experience can best be gained by practice in non-
critical situations. After demonstrating his interest, the Many books are written on personnel
officer should request that the master allow him to management, although very few apply directly to the
undertake some of the normal manoeuvres which are marine industry. Those aspiring to command would
required during his watch. As he builds up confidence do well to study a selection of textbooks dealing with
and experience, more complicated situations can be the various aspects of personnel management. Some
tackled, always under the supervision and guidance training courses are also available, and the lessons
of the master. learned from role-playing are especially useful. It is
possible to organise role-playing situations onboard
A suggested work experience list (in progressive ship, so that the junior officers may learn valuable
order): lessons on how to deal with others.
1. Manoeuvres in open waters: simple alter courses. A good master is one who can inspire others, a
2. Anti-collision manoeuvres deep sea leader who can bring out the best in his subordinates
3. Recovery of a dummy man overboard. by encouraging their strengths and retraining their
4. Obtain original data for turning circles (and crash weaknesses .
5. Manoeuvres in sheltered waters: maintaining the A well run ship is achieved by the master taking a
desired track after an alter course, taking into personal interest in his crew. It is by encouraging others
account wind, tide, etc. to give oftheir best that the ship's crew perform in the
6. Anti-collision manoeuvres in areas ofbusy traffic. best possible manner. Taking the time to talk to all the
7. Knowledge of variations in pivot points when crew can pay huge dividends. Take an interest in their


day-to-day jobs, encourage good performance and do itself simply as a lack of cooperation, but in extreme
not limit contactto reprimands. Present a human face, cases can result in open hostility. There can be similar
encourage frequent dialogue with all onboard, hold problems even between personnel from one country,
regular informal meetings, preferably in their own where regional, tribal, political or religious differences
environment. The use of the crew bar with a can of can be a source of controversy.
beer can break the ice and much more will be revealed.
There can be an unwillingness to become involved
Listen to their problems, both job related and personal.
Ensure mail is regular and take an interest in their in the whole ship concept. We have all come across
the 'not my job' syndrome. Some people are much
welfare and their families.
more flexible than others, but it is the master's role to
With multinational crews, there is sometimes a knit these various personalities into one viable
tendency for some people to misunderstand other shipboard working team. Another personnel problem
cultures. This can lead to problems with work, and is the inability to give or take orders.
even to abreakdown ofrelationships, which ultimately
results in a very inefficient and unproductive crew. Another trait to overcome is the preconception that
One important part of experience is the ability to deal certain tasks are beneath one's dignity. We have all
come across the officer in a pristine sparkling white
with the various nationalities found onboard most
boiler suit and gloves who regards himself as a
ships. As we have to deal with an increasingly wide
and varied spectrum of cultural backgrounds onboard, supervisor and that only the ratings actually do manual
work. It is sometimes difficult to persuade suchjuniors
so we must all learn to cope with their individual
idiosyncrasies. There are vast differences in the best that they are part of a working team.
ways of dealing with various ethnic groups. Ifsome I am not really too sure how any education or
people onboard have no experience of dealing, training can assist with problems of personalities, other
working, and living with some of the other ethnic than the overall education of character development
groups onboard, then the master must be prepared to that comes with exposure to having to deal with such
give them guidance with their approach. problems. Perhaps recognising that they exist is the
firstlesson. In general, the master's ability to deal with
One must be careful not to tar all members of one
these problems will depend upon his own strength of
nationality or ethnic group with the same brush and character, and personal characteristics. I believe that
to avoid the thoughts that all - act like that. That is life is a great teacher in this respect, and that the
not to say that one should not be alive to national or experience that the passing years brings is invaluable
ethnic characteristics. in personnel work. Hence my strong beliefthat there
The potential master must never allow himself to is a definite minimum age before which no candidate
acquire prejudices, be these colour, race, religion, should be considered for promotion to master.
regional, educational, political, and so on. He must Some people onboard may be unable to
strongly discourage such prejudices in others onboard. comprehend onboard training and guidance due to
Too often one sees an unproductive crew, whose poor language difficulties, or due to a lack of basic
work is really a result of the uncompromising attitudes education. There is only the reward of personal
of their senior officers. satisfaction for the master who is both willing and able
to teach basic educational and personal skills to the
A pro blem with some groups is the attitude to those
underprivileged shipmate. Time should be taken to
morejunior. Many nations have a strict social structure
teach people about unfamiliar tasks and it is
in which the elite members have a rather low regard
advantageous to have a briefing session before
for the lower classes. This can become an extremely
undertaking any non-routinejob. The right person in
thorny point when transcribed into onboard the right place at the right time makes operations go
relatiomnips in a multi-cultural crew. Clicking of the
much smoother.
fingers to summon assistance may seem disgusting
behaviour to the westerner in these days of equality. Another aspect ofthe master's personnel work is
Indeed it is often viewed a such by some of the assessment. The master must keep himself well
recipients. But the perpetrators of such actions may informed on the abilities, attitudes, and character of
have been brought up in an environment where such everyone onboard. These must be monitored regularly
behaviour is perfectly acceptable, and they need to spot early signs of problems before they get out of
careful nurturing out ofwhat others see as denigrating hand. He should be able to present unbiased reports
habits. on each member of the crew to the owner at regular
intervals, so that suitable candidates can be offered
Similarly there is a problem of seemingly natural re-employment or promotion. Further, the master
antagonism. Certain people just don't seem to be able must be able to detect those who may have false
to get along with certain others, and there are often qualifications.
problems when they sail together. This may sound
like asweepinggeneralisation, especiallywhen applied The ship has a social infrastructure, and the master
to nationalities, but! found itto be true. It can manifest mustbe able to spot social problems before they effect

the ship's operation. This includes alcohol or other involved. The extra effort will be more than rewarded
drug problems, sexual problems, excessive gambling, in the future when he becomes responsible for the
and character defects which result in bullying, vessel's accounts.
violence, thieving, bribery and extortion, etc. Although
everyone onboard has their own characteristics, Today's master must also be computer literate. This
strongly antisocial behaviour of any form must be does not mean he needs to be an expert progrannner
strongly discouraged. The saying that a happy crew is but he should have a working knowledge of the
an efficient crew is still valid operation of a personal computer (PC), and be able
to use a basic word processor and spreadsheet. The
Above all, the master must exerc ise effective master needs to be a good organiser, and there are
leadership. The masterwho fails to maintain standards, various standard management tools which can assist
both professional and personal, cannot expect others him with such tasks. Apart from reading through
to maintain them. standard textbooks on management skills, a good
appreciation of the systems involved can be obtained
It has been suggested that all masters should
by enrolling on the Nautical Institute's management
undertake a course in psychology and psychiatry to
self-development programme. This covers setting
enable them to deal with the numerous personnel objectives and planning, control, solving problems and
problems which arise sometime on most voyages.
making decisions, leadership and motivation,
Unfortunately, that is not a practical possibility for
delegation, time management, running meetings, and
most, so that all the master has to draw upon is his training.
own strength of character, his experience of life, and
good old fashioned common sense. A knowledge oflogistics and stock control will assist
the master to control the stores in an economical
Perhaps this is a good point at which to consider
manner and maintain a realistic level of stocks. This
what characteristics make a good shipmaster. There
means there will be sufficient spares available for use
will always be as many styles of command as there on the current voyage, without too many items being
are sty les of character. Some personal characteristics
held in the stores, which means tying up capital - an
are genetic or acquired during early life. Those
unnecessary financial burden on the ship owner.
desirable in a master include loyalty, honesty, integrity,
humaneness, a sense of fair play and the ability to Commercial awareness
command respect. Commercial awareness really means being alive
Other characteristics can be altered by education, to the financial consequences of one's actions and
and experience. In this group I would include decisions.
leadership, perception, judgment, flexibil ity, Whilst the legislative and contractual obligations
communication, interpersonal skills, commercial associated with the carriage of goods by sea is well
awareness and the ability to assume responsibility. covered by the syllabus for the master's licence, such
The master needs to be a forward thinker and teaching concentrates on knowledge offacts. Little is
someone who can plan ahead and anticipate problems. done to train the master for the commercial decisions
An intelligent assessment of what might happen has he will have to make in running the ship, especially
avoided many a potential tragedy. He should be judgment skills.
authoritative (not authoritarian), enthusiastic, positive The general lack of commercial awareness amongst
in his approach to the inevitable problems which occur mariners has been addressed recently by the P&l clubs,
almost daily and not to be depressed by setbacks. He who ultimately pick up the bill for the mariner's errors.
must be able to cope with stress, and have the physical They all issue newsletters, and have various other
and mental stamina necessary to withstand the programmes available to try to improve the mariners
pressures of a concentrated and/or extended knowledge of the commercial implications of their
workload. actions,judgments and decisions.
General management skills The UK Club went further than most in sponsoring
As the general manager of the ship, the master will the Nautical Institute in the publication oftwo practical
have to compile the vessel's accounts. The degree of guides aimed at raising the level of commercial
his involvement will vary with the practice of the expertise amongst junior officers and ship masters.
owner, but increasingly, more financial accountability These textbooks can be wholeheartedly recommended
is being place upon the ship, and hence the master. to all seafarers, particularly those aspiring to command.
Apartfrom improving his numeracy skills, the aspiring
master is well advised to undertake some self education The subjects covered by Commercial Management
in general accountancy. This can be achieved by for Shipmasters and Watchkeeping Safety and Cargo
studying elementary textbooks, but it is preferable if lI&magement in Port for junior officers enable the
he enrolled on a basic introductory distance learning mariner to make decisions and take actions onboard
course, to provide an understanding of the principles ship which will have a beneficial effect on the


profitability of the voyage, and thus of the company The shipowner's view
employing him. Space does notperrnithere to go into What does the ship owner require from his master?
much detail, but they give the reader a good 1. First and foremost, someone who will look after
background to the law and practice of contracts use the owner's interests above all else. A person who
in the maritime industry. is dedicated to the success of the business.
The master needs a good working knowledge of 2. A person who is commercially aware:
the documents used for the carriage of goods by sea. Someone who has a full working knowledge
He will need to study the clauses of standards voyage of contracts of carriage, and their numerous
and time charter parties, and bills of lading, and be implications.
aware of the responsibilities implied in each clause. Serve the charterer according to the contract
He must know the exact division of responsibility and cooperate with their operations, but
between the ship owner and charterer, and fully always remembering who pays his salary.
understand such standard clauses as the Interclub Minimise expenditure, control budgets,
agreement. He must appreciate what is involved in reduce delays.
establishing cargo quantity and condition, and the use Maximise income.
of a notice of readiness, statement of facts, letter of Keep tight control on information regarding
protest and letter of indemnity. He should understand the operation ofthe vessel. Do not reveal facts
delivery, lay time and weather working days. He must to others which may embarrass the owners
have a full working knowledge of the various surveys financially, legally or morally.
which are regularly undertaken onboard his ship - 3. A skilled negotiator. Someone who can deal with
hold condition, on/off-hire, draft, cargo condition, flag surveyors, inspectors, officials, and the crew, and
and port state control, P&l condition, class and the problems these create. The ability to deal with
statutory surveys. corruption in a sensible manner.
4. A decision maker. Someone who can weigh up
The master must ensure that full records are the pros and cons of a situation, make a reasoned
maintained onboard, and he should be aware of the decision, and act upon it.
documents required both for routine operations and 5. A good personnel manager. Maintain a happy,
following an incident. The N auticaI Institute healthy, disciplined and efficient crew, who give
publication The Mariner's role in Collecting Evidence is a fair days work to the best of their ability. Deal
highly recommended. with all shipboard problems without involving the
Also under this heading, the master must make office.
himself aware of all local regulations whenever he 6. A good communicator. Know just how much to
enters a new port. Apart from not wanting to break say, to whom, and when. Know what not to say
local statutes, he must be alive to the implication of and when! Understand all the implications ofthat
local labour rules, so that he does not inadvertently famous expression "economical with the truth".
land the owner with a huge bill for infringing union 7. Agood accountant. Maintain the vessel's accounts
agreements. for wages, victualling, bond, cash, stores and
general expenditures. Stock control. Do not order
How does the potential master acquire commercial large quantities of items which will remain unused
awareness? Partly by continually observing all that is for some time, so that large quantities of capital
happening around the ship and its operations, and are tied up in idle resources.
thinking about the costs involved in each activity. No- 8. A good operations manager Someone who can
one must forget that we are engaged in a competitive exercise the correct balance between what should
business, and for a commercial enterprise to succeed be done, what could be done, and what needs to
income must exceed expenditure to realise a profit. be done.
Despite all the efforts that can be put into running a 9. A professional master mariner. A qualified and
good ship, these will be fruitless if the ship does not experienced seafarer who will conduct the voyage
earn a profit for the owners, as ultimately it will be with due regard to the safety ofthe ship, her cargo
sold, and all the efforts will have been in vain. and her crew and all relevant international
The Marine Society's education officer can assist
in identifying other courses which, although primarily Conclusions
designed for other industries, may be suitable for the How does one train for command?
mariner. This organisation also provides the 1. Undertake the N.I. command scheme.
encouragement which many mariners need to 2. Expand your knowledge by studying practical
complete these schemes. The education provided by books written by other professionals who have
the Institute of Chartered Shipbrokers as part oftheir different experience from you. The Nautical
membership entrance examination system is highly Institute has a range of valuable guides which are
recommended to potential masters. all up to date and highly relevant.

3. Watch the methods of all masters under whom 8. Read the instruction manuals of all new equipment
you serve. Try to emulate those characteristics fitted to your ship and ask the manufacturer for
which you consider to be their strengths, and learn background literature.
from their weaknesses. Would you actin the same 9. Attend as many updating courses as possible.
way, or make the same decisions? What would 10. Attend all seminars and industrial exhibitions you
be the implications? are able.
4. Read, read, read: 'M' notices, IMO publications 11. Try to gain as much practical experience as
(new international regulations), Lloyds list, possible. Never miss an opportunity to participate
SEAWAYS; any other nautical magazines which in an unfamiliar activity.
come to hand and as many commercial and 12. Personnel skills are learned from your very first
management textb ooks as p oss ib le. Keep up to voyage. Getting on well with people means that
date. you will be able to get the best out ofpeople, which
5. Continually watch what is happening both also helps you to do well. Treat others just as you
onboard your own ship, onboard others you come would like to be treated yourself.
across, and around all theportsyou visit. Be aware 13. Try to appreciate the benefits of tact and
of developments by personal observation. diplomacy. Leam to engage brain before engaging
6. Enrol on self-tuition courses. Interactive schemes mouth.
using onboard PCs are especially useful. References
7. Discuss experiences with contemporaries. Tallack, R.L., Commercial Mcmogement for
Everyone has something to learn from other Shipmasters, The Nautical Institute, 1998
people's experiences and it is always best if Rob erts, P., Walchkeeping Sqfety and Cargo
someone else makes the error. Institute events are Management in Port, The Nautical Institute, 1997
useful meeting points. The M(JJ"iner's Role in Collecting Evidence, The
Nautical Institute, 1998


Chapter 4


by Captain M.S. :tvfaclachlan :MICS FNI

MaJcolm Moclachlan tramed on HMS Worcester in the early 19608 and served a deck apprenticeship with Alfred Halt & Company. He
commanded seven BeU Lines'short-sea containerships in the 19808 and has taught Business and Law at Glasgow College afNautical
Studies since 1989. He is the author ofThe Shipmaster's Bus,ness Companion, publIshed by The NJuticaJ Institute, and The Business
and Law SeJfExaminer for Deck Officers, publIshed by Mrth Sea Books.

IT IS DIFFICULT TO THINK OF ANY WORKER, in any for the most part byjudges in English civil courts, your
industry, with so many legal responsibilities as a ship chiefresponsibilities as master can be summarised as
master, or with a liability to heavier criminal penalties follows::
than those of a ship master. Long books could be • To preserve the safety ofthe crew,passengers, ship
written on the master's legal responsibilities, but this and cargo (acting as if ship and cargo were your
volume allows one short chapter. Saying so much in own uninsured property).
so fewwords - for aniuternatlonalreadership sul!ject • To safeguard the marine environrneut.
to the regulations of over 150 flag states (in addition • To prosecute the voyage with the minimum of
to laws of port and coastal states) - calls for a good delay and expense.
deal of licence and brevity, the following notes are • To aet always-in the bestiuterests ofthe owners;
therefore condensed mostly from The Shipmaster's • To carry out all that is usual and necessary for the
Business Companion, which attempts to expiain only employment ofthe vessel.
United Kingdom law. Happily, many other maritime • To' obey the owner's lawful instructions (but
states have adopted the same international without any requirement to obey unlawful
conveutions as the UK and to give them legal effect inl'tructions, e.g. where a breach of a stautory
have enacted broadly similar statutory regulations as requirement or prohibition would result).
the UK's, while in many countries the civil law • To exercise care ofthe goods entrusted to you as
applicable to ship masters is similar to English civil bailee andto see that everything necessary is done
law.' . to preserve them in good order and condition
during the voyage.
Whose law?
The law governing any shipboard matter will Statutory duties
depend chiefly on (1) whether any iuternational Acts and statutory Instruments
convention deals with the matter, (2) whether the Most ofyour detailed duties as master are defined
convention has any legal effect in the flag !'tate, (3) by goverrunent and given Parliament's approval in
where the flag state is not a party to the convention, acts and statutory instruments (SIs). Although these
any other law in the flag stae and (4) the law of the documeuts are riot legally required to be carried on
coastal state or port state in which the ve sselis. Not all board, ignorance oftheir requirements through your
maritime states have adopted the major maritime company's fiIilure to supply them will be no defence
conventions, and it is unsafe to assume that the law when. charged with a breach. How, then, can you stay
applicable to your ship is the same as the law informed of the law? Merchant Shipping Notices
applicable to another. (MSN), which must be carried, do not ruiscribe all
statutory requirements. No currentMSN, for example,
In overseas ports it is essential, ifyou are to avoid infonns you of the two '£250,000 offences', or the
fines and detention of your ship, to be aware of any nine '£50,000 offences' which youmight commit. You
quiIks oflocallaw. Your best sources ofadvice - apart couldrequestyourcompanytokeepyoufullybriefed
from your owners or charterers or their agents - are, on legal requirements, but unless they have a legal
for customs, pilotage, health clearance and department it is doubtful whether they oould If they
immigration requirements, corrected Sailing do Jiace shipping legislation on board, it should be
Directions and Lists of Radio Signals and for cargo, corrected up to date like a chart folio, which is no
polh1ion and other maters involving liability to a third easy task. Not surprisingly, many masters sail in
party, your P&l club's local correspondent. The consul ignorance of some oftheir legal obligations.
for the flag state may be able to advise on local
cornrnerciallaw. The Merchant Shipping Act 1995 (MSA 1995)
consolidated the shipping law ofthe previous 101 years
Common law responsibilities and is now the 'principal act' that spawns mo!'t new
In English cornrnonlaw, i.e. the law as iuteqrreted UK merchant shipping regulations. Amendments to

MSA 1995 appear in newer acts, such as the Merchant take over all documents relating to the ship and her
Shipping and Maritime Security Act 1997 and in time crew which, under MSA 1995, must be delivered by
much confusing cross-referencing will become the off-going master when he ceases to be master. He
necessary. having made an entry (jointly signed by both of you)
in the narrative section of the Official Log Book
Several less prominent acts, such as the Carriage confirming delivery of the items, you legally assume
of Goods by Sea Act 1971 and the Marine Insurance command and total responsibility - even for the
Act 1906 also have a bearing on your legal duties, appalling state of affairs he might leave behind!
while roughly 200 SIs contain dozens of detailed
obligations of masters. A list of your statutory duties Log books and records
in relation to lifting plant alone would run to half a You must keep an Official Log Book (OLB), an
page of this book! The vast majority of relevant SIs Oil Record Book, a Garbage Record Book and a Radio
are listed in a useful Marine Information Note (MIN) Log Book and make entries in accordance with
published annually by the Maritime and Coastguard relevant SIs. However, unless you have a copy of the
Agency, but the MIN does not include regulations Schedule to the Official Log Books Regulations you
concerning public health, customs or immigration may be at a loss to rememb er the nineteen entries
matters, which also impose duties on masters of ships required in the blank 'narrative' pages of the OLB,
arriving at UK ports. since no instructions about them are given in the book!
As far as the civil (i.e. non-criminal) law is concemed,
judges and arbitrators prefer contemporaneous
For a breach of most statutory duties contained in
evidence recorded at or just after the event, not at a
acts and SIs there are two types ofpenalty. Most minor
offences - but also some quite serious ones - are more convenient later time and you have a duty to
generally dealt with by UK criminal courts under keep even scribbled notes of cargo temperatures,
'summary procedure', which may result in 'summary damage, etc. on dirty scraps of paper. (See The
conviction'. For numerous offences a magistrate or Mariners Role in Collecting Evidence for more on this
sheriff may fine you, like any ordinary citizen, up to topic.) Compliance with the ISM Code Regulations
=£5,000 on summary conviction, but for two oil entails keeping a multitude ofrecords confirming that
pollution offences they could fme you up to £250,000. you have adhered to your ship's Safety Management
Nine offences attract fines of up to £50,000, while System and the recording of all non-conformities.
three offences of pollution by garbage and noxious Ship's construction, equipment, certification
liquid substances carry maximum fines of £25,000. and publications
Numerous breaches carry summary conviction It is the company's responsibility to have the ship
penalties described as 'a fine of the statutory constructed, equipped and surveyed under the Cargo
maximum' (which currently means £5,000), or a fme Ship or Passenger Ship Construction Regulations, and
of a certain 'level' between 1 and 5 on the 'standard the Fire Protection and Life-saving Appliances
scale'. (Currently Level 1 equates to £200, Level 2 to Regulations. However, these SIs also impose several
£500, Level 3 to £ 1,000, Level 4 to £2,500 and Level personal duties on the master, such as that in the
5 to £5,000, but these sums will eventually be raised Passenger Ship Construction Regulations to ascertain
by Parliament to reflectincreased wealth.) 'Conviction and record draughts, trim and freeboard and to
on indictment' may follow ajury trial in a higher court calculate stability before departure. Many such duties
and result in a penalty (at the judge's discretion) of an may be delegated to another officer, but ifhe fails to
unlimited fine, ajail sentence of up to two years, or carry out the duty, you have breached the law. If in
both! doubt as to who bears responsibility, check the
Many merchant shipping offences are crimes of regulation in the relevant SI headed 'Penalties' and
strict liability, meaning that, in order to secure a look for wording such as '.....shall be an offence on
conviction, the prosecution will not have to prove that the part of the owner or master' or 'the owner and
you had mens rea (literally, 'guilty mind'). Under the master of the ship shall each be guilty of an offence
MSA 1995 there is strict liability to comply, for punishable on summary conviction .... -'.
example, with a 'Section 137 direction' given by the
Proceeding, or attempting to proceed, to sea
MCA following a pollution incident. That the offence
without SOLAS and Loadline Convention certificates
was committed will be enough, whether or not there
renders you liable to prosecution. You must produce
was any intent or fault on your part. Set against this
intimidating background, some - but by no means all the certificates on demand to authorised officials and
-ofyour statutory responsibilities are outlined below post up copies. To maintain validity of any SOLAS
in relation to the ship, the crew, the ship's employment, certificate, you (and the owner) must ensure, under
operations at sea, and operations in port. the Survey and Certification Regulations, that:
The ship and equipment are properly maintained
The ship in accordance with the applicable regulations.
Handing over No material change is made to the ship after survey
Your first statutory duty onjoining as master is to without approval ofthe certifying authority.


Any accident or defect affecting safety or the document the master's responsibility with regard to:
efficiency or completeness of the ffiip is reported
Implementing the safety and environmental-
as soon as possible to the certifying authority, a
protection policy of the Company;
proper officer and the appropriate authorities of
Motivating the crew in the observation of that
the port state.
MSA 1995 requires you to keep the Certificate of Issuing appropriate orders and instructions in a
Registry in your custody and produce it on every clear and simple manner;
occasion when clearing outwards from a UK port. Verifying that specified requirements are
Other countries' laws may require you to produce it observed; and
before clearing their ports. Reviewing the Safety Management System and
reporting its deficiencies to the shore-based
Classification is not a statutory requirement and
there are no criminal penalties for breaching class
rules. Ifyour ship falls out of class, however, the owners The Company (paragraph 5 continues) should
may lose their hull and machinery insurance and P&l ensure that the SMS operating on board the ship
cover, which could put them in breach ofISM Code contains a clear statement emphasising the master's
requirements, with detention in port a likely authority. Furthermore, the Company should establish
consequence. Where a foreign ship is found deficient in the SMS that the master has the overriding authority
in condition or equipment, the Port State Control and the responsibility to make decisions with respect
regimes will usually ensure that it is the owner who is to safety and pollution and to request the Company's
penalised (by the ship's detention), but in some assistance as may be necessary. Annex 2 provides an
countries you will be made the scapegoat and fined. appropriate statement of the master's authority, and
Regulations require you to carry the necessary reminds you that you have full operational
charts and publications for the intended voyage; lack responsibility on board, while the Company has
ofthem will amount to unseaworthiness in carriage of overall responsibility for the safe operation ofthe ship.
goods and insurance law. You must also carry A scan through the remainder of Annex 2 reveals the
navigational equipment complying with regulations. vast number of obligations under the SMS and the
Proceeding or attempting to proceed to sea without mountain of checklists and other paperwork required
carrying some required installation, or if an installation as evidence of conformity with practices that - for
fails to comply with regulations, makes you many masters - have long been the rule, simply as
automatically guilty of an offence, i.e. strictly liable. matters of good seamanship and command practice.

Ship operation and safety management Insurance

For ship operators, the International Safety Until an international convention is adopted
Management (ISM) Code has spawned the most requiring all ships to be insured, statutory regulations
onerous and far-reaching regulations ofthe last decade, demand only that cover is held in respect of oil
yet they impose only one brief and apparently pollution by ships carrying more than 2,000 tons of
innocuous obligation on the master. Regulation 7 cargo oil. Entering or leaving any port on such a ffiip
provides: The master of every ship shall operate his without an Oil Pollution Insurance Certificate (OPIC)
ship in accordance with the safety management system makes you liable in aUK court to amaximum fine of
on the basis of which the Safety Management ,£50,000 on summary conviction.
Certificate was issued'. When one considers all that is
involved in 'operating in accordance with the SMS' The crew
(a subject dealt with in depth in another chapter of Safe manning, hours of work and watcbkeeping
this book) it is hard to think ofa sentence more heavily A 1997 SI gives effect in respect ofthese matters
loaded with obligations. Breach of Regulation 7 carries to STCW 95 and requires that you ensure that your
a fine on summary conviction of the statutory ship does not pro ceed to sea unless there is on bo ard
maximum, or on conviction on indictment a valid safe manning do cument and that the manning
imprisonment for up to two years, or an unlimited of the ship complies with that document. In other
fine, or both, indicating its importance. The operation words, you are no longer allowed to sail short-handed.
of some high-risk ffiip types, such as gas carriers, ro- MSNI682(M) explains that 'the responsibility to
ro ferries and high speed craft, is meanwhile subject ensure that ships are safely, sufficiently and efficiently
to additional regulations, all of which impose further manned rests with owners and managing operators',
duties on the master. which appears to absolve you as master from
responsibility. However, the SI provides that the
Whether you need to be told your duties or not,
master must ensure that the watchkeeping
'the Company' must now tell you. Marine Guidance
arrangements for the ship are at all times adequate for
Note MGN40 reproduces the Annex to IMO
maintaining safe navigational and engineering
Resolution A.741 (18) containing the ISM Code, which
watches, having regard to Chapter VIII of Section A
states in paragraph 5 (Master's Responsibility and
ofthe STCW Code. You must also give directions to
Authority) that the Company should clearly define and

the deck watchkeeping officers responsible for Musters and drills
navigating the ship safely during their periods of duty, You are personally responsible for compiling the
in accordance with Part 3-1 of Section A VIIII2 of muster list, keeping it up to date and ensuring that
the STCW Code and any requirements sp ecified by copies are displayed conspicuously throughout your
the Secretary of State (which in practice means the ship. You must ensure that every crew member
Maritime and Coastguard Agency). It may be a relief participates in at least one boat drill and one fire drill
to know that responsibility for giving directions for each month, and in a passenger ship must hold drills
engineering watchkeeping arrangements is the chief each week. Your duties are well-detailed in M GN 17;
engineer's, and that he can be fined up to £5,000 for if every SI was so comprehensively explained, the
breach of that duty. master's legal duties would be much easier to define,
ifno less difficultto carry out!
The Safe Manning Regulations further require you
to ensure that all seamen who are newly employed in Health and safety law
your ship are given a reasonable opportunity to The Health and Safety at Work Regulations 1997
become familiar with the ship's equipment, operating consolidate the old SORADO Regulations and Health
procedures and other arrangements needed for the and Safety: General Duties Regulations and provide
proper performance of their duties, before being that the master must, with the Company and employer,
assigned to those duties. Hopefully you will have provide the necessary facilities to enable the
enough time in port! 'comp etent person', safety officer and safety
representatives to carry out their statutory duties under
It is the ship operator's duty to ensure that a the regulations. The general duty of ensuring the health
schedule of duties is produced setting out hours ofwork and safety of workers and other persons on board is
and rest periods, but before this is done you must seek that of the employer, but you, as the employer's
the views of your officers and of the ship's safety representative on board, are normally expected to
committee or the seamen or their representatives or a carry the heavy practical burden.
trade union, as appropriate. The final decision on the
schedule rests with the operator, who has the Ancillary health and safety regulations cover
responsibility to ensure that it is safe for the ship and protective clothing and equipment, means of access,
the performance of duties, but you are required to entry into dangerous spaces, safe movement on board
ensure, as far as reasonably practicable, that the ship, guarding ofmachinery and safety of electrical
schedule is adhered to. equipment, and hatches and lifting plant; compliance
with corresponding chapters of the Code of Safe
Documents Working Practices for Merchant Seamen will ensure
The Safe Manning Regulations also requireyou to that obligations under these SIs are met. The 1998
ensure that there are on board at all times all original edition of the Code (which must be carried), also
certificates and other documents issued pursuant to contains detailed advice on how to make risk
the STCW Convention (including the 1978 version) assessments and carry out health surveillance; these
indicating the qualifications of any member ofthe crew onerous and time-consuming duties are imposed by
to perform his or her professional functions. the HSW Regulations on the employer, but their
Engagement and discharge implementation on board will probably be devolved
Regulations require you to maintain two Lists of to you.
Crew - one of seamen who are engaged on a crew Accidents
agreement and one of those who are not, e.g. riding You must make reports to the MAIB of specified
crew, supernumeraries and ship staff contracted to accidents and dangerous occurrences, while other
another employer. You usually have a duty to act as 'hazardous incidents' such as 'near misses' may be
the employer's representative in signing the proper reported either to the MAIB or to The Nautical
crew's agreement, but since you are not employed on Institute's MARS scheme. Should any person die on
the same terms, you are not required to 'sign on' with board, or if a crew member dies ashore, you must
them and should instead put your details on the make a Return of Death to the Registrar of Shipping
ALCI (b). (Your own contract may be contained in and Seamen in Cardiff, inform the next-of-kin within
written or oral instructions from directors, three days, and make entries in the OLB, including a
superintendents or the superseded master, and in the list of the deceased's property.
custom and traditional practice of masters.)
Inspections If the UK's Merchant Navy Code of Conduct is
You must make weekly inspections ofprovisions, written into the crew agreement (which will be the
water and the crew accommodation and record the
case where your crew is on a 'BSF' agreement), you
results in the Official Log Book. These, like inspections
must deal with breaches of discipline in strict
of LSA and fire appliances, may be delegated, but
accordance with the Code. Since the Code only
legally they remain your responsibility.
documents the basic principles of natural justice (as


interpreted in the UK), there is no reason why its to using automatic pilot, sending distress messages,
procedures should not be followed in other cases, complying with Collision Regulations, sending
unless the crew agreement or the flag state's law mandatory ship reports and navigational warnings and
dictates otherwise. Under the Code you act as judge taking mandatory routes. The conunonlawmeanwhile
andjury, but must hear evidence from both sides, and requires that your vessel takes the shortest route
record it, and give the accused a copy of relevant log consistent with safety and the law, which is normally
entries. You may no longer impose fines, but can give the customary route for the trade. Ifshe is not insured
oral warnings, written reprimands or-your ultimate forgoing beyond Institute Warranty Limits, you must
sanction-dismissal. advise the owners when it becomes necessary to do
so. Ordinarily, you are prohibited from taking your
The ship's employment ship into offshore safety zones.
Cormnon law duties
Contractual disputes have yielded judges' Master's discretion
interpretations of the master's responsibilities with A 1997 SI prohibits the owner, charterer or
respect to matters such as deviation, voyage speed, manager, or any other person, from preventing or
tendering of notice of readiness and use of unsafe restricting you from taking or executing any decision
berths. You may not enjoy reading a mass of small which. in your professional judgement, is necessary
print, but charter party and bill oflading clauses are for the safe navigation of your ship - a useful tool
meant to be read and understood by masters as well against those who might seek to undermine your
aslawyers! supreme authority on board.

BiDs of lading PoUntion prevention

Even where you do not personally sign Bills of In UK law you currently have duties under SIs
Lading (BlLs), you must, as the carrier's selVant and dealing with prevention of pollution by oil, noxious
agent, take proper care of the merchant's goods. liquid substances andgarbage. Within a few years, SIs
Whenever aB/L or sea waybill has been issued, either covering airpollution and sewage will also be in force.
the Hague Rules or Hague-Visby Rules will almost Discharging oil or a mixture containing oil into UK
always be part of the contract (see the Clause national waters, or breaching MARPOL's discharge
Paramount) and will impose a duty to 'properly and criteria anywhere beyond them, willrenderyouliable
carefully load, handle, stow, carry, keep, care for and for a fine ofup to £250,000, while pollution by other
discharge any goods carried'. Ifthe shipper demands, substances carries amaximum fine of £25,000. You
either the carrier, or the master, or the carrier's agent have a duty to report any 'serious harm to the
must issue a B/L to him, but you need not insert any environment' to the MAIB and any oil or NLS
inaccurate statements or give any details which you pollution to the nearest coostal state in accordance with
carmot reasonably check, such as weights. M1614. Growing concern forthe marine environment
has inrecent years added 'custodian and protector' to
On time charter your various roles.
You should pay special attention to the text in a
time charter party, including all those confusing Distress, rescue and salvage incidents
Under the Distress MessagesRegulations youhave
deletions, insertions, side clauses and rider clauses.
a duty render assistance (if you can do so without
You are obliged to carry out the charterer's orders as
serious danger to your vessel and the persons there on)
far as employment ofthe vesselis concerned andmust
to any person in danger ofbeing lost at sea - but not
normally give him 'customary and reasonable to maritime property, salvage being a conunercial
assistance'. Remember, however, the Master's venture. If you go in for it, Article 8 of the Salvage
Discretion Regulations which prohibit any interference Convention - as enshrined in the MSA 1995 - will
with your decisions concerning safe navigation. impose several duties on you, whether you are salvor
or master of the property in danger; in either case
Cargo-related SIs
you must exercise due care to prevent or minimise
The Carriage of Cargoes Regulations impose
damage to the environment.
several duties and prohibitions on you with regard to
acceptance, documentation, loading, stowage and In port
securing of cargo, while other SIs define your duties Arrival
regarding the carriage (and disposal) of dangerous The contract in a voyage charter imposes a clear
goods andmarine pollutants, the carriage ofdangerous duty on you to tender notice ofreadiness at the earliest
ornoxious liquid substances in bulk, and the weighing opportunity on the owner's behalf, the charterparty's
of goods vehicles and other cargo. wording should be carefully read, however, for
detailed instructions. In most ports you will have
At sea statutory duties in connection with pilotage and to
General; routeing make declarations to customs, port health and
Statutory regulations create many obligations on immigration officials. There may be a local
you as master when at sea, for example with respect requirement for you to note protest, particularly if

landing damaged goods; your P&l club correspondent the seaworthiness of the ship for the voyage at the
can advise on this. time when the voyage commences, and to keep the
ship in a seaworthy condition for the voyage during
Stowaways the voyage. This obligation applies notwithstanding
IMO Resolution A.871 (Guidelines on the any agreement to the contrary (i.e. it cannot be
Allocation of Responsibilities to seek the Successful contracted out of).
Resolution of Stowaway Cases) contains suggested
responsibilities of masters in such cases, running to Load line
halfapage ofMGN70(M). Even so, ifyou are to avoid You will be guilty of an offence if your ship, not
a fine, bringing stowaways to a foreign port will require being exempted, proceeds or attempts to proceed to
special attention to local law. sea without being survey ed or marked with deck and
load lines, or fails to comp ly with Conditions of
Watchkeeplng in port Assignment or to carry statutory stability information.
Chapter VIII of the STCW Code provides clear You commit a furth er offence ifyour ship is overloaded
guidelines on responsibilities for safe watchkeeping
in port, and another ifyou attempt to take her to sea
and pollution prevention in port, including when
overloaded. Serious overloading could render your
carry ing hazardous cargo and the Safe Manning ship 'dangerously unsafe', as could undermanning and
Regulations require you to follow them. Port State a range of other defects and deficiencies.
Control regimes will check your compliance with the
Code. Passengers
SIs dealing with boarding cards, counting and
Seaworthiness recording systems, emergency information and
Section 98 of MS A 1995 provides that if a ship in
musters and drills all impose further legal duties on
a UK port, or a UK ship in any other port is you in connection with passengers, while carrying
dangerously unsafe, then subject to certain provisos,
more passengers than is allowed by the Passenger
the master and the owner of the ship shall each be
Certificate is another ,£50,000 offence.
guilty of an offence punishable on summary conviction
by a fine of up to ,£50,000 or on conviction on Conclusion
indictment by imprisonment for up to two years, or While a shipmaster's traditional authority has been
an unlimited fine, or both. The penalty is aimed reduced by modern communicaions, this brief outline
primarily at owners of substandard ships, but if the shows that his legal responsibilities have grown
prosecutor cannot find the owner, the master makes a enormously. Amendments to maritime conventions
convenient alternative target. The common law have brought new and onerous duties, the ISM Code
requires your ship to be seaworthy before departure alone generating what amounts to a wholesale change
for each stage ofhervoyage in respect of (1) technical in the master's job description. In EC waters,
matters (e.g. structure and stability), (2) cargo care, meanwhile, a whole new branch of shipping legislation
and (3) 'fittednessforthe voyage' (meaning manning, grows with each new Directive, while the mandatory
charts and publications, stores, bunkers, etc.). Where status of new UK Merchant Shipping Notices means
the owner has contracted only to exercise 'due yet more documents to be read and filed away in the
diligence' to ensure that the vessel is seaworthy for master's memory.
the voyage, you have a duty to make (and record)
every reasonably practicable check before departure. The weight of both the legal burden and the extra
Section 42 of MSA 1995 provides that in every paperwork accompanying it has become intolerable
contract of employment between the owner ofa UK for masters. Regulators ashore should not be surprised
ship and its master or any seaman employed in it, at the growing shortage of future masters, for what
there is an implied obligation on the owner that the office worker would want to leave his family to become
owner, the master and every agent charged with the legal scapegoat for the shortcomings of a
loading the ship, preparing the ship for sea or sending shipowner, manager, charterer or classification society,
the ship to sea shall use all reasonable means to ensure while accepting the physical risks of seafaring?
Maclachlan, M.S., The Shipmaster's Business
Companion, The Nautical Institute, 1997.


Chapter 5


by Captain I. Mathison FNI
Fleet Safety Manager, Bibby-Harrison Management Services Limited

Captain Mathison started his seagoing career in 1965 with EUerman and Papayanni Line oJLiverpool. On obtainmg hisfirst
cerbficare oJcamperency in 1969 he sailed with Palm LineJor two voyages - deciding West Afiica wasn'tJor him before moving to his
present company, Thos. &Jas. Harrtson Lld., oJ Liverpool, in 1970. During hiS nearly ?XJ years if service with this trad~ional ship
awner he has saued in every rank, third mate to master and was seconded as Operations Manager ashore in Houston and London in the
period he was classed as sea .raj}' He was appointed ChiefMartne Superintendent in 1994, a position he retains with the parent
company Charente Steam Ship to thiS day. In 1997, when the two oldest Shipplfig companies in LiverpoolJormed ajoint ventu",
company, Bibby-Harrison Management Services Ltd., he was again seconded, this time as' Fleet Safety Manager. His safety related
responsibaities now encompass all class oJvessels, managed by BHMS, the offthore and accommodation un~s.

TIlE INTERNATIONAL SAFETY MANAGEMENT (ISM) Code Before dissecting and, in certain cases, translating
orto give it its full title, the International Management the elements of the Code, it must be said that for
Code for the Safe Operation of Ships and Pollution masters who have served on well run vessels during
Prevention, was adopted by the International Maritime their seagoing careers and who now manage similar
Organization (IMO) by resolution A. 741(18) at the vessels there is absolutely nothing new in the Code.
1994 Safety of Life at Sea Convention. It is embodied Because the Code was written by persons who were
with Chapter IX of the SOLAS convention and formerlyinvolvedwith the quality assurance industry,
required that all passenger ships, oil tankers, chemical key words and phrases have been adopted by the Code
tankers, gas carriers, bulk carriers and high speed craft which have been transposed from that sphere. Once
of500 gross tonnage and above complied no later than these are explained then I am certain the visibility, as
1st July 1998. All other ships and mobile offshore far as the Code is concerned, improves dramatically.
drilling units of again 500 gross tonnage and above
The certificate relating to the Code is a trading
will have to comply by no later than IstJuly 2002.
certifi cate similar to th e Load Line, Safety Equi pment,
Certain commentators have stated that the Code Safety Radio etc., etc. and, as the name implies,
is the most radical shipping legislation to come before without them your vessel will cease to trade. We can
the international shipping community for many years. now see how important this legislation is, and how
When the Code is studied in detail, which we will do the master's responsibility is recognised and in fact is
later, it can be seen quite clearly how the IMO has enhanced by implementation of the Code.
tried to address under one chapter of SOL AS all the As I stated previously there is nothing new in the
maritime disasters which have occurred over the last Code, but certain of the phrases have been transposed
thirty-five years. The Torrey Canyon - Clauses 7 from the quality assurance world and to assist you here
'Development of Plans for Shipboard Operations" and is a small glossary which should help you when we
Clause 8 "Emergency Preparedness". The Amoco look at the elements ofthe Code in detail.
Cadiz - Clause 5 "Master's Responsibility and
Authority", the Herald ofFree Enterprise again Clause Brief glossary
7 "Development of Plans for Shipboard Operations" Audit inspection
and Clause 4 'Designated Person(s) Ashore". The Object evidence
Scandinavian Star - Clause 3 "Companies Documented proof i.e., signed and completed
Responsibilities" and the Grace Darling Clause 2 checklists, passage plans, etc.
"Safety and Environmental Protection Policy" and Non-conformance
Clause 10 "Maintenance of the Ship and Equipment". A part of the Safety Management system is not
being complied with.
The maritime industry has, up to this time, always Major non-conformance
been retroactive in its legislation but hopefully with An element of the Safe Management Code is not
the correct use of the Code and remembering the basis present or not being complied with e.g., no
of good seamanship practice, this may be the first internal audit or no emergency preparedness.
opportunity that the shipping industry can prove to Defect
the world at large that we are at last being pro-active Part of the "hardware" is not working e.g., fire
towards legislation. nozzle seized, fire extinguisher empty, etc.

Observation must produce an organogram for the management
An auditor's opinion as to how the Code should structure ashore and afloat. The Comp any must also
be interpreted. develop procedures for reporting accidents and non-
Sqfqy tlUllUlgellUJnt sy.tem conformances (see definitions), to prepare for any
The Company's interpretation of the ISM Code. emergency situations and carry out internal audits and
The Code
In formulating the elements of the Code, ofwhich The points highlighted under the first sections are
there are 13, the International Maritime Organization very broad based in their definitions. As we move
has recognised and highlighted in the preamble that through the following sections of the Code it will be
no two ship owners or shipping companies are the seen how they are expanded but not to such an extent
same and the Code has been written in broad terms that it does not allow for a degree of interpretation.
(some would say too broad, which is allowing for Safety and environmental protection policy
individuals to interpret it incorrectly). To ensure The Company must establish a policy and then
widespread application the foundation to good safety
ensure it is imp lemented throughout the organisation,
management is the absolute commitment for both ashore and afloat. How the policy is implemented
implementation ofthe Code from the top. The top in
and who implements it are described in other sections
this instance is not only you on board but also the
of the Code.
very highest levels of management within companies
and we will see how this commitment can be shown Company responsibilities and authority
graphically when companies' organograms are The Code requires that within this heading the
displayed. Company responsible for the management of the
vessel provides the Administration with its full name
The Code itselfis divided into a preamble and 13 and details and it must also define and document the
sections and I will attempt to expand on each section
levels of management and how the lines of
as follows:
responsibility are interlinked. This will normally take
Preamble the form of an organogram and a typical simplistic
Recognises that no two ship owners or managers Company organisation could be as follows:-
are the same and whilst each operate under a wide
range of conditions, the Code is based on general Board of Directors
principles and objectives. I I I
Fleet Manager Safety Manager Accounts Manager
The emphasis is that the foundation of good ship I
management is total commitment from the top in all I
matters ofsafety and pollution prevention is essential. Operations Manager Technical Manager

This is divided into four subsections entitled
Ship Manager (Ops)
Ship Manager (Tech)
Definitions, Objectives, Application and Functional
Requirements for a safety-management system.
Ship Manager (Ops)
Ship Manager (Tech)
The Definitions given are for the ISM Code itself,
the Company and the Administration.

The Objectives of the Code are simply those which

any well run comp any should try to achieve, namely
that risks are assessed, a safe working environment is
Figure 5.7 Typical simplistic company organisation
provided, standards will be continually improved and
that all mandatory rules, regulations and industry
recommendations are followed. The Company must also provide adequate
resources and support to ensure that the designated
The Code is Applicable to all ships (after the year person ashore can fulfil hislher duties. It can be seen
2002). that the intention ofthis part of the Code is to ensure
that corporate responsibility is totally transparent and
The Functional requirements ofthe Code stipulate
those that are responsible for all operations are now
that the Company must develop and maintain such
easily identified.
items as a safety and environmental protection policy
and develop instructions and procedures for the safe Designated person(s) ashore (DPA)
operation of ships. (This heading, when the numb er This is one of the most important sections of the
of operations on board which relate to safety are Code, both for the ship's master and the Company in
considered, is all embracing). The Company must general. Before discussing the implication ofsection 4
define levels of communication and authority i.e., it it is important that the text is known:


'To ensure the safe operation of each ship and to and bring it to the attention of the Board of Directors.
provide a link between the Company and those on If, in the examples given, additional monies above
board, every Company, as appropriate, should Board approved figures are required, the Board will
designate a person or persons ashore having direct then have to approve or otherwise any additional
access to the highest level of management. The expenditure. If they make the decision to veto the
responsibility and authority of the designated person masters/DP A's recommendations then, if an incident
or persons should include monitoring the safety and occurs in the future, it can now be proved the
pollution prevention aspects ofthe operation of each responsibility rested with the highest level of
ship and ensuring that adequate resources and shore- management within the Company.
based support are applied, as required".
The position of the DP A can now be seen to be
The key words in this text are "link", "monitoring" extremely important within any Company, not only
and "adequate resources". The DPA is the link to protect the master's interests but also to ensure that
between the master and the Company's Board. If the Board ofDirectors is kept fully aware. Make certain
possible, he or she should be removed from the day you know who the DPA is within your Company.
to day line management of the vessels and not have
any budgetary responsibilities for the vessels' running :Master's responsibility and authority
costs. Section 5 is divided into two parts. Part 1 requires
the Company to "define and document" the master's
The DPA must also monitor the safety and responsibility regarding implementing the policy,
pollution prevention aspects of each ship. In practice motivating the crew to observing their policy, issuing
he/she must be aware ofmost facets ofthe ship because orders and instructions, verifying that special
the maj ority of operations on board vessels today have requirements are observed and reviewing the Safety
a safety or pollution aspect to them. Management System (SMS) and reporting any
The DPAmust also ensure adequate resources and deficiencies to the shore based management. Three
of these five subsections are self-explanatory i.e.,
shore based support are provided to the vessel, this
implementing the policy, issuing orders and verifying
can encompass the supply of equipment and stores to
special requirements. The remaining two sections are
ensuring sufficient shore management time is
worthy of an explanation.
Motivating the crew
To illustrate the functions of a DPA the following
How is this done? Remember, in the ISM regime,
organogram is shown:
objective evidence is required. Safety and
Directors-·-------------.l management meetings are held on a regular basis on
well managed vessels. Each of these meetings will
consist of representatives from thejunior officers and
DPA the ratings and will be minuted. Members of the
committee should be encouraged to pass on to their

Line management Master

(Ship managers! ....._ - - (on board
superintendents) management)
J shipmates the dialogue of the meetings. Safety drills
are held with post drill discussion afterwards, when
all crew members should participate. Again, these
discussions should be recorded by the safety officer.
Safety videos are shown and their contents discussed.
Figure 5.2 Functions ola DPA Heads of departments, when giving out work
schedules, will discuss what personal protection
In the "normal" course of managing a vessel the equipment is required and presumably the safety
master, as chairman of the onboard management implication involved when the work is being carried
structure, communicates with the ship managers/ out. When crew members do not adhere to Company
superintendents ashore. They in turn are responsible requirements regarding P.P E. then disciplinary action
to the Board of Directors for operating the ship in a is taken. All these factors can ably demonstrate to an
safe condition and in line with Board approval auditor that you "motivate the crew".
concerning running costs.
Reviewing the safety management system
If a condition arises on board which the master How this is achieved is entirely dependent upon
considers unsafe, for example the radar is giving the master and the Company. It can be as simple as a
persistent problems or the oily water separator has sentence in the Safety Minutes that the system has
ceased to function correctly, he would in the first been reviewed or acheckliitwhich shows clearly what
instant approach the respective manager or sections have been scrutinised The important point
superintendent requesting action. If this action is not is that the system isn't "carved in stone". It is, in fact,
forthcoming and the master is itill concerned he now or should be, a "living, breathing" set of documents
has the option of approaching the DP A. It is then and it is only by the input ofboth shore and ship based
incumbent upon the DP A to investigate the situation management will it really work.

The second part ofsection 5 requires the Company line is a matter for individual companies, whether by
to ensure that a statement is embodied in the SMS translation or by ensuring that all officers and ratings
giving the master clear and unambiguous authority to have a common language and an understanding of
take whatever steps he deems necessary in respect of English, or a combination of both.
safety and pollution prevention. Be sure you are aware
of this statement and where it is within your S.M. S. The final sub section requires that the Company
ensure that personnel on board can communicate
Resources and personnel between themselves. It should be noted that the word
This section is divided into seven subsections and language is not used and how people communicate
defines what the Company should do. It must ensure may in certain instances relate to onboard
that you are properly qualified for command, fully management.
aware ofthe Safety Management system and are given
the necessary support.
Development of plans for shipboard
It must also ensure that the vessel is manned by This is the smallest section of the Code, two
qualified, certificated and medically fit seafarers. Today sentences which make up three and a half lines, but
the majority of seafaring personnel are employed by the largest section within any Safety Management
manning agents and therefore the contractual System.
obligations and verification procedures between ship
owners or ship managers and these agencies are a It is easy to see why this section is so long when all
critical part of ensuring the "letter" of the Code is the shipboard operations are considered, for example,
ob served. If y ou have any doubts regarding the arrival and departure from port, cargo operations,
qualifications or fitness of newly appointed crew bunkering procedures, navigation, engineering
members then this must be brought to the attention practices and the host ofother operations which ensure
of the Company without delay. the vessel moves safely from port to port.

The third subsection of section 6 requires that new Emergency preparedness

personnel must be given familiarisation related to The Company must establish procedures which
safety and environmental protection. Within the identify potential emergency situations which could
system there should be a familiarisation procedure occur on board. Having identified these potential
which must be given to new joiners. My definition of situations, a programme of exercises and drills must
a new joiner is anyone who stays on board the vessel be drawn up to ensure all concerned are fully prep ared
overnight. This thereby ensures that everyone is aware to react to these situations.
of the location of fire fighting equipment, emergency
signals and their survival craft location. This will predominantly be the crews on board the
vessels, but the Code requires that the "Company's
The Company must ensure that all personnel have Organisation" can respond at any time to emergency
an understanding of the "relevant rules, regulation situations. This means that the shore emergency
codes and guidelines". How do you carry out the organisation must be known to the ship and an
company's requirements for this? One of the simplest emergency contact communication system should
methods are signature pages attached to the company's have been set up.
SMS, Merchant Shipping Notice Files, Statutory
To ensure that the procedures are effective, regular
Instrument Files, TechnicalIndices, etc. etc. I am aware
drills must be held and the results documented, not
of the old adage ''you can take a horse to water but
only for those drills on board but for ship-to-shore
you cannot make it drink". But you, the master, must
drills. The period between drills will be specified
ensure that individuals have access to all the required
within the SMS and you should be guided accordingly.
information and once you prove that (objective
evidence again) then it becomes that individual's Reports and analysis of non-
resp onsib il ity. conformances, accidents and hazardous
The training needs of all personnel involved in the occurrences
SMS must be identified. The Company should The Code requires the SMS has provision for
establish and maintain procedures for this. It must be making certain that any non-conformances (a part of
remembered that the training required is to maintain the system which is not being complied with)
the SMS and the ISM Code is part of the SOLAS accidents, or near misses are reported, investigated
convention. and analysed. Having done that then the appropriate
corrective action is applied.
The Company should stabilise procedures to
ensure the ship's complement receive relevant SMS This was the section of the Code which, on first
information in a working language(s) which is reading, I thought needed translation but when related
understood by them. The keyword here is relevant, to good ship management practices it made sense.
and how that relevant information is passed down the Safety Committees, both ashore and afloat, have


encompassed the requirements of this section. Fleet Company Verification, Review and
circulars have advised of others misfortunes and Evaluation
statistics produced during the year have produced the Having established a Safety Management System
analysis required. Once again there is nothing new in the Code now requires the Company to carry out
the Code. intemal audits to verify the system is fully operational
and section 12 and its 6 subsections deal with this. A
Maintenance of the ship and equipment procedure will have been established within the system
This section requires the Company to establish which should dictate the minimum period between
procedures to ensure the ship is maintained to a audits, phrases such as "at least once year" are used.
minimum requirement by the relevant rules and This then allows Companies a degree offlexibility in
regulations, specified by Flag Administration, scheduling visits. An audit schedule should be drawn
Classification Society, Insurance Underwriters etc., but up, which is normally only available ashore in the
also any additional requirements it specifies. office. I firmly believe that your ship should be ready
for an audit at any time without the necessity ofpre-
The section itself is divided into four sections and
in addition to stating that rules and regulations must
be complied with, the Company must ensure I have seen Flag State and on their behalf
inspection takes place, and defects are rectified and Classification Society auditors conduct audits and for
records are kept. your benefit here are examples of the type of questions
asked of Masters during these periods.
The Company must identifY any equipment or
system, the failure of which could result in a hazardous For the Master:
situation for example steering gears, electrical Show me all the certificates
generators, anchor systems, etc. Having identified such Show me in the SMC where it describes your
systems then they should be tested regularly together duties and describe the familiarisation procedure
with any backup equipment. in force on board your ship.
Describe the format of the safety committee
Documentation meeting
All documentation and data used within the How are the crew made aware of Merchant
SMS must be controlled. The Company is Shipping Notices (or their equivalents) and
required to ensure that documentation is available Statutory Instruments.
at relevant locations and that any changes are only What is and show me the Company's Drug and
made by authorised personnel and obsolete Alcohol Policy. How do you check and review
individuals consumption on board?
documents are removed. To facilitate this,
How are the hours of work and rest recorded on
documentation within the system is usually
board? What actions do you take if they are
"controlled" or "uncontrolled".
There will be a procedure which should describe How do you know when tank and hold
how sections within the SMS are numbered, collated maintenance has been carried out?
and corrected. Show me your standing orders and the official
The final sentence in this section states that "Each Describe your handover procedures and show me
ship should carry on board all documentation relevant any documentation relating to this.
to that ship". This does not only apply to the obvious • Show me the last intemal safety audit report.
certification but also refers to plans, instruction books, • Show me the Officers and ratings' certificates and
navigational charts and publications and, of course, any Flag State endorsements.
crew documentation. • Who is the designated person ashore?

An element of document control are those Obviously other senior officers and certain ratings
diagrams and instructions previous Masters, Chief are questioned during the same audits so here are brief
Engineers and Heads of Departments have produced examples of the type of questions they are asked
and posted on various notice boards and bulkheads Chief Engineer
throughout the ship. When you join the ship have a Explain your planned maintenance system and
look around and if you agree with what has been show me the history of a general service pump,
posted up sign and date it. Similarly for the Chief lubricating oil pump, emergency fire pump and
Engineer, and heads of department. If you or they steering gears.
don't agree with the notices take them down. For such • The ISM Code Section 10.3 requires the company
diagrams and drawing as the Safety and Fire Plans to establish procedures in its SMS to identifY
these should be signed and dated to indicate when equipment and systems, the sudden operational
and by whom they were last checked. failure of which may result in a hazardous

situation. Show me in your system what Cod<1 Steward
equipment has been identified. What do you do with the used oil from the deep
Describe the procedures that are in place for when fat fryer?
the main engine fails. What chemicals do you use in the galley for
Describe your actions with regard to the generator cleaning?
failure, where are these procedures in your SMS. How do you clean the galley filters?
Describe your bunker procedures. Show me the How do you activate the fire alarm?
checklist for the last occasion when you bunkered. • How many fire blankets do you have and who
How do you communicate with the bunker barge? checks them?
How do you check the bunker receipt? • How often are the fire blankets checked?
Show me your standing orders and your night What do you do with the tins and bottles?
orders. Inspected domestic fridges and galley?
Describe how your sewage system is chlorinated. How do you rotate the stock?
Show me the permit to work records for hot work
and entry into enclosed spaces. These are only examples of the type of questions
Show me the certificates for the engine room chain asked but you can see the patterns emerging. You know
blocks. your Safety Management System better than any
external auditor, so carry out audits on your own vessel
Chief Officer to ensure other members of the ship's coroplement
How do you calibrate the gas monitor? are fully familiar with the aspects ofthe system which
What is the deck maintenance and greasing relate to them.
Explain the de-ballasting/ballasting operations. Certificates, Verification and Control
How do you exchange information with shore ISM documentation is divided into two parts, the
authorities? Document of Compliance (DOC) and the Safety
How often do y ou inspect the ballast tanks? Show Management Certificate (SMC) each issued by the
me the records. Flag State Administration or their authorised bodies.
How do you check the vessel's water tightness The Document of Compliance is issued to the
before proceeding to sea? Company and under the Code the Company can
How do you pass on information to the 2nd and either be the owner of the ship or manager who has
3rd Officers during your offduty time. assumed the owners responsibilities in the operation
How do you assign work to a first trip cadet to
ensure he works in a safe manner. of the ship. The D.O.C. must be issued prior to the
Checked the cargo gear register. ship's SMC.
Checked "Garbage" manual. To obtain a Document of Compliance the
Company must demonstrate to Administration
Second Officer auditors that it has a structured and documented
Checked chart catalogue. system in place ashore and afloat. The certificate is
Show me the charts for last voyage. valid for five years and is subject to annual reviews
Checked a number of chart corrections. and a copy must be carried on board your vessel. The
Checked passage plan against charts. SMC is issued to the ship when it has proved, following
Checked arrival and dep arture checklists. an audit on board, that it complies with the Company
Checked pilot card. Safety Management System. The certificate is also
Checked Ship/Shore checklists. valid for five years with an intermediate external
Show me the compass error book. review after 2,5 years. (As will be shown, the Code
also requires the Company to carry out internal
Safety Officers reviews, so don't be under the misapprehension that
Checked Safety Officers Record Book. once the S.M.C. has been issued personnel on board
Checked Safety Committee Minutes. are devoid of scrutiny for thirty months).
Show me evidence that the Company provides
the ship with safety information. The two certificates now form the ISM certification
Sighted records of drills. and, as stated previously, they are trading certificates
and therefore if withdrawn could result in the ship
Bosun and Company being unable to trade. Therefore if the
What are the emergency signals on this ship? Company ceased trading then those on board and
How do you receive your instructions regarding those ashore would not be required. It is imperative
deck maintenance? that all Masters and Managers play their full part in
Are you responsible for die paint locker? ensuring that the Code WOIXS, because in theory it
Show me how the paint locker sprinkler system could be possible for an SMC to be withdrawn on
works? one of the company's vessels which would result in
When you grease wires, how do you dispose of the DOC being withdrawn which would then in turn
the rags and residue? stop the rest of the fleet from trading.


Summary The Code is here to stay and it must be used to its
Hopefully this has given you, the master, a flavour of full advantage by those onboard. It is and will become
what the Code is and how it is supposed to work and more and more imperative that everyone is fully
it will inevitably generate an amount of paperwork, if familiar with it and how it works. That having been
only to provide the objective evidence. There are said it is also imperative that the system is in place
various ways to reduce this paperwork or at least the and working, your heads of department should not
archiving of it. It will depend upon whatever system be so focused on ensuring that all the paper isin place,
your company has in place. that the cargo compressors are not working, the
hatches will not open, or the purifiers in the engine
An example of how my company deals with such room are defunct. The right balance must be achieved
returns is as follows. The arrival and departure bridge between time in the ship's office and out on deck or in
checklists have been laminated and are completed the engine room.
when required. Then, instead offiling the checklist,
an entry is made in the deck log confirming the fact it Finally whenever port state inspectors,
has been completed. The entry in the logbook then classification society auditors or those from the office
becomes the objective evidence that is required by ,come aboard remember it is your system and you
auditors. This methodology can be used for numerous .should know it better than anyone!!
other checklists thereby reducing the amount ofpaper
which is stored onboard.

Chapter 6


by Dr. A.C. Kulkarni

Consultant in Diving Medicine, India

Introduction W fight control

During the past decade or so the shipping industry Regular exercise also helps to keep weight under
has undergone vast change. New regulations about control. Being overweight makes an individual
marine pollution, cargo carrying, safety management, susceptible to many disorders. Calculating body mass
etc., are strictly imp lemented by various authorities. index (BMI) is a simple method of determining
Ship; have become bigger and crew sizes smaller; "obesity level". BMI is a ratio of
documentation has increased but very little time is
Weight in kilograms
available to complete it. Contract periods have 2
Height in metres
reduced but the time in port is almost nil. Signing off
crew members have often complained of "difficult, Ideally the ratio should be between 20 and 25. Ifit
trying times" on board. is above 30, the individual is definitely overweight.
This should be investigated and remedial measures
It is not uncommon to find a 300,000 ton tanker
fully loaded, cruising at 18 knots with a handful of
fatigued crew. During the entire contract period they Weight control and regular exercise reduce
have seen only the shore terminals at loading and cholesterol levels, which is the single most contributing
discharge ports! The same applies to bulk carriers or factor in coronary artery disease (CAD).
container vessels. Preserving the physical and
psychological wellbeing of the crew, therefore, is Drugs and alcohol
another imp ortant responsibility of the master. A strict control on drug and alcohol indulgence is
maintained by Port State Controls and many ship
Although every crew member undergoes a owners. Every endeavour must be made to enforce
periodic medical examination, one ofthe commonest drugs and alcohol policies. Crew returning aboard after
health problems observed amongst seafarers is being shore leave are likely to "smuggle" these on board.
overweight. A seafarer requires 2500 to 3500 calories Additionally, the master should be vigilant about the
per day, depending on the amount of physical work innocuous looking new "intoxicants" which are
performed. Overindulgence in the wrong types offood available on board, e.g. cough syrup. Most cough
is often the cause of being overweight Isolation and syrups have an alcohol content of more than 15 to
boredom quite often lead to this over indulgence. 20%. People are known to consume large quantities of
cough syrup daily, which is equivalent to several
Exercise whiskies.
Regular exercise is an absolute must. Exercises
should be chosen so that they can also be done in the "SnltTers"
confines ofa cabin. The exercises should increase the Tanker crew will recall the sickening, sweet smell
heart rate to a minimum level, called target heart rate of naptha on board. These crew often complain of a
(THR). Target heart rate can be calculated by 'heavy head' after working for a while. All volatile
deducting age from ISO, i. e. for a 35 years old cargoes produce a similar effect. 'Heavy head' is due
individual the target heart rate will be 145. Exercise to intoxication. "Sniffing" is a fairly common mode of
should be sufficiently vigorous to increase the heart intoxication. Aromatic compounds like paint thinners,
rate to 145 beats per minute, continuing the exercise varnishes and dilutants give a "kick" when sniffed.
and maintaining it for about eight to ten minutes. Toners used in photocopying machines are another
Jogging on the spot is the most convenient way of commonly available intoxicant, extensively used by
achieving this without any equipment. "sniffers" .
Precautions should be taken to wear proper Smoking. tobacco and its derivatives
footwear, to avoid damage to knee joints by jogging Cigarette smoking is a habit picked up very easily
on a hard deck surface. Another practical exercise during youth. Quite often it starts with a supposed
regime used extensively is the "modified British Army "macho" image and soon an individual is addicted to
Physical Fitness Tesf'. This test involves stepping up the nicotine. The nicotine content of cigarettes varies
and down on a stool 43 cms in height, 30 times a considerably from brand to brand and in the same
minute for five minutes. Ifyou can complete the test brand, depending on the geographical location of
you are fit! You need not count the pulse. distribution and sale.


Smoking affects respiratory and the cardiovascular facilities exist on board. The tape can then be replayed
system. The effects are observed as chronic bronchitis, to understand the instructions. Transcripts can be
emphysema and cancer of the lungs. It also affects obtained when required, especially in case an enquiry
heart rate, blood pressure, hardening of the blood is ordered afterwards.
vessels and is a major contributory factor in coronary
artery disease. A heavy smoker, due to reduced The scale ofmedical equipment and medicines has
physical fitness, would become a liability in case of increased considerably. A variety ofmodern diagnostic
an accident. equipment is now available on board and the master
must make himself familiar with its use. In case of an
Chewing tob acco produc es local effects in the emergency he would be required to use them. "The
mouth. Cancer of the tongue and mouth are buck stops at him!"
commonly seen amongst those who chew tobacco.
Recently a number of orally consumed tobacco Medical inventory
derivatives have been introduced, mainly in the Indian Current medical scales provide an extensive
subcontinent. In addition to tobacco these have a medical inventory. Certain "controlled" drugs need
mixture of many ingredients. Some of these to be kept in safe custody and their use accounted for.
compounds have been found to be carcinogenic. It is practicable to replenish the stock of medicines
directly from ship owners/operators by having
Strong willpower is required to quit smoking. There supplies hand carried aboard by crew when joining
are many anti smoking programmes available to assist the vessel. These medicines will a need certificate from
an individual. Nicotine skin patches are freely available the company's medical advisor before transportation.
as an "over the cOlUlter (OTe)" item. They have been
found to be very effective amongst chronic heavy Whenever medicines are obtained directly from
smokers. Consumption of tobacco derivatives should "non-English speaking" ports, the generic names of
be discouraged in a manner similar to smoking in the medicines must be written on the packaging. Help
public places. from local medical authorities could be sought for this.
Medical emergencies Disposal of hospital waste
The Shipmaster's Medical Guide is an excellent Waste from a ship's hospital would not usually be
reference book which is a mandatory publication to contaminated like that from a regular surgery or
be held on board. It should be referred to while hospital. However, the waste must be disposed of
handling sicknesses and accidents on board. While hygienically as per the "Waste Management Plan" of
obtaining radio medical advice, the instructions the vessel. Needles and sharps must be capped and
received could be read in conjunction with the guide. syringes broken off before disposing of them. Out of
This will make implementation easier. date medicines should be destroyed in a similar
manner. In the case of the disposal of "controlled"
Radio medical advice drugs, a destruction note (certificate) will need to be
Inmarsat has improved communications on board. prepared.
During medical emergencies the master must contact
the company's medical adviser or the nearest coastal Use of ~ resuscitator
station for advice. These medical authorities are The current medical scale recommended by the
familiar with the facilities on board and the constraints Intemational Maritime Organization (IMO ) includes
under which the crew operate. Except to obtain oxygen resuscitators. These resuscitators provide pure
relevant past medical information, the victim's GP oxygen to the patient. Various flow rates can be
should not be contacted. regulated but four litres a minute is most commonly
preferred. It is also possible to dilute the oxygen
History taking content. Positive pressure resuscitators, when fully
History taking is an art. It provides a lot of charged, provide oxygen for over an hour. Some of
information about an acute exacerbation ofa chronic the resuscitators have an additional air cylinder
disease. For example, in the case of pain in the attached which can be used as a suction device to clear
abdomen, a crew member on questioning might reply the throat of secretions, vomit, etc.
"I often get acidity. One to two tablets of an antacid
normally give relief, but today I have not got any In spite of various training programmes and on
relief'. Diagnosis of an acute peptic ulcer is more or board safety instructions, cases of "gassing" do occur.
less a certainty. The master should not impose his During "gassing" the victim is affected by the effects
authority while history taking but should adopt the of hypoxia or toxic gases, or by both. Such victims
attitude of a concerned "next of kin". Relevant should always be resuscitated by an O2 resuscitator.
symptoms, the history and signs should be written Mouth to mouth respiration provides only about 18
down before asking for radio medical advice. to 19'/0 of required oxygen and should continue only
until an oxygen resuscitator can be brought to the site
While obtaining radio medical advice, it is of the accident. With this the victim has a better chance
recommended that the conversation be taped, ifsuch of survival.

Every crew member should be thoroughly well balanced emotions are necessary to withstand
proficient in the use ofan oxygen resuscitator. Regular difficult stress situations.
drills must be carried out to demonstrate competence e) Will power
in use of the equipment. Periodic pressure records d) Intelligence
should be maintained. This is vital life saving Intellectual factors such as quick appreciation of
equipment and should always be in a state of a sibJation, flexibility, concentration, imagination,
operational readiness. faculty to abstract and a retentive memory are of
basic importance. Officers, especially, must be
Evacuation by stretcher able to recognise interrelationships in new
While evacuating an injured/sick seaman. adequate situations, to find adequate solutions and to
attention must be paid to strapping the casualty to the verbalise them. Actually, we do not yet know the
stretcher so that there is no possibility ofthe casualty effect of intelligence - whether a higher level
slipping out. This is particularly important when the produces fewer mistakes or an average one
stretcher is manoeuvred vertically through manholes produces a better capacity for observation and
or from holds. etc. During a ship to ship transfer when better work output.
the stretcher is required to be picked up by a crane, it e) Perception
is advisable that the stretcher is secured inside a rubb er Every individual has limits of perception under
inflatable (Zodiac) ifavailable on board. Slings should try ing conditions.
be attached to the inflatable. One crew member can f) The man-machine interface
also escort the casualty. This is a much safer way of Advancement in the technical components of the
casualty transfer, especially during heavy weather. ship demand special capabilities, technical
knowledge and know how, control of operations
Psychological aspects of seafaring
and quick reactions, etc.
The seaman lives and works in a peculiar
environment, where he has constantly to adapt to Factors in a ship's environment which may
changing conditions. He may join a vessel in a tropical contri bute to psychological malfunc1ioning
port, pass through the Roaring Forties to a snow A new equilibrium in working and living
covered port and return to another tropical port - all conditions. For most careers ashore, working and
within a month! Under these conditions, monotony living conditions can normally be separated into the
of life becomes unbearable and added to this are the working environment (when "on duty") and the social
problems of continuous noise, vibration, fatigue, lack and family environment (when "off duty"). There are
of sleep, an unsettled way of life and exposure to different functions and roles under the two
hazardous cargo. Reduced manning levels on board environments.
have enhanced the problem. He is exposed to these
abnormal and hazardous factors for 24 hours a day On board, both the environments are inseparable
and has no respite or period of recovery away from and unchanging. In fact, both merge into one single
these conditions, as happens to an industrial worker environment where one aspect constantly influences
ashore. the other aspect. There is a fixed working hierarchy
and schedule, unvarying living conditions and quarters
When combinations ofthese factors interplay along and the ever present and never changing company of
with worry, homesickness and other mental tensions
the other crew members. This means that crew
continuously and constantly, a peculiar reaction is set
members cannot play different roles during working
in motion. The deleterious effect ofthese psychological
time and leisure time. However, psychological theories
reactions may prove to be much worse than a single
propose that for normal mental hygiene and
psychological trauma. Hence the basic personality
assets of a seafarer become an important factor.
development a change in roles is essential. Ifa person
However, although unified and stringent medical
is denied such a change it may result in frustration,
standards for seafarers have been evolved worldwide, leading to aggression and indifference which may
psychological selection is not yet obligatory nor is it manifest itself as accidents, sickness, crime, quarrels,
widely applicable. Hence a background knowledge fights, alcoholism and so on.
of the psychological aspects of seafaring will go along Change from a natural to artificial environment
way to understanding and capitalising on the innate Under natural environmental conditions, people
strengths and weakness of the crew vis a vis the react as if by an innate instinct to avoid failure.
peculiar working conditions of seafarers. However, modern day ships present an artificial
Desirable psychological characteristics environment, hence people can no longer rely on
a) Motivation innate instincts - they have to adapt to specific laws
Motivation influences the power of observation and rules to master the technical world. If they
at sea, decision making and sustains hardship. continue with natural patterns ofbehaviour under the
b) Emotions new artificial environment, this may result in more
Emotions affect the capacity for work stability and failures.
Communication on board 3. Breakdown of support system ashore.
Multinational crews have become an accepted 4. Broken promises.
feature of seafaring, hence communication among 5. Inadequate/inappropriate induction or training.
crew members may not be possible on all vessels to 6. Poorly designed equipment or technology.
any great extent. Although good communication is 7. Jo b/ career dissatisfaction.
indispensable for the safety ofthe crew, the vessel and 8. Alcoholic beverages and food.
for smooth operations, it has added necessity from a 9. Physical environment and amenities.
psychological point of view. Communication with 10. Personality clashes.
other people is necessary if individuals are to be 11. Insecurity of employment.
balanced and efficient. Isolation results in changed 12. Class structures and attitudes.
mental attitudes and abnormal behaviour with 13. Failures, sensitivity to appreciate interplay ofwmK,
resultant undesirable consequences. Linguistic social, personal and community relations.
competence is essential for achieving a versatile
personality and development of a broader approach "Man management" is the key to preventing these
problems. The master cannot be indifferent and "mind
to life.
his own business". The master must know his crew
Body language well. With a little efforthe should be able to remember
Certain body language may be considered their names within a week. Ifan able seaman, oiler or
offensive in some societies whereas it may be normal cadet is called by his name and not by his position,
or accepted in others. Know your crew well! there is an instant feeling of closeness or belonging.
The master must keep his eyes and ears open to
Psychological consequences of separation from identify potential victims; for that, he should be
family and society accessible to all. He has to play the role ofa counsellor.
Separation from family not only influences the Knowledge, skill and experience ofthe "wise old man"
emotional relationships between partners, but also will be on test.
causes problems in family management and the
upbringing of children. Mostly, this results in changing Every endeavour must be made to break the
from a patriarchal form of management to a monotony on board. There are numerous ways of
matriarchal system during the absence of the seaman doing it. The essential component of this stress
father, since the mother has to solve all dailyproblems. relieving is group activity. Revival of some old
This situation changes again during the long vacation seafaring traditions and customs is one such group
stay of the male seaman. activity. How many of us know of and have
participated in a "crossing the line" ceremony? It is
On board he has to live with other seamen and he an age old custom!
has no chance to select his co-workers. He has to come
to terms with others, whether he likes them or not. If the crew are having a table tennis match, the
His real friends are ashore and far away andhe misses master should preside over and give away the prizes.
the privileges of good friendship, confidence, Ideally he should take part in the tournament. There
relaxation, empathy, common interests, etc. A few of isno harm (or insult) if a seaman or oiler defeats him!
the potential sources of dissatisfaction / conflict are:
A ''happy ship" will sail for a long time - in spite
1. Knowledge and !kills deficiency.
2. Personal styles ofinteraction. of hard work.

Chapter 7


by Captain N.K. Gupta MICS(UK) MNI
Deputy Conservator, Jawarharlal Nehru Port Trust, Mumbai, India

Captain Neerav Kumar Gupta, as Deputy COl'lServalor, is the head ofthe Mn.rine Department ofJawaharla/ Nehrn Port T=t, Navi
lvfumbai. He is responsible/orpJtorage,jire and safety, marine conservancy,port crajis, etc. He has over 25 years afexperience in the
shipping industry. Earlier he was with Bombay Port Trust as Master Pilot andpn"or to that sailed as Master With The iJlipping
Corporation of India Ltd. He is a member of The Institute of Chartered ;},ipbrokers (UK), The Nautical Institute (UK), and the first
Indian member afthe International Harbour Masters' Association (UK).

Note I will now briefly outline the various legislation

This chapter was origmally presented as' a paper at the First and conventions dealing with oil pollution only.
International Conference on Oil Spill Response, held in Concem over oil pollution originated shortly after
Mumbai on 19th and 20th April 1999. World War 1. The first international convention
regarding oil pollution, 'The International Maritime
Introduction Conference', was held in Washington in 1926. It was
Most ofthe time, the world's 85,000 ships perform not ratified by any nation due to legal and technical
their business silently, out of sight and out of mind. problems and therefore failed. World War 2 caused
Yet, whenever an oil pollution incident occurs which considerable pollution, particularly on the shores of
is caused by a ship, it attracts headlines world over, as the Atlantic, as a result of torpedoing and sinking of
we all know. Whether the shipping industry has been ships. Consequently, concern about oil pollution began
unfairly singled out is somewhat a debatable issue. to grow again.
To my mind marine pollution will continue to OILPOLl954
occur, despite the best of efforts and measures. This is The 'Intemational Convention for Prevention of
a fact of life. There have been incidents both minor Pollution of the Sea by Oil, 1954', was held and
and catastrophic, such as Torrey Canyon in 1967, Amoco adopted in London in 1954. It was the first
Cadiz in 1978, and Ex.xon Va/dez in 1989, each at international convention dealing exclusively with oil
intervals of 11 years. Judging by the time intervals is pollution. It prohibited the discharge of oil and oily
the year 2000, i.e. the new millennium, slated for mixtures from certain vessels in specified ocean areas.
another maj or pollution disaster? I sincerely hope not. It came into force on 26th July 1958, after almost four
years. IMO took over responsibility for this treaty in
These and other incidents have had a profound
effect on maritime transportation and regulations. 1959. Although it contributed to cleaner seas, no
There exists a very real relationship between major enforcement system existed other than the flag state.
marine disasters and new international regimes. I have India ratified OILPOL'54. It continues to be
made an attempt in this paper to establish the fact applicable in many countries, though it is superseded
that pollution incidents have led to more legislation, by MARPOL 73/78.
regulations, enforcement, inspections, etc. As a result, Torrey Canyon, a tanker, ran aground in March 1967
the amounts spilled over the years have dramatically and spilled more than 120,000 tons of crude oil into
reduced - from 301,000 tonnes in 1970 to 67,000 the sea. It grounded 16 miles from the south west
tonnes in 1997. comer of England, beyond the three miles jurisdiction,
as England then claimed a territorial sea ofthree miles.
The world's merchant cargo fleet is approximately The concept of EEZ had not yet emerged. 80,000
45,000 ships of 700 million dwt and 500 million gt tonnes of crude oil spread along the British and French
According to Intertanko, the number of tankers coasts. Until then most people believed that the oceans
operating worldwide is 3428, totalling 300 million dwt and seas were big enough to cope with any pollution
Tankers comprise 40"/0 of the total fleet in dwt terms. caused by human activity. Ultimately the ship had to
The Indian merchant fleet comprises 478 ships of 11 be bombed by the Royal Navy as there was no better
million dwt ofwhich 93 are tankers, totalling 5 million way to deal with the wreck and the oil. Damage claims
dwt. The total annual cargo transported worldwide in the UK amounted to =£6 million and in France to
by sea is 4-22 billion tonnes. 45% of this i.e. 1-9 billion FRF 40 million. It is interesting to note that this
tonnes of oil, is moved in tankers. Of this amount incident had the same impact in the USA as in Europe,
99.9995% is delivered safely, i.e. only about 0.0005% since the US Congress realised that it had no law for
is lost. compensation caused by marine oil pollution.


The direct result ofthe Torrey Canyon disaster was were servants or agents ofthe ship owner, but now
two international conventions, one private also include crew, pilots, charterers, salvors and
international agreement and the formation of the th eir servants.
Marine Environment Protection Committee (MEPC) 3. Right to break the shipowner's limitation of
of IMO. liability was "actual fault or privity" of the
shipowner. This has now been made more difficult
CLC 1969 and changed to the concept of "wilful misconduct
The Intemational Convention on Civil Liability of the shipowner". This is done to reduce litigation
for Oil Pollution Damage, 1969, (CLC'69) was held in view of enhanced amounts.
in Brussels in November 1969 and entered into force 4. The tonnage on which limitation is based is
onJune 19, 1975. As a the date of writing (1999) 75 changed from Limitation ton which is the sum of
countries are party to it. India ratified it on May 1, Net Tons and the engine room space to Gross Tons.
1987 and it entered into force on July 30, 1987. 5. Ballastpassages including bunker spills oftankers
Until 1969 no liability was placed on polluting are now covered in the Protocol provided some
ships, though there were port rules and regulations, cargo residues remain on board, which is usually
national laws, etc. The ship's total financial liability the case.
was restricted to the ship's liability tonnage as p er the 6. Grave or imminent threat is now covered even if
Limitation Convention 1957, i.e. about US$ 60-70 it does not result in a spill, whereas previously
per ton. actual pollution must have occurred to claim
The CLC establishes liability limits of ship owners 7. Whereas earlier only Territorial sea was covered
for payment of damage caused by oil pollution. It now the Exclusive Economic Zone is also covered
provides a uniform set of international rules and
procedures for determining liability and consequently FUND 1971
provides compensation to those who suffer damage The International Convention on the
due to the escape or discharge of persistent oils from Estab Iishment of an International Fund for the
laden tankers. It is based on strict ship owner liability, Compensation for Oil Pollution Damage 1971. It
compulsory insurance and limitation ofliability. entered into force on October 16, 1978. Today 52
countries are party to it. India ratified it on July 10,
CLC applies only to all tankers carrying oil in bulk 1990 and entered into force on October 8, 1990.
but insurance is required only when a tanker is
carrying 2000 tonnes or more oil in bulk as cargo. Oil It was considered necessary to shift some burden
should be "persistent oil", i.e. crude, fuel, heavy diesel, of compensation to the oil industry, the other main
lubricating and whale oil. The owner is required to beneficiary ofthe carriage of oil by sea. Fund'71 creates
maintain an insurance or other financial security for an oil spill compensation fund, funded by oil
an amount as required under CLC. In India the companies in the member states to supplement
certificate for such financial security is issued by the compensation provided by the ship owners under
Director General of Shipping. P&l Clubs usually stand CLC. These two conventions therefore form an
guarantee for CLC liability. More importantly, P&l integral part of the international oil pollution
Clubs offer US$ 500m of cover for oil pollution claims. compensation regime.

The 1976 Protocol entered into force on April 8, The Fund pays compensation to claimants where
1981 and in India on July 30, 1987. It was not until the total claim exceeds the shipowner's limit or where
1992 that another Protocol was agreed. It came into compensation is not receivable from a shipowner or
effect on May 30, 1996. To date 39 countries have when full compensation is not available under CLC.
ratified it. In India it is under consideration by the The types of claim covered by both schemes include
government. Whereas the main purpose of this physical damage to property, cost of preventive
Protocol is to increase the shipowner's limit, it has measures when a spill actually occurs and reasonable
become very difficult to break the right to limitation costs of clean up.
so as to protect the ship owner. The 1976 Protocol entered into force on November
The main differences between the convention and 22, 1994 but not many states have accepted it. The
its Protocol of 1992 are: 1992 Protocol entered into force on May 30,1996.
l. The amounts have more than doubled. From SDR Today 39 countries are party to it. India has yet to
133 per limitation ton to a maximum of SDR 14 ratifY it as the matter is under consideration by the
million, under the Protocol it is SDR 3 million for government. The main difference between the Fund
up to 5000 gt For ships of more than 5000 gt and and its Protocol of 1992 are:-
up to 140,000 gt it is SDR 3 million plus SDR 420 l. The maximum amount is more than doubled
per gt beyond 5000 gt. For more than 140,000 gt from SDR 60 million to SDR 135 million. In
it is SDR 59-7 million. special circumstances it can be increased to SDR
2. Persons who could not be prosecuted for claims 200 million.

2. The other three differences are same as those However,just a few weeks later the Titanic of the
stated in CLC under 4, 5, 6 and 7. tanker disasters occurred. On March 16, VLCC Amoco
Cadizran aground in rough weather offthe north coast
The advantage of the '92 Protocol is that much ofFrance. She struck rocks twelve hours after a steering
higher amounts are available for disbursement. failure, despite the assistance oftug Pacific. She broke
Therefore if an incident occurs in our waters, be they up quickly, spilling her entire cargo of230,000 tonnes
territorial or EEZ, those who have suffered economic of crude oil, resulting in the single largest spill in
loss such as fishermen or seaside residents, etc. or even histOl)'. It also resulted in France becoming a fierce
those involved in cleanup operations, etc., will have a regulatory state from a pragmatic maritime state. Final
much larger basket of money to claim from. It is settlement amounted to US$ 32 million for the ship
therefore very much in the interest ofpotential Indian and caIgo and over US$ 253 million for claims by
claimants to see Indiajoining the 1992 liability and French interests.
compensation schemes. Therefore it is clearly evident
that India would benefit and should ratifY the Protocols IMO was then asked to take immediate steps to
as early as possible. prevent similar incidents. The Amoco Cadizgrounding
led to the eventual acceptance of MARPOL. It was
Italy is the largest contributor to Fund'71, its agreed to amalgamate the convention and Protocol
contribution being 45-040/0. India, with 13.(Wo, is the '78 into one single instrument. Accordingly it is titled
second largest contributor. IfItaly also leaves andjoins MARPOL 73178. It eventually entered into force on
the Protocol of 1992 as many countries have done so October 2, 1983 after 10 years. TIlls disaster also
then India will be the largest contributor to the Fund, showed that CLC and the Fund were inadequate to
exceeding 500/0 of the total contribution. It is hardly a meet claims and led to their revisions. It also led to
desirable situation. It is also in the interest ofIndian oil the re-examination of the Law of Salvage, which was
receivers tojoin the new regime because their obligation also found to be inadequate for serious oil spillages.
to contribute to the 1971 Fund will become heavier and
heavier, as less and less countries remain in it. Today 106 states, comprising 94% of the world
tonnage, have ratified the convention. India ratified it
Intervention Convention 1969 on September 24, 1986 and entered into force on
The International Convention Relating to December 24, 1986. Annex 1 deals with regulations
Intervention on the High Seas in Cases of Oil for prevention of pollution by oil. Four of the five
Pollution, 1%9. It was held in Brussels in 1969 and Annexes are in force. A new Annex VI, on Air
entered into force on May 6, 1975. It has been ratified Pollution has been accepted by only two states so far.
by 72 countries comprising 67% ofthe world's tonnage. Another Annex VII, on Ballast Water Management,
India has yet to ratifY it. is on the anvil. India has so far ratified only Annex 1
and 11, whilst the others are under consideration by
It was adopted in the aftermath of the Torrey Canyon
the government.
disaster. It provides coastal states with limited rights
to take measures on the high seas to prevent, mitigate OPRC 1990
or eliminate danger which may pose a grave and The International Convention on Oil Pollution
imminent risk from pollution by oil to its coastline, as Preparedness, Response and Cooperation, 1990. It
a result of a maritime casualty. The Protocol of 1973 entered into force on May 13, 1995 and is ratified by
entered into force on March 30, 1983. Today 41 40 countries comprising 43-14% of the world's
countries have ratified it. tonnage. India ratified it on November 17, 1997 and
entered into force on February 17, 1998.
In theUK, for example, itpermits the Secretary of
State for Transport to intervene after an accident has It was the direct result of the Exxon Valdez disaster
occurred to a ship which will or may cause pollution in 1987. It is one ofanumber ofmeasures adopted by
to UK waters and or the coastline. The powers are IMO in response to the disaster. Although it did not
exercisable when pre-defined conditions are met. enter into force, it received its first test when major oil
spills occurred in the Persian Gulf due to military
MARPOL 73178 hostilities. IMO acted as ifthe convention was in force
The International Convention for the Prevention and set up a Disaster Fund and an Oil Spill
of Pollution from Ships, 1973 (MARPOL). It was Coordination Centre which provided valuable
adopted in November 1973 but was not ratified due assistance in preventing major damage to the
to its complexity. Between December 1976 and environment off the Saudi Arabian coast.
January 1977 a series of tanker disasters took place Under the convention the burden is on the
such as Argo Merchant, Olympic Games, Daphne, Grand government to prepare for response to spill
Zenith and BOJ'cota. Almost all were caused due to emergencies. Its establishes a global system for
human error or failure. These disasters led to a responding to major oil spills. Parties are encouraged
conference which resulted in the MARPOL Protocol to develop contingency plans, establish stockpiles of
of 197& equipment and develop expertise to be shared on


request with others. Parties are required to take legal development programs, increased potential liabilities
and administrative measures to facilitate arrival and significantly increased financial responsibility
utilisation and departure of ships, aircraft, equipment requirements.
and personnel involved in dealing with an incident.
Ships are required to have Shipboard Oil Pollution It covers all types of oils and all types of ships,
Emergency Plans (SO PEP) for dealing with spills. whereas the Convention regime relates to persistent
Ships are also required to report incidents ofpollution oil and tankers only. The empirical approach of the
to coastal authorities. A survey by ITOPF in 141 Convention regime was based on the circumstances
countries established that governments in over 100 surrounding the Torrey Canyon incident and the fact
countries have accepted the primary responsibility of that only persistent oil was likely to cause significant
dealing with ship-source oil pollution. pollution damage which required specific regimes to
deal with it. It was felt that general liability law would
OPA 1990 suffice to cover pollution by nonpersistent oils or
. Oil Pollution Act, 1990 of the USA. It was signed pollution from dry cargo ships.
mto law on August 18, 1990. It is a unilateral system
of the USA. One of the biggest differences between the OPA
and the .CLC is that the CLC channels as much liability
It was drafted in the aftermath of the Exxon Valdez as pOSSible to the registered shipowner, whereas the
disaster of March 24, 1989. This tanker of 214816 US law seeks to impose liability on as many people as
tonnes was under the command of Captain possible. Under OPA, the principle is "the polluter
Hazelwood. After sailing from Valdez terminal shall pay". In the USA, owners and operator's of
Alaska, she ran aground on Bligh Island Reef 45 pleasure boats have been fined to the tune ofUS$ 16
minutes after the pilot disembarked. She was lo~ded million to date.
with 177,000 tonnes of crude. Eight of her eleven tanks
suffered extensive damage reSUlting in a spill of 37, Conclusion
000 tonnes of oil. To date it is the worst spill in the There is no international regime for pollution
USA. Captain Hazelwood and Third Officer Gregory damage caused by non-tankers carrying persistent oils.
Cousins were found guilty of criminal negligence and Owners may limit their liability as per the Limitation
had their licences suspended by the court of enquiry. of Liability for Maritime Claims Convention, 1976
The captain was fined a punitive US$ 5000. (LLMC'76). Owners are not required to maintain
insurance as in the case of CLC. Many European
A sum of US $3-5 billion has been paid so far to countries, including the UK, have introduced national
fishermen, property owners, municipalities, etc. for legislation making owners ofnon-tankers strictly liable
compensatory claims, fines, damages etc., though the for damage caused by persistent oils.
total bill for the spill is reckoned to be US$ 18 billion.
Only a company such as Exxon could have survived Also, there is no international regime covering
such a catastrophe. The vessel, now named SeaRiver nonpersistent oils. Compensation in these cases is
Mediterranean, is barred from entering Prince William governed by rules of the Admiralty or common civil
Sound, Alaska, under OPA'90. The only criminal law.
charge that could be brought for the spill was for A cost analysis done by the International Oil Spill
discharging oil in navigable waters without a permit, Database, USA indicates that spill cleanup costs vary
a misdemeanour. Available criminal penalties for such considerably. A simple manual recovery can cost as
a discharge were viewed as insufficient for such a little as US$ 0-37 per gallon or US$ 108-78 per tonne.
damaging spill. It thus gave impetus for OPA'90. Today Shore line cleanup, wild life rescue and rehabilitation
Violators can be prosecuted for a misdemeanour if the etc., add significantly to the cost, making it almost US$
discharge is done negligently with penalties of 297 per gallon or US$ 87,111 per tonne. In the
imprisonment up to one year and or fines up to US$ February 1996 spill of Sea Empress in which 72,361
~5,0?0 per day of violation. If done knowingly, tonnes were spilled in Milford Haven, UK, the cost
Impnsonment could be up to three years and or fines came to US$ 18-32 million or about US$ 0-86 per
up to US$ 50,000 per day. gallon or US$ 253-23 per tonne.

OPA'90 deals not only with pollution as a result of In conclusion, I wish to say that 40 years after
maritime transportation, but also pollution from oil OILPOL'54 marine pollution has become a major
facilities producing oil at sea. It encompasses cause for concern in the international community. A
prevention and response as well as liability and formidable and complex array of international
compensation. It sets new requirements for vessel national and regi ona1 regulatory regimes have bee~
construction, crew licensing and manning. Itmandates put in place for ship operations, with serious fines,
contingency planning, enhanced federal response detentions, imprisonment and even vessel confiscation
capability, enhanced enforcement authority and for pollution incidents. All this has had a profound
increased penalties and creates new research and and positive effect on the number and quantity of spills
as well as in the way oil is now transported globally.

Chapter 8


by Mr. P. Ander~n BA(Hons) FNI

PhiljJ Anden;on is a master mariner and head of loss prevention at The North of England P&l Association. He is also Vice President
of The Nautlcai InstItUte. He has written a nwnber ofbooks and guidanoe documents includli'lg "The Mariner's Guide to Marine
Insurance"jrom which extrC1fJts are reproduced in this chapf£r.

The nature of marine insurance their insurance policies or contracts, the master of the
INSURANCE EXISTS TO AVOID or minimise financial ship is very likely to become involved. Whether or
uncertainty. It provides individuals and organisations not the master takes the correct action at the correct
with financial protection against the outcome of events time in response to such an incident can often make
which involve monetary losses or liabilities which were the difference between the matter remaining a minor
not anticipated or predicted and over which they had inconvenience which is kept under control or else a
no effective control. In return for this financial major disaster which quickly gets out ofcontrol, usually
protection, the 'insured' individual or organisation involving the shipowner in considerable expense.
pays money, usually by way ofa 'premium', to another
individual or company, the 'insurer', and a policy or In reality, for any one incident there may be a
contract of insurance is drawn up to formalise the legal number of insurers involved. For example, ifthe cargo
relationship between those parties. has been damaged this may involve not only the cargo
insurer but also the shipowner's protection and
The Marine Insurance Act 1906 actually provides inderrmity (P&l) club and possibly the time charterer's
a definition of marine insurance at section 1: P&l Club. A collision may involve these insurers as
A contract a/marine insurance is a contract whereby the well as hull and machinery (H&M) underwriters,
insurer undertakes to indemnifY the assured, in manner and personal insurers of individuals, property underwriters
to the extent thereby agreed, against marine losses, that is to and so on.
say, the losses incident to marine adventure. The master may fmd that in law he has obligations
Much ofthe language used in marine insurance, and duties to many of the insured parties and
particularly where L1oyd's policies or institute clauses consequently to their underwriters - for example as
are concerned, is archaic. However, over many years, an agent of necessity. But his principal and indeed
the courts and the industry have given very specific employer - the shipowner - may find itself in conflict
meanings to particular words and phrases, such that with these other parties. If they can prove a breach of
those involved in the marine insurance business know contract ornegligence against the shipowner, they may
exactly what is meant and to change the wording be able to pursue an indemnity claim against it. It is
would lead to confusion and uncertainty. therefore crucial that the master has a clear
understanding of the different typ es of insurances
In the case of a shipowner or shipmanager, which may be involved in the many potential
insurance is usually confined to the financial accidents, incidents and liabilities with which he may
consequences of damage to its own ship, damage to be confronted during his time in command.
other people's property or death or injury to people.
A charterer's insurance requirements, particularly a To bring the whole issue of insurance into
time charterer's, are similar in many respects to those perspective and to consider its real. implications for
of the shipowner. A cargo owner's requirements are the ship master, it is important to appreciate the
usually confined to loss or damage to its cargo. enormous financial implication of claims. H&M and
cargo claims on the London insurance market alone
Crew members, supernumeraries, passengers, amount to more than US$lO,OOO,OOO,OOO each year.
pilots, stevedores, port officials and many other Annual P&l claims cost a further US$2,000,000,000.
categories of individuals who may find themselves on
board a vessel will usually require their own personal But what is the cost to the individual shipowneI1
insurance for injury, illness or death. Some risks are The answer is not straightforward as it depends on
virtually uninsurable such as freight, demurrage and the type, size and age ofthe vessel being considered,
a whole range of bad debts and disputes under the trade in which the vessel is involved and a number
charterparties, for example. of other relevant factors. However, the most significant
factor influencing what any p articular shipowner is
Ifthere are any accidents or other incidents during paying for insurance is the past claims record. A
the voyage involving any of the parties under any of shipowner with a bad claims record will be paying


many times more for insurance than one with a good The master and his officers and crew can have a
record. major effect on whether ornot there are accidents and
claims and also to protecting the shipowner's position
Figure 8.1 shows the daily operating budget of a by taking the correct action quickly if there is an
reefer vessel of300,000 cu.ft, and figure 8.2 shows the incident. It is therefore crucial that the master has a
percentage breakdown of claims by number derived good understanding ofthe various insurances involved
from The North of England P&l Association. Where in the commercial operation of the ship, of what he
tankers are involved, with the attendant high risk of can do to minimise the risk of accidents occurring and
pollution claims, insurance can typically reach 40% of what to do in the event that problems do arise.
of the operating budget. It is a major item and needs
to be carefully managed accordingly. The shipownet··s insw'ance requirements
The shipowner or ship manager has many different
Man<l3ement fee insurance requirements. Figure 8.3 identifies some of
6~ .
the more usual insurances.
The two most significant insurances for the
shipowner are H&M and P&l. An approximate
analogy could be drawn with the normal insurance
which may be considered for a motor car. P&l
insurance might equate to straight 'third party' cover
and, with the addition ofH&M, would constitute 'fully
comprehensive' cover.
Hull and machinery (H&M)
Hull and machinery (H&M) insurance covers the
ship itself and the equipment on board the ship
including the propulsion and auxiliary machinery ,
cargo handling and navigation equipment, and similar
items of plant. H&M may also cover the ship's
contribution to general average and salvage as well as
Figure 8. 7 Dally operatmg budget - reefer vessel 300, 000 cu..fi. 3/4 of the liability to the other vessel in a collision.

Protection and Indemnity (P&l)

P Oli U!,()rl "Q, During the course ofoperating ships, a shipowner
can incur liabilities towards all manner ofthird parties.
Protection and Indemnity (P&l) insurance provides
this third party liability cover. P&l also covers a variety
of other losses which a shipowner may suffer and
which may not be insured elsewhere, although there
are a number of specific exclusions from cover.
A shipowner may also have additional insurance
requirements depending very much upon the type of
vessels involved, and the trade or use to which the
vessels are being put. For example, a shipowner
operating a fleet of container ships may require
insurance cover for the containers themselves. Some
of the more usual additional insurance could include
Collis ions ?,k GA 1% the following.
Freight, demurrage and defence (FD&D)
Figun 8.2 Percentage breakdown o/claims by number · source
North of England - Po/icy Year 1998
A shipowner is exposed to a number of liabilities
or losses for which it does not have insuranc e cover.
Examples include disputes under charterparties and
In order to keep insurance premiums as low as sale and purchase of ship disputes. Freight, demurrage
possible, shipowners usually take ever larger and defence (FD&D) cover does not provide insurance
'deductibles'. This is the part of any claim which the for these risks , but, rather, provides a legal costs
shipowner insures out of its own resources and may insurance. It covers the cost of providing legal and
amount to many tens or even hundreds ofthousands technical support and assistance to defend or prosecute
of dollars . In addition to any human suffering , a wide range of uninsured claims and disputes. Many
inconvenience or annoyance an accident or claim may P&l Clubs offer FD&D as an additional class of
bring, it can also prove to be financially disastrous for insurance available to its members. There are also
the shipowner. independent FD&D associations.

Strike insurance Voyage charterers who own the cargo - which is
Strikes by stevedore labour, ships' officers and crew often the case in trading bulk commodities such as oil
or others who can disrupt the normal working of the - would also be interested in cargo insurance.
ship can have devastating financial consequenc es.
Strike insurance is available to alleviate the serious The cargo owner's insurance
losses which may arise from strikes. requirements
The cargo may be owned by the charterer or even
War risks the shipowner but, in the majority of cases, belongs to
Ifa vessel finds itselfin a war zone or other area of a third party. Whoever owns the cargo would usually
hostilities, the normal H&M and P&l insurances are
arrange for insurance cover on the cargo to protect
likely to be suspended. War risks insurance provides themselves against loss or damage as well as their
the shipowner with continuity of cover as required. contribution to general average and salvage. If the
The charterer's insurance requirements cargo sale contract was on cost, insurance and freight
Dependant upon the terms and conditions of the (CIF)terms, then the seller would usually arrange for
charterparty, a charterer may be exposed to many the insurance. On free on board (FOB) terms, it is
similar risks and liabilities as a shipowner. This is usually the buyer who insures.
particularly the case with time charterers. The important point for masters to note is that,
It is unlikely that the charterer will be exposed to even though a cargo owner may have insured the
liabilities with regards to collisions or pollution or cargo, it (or its insurer under subrogated rights) can
damage to third party prop erty or personal injuries to pursue an indemnity claim against the carrier - usually
the crew, for example, but may very well find that it the shipowner but possibly the time charterer - if the
has an exposure to cargo claims. cargo is lost or damaged while in the carrier's custody.
Under Hague or Hague-Visby Rules or similar carriage
A time charterer can in fact take out full 'P&l' cover ofgoods by sea acts, carners can raise various defences
with a P&l Club and be provided with the same cover to such claims provided they can show they exercised
as a shipowner member - although the method of due diligence to make the vessel seaworthy and that
underwriting will be different. An unusual situation they properly cared for the cargo.
arises with a time charterer's P&l cover in that the
time charterer may include damage to the ship in its If the cargo owner or subrogated cargo underwriter
P&l cover. This is something which is specifically is successful in its claim against the carrier then the
excluded as far as a shipowner member ofa P&l Club shipowner/charterer should be covered for such
is concerned. As far as the shipowner is concerned, liabilities through its P&l Club. It is important,
then obviously damage to his own ship is covered however, to recognise the important distinction
under the H&M policy. The reason a time charterer between what cargo underwriters cover and what P&l
may decide to take this cover through a P&l Club is Clubs cover - P&l Clubs are liability underwriters,
that, as far as the charterer is concerned, the ship is not cargo insurers.
another piece of third party property. If the ship is The principles of marine insurance
damaged as a result of some negligence on the part of
Underpinning every contract of marine insurance
the charterer - say because of some badly stowed
that is written in England and/or is subject to English
cargo shifting - then the shipowner may have a valid law is the Marine Insurance Act (MIA) of 1906.
claim for compensation against the charterer. Specifically, this Act applies to H&M, P&l and cargo
In a similar way, although it is not quite as common, insurances and at section 3 it describes how every
a charterer may also require FD&D insurance, war lawful marine adventure may be the subject of a
risks insurance and strike insurance but not usually contract of marine insurance. Selected sections are
H&M. considered and they provide:

Hull and machinery War risks


Freight, demurrage
and defence FD&D
Ship owner Strike

Protection and Loss of hire

indemnity P&l

Figure 8.3 'IYpical insurancesjor a ship owner


3, (1) Suhject to the provisions ofthis Act, every lawfol attributable to that unseaworthiness, then the insurer
marine adventure may be the subject ofa contract may refuse to pay the claim. But exactly who is the
ofmarine insurance. 'assured'? Is the knowledge ofthe master, for example,
(2) (a) Any ShIP, goods or other moveables are exposed sufficient to implicate the shipowner? The answer,
to maritime perils. Such property is in the under English law at least, is probably no. However,
Act referred to as 'insurable property'; with the rep orting requ irements of the safety
(b) The earning or acquisition ofany freight, management systems of the ISM Code and the
passage money, commission, profit, or other appointment of the designated person ashore, it may
pecuniary benefit, or the security for any become increasingly difficult for a shipowner to argue
advances, loan or disbursem2nis, is that it did not know of the unseaworthiness and had
endangered by the exposum of insurable no reasonable means of knowing. Of course, if there
property to maritimeperils; is a failure to make the necessary reports, then that is
(e) Any ilability to a thtrdparty may be incurred likely to constitute a serious breach of the ISM Code
by the owner of, or other person Interested in requirements.
or responsible for, insurable property, by
If there was a breach of section 39(5) of the MIA,
reason ofmaritimeperils.
then not only would the shipowner run the risk of
losing its P&l cover but it may seriously risk losing its
'Maritimeperils'means the perils consequent on, or
incidental to, the navigation ofthe sea, that is to say, perils
right to limit its financial liability in certain
oflhe seas, fire, war penis, pirates, rovers, thieves, captures,
seizures, restraints, and detainments ofprinces and people, There are a number of other underlying basic
jettisons, barratry, and anyotherpenl, e,therofthe ltke kind principles of most marine insurances of which the
or which may be deSignated by thepolicy. master should be aware. Firstly, it would usually be a
strict condition that the vessel must be classed with
Section 39(5) on seaworthiness would usually apply
to H&M and P&l insurance though the whole section an approved classification society and that class is
maintained. This does not necessarily mean that the
is reproduced here since a number of the other
policies, such as cargo insurance, may need to be classification society actually has to cancel the
classification - simply for a situation to exist which
considered under one of the other sub-sections:
would have led to withdrawal of class would be
39. Warranty oflJeaworthiness ofShip sufficient.
(I) [12 a voyage policy there is an implied warranty
It is also usual that insurance cover may cease if
that at the commencement ofthe voyage the ship
the shipowner does not comply with certain
shall be seaworthyforthe purposeoftheparticular
adventure insured.
international conventions, in the form ratified by their
(2) Where the policy attaches while the ship IS in port,
flag state administration - for example the SOLAS
there is also an implied warranty that she shall, at
convention. Indeed many insurers have made it a
the commencement ofthe risk, be reasonably fit to
specific requirement that relevant vessels must have
encounter the ordinaryperils oflheport.
valid ISM safety management certificates (SMCs) and
(3) Where the policy relates to a voyage which is
the operating company a valid document of
performed In different stages, during which the
compliance (DOC). This probably also extends to
ship reqUires difforent kinds of or forther
actual implementation and maintenance of the safety
preparation or equipment, there is an implied
management system (SMS) of the ISM Code.
warranty that at the commencement ofeach stage
the shIP is seaworthy in respect of such preparation The ISM Code will be the benchmark against
or equipmentfor the purpose ofthat stage. which such things will be measured in the future and
(4) A ship is deemed to be seaworthy when she is there may well be cases whereby shipowners are
reasonably fit in all respects to encounter the considered to have failed to act as a prudent insured
ordinary perilsofthe seaoftheadventure insured. if they have not been maintaining the recruitment!
(5) In a timepolicy them is no implied warll2nty that employment procedures of their SMS.
the ship shall be seaworthy at any stage of the
adventure, but where, with the privity ofthe Hull and machinery insurance
assured, the ship is sent to sea in an unseaworthy The standard perils covered by the ITC (Hulls)
state, the Insurer is not liable for any loss 1.10.83 policy are set out in clause 6 of the policy. It is
attributable to unseawo rthiness. worthwhile separating these risks into two categories:
Section 39(5) basically means that, if the insurer
can demonstrate that the ship was 1U\Seaworthy when [Footnote: For a detailed discussion of related issues see
it put to sea and that the assured had positive Anderson P. The ISM Code -A Practical Guide to the Legal
knowledge or 'turned a blind eye' to facts which and Insurance Implications' LLP Limited, 1998, ISBN
rendered the ship unseaworthy and the loss was 1 859786219].

Basic perils - set out in clauses 6.1.1 to 6.1.8 An explanation as to why H&M only covers three-
inclusive. fourths in this so-called 'running down clause' (or
1nchmaree' perils - set out in clauses 6.2.1 to 6.2.5. RDC) is provided later dealing with P&l Club cover.
The P&l Clubs tend to cover the remaining RDC and
Basic perils it was this unusual split ofthe collision liability, which
6.1 This insurance covers loss ofor damage to the partly led to the formation of the P&l Clubs.
subject matter caused by:
6.1.1 Perils ofthe sea, rivers, lakes or other navigable Also of relevance to the P&l Clubs is section 8.4
waters. of the ITC (Hulls) - 1.10.83 policy which sets out
6.1.2 Fire, explosion. specific exclusions. Because they are excluded under
6.1.3 Violent theft by personsfrom outside the vessel. the H&M policy, they are usually included under the
6. 1.4 Jettison. P&l cover. Section 8.4 reads:
6.1.5 Piracy.
8.4 Provided always that this Clause 8 shall in no
6. 1.6 Breaking ofor accident to nuclear installation
case extend to any sum which the asswed sholl
or reactors.
pay for or In respect of:
6.7.7 Contact with aircraft or slm ilar objects, or objects
8.4.1 Removal or disposal ofohstructions, wrecks,
falling therefrom, land conveyance, dock or
cargoes or any other thing whatsoever.
harbour equipmlmt 0 r installation,
8,4,.2 Any real or personal property or thing whatsoever
6.1.8 Earthquake, volcanic eruption or lightnmg.
except other vessels or property on other vessels.
Indutulru perils 8.4.3 The cargo or otherproperty on, or the engagements
62 The insurance covers loss of or damage to the of the insured vessel.
subject matter inswed caused by: 8.4.4 Loss oflife, personal Injury or illness.
6.2.1 Accidents in loading, discharging or shifting cargo 8.4.5 Pollution or contamination of any real or
orfuel. personal property or thing whotsoever (except
6.2.2 Bursting of boilers, breakage ofshafts or any other vessels with which the inswed vessel is in
latent deftct In the machinery or hull. collision or propelty on such other vessels).
6.2. 3 Negligence ofmasters, offICers. crew and pilots.
6.2.4 Negligence of repairers or chalterers provided such
Another major cover provided under the H&M
repairers are not an assured hereunder. policy is the vessel's proportion of general average
6.2.5 Barratry ofm aster, officers and crew, provided
(GA) and salvage and there would usually be a
such loss or damage has not resultedfrom want
requirement that the adjustment of general average
of due diligence by the assured, owner or would be in accordance with the York Antwerp Rules.
managers..... .
The other contributing parties to general average and
salvage would be the cargo owner/cargo underwriter
There is also an additional clause, which is included and possibly time charterer's bunkers if their property
here for reasons of completeness: was saved, and possibly freight.
6.3 Master, ojficen, crew orpilots not to be considered Ifan accident or incident does occur which is likely
owners withm the meanIng ofthis Clause 6 to result in a claim being made under the H&M policy,
should they hold shares in the vessel. it is very important - and probably a condition of
cover - that the underwriter should be advised. It is
Other clauses cover accidents in loading, quite normal still to see in the policy terms that, ifthe
discharging or cargo handling.
vessel is abroad, then the nearest L1oyd's agent should
Section 8 of the policy covers certain liabilities be contacted.
arising out of collisions - the relevant part reads as Insurances are usually warranted 'class
follows: maintained'. Also it is usually a condition of cover
8.1 The underwriters agree to IndemnifY the Assured that the class does not change during the period of
for three-fourths ofany sum or sums pald by the insurance. Similarly, the ownership of the vessel must
Assured to any otherperson or persons by reason not change during that period. Any of these events
ofthe Assured becoming legally liable by way of could mean that the insurance becomes void.
damages for:
Of special relevance and interest to the master and
8.1.1 loss ofor damage to any other vessel orproperty
those on board is a duty on the assured (i.e. the
on any other vessel. shipowner) to take such measures as may be
8.1..2 delay to or loss ofuse ofany such other vessel or
reasonable for the purpose ofaverting or minimising
property thereon. a loss which would be recoverable under the H&M
8.1.3 general average of salvage of or salvage under policy. This duty is usually referred to as 'sue and
contract of any such other vessel or property
labour'. Ifsteps to minimise, reduce or avoid the loss
thereon, .....
or furt.her damage are not actually successful but are
reasonable and taken in good faith, then the losses -


even though they may now exceed what they would Liabilities in respect of people.
have been ifno steps had been taken - would still be Liabilities in respect of cargo.
covered under the policy. Liabilities in respect of ships.
Protection and Indemnity insurance P&l insurance liabilities - people
The scope of cover provided by anyone P&l Club A shipowner has a general duty of care towards
member of the International Group will be almost anyone who comes on board its ship or even finds
identical with the cover provided by any other themselves in proximity of the ship. It must provide a
member club, although the specific wording may vary safe access to and from the ship, it must not allow
slightly. The reason for this is that all the clubs are unauthorized people to wander around the ship, it
sharing in the larger claims through the pooling must provide safe routes around the ship as well as a
agreement and also in the cost of the reinsurance safe work place and generally a safe environment
contract. It would therefore be unfair and unworkable where all reasonable steps have been taken to prevent
ifeach club was covering different risks and liabilities. people being injured. If the owner fails in this duty of
care and someone is injured as a consequence then,
In addition to the heads of risk specifically provided the claimant can demonstrate that the owner
identified in the rule book, the club also covers the was in some way negligent, they will be entitled in
costs of correspondents, lawyers, surveyors and other many jurisdictions to bring a claim for damages against
experts who may be needed to investigate or otherwise the owner.
handle and deal with a particular problem.
Such people might include members of the crew,
Set out below is a list of the heads of cover passengers, supernumeraries and third parties such as
specifically identified by a typical P&l Club: stevedores, pilots, port officials, P&l surveyors and
Liabilities in respect of seamen. even people who should not even be on board such
Liabilities in respect of supernumeraries. as stowaways. In addition to this general obligation of
Liabilities in respect of passengers. a duty of care, a shipowner will also have specific
Liabilities in respect of third parties. contractual obligations to certain categories of people
Stowaways. such as the crew under the relevant crew contract and
Diversion expenses. passengers under the passenger ticket contract.
Life salvage. Crew contracts differ widely in the conditions of
Person in distress. servic e offered and this includes compensation
Quarantine. payments in respect of illness and injuries suffered.
Liabilities arising from collisions. Passenger contracts may include the terms of an
N on-contact damage to ships. international convention such as The Athens
Damage to property. Convention, which sets out the respective
Pollution. responsibilities and liabilities including financial limits
Wreck removal. ofliability .
Contracts, indemnities and guarantees. The P&l Club will cover the shipowner member
Liabilities in respect of cargo. for most liabilities to people in negligence and in
General average. contract, as well as under certain domestic laws and
Fines. statutes such as health and safety at work acts, or the
Legal costs, sue and labour. Jones Act in the US. It is essential that the P&l Club
Risks incidental to ship owning. managers be given the opportunity of reviewing the
Special cover. respective contracts prior to agreeing financial terms
Special cover for salvors. for the insurance.
Special cover for containers.
Special provisions for charterer's entry. In addition to compensation to the injured
individual or his or her family if deceased, along with
The percentage breakdown of claims under the all the hospital and other medical bills, the club will
different liability categories will vary from club to club also reimburse the shipowner for the costs of any
and will be influenced by the membership profile of necessary repatriation expenses of the injured person
the particular club. For example, a club with a large and the costs of sending out a substitute. Neither the
tanker entry may show a relatively large proportion shipowner nor its P&l Club operate private health
of pollution claims and a club with a large passenger insurance although the extent of cover being provided
ship entry may show a relatively large number of in some crew contracts could be viewed by some as
passenger injuries. getting very close to that position.
The above list of liabilities can be shortened since There may also be other incidental expenses which
most ofthe liabilities covered by a P&l Club can probably the shipowner may have incurred such as the costs of
be included under one ofthree general headings: fuel, wages and other expenses while diverting to land

a sick or injured individual. In certain circumstances To understand exactly what sort of cargo liabilities
the club may also cover loss of or damage to the the P&l Club will be covering it is worth looking at
personal property of the crew if the shipowner has what article Ill, rules 1 and 2 actually say:
such a liability towards its crew.
Article 111
Another important and significant head of claim
Rule 7. The carrier shall be bOW'ld before and at the
which could fall into the category of liabilities in
beginnmg ofthe voyage to exercise due diligence to:
respect of people and which is becoming an
(a) Make the ship seaworthy.
increasingly difficult and expensive problem to deal
(b) Properly man, equip and supply the ship,
with is that of stowaways. The P&l Club would usually
(e) Make the holds, refngerating and cool chambers,
expect to see evidence that the member has taken
and all other parts ofthe ship on which goods are
reasonable steps to prevent stowaways coming on
carried, fit and safefor their reception, camage
board and to detect them prior to sailing.
Subject to that caveat the P&l Club will cover a
member for the direct costs incurred in having the Rule 2. Subject to the provisions ofarticle IV, the carrier
stowaways on board as well as the costs of supplying shatlproperly and carefolly load, handle, stow, carry,
guards, when necessary, and the expenses involved keep, carefor, and discharge the goods carried.
in repatriating the stowaways back to their home The obligation in both these cases is one of
countries. Sometimes this process ofrepatriation can 'reasonableness'. It is not a strict obligation of
not only be very expensive but also extremely seaworthiness but the shipowner, usually through the
frustrating when the stowaways have hidden or lost activities of the master, officers and crew, must show
their identity papers, will not cooperate by declaring that they did all that was reasonably and realistically
their true details such as name and nationality, and possible to check and ensure that the ship was in all
where ports and countries ofcall will not assist - which respects seaworthy and in a suitable condition to load
is becoming increasingly common. Sometimes the ship the intended cargo.
is even fined for having the stowaways on board, but
usually the club would cover such a fine. The most common types of problem encountered
which lead to cargo damage are:
Liabilities with respect to cargo
The first imp ortant point to realise is that neither Leaking hatch covers and ventilators.
the shipowner nor the P&l Club is a cargo insurer, Dirty or inadequately prepared carrying
and nor is the club offering cargo insurance to the compartments.
shipowner. The prudent owner of cargo will need to Inadequate ventilation.
insure its cargo properly. However, if the cargo Cargo shortage.
becomes lost or damaged while in the custody of the Cargo in "apparent good order and condition"
carrier, usually the shipowner, then the carrier may which is not so.
very well have to compensate the cargo owner unless
it can bring itselfwithin one of the exemptions of the Whereas there will be liabilities to be considered
Hague-Visby Rules, for example. between the ship owner and the cargo owner under
the terms of the contract of carriage evidenced by the
The cargo owner may not wish to have the trouble bill of lading, there will also be various obligations
of pursuing a claim against the carrier in the name of between the shipowner and the charterer arising under
the cargo owner. This right is known as subrogation. the terms of the relevant charterparty. In many cases,
if a shipowner is found to have a liability towards a
The majority of cargo claims are brought against
cargo owner, or subrogated cargo underwriter, under
carriers by subrogated underwriters. These cargo
the terms of the contract of carriage evidenced by the
claims are frequently dealt with by recovery agents
acting on behalf of the cargo underwriter and the P&l bill oflading the shipowner may very well have a legal
Club claims handler on behalf of its members. indemnity claim against the charterer under the
charterparty .
Under regimes which have incorporated the Hague
or Hague-Visby Rules into their domestic legislation, Consequently the shipowner would make a
often under a carriage of goods by sea act (COGSA) or recovery from the charterer rather than from the P&l
as part of their national commercial code, there are a Club. Alternatively, a charterer may be considered to
series of obligations imposed upon the carrier. Article be the legal carrier under certain bills oflading and it
Ill, rules 1 and 2 of the Hague-Visby Rules set out the may be the charterer which has to deal with cargo
most important obligations and it is a failure on the part claims in the first instance. It may therefore be the
of the carrier which leads to most of the cargo claims charterer which brings the indemnity claim against
handled by P&l Clubs. Ifeither of these rules are not the shipowner under the terms of the charterparty.
complied with then it is very unlikely that the shipowner Under normal circumstances the charterer cannot take
can rely upon the long list of defences which are set out advantage of the shipowner's P&l cover but rather
in article IV, rule 2. would take out its own, independent, cover.


There are numerous charterparty forms but often If the shipowner has accepted a so-called 'letter of
there will be provision whereby the charterer has a indemnity' (LOI) to issue 'clean' bills oflading, then
responsibility with regard to the loading and stowing it could try and recover under that LOI. But if the
of the cargo. For example, in a GENCON Voyage shipper or charterer refused to honour their promise,
charterparty form, there is a 'free in and out stowed there is little the shipowner can do. The courts will
and trimmed' (FIOST) clause, meaning that the not recognise LOIs as having any validity since they
charterer is undertaking these functions and not the came into existence to perpetrate a fraud and the
shipowner. In time charters such as the NYPE form shipowner is implicated in that fraud. It may therefore
'charterers are to load, stow, trim the cargo at their have to bear the loss out of its own resources and also
expense'. Again this is a charterer's operation and, as lose its P&l cover.
such, is likely ultimately to involve its liability ifit does In addition to describing the apparent order and
it wrongly or badly. Charterers can, and time condition of the cargo, the bill oflading will also state
charterers frequently do, take out their own P&l cover the date when the cargo was loaded. This date may
primarily to provide themselves with liability be crucial under the terms of the sale contract. If the
insurance cover for these risks. date has not been correctly stated and consequences
One of the most frequent problems which arises arise, then the shipowner is likely to be liable to
with the carriage of cargo, giving rise to potential compensate the cargo owner and may also lose its P&l
claims and the risk ofa shipowner losing its P&l cover, cover.
is where cargo is loaded on board not in 'apparent It is not possible to go into too much detail in this
good order and condition' but so-called 'clean' bills chapter, but more information is contained in the book
oflading are issued. The Mariner's Guide to Marine Insurance. For example,
deviation can give rise to claims and there are different
The bill of lading performs a number of different
legal rules applying carriage requirements. General
functions. A very important and fundamental function
Average is usually covered by the H&M policy but
is as a receipt for the cargo. To comply with the can be a P&l concern if the ship was unseaworthy at
requirements and obligations of the Hague-Visby the commencement of the voyage.
Rules, or similar, it should describe the apparent order
and condition of the cargo at the time ofloading and Also, ifthe cargo interests simply refuse to pay their
also state the number ofpieces or weight of the cargo. contribution then that would be a bad debt - for which
the shipowner would not have any insurance cover.
As a receipt it will be given to the shipper of the However, ifthe shipowner did have FD&D cover then
cargo, which will then use the bill oflading in another the FD&D lawyers may assist the shipowner with the
way: as a document oftitle or negotiable instrument. debt recovery exercise.
Under the contract of sale which will have been
negotiated between the buyer and the seller of the Liabilities in respect of ships
cargo, there will have been established, in most cases, It could be said that P&l insurance covers those
an irrevocable letter of credit (LaC) within an risks which have not been covered under the H&M
international banking system. Under the LaC the policy. To some extent this is true and particularly so
seller will be paid for the goods provided it produces when consideringrisks sp ecifically relating to the ship
certain documentation in a particular form. This will itselfin contrast to risks related to people and cargo.
inevitably require a bill oflading, which will confirm Most P&l Clubs assume that their members will
that: be contracting for their H&M cover on Lloyd's Marine
The goods have been shipped on board a Policy with Institute Time Clauses (Hulls) - 1.10.83
particular ship at a particular port and bound for or similar. However, whereas these particular H&M
a particular port. policy terms are very popular, shipowners will make
The goods were loaded by a particular date. their own choice as to the terms and policy under
The goods were in apparent good order and which their hull and machinery risks are covered.
condition, or in such a condition as allowed under There are other popular H&M policy terms in
the terms ofthe Lac. place in other insurance markets around the world
A particular quantity had been loaded. such as, but not limited to, Scandinavia, Germany and
the US. These may differ significantly from the
The buyer of the cargo is thus relying on the
standard forms used on the Lioyd's market.
statements in the bill oflading when handing over its
money to the seller and, if these statements It is extremely important for the shipowner to know
subsequently turn out to be inaccurate or untrue, then what is covered under its H&M policy for two related
the shipowner will have to compensate the cargo reasons. Firstly, if certain risks are covered under the
receiver. If such a bill of lading was issued by the H&M policy then those same risks do not need to be
master or the shipowner (or with its knowledge) then covered under the P&l insurance. This reduced risk
the P&l cover may be prejudiced. should be brought to the attention of the P&l

underwriter, who should take it into account when cargo or for smuggling, for having illegal immigrants
calcul!iirJg the call level for that particular member. on board (e.g. an undeclared stowaway), as a
Secondly, within the rules of the P&l Club, there will punishment following a pollution incident and for
probably be a 'double insurance rule', which says that many other violations and offences. All of these fines
if a particular risk is covered under some other will be covered by P&l although the directors of the
insurance policy, then it is not covered by P&l. club may need to be satisfied that the members were
not privy to the incidents for which the fines were
Of course the master also needs to know the terms being levied. lt is possible under this particular head
of the H&M policy since, if there is an incident of risk that the P&l Club, rather than the H&M
involving the ship, he needs to know whether to call underwriters, may have to compensate the shipowner
in the P&l correspondent or the H&M representative. for the loss of its ship. This could arise if, for example,
The risks covered in this section include: customs or police found a large consignment of drugs
which were being smuggled on board the ship. As a
Collisions. consequence, and by way of a punishment, the local
Non-contact damage to ships. authorities or court confiscated the ship by way of the
Damage to property. fine or penalty.
Wreck removal. As stated, P&l cover is open-ended. Because of the
Towage. unique way in which the clubs are structured they can,
and do, respond to new risks and liabilities which arise
The extent to which a P&l Club will provide cover or changes in the law which may occur. The aim is to
for liabilities arising out ofa collision will depend very provide the protection the shipowner members of the
much upon the terms ofthe hull and machinery policy. club require during the commercial operation oftheir
Under the ITC (Hulls) - 1.10.83 H&M policy terms, ships. lfa risk or liability arises and, provided it is not
three fourths of the collision liability (three quarters specifically excluded and it is of a P&l nature, then
RDC) will be covered. The other quarter RDC would the claim can be referred to the board of directors of
be covered by P&L Damage to the shipowner's own the club under the omnibus rule for approval.
ship falls under H&M insurance.
Freight demurrage and defence (FD&D)
Another liability risk which is not usually covered The purpose ofFD&D insurance is to provide the
under the H&M policy, although it may be under member with cover for the enforcement of all proper
certain policies, is damage to third party property. Such claims and the defence of all claims improperly
damage can often arise when the ship comes into brought relating to:
physical contact with the third party property. For
example, the ship may run into a wharf, jetty or pier Freight, deadfreight and demurrage.
or hit the arm of a container gantry crane or a General average, insurance monies and salvage.
navigational marker buoy - p Ius an almost unlimited Breach of charter or contract of affreightment or
range of other so-called 'fixed and floating objects' hire.
(FFO) incidents. Detention through collision or any other cause.
The negligent repair or alteration or the supply of
Pollution is included here because many of the short, defective or improper outfit, equipment,
potential liabilities arising from a pollution incident bunker fuel or other necessaries.
are basically in respect of damage to third party Loading, stowing, trimming, or discharge of cargo.
property - except that in this case it is likely to involve The building, purchase or sale of the ship.
cleaning the property rather than rebuilding a physical Disputes with mortgagees of the ship.
structure. • Wrongful arrest.
lt is natural to think of thick black oil when the
Improper action by national authorities or similar
word pollution is mentioned, but there can be many bodies.
other different types of pollution - from chemicals H&M claims below deductible.
and garbage to smoke and hold sweepings. The P&l FD&D also covers legal representation at coroner's
Club provides insurance cover for most types of inquests, formal investigations or other inquiries into
pollution, including claims for damages, clean up and casualties, or the conduct of servants of the member.
fines. However, the financial level of cover available
within the P&l Club for oil pollution is limited at The actual cover provided by different FD&D
US$500,OOO,OOO. insurers may vary slightly from the above list; there
may be some additional areas specifically identified
During its employment a vessel or the people or some of the above may not be specifically
operating it may find themselves being fined for all mentioned. The various areas of cover identified may
manner of alleged or actual offences. These could also have restrictions imposed before cover is provided
include fines for failure to maintain safe working - for example, ifFD&D was assisting a member with
conditions, customs fines for short or over-landed a claim falling below the H&M deductible then the


member would need to demonstrate that the H&M them. The agent may also be used to relay advice of
deductible was set at a realistic and reasonable level. the incident to the shipowner or shipmanager.
However, some caution may need to be exercised
Responding to an incident - the crucial because the agent may find itselfin a slight conflict of
role of the master interest situation. If, as is often the case, the vessel is
Imagine a ship which has arrived at the discharge ,operating under a charterparty then the ship's agent
port, the hatch covers have been opened and discharge is likely to have been appointed by the charterer rather
has commenced. Damaged cargo is then discovered. than the shipowner. If the incident has arisen from an
Often the master on board the ship will be amongst alleged breach of the bill of lading contract by the
the first to be aware of the problem. Whereas the :shipowner, as carrier, this may also involve, for similar
master may be in a position to render some 'first aid' reasons, a breach of the charterparty contract. It may
measures to keep the situation under control, it is therefore be inappropriate for the charterer, via its
important that he recognises that he should advise his ,agent, to become involved in the investigation on
:shipowners or shipmanagers as well as the P&l Club board until the facts have been clarified and the
immediately in order that the necessary back up and .evidence collected.
:support can be provided. Once the immediate problem has been resolved
Figure 8.4 shows that there are a number ofpossible the extent of the damage has been minimised, the
routes which the master may take. He may initially '1uantum ofthe damage has been established, security
report the problem to the operations department at has been provided, ifnecessary, and the !hip has sailed,
the shipowner's office. The shipowner or shipmanager then each of the interested parties will assess its
may then establish contact with its P&l Club to advise respective position.
the club of the problem. There is no reason why the Prior to the vessel sailing the master should have
master should not contact the P&l Club directly but been working closely with the surveyor, lawyer and
this does not occur very often - it being more usual possibly consultant who were attending on behalf of
for the master to contact the local representative or the shipowner and its P&l Club to ensure that all the
·correspondent ofthe P&l Club. relevant evidence has been collected together and that
The master should have on board the list of any statements that need to 'be taken have been taken.
.correspondents of the particular P&l Club covering The role of the master and liis officers in this activity
that particular vessel. He should therefore have is crucial.
.available all the relevant details of the local The Mariner'!! Role in Collecting Evidence should be
correspondents. However, he may approach the local ·consulted for guidance on the types of evidence
,ship's agent, who will usually know who the local P&l required for the particular incident under
·correspondents are and how to communicate with consideration.


Shipowner or
shipmanager t

P&l club
!Local agent

·Local P&l
reps - ~
IP&I club

Figurfl 8.4 1mtiaJ rflporting options

Conclusion system of the ISM Code. Checks and inspection
Whatever the type of incident might be, whether should be done to exercise due diligence to make the
it is a P&l incident, FD&D or H&M, the matter will vessel seaworthy but records should also be kept of
need to be investigated to tJy to establish the cause all those activities which can then be used to
and the documentary evidence will need to be demonstrate, to a court of law if necessary, that the
collected and reports will have to be prepared. The due diligence was indeed exercised.
evidence and the reports prepared by the master and Almost as a by-product, the activity of creating
his team on board will be crucial if the shipowner and evidence as part of the running ofa ship in this way
the P&l Club are to be protected. will in fact make everyone more conscious of what
If the claims cannot be resolved amicably then that they are doing which, in itself, is a most powerful loss
documentation and the reports may have to be prevention tool.
produced in a court or before an arbitration tribunal
and the originator of that evidence, the master or References
officer may have to stand up and testify on oath that The Mariner's Role in Collecting Evidence, The Nautical
the information presented is accurate and correct. Institute, 1997.
The collection of evidence is not something which
is done just following an accident or problem but 1'heMariner's Guide to Marine Insurance, P. Anderson.
rather it is an ongoing exercise as part ofa well run The Nautical Institute, 1999.
ship. Log books should be properly maintained, Distance Learning Course in P&IInsurance, The North
records kept, reports made, and procedures followed of England P&l Association in conjunction with
both of the QA system and the safety management South Tyneside College UK.

Chapter 9


a brief summary of a book by Captain W. Vervloesem AMNI
prepared by Lt CdrJ.A. Hepworth RN Ret'd MNI

Captain Walter Vervloesem was born and educated in Antwe1p. After graduattonfrom the Antwe!p Maritime Academy, he was
employed by different BelgJan and Dutch shipping companies where he served on various types ofthlPS (general cargo/multipurpose
ships, reefer ships and gas carn'ers). After having gained sea experience as deck rfilCer in both deep sea and coastal service, he left the sea
in 1988 in t/o, rank ofcluefoff",,, on short-sea trade vessels,
He then decided to redirect his career and started as a man'ne surveyor in Antwerp where his activities subsequently comprised P&l
work, surveys on behalfofcargo and hull & machinery underwriters. Shortly after coming ashore, he became actively involved in
various types afship inspection programmes and ship surveys, comprising condition surveysfor several leading P&l clubs, H&1Yf
underwnters, pre-purchase inspections, flag state - and seaworthiness inspections.
He is presently a partner in IJyfCS, a well established suroey company in Antwe.rp with seven branch offic63 throughout Europe,
R=sia and Ukraine, and co-manages I/o, Antwe1p bosed head office, His special interesw include ship i""'Pections, ISM consultancy,
aCCident and damage investigation together with a wide range o/transport and cargo problems.
Captain Vervloesem JsfoW!ding chairman ofthe Belgian Branch if1he Nautical Instaute, whICh was established In AprJl 1998.

TIIE SIllP SURVEY AND AUDIT COMPANION, authored the survey in order to achieve the intended result. This
by Waiter Vervloesem, was published in April 2000 generally consists of a properly elaborated report,
by The Nautical Institute. It is a detailed and including the required infonnation amplified by a
authoritative publication on the work of the ship number ofuseful comments and consmctive remarks
surveyor and provides an enonnous range of checklists on the matters concerned.
for various situations.
'N ormally, principals will provide their
Captain Vervloesem's book can be used as a guide surveyors or inspectors with pro forma reports that
not only for training institutes, students and cadets, cover the most important items likely to be found
but by ship's staff as a reference for cross-checking aboard ships. It will be appreciated that these checklists
their own inspection programmes and in helping them and formats have a general character and not all items
to organise surveys and assisting inspectors in a proper can be covered, More specific inspection paths and
way, criteria against which an item needs to be checked or
tested are generally not mentioned and are left to the
Masters will be aware ofthe demands on their time discretion and professionaljudgement of the surveyor
from surveyors, It is useful, therefore, to have an in attendanc e.'
overview of what they are trying to achieve and how
best to prepare for their work. As the author's foreword The book contains many samples ofthese checklists
says: and a glance at them will help ship's staff to be aware
of what the surveyor may be seeking during a visit.
In the late nineteen eighties and partly as a result This should assist the master and officers to prepare
of a series of unexplainable bulk carrier losses, a wide for the swvey and to ensure it is ofleast inconvenience
variety of ship inspection programmes were worked and most benefit to all concerned,
out and existing programmes were expanded. The aim
ofthese various types of ship inspection progranunes Some examples of these checklists are shown:
was (and still is) to make an appraisal about the
Master's responsibility and authority (checklist for
condition ofa ship, to identifY specific areas of concern
ISM Section V) (figure 1.8.5 in the book)
and to provide those who initiated the inspection with
Example ofa port state inspection report (figure
infonnation which will help them in a decision making
1.8.16 in the book)
process, in advising their customers and clients. or in
Ship certificate index (figure 2.3.2 in the book -
detennining strategies and the way forward.
first three pages only)
'EveI)' type of ship inspection consists of a very Mooring and anchor equipment checklist (figure
complex process where by the ship inspector or auditor 26.1 in the book)
will need to focus on various shipboard procedures Steering failure checklist (figure 211.2 in the book)
and evaluate the condition of shipboard equipment Helicopter operations checklist (figure 211.17 in
and material. TIris requires careful planning and the book)
experience and surveyors or auditors will have to use Ship safety meeting minute format/guidelines
their organisational talents and flexibility throughout (figure 2,12.16 in the book)

Guidelines for audits ashore and on board
ISM Section V - Masters responsibility and authority

Details Yes No Comments ! remarks

Shore items
· responsibilities
Definitions of the master's duties,
and authority. a ..., ................................................................

· aware
Evidence that master is provided with and
of details regarding his function,
duties, responsibilities, authority. a ................................................................

· theStatement of the overriding authority of

master re-decision making in ship!
crew safety and environmental protection
related matters. a a ................................................................

· SRequest to master to implement the

& E P policy of the company on board
and motivating crew with respect to
S &EPmatters. a ................................................................

Statement and details re-observation of
requirements re-shipboard operations,
shipboard management and S & E P
matters (ref sections ofbook) ................................................................

· (min.
Request/procedures for reviewing SMS
I x!year) and reporting deficiencies. a a ................................................................

· Records of shipboard reviews of the SMS. -


· reporting
Evidence of immediate shipboard
of changed circumstances which
might adversely affect the S & E P. ................................................................

Ship items
· responsibilities
Definitions of the master's duties,
and authority. a ................................................................

· aware
Evidence that master is provided with and
of details regarding his fun cti on,
duties, responsibilities, authority.
Documented procedures for specific duties
delegated to officers under his command. • .•••..••••..••..••...•••.••••. u • . . __ · · · . . ··H •• · ••• ·· ••......•

• Statement of the overriding authority of

the master re-decision making in ship!
crew safety and environmental protection
related matters. 3 . ...............................................................

Figure TB,5 Checldislfor ISM Section V- Master's responsibility and authorilJ!

Guidelines for audits ashore and on board
ISM Section V - Master's responsibility and authority (continued)
Satisfactol)' ?
Details Yes No Comments / remarks

· SRequest to master to implement the

& E P policy of the company on board
and motivating crew with respect to
S & E P matters (i.e. signature of crew
confirming that company procedures
manuals have been read/understood). ................................................................

· Evidence re-specific measures to ensure

that procedures and instructions are
complied with during day to day shipboard
operations, shipboard management and
S & E Pmatters (checklists,job
instructions, etc.) J"" ................................................................

· Evidence that SMS is reviewed

(min. i xlyear) and deficiencies!
anomalies reported (Records of shipboard
reviews of the SMS). . ...............................................................

· re-changed
Evidence of immediate shipboard reporting
circumstances which might
adversely affect the S & E P. a ................................................................

Fi[!)ffe 1.8.5 Checklist/or ISM Section V - Master's responsibility and authority (contli"lue41

Using these checklists, and the many others in the process and the checklists mentioned in Waiter
book, masters can more easily prepare for the requests Vervloesem's book should be of assistance in seeing
and requirements of surveyors. For example, if life how the surveyor will be working out inspection
saving equipment is to be inspected, it is quicker and schedules by selecting from the required checklists or
more efficient if the gear is laid out beforehand. This parts thereof Furthermore the selected material might
saves time and also gives the ship's staff a good also serve as an "aide-memoire" during the execution
opportunity to practice with the equipment. ofthe surveyor audit.
Usually, the time window for inspection will Masters have a huge amount on their plate already,
be limited and the surveyor will have to work under so preparation for surveys, using Captain Vervloesem's
conditions of stress in order to complete his survey book as a guide, could make life slightly easier. The
prior to departure of the ship. Planning, organisation book is a vel)' worthwhile investment.
and flexibility play a key role in the survey/audit

Annex 4 to Part I
Example of a Port State inspection report

Concentrated Inspection Campaign on selected items in respect of

ISM Implementation

Inspection Authority: Port State Control

Port of Inspection: ...................................... .
Date of Inspection: ..................................... ..

Name of ship: .................................... . 1MO number: . . . . . . . . . . . . . . . . . . . . . . . . .

Ship type:........ . .......... Name of Company:. . ............... .
Flag of ship:...................................... Auditing body ifnot Flag state: ........................ .
Call sign: ...................................... .

Yes No

l. Is the ISM Code applicable to ship as of 117198? 0

2. ISM certification on board? 0 G

3. Are certificates and particulars in order? 0 G

4. Is Safety Management documentation (e.g. manual) readily 0 G

available on board?
Ref: Section 1.4 of the ISM Code

5. Is relevant documentation on the SMS in a working language 0 G

or language understood by the ship's personnel?
Ref: Section 6.6 of the ISM Code

6. Can senior officers identify the Company responsible for the o G

operation of the ship and does this correspond with the entity
on the ISM certificates?
Ref: Section 3 of the ISM Code

7. Can senior officers identify the "designated person"? o G

Ref: Section 4 ofthe ISM Code

8. Are procedures in place for establishing and maintaining contact o G

with shore management in an emergency?
Ref: Section 8.3 ofthe ISM Code

9. Are programmes for drills and exercises to prepare for emergency o G

actions available on board?
Ref: Section 8.2 of the ISM Code

10. Can the master provide documented proof of his responsibilities and o G
authority, which must include his overriding authority?
Ref: Section 5 ofthe ISM Code

11. Does the ship have a maintenance routine and are records available? o G
Ref: Section 10.2 of the ISM Code

Ship detained o
Do detainable deficiencies, iffound, indicate a failure of the Safety o
Management System?
Ref: § 3.3.2 of Provisional Guidelines

Paris Memorandum of Understanding on Port State Control

15 May 1996

Figure 1.8.16 Example ofa Port Stal£ inspection report


(Note: All certificates carried on board must be originals)


1.01 Certificate ofregistry indefinitely
(FAL Convention)
2.01 International loadline certificate 5 years
(LL Convention article 16)
Annual survey
2.02 lOP P certificate 5 years
Intermediate survey
Annual survey
Form "p.:' (supplement)
Form ''B'' (supplement)
(MARPOL 73n8 Annex 1 Reg. 5)
2.03Passenger ship safety certificate 1 year
(SOL AS 74/78 Ch. 1/12 as amended
by GMDSS amendments)
Exemption certificate
(SOLAS 74/78 Ch. 1112)
Safety certificate for special trade
passenger ships
(STP Agreement Reg. 6)
Special trade passenger ships
(SSTP 73 rule 5)
2.04Safety construction certificate 5 years
Intermediate survey
Annual survey
Record of construction and
equipment for oil tankers (supp.)
(SOLAS 74n8 Ch. 1112 as amended
by the GMDSS amendments)
2.05Safety equipment certificate 2 years
Intermediate survey
Annual survey
Form ''E''
(SOLAS 74/78 Ch. 1/12 as amended
by the GMDSS amendments)
2. 06 Safety radio certificate 1 year
(SOLAS 74/78 Ch. 1112 as amended
by the GMDSS amendments)

* N tJle: v~ and expiry dates JrUUI vaIY acconling ttJ cil'cu_ces

Figure 2.3.2 Ship certificate index

(Note: All certificates carried 0/1 board must be originals)

2.07 Dangerous goods manifest or
stowage plan for current voyage
(SOLAS 74/78 Ch. VII/5(5»
(MARPOL 73/78 Annex III Reg. 4-5
as amended)
2. 08Document of authorisation for the
carriage of grain indefinitely valid
(SOLAS 74178 Ch. VI/9)
2. 09Document of compliance with special 5 years
requirements for ships carrying
dangerous goods
(SOLAS 74178 Ch. 11-2/54.3)
2.10 Noxious Liquid Substances 5 years
Certifi cate
intermediate survey
annual survey
(MARPOL 73/78 - An 11 - Rl1.2)
2.11 SOPEPmanual to be approved
(MARPOL 73/78 Annex I Reg. 26) by administration
2.12 US Coast Guard Letter of 2 years yearly (mid-term)
Compliance inspections

3.01 Document of compliance specify type of ship
Initial survey 5 years copy on board
Annual survey ± 3 months
(SOLAS 74 Ch. IX Reg. 4.1-4.2)
3.02 ISM: between owenrs and
Marine management agreement present managers
3.03 Safety man agem ent c ertific ate original to be on
Initialsurvey 5 years board
Intermediate survey 2-3 years
(SOLAS 74 Ch. IX Reg. 4.3)


4.01 Cargo securing manual to be class/admin-
(SOLAS 74 Ch. VI Reg. 5.6) istration approved
4.02 Class automation 5 years
Annual class automation
(SOLAS 74 Ch. 11 - 1 Reg. 46)
A: Hull 5 years
special survey
continuous survey
intermediate survey
annual survey
• Note: VaHdity and expiry dates ~ ...ry tJecommg 10 circumstances
Figure 2.3.2 Sh1p certificate ",c/ex (contil'lU2d)


(N ote: All certificates carried on board must be originals)


B: Machinery 5 years
special survey
continuous survey
intermediate survey
annual survey
C: Refrigeration machinery 5 years
special survey
continuous survey
intermediate survey
annual survey
4.04Dry docking every 2 - 5 years
and 2x in 5 years
4.05 Exhaust gas boiler 2-5 years
4. 06In water survey only for intermediate
4.07 Inert gas plant 5 years
Annual survey
(SOLAS 74 Ch. II - 1 Reg. 62)
4.08 Oil fired boiler 2-5 years
4.09 Tail shaft 5 years
4.10 Thickness determination (hull) every 5 years after
first 5 years (first
survey after 10 years)


5.01 EPIRB check MMSI no. or
Hydrostatic release 2 years country code and
Battery expiry callsign or country
(SOLAS 74 Ch. IV Reg. 4.1) code and serial

5.02 Immersion suit certificate (approved type)

(SOLAS 74 Ch. III Reg. 7-30-33)
5.03Lifejacket certificate (approved type)
(SOLAS 74 Ch. III Reg. 7-30-32)
5.04 T P A certificate (approved type)
(SOLAS 74 Ch. III Reg. 30-34)
5. 05Lifeboat certificate/rescue boat 5 yearly test
launching appliances
5. 06Lifeboat falls renewed 5 years
Port and starb oard side

* Nole: Va6di~ "",1 expiry dales _y "ary "ccording to circumslJJnces

Figure 2.3.2 Ship certijlcate index (continued)

M. V: .._ .........................._................................................... Dtlle:..................................................... Port:..... _._. ___....................
1. Windlass (electro-hydraulic/steam)
2. Winch (electro-hydraulic/steam)
3. Capstan (electro-hydraulic/steam)

Fitted Condition
Equipment Provided Operational Good Fair Poor Remarks
(ILO 134 Art. 4 §3g)
Winch bed structure/structural integrity
Selftensioning devices
Wire/rope drums
Drum ends and whelps
Protection guards over moving parts
Platforms/operator stand
Platform/stand structure
Brake linings
.s ecuring pins
Adequafe lighting
{SOLAS 74 Ch. II-IReg 40lILO 134 Art 4 §3a)
For electro-hydraulic equipment
Piping arrangements
Drip trays/save-ails
Drip tray plugs
For steam driven equipment
Piping arrangements
Pipe insulation
{ILO 134 Art. 4 §3g)
Rope reels
Wire ropes/nylon tail
Insurance wire
Emergency towing wires
Spare ropes
Spare wires
Old man rollers
Panama leads
(ILO 134 Art. 4§3g)
Bow anchors
Stern anchor
Spare anchor
Anchor cables
Shackle marks
Securing chains
Devil's claw
Cable stoppers
Smit type I)racket and mooring chain
Hawse pipe covers
Bitter end release
Bridge indication of shackles paid out

State last date oftestmg Wmdlass Testmg due:

Winches Testing due:
Capstan Testing due:
State date ofturning anchor chains end for end .
Means of communication (talkback - portable VHF) FIgure 2.6.1 Mooring and anchor equipl17£nt checldlSt




01 Inform engine room 01 Steering gear room to be 01 Time/date ofincident (+ LT)

02 Inform master manned as per emergency 02 Exact position of sbip G
03 NUC lights/sbapes exhibited procedures 03 Current conditions G
04 Make appropriate sound signals G 02 Investigate situation G 04 Weather conditions & forecast G
05 Keep VHF watch 03 Record time, observations 05 Distance from coast/nearest
06 Follow switch over procedures and damage G land! nearest port G
and engage manual/emergency 04 Establish type of damage 06 Damaged machinery/equip·
steering as appropriate G (damage to steering gear ment(use proper terminology) G
07 Take way off sbip if necessary or loss/damage to rudder) G 07 State type of damage G
(inform engine room) 05 Inspect damaged items in 08 State extent of damage
08 Broadcast to other ships accordance with manu· 09 State cause of damage G
09 Pass vessel's position to facturer'sinstructions G 10 State if onboard repairs can be
RlO·Radio Room 06 State type of damage G carried out (makeshift or
10 Use bowthrusterfor course 07 State extent of damage G permanent) G
correcti ons G 08 Establish cause of damage 11 State if shore advice/assistance is
11 Check vessel's position at 09 Check if damaged i tern can required G
regular intervals & keep be repaired or is to be 12 State if spares are to be delivered
R/O·RIR informed replaced G onboard ::i
10 Check ifpermanent or 13 State if docking is required \J
temporary repairs can be 14 State time necessary for
carried out G onboard repair G
11 Check if required spare parts 15 Will vessel be able to proceed
are on board or fill out a store/ after repairs + ETA at port of
spare part order form G refuge or destination) G
12 Use correct and appropriate 16 Is vessel able to complete
terminology in accordance with current voyage? G
manufacturers instruction 17 Is towage/salvage assistance
manual. Make reference to required? G
page, section, # 18 State actual condition and keep
13 Ascertain whether repairs can be owner informed about progress G
carried out by ships crew or if 19 State iffurther problems are
shore assistance is required to be expected G
14 Check if other problems are to 20 List materials used for repairs G
be expected G 21 State coast station for radio
15 Consider all safety aspects prior contact or other means of
to carrying out repairs G communication G
16 Keep damaged parts onboard
for future reference G
17 Take photographs G
18 Make protest letter

Ftg;;.re 2.11.2 Steertng fatlure checklist


H. A B D
01 Define whether helicopter hook 18 Consider weather conditions G 01 Advise crew at landing area about 01 Reason for helicopter assistance G
r- handling or landing operations 19 Discuss most appropriate heading time/moment of landing G 02 Date and time of helicopter
will be involved G /speed with helicopter pilot G 02 Avoid shipping seas/sprays on landing and take-off G
02 Select the most appropriate hook 20 Prepare rope messengers for deck during landing manoeuvre G 03 Any anomalies during helicopter
2l handling/landing area (keep helicopter securing G 03 Inform deck crew to keep clear operati ons, such as dam age or
c deck strength in mind) G 21 Avoid intermittent discharge of rotors and exhausts G injuries G
Iri 03 Remove obstructions/secure
loose objects and equipment G
from pipelines/manifolds G 04 Give proper and clear signs to
pilot during landing manoeuvre G
04 Whether operations was
compl eted successfully G
22 (Gas tankers) Avoid emission of
04 Hoist pennant/windsock in gas/vapours on deck (when no 05 Ask pilot whether helicopter 05 Delays encountered on account
~O! conspicuous position
05 Establish communication between
G IGS is fitted)
23 (Tankers) Release pressure from
G should be secured
06 Keep detailed records of data
G of helicopter operations G

landing area and bridge
06 Establish communication between
ship and helicopter

cargo tanks (30 minutes before
helicopter operations)
24 (Tankers) Reduce IG pressure
time/course/speed! commun-
ications/anding time/reason for
helicopter operations/any
~ 07 Confirm when landing area is in cargo tanks G anomalies G
.....~§> ready for landing G 25 (Tankers) Secure tank openings
08 Ensure appropriate firefighting followingventingoperations G
~ equipment is readily available G 26 (Bulk carriers) Cease all surface

09 Keep firefighting squad ready for
10 Pressurise fire main and keep
ventilation to dry bulk cargoes
and batten down hatch covers
and access lids G


fire pumps running
11 Prepare medical assistance team
01 Agree take-off procedures with
and arrange hospital to receive
injured persons G helicopter pilot G
12 Prepare a rescue room G 02 Tune radio equipment and establish
13 Prepare rescue boat (ready for racio contact deck-bridge and
launching) G ship/helicopter G
14 Ensure emergency equipment is 03 Undo lashings and store them
readily available (crowbar, wire well away from the take-off area G
cutters, red emergency signal/ 04 Observe same precautions/
torch, marshalling batons) G guidelines as during landing
15 Arrange for proper illumination operations G
of deck area G 05 Record date and time oftake-off
16 Only allow necessary crew on and confirm operation successfully
deck/at landing area G completed G
17 Consider ship's course/speed G
M.V: ................_~............... ........... Date: .................Pori:. .......... u •••••••••••••••••••••

Persons attending the meeting:

Rank Name Signature
First Officer
Chief Engineer
Second Officer

Safety meeting started at:............................ hrs. and was completed at: ...................... hrs.

Meeting Agenda

01. Review previous minutes.

02. Discussion of outstanding items.

03. Trading/current trade safetylhealth hazards.

(cargo, ballast, bunker, stowage/lashing and securing operations) precautionary measures.

04. Deficiencies/damages to safety equipment and corrective action.

0,5. Discuss accident, hazardous occurrences, danger situations.

06. Safety information communicated to company.

07. Safety information received from company.

08. Planning of next drills and consideration of scenarios.

09. Discuss on board training issues.

10. Welfare and recreation items.

11. Safety related items proposed/introduced by non-team members.

12. Safety of riding crew, shore labourers, visitors.

13. Corrective actions to be taken.

File original minute as appropriate in ship's file G
Send copy to office/company G
Display copy on crew messroom notice board G
Display copy on notice board in officer's messroom G

Figure 2.12.16 Ship ,afry meenng mmuteJarmat/gwde/ines

Chapter 10


by Captain D. J.F. Bruce FNI, Senior Vice President - Europe, International Registries Inc.

Captain DavidJ.F. Bmce wentto sea in 1956 and, afterselVing as master with Canadian Pacific Steamships, took up shore employment
with the Milford H(!))en Port Authority. He h!J1l worked with marine administrations and shipping registnes since 1972, first with
Liberian Services Limited and then, after a period as C1Jie!Marine ~rveyor for the Isle of Man Government, he took up his present
position as Senior Vice PresIdent - furope with International Registries Inc., (IRl), in 1994.
lRI manages the maritime registries for Liberia and the MarshaIl Islands. In charge afthe operation of IRIs four European officrn,
Captain Brnce is responsible for 3afety inspections within Europe, Africa and the Middle East, handling ship registrations and, as
Senior Deputy Commissionerfor the MarshaU Islands Marine Admini8tration, attends MO meetingsfor them in that capacity.

Definition for the role of the flag state. One such convention is
The flag state is the country in which a vessel is the United Nations Convention on the Law of the Sea
registered and which has jurisdiction over that vessel which declares that each state may decide the
and the certification ofthe crew, including the master. conditions for entry onto its register. However, Article
The master must ensure that he is aware of, and 94 of the convention delineates the jurisdiction and
complies with, the requirements of the flag state control the flag state may assert over the administrative,
relating to the operation of his vessel. He should technical and social matters of vessels flying its flag as
cooperate with the flag state in any investigations and are necessary to ensure safety at sea. It establishes steps
in the making of any necessary reports. which may be taken by the flag state such as to ensure
the utilisation of qualified surveyors and the provision
Flag states and the shipmaster of proper navigational equipment on board vessels. It
The relationship between shipmaster and a flag also requires that appropriate manning be on board
state is one which is dictated by law, developed over and crew appropriately qualified.
the ages according to changing needs and the position
ofthe master. As all are aware, the master is the person A flag state's national legislation has, as its basis,
in command ofa ship - but such privilege also has its the provisions of international conventions - many of
responsibilities, and these are well detailed by flag state these having been adopted through the International
administrations. In taking command of a ship, the Maritime Organization (IMO). These international
master is the person appointed by the shipowner to conventions are adopted by the member countries of
take care of the owner's property and, as such, may IMO, and each government then undertakes to give
be appointed and removed from office by the effect to their provisions - by including them within
shipowner. His duties, responsibilities and authority the government's national laws, and by implementing
are therefore governed firstly by his contract of and enforcing the requirements of each such
emp loyment with the ship owner, by the general convention. However, whilst virtually all flag states
employment law of the country of the contract, and are members of IMO, their acceptance and
by the maritime law of the country in which his vessel implementation of international conventions are by
is registered. no means total. Complications arise where vessels of
countries not party to a particular convention still have
Why flag state? to comply with the provisions of that convention if
Vessels sailing on the high seas possess a national they are to be able to trade internationally. And, in
character usually granted by the registration of the that case, the master may have to rely upon the
vessel in the public records ofa state. This then permits national laws ofthe port state for guidance. However,
the vessel to fly the flag of and be subject to the laws international conventions are minimum standards, and
of that state. International law protects principles such many countries - or flag states • have additional
as that of the 'freedom of the high seas', but it also requirements or higher standards in their national
looks to individual flag states to enforce compliance legislation. These higher standards apply to a vessel
with safety and environmental requirements over the registered in that country.
national fleets under their jurisdiction. Hence the
concept of flag state control has been, traditionally, Certification of the vessel
the primary basis for the control of vessels. As proof that a vessel complies with the provisions
of international conventions, certificates are, after
The duties and responsibilities of the flag state are survey, issued to a vessel, by or on behalf of the flag
contained within a multiplicity of international state. Although the surveys in this connection are
conventions and regulations which set the parameters frequently carried out by classification society


surveyors, and the certificates issued by them, these However, the last half century has seen a rise in
certificates remain the responsibility of the flag state. the number of ship registers and in the popularity of
open registers. It is now very likely that a shipmaster
The number ofthese 'statutory' certificates required will be sailing on a vessel which is not registered in
to be carried by a vessel is ever increasing, and it is the country of his nationality. This has placed an
wise for the master to maintain a file of certificates additional burden upon the shipmaster, for no longer
with a separate list detailing the expiry dates of the need he only be aware of the laws of his own country,
certificates and the dates when the next surveys or the country which originally certificated him and
inspections are due. found him competent to be master, but he must also
On taking over command, the master should verify be aware of the laws of the country of registry of the
that the vessel's certificates are in order. These vessel- or flag state.
certificates are frequently the first items to be checked Whilst the basic responsibilities ofthe master and
by port state control inspectors, so it is vital that a requirements under the convention remain the same,
complete record is maintained. flag state administrations do have differing national
Due to the large number of certificates issued under legislation regarding the operation ofa vessel, and of
International Conventions, the permutations ofvessels which the master must have knowledge. It is therefore
required to be so certificated and the gradual incumbent upon the master to be aware of the
implementation ofthe Harmonised System of Survey particular National requirements of a particular flag
and Certification, it is not possible to give here an state prior to joining a vessel otherwise he might not
accurate listing ofrequired certificates. Ifin any doubt be able to operate the vessel to the requirements of
as to whether a vessel is required to be issued with a that flag state. This requirement is also contained
particular certificate, the master should refer to Annex within the STew Convention Regulation 1/10 which
3 of the SOLAS Consolidated Edition 1997, published states:
by IMO, which lists, in some detail, certificates and Measures shall be established to ensure that seafarers who
documents required to be carried on board and present.for recognition, certificates ,ssued under theprovisions
thereafter to refer to the applicable convention. ofregulaUons III2, II!!2 or II!!3, or issued under VIllI at
the management level, as defined in the STCW Code, have
CertifICation of the ma<lier an appropnate knowledge ofthe maritime legislation ofthe
Whilst the training of seafarers has been going on
administration relevant to thefoncnons they are permitted
for hundreds ofyears, it was only in 1978 that the first
to perform.
comprehensive international conference on the
training of seafarers was held. This gave rise to the Accordingly, it would not be acceptable for a
International Convention on Standards of Training master or officer to state on some future occasion that
Certification and Watchkeeping of Seafarers (STew) he was not aware of the national legislwon of the
which came into force in 1984. An extensive revision country of registry of his vessel. This is particularly
of the convention in 1995 is still being progressively important today with the implementation of the
introduced. International Safety Management (ISM) Code, where
maintenance of operational procedures is required for
The maritime law of the flag state will normally
both the Document of Compliance (DOC) and the
lay down the qualifications and certification (based
Safety Management Certificate (SMC) to remain valid.
upon the STCW Convention) required by the person
permitted to be master of a vessel registered in that For the master who did not study for, nor pass an
state. Also, as a result of these 1995 revisions to the examination held by the flag state, this knowledge is
STew Convention, it is required that the master (and obtained from the regulatory publications supplied by
officers) of a vessel hold certification issued by the the flag state. In some cases, applicants for officer
flag state administration. Accordingly, a master, in certification based upon equivalency, are required to
addition to probably holding certification issued by sign that they have received a copy of and are aware
his own national government, is required to hold of the national legislation relating to their functions.
certification (known as an endorsement) issued by the Such a declaration, for instance, is included within the
flag state of the vessel on which he is master. application forms for both Liberia and Marshall
Traditionally, a ship's officer, and subsequently a Islands certification. Therefore, on taking over
master would have been certificated by his country of command, the master must make sure that adequate
information regarding flag state requirements, is
nationality. He would be trained in accordance with
available on board.
that country's laws, would have a knowledge of the
maritime law of that country, and would have sailed It is important to realise that, whilst a state may
on vessels registered in that country. He would no issue certification to a person certifying they are
doubt also have been sailing to and from that same competent to be the master ofa ship, it is the flag state
country, in which it might be said that the ship was administration which issues the certification, or license,
based. for a person to be master ofa vessel registered in that

flag state. It has already been established that the 1) To 1tUlin.tain disciplilu on board tIu vessel and to
jurisdiction of the flag state applies on board that take all :ruch steps as are necessary and appropriate
vessel. (bearing in mind that the law ofthefolg state appUes)
Penalties which may be imposed for breaches of
Therefore, in disciplinary matters, the state which
discipline will be given in the laws ofthe flag state.
has issued the master's certificate of competency or
license shall alone be competent, after due legal 3) To tlS$ume responsibilityfor the receipt ofcargo by
process, to pronounce the withdrawal of such tIu vessel, stowage ofcargo on boardtlu vessel insofar
certificates, even if the holder is not a national of the as such stowage affects the safety or navigation of the
state which issued them. (Law ofthe Sea Convention, vessel, andfor tIu discluuge ofcargofrom the vesseL
Article 97). One anomaly to this is that, following such
a hearing, a certificate holder may have the certificate 4) To tlSSIOIfefull responsibilityfor the sqfety ofthe
issued by that flag state withdrawn, while still be able members oftlu crew andpassengers, ifany.
to retain certificates issued by other flag states. 5) To renaer assistance in the saving of life ana property
at sea.
What does the flag state require of a
master? 6) To tlSSIOIfefull responsibilityfor the lUlVigation of
Simply put, the master is responsible to the flag tluvessel
state administration for the safety of a vessel, and for This includes:
operating the vessel in accordance with the provisions The responsibility that the vessel will be fully
of all International Conventions to which the flag state and correctly manned with properly
is a party (such as SOLAS, COLREGS, MARPOL); certificated seafarers in accordance with the
other conventions, such as those developed through provisions of a Minimum Safe Manning
the International Labour Organization, to which the Certificate issued by the flag state.
flag state is also a party; and to that flag state's national Compliance with the Regulations for the
legislation. This national legislation is based upon the Prevention of Collisions at Sea.
intemational conventions as indicated above. That is Compliance with the appropriate sections of
the 'catch all', but some specifics are: the SOLAS Convention Chapter V
1) To enter inID shipping artieles with setIllfen: (including the necessity to have on board up
The master is responsible for the conduct and care to date charts and nautical publications for
the voyage; to maintain an efficient lookout
of the crew - responsible that all crew sign the
whilst at sea and to report ice sighted at sea,
Articles of Agreement and that the terms of this
agreement are maintained.
This places the master in the position of being 7) To see that the log books oftlu vessel are properly
both employer and employee. Whilst the master and I1£curately /upt
is employed by the owner, he employs the Here, a master must be guided by the specific
seafarers on board his vessel and, therefore, also requirements of the flag state. Some states have
has the right to discharge them. In this, he is no their own Official Log Book which must be on
different from a plant manager ashore. board and utilised. Other states require that
specific entries are made in the Bridge Log Book.
Flag states will normally have their own form of Regardless, such entries will nearly always include:
shipping articles - the need for which is provided
in ILO Convention No 22. These Articles of Change of command.
Agreement constitute an employment contract A record of offences and penalties imposed
and it is up to the master to ensure that their (see para 2 above).
provisions are complied with by the crew Births, marriages or deaths. Note that under
members. It is of course a two way contract. It the laws ofcertain flag states, the master may
must also be ensured that the obligations to the also marry passengers or other persons on
seafarers are complied with by the company and board; issue birth certificates for children
by the master. born at sea; or bury persons who have died
on board the vessel while at sea.
The master is permitted to make entries in the A record of accidents or incidents affecting
Seafarer's Official Discharge Book or Record Book the vessel or persons on board. This includes
issued by the flag state, or may issue Certificates major incidents such as collisions, groundings,
of Service testifying to that seafarer's service on fires, equipment failures, spills of hazardous
board a vessel. In the event of a dispute with the and/or polluting substances, personal injuries
seafarer with regard to contractual obligations, the or deaths on board.
master must attempt to mediate before referring Load line and draft information prior to
the matter to the flag state administration. departure.


Details of boat and fire drills, musters and A change of command of the vessel.
emergency exercises, such as the lowering Changes of officers and crew on board.
and taking away of boats, or instruction in Accidents to the vessel or crew or persons on
the use of the line throwing apparatus. Note board. ([he flag state may have minimum
that different flag states stipulate different time requirements before such reporting needs to
intervals for conducting such drills, many of be made.)
whose requirements are more frequent than Vessel detention by port state control
the minimum stipulated in SOLAS. authorities or other bodies.
Closing and opening ofwatertight doors and Any reports or pending prosecutions for
other emergency drills such as the testing of alleged violations of regulations such as oil
emergency steering gear. pollution allegations, allegations ofpollution
Stowaway searches prior to leaving port. by garbage; allegations ofviolations oftraffic
separation schemes. The master should be
The above is just a sample of the type of entries aware that the flag state will be advised of
which should be made in the 'official' or Bridge Log those alleged violations by the port or coastal
Book and reference should be made to the state involved, but would much prefer to have
requirements of individual flag states in this regard. received a report from the master first. Ifthe
There are numerous other log books and records that master does not report, then the flag state will
must also be maintained - Oil Record Book, Cargo be in contact with the ship owner, ship
Record Book, Medical Log Book, Engine Room and manager or even with the master directly.
Deck Logbooks, Engine Order or Movement Books
or Records - all of which should record the daily 10) To cooperaJe inJlag staJe investiglltilms
workings of the vessel together with details of any If a master is involved in a casualty or incident
unusual occurrences. which results in an investigation by flag state
The master should be aware that many flag states authorities, it is expected that the master will
operate their own ship safety inspection regimes and cooperate with the flag state inspectors or
the contents of log books will be checked during investigating officers. If the master cooperates
periodic inspections. Not only will failure to maintain fully, he will usually find the flag state looking
log books correctly result in a report or letter from much more kindly upon any violations, than if
the flag state administration to the ship manager or they are forced to find out for themselves. Should
owner, it may now be deemed to be a nonconformity the master be unlucky enough to be called to
with the provisions of the ISM Code. So the Safety attend an investigation, he should cooperate fully.
Management Certificate for the vessel could be in The master will not be able to avoid the
jeopardy. consequences, bearing in mind that the flag state
is the body which issued the certificate of
It is very wise for a master, ifin doubt, to make an competency to be master of that vessel and, as
entry in the log book. One never knows when a mentioned before, they have the right to withdraw
contemporaneous record may be of use to the master that certificate.
or ship owner.
Responsibilities of the shipmaster
8) To keqJ in his custody al/ the ~essels documents, the A shipmaster has many responsibilities. He is
~essel'sfo.nds, and control the use and disbursement
responsible to the owner for the ship, the crew and
thereof the out-turn of the voyage. He is responsible to the
cargo owner for the care of the cargo and he is
9) To make all reports as 1819' be required by theflag responsible to the public through the flag state
staJe according to their laws muJ regulations administration. Keeping all these demands in balance
This is very important. Flag states do not like to can be difficult at times but a good relationship with
be ignored Failure to make required reports may the flag state, complying in a timely manner with flag
be deemed to be a nonconformity within the ISM state requirements, will ensure that the ship is not held
Code and so could result in the suspension of the up or disadvantaged, particular!y through port state
Safety Management Certificate for the vessel. control.
What should be reported?

SOLAS Consolidated Edition 1997
Annex 3
Certificates and documents required
to be carried on board ships
(Note: All certificates to be carried on board must be originak)

1 All ships
I nternalional Tonnage Certificate (1969)
An International Tonnage Certificate (1969) shall be issued to every Tonnage Convention, art. 7
ship, the gross and net tonnage of which have been determined in
accordance with the Convention.
InJernotiolUll Load Line Cerl/lkale
An International Load Line Certificate shall be issued under the LL Convention, art. 16
provisions of the International Convention on Load Lines, 1966, to
every ship which has been surveyed and marked in accordance with
the Convention.
InJernotiolUll Load Line Exemption Certif"lCate
An International Load Line Exemption Certificate shall be issued to LL Convention, art. 6
any ship to which an exemption has been granted under and in
accordance with article 6 of the Load Line Convention.
InJaet SUWIJity B ookkt
All ships of 24 m and over shall be inclined on completion and the SOLAS 1974, reg. II-1I22
elements of their stability determined. The master shall be supplied
with a Stability Booklet containing such information as is necessary to
enable him, by rapid and simple procedures, to obtain accurate
guidance as to the ship under varying conditions ofloading.
Minimum !Dfe manmng document
Every ship to which chapter 1 of the Convention applies shall be SOLAS 1974 (1989 amdts.)
provided with an appropriate safe manning document or equivalent reg. V/13(b)
issued by the Administration as evidence ofthe minimum safe manning.
Certificatesfor masters, offICers or ratings STew 1978, art. VI
Certificates for masters, officers or ratings shall be issued to those
candidates who, to the satisfaction of the Administration, meet the
requirements for service, age, medical fitness, training, qualifications
and examinations in accordance with the provisions of the annex to
the Convention on Standards of Training, Certification and
Watchkeeping for Seafarers, 197& Certificates for masters and officers
issued in comp liance with this article shall be endorsed by the issuing
Administration in the form prescribed in regulation I12 of the annex.
InJernalUJlUll Oil Pollution PrevenJum Certif"lCate MARPOL 73178, Annex I, reg. 5
An International Oil Pollution Prevention Certificate shall be issued
after survey in accordance with regulation 4 of Annex I of MARpaL
73178, to any ail tanker of 150 gross tonnage and above and any other
ship of 400 gross tonnage and above which are engaged in voyages to
ports or offshore terminals under the jurisdiction of other Parties to
MARPOL 73178. The certificate is supplemented by a Record of
Construction and Equipment for Ships Other Than Oil Tankers (Form
A) or a Record of Construction and Equipment for Oil Tankers (Form
B), as appropriate.


Oil RecordBook MARPOL 73178, Annex 1, reg. 20
Every oil tanker of 150 gross tonnage and above and evel)' ship of 400
gross tonnage and above other than an oil tanker shall be provided
with an Oil Record Book, Part I (Machinery space operations). EveI)'
oil tanker of 150 gross tonnage and above shall also be provided with
an Oil Record Book, Part H (Cargolballast operations).
SlUpbotlTd Oil Pollution Emergmcy Plan MARPOL 73178, Annex 1, reg. 26
EveI)' oil tanker of 150 gross tonnage and above and every ship other
than an oil tanker of 400 gross tonnage and above shall carl)' on board
a Shipboard Oil Pollution Emergency Plan approved by the
Administration. In the case of ships built before 4 April 1993 this
requirement shall apply 24 months after that date.
2. In addition to the certificates listed in section 1 above, passenger
ships must carry:
Passenger Ship Sofely O?rtificate1 SOLAS 1974, reg. 1112, as amended
A certificate called a Passenger Ship Safety Certificate shall be issued by the GMDSS amdts.
after inspection and survey to a passenger ship which complies with
the requirements of chapters H-1, H-2, III and IV and any other
relevant requirements of SOLAS. A record of equipment for the
Passenger Ship Safety Certificate (Form P) shall be permanently
Exemption Certificate) SOLAS 1974, reg. 1/12
When an exemption is granted to a ship under and in accordance
with the provisions of SOLAS 1974, a certificate called an Exemption
Certificate shall be issued in addition to the certificate listed above.
Specillllrllik passenger ships STP Agreement reg. 6
A form of safety certificate for special trade passenger ships, issued
under the provisions of the Special Trade Passenger Ships Agreement
Special Trade Passenger Ships Space Certificate SSTP 73 rule 5
Issued under the provisions of the Protocol on Space Requirements
for Special Trade Passenger Ships, 1973.
3. In addition to the certificates listed in section 1 above, cargo
shl ps m ust carry:
Cargo Ship Safety Construction certifia'.rte' SOLAS 1974, reg.lIl2, as amended
A certificate called a Cargo Ship Safety Construction Certificate shall by the GMDSS amdts.
be issued after survey to a cargo ship of 500 gross tonnage and over
which satisfies the requirements for cargo ships on survey, set out in
regulation 1'10 of SOLAS 1974, and complies with the applicable
requirements of chapters H-1 and H-2, other than those relating to
fire-extinguishing appliances and fire control plans.
Cargo Ship Safety Equipment Certificate4 SOLAS 1974, reg. 1112, as amended
A certificate called a Cargo Ship Safety Equipment Certificate shall be by the GMDSS amdts.
issued after survey to a cargo ship of500 gross tonnage and over which
complies with the relevant requirements of chapters H-1, H-2 and III
and any other relevant requirements of SOLAS 1974. A Record of

* The form of the certificate and its record of equipment may be

found in the GMDSS amendments to SOLAS 1874.
+ SLS 14/Circ. ll5 refers to the issue of exemption certificates.
*. The form of the certificate may be found in the GMDSS
amendments to SOLAS 1974.

Equipment for the Cargo Ship Safety Equipment Certificate (Form E)
shall be permanently attached.
Cargo Ship Safety Radio Certificate? SOLAS 1974, reg. VI2, as amended
A certificate called a Cargo Ship Safety Radio Certificate shall be issued by the GMDSS amdts.
after survey to a cargo ship of300 gross tonnage and over, fitted with
a radio installation, including those used in life-saving appliances which
complies with the requirements of chapters III and IV and any other
relevant requirements of SOLAS 1974. A Record of Equipment for
the Cargo Ship Safety Radio Certificate (Form R) shall be permanently
Exemption Certificate 6 SOLAS 1974, reg. V12
When an exemption is granted to a ship under and in accordance with
the provisions of SOLAS 1974, a certificate called an Exemption
Certificate shall be issued in addition to the certificates listed above.
Document ofcompliance with the special requirementsfor ships carrying SOLAS 1974, reg. 11-2/54.3
dJlngertlus goods
An appropriate document as evidence of compliance with the
construction and equipment requirements of that regulation.
Dtllllfertlus goods nuurU'est tlr sitJwage plan SOLAS 1974, reg. VII/5(5);
Each ship carry ing dangerous goods shall have a special list or manifest MARPOL 73/78, Annex Ill, reg. 4
setting forth, in accordance with the classification set out in regulation
VIII2, the dangerous goods on board and the location thereof. A
detailed stowage plan which identifies by class, and sets out the location
of all dangerous goods on board, may be used in place ofsuch a special
list or manifest. A copy of one of these documents shall be made
available before departure to the person or organization designated
by the port State authority.

• The form ofthe certificate and its record of equipment may be found
in the GMDSS amendments to SOLAS 1974.
+ SLS. 14/Circ. 115 refers to the issue of exemption certificates.

Dtlcumenl tlfautlwrizalitlnj" tlr the carriage tlfgrain SOLAS 1974, reg. VI!9;
A document of authorization shall be issued for every ship loaded in International Code for the Safe
accordance with the regulations of the International Code for the Safe Carriage of Grain in Bulk, section 3
Carriage of Grain in Bulk either by the Administration or an
organization recognized by it or by a Contracting Government on
behalf of the Administration. The document shall accompany or be
incorporated into the grain loading manual provided to enable the
master to meet the stability requirements ofthe Code.
Certijicate of insurance or other jinancial security in respect of civil CLC.69, art. VII
IJablJltyftlr till ptlllutiDlt dmnage
A certificate attesting that insurance or other financial security is in
force shall be issued to each ship carrying more than 2,000 tons of oil
in bulk as cargo. It shall be issued or certified by the appropriate
authority of the State of the ship's registry after determining that the
requirements of article VII, paragraph I, ofthe CLC Convention have
been complied with.
Enhanced survey report jile 7 MARPOL 73n8, Annex I, reg. 13G;
A survey report file and supporting documents complying with SOLAS 1974 reg. XI!2
paragraphs 6.2 and 6.3 of annex A and annex B ofresolution A. 744(18).
Guidelines on the enhanced programme ofinspections during surveys
of bulk carriers and oil tankers.


4. In addition to the certificates listed in sections 1 and 3 above,
where appropriate, any ship canying noxious liquid chemical
substances in bulk shall carry:
International Pollution Prevention Certificatefor the Carnage ofNoxious MARPOL 73178 Annex n, regs.12
liquid Substcmces in Bulk (NLS Certificate) and l2a
An international pollution prevention certificate for the carriage of
noxious liquid substances in bulk (NLS certificate) shall be issued, after
survey in accordance with the provisions of regulation 10 of Annex II
ofMARPOL 73178, to any ship carrying noxious liquid substances in
bulk and which is engaged in voyages to ports or terminals under the
jurisdiction of other Parties to MARPOL 73178. In respect of chemical
tankers, the Certificate of Fitness for the Carriage of Dangerous
Chemicals in Bulk and the International Certificate of Fitness for the
Carriage of Dangerous Chemicals in Bulk, issued under the provisions
ofthe Bulk Chemical Code and the International Bulk Chemical Code,
respectively, shall have the same force and receive the same recognition
as the NLS Certificate.
Cargo RecordBook MARPOL 73178, Annex n, reg. 9
Every ship to which Annex II of MARPOL 73178 applies shall be
provided with a Cargo Record Book, whether as port of the ship's
official log-book or otherwise, in the form specified in appendix IV to
the Annex.
5. In addition to the certificates listed in sections 1 and 3 above,
where applicable, any chemical tanker shall carry:
Certificate ofFitness ofthe Carnage ofDangerous Chemicals in Bulk BCH Code, section 1.6
A certificate called a Certificate of Fitness for the Carriage of Dangerous
Chemicals in Bulk, the model form ofwhich is set out in the appendix
to the Bulk Chemical Code, should be issued after an initial or periodical
survey to a chemical tanker engaged in international voyages which
complies with the relevant requirements of the Code.
Note: The Code is mandatory under Annex II ofMARPOL 73178 for
chemical tankers constructed before IJuly 1986.
International Certificate of Fitness for the Carriage of Dangerous IBC Code, section 1.5
Chemicals in Bulk
A certificate called an International Certificate of Fitness for the
Carnage of Dangerous Chemicals in Bulk, the model form of which is
set out in the appendix to the International Bulk Chemical Code, should
be issued after an initial or periodical survey to a chemical tanker engaged
in international voyages which complies with the relevant requirements
of the Code.
Note: The Code is mandatory under both chapter VII of SOLAS 1974
and Annex II ofMARPOL 73178 for chemical tankers constructed on
or after I July 1986.
6. In addition to the certificates listed in sections 1 and 3 above,
where applicable, any gas carrier shall carry:
Certificate of Fitness for the Carriage of Liquefied Gases in Bulk GC Code, section 1.6
A certificate called a Certificate ofFitness for the Carriage ofLiquefied
Gases in Bulk, the model form of which is set out in the appendix to
the Gas Carrier Code, should be issued after an initial or periodical
survey to a gas carrier which complies with the relevant requirements
ofthe Code.

IntemaJiolUll Cerli/"lCate Ilf Fltnessfor the CtlTrillge ofLiqwjied Gases in Bulk I GC Code, section 1.5
A certificate called an International Certificate of Fitness for the Carriage of
Liquefied Gases in Bulk, the model form of which is set out in the appendix
to the International Gas Carrier Code, should be issued after an initial or
periodical survey to a gas carrier which complies with the relevant
requirements of the Code.
Note: The Code is mandatory under chapter VII of SOLAS 1974 for gas
carriers constructed on or after 1 July 1986.
7. In addition to the certlftcates listed in sections 1 and 3 above, where
applicable, high-speed craft mnst carry:8
High-Speed Craft Safety Certificate SOLAS 1974, reg. Xl3; HSC
A certificate called a High-Speed Craft Safety Certificate should be issued Code, para. 1.8
after completion of an initial or renewal survey to a craft which complies with
the requirements ofthe High-Speed Craft (HSC) Code in its entirety.

'" Subject to entry into fm:ce of the amendments adopted by Ule 1994 SOLAS Conference on 24 May 1884

Permit to Operate High-Speed Craft HSC Code, para. 1.9

A certificate called a Permit to Operate High-Speed Craft should be issued to
a craft which complies with the requirements set out in paragraphs 1.2.2 to
1.2.7 and 1.8 of the HSC Code.

Special purpose ships

Special Purpose Ship Safety Certificate Resolution A.534(13)

A certificate may be issued after survey in accordance with the provisions of
paragraph 1.6 of the Code of Safety for Special Purpose Ships. The duration
and validity ofthe certificate should be governed by the respective provisions
for cargo ships in SOLAS 1974. If a certificate is issued for a special purpose
ship ofless than 500 gross tonnage, this certificate should indicate to what
extent relaxations in accordance with 1.2 were accepted.
Ailditional Cerlificatefor Offshore Supp(y Vessels Resolution A.673(16);
When carrying such cargoes, offshore supply vessels should carry a Certificate MARPOL 73178, Annex n,
of Fitness issued under "Guidelines for the transportation and handling of reg.13(4)
limited amounts ofhazardous and noxious liquid substances in bulk on offshore
support vessels".
If an offshore supply vessel carries only noxious liquid substances, a suitably
endorsed International Pollution Prevention Certificate for the Carriage of
Noxious Liquid Substances in Bulk may be issued instead of the above
Certificate of Fitness.
Diving Systems
Ditling System Sa,{ety Certificate Resolution A.536(13), section
A certificate should be issued either by the Administration or any person or 1.6
organization duly authorized by it after surveyor inspection to a diving system
which complies with the requirements ofthe Code ofSafety for Diving Systems.
In every case, the Administration should assume full responsibility for the
certific ate.
Dynamically supported craft
Construction andEquipment Certflkate Resolution A.373(X), section
To be issued after survey carried out in accordance with paragraph 1.5. 1(a) of 1.6
the Code of Safety for Dynamically Supported Craft.


Permit to operate
Mobile Offshore Drilling Units Resolution A.414(XI) section 1.6;
resolution A. 649(16) section 1.6
Safety Certifreate
To be issued after survey carried out in accordance with the provisions
of the Code for the Construction and Equipment of Mobile Offshore
Drilling Units, 1979, or, for units constructed on or after 1 May 1991,
the Code for the Construction and Equipment of Mobile Offshore
Drilling Units, 1989.
Noise levels Resolution A.468(XII), section 4.3

Noise Survey Report

A noise survey report should be made for each ship in accordance
with the Code on Noise Levels on Board Ships.

Chapter 11


Principal Features at a glance - an extract from Port State Control

pubtished by The UK P&l Club

Agency ships transporting cargo to carry a limited number

THE UNITED STATES COAST GUARD. of individuals without being considered a
'passenger ship' for most inspection purposes and
Jurisdiction extension of this privilege to cargo ships of those
Foreign ships operating in US waters are subject nations that accord reciprocal treatment.
to inspection under Title 46 United Stales Code (USC) 46 USC 2101 (33) and 3301 (7). Directs that safety
Chapter 33. Reciprocity is accorded to ships of req uiremen ts of 46 US C Ch apter 33 are
countries that are parties to the Convention for the applicable to seagoing motor ships of300 or more
Safety of Life at Sea (SOLAS) (46 USC 3303(a)). In gross tons.
addition, certain provisions ofthe pollution prevention 46 USC 2101 (35) and 3301 (8). Safety
and navigation safety regulations (33 Code of Federal requirements for foreign small passenger ships
Regulations (CFR) 154-156 and 164 respectively) apply carrying more than six passengers from a US port.
to foreign ships operating in US waters. 50 USC 191. Requirements for security of ships,
harbours and waterfront facilities, and provision
Relevant instruments for control of the movement of foreign ships in
Applicable domestic statutes US waters by the local o CMIICOTP.
46 United States Code (USC) 5101-5116. Load line 33 USC 1221-1232. Statutes for advance notice
requirements for foreign ships. of arrival and navigation safety regulations.
46 USC 2101 (12) 3306(a)(5) and 49 USC 1801-
1812. Safety requirements for carriage of Applicable Regulations
dangerous articles and substances aboard foreign Most US regulations applicable to US and foreign
ships. ships, per Titles 33, 46 and 49 Code of Federal
46 USC 2101 (12) (21) and (35), 3504 and 3505. Regulations.
Safety requirements for foreign ships carrying
Applicable International Conventions
passengers from any US port to any other place
International Convention on Load Lines 1966, as
or country.
• 46 USC 2101 (12), (21), (22) and (35), and Chapter amended and its 1988 Protocol. (LOADLINES
35. Inspection and certification requirements for 66/88)
all foreign passenger ships which embark International Convention for the Safety of Life at
passengers at and carry them from a US port. Sea (SOLAS), 1974, its Protocol of 1978, as
(These statutes are also relevant for ships having amended, and the Protocol of 1988, (SOLAS 74
valid SOLAS 74178 Certificates or Canadian 78/88).
Certificates ofInspection, that must be examined International Convention for the Prevention of
to verify compliance with the flag administration's Pollution from Ships, 1975, as modified by the
safely verificationrequirement.) Protocol of 1978, as amended (MARPOL 77178).
46 USC 2101 (12) and (39), 3301 (10) and Chapter International Convention on Standards of
37. Safety requirements that apply, with certain Training, Certification and Watchkeeping for
stipulations, to all foreign ships regardless of Seafarers 1978, as amended (STCW 95).
tonnage, size, or manner of propulsion, whether Convention on the International Regulations for
or not carrying freight or passengers for hire, that Preventing Collisions at Sea 1972, as amended
enter US navigable waters while carrying liquid (COLREG 72).
bulk cargoes that are. Merchant Shipping (Minimum Standards)
a. Flammable or combustible Convention, 1976 (lLO Convention 147).
b. Oil of any type or in any form, including International Convention Relating to intervention
petroleum, fuel oil, sludge, oil refuse and oil on the High Seas in cases of Oil Pollution
mixed with wastes, except dredged spoil. Casualties, 1975 and the Protocol relating to
e. Designated as a hazardous substance under intervention on the High Seas in Cases ofMarine
Section 311 (b) ofthe Federal Water Pollution Pollution by Substances other than Oil, 1983.
Control Act (FWPCA) (33 USC 1321) or ...
d. Designated as hazardous materials under Ship Selection - The Boarding Priority
Section 104 of the Hazardous Materials Matrix
Transportation Act (HMTA) (49 USC 1803) Until 1994, the US Coast Guard's ship boarding
46 USC 2101 (21) and 3304. Permission for US programme was largely ad hoc, but now they have


developed a Boarding Priority Matrix to determine ratio (total number of detentions divided by the total
the probable risk posed by non-US ships calling at number of distinct arrivals). Classification societies are
US ports. The Matrix is used to decide which ships then assigned points according to where their
Port State control inspectors should board on any detention ratios fall in relation to the average detention
given day, in any given port. Ships are assessed in ratio.
various categories and then added together for a total
Below the Average Detention Ratio ~ 0 Points
point score This numerical score, along with other Between the average and 2 times the average ~ 1 Point
performance based factors, determines a ship's Between 2 times and 3 times the average ~ 3 Points
boarding priority from Priority I through IV. Between 3 times and 4 times the average ~ 5 Points
More than 4 times the average ~ Priority 1
In developing this points system, the US Coast
Guard has identified five features which directly This list is sent to all Coast Guard Safety offices.
influence a ship's operational condition and
compliance with international safety and OwnerfOperator List
environmental protection standards. These are: The US Coast Guard Headquarters Ship
Compliance Division (G-MOC-2I) compiles a list of
1. Flag States owners and operators associated with ships that have
2. Classification societies had more than one ship detained by the Coast Guard
3. Owner and operators list under the authority of an international convention
4. Ship type, and within the last twelve month period. Any ship making
5. History a US port call that is owned or operated by a person
or entity that has had that ship, or a different ship,
The first three are particularly significant and are
subject to more than one intervention action within
explained below.
the last twelve months, is accorded high priority status.
Flag States
The owners' list is updated monthly and is
The flag list is composed of those flag states whose
published on the USCG website and sent to all Coast
detention ratios exceed the average detention ratios
Guard Marine Safety Offices, see figure 77.7 - Point
for all flag states whose ships call at US ports.
score summary.
A flag state's detention ratio is ascertained by
dividing the number of its ships which have been Boarding Priority Matrix - Priority I-IV
detained in the last three years by the total number of and effects thereof
its ships which have called atUS ports within the same The points are added up for a total point score
period. For example, if a flag has had three ofits ships and the ship's boarding priority determined as follows:
detained during the last three years, and a total of 60
Priority I ships:
ofits ships have had US port calls in the same period,
17 or more points on the Matrix, or
the detention ratio would be 360 x 100'/0 = 50/0. The
Ships involved in a marine casualty, or
average detention ratio is ascertained by dividing the
Where U SCG Captain of the Port determines a
total number of detentions by the total number of
ship to be a potential hazard to the port or the
arrivals for all flag states.
environment~ or
The flag list is updated annually on 1 April and Ships whose classification society has ten or more
remains in effect for the ensuing twelve months. This arrivals the previous year and which a detention
information is sent to all Coast Guard Marine Safety ratio more than four times the average, or
Offices. A flag state is removed from the list when its Ships whose classification society has less than ten
detention average drops below the overall average flag arrivals the previous year and which have been
state detention average or when it is associated with associated with at least one detention.
less than two detentions within a twelve month period Port entry may be restricted until ship is examined by the
Coast Guard. Priority I ships are targetedfor examination
Classification Societies prior to entry into USporls. Wherefeasible, these ships are
This consists of a two-stage process whereby any boardedpr!or to port entry to ensure defiCiencies are corrected.
classification societies with less than ten arrivals to the OtherWIse, they are boarded upon entry and prior to
US in the previous year are eliminated from the commencement of cargo transfer operations or passenger
process. embarlcation.
Then, classification societies with more than ten Priority 11 ships:
distinct arrivals in the previous year are evaluated on 7 to 16 points on the Matrix, or
their performance over the previous two years. Their Outstanding requirements from a previous
performance is based on their detention ratio (number boarding in this or another US port, or
of detentions divided by number of distinct arrivals). The ship is overdue for an annual tank or
This ratio is then compared to the average detention passenger exam.

Owner Listed owner
5 pts
Flag Listed flag state
7 pIs
Class Priority 1 10 arrivals with detention ratio more than 4 times the average
OR <10 arrivals, but involved in a detention in the previous 2 years
5 points 10 arrivals with ratio between 3 & 4 times the average
3 points 10 arrivals with ratio between 2 & 3 times the average
1 point 10 arrivals with ratio between average and twice the average
Opoint 10 arrivals with ratio below average
OR <10 arrivals, 0 detentions in the previous 2 years
History Intervention within 12 months 8 PtsEsa
Other Oper. Control within 12 months IPtEa
Casualty within 12 months 1 PtEa
Not boarded within 6 months 1 PlEa
Ship Type Oil or chemical tanker 1 Pt
Gas carrier 1 Pts
Bulk freighter> 10 years 2 Pts
Passenger ship 1 Pts
Carrying low value commodities in bulk 2 Pts

Figure J1.1 Owner/Operator List- Point Score Summary

Cargo operationsmay be restrictedunttlship isexamined • Voyage damage will not be associated with a
by the Coa<t Guard. Priority Ilships are targetedfor boardmg classification society non-conformity unless other
prior to comm&ncem&nt ofcargo tranifer operations or class-related deficiencies are noted during the
passenger embarkation. An exemption to the requirem&ntjOr course of the damage survey.
boarding prior to commencement of cargo transfer operatiOns • Class non-conformities will only be associated with
or pa<senger embarkation may be granted ifthere are clear equipment covered by a survey, conducted by
indications that the shlp is in substantial compliance with class, or in which class issued the certificate on
applicable standards. behalf of the flag state.
Priority III ships: • When multiple deficiencies are noted, only those
4 to 6 points on the Matrix, or deficiencies serious enough tojustifY detention will
Alleged deficiencies reported, or be evaluated to determine class non-conformities.
The ship is overdue for an annual freight • Outdated equipment, when the cause of an
examinati on intervention, will not be associated with a class
non-conformity unless the equipment was
Priority HI shps may be targeted for boarding after entry outdated at the time of the last survey conducted
intoport, butno operational restrictions are lmposed. by the class society on behalf of the flag state.
The absence of easily stolen equipment, such as
Priori ty IV ships:
fire hose nozzles and extinguishers, will generally
3 or fewer points on the Matrix
not be listed as a class society non-conformity
Prionty IVships are not targetedfor boarding, bul may unless a large number are missing and the
be boarded and examined by the US Coast Guard at the inspection takes place within 90 days of the last
discretion ofthe local Captain ofthe Port or the Officer In survey by the class society for the flag state.
Charge, Marine Inspection. Expired certificates will not be associated with a
class non-conformity unless the certificates were
Ship Inspection Principles not endorsed or were improperly issued by the
In addition to the Boarding Priority Matrix the US class society when it conducted the last survey for
Coast Guard has also published the 12 'principles' the fl ag state.
employed as guidance by its ship inspections. These are: Interventions based on manning issues will not
Detentions are conducted only when a ship is unfit be issued as class non-conformities.
to proceed to sea or poses a threat to the marine • A time limit of 90 days will generally be placed
environment on associating non-conformities with equipment


failures, such as non-operational fire pumps, and or allowing the ship to proceed to another port for
emergency generators, unless it is apparent that repairs.
the deficiency is long standing.
• Failure of human-fact or-related testing - such as Nonconforming Ship. Any ship failing to comply
fire drills and abandon-ship drills - will be with one or more applicable requirements of US law
associated with a classification society non- or international conventions is anonconforming ship.
A nonconforming ship is not necessarily a substandard
conformity only when the class society issued the
relevant certificate on behalfofthe flag state within ship unless the discrepancies endanger the ship,
30 days on inspection. persons on board, or present an unreasonable risk to
Serious wastage or other strucbJral deficiencies not the marine environment.
caused by voyage damage will be listed as a class Substandard Ship. In general, a ship is regarded as
society non-conformity. substandard ifthe hull, machinery, or equipment, such
Note: The class society will be notified in writing as lifesaving, firefighting and pollution prevention, are
substantially below the standards required by US laws
in all cases on society non-conformities.
or international conventions, owing to:
Definition/Terms of Reference a. The absence of required principal equipment or
The following are key definitions and terms of arrangement.
reference employed by the USCG as part of its Port b. Gross noncompliance of equipment or
State Control programme. arrangement with required specifications.
e. Substantial deterioration of the ship structure or
Contravention. An act, procedure, or occurrence its essential equipment.
that is not in accordance with a convention or other d. Noncompliance with applicable operational and!
mandatory instrument, or its operational annex. or manning standards or
Deficiency. A condition found not to be in e. Clear lack of appropriate certification, or
compliance with the conditions of the relevant demonstrated lack of competence on the part of
convention, law and regulation. the crew.

Detention. A control action which restricts a ship's Ifthese evident factors as a whole or individually
right offree movement. The imposition ofa restriction endanger the ship, persons on board, or present an
unreasonable risk to the marine environment, the ship
on the movement of a ship constitutes a detention
regardless of whether or not a delay from a ship's should be regarded as a substandard ship.
normal or expected itinerary occurs. Detentions may Valid Certificates. A certificate that has been issued
be carried out under the authority of SOLAS 1974 as directly by a contracting government or party to a
amended. Regulation 19, ICLL Article 21; MARPOL convention, or on the behalf of the government or
Article 5; STew Article X and Regulation 114; ILO party by a recognised organisation, and contains
147 Article 4; the Ports and Waterways Safety Act, or accurate and effective dates, meets the provisions of
a US Customs detention. the relevant convention, and corresponds to the
Examination. The process of assessing a ship's particulars of the ship and its equipment
compliance with the relevant provisions of applicable Types of Examination
international conventions, domestic laws and US CG Port State Control examinations consist of
regulations. The scope of an examination shall be to annual examinations and then re-examinations or
the extent necessary to verify the validity of the deficiency follow-up examinations. These
relevant certificates and other documents, and to examinations may be broadened in scope or depth
ensure no unsafe conditions exist. An examination into an expanded examination if clear grounds exist
may include, but is not limited to, checks of documents, that lead a boarding team to believe that the condition
certificates, manuals, the ship's structural integrity, of the ship or its equipment does not correspond with
machinery, navigation, pollution prevention, the certificates or the ship does not comply with
engineering and safety systems, maintenance applicable laws or conventions.
programmes and crew proficiency.
Annual Examinations
Intervention. A control action taken by a port state An annual examination consists of the specific
in order to bring a foreign flag ship into compliance procedures outlined in the freight, tank, or passenger
with applicable international convention standards. ship examination chapters of the Marine Safety
Interventions are undertaken by a port state when a Manual. It includes an examination of the ship's
ship's flag state has not, can not, or will not exercise certificates, licences and documents followed by a
its obligations under an international convention to general examination, i.e. "walk through" of the ship
which it is a party. This may include requesting to develop an impression of shell maintenance and
appropriate information, requiring the immediate or the general state of the deck and side shell of the ship
future rectification of deficiencies, detaining the ship, to determine its seaworthiness. It will also include

examination and testing of specific equipment, as well 22. Garbage
as the conduct of operational testing and emergency 23. Manuals and Instructions
drills to ensure the crew's proficiency at carrying out 24. Items to be Examined or Tested
critical tasks. As a minimum, the following items are 25. Operational Tests
part of each annual examination and are taken from 26. Muster List
the MSM Volume I, Chapter 19, which sets out the 27. Communication
requirements listed below in greater detail. 28. Fire and Abandon Ship Drills
29. Damage Control Plan
CertJflcates, Licences and Documents 30. Bridge Operation
1. International Tonnage Certificate (1969) 31. Cargo Operation
2 Passenger Ship Safety Certificate 32. Loading, Unloading and Cleaning Procedures for
3. Cargo Ship Safety Certificate Cargo Spaces of Tankers
4. Cargo Ship Safety Equipment Certificate 33. Dangerous Goods and Harmful Substances in
5. Cargo Ship Safety Radiotelegraphy Certificate Packaged Form
6. Cargo Ship Safety Radiotelephony Certificate
7. Cargo Ship Safety Radio Certificate Re-examinations
8. Exemption Certificates A re-examination is an examination to ensure that
9. International Certificate ofFitness for Carriage of a ship remains in compliance with appropriate US
Liquefied Gases in Bulk laws or international conventions between annual
10. Certificate ofFitness for the Carriage ofLiquefied examinations. As with the annual examination, it
Gases in Bulk usually consists of an examination of the ship's
11. International Certificate ofFitness for the Carriage certificates, licences and documents, and a general
of Dangerous Chemicals in Bulk examination conducted by walking through the ship.
12. Certificate ofFitness for the Carriage ofDangerous Except aboard passenger ships, a re-examination will
Chemicals in Bulk not normally include operational testing or drills, but,
13. International Oil Pollution Prevention Certificate in the case offoreign passenger ship re-examinations,
14. International Pollution Prevention Certificate for the re-examination should include the witnessing of
the Carriage ofNoxious Liquid Substances in bulk fire and abandon-ship drills to ensure that the ship's
15. International Load Line Certificate (1966) crew can adequately ensure the safety ofthe passengers
16. International Load Line Exemption Certificate in any emergency.
17. Oil Record Book part I and IT
1& Cargo Record Book Expanded Examinations
19. Minimum Safe Manning Document An expanded examination is a more detailed
20. Crew Licences or Certificate of Competency, examination or testing conducted when an annual
Medical Certificates, of ILO Convention No 73 examination, re-examination, or deficiency follow-up
concerning Medical Examination of Seafarers establishes "clear grounds" for believing that the
21. Stability information condition of a ship, its equipment or crew are not in
compliance with applicable US laws or international
conventions. Expanded examinations should focus on
1. Deck Portion
those areas where "clear grounds" have been
2. Hull Porti on
3. Ballast Tank Entry established and should not include other areas or
4. Load Lines systems unless the general impressions or observations
5. Seaworthiness of the boarding team support such examination.
6. Voyage Damage "Clear Grounds" for an Expanded Inspection
7. Machinery Spaces To assist the boarding team, a list of deficiencies
8. Operation
that establish "clear grounds" to expand an
9. Maintenance
examination has been developed. The following
10. Tests and Trials
deficiencies, grouped under the relevant conventions
11. Oil and Oil, Mixtures
12 SufficientPower and/or codes, are considered of such a serious nature
13. Lifesaving Equipment that they may warrant the detention of the ship
14. Fire Safety Equipment involved. This list is not exhaustive.
15. Fire Doors General
16. Ventilation Systems Absent or invalid certificates required under
17. Escape Routes
applicable conventions.
1& Navigation Safety
19. Cargo Ship Safety Construction Items SOLAS
20. Cargo Ship Safety Radio Operation Failure of proper operation of propulsion and
21. Equipment in Excess of Convention or Flag State other essential machinery as well as electrical
Requirements installations.


Insufficient cleanliness of engine room, excess Missing or defective quick closing valves
amount of oil-water mixture in the bilges; Electrical installations not intrinsically safe or not
insulation of piping including exhaust pipes in corresponding to the code requirements
engine room contaminated by oil; and improper Ventilators in cargo area not operable
operation of bilge pumping arrangements. Pressure alarms for cargo tanks not operable
Failure of the proper operation of emergency Gas detection plant and/or toxic gas detection
generator, lighting, batteries and switches. plant defective
Failure of the proper operation of the main and Transport of substances to be inhibited without
auxiliary steering gear. valid inhibitor certificate
Absence, insufficient capacity, or serious
Areas under leLL
deterioration of personal lifesaving appliances,
Significant areas of damage or corrosion, orpitting
survival craft and launching arrangements.
of plating and associated stiffening, in decks and
Absence, noncomp lianc e, or substantial
hull affecting seaworthiness or strength to take
deterioration - to the extent that it can not comply
local loads. However, this is waived if authorised
with its intended use - of fire detection system,
temporary repairs for a voyage to a port for
fire alarms, fire fighting equipment, fixed fire
permanent repairs have been carried out.
extinguishing installation, ventilation valves, fire
A recognised case of insufficient stability
dampers and quick-closing devices.
The absence of sufficient and reliable information
Absence, substantial deterioration, or failure of
in an approved form which, by rapid and simple
proper operation of the cargo deck area fire
means, enables the master to arrange for the
protection on tankers.
loading and ballasting of the ship in such a way
Absence, noncompliance, or serious deterioration
that a safe margin of stability is maintained at all
of lights, shapes, or sound signals.
stages and at varying conditions of the voyage,
Absence, or failure of the proper operation, of the
and that the creation of any unacceptable stresses
radio equipment for distress and safety
in the ship's structure is avoided.
communication. Absence, substantial deterioration, or defective
Absence, or failure of the proper operation of closing devices, hatch closing arrangements and
navigation equipment, taking the relevant watertight/weathertight doors.
provisions of SOLAS Chapter V /12(0) into Overloading
account. Absent or improper draft and/or Load Line Marks
Absence of navigation charts and/or all other
relevant nautical publications necessary for the Areas Under Marpol Annex I
intended voyage, taking into account that Absence, serious deterioration, or failure ofproper
electronic charts may be used as a substitute for operation of the oily-water filtering equipment,
the charts. the oil discharge monitoring and control system,
Absence of non-sparking exhaust ventilation for or the 15 ppm alarm arrangements.
~o pump rooms. Remaining capacity of slop and/or sludge tank
Serious noncompliance with procedures stipulated insufficient for the intended voyage.
under the Certified Safety Management System Oil record book not available
on ships required to comply with SOLAS Chapter Unauthorised discharge bypass fitted
Areas Under Marpol Annex II
Areas Under the IBC Code Absence ofProcedures and Arrangements Manual
Transport of a substance not mentioned in the Cargo not categorised
Certificate ofFitness or missing cargo information. No cargo record book available
Missing or damaged high pressure safety devices. Transport of oil-like substances without satisfYing
Electrical installations not intrinsically safe or not the requirements or without an appropriately
corresponding to the code requirements. amended certificate
Sources of ignition in hazardous locations. Unauthorised discharge bypass fitted
Contravention of special requirements. Areas Under STew
Exceeding of maximurn allowable cargo quantity Number, composition, or certification of crew not
per tank. corresponding with Safe Manning Document.
Areas Under the IGC Code Areas Under lLO 147
Transport of a substance not mentioned in the Insufficient food for voyage to next port
Certificate ofFitness or missing cargo information. Insufficient potable water for voyage to next port
Missing closing devices for accommodations or Excessively unsanitary conditions on board
service spaces. No heating in accommodation ofa ship operating
Bulkhead not gastight. in areas where temperatures may be excessively
Defective air locks. low.

Forfurther details on the abovepaints, consult the MSM Note: While a request for reconsideration or a formal
Volume 1, Chapter 19. appeal is pending, the original decision or actions remains
in effect, unless specifically stayed by the District Commander
Intervention and Detention or Headquarters.
Detention Dissemination of Detention Information
Interventions of the USCG, may involve:
Blacklisting - Detention Information
allowing the ship to sail with the deficiency The Ship Compliance Division produces a List of
uncorrected (e.g. a warning). Ships Detained, under the authority of Titles 14, 33,
corrective action prior to returning to a US port. and 46, United States Code.
allowing the ship to proceed to a specific port for
repairs. This List of Ships Detained includes the ship name,
denying port entry. IMO number, date of detention, ship type, port, flag,
detaining the ship in port until the deficiencies classification society and deficiency summary.
are corrected.
The list is subject to change without notice based
Ifa USCG inspector takes an intervention action on appeals made by the owner, operator, and/or
against a ship, the flag state must be notified of all the classification society.
circumstanc es, in addi tion to the cl ass ifi c ati on soc i ety
as well as the International Maritime Organisation General Publidty Information
(IMO). If the ship is allowed to depart without all There is a lotofhelpful information as to the criteria
identified deficiencies being corrected, the USCG employed by the USCG published by the United
must also notifY the authorities of the next port of call States Coast Guard and available on the internet at
ofthe uncorrected deficiencies. http://www . dot.govl d otinfo/us cg/hql g-m/p scl
psc.htm. See in particular the Marine Safety Manual,
Appeals Procedure Volume 1, Chapter 19. The US Coast Guard
A detention decision may be appealed under the Headquarters' Port State Control Branch may be
provisions of Title 46, Code of Federal regulations reached at the following address:
(CFR), Part 1.03-20 of Title 33, CFR, Part 160.7. The
appeal must be in writing within 30 days after the Commandant (G-MOC-2)
decision is made or action is taken, and should give US Coast Guard
reasons as to why the decision or action should be set 2100 Second Street S. W.
aside or revised. It should be addressed to the Coast Washington DC 20593-0001
Guard officer in command where the decision was Arrangements have also been made to exchange
made or action was taken, generally the Officer in information with other port state authorities,
Charge, Marine Inspection (OCMI), Captain of the international organisations, regional authorities, etc.
Port (COTP), or Commanding Officer, Marine Safety
Office (CO.MSO).
This chapter isprovided by kindpermission ofthe UK
Ifthe initial appeal is unsuccessful, a formal appeal P&l Club.
may be made to the District Commander. A further
formal appeal may be made to Coast Guard


Chapter 12


'extracts from Peril at Sea and Salvage - The International Chaniber of Shipping

'The need for assistance

WHEN A SHIP SUFFERS a casualty or is otherwise in a Account should be taken of all circumstances
position of peril, the master must decide, as a matter including the following:
,of urgency, whether assistance, including salvage
;assistance, is needed or ifthe situation can be handled Safety of personnel.
using the ship's own resources. Proximity to shore or shoal water.
Weather and sea conditions.
The master's responsibility Current and tide.
The master should be authorised to take whatever Nature of sea bed and shoreline.
measures he considers necessary to protect life, his Potential for safe anchoring.
.ship and the environment, without reference to a third Availability of assistance.
party. Damage already sustained by the ship.
Risk offurther damage to the ship.
Authority of the master Prospect of maintaining communications.
The authority of the master is not altered by Threat of pollution.
,engaging salvors. He remains in command of the ship Manpower and material requirements.
·despite the presence ofasalvage master and he should
therefore ensure that he is fully aware of the action In addition to any threat to life, ship and cargo,
taken in the rendering of salvage services. Even though the necessity to avoid or reduce the risk of pollution
.services have been accepted and assistance is being ,cannot be emphasised too strongly .
rendered, the salvormust cease his services in response Obtaining assistance
to a reasonable request to do so by the master.
Once the master has decided that assistance is
The master should cooperate fully with the salvors, necessary, he should act promptly to request it from
who are experts in salvage operations and in so doing any available source using the most expeditious means
,exercise due care to prevent or minimise damage to .at his disposal. When one Of more suitable ships
the environment. He should take account of any advice respond to the call for assistance, the master should
given by the salvage master or other person in charge immediately request such ship(s) to undertake
·of rendering or advising on salvage services. The whatever action is necessary.
.salvors may not be experts in the safety and handling
Assistance should never be delayed merely to
'of cargo or familiar with the ship. If in doubt about
negotiate a particular form of agreement or contract
the advisability of any action suggested by the salvors,
the master should not hesitate to challenge the advice
given, bearing in mind his overriding responsibility Generally, those rendering beneficial assistance to
for the safety of those onboard, the ship and its cargo. a ship in peril are entitled to salvage. It is not essential
to agree upon the contractual terms for the assistance
Legislation may exist in some countries requiring required, since there is a right under maritime law to
the master to accept services or instructions provided ,salvage which exists independently of contract.
by the coastal state concerned. In such cases the coastal
state to which the occurrence has been reported may If the assisting ship(s) request(s) the master to agree
be exp ected to inform the master of nati onal to a contract for the assistance, L1oyd's Standard Form
requirements. However, the master should also consult of Salvage Agreement, known as L1oyd's Open Form
documents on board which might contain guidance, (see Appendices C and D), is the form most usually
e.g. sailing directions, notices to mariners, etc. offered and should be agreed upon to avoid any delay
in assistance being rendered. The Lloyd's Form
Assessment of urgency provides protection for both parties to the salvage
The master should immediately assess the dangers agreement.
to which the ship is exposed and the urgency with
which assistance may be required from outside Lloyd's Open Form has been revised to coincide
sources. It is better to overreact on the side of safety with the incorporation into English law (with effect
and pollution prevention than to delay action in the from 1 January 1995) of the provisions of the
hope that the situation may improve. When making International Convention of Salvage 1989 (the
judgements, it should be assumed that the situation "Salvage Convention"). The revised Forms bears the
will not improve. reference LbF 1995.

LOF 1995 can be agreed orally or by radio by a contractual basis stipulating ordinary tariff fixed
sending the following message: lump sum or daily rates. However, it is emphasised
that where life, the ship, its cargo or the marine
"ACCEPT SALVAGE SERVICES ON BASIS environment are in peril, such negotiations should not
LLOYD'S STANDARD FORM LOF 1995 NO in any way delay the engagement of the salvors.
FOREGOING. MASTER". Masters of oil tankers should note that LOF 1980
is likely to remain the preferred salvage contract for
Ifan earlier edition ofLloyd's Open Form is offered salvors involved in mid-ocean laden tanker casualties.
and accepted, the message should refer to that Form.
This is due to the 'safety net provision' contained in
The engagement of one salvor under LOF 1995 LOF 1980. This provision requires that salvors, while
does not preclude the master from engaging other performing salvage services, also use best endeavours
salvors. Similarly, the salvors may engage other salvors to prevent the escape of oil from the ship and entitles
as sub-contractors. Ifmore than one salvor is involved, salvors, as against the vessel owner only, to recover
every effort should be made to obtain the agreement their reasonable expenses and an increment thereon
of the salvors to cooperate with each other and to ofup to IS%. The provision applies only in respect of
appoint one leading salvor. a tanker laden or partly laden with a cargo of oil and
to cases where a salvor is either unable to earn any
Other forms of contract salvage remuneration because the salvage efforts are
It is possible that the ship offering assistance may unsuccessful or only able to earn salvage remuneration
decline LOF 1995 and propose other terms or an which is inadequate to cover the salvor's expenses.
earlier edition ofLloyd's Open Form e.g. LOF 1980. Although LOF1995 provides for a similar (but more
If the master considers that immediate assistance is enhanced safety net), it is geographically restricted in
essential, he should accept the terms offered, but ifhe that it is only applicable if the salvage operations
feels that the terms offered are unreasonable or prevented or minimised damage to the environment
extortionate he should register a protest immediately in 'coastal or inland waters or areas adjacent thereto'
or, ifhe thinks that this may delay the assistance, on
This extract is taken from Peril at Sea and Salvage, a
completion of the service. If the master considers that
immediate assistance is not essential itmay be possible, gwde for masters by kind permission of The International
where time allows, to have the assistance arranged on Chamber ofShipping.

Chapter 13


by Mr. C.P. Beesley, Ince & Co., London

Chri8 Bees£ey has worked with Ince & Co'? Maritime Solicitors, since 1972 pnmaniy dealing with aU aspects ofman"ne casualty law
and in particuiar salvage claims far shipowners and salvors. In 1979 he set up thefirm's HO/1ii KO/1ii q[i/:efrom where he handled
marine casualties throughout Asia and the P(X!ific Rim before returning to Ince & Ca. London In 1984. He is joint Chairman ofthe
firm's Admiralty Group. He travels extenSiVely and frequentfy addresses seminars an safety and naVlgafion Issues and has had numerQUl1
articles published in his specialist areas. He has also deliveredpapers on salvage at the ever popular Nautical Institute Master and
Maritime Law Series afseminars in Newcastle and at the International Tug and Salvage Symposium.

but an enhanced salvage award will be made where

Summary lives as well as property were at risk and saved.
This chapter deals with the infrequent occurrence
where a master may be confronted with a number of Types of salvage contract
different salvage problems and contract wordings and The most common dedicated salvage contract in
examines his options from a practical rather than worldwide use is the L1oyd's Open Fonn. In its various
strictly legal viewpoint The authority of the master to guises, this contract has been in common use since
engage help and his duties and obligations under the 1908 and there have been ten versions ofthe contract
most commonly used salvage contract (L1oyd's Open published by the Council of L1oyd's since then. In
Form) are also considered. those early days, the 'open' part of the title referred to
the amount of the salvage award: either the amount
was agreed between salvor and the ship's
A vessel in distress requires assistance and
representatives and inserted in the contract or it was
depending on her circumstances may be required to
left 'open' for determination by arbitration in London
seek help (MARPOL). A claim for salvage can be
at a subsequent date. The latest variant of the fonn,
pursued at common law by anyone who is a volunteer
LOF 95, (and most ofits recent predecessors) provides
(i.e. not acting under the existing obligation - for
for assessment of the award by arbitration in London
example a statutory duty that may be the case of some
and a ship's master should not be concerned that in
port authorities) and who saves property in danger
signing LOF he is exposing his owners and
that has some value. This long established formula,
underwriters to an open ended payment of money. If
which still holds good today, is the foundation on
the ship, its crew, cargo or the environment is in any
which many published and widely used salvage
way threatened by a particular misfortune then
contracts are based- the 'No Cure- No Pay' principle.
engaging suitable salvage help on L1oyd's Fonn tenns
There is no payment where property is not saved
(ifavailable) will invariably be the most sensible thing
except in certain pollution related cases.
to do. The level of the award will be determined by
Successful salvage claims have been pursued by amicable negotiation or by arbitration applying criteria
individuals (pilots, tug crew members, firemen and embodied in English (and also International) Law. An
Iifeboatmen for example) as well as companies, owners award will only become payable when property is
and crews of merchant ships, tugs and of course saved ('no cure - no pay') except in certain
professional salvage companies. It is the intervention circumstances when anti pollution measures are
of tugs and the confusion over their terms of undertaken. Salvage operations which predate the
engagement (on "contract" or "tariff" terms, etc.) which agreement to LOF can be included within the LOF
gives rise to most legal disputes concerning entitlement ( c1aus e 1 (d)).
to claim salvage. Salvage services can be refused or
A specimen LOF 95 appears in the appendices.
prohibited by ship's masters but only if 'reasonable'
Other versions of the fonn are also in use and contain
to do SOl. Under those same conventions, masters of very different terms, particularly LOF 80 (LOF 90 is
ships are obliged to render assistance to persons in not materially different to LOF 95 and if a contract is
distress at sea. Responding to a distress message offered on these terms this probably represents 'old
however does not deprive a salvor of reward if
stock'). Space here does not allow a detailed
property is salved. English law does not recognise the
comparison between LOF 80 and LOF 95 but
concept of life salvage (where only lives are saved)
significant differences in the level ofthe salvage awards
i The Brussels Convention on Salvage 1910 and the London under each could arise in certain circumstances on
Salvage Convention 1989. identic al facts and it is ve11' unlikely that a professional

salvor will be offering the old version of the form by International Convention on S4jvage 1989
mistake. As in any situation where salvage assistance As incorporated into LOF 95, English and many
is being negotiated, then owners or local other countries' domestic laws).
representatives of insurers should be consulted where
Article 6
the circumstances allow. Agreeing LOF rarely ifever
2. The master shall have the authority to conclude
creates grounds for a salvage claim where these did
contracts for salvage operations on behalf of the
not exist previously. In the legal systems of most
owner of the vessel The master or the owner of
countries each interest salved (ship, calgO, freight and
the vessel shall have the authority to conclude such
bunkers) will be responsible for paying its share of
contracts on behalf of the owner of the property
the ultimate award or settlement in proportion to the
on board the vessel
value ofthe property salved.
Article 8
Most of the terms ofLOF 95 relate to procedures Duties of the sa1vor and of the owner and
which will not concern masters of salved ships. master
However, some clauses are ofa practical operational 1. The salvor shall owe a duty to the owner of the
character and should be familiar to masters, preferably vessel or other property in danger:
in advance and certainly after the contract has been
agreed or signed. In particular, masters should be (a) to carry out the salvage operations with due
aware of the following: care;
(b) in performing the duty specified in sub-
1 (a) The Contractor shall use his best endeavours:-
paragraph (a), to exercise due care to prevent
(i) To salve the "[ship]" and/or her cargo freight or minimize damage to the environment;
bunkers stores and any other prop erty (e) whenever circumstances reasonably require,
thereon and take them to......................or to to seek assistance from other salvors; and
such other place as may hereafter be agreed (d) to accept the intervention of other salvors
either place to be deemed a place of safety when reasonably requested to do so by the
or if no such place is named or agreed to a owner or master of the vessel or other
place of safety and property in danger; provided however that
(ii) while performing the salvage services to the amount of his reward shall not be
prevent or minimise damage to the prejudiced should it be found that such a
environment request was unreasonable.
1 (d) In the event of the services referred to in this 2. The owner and master of the vessel or the owner
Agreement or any part of such services having of other property in danger shall owe a duty to
been already rend ered at the date of this the salvor:
Agreement by the Contractor to the said vessel
(a) to cooperate fully with him during the course
and/or her cargo freight bunkers stores and any of the salvage operations;
other property thereon the provisions of this (b) in so doing, to exercise due care to prevent
Agreement shall apply to such services. or minimize damage to the environment; and
3. Ownerscooperation:The owners their servants and (e) when the vessel or other property has been
agents shall cooperate fully with the contractor in brought to a plac e of safety, to accept
and about the salvage including obtaining entry redelivery when reasonably requested by the
to the place named or the place of safety as defined salvor to do so.
in clause 1. The contractor may make reasonable
use of the vessel's machinery gear equipment Modern communications now make it possible for
anchors chains stores and other appurtenances masters to be in contact with their owners/managers
and thus often allow discussion to take place before
during and for the purpose ofthe salvage services
salvage help is taken. Some hull insurance companies
free of expense but shall not unnecessarily damage actually require prior consultation and masters should
abandon or sacrifice the same or any property the be familiar with an insurers' own wishes in this respect
subject of this agreement - often through claims handbooks or circulars. Whilst
5 (d) The owners of the vessel their servants and the master has actual authority to enter into salvage
agents shall use their best endeavours to ensure contracts on behalfofthe ship, her cargo and bunkers
that the cargo owners provide their proportion of (regardless of owners hip ), where circumstances allow,
salvage security before the cargo is released. consultation is always preferable. Owners/managersl
insurers will have access to a number ofintemational
19. Inducements prohibited: No person signing this salvage companies and tug brokers and may be able
Agreement or any party on whose behalf it is to secure more favourab le commercial terms than
signed shall at any time or in any manner perhaps a master left to his own devices. Consultation
whatsoever offer provide make give or promise also prevents an unfortunate situation developing
to provide demand or take any form of where more than one salvor is engaged to do the same
inducement for entering into this Agreement job resulting in the possibility of double payment.


Salvors, by the nature of the agreement entered heard, generally months and sometimes even years
into, generally take a risk when salving a stricken after the event.
vessel. On occasions, the best equipment for the job
may not readily be available and a vessel inappropriate Other forms of salvage contracts
for the entire contract may initially be offered on the A contract to perform assistance does not have to
understanding that a more substantial unit will be be in writing for a successful salvage claim to be made.
substituted at a later date. It is not uncommon, for A discussion over the VHF or an exchange of written
example, for a harbour tug to be despatched in an messages constitutes a contract upon which the
attempt to stabilise the position initially, on the foundations for a salvage claim exist. The most
understanding that a more powerful vessel will be common of such cases are the services "at request" or
provided subsequently. The master needs to assess the "engaged services". Ifa vessel in difficulties requests
risks that such prop osals involve and ensure that a passing vessel to stand by whilst repairs are made or
insofar as is possible the best salvage "service" is weather abates then a successful salvage claim can be
selected. The closest salvor is not necessarily the best made. The ship standing by, does not have physically
nor is the cheapest offer necessarily the one that should to make fast or board the casualty (unless requested
be accepted. Obviously the urgency and severity of to do so) for her owners, master and crew to recover
the situation need to be taken into account, looking an award. To be successful in this respect, the ship
particularly at danger to life, risk to the environment and/or cargo must be saved - nothing would be
and the safety of ship and cargo. recoverable in the event that the ship was totally lost
- whether or not her crew were successfully rescued.
LOF or any other salvage contract does not have Ifa vessel is engaged to undertake a specific task (such
to be physically signed for there to be a binding as towage service) then merely standing by, having
contract in existence. There have been cases where failed to connect orperform the towage requested will
LOF has been agreed over the VHF, by fax, telephone give rise to no award. The "comfort" created by a
or cable. vessel standing by to enable a crew to work on a
Other 'standard' printed forms of salvage stricken vessel will however give rise to a claim as will
agreement also exist and contracts from the following the provision of spare parts to a vessel in difficulty or
areas are occasionally seen: Turkey, The Peoples the supply of some additional technical expertise.
Republic of China, some FSU countries, some In the UNDA UNTE D2 a ship lost her anchors in
Scandinavian countries, Germany and Japan. heavy weather and a passing merchant vessel was
Professional salvors tend to prefer the certainty ofLOF requested to seek a replacement anchor and cable.
however and this is also true of most underwriters and The merchant vessel duly put into port in accordance
P&l Clubs where no fixed price agreement can be with this request but in the meantime the
reached. UNDAUNTED reached port safely partly under her
Most of the recent changes to LOF (and some of own power and partly under tow of another vessel.
its overseas 'cousins') have been driven by changing The requested services gave rise to a successful salvage
world attitudes to the environment and the need to claim.
encourage salvors to be particularly careful to prevent The rationale behind engaged services is easy to
or reduce environmental damage - even where little understand. The mere presence of a vessel standing
or no residual property value remains at the end of by (invariably a merchantman) whilst essential repairs
thejob. To take account of ever changing global needs are undertaken can very often provide the comforting
and problems, a new LOF is being discussed by the difference between property (and lives) being saved
LOF Working Group and it is quite possible that we or the ship and her cargo becoming totally lost.
will see LOF 99 or 2000. "Salvors" in these situations deserve encouragement
Fixed rate or lump sum contracts will invariably by way of salvage award. The law of contract applies
be entered into when there is no threat of imminent equally to salvage as it does in many other walks of
danger. Almost always in these circumstances, the life. If a request is made for ajob to be performed and
contract will be negotiated and signed ashore. the job is successfully completed in accordance with
the terms of the request then a reward is payable.
In a salvage situation there is frequently danger Similarly, if an offer to perform ajob is accepted and
and many worrying aspects for the master to consider. performed then again remuneration will be payable.
In most cases the last thing the master thinks of is This is the most basic form of salvage contract and
keeping a running note of key facts, position lines, masters should always take particular care in choosing
day's run, engine movements, availability of words for discussions with third parties as
personnel, communications, details of the salvage misunderstandings can and do frequently occur.
agreement and so on. Because salvage awards are
settled generally by arbitration the master will need
to testifY in court and contemporary records, ifpossible
with photographs, will be invaluable when the case is (1928) 31 LLR339


Photograph courtesy ofHong Kong Salvage & Towage Company Ltd.

Figure 13.1 A routine berthing operation could give rise to a salvage

claim if something unexpected happens.

Photograph by MJ Gaston, courtesy of Howard Smith Towage & Salvage

Figure 13.2 A vessel In difficulty requires salvage assistance


Legal procedures salvage cases but ships' masters should be aware that
Lloyd's Form currently provides for determination they can face Court procedures in this way at short
of the salvors remuneration by way of arbitration in notice and ensure that in conjunction with their owners
London. Much of the wording of the Lloyd's Form and insurers they have arranged adequate preparation
contract is taken up by the procedural methods by time before any evidence is given.
which the salvors claim will be brought before a single Salvage claims under common law - that is to say
Arbitrator in London. There is a right of appeal from where no contract has been agreed or specific request
thatArbitrator and, in rare cases, awards can be heard for help made - are not uncommon and salvors may
by the Courts in England ifany point oflawis involved wish to begin legal proceedings before the courts of
or the Arbitrator has perhaps mis-conducted himself the location where the services are alleged to have
in some way. taken place. Tug owners in Italy, for example, arekeen
In a salvage situation, danger to life and property to have matters determined before the courts of their
is often present and the master has many wonying own country although, in almost all cases, amicable
matters to consider. In most cases the last thing the negotiation between all parties generally leads to a
master will think of is to keep a running note of key conclusion of the case short of a Court or arbitration
facts, position of ship and tugs, deployment of lines hearing. In some cases it is possible that local Court
and wires, engine movements and other details ofthe procedure will require the master to give oral evidence
salvage operation. Masters should bear in mind that soon after the incident in question either before the
whether or not they are required to give evidence in Court or p erhap s to a specially app ointed Court
person at any subsequent stage (and hearings can take Surveyor.
place years after the event) detailed records ofevents
should be maintained and that those records are likely
Salvage without contract
to come under close scrutiny in the future. Tape Whether seen by a ship's master or not, every ship
recordings, photographs and videos ofkey events may arriving or leaving port with the assistance of tugs has
prove valuable and put vital matters, which may (through her owners or agents) entered some form of
become contentious, beyond dispute. contract. Frequently, the terms of that contract will be
agreed in advance and be performed efficiently and
Following the successful termination of salvage without recourse to any claim. Tugs are engaged 'per
services it is usual for shipowners or their insurers to movement' or 'per hour' and all parties to the
appoint a third party to investigate the circumstances transaction are usually happy - an invoice is rendered
of the casualty and the facts surrounding the salvage and paid.
services. Invariably the investigator will be a lawyer
- perhaps with seagoing experience, but in smaller Many masters are surprised to learn that without
value cases, surveyors, local agents or even owners their having agreed (in writing or verb ally) to any
themselves have been known to undertake the on variation of that original contract, circumstances can
board investigation. Arb itrations in London under arise where a salvage claim can be generated by the
LOF are almost always conducted on documents assisting tugs and/or their crews. The sudden onset of
alone. When LOF has been agreed there is no dispute bad weather or an intervening casualty such as fire or
that the services are salvage by nature giving rise to grounding can turn a routine berthing operation on
the entitlement to remuneration. There is accordingly tariff terms into a salvage situation. The leading
very little issue relating to the underlying merits of authority on the subjece summarised the test to be
the claim. Experienced Arbitrators appointed by applied as follows:
Lloyd's are accustomed to dealing with issues of "To constitute a salvage service by a tug under
dispute on facts occurring during the salvage services. contract to tow two elements are necessary:
Ifa salvage claim is heard by the Court or by way ofa
submission to arbitration without salvage being That the tow is in danger by reason of
admitted then the need for oral evidence becomes circumstances which could not reasonably have been
more relevant and, in certain cases, ship's masters have contemplated by the parties;
been called to give evidence before the Court or That risks are incurred or duties performed by the
Arbitrator. This will take place after a passage oftime tug which could not reasonably be held to be within
and the need to record facts as early as possible after the scope ofthe contract."
the events giving rise to the salvage claim cannot be
There is little a ship's master can do in these
stressed too highly as this will form the backbone of
any evidence given subsequently. Lawyers will assist circumstances and he may sometimes be more than
happy that 'salvors' are on hand to help (even at an
ships masters and senior officers in preparing to give
enhanced rate of pay). Masters should, however, be
their evidence in this way.
aware that where circumstances arise which were not
In certain jurisdictions outside England, it is envisaged at the time the original contract for
possible that the master's evidence will be taken orally
by way of deposition. This is very rare indeed in l (1860)Lush 90 @ 92

assistance was entered into then a separate salvage m aterial is contained in Peril at Sea and Salvage - A
claim may be pursued. gu.idefor Masters, jOintly published by the International
Chamber of Shipping and the Oil Companies
Masters are often surprised to find themselves
International Marine Forum.
involved in a salvage claim long after they have left
the port in question. It is by no means unheard offor
masters to first hear of a claim from the lawyer Conclusion
boarding his ship to collect evidence relating to the In summary, masters should be aware that they
incident! An agreement for a tug to assist heave an have authority to engage salvage assistance
anchor or turn a ship through the wind without clearly appropriate in extent and form to the circumstances
agreeing terms will almost certainly provide the they face and consistent with ISM on board
necessary ingredients for a successful salvage claim. procedures and SOPEP plans. LOF is the most
If an agreement to tug assistance on "tariff" terms is commonly used and accepted salvage contract but
made then those terms should be clearly spelled out some insurers/owners/managers are more keen than
and recorded - preferably in writing or ifnecessary others to explore alternatives and masters should be
on tape (audio or Video). Masters and senior officers aware of any specific instructions in this respect.
should have in mind the useful guidelines and Extreme care should be taken when engaging
suggestions in the Nautical Institute publication, The assistance from harbour tugs to ensure terms of
Masters Rale in Collecting Evidence. Additional helpful engagement are clearly understood by all parties.


Annex 1 to Chapter 13 - L1oyd's Open Form

LOF 1995
LLOYD'S I. ,..~.I 0lIl_ '''fW'~'''''''''''''# ,., 1oMd,.· ...
{ .... ~"ffj".• •f\.ft\o .. odh~ IIw.'koo"".JtrJIIiJ
"i'" ...'"1' .... p"uM/.

1"Iw.·' .._ l..... '_.-<Jt,"'t.JFllttnrI~'"

,_"'t" ..,J,,,,, .,
.~ AI Jbt"
UfIJ ..sw......... rN A~JI' '.0
41aI,..... .# rIw )-"...... w • .,1 ,.. .dri,
p".... flit !wIlD" (1/ I4t: ('.",«"" liar ~.r( ......
~. 'l'"l'~·".. .• rNflfl ... "'IoU if .,.wnwI ", ;"Ir' ~
",,!ut( Pt..•,••", -;.~# -.J "'P 1IAIIIJ'!1" 11ft ..."do
""" Ill'" N'! Ittllaflllf' ,.,.IJ .\to .J;1c"kJ ... _.,. .••
~·"n,...,. ..... '~"'h_k

STANDARD FORM OF J }"'••, pIu.'~ !I UJ"HJ ,'" .'''~ .... I,J;'il.mJ

"'t""'~_' ~( ..
tt--J;., ,N~.r /'0.



On board the ........................................................... ..
Dal.d.................................. .

IT IS HEREBY AGREED between Caplain ..

for and on behalfofth. Owners ofthe her
cargo freight bunkers stores and any other property thereon (hereinafter collectively called "the Owners")
and ...................................................................... for and on behalf of... ............................................................... .
......................................................... ~hereinafter called "the Contractor" *) that:-

1 (a) The Contractor shall use his best endeavours:-

(i) to salve the "and/or her cargo freight bunkers

stores and any other property thereon and take them to s...................................................................or
to such other place as may hereafter be agreed either place to be deem ed a place of safety or ifno such
place is named or agreed to a place of safety and
(ii) while performing the salvage services to prevent or minimize damage to the environment.

(b) SUbject to the statutory provisions relating to special compensation the services shall be rendered and
accepted as salvage services upon the principle of Ino cure - no pay,"

(e) The Contractor's remuneration shall be fixed by Arbitration in London in the manner hereinafter
prescribed and any other difference arising out of this Agreement or the operations thereunder shall be
referred to Arbitration in the same way.

(d) In the event of the services referred to in this Agreement or any part of such services having been
already rendered at the date of this Agreement by the Contractor to the said vessel and/or her cargo
freight bunkers stcres and any other property thereon the provisions of this Agreement shall apply to
such services.

(e) The security to be provided to the Council ofLloyd's (hereinafter called lithe Council") the Salved
Value(s) the Award and/or any Interim Award(s) and/or any Award on Appeal shall be in
#. ............................................................currency.

(f) If clause l(e) is nol compleled then Ih. security 10 b. provided and the Salv.d Value(s) Ihe Award
and/or Interim Award(s) and/or Award on Appeal shall be in Pounds Sterling.

(g) This Agreement and Arbitration thereunder shall except as otherwise expressly provided be governed
by the law of England. including Ihe English law of salvage.
.11..2 ?l

2. Definitions: In this Agreement any reference to "Convention" is a reference to the International Convention
on Salvage 1989 as incorporated in the Merchant Shipping (Salvage and Poll uti on) Act 1994 (and any
amendment thereto). The teImS "Contractor" and "services"I"salvage services" in this Agreement shall have the
same meanings as the terms "salvor(s)" and "salvage operation(s)" in the Convention.

3. OWners Cooperation: The Owners their Serv.nts and Agents shall co-operate fully with the Contractor in
and about the salvage including obtaining entry to the place named or the place of safety as defined in claus e 1,
The Contractor may make reasonable use of the vessel's machinery gear equipment anchors chains stores and
other appurtenances during and for the purpose of the salvage services free of expense but shall not
U1mecessarily damage abandon or sacrifice the same or any property the subject of this Agreement.

4. Vessel OWners Rlght to Terminate: When there is no longer any reasonable prospect of a useful result
leading to a salvage reward in accordance with Convention Article 13 the owners ofthe vessel shall be entitled
to terminate the services ofthe Contractor by giving reasonable notice to the Contractor in writing.

5. (a) The Contractor shall immediately after the tennination of the services or sooner notify the Council
and where practicable the Owners of the amount for which he demands salvage security (inclusive afcosts
expenses and interest) from each ofthe respective Owners.

(b) Where a claim is made or may be made for special compensation, the owners of the vessel shall on
the demand of the Contractor whenever made provide security for the Contractor's claim for special
compensation provided always that such demand is made within two years of the date of termination of the

(c) The amount of any such security shan be reasonable in the light of the knowledge available to the
Contractor at the time when the demand is made. Unless otherwise agreed such security shall be provided (i) to
the Council (ii) in a form approved by the Council and (ii i) bypersons firms or corporations either acceptable to
the Contractor or resident in the United Kingdom and acceptable to the Council. The Council shall not be
responsible for the sufficiency(whether in amount or otherwise) of any security which shan be provided nor the
default or ins olvency OrallY peTS on firm or corporation providing the SlIIIle.

(d) The owners of the vessel their Servants .nd Agents shall use their best endeavours to ensure that the
cargo owners provi de their proportion of salvage security before the cargo is released.

6. (a) Until security has been provided as aforesaid the Contractor shall have a maritime lien on the
property salvedforhis remuneration.

(b) The property salved shan not without the consent in writing of the Contractor (which shall not be
unreasonably withheld) be removed from the place to which it has been taken by the Contractor under clause
l(a). Where such consent is given by the Contractor on condition that the Contractor is provided with
temporary' se eurity pending completion oftbe voyage the Contractor's maritime lien on the property salved shall
remain in force to the extent necessary to enable the Contractor to compel the provision of security in
accordance with claus e 5(c).

(c) The Contractor shall not arrest or detain the property salved unless:-

(i) security is not provided within 14 days (exclusive of Saturdays and Sundays or other days
observed as general holidays at Lloyd's) after the date of the termination ofthe services or
(i i) he has reason to believe that the removal of the property salved is contemplated contrary to
clause6(b) or
(iii) any attempt is made to remove the property salved contrary to clause 6(b).

(d) The Arbitrator appointed under clause 7 or the Appeal Arbitrator(s) appointed under clause 13(d)
shall have power in their absolute discretion to include in the amount awarded to the Contractor the whole or
part of any expenses reasonably incurred by the Contractor in:-

(i) ascertaining demanding and obtaining the amount of security reasonably required in accordance
with clause 5.
(ii) enforcing and/or protecting by insurance or otherwise or taking reasonable steps to enforce
andlor protect his lien.


7. (a) Whether security has been provided or not the Council shall appoint an Arbitrator upon receipt ofa
written request made by letter telex facsimile or in any other permanent form provided that any party requesting
such appointment shall if required by the Council undertake to pay the reasonable fees and expenses ofthe
Council and/or any Arbitrator or Appeal Arbitrator(s).
(b) Where an Arbitrator has been appointed and the parties do not proceed to arbitration the Council may
recover any fees costs andlor expenses which are outstanding.

8. The Contractor's remnneration andlor special compensation shall be fixed by the Arbitrator appointed
under clause 7. Such remuneration shall not be diminished by reason ofthe exception to the principle of"no
cure - no pay· in the form of special compensation.

9. Any party to this Agreement who wishes to be heard or to adduce evidence shall nominate a person in the
United Kingdom to repres ent him failing which the Arbitrator or Appeal Arbitrator(s) may proceed as if such
party had renounced his right to be heard or adduce evidence.


10. (a) The Arbitrator shall have power to;-

(i) admit such oral or documentary evidence or information as he may think fit
(ii I conduct the Arbitration in such manner in all respects as he may think fit subject to such
procedural rules as the Council may approve
(iii) order the Contractor in his absolute discretion to pay the whole or part of the expense of
providing excessive security or security which has been unreasonably demanded under Clause
5 (b) and to deduct such sum from the remuneration andlor special compensation
(iv) make Interim Award(s) including payment(,) on account on such terms as may be fair andjust
(v) make such orders as to costs fees and expenses including those of the Council charged under
clause, 10(b) and 14(b) as may be fair and jus!.

(b) The Arbitrator and the Council may charge reasonable fees and expenses for their services whether
the Arbitration proceeds to a hearing or not and all such fees and expenses shall be treated as part ofthe costs of
the Arbitration.

(c) Any Award shall (subject to Appeal as provided in this Agreement) be final and binding on all the
parties concerned whether they were represented at the Arbitration or not.


11. Interest: Interest at rate, per annum to be fixed by the Arbitrator shall (subject to Appeal as provided in
this Agreement) be payable on any sum awarded taking into account any sums already paid:-

(i) from the date of termination ofthe services unless the Arbitrator shall in his absolute discretion
otherwise decide until the date of publication by the Council of the Award and/or Interim
Award(s) and
(ii) from the expiration of21 days (exclusive of Saturdays and Sundays or other days observed as
general holidays at L1oyd's) after the date of publication by the Council of the Award andlor
Interim Award(s) until the date payment is received by the Contractor or the Council both dates

For the purpose of sub-clause (ii) the expression ·sum awarded" shall include the fees and expenses referred to
in clause 10(b),

12. CUrrency Correction: In considering what sums of money have been expended by the Contractor in
rendering the services andlor in fixing the amount of the Award and/or Interim Award(s) and/or Award on
Appeal the Arbitrator or Appeal Arbitrator(s) shall to such an extent and in so far as it may be fair and just in all
the circumstances give effect to the consequences of any change or changes in the relevant rates of exchange
which may have occurred between the date of termination of the services and the date on which the Award
and/or Interim Award(s) andlor Award on Appeal is made.

13. (a) Notice of Appeal if any shall be given to the Council within 14 days (exclusive of Saturdays and
Sunday, or other days observed as general holidays at Lloyds) after the date ofthe publication by the Council
of the Award andlor Interim Award(s).

(b) Notice of Cross-Appeal if any shall be given to the Council within 14 days (exclusive of Saturdays
and Sundays or other days observed as general holidays at Lloyd's) after notification by the Council to the
patties of any Notice of Appeal. SUch notification if sent by post shall be deemed received on the working day
following the day of posting,

(c) Notice of Appeal or Cross-Appeal shall be given to the Council by letter telex facsimile or in any
other permanent form,

(d) Upon receipt of Notice of Appeal the Council shall refer the Appeal to the hearing and determination
ofthe Appeal Arbitrator(s) selected by it,

(e) If any Notice of Appeal or Cross-Appeal is withdrawn the Appeal hearing shall nevertheless proceed
in respect of such Notice of Appeal or Cross-Appeal as may remain,

(f) Any Award on Appeal shall be final and binding on all the parties to that Appeal Arbitration whether
they were represented either at the Arbitration or at the Appeal Arbitration or not,


14, (a) The Appeal Arbitrator(s) in addition to the powers of the Arbitrator under clauses 10(a) and 11 shall
have power to:-

(i) admit the evidence which was before the Arbitrator together with the Arbitrator's notes and
reasons for his Award and or Interim Award(s) and any transcript of evidence and such
addi ti on al evi denc e as h e or they may thi nk fit,
(i i) confirm increase or reduce the sum awarded by the Arbitrator and to make such order as to the
paym en t of in terest on such sum a; he or they may thi nk fit
(iii) confirm revoke or vary any order and or Declaratory Award made by the Arbitrator,
(iv) award interest on any fees and expenses charged under paragraph (b) of this clause from the
expiration of 21 days (exclusive of Saturdays and Sundays or other days observed as general
holidays atLloyd's) after the date ofpublication by the Council of the Award on Appeal and/or
Interim Award(s) on Appeal until the date payment is received by the Council both dates

(b) Tbe Appeal Arbitrator(s) and the Council may charge reasonable fees and expenses for their services
in connection with the Appeal Arbitrati on whether it proceeds to a hearing or not and all such fees and expenses
shall be treated as part of the costs of the Appeal Arbitration,

15. (a) In case of Arbitration if no Notice of Appeal be received by the Council in accordance with clause
13(a) the Council shall call upon the party or parties concerned to pay the amount awarded and in the event of
non-payment shall subject to the Contractor first providing to the Council a satisfactory Undertaking to pay all
the costs thereof realize or enforce the security and pay therefrom to the Contractor (whose receipt shall be a
good discharge to it) the amount awarded to him together with interest if any, The Contractor shall reimburse
the parties concerned to such extent as the Award i, less than any ,urn, paid on account or in re'pect of Interim

(b) If Notice of Appeal be received by the Council in accordance with clause 13 it shall as ,oon as the
Award on Appeal has been publi'hed by it call upon the party or partie, concerned to pay the amount awarded
and in the event of non-payment shall subject to the Contractor first providing to the Council a satisfactory'
Undertaking to pay all the cost, thereof realize or enforce the ,ecurity and pay therefrom to the Contractor
(whose receipt 'hall be a good discharge to it) the amount awarded to him together with intere,t if any, The
Contractor shall reimburse the parties concerned to ,uch extent as the Award on Appeal i, less than any sums
paid on account or in respect ofthe Award or Interim Award(s),

(c) If any sum shall become payable to the Contractor as remuneration for his services and/or interest
and or costs as the result of an agreement made between the Contractor and the Owners or any of them the
Council in the event ofnon-payment shall subject to the Contractor first providing to the Council a satisfactory-
Undertaking to pay all the costs thereof realize or enforce the security and pay therefrom to the Contractor
(whose receipt shall be a good discharge to it) the said sum,

(d) If the Award and/or Interim Award(s) and/or Award on Appeal provides or provide that the costs of
the Arbitration and/or of the Appeal Arbitration or any part of such costs shall be borne by the Contractor such
costs may be deducted from the amount awarded or agreed before payment is made to the Contractor unless
satisfactory security is provided by the Contractor for the payment of such co,ts,


(e) Without prejudice to the provisions of clause 5(c) the liability ofthe Council shall be limited in any
event to the amount of security provided to it.

16. Scope of Aulhority. The Master or other person signing this Agreement on behalf of the property to be
salved enters into this Agreement as agent for the vessel her cargo freight bunkers stores and any other property
thereon and the respective Owners thereof and binds each (but not the one for the other or himselfpersonally) to
the due performance thereof.

17. Notices: Any Award notice authority order or other document signed by the Chairman of Lloyd's or any
person authorised by the Council for the purpose shall be deemed to have been duly made or given by the
Council and shall have the same force and effect in all respects as ifit had been signed by every member ofthe

18. Sub-Contractor(s)'. The Contractor may claim salvage and enforce any Award or agreement made
between the Contractor and the Owners against security provided under clause 5 or otherwise if any on behalf
of any Sub· Contractors his or their Servants or Agents including Masters and members of the crews of vessels
employed by him or by any Sub·Contractors in the services provided that he first provides a reasonably
satisfactory indemni ty to the Owners against all claims by or liabilities to the said persons,

19. Inducements prohibited: No person signing this Agreement or any party on whose behalfit is signed shall
at any time or in any manner whatsoever offer provide make give or promise to provide demand or take any
form of inducement for entering into this Agreement.

For and on behalf of the Contractor For and on behalf of the Owners of property to
be .alved.

(To be signed by the Contractor personally or by the (fo be signed by the Master or other person whose
Master of the salving vessel or other person whose name is inserted in line 1 ofthis Agreement)
name is inserted in line 4 ofthis Agreement)


The following provisions of the Convention are set out below for information only.

Arlh~lc I


(a) Salvage opell1tion means any act or activity undertaken to assist a vessel or any other property in
danger in navigable waters or in any other waters whatsoever
(b) Vessel means any ship or craft, or any structure capable ofnavigation
(c) Property means any property noc permanently and intentionally attached to the shoreline and includes
freight at ri sk
(d) Damage to the envirOl'lmeni: means substantial physical damage to human health or to marine life or
resources in ooastal or inland waters or areas adjacent thereto, caused by pollution, contamination, fire,
explosion orsimilarmajor incidents
(e) Payment means any reward, remuneration or compensation due under this Convention

Salvage Contracts

1. This Convention shall apply to any salvage operations save to the extent that a contract otherwise provides
expressly orby implication

2. The master shall have the authority to conclude contracts for salvage operations on behalf of the owner of
the vessel. The master or the owner of the vessel shall have the authority to conclude such contracts on behalf
ofthe owner of the property on board the vessel

Article 8

Duties of the Salvor and of the Owner and Master

1. The salvor shall owe a duty to the owner of the vessel <:c other property in danger:

(a) to callY out the salvage operations with due care;

(b) in performing the duty specified in subparagraph Ca), to exercise due care to prevent or minimize
damage to the environment;
(c) whenever circumstances reasonably require, to seek assistance from other salvors; and
Cd) to accept the intervention of other salvors when reasonably requested to do so by the owner or master
of the vessel or other property in danger; provided however that the amount of his reward shall not be
prejudiced should it be found that such a request was unreasonable

2. The owner and master of the vessel or the owner of other property in danger shall owe a duty to the
Ca) to co-operate fully with him during the course of the salvage operations,
(b) in so doing, to exercise due care to prevent or minimize damage to the environment; and
Cc) when the vessel or other property has been brought to a place of safety, to accept redelivery when
reasonably requested by the salvoc to do so
Adlde 13
Criteria for fixl ng th e reward
1. The reward shall be fixed with a view to encouraging salvage operations, taking into account the
following criteria without regard to the order in which they are presented below;
Ca) the salved value of the vessel and other property;
(b) the skill and efforts of the salvors in preventing or minimizing damage to the environment;
(c) the measure of success obtained by the salvor;
Cd) the nature and degree of the danger;
Ce) the skill and efforts of the salvors in salving the vessel, other property and life;
(f) the time used and expenses and losses inculTed by the salvors;
(g) the risk ofliabilityand other risks run by the salvors ortheir equipmen~
(h) the promp in ess ofth e serv ices rend ered;
(i) the availability and use of vessels or other equipment intended for salvage operations;
(j) the state of readiness and efficiency ofthe salvor's equipment and the value thereof

2. Payment of a reward fixed according to paragraph 1 shall be made by all ofthe vessel and other property
interests in proportion to their respective salved values

3. The rewards, exclusive of any interest and recoverable legal costs that may be payable thereon, shall not
exceed the salved value of the vessel and other property
Article 14
Special Compensation
1. If the salvor has carried out salvage operations in respect of a vessel which by itself or its cargo threatened
damage to the environment and has failed to earn a reward under Article 13 at least equivalent to the special
compensationassessable in accordance with this Article, he shall be entitled to special compensation from the
owner ofthat vessel equivalent to his expenses as herein defined

2. If, in the circumstances set out in paragraph 1, the salvor by his salvage operatioos has prevented or
minimized damage to the environment, the special compensation payable by the owner to the salvor under
paragraph 1 may be increased up to a maximum of3001o of the expenses incuITed by the salvor. However, the
Tribunal, if it deems it fair and just to do so and bearing in mind the relevant criteria set out in Article 13,
paragraph 1, may increase such special compensation further, but in no event shall the total increase be mere
than 100% of the expenses incurred by the salvor

3. Salvor's expenses for the purpose of paragraphs 1 and 2 means the out-of-pocket expenses reasonably
incurred by the salvor in the salvage operation and a fair rate for equipment and personnel actually and
reasonably used in the salvage operation, taking into consideration the criteria set out in Article 13, paragraph
I(h), (i) and Gl
4. The total special compensation under this Article shall be paid only if and to the extent that such
compensation is greater than any reward recoverable by the salvor under Article 13

5. If the salvor has been negligent and has thereby failed to prevent orminimize damage to the environment,
he may be deprived of the whole or part of any special compensation due under this Article

6. Nothing in this Article shall affect any right of recourse on the part ofthe owner ofthe vessel


Chapter 14
by Cdr RL. TaUack RNR RD* BSc FNI, NorthsCar Maritime and Environmental Consultancy

Rober! Tallack is a master mariner whojJllowed service on a variety afgeneral cargo, passenger and refrigerated vessels with wide
experience afcommercial and technical management within the shipping industry. He graduo.ted in maritime studiesfollowmg a course
in commercial shipping at Cardiff University offer which hejoined Lambert Brothers as a Sole and Purchase bro""r.
He was then appointed a general manager jor the MtJersk Company and subsequently as managing director afa short-sea ferry
operation. Two years establishing ajoin/; venture in Romania and subsequently acting as advisor to the Minister ofShipping brought an
understanding ofboth the problems and thepotentiai a/working within centralised economies.
Rober! Tallack now rum Northstar Maritime and Environmental Consultancy. He is both a vocational assessor and ISMIISO

Introduction in a consequential shift oflarge parts of the managerial

ALTHOUGH THE OVERRIDING commercial objective of - and administrative - workload from the office to
the shipping induslly is, quite reasonably, to make a the vessel. Whether this is seen as problem or potential
profit; for many at sea it may well feel that owners by those at sea is a matter of circumstance and
and managers concentrate more on reducing daily temperament.
operating costs than in striving to deliver a better and
more efficient service. This cost cutting approach finds Potential
expression in many ways, from a creeping reduction For it to be seen as potential and for this potential
in the maintenance resource to the provision ofmixed to be realised, the master must understand the
crews of limited cohesion and an uncertain commercial dynamics of ship operations and, to a
competency - far too frequently followed by that early certain extent, international trade. He, or she, will need
casualty of belt-tightening; cuts in the training budget. to develop a wider perspective, learn to apply existing
All this provides an increasing challenge for the - and some new - knowledge in different ways and
professional master. to forge new relationships and lines of communication.
This can be difficult, for the usual lines of
Changing rules and regulations communications run to those ashore whose remit is
The rewards of command have also been predominantly technical and whose own horizons are
constrained by a seemingly never ending flow ofrules bounded by the need to keep within budget and meet
and regulations, policies and procedures and surveys all regulatory criteria. Indeed, even when one
and inspections which fill the modern master's penetrates beyond the technical operating area to that
horizon. Like a small light at the end of the tunnel, commercial 'cutting edge' of the chartering
there do now seem to be the signs ofa change. On the department, one may find that five cents on the charter
legislative side, the ISM Code has redefined the rate frequently outweighs the profit potential of
crucially important relationship between the shore optimum performance and good customer service,
management team (now legally identified through the generated through effective cooperation.
'designated person') and the mruter and his team on
board. At the same time, the master's authority, as Masters, depending upon their early maritime
well as his responsibilities, have been underwritten education, their temperament and experience and
and a recognition of the need for adequate resources their current employment may well see their
also forms part of the Code. professional role on a scale which runs roughly and
not in a particularly straight course, from high grade
These developments, it is suggested, open a technical bus driver' to, if not 'Master under God', at
window of opportunity, perhaps more in some trades least a manager who shapes his professional de!>tiny.
than others, for the master to play a more active role This chapter is designed to provide a brief overview
in the commercial as well as the technical operation of those areas, some familiar some possibly less so,
of his vessel and consequently in the overall activities where the professional mariner may need to re-focus
ofthe company. This window of opportunity is opened his (and her) knowledge and develop new ways of
further in many cases, by the fact that recent reductions applying their skills. Some of these will be in the
in manning have extended beyond the vessel and cut technical 'ship driving', predominantly cost dominated
into the shore management orgrurisation, leaving a areas and some in the commercial 'ship trading' and
reduced resource there as well. These reductions are predominantly income earning areas. The contention
only partially offset by the expansion ofinformation is that key to success is the effectiveness ofthe bridge
technology and communications and this has resulted between these two areas of activity and their

counterparts ashore. This chapter also argues, that the in dry-dock at their expense for an underwater
master's role requires his active participation in making inspe'ction by a classification society surveyor,
and managing these links and that, except in moments surVey ing strictly in accordance with class rules.
of dire emergency, every technical operation has a
commercial perspective. There is a delicate relationship here between seller,
class surveyor and buyer. The buyer's representative
The alpha and the omega will naturally be interested in any borderline decision
The life of every ship starts in the shipyard, either on whether' an item, rudder, propeller, etc., needs
as a design crafted to a particular owner's requirements repair falling in their favour, 'and influence on the
or as a standard shipyard design and almost inevitably chlssificatiori society about the future class ofthe vessel
ends in demolition - the alpha and the omega. Along is not unknown. At this stage, the surveyor is still
theway, its life will frequently be marked by anumber technically a servant ofthe seller, tasked to act (as they
of changes of ownership, bringing with them different always should) as an independent arbiter. Both the
maintenance and manning regimes and different master and chief engineer will need to monitor and
operating standards and procedures. Each change of perhaps manage this aspect of the delivery process
ownership will also bringthe sadness ofparting - and closely; substantial costs can be incurred or avoided
possibly the depressing prospect of redundancy - to dep ending upon the surveyor's decision.
one crew and new challenges and possibilities to
By delivery, the master will need to have ensured
another. Despite the strong feeling of continuity
that all owner and leased items, not staying with the
enjoyed by many, mainly northern European, liner
vessel, are packed and landed. Professional courtesy
companies over the period 1945 - 1970, this is the
requires that he should also endeavour to prepare a
natural background to seafaring. For many ship
comprehensive handover to his successor. The 'actual
owners, selling vessels on a high market and buying
handover and delivery frequently happens at difficult
on a low is an important, ifnot the most important,
times of the day, which means that communications
source of ship related revenue and has ensured that a
can be a problem and attention needs to be given to
number of companies have survived difficult times
establishing good communications, with backup, to
when others have gone to the wall. There are three
wherever the documentary, as opposed to physical,
points at which the master can have an impact on the
delivery of the ship will take place.' Since the transfer
successful outcome ofthe sale process .
ofUS dollars is usually cleare'd through the New York
The first is the arrival on board of a potential banking system, delivery will probab Iy take place
buyer's inspector. The master, by this time, should during American (east coast) banking hours. .
have received instructions as to the level of the
At the documentary delivery, representatives of
inspector's rights of inspection. Certainly, he will be
buyer and seller will meet, probably for the firsttime
able to inspect and take photocopies oflog books and
and quite probably in an anonymous meeting room
certificates. The extentto which he may require ballast
in an international bank. Sellers will have a Bill of
tanks, cargo spaces, or, indeed parts of the machinery
Sale, duly notarised and perhaps attested by the flag
to be opened up, should be clearly defined in the
state. Buyers will have a draft for the balance of the
owner's letter of instruction. Frequently, this
purchase money and a letter releasing the (usually 10
permission will be given on the basis of 'no d'elay or
per cent) deposit from ajoint escrow account to the
expense to the vessel' .
sellers. The sellers will be anxious for proof that the
Inevitably, before the inspector arrives, an buyer's draft is 'good for value' and the buyers will be
inspection of the vessel's classification records will nervous about releasing large amounts of money for,
have been undertaken. The inspector can be expected for them, a relatively unknown asset. There are two
to focus on potential problem areas that have been areas which cause concern. The first is that the sellers,
identified from the inspection ofrecords. The master if they had a loan secured against the vessel, would
should neither conceal nor volunteer information but have wanted to raise the loan and release the mortgage
present the vessel in the best possible light. This will as late as ,Possible although the Bill of Sale and' a
inevitably require planning with the other involved transcript of the vessel's registry entry should prove
heads of departments on board and members of the this. At'the same time, the buyers (and their lending
crew will need to be briefed not to 'volunteer' bank) will want to attach a mortgage to the vessel as
detrimental information about the vessel and its quickly as possible. Both buyers and their bank will
equipment. be very keen to ensure that there are no lingering
claims or liens attaching to the vessel. '.
The next stage comes as the vessel is prepared for
delivery. Usually, though not always, a v'essel will be The other area of possible conflict is payment for
delivered in port and the terms of the sale contract bunkers remaining 011 board at delivery ~ During the
(the Memorandum of Understanding or MoU) will sale negotiation, the cost per tonne of the bunkers will
determine if and how dry docking is handled. have been argued, and n'ot always amicably, agreed.
Generally the sellers will be required to put the vessel During the lead ul? to delivery, estimated bunkers on


delivery will have been requested from the vessel and as much of the relevant information as possible. In
advised by the seller to the buyer. The buyer has the other words it is a team task in which the master should
responsibility of organising payment, on the day of involve his shipboard management team.
delivery, of the exact amount. The fact that after the
vessel has settled on the blocks in dry dock and a new If the team is going to participate in a practical
round of soundings (plus the last 24 hours' and meaningful way, they will need to be properly
briefed. In other words, a prerequisite of proper
consumption and the final revaluation ofwhat the chief
engineer had up his sleeve), has changed the estimated planning is good communication. In many
management systems, information equates to power
RoB by 3-7 tonnes according to the sellers and 5-3
and influence, so disseminating information can be a
tonnes according to the buyer's representative can
difficult process. It also means that the decision making
cause inordinate delays and tension. The master and
process is much more open and potentially subject to
chief engineer(s) should arrive at a firm and fair
criticism - no longer is it the unchallenged word
compromise as soon as possible.
emanating from the ivory tower of seniority.
As soon as agreement is reached, both on board
This shift in the process of decision-making from a
and at the location ofthe documentary delivery that
closed to an open forum can be difficult. Initially, for
all is in order, Protocols of Delivery will be signed at
many, it may feel like abdicating the responsibility of
both locations, stating the exact time of delivery. This
leadership but, in effect, it is only moving it into public
time is important to both parties as the final act is to
lift the seller's insurance and attach the buyer's cover, view. When all the information is gathered and all the
although this is usually done on a 'held covered' basis, advice and opinions assessed, it remains the master
with the exact time to be confirmed. who has to draw it all together and select the correct
course of action. Doing this in a forum where a
Management and managing people decision can be judged and even criticised takes both
The sale or purchase ofa vessel represents more courage and professional competence.
than just an ending or a beginning. It represents a These ~ills really need to be learned as the young
major event which needs to be properly project officer is promoted to the managerial role of chief
managed. In fact, the operation ofa vessel throughout officer. The good master, therefore, is not just a
its life is a succession of events, large or small, practitioner of these skills, he is also a teacher. In order
frequently repetitive but each unique in time and to achieve this, he needs to develop a range of
circumstance, which require proper management. As attributes starting with not just a good command of
such, they all need to be properly planned and each basic facts but also the relevant professional
plan, whether it be large or small, unique or routine, understanding to display them effectively. The master
warrants a careful and structured approach. also needs to be sensitive to changing events, including
The first and critical step in planning is the developing technology, knowing when to set aside the
collection, collation and assessment of information. old and familiar as well as when not to be seduced by
One of the major reasons why plans fail is because the new but unproved. This requires good analytical
insufficient time is allowed for planning and in the skills.
busy, time pressured life ofa ship's master, this is easy The open forum of team based management
to understand. Another, important reason why mentioned earlier, as well as the master's unique
planning fails is because it is given a low priority command role in emergency situations, will demand
because the task is ~ust routine',just another passage, highly developed problem-solving, judgement and
just another port. It is essential to remind oneself that decision making ~ills. The master's role and the fact
nothing is ever quite the same - it may be the weather that however he manages, he is in command, demands
or it may be the composition of the bridge both emotional resilience and social skills. The need
management team, or it might be a small equipment to plan and initiate will require pro activity and the
fault. Anyone of these may trigger a sequence of inclination to respond purposefully to events.
events which lead to a critical situation or even amajor Creativity and mental agility together with the
accident. How many times has a major incident discipline to continue learning and developing skills,
appeared to be the result ofan apparently coincidental are the hallmark of the good manager as is the critical
sequence of minor events? assessment of oneself as a manager and a person -
self-knowledge or 'knowing thyself.
Identifying and guarding against these incidents is
where risk management should be woven into the Knowing thyself, understanding one's own
planning process. The first steps of hazard strengths and weaknesses, demands a high level of
identification - This is anew third mate' - and ri~ both honesty and commitment. The analytical
assessment - 'How competently can he or me fit into techniques which can help in this process are similar
my team?' may be time consuming, but they are to those that can help the master understand the
essential for good management. The process of hazard strengths and weaknesses of the officers and ratings
identification is based upon the principle of gathering who make up his management team and work force.

A number of the most commonly used methods of There are a numb er of other aspects of
analysis divide people's characteristics between four communicating and of managing people in teams
areas of attributes, with one usually dominant but not, which a good manager needs to know, covering such
generally, totally so. A master might consider whether diverse aspects as communicating effectively on paper,
his officers, his managers, are predominantly: managing meetings and negotiating. A manager today
needs new interpersonal skills just as he or she needs
• lbInkers new technical skills. If there are doubts about this
who are good at facts and figures, researching,
consider how both parent-child and employer-
systems analysis, and will probably be good at
employee relationships have changed over the past
setting up the on board computers. 'How?'
half century.
• Sensors Management information systems
who are good at initiating projects, setting up deals, One of the skills which today's manager needs is
troubleshooting and converting ideas into action. the ability to manage the vast amounts of information
"What?' questions. which the electronic age has spawned. In many ways,
• Intuitors this consists of sifting the wheat from the chaff One
who are good at long term planning, creative of the areas in which management information can
writing, lateral thinking and brainstorming - and
be more readily and more rapidly managed by
who are probably well able to manage change.
computer power, is an organisation's financial
'Why?' questioners.
perfonnance. There are a number of problems
Feelers .associated with this as well as obvious benefits.
who are good at developing and cementing
relationships, counselling, arbitrating - and will It might be argued that computer based accounting
converse as happily with a stevedore as with a has given 'the accountant' undue influence within
:ship owner.'Who?' questioners. .shipping companies and focused decision making too
Useful as these aids may be, people are complex far towards the cost side of the equation rather than
and there is a real danger in labelling people on the income or commercial side. It is dangerous to
inaccurately. These techniques are an aid to generalise but part of the reason for this is that
understanding and managing people, as with aids to .accountancy feels happier working with cost figures.
navigation, they can be invaluable but need to be They are in general terms both 'dead' figures and
·checked by visual observation at frequent intervals. factual- they represent what has happened and stay
where they are put (figuratively speaking). The
The better the master understands the technical database ofhistorical fact makes an excellent
·characteristics of his officers, the better able he is to platform for future projection.
build an effective and efficient management team on
board. With reduced - and mixed - manning, a Income figures, however, are alive and can be more
properly managed team approach is arguably the best, problematical. They carry an aura of commercial
if not the only way in which to make best use the 'confidentiality, defY easy prediction, are cyclical and
human resource at the vessel's disposal. not under the owner's control and are associated with
Communication is a key element in achieving this. difficult concepts like quality ofservice. Forthisreason,
management information systems in the shipping
The greatest mistake made about communicating industry and consequently the managerial ethos
in a business environment is in considering it as a one frequently concentrates on cost based accounting.
way flow - down the chain of command.
Communication is the way in which management 'Conversely, one of the benefits of computer power
makes its needs and requirements known. It is also is the ease with which electronic data can be
the way in which other employees make their needs transferred from place to place. This, coupled with
and desires known too. It is important to them that the reduction in shore-based management staff has
their voices are heard in a considerate way. At the seen the ship's staff becoming increasingly involved
very least, their message might contain information in and aware of the cost side of vessel operations. For
which will improve the master's decision making. this involvement to be effective and professionally
In a multi-cultural environment such as a ship, the :satisfying, authority needs to pass together with
proper use oftwo way communication becomes even
more important, for the meaning contained within the ()ne of the skills which the master and his team
-communication has to survive, not only translation need in order to assimilate this extension ofmanagerial
but also cultural differences. Whatever the culture, a responsibility is the management ofbudgets. This has
golden rule of communication is to take the time and two major aspects:
trouble to work out what information the other person
needs to know in order to enable them to carry out Building the budget and monitoring.
the required task efficiently. Managing expenditure.


Here might be mentioned one of the potential although they can be trimmed. This might be by laying
problems of budgets and the associated information the vessel up or, too many seafarers will be aware, by
system. A budget, like a passage plan, is there for cutting maintenance, personnel, training or other
guidance. They can indicate whether a vessel is off similar costs.
course (or budget) but not necessarily whether this is
There are many different ways of marshalling
good or bad. One does not sail through a maj or storm
operating (or technical) costs but whatever way they
just because a line drawn on a chart five days
previously takes the vessel through the storm's current are arranged, they should include:
location. In a similar way, safety requirements, as Personnel costs: the salary cost of sea-staff, the cost
opposed to routine maintenance, can defy budget of filling the berths on board 365 days a year,
constraints but,just as a vessel cannot steam ifshe has thereby taking into account overlap and leave pay
no bunkers, so she cannot be technically operated if as well as the associated social costs of pensions,
there are no funds. health insurance and employment taxes.
The analogy can be developed further. A master Shifting costs: or the costs of travel to and from a
will endeavour to use his navigational skills to achieve crew change. The size of this can be affected by
the best set of speed and consumption figures for a changes in the vessel's trading patterns and
voyage, with the least possible use of that cost item, reduces the longer crew members say on board.
bunkers. In a similar way, the master needs to use his Repair and maintenance costs: a large budget area
which subdivides logically into a range of sub-
managerial skills in order to deliver the best possible
technic al operation of his vessel within budget areas and responsibilities. Budgeting in this area
constraints. The effective budget manager should has a strong historical/statistical basis and relates
know where he has some flexibility to adjust budgeted to assumptions on trading patterns and machinery
expenditure and must bear in mind that if economic running hours. This is a cost area which will be
conditions change, so might the vessel's economic affected by the corporate philosophy of the
course. Unfortunately, the 'accountancy approach' to company ranging from 'repair when essential and
budgeting means that adjustments are all too keep the maintenance costs down' to a 'maintain
frequently on the cost reduction side and good propedy and reduce the need for repait' approach.
commercial, or trading results are far too infrequently Stores and spares: an area where careful thought
fe d back into the equation. and analysis can save money by differentiation
between high and low cost components and those
Vessel costs, or the costs which must be covered that are essential (ship stoppers) and less essential
by the income which the vessel must earn, can be spares. Put another way, thoughtful stock keeping.
logically divided into three areas. The first and perhaps The overstocked vessel is effectively carrying
the most remote from the seafarer's point of view, are 'dead'resources-ineffectivelytiedupfundswhich
the finance costs which relate to the cost of having should be working for the vessel and for the
purchased the vessel. company.
Lubricating oils: an element usually borne in this
This budget area would typically include the
sector of the budget and directly related to the
interest due for payment during a given budget period,
expected use of individual machinery items and
on any bank or other loan that had been used to
to the vessel's anticipated trading pattern. This is
support the purchase the vessel. On a statutory
accounting basis, it would also include an allocation an area where a good link between commercial
planning and technical operation can make
ofthe vessel's depreciation over whatev er realistic life
the vessel is allocated (typically 15 -20years) reducing effective savings by increasing or reducing the
to a residual value of, perhaps, ten percent of the lubricating oil stock depending upon the expected
vessel's original cost. Perhaps more useful from a trading pattern.
management accounting point ofview is the true cash- Victualling and Pantry Stores: usually handled
flow picture achieved by replacing the depreciation separately from the general stores and again an
by loan instalment repayments falling due during the area where advance notice of anticipated trading
budget period in question. pattems can contribute to cost savings.
Insurance: covering hull insurance, the vessel's
In many cases, the financial aspects of the vessel's entry into a P & I Club (liability insurance), war
budget will be dealt with, corporately within the risk insurance, etc., either as a direct cost or an
organisation. Nevertheless it is important to remember allocation from afleetpolicy. It is always essential
that the vessel carries these costs every minute of every to remember that insurance, which imposes a high
day, whether on hire or idle, laid up or operating. cost item on the operational budget, never does
The next budget area covers the operating or more than recompense the owner for part of the
technical costs - typically the block of costs which true cost of an accident- the inevitable 'perils of
would be covered by a ship manager. Again these costs the sea' or the less inevitable negligence ofmaster
must be borne before the vessel has earned a cent, or crew. The true cost of an accident is invariably

higher than the claim, especially when the loss of provider. The glob alisation of industry and its
(potential earning) time and the call ofmanagerial manufacturing and processing facilities both drives and
resources is taken into account. is driven by shipping's ability to deliver a fast and
Franchise: this is an allocation in the budget to efficient maritime link in an increasingly complex
account for the insurance deductible or excess, logistical network. The first major contribution to
the most obvious part of an insurance claim not industrial globalisation was in the form of the
refunded or indemnified by the insurer but not, economies of scale provided by the introduction of
as indicated, the only uncovered cost arising from the very large raw material carriers in the late sixties
an accident. (both VLCC and Panamax and Capesize dl)' bulk
carrier). This, despite frequent and often quite violent
Over and above this range of direct costs will be freight rate fluctuations, effectively pegged the cost of
another block, sometimes referred to as overheads, transp orting low value raw materials, particularly
which relates to costs which might be spread over the crude oil, iron ore and stearn coal at a level which
fleet or a particular class ofvessel or which might have allowed other factors to determine where primal)'
implications going beyond that budget period, Costs processing, heavy industrial manufacturing and energy
oftraining may appear here together with the costs of generation would take place.
modifYing or upgrading the vessel to ensure continued
compliance with national and international rules and This was followed by containerisation and other
regulations. There may also be an allocation oftime forms of specialised carrier (such as the pure car
and travel costs for superintendents or other shore staff carrier) which, in a similar way, enabled other factors
visiting the vessel. than transportation cost and time to play a greater
role in the location of the lighter end of both
Finally, the shore establishment costs need to be
manufacturing and processing industl)'. These other
apportioned and allocated across the vessels in the determinants include the cost and availability of an
fleet or, in the case of management, this may be efficient work force and a national governments'
replaced by a ship management fee.
willingness to support the financing of the necessal)'
The third area of the vessel's budget covers the means of production (or factories to use a slightly
operation of trading the vessel and is of critical outmoded term). These decisions were overlaid in
importance, since it is the only sector of the whole certain cases by the need to locate final manufacture
budget which includes an income. This income may within regional trade barriers in order to ensure tariff
come from charter hire (voyage or time) or from direct free access to markets. As a result, the components in
freight income (container rates etc.) or from passenger a manufactured item may have made a number of
fares. The costs associated with a vessel's trading substantial maritime journeys from raw material
budget cover such items as bunkers, port costs and through semi-finished components to final product
cargo-handling costs (except of course when on time before that product finally reaches its market place.
To a large extent, the cost of multiple maritime
charter). Unfortunately, and not always necessarily,
transportation is offset by an endeavour to keep
little of the information about a vessel's trading
stockpiles as low as possible and the means ofdelivery
performance reaches the master and his offic ers. The
as fast and flexible as possible - the basis of 'just in
pretext is generally 'commercially confidential
time' delivel)' systems.
information' although charter rates, to within a few
cents, are generally well known to those competing in Over this pattern must be laid the major
similar markets. uncertainties which disturb, to a greater or lesser
extent, the logistics manager's endeavours to establish
This lack of information is a pity because the master
a steady supply train. Climate is one major factor,
and his team can make a very real contribution to the
which has its impact in two areas. Warm or cold
trading performance ofthe vessel in one ofthe key
(mainly northern hemisphere) winters have a direct
areas where customer service is, or should be,
effect on the demand for (liquid) bulk transportation
delivered. It is also the area in which the time pressures
which ripples through into the dry bulk sectors as
imposed by commercial trading requirements translate
combination carriers are drawn in or released. On the
into a heightened risk profile which can flow through
dl)' bulk side, it is the agricultural production of staple
the technical operation ofthe vessel. It is The Nautical
food crops - the rice and grain harvests - which
Institute's contention that this is an area where a much
directly affect vessel demand and freight rates.
greater involvement of the sea staff, coupled with a
International and regional conflicts, trade barriers and
wider understanding of the commercial aspects of the
tariff disputes as well as regional fluctuations in
ship operation, would be beneficial.
demand all impact back on the demand for shipping
Trading and contracts of affreightment services. Crucially, too, against this picture of a
The first part of commercial understanding comes monolithic, global trading system, there are new
from the recognition ofwhat drives international trade markets emerging and ever changing opportunities for
and shipping's role as an, albeit critical, service traders to take advantage ofinequalities in the market.


The first concrete stage in the process which leads Running parallel with this negotiation is the
to the movement of goods and thus directly to the decision of how and when the buyer will pay for the
employment of shipping is the negotiation of the sale goods - again a decision linked directly to the transfer
contract. It is at this level that the division of risks oftitle and risk and through this directly to the bill of
between buyer and seller is negotiated and the result lading and the actions ofthe master- even though no
of this negotiation of the terms of trade flows right vessel may yet have been contracted for the eventual
through the twin aspects of the logistical chain; the carriage of the goods. Probably the most common
physical movement ofthe goods and the financing of method offinancing international trade is the deferred
and payment for the goods (and their transportation). credit!. The key and critical point to comprehend is
Central to the buyer-seller negotiation is the decision that this financial transaction is only linked to the
ofwhen risk in and title to the goods will change hands physical activity of transporting and delivering the
and how this relates to the payment for the goods (and goods by paper - or more accurately, on what appears
their transportation). The outcome of this negotiation on a set of specified documents, of which the bill of
decides who will contract the shipping services (either lading is central, and whether the wording on these
through chartering-in tonnage or through the use of a documents agrees with what was agreed both in the
'common carrier' or liner service) and also indirectly sale contract and when the deferred credit facility was
affects that other 'evidence of a contract of put in place.
affreightment'the bill oflading.
Not surprisingly, the seller agreed to provide a
The terms oftrade range from 'Come and collect certain quality and quantity of goods, in (apparent)
from my factory gates' to I will deliver it to you.' The good order and condition. The buyer and seller may
International Chamber of Commerce has codified the well have established a date by when the goods should
scale of variations into thirteen 'Incoterms' (from Ex be shipped on whatever vessel is eventually contracted
Works to Delivery Duty Paid) and into four main to transport the goods and frequently this date is used
groups (see figure 14.1).

Guide to Documentary Credit Operation: International Chamber of Commerce

Group B: Departure
EXW Ex Works (named place)

Group F: Main carriage unpaid: F signifies that the seller must hand over the goods to the nominated
carrier free of risk and expense to the buyer.
FAC Free Carrier (named place)
FAS Free Alongside Ship (named port of shipment)
FOB Free on Board (named port of shipment)

Group C: Main carriage paid: C signifies that the seller must bear certain costs even after the critical
point for the division of risk for loss or damage has been reached.
cm Cost and Freight (C&F) (named port of destination)
elr Cost Insurane e and Freight (named port of destination)
epr Carriage Paid to (named port of destination)
elP Carriage and Insurance Paid to (named port of destination)

Group D: Arrival: D signifies that it is seller's responsibility that the goods arrive at the stated destination.
DAF Delivery at Frontier (named place)
DES Delivery ex Ship (named port of destination)
DEQ Delivery ex Quay (Duty Paid) (named port of destination)
DDU Delivery Duty Unpaid (named port of destination)
DDP Delivery Duty Paid (named port of destination)

Figure 14.1 Four main groups of lncaterms

to set a price against an international index or to meet concerned, it needs to confirm that the quality,
contractual obligations to ship so many tonnes per quantity and condition of the goods are as described
month. The bank, which may be but one in a chain under the original sale contract. At the operational
involving confirming banks as well as the buyer's and level it is also evidence of the contractual
the seller's (different) banks has only one criterion responsibilities of the ship owner for the 'safe carriage
against which to release what may be many millions and delivery of the goods' towards whoever might be
of dollars in payment for goods it has never, and will the legal owner of those goods. As has already been
never see. mentioned, the person or persons to whom the master
and ship owner hold this responsibility may change
This single criterion is 'Do the documents as title in the goods is sold and resold and may well
presented to me exactly match, word for word, the be unknown, in direct contractual terms, to the carrier.
documents specified by the buyer when the credit was
raised?' To add another layer ofrisk, since the goods The master's management of his vessel may also
may have been sold and resold, the person presenting be determined by one, ifnottwo, charter parties, each
the documents necessary to trigger payment and of which, time and voyage, may have a different
release the cargo, including one (only) of probably impact and require different decisions. At one level,
three original bills of lading, may well not be the the vessel may be taken on time charter and, while
original buyer. this relieves the owner ofa number ofresponsibilities,
of which a central one is the need to seek further
It can immediately be seen that this transaction employment, it also makes the master a servant of the
can be very different from the problems facing a time charterer in respect ofthe contractual carriage of
master and his chief officer as they contemplate rain cargo. Unfortunately, claims from unsatisfied receivers
wetted and rusting steel or tom bags of infested rice. of cargo tend to find a way through to the ship owner
Since shipping is a service industry, the answer is not despite the lack of a direct contractual agreement
to clause the bill oflading but to take early and pro- between them.
active action to enable the buyer and the seller to solve
the problem, and preferably this action needs to be In the case of a voyage charter, the owner and
put in motion before the cargo has been loaded. master have a much more direct relationship with both
the shipper and the receiver. Yet, even so, the owner
The often quoted 'clIlejitily to load, stow, carry and ofthe cargo - the holder of the bill oflading - may
deliver'the cargo really needs extending to include be a third party who has no direct connection with
'ca"jitlly to take ",ceipt of, load, stow, etc. 'the cargo. In these (charter party based) contractual arrangements
doing this the master assumes responsibilities to a
but is (and justifiably so, according to the Courts)
number of different parties on behalfofthe ship owner, relying on the master's signature to ensure that the
and with some ofthem, notably the receiver, neither bill of lading accurately describes the goods he has
the ownernor the master will necessarily have a direct contracted to buy (and for which he has possibly
contractual relationship. Nevertheless, the receiver will already paid) and that they will be delivered to the
be able to claim against the ship owner for the actions agreed port of discharge with due despatch and in good
of the master. condition.
The contractual arrangements which facilitate the Around these contractual agreements, or the strict
physical movement of the goods and the transfer of duties of a common carrier is the liner trades, have
title (ownership) in them can be complex, especially grown, over the years, a web of what can be fairly
since they will frequently involve two related but
described as risk control and risk offset facilities. Some
separate contracts. One of these contract will relate
are legal and some are insurance based and they can
primarily to the goods and to the shipper and receiver
illustrated in the form of protective circles around the
while the other will relate primarily to the provision
core master/ship owner relationship.
of the method of transportation, the ship. In other
words, the master will need to manage and coordinate Risk and insurance
the responsibilities and obligations surrounding both Two insurance facilities offer the ship owner and thus
the bill oflading and the charter party (or, in the case the ship master, protection in two different areas of risk.
ofa vessel operating a liner service, the responsibilities The main role ofwhat is generally termed Hull (or Hull
and obligations which flow from being a common and Machinery) cover is to indemnifY the owner against
carrier). damage to his vessel. As such it relates mainly to the
In managing the contractual obligations which risks associated with the technical operation of
relate to the bill of lading, the master must take into maintaining and operating the vessel and ofits navigation
account its three distinct but closely interrelated from port to port, including those risks generally
functions. Centrally, it is the title document to described as perils of the sea. It also, subject to certain
ownership of the goods. In addition it is the receipt constraints, provides recompense to the owner in the
for the goods issued on shipment and, so far as the event ,of negligence or mistakes by the master, officers
financial side of the contractual arrangements are and crew, the shipboard management team'.


It is the liability cover provided by the mutual owner and the vessel remain within the protection of
protection and indemnity associations (the P&l clubs) the conventions and do not breach any of the
which is most relevant to the commercial operation warranties contained within the insurance cover.
of the vessel under discussion in this chapter. Here
the cover reaches out into the area of charter party This means that the master and his officers should
and bill of lading, but, in strict tenns, stops short of understand the overall contractual relationships
providing protection if the master incorrectly signs or relating to the employment and risk protection of the
clauses a bill oflading, delivers the cargo to the wrong vessel and its owner and be able to act in a way which
port or delivers the cargo without the correct takes into account the possibly conflicting priorities
presentation of a bill oflading. Having said that, the ofthe various interested parties. This does not mean,
P&l Clubs are owned, mutually, by the ship owners painstaking actions taking into account clause and sub-
clause; nor does it mean waiting until a lawyer or
they serve and they are well aware of the pressures
and practices of international trade - and of the owner's representative arrives to advise on a
frequent non-availability ofbills oflading at a discharge deteriorating situation. It means taking, and taking
port. early, 'the reasonable actions of a prudent seafarer',
both technically and commerc ially. Even more, it
The P&l Club, as well as the ship owner, will want means planning and thinking ahead in order to prevent
to ensure that as much protection as possible is given such situations arising. As stated earlier, the time to
to the commercial operation ofthe vessel from various negotiate the c1ausing of a bill of lading is when the
legal conventions. This means that the protection rust stained steel is on the quay, not when it is in the
offered by the Hague or The Hague-Visby (or the hold with the hatches closed.
Hague-Visby with Protocol, or the Hamburg) Rules,
which relate to the Bill of Lading (the contract of The key relationship is between owner and master
carriage of main interest to the eventual owner of the and the shore based and ship based management
cargo) needs to be linked to the voyage charter (the teams. A good relationship at this level is, perhaps, a
contract of carriage between ship owner and shipper). shipping company's best way of managing risk and
This is, or should be, effected by a Paramount Clause one which has been squandered in recent years,
in the charterparty. In a similar way, the holder ofthe mainly, it must be said, by the actions of the ship
bill oflading needs to be aware of the existence of the owners. It can be hoped that the International Safety
voyage charter and an Incorporation Clause brings Management (ISM) Code will help to rebuild this
the existence of the charter party to the bill oflading relationship both for the technical and the commercial
(and this complexity is why one ofthe roles ofa bill of operation ofthe vessel. Neither side works in isolation
lading is described as 'evidence of, rather than 'the' and on the commercial side, the master is the person
contract of carriage). who has to manage the contractual arrangements and
make them work.
One of the most significant areas of protection
offered by the Hague Rules (and its derivatives) is that The next layer of risk management is education,
itprovides the ship owner with the ability to limit his understanding, knowledge and the training to put the
liability, in monetary terms, against third party claims, knowledge into effective action. It can be argued that
education has more than ever been replaced by the
including claims brought under the complex web of
expedience of 'training against regulations' in recent
contracts described above. Part of a master's
years - and even then, the training budget has been
responsibility is to manage the operation of the vessel
one of the first to suffer from 'the need to reduce daily
in both commercial and technical tenns, so that the
running costs'.
protection offered by these conventions remains intact
and one of his foremost duties in this respect is to There are encouraging signs that this is changing,
ensure that the vessel is seaworthy (and cargoworthy) but knowledge and understanding do need to be
at the commencement of (each stage) of a voyage. encouraged amongst the younger generation of
The ship owner's ability to limit his liability (again
in monetary tenns) provided by the Limitation of Considerations relating to bills of
Liability Convention, relates more closely to the lading
technical operation of navigating the vessels safely
Although a bill oflading can appear for signature
through the perils of the seas rather than the perils of
on the master's desk with little more ceremony than
the contracts. In the event ofan incident- or a mistake
the many documents which he has to sign every port
- occurring which brings the ship owner into a position
call, its role and the potential liabilities which it carries
in which he will be relying on the protection offered
demand careful management and forethought. Some
by either of the liability conventions or of his two
of the considerations which the master should bear in
complementary insurance covers, it is essential that
mind are:
the master, and his team on board, actively manage
the situation. They must do this in a way which will l. Is it possible early during the port stay to sight,
mitigate (minimise) any loss whilst ensuring that the from the agent or shipper, a profonna bill and

establish whether there are any special terms andl The condition of the cargo - if there is no
or conditions or conflicts with any charter party? statement as to condition, one should not be
2. Are the cargo officers briefed to bring promptly added, although there is generally the
to the master's attention any potential problem of statement 'shipp ed in good order and
marks, quantity, quality or condition. These condition' printed on the face ofthe bill, or
problems might then be resolved without giving better still 'shipped in apparent good order
rise to delay or a dispute about c1ausing the bill of and condition'. The master is not expected
lading. to see inside a crate but he is expected to react
3. Both when receiving and releasing cargo, it is to such obvious signs as stained bags - and
important to know whether the bill of lading is: to be particularly vigilant if foodstuffs are
being shipped.
3.1 A straight bill, whereby the goods can only The quality of a cargo - this, reasonably
be released to the named consignee, or enough, is not an area in which the master is
3.2 An open bill which may be made out: expected to show a high degree of expertise.
3.2.1 'To bearer' and thus the first person Quality can be high and condition low and
to present an original bill oflading
vice versa. Technically it is possible to add
3.2.2 'Named consignee or order' in which the wording (if not already in the printed
case the named consignee can receive wording) 'Quality and condition unknown'
the cargo or endorse on the back the and the bill will still be a clean bill of lading.
name of another 'named consignee The leading marks - the cargo should be
or order', or clearly marked with the leading marks
3.2.3 Endorsejust the name ofa consignee necessary for the identification of the cargo
making it a non-negotiable 'straight' and the master is recommended to ask
bill. himself Are the goods marked in such a
4. On releasing cargo, endorse the bill manner as should ordinarily remain legible
Accomplished' and date, stamp and sign this at the end of the voyage?' and 'Are there
endorsement. reasonable grounds for suspecting that the
5. Establish whether the bill oflading: information is not accurate?' The vessel may
5.1 Is a 'Marine or ocean bill of lading' well be held responsible for delay and
(sometimes called port-to-port) which should expense if, at the discharge port(s), there are
contain no indication that the bill is subject delays because of poorly or improperly
to a charterparty, or marked cargo.
5.2 Whether the bill specifies that it is subject to n. If the cargo does not fit with the shipp er's
a charterparty, in which case the description on the bill oflading, then the overall
Incorporation Clause in the bill of lading guiding principle is:
should be analysed to identifY what terms and Inform the shipper that if the matter is not
conditions from the charterparty are being resolved, then it will be necessary to clause
incorporated. the bill of lading, advising the shipper of the
6. Remember that a bill of lading is prima facie reasons.
evidence that the goods are loaded as described Ifthe shipper refuses to address the problem
therein and can be absolute proofwhen the bill is and refuses the master's right to clause the
endorsed to a third party. bill, he should be advised that sailing may be
7. Be careful that the date on a bill oflading records delayed until the matter is resolved, and the
the date on which the goods are actually shipped. shipper held responsible for the cost of any
8. Never sign a blank bill oflading. delay;
9. Never accept a letter ofindemnity (unless clearly Ensure that this stance on behalf of the
instructed and authorised by the owner - not the owner's interests is backed up by fum and
charterer - and even then preferab Iy in comprehensive evidence recorded at the
conjunction with the advice of the P&l Club and time.
backed by a bank guarantee). 12. Remember the shipper is the customer - early
10. Signing the bill of lading as a receipt for cargo, action by a vigilant ship's staff can frequently
the master addresses: enable a solution to be found which is acceptable
to both shipper and carrier (charterer as well as
The weight and quantity - here the addition owner) without the need to delay the vessel.
of the word 'unknown' shifts the burden of
proof on to the shipper but the master will Managing charter parties
have to provide a compelling reason why he For many masters, much of his or her working life
was not able to conduct a tally or assess the may be directed by one or more charter parties and
weight through a draft surveyor similar their management approach can either be reactive or
means. positive and pro-active.


The contractual web a time charter, from owners, highlighting the main
The first and critical point always to bear in mind points of the charterparty. These vary enormously in
is that the charterparty expresses the requirements of quality and are frequently written from the point of
that essential component of every business, the view ofa charterer wanting ajob done rather than the
customer and the matrix of customers to whom the master addressing his complex matrix of
master may be responsible can be complex. Bearing responsibilities. Sadly, too, charter parties often arrive
in mind that a time charter is a contract for the use of late, if at all. A first task, therefore, is to build up a
a particular ship while a voyage charter is a contract library offrequently used charter parties and to ensure
for the hire of cargo space or capacity within the vessel, that the officers forming the management team are
it is important to understand how: aware of their major requirements, their special
peculiarities, and the obligations which they place on
Both charter parties can coexist (and the chain can the vessel.
be lengthened if sub-charters exist), and why.
Both charter parties impose different requirements Charter parties can make dry reading so a little
and duties upon the vessel and her master. inventiveness is required. One approach is to make a
chronological list of those aspects of a charterparty
For the master and his team, the management that affect the conduct of the vessel as she executes
responsibilities can be complex and multilayered in the charter voyage and correlate this with the relevant
that he may well have responsibilities to, and to a charterparty clauses, scattered as they will be in
greater or lesser extent, be under the direction of: different places in different charter parties.
A time-charterer, who will issue sailing orders, is Voyage charters
interested in such matters as speed and For a voyage charter, some of the headings may
consumption and can instruct the master as to the be:
signing of bills oflading,
A voyage charterer, who is primarily concerned Charterer, shipper and freight
about a vessel's timely arrival at load or discharge This identifies the customer and, crucially, how
ports with holds or tanks in an appropriate freight is paid. Charterparty and bill oflading fraud is
condition and cargo gear in good working order, not unknown - if a strange and new name appears as
• The holder of a bill oflading, that evidence of a charterer or shipper, it might, especially in new trading
contract to carriage and who, when risk and title areas, be sensible to make discreet enquiries as to the
pass, to the receiver maybe a third party to whom shipper's reputation.
the vessel and the owner assume responsibilities
and duties, while at the same time Arrival
Managing the vessel on behalf of the owner with This establishes the immediate navigational
regard to such critical matters as personnel, the requirement and, together with the discharge port, the
safe prosecution of the voyage and the routine bunker requirement (bearing in mind that to deviate
maintenance of the vessel; and to bunker once cargo is on board should have the
Ensuring that the business and customers receive agreement of the shipper or, perhaps more accurately,
a satisfactory service without exposing the owner the person who has (insurance) risk in the cargo at the
or vessel to avoidable contractual liabilities. time of deviation.

Seaworthiness Cargo to be loaded

Throughout all of this contractual web, one Thiswill establish, together with the required time
common obligation can be identified, and one which to arrival, any cleaning required which might be
also relates to the vessel's insurance. The master has a needed for holds or tanks. If there is doubt about the
prime, and in some cases absolute responsibility that exact level of cleanliness or preparation, the
the vessel should be seaworthy. The requirements of appropriate time to ask is when there is time left to
the obligations of seaworthiness and for a voyage take action.
charter, cargoworthiness, can be found in 'Commercial La~an and NOR
Management for Shipmaster' and other Nautical Institute The method and time of tendering notice of
publications. Suffice it to say that the legal obligation readiness is an area where a pro-active approach can
is greatest at the commencement of each voyage or sometimes be advantageous for vessel and owner.
stage ofa voyage - and that a disgruntled cargo owner There is, for example, little to be gained by burning
or voyage charterer will endeavour to remove the bunkers to arrive just too late to tender NOR before a
owner's ability to limit his liability (as under the Hague weekend or local holiday and when (according to a
Rules etc.) by challenging the seaworthiness of the careful reading of the charterparty) it might not be
vessel. possible to tender NOR.
Planning and preparation Conversely, it may well be worth buming extra
Masters should receive voyage orders from bunkers in order to tender NORjust before a weekend
charterers and, hopefully and especially in the case of of no cargo work, giving the vessel a maintenance

weekend in port 'on demurrage'. The requirements Additional clauses
for a valid tender of NOR warrant careful reading, Careful attention should be given to any additional,
especially with regard to the place and method of typed clauses which may extend the obligations and
tendering as well as the vessel's preparedness to accept responsibilities of vessel and master.
cargo and ballast condition. Time charters
Bear in mind that the shipper must make a number Time charters, as already mentioned, perform a
ofimportant decisions based on the ETA given by the different task and generate different requirements and
master, decisions relating to moving the cargo into responsibilities such as:
the port, ordering berths, labour and equipment which, Description ofvesstl
if badly timed can waste money. Bear in mind too It is important that this is correct, for if not, the
that if a vessel misses her Cancelling Date, the charter charterer is sure to discover the discrepancy and, if
can be terminated and the owner find himselfwith an possible, turn it to his commercial advantage. It is
unemployed vessel and probably a very weak surprising how many discrepancies there can be
negotiating position. between two descriptions ofthe same vessel.
80ft port, saft berth DeliveTY, redelivery, h1repqment andcanceHaJion
An important and sometimes complex Diverse but related clauses all with a common
consideration, especially when trading to new areas. thread. It is not unknown for certain time charterers
In assessing whether a port is safe or unsafe, the master to load a vessel, pay the first time charter payment,
needs to consider three factors: sell the cargo and then to disappear with the proceeds.
Is the port physically safe? E.g., is there sufficient This leaves the owner and the vessel with a direct
obligation to the 'innocent' holder of the bill oflading
water depth? What are the anticipated (seasonal!
to deliver the cargo to the named port of discharge,
unseasonable) weather conditions? Has war or
without any further payment.
other internal hostilities broken out? etc.
Is the basic p ort infrastructure safe? In other words On and ojJ-h;re surveys
are the systems such as pilotage, aids to navigation, Be aware that the offhire survey may be conducted
tugs, etc., adequate? by different people at some future time, but it will be
Can the event or occurrence which makes him compared against the description of the vessel
consider that the port might not be safe, be contained in on-hire survey (and charterparty). A wise
described as abnormal or could it reasonably be master approaching the end of a charter, reads the
foreseen? original off-hire survey with care.
La,ytime and demurrage Owners/charterers to provide
Although 'once on demurrage, always on An obvious clause for careful reading, but it is
demurrage' slips easily off the tongue, before a vessel particularly important as it helps to define the
can earn demurrage, NOR must be correctly tendered responsibility and authority interface between
and accepted. The owner needs careful and timely charterer and master.
information to support his demurrage claim which, Stife berths, trading limits, sailing orders and libtrty
all too often, has to be negotiated and chased after the clauses
cargo is discharged and the voyage is ostensibly All fairly straightforward clauses but once again
complete. they define the master's responsibilities and his
Cargo and billf oflading particular responsibility for the safety ofthe vessel and
The core reason for the charter and linked closely her navigation.
to the notes on bills of lading. The master should Cargo and cargo work
ensure as early as possible that he is satisfied with the This helps to define the vessel's responsibilities and
obligations placed on him with respect to receiving the charterer's responsibilities in respect of all cargo
cargo and signing for it and the liabilities to which he related aspects. It is important to establish a good line
can expose the owner, especially with regard to third of communication with the time charterer's manager
party receivers holding an endorsed bill oflading. or representative responsible for the operation of the
charter. This is an area where the need to protect the
It is important to note if a Clause Paramount
owner's interests can confli ct with what is operationally
stipulates the inclusion of clauses relating to the Hague the most expedient solution - it is an area where the
(or other) Rules into the bills oflading thus enabling master's experience and forethought can be
the owner the ability to limit his liability. Consultation invaluable.
with a (husbanding) agent or the local P&l Club
Correspondent may be advisable and the master Spted tmdcl1nsumptil1n andbunkers
should be ever watchful for attempts at the fraudulent An area ripe for dispute which requires a sensible
use of bills oflading. and pragmatic approach, especially if the chartering


department have been over enthusiastic about the Deltlel"}
vessel's performance. Masters - and the chartering The master has two overriding objectives at the
department should be aware that it is becoming discharge port(s).
increasingly easy to retrospectively check satellite
records of meteorological condition. To ensure that the cargo is delivered to the rightful
receiver, and
Ojf-bire To protect the owner's position if necessary with
Another area where careful planning and regard to the payment of freight and demurrage.
forethought can help to avoid or minimise loss ofhire.
This accomplished it is time to plan and prepare
Passage and tinil1lilJn for the next voyage.
The cargo owner has the right to expect that the
laden voyage is undertaken with due dispatch and, in Summary
general terms, without deviation. Unwarranted or Charter parties, whether voyage or time - or a
unagreed deviation can prejudice the owner's right to combination of both, play a vital and central role for
limit his liability (with respect to claims from the a large sector ofthe shipping industry. Professionally,
charterer or cargo owner) under such conventions as a master needs to approach the challenges they pose
the Hague or Hague-Visby Rules. in a knowledgeable and pro-active manner and ensure
Cmgo claims for damage or deterioration ofgoods that his or her management team grows in their
on passage are often made and as well as attending to understanding of their commercial as well as their
such matters as ventilation (ifrequired) a careful record techni cal resp ons ibil ities.
of the actions taken to care for the cargo during the
passage is important. Sea water damage due to References
exceptional weather - or due to ill fitting hatch seals R L Tallack Commercial Management/or Ship masters
or the vessel being driven too hard? Retrospective The Nautical Institute 1996.
satellite imagery can often establish how exceptional • Managing Risk in Shipping The Nantical Institute
the weather was! 1999

Chapter 15


by Captain C.M. Mahidhara FNI

Captain Mahidhara trained on the TS. Dufferin and T.S. Rajendrafrom 1971 to 72. Hejomed the Shpping Corporation ojIndia
(SCI) as an apprentice in 1973 and served in varioWl capacities, obtaining command In 1981 and leavmg SCI m 1982. In SClhe
served on a varlet}' a/vessels - cargo ships, tankers, bulk carriers, product earners and OBOs. , .
He joined Farsund Shipping A/S (part of Mosvold Farsund) as a chief offICer and obtained command agam m 1985. He has bee.
with Farsund Shipping since then, serving mostly on atezmax andAframax tankers, and Capesize bulk carn'ers. For th.e last ~o year~
he has served on a 12000 ton multtJwpose ship carrying project cargoes and operating container feeder services. Captam Mahidhara IS
due tojoin the tanker fleet again soon.

Safety is an important and integral part ofevety aspect operations should be able to immediately sense it. This
of running a ship. For managing safety on board the sort of a safety culture has to be steeped on board by
master must coordinate all activities contributing to constant attention to detail, by training and repetition.
safety. The key to this is providing good leadership, Personal safety
through personal commitment, personal example and
A vety good starting point for safety on board is
a positive attitude to safety so that he can motivate
personal safety. It must be realised that without all on
and stimulate people. Unlike any other environment
board having an awareness oftheir own personal safety
the shipmaster's example and attitude make a great
and that of their mates, no vessel can be operated
impression on the ship's crew. Nearly evety ship
safely. Safe operating practices cannot be divorced
reflects the capability and personality of the master.
from safe working practices. When a person joins a
The master must use this power of persuasion
ship, he should be familiarised with the company's
effectively and to advantage, to convince evetybody
safety policies and indoctrinated on personal safety
of the value of safety through good communication,
through a personal safety handbook. He should also
training and leadership.
be taken on a familiarisation tour ofthe vessel by one
The checks and balances provided with the ofthe officers sothathe can be brought into tunevety
implementation of the ISM code makes the task of quickly with the ship's operations and any potential
managing safety on board all the more effective. The hazards.
highest standards of safety can be achieved by instilling
The master should, at the earliest opportunity,
a sense ofpersonal responsibility for the safety ofboth
make personal acquaintance and appraise him ofthe
themselves and others into all persons on board. The
company's safety policy, their drug and alcohol policy,
shipmaster should approach the management of safety ,
his own commitment to it and his receptiveness to
so that it is introduced into evety aspect of running
suggestions and discussions. He should try to inculcate
and operating a ship. Personal safety is a vety good a sense of responsibility for their personal safety. the
starting point, and it should pervade the daily routines
safety of the fellow men and the ship. He must
of the ship, maintenance, operations at sea in port,
convince them that it is important to work safely rather
navigation, manoeuvring, safety of shore personnel,
than control their evety move. They must also be made
training, delegation, the formation of safety
to feel thatthey are free to put forward their own points
committees, good communication with the company on any aspect of safety in the ship's running.
and other shore establishments.
A lot of the safety training and indoctrination of
Master must set an example and lead company policies is usually done ashore today but it
Firstly the crew must be convinced of the master's is always good to reinforce your own personal
sincerity regarding safety on board. The shipmaster commitment to all these policies. While on the subject
must be at the forefront in setting examples and must of personal safety it would be wise to guard against
observe all the safety routines he and the company carelessness and complacency and regular checks and
have established for the ship. The safety standards on re-checks should be made of personal safe working
board should not appear to be overly cosmetic and practices. One should go back to the absolute basics
should pervade all aspects of running the ship. often and reinforce the importance ofsafe habits and
Apply ing safety only to specific areas serves no practices to minimise errors.
purpose and is not effective in achieving overall safety
on the ship. The safety standards and atmosphere All safe working practices have evolved through
should be such that anyone observing the ship's experience, so it would be unwise to bypass them "just


one time" because you are in a hurry. There is confidence can take the system of double checks
absolutely no reason that the unsafe practice will not further. The master and senior officers should be
harm you '~ust that once". It must be ingrained in approachable, so that no one hesitates to report any
everyone that they must think very hard before they damage or untoward incident or potential hazard he
try to overrule a safe working habit. may have observed, or to point out an inadvertent
error by any person on board which couldjeopardise
Delegation any aspect of safety on the ship.
Without the right amount of delegation, the master
will be bogged down and fatigued by too many details People should be made to understand that no one
and will not be able to function effectively and safely. is infallible and that mistakes can be made by anyone.
He should be aware of the potential and shortcomings When they feel a mistaken order has been given or
of his officers and crew and delegate responsibilities an erroneous operation is being conducted they should
accordingly. Wherever there are shortcomings an not hesitate to point it out. They may be mistaken at
attempt should be made to train and remedy the times; they should not be ridiculed, but given an
shortcomings, or give staff responsibility where they explanation and praised for their diligence.
are capable.
Navigational safety
Too much or too little delegation is unsafe and There have been numerous instances of minor
dangerous. Delegation of responsibility is good for the navigational errors leading to major causalities like
persons on board. It builds up their confidence and stranding, collisions, etc., leading in turn to loss oflife,
skills, they feel involved and needed on the ship and property and environmental damage. The shipmaster
the feeling that they matter in the ship. It also assists must lay down guidelines for safe navigational
in their training for taking on more responsibilities as practices which are in compliance with various
they progress in their career. For the master it releases international, national and local laws. The Bridge
his time for further training and being available Procedures Guide provides a good guideline and the
reasonably refreshed to tackle an emergency. It helps watchkeepers should be made familiar with its
the master to monitor, oversee and analyse the safety contents. The master should discuss it with them so
of various operations and activities on board with a that they understand it fully. Standing orders should
clear mind. also be promulgated taking into account company
policies, the experience and capability of the
An important aspect of delegation is that, when
watchkeepers and the limitations of the equipment and
the need arises, it is much easier for the master to
the ship. Night orders should also be issued every night
advise and help in the work delegated, whereas when with pertinent instructions for the night watch and
the master himself does the work, it is less likely to be should indicate more specifically when definitely to
inspected critically for any errors. For instance, if the call the master and any other specific instructions
shipmaster were to do the passage planning himself, regarding position fixing, traffic, weather and so on.
then an error would be less likely to be detected by
the navigating officer, or he may not have the temerity Guidelines should be laid down for passage
to point it out. However when it is delegated you can planning from berth to berth in accordance with
check and monitor the work and point out errors, established procedures. They should be detailed, easy
inaccuracies or shortcomings. to refer to and should also have contingency plans in
the event of aborting the plan especially in congested
Confidence in the master waters, pilotage waters, heavy weather, etc. Weather
The shipmaster should have an open management routeing is very good today, however it would be
style and communicate well with all on board and be prudent to check regularly local or heavy weather
accessible. Agoodpersonal acquaintance with the sea reports so as to take corrective and early action to
staff and a good professional and personal relationship avoid storms and disturbances. All phases of the
with senior staff are essential. There must be passage plan should be discussed with the
confidence on board that the master has an open mind watchkeepers and the relevant details with the chief
to suggestions for improvement of safety or any other engineer and the pilots.
aspect of the ship's running. Everyone should always
feel free to put forward their suggestions and these Just as the watchkeepers are taught the importance
should be considered carefully and implemented if of not relying on only one method of position fixing,
practical and feasible. If the suggestions require the master should also double check on his
assistance and concurrence of the company they watchkeepers. Navigational safety also involves chart
should be presented to the company as required. The corrections. This is an important area and random
confidence and accessibility that a shipmaster exudes checks on the corrections should be made so that they
is important in reducing the possibility of a one-man are not missed out inadvertently. Ultimately it is wise
error. The ISM code will already have a system of to remember that no single cause of ship collisions
checklists and double checks to avoid a one man error, and grounding exceeds in frequency that of failing to
however the master communicating well and creating maintain a proper all round lookout.

The limitation of navigational aids should be fully Good communication
understood and exclusive reliance on anyone aid Good communication with all on board and
should be avoided. In recent years there have been likewise with the shore management is essential. The
instances ofradar-assisted collisions and GPS assisted better the communication, the better is the
grounding. understanding of safety objectives on board. Similarly,
Watchkeepers and engineers must be encouraged good understanding and communication with the
to familiarise themselves with the emergency steering company is important. However good the
gear, and procedures for autoihand changeover should communication and training on board, the ship does
be ensured. not have adequate resources to rectifY and remedy
every defect. It requires the advice, resources and
Maintenance and proper use of authority of the company. Effective communication
equipment and understanding will always bring an early and
Regular and good maintenance procedures are an appropriate response from the company. The care and
integral part ofsafety management on board. Without consideration given to suggestions from the ship will
this, equipment may not be reliable or perform within definitely motivate the staff on board to more effectual
its specifications. Today there are very good safety management.
maintenance programs which, iffollowed sincerely, Safety committees, safety meetings,
should minimise the possibility of breakdown or
Safety committees and safety meetings are an
Equipment should be used according to the effective forum for discussing and communicating.
maker's instructions and its operation should be within They can be used to investigate and report accidents
the parameters it was designed for. Abuse of and incidents, with the objective of determining cause
equipment will only lead to breakdowns and could (not blame) and preventing re-occurrence. It must be
possibly put the vessel in an unsafe position. Misuse emphasised that discussions regarding accidents or
and abuse could also cause personal injuries. Training hazardous situations on the ship should not be used
is very important for the proper use and maintenance to find fault with an individual. The lessons learnt
of equipment and it should be repeated and reinforced should be used to improve safety conditions on board,
regularly. tighten loose maintenance and operational procedures
and implement new safety procedures as required. It
Inspections is not enough simply to discuss accidents and incidents.
The master should, along with his senior officers,
regularly inspect the vessel and should discuss with Near mis ses should also be investigated and
them any shortcomings, defects and deficiencies which appropriate precautions taken so they do not become
could lead to operational problems and hazardous and an accident at a later date. Minutes of safety committee
unsafe conditions. The inspections should not just be meetings should be communicated to the company
for the machinery and equipment but for the ship as a so that they can provide their own input. There will
whole - the hull, cargo tanks and other structures - be several instances when remedies may not be found
as they become available for inspection. The on the ship and the company should be asked to
inspections should review operating proc edures and provide the expertise or new equipment.
modifY them as experience dictates. A good inspection
ofvarious logs and routines will be very beneficial in The meetings provide a good forum for discussing
getting a good picture of the effectiveness of all casualty reports received from the company. Similar
procedures and routines on board so that corrective situations can be recognised on board, parallels can
measures can be taken ifnecessary. In accordance with be drawn and lessons learnt. The meetings will also
the ISM code a lot of auditing tools have been schedule training and safety drills and discuss drills
provided to the ship which regularly highlight problem already concluded. Safety drills should be well thought
areas and allows for reporting procedures so that out and imaginative. Drills are basically rehearsals for
effective measures can be taken on board or ashore. disasters and the object is readiness. The vessel's
Inspections from shore especially in the form ofISM readiness to deal with an emergency depends on the
audits, port state inspections, oil company inspections, level of training imparted. Drills should be well
etc. have provided a good tool for safety management planned and varied to keep interest alive. It is a good
in that the regular interaction brings about more idea to involve everyone on board in turn to plan the
awareness offaults and defects before they can become drills. Some very sound and innovative ideas are
a liability. They provide more inputs than the ship bound to surface and it keeps everyone involved.
alone can provide. The master should always take the
suggestions given in the right spirit and should Discussion, planning and implementation of
similarly motivate the crew. A positive assessment various emergencies and contingency plans help bring
indicates that all on board have managed safety on about knowledge of the reliability and efficiency of
board effectively and should greatly increase their equipment and plans. It also brings home the
confidence. realisation ofthe difficulties faced in emergencies and
more than anything else convinces people that Unfortunately lot of injuries to ship's personnel take
prevention is better than the cure. place when they are embarking or disembarking from
the ship. People boarding the vessel in an inebriated
Safety involves alot ofrepetition and back to basics condition probably suffer the worst injuries. Special
most ofthe time. To keep people interested one has to attention should be paid to the safety ofgangways and
find different ways of saying the same things. drunken persons should be prohibited from using
Discussing snippets from The Nautical Institute's
SEAWAYS, MARS reports, casualty reports, etc. would
go a long way in alleviating this problem. Videos and Drug and alcohol abuse
several good computer training programs are available Drug and alcohol abuse poses a severe safety
to the ship and should be used for training and problem and has a potential for jeopardising
reinforcing safety habits. To keep things interesting, operations and safety of life. A drunken person must
Watchkeepers should be trained by their seniors, not be allowed on duty, even though there may be a
discussing various situations they may encounter and shortage of people. It is far safer to do ajob more
their response to it. slowly with less people.
Planning Drug and alcohol abuse warrants swift action and
Planning of all operations on the ship is essential. one must not hesitate, however unpleasant it may be.
A lot of accidents occur due to poor planning, where The crew must be made aware of the company's drug
people are not clear about their part in an operation. and alcohol policy and the severe penalties that go
This creates unsafe conditions and a breakdown of with their abuse. Usually, in a well run company with
operations. With good planning, and discussion, regular screening prior to recruitment and a policy of
potential hazards of a situation can be envisaged and unannounced screening, this problem is not common.
guarded against. The company promulgates guidelines However, one should be aware of the problem, be on
and procedures for routines and operations and these guard and educate and re-educate people as often as
should be supplemented and modified for each ship required.
and monitored regularly. As far as possible, operations
should be planned afresh each time rather than Conclusion
modifying an old one, so that new inputs learnt from Ultimately, the management of safety on board is
experience can be incorporated. Once a plan or a lot of little things. Is the watchkeeper sufficiently
procedure has been agreed, individuals must not try rested, are we sailing outwith sufficient bunkers, are
to take short-cuts, because it appears to be the easy we proceeding at a safe speed and so on. We should
thing at that time. Planning is done after a lot of thought take care and manage the little things like good
and care and it coordinates various activities, so an housekeeping, good seamanship, common sense, good
impromptu short-cut could very well create more communication and a fair degree of planning.
hazards. Cleanliness and tidiness reduces fire hazards, slips and
falls and equipment is found quickly when it matters.
Safety in port Good seamanship makes for safe working practices.
When the ship is coming into port, the agents, Common sense is communication and leadership
pilots, surveyors, etc. will be able to provide local where the crew develops trust and confidence and it
information, any special precautions to be taken and helps individuals develop to their full potential.
details of any dangers and the various facilities Planning and discussion is essential, especially in
available in the port. Safety of shore personnel on recognising potential hazards.
board is the ship's responsibility. Proper warnings and
notices should be posted, so that the crew are aware Major accidents and causalities will always get
pUblicity. However, it is important to remember that
of unsafe areas. Gangways should be made safe and
it is the little things, the safe management of daily work
should always be manned so that unauthorised people
and practices, that go a long way in avoiding major
do not enter the ship. Untrained persons on the ship
pose a safety hazard to themselves and the ship. accidents.

Chapter 16


by Professor R.D. Goss MA PhD FNI, Department of Maritime Studies, Cardiff University

Richard Goss went to sea 1947-1955. Ajl£r talang an economics d'fJ"" at Cambndge hejoined the head office oJNZS. He spent 1963-
1980 as an economist specialising in maritime matters/or the UKgovemment, rising to Under-Secretary. Since 1980 he has been
Professor ofMaritime Economics and Administration at UWlST.

EVERY SHIP'S CAPTAIN should be concerned with the greatest variety is likely to be found in the extent to
efficiency with which his ship operates. It is his duty to which shipping companies seek to involve masters in
his employer - whether owner or charterer; it is his economic matters, e.g. by delegation: but there are
duty to the shippers who use his ship's services; it is few today who do not welcome their masters taking
his duty to his crew, who may well wish to be an interest Even, therefore, where company practice
employed there again and, for the same reason, it is involves the master having a minimum of financial
his duty to himself. Because a shipping industry may responsibility it is helpful for him to know how
also be of national value, it is also his duty to his economic effic iency is likely to be measured.
country. Mcst shipping opeIlll:es in competition; with
this safeguard, the greatest profit is likely to be a This chapter is laid out in four sections. The second
measure ofthe greatest economic success in operating (next) concerns the development of cost centres, the third
a ship; though of course no one would deny that there outlines budgetary control and the fourth concerns the
are some bad ways of making profits. economic orfinancial measures which may b e derived
from these - Le.profits. The chapter as a whole thus
Much shipboard efficiency consists ofmaintaining concentrates on the economics of operating an existing
well-established and effective routines like checking ship: not on those of designing, choosing or buying a
moorings in port, using parnllel indexing in coastal new one. Whilst there is nothing essentially new in
navigation and keeping a good lookout With safety much of this, it is believed to be the first time that
there are absolute professional standards which should such material has been addressed specifically to the
be maintained. Elsewhere, however, and particularly potential shipmaster.
with economic or financial matters there are no such
absolute standards: you have to do the best you can Accounts, like any other written record, have two
with what you have and in conditions some parts of purposes: to render an accurate account of what
happened; and to enable better decisions to be made
which may be outside your control. But
it is easy to exaggerate this and, as always, a systematic in the future. Whilst much the same accounts may be
approach to measurement is helpful. Given a used for each purpose this chapter is concerned only
microcomputer (or even a simple hand calculator) the with the second of these.
calculations are not tiresome. Indeed the arrival of Cost centres
these has made it possib le to perform many kinds of A cost centre is a specific area, output or activity,
calculation rapidly and with ease. whose costs can be identified, and thus measured, with
These measurements, often in the form of ratios, reasonable case. It is not necessarily an input, such as
generally appear in two ways: the physical and the crew wages, since these will contribute to a numb er
financial. Examples of the first might be the fuel of activities. Cost centres can be divided or combined
consumption in tonnes per day at sea or of the amount as required. Modern calculation facilities make this
of cargo worked per day in port. Examples of the very easy.
second might be the fuel cost per day (or shp/hour),
Thus, it is common for each ship to be regarded as
the daily cost offeeding the crew (perman/day), or of
a 'cost centre in itself and, within it, to have such
the stevedoring cost per tonne of cargo handled. As
activities as cargo-handling and fuel consumption
will be shown below, these two are at their most helpful
separately identified. When listed these are usually
when they are linked.
arranged in order of escapability. Thus, at the simplest
All trades - and all shipping companies - have level, ifthe ship sailed without cargo there would be
their own characteristics. In this, as in so many other no costs of loading and discharging it, but the other
aspects of command, the shipmaster must adapt his costs would be much the same. At the next level, if
training and ideas to circumstances. The object of this the ship stayed 'In port the port charges would
chapter, therefore, is to provide a general account, with continue but the main engine would use no fuel or
practical examples, of what a master may do, or be lubricating oil and need less maintenance, though most
expected to do, in a variety of circumstances. The other costs (crew wages, for example) would continue.


Ultimately, however, the crew could be paid off and will often be possible to improve the forecasting.
the ship laid up. Then only the capital charges of Without such a systematic approach it is likely that
depreciation and any relevant loan payments would good ideas will be missed, bad ones continued and, in
continue. any case, that the uncertainty of ship finances will be
Individual cost centres may thus cover one or a
variety of activities, provided these are related in Obviously, many variances will be found to be
practical terms. Thus, it may be useful, for some beyond the control or responsibility of the ship or
purposes, to consider the whole of the costs associated those aboard. They are not, for example, responsible
with maintenance, or with the operation ofthe engine for negotiating the price paid for the bunkers: usually
room, or with catering. They may be divided, so that that rests with the operator's head office and sometimes
electricity generation is separated for examination: there are general price changes they are unable to
they may be combined - e.g. the crew costs for a whole affect. Whentheseoutsideeffectshavebeenidentified,
fleet of ships. In constructing such a system of cost therefore, attention can be concentrated on the others.
centres for the first time the emphasis should be on By identify ingwhat there suits were, how they differed
activities or outputs rather than on inputs. Thus, for from what was expected and where the responsibility
example, 'crew wages' is an input: it is what they do lies, the ship's overall efficiency can be improved.
that constitutes an activity or output, and that will
usually involve other costs like paint or other stores. An earlier method offinancial control consisted
ofpreparing 'voyage estimates' before a voyage took
Within each cost centre there will therefore be a place and a Voyage account' afterwards. Comparisons
number of items which, though possibly different in then concentrated on the final outcome orprofit. This
nature, are linked by being parts ofthe same activity. method is useful for chartering and some other
Catering crew costs, food and fuel for cooking it are management decisions - and therefore still used for
examples. These will generally have both physical some purposes. But the variances were not usually
units, (numbers of people, Kwh of energy, say) and, shown as such and the (usual) omission ofthephysical
for each of these, a unit price, cost or value paid. The units and prices from the presentations made an item-
sum for that item in that cost centre is the physical by-item examination difficult.
quantity multiplied by the price per unit.
Thus attention was inevitably concentrated on
The control of efficiency through the control of comparing the two figures for profit rather than on
costs lies in appreciating that both of these can be the details of how and why they differed. When all
identified and measured. One or the other - frequently this was fed back to the people responsible for the
both - can then be controlled. estimates, they might well have had the chance to
improve their forecasting methods: but the
Wherever the master is given the necessary data
opportunity for a systematic, detailed and continuous
and control (but in some shipping companies this is
examination of the financial results of the ship's
not done) a system of cost centres should be
operation was missed. Moreover, those responsible
constructed. Usually, they will be specified in some
for the operation of particular areas of the ship had
detail by the head office; the task is then to measure
no chance of assessing their own performance in
the physical inputs (per cargo, or per day as
managing their cost centres.
appropriate) and the unit values, to multiply one by
the other and then to add up the results. Profit and economic efficiency
So far this chapter has concentrated on costs,
Budgetary control
largely because they represent those aspects of his
A system ofbudgetary control uses the cost centres
ship's operations over which the master may expect
so as to compare the expected results with the actual ones.
to have most influence. Nevertheless, most ships exist
Thus, budgetary control involvesforecastingforeach to earn money and thus profits for their owners. ([here
cost centre the physical units (e.g. tonnes ofoil, tormes is little sense in simply trying to minimise total costs:
of cargo loaded), the unit costs, the result ofmultiplying to do that you would send the ship to lay-up).
the two together and then comparing this expected
Profits, of which there are several definitions, are
result with the actual one. The object is to show just
obtained by earning revenues and then deducting the
where and how the differences arose.
relevant costs. In some industries, where many
These differences are often termed vOFi(JJ'Jces. All revenue-eaming activities can go on together but with
of them should be examined, whether they showed separately identifiable costs (a hotel, say, with
results that were better or worse. It may then be restaurant, bars and bedrooms) there can be a number
possible to identifY practices that save money (and ofseparateprojitcentres. This is rare in shipping, since
should be extended or adopted more widely); or those the whole ship may reasonably be said to earn the
which turned out to be unfortunate and should be whole of the revenue and to incur the whole of the
avoided. Even if no practical lessons can be learnt it costs in doing so. (You could calculate a container

ship's freight earnings for each hold, but it would not there are various methods. The simplest, often used
be useful since it would not be independent of the in shipping, is to divide the capital cost ofthe ship by
others; and it would be difficult to identify the related its estimated life and then by 365 to obtain a daily
costs.) rate; this is then multiplied by the number of days on
the voyage or charter and deducted. Thus, if a ship
Generally, therefore, the shipforms aprofit centre on
costing £ 10 million is supposed to have a 15 year life
its own and is not subdivided as such. Indeed, in some
the daily depreciation rate will be £ 1, 826. There are
trades where there is a high service frequency (e.g.
a number of other depreciation methods (reducing
ferries or container ships) itis further added with other
balance, sum of the years digits) but this, the straight
ships to form a monthly revenue centre for each trade
line depreciation method, is the commonest in shipping.
covered (e.g. southbound and northbound).
Were any allowance to be made for the increased cost
Just as with cost centres, so profit centres should ofreplacing the ship - i.e. for inflation - then the figure
show, in as much detail as is appropriate for the case would be greater. Such adjustments are, however,
in question, the physical units and the unit price. For controversial in all industries. They are rare in
a container ship the former is probably boxes (though shipping if only because ofthe sharp fluctuations which
possibly tonnes of cargo may be better for some often take place in shipping markets and, therefore,
trades). For a ship on voyage charter it is again tonnes in ship values.
of cargo. For a ship on time charter it is the number of
It is also common for a large part ofa ship's capital
days or months on charter.
cost to be financed by borrowing. Again, there is much
Correspondingly, the unit prices are the box rates, variation, but shipbuilding loans commonly extend
freight rates or time-charter rates and so on. (On a over 8 years, cover 80 per cent of the ship's capital
voyage charter it may be necessary to allow for cost and carry an interest rate of 8 per cent per year.
demurrage and despatch money). Multiplying the (Their cheapness comes largely from the desire of
physical units by the unit prices provides the gross government to assist their shipbuilding industries.) As
revenue. Deducting the cost centres in turn (in order the loan is gradually repaid the outstanding balance
of escapability, as noted previously, leaves the gross falls and so, therefore, does the size of the interest
profit for the voyage, voyage leg, charter or period in payment.
question. The gross profits of several ships may be
As with depreciation, however, this is a cost which
added to see the overall results for a company's fleet
the ship's master cannot control or affect. lfit appears
or for any particular service. Where ships are switched
at all in the structure ofprofit centres available to him,
between one service and another it may be necessary
therefore, it will be because the same forms and figures
to divide and recombine the profits accordingly.
are being used at the head office, or to show the master
The results of the profit centres described so far just how expensive his ship really is.
represent the financial surplus earned: no allowance
has been made either for the head office costs or for Further reading
the capital cost of the ship. For the first of these,
company practices vary, with some 'allocating' such Downard, J.M., Running Costs, Fairplay
shore costs to the ship by some method as pence per Publications, 1981. (A comprehensive and practical
deadweight tonne per voyage day. All such methods ace ount, though addressed primarily to the shore-
are, however, arbitrary and a more realistic approach based manager.)
is to treat the shore costs as a cost centre of their own, • Managing Ships, Fairplay Publications, 1984. (A
financed wholly out of the profits of the ships. more advanced text, covering largely non-financial
This, however, is not necessarily appropriate when management topics.)
it comes to dealing with the capital costs of the ships. Laurence, C. A., Vessel Operating Economics, Fairplay
Obviously, these occur at the start of their lives; Pub Iications, 1984. (Despite its general sounding
moreover, once incurred, they are outside title this book largely concerns ways of
management controls - save by the drastic step of economising on fuel - e.g., by optimising routeing,
selling the ship secondhand. Some firms will thus speed, hull and engine maintenance)
ignore the capital cost for these purposes and leave
matters as described above. Chrzanowski, I., An Introduction to Shipping
Economics, Fairplay Publications 1985. (A more
Others, however, will consider it reasonable to go academic and advanced text than those
a stage further and to deduct depreciation from the gross recommended above, it provides an insight into
profit to obtain the netprofit. Depreciation is a method much of the underlying economic theory and many
of allocating the ship's capital cost over its life and of the controversies involved in shipping today.)


Chapter 17

by Mr. John M. Downard

The author began his career with P&O In 1944. His sea service was spent In tramp ships and bulk carriers and included aperiod as a
hull inspector and eight years in command. He came ashore in 1968 and held positions as assistant marine superintendent, fleet
personnel manager and assistant fleet manager. After service at director level with ship management, braking and agency companies, in
1981 he was appOInted a regional directorfor Reefer Express L,nes Pty. Ltd.

Budgets Figure 17.1 shows how the cost centres of one

Whereas a time scale puts substance to a plan. money department relate to the unit or ship and the
gives it uniformity, bringing all the parts to a common corporation as a whole, in a fairly typical shipping
denominator. There are very few plans which do not group. These terms will be used throughout, but it is
involve money and plans in money terms are known important to note that the arrangements of particular
in organisations as Budgets. cost centres into departments is not rigid and in some
shipping companies they are arranged differently to
Business budgets are based upon the plans and
suit new ship management concepts. Nevertheless, the
policy's of the comp any and, when completed, should
cost centre components themselves are still required
be the best possible estimates of the costs of if the budget is to be constructed properly on the
implementing those plans. As with all estimates, their
foundations of management knowledge and
accuracy depends upon the quality of the information
and other factors used in their preparation. Poor
information will result in poor budgets and vice versa. The diagram shows how the cost centre of 'crew
Budgets usually fall into two broad time categories, wages' forms part of the crew 'department' budget
short-term and long-term, in the same way as long- which in turn forms part of the unit or ship budget
and short term plans. The short-term budget usually and so on, eventually forming part of the large
covers a year while long-term budgets can be anything corporate budget.
up to ten or more years.
Budget Organisation
The budgets are also named to indicate the area XYZ CORPORATION
they cover such as unit or ship budgets, departmental • Z Shipping Co. Ltd.
budgets, divisional and corporate budgets. Thus one Corporate yz Freight Forwarders Ltd.
can have a long- or short-term corporate budget or Budget ADE Tankers Ltd.
ship budget. Each unit budget is made up of many WEP Haulage Ltd.
parts like the bricks of a house and these 'bricks' are
known as cost centres. To follow this analogy for a Z SHIPPING co. LlD
moment; the bricks are brought together to fann walls, M.V.RedLine
or departments and these in turn form the house, unit Divisional • M. V. Blue Line
or Company M. V. Green Line
or ship budget. The bricks can be large or small as
required but ideally they should all be the same size Budget M. V. Yellow Line
M. V. Brown Line
in financial terms.

In shipping, as in a number of other industries, the

Technical Department
size of the cost centre 'bricks' can vary due to three
Unit or Ship • Crew Department
Budget Supplies Department
(a) Convention: the traditional way of group ing
Insurance Department
certain items together.
Administration Department
(b) Convenience: certain items fall naturally into
(c) High cost items: some items are of such high cost Depart_m • Crew Wages
they can only be considered separately. Budget Crew Travel
Crew Training

Figure 17.1
• These extracts are reproduced by permission of Fairplay
Publications Ltdfrom the book a/the same name in their Ship Thus it can be seen that In the Z Shipping
Management Series. Company, for example, there will be many cost centres

and a number of 'crew wages', each identified by the Procedure and timetables
particular ship name. As this section is about the costs The annual budget usually aligns itself with the
ofa ship, the factors concerned in producing a short- financial year. Budget preparation at the cost centre
term budget for such a unit will now be considered. level usually commences about five months before the
However, it should not be forgotten that the unit plan commencement ofthe new financial year. This allows
is in itself dependent upon the corporation short- and consideration of the actual running costs of the first
long-term plans. half of the current year and gives sufficient time for
completion and presentation of the draft budget for
Budget responsibility approval. Provided all goes according to schedule, the
Because managers have to work within budgets approved budget should be ready for presentation to
they are more likely to achieve their objectives if they the corporate planners three months before the new
produce the budget themselves or are involved in its year commences, so allowing them time to include
production. Modern management follows this the data in their budgets.
philosophy and in most companies it is the managers
who make the plans, estimate the costs of such The timetable should be agreed as company policy
planning and who carry the responsibilities for well in advance so that all involved can be properly
implementing and achieving the plans within the prepared and can plan their work accordingly. An
budgets. The number and levels of managers involved examp le of a typical timetable for work prior to a
will vary considerably with the size ofthe organisation. budget year commencing on 1 January, follows.
A one-ship company may only have one manager, The XYZ Shipping Company budget timetable:
whereas a ten-ship company may have an overall Department managers receive first half
151h July
manager for a number of ships and managers for each year results - commence preparatory
department. Regardless of numbers involved, work on cost centre estimates.
responsibility should lie with the person who produces 151h August Department managers coordinate cost
the budget or portion of a budget - i. e. the manager. centre estimates and present draft budgets
Of course, he must obtain approval before he can to ship manager for consideration.
proceed with the implementation of his budget, but 1 st September Ship manager discusses budgets with
once this is received he should be allowed to carry it department managers and on agreement
out with minimum interference. coordinates into ship budgets.
1.'11h September Draft ship budgets presented to divisional
Budget approval manager for approval.
lstOctober Approvedlamended budgets finalised and
Great care needs to be taken in approving or
passed to budgetary controller.
amending budgets. If the guidelines given are
followed, i.e. that the budget should be realistic, As one would expect, the more complex the budget
capable offulfilment but challenging; and providing the more time will be required to gather the
it conforms to the overall plan, there should be little information, calculate and estimate, particularly in the
to amend. It is the manager's own plan and because first stages ofpreparation - i.e. the cost centre level.
he and his team have constructed it, within the
parameters laid down, they will do their best to see it Budget preparation
through. Accuracy, attention to detail and method are
essential factors in the preparation of a budget. The
Unfortunately, there is a tendency for top manager himself should decide the degree of detail
management to insist on a reduction in the budget as required. It should be sufficient to give him the answers
a matter ofform, often in the belief that the manager he requires, but no more, as too much information
has probably set his figure too high and will spend to can create unnecessary work and confuse matters.
the limit. This can have a detrimental effect upon the Essentially budget preparation depends upon:
relationship between top management and the assumptions, past records, current information, and
manager concerned as, having carefully prepared the detail.
budget in the first place, he will know it is impossible
to achieve at the reduced level without some Assumptions: Many of these should be provided
amendments to the plan itself. by top management in order to ensure consistency
with other budgets, particularly in such matters as
Thus top managers should take care in pressing a currency exchange and inflation rates. Other
manager to reduce his budget. Of course they should assumptions should relate to corporate plans and
challenge the budget and satisfY themselves that the policies -e.g. that the ship will remain in service, but
manager is not 'playing safe' by overestimating. But will be sold for scrapping in two years' time and thus
providing they are satisfied on these points, they
will not be dry-docked during the budget year being
should leave it alone and ifit is too high for the overall
planned. Whatever the assumptions and plans, they
plan, seek a solution elsewhere.
must be known before budget preparation can begin.


Past Records: Examination and consideration of On examining the cost centres of each department
the previous years' costs and those ofthe first half of it will be found that some departments e.g. Supplies,
the current year can be of great assistance in some have many while others e.g. Insurance, have few. In
areas particularly of consumable commodities where order to be able to summarise the costs easily on the
it may be sufficient to apply an inflation factor, or form, they are grouped together as follows:
currency factor, to obtain an estimate for the next year.
Cost centres are desil\Dated 3rd category costs.
Past records are also helpful in checking against Groups of3rd category costs are designated 2nd category
estimates to ensure that the new calculations are
reasonably accurate compared with past resuIts. The swn ofal! the 2nd category costs is the 1st category or
Current information: The quality of estimating department cost.
depends very much on the information available to As stated earlier, ifthe cost centres, or 3rd category
the manager. If a manager knows that crew wage costs, are composed of a number of items, these are
negotiations take place eachJune, with any increases not shown on the budget setting form but are listed in
to commence the following July, he can allow for an a manual. In departments where there are very few
increase but can only guess the amount. However, if cost centres, they will be designated 2nd category costs.
the previous year's negotiations allowed for wage
changes in two stages over a two-year period he will It should be noted that in addition to the need to
know exactly the amount of increase and his budget group large numbers of cost items, there are
will be that much more accurate. This applies to many requirements for different levels of information.
areas in budget preparation and even the knowledge Whereas top management may only want to know
that a strategically-placed dry-dock may be closed may the total ship costs, or the ship costs broken down
have an effect on repair costs. into departmental totals, the ship manager will want
more detail and the departmental manager will want
Detail: When preparing a budget every item which even more, to be able to highlight fluctuations in the
will have a significant effect must be considered. In cost centres. The significance of this will be seen when
some departments the number of items may be so the aspects of control are considered.
numerous that they have to be grouped under one
cost centre; nevertheless, the manager must know One cost centre which should be carefully avoided
is that of miscellaneous, a convenient dustbin into
within which centre items are grouped Fortunately,
which staffcan place costs rather than take the trouble
in many cases the association of items is so close that
to seek the appropriate allocation. There should never
grouping is almost automatic.
be a miscellaneous section in any budget as every item
Budget setting forms and their of any significance should be accounted for.
arrangement Each cost centre is usually given a code number
There is a good maxim that every form should be which forms part of the overall coded company
as much use to the person completing it as the person accounting system and these are printed on the budget
who gets it. Good forms are the keystone of any system setting form. Codes simplify the allocation of costs,
and one can never spend too much time on their and adapt well to computer and other accounting
design in order to get the most effective result. equipment. It is usual to arrange the codes into
numbered groups and sub groups for easy
The form used to set the budget is called a 'budget identification of departments and categories; for
setting form'. It should be arranged so that it helps examp le, crew costs may be arranged into a 3000
the manager to prepare the budget and be useful for series, technical costs into a 4000 series and supplies
reference later. Although he can group items into cost costs into a 5000 series. Taking this one step further,
centres as he wishes, in most industries there are some 2nd category 'crew wages' may be arranged in the
fairly conventional ways of grouping costs and it is lOO group of the 3000 series (3100), 'crew travel' may
perhaps best to adhere to these conventions whenever be arranged in the 200 group (3200) and 'crew other
possible. It is particularly important to try to be costs' into the 300 group (3300). 'Ten' groups are
consistent and keep the same groups and cost centres arranged for 3rd category costs. These groups are
from year to year in order that useful comparisons usually preceded by a code to identifY the ship and
can be made. With this in mind, budget setting forms followed by other code groups used by the accounts
should be pre-printed to ensure standardisation, not departmentto identify suppliers, items to be recharged,
only of groups and cost centres but also oflayout. etc.
To avoid excessive detail on the budget setting Although the budget is for a whole year, it is usual
forms it is preferable if small items grouped into cost to show costs for each quarter year on the budget
centres are listed in a separate manual for easy setting form, in order to highlight exceptional changes
reference. Thus the form should be as uncluttered as compared with other quarters. To provide for this the
possible and only contain relevant detail. budget setting form is usually arranged with columns

Z SHIPPING COMPANY business system and thus it does not matter whether
MANAGEMENT ACCOUNTING MANUAL they are typed or handwritten, In other words, the
M.A.S. Codes - Department: Supplies
less the figures are copied the better.
Ship Code Refer to Ship Code List
Head Code: ,1. Series 5000 To summarise
A budget is a plan in financial terms,
It is based on the plans and policies of the
".tJ."~ .·t·I!III.'!rv·I~!. company or organisation and on good
1.:I,·hu'LI 'Il" ,,~.
!.d,··;"j'l:'; I"qllil'lllf'r\ ..
li.,·:i;:lniil!l, '.-tllUl-'llll",1
Its creation and implementation is the
Dr'tt.>('l..il'1..:I'.IIIII"",b.',. responsibility of management with the approval
P"llll',l"i'Tl"Y" pilln'_
-,·h .. ,,(· of senior or top management.
l·;II·~\I "'luil'llh"ll ,'.t,)" 1II')(k~. ~h.1Ckk'.I1\J'!\'\" It must be both realistic and challenging,
\1.01"'(' ,"",I," dlilHl-
KII]"" ,Ind "n,·, :'l~" RI'",,,,,, ,"Id'l~<:'" I"in. It must be meticulously prepared and produced
1ll.II>lln~ ("r~I~. m"I,ril1~
in accordance with an agreed tim e table,
Itt·\ k ~l'.·· ,-, :·1:'" TI·"i., p"lmlll.~ It should consider every factor and each factor or
(·qlllp)ll,.I~I. ,1,1:':'.
1-1.·,1_"",,·: ';;1." Hn .I'wk ,.~, uin',,,.-,\b group offactors should be given a cost centre labeL
Ch, "Hq,). ,;11·: l\l'Ia~\"rll~l',n, ',0111),. It should never have a miscellaneous cost centre,
l!"';")lin!!. d"C)\',,"'II!!
b'!:\'ln""'II,ll" ·,.t" l , (..I·.·. .;-'J' . ("'~. ht'(')I•.. \ ••,nkll". It should be prepared on a standard fonn which
I.,""LII •• I '- ".: null)-, W:.l",
~illll)';'~_ " : l'
should aid managers before and after the budget
is approved,
Figure J7.2 There should only be one budget.
for costs for the four quarters and a total column for Accounting practices
the year, Finally, each budget form should have space One of the difficulties experienced by ship
to show in writing all assumptions used and estimates managers when dealing with accounts and accountants
of out-of-service time for dry-docking, crew changes lies in reconciling the financial datapresented to them
and any other items of importance,