Annual Report 2004

Loss Prevention

1.Ship Inspection

As one of the most important work in loss prevention and quality control programme, the Association has been keeping on carrying out pre-entry condition survey on ships with specific age scale as well as random inspection of vessels which have a high figure of incidence.

The policy year of 2004 is a year in which the entered tonnages and number of vessels have increased rapidly. As a direct consequence of such increase, the number of vessels that where condition surveyed also is at high level. In this year, the Managers carried out surveys on 128 vessels (approximately four times as many as that in 2003), of which, 83 vessels were pre-entry condition surveys whilst 30cases were for follow up condition survey. Random inspections reached a figure of 11 vessels which are mainly those of over aged. It is noted that special condition survey were carried out on 4 vessels which were highlighted for their increasing incidence.

Recently, the International Group of P&I Clubs has made new approach towards ship quality control. It is understood that ship’s age limit for condition survey is reduced from previous 15 years to 12 years or even younger depending on type of ships and class status. Furthermore, those vessels that frequently appeared on the PSC list (for example the Paris Mou) are likely to subject to more detailed inspection is they enter the European Union waters. Members are kindly suggested to pay particular attention to the Association’s condition survey programme.

2. Seminars

The Association held a seminar in Guiyang in October 2004. A total of 65 people, including representatives from member companies were present at the seminar. Lectures are given respectively by the officers of the Managers, Qingdao Maritime Court, Xiamen Maritime Court, Yangzhou MSA, Department for Average Adjustment of CCPIT, and Members on the subject of on the subject of “ Issues on limitation of liability for maritime claims and its procedures in China”, “Issues concerning bills of lading and its applicable laws in legal practice”, “Introduction to law enforcement in maritime administration”, “Maritime claims, GA, PA and collision”, “Research of regulations and practices on Heavycon”, “Introduction to the implementation of ISPS Code”.

The seminar enabled Members to know the latest legislation of both domestic and international maritime law, and get a better understanding of current practical problems in maritime business. It was a good opportunity for representatives from Members to exchange their views and enhance their awareness of loss prevention. The Managers published a special booklet containing papers delivered in the seminar for Members’ reference.

Furthermore, the Shanghai and Dalian office of the Association were invited to introduce their experiences in handling and settling cases in seminars held by two Member companies.

3,Advisory Service

In 2004 policy year, the Managers compiled 12 issues of Advisory Service. There were altogether 22 articles, most of the topics concerned with maritime law and loss prevention. The Introduction of ISPS Code circulated ? the convention coming into effect on July 1,2004. The implication of ISPS Code on Sea Transportation and Marine Insurance made further analysis on this convention and reminded the Member to take necessary steps to prevent unnecessary detain of ships. Chinese Legislation on Liability Insurance for Oil Pollution from Ship Source kept the member informed of latest development in legal matter.

In the area of loss prevention, Carefully to Carry Sulfur advised the member of the steps be taken to minimize the risk of transportation of such kind of cargo. How to Handle Oily Water Separators Properly emphasized the importance of handling of oily water separators and listed a series of procedures for crew member to follow when ships trade in USA waters.

4,Oil Pollution Certificates

Due to the difficulty in accounting the precise number in issuing the Blue Cards and COFR, it is decided the Managers would no longer make reports in this aspect further. This is also the same case with others International Group.

Investment

In compliance with the Board’s resolutions, the Managers continued it’s investment activities under the principle of security and efficiency during the policy year. The investment return was quite satisfactory. Although not being the major business of the Association, the Managers’ good job in the investment not only reduces the cost of insurance for the members but also enhances the financial status of the Association.