Loss Prevention
1. Ship
Inspection
The Association had arranged 150 condition surveys
in the 2010 policy year, which represents a slight increase from the 148 condition
surveys preformed in the previous policy year. Entry condition surveys were
carried out on 49 ships, and 86 ships were subject to follow-up surveys. Random
inspections for loss prevention were carried out on 15 entered ships. However,
some planned random inspections on entered ships were not completed for various
reasons. In the 2010 policy year, several vessels were denied entry into the
Association due to failure to meet the minimum entry requirements.
In
the 2010 policy year, the ship inspections performed by the Association showed
that the overall condition of newly entered ships has greatly improved. Among
the newly entered ships, 42% of them passed the entry survey at first attempt,
and 16% of them were accepted after one follow-up survey.
The ship inspections performed in the 2010 policy
year revealed some common problems, which can be summarized as follows:
(1)
Some vessels were still found
with problems of watertightness in hatchcovers and cargo worthiness of cargo holds after
several inspections. As cargo claims constituted the majority of claims, all
the P&I Clubs have enhanced their requirements for cargo worthiness of
vessels. Therefore, many vessels were subjected to follow-up surveys
repeatedly, because of problems in cargo worthiness.
(2)
With all the efforts from the
Association, especially after the Club Circular on Condition Surveys was issued
on 13th Oct. 2010, Members’ awareness for the importance of
condition surveys had been greatly enhanced. However, problems still exist. For
example, some Members did not attach sufficient importance to the deficiencies
found in ship inspections, they would not rectify the deficiencies promptly,
and found various excuses to delay the rectification, so the follow-up survey
arranged by the Managers according to the Club Circular could not be completed
within the given time scale.
(3)
The overall competencies of the
crew members had left much to be desired. The areas in need of improvement
included lack of communication skills in English, incapability in reading the
operation manual or instructions, incapability in identifying the major labels
or signs onboard, lack of safety awareness, incapability in carrying out
various works in consistence with safety requirements.
The Association would like to draw Members
attention to the following aspects:
(1) To protect the interests of Members, all
Members must take great care to the ship inspections arranged by the
Association, promptly rectify the deficiencies found by the surveyor, and make
sure the follow-up survey can be arranged within the time scale specified by
the Association, so that unnecessary dispute can be avoided in claim handling
when accidents occur in the future.
(2) To ensure a ship completes and passes a
condition survey in one attempt,
the Association suggested Members to notify the Managers when the ship (especially
an old ship) is in dry docking, so that the Managers can arrange relevant
surveys to save time and cost.
In order to ensure that the condition surveys can
be carried out successfully, all Members are herewith kindly reminded to ensure
effective inner communication between the commercial department and maintenance
department, and arrange suitable times according to the vessel’s schedule and
notifying the surveyor and the Association in a timely manner. As the survey
starts, both the personnel onboard and management team ashore ought to provide
their full assistance and cooperation to the surveyor. While giving priority to
important items during the condition survey, the on-board personnel are
required to support the surveyor to complete as many items as possible.
If any restriction clauses have been attached to
the ship’s cover due to defects or deficiencies found in a condition survey,
Members are required to undertake the repair within the time scale required to
rectify the deficiencies and report back to the Association, so as to avoid any
disputes in respect of the cover.
2.
Seminars
On 1st Nov. 2010, the Association successfully
held a seminar on claim handling in Sanya,
The
topics of this year’s seminar were designed to focus on points of interests in
the daily operation of member companies. The
seminar was highly valued by the Members, as it provided a great opportunity
for the participants to exchange their opinions and improve their awareness of
loss prevention.
3.
Advisory Service
In the 2010 policy year, the Managers compiled 12 issues
of Advisory Service, mainly focused on shipping laws and loss prevention, with
a total number of 47 articles.
In the shipping law section, the following
articles were included.
The article “The Latest Developments in the
Oil Pollution Compensation Regime and Oil Pollution Liability Insurance
Legislation” introduced the section related to P&I insurance in
the “Regulation on the Prevention and Control of Vessel-induced Pollution to
the Marine Environment” ,which came into effect on 1st March 2010,
and its corresponding regulations and laws. This article also provided
information on the principles established by the Supreme Court of China in its
judgment of Tasman Sea, briefly introduced the draft “Provisions of the Supreme People’s Court on Some Issues Concerning the
Trial of Cases of compensation for oil pollution from ships”, and provided a
comprehensive description of the main legal issues in the ship-source oil
pollution compensation regime of China. The article “Charterparty
and New Building Contract” provided a detailed analysis of the common disputes
in such contracts and the latest precedents in English law. The article “Strategy
and Technique in International Maritime Arbitration” provided some strategy in
The loss prevention sections included the
following articles. “Study on Loss Prevention in Carriage of Dry Bulk Cargo”
introduced some points for attention and loss prevention measures in different
stages of dry bulk cargo transportation by analyzing the dry bulk cargo claims
one Member had dealt with in recent years and some typical cases in dry bulk
cargo trade, so that Members can implement loss prevention measures and prepare
for defenses when claims occur. The article “Points for Attention in Carriage
of Mineral
Fines” listed a series of casualties occurred in carriage of
mineral fines, analyzed the characteristics of mineral fines and aspects
needing special attention in carriage of mineral fines. This article also
provided a simple method to check the moisture content of mineral fines.
These articles are of great value to Members in
enhancing safety management and avoiding accidents.
In addition, 37 Loss Prevention Circulars were
issued to introduce new developments in maritime law, shipping, insurance and
loss prevention etc.
In compliance with the resolutions of the Board,
the Managers engaged in reasonable investment activities under the principles
of safety and efficiency. The Association achieved an investment return of
16.63% in 2010, which was much higher than the market interest rate as well as
the average investment return of 5.10% achieved by other insurers in
In accordance with the decision of the Board, the
Association distributed an investment subsidy of 11% and 9% to Members of
P&I risks and Mutual Hull respectively in the 2010 policy year so that
Members could share the benefit brought about by the investment activities.
Although investment activity is not the core
business of the Association, its income not only reduced the insurance costs of
Members but also enhanced the capacity of risk resistance and cohesion of the
Association.