Careful who you sell that ship to!

Safety in ship recycling has been a priority of the EU for more than seven years. Under EU Regulation 1257/2013, in force since 2018, there is a complex system of EU approval of ship recycling facilities, it being illegal to send an EU-registered ship for recycling to an unapproved facility (meaning as often as not a not-very-deserted beach in India or Bangladesh, where she is broken up essentially by hand). This Regulation is to be retained EU law post-Brexit, though from the end of this year it will be significantly narrowed, in that it will only apply to UK-registered vessels (i.e. pretty few).

But quite a lot of ship recycling is outside the regulation. A case in point was the Maran Centaurus, a vessel previously in the news as the victim of a high-profile Somali hijacking in 2009 that led to payment of a then-record ransom of about $7 million. Owned by Greek interests, at the end of her life she was reflagged to Palau and sold to a buyer for demolition, who in turn resold her to a beachside Bangladeshi concern. During demolition a worker operating in very dangerous conditions was killed. His widow rightly concluded that the demolishers were not worth powder and shot. She instead sued the owner’s managing agents, a UK company who acting under the owners’ instructions had arranged the sale, alleging that it should have been foreseeable that unless they took steps to ensure that the vessel ended up in the hands of responsible breakers she would be broken up — as she was — without any serious regard for worker safety. The agents denied fault and applied for a strikeout, on the basis that a seller of a ship owed no duty in respect of dangerous practices that might later occur in relation to her. This was not, they said, a case of damage caused by hazardous materials aboard the vessel injuring a worker: there was nothing more here than a sale indirectly to a person likely to have a less than satisfactory attitude to industrial safety.

This writer has quite a lot of sympathy for this view. But in Begum v Maran (UK) Ltd [2020] EWHC 1846 (QB) Jay J declined a strikeout, regarding it as highly arguable that, despite the vessel herself not being unusually hazardous, this was a case where the defendants had created a foreseeable risk of harm and as such potentially owed a duty of care to the worker concerned.

Note that this is not a holding that there was a duty of care: merely that the argument that there was one wasn’t a non-starter. Nevertheless, it should worry shipowners everywhere (and cause them to check on their insurance coverage). It might even extend further: for example, what of a shipowner who sells (or bareboat charters) a vessel to an operator known to have a dodgy safety record: the logic of the Maran case seems to apply here too, and if it is followed we cannot rule out liability in the seller or owner.

Admittedly the if might be a biggish one. We said that we had sympathy for the defendant’s argument. The chances are that this case will now settle so we won’t ever get a final answer here. But the defendants’ case is strong. The case for making owners responsible for policing the safety records of disponees is by no means obvious, any mote than it is obvious that in selling my car I should have to take care lest the buyer is a known drink driver. It may well be worth fighting this issue again if, as seems highly likely, it comes back to the English courts in another case.

BIMCO COVID-19 Crew Change Clause – An Attempt to Facilitate Crew Changes

On 25 June, BIMCO announced the publication of their novel COVID-19 Crew Change Clause for Time Charter Parties. The clause provides shipowners with the right to deviate for crew changes ‘if COVID-19 related restrictions prevent crew changes from being conducted at the ports or places to which the vessel has been ordered or within the scheduled period of call’. Shipowners can exercise their right to deviate by giving charterers a written notice as soon as reasonably possible. The crew change costs will rest on shipowners, unless shipowners and charterers agree that the vessel will remain on hire during the deviation period, but at a reduced rate. In such case, the cost of bunkers consumed will be shared equally between shipowners and charterers.

With more than 200,000 seafarers currently working on board after the expiry of their contracts of employment, the COVID-19 Crew Change Clause at least ensures that shipowners can sail to those few ports were crew changes are possible, without facing the risk of breaching their contractual obligations under time charters. It should be noted, however, that this is not a panacea to the issue of crew changes. Recognising seafarers as ‘keyworkers’ and designating ports where crew changes can take place safely following the Protocols designed by the IMO (Circular Letter No 4204/Add 14 (5 May 2020) should remain a priority. 

Singapore Passes Legislation to Give Effect to the Third Group of Amendments to the Maritime Labour Convention 2006

On 5 June 2018, the International Labour Conference (ILC) at its 107th Session approved the third group of amendments to the Maritime Labour Convention 2006. The amendments were agreed by the Special Tripartite Committee on 27 April 2018 at its third meeting at the International Labour Organisation (ILO) headquarters in Geneva. The agreed amendments were the result of the work undertaken by the ILO, in view of the Resolution adopted by the ILC at its 94th (Maritime ) Session concerning the effects of maritime piracy on the shipping industry, and concern Regulations 2.1, 2.2, and 2.5 of the Convention which deal with the seafarers’ employment agreement (SEA), the seafarers’ right to be paid wages, and the seafarers’ right to be repatriated, respectively.

In particular, the amendments stipulate that a new paragraph will be inserted to Standard A 2.1. ensuring that a SEA shall continue to have effect while a seafarer is held hostage on board a ship or ashore by pirates or armed robbers. The term ‘piracy’ is given the same meaning as in the United Nations Convention on the Law of the Sea 1982 (UNCLOS). Armed robbery against ships is defined as ‘any illegal act of violence or detention or any act of depredation, or threat thereof, other than an act of piracy, committed for private ends and directed against a ship or against persons or property on board such a ship, within a State’s internal waters, archipelagic waters and territorial sea, or any act of inciting or of intentionally facilitating an act described above’.

Furthermore, a new paragraph will be inserted to Standard A 2.2. stating that, where a seafarer is held hostage on board a ship or ashore by pirates or armed robbers, wages and other contractual benefits under the SEA, relevant collective bargaining agreements or applicable national laws, shall continue to be paid during the whole period of captivity and until the seafarer is released and duly repatriated or, where the seafarer dies while in captivity until the date of death as determined in accordance with national laws or regulations.

Finally, in Regulation 2.5, paragraph 8 will be replaced to ensure that the seafarers’ right to be repatriated shall not lapse where a seafarer is held hostage on board a ship or ashore by pirates and armed robbers. The terms piracy and armed robbery against ships shall have the same meaning as in Standard A2.1.

According to the process to be followed for the amendment of the Maritime Labour Convention 2006 under Article XIV of the Convention, the agreed amendments have now been notified to all Member States whose ratification of the Convention was registered before the date of the 107th Session of the ILC. The Member States will have two years from that notification to express a formal disagreement to the agreed amendments. Unless more than 40 per cent of ratifying Member States, representing not less than 40 per cent of the world gross tonnage, have formally expressed their disagreement with the amendments, they will enter into force six months after the end of the two years. Since no formal disagreements have been expressed, the expected date for entry into force is 26 December 2020.

Singapore is one of the very first States to pass legislation to enable domestic law to give effect to the third group of amendments to the Maritime Labour Convention 2006. On 25 March 2020, the Singapore Parliament passed a Bill to amend the Merchant Shipping (Maritime Labour Convention) Act 2014, which will take the force of law later this year. The Bill focuses on two points. First, it makes any necessary amendments to Singapore law to enhance the employment protection for captive seafarers. Secondly, it provides insurers with a statutory right to become subrogated to seafarers’ rights where, under a contract of insurance or other financial security, an insurer has paid for liabilities arising from a shipowner’s obligation to repatriate a seafarer.

COVID-19: An Occupational Disease?

On April 28, 2020, the global trade union movement urged governments and occupational health and safety bodies around the world to recognise SARS-CoV-2 as an occupational hazard, and COVID-19 as an occupational disease.

In practice, this means that the employer’s duty to take reasonable measures to protect the health and safety of their employees will cover COVID-19 related risks. Furthermore, it means that employees will be able to benefit from compensation schemes provided for those injured, or the dependants of the deceased, whenever there has been injury or death due to work-related accidents or occupational diseases.

Recognising COVID-19 as an occupational disease will be crucial to ‘key workers’, such as seafarers. For that it will ensure that adequate preventive measures are adopted and, if they contract COVID-19 at work, that existing compensation and liability regimes remain applicable.

EU COMMISSION URGES MEMBER STATES TO DESIGNATE PORTS WHERE CREW CHANGES ARE FACILITATED DURING COVID-19 PANDEMIC

In response to the IMO recommendations for governments and relevant national authorities on the facilitation of crew changes and repatriations during the COVID-19 pandemic, the European Commission has now taken steps to facilitate and coordinate the efforts of Member States to enable crew changes in their ports.  

On guidelines published 8 April 2020, the European Commission urges Member States to designate ports for fast-track crew changes. The ports should be geographically dispersed so as to cover the Union and should be connected to operational airports and rail stations.

Given that transport connections are now heavily affected, the European Commission further urges Member States to envisage the possibility of dedicated flights and rail operations to ensure the transport connections for crew changes, allowing for swift travel and repatriations of seafarers.

Regarding the characteristics of these designated ports, the European Commission highlights that they should have nearby accommodation where seafarers could wait for arrival of the ship they should board or for their flight, train or ship if it does not leave on the same day. This accommodation should have adequate facilities to allow seafarers to undergo 14 days of quarantine before embarking and after disembarking if the Member State at hand requires this to protect public health. Finally, the ports should have accessible and adequate medical services available to seafarers when they embark, disembark and during their quarantine periods.

The European Commission clarifies here that seafarers who are nationals of third countries should also have access to adequate medical care and accommodation until their repatriation becomes possible. However, Member States may be entitled to request compensation from the shipowner. In this respect, the provisions of the Maritime Labour Convention, 2006, apply to ensure that accommodation and medical care should, in principle, be provided at no cost to seafarers.

The European Commission has also commented on the practice of extending the usual 11 months duration of a SEA stating that this should be the last resort, if repatriation is not possible. This is essential to ensure that fatigue does not detrimentally affect the mental health of seafarers and maritime safety.

As a final note, the European Commission stresses the need for the practice of designating ports where crew changes can take place safely during the COVID-19 pandemic to be shared with third countries to be implemented worldwide.

THE IMO CIRCULATES PRELIMINARY LIST OF RECOMMENDATIONS FOR GOVERNMENTS AND RELEVANT NATIONAL AUTHORITIES ON THE FACILITATION OF CREW CHANGES AND REPATRIATIONS DURING THE COVID-19 PANDEMIC

The COVID-19 pandemic is a global public health crisis, which places unprecedented restraints to the movement of seafarers for the purposes of crew changes and repatriations. In a circular letter issued on the 27th of March 2020, the IMO has distributed a preliminary list of recommendations for governments and relevant national authorities on the facilitation of crew changes and repatriations during the COVID-19 pandemic. Amongst other things, the IMO specifically urges governments to:

  • designate seafarers, regardless of nationality, as ‘key workers’ providing an essential service;
  • grant seafarers with any necessary and appropriate exemptions from national travel or movement restrictions in order to facilitate their joining or leaving ships;
  • accept, inter alia, official seafarers’ identity documents, discharge books, STCW certificates, seafarer employment agreements and letters of appointment from the maritime employer, as evidence of being a seafarer, where necessary, for the purposes of crew changes;
  • permit seafarers to disembark ships in port and transit through their territory (i.e. to an airport) for the purposes of crew changes and repatriation;
  • implement appropriate approval and screening protocols for seafarers seeking to disembark ships for the purposes of crew changes and repatriation; and
  • provide information to ships and crews on basic protective measures against COVID-19 based on World Health Organisation advice.

While these preliminary recommendations point towards the right direction, still there is a lot that needs to be considered. As recognised ‘key workers’, seafarers will be able to travel to and from a vessel, provided they carry at all times their professional documentation. However, seafarers, who sign off their ships at foreign ports, might not be able to be repatriated, despite their ‘key workers’ status. That is because many countries have now closed their international borders, and so commercial flights have been cancelled until further notice. In these circumstances, it will be up to the seafarers’ country of residency to take appropriate measures for their repatriation.

Furthermore, many countries have now adopted mandatory measures requiring people to self-isolate before they enter their territory depending on whether they had recently visited an affected country. Seafarers will have to adhere to these mandatory measures, irrespective of their ‘key workers’ status. That raises the question as to who should bear the cost for any expenses incurred by seafarers during self-isolation. According to regulation 2.5 of the MLC, 2006, shipowners should cover the costs of repatriation (i.e. travel expenses, food, clothing, accommodation, medical treatment etc) until seafarers are landed at the place of return (i.e. the agreed place under the SEA, the place at which seafarers entered into the SEA or the seafarers’ country of residency). Thus, seafarers who have to self-isolate awaiting repatriation at a foreign country should not bear any costs. It is, however, likely that seafarers who have to self-isolate at the place of return will have to bear the cost for any additional expenses.

Given these complexities, many shipowners now prefer to extend the SEAs instead of signing-off and repatriating crewmembers. However, this cannot be done without the consent of seafarers, unless, of course, the SEAs include a clause to that effect. In any case, any decisions as to the extension of the SEAs should not be taken lightly and should not prejudice the seafarers’ mental health and wellbeing.

Let’s  not be punitive. SCOTUS goes ‘wet’ on unseaworthiness.

 

American seamen have three avenues of recovery against a shipowner in respect of injuries sustained on board a ship: maintenance and cure; the Jones Act; a claim of unseaworthiness.

Punitive damages are available for the first of these, but not the second. The position as regards unseaworthiness was, until recently, unclear with a Circuit split on the issue. This has now been resolved by the Supreme Court’s decision in Dutra Group v Batterton ,588- U.S.. ____ (2019) , to the effect that punitive damages are not recoverable. The  overwhelming historical evidence was against such damages being available in an action for unseaworthiness. A  novel remedy could not be sanctioned unless it is re­quired to maintain uniformity with Congress’s clearly expressed poli­cies, particularly those in the Merchant Marine Act of 1920 (Jones Act), under which only compensatory damages were recoverable.

To allow punitive damages on unseaworthiness claims would create bizarre disparities in the law. First, a mariner could make a claim for punitive damages if he was injured onboard a ship, but his estate would lose the right to seek punitivedamages in a wrongful death action if he died from his injuries. Second, because unseaworthi­ness claims run against the owner of the vessel, the owner could be liable for punitive damages while the ship’s master or operator—who could be more culpable—would not be liable for such damages under the Jones Act. Third, allowing punitive damages would place Amer­ican shippers at a significant competitive disadvantage and discour­age foreign-owned vessels from employing American seamen

Bully off. New amendments to Maritime Labour Convention now in effect.

 

On 8 January 2019 the 2016 amendments to the Maritime Labour Convention came into effect. These amend Guideline B4.3.1 concerning the provisions on occupational accidents, injuries and diseases so as to include harassment and bullying. Governments and shipowners are expected to adopt measures to improve protection for seafarers from shipboard harassment and bullying using as a reference the Guidance on Eliminating Shipboard Harassment and Bullying  jointly published by the International Transport Workers’ Federation and the International Chamber of Shipping. The amendments also allow for an extension of the validity of maritime labour certificates in circumstances where ships have passed the relevant inspection but where a new certificate cannot immediately be issued and made available on board.

Maritime or non-maritime? The status of oilfield contracts in Louisiana

 

 

On 8 January 2018 the Fifth Circuit  en banc (In re Larry Doiron, Inc., http://caselaw.findlaw.com/us-5th-circuit/1885307.html (5th Cir. Jan. 8, 2018 No. 16-30217)) reworked the test for determining whether oilfield contracts are maritime or non-maritime in nature. Under maritime law knock for knock indemnity clauses in oil field service contracts are valid, but under anti-indemnity statutes in some states, such as Louisiana and Texas, they are invalid.

 

The case involved flowback operations performed in state waters on a fixed platform. The master service contract for the flowback work did not call for any vessel involvement. However, during the job the flowback contractor, STS, found a crane was needed to manipulate some of the flowback equipment. A tug and barge were needed to get the crane to the platform and the platform owner had to charter in vessels to allow the flowback contractor to do its work. required the platform owner (Apache) to subcontract with Larry Doiron Inc to charter in the necessary vessels to allow STS to do its work under the MSC.   During the ensuing operations, an STS technician was injured, and LDI sought indemnity from STS under the terms of the Apache-STS MSC (which provided for indemnity from STS to Apache and any of Apache’s subcontractors).

 

The Fifth Circuit set out a new two part test to determine whether or not the contract is maritime in nature. First, is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters? Second, if the answer to the above question is “yes,” does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract? If so, the contract is maritime in nature.

 

Applying this new test to this case, the oral work order called for STS to perform downhole work on a gas well that had access only from a platform. After the STS crew began work down hole, the crew encountered an unexpected problem that required a vessel and a crane to lift equipment needed to resolve this problem. The use of the vessel to lift the equipment was an insubstantial part of the job and not work the parties expected to be performed. Therefore, the contract was non maritime and controlled by Louisiana law which barred the indemnity under Louisiana Oilfield Indemnity Act.