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The disaster of the sunken bulker »Stellar Daisy« led to a renewed discussion about cargo liquefaction, what some exports believe to be the cause of the accident. For insurance providers like Skuld, the topic is of high importance. In an Interview with HANSA, Bjørn Flåm, Global Head of Loss Prevention, talks about causes and potential measures to thwart fatal incidents

What are the main causes of liquefaction?

Bjørn Flåm: Usually this is seasonal, when heavy rains[ds_preview] occur in certain nickel ore producing countries like the Philippines and Indonesia, but iron ore fines and bauxite are also cargoes for which we see liquefaction cases. Recently, because the rainy season is not predicable there has been an increase in claims and difficulties for vessels. Many mines are now operating also in the rainy season whereas before they would normally have been closed for two months.

Are shipowners and crews to blame?

Flåm: In our view it is not the fault of the owner or crew but a combination of causes with each stakeholder playing a part.

First it is important to understand that e.g nickel ore is a Group A cargo under the International Maritime Solid Bulk Cargoes Code (IMSBC), and when such cargo is carried, the shippers are responsible for establishing procedures for sampling, testing and controlling the moisture content to ensure that same is less than the Transportable Moisture Limit (TML). The Shippers must produce a valid declaration before any cargo is loaded on board and it is their obligation to ensure that a safe cargo is shipped. However the mines should be inspected and regulated by an independent Competent Authority and if there is no clear Competent Authority or no real follow up by the Competent Authority that too will be a factor that can cause the situation to arise.

Further complicating matters is that it is not always clear from a visual inspection alone that there are problems with the cargo, and masters are not supposed to be experts in nickel or other mineral cargoes.

According to the Code, the shipper shall facilitate access to stockpiles for inspection, sampling and subsequent testing by the ship’s nominated representative. For unprocessed mineral ores, the sampling of stationary stockpiles shall be carried out only when access to the full depth of the stockpile is available and samples from the full depth of the stockpile can be extracted.

In many areas it is not possible to do this as the shippers prevent access by the surveyors to the stockpiles often threatening local surveyors who try to inspect the stockpiles. The reason for this is that stockpiles are open to the elements with no coverage. The cargo is brought straight from the ground, then it is stored in the open or taken straight to barges.

How could fatal incidents be prevented?

Flåm: Everyone is an interested stakeholder. So, the first thing is to try to get the shippers on board for a safety culture. If they can take the steps outlined above, which are not that expensive, that will help reduce claims. The next step is to ensure that there are sanctions in place for shippers that refuse to adopt the safety culture on board. It would really help if there was a clear independent Competent Authority in the jurisdictions that could set up a schedule of inspections and monitor mines to make sure they do comply.

For masters, it is important that they do not let the shipper’s representative dominate the cargo loading process. When in doubt, they should get a P&I Surveyor to attend. Owners must support masters and let the samples be taken and analysed even though this will cause a delay. The best prevention is if red flags appear – like heavy rain occurs or no surveyor is allowed to take samples – the master looks carefully at the certificates presented and if in doubt does not accept them and does not load any cargo. It is easier for the ship to sail without cargo, assuming the owner/master can show that the cargo was in excess of TML.

Owners need to ensure proper clauses in the charter party which protect them in these circumstances, such as the BIMCO’s »Solid bulk cargoes that can liquefy« clause, but all the good clauses in the world will not help if your charterer has no money to pay any award issued against him should he load wet cargo and disputes occur later about taking the cargo off. So owners should do due diligence on their charterers. Do they have money, are they a solid company? Owners should also independently check if the shipper and mine are on any banned list. Taking cargo from a banned mine e.g. in the Philippines can expose owner and master to delay and local legal issues. Another possibility would be can tests.

What are the details of such tests?

Flåm: For can tests you fill a can with cargo and repeatedly pound it against the deck to see whether moisture emerges. This can help the master to determine the condition of the cargo and although not fail-safe, it is better than nothing. Under the IMSBC Code, the can test is a complementary test. If the cargo is in a fluid state after the can tests, it should be rejected but the latest edition of the IMSBC Code highlights that cargo can appear dry but still be over the TML. The Code describes the can test method and stipulates that after the can test »if free moisture or fluid condition appears, arrangements should be made to have additional laboratory tests conducted on the material before it is accepted.«

Some shippers however are keen to get their cargo out so they have loading officers attend the vessel. Often these loading officers will dictate how the cargo is to be sampled and shippers will try to have large lumps in any can tests. The reason for this is the large lumps prevent a real result from emerging. By limiting the crew’s ability to choose where on the barge the cargo is taken for can tests, shippers can prevent very poor cargo being taken for a test in the hope that the sample they do allow passes. In some countries, if the shippers load cargo in excess of TML, there is no criminal liability or sanction against them locally. Even if there are legal sanctions it is very difficult for owners to enforce claims locally against the shippers and mines, so there is no real reason for them to have a safety culture. Their only interest is to ship the cargo on board the vessel regardless of the weather. One way to change matters is to find a way to hold the shippers liable both criminally and in monetary terms. Then the shippers would have an interest in complying with the Code.

Is it expensive to fix this problem?

Flåm: The steps that would need to be taken to make the cargo safe or not are relatively inexpensive. Measures include covering cargo with tarpaulin at the mine, loading area and barge, allowing a wide surface area so cargo can be dried before loading, or getting proper tests done to determine the real TML.

What are the »red flags«?

Flåm: Sometimes a master cannot tell if the cargo is wet or not. However, there are warning signs that something may not be right. If a master or owner ignores the red flags because they just want to get the ship to the discharge port then you could say they hold a responsibility. In fact, if they do not act prudently their P&I Cover could be prejudiced.

A red flag can be the fact that shippers do not allow an inspection of stock piles, or they do not do anything to protect cargo in stock piles from moisture, or that they do not allow proper samples to be taken from the stock piles.

Others might be no or limited cover of barges, shippers failing to give proper certificates, can tests failing, or barges being re-presented after rejection because of wet cargo with too little time in between to dry the cargo. Cargo is loaded often during the night, so sometimes the shipper will re-present a rejected barge in the early evening and say it has been sun dried. Clearly it has not, but he will try to force the master to take the cargo. The master should in these circumstances reject the barge.

If at the negotiating stage the charterer inserts a clause trying to deny owners the right to have the cargo tested at an independent laboratory or preventing owners from having a surveyor monitor the loading process, this should ring some alarm bells for any prudent owner.

When the above mentioned red flags appear, a master may assume that the shipper’s certificates may also not be accurate. Under those circumstances the master should stop loading and seek further assistance from the P&I Club.

Do you agree that the topic is »one of the key risks to the future safety of shipping«, as some experts say?

Flåm: Yes for this sector of shipping it definitely is.

Could adaptions in ship design improve safety?

Flåm: To our knowledge there is not much you can do with a traditional bulker, but there are a few specialised vessels with longitudinal bulk heads in the holds but that requires a substantial investment and is probably only viable if you have a very long-term charter for carrying only such cargo that allows for it.

Is there any amendment to the existing international regulation needed?

Flåm: The way we see it, the Code is good and does not have to be materially amended. What seems to be the problem are the various issues preventing compliance with the Code.

Interview: Michael Meyer

Michael Meyer