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Web Alert: Lloyds List article A step by step guide to dealing with disaster

15 February 2013

Pre-casualty Phase one: emergency response, Phase two: addressing environmental concerns, Phase three: caretaking, Phase four:removal

What to do before, during and after an incident

Liz McMahon - Friday 15 February 2013

What to do before, during and after an incident:

Pre-casualty

Standard Club syndicate claims director Sam Kendall-Marsden advises ensuring the emergency response plan is up to date and is tested on a regular basis, involving underwriters and other advisers.

“This is primarily a desk exercise designed to ensure that everything has been thought through, that people understand their roles in the event of a casualty and have clear lines of communication,” he says.

“Ensure all key relationships are in good order with authorities at ports that you use regularly and potential service providers such as salvors, correspondents, lawyers and anti-pollution companies.”

Mr Kendall-Marsden says media relations are an important element of planning a response to an emergency and media advisers should ensure you have the trust of key publications. P&I Clubs play a support and advisory role here.

Phase one of casualty — emergency response

The key decisions immediately after a casualty are the nature of the response, choice of salvor and the type of contract that you use — e.g. Lloyd’s Open Form versus time and materials (for example, BIMCO Wreckhire) or LOF versus a towage contract (for example, BIMCO Towhire).

Getting it right means saving a lot of money and — in a salvage or wreck removal — time, and allows for a large amount of flexibility, says Mr Kendall-Marsden.

“A golden rule is to work in tandem with your insurers and consult them. Decisions sometimes get taken in the heat of the moment without proper consideration and consultation. This can waste a lot of money because you have the wrong plan, contract and/or the wrong salvor,” he advises.

“This is an area where the P&I Club should have a leading role. Also, how you handle and respond to the media in the immediate aftermath of an incident is crucial.”

Phase two — addressing environmental concerns

This would typically involve bunker removal and other steps to minimise the danger of environmental damage, and then starting remedial work.

Mr Kendall-Marsden says that at this point, relations with the authorities can be critical.

“At best, your partnership with them will form the basis of a successful response; at worst, they could make your life very difficult, add substantially to the cost and the media fallout,” he says.

“This could include making unreasonable demands in relation to bunker removal, for example, where a wreck is located at depth. The harder and more time-consuming the operation, the higher the cost.”

Mr Kendall-Marsden says it is important to remember the authorities may well be under political pressure to be seen to be doing something and there have been occasions where their demands have been unreasonable and the potential benefits of the actions they have required have been outweighed by operational difficulties and cost.

“The onus is on you to come up with a viable plan which the relevant authorities will agree to, so that you can remain in control and have a better chance of controlling costs. Ignoring their orders, as sometimes happens, is fraught with danger,” he says.

“You will be in the firing line if something goes wrong — or they could just get someone else to do the work and send you the bill. Your P&I Club should now be at the front line, directing the response in consultation with the shipowner.”

Phase three — caretaking

At this point, everything should be under control, says Mr Kendall-Marsden. The ship should be stable and the environmental threat eliminated.

The next task is to keep things in good order while responsibility for removal of vessel or wreck and other work is decided upon.

“Prepare for constant pressure from authorities to get things done. It is essential to make the right decisions instead of rushing things, or the eventual outcome may be a lot more expensive than necessary, plus there is the risk of possible bad publicity,” he says.

The shipowner, the club and their technical advisers should work together in the preparation of an invitation to tender, the evaluation of the bids and the selection of a preferred contractor.

Phase four — removal of vessel/disposal of wreck

Mr Kendall-Marsden says that while the contractors will be doing the work, the shipowner and its club should be actively managing contractual performance, keeping the authorities updated and obtaining necessary permits and permissions on an ongoing basis, so the operation can run smoothly.

This article is copyright Informa and is reproduced with permission. Reproduction, retrieval, copying or transmission of this article is not permitted without the publisher's prior consent. Informa does not guarantee the accuracy of the information contained in this article nor does it accept responsibility for errors or omissions or their consequences.

This article appeared in Lloyd's List on 15th February 2013. For more information visit
www.lloydslist.com