NEWS

The May Shipshape newsletter for AIMS has now been released.  Please find within updates and institute news from our Chairman and General Manager as well as a snapshot of some of our presentations from the 2022 Conference.  AIMS Shipshape May 23

The AIMS latest issue of Shipshape has now been released.  Contained within is news from AIMS Chairman and General Manager, AMSA and MNZ updates for commercial surveyors and general interest articles covering all sectors of the industry.  Brew a cuppa and take a few minutes to peruse the latest news.  

Shipshape September 2022

In December 2021, the Australian Government commissioned an independent review of the National System and the National Law to consider whether Australia's legal framework regulating the safety of domestic commercial vessels (DCV's) is fit for purpose.  The review also considers whether this regulatory framework is being delivered efficiently and effectively, and options for future cost recovery arrangements.

Feedback from Phase 1 of this review has informed the Independent Review Panels findings and 12 draft recommendations identifying opportunities for reform and alternative approaches presented in the Draft Interim Safety Report - Phase 1 .

The Independent Review Panel are seeking stakeholder feedback on the findings and draft recommendations within this report by 8 October 2022. 

Written submissions can be submitted at www.infrastructure.gov.au.

Kia ora koutou katoa

It is fair to say that the past few months have been pretty hectic in the life of a Marine Surveyor. Of course, it had a fantastic start with our first Board meeting in Sydney which was a great success largely due to the energy and drive, Stacey brought to the Boardroom!

A very settled Autumn in Wellington included our routine commercial and recreational activity such as supporting fishing vessels from the Chatham Islands undertaking their MNZ periodic surveys and annual servicing, as well as working through vessel change of use for one of our local Diving and Salvage companies.  On the pleasure craft side, we have done a number of Pre-Purchase Inspections on various launches and yachts, including one Ferro vessel that was immediately condemned and didn’t actually make it to the travel lift.  Anecdotally we are seeing more of this type of vessel appear either abandoned and left to Harbour Masters and marinas to deal with or alternatively popping up on online auction sites.   I suspect these types of vessel will become an increasing problem as cost of ownership and insurance requirements increase. 

Rotten Beam In Ferro Boat

What May has really exemplified though is the diverse range of activities a Marine Surveyor can undertake. May has thrown up some other interesting engagements, such as an audit of recent work undertaken on a vessel that had been previously surveyed for sale and purchase (I’ll expand on this in a future piece), the project management of a 90’s Maxi 88 charter yacht which having been abandoned in NZ and was purchased from the Crown, with the new  owner working towards putting it into MNZ Survey. As a legacy vessel issues include, (but not limited to) getting Design Approval for the construction and electrical installation, especially when there is limited history, plans and the company no longer exists!

This month has also provided the opportunity to undertake some training and professional development. Able Ships Ltd in Nelson are a recognised MNZ Inspectorate for the Test, Examination and Inspection and marine lifting devices (the rules for these being under Maritime Rule Part 49).   Robert Browne, a Part 49 expert recently ran an excellent two-day course which included visiting Havelock Marina AKA ‘Crane Land’ for the practical elements of the training. There we three key take aways for me from the course, firstly a better understanding of the effects that cranes and lifting devices can have on the stability of vessels, secondly the significant health and safety considerations required when using marine lifting devices, and thirdly the importance of preventative and routine maintenance to keep the devices operational. A well worth course and thanks to Able Ships Ltd and the Principal Andrew Chandler for facilitating.

In terms of Governance activity, Stacey has kindly given me some homework, and I am currently working on drafting an Engagement Strategy paper for consideration by the Board. Here we are looking at how we can logistically, and cost effectively maintain engagement with our current members as well as generating new members and networks in our emerging regional markets. One such early opportunity will be at the end of June when Stacey will hopefully be visiting Wellington to present AIMS at the two-day MNZ Surveyors Symposium. We plan to cover a number of themes such as the Institutes new structure, our current and future training course portfolio, and strategic intent of the organisation with regard to regional growth and enhanced engagement with the statutory bodies. Undoubtedly there will be time for a beverage and a natter which will be a prime opportunity to attract some new members.

Finally, I’m sure that many of the members come across many interesting issues on a daily basis. Please do share these experiences via the newsletter

Ngā mihi nui

Greg Marsden

by Greg Hansen
Director Professional Risks, Austbrokers Countrywide

Ensuring you are covered by appropriate insurance as a consultant is a key aspect to best professional practice. This article explores why professional indemnity insurance is so important and how to ensure you are getting the best cover possible.

What is professional indemnity insurance and why is it important?

It is important for professionals to have the correct insurance and to engage in good risk-management strategies, especially when involved in marine surveying work.

Professional indemnity (PI) insurance is a vital risk transfer mechanism for marine surveyors who can be exposed to a high degree of risk due to the services provided and nature and size of projects that can be undertaken. In today’s highly litigious society, claims can be relatively common. Without a PI policy in place, surveyors risk their business assets – and possibly their personal assets – in the event of a claim. Even if it is ultimately determined that the surveyor was not responsible, payment of the legal costs associated with defending an allegation of negligence or similar is often the part of the insurance cover most appreciated by an insured business.

Why is PI insurance hard to buy and premiums have often been rising?

The insurance market is cyclical and in the last few years has been very difficult. In particular, for PI insurance with Insurers generally making losses. The marine surveying industry has an additional issue which can make the insurance purchase more of a challenge and that is due to the relatively small number of professional operating in this field. Insurance operates best when Insurers can leverage off a large number of risks and hence a large premium pool to cover claims. For example, there are thousands of architects and engineers which generate very large pools of premium for Insurers writing these professions as opposed to a relatively small pool of risk and premium in the marine surveying profession. Both issues (the poor profitability of PI insurance across the board) and the small numbers in the profession has made it difficult to attract Insurer offering reasonably priced insurance.

How to get the best results from your PI renewal

The first point of call for Austbrokers Countrywide is to tackle one of the issues raised above of an occupation with low numbers by using AIMS as a body to encourage members to combine together and bulk buy. Insurance works well with a large premiums pool to attract Insurers. By encouraging more Insurers interested in a larger premium pool we create the best ability to reduce insurance premiums. The second point is to use AIMS to promote risk management and improvement in standards across the profession.

The harder insurance market does look to be here for at least another 12 months so in addition to above it is important for surveyors to ensure they are preparing properly for their renewal and adhering to industry best practice. Practical suggestions that can help include:

• ·       Give the renewal process the attention it deserves.
• ·       Engage a broker with expertise and resources in your field to provide you with the best advice.
• ·       Complete the proposal form early and diligently. If the questions do not adequately portray your business activities, provide an explanatory addendum. A sub-standard submission may prejudice your practice, resulting in premium loadings, restrictive terms or even a declinature.
• ·       Pay particular attention to the risk management questions. If you are able to differentiate your practice from your peers and provide comfort to underwriters regarding your processes and procedures, you are more likely to achieve a favourable result. Include accreditations, CVs and procedure manuals if appropriate.
• ·       If any PI claims have been made against your practice, provide details regarding the steps taken to ensure there will not be a repetition of the circumstances which led to the claims.
• ·       In the hard market, underwriters are more particular about the risks they are prepared to write and negotiations are often lengthy and time consuming. Ensure you provide your broker with renewal documents well before your renewal date, as they may need to approach a number of insurers to achieve the required coverage and premium.

Case studies

Austbrokers Countrywide asked its panel of Insurers to provide some claims examples where professional negligence was alleged against the marine surveyor and a Professional Indemnity insurance policy responded to cover the claim:

I.            A vessel valuation by a marine surveyor of $900,000 was used by the owner to secure a loan. When the owner defaulted on the loan the bank seized the vessel and was only able to sell it for $290,000 so the bank sued the marine surveyor for performing a negligent valuation which they relied upon to secure the loan.

II.            The marine surveyor was appointed by a bank. The instructions provided to the surveyor were clear. They were to confirm the value of the vessel being built at a local yard and to certify to the bank when additional funds could be drawn down during the construction period. The bank confirmed that the surveyor was not required to monitor the standard or quality control of the ship’s construction nor its conformity with design. Defects were found in the ship after construction and the owners sued the ship builder, the surveyor attending to the quality control of the build and also the surveyor acting for the bank. Legal proceedings against all parties took two and a half years to conclude. A settlement of US$235,000 was reached at mediation with all parties contributing. Its important marine surveyors obtain clear instructions and/or to confirm in writing the exact services they are to provide. Unfortunately this does not always protect surveyors from legal action. This is an unfortunate example of where the cheapest option is for a surveyor to contribute to a settlement even though his instructions and responsibilities were clear from the very beginning.

III.            A surveyor in Canada was contracted to provide a load and stow survey for a barge of steel.

A week after the survey had been undertaken the barge sank and the cargo was lost. The surveyor was one of eight parties sued for CA$2.5 million. In the lawsuit it was alleged that the surveyor knew, or should have known, that the barge loading capacity was 6.8 metric tons but allowed 7 metric tons to be loaded. This was alleged to have caused or contributed to the sinking.

Although it was not clear that the surveyor had been negligent there was some risk that they could be found liable. The owner’s insurers agreed to settle the majority of the claim and the surveyor was asked to contribute CA$75,000 to the settlement pot.

IV.            An insured acted as a marine consultant, stowage and lashing planning advisor for the stowage of steel coils.

The marine consultant was appointed by a principal for whom they had worked with for many years and enjoyed a very good working relationship.

Due to their good relationship, upon only the verbal instruction of the principal, the marine consultant arranged and signed off on the stowage of the coils on an “athwartship” basis (at right angles to the centre line of the ship) as this form of stowage increased the cargo intake. It could be justified with additional lashing due to the way the hold was constructed.

The ship encountered very heavy seas and ultimately the stow collapsed resulting in a claim in excess of US$1.5m. The consultant was subsequently held responsible by the insurer of their principal, as part of a recovery action.

Unfortunately, there was no written confirmation of the instructions from the principal indicating they had agreed to an athwartship stow. There were however various other facts which were in the marine consultant’s favour to defend the case, including a limitation of liability clause in their terms and conditions.

The Insurer obtained independent third party advice to support the position for stowing the cargo athwartship. After five years of investigations and claims negotiations the Insurer managed to successfully defend the marine consultant, making a modest claim contribution of EUR 50,000 with legal fees well in excess of this amount.

This is a good example that shows even if your most trusted clients do not intend to make a claim against you, their insurers or another third party may do so. You should always get instructions in writing. If you do not, your “favour” can become very costly.

Get in touch with Austbrokers Countrywide

If you would like further information or have any queries, please contact Austbrokers Countrywide on 1800 245 123 or email us at info@abcountrywide.com.au

Disclaimer:

This article provides general information, does not constitute advice and should not be relied on as such. Users should carefully evaluate accuracy, currency, completeness and relevance of information and seek professional advice relevant to their particular circumstances.

The Export Control Act 2020 and the Export Control (Plants and Plant Products) Rules 2021 (Plant Rules) set the requirements for the export of plants and plant products. On 1 January 2022, amendments were made to the Plant Rules to clarify the requirements for marine surveyors to be accredited under the AGSA scheme, to perform bulk vessel surveys. On 1 July 2022, these amendments were scheduled to take effect.

The AGSA scheme has been delayed and will now commence on 1 July 2023 and the legislation will be updated shortly with the new date.

The scheme will be administered by AIMS with applications for marine surveyor accreditation expected to open in early 2023.

The experience and qualification requirements for marine surveyors under the scheme can be reviewed on the Factsheet_changes_affecting_export_bulk_vessels

Until the new commencement date, marine surveyors must continue to issue Fitness to Load Certificates in line with the current requirements.

More information on the scheme can be found on the Fact sheet - AGSA key information.

If you would like to know more please contact AIMS at grain@aimsurveyors.com.au.

Written By
Captain Glenn Mathias,
Australian Maritime Consultancy

Initially published by Ian Ackerman on Daily Cargo News

THE WORLD Shipping Council (WSC) claim that its member companies operate about three quarters of the world’s global containership capacity. In their Containers Lost at Sea 2020 – Update, they reported that the 3-year, 2017-2019, average annual loss of containers overboard was 779 units – a number adjusted upwards to include non-member companies. (The WSC have maintained such statistics since 2011). However, while the statistics end in 2019, the container vessel One Apus lost 1816 containers overboard in November 2020 and the Maersk Essen lost about 750 containers in January 2021.

When containers fall off a vessel, those that do not sink immediately, pose a risk to small craft such as fishing vessels, whose hulls would not withstand the force of contact with a container’s side rails or worse, its corner castings. And of course, contact with a recreational or charter boat could be tragic. The risks associated with containers washing ashore and damaging coastal works including jetties; their contents, including dangerous goods, strewn along coastlines and tourist beaches; their effects on the food chain, marine fauna and flora – are a discussion for another day. Comfort can be drawn from the fact that no crew injuries from flying projectiles and dangerous liquids ejected from collapsed and/or damaged containers, have been reported – yet.

The principal factors contributing to container stack collapses are two known defects: first, containers loaded contrary to the Container Securing Manual (CSM), such as heavy containers over lighter ones; and container stacks exceeding permissible weight limits; secondly, container stacks not secured as block units. While investigative reports include the defect associated with the CSM, the writer has not seen, (but acknowledges there could be), reports that refer to container stacks not being secured as block units. (Other contributory factors such as loose and/or degraded container securings and the commercial pressures on masters to navigate through the storm rather than around it to maintain schedules, could be overcome by shipowners exercising due diligence). But, while ever the two known defects exist, the risk of container stack collapses remain.

This article proposes solutions to eliminate the risk of container stack collapses first, by ensuring that container loading plans comply with the CSM, through computerised loading programs with fail-safe mechanisms; secondly, by making the Designated Person Ashore (DPA) responsible for oversighting container loading plans; and thirdly, by ensuring that container stacks are secured as block units. The article also proposes research for a safer container securing system; considers the seaworthiness of vessels at the commencement of their voyages with the two known defects; and the issue of cost to rectify the defects.

Continuing reading the full article here

The latest edition for of our Shipshape Newsletter is out now. Find out all the latest news from our Executive team, a wrap on the Sanctuary Cove International Boat Show, info about the much anticipated return of our Conference, as well as some highly informative articles.

Marine surveyors are professional service providers who have several attributes to offer their clients. One is their technical skills, gathered over many years of hands-on experience in the marine industry, the other and probably the most important is their professional integrity. A client relies implicitly on the surveyor’s integrity when they read a report stating the findings of the surveyor following an inspection. Integrity gives the client confidence that the contents of any report are the independent findings of the surveyor and these findings are free from any outside influence. Such outside influence may be pecuniary, promissory or political in nature. A conflict of interest is the term most would associate with any form of outside influence.

What is a conflict of interest? All professional service providers; lawyers, accountants, medical specialists and marine surveyors all owe a duty of loyalty to their clients. Who is the client? In exploring the duty of loyalty of marine surveyors, the client is the person or body who has a contract with the surveyor to provide independent services for a monetary consideration. What does the surveyor owe the client? The surveyor owes their client, for the duration of the contract and in most cases beyond, a duty to serve the interests of their client to the exclusion of all others including themselves. How does a conflict of interest manifest itself? Any form of pecuniary, promissory or political reward that may be used to induce the surveyor to retain or change information which their client has contracted them to seek out and such retention or change would cause a detriment to the client and an advantage, no matter what the form, to the surveyor.

When identifying what is a conflict of interest, in the case of a marine surveyor, these questions need to be asked:

1) Would a reasonable and fair-minded person perceive that the surveyor’s interests might be favoured in the exercise of their duties and responsibilities to the client?

2) Do I have a contractual or familial relationship with a party other than the contracted client who may benefit from the findings or observations identified in the survey report given to that contracted client? 

3) Would your insurance cover you in the event of a claim against you that involves negligence arsing from a conflict of interest?

If the answer to any of these questions is yes, then a conflict of interest exists. A conflict of interest does not necessarily need to be direct. A perception of a personal benefit can be enough for a conflict of interest to be deemed to be present. If the trust placed in the integrity of a marine surveyor is placed into question, either from a direct or indirect perception, then the client can and will form a view that a conflict of interest is present and question the veracity of any reports presented and place the integrity of the surveyor in serious doubt.

The consequences of a finding of a conflict of interest can be severe and far reaching. The reputation of a marine surveyor, which is generally the most important commodity that a surveyor has to sell to a client, can be broken and lost in one simple action. Rarely are we remembered for our successes, but no-one forgets our failures. Even a perception of conflict of interest is a difficult stain to wash away. The stain will always be there no matter how hard we scrub. A loss of professional accreditation with either AMSA or a professional industry body such as AIMS can result in a severe loss of trade and business. Industries and regulatory bodies also have their integrity at stake if any of their members are found to have committed acts involving conflicts of interest and that body allows them to remain a member or to maintain their accreditation and not address the issue involving a conflict of interest.

Marine surveyors, like all professionals, require the maintenance of their professional integrity to continue in business. The relationship that marine surveyors have with their clients in more than a mere transactional one. The relationship is one of trust. Our clients trust us to deliver to them an independent opinion, free of outside influence, which enables them to make large financial decisions. If that trust is eroded or broken by the actions of the surveyor where those actions have been influenced by a conflict of interest, either direct or indirect, then both parties will be exposed to severe negative consequences, both financial and reputational. Such consequences can have been avoided at the beginning of the relationship by declaring the conflict to the client with an explanation as to why such a conflict exists. Identifying a conflict of interest before engaging with a client means your integrity and reputation remains intact allowing you to continue in a field which we all enjoy working in.

By Eric McIlwain

We are introducing the Accredited Grain Surveyor (AGSA) scheme on the 1 July 2022.  The Department of Agriculture, Water and the Environment are working with the Australasian Institute of Marine Surveyors (AIMS) and representatives of Australia's shipping and grain export industries on implementing the scheme.