Marine underwriters led by IUMI step up the pressure for a Polar Code for shipping

Arctic Shipping, IMO, Marine Insurance, News — By on January 29, 2014 at 11:57 PM
Helle Hammer

Helle Hammer

Marine underwriters led by IUMI step up the pressure for a Polar Code for shipping, By James Brewer

Globally agreed action to increase the safety of shipping on Polar routes must be a priority, the International Union of Marine Insurance has urged.

Helle Hammer, who chairs IUMI’s political forum, said in London that the issue was currently the most important being pursued by her committee.

The International Maritime Organization is developing a mandatory international code, known as the Polar Code, for the safety of ships operating in ice-prone waters. This will cover ship design, construction, equipment, operations, training, search and rescue and the protection of the environment and eco-systems of polar regions.

Ships sailing in the inhospitable waters close to the North and South Poles face an additional hazard in that emergency services with sufficient capability and reach are few and far between.

Ms Hammer said following the winter meeting of IUMI leaders in London that it was hoped the code would be finalised in 2014.  There were no mandatory rules of this type in place at present, she said.

The IMO subcommittee on ship design and construction has just agreed in principle a draft text of a Polar Code, and will draw up amendments to IMO’s safety and pollution prevention treaties to make it compulsory.

Ole Wikborg

Ole Wikborg

The subcommittee has worked on a draft for a new chapter XIV “Safety measures for ships operating in polar waters” of the International Convention for the Safety of Life at Sea (Solas). This will be sent for consideration to the maritime safety committee which meets in May 2014.

IMO has defined categories of ships to be covered by a Polar Code, and said that that all ships operating in polar waters should have a Polar Ship Certificate and a Polar Water Operation Manual.

Ms Hammer said that IUMI, whose designated representative at IMO is London market expert Nick Gooding, will put all the resources it can into participating in an IMO workshop on the subject in March.  This would be “one of the most focused issues” for IUMI this year, she added. IUMI hopes that member states of the IMO will all incorporate the eventual Polar Code into binding legislation.

Ms Hammer is managing director of Cefor, the Nordic Association of Marine Insurers.

Ice melt attributed to global warming has made Arctic routings, with their perceived economic savings, a tempting option for commercial vessels between Europe and Asia, and the number of cruise ships in polar waters is growing.

The IUMI team did not refer to specific incidents, but there have been several hair-raising casualties lately. In September 2013, the 6,403 dwt tanker Nordvik loaded with diesel fuel hit an ice floe north of the Taimyr Peninsula and started taking in water. The Seafarer’s Union of Russia said that the ship should not have been sailing in ‘medium’ ice conditions.

In December 2013, the research ship Akademik Shokalskiy was trapped in the Antarctic and scientists and tourists had to be rescued in a difficult operation overseen by the Australian Maritime Authority.

IUMI says that underwriters need to assess issues including ice conditions, the role of class, ship design, remoteness, support networks, availability of icebreakers, search and rescue, and experience and training of crew.

IUMI will support in principle the Arctic Best Practice Declaration presented to the Arctic Council comprising Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US.

Following its London executive committee meeting, IUMI announced that the theme for its 2014 conference in Hong Kong from September 21-24 would be Building Expertise for a Changing World.

Ole Wikborg, president of IUMI, said this reflected the fact that exposures in some lines were becoming bigger, particularly in offshore energy, and supply chains were becoming more complex. Customers were operating in completely different environments from the past, and insurers needed to adapt to that.

Mr Wikborg said given that the annual conference was in Asia there would be a focus on the emerging markets.

The gathering would address the question: “How do we ensure that the underwriting community in different parts of the world has the necessary competence?”

Of the sector broadly, the IUMI leader said that the economy was recovering, but the marine insurance market continued to contend with a lack of profitability, which was related to a surplus of underwriting capacity.

He said that underwriting groups were opening regional offices where they saw business growth, but such offices sometimes competed with their own home base.

Mr Wikborg said that in 2013 there was no big single marine loss that could be described as “market changing.” For all lines of business it was a pretty good year in terms of claims, but “there is a difference between profit and profitability.” He explained: “There needs to be a yield on the capital we use.”

The IUMI president added: “We did have marketing changing events in 2012 — but the market did not change!”

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