Sample of Stock Certificates in Th Philippines

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					                                                                                        P&I 2520/2011
                                                                                       28 January 2011




Indonesia and the Philippines – Safe Carriage of Nickel
Ore Cargoes
As members may be aware in October and November 2010 three vessels the ‘Jian Fu Star’, ‘Nasco
Diamond’ and ‘Hong Wei’ sank during the carriage of nickel ore from Indonesia to China with the
loss of forty four seafarers. The cause of the sinkings has not yet been definitively determined but
nickel ore, like iron ore fines and many concentrates, is a cargo which may liquefy, if the moisture
content of the cargo exceeds the Transportable Moisture Limit (TML) when loaded. Liquefaction of
such a cargo can result in loss of stability which in turn can lead to a vessel capsizing. It is there-
fore very possible that all three vessels were lost as a result of cargo liquefaction.
There have been a number of other recent reports       Indian authorities were taking to improve the safe
of cargoes of nickel ore loaded in both Indonesia      carriage of iron ore fines cargoes loaded in India.
and the Philippines liquefying and causing loss
of stability to the carrying vessel but fortunately    Specific Concerns Associated with the
not resulting in the loss of the vessel. In one such   Loading and Carriage of Nickel Ore
case the carrying vessel grounded causing ex-
                                                       The loading and carriage of nickel ore cargoes
tensive hull damage. Currently nickel ore is only
                                                       from both Indonesia and the Philippines has given
loaded in four locations in the Philippines, Santa
                                                       rise to the specific concerns set out below.
Cruz (Luzon), Surigao and Tubay (Mindanao) and
Rio Tuba (Palawan Island).                             (a) Most mines are situated in remote locations
    Liquefaction of some ore cargoes can be            and loading/port facilities are therefore non-
caused by the normal incidents of a sea voyage,        existent or very limited and loading equipment
for example the motion of the ship in the seaway       and methods rudimentary. Cargo is stock-piled,
or vibrations caused by the running of the main        uncovered, on the beach and accordingly totally
engine or other on-board machinery.                    exposed to the prevailing weather conditions
    The International Group informally raised its      (b) The traditional practice has been to ship nickel
concerns about the loading and carriage of nickel      ore cargoes in the dry season, between February —
ore from Indonesia and the Philippines, with the       May/June when rainfall in past years was negligi-
Indonesian and Philippine delegations that at-         ble. However in recent years anecdotal evidence
tended the 88th session of the IMO Maritime Safety     suggests that the distinct demarcation between
Committee (MSC) which was held between 24              the wet and dry seasons has been substantially
November — 3 December 2010. Intercargo made an         eroded and heavy rainfall is now experienced dur-
intervention at that session expressing its concerns   ing the dry season. The stock-piles do not there-
with respect to the hazards and risks associated       fore benefit to the same extent from solar-drying
with the carriage of cargoes that can liquefy such     as in the past
as nickel ore. In addition Intercargo pointed out
that some charterers and masters had been put          (c) The mines are not easily accessible due to their
under extreme pressure to accept shippers’ dec-        remoteness and it is therefore difficult for inde-
larations and testing reports without having been      pendent surveyors/experts acting for the vessel to
permitted the opportunity of independently verify-     attend the mines and take samples of the cargo
ing such declarations and reports. The Marshall        to be loaded
Islands supported Intercargo’s intervention and        (d) There are few if any independent laboratories
the Indian delegation outlined the actions that the    in Indonesia and the Philippines. The mines gen-




                                                                               P&I Circular 2011

                                                                                   www.swedishclub.com
erally have their own laboratories but it is often   (h) There have been a number of reports of survey-
not possible to determine whether the correct        ors appointed on behalf of vessel interests to take
testing equipment is available and in a satisfac-    cargo samples and conduct independent testing,
tory condition or whether they are following the     being subject to extreme pressure by shippers to
procedures laid down under the International         accept the results of the tests carried out by the
Maritime Solid Bulk Cargoes Code (the Code)          mines. In certain instances the ‘pressure’ has been
when testing cargo samples. Such audits as it has    nothing short of physical intimidation.
been possible to carry out of mines equipment
and testing and sampling procedures suggest not.     International Maritime Solid Bulk Car-
Accordingly the reliability of the information and
                                                     goes Code (IMSBC Code)
documentation which the shipper is required to
provide under the Code which became manda-           The Code is issued under SOLAS 1974 and its Pro-
tory internationally on 1/1/11, most notably the     tocols. It sets out the internationally agreed provi-
Transportable Moisture Limit (TML) certificate and   sions for the safe stowage and shipment of solid
the Flow Moisture Point (FMP), is questionable       bulk cargoes, including cargoes that may liquefy,
                                                     such as nickel ore. Cargoes not specifically listed
(e) The composition and physical properties of       are covered by Section 1.3 of the Code. It became
nickel ore vary considerably from location to        mandatory internationally on 1 January 2011.
location. Since the cargo is not homogenous              Regulation VI/2, SOLAS 1974 requires the ship-
it is difficult to accurately determine the TML      per to provide the master or his representative
and moisture content of the cargo as a whole.        with all relevant information relating to the cargo
Frequently shippers will only provide one TML        sufficiently in advance of loading to enable pre-
certificate for a cargo that has been drawn from     cautions which may be necessary for the proper
a number of different sources and is not homog-      stowage and safe carriage of the cargo to be put
enous, which is contrary to the Code                 into effect.
(f) Nickel laterite has a high clay content. Be-         Section 4 of the IMSBC Code sets out the obli-
cause of this, testing the FMP of a sample using     gations and responsibilities imposed on the ship-
the usual flow table method can be subjective        per for providing information about the cargo.
and the results questionable. If the flow table          Most importantly for cargoes that may liquefy
method of testing is not suitable, section 1.1.1     (Group A cargoes), certificates should be provided
of the Code provides that the procedures to be       evidencing the moisture content of the cargo at
adopted should be those approved by the relevant     the time of shipment and the transportable mois-
authority of the Port State.                         ture limit (TML). The TML is defined in the Code as
                                                     90% of the Flow Moisture Point (FMP). The FMP
(g) Vessels are invariably loaded whilst at anchor   can only be determined by laboratory analysis of
from barges or landing craft which have them-        cargo samples. Any cargo with a moisture content
selves been loaded from stockpiles situated on the   in excess of the TML should not be accepted for
beach. The stock-piled cargo may well have been      loading (unless on specially constructed or fitted
subject to rainfall after samples have been taken    ships). Nickel Ore does not have its own schedule
and tested, during transportation from the mine      in the Code but should be regarded as being a
to the beach and while stockpiled on the beach.      Group A cargo.
The Code requires that the interval between
testing for the moisture content and loading         (A) Master’s Obligations
shall never be more than seven days but in many      The master or his representative should monitor
instances this period is not observed                the loading operation from start to finish. Load-




                                                                             P&I Circular 2011

                                                                                 www.swedishclub.com
ing should not be commenced until the master           ment should be checked. Masters should be wary
or the ship’s representative is in possession of all   of moisture content certificates provided by the
requisite cargo information in writing as de-          shipper’s laboratory and moisture content per-
scribed above.                                         centages that are very close to the TML. If there
    The master has an overriding authority under       is significant rain between the time of testing and
SOLAS not to load the cargo or to stop the load-       the time of loading the shipper must conduct test
ing of the cargo if he has any concerns that the       checks (section 4.5.2) to ensure that the moisture
condition of the cargo might affect the safety of      content of the cargo is still less than its TML.
the ship.
                                                       (3) Laboratories
(B) Shipper’s Obligations                              The shipper must identify the laboratory used to
(1) Cargo Information                                  conduct the tests on the cargo samples. However
The shipper must provide the master or his repre-      as stated above little reliance can be placed on the
sentative in writing with all information and docu-    results of testing conducted by mine laboratories
mentation required under the Code in sufficient        and samples should be the subject of independ-
time before loading, to ensure that the cargo can      ent testing by surveyors and experts appointed on
be safely loaded onto, carried and discharged from     behalf of the vessel.
the ship (section 4.2.1).
                                                       (4) Stockpiles
(2) Documentation                                      The shipper must identify the stock piles from
The documentation must include:                        which the cargo is to be loaded and confirm in
(a) a certificate/declaration certifying the mois-     writing that the samples tested and in respect of
ture content of the cargo to be loaded together        which certificates have been issued/declarations
with a statement that to the best of the shipper’s     made originated from those stock piles.
knowledge the moisture content is the average
moisture content of the cargo. Where a cargo           (5) Barges
is to be loaded into more than one cargo space,        Where barges are used to transport cargo to the
the certificate or declaration of moisture content     ship they must be capable of being individually
shall certify each type of material loaded into        identified by the master/ship/appointed surveyor.
each space, unless, following proper sampling and
testing it is apparent that the different types are    Recommended precautions
uniform throughout the whole consignment.              1. Loading should not be commenced until the
                                                       master is in possession of all requisite cargo
(b) a certificate certifying the TML of the cargo      information and documentation/certificates that
together with the FMP test result prepared by a        a shipper is obliged to provide under the Code or
competent laboratory.                                  local regulations (where not in conflict with the
    The Code requires that the interval between        Code) and is satisfied that the cargo is safe to
testing for the Flow Moisture Point (FMP) and          load and carry
loading be no more than 6 months for regu-
lar materials unless the production process is         2. Considering the recent casualties mentioned
changed in any way and the interval between            above, members are encouraged to consider
testing for the moisture content and loading           reviewing with the Managers steps that might
shall never be more than 7 days. However with          be considered to reduce the risk presented by
irregular materials such as nickel ore every ship-     this cargo before loading and in any case, if the




                                                                               P&I Circular 2011

                                                                                   www.swedishclub.com
master is in any doubt as regards the suitability of   (g) To stop loading if further moisture and/or can
the cargo for loading, very serious consideration      tests are conducted, as necessary, on any parts of
should be given to the appointment of a surveyor       the cargo presented for shipment (sections 4.5.2
on behalf of the ship in advance of loading to         and 8.4 of the Code)
assist the master. However, it should be made
                                                       (h) To monitor the stockpiles and/or barges to
clear to the competent authority (which, in the
                                                       ensure that the cargo presented for shipment is
Philippines, is likely to be the Bureau of Mines),
                                                       from the designated and tested stockpiles and/
shippers and charterers that the appointment
                                                       or barges. This will involve keeping a careful tally
of a surveyor by the ship is not intended to and
                                                       and identification of barges/landing craft offered
does not relieve the shipper of his obligations
                                                       for loading
under the Code or local regulations (when not in
conflict with the Code).                               (i) To ensure loading is suspended during periods
                                                       of rain
The terms of the surveyor’s appointment should
                                                       (j) To carefully examine cargo offered for loading
include the following:
                                                       from barges/landing craft and if in any doubt of
(a) To assist the master with compliance with his      the moisture content, conduct ‘can’ tests particu-
obligations under the Code and local regulations       larly when rain has been experienced. The ‘can’
(when not in conflict with the Code)                   test is described in section 8 of the IMSBC Code
(b) To contact and liaise with shippers to identify    as a spot check a Master can conduct if he is sus-
the stockpiles from which the cargoes are to be        picious of the condition of the cargo, and is not
shipped on the subject vessel and to ensure that       meant to replace or supersede laboratory testing
representative samples are correctly taken in ac-      which is the responsibility of the Shippers.
cordance with sections 4.4 and 4.6 of the Code             Section 8 states that if the sample shows signs
                                                       of liquefaction — i.e. flat surface with evidence
(c) To take owners’ own representative samples
                                                       of free moisture, arrangements should be made
for testing in an independent competent labo-
                                                       to have additional laboratory tests conducted
ratory which is likely to be located outside the
                                                       on the material before it is accepted for loading.
country
                                                       Nevertheless cargo should never be accepted on
(d) To liaise with an independent expert to ensure     the basis of the ‘can’ test alone as it is difficult to
that the laboratory conducts its tests in accord-      accurately interpret the behaviour of the sample
ance with Appendix 2 of the Code.                      in the can and accordingly its moisture content.
                                                       The test may indicate if cargo is unfit for ship-
(e) To compare the shipper's certificates with
                                                       ment but cannot determine if a cargo is fit to be
owners’ own test results for TML and moisture
                                                       loaded– this can only be determined by labora-
content. Masters should be wary of moisture
                                                       tory testing.
content certificates provided by the mines labora-
tories and moisture content percentages that are
                                                       3. If the master or his appointed surveyor is
very close to the TML. If there is significant rain
                                                       presented with any document seeking their
between the time of testing and the time of load-
                                                       confirmation that the cargo is safe to carry they
ing the shipper must conduct test checks
                                                       should refuse to sign it. The obligation under the
(f) To monitor the loading operation from start to     Code is on the shipper to declare that the cargo is
finish, paying particular attention to the weather     safe to carry and signing such a document could
conditions and the presence of any moist cargo in      prejudice a Member’s rights of recourse against a
the barges/landing craft                               shipper in the event of a subsequent casualty.




                                                                                P&I Circular 2011

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4. Report any instance of commercial pressure        relating to nickel ore cargoes loaded in Indonesia
exerted on or intimidation of the master, surveyor   or the Philippines.
or experts to the Association so that this may
be taken up by the Group with the Indonesian /       Consequences of a Member’s failure
Philippine authorities.
                                                     to comply with the Code
5. Members should consider how they might            The risks of loss of life, damage to the environ-
protect themselves contractually before agree-       ment and loss of property are only too apparent,
ing to carry nickel ore cargoes e.g. including an    but if a Member fails to comply with the Code or
appropriate clause in any charterparty Equally       local regulations when not in conflict with the
Members should not be pressurised into enter-        Code, they should also be aware that they might
ing into charterparties which restrict their right   be prejudicing Club cover. All of the Group Clubs
to fully apply the provisions of the Code, appoint   have similar Rules which in essence exclude cover
independent surveyors of their choice or take and    for liabilities, costs and expenses arising from
test cargo samples.                                  unsafe or unduly hazardous trades or voyages.

6. Members should refer to the Club any contrac-     All clubs in the International Group have issued a
tual and/or safe carriage concerns it may have       similar circular



                                            Yours sincerely,
                                           The Swedish Club




                                              Lars Rhodin




                                                                            P&I Circular 2011

                                                                                www.swedishclub.com

				
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