SCL O4 - The Swedish Club

The Swedish Club Letter 


No. 3 – 2002 

December – March 

Collisions 

Cause 

Costly 

Claims pages 4-11 

Underwriting – The Swedish Club concept page 18

2 

Cover photo: Björn Edlund, Pix Gallery 


No. 3 – 2002 December – March 

LEADING ARTICLE 

Now, if ever, is the time to practise what one preaches 3 

COLLISION 

Collisions cause costly claims 4-5 

Star Cruises puts Resource Management into practice 6-7 

Human error – a common cause in collisions 8-9 

Andrea Doria – the files highlight human error as 

a major contributing factor 10-11 

THE SWEDISH CLUB ACADEMY 

BRM 

New BRM licences to Australia and China 6-7 

ARCHIVE 

Our archive – provider of lessons from the past 10-11 

PERSONAL INJURY 

Asbestos update – Mesothelioma 12 

LAW 

Forum Selection Clause 13 

ISM 

Reducing insurance claims through effective 

implementation of the ISM code 14-15 

MARKET 

The state of the market 16-17 

UNDERWRITING 

Underwriting – The Swedish Club concept 18 

The first – but definitely not the last Brokers’ Day 24 

FREIGHT DEMURRAGE & DEFENCE 

U.S. security regulations – freedom has its costs 19 

CREW 

Work-related death, injury and illness under the 

amended POEA contract 20-21 

CARGO 

Delivery orders in Chile 22 

THE SCANDINAVIAN SHIPPING GAZETTE 

Review 23 

CLUB INFORMATION 

News from Piraeus 7 

News from Tokyo 13 

News from London 16 

News from Hong Kong 17 

The Swedish Club Gold Medal 25 

Club Diary / Public Holidays / Staff News 26 

The Swedish Club Letter Index 2002 27 

The Swedish Club offices 28 

The Swedish Club Letter 3–2002 

The Swedish Club is a mutual marine insurance company, owned 

and controlled by its members. The Club writes Hull & Machinery, 

War risks, Protection & Indemnity, Loss of Hire, Freight Demurrage 

& Defence insurance and any additional insurance required by 

shipowners. 

The Swedish Club Letter is published three times a year and distributed 

free of charge to vessels insured with us and to our members. 

The Swedish Club Letter is an editorially independent newsletter 

and opinions expressed by external contributors are not necessarily 

those of The Swedish Club. Articles herein are not intended to 

provide legal advice and the Club does not accept responsibility for 

errors or omissions or their consequences. For further information 

regarding any issues raised herein, please contact 

The Swedish Club 

P.O. Box 171 

SE-401 22 Göteborg, Sweden 

Tel +46 31 638 400 

Fax +46 31 156 711 

E-mail swedish.club@swedishclub.com 

www.swedishclub.com 

Editorial 

Advisory 

Board 

Managing editor 

& responsible publisher 

Frans Malmros 

Editors 

Underwriting & Marketing 

Claes Lindh 

Claims & Legal Support 

Lars Rhodin 

Helena Wallerius Dahlsten 

Loss Prevention & Technical 

Peter Stålberg 

Finance & Administration 

Jan Rydenfelt 

Production 

Co-ordinators 

Annelie Fellbom 

Susanne Blomstrand 

Frans Malmros, Helena Wallerius Dahlsten, 

Martin Hernqvist, Susanne Blomstrand, 

Annelie Fellbom, Petra Setterberg, Claes Lindh, 

Daniel Eriksson, Tony Schröder 

PR-consultant TRS Public Relations Ltd. 

Layout 

Printed by 

Eliasson Information, Göteborg 

PR Offset, Mölndal 

© The Swedish Club. Articles or extracts may be quoted 

provided that The Swedish Club is credited as the source. 

14-0211PR4800B


Leading Article 

Now, if ever, is the time 

to practise what one preaches 

Dear Members, 

You have to be cruel to be kind…. 

Sweden has enjoyed the warmest summer since records 

began in 1860 and for a few sunny weeks we tried to forget 

the gloom and despondency dominating the insurance 

industry. 

Now that autumn has arrived, it is back to harsh reality. 

We can conclude that the world’s financial markets have 

gone from bad to worse and we are frequently reminded 

that losses accumulated by clubs in the International Group 

have increased substantially. The reinsurance companies are 

facing enormous claims emanating from last year’s terrorist 

attacks in the United States and the floods in central Europe 

this summer. The months of September and October 

have also seen an unusual spate of serious marine accidents, 

which undoubtedly will add insult to injury. The accumulated 

claims will affect all sectors of the industry and costs 

will be passed on. 

For the last ten years or so, we have relied on the return 

on investments to subsidise our overheads and technical 

results. However, it looks as if those times are over and, 

should the results from our investments be more positive 

than expected, we shall in the future consider it a bonus and 

apply it where most needed. In the process we have learnt a 

lesson; if you are not prepared to lose on your investments 

you shouldn’t count on any profits either. 

Since last year’s renewals, the Club has been busy reviewing 

its cost base as well as its premium models. There 

are some who are of the opinion that our organisation is 

expensive to run and excessively so. We are, however, of 

the strong conviction that members benefit to a very high 

degree from the strong service element in our set-up and we 

would, as a whole, suffer from its dismemberment. It has 

taken 130 years to build up and we cannot afford to throw 

it aside, just to commence rebuilding it in a couple of years. 

Other cost-cutting measures are, however, well under way 

and a less spendthrift attitude is the order of the day. 

Our battle-cry has always been ‘premiums must cover 

claims’ and now, if ever, is the time to practise what one 

preaches. Our model for setting premiums is changing 

radically. Considering our mutual approach to our H&M 

members as well, it should come as no surprise that premiums 

must increase. Those members drawing on our reserves 

must be aware that they can no longer expect a free ride. 

Members contributing in a positive manner will not accept 

such a lack of balance any longer; mutuality is, as the word 

indicates, a two-way street. 

Each and every one of our staff is braced for a tough and 

gruelling renewals season. 

Our H&M book has grown substantially over the last 

few years but unfortunately not contributed to the Club’s 

fortunes in the way anticipated. 

P&I members have enjoyed a good run for a fairly long 

period. Official figures confirm that the average P&I premium 

charged by The Swedish Club belongs to the lowest 

and sometimes the very lowest among the International 

Group clubs. Our members have consequently been able to 

benefit from our high reserves as a result of positive return 

on our investments. 

We must balance our books by next year. If, in the process, 

we lose some support, so be it. We are convinced that 

the core of our membership will support our actions and 

endorse our measures wholeheartedly. 

Frans Malmros 

MANAGING DIRECTOR 

PS. 

As from this issue The Swedish Club Letter will contain 

one page with selected short articles from The Scandinavian 

Shipping Gazette which we trust you will enjoy. 

3

Collision 


Collisions cause 

Martin Hernqvist 

LOSS PREVENTION MANAGER 

Loss Prevention & Information Services 

The Swedish Club, Göteborg 

Studying the hull and machinery claims, 

2001 was an expensive year for The Swedish 

Club and its members. Compared with previous 

years, we have to go back to 1996 to find a 

similar result. The average claims cost per vessel 

insured exceeded USD 80,000, and this was after 

deductibles had been withdrawn. The figure 

is based on the results of all of the Club’s vessels, 

including the smaller vessels where few costly 

claims were experienced. Consequently, the figure 

would have been even higher if we had only 

studied the Club’s blue water tonnage. 

Escalating costs require intensified efforts 

for finding the underlying causes. What we 

found when we studied the hull and machinery 

claims was that the frequency of claims 

was quite stable compared to previous years. 

This was the case for all claims types, but not 

machinery claims, where we experienced a 

slight increase during 2001. In parallel to the 

increased frequency of machinery claims, we 

also experienced an increased cost. This is one 

explanation for the increased claims cost for 

last year, but not the most important one. The 

major cause was attributable to collision claims. 

We did not experience more collision claims 

than before, but they were more expensive. We 

do not know if this is a trend that, for some 

reason, collision cases are becoming more expensive 

or if last year we were simply ‘unlucky’. 

One thing we do know, however, is that the best 

thing to do for improving the results is to try to 

avoid them in the first place. 

Causes 

To find some ideas on how that could be 

achieved, it is interesting to study the major 

collision cases in more detail. One might believe 

that the chain of events leading up to the 

final impact between the vessels is filled with 

dramatic and difficult circumstances, perhaps 

poor visibility or navigating equipment that, 

without the bridge team’s knowledge, was out 

of order or provided incorrect data. This seems 

rarely to be the case, on the contrary, one is eas- 

ily surprised to find how small and insignificant 

the initial mistakes often are that ultimately 

lead to these severe accidents and heavy claims. 

The people involved are often experienced and 

have gone through extensive skills training so 

that is not the problem. Instead, very often the 

primary causes of accidents are related to the attitudes 

of the individuals on board. They make 

their own judgements concerning what is or 

is not important and fail to follow company 

procedures or ask or listen to others who may 

possess better information about the specific 

situation. Junior officers seem in many cases 

to lack assertiveness when notifying the master, 

even when they realise that a situation is getting 

out of hand. 

The causes behind these accidents could be 

summarised as follows: 

• Preoccupation with minor 

administrative or technical tasks. 

• Lack of situational awareness. 

• Failure to communicate intent 

and plans. 

• Failure to challenge incorrect 

decisions. 

• Failure to set priorities. 

• Failure to use or detect deviations 

from standard operating procedures. 

• Failure to utilise available data. 

We have done it before, and we will continue 

in the future, to promote Bridge Resource 

Management training. BRM deals with the 

above mentioned causes and recognises that 

a large number of accidents are attributable to 

attitudes and behaviour of individuals rather 

than a lack of navigating skills. In an accompanying 

article in this newsletter you may read 

how one of the Club’s members, Star Cruises, 

tackles these problems through the extensive 

use of resource management practices. 

 

From January 2001 to Se 

exceeding USD 2 million 

corresponding to an aver 

Extracts from investi 

4


Collision 

co$tly claims 

The graph shows that 25 % of the total 

cost of all hull and machinery claims 1995 

- September 2002 is related to collisions. 

The graph shows the large increase in the 

cost of collisions from 1995-2000 to 2001- 

September 2002. 

ptember 2002, the Club experienced as much as nine collision claims 

each. The total cost of these nine claims was USD 37 million, thus 

age cost of about USD 4 million per claim. 

gators’ reports during the last five years 

…The attention of the 

bridge team was concentrated 

on the inbound 

vessel. It was only when 

the inbound vessel was 

passing on the port side 

that the individuals on 

the bridge became aware 

of the other vessel they 

collided with nine minutes 

later… 

…He did not call the 

master despite standing 

orders and his 

concern about the 

situation… 

…The position at 10.27 

hours (two minutes before 

the collision) is on the port 

side off the course line on 

the chart. “I did not report 

this to the pilot”… 

…XX had informed YY 

several times about his concerns 

about the other vessel. 

Finally XX said, “call the 

captain, call the captain”. 

There was no reaction from 

YY who remained rooted 

to the spot. The collision 

occured only seconds later… 

5

Collision / BRM 


Star Cruises puts Resource Managemen 

Martin Hernqvist 

LOSS PREVENTION MANAGER 



The author of this article was invited by 

Star Cruises of Malaysia last year to board the 

cruise vessel SuperStar Virgo and experience 

what was rumoured to be ‘the best BRM 

performance in the world’. Star Cruises, a 

member of The Swedish Club, operates seven 

cruise vessels in the busy waters of Southeast 

Asia and have set themselves very high safety 

targets. It is the indirect costs of accidents, such 

as lost time and bad publicity, rather than the 

direct costs of repairs that make Star Cruises 

so actively involved in safety. It has been said 

that the indirect costs of accidents, which are 

normally not covered by insurance, are three 

times greater than the direct costs. For a cruise 

vessel operator the indirect costs may be even 

greater. 

The risk of a collision 

Captain Håkan Svedung, master on board the 

SuperStar Virgo, says the biggest risk in their 

waters is the risk of a collision. “The traffic is 

heavy and we must use all available resources 

– people and navigating equipment – in the 

best possible way to ensure a safe passage. The 

New BRM 

licences 

to Australia 

and China 

bridge team on this ship is really a team and 

everyone feels free to challenge decisions or 

information that may be wrong – no matter 

what their rank and experience.” On board the 

SuperStar Virgo, ‘closed loop communication’ 

is used. This means that all orders are repeated 

and then confirmed. “This type of team work 

and communication are two factors that dramatically 

minimise the risk of failure. Thanks 

to the closed loop communication, the sender 

of the message immediately notices if the message 

was misunderstood and may consequently 

prevent any action from taking place based on 

information that was not properly received, not 

heard or misunderstood.” 

Experts make mistakes too 

Håkan Svedung continues: “It may take time to 

establish this type of working climate on board 

and the master must be very clear and show by 

good examples that this is the way he wants it 

to be. It should include everyone, the whole 

bridge team with look-out and pilot. It does not 

lower the master’s authority, rather the opposite. 

We are all humans and we all know that even 

experts make mistakes. A master who ‘always 

knows best’ will not get the respect he thinks 

he deserves from his colleagues.” 

“There are too many ships at sea that seem 

to be taking part in a competition. It may be 

company pressure to arrive in port on time, but 

it may also be a kind of macho behaviour that 

still exists on some ships. If all followed the 

rules of the road there would be less room for 

that kind of behaviour and more vessels would 

actually reach the port with both ship and 

cargo in an undamaged condition. We follow 

the rules of the road but if, in a crossing situation 

for example, others don’t, we prefer to slow 

down rather than claiming our right. We will 

not take a chance and put the ship and comfort 

of our passengers at risk.” 

AMC's integrated marine simulator – full scale bridge. 

Anna-Karin Lönnstad 

LOSS PREVENTION CO-ORDINATOR 



During late summer the Club issued two 

new licences regarding the authorisation to conduct 

the Club’s Bridge Resource Management 

(BRM) course in Australia and China. 

AMC Search Ltd 

On August 27 th the BRM Licence Agreement 

was signed with AMC Search Ltd., Launceston, 

Australia. AMC Search is a subsidiary of the 

Australian Maritime College, providing mari- 

Safety of highest priority 

Being on board with Captain Svedung and his 

team is a nice experience for an insurer. Safety 

is of highest priority all the way from departure 

to arrival. Before leaving port the bridge team 

goes through the pre-departure procedure to 

make sure that everything has been cleared and 

that everyone is fully aware of the departure 

plan and their individual roles during departure. 

During phases of critical navigation, such 

as departure and arrival, a ‘red zone’ is declared 

which means that no visitors are allowed on the 

bridge and that phone calls are diverted. This is 

to ensure that the bridge team can concentrate 

fully on their important task. After arrival, 

when the ship has been safely moored, Captain 

Svedung gathers his team for a de-briefing. 

The purpose is to discuss any unusual circumstances. 

This could be related to the traffic situtime 

training and research services using the 

internationally renowned resources of the College 

and is ISO 9001:2000 certified by Lloyd’s 

Register Quality Assurance. According to Mr 

John Foster, Chief Executive Officer of AMC 

Search, they intend to expand their already 

extensive range of maritime short courses (all 

STCW’95-compliant where applicable) to the 

Australian maritime and offshore industries. It 

is with that aim in mind that AMC Search has 

acquired the BRM course. Mr Foster points 

out that the BRM course has a high level of 

recognition and support throughout Australia, 

and it will complement the already established 

programmes of AMC Search in areas such as 

human factors, crisis management and skills 

training for marine pilots. 

AMC Search has also recently acquired a 

sophisticated marine simulator, and considers 

the BRM course to be another means of adding 

to the array of specialised and integrated 

training services it can offer on client-preferred 

locations throughout the country. 

Wuhan University of Technology 

– Skaugen Training Centre 

The Club is also pleased to announce that for 

the first time, a licence to conduct the BRM 

course has been issued to a training provider in 

China. The Wuhan University of Technology 

6


t into practice 

Capt Håkan Svedung (left) discussing the departure with his bridge team. 

ation, near-incidents, excessive wind or current 

and how that affected the berthing operation. 

The objective is to share experiences in order to 

improve the bridge team’s competence for the 

future. If someone did something wrong, they 

do not talk about that as a ‘mistake’ but, in the 

typical Star Cruises’ spirit they refer to it as a 

‘learning experience’. 

Star Cruises, as well as the crews, are well 

aware that accidents will happen despite all ef- 

– Skaugen Training Centre (WUT-STC), Wuhan, 

China, signed the agreement on September 

29 th . WUT-STC is a joint venture between 

the Wuhan University of Technology and I.M. 

Skaugen A.S.A. The initiative to acquire the 

BRM training licence came through the I.M. 

Skaugen subsidiary and member of The Swedish 

Club, Norgas Carriers A.S. 

Since March 1998, WUT-STC has been 

engaged in training seafarers, mainly in 

the handling and transportation of liquid 

petroleum gases, chemicals and dangerous 

cargoes. With its advanced training equipment, 

first-class teaching staff, and ISO 9001: 

2000 accreditation, this training centre is fast 

forts to prevent them. They are, however, 

taking extensive measures to keep the 

number of accidents down. 

Since the author of this article has 

not been on board all vessels where BRM 

practices are exercised, it is difficult to 

judge whether this is ‘the best BRM performance 

in the world’ or not. I am sure 

about one thing though: it will be difficult 

to beat. 

 

Newly certified BRM workshop 

leaders for WUT-STC; 

Mr Fu Yaofang and Mr Su 

Weishu, studying the course 

training material presented 

to them in connection with 

their workshop leader training 

in Sweden. 

becoming a premier maritime training 

centre in the People’s Republic of China. 

More than 1,000 Chinese seafarers are 

trained each year at WUT-STC and 

after graduation many proceed to a job at 

international shipping companies such as 

Norgas Carriers. 

The BRM course will be an important 

factor in the continued efforts of WUT- 

STC in producing competent Chinese 

seafarers for domestic and international 

customers and markets. 

 

Collision / BRM / News from Piraeus 

News 

from 

Piraeus 

Save some 

wine 

for the future 

Rain is something 

you hardly hear about 

in Greece in August or 

September, unless we all 

say we need some. Greece 

has experienced a number 

of floods in the area, which 

have caused damage to 

homes and properties and 

also delayed various constructions for the 

Olympic games. Amongst things destroyed 

were some famous vineyards, leaving the 2004 

Olympic games with no new vintage wine. 

Moving on to the Olympics, a never-ending 

topic. As always, wherever you put down 

a spade in Attika, you will find something. 

The Olympic rowing centre construction has 

unearthed 4,000-year old buildings. The three 

buildings found while excavating an artificial 

rowing lake will now be preserved and transported 

to a safe location. Although there is a 

slow progress with regard to the constructions 

on the Olympics, they are getting there. 

The Greek authorities have also made a 

fantastic breakthrough with the terrorist group 

November 17 th . The group was behind the 

murder of the Greek shipowner Constantinos 

Peratikos in Piraeus in 1997 and the British 

military attaché Stephen Saunders in June 

2000. The breakthrough came in June this 

year, when one of the members of the group 

failed to set off a bomb at the Piraeus port 

(close to our office premises!) thus injuring 

himself. November 17 th has been accused of 23 

murders since 1975. This costly mistake by one 

of the members opened the gateway for the police 

to arrest various members. Up to now they 

have had no success, having failed to arrest a 

single suspect. We all hope they will be able to 

close the organisation completely. 

Whether we like it or not, we have suddenly 

moved into a war situation. The Gulf War 

has proven good business for some. During the 

1991 UN campaign against Iraq, the Greeks 

transported half of Saudi Arabia’s oil exports 

and thus maintained the stability of global 

markets. This time it looks different. Nobody 

really knows what will happen if there is to be 

a new war. The shipping industry will most 

probably only benefit if, due to a war, energy 

consumption increases worldwide. 

 

Clas Rydén 

GENERAL MANAGER 

The Swedish Club Greece 

7

Collision 


Human error 

- a common cause in collisions10 6 

Tony Schröder 

CLAIMS EXECUTIVE 

Claims & Legal Support Department 


Over the last years, The Swedish Club 

has been involved in a number of collisions and 

the majority have occurred within port limits 

adjacent to pilot stations. The following article 

describes the circumstances of a collision which 

occurred three years ago in an area where it is 

compulsory to have a pilot and where proper 

shore radar surveillance is maintained (VTS 1 ). 

The intention of the writer is not to point a 

finger at who was to blame for the collision according 

to the rules of the road, but merely to 

illuminate and highlight the human factor by 

describing the events in a case where the prospects 

of avoiding a collision were favourable. 

The vessels were well sighted by each other 

at a sufficient time prior to the collision. They 

had both reported to the VTS Wandelaar traffic 

control, which is compulsory, so the shore 

radar followed their targets. There was also an 

agreement between the vessels that they should 

pass red to red, which is in accordance with the 

collision regulations. 

Both bridges were properly equipped and 

were manned with a master, pilot and a watchkeeping 

officer. Good weather conditions prevailed 

at the time. 

Preface 

On a clear night between November 8 th and 

9 th 1999, at approximately 0105 local time, our 

member’s container vessel, hereinafter referred 

to as the Alfa, collided with a smaller Ro-Ro 

vessel, hereinafter referred to as the Beta. The 

Alfa was built in 1997 with a deadweight of 

49,210 tonnes, a length overall of 259 meters 

and a capacity to load up to almost 4,000 

TEUs 2 . The Beta had a deadweight of 3,548 

tonnes and a length overall of 95 meters. 

The maximum speed of the Alfa was approximately 

23 knots and the top speed of the 

Beta around 12 knots. 

The area where the collision occurred had, 

as mentioned, both radar and radio surveillance. 

Recorded evidence of this can be obtained 

from the authorities if need be. At the 

time of the collision, there were pilots on board 

both vessels. 

The Alfa had been in Zeebrugge discharging 

and loading. At 0030 local time, the cargo 

operation was finished and the pilot came on 

board to take the Alfa out. Six minutes later she 

had cast off with one tug assisting. The night 

was clear, with good visibility and a moderate 

NW wind of 3-4 Beaufort, more or less perfect 

conditions. At 0046 local time the tug was let 

go just inside of the port’s breakwaters. 

After the Alfa had let go of the tug, the 

pilot and the master had to struggle due to 

the circulating tidal current just inside the 

breakwaters in order to keep her aligned with 

the two leading lights out of Zeebrugge. After 

she passed the Zeebrugge breakwaters, at 0050 

local time, she put her engines to full ahead to 

avoid getting caught in the strong easterly set 

current outside the breakwaters. 

First sighting 

At the time the Alfa passed the breakwater, 

she was displaying three all-round red lights 

in a vertical line, showing she was a vessel constrained 

by her draught. Moments later, at 0051 

local time, the master and the pilot observed 

the Beta, and by the configuration of her navigational 

lights, they knew that she was coming 

from the west on an easterly course on the port 

side of the Alfa. The distance between the vessels 

at this point was 3.2 nautical miles. As the 

master of the Alfa immediately considered the 

heading and speed of both vessels as a possible 

close quarter situation, he asked the pilot to 

contact the Beta over the VHF. 

The Beta was proceeding from port Oran 

in Algeria. At 2310 local time she had picked 

up the pilot at Wandelaar pilot station and was 

now sailing in the inland traffic zone bound 

for Antwerp. Just before they passed buoy A2 

(see chart) they saw the Alfa outbound at the 

entrance to Zeebrugge. The oversized vessel 

navigational lights were duly recognised by the 

master, the pilot and the officers on watch on 

board the Beta. The pilot kept the EBL 3 of the 

radar on the target of the Alfa. According to the 

pilot, the bearing increased enough for him to 

feel comfortable that the Beta could pass ahead 

of the Alfa. 

Intentions 

After a couple of minutes, at 0055 local time, 

the Alfa called up the Beta on the VHF, asking 

for her intentions. The pilot on board the Beta 

then said, according to the VHF transcripts, 

that he would alter his course to starboard, in 

order for them to meet red to red, which is the 

proper way to meet according to the rules of 

the road. The pilot then, in his own mind, still 

RW 

A2 

11 4 

G 10 5 

9 2 

11 2 

saw it as possible for the Beta to pass ahead 

of the Alfa. The pilot of the Beta obviously 

waited, and hoped he could pass ahead of the 

Alfa in spite of the agreement over the VHF. 

This intention of the Beta was not advised to 

the Alfa. 

After a short time, while the speed of the 

Alfa was still building up, both the captain 

and the pilot of the Alfa started to get nervous. 

The bearing to the Beta was still unchanged. 

The Alfa interpreted the situation as though 

the two vessels would collide if no action were 

taken. The master of the Alfa told the pilot to 

call the Beta on the VHF yet again and ask for 

her intentions, which he did. 

The master of the Alfa did not understand 

what was said over the VHF because both pilots 

were speaking the local language, which was 

Flemish. The pilot of the Alfa informed the 

master that the Beta would alter her course 

to starboard and that they would meet red 

to red and pass astern of the Alfa. During 

the following relatively short time (about 3-4 

minutes), the master and the pilot of the Alfa 

saw no change in the course of the Beta. As 

nothing happened, the pilot and the master 

8 

1 

Vessel Traffic Service 

2 

Twenty Foot Equivalent Unit – Unit of measurement equivalent to one standard twenty foot container


Collision 

ILLUSTRATION: HANS DAHLBERG 

YBY 

14 2 

9 8 

12 1 

3 Knots current 

Sketch of the course of events 

before the collision showing 

the Ro-Ro vessel Beta to the 

left and our member’s container 

vessel Alfa to the right. 

grew increasingly anxious and the pilot once 

again called up the Beta and demanded that 

she alter her course to starboard. The Beta yet 

again showed little or no change to either her 

course or speed. 

The collision 

The master of the Alfa now felt that some action 

had to be taken to avoid collision, as for each 

passing second a collision was becoming more 

and more imminent. He ordered the engine to 

stop at 0059 local time and the rudder to be put 

hard to starboard. Two minutes later the engine 

on the Alfa was put full astern and three short 

blasts were sounded. Now, at 0102 local time, 

with a mere distance of 5 cables between the 

ships, the master and the pilot of the Alfa observed 

that the Beta started to turn to starboard, 

but that the rate of turn was much too slow to 

avoid a collision. 

Shortly afterwards, at 0105 local time, the 

two vessels collided, both at a speed of around 

four knots. The Beta hit the Alfa on port side 

just aft of the forecastle. Luckily, there were 

no personal injuries on either ship as a consequence 

of the collision. 

Summing-up 

The question is, why does a collision like 

this have to happen Both vessels were well 

equipped. There were no technical failures on 

either ship that caused the collision. Both ships 

were well manned on the bridge. Both had local 

pilots on board familiar with the local prevailing 

navigational conditions. The weather was 

clear. Both vessels were well in sight of one another 

visually as well as observing one another 

on their respective radar screens. The VTS observed 

both vessels on shore radar and listened 

to the VHF communication. Each vessel knew 

the identity of the other. Agreements between 

the ships were made over the VHF at a reasonably 

early stage. 

This collision could, in the opinion of the 

writer, only have been avoided by better training 

of the bridge teams and better awareness 

with regard to safety margins involved in 

confined waters. What might appear as ample 

time for taking decisions can, in a few minutes, 

change to dangerous situations in which split 

second decisions have to be made. Suddenly 

you have reached a point of no return. A welltrained 

bridge team will, by quicker and better 

assessments, have more time and consequently 

more margin for error, so the risk for collisions 

or close quarter situations will be smaller. 

Technical tools have always been an aid 

for humans in improving their way of living 

and working. But it is perhaps not always the 

only solution for improvement. Had additional 

technical tools, such as the AIS 4 for instance, 

aided the bridge teams in avoiding this particular 

collision It is not, in this particular case, 

presumptuous to assume that this collision is 

not the fault or lack of any technical tool or 

device. 

Regretfully this collision was, as are most 

collisions, attributable to human shortcomings 

and fallibility. 

 

Epilogue 

This collision was eventually settled out 

of court on amicable terms. The apportionment 

of blame was agreed to 80/20 

in favour of our member’s vessel the Alfa; 

that is, the bulk of blame was carried by the 

Beta interests. 

3 

Electronic Bearing Line 4 Automatic Identification System is from July 1 st 2002 mandatory on all newbuildings. 

9

Archive / Collision 


Our 

A 

Provider of lessons from the Past 

rchive 

The maritime industry is in a state of perpetual 

evolution, with developments shaped by 

the primary market forces, such as economic 

cycles, shifting trade patterns and changing 

business focus. Consequently, what we recognise 

as the ‘modern’ industry of today may look 

very different in ten year’s time. 

Recognising lessons from the past is an 

essential step in preparing for the future. The 

analysis of historical data provides a sharper 

definition of industry trends today. Wellmaintained 

records amount to intellectual 

wealth and can provide valuable input when 

designing financial strategies and loss prevention 

initiatives. 

1.4 km shelves 

The Swedish Club’s extensive archive begins 

with the Club’s establishment in 1872. The 

records occupy an impressive 1.4 km of shelving 

and offer a rich source of data documenting 

the revolution in the maritime industry and the 

lives of seafarers over the past 130 years. 

When examining the archives, it is clear that 

technology has transformed the way in which 

data is now collated and stored. Eva Persson, 

The Swedish Club’s archivist, says: “In the late 

1800s and early 1900s, the ledgers and registers 

were beautifully scribed, with decorative calligraphy. 

In today’s cost-efficient world, there is 

little room for such aesthetics. With the advent 

of computerisation, all documents have a common 

format and lack the artistic flourishes of 

the past.” 

Beware of the disc 

While computerisation has produced many 

benefits, Eva warns: “Many people make the 

mistake of storing important documents on 

disc or computer hard drives without making 

a printed copy. As hardware and software become 

obsolete, the time and resources invested 

in the upkeep of archives can be compromised 

by an inability to open the files. Long-term 

preservation is vital to safeguard this valuable 

resource.” 

The Club’s early archives primarily 

document Swedish interests, but the data began 

to take on an international character from 1971, 

the year the Club accepted its first non-Swedish 

member – Turnball Scott Management 

of Farnborough, U.K. The minutes of the 

November 19 th 1970, Board meeting reveal that 

it was unanimously agreed to accept Turnball 

Scott’s 106,000 dwt Flowergate, built in 1968, 

for H&M cover. This took effect on 

January 5 th 1971. The archives show 

that the idea of foreign entry was 

first mooted at a Board meeting held 

on July 8 th 1890, but then rejected 

at another Board meeting just two 

months later. The decision on the 

Flowergate was taken 80 years later. 

Eva says: “Archives are extremely 

useful for research, particularly 

when investigating and analysing 

ship casualties. I regularly select 

interesting cases for display at the 

Club’s headquarters.” 

Eva recently researched the 

tragic case of the collision between 

the Stockholm and the Andrea 

Doria in July 1956 (see below) and 

prepared an interesting exhibition. 

The display includes photographs of 

the damage, loss reports, ledgers and 

ship menus giving a vivid impression 

of social norms in the 1950s. Eva’s 

next project will involve the Nippon 

and the Killara, two ships trapped in 

the Great Bitter Lake for eight years 

following the Six Day War. The ships 

were part of a 14-ship convoy. 

Eva says: “The case of the 

Nippon and the Killara is unique. 

The trapped crews developed a close 

community, with regular sports 

championships and, eventually, 

they even issued their own postage 

stamps.” 

ANDREA DORIA – the 

Archives are a valuable educational tool. 

By examining the past, we can enrich our understanding 

of current challenges in areas such 

as safety at sea. The Swedish Club’s archives 

contain a wealth of information which may be 

used in this way. 

Eva Persson, the Club’s archivist, recently 

delved into the archives to research information 

for an exhibition at the Club’s headquarters. 

The display featured a collision between two 

passenger vessels – the Andrea Doria and the 

Stockholm. This accident occurred 46 years 

ago and resulted in the loss of 51 lives. 

The Andrea Doria, built in 1953, was the 

epitome of luxury at that time. The ship was 

known affectionately as ‘the Grand Dame of 

PHOTO: LENA BRYNGELSSON © 

The Swedish Club's archivist, Eva Persson. 

the Sea’. She was en route to New York from 

Genoa – her 51 st voyage to the US – on July 25 th 

1956, when she collided with the Stockholm 

20 miles west of Nantucket, Massachusetts. 

The accident happened during the evening, in 

fog conditions. 

Eva Persson says: “The Andrea Doria was 

struck on the starboard side by the Stockholm’s 

ice-strengthened bow. She sustained a large 

hole in her side. Spaces began to flood and the 

Andrea Doria sank. The two ships were carrying 

2,455 passengers and crew and the collision 

resulted in the sad loss of 51 lives. The accident 

triggered one of the most extensive marine rescue 

operations in the North Atlantic.” 

An inquiry found the cause to be confusion 

10


Archive / Collision 

PHOTOS: UNITED PRESS AND ALFRED H. MILLER CO. INC. 

The Stockholm 

arrived at pier 

97 in New York 

with severe 

damages. 

This caption to the photo above was telexed to newspapers around the world 

on July 27 th 1956 by United Press. 

files highlight human error as a major contributing factor 

over radar readings. Both vessels had observed 

each other on the radar but reached different 

conclusions in anticipating the likely course of 

events. Such confusion will be all too familiar 

to many seafarers today. The Andrea Doria’s 

crew assumed that the two vessels would pass 

each other starboard to starboard, while the 

Stockholm’s crew concluded that they would 

pass port to port. Prior to the collision, the 

Stockholm saw the Andrea Doria approaching 

on the port side and ordered a starboard turn. 

The Stockholm then saw the Andrea Doria 

make a hard port swing that brought the two 

ships head-on. The Stockholm immediately 

made hard starboard and full speed astern, but 

it was too late – contact was inevitable. 

The Andrea Doria suffered severe damage. 

The Stockholm penetrated 30 feet into the upper 

deck and seven feet into the hull below the 

waterline. The Stockholm withdrew and the 

sea poured into the gaping hole in the Andrea 

Doria’s side. Consequently, she took on a list 

that developed to around 18 deg. She sank ten 

hours later. Meanwhile, a fleet of rescue vessels 

had reached the scene and transferred the survivors 

to safety. 

The claims for the two vessels totalled USD 

92 million. The owners’ lawyers decided to 

reach an amicable out-of-court settlement to 

avoid lengthy legal proceedings. Each owner 

absorbed his own vessel’s damage costs and 

worked together to establish a fund for the settlement 

of personal injury, baggage and cargo 

claims. 

When looking back at this tragic accident, 

the archive files highlight human error as a major 

contributing factor. The lessons from the 

Stockholm-Andrea Doria case are as relevant 

today as they were five decades ago. Strict adherence 

to operational procedures plays a vital 

role in safety at sea. The Swedish Club promotes 

Bridge Resource Management (BRM) training 

for members and non-members at dedicated 

training centres. These courses are essential 

in reducing risk and developing effective teamworking 

on the bridge. 

 

11

Personal Injury 


M esothelioma 

compensation will increase by GBP 200 million per year in the United Kingdom 

The House of Lords in Fairchild 

–v- Glenhaven Funeral Services Limited and 

Others held that a claimant, who has developed 

mesothelioma from exposure to asbestos fibres 

by more than one employer, is able to sue and 

recover all of his damages from any one of those 

employers. This is because mesothelioma is an 

‘indivisible’ condition, which means that 

there is no direct relationship between the 

extent of exposure and the severity of the 

cancer. 

The Association of British Insurers 

(ABI) asked the Defendant Solicitors 

Industrial Disease Special Injuries Group to 

consider whether it would be appropriate to 

take any new cases to the Court of Appeal/ 

House of Lords in an attempt to limit some of 

the expense caused by Fairchild. It was decided 

that there were two possible types of cases that 

may be worth taking to Appeal: 

• 

Minimum Level of Exposure – to determine 

what level of exposure to asbestos materially 

increases the risk that a claimant may develop 

mesothelioma. An example would be a 

claimant who was heavily exposed to asbestos 

in a shipyard during a five year apprenticeship 

followed by lighter exposure as a junior engineer 

during a one week voyage for a shipping 

company. Under Fairchild, the claimant’s solicitors 

can argue that he is entitled to recover 

all of his damages against the shipping company. 

However, if the shipyard had gone out of 

business and insurers could not be traced it 

would not appear to be in the interests of justice 

for the shipping company to be ordered to pay 

all of the claimants damages. Therefore a court 

may be prepared to conclude that the exposure 

to asbestos with the shipping company was insignificant 

compared to the claimant’s exposure 

at the shipyard and that it did not materially 

increase the risk that he would develop mesothelioma. 

I believe that this is a strong argument and 

an appropriate case should be taken to court 

because there must be some cut-off point in relation 

to what level of exposure to asbestos can 

be deemed to legally or medically have caused 

mesothelioma. 

• 

Apportionment – to determine whether, 

even though mesothelioma is an indivisible 

condition, the court should apportion liability 

between the various employers who exposed 

the claimant to asbestos. If successful, this will 

mean that a claimant has to sue all employers 

who negligently exposed him to asbestos and 

can only recover a proportion of the total damages 

from each employer in accordance with the 

period of time and extent to which they exposed 

him to asbestos. This would be of major assistance 

to defendants in cases where proceedings 

cannot be brought against an employer who exposed 

the claimant to asbestos for a considerable 

period of time. 

I have always stated that this argument 

should have been raised before the House of 

Lords in Fairchild. However, now that Fairchild 

has been decided in the claimant’s favour, 

it is difficult to see how the House of Lords 

could effectively amend their judgment so that 

a claimant who has been exposed to asbestos by 

two employers, one of whom which is no longer 

in existence, recovers substantially less damages 

than another claimant whose employers are still 

in existence. 

The ABI have not yet responded with their 

views on whether they wish to proceed with 

either or both of these proposed arguments. 

Treatment for Mesothelioma 

Trials on patients treated with a combination of 

the anti-cancer drugs; Pemetrexed and Carboplatin 

have shown that, used together, they can 

double the life expectancy of sufferers of mesothelioma. 

This may be the first step towards a 

cure. However, simply increasing a claimant’s 

life expectancy without a cure, will increase the 

value of the claim for damages as the period of 

pain and suffering will be longer and more nursing 

care will be required. It would be interesting 

to ascertain how widely this new treatment is 

used and the reaction of courts to the longer 

survival period. 

Mr John Caddies 

PARTNER 

Personal Injury Employment and ITF Unit 

Hill Taylor Dickinson, London 

Pleural Plaques 

Update 

The majority of claims now being brought are 

for pleural plaques, which are areas of localised 

scarring/fibrosis on the membrane surrounding 

the lungs, which may calcify with the passage 

of time. They are benign, have no effect on life 

expectancy and merely serve as a marker of 

asbestos exposure. However, they may result 

in a slightly increased risk of developing more 

serious conditions such as pleural thickening, 

asbestosis, mesothelioma and lung cancer. 

These claims are normally settled fairly 

quickly for GBP 10,000 - GBP 12,000 or for 

GBP 4,000 - GBP 6,000 if the claimant insists 

on provisional damages which enables 

the claimant to return to the court if he 

develops a more serious asbestos related 

condition. Claimant’s solicitors normally 

accept that pleural plaques are a ‘divisible’ 

condition i.e. there is a direct relationship 

between the extent of exposure and the extent 

of the plaques – which means that damages can 

be reduced to take into account exposure with 

employers against whom proceedings have not 

been brought. 

However, at present we are having some 

difficulty in settling these claims where our codefendants 

are insured with the Iron Trades 

Insurance Company. Prior to the House of 

Lords decision in Fairchild, they successfully 

defended a claim for pleural plaques on the 

basis that it was an indivisible condition and, 

because the claimant was exposed to asbestos 

by more than one defendant, the claimant 

could not prove which exposure caused his 

pleural plaques to develop. Exactly the same 

situation has subsequently been considered by 

the House of Lords in Fairchild with regards to 

mesothelioma so if Iron Trades were successful 

on appeal, this would mean that claimant’s 

generally would be able to recover all of their 

damages from any one of the defendants who 

exposed them to asbestos. For this reason, Iron 

Trades have now settled the appeal on the basis 

that pleural plaques are a ‘divisible’ condition. 

Therefore, I would hope that their speed of response 

should now gradually improve. 

Insurers lobby for change in the law 

The ABI are currently lobbying the Treasury for 

a change in the current employers liability system. 

Their arguments are that the present regime 

was set up to deal with work place accidents like 

slips, trips and falls and not long tail industrial 

diseases. They want to see future legislation either 

removing the requirement to provide insurance 

cover for industrial diseases or the ability 

to offer separate insurance policies for accidents 

and industrial diseases. These arguments have 

no doubt been put forward because it has been 

estimated that after the Fairchild decision 

mesothelioma compensation will increase by 

GBP 200 million per year in the United Kingdom. 

 

12 

If you need any further information or advice regarding this article, please do not hesitate to 

contact Mr John Caddies. Tel +44 (0)20 7280 9159. E-mail john.caddies@htd-london.com

§ 


An interesting decision was reported to us some 

time ago by Mr Kirk Lyons, a New York lawyer. In 

Hartford Fire Insurance Company et al v. M/V Pacific 

Senator, Judge William H. Pauley of the Southern 

District of New York recently refused to enforce a 

forum selection clause in a carrier’s bill of lading 

Forum 

election 

Clause 

Ken Bright 


The Swedish Club U.K. 

because it did not confer jurisdiction to the exclusion of any other forum. The judge 

held the clause was permissive rather than mandatory and therefore not enforceable. 

The bill of lading clause read ‘Any dispute arising under and in connection with 

this bill of lading shall be governed by German Law and determined by the courts of 

Bremen.’ 

Judge Pauley found the use of the word ‘shall’ did not mandate that jurisdiction 

was conferred in one jurisdiction to the exclusion of jurisdiction elsewhere. The clause 

lacked any further specific language of exclusion and could not, therefore, be construed 

to oust jurisdiction where it otherwise might exist. 

In the same case, Senator Lines sought to dismiss the cross-claim of United Arab 

Shipping based on the London arbitration clause in the United Alliance Agreement, to 

which both Senator and United Arab were parties. The Agreement provided:- 

Article 14.1: ‘In the event of any dispute or difference between the parties arising 

out of or in connection with this Agreement any one of them may give written notice 

to the others …requiring that it be considered a dispute or difference to be dealt with 

according to this clause…’ 

Article 14.2: This set forth the arbitration provision in the event the parties could 

not settle their disputes under Article 14.1 within a specified time frame. 

Once again the judge found the provision was not mandatory and held that arbitration 

under the Agreement can only be said to be mandatory if after the interim procedure 

set forth in Article 14.1 is invoked, the parties fail to settle the dispute within the 

specified time frame (Article 14.2). Nothing precluded United Arab from forgoing the 

interim procedure and litigating the claim in the courts. 

Although this decision is thought to be a ‘rogue’ one that may not be popular with 

other judges of the same district, the lesson to be learned is that a forum selection clause 

must make it absolutely clear that disputes arising under the contract will be decided in 

the chosen forum to the absolute exclusion of any other. 

 

Law / News from Tokyo 

News 

from 

Tokyo 

Shocking 

news 

Japanese people 

cannot forget September 

17 th 2002, when 

Prime Minister Junichiro 

Koizumi first 

visited Pyongyang in 

North Korea. This was 

the first visit by a 

Japanese Prime Minister 

to North Korea 

since the end of World War II. The visit 

brought us the shocking news that eight 

Japanese who had been abducted during 

the 1970’s and 1980’s were already dead. 

Most Japanese people have a political 

interest in knowing about why their 

countrymen were abducted at that time. 

The Japanese economy has been in 

recession for more than ten years and has 

deteriorated year after year. Everybody 

knows the Japanese economy cannot recover 

without the banks first getting rid 

of their bad long-term loans. However, 

as the banks have been pushing the issue 

of the disposal of bad loans aggressively, 

the unemployment rate has doubled. The 

influence this will have on the Japanese 

markets cannot be assessed and the politicians 

have not taken any steps to deal 

with the issue yet. 

The spate of mergers in Japanese 

insurance companies has settled down. 

The underwriting capacity remains 

the same as before the mergers. In the 

last two years, claims records for ships 

related to Japanese owners/managers 

had improved significantly prior to the 

Diamond Princess. (A vessel that caught 

fire in a shipyard in Nagasaki this year. It 

is estimated that the damage to the vessel 

will cost insurers over USD 400 million 

and half of that sum will fall on Japanese 

underwriters.) The present premium 

level for the hull business is very low as a 

result. Some of them are lower than the 

break-even point. Most Japanese underwriters 

recognise that the premium level 

is too low and that it may not improve 

due to heavy competition within Japan. 

There have been some significant losses 

for underwriters in Japan recently and it 

will be interesting to see how they react 

to the losses. 

 

Ryuzou Imai 


The Swedish Club Japan 

13

ISM 


Speech delivered by The Swedish Club's Loss Prevention Manager, Martin 

I recently got asked why we continue to talk about 

ISM. “The deadline has passed”, the man said. I 

do not think that this is a typical comment from 

a person within our industry, but if it was, we 

would have a problem. To me, this process has just begun. We are now in 

the starting blocks of a long race and what has taken place until now is 

more or less just making preparations for the race. Some jumped the gun 

and are already well on their way while others hardly got their overalls 

off before the pistol went off on July 1 st . Our support along the way is 

certainly as important now as it was before the race began. Some do not 

need it, they feel fine and are progressing at a good pace, well aware of 

the rewards that are waiting for them. Some have run into dead ends and 

still do not understand why they have to take part in this. These people 

need our guidance, assistance and continuous support to reach the goal. 

The overall objective – to lift the entire industry’s standard – will not be 

met until we have all crossed the finishing line. This will take years and 

we should not become sceptical about the effectiveness of ISM if we still 

see examples of poor shipping operations. With this as a background, I 

was pleased that the organisers of this conference, Lloyd’s Ship Manager, 

decided to include papers on ISM at this occasion. 

First of all, I will make a brief presentation of the findings of our ISM 

Code survey. These results have been well published and I will not spend 

much time on it since many of you have probably read or heard about 

them before. I will continue to talk about the factors that we believe make 

some companies succeed while others fail. What we can do to improve 

our Safety Management Systems (SMS) and whether these improvements 

will have any impact on the insurance premiums will also be addressed. 

The ISM Code survey 

The results of our ISM Code survey showed that the Club’s phase 1 vessels, 

i.e. tankers, bulkers and passenger vessels, which got a head start of four 

years over the phase 2 vessels, gradually improved over the study period 

by about 10 per cent a year in frequency of insurance claims, compared 

to the Club’s phase 2 vessels. After three years, the difference reached 

about 30 per cent. At one point, a few years before the second deadline, 

the difference started to decrease since more and more phase 2 vessels became 

involved in the ISM implementation process. This was completely 

in line with our expectations. Our conclusion was that the pattern that 

emerged was a consequence of ISM and that implementation of Safety 

Management Systems, together with the increased safety awareness that 

came as a consequence of the implementation, could produce a reduction 

in accidents of up to 30 per cent. These ideas were also confirmed by a 

membership survey on ISM that was carried out at the same time. 

Success factors and problems 

Approximately 1,000 merchant vessels were included in the study, about 

half of them phase 1 vessels and the other half phase 2 vessels. There was 

a good international mix of owners and management, vessel types, age, 

flags, etc. The number of vessels, together with the study period of six 

years, equal about 60 million shipboard working hours. One could easily 

imagine the enormous number of opportunities to both make mistakes 

as well as avoid making mistakes when these opportunities arose. It is not 

surprising that the half that got new tools that assisted them in doing the 

right thing, did the right thing more often than before, even if we do not 

know exactly what caused these rather quick results. Personally, I believe 

that the more widespread introduction and use of checklists and procedures 

for key shipboard tasks and operations is a very important factor. 

In accident prevention terminology procedures are defined as a ‘barrier’, 

a barrier against accidents, and by strictly following the procedure you 

minimise the risk of a loss to a very low level. 

When I talk to people less familiar with ISM and try to explain what 

ISM is all about and why procedures are so important, I sometimes use an 

example that is not at all related to shipping operations. Imagine that you 

are supposed to record a TV programme on your video cassette recorder 

(VCR). If you have not done it before, or if you do it on a rare basis, you 

need to read the instructions and go through the ‘record programme 

procedure’ to get it right. Even if you do it once a day, it could be wise 

to go through the procedure and perhaps have someone check what you 

have done, especially if it is your favourite show. We all know that routine 

issues may cause reduced vigilance. All people find this natural and 

would certainly not risk just pushing the buttons on the remote control 

and hoping they get it right. 

However, have we not heard people complaining about the difficulties 

in understanding instruction manuals – manuals for items like VCRs 

Even if they read the text they still do not understand what they are supposed 

to do and that is in most cases not the readers’ fault. The manual 

may contain a lot of irrelevant information and may even be written in a 

language that you do not fully understand. What can make it even more 

14


Reducing 

insurance claims 

through effective 

implementation 

of the International 

Safety Management 

(ISM) Code 

ISM 

Martin Hernqvist, speaker at the Ship Management 2002 conference 

in Cyprus. 

Hernqvist, at the Ship Management conference in Cyprus in September 2002 

difficult is that you sometimes do not find your manual or procedure 

when you need it – ‘it is probably in a binder somewhere’. 

In many ways, there are similarities between a VCR manual and an 

ISM manual with their respective procedures: both the objective to ensure 

that you do exactly what you are supposed to do and also the problems 

that I have just mentioned. There are also differences. Compared to using 

a VCR manual, there are still many people who have negative attitudes towards 

working with ISM procedures. They think that it is unprofessional 

and have not fully understood why they need to use these procedures. 

‘We managed before without them.’ For these people it may feel more 

natural to use the ‘record programme procedure’ on their VCR than to 

use the ‘entry into enclosed spaces procedure’ on board their ship. This is 

an attitude problem that must be addressed. There are other differences 

as well. You would not accept using a VCR manual developed by people 

who did not know much about how your VCR actually worked, and you 

would directly contact your supplier if you got a manual for a completely 

different brand. In shipping this is different. There are many companies 

in our industry who have bought ‘off the shelf’ products developed by 

people who have had little insight into these companies’ specific type of 

operation. We have also heard about ISM manuals found on board that 

were developed for completely different types of ship. One does not have 

to be very clever to understand that this will not work. 

By identifying the problem areas we have also identified the areas for 

further improvement. One important area concerns the attitude problem. 

This is something that must be dealt with both ashore and on board. If 

people do not believe in ISM, it will not work. One way to tackle the 

problem is to provide owners with good examples. This is a responsibility 

and in the interest of all parties in our industry. Another way is through 

training. The Swedish Club is actively involved in promoting Resource 

Management training that, among other things, recognises standard 

operating procedures as an important resource to use in order to achieve 

the high goals of safety. 

We believe that an important reason we saw a positive effect following 

ISM implementation in our Club is to a large extent related to our membership’s 

attitudes to ISM. No other insurer has, according to my knowledge, 

seen the development that we experienced. We carefully select 

our members and not all gain access. This, together with a massive Club 

campaign on ISM and premium reductions for those who implemented 

ISM in advance, has most likely paid its dividends. The important mes- 

sage here is that while ISM has worked for some, it could work for all. 

Proper attitudes are not enough. As just mentioned, the SMS must be 

easily accessible, easy to work with and easy to understand. Delete all that 

is irrelevant and keep what is important. Make sure that you are in full 

control of your SMS and regard it as something that should be continuously 

improved and amended to the better. The importance of letting the 

users take an active part in this process cannot be emphasised enough. 

Premiums and claims in balance 

Now, to conclude with, let me briefly explain the risk assessment process 

we use when we enter a new member in The Swedish Club. There are 

certain factors that we take a closer look at and investigate. These factors 

include vessel type, flag, class, age, main engine type, and, above all, management. 

These factors are of different importance but it is no secret that 

the management factor is the single most important factor in our rating 

model. In order to calculate the correct premium level we try to identify 

the attitudes towards safety in the company. Good owners will already at 

this ‘first entry stage’ benefit from a high-rated safety culture. After some 

time, it is the actual performance that matters. Even the best owners will 

experience severe claims and that is what insurance is for. A steady stream 

of ‘unnecessary’ claims is, however, difficult to accept. 

The marine insurance market has been extremely soft over the past 

years and most marine insurance companies, both the mutual non-profit 

making, as well as the commercial ones, have made big losses. It is perhaps 

not necessary to mention that making losses is not what we mean 

by non-profit making. In the mutual insurance world it is an important 

principle to try and balance premiums with claims. As the market is now 

hardening we believe that we will see a clearer distinction between what 

the good ones and the bad ones will have to pay. The balance between 

premiums and claims should apply to each individual member and those 

with good records will be rewarded. 

I am confident that ISM, correctly implemented and used, will be 

one of a shipowner’s most worthwhile investments. Make sure that 

the whole organisation believes in the system, 

provide feedback and good examples, ensure 

user-friendliness and continue to improve your 

procedures. This will for certain reduce losses, 

and the mutual insurance system will reward 

you. 

15

Market / News from London 


Thestate theMARKET 

of 

The current situation for the marine market 

is in a new phase, complicated by years of 

technical losses, lack of back-up from the financial 

markets, mergers and restructuring. This 

will lead to higher premiums and deductibles 

but also differentiated premiums depending on 

performance in a fair way. 

Both the direct insurance industry, the 

mutuals and companies serving the members 

and clients, together with the reinsurance 

market providing back up for the direct market, 

have faced severe losses over the last years. 

When discussing losses, one has to distinguish 

between technical losses and accounting results. 

The latter may be positive, due to other 

income such as investments. Studying 

the marine market, most insurers have 

had technical losses for quite a number 

 

of years, but the losses have been made 

good as the result of a very positive 

investment income. Thus, when the 

financial markets dip, the negative 

 

technical result surfaces. This is the 

situation today and is the cause of the 

push for higher premiums. 

 

Severe losses 

In addition, there have been a number 

of severe losses to the market. A year ago, 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claes Lindh 

DIRECTOR 

Underwriting & Marketing Department 


the world saw one of the most tragic events ever, 

the attack in New York. A current figure for the 

loss is around USD 45 billion and increasing. It 

is not a marine loss, but the reinsurers backing 

the marine insurance industry are all involved. 

The World Trade Center catastrophe may be 

the single biggest loss, but concurrently there 

Hull premium index – market comparison 

 

 

 

 

 

 

 

 

 

 

have been quite a few claims in the marine 

market as well. Recently, we have seen an 

ultramodern passenger ship on fire, a new bulk 

carrier obstructing a reef in Australia, a tanker 

ablaze off Yemen, and one can give examples of 

more expensive accidents. These conspicuous 

accidents, well known to most people bring 

with them an increase in expensive collisions 

and groundings not known to many people 

outside the insurance companies and their 

clients involved. Reinsurance companies are 

faced with these as well and the combination is 

a second factor pushing premiums. 

 

 

Capacity 

There is no lack of capacity so far in 

the marine market. Capacity is the risk 

capital that is floating in and out of the 

market, depending on the attraction of 

the market as such. The newly built, 

highly valued ships will find cover for 

the exposure. One may even predict 

that when stock and bond markets 

are under-performing, capital will be 

attracted to the insurance market where 

figures for investors are at least pointing 

in the right direction. Partly true, but 

there are sectors other than the marine 

where the attraction is much bigger. 

News 

from 

London 

London’s position will be maintained 

London has retained a leading position in the 

world of finance and commerce through a curious 

mixture of old fashioned principles together with 

what seems to be endless adaptability. 

New investors and fresh government controls 

currently being considered could test the resilience 

and adaptability that have served London over 

many years. 

Early signs indicate that 2002 looks like being 

a good year for Lloyd’s, with Standard & Poor 

forecasting a GBP 1.4 billion profit and incurred 

loss ratios being the lowest for some years. The 

traditional ’names’ at Lloyd’s are coming under pressure to sell out to 

corporate interests. Two of the top syndicates are offering a buyout 

of ‘names’ which, if successful, will see a further 7 per cent drop in 

the capacity of the ‘names’, whose interest has already shrunk by 

two thirds across the whole of Lloyd’s since the introduction of the 

corporate investors. But the corporate investors are likely to be more 

focused on what they wish to achieve with their investments than 

were the ‘names’ of the past. With marine risks being less attractive 

than other risks, the forecasted rise of capital backing at Lloyd’s to 

GBP 13.5 billion this year may not be of great benefit to the marine 

market. 

The U.K. trade surplus in financial services is reported as double 

that of any other country. Insurance is the largest single contributor 

to ‘invisible earnings’, with net exports of GBP 3.8 billion. 

The imaginative accounting practices uncovered in the U.S. 

have led the International Accounting Standards Council to propose 

changes it hopes will lead to greater transparency. The European 

Union has agreed to implement ‘Full Value Accounting’ by 2005. 

The system provides for full disclosure of the net present value of all 

items on the balance sheet, that is to say the discounted value of all 

assets and liabilities at the time of the accounts. Might this lead to 

unnecessary fluctuations in share prices 

The U.K. Government is completing a review of the residence 

and domicile rules affecting foreigners living in the U.K. A new 

study commissioned by the Baltic Exchange suggests that if foreign 

shipowners were to be taxed on their overseas earnings, it could 

lead to a substantial move away from the U.K. The majority of the 

shipowners are Greek and they could easily move their operations to 

countries where they would obtain favourable terms. There would be 

a potential risk of the loss of up to 4,500 jobs in London. The study 

forecasts GBP 375 million of maritime service earnings could be at 

risk, as well as more than a third of London’s tanker chartering business 

and 40 per cent of the dry bulk carrier business. 

There can be no doubt that 

solutions will be found to these 

problems – London’s position will 

be maintained and the traditions 

preserved. 

 

Ken Bright 



16


Market / News from Hong Kong 

The International marine market – loss ratios 

Quite a few sectors started the sanitation 

earlier and rates within the energy sector are 

moving faster and are thus more attractive for 

investors. This may lead to less capacity for 

the marine market – the predictions vary. The 

price tag on capacity is increasing, a change 

that the owners of highly valued ships will 

face with a further increase in premiums. 

Contracting market 

The direct market is contracting and in Sweden 

today we have three mayor players in the 

market, The Swedish Club, a multinational 

and one Scandinavian company. The situation 

is similar in Norway, where there are 

two additional marine insurance companies. 

The marine syndicates at Lloyd’s are further 

reducing in number; one or two in Germany, 

one or two in France and the situation is 

similar in Japan and the U.S. A number of 

the direct companies have offices spread over 

the world. These are increasing in number 

but not in providers, since they will not compete 

with themselves. The contraction of the 

market is thereby another factor reducing 

competition and pushing premiums. 

Internationalised brokers 

Another result of the restructuring of the 

market is the globalisation of placements. 

A big fleet that wants to spread its risks in 

a number of insurance companies has to approach 

new markets. Thus the brokers will 

be more internationalised to be able to solve 

the placing of at least the larger accounts. 

Fleets traditionally insured in the local home 

market may need support from the other side 

of the globe. This will require better information 

and presentations of a fleet and involve 

longer lead-times for placement. Probably 

this is a factor that will not push premiums 

but differentiate premiums between owners 

and positive for the market in general, both 

for buyers and providers. 

Anything positive 

So what is positive in this negative outlook 

Differentiation has already been mentioned. 

Higher deductibles will reduce the workload 

for the insurance industry and reduce pressure 

on premiums in the long run. Please note the 

expression ‘in the long run’, since the next 

years’ increases will be made and therefore 

the pressure on premiums will not reduce for 

another two or three years. The increase in 

deductibles is similar to an investment that 

matures three or four years down the road. 

Reductions in sight 

Will the required premium increases of the 

next years be followed by a reduction in premiums 

The last time the market was in a similar 

situation, 1990/1991, your writer, being an 

oracle in predictions, stated that this was the 

last time in history. A much wiser Managing 

Director, following a gentle tap on the shoulder 

said merely the situation would come back 

– and how correct he was. The market has never 

been so low as the last couple of years and the 

prediction is it will never drop that far again. 

But following an increase, there will always be 

a balancing period. Each cycle will change the 

future and this last cycle has had a clean-up 

effect, the contraction, less players going forward 

and, with the contraction, fewer players 

are moving ahead. The restructuring of the 

market will reduce volatility, which is one of 

the best pieces of news for customers. Modern 

investment techniques require long term planning 

and a volatile market is undesirable. 

Focus on stability 

The Swedish Club will increase premiums and 

deductibles for its members for the reasons explained. 

The goals and objectives of the Club 

include ‘To uphold and offer premium levels, 

which are competitive and reflect reliability 

and stability’. 

Are we diverting from the objectives 

stated 

The answer is definitely no. Premium levels 

are pressed down during a soft cycle and thus 

have to increase in a hardening market due to 

losses made. The main difference is the volatility. 

The Club is focusing on stability and 

predictability. A study between The Swedish 

Club’s hull premium development compared 

with the Norwegian market’s premium during 

the same period proves the statement as being 

less expensive in a hard market and slightly 

higher in a soft market. That is the premium, 

the top class service provided is, in any market 

situation, always beyond compare! 

 

News 

from 

Hong Kong 

Strong 

signs in 

China 

Freight rates for 

most shipowners have 

been very disappointing 

over the last year due 

to the global economic 

slowdown together 

with an oversupply of 

vessels in most segments. 

Container ship operators 

are amongst the hardest 

hit, with many of the giants reporting 

drastically lower income. There are signs 

that things might be changing at least for 

container cargoes from China to Europe. 

Although there is a big oversupply of box 

ships in the world, container cargoes are 

piling up in some ports in China due to a 

sudden increase in container volumes to 

Europe and a lack of tonnage servicing the 

route. Freight rates have recently doubled 

for cargoes destined for Europe. The lack 

of cargoes returning from Europe has 

subsequently created a shortage of 40-foot 

containers in China. Let us hope freight 

rates will improve in other segments as well. 

Recently, Chinese shipyards have been 

very popular with Swedish shipowners. A 

large number of newbuildings now proudly 

flying the Swedish flag have been delivered 

or will be delivered from shipyards in 

Shanghai and Dalian. A shipyard in Dalian 

recently delivered the first VLCC ever built 

in China to Iranian owners. Korean and 

Japanese shipbuilders, who have dominated 

the newbuilding industry for the last 20 

years, now have a serious and able contender 

in their own back yard. 

As you read this article, we are entering 

the renewal season. Looking at the bottom 

line for most H&M underwriters and P&I 

Clubs, it is safe to say that premiums will 

increase. Although we had a bad year last 

year, we will do what we can to make sure 

premiums are fair and reflect claims records 

and the perceived risk. Without the support 

of extra money from the financial markets, 

we have to make sure that the premiums 

we receive cover claims as well as the administration 

costs of running the Club. As 

a mutual, you can rest assured that we will 

not ask for more money than necessary to 

get the portfolio into the black again. 

 

Tord Nilsson 

MANAGING DIRECTOR 

The Swedish Club Hong Kong Ltd. 

17

Underwriting 


Underwriting 

The Swedish Club 

concept 

Claes Lindh 

DIRECTOR 



Quite a few of our members will never or 

at least very seldom enjoy the claims service of 

the Club: they just have no claims. Yet they will 

have the benefit of another part of our servicechain, 

namely the underwriting service. 

In the old traditional market, the brokers 

are the sole contact between the owners and the 

insurance industry. This statement is more correct 

in relation to Hull & Machinery insurance 

and less in relation to Protection & Indemnity 

insurance. Furthermore, it is less true today 

than it used to be a decade ago. Alas, there are 

still a number of shipowners who have never 

met or seen their underwriters and even more 

so what is worse, there has not been any good 

reason for it. Traditionally, the brokers have 

targeted owners and marketed the services 

provided by the industry including modelling 

new products required. The process included 

writing, producing all documents, arranging 

all transactions and amendments to cover. 

The next step in this chain is claims handling, 

settlements and collections. The underwriter’s 

role has merely been to sign the completed 

document, of course subject to the fact he has 

accepted the proposal. 

Feedback 

In The Swedish Club, the Club does most of 

the procedures described above. This is how we 

have refined the product, added more value to 

the process of marine insurance, and we have 

gone further. The emphasis in this refinement 

of the product is the claims service and the ultimate 

feedback with our Loss Prevention programme. 

This newsletter is part of this feedback 

to our members. In this article we will limit 

ourselves to the initial part of the refinement 

process, underwriting. 

Documentation 

Service from the underwriting point of view 

is accessibility, quick response and correctness. 

The documents produced represent a 

value, a commitment from the Club towards 

its members. They are used in a further process 

to support the shipping industry in its trade, 

from purchasing ships, chartering, performing 

voyages and safely delivering the commodities 

to the right port, be they cargo or passengers. 

Without proof of insurance, banks will not lend 

money, cargo interests will not accept a charter, 

countries will not allow ships in their waters, 

ports will not grant entry. The documentation 

is becoming more critical, so the service provided 

by the Club will be more focused upon. 

We will develop SCOL further 

Availability via fax, telephone, letters, e-mail 

and mobile phones are standard. What we 

have developed is The Swedish Club OnLine 

‘SCOL’, the web access to our extranet where 

you as a member can find your records, your 

claims, benchmarking, your ships entered and 

even print a certificate of entry if necessary. 

The SCOL has replaced tons of paper delivered 

to members and brokers with claims data and 

records. It is available at the mere touch tap of 

the finger, live on screen. At the moment we are 

in the process of moving forward to a new IT 

platform. This new IT environment will make 

it possible for us to develop SCOL further. 

From an underwriting point of view, we may in 

the future add entire entry documents, providing 

full information on all the conditions, rules 

and terms of cover. 

Although we are more transparent, using 

modern techniques such as web solutions, the 

personal touch remains the most important 

element. Trained and dedicated staff, ready to 

assist and support, provide reliable and correct 

information and documentation. 

War cover 

Today we face quite heavy pressure on the war 

cover we provide. Following the tragic attack 

last year in New York, quite a big and busy 

area was excluded from ordinary war cover. A 

large part of the south and east Mediterranean 

coasts were excluded from trading, the Suez 

Canal, the Red Sea and its coastlines, Pakistan 

and later India. This was in addition to the 

already heavily trafficked Arabian Gulf and 

the long period of exclusion from Sri Lankan 

ports. Vessels trading in these excluded areas 

need to reinstate their war cover and that can 

only be granted 48 hours in advance. This is 

an additional workload we have to face but are 

happy to deal with. Our members need quick 

and reliable advice and good cover for such 

breaches, so we provide them. 

Research 

We face similar situations with trading to areas 

outside the trading warranties. With new ports 

opening in northern Russia and eastern Siberia, 

the pressure from owners to accept cargoes from 

these areas is growing. Probably safe and easy to 

call in normal circumstances, but the pressure is 

high on extending voyages into the winter season 

when it is dark, cold and there is too much 

ice. Most ships are not built for safe navigation 

in ice and should stay away from these areas 

when temperatures drop far below freezing and 

the gentle blue ocean turns into a solid frozen 

rock. We do our utmost to assist in solving the 

owners’ request to trade, which often includes 

extensive research. 

Updated documents 

More common are tasks in making changes 

to current covers. Value changes, change of 

managers, change of flag, change of registered 

owners. Since the documents represent a value, 

certificates have to be updated and processed 

mid-term. 

Enhanced premium control 

We have enhanced our service further. At the 

end of the summer, we added an Assistant Underwriter 

to the department, Mr Jakob Osvald 

(you can read more about him on page 26) to 

streamline the process. Part of his task is to 

head the credit and premium control function. 

For a long time premium control was part of 

our accounting department, but we decided 

to move this function to underwriting. We 

see it as part of our service. The service we 

provide and the promise we undertake to pay 

and indemnify a loss to our insured members, 

requires a commitment from our members to 

pay us in time and the agreed correct amount. 

Most do, but from time to time we have to deal 

with wrongdoers. Being a member in a mutual 

organisation requires mutuality in all respects. 

The member who performs and pays in time 

shall not suffer from members failing to fulfil 

their obligations. The service we provide in this 

respect is a reminder. 

Why do we face late payments ‘Tradition in 

the market’ used to be a valid argument but is 

a bit antiquated today. Recalling the custom of 

the trade to pay six months late has now been 

forgotten and may not even be noted in the history 

books. Today, the industrial system relies 

on the just-in-time principle, be it delivery of 

goods, payment of claims or in this case payment 

of premiums. We are updating the computer 

system as part of the process for speeding up 

payments. The new system will be more flexible 

and adjusted to international common practice 

in calculating instalments. We will change the 

procedures of deciding on terms of payment 

earlier in the process. We will work closer with 

the premium controllers from the underwriters’ 

side. We will charge interest for late payments 

and/or reduce the service we provide on the 

claims side. 

 

18


Freight Demurrage & Defence 

U.S. Security Regulations 

Freedom has its costs 

As many of our readers will be aware, 

the United States of America has introduced 

stringent new security regulations since September 

11 th last year. Having shown appalling 

vulnerability to attack from the air, the U.S. 

authorities clearly have every right (and duty 

to their citizens) to take the measures they perceive 

as necessary to safeguard against attack 

from the sea. 

The USA has a vast coastline, stretching 

down the eastern seaboard, around the Gulf 

of Mexico, and from San Diego on the south 

pacific coast to Seattle in the north. Clearly, it 

is impractical to guard all of this coastline all 

of the time (as Abraham Lincoln might have 

foreseen); instead, a strategy of guarding some 

of the coastline all of the time has been adopted, 

and for this purpose ‘Port Security Units’ have 

been introduced at major ports throughout the 

country. 

Countering the Threat 

Governmental agencies such as the United 

States Coast Guard (USCG), the Customs 

Service, and the Immigration and Naturalisation 

Service (INS) are involved in developing 

the strategies necessary to ensure port security. 

However, it is not possible to defi ne the precise 

requirements upon vessels entering U.S. waters. 

There are several reasons for this: 

• implementation of the directives and orders 

emanating from these bodies is not uniform 

– it varies according to the assessment of the 

threat at each port. 

• directives are constantly evolving, being 

updated, amended or revoked. 

• the U.S. authorities do not disclose the 

criteria they use to assess the perceived risk. 

As readers would expect, our correspondents 

and friendly lawyers in the USA update us 

of developments. It seems tolerably clear that 

considerations such as flag state, owners’ and 

charterers’ nationality, crew nationality, vessel 

trading pattern, cargo, and crew size relative 

Ken Littlejohn 



to that of the vessel are all factors that may be 

taken into account by the Port Security Units 

as they assess vessels arriving in the USA. One 

would suppose vessels with connections to 

countries or individuals perceived to be inimical 

to U.S. interests will be most susceptible to 

close scrutiny. 

The Requirements 

For the reasons stated above, this short article 

does not attempt to provide an exhaustive account 

of the requirements upon a vessel entering 

U.S. waters. Precise requirements should in 

all cases be verified with the local agent (and, 

if need be, with assistance from The Swedish 

Club), prior to arrival. However, here follows 

just a few of the requirements of which we have 

been advised: 

• Vessels must provide not less than 96 hours 

notice of arrival to the USCG. Information to 

be disclosed includes a list of the five previous 

ports visited, and details of the crew, 

including where they embarked. 

• Carriers are to be required to provide cargo 

manifests to the U.S. Customs 24 hours prior to 

the lading of cargoes at foreign ports for shipment 

to the USA. This regulation appears to be 

targeted specifically at the container trade, and 

exempts vessels carrying bulk cargo. 

• Upon arrival, armed security guards may 

be ordered to board the vessel if the crewmembers 

‘meet certain INS criteria’ (see 

above). Such guards are contracted from 

a list of approved local companies, and 

must be hired and paid for by the vessel (in 

practice, via the local agents). The price for 

such guards is in the region of USD 20 per 

hour, and they usually remain on the vessel 

from offshore pilot stations at least until she 

reaches her first port or anchorage. At this 

point, INS representatives board the vessel, 

checking the crew lists and visas. Thereafter, 

guards of a number they deem appropriate 

may be ordered to remain on the vessel into 

inland waterways and/or further berths. 

• At the time of writing the INS is said to require 

fingerprinting and photographing of crewmembers 

from Iran, Iraq, Libya, Pakistan, 

Saudi Arabia, Sudan, Syria and Yemen. 

The FD&D Perspective 

There is no doubt that these rigorous new requirements, 

justifiable as they may be from a 

security perspective, give rise to the possibility 

of delays and extra costs. We have already encountered 

queries from members seeking guidance 

on whether such costs should be borne by 

owners or by charterers. The sums in issue may 

be quite substantial – for example, we know of 

one vessel where the INS imposed a requirement 

of 14 armed guards, 24 hours a day, over 

a prolonged period. 

Whilst liability for delays (due, for example, 

to congestion or port state requirements), 

will normally be decided with reference to the 

laytime or off-hire provisions in the governing 

charterparty, liability to pay for guards may not 

be so clearly defined. Do they fall within the 

ambit of ‘port charges’ Are they ‘compulsory 

watchmen’ These are the sort of questions we 

have been asked. 

Members contemplating a charterparty in 

which the vessel is likely to call at U.S. ports 

may well conclude that it would be sensible to 

defi ne liability for such costs by introducing an 

appropriate clause into the charterparty. 

In the London office, the FD&D team is 

ready to help you. We would be very pleased to 

hear from any of our members who would like 

assistance in the drafting of such a clause. 

 

19

Crew 


Work-Related Death, Injury and Illness 

Mr Ruben T. Del Rosario 

MANAGING PARTNER 

Del Rosario & Del Rosario, Manila 

One of the significant changes in the 

amended Philippine Overseas Employment 

Administration (POEA) Standard Employment 

Contract is the work-related clause. Unlike in 

the old contract, the amended POEA contract 

now requires that death, injury or illness of the 

seafarer must be work-related in order to be 

compensable. 

The amended contract itself provides the 

definition of a work-related injury and illness. 

Work-related injury refers to injury(ies) resulting 

in disability or death arising out of and in the 

course of employment. On the other hand, a 

work-related illness is any sickness resulting to 

disability or death as a result of an occupational 

disease listed under Sec. 32-A of the contract 

with the conditions set therein satisfied. 

Work-Related Death 

It should be noted that work-related death 

is already incorporated in the definitions of 

work-related injury and illness. There are 

two conditions for work-related death to be 

compensable. The death must result from 

a work-related injury or illness, and it must 

have occurred during the term of employment. 

However, when the seafarer dies after his term 

of employment but his death was a result of a 

work-related injury or illness suffered during 

the term of employment, the resulting death is 

still compensable. Work-related death will be 

discussed at length in relation to work-related 

injury and illness. 

Work-Related Injury 

As the work-related clause is relatively new, there 

is still no decided cases applying said provision 

on seafarer’s claims. Thus, there is a need to 

refer to related Philippine law and established 

jurisprudence, which would most likely serve as 

basis for future interpretation of the new POEA 

contract. 

The basic requirements for compensability 

of injury are that it must arise ‘out of and in the 

course of employment’, and it must occur during 

the term of the contract. 

Based on Philippine Supreme Court 

decisions involving land based workers, as a rule, 

the injury (or death) is considered work-related 

when it is suffered at the work place, that is to 

say, at the place where his work requires him 

to be or if elsewhere, the employee must have 

been executing an order from the employer. In 

addition, the injury must be suffered while the 

employee is performing his official functions, or 

ministering to his personal health and comfort 

such as hunger, thirst or other physical demands. 

There is one Supreme Court decision which 

involved a local seafarer, who by the nature 

of his duties, was required to stay on board a 

barge. One day while swimming in the vicinity 

of the barge, he died by drowning. The Supreme 

Court held that his death arose out of and in the 

course of employment as at that time, he was 

engaged in an act necessary to his physical wellbeing, 

hence incidental to his employment. 

However, the rule on ‘injury at workplace’ 

admits four exceptions, to wit: 

1. Where the employee is proceeding to or 

from his work on the premises of his employer 

with no diversion from usual route, (‘cominggoing 

or direct premises’ rule). There is an 

actual case involving a school principal who was 

run over by a bus while she was waiting for a ride 

on her way to school. The Court ruled that her 

injury was work-related as she was at the place 

of accident as required by her employment if she 

was to reach her workplace on time. 

2. Where the employee is about to enter 

or about to leave the premises of his employer 

through an exclusive or customary means 

of ingress and egress (‘ingress – egress’ or 

proximity rule). A case in point is an employee 

who was on his way to work and while running 

to avoid the rain, slipped and fell into a ditch in 

front of the main gate of the employer’s factory 

Court Decisions on Specific Illnesses 

Considering the dearth of jurisprudence on compensability of seafarers’ work-related illnesses, it is likewise 

imperative to rely at the moment on Supreme Court decisions applying laws related to land-based employment. 

The following are some of the interesting and enlightening court decisions on specific illnesses. 

Cerebro-Vascular Accident/Stroke 

A postman suffered a stroke while inspecting his rice fields during 

a non-working day. It was established by medical opinion that the 

employee’s cerebro-vascular haemorrhage was directly caused by 

hypertension which was not traceable to the nature of his employment 

but by personal causes unrelated to work. The Court ruled that 

even though hypertension which caused the fatal stroke of the deceased 

may not have been directly caused by his employment, still it 

was shown that said illness was aggravated by his employment of 24 

years performing the duties of letter-carrier and acting postmaster. 

Liver Cirrhosis 

An employee who works as a weaver died of liver cirrhosis. The Court 

applied the presumption of compensability holding that the employer 

failed to discharge its burden of proving that the ailment is not workconnected. 

However, in another case (decided when the Labor Code 

was already in force), the Court held a similar claim arising from liver 

cirrhosis disease to be not compensable. The Court rationalised that 

‘physical hard work, occasional or periodic exposure to sun and rain, 

emotional and physical privations accompanying modest salaries are 

conditions shared by the great majority of public employee.’ None of 

the general conditions of the claimant’s employment was shown to bear 

relation to cirrhosis of the liver or to the risk of contracting it. 

Cancer 

A laboratory technician died of liver cancer. The court considered the fact that the employer 

worked for more than nine (9) years in the employer’s laboratory and was exposed 

daily to dust, gases and fumes of various chemical matters. While the liver is not accessible 

through the respiratory system, nevertheless there is the strong possibility that the 

hazards in the laboratory so affected his health and reduced his body resistance that it 

could not withstand the infection of the liver, which later became cancerous. At the very 

least said the Court, working conditions aggravated his illness. This case should be distinguished 

from the present rule under the Labor Code in which the presumption of compensability 

does not apply. Under said rule, cancer ailments, except for a specified few, are 

not compensable. It is a disease of still unknown origin which strikes people in all walks of 

life, employed or unemployed. Unless it is shown that a particular form of cancer is caused 

by specific working conditions” (e.g. chemical fumes, nuclear radiation, asbestos dust, 

etc.), the Court held that it cannot be concluded that the employment increased the risk of 

contracting the disease. 

Myocardial Infarction 

The Court had occasion to deny a claim arising from an illness of myocardial infarction. 

In this case, the employer was able to establish that the employee has been drinking and 

eating fatty foods which is related to his cause of death. In addition, it was found that the 

employee’s duties as stated in his job description are light and do not involve strenuous 

physical exertion as he merely acted as overseer of the mill. His duties could not have 

directly caused the illness. 

20


Crew 

under the amended POEA Contract 

which resulted in his death. It was held that the 

death was compensable. 

3. Where the employee is charged while on 

his way to or from his place of employment or 

at his home, or during his employment with 

some duty or special errand connected with his 

employment (‘special errand’ rule). By way of an 

example, the injuries sustained by an employee 

who was ambushed while travelling outside 

the workplace to buy supplies for her employer 

was held to be work-related and therefore, 

compensable. 

4. Where the employer, as an incident 

of the employment, provides the means 

of transportation to and from the place of 

employment (‘shuttle bus’ or ‘extra-premises’ 

rule). An example is when an employee suffers 

injury while onboard a shuttle bus or similar 

vehicle provided by the employer to transport the 

employees in going to or coming from the work 

place. The reason for this rule is that said vehicle 

is considered an extension of the employer’s work 

premises. 

Work-Related Illness 

Under the amended POEA contract, for an 

illness to be compensable, it must not only be 

listed under Section 32-A but must also occur 

during the term of the contract. 

Section 32-A states that ‘for an occupational 

disease and the resulting disability or death to 

be compensable, all of the following conditions 

must be satisfied: 

• The seafarer’s work must involve the risks 

described herein; 

• The disease was contracted as a result of the 

seafarer’s exposure to the described risk; 

• The disease was contracted within a period 

of exposure and under such other factors 

necessary to contract it; 

• There was no notorious negligence on the 

part of the seafarer.’ 

Further, each of the 21 illnesses listed under 

Section 32-A enumerate specific conditions to 

be considered work-related. It is important to 

review these conditions as they are material 

to the determination of whether the illness is 

work-related. 

Those illnesses not listed in Section 32-A 

are ‘disputably presumed’ as work-related. 

This means that illnesses not so listed which 

are suffered by a seafarer during the term 

of his contract are presumed compensable 

unless ‘substantial evidence’ is presented by the 

employer to prove that the illness is NOT workrelated. 

In short, the employer has the burden 

to prove that the illness is not work-related. 

Insufficient or lack of evidence on the part of 

the employer will result in the presumption 

being applied and the illness will be considered 

work-related, hence compensable. 

Conclusion 

The work-related clause has given the employer 

added defence against seafarer’s claims. However, 

the impact of this significant amendment in the 

POEA contract remains to be seen and would 

depend on future interpretation by the Courts. 

It is predicted that the Courts would more or 

less adopt their previous rulings as cited below. 

 

PHOTO: PHOTODISC 

Hypertension, Congestive Heart Failure 

The Court ruled that a taxi driver’s heart ailment was aggravated by driving for long hours 

in Manila, including all its incidents, such as congested traffic and helping passengers 

load and unload baggage, causing severe strain and tension. Since it is enough that the 

employment contributed, even in a small degree, to the development of the disease, the 

illness was considered compensable. 

Peptic Ulcer 

In one case, the Court held that an employee who works as a company driver suffered 

abdominal pains in the course of employment and had to stop working by reason thereof. 

It was established that the employee had to stay in the province to take a break from 

the heavy burden of driving and even presented a physician’s report that he was treated 

for ‘epigastric discomfort.’ On the other hand, the employer failed to present contradictory 

evidence to overcome the presumption of compensability. For this reason, peptic 

ulcer was declared compensable. In any case, please note that peptic ulcer is listed as 

an occupational disease in the amended POEA contract. 

Diabetes Mellitus 

In one case, it was held that ‘diabetis mellitus’ is not work-connected. It is a metabolic 

and a familial disease to which one is pre-disposed by reason of heredity, obesity or old 

age. The Court ruled that irrespective of the type of work that the employee (a Revenue 

examiner) has engaged in, he could have contracted diabetis. Further, the Court found 

no causal relation between the employee’s basic illness, ‘diabetis mellitus’ and its complication 

‘diabetis retinopathy’ with his employment and working conditions nor can it be 

said that the nature of his work had increased the risk of his contracting either ailment. 

Pulmonary Tuberculosis 

An industrial worker was found sick of pulmonary tuberculosis (PTB) 

during his pre-employment examination. Subsequently, he was found 

fit by the company physician and allowed to work for more than two 

years until he was directed to stop working by the company physician 

by reason of the same PTB illness. The Court held that the recurrence 

of the illness ‘must be because of the nature of his work which consisted 

of baring holes by means of a machine that weighed 200 pounds 

and lifting timber of various sizes and which he did under conditions 

that could have aggravated his illness’. However, in another case, the 

Court rejected a disability claim arising from PTB. Subject employee 

worked continuously for 10 years in a mining company in various 

capacities, such as mucker, miner and ‘capataz’. During said period he 

contracted PTB. The Court held that there was ‘no causal relationship 

between claimant’s illness and his employment. Had the factors or 

conditions of claimant’s employment contributed to the development 

of his illness, his tuberculosis would have worsened at the time when 

he was performing the work of miner or mucker as said jobs are more 

strenuous than that of a capataz. The reverse is true in this case. This 

can only mean that the worsening of claimant’s illness is due to factors 

extraneous to the employment.’ Moreover, it was established that the 

employee used to stay late at night and sometimes, up to early hours 

of the morning due to gambling activities. This had contributed greatly 

to the development of his illness. 

21

Cargo 


Daniel Eriksson 


Claims & Legal Support Department 


Under Chilean law, carriers are required to deliver the goods to a licensed customs 

warehouse. The warehouse is an intermediary where the goods are kept until all applicable 

requirements have been met and the goods can be delivered to their owner. The carrier is 

obliged to deliver to the warehouse even without production of the bills of lading, as the 

warehouse is not the rightful owner. Once the cargo has been cleared by customs it can 

be delivered to the legitimate owner, usually represented by a customs agent, acting on 

behalf of the owner. Until recently it has been the general understanding that delivery to 

the customs warehouse has released the carrier from his obligations under the contract of 

carriage. However, a recent decision in the English High Court has elucidated the situation 

as far as English law is concerned. 

Delivery 

orders inChile 

The Utaniko case 

In the Utaniko 1 case, the claimants were two companies in China that brought claims in 

England against their respective carriers for delivery of cargo in Chile without production 

of bills of lading. The cargo was shipped under Liner bills of lading, where the claimants 

were named as shippers and the buyers as the notified party. The goods were consigned to 

named Chilean banks, who were instructed to act as correspondents to claimants’ bankers 

and obtain payment from the buyer in return for the bills of lading. The bills of lading 

also contained, among other things, a clause stating that “If the carrier is obliged to hand 

over the goods to the custody of a customs, port or other authority such a hand over shall 

constitute due delivery to the merchant under the bill of lading”. 

In accordance with the customs laws of Chile, and as the goods had not been cleared, 

the containers had to be placed in a licensed customs warehouse on 

arrival. When the customs had cleared the goods, the containers were 

released to the buyer’s customs agent without the presentation of the 

original bills of lading and subsequently delivered to the buyers. The 

bills of lading remained with the bank and the claimants never received 

full payment for the goods. 

Three interesting issues 

Deciding in favour of the unpaid shippers, the court brought up three interesting issues: 

1. If, once the required delivery of the goods to the licensed customs warehouse had 

been done, it brought the carrier’s obligations and the contract of carriage to an end 

2. Whether the express terms of the bills of lading exempted the carrier from liability 

3. Could the owner (carrier) have contracted with the warehouse operator, thus requiring 

him to release the goods only on presentation of the original bills of lading 

The court’s answer to the first question was that the carrier had not fulfilled his obligation 

under the contract to deliver the cargo. The delivery to the warehouse brought the goods 

within the jurisdiction of the customs, not into the physical possession of the customs 

authority. The court also found that there was no relevant qualification to the usual delivery 

obligation by reason of the clause in the bill of lading. Hence, it did not protect the 

carrier against the delivery of cargo without production of the bills of lading. Further, and 

answering the third question, the Court concluded that the defendants could have entered 

into contracts with the customs warehouse operators, or container operators (commonly 

the carrier’s agent) on terms that required them to deliver only against the presentation of 

an original bill of lading. 

1 

Utaniko LTD. V. P&O Nedlloyd B.V. (2002) 2Lloyd’s 

Rep 182 

Lesson to be learned 

The lesson to be learned is that the procedure of handing over the cargo to the customs 

warehouse does not discharge the carrier’s usual obligation to deliver the goods to the 

rightful owner, even if the procedure is prescribed by law. Instead, carriers can, and must 

ensure that the contract with the instructions to the customs warehouse operators clearly 

requires them to deliver only against presentation of original bills of lading. Furthermore, 

a carrier’s contract with customs warehouses should contain clear provisions for recourse 

actions, in case the instructions are not complied with. The latter is especially important, 

as claims arising out of delivery without the production of an original bill of lading are 

excluded from Protection & Indemnity (P&I) cover. 

If you need assistance in issuing such instructions, or have any other questions, please 

contact the Club for further guidance. 

 

22


The Scandinavian Shipping Gazette 

REVIEW 

September 11 th had little 

effect on shipping 

Events in the US on September 11 th last year had 

short-term and somewhat moderate effects on shipping 

in general, according to a new report commissioned 

by the Norwegian Shipowners’ Association. 

The report is entitled ‘Shipping in the aftermath of 

September 11 th : Markets, politics, preparedness and 

war insurance’. One of the conclusions is that freight 

rates and freight volumes were little affected by the 

terror attack on September 11 th . The only real effect 

was noticed in insurance premiums, which experienced 

a sharp increase. The leader of the project, 

Mr. Sven Ullring, says that ships are potential targets 

for terrorists, but not more so after September 11 th . 

The insurance community 

indifferent to substandard 

shipping 

The president of the classification society American 

Bureau of Shipping, Mr Bob Somerville, gave an 

almost stunned audience at the International Union 

of Marine Underwriter’s conference in New York a 

real broadside. He accused the insurance companies 

of not participating in the work for safer shipping. 

He criticised most of the parties in the safety 

chain, including the classification societies, but emphasised 

the failure of the insurance industry. “We 

had hoped that you either would raise the premium 

levels for substandard owners or refuse to cover 

their vessels. We have hoped in vain. You are invisible 

both as companies and as an industry when you 

could be a major force in the fight against substandard 

owners and rustbuckets. While the fight goes on, 

you hide behind your desks and tries to do business 

any type of business with ruining premiums”, said 

Sommerville to a somewhat surprised audience. 

VLCC transportation 

Russian plans to start VLCC shipments of oil from 

a new terminal in Murmansk in a few years time 

have stirred up a fuss in Norway. The Norwegian 

environment minister, Mr. Børge Brenne, has already 

demanded comprehensive contingency plans to 

deal with a possible major oil spill from tankers sailing 

around the North Cape. Plans are afoot to get 

exports going from Murmansk as soon as physically 

possible and several major Russian oil companies 

are committed to the upgrading of existing terminal 

facilities. 

Klaipeda Port 

joins Green Award 

Klaipeda Port is the first port in the Baltic States 

to join the Green Award program. Green Award is 

an independent certification system for extra environmentally 

friendly and safe ships. So far, 160 

ships have been certified. These ships represent 11 

per cent of the world’s tanker fleet or 25 per cent 

of all waterborne oil transportation. In 2001, more 

than 600 tankers called at Klaipeda. A 20,000 DWT 

tanker pays on average about EUR 20,000 in port 

dues and now, Green Award ships will pay five per 

cent lower port dues in Klaipeda. 

BIMCO in security 

talks in USA 

A delegation from BIMCO has in USA, on behalf of 

the global shipping community, discussed American 

security initiatives. Although declaring full support 

for increased security, the message was that new 

initiatives must not disrupt normal trade and shipping. 

During its visit, the delegation has had talks 

with authorities, state departments and senate and 

congress committees. One important item was the 

categorisation of ordinary seafarers as a potential 

security risk. According to BIMCO, the crew is often 

in the best position to detect security weaknesses 

and to report suspicious activities. Therefore, crews 

should be viewed as assets and not as potential 

threats. The delegation also emphasised the importance 

of the United States accepting an eventual ILO 

standard for crew identity cards. BIMCO also feels 

that this must be supplemented by a similar card for 

port workers and officials making it possible for a 

ship’s master to quickly identify bona-fide, and nonbona-fide, 

visitors on the ship. The high costs for 

security guards were also discussed. The authorities 

place those on board but the bill goes to the shipowner. 

The cost is sometimes higher than the daily 

earnings for the ship. The reason for putting armed 

guards on the ships is to prevent terrorist attacks 

against USA, and BIMCO feels that the cost burden 

should be carried by those who benefit from doing 

so. The U.S. authorities were also critizied for using 

private security guards instead of well-trained staff 

from, for example, the U.S. Coast Guard. BIMCO 

also views the rule stating that cargo manifests have 

to be sent to U.S Customs 24 hours in advance of 

loading with some scepticism. All in all, the BIMCO 

delegation believes that the input they have given 

during the week in USA will prove invaluable in the 

discussions currently taking place. 

No ballast solves 

the ballast problem 

The damage that occurs when microorganisms 

are transported with ballast water and are introduced 

into new environments is estimated to cost 

USD 138 billion per annum. This problem has been 

identified relatively recently and new techniques for 

cleaning the ballast water are being developed. Another 

solution, at least for some ship types, could be 

to sail without ballast. The idea has been launched 

by Anders Ulfvarsson, Professor at the Chalmers 

University of Technology in Göteborg, Sweden. A 

new VLCC design concept was recently presented 

at a seminar held in Göteborg. The design has a 

sharp V bottom instead of the traditional flat bottom 

and no ballast tanks. Apart from solving the ballast 

problem, the new design also reduces the friction 

area and thus bunker consumption by approximately 

20 per cent. The draught will, however, increase in 

a fully laden condition. Anders Ulfvarsson together 

with the shipping company Stena AB has filed a patent 

application. 

Company executives fined by the 

millions for oily discharges at sea 

One master and two chief engineers on two South 

Korean reefer vessels were arrested in February this 

year for illegal discharge of sludge off Alaska. They 

had by-passed the oily water separator, falsified the 

oil book, given false statements and forced other 

crew members to also give false statements to the 

authorities. All three were sentenced to six to eight 

months’ imprisonment. The criminal acts have been 

known and approved high up in the company management 

and three company executives, one also 

being a board member, have now pleaded guilty. 

They have also accepted a USD five million fine. If 

the court approves the deal, they will also face five 

years on probation. Environmental plans are to be 

developed and the court will supervise that they are 

conformed to. The company also has to deposit 

USD 500,000 to cover initial costs for the environmental 

plans. According to the American Justice 

Department, this is the first time that executives in 

the shore-based organisation have been held accountable 

for criminal discharges at sea. 

Increased container 

inspections in USA 

International liner operators have critizied parts of 

the U.S security initiatives concerning container traffic. 

According to the Sea Cargo Targeting Initiative, 

high-risk containers are to be identified and isolated. 

As a consequence, a ship could be forced to unload 

all containers blocking a high-risk container. The 

U.S. Customs will not say what information sources 

they will use to brand a container as high risk. The 

authorities are however aware that the initiative 

may cause delays in the cargo flow: Ports and the 

country¹s security is our priority, says the Customs 

spokesman Mr Kevin Bell to Lloyd’s List. In his 

opinion, the next step in improving security will be 

a positive step. A general check of cargo manifests 

followed by an automatic screening of the cargo will 

result in a unified, predictable and effective handling 

of the cargo flows. Increased inspection of containers 

have full support from the port workers on the 

U.S. West Coast, where a difficult collective bargaining 

is carried out under a strike threat. The port 

workers want the right to do the inspections as a last 

line of defence against terrorism. According to their 

unions, large international liner operators like Maersk 

Sealand doesn’t bother about port security. 

Articles provided by The Scandinavian Shipping Gazette www.shipgaz.com 

23

Underwriting / Club Information 

The first – but definitely 


not the last Brokers’day 

For the first time, The Swedish Club invited 

brokers for a Brokers’ Day. The intention 

was to strengthen the relationship between 

brokers and the Club and build a common 

platform for existing and future business opportunities. 

The Brokers’ Day actually turned into two 

days. Focusing on the value chain, the refinement 

of the marine product, the process was 

described from marketing, underwriting and 

risk assessment to claims handling, to adjusting 

and the important feedback, on the Loss 

Prevention programme. 

The pre-underwriting process 

To streamline and enhance the co-operation 

between the broker and the Club it is important 

that the Club’s message is clearly defined and 

carried by the broker when he meets his clients. 

From the Club’s point of view, it is more important 

to spend more time in this process than is 

traditionally done in the market. Modern 

underwriting includes further risk assessment 

with more information being processed. The 

build-up of the relationship with the new client 

or member, as we would like to call them, 

is extremely important. With the intention of 

creating a strategic alliance that will last several 

years, the pre-underwriting process takes more 

time and it is more carefully modelled. Since 

the majority of our new business is through 

brokers, the description of this process must be 

communicated and understood. 

According to the goals and objectives, The 

Swedish Club is to: 

• Maintain and attract members of highest 

quality... 

• Continue a controlled growth... 

As can be seen, the objectives do not push the 

Club for a rally in the market to increase in 

Claes Lindh 

DIRECTOR 



quantity, they clearly point out the quality 

feature and focus on controlled growth. We 

realise brokers may sometimes have different 

objectives and other goals. Thus we discuss 

how to co-operate and to find business that is 

of mutual benefit. 

The familiarisation process 

We have a number of examples where we have 

followed this process. It starts with initial investigation, 

followed up by visits and discussions. 

Later in the process, should there be a clear interest, 

we meet on more occasions and have our 

staff surveyors meeting owners/managers to 

discuss the operation, management and maintenance 

of the fleet. We carry out on board visits, 

pre-entry surveys, discuss claims handling 

and adjustment and how and where we can assist 

with our Loss Prevention programme. We 

call this the familiarisation process 

Having passed this process, which understandably 

requires a good time frame, we may 

be ready to offer terms of entry should both parties 

wish to do so. Please note that both parties 

have to agree to continue to the final stage of 

entering into the Club. Without this consensus 

the future strategic alliance will not work out 

properly. There are a number of shipowners 

that seek other insurance alternatives, and correctly 

so, they merely do not fit with the mutual 

system or do not require the service system we 

have built up and are keen to deliver. Thus the 

familiarisation process as described is even 

more important than at first glance. 

When the familiarisation process has been 

conducted, to the satisfaction of brokers, owners, 

managers and us at the Club, the fleet has 

been entered and the covers initiated, this will 

often lead to a long fruitful relationship for all 

parties. We have done it, we have seen it and we 

have a number of good examples in our portfolio 

today. If you are an owner or a manager, ask 

your broker or ask any one of our core members, 

they will tell you. 

The claims service process 

The claims service process is of course much 

more important in the case of an emergency. 

The morning of the second day was devoted 

to the unique claims service concept that beats 

any competition in the market. We will not 

dwell on this concept in this article, this whole 

newsletter is part of the additional service we 

provide in minimising claims and preventing 

them from happening. For brokers, shipowners 

and managers, this service package, including 

easily shared experience and know-how, is state 

of the art today, free of charge. It is the ultimate 

refinement of the marine insurance product. 

The Brokers’ Day was thus successful in 

delivering the refined product, the marine 

insurance package, in The Swedish Club 

way. Amongst our readers there may be a few 

brokers asking why they were not invited. This 

was our very first Brokers’ Day and invitations 

were limited to brokers nearby and we will now 

evaluate this seminar. We may decide to make it 

an annual event, in Sweden or somewhere else 

in the world. Don’t feel neglected, this was just 

the beginning and the message is not limited to 

those who attended. 

 

Hong Kong Seminar October 8 th 2002 

Audience at the Hong Kong seminar. 

The Club hosted a seminar in Hong Kong together with 

the Hong Kong Shipowners Association on October 8 th 

2002. About 80 participants listened to Tord Nilsson, Göran 

Rudelius, Ruizong Wang and Helena Wallerius Dahlsten 

talk about 

• Projections on the marine insurance markets – what to 

expect from the future 

• War insurance clauses in charterparties – who pays 

• Salvage – a case study 

• Collisions – a case study illustrating the benefits of the 

all-in-one insurance 

• Fines – should the P&I insurance pick up the bill 

24


Club Information 

Club Evening in Göteborg and Stockholm 

Interested audience at the Club evening in Göteborg… 

Mr Harry Robertsson. 

During the club evenings in Göteborg and 

Stockholm (October 2 nd and 3 rd ) Mr Harry 

Robertsson (Technical Director, Stena Rederi 

AB) held a presentation about some high-profile 

projects. 

Stena has designed tankers to make oil 

transportation more efficient. The Stena V- 

max (VLCC) and C-max (Products/LPG) 

tankers are now in full operation. Both vessel 

types have very shallow draft and high cargo 

intake and optimised safety manoeuvrability. 

Stena has also designed high-speed ferries 

(HSS), about 40 knots, built in aluminium, 

powered by waterjets/gas turbines. 

…and in Stockholm. 

The Swedish Club Gold Medal 

At the gala dinner on June 12 th 2002 

celebrating The Swedish Club’s 130-year 

jubilee, I had the pleasure of presenting a 

rather unique gold medal to the Club. 

The background is the following: In 

1923 when the Club celebrated its first fifty 

successful years of business, it was decided 

to issue a special medal. The medal was designed 

by the well-known Swedish sculptor, 

Tore Strindberg, a relative of Sweden’s most 

famous writer, August Strindberg. The 

medal was moulded in four copies of 23 

carat gold and in 167 silver copies. 

We know the names of two of the receivers 

of the gold medal, Dan Broström and 

H.J.H. Wilson. Dan Broström, chairman 

of The Swedish Club, was no doubt one of 

the pillars of the Swedish shipping industry 

of his time. H. Wilson, of Newcastle-on- 

Tyne, was The Swedish Club’s representative 

in the United Kingdom for 20 years. 

Wilson was succeeded by his son Henry 

Wilson, who moved the office to London 

and continued to represent the Club until 

he retired in 1970. He was the third and 

last generation in the family to represent the 

Club in the U.K. since 1890! 

It is interesting to note that until the 

1930s the Club’s U.K. representative had 

his residence in the north of England. This 

was due to the fact that Swedish shipping 

at the time traded mostly in the Baltic and 

North Sea area. I worked with Henry Wilson 

for ten years. He was devoted to his job 

and was a much-liked person among the 

Club’s staff members in Göteborg. When 

he retired he gave me his father’s medal as 

a token of appreciation. I refused to accept 

it but he insisted. 

After 30 years in my position, I think 

it is time to return the golden medal to 

Frans and The Swedish Club. As I said in 

my speech there is, however, one condition 

with the gift – the medal must remain in 

the custody of The Swedish Club as long 

as the Club exists. 

As a postscript, let me add that Henry 

Wilson was awarded The Swedish Club 

medal of 1962. But the history of that 

medal is another story, if I may quote 

Rudyard Kipling. 

Per Erik Hedborg 

Former Managing Director of The Swedish Club 

Per Erik Hedborg (to the right) returning The Swedish 

Club Gold Medal to Frans Malmros. 

PHOTO COURTESY OF TRADEWINDS 

25

Club Information 


STAFF NEWS 

Mr Hans 

Viig, 

Senior Vice 

President of 

Det Norske 

Veritas 

Breakfast seminar: “Safe and efficient 

bulk carriers for the future” 

On September 10 th , Mr Hans Viig, Senior Vice President of Det 

Norske Veritas, was invited to the Club’s head office in Göteborg to 

talk about the recent developments in bulk carrier safety. Representatives 

from owners and brokers with an interest in bulk carriers in 

the Göteborg area gathered with Club staff for a couple of hours in 

the morning to learn more and discuss this important subject. The 

fact that serious bulk carrier casualties continue to occur, despite 

previous efforts over the years by IMO, maritime authorities and 

the classification societies at improving bulk carrier safety, was addressed. 

According to Mr Viig, the prevention of accidental ingress 

of water is essential in safeguarding bulk carriers and their crew. 

For further information regarding this seminar, please contact 

Anna-Karin Lönnstad, Loss Prevention Co-ordinator, 

e-mail: anna-karin.lonnstad@swedishclub.com. 

Jakob Osvald joined the Club in September 2002, to 

assume the position of Assistant Underwriter within the 

Underwriting & Marketing Department. As well as giving 

support to the Club’s underwriters, he will also handle 

backoffice matters within the department. Jakob has an 

LL.M. from Lund University and moved to the Club from 

Svenska Handelsbanken. 

Pernilla Ljunggren (Claims Executive) joined The Swedish Club’s office in 

Greece in September 2002 for a nine-month assignment. 

She transferred from the Club’s Göteborg head office and 

focuses on personal injury and cargo-related P&I cases. 

Örjan Karlsson (Claims Executive) returned to the head 

office in Göteborg in August 2002 after 

assignment to our Hong Kong office. 

Örjan specialises in casualty response, 

predominantly collision and salvage. 

Peter Hedin joined The Swedish Club IT Department 

on October 14 th 2002 and will work 

as Network Engineer. Peter previously 

worked for RKS and holds a CAN/MCP, 

Novell and Microsoft Certified Professional degree. 

Jens Huzell has resigned from the Club’s IT 

Department after two years as Network Engineer. 

We wish him all success in his future career. 

PUBLIC HOLIDAYS 

when The Swedish Club offices are closed 

HEAD OFFICE 

SWEDEN December 24 th 2002 Christmas Eve 

Emergency tel December 25 th 2002 Christmas Day 

+46 31 151 328 December 26 th 2002 Boxing Day 

December 31 st 2002 

New Year’s Eve 

January 1 st 2003 

New Year’s Day 

January 6 th 2003 

Epiphany 

GREECE December 25 th 2002 Christmas Day 

Emergency tel December 26 th 2002 Boxing Day 

+30 944 530 856 January 1 st 2003 New Year’s Day 


Epiphany 

March 10 th 2003 

Ash Monday 

March 25 th 2003 

Annunciation 

HONG KONG December 25 th 2002 Christmas Day 

Emergency tel December 26 th 2002 Boxing Day 

+ 852 2598 6464 January 1 st 2003 Western New Year 

January 31s t - February 3 rd 2003 Chinese New Year 

JAPAN 

24 hour tel December 23 rd 2002 The Emperor’s Birthday 

+81 3 5442 5466 December 30 th 2002 Bank Holiday 

January 1 st -3 rd 2003 

New Year Holidays 


Coming of Age Day 

February 11 th 2003 

National foundation day 

March 21 st 2003 

Vernal Equinox Day 

UNITED KINGDOM December 25 th 2002 Christmas Day 

Emergency tel December 26 th 2002 Christmas Holiday 

+44 20 7397 4999 January 1 st 2003 New Year’s Day 

CLUB DIARY 

December 10 th 2002 

Winter dinner for members and associates in Piraeus 


Annual Glögg Party for members and associates 

in Hong Kong 


Christmas dinner for members and associates on Donsö 

April 10 th 2003 

Board Meeting in Istanbul 

May 5 th -9 th 2003 

The Swedish Club Academy: 

Marine Insurance Course in Göteborg 

June 11 th 2003 

Board Meeting in Stockholm 

June 12 th 2003 

Annual General Meeting in Stockholm 

26


Index - The Swedish Club Letter 2002 

Subject Title Author Issue 

Annual General Meeting Global warming taken seriously The Swedish Club 2-2002 

Annual General Meeting New concepts in cruise shipping The Swedish Club 2-2002 

Annual General Meeting Making plans for tanker newbuildings The Swedish Club 2-2002 

Annual General Meeting Funky business in Dr Nordström’s New Wave New World The Swedish Club 2-2002 

Archive Our archive: provider of lessons from the past The Swedish Club 3-2002 

Cargo Delivery orders in Chile Daniel Eriksson, The Swedish Club 3-2002 

Casualty Information Heavy weather damage - near casualty Det Norske Veritas, DNV 1-2002 

Club Information The Publications Group The Swedish Club 2-2002 

Club Information The first - but definitely not the last Brokers’ Day The Swedish Club 3-2002 

Club Information The Swedish Club Gold Medal Per-Erik Hedborg 3-2002 

Collision Star Cruises puts resource management into practice Martin Hernqvist, The Swedish Club 3-2002 

Collision Collisions cause costly claims Martin Hernqvist, The Swedish Club 3-2002 

Collision Human error - a common cause in collisions Tony Schröder, The Swedish Club 3-2002 

Collision Andrea Doria - The files highlight human error as a major contributing factor The Swedish Club 3-2002 

Crew Update on amended POEA contract Ruben T. Del Rosario, Del Rosario & Del Rosario 1-2002 

Crew Significant changes in the NLRC rules of procedure Ruben T. Del Rosario, Del Rosario & Del Rosario 2-2002 

Crew Work-related death, injury and illness under the amended POEA contract Ruben T. Del Rosario, Del Rosario & Del Rosario 3-2002 

Environment Environmental work - the Wallenius way Berit Blomqvist, Maritime Forum 1-2002 

Environment Five steps towards certification Berit Blomqvist, Maritime Forum 1-2002 

Environment What is the ISO 14001 environmental management standard Mats Lindau, The Swedish Club 1-2002 

Environment Any ship carrying ballast water is a potential invasion source Daniel Eriksson, The Swedish Club 1-2002 

Environment A novel approach to safe carriage of oil The Swedish Club 1-2002 

Environment Oil spill dispersants - myths & mysteries unravelled Dr Karen Purnell, ITOPF 1-2002 

Environment Natural resource damages in the U.S. - 21st century edition Gary S. Mauseth, Polaris Applied Sciences, Inc. 1-2002 

Finance 2001 - a disappointing year in many respects Jan Rydenfelt, The Swedish Club 2-2002 

Forces of Nature The rough weather defence Fredrik Olsson, The Swedish Club 2-2002 

Forces of Nature The forces of nature Peter Stålberg, The Swedish Club 2-2002 

Freight Demurrage & Defence The LMAA Terms & Small Claims Procedure 2002 

- A giant step for maritimekind Tejpal Dhesi, The Swedish Club U.K. 1-2002 

Freight Demurrage & Defence The importance of a clear law and jurisdiction clause Anders Leissner, The Swedish Club U.K. 1-2002 

Freight Demurrage & Defence Berth or port charterparty Voyage charterparties - commencement of laytime Charlotte Lacey, The Swedish Club U.K. 2-2002 

Freight Demurrage & Defence U.S. security regulations - freedom has its costs Ken Littlejohn, The Swedish Club U.K. 3-2002 

ISM Reasons for optimISM Martin Hernqvist, The Swedish Club 2-2002 

ISM Reducing insurance claims through effective implementation of the ISM Code Martin Hernqvist, The Swedish Club 3-2002 

Law Forum Selection Clause Ken Bright, The Swedish Club U.K. 3-2002 

Leading Article Beyond the magic date - what next Frans Malmros, The Swedish Club 1-2002 

Leading Article Where do we come in the minds of shipowners and managers Frans Malmros, The Swedish Club 2-2002 

Leading Article Now, if ever is the time to practise what one preaches Frans Malmros, The Swedish Club 3-2002 

Legislation Alaska contingency plan requirements for nontank vessels Douglas R. Davis, Keesal, Young & Logan 1-2002 

Market ‘The Market’ alone can not explain increased premiums Claes Lindh, The Swedish Club 1-2002 

Market The state of the market Claes Lindh, The Swedish Club 3-2002 

Personal Injury 

House of Lords overturns Court of Appeal and finds against 

defendants in asbestos appeals John Caddies, Hill Taylor Dickinson 2-2002 

Personal Injury Asbestos update - Mesothelioma John Caddies, Hill Taylor Dickinson 3-2002 

Salvage Can we trust a verbal agreement Lars Landelius, The Swedish Club 1-2002 

Stowaways Stowaways in the U.S. from a loss prevention perspective Pernilla Ljunggren, The Swedish Club 1-2002 

Stowaways Stowaways with destination Spain Cleopatra Georgantzis, The Swedish Club 2-2002 

The Scandinavian Shipping Gazette Review The Scandinavian Shipping Gazette 3-2002 

The Swedish Club Academy BRM: WMTC Moscow - a new SAS-BRM licensee Anna-Karin Lönnstad, The Swedish Club 1-2002 

The Swedish Club Academy BRM: Wallem launches BRM training in Karachi Anna-Karin Lönnstad, The Swedish Club 2-2002 

The Swedish Club Academy BRM: New BRM licences to Australia and China Anna-Karin Lönnstad, The Swedish Club 3-2002 

The Swedish Club Academy 

Marine Insurance Course: Insurance course delegates share in The Swedish 

Club’s expertise The Swedish Club 2-2002 

The Swedish Club History 130-year anniversary The Swedish Club 1-2002 

Underwriting Underwriting - The Swedish Club concept Claes Lindh, The Swedish Club 3-2002 

27

The Swedish Club wishes 

all members, friends and colleagues a 

Merry Christmas 

and a 

Happy New Year! 

As usual we are making a donation to The Swedish Sea Rescue Society 

instead of sending individual greetings cards. 

The Swedish Club Offices 

HEAD OFFICE SWEDEN 

Gullbergs Strandgata 6, P.O. Box 171 

SE-401 22 Göteborg, Sweden 

Tel +46 31 638 400, Fax +46 31 156 711 

E-mail swedish.club@swedishclub.com 

Emergency tel +46 31 151 328 

GREECE 

5-7, Agiou Nicolaou 

GR-185 37 Piraeus, Greece 

Tel +30 210 452 2397, Fax +30 210 452 5957 

E-mail mail.piraeus@swedishclub.com 

Emergency tel +30 944 530 856 

HONG KONG 

Suite 6306, Central Plaza 

18 Harbour Road, Wanchai, Hong Kong 

Tel +852 2598 6238, Fax +852 2845 9203 

E-mail mail.hongkong@swedishclub.com 

Emergency tel +852 2598 6464 

www.swedishclub.com 

JAPAN 

Suzuyo Hamamatsucho Building 5F. 

2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, Japan 

Tel +81 3 5442 5466 (24 hour tel), Fax +81 3 5442 5922 

E-mail mail.tokyo@swedishclub.com 

UNITED KINGDOM 

100 Fenchurch Street 

London EC3M 5JD, United Kingdom 

Tel +44 20 7397 4950, Fax +44 20 7397 4951 

E-mail mail.london@swedishclub.com 

Emergency tel +44 20 7397 4999 

28

SCL O4 - The Swedish Club

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