Focus on CREW CLAIMS - The Swedish Club

THE SWEDISH CLUB LETTERNO. 2 – 2001JULY - NOVEMBER<strong>Focus</strong> on CREWCLAIMSpage 18-25Confronting the Terminal Seriousness at the AGMpage 10-11

PHOTO: HANS KONGBÄCK, NATURFOTOGRAFERNA.THE SWEDISH CLUB LETTER 2–2001No. 2 – 2001July – NovemberLeading Article 3 Emphasising the human qualities of serviceMember Portrait 4-5 Meet Folke PatrikssonAGM 6 2000: An excellent year for the Club6 The Swedish Club Board Members7 Christer Olsson – The Swedish Club’s new Chairman8 Pictures from the Informal Dinner9 Fulvia Linari – The first woman ever to be guest of honour10-11 Confronting the Terminal Seriousness12 Pictures from the AGM Dinner13-15 Full social programmePersonal Injury 16 Enclosed spaces can kill17 In short/News from Piraeus/StowawaysCrew 18 Crew liability update – United States19 Filipino crew claims in Panama – latest developments20-21 Hong Kong Employees’ Compensation – an update22-23 Maritime criminal prosecutions– UK and international jurisdiction24-25 Amended POEA contract – an updateClub Information 24 News from Hong Kong25 Basic Facts26 Accounts 2000: A good result in a difficult market26 News from TokyoSalvage 27 Two new SCOPIC salvage casesClub Information 28 New moves in London and Piraeus28 News from London2 29-30 Seminar30 Staff News31 Club Diary31 Public HolidaysInternet 31 What’s New?Cover Photo: Millesviksarchipelago, Värmland.The Swedish Club is a mutual marine insurance company – owned and controlled by its members. The Club writes Hull & Machinery, Warrisks, 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 necessarilythose of The Swedish Club. Furthermore, the Club does not accept responsibility for errors or omissions or their consequences.Readers’ comments and views are welcome by phone, fax or e-mail.Editorial Advisory Board: Martin Hernqvist, Örjan Karlsson,Anders Leissner, Claes Lindh, Petra Setterberg, Helena Wallerius Dahlsten.Production co-ordinator: Susanne Blomstrand.PR-consultant: TRS Public Relations Ltd.Layout: Eliasson Information, Göteborg.Printed in Sweden by PR Offset, Mölndal.The Swedish ClubP.O. Box 171SE-401 22 Göteborg, SwedenTel +46 31 638 400Fax +46 31 156 711E-mail: swedish.club@swedishclub.comwww.swedishclub.com©The Swedish Club. Articles or extracts may be quoted provided that The Swedish Club is credited as the source.2

THE SWEDISH CLUB LETTER 2–2001Leading ArticleEmphasising the humanqualities of serviceI have often thought that organisations have much in commonwith people, in that they have distinct personalities. Itis possible, for example, for the individual and the organisationto be both professional, efficient and, at the sametime, unpopular. This is because efficiency, alone, cannotcompensate for a lack of human warmth in daily life (andwe spend much of our daily life in the office).The Swedish Club has always fought for service excellence.This choice of verb is quite deliberate, as the maintenanceof high service standards is a constant battle. I amconvinced that our success in this area is due, in no smallmeasure, to an emphasis on the human aspects of service.In the modern, electronic commercial environment, ofcourse, IT makes a growing contribution to the delivery ofservice. There are several aspects to the liberalising powerof IT and, in particular, Web-based services. Perhaps themost significant single factor is the ability to empower thecustomer (or, in the Club’s case, the member).During the first quarter of this year, the SCOL (SwedishClub OnLine) extranet was commissioned. As a result,members now have direct access to their insurance andclaims records. More functions – including risk management‘benchmarking’– have been added in recent weeks.SCOL adds a new, electronic dimension to service. Theconvenience of direct access, round-the-clock, must increaseefficiency. There are also exciting possibilities for thesharing of claims experience – an appropriate goal for amutual insurer.At the same time, however, we must not neglect the humandimension of service. With this in mind, we have established,for example, The Swedish Club Academy and introducedits first learning programme – the Marine InsuranceCourse.The Club is an enthusiastic supporter of innovative traininginitiatives. Another example is the SAS-BRM (BridgeResource Management) programme. We licence three nauticaltraining centres for the delivery of SAS-BRM programmesand we expect to issue more licences in due course.Our own Training Centre in Greece relocates to newpremises later this year. This will permit the expansion ofSAS-BRM and other training services for our members inGreece.Close relationships with members remain of major importanceto the Club and, in recent weeks, we were pleased towelcome new members to The Swedish Club HellenicCommittee. We also continue to reinforce the level of directservice in Greece – with Fredrik Kruse bringing his extensiveP&I experience to this office following his movefrom London.In London, Ken Bright – another P&I specialist with vastexperience – is now General Manager at our new, largeroffices in Fenchurch Street. London has been reinforcedover the past two years, with a larger team and an expandedrole.The capacity to provide direct service is also importantin the Far East. Asian tonnage makes a significant contributionto the Club’s Hull and P&I portfolios. There is now amuch stronger emphasis on value-added service. As inother world regions, comprehensive direct service and theconvenience of SCOL provide a strong platform forgrowth.The ultimate test of service excellence, of course, is theClub’s response in a major casualty situation. The Club isan ‘All-in-One’ insurance provider and has invested heavilyin the capability to mount a fully integrated Hull andP&I claims handling response. We want to continue to shareour expertise in this area, by participating in members’emergency drills and providing advice and guidance on theinsurance aspects of casualty response.I have no doubt that quality of service has real value. This isdemonstrated by the loyalty shown by our membersduring the unprecedented market downswing of recentyears. Loyalty has made a great contribution to the growthof The Swedish Club. We have achieved an average annualgrowth rate of 7.5 per cent over the past decade. It is satisfyingto be part of an international community with theimagination to adopt IT efficiency and endorse the traditionalhuman values of good service.Frans MalmrosMANAGING DIRECTOR3

Member PortraitTHE SWEDISH CLUB LETTER 2–2001of tradition are united with modern craftsmanshipand high-tech vessels and this is a combination thatfits well with Folke’s own company philosophy. Takingcare of the family’s shipowning tradition, whileat the same time being open to changes, forms thefoundation on which B&N stands.“Tradition is the soul of the company. You cannotbe rootless, you have to feel secure to be able tosucceed. But you should only bring with you whatis good and leave the rest behind. When the day isover, it is lost forever and to go on harping aboutthings being better before is more a sign of anxietythan of strength,” he says.Operates more than 50 vesselsMaybe it is Folke’s respectful yet unsentimental attitudeto the present and the past that has sown theseed of his success. Today, B&N has 35 wholly or partly owned vessels inits fleet and before the end of next year a further five newbuildings aregoing to be delivered. Bulk makes up the core, but there are also a numberof Ro Ro vessels and, furthermore, three icebreakers that are operatedthrough a contract with the Swedish National Administration of Shippingand Navigation. Last year, B&N took over the operations of ACL’sfleet (Atlantic Container Line), thereby linking to the group the five largestcombined Ro Ro and container ships in the world. In june this yeara major stake in Gorthons was bought from Leif Hoegh. With its externalmanagement assignments included, B&N operates more than 50 vessels.“A healthy company has automatic growth, otherwise it stagnates.Look at AP Möller, for instance. A shipping company should not reallybe able to survive that long but they have succeeded by maintaininggood growth all the time,” says Folke.Speaking the same languageAnother prominent characteristic in Folke’s way of doing business is thathe sets great store by sound seamanship. Several of his colleagues startedtheir careers as ordinary seamen and he himself was a master for manyyears before he went ashore to run the shipping company. There aremany benefits using the competence of seamen in the onshore company,he points out.“In the build-up stage in particular it was a great help to speak the samelanguage as the lads on board. We understood each other and we still do.There is hardly any us-and-them mentality here.”Everyday is a new challengeAlongside his involvement in his own company Folke has, over the lastyears, become one of the country’s foremost debaters in the area of maritimeissues and he is involved in a host of issues at different levels. AsFolke Patriksson in briefPosition: Managing Director, B&NNordsjöfraktAge: 60Lives in: House in SkärhamnFamily: Married to Gunbritt for 37years, three daughters and fivegrandchildren, one on the wayFavourite pastime: Socialisingwith family and grandchildrenDislikes: DishonestyOn his bedside table: Book byJohn GrishamMeet Folke Patriksson■ ■ If you have a ‘nothing is impossible’ attitude you canreally go far. Folke Patriksson, shipowner and deputychairman of the board of The Swedish Club is living proofof that. Out in the Swedish archipelago he has built hislarge company that bears the traits of tradition and newLinda SundgrenFREELANCE JOURNALISTArticle Point, Göteborgearly as 1977 he participated in his first shipping policy surveyand he has been interested in the education of merchantsailors for many years. And it seems as if this involvementshows no signs of abating.“My strength is that I see every day as a new challengethinking.Gentle rocks, flashing waves and the odd red summer cottage dottedaround. Beyond the skerries, the open sea. The view from Folke’s officeis quite something. Or, as he puts it, like a painting in which the theme isalways changing.Centuries of traditionWith one’s field of vision resting on the archipelago of Bohuslän it iseasy to see why Folke has chosen to locate his maritime empire, B&NNordsjöfrakt, right here in his birth town of Skärhamn, about 60 kilometresnorth of Göteborg. The beautiful surroundings are clearly a bonus.Furthermore, the company is located in Sweden’snumber one maritime municipality. Here, centuriesand that I see opportunities in all problems. Maybe I am not normal inthat respect. I mean, things should not really be like that when one hasturned sixty, at least not when it comes to work,” he says with a broadsmile. “But of course, I do have my weak points too,” he continues.“When I have a good idea I do tend to be a little keen and have difficultyin waiting for the others to get up to speed.”Proud to participateAnother task Folke takes very seriously is being the deputy chairman ofthe board of The Swedish Club. He became a member at the end of the1970’s and after just a couple of years he was voted on to the board. Forhim, the Club represents values he cherishes, such asprofessionalism and good quality. He is proud to participatein an association that has safeguarded soundvalues despite the fact that it is operating in a marketwhere premium prices are often put ahead of quality.Successful internationalisation was a necessary stepin the development of the Club. Yet at the sametime, he feels that the Club should continue to concentrateas it did before, on respectable members.“The Swedish Club is a crown jewel that we shouldsafeguard and administrate in a good way. Ourstrength is that we all feel that we are participatingand that not anybody can become a member. There’ssomething quite special about being a part of it.”A celebrity with his feet on the groundWith his open, straightforward manner, Folke makesan impression on almost everyone he meets and hereon his local patch he is a bit of a celebrity. He featuresregularly in the local press and knows most people by their first name.B&N is the largest private company in the area and this has led to closecooperation with the municipality. Yet despite all the success, Folke makesa simple and personable impression that comes across as being thoroughlygenuine. He explains this as being the special mentality, a kind ofJante’s law * (don’t think you’re special) that flourishes out here. This attitudedoes, of course, allow for successes, but only as long as you do notthink you are better than the next man.“I remember one incident in particular at the beginning of the 1980’s. Ihad recently returned from Singapore, which was quite an exotic destinationat that time and I was passing by the older village men jawing away.The old men said they hadn’t seen me for a while, so I told them aboutmy trip. When I was finished, they just said, ‘All right then, so you don’tlike it here at home’. In such an environment, it’s not too difficult to keepyour feet on the ground,” says Folke and grins broadly at this memory.Folke and shipping seem to be an inseparable couple and one could beforgiven for thinking this has always been the case. But in reality he tookquite some time before choosing his professional career. All the same, hehad lived close to the world of shipping from an early age. During hisyounger years most of his parents’ friends were occupied with shipping.He spent the summers at sea with his father, who was master on one ofthe family’s ships.Bought his first ship at 23“In those days there was no system of relief and my father thought Ishould become a teacher as they had the whole summer off. When I did,however, decide to give the maritime profession a chance, he wondered ifI could really manage it and this was with reference to the seasickness Ihad suffered when younger. But things worked out really well and after4

THE SWEDISH CLUB LETTER 2–2001Member PortraitPHOTO: LENA BRYNGELSSON ©“The Swedish Clubis a crown jewel”We must improve the quality of the world merchant fleet, says Folke Patriksson. “We should not have to have more Erika-type accidents to get to gripswith it.”half a year I knew that this was what I wantedto work with.” With his father’s help,Folke, then 23, bought his first ship togetherwith his cousin who was a yearyounger than him. A few years later theyacquired a second vessel, a five-year old1,000 tonner. Things started moving fastafter that. The fleet and the number of ownersincreased and in the end they madeup thirty operating joint owners. The companywas re-structured in to a limited company.“Even if we are no longer a family-owned business, we are still characteristicof one. Such as we always try to take quick decisions. Whoevercomes here with a question should get an answer before he returnshome. You can always change the answer afterwards, but that is somethingquite different. We also have a good spirit here, with plenty oflaughs and no narrow-minded breast-beating. But at the end of the daywe are just people, and that always brings along its share of weaknesses.”Running shipping in Sweden has not always been an easy task, however.Whilst other countries introduced tax relief, Swedish shipping policyhas been slow to change. Since the middle of the 1970’s, the domesticmerchant fleet has shrunk dramatically. This can also be seen at B&N.The company has only seven vessels flying the Swedish flag. Yet thisdismal scenario seems to be about to change. A couple of years ago it waspermitted to employ foreign crew on Swedish vessels and this sloweddown the registration of ships under flags of convenience and, more re-Our strength is that we all feel thatwe are participating and that notanybody can become a member.There’s something quite specialabout being a part of it.cently, the government gave the goaheadfor the introduction of net salariesfor employees on board.“Net salaries are a prerequisite for beingable to run a competitive shippingbusiness under the Swedish flag. Forour country, that is a bit remote and hassuch a long coast, it is very important tohave our own merchant fleet. In addition,I am Swedish so obviously I wantto run shipping in Sweden.”His feelings for what is home grown have nothing to do with patriotismand exaggerated protectionism. Rather, he would like to promotethe importance of a common European shipping policy. Global questionsought to be solved within the IMO, thinks Folke and he considersenvironmental work to be the big challenge of the future.“We have to raise the quality of the world merchant fleet and weshould not have to have more Erika-type accidents to get to grips with it.The shipping business does not have a great deal of power, as the majorityof cargo owners choose the cheapest tonnage and that is why this is aquestion that has to be resolved internationally.”■* Axel Sandemose, a Norwegian sociologist, promulgated a kind of socialcode called the Law of Jante, which went roughly along these lines,“Don’t think you are better than the next man.” Translator’s note.5

Annual General MeetingTHE SWEDISH CLUB LETTER 2–2001PHOTO: LENA BRYNGELSSON ©Managing Director’s report beingpresented by Frans Malmros atthe Annual General Meeting onJune 7th.2000: An excellent year for the Club■ ■ The year 2000 proved to be excellent forThe Swedish Club, despite the persistence ofthe soft insurance market and turbulence onthe financial markets. Managing Director FransMalmros told the Club’s Annual General Meetingthat investment income in 2000 had matchedthat of the preceding year and that someUSD 2 million had been added to free reserves(now totalling a healthy USD 86 million). In response,The Swedish Club’s Board took the decisionto reduce P&I and FD&D minimum releasecalls from 25% to 5% (1999-00) and from25% to 10% (2000-01 and 2001-02).In presenting his report to members, FransMalmros reviewed ten years of steady growth inthe Club’s portfolio, now totalling 1,310 vesselsof 68 million GT (as against 1,184 vessels of63.4 million GT twelve months earlier).■ ■ The membership of The Swedish Club’sBoard has increased, following elections at theClub’s Annual General Meeting in Göteborgon June 7 th .Christer Olsson, Vice-Chairman of WalleniusLines, was elected Chairman of The SwedishClub (see Interview, page 7). Two new BoardMembers were elected: Sun Shengjun, ExecutiveDirector and Vice-President of Sinotrans,and Liu Lianan, Deputy Managing Director ofCosco Bulk Carriers.In addition to the Club’s new Chairman, thefollowing Board Members were re-elected: Pe-ter Chew (Managing Director of IMC Shipping),Vassilis Constantakopoulos (ManagingDirector of Costamare Shipping), JohnOver the past decade, the Hull & Machineryfleet increased from fewer than 400 vessels, ofaround 12 million GT, to 749 vessels of 22 millionGT (as at June 1 st 2001). The average age ofthis fleet is 12.1 years.The P&I fleet now stands at the record levelof 799 vessels of 14.9 million GT. Ten yearsago, this portfolio totalled 404 vessels of 7 millionGT. The average age of the P&I–enteredfleet is 13.5 years.Frans Malmros attributed the Club’s successin the P&I sector to a track record free of supplementarycalls. He said: “Our members lookfor stability and reliability. They can budgettheir insurance costs with confidence.”The trend for FD&D is also encouraging,with vigorous growth over the past four years.The FD&D portfolio now stands at 337 vesselsThe Swedish Club Board MembersCoustas (General Manager of Danaos Shipping),Peter Cowling (General Manager of WallemLtd), Khalid Hashim (Managing Directorof Precious Shipping), Anders Källsson (ManagingDirector of Erik Thun AB), Frans Malm-ros (Managing Director of The Swedish Club),Klaus Oldendorff (Managing Director ofReederei “Nord” Klaus E Oldendorff Ltd), Fol-ke Patriksson (Managing Director of B&NNordsjöfrakt), Carl-Axel Psilander (ExecutiveCommercial Director of Stena Maritime) andJohn Samartzis (Managing Director of JP SamartzisMaritime Enterprises).Revisions to the Club’s Articles of Associationwere adopted during the AGM. Oneof 8.2 million GT, as against 197 vessels of 4.4million GT twelve months earlier.Frans Malmros added: “Our markets havechanged little over the past decade, with around75 per cent in Europe and the balance largelyin Asia. We also have some Hull & Machineryin the United States. The average annualincrease for both Hull and P&I has been 7.5 percent for the past ten years.”He also underlined the Club’s continuedcommitment to the fundamental benefit ofmutuality: the provision of service excellencewithin a non-profit making framework. “We area self-managed Club, with no managementcompany looking for profit. Our raison d’etreis satisfied members.”■change provided for enlargement of the Boardand removed the position of Deputy BoardMember. As a result, the Club’s four DeputyBoard Members became Ordinary Members ofthe Board: Sheikh Salman Humoud S. Al-Sa-bah (Executive Assistant Managing Director,Kuwait Oil Tankers Co.), Lars Höglund (ManagingDirector, Furetank Rederi), Lennart Si-monsson (Managing Director, Broström) andSumate Tanthuwanit (President, Regional ContainerLines). Employees’ representatives onthe Board are Ingrid Andersson and FritiofGranberg.Two Members resigned from the Board: Ro-bert Knutzen (Golden Ocean) and Yu Hongtan(Cosco Bulk Carriers).■6

THE SWEDISH CLUB LETTER 2–2001Annual General MeetingChrister OlssonThe Swedish Club’snew Chairman■ ■ Christer B. Olsson, 55, became Chairman ofThe Swedish Club on June 7 th . He succeeds Carl-Axel Psilander, who has held the position for thepast three years.Christer Olsson was appointed President of WalleniusLines in 1991. He became Vice-Chairman inMay of this year. In addition, he became Chairmanof Wallenius Wilhelmsen Lines on its formation in1999. He has been a Member of The SwedishClub’s Board since 1999 and also serves on theBoards of the Swedish Shipowners’ Association,Stolt Nielsen, B&N and Atlantic Container Line.He is also Chairman of United European Car Carriers.A graduate of Stockholm University, ChristerOlsson’s shipping career began in 1969 when he joinedSwedish American Line. Subsequently, he heldsenior positions within Broström and ACL, beforemoving to Wallenius as Executive Vice-President in1984.Christer Olsson is a family man. He has six children,with ages ranging from three to 27. He lives andworks in Stockholm.■PHOTO: LENA BRYNGELSSON ©■ ■ Christer Olsson, The Swedish Club’s newChairman, says he accepted the position withfeelings of pride andenthusiasm. “The SwedishClub has been familiarto me since theearliest years of my career.I now look forwardplaying a part in helpingthe Club to continueto grow in a verycompetitive market.”Having known TheSwedish Club for soShapingthefuturelong, Christer Olsson expected few surprises whenhe became a Board Member. Yet he found himselfrevising his perceptions of the Club: “I was not awareof the true spread of the Club’s internationalmembership today.”When asked to define the Club’s ‘personality’,Christer Olsson didn’t hesitate: “Its unique elementis the dedication of its people. When I talk to theClub’s staff, I get the impression that – in the bestpossible sense – they regard it as their Club. Theytake real pride in The Swedish Club.“Stability is another facet of the Club’s personality.Continuity in the Göteborg and internationaloffices makes a great contribution to the Club’sconsistent performance and its delivery of good service.”Christer Olsson has three decades of experiencein the competitive world of shipping. He has spentChrister Olsson, The Swedish Club’s new Chairman.most of this time in demanding executiveposts. His priority is to help the Club navigatethrough a period of change and upheavalin the shipping and insurance industries.He explains: “One aspect of change isthe trend towards consolidation, throughmergers and acquisitions. Some deals haveemerged as great successes; others rankamong the failures. As for The SwedishClub, I believe that its future should be basedon continued independence. This requiresthe definition of a clear path for developmentover the next decade. The fundamentalprinciple is to continue to respectthe Club’s ‘quality profile’. More expansion,at an international level, is good.Equally, such growth should not be regarded asan end in itself. Yet, there is room for moregrowth, especially in the Asian region.”When asked whether he had concerns aboutthe future, Christer Olsson returned to the importanceof developing a clear set of objectives.“We have had a relatively weak market forsome years. The future will not be an easy ride.The Swedish Club must remain efficient andcompetitive. Our track record is encouragingwith an excellent rate of growth when benchmarkedagainst other Clubs. It is important tonote the steady pace of this growth. This Clubis not interested in buying into expansion.”■7

Annual General MeetingTHE SWEDISH CLUB LETTER 2–2001Informal Dinneron June 6 that ‘Kronhuset’in GöteborgPHOTOS: LENA BRYNGELSSON ©Loyal supporters – Carmen and Vassilis Constantakopoulos andChristiane and Klaus Oldendorff.Members of the defeated team in the Mutual Cup;Clas Rydén, Nick Lockyer and CostisConstantakopoulos.Well protected! Lucy and Peter Chew and Kathy andFrans Malmros.Andreas Andreou and Juergen Hahn– first time guests from Cyprus.8

THE SWEDISH CLUB LETTER 2–2001Annual General MeetingFulvia LinariThe first woman everto be guest of honourPHOTO: LENA BRYNGELSSON ©Berit BlomqvistINFORMATION MANAGERSjöfartsforum/Maritime Forum, Göteborg■ ■ Tell me who your P&I Club is and I knowwhat kind of shipowner you are!Those words come from Fulvia Linari, managingdirector of shipping agent MedmarTramp, president of WISTA International andguest of honour at The Swedish Club AGMand following the dinner.It took The Swedish Club 129 years to takethe decision to let a woman thank for the dinner;to be the guest of honour. Fulvia Linari ofcourse felt the responsibility to visualise all womenworking in the shipping industry. Especiallythe 600 who are members of WISTA; Womenin Shipping and Trading Association.The Association was formed in London1974, with the only aim to meet once a year fora Ladies Day. Over the years the Associationgrew and today WISTA has members all overthe world and about 20 countries have theirown WISTA country branch, i.e. WISTA Italyand WISTA Sweden.“Last year we had our AGM in Göteborg andit was a splendid event in well-organised, highlyefficient Swedish sisterhood. The Swedish shippingladies showed what you could call a fullpractical implementation of the quality concept.”She didn’t say, but she looked as if she includedthe whole Swedish Club in this concept.And yes, Fulvia Linari is a big fan of theClub, not least because it favours quality.“I think the importance of quality insuranceconcept in shipping is growing. It could actuallyseem a contradiction in terms that, while thetendency of the maritime world is to providebetter safety measures, to build ships of highlysophisticated technology, to study and adoptrules, regulations and provisions aiming at minimisingrisks, still we are going through a periodwhen we almost daily hear sad news aboutaccidents that have occurred to vessels and involvinghuman lives and the environment.”“But it is in such a context that the role ofthe P&I Club becomes vital, even more sowhen the Club is well known for its long-termcommitment to seriousness and quality likeThe Swedish Club.”Fulvia Linari emphasised that she wants aclub that not only provides insurance and offersa wide range of services to its members, butactually identifies – through the implementationof strictly professional guidelines – theMs Fulvia Linari speaking at the AGM dinner.members as reliable and qualitymindedoperators and trustworthycommercial partners.“You could quite say: Tell mewhich P&I Club represents yourinterests and I spot which kindof shipowner you are!”She also admitted that theClub is of great assistance andhelp even in the daily operationallife of a shipping agent.“The Club has been a greathelp in sorting out a problemand sometimes the Club is thesolution itself.”Of course, she received a bigapplause for that speech, andnobody believes that it will takeanother 129 years for the nextwoman to be a guest of honour.So what is Medmar Tramp?”We are a shipping agencyentirely dedicated to the trampbusiness. We have our head officein Genoa, where operationaland financial matters arecentralised for better coordinationof all services, but we alsoown offices in some major Italianports and we cover Italythrough a network of subagents.We also have local offices in HongKong, Malta and Koper in Slovenia”, Fulvia Linarisays.She continues: “We have wide experience inhandling all types of ships and an extensiverange of commodities, including oil, petroleumproducts, grains, ore, chemicals, vehicles, projectshipments etc.”And how did you end up in shipping?“I come from a shipping family. Most of ourmen were at sea and therefore, shipping to mewas not a new subject. Furthermore, Genoa is acity where almost 50 percentage of the populationis involved in shipping.However, I ended up in shipping just bycoincidence. I had an interview with a majorshipbroker company immediately after gettingmy university degree and they hired me. It wasnothing more exotic than that. I loved the jobat the research department but, after five years,I decided that I needed something more excitingand developing. I applied to a major shippingagency as water clerk. My career startedthere. From water clerk I became operationsmanager. Five years ago I moved again andtook the position as director of Medmar Trampwhere I developed the tramp side of the business.Now I am partner and managing directorin the company.”How did you like Göteborg?“I just loved it! Even though the weather wascold, and the wind too heavy for sailing, I had areally good time. The Göteborg shipping communityis indeed friendly, warm, available andextremely hospitable. Whether I meet womenor men – I see business of high quality and tailoredto human dimensions.”■9

Annual General MeetingTHE SWEDISH CLUB LETTER 2–2001Confrontingthe TerminalSeriousnessLinking humour and healthPaul E. McGhee is a world authority on the healthbenefits of humour. On receiving his Ph.D indevelopmental psychology in 1968, he spent over 20years conducting basic research on humour andlaughter. His academic career laid the foundationsfor his current work on the health benefits ofhumour. Paul McGhee has published over 50scientific articles and 11 books. His programmeslinking humour, health and stress management havebeen adopted by many corporations, hospitals andother organisations. Paul McGhee’s company, TheLaughter Remedy is based in Wilmington, Delaware,USA (www.LaughterRemedy.com). It offers an eightstephumour skills training programme demonstratingthe use of humour to cope with job and lifestress.Volunteers from the audience demonstrating the ‘belly laugh’. A good laugh prolongs life but does itcure grey hair?■ ■ Put over 100 shipowners, underwriters,brokers and other shipping professionals in aroom and ask them to play the child’s game ‘Simonsays...’* The response may be a stony silence– but not when Paul McGhee is makingthe suggestion! ‘Simon says’ is part of a routineto get everyone to ‘lighten up’, become lessconscious of status and more aware of the benefitsof humour and its extreme symptom –gales of laughter.The venue was the Radisson SAS ScandinaviaHotel, Göteborg. The occasion was The SwedishClub’s Member’s Day, during the 2001AGM. Paul McGhee’s morning presentationopened with a pertinent question: “Are you humour-impaired?”He warned the audience thatthe condition known as ‘TS’ (Terminal Seriousness)“has an unpleasant way of sneaking up onyou, killing your sense of fun in life and killingyour effectiveness in the workplace.”Humour is a social lubricantHumour, on the other hand, promotes goodhealth. An individual with well-developed humourskills is better placed to cope and moreproductive and creative in the workplace. “Humouris a social lubricant,” said Paul. “It canplace the skilled humourist in a powerful position.The appropriate use of humour in a negotiatingsituation, for example, may transformthe atmosphere.”Paul McGhee called for volunteers to demonstratethe five basic steps building to theultimate expression of humour – the ‘bellylaugh’. He wanted the volunteers to be representative– although he did find it a little difficultto persuade a lawyer to come forward!The belly laugh begins with a wide smile, followedby raised eyebrows and a narrowing ofthe eyes. The lower jaw drops as muscles belowthe stomach tighten and the belly laugh erupts.Laughter increases energy levelsAs the volunteers recovered from their ordeal,the presenter’s message became clear: laughterincreases energy levels and, at the same time,relaxes the muscles. “This is why very smallchildren often fall down when they begin tolaugh. Humour has the power to disperse frustration,anger and other negative emotions. It iscommon, for example, for a young child to manipulatean angry parent by forcing a change ofmood through a demonstration of humour.”Break the icePaul McGhee gave examples of professional situationswhere a sense of humour makes a vitalcontribution. Managing a major marine casualtywould be more difficult if those involved immediatelylost their sense of humour. He added:“Business today places a high premium oncreativity. There is much research linking creativityand humour. When a group comes togetherto face a serious problem, the use of humourcan break the ice and encourage a creativeresponse. Humour, in a team-building situation,helps individuals ‘feel’ they are part of ateam.”Some forms of humour are more appropriatethan others. Paul cautioned against the use of‘put down’ humour which can be offensive. Positivehumour, however, brings people togetherand may allow them to say things thatare impossible to express in the absence of humour.Paul McGhee outlined his process for developinghumour skills. The steps include:◆ Cultivation of a playful attitude◆ Being proactive – telling jokes and funnystories* Requires a group to perform actions on the command ‘Simon says’. It is surprisingly difficult to resist a command given without ‘Simon’s prompt’!10

THE SWEDISH CLUB LETTER 2–2001Annual General MeetingAmused audience.PHOTOS: LENA BRYNGELSSON ©◆ Creating a personal style of verbal humour◆ Looking for humour in everyday life◆ Laughing more often (and heartily)‘Simon says...’Paul McGhee did not apply for the position asChairman of The Swedish Club Board, althoughhe was well equipped to do so.Another important skill is the ability to “takeyourself lightly – to be able to laugh at yourself,although this is one of the more difficult skillsto acquire.”Paul McGhee asked his audience a question:“Why do we get more serious as we get older?”He then asked the audience to identify fivethings they often do just for fun. It was interestingto observe the expressions on some faces.There were those who appeared to be struggling– having identified one or two – whereas othersmet his request with a wide smile (having, presumably,identified at least ten!).Useful advicePaul left his audience with some useful advice,including the importance of looking for humourin everyday situations. Signs, for example,are a rich source of humour. He gavesome examples: “Drop your pants here forbest results” (a Bangkok laundry) and “Ladies,leave your clothes here and spend the afternoonhaving a good time” (another laundry,this time in Rome). There is also the ambiguousmarketing message of a certain clinic: “Ifyou are at death’s door, let our doctors pullyou through”.■The Benefits of HumourRecent research demonstrates that laughter isgood medicine. Humour and laughter make asignificant contribution to physical and mentalhealth. Learning to adopt a lighter attitude –seeing the funny side of everyday situations –produces the resilience needed to cope withtough days.Physical health benefits include:❑ Enhanced immune system❑ Cardiac exercise❑ Reduced stress hormones❑ Reduced pain levelsMental health benefits include:❑ Less stress❑ Reduced anger and anxiety levels❑ A more positive, optimistic mood❑ A sense of controlWork related benefits include:❑ Improved team-building❑ Enhanced communication skills❑ Greater creativity and problem-solvingcapability❑ More resilience❑ Higher productivity11

Annual General MeetingTHE SWEDISH CLUB LETTER 2–2001Annual General Meeting Dinner June 7th Radisson SAS Scandinavia Hotel GöteborgElse Sanne and Nils G. Nordh, ready toeat.Paul McGhee demonstrating the use of mental floss to a disbelieving audience.PHOTOS: LENA BRYNGELSSON ©Maria Ash, PA to the MD, and PeterAhlås.Kathy and Frans Malmros flanked by Astri and Bård Poulsson.All dressed up! Folke and GunbrittPatriksson with MD and spouse.Fulvia Linari performing her duty as the after dinner speaker. Christer Olsson and Per Erik Hedborg are allears.12

THE SWEDISH CLUB LETTER 2–2001Annual General MeetingThe Mutual Cup Sweden vs Greece International – June 6thBack row: Nico A. Cotzias Jr., Stephanos Lekanidis, Nick Lockyer, Ghikas Goumas, Costis Constantakopoulos, Chris Goumas, Ken Littlejohn, PeterJohansson, Tord Nilsson, Henrik Lind, Niels Berger, Magnus Axelsson, Christer Ekström (referee), Per-Erik Jornert. Middle row: Peter Carlsson, PeterElvingsson, Elias Emiris, Per-Magnus Jonasson, Örjan Karlsson, Tony Schröder, Jens Huzell. Front row: Clas Rydén and Claes Åman.Sweden’s Per-Magnus Jonasson in full speed, eagerly chased by GreeceInternational’s Costis Constantakopoulos.Full social programme■ ■ As always, The Swedish Club’s 2001 Annual GeneralMeeting provided many opportunities to meet old friends andenjoy the social events. This year’s AGM set a record, with 260people in attendance.The programme opened on June 6 th – Sweden’s NationalDay – with the traditional soccer match ‘The Mutual Cup’.Greece International played to win and finished the first half2-0 up, but Sweden replied strongly in the second half, drawinglevel and clinching victory with a third goal in the finalminutes. Tord Nilsson scored twice for Greece International inthe first half. Henrik Lind and Tony Schröder scored for Swedenin the second half, with their Captain, Jens Huzell, producingthe winning goal.The Ladies Programme, on June 7 th , offered an excursion tothe beautiful province of Bohuslän, on the Swedish west coast.A tour of the fishing village of Klädesholmen, dating from thelate 1500s, was followed by a visit to the Nordic WatercolourMuseum in Skärhamn – now an important centre for contemporaryart.Golf, sailing and the ‘Swedish Wilderness Adventure’ occupiedFriday June 8 th . Poor weather led to the cancellation ofthe sailing, but this did not dampen enthusiasm during theparty’s long lunch on board the vessel ATENE. As usual, theyindulged in renditions of what might be described (loosely) as‘Swedish shanties’. Close harmony was facilitated by smallglasses of colourless or semi-colourless liquid.Another party braved the weather during their visit to GöteborgGolf Club – the oldest establishment of its kind in Sweden.Lars Rhodin presided over the prize-giving ceremony. In▼13

Annual General MeetingTHE SWEDISH CLUB LETTER 2–2001Due to gale force winds, the traditionalsailing with ATENE had to be cancelled. Theexpecting sailing guests got anyhow afantastic day in Skärhamn enjoying theSalvador Dalí exhibition and later an, asusual, extremely nice lunch on board theATENE. The pictures show the hungry landforced sailors going on board for lunch andtheir big smiles after lunch forming thetraditional group picture. A traditionalSwedish Club Loss Prevention programme,not exposing guests for unnecessary dangers!Mrs Walthera Benjaminsen practising archery.The ‘Wild Team’ building their nesting box.14

THE SWEDISH CLUB LETTER 2–2001Annual General MeetingMr Hans-Otto Ramel just finishing a 360 pirouette after his ball gotinto hole no. 5 in a similar way. Steve Wareham, (hidden) and MartinHernqvist are sharing his joy.▼the interests of mutuality, all participants received a prize. The winnerof The Swedish Club Grand Classic trophy 2001 was Mr Niels Berger.As for the group answering the ‘Call of the Wild’, the venue for the‘Wilderness Adventure’ was Thorskog Castle, built over a century agoand now a haven for stressed business executives and others whosimply enjoy the tranquillity of the castle and its surrounding parkland.Activities available at the castle included Boule, construction of anesting box and unconventional golf. A short walk in the forest preparedcompeting teams for some arduous enterprises, from duck racingon the river to more warlike pursuits: skeet, archery, the air rifle and,finally, the blowpipe. The ‘Dream Team’ emerged as winners. Happily,no injuries were reported and the Club’s claims record remainedundamaged.No need for any salvage operations for the Club’s salvage master LarsLandelius (left) with such team members. Capt Vassilis Constantakopoulosand Mr Niels Berger (right) consistently kept the ball safely onfairway. Mr Berger ended up as winner of the competition.Mr Chris Goumas with his team’s nestingbox, built to Class approval.Another winner was the Club’s Per-Erik Jornert (centre) who was pairedwith Mrs Sheena Cowling (left) and Mrs Birgitta Dybeck (right).15

Personal InjuryTHE SWEDISH CLUB LETTER 2–2001E N L O S E Dspaces can killPernilla LjunggrenCLAIMS EXECUTIVEClaims & Legal Support DepartmentThe Swedish Club, Göteborg■ ■ Seafarers are again alerted to and warnedabout the fact that vessels represent ahazardous work environment. For example,unsafe entry into enclosed spacescontinues to claim the lives of seafarers.Many of the fatalities in enclosed spaceshave resulted from entering the space withoutproper supervision and adherence torecommended procedures (see article inThe Swedish Club Letter No 2/1998).This, sadly, was again demonstrated in anaccident earlier this year which cost the livesof two seafarers and came close tocausing the death of a third crew member.Their ship was laden with a cargo ofcoke. The three crew members, carryingout routine maintenance work, opened amanhole cover and one man collapsedand fell into the space. A second man attempteda rescue but he also collapsedand fell. The third crew member lost consciousnessbut survived.A similar tragic and unnecessary incidentwas reported to the Club last year involvingthe death of three shore workersconducting maintenance work on board a shipladen with logs. Contrary to given instructionsand without permission, they opened a manholecover and entered the hold. All three mensuccumbed, one after the other, to the rare andtoxic atmosphere and fell whilst descending thehold ladder.An enclosed space is defined as one with restrictedaccess that is not subject to continuousventilation and in which the atmosphere maybe hazardous due to the presence of hydrocarbongas, toxic gases, inert gas or oxygen deficiency.This definition includes cargo holds/tanks, ballast tanks, fuel tanks, water tanks, lubricatingoil tanks, slop and waste oil tanks, sewagetanks, cofferdams, duct keels, void spacesand trunkings and any other piece of machineryor equipment that is not routinely ventilatedand entered. Respiratory hazards from a numberof sources could be present in an enclosedspace. These could include, but not be limitedto, hydrocarbon vapours, benzene, hydrogensulphide and oxygen deficiency. Conditionsthat may generate a hazardous atmosphere are,Rescue operation in process.for instance, rusty enclosed spaces, petroleumand chemical cargoes. Many materials frequentlycarried in bulk are liable to cause oxygendepletion in a cargo space or tank; theseinclude most vegetable products, grains, timberlogs and forest products, ferrous metals, metalsulphide concentrates and coal cargoes. Itshould be noted that there are no indicationsor pre-warnings of oxygen deficiency whichmay result in suffocation.The rapid rescue of personnel who have collapsedin an enclosed space presents particularrisk. In the event of a crew member being overcomeand collapsing, it is a natural reaction toattempt an immediate rescue, but far too manyadditional and unnecessary deaths have occurredfrom impulsive and ill-prepared rescue attempts.In the event of an emergency, under nocircumstances should the attending crew memberenter the space before help has arrived andthe situation has been evaluated, since notdoing so would put his own life at risk and almostcertainly jeopardise his attempts at bringingout the victim alive.The International Maritime Organizationand The International Chamber ofShipping, amongst others, have issuedchecklists and guidelines for entering enclosedspaces of which IMO’s Checklistfor Safe Entry into Enclosed Spaces wascopied in The Swedish Club Letter No 2/1998. These guidelines also describe thetests to be carried out to determinewhether or not an enclosed space is safefor entry, set out the conditions for entryand precautions to be taken while in enclosedspaces. In this respect reference isalso made to the International Conventionfor the Safety of Life at Sea, theIMDG Code, including the Code of SafePractice for Solid Bulk Cargoes (‘BCCode’) and applicable national codes ofsafe working practices for merchant seamen.The importance of adhering to companyprocedures, including safety managementsystems, and applicable guidelinesand regulations for entering enclosed spacescannot be emphasised enough. Thereare no valid grounds for failing to complyfully and at all times with such recommendedprocedures. It should be notedthat it has been scientifically proven thatadherence to procedures is one of themost effective ways of avoiding accidents.Yet procedures are not always followed.Experience shows that even highly experiencedpersonnel are involved in tragic accidentsof this kind – the probable cause beingcomplacency! It is important that regular remindersof the hazards and the need for totalcompliance with procedures for safe entry arecommunicated to seafarers.The Club has recognised the need for increasedawareness of the risks associated withenclosed spaces and, in 1993, the training activitiesat The Swedish Club Training Centre inPiraeus were extended to include a course dealingwith hazardous atmosphere monitoring.The aim is to increase the understanding of hazardousatmospheres in enclosed spaces and toteach participants the correct handling of instrumentsused for detecting hazardous atmospheres.The overall course objective is to ensuresafety before entering enclosed spaces as wellas to reduce the risk of explosions.■16

THE SWEDISH CLUB LETTER 2–2001Stowaways/ In Short / News from PiraeusStowawaysin a small world■ ■ Fate took a hand in a curiousstowaways case earlier thisyear. It concerned a Scandinavianlady in her mid-forties, livingin a Mediterranean port. Herhusband was not from Scandinaviabut had the necessary documentsdemonstrating rights ofpermanent residence. This storyis not without romance! Thewife wanted to return to Scandinaviabut there were financialbarriers to overcome. In short,the loving couple had no moneyfor the trip and, secondly, anormal departure was ruled outby outstanding debts. This providedthe background to theirdiscreet selection of a shipbound for Scandinavia. Thecouple came out of hiding 24hours after departure. They weretaken before the master, clutchingvalid passports. This wasthe moment when fate intervened.It happened that the Scandinavianmaster knew thewoman’s brother (also a seafarer)!The tension dissolved, thecouple achieved their goal andthe story ended with the arrivalof the vessel and a more conventionallast leg of the journey – abus ride to the family home!■IN SHORT - IN SHORT - IN SHORT - IN SHORT- IN SHORT - IN SHORT - IN SHORT-Detention in Gabon■ ■ At the end of March the Club was notifiedthat a member’s ship had been detainedin Gabon, West Africa. It appears thatthe Gabonese Merchant Marine Authoritieshave decreed that ships entering Gaboneseports require to undergo a safety inspection,to be paid for in cash by the master. Ourmembers were obliged to pay, and we understandthat the minimum cost of such an‘inspection’ is USD 5,000, with higher sumsfor larger vessels. This is obviously highlyunsatisfactory; owners should perhaps considerincluding in their charterparties a provisionto ensure that costs so incurred shallbe for charterers’ account. ■New rules for the arrest andrelease of vessels in Peru■ ■ The Club’s correspondents in Peruhave advised about some changes to thecountry’s legislation as to the arrest and releaseof vessels for maritime claims. Theproceedings (for the arrest and release ofvessels) were previously handled by the localmaritime authorities, and a vessel thathad been arrested was usually released fairlypromptly once an accepted form of securitywas provided. The new legislation providesthat the proceeding will be handled by thePeruvian courts. The courts are, reportedly,less experienced in maritime matters, andare already working at full capacity. In addition,the courts are expected to adopt amore formal approach to the proceedingsand they are only open between 9 and 3Monday to Friday. Our correspondents fearthat the courts might become overloadedwith work, in particular considering thecountry’s cargo-friendly policy. Peruvianlaw allows an embargo on the presumptionof a loss and an embargo may be enforced against anothervessel within the same ownership. In addition,shore figures are conclusive evidence when it comesto differences in weight for liquid and bulk cargoesand there is a constant flow of cargo claims for shortlanding.The Club suspects that the new legislationmay entail a decrease in the amount of arrests, butalso that it will be more complicated to release thevessel if arrested. ■Proposed Marine Liability Actin Canada■ ■ The Canadian Federal Government is expectedto enact new legislation later this year. The Bill, that iscurrently proceeding through the House of Commons,covers several areas such as passenger liabilities,limitation of liability, pollution and cargo liabilities.Some of the legislation is new and some is taken fromthe Canadian Shipping Act and provincial law. Oneof the more important novelties is that the Bill suggeststhe adoption of the Athens Convention relatingto carriage of passengers and their goods by sea. Formore information, please contact our Claims & LegalSupport Department.■PEME Pre-EngagementMedical Examination■ ■ Following up on our article in the latest issue ofThe Swedish Club Letter members will by now havereceived a copy of our study, the response to whichwill enable us to proceed with our project in the bestinterest of our valued members. If you have notalready done so we would ask you kindly to respondto our study as promptly and accurately as possible.Your response will enable us to best serve your interests.In respect of the PEME guidelines they are stillin the process of being revised and we are at presentreceiving advice and gaining advantage of experienceheld by our medical experts with whom we work.Until revised and finalised the guidelines are thus aninternal working product.■NewsfromPiraeusIt’s always beautiful in Greece■ ■ Pope John Paul II paid a 24-hour visit to Athens in earlyMay. The 81-year old pontiff made his first trip to Athens aspart of a pilgrimage retracing the steps of the apostle Pauland to improve relations between the two churches. As partof his visit, he prayed at the Pnyx Hill under the Acropoliswhere Paul had preached. His visit was received with mixedfeelings by the Greeks, whose history with the Catholicchurch has been troubled over the centuries.The Swedish Club, however, has no mixed feelings in themarine insurance markets as we now finally see a smallchange in rates, bringing the market slowly back to somethingwe believe is a level that will be satisfactory for all partiesinvolved.We have also received positive feedback in respect of ourloss prevention activities in Greece, where we have decidedto improve and upgrade our Training Centre in Piraeus,which will be ready in September.Looking to the future, I had the pleasure of attending thelaunch of the hull of EQUINOX DAWN, the first vessel in aseries of three for the new joint company of the Goumas andLekanidis families. The launch took place in Croatia wherethe vessel slid smoothly down the blocks after the champagnebottle hit the bow.Regarding the weather – it’s always beautifulin Greece.Clas RydénGENERAL MANAGERThe Swedish Club Greece17

CrewTHE SWEDISH CLUB LETTER 2–2001CrewLiabilityUpdate– United States■ ■ In many countries, the relationship of theseafarer with his employer is governed primarilyby contract, or by a scheduled compensationsystem. In the United States, due primarily tohistorical developments, seamen are not subjectto a scheduled compensation act, and consequentlythe quantum of personal injuryawards can vary widely. As a consequence, thefirst rule of thumb for non U.S. shipownerswho might face crewmember claims brought inthe United States is to try to avoid being suedhere. There are some steps the shipowner canto order his legal relationships with his owncrewmembers, and if done correctly, they canenhance the likelihood of the U. S. courts grantinga motion to move a case from the UnitedStates to a foreign tribunal.In the last several years, the courts have beensomewhat more favorably disposed to grantdismissals based on forum non conveniens.These motions are determined by various factors,many of which are related to the facts ofthe casualty. The location of the accident, theavailability of witnesses, the involvement ofthird parties, and the availability of the forumare factors that are considered. None of these,however, are matters that can easily be arrangedby the shipowner in advance. Further, forumnon conveniens is heavily fact dependant andso within the discretion of the judge to whomthe case is assigned.To increase the likelihood of a U.S. court requiringthe dispute be resolved elsewhere, a forumselection clause can be quite helpful. The-Mr David B LawtonPARTNERTerriberry, Carroll & Yancey L.L.P., New Orleansse clauses specify in advance where any claimsmust be brought. The legal presumption inthe U.S. is that a forum selection clause is enforceable,and the party opposing its enforcementcarries the burden of showing that enforcementwould be unreasonable.Crewmembers from some countries are requiredto have contracts with forum selectionclauses. Philippine seafarers on foreign ships,for example, are subject to the Standard Termsand Conditions of the Revised Contract forSeafarers, which specifies the Philippines as therequired forum for the resolution of any disputes.Articles required by the ship’s flag may alsospecify the forum. Finally, collective bargainingagreements may specify a forum.Convincing a U.S. court to enforce a forumselection clause is much more likely if:(1) the selected forum is meaningful to theparties and is adequate to handle the claim;and(2) there is a consistency in the employmentdocumentation regarding the forum selectionclause.A forum selection clause specifying theseaman’s own country usually has an advantage,as the general attitude of the U.S. courts isthat a country will take care of its own citizens.If the flag of the ship is not a flag of convenience,then the choice of the flag state may bedefendable. Utilization of the shipowner’s baseof operations can also be considered as a forumif the country has a meaningful claims resolutionprocedure available to the seafarer. Finally,giving the seaman the option of selecting oneof the above is another means of demonstratingthe reasonableness of the forum selectionclause.A second area in which the shipowner can assistis in the consistency of the documentation.If the forum selection clause is found in theemployment contract, it simplifies matters ifthe name of the party on the employmentcontract is the shipowner, or the contractingparty is clearly specified to be the agent of theshipowner. The ship’s Articles should expresslyincorporate the terms of the collective bargainingagreements or employment contracts if thoseare the documents that contain the forum selectionclause. Choice of law clauses should betreated in the same manner, to the extent practicable.There is no iron clad protection against beingsued in the U.S. for crew claims, especiallyif the injury occurs in U.S. waters. Every precautionarystep taken, however, can help decreasethat risk.■18

THE SWEDISH CLUB LETTER 2–2001CrewFILIPINO CREW CLAIMSIN PANAMA Latest developmentsMr Juan David Morgan Jr.PARTNERMorgan & Morgan, Panama■ ■ Nearly 40 claims and as many arrestactions have been filed by injured Filipinocrewmen or families of deceased ones inPanama’s Maritime Court since 1996.Many of these claims had even previouslybeen settled in the Philippines; the crewmenor their families having signed releasedocuments upon receiving the amount ofcompensation prescribed by the PhilippineOverseas Employment Administration(POEA) contract of employment. This hasbeen causing grave problems for shipownerscalling at Panamanian ports or transitingthe Panama Canal.Even though all prior decisions by theMaritime and Supreme Courts of Panamaresolving this type of claims had gone in favorof shipowners, there had been an alarmingstreak of successive decisions by theMaritime Court denying shipowners’ motionto stay these actions based on the forumselection clause contained in thePOEA contract and on traditional notionsof Forum Non Conveniens; yet, none ofthese decisions had been confirmed by theSupreme Court of Panama.In May of 2001, the Supreme Court issuedtwo judgments resolving two of thepending appeals against the MaritimeCourt resolutions denying the shipowners’motions to stay the actions in Panama infavor of the Philippine courts. In HelenVillareal Tobias, et. al. vs. M/V ‘STARCEBU’ and Luz Marina Reyes, et. al. vs.Diamond Camelia S.A. & Mitsui OSK Lines,the Supreme Court reversed the MaritimeJudge and ordered the stay of both actionsin favor of the Philippine courts. Thefirst of these cases involved a claim arisingfrom an accident on board the M/V ‘STARCEBU’ in which a crewman lost his life. Asusual, prior to the filing of the action in Panama,the widow had received the compensationprescribed in the POEA contract andsigned released documents on behalf of herminor children and her own behalf in thePhilippines. The Maritime Court had deniedthe stay of the action in spite of the forumselection clause in the POEA contract,M/V ‘STAR CEBU’ being a Philippine flagship, Philippine substantive law being applicableto the claim – under Panamanianconflict of laws rules – and all witnesses beingFilipinos. In a laconic four page judgment,the Supreme Court reversed the MaritimeJudge and stayed the action in Panama,making it clear that, unless there wereextraordinary circumstances, forum selectionclauses were to be respected, speciallytaking into consideration the abovementionedfactors, which made the Philippinesa much more proper and convenientforum than Panama.In Luz Marina Reyes, et. al. vs. DiamondCamelia S.A. & Mitsui OSK Lines *, the issueof the stay of the action was much morecomplicated because the vessel in respectof which the claim arose (M/V ‘SEA PRO-SPECT’) was a Panamanian flag ship, theowner of the vessel (Diamond CameliaS.A.) was a Panamanian company, and Panamaniansubstantive law – under Panamanianconflict of laws rules – was applicableto the claim. The claim arose from thesinking of the M/V ‘SEA PROSPECT’, aPanamanian bulk carrier, in 1998 in a voyagefrom Indonesia to Japan. The vessel wasowned by Diamond Camelia S.A., a Panamaniancompany, and was on a long termtime charter to Mitsui OSK Lines. Tencrewmembers were presumed dead and severalof those who survived were injured.Settlements and releases were signed in thePhilippines by the surviving crewmen andthe families of those missing in exchangefor the compensation prescribed in thePOEA contract. Shortly thereafter, anotherPanamanian bulk carrier in the same ownershipas the M/V ‘SEA PROSPECT’, theM/V ‘BLUE SKY’, was arrested in Panamato secure a claim by the families of allmissing seamen and six of the survivingones. The Japan P&I Club had to post aLetter of Undertaking for USD 7,800,000 torelease the M/V ‘BLUE SKY’. In keepingwith a streak of such decisions, the MaritimeJudge denied defendants’ motions tohave the proceedings stayed in favor of thePhilippines courts and defendants appealedto the Supreme Court. In a rather lengthyjudgment, the Supreme Court basically ruledthat, even though the ‘SEA PRO-SPECT’ and her owners were Panamanian,and so was the substantive law applicableto the claim, there was an express forum selectionclause in the POEA contract, whichmust be adhered to and which was alsobinding on the next of kin of the missingcrewmen as their would-be successors. TheJustices also found that the Philippinecourts were the proper forum to hear thedispute because most material witnesseswere in the Philippines and any needed judicialinspections would be more accessiblefrom the Philippines. This case is particularlysignificant because it shows the SupremeCourt of Panama is willing to give fullforce to forum selection clauses in this typeof cases, even when the vessel involved fliesthe Panamanian flag. It sends a strong positivesignal to shipowners, specially thosewith vessels registered in Panama.Also in May, the Maritime Judge vacatedan arrest he had previously ordered to securea Filipino crew claim, when a motion tolift the arrest was filed by defendants withan authenticated copy of the settlementand release previously signed by claimantsin the Philippines. The settlement and releaseincorporated an express agreement notto arrest ships. Such decision is still subjectto appeal to the Supreme Court by claimants,but we believe it is likely to be affirmed.The foregoing judicial decisions seem tomark a definite turning point in the rightdirection for shipowners. It seems Filipinocrew claims in Panama have nowhere to go,but back to the Philippines. This may wellprevent any new such claims from being filedin Panama at all in the future.■* Morgan & Morgan acted for owners.19

CrewTHE SWEDISH CLUB LETTER 2–2001HONGKONGEMPLOYEES’ COMPENSATIONMr Thomas LeungPARTNERClyde & Co. Hong Kong■ ■ In recent years, there have been a numberof interesting decisions delivered by the HongKong Courts in connection with the compensationof employees who have been injured atwork. These decisions will affect the assessmentof liability of employers and their insurers underthe Employees’ Compensation Ordinance,Cap 282 (‘ECO’). The ECO has also beenamended.In the course of employment?To qualify for compensation, the employee hasthe burden to prove both that the injury occurredin the course of employment and that theinjury arose out of the employment 1 . Section5(4)(a) provides that an accident arising in thecourse of an employees’ employment shall bedeemed, in the absence of evidence to the contrary,also to have arisen out of that employment.It has been decided that “in the course ofemployment” means in the course of the workwhich the employee is employed to do andwhat is incidental to it 2 .Working without instructionsSection 5(4)(b) provides that an accident to anemployee shall be deemed to arise out of and inthe course of employment, if such act was doneby the employee for the purposes of and inconnection with his employer’s trade or business,notwithstanding that:◆ The employee was at the time when the accidenthappened acting in contravention ofany statutory or other regulation applicableto his employment, or of any orders given byor on behalf of his employer.◆ He was acting without instructions from hisemployer.In Lau Kam Nui v. Sau Kee Company Limited3 , the employee was an unskilled maintenanceworker employed to maintain and repairboats at the employer’s shipyard. His dutieswere cleaning hulls and painting and assistinghis employer who was a qualified diver. He wasnot required to dive and indeed he had beentold not to dive. As a general worker he was requiredto recover tools and equipment whichfell into relatively shallow water. On the day ofthe accident, the employee dived into the waterin order to recover a gas cylinder which had falleninto the sea. The employee surfaced after aminute or so but then dived under again andnever re-surfaced. He drowned. Neither the coworkernor the employer asked the employeeto dive and recover the gas cylinder. The gascylinder did not belong to the employer and inrecovering the gas cylinder, the employee didso of his own initiative. The first instance Judgedismissed the application holding that shecould not find that the employee met with anaccident which arose out of and in the courseof his work, nor could she find that what theemployee did was reasonably incidental to hiswork.On appeal, the Court of Appeal consideredan old English case 4 in which it was held thatwider consideration should be given where anemployee sought to protect and preserve theemployer’s property if it was at risk. In doing sothe employee might have implied authority todo things which normally would be outside thescope of his usual work. In the present case,the Court of Appeal held that the gas cylinderwas on the employer’s premises, and wasknown by the employee to have fallen into thesea and therefore was at risk. Although the gascylinder belonged to somebody else, theemployer was in due course going to be answerableto the customer who had paid for the useof it. The Court of Appeal relied on the oldEnglish case and also on Section 5(4)(b). It washeld that although the employee was actingwithout instructions and was acting in contraventionof any orders given by or on behalf ofhis employer, such act was done by theemployee for the purposes of and in connectionwith his employer’s trade or business. Theemployee was therefore within the course ofemployment. The Court of Appeal thereforeallowed the appeal.Under the influence of alcoholSection 5(2)(d) provides that no compensationshall be payable under the ECO in respect ofany injury, not resulting in death or seriousand permanent incapacity, caused by an accidentwhich is directly attributable to theemployee’s addiction to drugs or his havingbeen at the time of accident under the influenceof alcohol. Section 5(3) also provides thatwhere an injury results in death, the Court, onconsideration of all the circumstances, mayaward the compensation provided by the ECOor such part thereof as it thinks just to theemployee, even where his injury was attributableto his serious and wilful misconduct.In Yuen Yuk Ying v. Chan Kam Wing 5 theemployee who was a driver drank some beer inthe course of and after work. He drove thecompany van to the designated overnight parkingspace. On the way, the van, which was beingdriven by the employee, ran into the rear ofa road sweeping vehicle and as a result theemployee died. The weather was fine, the roadcondition was normal and the van left no tyremarks. The first instance Judge held that the alcoholhad such an effect on the driver’s reactionthat he was not able to avoid collidingwith the rear of the road sweeping vehicle andthis was the major and effective cause of the accident.The death was therefore attributable tohis serious and wilful misconduct and the applicationfor compensation was dismissed.The Court of Appeal held that although underSection 5(2)(d), no compensation is payablefor any injury caused by an accident whichis directly attributable to the employee havingbeen under the influence of alcohol at the timeof the accident, the section also provides thatthis bar does not operate when the injury resultsin death. It would therefore be a nonsenseif the dependants of the employee, having hadtheir right to compensation in such case preservedunder Section 5(2)(d), were to have it takenaway from them altogether or left as a matterfor the Court’s discretion by the treatment ofthe same fact as serious and wilful misconductfor the purpose of section 5(3). The Court ofAppeal also held that it would be entitled to exerciseits discretion afresh, on consideration ofall the circumstances and in so doing it exercisedits discretion in favour of the dependants,allowing the compensation provided for by theECO without any reduction.Extension of periodical paymentsSection 10(5) of the EC Ordinance providesthat an employee who has received periodicalpayments under this Section for a period of 24months from date of the commencement oftemporary incapacity, or such further periodbeing not more than twelve months as theCourt may allow in any particular case, shall nolonger be entitled to periodical payments underthis section but shall be deemed to havesuffered permanent incapacity and the provisionsof Section 7 or 9, as the case may be, shallapply to the worker.In Choy Wai Chung v. Chun Wo Construction& Engineering Company Limited 9 , anengineer was injured on June 28 th 1996. The pe-20

THE SWEDISH CLUB LETTER 2–2001Crewriod of absence as certified by the OrdinaryAssessment Board on review was from June 30 th1996 up to October 16 th 1998. The Applicantproduced sick leave certificates up to November30 th 1999 at the trial, which was over 36months from the date of the accident.The First Instance Judge allowed Section 10compensation for a period of slightly morethan 25 months, being the period from thecommencement of the sick leave up to the dateof issue of the Certificate of Assessment – thedate on which the degree of permanent loss ofearning capacity was initially assessed by theBoard. The employee was dissatisfied with thisassessment and argued on appeal that heshould be entitled to a further period of sickleave up to 36 months. The Court of Appealallowed the appeal, holding that Section 10(2)had mandatory effect and that the judge belowshould not confine the claim for Section 10compensation to the time up to which the degreeof permanent loss of earning capacity wasknown. Taking into account the medical certificateswhich had been produced, the Court ofAppeal held that the employee should receivecompensation for temporary incapacity for thefull three-year period.Amendments to Section 6Until comparatively recently, employees’ compensationin fatal cases was determined accordingto whether dependants were wholly orpartially dependent on the deceased’s earnings10 . Where the deceased died leaving dependantspartially dependent on his earningsthe amount was to be determined according toSection 6(4).Amendments to Section 6 came into effecton August 1 st 2000. The definition for “dependants”has now been replaced by “the membersof the family of the employees”. A wider classof persons, such as adopted children, co-habitees,stepchildren, sons-in-law, daughter-in-law,brother-in-law, sister-in-law, half brothers orsisters, and parents-in-law all come within thedefinition of the “members of the family”, andthey have now become eligible for compensationin fatal cases.Section 6(4) of the ECO dealing with partialdependancy has been repealed. The amount ofcompensation in fatal cases will now be determinedin accordance with Sections 6(1)(a), (b)and (c) and the 6 th Schedule of the ECO. The“members of the family of the employees” willnow receive compensation in full, even if theywere partially dependent on the earningsof the deceased at the time ofthe accident.A new Section 6A deals with the apportionmentof compensation for themembers of the family in fatal cases.Under a new 7 th Schedule, there are 12ways to apportion compensation, dependingupon the relationship. It willnot be necessary for the Court toapprove the apportionment. By way ofexample of this new statutory frameworkfor apportionment, spouses andchildren should now have compensationpaid to them in equal amounts.As it will no longer be necessary forthe Court to deal with partial dependancyand apportionment, theamount of compensation in fatal caseswill be more substantial and fasterpayments will be required.There is a new regime for interimpayments and for funeral and medicalexpenses. The Commissioner for Labouris empowered, by the new Sections6C, 6D and 6E, to certify theamount of interim payments and funeraland medical expenses upon applicationby the “members of the family”.Upon certification, these amountsbecome due and payable by theemployer within a prescribed time.With the introduction of this mechanism,the interim payments will bepayable earlier than before.The maximum amount of funeral expensesset out in the 6 th Schedule hasbeen raised from $16,000 to $35,000.ConclusionThe Hong Kong Courts have generallytaken a liberal and generous approachwhen considering the ambit of theECO 11 . Employers and insurersshould therefore recognise that theymay have to fight an uphill battle ifthey wish to contest liability to payunder the ECO. If employers/insurerswish to mount a vigorous defence onliability in an application for compensationunder ECO, they must makethorough investigation of all the circumstancesaffecting the accident atthe earliest opportunity.Following the Choy Wai Chung de-ANUPDATEcision, it seems that employees willseek to argue that they are entitledto periodical payments up to 36months so long as the period of sickleave has been certified by a doctor,dentist or the Board. This case is, weunderstand, being taken further. Itwill be interesting to see the way inwhich the judges in the Court of FinalAppeal interpret Section 10.Compensation payments in fatalcases were made slowly in the past asthe claimants had to obtain approvalfrom the Court with regard to thecompensation amount in case ofpartial dependancy and apportionmentof the compensation. This isno longer necessary under the newamendments and much faster compensationpayments should thereforebe anticipated.■Notes1. Section 5(1), ECO2. Lam Min v. Yau On Construction Co [1981]HKLR 6463. [1998] 4 HKC 6124. Poland v. John Parr and Sons [1927] 1 KB 2365. [1997] 1 HKC 1986. [2001] 1 HKLRD 5127. Section 30B was introduced as a result of Hillv. Circus Entertainment Management Ltd[1985] 2 HKC 219. A Hong Kong employeewho entered into an employment contract inHong Kong was injured whilst working inSingapore. The Court held that the ECO didnot provide in clear terms that the ECOshould apply to an accident occurring outsideHong Kong.8. [1999] 3 HKC 4909. CACV No. 14 of 2002 (Unrep.)10. Section 6 and the 6 th Schedule, ECO.11. In Yuen Yuk Ying above, Godfrey JA (as hethen was) commented that “…… [thedeceased employee] comes within theapparent policy of the legislation to treatwith a degree of leniency the dependants ofemployees who are killed by accidentsdirectly attributable to their having been atthe time of the accident under the influenceof alcohol.” Nazareth VP (as he then was)also expressed similar sentiments in TanHua Ning above, commenting that “It alsoseems to me that where there is scope toproperly do so in the particular circumstances,a generous view and constructionought to be adopted in line with the objectand purpose of the Ordinance, i.e. to provideemployment benefits, which of courseembrace death benefits.”21

CrewTHE SWEDISH CLUB LETTER 2–2001MARITIME CRIMINAL PROSEU.K. and International JurisdictionMr Jonathan KempASSOCIATEEversheds, Ipswich■ ■ Prosecutions of masters and crew, ownersand managers are on the increase. In the UnitedKingdom, the Maritime and CoastguardAgency (MCA), prosecuting authority for mostmaritime offences, is prosecuting far more frequentlythan in the past.Also on the increase, in the U.K. and elsewhere,are the number of statutory offencesfor which an owner, manager, charterer, masteror crew can be liable. These range from breachesof the Colregs (Collision Regulations) to alcoholor drug offences and offences under theMerchant Shipping Act, pollution regulations,maritime security statutes and others. At thefar end of the scale are offences of manslaughterand corporate manslaughter.This increase in regulation has resulted partlyfrom governments reacting to major shippingdisasters. Understandable perhaps, but arguablythis hinders the development of the safetyculture. Will a master admit to a serious nonconformityin the ISM Safety ManagementSystem if he or she knows it might be used asevidence during criminal proceedings?This article looks at the steps that should beconsidered when a criminal charge is made or –preferably – as soon as an official investigationinto an incident begins.Reacting quickly to a criminal investigationor charge is important for a number of reasons:Evidence of a conviction can be used as evidencein civil claims arising from the same incident.Charges can be brought not just against crewmembers, but also owners, managers and charterers.A conviction may lead to imprisonment orto the revocation of a crew member’s certificate.Jurisdiction and LawThe United Nations Convention on the Law ofthe Sea 1982 (see www.un.org) contains importantprovisions. In general terms, a coastal stateis prohibited from bringing penal or disciplinaryproceedings against crew members unlesstheincidentoccurredwithinthe 12 mile territoriallimit. On the‘high seas’, only the flagstate or the state of which the crewmember is a national, have jurisdiction.The law of the state within whose territorialwaters an incident occurs will apply. In the UK,the details of the offence will normally be setout in maritime legislation, but the criminalcourt procedures will apply. These includedetailed provisions on arrest, interviews, interpretersand other matters. More recently, theHuman Rights Act 1998 took effect, which hasparticular impact on the criminal law.Practical Steps1. INVESTIGATIONInvestigations normally take place soon afterthe event. In the U.K. this will be carried outby the MCA, who may seek to detain the ship.The MCA must caution the witness and mustallow the witness to be legally represented. Theinterview will usually be taped and used in evidence.The witness does not have to answer,but failure to do so may be detrimental. It isimportant that the legal representative is familiarwith the details of the incident and ensuresthat the interview covers all relevant issues.2. CHARGESThe defendant will be given a ‘summons’ – adocument ordering the defendant to appear at aMagistrates Court at a specific time/place. Thesummons should be copied to the defendant’slawyer as soon as possible. The jurisdiction ofthe court should immediately be reviewed.3. FIRST HEARINGThe first hearing may be only a few days afterthe investigation. In most cases, the hearingwill be adjourned for a few weeks.22

THE SWEDISH CLUB LETTER 2–2001CrewCUTIONS4. EVIDENCEThe prosecution will sendthe evidence to the defendant’slawyer. This must be reviewed so thatthe defendant can be properly advised. Thisadvice will include whether the prosecution hasevidence to prove each of the constituent elementsof the alleged offence, jurisdiction, makinga plea and procedural issues.5. BAILIf the defendant is not sentenced at the firsthearing, it is likely that the Court will imposeconditions on bail – especially where the defendantis an overseas citizen. In a recent case thesum of GBP 25,000 was required. Owners orunderwriters will often make arrangements toprovide surety. This is returnable provided thedefendant appears in Court as ordered. It iswise to make preparations for this before thehearing to ensure that the defendant does notsuffer the indignity of being kept in custodyunnecessarily.6. PLEAThe defendant will be asked to plead eitherguilty or not guilty. This may be at the first hearing,but more likely at the second hearing.7. COURTThe Magistrates Court has power to try minorcases and in some cases can impose up to sixmonths imprisonment on any single charge. Itmay decide to remit the case to the CrownCourt for a trial before a jury in serious casesor if requested by the defendant. Sometimesthe defendantwill be advisedto request a Crown Court trial,especially if there are complex issues.Magistrates will usually have little or no experienceof trying maritime cases.8. SENTENCINGImprisonment will usually only be imposed invery serious cases. If there is any risk of this,the case will be remitted to the Crown Court.Where a fine is imposed this must reflect theability of the defendant to pay. Details of thedefendant’s family financial situation will berequired.9. CREW CERTIFICATESUNCLOS Article 97 provides that disciplinaryproceedings relating to crew certificates canonly take place in the state that issued the certificates.Criminal charges that may follow a collision,pollution or other incident are seriousmatters which can have far-reaching effects onboth owners and crew. For those reasons, andin the interests of justice, they demand urgentand specialist legal representation from theoutset.■Jonathan Kemp is a solicitorwith Eversheds. He served as anavigating officer in the BritishRoyal Navy and has wideexperience of maritime claims.He can be contacted at:jonathankemp@eversheds.com23

CrewTHE SWEDISH CLUB LETTER 2–2001Amended POEA ContractMr Ruben T. Del RosarioMANAGING PARTNERDel Rosario & Del Rosario, Manila■ ■ The amended Philippine OverseasEmployment Administration (POEA) standardemployment contract came into effect on June26 th 2000. However, as a result of a petition filedby MARINO and other seafarers organisations,a temporary restraining order (TRO) datedSeptember 11 th 2000 was issued by the SupremeCourt stopping the implementation ofcertain provisions of the amended POEA contract.According to the TRO, Section 20, Paragraphs(A), (B) and (D) of the former standardcontract shall apply in lieu of Section 20 (A),(B) and (D) of the revised version. In addition,the implementation of Section 20 (E) and (G)of the revised contract has been suspended. (Itshould be emphasized that the amended POEAcontract is still in full force except for the aforecitedprovisions.)The practical effect of these TRO is that thework-related provisions have been deleted andthere has been a return of benefits for death, illnessand injury “during the term of the contract”.Also, the provision which releases ownersfrom damages arising from “contract, tort, faultor negligence under the laws of the Philippinesor any other country” has been deleted.On January 11 th 2001, the Philippine SolicitorGeneral representing the POEA filed beforethe Supreme Court a Comment in support ofthe lifting of the TRO. The Solicitor Generalargued that the amendments are within the powerof the State and that such amendments intendto “restore a sense of equilibrium betweenthe employer’s obligation and employee’s rightto receive compensation.” The Philippines ownEmployees’ Compensation law provide forcompensation only for ‘work-related’ illness,injury or death.At present, the TRO is still in force until theSupreme Court considers the merits and issuesa resolution. It is expected that the resolutionwill be rendered before the end of the year.In summary, the amended POEA contract isin force except for certain provisions of Section20. At present, Section 20 should read as follows:SECTION 20.COMPENSATION AND BENEFITSA.Compensation and benefits for deathIn case of death of the seafarer during the termof his contract, the employer shall pay his beneficiariesthe Philippine Currency equivalentto the amount of Fifty Thousand US dollars(US$50,000) and an additional amount of SevenThousand US dollars (US$7,000) to eachchild under the age of twenty-one (21) but notexceeding four (4) children, at the exchangerate prevailing during the time of payment.Where death is caused by warlike activitywhile sailing within a declared war zone or warrisk area, the compensation payable shall bedoubled. The employer shall undertake appropriatewar zone insurance coverage for this purpose.It is understood and agreed that the benefitsmentioned above shall be separate and distinctfrom, and will be in addition to whatever benefitswhich the seafarer is entitled to under Philippinelaws from the Social Security System,Overseas Workers Welfare Administration andPag-ibig, if applicable.The other liabilities of the employer whenthe seafarer dies as a result of injury or illnessduring the term of employment are as follows:The employer shall pay the deceased’s beneficiaryall outstanding obligations due the seafarerunder this Contract.The employer shall transport the remainsand personal effects of the seafarer to the Philippinesat employer’s expense except if thedeath occurred in a port where local governmentlaws or regulations do not permit the transportof such remains. In case death occurs atsea, the disposition of the remains shall behandled or dealt with in accordance with themaster’s best judgment. In all cases, theemployer/master shall communicate with themanning agency to advise for disposition ofseafarer’s remains.The employer shall pay the beneficiaries ofthe seafarer the Philippine Currency equivalentto the amount of One Thousand US dollars(US$1,000) for burial expenses at the exchangerate prevailing during the time of payment.B.Compensation and benefitsfor injury or illnessThe liabilities of the employer when the seafarersuffers injury or illness during the term ofhis contract are as follows:The employer shall continue to pay the seafarerhis wages during the time he is on boardthe vessel;If the injury or illness requires medical and/or dental treatment in a foreign port, theemployer shall be liable for the full cost of suchmedical, serious dental, surgical and hospitaltreatment as well as board and lodging until theseafarer is declared fit to work or to be repatriated.However, if after repatriation, the seafarerstill requires medical attention arising fromsaid injury or illness, he shall be so provided atcost to the employer until such time he is declaredfit or the degree of his disability has beenestablished by the company-designated physician.Upon sign-off from the vessel for medicaltreatment, the seafarer is entitled to sickness allowanceequivalent to his basic wage until he isdeclared fit to work or the degree of permanentdisability has been assessed by the companydesignatedphysician, but in no case shall thisperiod exceed one hundred twenty (120) days.For this purpose, the seafarer shall submithimself to a post-employment medical examinationby a company-designated physicianwithin three working days upon his return exceptwhen he is physically incapacitated to do24

THE SWEDISH CLUB LETTER 2–2001Crew / News from Hong KongAn updateso, in which case, a written notice to the agencywith-in the same period is deemed as compliance.Failure of the seafarer to comply with themandatory reporting requirement shall resultin his forfeiture of the right to claim the abovebenefits.Upon sign-off of the seafarer from the vesselfor medical treatment, the employer shall bearthe full cost of repatriation in the event the seafareris declared (1) fit for repatriation; or (2) fitto work but the employer is unable to findemployment for the seafarer on board his formervessel or another vessel of the employerdespite earnest efforts.In case of permanent total or partial disabilityof the seafarer during the term of employmentcaused by either injury or illness the seafarershall be compensated in accordance withthe schedule of benefits enumerated in Section30 of his Contract. Computation of his benefitsarising from an illness or disease shall begoverned by the rates and the rules of compensationapplicable at the time the illness or diseasewas contracted.C.It is understood that computation of the totalpermanent or partial disability of the seafarercaused by the injury sustained resulting fromwarlike activities within the warzone area shallbe based on the compensation rate payablewithin the warzone area as prescribed in thisContract.D.No compensation shall be payable in respectof any injury, incapacity, disability or death ofthe seafarer resulting from his willful or criminalact, provided however, that the employercan prove that such injury, incapacity, disabilityor death is directly attributable to the seafarer.(No Section E)F.When requested, the principal shall furnish theseafarer a copy of all pertinent medical reportsor any records at no cost to the seafarer.Death during ‘term of contract’is compensableShipowners will no doubt benefit from the implementationof the ‘work-related’ provision.A case in point is the decision of the SupremeCourt in NFD International Manning Agentsvs. NLRC, 284 SCRA 239, G. R. No. 116629,(January 16 th 1998).In this case, three seafarers implanted fragmentsof reindeer horns in their sex organs. Asthe implantations were made surgically in theabsence of sanitary and sterile facilities, two ofthe crew became ill which caused the vessel todivert in order to have them treated at a hospital.Both died.The Court ruled that death benefits had tobe paid by owners as under Section 20 (A) ofthe POEA Standard Employment Contract,“the death of a seaman during the term of hisemployment makes the employer liable to theformer’s heirs for death compensation benefits.”“The employer becomes liable once it isestablished that the seaman died during the effectivityof his employment contract.”The exception to the rule is if the employercan successfully prove that the seaman’s deathwas caused by an injury directly attributable tohis deliberate or wilful act. The Court ruledthat there is not enough evidence to prove thereal cause of death of the seamen. The autopsyreports showed the cause of death as “acutebronchitis with pneumonia and severe tetanus”.These do not prove that the injuries,which allegedly caused the deaths, were self-inflicted.Would the Court have decided otherwisehad the revised POEA SEC, which provides for‘work-related’ death, been in force?■NewsfromHong KongSpotlight on Hong Kong■ ■ Some very prominent people have visited Hong Konglately. Both Chinese President Jiang Zhemin and US ex-President Bill Clinton were in Hong Kong for the GlobalForum 2001. The focus of the discussions centered on Chinajoining the WTO and the importance of the Asian regionas the future driving force in the global economy.China’s economy is continuing to grow and does not seemvery affected by the recent slowdowns elsewhere.Everyone in the region is looking for a stable and reliablebusiness environment. The economies of Japan, Korea,Taiwan, the Philippines, Thailand and Indonesia havebeen a bit sluggish lately. There has also been some politicalinstability in the region. People are now asking their politiciansfor a sound political platform upon which a longtermplan for sustained economical growth can be built.We aim to provide shipowners with a stable and reliableinsurance environment. We have seen an increased interestin The Swedish Club in Hong Kong lately since one of theH&M insurers in the area went bankrupt. For the last fewyears, HIH has been providing H&M insurance at premiumlevels well below their competitors. Reality did eventuallycatch up with them. As a result of the bankruptcy, shipownersand their brokers have been scrambling to find newcapacity, get back their paid premiums and get security foroutstanding claims. Some have realised that there is nosuch thing as a free lunch and that stability and reliabilityare worth a lot.■Tord NilssonMANAGING DIRECTORThe Swedish Club Hong Kong Ltd.25

Finance / News from Tokyo / Basic FactsTHE SWEDISH CLUB LETTER 2–2001Accounts 2000: A Good Resultin a Difficult MarketThe Japaneseshippingindustry isdoing wellJan RydenfeltDIRECTORFinance & AdministrationDepartmentThe Swedish Club, Göteborg■ ■ “We are proud to present...” is a commonly used introductionin show-business, and we can with good cause use the samephrase when presenting our result for last year. Although a surplusof USD 1.7 million, which was the bottom lineresult for 2000, is nothing exceptional in the Club’s history,it was satisfactory when you take the market conditionsinto consideration.The marine insurance market continued to be characterisedby favourable premium levels for the shipowners,and many of the insurance companies – in particularthose writing Hull – made substantial losses. The attractivepremium levels that the Club offered its members, in combinationwith the turbulence in the financial markets, made a surplushard to expect. But a combination of quality members, luck and alittle bit of skill saved us from showing red figures.Gross premiums earned of USD 54.0 million were slightly lowerthan for 1999. But also the reinsurers premiums were lower,so net premiums were at the same level as 1999. The gross claimsof USD 57.4 million were USD 5.6 million higher than for 1999.But as a larger portion of the claims was on the reinsurers´ account,net claims were actually lower. The underwriting resultshowed a loss of USD 2.7 million, compared to a loss of USD 5.1million for 1999.The administrative expenses of USD 7.3 million were USD 0.8million lower than for 1999. There were two reasons for this. Thefirst was simply that the real costs were lower, but the main reasonwas due to a currency effect. Most of our costs are in SEK andas the Swedish crown lost in value against the dollar and that meantlower operating costs in dollar terms.SPP, the largest life and pension insurance company in Swedendecided last year to refund almost USD 8 billion of excess pensionscheme payments to the about 40,000 companies that makeup their clients. The Swedish Club’s share of this refund wasUSD 2.9 million. This money was treated as ‘other income’ inour income statement.The investment income of USD 8.9 million was almost at thesame level as for 1999 (USD 9.4 million). Considering the turbulentstockmarkets – the world index was down 13 per cent lastyear – this was very satisfactory. One reason for the good resultwas that in August the Club decided to reallocate one third of itsNordic equity portfolio – corresponding to USD 10 million –into US bonds, and the US bond market, the best performingmajor bond market last year, performed well during the autumn.This timely reallocation improved the financial result by morethan USD 1.5 million.This year has started up with further losses on the equity portfolioand for the time being we forecast a loss for 2001. We believethat most other marine insurance companies are in the samesituation. As one of the financially strongest P&I clubs among theInternational Group we do, however, believe that we can continueto offer our members competitive premium levels not onlyfor P&I but also for Hull.■NewsfromTokyo■ ■ In April, the newPrime Minister, MrKoizumi was elected.His slogan has been tochange everything.Most Japanese peoplesupport him and expecthim to break the present blockadesituation in Japan.We had good news in early May thatthe Crown Princess was pregnant. It isexpected that she will give birth in earlyDecember of this year. So Japanesepeople feel that the Japanese economywill improve in the second half of thisyear.At the end of May, major shippingcompanies and ship builders presentedtheir annual balance sheets. Most shippingcompanies show a dramatic returnto profitability and major ship buildersalso showed good results. So, the Japaneseshipping industry is doing well.On the other hand, the Japanese insurancemarket, in particular the marineinsurance market, shows no sign ofincreased premium levels. It has remainedvery soft. The present position isconsidered to continue to the end ofthis year. ■Ryozou ImaiGENERAL MANAGERThe Swedish Club JapanBASIC FACTSPER JUNE 1 ST 2001Number of vessels entered 1,310GT (million) 68.0Insured value (USD million) 20,453Gross premium (USD million) 57.0Average age 12.8Hull & MachineryNumber of vessels entered 749GT (million) 21.9GT Covered 10.7Protection & IndemnityNumber of vessels entered 799GT (million) 14.9Freight, Demurrage & DefenceNumber of vessels entered 337GT (million) 8.226

THE SWEDISH CLUB LETTER 2–2001SalvageTwo new SCOPICsalvage casesCaptain Lars LandeliusSALVAGE MASTERClaims & Legal SupportDepartmentThe Swedish Club, Göteborg■ ■ We have just completed our second salvagecase in Japan within the last seven months.Both of them were contracted to the Japanesesalvage company Nippon Salvage CompanyLtd. on Lloyd’s Open Form with SCOPIC(Special Compensation P&I Clause).The first case involved a 36,000 DWT producttanker that had run aground on a reef nearIshigaki Island, one of the southern most Japaneseislands not far from Taiwan.The vessel was in ballast with inerted tanksafter the last cargo of gasoline. She ran agroundduring bad weather and suffered bottom damageresulting in several breached double bottomballast tanks as well as fuel oil tanks.The salvors invoked the SCOPIC clause andthe author acted as SCR (Shipowners CasualtyRepresentative) during the salvage operation.After transferring diesel oil and fuel oil fromthe breached and exposed oil tanks and pressurisingthe breached double bottom ballasttanks, the ship was successfully refloated fivedays after the grounding. After diving inspectionswere completed and some temporaryrepairs had been carried out, theship was towed to a shipyard in Chinawhere she was drydocked.Due to the extensivestructural damage, theship was eventually declareda constructive total loss and soldfor scrap.The other salvage case in Japan took place inMay this year and involved a 21,000 DWTmulti-purpose general cargo ship that had runover a shallow spot and ripped up the doublebottom tanks and cargo holds no. 1 and 2.The ship proceeded to anchor off Shikoku Islandwhile both cargo holds no. 1 and 2 wereflooding.The salvors tried to introduce buoyancy intothe foreship by connecting and pressurising thebreached double bottom tanks and the forepeaktank.The vessel remained afloat for almost a weekwhile negotiations with the Coast Guard, variousgovernment agencies, as well as TheFishermen’s Union went on in order to obtainpermission to beach the vessel. One week afterSALVAGE REVIEWthe initial incident, the casualty was towed inand beached in a sheltered bay after some sevenpearl oyster farms had been removed.After beaching, the hatch coaming onhatch no. 1 was just over the water levelat low water.All submerged containersin hold no. 1 were removed.The salvage divers managed toweld plate patches over the rapturedbilge wells in holds one and two. Thetwo flooded cargo holds were then pumped outand the ship was brought up to even keel.In the last phase of the salvage operation theship was towed to Kokura via the KanmonStrait and the salvage contract was terminated.Later all cargo was discharged before the shipwas towed to a repair yard.This salvage operation was also conductedon the basis of a Lloyd’s Open Form 2000 withinvoked SCOPIC clause and the author actingas SCR. The whole operation took 18 days andwas terminated at the end of May 2001.Both these salvage cases concerned vesselscovered by The Swedish Club for both Hulland P&I.■27

Club Information / News from LondonNew movesin London and Piraeus■ ■ Ken Bright took up the post of General Manager of The Swedish Club’sLondon office in early June. He succeeds Fredrik Kruse, who has moved toGreece to reinforce the P&I team in the Piraeus office headed by Clas Rydén.A former Director of Tindall, Riley (Marine), Ken Bright retired in 1997 after26 years with the Britannia Club managers. His long career in P&I began withSteamship Mutual, where he spent 15 years prior to moving to Tindall, Riley.The Swedish Club is fortunate to have these extremely experienced managersin place in the strategic centres of London and Piraeus. The need for their expertisein P&I claims handling reflects the continued emphasis on direct servicefrom the Club’s offices worldwide.Fredrik Kruse moved to London in 1998, to open The Swedish Club’s Londonoffice in Fountain House, Fenchurch Street, in March of that year. He also supervisedthe Club’s move, last December, to new and larger premises at 100Fenchurch Street.Reflecting on his time in London, Fredrik Kruse said: “My main task – to establishThe Swedish Club in London – is now complete. Over the past three years,the London team has expanded and I am sure our activities in this major centrewill continue to grow in a changing market.”Fredrik Kruse was based at the Club’s Piraeus office during the early 1980s. Hewelcomes his return: “The Greek membership has always been of great significanceto the Club. The Greek market is exciting and there is much potential forgrowth.”Ken Bright, meanwhile, has settled into his new post in London. He said:“One factor has struck me more than any other – the unusually close relationshipbetween the Club and its members. One of my priorities is to ensure that thistradition continues in London.”■Next stop Piraeus, Greece■ ■ As of June this year next stop for me will be Piraeus,Greece. This will not be a new experience for me since Iworked previously in our Piraeus office in the early1980’s. I have always had a high regard for our GreekMembers, some of whom I know very well and otherswho are new and I look forward to getting to know thembetter.I have spent three and a half years in London and it hasbeen an exciting and challenging time. The SwedishClub is now well established in the London market and Ibelieve that there is great potential for us here, especiallynow that the insurance market seems to be regaining itssenses. I hope that London brokers will be looking moreto The Swedish Club as a competitive alternative in thefuture.Our FD&D team has never been as strong as it is todayand it will be further reinforced in October 2001 whenAnders Leissner from our Göteborg office joins the teamin London.I would like to take this opportunity to welcome mysuccessor Ken Bright to The Swedish Club. ■Fredrik KruseGENERAL MANAGERThe Swedish Club U.K.NewsfromLondonTHE SWEDISH CLUB LETTER 2–2001The Swedish Club Academylaunches the MarineInsurance Course■ ■ On May 14 th – 18 th the Club held its first Marine InsuranceCourse at its headoffice in Göteborg. The five-daycourse was developed as a response to the increasing numberof requests received from members, brokers and other businessassociates to offer their employees an introduction tomarine insurance. In order to provide best possible training,as well as making the best use of the Club’s resources, theClub decided to gather all these people on the same occasion.Owing to the Club’s All-in-One concept, the Club is wellequipped to cover all relevant, both practical and theoretical,aspects of marine insurance. The course, which consisted of26 modules, spanned from the history of marine insurance tothe latest developments within the H&M, P&I and FD&Darea. Topics dealt with included shipowners’ insurance requirements,re-insurance, salvage, collision, adjusting, loss ofhire, liability in respect of persons, cargo and pollution, arrestof ships and much more. One afternoon was spent dealingwith surveys, technical assistance and loss prevention.The course involved Club staff from the Claims & LegalSupport, Loss Prevention & Technical and Underwriting &Marketing departments. In total, 17 staff members participatedas lecturers during the course. The large number of lecturersis an important part of the course concept since the participantswill get excellent opportunities to acquaint themselveswith Club staff and establish useful relations for their futurework.Furthermore, the course enabled people from differentgeographical regions to come together and share views andideas based on their respective experiences. The 17 courseparticipants came from China, Cyprus, England, Germany,the Philippines, Sweden and Turkey.Thanks to the positive outcome of the course evaluations,the Club feels confident in its decision to follow up the coursewith a new one next year. The preliminary date for the nextClub Evening inHamburgAt the Club Evening inHamburg May 8 th , some 40guests were listening withinterest to the paper heldby our Claims DirectorLars Rhodin. The topic forthe evening was the Club’sfamous All-in-One solution,which is of attractionto the Club’s members andtheir brokers. An excellentopen buffet was served onthe rim of the Elbe with thesun setting over the horizon.28

THE SWEDISH CLUB LETTER 2–2001SeminarsFrom left to right: Mr Johan Markström WisbyTankers AB, Ms Elizabeth Ramirez SwanShipping Corp, Mr Lam Wing Hoi Patt Manfield& Co Ltd, Mr Jonathan Holloway Reederei”Nord” Klaus Odendorff, Mr Tam Chuck HionPatt Manfield & Co Ltd, Mr Peter RubinsteinWisby Tankers AB, Mr Simon Lovell AlexanderForbes, Mr Ulf Olsson B&N Transbulk AB, MrClaus Walden Ganymed Shipping GmbH, MrKen Littlejohn The Swedish Club, Mr Leif-ErikTullock B&N Nordsjöfrakt AB, Mr BjarneKoitrand Rederi AB Brevik, Ms Aygol ZarakoluGenell Denizcilik Nakliyate A.S., Ms IngerLanderholm Delta Lambert AB, Ms UlrikaSamuelsson Holy House Shipping.Marine Insurance Course has been set to April22 nd -26 th 2002. Course invitations will be sentout at the beginning of next year complementedby an online registration facility at our website.■Lars Rhodin, Director Claims & Legal Support Department, sharing his experience in Hullinsurance with the participants.From our guests at the seminar you will note Mr Uwe Jakubowski, NSBNiederelbe Schiffahrtsgesellschaft, Mr Manfred Schmidt, Junge & Co. and MrDieter Jaufmann, F. Laeisz Schiffahrtsgesellschaft and......at the buffet Harriet Lindh from the Club together with MrWinfried Elson from F. Laeisz Schiffahrtsgesellschaft and MrHelmut Meier from AON Jauch & Hübener.29

Club InformationTHE SWEDISH CLUB LETTER 2–2001STAFF NEWSKen Bright, hasbeen appointedGeneral Managerof The SwedishClub’s Londonoffice. He took upthe appointment inearly June. Kensucceeds FredrikKruse, who moves to Greece, joiningthe Piraeus office headed byClas Rydén.Interested audience at the seminar in Greece.Maritime Compliance Program RequirementsMaritime Compliance ProgramRequirements underU.S. Law seminars arrangedby The Swedish Club inGreece, Hong Kong andSingapore together withHaight, Gardner, Holland &Knight on April 26 th , 28 thand May 3 rd drew bigcrowds in all places. Recentdevelopments in the U.S. inrelation to the Oil PollutionAct of 1990 has increasedthe threat of criminal prosecutionfor pollution incidentsand the potentialliability of officers anddirectors of corporationstrading their vessels to theU.S. Big fines and prison forsuch individuals might bethe result of an oil pollutionincident even if the incidentis the result of an accidentor the mere negligence ofthe crew.Speakers at the seminar in Greece from left to right: Mr Brian Starer, Haight,Gardner, Holland & Knight, Nick Adams, The Swedish Club Greece, Mr DennisBryant, Haight, Gardner, Holland & Knight and Ken Stewart, The SwedishClub Greece...Fredrik Kruse, hasbeen appointedSenior ClaimsManager in ourPiraeus office afterthree years as GeneralManager ofthe London office.Peter Stålberg, StaffSurveyor, has returnedto the headoffice after two anda half years in ourHong Kong office.Peter Johansson, atpresent Staff Surveyorin the headoffice, will replacePeter Stålberg inour Hong Kongoffice in the middleof July.Anders Leissner,will be assigned tothe London officeat the beginning ofOctober to focuson FD&D cases.Anders has workedas a claims executiveat the headoffice for the last three years sharinghis time between P&I and FD&D.Hikari Sugishita, The Swedish ClubJapan, will be on maternity leavefrom the beginning of July until theend of this year. Ms Miyuki Horiwill assist our Tokyo office duringher absence.Jessika Ingvarsson, has resignedfrom the Club after three years asfinance assistant in the head office.We wish her success in her futurecareer....and from the seminar in Hong Kong from left to right: Ruizong Wang fromThe Swedish Club Hong Kong, Mr Dennis Bryant and Mr Brian Starer fromHaight, Gardner, Holland & Knight.Ken Stewart, has resigned from theClub after two and a half years asclaims manager in our Piraeus office.We wish him success in hisfuture career.30

Club InformationPhase two of SCOL now available!As you may recall, in March we launched SCOL (Swedish Club OnLine) – a new onlineservice for members and appointed brokers whichprovides direct access to claims data spanning afive-year period. SCOL-registered members nowhave password controlled 24-hour access to claimsrecords and summaries of current claims status.In June SCOL phase two was launched including benchmarking features, run-off trianglesand more detailed claims information. Electronically produced certificates andmore detailed insurance information are now also available.Sign-up now!It is our intention to let members and their brokers use SCOL and thereby discontinuesending the out-dated, long computer print-outs. By changing the records period to fiveyears also for Hull & Machinery, SCOL provides updated records every night. Theserecords will be used as statistics for renewals. With the claims information accessiblethrough SCOL, members may control the status of their claims at any time, therebyavoiding such discussions at renewals.Members and brokers not yet signed up for SCOL are urged to do so as soon aspossible. During the summer it will be the last time the Club will send out the claimssummary computer print-outs.Apply for SCOL now either through our website at www.swedishclub.comor by e-mail to scol@swedishclub.com.PUBLIC HOLIDAYSCLUB DIARYwhen The Swedish Club offices are closedIn case of emergency please call the following numbers.HEAD OFFICESWEDEN November 3 rd All Saints’ DayEmergency tel+46 31 151 328GREECE August 15 th AssumptionEmergency tel October 28 th National Day+30 944 530 856HONG KONG July 2 nd The day followingEmergency telHong Kong Special+852 2598 6464 Administration RegionEstablishment DayOctober 1 st National DayOctober 2 nd The day following theChinese Mid-Autumn FestivalOctober 25 th Chung Yeung FestivalJAPAN24 hour tel July 20 th Marine Day+81 3 5442 5466 September 15 th Respect-for-the-Aged DaySeptember 23 rd Autumnal Equinox daySeptember 24 th The day followingAutumnal Equinox DayOctober 8 th Health-Sports DayNovember 3 rd Culture DayNovember 23 rd Labour Thanksgiving DayUNITED KINGDOM August 27 th August Bank HolidayEmergency tel+44 20 7397 4999August 23 rd 2001Late summer dinner formembers and associates inStockholmOctober 2 nd 2001Club Evening for membersand associates in GöteborgOctober 4 th 2001Club Evening for membersand associates in StockholmOctober 11 th 2001Reception in PiraeusOctober 11 th 2001Board Meeting in PiraeusOctober 17 th 2001Insurance Brokers’ Day inGöteborgDecember 4 th 2001Winter lunch for membersand associates in GöteborgDecember 4 th 2001Christmas dinner for membersand associates on DonsöDecember 6 th 2001Dinner for members and associatesin SkärhamnDecember 12 th 2001Winter dinner for membersand associates in PiraeusApril 12 th 2002Board Meeting in OsloApril 22 nd -26 th 2002Marine Insurance Course inGöteborgJune 12 th 2002Board Meeting in GöteborgJune 13 th 2002Annual General Meetingin Göteborg31

The Swedish Club OfficesHEAD OFFICE SWEDENGullbergs Strandgata 6, P.O. Box 171SE-401 22 Göteborg, SwedenTel +46 31 638 400, Fax +46 31 156 711E-mail swedish.club@swedishclub.comEmergency tel +46 31 151 328GREECE5-7, Agiou NicolaouGR-185 37 Piraeus, GreeceTel +30 1 452 2397, Fax +30 1 452 5957E-mail mail.piraeus@swedishclub.comEmergency tel +30 944 530 856HONG KONGSuite 6306, Central Plaza18 Harbour Road, Wanchai, Hong KongTel +852 2598 6238, Fax +852 2845 9203E-mail mail.hongkong@swedishclub.comEmergency tel +852 2598 6464JAPANSuzuyo Hamamatsucho Building 5F.2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, JapanTel +81 3 5442 5466 (24 hour tel), Fax +81 3 5442 5922E-mail mail.tokyo@swedishclub.comUNITED KINGDOM100 Fenchurch StreetLondon EC3M 5DJ, United KingdomTel +44 20 7397 4950, Fax +44 20 7397 4951E-mail mail.london@swedishclub.comEmergency tel +44 20 7397 4999WEBSITE www.swedishclub.com