Keep calm and carry on
COMMENT: When faced with an explosion incident – perhaps during cargo loading or discharge operations – calmness is vital for effective co-ordination. Given there will, inevitably, be competing commercial interests, formulating a purposeful, strategic approach is key, writes Wole Olufunwa.
Corporate responsibility requires, above all, the prioritisation of human life.
Following the four steps below will help a port to respond effectively and responsibly. Firstly, ensure a rapid response. A swift response is critical to:
- Establish the facts;
- Manage the investigation by authorities and regulators;
- Control and maintain legal privilege;
- Assist personnel; and
- Limit your exposure to legal liability (whether corporate or personnel).
To get a handle on all the parties involved, pinpoint what needs to be investigated and who the responsible people are. Your first step is to get the appropriate personnel on site.
With multiple parties involved, and stakeholders located around the world, it's an advantage to have a team located across multiple time zones, which can be mobilised at short notice and respond at pace, enabling real-time decision-making.
You may need correspondents and skilled experts, such as fire experts, naval architects, cargo experts or general engineering surveyors, to deal with technical aspects in assessing cause, damage and required repairs.
Time is of the essence as substantial delays to port or vessel operations can lead to large claims.
Secondly, follow procedures. When things go wrong, it is easy to forget that you already have crisis management procedures. Ensure you put these procedures into operation, quickly and effectively.
Deal with privacy and reputational aspects as early and positively as possible, to avoid any snowballing of negative news.
Your strict legal position must be balanced with your privacy and reputation — both external and internal.
Root of problems
Thirdly, anticipate future problems. Understanding the various parties' priorities will help you to understand — and minimise — potential difficulties, as you work to restore all parties' operations. As an example, ports organisations want to minimise operational disruption (reducing port closure wherever possible), plant and machinery repairs and potential clean-up costs. Also, they, potentially, want to secure their claim, if it's substantial — a large, expensive vessel is undoubtedly a good way to do so.
For charterers, their commercial interests are to deliver on time and preserve their reputation as a contractual carrier. They want strong relationships with the voyage charterers and carriers they charter from. Trust is key but they will want to avoid incurrence of demurrage. They also need to understand any danger elements to the cargo's shipment."
Vessel owners want to avoid delay to their vessels' journeys, especially in unpredictable jurisdictions that may arrest their vessel. They need to avoid detentions and vessel damage, and to know that charterers will give proper and lawful instructions to the master and trade the vessel safely. They are concerned about third-party cargo claims and claims in tort brought against the vessel. To minimise those risks, they need to ensure their vessel is seaworthy, with competent master and crew.
Stevedores/longshoremen may be the owner or charterer's agent. They are usually not financially well-endowed and will need certain protections from their principal in case claims are brought. They need to have proper safeguards in place for their employees' wellbeing, and competent and reliable employees and sub-contractors to develop good relationships with the port and contracting parties.
Fourthly, and most importantly, put life first. The overarching goal of all parties should be to ensure safety and prevent (further) loss of life and injury.
Companies are, increasingly, monitoring and reducing injury rates. International companies factor in less established companies' compliance practices — especially those in less developed states — when deciding whether or not to do business.
There is, therefore, a direct financial component of not putting safety and welfare first — in addition to indirect costs arising out of reputational damage.
This is one instance where commercial interests should be, at least temporarily, put aside — and this is especially pertinent when corporate responsibility on a global level is under the microscope.
Wole Olufunwa is senior associate with HFW, based in Singapore. Wole is a specialist dry shipping and commodities disputes lawyer in the company’s Singapore office. He can be contacted on T: +65 6411 5344, E: firstname.lastname@example.org.
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