BOW WAVE 243

Bow Wave Issue 243--Caveat Welder Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2004 WavyLine.com	Issue No 243 19 Jul 04
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. In the Wake--The View of Gray Page in July
3. North of England Enjoys MSC Carla Recovery
4. The (South African) Institute of Chartered Shipbrokers
5. Berkshire Hathaway--Coming to Get You?
6. And Finally...

1. Welcome

Summer time an' the livin' is easy,
Fish are jumpin' an' the cotton is high.
Oh, yo' daddy's rich, and yo' ma' is good-lookin', So hush, little baby, don' yo' cry.

Ira Gershwin and DuBose Heyward, Summertime,
a song in the play "Porgy and Bess"

New Readers this week include:

Marine and Reefer Consultant John Newton
Michael McGrath of ChevronTexaco
Claims man Luc Gerits of Axa
John Barclay
Solicitor Iain Butterworth of AM Jackson in Hull

News of Readers

Jonathan L. Jones has esigned from Topmar Shipping Corporation.

Contact him at:-

jjones@otenet.gr

Paul Pelling after a long career in insurance broking has joined the Underwriting Department of the UK Club.

Mary Thompson is on the move on as a result of Denton Wilde's decision to close all four of their Asian offices by the end of this July.

She is joining the firm of Kennedys as a partner in their Hong Kong office from 1 August

Contact her at(already active):_

m.thomson@kennedys.com.hk

Readers Write

From David Browne:-

I regret to inform your Readers of the very sad news that, after a long courageous battle against cancer, Andy Moore passed away on Monday, 12th July 2004.

A funeral service will be held at St. Bartholomew's Church, Chipping, (Near Preston), Lancashire, UK, at 1100 hours on Tuesday, 20th July 2004.

Cards and letters of condolence should be sent to Catherine Moore at :

Saunderake House
Chipping PR3 2QR
United Kingdon

In preference to flowers, donations should be sent to either :

1. The Missions to Seaman Hong Kong
c/o Andrew Moore & Associates Ltd, 2703 Universal Trade Centre, 3 Arbuthnot Road, Central, Hong Kong.

or, alternatively to,

2. Derian House, care of Catherine Moore at Saunderake, address above.

Derian House is a hospice dedicated to the care of children suffering from terminal diseases, and was a charity close to Andy's heart.

Should any of you wish to attend the funeral, we should be grateful if you would kindly let us know as soon as practicable. If you have any enquiries, then please call us on the numbers shown below.

Andy had many friends, and we should be grateful if you could kindly contact any other friends who we may have omitted from the above circulation list.

Andrew Moore & Associates Ltd.
tel:(852) 2861 3313
fax:(852) 2865 6571

http://www.andrew-moore.com

Spile Harding in Mombasa,Kenya writes:-

I thought I would give you an idea on how the ISPS works here at present. The Kenya Ports Authority are in full swing but the local shipping agents have their problems sorting out what they should be doing in line with what the Code is understood to be. Over the last month we have encountered two, not one, agents on two separate occasions taking a totally different approach on behalf of their Principals with no thought about what the Port Authority expects.

Question from Agent to Contractor
" Are you licenced with the Port and are you and your men fully conversant with the ISPS Code?" (No problem with that.) and another question for a different vessel.
"Can you reduce your rates to $80 or less per day or the owner will not employ you? - And anyway he expects the Port to supply the appropriate Levels of Security for the vessel without the use of Contractors."

Obviously they, the agents and some owners have not read the Book, or am I missing something here? Answers on a postcard please.

Contact him at:-

harding@spicamarine.co.ke

So far four Readers on the more visual side of the spectrum have responded with suggestions for a logo for the new improved Bow Wave website which will be launched soon. If there are any more Readers with a flair for such things who feel moved to add their ideas, please do not tarry.

Many thanks to those clever analysts over at Gray Page for their latest instalment.

Enjoy.

2. In the Wake--The View of Gray Page in July

The Recruitment of Seafarers - Is All In Good Faith?

If seafarers do not have enough issues to deal with when they actually have a job, we should also spare a thought for those seafarers who are trying hard to even get to that stage. There have always been a variety of practices that charge fees for a service before delivery, and paying fees to an employment agency just to register your name on their books is just one of them. The sums involved are generally small in the grand scheme of things, perhaps US$100 to US$200, but when you have no job and no money, that is a fortune indeed on good faith alone. Whilst there is nothing illegal in charging a job seeker to register their c.v. for a fee where that fee is clear from the start, we do wonder where the incentive lies for an agency to put you forward for a job after you have paid that fee. The ITF have some views on what those 'incentives' are, and don't mince their words with regard to some specific agencies. For details, see the July news section at:

http://www.itf.org.uk/english/newsonline/july/cruisescam.html.

Still, whatever your view on the legalities and ethics, there is, and only ever has been, one catchphrase to remember, namely "caveat emptor".

Cambodia Cleaning-Up Its Flag

Recent reports in Lloyds List say that the Cambodian Flag Administration has responded to the negative publicity surrounding its image as a flag of convenience by seeking help in the drafting of new maritime laws. Professor Eric van Hooydonk of the University of Antwerp has been engaged by the Cambodian Ministry of Public Works to conduct the drafting of the new flag administration laws, with a view to the discussion of the proposals and implementation on new legislation at the end of 2004. Amongst this review will apparently be the State's obligations to ensure a genuine link between the State and the ship. Exactly what will come is yet to be seen, but these efforts must be applauded. The question is, will any others follow suit?

OPL Bunkering At Singapore

After the 20th July 2004, perhaps you should think again if you intend to call to Singapore in order to lift bunkers "off port limits" (OPL) - at least this seems to be the message given by the Maritime & Port Authority (MPA), According to pundits at the respected bunkering e-zine Bunkerworld (www.bunkerworld.com), the MPA are imposing new conditions on barges and tankers carrying
"oil products" that operate OPL, or on the high seas, before returning back to Singapore. As from the 20th of this month, barges intending to exit port limits, and are not engaged in an international journey to another port, will require to have written approval from the Harbour Master, who is empowered to set whatever conditions he deems fit, or deny the permission, a situation that would likely kill the practice of bunker deliveries OPL. The action ostensibly stems from worries that oil products and fuel oil returning to Singapore aboard such vessels 'might' be of an unknown source and represent a contamination risk. Having emerged from the negative publicity surrounding organised bunkering scams in the Singapore bunker market, the MPA is obviously trying to close any loop-holes that may risk the quality assurance tag applied to the Island nation. Others believe the motivation may be as much a worry over security issues as it is the quality of fuel oils, but what will be the effect to the Singapore bunker market? Some say there will be little impact, largely as the proportion of OPL supplies to those inside port limits is very small and of low volume. Still, there appears to be a lack of any hard figures as to what the value of OPL bunkering really is, so the pinch may yet be felt all round.

Contact GrayPage Limited at:

enquiries@graypagelimited.com

http://www.graypagelimited.com

3. North of England Enjoys MSC Carla Recovery

News reaches us this week of the success of the North of England in a trial before Judge Richard Owen of the US District Court (Southern District of New York) who has held Hyundai Corporation liable to pay the North of England some $ 20 million worth of indemnity claims for faulty welding during a contract to lengthen the ship some 13 years before she broke in half at the age of 25 years in 1997 in circumstances of great celebrity.

An extract from the judgement of this rather unusual case of product liability:

"Virtually none of these serious welding flaws were visible to anyone--neither metallurgist nor sailor--after the vessel left the Hyundai Dockyard in 1984...Accordingly this flawed lengthening insert met its grievously distressing end without any reason to anticipate it on the part of the owners, the captain, the mates or seamen, in which a major storm-- though not unusual--the vessel took a number of unexpected stresses of some very major rolling and climbing and falling in conflicting seas with a number of usual waves".

In the judgment there is some reference to the problem being brought to the attention of owners and classification society during the warranty period , i.e "communicated somewhat to the shipowner" but "not emphasised", "played down" and "not followed up".

The moral of the case? Caveat Welder.

$20 million is no trifle for the free reserves of a Mutual. We wonder if it is destined for this quarter.

4. The (South African) Institute of Chartered Shipbrokers

Our attention was recently drawn by Chris Lueddeke to the activities of this energetic branch trade association whose courses are winning it new fame in the world of shipping.

Read all about it at:

http://www.icssa.co.za/

5. Berkshire Hathaway--Coming to Get You?

It used to be that whenever the planning departments of London's undercapitalised insurers convened to discuss their worst nightmares, they imagined the Swiss and the German professional reinsurers would absorb them in some future strategy, gnat like, without straining as it were. The latest buggyman hales from Omaha according to this story from the admirable Business Insurance:

BI Daily News

New company aims to combine Lloyd's players

by Sarah Veysey and Peta Miller
Posted on July 15, 2004 3:24 PM CST

LONDON--A London-based investment company is seeking to consolidate several smaller Lloyd's of London companies into a single, publicly traded entity. Michael Wade, chief executive of Rostrum Group, said that he has established Capital Insurance Holdings and the company will be listed on London's Alternative Investment Market in the next several weeks.

Mr. Wade said he hopes to attract £125 million ($232.5 million) from institutional investors and that he already has a commitment from Berkshire Hathaway Inc. to take a 25% stake, a figure Berkshire confirmed.

These funds would be used to acquire and capitalize Euclidian Group, a Lloyd's of London company that currently is supported with capital from Berkshire. Mr. Wade is a nonexecutive chairman of Euclidian.

CIH would then seek to attract the investor owners of the smaller listed Lloyd's companies--those with average market capitalization of £133 million ($247.4 million)--into the group, Mr. Wade said. This would be done on a share-for-share merger basis, consolidating the companies into a single listed entity, he noted.

The aim is to "create a quoted company that will have visibility (and) critical mass," according a CIH spokeswoman. In addition, the consolidation would reduce the cost of listing for these smaller companies, without interfering with their individual brands or underwriting, she said.

CIH has not yet approached its target companies but intends to do so within two weeks of listing, Mr. Wade said.

A Lloyd's spokeswoman declined to comment other than to say that Lloyd's had received no application regarding CIH.

Lloyd's market sources said they were doubtful that listed companies would be keen to join such a venture because, although they would retain underwriting independence, a poor underwriting decision by one member could affect the share price of the entire group.

6. And Finally...

Thanks again to Theodore James for this strong wiff of the backwoods.....

You must be a Redneck when...

1. You take your dog for a walk and you both use the same tree.
2. You can entertain yourself for more than an hour with a fly swatter.
3. Your boat has not left the driveway in 15 years. 4. The Salvation Army declines your mattress.
5. You offer to give someone the shirt off your back and they don't want it.
6. You have the local taxidermist on speed dial. 7. You come back from the dump with more than you took. 8. Your grandmother has "Ammo" on her Christmas list. 9. You think a subdivision is part of a math problem. 10. You've been involved in a custody fight over a hunting dog. 11. You know how many bales of hay your car will hold. 12. You have a rag for a gas cap.
13. Your house doesn't have curtains but your truck does. 14. You wonder how service stations keep their restrooms so clean.
15. You consider your license plate personalized because your father made it.
16. Your lifetime goal is to own a fireworks stand. 17. You sit on your roof at Christmas time hoping to fill your deer quota.
18. You have a complete set of salad bowls and they all say Cool Whip on the side.
19. The biggest city you've ever been to is Wal-Mart. 20. You've used your ironing board as a buffet table. 21. You think a quarter horse is that ride in front of K-Mart. 22. Your neighbors think you're a detective because a cop always brings you home.
23. You missed 5th grade graduation because you had jury duty. 24. You think fast food is hitting a deer at 65 mph

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