Administrative Shortcomings and their Legal Implications in the context of Safe Ports

• Author: Alexander Peter McKinnon
• Position: BCom, LLB (Hons). The author wishes to acknowledge Professor Sarah Derrington, TC Beirne School of Law, University of Queensland, for her invaluable advice and comments on an earlier draft. [This paper was highly commended by the judges of the Morella Calder Prize, 2009 - Ed.]
• Pages: 186-204

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Alexander McKinnon*

The concept of ‘safe ports’ continues to be an area of critical concern for charterers and

shipowners. Traditionally viewed in light of the physical characteristics of the port in question,

the modern approach taken by the courts often includes a detailed examination of administrative

features of the port authority. In light of increased global security and health risks the recognised

principles are under scrutiny. This paper examines the nature of the safe port obligation and

analyses the important decisions dealing with administrative shortcomings. It contextualises the

emerging issues and highlights the future implications for the law of safe ports.

1 Introduction

As more than 90 per cent of global trade is carried by sea there is little doubt that the safety of the ports at which

the world’s trading fleet call is of critical concern.1 In a climate of increased security threats, the risk of

contagious disease outbreaks and more heavily scrutinised port authorities, disputes are likely to increase in this

area. Most charterparties contain a limitation on the charterer’s right to nominate the ports at which the vessel

will call: the charterer must only direct the vessel to ‘safe ports’.2 The test for whether or not a port is safe has

been left to the common law. Although it is now well-established,3 there are a number of difficulties which to

this date remain unresolved. The House of Lords has settled the question of when a port’s safety must be

adjudged.4 On the other hand, it is not entirely clear as to how closely the charterer’s obligation resembles that

of strict liability. Moreover, the relevance of the ‘abnormal occurrence’ exception appears to be gradually

drifting afar.5 In the context of unsafety due to organisational deficiencies of port authorities these matters are

crucial.

Administrative shortcomings and failures of port authorities may render a port unsafe. The law is, however,

largely unsettled. It is clear that these issues are of increasing relevance to the law of safe ports. In the 2001

grounding of the Regal Princess in Cairns, the Australian Transport Safety Bureau (ATSB) examined the

practice of permitting vessels into ports not designed to handle ships of that size.6 The report identified the

immense pressure facing port authorities: ‘There is…considerable commercial incentive, for those that benefit

directly from the visit of cruise liners, to apply pressure to the approving authority to stretch the safety

envelope.’7 It was recommended the port authority adopt a more objective method of determining a ship’s

suitability.8 Similarly, the reports into the groundings of the ANL Excellence9 in Moreton Bay and the Pasha

Bulker10 in Newcastle emphasise that administrative shortcomings are arguably a commonality in marine

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*BCom, LLB (Hons). The author wishes to acknowledge Professor Sarah Derrington, TC Beirne School of Law, University of Queensland,

for her invaluable advice and comments on an earlier draft. [This paper was highly commended by the judges of the Morella Calder Prize,

2009 – Ed.]

1 International Maritime Organisation, International Shipping and World Trade: Facts and Figures (Updated November 2008) 7.

2 See, eg, NYPE (New York Produce Exchange) Form 93, clause 5: ‘The vessel shall be employed in such lawful trades between safe ports

and safe places…; Baltime charterparty, clause 2: the vessel ‘shall be employed in lawful trades for the carriage of lawful merchandise only

between safe ports or places where the Vessel can safely lie always safely afloat’. If the charterparty does not contain an express ‘safe port’

clause one may be implied: see Howard Bennett, ‘Safe port clauses’ in D. Rhidian Thomas (ed), Legal Issues Relating to Time

Charterparties (2008) 47, 72-4.

3 See Leeds Shipping Company Ltd v Societe Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep 127 (‘The Eastern City’) (CA).

4 See Kodros Shipping Corporation v Empresa Cubana de Fletes (The Evia) (No 2) [1982] 2 Lloyd’s Rep 307 (‘The Evia (No 2)’) (HL).

5 This exception operates to exempt the charterer from liability if the situation which renders a port unsafe is an entirely abnormal or

extraneous occurrence.

6 Australian Transport Safety Bureau, Independent investigation into the grounding of the British flag passenger ship, Regal Princess, in the

Cairns harbour channel, Queensland on 16 March 2001 (September 2002) Marine Safety Investigation Report 166. The vessel was

operating in the port with very little under keel clearance. When departing the port the vessel grounded but no significant damage or

pollution was caused.

7 Ibid 16. A 1996 study revealed that the Cairns port generated approximately $1.3 billion for the region and created jobs equivalent to 9%

of the region’s workforce.

8 Ibid 17.

9 Australian Transport Safety Bureau, Independent investigation into the grounding of the Liberian registered container ship, ANL

Excellence, in Moreton Bay, Queensland, 19 July 2002 (May 2003) Marine Safety Investigation Report 181. The vessel grounded while

enroute from Point Cartwright, Queensland to the port of Brisbane while operating in reduced visibility. The pilot had ordered a course

alteration too soon. The report identified shortcomings in the visibility of temporary marking buoys and was critical of the pilot’s actions

and procedures.

10 Australian Transport Safety Bureau, Independent investigation into the grounding of the Panamanian registered bulk carrier, Pasha

Bulker, on Nobbys Beach, Newcastle, New South Wales, 8 June 2007 (May 2008) Marine Occurrence Investigation 243 Final. The vessel

grounded in gale-force conditions largely due to the incompetence of the master who ignored warning signs and did not control the vessel

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Administrative Shortcomings and Safe Ports

incidents. The investigation into the Pacific Adventurer oil spill, now in its preliminary stages, will also examine

the adequacy of warnings provided to the master.11 The decided cases underscore the importance of these and

other issues in determining whether or not a port is safe.

This paper examines the nature of the safe port obligation and critically analyses the decisions that have found

ports to be unsafe because of administrative shortcomings. It then places the emerging issues in the context of

these principles and highlights the future implications for the law of safe ports.

2 The emerging issues

It is undeniable that ports face unprecedented security risks in the current global environment.12 The spread of

contagious disease is also a major concern for governments. Not surprisingly the international community and

governments throughout the world have reacted with measures that have significant consequences for ports and

port authorities. The question of to what extent security and disease risks will render ports unsafe remains

unsettled.13

In addition, the introduction of the International Safety Management Code (ISM) may have important

consequences for the law of safe ports.14 The requirement for a Safety Management System (SMS);15 the

shipowner’s duty to ensure the master is properly qualified, fully conversant with the SMS, and given necessary

support;16 and the requirement that the shipowner establish emergency procedures,17 are arguably relevant to

whether or not dangers could be avoided by good navigation and seamanship and to the master’s negligence. As

the Code remains non-specific in nature it is difficult to determine with greater precision how it will affect the

courts’ analysis of these issues.18

These emerging issues may have important and far-reaching effects upon the way the safety of a port is

assessed. Before embarking on an analysis of the law on safe ports and how it may treat these emerging issues it

is necessary to examine the major security and health initiatives.

2.1 The International Ship and Port Facility Code (ISPS Code)

The ISPS Code entered into force on 1 July 2004 as an amendment to the International Convention for the

Safety of Life at Sea 1974 (SOLAS).19 The Code, designed to protect ports and international shipping from

terrorism, takes the approach that ‘ensuring the security of ships and port facilities is basically a risk

management activity’.20 Under the Code Contracting Governments are required to ensure security information is

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appropriately. The ATSB report found that Newcastle’s Vessel Traffic Information Centre (VTIC) had given confusing and irrelevant

advice. Masters had assumed the VTIC would advise them to leave anchorage if necessary. In addition the incident control system for the

port was activated too late. Interestingly, the ATSB made note of safety improvements the port authority had made since the grounding (p

61).

11 Australian Transport Safety Bureau, Loss of containers from Pacific Adventurer off Cape Moreton, Queensland, 11 March 2009:

Preliminary report (April 2009) 4-5. The vessel lost 31 containers overboard in gale force conditions. The containers, which were carrying

ammonium nitrate, pierced the vessel’s bunker tanks resulting in the discharge of 270 tonnes of fuel oil into the sea.

12 See especially Maritime Transport Committee, Organisation for Economic Cooperation and Development, Security in Maritime

Transport: Risk Factors and Economic Impact (July 2003). See also ‘IMO 2004: Focus on maritime security’ [2004] (3) IMO News 13.

13 See further Lucienne Carasso Bulow, ‘Charter Party Consequences of Maritime Security Initiatives’ (2006) 37 Journal of Maritime Law

and Commerce 79, 84.

14 International Convention for the Safety of Life at Sea (SOLAS), opened for signature 1 November 1974, International Maritime

Organisation (IMO), chapter IX (entered into force 25 May 1980; as amended by resolution MSC.99(73) accepted on 1 January 2002)

(International Management Code for the Safe Operation of Ships and for Pollution Prevention) (‘ISM Code’). See also Philip Anderson, ISM

Code: A practical guide to the legal and insurance implications (1998). The Code entered into force on 1 July 1998.

15 ISM Code, [1.4].

16 ISM Code, [6].

17 ISM Code, [8].

18 For an interesting discussion of these issues see Elefterios Katarelos and Aristotelis Alexopoulos, ‘The Master’s Role in Relation to the

Safety of the Port, particularly under the Concept of the ISM and the ISPS Codes’ (Paper presented at the International Symposium on

Maritime Safety, Security and Environmental Protection, Athens, Greece, 20-21 September 2007). For example, the authors suggest that the

‘ISM Code has…altered considerably the Master’s position’ (at 3).

19 International Convention for the Safety of Life at Sea (SOLAS), opened for signature 1 November 1974, International Maritime

Organisation (IMO), chapter XI-2 (entered into force 25 May 1980; as amended by the Conference of Contracting Governments to the

International Convention for the Safety of Life at Sea, 1974: 9 - 13 December 2002) (‘ISPS Code’). Part A of the Code is mandatory and

part B provides guidelines on compliance with part A.

20 ‘IMO 2004: Focus on maritime security’ [2004] (3) IMO News 13, 16. See also Natalie Klein, ‘Legal limitations on ensuring Australia’s

maritime security’ [2006] 7(2) Melbourne Journal of International Law 306; Z. Oya Ozcayir, Port State Control (2nd ed, 2004) 96.

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