Finalisation of the Polar Code the concerns ... · Finalisation of the Polar Code – the concerns...

Finalisation of the Polar Code – the

concerns & contributions of the

insurance industry

Michael Kingston

Marine Trade & Energy Group, DWF LLP

Private & Confidential. Not for distribution.

©DWF LLP 2014 www.dwf.co.uk

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The Finalisation of the Polar Code: The concerns and contribution of the insurance industry.

British Insurance Law Associtation, Lloyd’s Old Library, Lloyd’s of London

10.04.2015

Michael Kingston

Marine Trade & Energy DWF LLP

10 April 2015



International Maritime Organisation (IMO)

3



• The Polar Code is not a stand alone Convention. It will come into force as an

amendment to 3 existing Conventions:

• International Convention for the Prevention of Pollution from Ships (MARPOL)

Adoption: 1973 (Convention), 1978 (1978 Protocol), 1997 (Protocol - Annex VI); Entry into force: 2

October 1983 (Annexes I and II).

• The Safety of Life as Sea Convention (SOLAS) 1974

Adoption: 1 November 1974; Entry into force: 25 May 1980

• The International Convention on Standards of Training, Certification and

Watchkeeping for Seafarers, 1978 (STCW)

Adoption: 7 July 1978; Entry into force: 28 April 1984; Major revisions in 1995 and 2010

The Polar Code – Entry into force January 2017

4



Titanic – Departed Southampton 10.04.1912

Sank off Newfoundland 15.04.1912

5



Human Error – responsible for 75% of incidents

6



• Whiddy Island

• 8 January 1979

• 50 people killed

• Result – ratification of

SOLAS on a worldwide

basis thereby implementing

simple mandatory rules in

relation to inert gas systems

MV Betelgeuse, Bantry Bay, Ireland

7



• 27 March 1980


• Result – High level

review of Norwegian

regulation

Alexander L Kielland 1980, Norway

8



• July 1988


• Result –high level

review of UK

regulatory regime

Piper Alpha, UK North Sea 1988

9



• 20 April 2010


• Result – high level

review of regulation

on an

unprecedented level

Deepwater Horizon 2010

10



• The Gulf Oil Disaster and the Future of Offshore Drilling

• US Commission Report to the President

• 11 January 2011

Deep Water Horizon US Commission Report

11



Hard at work

European Union

12



OSPRAG Capping Kit

UK Review

13



Costa Concordia

14



International Convention on Civil Liability for Oil Pollution

Damage resulting from Exploration for and Exploitation of

seabed Mineral Resources – in draft since 1977

15



Polar Code –A Brief History

16



National Systems

• Finnish-Swedish

• Soviet/Russian

• Canadian

• Other

Classification Societies and

• Baltic Rules

• Higher ice classes

History of Ice Rules and Regulations

17



Finnish-Swedish System

18



• Development of the Northern Sea Route under the Soviet system was “closed”, but

used extensively for northern development and military purposes

• Gorbachev’s 1987 Murmansk declaration opened route (in principle)

• 1990 Decree/1991 Regulations established basis for international navigation

• Ice class (strength and power)

• Icebreaker escort (charged for)

• Operator competency

• Paperwork

• To date, the very limited non-Russian traffic has essentially been demonstration

voyages. The regulatory and tariff systems have been waived (“interpreted”) for

these.

Soviet/Russian system

19



• The current Canadian system is based on the Arctic Waters Pollution Prevention Act, introduced after the

pioneering voyage of the “Manhattan” opened the possibility of commercial traffic through the Canadian Arctic

• The overall system can be considered to be “risk-based”, and includes

• Design standards

• Operational control measures

• Crewing requirements

• 2002 – introduction of the Arctic Ice

Regime Shipping System (AIRS)

Canadian System

20



• Denmark imposes supplementary Port State controls for vessels travelling to

Greenland, or operating in its coastal waters

• Norway has recently introduced ne ice pilotage requirements around Svalbard

• Of the Arctic Coastal States, the US and Iceland are alone in having no specific

regulatory requirements for Arctic waters.

Other National Systems

21



• Baltic – all major classification societies have embedded the Finnish/Swedish strength

and power requirements into their rule systems (with degrees of customization)

• Polar – by the early 1990s, several classification societies had developed additional

requirements for higher ice class ships, with widely varying approaches

Classification Society Rules

22

Issue Canadian Russian ABS DNV GL LR

ASPPR CAC Old New

No. of classes 9 4 3+4

icebrea

ker

6 5 (8 if

escort

available)

6+3

icebreaker

4 4

Displacement dependency Strong Moderate Strong Strong Strong None None Moderate

Power dependency None None Weak None Weak None None Moderate

Structural design basis Elastic Elasto-

plastic

Elastic Elasto-

plastic

Elasto-

plastic

Elastic Elasto-

plastic

Elastic



• The 1970s and 1980s saw dramatic increases in Polar shipping, and many

groundbreaking technological developments

• In the late 1980s this fell away, due to the collapse in the oil price and the political

situation in the ex-USSR

• Knowledge gained, and the recognition of gaps in earlier rules and regulations led to

the introduction/upgrading of new national and class rules

• Several administrations made proposals to IMO to develop a harmonized system of

ice class rules

• IMO struck a Working Group, under the DE (ship Design and Construction)

Subcommittee, to explore options

• and develop a way ahead

1990s – Harmonisation

23



• The IMO Working Group drew on expertise from stakeholders and experts; including

representatives from Class, shipowners, and research organizations

• Consensus was reached early in the process to set up parallel groups with

overlapping membership and meetings

• IMO would develop the overall framework for the initiative

• IACS would produce detailed requirements for construction-related items

IMO Approach

24



Delimitation, according to IMO Guidelines for Ships

Operating in Polar Waters

25



• In May 2009 IMO endorsed revisions to the ‘Guidelines’. These are now

• “Guidelines for Ships Operating in Polar Waters”

• The new version was supported by all governments and by NGOs including Friends of

the Earth and shipowners and operators

• Recommendations for stability, lifesaving and crew qualifications were strengthened

• “Housekeeping” measures improved alignment with other IMO instruments.

• The definition of the Arctic was adjusted and the Antarctic was added.

Current Status

26

Polar Waters



IMO Mandatory Polar Code – MV EXPLOROER

28



•A Correspondence Group was established at DE 53 in early 2010

•The CG report, and numerous other stakeholder submissions were submitted to

IMO for consideration at DE 54 in October 2010

• DE 54, 55 and 56 Working Groups made further progress in developing the Code

•Chapters in the most advanced stages of drafting have been sent to other MSC

Subcommittees for review

•A revised target has been set to have a final draft for IMO approval by 2014

•It is unclear how environmental issues will be incorporated into the Code, due in

part to the heavy workload at MEPC. Canada, the US and the majority of Arctic

Council states continue to press for more rapid progress.

Mandatory Polar Code Time line

29



• The key principles for developing the Polar Code are to use a risk-based approach in

determining scope and to adopt a holistic approach in mitigating all risks to acceptable

levels/ minimizing risks

• The Code will have Mandatory and Recommendatory (guidance) parts

• An extensive list of hazards and risks has been developed and is being used to identify

and validate risk mitigation measures

• Four main categories are being used to consolidate hazards and risks, provisionally

listed as:

1. Environmental conditions (e.g. ice, temperatures)

2. High latitude (e.g. remoteness, communications issues)

3. Environmental sensitivity (e.g. slow recovery from damage)

4. Human element (e.g. specialized training and experience requirements, physiological effects

of polar conditions)

Overview of the Polar Code

30



• Part 1 – Safety Measures (SOLAS – related)

– Part 1 - A – mandatory requirements 12 Chapters

– Will become a new chapter XIV under SOLAS

• Part 1 - B – guidance and recommendations

• Part II – Pollution Prevention Measures (MARPOL-related)

– Part II - A – mandatory requirements 4 Chapters

– Amendments to MARPOL Annexes I, II, IV and V Oil

– Noxious Liquids

– Sewage

– Garbage

• Part II - B – guidance and recommendations

Layout of the Polar Code

31



Introduction

1 General

2 Polar Waters Operational Manual

3 Ship Structure

4 Subdivision and Stability

5 Watertight and Weathertight Integrity

6 Machinery Installations

7 Fire Safety/Protection

8 Life-saving Appliances and Arrangements

9 Safety of Navigation

10 Communication

11 Voyage Planning

12 Manning and Training Familiarity (To be included in the STCW Convention)

Part 1A: Chapters on Safety to be included in SOLAS

32



• 1.1 Application

• 1.2 Definitions

• 1.3 Certificate and survey

• 1.4 Performance standards

Chapter 1 - General

33



• •All ships in polar waters will be required to carry a PWOM in addition to their

certificate.

• •The goal of PWOM is to provide the owner, operator, master and crew with sufficient

information regarding the ship's operational capabilities and limitations in order to

support their decision-making process.

• •PWOM is similar in concept to ISM documentation, but much more definition is

provided regarding the required scope and contents

• •However, at this stage there is no real “template” – no sample PWOMs have yet been produced.

Chapter 2 - Polar Waters Operational Manual (PWOM)

34



• Structure – largely relies on IACS URs (or equivalent)

• Stability – very similar to current Guidelines

• Watertight integrity – winterization measures

• Machinery – functionality under anticipated operational conditions; refers to IACS URs

Chapters 3 - 6

35



• Fire – aims to ensure that systems function under expected environmental conditions

(winterization)

• Lifesaving – aims to provide capabilities that can deal with environmental conditions,

including abandonment onto ice where applicable, and give adequate endurance:

“maximum expected time to rescue”

• Navigation – defines supplementary equipment to deal with high latitudes, plus

winterization

• Communications – supplementary requirements for ships and survival craft

Chapters 7 - 10

36



• The Code requires any voyage plan to consider specific issues related to both safety and environmental impacts:

• the procedures required by the PWOM;

• any limitations of the hydrographic information and aids to navigation available;

• current information on the extent and type of ice and icebergs in the vicinity of the intended route;

• statistical information on ice and temperatures from former years;

• places of refuge;

• current information and measures to be taken when marine mammals are encountered relating to known areas with densities of marine mammals including seasonal migration areas;

• current information on relevant ships' routing systems, speed recommendations and vessel traffic services relating to known areas with densities of marine mammals including seasonal migration areas;

• national and international designated protected areas along the route; and

• operation in areas remote from SAR capabilities

Chapter 11: Voyage Planning

37

Nunavik - The Long way home- October 2014



• New training requirements for “ice certification” will be incorporated in amendments to SCTW, and will involve two levels of competency. It is uncertain how quickly the necessary requirements can be put in place (agenda item for HTW 2).

• The number of and level of ice certified personnel is tailored to ice conditions and ship type.

•

• Note that «ice free» means exactly that, «open water» is up to 1/10th ice cover with no ice of land origin.

• The use of supernumerary ice navigators to supplement regular crews is not allowed by the current Code, but several countries including Canada and Russia are continuing to argue for this approach.

Chapter 12 - Crewing and Training – STCW

39



• Guidance for aspects of Chapters 1, 2, 3, 8, 9, 10 and 11

• Introduces many key concepts, including interpretation of temperature requirements,

assignment of operational limitations, general contents for PWOM, equivalencies for

existing (and new) ships

Part 1B - Guidance

40



• CHAPTER 1 – PREVENTION OF OIL POLLUTION

• CHAPTER 2 – PREVENTION OF POLLUTION FROM NOXIOUS LIQUID

SUBSTANCES

• CHAPTER 3 – PREVENTION OF POLLUTION BY HARMFUL SUBSTANCES IN

PACKAGED FORM (blank)

• CHAPTER 4 – PREVENTION OF POLLUTION BY SEWAGE FROM SHIPS

• CHAPTER 5 – PREVENTION OF POLLUTION BY GARBAGE

Part 2A – The Environmental Chapters - the

MARPOL Amendments

41



• Provides zero-discharge regimes for oil, oily mixtures, and Noxious Liquid Substances

• Requires additional double-hulling measures in way of tanks for new Category A and B

ships

Chapters 1, 2 - ZERO DISCHARGE

42



• Imposes additional sewage discharge requirements near land and ice

• Imposes additional prohibitions on discharge of garbage and cargo residues near land

and ice

Chapters 4, 5

43



• Very little addition material is provided in the MEPC approved version of the Code.

• Some guidance is offered on the selection of stern tube lubricants, etc

• Application of ballast water treatment and anti-fouling measures for prevention of

transfer of invasive aquatic species is recommended

Part 2B - Guidance

44



• Polar Ship Categories

• Polar Service Temperature

• PWOM contents (also of course deals with Environmental aspects)

• Operation Limitation on Polar Ship Certificates – the POLARIS ‘ice regime’

methodology

Some Key Concepts to Understand - particularly

focusing on the safety aspects of the Polar Code.

45



• Categories provide thresholds for various requirements

• Category A ship means ships designed for operation in polar waters at least in

medium first-year ice, which may include old ice inclusions.

• Category B ship means a ship not included in Category A, designed for operation in

polar waters in at least thin first-year ice, which may include old ice inclusions.

• Category C ship means a ship designed to operate in open water or in ice conditions

less severe than those included in Categories A and B.

• Categories are linked to ice classes; in particular those under the IACS Unified

Requirements for Polar ships

Polar Ship Categories

46



IACS Polar Class Rules - Interpretation

47

• IMO Category

• A = IACS PC1 -5

• B = IACS PC6 - 7

• C = Non Ice Class

Polar

Class

Ice Description (based on WMO Sea Ice

Nomenclature)

PC 1 Year-round operation in all Polar waters

PC 2 Year-round operation in moderate multi year ice

conditions

PC 3 Year-round operation in second-year ice which

may include multi-year ice inclusions

PC 4 Year-round operation in thick first-year ice which

may include old ice inclusions

PC 5 Year-round operation in medium first-year ice

which may include old ice inclusions

PC 6 Summer/autumn operation in medium first year

ice which may include old ice inclusions

PC 7 Summer/autumn operation in thin first-year ice




• Polar Service Temperature (PST) means a temperature specified for a ship which is

intended to operate in low air temperature, which shall be set at least 100C below the

lowest MDLT for the intended area and season of operation in polar waters.

• Ship intended to operate in low air temperature means a ship which is intended to

undertake voyages to or through areas where the lowest Mean Daily Low Temperature

(MDLT) is below - 100C.

Polar Service Temperature

48



• operation in ice, as applicable;

• operation in low air temperatures, as applicable;

• communication and navigation capabilities in high latitudes;

• voyage duration;

• voyage planning to avoid ice and/or temperatures that exceed the ship's design capabilities or limitations;

• arrangements for receiving forecasts of the environmental conditions;

• means of addressing any limitations of the hydrographic, meteorological and navigational information available;

• operation of equipment required under other chapters of this Code;

• implementation of special measures to maintain equipment and system functionality under low temperatures, topside icing and the presence of sea ice, as applicable.

• (procedures for) contacting emergency response providers for salvage, SAR, spill response, etc. as applicable;

• in the case of ships intending to operate in ice, procedures for maintaining life support and ship integrity in the event of prolonged entrapment by ice.

• measures to be taken in the event of encountering ice and/or temperatures which exceed the ships design capabilities or limitations.

Contents of PWOM

49



Lloyd’s of London

50

President’s Workshop

Michael Kingston

Partner, DWF Fishburns

Michael Kingston DWF Fishburns

Åke Rohlén Arctic Marine Solutions AB

Ambassador Gustaf Lind, Government of

Sweden



Ambassador Gustaf Lind of Sweden, Chairman of Senior

Arctic Ambassadors, Lloyd’s September 2012 with Judy

Knights

52



Science of risk Prize

53

• Prize now in its fifth year

• Key objectives:

– Broaden our understanding of risk and encourage

new research into emerging risks.

– Foster stronger links between insurance and

academic/research communities

• Over 100 insurance executives, academics and other

risk experts attend annual conference at Lloyd’s

• This year’s categories: Climate Change and Natural

Hazards



Executive Summary

54

• Rapid and Disruptive Change presents uneven prospects

• Arctic likely to attract potential $100BN investment

• Significant knowledge gaps

• Arctic conditions remain challenging and unpredictable

• Environmental consequences of disasters likely to be worse

than other regions

• Politics of Arctic economic development controversial and fluid

• Continued development of Governance frameworks with

reinforcements where possible

• Risk Management is fundamental



Delimitation, according to IMO Guidelines for Ships

Operating in Polar Waters

55



Wreck Removal – The Costa Concordia

56



Global Location of Equipment

57



September 9th 2012 – Arctic Sea Ice Hits Smallest

Extent In Satellite Era ( Photo Courtesy of NASA)

58



Cruise Ship off the Greenland Coast

59


©DWF LLP 2014 www.dwf.co.uk 60

Nordvik – Northern Sea Route 2013

”Nordvik” is an Ice 1 class (L4) tanker and is only allowed to sail on the Northern Sea Route (NSR) in light Ice conditions. The ice condistions in the northeastern part of the Kara Sea were regarded as ”medium” by Roshydromet in the period when the accident happened.



Akademik Shokalskiy – Antarctic January 2013



IACS Polar Class Rules - Interpretation

62

• How can these be

• applied to a real

• operation?

• Where can a vessel

• operate?

• When can it

• operate?

Polar

Class

Ice Description (based on WMO Sea Ice

Nomenclature)

PC 1 Year-round operation in all Polar waters

PC 2 Year-round operation in moderate multi year ice

conditions

PC 3 Year-round operation in second-year ice which

may include multi-year ice inclusions

PC 4 Year-round operation in thick first-year ice which

may include old ice inclusions

PC 5 Year-round operation in medium first-year ice


PC 6 Summer/autumn operation in medium first year

ice which may include old ice inclusions

PC 7 Summer/autumn operation in thin first-year ice




Insurers’ attitude to insuring above 700 North

63



So what can we do about this to make it work?

64

• The Arctic should be divided into distinct geographical areas – based on ice conditions

– Not to detailed to start

• There shall be a number of seasons established in a year – perhaps 3-4 – that

captures ice seasons with ice coverage and hardness

– Keep it simple

– Parameters reflects IACS and IMO Polar Code

• Avoid politics – each Arctic country responsible for rules in their “sector” of the Arctic.

• Justification: The Arctic SAR agreement signed by Arctic Council member states.



Conference on Sustainable Arctic Shipping and

Marine Operations – London, M arch 11th 2014

65



Bridging the Arctic Marine Risk Gap – The need for a cross

Arctic Ice Regime – Lloyd’s Adam Room 12th March 2014

66



Progress – Recommendations for an Ice regime and forum for

best practice made to the Arctic Council in time for meeting with

IMO General Secretary

67



• MSC93: Agreement that limitations for operating in ice to be included on the

Certificate

• MSC93 proposed initial guidance on limitations for operating in ice:

• MSC93/WP.7/Add1, Para 10: in order to include the operational limitations in ice in the

certificate, the group included a guidance in square brackets in part I-B of the draft

Code, which will need to be further developed in conjunction with section 1.5 of part I-

A, before the adoption of the Code (see part I-B, Additional guidance to chapter 1,

Limiting ice capabilities for the Polar Ship Certificate).

• In this context, the group noted that the observer from IACS stated that IACS

would be willing to undertake further work on the guidance with the intention to

submit a document to MSC 94. The group also noted that some interested

delegations would cooperate with IACS on this necessary and urgent work.

Developments in Working Group at MSC93 – June

2014 – ‘Arctic wide ice regime developments’

68

Participants and structure of informal

group

Technical Group: IACS, Canada, Denmark,

Finland, Russia, Sweden

Informal Correspondence Group: email group consisting

of volunteer members from MSC93 WG

Develop Technical Content

Develop Proposal

Review and Validate

Technical Group

Informal CG

Consolidated Level ice (100% concentration) limit

Russia experience: RMRS Arctic (Arc)

Categories, RMRS Ice Categories

IACS Polar Classes Technical Background

Canada experience Canadian Arctic

Classes (CAC), Type Classes

Finland / Sweden experience: Baltic

(FSICR) Classes

Denmark experience: Baltic (FSICR) Classes in Arctic conditions

Consolidation of Existing Experience

Key Concepts: Consolidation of existing experience

Technical group’s experience with ice class rules and ship

operations in ice overlaid on initial MSC93 proposal

Goal of Technical Group:

Develop a decision making system that can be used for

voyage planning and “on the bridge” that uses the actual ice

conditions, ice class and operational mode

POLARIS

Actual ice conditions

Ice class of ship

Icebreaker escort or independent

Operate

More Cautious operation

Don’t operate

Polar Operational Limit Assessment Risk Indexing System (POLARIS)

INPUT RISK LEVEL OPERATION

POLARIS: Evaluation Criteria

(Independent Operations)

POLARIS: Speed reduction in Negative RIOs

Table 1.3 Marginal capability speed limitations

• Acknowledges that there is not a finite point when the ship cannot

operate

• Based on IACS ice class rule formulations

Incre

asin

g ice c

lass

Increasing ice thickness (severity)

Key Concepts: Partial Ice Concentration Approach

POLARIS: An operations / planning tool

• Considering a voyage through the Northwest Passage at the time of year that

historically coincides with minimum ice extent (10-29 Sep 2014)

• Two ice charts used (CIS Canadian Arctic – East & West) plot overlays the

minimum RIOs from each of three specific days (Sept 15, 22 and 29)

• Ship ice class = Baltic 1A

• NO GO!

POLARIS: An operations / planning tool

• Consider the same voyage and the same ice charts

• Change ship to ice class = PC 4

• GO! - slow speed (cautious operations) for part of the trip



Slide 77 – Franklin - Education of Industry

77

© CL Risk Solutions | CoenraadLageweg bv

78

Post Loss: Owner, Standard Club, Salvors

Salvage Risk Forecasting: - Scenario Planning

- Scenario Forecasting

- Decision Support: Successful parbuckling after

approval by Italian Authorities

CL Risk Solutions:

Scenario Planning and Decision Support

for Costa Concordia removal, 2012-2014

© CL Risk Solutions | CoenraadLageweg bv

Arctic Scenario Planning > Insurance Decision Making

Identify and quantify generic Arctic ER scenarios

(SRF)

Implement risk control requirements for Arctic

operations: a) Risk Assessment (SEMI-QUANTITATIVE)

1. Specification of generic scenario risks

2. Assessment of (emerging) operations specific risks

3. Validation against - Polar Ship Certificate and

- Polar Waters Operations Manual

b) Scenario Forecast (QUANTITATIVE)

c) Risk Control follow-up (MEASURABLE RISK REDUCTION)

1. Pre loss mitigating actions

2. Post loss ER preparedness actions

Involve in insurance acceptance process

Develop benchmark of Scenario Forecasts

79



“More than 50 fishermen feared dead in Bering Sea trawler tragedy”

More Work to –be done – Tragedy in the Bering Sea 31 March

2015

80



Learning from the lessons of history

81



Insurers’ attitude to insuring above 700 North

82

Polar Code

+

Ice Regime

+

Best Practice

=

Insurance

=

Trade & Investment

=

Sustainable Arctic Development



The Korean Ferry Tragedy – A collective failing –

International Regulation / Industry / Governments

83



Lloyd’s List Global Awards 2014

84



Ice Coverage Around Greenland

85



Map of location Citronen project Northern Greenland

86



Norwegian Coastal Administration, Department for Emergency Response

Prevention – Norwegian Coastal Administration

Traffic Separation System - TSS

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Insert does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

BILA would like to thank

Michael Kingston

Finalisation of the Polar Code the concerns ... · Finalisation of the Polar Code – the concerns...

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