By Brian Dunn
Investigations into marine casualties can take on many different forms, depending on their severity, and whether they’re deemed a civil or criminal offence. When a small incident occurs, it’s usually dealt with internally. But if it’s a major accident, “more people come to the party,” said Steve Matterson, Director, Risk & Insurance for BC Ferries. “You can get between 14-18 different groups of people who want to get involved in the investigation, such as the Transportation Safety Board (TSB), RCMP, media, insurers, environmental groups, plaintiffs and federal and provincial agencies. The challenge is that they want the information now, but we still have to operate a business,” he said during a presentation at the 26th Annual Borden Ladner Gervais Maritime Law Seminar in Montreal on December 5.
Coordination is the biggest challenge and privacy laws dictate what information can and cannot be released, and every agency has a specific focus. You can either fight the different groups or take a more cooperative approach, said Mr. Matterson. BC Ferries set up a program called SailSafe to transform its safety culture, and to become a world leader in safety management. “If you get the safety portion right, everything else will follow,” said Mr. Matterson.
In 2009, the company opened an Operations and Security Centre which is staffed 24/7 to monitor vessel traffic. When a vessel strays off course, an alarm is triggered, which is not popular on the bridge. Now, the bridge will phone Operations first before altering course. If this procedure had been in place on the Costa Concordia, the cruise ship disaster never would have happened, Mr. Matterson pointed out.
The operations centre has replaced the BC Ferries board room that monitors all vessels in a certain area and when information comes in involving an incident, it’s collected at one site and notifications are sent to interested parties. The company’s 4,600 employees have been trained with an ALERT (All Learning Events Reported Today) handbook and it has adopted a full risk management program which follows international best practices through risk management teams. “For example, we are ready to respond to a pollution incident outside any of our 47 terminals.”
In terms of the human factor, the company has to deal with employees “so they can be ready to respond quickly and effectively, so we don’t spend a lot of time in a court room,” said Mr. Matterson.
When investigating an accident, there are competing interests, namely advancing safety versus blame and liability, according to Jean Laporte, Chief Operating Officer, Transportation Safety Board. It is not TSB’s function to assign fault or determine civil or criminal liability, he added.
Challenges to protecting information include dealing with social media because TSB often finds that reports of an accident have already been widely reported on the internet before the Board can get to the scene to commence its investigation. “We have to be more proactive in sharing information. In the Lac Mégantic accident, for example, we had to release information quickly, because others might release inaccurate information. It was a major challenge because a criminal investigation was going on. “Canada is becoming a more litigious society. The public wants someone to be held accountable. In terms of the Access to Information Act, more than half of all requests are coming from lawyers.”
TSB must also interact with other organizations such as the police, coroner, other regulators, parliamentary committees and even other countries, and must coordinate its activities, including the sharing of information which is usually restricted to certain limits. TSB has already begun to address some of the challenges with over 50 MOUs (Memorandum of Understanding) in place with other organizations and countries. It has become more proactive in releasing some information before waiting for a final accident report and updates ongoing investigations on its website. And TSB has made it clear to other countries that the Canadian Transportation Accident Investigation and Safety Board Act takes precedence over other legislation and regulations such as the International Maritime Organization Code.
In another presentation on how Force Majeure (FM) clauses are interpreted, Robin Squires, Partner at BLG Toronto, cautioned that if you don’t pay attention to the drafting of a clause, the courts will. An FM clause is “a contractual term by which one (or both) parties is entitled to cancel the contract or is excused from performance … or is entitled to suspend performance…upon the occurrence of unpredictable events beyond (his or her) control, which include rogue waves, hurricanes or other “Acts of God” or even a labour strike such as the 2014 truckers strike at Port of Vancouver. “Acts of God” can often be used in Tort claims, said Mr. Squires. He gave several examples of companies trying to be relieved of their contractual obligations by invoking Force Majeure. Most were rejected as they did not fall under the legal interpretation of the clause. In one example, Midland Transport was transporting fish to locations in Quebec and Ontario when its truck got stranded on a highway due to a trucker protest. The fish became unfit for consumption due to excessive delays. Midland relied on the “strike” clause in an attempt to be excused for a breach of contract. It was rejected as “strike” has a precise legal meaning, and the trucker protest did not fall within the legal definition.
“The duty of honesty between two parties is becoming more important in Canadian courts of law,” said Mr. Squires. “The crucial part is how to draft a Force Majeure clause. In the B.C. strike, it was better not to rely on the clause, because companies could have used other ports to discharge their cargo.” He concluded by suggesting to not accept a standard FM clause, be involved in the drafting of the clause and to seek legal advice.
The escalating cost of wreck removals, led by the $1 billion-plus price tag for the removal of the Costa Concordia, was another topic of discussion, with Lindsay Malen of lead salver Titan Salvage of Houston, TX returning for an encore appearance to give an update from last year’s presentation. She was followed by Sam Kendall-Marsden, Syndicate Director, Charles Taylor & Co. Limited, as agents for the managers of The Standard Club Europe Ltd., London, England. The Standard Club was the lead P&I insurer for the Costa Concordia and is part of 13 clubs that comprise the International Group (IG) of P&I Clubs that insure about ninety per cent of the world’s ocean-going tonnage.
Mr. Kendall-Marsden talked about wreck removal, post Costa Concordia, and believed that disaster was a unique case for a number of reasons, including the fact that casualties involved both passengers and crew members, and the loss of lives in addition to a large number of injuries. The environmental sensitivity of the location also contributed to the high cost of removal, as it required pains-taking work in a sea park. The size and complexity of the ship with thirteen decks was another contributing factor, as was the high level of involvement of authorities. The complexity of the removal operation which was a combination of salvage and offshore construction, was a major contributor to the cost of the operation, Mr. Kendall-Marsden concluded.
In terms of the response of the International Groups to the escalating cost of wreck removals in general, he said the clubs support the Nairobi Convention coming into force in April, 2015, which encourages states to extend the application of the provisions of the Convention to wrecks located within their territory, including their territorial sea. The Convention will provide greater clarity in relation to wreck removal obligations, explained Mr. Kendall-Marsden.
“Increasing wreck removal costs have given rise to significant concerns within the clubs and the commercial reinsurance markets on which the clubs rely to provide the highest levels of cover available for shipowners. “The clubs do not support calls from some quarters to impose limits on the cover for wreck removal and do not believe this would be in the best interests of shipowners, states or claimants. The clubs believe in supporting their members by maintaining the breadth and depth of cover provided.”
As a response to rising removal costs, the clubs have established a working group of experts to examine recent large casualties, identify cost drivers and make practical recommendations to improve the response to major casualties and mitigate costs, Mr. Kendall-Marsden noted. “The clubs have considerable experience in handling large-scale maritime casualties and wish to work collaboratively with maritime authorities to achieve mutually beneficial outcomes.