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YPSN (HK) MARITIME SEMINAR – WEDNESDAY 19 FEBRUARY 2014 THE NORTHERN SEA ROUTE – LEGAL AND PRACTICAL ISSUES ARISING RORY MACFARLANE INCE & CO.

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Presentation on theme: "YPSN (HK) MARITIME SEMINAR – WEDNESDAY 19 FEBRUARY 2014 THE NORTHERN SEA ROUTE – LEGAL AND PRACTICAL ISSUES ARISING RORY MACFARLANE INCE & CO."— Presentation transcript:

1 YPSN (HK) MARITIME SEMINAR – WEDNESDAY 19 FEBRUARY 2014 THE NORTHERN SEA ROUTE – LEGAL AND PRACTICAL ISSUES ARISING RORY MACFARLANE INCE & CO

2 The Northern Sea Route (NSR) 2 Northern Sea Route Russian Siberian coast Barents Sea to Baring Strait First navigated in 1897 c/f Northwest Passage Canadian Arctic coast Also exiting via the Baring Strait Amundsen / The Maud

3 Northern Sea Route c/f Southern Sea Route 3

4 NSR – Potential Advantages 1.Less Time (reduced hire/freight). 2.Less Bunkers. 3.Avoids East African Piracy threat and associated costs. 4.Reduced CO2 emissions. 4

5 NSR - Potential Disadvantages / Hazards 1.Seasonal. July – November (140 days). - Icebreaker support? 2. Navigational Issues: - not a linear route - insufficient charts - compass / GPS reliability - restricted visibility - transit close to coast (15m draft) 3.Casualty Response – (towage/salvage/spare parts). 4.Pollution clean-up costs. 5.Less flexible route commercially. 5

6 NSR- Variations in Ice Flow 6

7 NSR - Potential Disadvantages / Hazards 1.Seasonal. July – November (140 days). - Icebreaker support? 2. Navigational Issues: - not a linear route - insufficient charts - compass / GPS reliability - restricted visibility - transit close to coast (15m draft) 3.Casualty Response – (towage/salvage/spare parts). 4.Pollution clean-up costs. 5.Less flexible passage commercially. 7

8 NSR – Potential Disadvantages / Hazards The Petrozavodsk (2009) 8 The Nordvisk (2013)

9 NSR – Potential Disadvantages / Hazards 9

10 NSR - Potential Disadvantages / Hazards 1.Seasonal. July – November (140 days). - Icebreaker support? 2. Navigational Issues: - not a linear route - insufficient charts - compass / GPS reliability - restricted visibility 3.Casualty Response – (towage/salvage/spare parts). 4.Pollution clean-up costs. 5.Less flexible passage commercially. 10

11 NSR - Legal Issues / Insurance INSOP / ARCOP / Lloyds JHC / Arctic Council. - all conclude that claims arising in arctic would be more expensive - emergency response to ships in distress inhibited Is the vessel sufficiently ice classed? Will the vessel receive ice breaker support? Lack of statistical data. NSR therefore creates issues relating to: - Classification Societies - P&I Insurance - H&M Insurance 11

12 Insurance – Classification Societies Ice class notations differ among classification societies. Ice class is not part of the main class. Societies rules do not regulate the way vessels operate in ice- infested areas. Implications for Insurers Cover will not be prejudiced on the ground of loss of class. Insurers must evaluate the risk and set requirements. 12

13 Insurance – H&M Voyage in arctic waters could be a risk excluded (e.g. English Institute Warranties 1/7/76). Notify underwriters before transit. -Revised terms of cover -Additional premium -Ice deductible [ Note: the JHC has recommended a Russian-speaking desk officer for NSR transit] 13

14 Insurance - P&I Generally no imposition of trading. Notify P&I of transit through NSR in advance. Alteration of risk. 14

15 NSR – Legal Issues / Transit Application Procedure Need a Permit Who:Ship owner/master or owners representative. When:>120 days before transit. <15 days before transit. Where:The NSR Administration, Moscow. How:By - pdf form - ship name / IMO number / details - contact details - ship owner statement - attachments (class cert. / insurance details etc..) NB Contact ice breaker administration once application submitted. 15

16 NSR – Legal Issues / Transit After Application Decision:- within 10 working days. Notification:- within 2 working after decision. - published on NSRA website. Validity:- 365 days. - no entry to NSR before permit effective period. - exit from NSR before end of permit. Report:- daily by master to NSRA – . Refusal:- information false or misleading. - information incomplete. - vessel unsafe under Russian law. Fees:- transit costs (per ton / cargo). - ice breaker fees (unpublished). - ice pilot(s) fee. 16

17 NSR – Ice breakers 17

18 NSR – Legal Issues / General Any different to other maritime routes/ voyages? Hire – increased risk of off hire / termination. Routing – navigational orders ; employment orders. Unsafe port. Seaworthiness. 18

19 NSR - Transit Facts & Figures General Up to 40% shorter than SSR / Suez route. COSCO (Mv Yong Sheng), Sanko (Sanko Odysesy), Tsuchdi Shipping (Mv Nordic Barents), Vitol. Sena Bulk / Hyundai – co-operative long term strategy. Golden Waterway – 5% to 15% of Chinas int. trade by 2020? Transit Figures NSR vessels vessels vessels Vessels. c/f Suez Canal 20121,500 per month / 18,000 per year. 19

20 NSR - Transit Facts & Figures (cont.) 2013 # 20

21 NSR Information Office NSR Administration NSRA Permit Applications NSR Transit – masters daily reports Ice Breakers and Ice Pilots IMO 1024(26) - Polar Water Guidelines NSR – Useful Websites / Addresses 21

22 Beijing Dubai Hamburg Hong Kong Le Havre London Monaco Paris Piraeus Shanghai Singapore Thank you Rory Macfarlane


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