3/27/2011

THE CHITTAGONG PORT A CILT PRESENTATION ON

SAFEPORT ISSUES IN THE CONTEXT OF CHITTAGONG PORT

by Capt.Mohiuddin Abdul Kadir MSc(Wales) LL.B FNI FCILT Master Mariner Hon.Secretary CILT Email: info@cilt.org.bd 27th March 2011

The port of Chittagong is the principle port of the Peoples Republic of Bangladesh. It is situated on the right bank of the river Karnafuli at a distance of 9 nautical miles from the shore line of the Bay of Bengal. River Karnafuli rising in the Lushai Hills and falls in the Bay of Bengal after taking a winding course of about 120 nautical miles through the district of Chittagong Hill Tracts and Chittagong.

HISTORICAL BACKGROUND 4th Century BC:Used to be called SHETGANG. Ships from Middle East and China used this Port. 9th century:Omani & Yemeni traders landed in this Port.Used to be called Samunda 16th century:Used to be known as "PORTE GRANDE". Portuguese took great interest to use this port.
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HISTORICAL BACKGROUND(CONTD) 1887:Formal Port operation started from 25th April. 1895-1910:Four Jetties were constructed to handle 0.5 million tons of cargo. Port used to be administered jointly by Port Commissioners and Assam-Bengal Railway. 1960:Chittagong Port Trust was formed. 1976:Chittagong Port Authority was formed
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HINTERLAND OF CHITTAGONG PORT "Hinterland" was borrowed from German, where it means literally the land behind (a city, a port or similar) Specifically, by the doctrine of the hinterland, the word is applied to the inland region lying behind a port, claimed by the state that owns the coast. The area from which products are delivered to a port for shipping elsewhere is that port's hinterland.
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NATURAL HINTERLAND OF CHITTAGONG PORT

Bangladesh has borders with seven land locked Indian states. North Western land locked region of China is also located within 70 km from Meghalay-Bangladesh border. Chittagong is the closes port to Nepal and Bhutan. The neighbours could benefit from our port and shipping services and Bangladesh could benefit from revenue earned from offering the services.
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Strategic Importance of Bangladeshi Ports

In a globalised world with modern IT Services information regarding product price is freely available The challenge is to arrange the logistics to deliver the product in the most efficient and cost effective manner The geography of the Indian Subcontinent makes Bangladesh and its ports the logistical corridor of a vast hinterland
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SAFE PORT OBLIGATION

Traditionally it has been the duty of the charterer of a vessel to ensure that the port he sends the vessel to is safe for the vessel to berth and discharge and receive cargo. A shipowner is obliged to proceed the vessel to port nominated by the charterer under charterparty, but various clauses are inserted in the charterparty with the intention of rendering the shipowner immune from the vagaries of an unsafe port.
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SAFE PORT OBLIGATION (CONTD)

There is no doubt that the safe port obligation is critical for the shipowner, as he is not obliged to load if it can be shown that the charterer has failed to nominate a safe port. If a port nominated becomes unsafe, the shipowner notifies the charterer to nominate an alternative port, and if the charterer fails to do so the shipowner may deliver the cargo at the nearest safe port in accordance with the terms of the charterparty.
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SAFE PORT OBLIGATION (CONTD) The obligation imposed on the charterer is not an absolute one in the sense that he is usually absolved from abnormal occurrences, but the duty of the charterer to ensure that the port nominated is safe for all intents and purposes is quite an onerous one.

DEFINITION: SAFE PORT

The classic definition of the safe port warranty may be found in the Judgment by Sellers L.J. of the UK Court of Appeal in the case of the Eastern City: If it were said that a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship, it would probably meet all circumstances as a broad statement of the law.
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DEFINITION: SAFE PORT(CONTD)

Most, if not all, navigable rivers, channels, ports, harbours and berths have some dangers from tides, currents, swells, banks, bars or revetments. Such dangers are frequently minimized by lights, buoys, signals, warnings and other aids to navigation and can normally be met and overcome by proper navigation and handling of a vessel in accordance with good seamanship. (Leeds Shipping v Socit Franaise Bunge (The Eastern City) [1958] 2 Lloyd's Rep. 127)
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The essential characteristics of a Safe Port are therefore:

In the absence of abnormal occurrences It must be safe to reach the port/ berth It must be safe to load or discharge at the berth It must be safe to leave the port The port must have a system in place to deal with navigational hazards There must be no danger of capture or seizure from political sources
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SAFE CHANNEL Physical Factors the absence of which may make a port unsafe: Safe channel Sound Berths Good place to drop anchor There are three areas in the channel namely Outer bar, Gupta bend and Cutting bend where current is distinctive in nature, strength and rate The width of navigable channel at Gupta bend is about 200m and at Cutting bend 250m Using PIANC guidelines the width required is 145-217 and 140-210m in favourable and unfavourable condition at Gupta and Cutting bend respectively

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THE OUTER BAR

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CUTTING BEND
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Gupta bend

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SAFE BERTH Berths must be safe for type of vessels using them Berths must be well maintained in respect of depth and fender

BERTH WITH INADEQUATE FENDER

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BOLTS HOLDING FENDERS PROTRUDING AFTER FENDERS FELL OFF

VESSEL PRESSED AGAINST BOLT DURING BERTHING AND SUSTAINED PUNCTURE HOLE IN WAY OF OIL TANK

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WELL MAINTAINED JETTY

ANCHORAGE video

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RECOMMENDATION BY A GOVERNMENT COMMITTEE FOLLOWING AN INCIDENT(PRODUCED VERBATIM) Recommendation : The lightering process at the Chittagong outer anchorage is cumbersome creates multifarious safety and other problems. For overcoming these challenges & keeping view future growth of population in Bangladesh, hence trade & commerce & commodity flow establishing a deep sea port is essential.
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RECOMMENDATION BY A GOVERNMENT COMMITTEE FOLLOWING AN INCIDENT(CONTD) Compulsory piloting in any movement of ships at outer anchorage made be made mandatory. Priority may be attached to wreck removal at the outer anchorage. Deeper draft vessel move than 10.5 m may be discouraged to come to Chittagong outer anchorage area.
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Administrative or Political Factors which may make a port unsafe:

It is now established that administrative shortcomings, failures in port systems and deficiencies in the set-up of a port may render a port unsafe. In the Mary Lou, Mustill J identified that: a port may have geographical, climatic or other characteristics which entail that it will be safe if, but only if, a particular system for securing its safety remain effectively in operationsuch port will be safe if the system works properly, and unsafe if it does not
The Mary Lou [1981] 2 Lloyds Rep 272, 277
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Administrative or Political Factors which may make a port unsafe: Traffic Management and regulations Pilotage/ Pilot Management System to identify obstructions in the channel and promulgation of the information Promulgation of weather report Detention caused by abuse of Customs Act 1969
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Administrative or Political Factors which may make a port unsafe(Contd) Unlawful gains made by shipping agents by cheating shipowners Unlawful detention by government agencies Dealy and detention due to difficulty in disposing of damaged cargo Labour Management Lack of expeditious legal remedy Piracy

TRAFFIC MANAGEMENT AND REGULATIONS THERE ARE A NUMBER OF CONFLICTING ACTS/ ORDINANCES/RULES/ MAUALS/ GUIDELINES The Port Act 1908 The Port Rules published in 1939 pursuant to Port Act 1914 The Chittagong Port Authority Ordinance 1976 The Traffic manual for Chittagong Port published in 2001 Guide Lines for Pilots published in 2005

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TRAFFIC MANAGEMENT AND REGULATIONS THE LAWS TO BE CONSOLIDATED PILOTS SHOULD BE AWARE OF THE RULES OWNERS AND MASTERS SHOULD HAVE ACCESS TO LAW BY PUTTING ON WEBSITE TRAFFIC RULES TO BE STRICTLY ENFORCED IF VTMS IS IMPLEMENTED OPERATORS SHOULD BE WELL TRAINED video
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PILOTAGE/ PILOTMANAGEMENT THERE ARE AT PRESENT TEN PILOTS NUMBER OF VESSELS HANDLED IN 1998 WAS 1333 AND IN 2010 WAS 2397 IT TAKES SEVEN YEARS TO TRAIN UP A FIRST GRADE PILOT NO STRUCTURED TRAINING PROGRAMME FOR PILOTS
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PILOT MANAGEMENT The Nautilus concerned the safety of a berth at the port Manzanillo, Mexico. The Nautilus was chartered under a voyage charterparty on the Gencon form. Between 3 and 20 September 1984 discharge proceeded normally but on the afternoon of 20 September the Master began monitoring the progress of Hurricane Olivia. Later that evening the weather conditions deteriorated and the master contacted local agent to arrange pilots and tugs to move the vessel to anchorage

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PILOT MANAGEMENT(CONTD) It is noteworthy that while the Sailing Directions described the port as one which provided a tug and pilotage service, there was no tugs available at that time and the only pilot was engaged elsewhere. That night the vessel struck the quay numerous times causing damage. The Arbirtation Panel held that the clear cause of damage was the lack of pilotage and tugs, which rendered the port unsafe. The Nautilus SMA 2622 (Arbitration at N.Y.1990)

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Systems to Indentify Obstructions in the Channel and promulgate the information In the case of the Marinicki the vessel sustained damage from underwater obstruction on the event of berthing at the port of Jakarta. It was found that there was a very unsatisfactory regime prevailing in the port administration in relation to safety of vessels using the dredged channel. -The Marinicki [2003] 2 Lloyds Law Report 655, 656
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PROMULGATION OF WEATHER REPORTS In the case of the Dagmar the charterers were required pursuant to a clause in a Baltime Charterparty agreement to direct the vessel, the Dagmar, to safe ports. The vessel was ordered to Cape Chat, Quebec where she commenced loading without incident. Two days later, while the Dagmar was still berthed, the force of the wind and seas increased causing the vessel to ground in her berth. The owners complained that the port was unsafe for the vessel.

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PROMULGATION OF WEATHER REPORTS(CONTD) Mocatta J found that there was an adequate weather forecasting system based not far from the port. Furtehrmore, the facts were distinguishable from the Eastern City as the port was not a place where winds could arise suddenly without warning. Notwithstanding these findings, Mocatta J concluded that the port was unsafe for the vessel because the Master and crew were not in receipt of weather broadcasts.

PROMULGATION OF WEATHER REPORTS(CONTD) The Dagmar establishes that a port authority must not only ensure sufficient weather forecasting and reporting system is in place, but it must also make certain that mariners are in receipt of them.
Tage Berglund v Montoro Shipping Corporation Ltd. (The Dagmar) [1968] 2 Lloyds Rep 563

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PROMULGATION OF WEATHER REPORTS(CONTD) The Patenga Met office provides CPA with meteorological information 4 times with special reference to Chittagong Port. The CPA also issues warning regarding freshets, however, they must ensure it is received by Masters

DETENTION CAUSED BY ABUSE OF CUSTOMS ACT 1969 Abuse of S.55 of Customs Act 1969 by Agents Abuse of S.156.24 by the Customs Authorities

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UNLAWFUL GAINS MADE BY SHIPPING AGENTS BY CHEATING SHIPOWNERS

UNLAWFUL DETENTION BY GOVERNMENT AGENCIES

MOF, BCIC, BADC and BSFIC are regular importers of cargo and users of the port Conclude contract with suppliers basis delivery at warehouse Laissez Faire attitude when vessel detained by suppliers/ agents No training in lawful recovery of claims Lack of understanding of effect of detention Fear of being suspected for corruption if proactive
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LABOUR MANAGEMENT DELAY AND DETENTION DUE TO DIFFICULTY IN DISPOSING OF DAMAGED CARGO Mis-interpretation of circular from Prime Ministers office Lack of storage space/ facility to store damaged cargo Agents take advantage of the situation Port must provide facilities for disposal.
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Labour Management improved and reduced strikes No system of training for stevedores Lack of safety consciousness No system of reward or punishment No insurance of berth operators Video
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LACK OF EXPEDITIOUS LEGAL REMEDY

VESSELS TIME COSTLY AND OWNERS GIVE IN TO EXTORTION IN CASE OF SMALL CLAIMS UPTO US$00,000/ COURT PROCESS TAKES TIME TO REALISE CLAIM COURT PROCESS TAKES TIME TO OBTAIN RELEASE OF VESSEL NO SYSTEM OF ALTERNATIVE DISPUTE RESOLUTION (ADR) P&I CLUB LOU NOT ACCEPTED AS SECURITY
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PIRACY &ARMED ROBBERY The following definition of piracy is contained in article 101 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS): Piracy consists of any of the following acts: (a)any illegal acts of violence or detention, or any act of depredation, committed for private ends by the crew or the passengers of a private ship or a private aircraft, and directed:
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PIRACY &ARMED ROBBERY(CONTD)

i)on the high seas, against another ship or aircraft, or against persons or property on board such ship or aircraft; (ii)against a ship, aircraft, persons or property in a place outside the jurisdiction of any State; b.any act of voluntary participation in the operation of a ship or of an aircraft with knowledge of facts making it a pirate ship or aircraft; c.any act inciting or of intentionally facilitating an act described in sub-paragraph (a) or (b).

PIRACY &ARMED ROBBERY(CONTD) Armed Robbery has been defined as : Armed robbery against ships means any unlawful act of violence or detention or any act of depredation, or threat thereof, other than an act of piracy, committed for private ends and directed against a ship or against persons or property on board such a ship, within a States internal waters, archipelagic waters and territorial sea.
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LOCATIONS OF ACTUAL AND ATTEMPED PIRACY:

SOURCE ICC-IMB PIRACY AND ARMED ROBBERY AGAINST SHIPS REPORT -ANNUAL REPORT 2010

LOCATIONS SE ASIA INDIAN SUBCONTINENT INDONESIA BANGLADESH INDIA SRILANKA AFRICA GULF OF ADEN

2006 50 47 5 1 10

2007 43 15 11 4 13

2008 28 12 10 1 92

2009 15 18 12 11

2010 40 23 5 53

COMPARATIVE STATISTICS OF PIRACY BETWEEN 2006-2008 SOURCE:CPA

TYPE OF INCIDENT ROPE SNATCHING ATTACK ON SHIPS CREW ARMED ROBBERY ZINC ANODE THEFT 2006 19 02 00 01 2007 13 04 00 00 01 00 18 2008 09 02 00 00 00 01 12
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PIRACY ATTEMPTED 00 BUT FAILED SHIP STORE THEFT TOTAL

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PIRACY & ARMED ROBBERY (CONTD) MOST PIRATES ARE FISHERMAN WHOSE LIVELIHOOD IS DESTROYED BY A. Overfishing by modern trawlers B. Destruction of wetland by ship breaking industry C: Shore based pollution THE COST OF UNSAFETY FOR THE PORT AND THE NATION Increase in cost of maritime transport Makes our port less competitive Makes our exports less competitive Owners may insert port exclusion clause resulting in short supply of tonnage and increase in freight Owners will increase freight for Chittagong Port
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THE COST OF UNSAFETY FOR THE PORT AND THE NATION (CONTD) It may be cheaper to use neighbouring ports. Imports of our country has low elasticity of demand and the nation will bear the increased burden of freight Tarnishes the image of our port and our nation

RECOMMENDATIONS:
Bilateral relation with our neighbours and especially with India need to be improved so that our port services can be used by the neighbours. It would not be possible to service Nepal and Bhutan without co-operation from India. A long term strategy to be formulated for successful marketing of our port services to be taken. The safety of the channel in way of Gupta and cutting bend to be ensured by appropriate traffic management system.
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RECOMMENDATIONS:
The maintenance dredging of the channel and the berths to be carried out regularly. The jetty berths to be regularly maintained in safe condition. There should be some strict control on the maximum draft and number of vessels at the outer anchorage. The procedure for changing agents by owners must be made simple and reasonable. The National Board of Revenue must immediately give effect to the directives of the Honble High court while imposing penalty on vessels
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RECOMMENDATIONS (CONTD)
The receivers should be compelled to take delivery of all cargo including damaged cargo and warehouse facilities to be provided for storage of same. There should be a Task Force to investigate any complain by Masters of vessels and ship owners against local agents and strict actions should betaken against agents who hold the port at ransom. Officials of Government agencies regularly importing cargo should be educated in the procedure of lawfully securing their claims. Insurance for third party claim should be made mandatory for the berth operators
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RECOMMENDATIONS (CONTD) The labours used by berth operators must be adequately trained. The acceptance of P&I Club letter of undertaking as security against marine claims need to be seriously considered. Amendment may be proposed to Civil Procedure Code for making ADR mandatory for small marine claims.

THANK YOU

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QUESTIONS

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