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From the News Desk: Wakashio disaster raises questions over compensation and crewing

Three of the 20 crew were on extended contracts due to coronavirus-led restrictions, while a leading lawyer asks whether the Bunker Convention is fit for purpose post-Wakashio

Investigations into the reasons behind the grounding of the Japanese bulker off Mauritius are now underway but already there are concerns over issues such as crew fatigue and whether any eventual compensation payout will cover the costs of the clean-up and economic damage

THE Panama-flagged, Japanese-owned 203,130 dwt Wakashio has spilled more than 1,000 tonnes of fuel oil into the Indian Ocean after splitting in two on August 15. It had run aground near Point d’Esny on the southeast coast of Mauritius on July 25.

The vessel is owned and managed by Nagashiki Shipping Co, and time chartered to Mitsui OSK Lines. When it ran aground, it was known to have approximately 3,800 tonnes of very low sulphur fuel oil and 200 tonnes of diesel oil on board.

Around 3,000 tonnes had been recovered from the vessel and transferred to small tankers by August 12, according to a statement by MOL.

The circumstances surrounding the grounding of the vessel remain unclear. Last week, the Panama Maritime Authority said the vessel was forced off-course due to adverse weather conditions but admitted that as of Monday it had not yet viewed the voyage data recorder to understand the sequence of events leading up to the grounding.

It is understood that representatives from Panama have made their way to Mauritius to carry out a full investigation, although it could take months for all the formalities to be completed to determine a cause.

The International Maritime Organization, which sent a technical expert to the site last week, said that until it had a full casualty investigation report, which is mandatory following total loss of vessel or life, or major environmental damage, any comments on why or how the incident occurred would be speculation.

AIS tracking data

Lloyd’s List Intelligence vessel tracking data, however, shines some light on the crucial three-hour period on July 25 when Wakashio deviated from a major shipping lane passing by the island to ground itself off Point d’Esny, which is home to some of the most expensive properties in Mauritius.

Analysis of the vessel’s Automatic Identification System data show that around midday GMT the vessel’s navigational pathway was the same as taken by 78 other bulk carriers over 15,000 dwt during 2020.

The trading lane sailing past Mauritius is a key seaborne route for iron ore shipments to China from Brazil, which supplies about one third of the country’s 1bn tonnes of imports each year.

Wakashio’s next AIS signal at 1343 hrs GMT showed it navigating much closer to the Mauritius coastline. No other bulk carriers had taken this pathway so close to the shore while traversing the Brazil–China route via the Indian Ocean, according to AIS data interrogated going back to January 2018.

The master, first officer and chief engineer noticed the vessel had stopped moving and was stranded at 1925 hrs local time, the Panama Maritime Authority reported on August 16. That was 1525 hrs GMT, which is nearly two hours after the vessel had first deviated from established shipping routes.

The authority said “it was necessary to perform various manoeuvres to change course due to the state of the sea”.

Lloyd’s List was also told by Japan-based owners Nagashiki Shipping that three of the 20 crew on board the vessel had been on extended contracts due to the coronavirus-led restrictions surrounding crew changes, although it is not possible to determine at this stage if factors such as fatigue had any impact on the grounding.

The master of the vessel extended his six-month contract by three months on May 1, nearly two months before the vessel grounded on July 25 off Mauritius, a spokesman for Nagashiki Shipping told Lloyd’s List, but it is unclear what roles the other two crew members, who had both been on board for more than a year, occupied.

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Another concern for Mauritius and its vital fisheries and tourism sector is the extent of the compensation they are likely to receive for the spill.

Total compensation could come in as low as $18m, according to Martin Hall, leading lawyer at Clyde & Co, because the spill is not covered by the standard industry scheme for laden tankers.

Instead, any compensation claims for Wakashio seem set to be dealt with under the 2001 Bunker Convention, Mr Hall argues in an article for Lloyd’s List.

This provides for mandatory third-party insurance cover, in practice provided by P&I clubs, allowing third-party clean-up and pollution losses from bunkers to be made directly on the insurers. But owners are entitled to limit liability in accordance with the Convention for Limitation of Liability for Maritime Claims 1976, or as amended.

Compensation is based on the gross tonnage of the vessel, which in this case appears to be 101,932 tonnes, which would entail a cap of around $18m.

Many countries have now enacted a 1996 Protocol to the CLC, under which higher limits are obtainable. However, Mauritius has not signed the 1996 Protocol, under which Mr Hall believes it would have been entitled to about $43m.

A representative of the International Tanker Owners Pollution Federation, a not-for-profit concern that specialises in oil spill response, added: “We have two technical staff on site supporting the government on the response and shoreline clean-up. But it is a bit early to know the magnitude of any claims arising and hence, the extent to which the Bunker Convention limit may or may not be breached.”

Rusting tanker

Finally, while the amount of oil spilled from Wakashio is relatively low compared to other spills around the world, the abandoned tanker Safer off Ras Isa in Yemen has 1.1m barrels of oil on board.

Put into context, the Wakashio oil spill would represent less than 1% of what is at stake if Safer and its attached pipeline start leaking and the growing threat has prompted the International Maritime Organization to draw up a contingency plan should access to the vessel continue to be barred by the Houthi rebels battling the Saudi-backed government for control of the country.

The Houthis control the area surrounding the ship and have not given permission for UN inspectors to assess the state of the 45-year-old vessel

The 406,648 dwt tanker has sat idle since 2015, reportedly over a disagreement on how the money should be spent when its oil is sold. However, there are doubts about the oil’s value amid possible contamination and the falling global oil price.

“Given the Red Sea currents, the oil will be visible from the Bab-el-Mandeb Strait to the Suez and Gulf of Aqaba,” Ian Ralby, chief executive of IR Consilium, a security consultancy, said.

“Ships will not be able to avoid it, putting pressure on owners and operators to decide if they want to risk the optics of spreading the spill by traversing the sea and incurring the costs of cleaning the hulls of their ships. This matter should be of concern for shippers.”

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