Rena's media machine

A copy of Mike Wackett's editorial in shipping e-zine Containerisation International Online (15th November 2011) has been passed to the Antipodean Mariner, which praises Maritime New Zealand for its handling of the media during the salvage operation (http://www.ci-online.co.uk/)

Quotations in part from the online article state;

"Moreover, it has been so refreshing to experience the open and frankness of MNZ; regardless of issues with liability for the clean-up cost, they have pushed on with their job of protecting their beautiful coastline"

"Indeed, those responsible for MNZ's PR machine deserve congratulations; its 100 or so status updates should be a lesson to other media-shy companies how to communicate, and why it is in everybody's interests to do so: the problem won't go away it is always better to be transparent."



I'll leave readers who followed this blog's first person account of the salvage up until its untimely silencing to draw their own conclusions.

The Antipodean Mariner
22nd November 2011

Rena salvage pictures

The Antipodean Mariner has been in South East Asia this past week and postings have been a big sparse despite news and photos received. Quick posting tonight of some of the best photos. Rena's trademark collapsed container stack has now been removed, and the salvors are starting to remove some of the full reefer (refrigerated) containers with their putrifying contents.

It has been reported that the site looks like Scapa Flow with the English fleet in port. Vessel count includes the tugs Katea, Koraki, Maui 1, Pacific Pearl and Petra G , Wainui (towing the barge Pohonui which is the the designated rotten food barge. The Rigid Inflatable Boats (RIB's) Sea 3, Genesis and Black Pearl with the Canopus, Seatow 60 and Rena totaled 13 vessels at the wreck site.















Riggers attached with lifelines prepare the toppled container stack for discharge















Rena's port side showing the extent of the damage to her hull at No.2 Hatch















Looking along the port side, the mis-alignment between the forward and after sections of the hull are more apparent















Hive of activity around the hulk of the Rena.

The Antipodean Mariner
20th November 2011

Rena Salvage - No Cure, No Pay

In the public’s mind, Salvors are probably thought of some sort of poor cousin to pirates. You know what I mean, families of opportunistic farmers, peasants and fishermen steeling through the Cornish night to wreck and plunder the bounty of castaway sailing ships. No, actually there were called Wreckers.

Salvors operate in a world of high stakes, ”all or nothing” bets of successfully reclaiming some tangible value from maritime catastrophes. Prominent on the first page of the Lloyds Open Form agreement are the words “No Cure, No Pay”. If nothing of value is salvaged, the Salvor gets nothing - irrespective of how much outlaid in time and money.

When the images of penguins and seals covered in heavy fuel oil galvanised world opinion against oil pollution (there, mentioned a penguin), regulators were faced with a vexing problem. How could Salvors be sufficiently incentivised to apply their significant resources to preventing oil pollution when faced with ‘No cure, No pay’? The significant evolution of salvage ‘custom as practice’ has been that the Salvors can make a claim on the pollution compensation funds for ‘salvaging’ the environment (see the Convention Liability posting) as separate from the salvaging property (the vessel and cargo).

Environment now always takes first preference to ship and cargo – often frustrating the Salvor’s first instinct to try to get the ship ‘off the beach’ quickly and intact. Rena’s salvors will have been contracted with these two prioritised objectives – to minimise oil pollution by removing as much fuel, lubricating and hydraulic oil as possible and to salvage the ship and cargo.

The first task, now successfully completed, has been evident by the actions of the Salvors, the bunker barge ‘Awanuia’ and ‘GO Canopus’. The systematic pumping out of the heavy fuel oil in the Rena’s bunker tanks, fuel and lubricating oil from the Engine Room and hydraulics from the mooring equipment and steering gear have significantly reduced the future impact in the Bay of Plenty’s coastline when Rena inevitable breaks in two (or three) in the next good northerly blow. While the media loves being able to tell the public that all oil has been removed, the laws of physics means there are unpumpable or urecoverable residues for nature to bio-degrade later. The Salvors now have the basis for a claim on the oil pollution compensation funds, and will have an army of accountants documenting what they believe is a fair and reasonable amount for their skill, risk and expertise (including the appalling conditions in which they had to work.

The salvage award will be submitted for settlement from the compensation fund. These claims tend to be settled pretty quickly – no one wants to get offside with the Salvors if the prize has been the preservation of wildlife, pristine beaches and coastline.

Back to the high stakes table, and the focus now on salvaging all or part of Rena and her cargo. As reported in the media, work has started on unloading containers while the weather is benign.














A great photo has been received of the salvors removing empties two at a time to the deck of ST-60 and then to GO Canopus. Container ships like carry the 'empties' - containers being returned or repositioned in the trade to be filled with cargo - behind the bridge and accommodation because they are light and and be stacked high without affecting foward visibility. The salvors are cutting the twist locks, which lock the container stack with an oxy-acetylene cutter and landing the containers for the short final voyage to Tauranga.

There is the real possibility that the part of the Rena still afloat could break free – either at visible fracture at the No.2 hatch or forward of the accommodation. If Rena breaks at No.2 hatch, the Antipodean Mariner speculates that there may be sufficient residual stability for Rena to remain afloat and (near) upright. However, if Rena breaks forward to the accommodation the hull shape in this part of the ship is what is called ‘fine’ – narrow and shaped to permit water to flow cleanly into her large, single propeller.

Again speculation, but the inherently stable flat side and flat bottom of the hull will no longer be attached to the fine and heavy (that’s where the main engine is) accommodation and engine room.

The salvors will have naval architects working on this problem and estimating their chances of success under ‘No cure, No pay’.

The Antipodean Mariner
18th November 2011

Rena salvage - ST-60 incident

With the increase in activity at the site, as the salvage operation moves from oil recovery to discharge of the Rena’s containers, the Antipodean Mariner has cultivated new sources. Blogging will continue of the activities at Astrolabe Reef from the decks of the various craft now clustered around the inert hulk.

There was an incident on the barge ST-60 yesterday which made the media through more traditional sources. A personnel transfer basket (known on the salvage industry as a Billy Pugh) with three salvors aboard had to be dumped into the ocean after it developed an uncontrollable swing in the low swell.

The tops of the crane jibs are estimated to be moving in an arc of up to three metres in the gentle swells off Astrolabe Reef. The cranes temporarily fitted to the ST-60 are designed for a direct vertical static lift from a stable land-based platform and not the dynamic motion experienced on the barge.

Although their load rating may have been reduced, one observed fears that they will not cope with the task. The crane’s hook (or a forty foot container) developing an uncontrollable pendulum swing and striking the fragile latticework of the crane jib will have catastrophic consequences.

The crane barge ‘Smit Borneo’, which is on the way to Tauranga from Singapore, is purpose built for heavy lifting in a seaway and looks infinitely better equipped to handle the conditions. Hopefully, ST-60 can continue to support the salvage operation by receiving and shuttling the containers in to the Port of Tauranga.

This posting is not to taken as a criticism of the salvage operation but a reminder of the dangers faced every day by the Salvors using the resources they have in a dynamic environment.

The Antipodean Mariner
16th November 2011

Rena General Average

When Rena grounded on Astrolabe Reef in the early hours of 5th October, a complex legal process was set into motion which will likely last a decade or more. All around the world, lawyers, insurers, salvors and surveyors will have reached for an A4 lever arch file and written ‘Rena File No.1” on the spine. Many hundreds more A4 files will be filled in the months and years to come.

One of the truly ancient principles which will likely be applied to the Rena’s salvage is General Average. General Average is another maritime peculiarity dating back to early Greek times. Even now, every voyage by a cargo ship is termed a ‘maritime adventure’ to which the ship’s Owner, Cargo owners, Master and Crew are deemed participants.

When heavily laden sailing craft were plying the Mediterranean, storms and running aground were an accepted peril of the maritime adventure. In the teeth of a storm, it was common practice for the Captains to jettison part of the cargo thereby lightening the vessel so as to make it safely to port (less a few amphora of wine). When choosing which cargo to jettison, Captains and crews were often not too picky - self-preservation ruled.

Provided the vessel made it to port, the hapless cargo’s owner would be informed of the loss of their precious goods. One party had borne the loss of their goods in order to ensure the successful delivery of the other cargo and the preservation of the ship. The Greeks put their mind to this inequity of one party suffering loss for the collective benefit of the other participants to the maritime adventure.

The principle debated, and now enshrined in maritime commerce, was that the losses of one should be compensated by the collective beneficiaries of the successful voyage. There are a few rules though to maintain fair play in the unscrupulous, rough-and-tumble of shipping.

A General Average claim must, among other things, be voluntary, timely, reasonable and successful. When the Owners of the Rena were alerted to the vessel’s grounding, one of the first thoughts would have been ‘Can we declare General Average?’

After all, if their actions successfully save the majority of the containers but result in the loss of their ship on Astrolabe Reef, then aren’t they entitled to be compensated under the principles of General Average? A powerful incentive when you consider the combined value of the ship and 1,300 containers at the time of the grounding.














Crane Barge Smit Borneo under tow to the Rena salvage site from Singapore:
Kees Drent, Shipping News Clippings 13/11/11

If General Average is declared, every container successfully unloaded to the barge ST-60 will strengthen the Rena’s Owners case that their actions met the test of being voluntary, timely, reasonable and successful. Just imagine you are passenger in a taxi which T-bones another car and the taxi driver demands you contribute to the repair bill! General Average in a nutshell.

Interesting if the ‘cut and thrust’ of maritime commerce, law and salvage lights your fire. No mention yet of a dolphin, penguin or cormorant in this Blog, which I will leave to my reader from the Ministry of the Environment (you know who you are).

The Antipodean Mariner
15th November 2011

RENA salvage and Convention Liability

Thanks again to the readers who have commented since the 'NZ Herald' picked up on the story;

http://www.nzherald.co.nz/rena-oil-spill/news/article.cfm?c_id=1503203&objectid=10765493

Time now to 'heave to and weather the storm'. One of the burning questions being debated in New Zealand is why is the nation going to have to pick up a large proportion the cost of the clean up? The ship is owned by a substantive Shipowner, Costamare, who have issued a statement apologising for the accident and the Authorities are not having to trawl through a web of Liberian and Panamanian shelf companies to identify the beneficial Owner. The answer lies in commercial principles on which merchant shipping has operated since the Greek and Roman times.

The two basic principles in play are the mutual insurance of maritime catastrophes and limitation of liability. Starting with mutual insurance, the 'Rena' is insured with the Swedish Club. How, you may ask, can a Club be an insurance company? The name Club indicates that the insurer is a Protection and Indemnity Club - or P&I Club for short. P&I Clubs are not-for-profits and have existed for centuries because of the inherently risky nature of shipping. Members of the Club collectively self-insure the 'uninsurable' risks of their combined fleets. Every Shipowner who is a member of the Swedish Club will be contributing to, and has collective liability for, the cost of the Rena's salvage and oil spill clean-up.

So with this open-ended liability now resting with the Swedish P&I Club, how do they avoid the hypothetical catastrophe of one of their mutually insured ships colliding with the 'Queen Mary' and then both vessels sinking in the middle of New York Harbour? Every member of the Club would face financial ruin. This is where the second principle kicks in - liability is limited in proportion to the size and earnings capability of the ship.

It's a bit like Finland's legal system where your speeding fine is a calculated by how much you earn - an expensive exercise for the CEO of Nokia who was fined 116,000 Euro for riding his Harley Davidson 25km over the speed limit in 2002.

Rena's liability is limited, based on her Gross Tonnage. The term has been 'metricated' as the original term was a Tun, or a wine barrel. A ships tunnage was a measurement of how many
barrels could be fitted in the cargo holds and as a proxy for how much money the Owner could earn from her on a voyage. Gross Tonnage is used in all aspects of commercial shipping to calculate fees, charges, levies and taxes. 'Rena' will have paid a tonnage-based oil pollution levy to Maritime NZ (also known as conservancy dues) on arriving in New Zealand on her final, fateful voyage. This is ratified by the Governments of maritime nations through the concisely named 'International Convention on Civil Liability for Oil Pollution Damage', or CLC Convention for short.

Put together, 'Rena' carries insurance which is capped by her ability to earn money (freight) for her Owner. The Swedish Club will pay for the clean-up up to the limits of the CLC Convention.

This summary is simplified to explain the principles on which maritime commerce operates. The Swedish Club has confirmed that up to US$1.4 Billion is available for oil pollution clean-up. There is still the legal bun-fight ahead about salvage, wreck removal and cargo (so eloquently described by our man on Astrolabe Reef).

Next positing, I'll try to explain the principle of General Average.

The Antipodean Mariner
13th November 2011

Make Rena wreck a reef

Courtesy of Tradewinds' (11/11/2011):-

With an end to the oil pollution threat from the wrecked Costamare containership Rena in sight the question of what to do with what remains of the ship is becoming an issue in New Zealand.
The authorities have issued a wreck removal notice requiring the shipowner to dispose of the 3,032-teu Rena (built 1990) which will potentially produce a very costly claim for the Swedish Club which has both the hull and the protection and indemnity cover on the vessel.
The bunker removal operation underway at the Astrolabe Reef.But a full scale wreck removal may not be required. The idea of moving the wreck off the Bay of Plenty’s Astrolabe Reef and sinking all or part of the ship in deeper water is being mooted in New Zealand.



A divers' association believes the sunken wreck could become an underwater attraction with other voices suggesting an artificial reef would boost the maritime environment and sea life.
If the Rena became a reef it would be good news for the Swedish Club and for the claims record of Costamare.

But the owner and the club are also facing a threat from a campaign so far backed by 5,000 New Zealanders to make Costamare and its insurer pick up the entire bill for the Rena casualty, clean-up and salvage – a bill that might run to as much as $100m.

New Zealanders are also learning about maritime limitation and the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC) which appears relevant to the Rena loss.
For the Rena, a ship of 38,000 gross tons, the LLMC limitation amount is about SDR 6m ($9.5m) or NZD 12m with lawyers suggesting that it would be hard under New Zealand law to break limitation.

It looks as if the limitation issue may become a political hot potato with Costamare and the Swedish Club under pressure to go a good way beyond payment of the minimum amount.
There is also discussion of the possibility of a criminal prosecution over the grounding of Rena.
So there is both good and bad news for Costamare and the Swedish Club, but maybe also an environment where there could be room for deals over the LLMC limit, wreck removal and a prosecution.

Meanwhile Maritime New Zealand says good progress is being made in removing the bunkers of the Rena although there are hundreds of tonnes of oil to remove. The flow rate of the pump over to a tank barge is only three or four tones an hour with weather and sea conditions having the potential to delay operations.

Source: Jim Mulrenan, Tradewinds Singapore
http://www.tradewindsnews.com/casualties/646824/make-rena-wreck-a-reef-plea?lots=site