Liability row risks EU shipping exodus

Date: 01/02/01

By Laurence Frost

EU Ship owners could be forced to register their vessels outside the Union if inspection companies carry out a threatened boycott of new rules imposing unlimited financial liability for accidents at sea.

Maritime classification societies say they will refuse to work with national agencies if they are faced with potentially bankrupting bills for errors contributing to disasters like the 1994 sinking of the passenger ferry Estonia.

The warning comes as member states are set to agree a position that resists attempts by MEPs to cap the societies' liabilities for injury, loss of life and damage to property.

"We may have to go to Panama, Cyprus, Malta, Liberia, Singapore," said Terje Staalstrom, council member of the International Association of Classification Societies (IACS). "You can't insure against unlimited liability - and it wouldn't be worth the risk to take on the work. We'd have to say no."

The ship inspectors' lobby says government agencies do not have the resources to carry out their own checks of the safety and navigation equipment covered by the directive.

"It's unfair to put the entire burden of liability on classification societies," said centre-right MEP Georg Jarzembowski. "Even if they could get insurance, the premiums would be so high that their costs would explode. This is all about member states wanting to get rid of their own responsibility."

The European Parliament last November rejected an amendment to remove the liability ceilings from the European Commission's draft directive. Council of Ministers insiders say member states are unanimously opposed to any upper limit on liability.

The move to increase the accountability of classification societies is the first of two packages of measures named after the Maltese-registered tanker Erika, which devastated 400 kilometres of French coastline and destroyed marine and wildlife habitats when it sank off the coast of Brittany in December 1999, releasing 10,000 tonnes of heavy oil.

France had hoped during its presidency to get an agreement on the three 'Erika I' directives - including an increase in the number and scope of in-port ship inspections, and new powers to ban vessels from the EU. But the draft directive phasing out single-hulled vessels like the Erika is now on hold until an April meeting of the International Maritime Organisation.

The liability issue looks set to drag the classification society proposals into conciliation negotiations with Parliament.

One EU diplomat says the industry lobby has exaggerated the insurance issue.

"The Parliament is under the influence of the classification societies," he said. "Unlimited liability insurance is available for road transport - why should it be different for boats?"

EU ship owners could be forced to register their vessels outside the Union if inspection companies carry out a threatened boycott of new rules imposing unlimited financial liability for accidents at sea.

http://www.iacs.org.uk http://www.iacs.org.uk

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