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The Association shall cover costs and expenses directly and reasonably incurred in consequence of the Ship having stowaways, refugees or persons saved at sea on board, but only to the extent that the Member is legally liable for the costs and expenses or they are incurred with the approval of the Association. The cover does not include consequential loss of profit or depreciation.
The cover that is available under Rule 32 is becoming increasingly more important in view of the steadily increasing number of instances in which refugees and other persons attempt to gain access by sea to countries where they hope to lead a better life. The likelihood that a Member may become involved in such instances either as a result of the fact that the Ship may have stowaways on board or of the fact that the Ship may have saved other persons at sea during the course of their attempt to gain access to such other countries is steadily increasing and can result in complex and costly cases which also involve safety and security issues as evidenced by the difficulties incurred by the TAMPA off Christmas Island in 2000.
(A) Stowaways, refugees or persons saved at sea (Rule 32)
A ‘stowaway’ has been defined as ”a person who, at any port or place in the vicinity thereof, hides himself in a ship without the consent of the shipowner or the Master or any other person in charge of the ship and who is on board after the ship has left that port or place”,1 whereas a ‘refugee’ is defined as ”someone who, due to fear of persecution for reasons of race, nationality, political beliefs or other similar factors, is unable or does not want to stay in the country where he is and wishes to move to a new country”.2 A ‘person saved at sea’ is any person who is neither a stowaway nor a refugee, e.g. a crew member saved from another ship that is in distress.
(B) The Association shall cover costs and expenses... (Rule 32)
The Member may incur additional costs and expenses in maintaining stowaways,3 refugees4 or persons saved at sea which expenditure may continue after the Ship reaches port. Cover is available for the Member’s liability for such costs and expenses and includes costs and expenses incurred in relation to guarding, custody, immigration, deportation and repatriation.
(C) ...directly and reasonably incurred in consequence of... (Rule 32)
Cover is only available for costs and expenses that are considered by the Association to be ”directly and reasonably incurred in consequence of having stowaways, refugees or persons saved at sea on board”. Costs and expenses may include, e.g. subsistence, medication, as well as costs incurred to disembark stowaways. Whether the costs and expenses are ”reasonably incurred”, will be assessed on the merits of each case. For example, cover is available for the cost and expenses of diverting the Ship to an unscheduled port in order to land stowaways if the Member can demonstrate that it was reasonable to do so and that it was in the best interests of the Association. Assuming that the above test is met, there is in principle no limitation on the types of costs and expenses for which cover is available under Rule 32, but in most cases these will be restricted to the types listed in Rule 31, i.e. extra costs of fuel, insurance, wages, stores, provisions and port charges – over and above what would have been incurred but for the diversion to disembark the stowaway(s). However, it is important to note the proviso in Rule 32 that the cover does not include consequential loss of profit or depreciation.
(D) ...only to the extent that the Member is legally liable for the costs and expenses or they are incurred with the approval of the Association... (Rule 32)
The immigration authorities of many countries maintain a watch over a vessel which has stowaways or refugees on board or, alternatively, place such persons in custody ashore for the duration of the vessel’s call at that port. In one case, the ship was not permitted by the coastal state to land refugees saved at sea and the state used military forces to enforce this. Whatever the circumstances, cover is available under Rule 32 either when the Member has a legal liability for the costs or expenses or when the expenditure has been incurred with the approval of the Association.
Cover is also available for the Member’s liability to pay costs and expenses incurred whilst the immigration authorities consider asylum or other immigration applications by the alleged refugees, including the cost of repatriation, if the application for asylum or other immigration is denied and the cost of accompanying guards if considered necessary.
1 The International Convention Relating to Stowaways, Brussels 1957. Although this Convention is not in force it is generally considered to be persuasive in these circumstances.
2 The Convention Relating to the Status of Refugees, Geneva, 1951.
3 The Gard Guidance to Masters, 2nd Edition, 2006, contains more comprehensive information and advice on the practical aspects of dealing with stowaways, at pp. 296-298.
4 While cover is available for reasonable claims in respect of refugees, such expenses may be recoverable from the United Nations High Commissioner for Refugees (UNHCR). Members are advised to consult the Association in this regard.