Rate this article:  
Gard News 197, February/April 2010

Advice should be sought regarding the position under the P&I and hull and machinery policies before agreeing to carry nickel ore from certain ports.

The previous article in this issue of Gard News, by Brookes Bell, identifies the potential problems and dangers facing a shipowner who is asked to load a cargo of nickel ore in the ports and places mentioned in that article. Any owner who is asked to load such a cargo is recommended to contact Gard in relation to either their P&I cover or their hull and machinery cover, or both if both are placed with Gard, for advice as to the position under the relevant insurance policy(s) if it is decided to load the cargo on offer.

Each case will be considered on its own merits, but some general comments can be made. Firstly, it is essential that a shipowner identifies accurately and informs the insurers of the nature and characteristics of the cargo his ship will be carrying.   Rule 7 of Gard's P&I Rules for Ships deals with a situation where the risk is altered.  A similar rule concerning hull and machinery insurances can be found in §§ 3-8 to 3-13 of the Norwegian Marine Insurance Plan.   It seems clear from Brookes Bell's article that a ship may be invited to load cargo with characteristics which have either been misdeclared by the shippers, or which can not be ascertained accurately by the tests which have, according to the shippers, been performed.   In such circumstances, it is likely that Gard will take the view that the risk being assumed by an owner who, nevertheless, agrees to load such a cargo is altered. 

Rule 74 of Gard's P&I Rules (Unlawful trades, etc.)  may also be relevant insofar as the loading and carriage of misdeclared nickel ore can be considered to be an "unlawful, unsafe or unduly hazardous trade or voyage".

Furthermore, and although not stated explicitly in Gard's P&I Rules, it is a condition of cover that any dangerous cargo is carried in full compliance with the IMO Code of Safe Practice for Solid Bulk Cargoes (the BC Code). Similarly, the BC Code may be considered as a safety regulation in relation to hull and machinery policies, whereby a breach of the Code may affect cover. See for instance § 3-22 and § 3-25 of the Norwegian Marine Insurance Plan.   The circumstances described by Brookes Bell indicate clearly that the insufficient and/or inaccurate testing performed by the shippers and the resulting inability on their part to accurately state the characteristics of the cargo as required by the BC Code mean that such requirements will almost certainly not have been met.