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For shipowners and charterers trading to the People’s Republic of China (PRC) there is still a problem in securing the services of competent surveyors to attend emergency situations. For cases where the survey is not immediately required surveyors can be sent from Hong Kong, from where it takes a few hours to reach most southern ports of China by plane or ferry and most northern ports by plane. However, this involves extra travelling expenses. Also, it has been found in the past that the PRC Maritime Courts generally do not recognise survey reports issued by foreign survey companies but only those issued by locally registered survey firms. Whilst there is now a change of attitude in the more developed maritime courts where the reports of foreign survey companies may in some cases be accepted as evidence, this is still very much at the discretion of the presiding judges. When the survey is arranged it cannot be certain that the report of the foreign survey company will be admitted.

Until recently, the following survey companies, all registered in the PRC, have been the only available options:
(1) China National Import/Export Commodities Inspection Corporation (CCIC)
(2) China National Import/Export Commodities Inspection Bureau (CCIB)
(3) Intertek Testing Services
(4) SGS-CSTS Standards Technical Services Ltd
(5) China Classification Society

CCIB and CCIC are state-owned enterprises. They were previously under the supervision of the Ministry of Foreign Trade. However, since August 1998 they have been under the supervision of the Customs Bureau. CCIB act mainly for local clients whilst CCIC act mainly for foreign clients. However, they are essentially one organisation wearing two hats.

Intertek Testing Services and SGS-CSTS Standards Technical Services Ltd are joint ventures with foreign survey companies.

These four companies perform all kinds of cargo inspections whilst China Classification Society perform hull and machinery surveys.

Recently, some independent local survey firms have become established in the larger ports such as Dalian, Tianjin, Qingdao, Shanghai and Guangzhou. They provide a wider choice for the market. It can be expected that in future, with the growth of activity in PRC ports, more independent survey companies will be established which can only lead to an improvement in the level of professionalism and impartiality.

Also, more recently the Club’s China correspondents, Huatai Insurance Agency & Consultant Services Ltd have started employing local surveyors to work for them. Huatai Insurance Agency & Consultant Service Ltd are a joint venture between The People’s Insurance Company of China, now called The People’s Insurance (Property) Company of China and The Ming An Insurance Company (Hong Kong) Ltd. The survey reports are issued by Huatai Insurance Agency & Consultant Service Ltd in their own name.

In view of the foregoing, for cases where it is anticipated that there will be a serious dispute involving litigation or arbitration in China, it may be advisable to instruct a foreign surveyor or expert from Hong Kong or elsewhere to attend jointly with a local survey firm in order to monitor the work. Should the case eventually be referred to the Chinese court, the report of the local survey company will always be admissible even if the report of the foreign surveyor or expert is not.

Gard News is published quarterly by Assuranceforeningen Gard, Arendal Norway.