Consider careful planning, liability issues in STS operations

Discussing the complexities involved in ship-to-ship transfers, HSEQ and compliance specialist Alasdair Adamson and Preston Turnbull partner Robert Collins underscored the importance of developing and following robust procedures.

In these operations, “it is all about organisation, developing safe and reliable procedures and ensuring everyone sticks to these procedures” said Mr Adamson.

It is vital that operators develop concise contingency measures because of the inherent risk present in such operations.

As Mr Collins said, STS can create legal situations that are like “no other” in shipping. The governing law and jurisdiction is generally established either by a contract between the parties or decided by the law of the place where the damage occurs.

However, the position in contractual liability is between the charterer and the vessel owner, not between the two vessel operators conducting the operation, and exercising due diligence is the obligation of one of the parties to the contract. Further complications arise when apportioning liability, he said.

Mr Collins noted that most legal issues do not arise out of STS equipment, but have to do with errors in the planning stage and the event of collision.

While Mr Adamson broadly agreed with this view, he felt that (making an exception for oil majors) a ship’s officers are not especially diligent in inspecting third-party STS equipment and 41% of webinar attendees agreed with this view.

Mr Adamson felt that diligence and the possibility of an accident are interlinked. “From an operational point of view, the amount of times when you think, there were so many indicators that could have made this result so very different, and that is at the root of a lot of issues in STS operations.”

Mr Adamson added that Masters retain absolute authority in decision making. A triumvirate of key decision makers – two Masters and a person in overall advisory control (POAC) – must provide unanimous approval for an STS operation to commence.

In a poll, 68% of attendees felt that Masters do not take enough responsibility for decision making and tend to agree with the POAC without question.

Both experts also considered practical challenges to STS operations. For example, operators face difficulties in West Africa where STS operations are often a necessity because of the scarcity of refineries. Mr Adamson said the situation is improving, citing Songa Ship Management’s experience of moving operations to Lome, Togo, to increase efficiency and reduce bureaucratic procedures.

Reiterating the problems with regards to governing law and jurisdiction, Mr Collins said “it can get difficult” as parties may have to submit to either the law in the place of damage or look to some tradeoff in English law.

On the question of specific equipment, Mr Adamson said, for fender certification, safety valve pressure tests should be based on the manufacturer’s guidance. More than three-quarters (78%) of respondees felt that most low-contact damage in operations is caused by the incorrect placing of secondary fenders.

Replacing a transfer hose depends on several factors, including the compatibility of the liquids that have passed through the hose, maintenance, pressure testing and storage. Operators are advised to monitor their equipment to ensure compatibility and demonstrate the equipment’s fitness for purpose to regulatory authorities.

A practical point was raised about the legal issues of using baskets for transporting individuals where the equipment is not certified for such use. Mr Collins said owners have strict liability in cases of injury and death. “If this happens and there is an issue as a result, then that owner and the insurer will have to pay out.” An owner is not likely to have a strong defence for such an act despite it being industry practice.

From a liability perspective, Mr Collins said parties should aim for clarity in their contractual relationship by considering an official STS contract between vessels with a choice of law and jurisdiction and by working with the insurers.

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