Ports that provide more than 50,000 jobs and the ships they service adhere to both federal and international standards
The safe movement of ships and the people and goods they carry is crucial to our economic well-being and for the protection of our environment. B.C. ports provide more than 50,000 jobs and contribute more than $10 billion in economic output. Our pristine environment is world renowned.
To serve both objectives, the international and domestic shipping industry relies on many risk management systems.
Some elements of risk management include the enforcement of Canadian and international standards by Transport Canada and international vessel Classification Societies, marine communication and monitoring services provided by the Canadian Coast Guard, compulsory pilotage and insurance provided by international protection and indemnity clubs.
Since 2002 almost all ships trading internationally have been required to comply with the International Safety Management (ISM) Code, a set of International Maritime Organization (IMO) standards for the safe management and operation of ships and pollution prevention.
The ISM Code is part of the Safety of Life at Sea (SOLAS) convention.
Transport Canada oversees the implementation and enforcement of Canadian laws and international standards adopted in Canada. Under the international Port State Control Program, Transport Canada may inspect any foreign commercial ship in Canadian waters to ensure that it complies with the ISM Code, SOLAS and other international and Canadian laws.
The Canadian Coast Guard provides communication services to manage vessel traffic on the B.C. coast. Almost every commercial ship prior to entering, or while underway in Canadian waters, is required to participate in our vessel traffic system. The Coast Guard monitored scheme also requires that ships respect designated navigation lanes in some high traffic areas along the coast.
In B.C., foreign ships over 350 gross tons are required to use a licensed marine pilot to provide local navigation advice. A marine pilot is a professional mariner with detailed knowledge of B.C. waterways and conditions. Obtaining a marine pilot certificate requires decades of experience, rigorous exams and an apprenticeship.
Risk is also managed through the involvement of protection and indemnity clubs (P&I Clubs), which are groups of shipowners who mutually insure the liabilities of each other's vessels. Each member of a P&I Club is both an insurer and insured, which means that they are dependent on each other for the success of the club. Because membership in a club requires sharing in the risk of others, each member has a direct interest in who becomes a member and how the other members of the club conduct their business.
Members need to maintain their ships "in class," meaning compliance with standards established by recognized international vessel Classification Societies. These non-governmental organizations establish and maintain technical requirements for the construction and operation of vessels. Most of the Classification Societies maintain offices in Vancouver and also audit and enforce compliance with SOLAS and the ISM Code.
Thirteen of the largest P&I Clubs form the International Group of P&I Clubs which provides liability insurance for more than 90 per cent of the world's shipowners. This diversification of risk within the marine insurance market means that there is insurance to cover even the largest shipping disaster.
P&I Clubs also provide insurance in the event of an oil spill. Canada is a party to several international conventions which provide for secure sources of compensation for damage caused by oil from ships, whether the oil is cargo or used as fuel.
Under the conventions, ships over 1,000 gross tonnage or carrying more than 2,000 metric tonnes of oil must maintain sufficient insurance, or other financial security, to cover the liability of the shipowner for oil pollution damage. Under the conventions, if a spill were to occur in Canadian waters, claims for compensation may be brought directly against the ship's insurer.
Therefore, even if the ship involved is lost or its owner is bankrupt, compensation for oil pollution is available.
Ships that do not have the required financial security may not enter Canadian waters.
The conventions also eliminate the need to prove that the spill arose from an act of negligence by the shipowner making it much simpler to hold a shipowner liable for a spill.
In 2010, the Canadian Transportation Safety Board, a government body which investigates commercial marine accidents in Canada, reported that "statistical analysis ... indicates that there has been a significant downward trend in the number of shipping accidents since 2001."
This article first appeared in The Vancouver Sun in January 2013.