Expert lifts lid on Panama’s report into costly Suez Canal blockage

Expert lifts lid on Panama’s report into costly Suez Canal blockage | Insurance Business Canada

Marine

Expert lifts lid on Panama’s report into costly Suez Canal blockage

“Hopefully, the Suez Canal Authority will adopt the report’s recommendations”

Last month, the Panama Maritime Authority (PMA) released its official investigation into one of the most financially costly maritime accidents in recent history. In March 2021, a massive container ship, the Ever Given, was grounded in the Suez Canal and blocked it for a week. The obstruction threw global supply chains into disarray and, according to Lloyd’s List Intelligence data, held up almost US$10 billion worth of trade. News reports put the damage costs at about US$1 billion.

The PMA found that communication difficulties between the Indian crew and the Arabic speaking pilots were a major cause of the accident.

Sydney-based Frazer Hunt (pictured above), a partner with Mills Oakley, is an expert in shipping and maritime law. He specializes in insurance-based transport and property claims and acts for insurers and logistics service providers in Australia, the UK and Europe. He agreed to answer questions about the PMA investigation from an insurance industry perspective.

A report about safety issues rather than claims

“Little will turn on this report for potential claims,” said Hunt. “Significantly, it was a marine safety investigation and, in theory at least, is meant to be separate from, and independent of, any other form of investigation into the causes of the casualty for the purposes of pursuing and defending potential civil, criminal and administrative proceedings.”

He said insurers for the various stakeholders would have conducted their own investigations. For example, UK P&I Club, the insurer of the Ever Given, completed its own report.

Hunt said the aim of this report by the flag state is to establish causes and make recommendations to improve safety and save lives in compliance with the marine casualty investigation code.

What caused the accident?

“The PMA identified various causes relating to both the physical aspects of the canal and poor communications between the pilots and the bridge and made recommendations, including crew training, clear communication during pilotage, evaluation of pilot actions and attention during transit,” he said.

The recommendations, Hunt said, included reviewing pilot training for manoeuvring larger ships and imposing English as the working language.

“Hopefully, the Suez Canal Authority will adopt the report’s recommendations,” he said.  “Such recommendations, if implemented, will help to reduce the likelihood of similar incidents in future,” he said.

Pilots are often immune from prosecution

The PMA’s investigation suggested that the pilots of the ship – who represent the Suez Canal Authority (SCA) and board the vessel to guide it through the canal – bore considerable responsibility for the accident.

“In many jurisdictions, including Egypt, the pilot has immunity from prosecution and is not liable for any damage due to their errors,” said Hunt.

He also said that pilots do not actually steer the vessel.

“They are consultants who draw on their local knowledge and experience of the area, including the geography and the effects of weather conditions, to advise the master who gives orders to the helm, the engines and the tugs to navigate the vessel from A to B.”

He said the ship’s master has particular knowledge of the vessel’s handling characteristics.

Importance of Bridge Resource Management

“So the pilot and master need to collaborate, hence clear communication is essential,” said Hunt. “The master, crew and pilots need to work as a team and need to communicate clearly, including using a common language.”

He said the marine industry term for this collaborative relationship is Bridge Resource Management.

“If nothing else, this was a lucky escape and there is a considerable incentive for all stakeholders to implement steps to minimise the chances of such a casualty happening again,” said Hunt.

He hopes the SCA adopts the report’s recommendations.

“The casualty brought attention to the potential knock-on effects to the economy, had the vessel not been re-floated in a short time,” said Hunt.

Report detailed an argument between the pilots

Insurance Business was interested in the PMA report’s inclusion of a transcript detailing a blow-by-blow argument between the Ever Given’s two pilots. IB asked Hunt if this inclusion surprised him?

“To the extent that communication issues contributed to the grounding of the vessel, then details of conversations between the pilots is important because it illustrates that the dispute almost certainly delayed the master and crew taking the appropriate evasive action, particularly as the discussions were in a local language (Arabic) that they did not understand, so had no opportunity to evaluate the competing actions,” he said.

Lawyers, Guns and Money

The PMA report also levelled criticism at the SCA for a lack of cooperation with the PMA’s investigation. Hunt said, “in an ideal world” stakeholders would provide full cooperation for an investigation that aims to improve safety and save human lives.

“In reality, however, all stakeholders will be motivated to minimize the likelihood that they will incriminate themselves and be found liable in the inevitable civil, criminal and administrative proceedings,” he said.

As a result, said Hunt, they “all adopt a strategy” of holding back information even when courts order them to produce it.

How can marine risks in the Suez Canal be reduced? Please tell us below

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