Port State Control : A Black hole in the dark sea!

Padmakumar Krishnan

Maritime shipping is probably one of the oldest businesses in the world. It is also
by nature perhaps the most international business. It cannot be regulated by any
national law because its activities go far beyond the borders of any nation. There
are many international conventions and protocols that regulate safety and
security of maritime operations and protection of the marine environment. There
is no international police force to ensure compliance of the provisions of these
treaties.
Member states of the International Maritime Organization, being parties to the
instruments implement them in their role both as flag state of the ship concerned
and port state where the vessel may call. The responsibilities are
complementary to one another. It is the primary responsibility of the flag state to
ensure that ships comply with all international safety requirements no matter
where they are. It is the responsibility of the port state to ensure similar
compliance by all ships operating within its jurisdiction.
As per IMO, Port State Control (PSC) is the inspection of foreign ships in
national ports to verify that the condition of the ship and its equipment comply
with the requirements of international regulations and that the ship is manned
and operated in compliance with these rules. This ensures that as many ships
as possible are inspected but at the same time prevents ships being delayed by
unnecessary inspections. The primary responsibility for ships' standards rests
with the flag State - but port State control provides a "safety net" to catch
substandard ships.
IMO has encouraged the establishment of regional port State control
organizations and agreements on port State control - Memoranda of
Understanding or MoUs - have been signed covering all of the world's oceans:
Europe and the north Atlantic (Paris MoU); Asia and the Pacific (Tokyo MoU);
Latin America (Acuerdo de Viña del Mar); Caribbean (Caribbean MoU); West
and Central Africa (Abuja MoU); the Black Sea region (Black Sea MoU); the
Mediterranean (Mediterranean MoU); the Indian Ocean (Indian Ocean MoU);
and the Riyadh MoU.
Port State Control (PSC) is done for and on behalf of the flag state. The
administration must ensure that the visiting ships maintain the same standard of
safety as their own ships. The philosophy is that life and environment are
important, irrespective of the ship's ownership. That is why a ship may be
detained if, in the opinion of the inspector, allowing the ship to proceed to sea
may pose danger to life, property or environment. Unless there is genuine threat
to life, property or environment, a foreign flag ship is normally not detained. In
case of a detention, the flag and port state administrations work together to
rectify the deficiencies to a mutually satisfactory level.
In order that ships are not inspected repeatedly one port after another, member
states have formed regional networks (known as memorandum of
understanding -- MOU) under IMO guidelines for coordinated inspections. It is
all done in the spirit of cooperation for the common cause of safety, security and
environmental protection.
Unfortunately, things have changed. Greed has replaced cooperation with
corruption, where an inspector finds a number of faults to threaten a ship with
detention. A suitable bribe allows the ship to continue for the deficiencies to be
rectified in the next port or some time later. There is another way. The inspector
finds some defects and then recommends a good local workshop for the job.
The inspector gets his reward from the workshop. Unless the repairs are carried
out through the workshop of his choice, he would never clear the NC and the
ship ends up getting detained for ad infinitum.
Recently, we have been coming across another problem -- state sponsored
extortion. The recent economic recession has forced many countries to tighten
their belts. The Spanish government instructed the Treasury Office inspectors to
increase survey and inspection work to raise an additional Euro 4 billion. The
Spanish Law Article 115.3 Law 27/ 92 requires the master of a foreign ship to
give truthful declaration of any deficiencies of the ship.
If the PSC inspector finds any fault or deficiency other than what is stated by the
master of the ship, then the ship is served with an arrest order by the harbour
master. The ship is then fined anything between Euro 60 and 90 thousand. The
ship is not released until the money is paid in cash or by bank guarantee. Most
owners prefer to pay cash because bank transactions take time and the ship
remains stranded. The whole operation in any Spanish port is coordinated by
the Government Head Office of PSC in Madrid. We understand that normally
non-EU ships are victims of this operation.
It is widely recognized that flag states are the primary enforcers of international
shipping regulations and that they exercise their rights of port state control
(PSC) over foreign-flag vessels entering their domains. However, many PSC's
are accused of being lax with their own vessels, while effectively inspecting
foreign ships while in their control.

Intertanko, the independent tanker owners group, has had a problem with
various PSCs for quite sometime. It recently began working with the Paris
Memorandum of Understanding (MOU) secretariat about these problems.

Intertanko highlighted some of the problems by issuing a list of concerns:

selective targeting- in which a PSC selects ships from another PSC that has
targeted its vessels; easy targeting – where good and compliant owners – ships
are picked to meet inspection quotas, which in turn reverses incentives to be a
responsible owner, and, finally, malpractice.

Blatant malpractice, or better put, corruption, is a real problem throughout the

world. Intertanko has identified two forms of corruption. The first is where port
state inspectors act on behalf of third parties and pressure an owner to use
certain port services at exorbitant cost. An inspector can also harass a vessel to
such an extent as to drive an owner from continuing in that specific trade, to
which a competitor benefits.

Secondly, there is the old fashioned bribe, where the inspector, either on their
own behalf or collectively, makes financial demands ranging from cash to
requiring an owner to make unwarranted repairs or parts replacements to avoid
a deficiency report or, worse, detention.

Intertanko and the Paris MOU came up with four action points that were agreed
upon: regular and open communications between shipowners and PSC officials;
extending a worldwide basis for independent appeals for owners who are
supported by their flag or class that have a legitimate grievance about a specific
detention; offering a venue or mechanism in which owners can provide feedback
on particular problems that are encountered with a specific port state, and, if
necessary, reporting abuses by port states to the IMO.

The above practice is wrong and unlawful. It is certainly not expected from an
EU state. Spain must change its domestic law, which is not consistent with
international law. Any state can have standards higher to those specified in
international conventions (for its own ships) but cannot apply or impose that to
visiting foreign ships. The provision of PSC under SOLAS, LL, MARPOL, STCW
and other conventions are for safety, security and protection of environment.
PSC provisions are not supposed to be used for raising revenue. This is
because fines/ penalty cannot replace safety.
Ships may be detained for safety reasons until the threat is removed. The order
of arrest is normally issued by a court against lien or claim and has nothing to do
with safety. Besides, PSC is supposed to be exercised by surveyors belonging
to the national administrations and not by officials of the port authority, who have
vested interest with period of stay of the ship for collection of fees and charges.
The matter, unless immediately rectified by the respective government, should
be taken up on the floor of the IMO for violation of ethical standards specified in
international conventions. European Maritime Safety Agency (EMSA), of which
every maritime nation is a member, should also look into the matter. Any
maritime nation that violates the norms and encourages or entertains corruption
should be suspended from the respective MOU until it fully respects
international law, practice and procedures. The world community of shipping
must not remain silent. We have to expose this sort of state sponsored illegal
acts. We must name and shame all involved in such activity so that no other
state can think of doing such things.
P&I club Skuld has warned the industry that Spanish PSC inspectors are
targeting foreign ships in a bid to raise revenues to help the country’s shaky
economy. Skuld’s caution is based on a report by its correspondents Bull Marine
Surveyors of Spain. “Due to the current financial situation in Spain, and due to
the fact that the Spanish government urgently needs income, they have
instructed the Treasury office inspectors to increase their surveys/inspections in
all companies in order to get an extra income of EUR 4 billion”, it says. “In our
opinion, the Spanish government has also instructed the Head Office of PSC in
Madrid to trace, arrest and fine vessels in order to get extra income”.

“According to this new regime, PSC Inspectors will aim to find detainable
deficiencies, resulting in large fines and delays”.

It is believed that Treasury inspectors in Spain leaked the government’s plans to

local newspapers. Skuld says that ships have been fined between EUR 60.000-
90.000 in the past- normally EUR 60.000, which is the minimum amount that
has to be guaranteed in order to release the vessel.

Masters are always liable to find their vessels arrested if any serious deficiency
is found anywhere in the world. However, there is a world of difference between
not allowing a vessel to sail on genuine grounds and targeting foreign ships for
revenue. Spanish law, like in some other countries, requires a Master to declare
any material or serious deficiencies in the ship to the authorities before arrival.
Ship-owners fear that the authorities in Spain will misuse this law, finding small
deficiencies at PSC inspections and claiming that they were not properly notified
by the Master beforehand.
Bull says that “even a small failure or lack of an official stamp in the normal
books can be a reason to arrest and fine a vessel. As everyone knows, anyone
who wishes to find things amiss on board can find them without any problems,
as even new ships are not perfect ships. We recently had a detention and fine of
a vessel which was only 6 months old.”

The Club says that Spanish Flag vessels are not being targeted, and neither are
passenger vessels or those owned by bigger owners because of obvious
implications. “The focus is on non-ECC flags and medium to small tonnage”.

Worse, the Notification of Arrest is delivered on board in Spanish, and the

amount of fine must be deposited before any appeal can even be made. “After
approximately one month, depending on each port and workload they have, the
final fine is imposed, and then this new amount must be placed before the first
guarantee is returned,” Skuld says. “No matter if the Owners agree or not with
the deficiencies traced, the only way to release the vessel is to place the amount
without any arguments. The vessel is released and allowed to sail only after the
amount requested by the PSC has been transferred”. Payment normally takes
three hours after the money and documents have been gathered by the
shipowner’s representatives.

“Presently the situation is so drastic that any silly excuse is used to detain
vessels following all laws and regulations, including article 105.3 lay 27/92 which
states that the Master must advise of any deficiency on board. The article
considers this a minor offence, but the fine imposed is EUR 60.000, so perhaps
it’s a minor offense with expensive consequences”, Bull says. The Club says
that the matter can take between one to three years to be finally resolved, in
case the owners or their P&I Club allege unfair detention.

Shipowners can only hope that other countries in the Eurozone- with more than
a few shaky economies- do not follow the Spanish ‘model’ for raising revenues
through unfair fines. Although PSC has been misused by officials in many parts
of the world for extortion, that is very different from an official policy that
threatens to promote this practice. Moreover, from one of the Paris MOU
countries too.
Port State Control (PSC) agreements between maritime nations and the
International Maritime Organization give every seaport country the right to make
independent inspections of all ships calling their ports. PSC inspectors are
usually specialized, although in the United States, the Coast Guard’s Marine
Safety Office has been given this responsibility. PSC inspectors have the power
to detain a vessel in port whose condition or equipment has been determined to
be sub-standard. This detention prevents the vessel from leaving that port until
the deficiencies are remediated. Generally, the courts of a port state do not
interfere with PSC inspections, so the shipowner’s options in freeing a detained
ship are limited to
those that satisfy the inspector. In many cases, PSC inspectors defer to the
vessel’s statutory-certificate surveyor—the class surveyor who originally issued
the vessel’s certificates—when deciding what repairs will be required. However,
PSC inspectors are not bound to do so, and they even have the power to reject
even validly issued statutory certificates.
In some matters, the PSC inspector is bound by international standards like
SOLAS, which imposes requirements for safety, navigation, and communication
gear.

Theoretically, a vessel with all required safety gear onboard may not be detained
for lack of such gear. Detentions for lack or expiration of SOLAS equipment are
not the shipowner’s greatest challenge, however, since they may be remediated
by simply purchasing and placing the required gear onboard. The most difficult
detentions are those relating to hull condition. In this area, the safety of the
vessel is a matter of opinion—two surveyors may have radically different
opinions of a given vessel’s hull condition—and if the PSC inspector rejects the
ship’s certificates, the shipowner has little or no recourse but to bring the ship
into compliance with his standards. It should be remembered that in many ports
there is a tacit (and sometimes not so tacit) understanding that the longer a
vessel is detained in the country, and the more extensive the list of required
repairs and supplies, the more money will flow into local pockets. This is
especially true for ships in the tramp trade: because local officials know the ship
may never return, whatever money the locals want to extract out of her will have
to come from her present port call. Corrupt PSC inspectors, or those merely
seeking to help their neighbors, therefore have every reason to find deficiencies
and very little reason not to. PSC standards wildly vary between countries and
regions. Generally, the countries and regions with the strictest standards are, in
descending order: (1) United Kingdom; (2) United States; (3) all Scandinavian
countries; (4) Holland; (5) Belgium; (6) Germany; (7) the rest of Europe; (8)
Mexico; (9) Asia; (10) all Caribbean countries; (11) Latin America; and (12)
Africa. Although PSC inspections are rare in most of the countries of Latin
America, the Caribbean, and Africa, when they are made, it is typically for the
sole purpose of obtaining a payment for clearing the detentions.
Guidelines for Avoiding PSC Detentions

Make a favorable first Impration.

Before a ship-owner sends his ship to a port with active PSC regimens, he
should ensure that the vessel looks good at first glance. It is well-known that
PSC inspectors decide how intensive their inspections will be based upon their
first impression of the ship. Many ships with derelict engine rooms and wasted
forepeak tanks have escaped serious inspections by having well-painted decks
and clean saloons for the inspectors to drink their coffee in.
Don’t overlook minor certificates.
The shipowner should ensure that every certificate and document is valid. Many
times the master will have overlooked deficiencies in minor documents like the
De-ratting Certificate or Garbage Log, but these small deficiencies give the PSC
inspector a reason—or at least an excuse—to make an extensive inspection.

Make main areas presentable.

The first PSC inspection is generally cursory, and includes the deck,
accommodations, hold, engine room, and bridge. If all looks satisfactory in these
areas, it is extremely unlikely that the inspector will want to go into tanks or other
enclosed spaces. The master should therefore ensure that any potential
deficiencies in these areas are corrected before the initial visit—which could
come as soon as the vessel makes All Fast. Many times, a small deficiency that
could have been cleared for a few hundred dollars leads to deficiencies that
ultimately cannot be cleared at all.

Establish remediation procedures.

If the shipowner decides to enter a high-PSC-activity port with a ship having

condition or equipment issues, he should have resources and procedures in
place to clear the most likely deficiencies without delay. For every week that the
ship sits under detention, the dangers of other shoreside claims, and even
fraudulent seizure, increase dramatically.

Tow the ship to International water.

The owner of a ship under detention should investigate the possibility of using a
tug
to tow her to international waters. Certification requirements for a vessel under
tow—particularly if unmanned—are greatly relaxed, and most PSC authorities
will allow a
detained vessel to be towed out. Sometimes, especially in the United States, the
Coast Guard will issue a clearance under tow only to a shipyard where the
deficiency will be remediated. The shipowner may then find that his best
recourse is to obtain clearance to the nearest foreign shipyard. After the vessel
reaches international waters, the shipowner may make his own decision as to
his best interests in the matter. A master of a vessel with valid certificates may
cancel a tow at any time, for any or no reason, and the vessel may not be
stopped on the high seas for reasons of condition of hull or equipment except by
her own flag state.

However, in most cases where the vessel is seaworthy but still can't clear her
detentions—a wonderful irony not lost on shipowners—PSC will usually approve
a tow to international waters, where the vessel will be free to proceed foreign
under her own power.

Set limits on what you will spend.

The shipowner should always be aware of the actual, real-market value of his
detained vessel. Many owners spend far in excess of their vessels’ real values
in trying to remediate PSC detentions, sometimes without ever freeing the
vessel. This problem is especially acute in countries where PSC inspectors act
in de facto alliance with shoreside suppliers and repairmen: the inspector will
first detain the vessel for smaller items to get the owner to commit to the repairs,
then he will impose new and increasingly expensive repairs on every re-
inspection. This is done under the often-validated theory that the more the
owners invest in vessel.
Now the more reluctant he will be to abandon her later. To avoid this, the
shipowner should decide immediately whether present and foreseeable
detention items can be remediated within his budget. If they cannot, he should
decide whether to attempt an alternate resolution such as towing or to abandon
the vessel immediately.

Obtain assistance from vessels surveyor.

In questions of vessel hull or deck condition, the shipowner may be well-advised

to fly the vessel’s class surveyor—the one who personally issued her certificates
—into the PSC port. He may be able to reassure the PSC inspector that the
certificates were validly issued and that the vessel is actually seaworthy. Often,
as a fellow-surveyor, he can negotiate on a personal basis with the PSC
inspector for more reasonable requirements. Many times, the first thing the PSC
will do upon detaining a vessel is to
require a visit from her local class surveyor. Unfortunately, in some countries,
the PSC inspector and the class surveyor may both be receiving kickbacks from
local repair interests, so it is even more important to fly in the vessel's certificate
surveyor. Since the vessel’s certificate surveyor and the local surveyor both
work for the same entity, theoretically they must enforce the same standards. In
other words, the class society cannot have two surveyors requiring different
things of the same ship. Since the certificate surveyor will have to stand behind
his survey (he cannot
afford to admit that he certificated a sub-standard vessel), he will do his best to
obtain the cooperation of the local class surveyor. Plus, of course, he is being
paid for his time by the shipowner.

Conclusion :

The key to avoiding Port State Control problems is knowing Port State Control
standards (and, by corollary, class standards) and knowing the vessel’s actual
condition. Owners who are actively involved in their vessels’ maintenance are
seldom surprised by PSC detentions. And although there are unjustifiable
detentions, especially in England and Northern Europe, the great majority of
detentions worldwide relate to actual vessel deficiencies. A smart owner knows
what countries his vessel can trade. Many owners of
vessels in the Caribbean market advertise them as “non-US traders” to alert
potential charterers that they will not allow their vessels to call US ports.
Conversely, owners who are confident that their vessels can pass Coast Guard
inspections advertise them as “US traders” and charge higher rates. There is no
question that the Port State Control initiative has resulted in higher standards for
vessels in international trade, with correspondingly higher costs for shippers and
consumers. For the shipowner, however, Port State Control does not just mean
a higher cost of doing business. It may well mean ruin. It is imperative, then, that
he anticipate PSC inspections, prepare for them, and be ready to deal with their
results. If he does not, he will soon be out of business, for a ship that can’t leave
harbor is no ship at all.