One of the primary causes of liquid bulk cargo claims is contamination. Cargo contamination can occur at any stage of transportation, from the pre-loading phase to post-discharging.
Liquid bulk cargoes have stringent specifications, and any deviation from these can result in significant losses and subsequent claims, which can be costly and time-consuming.
The most common causes of contamination include:
- Inadequate coatings or materials for specific cargo types.
- Lack of cleanliness of tanks, pipelines, pumps, and valves. Failure to follow standardized cleaning procedures can leave residues that contaminate the new cargo. This cleanliness requirement applies not only to the ship but also to shore facilities such as tanks and pipelines.
- Cargo admixture, and unintended mixing of different cargoes can compromise the quality of the load.
- Incorrect temperature management can lead to contamination or degradation of sensitive cargoes.
Role of Institute Bulk Clauses and IBOC
The Institute Bulk Clauses (ICC) and Institute Bulk Oil Clauses (IBOC) provide specific guidelines and coverage terms that impact how contamination claims are handled.These clauses protect financial interests and promote safer and cleaner transport practices.
Unlike the Institute Cargo Clauses (B), which cover ‘loss or damage’, the IBOC explicitly includes ‘contamination’ as a covered peril. This distinction underscores the critical nature of contamination in liquid bulk cargo transportation and highlights the need for stringent preventive measures.
In the context of the IBOC, “contamination” refers to the presence of undesirable or harmful substances that can compromise the quality of the oil. This can include, but is not limited to:
- Mixing with other types of oil: During loading or unloading, there may be accidental mixing of different types of crude that degrade the quality of the product.
- Introduction of impurities: Solid particles, water, or chemicals can enter the oil during the transport process.
- Cross-Contamination: Residues from a previous cargo can contaminate the new cargo due to inadequate cleaning of the tanks.
Marine insurance relies on the clauses of these policies to effectively prevent, manage, and resolve contamination claims in the shipping industry.
Key actions in contamination losses/claims prevention.
To ensure the effective implementation of these guidelines and to prevent losses and claims due to contamination in the transport of liquid bulk cargo, it is essential to implement a series of key actions from a legal perspective.
These measures not only help protect the quality of the product but also minimize the risks and costs associated with potential insurance claims.
The main actions to follow are detailed below:
1. Maintenance and Cleaning of Tanks
Cleanliness is essential to prevent residues from previous cargoes and to avoid the contamination of subsequent cargoes being loaded or discharged. Different types of cargo may require specific cleaning methods.
Additionally, regular maintenance of equipment is essential to ensure proper functioning and to prevent failures that could lead to contamination. Regularly maintain all handling equipment, including pumps and pipelines, to prevent leaks and the introduction of contaminants. Utilize monitoring and measurement equipment to detect any signs of contamination during transportation.
1.1. Cleanliness Requirements
It’s recommended to establish the required cleanliness for the “next cargo” and identify the necessary cleaning methods to remove any residues of the “previous” cargo to prevent chemical reactions that could cause contamination.
These requirements will vary depending on the nature of both the previous and next cargo. It is crucial to follow standard cleanliness guidelines and advisable for all involved parties (shipper, charterer, shipowner, carrier) to agree in advance on these requirements.
1.2. Cleaning Procedures
Implement adequate cleaning procedures to ensure the tank is clean, dry, and visually free of residues from the previous cargo and any foreign matter, with no uncharacteristic odors.
This step ensures that the tank is properly prepared for the next cargo.
1.3. Cleanliness Certification
Inspect and certify that the required level of cleanliness is achieved, adhering to standards such as the Visually Clean Standard, Water White Standard, High-Purity Standard, and Ultra-High Purity Standard.
In the absence of a pre-loading agreement, it is common practice to follow guidelines provided by major companies or independent experts/organizations. Examples include:
- Energy institute guidelines: (i.e. HM50 Guidelines for the preparation of tanks and lines for marine tank vessels carrying petroleum and refined products).
- Dr. Verwey’s Tank Cleaning Guide .
- INTERTANKO Cargo Tank Cleanliness Standards for Chemical Tankers.
- Federation of Oils, Seeds and Fats Association (FOSFA) Guidelines for cleanliness and accepted and forbidden previous cargoes.
These inspections should be carried out by certified inspectors, and all procedures should be meticulously documented. Detailed records of cleaning processes, inspections, and cargo handling provide critical evidence in the event of a claim.
3. Sampling
In claims management, multiple sampling is crucial to determine liability for contamination.
Proper sampling techniques and timely analysis help in detecting any potential contamination before it escalates into a significant issue. It is essential to collect multiple samples throughout the entire process. Approximately 40 percent of alleged shipboard contamination problems are found to be shore-related upon investigation.
Samples often serve as the only hard evidence that shipowners can present when defending against cargo contamination claims.
Therefore, sampling should be conducted by an appointed surveyor at both loading and discharging ports, as well as at various points throughout the loading and discharging process. Joint sampling with the presence of all interested parties is beneficial, and an independent laboratory should analyze the samples to ensure impartiality and accuracy.
Proper labeling and storage of samples are essential to maintain the integrity of the evidence. Following guidelines from recognized organizations such as the American Petroleum Institute (API) and the International Standards Organization (ISO) for best practices in quality and quantity measurements is recommended.
Additionally, maintaining detailed records of all loading, transportation, and unloading operations, including quality tests and cleaning measures, is crucial. Any contamination incidents should be reported immediately, with all actions taken to mitigate the issue thoroughly documented.
Pre-Loading Quality Assurance
Before loading, conduct thorough quality tests to ensure the cargo meets the required specifications. This includes:
- Shore tank sampling: Analyze the cargo stored in shore tanks to establish baseline quality. Ensure tanks are clean and free from contaminants.
- Jetty manifold sampling: Take samples at the jetty manifold to check for any contamination introduced during transfer from shore tanks to the ship.
- Shipboard manifold sampling: Conduct sampling at the shipboard manifold to detect any potential contamination as the cargo enters the vessel.
- First foot samples in cargo tanks: Collect samples once the first quantity of cargo (the “first foot”) has been loaded into the tanks to verify cleanliness and detect contaminants early.
- Completion of loading samples: Take samples after the completion of loading to ensure the entire cargo batch maintains the required quality standards.
Sampling at discharging port
- Pre-discharge samples: Collect samples from the cargo tanks before discharging begins to confirm the cargo remains uncontaminated during transit.
- Shipboard manifold sampling before discharge: Sample at the shipboard manifold to identify any contaminants potentially introduced during the voyage.
- Shore tank sampling before and after discharge: Take samples from shore tanks both before receiving the cargo and after discharge to detect any contamination occurring during the unloading process.
Importance of continuous sampling
Continuous sampling throughout the loading and discharging process is imperative for detecting and managing any potential contamination before it escalates into a significant issue. Even with the implementation of proper cleaning operations, the possibility of contamination remains. Regular sampling serves multiple crucial purposes.
First, it allows for the identification of contamination sources, determining at which stage—whether during loading, transit, or discharge—contamination occurs. This facilitates timely and effective intervention.
Second, it verifies compliance with cleanliness standards by ensuring that cleaning procedures are effective and that tanks and equipment meet the necessary cleanliness criteria required for the cargo.
Third, it documents cargo quality by providing a comprehensive record of the quality at various stages. This documentation is essential for resolving disputes and claims, as it offers verifiable evidence of the cargo’s condition throughout its handling and transport.
By adopting these practices, insurers can help their clients minimize the risks of contamination, thereby reducing the frequency and severity of claims.
For more detailed guidance on contamination prevention and handling bulk cargo claims, or to discuss specific legal concerns, please contact our team of transport law specialists. Our expertise ensures that you receive comprehensive legal advice tailored to your needs.