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Operationalising the Polar Code in the Arctic Ocean: Insurance Industry Contributions International Maritime Organisation Headquarters, London

Michael Kingston

Partner

28 February 2014



Lloyd’s of London

2



Science of risk Prize

• Prize now in its sixth year

• Key objectives:

– Broaden understanding of risk and encourage new

research into emerging risks.

– Foster stronger links between insurance and

academic/research communities

• Over 100 insurance executives, academics and other risk

experts attend annual conference at Lloyd’s

• 2013 categories: Climate Change and Natural Hazards



Lloyd’s 2012 Arctic Report: Executive Summary

• Rapid and Disruptive Change presents uneven prospects

• Arctic likely to attract potential $100BN investment

• Significant knowledge gaps

• Arctic conditions remain challenging and unpredictable

• Environmental consequences of disasters likely to be worse

than other regions

• Politics of Arctic economic development controversial and fluid

• Continued development of Governance frameworks with

reinforcements where possible

• Risk Management is fundamental

www.lloyds.com/riskinsight

http://www.lloyds.com/riskinsight



Delimitation, according to IMO Guidelines for Ships

Operating in Polar Waters

5



Wreck Removal – The Costa Concordia

6



Global Location of Equipment

7



Cruise Ship off the Greenland Coast


©DWF LLP 2012 www.dwf.co.uk 9

Nordvik

”Nordvik” is an Ice 1 class (L4) tanker and is only allowed to sail on the Northern Sea Route (NSR) in light Ice conditions. The ice conditions in the northeastern part of the Kara Sea were regarded as ”medium” by Roshydromet in the period when the accident happened.



Akademik Shokalskiy



Insurers’ general attitude to insuring above 700 North

11



Draft Polar Code

SKULD.COM

• Polar Ship Certificate

• Polar Waters Operations Manual (PWOM)


©DWF LLP 2012 www.dwf.co.uk 13

Polar

Class

Ice Description (based on WMO Sea Ice

Nomenclature)

PC 1 Year-round operation in all Polar waters

PC 2 Year-round operation in moderate multi year

ice conditions

PC 3 Year-round operation in second-year ice which

may include multi-year ice inclusions

PC 4 Year-round operation in thick first-year ice

which may include old ice inclusions

PC 5 Year-round operation in medium first-year ice


PC 6 Summer/autumn operation in medium first

year ice which may include old ice inclusions

PC 7 Summer/autumn operation in thin first-year ice


How can these be

applied to a real

operation?

Where can a vessel

operate?

When can it

operate?

IACS Polar Class Rules - Interpretation



WHERE AND WHEN?

• Polar Class Rules must be linked to an Ice Regime system

• Ice Regime = a system that applies ice class requirement to

different regions depending on season

– Example: First year ice at -1 C varies a lot from first year ice

at -40 C

• If Polar Class Rules are not linked to Ice Regime, then rules

have little practical value as they cannot be applied in “real

world” operations.

IACS Polar Class Rules – Should be linked to an Ice Regime System



WHAT OPERATION?

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• Nature of operation is a critical factor when determining ice

class required

• Is there freedom to choose best (least ice) route or does vessel

have to defend a position (ice management)?

• Ice classes are assigned for single vessel operation

• Escorted vessels are considered protected by escorting ice-

breaker

• Escorted vessels shall be able handle the ice broken (managed

ice) by the escorting icebreaker.

IACS Polar Class Rules – What Operation?



So what can we do about this to make it work?

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• The Arctic should be divided into distinct geographical areas –

based on ice conditions

– Not too detailed to start

• There should be a number of seasons established in a year –

perhaps 3-4 – that captures ice seasons with ice coverage and

hardness

– Keep it simple

– The parameters should reflect IACS and IMO Polar Code

• Avoid politics – each Arctic country responsible for rules in their

“sector” of the Arctic.

• Justification: The Arctic Search & Rescue Agreement signed by

Arctic Council member states needs to work in practice.



Insurers’ attitude to insuring above 700 North

17

Polar Code

+

Ice Regime

+

Best Practice

=

Insurance

=

Trade and Investment

=

Sustainable Arctic

Development



Conference on Sustainable Arctic Shipping and

Marine Operations - 11 March 2014, London

18



Bridging the Arctic Marine Risk Gap

19

12 March 2014

London – Lloyd’s Adam Room, One Lime Street,

London, UK, EC3M 7HA



Learning from the Lessons of History –

Support for IMO Process

SKULD.COM



Our firm is driven by its core Values which focus on:

21

Our Clients Our People Our Community Our Environment

Fulfilling DWF LLP’s Core Values

DWF is the business law firm with industry insight.

Our legal experts combine real commercial understanding

and deep sector knowledge to help clients anticipate issues,

create opportunities and get the outcomes they need.

We’ll deliver the results that help you go in the right direction –

wherever you are.

www.dwffishburns.co.uk

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©DWF LLP 2013

DWF LLP is a limited liability partnership registered in England and Wales with registered number OC328794.

For more information about the details of the talk please contact:

Michael Kingston, Partner

Insurance, Marine Trade & Energy

E [email protected]

T +44 3333 20 22 20 F +44 3333 20 44 40

http://www.youtube.com/dwflaw

http://plus.google.com/100462631750370265995/posts

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Operationalising the Polar Code in the Arctic Ocean ... · PDF fileOperationalising the Polar Code in the Arctic ... PC 6 Summer/autumn operation in medium first year ice which may