Worldwide: Ebola: Effects On Shipping

The current outbreak of the Ebola virus is understandably causing widespread international concern, with over 4,900 deaths out of approximately 13,000 people understood to have been infected or exposed at the date of publication.

Concentrated in West Africa (WAF), the outbreak started in Guinea, quickly spreading across land to neighbouring Liberia and Sierra Leone, all countries with weak health systems, human and infrastructural resources. At date of issue these are the only countries classified by the World Health Organisation (WHO) as having established transmission.  Though abating in the original hotspots, medical opinion is that the virus is still spreading geographically to new districts, including the capitals, of these countries. It is, however, hoped that increasing international support and investment and the imminent arrival of the UK armed forces in Sierra Leone, French forces in Guinea and US in Liberia will assist efforts to abate transmission.

Nigeria, a major shipping hub, is the only affected country in WAF that is thought to have the health system and infrastructure to cope with the epidemic and as a result transmission has not been established outside of the imported cases (in Lagos and Port Harcourt).  Senegal, Spain, Australia, France, Norway, USA, the UK and most recently Germany have all had reported cases but, like Nigeria, have no established transmission outside of those linked to the imported cases.

On 8 August the WHO Director-General declared the outbreak a Public Health Emergency of International Concern, which imposes on the affected countries duties such as screening at the points of exit (airports, seaports and major land crossings) for symptoms consistent with Ebola.  It is, however, worth noting that the high temperatures and other symptoms of Ebola often do not manifest for 4 days after exposure which has led to people slipping through the net, and accordingly the US and now the UK are also screening arrivals.

Impact on Shipping Operations

The WHO, International Chamber of Shipping (ICS), International Maritime Employers' Counsel (IMEC) and International Transport Workers Federation (ITF) have all issued advice, focusing on the duty of care that owners owe to their crew, addressing sanitary/safety precautions (i.e. limiting crew changes, shore access and interaction with stevedores), security (i.e. vigilance against stowaways and implementation of the ISPS Code) and contingency planning which should be followed. A selection of links to the key guidance is included at the end of this article.  With the correct measures in place, the risk of infection for crew visiting infected ports should be low and the IMO (recently backed by the Liberian Registry) has recommended that there should be no general ban on international travel or trade due to the Ebola virus.

As the epidemic continues, WAF ports and terminals are however increasing monitoring and screening prior to granting free pratique. Nearby, but as yet unaffected, countries such as Gabon and Equatorial Guinea are understood to be prohibiting entry to vessels servicing Guinea, Liberia and Sierra Leone. Notably Malta also recently refused entry to the Hong Kong registered bulk carrier "Western Copenhagen", en route from Guinea to Ukraine because she had an ill crew member onboard.

Before and after a vessel calls at a high risk port, parties should therefore be prepared for delays and quarantine of approximately 21-30 days while the local authorities inspect the vessel and crew. Outside of WAF, Barbados, Brazil, Argentina, South Africa and the US have all implemented mandatory screening and inspection policies; for example, according to the USCG Marine Safety Information Bulletin (MSIB) 12-14, vessels calling at US ports are required to report any crew or passengers who have fallen ill or died within the last 15 days and the coastguard will review all arrivals to determine if the vessel has visited a country impacted by Ebola in the last 5 port calls.

Owners willing to send their vessels to Ebola infected or high risk WAF ports may be increasingly hard to find and accordingly parties may see price variation of goods exported or delivered, and on freight rates, both of which will impact on commodity sellers and buyers.

Quick Guide to Legal Impact of Ebola for Charterparties

While it clearly has a propensity to disrupt operations and incur significant costs, Ebola is not strictly a shipping issue. Any problem is going to be determined by the specific facts of the case and the terms of the relevant charter.

For assistance, we have however set out below the standard contractual implications for delay, quarantine or deviation as a result of Ebola on both time and voyage charterparties.

Time Charters

Safe Port Warranties  and Hire  
  • An owner's primary obligation is to follow the charterer's legitimate orders unless compliance exposes the ship or crew to unacceptable risk rendering it unsafe.
 
  • An owner's primary obligation is to follow the charterer's legitimate orders unless compliance exposes the ship or crew to unacceptable risk rendering it unsafe.
 
  • If the owner refuses to follow the charterer's orders without sufficient grounds (i.e. the port is not deemed unsafe) any delay may then be for the owner's account.
 
  • If, after giving orders, the port becomes unsafe then charterers have a new obligation to cancel the original order and nominate a different port that is prospectively safe.
 
  • If a vessel is prevented from entering a port due to a previous call at an Ebola-infected port under the same the charter, the liability may rest with the charterer and the vessel remains on hire. If it is a new charter then liability may, depending on the terms of the charterparty, rest with the owner.
 
  • An owner may also owe separate obligations to any bill of lading holders.
Quarantine and Deviation /Off Hire  
  • Depending on the terms of the charter (e.g. SHELLTIME 4 specifically refers to "quarantine restrictions") and whose orders are responsible for the quarantine/delay, a vessel could be off hire if quarantined.
 
  • Similarly, if the vessel is forced to deviate to offload a crew member or stowaway with suspected Ebola, or if a large number of crew contract Ebola, then the vessel could also be put off hire.

Voyage Charters

Safe Port Warranties
  • Many voyage charters contain safe port warranties. If so, then a charterer's primary obligation is to nominate a port which is prospectively safe. If the port becomes unsafe after nomination then an owner may be able to rely on an Ebola or wider fever/epidemic clause (if included), so that orders to ports that present a significant Ebola risk can be refused.
 
  • However, and as set out above, a port might not be unsafe just because it is infected by Ebola (e.g. if appropriate safety measures are in place).

Free Pratique  

  • If free pratique is withheld, laytime will not commence unless there is an express clause to the contrary (WIPON). Charterers may wish to include such an express provision.
 
  • In the Apollo [1978] 1 Lloyd's Rep. 200 two crew members discovered to have typhus were removed at a previous port and the vessel was disinfected and inspected thoroughly. The Court found that in this instance issuing Free Pratique was not a formality and there was good cause for the health authorities' actions, which were not considered to prevent the full working of the vessel.
Quarantine/Delay
  • Most charters contain specific clauses but usually, if the port is under quarantine at the time of a charterer's orders then time spent/lost will count as laytime/demurrage. However, if the port is only subsequently declared under quarantine, then it is more likely that the owner will be liable.
 
  • If the Hague/Hague Visby Rules apply, then deterioration or late delivery as a result of interference by a government or state may be excluded by the "restraint of princes" or "quarantine restriction".
Laytime and Demurrage
  • Quarantine and free pratique clauses should be closely examined to determine the effect they would have on commencement of laytime and the validity of NOR.
Deviation
  • An owner is entitled to deviate for the safety of the crew or to avoid confiscation but the cost and time of doing so will be at the owner's expense as freight will not increase. If the Hague/ Hague Visby Rules apply there may be a defence of "reasonable deviation".

Ebola Clause- Contingency planning

  • To cover the specific risks and liabilities associated with Ebola and to avoid much of the ambiguity highlighted above, we have seen parties insert custom Ebola Clauses into prospective charterparties.
  • Generally an owner's main objective is, as with a war or piracy clause, to ensure that they can refuse to call at an infected or high risk port and request alternative instructions.  Depending on the split of liability, owners will want the clause to be drafted to apply even if the risks are low, whereas charterers will prefer that it be applied narrowly to minimise the effect on trading.
  • Helpful clauses will, to the extent that it is possible, set out the level of risk or exposure required for the clause to engage and determine the allocation of any extra time, demurrage, costs, fines, and hire/freight, cleaning, fumigation and medical treatment in a given scenario, largely dependent on whose orders the vessel was following when she visited the infected port.
  • Parties should consider the consequences of any port calls to Ebola infected ports and/or consequential quarantine as a result of previous port calls before the commencement of the charter and indeed after it concludes.
  • It is also important to bear any cargo interests in mind and to incorporate the Ebola clause into the bills of lading, either by express agreement or with an indemnity against the consequences of agreeing to it.
  • When preparing such clauses it is important that parties clearly identify what they want it to achieve and take a pragmatic commercial approach to sharing the risks. For example, a clause based on BP VOY 4's Half Laytime/Half Demurrage/Force majeure clause may be considered to produce a fair result in appropriate cases.

Useful Links

http://www.imo.org/MediaCentre/HotTopics/ebola/Pages/default.aspx

http://www.ics-shipping.org/news/press-releases/view-article/2014/08/04/global-shipping-bodies-issue-ebola-virus-advice

www.ics-shipping.org/docs/default-source/Ebola-Resources-/ebola-port-actions

http://www.ukchamberofshipping.com/news/2014/10/08/ebola-information/

www.gov.uk/government/.../ebola-ports-shipping-guide.pdf

https://www.uscg.mil/msib/docs/012_14_8-7-2014.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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