Adverse consequences can be
minimised if properly managed
THERE IS a benefit for all - except the eventual guilty party - in SA's rather uncommon ship arrest laws, according to Andrew Pike of Shepstone & Wylie's international transport and trade department.
This country is one of very few in the world where you don't need to arrest the guilty vessel - but can nail one of her owner's sister ships when she calls.
We have one of the only jurisdictions around the globe where you can pierce the corporate veil, said Pike, and arrest associated vessels in the fleet.
Often it's a serious task sifting through all the disparate front companies and ports of registry related to the vessel ownership. But, once the owner is identified, we can arrest any commonly-owned vessel.
Pike points out that if it were not for the SA ship arrest laws foreign litigants would not have their claims satisfied much of the time. This, he added, would push up insurance premiums, interfere with cash flow of businesses, and might even result in numerous liquidations.
But what's the benefit for SA in ship arrest - often where the impounded vessel is a leaking old tub, and potential pollution threat?
The significant role ship arrests play in the economy of the shipping community is often overlooked, according to Pike.
Any adverse consequences of ship arrests can be minimised if properly managed, he told FTW, and the upside is that there are many beneficiaries of SA ship arrest laws.
When ships are arrested, a large majority are delayed in South Africa for a longer period than they would otherwise have planned. This results in the port authorities earning increased revenue in terms of the port and berth dues, use of tugs, pilot boats, helicopters and so forth.
He says that ship chandlers, agents, security firms, transport companies and bunker suppliers all stand to benefit from ships detained in port due to arrest.
Pike adds that the chain continues with sheriffs benefiting from serving documents on the vessel. The longer the ships are in port the greater the prospects of ship repairs and often ship surveyors are required to inspect damaged cargo, engines or hulls.
Banks are often required to establish bank guarantees to release ships which generates fees while ship brokers derive significant revenues from judicial sales.
Regarding certain ship owners' reluctance to call at South African ports, Pike comments that major shipping lines have no difficulty at all with South African arrest laws as their operations are run soundly and they have proper insurance cover.
Personally, I would rather not see the 'rust buckets' calling in South Africa, because it is they that would be most affected by ship arrest laws.
It is also these ships who most often founder and pollute our shores.
He acknowledges however that congestion in port is a major problem. There is concern for those innocent ships which are waiting to load or discharge and get delayed because of insufficient available working berths.
Pike argues that, on balance, the negatives are offset by the increase in port revenues and the benefits to the entire shipping industry as well as to the larger economic community.
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