Troubled waters?
The rising competition between Asia's ports ... and shipping law practices
As part of ALB's annual focus on shipping, Fiona Larsen discovers strong pressure on fees from in-house counsel and rising competition from local lawyers are posing a challenge to the international firms
The outsourcing equation
The shipping business is run on wafer thin margins and the market for legal services is awash with price comparisons. Traditionally, the ship owners and insurers keep the shipping lawyers in work. However, for some time now business has been tough in these quarters. With high overheads and sliding profits, in past years there haven't been strong enough margins to afford hefty legal fees. In the determination of outsourcing decisions necessity and the bottom line have become key factors.
"We'll only engage outside counsel where necessary. But at the same time, when you have urgent matters - such as a ship being arrested - you have to do something about it," says DJ Goh, in-house counsel for IMC Shipping in Singapore.
Although ship owners and insurers are ever conscious of costs, they are also keenly aware that in certain cases it is necessary, and in their best interest, to retain outside lawyers.
Anthony Day of Noble Group explains: "On the contentious side we deal with half our cases in-house. On the non-contentious side we used to deal with that amount, but now it's probably less. The deals on the financing side are getting bigger and more document heavy - we're talking about $100m deals at a time - we just don't have the capacity to handle these in-house and outsourcing is pretty affordable of late."
And so it seems to be the case in the market. Following on from lean years, legal fees are lingering at the lower end of the scale. There is a general feeling that it's a buyer's market and many speak of a willingness to discount or to accept financial caps. In Hong Kong, the hourly rate for a partner with 20 years' experience in shipping is less than a local firm might charge for a corporate partner with two years' experience.
Says Ince & Co's Simon Latham: "The shipping community does get value for money in comparative terms with the rest of the legal market."
Increasingly, they are insisting upon this. Likewise, those in-house counsels responsible for outsourcing insist upon another factor that weighs heavy in the outsourcing decision - established relationships.
Throughout Asia, personalities are well known and for many this is fundamental. Those responsible for the outsourcing decision overwhelmingly agree that they must know, or at least receive recommendations for, those with whom they are entrusting their business. The law firms are aware of this too.
Holman Fenwick & Willans' George Lamplough says: "Our best clients are the ones for whom we have always acted, and they are the top of our list. We have a lot of traditional relationships and to us they're the most important."
Peter Shelford of DLA Singapore agrees that as well as expertise and presence in the market, established relationships are crucial in the shipping game. "We strive to maintain relationships with people in the business and make sure our name comes across their desk on a frequent basis."
Increasingly, both local Singapore firms and Mainland Chinese firms are making these contacts and establishing relationships.
"On the whole, outsourcing decisions are based on personal relationships," says Day. "But if you've got someone instructing lawyers who's reasonably familiar with their market, and they with your business, then that's all you need - it doesn't really matter if they're from an international firm or a local one."
In certain cases, the international firms will always come out on top. Shipping being a global business, instructions can come from anywhere. In a case where a ship owner has never before had occasion to use shipping lawyers in Hong Kong or Singapore, dealing with a firm that has a long-established reputation can add some comfort to a decision.
Here the international firms retain their edge. Day adds: "Occasionally, when you want to get someone's attention, you go for a bigger name." And to find these big names you must go to either Hong Kong or Singapore.
Is the pendulum swinging Singapore's way?
In recent years, Hong Kong's long-established rival to the south - Singapore - has been gaining ground. With its growing prominence as a port and its proximity to a key global shipping lane, Singapore is becoming increasingly attractive. While it is business as usual at Singapore's ports, there are those that would contend Hong Kong has lost its international cutting edge. If Hong Kong's preeminence is waning, what are the implications of this for the city's shipping lawyers?
"I think Singapore is now being seen more as an international beacon. Whereas Hong Kong used to be seen that way, the moment that it came under China it's being seen more as an entry point to China. So while that's good for China - and maybe even still good for Hong Kong because China is such a huge market - it can give the impression that [Hong Kong] is no longer as international as it used to be," comments Jude Benny of JTJB in Singapore.
For others, the increased threat of Singapore as competition is primarily an issue of costs. Peter Flint of Watson Farley & Williams, Singapore, points out that whilst both locations have excellent legal infrastructure, and are well supplied with first-class international lawyers, Singapore benefits from a comparative price advantage, and increasingly this is what matters to clients. "Yes, the pendulum is certainly swinging Singapore's way. The reason is primarily one of costs," he says.
Throughout Singapore maritime firms seem acutely aware of the necessity of providing their clients with attractive fee structures. At least part of the driving force behind this focus is the restriction on international firms practising in Singapore's courts. This affords local firms a protected niche and means competition from up-and-coming local firms is on the rise.
Benny says: "I feel we have an advantage because we can do domestic work as well ... and we do have a price advantage because we charge in Singapore dollar rates, which makes us a lot more competitive."
However one Singapore-based shipper, who preferred not to be named, felt this was a major disincentive. The restriction means that those outsourcing may have to pay twice - once to the local firms and again to the international firms "who have the body of experience but aren't allowed to practice in the courts".
In fact DLA Singapore - which only opened its office in 2001 - has opted to charge more on a local basis. Shelford explains: "We did this to compete. As a green field site we had to start off with something different from the major international shipping firms."
DLA has also entered into an informal relationship with local firm J Koh & Co, which means where appropriate they will use the other. Incidentally, DLA Singapore employs nine Singapore-qualified lawyers who were required to surrender their practising certificates under the restriction.
Likewise, Thomas Cooper & Stibbard works closely with a number of Singapore firms. "We look at different areas of the same international marine market. We don't compete with them ... we only compete with our offshore brethren," states Paul Barfield.
However, no one seems to have informed JTJB of this. JTJB has been proactively promoting its services beyond Singapore's shores and establishing contacts with those that have the work. "We definitely see the foreign firms as a source of competition," counters Benny. "I think there are some strong local players here, and the fact that P & I Clubs come directly to us, rather than route their work through the international firms, is clearly an endorsement of the ability of local firms to service the client."
Undoubtedly, strong competition from within Singapore contributes to the centre's comparative cost advantage over Hong Kong. However, while in other areas it is still possible to differentiate between the two centres, on pure price competition it may yet prove inadequate.
In both centres the shipping lawyers cannot fully benefit without the support of the wider network of shipping services. A comparison of the presence of shipping support services in the two ports finds that most of the P & I Clubs do have representation in Singapore, but not to extend as they do in Hong Kong.
Latham disagrees that Hong Kong and Singapore compete for shipping work. "They would only compete if, for example, you could choose Singapore as a venue for arbitration or court proceedings versus Hong Kong or vice versa," he says.
However, Latham does point out differences between the limitations of liability regimes in the two centres. These have meant that in casualty cases it is quite common for one party to be seeking to establish Singapore as a relevant jurisdiction while others seek to resist it.
"This has resulted in a steady flow of work into Singapore for many years. There is talk that Singapore will amend the law and come closer in line with Hong Kong, which could result in a loss of business for Singapore," says Latham.
Consolidating Hong Kong's position, Lamplough says: "Hong Kong has the prime geographical location. It has extensive support services and these provide high-quality service, and in terms of that Hong Kong is second to none. The government has been very good in developing the Hong Kong shipping register. They have encouraged the use of Hong Kong as an international arbitration centre - admittedly, that's been with construction, not shipping. With our legal system we have great confidence in Hong Kong's future."
However, Peter Flint of Watson Farley & Williams in Singapore says: "The Singapore arbitration community has, with unparalleled support and encouragement from the Singapore government and judiciary, achieved significant success in establishing and consolidating its position as the principal arbitration centre in Asia. Inevitably, that's been achieved at the expense of the Hong Kong alternative."
However, in the final analysis, it is the opinion of those in control of the outsourcing decision that matters most.
"On balance, overall I'm not sure that there is much to choose between Hong Kong and Singapore as an international shipping centre - they each have distinct characteristics," says Day.
One threat perhaps is as in-house counsel become savvier in manipulating the outsourcing equation there are those that will begin arbitraging different offices of the same firm. "For non-contentious matters, not directly relating either to Hong Kong or Singapore, I have tended lately to use the Singapore office of international firms over Hong Kong as they have come out more competitive on price," says Day.
Areas of competition
Strike one up for Singapore then. But perhaps Singapore should be looking closer to home. A growing concern is a loss of business across the straits to Malaysia with the main area of competition - which has featured prominently in the trade press - being the development of the container terminal at Tan Jung Palapas, Malaysia.
Barfield says: "There is competition, but how far remains to be seen. Singapore gains in the legal forum from efficiency, certainty, and the quality of judiciary/legal fraternity. Malaysia may gain if Singapore moves to a '76 limitation regime."
Whether or not Singapore can effectively stave off competition from Malaysia remains to be seen, but in relation to the rivalry between Hong Kong and Singapore many feel they both have their own market to serve.
Holmans' Hong Kong-based Paul Hatzer says: "Hong Kong is getting business from this area and certainly from Japan and Taiwan. Singapore draws more from its own domestic market, Malaysia and Thailand. They're not mutually exclusive, but I do think they have different roles."
It would seem that the international shipping firms with offices in Hong Kong and Singapore all wish each other the best, and all the major players can be found in both centres - the only notable exception being Richards Butler.
On this matter Richards Butler's Andrew Brown comments: "We've always been able to service our clients in Singapore and South Asia satisfactorily from Hong Kong. And - given the restriction on practising local law, the fall-out from some of the Singapore joint ventures, and the very tight competition within the Singapore legal market - it hasn't prejudiced our legal practice."
The final analysis
This year has been encouraging for many ship owners in terms of profitability.
"For the container business - at least in the last 12 months - the volumes are up and the container ships are full. Shipping companies are making more money than they have in years," says Latham.
Andrew Brown agrees, "Shipping is generally at the moment very active across the board."
Although this will inevitably steer business on a course to the region's shipping lawyers, the manner in which the so-called 'pie' will be divided between them is, at best, uncertain. In-house counsel making the outsourcing decisions are now being presented with increased choice from local firms, and it is clear international firms now face meaningful and increasing competition.
Generally, it seems, lawyers will be retained where necessary and not as a luxury item.
Experienced shipping lawyers, with the right contacts and offering attractive fee structures, will be well placed to benefit. "As with all matters shipping, it's often not so much where you are but who you are and where you can be if needed," says Brown.
Ultimately, as the relative merits of Hong Kong and Singapore begin to level off, the only factor left on which to compete is price.
See ALB next month for a look at Shanghai's expanding role in Asia's shipping industry and an in-house view from Fiona Emmerson, senior associate, of the West of England P&I Club
FIRM PROFILE
INDIA
Salient features of Indian shipping regulation
Registration of ships in India
The law governing registration of ships in India is the Merchant Shipping Act, 1958 (MSA). It is mandatory that the vessel must be wholly owned by an Indian individual/corporate in order to fly the Indian flag.
Seagoing ships fitted with mechanical means can be registered under the MSA. An application must be made to the principal officer, MMD, at the intended port of registry from one of the designated ports of registry ie Mumbai, Calcutta, Madras, Cochin or Mormugao. The principal officers are required to maintain a complete record of ships on register indicating status of the ship on a particular date.
The applicant for registration is required to execute a declaration of ownership in the prescribed form referring to the ship as described in the certificate of the surveyor. In case of new-builts, a builder certificate of the ship containing the specifications of the vessel and the tonnage of the ship, as estimated by the builder, must be submitted to the MMD. In case of secondhand ships, the instrument of sale and the protocol of delivery and acceptance along with other relevant documents must be submitted to the MMD.
The owner of the ship is required to have the ship surveyed and tonnage ascertained in the prescribed manner. The ship is required to be permanently and conspicuously marked for which the registrar issues a carving and marking note pursuant to which carving and marking of the name of the ship - conspicuously on each side of her bows as well as permanent insertion of the name of the intended port of registry on her stern - must be carried out.
Upon compliance of the aforesaid requirements, the registrar of ships would make entry of the ownership of the ship in the ship register.
On completion of registry the registrar of ships will grant a certificate of registry in respect the ship master.
Provisional registration
In the case of a ship built or acquired outside India by a person qualified to own an Indian ship, then the owner or the master of the ship would have to apply to the Indian Consular officer at the port where the ship is located (or at the nearest port) for the issue of a provisional certificate of Indian registry for the ship. The officer, on production of satisfactory proof of ownership, would grant the provisional registration certificate to the owner or the master. Such a certificate has all the force of a certificate of registry.
The provisional registration of a ship can be done on the same day as delivery is taken at any foreign port, by presenting the protocol of delivery and acceptance and bill of sale.
This provisional certificate is valid for six months or until the arrival of the ship at an Indian port to the concerned registrar, whichever is earlier. The final registration of the ship at a port of registry in India must be affected during the period of validity of the provisional certificate.
Ship mortgages
The law governing ship mortgages in India are the Companies Act, 1956 (CA) and the Merchant Shipping Act, 1958 (MSA). Section 125 of the CA requires charges upon a vessel to be registered with the Registrar of Companies (ROC) and the MSA requires the mortgage to be registered in the Register of Ships maintained by the Mercantile Marine Department (MMD) in order to perfect a valid statutory registered mortgage.
No prior approval is required for mortgaging a ship to a foreign lender but if security is also sought on immovable property or a guarantee of the borrowing shipowning company, prior Reserve Bank of India (RBI) approval is necessary. For acquisition of a ship, the Indian party is required to give intimation to the director-general of shipping under the Ministry of Shipping.
Mortgage can be created on a vessel owned by an Indian company on provisional registration of a vessel. The registrar will issue a letter to the bank/financial institution stating that once mortgage is entered on provisional registration, it will continue to remain in force even after the said vessel has been granted permanent registration.
On the basis of such provisional registration of an Indian vessel, a charge is created upon the vessel by filing executed forms 8 & 13 at the ROC. Simultaneously, the statutory format in form 11 prescribed under the MSA is registered with the MMD.
Rights of a mortgagee
Section 51 of the MSA empowers sole mortgagees to foreclose and sell the mortgaged ship without approaching the High Court. Therefore, as per this section, a sole registered mortgagee can sell the vessel without filing a suit at the relevant High Court.
However, mortgagees usually prefer to 'filter' the sale so that the vessel is purchased free of all other encumbrances and maritime liens by removing claims of bunker supplier's etc, by settling their claims. Under these circumstances, the mortgagee files a substantive suit in the High Court and obtains an Order of Arrest against the vessel. The Order of Arrest is normally granted by the admiralty judge as a matter of course. Immediately upon the mortgage admiralty suit being filed, an application for arrest is made and within less than 36 hours of receipt of instructions from the mortgages, with complete documentation, the vessel could be arrested.
A vessel under arrest can be sold any time after service of the Writ of Summons upon the owner of the vessel. The service of Warrant of Arrest is equivalent to service of the Writ of Summons for time to commence for defendants to file Written Statement. Normally, courts are reluctant to pass an order of sale before the expiry of 12 weeks from service of the summons unless good cause and reasons are set out that delay will only result in deterioration of the vessel and expenses by way of standing charges will mount detrimental to the creditors.
The vessel is usually sold by public auction after standard terms and conditions are settled by the sheriff and advertisements are published inviting global tenders. One of the basic terms is an earnest deposit of US$20,000, to be eligible to bid and deposit of entire sale proceeds by the highest bidder before confirmation of sale by Court.
If there are other claimants, a date is fixed for hearing and settling priority of their claims, before sale proceeds are distributed. Remittance of sale proceeds to the mortgagee may be delayed on application by other creditors who may challenge the validity of the mortgage and claim priority. Upon confirmation of sale, the auction purchaser acquires title free of all encumbrances.
Enquiry for prior charges will have to be done at the ROC and MMD. In each of the 26 states of India a registry of ROC is maintained and the company - having its registered office in that state - must maintain its records including the charges in the ROC in that state. However, the offices of the MMD is situated at only major ports such as Bombay, Calcutta, Madras, Cochin and Marmagoa etc.
Under the MSA, a mortgage can only be created by the owner of an Indian vessel in the prescribed form 11 under the MSA. A deed of covenant supplementary to the deed of mortgage is also executed between the parties, ie the lender and the borrower, specifying inter alia the obligations and liabilities of the mortgagor and the rights of the mortgagee. Additionally, the insurance policies over the vessel are assigned to the lender through the execution of a separate document, ie the deed of assignment of insurance. Earnings of the ship may also be assigned through the execution of a deed of assignment of earnings. Priority of mortgages is determined on the basis of the order in which the mortgages appear in the register of ships maintained by the MMD.
Entry registering mortgage with the registrar of the ships of the port of registry is deemed to be notice to the whole world of the mortgage. However, for abundant caution a public notice may be given in local newspaper and Lloyd's List.
Acquisition of ships
Under the liberalised guidelines by the government of India, a shipping company can now be wholly owned by a foreign entity. Such Indian company enjoys all the privileges granted to any Indian company. This Indian company can acquire a ship by raising finance from its parent company or any lending institution.
As per recent amendments, no prior approval is required from the director-general of shipping for acquiring a new ship, though an intimation is required to be made regarding such acquisition.
Acquisition by a foreign currency loan
An Indian company can raise a foreign currency loan, ie an external commercial borrowing (ECB) in accordance with the provisions of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 (FEMA).
Under FEMA, the Ministry of Finance (MoF) has permitted the raising of ECBs up to specified limits under the automatic approval route of the RBI. Prior approval of the MoF is not required. The Indian company must make necessary draw-downs, subject to procedure set out in the FEMA guidelines, under the automatic route without any further permission from RBI. The Indian company will have to effect repayments as per the repayment schedule filed with the RBI.
In the event that an Indian company desires to raise ECB over the prescribed limit, it will require the prior approval of the MoF. In this approval the MOF specifies the loan amount approved, rate of interest and various types of payments that may be made to the foreign lender in foreign currency, eg interest, commitment fee, out-of-pocket expenses, etc. The approval also specifies repayment terms, such as number and duration of installments for repayment of the loan and the amounts repayable during each installment.
On obtaining the approval of MoF, the Indian company will have to approach the RBI for effecting the drawdown. Thereafter the loan may be drawn down after final clearance from RBI.
Under FEMA, a borrower is free to create a form of security as considered suitable by him. There is no pre-requisite under Indian law for the creation of a mortgage over an Indian ship in favour of a foreign lender, so long as prior MoF and RBI (as the case may be) approval has been taken for the purposes of the borrowings as per the requirements of FEMA Regulations.
However, in the event that an Indian company is providing a guarantee for the repayment of money borrowed by another Indian company in favour of a foreign lender then prior RBI permission will be required for giving the guarantee under the Foreign Exchange (Guarantees) Regulations 2000.
Under Indian law, there is no prohibition for mortgagees to purchase the vessel itself and operate it under a non-Indian flag. Such a change would have to be effected in the Indian register, whereupon a deletion certificate will be issued. No approval of the government of India is required for change of such registration. The only regulatory requirements are that a notice must be issued to the DG of Shipping and a certificate obtained from the Seafarers Union that all wages of the officers and crew who have served on the vessel have been paid.
New Zealand
Maritime industry investments and legislative changes
New Zealand - composed of two major islands and many smaller ones - is a challenge for shipping and maritime lawyers. The central business district of Auckland (the hub for many New Zealand law firms) overlooks one of the country's main ports. And just 500m down the road lies the American Express Viaduct Harbour, the heart of the glamorous superyacht industry. The New Zealand maritime and shipping industry has seen steady growth in recent years, leading to a number of novel opportunities for law firms.
New Zealand's achievements in sailing, including the America's Cup, have led to an increased global awareness of our boat building technology and expertise, and in particular custom-built luxury superyachts. Exports for the year ending March 2002 totalled NZ$365m, to markets such as North America, Europe, Australia and South-East Asia. As a result, opportunities have opened up for law firms to become involved in sale and purchase transactions, the day-to-day running of ship building companies, intellectual property issues relating to boat design, and ship finance.
The commercial shipping industry has also enjoyed success. Several ports have been forced to upgrade to meet the demand on their facilities.
Prime Port Timaru, a central South Island port, has recently completed a NZ$23m upgrade of its facilities. Included in the upgrade are increased storage capabilities, a deepening of the entrance channel and the commissioning of two brand new mobile harbour cranes. Prime Port Timaru is the first port company in the world to purchase and install two of these state-of-the-art machines into its cargo handling fleet. As a result, Tasman Orient Line (TOL - a specialist breakbulk and container carrier) and Maersk Sealand (the world's largest container line) has chosen Timaru as its primary South Island port. Port Nelson has also released draft plans to extend its main wharf.
The extension will provide two full 250m international ship berths. These upgrades are in direct response to increasing volumes of trade in the South Island, being driven by a positive regional economy and export growth.
Lyttleton Port Company has also benefited from the growth, entering into a 15-year coal handling agreement with Solid Energy New Zealand Limited, for the export of coal from Solid Energy's West Coast mines through the port of Lyttleton. This agreement also involves significant development at the port to handle the increased volumes of coal. Solid Energy expects to grow its coal exports from current volumes of 1.8m tonnes to 4m tonnes per annum.
With New Zealand's increased exposure to the maritime industry has come increased commercial know-how. A prime example of this is a 50/50 joint venture formed between Ports of Auckland Limited and Northport Limited to provide piloting, tug and line services for commercial shipping on the Whangarei Harbour. The new joint venture will service the three ports on the Whangarei Harbour - Northport, the oil refinery port at Marsden Point and Port Whangarei on the inner harbour. Vessel calls on the Whangarei Harbour are expected to climb over the next five years.
There has also been global recognition of the maritime growth in New Zealand. International breakbulk and container carrier TOL has recently expanded its services between Asia and New Zealand. TOL has replaced two of its 16 current ships in the east Asia service with faster and newer vessels, and an additional ship has been introduced to the southeast Asia service.
There have, however, been some drawbacks to New Zealand's recognition in the international arena. The far-reaching effects of the September 11 attack stretched quickly to the New Zealand shipping industry. We have enhanced security measures to prevent terrorist attacks at our ports.
A new Maritime Security Bill is due to be introduced into parliament in August 2003 that may have wide-ranging effects for the shipping industry. The purpose of the Bill is to increase shipping and port security and to ensure New Zealand's population, and the trade and tourism sector, are safe from terrorist attacks. This will result in compliance costs to ports and shipping companies, however it will also ensure New Zealand is meeting the expectations of its global trade partners.
The Bill will also confirm New Zealand is meeting its global security obligations. The Bill is based on a move by the International Maritime Organisation (IMO) to amend the International Convention for the Safety of Life at Sea, 1974 (SOLAS) to "include special measures to enhance maritime security".
The Bill will cover SOLAS requirements such as setting security levels for ships and port facilities, and setting requirements for preventative measures against security incidents. It will also require certain security related information to be provided, and the development of ship and port security assessments and plans.
Another downside to New Zealand's shipping success is the threat to the very same features that make New Zealand ideal for shipping. The nation was placed on alert in two recent incidents that highlighted the potential dangers of pollution to New Zealand's pristine waters. At the same time, New Zealand law firms woke up to the potential liability of port companies, masters and pilots in situations such as these.
7 February 2002 saw the grounding of the log carrier Jody F Millennium off the coast of Gisborne. The Maritime Safety Authority released its report into the incident in April. The grounding was found to have been principally caused by sea and swell conditions, however the MSA's report resulted in recommendations being made to all parties involved.
The report has criticised Port Gisborne for failing to meet its responsibility to establish and maintain advertised depths for the port. The report also censured Port Gisborne's failure to provide a structured system of relief pilots. While this was not identified as contributing to the casualty, it is not difficult to envisage a situation where the exigencies of the job could lead to stress, fatigue or burn out.
The pilot himself was censured in respect of the dereliction of his duty as a pilot arising from his early disembarkation of the vessel, and the master was similarly censured for his failure to adequately discharge his duties of command.
Despite its criticism the MSA decided not to prosecute. However, the MSA has invoiced the insurer of the ship for its costs in containing the oil spill, which amounted to NZ$2.6m. And the MSA's decision not to prosecute was not a bar to civil proceedings being brought. The Jody F Millennium's owners have brought a civil suit against Port Gisborne.
Despite the lessons learned from the Jody F, on Tuesday 8 October 2002 the bulk carrier Tai Ping grounded in Bluff Harbour. Again, natural causes - in this case particularly thick fog -were identified as the primary causes of the grounding, but both the port company and the pilot were identified as having contributed to the incident.
Safety issues identified included the adequacy of pilot training, including simulation, the adequacy and interpretation of weather forecasts for port areas, the adequacy of bridge resource managements, the adequacy of resource management within the port service personnel and the adequacy of operational procedures in the port. In particular, the report focused on the pilot's inability to navigate without visual aid.
South Port is now being prosecuted by the MSA over the Tai Ping incident. It also faces the possibility of a claim for around NZ$10m restitution from the ship's Oslo insurers.
As a consequence of these near-disasters, rules controlling the piloting and safety of ships in New Zealand's harbours are to be reviewed by the MSA, as is the management of New Zealand Ports. The review will look at navigational training for pilots, port management and which authority harbour masters should be responsible to - at present they are employed by regional councils.
Recent tragic events have also led to an overhaul of national search and rescue procedures. The New Zealand Search and Rescue Council recently commissioned an independent review of the search and rescue response to a fatal boating accident in May 2003.
This review not only found deficiencies in the response to this particular incident, but also made a number of recommendations for immediate remedial action to address gaps or inconsistencies in current arrangements as well as for a long-term institutional review of the National Search and Rescue Plan.
The recommendations focused on improving communication processes between agencies. Those particularly relevant to maritime emergencies included giving crystal-clear advice on survivors in water and immediately alerting the marine duty officer where distress beacons were activated from sea. The New Zealand Search and Rescue Council and the transport minister have accepted all the recommendations.
New Zealand has seen great growth in the Maritime Industry, but there has similarly been a steep learning curve for the ports, shipping companies and industry employees involved. All of this has contributed to a slowly maturing industry, with work for maritime lawyers.