Jarius Bondoc: Filipino ships uninsured for wrecks, spills, delays

Filipino ships uninsured for wrecks, spills, delays
GOTCHA - Jarius Bondoc November 5, 2018 - https://www.philstar.com/opinion/2018/11/05/1865901/filipino-ships-unins...

Imagine a ship sinking at the entrance of Manila’s North Harbor and the owner cannot afford to refloat it – as is likely. There’d be a crisis like the Xiamen Airline runway jam that crippled Manila International Airport for days last Aug. Billions of pesos in goods would spoil or be delayed, and thousands of passengers stranded.

In fact, m/v Princess of the Stars still lies on its side in the waters off Romblon ten years after it capsized in typhoon. Sulpicio Lines abandoned it, declaring bankruptcy and eluding recompense for 814 dead and missing, and 56 injured. The damage to fishing grounds also has been unremunerated. Sea pollution goes on. And government is doing nothing to refloat the vessel for disposal, which costs millions.

The reason is that Filipino ships are uninsured.

t’s ironic. All land vehicles, public or private, are required to have third-party liability coverage, or else be barred registration and road use. Cars, taxis, jeepneys, buses, trucks have TPLs. So do airplanes to be allowed to fly. But not ships that carry many times more passengers and cargo. The 23,800-ton Princess of the Stars could load 1,992 persons.

Philippine vessels are prone to wrecks and accidents. They’re mostly old hand-me-downs from China, Korea, and Japan; and unfit for high Philippine waves unlike where they came from. Engines and designs have been modified with no thought for safety. Maintenance is slipshod. With weights of over 1,000 tons and loaded with cargo, the floating masses of steel are potential causes of disaster.

Piers often are damaged by ships. The Philippine Ports Authority pays the repair costs – if it can get the budget at all. Such expenses take scarce funds away from construction of new piers.

Lives are lost in sea collisions. Shipping lines usually escape indemnity costs by feigning bankruptcy and prolonging lawsuits.

Sunken vessels usually are written off as full losses. The cost of refloating is prohibitive, unlike in towing a stalled land vehicle or repairing a plane’s faulty part. The wrecks pose underwater hazards, passage clogs, and pollutants.

Spills are frequent. Cargo vessels carry 50-100 tons of diesel fuel that poison the sea when discharged in collisions and sinking. Even if authorities are able to contain the pollution – which is iffy – the restoration of marine life can take decades.

P&I – property and indemnity insurance – can cover the costs. The normal cost of coverage for up to $35 million is only $30,000, or P1.5 million a year. Such property and indemnity claims can go a long way to repairing damaged wharfs, removing wrecks, and containing spills. The Maritime Industry Authority must compel ship owners to buy such P&Is.

As far back as 2009 there was an attempt to impose insurance. A memo was ready for signing, specifying $3-million coverage for vessels below 1,500 tons, and $5 million for those heavier. Cost would have been only $10,000, or P500,000.

But ship owners lobbied for the transport department to shelve the memorandum order. They knew they wouldn’t have passed the normal insurance rules. Their vessels were in disrepair, and there was no coherent classification system precisely because of the inappropriate vessels and haphazard modifications.

Ships have remained unsafe since. Thousands of lives have been lost, public and private property damaged, and precious seas dirtied.