Monday, 12 December 2011

Just supposing.........

I’ve been watching with increasing concern as those responsible for the Rena disaster seem to be successfully dodging all the bullets. Furthermore they have amassed an enviable arsenal of their own which they have turned upon those already hurt by their negligence.

Costamare Inc and Daina Shipping have been able to limit their liability to an outrageous extent, due in part to the carelessness of our Government. I say carelessness, but this is a rather generous view for me to take as the more likely scenario is that if we were to probe the issue deeply we would find some kind of concession for some kind of politician ‘coincidentally’ occurred after we agreed to the ridiculous piece of legislation that allows liability for such ‘accidents’ to be limited

Of course there is far more than money at stake in cases such as this. Damage to the environment and the wildlife that live in it are beyond mere dollars. Once animals are dead, money can’t replace them and once an environment is polluted by oil the consequences can last for decades.

So no sooner had our environment been assaulted by what will undoubtedly be found to have been a grossly careless act than we felt the cold steel up us as we learned the ship’s owners would have their liability for damages limited to $12.1M, and WE the people who played absolutely no part whatsoever in the grounding of this ship would have to pay the rest. Now to most of us $12.1M sounds like a lot of money, but to put it into perspective consider these reports:

·         As at 17 October 2011  (just 12 days after the grounding) the costs of the clean-up had reached $4M (NZ Herald)

·         By 27 October the costs of the clean-up had risen to $10M (ODT)

·         As of December 7, then Transport minister Steven Joyce said the cost had risen to $19.5M (NZ Herald)

So as of a week ago the costs had already exceeded the owners’ liability limits by more than 50 percent and we already had to fork out $7.5M of our own money to fund the clean-up which won’t be over for many months yet.

Of course additionally a lot of businesses lost a fortune in revenue over this matter, too. Tourist operations, fishermen, and water sports enthusiasts have all suffered a great deal since Captain Pugwash crashed his tub onto Astrolabe Reef. Some have suffered fatal financial losses and have basically no comeback apart from a few empty promises made a couple of months ago by Ministers keen to get re-elected. Good luck there.

But the latest kick in the guts that delivered to New Zealanders over this sorry saga has been the ransom demands made by the salvors to those unfortunate enough to have cargo onboard. At first they sent out demands to every person with goods on the ship, including private individuals whose cargo was made up entirely of personal effects. Then following a bit of shouting from their customers they made a small tactical withdrawal. They claimed the letters had been sent to individuals in error and should only have been sent to those with commercial cargo on board. It sounds like classic ‘softening up’ tactics to me.

But in any event I can’t see a huge amount of difference here. Both private individuals and businesses have already paid for their goods to be delivered to them. So why should they have to pay for the cost of salvage? Effectively Svitzer is trying to extract payment from the owners of the goods rather than the owners of the ship.

Now some might say this is a non-issue and as most people have insurance they can leave it to their insurance company to sort out. But we all know what happens following a load of insurance claims; premiums go up so the insurance company can recoup its payout. But what on earth could anyone do about it? These massive corporations are too big for a fight by a little man and it would seem the insurance companies can’t be bothered arguing about it. Why would they when they can simply increase their premiums and carry on as normal? Let’s not forget who it was that crashed this tub. Costamare and the rest should be relying on THEIR insurance company for cover.

But what if.....what if somebody found a way to challenge these modern day pirates and mounted a test case against them? It would be expensive and the only way it could ever happen would be through the philanthropy of somebody who cares enough about justice and hates highway robbers.

I don’t know if there is someone or a group of people who would love to give these guys a fright – probably not, but it would be great. I have a theory that is untried, but just might be the path towards how one could unravel this mess.

Consider this; the shipping company entered into a contract with their customers to ship their goods to them. The contract wasn’t to sail them all the way to Tauranga Harbour and then leave them out on a reef. It was to deliver them to the port and then forward them via land based carriers to their destination. 

Failure to do this is surely a breach of contract? The usual effect of a breach of contract is to bring that contract to an end. When this happens the defaulting party is usually expected to pay some kind of compensation to the person whose goods they have failed to deliver. Normally this would involve replacement of the goods concerned and/or a full or partial refund of the freight costs.

So my contention is that the shipping company would have no right to recover the costs of salvage from the shippers because that is simply an incidental cost they have incurred through their own negligence. Negligence that furthermore could be said to go beyond the bounds of a simple accident given the criminal charges filed against the owners and the crew.

It might be a lengthy bow I’ve drawn, and I am sure that even if I’m right there is probably nobody with the funds or determination to take these guys on. But just supposing someone did; wouldn’t it be fantastic for the common man?

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