The Tasman Spirit Saga Remembered

Introduction

The MV Tasman Spirit, a 1979 vintage, Japanese-built, Malta-registered and Greek-owned crude oil tanker, chartered by the Pakistan National Shipping Corporation (PNSC) on behalf of the National Oil refinery at Korangi, got grounded at precisely 1257 on 27 July 2003 while rounding the bend of the Karachi port outer channel to proceed to it’s assigned berth. This grounding sparked off an unfortunate sequence of events, whose impact continues to resonate way beyond our shores. It also gave rise to unbridled speculation as to the actual cause of grounding, the effectiveness of the clean-up efforts and the level of compensation expected to be forthcoming. This article is an attempt to sift fact from fiction.

The vessel, though decrepit and single-hulled, was still classified as seaworthy. It was under the guidance of an experienced pilot. Admitted that the weather was rough, the ebb tide severe, but then again so many other similar deep draught vessels have successfully negotiated the Karachi harbour channel under nearly similar conditions. What went wrong this time around?

The Bare Facts

First, the facts of the case. The MV Tasman Spirit, laden with 67, 535 metric tons of Iranian light crude oil from Kharg Island, arrived at the Karachi outer anchorage at 1300 on 26 July 2003. A KPT pilot boarded the vessel at 1047 the next day, though the ship’s entry was delayed till 1219 owing to the non-availability of tugs. Precisely 38 minutes later, while negotiating the bend to get to the inner channel, the ship’s bottom touched the ground between buoys S6 and S7, with the latter buoy about 100 metres away on the starboard bow. It’s crude oil cargo started seeping from the resulting crack on the starboard side. An attempt was immediately made with the help of 3 tugs to refloat the vessel without much success. After two further attempts, using 5 tugs this time, around the time of the next two successive high waters, the operation was finally abandoned for good.

At the request of the owner, another Greek-flag motor tanker Endeavour II belonging to the same parent company, was directed to proceed to Karachi for assistance. An agreement was also concluded thereafter with Ms Tsavliris Russ on 30 July for undertaking salvage operations. When MT Endeavour II arrived at Karachi on 31 July, it was found to be unsuitable for directly off-loading the oil from the stricken tanker owing to it’s size (being much larger than the Tasman Spirit itself). A small motor tanker chartered by the salvors, Fair Jolly of 8061 deadweight tonnage, arrived Karachi harbour on 5 August and was immediately employed in lighterage operation, transferring almost 28000 metric tons of oil from Tasman Spirit to Endeavour II which was berthed in harbour. Despite the Tasman Spirit literally breaking into two on the night of 13/14 August, the Fair Jolly kept doing a fine job till 23 August, when it fractured it’s hull during a particularly nasty spell of weather. On being rendered unseaworthy, a replacement was called for, and the Romanian – flag motor tanker Sea Angel (6376 DWT) arrived at Karachi on 28 August. The Sea Angel got into action the same day and assisted by smaller local tankers / oil barges like PNS GWADAR, FILLGO – IV, TAELI and AL-WAQAS, managed to off-load another 9000 metric tons of oil till 9 September, after which no further progress was thought possible because of the increasingly precipitous conditions.

Environmental Impact

This was admittedly the single greatest maritime environmental disaster to have struck our coast. From a trickle when the vessel grounded to virtually a flood when it was on the verge of breaking into two, nearly 30,000 metric tons of oil found its way unimpeded to the Clifton coast and even into the Keamari groyne backwaters as well as the harbour itself. Let alone the sea, even the air got polluted due to evaporation, particularly after the major spillage on 13 August, directly impacting the residents of Shireen Jinnah Colony, DHA, Seaview and Clifton as well as the picnickers and the vendors. Adverse effects were also noticeable in the phytoplankton and zooplankton biomass, with around 600 kgs of dead fish discovered on Clifton beach on 14 August, an unseemly independence day gift. Apart from mangrove forests, which are natural fish hatcheries, their seedlings and propagules were also extensively damaged.

Factors in Play

So, reverting to the query posed earlier, who exactly was responsible for all this? In deference to the extensive litigation in progress by numerous concerned parties before the Sindh High Court, I will endeavour to restrict myself to the well-established facts and the obvious conclusions springing therefrom. The major factors in play need to be analysed to see how and to what extent they could have and did affect the ultimate outcome.

The first factor was the weather. Wind of about Force 7, occasionally gusting to around 35 kts, was from the South East instead of the usual South West, with a 2 to 3 metre swell from the South West. The effect of the South-easterly gusting wind was to turn the vessel’s bow towards the starboard. Moreover, by the time the vessel reached the bend in the channel, a strong ebb tide had set in, which, coupled with the South – Westerly swell, would tend to drive the vessel south of the track. Then there is the well-known hydrodynamic phenomenon called the ‘Squat Effect’ which causes a vessel moving quickly through shallow water to ‘squat’ lower in the water than would normally be expected. The conditions prevailing were known and an experienced pilot / master would not have faced much problem adjusting to them.

Pakistan National Shipping Corporation has also come in for a bit of flak for chartering a tanker that, apart from being unseaworthy, was also single-hulled. PNSCs counter-argument is that it had been induced to enter into the charter by virtue of the owner’s misrepresentation. Class NK, the Classification Society with which the Tasman Spirit was entered, has however confirmed that the vessel was very much in class by the time the charter was concluded. It still appears that the ship’s main engine wasn’t exactly in prime condition and its response seemed to be sluggish. The fact remains that sufficient power was available, if used judiciously, to keep the vessel from harm’s way. As far as the single hull issue is concerned, it wasn’t outlawed at the time and let’s face it, such a vessel was cheaper to charter, on paper at least. Few of us are foresighted enough to think about likely consequences. Moreover, the single hull aspect didn’t really contribute to the grounding as such, but to it’s aftermath.

An enigma which still persists pertains to the entering sequence of ships. It is indeed a mystery as to why, out of the six ships planned for entry at that particular high water time, the one with the deepest draught, namely the Tasman Spirit, was the last one in. Resultantly, at the time the Tasman Spirit was rounding the bend to get to the inner channel and just prior to being grounded, not only was the ebb tide flowing southeasterly at it’s strongest, the under keel clearance of the vessel was also comparatively lesser. There are two possible reasons for the pilot’s decision to press on with the entry rather than agitate for a postponement: one, that the Pilot felt sufficiently confident or two, that some sort of external pressure was at work. I’ll leave it at that.

Under such volatile conditions, ship handling aspects gained added significance. In order to keep the ship on track and prevent her bow from seeking the wind ie turning to starboard, a constant port helm of 10 to 20 degrees had to be applied. Drastic situations demand drastic measures. Evidence seems to suggest that the wheel and engine orders used by the pilot prior to and during the turn through the bend in the channel were anything but bold. So instead of the ship effectively countering the elements, the elements took charge of the ship and pushed it bodily to the starboard edge of the channel where the depth was less than what was needed. The pilot was experienced enough to know better. The only possible logical explanation could be that he was not fully certain about the timely availability of tugs and thus vacillated, as entering harbour without such assurance was like wading into shark-infested waters without a repellent. What compounded the problem was that the bottom where the ship grounded on the eastern edge of the channel, consisted of a hardened shoal patch, which not only ruptured the vessel’s cargo tank but also made subsequent refloating efforts unsustainable.

Local Efforts

At the time of the spill, what was strikingly noticeable was that no agency stepped forward to assume the lead role in spearheading the much-needed containment effort. Absence of a viable doctrine and operational plan as well as lack of expertise and resources came in the way of an appropriate response. In a bid to be seen doing something, workers of KPT, City Govt and DHA could be seen manually cleaning up the beach without any joint coordination.

Later, working under the guidance of experts from ITOPF (International Tanker Owner Pollution Federation Ltd) and OSRL (Oil Spill Response Ltd UK) and with salvage equipment sent in by the Salvors, KPT tentatively commenced containment, skimming and dispersement operations.

Foreign-Sponsored Efforts

Soon after the grounding, the vessel’s owner got in touch with the insurers, the American P&I Club, which assigned a local representative to pursue the case. A local marine survey company, M/S United Marine Surveyors Ltd was contracted for assessing and cataloguing the events as they continued to unfold. The P&I Club also contacted the International Tanker Owners Pollution Federation Ltd (ITOPF), a non-profit organisation funded primarily by P&I insurers on behalf of their shipowner members, and whose priority service is response to ship-source spills of oil. ITOPF in turn engaged the Southampton-based M/S OSRL (Oil Spill Response Ltd UK) and the Singapore-based M/S EARL (East Asia Response Ltd) to combat the ensuing pollution.

The owners engaged M/S Tsavliris Russ as salvor on 30 July 2003, three days after the incident. A salvage team was thereafter mobilized and a tug Umkaand was chartered from Fujairah to speed to the site with essential salvage equipment like oil containment booms, dispersant and dispersant-spraying equipment on board. This tug reached Karachi late at night on 03 August, while another one, the Tsavliris- operated salvage tug SB 408, despatched from Colombo, arrived two days later. Specialized salvage equipment, including all the essential pumping, preservation and anti-pollution gear from Rotterdam and the Tsavliris warehouse in Athens also arrived via a chartered cargo plane. The two motor tankers, Fair Jolly and Sea Angel, sent by the salvors managed to relieve the stricken Tasman Spirit of around 34,000 metric tonnes of oil which was then duly transferred to the larger motor tanker Endeavour II sent by the owner. The removal operation of the wreckage of the hapless Taman Spirit had to be put off till January 2004 primarily due to the legal stand-off between KPT and the P & I Club. The release of the four salvage vessels – the Tsavliris-operated salvage tug SB 408, two lightering vessels Fair Jolly and Sea Angel and the chartered tug Umkaand – on 26 December paved the way for the salvage operation by Smit salvage to commence. The deal had also ostensibly been sweetened by a 1.6 M dollar payment by the P & I Club to the KPT, ostensibly as compensation for the clean-up efforts that it had undertaken. This salvage operation was a massive one involving 137 personnel, 3 tugs, one submersible barge and two shear-leg cranes of 1000 tonnes capacity each.

Actions and Reactions

The spate of charges and counter-charges, actions and counter-actions, claims and counter-claims that were made in the wake of the incident resembled a merry-go-round. In contrast to the low-key approach pursued by the KPT during the clean-up and salvage phase, it swung into action immediately thereafter, by detaining or confiscating anyone or anything it could lay its hands on. Apart from preventing the three oil tankers (Endeavour II, Fair Jolly & Sea Angel) and the two salvage tugs (Umkaand, SB – 408) from leaving the port, KPT detained the crew of the ill-fated Tasman Spirit, which included Capt Narystinos Demetrios, Chief Officer Metnetis Georgios, three Greek ratings and two Filipinos. The detention of the Salvage Master Nikos Pappas, the man heading the tanker’s salvage operation, generated even greater surprise, considering that he had replaced the Dutch salvage expert Capt Jan Van der Laan (who had been hospitalized) as on-site salvage master nearly a month after the grounding. These detainees became collectively known as the ‘Karachi Eight’.

The international maritime community stood aghast at the shoddy treatment meted out to seafarers. Pakistani authorities presumably drew their inspiration from the ‘Prestige’ incident of the year before (Nov 2002) in which 20,000 tonnes of oil leaked into the sea as it sank off the coast of NW Spain. If the Spanish Authorities could arrest its Master, Capt Apostolos Mangouras, on criminal charges and prevent him from leaving the country despite grant of bail, surely we Pakistanis could do much better. In doing so, we incurred the hostility and derision of the world at large. What made matters worse was that statements emanating from senior government functionaries hinted at a billion dollar plus financial guarantee by the P & I Club in exchange for the release of the detainees. Leaked excerpts of the tightly – guarded official inquiry report tended to suggest that the blame had been placed squarely on the shoulders of the ship’s master. Why then was the rest of the ship’s crew and particularly the salvage master, who had only come to supervise the latter part of the salvage operation, being detained, people were wont to ask. Negotiations to secure their release on ‘humanitarian grounds’ kept stalling due to stubbornness on the part of one party and sheer incredulity on the part of the other.

The ‘Karachi Eight’ were finally cleared to leave Pakistan on 19 April 2004. This came about due to the unrelenting pressure exerted by the Greek Government, the EUs Council of Ministers, the EU Parliament, the EU Commissioner for External Affairs, the EU Human Rights Commission, Secy General International Maritime Organisation, the International Chamber of Shipping / International Shipping Federation, the International Transport Worker’s Federation, the International Salvage Union and even the US Secretary of State. The Union of Greek Shipowners had also issued a veiled warning that as many as ten thousand Pakistani seafaring jobs could be at risk if the impasse continued. The American P & I Club’s resolve not to talk about money while seeking the release of the ‘Karachi Eight’ also exposed the futility of the Pakistani stand. The nine month long stand-off achieved little beyond earning the opprobrium and derision of the international community.

Compensatory Mechanism

Whenever such an oil spill occurs, measures aimed at preventing or minimising pollution damage are immediately initiated, followed by clean-up operations at sea, in coastal waters and on the shoreline. If a damaged tanker is leaking oil, such oil also needs to be removed. The recovered oil and associated debris also needs to be disposed off in an environmentally – friendly manner. Apart from environmental degradation, loss of livelihood, particularly for those engaged in the fishery and coastal tourism sectors, also results. So who pays for all this? The tanker owner is generally supposed to pick up the tab or rather, on his behalf, the oil pollution insurance that he subscribes to, which is normally a Protection & Indemnity (P&I) Club.

The primary compensatory layer is through the 1992 Civil Liability Convention. If the state raising the claims has signed and ratified the said convention, it can directly approach the concerned P&I Club, which is duty-bound to settle them promptly. There is however a catch: the actions taken as well as the costs being claimed need to be both reasonable and justifiable. The CLC moreover imposes a cap on the maximum liability of the owner / P&I Club, which is dependant on the tanker size, and which in the case in question, should have been around $ 47million.

Just in case valid claims go beyond this limit, the supplementary layer of compensation is furnished by means of the International Oil Pollution Compensation Fund 1992 or simply the Fund Convention. The good part is that irrespective of the size of the tanker, compensation to the tune of $ 304 million can be dished out in respect of all claims found to be valid, which is way beyond the CLC limit. These payments are financed by contributions levied on oil companies and other entities that receive crude oil by sea, with the compensation again only being made available to the countries that have ratified the 1992 Fund Convention.

In the case of the Tasman Spirit Spill, the bad news was that Pakistan was neither a signatory to the 1992 CLC Convention nor the Fund Convention. The good news was that the American P&I Club still agreed to honour all claims in line with the CLC Convention. This offer, had it been accepted, would have netted us upto $ 47M. Having been repeatedly spurned, the only recourse is through lengthy litigation, which is still in progress with no signs of reaching finality anytime soon.

The Compensation Imbroglio

Whenever such a tragedy occurs, action is immediately initiated on minimising pollution damage through various means. The vessel’s owner and it’s insurer brought in a number of experts, salvage vessels and equipment to deal with it in the current context. The American P & I club claimed to have spent around $ 36 M for this purpose and also paid out $ 1.6 M to KPT for their part in the containment and clean-up efforts.

What is most important, however, is that compensation should start flowing immediately to those who need it most, the ones whose livelihood is most affected by the spill. The American Club was cognizant of this as it signalled it’s immediate readiness to support the establishment of a legal framework to ensure it’s early disbursement. Following the spill, a list of 130 fishermen whose livelihood were disrupted was finalized jointly by SPA, IUCN, UNEP, WWF and UNDP. A large number of vendors plying their trade along this stretch of the coast were also adversely impacted. A high incidence of ailments was reported amongst picnickers as well as the residents of Shireen Jinnah Colony, Clifton and Seaview who were exposed to a high concentration of volatile organic compounds in the environment. To the best of my knowledge, none of them have been compensated so far. I have it on good authority that a P & I Club rep was actually going around with a cheque of $ 250,000 in his pocket searching for anyone honest and willing enough to disburse it to those most affected. The Edhi trust refused to accept this responsibility on the plea that their offices and persons would be literally torn apart by rampaging mobs. The biggest hurdle thus was the lack of an administrative and legal framework within whose ambit a fair disbursement was possible.

On their part, P & I Clubs normally try to expedite the processing of claims, provided they are well-documented, reasonable and justifiable. Anyone who learns that the claims of an American franchise were promptly sanctioned while that of a local franchise further down the Clifton Coast was left unattended, would instantly cry foul. The fact of the matter is that while all business transactions and tax records of the former were properly documented, that of the latter wasn’t. Pakistan’s decision to turn down the P & I Club’s offer of compensation under the 1992 Civil Liability Convention as inadequate opened the floodgates for litigations and even criminal cases.

Litigations Galore

Three claims were filed for damages in the Sindh High Court against the owners of the Tasman Spirit, one after the other: first by KPT for Rs. 102.6 B, second one by DHA for a whooping Rs. 320.7 B and a third by the Pakistan Fisherfolk Forum which claims to represent almost 22000 Pakistani fishermen, for Rs. 1.2 B. As an afterthought, the Pakistan Navy also put in its own claim of a relatively modest Rs. 372 M in 2007. The owners in turn filed a counter claim of US $ 6.7 B against the KPT for approximately the same amount as being collectively claimed against it. The ultimate recipient of the fuel cargo, National Refinery Ltd, settled out of court, having been duly compensated by the P&I Club.

Assimina Maritime Ltd, the owner of the Tasman Spirit, moved the Queen’s Bench Division (Commercial Court) in London under the Arbitration Act against the Charterer ie PNSC for breaching the safe berth warranty, meaning in effect that the port of Karachi was not as safe as it should have been, with the owner quantifying their losses at US $ 6.6 B. The Court’s declaratory award announced in 2007 held that “the effective cause of the grounding was the failure of those responsible for the navigation of the vessel to give appropriate helm orders at the appropriate times”.

Another petition filed by the shuttle tanker Sea Angel was settled in the same court through a compensatory payment of US $ 1 million by the vessel’s charterer Tsavliris Russ Ltd.

The underwriters had to pay $ 4.2 M as salvage charges and the general average contribution to the claim settlement agent W K Webster in London, with the Sindh High Court retaining an insurance guarantee of an equivalent amount. The consortium of the six local companies that had insured the ship’s cargo subsequently filed a claim of about $ 15 M against the owners on account of their negligence in plying an unseaworthy vessel.

Conclusion

Beyond the arbitration cases decided upon at the London Commercial Court, the cases filed at the Sindh High Court show no sign of concluding anytime soon. Even if, through a stroke of good luck, all such cases are eventually decided upon in Pakistan’s favour, the problem is that the total amount available for disbursement (being kept by the Nazir of the Sindh High Court) is only around $ 11 M in all, which includes $ 2.2 M earned through the auction of the confiscated vessel Endeavour II. This is a far cry from the $ 47 M offered earlier by the P & I Club and an even further cry from the 5.5 B dollars being claimed by DHA and the 1.75 B dollars being claimed by KPT.

The incident exposed a number of internal weaknesses. For one thing, we weren’t prepared at all to handle such type of exigency in terms of expertise, equipment and coordination and lacked an adequate administrative, operational and legal framework. Eight years down the line, nothing much has changed. Having taken decisive action in detaining the crew members and the salvage master, as well as the salvage vessels / equipment, and filed in our billion dollar claims, it’s business as usual. Pakistan has gone on to sign the CLC 92 Convention but is still dithering on signing the Fund Convention, which would make a much higher level of compensation immediately available. It seems that we are apparently banking on the non-recurrence of such a tragedy.

What Pakistan lost on the international maritime front in terms of prestige is immeasurable. Our treatment of the Tasman Spirit crew, which voluntarily stayed on with the ship after it’s grounding in order to assist in the salvage operation, won us no friends. The detention of the salvage master in particular, who arrived after the vessel broke in two, was a bit too much to digest. It became a bit too obvious that we were simply using the detainees as bargaining chips for securing a billion dollar plus compensatory settlement, instead of pursuing the course of negotiations and / or litigation in earnest. Instead of searching for scapegoats, our focus should have been on self-assessment and self-improvement so that we become much better prepared the next time around. Following the Exxon Valdez oil spill of March 1989, the US Congress immediately passed a comprehensive piece of legislation called the Oil Pollution Act of 1990 (DPA 90). Isn’t this something we should be focussing upon too? We need to draw the right lessons from this incident, which would enable us to obviate our obvious weaknesses and raise our preparedness and response levels.

Note: This article was published in three parts in the daily newspaper ‘Pakistan Today’ in it’s issues of 06, 07 and 08 September 2011.

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