Acting as a mandatory regulation, ISM Code usually lays down standards of shipowner's responsibility for safe management of ships and pollution prevention accepted internationally. The obligation of the shipment owner is to establish, maintain as well as implement a Safety Management System that is to meet the ISM Code's requirements.
The aspects of civil liability's impact is to be focused on the impact on liability of shipowner for cargo loss or damage, in addition to shipowner's legal right to limit his liability for claims. Some of the concepts such as seaworthiness, actual fault and privity, crew's negligence, the role of the designated person and recklessness with knowledge are to be considered. There has already been a change in the conditions in terms of policies that meet the requirement of the ISM Code through Hull and Machinery (H & M) underwrites and protection and Indemnity (P & I) clubs. ISM Code will test the shipowners' liability for keeping their ships in seaworthy condition and their duty of disclosure.
The ship-owners can use the ISM Code to act as a proof of best practice compliance. The assembly of the International Maritime Organization (IMO) adopted International Safety Code (ISM Code) in 1993 as a resolution A. 741(18). This is from culmination of a series of resolutions that has been adopted by IMO, and are working with accordance to guidelines on management procedures in making sure that it exist a safest environment for ships operations and maximum attainable prevention of marine pollution. Out of these disasters, people lose their lives in addition to creating a serious damage to the marine environment. The shipping industry as well suffers a serious economic loss. From the claims of P & I insurance within the period 1987 to 1990, the cost of P & I insurance, went up to an average more than 200 per cent.
The same developments took place to the Hull and Machinery claims and premium. More attention therefore has been turned to these accidents by the international organizations, government agencies, industry and the public. According to the researches that have been done by industry and government agencies in trying to find where the problem lies, reveals a common factor that the accidents are basically caused by humans failings.
Following such high profile incidents as well in response to political pressure, the ISM Code came into being. It is always a short document which has 13 articles long. It forms the first step that had been taken by IMO in minimizing human error in addition to managing deficiencies as causative factors in maritime casualties, (Ogg, T., 1996). Basing the fact that it is because of human error that largely contributes to marine accidents and most of them have been traced to management, the ISM Code works more particularly in improving the software of shipping, (Mandaraka-Sheppard, A., 1996).
The impact of the ISM Code on shipowner's civil liability
The impact on shipowner's liability for loss of or damage to cargoes
Carrier's liability based on the cargo will be determined as per The Hague or Hague-Visby Rules. Even though the International Safety Management Code is not involved directly to the issues of carriage of goods by sea, it will still have effect on the manner in which carriers' liability will be assessed in case of loss of or damage to cargo, (Lord Donaldson of Lymington, 1998).
The Hague and Hague-Visby Rules
The Hague-Visby Rules defines that the carrier is the party who enters into a contract of carriage with the shipper and owner or the charterer is included. However in several instances, the carrier for the purposes of the Hague-Visby Rules becomes the shipowning company, though it can happens that the carrier becomes a demise charterer or time charterer. This applies to the "company" though the carrier does not include the manager.
The impact of the ISM Code
ISM Code's impact on the shipowner's liability based on the Hague-Visby Rules lies within the effect of the Code over the interplay between the overriding obligation as stated in article III (I) and the crew negligence which is exception in Article IV (2).
The main purpose of the carrier who is the charterer or the shipowner based on the Hague-Visby Rules becomes to carry out due diligence in making sure that the ship is of sea worthy and is properly equipped, manned as well as supplied the ship. As it is defined, due diligence to be a genuine, competent and reasonable effort of the shipowner in fulfilling the obligation of providing a seaworthy vessel, the comment of Scrutton regarding Charter parties and Bills of lading (19th Edition is that the required due diligence is due diligence within the work by the carrier, everyone, be it agents or servants or independent contracts that are employed in making sure that the ship is always seaworthy, therefore the carrier will never run away from the burden to provide that due diligence since it has been exercised by proof that he will use persons who will be competent in performing their given task of making sure that the ship is seaworthy.
As another approach of its definition states, that it tend not to be just a sincere or a praiseworthy, though not successful effort, but such an intelligent as well as efficient attempt as shall make it so ( seaworthy) as far as it can be served by diligence. Therefore to only say that I did my best do not seems to be enough and the action of the carrier in exercising due diligence must be judged against highest level of standards. Such standards will only be altered with the alteration of the technology, knowledge, and ways of operation as well as other factors. ISM Code introduction sets a new standards for due diligence where the safety management system of the shipowner is tested. Generally there are two stages in which the shipowner's due diligence will be judged. For example the content of SMS will be evaluated first in verifying if the system could ensure safety and marine environment protection. Secondly there will be judging of SMS application: failing to implement the Code or any other requirement failure which can be used as evidence when claimant claims for failure of due diligence of the shipowner.
Seaworthiness and proper manning
A vessel is said to be seaworthy when fulfils the degree of fitness which an ordinary, careful as well as prudent owner would wants his vessel to have before starting the voyage, considering every probable circumstances of it. The responsibility of the shipowner is to make sure his vessel is fit in terms of design, structure, condition and equipment in order for him to encounter the ordinary perils of the voyage in addition to having competent master and efficient crew that fulfills the need of the Hague-Visby Rules. When questioning seaworthiness of ship based on whether the carrier failed to take care of the goods, then at first the objective standard of seaworthiness can be tested against requirements of the Code and Chapter IX of SOLAS. In case satisfactory SMS existed while the shipowner or the operator failed to implement it properly, the ship will be taken as unseaworthy since there was no properly implementation of either "in breach of Article III-1 or in breach Article III-2."
The work of maintenance has to be organized and done with control, forethought and records. Under the ISM Code a planned preventative maintenance system is accepted. In case there has never been a proper consideration of what might take place, it will be categorized under unseaworthiness. Again in case the planned maintenance system is just for the ship to pass the assessment but the implementation has never been done properly, then the ship might as well be regarded as unseaworthy.
Generally, it had been taken that in proper manning the ship meant that the crew had to be properly certified, however, the properly manned ship has been summarized in Scrutton on Charterparties and Bill of Lading with the introduction of the ISM Code, that this is not enough the shipowner to make sure that every member of the ship's crew has to be competent to take responsibility of their duties and the entire crew has to work as a team; where competence is to be trained every crew member in the provisions of the SMS of the company as well as his familiarization with the instructions, that has to be provided before sailing by the company to every member of the crew, (Gold, E.,1996). If members of the crew follow the procedure for a given emergency but their efforts fail, then it might be considered that the company did not establish the right procedure for a given emergency, while if the members of the crew fails to follow the procedures that have been established by a company causing loss or damages on the cargo, the carrier might be liable since it did not train the members as…