What does it mean for a ship to be S’pore-flagged, and why is S’pore involved in Baltimore ship collapse probe?


The Dali container ship crashed into one of the pillars of the Francis Scott Key Bridge in Baltimore on March 26. - Reuters

SINGAPORE: A container ship that crashed into the Francis Scott Key Bridge in Baltimore on March 26 was sailing under the Singapore flag, spawning questions about what this means, why Singapore’s authorities are involved in the investigation and the parties that could be held liable.

The Straits Times looks at what it means for a ship to be registered in Singapore and why investigators here have been sent to the United States to aid in the probe.

1. What does it mean when a ship is Singapore-flagged?

Under international maritime law, all merchant ships participating in international trade need to be registered in a country of the shipowner’s choosing, called the flag state. Each ship is bound by the laws of the flag state that it is registered in.

The Singapore Registry of Ships, which was established in 1966, is responsible for overseeing Singapore-flagged ships and ensuring that these vessels and their owners meet local and international regulations covering areas such as crew safety and environmental protection.

Singapore’s ship registry, which was the fifth-largest in the world in 2023 according to Lloyd’s List Intelligence, comes under the purview of the Maritime and Port Authority of Singapore (MPA).

2. How many vessels fly the Singapore flag, and what is needed for a ship to get on the registry?

As at January, there were about 4,000 vessels being administered under the Singapore Registry of Ships, representing a total internal ship capacity of more than 100 million gross tons.

Except for certain vessels like fishing boats, all types of ships, including offshore vessels such as oil rigs, can be registered with the Singapore ship registry so long as they comply with the relevant international standards.

According to MPA’s website, vessels that are less than 17 years old and meet these requirements are normally accepted for registration.

MPA has said the Singapore flag has become a flag of choice for many shipowners and operators due to the quality of the ship registry here.

Other advantages of flying the Singapore flag that have been cited within the shipping industry include the ease of incorporating a Singapore company, as well as tax exemptions and various incentive schemes.

3. Who can be registered as owners of Singapore-flagged ships?

Only Singapore citizens, permanent residents or companies incorporated in Singapore may be registered as owners of Singapore-flagged ships. These companies can be locally or foreign-owned.

For a company to be registered as the owner of a Singapore-flagged ship, it must have a minimum paid-up capital of $50,000. But this requirement may be waived depending on the number of ships being registered and their aggregated tonnage.

The owner of every Singapore ship must appoint a manager whose residence is in Singapore, according to MPA. The ship manager may be an officer of the owning company or of a management company, and he is responsible for all matters related to ship registration and crew manning, as well as safety at sea.

In the case of the Dali container ship – which rammed into one of the pillars of the Francis Scott Key Bridge in Baltimore, resulting in six people presumed dead – the shipowner is Grace Ocean, a Singapore-based subsidiary of Japanese conglomerate Mitsui & Co.

The ship’s appointed manager is Synergy Marine Group, a Singapore-headquartered company, which hired and manages the crew aboard the Dali.

Synergy, which manages 668 vessels, oversees various aspects of operations for shipowners, such as docking procedures and risk management.

4. Why is MPA involved in the probe, and what are its responsibilities in terms of maritime safety?

Moses Lin, partner and head of shipping at law firm Shook Lin & Bok, said MPA ensures Singapore-flagged ships have complied with relevant safety regulations.

It also ensures that these ships have undergone the regular inspections and certifications needed for a vessel’s structural integrity, seaworthiness and safety.

But flag states, he noted, do not have direct responsibility for the day-to-day operational safety of vessels.

In an accident like the Baltimore one, just because the ship involved is registered in Singapore does not mean the Republic is responsible, said Associate Professor Goh Puay Guan of the National University of Singapore Business School and Centre for Maritime Studies.

“Safety checks and compliance checks would likely have been conducted regularly, and as long as these are done in accordance with procedure, the regulatory bodies would have carried out their responsibilities,” he added.

Under international law, flag states must conduct an inquiry into any marine casualty or incident involving a ship flying its flag that causes loss of life or serious injury to nationals from another state, or causes serious damage to ships or installations of another state.

The flag state must also cooperate in any inquiries held by the other state into such incidents.

In the case of a marine casualty or incident, owners and masters of Singapore-registered ships must first take urgent steps on the ground to prevent further deterioration of the situation.

Once that is done, they should alert MPA to the incident immediately or within two hours of the incident at the latest. A more detailed report should then be submitted within 24 hours of the occurrence.

5. Why are investigators from Singapore’s Transport Safety Investigation Bureau (TSIB) being sent to Baltimore?

TSIB – a department of Singapore’s Ministry of Transport (MOT) – is the authority responsible for investigating air, marine and rail accidents and incidents here.

When it was set up in 2016, it took over the task of carrying out independent safety investigations into marine accidents from MPA.

The bureau will investigate incidents that occur in Singapore with a “very serious marine casualty”, regardless of the country the ship is registered in, or those that involve a Singapore-registered ship when it is overseas.

These “very serious” incidents involve the total loss of a ship, a death, or severe damage to the environment. TSIB may also investigate marine casualties and marine incidents where safety lessons can be drawn.

MOT has said TSIB’s investigations are aimed at preventing accidents and incidents, and not to ascribe blame or liability. Still, any investigation being conducted by the bureau does not prevent other entities, such as MPA, from conducting their own probes.

6. Which party bears the liabilities in such accidents?

As early investigations into the Baltimore bridge collapse are under way, it is difficult to ascertain which party would be liable for damages, legal experts told ST.

Major parties that might be potentially responsible include the shipowner, operator, charterer, captain or master of the vessel, said Shook Lin & Bok’s Mr Lin.

The Dali container ship was chartered by Danish shipping giant Maersk at the time.

Losses would likely include damage to the bridge, business and service disruptions, and the loss of lives, said Kevin Chan, senior associate at law firm Kennedys Legal Solutions.

Depending on the outcome of the investigation, Grace Ocean can seek compensation from relevant parties, lawyers said.

“If it was an engine failure which caused the vessel to lose power and collide with the bridge, it might be the operator or the engineer who was responsible,” said Mathiew Rajoo, partner at Dennis Mathiew law firm.

The company that hired the parties responsible may then be liable, he added.

Port pilots may also be held liable in certain situations.

“Pilots typically board ships in local waters to direct the ship as these waters could be small and narrow or have conditions that the ship’s captain may not be aware of.

“So, in certain instances, it could also be the pilot’s fault for failing to direct the vessel correctly,” Lin said.

Grace Ocean may shield itself from damages by filing for a limitation-of-liability action under maritime law, said Mathiew. The liability will be based on the tonnage of the vessel.

But the company, he said, will not be entitled to the limitation if it is established that the loss resulted from a deliberate act or omission.

The shipowner would also likely be covered by insurance, said lawyers.

The ship has been insured by the Britannia Protection and Indemnity Club, a mutual insurance association owned by shipping companies, since 2014.

According to its website, the insurance group covers areas such as loss of life, liability to cargo and collision liability.

But there may be instances where shipowners could be denied their claims, depending on the terms of the policy, said Chan.

“Possible situations where coverage may be excluded would include the vessel’s failure to satisfy... requirements under the policy, or if the collision was intentional or a result of wilful misconduct by the shipowner,” he said. - The Straits Times/ANN

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