Safety Concerns: Mystery Clouds Sinking of IRI Registered Ship


Uruguay – A vessel carrying 260,000 tons of iron ore has reportedly sunk after taking on water following a hull crack 2,000 miles off Uruguay.

Stellar Daisy was carrying the ore from Brazil to China.

Twenty-two of twenty-four crew members are yet to be found.

Reports suggest International Registry Inc. failed to stop the 1993-built vessel which was flying Marshall Island flag from sailing, even though major deficiencies were reported at the port.

Ship owner and operator Polaris Shipping declined to comment on possible causes at this stage. Vale, the reported cargo owner, has not replied to emails from Lloyd’s List.

However, even as the actual reason why this incident took place remained unclear, some insurance officials pointed out that the speed of sinking and the high loss of life mirrored casualties related to liquefaction of cargoes such as iron ore and nickel ore.

With high moisture content, iron ore has a propensity to liquefy during a voyage, which causes serious stability problems with a high possibility of capsizing.

“Incidents due to liquefied cargoes can lead to serious perils, as the liquefied slush mounts quickly, brought on by vibrations and motions of the vessel, and the ships sink fast,” said a P&I club official.

“The wet cargoes change their state from ore fines or mineral concentrate to a viscous fluid that can undermine the balance of the ship.”

London P&I club says in its new guide on managing the risk of cargo liquefaction that the liquefied cargo can flow to one side in a roll in heavy seas, and that it would not return with the roll the other way, which progressively leads to the vessel capsizing.

Consignments that are prone to liquefying have to undergo proper testing of moisture content before being loaded, a measure described under the International Maritime Solid Bulk Cargoes Code.

The code as it stands would possibly prevent many incidents due to liquefaction if it is followed strictly, as it sets out a maximum moisture content of the cargo which is considered safe for carriage in ships, known as total moisture limit.

The onus for these lab tests lies with the charterer, as it must provide the master of the vessel with written evidence that the moisture content does not exceed the TML.

Upon the failure to provide such a certificate, the master should not load the cargo, said a Singapore-based vessel owner and operator.

“But unfortunately, the results from these tests are sometimes modified and false figures for the moisture content are presented, which leads to emergencies,” he said.

“However, the lab centres have an obligation to keep the sample of the cargo inspected by them for a period of two months,” he conceded, adding that in the case of Stellar Daisy this could provide essential evidence for an investigation.

Other theories

Stellar Daisy was originally built as a single-hull very large crude oil carrier at the Nagasaki Shipyard owned by Mitsubishi Heavy industries and was converted to a VLOC at the Cosco (Zhoushan) Shipyard in China in 2009.

However, some insurance officials said conversion might not have caused the incident, as such a process would be carried out under class inspections.

According to Korean Register, the ship had undergone an annual survey on August 12 last year.

Asked by Lloyd’s List whether the vessel had undergone a condition survey by a surveyor in the last three years, the Korean P&I Club, which has provided protection and indemnity cover to the VLOC, declined to comment.

In February, the China Port State Control authorities identified six serious deficiencies related to watertight and weather tight doors, indicating potentially leaking hatches or doors. Yet the vessel was allowed to sail without any detentions.

Some market participants also suggested there were other possible causes of the vessel sinking, such as its age, loading stress, or uneven loading that can have structural effects on vessels which can cause damage to the frames and cause a hull failure.

LISCR Second Over IRI

As at 1 January 2016, Panama, Liberia and the Marshall Islands continued to be the largest vessel registries, together accounting for 41.0 percent of world tonnage, with the Marshall Islands recording the highest growth among major registries, at 12 per cent over 2015.

The top 10 registries account for 76.8 percent of the world fleet in terms of dwt.

The International Registry Incorporated (IRI) under which Stellar Daisy was registered claimed recently that it has surpassed Liberia International Shipping Registry (LISCR) in ranking as the world’s second best shipping registry.

IRI, the company that administers the Marshall Islands ship registry, filed a lawsuit against Liberian International Ship and Corporate Registry, LLC (LISCR) in state court in New York seeking damages of over $10 million.

The suit alleges that LISCR, at the behest of the Government of Liberia and its [former] president Charles Taylor, breached its material obligations to, among other things, make payments to IRI in connection with LISCR’s assumption of Liberia’s corporate and maritime programs that International Registries formerly operated from 1949 to 1999.

LISCR dismissed the suit at the time, insisting that it was a private company operated and fully owned from the United States by U.S. nationals, completely independent of the Liberian government and complies fully with all aspects of US regulatory law.

LISCR says that since assuming control of the Liberian Registry on January 1, 2000, it has made significant gains in both its ship registration and corporate registration activities.

Liberia’s maritime registry was an important source of finance for the government during the height of the civil war when ship registry fees and taxes generated some $18 million a year, as much as 25 percent of the nation’s revenue, by some estimates.