September 4, 2017
The following Insight from Mike Priestly, Senior Consultant, explores the use of the JH143 in Australia when conducting risk assessments of shipyards:
Historical Context Australia has a long and proud history of shipping and boating around Australia’s enormous coastline. Many of us grew up near marine infrastructure such as boatsheds and slipways. Some had nice little slipways running into their backyards. It seems slipping was the norm for smaller ships and dry-docks for larger ships, including naval dry-docks. The skills and knowledge to manage these facilities were passed down like most crafts and trades.
Today, we have travel lifts, floating dry-docks, synchro lifts, large mobile cranes and SPMT trailers to serve ship building and maintenance facilities. In the background, many of the original slipways and dry-docks still exist, ageing away until they are no longer viable.
Changes
As the methods of slipping and shifting vessels has evolved, we have come to rely on a range of more diverse and method-specific skills. No longer does a dry-docking/slipping qualification meet all of the requirements for this industry. Companies must develop site- and task- or job-specific procedures and training programs consistent with the knowledge and skill set of their workforce that meet external stakeholder expectations.
The overlay of Quality, Health, Safety and Environmental (QHSE) requirements imposed by legislation and supported by regulatory compliance or enforcement regimes have also changed significantly. Over the past 30 years, site operators have invested heavily to reduce environmental impacts from toxins associated with older TBT antifouls, containing contaminants and preventing site contaminated storm water from reaching the water.
As a result, there are fewer accidents, much cleaner nearshore facilities, and significantly less impact on adjacent waterways. A great place for adventurous kids to play and fish, but unfortunately those days are gone!
Insurance
Work on slipped vessels during construction or maintenance is generally covered under a vessel builders risk insurance policy. Depending on the level of risk and coverage, insurers often require a nominated person to conduct a site inspection and risk assessment. There is no published generic standard for the inspection and assessment – many insurers have their own standards or guidelines.
For larger shipbuilders, there is a common template accepted by most insurers for the assessments called ‘JH 143’, produced and revised by the Lloyds Market Association, Joint Hull Committee (JHC). This committee was founded in 1910 and comprises underwriting representatives from both the Lloyd’s and IUA company markets, representing the interests of those who write marine hull business in the London market.
The scope of the JH 143 risk assessment includes:
- Geographical and Environmental Risks
- General Site Condition
- Processes and Procedures
- Quality Assurance/Quality Control (of the production process)
- General Housekeeping
- Management of Subcontractors
- Permit to Work Systems
- Emergency Response Plan
- Fire Fighting Capability
- Shipyard Equipment
- Atmospheric Monitoring & Control of Industrial Gases
- Launching & Sea Trials
- Site Safety
- Casualty History
The JH143 template is minimal and does not descend to the typical level of detail that might be expected in an audit (for example, performance criteria etc). A short search on the internet reveals larger (non-Australian) shipyards use the outcomes of these assessments to profess to foreign ship owners and oil companies the high standard of their yards, despite ongoing fatalities and other major incidents such as fires.
Challenges of risk assessment
While the JH 143 Risk Assessment is relevant for large shipyards, here at ONA we’ve found that surveyors undertaking the assessments of smaller, more modern shipbuilders and facilities are finding a serious disconnect between the templated risk assessment and the site and activities being assessed. While the traditional marine surveyors engaged by insurers often have a lifetime of maritime expertise, their capacity to stay abreast of rapidly changing engineering, operational and regulatory environments is a major challenge. The shipyard plant and equipment, as well as QHSE supporting systems, are becoming increasingly complex. Therefore, reviewers who conduct the risk assessment must have both expertise at a higher level in marine engineering and QHSE expertise – a combination not often seen in the market today, but an area where ONA excels.
Challenges for ship owners
In the smaller yards more prevalent around Australia, not generally subject to a JH 143 risk assessment, there often remains significant risk to the shipyard user and insurer which goes under the radar. Some insurers are keen to minimise costs and their bureaucratic burden in considering whether to insure a vessel during repair or construction, and forego a risk assessment with a premium adjustment (increase). Given the state of older facilities, the ship owner and insurer are accepting a significant yet unquantified risk. Whereas with a risk assessment, all stakeholders (the ship owner, facility owner and insurer) are able to make informed decisions about risk mitigation (including the facility owner managing identified risks more effectively); in its absence, everyone is merely hoping for the best – hardly acting with ‘due diligence’.
When we’ve been acting on behalf of ship-owners and clients, we’ve noticed this lack of transparency and diligence with respect to the remaining capacity of slipways and cradles, especially in older facilities. Often, the QHSE systems and protections are poorly maintained and serve a token presence only. Many ship-owners make a cursory check of insurances before committing to contracts, despite clearly rundown and poorly maintained infrastructure.
ONA’s expertise
At ONA, we’re well placed to not only undertake such risk assessments using highly qualified and motivated staff, but can also assist shipbuilders with regular audits and management of changing compliance obligations. Our team has the capability to support facility re-lifing, engineering assessment and the development of fit-for-purpose marine slipping and docking procedures and training support.
Tap into our expertise
