NEWS AND EVENTS / NEWS / RADIATION RISK IN JAPAN: CONTINUED CONCERN LEADS TO PRECAUTIONARY MEASURES IN THE SHIPPING INDUSTRY

Nick Burgees

Radiation risk in Japan: continued concern leads to precautionary measures in the shipping industry
Thursday 21 April, 2011

In the aftermath of the Japanese tsunami and the resultant damage to the Fukushima nuclear power station, international concern continues in respect of the potential implications for vessels trading to Japanese ports, including for the health and safety of their crew. As at mid-April, the Japanese authorities confirmed that all international seaports that had not been damaged by the earthquake and tsunami were operating normally and that no health risk had been detected around those ports.  The Japanese authorities have also introduced a system of issuing certificates showing radiation readings on vessels and containers departing from Japanese ports.

The European Union

Nonetheless, the European Union’s declared stance has been to exclude any risk, no matter how minimal. To this end, in mid-April, the European Union executive called on all European ports to check radiation levels on all vessels coming from Japan to establish whether they exceed a proposed new radiation limit of 0.2 microsieverts per hour above normal levels. In the European Union, the normal level of radiation (in other words, radiation absorbed naturally from the environment) is around 0.1 microsieverts per hour. Where a port authority in a Member State detects radiation levels above the new threshold, it should inform the European Commission and the vessel in question should be thoroughly washed. Radiation can generally be washed from vessels with soap and water, thereafter posing no health risk.

Although the European Commission’s proposal is not binding and EU Member States will have to decide individually whether to comply, the announcement is significant particularly in that it was made a day after the first vessel sailing from Japan following the fallout at Fukushima arrived at Rotterdam. The vessel had already passed a radiation screening test at the English port of Felixstowe. The vessel was given the all clear after no abnormal signs of radiation were found within the 380 containers originating from Japan, although Rotterdam port will conduct its own radiation screening procedures. Rotterdam is Europe’s largest container point and it had already announced its intention to screen vessels for radiation while they were still at sea. Although the port authorities at Rotterdam have stated that they do not expect to find levels of radiation above what is permitted, nonetheless they intend to carry out their radiation scans before allowing any potentially affected vessels to enter the port.

Belgium has also announced that any vessels arriving from Japan at Antwerp or other Belgian ports will be subject to government-sanctioned radiation checks. The country-wide measures were introduced after Antwerp was already conducting unilateral checks, partly to allay the concerns of those working in the port and performing cargo operations. Containers entering Antwerp are in any event scanned for radioactivity on a daily basis since the 9/11 attacks in the US. The first vessel to arrive in Zeebrugge from Japan on 12 April revealed no sign of abnormal radiation levels. However, the Belgian Federal Agency for Nuclear Control has stated that it will continue to carry out checks of vessels and their cargo while the vessels are at sea. The Agency says it does not expect that its protective measures will disrupt cargo operations. 

Britain also declared its intention to introduce random spot checks for radiation on vessels calling at UK ports from Japan after 11 March 2011. However, the Department of Transport has not confirmed the proportion of vessels that the UK Maritime and Coastguard Agency will test, although the vessels that have so far been selected for sampling had all called at Tokyo Bay ports between 11 and 19 March.

In the German port of Hamburg, Europe’s third biggest container port, the Interior Ministry is liaising with the port authorities and customs to come up with a unified plan for dealing with potentially contaminated vessels. However, most vessels from Japan will generally call at another port, such as Rotterdam in Europe or Hong Kong in Asia, before calling at Hamburg and will therefore have already been screened en route.

China and the MOL Presence

The container vessel MOL Presence was turned away from Xiamen, China, in March when the local port authorities detected an “abnormal” radiation reading of 3.5 microsieverts per hour. This was the first vessel to be prevented from unloading its cargo at a foreign port following the Fukushima incident. The local authorities decided that the vessel should be cleaned before any cargo operations could commence at Xiamen port. Instead, the vessel returned to Kobe port, where the radiation levels measured were said to be significantly lower than those detected in China, according to the vessel owners. The vessel has since received permission to call at Hong Kong after passing the radiation level checks conducted by the Hong Kong authorities.

At the time of writing, there are no other reported incidents of vessels having been refused entry to foreign ports as a result of radiation concerns.  

It is also reported that Shanghai’s Maritime Safety Authority will not allow ships arriving from Japan to deballast in the port unless they have changed ballast water at sea.

Charterparty radiation clauses and allocation of risk

Since 11 March, ship-owners have been calling for a “radiation” clause that can be incorporated into charterparties. Such a clause would be “owner-friendly” in the sense that it would require charterers to nominate a safe port in the event that a discharge port was declared unsafe due to abnormally high radiation levels. The clause would also allocate the risk of deviation costs to charterers. At the same time, owners would have the right to divert cargoes away from Japanese (or other) ports if radiation levels were considered to be above acceptable levels. As at time of writing, BIMCO is expected to publish a radiation clause for use in charterparties, which is expected to be “owner-friendly”. 

The Charterers’ P & I Club has already prepared a charterparty clause for the benefit of its members who wish to deal with the Japanese situation by way of a specific rider clause in their charterparties. The draft wording of the proposed clause incorporates a warranty by the owner that the vessel has not called at or off any Japanese ports since 11 March or traded in waters or an atmosphere that may subject the vessel concerned to nuclear contamination. Furthermore, in circumstances where the vessel and/or her crew and/or cargo are found to have been affected by radiation, owners are to be liable to indemnify charterers for the resulting loss (including from delay), damage and any other liability or expense that charterers sustain.

Clearly, any such clauses will not affect existing charterparties and the rights and obligations of the parties under those charters, including safe port warranties, indemnities for following voyage orders, liability for delay and for dangerous goods.

Market considerations

Apart from the clauses referred to above, some owners will have been negotiating with prospective charterers to include bespoke clauses in their future charterparties which allocate risk in respect of radiation. It remains uncertain whether charterers will accept a clause that has been drafted on behalf of and to protect owners. Alternatively, whether owners will conclude fixtures to trade to Japan without such a protective clause being inserted, or even with a more charterer-friendly clause incorporated, into the charterparty may depend on the state of the market. 

Shipping rates have seen a 55% rise for cargo to Japan, with Japan importing more raw materials so that it can rebuild its infrastructure and generate power. Japan is the world’s largest importer of both liquefied natural gas and coal and it has been reported that Japan may be considering a move away from nuclear power to increasing production from its natural gas-fired and coal power plants. Owners are reported to have been seeking premiums of 2.5 to 10 Worldscale points to enter Japanese ports, according to London-based brokers. Where charterers agree to compensate owners generously for taking the risk, then it may be that owners will take a commercial view, weigh up the risks and forego insistence on a radiation clause in their charterparties. The potential costs involved where a ship is found to exceed acceptable radiation levels, if soap and water cleaning is insufficient, could be considerable. In view of this, owners and charterers may wish to consider carefully what risks they are prepared to undertake.

Nick Burgess
Partner, London
nick.burgess@incelaw.com

David Richards
Solicitor, London
david.richards@incelaw.com

Nick Burgess is a partner and the head of the Ince & Co Japan team.  David Richards is a solicitor at Ince & Co London and is also part of the Ince Japan team. Please contact either Nick or David in respect of any queries arising out of this article or in relation to legal issues concerning recent events in Japan generally.

Nick Burgess is a partner and the head of the Ince & Co Japan team.  David Richards is a solicitor at Ince & Co London and is also part of the Ince Japan team. Please contact either Nick or David in respect of any queries arising out of this article or in relation to legal issues concerning recent events in Japan generally.

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