Hold inspection certificates, mate's receipts, bills of lading and authorisations to sign them, phytosanitary certificates, certificates of compliance, UN approval, origin, declarations by shipper, certificates of transportable moisture limit, moisture content, master's response sheet, certificates of IMO classification, lashing, readiness to load, fitness to proceed to sea, loading, fumigation, weight and quality, stowage plans, cargo manifests, dangerous cargo manifests, material safety data, hatch sealing certificates, statements of fact, letters of protest, empty hold certificates, trimming certificates and stevedores' time sheets, clean ballast discharge permits and paint compliance certificates
THIS CHAPTER considers the documents which a master may be required to issue or to receive in connection with the carrying of dry bulk cargoes and other cargoes such as steel and forest products which may be carried by bulk carriers.
A master should be aware that there is very often a complex financial background to the physical carriage of the cargo with which he is concerned. There will often be a chain of sellers and buyers with many sale contracts relating to the same cargo. Payments under such contracts will often be made by means of letters of credit whereby banks will make payment against documents presented to them by the party seeking payment. The documents presented will include many with which the master has been directly concerned.
Because the actual documents presented to banks must comply strictly with the description of those documents in the letter of credit, there may be intense pressure on the master to issue documents which comply with the description of the documents in the letter of credit. It is vitally important that the master resists pressure to issue documents when the effect of doing so will be to misrepresent the true situation. He must refuse to issue clean bills of lading, for example, when damaged cargo has been tendered, which should lead to the clausing of mate's receipts and bills of lading to reflect the actual damage condition. Failure to observe this rule may expose the owner to claims such as for shortlanding or cargo damage. A master should always consult his owner in such situations and should be aware of the dangers of signing or issuing documents whose authenticity he doubts or whose contents he cannot verify.
Master to receive maximum information: The master cannot hope to represent the owners and charterers efficiently and reliably unless he is provided with proper information. It is in the best interests of all parties to ensure that the master receives full informa- tion about his commercial responsibilities and is provided with clear guidance and clear orders. These should reach him in good time to ensure that he is able to act in their best interests.
Signing of documents: In certain cases a master may wish to acknowledge receipt of a document with- out binding himself to its authenticity or to the accuracy of its contents—for example, when he is asked to sign a statement of events following a collision. In such cases he may sign the document and add the words 'for receipt only' or 'without prejudice'.
Under English law, that would prevent his signature being taken to denote an admission of liability or acceptance of the document as true or correct. He
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should be very careful to ensure that when placing his signature on a document, even when marking it 'for receipt only' as is prudent, he is not taken under the laws of the country where he is to be accepting the authenticity or the accuracy of the document. If he is in doubt he should consult his owner and/or his owner's P&I Club.
Hold inspection certificate
The hold or hatch inspection certificate, or pre- loading survey certificate, is issued by a surveyor after inspecting the holds to ensure that they are suitable for the intended cargo.
A preloading survey is required when the local authorities at the loading port or the shipper demand it or when it is a charterparty requirement. Surveys are more likely to be required for sensitive and valu- able cargoes such as grain, alumina, fertilisers, pulp and paper, and high-value ores. Such a requirement may be stated in the charterparty. When a survey is required, loading cannot commence in a hold until the surveyor has passed it. Often the vessel cannot present notice of readiness until the hold inspection certificate has been issued, as the vessel may not be 'in all respects ready to load'.
If any holds fail the survey, a vessel on time charter may be placed off hire and a vessel on voyage charter may fail to start time running against charterers until such time as the holds have been resurveyed and passed, although it may be possible to have some holds passed so that the vessel can submit a valid notice of readiness and/or commence to load in suitable holds.
The master or his representative (for example, the chief mate) should take careful note of any criticisms offered by the surveyor and should try to obtain a clear idea of the work that must be done to bring unacceptable holds up to standard as quickly as possible.
The thoroughness of the Australian government survey prior to the loading of grain can be seen from the document (Appendix 14.1).
The surveyor will provide the hold inspection certi- ficate for whoever instructs him, but a copy will normally be given to the master. The master has no powers, except the power of reason, to require the surveyor to alter a negative conclusion. If the master considers that the surveyor's conclusions are unreasonable and if the consequences are likely to be costly, the master can set out his views in writing in a letter of protest (see below) or he can obtain the services of another surveyor, perhaps with the help of the ship's P&I club. A second surveyor cannot
overrule the first, but can provide evidence of the facts for use in a dispute.
Mate's receipt"4
A mate's receipt is a printed form, often with hand- written entries, which acknowledges on behalf of the ship the receipt of the goods. It is evidence that the goods specified in it have been delivered to and received by the ship. Usually the person to whom the mate's receipt is given is the person entitled to a bill of lading in exchange for the return of the mate's receipt.
When any damaged or deficient cargo is delivered to the ship it should immediately be brought to the attention of the shippers or their agents so that it can be removed and undamaged cargo supplied in its place.
This requirement should be confirmed in writing to provide a record in the event of a dispute.
Alternatively, qualifying words ('clausing') can be inserted to describe the condition of the goods at the time of delivery. As it is a common requirement that bills of lading should be issued in accordance with mates' receipts, if damaged cargo is not removed it will be necessary to clause the mate's receipts which will then lead to the clausing of the bill of lading.
Very careful consideration should be given to the wording of any clausing intended for mate's receipts to ensure that it is accurate. As explained above, the master's primary concern is that no claims should lie against the owner—for example, for cargo damage or shortlanding when damaged or insufficient cargo has been tendered by the shipper. If possible the master may wish to use a form of words which is acceptable to the shippers, but this is not his primary concern or obligation.
When in doubt as to suitable wording for clausing, the master should consult the owners, giving them as much notice of the enquiry as possible. The owners may instruct him to take advice from a surveyor recommended by the P&I club for the purpose.
The sample mate's receipt attached (Appendix 14.2) is taken from the papers of a handy-sized bulk carrier which carried a full cargo of soya bean meal pellets from Sao Francisco do Sul, Brazil, to Iranian ports. The chief officer has endorsed the document 'said to be, said to weigh', 'quantity and quality unknown'. These are common endorsements where the condition and quantity of the cargo is difficult to ascertain or where the ship's figures do not agree with the shore figures. However, this practice will not necessarily protect the owner from claims where there are very large differences which should have been noted.
A mate should not sign a mate's receipt nor a master a bill of lading which he knows is incorrect as the shipowner may be held liable if, for example, the sig- natory states 'weight and quantity unknown', in a situation where he knows the figures submitted are incorrect. It is better for the master to insist on using the ship's figures or to call for an independent survey to establish the true figure. Provided that he is acting reasonably owners will not be liable for any delay caused. In bulk trades mate's receipts are not always issued, particularly when the master himself signs the original bill of lading.
Authorisation to sign bills of lading
Under a time or voyage charterparty the master in signing bills of lading (Bs/L) acts as agent for the ship- owner. Similarly, if a loading broker or charterers' agent signs bills of lading it will be as agent of the shipowner. However, both time and voyage charter- parties often contain a demise clause' which will state whether the master or another is signing on behalf of the owner or the charterer.
Under the terms of many time charterparties and some voyage charterparties the owners transfer the authority to sign bills of lading to the charterers, thereby cancelling the authority normally held by the master. In these circumstances the master should not sign bills of lading and cannot delegate authority to others to do so. If in doubt, however, he should request specific instructions first from his owners and secondly from the time charterers. If the time charterers tell the master to do nothing they have retained their own authority to sign bills of lading. If they instruct him to authorise a named agent they have, in so doing, passed their own authority back to the master.
In any case in which the agent will be signing bills of lading on behalf of the master, the master should ensure that the agent receives appropriate instructions in the form of an authorisation which he should issue.
The wording of any such authorisation is often dictated by owners' or charterers' voyage instructions and the master should consult his owner if he is in any doubt as to the form of instruction to be issued.
The authorisation should be given to the agent and a copy should be retained by the master, with the agent's signed acknowledgement. A suitable form of words is given in Appendix 14.3 and a copy completed for the soya bean meal pellet voyage is at Appendix 14.4.
It is common practice for agents to present masters with letters of authority which are worded to the agents' own advantage. The master is never obliged to use such forms. He can always use the owners' wording. If the agents refuse to accept such an authority the master should inform owners and time charterers accordingly.
In some trades, such as the grain and agricultural products trades, it is common to have 30 to 40 bills of lading. In these circumstances it is advisable for the master, always acting under instructions, to delegate his authority to one or several named individuals in the agency and to obtain copies of their signatures on all copies of the letter of authority. This will help to reduce opportunity for fraud when bills of lading are presented to the master at the discharge port.
It is important to stress that the master should always be aware of the precise terms of any relevant charterparty clauses and should consult his owners if he is in any doubt as to the existence or extent of his authority to sign bills of lading, whether on behalf of owner or charterer.
Bills of lading
Normally bills of lading (Bs/L) cause no problems, particularly when ships are employed on long-term contracts of affreightment and the parties to the contract are well known to one another. However, the
BULK CARRIER PRACTICE 169
experience of one major operator of bulk carriers in the early 1990s is that bill of lading fraud is widespread in the tramp trades, particularly in some western Pacific countries, and that it is getting worse. In these circumstances safe and rigorous practices are to be strongly recommended. It is good commercial practice for shipmasters to take nothing on trust.
The advice given by different owners varies because such advice is coloured by the particular problems which each has experienced. When there is a problem the consequences can be so serious that the master requires to be guided by his owners and their solicitors. He should not hesitate to consult his owners when in doubt.
A bill of lading (Appendix 14.5) may perform three functions. It is usually very good evidence of the terms of the contract for the receipt, carriage and delivery of the cargo. It is often a negotiable document of title to the goods carried, providing evidence of ownership of the cargo, and it acts as a receipt for cargo loaded aboard the vessel. The master's role in signing bills of lading has been described64'83 and can be summarised as follows.
Before signing the bill of lading, the master should ensure that:
1. The goods are actually aboard and the bill of lading is correctly dated.
2. The description of the goods complies with the mate's receipts, failing which the bill of lading should be claused accordingly.
3. That he only ever signs the same number of originals as is shown on the face of the bill of ladine. If three orieinals
O
are shown on the document, as is usual, only three should be signed. Particular care is needed when the master has to sign ten or 15 sets of three. (NB. The bill of lading shown [Appendix 14.5] was issued in four originals, which is unusual.)
The master should also ensure that:
4. The bill of lading contains a clause referring to any relevant charterparty, and includes the protection clauses specified in that charterparty. Very specific wording is often required in order to achieve the pro- tection of all relevant charterparty provisions, and the master should consult his owners. However, the master is usually required to sign bills of lading as presented and there is little that he can do except bring the matter to the notice of owners and charterers if the bills of lading do not contain the specific clauses.
The master should not:
1. Sign a bill of lading which is in any respect inaccurate.
2. Be persuaded to sign clean bills of lading against the offer of a letter of indemnity.
Signing the bill of lading: When the master is asked to sign a bill of lading there are six main aspects which he should examine for accuracy. The advice of one shipowner83, with some amendments, is sum- marised hereunder. However, it should be emphasised that there are no set rules.
Quantity of cargo: The master cannot be asked to sign for goods which he knows have not been loaded.
It is quite common for there to be a small discrepancy between the figure obtained from shore weighing, and the draft survey by ship's officers. The charterparty,
170 THE NAUTICAL INSTITUTE
or the practices of the trade, will dictate which figure is to be used in the bill of lading. If the shore figure is used, and the ship's figure by draft survey is less, the master will fear that he will be unable to deliver the full quantity stated in the bill of lading. Procedures for dealing with this situation vary from company to company and from one trade to another.
• A discrepancy of up to 0.5 per cent (one owner will reluctantly accept 0.25 per cent) between the bill of lading figure and the ship's figure is considered acceptable in some trades, and it is normal for the master to sign the B/L as presented in those circumstances.
• One owner advises his masters to sign bills of lading as presented when the difference lies between 0.1-0.5 per cent in excess of the ship's figure, but then to inform charterers and shippers in writing.
• If the discrepancy between the ship's figure and the bill of lading figure is greater than 0.5 per cent some owners expect the master to endorse the bill of lading with the remark 'x tonnes in dispute', whilst other owners adopt this wording for any discrepancy.
• Another option is for the master to leave the total blank, insert the remark 'quantity loaded in dispute', and attach a note of protest on a separate sheet of paper, stating what he believes to be the correct figure. When the dispute has been resolved, usually after the vessel has sailed, the note on the bill of lading can be deleted by an authorised agent, the protest removed from the bill and the correct figure entered as appropriate. Once the bill of lading has been corrected and the protest has been removed the bill is acceptable to a bank because it is not considered to be 'dirty', or non-negotiable. If this prac- tice is adopted it is very important that the agent is properly authorised and instructed.
• Other options are open to the master, but may be considered unnecessarily provocative, and should be avoided unless the circumstances are exceptional. For example, he can delete the bill of lading figure and insert the ship's figure, initialling the alteration, or he can tear up the bill of lading and issue his own.
• Endorsements such as 'said to be, said to weigh', 'quantity and quality unknown', or 'weight and quantity unknown' may be isued when the ship's figures do not agree with the shore figures, but this practice will not necessarily protect the owner from claims where there are very large differences which should have been noted. A master may be held liable if, for example, he states 'weight and quantity unknown' in a situation where he knows the figures submitted are incorrect.
Description and condition of the cargo: The master cannot be asked to sign for a description or condition of the cargo which he knows is misleading or
Description and condition of the cargo: The master cannot be asked to sign for a description or condition of the cargo which he knows is misleading or