Thursday, November 30, 2017

New Vessel Charter Contract for Ships Carrying Essential United Nations Aid to Starving People

Updated Documentation Means Faster and Easier Process for World Food Programme Cargo
Shipping News Feature
WORLDWIDE – In the dozens, if not hundreds, of articles we have written regarding modern piracy they have often touched on the primary role for many of the world's navies operating in the affected regions, that of protecting the food cargo convoys en route to troubled areas around the globe. Somali waters and the Indian Ocean, for example, are witness to a succession of warships from a wide spread of nations prowling those seas, and in addition providing cover for the multitude of container ships and bulk and general freight vessels passing through.

What however of those craft dedicated to supplying impoverished and suffering populations? Who do they belong to and how are they paid for? Some of the answers can be found this week with the confirmation that the UN World Food Programme (WFP) has, together with BIMCO, updated and modernised the WORLDFOOD voyage charter party used by the UN organisation to transport food to emergency areas around the world. On any given day, WFP has 20 ships on the move, delivering food and other assistance to those in need.

BIMCO is the world's largest international shipping organisation and represents almost 60% of the world's commercial fleet. The organisation creates standard contracts for the global shipping industry, to improve efficiency and reduce legal disputes. Other members of the WORLDFOOD drafting team were Jean Pierre Laffaye of LD Bulk, Torsten Klüver of Aug. Bolten, Carina Nilsson of WFP, Ottmar Schulte of WFP, Leo Fileti of Banchero Costa, and Judy Binnendijk of the Britannia P&I Club.

A charter party Bill of Lading is issued by the charterer of the vessel, as opposed to the vessel owners, and generally not in such common use as a standard B/L, as the owners of the vessel often have the right to lay claim to the cargo aboard the ship should there be a dispute between charterer and vessel owner meaning banks generally refuse to accept such B/Ls as collateral for loans, or for payments under a letter of credit. This of course is hardly the case with a United Nations charitable operation hence the need for a contract specific to the needs of the WFP.

The aim of the updated new contract was to make it easier and faster for the WFP, the previous edition of the WORLDFOOD charter having been published in 1999, and while the mandate of the UN humanitarian organisation remains to fight hunger globally, commercial practice and the law have changed since then. The focus of the drafting team was to bring the charter up to date to reflect current commercial practices and legal developments. The opportunity has also been taken to add clarity and remove ambiguities, which in turn will save time during negotiations. Anna Wollin, Manager, Contracts and Clauses at BIMCO commented:

"We have been very pleased to work on a standard contract for the WFP that helps them complete their mission, but also to fulfil the shipowner's requirements, so that our members can help deliver aid in the most efficient manner possible.”

The WFP assists 80 million people in around 80 countries each year, and is the leading humanitarian organisation fighting hunger worldwide and Mr Loutphi Madani, Senior Legal Officer of the WFP observed:

"The WORLDFOOD charter is an essential tool for the WFP as the majority of food that we deliver is transported by chartered ships at sea. It is crucial that we have a charter party that gives us the flexibility required when operating in volatile areas of the world. BIMCO's input and support during this drafting process has been invaluable.

Explanatory notes and sample copies can be found on BIMCO's website and the WORLDFOOD 2017 charter party and accompanying cargo receipt, WORLDFOODRECEIPT 2017, are now available on BIMCO's IDEA contract editing system.