With significant delays in newbuilding deliveries due to the coronavirus pandemic, the IMO has suggested flag states may provide a waiver for the Goal-based Standards (GBS).
In a circular letter published this month, the United Nations body acknowledged newbuilding delays in member states due to difficulties faced by shipbuilders, equipment suppliers, shipowners, surveyors and service engineers.
As a potential solution, the IMO cited a resolution dated 2013 that said flag administrations can allow exemptions to International Convention for the Safety of Life at Sea (Solas) when newbuilding deliveries are delayed “due to unforeseen circumstances beyond the control of the shipbuilder and the owner”.
Solas covers the GBS, a set of safety, environmental and security standards for bulkers and tankers of 150 metres in length or more.
The shipbuilding rules apply to newbuilding contracts from July 2016 and deliveries from July 2020.
In practice, classification societies generally examine whether the newbuilding standards are met on behalf of flag states.
When contacted, an IMO spokeswoman said essentially flag states should determine whether any exemption can be grated on a case-by-case basis.
A good relief
Clyde & Co described the IMO circular as “welcome guidance” to shipbuilders and shipowners affected by the pandemic.
“It is now apparent that vessels delivered after 1 July 2020 which are not compliant with the goal-based standards may be able to be accepted,” the firm’s lawyers Paul Collier and Kevin Au said in a joint note.
The note added impacted parties should collect evidences proving the construction delays are caused by the Covid-19 outbreak, including formal government reports whenever possible.
The IMO circular came after China Association of the National Shipbuilding Industry (Cansi) in February warned many vessels under construction at Chinese yards could fail to meet the GBS.
According to the largest trade group of Chinese shipbuilders, many newbuilding orders were not designed based on the GBS.
“They were originally due to be delivered by July, but it’s highly likely that the deadline would be missed [due to the pandemic],” Cansi said.
Barring any exemption, the ships would need to be modified to comply with the GBS if delivered after 30 June.
In such a scenario, Cansi said newbuilding deliveries could face even longer delays, possibly leading to the cancellation of orders and heavy compensation costs for shipyards.
