Marine Transport in Offshore Wind Development Projects
Summary
Marine or sea transportation is a critical phase of any offshore development project.
Whereas onshore construction of e.g. a turbine can be considered almost a “commodity”,
offshore transportation is prone to risk and uncertainty, and care must be taken when
drafting or interpreting the contract clauses governing the parties’ respective liability.
This article provides an overview of the most important factors to be considered.
Background
Although the cost of sea transportation amounts to typically no more than 10% of the total
cost of an offshore wind development, it is a phase with relatively large risks of damage to
the goods transported (such as turbines, blades, towers, foundations/substructures,
transformers etc.) as well as risk of injuries to personnel, damage to third parties and
damage to the environment.
Therefore developers and operators that are ultimately responsible for the development
project must focus their attention to sea transportation issues.
As a starting point liability for such damages as described above will be determined by 1)
the rules applicable to sea transportation, notably the Danish Maritime Act, and 2) any
contract entered into between the relevant parties, such as the developer of the project,
his building contractor and the responsible carrier or ship-owner.
Under §322 of the Danish Maritime Act the liability rules of the Act do not apply where
other agreements have been made between the parties.
Establishing the best possible liability regime when negotiating contracts requires that
attention is turned to at least three principal issues, namely
1) The contractual relationships - now and what is expected in the future
2) The possible types of losses and damages that can be foreseen
3) The type of liability regime envisioned
These factors must also be considered when interpreting an already existing contract.
1)
The contractual relationships
The fabricator will typically have a sub-contract with a carrier of the goods (a shipping
company/ship-owner) – see figure 1. on the following page. Alternatively, the contract
may be entered directly between the developer and the shipping firm, as set out in figure 2.
on the following page (and may then subsequently be assigned/novated to the fabricator).
Page 1 of 3
1.
2.
There is no firm rule as to which model serves the operator’s interests better – it all
depends on a number of factors. With the fabricator securing sea transportation, there is
only one party responsible, and only one party for the operator to monitor. With the
operator himself securing the transportation, there is more coordination, however also
more control, for the operator.
2)
Potential losses and damages
In addition to several types of contractual arrangements, there is a multitude of damages
and injuries that may potentially occur:
-
Injuries to personnel onboard the vessel / barge
Damage to the goods being transported
Damage to the vessel / barge itself
Damage to any other seagoing vessel (e.g. in a collision), and injuries to its
personnel or damage to goods onboard such third-party vessel
Damage to installations, such as other platforms, buoys, foundations etc.
Pollution of the environment, e.g. from the vessel’s bunker oil
What is essential in an offshore wind development project is that potential damages and
losses are considered prior to establishing the liability scheme. A sound and realistic risk
assessment should be made, based on a number of factors involved in sea transport:
-
The time and season of the year, and the specific waters in which the goods are
transported (wind, waves, ice, etc.), including the distance to be travelled
Vessel stability, design loads (i.e. the barge/vessel specifications, compared to the
goods’ weight and dimensions)
Also, the risk assessment should be fully aligned with the insurance programme and the
performance of marine warranty surveys as well as certifications/guidelines for marine
operations issued by e.g. DNV and regulatory bodies.
3)
Liability scheme
The exact liability scheme found in a sea transportation arrangement may also differ from
the various standard contracts and charter parties. Typically, the sea transportation will be
carried out under a contract or charter party that may contain
-
either a knock-for-knock regime (each party bears his own losses/damages, in
principle irrespective of fault or negligence),
a traditional fault-based regime, or
any combination hereof.
Page 2 of 3
The agreement governing the sea transportation, e.g. a charter party such as BARGEHIRE
2008, should not be considered alone, but should be reviewed in the light of the other
agreements governing the entire project, such as the fabrication contract and/or the
offshore installation contract.
Contrary to oil and gas, the offshore wind industry has not embraced the knock-for-knock
principle across the board. Therefore, often a multitude of different liability systems are
found in development projects, e.g. the fault-based regime in FIDIC or AB 92 for the
fabrication, a comparable regime in the charter party for the sea transport, and a knockfor-knock clause in the contract (or charter party) governing the offshore installation.
Some of these regimes do not co-exist well. For instance, a fabrication contract based on
FIDIC, under which the contractor shall provide sea transportation, will contain a faultbased liability regime. If the offshore installation contract contains a knock-for-knock
provision (which many do, e.g. the Supplytime 2005 charter party for offshore service
vessels), and the offshore installation firm accidentally damages the contractor’s barge
while working at the offshore site, principally the operator may ultimately be left to
compensate the contractor or barge owner, despite the installation firm’s fault (since there
is no knock-for-knock with the contractor and he – in relation to the installation firm –
may be a part of the operator’s risk zone or “family” of parties, for which the operator is
responsible under the knock-for-knock provision with the installation firm).
So, again, care should be taken when drafting the liability clause for the marine operation
and transportation part of the project – considering both the contractual relationships and
the potential risks.
For further information regarding the above, please contact Bo Sandroos on +45 40 88 54 22.
Page 3 of 3