West part of international effort to avoid pollution risk in the Red Sea
On 11 August 2023, the United Nations announced the successful ship to ship transfer of more than 1.1 million barrels of oil from the decaying FSO Safer to a replacement vessel, YEMEN (ex NAUTICA).
The 1976 built FSO Safer is owned by the Yemeni state oil company. Due to ongoing conflict in the region, operations onboard ceased in 2015 and the vessel has been out of class since 2016. States raised their concerns about the pollution risk posed by the FSO SAFER to the United Nations, highlighting the potential disastrous impact to the local ecosystem and people, as well as disruption to ports and shipping lanes to the Suez Canal.
In the first operation of its kind, in 2019 the United Nations requested funds from Member States and started an online crowd funding campaign where individuals could donate towards the purchase of a replacement vessel - YEMEN. Finally, in 2023, funding, expertise and insurance were all in place and the transfer of oil could begin.
West is pleased to be able to play a continuing part in this vital operation through the provision of P&I insurance to the YEMEN, having worked closely with the UN’s brokers, Howden to ensure our cover dovetailed with the suite of other insurances required before this operation could commence.
Due to the condition of the FSO Safer, a cross departmental team was tasked with reviewing the risk of the operation prior to entry. Simon Hodgkinson, Global Head of Loss Prevention, explains:
“Nobody had been onboard FSO SAFER in years and all parties involved understood that an environmental disaster was a ‘not if, but when’ scenario.
Our key concern was the condition of the FSO Safer and the potential risk she posed to the YEMEN and her crew. We had to be sure that her hull was strong enough for the YEMEN to come alongside and that there were adequate resources available in this remote and environmentally sensitive location should pollution occur. While we were committed to supporting the operation, we had to be sure that it was not to the detriment of our Membership.
As the YEMEN would be entered with the Club as a mutual risk, it was extremely important that Loss Prevention took the time to review every step of the proposed salvage plan, surveys, and contingency arrangements to investigate and identify the potential risk exposure in detail prior to providing P&I cover. Ultimately, Salvors and UNDP were able to show that any concerns we had were well addressed in the project plan.
The Loss Prevention team worked closely with Underwriting prior to YEMEN’s entry, but also monitored daily SITREPs throughout the transfer.”
Simon Parrott, Underwriting Director, commented:
“Writing this kind of risk is not straightforward, where the assured is an intergovernmental organisation rather than a traditional owner and there is a dispute surrounding title to the cargo onboard. There were interesting issues of treaty law surrounding the risk, and we had to be creative and flexible. We are delighted that cargo transfer onto the YEMEN has been safely concluded and look forward to the next phase of the operation.
We were pleased to work with our Members Euronav and Anglo Eastern on this project.”
The United Nations project to safely scrap the FSO SAFER at a green salvage yard is still ongoing. There is currently a funding gap of US$22m, which the UN hopes to raise through donations from States and individuals.
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