ABSTRACT
The International Safety Management (ISM) Code was adopted by the International Maritime Organisation (IMO), as Resolution A.741(18), on 4 November 1993, and was incorporated in the Safety of Life at Sea (SOLAS) Convention 1974, as Chapter IX, in 1994. It became operative in Australia on 1 February 1998 by virtue of Marine Orders Pt 58 O 2 of 19981( made pursuant to s 425(1AA) of the Navigation Act 1912 (Cth) even though ss 187ff of the Navigation Act allows the Regulations to give effect to SOLAS and its subsequent amendments. The ISM Code does not replace existing conventions relating to shipping. It requires the development of a Safety Management System (SMS) to regulate the total operation of a ship. Included in the SMS is compliance with any other conventions applicable to that ship.2 ISM Code
compliance, is now required by insurers, in certain policies, as a condition of insurance. This paper examines two discrete questions which arise from the reliance placed by insurers on the certification of a Australian-flagged ships in accordance with the ISM Code. Such an examination necessarily involves an initial analysis of the obligations of the various parties under the code. The principal obligation on the company is to appoint a ‘designated person’ on board each ship who is to ensure that the ship complies with the ISM Code. This raises the question of whether a failure by the designated person to properly implement and/or maintain the ship’s SMS will enable an insurer to avoid a policy for breach of warranty by the company. The second issue which will be addressed is whether the insurer could successfully bring third-party proceedings against the certificating authority, namely the Australian Maritime Safety Authority, in circumstances where such certification was negligently given.
