A dark underbelly exists in Indonesia’s thriving trade with China. Since late 2010 five ships loaded with Indonesian minerals have sunk when bound for China, with huge loss of life. Little has been done to break the deadly trend. Indeed, plenty of interests have an incentive to hush it up. The latest ship to founder is the Harita Bauxite, a bulk carrier which sank on February 17th near the Philippines. Of its 24 crew, who were all or mainly from Myanmar, ten were rescued, one of whom later died. Fourteen were still missing when the search was called off two weeks later.
The vessel is thought to have been carrying nickel ore, a potentially deadly cargo, loaded on Obi island in the remote Indonesian province of Muluku and destined for China’s steel mills. In terms of the global bulk trade, shipments of nickel ore from Indonesia to China are tiny: just 2m-3m tonnes out of more than 4 billion tonnes of bulk goods carried each year on over 9,000 vessels. Yet this backwater trade accounted for four of the 20 bulk freighters lost worldwide during 2010-11, and for 66 of 82 deaths, according to Intercargo, an association of ship owners.
ll four ships were found to have sunk because the cargo had liquefied. Nickel ore is dangerous because if it gets too wet, the fine, claylike particles that are often present in the ore turn the cargo to a liquid gloop that sloshes about the holds with such momentum that even a giant ship can capsize. The four ships had loaded during Indonesia’s rainy season. The ore is typically stockpiled in the open. Quite how the Harita Bauxite foundered is not yet clear, but if liquefaction was a factor, as many in the shipping industry suspect, it will have been another entirely avoidable tragedy.
Preventing liquefaction should be fairly simple. It involves checking the moisture content of susceptible commodities. If they are too wet, a surveyor will deem the cargo unsafe and not to be loaded. Time and again in Indonesia, checks have been inadequate. With the bulk-shipping business in the doldrums, the profitable nickel trade is a siren call for ship owners and charterers. Indonesia’s ministers and mandarins in Jakarta, the capital, refuse to comment on the tragedies and have done little to tighten policing at faraway ports in Sulawesi, Muluku and Papua.
Ship captains report intimidation by miners and agents if they refuse to accept cargo. A leading marine insurer says the ports’ remoteness makes it hard to sample cargoes reliably. Local officials turn a blind eye to unsafe practices. Peter Lundahl Rasmussen at Bimco, a maritime association, says surveyors trying to do their job have been assaulted or arrested.
With insurance claims mounting, shipping bodies and insurers have issued plenty of instructions about how to load nickel ore safely, especially in Indonesia. The International Maritime Organisation (IMO), the UN agency responsible for shipping safety, is also taking steps to tighten the regulations for commodities that can suffer liquefaction.
But the IMO’s process is a glacial one, and the new rules will not clear its various committees and be promulgated until at least 2015. Even then, the organisation relies on its members to enforce regulations. In Indonesia, in other words, the impact of tighter rules may be minimal. Moreover, existing and planned legislation covers ore depots and the ports, but not the transit between the two, where rain may do its dangerous work. Steve Cameron at RTI, a risk consultancy, argues that it would be more effective if mining companies faced charges of corporate manslaughter for not ensuring that their ore reaches ships in good condition.
Shipping: Deadly Trade, Economist, Mar. 23, 2013, at 46.