The marine insurers for cruise ships which may have the faulty fire-resistant Paroc panels are demanding transparency that cruise lines / ship owners disclose which vessels contain the faulty panels, according to Lloyd’s List. The London-based news website for the shipping industry recently published two articles, focusing on the potentially dangerous Paroc fire-resistant panels. The articles address the uncertainty created by the relevant cruise lines’ failure to disclose the specific reasons why the fire-resistant panels failed certification and the names of the dozens of cruise ships which are operating at sea with this potential fire hazard. The articles are:
- Insurers Demand Names of Dozens of Newbuildings Fitted With Potentially Unsafe Fire Panels (Over 40 vessels are thought to have the affected panel installed. Underwriters are not yet clear whether any vessels will need to be recalled to yards under warranty); and
- EU Countries Notified of Decertification of Paroc Fire Panels Finland Confirms (paywall)
We have written several articles about this significant issue, after the Financial Times (“FT”) first reported that the launch of MSC’s newest cruise ship, Explora I, was delayed because the luxury ship had been constructed with faulty fire-resistant panels. The first article published by the FT, titled Luxury Cruise Liner’s Launch Delayed as Dozens of Ships Face Potential Safety Hazard, reported that many dozens of cruise ships and other vessels had been fitted with fire-resistant materials manufactured by the Finnish company Paroc, which is a division of U.S. corporate giant Owens Corning.
The Cruise Industry Downplayed the Danger While Withholding the Identity of the Ships at Issue
Since our initial article, we have seen MSC Cruises and its new brand which is operating the Explora I, Explora Journeys, downplay the dangers of the failed certification of panels. The manufacturer / supplier (Paroc) and the shipyard (Fincantieri) have stayed mum, refusing to respond to inquiries regarding the names of the ships with the defective materials. Meanwhile, the cruise trade organization, Cruise Line International Association (CLIA). touted the cruise industry as having the health and safety of its guests and crew as its highest priority, despite the fact that the public has been denied basic information regarding which cruise ships (currently sailing with many thousands of passengers and crew members) have the potentially dangerous materials installed.
Following the delivery of the Explora I (in less than just two weeks after the problems were first made public), FT, in a follow up article on July 21, 2023, reported that the shipbuilder stated that it allegedly replaced Paroc’s products with other insulation material “where possible” and “doubled the insulation where necessary.” Meanwhile, the ship owner / operator and shipyard have generated a media frenzied surrounding the new ship which is now sailing on its initial itineraries. Travel writers gush about such things as the elegance of the decor while avoiding any mention of whether the faulty Paroc panels were all replaced as would be prudent.
Underwriters Are Demanding Transparency From the Cruise Industry
Lloyd’s List reports that marine insurers are continuing to seek the names of all ships fitted with the Paroc panels and are “demanding transparency as they assess how much the fallout will cost.” Although it’s possible that the replacement costs may be limited, the underwriters are obviously concerned with the possibility that “dozens of ships will need to be recalled to have existing panels stripped out and replaced, at considerable expense.”
The marine underwriters appear to be understandably nervous about being kept in the dark regarding the identity of the vessels involved. The insurers are seeking the “names of dozens of vessels that may have to be recalled to have equipment stripped out.” Lloyd’s List added that “insurers are known to be keen to know the names, but have so far not been given the identities of the ships at risk.”
The Lloyd’s List articles confirm that Finland’s transport agency (Traficom) was made aware of the withdrawal of the safety certification of the Paroc fire-resistant panels and that all European countries and flag states, shipowners, and shipyards have been notified. However, a representative of Traficom refused to provide Lloyd’s List with the identity any of the 45 or so other vessels with the Paroc materials, stating that “it is up to each ships flag state to give relevant information to the public, if they are willing to do so.”
It appears that underwriters are uncertain not only of the scope of the danger (and the scope of the risk which they have underwritten) but the nature of the failed certification itself. “What exactly went wrong has yet to be established, with only limited details made available to the public.”
Lloyd’s List made it clear that the affected vessels are “mainly cruiseships, ro-ro passengers ferries and yachts” but also include “at least one product tanker and one transhipment barge.”
Paroc’s parent company, Owens Corning, acknowledged the failed certification, stating that: “We have suspended the distribution and sales of these products and have alerted the relevant regulatory authorities. In parallel, we recalled the products and notified our customers.”
Underwriters Want to Avoid a Panic?
The underwriters expressed to Lloyd’s List the desire for “full disclosure” but recognized the shipping industry’s desire to deal with the issue discretely rather than in public. The insurers also seemed to recognize the cruise lines'”obvious desire to minimize the kind of publicity that could deter cruiseship bookings.”
One insurer with what was described as having a “substantial exposure to cruiseships” informed Lloyd’s List “we don’t know which the other ships are, but we will be inquiring. Gently, because we don’t want to create a panic.”
Business As Usual for Cruise Lines and Travel Agents
Meanwhile, travel agents are continuing to sell cruises on the heavily marketed new ship without a clear disclosure whether the fire hazard has been abated.
More importantly, the public and crew members are sailing on many dozens of other cruise ships which may contain the potentially dangerous panels without any disclosure by the cruise lines. As we discussed in Which Cruise Ships are Equipped With Faulty Paroc Fire-Resistant Panels? (The Cruise Lines, Product Supplier, Shipyards and CLIA Won’t Say!), major cruise lines like Carnival Cruise Line, Royal Caribbean, Norwegian Cruise Line and MSC Cruises may be operating cruise ships with the faulty panels installed.
Paroc advertises that its product were installed in numerous cruise ships owned by Royal Caribbean, including the Oasis of the Seas, Allure of the Seas, Explorer of the Seas, Mariner of the Seas, Navigator of the Seas and Voyager of the Seas. “250 full truck loads of Paroc products” were used in building the Oasis of the Sea alone, according to Paroc.
It is unknown whether any of the companies operating the 45 ships at sea have any intention of inspecting and testing the panels used in their construction to determine whether they meet fire safety standards. The traveling public has an absolute right to understand this basic safety issue. Unfortunately, the cruise lines are committed to keeping this information secret.
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