[SHIPPING] Areas concerned
'Key Views from Relevant Agencies
Key views from relevant agencies - The International Chamber of
Shipping
THE MILLENNIUM BUG
(Circular ICS (98)08)
The circular ICS(97)38 of 17 September 1997 drew attention to the potential insurance implications for the shipping industry of
the so-called "millennium bug", and sought advice from members on the steps being taken by shipping companies to ensure
that ships' systems do not succumb to the widely forecast computer malfunctions around the start of the year 2000. Interest in
the issue has continued, the P & I Clubs having recently approached ICS to co-operate in efforts to publicise the potential
problems.
Press reports continue to emphasise the potential gravity of the problem. At least one major airline has reportedly grounded all
flights on the night of 31 December 1999 because of concerns about air traffic control systems. The cost of dealing with the
problem has been quoted as $600 billion, and one recent column suggested that litigation associated with the problem could be
expected to cost more than the total bill for the First and Second World Wars combined!
Against such portents of doom the secretariat has been considering how it can best assist members, while acknowledging that
it does not have the expertise to offer technical guidance on the subject. The matter will be further discussed at the Marine
Committee meeting on 5 March, and at a meeting with London underwriters on 12 March, but in the meantime a certain amount
of useful background information has been gleaned from the Internet and other published sources. What follows will provide
nothing new to operators already fully seized of the problem, but may act as a spur to companies who assume it cannot happen
to them.
Background
The millennium bug results from the fact that early computers suffered from a serious shortage of memory, and software was
written with that restriction in mind. It was never imagined that these early software systems would still be operable at the end
of the century, and to save scarce memory computers were programmed to recognise only the last two digits of the year in any
date-related data. Therefore after the year [19]99 the following year is recognised as [19]00 not [20]00. The problem is
compounded by the fact that the year 2000 is a leap year whereas the year 1900 was not, so after 28 February the days of the
week do not coincide either. Some equipment may recognise the year 2000, but not the
leap year.
The problem is extensive in scope and can be present at any level within a system, whether located in a shipping company's
office or on board one of its ships, e.g.:
* hardware,
* the built-in operating system (BIOS) in PCs, with machine date;
* operating system;
* development tools and languages;
* application software;
* third party packages and development;
* data interfaces;
* embedded chips;
* data records.
The problem is also unique in that it has a totally immoveable deadline, and every company will need to ensure that its systems
are corrected and operating with Year 2000 compliant software before 31 December 1999 (or, in some cases, earlier dates in 1999).
Shipping companies should be aware that in all probability they will be affected by the Millennium Bug in some way. It is not
just computers that will be affected, but any piece of equipment that contains micro processors (embedded systems) which rely
on dates to function correctly e.g. fax machines, central heating systems etc. Most importantly, shipboard systems and
equipment which may not at first sight seem vulnerable to the problem could well be affected.
Basic Precautions
In the first instance, therefore, the most basic and self-evident advice is that if it is at all unclear whether shipboard equipment
will function or not companies should contact the manufacturer or the manufacturer's local agent now. Furthermore it is
understood that suppliers are still selling equipment which is susceptible to the millennium bug. When purchasing equipment or
establishing new systems, companies are advised to insist on evidence that the equipment is 2000 compliant.
Global Positioning Systems (GPS)
Shipping companies should take special note of a bug particular to GPS Systems. The problem occurs when the 1,024 week time
cycle used by GPS expires at 2400 GMT on 21 August 1999. Some GPS receivers, particularly older ones that have not been
regularly updated, may provide incorrect information after that date. Companies should be urged to contact suppliers of GPS
and related equipment for details of whether modifications are necessary to correct the problem with "GPS Rollover Week", and
whether or not their systems are year 2000 compliant.
Classification Societies and Testing of Systems
IACS has assured ICS that software developed by IACS members, whether for internal use or external distribution, has to be
year 2000 compliant, although IACS does not consider it a viable proposition to require testing of applications used on board
ships.
There is a widely-reported shortage of qualified experts capable of testing systems and replacing chips, which could result in
unprofessional operators entering the market, leaving companies without real knowledge of whether their compliance problems
have been properly resolved.
The Supply of Goods and Services
With regard to the supply of goods and services, in the event that equipment fails to function or perform correctly, purchasers'
legal rights should be the same as they would be under local consumer regulations. In addition to this companies should note
the local time-bars that may apply for making claims. Companies should be advised to check any terms and conditions regarding
year 2000 compliance that are given with equipment at the time of purchase.
Insurance
As implied above, there are indications that insurers may not cover losses that occur as a result of failure of equipment that is
not year 2000 compliant, as it is not considered to be an unavoidable or unpreventable fault. To this end insurers may insist
upon exclusion clauses. ICS will be discussing the matter further with the Clubs and with hull and machinery underwriters, and
companies should be advised to check with their insurers what their position is with regard to liabilities incurred as a result of
faults in equipment that is not year 2000 compliant.
Further Information
An increasing number of websites addressing the millennium bug problem is now appearing on the Internet. Extracts from three
such websites are attached:
* Attachment A - an extract from Action 2000, a UK Government initiative, which provides answers to some frequently asked
questions and provides a basic eight-step plan for addressing the millennium bug problem.
* Attachment B, from the National Computing Centre, contains criteria for the year 2000 software product and system testing.
* Attachment C, from Inmarsat, deals with their "Year 2000" project and five-level compliance matrix.
It is stressed that none of these documents is specifically related to shipping, let alone to ships. But they may provide helpful
guidance on the scope of the problem.
The secretariat has also compiled a list of other information web sites and services/consultants on the Year 2000 problem,
principally located in the UK. A copy can be made available on request, and associations which have compiled a comparable list
either nationally or regionally are asked to
send it to the secretariat (Malcolm Barry) for future reference.
Next Steps
ICS is in touch with other industry technical organisations, including IACS and the association representing engine builders
(CIMAC), to see whether they are issuing any general guidance on the subject and whether it would be helpful to arrange a
meeting of such bodies for an exchange of views.
As stated, talks are also underway with the P&I Clubs and underwriters.
Members will be kept advised of developments, not least on the insurance implications, and any advice members can offer on
aspects of the problem specific to shipping operations would be welcomed by the secretariat for general circulation.
J.C.S. Horrocks
Secretary General
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