A Tragedy in the Red Sea AlSalam 98 by

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1 A Tragedy in the Red Sea AlSalam 98 by Iman Seoudi, Ph.D. Director, KCC Assistant Professor of Strategy & Entrepreneurship AUC School of Business Second Responsible Management Education Research Conference Inclusive Businesses AUC, 7-8 September 2015

2 The Journey

3 The Journey Thursday 2 nd February 2006 at 9:00 PM From Duba port in Saudi Arabia to Safaga, Egypt Carrying 96 crew members, 1320 passengers & 220 cars Due to arrive in Safaga at 3:00 AM. 230 km 126 nm

4 The Journey Salam 98 Boccaccio was a roll on roll off ferry (roro) Roros are not very safe because Doors right above waterline Large open space for transporting cargo/cars Free surface effect (tilting if water gets in) Salam 98 even less stable due to 2 new passenger decks

5 A Story of Negligence

6 Disaster Sets In Sparks from A/C catch fire with full car fuel tank Car fuel tanks are supposed to be empty before boarding on roros Crew member on duty below deck no at his post when fire broke out Fire extinguishers were dysfunctional Water hoses used in stead; hence free surface effect; hence tilting

7 Disaster Sets In Captain was told fire is out First engineer ordered opening of garage doors Oxygen fueled the fire which picked up again Captain: use water hoses on the left and drain water from garage 8 out of 12 drainage pumps were clogged

8 Too Late Ship started tilting to the right more & more Passengers all moved left to no avail Captain ordered crew to turn vessel 20 degrees to counter this motion It was too late Al Salam 98 had started its 10 minute descent to the bottom of the red sea

9 Too Late Ship had 10 life boats with capacity 100 people each 88 life rafts with capacity 25 people each It was too late to lower them Passengers would not be able to reach the life boats and rafts from the side if ship had listed 15 degrees

10 The Salam Tragedy

11 Moments of Horror Survivors tell of awful scenes Passengers on left side fell more than 15 meters hitting sections of deck and equipment before falling into water Yelling, screams, huge waves and death everywhere Boat with more than 50 survivors, some of whom suffocated to death All agree: Captain was first in a life boat

12 A Story of Negligence Al Salam was manufactured in 1967 by the Italian company Italcantieri launched in 1970 under the name of Boccaccio Only intended for sailing in domestic Italian waters In 1991, 2 large passenger decks were added to its structure Sold to Al Salam for Maritime Transport in 1999 and renamed Al Salam 98 Boccaccio Egyptian company, headquartered in Cairo, owned by Mamdouh Ismail - former appointed member of parliament, hired by ex-president Mubarak, & member of the board of the Port Authority of the Red Sea

13 A Story of Negligence Lloyd s List: The ferry was sold because it did not meet the requirements of the Stockholm Agreement for such vessels operating in European waters (Maritime Knowledge Center 4) Egyptian law: a vessel that was more than 25 years old would not be given license to operate Al-Salam 98 Boccaccio was 35 years old license was obtained from the Pacific Sunlight Marine Inc. of Panama instead

14 A Story of Negligence Parliamentary inquiry: Life boats were not fit for use Telestar, a subsidiary company, serviced the boats Telestar, owned by a relative of Mamdouh Ismail, had an expired license Pride of Al Salam had also sunk in as a result of a collision, killing 11 and injuring 98 in 2005

15 A Story of Negligence AT SAFAGA PORT Al Salam scheduled to arrive at 3AM No attempts from port to contact vessel when late No distress signals from vessel until moments before going down The RAF (Royal Airforce) rescue operations room in Kinloss Scotland picked up Mayday signal & relayed it to Egyptian authorities through France Al Salam Maritime Transport did not alert the port authorities until 6AM; a full 3 hours after the ferry sunk

16 A Story of Negligence Belated Rescue Operation: Saint Catherine, another ship belonging to AlSalam Maritime Transport fleet sailed by at 6:57 AM Salah Gomaa, captain of Saint Catherine was aware the ferry established radio contact with 3 rd lieutenant Lieutenant reported from life boat about disaster Salah Gomaa relayed the info to company headquarters and Duba port AND CONTINUED HIS JOURNEY.!!!

17 Failure of Leadership Amr Mamdouh Ismail calls Port authority and reports the vessel missing (Not Sunk!!!) This delayed rescue operation even more Helicopter flew over scene 9 AM and dropped life rafts and life buoys Helicopter went back to report to port and launch rescue operation Rescue boats arrived 10 full hours after sinking although wreckage 80km from Egyptian shore

18 The Journey s End

19 The Journey s End

20 The Journey s End Survivors floated hours without food or water in shark infested waters Many died of exposure Out of 1516 passengers and crew: 387 survivors 135 dead bodies pulled from water 994 missing (surely dead!)

21 Chaos & Police Brutality at the Port Families of passengers waited hours in Safaga port and were told nothing After starting protests, riot police was called in Families started throwing rocks at riot police injuring 11 policemen Tear gas was fired at families Red Crescent tried to help families by providing blankets, food and drink

22 The Escape Mamdouh Ismail, his son, and one other executive from the company fled to London, England He paid EGP 300,000 to families of deceased and After a 2 year trial, all parties were exonerated except Salah Gomaa, who was fined EGP 10,000 for lacking compassion The court decision was based on documents presented to court that the ship was free of defects and had valid licences

23 Court s Initial Ruling

24 Through Egyptian Courts The case was appealed on allegations of corruption and forged documentation, as Mamdouh Ismail was well connected to the Mubarak family March 2009, a higher Appeals Court of Safaga sentenced Mamdouh Ismail to 7 years of prison (max. 10 yrs for manslaughter) for negligence Two top executives in company were sentenced to 3 years imprisonment

25 Rewarding the Negligent A Commentator: The company was to receive million in insurance compensation for the sunken vessel It paid compensation for the deceased victims, survivors and car owners, that is a fraction of the compensation considered fair by international law standards. That may leave the company with a few million dollars as a reward for its negligence!

26 What is responsible business? What is inclusive business?

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