Building superyachts in China

China Yacht Build Considerations

Over time the options to build superyachts in Australia have become limited, with many factors favouring an international build. Where European countries such as Italy or the Netherlands have been preferred in the past; Asian nations are showing their prowess in producing high quality vessels. Given Asia’s geographical positioning to Australia it also makes sense to consider our Asian neighbours over the long haul to Europe.

Recently, an Australian client who was considering a build in China approached my firm. Being their first build they were concerned about the numerous issues relating to Australian standards and the processes in general of such a build. Importantly, given the cultural and linguistic differences, they wanted to have a good understanding of the difference between vessels built for recreational and commercial purposes before entering into negotiations with the designer/naval architect and builder. And they were also were confused about the role of the naval architect and marine surveyor. Set out below is an overview and summarised understanding of what Australian standards are required and the roles of players in this process.

Naval architect versus marine surveyor

Typically, a naval architect drew up lines plans (the skeleton shape) of a vessel from the client’s instructions/artist impressions and half block model. These lines planes and information the client provided such as; use and number of people expected on board then formed part of the hydrological stats such as: displacement, maximum load, role periods etc. and are used in ensuring the vessel conforms with commercial vessel requirements or alternatively ensuring the vessel performs to the owner’s expectations.

However, the role of the naval architect has broadened to include drafting internal and external layouts through to attending the shipyard to ensure the vessel meets the client build standards. And in some cases the naval architect is also qualified to undertake commercial vessel surveys. In essence, the range of services provided depends on the individual level of expertise, interests and notoriety in the market place.

Whereas, a marine surveyor’s role is generally more limited and may include surveying vessels for the following purposes: pre-purchase, insurance pre-contract, sea-worthiness, commercial compliance, accident surveys, new build survey and compliance checks to meet specific marine standards to name a few. Marine surveyors will need to be accredited and recognised by the regulatory body to whom they report. Having said this, shipwrights often survey non-commercial vessels for pre-purchase and insurance purposes and these survey documents are not required to meet specific marine build standards, simply reporting on what they see. From a legal perspective, an accredited Marine Surveyor is an appropriate body to survey the vessel for the purposes of providing a report to have the vessel ‘in-survey’.

Recreational purposes in Australia

Interestingly, for a superyacht to operate solely for recreational purposes there is no Australian requirement for standards. However, it is advisable that these yachts be built to a standard, as they tend to be flagged and sailed outside of Australian Waters. Additionally, the extra cost incurred in building to a standard when compared to the total of the build is small this intern opens up the whole international resale market as well as commercial options, not limiting the vessel to the recreational market place in Australia.

A large superyacht (>24 metres) operating as a domestic commercial vessel in Australia

There are several standards that can be used to build vessels to a commercial standard, such as Lloyds and while some designers or builders may have a preference, typically these standards are going to meet the minimum standards or better of the LY3 code in Australia. (Large Commercial Yacht Code as modified by the LY3 Australian National Annex)

The process that must be followed for a superyacht to operate as a domestic commercial vessel is that it must have a certificate of survey. For a vessel to obtain a certificate of survey it must be built to the following standard:

  • National Standard for Commercial Vessels Part C Design and Construction (the National Standard)

The Certificate of Survey certifies that the vessel complies with National Standard for Commercial Vessels.

Additionally, if the superyacht leaves or intends to leave the Exclusive Economic Zone (EEZ) of Australia or is going overseas, the vessel will also need to satisfy the standard in the Navigation Act.

A small yacht (<24 metres) operating as a domestic commercial vessel (“DCV”)

For a small yacht to operate as a Domestic Commercial Vessel is must have a certificate of survey unless it is exempt from survey under the Marine Safety (Certificates of survey) Exemption 2016. 

However, if a yacht is exempt from survey, it must still comply with:

  • National Standard for Commercial Vessels Part G Non-survey vessels

If it is not exempt it must comply:

  • National Standard for Commercial Vessels Part C Design and Construction

The small yacht standard used for recreational purposes

For a yacht less than 24m that are used for recreational purposes the only build standard required from a legal perspective is:

  • The National Standard for The Australian Builders Plate for Recreational Boats 

Interestingly, given the nature of Australian waters and weather regulatory bodies have not adopted the European CE Certification despite the European CE Standards exceeding those standards outlined in the Australian National Standard. The European CE Certification is applied to recreational vessels entering or being sold in the European Union. In Europe manufacturers must test and document to ensure conformity to all applicable European directives and requirements. CE certification is obtained from Notified Bodies, organizations that are recognized by European states to conduct CE assessments and issue CE certification documents. However, while the CE certification is a higher standard than the Australian Builders Plate for clarity, CE Standards do not apply to superyachts with the common standards being:

  • Lloyds Rules
  • SOLAS (for superyachts over 500 Gross Tonnage)
  • LY3

CE certification: large versus small vessel

The CE standards and the National Standard for The Australian Builders Plate for recreational boats use the hull length to determine a vessel’s category.  The hull of a vessel is measured according to ISO 8666. It excludes parts that can be detached in a non-destructive manner such as swimming platforms. Therefore, the hull length of the vessel is unlikely to include a swim platform. This length should be the length affixed to the Builders Plate. However, the length of a vessel is different for the purposes of DCV’s under the National Standard for Commercial Vessels. For the purposes of complying with National Standard Commercial Vessels, the method of calculation of a measured length of a vessel is found in:

  • Schedule 2 of the National Standard for Commercial Vessels Part B General requirements. In summary, the calculation is:

The measured length of a vessel is the greater of:

(a) the length on deck, in metres (LD); and

(b) 0.96 times the length overall, in metres (LOA).

Additionally, the length of a vessel in accordance with the National Standard for Commercial Vessel’s is unlikely to include a swim platform.

Electrical Standards

Apart from the build standards that are briefly discussed above, singularly the most controversial and misunderstood area of standards are electrical standards. From a practical build perspective getting this right from the start will save much costs and stress in the future. For all categories of vessels less than 50 metres electronic installations need to comply with:

  • AS/NZS 3004.2:2014 – Electrical installations – Marinas and boats – Part 2: Boat installations, unless exempt by:
  1. National Standard for Commercial Vessels Part C Design and Construction Section 5 Subsection 5B (Edition 2)

Importantly, a certified electrician will be required inspect and to sign off on the installation of all electrics providing the required certificates.

China Classification Society recognition in Australia

If building in China the vessel will have to be surveyed to ensure it meets the regulatory standard and while and Australian Maritime Safety Authority (AMSA) recognised surveyor may be considered in respect to the Australian standards, the China Classification Society is also a recognised organisation identified in Schedule 1 of Marine Order 1 (Administration). This means it can it can certify compliance with all Australian standards including the more onerous LY3 Code and practically may be an easier option.

If your considering selling your recreational vessel in Europe or you want to open up the potential for this market place as an option then CE certification is required. In these respects the China Classification Society may be considered to complete the conformity assessment as all goods (including yachts) must bear the CE Mark. The methods of the conformity assessment depend on the length and use of the yacht. If the hull is between 2.5m and 12m requires an internal production control plus tests to comply. For vessels above 12m and less than 24m, it requires a notified body carry out a conformity assessment to formally bear the CE Marking.

In essence, the process is complicated and before you dive into a new build regardless of who the builder or designer will be, a lot of planning and consideration needs to occur. Especially, if you’re considering an international build where cultural and linguistic differences may become a barrier. Surrounding yourself with experts and critical thinkers is very important as the romance of the though of the new vessel is often bound with emotion.