In RC racing, many times, particularly at starts and mark roundings, other boats' sails mask your ability to see clearly. Observers may have a clearer view and therefore they can be in a better position to call "contact" along with related sail numbers. In large fleets, it can be difficult to also position yourself in the crowd of skippers, to always get a clear view of your own boat. Observers can be helpful. If they are there to assist, and hear or see contact, then someone has fouled another and one or other boat needs to take a penalty or protest. There's no point in having an observer if there's no requirement for them to do or say anything, hence they "shall" hail contact and the related sail numbers. In the interests of fair play and sportsmanship, unresolved incidents should be dealt with, hence observers are to report them to the race committee.

The use of observers is one of the ingenious ways which the sport of radio sailing has developped to re-enforce not replace self-policing.

Observers are appointed by the race committee and may be competitors. In this way, competitors who are not sailing in a heat are fulfiling part of their role to enforce the rules under the basic principle of sportsmanship and the rules.

Sailing has been a non-contact sport at least since 1997. If there is contact between boats a rule has been broken. Contacts are relatively frequent in radio sailing, but most contacts do not cause damage. Also, incidents evolve rapidly at considerable distance.
The principle adopted in radio sailing is that a breach of a rule without contact can be resolved by the boats/competitors involved, who may not even wish to complain.. However, it is generally agreed that when there is contact then the incident needs to be resolved. 

The observers:
-  inform the whole fleet that there has been a contact;
- record what they saw of the incident;
- record whether the incident was resolved by one or more boats taking a penalty;
- if the incident is unresolved they report the incident to the race committee;
The race committee may then protest both boats. The observer can be a witness during the protest procedure.

In order to reduce the number of protests radio sailing has developped a SYstem for Reducing the Number of Protest Hearings (SYRPH). In this system all parties to a protest can read the protest itself, see (or hear) the observer's report of the incident before deciding ether to retire or proceed to a hearing. In a multi-fleet race there can be a considerable difference in the score for RET and DSQ;

In addition, when racing is umpired, each observer works with an umpire, providing invaluable information during racing. An umpire may base a decision to penalise a boat based on information provided by an observer.

The role of observer is not negligible. Observers are part of a well-developped system that ensures that racing is fair for all, the rules are followed and end=forced, withoutlosing too much time on hearings.

Johan, I think Tim and Gordon have probably answered your question but I think it would be useful to read Radio Call Book Calls O1 and O2 for radio sailing authoritative interpretations. https://www.sailing.org/tools/documents/WSCallBookforRadioSailing-%5B26938%5D.pdf
In particular O2 states “Unless the observer is certain beyond reasonable doubt that contact has been made, he should not announce it.” Page 27.

Gents, thank you for your input. The Radio Call Book O1 also proved helpful, thanks Bob!

Lets see if I understand you correctly... The requirement for observers to call boat-on-boat contacts is that, when the observer is confident contact occurred, it is then clear that one or both boats have broken one or more rules. The requirement is there to remove the need for the observer to decide whether to report it or not; he must. It is then up to the RC to protest neither, one or both boats.

I'm still not clear on the actual need to hail the boats. The RC can protest any boat and does not have to hail the boat at the time of the incident (as another boat is required to do; E6.3). It can protest a boat for making contact without an observer having hailed the boat at the time of the incident. So from a formal RRS point of view, the hail by the observer adds nothing. If that's the case, then my impression of the need to hail the contacting boats (and the purpose of the boat-on-boat part of E5.1b) is simply to put pressure on the skippers to do a penalty if they believe they were not the right-of-way-boat. I sincerely hope it is not intended to put pressure on the other boat to protest, as he is not required to do so.

The observer is not required to hail boats involved in any other kind of unresolved incidents. Indeed, if an observer or RC were to hail a boat that failed to round a mark, then in my experience other skippers get very angry. Mind you I can't find a rule that prohibits them from doing so, just E2.2 (but observers and the RC are not "competitors", right?).

The reason for this post is the number of times I have heard boat-on-boat contacts being hailed with no subsequent protest being raised by the RC. Every time that happens the purpose of the hail diminishes just a bit; why bother if no hail leads to any protest?

Johan,

Why the hail instead of an RC protest at the end of the heat? Because the ethos of radio sailing is to reinforce self-policing not replace it. By hailing the observer signals that a rule has been broken, so that either boat can resolve the incident by taking a penalty. A boat takes a turn and carries on racing. This is surely preferable for all concerned rather than waiting till the end of the heat, initiating a hearing, taking up time that could better be spent racing.

Observers also note incidents not involving contact, and record whether, after a protest, aturn is taken.

2points:
 - with a multi-heat system some hearings need to be heard before racing can continue. Radio sailing has developped porcedures to reduce the number of hearings - this is one of them.
- sailing is a sport:  a game, competition, or similar activity, done for enjoyment or as a job, that takes physical effort and skill and is played or done by following particular rules: At present radio sailing is an amateur sport.So the objective is ennjoyment. By assisiting competitors to sail accoding to the rules, and reduce the time spent in off the water procedures, the practice of observing contributes to makig our sport more enjoyable for everyone (except, of course, the judges who get to spend less time in the protest room).