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Thursday, 02 January 20
SULPHUR 2020 COMPENDIUM - HOW ARE INDIVIDUAL PORT STATES EXPECTED TO REACT? - STANDARD CLUB
 KNOWLEDGE TO ELEVATE
With the new sulphur limits soon to be in force, Standard Club has been investigating the ways in which certain jurisdictions are expected to react to violations.
We contacted our local correspondents from a variety of different ports, including Brazil, China, Denmark, Norway, Panama, Spain and Sweden, to build a compilation of what we believe is useful and practical knowledge for dealing with future sulphur claims.
We asked our correspondents the following series of questions:
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Will compliant bunkers be available in your jurisdiction?
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Which government body or organisation issues fines for sulphur violations?
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What is the estimated potential value of fines?
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Is there a possibility of criminal action for sulphur violations?
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Can a ship be detained for violations? If so, will a club LOU be accepted to secure its release?
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Is it possible to appeal fines?
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What contingency measures are available for ships carrying non-compliant fuel?
The answers to these questions are as follows. If you have questions about any of these jurisdictions, or any jurisdictions which are not listed below, please contact your usual claims handler at the club for further assistance.
Brazil
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Compliant bunkers will be available in Salvador, Sao Luis, Belem and Macapa.
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Fines may be issued by the ANP, IBAMA (the Environmental Authority) or the Harbour Master´s Office at each port.
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The estimated potential fines range from BRL 5,000 to BRL 2,000,000.
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There is a possibility of criminal action for sulphur violations in Brazil.
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A ship may be detained for sulphur violations until it is proved that there are bunkers within specification on board. Acceptance of a club LOU will depend on each individual case.
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It is possible to appeal fines.
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In the event of non-compliance, the Authorities will need to verify that the off-spec bunkers have been segregated on board.
China
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Compliant bunkers should be available in China. However, members should check with local agents and the port authority before calling to confirm availability.
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The local marine authority (the MSA) issues fines for sulphur violations.
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According to the PRC Air Pollution Prevention and Control Law, shipowners may face administrative penalties ranging from RMB10,000 to RMB100,000.
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While this is unlikely, there is a possibility for criminal action in the event of serious violations.
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Ships can be detained, depending on the seriousness of the violation. It is not known whether a club LOU would be accepted.
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Appeals of fines are unlikely to be successful if a violation has in fact occurred. However, owners may apply for a review of the fine if they suspect that the administrative procedures have been incorrectly applied (i.e. there has been no violation).
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From 1 January 2020 if a ship is unable to obtain compliant bunkers she should submit a FONAR to the MSA before entering Chinese waters. From 1 March 2020 if a ship is carrying non-compliant bunkers in Chinese waters they can discharge the non-compliant bunkers, or (subject to MSA approval) retain the non-compliant bunkers on board after providing a letter of commitment not to use these bunkers in Chinese waters.
Denmark
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Compliant bunkers will be available in Denmark.
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The Port State Control and the police both administer fines for sulphur violations.
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Fines for non-compliance can range from DKK 30,000 to DKK 300,000.
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Criminal action may in some cases be brought for non-compliance. Fines are imposed by the police, following penalty proceedings and public court hearings. In cases of gross negligence, or of continuous violation of the sulphur cap, there is the possibility of imprisonment for up to two years.
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A ship can be detained until it has taken the necessary steps to ensure compliance with the sulphur content regulations. Club LOUs will not be accepted to secure release of the ship.
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Fines can be appealed through the usual judicial channels (at the Court of Appeal and potentially at the Supreme Court).
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If the ship is not compliant with the sulphur regulations, it will be asked by officials to demonstrate that it has taken adequate steps to be compliant. The owner will have to demonstrate that they have established procedures on board the ship to ensure compliance. The owner will also have to provide documentation showing their attempts to obtain compliant bunkers.
Norway
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Compliant bunkers will be available in Norway.
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The Norwegian Maritime Authority (Sjøfartsdirektoratet) issues fines for violations.
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The lowest possible fine is around NOK 79,886. Fines are typically around NOK 250,000, although this figure may be higher depending on the degree of negligence and/or guilt.
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Criminal action may be brought for violations.
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Arrest of the ship for violation of the sulphur limits is possible.
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It is possible to appeal fines to the Norwegian Ministry of Climate and Environment.
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In the event of non-compliance, compliant bunkers are available so that the non-compliant bunkers can be replaced.
Panama
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Compliant bunkers will be available in Panama.
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Fines will be administered by the Panama Maritime Authority (PMA) and the Panama Canal Authority (PCA).
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The PMA and PCA will calculate fines based on the perceived seriousness of the violation. To date, there have been no known fines by the PMA or PCA, so it is difficult to say how they will deal with these incidents.
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Currently there have not been any known criminal proceedings relating to sulphur violations.
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A ship can be detained by both the PMA and PCA for violations, although this is seen to be unlikely. The PMA has in the past been vague regarding club LOU’s but the PCA regularly accepts them for other issues.
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Administrative fines are generally unappealable.
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There are limited options for ships to debunker non-compliant fuel at Panama.
Spain
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Compliant bunkers will be available in Spain.
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The Spanish Central Government Authority issues fines for sulphur violations. The Harbour Master’s office belongs to Merchant Marine General Management, which itself belongs to the Government Ministry in charge of public work.
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There is no set figure for fines. Fines are usually around EUR 22,000 although they could be as high as EUR 180,000. In case of wilful actions, the fine could be as high as EUR 600,000. The Harbour Master will ask for a guarantee to permit the ship to sail (club LOUs are not accepted).
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In theory there is a possibility of criminal action, but only if the use of off-spec bunkers was deliberate.
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A ship can be detained for sulphur violations. In such a case, a club LOU will not be accepted. Authorities will only accept a cash deposit, a bond or a bank security issued by a Spanish Insurer or Bank.
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It is possible to appeal fines, but success is unlikely.
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Any non-compliant bunkers on board will be banned, even if not in use, and similar sanctions will be imposed unless the ship has a scrubber in good operational condition. In addition to the sampling of storage tanks, evidence of tank cleaning and a bunker delivery note will also be required on board.
Sweden
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Compliant bunkers will be available in Sweden.
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The Coast Guard will issue fines for sulphur violations.
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The estimated value of fines is still under discussion. However, there is a risk that fines may be high value to deter non-compliance with the sulphur limits.
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There are not expected to be any criminal repercussions for non-compliance, only fines.
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In very extreme cases, ships can be detained for sulphur violations. It is difficult to predict whether the authorities will accept a club LOU in this situation.
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It is possible to appeal fines.
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In the event of non-compliance, there are many well established bunker operators in the region who can handle non-compliant bunkers.
Source: Standard Club
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Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
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- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- PTC India Limited - India
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Economic Council, Georgia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Planning Commission, India
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Australian Coal Association
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
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