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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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Monday, 18 May 20
TAKING ADVANTAGE OF VIRUS DISTRACTION - BALTIC EXCHANGE
As the industry grapples to deal with exceptional Covid-19-related challenges, a deeper threat is coming to the fore. At this time of crisis, more ...
Monday, 18 May 20
THERMAL COAL SPOT PRICE TUMBLES 25 PER CENT, PUTTING PRESSURE ON SOME PRODUCERS - ABC RURAL
The spot price for thermal coal has fallen 25 per cent per cent in the past month with one leading analyst saying it is because of a reduction in d ...
Monday, 18 May 20
CHINA'S COAL OUTPUT UP 1.3 PCT IN JANUARY-APRIL: XINHUA
Output of raw coal in China rose 1.3 percent year on year to 1.15 billion tonnes in the first four months this year, official data showed.
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Sunday, 17 May 20
A 55,000 OPEN ILIGAN FIXING AT $6,500 VIA INDONESIA REDELIVERY INDIA - BALTIC BRIEFING
Capesize
A precipitous fall in the market this week had the Capesize 5TC shedding over 50 per cent in value. A small rebound at the end of the ...
Friday, 15 May 20
CHINA'S COAL CONSUMPTION TO FALL Y/Y IN SECOND QUARTER, IMPROVEMENT EXPECTED IN SECOND HALF - INDUSTRY BODY: REUTERS
China’s coal consumption is expected to decline in the second quarter from a year earlier, but will see an improvement in the second half of ...
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- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
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