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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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Tuesday, 12 May 20
A GLOBAL ECONOMIC RESTART HAS SLOWLY BEGUN AS COUNTRIES AROUND THE WORLD GRADUALLY - ALLIED
A global economic restart has slowly begun as countries around the world gradually set their return back to “normality”. Yet by all mea ...
Tuesday, 12 May 20
CAN INDONESIA'S COAL INDUSTRY SURVIVE COVID-19? : IEEFA
Pandemic Lockdown and Slumping Prices Put Extreme Pressure on Coal Miners
Executive Summary
While attention has been focused on th ...
Tuesday, 12 May 20
INDIA'S COAL PRODUCTION TO CLOCK RECORD 700 MILLION TONNES IN FY21: COAL SECRETARY - PTI
Coal Secretary Anil Jain said FY20 coal production was lower than the target of 660 million tonnes because of flooding of a key coal mine.
&nbs ...
Monday, 11 May 20
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China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Monday, 11 May 20
CORONAVIRUS PUTS MORE THAN A THIRD OF SEABORNE COAL SUPPLY AT RISK - WOOD MACKENZIE
The full impact of the coronavirus outbreak on the global economy is yet unclear. However, the demand destruction is already becoming evident, with ...
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- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- PTC India Limited - India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
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