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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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Thursday, 07 May 20
CRUDE OIL TANKER EARNINGS DROP 68% IN NINE DAYS - BIMCO
Crude oil tanker earnings have come down sharply in recent weeks with Very Large Crude Carrier (VLCC) earnings from the Middle East Gulf to China d ...
Thursday, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
...
Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
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