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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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Friday, 06 March 20
COLOMBIAN COAL OUTPUT FELL 2% IN 2019 - REUTERS
Coal production in Colombia, the fifth-largest coal exporter in the world, fell 2% to 82.2 million tonnes in 2019 after output at one of the princi ...
Friday, 06 March 20
SOLID BACKING FOR LNG AS A MARINE FUEL - BALTIC EXCHANGE
When it comes to choosing the best fuel on the near horizon to help the international shipping industry shrink its carbon intensity by 2050, DNV GL ...
Friday, 06 March 20
INDONESIA COAL PRICE REFERENCE UP AGAIN THIS MONTH
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Thursday, 05 March 20
PANAMAX: SHIP-OWNERS HAVE MOSTLY BEEN GETTING HIGHER RATES THAN THE LAST DONE - FEARNLEYS
Cape
There is still limited amount of positive news around, with the effects of Corona virus hurting world economy. However, overall average in ...
Thursday, 05 March 20
COAL IMPORTS DOWN IN MAJOR ASIAN MARKETS, AND CORONAVIRUS NOT THE DRIVING FORCE - CLYDE RUSSELL
Asia’s seaborne coal markets stumbled in February and it appears the coronavirus outbreak in China may dodge most of the blame, with the weak ...
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- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
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