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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, 05 March 20
SEABORNE COAL'S STRUGGLES IN ASIA ARE MORE THAN JUST CHINA CORONAVIRUS - REUTERS
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 ...
Thursday, 05 March 20
INDONESIA'S BUKIT ASAM 2019 OUTPUT RISES 10.2% Y/Y - REUTERS
PT Bukit Asam, Indonesia’s state-owned coal miner, said on Wednesday its output in 2019 rose 10.2% to 29.1 million tonnes.
Coa ...
Thursday, 05 March 20
SEEING REMOTELY - IN SAFETY: BUREAU VERITAS PERFORMS FIRST SURVEY BY DRONE - BUREAU VERITAS
Bureau Veritas Marine & Offshore (BV), a world leader in testing, inspection and certification (TIC) services has completed its first survey by ...
Wednesday, 04 March 20
AN EPIDEMIC OF UNCERTAINTY - THE CORONAVIRUS AND FORCE MAJEURE - WFW
KNOWLEDGE TO ELEVATE
Do the effects of the coronavirus give rise to legitimate force majeure claims in connection with shipbuilding contracts ...
Wednesday, 04 March 20
CHINA IMPORTED 76.8 MLN TONNES OF CRUDE OIL FOR JANUARY & FEBRUARY 2020; UP 3.4% YOY - REFINITIV | BC
The COVID-19 crisis has been gripping China already for almost two months now. It’s having a huge negative impact on the economy, and this is ...
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- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Chamber of Mines of South Africa
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
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