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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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- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
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