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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, 18 February 20
ADARO REMAINS POSITIVE ON THE LONG-TERM FUNDAMENTALS OF COAL MARKET SUPPORTED BY THE SOUTHEAST ASIA AND SOUTH ASIA REGION
The global seaborne thermal coal market in 2019 was faced with macro and industry challenges which pushed international coa ...
Tuesday, 18 February 20
CORONAVIRUS AND ITS IMPACT ON YOUR CONTRACT - CAN YOU RELY ON 'FORCE MAJEURE'? - INCE
KNOWLEDGE TO ELEVATE
On 30 January 2020, the World Health Organization (WHO) declared that the outbreak of the Novel Coronavirus (officially t ...
Monday, 17 February 20
IMO-2020 SULPHUR CAP - ISSUES TO CONSIDER PRIOR TO THE IMPLEMENTATION OF THE CARRIAGE BAN ON 1 MARCH 2020 - STANDARD CLUB
With the IMO 2020 global sulphur cap now in force, members should bear in mind another significant date in relation to the ‘carriage ban&rsqu ...
Monday, 17 February 20
COVID-19: THE EFFECT OF THIS PUBLIC HEALTH EMERGENCY ON CHARTERPARTY TERMS - GARD
KNOWLEDGE TO ELEVATE
Is it useful to compare the COVID-19 with earlier disease outbreaks?
A comparison with the Ebola outbreak ...
Saturday, 15 February 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - REUTERS
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Thai Mozambique Logistica
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
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