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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, 06 February 20
CHINESE DEMAND KEY UNCERTAINTY FOR SEABORNE COAL MARKET IN 2020 - THE BRICS POST
Coal trader Noble Resources head of research Rodrigo Echeverri Cardozo had penciled in a 3 Mt drop in Chinese import demand for 2020, but it could ...
Wednesday, 05 February 20
CORONAVIRUS AND THE SHIPPING INDUSTRY - WATSON, FARLEY & WILLIAMS
The continued spread of Coronavirus and governmental measures to minimise the impact is likely to affect the shipping industry and supply chain.
...
Wednesday, 05 February 20
INDONESIA'S COAL PRICE REFERENCE UP 1.46% IN FEBRUARY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 05 February 20
MARKET INSIGHT - INTERMODAL
The oil and gas industry benefitted from a strong and solid ground in the previous year. We witnessed a slow but steady increase in bunker’s ...
Wednesday, 05 February 20
RUSSIA EXPORTED 28.6 MLN TONNES OF LNG IN 2019 - REFINITIV
A lot of attention has been paid recently on the surge in LNG exports from the United States. However, another country which is seeing truly expone ...
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- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- The Treasury - Australian Government
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