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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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Sunday, 22 December 19
TRADING PLACES FOR 2020 - BALTIC EXCHANGE
In the sea of 2020 predictions, Saxo Bank’s Outrageous Predictions sail their own very unique course. For nearly 20 years the Danish investme ...
Saturday, 21 December 19
SUPRAMAX: A 63,000 DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasi ...
Saturday, 21 December 19
SHIPPING'S SUPPLY AND DEMAND TRENDING OFF BALANCE - BIMCO
One of the most worrying trends that has developed recently – which will affect shipping demand in the years to come – is the falling t ...
Friday, 20 December 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 19 December 19
COAL POWER GENERATION CONTINUES TO DECLINE IN GERMANY: DESTATIS, XINHUA REPORTED
The volume of electricity generated in coal-fired power plants in Germany decreased “markedly” by 37 percent to 34 billion kilowatt-hou ...
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- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- White Energy Company Limited
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- The University of Queensland
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
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