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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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Wednesday, 04 December 19
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Dry bulk freight rates rebounded last week, a development that came as a relief following the recent negative sentiment that prevailed in the marke ...
Wednesday, 04 December 19
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Indonesia is reviewing rules that require coal miners to sell a portion of their coal to local buyers, a government official said on Monday, as sup ...
Tuesday, 03 December 19
STABILITY AND COMPATIBILITY OF VERY LOW SULPHUR FUEL OILS - GARD
In order to meet increasing restrictions on the sulphur content in marine fuel as defined by MARPOL Annex VI Regulation 14.1.3, the characteristics ...
Monday, 02 December 19
COAL PRODUCTION IN INDIA UP BY 164.58 MT IN 5 YEARS - BUSINESS LINE
Raw coal production in the country has increased from 567.77 million tons (MT) in 2013-14 to 730.35 MT in 2018-19, Union Coal and Parliamentary Aff ...
Monday, 02 December 19
OPEC PREPS FOR OIL'S 2020 BALANCING ACT - WOOD MACKENZIE
What steps should OPEC and its non-OPEC partners take to keep the market in balance in 2020? Ahead of OPEC’s meeting in Vienna on 5 and 6 Dec ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
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