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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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Friday, 22 November 19
UNCERTAINTY IN THERMAL COAL MARKET PERSISTED IN 3Q19 - ADARO
Uncertainty in thermal coal market persisted in 3Q19, mainly due to the actions, or inactions, of China in setting policies for global coal market. ...
Friday, 22 November 19
CIL TO DEVELOP 55 NEW COAL MINES IN NEXT 5 YEARS: COAL MINISTER
State-owned CIL will develop 55 new coal mines and expand 193 existing ones in the next five years, Parliament was informed. The company is also un ...
Thursday, 21 November 19
4TH DEEP OFFSHORE WEST AFRICA CONGRESS 2020
4th Deep Offshore West Africa Congress 2020
17 Janaury 2020
Accra, Ghana
Press Release: Following the great succ ...
Thursday, 21 November 19
INDONESIA PLANS TO KEEP $70/T COAL PRICE CAP FOR PLN, DMO - REUTERS
Indonesia’s energy minister Arifin Tasrif said his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT ...
Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
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- MS Steel International - UAE
- Australian Coal Association
- The Treasury - Australian Government
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Planning Commission, India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
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