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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, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
Tuesday, 18 June 19
TANKER SHIPPING: WHILE WE WAIT FOR 2020 TO KICK IN, IT'S ALL ABOUT POLITICS - BIMCO
Demand drivers and freight rates
Iran, Libya and Venezuela face export limitations because of sanctions and internal political troubles. At the s ...
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- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- The University of Queensland
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Planning Commission, India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Petron Corporation, Philippines
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