Regulations of the People's Republic of China (PRC) on the Prevention and Control of Marine Pollution from Ships: Update

Further to the recent club circulars dated 8 and 24 December 2011 the above regulations came into force on 1 January 2012.  The regulations require the operator of any ship carrying polluting and hazardous cargoes in bulk or of any other ship above 10,000 gt to conclude a pollution clean-up contract with a ship pollution response organisation (‘SPRO’) approved by the Maritime Safety Agency (“MSA”) before entering a PRC port.  

MSA approval of SPRO’s

A list of approved SPROs is published by the MSA on the following dedicated MSA website: www.osp.cn.  Umbrella SPROs/alliances/consortia and agents signing contracts on behalf of operators also need approval from the MSA; a list of approved agents and umbrella SPROs/alliances/consortia (there are currently 5 such consortia) is published on the MSA website: http://msa.gov.cn.

The MSA was unable to publish a full list of approved SPROs in time for the 1 January 2012 deadline but has indicated that if an operator is unable to finalise a contract with a SPRO before arrival of a ship in a PRC port the local MSA office may permit entry of that ship subject to the operator providing an explanation to the local MSA in advance of arrival as to why it has not been able to conclude such a contract. If a ship is permitted entry in these circumstances a contract will have to be concluded before the ship leaves the port.  A number of local MSAs have confirmed that these arrangements will operate until 29 February; after this a contract must be in place prior to the ship’s arrival in port or she will not be permitted entry. 

MSA clean-up contract

The MSA has published a model clean-up contract and the International Group (“IG”) has produced recommended supplemental clauses for inclusion in the contract, a copy of which, with identifier ‘IG Sample Agreement dated 6 December 2011’, was attached to the circular dated 8 December 2011. The IG understands that some local MSAs may be reluctant to accept the IG recommended contract, and members who encounter this problem should notify the club so that the IG may take the matter up with the MSA in Beijing.

Fees and costs

The IG understands that the fees to be charged to operators by the approved SPROs (both retainer and response fees) are not set by the MSA but are subject to negotiation between the SPRO and the operator. The club does not reimburse members for retainer fees. 

Response fees should be listed in the contract between the operator and the SPRO, and must be reasonable. 

Insurance

The IG approved contract requires the SPRO to have insurance to cover its liabilities under the contract. There are still problems with SPROs’ insurance and if an SPRO is unable or unwilling to confirm that they have insurance which complies with the IG approved contract, members should contact the Club to enable the IG to raise the issue with the SPRO. 

IG approval of contracts

It is expected that most, if not all, of the outstanding issues relating to IG approval of contracts will be resolved in the next few weeks.  The club will keep members advised by further updates on the website.  In the meantime, if a member needs to sign a contract urgently which does not comply with IG recommendations, the contract should be concluded on a single voyage basis only, pending resolution of outstanding issues.  

Category: Pollution