Regulations of the People's Republic of China on the Prevention and Control of Marine Pollution from Ships - Update

CIRCULAR REF: 2011/046

CIRCULATED TO ALL MEMBERS, BROKERS AND DIRECTORS

Members are referred to the Association’s circular 2011/041 of 6 December 2011.

Matters have been developing significantly and rapidly in China over the past two weeks.  The International Group have been liaising with many organisations in order to clarify a number of issues and to work towards ensuring, so far as possible, that there are suitable contractual arrangements in place to permit members to be able to comply with the Regulations as easily and efficiently as possible.  We are now attaching at Annex 1 a set of Frequently Asked Questions (FAQs) which have been updated to incorporate known developments up to 22 December.  These FAQs will be posted on the Association’s website in the Industry News section and will be updated as appropriate with further developments when known. 

Whilst the FAQs deal with the issues in some detail the most significant issues of concern to members are as follows:-

• A number of organisations have now entered into alliances with a single company taking the lead. The Association is currently aware of four such organisations in mainland China as follows:-          
• Jufeng           
• Longshan          
• Qianhe         
• Shanghai Resolve Shengmin

In addition OSRO China based in Hong Kong are also offering a service to facilitate an alliance of SPROs in China.

• Although the requirement is that vessel operators should have contracts with SPROs for each of the ports to be visited by a vessel China MSA have now confirmed that they will, subject to the lead SPRO meeting certain requirements, accept that operators sign a contract with only the lead SPRO.
• There have been some suggestions over the past week that operators not domiciled in China would be permitted to contract directly with SPROs without use of an agent in China. However, the latest notice published by China MSA on 22 December makes it clear that an agent in China will have to be employed for the purposes of signing contracts with individual SPROs. It is unclear from the notice whether this requirement applies to contracting with a lead organisation acting on behalf of an alliance of SPROs and the International Group is seeking clarification on this point. In the meantime members that are currently in discussion with lead organisations are recommended to raise the issue with them and ask them to seek clarification from China MSA directly.
• The Association is aware of only two organisations that are offering agency services specifically related to the requirements of the regulations as follows:-          

• Huatai Insurance Agency
• China Marine Services
• China MSA have indicated that there will be no deferral of the implementation date for the regulations from 1 January 2012 for ports that have approved SPROs. However, if an operator is unable to finalise a contract with an SPRO in these ports before arrival of a vessel the MSA may permit entry of that vessel subject to operators providing an explanation to the MSA in advance of arrival as to why it has not been able to conclude a contract. If a vessel is permitted entry in these circumstances a contract will have to be concluded before the vessel departs the port.

The above points are a summary of the main issues and members are referred to the attached FAQs for more detailed information.

As the situation is continuing to evolve the Association will endeavour to post updates on the Industry News section of our website.

Colin Trappe

Director – North Insurance Management Limited

As Managers on behalf of the North of England P&I Association Limited