Issues arising from non-compliance

Written by Nicola Cox, Head of Defence.



What happens if compliant bunkers are not available and the vessel has to burn non compliant fuel. As an owner, what do I need to do and be aware of? 

Under MARPOL Regulation 18, if a ship is found not to be in compliance with the standards for compliant fuel oils, the ship may be required to:

1 present a record of the actions taken to attempt to achieve compliance; and
"2 provide evidence that it attempted to purchase compliant fuel oil in accordance with its voyage plan and, if it was not made available where planned, that attempts were made to locate alternative sources for such fuel oil and that despite best efforts to obtain compliant fuel oil, no such fuel oil was made available for purchase.”

Note that Regulation 18.2 also provides that: “The ship should not be required to deviate from its intended voyage or to delay unduly the voyage in order to achieve compliance.”

Documentation here is key! The crew should ensure that they document all steps taken to source compliant fuel, such as the vessel’s voyage plan/s, daily noon reports regarding the quantity of bunkers on board and the vessel’s daily consumption, emails to bunker suppliers requesting additional compliant fuel, bunker suppliers’ responses and voyage reports sent by the crew to owners’ head office.  It is also suggested that owners consult the GISIS database referred to above in order to investigate the availability of compliant fuel at the intended bunkering port/s.

Owners should also notify Flag state and the port authority where compliant fuel is not available. This non-availability should then appear on the GISIS database referred to above.

Also see the points made in Q1(iv) above.

 

In this scenario, if my vessel is under time charter, what do I and charterers need to do?

Since under a time charter it is charterers’ responsibility to supply bunkers to the vessel, charterers will need to arrange for and stem compliant bunker stems. Close co-operation and communication between owners and charterers will therefore be needed since owners will be reliant on charterers to give voyage orders well in advance, including notice of when and where and the quantity of compliant fuel that charterers intended to stem.  In this scenario, owners should retain email correspondence with charterers requesting voyage orders and details of intended bunker stems.

It is also suggested that a bunker management plan is drawn up by the chief engineer which is given periodically to charterers and which details the available capacity for each of the vessel’s bunker tanks and giving a schedule of which bunkers from which bunker tank/s owners intend to burn for the intended voyage.

How likely is it that authorities will detect that my vessel is burning non-compliant fuel?

It remains to be seen how strictly port state control authorities around the world will interpret and apply the 2020 MARPOL Annex VI Regulation. However, some ports are reported to use drones and other devices to detect vessels which may be burning non compliant fuel. See an example here.

Deliberate non compliance is not an option!

What if a fine is levied against the vessel and/or time is lost with port state control investigating the vessel’s FONAR – is this fine owners’ or charterers’ responsibility?

The fine will be levied against owners. However, assuming that the charter party includes a provision by which charterers are to provide compliant bunkers (for example because the BIMCO clause/s are incorporated) and charterers have clearly breached this provison, owners may have a claim in damages and/or an indemnity against charterers.

In addition, the vessel is likely to remain on hire. See our Offhire in a Nutshell Guide below.



*In this article, bunkers that comply with MARPOL Annex VI, as amended from time to time, and/or by any other applicable lawful authority are described as “compliant bunkers".

Your Experts

Paul Kaye
Paul Kaye
Head of Claims (European Team)
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Tim Davies
Tim Davies
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Dmitry Kisil
Dmitry Kisil
Senior Loss Prevention Officer
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E. Dmitry.Kisil@Westpandi.com