News 05 May, 2015

China - Pollution - Qianhe Group - Update

As reported in our News Item of 21st April 2015, the Club has been made aware of an issue regarding the Qianhe Group, which provides pollution response - or “SPRO” - services as well as sludge removal in a number of ports throughout China.  Certain investigations are said to be taking place into Qianhe by the customs authority in China.

The International Group (IG) is closely monitoring the situation through its lawyer in Beijing, who is in touch with the China MSA, local MSA and Customs authorities.

As of today, Qianhe remains a qualified and approved SPRO and their status in this regard remains valid and has not been revoked.  However, it appears they are not responding to communications and it is reported that Qianhe personnel and vessels have been detained for the purposes of the Customs investigation, so it is unclear whether they would actually be able to respond to any spill.  No statement has been made by Qianhe, the Customs Authority or the MSA to clarify the position further.

Those Members with annual contracts with Qianhe may wish to consider contracting with an alternative SPRO.  In this regard, unless they are in a position to give Qianhe the contractual 30 days’ notice (see below), they should first contact Qianhe to ascertain whether they are in a position to respond.  If there is conclusive evidence that they are not, there may be a right to suspend or terminate the Qianhe contract and enter into an agreement with another SPRO straightaway, in order to mitigate the risk of non-compliance with PRC regulations and failure of Qianhe SPROs to respond.  This will depend on the terms of individual Members’ contracts with Qianhe and it is recommended that Members take PRC legal advice in that regard.  Members may also contact the Club for assistance.

Members who do not have vessels calling within the next 30 days should be in a position to give Qianhe the contractual 30 days’ notice. They may wish to consider terminating their contracts with Qianhe in accordance with Article 5 (if using the IG-recommended wording) of the agreement and give Qianhe 30 days’ notice of termination, with a view to then signing with another SPRO in port and such contracts becoming effective from the date of termination of the Qianhe contracts.  Once again however this will depend on the terms of individual Members’ contracts with Qianhe and it is recommended that Members take PRC legal advice in that regard. 

Members who have not contracted with Qianhe SPROs, their consortium or their agencies are not recommended to do so for the time being, given the uncertainty regarding the ability of Qianhe to respond.

Further advice will be provided when PRC authorities provide a clear position. Members may also wish to consult the Club’s dedicated China pollution webpage.