Club Update China SPROs - 22nd December 2011

China SPROs Update

China MSA has today (i.e. 22nd December 2011) published an Announcement clarifying several issues with regard to signing of SPRO contracts:

1. Mainland Chinese operators must directly contract with SPROs. Overseas operators which have branch company/office/representative in mainland China may authorize their branch/ company/ representative to conclude and sign the contracts. Such authorised branch company/ office/ representative shall properly register with China MSA in case of multiple ports calling, or local MSA in case of single port calling. The list of registered authorized branch company/ office/ representative will be published on MSA official websites:

http://www.msa.gov.cn/
http://www.osp.cn/

Overseas operators without any presence in mainland or not willing to authorize their mainland branch company/ office/ representative to sign contracts shall authorise properly registered agency or the ship's Master to sign the contract. All SPRO contracts must be stamped by authorised branch company/ office/ representative, agency or the ship Master as the case may be and indicate the name of the overseas operators they represent with attachment of a copy of duly signed Letter of Authorization.

2. The agencies that conclude and sign SPRO contract on behalf of overseas operators must meet the required conditions and properly register with China MSA by no later than 15th January 2012. The list of registered agencies will be published on MSA official web sites mentioned above.

The agencies shall act for ship operators' interest, and shall not represent both ship operators and SPRO at the same time to sign the contracts.

3. Umbrella SPROs must meet the required conditions and properly register with China MSA by no later than 15th January 2012. The list of registered umbrella SPRO will be published on MSA's above mentioned websites. SPRO contracts if signed by umbrella SPRO shall be stamped by the umbrella SPRO and indicate the names of the SPROs the umbrella SPRO represents.

It should be noted that this latest advice from the MSA does not clearly address the option of a direct contract between an overseas operator and a SPRO or a consortium of SPROs. This point is being further clarified with the MSA and it is hoped a clearer answer can be found soon.

4. The retainer fees of SPRO should be charged on voyage or fixed time period (monthly/quarterly/annually) basis.

In case of spill incident, the following conditions must be met before termination of SPRO contracts by the parties: 1) proper alternative cleaning arrangements have been made, and 2) termination of contract shall not affect effectiveness of cleaning operation, and 3) prior consent from MSA is obtained.

5. In the ports/ water areas for which an approved SPRO list has been published, ships should comply with the Regulations on SPRO contracting from 1st January 2012. If a ship cannot conclude or sign a contract at its first entry of 2012 into Chinese ports, the reasons must be explained to the local MSA, in which case the MSA may allow entry and operation, but a contract will have to be concluded and signed prior to the ship's departure from the port. From 1st March 2012, ships that don't comply with the Regulations and have not concluded and signed the contract will be dealt with by MSA strictly in accordance with the concerning Regulations.

In the ports. water areas where there are no approved SPRO, the local MSA may make temporary alternative arrangements with regard to SPRO contracts in accordance with the Detailed Rules of the MSA on Implementation of the Regime of Agreement for Ship Pollution Response.We will keep the Members updated as soon as we hear more information on consortia of SPROs, or any other information which may be of interest to the Members.

The full translation of The Announcement has just been made available and available as a pdf here.

Members requiring further information should contact Helen Huang (Tel:+852 2832 4436 email: helen.huang@thomasmiller.com) or Dr Chao Wu (Tel: +44 20 7204 2157 email: chao.wu@thomasmiller.com)