Outline

• New insurance or guarantee requirements in respect of marine pollution in Taiwan's economic exclusion zone (EEZ) come into force on 1st July, 2005, but a "grace period" may be granted.
• These new provisions of the Marine Pollution Control Act apply to all tankers over 150gt and all other ships over 400gt.
• The International Group is in discussion with the Taiwan EPA to obtain confirmation that the Club's Certificate of Entry is acceptable as evidence of the necessary insurance.

TO THE MEMBERS

Taiwan Marine Pollution Control Act and Compulsory Insurance

The Marine Pollution Control Act of Taiwan was promulgated by presidential order on 1st November, 2000. The Act specifically addresses liability for marine oil spills, as well as issues of prevention and response in relation to both marine and land-based pollution. The Environmental Protection Administration (EPA) is the competent authority under the Act.

The Act provides that the shipowner shall be liable for damage caused by pollution of the sea by a ship, but the Act does not provide for defences or limits of such liability. The term 'shipowner' is defined to include owner, lessee, agent and operator of a ship. The law requires the shipowner to provide insurance or a guarantee to cover liability under the Act for tankers over 150gt and all other types of ships over 400gt. The Act also allows claimants to sue the insurer or guarantor directly. The Enforcement Rules of the Act issued by EPA in September, 2001 give details of the forms of guarantee that may be provided, but do not expand on the other alternative of liability insurance. Various categories of punishment for pollution are also provided for, including fines and prison terms.

The geographic jurisdiction of the Act extends as far as the EEZ.

On 5th August, 2004, the EPA issued a circular giving effect to the compulsory insurance or guarantee provisions of the Act. The amounts of liability insurance coverage or guarantee required in accordance with the Act are as follows:

1. Tankers over 150gt:

- tankers over 150gt up to 5000gt: SDR4,510,000

- tankers above 5,000gt: for each ton in excess of 5,000, an additional SDR631 per ton, subject to a maximum of SDR89,770,000.

2. Other vessels over 400gt or chemical vessels over 150gt: SDR400 per ton, or SDR350,000, whichever is greater.

3. Fishing vessels or salvage vessels: SDR200 per ton.

These insurance or guarantee requirements will take effect from 1st July, 2005.

The International Group has been discussing with the EPA whether insurance provided by Clubs in the International Group can be used to satisfy the requirements. Although these discussions are ongoing it is hoped that the EPA will, for the purpose of the Act, decide to accept as adequate evidence of insurance Certificates of Entry issued by Clubs in the International Group, as is already the case in Japan, Australia, India, California and Alaska. The EPA has also indicated that a grace period may be granted in order to allow owners ample time to comply with the Act.

The Managers will continue to monitor developments in relation to evidence of insurance required under the Act and will provide further guidance in due course.

A similar circular will be sent by the other members of the International Group of P&I Associations.

Yours faithfully

THOMAS MILLER (BERMUDA) LTD.

Dear Sirs