Outline

• This circular applies to all ships with the capacity to carry more than 400 metric tonnes of oil either as cargo or fuel.
• The PCSOPEP requirements will take effect on 1st January 2005.
• Members should consult with the Club if required to sign a contract for AP services.
• A similar circular is being sent by the other members of the International Group of P&I Associations.

TO THE MEMBERS

Dear Sirs

PANAMA CANAL - SHIPBOARD OIL POLLUTION EMERGENCY PLANS

As previously advised in the Association's circulars (ref: 15/03 and 16/03), the Panama Canal Authority (ACP) issued an Advisory No. A-28-2003 in August 2003 indicating that vessels with the capacity to carry 400 metric tons or more of oil as cargo and/or fuel would be required to submit to the ACP for approval a PCSOPEP (Panama Canal Shipboard Oil Pollution Emergency Plan) before transiting the Canal.

As a result of the comments made by the industry organisations, the PCSOPEP requirements have been revised several times since the initial advisory. In particular, the ACP in its Advisory No.A-25-2004 indicated that the ACP will act as the sole OSRO (oil spill removal organisation), funded by charging a transiting fee to the relevant vessels. In addition, the previous requirement for a QI (qualified individual) has been replaced by a requirement for an Authorized Person (AP), who must be domiciled in Panama, be fluent in Spanish or English, and be responsible for liaising with the ACP in the provision and lodging of guarantees to the satisfaction of the ACP for spill response and clean-up actions when an incident occurs. The transit fees were subsequently advised in ACP's Advisory No. A-50-2004.

The PCSOPEP requirements are due to take effect from 1st January, 2005, and, as they currently stand, need particular attention in the following three areas:

Plan writing

Owners of vessels meeting the requirements must submit a PCSOPEP to ACP for review and approval. The ACP will offer PCSOPEP verification services free of charge.

The International Chamber of Shipping has advised that it intends to submit a model PCSOPEP Addendum for ACP's approval. If approved, the model plan may be used by the owners to assist them in writing the plan in-house. The ICS will advise its members as soon as the work is completed.

Several US spill management firms and local firms have indicated that they will offer the service of plan writing and maintenance, as well as that of an Authorised Person (see below).

Authorised Person (AP)

The ACP has given further guidance on the role of the AP in its latest Advisory (No. A-52-2004), stating that the AP should act as liaison between the ACP and the vessel and her owners in order to facilitate the provision of a guarantee satisfactory to the ACP for the costs of cleanup and response following a spill.

The ACP has further clarified that the ship's agent can perform the role of an AP.

Alternatively, several US and local firms have also offered to provide services of acting in the role of an AP. Members should decide whether to appoint their normal agent or a professional firm for this purpose. If a professional firm is used, and if the Member is required to sign a contract, it is recommended that the Managers be consulted to confirm that such contract conforms to the Group guidelines.

Guarantee requirements

As noted above, the ACP in its last Advisory indicated that, in the event of a spill, a guarantee satisfactory to ACP would have to be posted for costs that may be incurred as a result of the spill. The International Group has suggested to the ACP that a Club Certificate of Entry evidencing the amount of pollution insurance coverage should be accepted as meeting the guarantee requirement. In response, the ACP has indicated that it is unwilling to withdraw the guarantee requirement, but that the requirement can be met by a P&I Club letter of undertaking. In the case of a tanker spill, the Club would maintain that such an undertaking has already been provided in the CLC certificate through the provision of a blue card. However, in the absence of clear guidance, it remains to be seen whether the ACP would accept this point.

The Advisories issued by the ACP on the PCSOPEP can be found on the following webpage:

Yours faithfully

THOMAS MILLER (BERMUDA) LTD.

Contact

• If any Members require further information they are requested to contact either Nigel Carden on telephone +44 7204 2147 or e-mail nigel.carden@thomasmiller.com or Chao Wu on +44 7204 2157, e-mail chao.wu@tomasmiller.com