CMS Newsletter 5/10 (April 2010)

Outline

Developments from the authorities.

Draft implementation documents were released by Shanghai MSA for comment.

CMS service agreement

Dear Sirs

Developments from the authorities

It is said that the further implementation documents will be released in the middle of this year. As mentioned in CMS Newsletter 03/10, an adequate grace-period to operators for the pre-contracting issue after the release of approved OSROs will probably be given by the authorities.

Moreover, the criterion of OSRO assessment has been drafted and under the approval of the Ministry of Transportation. It seems that no existing OSRO has the capability to operate over the register port. Most of the OSROs can only fight against local pollution accident. In our view, the possibility of appearing an OSRO who can cover all Chinese ports seems very low.

Draft Shanghai MSA implementation documents

Shanghai MSA released six draft implementation documents on the Regulations for comment on March 11th, 2010, which included

1. the Regulation on Prevention and Control of Pollution to the Marine Environment by Terminal, Loading/Unloading Station and Shipyard Engaging in Vessel Repairing and Shipbreaking

2. the Regulation on Clean-up Operation

3. the Regulation on Prevention and Control of Pollution to the Marine Environment by Vessel Pollutant Receiving Operation

4. the Regulation on Prevention and Control of Pollution caused by Bunkering Operation,

5. the Regulation of Supervision and Administration on Harmful Polluting Goods Carried by Vessels,

6. the Regulations on Prevention and Control of Pollution to the Marine Environment by Vessel Repairing, Shipbreaking and Salvaging Operation.

The key points of the Regulation on Clean-up Operation were summarized as follows:
1. The OSROs are divided into four levels from high to low as Coast I, Coast II, Port I and Port II.
2. The ship operators or their agents should pre-contract with OSRO of different ranks and services area approved and published by the authorities.
(a) Ships below 500 GT carrying poisonous hazardous liquid in bulk shall conclude the agreements with OSRO of Port II and above.
(b) Ships of 500 GT and above carrying poisonous hazardous liquid in bulk and other ships of 10,000 GT and above shall conclude the agreements with OSRO of Port I and above.
(c) Ships carrying poisonous hazardous liquid in bulk which engaged in lightering operations shall conclude the agreements with OSRO of Coast II and above.
3. The contracts between OSROs and the operators are divided into fixed term contract which validity period is no longer than one year and single voyage contract.
4. The contents of contract are detailed.

Please note that there are differences between central MSA's draft implementation rules and Shanghai MSA's. It is hoped that the differences will be resolved through coordination between central MSA and local MSA.

Full text of Shanghai MSA's Regulation on Clean-up Operation (in Chinese) attached as Appendix I.

CMS Oil Spill Response Services Advisory Agreement

CMS Oil Spill Response Services Advisory Agreement for Vessels Operating in Chinese Waters is prepared and under IG's review. The services provided by CMS are as follows:

1. Advice to shipowner/operator (or their Chinese Agents) on identity and status of MSA-approved OSRO(s) for Designated Ports.

2. Arrangement of CONTRACT between shipowner/operator and OSRO. CONTRACT will be made in both Chinese and English. It must comply with MSA regulations and other relevant Chinese laws/regulations. It should also comply with the International Group of P&I Clubs' requirements for insurance reasons.

3. Monitoring of the evolving PRC's central and local MSA regulations on pollution.

4. Monitoring of the on-going qualification of OSROs.

5. Renewal of CONTRACT annually or as required.

6. Other services related to the Regulations required by shipowner/operator.

Full text of the CMS service agreement will be provided in a future newsletter after the International Group of P&I Clubs has reviewed it.

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