Outline

• Any nontank vessel operator or owner visiting US waters must prepare a vessel response plan for approval by the US Coast Guard (USCG).

• The deadline for submissions of the plans is 8th August, 2005. However, the USCG has informally requested the plans be submitted 30 days before the deadline.

• The full text of a guidance note issued by the USCG can be found on their website.

TO THE MEMBERS

Dear Sirs

Oil Pollution in the United States - Nontank Vessel Response Plan

Members who trade nontank vessels to the United States should be aware that the Coast Guard has issued interim guidance regarding a requirement for the owner or operator of any nontank vessel operating in navigable waters of the United States to prepare a Vessel Response Plan (VRP) and to submit it no later than 8th August, 2005 to the Coast Guard for approval. We are furthermore advised that the Coast Guard has informally requested that VRPs be submitted at least 30 days in advance of the compliance date. The guidance, entitled "Interim Guidance for the Development and Review of Response Plans for Nontank Vessels", can be found at the US Coast Guard website -

Up until this point, VRPs have not been required for nontank vessels in the US, except for plans required under State law such as in California and Alaska. However, nontank vessels trading to all US states will be affected by the new Federal requirement (arising from an amendment to sections 311 (a) and (j) of the Federal Water Pollution Control Act (FWPCA)).

The main requirements of the VRP are that it must:

• Be consistent with the requirements of the National Contingency Plan and Area Contingency Plans;

• Identify the Qualified Individual (QI) having full authority to implement removal actions, and require immediate communications between that individual and the appropriate Federal official and persons providing personnel and equipment pursuant to (3) overleaf;

• Identify and ensure by contract or other means approved by the Coast Guard the availability of private personnel and equipment necessary to remove to the maximum extent practicable a worst case discharge (including a discharge resulting from a fire or explosion), and to mitigate or prevent a substantial threat of such a discharge;

• Describe the training, equipment testing, periodic unannounced drills, and response actions of persons on the vessel, to be carried out under the plan to ensure the safety of the vessel and to mitigate or prevent the discharge, or the substantial threat of a discharge;

• Be updated periodically; and

• Be re-submitted for approval of each significant change.

Most Members will need professional assistance to prepare a VRP, and will need access by contract to a firm providing QI and Spill Management Team (SMT) services, plus access by contract to the services of an Oil Spill Response Organisation (OSRO) and a salvor.

Members may recall that in 1999 contractual arrangements were made by the Association for Marine Spill Response Corporation (MSRC) and National Response Corporation (NRC) to provide OSRO services to any nontank vessel entered in the Association. It is expected that these arrangements will be regarded as acceptable by the Coast Guard for Federal VRP purposes, and these arrangements are therefore being used by spill managers assisting Members to prepare their VRPs.

Plan writing services are provided by most US spill managers, many of whom will already be familiar to Members who have California or Alaska plans.

Since 1999, the Association has arranged for QI and SMT services to be made available to nontank vessels in the US by CHGMS (formerly the separate firms of Corbett & Holt and Gallagher Marine Services). These arrangements will continue. Members should contact CHGMS if they wish to obtain the QI, SMT and plan writing services from them. However, Members who have an alternative preferred provider of SMT and plan writing services are free to use such services.

Members will need to make their own arrangements to have access to salvage services, in liaison with their plan writer. Most US salvors have forms of contracts that have been approved by the International Group for contractual liability purposes, designed for use in California or for use by tank vessels. Members should ask their salvor to demonstrate that the form of any salvage contract used for the purpose of compliance with the federal nontank regulations is substantially the same as a form previously approved by the International Group. If this is not the case, then advice should be sought from the Managers regarding the insurability of any indemnity provisions.

Yours faithfully

THOMAS MILLER (BERMUDA) LTD.