DCN AUGUST Edition 2019

Naraya Lamart, senior associate, HFW
This is taking place in the context of a
Swedish study claiming that wastewater
from scrubber systems is harmful to
marine life.
In a recent study Clarksons estimated
that more than 10% of the world
fleet will have scrubbers fitted by the
implementation date. That being so,
it should further amplify owners’ and
operators’ concerns about the availability
of LSFO and the need to ensure their
contractual “houses” are in order.
ENFORCEMENT IN AUSTRALIA
In Australia, the sulphur content of fuel will
be monitored by the Australian Maritime
Safety Authority as part of its port state
control inspection regime. An AMSA
submission in March 2019 on the policy,
enforcement areas such as for cruise
ships in Sydney Harbour. If that approach
is adopted, AMSA, in the event of noncompliance,
is likely to take into account
factors such as:
• unforeseen and uncontrolled
mechanical or equipment failure;
unavailability of non-compliant fuel;
• unexpected delays in departure beyond
the reasonable control of the master;
• an unscheduled berthing due to an
emergency;
likely duration of non-compliance;
• sulphur content of the fuel being used or
proposed to be used.
Interestingly, there is no indication as
to whether AMSA will look at the scrubber
system used to measure the impact of any
wastewater discharge.
HFW; Alexey Lesik; Natasha Pankina
There is a justifiable concern as to whether there
will be enough LSFO to meet demand on January 1,
2020 and in the years to come.
upwards of 98% of its trade is transported
by sea, there is scope for potential broader
economic ramifications as the increased
costs of moving goods by sea works its way
through the supply chain to consumers.
SCRUBBERS
One of the alternatives to using LSFO is
for shipowners to retrofit their vessels with
exhaust gas cleaning systems (known as
scrubbers) to remove the sulphur from
exhaust emissions. This option is not
without controversy, however, and some of
the issues relating to scrubber use include:
• the upfront expense of fitting the
scrubbers, which is not insignificant;
• the cost of having the ship out of service
whilst scrubbers are fitted;
• underlying charter party considerations,
including whether the ship will be
offhire during any fitting (some
estimates suggest that world’s merchant
fleet supply could be reduced by up to
1.4% across 2019 on an annualised
basis); and
• environmental concerns regarding
disposal of the wastewater created by
scrubbers in the cleaning process. At
present there are no bans on discharge of
this waste water, however, the CSIRO is
studying the impacts of such discharge.
regulatory, taxation, administrative and
funding priorities for Australian shipping
indicates that it is considering a number of
enforcement frameworks and monitoring
tools, including hand-held analysers.
While there is no formal publication
available as to how AMSA proposes to
approach its enforcement role at
this stage, it is likely to
take a similar approach
to that taken in special
NEW CLAUSES FROM BIMCO
CONTRACTUAL CONSIDERATIONS
There are a myriad of potential contractual
challenges for owners, charterers and
operators arising in the context of
chartering and operating vessels. It would
be prudent to draft appropriate clauses,
for example, which deal with instances of
offhire due to scrubber fitting or breakdown
(as referred to above), bunker delivery and
re-delivery clauses concerning the type of
fuel onboard, liability for removal of noncompliant
fuel and liability regarding the
condition and maintenance of scrubbers.
In addition to the clauses suggested by
BIMCO (see box), there are many other
clauses, such as liability allocation for
environmental implications that should be
carefully reviewed in readiness for
the implementation date.
International shipping association BIMCO has, in an attempt to deal with some
of the more specific issues relating to the requirements to actually comply with the
new sulphur content cap of 0.5%, published two new standard clauses as follows:
The Marine Sulphur Content Clause requires charterers to supply fuel that
complies with both the sulphur content regulations and is otherwise compliant
with the specifications and grades as provided for in the charter party. Under that
clause, it is owners who warrant that the ship can comply with the sulphur content
requirements, which are defined to include the MARPOL Annex VI requirements
“as amended from time to time”. This clause should, if incorporated in a charter
party today, ensure the new sulphur cap is automatically incorporated following the
implementation date.
The Fuel Transition Clause covers the transitional period between high and low
sulphur fuels. It requires charterers to supply ships with sufficient LSFO onboard
prior to the January 1, 2020 deadline to allow that ship to reach the nearest port
where LSFO is available. It also requires owners and charterers to use “reasonable
endeavours” to ensure that no high sulphur fuel is carried on board.
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