Is it right to penalise a ship for sulphur violations - discovered through testing a ship tank sample - if the BDN shows the fuel as being within sulphur limits?
5th November 2012 12:30 GMT

The UK Protection and Indemnity (P&I) Club recently issued a Bulletin saying a vessel had been detained in Rotterdam for burning bunkers with too high sulphur content in the North Sea Emission Control Area (ECA).

The club said the vessel had been detained despite carrying what it believed was compliant low sulphur fuel, as the Bunker Delivery Note (BDN) had indicated that the product was within the required 1.00% sulphur limit.

Under MARPOL Annex VI regulations, the bunker supplier is required to specify the sulphur content of any delivered fuel on the accompanying BDN, and to provide the ship with a representative sample known as the MARPOL sample.  Owners are under no obligation to test the fuels they receive for sulphur.

When port state control (PSC) authorities find visiting ships to be in violation of sulphur limits, they may penalise the owner/operator through fees or ship dentition.  

Dutch authorities have been known to take fuel samples directly from a vessel's fuel tank to test for sulphur compliance, rather than testing the MARPOL sample.

Bunkerworld contacted the Dutch authorities about this, and was told that they have detained ships in cases where the sulphur content of the fuel in the vessels' bunker tanks was too high and had failed to match the specifications given in the BDN.

The argument used by Dutch authorities is that low sulphur fuels for ECA use could be "contaminated" by higher sulphur fuel previously used and stored onboard the ship.

"The percentage mentioned in the BDN gives an indication of the sulphur content of the fuel when purchased. It says nothing about the sulphur content that is actually used," a Dutch Transport Authority spokesperson told Bunkerworld.

The International Maritime Organization (IMO) has been debating if there should be guidelines for this practice, but has not made much progress.

During debates at IMO meetings on the issue, several delegations have argued that taking in-use fuel samples put the onus on the owner, instead of bunker suppliers for delivered fuel quality.

If suppliers state the correct sulphur content on the BDN, ships should be able to get the ECA changeover procedures right so that the fuel that goes into the engine is compliant.

But there could be a problem for operators in getting their ECA changeover procedures right if the supplier has understated the sulphur content on the BDN, not to mention if the fuel was 'off-spec' for sulphur to start with.

Norway has previously proposed to the IMO that the verification of a tank sample should always be accompanied by a verification test of the MARPOL sample to confirm that the fuel delivered, and the fuel in the tanks, are of the same origin/source.

Taking all of the above into consideration, this Bunkerworld poll asks:

Is right for PSC to penalise a ship for sulphur violations - discovered through testing a ship tank sample as opposed to the MARPOL sample - if the BDN shows the fuel as being within sulphur limits?

Is it right to penalise a ship for sulphur violations - discovered through testing a ship tank sample - if the BDN shows the fuel as being within sulphur limits?

  • 23% 
     
  • 9% 
     
  • 15% 
     
  • 9% 
     
  • 14% 
     
  • 30% 
     

This poll is now closed.

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Comments on this Article
Jon Watson - Razaghi Meyer International
5th November 2012
Oh dear, what a minefield!
How should one vote here and under what justification?
A PSC has the task of "detecting and successfully prosecuting any and all violations of MARPOL".
MARPOL however has adopted a system of reporting fuel quality that is based on existing practices but which does not impose any significant or onerous burden on the industry. This might be because they wanted to get the Treaty ratified at long last.
MARTOB, in its report to the EU, says:

"11.23 (executive summary) The practice to maintain documentary evidence of fuel oil quality standards laid down under regulation 18 of Annex VI of MARPOL 73/78 must be firmly adhered to so that a legally sound
method can be documented for follow up of non-compliance vessels.
Due to the possibilities of falsification of documentary evidence and samples, and also the cost and labour associated with undertaking a high percentage of investigation calls for additional verification procedures, these additional verification procedures should be designed to allow identification of possible noncompliance
warranting a more detailed default investigation. Based on studies conducted in this work it was found that the AIS and remote sensing provide the most promising solution and it is recommended that further study should be conducted."

In other words, they knew then and know now that it is too easy to substitute false samples and to submit false documentation or maintain false oil record books.
In such circumstances any PSC that simply accepted the veracity of the BDN or relied solely on the MARPOL sample would fail to achieve their task of detecting and successfully prosecuting.
As it is all the PSC can do is investigate vessels when they come into port. In theory they should also intercept vessels entering an ECA and test them at sea to ensur ethey have made a good transition from HS to LS fuel and not simply timed it for their arrival in port.
The problem is a lack of instrumentation. Costly instrumentation.
SO we have a situation in which the PSC has a job that is difficult and expensive to perform without the "addittional verification methods" called for and it is a problem to suggest they should only evaluate the MARPOL sample and accept the BDN when there are such obvious doubts about the veracity of either.

The problem is that poor fuel management means that it is as likely as not that the density and viscosity of HFO from he commercial sample analysis will show significant differences from the BDN (based on previous analysis and due to subsequent handling) and in about 25% of the cases the BDN will show significant differences for MGO. Significant means more than can be accounted for by repeatability and reproducibility. In other words, the fuel quality either never was what was claimed or in subsequent fuel handling prior to bunkering the fuel quality has been compromised.
Not necessarily deliberately but simply due to a lack of investment.
This poses a problem.
Fuel management would involve a substantial investment if plant and equipment, the segregation of batches of fuel in shore terminals, on barges and on vessels and the maintaining of the fuels fully homogeneous. (It is no mistake that ISO 8217 says a fuel should be homogeneous but neither defines homogeneity nor recommends any testing) and no one really seems concerned within the industry about homogeneity.
However, for the BDN to accurately reflect the fuel quality and for the MARPOL sample to be fully representative would require a very substantial investment and cause all fuel prices to rise even higher than now.
So while it may seem "unfair" of PSCs to test spot samples of fuel there is also reason to consider that some sort of flexibility and discretion ought to apply.
Under normal circumstances that might be the best approach but MARPOL and much other legislation is driven by environmental zealots. The whole fuel sulphur issue is thoroughly distorted and mostly misinterpreted. But to do other than expect the PSCs to enforce the legislation to their utmost ability is not a choice they are free to make.
Of course, if there was some way to demonstrate that the MRPOL sample was a legitimate fuel sample then their might be a cse for the last option, the one I select here but only because the means to validate the MARPOL sample are available through simple online measurements that also deliver important operational measurements to the vessel operator and which will be valuable in commercial bunker disputes.
Jon Watson - Razaghi Meyer International
5th November 2012
PS
Option 1: the vessel is liable no matter how the breach occurred.
This is the view of the EU. Indeed, the EU would like to make it a criminal offence not simply where they can prove a fraudulent motive but also where the event is purely and demonstrably accidental. This as usual means the crew are liable to fines and incarceration while the vessel owners are only liable to fines.
The EU also favours the US Coast Guard approach of paying rewards to whistleblowers (e.g. as per the magic pipe discharges of bilge water).
It is tough to say this should be so when the situation is so vulnerable and when the consequences could be a significant increase in fuel costs without any compensating benefits. In other words, where the profitable operation of vessels is brought into question.... and if the money is spent in one place it cannot be spent elsewhere.
Jon Watson - Razaghi Meyer International
5th November 2012
PPS
Only one PSC, so far as I am aware, made it a requirement in their domestic implementation of MARPOL that a vessel should verify the fuel quality by commercial sample analysis (not that this would do any good where the commercial sample and MARPOL sample are drip samples of non-homogeneous fuels and a spot sample might well show a fuel to be non-compliant.
Other PSCs resisted this.
Unni Einemo - The International Bunker Industry Association (IBIA)
5th November 2012
Thorough and interesting comments about a complex issue Jon - many thanks. This is indeed a minefield, which the discussions I have witnessed at IMO meetings and in various forum comments have amply demonstrated. I tried to capture some of the possible viewpoints and put them to a vote - a 'yes or no' answer seemed too simplistic and would not be representative of the real situation.
Jon Watson - Razaghi Meyer International
5th November 2012
And this part of the MARTOB report seems to have gone unheard by the EU or the IMO (1st and 3rd parts especially):

11.24 Three important areas of further work have been identified from the case studies:
• More work needs to be done to quantify the impact and ability for the refining industry to meet the changing demand in fuel qualities and to assess the overall cost impact on the business......
(JMW: the latest changes to sulphur levels seem totally unconcerned with the ability of the industry to find suitable supplies of HFO)
•More experience feedback should be demonstrated on dual fuel operation to gain increased knowledge on potential safety and operational problems experienced with change over between
HFO and LSHFO/MDO/MGO.
• Operational procedures should be carefully established for those who will operate on more than one fuel quality and with change over between different fuel qualities upon entering a SOxECA.
Further work must be undertaken to clarify requirements for monitoring, documentation and verification of compliance defined as acceptable for any administration enforcing the new
sulphur regulations. (JMW: An admission that the reporting procedures are below what is expected and needed. Under such circumstances it has to be questioned to what extent the shipping industry is a victim of poor, but possibly necessary, implementation and hence a degree of latitude might be expected of PSCs enforcing the legislation).
Dragos Rauta - Intertanko
7th November 2012
The alternatives provided by this poll are not adequate. It might be workable if multiple choices are permitted.

The current regulation and conmtrol of complaincer system is complex and inefficient. As far as I am aware, ships were detained because the sulphur content was slightly above the limit. Such a deviation was due to various reasons but not intentionally done. I am not aware of any ship being detained for breaching the sulphur limit because it has used in SECA a fuel which was allowed for use outside SECA. So, a lot of mistrust put on ships seems an exaggeration.

The complexity of controlling compliance rests mainly with the way regulation 14 of MARPOL Annex VI is written. It requires that: "the sulphur content of any fuel oil used onboard ship shall not exceed X.X%". Maybe the language was dictated by the IMO's ruling approach, namely the ship is the only legal responsible party. It would have been ideal if IMO could change that to: “the fuel supplied to ships shall not have a sulphur content in excess of X.X%” (for ECA and for outside ECA use). In addition, IMO could have consider that the control system for this provision should have impose an obligation on the suppliers to demonstrate the fuel they supply is compliant. One would say this is the intended role of the BDN. Well, it is not, at least as practiced. The data in the BDN is not followed by any test results to demonstrate it is correct. In many situations it is even impossible to demonstrate that the data in the BDN is genuine, particularly when the fuel supplied to ships is the result of onboard barge blending or, sometimes the blending being done while supplying the fuel from the barge to the ship. In such frequent operations one can only assume rather than tests and measures that the blend is within the limits required. This is quite an unprofessional and unacceptable procedure provided that the receiver is then made responsible and risks detention and fines imposed by another port authority. Some say control on supply will take too much time. I disagree. One can ask the suppliers to demonstrate to the local authority they tests in advance and the fuel delivered are compliant. It is their professional duty to know exactly what they sell. Onboard barge blending should not be allowed unless proper testing is performed before the bunkering takes place or ends.

MARPOL Annex VI has also a mechanism providing some sort of defence to ships in case tests results on fuel samples they take indicate the sulphur content is higher that the limit required. IMO has issued 4 or 5 circulars containing many reports from ships on such incidents. The names of suppliers are provided. I am not aware of any measure taken by authorities to correct these problems or to suggest changes to the IMO ruling to improve the reliability of compliance of fuels supplied to ships. Most of the reports from ships indicate that non-compliant supplies are supplied at ARA ports, two of these being Dutch ports. Yet, the Dutch authorities’ policy is to check compliance of fuels onboard arriving ships, thus fuels delivered at other ports and simply ignore any control on fuels supplied at their ports! Norway and INTERTANKO invited IMO/MEPC to consider possible changes but in vain.

Concluding, no matter the result of such polls, the issue will not get much better unless authorities do accept their responsibility to enforce compliance on the supply side. Ideally, best and easiest way to ensure compliance would be that IMO rules the use of one fuel type with a clearly defined standard. In addition, IMO should make it compulsory that suppliers demonstrate all they sell is compliant. Such a ruling will make it very difficult for both suppliers and ships to have any opportunity for not being compliant. IMO’s spirit of ruling by consensus is a positive approach but it has its limits when the consensus provides many options which makes it difficult to enforce the rule.
Marco Antonio Costa Tritto - Petróleo Brasileiro S.A. (Petrobras)
7th November 2012
This matter is very sensitive. The MARPOL sample can be on-spec and the product in the tank can be off-spec what would mean two things: the real product supplied was non-compliant ('fake' sample) or the product was compliant and some contamination happened in the vessel's tank. This can happen. But in the end, who will burn the fuel is the ship, the emissions will be from the ship and to be checked first will be the ship. So it is very important to the vessel to assure that the product being received is compliant and in my view the only way is to test before receiving like some companies do today. Doing this beside the trust in the supplier for sure would avoid some problem in the future.
Unni Einemo - The International Bunker Industry Association (IBIA)
7th November 2012
Thanks for your comments Dragos. IMO's authority is limited to regulating ships, which I guess has always been the problem when it came to introducing an effective solution to controlling ships' sulphur emissions under MARPOL Annex VI. The IMO can encourage member states to control suppliers, but for now I think the only requirement is for each ratifying state to keep records of bunker suppliers operating in their countries. There are also systems for reporting that suppliers have provided non-compliant fuels through a note of protest - but beyond that - what can ship operators and PSC actually do? There have been indications that Dutch authorities are taking action against bunker suppliers as well, not just ships. Individual states do have the choice to introduce supplier controls and penalties, but it is not specified by MARPOL Annex VI. EU regulations are a bit different - they do actually ban not just the use, but also the sale of MGO with sulphur exceeding 0.1%.

By the same token, IMO has no sway over the refining industry so cannot force it to provide just one type of fuel - all it can ask of ratifying states is again encouragement to ensure the private sector delivers what the commercial shipping industry needs. You know as well as I do that the refining industry has not been in favour of a compulsory global distillate requirement for ships.

Fair point about inadequate poll alternatives - it was quite hard to formulate the options as there is so much scope for PSC to take multiple approaches to enforcement - so multiple response options might be better. Even if it is hard to chose any of the options it is nevertheless interesting to gauge opinion.
Ivar Tonnesen - IVT Consulting
14th November 2012
Two basic issues at stake here - is the vsl burning "off spec (HS) fuel" and - are the Dutch PSC permitted to take sample(s) of fuel in tank ? Since the latter is not really the issue,I will dwell with the former.

Having been a bunker buyer for decades, I tend to support the first option in the poll. "Is the Operator responsible - - " Prudent fuel management onboard ships should always be to properly segregate LS and HS fuels by so dedicated tank(s) Crew should be clearly instructed that once a tank or tanks have been cleaned and declared LS only, they should never be used for anything else. Thus, when bunkering for EAC trade, we always asked the Ch.Eng for his requirements with safety margin. If the vessel had LS fuel left over when leaving ECA, the Ch.Eng was told to still burn the LS fuel until the tank(s) were empty, avoiding any possible incompatibilty between old and new LS fuels.

With regards to T/C'd vessels, we were fully aware that the Owner would demand BIMCO LS clause in the c/p if the vessel were heading for ECA areas. It was no problem for us to accept same provided Owner guaranteed our wording demanding the requirements we set out for our own vessels.

If, for some reason, HS fuels are discovered in the LS dedicated tank(s) the two main reasons are thus: either bad fuel management onboard or off spec fuel delivered in the first place. The BDR is a statement issued by the Supplier "claiming to be - "- and can only be verified thru fuel testing. The content of the Marpol sample should be identical to the sample given the vsl from the barge, however I have a nagging feeling that this may not always be the case. Just goes to show the importance that the whole sampling procedure must be watched very closely by the receiving vessel,s crew.

With regards to PSC' right to take samples from tank I would question same. They have full right to check the BDR and the Marpol sample (with the flag state's approval), but to take samples of fuel in tank ? don't think os

rgds
Ivar Tonnesen
IVT Consulting
Unni Einemo - The International Bunker Industry Association (IBIA)
16th November 2012
Ivar, regarding the right of PSC to take samples from ship's tanks, there is nothing in the regulation that says they cannot do that. In the US, the EPA has said they may verify compliance by a variety of checks, including taking line or tank samples from the ship: http://www.bunkerworld.com/news/i114132/US_No_distillate_requirement_in_ECA_until_2015
John Liddy - Liddy Associates Ltd
19th November 2012
Remember that in Europe shipping is subject to EU regulations as well as to MARPOL Annex VI. The new EU Directive governing marine fuel sulfur content which was adopted in October 2012, and its predecessor Directive 2005/33/EC, both specify that sampling and analysis of fuel in tanks on board can be used as an alternative to analysis of the MARPOL delivery sample.

John Liddy
Liddy Associates Ltd.
darek abebe
18th December 2012
I think the PSC should penalize the ship and support the ship to claim against the supplier because the supplier has given the right sulphur content in the sample and put on the BDN but the actual delivered into the tank isn't correct.
Unni Einemo - The International Bunker Industry Association (IBIA)
28th December 2012
The latest EU regulations also suggest that Member States should take action against marine fuel suppliers that have been found to deliver fuel that does not comply with the sulphur specification stated on the BDN. But there seems to be little PSC can do about bunker suppliers if the non-compliant fuel was supplied to the ship outside the EU, and the ship is still first in line for penalties . More on those updated EU regulations here: http://www.bunkerworld.com/news/i118200/Amended_EU_sulphur_directive_in_force
Christoffer Ditlev Pedersen - Endofa Panama
4th July 2013
The vessel crew has full responsibility to make sure that the product on board is within the limits. At the moment of a supply it is their responsability to test the product received as well as the product that is already in the receiving tank. It is here that most shipowners go wrong, due to the fact that they do not take into consideration the product already in the tank where the new product is being received and this can sometimes have a final impact on the quality of the received product. It is because of this that all supplies are basis barge figures and if testing is needed, the barge retained sample is always final and binding.
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