Non-tank vessels, Certificates of Financial Responsibility - Contingency Plans (March 1999)

Circular No. 2/99 March 1999

TO THE MEMBERS

Dear Sirs,

CALIFORNIA - NON-TANK VESSELS CERTIFICATES OF FINANCIAL RESPONSIBILITY CONTINGENCY PLANS

As Members may be aware, the State of California recently enacted legislation which will require non-tank vessel operators to submit Contingency Plans to the State for approval not later than 1 September 1999. A "non-tank vessel" is defined in the proposed regulations as "a vessel of 300 gross tons or greater, other than a tank vessel, not designed to carry oil as cargo". The legislation prohibits non-tank vessels from operating in California State Waters unless a plan (Vessel Response Plan, VRP) has been submitted. With effect from 1 September 1999 non-tank vessel owners will also be required to obtain certificates of financial responsibility for oil pollution up to USD 300 million.

The State has circulated draft regulations relating to the above. They provide as follows:

Certificates of financial responsibility: Operators or owners of non-tank vessels must show the ability to pay at least USD 300 million in damages in the event of an oil spill. They will then be issued with certificates of financial responsibility valid for one year. Owners should be able to obtain such certificates of financial responsibility from the Californian authorities on production of their P&I certificates of entry.

Contingency plans: A non-tank owner will be required to file with the State, a contingency plan before he can operate in Californian waters. The owner should include in his contingency plan, the name of a qualified individual authorised to commit funds on behalf of the owner, an agent for service of process, certain ship-specific information and the names of response organisations capable of cleaning up the oil to the standards required under the regulations. The Pacific Maritime Shipowners Association (PMSA) is developing a scheme which would assist owners in preparing contingency plans. An owner would be able to contract clean-up and spill managers services through PMSA on payment of a fee (approximately USD 175 per call). However, owners will themselves have to file plans with the Californian Authorities showing the owners' designated QI and agent for service of process, as well as providing ship specific information.

We are monitoring the status of the regulations carefully and exploring means of assisting Members to comply with them. It is expected that the final regulations will be published in June, which will allow Members two months to submit plans prior to the 1 September deadline. We therefore recommend that Members already begin to collate information which is required for the contingency plans under the current draft regulations and which it is believed will still be required in the final regulations. This is ship-specific information.

It is suggested that Members provide the Club with this information to enable the Club to determine means of assisting Members in submitting plans. The questionnaire below is aimed at this objective and Members are requested to complete and return it as soon as practicable.

Yours faithfully, ASSURANCEFORENINGEN GARD -gjensidig-

John G. Bernander Managing Director

QUESTIONNAIRE

Step 1: Please respond by FAX:

Do you now intend to, or wish to make provision for operating in California State Waters including calling at Ports of California after 1 September 1999?

____________________________________________________________________________

(If NO, submit this page and proceed no further.)

Would you like GARD to assist you in drafting a plan for approval? A fee will be payable, details of which will be available once completed questionnaires have been received.

____________________________________________________________________________

(If NO, submit this page and proceed no further.)

Have you already submitted a California Contingency Plan for tank vessels?

____________________________________________________________________________

If so: who is your Qualified Individual?

____________________________________________________________________________

• Oil Spill Response Manager?

____________________________________________________________________________

• Oil Spill Responder?

____________________________________________________________________________

• Salvor?

____________________________________________________________________________

How many non-tank vessels do you intend to trade to California?

____________________________________________________________________________

Which ports do you consider you may wish to trade to?

Recognising the mandatory date(s) for International Safety Management Code (ISM) compliance, do you anticipate compliance in advance of the schedule and if so, what is your target date for compliance?

____________________________________________________________________________

(Certain relief is offered for operators in compliance with ISM requirements.)

Step 2: Please respond by courier:

The following information will probably be required for the ship-specific section of the vessel response plan. Do not be alarmed if you cannot provide any of the information requested. Simply state "not available".

Describe the following for each non-tank vessel you may wish to operate in California:

Full details of the operator the way you would describe it in the plan.

Full details of the individual within the company to whom correspondence should be addressed.

Vessel's name.

Flag state.

Registry or official number.

Lloyd's identification number.

Radio call sign.

Vessel:

• classification

• hull type

• gross tonnage

• maximum cargo amounts

• length

• draft

• beam

A copy of the vessel's oil transfer procedures (in English).

Number of fuel tanks including identification of the largest tank and volume it carries (in barrels).

The type(s) of fuel normally used by the ship and a marine safety data sheet for that fuel if available.

Any existing response procedure and organisation for on board oil spill response.

Any existing procedure for training in the use of on board equipment for on board response.

Any existing drill/exercise guidelines or schedules for on board response.

Document of Compliance and SMCs if applicable. If you will not be in compliance with ISM by 1 September 1999, please provide the following if at present in existence:

• Oil spill prevention procedures currently in effect to prevent oil spills while transferring oil.

• Procedures to assure clear communications when transferring oil.

• Navigational procedures.

• "Risk Reduction" incentive programmes.

• Description of leak detection, alarms, devices, equipment or procedures.

Description of security measures.