Bunkering and the law
It is generally the Charterers' obligation to provide fuel to a vessel under a time charter. For example, clause 2 of the New York Produce Exchange form 1946 provides that 'Charterers shall provide and pay for all the fuel except as otherwise agreed'. This clause does not, however, impose any obligation on Charterers to provide any particular specification or quality of fuel to the vessel. In a worst-case scenario, this can lead to Charterers supplying fuel, which causes engine breakdown and consequent loss of time.
Of a less serious nature, but nevertheless just as important financially to an owner, there is the possibility that poor quality fuel can have a knock on affect on the vessel's daily speed and consumption levels. As a result of this, owners may be in breach of the speed and consumption warranties in the Charter Party.
If a Charter Party, which is governed by English law, contains no express provision for the quality of the bunkers to be supplied by Charterers, who should bear the responsibility for the supply of inferior quality bunkers? The English courts have not yet answered this question conclusively.
Although there are a number of arbitration decisions, some favor an absolute obligation on the part of Charterers to provide bunkers of a quality which will not cause loss or damage to the vessel or her engine whilst others favor a lesser obligation of due diligence. As, under English law, arbitration decisions do not constitute binding precedents in the same way that decisions of the courts do, it is important that owners ensure that their position is properly protected in the Charter Party and that they include as much information as possible about the type of fuel to be supplied. If possible a Charter Party clause should include:
- a minimum specification of the fuel
- viscosity limits at specified temperatures
- compatibility with fuel already on board
- a minimum net calorific value
- sampling procedures
- exclusion of liability for speed and consumption claims.
A typical clause might read as follows:
'The Charterers shall supply bunkers of a quality suitable for burning in the vessel's engines and auxiliaries. The bunkers supplied shall not exceed a viscosity of [X] cSt at [Y] ' C, shall conform with specification [ZI and shall be compatible with grade [XX] of CS or ISO [YY] having a minimum net calorific value of [ZZ1 mg/kg.
The owners reserve their right to make a claim against the Charterers for any damage to the vessel IS main engines or auxiliaries caused by the use of unsuitable fuel or fuels not complying with the agreed specifications. Furthermore, failure by the vessel to perform in accordance with its warranted levels following the supply of fuel by Charterers, not failing within the above specifications, shall not be actionable by Charterers and shall not constitute an off-hire event or a breach of any provision of this Charter Party by the owners.
The Charterers shall arrange for three identical representative samples of each grade of marine fuel supplied to the vessel to be drawn continuously throughout the entire bunkering operation in the presence of the sellers of the fuel or their representatives. The aforementioned samples should be secured, sealed and provided with labels showing the vessel 's name, identity of delivery facility, product name, delivery date and place and seal number, authenticated with the vessel's stamp and signed by the seller's representative and the Master of the vessel or his authorized representative. The Charterers are to provide one sample to the sellers, one to the vessel and to retain one sample themselves for a period of 90 days after delivery of the fuel to the vessel or, on being requested in writing by the owners, for as long as the owners require.'
In summary, under English law, which is the law governing the majority of Charter Party contracts, the extent of Charterers' obligations to provide bunkers suitable for a particular vessel to burn is unclear. Owners should therefore always ensure that a clause containing their exact fuel requirements is incorporated into the charter.
Fuelcon – not just a suppliers’ contract
Purchasers of bunkers need to have an in depth knowledge of their vessels' technical systems, the particular bunker qualities required, the price and quality of bunkers on the world-wide market and local regulations at the ports of supply. However, if they fail to protect themselves adequately when they agree the terms and conditions of a bunker contract, they will still leave themselves exposed to substantial risks.
In the early 1970s new oil refinery processes were introduced which resulted in a drop in the quality of the residual products, some of which are used as bunker fuel. At this time the shipping industry was experiencing the beginning of a recession and ship owners' first priorities were therefore financial. As a result, bunker suppliers were able to introduce stricter contractual terms for their benefit, which, to a wide extent, have been maintained.
It is therefore essential for purchasers to obtain a copy of the contractual terms upon which it is proposed the fuel supply will be made and, if some of those terms and conditions are unacceptable, to negotiate to delete or amend them. Even where it is not possible, for commercial reasons, to negotiate a bunker contract other than on the bunker seller's standard terms and conditions, it is essential that a purchaser is aware of the risks involved in the bunkering arrangement. In particular, heed should be given to the time limits for registering complaints about the fuel supplied as these are frequently very short and of varying lengths for different type of complaints.
In the early 1990s, BIMCO received numerous complaints from owners about problems with the quality and quantity of bunker fuels being supplied. In an attempt to regulate the industry and minimize disputes, in 1995 BIMCO published 'The Standard Marine Fuels Purchasing Contract', better known as 'Fuelcon'.
Regrettably, Fuelcon has not been widely used in the industry, as it is perceived to be biased towards the bunker purchaser. BIMCO is therefore considering revising the contract and it is likely that a documentary committee will be formed r this purpose in mid 1998. In the meantime, bunker purchasers can usefully use Fuelcon in its present format as a reference document when negotiating contracts with bunker suppliers.
In particular, as the majority of bunker disputes involve quality, quantity and delay claims, clauses 2, 3, 5, 7 and 10 of Fuelcon are helpful as part or all of these clauses can usefully be incorporated into bunker contracts. Clauses 5 and 10 of Fuelcon are especially well-drafted clauses, which set out a detailed procedure for the taking, labeling and analysis of samples - a critical element in the collection of evidence for bunker claims.
In addition it is also recommended that a purchaser consider the appointment of an independent surveyor to supervise the bunker supply. For the cost of a few hundred dollars, a surveyor should ensure that sampling is properly carried out, that any obvious quality problems are detected early on and that there is no shortage in the quantity of fuel supplied. This latter function alone can result in a substantial saving to an owner as the Intertanko publication 'White List', the leading consumer report on quantity risks from bunker suppliers, reported that in 1996 one in five bunker deliveries were significantly short on quantity and that the estimated cost to ship owners during this period was US$ 78 million.
In summary, although there is some indication that the bunker market is becoming more flexible in that both ship owners and bunker suppliers have indicated in recent years that they would like to work together to agree standard trading terms, there is clearly a lot of ground to be made up. Hopefully, when the revised edition of Fuelcon is published, it will assist in putting pressure on bunker suppliers to ensure that their terms and conditions make bunker purchasing a less risky business.
Owners’ liability for unpaid bunker bills
What happens when a bunker supplier tries to sue an owner for non-payment by a time Charterer? It all depends on where the action is brought. Three jurisdictions -Singapore, South Africa and the US show the widely differing situations in which owners can find themselves.
Singapore
Singapore is a party to the 1952 Arrest Convention so, in order to arrest a vessel in Singapore, a bunker supplier will have to satisfy two tests. First, he must satisfy the court that he has a claim 'in respect of goods or materials supplied to a ship for her operation or maintenance' as required by Section 3(1)(1) of the High Court (Admiralty Jurisdiction) Act of Singapore. Provided he supplied bunkers for that vessel's consumption, the first test is satisfied and the High Court's in rem jurisdiction can be invoked against the vessel.
The second test is to satisfy the court that the beneficial owners of the vessel at the time the action is brought (i.e. when the in rem writ is issued against the vessel) are liable in personam under Section (4)(4) of the Act as well.
In other words, for the bunker supplier to get the vessel arrested in Singapore, he has to show that the contract for the bunker supply was concluded with the owner, not the time Charterer. Unfortunately, this means that if the master signs the bunker requisition forms (BRF) and bunker delivery receipts (BDR) without any qualification or reservation as to his authority, then that could well be sufficient for the bunker supplier to satisfy the court that the contract was indeed concluded with the owner. This is because all that a bunker supplier would have to do in order to convince the court to arrest the vessel would be to show a prima facie case that his contract was actually with the owners.
This is the rule that appears to emerge from the 'Tanto Utania' [1995] 1SLR 767, where the court concluded that since the master had signed the BRF and BDR without qualification, none of the statements contained in those documents could reasonably be construed to deny that he was accepting liability for the owners. The owner's application for damages for wrongful arrest against the bunker supplier consequently failed even though there was every likelihood that the owner would have succeeded in defending the substantive claim of the bunker supplier at a full trial.
United States
The legal position in the US is the converse to that in Singapore. Under the Maritime Lien Act of 1971, a bunker supplier providing fuel on the orders of the owner or a person authorized by the owner has a maritime lien on the vessel. This arises the moment the goods or services are supplied or performed in the US.
However, there are still defenses that may be available to an owner faced with a maritime lien claim. In Maduro Travel Inc V SkandinaviskaEnskilda Banken (1995), the claimants had permitted arrears to accrue for between 6-9 months with respect to unpaid invoices for 'necessaries' that they had supplied to the vessel on the orders of the time Charterer. The Florida District Court found that the claimants' action in permitting the arrears of such magnitude to accrue was imprudent and prevented them from asserting any maritime liens against the vessel.
In addition, bunker suppliers will not have a protected lien for any delivery that they make after they have received notice and have actual knowledge of whatever 'prohibition of lien' clause that there may be in the Charter Party between the owner and the time Charterer who ordered the bunkers in question.
South Africa
Although South Africa is not a party to the 1952 Arrest Convention, the legal position there is in fact closer to that in Singapore than the US. In the circumstances, South Africa does not grant or recognize the creation of a maritime lien for the supply of bunkers and other necessaries to vessels.
Bunker claims - how can the P&I club help?
Sub-standard bunkers can cause severe damage to a vessel's machinery and significant delay. Unfortunately, neither the loss of time nor the damage to hull will fall within the owner's P&I policy. Damage to the vessel's machinery can give rise to a claim on the vessel's hull and machinery policy but, if the damage is relatively minor, the cost of making it good may well not exceed the deductible.
In addition, though the loss of time can be considerable this would not necessarily be insured. An operator may have identified that the vessel has been supplied with sub-standard bunkers and take steps to de-bunker the off- specification fuel and replace it with fuel oil of the correct specification. This process may take several days and would form the basis of a claim against a time Charterer where it was a term of the Charter Party that the Charterer provide and pay for fuel oil.
Provided ship owners have defense cover with their P&I club, the costs of gathering evidence and arbitrating or litigating such a claim against Charterers would fall within the scope of cover. In addition, most clubs' defense rules will provide owners with cover in respect of the cost of arbitrating or litigating a hull claim where the damage to the vessel falls below members' hull and machinery deductible in force at the time the damage was caused.
Another area in which defense cover would assist a ship owner is in respect of claims against underwriters. For example, where the hull and machinery underwriter unreasonably refuses to pay an owner in respect of damage to the vessel, the defense class would support a claim against the underwriter by the owner to obtain payment under the policy. The same principle would also apply to a Charterer seeking reimbursement under a damage-to-hull policy.
Charterers can also benefit from defense cover. They may well have good defenses to an owner's claim for damage and loss of time arising out of the supply of allegedly off -specification bunkers. Moreover they may in their own right wish to pursue a claim against suppliers having been obliged to compensate owners in respect of their losses.
Most P&I clubs can also arrange separate damage-to-hull cover for Charterers providing cover in respect of liabilities towards owners for damage to hull and sometimes the associated loss of time arising during the period of the time charter. Commonly, the clubs will reinsure this risk with underwriters but will assist with day-to-day handling of the damage-to-hull claim.
The assistance that can be provided by a defense class to owners or Charterers in respect of bunker quality claims is therefore extensive. However, the effectiveness of this assistance will, as always, depend on the quality of the evidence gathered.
Perhaps the single biggest service that a defense class can provide its members, who suspect that they may have been supplied with off-specification bunkers, is prompt advice relating to the evidence that will need to be collected if such a claim can be successfully fought or defended. Statements will need to be taken from the relevant personnel such as the chief engineer, the master and any surveyors who are in attendance during the bunkering operation. Samples will need to be collected and arrangements made for them to be analyzed.
In cases where there has been engine damage, independent surveyors will have to assess the nature and extent of the damage and express an opinion as to the probable cause of the damage. Moreover operational decisions will have to be taken. Should potentially off-specification bunkers be de-bunkered and replaced with bunkers matching the charter specification or should owners run the risk of burning the fuel? Can owners be confident of recovering the loss of time and expense involved in a de-bunkering operation from their Charterers based on the clauses they have in their Charter Party?
Advice on all these matters can be given at the time by the defense class. The quality of the evidence and the decisions taken at the time the bunker problem arises, will be crucial to a party's success in prosecuting or defending a claim at a later stage. It is probably here that a defense class can be of most assistance.
Bunkering from barge or shore
Successful bunkering is dependent on good planning. An exchange of details between the bunker supplier, the ships' agent and the ship is the foundation stone of that planning. All parties should agree on the delivery location, time of supply and grades required. The bunker barge and ship should exchange information regarding the type and size of bunker connections and, when deliveries are made off port limits, agreement on the precise position, acceptable weather, swell and tide conditions is essential.
The bunker barge should safely moor alongside the ship prior to any transfer of equipment or personnel. The barge should ensure safe access and safe delivery in all states of tide, weather and the ships' trim. Safe access, particularly if a large differential exists between the freeboards of the two vessels, must be considered a priority. If access cannot be safely achieved it should not be attempted.
Information relating to all emergency arrangements, bunker transfer sequence, quantities, grades, sampling and pumping rates must be fully discussed by both barge and ship representatives. This exchange of information should preferably be confirmed in writing. The necessity for good communications cannot be over emphasized and to facilitate this it may be necessary to transfer a ship's radio / walkie-talkie to the barge.
The barge should make safety data sheets, for the products to be delivered, available to the receiving ship. This is particularly important when the fuel supplied is limited to 'local' specification. However, it is often such locations, which are most reluctant to comply with this requirement.
The barge should offer ship's staff the opportunity to witness and check opening dips or meter readings as well as temperatures and, most importantly, fuel sampling. Barges tanks or compartments should be calibrated, with reference heights and tank numbers clearly displayed. The barge should supply calibration tables for use in the bunkering process and these must correspond with the tanks being checked. Tanks should be dipped or ullaged using steel tapes, which are in good condition and not kinked or buckled (road trucks and some small barges may be equipped with din sticks).
Hose and flange connections must be fully bolted with the required gaskets fitted. Clamps or other devices, not specifically designed for the job, should not be used to secure a connection. Bunker transfer hoses should be rigged to withstand any movement due to pumping and/or changes in the vessels' attitudes. The Singapore Bunkering Procedures (see page 3) stipulate what flanges should be carried on approved barges.
The barge should carry documentation and evidence identifying the dates when transfer hoses were last tested and these dates should also be indicated on the hose itself. Any person onboard ship that has concerns about the condition of hoses should raise such concerns with the duty officer or chief engineer, who should then ask to see evidence of recent hose testing and act accordingly.
The barge crew should ensure barge scuppers or save-alls are plugged and oil-spill protection equipment is deployed to limit the effect of any accidental spillage of oil.
Barge personnel should maintain a diligent and effective watch throughout the delivery; tank levels must be constantly monitored to ensure any changes are in accordance with expectations; and a watchful eye should also be kept on the water surrounding the barge and ship so as to ensure any spillage is recognized as quickly as possible.
On completion of the delivery, representatives from the receiving ship should be invited to check finishing dips, cheek meter readings, receive samples and check the calculation of final quantities delivered. Samples should be sealed and labeled in the presence of the ship's representative.
The final documents offered to the vessel crew should show details of the fuel, its volume, weight, density, viscosity, flash point and sulphur content. If there are aspects of the delivery that are unsatisfactory, especially quality and quantity issues, a notice of protest must be issued to the barge master. The notice of protest should give details of the problem and a copy should be retained on board for reference and submission to the bunker supplier.
Marine fuel – handle with care!
Many substances onboard ship which are regularly handled by crew - including fuel oil, diesel oil and gas oil -are potentially hazardous. However, any dangerous characteristics of fuels and lubricants should be described in the Material Safety Data Sheets (MSDS) provided by the suppliers.
Many ship board personnel are well aware of the risks involved in handling marine fuels and the injuries that may result, but they continue to happen. Recent studies indicate a large number of skin complaints and dermatitis-related injuries. Furthermore, the UK Government has recently published a requirement that masters and crew should also be made aware that materials such as residual fuel oil, marine diesel oil and gas oil contain carcinogenic (cancer-causing) substances known as ‘polyaromatic hydrocarbons' (PAHs).
The MSDS should contain a wide range of information including protective equipment requirements and advise on the use of barrier creams. It should also describe the actions to be taken if products are accidentally swallowed or make contact with skin or eyes.
There can be no doubt prevention is better than cure. Always ensure adequate personal protective equipment is available and actually worn. Use barrier creams, wear clean overalls and cover all limbs and torso. When handling fuels and fuel-coated equipment, wear suitable protective gloves and goggles and non-slip, static-free protective shoes.
In addition to causing skin problems, residual/bunker fuel oils have other unpleasant characteristics. In order to retain their fluidity for pumping and delivery, fuel oils are heated. As a consequence fuel pipes, pumps, tanks and other equipment used for fuel oils can often become very hot. Steam tracing lines on fuel transfer systems are a constant cause of bums to seafarers.
The Singapore Bunkering Procedure – a universal model
The Singapore Bunkering Procedure (SBP) is a unique set of guidelines which all ship owners could well find helpful to follow in their bunkering operations, irrespective of where the bunkers are actually supplied.
The SBP was a world-first when it was introduced in 1992. It was developed in collaboration between the Singapore National Shipping Association (SNSA) and the Port of Singapore Authority (PSA). In addition, contributions were made by DNV and by a number of local ship owners.
Prior to the introduction of the SBP Singapore had, by common consensus, a notorious reputation for the quality of its locally supplied bunkers. The SBP was thus designed to curb the unsavory practices of some local suppliers and to provide a model for bunker delivery operations. In addition, and to give the procedure some real teeth and menace, all bunker suppliers in Singapore need to be licensed by the PSA and now need to comply with the SBP as a licensing requirement as well.
The procedure expressly requires any noncompliance, by any party, to be reported in writing to the PSA. An owner with a claim against a bunker supplier who has also failed to comply with the SBP would thus not only have civil remedies available against that supplier, but could possibly also have the option of presenting a complaint to the PSA as well. This threat of a complaint to the PSA, and the effect that it may have on a bunker supplier's license to supply bunkers in Singapore, is likely to encourage suppliers to be more flexible and accommodating in their approach to disputes with owners.
However, the SBP only applies where bunkers are delivered to ships in the Port of Singapore. Having said that, it is also important to note that the SBP does not actually alter the contractual obligations of the buyers and suppliers of bunkers. What it instead seeks to do is to 'fill in the gaps' in the contract between the buyers and the suppliers, where that contract is otherwise silent on the procedure that should be followed during a bunkering operation.
An important feature of the SBP is the numerous checks and safeguards that it provides for during the bunkering operation, for example:
- the bunker requisition form, which will contain all the necessary details/specifications of the bunkers to be supplied;
- the cargo officer (on the bunker tanker) has to declare the measurements and contents of the non-cargo tanks and spaces on board the bunker tanker before the bunkering operation commences;
- the cargo officer has to invite the chief engineer to witness the opening gauge (or meter reading) and the taking of the cargo temperature of all the cargo tanks of the bunker tanker before the commencement of the bunkering operation;
- the tank gauging procedure sets out in detail the manner in which the gaugings and the temperature readings have to be taken;
- the detailed sampling requirements and procedure ensure that a representative sample is taken during the bunkering operation, if the bunker's supplier and the buyer agree that the sampling should take place on board the vessel rather than on the bunker tanker, then the SBP cites the DNVPS line sampler as an example of the type of equipment that could be fitted at the vessel's manifold;
- the chief engineer is required to have a crew member overseeing the entire bunkering operation;
- on the completion of the bunkering operation, the cargo officer again has to invite the chief engineer on board the bunker tanker, this time to witness the closing gauge (or meter reading) and the cargo temperature of all the cargo tanks of the bunker tanker;
- in the event that there is a quantity dispute, the chief engineer or surveyor who is engaged shall be allowed to inspect or gauge all non-cargo tanks on the bunker tanker;
- the delivered quantity - as set out in the bunker delivery receipt (BDR) - shall be based on the bunker tanker's measurements and calculations as witnessed by both the chief engineer and the cargo officer;
- in addition to acting as a record of the quantity delivered, the BDR also acts as a record that the samples have been properly taken, in accordance with the sampling requirements and the sampling procedures of the SBR.
In the event that there are any disputes relating to the quantity of bunkers delivered, then the SBP stipulates that the chief engineer should raise a note of protest (in the prescribed form) that should then be signed and stamped by both parties. A copy of the note of protest, together with a copy of the BDR, should then be sent to the SNSA and to the PSA, within 14 days after the bunker delivery. According to the SNSA, however, these notes are only intended to keep both them and the PSA informed about the number and type of disputes that there are in Singapore.
The time frame for serving the notes of protest may not therefore be intended to operate as a time bar against recovery. This view appears to be supported by the choice of the language used in the clause in question. Having said that, there is no legal authority on this point. Accordingly, and to be on the safe side, particularly if an owner is also intending to raise a complaint with the PSA (regarding the bunker supplier's non-compliance with the SBP) as well, it is imperative that the time frame is strictly complied with.
In the event of any disputes relating to the quality of bunkers delivered, the SBP stipulates that the ship owner/Charterer or buyer should tender a complaint in writing to the bunker supplier within 30 days (or such extended period as may be agreed between the parties) after the bunker delivery. A copy of the complaint, together with a copy of the BDR, should also simultaneously be lodged with the SNSA and the PSA.
Bunkering procedures and the ISM Code
Throughout the text of the ISM Code there is not a single mention of bunkering. Indeed the title 'International Safety Management (ISM) Code' would not suggest that bunkering was of any particular relevance. However, it is important that we recall the full title of the Code: 'The International Management Code for the Safe Operation of Ships and for Pollution Prevention' as adopted by the IMO Assembly at its eighteenth session on 4 November 1993 by Resolution A.741(18).
Bunkering as a potential source of pollution is therefore a key operation within the framework of the ISM Code and there is a clear requirement to prepare written procedures for, and to implement those procedures within, the safety management system (SMS). The functional requirements for the SMS are set out in Section 1.4 of the Code and, in part, state the following:
Every Company should develop, implement and maintain a safety management system (SMS), which includes the following functional requirements:
1. a safety and environmental policy;
2. instructions and procedures to ensure safe operation of ships and protection of the environment in compliance with relevant international and flag state legislation; ...
Clearly every shipping company must prepare its own procedures for bunkering operations but these must meet at least the minimum standards of their relevant flag administrations. Section 2 of the Code specifically addresses the 'Safety and Environmental Policy' in the following terms:
2.1 The Company should establish a safety and environmental protection policy which describes how the objectives given, in paragraph 1.2 will be achieved.
2.2 The Company should ensure that the policy is implemented and maintained at all levels of the organization, both ship’ based as well as shore based.
It is important to remember that when the Code uses the word 'should' it really means 'must'. Any bunkering operation must therefore be carried out in a safe manner and also with due regard to caring for the environment, ie taking all steps necessary to prevent pollution. Of course this will not be new to the responsible shipping companies, whose officers and crew, have always adopted such practices. The difference now, under the requirements of the Code, is that those good practices need to be written down into formal procedures, implemented within the SMS and compliance verified by way of internal and external audits. The Code also places a responsibility on the Company to define clearly and document the master's responsibility with regard to implementing the safety and environmental policy - see Section 5. 1.1 of the Code.
Section 6 deals with 'Resources and Personnel'. Under this section, although bunkering is not mentioned specifically, there is a clear requirement on the Company to ensure that:
- properly qualified officers and crew are employed who have the necessary experience and competence to safely carry out the bunkering operation;
- new personnel and personnel transferred to new assignments are given proper familiarization with their duties in the bunkering operation;
- all personnel have an adequate understanding of relevant rules, regulations, codes and guidelines with regard to the bunkering operation;
- any training which is required is identified and provided to equip the relevant personnel with the knowledge necessary to safely carry out a bunkering operation;
- any procedures are available in a language understood by the personnel involved in the bunkering operation and that those personnel are able to communicate effectively with each other in a common language.
With regard to the last point it is also vitally important that all those involved in a bunkering operation are able to communicate effectively with each other and this obviously includes not only the ship's personnel but also the personnel from the bunker suppliers.
Section 7 deals with the 'Development of Plans for Shipboard Operations' and states the following:
7. Development of plans for shipboard operations
The Company should establish procedures for the preparation of plans and instructions including checklists for key shipboard operations concerning the safety of the ship and the prevention of pollution. The various tasks involved should be defined and assigned to qualified personnel.
Clearly bunkering operations must rank as a special shipboard operation for which such plans and checklists must be developed and implemented as part of the SMS.
In addition, because bunkering is potentially a hazardous operation, it is vitally important that not only are plans and checklists in place to ensure that the whole operation is carried out safely and that the environment is protected but also that plans and procedures are in place to deal with problems or emergencies should they arise. The basic requirements in this regard are set out in Section 8 which deals with 'Emergency Preparedness':
8. Emergency Preparedness
8.1 The Company should establish procedures to identify, describe and respond to potential emergency shipboard situations.
8.2 The Company should establish programmes for drills and exercises to prepare for emergency actions.
8.3 The safety management system should provide for measures ensuring that the Company's organization can respond at any time to hazards, accidents and emergency situations involving its ships.
It is important therefore that not only should procedures be in place to respond to an emergency situation which may arise during a bunkering operation; for example a spill of the bunker fuel, but also that the personnel involved have prepared for such emergencies by carrying out drills and exercises including the use of appropriate equipment.
It is hoped that with the correct implementation of the SMS, accidents and hazardous occurrences can be avoided during bunkering operations. However, if they do occur or even if a situation develops where an accident or hazardous occurrence almost happened - so called near-accidents, near miss or a non-conformity with the procedures was identified, then these should be recorded, reported and analyzed. The intention is continually to improve the SMS by learning from past mistakes, or near mistakes, and making sure that they do not recur by implementing corrective action.
Section 10 requires the Company to ensure that the ship is properly maintained and obviously this will apply to those parts of the ship used in conjunction with the taking of bunkers. Indeed the ship's equipment, which will be used during the bunkering operation, will enter a particularly important category as highlighted in Section 10.3:
10.3 The Company should establish procedures in the SMS to identify equipment and technical systems the sudden operational failure of which may result in hazardous situations. The SMS should provide for specific measures aimed at promoting the reliability of such equipment or systems. These measures should include the regular testing of stand-by arrangements and equipment or technical systems that are not in continuous use.
Clearly, as far as bunkering is concerned, then pipelines and valves will be identified as falling within the requirements of Section 10.3 and must not only be maintained but also subjected to testing before use. Bunker tanks, air pipes, sounding pipes will also need to be included. There will also be a knock-on effect when considering the main engine and auxiliaries which will be included within the category of equipment falling under Section 10.3 which will depend upon the quality of bunker fuels.
Although it is not specifically referred to in the ISM Code - the operation of taking bunkers will involve every section of the Code and it is therefore crucial that its full significance is appreciated when developing and implementing the SMS.
Bunker disputes – the importance of collecting evidence
The primary concerns of ships' staff when bunkering has historically been to ensure that the process was safe, efficient and environmentally friendly. Today, sea staff have another vitally important role: the collection of evidence so as to enable an owner to defend or make a bunker claim.
If owners are to avoid financial penalties they should ensure that they are able to present good contemporaneous evidence - and it is the mariners who are responsible for collecting this evidence. If fuel oil quantity or quality problems arise, then the mariners will be required to present that evidence. It may appear burdensome collecting evidence at every bunkering operation but it is much harder to collect evidence after an incident.
An owner must be able to provide evidence of:
- bunker system maintenance and testing
- pre-arrival checklist
- bunker start-up and completion times
- sounding/ullage records
- bunker tank gas readings
- compliance with procedures and best practice
- completed bunker checklists
- log book entries (deck, engine and scrap log books)
- oil record books
- all bunker-related communications.
Quantity problems can be avoided if comprehensive pre-loading and completion surveys are undertaken. When conducting bunker surveys it is important that trim corrections, temperature readings and volume corrections figures are fully considered.
In order to calculate the weight of fuel loaded the chief engineer must know the density of the fuel loaded. At the time of bunkering, and unless the ship has a means of determining the density, the ship must assume the density given by the supplier to be correct. On completion of bunkering the chief engineer should sign the bunker delivery receipt (BDR) for volume at observed temperature only' simply because without confirmed knowledge of the fuel density it is impossible to determine the weight of fuel lifted.
Bunker sampling and fuel analysis are important evidence and much will depend on the analysis of the representative sample. The objective of fuel oil sampling is to try to obtain a truly representative sample and this is best done via automatic and continuous drip methods. Details of sampling, size of sample, location and method must be agreed by representatives of all parties. Sampling should be conducted in a methodical manner.
All samples must be allocated numbers, carry detailed labels and samples should be retained if owners are to avoid serious consequences.
If the bunker supplier offers another sample, which the ship has not witnessed, then this should be accepted by the chief engineer but when signing for this sample he should state for receipt only, source unknown'.
If a dispute arises it is important to obtain laboratory analysis results against internationally accepted standards. Test results can give early indications of potential fuel problems as well as guidance with onboard fuel treatment. With detailed analysis results it may be possible to run a bunker dispute claim - without it is very difficult.
Once bunkers have been loaded they require onboard treatment by ships' engineers to prepare and care for the fuel. In the event of a dispute, records of fuel treatment are required including details such as which tanks are/have been used, when they were used and for how long they were used. Engineers must be able to recognize early indications of problematic bunkers and act accordingly. It is equally important to record all actions taken and their impact. Damaged components should be retained on board and photographic evidence/video evidence should be collated along with any survey reports.
The importance of collecting contemporaneous evidence, taking statements from the ship's complement and retaining damaged components cannot be over-stated. Bunker disputes can and often are very costly and ship owners can incur expensive, complex difficulties. Relevant evidence may enable ship owners to make a recovery from suppliers otherwise the money will come from their own pockets.
Further guidelines on the collection of evidence can be found in the recently published guide book 'The Mariner's Role in Collecting Evidence’ which is available onboard most vessels technical library as well as ashore offices.
Bunker dispute – case study
The incident
A Panamax bulk carrier loaded bunkers, which led to a bunker dispute, which was handled by the FD&D department at the North of England. The dispute arose out of a time charter on an NYPE form for a one-time charter trip. In order to comply with the terms of the charter party and have sufficient bunkers onboard for redelivery, the vessel was instructed by Charterers to load bunkers at Singapore. The Charter Party clearly stated that fuel with viscosity of 180 cSt should be loaded. It later transpired that 380 cSt fuel oil was delivered.
What happened and what went wrong?
A bunker survey was conducted prior to any bunker transfer from the barge to the ship and it was determined that all new bunkers were to be delivered to empty tanks. During the bunkering operation representatives from the bunker barge repeatedly attempted to interfere with the sampling process. It was agreed that in accordance with the terms of the Singapore Bunker Procedure (SBP) sampling would be by continuous drip method. A DNV approved sampler was fitted on the entered ship but the parties wanted a sample larger than the 5-liter cubitainer fitted. The parties agreed to take a sample to a clean bucket instead.
The attending DNV surveyor set up the sampler to his satisfaction and then prepared to check the bunkering system. The surveyors’ suspicions were aroused when he saw two men from the bunker barge loitering on deck. When the surveyor returned the bucket collecting the sample was found to be much larger than expected and contaminated with gas oil. Two empty plastic sample bottles were found nearby. The contaminated samples raised concerns on the ship and this were compounded when the surveyor witnessed a member of the barge crew deliberately contaminate a second sample. The barge personnel also deliberately tricked the chief engineer into signing the bunker delivery receipt (BDR) by inserting it with other documentation to be signed.
In consequence of the events described, the ship owner arranged for additional sampling at the vessel's next port of call, which confirmed the ship’s fears that the bunkers were significantly outside the Charter Party specification with, regards viscosity. The vessel was subsequently redelivered to the owner, which decided to divert the vessel to Singapore to debunker.
Subsequent sampling revealed that the barge had attempted to in-line blend fuel oil and gas oil, as it did not have 180 cSt fuel for delivery to the vessel. It later transpired that the bunkers loaded to four empty shipboard tanks ranged from 214 cSt to 375 cSt. This not only led to problems of fuel, which was too viscous but also problems of a non-homogeneous fuel and the likelihood of operational problems.
The owner's claim was for damages for time and costs at Singapore, the costs in relation to debunkering, replacement bunkers and associated costs. The original purchase price of the bunkers was US$ 90 per tonne and they were sold at US$ 60 per tonne.
The case eventually went to London arbitration where the Charterer eventually conceded the bunkers did not meet the contractually agreed viscosity. The evidence put forward by the ship owner was sufficient to enable it to show that the only way the fuel could be off -specification was if it was delivered in that condition by the bunker barge.
The Charterers, by way of defense, claimed the owner could have mitigated the loss more effectively by preheating the fuel oil and burning it in the ship's engines. The mitigation argument was rejected because the 380 cSt fuel oil required substantially higher heating to obtain the correct injection viscosity than 180 cSt. The experts agreed that the ship had insufficient heating capacity to heat the fuel and this was the reason owners had inserted a detailed bunker clause in the charter party.
The Charterer also alleged that, because the chief engineer had not inserted comments in the BDR the ship owner had waived their rights to claim that the intermediate fuel oil was outside the Charter Party specification.
During cross examination the Charterer's expert witness conceded that if an injection viscosity of between 10 cSt and 15 cSt, the operating limits set by the engine builders, could not be achieved then there was a definite risk of reduced efficiency and the possibility of long-term damage could not be ruled out. The heating capacity of the ship's plant meant that the best injection viscosity that could be attained was about 19 cSt.
A fuel of 380 cSt would need to be heated to some 139.5 °C to give an injection viscosity of 10 cSt and 125° C for a viscosity of 15 cSt at injection. On the other hand, a fuel of 180 cSt would require pre heating to 126.3° C and 112° C to give injection viscosity's of 10 cSt and 15 cSt respectively, well within the heating capacity of the plant on the entered vessel.
The tribunal arbitrators determined that on the basis that the owner did not get the fuel to which it was contractually entitled, it should not be exposed to the risk of further loss in consequence of the Charterer's breach such as damage to the main engine, breakdown or consequential claims under the next Charter Party fixture.
To quote from the award 'although such problems were not inevitable, there was a risk of all or some of the possible consequences occurring. In contrast, any such problems were avoided by taking the simple, trouble-free and relatively cheap cost of replacing defective bunkers. One would be hard pressed to say they acted unreasonably'.
The arbitrators also rejected the Charterer's arguments relating to the clean BDR. Whilst the tribunal acknowledged the chief engineer acted in a rather naive manner by not alerting the Charterers immediately to the problem with the bunkers, the tribunal did not find that the chief engineer had acted unreasonably and they did not feel that it had made any difference.
What can we learn from this incident?
The diligence and attention to detail exercised by the ship's officers and crew as well as by the attending surveyor enabled the ship owner to collect sufficient evidence to run a bunker dispute and to take the decision to divert the ship and de-bunker.
The ship maintained detailed records, log book entries and samples. The owner contacted the P&I Club in good time which allowed statements to be taken from the ship's staff and gave the owner sufficient time to follow guidelines from them.
The importance of detailed bunker clauses in the Charter Party cannot be over-emphasized. Additional clause 66 was perhaps the most instrumental in the case. That particular clause read:
'At ports where such grades are available Charterers to supply intermediate fuel oil of maximum 180 cSt within standards CIMAC Grade E25 (ISO 8217 - 1987 (E) Grade RME25) and marine diesel oil within ISO 8127 -1987 (E) designation ISO-F-DMB.
Where such grades are not available Charterers are to supply IFO of maximum 180 cSt within BSMA 100 - 1987 Grade M6 and MDO within BSMA 100 - 1989 Grade M3. Specifications subject to Masters / Chief Engineers approvals which not to be unreasonably withheld. Owners use Veritas Petroleum Services for determining bunker quality, however; Charterers have the right to nominate their own surveyor to determine bunker quality in the case of need.'
The case also highlights the importance of signing documentation on board ship. Particular care must always be taken if comments need to be added to register problems or complaint.
Remember, keep the paperwork correct and collect the evidence.
Bunker sampling – what is required
It is difficult to over estimate the importance of accurate and verifiable analysis of marine fuels and this can only be achieved if a representative sample is obtained. It is vital that a truly representative sample is obtained but this can be very difficult particularly if the bunker stem is many thousands of tonnes.
However, modern in line, continuous drip samplers, such as the Det Norske Veritas Petroleum Services (DNVPS) in line sampler, can help ship owners overcome this problem.
A non-representative sample can lead to inaccurate analytical results and incorrect information and advice being passed to ship owners and their staff. The method of operation of these samplers is relatively simple. A needle valve on the inter flange mounted sampler is used to control the drip rate during the sampling process. The sample is collected in a disposable five-liter plastic container, which is replaced for each bunker sampling operation. The container, which is fitted with a security seal, is removed from the sampler on completion of sampling.
The container is thoroughly shaken, to ensure a fully homogeneous sample, before the sample is decanted to one-litre sample bottles. Each bottle must then be individually labeled, sealed and fitted with tamper proof seals. A sample seal number is then allocated to each sample, which facilitates sample custody and provides an audit trail.
One sample should be sent to a shore based testing laboratory, whilst one sample should be given to the ship and shore representatives. Any remaining samples, which are not required elsewhere should be retained on board ship in a safe place such that they can be used as evidence if any bunker related problems arise.
Fuel analysis – a test for quality
Since the fuel crisis' of the early 1970's the standard and quality of heavy marine fuels has deteriorated whilst the incidence of engine problems, bunker disputes and under performance, over consumption claims has increased substantially. Today problems of industrial waste and used lubricants in marine fuels are proving cause for concern.
One method of preventing machinery damage claims, engine breakdowns, engine failures and potential off hire disputes is to ensure the fuel onboard ship is up to standard. A comprehensive fuel analysis can provide the necessary cheeks required.
Shore based laboratory analysis depends on high quality representative samples being sent ashore for analysis. Thereafter analysis can identify potential problems and provide bunker specialists with the accurate information they need if they are to give sound advise to ship owners and their sea staff regarding effective onboard fuel treatment. If the fuel treatment is effective then complete and efficient combustion is achievable.
Routine marine fuel testing, in shore-based laboratories, is arranged to determine:
- density
- viscosity
- water content
- micro-carbon residue
- sulphur content
- sodium content
- ash content
- vanadium content
- aluminum content
- silicon content
- total sediment existent
- pour point
- flash point
- specific energy (calculated)
- calculated carbon aromacity index
Additional tests are available to test for the presence of other metals and to determine if two fuels are compatible. Problems of incompatible fuels are the cause for serious concern for those ashore and afloat.
To ensure that the fuels that are used on your ships are up to standard have them tested.
Flammability of fuel-oil head spaces
A major problem with marine residual fuels is that of flammability. Although residual fuel oil often requires to be heated to enable fuel transfer and improved pumpability, this can create a flammable vapour in the space between the fuel oil level and the top of the tank - the 'head space'. In these instances, the flash-point of the fuel itself will bear no relationship to the flammability of the vapour above it. Accurate measurement of the flash-point of this vapour can be difficult.
The vapour space above residual fuels oil and some gas oils may also contain hydrogen sulphide (H2S). If inhaled, this flammable gas is especially dangerous as it is likely to impair the sense of smell initially and ultimately lead to unconsciousness.
To guard against the flammable gas hazard with fuel oil, care should be taken not to apply excessive heat and to conform to relevant codes of practice. Always be wary of any open hatch covers on fuel oil bunker barges.
Extreme caution should also be exercised to avoid the generation of static electricity when ullaging or sampling fuel oil, and there should be no ignition sources in the vicinity of fuel tank vent pipes. Flame screens and traps fitted to vents should be in good condition and the maintenance and upkeep of this equipment is vital. When filling empty or near-empty fuel-oil tanks, heating coils should be cool and shut down. All residual fuel oil tank head-spaces should be classified as hazardous.
Another critical aspect of the handling of fuels on board ship is entry into bunker tanks for inspection and maintenance. The importance of following established safety procedures cannot be overstated. All procedures must be followed and all atmospheres must be tested prior to entry.
Bunker sample labels – often the weak link
The importance of obtaining a representative bunker sample has been emphasized many times. However, on numerous occasions, ship owners go to a great deal of expense and effort to obtain representative samples only to find that sea staff fail to complete the requisite sample bottle labels.
The importance of the correct labeling of bunker samples cannot be over-stated. Each sample must be allocated a sample number and the bottle labels should contain the following information:
- ship name
- barge or installation name
- type of fuel
- date of loading/date of sample
- signature of supplier's representative
- signature of receiver's representative
- sampling method
- seal number.
The seal numbers will be different for each sample distributed. Samples will be passed to the ship, the supplier and to laboratories for analysis. A list of these seal numbers will be distributed to all parties and this information - as well as the samples - must be recorded and retained.
Without correct labeling and an ability to trace samples and analysis reports, fighting a bunker dispute can be very difficult. Be warned - be labeled.
Above text of guidance apparently from a leading P&I Club with some lines added, some modifications to make it general from my side, but as I said, information, knowledge is available freely on the internet. Construing it, finding it and applying it is what would make anyone different. Most important, learning from it, which I did, and now putting up here for others to learn.
