• Home
  • Relevant Topics
  • IAA PortNews holds round-table meeting on regulatory framework for ship-to-ship cargo operations
  • 2016 June 27

    IAA PortNews holds round-table meeting on regulatory framework for ship-to-ship cargo operations

    Ship-to-ship cargo transshipment at the anchorage of Russian seaports is an issue of high importance and demand. Offshore transshipment and all the related service operations are regulated by the federal legislation. The Ministry of Transport and other federal authorities work to improve the legislation, primarily in the interest of fair players. The issues related to establishment of offshore transshipment facilities and their operation were covered at the round-table meeting held by IAA PortNews in Vladivostok.

    Ship-to-ship transshipment of cargo is regulated by Order No 68 of RF Ministry of Transport. Amendments introduced into the Order have already been registered by the Ministry of Justice of the Russian Federation and will come into effect within several days. The document particularly regulates the work of offshore transshipment facilities (RPK) where, apart from cargo transshipment, bunkering operations are held more and more often.

    Throughout the year of 2014 and half of 2015, most offshore bunkering operations were held in seaports of the Primorsky Territory. To avoid falling under the Customs’ requirement on dues applicable to bunkering of transit vessels bunkering companies used to initiate minor cargo operations like transshipment of 1 tonne of bottled water or 100 kg of nails. According to the documents, vessels made calls for loading/unloading operations allowing for replenishing of marine stores without payment of dues.

    In fact, the issue is not only and not so much in arrangement of points for ship-to-ship transshipment operations but rather in specific customs clearance of bunker. Bunkering and agency companies found a way to avoid customs requirements through arranging pseudo-cargo operations. If bunkering operation is announced officially it falls under the requirement of Order No 68 and can be held at points specified by Port’s Compulsory Regulations and, consequently, fall under the requirement on payment of fuel dues. While escaping the customs requirements the companies fall under the requirement on offshore cargo operations. Many of them would like to escape these requirements as well.

    Amid the changing bunker prices the interest of transit vessels to bunkering at the Primorje ports has plunged from the second half of 2015, bunker sales in 2015 fell by 17%. The companies having no reasonable managers able to analyze commodity markets began to blame the fall of sales on maritime authorities.

    As a recognized analytical agency which has been monitoring the bunkering market of Russia for 12 years and has accumulated large volumes of analytical data, IAA PortNews initiated a round-table meeting in Vladivostok involving the businesses, executive authorities responsible for bunkering and stevedoring activities, as well as media. The round-table meeting arranged by IAA PortNews was sponsored by Tranzit-DV and Vostokbunker. Nevelskoy Maritime State University hosted the meeting.

    Interaction mechanism

    Vitaly Klyuev, Director of the Department of State Policy for Maritime and River Transport of Russia's Ministry of Transport, started the meeting with a proposal to discuss not only the arrangements for offshore cargo operations but the interaction mechanisms as well.

    He explained that Order No 68 is still the basic document to regulate this kind of activity. Amendments introduced into the Order are mostly about technical elaborations. For example, the points specified for ship-to-ship transshipment operations should be included into the Port’s Compulsory Regulations.

    As of today, bunkering of transit vessels calling at Russian ports for any cargo operation can be performed either at the berth or at a dedicated RPK (offshore transshipment facility).

    The position of the regulator (Ministry of Transport) was presented by Vitaly Klyuev: “We are always for liberalization, expansion of the business and its opportunities. There is no game with such points as local media used to interpret. There is a mechanism set forth by the Order No 68.

    To arrange an RPK it is necessary to select a point for offshore transshipment. This place should, of course, meet the dimensions of vessels involved in the operations and fit in the geography of the port’s water area. “If there is not enough space in the water area and its expansion is required which is also within our authority, an entrepreneur should submit the elaborated proposal to the Ministry of Transport,” explained Vitaly Klyuev. The proposal should meet the navigation and hydrometeorological requirements, the process scheme should be safe. Introduction of amendments into the Port’s Compulsory Regulations takes 2 to 4 months depending on the degree of elaboration.

    The quality of elaboration can facilitate the establishment of a new RPK.  The role of a Harbour Master is quite high here as he is in charge of safety at a seaport. Therefore, Harbour Master’s conclusion is important for the Ministry of Transport. “We pay attention to it by I don’t mean that we always agree with it. If we have any doubts in the Harbour Master’s position we can request for an independent  review, there were cases like that,” said Vitaly Klyuev.

    Following the round-table meeting arranged by IAA PortNews, Harbour Master of the Primorsky Territory’s seaports were given instructions to look into the demands of the businesses and to provide Rosmorrechflot and the Ministry of Transport with proposals on expansion of the seaports’ limits.

    1,000-ruble fine is not a remedy

    There is a practice when an agency company informs a Harbour Master on replenishment of stores or bunkering (does not fall under the Order No 68) while the customs is informed about a ship-to-ship cargo transshipment. This can be revealed by Harbour Masters only when departure documents are provided so the violation cannot be prevented. The only thing that can be done is to fine an operator, RUB 1,000 maximum! The meeting participants wondered if there were other measures to undertake against operators of vessels involved in illegal cargo operations?

    “We know about this situation and we see a solution”, said Vitaly Klyuev.

    Article 79 of the Merchant Marine Code allows Russia’s Ministry of Transport issue a document to set forth the criteria for prohibiting vessels from entering seaports of the Russian Federation. One of the criteria can be multiple violation of the legislation. “After two violations the vessel will not be allowed to call at the port. If a vessel operates at the port on a permanent basis such a violator will not be included into a daily schedule of vessels’ movements and berthing. This idea is under discussion today and it can be issued as an order of RF Transport Ministry within several months,” he explained. 

    Offshore transshipment facilities need OSR plans

    Another important aspect of RPK operation is the plan of oil spill response activities.

    Amendments introduced into the legislation on shelf operations have led to the situation when OSR plans developed for bunkering operations should obtain an additional state environmental approval.  Some deputies supported by energy companies have twice proposed that the State Duma consider the draft law supposed to call off the requirement on obligatory state environmental expert approval (SEEA) of oil spill response activities plans for bunkering companies. The Duma has twice rejected the bill. The Ministry of Transport has selected a different way. “We suggest a different mechanism for evaluation of emergency rescue readiness”, explained Vitaly Klyuev. The Ministry of Transport suggests evaluating the readiness through exercises. “We want to make sure that the plan involves real and sufficient resources,” said the representative of RF Transport Ministry.

    This legislative initiative will be considered during the autumn session of the State Duma, perhaps by the deputies of the new parliament, together with the amendments into the Law on Seaports of the Russian Federation.

    Nadezhda Malysheva.

    Photo release >>>>