NOVEMBER 4, 2009 CIRCULAR NO. 24/09 TO MEMBERS OF THE ASSOCIATION Dear Member: REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE PREVENTION AND CONTROL OF MARINE POLLUTION FROM SHIPS Background On March 1, 2010, the Regulations of the People’s Republic of China (PRC) on the Prevention and Control of Marine Pollution from Ships (“the Regulations”) (promulgated by the PRC State Council on September 9) will take effect. The aim of the Regulations is to establish comprehensive rules governing oil pollution prevention, response and clean up within PRC waters. The purpose of this Circular is to summarise the key provisions of the Regulations. The International Group (IG) understands that the PRC’s Maritime Safety Agency (MSA) is drafting further implementing legislation to give effect to a number of the provisions contained in the Regulations. These include a requirement to contract with approved pollution response companies and a requirement to maintain insurance or other financial security to cover liabilities arising from oil pollution damage. The IG will continue to engage with the MSA in this regard and, as appropriate, will issue further Circulars. Overview The Regulations cover a wide range of issues, such as the discharge and reception of oil pollutants; dumping of waste and permissions for dumping; oil pollution response planning; oil spill clean-up arrangements, reporting and emergency handling of pollution incidents; investigation and compensation of pollution incidents; supervision of the loading, lightening and discharging of the polluting hazardous cargoes; and penalties for contravening any of the Regulations’ requirements. The Regulations also introduce into PRC law a compulsory insurance regime for all ships (except those that are less than 1,000 gross tons and not carrying oil cargoes) to cover claims arising from oil pollution damage. This would also seem to provide the necessary implementing legislation to give effect to the insurance provisions of the 2001 Bunkers Convention (which the PRC ratified at the end of 2008) and the 1992 International Convention on Civil Liability for Oil Pollution Damage (1992 CLC) (which the PRC ratified some years ago). The Regulations also make provision for the establishment of a domestic Ship Oil Pollution Compensation Fund, to be funded by contributions from receivers of persistent oil cargoes (or their agents) which have been transported by sea to a Chinese port. It should be noted, incidentally, that the PRC is not a State party to the 1992 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1992 IOPC Fund). The MSA will be the designated authority for enforcing the Regulations and is therefore the responsible agency for the specific supervision and administration of prevention and control of the marine pollution by ships and relevant ship operation activities. Overall responsibility will rest with the Beijing MSA, with regional MSAs having local authority (as required). Scope The Regulations cover any ship sourced pollution and any ship-related operation that causes or may cause pollution damage in the internal waters, territorial waters and the contiguous zones, exclusive economic zone and continental shelf of the PRC and all other sea areas under the jurisdiction of the PRC (wherever the pollution occurs). Requirement to contract with an approved local clean up contractor The Regulations require the operators of any shi