The Standard Club Asia Ltd www.standard-club.com Incorporated in Singapore No. 199703224R. Authorised and regulated by the Monetary Authority of Singapore Managers: Charles Taylor Mutual Management (Asia) Pte. Limited Registered Office: 140 Cecil Street, #15-00 PIL Building, Singapore 069540. Registered in Singapore No. 199703244C Telephone: +65 6506 2896 E-mail: pandi singapore@ctplc.com TO ALL OWNERS AND MEMBERS 5 March 2013 Dear Sirs Australian pollution law – Oil pollution indemnity clause for penalties and fines As explained in our circular of 22 October 2012 (link ) an International Group recommended charterparty clause was drafted to address the concerns raised by owners and charterers in respect of the amendments to Australian legislation 1 introducing increased penalties for pollution from ships and damage to the marine environment. Since the recommended clause was circulated to owners and members, there have been further developments in relation to the Australian legislation and the wording of the recommended clause has been amended as attached. The amendments are explained in the accompanying note. Increase in the amount of penalties On 28 December 2012, a new regulation came into force in Australia escalating the monetary value of financial penalties for Federal offences. The increase in penalty unit valuations is only applicable to offences committed on or after 28 December 2012. The changes affect fines calculated on penalty units, such as fines imposed under the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, which imposes fines of up to 20,000 penalty units for the offence of discharging oil or oily mixtures into the sea. Under the previous penalty unit calculation, this resulted in maximum fines of AUD 2.2 million for an individual and AUD 11 million for a corporation. Under the new penalty unit calculation, the maximum fines are now AUD 3.4 million for an individual and AUD 17 million for a corporation. .. /... 1 Australian Navigation Act 1912 and the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 2 Amendments to the International Group recommended clause and explanatory notes  Legal/Defence costs A new sub-paragraph (b) iii has been inserted to address the concerns that prosecution legal costs and/or expenses might be passed onto the defending party. Subparagraph (b) iii clarifies that the indemnity extends to the recovery of any reasonable legal costs and/or other expenses incurred by or awarded against either party in respect of any proceedings instituted against them for the imposition of any fine or other penalty, irrespective of whether any fine or other penalty is actually imposed.  Indemnity in the event of contributory fault The proviso to sub-paragraphs (b) i and ii has been amended to specifically address the consequences of liability arising in circumstances where there is contributory fault on the part of the party seeking indemnity. The amendment restricts the amount of the recovery where there is contributory fault, provided this is not prohibited under the law governing the charter party. The recommended clause and explanatory notes are attached below. If owners/members have any questions they should contact the club in the normal way. All clubs in the International Group of P&I Clubs will be issuing similar circulars. Yours faithfully Alistair Groom Chairman Charles Taylor Mutual Management (Asia) Pte Limited Direct Line: +44 20 3320 8899 E-mail: alistair.groom@ctplc.com ANNEX OIL POLLUTION INDEMNITY CLAUSE FOR PENALTIES AND FINES (a) Subject to the terms of this Charterparty, as between Owners and Charterers, in the event of an oil pollution incident involving any discharge or threat of discharge of oil, oily mixture, or oily residue from the Vessel (the “Pollution Incident”), Owners shall have sole responsibility for responding to the Pollution Incident as may be required of the vessel interests by applicable law or regulation. (b) Without prejudi