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USHERING A STEP CHANGE

IN TIER 1 OIL POLLUTION RESPONSE CAPABILITY OF PORTS

Committee Report

to Review the Current Status of Pollution Control Equipment


AT Major and Non-major Ports

&
to draw Action Plan for Acquisition of
Tier 1 Capabilities by the Ports

BY

The Chairman, National Shipping Board

29 August 2013
Contents

Foreword

Executive Summary

1. Introduction 1

2. International Conventions and National Legislation 6

3. Mandated Requirements and Capabilities at Select Ports 19

4. Tier 1 Preparedness of Ports 24

5. Stakeholder Consultations 38

6. Oil Pollution Cess 48

7. Private OSRO 61

8. Places of Refuge 70

9. Review of Contributions to IOPC Fund 76

10. Incident Response Experience 85

11. Recommendations 92

12. Conclusion 99
Executive Summary
1. About 28,000 vessels of various sizes and types call at Indian Ports
annually. About 192 million tons of persistent oil excluding oil products is
annually imported through oil tankers at major and non major ports including
the coastal movements and most of the eighty spills in Indian waters since
1980 have occurred in port waters.

2. The National Oil Spill Disaster Contingency Plan (NOSDCP) mandates the
maintenance of an oil spill contingency plan by port facilities and an inventory
of oil spill response equipment to respond to oil spills within jurisdiction.

3. At the 14th Maritime Sates Development Committee (MSDC) meeting


held on 7th January 2013 it was decided that the current status of tier 1
pollution control equipment available at major and non-major ports in India
may be reviewed at the Ministry level and an appropriate action plan be
prepared for reaching the desired level of preparedness. In the meeting chaired
by the Honble Shipping Minister on 8th January 2013, it was decided to evolve
new central schemes for providing assistance to State Maritime Boards in the
area of capacity building to combat oil pollution.

4. The Committee to implement the decision of the 14th MSDC Meeting was
constituted by the Ministry of Shipping (Ports Wing) on 11th March 2013. The
Committee was also mandated to review the collection and remittance of oil
pollution cess in each port, suggest steps to strengthen the cess collection, and
make recommendations on the adequacy of oil cess being collected and
recommend increase if need be.

5. The Committee convened its first meeting on 21st March 2013 and
several times thereafter. The Committee also held stakeholder consultation
meetings on 4th and 12th July 2013 at Mumbai and Chennai respectively. The
committee subsequently reviewed its work on 1st August 2013 and discussed
the draft report on 22nd August 2013.

6. The Oil Pollution Preparedness, Response and Cooperation Convention


(OPRC), 1990 requires the contracting state to have in place adequate
measures to deal with oil pollution from ships, in ports and oil terminals
including a contingency plan and oil pollution combating equipment stockpiles.
Ushering a Step Change

7. The Committee observed that there has been undue delay in framing
enabling legislation for OPRC 1990 which is making its enforcement through
the NOSDCP extremely difficult. The Committee observed that the Indian Coast
Guard Act, Indian Ports Act or Environment Act also make no reference to
OPRC 1990. This likely impacts the establishment of oil spill response
equipment stockpiles, reimbursement of response costs, augmenting training
programs, and improving salvage services.

8. The Committee further noted that national legislation comprising of the


Merchant Shipping Act (MS Act), 1958, the relevant rules and Executive Orders
issued have numerous shortcomings. Authority and responsibility of
enforcement body to prevent mitigate and control oil pollution within coastal
waters of India is not clearly defined. Rights and obligations of ship owner,
master, crew, etc. in the event of oil pollution in Indian waters are not
addressed. There is no legal framework to remove wrecks beyond territorial
waters. The provisions of UNCLOS, 1982 relating to protection and
preservation of marine environment have been to great extent addressed
through the provisions of MARPOL, 73/78 and pollution and compensation
regime through CLC, 1992 and Fund, 1992 Conventions while the OPRC
provisions are yet to be enacted. The executive orders issued by the Competent
Authority lack legal sanctity, as there are no provisions in the relevant acts for
promulgation. None of the rules have provision for regular review by the
Central Government. This creates a huge gap between the national laws and
the International Conventions modified from time to time.

9. The Committee attempted to review the inventories at ports in select


countries and the national legislations requiring preparedness on part of ports
to respond to oil spills vis--vis that at Indian ports. It emerged that leading
ports across the world maintain substantial inventory of equipment for
containment, recovery and temporary storage, and dispersing of oil spill. The
United States lends an excellent example for development of comprehensive
planning standards for environmental protection of port facilities.

10. In contrast to the foreign ports, the status review by the Committee
indicated a deficiency of equipment and trained manpower vis--vis the risk
categorization of ports. Despite all stakeholders being notified and encouraged
to participate in the training program conducted cost-free by the Coast Guard,
all ports do not have adequate trained manpower for tier 1 oil spill response.
Only three of the twelve major ports were revealed to have an oil spill

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Ushering a Step Change

contingency plan approved by the Coast Guard. The joint inspections are also
periodic, and irregular.

11. The Committee noted that the tier 1 preparedness of ports is routinely
reviewed and deliberated at the NOSDCP meetings. However, despite several
decisions and reviews at various levels of the Government, progress on
contingency planning including maintenance of tier 1 pollution response
inventory at ports has been far from desirable.

12. The Committee thoroughly deliberated the proposal mooted by the


Gujarat Maritime Board of developing common facilities for its dozen odd minor
ports at one place and concluded that it was inevitable to build up tier 1 facility
at each port, albeit gradually over a period of time, since an inventory
positioned elsewhere cannot be deployed as first response within reasonable
time.

13. The Committee further reviewed associated measures for oil spill
response preparedness such as radar oil spill detection at sea ports and oil
handling facilities, pre-booming, private OSRO concept, and Indias
contribution to the IOPC Fund.

14. The Committee felt that it is essential for sea ports to acquire radar oil
spill detection capability either by way of IMO type approved SOLAS compliant
radar or by installing software patch on existing radar.

15. The Committee was appraised that though being an important preventive
measure, pre-booming is not practiced at any of the 16 SPMs located or ports,
except for oil berths at Karaikal, Tuticorin, Chennai, Ennore and
Visakhapatnam port and permanent boom on dockside at Sikka Reliance
terminal. Constraints cited were strong currents and tidal streams as also
swing of tanker at SPM with tide change. The Committee agreed that
instituting an equivalent measure of protection was imperative regardless of
any challenges. In respect of SPMs, the Committee feels that a possible
solution lies in stationing a suitable oil spill response craft during cargo
discharge in vicinity for immediate response and allowing relaxation only where
permissible. Further, pre-booming may be implemented at oil berths in
Mumbai and Kochi.

16. The Committee studied the subject of oil pollution cess in considerable
detail. It emerged that the cess being collected for the past twenty-five years at

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Ushering a Step Change

the nominal rate of 50 paise per tonne has never been utilized for the intended
purposes of providing oil reception facilities and equipments and materials for
combating oil pollution at various ports in India. Consultations with
stakeholders revealed numerous irregularities. In some cases the levy is not
being collected, and sometimes, even if collected, it has not been deposited.
There are also cases where a wrong account number was mentioned and
deposited. There is no procedure for acknowledgement of deposit. The
Committee could not ascertain whether administrative charges are deducted on
uniform basis. The Committee does not also rule out the possibility of leakage
of revenue due to the irregularities. The Committee concluded that despite
statutory provisions in the MS Act, 1958, there is no effective monitoring
mechanism either of the levy, or collection, or deposit of cess into the Central
Government Account. The Committee strongly advises the Ministry of Shipping
to develop and implement a Scheme so that all ports will be equipped with the
requisite tier 1 capability. The Committee has also deliberated about the
potential of developing tier1 capabilities at smaller ports, where on account of
the limited cargo handled revenue generated is insufficient to afford the
significant financial liability of required capabilities. Consequent to the review,
the Committee has suggested a comprehensive Standard Operating Procedure
(SOP) for cess collection.

17. The Committee further reviewed the cess collection practices in select
countries including China, New Zealand, Canada, and United States and
opines that an exclusive Fund may be maintained to run a countrys maritime
oil pollution preparedness and response system regardless of being party to the
Fund and Supplementary Fund Convention. A reasonable amount of one time
cess could be levied to create a corpus. A differential levy may be imposed on
domestic and foreign flagged vessels including an annual levy on domestic
vessels and per voyage, per port levy on foreign flagged vessels. Levy may also
be imposed on vessels other than tankers and even offshore oil installations,
pipelines and oil exploration wells. The oil pollution cess of 50 paise per tonne
imposed in India and the corpus thereby generated is negligible compared to
the levy imposed by other nations and merits upward revision.

18. The Committee recalled the oil spill incidents of m.v. MSC Chitra in
August 2010 and m.v. Rak Carrier in the following year, which indicated lack
of adequate oil pollution preparedness by all the stakeholders. Any large oil
spill will incur mobilisation of large number of vessels, manpower, and
equipment for salvage of oil, legal support for claims, etc. which the Committee
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Ushering a Step Change

feels could be best achieved if the clean-up operations are undertaken by a


private Oil Spill Response Organisation (OSRO), who can provide all such
services at the expense of the polluter. The Committee concluded that private
OSRO system may be introduced in India by way of compelling liabilities under
the MS Act, 1958. The private OSRO would be sustained by way of a regular
premium under pre-contract with ships. Implementation of the OSRO system
will not alter the existing responsibilities of either the ports or the merchant
vessels calling at ports in India. The pre-contractual arrangement will rather
guarantee response on behalf of the ship owner, in the event of an oil spill.

19. The Committee took note of the recent incidents of m.v. Pratibha Tapi
and m.v. Pratibha Indrayani with roughly 100-150 tons of fuel each which have
necessitated priority identification of places of refuge in Indian waters. Both
vessels were stranded off Mumbai harbor for nearly six months each until the
Honble Bombay High Court intervened to ensure that the vessels were towed
to safety or disposed. The Committee also noted with concern that the issue of
identifying suitable places of refuge on the coasts of India has been pending for
implementation for nearly ten years now since adoption of Guidelines on Places
of Refuge by the International Maritime Organisation (IMO) in December 2003.
Given that places of refuge is an important aspect of contingency planning, the
Committee proposes that two unused/ disused ports each on the west and east
coast may be designated as places of refuge viz., Sachana in Gujarat,
Thalassery in Kerala, Chandipur in Odisha, and Bheemunipatnam in Andhra
Pradesh on the east coast of India. It may also be necessary to designate an
additional place on Maharashtra coast to cater to any incident in the high
traffic density port of Mumbai.

20. The Committee was appraised that as a State party to the Fund, India
stands particularly disadvantaged. Despite being a State party since inception,
India has never claimed any compensation whatsoever from either the 1971 or
the 1992 Fund whereas its current contributions of over 12% share of total
receipts in the year 2011 is second only to Japan. Moreover, principles of
fairness and equity are possibly at stake on account of the exemption to States
receiving oil below 150,000 ton threshold, usage of quantity of oil receipts as
the sole determinant of contribution to the Fund despite at least eighteen other
factors contributing to the risk and significant regional variations in cleanup
costs. It is the considered opinion of the Committee that perhaps it is
incumbent upon India to propose a fresh formula to the IOPC Fund, possibly

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Ushering a Step Change

linked to the cleanup costs, and seek compliance with time honored principles
of fairness and equity.

21. To conclude, the Committee has carefully studied all the elements of
terms of references mandated by the Ministry of Shipping. The Committee has
been candid in its evaluation of the status of contingency plans, the inventory
holdings and availability of skilled manpower for oil spill response at the ports.
Taking a holistic view, the Committee consciously dwelled on the related
aspects of cess collection, legislation, private OSRO, wreck removal, places of
refuge and compensation for oil pollution damages.

22. The Committee urges that its wide ranging recommendations may be
implemented in earnest by the Ministry of Shipping to usher a step change in
the tier 1 oil spill response capabilities of the major and non-major ports in
India.

vi
Introduction 1
1. The Indian Ocean is one of the most important trade and energy
waterways in the world. It carries half the world's container shipments, one-
third of the bulk cargo traffic and two thirds of the oil shipments. The Indian
Ocean also connects the key flow of energy trade from the oil and gas
producers in the Western Indian Ocean to the consumer economies in South
Asia as well as in East Asia through the Eastern Indian Ocean. With global
energy needs expected to rise by 45 per cent by 2030, the trade and energy sea
lanes of communication (SLOCs) in the Indian Ocean are acquiring new
salience and creating fresh challenges in preserving and protecting the
maritime environment. This chapter dwells on the risk of oil spills at ports, the
formation of the Committee and its deliberations, and concludes with the
structure of the report.

Risk of Oil Spills

2. India has 7,516.6 kilometers of coastline with 12 major ports and about
176 non-major ports. About 192 million tons of persistent oil excluding oil
products is imported into India through tankers annually. Several major oil
handling agencies and refineries are situated inside the sensitive Gulf of Kutch
which handles about 60 percent of the crude oil imported into India. Oil
exploration wells are developed at West coast and East coast and they
contribute about 35 million tons of oil, which again is brought into ports
through ships and pipelines. Consequently, there is an unprecedented increase
in the fleet of vessels visiting Indian shores. The rapid expansion in the port
sector and the corresponding high traffic intensity pose an enhanced risk of an
oil spill incident, particularly given the fact that roughly a third of the cargo
volumes would be crude oil.

3. In fact, over the past two decades, with sustained economic growth in the
Asian region, the country has been witnessing a significant rise in volume of
traffic in Indian coastal waters. Over a thousand merchant vessels transit
through Indian waters on any given day and about 28,000 vessels of various
sizes and types call at Indian ports annually. The ports are increasingly getting
crowded with the merchant ships and fishing, sailing, and offshore service
vessels. Statistical information indicates that over 3,00,000 fishing vessels of
Ushering a Step Change

various sizes and types are engaged in fishing operations in the coastal waters
of India that are highly congested and dangerous to safety of navigation.

4. Incidentally, vessel owners are known to operate ships with reduced


manning, irrespective of type of trade or operations, for obvious reasons,
adversely affecting safety of life and property at sea and posing a threat to the
marine environment. The relatively older and unseaworthy ships which operate
in our waters pose a high risk of oil spills, particularly during monsoons.

5. The projections for the growth in seaborne trade on the Indian shores
during the next decade are heartening to note from the social, political and
economical point of view. But, the corresponding potential threat due to
transportation of a large quantity of oil may offset the advantages that we may
have envisaged, if proactive steps to strengthen our defenses against oil
pollution from ships are not taken, particularly in ports. Pollution from a
collision, sinking, stranding, and other marine accidents can threaten marine
life in the inter-tidal zones with possible consequential economic damage due
to loss to fishing grounds, and pollution of tourist beaches.

6. The Indian coasts witness an average of five spills every year as against
the world average of 2.5 spills.1 The past oil spills have ranged in size from
10 to 800 tons and a major proportion of the spills has occurred inside the port
limits. The ports capability for oil spill response are limited, and in the absence
of any clean-up agencies to undertake oil spill response on behalf of the
polluter, the Indian Coast Guard has usually been looked up to for undertaking
oil spill response, wherever the spill may have occurred. Oil spill response
could be a long and arduous task and require large amount of resources and
trained manpower. A major oil spill could affect several areas around a port,
making it quite challenging to coordinate activities amongst a number of
agencies.

7. The oil pollution incidents experienced in the recent past along the coast
of India within the port limits necessitate the maintenance of a preparedness
and response mechanism to combat any unforeseen oil spill disasters, and
mitigate its impact on the environment and affected communities. The
NOSDCP mandates the maintenance of an oil spill contingency plan by port
facilities and an inventory of oil spill response equipment to respond to oil

1
International Tanker Owner Pollution Federation 2010 Report

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Ushering a Step Change

spills within jurisdiction. However, despite several decisions and reviews at


various levels of the Government, progress on contingency planning including
maintenance of oil response inventory at ports has been far from desirable.

8. An issue related to the lack of adequate oil spill response inventory at


ports was a growing recognition of the fact that the cess of 50 paise per ton of
oil being collected by the Central Government under section 356M of the
Merchant Shipping Act, 1958 was merely remitted to the treasury of the
Government of India. The details of the sums collected through the levy and
even whether the levy was being charged by all the ports was not known. This
was besides the fact that the sums of money accrued through cess collection
had never been utilized, or proposed to be utilized for the very purposes for
which it was intended viz., strengthening of oil spill response capabilities.

MSDC Meeting Decision

9. At the 13th MSDC held under the Chairmanship of Shri GK Vasan,


Honble Minister of Shipping, Government of India at Hyderabad on 14th June
2011 it was inter alia decided that all the ports should have tier 1 pollution
control equipment in order to combat oil pollution in the ports. This was based
on the decision of the Officers Level Meeting which precedes the MSDC
meeting wherein it was informed that the scheme for oil spill contingency is
under consideration of Ministry and proposed to be implemented after
obtaining requisite approvals. All ports were required to prepare Oil Spill
Contingency Plans. Tier 1 pollution control equipment was to be installed at all
ports, immediately, through internal resources or through co-operation with
other agencies (oil companies). It was decided that the Maritime States should
prepare the necessary oil spill contingency plan with technical assistance from
Coast Guard. The Officers level meeting also urged all the coastal states that
had not yet constituted their maritime boards to set up their State Maritime
Boards at the earliest.

10. A review, thereafter, at the 14th MSDC Officers' level meeting held on
7th January 2013 revealed that three coastal states had formed State Maritime
Boards, and in the remaining coastal States, the process of formation of such
Boards was at an advanced stage. It was resolved to expedite the formation of
such Boards in the ensuing financial year. State Maritime Boards were
requested to handle matters related to coastal shipping and inland waterways
also, so that a single nodal agency would handle all maritime sector related

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Ushering a Step Change

issues. The meeting also decided that the Ministry of Shipping may review the
current status of pollution control equipment (tier 1 level) available at major
and non-major ports in India at the Ministry level. Appropriate action plan was
to be prepared for reaching the desired level of preparedness. In the
subsequent meeting chaired by the Honble Shipping Minister on 8th January
2013, it was decided to evolve new central schemes for providing assistance to
State Maritime Boards in the area of capacity building to combat oil spills and
oil pollution.

Formation of Committee

11. In pursuance of the decision taken in the 14th MSDC Meeting, a


Committee was constituted vide Government of India, Ministry of Shipping
(Ports Wing) Order PT-11033/80/2012-PT (PD-V) dated 11 March 2013. The
Committee comprised of following members to review the current status of
pollution control equipments available at major and non-major ports and to
draw an action plan for acquisition of tier 1 equipment by major/non-major
ports:

(I) Capt. P.V.K. Mohan, Chairman, NSB - Chairman


(II) Shri Janardhana Rao, M.D., IPA - Member
(III) Shri R. Srinivasa Naik, Director, Ministry of Shipping- Member
(IV) Capt. Mathur, Chief Nautical Officer, GMB - Member
(V) Capt. Harish Khatri, Nautical Surveyor-cum-
DDG (Tech.), DG Shipping - Member
(VI) DIG A. A. Hebbar, Director (Environment), ICG - Member

12. Capt. Deepak Kapoor, Nautical Surveyor-cum-DDG (Tech), DG Shipping


was co-opted as Member.

Terms of Reference for the Committee

(a) To review the status of implementation of tier 1 facilities at major


and non-major ports.
(b) To review contingency plan
(c) To prepare an action plan for major/ non-major ports to acquire
tier 1 facilities
(d) To review the collection and remittance of oil pollution cess in each
port
(e) To suggest steps to strengthen the cess collection

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Ushering a Step Change

(f) To make recommendations on the adequacy of oil cess being


collected and recommend increase, if need be.

13. As per the Order, the Committee was required to submit its report within
30 days from the date of issue of Orders.

Deliberations of the Committee and Report

14. The Chairman, National Shipping Board convened the first meeting of
the committee on 21st March 2013 in his chambers at Transport Bhavan, New
Delhi and thereafter on 8th April 2013, 20th May 2013, 11th June 2013. The
meeting with stakeholders was held on 4th July 2013 at Board Room, Mumbai
Port Trust. Representatives from the coastal states of Western region attended
the meeting and explained the tier 1 preparedness of ports in their respective
states. A meeting with stakeholders on east coast was held at Chennai on 12th
July 2013 wherein representatives from coastal states of east coast of India
delivered presentations on the tier-1 preparedness of ports in their respective
jurisdiction. Consequent to the stakeholder consultations, the committee
reviewed its work in a meeting on 1st August 2013. The draft report of the
Committee was deliberated on 22nd August 2013.

15. The ensuing chapters discuss the international conventions and national
legislations, mandated requirement and capabilities at ports in select
countries, the tier 1 preparedness of ports, record of stakeholder consultations,
oil pollution cess, private OSRO, places of refuge, removal of wrecks, review of
contribution to IOPC Fund, and our experience in responding to oil spill
incidents in ports.

16. The report concludes with a comprehensive set of recommendations


addressing the entire gamut of issues relating to prevention of oil spills and
preparedness of ports for oil spill response.

5
International Conventions and
National Legislation 2
Introduction

1. Oil enters the marine environment by discharge during transport,


drilling, shipping operations, accidents, dumping and from shore installations.
The protection of the marine environment is, therefore, a complex subject for
which a number of International Conventions have been adopted by the United
Nations and its specialized agency the International Maritime Organisation
(IMO). While the United Nations Convention on the Law of the Sea (UNCLOS),
1982 has a complete part devoted to protection of the marine environment,
every Convention, or Guidelines developed at the IMO has a direct or indirect
bearing on combating oil pollution. India is a party to UNCLOS 1982 and most
IMO Conventions and is, therefore, obliged to give complete and full effect to
the provisions of ratified International conventions.

Summary of International Conventions in respect of Protection of Marine


Environment including Safety of ships etc related instruments

Date of Entry into force National Legislation


Convention
International India Maritime Laws Port Laws
Umbrella
UNCLOS 1982 16.11.1994 29.06.1995 Maritime Zones of Partly covered
India Act [MZI]
1976 and Merchant
Shipping Act, 1958
Maritime Safety
SOLAS 1974 25.05.1980 25.05.1980 Ship construction Inadequate
,stability & Safety coverage
Equipments Rules
LL 1966 21.07.1968 21.07.1968 Load lines Rules Lacks clarity
STCW 1978 28.04.1985 16.02.1985 STCW Rules, 1998 Inadequate
under revision as
per 2010 protocol
amendment
COLREG 1972 28.04.1985 16.02.1985 COLREG Rules, Partly covered
1975 under revision
Ushering a Step Change

Marine Environment
Protection
MARPOL Annex I 02.10.1983 24.12.1986 Enacted and Inadequate
relevant rules
updated
Dumping 1972 30.08.1975 Not ratified Ratification and Inadequate
enactment under
consideration
OPRC 1990 13.05.1995 17.02.1998 Enactment in Inadequate
process
Intervention 1969 06.05.1975 14.09.2000 Part reference in act Inadequate
Salvage 1989 14.07.1996 18.10.1996 Enactment in Inadequate
process
Liability Regime
LLMC 1976 01.12.1986 01.12.2002 Enacted None
LLMC 1996(P) 13.05.2004 10.01.2011 Rules framing at None
advance stage
CLC 1992 30.05.1996 15.11.2000 Enacted and 2008 None
rules being revised
FUND 1992 30.05.1996 21.06.2001 Enacted and 2008 None
rules being revised
FUND 2003 03.03.2005 Not ratified None None
Bunkers 2001 21.11.2008 Not ratified Ratification and None
enactment under
consideration
Wreck Removal 2007 Not in force 10.01.2011 Enactment is at None
advance stage
HNS 1996(2010P) Not in force Not ratified Partly covered All provisions
through ISM Code are not covered
and contingency
plan
Regime of Maritime In force Ratified by --- All provisions
Ports 1923 India are not covered
Basel Convention on In force Not ratified ---- None
Hazardous Wastes

SOLAS, 1974 as amended Safety of Ships and Ports

2. The main objective of this is to specify minimum standards for


construction, equipment and safe operation of ships wherever they are and this
contributes to the prevention, reduction, and control of oil pollution. The
provisions of the conventions are included in the MS Act and relevant rules.
The safety requirements in respect of safe port operations address the design,

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Ushering a Step Change

construction, equipment and manning of vessels which seek to enter or leave


port, safe operation and accommodation of vessels, while in port to prevent
pollution, safe handling and storage of cargoes from vessels, and safe
operations of other persons, including requirements for prevention of accidents
in port waters. The provisions of the conventions are briefly included in the
Indian Ports Act and relevant rules or bye laws framed by few Ports Authority.

Safety of Navigation for Protection of Environment

3. In addition to the provisions UNCLOS 1982, SOLAS 1974, chapter V


Safety of Navigation prescribes control to be exercised by Coastal States
authorities over the maritime traffic. Passive measures include COLREG 1972,
IMO Routing Systems, Prohibited Areas and Safety Zones, and Regulations
restricting fishing. Active measures include NAVAREAS/METAREAS, and
Information and advice. Directive includes way points, berth and anchorage
allocations, conning instructions from pilot vessel, direction of a state for
fishery protection, and under intervention convention to counter pollution
threat, Ship Reporting System, and weather routing instructions. The
provisions of the conventions are included in the MS Act and relevant rules.
The provisions of the conventions are not clearly prescribed in the Indian Ports
Act and relevant rules or bye laws framed by ports authority.

Load Line 1966 as amended Structural Strength of Ships

4. The main objective of the convention is to ensure structural strength and


stability of ships by establishing minimum freeboards and setting up uniform
principles of rules with respect to the limits to which ships on international
voyages can be loaded and thereby contribute to the prevention, reduction and
control of oil pollution. The provisions of the convention are included in the MS
Act and relevant rules. Inclusion of reporting and monitoring provisions in
respect of stability, strength and overloading beyond the prescribed load line
marks in the port laws can contribute to the prevention, reduction and control
of oil pollution. The provisions of the Convention are briefly included in the
Indian Ports Act and relevant rules or bye laws framed by few Ports Authority.

STCW 1978 as amended by 2010 Protocol Crew Competency

5. This ensures that ship is adequately and safely manned with master,
officers and ratings with appropriate skills and experience to ensure safe
operations of ships under all conditions and as a result contributes to the

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Ushering a Step Change

prevention, reduction and control of oil pollution. The provisions of the


Convention are included in the MS Act and relevant rules. The reporting
provisions in respect of inadequate manning and sub standard crew in the port
laws can contribute to the prevention, reduction and control of oil pollution.
The provisions of the Convention are briefly included in the Indian Port Act and
relevant rules or bye laws framed by few Ports Authority.

COLREG 1972 as amended Prevention of Collision between Ships

6. This ensures effective measures to deal with various situations and


conditions during navigation of ships to avert risk of collisions by providing
details of light, shapes and sound signaling appliances and avoidable actions.
The provisions of the conventions are included in the MS Act and relevant
rules. This assists the Port Conservator or Pilots etc to deal with various
situations and conditions during navigation by ships in congested and risky
waters to avert risk of collisions by providing details of light, shapes and sound
signaling appliances and special signals or lights. The provisions of the
conventions are not clearly prescribed in the Indian Port Act and relevant rules
or bye laws framed by Ports Authority.

MARPOL 73/78 as amended Prevention and Control of Oil Pollution


from Ships

7. This convention deals with the deliberate, negligent or accidental release


of oil and other harmful substances from ships that constitutes a serious
source of pollution and provides safeguards to preserve the human
environment in general and the marine environment in particular. The main
goal of MARPOL 73/78 Annex I (Oil) is to reduce the total oil remaining on
board to the minimum. If there is no cargo left on board on tanker, there can
be no pollution from it. Similarly, bunker oil carried for propulsion of the ship
needs to be handled in controlled and structured manner to prevent and
control oil pollution from the machinery spaces of the ship. Residues, oily
mixture, sludge and wastes shall be retained on board from the cargo spaces or
machinery spaces as the case may be, conforming to the requirement of the
MARPOL 73/78 for eventual discharge into shore reception facilities or
disposal. The provisions of this convention is applicable to a vessel of any type
whatsoever operating in the marine environment and includes hydrofoil boats,
air-cushion vehicles, submersibles, floating craft, FPSO, FSU, fishing vessel,
hotel ships, storage vessels etc which are stationary and fixed or floating

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Ushering a Step Change

platforms. Annex I of this Convention prescribes the numerous measures to


prevent, reduce and control oil pollution from the machinery spaces, cargo
compartments and pump rooms of the oil tankers and cargo ships.

National Legislation on Oil Pollution Prevention from ships

8. The provisions of MARPOL 73/78 are incorporated in the MS Act 1958


under Part XIA Prevention and containment of pollution of the sea by oil and
outlined in the ensuing table.

Section Remarks
356 A Application to ships and incidents at high seas
356 B Definitions as per MARPOL, 1973/78 and UNCLOS, 1982
356 C Issue of Pollution Prevention Certificate
356 D Issue of certificates to foreign ships in India and Indian ships in foreign countries
356 E Requirements for construction and equipments in ships
356 F Record Books for Indian oil tanker or other Indian ship
356 G Inspection and control of oil tankers and other ships
356 H Information regarding contravention of MARPOL, 1973/78
356 I Reception facilities at ports in India
356 J Power to give notice to owner of polluting ship
356 K Power to take measures for preventing pollution
356 L Power of CG to give directions to certain ships to render certain services
356 M Oil pollution cess at 50 paisa per ton of cargo carried in bulk by oil tankers
356 N Refusal of Port clearance to ships not paying oil cess

9. Section 356 O empowers the Central Government to make rules under


the M.S. Act 1958. The detailed technical standards for ships under Annex I of
MARPOL 73/78 for the purpose of preventing oil pollution are included in the
Merchant Shipping (Prevention of pollution from ships) Rules 2010 framed
under the Act. The provisions include inter alia obligation of ships to prevent
pollution, Survey and certification, requirements for machinery spaces of all
ships and the cargo area of oil tankers, maintenance of Shipboard Oil Pollution
Emergency plan, Reception Facilities.
10
Ushering a Step Change

MARPOL 73/78 as amended - Port Legislation on Oil pollution Prevention


and Control

10. The Indian Ports and the Major Ports Acts are the primary legislations to
give complete affect to the relevant provisions of the MARPOL 73/78. These
acts have power making rules and byelaws for effective implementation and
enforcement. There is no uniformity adopted by major and non-major port in
this regard. The applicable provisions in this regard specified in the Indian
Ports Act, and the Major Port Trust Act are stated below.

Indian Ports Act, 1908

11. The relevant provisions of the Indian Ports Act are specified below.

Section 6- Power to make port rules

Section 6 (ee) for regulating the manner in which oil or water mixed with oil shall
be discharged in any such port and for the disposal of the same;

Section 6 (eee) - for regulating the bunkering of vessels with liquid fuel in any
such port and the description of barges, pipe lines or tank vehicles to be
employed in such bunkering;

Chapter IV-Rules for safety of shipping and the conservation of ports

Section 21 Improperly discharging ballast-

(a) No ballast or rubbish and no other thing likely to form a bank or shoal or to
be detrimental to navigation, shall, without lawful excuse, be cast or thrown into
any such port or into or upon any place or shore from which the same is liable to
be washed into any such port, either by ordinary or high tides, or by storms or
land-floods (and no oil or water mixed with oil shall be discharged in or into any
such port, to which any rules made under clause (ee) of Rule 6 apply.

(b) Any person who by himself or another so casts or throws any ballast or
rubbish or any such other thing or so discharges any oil or water mixed with oil
and the master of nay vessel from which the same is so cast, thrown or
discharged, shall be punishable with fine, which may extend to five lakh rupees
and shall pay any reasonable expenses which may be incurred in removing the
same.

(c) If, after receiving notice from the conservator of the port to desist from so
casting or throwing any ballast or rubbish or such other thing or from so
discharging any oil or water mixed with oil, any master continues so to cast

11
Ushering a Step Change

throw or discharge the same, he shall also be liable to simple imprisonment for a
term which may exceed to one year and to fine which may extend to five lakh
rupees.

(d) Nothing in this section applies to any case in which the ballast or rubbish
or such other thing is cast or thrown into, or the oil or water mixed with oil is
discharged in or into, any such port with the consent in writing of the conservator,
or within any limits within which such act may be authorized by the Government.

Section 23 Boiling pitch on board vessel within prohibited limits

If any person graves, breams or smokes any vessel in any such port, contrary to
the directions of the conservator, or at any time or within any limits at or within
which such act is prohibited by the Government, he and the master of the vessel
shall for every such offence be punishable with fine which may extend to five
hundred rupees each.

Chapter VII Provisions with respect to Penalties

Section 54 Penalty for disobedience to rules and order of the Government

If any person disobeys any rule or order which a Government has made in
pursuance of this Act and for the punishment of disobedience to which express
provision has not been made elsewhere in this Act, he shall be punishable for
every such offence with fine which may extend to one hundred rupees.

Major Port Trust Act, 1963

12. The relevant provisions of the Major Port Trust Act are specified below.

Chapter V Works and Services to be provided at Ports

Section 35-Power to board to execute works and provide appliances

(h) vessels, tugs or other boats for use within the limits of the port or beyond
those limits, whether in territorial waters or otherwise, for the purpose of towing
or rendering assistance to any vessel, whether entering or leaving the port or
bound elsewhere, and for the purpose of saving or protecting life or property and
for the purpose of landing, shipping or transshipping passengers or goods under
Section 42.

Section 123 General power of Board to make regulations

12
Ushering a Step Change

Without prejudice to any power to make regulations contained elsewhere in this


act, a Board may make regulations consistent with this Act for all or any of the
following purposes namely:-

(h) for keeping clean the port, river or basins or the bank of the river and the
works of the boards, and for preventing filth or rubbish being thrown therein or
thereon; and

(n) for ensuring the safety of the port.

13. Examples of provision for oil spill prevention and response in Rules and
Regulations of Major Ports and non major Ports in Maritime States are
appended below.

(a) Mumbai Port Trust- Byelaws for the Regulation and the
Management of the Docks

Rule 37- Prevention of materials falling into dock, disposal of ashes

Rule 38- Bilge water and not to be pumped into dock

Rule 111- Discharge of fuel oil in bulk

Rule 112 Discharge of non dangerous petroleum in bulk

Rule 116 Bunkering petroleum fuel oil

(b) Gujarat Maritime Board Act, 1981

Chapter V Works and Services to be provided at Ports

Section 25-Power to Board to execute works and provide appliances

(2) (h) vessels, tugs or other boats for use within the limits of the port or
beyond those limits, whether in territorial waters or otherwise, for the
purpose of towing or rendering assistance to any vessel, whether entering
or leaving the port or bound elsewhere, and for the purpose of saving or
protecting life or property and for the purpose of landing, shipping or
transshipping passengers or goods under Section 32.

OPRC, 1990

14. The provisions of OPRC 1990 require the contracting state to have in
place adequate measures to deal with oil pollution from ships, in ports and oil
terminals. A contingency plan is required by these entities to combat pollution

13
Ushering a Step Change

in the affected areas at the coast. The objective is to provide oil pollution
response and preparedness plans for the ships, ports and oil handling facilities
under its jurisdiction which are coordinated with the national system. These
plans prescribes reporting procedures, action to be taken on oil pollution
report, international co-operation in preparedness and response, establishment
of oil pollution combating equipment stockpiles, implementation of training
programs and improving in salvage services.

15. It is essential to have the provisions of this Convention in the Maritime or


Port or any other legislation to give effect. The Merchant Shipping Act, Indian
Coast Guard Act, Indian Ports Act or Environment Protection Act have no
reference to oil pollution preparedness, response and cooperation though
implementation procedures are in place to deal with any oil pollutions
incidents. However, preservation and protection of marine environment and
Prevention and Control of Pollution is a statutory duty of the Coast Guard
under the Coast Guard Act 1978. Hence, responsibilities of co-ordination in
the event of an oil spill at sea were transferred to the coast Guard from the
Director General of Shipping on 7th March 1986. A draft NOSDCP was prepared
on 14th April 1988 and forwarded to all concerned agencies for comments.
Final draft was approved by the Committee of Secretaries on 4th November
1993. The NOSDCP declares the Director General Coast Guard (DGCG) as the
Central Coordinating Agency (CCA) for marine oil spill response activities in the
Maritime zones of India, and delineates the duties and responsibilities of each
participating agency. The responsibility of the Coast Guard as Central
Coordinating Agency has been further established by an amendment to the
Allocation of Business Rules, 1961 in the year 2006.

Intervention Convention, 1969

16. The objective of this to confer power on the coastal state to intervene in
the event of a pollution casualty on the high seas, threatening to damage or
damaging its coastline or related interest. This specifies in which cases and
respect of what damage the coastal state may take action. However, there is no
power to intervene unless there is grave and imminent danger. It is essential to
have the provions of this convention in the Maritime or Port or any other
legalization to give effect. The provisions with respect to prevention and
containment of oil pollution have been extended to casualty occurring on the
high seas in the MS Act, only briefly in section 356 A.

14
Ushering a Step Change

Salvage Convention, 1989

17. The objective of this Convention is to provide uniform agreement


regarding salvage operations and to enhance contribution which efficient and
timely salvage operations can make to the safety of vessels and other property
in danger and to the protection of the environment. It also prescribes the rights
of the coastal state control and gives directions in relation to the salvage
operations. The Coastal State has the responsibility under the Salvage
Convention 1989 to establish adequate Salvage Services.

18. The Merchant Shipping Act (Section 402 to 404), MS (Wreck & Salvage)
Rules, 1974 (Rules 20-25) make for adequate provisions but not covering all
articles of the convention. Rule 14 (2)(c) of the Coast Guard Act, 1978 may be
applied. However, the Indian Ports Act 1908, Major Ports Act 1963, or
Environment Act 1986 have no direct provisions but inference can be drawn
from the applicable acts.

Compulsory Insurance by Ships and Salvage Arrangements by Ship


Owners

19. An amendment to Part XIII of Merchant Shipping Act, 1958 which deals
with Wreck & Salvage is being brought about in-line with the provisions of
Nairobi Wreck removal Convention, 2007 and Salvage Convention, 1989 to
which India is party. This part would cover compulsory insurance maintenance
by the ship owner against marking and removal of wreck in the convention
area i.e. territorial waters and EEZ. This part also covers the provisions of
Salvage Convention which requires the ship owner to make arrangements for
salvage of the ships at his cost.

Nairobi Wreck Removal Convention, 2007

20. Wrecks or other obstructions within the approaches to ports or in the


port area itself can pose a danger to navigation as well as a hazard to the
environment. They can also hamper the efficient and economical operations of
the port. It is therefore in the interest of the port and its users- and that of the
state and population as a whole- that any such wrecks or obstructions be
removed as soon as possible. For this reason, it is usual for the port to be given
the power and the responsibility to remove wrecks and other obstructions near
or within the ports. The removal and disposal of wrecks and other obstructions
can involve considerable expense. It is, therefore, essential that port and

15
Ushering a Step Change

maritime legislation to include clear provisions on the right of port or other


authorities to seek reimbursement of such costs from the owner of the wreck or
the person responsible for the obstruction in the port or other coastal waters. It
is also necessary and highly desirable for the maritime and port legislation to
address the question of the relationship between the authority responsible for
wreck removal and the owners of vessels or persons with interest in or rights
over other obstructions in respect of liability for removal.

Salient features of the Convention

21. The Nairobi International Convention on the Removal of Wrecks, 2007


was adopted on 18th May 2007 by the IMO. The Convention provides the legal
basis to enable States to remove, or have removed, from their coastlines and
waters around their coasts, wrecks posing a hazard to the safety of shipping or
to the marine environment. To achieve these objectives, the new treaty
includes provisions on the reporting and locating of ships and wrecks and
criteria for determining the hazard posed by wrecks including assessment of
damage to the marine environment. It also regulates measures to facilitate the
removal of wrecks, as well as the liability of the owner for the costs of locating,
marking and removing of ships and wrecks. The registered ship owner is
required to maintain compulsory insurance or other financial security to cover
liability under the Convention.

22. There is no legal framework to remove wrecks beyond TW up to EEZ in


the Indian Laws. The Merchant Shipping Act (Section 390 401), MS (Wreck &
Salvage ) Rules, 1974 (Rules 1 to 19, Indian Ports Act, 1908 (Rule 10-12 and
Rule 14) have inadequate reference while the Major Ports Act 1963, Indian
Coast Guard Act 1978 and Environment Act 1986 have none.

Conclusion

23. It is observed that the IMO Instruments relating to safety of ships,


pollution prevention and payment of compensation under the maritime
legislation is generally meeting the laid down requirements of acceptable
standards, procedures and guidelines set by IMO. The provisions of the
Merchant Shipping Act, 1958 and the relevant rules framed there under
conform to the International Conventions.

24. However, the maritime legislation comprising of Merchant Shipping Act,


1958 the relevant rules and Executive orders issued have addressed issues

16
Ushering a Step Change

relating to safety, security, pollution response and liability by and large. With
the dynamic marine working environment, the legislation requires to be
updated regularly. Authority and responsibility of enforcement body to prevent,
minimize, mitigate and control oil pollution within coastal water of India is not
clearly defined. Supplementary Fund 2003 that provides higher limit for oil
pollution damage in respect of oil tankers carrying persistent oil has not been
ratified by India. Legislation under strict liability regime for bunker oil damage
applicable to Indian ships, wherever they are, and foreign ships within
territorial waters of India have not been framed as yet. Right and obligation of
ship owner and master, crew etc. are not addressed in respect of pollution
prevention, response in the event of oil pollution in Indian waters as well as in
foreign waters for Indian ships. The relevant provisions of part XII of UNCLOS,
1982 i.e. Protection and Preservation of Marine Environment namely Article
198, Article 217, Article 218, Article 220, Article 221, and Article 226 have not
been completely addressed in this legislation. The executive orders lack legal
sanctity, as there are no provisions in the relevant acts for promulgation. None
of the rules have provision for regular review by the Central Government. This
creates huge gap between the modified International Regulation from time to
time and the existing national laws. There is no legal framework to remove
wrecks beyond TW up to EEZ in the Indian Laws till date, though India has
ratified the Wreck Removal Convention, 2007.

25. Since port time of ships is an important cost and operational factor the
Harbor Master will always be under pressure to grant preferential treatment to
shipping lines. The Harbor Master or Port Officer should not function within
purely commercial environment and must have freedom of action for safety and
protection of marine environment.

26. There is undue delay in framing Legislation for OPRC 1990 which is
making the enforcement through the NOSDCP extremely difficult. This delay is
likely to complicate the issues relating to reimbursement of cost of assistance,
establishment of oil pollution, combating equipment stockpiles, augmenting
training programme at various level of responsibility and improving salvage
services. There is no interim legislation in the form of Government Notification
in respect of OPRC Convention 1990.

27. The liability in respect of oil pollution from cargo ships is being covered
under part XA Limitation of Liability of Merchant Shipping Act, 1958. This
part does not impose strict liability on the polluter and therefore the

17
Ushering a Step Change

expeditious ratification and enactment of Bunker Convention, 2001 is


essential. The LLMC, 1996 Protocol has been ratified by India which prescribes
higher limits than 1976 LLMC. The Limitation of Liability based on the gross
tonnage of seagoing ship which can be enjoyed by the ship owner or the
insurer as per the provisions of Merchant Shipping Act, 1958 is given below;

Claims other than loss of life or personal injury


(Property losses- sea perils, floods, income losses, liability
losses- compensations)

Tonnage (GT) LLMC, 76 LLMC, 96


(SDR/USD) (SDR/USD)
500 1,67,000 1,000,000
3,000 584,500 1,400,000
15,000 2,588,500 6,200,000
40,000 6,343,500 15,200,000

28. The strict liability regimes for oil tanker carrying less than 2000 tons of
cargo of persistent oil in bulk is covered by Fund, 1992 and may escape
payment of compensation to the victims who get affected because of inadequate
sensitization and reference in the Act.

18
Mandated Requirements and
Capabilities at Select Ports 3
Introduction

1. OPRC 1990 mandates a set of prepositioned equipment for oil spill


response in each country party to the Convention. The Committee attempted to
review the inventories at ports in select countries and the national legislations
requiring preparedness on part of ports to respond to oil spills. A discussion on
the inventories at select leading ports of the world ensues.

Balikpapan Port

2. Balikpapan Port is situated on the east coast of the island of Borneo, in


the East Kalimantan, Indonesia. Balikpapan is a medium sized port known for
mining and petroleum export products. Yet, the port maintains 1,750 m of oil
boom and two sets of oil skimmers as containment and recovery equipment for
oil spill response. The port also has having four sets of oil storage tanks and
five sets of oil spill dispersant spray systems.

Sydney Port

3. Sydney Port invests approximately $11 million each year in measures to


ensure preparedness, prevention and protection of the marine environment.
Sydney Ports provides a 24-hour immediate emergency response unit, with
dedicated equipment and a round-the-clock response team. Its oil spill
response unit has rapid response vessels and trained staff to carry out
necessary investigation and cleanup of oil and other spills. Sydney Port has
over 10 kilometers of different types of oil spill containment boom and
skimmers that can recover up to 100 tonnes of oil per hour. It conducts three
major emergency response exercises in a year.

Singapore Port

4. The Port of Singapore refers to the collective facilities and terminals that
conduct maritime trade handling functions in Singapores harbours and which
handle Singapores shipping. Currently the worlds second busiest port in
terms of total shipping tonnage, it also transships a fifth of the worlds shipping
containers, half of the worlds annual supply of crude oil, and is the worlds
Ushering a Step Change

busiest trans-shipment port. It was also the busiest port in terms of total cargo
tonnage handled until 2005, when it was surpassed by the Port of Shanghai.
Thousands of ships drop anchor in the harbor, connecting the port to over six
hundred other ports in one hundred twenty-three countries and spread over
six continents.

5. Singapore Port maintains 26 sets of oil spill dispersant spray systems for
prompt response to any oil spill disaster. Moreover, Singapore Port has an
agreement with M/s Oil Spill Response Limited (OSRL), Singapore for oil spill
response in the country.

Hong Kong Port

6. Hong Kong is one of the busiest and most efficient international


container ports in the world. It handled 23.4 million TEUs of containers in
2011. The port provided about 440 container liner services per week
connecting to about 500 destinations worldwide. In 2011, Kwai Chung Tsing Yi
Container Terminals handled 17.4 million TEUs, representing 71% of the ports
Total container throughput. The remaining 29% was handled at mid stream
sites, the River trade terminal, PCWAs, buoys and anchorages, and other
wharves.

7. Hong Kong maintains three purpose built multi-function pollution


response vessels in addition to six back-up supporting vessels for oil spill
response. 2300m oil boom along with three sets of oil skimmers is also
maintained by the port. Further, the port stocks up 50,000l of oil spill
dispersant, absorbents and other ancillary equipment for responding to any oil
spill.

Rotterdam Port

8. Rotterdam is one of the largest ports in the world. The port authority has
contracted with commercial company HEBO to respond to all incidents in port
area. The company operates oil recovery craft and quantities of containment
boom within port area. The port does not stock its own OSD, however,
authority would seek assistance from the UK, if necessary.

20
Ushering a Step Change

Washington State Legislation

Planning standards for aerial surveillance

9. Washington Administrative Code (WAC) 173-182-320 lays down the


facility planning standards for aerial surveillance. According to the Code, each
facility plan shall provide for aerial oil tracking resources capable of being on-
scene within six hours of spill notification. At a minimum, these resources
must be capable of supporting oil spill removal operations for three, ten-hour
operational periods during the initial seventy-two hours of the discharge.

Planning Standards for transfer sites

10. WAC 173-182-355 lays down the Planning Standards for transfer sites
for covered vessels at locations where transfers occur, and for facilities with a
vessel terminal as discussed in the ensuing table.

Time Boom/Assessment Minimum Oil Recovery Rate Minimum Storage


(hours) % of WCS1 vol. per 24 h
6 Additional 10,000 feet of Capacity to recover the lesser of 2 times the EDRC2
boom to be used for 10% of worst case spill volume
containment, recovery or or 12,500 barrels within 24-
protection could have arrived hour period could have arrived
12 12 Additional 20,000 feet of Capacity to recover the lesser of 2 times the EDRC
boom to be used for 15% of worst case spill volume
containment, recovery or or 36,000 barrels within 24-hour
protection could have arrived period could have arrived
24 Additional 20,000 feet of Capacity to recover the lesser of 3 times the EDRC
boom to be used for 20% of worst case spill volume
containment, recovery or or 48,000 barrels within 24-hour
protection could have arrived period could have arrived
48 More boom as necessary for Capacity to recover the lesser of More as necessary to
containment, recovery or 25% of worst case spill volume not slow the response
protection or 60,000 barrels within 24-hour
period could have arrived

1
Worst Case Scenario
2
Effective daily recovery capacity (EDRC) means the calculated capacity of oil recovery devices that
accounts for limiting factors such as daylight, weather, sea state, and emulsified oil in recovered material.

21
Ushering a Step Change

Planning standards for vessels

11. WAC 173-182-450 sets planning standards for the Washington coast
that apply to covered vessels that enter Washington waters at the Columbia
River, Grays Harbor or the Strait of Juan de Fuca, and offshore facilities. Plan
holders are required to be capable of sustaining a worst case spill response and
develop an addendum specific to Washington's coast, including:

(1) The capability, if applicable, for in situ burning, dispersant, and


mechanical recovery;

(2) Surveillance equipment (including fixed wing, helicopters and low


visibility equipment) to provide for aerial assessment of spill within six
hours of spill notification;

(3) Time frames and mechanisms to cascade in equipment and other


resources for up to seventy-two hours;

(4) Ten thousand feet of boom appropriate for shoreline protection,


containment and/or ten thousand feet of open water boom for enhanced
skimming, containment or other use to arrive within twelve hours; and

(5) Twenty thousand feet of boom appropriate for containment, protection


or recovery to arrive within twenty-four hours.

Planning standards for shoreline cleanup

12. WAC 173-182-510 specifies requirements for response and protection


strategies and includes the following:-

(1) Plan holders shall have methods to track and contain spilled oil and
enhance the recovery and removal operations that are described in the
plan.

(2) Each plan shall include a description of how environmental protection


will be achieved, including:

(a) Protection of sensitive shoreline and island habitat by diverting or


blocking oil movement;

(b) The plan shall include a description of the sensitive areas and
develop strategies to protect the resources, including information on
natural resources, coastal and aquatic habitat types and sensitivity
by season, breeding sites, presence of state or federally listed

22
Ushering a Step Change

endangered or threatened species, and presence of commercial and


recreational species, physical geographic features, including relative
isolation of coastal regions, beach types, and other geological
characteristics;

(c) Identification of public resources, including public beaches, water


intakes, drinking water supplies, and marinas;

(d) Identification of shellfish resources and methods to protect those


resources;

(e) Identification of significant economic resources to be protected in


the geographic area covered by the plan; and

(f) Each facility with the potential to impact a "sole source" aquifer or
public drinking water source must identify the types of substrate and
geographical extent of sensitive sites.

(3) The GRPs have been developed to meet these requirements and plans
may refer to the NWACP to meet these requirements. If approved GRPs
do not exist in the NWACP, plan holders will work with ecology to
determine alternative sensitive areas to protect.

(4) Each plan shall identify potential initial command post locations.

Observations and Findings

13. Leading ports across the world maintain substantial inventory of


equipment for containment, recovery and temporary storage, and dispersing of
oil spill.

14. The United States, Washington Administrative Code lends an excellent


example for development of comprehensive planning standards for
environmental protection of port facilities.

23
Tier 1 Preparedness of Ports 4
Inventory of Oil Spill Response Equipment

1. As per the National Oil Spill Disaster Contingency Plan, responsibility of


managing tier 1 oil spill of less than 700 tons, within their jurisdiction, vests
with the individual ports. The tier 1 preparedness of ports is routinely reviewed
and deliberated at the NOSDCP meetings and ports are advised to maintain
equipment for tier 1 oil spill response. However, despite several decisions and
reviews at various levels of the Government, progress on contingency planning
including maintenance of tier 1 pollution response inventory at ports has been
far from desirable. A comprehensive review of the oil spill response
preparedness of ports ensues.

Risk Categorization of Ports

2. While the inventory of oil spill response equipment would be proportional


to the assessed risk, based on request from stakeholders, a category-wise
inventory of equipment was drawn up for the ports, with the category being
determined based on whether the port handled crude oil tankers, ship to ship
transfers, and single point mooring, or handled products only or ships carrying
more than 1000 tons of fuel/bunker oil.

3. The suggested categorization was forwarded by the Coast Guard to the


Ministry of Shipping, Road Transport, & Highways vide its letter EP/0720/11th
meeting dated 29th March 2008. The Ministry of Shipping, Road Transport, &
Highways directed all major ports vide its letter PR/24021/22/2005PG dated
3rd April 2006 to take necessary action for tier 1 oil spill response
preparedness.

Risk categorization of ports


Risk Description
Category
A Ports handling crude Oil/ Tanker visits/SPM/STS
B Ports which handle ships carrying more than 1000 tons of fuel/bunker oil
Ports which handle products only
C Other than Cat A and Cat B
Ushering a Step Change

Planning Standards for Oil Spill Response Resources

4. The inventory of oil spill response equipment expected to be maintained


by each risk category of ports is appended in the table below.

Risk Oil Spill Response Equipment Manpower Vessels


Category
Boom- 2000m IMO Level 1 -10 Work boats- 2

Skimmer 04 (20TPH) IMO Level 2 - 4 Tugs - 2


OSD Applicator 06 Nos IMO Level 3 - 1
Category 'A'

OSD 10,000 Ltrs Other 10


Flex Barge - 04 (10 Tons)
Risk

Current Buster booms at ports where


tidal current is >2 Kn 02 Nos.
Sorbent boom pack 500 Mtrs
Sorbent pads 2000 Nos/200 Kgs
Shoreline cleanup equipment - Mini
Vacuum pumps/ OSD applicator/ Fast
tanks 05
Boom - 1000m IMO Level 16 Work boat- 1
Skimmer 04 (20TPH) IMO Level 2-2 Tugs - 1
Category 'B'

OSD Applicator - 02 Nos Other 10


OSD 5,000 l
Risk

Flex Barge - 02 (10 Tons)


Sorbent boom pack- 200m
Sorbent pads -1000 Nos
Current Buster booms at ports where
tidal current is >4 Kn 02 Nos.
Boom - 600m IMO Level 1- 2 Work boat- 1
Category

Skimmer 02 (20TPH) Other - 5


Risk

'C'

OSD Applicator- 02 Nos


OSD 3,000 l
Flex Barge - 02 (10 Tons)

25
Ushering a Step Change

Rough Indicative Cost of Oil Spill Response Equipment


5. An approximate total inventory cost has been estimated for each risk
category of port and worked out to roughly Rupees 15 crore, 2.5 crore and 1
crore for risk category A, B, and C ports respectively as detailed in the ensuing
table.

Item Unit Unit rough Qty Total rough


Risk

indicative required indicative cost


cost
Boom 200 m 7,76,650.00 2000 m 7,76,65,500.00
Current Buster Boom 200 m 56,85,750.00 2 sets 1,13,71,500.00
Sorbent boom pack 1m 2,700.00 500 m 13,50,000.00
Risk Category 'A'

OSD Applicator 1 12,60,000.00 6 75,60,000.00


Flex Barge (10 T) 1 8,75,000.00 4 35,00,000.00
OSD 1l 85 10000 l 8,50,000.00
Skimmer(20 TPH) 1 8,61,000.00 4 34,44,000.00
Sorbent pads 1 40.00 2000 80000.00
Shoreline cleanup eqpt
01 set 85,83,400.00 05 set 4,29,17,000.00
Total Cost 14,87,38,000.00
Approximate Inventory Cost for Risk Category A Port `15 crore

Boom 200 m 7,76,650.00 1000 m 38,83,250.00


Current Buster Boom 200 m 56,85,750.00 2 sets 1,13,71,500.00
Sorbent boom pack 1m 2,700.00 200 m 5,40,000.00
Risk Category 'B'

OSD Applicator 1 12,60,000.00 2 25,20,000.00


Flex Barge (10 T) 1 8,75,000.00 2 17,50,000.00
OSD 01 l 85 5000 l 4,25,000.00
Skimmer(20 TPH) 1 8,61,000.00 4 34,44,000.00
Sorbent pads 1 40.00 1000 40000.00
Total Cost 2,39,73,750.00
Approximate Inventory Cost for Risk Category B Port `2.5 crore

Boom 200 m 7,76,650.00 600 m 23,29,950.00


Risk Category 'C'

OSD Applicator 1 12,60,000.00 2 25,20,000.00


Flex Barge (10 T) 1 8,75,000.00 2 17,50,000.00
OSD 01 l 85 3000 l 2,55,000.00
Skimmer(20 TPH) 1 8,61,000.00 2 17,22,000.00
Total Cost 85,76,950.00
Approximate Inventory Cost for Risk Category C Port `1 crore

26
Ushering a Step Change

Status of Pollution Response Capability of Major Ports

6. All ports submit annual returns on status of their oil spill response
equipment inventory, Oil Spill Dispersant (OSD) stock, oil spill contingency
plan, trained manpower, etc to Indian Coast Guard vide Chairman NOSDCP
Circular 01/2013.

Containment Equipment

7. Booms are used for containment of spilled oil. The status of containment
boom held by the major ports as of December 2012 is shown in the figure
below.

900 850
800 800
800
700 650
600 600
600
500
500
400
300 300
Boom (in mtrs)
200
100
0 0 0 0 0
0

Containment equipment held with major ports

Recovery Equipment

8. As per the categorization of ports Cat 'A' and Cat 'B' ports should have 04
skimmers of capacity 20tph each ie; all major ports should have skimmers
capacity of 80 tph. The skimming capacity of major ports as of December 2012
is shown in the accompanying figure.

27
Ushering a Step Change

100
Skimmimg
87
Capacity at Major Ports
90
80
70 70

60 51.5
50 40
40 31.8
30 30
25
20 20 Skimmer (Capacity tph)
10 5 10
0 0 0
0

Oil Spill Dispersant stocks

9. The status of oil spill dispersant held with the major ports is appended in
the ensuing figure.

OSD stock at major ports


5000
4500
4000
3500
3000
2500
2000
1500
1000 OSD (litres)
500
0

28
Ushering a Step Change

10. The status of deployment of oil spill response resources in each major
port is tabulated below.

Port Deployment of equipment


Kandla Oil spill dispersant is kept ready in OSD tanks on operating
tugs and the equipment when procured will be deployed
on a dumb barge and the operation and maintenance will
be outsourced to a qualified company.
Mumbai Oil Spill equipments will be deployed at Marine Oil
Terminal, Jawahar Dweep.
JNPT All tugs are equipped with oil spill spraying booms on
board. Additional equipments/ materials to combat oil spill
are kept at fire station.
New Mangalore The operation and maintenance of oil spill equipment has
been outsourced to a private firm. As per the requirement
the booms, skimmers etc are deployed for operations.
Cochin All equipments are maintained in strategic locations such
as onboard Harbour tug, container at Cochin oil terminal,
at fire station and on Skimmer vessel
Chennai Boom, skimmer etc are deployed on a pollution control
vessel. Oil tankers are protectively boomed when
discharging alongside.
Visakhapatnam Oil spill equipment is being deployed in Visakhapatnam
harbour by the operational staff of Marine Department by
utilizing floating crafts.
Paradip All the oil spill equipment are located on various crafts and
on one dedicated oil pollution vessel viz., m.v. Kali.
Kolkata The equipments are located at Kolkata Port and can be
mobilized at short notice to wherever necessary. Oil spill
dispersant is stored at strategic locations along the river.
Mormugao Oil spill equipments are placed at port craft jetty under
SO(M) section at berth no.8 and will be deployed normally
within the port limit
VoC Port Oil spill response equipment are deployed at oil jetty and
tankers are garlanded with oil containment booms.
Ennore Equipment deployed by the BOT operator.

29
Ushering a Step Change

Trained Manpower for Pollution Response

11. Trained manpower is an integral part of preparedness for oil spill


response. The Coast Guard conducts IMO level 1 training at its Pollution
Response Team in Mumbai, Chennai, Port Blair and Pollution Response Centre
at Vadinar. Indian Coast Guard, jointly with AMET University, conducts an
IMO level 2 training at Chennai, twice in a year. An annual schedule for the
training is published on the Coast Guard website. All stakeholders are notified
and encouraged to participate in the training program. However, some ports do
not have adequate trained manpower for tier 1 oil spill response. The status of
trained oil spill responders is presented in the figure below.

12 10
49 Trained Manpower at Major Ports
10

8
6
6
4 4 Level 1
4 3 3 3
Level 2
2
2 1 1 1 1 1 1
0 0 0 00 0 0 0 00 00
0

Analysis of tier 1 inventory of ports

12. The status review by the Committee indicated a deficiency of equipment


and trained manpower vis--vis the risk categorization of ports.

30
Ushering a Step Change

Status of Facility Contingency Plan of Major Ports

13. The Committee observed with concern that only three of the twelve major
ports have an oil spill contingency plan approved by the Coast Guard. The
status is appended in the ensuing table.

Category Port Status of Contingency Plan


Cat A Kandla Not approved. The plan was vetted and returned with
observations for making good the deficiencies.
Mumbai Not approved. The Plan is expected to be prepared by
oil spill response firm after award of contract
JNPT Approved
New Mangalore Not approved. The draft plan has been submitted to the
Coast Guard for vetting
Cochin Not approved. The draft plan was vetted by the Coast
Guard and returned to CPT for making good the
deficiencies/ observations
Chennai Not approved. The oil spill contingency plan has been
received by the Coast Guard and is being vetted
Visakhapatnam Approved
Paradip Not approved. The plan was vetted by Coast Guard and
returned to PPT for making good the deficiencies/
observations
Haldia Approved (Combined plan for Kolkata and Haldia Dock
Cat B Kolkata Complex)
Mormugao Not approved. The plan is under preparation.
Tuticorin Not approved. The draft plan was vetted and returned
with observations by RHQ(E)
Ennore Not approved. The plan is not yet received by the Coast
Guard for vetting

Memorandum of Understanding

14. Many ports have entered into a contractual agreement with oil handling
agencies and terminal operators for acquiring the pollution response resources.
The 11th NOSDCP meeting held at Chennai Port Trust on 24th April 2008
deliberated in detail the issue regarding the execution of Memorandum of

31
Ushering a Step Change

Understanding (MoU) by ports with respective oil handling agencies. The details
of MoU signatories at various major ports are tabulated below.

Port Signatories
Mumbai Mumbai Port Trust, Jawaharlal Nehru Port Trust, Bharat Petroleum, Indian
Oil, Hindustan Petroleum, Oil and Natural Gas Corp., Aegis Logistics, Tata
Power, Chemical Terminal Trombay, Reliance Industries
Cochin Cochin Port and Kochi Refineries, Bharat Petroleum, Indian Oil & Hindustan
Petroleum
Tuticorin Tuticorin Port and Indian Oil & Southern Petrochemical Industries
Chennai Chennai Port and Chennai Petroleum, Indian Oil, Hindustan Petroleum &
Bharat Petroleum
Vizag Visakhapatnam Port Trust and Hindustan Petroleum Visakha Terminal,
Bharat Petroleum & Indian Oil
Paradip Paradip Port and Indian Oil Corporation Ltd, Hindustan Petroleum Corporation
Ltd & Bharat Petroleum Corporation Ltd
Haldia Haldia Dock Complex & Indian Oil, Hindustan Petroleum, Bharat Petroleum,
Haldia Petrochemicals, Ruchi Infrastructure, Tata Chemical, Haldia Barauni
Crude Pipeline, Hitec Carbon, AVR & Co., Indian Oil Petronas, United Storage
& Tank Terminals

Joint Inspections of Tier 1 Preparedness

15. During the 9th NOSDCP meeting held on 29th September 2006, a decision
was taken to conduct a joint inspection of the tier 1 oil spill response facilities
of ports by a Coast Guard representative along with representatives of the
Ministry of Shipping for ports. Accordingly, the Coast Guard in coordination
with Ministry of Shipping has been undertaking joint inspection of tier 1 oil
spill response facility at ports since 2007, for checking the preparedness level
and recommending suitable remedial action

16. Planning of joint inspection of ports is a coordinated effort between the


Coast Guard and Ministry of Shipping. To streamline the procedure, it was
decided during the 18th NOSDCP meeting conducted on 31st May 13 at
Dehradun to work out an annual schedule for joint inspection in consultation
with the Ministry of Shipping.

32
Ushering a Step Change

Joint Inspection of Ports: July 2007- June 2013


Port Year
2007 2008 2009 2010 2011 2012 2013 Total
Kandla 1
Mumbai 2
JNPT 2
New 4
Mangalore
Kochi 1
Chennai 3
Vizag 2
Paradip 2
Haldia 2
Kolkata 2
Mormugao 2
Tuticorin 2
Ennore 2

17. Reviewing the joint inspections conducted since 2007, the Committee
observed that the joint inspections have been periodic, and irregular.

Oil Spill Detection Software

18. As a State party to UNCLOS 1982, India is obliged to endeavor to


observe, measure, evaluate and analyse by recognized scientific methods, the
risks or effects of pollution of the marine environment and in particular,
required to keep under surveillance the effects of any activities which it permits
or in which it engages in order to determine whether these activities are likely
to pollute the marine environment.

19. As a State party to OPRC 1990, persons having charge of sea ports in
India are required to have oil pollution emergency plan and such preparedness
planning includes maintenance of an effective and fool proof surveillance
system to monitor and detect any presence or discharge of oil in contravention
of the provisions in the Merchant Shipping Act, 1958 as amended.

20. The need for oil spill detection capabilities at sea ports and oil handling
facilities was discussed during 16th NOSDCP meeting on 19th April 2011. The
Committee of Secretaries in its meeting on 2nd December 2011 decided that the
installation of oil spill detection software in Vessel Traffic Monitoring System

33
Ushering a Step Change

(VTMS) radars at ports and Vessel and Air Traffic Monitoring System (VATMS)
radars of oil companies along the coastline may be studied and, if found
feasible, be done in a time-bound manner. The status was reviewed at the 18th
NOSDCP meeting on 31st May 2013. The capability for radar detection of oil
spills is expected to be achieved either by way of IMO type approved SOLAS
compliant radar or by installing a software patch on existing radar.

Protective booming at oil berths and SPMs

21. The practice of pre-booming of oil tankers engaged in discharge of cargo


at alongside berths and at SPMs was discussed during the 17th NOSDCP
meeting at Gandhinagar on 12th June 2012. Subsequently, the Coast Guard
Regions examined the feasibility of implementing pre-booming at each port and
SPM under jurisdiction.

22. Pre-booming is not practiced at any of the 16 SPMs located in port


jurisdiction. Reported constraints include strong currents ranging from 3-6
knots, high tidal ranges, and strong tidal streams as also 3600 swing of tanker
at SPM with tide change and presence of standby tug in vicinity for immediate
assistance. However, ecological sensitivity is of significant concern, particularly
in the Gulf of Kutchch, Kochi, Chennai, Kakinada, and Paradip and remains
unaddressed.

23. Except for oil berths at Karaikal, Tuticorin, Chennai, Ennore and
Visakhapatnam port and permanent boom on dockside at Sikka Reliance
terminal, pre-booming is not practiced at any port. Reported constraints
include strong tidal currents ranging from 3-6 knots and periodic change of
direction with flood and ebb stream. The Committee was appraised of the study
conducted by Coast Guard which had observed feasibility of pre-booming for oil
berths at Mumbai and Kochi and recommended implementation. Pre-booming
though feasible for oil berths at Marmagao and New Mangalore is not
recommended view obstruction to adjacent berths and low shoreline sensitivity
respectively.

24. The findings and observations of the Coast Guard study on pre-booming
practice are summarized in ensuing tables for ports and SPMs on the west and
east coast respectively.

34
Ushering a Step Change

PRE-BOOMING PRACTICE AT PORTS AND SPMs ON WEST COAST

Facility Assets/ Comments


Pre-booming
Gulf of Kutchh 11 SPMs Strong currents up to 3 kn
Three oil jetties High tidal ranges
Not practiced Strong tidal streams
Permanent booming only by
M/s Reliance at Sikka dockside
Mumbai Port Two oil jetties No ecologically sensitive areas are present
Not practiced near to the oil handling facility
Area fed continuously by the ebb/ flood
stream
Currents above one knot present for at
least 66% of the time
Current buster or other equivalent booms
are recommended to contain spills near oil
terminal
Mormugao One oil jetty No ecologically sensitive areas are present
Not practiced near to the oil handling facility
Pre-booming feasible, but may hinder
movement of other vessels likely to berth
at or behind oil handling berth
New Mangalore Four oil jetties Low shoreline sensitivity
Port One SPM Port could be advised to maintain boom
Not practiced onboard suitable vessel for immediate
response
Kochi Port Three oil jetties Very high environmental sensitivity of
One SPM surrounding areas
Not practiced Nil feasibility due to strong tidal currents
throughout with periodic change of
direction (flood/ ebb stream)
Boom barrier at crude oil terminal
recommended and standby vessels with
current buster or equivalent booms near
SPM & crude oil terminal

35
Ushering a Step Change

PRE-BOOMING PRACTICE AT PORTS AND SPMs ON EAST COAST

Facility Assets/ Comments


Pre-booming
Chennai Port Two oil jetties
Practiced at oil berths
Ennore Port Practiced at oil berths
Limited One oil jetty
Karaikal Practiced at oil berths
All resources kept at
jetty and deployable
in 10 min
CPCL Oil berth located Practically not possible due to relatively
about 1.4 km offshore higher wind speed & currents
Not practiced
VOC Port Practiced as SOP
Tuticorin since 2009
One oil jetty
Visakhapatnam Four oil jetties Permanent boom is garlanded
port Practiced in inner
harbor
Pollution control craft
kept standby with
boom and accessories
HPCL SPM at Not practiced Tankers generally turn by 3600 around
Vizag SPM with tide change
Kakinada Sea Port One oil jetty
Ltd Not practiced
However, boom kept
standby for any
emergency
Paradip One oil jetty Not practically feasible
One SPM Tanker rotates freely in line with the
Not practiced prevailing wind and currents during cargo
discharge
Pollution response assets standby to meet
any contingency
Haldia & Kolkata Seven oil jetties Not feasible view strong current of 4-6
Not practiced knots at riverine jetties

36
Ushering a Step Change

Planning Standards for Pre-booming

25. Considering the metrological factors and mobility desired of the ship and
its assisting craft it may not be feasible to implement pre-booming at the SPMs
as a Standard Operating Procedure (SOP). However, ecological sensitivity of the
areas likely to be affected by the spill remains an issue of significant concern
and is required to be addressed by an equivalent measure of protection against
any risk of oil spills.

26. A possible solution lies in compulsory stationing of suitable oil spill


response craft during cargo discharge, in vicinity of SPMs in the Gulf of
Kutchch (GoK), Kochi, Chennai, Kakinada, and Paradip for immediate
response. However, where response time for dispatching craft from alongside to
scene of incident is less than about 15-20 minutes, it may be permissible for
the pollution response craft to remain alongside, albeit fully manned and ready
to sail at immediate notice whilst discharge operation is in progress at the
SPM.

27. At the port facilities, the practice of pre-booming at Karaikal, Tuticorin,


Chennai, Ennore, Visakhapatnam and Sikka Reliance terminal dockside may
continue as hitherto. Further, it is recommended that pre-booming may be
implemented at oil berths in Mumbai and Kochi.

28. The practice of pre-booming will provide effective containment in the


event of spills. It will also keep response personnel in-date in deploying booms.
The Planning Standards for pre-booming may be adopted through an
amendment to the Port bye-laws.

37
Stakeholder Consultations 5
Introduction

1. Consultations were held with authorities of stakeholders in Ports and


coastal states at Mumbai for the West coast and at Chennai for East coast.
Stakeholders were requested for submission of information in a standardized
ten point agenda as appended in the figure below.

2. Detailed deliberations were held on each agenda pertaining to tier 1


inventory of equipment and response preparedness, sources of funding, and
collection of cess, etc. The agenda wise tables capture the summary of
responses received from the stakeholders and the outcome of the consultations
with stakeholders.
Ushering a Step Change

Agenda 1. Oil pollution cess collection mechanism

Port Mechanism
Kandla Oil Pollution Cess is collected on the imports of crude oil at Vadinar at
the rate of Re. 0.50 Per MT once in 3 months and the proceeds are
remitted to the Government as per the procedure.
Mumbai The vessel agent are required to file a declaration form in respect of
liability regarding OPC when they approach for VCN and make advance
payment of vessel related charges on self assessment basis. The
collection of Oil Pollution Cess or demanding attested attested copies of
receipts for payment of Oil Pollution Cess made within preceding 3
months at any Indian Port will be monitored by Dock Master Control
Station.
JNPT Port Collect the oil pollution cess from the concerned agencies based on
POL Products handled.
New Mangalore Oil Pollution Cess is collected @ 50 paise per tonne of oil
imported/exported through the Port. 90% of the oil cess amount is
remitted to Ministry of Shipping and 10% is retained by the Port.
Cochin Cess collected from vessels @ 50 paise per metric tonne.
Chennai The oil cess of 50 paise per tonne of the oil cargo handled is being
debited from the EDI account of the respective steamer Agent who
handles the oil tanker. 90% of the oil cess amount is remitted to Ministry
of Shipping and 10% is retained by the Port as Servicce Charges.
Visakhapatnam Port has levying Oil Pollution Cess for the vessels carrying
Export/Import Black Oils i.e. Light Diesel Oil, Furnace Oil and Crude Oil.
A bill is generated based on the cargo declaration furnished by the
Steamer Agent through Import Gneral Manifest (IGM) in respect of
Import Vessels and the final Export Application/S.B. tonnage is the basis
for collection of Oil Pollution Cess on Export vessels. The Oil Pollution
Cess once paid at any part for a given parcel or tonnage is valid for a
period of 3 Months for the same size of future parcel/tonnage for the
said vessel.
Paradip Oil Pollution Cess collected @ Rs. 0.50 per MT once in 90 days.
Kolkata Oil Pollution Cess is collected by KoPT from the Steamer Agent on behalf
of Ministry of Shipping in terms of Section 356 (M) of MS Act, 1958. The
collected cess is remitted to the Ministry of Shipping after deducting the
cost of collection and a proforma account is submitted.
Mormugao Cess is collected at Rs. 0.50 paise Per tonne in all oil tankers calling at
Port.
VoC Port As per Ministry's letter No. PAO(Sh)/C/OPC/05-06-167 dated 05-08-2005,
oil pollution cess is being collected at the rate of 0.50 paise per tonne
from the user and remitted to Government after deducting 10% of the
collection which is pertaining to the port.
Ennore 0.50 paise per tonne

39
Ushering a Step Change

Agenda 2. Total cess collection from 2010-11 to 2012-13

Port Year Cess Collection (Rs.)


2010-11 10811904
Kandla 2011-12 8971939
2012-13 11190862
2010-11 9022324
Mumbai 2011-12 9986532
2012-13 11733679
2010-11 2017618
JNPT 2011-12 2119793
2012-13 1443914
2010-11 2768427
New Mangalore 2011-12 2513486
2012-13 2841123
2010-11 2658370
Cochin 2011-12 2847702
2012-13 3146150
2010-11 3989552
Chennai 2011-12 3465353
2012-13 3307317
2010-11 2327362
Vishakhapatnam 2011-12 3888824
2012-13 2660154
2010-11 5028284
Paradip 2011-12 6077907
2012-13 5903039
2010-11 2149859
Kolkata 2011-12 1478681
2012-13 1294039
2010-11 217680
Mormugao 2011-12 101918
2012-13 115641
2010-11 28398
VOC 2011-12 19555
2012-13 16195
2010-11 162029
Ennore 2011-12 160879
2012-13 147057
Total 126613546

40
Ushering a Step Change

Agenda 3. Total oil cargo handled port wise

Port Year Oil Cargo Handled


(million metric tonnes)
2010-11
Kandla 2011-12
2012-13 39.273
2010-11 33.17
Mumbai 2011-12 33.32
2012-13 34.75
2010-11 4.89
JNPT 2011-12 4.91
2012-13 4.12
2010-11 19.63
New Mangalore 2011-12 20.17
2012-13 22.52
2010-11
Cochin 2011-12
2012-13 13.73
2010-11 13.99
Chennai 2011-12 13.29
2012-13 13.38
2010-11 19.26
Vishakhapatnam 2011-12 18.43
2012-13 13.65
2010-11 12.84
Paradip 2011-12 15.09
2012-13 16.46
2010-11 10.54
Kolkata 2011-12 7.26
2012-13 5.50
2010-11
Murmagao 2011-12 0.82
2012-13
2010-11 57.29
VOC 2011-12 43.46
2012-13 35.99
2010-11
Ennore 2011-12 3.02
2012-13
Total 530.743

41
Ushering a Step Change

Agenda 4. Mechanism of funding oil spill equipment

Port Mechanism
Kandla Port has an MOU with Oil companies where these oil companies
together bear the capital expenditure for intial procurement of
equipment.
Mumbai It is under MOU with Oil companies.
JNPT Adequate Budget provision is available towards purchase of Oil
Spill Equipment.
New Mangalore The existing Pollution Control Equipment were procured form
the port fund. There is porposal for upgrading the capability of
Oil spill Equipment by entering in to MOU with oil companies
except MRPL.
Cochin Oil spill combat equipments funded by oil handling companies
like BPCL-KR etc.
Chennai An MOU has been signed with oil companies in the year 2003
for augmenting the oil spill response facilities and equipments
have been procured by the funding of oil companies which are
operated and maintained by the Pollution Control Cell of the
Port.
Visakhapatnam An MOU has been signed with Oil companies , which contributes
towards procurement of Oil spill response equipment
Paradip Mostly from major Oil companies ( IOCL, HPCL & BPCL)
Kolkata At KDS, it is funded from Port's own resources. At HDC, cost of
pollution control equipment is borne by the stakeholders in the
ratio of their handling
Mormugao It is under final assessment of MOU and will be sponsored by Oil
companies.
VoC Port The MoU between Tuticorin Port Trust and Indian Oil
Corporation, Southern Petrochemical Industries on tier 1 oil
pollution combating equipment at Tuticorin Port Trust was
signed on 11 August 2006. The cost of procurement, operation
and maintenance is shared by Indian Oil Corporation and
Southern Petrochemical Industries
Ennore The equipment has been deployed by BOT operator.

42
Ushering a Step Change

Agenda 5. How and where the oil spill equipment is deployed

Port Deployment of equipment


Kandla Oil spill dispersant is kept ready in OSD tanks on operating
tugs and the equipment when procured will be deployed
on a dumb barge and the operation and maintenance will
be outsourced to a qualified company.
Mumbai Oil Spill equipments will be deployed at Marine Oil
Terminal, Jawahar Dweep.
JNPT All tugs are equipped with oil spill spraying booms on
board. Additional equipments/ materials to combat oil spill
are kept at fire station.
New Mangalore The operation and maintenance of oil spill equipment has
been outsourced to a private firm. As per the requirement
the booms, skimmers etc are deployed for operations.
Cochin All equipments are maintained in strategic locations such
as onboard Harbour tug, container at Cochin oil terminal,
at fire station and on Skimmer vessel
Chennai Boom, skimmer etc are deployed on a pollution control
vessel. Oil tankers are protectively boomed when
discharging alongside.
Visakhapatnam Oil spill equipment is being deployed in Visakhapatnam
harbour by the operational staff of Marine Department by
utilizing floating crafts.
Paradip All the oil spill equipment are located on various crafts and
on one dedicated oil pollution vessel viz., m.v. Kali.
Kolkata The equipments are located at Kolkata Port and can be
mobilized at short notice to wherever necessary. Oil spill
dispersant is stored at strategic locations along the river.
Mormugao Oil spill equipments are placed at port craft jetty under
SO(M) section at berth no.8 and will be deployed normally
within the port limit
VoC Port Oil spill response equipment are deployed at oil jetty and
tankers are garlanded with oil containment booms.
Ennore Equipment deployed by the BOT operator.

43
Ushering a Step Change

Agenda 6. Area of coverage

Port Area of coverage


Kandla Entire port limits covering Kandla & Vadinar
Mumbai Area of operations include coverage of the territorial
waters in Mumbai/JNPT Harbour and more particularly
within MbPT and JNPT Port limits including ONGC's
facilities at Nhava and Uran
JNPT JNPT Harbour-water limit
New Mangalore Within the confines of wharfage and up to break waters
Cochin Entire harbour area
Chennai Entire port limits
Visakhapatnam Entire port limits
Paradip Entire port limits
Kolkata Oil Spill equipments are distributed at KDC and HDC
Mormugao 310.55 sq km.
VoC Port Harbour basin and port limit
Ennore 600mtrs

44
Ushering a Step Change

Agenda 7. Experience of handling incidents of Oil pollution

Port Experience
Kandla Nil ( Minor incidents successfully handled by spraying OSD)
Mumbai Nil
JNPT In August 2010 oil pollution occurred due to collision
between vessels MV MSC Chitra & MV Kjalijia
New Mangalore In 2010 and 2011 , oil spill booms were deployed , oil spill
dispersant and absorbent pads were used to clean the water
polluted with approx 500lts and 5000lts of black thick oil
respectively
Cochin In March 2007, there was accidental discharge of oil from
Malaysian Naval Ship in Mattanchery channel contained by
having oil boom ,skimmed by skimmer and using OSD
Visakhapatnam Nil
Paradip During Sept'2009 Port has handled oil spillage from sunken
vessel MV Black Rose. Entire sunken ship was surrounded
with Oil Containment Booms. Entire spilled oil was contained
and restricted within the ship side and same was collected
using various pollution/collection equipments like skimmer,
oil reception barge, sorbent booms, sorbent pads etc
Kolkata Two incidents of minor oil spillage- Jan'2011,MT Ratna Urvi
came in contact with Oil Jetty and on 23rd Nov,2011 there
was collision between Tiger Spring and Green Valley causing
Oil spillage
Mormugao Minor pollutions are being tackled by deploying oil booms,
chemical dispersant etc
VoC Port During the leakage of furnace oil from m.t. Jag Preeti on
03 May 2011 at oil jetty, spill was contained and cleaned
with own resources.
Ennore Nil

45
Ushering a Step Change

Agenda 8. Coordination with Coast Guard and other agencies

Port Coordination with Coast Guard and other agencies


Kandla Coordination is kept and maintained with the Coast
Guard.
Mumbai Coordination with Coast Guard and other agncies will be
as per the enclosed MoU with Oil Companies as above.
JNPT JNPT is regularly participating in the Table Top Exercise,
Training, Mock Drills and various meetings on Oil Spill
organised by the Coast Guard, MPCB and other Agencies
involved in Oil Spill Control.
New Mangalore Port is in touch with Coastguard and District
Administration for updating information and activities
related to oil spill response equipments.
Cochin No feedback received
Chennai Joint Exercise "SPARKLING SEAS" with coast Guard for
Level II Oil Spill Response was carried out on
27.10.2010. Another Joint Exercise was conducted on
29.12.2011 by Indian Coast Guard with Japanese Coast
Guard off Chennai Coast during which an exercise was
also conducted for Oil Spill Response and the Chennai
Port Pollution Control team also participated.
Visakhapatnam The Indian Coast Guard being the nodal agency is
consulted in enforcing the MoU entered between VPT &
Oil Companies on combating oil spills.
Paradip Joint inspection by Coast Guard and MoS on Tier-I Oil
Spill Response facilities of PPT carried out on Dt.
21.01.2012.
Kolkata Bi-monthly meeting conducted by Coast Guard are
attended by KoPT.
Mormugao No feedback received
VoC Port VOCPT maintains good co-ordination with Coast Guard
and oil handling agencies viz., Indian Oil and Southern
Petrochemical Industries
Ennore Yes, coordination with Coast Guard and other agencies

46
Ushering a Step Change

Agenda 9. Audit Mechanism of tier-1 facility

Port Audit Mechanism of Tier-1 facility


Kandla NOSDCP conducts regular audits and inspections.
Mumbai Audit of Tier-I facility will be conducted by Indian Coast
Guard.
JNPT Audit Mechanism for the same is yet to be developed.
New Mangalore Inspection of Tier I oil spill response facilities at the Port
was carried out by the DD (Engg), MoS along with Coast
Guard representative on 27.02.2013.
Cochin Internal Assessment Carried out.
Chennai Annual Audit is conducted by the Coast Guard for the
pollution control equipments. Audit was also conducted
by the Ministry Officials.
Visakhapatnam The Oil Companies take up the responsibility of auditing
the Tier-I facility twice in year.
Paradip Annually/Half Yearly Inspection of Equipments & Mock
Drills are being carried out by Indian Coast Guard District
Headquarters.
Kolkata An Audit/inspection team comprising representative of
Coast Guard and Ministry of Shipping inspects the Oil Spill
Response facility.
Mormugao Inspection of Tier I oil spill response facilities at the Port
was carried out by the DD (Engg), MoS along with Coast
Guard representative on 27.02.2013.
VoC Port Tier 1 oil spill combating equipment at VOCPT is audited
by the team of officials of Ministry of Shipping (MoS) and
the Indian Coast Guard
Ennore Inspection of Tier I oil spill response facilities at the Port
was carried out by the DD (Engg), MoS along with Coast
Guard representative on 27.02.2013.

47
Oil Pollution Cess 6
Introduction

1. An oil pollution cess is being levied on every ship calling at any port in
India, in respect of each tone of oil imported by a ship into India in bulk as a
cargo, for the purpose providing oil reception facilities and equipments and
materials for combating oil pollution at various ports in India. However, the
cess being collected for the past twenty-five years at the nominal rate of
50 paise per tonne has never been utilized for the intended purposes.
Apparently, there has been a lack of uniformity in the collection, partly due to
difficulties in implementation of the legal provisions and partly, inadequate
monitoring. The inadequacy of tier1 equipment at ports has set the focus on
the corpus generated by the oil pollution cess and the possibility of its use for
devising a plan to equip major and non-major ports with at least tier 1 facilities
so that any oil pollution within port waters is tackled immediately and no
damage is done to the coast and environment. This chapter reviews the status
and examines the possibilities for strengthening the cess collection mechanism,
and corpus.

Background

2. India is party to the IMO OPRC Convention, 1990. OPRC 1990 requires
that a State party to the Convention establish a contingency plan and
stockpiles of equipment for responding to incidents or threat of oil pollution.
The NOSDCP promulgated by the Coast Guard to implement the provisions of
the Convention provides that all oil handling agencies including ports are
responsible to combat oil pollution in their areas. Ports are accordingly
required to develop tier 1 facilities for combating oil spill in the port limits.

3. A scheme is envisaged to support major and non-major ports by way of


financial assistance for the procurement of equipment and/ or allied facilities
from the oil pollution cess. The oil pollution cess is being levied and collected in
terms of Notification No. 401 dated 22/07/1988 under Section 356 O read with
Section 356 M of the Merchant Shipping Act, 1958 with effect from
01/10/1988.
Ushering a Step Change

Extract of Merchant Shipping Act, 1958

356 M. Oil Pollution Cess. (1) With effect from such date as the Central
Government may, by notification in the Official Gazette, specify, there shall
be levied on every ship calling at any port in India being a ship which carries
oil as cargo, a cess to be called Oil Pollution Cess (hereafter in this Part
referred to as cess) at such rate not exceeding fifty paise-
(a) In respect of each tone of oil imported by a ship into India in bulk as
a cargo;
(b) In respect of each tonne of oil shipped from any place in India in bulk
as a cargo of a ship.
As the Central Government may, by notification in the Official Gazette, fix:
Provided that no cess shall be levied on a ship at any port if the ship
produce evidence of having paid such levy at the same or any other port in
India within a period of three months immediately preceding its present call
at the port.
(2) The cess shall be collected by such officers and in such manner as the
Central Government may prescribe in this behalf and shall, after deduction of
such costs of collection, if any, as the Central Government may determine, be
paid to such authority as the Central Government may specify.
(3) The proceeds of the cess shall, after due appropriation made by
Parliament by law, be utilised for the purpose of providing oil reception
facilities and equipments and materials for combating oil pollution at various
ports in India and for such other like purposes as the Central Government
may, by notification in the official Gazette, from time to time, specify.
356O. Power to make rules- (1) The Central Government may, having
regard to the provisions of the Convention, make rules to carry out the
purposes of this Part.
(2) In particular and without prejudice to the generality of the provisions of
sub-section(1),such rules may-
(e) specify the officers who shall collect the cess and the manner
in which the cess shall be collected.
(ee) any other matter which, for the implementation of the
Convention, has to be or may be prescribed [Ins by The Merchant
Shipping (Amendment) Act,2003 (59 of 2003) 5.6(iv)].

49
Ushering a Step Change

60000
POL handled at Major Ports (2010-12)
50000 (thousand tons)
40000

30000

20000 2010-11
2011-12
10000

4. The cess is available at every port in India at the rate of fifty paise in
respect of each tonne of oil:

(a) imported by the ship into India in bulk as a cargo, and

(b) shipped from any place in India in bulk as a cargo of ship.

5. It is the responsibility of the master, owner or agent of a ship to pay the


amount of cess before commencement of discharge of oil or loading of oil. The
Conservator in respect of major ports and the Port Officer in respect of
intermediate and minor ports in India are the officers responsible for collection
and depositing to the Central Government.

Mechanism of Cess Collection

6. Oil Pollution Cess is levied on vessels carrying export/ import of black


oils i.e. light diesel oil, furnace oil and crude oil. A bill is generated based on
the cargo declaration furnished by the Steamer Agent through Import General
Manifest (IGM) in respect of Import Vessels and the final Export Application/
S.B. tonnage is the basis for collection of Oil Pollution Cess on export vessels.
The oil pollution cess once paid at any port for a given parcel or tonnage is
valid for a period of three months for the same size of future parcel/ tonnage
for the said vessel. The oil cess of 50 paise per tonne of the oil cargo handled is
being debited from the EDI account of the respective steamer Agent who
handles the oil tanker. 90% of the oil cess amount is remitted to Ministry of

50
Ushering a Step Change

Shipping and 10% is retained by the Port as Service Charges. The vessel agent
is required to file a declaration form in respect of liability regarding OPC when
they approach for VCN and make advance payment of vessel related charges on
self assessment basis. The collection of oil pollution cess or demanding attested
copies of receipts for payment of oil pollution cess made within preceding three
months at any Indian Port is usually monitored by the Dock Master Control
Station. Incidentally, Captain of Port Department, Goa and Kerala intimated
during stakeholder consultation that oil pollution cess collection mechanism is
not implemented.

Utilization of Cess

7. The amount of oil pollution cess collected and deposited by various major
ports and non-major ports under the Maritime Boards and State Governments
for seven years from 2005-06 to 2011-12 was Rs. 27.58 crore. The cess
collected intended to be utilized for the purpose of providing oil reception
facilities and equipments and materials for combating oil pollution at various
ports in India and for such other like purposes as notified by the Central
Government from time to time. Though the oil pollution cess is being collected
for nearly twenty-five years from since October 1988, no money was ever
utilized for the intended purpose for want of a scheme for implementation.

Cess Collection at Major Ports


(2010-11 to 2012-13)
35000000
30000000
25000000
20000000
15000000
10000000
5000000 Oil Cess Collection in Rs
0

51
Ushering a Step Change

8. The shipping activities on the Indian coast have been increasing with the
increase in trade and the ports being developed. The major and non-major
ports are divided into three risk categories from A to C depending on risk
assessment and the profile of cargo handled. However, the recent oil spill
incidents on the coast resulted in social, economic, and ecological damage and
the major and non-major ports were found to be inadequately equipped in
comparison to the risk owing to high costs of capital acquisition. Based on a
rough indicative cost, acquisition of the equipment stipulated by the Indian
Coast Guard is estimated to vary from Rs. 1 Crore for Cat C port to Rs. 15
Crore for a Cat A port. Therefore, a need has been felt to devise a scheme to
utilize the oil pollution cess collected by various ports to augment the capacity
to combat and mitigate oil pollution.

Funding Mechanism

9. As explained earlier, ports need to develop tier 1 facilities and capability


to tackle oil pollution within their waters. The cost varies from Rs.1 Crore to
Rs.15 Crore, depending upon the risk categorization of the Port. Ports need to
explore ways and means to develop these mandatory facilities.

10. Funding of tier 1 capability may be achieved in three ways. First option is
to utilize internal resources, like any other assets. A second option is to enter
into a Memorandum of Understanding with Oil Companies and Tank Farm
Owners for proportional contribution, as all stakeholders have a joint
responsibility towards the environment. The MoU route is commonly being
adopted by major ports. A third option is to grant financial assistance from a
Scheme for Central Assistance to Major Ports and Maritime States from a Oil
Pollution Fund being developed by the Central Government from the cess
collected from the Ports as per the MS Act, 1958.

11. The Committee strongly advises the Ministry of Shipping to develop and
implement such a Scheme so that all ports will be equipped with the requisite
tier 1 capability. The Committee has also deliberated about the potential of
developing tier 1 capabilities at smaller ports, where on account of the limited
cargo handled revenue generated is insufficient to afford a significant financial
liability, yet, capabilities are required to be accessible.

52
Ushering a Step Change

Tier 1 capability at Gujarat Maritime Board Ports

12. The Gujarat Maritime Board (GMB) has been expressing the idea of
developing common facilities for a group of smaller ports at one place and to
deploy those facilities whenever an incident occurs at one of those ports. The
Committee, after due deliberations, could not subscribe to this idea fully on
various counts.

13. In nine of the twelve GMB ports, an average 80-90 % of the spilled oil in
any incident is expected to reach the shoreline in less than 20 minutes to an
hour. The length of coastline likely to be affected by a tier 1 spill is a minimum
of one kilometer, and as much as four kilometers. Further, the coast of Gujarat
saddles one of Indias most ecologically sensitive areas viz., the Gulf of Kutchch
marine sanctuary besides 1031 km2 of mangroves and 460 km2 of salt pans
which produces nearly eighty percent of Indias salt. This implies that oil spill
response measures by GMB should be predominantly focused on shoreline
protection and clean-up measures, and also positioned for immediate
deployment.

Port % of oil Time to Length of


reaching reach coastline
shoreline shoreline likely to be
affected
Okha 96 % 45 min 2.45 km
Bedi 97 % 50 min 0.85 km
Navalakhi 85 % 1-4 h 1.4 km
Mandvi 86 % 3-9 h 1.75 km
Jakhau 78-90 % 3-24 h 2.2 km
Porbandar 88% 1-3 h 2.3 km
Veraval 82 % 30 min 1.6 km
Jafrabad 99% 20-45 min 1.5 km
Alang 83 % 40 min-12 h 1.9 km
Bhavnagar 91 % 1-6 h 1.65 km
Dahej 82% 4-24 h 3.6 km
Magdalla 88% 30 min -5 h 1 km

14. Taking these facts into consideration, the Committee came to the firm
conclusion that it was inevitable that the GMB builds up individual tier 1
facility at each of its ports, over a period of time, using any one of the funding
options, since it is highly improbable that an inventory positioned elsewhere
could be deployed within a reasonable period of time to prevent damage to its
sensitive shoreline.

53
Ushering a Step Change

Review of the provisions of MS Act on Oil Pollution

15. In view of the aforesaid position, the Committee was of the opinion that it
is necessary to review the provisions of MS Act, 1958. On a thorough review
and detailed deliberations, the Committee suggests that the statutory
provisions may be amended as follows:

(a) Oil Cess should be increased from present level of Rs.0.50 to Rs.2
to mop up enough funds for creation of oil pollution capabilities in all
ports.
(b) Instead of mentioning a particular amount, the provision needs to
be amended to give effect as to such amount as Central Government
may notify from time to time.
(c) Cess should be collected from all oil/hazardous liquid
tankers/vessels calling on Indian Ports on each entry basis instead of
present 3 months period. The Committee did not find any justification
for levy of cess once in 3 months because the potential danger of spillage
and pollution exists on every drop of oil/hazardous liquid
loaded/discharged at the Port;
(d) Cess may be collected on the quantity of oil/hazardous liquid
loaded/discharged at the Port but not on the quantity carried by the
tanker/vessel;
(e) Oil and Hazardous Liquid need to be defined in the Act; and
(f) Considering the aforesaid logic, the Cess should be levied on
coastal vessels carrying such oil/hazardous liquids
Review of Collection Mechanism

16. Based on its review of the Cess amounts deposited by the Ports, the
Committee was of the opinion that despite statutory provisions existing in the
MS Act, there is no effective monitoring mechanism either of the levy, or
collection, or deposit of Cess into the Central Government Account. In some
cases the levy is not being collected, and sometimes, even if collected, it has
not been deposited. There are also cases where a wrong account number was
mentioned and deposited. There is no procedure for acknowledgement of
deposit.

54
Ushering a Step Change

17. Some ports deduct the administrative charges and some others do not.
The Committee could not ascertain whether administrative charges are
deducted on uniform basis.

18. The Committee did not rule out the possibility of leakage of revenue on
this account due to the above factors. Hence, it is felt desirable that the whole
mechanism should be streamlined and ensured there is no leakage of any
revenue.

19. In view of foregoing, the Committee recommends the implementation of a


Standard Operating Procedure (SOP) as follows:

(a) Master of Vessel is primarily responsible for payment of Cess; the


Vessel Agent is responsible for payment of advance deposit to the Port on
this account;
(b) Port Officer/Deputy Conservator of the Port is responsible for levy
and collection of cess;
(c) After the vessel has sailed, the deposit is to be adjusted
immediately against quantity loaded/discharged and the final amount of
Cess levied;
(d) No Port clearance is to accorded by the Port Officer/Deputy
Conservator if full cess is not collected;
(e) In maritime states, all Port Officers are to deposit the Cess amount
through their Maritime Boards/Port Departments, to the account of
Central Government on monthly basis by 5th of every month; due
reconciliation is to be done at the level of Maritime Board or Ports
Department and a Monthly Statement at their level is to be sent to the
Ministry of Shipping, Government of India, along with details of vessel,
quantity loaded/ discharged, amount collected and payment details;
(f) A nodal officer is to be designated in the Ministry of Shipping to
monitor the payments received from Major Ports and Maritime States. A
monthly return is to be submitted to Secretary (Shipping)/ DG (Shipping)
about the short-payments or non-payments by the Major Ports/Maritime
States. And also, follow-up needs to be sent to them by 10th of every
month.
(g) Audit may be conducted by Maritime Boards/Major Ports annually
and the Audit Certificate forwarded to the Ministry of Shipping;

55
Ushering a Step Change

(h) If any default occurs in complying with the above procedure, the
concerned officer is liable for action under various provisions of the MS
Act and also the concerned Port Trust/Maritime Board/State
Department will not be eligible for financial assistance for their pollution
control equipment.

40000
Crude and Product handled at Major Ports (2010-12)
35000
(thousand tons)
30000

25000

20000

15000 Crude

10000 Product

5000

The bow of the sunken tanker Alfa I


Elefsis Bay, Piraeus, Greece
Source: IOPC-2012_Incident Reports

56
Ushering a Step Change

Cess Collection Practices in Select Countries

20. The Committee reviewed the cess collection practices in select countries
including China, New Zealand, Canada, and United States and a discussion on
the observations and findings ensues.

China - Marine Oil Spill Pollution Fund

21. China started a compensation fund to be used in cases of marine oil


pollution from July 2012 after oil spills in the Penglai 19-3 oilfield in Bohai Bay
polluted over 6,200 square kilometers of water in June 2011 and caused huge
losses in the tourism and aquatic farming industries of Liaoning and Hebei
provinces.1 The regulation jointly issued by the Ministry of Finance (MOF) and
the Ministry of Transport (MOT), requires receivers or agencies of mineral oil -
such as crude oil or heavy diesel - entering China's waters to pay 0.3 yuan
(about 0.05 U.S. dollars) per tonne carried on each entry. The fund's
establishment is aimed at protecting the country's oceanic environment and
promoting the sustainable and healthy development of marine transport
industry. Compensation from the fund shall not exceed 30 million yuan for
each oil pollution incident. A committee comprising the MOF, MOT, Ministry of
Agriculture and several other departments as well as representatives from
fund-payers oversees the management of the Fund.

New Zealand - Oil Pollution Levy

22. New Zealand applies an Oil Pollution Levy (OPL) to all commercial vessels
over 100 gross tons and 24 meters or more in length, offshore oil installations,
exploration wells and oil pipelines. The (OPL) comprises of three components
viz., Base levy, Capability levy, and a Capital expenditure levy.

23. The mechanism for levying contributions to the Oil Pollution Fund is
contained within the Maritime Transport Oil Pollution Levies Order 2013,
which sets out specific financial levies for coastal trade ships (including oil
tankers), fishing vessels, offshore petroleum rigs and platforms, and oil
pipelines. Foreign vessels pay per voyage, per port while New Zealand vessels
pay annually. For the first time in fifteen years, the levy was increased, with
the contribution by each industry sector updated to reflect its oil pollution risk

1
U.S. energy giant ConocoPhillips China, operator of the oilfield, paid 1.09 billion yuan in compensation
for the oil spills while China National Offshore Oil Corp. and the Chinese unit of ConocoPhillips paid 480
million yuan and 113 million yuan, respectively, for environmental protection efforts in the Bohai Sea.

57
Ushering a Step Change

potential; with effect from 1st July 2013, OPL revenue increased from $3.1
million to $4.5 million annually. Two temporary levies to boost response
capability and equipment in the wake of the grounding of the Rena will
generate additional income of approximately $1 million for each of the next
three years.

OPL rates (effective from 1 July 2013)


Vessel Type Base levy Capability levy Capital expenditure
levy
New Zealand Flag
(annual fee)
Passenger and cargo 301.81 cents 26.83 cents 41.99 cents
ship, harbour tug and per GT per GT per GT
oil tanker
Oil tanker 73.91 cents 6.57 cents 10.29 cents
(oil carried as cargo) per tonne of persistent per tonne of per tonne of persistent oil
oil carried as cargo persistent oil carried carried as cargo
10.29 cents as cargo
per tonne of non- 0.92 cents 1.43 cents
persistent oil carried per tonne of non- per tonne of non-per-
as cargo persistent oil carried sistent oil carried as cargo
as cargo
Fishing vessel 133.49 cents 11.90 cents 18.62 cents
per GT per GT per GT
Foreign Flag
(per voyage, per port)
Passenger and cargo 0.81 cents 0.07 cents 0.12 cents
ship and oil tanker per GT per GT per GT
Oil tanker 29.99 cents 2.67 cents 4.17 cents
(oil carried as cargo) per tonne of persistent per tonne of per tonne of persistent oil
oil carried as cargo persistent oil carried carried as cargo
6.72 cents as cargo
per tonne of non- 0.60 cents 0.93 cents
persistent oil carried per tonne of non- per tonne of non-
as cargo persistent oil carried persistent oil carried as
as cargo cargo
Oil Sites
(annual fee)
FPSO $85,186.00 $7,548.00 $12,266.00
Offshore installation $8,888.89 $107.00 $174.00
Oil pipeline $8,888.89 $86.00 $140.00
Oil exploration well $8,888.89 $24.00 $39.00

58
Ushering a Step Change

24. The OPL runs New Zealands maritime oil pollution preparedness and
response system and is maintained to cover the costs of the Oil Pollution
Advisory Committee, purchase of response equipment, investigating a
suspected marine oil spill, services associated with planning and responding to
marine oil spills, taking measures to avoid marine oil spills and to pay
expenses when the polluter is not identified.

25. A committee (the Oil Pollution Advisory Committee, or OPAC), made up of


industry and government representatives, and appointed by the Minister of
Transport advises the Maritime New Zealand Authority on inter alia the fixing
of the Oil Pollution Levy and the use of the New Zealand Oil Pollution Fund
(OPF). The Oil Pollution Fund (OPF) is required to be establish and
administered by Maritime Transport Act.

Canada - Ship-source Oil Pollution Fund

26. An 8,000 tonnes oil spill from the grounding of the tanker Arrow in Nova
Scotia in 1970 led Canada to create the Maritime Pollution Claims Fund
(MPCF).2 15 cents was levied per ton of oil imported or exported from Canada
between 1972 and 1976 to finance the MPCF. Canada continued with this
domestic regime despite contracting to the international regime in April 1989,
albeit by rechristening the MPCF as the Ship-source Oil Pollution Fund
(SOPF).3 The SOPF is intended to pay claims regarding oil spills from all classes
of ships at any place in Canada, or in Canadian waters including the exclusive
economic zone. It covers all claims for ship-source oil pollution, including those
governed by the 1992 Civil Liability Convention (CLC) and the 1992 Fund
Convention, as supplemented by the Supplementary Fund, and the 2001
Bunkers Convention. Defined class of persons in the fishing industry may
claim for loss of income.4 The Canadian Government is permitted direct access

2
The Marine Liability Act makes provision for the Ship-source Oil Pollution Fund (SOPF) and the appointment of
the Administrator to administer that fund. Liability and compensation for ship-source oil pollution in Canada is
governed by Part 6 of the MLA, Statutes of Canada 2009, Chapter 21. It was introduced under Part XX of the
Canada Shipping Act and became part of Canadian Law on June 30, 1971. It also established, for the first time in
the western world, the strict liability of ship owners for a discharge of oil together with possibility for limiting the
liability in certain circumstances.
3
The change was affected through amendment to Part XVI of CSA. In August 2001, the liability and compensation
provisions in Part XVI of CSA were transferred to the Marine Liability Act, Part 6 as modified by Statutes of Canada,
2009, Chapter 21.
4
The Canadian regime addresses all ships, other than tankers covered under the international regime. It does not
apply however to drilling activities in so far as an escape or discharge of oil emanates from those activities. Nor

59
Ushering a Step Change

as a claimant to the Fund since 1993. The SOPF performs two functions -
subrogation and last resort. The maximum liability of the SOPF is indexed
annually to the Canadian Consumer Price Index. In April 2011, for example,
the maximum liability beyond that available from the ship owner or the
international funds was $157,803,519, to the extent that the claim has not
been fully compensated. The SOPF Administrator is empowered to take
recourse action against third parties to recover amounts paid out of the SOPF,
and is a party by statute to any proceedings commenced by a claimant against
ship owner, insurer, or the Fund.

United States Oil Spill Liability Trust Fund

27. 26 USC 9509 (c)(2)(A)(i) provides for a Trust Fund of US$ one billion
paid by petroleum taxes to compensate for those unable to obtain adequate or
any compensation from the OPA 1990. The Oil Spill Liability Trust Fund
(OSLTF) was created post Exxon Valdez by levying a one-time cess on oil for a
fixed period of time. This $1 billion fund is managed by the US Coast Guard.
The on-scene commander has direct access to this open fund. The OSC can
draw up to $25,000 for urgent and essential expenditure during oil spill
response operation, subject to re-imbursement on settlement of claim.

Observations and Findings

28. An exclusive Fund may be maintained to run a countrys maritime oil


pollution preparedness and response system regardless of being party to the
Fund and Supplementary Fund Convention. A reasonable amount of one time
cess may be levied to create a corpus and thereafter the levy may be either
stopped or reduced to a nominal sum. A differential levy may be imposed on
domestic and foreign flagged vessels including an annual levy on domestic
vessels and per voyage, per port levy on foreign flagged vessels. Levy may also
be imposed on vessels other than tankers including, cargo vessels, passenger
vessels, fishing vessels, oil Floating Production, Storage and Offloading vessel
(FPSOs), and even offshore oil installations, pipelines and oil exploration wells.
The oil pollution cess of 50 paise per tonne imposed in India and the corpus
thereby generated is negligible compared to the levy imposed by other nations.

does it apply to a floating storage unit, or floating production storage units, unless the unit is carrying oil as a cargo
on a voyage to or from a port or terminal outside an offshore oil field.

60
Private OSRO 7
Background

1. The oil spill incident of m.v. MSC Chitra in August 2010 and the
m.v. Rak Carrier in August 2011 has indicated that unless comprehensive oil
pollution preparedness is put in place by all the stakeholders, the response
measures through Coast Guard efforts alone will not suffice. Any large oil spill
will incur mobilisation of large number of vessels and manpower, equipment
for salvage of oil, legal support for claims, which could be achieved only by
pooling the resources or alternatively, the clean-up operations may be
undertaken by a private Oil Spill response Organisation (OSRO), who can
provide all such services at the expense of the polluter.

Liability for Oil Spills

2. Evidently, there are two distinct categories of oil spill risks the
merchant vessels and oil installations. Major oil exploration and production
companies in India such as ONGC, Reliance, Cairn Energy, etc., maintain a
contractual arrangement with a foreign OSRO, who guarantees availability of
oil spill response equipment in India within 24 hours of notification of oil spill.
The guarantee usually includes provisioning of qualified specialists and aerial
dispersant application but does not include transportation of containment and
recovery equipment which are very heavy and bulky and used specifically to
protect the critical and environmentally sensitive shorelines. When an oil spill
hits the shoreline, the clean-up process is a long drawn affair and involves
mobilization of a large response inventory and manpower. Expecting this
support from a foreign based OSRO would not be cost effective, as the OSRO
would expect the clean-up costs to be paid upfront and the polluter will only
pay for reasonable costs, which does not generally include the transportation
cost from a foreign country.

3. The situation is different when it comes to merchant vessels. The owner


of a merchant vessel has strict liability for any pollution damage caused by oil
which has escaped or been discharged from the ship as a result of an incident,
both as per international law and the Indian Merchant Shipping Act, 1958. The
owner is, however, entitled to limit his liability as may be prescribed. The ship
Ushering a Step Change

owner is, therefore, required to maintain an insurance or other financial


security up to the limit of his liability for pollution damage caused by oil.

4. When oil is escaping or likely to escape from a vessel, the owner, agent,
master, or charterer of the vessel may be required by a notice served upon him
to take action for removal of oil slicks, dispersal of slicks, preventing the escape
of oil from the vessel, and removal of vessel to a specified place.
Notwithstanding the notice served on the owner, the Government may proceed
to take such measures as may be deemed necessary if the person fails to
comply (wholly or in part), or if the pollution caused or likely to be caused has
or may present a grave emergency. Any expenditure or liability so incurred by
the Government shall be a charge upon the vessel until the amount is paid. It
is for this contingency of grave damage or failure on part of a ship owner to
comply, that Governments maintain preparedness for response to oil spills.

5. As per the legislation prevailing in countries that are known to have


mandated existence of a pre-contractual arrangement, a ship calling at a port
in that country is required to have arrangement with a response organisation
in respect of a quantity of oil that is at least equal to the total amount of oil
carried onboard, both as fuel and cargo. Further, the ship is required to have a
declaration confirming that the arrangement has been made, and identify every
person who is a qualified individual to implement the arrangement.

6. Such a legislative requirement mandating a response arrangement for


the complete quantity of oil carried onboard would cater for every size of spill
from the ship, including tier-3 oil spills.

International Petroleum Industry Initiative

7. The International Petroleum Industry Environmental Conservation


Association (IPIECA) serves as the oil industrys principal channel of
communication with the United Nations. IPIECAs oil spill preparedness and
response program is carried out in close cooperation with the IMO and operates
within the context of OPRC 1990, which requires governments to work together
with the industry worldwide to play a major role in oil spill preparedness and
response.

8. The Oil Companies International Maritime Forum (OCIMF) formed in


1970 was initially, the oil industries response to increasing public awareness
of marine pollution by oil. Through this organization, the oil industry plays its

62
Ushering a Step Change

part by making its professional expertise available to government and inter-


governmental bodies. Current membership of the OCIMF comprises 47
companies worldwide, including three Asian companies Petroleum Industry
Marine Association of Japan (PIMA), Indian Oil Corporation, and Reliance
Industries Limited in India.

9. Evidently, the oil industry recognizes its primary responsibility of


facilitating proper and adequate response to oil spills. Thus, internationally it is
the norm is to have private oil spill resource centers funded by oil industry that
eventually develop into the main source for pooling up of resources in the event
of a tier 2 or, tier 3 spills.

Model in Select Countries

10. Undoubtedly, a cooperative approach between the oil and shipping


industries is the key to the establishment and sustenance of an effective
response system. However, it is the Governments role to establish the legal
and organizational framework for this relationship. The response model
consequently adopted by select countries is briefly described in the succeeding
paragraphs.

Australia

11. In Australia, the Australia Marine Oil Spill Center (AMOSC), an initiative
of the Australian oil industry, was formed in 1991 as a wholly owned
subsidiary of the Australian Institute of Petroleum. The Center is financed by
nine participating oil companies and other subscriber companies. These
companies carry out the vast majority of the oil and gas production, offshore
pipeline, terminal operations and tanker movements around the Australian
coast.

12. The role of AMOSC is principally provision of equipment and personnel


on 24 hour standby basis, to respond to a major oil spill, provision of oil spill
training services at their training center in Geelong, administration of the oil
industry mutual aid arrangements and, advice on oil spill equipment/ issues
as required.

13. Australian Maritime Safety Authority (AMSA) purchases its equipment


under National Plan Funds. A master service contract between the AMSA and
AMOSC supplements the Federal, State and Northern Territory Government

63
Ushering a Step Change

response resources located throughout Australia. Thus, designated oil spill


response resources of individual companies are made available to other
companies and the Australian National Plan under contract agreements that
are administered by the AMOSC.

Japan

14. The Petroleum Association of Japan (PAJ) is a trade association


comprising of 18 oil companies engaged in refining and marketing of oil in
Japan. The Petroleum Association of Japan Oil Spill Response (PAJ-OSR)
stores and lands oil spill response equipment for those who are in need free of
charge, in order to minimize the damage from tanker accident oil spills. The
association also disseminates information about oil spill response through
R&D institutions and international conferences. PAJ-OSR has established
bases equipped with oil spill response equipment in six locations in Japan and
five locations overseas where oil spill response training is also provided. The
Ministry of Economy, Trade and Industry (METI), Government of Japan
provides a subsidy to the POSCO program.

Korea

15. Korea has defined its National Response Capability target as 20,000
tons. Of this target, the government has retained responsibility for building up
a capacity of 10,000 tons through the Korea National Marine Police Authority.
5,000 tons each is assigned to the Korea Marine Pollution Response
Corporation (KMPRC) and the individual private companies. The KMPRC
comprises of 97 member companies and has its legal basis in the Law of
Marine Pollution Prevention, 1997. A separate registration regime is
established for cleanup business. About 23 contractors are registered under
the regime.

United Kingdom

16. In the United Kingdom, the UK MCA holds responsibility for pollution
response and salvage. However, responsibility for cleanup lies with the
Contractors who may use CG equipment resources or hire MCA tugs. The
Government maintains strategic overview for oil spill management and
minimum essential resources for first response. Funds to the tune of 100,000
pounds are available with UK MCA for oil spill response.

64
Ushering a Step Change

United States

17. Spill response arrangements within the USA are governed by the Oil
Pollution Act, 1990 (OPA 90). Under OPA 90, tankers within US waters are
required to have pre-contracted resources sufficient to deal with a number of
spill scenarios including maximum most probable discharge and worst case
discharge i.e., loss of entire cargo. As per OPA 90, responsibility for cleanup
vests with the polluter in the event of a spill.

18. A National Response Team (NRT) comprising members of 15 Federal


agencies with EPA as chairman and the USCG as vice-chairman and an
additional 13 Regional Response teams have a planning, policy and
coordination role and do not respond directly to incidents. USCG strike teams
located on all three sea boards provide for specialized equipment and personnel
as backup to resources from private sector. The USCG strategy is, Make the
polluter act, we will fill the gap.

19. The US has over 130 private, profit and non-profit Oil Spill Response
Organisations (OSROs) funded by the oil industry. They are essentially
facilitated by compelling liabilities against the industry under OPA 90.
Maritime Spill Response Corporation (MRSC) and Clean Caribbean Cooperative
(CCC) are the two major OSROs funded by oil industry. National Response
Corporation (NRC) also operates nationwide but is a for profit OSRO. The
OSROs are classified into different tiers of capability as M, W1, W2, or W3
based on a specified classification matrix.

20. Post Exxon Valdez, an Oil Spill Liability Trust Fund (OSLTF) has been
created by levying a one-time cess on oil for a fixed period of time. This $1
billion fund is managed by the USCG. The on-scene commander has direct
access to this open fund. The OSC can draw up to $25,000 for urgent and
essential expenditure during oil spill response operation, subject to re-
imbursement on settlement of claim.

Case for OSRO in India

21. It is commonly believed that maintenance and utilization of oil spill


response capability other than that required for first response is a cost
ineffective proposition. In India, the capitation charges approved by the

65
Ushering a Step Change

Government are prohibitive and far in excess of the rates levied by the industry
for utilization of assets of matching capability. Thus, capitation costs were
strongly contested in the case of the m.v. Maritime Wisdom. A private OSROs
closer cooperation with the insurers lends the advantage of assured cost
recovery and easy settlement of claims particularly for tier-3 scenario.

22. Response to large scale oil spills calls for sub-contracting of jobs and
labour at extremely short notice. It is also important that recovered oil is
properly disposed off. About 600 tons of oil recovered from m.v. Chitra
remained in the premises of the Jawaharlal Nehru Port Trust for a considerable
period of time, for want of Customs clearances. Similar was the case at
Chennai in an earlier spill. Such tasks of oil disposal are best left to an OSRO.

23. Start-up OSROs are known to have come up in India. But they are yet to
exude the required confidence. These start-ups would expect some kind of a
guarantee that covers their cleanup costs. They would also expect that some
form of premiums or continuing stand-by cost be provided to them even when
no oil spill occurs, so as to accrue some returns for their investment in the spill
response inventory.

24. The industry may not be readily forthcoming in pledging any finances,
unless nudged and mandated to do so. At the same time, unless the resources
to cover the startup capital and recurring costs are identified, enacting any
legislation would serve no purpose. Under the prevailing circumstances, it is
advisable for India to adopt the private OSRO system implemented in Canada,
China and the United States. The United States actively facilitates the private
OSRO by laying down standards and certifying them based on periodical
verification.

25. The OSRO system may be introduced in India by way of compelling


liabilities under the MS Act 1958. The matrix of contracting requirements for
ships with different class of OSRO based on its cargo and intended area of
operation may be defined by the Coast Guard in consultation with DG
Shipping.

26. The Coast Guard is best suited to serve as Competent Authority for
certification and periodical verification of the OSROs and facilitate
implementation. The Coast Guard would also draw up the inventory
specifications for each class of OSRO.

66
Ushering a Step Change

27. Implementation of the OSRO system will not alter the existing
responsibilities of either the ports or the merchant vessels calling at ports in
India. The pre-contractual arrangement will rather guarantee response on
behalf of the ship owner, in the event of an oil spill. The Coast Guard will
continue to function as the Central Coordinating Agency for oil spills in Indian
waters and respond, as required by the circumstances of the case, with its own
inventory and by pooling resources available with other agencies. The OSRO
will be called out to supplement and add to scale of resources coordinated by
the Coast Guard. Thus, implementation of OSRO system will add to, and
significantly strengthen the existing capacity for oil spill response in the
country besides guaranteeing response on the ship owners behalf in any
eventuality.

28. The private OSRO would be sustained by way of a regular premium


under their pre-contract with all ships calling at Indian ports and/or all oil
handling agencies in India. Given the traffic volumes at the ports in India and
the interest being evinced by potential players, it is opined that OSRO venture
would be a sustainable proposition.

Enabling Legislation

29. Legislation enabling private OSRO would be the essential first step. All
vessels destined to an Indian port may be required to have a valid contractual
arrangement in place with a certified oil spill response organization prior to
arrival in Indian waters. The reference to this requirement may be specified in a
suitable Part under the Merchant Shipping Act, 1958 and proposed to read as
follows:

Every prescribed vessel or vessel of a prescribed class shall

(a) have an arrangement with a response organization in respect of a


quantity of oil that is at least equal to the total amount of oil that the vessel
carries, both as cargo and as fuel, to a prescribed maximum quantity, and
in respect of waters where the vessel navigates or engages in a marine
activity; and

(b) have on board a declaration, in the specified form, that

(i) identifies the name and address of the vessel's insurer or, in
the case of a subscription policy, the name and address of the lead

67
Ushering a Step Change

insurer who provides pollution insurance coverage in respect of the


vessel,

(ii) confirms that the arrangement has been made, and

(iii) identifies every person who is a qualified individual,


authorized to implement the arrangement.

30. The Ministry of Shipping will be responsible for verifying whether all
shipping companies, including all companies, have tie-ups with OSROs for
tier 3 pollution response facilities.

OSRO Facilitation

31. Efforts at both, the enabling legislation and mechanism to implement the
pre-contractual OSRO arrangement would require to be progressed
concurrently.

32. The DG Shipping may take necessary action for incorporation of


amendment in the Merchant Shipping Act.

33. As part of the OSRO facilitation process, the Coast Guard will define the
matrix of contracting requirements for ships with different class of OSRO based
on its cargo (oil in bulk, liquid HNS, etc.) and intended area of operation (within
harbour, entering port, performing cargo transfer at sea within specified
proximity of port, etc), in consultation with the DG Shipping.

34. Further, the Coast Guard will specify the inventory for each Class of
OSRO and issue Guidelines/ SOP for qualification of an OSRO. The private
OSRO would be required to identify and ensure the availability of specified
personnel and equipment within stipulated response times in the specific
geographic areas.

35. The private OSRO, in addition, shall have such other arrangements for
oil transfer, salvage, emergency underwater repair, oil retrieval through hot-
tapping methods, shoreline clean-up, etc. The Coast Guard will supervise the
oil spill response and prescribe the level of clean-up required. The liability to
pay for the clean-up costs will rest with the polluter at all times.

68
Ushering a Step Change

Implementation Methodology

36. The implementation methodology is summarized in the table below.

TRACK 1 TRACK 2
LEGISLATIVE PROCESS FACILITATION PROCESS
1. Drafting of legislation by DGS 1. Seeking Expression of Interest
2. Stakeholder consultation through advertisement and listing
of Interested Parties
3. Circulation of Draft Cabinet Note
2. Qualification of Interested Parties
4. Approval by Cabinet 3. Publishing of Qualified OSROs
4. OSRO enter into service level
Agreement with ship owners
5. Bringing of legislation into force 5. Operationalisation of OSRO

69
Places of Refuge 8
Introduction

1. When a ship has suffered an incident, the best way of preventing damage
or pollution from its progressive deterioration is to transfer its cargo and
bunkers, and to repair the casualty. Such an operation is best carried out in a
place of refuge. However, to bring such a ship into a place of refuge near a
coast may endanger the coastal state, both economically and from the
environmental point of view, and local authorities and populations may
strongly object to the operation. Thus, there exists a requirement to identify the
places of refuge.

2. The issue of "places of refuge" is one aspect of contingency planning in


the consideration of which the rights and interests of coastal States as well as
the need to render assistance to vessels that are damaged or disabled or
otherwise in distress at sea ought to be taken into account. Three incidents in
succession highlighted the need to review the issues surrounding the need for
places of refuge viz., the Erika incident of December 1999, the aftermath of the
incident involving the fully laden tanker Castor in December 2000, when it
developed a structural problem in the Mediterranean Sea, and the November
2002 sinking of the Prestige. These incidents led the IMO Assembly in
November 2003 to adopt two resolutions addressing the issue of places of
refuge for ships in distress.

Background

3. The notion of providing refuge for ships in distress was raised at IMO
during the late 1980s, when the Legal Committee was considering the draft
provisions of the International Convention on Salvage (eventually adopted in
1989). At the time, it was suggested that there should be an obligation on
States to admit vessels in distress into their ports. Although this was endorsed
by some delegations, others expressed doubt on the desirability of including
such a "public law" rule in a private law convention. It was also pointed out
that the interests of coastal States would need to be duly taken into account in
any such provision. Doubt was also expressed whether such a provision would
in fact affect the decisions of the authorities of coastal States in specific cases.
Ushering a Step Change

4. As a result, Article 11 of the Salvage Convention, as eventually adopted,


reads: "A State Party shall, whenever regulating or deciding upon matters
relating to salvage operations such as admittance to ports of vessels in distress
or the provisions of facilities to salvors, take into account the need for co-
operation between salvors, other interested parties and public authorities in
order to ensure the efficient and successful performance of salvage operations
for the purpose of saving life or property in danger as well as preventing
damage to the environment in general."

5. Ships with structural damage and a dirty or volatile cargo in their tanks
are not among the most welcomed visitors in the coastal waters of any State
and there is little point in attempting to apportion blame on those who have
made decisions to keep stricken ships away from their coastlines. Nonetheless,
in some cases, a refusal could result in compounding the problem, which may
ultimately result in endangering life, the ship and the environment.

6. During the debate on places of refuge, the legal issues surrounding this
concept were analysed and the question was asked whether a coastal State is
under an obligation, or at least is not precluded, under international law, from
providing a place (where a ship can be taken when it is disabled, damaged or
otherwise in distress and is posing a serious risk of pollution), in order to
remove the ship from the threat of danger and undertake repairs or otherwise
deal with the situation.

7. International law recognizes the right of States to regulate entry into


their ports (UNCLOS, Article 2, refers to the sovereignty of a coastal State over
its land territory, internal waters, archipelagic waters and the territorial sea).
The right of a foreign ship to stop and anchor in cases of force majeure or
distress is explicitly referred to by UNCLOS in the case of navigation in the
territorial sea (Article 18(2)), straits used for international navigation (Article
39.1(c)) and in archipelagic waters (Article 54). The right of a foreign ship to
enter a port or internal waters of another State in situations of force majeure or
distress is not regulated by UNCLOS, although this constitutes an
internationally accepted practice, at least in order to preserve human life. This,
however, does not preclude the adoption of rules or guidelines complementing
the provisions of UNCLOS.

8. Meanwhile, the right of a coastal State to take action to protect its


coastline from marine pollution is well established in international law.

71
Ushering a Step Change

Relevant provisions include: UNCLOS, Articles 194, 195, 198, 199, 211, 221,
225; Salvage Convention, Article 9; and Facilitation Convention, Article V(2).

9. Under longstanding maritime tradition and the practice of good


seamanship, the master of a ship faced with a serious emergency is expected to
seek shelter to avoid disaster. To some extent the practice is codified in the
revised Chapter V of SOLAS, which requires that the owner, the charterer or
the company operating the ship or any other person, shall not prevent or
restrict the master of the ship from taking or executing any decision which, in
the master's professional judgment, is necessary for safe navigation and
protection of the marine environment.

10. By focusing more on human life and safety rather than on what is to be
done with the ship in cases of force majeure or distress, these provisions do not
of themselves give a right of entry to a place of refuge, nor do they explicitly
refer to the question of a coastal State's obligation to establish places of refuge.
On the other hand, neither do they preclude such a principle.

11. The IMO Guidelines on places of refuge have been developed in a manner
which retains a proper and equitable balance between the rights and interests
of coastal States and the need to render assistance to ships which are damaged
or disabled or otherwise in distress at sea.

12. It would be highly desirable if, taking the IMO Guidelines into account,
India designated places of refuge for use when confronted with situations
involving ships (laden tankers, in particular) in need of assistance off its coasts
and, accordingly, drew up relevant emergency plans.

IMO Resolution

13. Resolution A.949 (23) Guidelines on places of refuge for ships in need of
assistance are intended for use when a ship is in need of assistance but the
safety of life is not involved. The guidelines recognize that, when a ship has
suffered an incident, the best way of preventing damage or pollution from its
progressive deterioration is to transfer its cargo and bunkers, and to repair the
casualty. Such an operation is best carried out in a place of refuge. However,
to bring such a ship into a place of refuge near a coast may endanger the
coastal State, both economically and from the environmental point of view, and
local authorities and populations may strongly object to the operation.
Therefore, granting access to a place of refuge could involve a political decision

72
Ushering a Step Change

which can only be taken on a case-by-case basis. In so doing, consideration


would need to be given to balancing the interests of the affected ship with
those of the environment.1

14. The issue of identifying suitable places of refuge on the coasts of India
has been pending for implementation for nearly ten years now. The IMO
Guidelines on Places of Refuge was adopted on 05 Dec 03.

Decision of MSDC Meeting

15. The 14th MSDC meeting held at Mumbai on 7th-8th January 2013
directed DG Shipping to identify one or two disused ports on either of the
coasts to locate places of refuge for disabled/ unseaworthy vessels. This will
result in providing safety to the lives of the crew and also prevent marine
accidents and pollution.

16. Recent incidents of m.v. Pratibha Tapi and m.v. Pratibha Indrayani have
necessitated the requirement of priority identification of places of refuge in
Indian waters. The vessel m.t. Pratibha Tapi with a skeletal crew of one
electrical officer, two seamen and one cook, and containing 70 tons of fuel
remained anchored about 2.3 nautical miles West of Mudh Island, Mumbai
ever since she was placed under court arrest on 29th January 2013 until the
intervention of the Honble High Court, Mumbai on 17th June 2013, directing
the Director General of Shipping to decide on a suitable salvor who will safely
tow the vessel to a safe anchorage at Mumbai port or securely beach it,
depending on whether the vessel comes with or without anchor. The vessel
m.t Pratibha Indrayani, similarly under court arrest, was being manned by five
deck cadets and containing about 100-150 tons fuel onboard, when dragging
anchor 10.5 nautical miles West of Manori Island, Mumbai. It was again the
intervention of the Honble High Court, Mumbai in June 2013 which averted a
potential oil spill from the vessel.

Identification of Places of Refuge

17. According to data available with the Indian Ports Association, there exist
a total of thirteen unused/ disused non-major ports on the coasts of India,
including five in the Andaman and Nicobar. Of these, seven are in Odisha, four
in Kerala, and one each in Tamil Nadu and Andhra Pradesh.
1
The second resolution, A.950 (23) Maritime Assistance Services (MAS), has been implemented
by India by designating the DG Shipping as maritime assistance service (MAS).

73
Ushering a Step Change

18. The Committee proposes that two unused/ disused ports each on the
west and east coast may be designate as places of refuge. Sachana in Gujarat
and Thalassery in Kerala may be considered on the west coast, and Chandipur
in Odisha and Bheemunipatnam in Andhra Pradesh on the east coast of India.
It may also be necessary to designate a place on the Maharashtra to cater to
any incident in the high traffic density port of Mumbai.

74
Ushering a Step Change

Recommended Places of Refuge

Sachana, Gujarat Thalassery, Kerala


(220 34' N 0700 11' E) (110 45' N 0750 29' E)

CHART 2080 CHART 2058

Chandipur , Odisha Bhimunipatnam, Andhra Pradesh


(210 26' N 0870 02' E) (170 53' N 0830 26' E)

CHART 351 CHART 308

75
Review of Contributions
to IOPC Fund1 9
Introduction

1. Part of preparedness for oil spill disasters requires that a State insure
itself against damages caused by marine oil spill disasters. India is party to the
International Oil Pollution Compensation Fund of the International Maritime
Organisation while the United States and China have chosen to remain non-
party. This paper examines the hypothesis that particularly large oil importers
such as India may not stand to benefit by being party to the Fund Convention.

2. At roughly 168.5 million tonnes of oil imports which translated to about


11.7% of the worlds total contribution in 2011 or approximately 3 lakh GBP,
India was the second largest contributor to the International Oil Pollution
Compensation (IOPC) Fund (hereinafter referred to as the Fund) on account of
persistent oils received in the country annually through tank ships. Beyond the
first tier of compensation payable by the ships insurer, this second tier of
compensation through the Fund for damages in the event of an oil spill from a
tank ship is restricted to an equivalent of US$315 million. The contribution to
the Fund itself is restricted to States importing more than 150,000 tonnes
annually. The compensation caters for cost of response measures and
mitigation efforts only and does not provide for costs of establishing inventories
to be maintained for responding to oil spills.

3. The paper examines the question whether it is advisable for India to


follow suit. The paper dwells on whether it is fair, equitable and just for
contributions to the Fund to be governed exclusively by quantum of oil imports
by each contracting State while other factors though contributing significantly
to the risk are not taken into account. The paper also examines whether the
existing methodology for contributing to the Fund is possibly an antithesis of
the principle of common but differentiated responsibility that India is seeking
entitlement to at other similar international forums?

4. Experience indicates that lack of baseline data on the livelihood income


of the coastal communities will inhibit full settlement of their compensation

1 th
Based on paper presented by DIG AA Hebbar at the 18 NOSDCP meeting on 31 May 2013 at Dehradun, India.
Ushering a Step Change

claims. The study will examine whether Indias annual subscription to Fund is
better invested in the country for building stockpiles of oil spill response
equipment by the Coast Guard and/ or contributing to the corpus
administered by the Ministry of Agriculture for the benefit of coastal
communities, particularly fishermen that may be affected in the event of a spill.

5. The hypothesis on which the paper is founded is that larger the volume
of oil imports of a State, lesser the benefit to that State of accession to the
International Oil Pollution Compensation Fund.

Overview of the International Compensation Regime

6. The call for instituting an international compensation regime for oil


pollution damage was made by the United Kingdom and France consequent to
a historically significant oil pollution case called the Torrey Canyon in 1967 in
which approximately sixty thousand tons of crude oil spilled from the oil tanker
onto the coasts of the two countries. The Civil Liability Convention and the
International Oil Pollution Compensation Fund to provide for the first and
second tier of compensation were adopted as a result of the initiative. India has
supported the system since inception and, is presently the second largest
contributor to the Fund.

Civil Liability Convention

7. The International Convention on Civil Liability for Oil Pollution Damage


(CLC) was adopted on 29 November 1969, replaced by its 1992 protocol and
amended in 2000. It aims to ensure that adequate compensation is available to
persons who suffer damage caused by pollution resulting from the escape or
discharge of oil from ships and, to adopt uniform international rules and
procedures for determining questions of liability. Under CLC, with the
exception of a few defenses, the ship-owner is strictly liable for pollution
damage. The ship-owner is entitled to limit his/ her liability to an amount
calculated based on the tonnage of the ship. For a ship not exceeding 5,000
units of tonnage, the limit is 4.51 million Special Drawing Rights (SDR); for a
ship with a tonnage in excess thereof, the limit is 631 SDR for each additional
unit of tonnage in addition to 4.51 million SDR; provided that the limit shall
not exceed 89.77 million SDR. The ship-owner is not entitled to limit his/ her
liability, however, if it is proved that the pollution damage resulted from his/
her personal act or omission, committed with the intent to cause pollution
damage, or recklessly and with knowledge that such damage would probably

77
Ushering a Step Change

result. The owner of a ship carrying more than 2,000 tons of oil in bulk as
cargo is required to maintain insurance or other financial security.

Fund

8. The Fund was adopted in 1971, replaced by its 1992 protocol and
amended in 2000. Its main purpose is to establish an international fund to
provide victims of oil pollution damage with additional compensation
supplementary to CLC. The aggregate amount of compensation payable by the
IOPC Fund per incident in certain events (including the amount payable under
CLC) shall not exceed 203 million SDR under Fund as a general rule. In
addition, its 2003 protocol established a Supplementary Fund for additional
compensation for pollution damage in contracting states to the protocol. The
total amount of compensation payable per incident is 750 million SDR
including the amount payable under CLC and Fund. This amount is
comparable to the maximum amount of compensation payable by the Oil Spill
Liability Trust Fund under the United States Oil Pollution Act, 1990, which
stands at US$1 billion per incident.

Perspectives on Channeling of Contributions to Oil Receivers

Comparison of oil imports

9. India is currently the fourth largest importer of oil in the world. Only,
United States, China and Japan import more oil than India. Of these countries,
United States and China are not party to the Fund. Japan, though party to the
Fund has many factors in its favor including inter alia large number of spills,
relatively huge cleanup costs, and severe weather.

Country Oil imports (bbl/ day)


United States 10 270 000
China 5 080 000
Japan 4 394 000
India 3 060 000

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Ushering a Step Change

Factors affecting risk of oil spill

10. According to the International Petroleum Industry Environment


Conservation Association (IPIECA), at least nineteen different factors affect the
risk of a marine oil spill including type of oil, geographic location, sea
conditions, coastline volume of traffic time of day navigation hazards. Quantity
of oil handled is only one amongst the nineteen factors.

Factors Determining Cleanup Costs

11. There is ample reference in the literature including Annex 3 of MEPC


55/18 that the cost of oil spills on a dollar per tonne basis depends on a variety
of parameters and has a broad variance. There is general agreement that the
main technical factors influencing the cost of oil spills are type of oil, physical,
biological and economic characteristics of the spill location, weather and sea
conditions, amount spilled and rate of spillage, time of the year, and
effectiveness of cleanup. There is anecdotal evidence to prove that, in similar
volumes of spills, use of OSD could reduce cleanup costs by nearly as much as
half the cost of engaging in shoreline cleanup consequent to no OSD usage.
Further, manual cleanup procedures will result in incurring over 4.5 times the
cost of OSD usage. The cleanup cost of 37,000-tonne oil spill from the Exxon
Valdez was 107,000 USD/tonne (2007 dollars), whereas that of Braer 85,000-
tonne spill cleanup was only 6 USD/tonne.

Advantage Japan

12. A review of Fund incidents over eighteen years between 1979 and 1997
reveals that 34 of the 67 incidents related to spills in Japanese waters and all
except one involved Japanese flag vessels, the exception being the Russian
flagged Nakhodka which spilled an equally exceptional 17,500 tonnes of
medium fuel oil. In terms of numbers of claims on the IOPC Fund, 50% of the
claims are by Japan in respect of Japanese flagged vessels. Hence, it has been
absolutely prudent on part of Japan to subscribe to the oil spill compensation
regime, notwithstanding its status as largest receiver of oil amongst States
parties to the Fund.

Regional Cost Differences


13. There is a general consensus amongst most experts on the fact that the
most important determinant of cleanup costs is location, and that location itself

79
Ushering a Step Change

is a complex factor involving both geographical and political, and legal


considerations.

Regional Cost Differences


Region Nation US $/ tonne
North America Canada $ 6,508.14
United States $ 25,614 ,63
Average $ 19,814.63
Latin America Argentina 2,316.61
Brazil $ 5,600.72
Chile $ 910.42
Mexico $ 850.32
St. Kitts / Nevis $ 3,085.00
Uruguay $ 3,368.25
Venezuela $ 1,817.83
Average $ 3,055.76
Africa Egypt $ 4,428.00
Morocoo $ 9,675.07
Mozambique $ 6.09
Nigeria $ 1,766.75
South Africa $ 2,917.54
Average $ 3,163.93
Europe Denmark $ 11,180.41
Estonia $ 6,820.62
France $2,301.58
Germany $ 10,702.00
Greece $ 8,530.29
Ireland $ 4,807.00
Italy $ 6,541.49
Latvia $ 9,212.35
Lithuania $ 78.12
Netherlands $ 6,655.37
Norway $ 23,118.08
Spain $ 438.68
Sweden $ 15,642.36
UK $ 3,082.80
Yugoslavia $ 1,541.40
Average $ 10,807.83
South Pacific Australia $ 5,991.33
New Zealand $ 2,791.35
Average $ 5,698.88
Middle East Israel $ 2,313.60
United Arab Emirates $ 636.99
Average $ 1,057.50
Asia Hong Kong $ 4,452.94
Japan $ 34,619.92
Malaysia $ 76,589.29
Philippines $ 676.51
Singapore $ 390.61
South Korea $ 12,814.96
Average $ 27,495.83

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Ushering a Step Change

Indian Perspective of Contribution and Compensation

Rank in Fund % Country Average Cleanup


by Contributing Contribution Cost ($/ton)
Oil
1 14 Japan 34 620
2 11 India 572
3 8 Republic of Korea 6 500
4 7 Italy 6 541
5 7 Netherlands 6 655
6 6 Singapore 391
7 5 France 2 302
8 4 United Kingdom 3 083
9 4 Spain 439
10 4 Canada 6 508

Annual Contributing Oil

14. India became a party to the 1992 Fund on 21st June 2000 and
denounced the 1971 Fund on the same date. In the year preceding its
denouncement of the 1971 Fund, India ranked first in terms of contributing oil,
with a total contribution of 54.60%. There were no reports from India in the
years 2000 and 2001. Thereafter, over ten years since 2002, Indias
contributing oil of the IOPC Fund has climbed steadily from sixth rank at
6.79% to second position at 11.65% of the total contributing oil of 168 415 558
tonnes. As of 31 Dec 11, India was second only to Japan which received
15.29% of the total contributions in States party to the 1992 Fund. The near
doubling of percentage contribution of total oil receipts between 2002 and 2011
also implies proportional increase in Indias annual contribution payable to the
General Fund, apart from proportional contributions required to be made to
Major Claims Fund.
Indias Contribution to IOPC Fund: 2010-2012
Contributor 2010 () 2011 () 2012 ()
Indian Oil Corporation Ltd 1715971.28 1285630.82 187259.70
Hindustan Petroleum Corporation Ltd 351550.02 242247.72 47394.76
Bharat Petroleum Corporation Ltd 545204.06 382374.68 60698.42
Mangalore Refinery & Petrochemicals Ltd 439795.18 318080.80 41924.37
Reliance Industries Ltd 1267562.90 1056402.05 209002.16
Bharat Oman Refineries Ltd 1266.64 3743.98
Kochi Refineries Ltd C/o BPCL 42216.93
Chennai Petroleum Corporation Ltd 28411.92
Bongaigaon Refinery & Petrochemicals Ltd 2896.14
The Tata Power Company 10111.20 9241.03
Total 4330194.64 3368768.73 550023.39

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Ushering a Step Change

Compensation

15. According to Coast Guard statistics, more than 80 spills are known to
have occurred in Indian waters whereas compensation was claimed and
awarded to the Coast Guard in only 15 of the 80 incidents and compensation
claims are outstanding in respect of five pollution response incidents. Of the 15
incidents awarded compensation, the quantity of spill is unknown in five
incidents, including two from ONGC pipelines in Mumbai offshore. In the
remaining 10 incidents, the three highest amounts of compensation are
`3.5 lac/ton, `1 lac/ton, and `20,000/ton in Star Leikanger, Maritime Wisdom,
and the Innovative-1.

16. Ten spills is a small figure to be statistically significant. Nevertheless, the


average compensation of $572/ton in India is significantly less than the
average cleanup cost of $34,620/ton in Japan, $12,800/ton in the Republic of
Korea or $6,500/ton in Italy, that are ranked first, third and fourth largest
receivers of oil in the Fund in 2012. It is observed that seven of the top ten oil
contributors to the Fund have a significantly higher average cleanup cost per
ton as compared to India. Only Singapore and Spain have lower average
cleanup costs as compared to India.

17. In India, the Public Liability Insurance Act, 1991 provides for public
liability- insurance for the purpose of providing immediate relief to the persons
affected by accident occurring while handling any hazardous substance. The
Act provides for strict liability for death, injury or damage and the claimant is
not required to plead and establish that the death, injury or damage in respect
of which the claim has been made was due to any wrongful act, neglect or
default of any person. The Act limits the liability by requiring the owner to take
out an insurance only for an amount equal to the paid-up capital of the
undertaking handling any hazardous substance and owned or controlled by
that owner or fifty crore rupees, whichever is less. However, more importantly,
hazardous substance means any substance or preparation, defined as
hazardous substance under the Environment (Protection) Act, 1986 (29 of
1986), and exceeding such quantity as may be specified, which does not include
hydrocarbons.

18. Notably, the Polluter Pays Principle has been extensively interpreted by
the Honble Supreme Court which has clearly set out the conditions for
applicability of this principle in environmental issues. At least three examples

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Ushering a Step Change

could be cited from the case law of the Honble Supreme Court of India. In M.C.
Mehta and Another v. Union of India and Others (1987) 1 SCC 395 popularly
known as Oleum Gas Leak Case, the Honble Supreme Court held that an
enterprise engaged in an hazardous or inherently dangerous activity is required
to indemnify all those who suffer on account of the activity regardless of
whether it is carried on carefully or not. Further, the measure of compensation
must be correlated to the magnitude and capacity of the enterprise because
such compensation must have a deterrent effect. The larger and more
prosperous the enterprise, the greater must be the amount of compensation
payable by it for the harm caused on account of an accident. In Indian Council
for Enviro Legal Action & Ors v Union of India (1996) 2 SCC 212, the Honble
Supreme Court held that, The Polluter Pays principle demands that the
financial costs of preventing or remedying damage caused by pollution should
lie with the undertakings which cause the pollution, or produce the goods
which cause the pollution. Under the principle it is not the role of Government
to meet the costs involved in either prevention of such damage, or in carrying
out remedial action, because the effect of this would be to shift the financial
burden of the pollution incident to the taxpayer.

Conclusion

19. As a State party to the Fund, India stands particularly disadvantaged.


Despite being a State party since inception, India has never claimed any
compensation whatsoever from either the 1971 or the 1992 Fund whereas its
contributions to the Fund have been rising steadily from about 3.3% share of
contributions ranking IX in 1997 to over 12% share of total receipts in the year
2011, second only to Japan amongst States party to the IOPC Fund.

20. Yet, in the event of an incident in Indian jurisdiction, attributable parties


in India will not be immune to being proceeded against by the Fund. Moreover,
the financial cap on liability may require the government to bear the residual
burden of compensation.

21. From a strategic perspective, given the precarious geopolitical situation


in its neighborhood, inadmissibility of claims in respect of incidents arising
from an act of war, civil war, hostilities, or insurrection is likely to affect India
more than any other State.

22. On a more fundamental note, the principles of fairness and equity are
suspected to be breached on numerous counts viz., the exemption to presently

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Ushering a Step Change

thirty-six States receiving oil below 150,000 ton threshold, usage of quantity of
oil receipts as the sole determinant of contribution to the Fund despite at least
eighteen other factors contributing to the risk and significant regional
variations in cleanup costs.

23. The Committee strongly believes that a review will accrue in significant
savings of foreign exchange expenditure to the nation and eliminate
dependence on a foreign agency for compensation. Simultaneously, enhanced
opportunities will emerge for investment in building stockpiles of oil spill
response equipment and compensating coastal communities that may be
affected by a marine oil spill.

24. Notwithstanding the particular disadvantage and breach of principles,


denunciation of the Fund may not be a prudent option for India, though
technically possible. It is the considered opinion of the Committee that perhaps
it is incumbent upon India to highlight the breach of principles of fairness and
equity caused by continuing with usage of quantity of oil receipts as the sole
determinant of contribution to the Fund and also to propose a fresh formula,
possibly linked to the cleanup costs, which complies with time honored
principles of fairness and equity.

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Incident Response Experience 10
Introduction

1. There have been over eighty spills in Indian waters since 1982, and most
of these occurred in port waters. Experience indicates that Mumbai port has
been particularly vulnerable. The 1000 ton spill from m.v. Lala Lajpat Rai in
Mumbai harbor was one the earliest disaster. More recent spills include m.v.
Maritime Wisdom off Goa on 23rd March 2005, m.v. Ocean Seraya off Karwar
on 30th May 2006, and the m.v. MSC Chitra in 2010 (700 tons) and m.v Rak
Carrier (340 tons) in 2011, both of which occurred in Mumbai harbour.
Significant response to potential threat of large scale spill included the m.v.
Asian Forest off Mangalore in July 2009 containing 366 tons of oil and the m.v.
Black Rose off Paradip harbor which cost nearly 80 crore rupees in recovery of
trapped oil. This chapter chooses to present a brief narrative of our experience
in responding to select incidents of oil spills and potential threat of oil spills.

m.v. Asian Forest

2. m.v. Asian Forest, a 122m long, 13,600 GT, Hong Kong flagged Bulk
Carrier developed stability related problems after she left the New Mangalore
Port on 16th July 2009. She had embarked about 13,000 tonnes of Iron Ore at
New Mangalore Port and due to the shifting of the ore, the ship developed list to
port. Coast Guard Ship Sankalp operating in proximity rendered rescue
assistance as the vessel listed more than 40 degrees and the master advised
the crew to abandon the ship. All 23 crew members were rescued. The
abandoned vessel capsized two days later and sank 11.5 miles off Mangalore Lt
Ushering a Step Change

with 13,000 tonnes of iron ore cargo, 366 tons Furnace Fuel Oil and 45 tonnes
of Diesel oil. The fuel oil which was kept as reserve and that in the pipelines
and bilges leaked out periodically causing minor spills which were responded
from time to time. However, breach of integrity of fuel oil tanks due to any
other extraneous factor could not be ruled out and hence the Coast Guard
advised the port and ship owner to remove the oil from the ship. The ship
owner arranged for salvage of the trapped oil through M/s Smit Salvors who
completed the removal by January 2010.

m.v. Black Rose

3. m.v. Black Rose, a 187 metre long, 32 year old, 13600 GT Bulk Carrier of
Mongolia flag, developed stability related problems after she left Paradip Port
on 9th September 2009. She had embarked about 24,000 tonnes of iron ore
from Paradip and due to shifting of cargo the ship developed a list to starboard
within thirty minutes of leaving harbor. The master called for rescue assistance
as the vessel listed to more than 50 degrees and advised the crew to abandon
ship. 26 crew members, who abandoned the ship including the Captain, were
rescued by the Coast Guard and Paradip Pilot launch. The abandoned vessel
capsized and sank soon in position 3.5 nautical miles southeast of Paradip
with iron ore cargo, 928 tons of Furnace Fuel Oil and 48 tonnes of Diesel oil. It
was found that the vessel was found operating with a fraudulent insurance
certificate. The Paradip Port Trust issued a global tender for removing the
trapped oil inside the ship in view of ecological sensitivity in areas surrounding
the port, and the presence of rookeries of the endangered Olive Ridley turtles.

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Salvers commenced oil removal action in mid October 2009 and all the oil was
removed by mid November 2009, thereby removing the threat of oil spill from
the sunken ship.

m.v. Malavika

4. An oil spill was reported at 1600 hrs on 12th Apr 2010 by Essar Shipping
from their vessel m.v. Malavika at Gopalpur anchorage, Odisha. The barge
Sneh IV whilst casting off had made contact with m.v. Malavika in way of a fuel
oil tank that ruptured the ships hull resulting in spillage of fuel oil from the
said tank. Approximately 8 tons of fuel oil escaped. Coast Guard ship with
integrated helicopter on board was diverted from patrol area and the ship
immediately launched helo for aerial recee to check the extent of oil spill. The
helicopter carried out aerial survey of oil spill expanse. Oil Spill Dispersant was
sprayed by a Coast Guard Dornier to neutralise the oil spill while cleanup
action was taken by the Gopalpur port authority and the state government.

m.v. MSC Chitra

5. On 7th August 2010, at 0950 hrs, the container vessel m.v. MSC Chitra
carrying about 1200 containers from Jawaharlal Nehru Port (JNPT) while
leaving harbour, collided with an inbound bulk carrier m.v. Khalija-III, leading
to grounding of m.v. Chitra near the Prongs reef light. The impact of the
collision ruptured two fuel tanks situated on the port side of mv Chitra. The
ships crews were safely evacuated and the vessel started to list dangerously to
port. The rupture of the tanks led to oil spill at a steady rate of about 20 tons
per hour. As the South West monsoon was active, the prevailing strong winds
and sea state prevented the laying of containment booms by the Coast Guard.
The port was affected by the high tides which ranged upto 4 meters. The port
could not take any preventive action to contain the oil spill as they did not have

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Ushering a Step Change

any response equipment. The situation worsened when the tide changed two
hours after the collision, the continuous impact of the waves listed to the vessel
further and about 300 containers fell overboard making it dangerous for
navigation. The Coast Guard deployed 5 ships, 2 helicopters and 2 Dorniers in
pollution response configuration and applied oil spill dispersant to mitigate the
damage caused by the effects of the heavy oil. The tidal currents in
combination with the local currents carried the spilt oil in the south and other
coastal areas seriously affecting the fishing community. Port traffic was closed
due to floating containers, several ships and tankers waiting outside for entry
were forced to the outer anchorage area. In addition, it was found that 43
containers IMDG cargoes and some of which fell overboard and were washed
ashore.

6. Coast Guard ships and aircraft relentlessly carried out the oil spill
response in-spite of the dangerous containers floating inside the harbour. As
the leaking spot of the tanks could not be reached by the salvage team, and at
the same time, it could not be transferred to other tanks, the Coast Guard took
a conscious decision to allow the oil to drain from the two ruptured tanks. The
oil egress from the tanks stopped after 48 hours. By then, 60 kilometers of the
shoreline area, including the residential areas, fisheries, mangroves, ports and
historic islands were affected by the heavy fuel oil. The remaining oil at sea was
neutralized by the Coast Guard over the next three days. It was found that a
majority of the oil that washed ashore did not emulsify due to the effect of the
dispersants applied by the Coast Guard. Over the following two months, a
dedicated shoreline response team including a special team from Oil Spill
Response Limited, Singapore undertook shoreline clean-up of the affected
areas. In some areas, the clean-up went on upto four months. The port traffic

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Ushering a Step Change

was effectively closed for five days, and only limited movements with a mine
sweeper escort was allowed. The restriction of the ship movements, severely
affected the logistics chain supporting the shipping movements. The harbour
was closed for fishing for about a month, thereby affected the fishermen and
fish related traders due to unemployment. The Maharashtra Government,
Mumbai Port, Coast Guard and other affected parties submitted claims for
clean-up and for causing pollution damage on the shipowner. The shipowner
employed professional salvers immediately and all out efforts were made to
remove all the containers drifting and sunken containers. By end August 2010,
almost all the sunken containers were identified and removed. The remaining
containers onboard were safely removed by November 2010. The trapped oil of
about 1200 tonnes of fuel oil was removed by the salvers.

Lessons Learnt

7. Several lessons were learnt from the m.v. Chitra oil spill. The pollution
response equipment available with the Coast Guard were not compatible to
contain the oil spill in the fast tidal current. The shoreline was mostly rocky
and inshore boom laying was not found useful. For effective protection of
mangroves, there is a need for deflection booms. The vessels deployed for the
response would require modification to carry pollution response equipment for
skimming operations. There is no private oil spill response provider available to
undertake oil spill response on behalf of the polluting ship or on behalf of the
port. The State Government wss ill prepared to prevent the spill reaching their
shorelines and also to undertake shoreline clean-up. The contingency plan
prepared by the port and oil handling agencies do not cater for complete
response for more than 100 tons. Hence, proposals were made to augment the
pollution response capacity to the ports by the Ministry through the Oil Cess
Fund.

Measures post m.v. MSC Chitra

8. The Coast Guard being the Central Coordinating Agency (CCA) for oil
spill response, recommended the Shipping Ministry to direct all the ports to
mandatorily maintain oil spill response facility either by them or through the
service providers. A separate Committee was appointed to undertake the
efficiency test of all pollution response equipment available with the Coast
Guard inventory, to recommend the necessary legislative measures to make the
polluting ships undertake the clean-up immediately and also to pay immediate

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Ushering a Step Change

compensation to affected parties. The Coast Guards oil spill response


capability has been strengthened by the commissioning of the first
indigenously built Pollution Control Vessel having side sweeping arms with
skimming capability of 110 tons per hour each. If this ship was available
during the mv Chitra oil spill, it would have been effectively positioned near the
leaking area and would have skimmed the oil easily. Post m.v. Chitra oil spill,
there is an increased awareness among the media and the local populace about
the adverse effects of oil spill on the marine environment.

m.v. Rak Carrier

9. The 28 year old bulk carrier developed cracks in its bow section and
sank off Mumbai on 4th August 2011. The vessel had 290 tons of FFO and 50
tons of diesel onboard at the time of sinking. The Coast Guard, in coordination
with the Navy, rescued all 30 crew from the sinking ship. The following day an
oil spill was noticed from the vessel. Coast Guard ships and aircraft were
deployed under operation Parayavaran Suraksha 02/11 to respond to the oil
spill. Most of the spills were neutralised by the Coast Guard using dispersants
at sea. Coast Guard pollution control vessel Samudra Prahari along with other
Coast Guard ships and Coast Guard helicopter participated in the pollution
response operation. A total of 8,890 liters of dispersant was sprayed. The
response operations were called off by the Coast Guard on 21st August 2011.
About 31 ship days and 22 hours of aircraft sorties were utilized in responding
to the oil spill A few isolated patches of oil were reported ashore and cleaned up
by the local authorities. 70 workers from Bombay Municipal Corporation

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participated in coordinating the beach cleanup along with Coast Guard


personnel at Alibag, Juhu, Versova, Gorai, Madh, Uttan, Kihim and Awas.

Fishing Boat Al Hussaini

10. A boat Al Hussaini under police custody since 8th April 2012 for
suspected oil smuggling capsized alongside in Mallet Bunder, Mumbai Port
Trust (MbPT) spilling oil in the basin waters on 27th May 2012. Coast Guard
Pollution Response Team (West) was notified of the incident by the Office of the
Deputy Conservator of Mumbai Port Trust with a request to support response
operations. The Officer-in-charge and members of the Pollution Response Team
promptly reached the scene of incident with response equipment. A spill of
thick FFO covering three fourths of the basin area was observed to have
emanated from the partially capsized boat. Thick concentrated oil patches were
also found near boats and barges berthed alongside. In a coordinated response
operation between the Coast Guard and MbPT, a river boom was laid at the
mouth of basin with assistance of a hired boat of MbPT for containment. 3 tons
of furnace oil and 5-6 tons of oily water sludge were recovered in the joint
operation.

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Recommendations 11
The recommendations of the Committee are grouped under legislative,
administrative and operational measures and appended in the succeeding
paragraphs.

Legislative Measures

1. Section 356M of the Merchant Shipping Act, 1958 regarding Oil Pollution
Cess may be amended as follows:

(a) In clause (1), delete [not exceeding fifty paise], and delete [Provided
that no cess shall be levied on a ship at any port if the ship produce
evidence of having paid such levy at the same or any other port in India
within a period of three months immediately preceding its present call at
the port.]

(b) In clause (1), amend [oil] to read as [oil and noxious liquid
substance]

(c) In clause (3), amend [made by Parliament by law] to read as [to a


fund to be hereinafter called the Oil Pollution Fund to be administered
by the Ministry of Shipping and operated in accordance with Rules
notified under this Act]

2. The rate of Oil Pollution Cess collected under the provisions of section
356M read with section 356O of the Merchant Shipping Act, 1958 may be
increased from fifty paise per tonne to rupees two per tonne by notification in
the Official Gazette

3. An Oil Pollution Fund of Rupees 500 Crore may be created through a


Central grant and placed under the charge of the Ministry of Shipping for
following purposes:

(a) To facilitate removal of a vessel involved in an accident, and


subsequently posing a threat of oil pollution, when a quick removal of
the oil in the vessel, or the vessel itself is expedient to prevent oil
pollution, where liability for such removal vests with the vessel owner
and the vessel is uninsured or vessel owner is unwilling or unable to
cover removal costs;
Ushering a Step Change

(b) To take immediate steps to contain oil pollution damage in case of


oil spill or an environmentally threatening incident, when immediate
action is warranted, and waiting on slow acting owners or insurance
companies may cause significant damage to the environment provided
that the government takes steps to recover such costs from the vessel
owner;

(c) To facilitate removal of wrecks and abandoned vessels affecting the


local communities and posing a threat of oil pollution that may cause
significant damage to the environment;

(d) To compensate communities, people, and companies for oil


pollution damages that they may suffer following an incident when they
are not compensated or insufficiently compensated;

(e) To provide for emergency oil pollution response including but not
limited to Emergency Towing Vessels and salvage assistance;

(f) To provide for development of oil spill response capabilities


including but not limited to response equipment, prevention team, and
response centre;

(g) To restore or repair damaged infrastructure and/or equipment


following an incident to prevent and/or control oil pollution and cleanup
after a spill.

4. The OPRC Convention 1990 may be given legal force by incorporating its
provisions in the Merchant Shipping Act, 1958 and rules, in a time bound
manner.

5. The Competent National Authority for oil spill response may be


empowered, on the lines of the UK Secretary of State Representative, to
intervene by adopting suitable amendment to the Merchant Shipping Act, 1958
and Rules thereunder for the following:

(a) Power to Intervene and Issue Directions to take any action of any
kind whatsoever, including requiring ships to be moved or destruction of
a vessel, in the Exclusive Economic Zone of India, for purpose of
preventing/ reducing risk of pollution by a hazardous substance, where
hazardous substance means oil and includes any other substance which

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Ushering a Step Change

creates a hazard to health, harms living resources or marine life,


damages amenities or interferes with lawful use of the sea;

(b) Power to Issue Directions to Persons in Control of Coastal Land or


Premises to grant access or facilities in relation to any ship, anything
which is or was on the ship including any person, including permitting
persons to land, making facilities available for undertaking repairs or
other works, and making facilities available for the landing, storage and
disposal of cargo or of other things for purpose of removing, or reducing
a risk of pollution following an accident;

(c) Power to Intervene and Issue Directions to operators, managers,


servants or agents of operators of any ship in the Exclusive Economic
Zone of India, or offshore installation in the Continental Shelf of India,
for purpose of preventing or reducing the risk of pollution;

(d) Power to take such Action in Lieu of a Direction as appears


necessary or expedient for the purpose of which a Direction was, or could
have been, given including entry and landing of persons or making use of
facilities and doing anything which could be authorized by a Direction,
including taking control over a ship or offshore installation, or making
arrangements for destruction, where entitled to give a direction, or
direction given has not achieved, or is not likely to achieve, a sufficient
result;

(e) Power to Establish a Temporary Exclusion Zone, defined


geographically or in relation to a ship, structure or other thing wrecked,
damaged or in distress in the Exclusive Economic Zone of India, for the
purpose of preventing significant damage to persons or property, or
pollution or reducing such risk.

6. Private OSRO system may be introduced by way of compelling liabilities


under the Merchant Shipping Act, 1958 requiring every ship calling at any port
in India to have pre-contractual arrangement with a private OSRO and
certification thereof, sustained by way of a regular subscription or premium
under pre-contract with ships, to provide guaranteed services in the event of an
oil spill at the expense of the polluter, such as mobilization of large number of
vessels and manpower, equipment for salvage of oil, legal support for claims,
without altering the existing responsibilities of either the ports, or the
merchant vessels calling at ports in India. The reference to this requirement

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may be specified in a suitable Part under the Merchant Shipping Act, 1958 and
is proposed to read as follows:

Every prescribed vessel or vessel of a prescribed class shall

(a) have an arrangement with a response organization in respect of a


quantity of oil that is at least equal to the total amount of oil that the vessel
carries, both as cargo and as fuel, to a prescribed maximum quantity, and
in respect of waters where the vessel navigates or engages in a marine
activity; and

(b) have on board a declaration, in the specified form, that

(i) identifies the name and address of the vessel's insurer or, in
the case of a subscription policy, the name and address of the lead
insurer who provides pollution insurance coverage in respect of the
vessel,

(ii) confirms that the arrangement has been made, and

(iii) identifies every person who is a qualified individual,


authorized to implement the arrangement.

7. Tanker above 150 GT and other merchant ships carrying Bunker fuel
more than 200 tons may be required to compulsorily establish service
agreement with oil spill cleanup response service provider in India, by
amendment to Merchant Shipping Act, 1958.

8. A National Competent Authority under the control of the Director


General Coast Guard may be mandated by amendment to Merchant Shipping
Act, 1958 for the purpose of oil pollution prevention, preparedness, response
and cooperation.

9. The Bunker Convention 2001 may be given legal force by incorporating


its provisions into the Merchant Shipping Act, 1958 or Rules thereunder such
that below convention ships are also covered.

10. The strict liability regime the Civil Liability Convention, 1992 may be
extended to oil tanker carrying less than 2000 tons of cargo in bulk, by
amendment to Merchant Shipping Act, 1958.

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11. Legal force may be given to Place of Refuge by amendment to Merchant


Shipping Act, 1958 so as to ensure that seabed and marine life within the
coastal waters are well protected.

12. The ports of Sachana in Gujarat, Thalassery in Kerala, Bheemunipatnam


in Andhra Pradesh and Chandipur in Odisha being unused/ disused/ used for
beaching may be designated as Places of Refuge by notification in the Official
Gazette under the Merchant Shipping Act, 1958/ Rules.

13. Such place of refuge may be designated on Maharashtra coast by


notification in the Official Gazette under the Merchant Shipping Act, 1958/
Rules, as the Government of Maharashtra or the Maharashtra Maritime Board
may consent recognizing that Mumbai is a high traffic density port and
frequently prone to receiving derelict and abandoned vessels.

14. The Ministry of Finance may grant exemption from customs duty, under
section 25(1) of the Customs Act, 1962, on permanent basis, in respect of any
equipment imported into India, for the exclusive purpose of combating marine
oil spills.

Administrative Measures

15. While framing of comprehensive cess rules is the recommended way


ahead to strengthen the cess collection mechanism, the Ministry of Shipping
may, in the interim, issue Standard Operating Procedures for Cess Collection
to major and non-major ports and State Maritime Boards as follows:

(a) The master of vessel is to be responsible for payment of Cess; the


Vessel Agent is to be responsible for payment of advance deposit to the
Port on cess account;

(b) The Port Officer/ Deputy Conservator of the Port is to be


responsible for levy and collection of cess;

(c) The deposit is to be adjusted immediately after the vessel has


sailed, against quantity loaded/ discharged and the final amount of Cess
levied;

(d) Port clearance is not to be accorded by the Port Officer/ Deputy


Conservator until full cess is collected;

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(e) In a coastal state, the Port Officer is to deposit the Cess amount
through the Maritime Board/ Port Department, to the account of Central
Government on monthly basis by the 5th of every month; and after due
reconciliation at the level of Maritime Board or Ports Department, a
Monthly Statement rendered to the Ministry of Shipping, Government of
India, along with details of vessel, quantity loaded/ discharged, amount
collected and payment details;

(f) A nodal officer is to be designated in the Ministry of Shipping to


monitor the payments received from Major Ports and coastal States. A
monthly return is to be submitted to Secretary (Shipping)/ DG (Shipping)
about the short-payments or non-payments by the Major Ports/ coastal
States. A follow-up is to be sent by the 10th of every month;

(g) The cess collection is to be audited annually by the Maritime


Boards/ Major Ports and Certificate of Audit forwarded to the Ministry of
Shipping;

(h) If any default occurs in complying with the aforesaid procedure:

(i) The concerned officer shall be liable for action under various
provisions of the MS Act; and

(ii) The defaulting Port Trust/ Maritime Board/ State


Department will not be eligible for financial assistance for their
pollution control equipment.

16. The Ministry of Shipping may issue directions requiring major ports and
coastal States to frame legislation for oil pollution prevention, preparedness,
response and cooperation in a time bound manner including inter alia:

(a) the obligation of the port to develop and maintain contingency


plans, and the duty of all persons in the port areas to cooperate in the
operation of such plans;

(b) the role and responsibilities of the port in dealing with oil spills or
other effects of pollution, including any obligation of the port regarding
the provision of suitable equipment, resources and personnel;

(c) the obligation of the port of receive and accommodate stricken or


salved vessels which pose a danger to the environment

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17. A case may be taken up with the IOPC Fund for an amendment to the
formula for deciding on contributions to the IOPC Fund recognizing that India
has never claimed any compensation whatsoever from the 1971 or the 1992
Fund whereas its current contributions of over 12% share of total receipts in
the year 2011 is second only to Japan, and further recognizing that principles
of fairness and equity are possibly at stake, particularly on account of the fact
that quantity of oil receipts is the sole determinant of contribution to the Fund
whereas a host of factors contribute to the risk, and significant regional
variations exist in cleanup costs.

Operational Measures

18. The Ministry of Shipping may issue directions requiring port facilities to
comply with specified planning standards for inventory of equipment for
containment, recovery and temporary storage, and dispersing of oil spill.

19. The Ministry of Shipping may issue directions requiring port facilities to
undertake pre-booming, or where pre-booming is not feasible, stationing a
dedicated oil pollution response vessel in vicinity, of oil tankers engaged in
discharging oil alongside, or at SPM, or transferring to another vessel.

20. The Ministry of Shipping may issue directions requiring port facilities to
comply with specified planning standards for environmental protection of port
facilities including for transfer sites and shoreline cleanup.

21. The Ministry of Shipping may nominate a Director level officer in the
Ministry of Shipping as nodal officer for joint inspection of ports issue suitable
directions for regular conduct of joint inspection of major ports on an annual
basis.

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