Circular No. 13/99 - Pollution in the United States - Recent California Legislation regarding Dry Cargo Ships





SEPTEMBER 23, 1999









Dear Member:




Recent California Legislation Regarding Dry Cargo Ships



We refer to Circulars Nos. 4/499 and 10/99 of January 29 and September 1, 1999 respectively. As foreshadowed in the latter document, further positive developments have taken place.


The provision of VRP, QI and Spill Management Team services.


The American Club is pleased to inform Members that it has secured the services of Patriot Maritime Compliance, LLC to act as the Club's preferred provider for the supply to Members of:


S the drafting of approved, vessel-specific Vessel Response Plans (VRPs);


S complete, Qualified Individual (QI) and Spill Management Team (SMT) coverage;


S the facilitation of coverage and coordination with a Member's Oil Spill Response Organization (OSRO) - see below.


Members will have an independent - and individual - responsibility for seeking the services of this preferred provider. In elaboration of these services, Appendix I contains a recent communication from Patriot Maritime attaching an organizational chart of its Spill Management Team and the standard wording for its Maritime Compliance Service Order.


The provision of Oil Spill Response Organization (OSRO) services.


Again, the Club is pleased to announce that it has established an arrangement with another market leader on the U.S. west coast for the provision of OSRO services to Members.


Foss Environmental Services Company, a Washington State domiciled corporation with extensive operational bases in California (please refer to the relevant parts of Appendix II), has agreed to accept nomination as the American Club's preferred provider for these services.



Page 2 Circular No. 13/99 September 23, 1999



Appendix II contains the standard form of Foss Environmental's Vessel Response Services Agreement, the contents of which are - hopefully - self-explanatory. As is the case with Patriot Maritime's contract, the relevant parts of this agreement conform to current International Group guidelines.


In addition, Appendix II contains a copy of Foss Environmental's California Emergency Response Contact details.




Notwithstanding the support given by the Club to the above parties for the provision of VRP, QI, SMT and OSRO services, the Managers reaffirm any Member's liberty to use different parties for the provision of relevant services. However, and as mentioned in Circular No. 10/99 of September 1, 1999, when making independent arrangements Members should always check with the Club that any particular contract has been "approved" by the International Group.


The new Californian regulations for dry cargo ships reflect to a large degree the federal Oil Pollution Act (OPA) regime. To recapitulate, conformity with the new regulations will require a Member to have the following in place. The identity of the approved provider mentioned above is set out in parenthesis at the end of each step.


1. An approved VRP. Plans may be assembled either on an individual vessel or fleet basis and must be capable of dealing with a "worst case scenario" being a spill of the total volume of the largest fuel tank on the non-tank vessel. (Patriot Maritime)


2. An identified QI and SMT. (Patriot Maritime)


3. A contract with an approved OSRO. (Foss Environmental)


4. A certificate of financial responsibility (COFR) in the sum of U.S. $300 million. Contact details of the California Office of Oil Spill Prevention and Response (OSPR) were provided in Circular No. 10/99 of September 1, 1999. In addition to the relevant application form, a copy of the Member's current Certificate of Entry as well as a U.S. $100 fee should be submitted. (Member's direct responsibility)


5. A nominated agent for the service of legal process. (Patriot Maritime)


6. Notification procedures to be followed in the event of an oil spill. (Patriot Maritime)


The regulations also require various additional commitments from owners required to qualify including an obligation to carry out emergency procedures and notification drills quarterly or at least 72 hours before a vessel enters the waters of California. In addition, vessels intending to bunker in California must carry a 7 (seven) barrel spill kit to deal with a deck spill.


As part of its service to Members - by virtue of the arrangements for VRP, QI, SMT and OSRO services reached with the preferred parties described above - the Club has arranged that Members required to qualify will be able to achieve compliance with steps 1, 2, 3, 5 and 6 above by using the specified approved providers at no cost, the modest expense thereof being borne globally by the Club. The obligation under step 4, however, will remain an independent cost of an individual Member.


Page 3 Circular No. 13/99 September 23, 1999




It is hoped that the foregoing description of current circumstances, in conjunction with earlier communications from the Club, will provide Members who face the new regulations in California with all the necessary assistance to ensure compliance. However, in the event of any Member requiring any further explanation or help, the Managers will be very pleased to respond.





Yours faithfully,






Joseph E.M. Hughes, Chairman & CEO

Shipowners Claims Bureau, Inc., Managers for














VRP, QI and Spill Management Team Services




OSRO Services