The BIMCO Fumigation Clause

Most do not specifically address the risks and costs arising from cargo fumigation operations. It is unsurprising, therefore, that from time to time, following cargo fumigation, the charterer and owner are forced to confront the issue as to who is responsible for the time, cost and other liabilities that arise. A new BIMCO clause has thankfully clarified the issue.

Giorgio De Rosa Claims Executive +65 6506 2801 [email protected]

BIMCO clause Observations on the BIMCO Clause The Baltic and International Maritime The full text of the BIMCO clause Council (BIMCO) Cargo Fumigation may be found on BIMCO’s website. clause (the BIMCO clause), introduced Material extracts from the on 15 September 2015, provides clear BIMCO clause appear below. allocation as to the responsibilities, risks and costs arising from cargo Option to fumigate fumigation operations on board ships. (a) The Charterers shall have the option to fumigate the cargo in the Vessel’s The introduction of the BIMCO clause is holds in port and/or at anchorage and/ particularly welcomed since no or in transit. Such fumigation shall be international regulation or model clause performed always in accordance with has, until now, addressed these issues. IMO Recommendations on the Safe Use of Pesticides in Ships applicable to the Fumigation of Cargo Holds, MSC.1/ A further reason to welcome the Circ.1264 (IMO Recommendations) introduction of the BIMCO clause and any subsequent revisions3. is its adoption of the non‑binding recommendations of the The onus is on the charterer to declare International Maritime Organization to the owner whether it wishes to (IMO), which set out the best exercise its option to fumigate the practices and procedures for safe cargo. The fumigation may be carried cargo fumigation operations1. out in port or while the ship is in transit. This can mitigate the risk of fire and explosion that accompany cargo The cargo fumigation operations shall fumigation, such as the explosion be performed pursuant to the IMO in on board the MV Theofylaktos at Recommendations. In the event that Rio Grande Outer Anchorage, local regulations are in conflict with the Brazil, in December 20122. IMO Recommendations, the BIMCO Special Circular suggests that the IMO Recommendations should take The BIMCO clause is tailored to the precedence, except where the local dry bulk sector (both bagged and regulations apply a stricter regime. free-flowing agricultural cargoes) and is confined to issues of cargo Throughout the fumigation operations, fumigation only. It can be adapted for the master’s right to intervene where both voyage and time charter-parties. he considers that the vessel’s safety 8 may be compromised remains intact. The charterer is responsible The example below is not untypical for the removal and disposal Charterers’ costs and expenses of fumigant remains, residues –– Five days are allowed for (b) Fumigation shall be at the Charterers’ and fumigation equipment. loading (laytime); risk and responsibility. Any costs and –– Four days and four hours expenses incurred in connection Loss of time are used, i.e. 20 hours with or as a result of such fumigation, Under paragraph (e), loss of time saved (despatch); including but not limited to gas detection resulting from cargo fumigation would –– 12 hours are subsequently equipment, respiratory protective typically be for the charterer’s account. used for fumigation. equipment and crew training, shall be for Paragraph (e)(i) is tailored for time the Charterers’ account. The Charterers charterparties whilst paragraph (e) In the absence of a specific shall indemnify the Owners for any (ii) applies to voyage charterparties. contractual provision, which party liabilities, losses or costs arising out of ought to bear the cost and time or resulting from cargo fumigation. Time : incurred for cargo fumigation? *(i) All time lost to the Owners in (c) If local authorities or IMO connection with or as a result Recommendations require the crew of fumigation performed in to be accommodated ashore as a accordance with sub-clause (a) result of fumigation ordered shall be for Charterers’ account and by the Charterers, all costs and the vessel shall not be off-hire. expenses reasonably incurred in connection thereto including, but According to paragraph (e)(i), not limited to, transportation, the ship remains on hire during accommodation and victualling fumigation operations. shall be for Charterers’ account. Voyage charterparty: The above paragraphs make plain *(ii) All time lost to the Owners in that the costs and expenses of the connection with or as a result of fumigation operation are for the fumigation performed in accordance charterer’s account. The charterer with sub-clause (a) prior to shall also indemnify the owner in commencement of laytime and/or respect of liabilities, losses or costs after cessation of laytime or time on resulting from cargo fumigation. shall be considered as detention and shall be compensated The costs and expenses typically by Charterers at the demurrage incurred when fumigation operations rate stipulated in the Charter are carried out when the ship is Party. Any unused laytime shall be in port, examples of which are deducted from such detention, in described at para (c) above, are to which case any despatch payable be borne by the charterer, provided shall be reduced accordingly. they are reasonably incurred. *Sub-clauses (i) and (ii) shall apply Disposal for charterers’ account to time charter parties and voyage (d) At the discharging port or place charter parties, respectively. all fumigant remains, residues and fumigation equipment shall be removed In the voyage charterparty scenario, 1 See also Standard Cargo Bulletin, March from the vessel as soon as possible paragraph (e)(ii) provides that if 2011, page 17, which sets out some and disposed by the Charterers or fumigation is performed prior to guidelines when carrying out cargo their servants at Charterers’ risk, the commencement and/or after fumigation operations. responsibility, cost and expense in cessation of laytime or time on accordance with MARPOL Annex V demurrage, time lost to the owner 2 See Report of the Marine Safety Investigation or any other applicable rules relating Unit of Transport Malta (Report No.: 21/2013). is to be treated as detention and to the disposal of such materials. compensated for by the charterer 3 Full circular is available on the MPA website at the applicable demurrage rate. 9 Evidence as to the condition of cargo Conclusion (f) The exercise by the Charterers of Returning to the scenario on the the option to fumigate the cargo under previous page, it would seem that, if this Clause shall not be construed as the BIMCO clause were incorporated evidence as to the condition of the cargo into the (voyage) charterparty, the at the time of shipment, and the Master issue may be resolved as follows: or the Owners are not to clause bills of lading by reason of fumigation only. –– Five days are allowed for loading (laytime) By this clause, the owner agrees not –– Four days and four hours are used, to clause bills of lading simply by i.e. 20 hours saved (despatch) reason of the fact that fumigation –– 12 hours are used for fumigation is to be/has been carried out. The 12 hours for fumigation will ‘count’ Conflict of provisions and therefore the despatch (payable by (g) In the event of a conflict between the the owner to the charterer, depending provisions of this Clause and any implied on the terms of the charter) will be or express provision of the Charter reduced from 20 hours to only 8 hours. Party, this Clause shall prevail to the extent of such conflict, but no further. The adoption of the BIMCO clause is to be welcomed. Its adoption will bring This provision prevents conflicts about greater certainty in the allocation with other provisions within the of risks and obligations between subject charterparty, by giving charterers and owners in the hope of precedence to the BIMCO clause. reducing the number of disputes that arise from fumigation operations.

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