In Marine Insurance P&I Club News 07/05/2015
P&I clubs have been made aware that investigations are being conducted by the customs authority in China into the Qianhe Group, a consortium of Spill Response Organisations (SPROs).
The International Group is closely monitoring the situation through a lawyer in Beijing, who is in touch with the China MSA, local MSA and customs authorities.
As of today, Qianhe remains a qualified and approved SPRO and their status in this regard remains valid and has not been revoked. However, it appears they are not responding to communications and it is reported that Qianhe personnel and vessels have been detained for the purposes of the customs investigation, so it is unclear whether they would actually be able to respond to any spill.
No statement has been made by Qianhe, the customs authority or the MSA to clarify the position further.
Members with annual contracts with Qianhe may wish to consider contracting with an alternative SPRO. In this regard, unless they are in a position to give Qianhe the contractual 30 days’ notice, they should first contact Qianhe to ascertain whether they are in a position to respond. If there is conclusive evidence that they are not, there may be a right to suspend or terminate the Qianhe contract and enter into an agreement with another SPRO straightaway, in order to mitigate the risk of non-compliance with PRC regulations and failure of Qianhe SPROs to respond.
Alternatively, members who have contracted with Qianhe on terms which follow the IG Sample SPRO Contract wording may have a right to terminate their contract with Qianhe by giving 30 days’ notice under Article 5 of the contract, enabling them to enter into a contract with another SPRO. The contractual position will depend on the terms of individual members’ contracts with Qianhe and we suggest that members take PRC legal advice in that regard. Members may also contact the Club for assistance.
Members who have not contracted with Qianhe SPROs, their consortium or their agencies are not recommended to do so by the Club, given the uncertainty regarding the ability of Qianhe to respond;
Further advice will be provided by clubs when PRC authorities provide a clear position. In the meantime, we will keep members updated with any further developments.
