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The International Transport Intermediaries Club Ltd. (ITIC) - a mutual insurance company that provides professional indemnity insurance to companies involved in the transport industry - has confirmed that a ship management company has been fined over a quarter of a million dollars in connection with a breach of clean air regulations in the United States.

ITIC reports that an inspector of the California Air Resources Board, the clean air agency of the state of California, boarded a ship in July 2011 at a terminal in Los Angeles.

The chief engineer is said to have been asked if he was aware of the revised 2009 California clean air regulations which required vessels to switch main engine, auxiliary engines and auxiliary boilers to low-sulphur fuel when in California-regulated waters. The chief engineer is reported to have said he was only aware of the requirement to switch auxiliary engines to low-sulphur fuel in accordance with regulations effective from January 1, 2007.

"The master checked the vessel's Safety Management System (SMS) but was unable to locate the 2009 requirement. The inspector then examined the records of fuel switchover for the vessel's main engine, auxiliary engines and auxiliary boilers, and ascertained that the ship had called at California ports seventeen times between 2009 and 2011 without switching over the main engine or the auxiliary boilers. A penalty of $283,500 was duly imposed on the shipowner for failure to switch fuel during the seventeen port calls. The owner claimed against the manager, maintaining that the manager had been negligent," ITIC said.

"In 2009, a fleet circular had been sent to all vessels by the manager, setting out the change in regulations, and asking that it be displayed in a prominent position. The manager therefore initially rejected the claim on the ground that it had resulted from crew negligence, which was excluded under the BIMCO management agreement. The owners, however, did not accept this rejection, maintaining instead that the manager had failed to update the SMS. As it was considered unlikely that the manager would successfully defend a claim resulting from its failure to update the SMS, the claim was paid in full," ITIC added.