Documentary Committee to focus on carbon clauses at February gathering
Published: 09 February 2022
BIMCO’s approval body for contracts and clauses will meet online on 23 February. The development of a series of carbon clauses is high on the Committee’s agenda. An Emissions Trading System Allowances (ETSA) Clause for time charters is up for adoption and the Committee will also be asked to review a first draft of a CII Compliance Clause. Both clauses follow hard on the heels of the EEXI Transition Clause published in December last year as part of BIMCO’s prioritised roll-out of carbon-related clauses for the industry.
The ETSA Clause allocates responsibility for providing and paying for the emissions allowances that owners need to surrender on an annual basis. The clause is generic in that it should operate not only with the impending EU ETS but also with other ETS schemes encompassing shipping that may soon be implemented in other large trading nations.
The Carbon Intensity Indicator regime under MARPOL comes into force on 1 November this year, effective from 1 January 2023. Finding a commercial solution to the complexities of operating a time charter party under a continuing vessel improvement scheme is going to be a challenge for the industry. A lot of thought and discussion has gone into developing a draft contractual solution which we hope will find favour with the Documentary Committee so that we can push ahead towards adoption and publication before May.
Other items on the Documentary Committee’s agenda for February include the adoption of two new contracts. The first is a standard contract of affreightment for bulk shipping – code named GENCOA. It comes in two formats – one which incorporates current market voyage terms, and the other which simply gives the parties the option of attaching a voyage charter party of their choosing. The second new contract for adoption adds to BIMCO’s suite of shipbuilding and ship repair contracts with a standard agreement for ship conversion work – code named CONVERSIONCON.
The Committee will also review progress on the revision of the industry’s most widely used dry cargo voyage charter party – GENCON. The new edition has been many years in the making but is now very close to completion. It is a thorough overhaul and modernisation of this well known voyage charter party incorporating many of the common amendments and additional clauses applied to the 1994 version, but also introducing a number of new features and provisions. After the review in February it will be put forward for adoption in May.
Finally, for the past year or so, a drafting team has been working to revise and update BIMCO’s Infectious or Contagious Diseases Clauses. They have completed their work on the time charter party version and are working steadily to address the practicalities of dealing with high risk diseases in a voyage charter context. Feedback from the Documentary Committee will provide essential guidance to help conclude this important project. The aim is to have the new editions of the IOCD Clauses ready for adoption at the Committee’s next meeting in May in London.
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