BIMCO Hold Cleaning/Cargo Residue Clause

February 2007

BIMCO has recently issued a clause designed to address the thorny issue of allocation of responsibility for time and costs between owners and time charterers as a result of compliance with MARPOL V Regulations relating to the disposal of cargo residues.

The Regulations were recently amended to include cargo residues within the definition of “garbage”, and strict rules now apply as to the method and place of their disposal. Hold cleaning residues will frequently occur when an owner is required by a vessel charterer to clean holds in readiness for the next cargoes.

Owners frequently face both practical and fiscal issues in relation to disposal of hold cleaning and cargo residues particularly when disposal facilities are not available, or are only available at a high cost. Many vessels are not designed to allow such washings to be stored in wing or bilge holding tanks, and therefore disposal is an issue that has to be dealt with straight away.

BIMCO’s clause, which is an update to the “BIMCO Cleaning of Cargo Compartments Clause”, is designed to “allocate fairly the costs of proper disposal at authorised locations or reception facilities and to account for the time used and costs involved”. (BIMCO Special Circular No 3 31 August 2006).

The new clause provides that charterers shall supply and pay for all cleaning materials, and also be responsible for the costs and time, including any required deviation, associated with the cleaning and disposal operations.

Importantly, unlike the previous clause, the new clause entitles an owner to deviate at charterers expense where no reception facilities are available for the disposal of cargo residues. This is important for enabling disposal of residues outside Special Area limits.

It is understood that consideration had been given to include provisions relating to the disposal of lashing and dunnaging. However, as those materials are not related to hold cleaning, a separate clause is to be developed to deal with responsibility for disposal of lashing and dunnaging. 

The wording of the clause is reproduced below with kind permission of BIMCO:

Hold Cleaning/Residue Disposal Clause For Time Charter Parties

a) The Charterers may request the Owners to direct the crew to sweep and/or wash and/or clean the holds between voyages and/or between cargoes against payment at the rate of ……. per hold, provided the crew is able safely to undertake such work and is allowed to do so by local regulations. In connection with any such operation the Owners shall not be responsible if the Vessel's holds are not accepted or passed. Time for cleaning shall be for the Charterers’ account.

b) All materials (including chemicals and detergents) required for cleaning of cargo holds shall be supplied by and paid for by the Charterers.

c) Throughout the currency of this Charter Party and at redelivery, the Charterers shall remain responsible for all costs and time, including deviation, if any, associated with the removal and disposal of cargo related residues and/or hold washing water and/or chemicals and detergents and/or waste as defined by MARPOL Annex V, Section 1 or other applicable rules relating to the disposal of such substances.