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Why the business is losing millions: the case of a vessel blocked at the port by the State Inspectorate


In our previous publications, we have repeatedly stated about the difficulties business had encountered in its interaction with the Environmental Inspectorate. We have to go back again, analyze, predict and figure out what is the catch. Why nothing has changed over the past year?

In the first article, we covered one of our cases and revealed step by step how ecologists skillfully replace concepts and how much this “creativity” of government officials costs the business.

Since the publication of our first article one year has passed. However, the situation with the stopping of ships by ecologists was not improved. On the contrary, it has become much more widespread. What is the most interesting, the scheme has not changed at all, only small nuances have appeared. In the press, as before, there is no mention of the facts of illegal stopping of ships and gross violations of environmental laws by ecologists. Due to the fact that a year later the client turned to us with a painfully familiar concerning the problem with stopping the ships, we decided to dedicate the article to this problem again.

So, we will lay it out in order. Our client acted as the grain cargo owner and after loading onto the ship the seal “radiological monitoring the import/export is prohibited” magically appeared again on the bill of lading stamped by employees of the State Environmental Inspectorate. The ship was stopped in the port, the customs authorities refused to accept the cargo noting that it did not pass radiological control.

In our case, the grain was the cargo. According to the current legislation, this type of cargo is not subject to environmental monitoring at the customs, if the checkpoints have automated control systems for the transportation of radioactive substances and nuclear materials. Radiological monitoring of such products is carried out only if they begin to emit the radiation, passing the “frame”. In case the cargo in the port has successfully passed the automated control complex – the “frame”, it means that goods are not radioactive and, therefore, no claims can be made on the issue of cargo’s radioactivity. After passing the frame, the cargo is loaded onto the ship, waiting for its shipment.

Our client’s cargo successfully passed the “frame” in the port, therefore, ecologists had no reason to conduct radiological monitoring. However, despite this, exactly as in the previous case, the environmental inspectorate puts the “radiological monitoring import/export is prohibited” stamp on the bill of lading without any legal basis.

The cargo owner is in a panic, because he does not understand why a sign of prohibition the export due to the non-passage of radiological monitoring has appeared on the bill of lading as he successfully passed the automated control during loading. Also, the shipowner makes a complaint to the cargo owner and accuses of detaining the vessel, since according to official documents it was the non-passage of the radiological control of goods caused the detaining of a ship. Therefore, all the losses the shipowner is trying to give to the cargo owner.

As a year ago, only after the official appeal of the cargo owner to the State Ecological Inspectorate with a request, what was the basis of putting a stamp of the non-passage of radiological monitoring, things began to clear up. It turned out that the State Environmental Inspectorate does not have any claims to the cargo again, and the export ban was stamped on the bill of lading on the basis that the vessel violated the environmental legislation. According to the supervisory authority, the ship polluted the country’s sea waters.

The State Environmental Inspectorate’s response gave grounds to say that everything was all right with the cargo, but proposed no solution to the main problem – the vessel continued to remain in the port and both the cargo owner and the shipowner suffered huge losses.

We have already described the “creativity” of the environmental inspection. We revealed how ecologists delicately replace concepts with only one purpose – so that the customs would not have the right to sail a ship from Ukraine. Surprisingly, but over the past year, nothing new in this “scheme” of stopping ships has been introduced. Probably, there is no need, because during the year everything works fine, but about the consequences for the economy of Ukraine to say the least of it of “illegal”, actions we will tell later. Now, recall how everything works.

There are several types of controls that the State Environmental Inspectorate performs in Ukraine. The first is radiological. Formally, it was carried out in our case and was applied to the cargo. The second is the environmental monitoring of the vessel, which has nothing to do with radiological monitoring. Its non-passage in no way should be displayed as a “radiological monitoring the import/export prohibited” stamp put to the bill of lading of the cargo owner.

According to the regulations, the State Environmental Inspectorate had the right to check the territorial and marine waters for compliance with the standards for maximum allowable concentrations of pollutants. Such check is possible only if during the discharge from the vessel of isolated ballast, visible floating parts are thrown out with it, or visible traces of oil, oil-containing or other pollutants occur in the discharge area.

In our first case, the goal was to stop the ship’s departure. So, the environmental inspectorate conducted a survey of ballast discharge near the vessel for no visible reasons. Then the inspectors in the presence of the port representative drew up the water sampling report. Based on the above act, state officials compiled a protocol for measuring the indicators of composition and characteristics of the waters, and in the selected water samples they “found” an excess of the boundary norms of iron and oil products.

This is a “standard” scenario “successfully” applied to the majority of ships entering the ports of Ukraine. According to the current legislation, after creating the act, ecologists had the right to draw up only a protocol on administrative violation as well as to calculate the losses caused by the ship to the environment. However, everything is different. In most cases, after such an act the State Environmental Inspectorate put a stamp of the non-passage of radiological control by the cargo on the shipping documents. It should be noted that the presence of such a stamp was an iron foundation for the refusal of customs authorities in passing the customs and sailing the ship from the port.

The stories about stopping the ship had different endings. Some of the shipowners received an administrative fine for an administrative violation for a couple of hundred hryvnias and that is all. Someone had to pay the losses calculated by ecologists amounted to hundreds of thousands hryvnias. Then the ship was also sailed. However, in some cases, as in our last, everything was even worse.

No one presented to the shipowner neither the water sampling report, nor the protocol for measuring the indicators of the composition and characteristics of the waters. There was no fact of the offence by the vessel. There was only a “radiological monitoring the import/export is prohibited” stamp on the bill of lading and the week of detaining the ship with a total loss of more than 150 000 USD.

During this week, both the shipowner and the cargo owner received anything except the letter of ecologists addressed to the marine agent about the facts of water pollution, their non-admission to the ship, measurements and so on. When dozens of requests were made and complaints were filed to all possible instances – the ship was simply released. When asked what became the basis for stopping the ship, ecologists in their official responses admit without hesitation, that the environmental inspection does not have another tool to detain the ship, that’s why there is a stamp applied that specifically refers to the radiological control.

The position is very interesting, most importantly is that officials openly admit that they are rudely violating the current legislation, exceeding their authority and deliberately cause business losses. According to the information published by the Office of Effective Regulation on their Facebook, it is said that business losses from illegal actions of the State Environmental Service using the stamp “radiological monitoring the import/export is prohibited” exceed 200,000,000 dollars a year. That’s not counting daily losses of the staying the ship and cargo in the port, which range from 15 to 30 thousand dollars a day.

The most interesting thing in this situation is that since the groundless stops of the ships in the ports have become widespread, not a single inspector or his supervisor involved in illegal actions has been brought to justice. There was not even a fact of disciplinary responsibility or a banal reproval, no more serious consequences as dismissal or criminal liability. Despite the fact that there were such appeals, but they were deliberately blocked at the Environmental Inspectorate management level.

We can’t anticipate that problematic issues with the state environmental service will be resolved with the adoption of the new Law of Ukraine №2530-VIII from 09.06.2018 “On Amendments the Customs Code of Ukraine and some other laws of Ukraine regarding the adoption of a “single window” facility and optimization of the implementation of control procedures for the movement of goods across the customs border of Ukraine“. Although, according to ecologists, this Law that deprives them of their authority and with its adoption they will not be able to carry out environmental and radiological monitoring of goods and vehicles moved across the customs border of Ukraine.

We studied the new Law several times very carefully, but we did not notice any obvious changes in the powers of ecologists. The legislator slightly modified the definitions in the old and new editions, but we did not see a direct ban on putting the “radiological monitoring import/export is prohibited” stamp. In addition, ecologists did not have the right to carry out the above actions in the laws of the previous edition. The exceptions were cases with the automated control frame in the port. However, nothing and nobody prevented government officials from using this stamp, even in cases not prescribed by law. After the adoption of the new Law, information began to appear in the press that the vessels in the ports continue to stop.

In fact, only the technology has changed a little now. For example, instead of putting a stamp “radiological monitoring import/export is prohibited”, ecologists decide to ban the ship from leaving the port. Although they have such a right only in one case (as before), if the cargo emits the radiation and this fact is established by the Customs authorities.

Doesn’t that remind you of something? All the same, only under a different sauce. In fact, the promised changes about minimizing abuses by the State Environmental Control did not happen. The mechanism of the scheme has changed. The issue of bringing to responsibility public officials involved in the illegal stopping of the ship and cargo and recovery of the business losses remains open. Until the above practice and clear position of the business is formed, the system will continue to work as it has worked, even with slight changes.

As always, the final choice should be taken by the business.

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