Friday, November 7, 2014

Two Inspection and Classification Agencies Suspended by Chinese Authorities

A Pair of the Best Known Names in the Industry Seemingly Fell Down on the Paperwork
Shipping News Feature

CHINA – Two of the world’s largest classification societies have been suspended from providing certification and inspection services for offshore oil drilling businesses in China, for a period of six months. UK headquartered Lloyd’s Register (LR) and US based American Bureau of Shipping (ABS) received the orders following allegations that the firms failed to fully comply with ‘safety testing and inspection agency regulations’, with no further details given for the actual cause for suspension.

Mining and drilling activities in the PRC are governed in part by a ruling seven years ago which stipulates precisely what any third party certification and inspection agency underwriting industrial performance needs in the way of qualifications. Lloyd’s Register’s suspension is in relation to an offshore licence renewal questionnaire that hadn’t been satisfactorily completed, but the firm is now working with the Chinese State Administration for Work Safety (SAWS) to rectify the problems in order to reinstate the licence. Lloyd’s Register issued a statement saying:

“As part of our 14-page response in support of our licence renewal to carry out offshore certification in China, the regulator felt that we had not provided sufficient detail on six broader, industry-based questions. We are now finalising the detail to these specific questions and we are working with the regulator to ensure that they are fully satisfied with our response and that we can achieve an early reinstatement of our licence.”

Speaking to the press Lloyd’s Register’s Marine Director Tom Boardley is quoted as saying:

“The decision came as a surprise. We are trying to understand why the government took the action. We did not fill all the questionnaire and we should have filled it all. We have a few projects [relating to offshore drilling] but we are not very active in China at the moment. The suspension doesn't affect our other lines of operation."

The temporary ban on ABS’s operations also seems to be from an insufficient response from a ‘regular inquiry and collection of information’ but the society says that it has rectified the situation and resubmitted its response and is now also hopeful of early reinstatement.