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Gafta GPD Trade Foundation Course

23-26 April 2019 London

Day One

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Welcome and introduction

Jaine Chisholm Caunt

Director General

Gafta

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Housekeeping • Course Materials: Available via Dropbox –

Please access via the link that was sent to you. • Fire: There will be a fire alarm test on Friday

morning. • Mobiles: Switch to silent mode, but please feel

free to use social media! @Gaftaworld #TFC2019

• Networking details & programme are in delegate packs

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Basic principles of contracting

Jonathan Waters

LLB, LLM, MCIARB, CMC Registered Mediator, Barrister

General Counsel

Gafta

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English Contract Law

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Why English Law? (1) It is what you have

agreed to! It reflects what the

trade wants Gafta Domicile Clause

Legal effect of Domicile Clause?

DOMICILE This contract shall be deemed to have been made in England and to be performed in England, notwithstanding any contrary provision, and this contract shall be construed and take effect in accordance with the laws of England. Except for the purpose of enforcing any award made in pursuance of the Arbitration Clause of this contract, the Courts of England shall have exclusive jurisdiction to determine any application for ancillary relief, (save for obtaining security only for the claim or counter-claim),the exercise of the powers of the Court in relation to the arbitration proceedings and any dispute other than a dispute which shall fall within the jurisdiction of arbitrators or board of appeal of the Association pursuant to the Arbitration Clause of this contract. For the purpose of any legal proceedings each party shall be deemed to be ordinarily resident or carrying on business at the offices of The Grain and Feed Trade Association, (Gafta), England, and any party residing or carrying on business in Scotland shall be held to have prorogated jurisdiction against himself to the English Courts or if in Northern Ireland to have submitted to the jurisdiction and to be bound by the decision of the English Courts. The service of proceedings upon any such party by leaving the same at the offices of The Grain and Feed Trade Association, together with the posting of a copy of such proceedings to his address outside England, shall be deemed good service, any rule of law or equity to the contrary notwithstanding.

Gafta 48: Clause 25

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• …“deemed to have been made in England” • …“and to be performed in England”

• …“construed and take effect in accordance with the laws of England”

Contract… Contract shall be…

• …“shall have exclusive jurisdiction” English courts…

• No appeal to English courts on point of law. • Impact on Gafta’s ability to arbitrate • May cause enforcement issues e.g.: “Arbitration at Gafta in England according to the law of

Ethiopia.” ($7.5m dispute) • Ethiopian law – Ethiopia not a signatory to UN Convention on enforcement of arbitration awards

Be aware of Gafta 125 (Arbitration Rules)

What if you include a jurisdiction that is not England?

Why English Law? (2)

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• Fraud/corruption on increase in international arbitrations

• Safe place to arbitrate • Infrastructure (courts for ancillary relief) and

professional firms

Fraud London

• Ancilliary relief (Gafta 48, 26 (c.)): obtaining security

• Commercially savvy – sympathetic to arbitration

Security Judiciary

• Highly beneficial, settled case law • Although English law, arbitration hearing can take

place anywhere if parties agree • Brexit?

Precedent Global

Why English Law? (3)

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Contract Formation

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Why Gafta Contracts? • 80% of world trade in grain: Gafta contracts • ‘Tried and tested’ • Backed up by internationally renowned Gafta dispute

resolution service • Reflect what the trade wants

• International Contract Committee (ICC) • Flexible: Parties are free to amend (and most do!) • English Law

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What is a Contract? (1)

• In English Law a verbal Commodity Contract is legally binding (Sale of Goods Act S4)

• Why is it preferable to have a written agreement?

A legally binding agreement – (whether written* or spoken)

*written can include emails, texts & even WhatsApp

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6 elements required to establish a valid contract:

Offer By one party to the other

Acceptance Unconditional

Consideration Commonly the price

Intention to create legal relations

Presumed in commercial contracts

Capacity Presumed in commercial contracts

Legality Sanctions

All must be present! If one is missing – no contract

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Context

• Speed of market – parties often agree main terms but leave others to be agreed later – lack of clarity?

• Also, complications can arise due to brokers, different jurisdictions and using a language in which the parties may not be fluent

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• A statement of willingness to contract on specified terms made with the intention that, if accepted, there will be a binding contract

• Must be sufficiently clear/ detailed • Is not the same as an “invitation to treat” (which is an invitation to

make an offer) • Can be withdrawn any time up until acceptance • Are tenders offers?

Offer

How is a contract made? (1)

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How is a contract made? (2) When does a contract become binding? • A contract will not be concluded and legally binding until the offer is accepted unconditionally

o When can an offer be withdrawn? o Offers with time limits (e.g. price shall remain £ x for 7 days)? o Acceptance must be unconditional agreement to the terms of the offer without qualification (“meeting of the

minds”) o Acceptance must be communicated o Silence is generally not acceptance but conduct may be

• An attempt to introduce new terms is not an acceptance but a counter-offer o a counter-offer is a rejection of the offer, a party cannot later accept the initial offer o mere requests for information are not counter-offers

• The “battle of the forms” – the last shot approach

Acceptance…

“We agree to your offer of 5,000mt of Ukrainian Corn, but for good orders sake send us a full confirmation note”

Is this Acceptance? Or is it a counter offer?

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How is a contract made? (3)

• Essential to formation of contract • English law will not enforce a gratuitous promise (a promise which is not supported

by consideration) – there must be a “bargain”

• In practical terms it is the price that a party pays in return for goods • No requirement for consideration to be of market value. Courts are not concerned

with whether parties have made a good or a bad deal!

• Phoenix Consortium purchase of Rover Group from BMW for £10

Consideration

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How is a contract made? (4)

• What if the existence of a contract is disputed? o Particularly relevant if contract is verbal or there have been

subsequent variations to a standard contract

• Past business dealings o Custom/practice?

• Evidence to show there was a contract o Emails?

Intention to create legal relations

• The legal ability to enter into a contract • Compare with authority to contract

o Does the signatory have the authority to enter into the contract on behalf of the counterparty?

• Broker/ agents authority to contract? • “XXX shall have the authority to negotiate and

conclude the contract.” • Enforcement action: S504 Turkish Code of Obligations

XXX had to have “special authority”. Turkish courts did not enforce award.

• Sanctions • Prevention of Shipment • Phytosanitary certificates

Capacity

Legality/vitiating factors

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How is a contract made? (5) Incorporation • Inclusion of terms

o Gafta incorporated terms: insurance (Gafta 72), weighing (Gafta 123), sampling (Gafta 124), arbitration (Gafta 125): all form part of contract

o Notice of terms needs to be given o Terms must be in a document intended to be contractual o Reasonable steps must be taken to bring it to the attention of the party

• Confirmation Notes (Proper reference to correct Gafta Contract?)

Addendum • In 1 Gafta Arbitration Hearing, there were 9 attachments to the contract. All were disputed and none

were signed! Arbitrators had to decide whether the 9 documents formed part of the contract • May cause an issue on enforcement

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Basic contractual obligations and contractual terms

Jonathan Waters

LLB, LLM, MCIARB, CMC Registered Mediator, Barrister

General Counsel

Gafta

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Having established there is a contract, what is contained within it?

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Seller • Provides goods • Goods conform with contract • Puts goods on board ship

Buyer • Arranges shipping/insurance • Gives proper notice to seller (e.g. vessel,

port)= pre condition of contract. Failure: seller under no obligation to perform

Legal title and risk pass on delivery to ship

‘all inclusive price’ Seller

• Makes shipping arrangements • Delivers goods • Ships goods • Arranges insurance

Buyer • Nominates port • Takes delivery – meets cost of unloading/

import licences/ customs duties • Pays for goods on receipt of shipping documents

Risk passes on delivery – legal title passes later

FOB – Free on Board CIF – Cost Insurance Freight

Basic Contractual Obligations (Summary)

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Contractual Terms (1) • Contents of a contract are called terms • A term is something which imposes a contractual duty

(obligation) • The phrase covers conditions, warranties and innominate

(intermediate) terms

Important to distinguish as classification determines the remedy in the event that a counter party defaults

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• Specifically agreed • Oral or in writing

Express

• Not specifically agreed but put into in the contract by statute (Sale of Goods Act 1979) or by the courts/arbitrators

• Implied by Courts/arbitrators to make ‘commercial sense’/reflect intention of parties/reflect custom and practice

• The Moorcock (1889) • Importance of statutory implied terms

Implied

Contractual Terms (2) Main terms will be set out in the written contract • Gafta standard contracts

o Parties free to vary (and often do)

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Sale of Goods Act 1979: Statutory Implied Terms

• Of critical importance in context of defaults • S12. Seller has the legal title to the goods • S13. Goods must correspond to description • S14. Goods must be of satisfactory quality. Test is objective. What would a reasonable (business) buyer

regard as satisfactory having regard to price, description and other relevant factors • S14. Goods must be fit for intended purpose • S15. Goods supplied in bulk most correspond with sample

• Act can be excluded (exclusion clause): Air Transworld Limited v Bombardier (2012): Check the contract carefully (particular Counterpartys standard form contract which may have been incorporated)

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Terms Conditions

• A major (or fundamental) term: goes to the very heart of the contract

• Breach entitles innocent party to repudiate

• Repudiate: terminate contract and sue for damages

Warranties

• A minor (less important) term • Breach entitles innocent party to

damages ONLY and the contract continues

• Most terms in a contract are warranties

Distinction is critical! Termination for breach of condition is a breach of contract if the condition is actually a warranty!

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Identifying a Condition or Warranty

• Important to identify, in the contract, which terms are conditions and which are warranties

• Generally, in a business contract courts will give effect to what the parties have agreed

• But not always…!

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What was the outcome?

The Parties: • Schuler – a tool manufacturer • Wickman – a tool sales company Scenario: • Wickman granted the sole right to sell Schuler tools • Condition of contract – Wickman had to send a sales person to each named company

once a week to solicit sales • Wickman failed to make some visits • Schuler terminated the contract

Schuler vs. Wickman 1974

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Schuler vs. Wickman 1974 – The Outcome • HELD Schuler and Wickman had not intended the

word ‘condition’ to be used in a strict legal sense • The outcome – termination – would be

unreasonable • The term was a warranty and termination by

Schuler was a breach of contract

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Intermediate Terms

• Intermediate term is neither a condition or a warranty!

• Traditional Approach – causes inflexibility/unfairness

• Minor breach of condition gives rise to termination

• Major breach of warranty does not

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Hong King Fir Shipping vs. Kawasaki 1962

• New approach: Intermediate term

• Courts may be prepared to disregard the ‘label’ (i.e. ‘condition’ or ‘warranty’)

o Has the innocent party been substantially deprived of whole benefit of the contract by the breach?

• If innocent party substantially deprived – termination and damages

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Which Approach? • For courts to decide • Courts generally take the view that if parties have specifically negotiated a

term as a condition then this is what they intended and will uphold this • Statutory implied conditions will always be conditions (unless excluded) • Case law has established that certain terms will be conditions (e.g. opening L/C,

timing, appropriations, nominations, delivery, provisions relating to tender of documents, failure of FOB Buyer to nominate and provide a vessel) and certain terms will be warranties (failure to pay demurrage/carrying charges)

• Always take legal advice before alleging a breach of condition and terminating contract – if you get it wrong you are in breach of contract

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The Goods, Description Quality and Condition An Overview

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Sale of Goods Act 1979 (Refresher)

• Implied terms

• What type of term – condition, warranty or intermediate?

• Why is it important to distinguish between these?

• Context: Gafta arbitration – many contractual disputes re description and quality

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Description – (S13) • Clause 1 – Gafta 49 • Goods must be sold as described (i.e. correspond with their description) –

examples from Gafta arbitration cases o “Brazilian Yellow Maize” o “Ukrainian Third Grade Feed Corn” o “Free from Insects” o “Wheat” – is this clear enough? o “White Flour” – flour was yellow on arrival but of satisfactory quality: Is this a misdescription? o “Organic” – what does this mean? o “Grade A Banana Skin Pulp” – What if Grade B is delivered?

What are the consequences for a misdescription?

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Satisfactory Quality Clause 5 – Gafta 49 • Quality includes: natural characteristics of

the commodity (size, shape, chemical composition) and condition (burnt, wet, mouldy, infested)

• Goods deemed to be of satisfactory quality if they meet the standard that a reasonable (business) person would regard as satisfactory, taking into account any description, the price and other relevant circumstances

Circumstances include: • Fitness for all the purposes for which goods of

the kind in question are commonly supplied (human or animal consumption) ̶ Appearance and finish ̶ Safety ̶ Durability ̶ Price

• Important to define quality in contract • Satisfactory quality on delivery to vessel for

reasonable time thereafter (unless contract provides otherwise)

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Certificate Final (1) Mechanism for dealing with issues such as description and quality. • Gafta 48 – Clause 5 “Certificate of inspection at the time of loading shall be final as

to quality” • Parties agree that a third party will make a determination. Buyer has assurance that

goods have been supplied in accordance with contract. Seller has protection against buyer latter alleging goods were defective

• Certificate is generally final and binding • Buyer has no right to challenge findings (fraud is an exception) – clause is pro-Seller • But Buyer may argue that wording of certificate allows a challenge to be made

Precise wording is critical!

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Certificate Final (2) • Certificates are only final in relation to the matters they are intended to

cover (eg “quality”). They are not final in respect of any other matters not expressly required to be certified in the contract – final as to “quality” would not be final as to “description”

• In such cases the buyer is not precluded from bringing a claim if the goods did not match their description

• Bow Cedar case. ‘Weight and quality’ final at loading as per certificate of independent surveyors. Dispute arose regarding description. Sellers argued there could be no claim. Buyers argued that clause only related to ‘weight and quality’ and a claim for misdescription could still be made. The courts agreed

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Excluding the Sale of Goods Act • S55. Sales of Goods Act – Allows parties to exclude statutory implied terms • Exclusion Clause must be reasonable (Unfair Contracts Terms Act 1977) • Air Transworld Limited V Bombardier 2012 • Aircraft alleged to be in breach of Sale of Goods Act – did not correspond with

description not of satisfactory quality and unfit for purpose • Exclusion Clause – excluded liability under Sale of Goods Act

• “Buyer…waives and releases all other warranties, obligations, representations or liabilities express or implied…including but not limited to…any implied warranty or merchantability or of fitness for a particular purpose…”

• Exclusion Clause Valid

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Refreshments

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Gafta Contracts: An introduction

Jonathan Waters

LLB, LLM, MCIARB, CMC Registered Mediator, Barrister

General Counsel

Gafta

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Overview of Gafta 49: Some Key Terms (1) (FOB: Delivery of Goods, Central and Eastern Europe)

• Sellers/ Buyer (make sure counterparty is correctly identified) • Brokers Clause 1 Goods – description is a condition (Sale of Goods Act 1979) (Statutory Implied Terms)

o “Brazilian Yellow Maize” o “Lithuanian Milling Wheat” o “Free from Live Insects” o “White Flour”

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Overview of Gafta 49 (2) Clause 2 Quantity – note ‘tolerance level’ “5% more or less at buyers option”. (25,000MT i.e. 10% tolerance. 22,500MT or 27,500MT)

• If more than 1 delivery, each delivery is treated as a separate contract – Clause 3 Price – Fixed or a price ref to Futures market Clause 5 Quality – a condition (Sale of Goods Act 1979) (Statutory Implied Terms) Need to decide when Quality will be determined – e.g. at loading or at discharge. Scale of allowances if not met. Clause 6 Period of Delivery

• FOB contract – buyers to give notice of name/ probable readiness of vessel. Sellers to have goods ready to be delivered within contract period of delivery

• Buyers right to substitute vessel • Note: reference to notice (refer to clause 14)

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Overview of Gafta 49 (3) Clause 7 Loading

• Name of port • Sellers to declare port if range given • Vessel to be clean and fit • Load in “accordance with custom of port” (incorporation) • Bill of Lading is proof of delivery

Clause 8 Extension of delivery • Buyer can serve notice to extend period by “an additional period of not more than 10

consecutive days” • “Consecutive days” meaning? • “Notice” – how is it served?

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Overview of Gafta 49 (4) Clause 9 Insurance

• Note risks to be included • “First Class underwriters and/ or approved companies” • Note: Some contracts incorporate Gafta Insurance Rules 72 – incorporation 14.1(b)

insurer to be domiciled/ carrying on business in UK or who will accept British domicile as an address for service

• Insurance Act 2015 • Insured to fairly present risk • Failure – insurers remedy must be proportionate – avoid policy, require additional term,

charge higher premium

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Overview of Gafta 49 (5) Clause 10 Payment/ Interest

• Cash against documents – Buyer pays when Seller presents the specified documents • Letter of Credit: Failure to provide workable letter by date specified = Breach of

Condition

Clause 12 Duties/ Taxes

Clause 13 Prevention of Delivery • Force Majeure • What is it? • Note Ice Provision

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Overview of Gafta 49 (6) Clause 14 Notices • Form: Critical • Communicated “rapidly in legible form” • Telex, telefax, email, letter (delivered by hand on date

of writing) • Problem areas:

o Incorrect form o Incorrect period (time) o Non receipt (burden of proof on sender) o Sent to correct individual (Glencore v Conqueror

Holdings 2017) o Notice to brokers: deemed to be good notice

• Wording required: o Is ‘Gafta extension’ sufficient? In one case a

‘notice’ (message) was sent making no reference to the shipment period and did not contain the word ‘extension’

• Wording must be clear to the recipient o Not for recipient to ‘second guess’

• Counterparty need to know extension being claimed • Failure to give notice – no extension and shipment

period will not be extended beyond expiry date. Recipient can reject claim damages

Notices are Conditions!

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Clause 16 Weighing • Rule 123 Incorporation (Gafta Weighing Rules)

Clause 17 Sampling • Rule 124 Incorporation (Gafta Sampling Rules) • Samples at time/ place loading • Parties appoint superintendent from Gafta • Register of Analysts

Clause 18 Default • Critical • Measure of damages for breach of contract

Overview of Gafta 49 (7)

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Overview of Gafta 49 (8) Clause 19 Circle Clause 20 Insolvency • Notice of insolvency (inability to meet debts)

to be served • Failure to serve, termination • Practical considerations Clause 21 Domicile • Critical • English Law/ English Courts to apply

Clause 22 Arbitration • Critical • “Any and all disputes” to Gafta Arbitration • Make sure it is included Clause 23 international conventions • Incoterms excluded

Clause 24 Phytosanitary Certificate • Assists Sellers where Buyers ‘Game Play’

Anything else? Optional clauses (Gafta 131) ? Sanctions?

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• Buyer and Seller have been trading with each other since 2013 • Buyer telephones Seller and tells Seller he wishes to buy 25,000 metric tonnes of soyabean meal at $476

per metric tonne • Seller agrees. No other terms are discussed • 3 days later, Seller sends a ‘contract confirmation’ by SMS including a summary of the agreed trade ‘as per

sellers standard contract terms’

Scenario

Case Study

• Is there a contract? • Does the fact that the trade was agreed over the telephone have any legal or practical

consequences? • What is meant by a ‘contract confirmation’? • Does the wording ‘as per sellers standard contract terms’ have any relevance? • Is it relevant that the parties have been trading since 2013?

Questions

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Lunch

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Responsibility and risk

Martin Sage ADM Trading

Gafta Qualified Arbitrator

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What do we mean by Risk and Responsibility?

• Potential negative consequence of an event • Which party bears the risk i.e. the loss • CIF/FOB: Risk passes “as from shipment” • Not the same as title • Title – ownership, not possession

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Categories of Risk

• Risk in the Goods (physical/ quality, etc.) • Shipment Risks (loss, delay, damage) • Documentary Risks (validity, duty to tender, duty to pay, value,

scope, liabilities) • Legal Risks (country/political)

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What is a Contract?

A promise or set of promises which the law will enforce.

Today, specifically FOB and CIF contracts, and where you buy on FOB terms and sell CIF

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FOB

What are the parties’ primary duties?

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FOB Buyer To give effective shipping instructions: • Nominate and present a suitable vessel at the port of loading

in sufficient time • Provide required information (e.g. quantity to be loaded, ETA,

flag, demurrage rate, etc.) • Give documentary instructions – type, number, content.

** Consequence of failure…?

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FOB Seller

• Deliver contract-compliant goods (description/quality/quantity)

• Load goods on board the ship nominated by the Buyer (when, where, how fast)

• Provide the required documents (doc instr., letter of credit, export formalities, conforming docs)

** Consequence of failure..?

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CIF

What are the primary functions?

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FOB • Who is responsible for insuring the goods on board? • What is the risk?

• Who is responsible for paying the freight? • What is the risk?

• If goods are damaged on board before payment and the Master clauses the B/L, who is responsible?

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CIF Seller will provide documents which prove he has: • Shipped goods of the contractual description • Appropriate goods to the Buyer • Insured them for the intended voyage at the contract value • Shipped under a reasonable ctr of carriage within the agreed time

period and paid freight to the agreed destination. OR procure documents from someone who has done so.

**What risks do you see ?

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Risk in the Goods

Conformity with the terms of the Contract

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Risk in the Goods

Conformity with the terms of the Contract:

• Description – what does SoGA say? • Specification – what does the Contract say? • Condition – what does the Contract say? • Sampling and analysis – Certificate final? • Sale of Goods Act: Satisfactory, fit for purpose

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Shipment Risks • Time for performance – FOB and CIF • Suitability of vessel

- Shipment and classification clause - Reasonable contract of carriage

• Safe port/safe berth • Safe stowage • Laytime and detention • Impediments to performance

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Shipment Risks • Insurance

- Type of cover (All Risks, WA…HSSC, SRCC, G/A…) - Value of cover - market value? - Suitable insurers - jurisdiction - Where claims are settled – service of process

* Cargo damage and recovery – Ctr/ B/L / Insurance..? * Act as prudent uninsured – mitigate loss!

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Documentary Risks

• What documents are listed in the printed forms? • Buyer to give documentary instructions

- Can Seller supply them? (Phyto regs) - Can Buyer obtain additional documents if needed? - Are Seller’s documents sufficient to obtain payment?

**Consequences of missing or defective documents?

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Documentary Risks

• The Bill of Lading - Receipt for goods shipped - Document of title - Evidence of a contract of affreightment

**Are Mates Receipts acceptable?

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Documentary Risks

• Payment: - CAD: Where? When? How? (Security of docs) - Letter of Credit: Is it workable?

(timing/revocable/confirmed/variation of terms) • Import:

- Can Receiver import the goods? (Political/Country risk)

** Consequence of non payment…?

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Legal & Political Risks

• Sale of Goods Act • Conformity with domestic legislation (export/import) • Sanctions/Prohibitions/Restrictions… • Transfer of title • Potential conflict with other important documents –e.g. Charter

Party, Bill of Lading, Letters of Credit • Jurisdiction and Arbitration Proceedings

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Execution Risks Notices: • Appropriation – form, content and timing • Nomination – content, timing (preadvice), substitution • Extension - timing • Prevention – circumstances, content and timing • Default – circumstances, timing • Arbitration – type of claim, time limit, renewal, proceedings

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Market Risks

• Who is responsible for market risk? • What happens if a Seller defaults? • What happens if a Buyer defaults? • What about loss of profit?

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Instruction for Supervision

Chris Ranschaert SGS

ISSUING INSTRUCTIONS : Ensuring clarity and best practice

London, 23/04/2019

Ing. Chris Ranschaert

SGS Group Management – Agricultural, Food & Life

RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS

 Introduction • Intended for superintendents listed on the GAFTA Register

of Approved Superintendents. • If Superintendents act contrary to the provision of these

Rules they may be subject to disciplinary action

 The Superintendent’s operations • Primary business activities are in the profession of

inspection • In accordance with the agreed contract terms • “When a Superintendent issues reports and certificates…

they shall reflect the actual and true findings”

 Minimum requirements for Superintendent companies • Accreditation ISO 17020, certification ISO 9001 or GTAS

audited

RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS

 Rapid decision taking if the inspection company informs. Price negotiations possible. It puts you in a position of strength.

 It provides protection to your purchase. Only contractual goods will be shipped.

 The nomination of a GAFTA recognized inspection company acts as a deterrent to suppliers. It has a psychological effect. It acts to prevent problems.

 Independence. The word of an independent inspection company counts.

 Possibility of falling back on samples for arbitration settlement.

 Securization. Better insurance premium. Good reputation to the product in importing countries.

RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS

 Being the representative of the principal at the moment of loading or discharging “the eyes and ear

 Compliance with the rules • All operations it carries out shall comply with the appropriate

rules and the contract terms

 Sampling • According to GAFTA Sampling Rules 124 • Can be done during loading or during discharge

 Quality & Condition • Need for submitting samples for testing to a laboratory on the

 Cleanliness inspection of the transport elements or stores • LCI : load compartments to be empty, clean, without

unsuitable odors, free from residues and vermin • 3 preceding cargoes carried as declared by master +

cleaning methodology.

RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS

 Weighing • According to GAFTA weighing rules N° 123

– Method as per contract or as per customs of the port – Establish the method of weighing + create & keep records – Weighing operations at appropriate place and time – Information needed

» Apparatus used » Approval by the authorities » Info concerning calibration & verification

 Phytosanitary/Veterinary/Radioactivity/Health certificates • Usually issued by national authorities • Alternatively by the superintendents on basis of testing

 Subcontracting • Only to other superintendent on the GAFTA register

ACCEPTING INSTRUCTIONS FROM THE CLIENT

 DUTY OF THE PRINCIPAL

• It is the duty of the principal to give instructions in due time and these instructions must be clear and unambiguous, including sufficient detail to enable the superintendent to carry out and perform the inspection in accordance with the requirements of the contract and according to the expectations of the principal

• An instruction is a directional message describing the task that is to be performed.

• In due time • “As usual”

ACCEPTING INSTRUCTIONS FROM THE CLIENT

 DUTY OF THE SUPERINTENDENT

• It is the superintendent’s function to act on his Clients / Principals behalf, ensuring that the consignment is in sound condition, sampled and weighed correctly, accurate reporting, and if needed making reserves against the concerned parties

• The duty of a Superintendent is to look after the best interests of the parties to a contract and to act with neutrality, honesty and integrity at all times.

• To be the ears & eyes of the client

ACCEPTING INSTRUCTIONS FROM THE CLIENT

 Instructions should be in writing

 The superintendent will acknowledge and confirm the order, detailing the scope of work

 The file administrator will then create a work order for the inspector and for the lab

ACCEPTING INSTRUCTIONS FROM THE CLIENT

 Details of the parties – buyer/seller/receiver and their representatives

 24 hour contact number  Commodity : correct description.  GAFTA contract N° with parity  Quantity – any tolerances – (more or less / min or max)  Quality – Including testing methods  Name of the vessel  Place of Inspection  Time of arrival (e.g. ETA).  Name of vessel agents and contact telephone number.

ACCEPTING INSTRUCTIONS FROM THE CLIENT

 What certificates required; Hold Inspection, Weight, Quality, Fumigation,…

 Any specific statements you need to have on your certificate, e.g. FFHC, Free from, etc... Be aware that some of these statements require analysis.

 Destination. Important to be aware of potential quality issues.  Who is the Principal (i.e. who will pay for the service)  Who can be contacted after hours…  Copy of the (relevant parts of) LC

SOME ISSUES

 “free from…” certificates • Free from : not in the sample • “Substantially free” or “practically free” : Fit for purpose • Free from dead insects….

 SLM : Sound, Loyal and Merchantable : Organoleptic/condition

 “fit for…” certificates • IFIA minimum testing requirments

 Health certificates (no definition) • Animal origin : sanitary/veterinary certificate authorities • Plant origin : see “fit for…”

 Misrepresentation or non-sense certificates • E.g. fumigation certificates, certifying non fumigation

http://www.google.be/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.zazzle.com/not_fit_for_human_consumption_tee-235828857982213166&ei=WQ0uVYiNLc2tuQTXgYHICw&bvm=bv.90790515,d.c2E&psig=AFQjCNF_LTRQbY4t2uWbG5zWw0CTixJhGg&ust=1429167764294358

http://www.google.be/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.de-jaeger.be/?attachment_id=155&ei=gQwuVafqLMijugSQ2IDwAQ&bvm=bv.90790515,d.c2E&psig=AFQjCNGfw4YweFXAzRtv9jCCVFcg3u6_Zg&ust=1429167610051731

CERTIFICATES : HOT TOPICS

 We provide services and NOT guarantees or insurances

 A bad quality cargo will stay a bad quality cargo

 Obligation of means

 Obligation of results : Guarantee Services

CERTIFICATES : HOT TOPICS

 Certificates and reports can only record the facts as ascertained by the superintendent

 The statements made in the reports and the certificates must be substantiated

 The findings in reports and certificates are only valid for the time and place of inspection (E.g. pre-shipment)

 Certificates are worded in such way that no confusion or any risk of misleading a party, who might receive them at a later time, is made

 Certificates state the methods applied for sampling, weighing and testing (USDA/ISO…)

Supervision, Sampling and Analysis GAFTA COURSE 23/04/2019

Chris Ranschaert

SGS Group Management SA, Agriculture, Food & Life

GAFTA CONTRACTS

 The Superintendent shall ensure the samples are drawn and sealed as required by the Sampling rules 124.

 The Superintendent will supervise the weighing of the contract goods in accordance with the custom of the port or as contracted : According to the Weighing rules 123.

GAFTA CONTRACTS

 Contractual Provisions concerning “Sampling and Analysis”  Where parties have agreed to trade on GAFTA contracts, the requirements for

supervision and sampling at Ports of Loading and Discharge are contained within the standard GAFTA Sampling and Analysis clause, which reads: For ports of loading: “SAMPLING, ANALYSIS AND CERTIFICATES OF ANALYSIS- • Terms and conditions of GAFTA Sampling Rules No.124, are deemed to be

incorporated into this contract. • Samples shall be taken at time and place of loading. • The parties shall appoint superintendents, for the purposes of supervision and sampling

of the goods, from the GAFTA Register of Superintendents. • Unless otherwise agreed, analysts shall be appointed from the GAFTA Register of

Analysts.”

GAFTA

 For ports of discharge:

“SAMPLING, ANALYSIS AND CERTIFICATES OF ANALYSIS- • Terms and conditions of GAFTA Sampling Rules No.124, are deemed to be

incorporated into this contract. • Samples shall be taken at the time of discharge on or before removal from the

ship or quay, unless the parties agree that quality final at loading applies, in which event samples shall be taken at time and place of loading.

• The parties shall appoint superintendents, for the purposes of supervision and sampling of the goods, from the GAFTA Register of Superintendents.

• Unless otherwise agreed, analysts shall be appointed from the GAFTA Register of Analysts.”

GAFTA 124 SAMPLING RULES VERSION 01/09/2018

GAFTA SAMPLING

 CONDITION AND QUALITY

• Quality results basically from its growth, harvesting and, in some cases, it’s processing

– Protein, moisture, admixture, fiber content...

• Condition Is said to be determined by factors that affect it during transportation or storage

– Contamination by pesticides, weevils, (sea)water

GAFTA SAMPLING : 1 SCOPE

 For all contracts the rules apply (incorporated in the contracts)

 Sampling the goods

 Preparation of the goods

 Distribution of samples

 Analysis methods

 Tests

 Certifcation

GAFTA SAMPLING : 1 SCOPE

 Grains, feedstuffs,pulses for human consumption/feed, fishmeal, rice, related to GAFTA contracts in bulk, bags or containers.

GAFTA SAMPLING : 2 DEFINITIONS

 “Cargo Superintendent” : Indepence  “INCREMENT SAMPLES”: Samples taken direct from the

consignment of maximum 1 kilo in weight, or if taken mechanically, weight appropriate to the equipment.

 “BULK (AGGREGATE SAMPLE)”: Is the accumulation, combined total, of all the increment samples.

 “CONTRACTUAL SAMPLES”: Samples reduced from the bulk sample sealed into up to al least 3 kilograms containers each, in as many containers as required by the rules

 “ANALYSIS SAMPLES”: Samples are reduced from the contractual samples, by the laboratories, to quantities appropriate for analysis tests.

 Sample Containers: A container is defined as bottles, jars or tins with close fitting lids of bags, including PE, cotton or other suitable types of construction, which are securely tiedNEW

01/09/2018

GAFTA SAMPLING : 3 GENERAL TERMS

 3. Superintendent from the GAFTA register

 Parties are responsible to provide detailed instructions !!

 In case of absence of a superintendent

 “Sealed”

GAFTA SAMPLING : 4 METHOD OF DRAWING

 Sampling points

• Mutually agreed • Safety first • Natural light or lightening

 How much increments ?

GAFTA SAMPLING : 4 METHOD OF DRAWING

 As many as practicle and physically possible

Consignment size Tons 0-5000 5001-10,000 10,001 - 25,000 >25,000

Lot size Tons 500 1000 2500 5000

No. of increments per lot number min 20 min 30 min 40 min 50

Min bulk aggregate sample per lot Kilos 20 30 40 50

Max weight of increments Kilos 1 1 1 1

GAFTA SAMPLING : METHOD OF DRAWING

 An example

• Ship of 8000 MT • 8 lots of 1000 MT • Min 30 increments/lot of max 1 kg, but min 30 kg • 8 x 30 kg (8 bulk aggregate samples) = 240 kg of samples • Let’s say loading 400 MT/hour = 1 lot in 2,5 hour = 1 increment every 5 min

100

EXAMPLE 12000 MT

101

EXAMPLE 12000 MT

102

Example 12000 MMT

103

GAFTA SAMPLING : EXAMPLES

 Example: Four shipments (arbitration samples for each 5000 MT)  2,500 mt / 5,500 mt / 10,000 mt / 35,098 mt grain vessels, FOB terms:

2,500 5,500 10,000 35,098 (excess <250mt)  1 analysis 3 kgs in 1 bag 2 bags of 3 kg 2 bags of 3 kg 7 bags of 3 kg  1 arbitration 3 kgs in 1 bag 2 bags of 3 kg 2 bags of 3 kg 7 bags of 3 kg  1 spare 3 kgs in 1 bag 2 bags of 3 kg 2 bags of 3 kg 7 bags of 3 kg

 Total. 3 bags of 3 kgs 6 bags of 3 kgs . 6 bags of 3 kgs 21 bags of 3 kgs

104

GAFTA SAMPLING

 EQUIPMENT

 Sampling equipment (scoop, spear…) must be clean, dry, free from any possible contamination

105

GAFTA SAMPLING

http://www.google.com/imgres?imgurl=http://www.enasco.com/prod/images/products/8C/B01514WAt.jpg&imgrefurl=http://www.enasco.com/whirlpak/Sampling+Equipment/Solid_Dry+Sampling/?&sort=za&page=1&usg=__AuZrEElpFtkPI3O-yIgQ_C6knBA=&h=100&w=100&sz=2&hl=nl&start=9&tbnid=z_pdKLQkP7wYSM:&tbnh=82&tbnw=82&prev=/images?q=sampling+equipment+SCOOP&um=1&hl=nl&lr=&sa=G&tbs=isch:1&um=1&itbs=1

106

GAFTA SAMPLING

107

GAFTA SAMPLING

108

GAFTA SAMPLING

109

SAMPLING

Cross belt sampler

110

AUTOMATIC SAMPLER

111

GAFTA SAMPLING : METHOD OF DRAWING

 4. METHOD OF DRAWING SAMPLES

• Security and integrity of intermediate samples • Division of bulk aggregate samples • Reduction to the contractual sets • Possibility to pre reduce (25 %) • Sample containers shall be full • Sealed

• Bulk at loading : moving stream – nearest practicle point • Bulk at discharge : from the hold (safety !!) or nearest practicle point

(moving stream)

http://www.google.be/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.wagtechprojects.com/products/Heavy-Duty-Boerner-Divider-.html&ei=AhcuVeWgH5KLuASsp4GoAg&bvm=bv.90790515,d.c2E&psig=AFQjCNHQuhgeb7f45HGwhw7MGlNPpv1fhQ&ust=1429170286987955

112

DIVIDING

113

DIVIDERS

DIVIDERS / SIEVES

114

GAFTA SAMPLING

115

GAFTA SAMPLING

 Sampling from bags

 Increment samples shall be drawn uniformly, by a piercing spear from the top, middle and bottom of each bag : (if not possible by scoop – from the ends and middle of the bags in rotation)

 The more bags the more representative your sample

<100 bags - sample 20 bags <1000 bags – sample 50 bags

>1000 bags – sample 0,5 % or min 50 bags

116

GAFTA SAMPLING – ROAD & RAIL

 Contracts for ROAD AND RAIL TRANSPORT

 At loading : • GRAINS : (wagons or vehicles) : increment samples

to be taken by spear from 3 sampling points from each wagon or vehicle.

• FEEDINGSTUFF (wagons or vehicles) : increment samples to be taken from moving stream at outlet filling hopper by hand scoop

 At discharge : • Grain and feeding stuff increment samples by hand

scoop from moving stream at outlet wagons or vehicles

117

GAFTA SAMPLING : 4 METHOD OF DRAWING

 SAMPLING for products in BULK: • At loading of vessel:

– at the nearest practicable point to the vessel – Concurrently with the loading, from a moving stream – From conveyor, ex-silo, ex-vehicle/truck: across the

whole moving stream – If loading by grab: from the quay or barge, from the bulk,

excluding the run • At discharge of vessel:

– From various parts of the hold in a fair proportion, excluding the run. Not considered safest point !

– If not possible (or not safe) draw increment samples at the nearest practicable point to the hold, preferably from a moving stream

– By hand scoop or other mutual agreed equipment

118

GAFTA SAMPLING

Sender..................................................................................................................................................... M.V........................................................................................................................................................ From...................................................................................................................................................... To.......................................................................................................................................................... Commodity............................................................................................................................................. Bags/Bulk..............................................................................................................................................

Marks................................................................................................................................................... . Shipper/Seller/Buyer.......................................................................................................................... ..

Set No.................................................. Sample No............................................................................... Date and Place of Sealing....................................................................................................................

Quantity represented by this sample……………………………………………………………… Part Total Quantity of……………………………………………………………………………… Purpose of Sample……………………………………………………………………………………

*Arbitration (Quality/Rye Terms), Natural Weight/Analysis……………………………………. • *delete as appropriate • D/O Receiver

Quantity • B/L No. • Seals

119

GAFTA SAMPLING  6. CONTRACTUAL SAMPLES FOR ANALYSIS AND

ARBITRATION

 Arbitration Samples : 3 kg/5000 tons

 Sets of Samples : as the contract requires (3 kg / 5000 tons)

 Eg : Grain, Pulses, Seeds and Rice (exp. Malting Barley) – One set for each 5000 tons

» Sample 1: Analysis » Sample 2: Arbitration » Sample 3: Spare

Each sample packed in appropriate and sufficiently strong material that maintains the quality and condition of the sample with consideration to the type of test / analysis to be performed

 Eg : Feedstuff : 4th sample for second/third analysis

NEW 01/09/2018

120

GAFTA SAMPLING

 7. STANDING IN PROVISIONS (several receivers on a hold)

 8. DISPATCH of samples, RETENTION and analysis INSTRUCTIONS • Reduction of samples at origin • Within 14 consecutive day’s • If failed : any claim, rejection : deemed to be waived and barred.

 9. RETENTION OF SAMPLES

• 3 months (GMP+ = 6 months !)

121

GAFTA SAMPLING SECTION 2 : ANALYSIS

 1. Scope

 2. Analysis samples • Reduced from the contractual samples

 3. Analysts

 4. General • Certificates • Notices clause • Non compliance with the rules

 5. Methods of analysis (form N° 130)

122

WHEAT

http://www.google.com/imgres?imgurl=http://www.khalilpakistan.com/wheat.bmp&imgrefurl=http://www.khalilpakistan.com/Products.html&usg=__oh7HVovsqOhgC9ZD8QsXhjFy8M0=&h=500&w=500&sz=733&hl=nl&start=1&tbnid=7h5Nxbmd0EDLBM:&tbnh=130&tbnw=130&prev=/images?q=WHEAT&hl=nl&sa=G&gbv=2&tbs=isch:1&itbs=1

123

WHEAT

124

WHEAT

 Grain (Agricultural Commodities) are not a uniform commodity

 Representative sampling and assessment

 Soil & Climate – Fertile soil & temperate climate

 Grading - Based on Protein content (9-14%), based on Kernel texture (hard, semi hard, soft), based on Colour (white, amber, red)

125

UNCERTAINTY

Lot Sample Analysis

Total error

Sampling error Analytical error

Sample preparation

Sampling preparation error

126

GAFTA SAMPLING DIFFICULTIES

 Increase of particle size from center to periphery

127

GAFTA SAMPLING RULES : 2018

 6.8.3. Mycotoxins : cf Aflatoxin in Corn

 6.8.4. GMO

 SPECIFIC INSTRUCTIONS SHALL BE GIVEN TO THE SUPERINTENDENTS TO TAKE ADDITIONAL SAMPLES

 1 extra sample representing the total quantity for feedings stuffs and / or grain, Corn = 10 kg

 WHY ?

NEW 01/09/2018

128

DIFFERENT KIND OF VARIABLES

 Continuous & discontinuous variables • Continuous variable e.g. protein, moisture, oil content,…

– Each kernel has a certain value – Normal distribution – Gauss

– 2 (-1 +1) sigma : 68 % – 4 (-2 +2) sigma : 95 % – 6 (-3 +3) sigma : 99 %

http://upload.wikimedia.org/wikipedia/commons/8/8c/Standard_deviation_diagram.svg

129

EXAMPLE : CONTINEOUS VARIABLES

 20 samples tested for oilcontent

 Average: 42.375

 Standard dev. 1.12 • 68 % between 41.255 and 43.495 • 95 % between 40.135 and 44.615

42.5 42.3 43.6 43.7 41.8 42.6 42.8 42.4 40.3 42.4 40.8 41.4 43.8 42.9 43.7 40.4 44 41.1 42.6 42.4

-0.05

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0 5 10 15 20

Chart2

0.0000000031
0.0000026967
0.0005106645
0.020910188
0.185139425
0.3544529532
0.1467361107
0.0131351224
0.0002542436
0.0000010641

Sheet1

10.3	0.0641033895	12.375	mean
10.4	0.0753216252	1.1205614194	sdev
10.8	0.1325828746
11.1	0.186357504
11.4	0.2438248879	0.0320308402
11.8	0.3121028643
12.3	0.3552234603
12.4	0.3559314105
12.4	0.3559314105
12.4	0.3559314105
12.5	0.3538117814
12.6	0.3489149386
12.6	0.3489149386
12.8	0.3313126434
12.9	0.3190135877
13.6	0.1958681243
13.7	0.1769560155
13.7	0.1769560155
13.8	0.1586018308
14	0.1243992682









0.4	5.5467790262	0.0000000031
0.5	6.9334737828	0.0000026967
0.6	8.3201685393	0.0005106645
0.7	9.7068632959	0.020910188
0.8	11.0935580525	0.185139425
0.9	12.480252809	0.3544529532
1	13.8669475656	0.1467361107
1.1	15.2536423221	0.0131351224
1.2	16.6403370787	0.0002542436
1.3	18.0270318352	0.0000010641

Sheet1

Sheet2

Sheet3

130

AN EXAMPLE

131

EXAMPLE : DISCONTINEOUS VARIABLES

• Discontinuous (discrete) variables – On/Off variables: e.g. damaged grains, GMO,… – Binomial distribution / Poisson distribution

132

AN EXAMPLE

 1000 balls : 980 white + 20 black (= 2%) Sample 10 balls

– Chance to find 0 black balls: 81.71 % – 1 16.67 – 2 1.53

Sample 100 balls – Chance to find 0 black balls: 13.26 % – 1 27.06 – 2 27.34 – 3 18.22 – 4 9.02 – 5 3.53

0.05

0.1

0.15

0.2

0.25

0.3

0 1 2 3 4 5 6

Chart4

0.1326195559

0.2706521549

0.2734139116

0.182275941

0.0902079912

0.0353468047

0.0114215866

Sheet1

5901 20.31 20.22 20.27 0.78
5902 19.71 19.68 19.70 -0.99
5903 20.32 20.30 20.31 0.92
5904 20.42 20.52 20.47 1.42
5905 20.10 20.01 20.06 0.13
5906 19.90 19.87 19.89 -0.40
5907 19.97 19.77 19.87 -0.45
5908 20.57 20.58 20.58 1.74
5909 20.25 20.21 20.23 0.67
5910 19.57 19.44 19.51 -1.58
5911 20.42 20.50 20.46 1.39
5912 20.26 20.29 20.28 0.81
5913 19.96 19.95 19.96 -0.18
5914 20.08 20.08 20.08 0.21
5915 19.57 19.49 19.53 -1.50
5916 20.50 20.62 20.56 1.70
5917 19.61 19.66 19.64 -1.18
5918 19.96 19.96 19.96 -0.17
5919 19.40 19.47 19.44 -1.80
5920 20.44 20.41 20.43 1.28
5921 18.83 18.47 c 18.65 -4.24
5922 19.89 19.83 19.86 -0.48
5923 20.43 20.39 20.41 1.23
5924 20.03 20.15 20.09 0.24
5925 19.50 19.48 19.49 -1.63
5926 19.75 19.78 19.77 -0.77
5927 19.60 19.58 19.59 -1.32
5928 19.91 19.97 19.94 -0.23
5929 20.04 19.94 19.99 -0.07
5930 19.99 20.06 20.03 0.03
5931 19.80 19.90 19.85 -0.51
5932 19.46 19.49 19.48 -1.68
5933 19.95 19.98 19.97 -0.15
5934 19.38 19.44 19.41 -1.88
5935 19.96 19.92 19.94 -0.23
5937 20.03 20.04 20.04 0.07
5939 20.27 20.25 20.26 0.76
8
5940 20.32 20.28 20.30 0.89
5941 20.40 20.40 20.40 1.20
5942 19.39 19.35 19.37 -2.00
5943 20.29 20.25 20.27 0.80
5944 21.59 21.64 g 21.62 4.98
5945 19.97 19.90 19.94 -0.25
5946 20.48 20.56 20.52 1.57
5947 20.04 20.00 20.02 0.02
5948 20.09 19.76 c 19.93 -0.28
5949 19.98 19.90 19.94 -0.23
5950 23.22 23.30 g 23.26 10.09
5951 19.10 19.40 c 19.25 -2.37
5952 19.74 19.90 19.82 -0.60
5953 19.68 19.70 19.69 -1.01
5954 20.01 20.03 20.02 0.02
5955 19.82 19.84 19.83 -0.57
5956 20.42 20.26 20.34 1.01
5957 20.30 20.38 20.34 1.01
5958 19.88 20.01 19.95 -0.21
5959 19.70 19.76 19.73 -0.88
5960 20.16 20.26 20.21 0.61
5961 20.55 20.62 20.59 1.77
5962 21.48 21.54 g 21.51 4.65
5963 20.00 20.00 20.00 -0.04
5964 20.14 19.97 20.06 0.13
5965 19.89 19.95 19.92 -0.29
5966 20.15 20.08 20.12 0.31
5967 20.34 20.38 20.36 1.08
5968 19.82 19.89 19.86 -0.49
5969 18.57 18.97 c 18.77 -3.87

Sheet2

5901 20.31 20.22 20.27 0.78
5902 19.71 19.68 19.70 -0.99
5903 20.32 20.30 20.31 0.92
5904 20.42 20.52 20.47 1.42
5905 20.10 20.01 20.06 0.13
5906 19.90 19.87 19.89 -0.40
5907 19.97 19.77 19.87 -0.45
5908 20.57 20.58 20.58 1.74
5909 20.25 20.21 20.23 0.67
5910 19.57 19.44 19.51 -1.58
5911 20.42 20.50 20.46 1.39
5912 20.26 20.29 20.28 0.81
5913 19.96 19.95 19.96 -0.18
5914 20.08 20.08 20.08 0.21
5915 19.57 19.49 19.53 -1.50
5916 20.50 20.62 20.56 1.70
5917 19.61 19.66 19.64 -1.18
5918 19.96 19.96 19.96 -0.17
5919 19.40 19.47 19.44 -1.80
5920 20.44 20.41 20.43 1.28
5921 18.83 18.47 c 18.65 -4.24
5922 19.89 19.83 19.86 -0.48
5923 20.43 20.39 20.41 1.23
5924 20.03 20.15 20.09 0.24
5925 19.50 19.48 19.49 -1.63
5926 19.75 19.78 19.77 -0.77
5927 19.60 19.58 19.59 -1.32
5928 19.91 19.97 19.94 -0.23
5929 20.04 19.94 19.99 -0.07
5930 19.99 20.06 20.03 0.03
5931 19.80 19.90 19.85 -0.51
5932 19.46 19.49 19.48 -1.68
5933 19.95 19.98 19.97 -0.15
5934 19.38 19.44 19.41 -1.88
5935 19.96 19.92 19.94 -0.23
5937 20.03 20.04 20.04 0.07
5939 20.27 20.25 20.26 0.76
8
5940 20.32 20.28 20.30 0.89
5941 20.40 20.40 20.40 1.20
5942 19.39 19.35 19.37 -2.00
5943 20.29 20.25 20.27 0.80
5944 21.59 21.64 g 21.62 4.98
5945 19.97 19.90 19.94 -0.25
5946 20.48 20.56 20.52 1.57
5947 20.04 20.00 20.02 0.02
5948 20.09 19.76 c 19.93 -0.28
5949 19.98 19.90 19.94 -0.23
5950 23.22 23.30 g 23.26 10.09
5951 19.10 19.40 c 19.25 -2.37
5952 19.74 19.90 19.82 -0.60
5953 19.68 19.70 19.69 -1.01
5954 20.01 20.03 20.02 0.02
5955 19.82 19.84 19.83 -0.57
5956 20.42 20.26 20.34 1.01
5957 20.30 20.38 20.34 1.01
5958 19.88 20.01 19.95 -0.21
5959 19.70 19.76 19.73 -0.88
5960 20.16 20.26 20.21 0.61
5961 20.55 20.62 20.59 1.77
5962 21.48 21.54 g 21.51 4.65
5963 20.00 20.00 20.00 -0.04
5964 20.14 19.97 20.06 0.13
5965 19.89 19.95 19.92 -0.29
5966 20.15 20.08 20.12 0.31
5967 20.34 20.38 20.36 1.08
5968 19.82 19.89 19.86 -0.49
5969 18.57 18.97 c 18.77 -3.87

Sheet3

2027	20.27	12.66875
1970	19.7	12.3125
2031	20.31	12.69375
2047	20.47	12.79375
2006	20.06	12.5375
1989	19.89	12.43125
1987	19.87	12.41875
2058	20.58	12.8625
2023	20.23	12.64375
1951	19.51	12.19375	0	0.1326195559
2046	20.46	12.7875	1	0.2706521549
2028	20.28	12.675	2	0.2734139116
1996	19.96	12.475	3	0.182275941
2008	20.08	12.55	4	0.0902079912
1953	19.53	12.20625	5	0.0353468047
2056	20.56	12.85	6	0.0114215866
1964	19.64	12.275
1996	19.96	12.475
1944	19.44	12.15
2043	20.43	12.76875
1865	18.65	11.65625
1986	19.86	12.4125
2041	20.41	12.75625
2009	20.09	12.55625
1949	19.49	12.18125
1977	19.77	12.35625
1959	19.59	12.24375
1994	19.94	12.4625
1999	19.99	12.49375
2003	20.03	12.51875
1985	19.85	12.40625
1948	19.48	12.175
1997	19.97	12.48125
1941	19.41	12.13125
1994	19.94	12.4625
2004	20.04	12.525
2026	20.26	12.6625
2030	20.3	12.6875
2040	20.4	12.75
1937	19.37	12.10625
2027	20.27	12.66875
2162	21.62	13.5125
1994	19.94	12.4625
2052	20.52	12.825
2002	20.02	12.5125
1993	19.93	12.45625
1994	19.94	12.4625
2326	23.26	14.5375
1925	19.25	12.03125
1982	19.82	12.3875
1969	19.69	12.30625
2002	20.02	12.5125
1983	19.83	12.39375
2034	20.34	12.7125
2034	20.34	12.7125
1995	19.95	12.46875
1973	19.73	12.33125
2021	20.21	12.63125
2059	20.59	12.86875
2151	21.51	13.44375
2000	20	12.5
2006	20.06	12.5375
1992	19.92	12.45
2012	20.12	12.575
2036	20.36	12.725
1986	19.86	12.4125
1877	18.77	11.73125

	20.0588059701
	0.6183005114

Sheet3

133

SAMPLING FOR MYCOTOXINS

 Non-uniform distribution Aflatoxine (ppb)

Aflatoxine avg. 10 ppb

0 0 0 0

0 200 0 0

0 0 0 0

134

IMPORTANT FACTS ABOUT SAMPLING

 Lessons to learn

• Perform correct, representative sampling, with high amount of increments and use a boerner or riffle divider for sample division to make the composites.

• Don’t go for anything less than GAFTA rules ! • Lab portion for homogenization as high as practically possible,

should never be less than ca. 500 g, preferably 1 kg or more

135

SAMPLING & CERTIFICATES

 GAFTA sampling

 The superintendent shall ensure the samples are drawn and sealed as required by the Sampling rules 124.

 Included in the certificate

 Sampling: “Representative sampling of the cargo was performed at regular intervals throughout entire loading/discharging at the nearest practicable point of the vessel (as applicable) as per GAFTA 124 sampling rules. One composite sample of the total consignment proportionally mixed was submitted for analysis in a reputable laboratory and we report the average actual result as follows: XXX”

136

SAMPLING & CERTIFICATES

 Sampling from a ship’s hold, pile in stock or a silo’s cell • Not representative sampling • Also for packed goods • GAFTA Sampling Rules : taken at the time and place of loading

GAFTA 123 WEIGHING RULES VERSION 2010

London 23/04/2019

Chris Ranschaert

SGS Group Management SA – Agriculture, Food & Life –

138

WEIGHING – WHY WEIGH ?

 WEIGHING: THE OBJECTIVE • The value of a consignment in bulk is determined by its

grade and weight.

 DETERMINATION OF COMMERCIAL WEIGHT • Payment of material costs depend directly on the results

obtained, • Weight is to be determined by weighing upon scales that

are known to be accurate within the limits of tolerance stated in scale specifications

• Weighing tolerances must be in accordance with the legal requirements for accuracy of commercial weigh scales.

• All weighing differences should be within acceptable tolerances.

139

WEIGHT CONTROL : ASCERTAINMENT OF WEIGHT

 WEIGHING SCALES

 Only scales that have been calibrated against a known national standard can be used. Owners of such scales are responsible for ensuring that periodical calibrations are performed by a competent person and they must be in possession of the stamped and signed calibration certificates. For simplicity:

 Accuracy of the scale at time of static calibration must be <0.05%

 Accuracy of the scale when in dynamic working condition must be <0.1%

 Commercial scales should be calibrated at least every two years or when necessary as per local rules. Many country calibrations are valid for one year.

140

WEIGHT CONTROL

 Any weighing – weighbridge or mechanical automatic hopper scales. • Prior to the commencement of loading and/or discharge, the

weighing equipment should be balanced and/or zeroed when empty .

 Non-Automatic weighing machines • Weighbridge- Road vehicles • Weighbridge – Rail wagons

 Automatic weighing equipment • Non-continuous automatic weighing.

– Within this classification are many bulk weighing machines which in turn are classified as either non-continuous weighing such as mechanical electronic hopper machines in Silos

• Continuous automatic weighing machines – Equipment which requires no human intervention., or continuous

weighing machines such as continuously totalizing conveyor weighers (Belt weighers)

141

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 GAFTA 123 WEIGHING RULES

 Effective 01 September 2010

 For all contracts incorporating the terms and conditions of the Grain & Feed Trade Association (GAFTA), unless mutually agreed otherwise.

142

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 GENERAL

 Weighing to be done by

• Dock authorities • Public sworn weighers / superintendents • Recognized weighers by local public • Customs of the port

 Full access  All goods being loaded or discharged are to pass through the weighing

equipment in a secure route.

 Calibration certificate to be available and valid

143

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 Weighing equipment : clean and empty

 All sweepings and/or spillage to be uplifted and weighed, or an allowance mutually agreed

 All printouts or tickets of any weighing shall be at the disposal

 If any discrepancies • checks not be able to be made, or denied, • found to be at fault • parties to the contract are to mutually agree upon the loaded/discharged

weight. • arbitration

144

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 DISCONTINUOUS WEIGHERS (MECHANICAL OR AUTOMATIC HOPPER SCALES)

• Weighing equipment should be balanced and/or zeroed when empty • The right to secure the weighing equipment • Static checks, where appropriate, to be performed • Checking on a 2e scale with same commodity

145

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

146

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

147

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

Hopper scale Train unit

Load cells

148

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 CONTINUOUS TOTALISING AUTOMATIC WEIGHING INSTRUMENTS (BELT WEIGHERS)

 Belt weighing is not considered a wholly accurate method of weighing.  In the absence of other systems OK  Weighing equipment can be test calibrated for accuracy  Uninterrupted continuous flow.  any effects of variation in the continuous flow can be accurately recorded.  Method of weighing shall be stated on the weighing certificate.

149

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

150

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 DRAFT SURVEYS

 Not wholly accurate methods of establishing weights

 Not acceptable for contractual purposes, unless both parties to the contract explicitly accept this method in writing

151

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 DAMAGED GOODS

 Weight shall be determined on the basis of an analysis made of the samples of the damaged and undamaged part of the goods.

 Damage segregation

152

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 WEIGHBRIDGE - ROAD VEHICLES & RAIL WAGONS

 Weighing equipment should be balanced and/or zeroed when empty

 Checked during the operation  Static checks, where appropriate, to be performed  All road vehicles over a weighbridge should be

weighed gross and tare.  Double axle and Tri-axle weighing will not be

accepted.

153

WEIGHT CONTROL : GAFTA 123 WEIGHING RULES

 BAGS

154

WEIGHT CONTROL

 Why Losses

 We have studied two forms of loss that are particularly relevant in the case of bulk grain and or oil seed shipments .

 1) Apparent Losses • These could be errors or inaccuracy of measurement during draft

surveys, on weighbridges, or in silo weightings.

 2) Real Losses • These include loss due to spillage or dust, plus any loss of

moisture content in the cargo, which could be affected by delays in the voyage, high or low ambient air or sea temperature and differing relative humidity's..

• Loss of weight in bulk grains may occur by the simple process of evaporation or drying out and respiration This is due to the inherent nature of grain.

155

WEIGHT CONTROL

 SUMMARY OF WEIGHT LOSSES

• 1. Normal "in service" inaccuracy of loading/discharging scales.

• 2. Natural loss of cargo due to variation of moisture, heat transfer, inherent nature of the cargo

• 3. Real losses of grain between silo and vessel at loading, and between vessel and silo scale at discharge, i.e.

sweepings/dockage, and -including "Shrinkage".

156

THE CUSTOMARY TRADE LOSS

 Accuracy of measurement of bulk cargoes. • Must be accurate as practical within acceptable confidence limits. • Due to complexities in accurate measurement differences of

0.5% are regularly termed the “Customary Trade Loss” or ”Shrinkage Allowance” in grain as well other bulk cargoes.

 Two forms of loss are particularly relevant in bulk cargoes. • Apparent Loss. Due inaccuracies in scales/draft survey • Real Losses. Due handling losses, spillage or dust,

moisture loss. • A third form of loss, not recognized, could include the

manipulation of scales, figures or calibrations.

 All and any loss in bulk commoditiy shipments should be under the ”Customary Trade Loss’ of 0.5%

157

LOSS ?

158

WEIGHT SHORTAGES : POSSIBLE CONTRIBUTING FACTORS

SHORTAGES

Scale calibrationMethods

Lack of EquipmentPeople

Bad handling of transportation

Natural Losses and Real losses

Length of Chain

SecurityNon Ethical Players

Weather conditions

Improper calibration

Dynamic to static effects

‘Unknown’ technical issues

External factors

Frequency of calibration

Cost of security

Lack of focus on security

Lack of coordination with port authorities

Silo /Plant operation and lack of security in silo / plant areas

Weigh (filtered dust)

Non-standardization of D/S method or lack of implemenation

Scales to D/S differences

Absence of implementation of standardized working

procedures

Geography

Number of origins

Simultaneous loading

Laptop, hydrometer, water paste, tapes

External documents (barge, vessel data)

Cargo

Handling

Equipment

Moisture

Training Cost

Expertise

Corruption

Internal audits

Overtime

Leakage

Customary trade losses

Money

Frightened to loose a job

Compensate bonus losses

Client pressures

Commercial consideration

Maintain good relations

Doing the best for clients

Multiple handling

Theft

Lack of port security

159

@Gaftaworld

Break

@Gaftaworld

Sampling Exercise & Feedback

@Gaftaworld

Evening networking Dinner venue

The Crypt, Ely Place, Holborn Time

17:30 – 21:00 Directions: Metropolitan/Circle Lines from Great Portland Street Station to Farringdon Station, then a 5 minute walk to Ely Place.

Central Line from Oxford Circus Station to Chancery Lane Station, then a 5 minute walk to Ely Place

@Gaftaworld

Summary Jonathan Waters

LLB, LLM, MCIARB, CMC Registered Mediator, Barrister

General Counsel

Gafta

Gafta GPD�Trade Foundation Course
Welcome and introduction�
Housekeeping
Basic principles of contracting�
English Contract Law
Slide Number 6
Slide Number 7
Slide Number 8
Contract Formation
�Why Gafta Contracts?�
Slide Number 11
Slide Number 12
Slide Number 13
Slide Number 14
Slide Number 15
Slide Number 16
Slide Number 17
Slide Number 18
Basic contractual obligations and contractual terms�
Slide Number 20
Slide Number 21
Slide Number 22
Slide Number 23
Slide Number 24
Slide Number 25
Identifying a Condition or Warranty
Slide Number 27
Slide Number 28
Intermediate Terms
Slide Number 30
Which Approach?
Slide Number 32
Sale of Goods Act 1979 (Refresher)
Description – (S13)
Satisfactory Quality
Certificate Final (1)
Certificate Final (2)
Excluding the Sale of Goods Act
Refreshments�
Gafta Contracts: An introduction�
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Lunch�
Responsibility and risk� ��
What do we mean by Risk and Responsibility?
Categories of Risk
What is a Contract?
FOB
FOB Buyer
FOB Seller
CIF
FOB
CIF
Risk in the Goods
Risk in the Goods
Shipment Risks
Shipment Risks
Documentary Risks
Documentary Risks
Documentary Risks
Legal & Political Risks
Execution Risks
Market Risks
Instruction for Supervision
�ISSUING INSTRUCTIONS : Ensuring clarity and best practice��
RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS
RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS
RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS
RULES AND CODE OF CONDUCT FOR SUPERINTENDENTS
ACCEPTING INSTRUCTIONS FROM THE CLIENT
ACCEPTING INSTRUCTIONS FROM THE CLIENT�
ACCEPTING INSTRUCTIONS FROM THE CLIENT
ACCEPTING INSTRUCTIONS FROM THE CLIENT
ACCEPTING INSTRUCTIONS FROM THE CLIENT
SOME ISSUES
Slide Number 83
Slide Number 84
CERTIFICATES : HOT TOPICS
CERTIFICATES : HOT TOPICS
Slide Number 87
GAFTA CONTRACTS
GAFTA CONTRACTS
GAFTA
GAFTA 124 SAMPLING RULES
GAFTA SAMPLING
GAFTA SAMPLING : 1 SCOPE
GAFTA SAMPLING : 1 SCOPE
GAFTA SAMPLING : 2 DEFINITIONS
GAFTA SAMPLING : 3 GENERAL TERMS
GAFTA SAMPLING : 4 METHOD OF DRAWING
GAFTA SAMPLING : 4 METHOD OF DRAWING
GAFTA SAMPLING : METHOD OF DRAWING
EXAMPLE 12000 MT
EXAMPLE 12000 MT
Example 12000 MMT
GAFTA SAMPLING : EXAMPLES
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING
SAMPLING
AUTOMATIC SAMPLER
GAFTA SAMPLING : METHOD OF DRAWING
DIVIDING
Slide Number 113
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING – ROAD & RAIL
GAFTA SAMPLING : 4 METHOD OF DRAWING
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING
GAFTA SAMPLING SECTION 2 : ANALYSIS
WHEAT
WHEAT
WHEAT
UNCERTAINTY
GAFTA SAMPLING DIFFICULTIES
GAFTA SAMPLING RULES : 2018
DIFFERENT KIND OF VARIABLES
EXAMPLE : CONTINEOUS VARIABLES
AN EXAMPLE
EXAMPLE : DISCONTINEOUS VARIABLES
AN EXAMPLE
SAMPLING FOR MYCOTOXINS
IMPORTANT FACTS ABOUT SAMPLING
SAMPLING & CERTIFICATES
SAMPLING & CERTIFICATES
GAFTA 123 WEIGHING RULES
WEIGHING – WHY WEIGH ?
WEIGHT CONTROL : ASCERTAINMENT OF WEIGHT�
�WEIGHT CONTROL�
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL : GAFTA 123 WEIGHING RULES
WEIGHT CONTROL
WEIGHT CONTROL
THE CUSTOMARY TRADE LOSS�
LOSS ?
WEIGHT SHORTAGES : POSSIBLE CONTRIBUTING FACTORS
Slide Number 159
Break�
Sampling Exercise & Feedback�
Evening networking
Summary�