Recent Developments in Maritime Environmental Law (May 2012 edition)

May 30, 2012


We are pleased to provide this quarterly update on developments in the areas of maritime environmental law, regulation, compliance, and enforcement.

U.S. EPA May Pursue Maritime GHG Rules

The U.S. Environmental Protection Agency (“EPA”) has until June 18th to decide whether it will pursue “endangerment” findings that would pave the way for regulation of greenhouse gases (“GHG”) from ships, aircraft, and non-road engines (based on a deadline set by a judge in a lawsuit brought by the Center for Biological Diversity and other groups). While the EPA argued that it would prefer to establish aircraft and ship emission controls via international negotiations (in the case of ships, through the International Maritime Organization, or “IMO”), the environmental organizations assert that international negotiations have not proceeded, and the EPA should take action without waiting for international consensus.

The IMO has been making progress with regard to GHG control, both through its efficiency in vessel design programs and through operational measures aimed at reducing emissions (including use of slower cruising speeds). These programs put maritime emission control efforts ahead of aviation control efforts, which some view as paving the way for U.S. GHG regulations.

Marine Renewable Energy Developments

With both the Obama Administration and many states setting goals for clean electricity production, interest in offshore wind (“OSW”) and tidal projects is increasing. It is anticipated that the first-ever commercial leases will be entered into this year for wind power along the Atlantic Seaboard and tidal energy in New York Harbor.

The federal government has been active in the Atlantic Outer Continental Shelf areas identifying Wind Energy Areas (“WEAs”) that are best suited for wind development. This process has included establishing task forces comprising federal, state, local, and tribal representatives to resolve issues related to military, shipping, port, and existing uses in the areas.

To date, OSW projects have not demonstrated that they can be profitable absent government subsidies (given the higher construction, operating, and maintenance costs of such systems). In addition to currently-unattractive economics, the multi-jurisdictional permitting process is also seen by some as an impediment to development of marine renewables. Finally, it is not clear that consumers will support the higher cost of renewable electricity.

National Park Service, Environmental Groups Support Great Lakes Ballast Discharge Limits

The National Park Service and environmental groups are supporting effluent limits for ballast water discharges from Great Lakes ships built before January 1, 2009. Letters sent to the EPA argue that excluding such ships from requirements to meet discharge limits may spread invasive species from one part of the ecosystem in the lakes to other areas.

The effluent discharge limits proposed by the EPA are currently applicable only to ships built after January 1, 2009 that are 79 feet and longer. In arguing for an extension of the requirement to ships built before January 1, 2009, the groups and the Park Service argue that the vessels do not introduce new non-indigenous invasive species; rather, they transport those species to portions of the ecosystem wider and faster than they would through the normal process of migration.

Under the five-year draft vessel permit, vessels built after January 1, 2009, and all other ships that are at least 79 feet in length, weigh at least 300 gross tons, and have the capability to discharge at least eight cubic meters of ballast water will have to meet the technology-based effluent limits for ballast water once the permit is finalized.

IMO Reports on MEPC Meeting

The IMO’s Marine Environment Protection Committee (“MEPC”) met in London from February 27th to March 2nd, and, while unable to reach agreement on proposals for market-based measures (“MBM”) designed to reduce greenhouse gas emissions, progress was made in other areas.

The agenda included MBM proposals that place a levy on carbon dioxide emissions from international shipping or establish an emission cap-and-trade system, both aimed at moving the world’s shipping industry toward consensus on reducing greenhouse gas emissions. According to the IMO, international shipping accounts for 870 million metric tons of carbon dioxide, about 2.7 percent of total global CO2 emissions.

Progress by the MEPC included the adoption of guidelines to support the mandatory Regulations on Energy Efficiency for Ships in MARPOL Annex VI, which calls for the reduction of harmful emissions from ships. Other guidelines were approved for recycling of ships, and final approvals were given to several ballast water management systems.

Sewage No-Discharge Zone Set for California Coast

The EPA has established a no-discharge zone for cruise ships and other large vessels along 1,624 miles of the California coast. In a rule that took effect March 28th, large ships are barred from releasing untreated sewage within three miles of the coast. This rule applies to any oceangoing vessels over 300 gross tons with sewage holding tanks. EPA estimated the final rule will prevent an estimated 22.5 million gallons of treated sewage annually from being dumped into California waters.

Canada Issues Regulations on Discharges from Ships

Canada has published final regulations addressing pollutant discharges from ships. The Vessel Pollution and Dangerous Chemicals Regulations, which apply to all vessels operating in Canadian waters and Canadian vessels operating anywhere in the world, are based on the requirements established under the International Convention for the Prevention of Pollution from Ships (MARPOL) and the International Convention on the Control of Harmful Anti-fouling Systems on Ships.

Issued under the Canada Shipping Act, the regulations are intended to consolidate previous rules on ship-source pollution and transportation of dangerous goods and enable the Canadian government to meet its international commitments on marine environmental protection. Generally, the existing requirements for reporting of pollution incidents, vessel construction, equipment, inspection, certification, record-keeping, and operations are maintained. New provisions require certain vessels to have fuel tanks in a protected location. Non-propelled barges must have a shipboard oil pollution emergency plan if carrying oil in bulk. Supervisors of loading or unloading facilities, rather than a vessel’s supervisor, are responsible for operations involving oil or noxious liquid substances.

In a related development, Transport Canada has signed a memorandum of cooperation with Green Marine, a voluntary industry group comprising U.S. and Canadian interests, to enhance the North American marine shipping sector’s environmental performance. Specifically, Transport Canada and Green Marine intend to work together to enhance environmental performance benchmarking, collect environmental data, develop environmental performance measurement standards, and identify and promote best practices. Comprising ship owners, port authorities, terminals, and shipyards, Green Marine is interested in improving upon existing standards in the areas of greenhouse gases, air emissions, cargo waste management, port operation, and environmental leadership.

European Commission Proposes New Law on Ship Dismantling

Under a new law proposed by the European Commission, European Union (“EU”) ship owners would be permitted to send obsolete vessels for dismantling in shipbreaking yards in developing countries.

Under current law, old EU ships to be scrapped can legally be sent only to Organisation for Economic Co operation and Development (“OECD”) countries for dismantling. These countries do not include Asian countries where much of the world’s dismantling work is carried out. As a result, shipowners often sell vessels to non-EU owners or reflag them under non-EU flags prior to sending them for breaking.

The EU proposal would allow ships to be legally exported to non-EU shipyards if the shipyards were included on a list of authorized facilities that meet certain environmental and safety requirements. Authorization would be based on applications by shipyard owners. Under the proposal, the last EU owner of a ship would be held liable for compliance with the law if the vessel was scrapped within six months after its sale.

Recently Assessed Fines and Penalties

California Enforces Its Maritime Environmental Laws

California air quality officials have levied fines totaling $110,000 for alleged failure to adhere to that state’s maritime fuel requirements. The fines were levied against two marine shipping companies whose vessels failed to switch to cleaner-burning fuels while sailing within 24 nautical miles of the California coastline. The two companies, Dojima Marine of Japan and Korkyra Shipping of Croatia, have each agreed to pay $55,000 to resolve alleged violations of low-sulfur fuel standards for oceangoing vessels . These standards were adopted by the California Air Resources Board (“ARB”) in 2008. According to the ARB, Dojima Marine and Korkyra Shipping acknowledged that their ships had operated in California waters using bunker fuel rather than the required marine distillate, which is considered a cleaner-burning fuel by the ARB.

Shipping Company Ordered to Pay $2 Million

The U.S. District Court for the Eastern District of Louisiana approved a plea agreement between the Department of Justice and Ilios Shipping Co. ordering it to pay a criminal penalty of $2 million. The penalty includes a $250,000 payment to the National Fish and Wildlife Foundation to restore marine and aquatic resources in the area.

The Greek-owned shipping company pleaded guilty in December 2011 to violating the Act to Prevent Pollution from Ships of 2000 and to obstructing justice during an investigation.

Between April 2009 and April 2011, the M/V Agios Emilianos, a 36,573-ton bulk grain carrier, allegedly discharged oily bilge waste and sludge directly into the ocean without the use of required pollution prevention equipment. Other allegations included intentionally covering up the illegal discharges by falsifying the vessel’s oil record book and destroying evidence.