Stage Set for ECA Crackdown
Jon Waldron, partner at Blank Rome, was recently interviewed by Tradewinds regarding the U.S. Coast Guard's accusations against a Japanese bulker. Full article below:
The US Coast Guard (USCG) has accused a bulker operated by Toyo Kaiun of Japan of violating strict regulations designed to reduce air pollution at sea.
The allegations follow the detention of the 32,300-dwt King Yukon (built 2009), which was held in New Orleans after port inspectors determined the ship had failed to switch to low-sulphur fuel when it entered an environmentally sensitive zone known as the North American emission control area (ECA).
Under Annex VI of the International Convention for the Prevention of Pollution from Ships (Marpol), vessels sailing within 200 nautical miles of the US coast are required to burn bunkers that boast a sulphur of no more than 1%.
According to the USCG’s latest port detention report inspectors who interviewed the captain and chief engineer of the King Yukon found that the duo must have been unaware of regional ECA regulations because there had been compliant fuel oil readily available for use on board.
When revised rules governing sulphur limits were implemented in August of last year, the USCG and Environment Protection Agency (EPA) pledged to go easy on violators provided they could prove that efforts were made to secure low-sulphur fuel prior to entering the ECA.
At the time, the EPA told operators: “Marpol Annex VI anticipates the possibility that despite your best efforts to obtain compliant fuel oil, you may be unable to do so, and the US has the authority to take into account all relevant circumstances to determine the appropriate action to take, including not taking control measures.”
If the government were to take legal action against Toyo Kaiun, Eastern Cross Shipping, the owner of the King Yukon, or the manager, Aboitiz Jebsen, it could mark the beginning of a broader crack down, according to Jonathan Waldron, a partner at US law firm Blank Rome.
“Violations to Marpol Annex VI are subject to criminal violations for intentional violations and severe civil penalties for other violations,” he said when asked about possible penalties. “In addition, the Coast Guard has the discretion to detain vessels if it determines the violations pose an unreasonable threat to the environment or the vessel is unfit to proceed to sea.
“Although we have often seen action by the Coast Guard to pursue sanctions for Marpol violations this case seems to confirm the Coast Guard is now also focusing on Annex VI violations now that these new requirements have been in place for awhile on the basis that mariners should be expected to understand and comply with the new requirements.”
Since the King Yukon is the first ship to be cited for a sulphur content violation in the US there is a great deal of uncertainty about how the nation will police its ECA but Waldron and many of his peers say penalties will likely mirror those applied in the prosecution of oily-water-discharge cases.
While some environmental advocates have criticised regulators for failing to monitor ship emissions more closely, others believe the USCG and EPA are already stretched far too thin and should focus their attention on issues related to safety.
Shipowners are quick to point out that a recent study by the UK P&I Club, a leading protection-and-indemnity insurer, found strong correlations between low-sulphur fuel and incidents of engine failure and power outages.
They note that fuel storage and the process of switching presents technical challenges and say that the price of ECA compliant fuel is often higher than the various alternatives, which is particularly worrisome to operators that are struggling to outlast the worst downturn in recent memory.
"Stage Set for ECA Crackdown," by Aaron Kelley originally appeared in the March 5, 2013 edition of Tradewinds. For more information, please visit www.tradewindsnews.com.
Reprinted with permission from Tradewinds.