The UK P&I Club issued a Knowledge bulletin regarding the stepped up enforcement in the North American ECA.
In a new enforcement initiative, the United States Environmental Protection Agency (EPA), in cooperation with the United States Coast Guard (USCG), has boarded vessels to collect bunker samples to determine whether the vessels’ fuel sources meet the 1.0% fuel oil sulphur limit applicable within the North American Emissions Control Area (ECA).
The EPA also disclosed that it has been “experimenting” with vessel flyovers to assess vessel smokestack plumes for the same purpose.
The EPA’s unprecedented action, coming on the heels of its issuance of administrative subpoenas to several large companies operating ships within the North American ECA, announced stepped up efforts to enforce low sulphur fuel requirements within the North American ECA. Until this recent initiative, EPA and USCG officials seemed content to simply monitor compliance efforts by reviewing ECA-related records and documents such as Bunker Delivery Receipts during Port State Control inspections. These joint EPA/USCG initiatives to enforce fuel standards should serve as a warning to Club’s Members operating within the North American ECA. The commercial and legal consequences of a failure to comply with the ECA’s fuel oil sulphur limits – or the commercial and legal consequences, even if the United States government has only “reasonable cause” to believe that vessels failed to comply with the ECA’s fuel oil sulphur limits – are potentially severe.
The International Convention for the Prevention of Pollution from Ships (“MARPOL”) limitsreducedthe sulphur content of fuel oil used by vessels to 1.0% in specially designated areas such as the North American ECA, which extends 200 miles from the United States coast. MARPOL, however, is not self-executing. In the United States, MARPOL is implemented through the Act to Prevent Pollution from Ships (“APPS”), which supplements existing civiland criminal legal authorities vested in EPA and the USCG under the Federal Clean Air and Federal Clean Water Acts. On 1st January 2015, the sulphur limit of fuel oil used by vessels within the ECA will be reducedtheto 0.10% and federal authorities in the United States have given no indication that the compliance date will be extended or ignored. Indeed, federal officials have noted the importance of the fuel standards to air quality control issues that continue to plague U.S. ports despite significant controls already in place for land-based mobile and stationary sources.Thus, enforcement of the standards on vessel air pollution is seen as a priority, particularly on the West coast, in the ports of Los Angeles and Long Beach.
APPS gives the USCG and, through a Memorandum of Understanding, the EPA broad authority to investigate potential MARPOL violations; it also gives the USCG and United States Customs and Border Protection (“CBP”) broad authority to detain vessels during the course of investigations. APPS, for example, authorizes the government, upon “receipt of evidence that a violation has occurred,” to issue subpoenas requiring production of witnesses, documents, and other evidence, so that the United States government can further investigate. Understand that, pursuant to the EPA’s Interim Guidance on the Non-Availability of Compliant Fuel Oil for the North American Emissions Control Area, companies are encouraged to voluntarily disclose instances in which their vessels cannot obtain compliant fuel oil because it is not available. Although EPA encourages voluntary disclosures, it carefully clarifies that “the filing of a Fuel Oil Non-Availability Report [‘FONAR’] does not mean your ship is deemed to be in compliance … .” In other words, the FONAR itself is evidence of a violation and, as recently seen, a basis to issue an investigative subpoena.
APPS also authorizes the United States to refuse or revoke a vessel’s clearance to proceed from a port or place in the United States if “reasonable cause exists to believe” the vessel violated the ECA. Like any other detention, this action could have severe commercial and legal consequences. APPS also provides that the USCG “may” instruct CBP to grant clearance “upon the filing of a bond or other surety satisfactory to the Secretary”. But a recent Opinion published by the United States District Court for the District of Columbia highlights the onerous conditions the government can demand as a condition to a vessel’s release.
Beyond investigations, APPS violations can have many additional commercial and legal consequences. For example, APPS expressly authorizes the United States to assess civil penalties in an amount up to $25,000 for each violation and $5,000 for each false, fictitious, or fraudulent statement or representation in connection with investigations. Notably, each day a violation continues constitutes a separate offense.
Knowing violations of APPS are considered class D criminal felonies. For companies that have been found guilty of knowing violations, criminal fines can be imposed in an amount up to $500,000 for each violation.For individuals that have been found guilty, criminal fines can be imposed in an amount up to $250,000 for each violation; in addition, individuals can be imprisoned for 5-10 years for each violation.
Source: UK P&I Club
For more information please read the Knowledge bulletin issued by UK P&I Club
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