Alec Kyrle-Pope, Thomas Miller (Hellas) referred to the ‘’Ballast Water Management Convention – The P&I dimension’’,during the 2016 GREEN4SEA Conference & Awards. He provided an overview of recent developments, both IMO and US and an analysis of current regulatory gaps. He discussed the possible scope for third party liabilities and coverage issues to arise. The aim of his presentation was to update industry participants and raise awareness of practical and compliance issues for the coming year and likely ratification of the convention within 2016.
I believe that 2017 will be the year we will see the Ballast Water Management Convention ratified and come into force. The reason I am saying that is because this is what is really happening right now. Since March this year we are dangerously close to the 35% margin, meaning that it only requires one more ratification by the big Registries, either India or Panama, to go forward and make this come into force. Now, once they do so, it’s on. You are going to have 12 months before it comes into effect and before the clock starts ticking to be compliant with it.
Naturally, it is something that is good for the environment and we should support. The timing however is not going to be easy; retrofitting vessels is not going to be an easy case nor will it be relatively cheap or modest affair. Now, what do we, as the insurer, worry about? What do we concern ourselves with? Third party liabilities. Our owners, our members suffering or incurring liabilities because of non-compliance, or one could even consider pollution a risk.
Ballast water is one of those subjects where uncertainty is a truly massive factor, particularly now. The United States is slightly clearer only ever slightly. You’ve got the US Coast Guard who thus far have been very helpful and supportive of owners and who recognize the fact that despite legislation being in force there is as yet aid and approved system or body of systems that they can recommend or expect ship owners to have already. This is fine but, right now there is a heavy drive to work out which technologies, which providers and which systems will be approved
While the US Guard is obviously on board assisting where they can in terms of their approvals, you do not have an equal playing field. The US Environmental Protection Agency is far stricter really in terms of what they expect. Right now this isn’t a problem because the issues are still up in the air; nobody quite frankly has an idea of what they should or shouldn’t be asking or expecting ship owners to implement. Even though last year the US Coast Guard were adamant that they would have a system approved by the end of 2015 they didn’t. Will it happen in 2016? We think we are getting there. It’s perhaps not as certain as what’s going on right now with the IMO or what will happen this year on the ratification of the Convention itself but in terms of what’s going on in the states there is a continual sort of lobbying, campaigning letters of intent discussions between suppliers, providers, technological experts of what the US really wants.
EPA does not grant extensions and the EPAs’ jurisdiction is different from that of Coast Guard’s. Therefore, the Coast Guard is presently happy to provide extensions and assist ship owners. The EPA doesn’t go that far. It tacitly acknowledges the fact that it will not pursue or cause trouble with somebody who infringes their rules and one of the issues we’ve got with the EPA is the three mile boundary in US territorial waters where, for example, even if you have US Coast Guard Approval, what you do or what you can get away with will be tolerated, but is technically still an infringement. Now with the IMO once the Convention is ratified, there will then be a 12month period in which it will come into force thereafter. That gives owners a certain amount of certainty on the basis that once that clock starts ticking, once the Convention is ratified, you have a year to get yourself ready and prepared, understand exactly what’s going on or what time you have to work with to prepare your ships or retrofit them. What is critical and what is actually moving fast right now relates to the IOPP renewal.
Biofouling is something we see a little bit more often now. It isn’t particularly related to ballast. It could be a dirty hole, you could have sat off Brazil or for months on end, loaded a cargo, gone somewhere else and the port captain turns you away because there is a marine environmental risk. Does that lead to a fine? Does that lead to mini operational delays? How does it work? The problem we see is whether the Convention is ratified this year or in two years. Awareness has been raised and that is something owners cannot escape. For example, we have seen instance where the ship is towed up to a port, the environmental concerns have been raised locally and this has led to the shipping delayed which is not good for the operators. Also, if fines are levied or disputes arise, then the insurers will also have a concern. So, that’s biofouling. Is there an overlap? That’s the biggest question because I think, if you read our rules very carefully, certain parts of them refer to what makes special provisions for, what complies with MARPOL. MARPOL is sacrosanct for us and is sacrosanct for everyone in this industry. Everything we do is about running a business and service, the shipping of goods or people worldwide but in a safe and sustainable way.
What I would say if I was a broker sitting out there thinking “Right, well, I have a problem. I have a ship owner who has had a compliance issue, perhaps he’s left it too late or there’s been a problem because he couldn’t get into dry-dock there, couldn’t register here; I think you’ve got two very different conventions and right now nobody’s trying to pass judgement on how this is going to evolve. If the IMO and all the greater world of shipping can’t decide how and when this will come into force or if this will ever be a factor. It’s impossible to say, so why should we? What we look at though is obviously trying to understand and prevent mistakes. Under your charter party there may be issues complying with local regulations. We would encourage owners, especially in the tanker industry to think about that. But for us, on the P&I side, far too early to look at it but we want to flag up the issues, we want people thinking about the issues.
Ballast Water Convention is going to happen. I am a strong believer in planning for the worst and hoping for the best. I think, as an owner, anybody involved in the industry needs to recognize the necessary steps and start moving forward.
Above text is an edited article of Alec Kyrle-Pope presentation during the 2016 GREEN4SEA Conference & Awards.
You may view his presentation by clicking here
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The views presented hereabove are only those of the author and not necessarily those of GREEN4SEA and are for information sharing and discussion purposes only.
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About Alec Kyrle-Pope , Senior Claims Executive, Thomas Miller (Hellas) Ltd
Alec joined Thomas Miller in November 2010 having completed an LLM in Maritime & Commercial law and, prior to law school, studied Economics & Spanish. In London, he worked with a wide variety of EU and Swiss based Members, ranging from conventional Owners through to large Charterers and trading houses, handling all types of P&I and FDD related matters. He has extensive experience handling issues concerning the shipment of agricultural commodities as well as a strong background and interest in wet shipping disputes & casualty work. He is a Member of the Institute of Chartered Shipbrokers and holds various grain trade qualifications. He is a regular presenter at seminars and has spoken on a range of P&I topics at a number of industry events and courses. Alec joined Thomas Miller Hellas in November 2014.
