International Environmental Regulation of the Shipping Industry

1. International Environmental Regulation of the Shipping Industry Alexandra R. Harrington Doctor of Civil Law Candidate, McGill University Senior Manager & Associate Fellow, CISDL

2. Introduction • Course outline • I. International Regulations • International Maritime Organisation • Associated Treaties, Conventions & Regulations • II. Case Examples and Discussion • III. Conclusion

3. Section I: International Regulations

4. International Maritime Organization • Pollution • Liability/Compensation Fund • Safety of Life at Sea • Ship Recycling & Wreck Removal • Other Issues: Anti-fouling; Ballast Water & Sediment

5. IMO Pollution Regulations • International Convention for the Prevention of Pollution of the Sea by Oil – 1958 • Primary focus is on oil pollution from tankers arising through their standard operations. • Created zones off coast lines where tankers are prohibited from discharging oil and associated wastes. • State Parties agreed to establish facilities to assist in the collection of machine-based oil waste from ships rather than have this waste dumped into the sea. • Later amendments made these terms applicable to ships beyond tankers.

6. International Convention for the Prevention of Pollution from Ships • Adopted first in 1973, although only became operative after 1978 Protocol amending and amplifying the Convention. • Key definitions: • Harmful substance – any substance that poses a threat to human life, marine life, and the marine environment, as well as uses of the sea. • Discharge – includes all methods of release, intentional and unintentional. The term is limited, however, and is not applicable to discharges made during exploration or exploitation of sea-bed resources, or associated off-shore processing.

7. International Convention for the Prevention of Pollution from Ships • Applies to flag ships of State Parties and ships that operate under the authority of a State Party. Does NOT apply to war ships. • State Parties agree to establish internal sanctions for violations of the Convention. • Establishes a system for State Party issuance of a certificate of compliance with the terms of the Convention for each ship under that State Party’s control. • Where a ship does not have such a certificate, State Parties are able to stop the ship from returning to sea until an adequate inspection and attestation of seaworthiness has been performed.

8. International Convention for the Prevention of Pollution from Ships • Provides for the creation of an “Administration” to enforce the terms of the Convention and investigates alleged violations. • In Protocols added in 1973, there are specific requirements for the technical aspects of reporting incidents, as well as for arbitration in disputes between the parties. • Annex I - regulations for the prevention of pollution by oil • Provides extensive definitions of what oil, ships, and associated entities for the purpose of coverage under the Convention. • Also provides for in-depth certificate issuing system.

9. International Convention for the Prevention of Pollution from Ships • Annex II - Regulations for the control of pollution by noxious liquid substances in bulk • Creates standards for ships created before and after 2007 in terms of storage and technological abilities related to noxious liquids, and sets out a comprehensive list of noxious liquid substances covered by the terms of the Annex. • Annex III – Prevention of pollution from harmful substances in packaged form (Optional Annex) • Packaging and labeling requirements for harmful substances in packaged form that are to be shipped.

10. International Convention for the Prevention of Pollution from Ships • Annex IV – Prevention of pollution by sewage from ships (Optional Annex) • Contains specific size requirements for a ship to be subject to the Annex’s provisions geared toward preventing sewage-based pollution. • Annex V – Prevention of pollution by garbage from ships • Bans dumping of plastics into the sea. • Also sets the standards for where and how garbage can be disposed of from ships, particularly in relationship to land.

11. International Convention for the Prevention of Pollution from Ships • Annex VI – Prevention of Air Pollution from Ships • Sets emission rate limits for sulphur oxide and nitrogen oxide from ships. • Subsequent amendments to the Convention & Protocol increased the specificity of their application in specific geographical locations, and types of vessels to which they are applicable.

12. Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter & Protocol • Original Convention adopted in 1972. • State Parties agree to take steps individually to control and prevent maritime pollution and dumping within their jurisdiction. • Key definitions: • Dumping is defined as including a deliberate intent. • Waste means any substance that is dumped, regardless of its identity or composition. However, the exact scope of prohibited substances is contained in an Annex.

13. Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter & Protocol • Where a permit process is already required for dumping of wastes, the State Party does not have to apply the Convention, although it is still required to take its terms into account. • The Convention also does not apply in situations of force majeure, where dumping appears to be the only way to protect human life or vessels/aircraft. Requires an assessment of risks. • State Parties are required to apply the terms of the Convention to flag ships/vessels and ships/vessels within its territory.

14. Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter & Protocol • Annex I – sets out substances that are covered by Convention. • Annex II & III – sets out permitting considerations and requirements.

15. Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter & Protocol • Protocol, 1976 • Incorporated the precautionary principle, and the polluter pays principle, into the terms of the Convention. • Includes a prohibition on the incineration of wastes at sea. • Further, State Parties are prohibited from allowing the exportation of wastes for dumping or incineration at sea. • Revises and updates the provisions of the Annexes.

16. International Convention on Oil Pollution Preparedness, Response and Co-operation • Adopted in 1990. • Key definitions • Oil pollution incident – “an occurrence or series of occurrences having the same origin, which results or may result in a discharge of oil and which poses or may pose a threat to the marine environment, or to the coastline or related interests of one or more States, and which requires emergency action or other immediate response.” • Off-shore unit – “any fixed or floating offshore installation or structure engaged in gas or oil exploration, exploitation or production activities, or loading or unloading of oil.”

17. International Convention on Oil Pollution Preparedness, Response and Co-operation • Key definitions continued • Sea ports and oil handling facilities – “those facilities which present a risk of an oil pollution incident and includes, inter alia, sea ports, oil terminals, pipelines and other oil handling facilities.”

18. International Convention on Oil Pollution Preparedness, Response and Co-operation • State Parties are required to ensure that their flag ships have appropriate oil pollution emergency plans. • State Parties must require offshore unit operators to have oil pollution emergency plans that are adequate and that are in accordance with national legislation on the issue. The same is required of oil handling facilities and offshore sea port operators. • Flag ships and offshore unit operators are required to report an event involving discharge or probable discharge to the nearest State Party for ships and the coastal State having jurisdiction over the offshore unit.

19. International Convention on Oil Pollution Preparedness, Response and Co-operation • Maritime inspection vessels (ie. Coast Guard) are required to report events or potential events that are observed. • When a State Party receives a report of discharge or potential discharge, it is required to: • (a) assess the event to determine whether it is an oil pollution incident; • (b) assess the nature, extent and possible consequences of the oil pollution incident; and • (c) then, without delay, inform all States whose interests are affected or likely to be affected by such oil pollution incident, together with • (i) details of its assessments and any action it has taken, or intends to take, to deal with the incident, and • (ii) further information as appropriate

20. International Convention on Oil Pollution Preparedness, Response and Co-operation • If the discharge is severe, the State Party must inform the IMO, and other states that might be affected by the discharge. • State Parties are required to establish a national system for responding to an oil discharge event, including, at a minimum:

21. International Convention on Oil Pollution Preparedness, Response and Co-operation • (a) the designation of: • (i) the competent national authority or authorities with responsibility for oil pollution preparedness and response; • (ii) the national operational contact point or points, which shall be responsible for the receipt and transmission of oil pollution reports as referred to in article 4; and • (iii) an authority which is entitled to act on behalf of the State to request assistance or to decide to render the assistance requested; • (b) a national contingency plan for preparedness and response which includes the organizational relationship of the various bodies involved, whether public or private, taking into account guidelines developed by the Organization.

22. International Convention on Oil Pollution Preparedness, Response and Co-operation • In conjunction with the shipping industry, State Parties are also required to establish: • (a) a minimum level of pre-positioned oil spill combating equipment, commensurate with the risk involved, and programmes for its use; • (b) a programme of exercises for oil pollution response organizations and training of relevant personnel; • (c) detailed plans and communication capabilities for responding to an oil pollution incident. Such capabilities should be continuously available; and • (d) a mechanism or arrangement to co-ordinate the response to an oil pollution incident with, if appropriate, the capabilities to mobilize the necessary resources.

23. International Convention on Oil Pollution Preparedness, Response and Co-operation • State Parties agree to assist and allow: • “(a) the arrival and utilization in and departure from its territory of ships, aircraft and other modes of transport engaged in responding to an oil pollution incident or transporting personnel, cargoes, materials and equipment required to deal with such an incident; and • (b) the expeditious movement into, through, and out of its territory of personnel, cargoes, materials and equipment referred to in subparagraph (a).”

24. International Convention on Oil Pollution Preparedness, Response and Co-operation • State Parties agree to further research and development in oil pollution preparedness and response. • Annex – contains provisions regarding the reimbursement of costs of assistance. Only between States, does not address or bar civil liability. • Barring a bilateral or multilateral agreement, the general principles of cost allocation are: • (i) If the action was taken by one Party at the express request of another Party, the requesting Party shall reimburse to the assisting Party the cost of its action. The requesting Party may cancel its request at any time, but in that case it shall bear the costs already incurred or committed by the assisting Party. • (ii) If the action was taken by a Party on its own initiative, this Party shall bear the costs of its action.

25. International Convention on Civil Liability for Oil Pollution Damage • Adopted in 1969. • Key definitions • Person – includes natural and corporate persons, as well as the state. • Pollution damage – “loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur, and includes the costs of preventive measures and further loss or damage caused by preventive measures.”

26. International Convention on Civil Liability for Oil Pollution Damage • Key definitions continued • Preventive measures – “any reasonable measures taken by any person after an incident had occurred to prevent or minimize pollution damage.”

27. International Convention on Civil Liability for Oil Pollution Damage • Liability is generally imputed to the ship owner, except: • Force majeure • The damage resulted from acts by a third party • The damage was the result of negligence or other wrongful acts by a governmental/related authority • Where the damage was caused by the person who suffered from it • Warships • Joint and several liability applies.

28. International Convention on Civil Liability for Oil Pollution Damage • Creates liability calculation formulas. • Creates a fund into which ship owners pay their assessed rates of liability; the fund then makes distributions as appropriate. • Compulsory insurance requirement. • Creates a statute of limitations at 3 years from the year of damage for claims against the fund. • Limits the venue of suits against the fund to the location of the damage.

29. International Convention on Civil Liability for Oil Pollution Damage • Subsequent protocols expanded the definitions of ships and damages. These Protocols also exempt crew members, ship pilots, those assisting the crew or acting as good Samaritans from liability. Liability has also been extended to the exclusive economic zones of State Parties.

30. International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND) • Adopted in 1971 but replaced by new terms in 1991. • Convention and Fund created under it applies: • (a) to pollution damage caused: • (i) in the territory, including the territorial sea, of a Contracting State, and • (ii) in the exclusive economic zone of a Contracting State, established in accordance with international law, or, if a Contracting State has not established such a zone, in an area beyond and adjacent to the territorial sea of that State determined by that State in accordance with international law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured; • (b) to preventive measures, wherever taken, to prevent or minimize such damage.

31. FUND • The Fund does not have liability where the ship owner is exonerated from liability or the damage was the result of an intentional act by the person claiming damages. • Sets out requirements for liability and payments, relying heavily on working in tandem with the Liability Convention. • Overall, FUND is given rights to assert claims through subrogation, where the claims can be made under terms of Liability Convention, and also serves to assist in the implementation of the Liability Convention, particularly in regards to collection of funds and payments to appropriate parties.

32. International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), 1996 • Key definitions: • Person – includes natural persons or corporations, as well as States. • Hazardous and noxious substances – oil carried in bulk, noxious liquids carried in bulk, dangerous liquid substances, “dangerous, hazardous and harmful substances, materials and articles in packaged form covered by the International Maritime Dangerous Goods Code,” liquefied gases, solid bulk materials possessing chemical hazards, as set out in the Convention’s Annexes.

33. HNS • Key definitions continued • Damage – • (a) loss of life or personal injury on board or outside the ship carrying the hazardous and noxious substances caused by those substances; • (b) loss of or damage to property outside the ship carrying the hazardous and noxious substances caused by those substances; • (c) loss or damage by contamination of the environment caused by the hazardous and noxious substances, provided that compensation for impairment of the environment other than loss of profit from such impairment shall be limited to costs of reasonable measures of reinstatement actually undertaken or to be undertaken; and • (d) the costs of preventive measures and further loss or damage caused by preventive measures.

34. HNS • This Convention shall apply exclusively: • (a) to any damage caused in the territory, including the territorial sea, of a State Party; • (b) to damage by contamination of the environment caused in the exclusive economic zone of a State Party, established in accordance with international law, or, if a State Party has not established such a zone, in an area beyond and adjacent to the territorial sea of that State determined by that State in accordance with international law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured; • (c) to damage, other than damage by contamination of the environment, caused outside the territory, including the territorial sea, of any State, if this damage has been caused by a substance carried on board a ship registered in a State Party or, in the case of an unregistered ship, on board a ship entitled to fly the flag of a State Party; and • (d) to preventive measures, wherever taken.

35. HNS • Imputes liability to the ship owner at the time of the accident in connection with the carriage of hazardous & noxious substances by sea. • There is no liability for the ship owner when: • The damage is the result of force majeure. • The damage is caused by a third party. • The damage is caused by the negligence or other fault of a governmental/related entity that is charged with maintaining navigational assistance • The shipper failed to inform the owner of the dangerous content of shipment.

36. HNS • Claims for compensation cannot be brought against: • Servants, agents, members of the crew. • Pilot or non-crew member who performs services for the ship. • The charterer, manager, or operator of the ship. • Persons performing salvage operations with owners’ consent or at request of a governmental authority. • Any person taking preventative measures.

37. HNS • Establishes joint and several liability where 2 ships carrying HNS are involved in an accident. • Compulsory insurance requirement established based on tonnage. • Provides for the creation of a fund for use in the event of an HNS accident.

38. Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships • Adopted in 2009. • Addresses the need to regulate the recycling of ships, including issues related to converting ships to other scrap metal due to concerns over the content of ship materials and potential exposure of hazardous materials. • Requires that there be a recycling plan in effect for the physical act of recycling a ship.

39. IMO Guidelines on Ship Recycling • In 2003, the IMO promulgated guidelines for the recycling of ships, including provisions on future ship design to ensure that materials used can be recycled without posing an environmental threat in the process.

40. Nairobi International Convention on the Removal of Wrecks, 2007 • Allows States to remove shipwrecks when they are able to establish that they pose a threat to the marine environment, among other threats. • Applies when the shipwrecks at issue are located outside of the State’s territorial waters, and not within its jurisdiction as a matter of law. • Other provisions apportion liability for the costs of shipwrecks to ship owners and create a reporting requirement for ship wrecks.

41. International Convention on the Control of Harmful Anti-fouling Systems on Ships • Applies to the flag ships of State Parties, ships operating under authority of a State Party, and ships which are under the jurisdiction of a State Party. • Does NOT apply to warships or ships operated by a government, unless used for a commercial purpose. • Requires that State Parties prohibit the use of harmful anti-fouling systems (ie. certain forms of paint). • Requires State Parties to ensure that anti-fouling systems and their waste are collected and disposed of in an environmentally sound manner.

42. International Convention on the Control of Harmful Anti-fouling Systems on Ships • Allows State Parties to inspect ships in order to determine whether they are in compliance with the Convention. • A State Party may detain a ship which it has reason to believe is in violation of the Convention, or it may bar the ship from entering its waters/ports. • Requires State Parties to enact national legislation in order to codify the sanctions set out in the Convention. • The Annex sets out the technical requirements.

43. International Convention on Civil Liability for Bunker Oil Pollution Damage • Key definitions • Bunker oil – “hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil.” • Pollution damage – • “(a) loss or damage caused outside the ship by contamination resulting from the escape or discharge of bunker oil from the ship, wherever such escape or discharge may occur, provided that compensation for impairment of the environment other than loss of profit from such impairment shall be limited to costs of reasonable measures of reinstatement actually undertaken or to be undertaken; and • (b) the costs of preventive measures and further loss or damage caused by preventive measures.”

44. International Convention on Civil Liability for Bunker Oil Pollution Damage • Creates liability for the ship owner as follows: • “shall be liable for pollution damage caused by any bunker oil on board or originating from the ship, provided that, if an incident consists of a series of occurrences having the same origin, the liability shall attach to the ship owner at the time of the first of such occurrences.” • Establishes joint and several liability where appropriate. • Warships or ships used by the government for non-commercial purposes.

45. International Convention on Civil Liability for Bunker Oil Pollution Damage • Limitations on ship owner liability: • Force majeure • The damage was the result of third party actions • The damage was the result of negligence or other wrongful conduct by a governmental/related authority. • Where it is established that the person damaged actually intended to cause the damage.

46. International Convention on Civil Liability for Bunker Oil Pollution Damage • Compulsory insurance is made a requirement. • Jurisdiction and pollution damage • “1. Where an incident has caused pollution damage in the territory, including the territorial sea, or in an area referred to in article 2(a)(ii) of one or more States Parties, or preventive measures have been taken to prevent or minimise pollution damage in such territory, including the territorial sea, or in such area, actions for compensation against the shipowner, insurer or other person providing security for the shipowner's liability may be brought only in the courts of any such States Parties. • 2. Reasonable notice of any action taken under paragraph 1 shall be given to each defendant. • 3. Each State Party shall ensure that its courts have jurisdiction to entertain actions for compensation under this Convention.”

47. International Convention for the Control and Management of Ships' Ballast Water and Sediments • Adopted in 2004. • Key definitions • Ballast Water – water with its suspended matter taken on board a ship to control trim, list, draught, stability or stresses of the ship. • Ballast Water Management – “mechanical, physical, chemical, and biological processes, either singularly or in combination, to remove, render harmless, or avoid the uptake or discharge of Harmful Aquatic Organisms and Pathogens within Ballast Water and Sediments.”

48. International Convention for the Control and Management of Ships' Ballast Water and Sediments • Key definitions continued • Harmful Aquatic Organisms and Pathogens – “aquatic organisms or pathogens which, if introduced into the sea including estuaries, or into fresh water courses, may create hazards to the environment, human health, property or resources, impair biological diversity or interfere with other legitimate uses of such areas.”

49. International Convention for the Control and Management of Ships' Ballast Water and Sediments • Requires State Parties to enact domestic laws that codify the terms of the Convention. • Requires State Parties to ensure that facilities designated to receive and clean/repair ballast tanks are up to environmental standards and are environmentally sound. • Allows State Parties to inspect ships within their jurisdiction in order to verify their compliance with the terms of the Convention.

50. International Convention for the Control and Management of Ships' Ballast Water and Sediments • Where a threat is detected, the State Party with jurisdiction over the ship is required to prohibit the ship from discharging ballast water until the issue is fixed. • Annex - sets out specific regulations for the control and management of ships’ ballast water and sediments.