Inspiring Regulatory Dread
Multiplicity of authority is a mammoth institutional problem as ship owners-operators around the world are discovering to their horror. Reports say India is moving towards accepting the International Maritime Organization (IMO) Ballast Water Management (BWM) Convention 2004 taking the convention closer to full ratification.
While this great news for the environmentalist, the divorce between requirements for Ballast Water Management Systems (BWMS) specified by the IMO and the United States Coast Guard (USCG) is a huge headache capable of drilling generous sized holes in the pockets of ship owners-operators.
Now, the USCG provisions for BWMS are more stringent than their counterparts in the BWM Convention meaning many IMO Type Approved BWMS will need redesign or retesting for compliance with the USCG Type Approval standards. And it costs anywhere between $1million and $5million to install a BWMS.
IMO mandates that the BWM Convention can enter force only 12 months after 30 states representing 35% of the global merchant shipping tonnage ratify it. As of April 28, 2015, 44 states representing only 32.86% of the global tonnage have ratified it. Rumor has it that Indonesia too plans on ratifying the convention.
With India already on board, the convention may be fully ratified in 2015. And ship owner-operators might be staring down the barrel as the convention goes operational in 2016 without a viable timetable for implementation of USCG Type Approved BWMS.
Anatomy of the Dilemma
Iron, lead, stone etc. served as ballast in ships during the Age of Sail. About 120 years ago, steel hulled ships were first used. Since then, ships have used seawater as ballast to boost propulsion and maneuverability, improve transverse stability, lower hull stresses, and compensate for the weight lost due to on-board fuel and water consumption.
The problem is, ballast water is taken in at one location in the ocean and released at another. Microorganisms are thus transferred and this has resulted in the introduction of many an invasive aquatic species that have made merry at the expense of local aquatic creatures and wrecked havoc on local ecosystems.
According to the IMO, global ballast water exchanges amount to 3 to 5 billion tons a year. Over 185 invasive aquatic species have for example entered the Great Lakes via ballast water of ocean going ships. These rattle the food chain, destroy infrastructure, and harm the beaches costing the industry, citizens, and businesses $200million annually.
Ships can discharge ballast water in U.S. waters (12 miles) only with a full USCG Type Approved BWMS. Additionally, they have to comply with the United States Environmental Protection Agency (USEPA) Vessel General Permit (VGP) and BWM regulations of individual states
At present however the USCG has not granted full Type Approval to any BWMS. Instead the USCG has put in a system called Alternate Management System (AMS). Under AMS, the USCG accepts the BWMS approved by another flag state if the same complies with the BWM Convention. The U.S. EPA has also aligned its rules towards the same end.
Now, the essence of the AMS is that it is a makeshift, five year arrangement. The vessel with AMS approved BWMS can conduct ballast water exchanges in U.S. waters only for five years from the date the BWMS was implemented on the vessel. These five years provide the time for additional testing required for full Type Approval.
But because USCG Type Approval provisos are more demanding than IMO Type Approval regulations, they create a regulation barrier at the line that demarcates U.S. territorial waters and those beyond it. Ships with IMO Type Approved BWMS that fail to obtain USGC Type Approval will have five years to get the latter.
Even well-meaning shipowners wanting to comply with both requirements will have to invest twice in BWMS for no fault of their own. This is precisely why the International Chamber of Shipping, INTERTANKO, BIMCO, and Intercargo closed ranks to conduct a round table conference and jointly voice their concerns.
Over 50 BWMS have IMO Basic Approval, 35-40 possess IMO Final Approval, and more than 50 have secured IMO Type Approval. Many more are under development. Only 17 BWMS makers have however indicated willingness to obtain USCG Type Approval. None have won it.
Plus, there is a huge demand-supply gap in the making. If the BWM Convention goes operational in a year from now, about 57,000 ships will need BWMS installation over the ensuing 3-4 years. The hike in demand will raise prices. And, it takes about 6-8 months to get a BWMS installed.
About every 9 weeks or so, a fresh invasive aquatic species gets introduced. The importance of the BWMS therefore cannot be overstated. What is needed however is a practical implementation schedule that facilitates a smooth transition. For shipping transports 90% of internationally traded cargo and just cannot afford to stop.