Shipowners call for US-IMO regulatory alignment
John Gallagher, Senior Editor | 17 July 2018
Donald Trump (above at USCG headquarters on 1 June) wants to streamline US maritime regulations. Credit: USCG
US President Donald Trump has set his sights on the maritime sector on his mission to reduce costly regulations, and shipowners have responded with their own call to align US standards with those of international shipping.
In a request for information (RFI) sent out in May by the Office of Management and Budget (OMB), which reports directly by the White House, the Trump administration sought feedback identifying existing rules affecting shipping “that are inefficient, obsolete, unnecessary, redundant, or otherwise not justified”, and views on how rules and requirements “should be altered, streamlined, or eliminated”.
The request was an extension of President Trump’s “2 for 1” executive order, which he signed just weeks after taking office, mandating that every proposed new regulation had to identify two old regulations to eliminate.
In a 16 July letter responding to the RFI, the London-based International Chamber of Shipping (ICS), which represents 37 shipowner associations worldwide, commented that the United States should be supporting regulatory initiatives that create “a level playing field” for ships calling at US ports regardless of flag.
“To this end, ICS suggests that the United States Coast Guard [USCG] should conduct a thorough analysis of all US regulations for alignment with IMO [International Maritime Organization] instruments,” wrote ICS deputy secretary-general Simon Bennett, including the Ballast Water Management (BWM) Convention, MARPOL Annex VI, the Hong Kong Convention, which oversees safe ship recycling, and the International Convention on the Control of Harmful Anti-fouling Systems in Ships.
The discrepancies in standards between the United States and the IMO on ballast water is one of the biggest examples of the problem, according to ICS. Specific issues in need of harmonisation include differences in the type approval process for ballast water management systems (BWMS), and implementation schedules governing the dates that ships are required to begin conducting ballast water treatment using a BWMS.
“It is vital to identify a pragmatic solution to this especially now that the BWM Convention has entered into force, otherwise the maritime industry will continue to be faced with serious uncertainty,” ICS stated.
Bennett also called out the United States for regulations that undermine the strength of the Hong Kong Convention – namely a US ban on exports of certain hazardous wastes, which in practice means that certain foreign-flagged as well as US-flagged vessels must recycle in the fewer and more expensive recycling facilities in the United States.
“We therefore suggest that the USCG should take the lead in resolving this problem, so that legislative or regulatory amendments are implemented to give full effect to the Hong Kong Convention in the United States and to ensure accessibility of US interests to global recycling facilities, provided that both the facility and the ship are in full compliance with the Convention.”
Piraeus-based Union of Greek Shipowners (UGS), which claimed that a quarter of the tonnage capacity of the Greek-owned fleet trades with the United States, like ICS called for harmonising US and international regulations. It also requested that the United States streamline and standardise regulations governing seafarer visa requirements, which it claimed differ among US ports.
“Furthermore, in case there is a need for a crew member, whose visa is still valid, to be transferred to medical care or hospital, or where the seafarer needs to immediately leave US due to an emergency or for humanitarian reasons, a special permit needs to be issued. In all cases and regardless of the seafarer’s nationality, the seafarer needs to be accompanied by a US police officer,” UGS asserted. “This is just one example of the additional bureaucratic burden imposed on the relevant US services.”
For Maersk Line and its terminal operator subsidiary, APM Terminals, it is regulations overseen by US Customs and Border Protection (CBP) that need to be overhauled, specifically monetary penalties levied for mishandled containers. Fines for the mishandling or improper release of a loaded container can range from the total a minimum of USD25,000 to the total value of the goods.
“Maersk Line and APM Terminals will have to handle a significant amount of business to generate the net profit to pay for these excessive penalty amounts,” the company stated in its filing. “The penalty should either be dropped if, and when, the container is confirmed properly delivered, or minimum penalty reduced to less than USD5,000 per occurrence.”
Advantages and disadvantages of the Jones Act – the US cabotage law requiring coastwise trade be conducted in US-built, -owned, and -flagged vessels using US crews – was highlighted among many of the 60 commenters who filed by the 16 July submission deadline, particularly among stakeholders in the US domestic trades. Most took issue with calls by some in industry and in the US Congress to repeal or eliminate the law.
“Those seeking to weaken or abolish the Jones Act usually do so due to their own economic self-interest, a proposal which would allow foreign-built, foreign-operated, foreign-manned, and foreign-owned vessels to operate on American waters,” wrote Warren Sanamo, designated person ashore for Louisiana-based Edison Chouest, operator of supply vessels for the US offshore oil and gas industry. “The result would be the transferring of an American industry, along with American jobs and American wealth to nations like China, which heavily subsidise their shipyards.”
But others requested that the administration consider amending or modifying the law to allow US-produced liquefied natural gas (LNG) to be transported on foreign-built LNG carriers. “The remote US territories can then enjoy the benefits of its own US clean and affordable natural gas,” one commenter stated.
US law firm Venable noted that the Trump administration has put in place an “ambitious deregulatory agenda” with significant changes in other sectors. However, OMB was not immediately available to comment on a timeline on processing the maritime submissions or when it would confer with US agencies that oversee the sector.