Note from the Vice Chair

Jeanne M. Grasso

Happy fall! As the seasons change, so do the issues confronting the maritime industry…or not. Over the past few years, several topics have consistently remained in the headlines and as a thorn in the side of many shipowners. In the environmental arena, these issues have generally involved MARPOL enforcement, ballast water management, the Environmental Protection Agency’s (“EPA”) Vessel General Permit (“VGP”), and air emissions in light of the upcoming International Maritime Organization’s (“IMO”) 0.5-percent sulfur cap.

The MARPOL Annex I oily water separator cases have continued apace, with at least half a dozen guilty pleas in 2018 to date, and several more pending. These cases have been going on since the mid-1990s and not a lot has changed— engineers are still bypassing the oily water separator, albeit in more creative ways (e.g., discharging through the sewage or graywater systems), and finding creative ways to trick the oil content meter. Most cases still arise as a result of whistleblowers reporting misconduct to the U.S. Coast Guard (“USCG”), owners still must enter into burdensome security agreements to get their ship out of port, crewmembers are commonly “voluntarily” held in the United States for upwards of a year or more, and guilty pleas with fines and stringent environmental compliance plans are the outcome. To help owners avoid this fate, we have developed a Maritime Compliance Audit Program that tests the effectiveness of a company’s environmental management system to prevent MARPOL violations, a summary of which can be found here and which we are happy to discuss with you.

The ever-changing ballast water management regime continues to pose challenges as well as owners trying to navigate compliance with the IMO Convention and the USCG regulations. The USCG’s policy on compliance date extensions is ever-evolving and we, along with industry partners, continue to work with the USCG to find practical compliance-focused solutions for owners endeavoring to comply with both the USCG’s and IMO’s requirements in an efficient manner and effective manner.

As many of you know, the EPA’s 2013 Vessel General Permit, which regulates incidental discharges from vessels, is set to expire in December 2018. The expectation was that the EPA would publish a new draft for comment sometime last year or early this year, but that did not happen. That said, the Chamber of Shipping of America reports that the EPA expects the new proposed 2018 VGP to be published in March 2019, with at least a 30-day comment period. To this end, the current 2013 VGP is expected to be administratively continued until the final 2018 VGP is issued; vessels currently covered under the 2013 VGP will automatically be covered by the administrative continuance without further action; and new vessels whose keel is laid prior to December 18, 2018, must file a Notice of Intent (“NOI”) to be covered by the 2013 VGP prior to December 18, 2018, otherwise they will not be covered until the 2018 VGP is finalized (and hence cannot discharge in the United States, which basically prohibits them from operating in the United States).

And, IMO’s 2020 sulfur cap is looming on the horizon and investors, charterers, and owners are contemplating compliance options, as well as studying the risks and rewards of exhaust gas cleaning systems (i.e., scrubbers), which will be a topic addressed in the next issue of Mainbrace.

So, finally, we are proud that we have another issue Mainbrace to share with you, full of interesting information, ranging from what is (or is not) happening in the U.S. Congress to tariffs and trade, arbitral awards, and, importantly, celebrating diversity, and much, much more.

We hope you enjoy Mainbrace and we would welcome any feedback you might have. Cheers!