Legal Beat
A Tidal Wave of New Regulations
by Joan M. Bondareff and Jeanne M. Grasso
Vessel owners and operators are finding themselves besieged on many fronts by an onslaught of new laws and regulations governing ship operations at the state and federal levels. At the same time, companies and organizations have been somewhat successful in taking their case to the courts and Congress to argue for a single nationwide system of regulations as opposed to a smattering of differing laws in the various coastal states. This article reviews the latest in laws, regulations, and litigation affecting a wide part of the maritime industry. The article looks at three of the industry's key challenges: (1) ballast water management; (2) ship emissions and air pollution; and (3) oil pollution. Ballast Water Management The management ballast water discharges began with the enactment of the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 (NANPCA) as an effort to prevent the introduction of additional invasive species into the Great Lakes. Since then, NANPCA was amended by the National Invasive Species Act of 1996 and the issue has progressed over the intervening years to a much larger campaign to regulate all vessel discharges into U.S. waters. Ballast water management has been the subject of litigation, regulation, and legislation at the state and federal level. The issue remains to be played out before the courts and Congress. An important part of the ballast water management equation is the lawsuit brought by Northwest Environmental Advocates (NEA) in 2003 against the Environmental Protection Agency (EPA). In that lawsuit, NEA challenged the longstanding position of the EPA that discharges incidental to normal vessel operations, including ballast water discharges, were exempt from National Pollution Discharge Elimination System (NPDES) permits under the Clean Water Act. In September 2006, the U.S. District Court for the Northern District of California sided with the environmental groups and ordered the EPA to vacate this longstanding regulatory exemption, which included discharges of ballast water, gray water, bilge water, and deck runoff, among others. The District Court also rejected EPA's argument that Congress had acquiesced in
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EPA's interpretation of the law, which had been in place for over 30 years. The District Court issued a final order requiring EPA to develop a permitting program for incidental discharges from vessels by September 30, 2008. Although the United States appealed the case to the Ninth Circuit Court of Appeals, EPA has, in the meantime, begun a rulemaking to institute a permitting process for discharges of pollutants incidental to the normal operation of vessels. On June 21, 2007, EPA published a notice requesting comments and information on how to issue permits for vessel discharges. An EPA official stated that the new permits could cover more than 18 million vessels, more than all other point sources regulated by EPA. Senator Ted Stevens (R-AK) and Representative Don Young (R-AK) introduced companion bills (S. 2645 and H.R. 5594) early this year, entitled the "Vessel Discharge Evaluation and Review Act." If enacted, these bills would render the District Court ruling moot by removing from EPA the authority to regulate incidental discharges from commercial and recreational vessels, and giving separate authority to the Coast Guard to establish a new uniform national discharge standard in lieu of any permit program. Although it is difficult to predict at this stage if the proposed legislation has much chance of success, vessel owners and operators should closely monitor this legislation in conjunction with the EPA rulemaking and appeal, and should also seriously consider whether it is in their interest to lend support to this legislative proposal. On a parallel track, Congress is considering new ballast water management legislation. Ballast water management bills have been reported from their respective Congressional committees and are awaiting full House and Senate consideration. The Ballast Water Treatment Act of 2007 is incorporated in Title V of H.R. 2830, the Coast Guard Authorization Act of 2007. The Senate has reported a separate bill, S. 1578, to amend NANPCA. Both bills would track closely the Coast Guard's current ballast water management scheme, and would address the critical issue of relation to state laws or preemption. Both bills would allow state regulation of ballast water management provided the regulation does not conflict with federal standards, and, in the case of the Senate
bill, does not impose an undue burden on interstate commerce. The Senate bill also has an explicit provision granting the Coast Guard the sole authority to regulate ballast water discharges, thereby superseding EPA authority at least to the extent the discharges introduce aquatic nuisances into the marine environment. Ship Emissions Ocean-Going Vessels In an effort to combat air pollution in California, on January 1, 2007, the California Air Resources Board (CARB) began enforcing state regulations limiting emissions of particulate matter, nitrogen oxide, and sulfur oxide from the auxiliary diesel engines of ocean-going vessels operating within 24 miles of California's coast. The regulations were challenged by the Pacific Merchant Shipping Association and in August 2007, the District Court held the regulations were preempted by the Clean Air Act. CARB appealed and the Ninth Circuit allowed CARB to begin enforcing them again in October 2007 pending the outcome of the appeal. On February 27, 2008, the Ninth Circuit affirmed the lower court's ruling, confirming that the regulations indeed were preempted by the Clean Air Act. While California had the ability to petition EPA to allow California to issue regulations, California did not follow this procedure and could not on its own issue these standards to regulate vessel emissions.1 On that date, CARB stopped enforcing its regulations, but announced about two weeks later on March 10, 2008, that it would again begin enforcement "[b]ecause of the significant adverse health impacts from human exposure to the air pollutants emitted by ocean-going vessels in California waters,"2 pending the resolution of its request for a rehearing to the Ninth Circuit. Thus, while this on again, off again, and on again rule winds its way through the judicial system, shipowners remain challenged at keeping track of compliance obligations. In the meantime, EPA has begun a rulemaking on the development of more stringent emissions for marine diesel engines on ocean-going vessels. (Category 3 marine diesel engines with cylinder displacements of 30 liters or more.) EPA is considering application of these requirements to both U.S. and foreign-flag vessels. In addition, the
About the Authors
Joan M. Bondareff (Left) is Of Counsel to Blank Rome LLP where she specializes in maritime and environmental law, and congressional relations. Jeanne M. Grasso (Right), Partner at Blank Rome LLP, focuses her practice on maritime, environmental, and transportation law for domestic and international clients. Ms. Grasso counsels owners and operators of vessels, cargo owners, and facilities, including manufacturing facilities, both marine side and inland. She can be reached at 202.772.5927 or Grasso@BlankRome.com.
International Maritime Organization is considering amendments to MARPOL Annex VI to achieve greater reductions in the emission of air pollution from ships. It is therefore only a matter of time before EPA and the international community adopt more stringent regulation of ship emissions, though it remains unclear whether more stringent regulation at the international and federal level will satisfy California. The California Senators, Barbara Boxer and Diane Feinstein, displeased with the pace of the EPA rulemaking, have also introduced legislation to amend the Clean Air Act to reduce air pollution from marine vessels. S. 1499, the Marine Vessel Emissions Reduction Act of 2007, was introduced in 2007 and referred to the Committee on Environment and Public Works. (The companion bill in the House is H.R. 2548.) The Boxer-Feinstein bill would require EPA to adopt more stringent standards for sulfur in fuel, and establish new standards for emissions from new and in-use engines. Senator Boxer, Chair of the Senate Committee on Environment and Public Works, conducted a hearing on this bill on February 14, 2008. At the hearing, the witnesses recognized the need to do something to curb air pollution from vessels, but EPA and industry witnesses urged the Subcommittee to work through the IMO working group on new emission standards under MARPOL Annex VI rather than unilaterally. The United States is not yet a party to MARPOL Annex VI. Implementing legislation has been passed by the House of Representatives, but is still
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