maritime briefing - watson farley & · pdf filewith its standards within a short...

The Ballast Water Convention: a sea change of volumetric proportions. How does it affect you? Ballast water management is one of the major environmental challenges facing the shipping industry today. A new international convention which is now close to ratification requires shipowners to invest in expensive new technology and to adjust their operations and practices so as to comply with its standards within a short timescale. This briefing note provides an overview of the convention and some of its potential consequences for owners and operators. Background Water has been used as ballast in ships for more than a century to help maintain their stability during transits, cargo operations and otherwise to control their trim and draft. The water pumped on board for this purpose is often transported many hundreds of miles before it is returned to the ocean. As a result, large numbers of microscopic organisms, eggs and larvae are often transported in this water and introduced into the ecosystems of the ship’s destination. This has led to certain species becoming invasive, establishing themselves in ecosystems to which they are not indigenous, out‑competing the local species and multiplying to pest‑like numbers. In the 1980s a number of countries such as Canada and Australia began to report problems with invasive species, and raised their concerns with the International Maritime Organisation (the “IMO”). The IMO claims that the number of these so‑called “bio‑invasions” has continued to grow at “an alarming rate” as global sea‑trade has continued to expand, and that they may not yet have reached their peak . Examples of such organisms and their impact on the ecosystems at and around the place of release are given in the table on the following page .

wfw.com

Maritime Briefing February 2013

Contents Introduction 01Background 01Application of the Convention 03Main provisions 03Ballast water treatment systems 05New MEPC guidelines 05Ratification and entry into force 06Enforcement 06The UK position 07Concerns about the implementation of the Convention

Other considerations 08Contacts 09

1 http://www.imo.org/OurWork/Environment/Ballast WaterManagement/Pages/Default.aspx

2 http://www.imo.org/OurWork/Environment/Ballast WaterManagement/Pages/AquaticInvasiveSpecies(AIS).aspx

02 03 MARITIME BRIEFING: BALLAST WATER MARITIME BRIEFING: BALLAST WATER

In many cases, quite apart from the ecological effects of such invasion and establishment of non‑indigenous species into ecosystems, they can have serious socioeconomic ramifications, by having a negative impact on local trade. In response to this issue in 1991 the IMO’s Marine Environment Protection Committee (the “MEPC”) adopted the “Guidelines for Preventing the Introduction of Unwanted Organisms and Pathogens from Ships’ Ballast Waters and Sediment Discharges”, on the basis of which in 1993 the IMO Assembly adopted Resolution A.774(18). Thereafter, these guidelines were revised and replaced in 1997 by the adoption by the IMO Assembly of the “Guidelines for the Control and Management of Ships’ Ballast Water to Minimise the Transfer of Harmful Aquatic Organisms and Pathogens ” (the “1997 Guidelines”). Both the 1997 Guidelines and the earlier IMO guidelines were not legally binding on any state, but mere recommendations in an attempt to standardise the practices and measures adopted by countries to deal with the problem of transfer of aquatic organisms through ballast water. To minimise the introduction of invasive species into their ports and jurisdictional waters, a number of countries have taken unilateral action adopting their own national, legally binding legislation regulating ballast water management. In 2004, after 14 years of negotiation and debate, the IMO adopted the “International Convention for the Control and Management of Shipsʹ Ballast Water and Sediments” (the “Convention”). The IMO is now in the process of seeking ratification of the Convention. Once the Convention is ratified, it (and its supporting guidelines ) will supersede the 1997 Guidelines.

Species Origin Area of Release Impact North American Comb Jellyfish Mnemiopsis leidyi

Eastern Seaboard of the Americas.

Black, Azov and Caspian Seas.

Reproduces rapidly under favourable conditions. Feeds excessively on zooplankton. Depletes zooplankton stocks, altering food web and ecosystem function. Contributed to the collapse of Black and Asov Sea fisheries in the 1990s. Now threatens similar impact in Caspian Sea.

Mitten Crab Eiocheir sinensis

Northern Asia.

Western Europe, Baltic Sea and West Coast North America.

Undergoes mass migrations for reproductive purposes. Burrows into river banks and dykes causing erosion and siltation. Preys on native fish and invertebrate species, causing local extinctions during population outbreaks. Interferes with fishing activities.

Asian Kelp Undaria pinnatifida

Northern Asia.

Southern Australia, New Zealand, West Coast of the United States, Europe and Argentina.

Grows and spreads rapidly. Displaces native algae and marine life. Alters habitat, ecosystem and food web. May affect commercial shellfish stocks through space competition and alteration of habitat.

Application of the Convention The Convention applies to all types of ships whatsoever operating in the aquatic environment, including submersibles, floating craft, floating platforms, FSUs and FPSOs , with only a few exceptions, such as ships which are not designed or constructed to carry ballast water, ships which only operate in the jurisdictional waters of one country or in the jurisdictional waters of one country and on the high seas, warships, naval auxiliary ships or other ships on government non‑commercial service, or in respect of ballast water in sealed tanks, which is not to be discharged . Main ProvisionsThe Convention provides for two regulations that set out the standards to be met through ballast water exchange where a treatment system is not installed (the “D1 Standard”) and by ballast water treatment systems where these are installed on a ship (the “D2 Standard”) . In order to allow for future innovation, the Convention does provide a third way of achieving compliance by way of Regulation B‑3 which “allows for alternatives…provided that [they]…ensure at least the same level of protection to the environment, human health, property or resources and are approved in principle by the IMO”. For the purposes of this note however we shall focus on the D1 Standard and D2 Standard prescribed in the Convention. In order for a ship to be in compliance with the D1 Standard she must be capable of completing an exchange of ballast water which will achieve at least a 95% volumetric exchange using one of three IMO recognised methods for ballast water exchange such as the “sequential” and “flow‑through” methods. It should be noted that ships undertaking such operations should do so at least 200 nautical miles from the nearest land and in water at least 200 metres in depth. In the event that the ship is unable to comply with these requirements, any ballast water exchange should occur as far from the nearest land as possible and at the very least no less than 50 nautical miles from the nearest land and in water at least 200 metres deep. In addition, it would be prudent for owners to ensure that they are also familiar with any applicable local legislation in force pertaining to ballast water exchange (if any) so as to be able to comply with it, if their ship calls at a port or waters of the relevant jurisdiction. It should be noted that it is the intention for ballast water exchange to be phased out by 2019 , by which time it would be expected that all relevant ships would have installed on board a ballast water treatment system compliant with the D2 Standard. For a ballast water treatment system to achieve the D2 Standard it would need to be capable of treating ballast water to the prescribed performance standards such that following treatment the water would contain: 1. less than 10 viable organisms per m3 >50 micrometres in minimum dimension; 2. less than 10 viable organisms per millilitre < 50 micrometres in minimum dimension

and >10 micrometres in minimum dimension; and 3. less than the following concentrations of organisms or “Indicator Microbes”:

a. toxicogenic vibrio cholera: 1 colony forming unit (“cfu”) per 100 millilitre or 1 cfu gram of zooplankton samples; b. escherichia coli: 250 cfu per 100 millilitre; and c. intestinal enterococci: 100 cfu per 100 millilitres .

Under the Convention each ship will (inter alia) be required to have a “Ballast Water Management Plan” specific to that ship which must be approved by the ship’s flag state . This plan is to set out, amongst other things, safety procedures in respect of the crew

Watson, Farley & Williams February 2013

Resolution A.868(20).

4 Such as Brazil, Australia, Canada and the U.S.A.

5 See below.

Article 1.12 of the Convention.

7 Article 3.2 of the Convention. 8 A more detailed outline of the

provisions is available at: http://www.imo.org/About/ Conventions/ListOfConventions /Pages/International‑Convention‑for‑the‑Control‑and‑Management‑of‑Shipsʹ‑Ballast‑Water‑and‑Sediments‑(BWM).aspx

9 Regulation D‑1 of the Convention.

11 http://www.imo.org/Knowledge Centre/PapersAndArticlesByIMO Staff/Documents/Invasive species by DP.pdf

12 Per the MEPC 55/23 Annex 1 definition this is ʺa process by which a ballast tank intended for the carriage of ballast water is first emptied and the re‑filled with replacement ballast water to achieve at least a 95 per cent volumetric exchangeʺ. There are stability/trim risks associated with such procedures which could impact on crew and vessel safety.

13 Per the MEPC 55/23 Annex 1 definition this is ʺa process by which the replacement ballast water is pumped into a ballast tank intended for the carriage of ballast water, allowing water to flow through overflow or other arrangements.ʺ This method appears to be preferred over the ʺsequentialʺ method as it does not expose the crew and the vessel to stability/trim risk.

14 Regulation B‑4.1 of the Convention. See also the Maritime and Coastguard Agency Marine Guidance Note MGN 363 (M+F) The Control and Management of Ships Ballast Water and Sediments.

15 Ibid.16 http://www.imo.org/Knowledge

Centre/PapersAndArticlesByIMO Staff/Documents/Invasive species by DP.pdf

17 Maritime and Coastguard Agency Marine Guidance Note MGN 363 (M+F) The Control and Management of Ships Ballast Water and Sediments .

18 Regulation B‑1 of the Convention.

In many cases, quite apart from the ecological effects of such invasion and establishment of non‑indigenous species into ecosystems, they can have serious socioeconomic ramifications, by having a negative impact on local trade. In response to this issue in 1991 the IMO’s Marine Environment Protection Committee (the “MEPC”) adopted the “Guidelines for Preventing the Introduction of Unwanted Organisms and Pathogens from Ships’ Ballast Waters and Sediment Discharges”, on the basis of which in 1993 the IMO Assembly adopted Resolution A.774(18). Thereafter, these guidelines were revised and replaced in 1997 by the adoption by the IMO Assembly of the “Guidelines for the Control and Management of Ships’ Ballast Water to Minimise the Transfer of Harmful Aquatic Organisms and Pathogens ” (the “1997 Guidelines”). Both the 1997 Guidelines and the earlier IMO guidelines were not legally binding on any state, but mere recommendations in an attempt to standardise the practices and measures adopted by countries to deal with the problem of transfer of aquatic organisms through ballast water. To minimise the introduction of invasive species into their ports and jurisdictional waters, a number of countries have taken unilateral action adopting their own national, legally binding legislation regulating ballast water management. In 2004, after 14 years of negotiation and debate, the IMO adopted the “International Convention for the Control and Management of Shipsʹ Ballast Water and Sediments” (the “Convention”). The IMO is now in the process of seeking ratification of the Convention. Once the Convention is ratified, it (and its supporting guidelines ) will supersede the 1997 Guidelines.

Species Origin Area of Release Impact North American Comb Jellyfish Mnemiopsis leidyi

Eastern Seaboard of the Americas.

Black, Azov and Caspian Seas.

Reproduces rapidly under favourable conditions. Feeds excessively on zooplankton. Depletes zooplankton stocks, altering food web and ecosystem function. Contributed to the collapse of Black and Asov Sea fisheries in the 1990s. Now threatens similar impact in Caspian Sea.

Mitten Crab Eiocheir sinensis

Northern Asia.

Western Europe, Baltic Sea and West Coast North America.

Undergoes mass migrations for reproductive purposes. Burrows into river banks and dykes causing erosion and siltation. Preys on native fish and invertebrate species, causing local extinctions during population outbreaks. Interferes with fishing activities.

Asian Kelp Undaria pinnatifida

Northern Asia.

Southern Australia, New Zealand, West Coast of the United States, Europe and Argentina.

Grows and spreads rapidly. Displaces native algae and marine life. Alters habitat, ecosystem and food web. May affect commercial shellfish stocks through space competition and alteration of habitat.

Application of the Convention The Convention applies to all types of ships whatsoever operating in the aquatic environment, including submersibles, floating craft, floating platforms, FSUs and FPSOs , with only a few exceptions, such as ships which are not designed or constructed to carry ballast water, ships which only operate in the jurisdictional waters of one country or in the jurisdictional waters of one country and on the high seas, warships, naval auxiliary ships or other ships on government non‑commercial service, or in respect of ballast water in sealed tanks, which is not to be discharged . Main ProvisionsThe Convention provides for two regulations that set out the standards to be met through ballast water exchange where a treatment system is not installed (the “D1 Standard”) and by ballast water treatment systems where these are installed on a ship (the “D2 Standard”) . In order to allow for future innovation, the Convention does provide a third way of achieving compliance by way of Regulation B‑3 which “allows for alternatives…provided that [they]…ensure at least the same level of protection to the environment, human health, property or resources and are approved in principle by the IMO”. For the purposes of this note however we shall focus on the D1 Standard and D2 Standard prescribed in the Convention. In order for a ship to be in compliance with the D1 Standard she must be capable of completing an exchange of ballast water which will achieve at least a 95% volumetric exchange using one of three IMO recognised methods for ballast water exchange such as the “sequential” and “flow‑through” methods. It should be noted that ships undertaking such operations should do so at least 200 nautical miles from the nearest land and in water at least 200 metres in depth. In the event that the ship is unable to comply with these requirements, any ballast water exchange should occur as far from the nearest land as possible and at the very least no less than 50 nautical miles from the nearest land and in water at least 200 metres deep. In addition, it would be prudent for owners to ensure that they are also familiar with any applicable local legislation in force pertaining to ballast water exchange (if any) so as to be able to comply with it, if their ship calls at a port or waters of the relevant jurisdiction. It should be noted that it is the intention for ballast water exchange to be phased out by 2019 , by which time it would be expected that all relevant ships would have installed on board a ballast water treatment system compliant with the D2 Standard. For a ballast water treatment system to achieve the D2 Standard it would need to be capable of treating ballast water to the prescribed performance standards such that following treatment the water would contain: 1. less than 10 viable organisms per m3 >50 micrometres in minimum dimension; 2. less than 10 viable organisms per millilitre < 50 micrometres in minimum dimension

and >10 micrometres in minimum dimension; and 3. less than the following concentrations of organisms or “Indicator Microbes”:

a. toxicogenic vibrio cholera: 1 colony forming unit (“cfu”) per 100 millilitre or 1 cfu gram of zooplankton samples; b. escherichia coli: 250 cfu per 100 millilitre; and c. intestinal enterococci: 100 cfu per 100 millilitres .

Under the Convention each ship will (inter alia) be required to have a “Ballast Water Management Plan” specific to that ship which must be approved by the ship’s flag state . This plan is to set out, amongst other things, safety procedures in respect of the crew

Resolution A.868(20).

4 Such as Brazil, Australia, Canada and the U.S.A.

5 See below.

7 Article 3.2 of the Convention. 8 A more detailed outline of the

provisions is available at: http://www.imo.org/About/ Conventions/ListOfConventions /Pages/International‑Convention‑for‑the‑Control‑and‑Management‑of‑Shipsʹ‑Ballast‑Water‑and‑Sediments‑(BWM).aspx

11 http://www.imo.org/Knowledge Centre/PapersAndArticlesByIMO Staff/Documents/Invasive species by DP.pdf

12 Per the MEPC 55/23 Annex 1 definition this is ʺa process by which a ballast tank intended for the carriage of ballast water is first emptied and the re‑filled with replacement ballast water to achieve at least a 95 per cent volumetric exchangeʺ. There are stability/trim risks associated with such procedures which could impact on crew and vessel safety.

13 Per the MEPC 55/23 Annex 1 definition this is ʺa process by which the replacement ballast water is pumped into a ballast tank intended for the carriage of ballast water, allowing water to flow through overflow or other arrangements.ʺ This method appears to be preferred over the ʺsequentialʺ method as it does not expose the crew and the vessel to stability/trim risk.

14 Regulation B‑4.1 of the Convention. See also the Maritime and Coastguard Agency Marine Guidance Note MGN 363 (M+F) The Control and Management of Ships Ballast Water and Sediments.

15 Ibid.16 http://www.imo.org/Knowledge

Centre/PapersAndArticlesByIMO Staff/Documents/Invasive species by DP.pdf

17 Maritime and Coastguard Agency Marine Guidance Note MGN 363 (M+F) The Control and Management of Ships Ballast Water and Sediments .

18 Regulation B‑1 of the Convention.

and the ship in relation to ballast water management, actions and practices for the implementation of the ballast water management requirements of the Convention, procedures for the disposal of sediments and reporting requirements and must also designate an officer on board the ship who will be in charge for the proper implementation of the plan . Under the Convention, ships will also be required to maintain a “Ballast Water Record Book”. This book will record when ballast water is: 1. taken on board; 2. circulated or treated for Ballast Water Management purposes; or 3. discharged into the sea. It should also record when ballast water is discharged to a reception facilityand any accidental or other exceptional discharges of ballast water . Further, all ships of 400 gross tonnage and above, excluding floating platforms, FSUs and FPSOs, will also be required to obtain and carry an “International Ballast Water Management Certificate” (the “BWM Certificate”) certifying compliance of the relevant ship with the Convention . Ships are to be surveyed to obtain the BWM Certificate and thereafter to undergo further surveys to maintain it. The responsibility for the survey of the ship and the issuance of the BWM Certificate will lie primarily with the ship’s flag state . Should the Convention be ratified in the near future, these ballast water standards would be phased in over a relative short period of time, and it is expected that, as a result, many ships will need to be retro‑fitted with a ballast water treatment system to ensure compliance. However, in the interim, it would be required that all ballast water is ejected mid ocean per the D1 Standard to minimise the impact of any invasive organisms. The table below produced by the Maritime and Coastguard Agency (the “MCA”) sets out the application dates of the D1 Standard and the D2 Standard, based upon the ballast water capacity of a ship and the date when she was built.

= To be applied by the first intermediate or renewal survey, whichever occurs first after the anniversary

Vessel Ballast Capacity (m 3 )

Build Date

Application Dates of the D1 and D2 Standard

2009 2010 2011 2012 2013 2014 2015 2016 2017

<1500 Before 2009

D1 or D2 D2

In/After 2009

> 1500 < 5000

Before 2009

D1 or D2 D2

In/After 2009

> 5000 Before 2012

D1 or D2 D2

In/After 2012

date of delivery.

The Convention allows the granting of exemptions to ships on a voyage or voyages between specified ports or locations; or to ships operating exclusively between specified ports or locations, or to ships which do not mix ballast water or sediments other than between the ports or locations mentioned above . Ferry routes are an example of possible local trading routes which may be eligible for this type of exemption. Such exemptions are to be granted for a period not exceeding 5 years by countries which are parties to the Convention in relation to their jurisdictional waters, must be based on risk assessment guidelines developed by the MEPC and must not be harmful for, or adversely affect the environment, human health, property or resources of other countries . The exemptions must be notified to the IMO and communicated to the other countries which are parties to the Convention in order to become effective . Ballast water treatment systems A range of ballast water treatment systems have been appearing on the market offering different methods for the treatment of ballast water including the use of filters, UV, ozonation and de‑oxygenation, to name a few . One factor (of many, including ship type, ballast water capacity, available installation space, availability of parts and general back‑up and support of the manufacturer) to bear in mind when considering which treatment system to opt for is the trading area of the ship . Some treatment systems are of more relevance to certain trading areas than others may be. For example, some jurisdictions (including the US) are introducing more stringent performance standards to be met and so it is currently possible to install a treatment system that would comply with the D2 Standard but still fall foul of local standards. It is important therefore to ensure that any system fitted will comply with the D2 Standard plus the standards applicable in any jurisdiction in which the ship will be calling (should these require performance in excess of the D2 Standard). If there is any doubt, it would be prudent for owners to seek input from their preferred classification society for guidance in the first instance. New MEPC guidelines The Convention provides that a number of issues are to be dealt with in accordance with guidelines developed or to be developed by the IMO . To facilitate implementation and uniform interpretation and application of the Convention and to provide guidance to flag administrations and port authorities, the MEPC has developed a series of new Guidelines in support of the Convention, which deal with a number of specific aspects of the Convention. In particular, these Guidelines, which constitute an important supplement to the Convention, deal with sediment reception facilities (G1) , ballast water sampling (G2), ballast water management equivalent compliance (G3) , ballast water management and development of ballast water management plans (G4) , ballast water reception facilities (G5) , ballast water exchange (G6) , risk assessment for the granting of exemptions (under Regulation A‑4 of the Convention)(G7) , approval of ballast water management systems (G8) , approval of ballast water management systems which make use of active substances (G9) , approval and oversight of prototype ballast water treatment technology programmes (G10) , ballast water exchange design and construction standards (G11) , design and construction to facilitate sediment control on ships (G12) , additional measures regarding ballast water management including emergency situations (G13) and designation of areas for ballast water exchange (G14) .

Regulation B‑1 of the Convention.

20 Regulation B‑2 and Appendix II to the Convention.

21 Regulations E‑1 and E‑2 of the Convention.

22 Regulation E‑2 of the Convention. According to Regulation E‑3 of the Convention, at the request of a ship’s flag state, the survey of the ship and the issuance or endorsement of its BWM Certificate may be conducted by another state which is a party to the Convention.

23 Regulation B‑3 of the Convention. See also the MCA Marine Guidance Note MGN 363 (M+F) “The Control and Management of Ships’ Ballast Water and Sediments”.

See Regulation A‑4 of the Convention. These are exemptions to any requirements to apply Regulations B‑3 or C‑1 of the Convention.

25 See below. These are the “Guidelines for risk assessment under Regulation A‑4 of the Convention of the BWM Convention” (G7).

26 Regulation A‑4.3 of the Convention.

28 For example, the sampling of the ships’ ballast water by port authorities of countries parties to the Convention under Article 9.1(c) of the Convention.

29 Resolution MEPC.152(55).30 Resolution MEPC.173(58).31 Resolution MEPC.123(53).32 Resolution MEPC.127(53).33 Resolution MEPC.153(55).34 Resolution MEPC.124(53).35 Resolution MEPC.162(56).36 Resolution MEPC.174(58).37 Resolution MEPC.169(57).38 Resolution MEPC.140(54).39 Resolution MEPC.149(55).40 Resolution MEPC.209(63).41 Resolution MEPC.161(56).42 Resolution MEPC.151(55).

and the ship in relation to ballast water management, actions and practices for the implementation of the ballast water management requirements of the Convention, procedures for the disposal of sediments and reporting requirements and must also designate an officer on board the ship who will be in charge for the proper implementation of the plan . Under the Convention, ships will also be required to maintain a “Ballast Water Record Book”. This book will record when ballast water is: 1. taken on board; 2. circulated or treated for Ballast Water Management purposes; or 3. discharged into the sea. It should also record when ballast water is discharged to a reception facilityand any accidental or other exceptional discharges of ballast water . Further, all ships of 400 gross tonnage and above, excluding floating platforms, FSUs and FPSOs, will also be required to obtain and carry an “International Ballast Water Management Certificate” (the “BWM Certificate”) certifying compliance of the relevant ship with the Convention . Ships are to be surveyed to obtain the BWM Certificate and thereafter to undergo further surveys to maintain it. The responsibility for the survey of the ship and the issuance of the BWM Certificate will lie primarily with the ship’s flag state . Should the Convention be ratified in the near future, these ballast water standards would be phased in over a relative short period of time, and it is expected that, as a result, many ships will need to be retro‑fitted with a ballast water treatment system to ensure compliance. However, in the interim, it would be required that all ballast water is ejected mid ocean per the D1 Standard to minimise the impact of any invasive organisms. The table below produced by the Maritime and Coastguard Agency (the “MCA”) sets out the application dates of the D1 Standard and the D2 Standard, based upon the ballast water capacity of a ship and the date when she was built.

= To be applied by the first intermediate or renewal survey, whichever occurs first after the anniversary

Vessel Ballast Capacity (m 3 )

Build Date

Application Dates of the D1 and D2 Standard

2009 2010 2011 2012 2013 2014 2015 2016 2017

<1500 Before 2009

D1 or D2 D2

In/After 2009

> 1500 < 5000

Before 2009

D1 or D2 D2

In/After 2009

> 5000 Before 2012

D1 or D2 D2

In/After 2012

date of delivery.

The Convention allows the granting of exemptions to ships on a voyage or voyages between specified ports or locations; or to ships operating exclusively between specified ports or locations, or to ships which do not mix ballast water or sediments other than between the ports or locations mentioned above . Ferry routes are an example of possible local trading routes which may be eligible for this type of exemption. Such exemptions are to be granted for a period not exceeding 5 years by countries which are parties to the Convention in relation to their jurisdictional waters, must be based on risk assessment guidelines developed by the MEPC and must not be harmful for, or adversely affect the environment, human health, property or resources of other countries . The exemptions must be notified to the IMO and communicated to the other countries which are parties to the Convention in order to become effective . Ballast water treatment systems A range of ballast water treatment systems have been appearing on the market offering different methods for the treatment of ballast water including the use of filters, UV, ozonation and de‑oxygenation, to name a few . One factor (of many, including ship type, ballast water capacity, available installation space, availability of parts and general back‑up and support of the manufacturer) to bear in mind when considering which treatment system to opt for is the trading area of the ship . Some treatment systems are of more relevance to certain trading areas than others may be. For example, some jurisdictions (including the US) are introducing more stringent performance standards to be met and so it is currently possible to install a treatment system that would comply with the D2 Standard but still fall foul of local standards. It is important therefore to ensure that any system fitted will comply with the D2 Standard plus the standards applicable in any jurisdiction in which the ship will be calling (should these require performance in excess of the D2 Standard). If there is any doubt, it would be prudent for owners to seek input from their preferred classification society for guidance in the first instance. New MEPC guidelines The Convention provides that a number of issues are to be dealt with in accordance with guidelines developed or to be developed by the IMO . To facilitate implementation and uniform interpretation and application of the Convention and to provide guidance to flag administrations and port authorities, the MEPC has developed a series of new Guidelines in support of the Convention, which deal with a number of specific aspects of the Convention. In particular, these Guidelines, which constitute an important supplement to the Convention, deal with sediment reception facilities (G1) , ballast water sampling (G2), ballast water management equivalent compliance (G3) , ballast water management and development of ballast water management plans (G4) , ballast water reception facilities (G5) , ballast water exchange (G6) , risk assessment for the granting of exemptions (under Regulation A‑4 of the Convention)(G7) , approval of ballast water management systems (G8) , approval of ballast water management systems which make use of active substances (G9) , approval and oversight of prototype ballast water treatment technology programmes (G10) , ballast water exchange design and construction standards (G11) , design and construction to facilitate sediment control on ships (G12) , additional measures regarding ballast water management including emergency situations (G13) and designation of areas for ballast water exchange (G14) .

Regulation B‑1 of the Convention.

20 Regulation B‑2 and Appendix II to the Convention.

21 Regulations E‑1 and E‑2 of the Convention.

22 Regulation E‑2 of the Convention. According to Regulation E‑3 of the Convention, at the request of a ship’s flag state, the survey of the ship and the issuance or endorsement of its BWM Certificate may be conducted by another state which is a party to the Convention.

23 Regulation B‑3 of the Convention. See also the MCA Marine Guidance Note MGN 363 (M+F) “The Control and Management of Ships’ Ballast Water and Sediments”.

See Regulation A‑4 of the Convention. These are exemptions to any requirements to apply Regulations B‑3 or C‑1 of the Convention.

25 See below. These are the “Guidelines for risk assessment under Regulation A‑4 of the Convention of the BWM Convention” (G7).

28 For example, the sampling of the ships’ ballast water by port authorities of countries parties to the Convention under Article 9.1(c) of the Convention.

29 Resolution MEPC.152(55).30 Resolution MEPC.173(58).31 Resolution MEPC.123(53).32 Resolution MEPC.127(53).33 Resolution MEPC.153(55).34 Resolution MEPC.124(53).35 Resolution MEPC.162(56).36 Resolution MEPC.174(58).37 Resolution MEPC.169(57).38 Resolution MEPC.140(54).39 Resolution MEPC.149(55).40 Resolution MEPC.209(63).41 Resolution MEPC.161(56).42 Resolution MEPC.151(55).

Ratification and entry into force In order for the Convention to become legally binding, it must be ratified by: 1. at least 30 states; 2. together representing 35% of all merchant shipping tonnage. According to the IMO, as of 2 January 2013, 36 states have ratified the Convention, which together represent 29.07% of all merchant shipping tonnage. Should a country or countries representing the remaining required 5.93% of merchant shipping tonnage ratify the Convention, it would come into force 12 months from the date that this country ratified it. However, it would only bind those countries which had ratified it. The table below sets out those countries which are parties to the Convention as at 2 January 2013.

Enforcement Once the Convention enters into force, each country that has become a party to the Convention will be responsible for enforcing it with respect to the ships registered under its own flag and those entering its jurisdictional waters. In particular, a country which is a party to the Convention must establish sanctions for any violation of the requirements of the Convention by ships registered under its flag, wherever such violation occurs . In addition, any country which is a party to the Convention must establish sanctions for any violation of the Convention within its jurisdiction . Port state control will play an important role in the enforcement of the Convention. In particular, ships may be inspected at a port or offshore terminal of a country which is a party to the Convention by port state control officers for the purpose of confirming that they comply with the Convention . Such inspection may include verification of the existence on board of a valid BWM Certificate, inspection of the ship’s Ballast Water Record Book and sampling of the ship’s ballast water . These officers will also be able to require a more detailed inspection if they identify any issues (in particular, if the ship does not carry a valid BWM Certificate or if there are clear grounds for believing that the ship or its equipment do not correspond with the particulars of the BWM Certificate or that the master and crew are not familiar with or have not implemented essential ballast water management procedures) . In such case, the port state control officers may prevent the ship from discharging any ballast water until they are satisfied that it is safe for them to do so .

Parties to the Convention Current Status Albania, Antigua and Barbuda, Barbados, Brazil, Canada, Cook Islands, Croatia, Denmark, Egypt, France, Iran, Kenya, Kiribati, Lebanon, Liberia, Malaysia, Maldives, Marshall Islands, Mexico, Mongolia, Montenegro, Netherlands, Nigeria, Niue, Norway, Palau, Republic of Korea, Russian Federation, Saint Kitts and Nevis, Sierra Leone, South Africa, Spain, Sweden, Syrian Arab Republic, Trinidad and Tobago, Tuvalu.

36 States (representing 29.07% of merchant

tonnage).

The UK position The UK has not yet ratified the Convention. However, work is currently being done by the MCA for the development of implementing legislation and the ratification of the Convention. The Marine Guidance Note MGN 81 (M+F) published by the MCA in August 1998 provided information on IMO’s 1997 Guidelines and urged owners to ensure that ships discharging ballast water in UK waters comply with them. Further, the Marine Guidance Note MGN 363 (M+F) published by the MCA in April 2008 provided information and guidance in relation to the Convention and its supporting guidelines pending its ratification by the UK and urged the owners to start implementing the requirements of the Convention. The above two marine guidance notes remain in place pending ratification of the Convention by the UK. Concerns about the implementation of the Convention Although the Convention is close to achieving the minimum international tonnage participation for its entry into force , there are a number of concerns in the shipping industry in relation to its application, which are perceived as hurdles to its ratification. One such concern is that there may not be sufficient repair yard capacity to undertake the required work load (as there are only around one hundred yards capable of doing the work), and that because of this, many ships will be unable to trade while they wait to be fitted with the required equipment, particularly following the transition from the D1 Standard to the D2 Standard. Another concern that has been raised is with respect to the cost of making such changes to existing ships. It has been estimated that the cost of fitting such equipment will cost between one and five million dollars per ship. A number of industry concerns in relation to the Convention were highlighted recently in a paper jointly prepared by a number of shipping countries and organisations and submitted to the MEPC for discussion during its 64 session (the “MEPC 64”). The paper identified four areas of concern, namely: 1. insufficient transparency and robustness of the type approved ballast water

treatment systems and of the approval procedures per the Guidelines for approval of ballast water management systems (G8);

2. insufficient availability of ballast water management systems for installation, as well as of yard facilities to install them, due to the increasingly compressed timetable set out in the Convention;

3. impracticability of ships’ compliance with the survey and certification requirements set out in the Convention within the 12 months’ period after the minimum requirements for its entry into force have been met; and

4. uncertainties about the port state control sampling procedures and their compatibility with the type approval procedures established under Guidelines G8, with the potential for type approved ballast water treatment systems to be found non‑compliant in port state control inspections.

At the MEPC 64, which took place from 1 to 5 October 2012, it was decided, amongst other things, that an IMO Assembly resolution in relation to the implementation of Regulation B‑3 of the Convention would be prepared for adoption in 2013. The MEPC also instructed the Sub‑Committee on Bulk Liquids and Gases (the “BLG”) to consider sampling issues during its 17 session in 2013. The MEPC concluded that there are appropriate ballast water technologies available for compliance with the D2 Standard of the Convention and did not agree that the current Guidelines for approval of ballast water management systems (G8) require amendment at this stage. It also approved a circular allowing the issuance of BWM Certificates prior to entry into force of the Convention but with their validity applying from its entry into force .

http://www.imo.org/About/ Conventions/Pages/Home.aspx

44 Article 8.1 of the Convention.45 Article 8.2 of the Convention.46 Article 9.1 of the Convention.47 Ibid.48 Article 9.2 of the Convention.49 Article 9.3 of the Convention.

50 http://www.mcga.gov.uk/c4mca /mgn0081.pdf.

51 http://www.mcga.gov.uk/c4mca /mgn_363.pdf.

52 See above.53 Such concerns were raised in a

paper dated 23 December 2011 submitted by Japan to the IMO under the title “Present Status of Availability of the Ballast Water Management Systems”.

54 See the Lloyds List article “Experts Warn Ballast Water Timetable Cannot be Met”, Friday 24 February 2012.

55 “Challenges to effective implementation of the BWM Convention”, 27 July 2012 (MEPC 64/2/18) submitted by Liberia, the Marshall Islands, Panama, BIMCO, INTERTANKO, CLIA,INTERCARGO, InterManager, IPTA, NACE and WSC (http://www.intertanko.com/ upload/93326/MEPC 64‑2‑18 ‑ Challenges to effective implementation of the BWM Convention.pdf)

56 See a summary of the MEPC64 outcome at: http://www.imo.org/Media Centre/MeetingSummaries/ MEPC/Pages/MEPC‑64th‑session.aspx

Ratification and entry into force In order for the Convention to become legally binding, it must be ratified by: 1. at least 30 states; 2. together representing 35% of all merchant shipping tonnage. According to the IMO, as of 2 January 2013, 36 states have ratified the Convention, which together represent 29.07% of all merchant shipping tonnage. Should a country or countries representing the remaining required 5.93% of merchant shipping tonnage ratify the Convention, it would come into force 12 months from the date that this country ratified it. However, it would only bind those countries which had ratified it. The table below sets out those countries which are parties to the Convention as at 2 January 2013.

Enforcement Once the Convention enters into force, each country that has become a party to the Convention will be responsible for enforcing it with respect to the ships registered under its own flag and those entering its jurisdictional waters. In particular, a country which is a party to the Convention must establish sanctions for any violation of the requirements of the Convention by ships registered under its flag, wherever such violation occurs . In addition, any country which is a party to the Convention must establish sanctions for any violation of the Convention within its jurisdiction . Port state control will play an important role in the enforcement of the Convention. In particular, ships may be inspected at a port or offshore terminal of a country which is a party to the Convention by port state control officers for the purpose of confirming that they comply with the Convention . Such inspection may include verification of the existence on board of a valid BWM Certificate, inspection of the ship’s Ballast Water Record Book and sampling of the ship’s ballast water . These officers will also be able to require a more detailed inspection if they identify any issues (in particular, if the ship does not carry a valid BWM Certificate or if there are clear grounds for believing that the ship or its equipment do not correspond with the particulars of the BWM Certificate or that the master and crew are not familiar with or have not implemented essential ballast water management procedures) . In such case, the port state control officers may prevent the ship from discharging any ballast water until they are satisfied that it is safe for them to do so .

Parties to the Convention Current Status Albania, Antigua and Barbuda, Barbados, Brazil, Canada, Cook Islands, Croatia, Denmark, Egypt, France, Iran, Kenya, Kiribati, Lebanon, Liberia, Malaysia, Maldives, Marshall Islands, Mexico, Mongolia, Montenegro, Netherlands, Nigeria, Niue, Norway, Palau, Republic of Korea, Russian Federation, Saint Kitts and Nevis, Sierra Leone, South Africa, Spain, Sweden, Syrian Arab Republic, Trinidad and Tobago, Tuvalu.

36 States (representing 29.07% of merchant

tonnage).

The UK position The UK has not yet ratified the Convention. However, work is currently being done by the MCA for the development of implementing legislation and the ratification of the Convention. The Marine Guidance Note MGN 81 (M+F) published by the MCA in August 1998 provided information on IMO’s 1997 Guidelines and urged owners to ensure that ships discharging ballast water in UK waters comply with them. Further, the Marine Guidance Note MGN 363 (M+F) published by the MCA in April 2008 provided information and guidance in relation to the Convention and its supporting guidelines pending its ratification by the UK and urged the owners to start implementing the requirements of the Convention. The above two marine guidance notes remain in place pending ratification of the Convention by the UK. Concerns about the implementation of the Convention Although the Convention is close to achieving the minimum international tonnage participation for its entry into force , there are a number of concerns in the shipping industry in relation to its application, which are perceived as hurdles to its ratification. One such concern is that there may not be sufficient repair yard capacity to undertake the required work load (as there are only around one hundred yards capable of doing the work), and that because of this, many ships will be unable to trade while they wait to be fitted with the required equipment, particularly following the transition from the D1 Standard to the D2 Standard. Another concern that has been raised is with respect to the cost of making such changes to existing ships. It has been estimated that the cost of fitting such equipment will cost between one and five million dollars per ship. A number of industry concerns in relation to the Convention were highlighted recently in a paper jointly prepared by a number of shipping countries and organisations and submitted to the MEPC for discussion during its 64 session (the “MEPC 64”). The paper identified four areas of concern, namely: 1. insufficient transparency and robustness of the type approved ballast water

treatment systems and of the approval procedures per the Guidelines for approval of ballast water management systems (G8);

2. insufficient availability of ballast water management systems for installation, as well as of yard facilities to install them, due to the increasingly compressed timetable set out in the Convention;

3. impracticability of ships’ compliance with the survey and certification requirements set out in the Convention within the 12 months’ period after the minimum requirements for its entry into force have been met; and

4. uncertainties about the port state control sampling procedures and their compatibility with the type approval procedures established under Guidelines G8, with the potential for type approved ballast water treatment systems to be found non‑compliant in port state control inspections.

At the MEPC 64, which took place from 1 to 5 October 2012, it was decided, amongst other things, that an IMO Assembly resolution in relation to the implementation of Regulation B‑3 of the Convention would be prepared for adoption in 2013. The MEPC also instructed the Sub‑Committee on Bulk Liquids and Gases (the “BLG”) to consider sampling issues during its 17 session in 2013. The MEPC concluded that there are appropriate ballast water technologies available for compliance with the D2 Standard of the Convention and did not agree that the current Guidelines for approval of ballast water management systems (G8) require amendment at this stage. It also approved a circular allowing the issuance of BWM Certificates prior to entry into force of the Convention but with their validity applying from its entry into force .

http://www.imo.org/About/ Conventions/Pages/Home.aspx

44 Article 8.1 of the Convention.45 Article 8.2 of the Convention.46 Article 9.1 of the Convention.47 Ibid.48 Article 9.2 of the Convention.49 Article 9.3 of the Convention.

50 http://www.mcga.gov.uk/c4mca /mgn0081.pdf.

51 http://www.mcga.gov.uk/c4mca /mgn_363.pdf.

52 See above.53 Such concerns were raised in a

paper dated 23 December 2011 submitted by Japan to the IMO under the title “Present Status of Availability of the Ballast Water Management Systems”.

54 See the Lloyds List article “Experts Warn Ballast Water Timetable Cannot be Met”, Friday 24 February 2012.

55 “Challenges to effective implementation of the BWM Convention”, 27 July 2012 (MEPC 64/2/18) submitted by Liberia, the Marshall Islands, Panama, BIMCO, INTERTANKO, CLIA,INTERCARGO, InterManager, IPTA, NACE and WSC (http://www.intertanko.com/ upload/93326/MEPC 64‑2‑18 ‑ Challenges to effective implementation of the BWM Convention.pdf)

56 See a summary of the MEPC64 outcome at: http://www.imo.org/Media Centre/MeetingSummaries/ MEPC/Pages/MEPC‑64th‑session.aspx

Other considerations It is clear from the above that the entry into force and the implementation of the Convention will present considerable challenges for the shipping industry. Going forward, owners would be well advised to prepare for the entry into force of the Convention and for compliance with its requirements. If they qualify for an exemption under Regulation A‑4 of the Convention, they should take steps with their flag state, as the granting of such exemptions and their effectiveness requires risk assessment and notifications . Given the short time for compliance under the timetable of the Convention, the granting of such exemptions has become very important in certain jurisdictions. Owners should consider the issue of ballast water treatment systems when negotiating any newbuilding contracts to ensure that any ships being delivered will be in compliance with the Convention. A review of existing newbuilding contracts should be considered to ensure that the installation of such systems has been addressed. Further, it would be prudent for owners to draw up plans for the scheduling of ballast water system retro‑fitting to minimise as much as possible the impact on the trading of their ships. Since this is new technology, retrofitting existing ships or installing ballast water treatment systems in newbuildings is likely to present technical challenges. There are currently 28 type approved ballast water treatment systems but selection of a suitable system for installation will depend on a number of technical, financial and operational factors, including the ship’s intended trading pattern, and must in any event satisfy owners’ specific requirements. With respect to newbuilding contracts or contracts for the installation of ballast water treatment systems on existing ships, care should be taken in the contract for the correct allocation of design risk and responsibility in relation to the incorporation of such systems, their proper integration with the other systems of the ship and the ultimate compliance of the ship, upon her delivery by the yard, with the requirements of the Convention and any other relevant regulatory authorities (for example, the laws and regulations of the jurisdictions in which the ship is to trade). Ensuring compliance with the requirements of the Convention will form part of technical managers’ obligations under shipmanagement agreements with the owners. These may include preparing a Ballast Water Management Plan and procuring its approval by the ship’s flag state, providing training for the crew in relation to the ballast water management procedures, arranging for the ships to be surveyed and obtaining the BWM Certificate required by the Convention. The Convention will create a new regime for compliance in relation to ballast water management and related shipboard procedures which will need to be observed at all times. Compliance with the requirements of the Convention will be important from the point of view of ships’ financiers and likely to be the subject of conditions precedent in loan and other finance documentation. In the context of time charters, compliance with the requirements of the Convention will be important from the charterers’ point of view, as it may affect the use of the ship and will form part of the owners’ obligations under the charter in relation to the vessel and compliance with applicable laws and regulations. Operational issues may arise as a result of compliance with the Convention, such as the possibility of a ship’s deviation for the purposes of carrying out ballast water exchange mid‑ocean. Port state control monitoring and inspections may lead to congestion and delays in ports. It should be noted in this connection that Regulation B‑4.3 of the Convention provides that the ships will not be required to deviate from its intended voyage or delay the voyage in order to comply with the water ballast exchange requirements. Further, Article 12 of the Convention provides that all possible efforts must

See above.

58 If the ship’s flag state is a party to the Convention and the Convention has entered into force, compliance with the requirements of the Convention will be compulsory under the laws of the flag state and the rules and requirements of the ship’s class.

09 MARITIME BRIEFING: BALLAST WATER

be made to avoid undue delays or detention of ships as a result of port state control inspections, checks and other enforcement procedures. The Article goes further to provide that any such undue delay or detention shall entitle the ship to compensation . Nevertheless, such issues are likely to arise in practice and affect the ships’ operation . The ballast water exchange itself may cause delays in the voyage which is being performed. In the context of time charters, any time spent mid‑ocean for the purposes of carrying out ballast water exchange should be expressly excluded from the periods over which speed and fuel consumption of the ship are measured for the purposes of performance review of the ship under the charter. Should you like to discuss any of the matters raised in this briefing, please speak with a member of our team below or your regular contact at Watson, Farley & Williams.

Toby Royal Partner London [email protected] +44 20 7814 8014

Sandy Apostolatou Associate London [email protected] +44 20 7814 8192

wfw.com

All references to ‘Watson, Farley & Williams’ and ‘the firm’ in this brochure mean Watson, Farley & Williams LLP and/or its affiliated undertakings. Any reference to a ‘partner’ means a member of Watson, Farley & Williams LLP, or a member of or partner in an affiliated undertaking of either of them, or an employee or consultant with equivalent standing and qualification. This brochure is produced by Watson, Farley & Williams. It provides a summary of the legal issues, but is not intended to give specific legal advice. The situation described may not apply to your circumstances. If you require advice or have questions or comments on its subject, please speak to your usual contact at Watson, Farley & Williams. This publication constitutes attorney advertising. © Watson, Farley & Williams 2013 100‑000‑1848 LON KW KW 12/02/2013

60 In its revised standard liberty and deviation clause BIMCO has included ballast water exchange as one of the operational reasons which constitute permissible reasonable deviations of the ship.

Contacts