Ballast Water Management Convention enters into force on 8 September 2017
On 8 September 2016, Finland acceded to the IMO International Convention for the Control and Management of Ships’ Ballast Water and Sediments 2004 (“the Convention”) and brought the number of contracting states to 52, representing 35.14% of the world merchant shipping fleet, thus triggering the entry into force of the Convention 12 months later, on 8 September 2017. As at February 2017, the Convention has 54 contracting states, representing approximately 53.30% of the gross tonnage of the world’s merchant fleet. Among the signatories are the five countries (Panama, Liberia, Marshall Islands, Hong Kong and Singapore) accounting for more than half of the world’s trading vessel capacity.
The Convention establishes an international regime designed to regulate ballast water management to prevent, reduce and control pollution of the marine environment. Most modern vessels use ballast water to ensure that operations are carried out in a safe and efficient manner. Ballast water is pumped on board into designated tanks and it is pumped out as and when required, usually thousands of miles away from where the water was pumped in. The water pumped on board contains various marine organisms, some of whom will survive the long journey. When discharged, the transferred species may not only survive in the new environment, but may become invasive and alter the balance in the ecosystem and can even cause the local sea life to become extinct.
In order to protect the fragile marine ecosystems, the Convention was adopted in 2004. The Convention sets out various requirements that vessels must comply with. As of 8 September 2017, every ship flying the flag of the signatory country must:-
- have on board and implement a Ballast Water Management Plan (Regulation B-1);
- have on board a Ballast Water Record Book (Regulation B-2); and
- carry out Ballast Water Management and Ballast Water Exchange in accordance with set standards (Regulations B-3 and B-4).
The Convention also requires the signatory countries to apply the requirements of the Convention to the ships of non-parties to the Convention “as may be necessary” to ensure that they are not given more favourable treatment.
The Convention requires that, as from 8 September 2017, all ballast water exchange by the relevant vessels takes place, whenever possible, at least 200 nautical miles from the nearest land and in water at least 200 meters in depth. When the vessel is unable to do so, then the exchange must take place as far from the nearest land as possible and, in all cases, at least 50 nautical miles from the nearest land and in water at least 200 metres in depth (Regulation B-4 and Standard D-1). However, this is only a temporary solution and eventually ballast water will need to be treated before it is discharged in a new location, meaning that all vessels are required to have on-board an IMO certified ballast water treatment system (“BWTS”) in order to comply with Standard D-2. As of November 2016, there were 69 IMO type approved systems.
As the Convention currently stands, all new vessels must be fitted with an approved BWTS and existing vessels need to have one fitted by the first International Oil Pollution Prevention (“IOPP”) survey drydocking after 8 September 2017. When the Convention was adopted in 2004, it provided for a gradual implementation schedule, but that provided that all vessels had to have an approved system installed by the end of 2016, i.e. a deadline that has passed before the Convention has entered into force. Discussions of the potential new deadline for installation of an approved BWTS have been postponed to July 2017, just two months before the Convention enters into force, when the next IMO Marine Environment Protection Committee (“MEPC”) meeting takes place. One of the items on the MEPC’s agenda is whether the requirement for a ship to have an approved BWTS should be delayed by two years to give shipowners more time to fit the right equipment. It remains to be seen whether an extension will be agreed which would give the shipowners additional time for installation rather than having do it by the first IOPP survey drydocking after 8 September 2017.
It has been reported in the press that owners who have a special survey due after September 2017 are seeking to do it early in order to buy themselves a further five years to fit the necessary equipment.
With earnings at record lows, some shipowners may find it difficult to justify the extra capital expenditure, which can be up to several million US dollars, and may choose to sell their vessels for scrap instead. It is expected that a considerable number of vessels will be scrapped over the next few years and TradeWinds recently reported that the research of German Bank KfW indicates that on average 13% of the current global merchant fleet might be scrapped by 2020 due to upcoming special surveys and can be attributed to both the entering into force of the Convention and IMO regulations on the sulphur cap of the fuel used by vessels.
In addition to just addressing the question of whether to scrap or not, if a shipowner decides to install a ballast water treatment system they would need to decide which system to install. The US has stated that it will not ratify the Convention and has prescribed different, and more stringent, criteria in order for treatment systems to be approved by US Coast Guard (“USCG”). To date, the USCG has approved only three ballast water treatment systems and many other manufacturers have applied for USCG approval for their systems. What this will mean in practice is that vessels of any flag will not be able to ballast in US waters in the long run without an USCG-approved BWTS, which would limit the area where they would be able to trade. In the meantime, most of the IMO-approved systems have met the criteria to be accepted as Alternate Management Systems by the USCG, meaning that vessels fitted with those systems are allowed to ballast in US waters for a period of five years with the assumption that the manufacturer will eventually seek USCG approval.
Despite the possibility that the deadlines for installation of BWTS may be extended, there are certain requirements of the Convention that must be complied with by 8 September 2017. Therefore, if they have not done so already, shipowners should take the steps necessary to comply with these requirements and to put in place plans for installation of the BWTS in accordance with the Convention.