March 5, 2015


Can’t comply – won’t comply?

Since January 1 this year, ships operating in the Baltic and North Sea Sulphur Emission Control Areas (SECAs) have been required to burn fuel with a sulphur content no higher than 0.1%.

This long flagged change is one of the most significant pieces of environmental legislation yet enacted and in as little as five years’ time and a maximum of 10, the issue will go global, when a maximum sulphur cap of 0.5% comes into force. Long before that point, the industry needs to got to grips with whether compliance – and therefore competition – will be on the IMO’s famous level playing field..

This, for Roger Strevens, Chairman of the Trident Alliance is where the challenges begin. Strevens’ day job is with Norwegian-Swedish Wallenius Wilhelmsen Logistics, a pioneer of environmentally friendly shipping but it, along with fellow alliance members takes the view that without robust enforcement, non-compliance is always a temptation, creating an unacceptable distortion of the competitive environment.

This is because while IMO makes clear the expectations for compliance, policing and enforcement within national waters that falls to the relevant coastal state and in international ones, to the ship’s flag state. So for the most part shipping will be operating on good faith.

For now at least, WWL is operating in a low sulphur, high cost zone in which it is assumed that all stakeholders are working on the same basis. In the week that we speak, Germany’s maritime authority had published the results of a survey which found very high compliance with the requirements by ships in the Elbe River, something which bemuses Strevens.

“I can’t imagine there’s any shipping company cavalier enough to attempt gross non-compliance by running on heavy fuel oil within arm’s reach of the authorities. It’s like reporting on a very low incidence of robbery in police stations.”

More interesting he suggests, would be to know if any authority is testing out to territorial limits and if they are including vessels transiting their waters. His point is that port state inspections are all well and good but that they do not reflect which fuel is in use when the ship is underway.

The question this poses is that even if you knew that a vessel was non-compliant while in international waters, could there be an effective sanction imposed? Because the vessel is effectively under the jurisdiction of its flag state, the ability to take action puts them into a potential conflict of commercial interest.

If a flag takes tough measures against a vessel for deliberate non-compliance, they risk a mass exodus to more understanding flag states, an issue which will be super-sized when the global ECA comes into effect in 2020 or 2025.

“The point for the industry is that it’s not just about ports, it’s not just even about territorial waters, it’s all the stages between. What we have a theoretical rather than a practical answer,” he says. “But if we can’t sort that issue out in the relatively small geographical area of the European ECAs, what chance do we have to get the problem sorted on a global level? What we are doing is keeping the issue in view and helping people to connect the dots.”

“Truth be told enforcement is the pointy end of the stick. A year further on, I’m glad to say that enforcement is now a regular issue, but we’ve very much been picking the low hanging fruit and the really thorny bits are what’s left.”

That’s because while the options for compliance; low sulphur fuel, scrubbers or even the more exotic LNG as fuel are pretty well understood, the jurisdictional issue of enforcement is not something that can be quickly changed or adapted.

Strevens says the global cap could ‘massively amplify the problem’ and points out that rallying calls for refiners and owners to prepare for 2020 (or 2025) fail to reflect much more complex legal requirements. “When you’ve got a challenge to jurisdictional elements on the high seas like this, five years is not a long time to get things fixed. When you don’t know which date it will be. Which should you prepare for?”

So how does this enforcement happen? Industry chatter has mooted satellite monitoring directing ‘sniffer drones’ to home in on errant ships, but Strevens says we won’t see Trident Alliance-branded cutters interdicting vessels on the high seas and demanding to take an underway bunker fuel sample.

“We are not a policing entity. We strongly hold the view that it is the sole responsibility of the relevant authorities to do the enforcement. It would be ludicrous to try and establish a parallel vigilante or other group to sort out enforcement.”

Neither will the alliance act as the industry’s conscience by naming and shaming to provide a commercial disincentive. Strevens believes the vast majority will comply but that technical non-compliance is possible given the tiny margins involved. Even in cases of deliberate, persistence non compliance, the punishment must fit the crime.

“We’re not going to go down the naming and shaming route, neither do we want to step into the NGO role. We’re not trying to split the industry up. There are some authorities which are making quite a lot of progress in their own back yards but we want to also draw their attention to the open waters.”

“What I think everyone needs to understand is the need for more transparency and why that is a good thing. It is not to be feared, by ports or owners. Sharing information on levels of inspection would help promote that and charterers and shippers will increasingly look for this kind of data to support their decisions, so there are sound commercial reasons to do it.”

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