Circulars

Shoreline Insurance Managers and our US Consultant (Jeff Fredel ex USCG) worked very closely with Andrew Bardot of the IGA Secretariat this summer to make strong representation on the Hill in DC to demonstrate the efficacy of OPA 90 in the shipping industry and the effectiveness of the USCG in policing OPA 90; as opposed to MMC's apparent ineffectiveness in the offshore sector.

The Hill has gone quiet on this with the election and other pressing matters of late. However, the House Committee on Transportation and Infrastructure (which has primary jurisdiction in the House for potential changes to OPA 90) are cognisant that vessels pose a finite risk as opposed to the offshore sector and also more importantly that the USCG have introduced two increases since enactment of OPA 90 whereas the MMC has never introduced any increases. The next CPI increase should be in 2012 (we did not impose rate increases for the 2009 CPI increase - we simply adjusted the limits).  Our 2010 Annual Report Chairman's Report address this.

Having noticed an increased trend in incomplete/wrong information being provided for the processing of COFRs; we have amended our forms to be clearer.

It is very important to show who the Operator is (i.e. the company whose name the COFR will be in). If the Operator is different, we need to know who they are as well as their address. It is important to also be aware that where the Owner is not the Operator, our Members must ensure that a bridging letter is on board the vessel (wherein the owner gives the Operator permission to bareboat charter or operate the vessel). ALL sections of this form must be completed, including the type of company AND the day/month/year and place of incorporation.

The USCG are trying to be very user friendly in processing COFRS a lot more quickly. However, if our Members provide information that needs be subsequently corrected, we will lose the willingness of the USCG to react so quickly. As per the regulations, any changes advised over 10 days from the date the COFR is processed by the NPFC could result in fines to our Members by the Captain of the Port.

A voyage is defined as "each movement carrying cargo to or from any port or place in or involving transfer of such cargo at a place within United States Waters, and/or the EEZ as defined in the Oil Pollution Act of 1990 (OPA 90) and the relevant Presidential Proclamation. Even if a part cargo is loaded, discharged, or transferred within the EEZ, it will be considered a voyage. However the loading, discharging, or transferring of the same cargo in ports or at multiple ports will not be treated as multiple voyages." Notwithstanding the above, the voyage is deemed to attach upon the vessel's entry into U.S. Waters/EEZ and to terminate on the earlier of the vessel's departure from U.S. Waters/EEZ or the expiry of 30 days from the time and date of entry. Should the vessel remain in U.S. Waters/EEZ beyond the 30th day, a new voyage will be deemed to attach and will terminate on the earlier of the vessel's departure from U.S. Waters/EEZ or the expiry of 30 days from the time and date of reattachment and so forth.

(**) Any vessel that discharges at LOOP and then proceeds into port(s) is not considered to have performed a LOOP voyage.

Effective on July 31st 2009 for Operators, the OPA90 Limits are undergoing a Consumer Price Index adjustment as shown below. COFR Guarantors are liable 90 days thereafter, at which time the revised limits will be reflected on the Interactive web site.

The current OPA90 and CERCLA limits are here.

The below article was in the The Maritime Advocate online--Issue 368

US law firm Blank Rome says the recent decision by the US Court of Appeals for the Fifth Circuit in United States v Kun Yun Jho and Overseas Shipholding Group Inc (see also Maritime Advocate Online Issue 359) will have an impact on the international maritime community for years to come. It adds that shipowners, operators, crew members, lawyers and insurers, among others, need to be aware of the ramifications of this decision and prepare accordingly.

The case involved claims that the owner and chief engineer of the oil tanker "Pacific Ruby" had knowingly failed to maintain an onboard oil record book. The US District Court for the Eastern District of Texas dismissed the charges, but the appeal court reversed the decision.

Conor Warde, writing in the October issue of the Blank Rome newsletter 'Mainbrace', says, "From a legal perspective, this decision is significant primarily because of the court's determination that international law does not supersede the authority and jurisdiction of the US to prosecute pollution-related incidents by foreign-flag vessels that occur outside US waters if such vessels subsequently call on US ports and have maintained inaccurate oil record books.

"From a practical perspective, the significance is that potential liability for false oil record book entries may now expand as vessels continue to call on US ports and such oil record books remain on board.

"This decision, along with the pending appeal before the Second Circuit in United States v Ionia Management SA, may eliminate the defence strategy of relying on international law in maritime enforcement cases. It may also result in even more substantial enforcement by the US Coast Guard and Department of Justice and, potentially, increased penalties or prison time for individuals and entities subject to such enforcement actions.

"This decision involved oil record book entries, but the court's ruling will likely impact enforcement issues for ship records relating to ballast, air emissions, or other environmental areas of concern in the future."

The Coast Guard has proposed amending regulatory requirements relating to financial responsibility under the Oil Pollution Act of 1990 ("OPA 90") and the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). Under the proposed amendments, the Coast Guard would eliminate the requirement in 33 C.F.R. § 138.65 that original or copies of Certificates of Financial Responsibility ("COFR") be carried aboard covered vessels. The National Pollution Funds Center ("NPFC") would issue all COFRs in electronic form, and copies of the COFRs could be downloaded from the NPFC's website. The Coast Guard also intends to increase COFR application fees from $150 to $200 and the COFR certification fees from $80 to $100. The proposed amendments will also increase the financial responsibility requirements to comport with the Delaware River Protection Act of 2006, which increased the limits of liability for vessels. See 73 Fed. Reg. 6642 (Feb. 5, 2008).

The US Coast Guard issued a notice stating that, with effect from August 22, it will enforce the requirement for the owner and operator of a US or foreign flag nontank vessel operating in US waters to prepare and submit a nontank vessel response plan (NTVRP). A nontank vessel is defined as a self-propelled vessel of 400 gross tons or greater, which carries oil as fuel for main propulsion and operates on the navigable waters of the United States. The NTVRP should be largely similar to the vessel response plan (VRP) required for a tank vessel. The Coast Guard has provided more specific Guidance for NTVRP preparation.  Initially, enforcement efforts will focus on nontank vessels of 1,600 gross tons and greater, as they represent a greater risk to the environment than do smaller vessels. 73 Fed. Reg. 35405 (June 23, 2008).

References:
Holland & Knight
USCG Circular
Federal Register