sVGP Compliance Difficulties Continue for the Workboat Sector

The recent implementation (January 19, 2018) of the long-delayed small Vessel General Permit (sVGP) requirement has major implications for environmental regulations in general, and specifically how the compliance difficulties continue for vessel owners with no real end in sight. Moreover, the U.S. Coast Guard’s (USCG) recent publication of NVIC 01-18 (March 1, 2018), while helpful in advising owners on how to comply with the ballast water regulations, does not relieve vessels from the underlying requirements, specifically the risks associated with inoperable ballast water treatment systems (BWTS). With vessel charter rates still generally in a down cycle, the need for vessel owners to spend more money on environmental regulations does not come at a good time.

sVGP Timelines
By way of background, the Environmental Protection Agency (EPA) VGP requirements first went into effect in 2008, with permit reissuance in 2013. The VGP provides for National Pollutant Discharge Elimination System (NPDES) permit coverage for incidental discharges from commercial (non-military and non-recreational) vessels greater than 79 feet and for ballast water from commercial vessels of all sizes. For commercial vessels less than 79 feet, the sVGP requirements apply.

Previously, the Maritime Transportation Act of 2014 included an exemption for all incidental discharges from “small” vessels – with the exception of ballast water – from having to obtain an sVGP until December 18, 2017. This exemption was not extended. Thus, vessels less than 79 feet must now comply with the sVGP requirements including ballast water management. Given this long delay, and similar delays with implementation of the USCG BWT requirements, many vessel owners deferred taking compliance action, but the “do nothing” approach is no longer an option.

Overlapping Regulations
One of the primary challenges facing the industry is overlapping regulations. In addition to the USCG ballast water regulations, the EPA’s VGP creates another layer of US federal regulation. The complexity increases with individual US States having the ability to attach state-specific conditions to the VGP. The Commercial Vessel Incidental Discharge Act (CVIDA) was drafted to alleviate some of these compliance headaches, and many industry stakeholders support this effort. The proposed CVIDA legislation attempts to unify and simplify both the regulatory and compliance aspects of vessel discharges by creating one federal standard for both the USCG and EPA as well as preempting any similar state regulations.

The Passenger Vessel Association (PVA) recently announced that the CVIDA bill in the Senate (S168) has finally been voted out of the Senate Commerce Committee and been placed on the list of bills that could come to the floor for a vote. Whether, and when, that could occur is up to Majority Leader McConnell. PVA and the shipping lobby are pushing hard to bring the bill forward, taking the position that it advances the Trump Administration’s agenda of “streamlining government regulation of industry.” Hopefully, this tactic will work, but in the meantime, owners must comply with the myriad of regulations as they currently exist, which is no easy task.

Looking more closely at EPA VGP compliance, the current 2013 VGP is set to expire on December 19, 2018. EPA is currently accepting comments on what revisions should be made to create the new 2018 VGP (i.e., prior to its issuance of a draft permit, which is expected this fall). As usual, regulators are late in issuing the draft VGP as they initially indicated it would be published last summer, and now fall 2018. Hence, all stakeholders should monitor the EPA’s website for publication of the draft 2018 VGP and submit comments to the EPA, particularly if the CVIDA proposed legislation does not progress in Congress.

With respect to the planning and logistical aspects of VGP compliance for ballast water, many owners think that testing laboratories are either limited in numbers and/or altogether unavailable. In reality, there are many laboratories – both in the United States and overseas – that are qualified to perform the VGP biological and/or chemical analysis, especially in larger ports. However, those facilities must be close to the port where sampling will occur due to a short 6-hour biological sample holding time.

It isn’t getting any easier: The 27 discharges outlined in the 2013 Vessel General Permit:

Planning
Failing to plan also means that an operator is planning to fail. Therefore, advance planning for VGP compliance is a matter of paramount importance. Even though a VGP sampling event can be arranged quickly, time is needed to ensure qualified labs are available, arrange for lab supplies and a sampling technician. While it is understood that vessel schedules fluctuate based on a variety of factors, if the vessel informs the service provider/lab of the port where ballast water discharge/sampling is expected to occur in advance, the service provider can better support the vessel. Like other husbandry services ships require, conducting VGP sampling in large ports is generally easier and more cost-effective.  

Vessels also need to ensure they are operating their BWTS, if required, in accordance with the operations manual. For example, if treated ballast water requires a holding period, ballast discharge and sampling should only be done after the prescribed treatment process has been completed. If VGP sampling is conducted when the BWTS has not been operated properly, the vessel is in risk of being noncompliant.  

Much of the recent VGP focus has been on ballast water. However, it’s important for owners to know that the VGP regulates 27 different vessel discharges. Owners must become familiar with the regulated discharges applicable to each vessel and the respective monitoring requirements that crew need to implement for compliance.

Hopefully, most owners have already submitted their VGP Annual Report, which was due 28 February 2018 for all vessels that filed a Notice of Intent (NOI) form. The Annual Report must be filed even if a vessel did not operate in U.S. Waters during the calendar year. Information can be found in Section 4.4 of the VGP. https://www.regulations.gov/document?D=EPA-HQ-OW-2011-0141-0949

The complacency that permeated VGP, the delays associated with ballast water management requirements, and the uncertainty of whether CVIDA may resolve some of these issues, all combined to distract owners from taking proactive compliance actions. Given that the long-delayed sVGP legislation is now in force and USCG BWT extensions are more difficult to obtain and quickly being phased out completely, owners have no choice but to comply with these new regulations despite the generally poor freight markets.

Although there is still hope that CVIDA may provide some relief, owners must make sure they are in compliance with these various environmental regulations now. The sting of these compliance costs at this uneconomical time may hurt, but it does not outweigh the risk of vessel delays and fines associated with noncompliance.


(As published in the April 2018 edition of Marine News)