IMO 2020: States and shipowners must stay the course

October 15, 2019

compliance, compliant fuel, Current News, IMO 2020, Maritime News, Shipping, sulphur, trident alliance

By Editor

There have been indications that some States, which have ratified MARPOL Annex VI, may not fully enforce the sulphur regulations on ships trading between ports in waters under their jurisdiction.

With barely a hundred days until the IMO 2020 sulphur cap takes effect, shipowners and IMO Member States are making final preparations. Shipowners have a clear role in preparing their crew, networks and vessels.

Member States, as flag-States and as port-States, also have a vital role in securing the successful implementation of these rules. However, reports indicate some States may opt not to fully meet their enforcement obligations. The Trident Alliance would like to lay bare the negative legal and other consequences of such an approach, both for States and shipping companies.

States party to MARPOL Annex VI cannot simply opt-out

There have been reports or indications that some States, which have ratified MARPOL Annex VI, may not fully enforce the sulphur regulations on ships trading between ports in waters under their jurisdiction. Such a decision would bear severe legal implications.

A State that is party to MARPOL Annex VI can be held liable in accordance with international law (i.e. UNCLOS, Vienna Convention on the law of treaties and the ILC Articles on State Responsibility) if it does not enforce the 0.50% sulphur limit within its waters.

This can lead to the other participating States to Annex VI moving to expel the violating State from Annex VI, or to require the violating State to stop its action or omission and adhere to its commitment.

Ships in waters where MARPOL VI isn’t ratified or enforced should proceed carefully

The obligations regarding sulphur limits of ships operating in the national waters of States that have either not ratified MARPOL Annex VI, or where those sulphur limits are not being fully enforced are very clear.

The Trident Alliance wishes to stress that the lack or failure of enforcement does not mean ships do not have to comply.

If a ship exceeds the sulphur limits in such areas it can still be held liable for having been in breach of the limit by another State at a later time.

Specifically:

The ship’s flag State can sanction such violations, irrespective of where or when they occur;
Use of non-compliant fuel in an area where the 2020 sulphur limit is not enforced, does not amount to valid grounds for later invoking a FONAR; and
Any non-compliance on the high seas, e.g. when sailing between two States that do not fully enforce the regulations, can be penalized by all other port States.

Contractual impacts of IMO 2020 sulphur compliance

It is important for shipowners and operators to recognise that compliance is not only a matter between them and the authorities.

The requirement for full compliance with all applicable regulation is frequently a condition commercial contracts, bank covenants and insurance policies, to name just a few instances in which compliance is fundamental requirement of the industry.

The Trident Alliance encourages industry stakeholders, such as lenders, insurers and investors, to convey to shipping companies their awareness of and interest in IMO sulphur 2020, and to emphasize that nothing other than full compliance will be accepted. To do so would be in their enlightened self-interest.

The last mile can be the hardest

With the clock counting down to the largest shift in recent maritime history, it is essential that shipowners and IMO Member States stay the course and jointly work to secure that the health and environmental benefits of the new rules are realized.

Studies have shown that if the 0.5% sulphur limit is implemented effectively, it can lead to the annual prevention of over 130,000 premature deaths and the avoidance of over 7.5 million asthma cases, with much of the benefit to be gained in highly populated areas near larger ports, such as in Asia.

In addition to these compelling factors, full and effective enforcement is vital to maintaining fair competition.

The Trident Alliance therefore urges governing authorities and international organizations to avail of the legal implications of partial enforcement to hold to account any Annex VI States which do not enforce in full. This can include applying political and legal pressure on all relevant levels.

Moreover, authorities in all States party to Annex-VI in their capacity as “flag States” are urged to ensure all ships under their flag always comply with the IMO 2020-Sulphur Cap. This applies irrespective of where the ship is operating, including areas under the jurisdiction of States failing to meet their obligations to enforce or in the waters of States that have not ratified MARPOL Annex VI.

Since 2014, the Trident Alliance has worked to build awareness of the need for robust and effective enforcement of marine sulphur regulations to protect public and environmental health, and maintain fair competition.