1. OVERVIEW OF CHANGES TO ENVIRONMENTAL REGULATIONS BMUSF 2010 Capt. Edward Wilmot Vice-President Great American Insurance Group

4. OPA STATUTORY MINIMUM LIMITS RISE TO $854,400 STATUTORY MINIMUM LIMITS RISE TO $854,400 SCHEDULED TO RISE EVERY 3 YEARS SCHEDULED TO RISE EVERY 3 YEARS RECOMMEND 4X1 BUMBERSHOOT TO ENSURE SUFFICIENT WRECK REMOVAL AND NRDA RECOMMEND 4X1 BUMBERSHOOT TO ENSURE SUFFICIENT WRECK REMOVAL AND NRDA STATES BEGINNING TO VIEW INCIDENTS AS A REVENUE STREAM STATES BEGINNING TO VIEW INCIDENTS AS A REVENUE STREAM INCREASED DOJ INVOLVEMENT INCREASED DOJ INVOLVEMENT

5. NON-TANK VESSEL RESPONSE PLANS APPLICABLE TO NON-TANK VESSELS OVER 400 GRT APPLICABLE TO NON-TANK VESSELS OVER 400 GRT REQUIRES CONTRACTED RESPONSE CAPABILITY REQUIRES CONTRACTED RESPONSE CAPABILITY EVENTUALLY WILL REQUIRE CONTRACTED SALVAGE AND FIREFIGHTING EVENTUALLY WILL REQUIRE CONTRACTED SALVAGE AND FIREFIGHTING

6. FIREFIGHTING AND SALVAGE INITIALLY REQUIRED FOR TANK BARGES INITIALLY REQUIRED FOR TANK BARGES PLANS TO EVENTUALLY INCLUDE NON- TANK VESSELS PLANS TO EVENTUALLY INCLUDE NON- TANK VESSELS WILL REQUIRE CONTRACTED RESPONSE WILL REQUIRE CONTRACTED RESPONSE READ AND INCORPORATE NFPA 1405 – GUIDE FOR LAND BASED FIREFIGHTERS WHO RESPOND TO FIRES ABOARD MARINE VESSELS READ AND INCORPORATE NFPA 1405 – GUIDE FOR LAND BASED FIREFIGHTERS WHO RESPOND TO FIRES ABOARD MARINE VESSELS

7. BE CAREFUL WHAT YOU WISH FOR!!! VGP VGP Discharges incidental to normal operation of a vessel exempt Discharges incidental to normal operation of a vessel exempt 2005 lawsuit by NW Environmental Advocates –exemption invalid – initially only sought to regulate ballast – courts said everything – 26 new waste-streams 2005 lawsuit by NW Environmental Advocates –exemption invalid – initially only sought to regulate ballast – courts said everything – 26 new waste-streams

8. Who is required to have a Vessel General Permit? Recreational vessels are exempt. Recreational vessels are exempt. Vessels more than 300 GRT or having the ability to hold or discharge more than 8 cubic meters of ballast must file a Notice of Intent Vessels more than 300 GRT or having the ability to hold or discharge more than 8 cubic meters of ballast must file a Notice of Intent

9. What waste streams are regulated? Deck Runoff Deck Runoff Bilgewater Oily water Separator effluent Bilgewater Oily water Separator effluent Hull coating Leachate Hull coating Leachate Aqueous film forming foam Aqueous film forming foam Cathodic protection Cathodic protection Chain locker Effluent Chain locker Effluent Controllable Pitch Hydraulic fluid Controllable Pitch Hydraulic fluid Distillation Brine Distillation Brine Elevator pit effluent Elevator pit effluent Firemain system Firemain system Freshwater layupGraywater Freshwater layupGraywater Refrigeration and air condensate Discharge Refrigeration and air condensate Discharge Sewage of any sort Sewage of any sort Small boat engine wet exhaust Small boat engine wet exhaust 10 add’l Miscellaneous 10 add’l Miscellaneous discharges discharges

10. ENFORCEMENT TO BE REGULATED BY COAST GUARD TO BE REGULATED BY COAST GUARD CONCENTRATING ON VESSELS OVER 1600 GRT FOR NOW CONCENTRATING ON VESSELS OVER 1600 GRT FOR NOW RESPONDING TO REPORTS OF DISCHARGE BY BOATERS IN THE NORTHWEST RESPONDING TO REPORTS OF DISCHARGE BY BOATERS IN THE NORTHWEST SIGNS OF INTEREST BY DOJ SIGNS OF INTEREST BY DOJ

11. ITS ALL ABOUT PAPERWORK ACCURATE VOYAGE LOG ACCURATE VOYAGE LOG DOCUMENT ALL VIOLATIONS DOCUMENT ALL VIOLATIONS LOG ALL INSPECTIONS, DEFICIENCIES AND CORRECTIVE ACTIONS LOG ALL INSPECTIONS, DEFICIENCIES AND CORRECTIVE ACTIONS RECOMMEND DEVELOPING A CHECKLIST OF LOG ENTRIES WITH STANDARDIZED WORDING FOR EACH ENTRY RECOMMEND DEVELOPING A CHECKLIST OF LOG ENTRIES WITH STANDARDIZED WORDING FOR EACH ENTRY

12. PENALTIES ADMINISTRATIVE – UP TO $37,500/DAY ADMINISTRATIVE – UP TO $37,500/DAY INJUNCTIVE – CAN PREVENT VESSEL FROM OPERATING OR REQUIRE CORRECTIVE ACTION INJUNCTIVE – CAN PREVENT VESSEL FROM OPERATING OR REQUIRE CORRECTIVE ACTION CRIMINAL – FINES AND IMPRISONMENT CRIMINAL – FINES AND IMPRISONMENT SEPARATE PENALTIES UNDER CLEAN WATER ACT /VGP FOR FALSE STATEMENTS SEPARATE PENALTIES UNDER CLEAN WATER ACT /VGP FOR FALSE STATEMENTS

13. VGP POLICY COVERS CIVIL ADMINISTRATIVE PENALTIES FOR ACTUAL DISCHARGES THAT VIOLATE STATUTE AND DEFENSE COSTS COVERS CIVIL ADMINISTRATIVE PENALTIES FOR ACTUAL DISCHARGES THAT VIOLATE STATUTE AND DEFENSE COSTS TYPICAL LIMIT IS $1M TYPICAL LIMIT IS $1M EXCLUSIONS FOR TRAINING AND RECORDKEEPING VIOLATIONS AND ACTUAL STRUCTURAL CHANGE REQUIREMENTS EXCLUSIONS FOR TRAINING AND RECORDKEEPING VIOLATIONS AND ACTUAL STRUCTURAL CHANGE REQUIREMENTS

14. AIR POLLUTION 2008 IMO Adopted Marpol Annex VI – Regulations for Prevention of Air Pollution from Ships 2008 IMO Adopted Marpol Annex VI – Regulations for Prevention of Air Pollution from Ships USA adopts as Maritime Pollution Prevention Act of 2008 USA adopts as Maritime Pollution Prevention Act of 2008 USA & Canada have Applied to IMO to have all Coastal waters of both nations designated as an Emissions Control Area USA & Canada have Applied to IMO to have all Coastal waters of both nations designated as an Emissions Control Area

15. AIR POLLUTION REGULATIONS OWNERS OF ENGINES OVER 175 HP INSTALLED ON VESSELS TRADING INTERNATIONALLY AND BUILT AFTER 1/1/2000 MUST HAVE EPA INTL. AIR POLLUTION CERTIFICATE AND MANUAFACTURER FILE SHOWING COMPLIANCE WITH NOx LIMITS OF MARPOL OWNERS OF ENGINES OVER 175 HP INSTALLED ON VESSELS TRADING INTERNATIONALLY AND BUILT AFTER 1/1/2000 MUST HAVE EPA INTL. AIR POLLUTION CERTIFICATE AND MANUAFACTURER FILE SHOWING COMPLIANCE WITH NOx LIMITS OF MARPOL MUST BURN FUEL THAT MEETS Sox requirements (USA MARINE DIESEL MEETS THIS REQUIREMENT MUST BURN FUEL THAT MEETS Sox requirements (USA MARINE DIESEL MEETS THIS REQUIREMENT EPA MAY EXEMPT VESSELS SOLELY TRADING IN USA EPA MAY EXEMPT VESSELS SOLELY TRADING IN USA

16. STORAGE TANKS EPA RULES REQUIRING DOUBLE WALLS BEING ENFORCED EPA RULES REQUIRING DOUBLE WALLS BEING ENFORCED

17. ACL & COSCO BUSAN WHAT DO THEY HAVE IN COMMON?

18. COMMONALITY COSTLY COSTLY MISMANAGED? MISMANAGED? EXTRAORDINARY INVOLVEMENT OF THE DOJ EXTRAORDINARY INVOLVEMENT OF THE DOJ

19. ROOT CAUSE FIRST SPILLS MANAGED BY THE MEDIA AND THE POLITICIANS FIRST SPILLS MANAGED BY THE MEDIA AND THE POLITICIANS

20. IMPACT ON INDUSTRY INDUSTRY LOSS INDUSTRY LOSS REDUCTIONS IN LINE SIZE REDUCTIONS IN LINE SIZE SOME COMPANIES REFUSING EXCESS IF THERE IS ANY UNDERLYING POLLUTION RISK SOME COMPANIES REFUSING EXCESS IF THERE IS ANY UNDERLYING POLLUTION RISK EXCESS LIABILITY RATES FINALLY INCREASING. EXCESS LIABILITY RATES FINALLY INCREASING.

21. Thank you!!