1. Leading the way; making a difference Latin American Panel November 5, 2014 BALLAST WATER MANAGEMENT JOSEPH ANGELO DEPUTY MANAGING DIRECTOR

2. Leading the way; making a difference Desired Outcome for Ballast Water Management: Tanker industry is able to achieve compliance with current and future discharge standards (both regionally and internationally) Focus: 1. 1.Installation and Operation of appropriate and adequate ballast water management systems 2. 2.Compliance and enforcement – need strong, well defined and realistic international regulations Ballast Water Management INTERTANKO’s Five Strategic Plan

3. Leading the way; making a difference Why is Ballast Water Management a major issue for the shipping industry? 1. 1.INTERNATIONALLY – IMO Ballast Water Management Convention was adopted as a “prospective” treaty, i.e. It mandated standards that were not achievable when the treaty was adopted with ambitious implementation dates. 2. NATIONALLY IN THE US – US Congress passed two separate laws giving two separate federal government agencies, the US Coast Guard and the US Environmental Protection Agency (EPA), authority to regulate ballast water management Ballast Water Management

4. Leading the way; making a difference IMO Ballast Water Management Convention Adopted in 2004 Entry into force requires ratification by 30 countries, 35% world’s grt Currently, 43 countries, 32.54% grt Bahamas, China, Cyprus, Greece, Malta, Panama, Singapore or UK, each alone could bring the convention into force Argentina and Italy in the process – 34.2% Ballast Water Management

5. Leading the way; making a difference INTERTANKO (etal) Submission to MEPC 64 (Oct 2012) Explains the challenges being faced for effective implementation of the BWM Convention and to provide proposals to address those challenges Submission covered FOUR key areas: 1. 1.Guidelines for approval of ballast water management systems (G8); 2. 2.Availability of Ballast Water Management Systems (BWMS); 3. 3.Procedures for port State control 4.s 4.Survey and certification requirements Ballast Water Management

6. Leading the way; making a difference Port State Control – MEPC 65 (May 2013) Trial Period (initially for 3 years) following entry into force To trial sampling and testing procedures During this period, port states will ‘refrain from detaining a ship or initiating criminals sanctions in the event a BWMS does not meet the discharge standard’ (USA reserves its position) MEPC 67 (Oct 2014) adopts Guidelines for PSC with four stage approach Ballast Water Management

7. Leading the way; making a difference IMO Guidelines for PSC Stage 1 – Initial inspection. Focus on documentation and crew training to operate BWMS If there are “clear grounds” Stage 2 – More detailed inspection. Check to ensure that BWMS operates properly Stage 3 – Indicative sampling. Without unduly delaying ship, an indicative analysis of ballast water Stage 4 – Detailed analysis. If indicative sampling exceeds D2 standard by a certain threshold, a detailed analysis of ballast water can be taken Ballast Water Management

8. Leading the way; making a difference Implementation schedule (availability of BWMS) IMO Assembly Resolution (A.1088(28)) adopted, Dec 4, 2013 recommends governments: implement the Convention based on the entry into force date of the Convention considers ALL vessels constructed before entry into force as existing vessels existing vessels to install a BWMS at the first renewal survey (IOPP Certificate under Annex I of MARPOL) after entry into force of the Convention Ballast Water Management

9. Leading the way; making a difference BWMS Type Approvals Some progress at MEPC 64 with greater quantity and quality of information with increasing transparency HOWEVER, INTERTANKO Council decides, ‘still not adequate in providing tanker operators with reliable, dependable BWMS to install on board their tankers’ INTERTANKO submission to MEPC 66 with industry partner associations: –Amend G8 (salinity, temperature, organisms, sediment, flow rates, etc) – make it more robost! –Grandfathering to protect owners who have taken action –Send a signal to Governments on ratification Ballast Water Management

10. Leading the way; making a difference BWMS Type Approvals Outcome of MEPC 66, April 2014 Does NOT agree to amend G8 guidelines Requests IMO Secretariat to “explore the possibility of conducting” a study on the implementation of the ballast water performance standard (D ‐ 2 requirements) Agrees to include industry proposals to improve G8 guidelines in the remit of the study INTERTANKO and other shipping associations express dissatisfaction with this decision, would be unable to encourage further ratification of BWM treaty and has made further submission to MEPC 67 in October 2014 Ballast Water Management

11. Leading the way; making a difference BWMS Type Approvals Industry submission (MEPC 67/2/6) proposes adoption of MEPC resolution which includes: Comprehensive review of G8 guidelines which should commence BEFORE the Convention enters into force Issues that the comprehensive review should address Identifying requirements of “revised G8 guidelines” that should be made mandatory “Grandfathering” for the life of the ship BWMS approved under current G8 guidelines Review of port state control provisions of Convention Ballast Water Management

12. Leading the way; making a difference BWMS Type Approvals Outcome of MEPC 67, October 2014 Adopts an MEPC Resolution which agrees 1. To immediately begin a comprehensive review of G8 guidelines (and Plan of Action to do so) 2. Shipowners that have installed BWMS approved to existing G8 “should not be penalized” 3. Port States should refrain from applying criminal sanctions or detaining the ship, based on sampling during the trial period (US reserves its position) Agrees that proposals to implement decision to not penalize shipowners should be submitted to MEPC 68 Ballast Water Management

13. Leading the way; making a difference Final regulations issued March 23, 2012: BWE prior to discharge in US waters (12 miles) BWM Plan and record keeping BWM discharge standard (same as IMO), review in 4 yrs Compliance schedule for BWMS (similar to IMO), (no intent to align schedule with Assembly Resolution) Acceptance of “Alternative” AMS BWMS for 5 years BWMS not required if no discharge in US waters Ships may request an extension to compliance date for BWMS Ballast Water Management – USCG

14. Leading the way; making a difference INTERTANKO Assisting Members with USCG regulations Implementation Schedule Decision Tree … Ballast Water Management – USCG

15. Leading the way; making a difference USCG Ballast Water Decision Tree

16. Leading the way; making a difference US Coast Guard INTERTANKO assisting Members Implementation Schedule Decision Tree Model Extension Request (MER) Letter Ballast Water Management – USCG

17. Leading the way; making a difference US Coast Guard Assisting INTERTANKO Members Implementation Schedule Decision Tree Model Extension Request (MER) Letter Clarification of USCG Rules extension requests (allow new tankers to have an extension until the ship’s first drydocking after the first USCG BWMS has been approved) flexibility in submitting applications inside the 12 months submission period Ballast Water Management – USCG

18. Leading the way; making a difference US Coast Guard – Extension requests January 1, 2016 extension date given to more than 250 ships whose drydocking was scheduled for 2014 January 1, 2016 date was chosen to encourage shipowners to put pressure on BWM manufacturer to obtain CG approval January 1, 2017 extension given to ships whose drydocking was scheduled for early 2015 CG recognizes that January 1, 2016 date may generate second round of extension requests CG wants to have dialogue with shipowners as to whether installation of BWMS must be done in drydocking Ballast Water Management – USCG

19. Leading the way; making a difference US Coast Guard – APPROVED BWM Systems 10 BWMS manufacturers have submitted “Letter of Intent” to pursue USCG approval For proprietary reasons, USCG cannot tell us which BWMS manufacturers are currently seeking pursuing USCG approval INTERTANKO has contacted BWMS manufacturers to determine which of them have submitted Letter of Intent (results on INTERTANKO web site) Only after the testing is completed and the results have been evaluated, will a BWMS manufacturer then submit an application to the USCG for approval of their BWMS Ballast Water Management – USCG

20. Leading the way; making a difference US Coast Guard – APPROVED BWM Systems To date no BWMS manufacturer has reached that stage in the process, but the USCG indicated that they expected to have a USCG approved BWMS “sometime in 2015” CG hopes it can announce a few at the same time, but is not going to hold up the announcement of the first one to wait for a “long time” to include the second or third one CG indicates they understand potential installation scheduling problem once a BWM system is CG approved CG indicates they will be “pragmatic” in requiring when a ship calling at US ports must have a CG approved BWM system installed Ballast Water Management – USCG

21. Leading the way; making a difference EPA Vessel General Permit issued December 19, 2013 To a large extent EPA VGP requirements are the same as USCG (discharge standard, compliance schedule, etc.) Approval of BWMS is not required BWMS monitoring required (functionality, equipment calibration, effluent, biocides) New ship (keel laid after December 1, 2013) is required to install a BWMS to comply with the VGP, i.e. no acceptance of USCG extension provision in the VGP EPA /USCG MoU – EPA Enforcement Policy, 27 Dec Vessel with USCG extension is non-compliant (if discharges in US waters – 3 miles), but EPA regards as a low-enforcement priority, provided all other regs are met Ballast Water Management – USEPA

22. Leading the way; making a difference Potential issue with EPA Enforcement Policy?? Charter party agreements require tanker to be in compliance with all applicable laws and regulations Tanker that receives CG extension would be in compliance with CG requirements Tanker that has CG extension and discharges ballast water within US waters (3 miles) would be in violation of EPA Vessel General Permit Thus far, not aware of any comments from oil majors or charterers on this issue Ballast Water Management – USEPA

23. Leading the way; making a difference EPA Guide for Sampling and Monitoring All vessel operators covered under the VGP are required to submit an annual report by 28 February 2015 (for activities conducted through 31 December 2014) Vessels delivered after 1 December 2013 are also required to perform analytical monitoring of ballast water, bilgewater, graywater, and exhaust gas scrubber wastewater and submit results to EPA EPA has issued a guide on Vessel Discharge Sample Collection & Analytical Monitoring which can be found on the INTERTANKO web site Ballast Water Management – USEPA

24. Leading the way; making a difference Approved Systems IMO Type Approved (G8)51 US Coast Guard approved 0 Alternate Management Systems (AMS)46 Ballast Water Management

25. Leading the way; making a difference MUCHAS GRACIAS!