Commission Formally Launches Investigation of Canadian Government Ballast Water Regulations

The Federal Maritime Commission formally initiated its investigation of pending Canadian ballast water regulations alleged to be unfavorable and detrimental to U.S. flag Laker vessels when it voted today to issue a “Notice of Investigation and Request for Comments”.

The Notice specifies how interested parties can communicate with the Commission in this matter and establishes a deadline for filing comments 30 days following publication of the Notice in the Federal Register.

Comments filed with the Commission will supplement information FMC staff collect as they investigate allegations raised by the Lake Carriers’ Association (LCA) in a petition filed at the Commission on March 6, 2020.  In their petition, the LCA alleges that pending regulations concerning ballast water management under consideration by Transport Canada are unfavorable to shipping in the U.S.-Canada trade, pursuant to Section 19(1)(b) of the Merchant Marine Act, 1920 (Section 19). The Canadian regulations,  if finalized as proposed, would require vessels in Canadian waters to develop and implement a ballast water management plan to be imposed upon U.S. flag vessels when loading ballast water after offloading export cargo at Canadian ports.

Canada contends that the proposed regulations are required pursuant to an International Maritime Organization (IMO) treaty to which Canada is a party, but which the United States is not a signatory.  LCA contends that the proposed regulations are not mandated by the IMO treaty,  that compliance with the Canadian performance standard would be cost prohibitive for its members, and that the proposed regulations are intended to drive U.S. operators from the cross-lakes trade. The Commission found that the petition met the threshold requirements for consideration and voted on May 20, 2020, to accept the petition.

Section 19 of the Merchant Marine Act, 1920, provides the Commission with authority to investigate and sanction discriminatory conditions caused by laws, rules, or regulations of foreign governments. If the Commission finds that such regulations result in conditions unfavorable to shipping in a U.S.-foreign trade, then Section 19 provides the FMC with several remedies that include: levying fines on vessels calling at U.S. ports, prohibiting vessel calls at U.S. ports, and restricting cargos that may be carried between the U.S. and the foreign country.