RADM James A. Watson Director, Prevention Policy U.S. Coast Guard

1. RADM James A. WatsonDirector, Prevention PolicyU.S. Coast Guard

2. 9,260 individual vessels, from 90 different Flag Administrations, made more than 76,000 U.S. port calls Performance based targeting (matrix) system taking into account history of Flag, Recognized Org, Class Society, & Ship Mgmt/Charterers performance Port State Control • Detention Ratio is Low: • 1.86% • Typical reasons: • Firefighting • MARPOL • Propulsion & Machinery • ISM Code

3. QUALSHIP 21 Rewards Highest Performing vessels flagged by an eligible Flag Administration Subject to fewer CG inspections Internationally recognized program sought out by charterers, etc Difficult criteria must be met through vessel performance, flag performance, etc Less than 400 vessels enrolled Rewarding the Best

4. Collective Responsibilities Environmental stewardship has a hierarchy of responsibilities!

5. Environmental Compliance • Intentional discharges continue to occur • at an alarming rate. • Owner Operators need to: • Know what’s going on onboard your vessels. • Know the waste streams and quantities produced. • Know the effectiveness of your pollution prevention equipment. • Upgrade as needed. • Implement an Environmental Management System METHODS – “As many as a mate or engineer can imagine.” Removal of valve internals to allow discharge of wastes via other systems.

6. Simple bypass. Bold discharges in the Indian Ocean.

7. Discharges using MARPOL shore connection. Discharges using cross-over from bilge mains to Main Bilge and Ballast pumps.

8. Prevention / Detection • - International Cooperation • - Interagency Cooperation • NOAAEPAFBI • - INTERPOL • - Better Intelligence • Cooperation with Marine Intelligence Fusion Centers. • - Greater use of imagery. • - Joint Agency Investigation Training • - Improvements in Investigator and Inspector skill sets. Side Looking Airborne Radar (SLAR)

9. Criminal and Administrative Enforcement Tools • Community Service Funds • Environmental Compliance Plans • Judicial Banning • Barring entry to U.S. ports for non-compliance

10. Criminal Referrals

11. Community Service Funds • Most sentences in environmental crimes cases includes money set aside as community service funds. • Provides additional deterrence to environmental crimes • Must be reasonably designed to repair the harm • Past community funds have supported: • Regional wildlife restoration/preservation • Seafarers education on compliance • Marine sanctuary protection

12. Environmental Compliance Plans (ECPs) • Typically 3 to 5 years • Includes an audit of entire fleet or of the fleet that makes voyages to U.S. ports • Audits are conducted by third party auditors approved by USCG and DOJ • Majority of ECPs are court-monitored and part of a company’s probation terms • Some ECPs are voluntary

13. Judicial Banning • M/V AMERICANA – STANSHIPS

14. USCG Banning Policy • M/V COSETTE (Small Ro-Ro) • Conducted frequent runs from the US to Haiti (cargo = used/junk cars) • Frequent port calls were Miami, NYC, Boston, and San Juan • 8 IMO related detentions since 2006 (6 in 2009) • 13 LODs since 2007 • 72 COTP orders imposed since 1999 (MISLEADING) • BANNED by COMDT as of 29JAN10 for a minimum of 3 months. Owners must comply w/requirements of COMDT’s letter prior to lifting of banning 14

15. Banning Policy (COMDT CG-543 Policy Letter 10-03) • 3 detentions in U.S. waters in 12-months (indicative of SMS problems); or Vessels with history of accidents, pollution incidents, or serious repair problems. • Banned for a minimum of 3-months (3 vsls to date). For re-entry into U.S. must demonstrate full compliance w/ISM (external & flag State Audits, environmental compliance programs, etc) • Vessels banned by other PSC regimes and subsequently detained in the US with objective evidence of failed SMS may be banned after one US detention.

16. USCG Expectations • Illegal discharge is not an acceptable cost of doing business • Environmental management must become part of the corporate culture • Owners/Operators should develop effective Environmental Management Systems • Flag State Administration must assume robust oversight roles and responsibilities

17. USCG Environmental Crimes Voluntary Disclosure • Requirements for CMS (Compliance Management System) • Within 21 days of discovery • # of Disclosures to date from Nov 2007 Policy

18. Vessel General Permit • VGP MOU outlines coordination and cooperation between EPA and the USCG • MOU provides division of labor • USCG – compliance examinations • EPA – enforcement • Since the signing of the USCG/EPA MOU Vessel General Permit program: • only 222 USCG documented VGP inspection deficiencies: • - 71 were issued to domestic vessels • - 151 issued to foreign flagged vessels • - 1 deficiency under the VGP program was forwarded to EPA

19. Ballast Water Management – Regulatory Development Ballast Water Discharge Standard NPRM establishes: • Phased Approach • IMO Standard initially • 1000 times more stringent than IMO after 2016 • Practicability Review will determine if 1000x standard can be met. • If Practicability Review determines 1000x cannot be met, then intermediary standards established.

20. Emission Control Areas • ECAs control the emissions of SOx and particulate matter (PM) as well as NOx emissions • There are currently two ECAs approved at IMO that affect US waters: • North American ECA – approved.  Compliance within ECA will be required in August 2012. • Caribbean ECA – approved.  Compliance will be required in January 2014.

21. Emission Control Areas • Enforcement would be done in port: • For SOx/PM, this would be accomplished by checking bunker delivery notes, logs and where considered necessary, requiring the fuel sample required under MARPOL Annex VI to be tested. • For NOx, this would be done by checking the international engine certificate – aka the Engine International Air Pollution Prevention Certificate (EIAPP Certificate), and if determined necessary, require the engine compliance be verified thru the Administration-approved “Verification Procedure” as required under MARPOL Annex VI. ECA Sulphur Cap

22. Energy Efficiency Design Index • Design standard which will increase vessel fuel economy. • Mandatory EEDI approved at IMO as a new chp to MARPOL Annex VI • Applies to new and existing vessels • Prefer a market-based system which will incentivize efficiency improvements • Not supportive of a fuel tax or an emissions trading system