Importance, Challenges and Risks

Alejandro Trillo October 2008

“The future is in our hands and our future is in the Ocean”

Jean Michel Cousteau

Ship Operation

Regulatory Compliance- Not an easy One….Regulatory Compliance- Not an easy One….

FINANCIAL CRISIS

Oil & Oily Mixture - Challenges•Oil from accidents greatly reduced •Legislation and concerns turning to operational discharges

•Shipping Sources of Oil •Operational Discharges 45% •(457,000 tonnes / yr)

•Shipping accidents 36% GESAMP (IMO/FAO/UNESCO/UNIDO/WMO/IAEA(UN/UNEP Joint Group of Experts On the Scientific Aspects of Marine Environmental Protection). 2007. Estimates of Oil entering the marine environment from sea-based activities.

Oil & Oily Mixture - Risks MARPOL ANNEX I Regional & National Legislation Personnel´s attitude / Magic Pipe Fines:

Overseas Shipholding Group Inc. (OSG) Sentenced 21 March 2007 (Federal Court) $27 Million fine 3 year probation

Stringent environmental compliance program Court-appointed monitor and outside independent auditing of OSG Ships trading worldwide

Largest ever fine involving deliberate vessel pollution

WHY COMPLY WITH ENVIRONMENTAL REGULATIONS?

International Regulations (MARPOL 73/78)European Union Directives (2000 / 59) and

others15 US Federal Pollution Laws – ranging from

OPA ´90 to Migratory Bird ActThe US only prosecuted Between 1995 and

2005 30 criminal cases involving intentional discharge of oil, 21 since 2002.

US $130 million in fines levied since 1998

Recent ProsecutionsUSA December 2005 – Crew of MSC Elena used “magic pipe” to bypass

OWS Owners fined US$10.5 million Chief Engineer sentenced to 2 months in prison and fines $3000

USA April 2006 - Magellan Phoenix- owners fined US $350,000 on one

charge of failing to maintain accurate records Chief ENG sentenced to one year in prison

Recent ProsecutionsFrance April 2006 – French court imposed 800,000 Euros fine on the

captain and owners of Maersk Barcelona as a result of oil slick off French Coast

Canada

May 2007 –Nobel Fortuna fined CAN $45,000 for illegal discharge of pollutant and failure to report incident

Amount of pollutant discharged – 5.5 liters (over CAN $8,000/liter)

Garbage PollutionAustralia May 2005 – Owners of chemical tanker Bow

De Jin fined AUS$15,000 and master fined AUS $7,500 for dumping one large plastic bag of garbage.

UK November 2005 – Owners of fishing vessel

Lynden II fined 2,000 british pounds for dumping garbage into the North Sea.

Reasons for non-complianceFalsifying of records

Linked to maintenance problems and equipment failures Incorrect, mistaken entries, non valid reception certificates

from “cheap companies” that won´t be trustworthy for inspectors.

Perception of saving money for the owners “can-do” attitude of ship´s staff Misunderstanding of owners requirements Hiring “Cheap” services from unauthorized companies that in

the long-run can be far more expensive and annoying as we have seen.

Waste reception facilities inadequate

Waste Reception IMO recognized reception facilities are crucial for effective

MARPOL implementation

MEPC strongly encouraged Member States to fulfil their treaty obligations on providing adequate facilities

Policy of “zero tolerance of illegal discharges from ships” could only be enforced when there are adequate reception facilities

Port Reception Facility Database (PRFD) part of IMO Global Integrated Shipping Information System System (GISIS)

System for reporting inadequate facilities in place

Port Reception Database

6 Countries out of 27 in Latina America account with Port ReceptionFacilities for ANNEX I.

Port Reception Facilities in Latin America

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Solutions Ship-Shore interface

Strong relationship Regular meeting

Promote environmental values to ship and shore staff Reward good practices

Incentive scheme to encourage crew to report to management and help prevent pollution accidents

Use of adequate port reception facilities and authorized companies that issue valid receipts in order tu support truthful logs

Insist on truthful logs Inspectors extremely knowledgeable in detecting false entries

and non valid discharge receipts Prosecutions built on lying to federal officials, not for actual

pollution

Solutions Avoid unnecesary suspicion Whistleblowers

“wake up” call to company management Reward for poorly paid, disgruntled employees

RickyLaluNick Vinocur Sketch

For the past five months, this Filipino sailor has been lying low in a local motel room, waiting to make his appearance as a whistle-blower in federal deep-sea pollution trial. He spoke out for the first time last week, testifying that his employers ordered him to dump waste oil into international waters.

What do Ship operators want? Demonstrate an environmentally responsible profile Reduce risk of unintentional violation of rules Flexible solutions Environmental awareness of the crew related to waste

Training / company philosophy

The commercial value of being in the forefront Potential reduced harbour fee for being green ISO 14000 certification

Goodwill in the market and towards authorities Less hassle Responsible care handling of waste / visible care program

One contact point for waste handling

What do Ship operators want? One contact point for waste handling

Operational efficiency for the ship Legal aspect – licenses etc. Efficient handling in the ports Make common procedures between vessels and ports Standarized landing manifest

•Toilets•Medical

Facility Water

•All liquids collected in

open spaces in the bottom of

the ship

•Used Lube Oil•Fuel SLUDGE

•Paper &

Plastic

•Food Waste

•Cans - Glass

•Chemicals•Spent

Fluorescents•Batteries

•Used Paints / Thinners

•Dry Cleaning Waste

•Photo Waste

SHIP WASTE STREAM - TREATMENT PROCEDURES ON SHORE

TREATMENT PROCEDURES

WATER TREATMENT PLANTS AUTHORIZED BY THE ENVIRONMENTAL MINISTRY AND ACCORDING TO THE NATIONAL WATER ACT REGULATIONS.

RECYCLE SLUDGE IN ORDER TO PROCESS IT TO ALTERNATE FUEL SOURCE. PROCESS COMPLIES WITH THE ENVIRONMENTAL MINISTRY RECYCLE REGULATIONS.

RECYCLING ACCORDING TO RECYCLING ACCORDING TO ENVIRONMENTAL MINISTRY ENVIRONMENTAL MINISTRY DIRECTIVES:DIRECTIVES: BATTERIES, TIN BATTERIES, TIN & ALUMINUM CANS , & ALUMINUM CANS , PAPPER, PLASTIC AND GLASS PAPPER, PLASTIC AND GLASS ARE PROCESSED FOR ARE PROCESSED FOR RECYCLING RECYCLING WITH WITH COMPANIES MEMBER OF COMPANIES MEMBER OF THE THE NATIONAL INSTITUTE OF NATIONAL INSTITUTE OF RECYCLING. RECYCLING.

DELIVERED TO HAZARDOUS WASTE RECEPTION FACILITY FOR DESTRUCTION. COMPLIES WITH ENVIRONMENTAL MINISTRY AND INTERNATIONAL REGULATIONS.

What creates value? One contact point for waste handling

Time Saving Standarization on waste handling on all vessels

Simplicity “Hassle-Free” 24/7 collection of waste at vessel Standarization on documentation and best practice One contact & invoice for the client in many ports Standarized forms & documentation gives standarized answers

Less administration of visitors in the port (ISPS) Less congestion on the ports side

That is why TRAER is launching Adequate Port Reception Facilities in Latin American Ports

THANK YOUFor your attention!

Alejandro Trillo E-mail: alejandro@traer.com.mx