Friday, March 4, 2016

Major Row Brews Over Implementation of SOLAS Regulation by US Freight Container Shippers

Less Than 4 Months to Go and Coastguard Accused of Double Standards After Speech to Exporters
Shipping News Feature
US – WORLDWIDE – The change in the SOLAS regulations which require shippers to declare an accurate weight for each container prior to shipment, a subject we have already covered at some length, have, up to now, received universal acceptance. We have often thought that the time it usually takes for the International Maritime Organization (IMO) to implement what are normally very sensible amendments to their codes of procedure for the shipping of freight, was unnecessarily long. Given the complexity of the IMOs international make up this might be a little unfair but now a major row is brewing over the changes, first mooted in 2010 and coming into force in just a few months.

Ports, exporters and agents have been gearing up for the changes which apply to all containers from 1 July 2016 and which we have detailed previously. Now however the World Shipping Council (WSC) has responded to comments from Rear Admiral Paul Thomas of the US Coastguard made in a presentation on March 1 when he said that the changes ‘place no obligation upon the shipper, only on the vessel’. Admiral Thomas it should be said is the Coast Guard’s Assistant Commandant for Prevention Policy and, as such, is responsible for overseeing enforcement of the new rules.

The WSC accuses Admiral Thomas of publicly announcing that the IMO was the wrong place to address the container weight accuracy regulation and that SOLAS was not an appropriate legal instrument to address the issue. Despite it being clear that shippers were bound by mandatory obligations he did not believe the regulations required shippers to provide the accurate information mandatory under the new rules.

The WSC also says that the Admiral went on to say not only were shippers in compliance whatever information they provided but that the US Coastguard would not apply the SOLAS regulations to American marine terminal operators and, whilst vessel operators would be subject to flag state enforcement, he believed the industry was in compliance with what was needed for safe navigation and he further believed ‘there should be no real problem’

The WSC’s response has been unequivocal and we therefore publish it in full. It came by way of an open letter to Admiral Paul F. Zukunft Commandant of the Coast Guard in Washington from John W Butler, President and CEO of the WSC, and reads:

“The International Maritime Organization (IMO) deliberated about how to best address the problem of inaccurate container weight declarations starting in 2010, and, after almost four years of deliberation and negotiation, it adopted an amendment to Chapter VI, Regulation 2 of the Convention in 2014. The purpose of that amendment is to address the continuing failure of too many shippers of containerized cargo to provide their carriers with accurate weights for loaded containers tendered for international ocean transportation. The SOLAS regulation sets forth a clear set of regulatory responsibilities applicable to shippers, port facilities, and vessel operators. The IMO gave governments and the industry more than two years to get ready to implement the regulation. The SOLAS amendment enters into force on July 1 of this year.

On July 20, 2015, the World Shipping Council wrote to you to inquire about the Coast Guard’s plans for implementation and enforcement of these new safety measures. On September 7, 2015, Rear Admiral Paul Thomas responded to our letter. We were pleased that Admiral Thomas acknowledged the importance of the issue and the need for implementation of the amended SOLAS regulation, when he stated:

’I am writing in reply to your organization’s letter of July 20, 2015, concerning the recent International Convention on the Safety of Life at Sea (SOLAS) amendment that requires the weighing of shipping containers. This new requirement is significant and it is important to ensure compliance because it addresses safety issues that are associated with loading containers with unverified weights. The Coast Guard fully supports the SOLAS amendment and we did so throughout its development at the International Maritime Organization. We are currently considering how to implement this requirement and are actively discussing a wide range of enforcement options.’

”Admiral Thomas was correct in his September letter when he stated the Coast Guard had been a full supporter of the SOLAS amendment throughout its development. The Coast Guard co-sponsored several papers at the IMO, which stated that misdeclared container weights are a significant problem, that the former SOLAS regulation needed to be amended to address the problem, and that new regulatory obligations on shippers, marine terminal operators, and vessel operators were the proper solution. The Coast Guard chaired the IMO correspondence group that developed and agreed upon the Implementation Guidelines for the new regulation, which set forth clear guidance for how shippers, vessel operators and terminal operators can meet their regulatory responsibilities. The US government, represented by the Coast Guard at the IMO, supported the SOLAS regulation that was adopted.

”At no time during the four years that the IMO discussed and developed this SOLAS regulation and implementation guidelines, or during the almost two years since the IMO’s adoption of the regulation, did the Coast Guard ever say or indicate that the IMO was the wrong forum to address this issue, that the SOLAS Convention did not have adequate or jurisdiction or competence to regulate shippers and terminal operators with respect to this issue, that the regulation did not apply to the parties it said it applied to, or that the United States would not or could not implement the regulation that it supported at the IMO.

”At no time did the IMO Secretariat ever state or imply that the SOLAS regulations do not or could not apply to shippers or terminal operators, or that any government had expressed such a view to it. At no time did any government at the IMO make such a statement. For the ocean carriers, terminal operators, shippers, software companies and others that have been preparing for the July 1 implementation of the new regulation, this announcement has been stunning. People around the world do not comprehend the content or the rationale of the US Coast Guard’s announcements this past week. As you might imagine, many people are confused and upset about how we got to this point.

”From a practical standpoint, reading shippers out of the SOLAS regulation makes it impossible for carriers to obtain the container weight information that the regulation requires them to have. This is not, as Admiral Thomas’ statements this week suggest, simply a commercial matter. It is a regulatory manner, and the effectiveness of the SOLAS solution depends on shippers, carriers, and terminal operators all fulfilling their obligations to make sure that the ship is safely stowed. It is disingenuous and factually incorrect for the Coast Guard to suggest that relieving shippers of their regulatory obligation will not fundamentally undermine the effectiveness of the SOLAS container weight verification requirements. It is not possible to have it both ways.

”We can only assume that Admiral Thomas has accurately represented the Coast Guard’s position. If he has, then we respectfully request that the Coast Guard reconsider and reverse that position. If Admiral Thomas’ statements do not accurately reflect the Coast Guard’s position, then we would expect that a clarification would be issued promptly. What we find particularly troubling is that, if the Coast Guard thought the IMO was the wrong forum to address this issue, how it could have acted the way it did at the IMO, with the IMO Secretariat, with other governments, and with industry groups who were all working in good faith to address this issue, without articulating its views?

”If the Coast Guard thought SOLAS was the wrong instrument to address this issue, why did it not say so during the four years of the SOLAS regulation’s development? If this was the Coast Guard’s view, how could it agree to cosponsor the various IMO papers that it did? If the Coast Guard thought this way, why did it chair the correspondence group to develop and agree upon the new regulation’s Implementation Guidelines?

”If the problem were much narrower and simply a matter that US national law and existing Coast Guard regulations do not presently enable the Coast Guard to enforce the new SOLAS regulatory responsibilities of terminal operators and shippers, why did the Coast Guard wait until the eve of implementation to say so? If this is the problem, why did Admiral Thomas say what he did about the IMO and SOLAS and undermine the credibility of the IMO as the appropriate and effective forum to develop international regulatory solutions to international shipping problems?

”If this narrower US domestic law issue is the problem, why did the Coast Guard not undertake an Administrative Procedure Act rulemaking to establish a domestic implementing regulation after the IMO adopted the regulation in May 2014? If additional statutory authority was needed for the US national implementation of any part of the SOLAS regulation, why did the Coast Guard not inform the Congress that it needed such authority in order to implement the SOLAS regulation it had supported at the IMO? The IMO gave governments over two years to get ready to implement this regulation, yet the Coast Guard took no action and expressed no indication of its intentions until this past week."

In summing up Mr Butler points out the US submission to the IMO Secretary General in the IMO’s examination of ‘trends, developments and challenges’ the Coast Guard stated the following in its Annex 6 comments on ‘Implementation of IMO Instruments':

’Ultimately the IMO and the maritime industry, as a whole, will be judged on its overall performance and while we can continue to raise standards, increased implementation with increased compliance with all requirements will improve overall industry performance.’.

In conclusion the WSC boss asks for a meeting with the US Coastgaurd hierarchy to clarify the US position of the matter. Admiral Thomas’s comments were made at the JOC 16th annual TPM Conference in Long Beach, California, and seem to have been a reaction to some fairly hostile enquiries from US agricultural and other major export groups.

This will doubtless be one to watch as it may well be perceived as the US putting itself above IMO authority in the name of trade, something which overseas cynics will say is nothing out of the ordinary.

Photo: Rear Admiral Paul Thomas pictured in 2009.