The U.S. Federal Maritime Commission (FMC) said it will investigate whether Canada’s proposed ballast water regulations discriminate against U.S.-flag vessels operating in the Great Lakes and St. Lawrence Seaway.
All five FMC commissioners — Chairman Michael Kouri, Rebecca Dye, Louis Sola, Daniel Maffei and Carl Bentzel — on Wednesday voted to approve the petition from the Lake Carriers’ Association (LCA), which asked the agency to carry out the investigation.
Under Section 19(1)(b) of the 1920 Merchant Marine Act, the FMC has the authority to conduct the investigation into the competitive fairness of Canada’s ballast water regulations.
According to the LCA, Canada’s proposed ballast water regulations will require U.S.-flag Great Lakes vessels to install costly ballast water management systems to manage the take-on and discharge of ballast water in Canadian waters, although the U.S.-flag vessels never leave the Great Lakes or St. Lawrence Seaway.
“Because the science cited in the regulations does not show any environmental benefit to Canadian waters from regulating U.S. Lakers loading ballast water in Canadian waters, the inference is strong that that regulation is in fact a shipping regulation disguised as environmental regulation, and has the intent to drive U.S. Lakers out of an important foreign trade,” LCA said in its petition.
Khouri said the commission is aware of the concerns regarding the Canadian government’s ballast water regulations.
“The potential discriminatory effect these regulations — and the possible adverse impact of even the dependency of these proposed regulations — might have and be having on U.S. shipping in the Great Lakes trade area has been made clear to representatives of the Canadian government,” Khouri said in a statement.
“This Section 19 investigation will provide the commission the opportunity to explore these issues more fully while the Canadian government considers future actions concerning their ballast water regulations,” he added.
“Ensuring the U.S. lakers are on even footing with their Canadian counterparts is vital,” Maffei said. “If there is a chance the government of Canada is using the International Maritime Organization ballast water regime as an excuse to treat U.S.-flagged vessels unfairly, the commission must investigate.”
The FMC said it will publish a Federal Register notice in the coming weeks that will provide additional details about this commission action.
Section 19 of the 1920 Merchant Marine Act provides the FMC with authority to investigate and sanction discriminatory conditions caused by laws, rules or regulations of foreign governments. If the commission finds wrongdoing against U.S.-foreign trade, the law allows the FMC to levy fines on vessels calling U.S. ports, prohibit vessel calls at U.S. ports, and restrict cargoes that may be carried between the U.S. and a foreign country.
The last time the FMC initiated Section 19 investigative authority occurred in 1996 when American ocean carriers complained that Japanese port practices unfairly discriminated against them and raised their operations cost compared to the Japanese container lines.
In October 1997, the FMC in an unprecedented move temporarily ordered U.S. ports closed to Japanese container carriers for their hesitancy to pay up to $5 million fines to the U.S. government, which the agency imposed a month earlier related to the investigation.