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FMC’s Canadian ballast water rule investigation begins

Lake Carriers’ Association says Canada’s ballast water rule threatens well-being of U.S. Great Lakes shipping

The U.S. Federal Maritime Commission (FMC) said on Tuesday it will start its investigation into whether Canada’s proposed ballast water regulations discriminate against U.S.-flag vessels operating in the Great Lakes and St. Lawrence Seaway.

The FMC published a notice on its website setting a 30-day deadline for interested parties to submit comments related to the commission’s investigation. The notice will also be published in the Federal Register soon.

On May 20, the five FMC commissioners — Chairman Michael Kouri, Rebecca Dye, Louis Sola, Daniel Maffei and Carl Bentzel — voted to approve a petition from the Lake Carriers’ Association (LCA) asking the agency to investigate the proposed Canadian ballast water regulations. LCA filed the petition with the FMC on March 6.

Under the 1920 Merchant Marine Act, the FMC is authorized to investigate the competitive fairness of Canada’s ballast water regulations. The law also allows the agency to levy fines on another country’s 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, if it determines that discriminatory shipping practices are in play.

Transport Canada proposed its national ballast water regulations on June 8, 2019, and set a compliance date for the ocean shipping industry of Sept. 8, 2024.

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.

The Canadian government said its proposed ballast water regulations are in line with the International Maritime Organization treaty to which Canada is a party and the U.S. is not.

The last time the FMC initiated this investigative authority was 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.

(Click for more American Shipper/FreightWaves articles by Chris Gillis.)

Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.