As of 2017, all ballast water which is to be released into the environment will have to be treated first. This is certainly a landmark step for the health of our planet but possibly also for the health of the depressed shipping market.

Vessels use ballast water for a wide range of operational matters, including stability and draft. Issues have arisen over the years because the water used is not treated and contains aquatic species, pathogens and organisms. When a vessel takes in ballast water from one part of the world, it then goes on to discharge it somewhere else, thereby transferring the ballast water containing potentially invasive non-native species into a foreign eco-system, causing irreversible damage to the environment.

All vessels will be responsible for treating their ballast water, as stipulated by the Ballast Water Management Convention* (BWMC or the Convention)

The BWMC requires all ballast water which is to be released into the environment to be treated first so that it complies with the necessary standards and is not harmful to the environment. The organisms in the ballast tank are required to be "non-viable" before the water is released into the sea so that it cannot contribute to further bio-invasion.

Specific water management system will have to be installed on all vessels

In order for the ballast water to be treated a Ballast Water Management System (BWMS) is required to be installed on-board most, if not all ships. The BWMS must be specifically fitted for each ship after extensive work, and surveys have been conducted to assess the type of systems required and the space available to install the same.

The system on-board the ship must be approved by the Flag State and be considered compliant by the states to which the ship trades. Each State which is a signatory to the Convention will have a list of approved systems which they have determined compliant. This is where further problems occur, and complications will arise in the future. It is likely, particularly in the current depressed market, that some operators will be forced to scrap their ships or cease owning ships entirely.

International requirements: facing practical issues

BWMC requires the organisms to be non-viable, which is not the same as "dead", whereas the United States Coast Guard ("USCG") requires the organisms to be "dead-dead" which is a higher standard; this may end up being the de-facto global standard.

The BWMSs are not future compliant, so operators have to select their system very diligently to ensure it will be fit for purpose for the life span of the ship.

Estimates indicate there are a maximum of 27,500 BWMSs' currently installed worldwide. Considering the capacity of yards and the type of approved BWMSs available, a maximum of 13,000 BWMSs can be installed per year. Accordingly, it is unlikely that more than 40,000 BWMSs will be installed by the time the Convention comes into effect in the second half of 2017, although luckily ships will be able to wait until their first scheduled IOPC renewal survey. It is estimated that in 2016, merchant shipping tonnage alone is in excess of 50,000 ships.

Compliance issues: owners' responsibilities

Thankfully, there are some BWMSs which are approved by the USCG as alternative management systems and a further 19 BWMS manufacturers which are currently seeking approval. However, an approved system is one thing; uniformity in sampling and assessing conformity with the standards is another.

To ensure compliance with the Convention, Owners must:

  1. Have a valid BWM certificate on-board;
  2. Maintain their BWM record book;
  3. Train their crew;
  4. Implement essential BWM procedures; and
  5. Produce samples in compliance with the standards applicable;

Companies which have already started testing and putting on-board approved BWMSs can benefit from grandfather provisions, allowing them a further 5 years to be compliant if the BWMS which was installed does not meet the standards required.

A costly measure

The BWMS is expensive and retro-fitting can cost up to USD 5 million, plus additional maintenance and operational costs. Considering these types of costs, it is likely that a significant number of ships may be scrapped rather than modified.

Older ships which are currently laid up might also be scrapped in favour of new builds in order to benefit from the longevity. Other ships will have to be scrapped where retro-fitting a BWMS will practically be impossible.

If more ships are scrapped than built, this will result in the decrease of ocean going tonnage, and with fewer ships comes a less saturated market which may work in favour of increased hire and freight rates.

Whilst the increased costs and practical difficulties involved in fitting a BWMS are, and will continue to be, of significant concern to operators trying to make their vessels compliant with the Convention when it enters into force, the silver lining might come in the form of a modern and more environmentally friendly global fleet, a reduction in global overcapacity and improved hire and freight rates.