On June 27, 2011, the U.S. Environmental Protection Agency (EPA) and U.S. Coast Guard (USCG) announced their agreement to jointly enforce Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL), as implemented in the United States by the Act to Prevent Pollution from Ships (APPS) by way of a Memorandum of Understanding (MOU). Annex VI of MARPOL addresses air pollution from ships through the use of both engine-based and fuel-based standards.

Since January 8, 2009, all U.S. flagged vessels and non-U.S. flagged vessels operating in U.S. waters must be in compliance with the regulations of MARPOL Annex VI and the APPS provisions implementing Annex VI.

(See Holland & Knight’s January 21, 2010 Maritime Alert for a discussion of the new emission and fuel standards for Category 3 marine diesel engines applicable under MARPOL Annex VI.)

The Memorandum of Understanding

The purpose of the MOU is to set forth the terms by which the EPA and USCG will cooperate to mutually implement and enforce the provisions of Annex VI. The MOU contains “General Provisions” providing for, inter alia, the joint development of protocols for enforcement activities on board vessels in ports and facilities, review and retention of documents, and other matters provided for in APPS. The General Provisions also provide for the sharing of information regarding inspections, examinations and investigations between the EPA and UCSG, and cooperation in the enforcement of violations. Specifically, the USCG will notify the EPA of detentions under Annex VI within the scope of the MOU.

The MOU also has “Specific Provisions” which apply to (a) ship and engine certification procedures, (b) enforcement aboard ships, (c) enforcement on reception facilities, and (d) enforcement of fuel oil availability and quality. There are provisions allocating responsibility for specific enforcement tasks between the EPA and the USCG. For example, the EPA has the sole authority to issue, modify and revoke EIAPP certificates1 for any applicable engine of a ship or any part of an applicable engine. Interestingly, while the USCG has specifically delegated authority to classification societies to perform certain functions, the MOU expressly provides that “nothing contained herein will be construed as constituting a delegation of any EPA authority to a classification society.”

Pursuant to APPS, the USCG has authority and responsibility to conduct ship inspections, examinations, and investigations, and to undertake enforcement action. The USCG may, however, request that EPA attend or assist on any ship inspection, examination or investigation falling under the MOU. In addition, the EPA may request that it be allowed to attend or assist with any ship inspection, examination or investigation under the MOU.

The EPA and USCG have authority to conduct inspections and investigations of reception facilities2 in accordance with Regulation 17 of Annex VI and APPS at 33 U.S.C. § 1907(f). The USCG performs these inspections during the course of reception facility inspections, and either party may request to attend or assist with any reception facility inspection.

The EPA and USCG have authority and responsibility for fuel oil availability and quality (as per Regulation 18 of Annex VI), including the bunker delivery note and fuel sample. The EPA is responsible for verifying compliance with fuel oil availability and quality and for maintaining a register of local suppliers of fuel oil. The USCG is responsible for examining bunker delivery notes during the course of a flag State inspection or port State examination. Either party may request that the other attend or assist on any inspection or investigation related to fuel oil availability and quality under the MOU.

Criminal Penalties

As for criminal penalties, the MOU provides that each party shall make determinations on referrals for criminal prosecutions in accordance with their own internally established policies and procedures for those matters over which they have authority. MARPOL Annex VI requires ship operators to maintain records on board that detail their compliance with emissions standards, fuels requirements and other provisions of Annex VI. As has been the case in the context of waste oil discharges under MARPOL Annex I (through APPS and related regulations), the EPA and the USCG can be expected to make criminal enforcement of air pollution recordkeeping a priority. Vessel operators must maintain accurate books and records and understand that U.S. government agencies view presenting false records and lying to inspectors to be felony criminal offenses of obstruction of justice and making false statements. Both offenses carry significant jail time for individuals (up to 20 years for obstruction of justice), and for corporations there are extensive fines, probationary periods, legal and other expenses while the criminal case is pending, and the implementation of onerous environmental compliance programs as a condition of probation.

EPA and USCG Industry Letter

Also on June 27, the EPA and USCG sent out a letter to the maritime industry addressed specifically to shipowners, ship operators, shipbuilders, marine diesel engine manufacturers, marine fuel suppliers and any other interested groups. It was sent as a reminder of the regulations in Annex VI of MARPOL and to advise that the EPA and USCG are taking measures to promote compliance with these regulations, including investigating potential violations and pursuing enforcement actions and related penalties for any violations.

The industry letter highlights the progressively more stringent limits under MARPOL Annex VI for both sulfur oxide emissions and nitrogen oxide emissions that are incorporated into U.S. regulations, and provides summaries of these standards. It also highlights other requirements under Annex VI and APPS that may be applicable, such as the EIAPP certificates, recordkeeping and fuel samples, and surveys. In addition, the letter discusses the more stringent emission standards applicable to ships operating in emission control areas (ECAs) as well as certain enforcement issues. For example, the letter states that persons found to have violated MARPOL Annex VI, APPS, or any implementing regulation may be liable for a civil penalty up to $25,000 for each violation, and each day of continuing violation may constitute a separate offense.

The MOU itself does not add any new compliance requirements, but along with the industry letter it signals that enforcing the air pollution regulations of MARPOL Annex VI as implemented by APPS will be a top priority of the EPA and USCG in the coming days.

Additional Information

The full text of the MOU and the industry letter can be found on the EPA website. More detailed information on the MARPOL Annex VI requirements is also available on the EPA website. For MARPOL Annex VI information on the Coast Guard website, select Domestic Vessels, Domestic Vessel General and MARPOL Annex VI. You will find USCG policy letter (CG-543 Policy Letter 09-01), which contains guidelines for ensuring compliance with Annex VI.