The beginning of 2018 was marked by an apparent splash of the State Ecological Inspection (“Inspection”) activity which frequently ended with spontaneous detention of ships in Ukrainian seaports. Needless to say, such detentions were always a huge and unpleasant surprise both for the owner and for the crew. One of the most popular reasons routinely employed by the Inspection for the last several years is the pollution of Ukrainian waters as a result of the release of ballast waters by the ships entering and staying in Ukrainian seaports.

As a number of seawaters pollution cases continued to rise, the Association of Maritime Agencies of Ukraine decided to publicly address Ukrainian PM Mr. Groysman and Ukrainian Minister of Infrastructure Mr. Omelyan. According to the Association, state inspectors collect extracts of waters around a ship, conduct its laboratory analysis and the results thereof are claimed to confirm that the pollution of seawaters has been caused by the ballast waters from the ship. Subsequently, the state inspectors try to board the ship in order to examine the isolated ballast waters. If a shipmaster refuses to let inspectors on the ship, they block the ship from leaving the port by stamping refusal based on ecological or radiological control or by the refrain from stamping any decision.

The abovementioned situation causes anything but fair outrage of shipowners, especially given the fact that Ukrainian government has repeatedly committed to deregulate and to ease government control over business activity, while the government decisions of recent years tend to affirm this path. Nevertheless, the cases with ship’s inspections and the following detentions in Ukrainian ports still happen and there is no rational anticipation that they cease to occur in the nearest future.

Therefore, shipowners and, what is crucial, shipmasters should be knowledgeable about how to lawfully release the ballast waters, when state inspectors can inspect the waters and the ship, how potential damages to seawaters are measured and whether the authorities have the power to detain ships in the ports. This is all down the way of reducing the probability of unexpectable losses and unfavorable outcomes for shipowners.

A Release of Ballast Water into Territorial Waters of Ukraine: General Review

International practice tells that the release of ship ballast water is not prohibited per se. Several international conventions to which Ukraine is a party stipulate that the release of ballast water does not qualify as “disposal” of waste or other contaminating substances if it amounts to the results of normal functioning of vessels.

However, in accordance with the State Sanitary Rules on Release of Ballast Waters, the release of isolated ballast waters into territorial waters of Ukraine is allowed only if they were treated before against microbiological and parasite flora and fauna, or they were fetched (exchanged) outside territorial waters of the state whose port the ship left from. For this purpose, there shall be an appropriate technical system for treatment of isolated ballast water.

Furthermore, the release of isolated ballast waters is permissible only if the concentration of pollutant does not exceed the limitations prescribed by the Annex to the Rules on Protection of Internal Sea Waters and Territorial Sea from Contamination and Pollution adopted by the Cabinet of Ministers of Ukraine (the “Rules”).

It is important to note, that Ukrainian legislation differs the notions of “clear ballast waters” and “dirty ballast waters” in terms of presence of pollutants in the waters. Moreover, Ukrainian law specifies that “isolated ballast waters” are only those which were preserved in a special tank, separated from cargo and oil tanks and aimed solely to keep ballast waters. Only a release of isolated and clear ballast waters or of isolated ballast waters obtained in Black or Azov seas is not subject to any control and limitations.

At the same time, the State Sanitary Rules explicitly limit the right to release non-insulated ballast waters by allowing the release of those containing no more than 15 ppm of oil (15 parts of oil per million parts of water).

Pollution of Ukrainian Internal Waters by The Release of Ballast Waters: who defines and how

Ukrainian legislation entitles the Inspection and its territorial subsidiaries to protect Ukrainian internal waters from pollution, establishes the fact thereof and calculate the damages if such occurs. Before 2015, the competence of the Inspection to measure ballast waters of ships entering Ukrainian ports and to control the release of such waters put enormous pressure on shipowners and was the source of widespread corruption among state inspectors. The reason was that Ukrainian practice of measurement of ballast water was abnormal (comparing to other countries) – the Inspection was entitled to extract and examine the ballast water from any ship entering Ukrainian ports.

In 2015, the Ukrainian government changed the system of environmental control in Ukrainian seaports by limiting the scope of the Inspection’s competence to check isolated ballast waters only to cases where two conditions are simultaneously satisfied:

1) there is pollution caused by the release of ballast waters and the pollution is evident;

2) such pollution resulted in factual deterioration of water quality.

Moreover, the Ukrainian court has recently established that there should be a strong causal link between the release of ballast waters and the pollution so there is no reasonable ground to believe that the pollution was caused not by the ship which is accused thereof. Two important remarks should be made in this regard. First is that state inspectors shall extract samples of both isolated ballast waters and waters around the ship [Blue Lake Star ship case] – the latter has exceptional importance, since evident signs of ballast waters release (for example, foam) does not necessarily point to contamination as such. Second is that the inspectors shall abstract isolated ballast waters samples exclusively after examination of waters around the ship so that the pollution of waters around the ship is not only witnessed ‘by eye’ but also confirmed by expert examination [Iron Destiny ship case].

In 2017, the Cabinet of Ministers of Ukraine canceled the 1995 Ministry of Ecology and Natural Resources of Ukraine Regulation (‘Regulation’) which prescribed for the procedure of calculation of damages caused by pollution from ships. It led to the paradoxical situation where tariffs for damages calculation, established by the other Cabinet Regulation, was left in force, while the procedure by which the Inspection shall conduct a calculation of damages was abolished.

As a result, while the competence of the Inspection to establish the fact of pollution, to calculate the damages thereof and to demand an appropriate redress from a shipowner is clearly enshrined in Ukrainian law, a method of calculation remains questionable as far as it is unregulated in any law or regulation. As such, it can even compromise the calculation as such since the Ukrainian Constitution requires Ukrainian authorities and officials act only in a method directly prescribed by the Constitution and laws of Ukraine.

Detention of Ships in Ports of Ukraine for Reasons of Polluting Ukrainian Seawaters: a question of legality?

The other gap created by deregulation measures of Ukrainian government concerns detentions of ships until the moment the shipowners compensate the damages.

Before 2017, the Regulation clearly and unequivocally entitled the Inspection to detain a ship in the port if this ship refuses either to pay out the estimated damages or to issue a bank guarantee covering the sum thereof. Now this power is gone, and the time has shown that the Inspection, failed to produce a legally sound, proportionate and, at least, unified approach towards the matter.

In one group of cases, the Inspection retained ships and prevented them from leaving the ports by not stamping for a long period of time either approval or rejection as a result of environmental and radiological control. As such, ship documents remained incomplete, and the shipowner was forced to pay out the fine and the damages in order to get the stamps and leave the port. In response to this tactic, Ukrainian courts have repeatedly stated that such practice is illegal since Ukrainian law obliges the authorities to stamp either approval or rejection on ship documents within a 30-minutes period after conducting environmental and radiological control, while Ukrainian law does not entitle the authorities to refrain from stamping any decision [Ocean Future ship case; Blue Lake Star ship case].

Another frequent scenario employed by the Inspection is to send its letter/decision to a master of a seaport demanding the master to prevent a ship from leaving the port. In principle, Article 91 of the Merchant Shipping Code of Ukraine stipulates, in general terms, the power of the Inspection to do so. However, there is at least one decision of the Ukrainian court, where the latter concluded that the port master enjoys a margin of appreciation (independently of that of the Inspection) while deciding upon prevention of a ship from leaving the port and, apparently, this appreciation includes an examination of the reasonableness of the State Ecological Inspection decision [Tasik Mеlati ship case]. Besides that, the Court agreed with unlawfulness of the State Inspection decision on the basis of legal certainty considerations. The latter is especially important given the fact that such a ban imposed by a port master is not bound by any time-limits.

Instead of a conclusion

Shipowners may avoid most of the harmful consequences to their ships while dealing with the Inspection if they follow a few simple steps when the Inspection blames them for pollution of waters.

Firstly, any examination whatsoever is lawful only if the pollution is evident, meaning that visible particles of oil or oil-related substances are floating around the ship. Moreover, the latter fact shall be established during daylight, eliminating any reasonable doubts that evident and presumed pollution was caused exactly from this ship and recorded on a videotape. Plus, any assumption that particles or foam floating around the ship is real pollution shall be verified by due examination of waters around the ship, thus you can demand a valid proof thereof. Also, board documents which record collecting and releasing of ballast waters are crucial to establishing if an inspection can be conducted and if the pollution did happen from this ship. All these circumstances are crucial to the lawfulness of the whole procedure, so the presence and subsequent testimonies of witnesses, video recording of state inspector’ actions can prove to be extremely helpful in the course of challenging inspectors’ actions and decisions.

Secondly, examination of ballast waters, if such happens, should be conducted only with proper equipment and in a method that allows protecting the integrity of the results of examination. Otherwise, the results of examination would fail to establish the fact that the ballast waters contain the pollutants in a number exceeding the norms or contain them at all. The latter can be ground for contesting the damages calculation. Do not forget to request from the inspectors a sample of isolated ballast water extracts – it will let you conduct the assessment by the experts whom you trust and present the assessment during the court proceedings. If you have any concerns regarding the procedure of waters samples abstractions (both from the isolate ballast system or around the ship), do not hesitate to voice them, since state inspectors are required to mention all your concerns and disagreements to the procedural document which they complete.

Finally, Ukrainian authorities continue the practice of detaining the ships which refuse to redress pollution damages. One of the possible solutions would be to issue a bank guarantee covering the sum of damages and to immediately contest the decision imposing penalties. This would allow a shipowner to avoid unfair penalties in the future while the ship would be let out the port as soon as possible.