LATIN AMERICAN PANEL LATIN AMERICAN PANEL NOVEMBER 1, 2007NOVEMBER 1, 2007

UPDATE ON UPDATE ON LEGAL MATTERSLEGAL MATTERS

JOSEPH ANGELOJOSEPH ANGELODEPUTY MANAGING DIRECTORDEPUTY MANAGING DIRECTOR

LAWSUITSLAWSUITS

• MASSACHUSETTS LAWSUITMASSACHUSETTS LAWSUIT

• BALLAST WATER LAWSUITBALLAST WATER LAWSUIT

• EUROPEAN SHIP SOURCE EUROPEAN SHIP SOURCE POLLUTION DIRECTIVEPOLLUTION DIRECTIVE

• CARB AIR EMISSION REGSCARB AIR EMISSION REGS

LEGALLEGAL

• AUGUST 2004 – MASSACHUSETTS AUGUST 2004 – MASSACHUSETTS PASSES STATE LAW REGULATING SHIP PASSES STATE LAW REGULATING SHIP DESIGN AND OPERATIONSDESIGN AND OPERATIONS

• JAN 2005 – US FEDERAL GOVT TAKES JAN 2005 – US FEDERAL GOVT TAKES MASS TO COURT - STATE LAW MASS TO COURT - STATE LAW PREEMPTED BY FEDERAL LAWS/REGSPREEMPTED BY FEDERAL LAWS/REGS

• FEB 2005 – INDUSTRY COALITION FEB 2005 – INDUSTRY COALITION JOINS FEDERAL GOVERNMENTJOINS FEDERAL GOVERNMENT

MASS LAWSUITMASS LAWSUIT

• JULY 2006 - FEDERAL COURT RULES JULY 2006 - FEDERAL COURT RULES PROVISIONS OF MASS LAW INVALIDPROVISIONS OF MASS LAW INVALID

• DECISION UPHOLDS COAST GUARD DECISION UPHOLDS COAST GUARD AUTHORITY OVER VESSEL AUTHORITY OVER VESSEL OPERATIONS IN US WATERSOPERATIONS IN US WATERS

• REINFORCES UNANIMOUS US REINFORCES UNANIMOUS US SUPREME COURT DECISION IN 2000 SUPREME COURT DECISION IN 2000 WHEN INTERTANKO TOOK STATE OF WHEN INTERTANKO TOOK STATE OF WASHINGTON TO COURTWASHINGTON TO COURT

MASS LAWSUITMASS LAWSUIT

• SEPT 2006 - MASS FILES NOTICE TO SEPT 2006 - MASS FILES NOTICE TO APPEAL FEDERAL COURT DECISIONAPPEAL FEDERAL COURT DECISION

• DECEMBER 2006 - MASS FILES APPEALDECEMBER 2006 - MASS FILES APPEAL

• FEBRUARY 20, 2007 - FEDERAL GOVTFEBRUARY 20, 2007 - FEDERAL GOVTAND INDUSTRY COALITION SUBMIT AND INDUSTRY COALITION SUBMIT RESPONSE TO MASS APPEALRESPONSE TO MASS APPEAL

• MAY 8, 2007 - ORAL ARGUMENTS MAY 8, 2007 - ORAL ARGUMENTS HEARD BY COURT OF APPEALSHEARD BY COURT OF APPEALS

MASS LAWSUITMASS LAWSUIT

ISSUES APPEALED BY MASSACHUSETTS:ISSUES APPEALED BY MASSACHUSETTS:

- TUG ESCORT REQUIREMENTS;- TUG ESCORT REQUIREMENTS;

- MANNING REQUIREMENTS; AND- MANNING REQUIREMENTS; AND

- FINANCIAL RESPONSIBILITY LEVEL,- FINANCIAL RESPONSIBILITY LEVEL, BUT ALLOW THE STATE TO REDUCE BUT ALLOW THE STATE TO REDUCE THE LEVEL BASED ON COMPLIANCE THE LEVEL BASED ON COMPLIANCE WITH OTHER REQUIREMENTS WITH OTHER REQUIREMENTS

MASS LAWSUITMASS LAWSUIT

JUNE 2007 – APPEALS COURT DECISION:JUNE 2007 – APPEALS COURT DECISION:

• OVERTURNS DISTRICT COURT DECISION OVERTURNS DISTRICT COURT DECISION THAT THREE PROVISIONS WERE INVALIDTHAT THREE PROVISIONS WERE INVALID

• HOWEVER, DOES NOT DECLARE THE THREE HOWEVER, DOES NOT DECLARE THE THREE PROVISION VALIDPROVISION VALID

• MANDATES FURTHER ANALYSIS OF THE MANDATES FURTHER ANALYSIS OF THE LEGALITY OF THE THREE PROVISIONS BE LEGALITY OF THE THREE PROVISIONS BE PERFORMED BY DISTRICT COURTPERFORMED BY DISTRICT COURT

• LIFTS INJUNCTION AGAINST ENFORCEMENTLIFTS INJUNCTION AGAINST ENFORCEMENT• DIRECTS PARTIES TO NEGOTIATE INTERIM DIRECTS PARTIES TO NEGOTIATE INTERIM

AGREEMENT ON ENFORCEMENTAGREEMENT ON ENFORCEMENT

MASS LAWSUITMASS LAWSUIT

• MASS HAS REBUFFED EFFORTS TO MASS HAS REBUFFED EFFORTS TO REACH AGREEMENT ON ENFORCMENTREACH AGREEMENT ON ENFORCMENT

• MASS DEP NOT AGRESSIVELY MASS DEP NOT AGRESSIVELY ENFORCING THE THREE PROVISIONSENFORCING THE THREE PROVISIONS

• INTERTANKO ADVISES MEMBERS TO INTERTANKO ADVISES MEMBERS TO COMPLY WITH MASS REQUIREMENTSCOMPLY WITH MASS REQUIREMENTS

• OCTOBER 15 – STATUS CONFERENCE OCTOBER 15 – STATUS CONFERENCE OF PARTIES TO REVIEW APPEALS OF PARTIES TO REVIEW APPEALS COURT DECISIONCOURT DECISION

BALLAST WATER LAWSUITBALLAST WATER LAWSUIT

• IN 2004 ENVIRONMENTAL GROUPS IN 2004 ENVIRONMENTAL GROUPS TAKE US EPA TO COURT FOR NOT TAKE US EPA TO COURT FOR NOT REGULATING BALLAST WATER REGULATING BALLAST WATER DISCHARGESDISCHARGES

• MAIN REASON IS THAT THEY ARE MAIN REASON IS THAT THEY ARE UPSET WITH SLOW PROGRESS OF UPSET WITH SLOW PROGRESS OF USCG IN REGULATING BALLAST USCG IN REGULATING BALLAST WATER DISCHARGESWATER DISCHARGES

• JUNE 2005 – INDUSTRY COALITION JUNE 2005 – INDUSTRY COALITION JOINS FEDERAL GOVT IN LAWSUITJOINS FEDERAL GOVT IN LAWSUIT

BALLAST WATER LAWSUITBALLAST WATER LAWSUIT

• SEPT 2006 FEDERAL COURT ORDERS SEPT 2006 FEDERAL COURT ORDERS EPA TO DEVELOP REGS FOR ALL SHIP EPA TO DEVELOP REGS FOR ALL SHIP DISCHARGES, INCLUDING BALLAST DISCHARGES, INCLUDING BALLAST WATER, UNDER NPDES PERMIT SYSTEM WATER, UNDER NPDES PERMIT SYSTEM NO LATER THAN SEPT 2008NO LATER THAN SEPT 2008

• JUDGE ACKNOWLEDGES THAT USCG JUDGE ACKNOWLEDGES THAT USCG HAS AUTHORITY UNDER CERTAIN HAS AUTHORITY UNDER CERTAIN LAWS, BUT BELIEVES CONGRESS ALSO LAWS, BUT BELIEVES CONGRESS ALSO GAVE AUTHORITY TO EPA UNDER THE GAVE AUTHORITY TO EPA UNDER THE CLEAN WATER ACTCLEAN WATER ACT

BALLAST WATER LAWSUITBALLAST WATER LAWSUIT

• EPA DISAGREES WITH COURT EPA DISAGREES WITH COURT DECISION WHICH WILL HAVE A DECISION WHICH WILL HAVE A SIGNIFICANT IMPACT ON EPA SIGNIFICANT IMPACT ON EPA

• NOVEMBER 2006 – FEDERAL GOVT AND NOVEMBER 2006 – FEDERAL GOVT AND INDUSTRY COALITION FILE NOTICESINDUSTRY COALITION FILE NOTICESOF INTENT TO APPEAL COURT ORDEROF INTENT TO APPEAL COURT ORDER

• MARCH 2007 – FEDERAL GOVT AND MARCH 2007 – FEDERAL GOVT AND INDUSTRY COALITION FILE APPEALSINDUSTRY COALITION FILE APPEALS

• AUGUST 2007 – ORAL ARGUMENTS AUGUST 2007 – ORAL ARGUMENTS HEARD BY APPELLATE COURTHEARD BY APPELLATE COURT

BALLAST WATER LAWSUITBALLAST WATER LAWSUIT

INDUSTRY PRIORITIES IN US BWM INDUSTRY PRIORITIES IN US BWM LEGISLATION:LEGISLATION:

• ESTABLISH SINGLE LAW THATESTABLISH SINGLE LAW THAT GOVERNS BALLAST WATER GOVERNS BALLAST WATER DISCHARGES IN US WATERS DISCHARGES IN US WATERS

• ESTABLISH US COAST GUARD AS ESTABLISH US COAST GUARD AS LEAD FEDERAL AGENCY LEAD FEDERAL AGENCY

• PREEMPT STATE REGULATIONSPREEMPT STATE REGULATIONS

• MIRROR IMO TREATY REQUIREMENTSMIRROR IMO TREATY REQUIREMENTS

EU DIRECTIVEEU DIRECTIVE

• SEPT 2005 EU ISSUES “SHIP SOURCE SEPT 2005 EU ISSUES “SHIP SOURCE POLLUTION” DIRECTIVE (2005/35/EC)POLLUTION” DIRECTIVE (2005/35/EC)

• MEMBER STATES REQUIRED TO MEMBER STATES REQUIRED TO IMPLEMENT DIRECTIVE BY APRIL 2007IMPLEMENT DIRECTIVE BY APRIL 2007

• DIRECTIVE (CRIMINALIZES ACCIDENTAL DIRECTIVE (CRIMINALIZES ACCIDENTAL POLLUTION) HAS TWO PROBLEMS:POLLUTION) HAS TWO PROBLEMS:- CONTRADICTS MEMBER STATES’- CONTRADICTS MEMBER STATES’ TREATY OBLIGATIONS TREATY OBLIGATIONS- LIABILITY TEST FOR “SERIOUS - LIABILITY TEST FOR “SERIOUS NEGLIGENCE” LACKS LEGAL NEGLIGENCE” LACKS LEGAL CERTAINTY CERTAINTY

EU DIRECTIVEEU DIRECTIVE

• INDUSTRY DOES NOT HAVE DIRECT INDUSTRY DOES NOT HAVE DIRECT ACCESS TO EUROPEAN COURT OF ACCESS TO EUROPEAN COURT OF JUSTICE - ACTION MUST COME FROM JUSTICE - ACTION MUST COME FROM MEMBER STATEMEMBER STATE

• DEC 2005 INDUSTRY COALITION DEC 2005 INDUSTRY COALITION INITIATES LEGAL PROCEEDING IN UK INITIATES LEGAL PROCEEDING IN UK HIGH COURT IN LONDON REQUESTING HIGH COURT IN LONDON REQUESTING “JUDICIAL REVIEW”“JUDICIAL REVIEW”

• OBJECTIVE IS TO HAVE UK COURT OBJECTIVE IS TO HAVE UK COURT RULING TO REFER MATTER TO ECJRULING TO REFER MATTER TO ECJ

EU DIRECTIVEEU DIRECTIVE

IN JUNE 2006 UK JUDGE GRANTS REQUEST, IN JUNE 2006 UK JUDGE GRANTS REQUEST, REFERS 4 ISSUES TO ECJ:REFERS 4 ISSUES TO ECJ:

• CAN EU IMPOSE CRIMINAL LIABILITY WITH CAN EU IMPOSE CRIMINAL LIABILITY WITH RESPECT TO DISCHARGES FROM FOREIGN RESPECT TO DISCHARGES FROM FOREIGN SHIPS IN EEZ;SHIPS IN EEZ;

• CAN EU EXCLUDE MARPOL DEFENSES FOR CAN EU EXCLUDE MARPOL DEFENSES FOR DISCHARGESDISCHARGES

• DOES IMPOSITION OF CRIMINAL DOES IMPOSITION OF CRIMINAL SANCTIONS FOR DISCHARGES CAUSED BY SANCTIONS FOR DISCHARGES CAUSED BY “SERIOUS NEGLIGENCE” HAMPER RIGHT “SERIOUS NEGLIGENCE” HAMPER RIGHT OF INNOCENT PASSAGEOF INNOCENT PASSAGE

• DOES “SERIOUS NEGLIGENCE” SATISFY DOES “SERIOUS NEGLIGENCE” SATISFY LEGAL CERTAINTYLEGAL CERTAINTY

EU DIRECTIVE EU DIRECTIVE

• NOV 2006 - INDUSTRY COALITION FILED NOV 2006 - INDUSTRY COALITION FILED WRITTEN SUBMISSION TO ECJWRITTEN SUBMISSION TO ECJ

• SUBMISSION HAVE ALSO BEEN FILED SUBMISSION HAVE ALSO BEEN FILED BY EC, EU COUNCIL, EU PARLIAMENT BY EC, EU COUNCIL, EU PARLIAMENT AND A NUMBER OF EU MEMBERS, AND A NUMBER OF EU MEMBERS, SOME IN SUPPORT OF INDUSTRY AND SOME IN SUPPORT OF INDUSTRY AND OTHERS AGAINSTOTHERS AGAINST

• SEPTEMBER 25, 2007 - ORAL SEPTEMBER 25, 2007 - ORAL ARGUMENTS HEARD BY THE ECJARGUMENTS HEARD BY THE ECJ

AIR EMISSIONS - CARBAIR EMISSIONS - CARB

• JAN 1, 2007 – CARB REGS FOR AUX. JAN 1, 2007 – CARB REGS FOR AUX. ENGINES AND DIESEL ELECTRIC MAIN ENGINES AND DIESEL ELECTRIC MAIN ENGINES IN EFFECT WITHIN 24 MILES ENGINES IN EFFECT WITHIN 24 MILES OF CALIFORNIA OF CALIFORNIA

• PMSA GOES TO FEDERAL COURT PMSA GOES TO FEDERAL COURT SEEKING INJUNCTIVE RELIEFSEEKING INJUNCTIVE RELIEF

• LAWSUIT ADDRESSES LIMITED ISSUES LAWSUIT ADDRESSES LIMITED ISSUES - 24 MILE JURISDICTION- 24 MILE JURISDICTION- FAILURE TO REQUEST EPA APPROVAL- FAILURE TO REQUEST EPA APPROVAL

AIR EMISSIONS - CARBAIR EMISSIONS - CARB

• AUGUST 12 – DISTRICT COURT HEARINGAUGUST 12 – DISTRICT COURT HEARING

• AUGUST 30 – DISTRICT COURT RULING:AUGUST 30 – DISTRICT COURT RULING:

- ENJOINS CA FROM ENFORCING REGS - ENJOINS CA FROM ENFORCING REGS UNTIL APPROVAL RECEIVED FROM EPA UNTIL APPROVAL RECEIVED FROM EPA

- CARB REGS ARE NOT “IN USE” REGS, - CARB REGS ARE NOT “IN USE” REGS, THEY ARE “EMISSION STANDARDS” THEY ARE “EMISSION STANDARDS” UNDER CLEAN AIR ACT UNDER CLEAN AIR ACT

- UNNECESSARY TO RULE ON 24 MILES- UNNECESSARY TO RULE ON 24 MILES

AIR EMISSIONS - CARBAIR EMISSIONS - CARB

NEXT STEPS:NEXT STEPS:

CALIFORNIA HAS THREE OPTIONS:CALIFORNIA HAS THREE OPTIONS:

• APPEAL DISTRICT DECISION TO APPEAL DISTRICT DECISION TO CIRCUIT COURT OF APPEALSCIRCUIT COURT OF APPEALS

• SEEK EPA APPROVAL AS “EMISSION SEEK EPA APPROVAL AS “EMISSION STANDARD” (COULD TAKE 2-3 YEARS STANDARD” (COULD TAKE 2-3 YEARS TO GET APPROVAL)TO GET APPROVAL)

• ISSUE REGS AS “FUEL STANDARD”ISSUE REGS AS “FUEL STANDARD”

AIR EMISSIONS - CARBAIR EMISSIONS - CARB

• CARB CURRENTLY CONDUCTING CARB CURRENTLY CONDUCTING “WORKSHOPS” TO DEVELOP REGS TO “WORKSHOPS” TO DEVELOP REGS TO REDUCE AIR EMISSIONS FROM MAIN REDUCE AIR EMISSIONS FROM MAIN DIESEL ENGINESDIESEL ENGINES

• INDICATED THEY WOULD ISSUE INDICATED THEY WOULD ISSUE PROPOSED RULES BY END OF 2007PROPOSED RULES BY END OF 2007

• APRIL 2007 – CARB SENDS LETTER TO APRIL 2007 – CARB SENDS LETTER TO US EPA SUPPORTING US PROPOSAL US EPA SUPPORTING US PROPOSAL TO IMO ON REVISION OF ANNEX VITO IMO ON REVISION OF ANNEX VI

THANKTHANK

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