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Monday, April 23, 2018

WASHINGTON STATE COMPLIANCE PROGRAM FURTHER GUIDANCE FROM INTERTANKO’s LEGAL ADVISERS

INTERTANKO’s US legal counsel, Mr. Jonathan Benner of Eckert Seaman’s has provided the following advisory regarding the Washington State Voluntary Compliance Programme for tankers:

The Office of Marine Safety (OMS) of the State of Washington’s Department of Ecology has announced a new Voluntary Compliance Program for tank vessels.  Under this program, tank vessel owners and operators are being invited to voluntarily comply with the previously mandatory Best Achievable Program (BAP) standards that were struck down by the Supreme Court in Intertanko v. Locke.  In order to participate in the program, vessel owners and operators will be required to keep on file with the OMS a BAP oil spill prevention plan or International Safety Management Code System manuals.  In addition, the vessel owner or operator will be required to open their vessels to inspection by the OMS. 

As an incentive to encourage participation in the Voluntary Compliance Program, OMS will list the vessel owner or operator on the OMS website, a venue the State claims is viewed by a “diverse array of people and organizations including oil shippers, vetters and charterers.”  In addition, the BAP list will be published in the Department of Ecology’s newsletter and periodically submitted to major international maritime publications.  Vessel owners and operators who make the “extra effort for marine safety and environmental protection” are eligible for the Exceptional Compliance Program (ECOPRO).  ECOPRO companies will receive recognition including a “special award presented at a public ceremony.”

Our views on this programme were accurately expressed in INTERTANKO’s weekly bulletin of 28 July 2000.  This document should be understood to be a supplement to and read in conjunction with INTERTANKO’s earlier article.  We view the State’s efforts to continue an unlawful regulatory regime under a “voluntary” standard as objectionable and potentially harmful to the advances in marine safety as well as the interests of vessel owners.  There is no type of governmental regulatory regime more difficult to apply to industrial operations than a “voluntary” regime imposed by agencies that lack jurisdiction.  Once compliance is volunteered, a number of questions arise as to the consequences of non-compliance and the relationship of the “voluntary” standards to mandatory requirements imposed by federal agencies. 

We thus advise caution by responsible vessel owners and operators for the following reasons.  First, it is apparent that the OMS intends to continue its current regulatory regime even in the face of the Intertanko decision.   We expect that the OMS will attempt to re-issue its BAP standards using alternative legal justifications to those used when promulgating the original BAP standards.  Having vessel owners and operators voluntarily comply with the BAP standards will be used as a “bridge” between the old and potentially new standards, and also will be used as justification for issuance of new regulations.

Second, by voluntarily providing the state government with a company’s operating procedures and history, internal audits and reports, the vessel owner and operator expose themselves and their attorneys to potential litigation difficulties.  Concerns about government and private misuse of the ISM Code documentation already exist, but at least there are some legal protections available under that programme.  Under the voluntary scheme proposed by the State of Washington, vessel owners and operators will have little or no protection because they are voluntarily opening their operations to state review and inspection.  These state inspectors also will maintain their own records that will be available for public review under applicable state Freedom of Information laws.  There have been several cases in the United States in which companies voluntarily disclosed information to the government that indicated lack of compliance with safety and environmental protection laws.  As a result, the company was subject to civil and/or criminal fines even though their disclosure was not mandatory.  In addition, private parties also have used this information to pursue separate litigation.

Another concern is increased exposure to liability or, at a minimum, areas of contentious litigation that might not otherwise exist absent voluntary participation.  One of the main arguments against the BAP standards was that, by implementing their own requirements, the State of Washington was forcing vessel owners and operators to comply with unique requirements that either were, or may become obsolete given developments in federal and international law.  A review of the BAP standards struck down in the INTERTANKO case indicates that various requirements are already out of step with the new international requirements such as the 1995 STCW Amendments and the ISM Code.

If an accident were to occur and the vessel were complying with the BAP standards instead of the current federal or international requirements, or viceversa, the vessel would be subject to an additional avenue of attack for liability purposes.  In addition, if a BAP standard exists that has no identical federal or international companion, e.g., universal pre-employment drug testing, and the vessel were found not to have complied with that standard after it had agreed to comply, the vessel owner would be exposed to an additional theory of wrongdoing.

A final point is protection of trade secrets and practices.  OMS expects vessel owners and operators to file current company operating and personnel programs.  Some of these programs may contain information that the vessel owner or operator wants to protect as confidential.  Once the information is voluntarily disclosed to OMS, it is difficult to protect.  More importantly, most laws protecting trade secrets from disclosure by government employees appear to be limited to information that is legally required to be disclosed to the government.  Voluntary disclosure of confidential information to the OMS could very likely result in a waiver of the confidentiality of the information and render it unprotected.

These concerns are provided for vessel owners and operators in order that they may make informed decisions regarding participating in the OMS Voluntary Compliance Program.  It is our view that participation in this program exposes owners and on-board personnel to problems that more than offset the doubtful advantages of a “special award presented at a public ceremony” or recognition on the State’s website.

For more information, please contact LegalandDocumentary@intertanko.com