New Development

The Coast Guard and Marine Transportation Act of 2004 (Pub. L. 108-293) (the “Act”), signed into law on August 9, 2004, amended the Oil Pollution Act of 1990 (“OPA 90”) to require owners and operators of all nontank vessels of 400 gross tons or greater as measured under the International Tonnage Convention (“ITC”) to prepare and submit a nontank vessel response plan (“NTVRP”) to the Coast Guard by August 8, 2005.

The Coast Guard announced the availability of Navigation and Vessel Inspection Circular No. 01-05 (“NVIC 01-05”), dated February 4, 2005, in a Federal Register notice on February 16, 2005. NVIC 01-05 provides interim guidelines for the development and review of NTVRPs. See http://a257.g.akamaitech.net/7/ 257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-2945.pdf and http://www.uscg.mil/hq/g-m/ nvic/NVIC%2001-05.doc.pdf. As discussed in more detail below, there are significant issues raised with regard to the implementation date and application to vessels based on ITC tonnage standards.

The Law and NVIC 01-05

The Act amended OPA 90 to include nontank vessels under the existing vessel response planning regime that tank vessels and facilities are currently subject to under OPA 90. As amended, owners and operators of nontank vessels, defined as self-propelled vessels of 400 gross tons or greater, other than a tank vessel, that carry oil of any kind as fuel for main propulsion and that is either a vessel of the United States or a foreign vessel that operates on the navigable waters (i.e., generally within three miles of the shoreline) of the United States, must prepare and submit an NTVRP to the Coast Guard for approval by August 8, 2005. The Act, however, does not provide a specific date when the submitted NTVRP must be approved. This has caused some confusion because the Act also does not amend the existing requirement for vessels subject to OPA 90 response plan requirements to only operate under (1) an approved plan or (2) Coast Guard authorization to operate on an interim basis for two years until the Coast Guard approves the plan. The authorization to operate without an approved plan is contingent on the owner/operator certifying the availability of private personnel and equipment necessary to respond, to the maximum extent practicable, to a worst case discharge or a substantial threat of such a discharge.

Similar to existing requirements applicable to tank vessels under OPA 90, the Act requires that an NTVRP must: (1) be consistent with the requirements of the National Contingency Plan and Area Contingency Plans; (2) identify the qualified individual having full authority to implement removal actions and require immediate communication between appropriate individuals responsible for response actions; (3) identify and ensure by contract of other means the availability of private personnel and equipment necessary to remove, to the maximum extent practicable, a worst case discharge; (4) describe the training, equipment testing, periodic unannounced drills, and response actions by crewmembers; (5) be updated periodically; and (6) be resubmitted for approval of each significant change. Once plans are submitted, the Coast Guard is required promptly to review NTVRPs and approve any plan that meets the above requirements.

NVIC 01-05 indicates that due to the short statutory deadline for submittal of an NTVRP, the Coast Guard will authorize a nontank vessel to operate without an approved response plan for two years after the date of submission of the plan. The Coast Guard will grant this authorization after reviewing the plan (which make take up to 30 days to review and issue an authorization according to the NVIC) depending on the number of plans received as the deadline approaches to ensure the NTVRP adequately addresses the substantive requirements and the appropriate certifications required under OPA 90, as discussed above. According to the Coast Guard, absent an approved plan or an interim authorization, vessels will not be allowed to operate after August 8, 2005.

Analysis

• Effective Date of New Requirements: Even though the Act does not provide for an NTVRP approval date, the Coast Guard has taken the position that vessels may not operate after August 8, 2005 without an approved NTVRP or an authorization from the Coast Guard to operate without one. Although the Coast Guard should have discretion to delay the effective date for operating under approved plans, it has apparently taken this position because of the OPA 90 requirement that a nontank vessel must either have approval or authorization in order to operate, and that this requirement is triggered when the August 8 submission date occurs.

• Tonnage Limits: The Coast Guard has also taken the position that the ITC tonnage must be used to determine whether a vessel is subject to the 400 gross ton cutoff because of the reference in the Act to the use of ITC in determining tonnage. As a general rule, owners and operators of existing vessels built before July 19, 1994, may continue to rely on their regulatory tonnage for determining the application of various regulatory requirements. A vessel measured under the regulatory tonnage method will often measure less than that under the ITC tonnage method. Compounding this problem is the fact that many existing U.S.-flag vessels are not currently measured under, and are not required to be measured under, the ITC. As a result, application of ITC tonnage for NTVRP requirements will have a significant affect on a large number of existing vessels. We understand the Coast Guard is reviewing this issue but it may conclude that Congress mandated the use of ITC tonnage.

• Coast Guard Implementation: With regard to implementation of these new requirements, the Coast Guard issued NVIC 01-05 as temporary guidance in lieu of the normal formal rulemaking procedure due to time constraints related to the deadline for submitting an NTVRP. Although the guidance under NVIC 01-05 is not legally binding, the reality is that it would be prudent for owners and operators affected by this rulemaking to submit an NTVRP for review in advance of the submission deadline, to ensure operations are not adversely affected due to the broad enforcement powers and discretion the Coast Guard has to interpret these new requirements.

Conclusions and Recommendations

Absent the Coast Guard changing its position on this issue (or absent a formal and successful legal challenge), owners and operators of nontank vessels of 400 gross tons ITC or greater should take action to prepare and submit an NTVRP to the Coast Guard sufficiently in advance of the August 8, 2005 deadline to provide the Coast Guard adequate time to review and approve, or provide authorization to operate by the deadline, so vessel operations are not adversely affected. For owners and operators of nontank vessels that use their regulatory tonnage for purposes of determining compliance with regulatory requirements, we recommend you take appropriate action to let the Coast Guard and Congress know of your concerns with the application of the ITC measurement system to the new requirements and continue to monitor Coast Guard review of this issue to determine whether you should submit an NTVRP for review in a timely manner.