washington insider
Written by Larry Kiern, Winston & Strawn LLP
WashingtonInsider
N o vem b er / D E C E M B E R 2 0 1 0
Congress Passes Maritime Legislation Despite Gridlock
12
Notwithstanding the partisan gridlock that gripped Washington policymakers on most subjects in advance of the midterm elections, Congress enacted into law a number of maritime provisions that had been in the works for much of the 111th Congress. The principal legislative vehicle for this accomplishment was the Coast Guard Authorization Act of 2010 (CGAA). Congress completed its protracted deliberations on the measure on September 28 and sent it to President Obama just before recessing. The President signed the legislation into law on October 15. The measure marks the first Coast Guard authorization bill enacted into law since 2006, and its passage flowed from recognition of the Coast Guard’s successful performance responding to the Deepwater Horizon incident.
THE MARITIME EXECUTIVE
Coast Guard Authorization Addresses Key Agency Priorities
The CGAA enacts into law reorganization provisions referred to as “modernization” that had been the service’s top legislative priority for most of the previous four years. It authorizes up to four positions of Vice Admiral, elevates the Vice Commandant to the rank of Admiral (it previously was a three-star, Vice Admiral position), and allows the service to replace existing Pacific and Atlantic Area Commanders with Vice Admirals who will have different functional responsibilities. According to previous agency statements, modernization would allow it to more closely mirror the other military services, facilitating coordination. Retired Commandant Thad Allen sought to reorganize the Atlantic and Pacific Area Commands into a single Operations Command at Portsmouth, Va. and a Readiness Command in Alameda, Calif., where the Atlantic and Pacific Commands are now located. He also sought to establish two Deputy Commandant positions -- one for operations and one for support -- to integrate acquisition, logistics and maintenance functions. In proposing the reorganization, Admiral Allen argued that the Coast Guard “must have command-and-control and mission support structures that optimize mission execution.”
However, no sooner had the legislation been signed into law than the new Commandant, Admiral Bob Papp, announced that he was retaining the separate operational Atlantic and Pacific Area Commanders which Allen had proposed eliminating. Citing the need to “steady the service,” Admiral Papp pledged to finish the service’s organizational realignment process already underway by putting his own imprint on the final product. He issued a statement to the service in which he said that “solidifying the post-modernization chain of command will enhance your ability to get your job done and keep your focus on safely and effectively executing Coast Guard missions.” Admiral Papp has made no secret of his concerns about the service being overextended and underfunded in recent years. No doubt as the process of seeking approval for the service’s FY 2012 budget request proceeds through Congress, Admiral Papp must be very sensitive to the approaching period of austerity about to confront federal discretionary spending. The enactment into law of the reorganization authority should allow the service to complete a process that had been in doubt and should help it weather the approaching budgetary storm better than it otherwise would. The harsh reality is that the Coast Guard, and other domestic discretionary programs, likely face budget constraints akin to the 1990s when it was cut 12 percent and lost 4,000 personnel. Although the CGAA authorizes $10.2 billion for FY 2011 for the Coast Guard and increases the authorized end-strength of military personnel by 1,500 members to 47,000, the appropriations bills currently pending before Congress provide less funding. Senate appropriators approved only $9 billion for the Coast Guard in July. And if Congress fails to enact into law a Department of Homeland Security appropriations bill during the lame duck session, then the service will have to operate under a continuing resolution that will reduce its spending to last year’s level. As history teaches, this will mean cuts in the number of Coast Guard personnel, station closures, decommissioning of cutters and aircraft, and cuts in the acquisition of new vessels, aircraft and equipment. In the face of such fiscal challenges, it is good to have reorganization finally resolved.
Maritime College The STaTe UniverSiTy of new york
Professional Education and Training Department • Classroom, online, or customized training. • U.S. Coast Guard approved courses. For more information please call: 718-409-7341 Online: www.sunymaritime.edu/academics/continuing education/index.aspx Visit Us: SUNY Maritime College / 6 Pennyfield Avenue, Throggs Neck, NY 10465
Coast Guard Authorization Act of 2010 shows that progress is possible although budgetary issues remain.
washington insider MANAGING RISK
New Maritime Provisions
Learn about our knowledge and experience using LNG as a fuel for green shipping
N o vem b er / D E C E M B E R 2 0 1 0
13
Photo Courtesy of RollsRoyce
LNG fueled workboat
Find out about our OSV Resource Center in Houston Visit us at booth 1810 The International WorkBoat Show, December 1-3, 2010, New Orleans DNV 1400 Ravello Drive Katy, TX 77449 Tel: 281 396 1000 www.dnv.com
THE MARITIME EXECUTIVE
The new law features over 150 sections, many of which contain provisions of interest to the maritime industry. These include diverse provisions about piracy; the marine safety program; pollution prevention; and fishing, commercial vessel and port safety and security. The provisions are far too numerous and complex to be addressed in detail here, but the following overview highlights key elements of interest. »» Exoneration From Liability for Self-Defense From Piracy The CGAA includes an important exoneration from liability to protect shipowners, operators and seafarers from lawsuits arising from actions taken to combat piracy. This provision does not resolve all the issues surrounding this subject that arose in the wake of the April 2009 attack by Somali pirates on the U.S.-flag vessels Maersk Alabama and Liberty Sun. However, it bolsters the right of self-defense enjoyed by American seafarers by clarifying that shipowners cannot be sued by pirates or their survivors in the U.S. if they act in accordance with standards prescribed by the Secretary of Homeland Security. »» Marine Safety Program Reform A major area of congressional attention during the 111th Congress was concern about the performance of the Coast Guard’s marine safety program and problems with maritime industry relations, which House Transportation Committee Chairman Jim Oberstar (D-MN) argued had suffered badly, especially after the service prioritized port security post-9/11. Key aspects of his proposal were enacted into law. For example, for the first time in the service’s history the Commandant must appoint an “ombudsman” in each Coast Guard district to serve as “liaison between ports, terminal operators, shipowners, labor representatives, and the Coast Guard.” The ombudsman is responsible for improving communications, resolving disputes and investigating complaints. This provision provides the maritime industry a formal institutionalized mechanism to address its complaints. It remains to be seen if it will amount to much in practice, however, as the regulated community will surely remain reluctant to anger its regulator directly. The reform measures institutionalize provisions to improve marine safety expertise. The law mandates career tracks, minimum qualifications for marine safety personnel, development of a long-term strategy for improving vessel safety, reports to Congress on efforts to recruit and retain civilian marine inspectors and investigators, and establishment of centers of expertise for marine safety. »» Pollution Prevention Reform Senator Maria Cantwell (D-WA), who serves as the Chair of the Senate subcommittee of the Commerce Committee with authorizing jurisdiction over the Coast Guard, pursued oil pollution prevention legislation for years, and the CGAA realizes some of her goals and adopts others. It provides a mandate for double-hull-equivalent protection for vessel bunker tanks to avoid oil spills like the Cosco Busan incident in San Francisco. It mandates that the Coast Guard pursue efforts to reduce oil spills during oil transfers involving tank vessels and address the reasons for human error as the leading cause of oil spills. The CGAA also includes audit and reporting provisions about how the funds from the Oil Spill Liability Trust Fund are being spent and which responsible parties are not paying for oil discharges. The law further includes an amendment to the liability provisions of the Oil Pollution Act of 1990 (OPA 90) that for the first time extends OPA 90 liability to cargo owners. The provision amends the OPA 90 definition of the term “responsible party” to include “in the case of a vessel . . . the owner of oil being transported in a tank vessel with a single hull after December 31, 2010.” The provision excepts until 2015 certain vessels unloading oil in bulk at a deepwater port or offloading in lightering activities within an established lightering zone more than 60 miles offshore. As a practical matter, the use of single-hull tank vessels in the U.S. is unusual. However, this provision represents a significant change in the political compromise that was struck in OPA 90, which did not include cargo owner liability. The law also amended OPA 90’s financial responsibility provision by expanding its reach to
N o vem b er / D E C E M B E R 2 0 1 0
washington insider
THE MARITIME EXECUTIVE
14
include “any tank vessel over 100 gross tons using any place subject to the jurisdiction of the United States.” Previously this provision had only applied to vessels over 300 gross tons. The CGAA provides the U.S. enabling legislation for the international convention on anti-fouling systems for ships. This includes establishing penalties for violations to be enforced by the Coast Guard and the EPA. It also requires the Coast Guard and the EPA to study and report to Congress on new technologies for reducing air emissions from cruise and cargo vessels. This sets the stage for future greenhouse gas regulation in U.S. ports. »» Fishing and Commercial Vessel Safety and Security Following up on the 2009 National Transportation Safety Board (NTSB) report on the sinking of the Alaska Ranger, the CGAA enacts real fishing vessel safety reform. It provides safety equipment and construction standards for uninspected commercial fishing vessels operating beyond three nautical miles of the coast of the U.S. It requires fishing vessels of certain sizes and those that undergo substantial changes to comply with load line regulations, and it mandates periodic vessel examinations by the Coast Guard. While progress in this area has been painfully slow, these measures should save lives. Other commercial safety provisions include a study to ensure safe and secure shipping in the Arctic; a requirement that inspected vessels maintain official logbooks and log the service hours of seamen, their injuries, and their illnesses; and
a requirement that regulations governing “safety management systems” on certain passenger vessels, including ferries, consider their particular operations. The CGAA institutionalizes the America’s Waterway Watch Program to promote voluntary reporting of activities that may indicate a threat or an act of terrorism and requires the Secretary of Homeland Security to establish Coast Guard-deployable response teams to protect vessels, port facilities, and cargo.
The Road Ahead
After working for two years on this legislation, Congress demonstrated that it is possible to legislate modest and uncontroversial measures for the maritime industry. The CGAA enacts many new provisions that will require the Coast Guard to study, report, and promulgate new regulations. How it will accomplish these new tasks while sustaining significant budget cuts remains to be seen. Mar Ex
Larry Kiern is a partner at Winston & Strawn LLP, an international law firm of 900 lawyers. His practice concentrates on maritime issues, including legislative, regulatory, and litigation matters. Before joining Winston & Strawn, he was a Captain and law specialist in the U.S. Coast Guard who served as the Legislative Counsel and Deputy Chief of the Coast Guard’s Congressional Affairs Office.
