LEGISLATIVE & REGULATORY
UPDATE
(Published October 2003)
The following summary highlights some of the more significant changes in federal and state law:
Coast Guard Proposes Mandatory Ballast Water Management Program
Recognizing
that voluntary ballast water management ("BWM") programs have not
sufficiently addressed the threat nonindigenous invasive species ("NIS")
pose to the nation’s marine and freshwater resources, the Coast Guard
is proposing a mandatory BWM program. The proposal has the support of the Secretary
of Department of Homeland Security, who has assumed all duties associated with
the BWM program formerly bestowed on the Secretary of Transportation.
The Ballast Water Management Act was reported on in detail in the June 2000 issue of Cruise & Carrier Legal Update. The proposed rule would revise 33 CFR part 151 to require all vessels equipped with ballast water tanks entering U.S. waters after operating beyond the U.S. Exclusive Economic Zone ("EEZ") to employ at least one of four ballast water management practices:
- A ballast water exchange in an area no less than 200 nautical miles from shore;
- Retention aboard the vessel;
- An unspecified "Coast Guard approved" treatment method;
- Discharge into an approved retention facility.
Ballast water exchange is likely to be the most used practice for the simple reason that vessels engaged in international trade are unlikely to retain ballast water because they would not be able to unload their cargo, because alternative environmentally sound methods of ballast water treatment are still being developed and of limited availability, and because the number of on- shore reception sites is limited and none have been approved for removal of NIS.
Recognizing the infeasibility of requiring vessels to deviate from course and travel 200 nautical miles into the ocean to conduct mid-ocean exchanges, the Coast Guard permits an exception under which vessels would not be prohibited from discharging ballast water in areas other than the Great Lakes and Hudson River. Such vessels must make an exchange en route. An entry must then be made in ballast water records supporting the reasons why the vessel was unable to comply with regulatory requirements. Such records must be made available for inspection upon request. Failure to comply with record keeping requirements can lead to penalties.
Because there is no consensus on water-depth criterion for mid-ocean exchange, the proposed rule removes the requirement that an exchange take place in waters more than 2,000 meters deep.
The International Maritime Organization ("IMO") has issued guidelines on the content of BWM plans in IMO Resolution A. 868 (20) Annex 1, Chapter 7. The resolution is available on the IMO’s Global Ballast Water Management Program website (http://globallast.imo.org).
Congress Introduces Bills to Fund and Enhance Port Security
Responding
to heightened international security concerns following the September 11 terrorist
attacks, the United States Congress has introduced bills directing the Secretary
of the Department of Homeland Security to enact and enforce regulations to
reduce the significant risks posed by international container shipping traffic.
In the United States Senate, Senator Barbara Boxer (D- California) introduced S. 1147, also known as the "High Tech Port Security Act of 2003." This bill calls for federal standards for explosion-resistant sea containers. Among other things, the bill authorizes the Secretary to prescribe regulations establishing standards for the certification of blast resistant containers; establishing the procedure by which interested parties may apply for such certification; and requiring that no vessel carrying one or more regulated containers and seeking to enter the United States shall be allowed entry unless all such containers are certified blast-resistant containers pursuant to established standards and procedures. The bill authorizes $100 million for screening of all containers before they leave a port, as well as the establishment of command and control centers at the twenty largest United States ports. Such procedures are directed to be implemented at all other United States ports as soon as practicable.
In the House of Representatives, the Port Security Improvement Act of 2003 (H.R. 2193) was introduced by representatives Doug Ose, R-California, and John Tierney, D-Massachusetts. This bipartisan bill would allocate some $3.3 billion in customs revenue to the Department of Homeland Security. Each port would receive funds in proportion to the amount of duties it collects. The government presently disburses security grants to ports on a competitive basis, with allocated amounts covering only a small portion of what the ports need. Representative Ose noted that the Port of Los Angeles collected 32% of all customs duties in 2002, yet received only a small fraction of what it needs for port security measures.
In 2002 the Transportation Security Administration (TSA) and Maritime Administration disbursed just $93 million in port security grants to cover $700 million in applications. The TSA has proposed to divert port security grants and Operation Safe Commerce Funds in the fiscal 2003 budget to pay for cost overruns in aviation security.
The Ose-Tierney bill also sets as one-year deadline for implementation of the Transportation Workers Identification Credential (TWIC) and, like the High Tech Port Security Act of 2003, calls for standardization of security requirements for ports.
Terror Threats Spawn New Identity Regime for Seafarers
Citing the increased threats of terrorism and the vulnerability of international trade and transportation, the 176-member state International Labour Organization ("ILO") has proposed rigorous new security measures for seafarers. The ILO discussions come on the heels of the U.S. Congress’ enactment of the Maritime Transportation Security Act of 2002, itself a response to the September 11 terrorist attacks. Both measures are designed to enhance the security of maritime commerce and seafarers while attempting to strike a balance with the rights, freedoms, and privacy interests of the world’s 1.2 million maritime workers. To date there are no uniform mandatory international specifications for seafarer identity documents. The ILO draft convention would allow such specifications to be adopted. A majority of ILO member states prefer the use of biometric data, such as fingerprint, face, hand, or iris data, whereas some ILO members and seafarers unions raise human rights concerns. All groups prefer to keep costs down and advocate standardized issuance and readability protocols. A model program is expected to be in place as early as June 2004.
New California Laws Restrict Cruise Ship Dumping
California
Governor Gray Davis recently signed two bills which limit the discharge of
sewage, wastewater and hazardous waste by cruise ships into state waters and
marine sanctuaries. Assembly Bill 121 prohibits cruise ships from discharging
raw or treated sewage, sewage sludge, oily bilge and ballast water, into state
waters within three miles from shore, and within national marine sanctuaries
entirely. A similar bill, Assembly Bill 906, prohibits cruise ships from dumping
hazardous wastes, such as dry cleaning and photography lab chemicals and medical
wastes into state waters and marine sanctuaries. Both bills call for penalties
of up to $25,000 for each violation.
The cruise lines lobbied against the bills in their original forms, arguing their ships already abide by voluntary industry environmental standards. Environmental groups claimed the cruise industry has an "abysmal" compliance record and hailed the bills. Environmental groups sought, but did not achieve, a ban on dumping of "grey water" (waste water from sinks, showers and galleys).
ICCL president Michael Crye said the industry offered to ban the dumping of black and grey water, but negotiations broke down over the effectiveness of advanced treatment methods used on some ships.
New Gift Certificate Law Affects California Vendors
Recent
retail trends indicate consumers are overwhelmingly buying gift certificates
for everything including dinner cruises, ferry rides, harbor excursions, weekend
cruise jet ski rentals and the like. All combined, such consumers nationwide
are expected to spend $36 to $38 billion on gift certificates this year. For
those selling such gift certificates in California, another change in the law
may come as no surprise. But, if gone unnoticed, legions of plaintiffs and
their lawyers may be standing by ready to file suit for failure to comply with
California’s new restriction regarding gift certificate sales.
As many retailers already know, California Civil Code §1749.5 prohibits gift certificates from being sold in California with an expiration date. In addition, California’s existing law specifies that any gift certificate sold after January 1, 1997 shall be redeemable in cash for its cash value, or is subject to replacement by the seller with a new gift certificate at no cost to the consumer. New Hampshire, Hawaii, Massachusetts and Rhode Island also have laws limiting the use of expiration dates on gift certificates.
Recently, a California Court of Appeal addressed the issue of whether Wal-Mart could charge customers a monthly service fee if they do not use their shopping cards within 24 months. In that case, plaintiff alleged the fee was unlawful under California’s Unfair Competition Law. Wal-Mart moved for summary judgment on the ground the sale of Wal-Mart "shopping cards" does not violate §1749.5. The trial court agreed. On appeal, the California appellate court found Wal-Mart’s practice did not constitute setting a predetermined expiration date at which time the card loses its entire value, which is what is prohibited by §1749.5. The Court of Appeal also noted, the California Legislature had enacted as of July 24, 2003, Assembly Bill No. 1092, which amends §1749.5, adds §1749.45, and amends Code of Civil Procedure §1520.5, relating to gift cards containing service fees. Under the new law, §1749.45 defines "gift certificate" to include gift cards, but excludes gift cards usable with multiple vendors, provided the expiration date, if any, is printed on the card. This exemption does not apply to gift cards usable only with affiliated sellers of goods or services. The new law takes effect on/before January 1, 2004.
Gift certificate vendors include the maritime industry should review the new statutes in their entirety and review any gift certificates to ensure compliance with the new requirements. Otherwise, they may unwittingly be giving the plaintiffs’ bar a basis to bring yet another unfair competition suit, seeking restitution and injunction along with their fees.
