American Shippers Claim Canadian Ballast Water Rules Are Unfair

The Federal Maritime Commission (FMC) has launched an investigation into whether pending Canadian regulations on ballast water management for ships in the U.S.-Canada Great Lakes trade constitute unfair trade practices. The probe will determine if these rules disproportionately impact U.S.-flagged vessels.

U.S. companies operating within the Great Lakes trade have expressed concerns that the new regulations impose a heavy burden on their operations, creating an unfair advantage for their Canadian counterparts. Title 46, Chapter 423 of the U.S. Code empowers the Commission to scrutinize foreign laws and practices that may adversely affect U.S. carriers in ocean-borne trade.

Ballast water management involves the processes and methods used to control and treat the water taken into and discharged from a ship's ballast tanks. This water is essential for maintaining vessel stability and structural integrity during voyages.

The new regulations aim to stop invasive species and protect biodiversity in Canadian waters. They do this by switching from mid-ocean ballast water exchange to new systems that clean ballast water before it is released. Canada seeks regulatory compatibility with the U.S., requiring U.S. ships to follow the same rules when operating in Canadian waters, except for those merely passing through.

The FMC has found sufficient evidence related to the Canadian ballast water regulations to proceed with a Foreign Shipping Practices investigation. The investigation, led by the Commission’s General Counsel, will result in a report containing findings and recommendations within 120 days, barring any extensions.

The Commission is actively seeking public comments on the investigation and has opened a submission portal for comments until June 21, 2024. If the investigation concludes that there has been a violation of the Foreign Shipping Practices provisions, sanctions may be imposed on Canadian-flagged vessels, including limitations on calling at U.S. ports and significant fees.

This investigation is part of the FMC’s ongoing scrutiny of Canadian government policies and regulations affecting U.S.-flagged Great Lakes operators. The Lake Carriers’ Association, representing U.S.-flagged operators in the Great Lakes, originally brought this issue to the FMC’s attention in March 2020. As a result, the FMC began an Investigation of Regulations Affecting Shipping in Foreign Trade under its authority from 46 U.S.C. Chapter 421.

Today’s announcement continues the FMC’s examination of Canadian policies impacting the U.S. Great Lakes operators. The outcome of this investigation could have significant implications for the future of U.S.-Canada maritime trade relations.

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