Finding a Way out of the Environmental Enforcement Wilderness

The shipping industry appears to be under siege on several environmental fronts. The US continues its MARPOL sting operations with eye-popping fines and court ordered environmental compliance plans. Europe and California are targeting ships as major sources of air pollutants. The emerging scientific and political consensus to drastically reduce greenhouse gases is leading to sweeping new pollution reduction targets in Europe. Major financial institutions are embracing standards that condition investments on greater corporate transparency, accountability, and environmental sustainability. Major manufacturing companies are adopting “reduce, reuse, recycle” practices, not just to the “products at the end of their life, but to the materials and methods that created them.” 2

The common thread here is that, on a global basis, regulators, capital markets, nongovernmental organizations (NGO’s) and important consumers of shipping services are in effect setting standards for sustainable environmental operations. This is not a coordinated effort, but it is advancing rapidly. Attaining the goals implied by these trends is not going to be simple. Ask any company that has been through a MARPOL enforcement case about how difficult it is to achieve what approaches a zero tolerance environmental management system for vessels. Vessel operations add practical complexity to the usual challenges of implementing effective environmental management systems – the assets are dispersed, mobile, and often operate in harsh conditions that tax equipment and personnel. Moreover, the sea-going crews are usually not in close proximity to management; they are often comprised of mixed nationalities, and regular rotations interrupt service continuity.

The shipping industry appears to be under siege on several environmental fronts. The US continues its MARPOL sting operations with eye-popping fines and court ordered environmental compliance plans. Europe and California are targeting ships as major sources of air pollutants. The emerging scientific and political consensus to drastically reduce greenhouse gases is leading to sweeping new pollution reduction targets in Europe. Major financial institutions are embracing standards that condition investments on greater corporate transparency, accountability, and environmental sustainability. Major manufacturing companies are adopting “reduce, reuse, recycle” practices, not just to the “products at the end of their life, but to the materials and methods that created them.” 2

The common thread here is that, on a global basis, regulators, capital markets, nongovernmental organizations (NGO’s) and important consumers of shipping services are in effect setting standards for sustainable environmental operations. This is not a coordinated effort, but it is advancing rapidly. Attaining the goals implied by these trends is not going to be simple. Ask any company that has been through a MARPOL enforcement case about how difficult it is to achieve what approaches a zero tolerance environmental management system for vessels. Vessel operations add practical complexity to the usual challenges of implementing effective environmental management systems – the assets are dispersed, mobile, and often operate in harsh conditions that tax equipment and personnel. Moreover, the sea-going crews are usually not in close proximity to management; they are often comprised of mixed nationalities, and regular rotations interrupt service continuity.

While these developments represent uncharted territory for the shipping industry, the best practices that are emerging from the US MARPOL enforcement cases embrace the elements of corporate accountability, continuous improvement of performance, best engineering practices, and waste minimization/source reduction goals that lie at the heart of all these public and private sector developments. The best practices defined in the MARPOL plea agreements are not only benchmarks for enforcement risk reduction, but they also may help companies anticipate the shifting environmental values in capital markets and among customers.

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