EPA is crafting guidance to advise ship owners on how to comply with its rules governing polychlorinated biphenyls (PCBs) before exporting ships for scrapping but the guide may not quell concerns that a 2011 Maritime Administration (MARAD) policy allowing owners to self-certify removal of PCBs circumvents EPA's toxics law authority.
Critics say the agency is effectively ceding to MARAD its authority over the Toxic Substances Control Act (TSCA) by condoning the self-certification policy, which they argue allows exporters of formerly U.S.-flagged ships to escape PCB disposal requirements that domestic ship-scrappers must abide by.
"EPA is trying to not take responsibility for something Congress gave them responsibility for," says one environmentalist.
PCBs are persistent, bioaccumulative and toxic pollutants that were used as insulators and as coolants and lubricants, according to EPA. Their manufacturing in the United States was banned in 1977.
EPA has formally recognized that PCBs are likely found on vessels used before 1979. The agency's regulations, crafted under TSCA, generally ban the export for disposal of PCBs at concentrations greater than 50 parts per million (ppm), while imports are prohibited, according to EPA.
Agency policy generally requires scrappers to take one of two options when removing PCBs from a vessel--either remove all known sources or classes of PCBs or undertake specific sampling to determine if PCBs at concentrations regulated for disposal are present, and have any removed.
But domestic law requires MARAD to approve of re-flagging U.S. ships more than 1,000 gross tons to foreign registries. This occurs prior to a company moving the vessel overseas for scrapping.
Under a 2009 informal agreement between EPA and MARAD, the Maritime Administration agreed not to approve transfers of U.S.-flagged ships weighing more than 1,000 gross tons to foreign registries for scrapping purposes until it received a "no objection" letter from EPA. Relevant documents are available on InsideEPA.com. (Doc ID: 2393364)
But last summer, MARAD revised its approval process. Under the clarification, MARAD said that its transfer approval process will now "require vessel owners to self-certify that the vessel(s) does not contain [PCBs] in regulated quantities, and to provide notice to [EPA] of the transfer request."
The clarification gives EPA 30 days notice to respond to a transfer before MARAD can approve it, and presumes EPA approval if the agency does not respond in time. Since MARAD's policy was issued, EPA says it has not commented on any of the ship transfers using the self-certification process.
In comments to MARAD, domestic scrappers and environmentalists blasted the MARAD clarification for effectively usurping TSCA authority from EPA and setting weak standards for ship owners wishing to scrap overseas in developing countries, where environmental standards are lacking.
These ships often end up in India and China, where there is a lack of safety and environmental regulations, according to a domestic scrapper.
An EPA spokeswoman says the agency has not delegated its authority to MARAD. EPA says that "it is the responsibility of the ship owner to ensure compliance with TSCA. EPA can inspect ships destined for export to ensure that they comply with TSCA and if violations are found [it can] take appropriate enforcement actions."
The agency generally supports MARAD's self-certification policy, which provides the agency with no defined role, but the spokeswoman says that officials are "developing guidance to assist ship owners in identifying regulated PCBs on ships prior to export so that the regulated levels of PCBs can be removed before export."
EPA plans to publish the draft guide in the Federal Register for public comment by early summer, she says.
But environmentalists and domestic scrappers are cool to the upcoming guidance as it is not expected to dislodge the controversial MARAD policy, merely provide additional assistance to sellers in identifying PCBs when they self-certify that their ships are free of PCBs in excess of 50 ppm.
The critics are continuing to question EPA's hands-off approach. The environmentalist, upon hearing of EPA's upcoming guidance, was "happy to hear" the agency is developing guidelines, but this source stressed EPA does have a role in the MARAD process -- to administer TSCA.
Until the guidance comes out, the source says it is hard to comment on whether it will be acceptable and whether EPA will take responsibility for TSCA or if it will continue to have ship owners self-certify.
And one domestic scrapper is critical of EPA's promise of new guidance, pointing out that EPA already has guidance that domestic ship scrappers follow for regulatory compliance with TSCA and sampling PCBs. The source notes that such requirements for characterizing ships should be applied in the same way to owners wishing to send ships overseas for scrapping.
This source adds it is still problematic for MARAD to oversee policy on this, as TSCA assigns authority over its administering to EPA.
Continuing this self-certification policy is allowing these ship owners to violate the law and creates a competitive disadvantage between domestic companies onshore who have to follow TSCA and ship owners of formerly U.S.-flagged ships who are being allowed to blatantly violate TSCA, the source says.
The source argues this leads to economic repercussions in the United States as well, negatively impacting the domestic steel industry and metal exports market, and contributing to a significant amount of "metal dumping" of inferior metal back onto the U.S. market by India and China.
When MARAD's policy was issued last June, domestic scrappers and the Basel Action Network (BAN), an environmental group, laid out their arguments opposing the initiative.
Esco Marine, a ship recycler in Brownsville, TX, expressed "strong concerns" about the self-certification policy, noting for instance that the 30-day notice requirement to EPA does not appear to be working in concert with the agency, "but rather dictating to them. It appears to be a complete circumvention of EPA's authority to enforce TSCA."
Further, Esco says a ship owner -- who would likely be doing the self-certification -- does not necessarily qualify as someone with knowledge of environmental laws or the existence of PCBs within a vessel. "Without testing documentation, it is impossible to know whether or not a vessel contains PCBs of 50 ppm or less," it says.
Southern Recycling, a metal recycler based along the Gulf Coast, also submitted comments, charging that under the policy MARAD was seeking to usurp EPA's authorities under TSCA "without obvious devolution of that authority by the Administrator of EPA."
Southern Recycling also argues that MARAD's 30-day notice-to-EPA process fails to comply with TSCA. "Therefore, it is clear this rulemaking by MARAD seeks only to justify their continuing refusal to equitably hold industry to common environmental standards -- i.e. the PCB rules in [TSCA]."
"Ship owners seeking to evade U.S. environmental and safety laws should not be given a lower bar than domestic ship recyclers seeking to comply with U.S. environmental and safety laws," Southern Recycling says.
It cites EPA's existing guide, released in 2000, for ship scrappers that calls on recyclers "to assess, sample, and manage PCB's in vessels to demonstrate compliance with TSCA. It is not self-certification, nor does TSCA at any point cite self-certification as a valid methodology for demonstrating proper handling of PCBs," Southern Recycling says.
The domestic scrapper source says under these policies, domestic scrappers have to develop a sampling plan and pass it onto EPA regions for sign-off. If EPA does not agree with sampling data, it could fine or force compliance, the source says.
BAN has also taken issue with the MARAD policy, claiming it was instituted to address MARAD's growing backlog of vessel transfer requests under EPA's review. But BAN says under MARAD's 2011 policy, MARAD has no assurances that EPA even considers the vessel transfer request within the 30-day notification period. "A policy whereby a no response from the enforcement agency equates to compliance is insufficient and will surely falter," BAN says.
BAN cites as an example a U.S.-flagged cargo vessel cleared by MARAD June 1 for scrapping in Bangladesh. EPA effectively consented, it says. Later, BAN found evidence that the vessel could contain PCBs, but only sampling could verify a presence of PCBs, BAN says. The self-certification letter from the shipbuilder made its claim that it was PCB-free based on the fact that Japan banned PCB use in shipbuilding in 1974, and the ship was constructed in Japan in 1976. But limited regulations under Japanese chemical control law at the time mean "there is high probability that the vessel was built with toxic components," including PCBs, BAN argues in a separate document. -- Suzanne Yohannan