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Amendments to the Canada Shipping Act, 2001 and Marine Liability Act

by Joanna Dawson, McMillan LLP

On December 13, 2018, Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, otherwise known as the Budget Implementation Act was given royal assent.  This Bill, which was first introduced on October 29, 2018, predominantly pertains to amendments of budget-related legislation, but also proposes significant amendments to both the Canada Shipping Act, 2001(“CSA”) and the Marine Liability Act (“MLA”). The amendments to the CSA were introduced to allow the federal government to regulate for environmental reasons and specifically “to deliver on commitments made under the Oceans Protection Plan to enable the Government to respond to marine pollution incidents faster and more effectively, and to better protect marine ecosystems and habitats”. The amendments provide significant new powers and authority that potentially change the marine safety and environmental protection framework in Canada.

Canada Shipping Act, 2001

With a focus on marine environmental protection, environmental response, enhanced enforcement and support for marine research, the amendments to the CSA include the following:

  • The amended Section 10(1)(c) sets out that the Minister of Transport or the Minister of Fisheries and Oceans may enter into agreements or arrangements respecting the administration or enforcement of any provision of this Act or the regulations and authorize any person or organization – including a provincial government, local authority, council or other entity authorized to act on behalf of an Indigenous group – with whom or which an agreement or arrangement is entered into to exercise the powers or perform the duties and functions under this Act that are specified in the agreement or arrangement.
  • The new Section 10(2.1) provides that the Minister of Transport may exempt any person or vessel or class of persons or vessels from any provisions of the CSA or the regulations if the exemption would allow the undertaking of research and development to enhance marine safety or environmental protection.
  • The new Section 10.1 provides that the Minister of Transport may make an interim order if he or she believes that immediate action is required to deal with a direct or indirect risk to marine safety or to the marine environment. Such interim order has effect from the time that it is made and remains in effect for a period one year, or any shorter period that may be specified in the interim order.  However, the interim order may be extended by the Governor in Council for a period of no more than two years after the end of the applicable period.
  • The new Section 35.1 provides that the Governor in Council may, on the recommendation of the Minister of Transport, make regulations respecting the protection of the marine environment from the impacts of navigation and shipping activities, including regulations with respect to, among other things:
    • design, construction, manufacture and maintenance of vessels or classes of vessels and inspections and testing thereof;
    • specifying the machinery, equipment and supplies that are required or prohibited on board vessels or classes of vessels;
    • design, construction, manufacture, maintenance, storage, inspection, testing, approval, arrangement and use of the machinery, equipment and supplies of vessels or classes of vessels;
    • regulating or prohibiting the operation, navigation, anchoring, mooring or berthing of vessels or classes of vessels; and
    • regulating or prohibiting the loading or unloading of a vessel or a class of vessels.
  • New penalties for non-compliance by the amendment in Section 40.1 which provides for a fine of not more than $1,000,000 or to imprisonment for a term of not more than 18 months, or both.
  • The amendments to Sections 168.3, 175(2) and 180(1) allow the Minister or the Minister of Fisheries and Oceans who believes on reasonable grounds that a vessel or an oil handling facility has discharged, is discharging or may discharge a pollutant, to take measures that he or she considers necessary to repair, remedy, minimize or prevent pollution damage from the vessel or oil handling facility.

Marine Liability Act

With a focus on “modernizing Canada’s Ship-Source Oil Pollution Fund”, the amendments to the MLA include the following:

  • The amended Section 101(1.1) provides that the Ship-source Oil Pollution Fund is liable for the costs and expenses incurred by the Minister of Fisheries and Oceans or any other person in respect of measures taken under subsection 180(1) of the Canada Shipping Act, 2001 with respect to oil, or for loss or damage caused by those measures, for which neither the owner of a ship, the International Fund nor the Supplementary Fund is liable by reason of the fact that the occurrence or series of occurrences for which those costs and expenses were incurred did not create a grave and imminent threat of causing oil pollution damage.
  • The addition of Section 114.1 imposes levies on receivers and exporters of oil to be used to replenish the Ship-source Oil Pollution fund when depleted.
  • New penalties for non-compliance by the addition of Section 130.01 which provides for a fine of $50,000 per individual and, in the case of any other person, $250,000.

Going Forward

While these amendments are intended to improve maritime safety and environmental protection, it is not yet clear as to the impact these provisions will have upon the current Canadian marine and environmental framework.  It seems that some of the provisions are ambiguous or will be challenging to apply. Without further guidance on how these new measures will be implemented, and clarity on who has the regulatory authority to enforce or take action provided thereunder, the uncertainty will ultimately lead to litigation with the courts left to determine the appropriate outcome.  It will be interesting to see how the amendments to the CSA and the MLA will affect and bring about change to the maritime industry.


A cautionary note: The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

This article is republished with the permission of the author. It was first posted on the McMillan LLP website.

About the Author

Joanna is a senior associate in the Business Law Group and the Transportation Group in the firm’s Vancouver office.  She practices in the areas of corporate, commercial and maritime law. Joanna routinely advises companies in the marine industry and a wide range of other industries on general corporate and commercial matters, including mergers and acquisitions, sales and purchases of businesses and marine assets, business structuring and organization, corporate restructuring and reorganization, and preparation and negotiation of agreements and contracts.

Joanna’s clients turn to her for day-to-day advice on their company operations and appreciate her practical and business-minded legal advice. She brings to her practice a depth of knowledge in the marine and transportation sectors acquired through her experience in working with ferry operators, shippers, ship owners and charter parties, and ship builders, locally and internationally.

HAZMAT Labels Market: global industry analysis by 2028

Future Markets Inc. recently published a research report on the Hazmat Labels Market. The report, entitled Global HAZMAT Labels Market: Overview – HAZMAT Labels, provides an overview of the market and predicts the growth of the industry.

The report is a compilation of first-hand information, qualitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. The report provides in-depth analysis of parent market trends, macroeconomic indicators and governing factors along with market attractiveness as per segments. The report also maps the qualitative impact of various market factors on market segments and geographies.

Regional analysis includes – North America, Latin America, Eastern Europe, Asia Pacific excluding Japan (APEJ), Middle East & Africa (MEA), and Japan.

Report Highlights include a detailed overview of the following:

  • market, changing market dynamics in the industry;
  • In-depth market segmentation;
  • Historical, current, and projected market size regarding volume and value;
  • Recent industry trends and developments;
  • Competitive landscape;
  • Strategies for key players and products offered’
  • Potential and niche segments; and
  • Geographical regions exhibiting promising growth

Hazmat Labels – Requirements

Hazmat labels must have excellent durability and cannot be impaired by other labels, markings & attachments. HAZMAT labels are categorized into nine classes for different purposes such as explosives, flammable gases, flammable liquids, inhalation hazards, organic peroxides etc. HAZMAT Labels for each class have a specific size & color. Most of the HAZMAT labels have contrasting background & a dotted line border. HAZMAT labels have text & symbols either in white or black.

It is important to choose the correct HAZMAT labels for shipments, as labelling a material incorrectly can result in costly shipping delays, injuries & fines. HAZMAT labels must be printed or attached to any one side of product offered for transport. It is mandatory for HAZMAT labels to be attached alongside UN numbers.

Transport Canada and the US Department of Transportation (DOT) has developed certain specifications for labels, markings and placards that must be prominently displayed on each package or container, including transport vehicles in order to safeguard health, safety, and property. The global market of HAZMAT labels is anticipated to grow rapidly during the forecast period, due to growing demand from chemical, pharmaceutical and various other end use industries.

Stringent labeling regulations by governments regarding the transportation of hazardous material accelerates market growth of HAZMAT labels, globally. Rising popularity of interactive packaging where end users can directly track the packaging using HAZMAT labels with technologies such as
radio-frequency identification (RFID) is considered a new opportunity for growth of the HAZMAT labels market.

Global HAZMAT Labels Market: Segmentation

On the basis of material, global HAZMAT labels market has been segmented as: Paper, Plastic ( Polyolefin, Vinyl, Others ). On the basis of product type, global HAZMAT labels market has been segmented as: DOT HAZMAT labels and U.S. EPA HAZMAT labels. On the basis of end use, global HAZMAT labels market has been segmented as: Pharmaceutical, Electrical & Electronics, Chemical and Petrochemicals, and Agriculture & Allied Industries.

Geographic Market

The global HAZMAT labels market has been segmented based on the region like North America, Latin America, Western Europe, Eastern Europe, MEA, APEJ, and Japan. Asia Pacific and MEA. U.S. has strong market in HAZMAT labels accounting for highest refineries & chemical producing nation in the world. The U.S. accounts for the largest share in HAZMAT labels market, owing to a large petrochemical industry. MEA region and other Asia Pacific countries such as China, India etc. are expected to witness moderate growth in the HAZMAT labels market, during the forecast period.

Key Players

Some of the key players in the HAZMAT labels market are as follows: Emedco Inc., J.Keller & Associates Inc., Brimar Industries, Inc., Air Sea Containers, Inc., National Marker Company, Labelmaster Services Inc., BASCO, Inc., LPS Industries, LLC.;

Many local and unrecognized players are expected to contribute to the global HAZMAT labels market during forecast period.

Key Developments

Some of the key developments in the HAZMAT labels market are as follows:

  • HSE Inc. has introduced HAZMAT labels with pictograms alert in order to describe presence of a hazardous chemical.
  • In February 2018, Labelmaster Services Inc. announced that it has been named the exclusive label manufacturer and distributor for CHEMTREC.

Five New U.S. Hazmat Rules to Look for in 2018

By Roger Marks, Lion Technology Inc.

Ask a U.S. dangerous goods (DG) professional to name the most challenging part of his or her job, and you’re likely to hear about dense regulatory standards that overlap and seem to change on a near daily basis.

As dangerous goods shippers, freight forwarders, and carriers roll into 2018, new rules for hazmat air and vessel shipments are already in effect.  In addition, U.S. DOT’s Pipeline and the U.S. Hazardous Materials Safety Administration (PHMSA) plans to start finalizing new hazmat rules as soon as February 2018.

Here, we’ll review the new U.S. DG air and vessel requirements that are mandatory now and review five new or changing U.S. DOT hazmat rules most likely to hit the books as Final Rules this year.

New IATA DGR Rules for Air Shippers

For hazmat air shippers, the 59th Edition of the International Air Transport Association’s Dangerous Goods Regulations, or IATA DGR, is in effect as of January 1, 2018.  The 59th Edition of the IATA DGR includes stricter requirements for lithium batteries shipped by air, a re-ordered list of Class 9 materials in Subsection 3.9.1, and a new Appendix I that details changes planned for air shippers in 2019.

Just before January 1st, IATA published the first Addendum to the 2018 DGR, which includes additional updates for air shippers and airline passengers.  IATA uses these addendums to make ongoing revisions to the current DGR before the publication of the next edition.

2016 IMDG Code Mandatory as of January 1st

Compliance with the latest International Maritime Dangerous Goods Code, or IMDG Code, is also mandatory as of January 1.  Updates made in the 2016 edition, compliance with which was voluntary throughout last year, are now officially in force.  These include new dangerous goods marking and labeling criteria; new packing instructions for certain shipments of engines, lithium batteries, and aerosols; and adjustments to the IMDG Code Dangerous Goods List.

The U.S. DOT, along with other federal agencies, recently released a semiannual agenda of rulemaking activities, many of which will impact hazardous materials professionals in 2018. The five rulemakings below, in progress now, are all scheduled to be published as final rules before Fall 2018.

  1. Enhanced Safety Provisions for Lithium Batteries by Air (RIN 2137-AF20

Expected in February 2018, this Interim Final Rule will harmonize the 49 CFR hazmat regulations with evolving international standards for shipping lithium batteries by air.  International requirements already in effect under the latest IATA DGR will now be adopted into 49 CFR and include:

  • Prohibiting lithium-ion cells and batteries as cargo on passenger aircraft;
  • Limiting state-of-charge to 30%; and
  • Limiting the use of alternate provisions for small cells or batteries by air.

Lithium battery requirements are one area of the hazmat regulations that have changed rapidly in the past decade and will continue to evolve as regulators and industry learn more about the potential and hazards of these batteries.

Melted mobile phone caused from lithium battery explosion

  1. Response to Industry Petitions—RIN 2137-AF09

Under regulations found at U.S. 49 CFR 106.95, interested parties may petition US DOT to amend, remove, or add hazmat regulations to enhance safety, streamline the CFR text, or boost efficiency for shippers and carriers.  In 2018, PHMSA plans to address 19 such petitions from hazmat stakeholders to provide clarification and/or relief within the hazmat shipping regulations.

Petitions to be addressed include an increase to the service life of certain hazmat tank cars and removing the emergency response number requirement for shipments of excepted quantities of hazardous materials.

This final rule is also expected in February 2018.

  1. Miscellaneous Amendments Pertaining to DOT Specification Cylinders (RIN 2137-AE80)

The U.S. DOT will address various petitions from industry stakeholders pertaining to the manufacture, maintenance, and use of DOT specification cylinders.  The rulemaking will also incorporate two existing hazmat special permits into the U.S. 49 CFR Hazardous Materials Regulations (HMR).

DOT expects to issue this final rule in April 2018.

 EPA’s Electronic Hazardous Waste Manifest System

Technically speaking, this one is a U.S. EPA rulemaking — but it does have consequences for hazmat shippers.  The Hazardous Waste Manifest is a shipping paper required for the transport of hazardous waste, and hazardous waste is regulated in transport as a hazardous material by US DOT.

On January 3rd, 2018, the U.S. EPA published a final rule to guide the process of setting and collecting fees from users of the electronic Manifest system.  Rollout of the long-planned e-Manifest system will begin in earnest on June 30th of this year, when the U.S. EPA plans to implement the system for collecting domestic hazardous waste manifests and domestic shipments of State-only regulated hazardous wastes.

As for how it will work, the U.S. EPA has determined that charging user fees to treatment, storage, and disposal facilities (TSDFs) and State-only waste receiving facilities is “the most effective and efficient means” of collecting user fees to fund the administration of the e-Manifest system.

  1. Oil Spill Response Plans for High-Hazard Flammable Trains

    High Hazard Flammable Train

    (RIN 2137-AF08)

This year, the U.S. DOT will promulgate a Final Rule to expand the applicability of oil spill response plans for trains transporting Class 3 flammable liquids in certain volumes and orientations across the train.

The bolstered requirements will apply to High-Hazard Flammable Trains, or HHFTs. A “High-Hazard Flammable Train” is a train carrying 20 cars of a Class 3 flammable liquid in a continuous block or 36 or more such cars across the entire train. Crude oil production and transport volumes have risen significantly in the past decade:  In 2009, 10,800 rail car loads of crude oil traveled by Class I railroad.  By 2015, that number had skyrocketed to over 400,000.1

The U.S. DOT plans to issue this final rule in July 2018.

These likely won’t be the only changes for U.S. hazmat shippers in 2018.  But, by identifying the future regulations or updates that may impact operations, shippers, brokers, and carriers can avoid confusion and panic when DOT finalizes the new rules.

 

Footnotes

  • *See 79 FR 45019

_____________________________

About the Author

Roger Marks is a researcher and writer at Lion Technology Inc., a provider of 49 CFR, IATA DGR, and IMDG Code dangerous goods training in the US.  Now in his 7th year at Lion, Roger creates content to inform and empower EHS professionals, and closely monitors developing regulatory actions that impact hazmat shipping, hazardous waste management, environmental compliance, and OSHA workplace safety.  Find nationwide public workshops, 24/7 online training solutions, and live webinars at www.Lion.com.

This article is republished and first appeared on OHS Online.

 

U.S. EPA Assesses Sunken, Leaking Marine Vessels

The U.S. Environmental Protection Agency (U.S. EPA) continues its response to Hurricanes Maria and Irma in close coordination with federal, commonwealth, territory, and local partners. EPA remains focused on environmental impacts and potential threats to human health as well as the safety of those in the affected areas.

“Our role is to assist both Puerto Rico and the U.S. Virgin Islands to minimize environmental damage from boats leaking gasoline, fuel or other contaminants,” said EPA Regional Administrator Pete Lopez. “We are doing this in a way that respects the vessel owner’s rights while still protecting people from spills and hazardous substances that might be onboard the vessels.”

Marine Vessels Recovery Operations

EPA is supporting Puerto Rico, the U.S. Virgin Islands and the U.S. Coast Guard in marine vessel recovery work. Teams continue to locate, assess and retrieve sunken, damaged and derelict vessels around Puerto Rico and the USVI.  We are also assisting with the recycling and disposal of recovered oil and hazardous materials from the vessels.

The U.S. EPA’s support role includes recording the vessel’s location and collecting information such as the name of the vessel and identification number, condition, impact to surrounding areas and/or sensitive/protected habitats (e.g. mangroves, coral reefs) for future recovery missions and owner notifications.  A higher priority is placed on vessels found to be actively leaking fuel or hazardous materials, where containment and absorbent booms are placed to decrease contamination.

Once the damaged vessels are brought to shore, or are processed on a staging barge, EPA will be handling various hazardous materials for recycling and disposal, including petroleum products (oil, gas or diesel fuel), batteries, and e-waste, which can harm the environment if they’re not removed from the waters. EPA will also recycle or dispose of any “household hazardous wastes”, such as cleaners, paints or solvents and appliances from the vessels. It is important to properly dispose of these items to prevent contamination to the aquatic ecosystem.

Vessels are being tagged by assessment teams with a sticker requesting that owners contact the U.S. Coast Guard to either report their vessel’s removal, or to request U.S. Coast Guard assistance in its removal. There is no cost, penalty or fine associated with the removal of the vessels.

As of November 16, 2017,

  • 340 vessels were identified as being impacted in Puerto Rico
  • 589 vessels were identified as being impacted in the U.S. Virgin Islands

The effects of an spills from marine vessels will depend on a variety of factors including, the quantity and type of liquid (i.e., fuel, oil) spilled, and how it interacts with the marine environment. Prevailing weather conditions will also influence the liquid’s physical characteristics and its behaviour. Other key factors include the biological and ecological attributes of the area; the ecological significance of key species and their sensitivity to pollution as well as the time of year. It is important to remember that the clean-up techniques selected will also have a bearing on the environmental effects of a spill.