By Brian Dunn

The $1.5 billion national Oceans Protection Plan (OPP) announced by Prime Minister Trudeau on Nov 7 will result in a “fundamental shift on how shipping will operate in Canada,” according to Gillian Grant, Senior Counsel Legal Services, Transport Canada. OPP was largely driven by concerns on the West Coast, Ms. Grant added during Borden Ladner Gervais’ 28th Annual Maritime Law Seminar in Montreal on December 2.

The plan has four priorities, namely the creation of a world leading marine safety system, including new prevention and response measures; restoring and protecting marine ecosystems and habitats; strengthening partnerships and launch co-management practices with Indigenous communities and investing in spill cleanup and research methods to ensure response decisions are evidence based. The Plan will be rolled out over several years and includes increased funding for the Canadian Coast Guard, including the leasing or purchase of ships capable of towing large commercial vessels. “One of the more transformative initiatives are measures to allow Indigenous and coastal communities to create local vessel control areas to help minimize safety and or environmental risks,” said Ms. Grant.

New legislation will also be introduced to address abandoned and derelict vessels, including making owners responsible and liable for cleanup by incorporating the Nairobi Wreck Removal Convention into Canadian law. In addition, amendments will be made to the Marine Liability Act to remove the per incident liability limit for the Shipsource Oil Pollution Fund and to recapitalize the fund.

And with the new Polar Code coming into force January 1, three years behind schedule, Canada is also entering a new era of shipping and shipping consciousness, added Ms. Grant. The IMO sanctioned Polar Code is designed to reduce the safety and pollution risks associated with navigation in Polar waters. Transport Canada has developed a draft proposal to implement the Polar Code within Canada’s existing Arctic shipping regime through a new regulation called the Arctic Shipping Safety and Pollution Prevention Regulation. Among some of the proposals, the safety provisions apply to cargo vessels of 500 gross tonnes or more, other than fishing vessels or pleasure craft and passenger vessels that are certified in accordance with Chapter I of SOLAS (Safety of Life at Sea) treaty. Canada, however, will maintain the requirement to have an ice navigator onboard specific vessels not subject to the Polar Code, such as vessels of 300 gross tonnes or more, or vessels carrying potential pollutants or hazardous goods, or vessels pushing or towing another vessel if the towed or pushed vessel carries potentially polluting or hazardous goods, or if the combined tonnage of the towing or pushing vessel and that of the vessel being towed or pushed exceeds 500 tonnes.

In terms of integrating existing Canadian pollution prevention measures into the Polar Code, Transport Canada proposes to maintain the existing prohibition for the discharge of waste under the Arctic Water Pollution Prevention Act and the implementation of structural requirements such as double-hulls. Canada hopes to publish the new regulations in the Canada gazette in early 2017.

The Ballast Water Convention is expected to take effect on Sept. 8, 2017. It was signed by 53 countries, including Canada, but not the U.S., and represents 53 per cent of the global merchant shipping tonnage. Since the U.S. hasn’t signed on, it will present a challenge for Canadian shippers operating on the Great Lakes, Ms. Grant pointed out. “Incompatibilities between U.S. requirements and the Convention could introduce delays in the regulatory process needed to align Canada’s regulations with the Convention.”

Since regulatory amendments are needed to bring the Convention into force in Canada, Transport Canada will continue to apply the existing regulatory regime which already allows the use of ballast water treatment, said Ms. Grant. In addition, Canada will continue to “engage the U.S. and bring solutions to the IMO to improve technology and the Convention regime.”

Tanker traffic on the West Coast is expected to increase significantly if and when LNG production facilities should be constructed in British Columbia, the seminar was told by Dino Rossi, Partner, BLG Vancouver. There are twenty proposed LNG terminals in the province and nine have export licenses to serve Japan and Korea initially and China over the long term. With investments pegged at between $190 billion and $280 billion for just three fully operational plants, the projects would represent the largest private investment proposals in BC’s history, he added. And with Ottawa’s approval of the $6.8 billion Kinder Morgan pipeline expansion project in November, traffic is expected to increase from 100 oil tankers to 440 tankers annually. The expansion will increase oil exports from 300,000 to 895,000 barrels per day.

While a popular view is that Canada has missed the boat on LNG terminals compared to other countries, especially Australia, there are plenty of opportunities to catch up, noted Mr. Rossi. Global markets for LNG are pegged to grow by more than five per cent compounded annually between now and 2025 as more countries opt for LNG due to its lower emissions and relatively low price compared to other fossil fuels, he pointed out.

The day’s seminar was led off by a panel discussion entitled Claims Management and Response from P&I Legal Perspectives, using a fictitious scenario created from various cases BLG has worked on. This particular “incident” involved the M/V Ever Unlucky, a Seaway size bulk carrier of 43,000 Gross Weight Tons with a Chinese crew and officers. The language of communication on the bridge was English, although the officers’ command of the language was not perfect. The vessel was carrying a cargo of steel coils from Antwerp to Montreal with a harbour pilot onboard for the berthing operations. As the vessel approached the dock, the pilot noticed a cargo crane close to where the vessel was to dock but the Master and pilot concluded they had enough leeway to come alongside without requesting the crane be moved. The French-speaking pilot gave instructions in English to the crew who thought the pilot said go hard to port instead of hard to starboard and to go full ahead instead of half ahead. As a result, the vessel bumped heavily into the dock and the bridge wing clipped the crane, resulting in serious damage to both the dock and crane. Once the vessel was docked, the captain contacted the ship’s agent to request assistance and the agent passed the request along to a BLG lawyer. The “accident” was further complicated when lawyer Findem, representing the terminal operator, slipped on ice on the gangway while boarding without permission and suffered serious injury.

The panel consisted of BLG Partner Jean-Marie Fontaine, Matthew Moore, Admiralty Director, The North of England P&I Limited and Bill Kirrane, Syndicate Management Claims, Steamship Insurance Management Services Ltd., London. The moderator was BLG Partner Jeremy Bolger.

Panellists were asked how they would respond to different steps in the investigation of the mishap, namely shore damage, personal injury, cargo damage, pollution and financial claims from the terminal operator for damage to the crane and from the port for damage to the dock. It was agreed that the first step should be to collect as much information as possible from logbooks and security cameras to determine what caused the incident, which may also require interviewing crew members, establish if there were any onboard injuries and figure out what were the potential liabilities for the P&I clubs. The investigation may also require local engineers, surveyors and navigational experts to establish the extent of damage.

There was a discussion on how to protect the ship’s captain from liability and whether the pilot could be sued. And if it had been a major incident, the idea of hiring a PR firm was debated to control the story and make sure all facts were accurate since “everyone thinks all ships are oil tankers,” noted Mr. Kirrane.