Investigation Into Conditions Affecting United States Carriers in Connection With Canadian Ballast Water Regulation in the United States/Canada Great Lakes Trade, 44979-44980 [2024-11189]

Agencies

• Federal Maritime Commission

[Federal Register Volume 89, Number 100 (Wednesday, May 22, 2024)]
[Notices]
[Pages 44979-44980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11189]


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FEDERAL MARITIME COMMISSION

[Docket No. FMC-2024-0008]


Investigation Into Conditions Affecting United States Carriers in 
Connection With Canadian Ballast Water Regulation in the United States/
Canada Great Lakes Trade

AGENCY: Federal Maritime Commission.

ACTION: Notice of investigation and request for comments.

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SUMMARY: The Federal Maritime Commission (Commission) has initiated an 
investigation into conditions created by the Government of Canada 
(Canada) in connection with regulation of ballast water management 
systems that may adversely affect the operation of United States 
carriers in the United States/Canada Great Lakes trade.

DATES: Submit comments on or before June 21, 2024.

ADDRESSES: You may submit comments, identified by Docket No. FMC-2024-
0008, by the following method:
    Federal eRulemaking Portal: Your comments must be written and in 
English. You may submit your comments electronically through the 
Federal Rulemaking Portal at www.regulations.gov. To submit comments on 
that site, search for Docket No. FMC-2024-0008 and follow the 
instructions provided.

FOR FURTHER INFORMATION CONTACT: For questions regarding submitting 
comments or the treatment of any confidential information, contact 
David Eng, Secretary; Phone: (202) 523-5725; Email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    Based on available information, it appears that conditions created 
by the Government of Canada (Canada) in connection with regulation of 
ballast water management systems may adversely affect the operation of 
United States carriers in the United States/Canada Great Lakes trade, 
in particular the carriers operating vessels that may become subject to 
regulation in September 2024, within the meaning of 46 U.S. Code, 
chapter 423 (Foreign Shipping Practices) (46 U.S.C. 42301-307). Title 
46 U.S.C. 42302 authorizes the Federal Maritime Commission (Commission) 
to investigate these conditions, and chapter 423 authorizes the agency 
to take action in response.

II. Summary of Apparent Conditions

    In 2020, the Lake Carriers Association (LCA) filed a petition with 
the Commission as to pending Canadian regulation of ballast water 
discharge on the Great Lakes. See FMC Docket No. 20-10, P1-20--Petition 
of the Lake Carriers' Association Pursuant to Section 19 of the 
Merchant Marine Act, 1920. LCA's petition alleged that Canadian 
regulation scheduled to take effect in September 2024 would create 
conditions unfavorable to shipping by requiring U.S. vessels to install 
new ballast water management systems. LCA argued that this would impose 
a severe burden while offering negligible environmental benefits, since 
the relevant U.S. carriers (Lakers) take in but do not discharge 
ballast water in Canadian waters. The petition asked the Commission to 
investigate and adopt its own regulations in response. The Commission 
opened an investigation under 46 U.S. Code, chapter 421 (Regulations 
Affecting Shipping in Foreign Trade). See FMC Docket No. 20-10. In that 
Chapter 421 proceeding, the FMC sought and received comments, including 
from the Government of Canada. See FMC Notices, 85 FR 37453 (June 22, 
2020), 87 FR 6173 (February 3, 2022); Comments of the Embassy of 
Canada, Government of Canada, Docket No. 20-10 (Doc. No. 3) (July 22, 
2020).
    Since at least 2020, the U.S. Environmental Protection Agency (EPA) 
has been engaged in rulemaking to consider similar regulation. See 
Vessel Incidental Discharge National Standards of Performance, 85 FR 
67818 (Oct. 26, 2020) (to be codified in 40 CFR part 139); Supplemental 
Notice, 88 FR 71788 (Oct. 18, 2023). The EPA's October 2023 
Supplemental Notice in that rulemaking indicates that the agency is 
considering issuing a final rule that is less restrictive than the 
regulation due to take effect in Canada, as it would require the type 
of ballast water systems at issue only for covered vessels built in the 
future. See 88 FR 71803-04 (explaining differences between proposed 
regulatory option and relevant Canadian regulation); id. at 71,808 
(``EPA proposes to define a New Laker as a bulk carrier that operates 
exclusively on the Great Lakes and that is constructed after the 
effective date of [U.S. Coast Guard] regulations promulgated pursuant 
to [Clean Water Act] section 312(p)(5)(A)(i)'').
    In February 2024, the LCA filed a public letter in the Commission's 
Chapter 421 proceeding. See Docket No. 20-10 (Doc. 8) (Feb. 13, 2024). 
The letter urged the Commission to move forward promptly. The LCA 
emphasized that its members' Lakers would have to prepare to comply 
with the stricter Canadian rules before the compliance date of 
September 8, 2024, even though the EPA was unlikely to require them to 
meet the stricter standards. Id. At 2-3. In addition, the letter stated 
that these U.S.-flagged Lakers had been effectively prevented from 
applying for an exemption or extension from the Canadian regulation, 
because relevant procedures were not expected to be in place prior to 
July 2024, despite the impending compliance date. Id. At 2, 4. The 
letter confirmed that only five of the existing U.S. Lakers would be 
affected by the regulation in September 2024 (one post-2008 vessel 
already has the required equipment); the approximately 50 other U.S. 
Lakers were built prior to 2009. Id. Attachment C. However, the LCA 
argued that the five post-2008 Lakers would be compelled either to 
install the required equipment, a ``multimillion dollar investment'' 
that they might well need to remove later in light of changing U.S. 
requirements, or to ``walk away from the business.'' Id. At 4.
    In light of the above, the Commission will, on its own motion, open 
an investigation under 46 U.S. Code, Chapter 423 (Foreign Shipping 
Practices). See 46 CFR part 555. In particular, the Commission will 
investigate whether the laws, rules, policies, or practices of Canada 
result in conditions that ``adversely affect the operations of United 
States carriers in United States oceanborne trade'' and that ``do not 
exist for foreign carriers of [Canada] in the United States under the 
laws of the United States.'' 46 U.S.C. 42302(a). Such conditions may 
exist here, in view of the LCA's allegations that U.S. carriers will 
suffer significant adverse effects from the impending Canadian 
regulation, but Canadian carriers operating in the United States are 
not subject to comparable requirements under U.S. law. Under 46 U.S.C. 
42302(c), the Commission is to complete its investigation and render a 
decision within 120 days after it is initiated.
    If the agency concludes that the standard of section 42302(a) is 
met, it is

[[Page 44980]]

authorized to take certain actions to encourage remediation of those 
conditions. Specifically, the Commission may take actions ``against any 
foreign carrier that is a contributing cause, or whose government is a 
contributing cause, to those conditions.'' 46 U.S.C. 42304(a). 
Potential actions include imposing limits and/or fees on Canadian-
flagged vessels that visit U.S. ports and requesting that the U.S. 
Department of Homeland Security and the U.S. Coast Guard refuse 
clearance and deny entry of such vessels into the U.S., or detain such 
vessels. See 46 U.S.C. 42304, 42305. Any such fees could be 
substantial, as they are authorized by law at a level up to $2,559,636 
per voyage. See 46 CFR 506.4. Under section 42304(b), the Commission 
``may consult with, seek the cooperation of, or make recommendations as 
to other appropriate agencies of the United States government'' prior 
to taking such action. When the Commission initiates a Chapter 423 
investigation, it will notify the U.S. Secretary of State and may 
request that the Secretary ``seek resolution of the matter through 
diplomatic channels.'' 46 CFR 555.7. Before any action is taken under 
46 U.S.C. 42304 or 42305, the relevant determination is submitted for 
Presidential review, within 10 days of receipt, under 46 U.S.C. 42306.
    At this initial stage of the investigation, the Commission will 
focus on providing a route for interested parties, including the 
Government of Canada, as well as Canadian carriers operating in the 
Great Lakes trade, to provide information, perspectives, and proposed 
solutions.

III. Investigation and Initial Request for Comments

    The Commission has determined that the above situation meets the 
threshold requirements for consideration under the relevant statutory 
and regulatory authority. See 46 U.S.C. 42302; 46 CFR 555.3, 555.5. The 
Commission has therefore determined to initiate an investigation into 
whether the situation has created conditions that adversely affect the 
operations of United States carriers as described above. See 46 U.S.C. 
42302; 46 CFR 555.5, 555.6. To that end, the Commission has designated 
the General Counsel to lead an investigation into the conditions and to 
prepare a report on the investigation's findings and recommendations 
for Commission consideration.
    Interested persons are requested to submit written comments 
containing arguments, experiences, and/or data relevant to the above-
described conditions, with a particular focus on the situation of 
vessels that will become subject to the Canadian regulation described 
above in September 2024. It would be especially helpful for the agency 
to receive comments addressing what options exist for carriers to seek 
an exemption from the Canadian regulations going into effect in 
September 2024, and whether any such processes differ based on whether 
the carrier is a U.S. carrier or a Canadian carrier.
    The Commission's jurisdiction under 46 U.S.C. 42302 is broad, and 
the agency welcomes comments not only from the Government of Canada, 
but also from container shipping interests, bulk cargo interests, 
vessel owners, individuals and groups with relevant information on 
commercial and environmental considerations, and anyone else with 
relevant information or perspectives on this matter.
    As the Commission proceeds with this investigation, it may 
determine to request additional comment or gather information through 
other means as authorized under 46 U.S.C. 42303 and 46 CFR 555.5, 
555.6.

    By the Commission.

    Dated: May 16, 2024.
David Eng,
Secretary.
[FR Doc. 2024-11189 Filed 5-21-24; 8:45 am]
BILLING CODE 6730-02-P