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Verifying Compliance with Ballast Water Discharge Regulations
161
approximation of the annual benefit to a shipowner or ship operator of noncompliance by not
using and maintaining the BWTS is therefore the midpoint of estimated annual operating
and maintenance costs, about
$
70,000 per year. As mentioned previously, however, there
may be additional benefits associated with not using BWTS; for instance, when verification
systems rely on inspecting equipment. An unused or slightly used BWTS is more likely to
pass inspections and result in fewer penalties and sanctions than a well-used BWTS.
Cost of Noncompliance
As Equation 1 illustrates, the expected cost of noncompliance is associated with the likeli-
hood of a detected violation being cited and prosecuted and the expected penalty. However,
it is reasonable to assume that all of the parameters in Equation 1 are the same for all
verification systems except the parameter (
a
). Therefore, the expected value of (
a
) can be
used under each verification alternative as a relative indicator of the cost of noncompliance
under each alternative.
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There are also factors other than the relative value of (
a
) that may give an advantage
to indirect sensor-based measures over direct ballast water sampling. Through the use of
onboard sensors, it is possible to determine if ballast water meets standards prior to or
immediately at the time of ballast water discharge that can result in some violations being
prevented. Direct sampling of ballast water discharge, on the other hand, can require several
hours of sample collection and more hours of ballast water testing and analysis to detect a
violation as it is occurring. It is not clear if ballast water regulations will allow enforcement
staff to prevent ballast water that does not meet standards from being discharged. However,
in the extreme case where the use of reliable and precise sensors result in (
a
)
=
1.0 (100%
detection), and where ballast water that is determined not to meet standards is not allowed to
be discharged, there can be 100% confidence that the ballast water regulations are meeting
their goals. If a 100% detection rate cannot be used to prevent 100% of illegal ballast
water discharges, it will at least provide enforcement staff the opportunity to prosecute and
penalize up to 100% of violators.
From a strictly economic perspective, a high level of confidence in the deterrence effect
of the verification program could be achieved using a validation system with relatively low
detection rates as long as penalties imposed on violations that are detected are relatively
high. Based on Equation 1, for example, the deterrence effect of achieving 90% detection
rate (
a
=
0.9) with an expected penalty (
b
×
c
×
d
×
e
) of
$
100,000 would achieve an
expected cost of noncompliance of
$
90,000, which is the same as the expected cost of
noncompliance if the detection rate is 100% (
a
=
1.0) with an expected penalty (
b
×
c
×
d
×
e
) of
$
90,000. A more thorough version of this deterrence model, however, would
need to account for how repeat offenders are treated, whether penalties include loss of
port visiting privileges or other nonpecuniary sanctions, how responsible parties (perhaps
including BWTS vendors or insurers) share liability, and other matters that have yet to be
determined.
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Conclusions
The international maritime industry is inherently difficult to regulate because of the nature
of ocean shipping; complex state, federal, and international jurisdictions; often unclear
vessel ownership and liability issues; impacts of traditional risk-sharing institutions (e.g.,
Protection and Indemnification Clubs [P&I Clubs]); and other factors. However, the success
of any maritime regulation depends to a significant extent on the first link in the enforcement
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