Even noncompliant ship owners incur some costs related to MARPOL Annex I oily waste management regulations in order to trade in global waters. However, the cost differences between an Owner investing only in "lip service" compliance, such as maintaining up to date certificates, installing an Oily Water Separator on board, and filling out a falsified Oil Record Book, versus a prudent Owner attempting to address the intention of the regulation, can be significant.
This project is an effort to quantify this cost difference and compare it to the risk of discovery and prosecution of non-compliance, which has become more common and costly in recent years, particularly in US waters.
The primary deliverable of this project is a spreadsheet analysis of ship owner costs related to MARPOL Annex I compliance1. This spreadsheet is available for download here, and can be edited by ship owners and other stakeholders to more accurately reflect their specific costs. The spreadsheet may help ship owners make an economic case for investments in compliance, as well as identify potential cost saving opportunities and optimal ship-specific approaches to oily waste stream management. The majority of this report describes the approach, intended use and limitations of the spreadsheet.
Based on the cost data gathered during our project, it was observed is that if a ship owner takes a ship-specific approach to developing an oily waste management plan for a particular vessel, they could generally be economically competitive with non-compliant vessels when the risk of enforcement actions was taken into account. However, for some vessels2 it may still be (economically) advantageous to pollute, which implies that the USCG, DOJ and other international enforcement agencies may need to further increase efforts at discovery and prosecution, or increase penalties, to disincentivize oily waste pollution for all ship owners.