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Canadian Oil Tanker Policy in the International Context

Canadian Oil Tanker Policy in the International Context

The international shipping community has sounded an alarm on proposed the moratorium of oil shipments on a significant portion of Canada’s Pacific Coast.

The Canadian Parliament is considering new legislation that would have the effect of establishing a moratorium on the shipment of crude oil in the waters of Northern British Columbia (Bill C-48: An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia’s north coast).

The International Chamber of Shipping (ICS) has voiced grave concern about this proposed legislation which it says will interfere with international maritime trade.

“Such a draconian step could lead to serious concerns being raised by Canada’s international trading partners,” said ICS Director of Policy and External Relations, Simon Bennett.

While the ICS recent concern is not without merit, maritime scholar raised addressed the implications of this policy issue as far back as 2012. Anderson and Spears paper “Regulating oil tankers in Canadian waters,” appeared in the referred Australian Journal of Maritime and Ocean Affairs.

The authors noted that on Canada’s Pacific, concerns had prompted recent legislative attempts to ban all oil tanker traffic over large portions of Canadian waters. The issue is not abating because the rising tide of popular opinion is fuelled by the belief that a tanker ban is the only way to prevent an oil spill from damaging the marine environment. Seldom included in the debate is any analysis of the consistency of Canada’s oil tanker policy development from an international perspective. As a major trading nation, this type of legislation raises important questions for all shipping traffic using the Atlantic, St. Lawrence Seaway/Great Lakes, Pacific and Arctic waters.

Policy Implications of an Oil Tanker Ban

While a ban on crude petroleum tanker traffic may hold some initial appeal, policymakers must carefully consider the economic trade-offs involved in shipping cargoes at sea against the storage, handling, port requirements and environmental risks associated with the trade. Also, Canada takes a proactive approach to sensitive marine areas and issues arising from ship-source pollution. The policy decision-making context needs to fully consider Canada’s existing international commitments and strategic foreign policy interests.

The banning of “all” tankers in Canadian West Coast waters goes against the established international law and may, in fact, limit Canada’s future options and interests in ways that are presently unforeseen. These issues cannot be considered in isolation. For example, in China, the Law of the Sea Convention has been used to restrict vessel access in the South China Sea, and this has critical geopolitical implications.

If Canada adopts an outright ban, it offers supports the Chinese position. Commentators have called this approach by China “law fare” as it seeks to use international law and certain interpretations rather than naval force.

A ban on tanker traffic on Canada’s west coast without stakeholder consultations or substantive regulatory impact analysis could provoke policy or commercial concerns from Canada’s major trading partner the United States.  The St. Lawrence Seaway, a vital navigation, and trade link were created through a bilateral process with the United States that led to the signing of the 1932 Great Lakes-St. Lawrence Deep Waterway Treaty and the Great Lakes-St. Lawrence Basin Agreement in 1941. Enduring and robust trade relationships were forged because of agreements based on a cooperative legal foundation regarding shipping.

Legislative action to ban certain types of shipping traffic in one area could call into question Canada’s resolve to honour existing commitments. A large-scale west-coast ban on tanker traffic would no doubt contradict the co-operative spirit that underpins commercial shipping. Further, what Canada chooses to do on the West Coast may have significant impacts on its claims to regulate shipping in other areas.

Canada has been a leader in international governance of pollution prevention from shipping. The underlying theme is freedom of navigation with specific restrictions to prevent marine pollution from ships and a risk management approach being utilized rather than an outright ban on tanker traffic. This discussion paper seeks to facilitate the best possible public policy for Canada as a trading and maritime nation and as a Country that endeavours to protect its marine environment. Primarily, we are looking at the balancing of the freedom of navigation with the coastal state’s (Canada) right to protect its marine environment.

There are mechanisms and procedures to do this that win the support of the international community.  The international agreements and legislative and administrative procedures have worked well to protect and prevent marine pollution, as the statistics indicate. The transparency of these processes leaves room for improvement and greater public involvement.

As a major exporter, it is not in Canada’s interest to limit its options without a full discussion and dialogue.  There is no debate that oil accidentally released into the marine environment is a problem, and we’ve seen that in the recent Deep Horizon spill in the Gulf of Mexico. The long-term environmental impacts are still yet unknown.  This issue needs to be considered more thoroughly, and there are a variety of risk management procedures and approaches that can be utilized to minimize the potential pollution risk, such as assistance compulsory pilotage and no navigation zones. Also, what Canada chooses to do on the West Coast may have substantial impacts on its claims to regulate shipping in other areas.

An ad hoc tanker ban in one area of Canadian waters is hard to justify. An oil tanker traffic on Canada’s northwest coast would run counter to the way shipping risks are managed in the one geographic location where growth in crude oil trade is most likely to occur in British Columbia and elsewhere in Canada.

Finally, the remaining part of the Canadian policy discussion regarding the merits of a tanker ban that needs to be included in a holistic policy response is the dependency and economic impact of both large and small on bulk fuel deliveries (by tanker vessels of varying sizes and by barge). These implications of Canadian oil tanker traffic need to be considered in developing a coherent and consistent policy response that both meets the test of Canada’s existing international and domestic legal and policy commitments.