Report for the Government of South Georgia and the South Sandwich Islands Heavy Fuel Oil and Bunkering Activity in the South Georgia & the South Sandwich Islands Maritime Zone King Penguins, St. Andrew’s Bay, South Georgia. (Sheilapic76; CC BY 2.0) Constantia Consulting Ltd. This report has been prepared by Dr Neil Gilbert, Director, Constantia Consulting Ltd. Christchurch, New Zealand Invaluable advice and support has been provided by Mr Jack Fenaughty, Silvifish Resources Ltd, Wellington, New Zealand, which is acknowledged with appreciation. Report finalised 2 June 2017 2 Executive Summary The island group of South Georgia & the South Sandwich Islands (SGSSI) is an Overseas Territory of the United Kingdom. The Territory is administered by a small team based in Stanley in the Falkland Islands as well as a number of officers based at King Edward Point on South Georgia. Activities undertaken in the Territory include scientific research, tourism and commercial fishing. All activities are ship-based, which is the only means of accessing the islands. Vessels operating in the SGSSI maritime zone include fishing vessels (long-liners and trawlers), fishing support vessels (reefers and tankers), passenger vessels, research vessels, a fishery patrol vessel, British naval vessels, and yachts. SGSSI is a haven for the largest and most diverse populations of seabirds and marine mammals on Earth, and the most speciose marine ecosystem in the whole Southern Ocean. Combined with its wilderness, heritage and economic (tourism and fisheries) values, the Territory holds tremendous worth in a global context. Existing pressures on the environment and wildlife include a rapidly changing climate which is predicted to have significant implications for some species, including for krill on which many SGSSI top predators depend. Consistent with the global significance of the Territory’s natural ecological value, the Government of South Georgia & the South Sandwich Islands (G-SGSSI) has developed and implemented a range of management measures to protect the natural environment; including the designation of a marine protected area (MPA) which extends out to 200nm. The MPA establishes a series of restrictions on fishing (e.g. designated benthic closed areas). Following the publication of its 5-year Strategy 2016-2020 the G-SGSSI has signalled its intent to explore ways to increase levels of safety and sustainability in the maritime zone in respect of the carriage and use of heavy fuel oil and of more effective regulation of bunkering activity. Heavy fuels pose a significant environmental risk due to their persistence in the environment and the toxicity of the breakdown products. Ship-to-ship transfers of fuel (bunkering) also carry a risk of fuel spill through equipment or human failure. The carriage and use of heavy fuel (as defined) south of 60o South is prohibited by the provisions of Chapter 9 of Annex I to MARPOL. This applies to all vessels operating in the Antarctic Treaty Area. Collected data and information suggests that the majority of vessels operating in the maritime zone use marine gas oil (a light distillate fuel). Heavier (residual) fuels are carried and used by some trawlers and reefers. These vessels operate in the maritime zone for several months each year. 3 This strategic environmental assessment takes account of the current environmental state, and of the Government’s policy context to assess the risks posed by the carriage and use of heavy fuel oils and bunkering activities. The risk of a spill event associated with the carriage and use of heavier fuel oils has been assessed as being ‘critical’; a combination of a ‘possible’ likelihood and potentially ‘major’ consequences for the environment. This level of risk is considered to be highly inconsistent with Government policy and/or with the provisions of the MPA and is unlikely to be tolerable. Ideally, for this level of risk regulatory or management intervention will need to be initiated within 12 months so as to reduce the risk to a more acceptable level. The risk of a spill event associated with bunkering activity has been assessed as being ‘high’; a combination of an ‘unlikely’ likelihood but potentially ‘major’ consequences for the environment, if a large spill of heavier fuels was spilt in Cumberland East Bay. This level of risk is considered to be inconsistent with Government policy and/or the MPA, though may be tolerable under some circumstances. Ideally, regulatory and/or management intervention will need to be initiated within 1 to 3 years to reduce risk level further if practicable. It is also noted that an oil spill event, particularly involving heavier fuel oils, is likely to have both reputational and financial implications for G-SGSSI. The Government has clearly set out its strategy of “world-class environmental management underpinned by high standards of governance”, and actions it has taken in recent years, including the designation of the MPA, are consistent with that policy. An oil spill event would significantly detract from and potentially undermine the current policy and management actions that have been taken. Implications that could arise include a reduction in tourism numbers and a disruption to fishing activity with potential loss of revenue as a consequence. An oil spill event also has potential to interrupt globally significant scientific research and data sets. Whilst the issue of carriage and use of heavy fuel oils by vessels is, to an extent, under ongoing scrutiny by the international community (through the IMO), the current effort is unlikely to achieve the stated objectives of G-SGSSI in a timely manner. As such, given the risk levels assessed in this report, it is suggested that achieving GSGSSI policy objectives is far more likely through direct action than awaiting developments internationally. In considering options to better control the carriage and use of heavier fuel oils, a definition will be required and two options are proposed: the definition used by IMO to prohibited the carriage and use of heavy fuel oils in the Antarctic Treaty Area, or a much stricter definition that would essentially restrict fuel use in the SGSSI maritime zone to a marine gas oil (for example a DMA grade as specified in ISO 8217); the latter will clearly have a greater impact on the risk rating than the former. A series of measures for introducing these controls are explored, and the implications and benefits of each are considered. 4 With regard to the carriage and use of heavy fuel oils these measures include: • Doing nothing; • Putting a condition on fishing licences to prohibit the carriage and use of heavy fuels oils (as defined); • Putting in place a control on all vessels entering SGSSI internal waters to prohibit the carriage and use of heavy fuel oils (as defined) – perhaps by means of an Order under the Customs Ordinance; • Seeking IMO designation of the SGSSI maritime zone as a particularly sensitive sea area, which could include controls on the carriage and use of heavy fuel oils by vessels entering the designated PSSA; • Introducing a heavy fuel oil levy for vessels carrying and using heavy fuel oil (as defined) – possibly based on the volumes and the duration of stay in the SGSSI maritime zone. With regard to bunkering activity identified control measures include: • Doing nothing; • Enhancing the management and oversight of bunkering activity including greater scrutiny of ship-to-ship operational plans and oil spill response plans as well as compliance monitoring of bunkering activity, and improved data collection; • Prohibiting the bunkering of heavier fuel oils (as defined) – either as a condition on fishing and/or transhipment licences or by means of an Order under the Fisheries (Conservation and Management) Ordinance; • Prohibiting the bunkering of all fuels in SGSSI waters - either as a condition on fishing and/or transhipment licences or by means of an Order under the Fisheries (Conservation and Management) Ordinance; • Establishing a fuel spill response plan and providing training and response equipment for officers based at KEP. In identifying a way forward, it is noted that doing nothing is unlikely to be tenable. G-SGSSI has signalled its intent to act, through its strategy document and in designating the SGSSI MPA. Further, the identified risk levels are sufficiently high to require response measures to be initiated in the short to medium term. Consequently, this assessment sets out 13 recommendations for the Government of South Georgia & the South Sandwich Islands to consider. ****** Recommendation 1. It is recommended that GSGSSI initiate action to address the risk associated with the carriage and use of heavy fuel oil in SGSSI waters and with bunkering activity. Ideally, action should be initiated in the short-term i.e. the next 12 to 24 months. 5 Recommendation 2. It is recommended that, in the first instance, G-SGSSI adopt as its definition of heavy fuel oil the definition used by IMO to prohibit the carriage and use of heavy fuel oil in the Antarctic Treaty Area (Chapter 9 of Annex 1 to MARPOL (Regulation 43). See Annex 2 of this report). Recommendation 3. It is recommended that G-SGSSI take steps to improve the collection of data on the types and volumes of fuel being used by vessels operating in the SGSSI maritime zone (using specifications of ISO 8217) so as to inform future decisions on controlling fuels used in the SGSSI maritime zone. Recommendation 4. It is recommended that G-SGSSI considers implementing a prohibition on the carriage and use of heavy fuel oils (as defined) by all vessels entering its internal waters. This could be achieved by means of an Order made under section 7(1)(a) of the Customs Ordinance 2016. Recommendation 5. It is recommended that G-SGSSI prepares a consultation paper on the basis of this assessment, setting out its intended approach and circulates to all interested parties at the earliest opportunity.