Proposed regulations for the offshore bunkering sector muddy the waters

DFFE publishes draft regulations for public comment

New proposed regulations issued on Friday aim to limit the extent of offshore bunkering operations in Algoa Bay by stipulating that a maximum of five operators may operate in the Bay and that each operator may employ only one vessel.

This will mean that a maximum of five tankers will be permitted in Algoa Bay. At the height of the offshore bunkering services in Algoa Bay, there were three operators – some of which were employing more than one vessel. Prospective operators may prefer to see a limit on overall vessels rather than operators, but it appears that this limit could be set at five.

The South African Maritime Safety Authority (SAMSA) initially imposed a moratorium on the expansion of the Algoa operations, but comments from the then COO at the beginning of 2024, Sobantu Tilayi, at the beginning of 2024 indicated that the intention was to restrict operations to only three players.

One has to wonder what will happen if more than five vessels are operational if the DFFE regulations remain unchanged when they are approved.

The Minister of Forestry, Fisheries, and the Environment, Dr Dion George, has called for public comments on the proposed regulations for the environmental management of offshore oil bunkering. He notes that the proposed regulations are intended to decrease the high risks associated with bunkering on the marine environment, which particularly threatens the critically endangered African penguins.

“We have an obligation to protect our coastal and marine environment, and the proposed regulations will help us do that by preventing bunkering operations in highly sensitive areas or, limiting the expansion of bunkering operations in areas where the practice is already underway,” he said.

The Minister’s comments seem to indicate an intention to prohibit the establishment of offshore bunker operations in other areas despite talks to the contrary.  

The media statement notes that the dangers of oil spills while bunkering “can include fire, explosions, serious harm to sea creatures and humans, and can render seafood harmful for human consumption.”

The language used in the statement does seem unnecessarily alarmist and journalists receiving the press release, may well believe that such operations are being conducted haphazardly in the absence of existing regulations. The reality, however, is quite different and all service providers are already mandated to comply with SAMSA’s Bunkering Code of Practice that stipulates training requirements, mandatory insurance, equipment surveys as well as emergency pollution response plans.

Although concerns have been raised about the Algoa Bay operations by environmentalists, the abrupt closure of operations in 2023 related to tax compliance issues and not environmental issues. The closure, however, did provide the industry with the opportunity to reflect on the conditions under which such operations should be reopened.

SARS began the process to amend the Customs and Excise Act and SAMSA released their Code for offshore bunkering. Both processes included periods of consultation with industry as well as environmental bodies.

A series of workshops, consultations and roundtables were organised by SAMSA, Transnet National Port Authority (TNPA), SARS, the Maritime Business Chamber (MBC) and the South African International Maritime Institute (SAIMI) as the industry sought to find viable solutions to support the resumption of offshore operations.

Discussions highlighted that the DFFE had not been ready to address the sector’s needs when it was first established.

Speaking at a roundtable event in May last year, Feroza Albertus of DFFE said, “We were not fully prepared to take this on. This was a new activity and was not regulated in a manner that it should have been.”

During the roundtable she contended that the SAMSA requirements for bunker operators focused on operational stipulations and did not include sufficient environmental requirements. Real engagement between SAMSA, TNPA and the DFFE around mitigating risks appears to only have commenced after the fact.  

TNPA released a draft Environmental Risk Assessment & Management Plan that aimed to identify all environmental, social and maritime risks as well as develop management plans and procedures to govern the operations in Algoa Bay in November 2023.

In addition, an Offshore Environmental Working Group consisting of NGOs, government departments and industry stakeholders began working within the space to help mitigate the environmental risks associated with offshore bunkering including oil spills as well as noise from increased ships’ traffic.

All stakeholders have agreed that the fact that the environmental assessment was completed after the fact for Algoa Bay was a mistake and should not be repeated when future potential bunkering locations are identified.

As such, the release of regulations from the department is not unexpected – although, it would have been helpful to have seen them gazetted before operations resumed this month. The department appears to have dragged its feet in addressing the issue proactively.

Current status of offshore bunkering

Offshore bunkering resumed earlier this month when AMSOL introduced their locally flagged tanker, Uhambo into the market.

Operators in the sector employ crew with tanker endorsements for chemical, oil, and gas tankers – ensuring that they have the necessary experiential training to mitigate incident.

“Our ability to comply with stringent operating regulations and legislation as well as international maritime and marine standards underpins AMSOL’s track record. This is the case for operations in Algoa Bay and we have worked closely with authorities and relevant stakeholders to ensure all legislative requirements for offshore bunkering operations are met,” said AMSOL’s Chief Commercial Officer, Graham Dreyden.

It is anticipated that other operators, including some of the previous bunker providers, are eyeing the space as the amended SARS regulations provide clarity for those supplying oil that is not refined locally.

Currently, SAMSA’s requirements for the approval of long-term bunkering operations of up to five years include the need to provide proof of experience in bunkering as well as an oil spill contingency plan along with insurance cover and service level agreements with oil spill response providers.

There are also stringent stipulations relating to vessel requirements and no vessels older than 25 years will be accepted for undertaking bunkering operations. Restrictions also exist for the bunkering vessel to ensure that the receiving ships are compatible in design and equipment, and comply with recommendations to ensure that mooring operations, hose handling and communications can be conducted safely and efficiently.  

SAMSA can also suspend an operator’s approval if there are indications that they are failing to comply with the requirements of the Code at any time and with immediate effect.

Algoa Bay has been designated as a suitable transfer area for long-term bunker operations along the South African coast by both SAMSA and TNPA.

According to the SAMSA Code, controlled areas can only be designated if the authority is satisfied that there is suitable emergency response and oil pollution prevention equipment and assets available in the area, including VTS/MRCC traffic management and oversight.

Ad-hoc STS transfer permits can be applied for from SAMSA for other areas along the coastline. Permission has been granted for operations along the West Coast as well as other areas.

Currently operators need to prove that they have adequate insurance cover from a member of the International Group of P&I Clubs before SAMSA will approve operations. This insurance covers clean-up costs, civil claims, rehabilitation of mammals/marine species or any other species effected and attendance costs for the various government departments involved.

Operating criteria

Specific maritime operational requirements are covered in SAMSA’s Code. While regulations aimed at environmental protection should be anticipated from the DFFE, it would be prudent for them to align to the existing SAMSA Code since SAMSA holds jurisdiction on offshore bunkering activities and issues licences to operators.

While SAMSA’s Code for Bunkering Practices permits limited bunker transfer in wind between 25 to 30 knots and only prohibits transfer in wind speeds over 30 knots, the DFFE regulations propose to limit bunker transfer to conditions where the wind force is below 25 knots and where the wave height is below half a metre.

Both SAMSA and the DFFE have stipulated that bunkering should only take place during the day, but SAMSA’s Code does allow for the consideration of night operations when the authority is satisfied that they will not create additional risk. All night-time operations require additional mooring and booming stipulations.

According to the DFFE’s proposed regulations, operators will also have to deploy a towing tug to maintain course during bunkering as well as inflatable booms prior to each bunkering operation; and ensure that secondary booms are on stand-by in the event of a boom failure.

If the DFFE’s proposed regulations are approved in their current form, there will have to be clarity over whether these overrule SAMSA’s operational restrictions or not.

Oil spill response

The proposed regulations gazetted by the DFFE include the stipulation that bunkering can only take place if an oil response vessel is present in the area and that this vessel must be equipped with gas detection equipment that will sound an alarm when the presence of flammable gas or vapour is detected.

SAMSA’s bunkering code also includes the need for a designated standby response vessel for rapid deployment that is equipped with pollution containment equipment.

This idea of a dedicated stand-by oil response vessel has been discussed within the industry, but agreement as to who is responsible for funding such a service does not appear to have been resolved. Given the occurrence of oil spills in the past, the availability of prompt response is necessary, but the cost of mobilising a permanent oil response vessel to the Bay will have to be shared by all operators or provided by the State through additional levies.

According to industry sources, a proposal for a dedicated oil spill response vessel was presented to SAMSA prior to the closing of operations in 2023. “There was absolutely no take up from the authority whatsoever,” reports the proposer, who adds that plans to present the idea to operators were scuppered as the entire operation shut down.

“There are suitable vessels available that can be put to use for this. The opportunity to do it right is now, before we get underway with the multiple transfer operators,” he says.

“We need to be putting in the abatement facilities that are really needed. And that should be at each location where transfers are done, so there's a lot of work to be done,” he believes.

Currently SAMSA requires each operator to appoint their own response team and service level agreements are in place to ensure that the appropriate equipment and vessel response is available.

As more operators enter the sector, the idea to mobilise a dedicated oil response vessel that is capable of towing and deploying booms, rig pipes and skimmers while simultaneously being capable of receiving high volumes of liquid into onboard tanks, could attract more serious consideration.

The industry is pushing to prove that it can deliver economic opportunity and the deployment of such an operation would ensure that bunker operators could extend their services, grow the sector as well as provide added opportunity for seafarers.

In addition, the deployment of a dedicated oil spill response vessel would also provide economic opportunities as well as prospects for skill capacitation. It is interesting to note that the Department of Transport (DoT) is already considering the need to increase the number of standby tugs available along the coast and perhaps stationing one in Algoa Bay would make sense.

Responding to comments during a sitting of the Select Committee on Public Infrastructure and the Minister in the Presidency last week to discuss the Marine Oil Pollution Bill, Dumisani Ntuli, Chief Director, Maritime Transport: Policy and Legislation conceded that assessments conducted during the development of this Bill showed that at least two standby tugs were needed along the coast.

Acknowledging that limited funds were available to institute this, he noted that a dedicated fund for preparedness and response could help address this.

Sounding the alarm on noise pollution

But it is not only oil spills that the DFFE is concerned about. “The draft regulations also aim to reduce noise impacts, encourage wildlife monitoring to mitigate impacts on wildlife,” says George.

The impact of underwater noise pollution from ships came under discussion at the end of January at a workshop aimed at raising the awareness of the issue hosted by SAMSA in Cape Town. Environmentalists specifically noted the impact of ships traffic in Algoa Bay caused by the bunkering operations.

Two of South Africa’s six remaining African Penguin colonies are situated in Algoa Bay and information presented during the workshop showcased an observed 95% decline in the penguin population over the last five years.  

Research to determine whether this could be attributed to increased noise from ships undertaking bunkering in the bay has highlighted a range of factors that could be contributing to the ongoing decline. The notable decline at St Croix prompted Dr Lorien Pichegru to initiate a study in 2019 to investigate the impact of noise from maritime traffic.

Plotting the maritime traffic growth from 2013 to 2020, she highlighted the rapid increase in traffic in 2019 when the third bunker operator entered service. The researchers then estimated the amount of noise generated by this maritime traffic for each ship type in the vicinity of the colony.

They found that the mean annual noise from vessels increased after 2016 and that this strongly correlated to the decline in African penguin breeding pairs over the same period. “We can see that the lowest number of the colony are at the time when the mean annual noise in the Bay was the highest,” she told delegates at the workshop.

Admitting that more research and an understanding of how penguins use communication at sea is needed, she said that they suspected that they use sound to identify prey and other penguins underwater.

“It looks like sound and acoustic communication are probably playing a much more crucial role in penguin survival than we ever suspected before,” she said adding that, if this can be confirmed, then measures to limit underwater noise pollution in Algoa Bay will be needed to preserve the species.

SAMSA’s Bunkering Code of Practice does not address this aspect, but industry is also concerned about the impact that additional ships’ traffic could have. A task force that includes industry stakeholders, academia, environmental organisations, government departments to represent a variety of maritime sectors has been established to discuss the road ahead as the International Maritime Organisation (IMO) issues guidelines to reduce underwater noise.

The DFFE’s proposed regulations, however, prescribe design requirements for vessels that need to comply with the IMO Guidelines for the Reduction of Underwater Noise from Commercial Shipping to effectively reduce underwater noise.

Should these regulations be passed, existing authorised bunker operators will have two years to comply with this requirement.

Limits on the speed of the vessel are included in the DFFEs directives to mitigate noise pollution, but not covered in SAMSA’s Code.

Additional requirements of the DFFE’s regulation include the need to appoint a dedicated person on board to keep constant watch for marine mammals, penguins and turtles for a period of thirty minutes prior to the intended commencement of bunkering and during bunkering.

These sightings will also need to be documented and reported to the department on a weekly basis. The gazetted regulations stipulate that no bunkering can commence if any of these species are sighted within 500 metres of the bunkering site or detected through a sonobuoy system that is required to be installed.

The regulations do not seem to require that operations be halted if any mammal, penguin or turtle enter those 500 metres during the bunkering operations.

Approved environmental plan

While SAMSA’s Code does not refer directly to an Environmental Management Plan, it does require applicants to provide detailed information relating to their capacity to respond to an emergency and refers to the need to understand the country’s National Oil Spill Contingency Plan as well as the structure and requirements of the IMOrg.

There is currently no requirement to have an Environmental Management Plan approved by the Minister, but the DFFE stipulates that no bunkering will be permitted unless the operator has submitted an environmental management plan developed by an independent specialist and approved by the Minister.

Despite many of the requirements of the DFFE management plan overlapping with those on the SAMSA checklist, all authorised bunker operators in service when these regulations come into force, must submit an independent environmental management plan within six months for approval.

It is unclear how these regulations will dovetail with the SAMSA requirements and whether SAMSA will have to update its own Code to include the need to comply with DFFE proposed regulations. The DFFE describes the scope of their regulations as prescribing environmental management measures for offshore bunkering, but in reality, they meander into SAMSA’s jurisdiction by stipulating operational requirements of the vessels as well as imposing a limit on the number of licences SAMSA may issue.

It will be interesting to gauge the reaction from industry and to get an understanding of how SAMSA intends to accommodate these new proposed regulations. Ideally it would be useful to see the two entities collaborate on one set of requirements that clearly identifies issues of jurisdiction.

PHOTO: The Uhambo began providing bunkering services in Algoa Bay this month delivering locally refined oil. Booms are in place during operations and owners, AMSOL, is a trusted service provider to clients in the Energy, Mining, Maritime and Ports sectors, offering highly qualified and experienced marine specialists, fit for purpose vessels and certified equipment. The company’s seafaring talent pipeline reflects its commitment to the development of local skills and competencies; including for tanker operations which requires special endorsement for training and experience.

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