Sunday, November 13, 2016

Coasting license refusal

The Canadian Transportation Agency is tasked, among other things, with reviewing applications for coasting licenses. They then make recommendation to the Minister of Public Safety and Emergency Preparedness, in whose name the licenses are issued.
As reported in a previous Shipfax :
a potential shortage of refined petroleum in the Toronto area was to be averted by Algoma Tankers bringing in the Isle of Man registered Edzard Schulte to supplement its own fleet.
Their application to the CTA was to be "fast tracked" to ensure no interruption of fuel delivery.
This was only one of nearly 70 applications of coasting licenses so far this year for eastern Canada. Many of the applications (about 30) were for specialized vessels such as oil rigs, offshore support and cable ships that just do not existing under the Canadian flag. The Minister may issue a coasting license if no suitable Canadian vessels is available, and so most of the applications go through without delay.
There were about seven applications for crude oil tankers, two for acid tankers and two for asphalt tankers. If there were suitable Canadian ships for this work, none were apparently available. There were also about 7 applications for product tankers, and similarly, suitable Canadian vessels were not available.   
When Algoma applied to use the Edzard Schulte it would have been safe to assume that the CTA would recommend for the license.
However there was an objection filed by CSL. This is not Canada Steamship Lines, but Coastal Shipping Ltd of Happy Valley - Goose Bay, Newfoundland and Labrador, part of the Woodward Group.
The operate Canadian flagged tankers, which were offered as suitable for the work Algmoa had in mnind. After a lengthy explanation, CTA agreed and declined to recommend Algoma's application.
During the summer months Coastal Shipping's tankers are busy in the arctic, but that season has ended and they have both Travestern and Sten Fjord available during the period Algoma wanted to use Edzard Schulte.
Algoma contended that the oil majors they work for have internal regulations for which the Coastal Shipping tankers are not compliant. The CTA however was of the opinion that the internal regulations were not relevant to the application. This seems an odd ruling on the surface since scores of other CTA applications are granted on the basis of specific requirements of the ship's end users. However CTA states that these are regulations do not supersede Canadian law.
Certainly an interesting development.
Read the CTA's decision here:


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