Did IMO ballast delays or Bollfilter battle cause USCG-approved OceanSaver bankruptcy?

Malcolm Latarche
Malcolm Latarche

14 September 2017

One of the first Ballast Water Treatment system makers to gain USCG type-approval has filed for bankruptcy and looks to be bowing out of the arena just days after the IMO Convention finally entered into force on 8 September. Norway-based OceanSaver became the first electrochlorination system to receive USCG type-approval just before Christmas last year. As one of the first three companies to achieve that status, its future might seem to have been assured. However, the company founded by Stein Foss and Aage Bjørn Andersen in 2003 has just filed for bankruptcy according to an announcement on social media by Andersen.
According to Andersen “Internal mismanagement and incompetence combined with a reckless IMO-process eliminating huge markets for many years, have taken its first victim”.
Others commenting on his post put some of the blame on the IMO and the delayed introduction of the 2004 Convention’s requirements at MEPC earlier this year. Andersen and the commentators may well be right, he is after all closer to the company than most but it should not be forgotten that last month OceanSaver lost an arbitration case with Danish Filter maker Bollfilter over a dispute going back to 2010 and was ordered to pay all the costs involved including Bollfilter’s legal fees. The costs have not been publicised but a four-year legal battle does not come cheap and would surely have had an adverse effect on OceanSaver’s finances. The fate of OceanSaver may not yet be fully decided but it highlights several factors that many system makers have chosen to overlook or at least remain silent on. Firstly, the fact that the type-approval process has been shown to be flawed which was the main reason why the shipping industry fought so hard for it to be fixed before the convention came into force. That is not to say that there is anything specifically wrong with OceanSaver’s system or indeed any other but there is plenty of anecdotal evidence of system failings. Another factor that has been given a lot of prominence is the need for US type-approval for a system maker to be successful. As has just been proved this is no guarantee of success. As one of only five approved systems OceanSaver should have been in a market leading position. Certainly, having a system acceptable in all parts of the globe is an essential for some operators, but since only 10% or so of all ships ever call to US ports (and many of those that do are domestic vessels in any case) there is no need for a USCG type-approved system for the rest of the world fleet. Then there is the argument that has been made for nearly two decades, that ships which operate within restricted areas should not need to treat ballast as there is no risk of species transfer. There are many who say that defining same risk areas should have been done in advance of the convention coming into effect not afterwards as is now the case. Finally, it looks as though the shipbuilding boom that centred around the 2004 convention date is well and truly over and not likely to be repeated again. If the level of newbuildings drops to the traditional level of less than 2,000 new vessels per year, then there would be no way that all of the current players in the market could survive. Some early entrants have already withdrawn and it would be a brave man who would predict that more than ten or so will survive beyond the 2024 date when all existing ships must either have been retrofitted or obtained an exemption under the same risk area rules.