alties, to abate or enjoin violations, to clean up discharges or to recover the costs of federal clean-up. That agency, it would appear, should be EPA. Already EPA and the Department of the Army have made excellent progress in this direction with regard to enforcement of the Refuse Act. Their recent memorandum of understanding, 36 Fed. Reg. 3074 (Feb. 17, 1971), recognizes EPA's leading role with regard to Refuse Act violations affecting water quality. There also appears to be a need to bring the Coast Guard into this cooperative arrangement. In at least some districts the Coast Guard not only supervises clean-up of oil discharges under the Water Pollution Control Act, but also, by delegation of authority from the Corps of Engineers, enforces the Refuse Act, sometimes taking the lead in asserting the Government's rights to civil penalties under that Act. All of these activities should be brought under one federal roof so that vessel owners need deal with only one agency, and so that duplicative penal proceedings are avoided. The second problem arisse from the inherent conflict that exists between provisions for civil penalties under the Water Pollution Control Act and Refuse Act, on the one hand, and, on the other hand, the provisions of the Water Pollution Control Act that requires or encourage the reporting and clean-up of oil spills. It is not fair, when a vessel operator reports a spill and then cleans it up, for the Government then to use his words and conspicuous conduct as the basis for assessing penalties. It also undermines the policy of the Water Pollution Control Act to encourage the prompt reporting and clean-up of spills, so as to minimize their damage. Section 11(b) (4) of the Water Pollution Control Act deals with part of this problem by providing that notification of a discharge in compliance with that Act shall not be used in a criminal case against the person giving the notice. Nevertheless, it is now standard practice in some districts for the Coast Guard to assert Refuse Act civil penalties for all discharges from vessels, whether or not a vessel operator was at fault in causing the discharge and whether or not he acted promptly to report the spill and clean it up. Civil and criminal penalties for discharges do not play particularly important roles in the federal program to control water pollution from vessels. The requirements that spills be reported and cleaned up, the provision of liability in rem for clean-up costs, and the federal requirements regarding financial responsi bility are far more useful tools. We would suggest that, in order to encourage prompt reporting and clean-up of spills, Congress should provide immunity from actions for civil or criminal penalties under the Refuse Act or Water Pollution Control Act (not including liability for actual damages or clean-up costs) to anyone who takes prompt action to report an oil spill of which he is aware and who makes all reasonable efforts to contain and clean up a spill for which he is responsible. THE AMERICAN WATERWAYS OPERATORS, INC., Hon. EDMUND S. MUSKIE, DEAR SENATOR MUSKIE: This letter and enclosure are in reference to discharge of hazardous substances from vessels which your Committee is considering. The American Waterways Operators, Inc. (AWO) is the national association representing the domestic water carrier industry, principally the owners and operators of towboats, tugboats and barges on the inland and coastal waters and in the harbors of the United States. AWO's members include the owners and operators of vessels that carry materials commonly considered hazardous substances, as well as the owners and operators of certain terminal facilities that handle these substances. We regret that the schedule of the Subcommittee's current hearings on proposed water pollution bills did not afford time for an oral statement on behalf of AWO. In lieu of such a presentation, we are transmitting herewith a written statement on one subject covered by bills before the Subcommittee that is of particular importance to the domestic water carrier industry: the subject of hazardous substances, other than oil, and the discharge of these substances from vessels. We shall appreciate the inclusion of this statement in the record of the Subcommittee's hearings. Sincerely yours, Attachment: BRAXTON B. CARR, President. ADDITIONAL STATEMENT OF THE AMERICAN WATERWAYS OPERATORS, INC. By BRAXTON B. CARR, President Our comments are directed principally to S. 523. That bill, in section 8, would impose liabilities for the discharge of substances that have been designated as hazardous substances by the President pursuant to section 12(a) and (b) of the Federal Water Pollution Control Act. The liabilities imposed would be absolute and unlimited. The second sentence of section 8 provides: "The owner or operator of any vessel, onshore or offshore facility from which such discharge occurs is liable for any damages, including costs of removal, which result directly or indirectly from such discharge, without regard to negligence or willfulness." (Emphasis added.) WEAKNESSES IN S. 523 We can see several very serious flaws in this proposal: (1) Uninsurable risks.-To the best of our knowledge, it would not be possible to buy insurance against the unlimited and absolute liabilities that the bill would impose. Such insurance appears to be no more available for cleanup liability for hazardous substances than for oil-and, as this Subcommittee is aware, insurance for unlimited and absolute liability is not available for oil spills. On questions of vailability of insurance, AWO and its members must, of course, rely on information provided by their insurance companies and insurance brokers. We have not made a complete survey of the insurance industry. We have, however, begun consultations with industry representatives, and thus far we have heard, without exception, that the proposed absolute and unlimited liability is uninsurable. Mr. Paul Kreuzkamp, vice president of the international insurance brokerage firm of Alexander and Alexander, has authorized us to report that, given the limited capacity of the world's insurance market, absolute and unlimited liability for damages resulting from spills of hazardous substances is uninsurable. Messrs. Nicholas J. Healy and Gordon W. Paulsen, representing the London Group of Protection and Indemnity Associations (which handles approximately 70% of the marine liability insurance of the world) advise that they are unable to predict the amount of liability that may be insurable, but they are firmly of the view that the full liability that would be established under S. 523 is not insurable. They have authorized us to report this to the Subcommittee. The problem, apparently, is not merely that higher risks would mean higher insurance costs (and ultimately higher costs to shippers and consumers.) The problem is that insurance will simply not be available against risks that the bill would create. Passage of the proposed section would, therefore, present the owners and operators of vessels in the waters of the United States with an intolerable choice. Without insurance against all potential liability, they must either put the entire assets of their companies at risk in every carriage of a hazardous substance, or they must refrain from carrying these substances. We cannot predict the actions of individual companies with certainty. It seems clear, however, that many carriers, as a matter of prudent business judgment, would choose not to undertake the unlimited risks that carriage of hazardous substances would entail. (2) Liability regardless of fault.-S. 523 would make a vessel owner or operator liable for any discharge of a hazardous substance from his vessel, whether or not he caused it and whether or not he could have done anything to prevent it. This is fundamentally unfair. Surely if a vessel owner or operator uses all due care to prevent hazardous spills from his vessel, he should not be liable if a spill is caused by forces beyond his control. There should be exceptions from liability in the case of acts of God, acts of war, Governmental acts, and acts of third parties. With regard to acts of third parties, if a vessel containing a hazardous substance is being properly navigated, or is properly anchored, and if a third party's vessel negligently collides with it causing a discharge, it should be the negligent party, not the innocent party, that should be held responsible. (3) Conflicting state and federal laws.—The laws and regulations that govern vessels moving in interstate commerce must comprise a uniform, nationwide system. This is not to say that state laws on hazardous substances must be totally preempted or that state administrative officers should play no role in the cleanup of discharges of these substances. State plans for the prevention and cleanup of such discharges should, however, not go into effect without prior approval by the President or his delegate to insure that the laws of individual states are compatible with the national system of regulation. Nothing in any state's law should be permitted to conflict with the Coast Guard's regulations on the transportation of hazardous substances or with the President's powers under section 12 of the Federal Act to establish cleanup procedures and to conduct cleanup operations. To the extent that state laws impose liabilities in excess of amounts that the Congress finds to be insurable, the state laws should, we think, be preempted. Otherwise the risk of liability under state law would stand as a harsh deterrent to the movement of vessels from state to state. State laws that impose civil or criminal penalties in addition to any provided under federal law should also be preempted. There is also a need to avoid overlap between federal laws. If the Water Pollution Control Act is amended to provide for the payment of damages for discharges of hazardous substances, there should be no penalties assessable under the Refuse Act for the same kinds of discharges. In a statement submitted to this Subcommittee on March 5, 1971, in connection with the Subcommittee's review of federal water quality programs, AWO called the Subcommittee's attention to the fact that a multitude of newly enacted state laws are undermining the federal program to regulate oil pollution from vessels that was created by the 1970 amendments to the Federal Act. We urged that Congress act promptly to bring order out of what is becoming a chaotic situation by providing a unified federal-state system regulating oil discharges. We urge, in the case of other hazardous substances, that the Congress provide at the outset for the development of a unified system of regulation. NEED FOR DATA AS BASIS FOR LEGISLATION Discharges of hazardous polluting substances and their prevention and cleanup present questions far more complex than those involving oil discharges, a subject with which this Subcommittee has dealt in detail for some years. Some of the essential questions that must be addressed in order to lay a realistic groundwork for legislation are the following: (1) What substances are to be regulated?-As yet no substances have been finally designated as hazardous pursuant to the mandate of section 12 of the Federal Water Pollution Control Act. Until the substances are known, it is not possible to know the risks involved and the remedies required. We support the provisions of S. 1014 that require the Administrator of EPA to identify hazardous substances and to report on existing evidence of the effects of their discharge. This seems a necessary first step in devising regulations limiting or prohibiting discharges. (2) What steps to clean up or mitigate discharges are to be required?—Regulations establishing recommended methods of removal have not yet been promulgated under section 12 of the Federal Act. It is difficult even to estimate the amount of potential liabilities for cleanup costs that may be involved, if cleanup methods are unknown. Again, the procedures contemplated by S. 1014 will help illuminate these questions. (3) What insurance is available against liability for discharges?—It may not be possible to answer this question with any certainty until the answers to the first two questions are known. Nevertheless, the Subcommittee will need to hear directly from the insurance industry on this essential issue. (4) Should the Federal Government bear risks that cannot be commercially insured? This question will be squarely before the Congress if, as seems inevitable, unlimited and absolute liabilities are found to be uninsurable. AWO has previously suggested the creation of a federal insurance program to cover losses that are not commercially insurable and cannot be covered in any other way. (5) What information is currently available to Congress on the prevention of hazardous discharges and on cleanup methods and cost?-Representatives of the manufacturers and carriers of hazardous products have worked with the Coast Guard for over five years to identify the hazards of liquid cargoes and to design vessel equipment, tanks and handling systems to transport these substances safe ly. Coast Guard regulations on transporting these substances are in existence and are constantly being revised in consultation with industry. New regulations covering barges came into effect on June 1, 1970. The chemical industry is now implementing a national emergency reporting system to provide prompt action and technical advice in the event of chemical spills. These various measures are having effect. It may never be possible to eliminate entirely the risk that certain cargoes may cause very damaging spills, but such spills are now quite rare. Congress will need information on all of these subjects from manufacturers, carriers and the Federal Government. It is not possible within the compass of this statement to discuss in detail the questions outlined above. These are important questions, however, and they deserve further careful consideration by the Subcommittee. We would urge that, before this Subcommittee acts on the subject of hazardous substances, it hold further hearings to develop facts on which realistic legislation may be based. 59-068-71-pt. 3——4 STATEMENT OF THE AMWAY CORPORATION By JAY VAN ANDEL, Chairman of the Board PHOSPHATES THE CURE WORSE THAN THE DIsease? The Great-Phosphate-in-Detergents-Debate of 1970 has been characterized by a confusing mixture of truths, half-truths, and confusion in much of what has been written and spoken. Separating fact from fiction, and emotion from reason, has not been easy. The goal of clean water is universally accepted, but the proposed means of achieving it are conflicting and often misunderstood. Hasty action to remove some or all phosphates from detergents and to market huge quantities of non-phosphate laundry products in their place will result in playing a game of chemical Russian Roulette with our lakes and streams. Laundry detergents, soaps and other cleaning products are mixtures of a variety of chemicals. Some of these chemicals are organic and more or less biodegradable-that is, they can be consumed by bacteria and converted int, simpler and presumably less harmful substances. Many of the chemicals used are inorganic, soluble in water, and cannot be degraded or consumed by bacteria. Some of these chemicals, such as phosphorus, are natural elements and act as nutrients to plants in the water, such as algae. Very little is actually known today about the total effect on the environment of pouring billions of pounds of any such chemical-organic or inorganic-into our streams and lakes. Public and governmental concern and pressure has brought about a premature substitution of certain new untested ingredients such as NTA for part of the phosphate in some detergents. Manufacturers with considerable reluctance have begun to use small quantities of NTA in place of some phosphate to try to meet the public clamor for immediate action. But recently the use of NTA as a substitute for phosphate has been the subject of widespread concern; yet only a few months ago some ecologists were proclaiming its attributes in the most glowing and unquestioned terms. The effects on the environment of draining huge quantities of this chemical into streams are simply too complex and unknown at this time for anyone to be able to make a sound judgment. Public clamor for action has also spawned the introduction into the market of a number of "non-phosphate" detergents. These products use mixtures of various chemicals that have been used as part of the formulas in various detergents for many years-chemicals such as washing soda, borax, sodium metasilicate, surfactants, and even table salt. One of these new "non-phosphate" products recently introduced to the market contains 45% table salt (sodium chloride) as one of its principal constituents. Now the detergent industry has long known that sodium chloride can be used as a detergent ingredient, although it has no known detergent action; it is merely an inert additive or a bulk filler. But the environmentally concerned consumer who uses such a product is only trading "phosphate down the drain" for "table salt down the drain", thereby possibly trading fresh water for salt lakes. Other "non-phosphate" detergents use large quantities (as much as 60%) of washing soda. This compound, chemically known as sodium carbonate, is not only being utilized in detergents but also in combination with soap as a water softening ingredient. In vast quantities, it might increase the alkalinity of streams and lakes, upsetting the ecological balance by killing microorganisms upon which higher forms of life depend for food. As a result, the entire biological food chain, ending with fish, could be seriously impaired. Table salt can only be removed from waste water at sewage plants through extremely costly distillation plants (such as are used to convert sea water into fresh water). There is no presently known inexpensive way to remove washing soda from waste water during sewage treatment. In order for these chemicals to completely replace the more efficient phosphate, they will have to be used in vast quantities--billions of pounds-if the soap and detergent industry moves entirely away from phosphate formulas to these new mixtures. Non-phosphate, non |