A leading cruise industry group said it will terminate an agreement with the state that limits air and water emissions next year, raising concerns among environmentalists about the possible pollution of Hawai'i's coastal waters.

The North West Cruiseship Association said it will end on Dec. 31 the voluntary agreement it signed with the state in October 2002. The association said a new state law regulating cruise ships makes the previous agreement unnecessary.

Environmentalists argue that the 2002 agreement covers more ocean area than the new state law and that ditching the agreement would leave at least some Hawai'i waters between islands unprotected.

"Loosening the standards would just be a bad idea," said Teri Leicher, managing partner of Jack's Diving Locker in Kona on the Big Island. "It's not just business we're worrying about; it's our children and our friends and ourselves — we're in that water, too."

The cruise ship association said the industry is committed to preserving Hawai'i waters and the new state law provides "good protection." In addition, NCL America, the largest cruise operator in Hawai'i and a member of the association, said it will continue to follow the old, more restrictive agreement despite the association's action.

"Absolutely nothing will change," said Robert Kritzman, NCL executive vice president and managing director.

Still, environmentalists were disappointed to see the memorandum of understanding, or MOU, be terminated.

The agreement is "the weakest tool you could use, but at least it was something," said Marti Townsend, program coordinator of the Hawaiian Environmental Alliance, Kahea. "Now we've got even less than that. ... Usually what happens is the regulations grow with the industry, but it's not happening in this case."

Environmental groups, including Kahea, have been pushing for enforceable state regulations rather than just a voluntary agreement but complained that the new law, while establishing penalties, doesn't go far enough to protect Hawai'i waters. The legislation became law without Gov. Linda Lingle's signature this year.

"This is probably the worst of both worlds because now we don't have even a memorandum of understanding nor do we have a very strong law to protect coastal waters," said Jeff Mikulina, director of the Sierra Club Hawai'i chapter.

David Skedeleski, an avid surfer and owner of SurfCo Hawaii, said: "It's unfortunate that there's this attitude that we don't trust big businesses like cruise lines. But unfortunately we have a history of them dumping illegally. I wish we could say, 'The guy's got integrity and won't do it.' But there's just been too much evidence of these businesses not being responsible."

Kritzman said NCL will continue to abide by the agreement because it provides more environmental protection than the new state law.

"We always supported the MOU because it went further than the jurisdiction of the state," Kritzman said.

"The reason the MOU was terminated by the association is that we have federal law that regulates us and now we have state law in place and you simply can't work with three, four, five different regulatory schemes."

The Sierra Club's Mikulina said the 2002 agreement covers more types of wastewater than the new law, which doesn't regulate, for example, gray water, such as water from dishwashers and sinks.

"We had hoped that the MOU would continue to be in effect because it does cover more area than the statute," said Tom Arizumi, chief of the state Department of Health's environmental management division.

Arizumi said any one party can withdraw from the 2002 agreement after giving 90 days notice.

The association, in a Sept. 12 letter to Lingle, said it will end the agreement "to avoid any ambiguity and operational confusion that could be caused by the provisions of the MOU and federal and state standards."

John Hansen, president of the Vancouver, British Columbia-based North West Cruiseship Association, said the association is "transitioning" out of the agreement because "it doesn't really work to have two sets of rules."

"We respect the legislation and that's what will prevail," he said. "The statute carries more weight, and the statute is legally enforceable. And it will take priority over any other agreement."

Hansen said he expects some companies to continue under the standards in the agreement and that the new law — as did the agreement — provides good protection for Hawai'i waters.

"We are dedicated to the preservation of really high quality standards of Hawai'i waters and the record over the last few years will show that. And we'll continue to do that," he said.

Arizumi said a benefit of the new law is that it provides for penalties. He said the department is working on establishing fines for violations by the end of July.

"We're just trying to see how well the statute works in ensuing years and would recommend changes if we find any deficiencies in the law," Arizumi said.

But Mikulina of the Sierra Club is skeptical.

"They've been saying all along that they're going beyond the law in protecting Hawai'i's waters," he said, "but if they're not willing to do the basic steps that are outlined in the MOU and they don't want to deal with that, then I think that's pretty telling."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.