Two recent magic-pipe prosecutions by the US DOJ demonstrates the aggressive pursuit of vessel owners and operators whose crews discharge oily water, writes Blank Rome partner Keith Letourneau, reports Riviera.
Violating the US Act
In May 2022, shipmanager Liquimar Tankers Management Services and vessel owner Evridiki Navigation were sentenced in Delaware federal court for violating the US Act to Prevent Pollution from Ships (APPS, the US equivalent of MARPOL, the International Convention for the Prevention of Pollution from Ships ), falsifying vessel records aboard the tanker Evridiki, obstructing justice, and making false statements to the US Coast Guard (USCG).
Liquimar received a US$1.1M fine, Evridiki a US$2.0M, and both companies were placed on five-year probation, subject to the terms of an environmental compliance plan (ECP), including audits by a third-party auditor and probation supervision by a court-appointed monitor.
A US Department of Justice (DOJ) sentencing memorandum noted that both companies refused to fully accept responsibility, despite proof of intentional and wilful misconduct designed to mislead USCG investigators.
In August 2022, shipmanager New Trade Ship Management (New Trade) and the chief engineer aboard the bulk carrier Longshore were convicted of maintaining false and incomplete records relating to the unlawful discharge of oily bilge water without processing through the vessel’s oil-water separator (OWS) equipment.
Both New Trade and the chief engineer pled guilty. The plea agreement calls for a US$1.1M fine and four years’ probation, subject to an ECP and attendant audits. Sentencing is scheduled for 18 November 2022.
The implications for tanker operators are that they face both criminal and civil penalty liability exposure for the acts or omissions of vessel crewmembers relating to the handling of bilge water discharges, no matter where those discharges occur worldwide, as well as the prospect of having their operations monitored for years under an ECP.
The vessel is also liable in rem and may be seized and sold, if necessary. MARPOL Annex 1 generally prohibits the discharge of oil into the seas unless processed through a properly operating OWS unit. While US jurisdiction to enforce APPS/MARPOL violations does not technically extend to foreign-flag vessels operating outside US navigable waters or its exclusive-economic zones, during port-state-control inspections, USCG investigators closely scrutinise vessel oil-record books to ascertain whether any discrepancies exist and examine OWS units to ascertain operability.
Presenting false information to a USCG official constitutes a crime. If the USCG or DOJ suspects criminal conduct, shipmanagers can expect vigorous investigative efforts aboard ship, coupled with significant commercial delays. Evidence can also come by way of cell phone video and audio recordings. Merchant mariners know well that APPS permits the recovery of monetary awards to whistle-blowers who disclose pollution violations.
The APPS includes no defences to liability, save for carrying out discharges through operable OWS equipment. Because US jurisdiction over foreign-flag vessels in these cases is predicated primarily upon disclosures, the accuracy of oil-record book entries and crew candour about the status of OWS equipment is of paramount importance in dealings with USCG investigators. Yet an ounce of prevention is truly the best defence – meaning the installation of reliable OWS equipment and a robust preventive-maintenance programme to ensure continuous operations.
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