In 2002 in the United States, there were at least ten prosecutions of vessel cases, resulting in 21 guilty pleas – ten for companies and 11 for individuals^¹. Eight of the 11 individuals were either detained for a lengthy period of time in the US or sentenced to jail for a period ranging from three months to one year. The other three individuals have yet to be sentenced but are likely to spend time in jail. The fines paid by the ten companies exceeded US$25 million, plus almost every company was required to implement a court-supervised environmental compliance plan (ECP), which generally involves millions of dollars more. The majority of the cases brought in 2002 focused on falsifications of oil record books and bypassing of oil-water separators^².

Of particular note was the case brought against M/V Khana and M/V Sohoh/Boyang Maritime, Boyang Limited, Oswego Limited and Trans-Ports International. Four companies that operated and managed the freighters pleaded guilty in Alaska and paid a $5 million fine relating to bypassing oil-water separators, falsification of logbooks and obstruction of justice; the captain of the Khana and two chief engineers pleaded guilty to false statements, obstruction of justice and witness tampering and were sentenced to six months, six months and eight months in prison; a member of the board of directors and two senior shoreside managers also were indicted for conspiracy and obstruction of justice for their roles in bypassing oil-water separators and encouraging crew members to lie about it.

This disturbing trend continued into 2003, with seven vessel cases already prosecuted and many others being investigated.

Despite the number of prosecutions, the significant fines and unprecedented prison sentences, vessel owners and operators are seemingly not doing enough to avoid prosecution

The 2003 prosecutions include the following:

1. Star Evviva (Star Shipping) – January, South Carolina. Billabong II ANS, a Norwegian company that owns the M/V Star Evviva, pleaded guilty to discharging a harmful quantity of oil into the ocean. Billabong and two of the ship’s officers were charged in connection with a 23,000 gallon oil spill off the coast of South Carolina. Billabong’s plea agreement requires the company to pay fines totalling $500,000. The former ship’s captain and chief engineer were indicted for conspiracy to obstruct justice, making false statements, and violations of the Clean Water Act. Billabong terminated both officers’ contracts following the incident and they are currently considered fugitives.
2. Ever Group (Evergreen Marine) – March, Washington. Evergreen was fined $67,500 by the state for spilling 500 gallons of oily waste from the Ever Group, a containership. The vessel operator denied responsibility for the spill and did not report it or respond to it. The lab analysis of the oil and fuel samples taken from ships and facilities in the area, however, confirmed that the oily waste came from the Ever Group. The DOJ and the Coast Guard are in the midst of a major criminal investigation.
3. M/V Grand Glory – April, Washington. Ta Tong Marine Co.Ltd, a Taiwanese operator of theGrand Glory, pleaded guilty to making false statements and failure to maintain proper records associated with the ship’s handling of waste oil. If the plea agreement is approved, Ta Tong will pay a fine of $750,000, will be required to implement a comprehensive ECP and will serve four years on probation. The chief engineer also pleaded guilty to making false statements and admitted in the plea agreement that he directed the engine crew to discharge over 20 tons of oily waste through a bypass hose into the ocean, and to falsify records to conceal the illegal discharges. The chief engineer faces up to five years’ imprisonment and $250,000 in fines.
4. M/V Grumant(Grid Odessa Ltd) – May, Oregon. The operator of the cargo ship pleaded guilty to one felony count of violating the Act to Prevent Pollution from Ships, was fined $275,000 and was placed on probation. The charges resulted from a Coast Guard investigation which began when theGrumantentered port to load. At that time, investigators found evidence that waste water had been dumped overboard. According to the Coast Guard, the Grumant’s oil log indicated that the ship had lawfully incinerated its oily waste; however, the onboard incinerator was not functional.
5. SS Juneauand SSTrinity(Sabine Transportation ) – July, Iowa. Sabine pleaded guilty to eight counts of illegal dumping of waste materials, including oily water, contaminated grain and plastics, from SS Juneau and SS Trinity and for failing to maintain required records. Sabine was fined $2 million and required to implement an ECP.
6. Muskegon Clipper – August, Washington. The captain of a ferry boat was convicted of conspiracy and violations of the Ocean Dumping Act and APPS and sentenced to two years in prison and three years of supervised release, as the ‘person responsible’ for dumping trash bags full of asbestos and renovation debris into the Gulf of Mexico, the Pacific Ocean and the Caribbean. The crew was carrying out demolition work to convert the ferry into a riverboat gambling casino. The asbestos removal costs were estimated to be $600,000 to $1.7 million. Witnesses reported that ‘hundreds’ of bags were dumped overboard.
7. M/S Hoegh Minerva – September, Washington. The chief engineer pleaded guilty to obstructing the US Coast Guard’s investigation of intentional dumping of waste oil into the ocean. According to the plea agreement, the chief instructed crew members to construct a ‘magic pipe’ that was subsequently used to bypass the oil-water separator and took steps to conceal evidence of the bypass activity from US Coast Guard inspectors by removing and hiding the bypass pipe, painting the pipe connections in the area where the bypass had been installed and making false and fraudulent entries in the vessel’s oil record book.
8. Fairmont Shipping – November, Oregon. Canadian shipping company Fairmont Shipping Ltd. pleaded guilty to discharging oil in the Pacific Ocean in violation of the Act to Prevent Pollution from Ships. The Emerald Bulker’s current and former chief engineers also were indicted in connection with the discharges. The company was sentenced to four years’ probation and ordered to pay $450,000 in fines. In addition, Fairmont will be required to implement an environmental compliance plan and submit to monitoring by third-party inspectors. A crew member aboard the ship informed authorities of the illegal discharges and was awarded half the fine under the US Whistleblowers Protection Act.
9. Norwegian Cruise Lines – December, Florida. Three cruiseship engineers employed by Norwegian Cruise Lines (NCL) were indicted for conspiracy to use false oil record books to conceal illegal discharges without the use of a properly functioning oil-water separator. Another engineer aboard the vessel who reported the illegal conduct to authorities was awarded $250,000 pursuant to a bounty provision in the Act to Prevent Pollution from Ships. In 2002, NCL pleaded guilty and paid a $1 million fine plus $500,000 in community service.

CONCLUSION

The trends discussed above are disturbing and the maritime industry has been put on notice that countries throughout the world will not tolerate pollution. The prosecutions discussed above have ranged throughout the world and throughout all corners of the United States. The prosecutions have also covered almost every type of vessel – from ferries to tankers to car carriers to general cargo ships to cruiseships.

As criminal enforcement continues to gain momentum throughout the world and the threat of criminal liability increases, the maritime industry must recognise that failure to comply with environmental laws places their companies and employees at risk of criminal prosecution, which includes significant fines and imprisonment. It is critical that the industry understands the controlling laws and enforcement mechanisms in the countries in which it does business and takes aggressive steps to ensure compliance.

1. In the United States, owners and operators must be sensitive to the protections and awards offered to whistleblowers through various statutes, including the Act to Prevent Pollution from Ships and the Sarbanes-Oxley Act.
2. These cases included the following: M/T Kaede, Unix Line PTE Ltd and Springs Navigation; Norwegian Cruise Lines; M/V Rubin Stella; Guadalupe/OMI Corporation; Alkyon/lonia Management; Cygnus/Fujitran Corporation; Carnival Corporation; M/V Asahi (Fairport Shipping).