Tuesday, January 17, 2017

Yet More Million Dollar Penalties for Merchant Ship Polluters

Compensation for US Marine Reef Sanctuary
Shipping News Feature
US – The two Greek shipping companies at the centre of the latest ‘magic pipe’ incident, have been ordered to pay corporate penalties totalling $2.7 million after being convicted for obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses and conspiracy. Each company was ordered to pay part of its penalty to Gray’s Reef National Marine Sanctuary in recognition of the threat posed by illegal discharges of oily waste to the marine environment.

The case stems from an inspection of the M/V Ocean Hope, a 29,513 DWT cargo ship, conducted by the US Coast Guard at the Port of Wilmington, North Carolina in July 2015. During that inspection, Senior Engineers for the companies tried to hide that the vessel had been dumping oily wastes into the ocean for months.

Oceanfleet Shipping, the vessel’s operator, was sentenced to pay a $1,350,000 fine and make a $450,000 community service payment to Gray’s Reef. Oceanic Illsabe, the vessel’s Isle of Man registered corporate owner, was sentenced to pay a $675,000 fine and make a $225,000 community service payment to the reef. Each company was placed on a five-year term of probation and barred from sending ships to United States ports until its financial penalty has been satisfied. Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division, said:

“We are pleased with the substantial penalties imposed by the court, which reinforces that pollution doesn’t pay. We will continue to protect United States ports and waters, and uphold our treaty obligations, by vigorously prosecuting companies that dump oil at sea and then try to mislead US Coast Guard inspectors with false statements and documents.”

The operation of commercial marine vessels generates large quantities of waste oil, oil-contaminated waste water and oil sludge. International and US law forbid the discharge of oily wastes into the ocean. Should any overboard discharges occur, they must be documented in an official oil record book that is regularly inspected by the US Coast Guard and similar authorities in other countries.

The evidence given at this trial demonstrated that the companies maintained a lax ‘paper’ compliance regime focused on avoiding liability rather than adequately training and supervising Engineers. The companies failed to follow their own environmental policies and also ignored important red flags, such as the vessel’s failure to offload oil sludge for many months and its rare use of the pollution prevention device, the oil-water separator. The regular dumping of tonnes of bilge water into the ocean continued for at least six months.

In addition, and on at least two occasions, Senior Engineers conspired to connect a flexible hose, known in the industry as a ‘magic pipe’, to discharge tonnes of heavy oil sludge. The most recent discharge occurred in June 2015, as the vessel headed for United States waters. Coast Guard inspectors and laboratory testing confirmed the presence of heavy oils in the vessel’s overboard discharge piping.

When the Ocean Hope arrived at the Port of Wilmington, the companies’ Engineers ordered subordinates to lie to Coast Guard Inspectors and to conceal evidence. The vessel’s Chief Engineer presented Inspectors with a doctored oil record book, in which false accounts of the ship’s production and disposal of oily wastes were recorded. Attorney John Stuart Bruce for the Eastern District of North Carolina, commented:

“Our office was pleased to partner with the Department of Justice’s Environment and Natural Resources Division in this significant case and, pleased that the corporations responsible for this pollution were held accountable. We will continue to vigorously enforce federal laws designed to prevent the pollution of the world’s oceans.”

Though managed from Greece, the ship is registered in Liberia and the company had no significant assets besides the Ocean Hope, which was sold for scrap shortly after the indictment of this case. Oceanic and Oceanfleet are believed to be closely affiliated companies controlled by the same corporate principles out of Athens, Greece. During the period when the vessel in question was dumping oil into the ocean, Oceanfleet managed between ten and eleven vessels.

The vessel’s two top Engineers were previously convicted and sentenced to serve prison sentences in connection with these crimes.