Cargo Vessel Operator Pleads Guilty

Wednesday, November 12, 2008

On Nov. 10, Hiong Guan Navegacion Japan Co. Ltd., operator of the commercial cargo ship Balsa 62, agreed to plead guilty in U.S. District Court in Tampa, Fla., to conspiracy and to falsifying and failing to properly maintain records meant to ensure environmental compliance, the Justice Department announced.

Specifically, Hiong Guan agreed to plead guilty for falsifying the oil record book kept on board the Balsa 62. Federal and international law requires that all ships comply with pollution regulations that include the proper disposal of oily water and sludge by passing the oily water through an oily-water separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book, and to have the oil record book available for the U.S. Coast Guard when the vessel is within the waters of the United States.

“Deliberate violations of the environmental laws protecting our oceans will not be tolerated,” said Eileen Sobeck, Deputy Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Hiong Guan agreed to plead guilty today to conspiracy and deliberate falsification of ship records to conceal the illegal discharge of oily waste. This type of criminal conduct is all too frequent and the Justice Department and the Coast Guard will continue to work together to stem the tide of intentional pollution from ships.”

“Environmental crimes such as this adversely impact marine life as well as human life,” stated U.S. Attorney A. Brian Albritton. “The investigation, prosecution and punishment for this disregard of our environment is an important step in protecting our oceans.”

“Marine environment protection is one of the Coast Guard’s core missions and it is important to ensure vessel operators comply with federal laws and environmental regulations,” said Capt. Timothy Close, the Coast Guard Captain of the Port of Tampa, St. Petersburg and Manatee. “This case is an example of why our Coast Guard boarding teams routinely, and randomly, inspect vessels for procedural compliance.”

According to the plea agreement, from June 2007 through February 2008, Francisco Bagatela, the chief engineer of the Balsa 62, directed other crew members and personally participated in the operation of a bypass pipe, also referred to as a “magic pipe,” which was used to circumvent the pollution prevention equipment on board the ship, thereby transferring oily water and sludge directly overboard and into the ocean approximately twice a month.  On Feb. 25, 2008, Robert Racho replaced Bagatela as chief engineer and continued the use of the magic pipe.  Both Bagatela and Racho deliberately concealed these illegal discharges from the U.S. Coast Guard by not recording them in the ship’s oil record book.

On both Oct. 31, 2007, and May 31, 2008, the Balsa 62 arrived in the Port of Tampa with its falsified oil record book.  The Coast Guard conducted an investigation of the ship on May 31, 2008, based in part on information from crew members aboard the ship.  At that time, the officers on board presented the falsified book.  The Coast Guard subsequently located evidence on board the ship corroborating the crew members’ allegation that the ship had been unlawfully discharging oily waste.

The maximum penalties that the company Hiong Guan faces include fines of $500,000 per felony count, a term of probation of five years and a special assessment of $400 per felony count. According to the plea agreement, Hiong Guan has agreed to pay a $1.75m fine and implement a detailed environmental compliance plan, which requires monitoring of its fleet-wide operations over the course of three years.
Francisco Bagatela and Robert Racho, both citizens of the Philippines, pleaded guilty on Oct. 15, 2008, to felony offenses related to the falsification of the vessel’s the oil record book. They each face up to six years in prison, a $250,000 fine, and three years of supervised release years.

The case is being investigated by the U.S. Coast Guard, Coast Guard Investigative Service. The case is being prosecuted by Cherie L. Krigsman, Assistant U.S. Attorney for the Middle District of Florida, Leslie Lehnert, Trial Attorney for the Justice Department’s Environmental Crimes Section, and Lieutenant William George, U.S. Coast Guard.

(Source: U.S. Department of Justice)

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