Maintain Your ORB

Wednesday, July 02, 2008

The US Court of Appeals for the Fifth Circuit ruled that the federal government may prosecute a ship owner and chief engineer, under the Act to Prevent Pollution from Ships (APPS), for failure to properly maintain an oil record book (ORB) when the ship entered a US port with an ORB onboard that the chief engineer knew to contain false material entries.  In the instant case, defendant chief engineer on a ship owned by defendant shipowner, allegedly directed the discharge of oily waste water from the ship on the high seas without making entries in the ORB required by MARPOL.  The ship entered ports of the United States on eight separate occasions before the US Coast Guard discovered the fraudulent entries.  The chief engineer and the shipowner were then charged with conspiracy, making a false statement to the Coast Guard, and eight counts of knowing failure to maintain an ORB in violation of APPS.  Only the eight counts under APPS were in dispute here.  The defendants contended that the failure to maintain the ORB occurred when the ORB entries were made and that happened on the high seas, outside the jurisdiction of the US.  The government contended that “maintenance” of an ORB is a continuing duty to keep it accurately.  Otherwise, the ability of the port state to fulfill its obligation under international law to enforce MARPOL against ships calling at its ports would be frustrated.  The appellate court reversed the ruling of the federal district court and adopted the government’s argument that there is a continuing duty to maintain the ORB such that it does not contain known false material entries.  Note: This decision has potentially broad implications for the marine industry.  Previously, a shipowner and chief engineer were only likely to be prosecuted for actually “presenting” a falsified ORB to the Coast Guard during a port state control boarding.  Now, they are subject to prosecution for each US port call from the time an ORB is falsified until either the ORB is corrected or the ORB is officially retired (three years after the last entry in that particular ORB).  With chief engineers changing every six months or so and ships changing owners/operators on a regular basis, it is unclear at this time how this new doctrine of expanded obligation will develop.  If nothing else, it enhances the importance of due diligence and having a formal compliance program.  United States v. Jho, No. 06-41749 (5th Cir., June 30, 2008). - HK Law

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