Why Comply?

Friday, November 12, 1999
Shipowners are constantly faced with ever-changing laws and guidelines they must abide by. If they don't adhere - or even are not aware of these environmental requirements and regulations - they may not only risk losing their upstanding place in the maritime industry, but could face stiff fines and possibly even jail time. Ever since the Exxon Valdez oil spill disaster in 1989, vessel owners and masters have since become wary of already-established and new guidelines (such as OPA '90) exerted by IMO and SOLAS for safe and clean waters. Everyone from captains on the largest cruise ships in the world - to the master of a small tugboat fall into this category. But, alas, there are always a few who think they are above the law or are just - in plain English - negligent in their decisions. Ears were most likely ringing in the maritime industry as members of both these groups were discussed at the Maritime Law at the Millennium Conference on Tuesday, November 9. Held at the Yale Club of New York City and sponsored by Haight Gardner Holland & Knight, a law office of Holland & Knight, the conference's afternoon session highlighted current issues occurring within Maritime Compliance. Moderated by Brian D. Starer, a partner at Holland & Knight's New York office, discussions, which at times were controversial, focused on why (even though the law does not require it) vessel owners should implement a compliance program. In his discussion, "What is a Compliance Program and How Can it Benefit a Shipping Enterprise?" John M. Hogan, who practices in the litigation area at Holland & Knight's Miami office, stated why a compliance program works in favor of vessel owners. "Shipowners need a compliance program to reduce the risk of criminal prosecution," said Hogan. "Under OPA 90 and the Clean Water Act, shipowners are being held criminally liable for negligent or inadvertent discharge of pollutants." Contrary to popular belief it is not always the employee who actually commits the crime who will be held responsible, but the individual's immediate supervisor or upper management. Whether it is a deckhand or in the case of the Exxon Valdez incident, the ship's master, who performs the actual deed, it does not mean that those holding upper-level positions will be immune. According to United States v. Hanousek, __ F. 3d __ (9th Cir., March 19, 1999), "Supervisory employees can be Held Criminally Liable for the Negligent Act of Their Lower Level Employees that Result in Oil Spills." "It's a question of who is responsible," said Hogan, who served as chief of staff to the Attorney General of the U.S. from 1995-1998. "The natural instinct of any prosecutor is to go to the top of the organization." Environmental incidents, whether by accident or in some cases, deliberate will not go unnoticed and will be sure to instill dire consequences on those owners who don't consider negligence a crime. The recent high-profile case involving Royal Caribbean Cruises (RCCL) was among the cases that were discussed at the conference. RCCL was charged and pleaded guilty to 21 federal felony counts, which included the dumping of waste oil and hazardous materials. In addition, RCCL was also charged with lying to the U.S. Coast Guard. As a result, the company, which did not have an implemented compliance program at the time of the incident, was ordered to pay a record $18 million fine and was placed on probation for three years and was also required to establish a company-wide compliance program of which it must operate under for the next five years under court supervision. Having to install a compliance program per court order may not seem as much of a punishment, but according to Steven P. Solow, chief U.S. Justice Department of Justice Environmental Crimes Section, "it's better to develop your own program than have someone design it for you." Solow stressed that compliance depends on the shipowner who is the resource in working to establish an effective program now, not when your company is in jeopardy of being black-listed. "It's in everyone's best interest to have compliance programs in effect now - not when you're facing criminal charges," Solow said. Although no one can predict that every vessel will be trouble-free - even with a compliance program -an effective compliance program may reduce culpability. "If you have an effective compliance program and something goes wrong," Solow said. "The court may not consider prosecuting." - (Regina P. Ciardiello)

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