German Company Pays for Not Reporting Hazardos Conditions

A German company has been sentenced to pay a $1 million fine and another $250,000 to support environmental causes after pleading guilty to two felony environmental charges related to a cargo ship that entered the Port of Long Beach last year with an open crack in its hull that may have caused oil to leak into the port.

The company – Herm. Dauelsberg GmbH & Co. KG – pleaded guilty yesterday morning and was sentenced immediately by United States District Judge George H. Wu. The company pleaded guilty to a felony count of failing to maintain accurate records relating to the overboard disposal of fuel oil and to a felony count of failing to report a hazardous condition aboard the M/V Bellavia to the United States Coast Guard.

This case was initiated after four members of the M/V Bellavia crew provided significant information to the United States Coast Guard, including pictures and videos of discharges from a fuel tank into the ocean. Using a federal law that allows a federal judge to award up to half of any criminal fine to “whistleblowers” who provide information concerning certain environmental crimes aboard vessels, Judge Wu ordered that the four crewmembers receive a total of $500,000 from the fine amount.

The M/V Bellavia is a 960-foot-long, Panamax-size ship that normally transports cargo between European, Central American and North American ports. In 2011, the M/V Bellavia sustained cracks in the ship’s hull while transiting through the Panama Canal. On an unknown number of occasions over the past three years, the hull cracks opened to such an extent that seawater could enter one of the ship’s fuel tanks. As a result of the damage, bunker fuel – a heavy, thick fuel oil – could have been released from the fuel tank into the sea.

Herm. Dauelsberg admitted that the M/V Bellavia hit the side of the Panama Canal again last September and sustained a crack that passed through the ship’s hull into a fuel tank. The company also admitted that, after sustaining the crack, the ship’s crew used one of the ship’s pumps to discharge nearly 120,000 gallons of oil-contaminated seawater from the ship’s fuel tank directly into the ocean. That discharge was not done using the ship’s oil-water separator, which is supposed to be used to filter oil out of water that is pumped overboard. The ship’s crew then failed to properly record the discharge in the ship’s records and did not disclose it to the Coast Guard, both of which are required by federal law, when the ship arrived in the Port of Long Beach in October 2013. In addition, the company admitted that it failed to notify the Coast Guard about the hazardous condition aboard the M/V Bellavia, namely, the crack that passed through the ship’s hull into the fuel tank.

After accepting the guilty pleas, Judge Wu sentenced the company to the statutory maximum fine of $1 million and ordered the company to make an additional community service payment of $250,000 to the Channel Islands Natural Resources Protection Fund, which is administered by the National Park Foundation. The community service payment will be used to fund environmental projects, enforcement efforts, and initiatives designed for the enforcement of environmental and public safety regulations.

This case is the result of an investigation by the United States Coast Guard’s Marine Safety Office, the Coast Guard Investigative Service, and the United States Environmental Protection Agency’s Criminal Investigation Division.