Ship Managers Face Fines over MARPOL Breaches

Ship managers are increasingly being targeted by port authorities for breaches, or suspected breaches, of MARPOL Regulations, reports International Transport Intermediaries Club (ITIC). Writing in the latest issue of its newsletter, Intermediary, ITIC warns that although many of these breaches are due to negligent action by the crew, it is often the ship manager who faces fines or prosecution as a result.

"MARPOL Regulations govern the amount of oil a ship can legitimately discharge into the sea. An increasing number of engineers have been accused, or found guilty, of using the engine room oily water separator improperly, or bypassing it altogether to discharge oil directly into the sea," says ITIC. "In other cases, ships records, particularly the Oil Record Book, have been falsified by the crew."

In some countries, particularly the US, ship managers are regarded as the operators of the ship. Even where it can be shown that it was the actions of the crew that violated MARPOL, it is the owner (or the manager) who is liable and will therefore face a fine. In the event that the ship manager is targeted by the authorities, he should be able to look to the owner for funds to deal with fines and costs. However, according to ITIC, owners are sometimes reluctant to deal with claims involving crew negligence or wilful default if the crew has been selected or directly employed by the manager.

"It is important, therefore, that ship managers contract using BIMCO Shipman 98 or a contract which is very similar," says the Club. "Managers who have their own tailor-made contracts are advised to ensure they include all the necessary provisions including clauses to limit their liability for the actions of the crew."

Ship managers should also note that P&I cover for deliberate, rather than accidental, breaches of MARPOL Regulations by crew is only provided subject to the discretion of the P&I Club's directors. Discretion, however, will not be sought until the matter is concluded.

Managers facing direct action may feel pressurised into pleading guilty to help reduce the fine, particularly if the owner has agreed to cover any costs involved. But beware - admitting responsibility has consequences for other ships under the same management. According to ITIC, the management subsidiary of one owning company, who admitted liability, had to agree to implement a comprehensive compliance programme for 38 other ships under its management.