American-based ship operator, Pacific-Gulf Marine, Inc. (PGM), was sentenced for
deliberate acts of pollution involving a fleet of four ships, in violation of the Act to Prevent Pollution from Ships. U.S. District Judge William M. Nickerson sentenced
PGM to pay a $1 million criminal fine, $500,000 for community service and serve three years of probation under the terms of a rigorous Environmental Compliance Program (ECP), which is subject to court approval.
According to documents filed in court, including a Joint Factual
Statement signed by the company's chief executive officer, PGM admitted
that the ships illegally discharged hundreds of thousands of gallons of
oil-contaminated bilge waste without the use of an oily water separator, a required pollution prevention device. Instead, the ships used secret bypass pipes, sometimes referred to as a "magic pipe," to circumvent the oily water separator.
After learning of the federal investigation, PGM voluntarily disclosed to investigators the results of an internal investigation comprised of approximately 50 reports of interviews with various current and former employees who had worked aboard the four giant "Car Carrier" vessels used to transport vehicles. Many of the interviews contained confessions, admissions or otherwise revealed incriminating information and evidence of illegal conduct, according to documents filed in court.
Both the Department of Justice and the EPA have voluntary disclosure
programs under which a company can seek non-prosecution if it discovers
violations and reports them in a timely manner prior to a government
investigation. Prosecutors advised the court today that while PGM's
cooperation occurred after the initiation of the criminal investigation, it
was nevertheless substantial and warranted significant credit. At the
sentencing hearing today, Judge Nickerson recognized that PGM had provided
significant cooperation in the government's investigation.
Under the terms of the plea agreement, half of the $500,000 community
service payment will fund environmental projects to improve, restore or
study water quality in the Chesapeake Bay in Maryland, while the other half
will fund environmental education for mariners at U.S. maritime schools.
PGM admitted that its shore-side management "failed to provide
sufficient management resources and support to the ships, and also failed
to exercise sufficient supervision and management controls to prevent or
detect criminal violations by its employees." The motive for the criminal
conduct was to save money, according to papers filed in court.
The investigation was conducted by the Chesapeake Regional Office of
the Coast Guard Investigative Service and the EPA Criminal Investigation
Division. Additional assistance was provided by U.S. Coast Guard Sector
Baltimore, U.S. Coast Guard Activities Europe, U.S. Coast Guard Fifth
District Legal Office, Coast Guard Office of International and Maritime
Law, and Coast Guard Headquarters Office of Investigations and Analysis.
The case was prosecuted by the U.S. Department of Justice Environmental
Crimes Section and the U.S. Attorney's Office for the District of Maryland.