Japanese Shipping Company to Pay $350K for Polluting

A Japanese shipping company admitted that it intentionally failed to maintain required records concerning overboard discharges of oil sludge and oil-contaminated bilge water from one of its cargo ships, the U.S. Attorney’s Office, Department of Justice, Coast Guard and the Environmental Protection Agency announced.

MK Shipmanagement Company, Ltd. pleaded guilty to one felony count of intentionally failing to maintain an oil record book, in violation of the Act to Prevent Pollution from Ships, and will pay a total of $350,000 in criminal fines and community service payments.

U.S. District Judge William H. Walls took the guilty plea from the corporation. Sentencing is scheduled for July 18.

Under terms of a plea agreement, MK Shipmanagement Company will pay a $200,000 criminal fine, and an additional $150,000 payment will be devoted to community service. The community service projects, to be administered by the National Fish & Wildlife Foundation, will fund environmental projects in New Jersey.

The announcement of the successful prosecution was made today by Christopher J. Christie, the U.S. Attorney for the District of New Jersey; Sue Ellen Wooldridge, Assistant Attorney General in the Department of Justice’s Environment and Natural Resources Division; Eric J. O’Hearn, Special Agent in Charge, Coast Guard Investigative Service, Mid-Atlantic Region, and Granta Y. Nakayama, EPA's Assistant Administrator for the Office of Enforcement and Compliance Assurance.

Christie noted that the plea follows one last month in the District of New Jersey from a Singapore shipping company, which agreed to pay $6.5 million in criminal fines and community service payments.

According to a Joint Factual Statement agreed to between the government and MK Shipmanagement Company, the Panamanian-flagged M/V Magellan Phoenix (Magellan Phoenix), a MK Shipmanagement Company-owned shipping vessel, left Rotterdam in December 2004 and arrived with a cargo of grapes in Gloucester City in March 2005. The Coast Guard boarded the ship on March 25, 2005, to inspect the ship for compliance with international environmental and other regulations. In the course of their inspection, Coast Guard inspectors learned that the Magellan Phoenix had routinely discharged oil sludge and oil-contaminated bilge water directly overboard into the ocean by intentionally by-passing the ship’s oily-water separator and without recording the discharges, as required, in the ship’s oil record book.

Engine room operations on board large oceangoing vessels such as the Magellan Phoenix generate large amounts of waste oil. International and U.S. law prohibit the discharge of oil-contaminated bilge water without treatment by an oil-water separator, a required pollution-prevention device. Law also requires all overboard discharges be recorded in an oil record book, a required log which is regularly inspected by the Coast Guard.

On Jan. 5, 2006, the chief engineer of the Magellan Phoenix, Noel Abrogar, 61, a citizen of the Philippines, was sentenced to a year in federal prison for falsifying the oil record book in an attempt to conceal the repeated overboard discharges of oil waste from the ship.

Abrogar pleaded guilty on Sept. 7, 2005, to violating the Act to Prevent Pollution from Ships, based on his role in discharging oil sludge and oil-contaminated bilge waste directly into the ocean from the ship and falsifying the ship’s records to cover-up the discharges between December 2004 and March 2005.

This case was investigated by the U.S. Coast Guard Criminal Investigative Service and the Environmental Protection Agency Criminal Investigations Division.

The case was prosecuted by Assistant U.S. Attorney Thomas R. Calcagni of the U.S. Attorney’s Office Government Fraud Unit in Newark and Trial Attorney Joseph Poux, of the Environment and Natural Resources Division of the Department of Justice in Washington.