Shipping Company Pleads Guilty

MARMARAS NAVIGATION LTD, a Greek operator of a fleet of ocean going vessels transporting products around the world, recently plead guilty to a felony violation of the "Act to Prevent Pollution from Ships" for improperly documenting the handling of oily waste aboard the marine vessel ("M/V") Agia Eirini.

MARMARAS pleaded guilty to a felony violation for failing to maintain proper records associated with the ship's handling of its waste oil. If approved by the court, the plea agreement requires that MARMARAS pay a criminal fine of $200,000, develop and implement a comprehensive environmental compliance plan for its fleet of twenty-eight (28) ships that call on United States ports, and serve three (3) years on probation. MARMARAS will deposit an additional $50,000 into an escrow account for the purpose of funding the development, implementation and monitoring of the compliance plan. Up to $100,000 of the fine may be allocated at sentencing to fund one or more projects for the benefit, preservation, and restoration of the environment and ecosystems along the coastline of Washington State. MARMARAS is scheduled to be sentenced by United States District Judge Ronald B. Leighton in Tacoma on July 9, 2004.

According to court records, ships such as the M/V Agia Eirini generate waste oil from a variety of sources, including from the purifying of heavy fuel oil used to power the ship. Like other ships its size, the M/V Agia Eirini possessed equipment to properly handle its waste oil, including an "oil water separator" to process oily water that collects in the lowermost compartments of the ship and an incinerator to burn oily waste. Federal and international laws require that oily waste be burned or processed through the oily water separator so that any water discharged into the sea contains less than fifteen (15) parts per million of oil. Under U.S. law, ships like the M/V Agia Eirini that enter U.S. waters must maintain an "Oil Record Book" to document all transfers of oil on the ship, including discharges to the sea.

The plea agreement and other court records show that U.S. Coast Guard inspectors boarded the M/V Agia Eirini on April 24, 2003, at the Port of Kalama, Washington, to conduct an annual port state control examination. During the course of the exam, Coast Guard personnel discovered a flexible hose fitted with flanges and chipped paint on valves, bolts and the vessel bulkhead in the vicinity of the Oil Water Separator and overboard discharge valve. The inspectors noted that the vessel incinerator appeared incapable of burning all of the waste oil sludge produced by the vessel on a daily basis. Despite repeated efforts, the crew could not demonstrate that the incinerator could handle the amount of waste oil sludge produced by the vessel under normal working conditions.

Court records also show that the entries in the ship's Oil Record Book presented to the Coast Guard inspectors were not consistent with the inspectors' findings. According to the Oil Record Book, engine room crew members operated the incinerator for about twenty hours a day nearly every day for the stated purpose of burning waste oil sludge. The inspectors concluded that the incinerator could not operate for that long, nor could it burn all of waste oil sludge produced by the vessel. Thus, the engine room crew failed to maintain an accurate Oil Record Book in which the disposals of oil residue and overboard discharges and disposal of bilge water were fully recorded.

This guilty plea is the latest in a series of recent federal criminal prosecutions in Washington State targeting both ship engineers and marine vessel operating companies that mishandle waste oil generated aboard ships and/or fail to document how the waste is disposed. In the last eighteen months, five shipping companies and four ship engineers have pleaded guilty in Washington State and agreed to pay a total of $5.2 million in criminal fines associated with their handling and documentation of waste oil disposal while at sea. If the most recent guilty pleas are approved by the courts, a total of eighty-four (84) foreign-flagged cargo ships will be subject to comprehensive environmental compliance plans under the probationary jurisdiction of the federal courts of Washington State.

* In March 2004, HÖEGH FLEET SERVICES A/S, a Norwegian operator of a fleet of 38 ocean going cargo ships, pleaded guilty to 7 felony counts, including obstruction and making false statements to federal inspectors, relating to falsification of records and concealment of evidence of intentional dumping of waste oil into the ocean. If approved by the court at the sentencing on June 29, 2004, HÖEGH FLEET SERVICES will pay a fine of $3.5 million, develop and implement a comprehensive environmental compliance plan for its fleet of 38 vessels that call on United States ports, and serve 4 years on probation.

* In February 2004, VINCENT GENOVANA, a Filipino engineering officer on the M/V Höegh Minerva, a Höegh Fleet Services vessel, was sentenced for a felony violation for falsifying documents and covering up evidence in order to obstruct or influence a United States Coast Guard investigation.

* In July 2003, TA TONG MARINE CO., LTD., a Taiwanese operator of a fleet of ocean going cargo ships, was sentenced for two felony violations relating to the falsification of records concealing the intentional dumping of over 20 tons of oily waste, including sludge and bilge water, into the ocean. TA TONG MARINE was ordered to pay a fine of $750,000, develop and implement a comprehensive environmental compliance plan, and serve four years on probation.

* In March 2003, WANG KI, a Taiwanese chief engineer of the marine vessel M/V Grand Glory, a Ta Tong Marine cargo ship, pleaded guilty to a felony false statement relating to the intentional dumping of waste oil into the ocean.

* In February 2003, UNIX LINE PTE. LTD., a Singaporean corporation, and SPRINGS NAVIGATION S.A., a Panamanian corporation, were sentenced for false statements in their Oil Record Books and Clean Water Act violations for their negligent discharge of oily waste into Commencement Bay. The companies were ordered to pay a collective fine of $750,000, implement an environmental compliance plan for their fleet of 14 vessels that call on U.S. ports, and serve four years on probation. $300,000 of the fine was allocated to several projects to preserve and enhance the marine environment near Tacoma, Washington.

* In February 2003, HYEONG BIN-JEONG, a Korean chief engineer aboard the M/V Kaede, was sentenced to six months in prison for making false statements and Clean Water Act violations.

* In October 2002, CHUN-DO OH, a Korean chief engineer aboard the M/V Ruben Stella, was sentenced to a year in prison for making false statements.