Prevention of Pollution By

A selection of articles previously Prevention of published by Gard AS pollution by oil 2

Introduction 5 Shipping industry guidance on the use of Oily Water Separators Ensuring compliance with MARPOL 6 Clearing of shore pipelines following cargo operations at terminals 8 US Pollution - California Certificates of Financial Responsibility (COFR) Requirements 10 Australian Pollution Law – Oil Pollution Indemnity Clause for Penalties and Fines 11 Limitation of liability for pollution clean-up costs in China 13 The silent sentinels – Increased use of remote marine pollution sensors 15 New Greek marine pollution legislation 17 New wine from old wineskins? - Current efforts to retrieve oil from sunken vessels 19 Australia toughens pollution laws 21 New Pollution Regulations in China - FAQs II 22 Charterers’ pollution liability in Brazil 24 Perfecting pollution prevention? - The State of Washington enacts a new statute 26 The state of environmental crime enforcement in the US 27 US law – Criminal prosecutions of MARPOL violations 32 ICS/ISF guidance on environmental compliance 34 Oil and water don’t mix 35 Environmental Crime – Myths and Reality 36 Oily water separation and discharge: Risk of oil pollution versus vessel’s safety 37 The finer points of oil pollution 40 US Coast Guard formal policy on voluntary disclosure of MARPOL violations 43 Oily water separator bypass in the US - The tables are turned 44 US law - MARPOL violations in the US 45 Environmental crime - Oily water discharge off the East Coast of Canada 46 Pollution - The hard line taken by the French criminal courts on oil discharge from ships 47

Disclaimer

The information contained in this publication is compiled from material previously published by Gard AS and is provided for general information purposes only. Whilst we have taken every care to ensure the accuracy and quality of the information provided at the time of original publication, Gard AS can accept no responsibility in respect of any loss or damage of any kind whatsoever which may arise from reliance on information contained in this publication regardless of whether such information originates from Gard AS, its shareholders, correspondents or other contributors.

This booklet contains a collection of etc., are deliberate in the sense amount of oil spilled in the event of loss prevention material relating to the that the discharge is intended (and an accident (e.g. segregated ballast prevention of pollution by oil, which permitted by the relevant legislation), tanks, protected location of fuel tanks over the years has been published by however, because the amount of and double hull). Although the greater Gard. pollutant contained in the discharged volume of the oil spilled can be linked liquid exceeds the permitted amount, to tanker incidents, commercial vessels Discharges of oil from shipping, this results in the discharge being other than tankers also contribute to offshore extraction of oil, and transport performed negligently. Such discharges oil pollution and MARPOL Annex I of oil in pipelines is the result of either can be avoided. contains the required safety measures accidents or “normal”, deliberate to prevent and minimise also this type operational discharges. Accidental The most important regulations of discharges (e.g. specific requirements discharges (oil spills) may occur when governing the prevention of pollution for discharge of oil residue (sludge) and vessels collide, are in some sort of by oil from ships are contained in bilge water form machinery spaces). distress at sea (engine breakdown, the International Convention for fire, explosion), run aground, or when the Prevention of Pollution from Although all aspects related to the there is a blowout of an offshore oil Ships (MARPOL) Annex I and cover prevention of pollution by oil are not well, or when a pipeline breaks. Much prevention of pollution by oil from covered in this compilation, and local can be done to avoid accidents, operational measures as well as from authorities may have additional, and but there will always be unfortunate accidental discharges. With seaborne sometimes stricter, requirements than circumstances and situations that give oil trade growing steadily since 1970, those contained in MARPOL Annex rise to accidents. Operational (i.e. non- apart from a fall in the early 1980s I, this compilation will hopefully be a casualty-related) discharges often arise during the worldwide economic useful aid in providing guidance, some during routine bunkering operations recession, the aim of many of the safety answers, or at the very least a pointer and are usually caused by negligence/ measures included in MARPOL Annex in the right direction when it comes to lack of care. Other operational I is to ensure that the majority of oil prevention of pollution by oil. discharges, e.g. discharge of bilge tankers are safely built and operated, water, fuel oil sludge, tank washings and are constructed to reduce the

The global shipping industry is Ensuring compliance with MARPOL • Implementing the periodic testing committed to a zero tolerance Shipping companies should: of the oil discharge monitoring approach to any non-compliance with • Ensure that the ISM Safety equipment the International Convention for the Management System* is used to Prevention of Pollution from Ships good effect • The use of cleaning agents (MARPOL). In particular, the industry consistent with equipment is committed to strict adherence to • Conduct internal and external capability. International Maritime Organization audits on environmental (IMO) requirements concerning the compliance and act upon the Control devices use of Oily Water Separators and the findings, in full compliance with the Shipping companies should consider: monitoring and discharge of oil into the ISM Code • Fitting uniquely numbered sea. environmental tags on flanges to • Require accountability on prevent unauthorised by-passing National maritime authorities with environmental compliance issues responsibility for the environmental within the shore-side and shipboard • Using seals on overboard valves protection of their coastlines quite management team and cross-connections properly adopt a similarly strict approach to the enforcement of MARPOL. • Minimise waste leakage through • Installing strategically placed good housekeeping and placards concerning compliance Companies and seafarers need to maintenance with MARPOL on board ship understand that even the most minor • Make the best use of the available violations of MARPOL will be detected technology • Fitting surveillance cameras by the authorities. In addition to large fi nes amounting to literally millions of • Establish a realistic operating • Using tamper resistant recording dollars, both company management budget for environmental systems, alarms and printouts and seafarers can be liable to criminal compliance to verify equipment operation, prosecution and imprisonment for valve position, flow, OWS ppm, any deliberate violation of MARPOL • Provide meaningful and targeted incineration, ship’s position etc. requirements or falsifi cation of records. training in environmental awareness and MARPOL compliance • Installing locked boxes or cages The following industry guidelines over monitoring equipment are intended to highlight some of • Provide specific and targeted the issues concerning the use of oily training in oily water separator • Fitting interlocks to prevent water separators (OWS) and to remind (OWS) operation falsification of monitoring company management, and shipboard equipment inputs personnel, how they can act to prevent • Recognise the value of open MARPOL infringements. communication with the crew • Using meters to record equipment running time for all engine room Ship operators have ultimate • Verify compliance through pumps. responsibility for establishing a appropriate physical inspection, compliance culture within their operational tests and document Management approaches companies, and it is important that every analysis Role of shore management effort is made to ensure that seafarers Shipping companies should: do not engage in any illegal conduct in • Reward compliance and address • Assign environmental responsibility the mistaken belief that it will benefit potential non-compliance. to senior management and ship their employer. Every seafarer should superintendents, Masters and Chief be made fully aware of the severe legal Technical approaches Engineers on board ships consequences, both for the company and General the seafarers themselves, of even minor Shipping companies should consider: • Ensure adequacy of internal audits non-compliance with environmental rules. • Installing the latest equipment, or and implementation of corrective an upgrade in capability, if existing actions At first glance, the following advice equipment does not perform to may appear to contain nothing new; requirements • Review maintenance records for the vast majority of shipping and procedures, log entries and companies, these are issues which • Upgrading related equipment to handover notes should already be fully addressed by minimise the production of waste their Safety Management Systems, as • Monitor workloads imposed by the required by the International Safety • The advantages of the pre- operation and maintenance of oily Management (ISM) Code. Nevertheless, processing of waste water separators, and assess the it is strongly recommended that the impact on crew priorities following guidance is carefully analysed • Increasing tank capacity for waste by company management, and that a where possible • Analyse waste streams to firm message of zero tolerance of non- determine content, volume, means compliance with MARPOL is circulated • Modifying systems to facilitate in- and capacity for storage, and as widely as possible amongst seagoing port testing of treatment systems estimate realistically the cost of personnel. treatment and disposal

© Gard AS, December 2013 7 • Ensure that the operating budget • Promote awareness that recorded in the handover notes of for waste removal and spare parts is any attempt to circumvent the responsible engineer and the adequate MARPOL requirements is totally Chief Engineer unacceptable • Establish comprehensive check lists • Record the independent for inspections/audits • Determine the most appropriate verification of the correct operation procedures to maintain equipment of the oil discharge monitoring • Verify that tests have been and systems equipment performed to ensure the continued correct operation of oily water • Minimise and if possible • Raise awareness of the need for separators eliminate leakage through good an open chain of command and housekeeping accurate record keeping that can • Discuss findings and concerns be substantiated with Port State with all levels of the engineering • Correctly maintain the oil record Control. department book (ORB) and the record of discharges of oily water separator Tracking waste and maintenance • Explore the potential gains from effluent into the sea The Master, Chief Engineer and senior the installation of new technology. officers in the engine department should: • Ensure that all routine shipboard • Conduct analyses of waste disposal Training and ISM safety meetings include records Shipping companies should: time to discuss a specific agenda • Ensure that training, whether item on environmental matters • Compare waste output to volumes shipboard, in-house or from an purchased outside authority, is specific on • Use sign on/off check lists for duty relevant MARPOL requirements personnel. • Compare waste disposal records with maintenance records • Consider supplementary training Use of Oily Water Separators on MARPOL issues The Master, Chief Engineer and senior • Remove disincentives to off-loading officers in the engine department should: waste, or purchasing additional • Document the training and assess • Instruct users of OWS equipment material or parts related to safety its relevance and verify the standard achieved and the environment.

• Establish formal policy documents • Verify that maintenance schedules The following publications may also be and procedures on MARPOL are being followed helpful: compliance and training. *Guidelines on the Application of the • Ensure that audits include IMO International Safety Management Audits and inspections operational tests and a (ISM) Code (published by ICS/ISF) Shipping companies should: reconciliation of records †Guide for Correct Entries in the Oil • Ensure that audits target the correct Record Book (published by Intertanko). operation and maintenance of oily • Ensure that scheduled tank water separators sounding logs are maintained and Shipping industry guidance on the use of signed for Oily Water Separators • Ensure that audits are designed Published by Maritime International to investigate environmental • Keep records of verification of Secretariat Services Limited compliance correct operation through testing at 12 Carthusian Street sea London EC1M 6EZ • Use a comprehensive audit check list and try to investigate beyond • Ensure that on board spares are Tel +44 20 7417 8844 the check list adequate to meet the demand [email protected] www.marisec. org/ows • Conduct unannounced inspections • Create a culture where complacency in operation First edition 2006 • Verify: and maintenance standards is These guidelines have been developed - routine maintenance unacceptable. using the best information available, - internal record keeping policies but they are intended for guidance only, - the accuracy of records by cross- Record keeping to be used at the users’ own risk. No referencing The Master, Chief Engineer and senior responsibility is accepted by any firm, - the progress of training officers in the engine department should: corporation or organisation who or which - that written policies are available • Ensure that all entries in the tank has been in any way concerned with sounding log, ORB (oil record the furnishing of data, the compilation, • Test equipment under routine book†) and incinerator logs are publication or authorised translation, operational conditions completed by the crew member supply or sale of this guidance, for the who performed the task accuracy of any information or advice • Interview crew members given herein, or any omission herefrom • Ensure that the ORB is examined or consequences whatsoever resulting • Produce written audit reports and signed by the Chief Engineer directly or indirectly from use of these and/or the Master guidelines or from compliance with or • Conduct post-audit meetings adoption of guidance contained therein. • Require signatures from those • Ensure senior management review conducting overboard discharges An electronic version of this leaflet is the audit reports and operational tests available at www.marisec.org/ows • Track audit findings until corrective • Ensure that ship familiarisation action is complete. procedures verify that company environmental policy and The role of senior management on operability of equipment are board the ship understood and followed General The Master, Chief Engineer and senior • Require the status of pollution officers in the engine department should: prevention equipment to be

Introduction and background Over the years, Gard has seen some extensive structural damage incidents as a result of overpressure in the liquid cargo tanks during loading operations. Such damages result in time consuming and costly repairs and unfortunately, for reasons unknown, the frequency of such incidents has increased, despite ship procedures addressing the risks involved. order to minimize the risk of pollution evident that enforcement of good and damage to the cargo tanks during communication between the involved In Gard’s experience such incidents cargo operations involving clearing of parties prior to and during the entire often occur during the loading shore pipelines. operation is a key factor in order to operation phase when shore pipelines prevent incidents. The following should are being cleared, either by line Reducing risks related to shore pipeline therefore be observed: blowing or by pigging1. In one such clearing operations The immediate incident, failure to maintain close causes of any damage are gas being Planning and responsibilities communication with the terminal and supplied at a too high pressure All cargo operations must be carefully a lack of ship personnel’s attention compared to the capacity of the ship’s planned and documented well in to and awareness of the hazards tank vent system arrangement; or that advance of their execution. The details related to an unattended open the amount of cargo being pushed of the plans must be discussed with manifold valve during shore pipeline into the ship’s cargo tank is too large all personnel, both on the ship and at clearing operations seem to be the compared to the tank ullage available, the terminal and the manner in which main causes. After the completion of or the cargo coming at too fast a responsibility is to be shared between 2 loading of one tank and initial clearing rate. The root causes are, however, the ship and terminal must be agreed . of the line, the terminal requested the often complex and may involve lack re-opening of the manifold valve for of detailed planning of the overall The Master or Responsible Officer further blowing of the cargo line. The operation, lack of communication should ensure that ship’s personnel line was then left open and the ship between the parties involved during the assigned duties during the cargo reportedly did not receive any further operation, and personnel having a lack operation are made aware of the information from the terminal. Some of training and awareness of procedures hazards associated with pipeline five hours after the request for the applicable to the actual operation. clearing operations. re-opening of the manifold valve, a “bang” was heard on deck and cargo The procedure for clearing shore A pre-cargo operation meeting was seen emitting from the tank vent. pipelines between the shore tank and between personnel responsible for The results were significant damage to the ship manifold will depend on the the operation from ship and terminal the transverse bulkheads between the facilities available at each terminal and should confirm all critical interface tanks and cargo mixing between tanks. the type of cargo loaded. Ship and parameters, including those important terminal procedures will address all in the pipeline clearing operations3. The purpose of this circular is therefore relevant aspects of the cargo and line to highlight the main issues involved in clearing operations but it has become

Hazards to be aware of Parameters to be discussed in pre-cargo operation meeting: - pressure surges in line - stages at which the line clearing will be carried out - tank overpressurization - notice period required by the ship prior to line clearing operations - dramatic increase in the filling rate - propelling medium to be used - cargo tank overflow due to excess cargo - length and size of the shore line - cargo tank overflow due to entry of - time required for a pig to travel along the line compressed gas - pressures and venting capacity of the ship’s reception tank - volume of residual cargo in the line and the amount of ullage space available in the ship’s reception tank - capacity of the vapour return line to shore - amendments to the cargo operation plan as a result of pipeline clearing operations, including volumes available for topping off - communication routines during the entire operation

Specific hazards that the ship’s - Hazards to be aware of: Prior to the Gard strongly recommends that only personnel should be aware of and commencement of the cargo operation, properly trained and experienced related interface parameters to be and in order to raise awareness, personnel is assigned duties related discussed with the terminal during the specific hazards associated with to operation of ship manifold valves pre-cargo operation meeting are listed pipeline clearing operations should be during pipeline clearing operations. below. communicated to the ship’s personnel who are assigned duties during the Precautions and procedures operation. Footnotes At the commencement of loading, and 1 Pigging is a form of line clearing in at each change of watch or shift, the - Parameters to be discussed in the which an object, most often in the form Responsible Officer and the Terminal pre-cargo operation meeting: Through of a rubber sphere or cylinder and Representative should each confirm the pre-cargo operation meeting, the known as a “pig”, is pushed through that the communications system for responsibilities, time frames and critical the line by a liquid or by compressed the control of loading is understood by interface parameters, including those gas. A pig may be used to clear the line them and by the personnel assigned important for line clearing operations, completely, in which case it will usually duties during the cargo operation. should be agreed between the be propelled by compressed gas, or to Responsible Officer and the Terminal follow a previous grade to ensure that Precautions and procedures requiring Responsible. Specific communication the pipeline remains as free of product special awareness by the ship’s routines to be adhered to during as possible, in which case it is likely to personnel are presented below. the actual operations should be be propelled by the next grade. During the operations, there should be established. 2 Gard’s Guidance to Masters continuous and direct communication Ch.2.12.3.4 could be useful reading in between the terminal and the ship until - Precautions and procedures this respect. the operation has been completed and requiring special awareness by the 3 See also Ch.11.1.15 of the all valves have been closed. ship’s personnel: Precautions and International Safety Guide for Oil Tanker procedures during cargo operations and Terminals (ISGOTT) 5th Edition. Recommendations should ensure that all ship manifold Procedures for cargo operations valves are kept closed unless specific should be reviewed to ensure that the operations that require open valves correct procedures are followed when are ongoing, that each operation is dealing with shore pipeline clearing continuously monitored by responsible operations. A key issue in order to personnel, and that there is direct prevent incidents is the enforcement of communication between the terminal good communication, both prior to and and the ship until operations have been during the entire operation. completed and all valves have been closed.

Precautions and procedures requiring special awareness by the ship’s personnel:

- avoid using tanks that that are loaded close to 98% as reception tanks for line clearing - add a safety margin when estimating required ullages for reception tanks, this to take account of the potential for inaccurately declared “pigging quantities” - consider to include provisions for a standby cargo tank to be lined up and ready to be opened - keep manifold valves closed during idle periods - ensure that the vapour return line to shore is open during the operation (when available) - throttle the main manifold valve as required - monitor the manifold pressure closely - monitor the available amount of cargo tank ullage space and pressure in tank - during freezing weather conditions, inspect tank vents (P/V valves) at regular intervals - close manifold valves immediately (in agreement with the terminal) once a pig has reached its receiver/trap, this to avoid compressed propelling gas entering a loaded cargo tank - report immediately any abnormalities or deviations from existing procedures

Member Circular No. 3/2013 US Pollution - California March 2013 Certificates of Financial Responsibility (COFR) Requirements Members are requested to note the Members are also advised that the Any questions with regard to the above relevant provisions in the CA Code thirty (30) and ninety (90) day timeframe may be addressed to Sara Burgess, of Regulations (CCR) on evidence required for self-certifying renewal with Gard (UK) Limited; Knut Goderstad, of financial security and renewal the P&I Club and the timeframe for Gard AS or Frank Gonynor, Gard (North procedures for CA certificates of providing the renewal documentation, America) Inc. financial responsibility (COFRs) i.e. the CoE – are replaced with a single published by the Californian (CA) timeframe of forty-five (45) calendar Office of Spill Prevention and Response days following expiration of the P&I **** (OSPR) and currently effective. Club coverage to submit all necessary documentation including the CoE. Yours faithfully, Before operating in CA marine waters, GARD AS tank and non-tank vessels are required Members should contact the Manager/ to submit their certificate of entry (CoE) Association should they have any at least ten (10) calendar days prior to queries regarding any of the above. operating or entering these waters, in order to apply for a CA COFR. This circular supersedes the Circular Claes Isacson This requirement supersedes the issued in January 2012 No 16-11. Chief Executive Officer requirement to submit the CoE at least three (3) working days prior to entering All Clubs in the International Group of CA waters. P&I Clubs have issued similar circulars.

Member Circular No. 2/2013 Australian Pollution March 2013 Law – Oil Pollution Indemnity Clause for Penalties and Fines In October 2012, an International Group awarded against either party in respect recommended charterparty clause was of any proceedings instituted against ANNEX drafted to address the concerns raised them for the imposition of any fine OIL POLLUTION INDEMNITY CLAUSE by owners and charterers in respect or other penalty, in circumstances set FOR PENALTIES AND FINES of the amendments to Australian out in subparagraph (b), irrespective (a) Subject to the terms of this legislation introducing increased of whether any fine or other penalty is Charterparty, as between Owners penalties for pollution from ships and actually imposed. and Charterers, in the event of an damage to the Marine environment. oil pollution incident involving any Since the recommended clause was • Indemnity in the event of contributory discharge or threat of discharge of circulated to Members, there have fault oil, oily mixture, or oily residue from been further developments in relation The proviso to subparagraphs (b) i. and the Vessel (the “Pollution Incident”), to the Australian legislation and further ii. has been amended to specifically Owners shall have sole responsibility for consideration of the wording of the address the consequences of liability responding to the Pollution Incident as recommended clause, which has arising in circumstances where there may be required of the vessel interests been updated as attached and further is contributory fault on the part of by applicable law or regulation. explained below; the party seeking indemnity. The amendment restricts the amount of the (b) Without prejudice to the above, as Increase in the amount of recovery where there is contributory between the parties it is hereby agreed penalties fault, provided this is not prohibited that: On 28 December 2012, a new under the law governing the charter regulation came into force in Australia party. i. Owners shall indemnify, defend and escalating the monetary value of hold Charterers harmless in respect financial penalties for Federal offences. The recommended clause and of any liability for criminal fine or civil The increase in penalty unit valuations is explanatory notes are attached. penalty arising out of or in connection only applicable to offences committed with a Pollution Incident, to the extent on or after 28 December 2012. This Circular supersedes Member that such Pollution Incident results from Circular No. 10-12 issued on 23 October a negligent act or omission, or breach The changes affect fines calculated on 2012. of this Charterparty by Owners, their penalty units, such as fines imposed servants or agents, under the Protection of the Sea Act Should Members have any questions 1983, which imposes fines ranging from they should contact the Managers in ii. Charterers shall indemnify, defend 500 penalty units to 20,000 penalty units the normal way. and hold Owners harmless in respect for the offence of discharging oil or oily of any liability for criminal fine or civil mixtures into the sea. All Clubs in the International Group of penalty arising out of or in connection P&I Clubs have issued similar circulars. with a Pollution Incident, to the extent Under the previous penalty unit that such Pollution Incident results from calculation, this resulted in maximum Any questions with regard to the above a negligent act or omission, or breach fines of AUD 2.2 million for an individual may be addressed to Helenka Leary in of this Charterparty by Charterers, their and AUD 11 million for a corporation. Gard (UK) Limited and Arne Sætra in servants or agents, Under the new penalty unit calculation, Gard AS. the applicable maximum fines are now provided always that if such fine or AUD 3.4 million for an individual and penalty has been imposed by reason AUD 17 million for a corporation. Yours faithfully, wholly or partly of any fault of the party GARD AS seeking the indemnity, the amount Amendments to the International of the indemnity shall be limited Group recommended clause and accordingly and further provided that explanatory notes the law governing the Charterparty does not prohibit recovery of such fines. • Legal/Defence costs Claes Isacson A new subparagraph (b) iii. has been Chief Executive Officer iii. The rights of Owners and Charterers inserted to address the concerns under this clause shall extend to that prosecution legal costs and/or and include an indemnity in respect expenses might be passed onto the of any reasonable legal costs and/ defending party. Subparagraph (b) or other expenses incurred by or iii. clarifies that the indemnity in the awarded against them in respect of any recommended clause extends to the proceedings instituted against them recovery of any reasonable legal costs for the imposition of any fine or other and/or other expenses incurred by or penalty in circumstances set out in

© Gard AS, December 2013 12 paragraph (b), irrespective of whether Under the clause, owners have against them for the imposition of any any fine or other penalty is actually overall responsibility for responding fine or other penalty in circumstances imposed. to a discharge or threat of discharge set out in subparagraph (b,) irrespective of oil, oily mixture or oily residue of whether any fine or other penalty is (c) Nothing in this Clause shall prejudice (subparagraph (a)). This is in line with actually imposed. any right of recourse of either party, or the Australian legislation and with the any defences or right to limit liability international compensation regime. The indemnity in this clause will not under any applicable law. respond to the situation where the The indemnity in subparagraphs (b) i. pollution or threat of pollution is (d) Charterers shall procure that this and ii. is designed to protect owners entirely caused by a third party’s act, Clause be incorporated into all sub- and charterers by incorporating an without involving any act of the owner charters and contracts of carriage equal indemnity by the party whose or of the charterer, but where the owner issued pursuant to this Charterparty. negligent act or omission, or breach or charterer still incurs the penalty or of chartererparty, causes pollution or fine under the new Australian law. threat of pollution. EXPLANATORY NOTES The clause only addresses the specific It is understood that, under the revised The proviso to subparagraphs (b) (i) situation of criminal fines and civil Australian law, charterers can be strictly and (ii) ensures that club cover is not penalties, not civil liability which is liable for penalties and fines imposed prejudiced on the grounds that liability within the sphere of the Conventions. on them as a result of a pollution has been contractually assumed by or threat of pollution caused by the virtue of the clause in circumstances Any right of recourse of either party, act or negligence of the owner (e.g. where there may not be an underlying defence or right to limit is preserved navigational error). Conversely, owners legal liability. The proviso restricts the under subparagraph (c). can be strictly liable for penalties and amount of recovery where there is fines imposed on them as a result contributory fault. The recovery of fines Subparagraph (d) is designed to ensure of a pollution or threat of pollution under the clause is also subject to such that the same recovery and indemnity caused by the act or negligence of the recovery not being prohibited under provisions apply where there is a charterer (e.g. unsafe berth). As this the law governing the charterparty. charterparty chain. involves circumstances beyond owners’ and charterers’ control, a charterparty The indemnity in this clause extends clause is recommended to achieve the to the recovery of any reasonable legal effect that whoever causes the Pollution costs and/or other expenses incurred Incident should bear the criminal fines by or awarded against either party in or penalties through indemnification. respect of any proceedings instituted

Gard News 211, August/ Limitation of liability for October 2013 pollution clean-up costs in China

In the recent case of Jiangmen There were also claims for search and The owners also cited various judicial Maritime Safety Administration of rescue fees, and costs for setting up interpretations and judicial guidances PRC v. the Owners of M/V ZEUS navigation warning equipment. These to demonstrate that the limitation the Supreme Court of the People’s claims were settled amicably outside under the CMC should be applicable to Republic of China (PRC) held that the the court proceedings. this case. costs incurred in cleaning up bunkers spilled from a vessel which is sunk, The claim for clean-up costs in the MSA Jiangmen’s main arguments wrecked, stranded or abandoned shall court of first instance (GMC) MSA Jiangmen argued that Chinese law not be subject to limitation of liability The owners’ main arguments does not have specific provision for this in accordance with Article 207 of the In the first instance trial, the owners particular claim, so it should either not Chinese Maritime Code (CMC). The argued that the clean-up costs should be subject to limitation or be subject to facts of the case are as follows. be subject to the limitation provided for limitation under the CLC 92. under Article 207 of the CMC. Facts In addition, MSA Jiangmen argued that, On 24th September 2008, Typhoon Article 207 of the CMC states that although they signed various contracts Hagupit caused the M/V ZEUS to except as provided otherwise in Articles with clean-up vessels and vehicles, MSA run aground off Shangchuan Island, 208 and 209 of the CMC,1 with respect Jiangmen should be deemed to have Guangdong, China. As a result, the to the following maritime claims, the entered these contracts on behalf of the bunkers on board spilled from the person liable may limit his liability in owners. Since the fee rate was agreed vessel and caused oil pollution. All the accordance with the CMC, whatever the in these contracts, the owners should crew members died or went missing. basis of liability may be: not have the right to limit liability.

After the incident, the Jiangmen “(1)Claims in respect of loss of life or MSA Jiangmen also referred to Article 9 Maritime Safety Administration (MSA personal injury or loss of or damage to of the Provisions of the Supreme Court Jiangmen) sent various local fishing property including damage to harbour on Several Issues Concerning the Trial boats and vessels from other MSAs to works, basins and waterways and aids of Ship Collision Cases, effective from conduct the clean-up operations. The to navigation occurring on board or in 23rd May 2008 (the 2008 Provisions),2 final clean-up costs incurred were more direct connection with the operation and argued that the pollution in than RMB 10 million (around USD 1.63 of the ship or with salvage operations, this case was not different from the million). as well as consequential damages pollution caused by a ship which is resulting therefrom; […] sunk, wrecked, stranded or abandoned On 21st October 2008, the owners resulting from a ship collision accident of the ZEUS applied to Guangzhou (4) Claims of a person other than the in terms of its nature and consequence. Maritime Court (GMC) for constitution person liable in respect of measures of a limitation fund (in the amount of taken to avert or minimise loss for which Article 9 of the 2008 Provisions provides SDR 796,256, around USD 1.22 million) the person liable may limit his liability that for claims in respect of the re- for the maritime claims arising from the in accordance with the provisions of floating, removal, destruction or the said accident, including the claim for this Chapter, and further loss caused by rendering harmless of a ship which is the clean-up costs. such measures. sunk, wrecked, stranded or abandoned due to the collision, as well as the MSA Jiangmen raised objection to the All the claims set out in the preceding cargo on board, the responsible party constitution of the limitation fund by paragraph, whatever the way they are should not be able to limit its liability in the owners but the GMC dismissed lodged, may be entitled to limitation accordance with the CMC. this objection. MSA Jiangmen then of liability. However, with respect to the registered the clean-up claim under the remuneration set out in sub-paragraph MSA Jiangmen’s reasons for applying limitation fund and filed a claim with the (4) for which the person liable pays the CLC 92 to the ZEUS (a non-tank GMC for the total clean-up costs. as agreed upon in the contract, in vessel) are as follows: relation to the obligation for payment, About 40 local aquatic breeders also the person liable may not invoke the – The 2001 Bunker Convention should registered their claims for loss of provisions on limitation of liability of this not have retrospective application, income under the limitation fund. Later, Article.” as the convention came into force in these local aquatic breeders filed claims March 2009 and the incident occurred before the GMC. The owners argued that Article 207 (4) in 2008. should be applicable, since the owners Regarding the wreck and bunkers signed no contracts with the parties – Even if the 2001 Bunker Convention remaining on-board the vessel, the participating in the clean-up operations. could be applicable, the convention owners entered into a wreck and bunker In addition, Article 207 (1) could also be itself did not state which should be removal contract with a local company. applied. the limitation amount or whether this The wreck/bunker removal fee was paid particular claim should be subject to as per the contract. limitation of liability or not. According

© Gard AS, December 2013 14 to Article 6 of the convention, an China: the practical implications of the implications there will be in practice to answer should be found under Chinese ZEUS decision remain to be seen. future pollution incidents in China. law. The Supreme Court – MSA Jiangmen did not think that Shortly after the GHC issued its Footnotes the CMC limitation of liability could be decision, a judgment was issued by 1 Article 208 mainly refers to other applied to this case based upon the Qingdao Maritime Court (QMC). In kinds of limitation or claims not subject above arguments. that case, Yantai Maritime Safety to limitation, such as the limitation Administration (MSA Yantai) organised under the CLC 92 and claim for general – Hence, the only limitation the owners clean-up operations by sending vessels average contribution. Article 209 could refer to under Chinese law would (as per agreed fee rate) to take part in mentions that a party will lose the be that of the CLC 92. As the limitation an oil clean-up after a collision incident right to limit liability if he committed amount under the CLC 92 is much (which resulted in a vessel sinking gross negligence or wilful misconduct. higher than that of the CMC and actual and spilling oil). Similarly, the owners Articles 208 and 209 have no relevance clean-up costs, this limitation is in fact established a limitation fund in the to this case. meaningless for the owners. QMC and MSA Yantai claimed against 2 Article 2 of the 1976 LLMC states that the owners for the clean-up costs. The subject to Articles 3 and 4 the following The GMC’s decision QMC determined that the clean-up claims, whatever the basis of liability The GMC upheld the arguments costs should be subject to limitation may be, shall be subject to limitation of of MSA Jiangmen and ruled that under the CMC. Although China does liability: the matter should not be subject to not adopt the doctrine of judicial (a) claims in respect of loss of life or limitation of liability under the CMC. precedent, the owners of the ZEUS personal injury or loss of or damage to The GMC also thought it would be added this decision to their arguments property (including damage to harbour unfair if the owners were allowed to when appealing to the Supreme Court. works, basins and waterways and aids limit their liability in spite of the fact to navigation), occurring on board or in that owners did nothing in the clean-up The Supreme Court, while deciding that direct connection with the operation of operations (there was no doubt that if the clean-up costs in the ZEUS case the ship or with salvage operations, and the owners had done something, like should not be subject to limitation of consequential loss resulting therefrom; appointing clean-up companies or staff, liability under the CMC, overturned the (b) claims in respect of loss resulting they would not be able to limit liability). GMC’s and GHC’s findings that MSA from delay in the carriage by sea of Jiangmen could enter into clean-up cargo, passengers or their luggage; Comments on the GMC’s judgment contracts on behalf of the owners. (c) claims in respect of other loss Chinese law does not state that in resulting from infringement of rights this case MSA Jiangmen had the The Supreme Court in fact formed a other than contractual rights, occurring right or authorisation to sign clean- new theory to apply Article 9 of the in direct connection with the operation up contracts on behalf of the owners. 2008 Provisions to this case. The of the ship or salvage operations; Since the right of an administrative Supreme Court’s logic analysis goes as (d) claims in respect of the raising, bureau (such as MSA Jiangmen) should follows: removal, destruction or the rendering expressly be provided in law, the harmless of a ship which is sunk, GMC’s decision in this respect may be – As per Article 9 of the 2008 Provisions, wrecked, stranded or abandoned, incorrect. In addition, the owners had the claims in respect of the re-floating, including anything that is or has been no information about these contracts removal, destruction or rendering on board such ship; before the litigation. harmless of a ship which is sunk, (e) claims in respect of the removal, wrecked, stranded or abandoned destruction or the rendering harmless The nature of clean-up operations and or claims in respect of the removal, of the cargo of the ship; rendering harmless of a ship should of destruction or rendering harmless of (f) claims of a person other than the course be different. In fact, in this case, the cargo on board the ship should not person liable in respect of measures in order to render the wrecked ship be subject to limitation under the CMC. taken in order to avert or minimise harmless (i.e., disposing of the bunker loss for which the person liable may remaining on board and the wreck – In the ZEUS case, although the limit his liability in accordance with this itself), the owners had already entered bunkers spilled from the vessel (or the Convention, and further loss caused by a contract with a local company and wreck), it should still be considered as a such measures. appointed it to carry out the bunker part of the wreck. The CMC applies most of the 1976 and wreck removal work. LLMC. Unfortunately, (d) and (e) are – Therefore, cleaning the spilled not included in Article 207 of the CMC Fairness should not be an issue in bunkers should be deemed as (dealing with which kind of claims could this dispute. The GMC should have rendering harmless of the wreck and be limited under the CMC), so the CMC followed the CMC and correctly the owners should not be able to enjoy only has four items under Article 207. At interpreted it. limitation of liability under the CMC. first, there were a lot of disputes over whether the claims of (d) and (e) should The appeal to Guangdong High The Supreme Court obviously took a be limitable under the CMC. Then, Court step forward by widening the definition the Supreme Court issued the judicial The above comments were added of a wreck. interpretation in 2008, which expressly to the statement of appeal filed at stated that the “rendering harmless” the Guangdong High Court (GHC), Conclusion costs could not be subject to limitation in addition to the main arguments The ZEUS is an interesting decision of of liability under the CMC. What the raised by the owners during the GMC’s the Supreme Court on an issue that had Supreme Court did in the ZEUS case proceeding. Unfortunately, the GHC not been considered by it previously. was simply to widen the definition of did not overturn the GMC’s judgment It now remains to be seen how the what constitutes a wreck. and held almost the same opinions as lower courts will apply the principles those of the GMC. established in the judgment and what

In this era of increased vigilance in the or setting. These units can even be detection of marine pollution, there fitted with flotation, and be deployed have been various efforts by both like buoys, in both inshore waters and government and industry to ensure offshore settings. The sensitivity of the detection of hydrocarbon spills, as well units can be adjusted, so that alerts are as to enhance spill response. This has only sent for higher concentrations of included the use of varied technologies, hydrocarbons, or kept highly sensitive. including aerial detection of floating oil, use of infrared/ultraviolet cameras The use of non-contact optical scanning to allow for spill detection at night, technology means the unit keeps clean the increase in sophistication of oily and requires little maintenance. The water separators aboard ships, and camera settings can be set up so that, the matching of spilled pollutant if an attempt is made to cover the lens, to the point of source through the an alarm will be transmitted, to thwart employment of precise “chemical vandalism or deliberate masking of an fingerprinting” of samples in a ongoing pollution, and if fitted with a laboratory. video camera, the identity of persons trying to interfere with the device can The further mechanisation and be detected. automation of these efforts has been a driver of this theme. One recent These devices could greatly enhance example in major spill events has the detection of pollution incidents in been the use of small drone aircraft port areas, as well as aboard ships and and watercraft,1 and even satellites, offshore facilities. They can also be all of which can survey large areas of “Slick Guard” environmental placed in remote locations where it is ocean and shoreline continually, for monitoring platform for offshore, impractical to have persons on watch, many hours or even days, controlled coastal, ports and harbour applications. particularly at night. Such devices never remotely by an operator, at a distance grow tired, do not miss things, and on the ground at a control centre, All photos courtesy of InterOcean always report timely. The cost of the viewing things via an audio/video Systems Inc., San Diego. devices, when amortised over time, are telecommunication link. far lower than having workers observing Once a pollutant is detected there an area on a continuous basis, freeing Remote sensors may be an alarm, either visual or a such workers to perform more critical A more recent development, which klaxon, and transmission of a report functions. focuses on spill detection at more about the detection to ship crew localised areas, is the now more or dock personnel, either nearby or It also allows a redundancy of spill widespread use of remote pollution hundreds/thousands of miles away, detection efforts, avoiding gaps in sensors that offer continuous via text message, e-mail, or voice observations of a particular area. It monitoring for pollution at a fixed message, using one or more modes allows shore-side managerial staff, point. These weatherproof units use of telecommunication – radio, data or at long distances from a dock, ship optical sensors aimed downward at phone line, mobile phone, Wi-Fi or or facility, to be aware of pollution a patch of water within a small radius satellite. events quickly, gain valuable time in of the unit. Within the sensors, a high activating response plans, and ask power Xenon lamp is used to produce Implications a verification that personnel on the a high-energy light beam which will The implications of this technology scene are detecting spills and acting cause any oil present in the target are far-reaching. Incidents of pollution appropriately after they are spotted. area to fluoresce and emit light of its in a restricted area, e.g., the side of characteristic wavelengths. a ship or dock, a marina or harbour By getting the very early detection that area, the deck of a ship or facility, these devices offer, pollution response The cameras can detect extremely can be immediately detected and can be instituted more quickly – and it minute quantities of hydrocarbons (+/- then instantaneously reported to is clear that the earlier one can respond 3 microns in thickness) floating upon, or local personnel, who can rush to the to a pollution event, the greater the even slightly below, the surface of the scene and verify the situation, or sent odds for a more contained, less serious water within the range of the unit, in a to supervisory personnel across the situation. radius up to 10 metres from the device. planet. This can occur day or night, on a 24-hour basis, in any weather

© Gard AS, December 2013 16 Limitations Footnotes Of course, no technology is perfect, 1 See article “No place to hide – The and these devices can have limitations. expansion of remote surveillance of The units themselves could break, shipping activity” in Gard News issue or power interruptions could impair No. 206, May/July 2012. their function (although such units might be fitted with batteries/solar panels to allow for this contingency). A telecommunications issue could prevent the news of a pollution event from being transmitted to a remote recipient.

Also, it must be said that some workers Typical mounting platform for harbour might resent the presence of an and terminal pier applications. automated “spy” in their workplace, and in the case of a spill caused by human error, might attempt to block detection by the unit with some form of tampering or interference.

The units can only detect hydrocarbon pollutants in highly localised zones. This could mean that in the case of a non-hydrocarbon pollutant being emitted, the device would fail to report it. Or, if a large amount of pollution occurred, but for some reason did not flow or float within the range of the device’s camera, that, too, would go unreported.

Conclusion All in all, the increase in use of these sophisticated “silent sentinels” means that the gaps in detection of pollution in specific docks, terminals, ships, marinas, offshore facilities or other particular areas could be narrowed to almost nil, making for higher detection rates and increased number of reported incidents, eventually leading to a cleaner environment. Example of a loading pier.

Gard News 207, August/ New Greek marine October 2012 pollution legislation

Law 4037/2012 has recently been precautions have been taken after the The new law established criminal passed in Greece, implementing occurrence of the damage, or discovery penalties in the case of discharges due Directive 2005/35 EC (on ship-source of the discharge, for the purpose of to gross negligence or recklessness as pollution and on the introduction of preventing or minimising the discharge, follows: penalties for infringements) and Council and under the condition that the owner a) Imprisonment from six months to Framework Decision 2005/667JHA. or Master did not act with intent to five years and pecuniary penalty from cause the damage, or recklessly and EUR 1,000 to EUR 15,000, in cases of Scope of application with the knowledge that the damage significant pollution that causes risk Law 4037/2012 deals with the would probably result (Regulations 4.2 to human life, or risk of severe bodily discharge by ocean-going vessels of of Annex I and 3.1.2 of Annex II). damage, or of wide environmental the substances referred to in Annex disturbance or disaster; I and II of MARPOL (oil and noxious From the above it would appear that b) Imprisonment from three months to liquid substances) in the following accidental pollution in internal waters five years and pecuniary penalty from geographical areas: or territorial sea of an EU member state EUR 200 to EUR 3,000 in all other single - internal waters and the territorial sea is not exempted, contrary to MARPOL pollution incidents and also in case of of any EU member state; Regulations. repeated minor discharges which in - straits used for navigation subject conjunction result in the deterioration in to the regime of transit passage over Criminal penalties the quality of sea water. which any EU member state exercises Law 4037/2012 provides severe jurisdiction; penalties of imprisonment and fines However, if the party responsible for - the exclusive economic zone of any not only to crew members but also to a negligent discharge significantly EU member state; any other person that has contributed minimises the pollution or contributes - the high seas. to a punishable discharge, either to that effect by promptly notifying the wilfully or by gross negligence, without authorities, the above penalties may be Violations exempting accidental pollution (as reduced or even dismissed altogether. Any discharge, wilful or not, operational provided in MARPOL). or accidental, is considered an Discharges caused by simple infringement of the law and results in The court may impose the criminal negligence (i.e., not gross negligence the imposition of penalties, except if penalties (reduced as per the provisions or recklessness) are not punishable it is permissible under the following of the Greek Penal Code) against any under Law 4037/2012. MARPOL Regulations: person whatsoever, in addition to the - 15 of Annex I, regulating operational actual perpetrator or accomplice, who It should be noted that the above discharges of oil or oily mixtures from may have contributed in any way in penalties of imprisonment are provided any ship; the wilful or negligent discharges that by Law 4037/2012 irrespective of the - 34 of Annex I, regulating discharge of are punishable. This may result in the geographical place of the discharge oil or oily mixtures from the cargo tanks possibility of indictment of any person and of the flag of the offending of a tanker; and from the ship management office (such vessel, which seems to contradict the - 13 of Annex II, regulating the as directors or DPA), the charterers, provisions of Article 230 of UNCLOS discharge of noxious liquid substances. cargo owners, etc. (United Nations Convention on the Law of the Sea of 1982) providing Exceptions The new law established criminal that monetary penalties may only be Article 4 of the new law incorporates penalties in the case of wilful discharges imposed with respect to violations part of the exceptions of MARPOL. as follows: a) Imprisonment from five of national laws and regulations, or Specifically, the discharge of oil or liquid to 10 years and pecuniary penalty from applicable international rules and noxious substances is not considered EUR 3,000 to EUR 300,000, in cases of standards for the prevention, reduction an infringement if it was necessary for significant pollution that caused risk and control of pollution of the marine the purpose of securing the safety of to human life, or risk of severe bodily environment, committed by foreign- the ship or saving life at sea, or when damage, or of wide environmental flagged vessels, except in case of a discharge is being done with the disturbance or disaster; a wilful and serious act of pollution approval of the administration (both flag b) Imprisonment from one to five committed within the territorial sea of a and territory, if any) for the purpose of years and pecuniary penalty from EUR member state. combating pollution (Regulations 4.1, 4.3 1,500 to EUR 50,000 in all other single of Annex I and 3.1.1, 3.1.3 of Annex II). pollution incidents; and Administrative fine c) Imprisonment from six months to five In addition to the above criminal For all of the above areas, except years and pecuniary penalty between penalties, an administrative fine of up internal and territorial seas of an EU EUR 1,000 to EUR 15,000 in case of to EUR 60,000 may be imposed. In case member state, a discharge is not repeated minor discharges which in of a serious incident the fine may vary considered an infringement if it was conjunction result in the deterioration in from EUR 60,000 to EUR 1,200,000. The caused due to damage to the ship or the quality of sea water. authorities may prohibit the sailing of her equipment, provided all reasonable the liable vessel until the fine is paid

© Gard AS, December 2013 18 or until the submission of a letter of Entry into force of MARPOL and UNCLOS mentioned guarantee from a bank operating in The law came into force on 30th above. Greece. January 2012. We are grateful to KGDI Law Firm, Liability of legal entities Conclusion Kyriakides Georgopoulos & Daniolos Legal entities may face a fine of up to Law 4037/2012 provides severe Issaias, Greece, for the above EUR 500,000 for any of the offences, penalties of imprisonment not only information. which are punishable under the law, to crew members but also to any committed for their benefit: other person that has contributed - by any person acting, either to a punishable discharge, thereby individually or as part of a body of increasing criminalisation of the the legal entity, who has power of shipping industry and conflicting with representation or the authority to take Article 230 of UNCLOS 1982 as regards decisions for the legal entity, or an to foreign-flagged vessels. authority to exercise control within such legal entity; or According to Greek precedents, - by any person under the control of European Union legislation (and the legal entity when the offence was implementing laws) prevails over committed due to lack of supervision any sub-constitutional legislation. by any of the persons of the legal entity Therefore, if a case were brought who have power of representation, before a Greek court chances are that authority of decision making and the provisions of Law 4037/2012 would exercise of control. be found to prevail over the provisions

Gard News 207, August/ New wine from old October 2012 wineskins? - Current efforts to retrieve oil from sunken vessels When a ship sinks one of the main million gallons, and perhaps as much as ratified by four nations, so its ability to concerns is whether it contains oil and six billion gallons. address this issue in the future is far whether that oil should be removed. - The US National Oceanic and from a certainty. Atmospheric Administration (NOAA, For thousands of years vessels have www.noaa.gov) estimates that near the Technology sunk to the bottom of the sea, the United States coastal areas there are While there may be some lag in legal result of man-made events - collision, 400 sunken tank ships and barges and regimes keeping up with this issue, grounding, explosion, acts of war or 1,300 other vessels >400 grt in size that the technology for removal of oil from piracy - or the forces of nature, in the contain 180 million gallons of oil and sunken ships has developed fully in form of storms and other consequences are in a position to threaten pollution to response. Various salvage companies of inclement weather. In that time, coastal areas. and sub-sea technology firms have sunken ships might have attracted - In 2007, Swedish researchers developed various methods and some attention -from salvors or treasure conducted a study of wrecks in specialised equipment that can remove hunters, or authorities if they posed a the Skagerrak area, and found 261 oil from sunken ships, even if they hazard to navigation. But for the most wrecks that were in such a state as lay on the seabed at depths of 1,000 part, they took on a status of anonymity to be potential leakers of oil or other metres or more. Most methods rely in perpetuity. hazardous substances.1 in one way or another on a technique - In 2008, ITOPF stated that one out of called “hot tapping”. This involves the However, with the advent of ships that five cases of ship casualties it was asked placement of equipment that is affixed carry oil and other liquid substances, to attend involved a sunken wreck and to the outer hull of the ship and can either as cargo or fuel, this permanent the potential need for removal of the drill through the hull plating without dwelling in obscurity has changed to oil from it. leaking the contents, pumping into one of sometimes notoriety. This is ship tanks water with solvent chemicals because such cargoes can and will leak Legal regimes that pushes the oil contents into outlet out from the wrecked ships, floating These factual circumstances point out piping, which carries the oil to the upwards and causing pollution, both that the risk of pollution from sunken surface to be collected. This operation to the seas above and eventually to ships bears significant potential is enabled through the employment nearby coastal areas. environmental damage. However, of remotely-operated submarine the applicable legal regimes have, vehicles (ROVs), subsurface tool sleds, This phenomenon has been thus far, given only an incomplete ship tank volume sensors and other accelerated due to a single man-made response to this issue. Sinkings in marine technologies, many of which activity: naval warfare. During both various jurisdictions have resulted were developed in connection with the the First and Second World Wars, in the triggering of a wide variety of offshore energy industry. thousands of vessels were sunk during domestic laws ordering removal of hostilities. After peacetime returned, the oil from such sunken ships, the Challenges the pace of sinkings abated, but never most well-known recent examples The various sunken ships offer many ceased completely. being the PRESTIGE and the ERIKA challenges to recovery, not only from off Spain and France, and the COSTA deep depths, but also from inaccessible With the increase in shipping activity CONCORDIA, on the Italian coast. On positioning, coverage with silt and world-wide, even with lower rates the international level, some incidents sediment, and dispersal of the oil in of sinking incidents, the number of have seen the International Oil numerous locations in the ship itself. sunken wrecks that emitted, or were Pollution Compensation (IOPC) Funds In addition, there can be other sorts of capable of emitting, petroleum or other funding the removal of oil under CLC impediments posed, due to the history liquids grew, along with that of ships (Convention on Civil Liability for Oil of a particular wreck. With many of that contained solid cargoes of a toxic Pollution Damage) regimes, such as the these ships having met their fate in nature that, if exposed to seawater, SOLAR 1 case in the Philippines in 2006. wartime, it is a tragic fact that many could create poisonous solutions wrecks contain human remains of those equally or potentially more damaging. Currently, it is safe to say that whenever crew and passengers who perished a ship sinks in the sea or wrecks upon with the ship when it sank. That fact What are the figures involved? a shoreline, one of the prime concerns alone poses a sensitive social issue as - A study in 2005, performed by is the question of whether the vessel to the ability to carry out oil recovery Environmental Research Consulting contains significant quantities of oil, operations in an efficient manner, with (www.environmental-research.com), and if so, whether that oil should many local governments and authorities indicated that on a world-wide basis, be removed. However, the Nairobi deciding against such activities, which there were a total of 8,569 sunken ships International Convention on the might be viewed as acts of desecration of various types that were leaking, or Removal of Wrecks, adopted by the of a de facto burial site. Such is not capable of leaking, oil or other liquid IMO in 2007 to address the issue of oil always the case, however, when a substances, in a range of at least 747 in sunken ships, thus far has only been wreck poses significant environmental

© Gard AS, December 2013 20 problems for nearby activities, such as fishing and aquaculture. That was the case with the wreck of the ROYAL OAK, a British warship sunk by a German U-boat in the Scapa Flow area of Scotland in 1939. For many years, it remained deliberately undisturbed, as a memorial. But when it began to leak large quantities of oil that affected nearby salmon farms, the decision was to engage a company to carry out a “hot tapping operation”, and almost all of the oil from the ship was successfully removed.

The major limiting factor in the removal of oil from sunken ships can be summarised in one word - money. Such operations are not only difficult, but they are extremely expensive, many times running in the tens of millions of dollars. With the number of eligible sunken ships around, there are simply not enough funds from governmental and private sources to enable oil to be removed from even a large fraction of these wrecks. Graph 1. Courtesy of Environmental Research Consulting. Thus, a complex set of factors must be considered in order to determine whether a particular sunken ship clearly logically reached as to the eligibility of The fact that a ship disappears beneath needs immediate remedy, using the a particular site of a sunken ship, and the sea’s surface does not mean that it limited funds available for such projects. action then taken. can be forgotten. Various nations, as well as the IOPC, have developed sets of criteria and a Conclusion Footnotes process for evaluation. One of the most The days of straightforward wreck 1 Hassellöv, I-M., 2007. Pre-Study complete is shown in Graph 1 below, removal are long over. Even if the of Ship Wreck Assessment and developed by Environmental Research wreckage of the ship itself cannot be Remediation. Alliance for Global Consulting for NOAA, for its Wreck Oil retrieved or disposed of by a salvor, Sustainability, Gothenburg, Sweden Removal Project, known as WORP. the issue of what the ship contains and its possible removal is a separate and By taking into consideration numerous significant question that arises in almost potential risks, a decision can be every case of a vessel sinking.

As reported previously in Gard amendments will bring the offence (both civil and criminal) and the liability News,1 there has been a number provisions in line with the Great Barrier is extended to also include charterers. of significant and highly publicised Reef Marine Park Act, which provides Furthermore, strict liability is imposed pollution incidents in Australian for penalties of up to 20,000 penalty on masters to report movement of ships waters in recent years, such as the units per year in comparison with the in prescribed areas and, according one in March 2009 involving the Hong earlier 2,000 penalty units per year. to the amendments, the master of a Kong registered general cargo ship ship has an obligation to ensure that PACIFIC ADVENTURER and the one in Amendments to the Navigation Act a ship is not operating in a reckless or April 2010 involving the Chinese bulk The Navigation Act is an important negligent manner. carrier SHEN NENG. As a result the piece of legislation regulating a Australian Maritime Safety Authority wide range of marine matters which At last, there are further bills that have (AMSA) undertook a review of the primarily include ship safety and marine been released/will be released shortly. legislation and the Maritime Legislation environment protection. However, the The Federal government is aiming to Amendment Act 2011 came into force Act is old and has now been recast in have all shipping reform legislation in on 4th-6th December 2011. plain language and simplified to reflect force by 1st July 2012. current drafting standards. The main The Act represents the first steps changes of the Act are: Footnotes taken by the Federal Government 1 See article “Australia - Tougher to implement the shipping industry - The master of a ship must ensure that penalties for Queensland environmental reform package announced by Minister the ship is not operated in a negligent offences” in Gard News issue No. 202. Albanese in September 2011. The or reckless manner that causes pollution 2 AUD 1 = USD 1.06 in February 2012. Act amends the Navigation Act and or damage to the marine environment Protection of the Sea Act and creates in Australian waters or in waters of new offences for oil pollution from ships the high seas outside Australia. The and widens the scope of liability to penalties are significant particularly include a wider range of liable parties. It where the contraventions have caused also significantly increases the penalties or had the potential to cause serious from pollution offences. harm to the marine environment. If a corporation is found guilty of an offence Amendments to the Protection of it may be liable for fines up to AUD 3.3 the Sea Act million. The maximum penalty for a The purpose of the amendments to the master who is found in breach of such Protection of the Sea Act is to make the provisions is AUD 666,000. regulation more consistent with other Commonwealth and state legislation - Amendments also require mandatory such as the regulatory regime that reporting by the master of a ship in applies in the Great Barrier Reef Marine relation to the movement of the ship Park. The main changes to the Act are: in prescribed areas, such as the Great Barrier Reef. If the master fails to report - The liability is extended to include in a mandatory way he will be strictly charterers, probably time, voyage and and personally liable for the damage, demise charterers, as well as master and meaning that the master’s state of owners of ships for offences involving mind or degree of fault is not needed discharge of oil, an oily mixture or an to be proved and criminal liability oily residue from a ship into Australia’s can be imposed on the master. The Exclusive Economic Zone (EEZ). The prosecution is not required to prove master is personally liable and may face intention, knowledge, recklessness criminal proceedings. The defences or negligence. In addition to criminal available under the Act, such as prosecution, the court may now make discharge for the purpose of securing a “civil penalty order”, which imposes the safety of the ship or saving life large fines. at sea, have been extended to cover charterers. Conclusion The amendments under the Maritime - Penalties have been significantly Legislation Amendment Act 2011 increased. A maximum fine for a are of high importance and increase corporation has increased from AUD the risk exposure for individuals and 1.1 million to AUD 11 million and companies, especially charterers, from AUD 220,000 to AUD 2.2 million who operate within Australian waters. for an individual.2 Furthermore, the Penalties have significantly increased

Gard News 204, November New Pollution Regulations 2011/January 2012 in China - FAQs II

The article “New Pollution Regulations in China - FAQs”, published in Gard News issue No. 197, contained answers to frequently asked questions (FAQs) about the Regulations of the People’s Republic of China on the Prevention and Control of Marine Pollution from Ships (the main Regulations) which were effective on 1st March 2010. Since the first FAQs, further implementing legislation, rules and interpretation have been issued to give effect to the main Regulations and in relation to the handling of disputes in a pollution incident. This article contains a new set of FAQs to update Gard News readers on the developments.

Updates Are there any further legislation and updates following Gard News’ first FAQs?Yes. Various implementing legislation, rules and interpretation have been issued since then, providing that only guarantees/undertakings from “operator” of the ship should sign the further explanation and detailed rules local recognised financial institutions/ pollution clean-up contract. “Operator” to implement and supplement the insurance companies will be accepted has now been defined in the MSA main Regulations. The table below by the MSA (Maritime Safety Agency) Detailed Rules as “the owner, manager provides an at-a-glance chart setting and the maritime courts as security or actual operator” of a ship . In respect out the major legislation, rules and for pollution liability, with very few of those operators not domiciled in interpretation. exceptions. It is possible, however, to China, it is understood that the ship’s negotiate with claimants to provide a agent in port, Club correspondent, local The above table provides an at-a- Club LOU or other alternative forms of law firm or another legal entity located glance chart setting out the major security if they agree to that. in mainland China (not Hong Kong or legislation, rules and interpretation. Macau) may sign the contract on behalf Pollution clean-up contract of the operator if authorised by the Pollution liability When do I need to sign the clean-up operator to do so. It is understood that Who is liable for pollution damage? contract? the Master may also sign the contract, The previous FAQs discussed who is Readers may recall from the previous which may be necessary in certain liable for pollution damage, defences FAQs that the operators of (a) any ship circumstances, for example where there and limit of liability as provided carrying polluting and hazardous liquid is urgency, although an authorisation under the main Regulations. On cargoes in bulk or (b) any other vessel would still be necessary for the Master pollution liability, the Supreme Court’s above 10,000 GT is required under the to sign on behalf of the operator. The Interpretation (Article 3) gives further main Regulations to sign a pollution International Group of P&I Clubs (IG) guidance that if the oil pollution is clean-up contract with an approved is considering the development of a caused by oil leakage from two or pollution response company prior to standard form authorisation letter for more ships and if the claimants request the vessel’s operations or entry into/ overseas operators for this purpose. the leaking ships to compensate, departure from Chinese ports. The each shipowner shall be individually enforcement date of this requirement Who are the approved clean-up responsible for the damages which has now been postponed to 1st January contractors? can be reasonably apportioned to his 2012. Approved clean-up contractors will be particular ship. If the damages can categorised by the MSA in accordance not be reasonably apportioned, the Those who trade regularly into the PRC with their qualifications and response shipowners shall bear joint liability are recommended to sign the pollution capabilities and will be assigned 1, 2, 3 subject to any applicable defences and clean-up contract before 1st January or 4 status. exemptions. 2012, otherwise they will be subject to administrative penalties and other Operators will need to contract with Will Club LOU be accepted as security measures. an approved clean-up contractor in in a pollution incident? accordance with the size, type and The new legislation has not changed Who should sign the clean-up contract? intended operation of the ship as set the existing position. It is still the case Under the main Regulations, the out in the MOT ( Ministry of Transport)

© Gard AS, December 2013 23 Emergency Response Regulations and ship’s garbage, residue water waste, oil Guangdong MSA: MSA Detailed Rules.1 It is understood waste and sludge is set out in the MOT http://www.gdmsa.gov.cn/ that the list of all approved contractors Operational/Sludge Regulations which will be issued in October 2011 on the came into effect on 1st February 2011. Guangxi MSA: dedicated MSA website at www.osp.cn. Owners/operators of all vessels are http://www.gxmsa.gov.cn/ As mentioned above, the requirement required to discharge all waste residues to contract with an approved clean- (primarily sludge) at least once at a Hainan MSA: up contractor will be enforced in all PRC port, and are required to contract http://www.hnmsa.gov.cn/ Chinese ports from 1st January 2012. with a registered service provider of There will therefore be a relatively short such services.Shipowners/operators Shenzhen MSA: period of time for operators to contract should check with their local agents http://www.szmsa.gov.cn/ with approved clean-up contractors. and the local MSA websites to ascertain the updated lists of such registered Changjiang MSA: What will be the content of the service providers for each Chinese port. http://www.cjmsa.gov.cn/ clean-up contract? The websites of the MSA head office On 20th May 2011 the MSA published and their major branch offices are the Heilongjiang MSA: a Sample Agreement, which is in both following: http://www.hljmsa.gov.cn/ English and Chinese, together with an introduction to the agreement. The MSA head office: Ship Oil Pollution Compensation introduction states that the articles http://www.msa.gov.cn/ Fund of the agreement on rights and Are the details of the Ship Oil Pollution obligations are mandatory and the Shanghai MSA: Compensation Fund available now? parties can not amend them, whilst for http://www.shmsa.gov.cn/ The detailed rules as to the collection matters not covered in the agreement and administration of the funds have the parties may enter a supplementary Liaoning MSA: not been released but there is currently agreement Members are recommended http://www.lnmsa.gov.cn/ a draft on this. not to sign any clean-up contract until the list of approved clean-up Further questions contractors is issued and their contracts Hebei MSA: Whom should I contact if I have further reviewed to see whether they conform http://www.hebeimsa.gov.cn/ queries? with IG guidelines on vessel response Any further enquiries canbe sent to contracts. The IG is currently reviewing Shandong MSA: [email protected] or catherine. the Sample Agreement and will provide http://www.sdmsa.gov.cn/ [email protected]. further guidance after the review. The IG will also consider the development Jiangsu MSA: Footnotes of supplemental clauses for inclusion in http://www.jsmsa.gov.cn/ 1 Readers should refer to Gard Circular the Sample Agreement. No. 4/2011 for details. Zhejiang MSA: Sludge disposal contract http://www.zjmsa.gov.cn/ Is the oil clean-up contract requirement the same as the sludge disposal Fujian MSA: contract requirement? http://www.fjmsa.gov.cn/ No, they are different. The requirement in relation to disposal and discharge of

Gard News 204, November 2011/ Charterers’ pollution January 2012 liability in Brazil

Pollution liability fines and pollution as being persons who exercise control more rigorous regime, in which time damage compensation claims brought over or bear responsibility for a vessel’s and voyage charterers are exposed to by governmental agencies are an day-to-day operations. direct liability. increasingly costly potential liability for vessel owners, and are often difficult However, Brazil is one jurisdiction with Penalties are not based on punitive to defend, as in most cases they are laws which operate as an exception to principles, but are intended to imposed as ‘strict’ liability (i.e., there the generally accepted international recognise and enforce a duty to is no requirement to show fault on the position, in that both time and voyage compensate the State for damage part of the defendant). It is sometimes charterers can be held directly and caused to the environment, and to the case that where owners have been strictly liable for pollution incidents, compensate third parties for damage held liable for such incidents, they are alongside shipowners and bareboat to their assets, adverse effects on their subsequently able to recover these charterers. activities, and for economic losses losses from the vessel’s time or voyage flowing from the pollution incident. charterers in the form of contractual Brazilian legal framework for claims under the charterparty. It is pollution liability As under administrative law, liability almost unheard of, however, that such Brazilian law is a codified legal system under this statute is not dependent charterers may be held directly liable and identifies three distinct spheres on fault. Unlike administrative law, for pollution fines or penalties by of law within which liability may be however, there is no requirement for government agencies, as most legal established. These spheres are each a causal connection between a party’s systems focus on the vessel owner separate and independent from one conduct and the pollution damage. as the party primarily liable for such another and empower different state The test which determines whether incidents. Brazil seems to be a notable agencies. They are the administrative, any particular party has a duty to exception to this rule. civil and criminal law spheres. This compensate for environmental damage article will not consider the criminal law is to ask whether the party was involved Charterers’ exposure - the sphere, as in practice criminal liability in and benefited from the economic international norm for pollution incidents is not commonly activity which caused the pollution.2 In most jurisdictions, a vessel’s charterer imposed on shipping interests in Brazil. This is a very wide test. (whether bareboat, time or voyage charterer) is not exposed to direct Administrative law By applying the test it is immediately liability for government bodies’ fines or Liability under administrative law is obvious that time and voyage compensation claims in the event of a regulated by Federal Laws 9.605 of charterers, and potentially cargo pollution incident originating from the 1998 and 9.966 of 2000. These laws, interest, can be held to have a duty to chartered vessel, as the international which are enforced by the Brazilian compensate for environmental damage compensation regimes to which most Navy, apply to vessels, platforms caused by pollution from a chartered countries subscribe (Civil Liability and and offshore support installations ship operating in Brazilian waters. Fund Conventions, Hazardous and and provide for fines of up to BRL Charterers are also jointly and severally Noxious Substances Convention)1 50,000,000 per incident, as well as more liable with owners, as well as a number impose primary liability solely on the severe penalties such as the suspension of other potential parties. owner of a vessel and the owner’s or prohibition of activities of the vessel insurer. This is in line with the generally- responsible for the pollution. Although Gard has recently been notified of a accepted “polluter pays” principle this is a form of strict liability, in order compensation claim against a charterer which underlies liability for marine for liability to attach it must be shown member for a bunker spill from the pollution incidents. that there was a causal connection chartered vessel during operations in a between the pollution and an act or Brazilian port. Other than to resist the The notable exception is the United omission of the party concerned. This application of the test mentioned above States, where federal law and certain requirement for a causal connection and to dispute that the chartered vessel states’ laws can be interpreted to is the main reason why administrative was the source of the pollution, there permit bareboat charterers to be penalties are unlikely to be successfully is very little which can be argued by held directly and strictly liable for imposed on time or voyage charterers, charterers in defence of this type of claim. statutory pollution-related fines or notwithstanding occasional attempts compensation. This is because the to do so. Accordingly, this sphere is Recourse and risks for foreign operative statutes define either vessel not the most problematic for time or charterers ‘operators’ or demise charterers, both voyage charterers. The situation is not entirely gloomy of which are interpreted to include for charterers who have no control bareboat charterers. However, even in Civil law over a ship’s day-to-day operations the US it is generally accepted that time Civil liability is governed by Federal Law but find themselves subject to a duty and voyage charterers are not capable 6.938 of 1981. Legal measures in this to compensate the Brazilian State for of being held directly liable as the sphere are pursued by the Federal and pollution damage. definitions clearly do not include them State Public Attorneys. This is a much

© Gard AS, December 2013 25 Firstly, charterers’ liability is joint and the event that the defendant-charterer However, as a matter of practice, several with owners. In most cases is not Brazilian and has no assets in the Brazilian charterers are more exposed owners will respond proactively to country, the law does not permit any to civil law claims for compensation such claims, as their vessel is directly action to be taken against other vessels than foreign charterers, and there is no at risk of enforcement procedures and chartered by the same charterers power for other chartered vessels to therefore they have the most to lose. which subsequently enter Brazilian be the subject of enforcement actions jurisdiction. This may of course not for these claims. Furthermore, while Secondly, the law does not prohibit a be the case where an owned vessel charterers will often be summoned recourse action against other parties. subsequently enters the jurisdiction, alongside owners, it is expected that Such recourse may be a contractual and the risks should be assessed most owners will take positive steps claim between charterers and owners, separately in each case. to avoid detention of the vessel, or an action against third parties whose thereby relieving charterers from direct conduct may have been the cause of Summary liability. Furthermore, there is no bar the pollution (for example, in the cases Under Brazilian law both time and to charterers seeking recourse against of negligent tug operations, uncharted voyage charterers may be exposed to the party responsible for the pollution or unmarked obstacles within port claims for fines and compensation by or bearing the contractual allocation of approaches for which port authorities authorities where a pollution incident risk for such liability. are responsible). Such recourse is has occurred from the chartered vessel possible once the penalty imposed in Brazilian jurisdiction. We are grateful to Carbone Law Office, has been satisfied by the charterer. Rio de Janeiro, for their invaluable Charterers are encouraged to review Under administrative law charterers assistance in the preparation of this the terms of their charter agreements are likely to escape liability simply by article. relating to risk allocation for pollution demonstrating to the court that they liabilities when giving instructions for were not in control of the vessel’s vessels to call at Brazilian ports. day to day operations and therefore Footnotes were not the cause of the pollution 1 Civil Liability Conventions 1969 Thirdly, as a matter of practice incident. However, under civil law the and 1992; Fund Convention 1992; charterers who are Brazilian entities test to establish a duty to compensate Hazardous and Noxious Substances or who have a registered presence in environmental damage is sufficiently Convention 1996. Brazil are more likely to find themselves wide to accommodate charterers, 2 Article 14, §10. subject to civil liability claims than who are then held jointly and severally those who do not. This is simply due liable with the owners and other parties to the ease of enforcement against involved in and benefiting from the local companies in Brazil, as compared vessel’s activities in Brazil. This is strict to doing so against foreign-based liability and there is little defence entities. It is also worth noting that, in available.

Gard News 203, August/ Perfecting pollution October 2011 prevention? - The State of Washington enacts a new statute Since the passage of the federal Oil volunteer to participate in spill clean- who have vessels that will operate Pollution Act of 1990 (OPA 90), which ups, and grants civil immunity to the in Washington State waters, and will specifically allows the individual states state for what said volunteers might require work in the modification of in the US to make their own marine do. This is similar in aim to what the plans to conform to these enhanced pollution laws and standards (staying State of California has done with its expectations. within legal limitations), the State of creation of regulations for the handling Washington first tried to augment of volunteers post spill, the need for Other coastal states in the US will OPA 90 with its own comprehensive which was seen in the 2007 ‘Cosco certainly take note of what the State of regulatory scheme, incorporating what Busan’ spill in San Francisco. Not only Washington has done, and may mimic it called “Best Achievable Protection” are the needs for human volunteers to those aspects of the new statute that practices (BAP), controlling vessel be addressed, but the new statute also are not currently found in equivalent manning, tank vessel design and requires that more provisions be made terms within their own laws. In this construction, repairs, operations, to incorporate into spill responses way, the states in the US that set the etc. This far-reaching regulatory ‘vessels of opportunity’, like fishing trend are likely to be followed in kind programme was opposed by industry, boats, so that they can be used for by other states in due course, and as an impermissible over-reaching oil spill recovery efforts. This seems so developments tend to eventually into the province of the US federal to acknowledge the large role such spread throughout the US and become regulatory field and insisting that it small vessels have in spill response, the ‘new standard’. This is also fed would set up severe inconsistencies most recently seen in the ‘Deepwater by developments in federal pollution with the rest of the US, rendering Horizon’ incident off Louisiana. regulations, which states also watch compliance expensive and practically with interest, then tend to tailor, adopt, impossible. In March 2000, the industry - The reporting of an emergency at sea and append to their own state laws, group Intertanko successfully obtained or a discharge or substantial threat of further driving forward developments in a ruling from the US Supreme Court discharge must be made within one the area. to that effect, striking down 11 of the hour to the Washington Department regulations as illegal, and they were of Ecology, in addition to the US Coast The matrix of state laws, and their repealed by the State of Washington in Guard. This is similar to requirements in interplay with federal laws, is a hallmark June of that year. effect in several other states. of marine pollution response in the US, and is a peculiar feature that requires But since that time, Washington State - Approval of contingency plans by the vigilance in planning and flexibility officials have periodically issued State of Washington must be made and in compliance. Gard will continue to pollution protection regulations that notified within 65 days of submission. monitor such developments and report do not run afoul of legal limitations, on them as warranted, in what has and in April 2011 the Washington - The use of ‘umbrella plans’ for both proven to be a dynamic venue for the State legislature passed, and the tank and non-tank vessels as per evolution of marine pollution response governor signed into law, the latest set Washington State law is still permitted, planning and regulation. of regulations for tank vessels, due to but the omnibus plan must take into come into effect on 22nd July 2011. account the maximum worst case discharge amount of both vessel types, These new statutory mandates include: and provide for additional equipment to meet the challenge. - Enhancement of vessel contingency plan provisions, including a large - The level of state fine to be assessed scale equipment deployment every for such an incident had been tripled, three years, that would be focused to USD 3-300 per gallon for more than on operational readiness of response 1,000 gallons discharged, although any efforts in the first few hours of a oil recovered within the first 48 hours spill. New planning standards by the after the spill will be credited against Department of Ecology will be issued the amount spilled. every five years, starting with tank vessels, with new rules set forth by 31st These laws appear to dwell well within December 2012. the legal boundaries as set by the US Supreme Court for such state statutes. - The Washington State Department So, compliance planning for these of Ecology is required to establish a regulations will be necessary for tank volunteer co-ordination system, to vessel operators (and those with mixed handle the numerous citizens who fleets of tank and non-tank vessels),

Gard News 203, The state of August/October 2011 environmental crime enforcement in the US By Steven P. Solow and Anne M. Carpenter, Katten Muchin Rosenman LLP, Washington, D.C.

Introduction1 The bill also would direct the United spill, it has been said that, at one point It has been over a year since the States Sentencing Commission to or another, nearly all of the Justice 20th April 2010 explosion on the review the sentencing guidelines for Department’s environmental crime DEEPWATER HORIZON drilling rig in Clean Water Act offences ‘‘in order prosecutors were working on the case. the Gulf of Mexico. The resulting oil to reflect the intent of Congress While it has grown in the past 20 years, spill (the Gulf spill) has been the subject that penalties for the offences be the Justice Department’s Environmental of multiple investigations and analyses. increased [to] appropriately account Crimes Section has approximately According to the National Commission for the actual harm to the public and 35 trial attorneys. Even if only four or on the BP Deepwater Horizon Oil Spill the environment from the offences.’’7 five of those attorneys are spending and Offshore Drilling, created on 20th If this effort goes forward, we may a significant amount of time on the May 2010, the ‘‘immediate cause’’ of see similar efforts with regard to the Gulf spill investigation, that would be the spill was a ‘‘series of identifiable other major environmental statutes, more than 10 per cent of the section’s mistakes’’ by the companies in charge or a comprehensive effort, such as total. It is as yet unknown whether the of the rig.2 that proposed in 1996, to expand the department’s decision to move the Gulf scope of restitution to all environmental spill case into the Criminal Division will A hundred spills could be similarly criminal convictions. inject new resources into the case and described. The significance of the Gulf free resources from the Environmental spill, given its size and the tragic human Environmental crime investigation Crimes Section. losses that occurred, will be analysed in and prosecution as a zero sum many different ways. For the purposes game With regard to EPA, particularly in an of this article, we first look at the spill Absent from the many analyses in atmosphere of budget cutting,11 it is in terms of what it may mean for the the media has been any meaningful similarly unknown whether another criminal prosecution of environmental reporting on the impact of the criminal impact of the Gulf spill will be a violations. investigation of the Gulf spill on the reduction in the federal government’s rest of the government’s environmental ability to more broadly investigate This article then moves to an analysis crime enforcement efforts. This is environmental crimes. If EPA were of current international projects that especially of note with the news that so constrained it could impact more highlight cross-national co-operation the Department of Justice (DOJ) has than federal cases. In recent years in vessel pollution enforcement. Finally, transferred the criminal investigation of EPA has expanded and strengthened we provide a review of significant vessel the Gulf spill from the Environmental its role in training and supporting the pollution enforcement cases from 2010, Crimes Section in the Environment work of state and local environmental and the start of 2011. and Natural Resources Division to the investigators and police. Hundreds of Criminal Division.8 state law enforcement officers have The Clean Water Act: proposals to been trained by EPA at the Federal expand restitution and increase Given the relatively small amount of Law Enforcement Training Center in sanctions federal resources typically devoted Georgia. Cuts to training budgets and Legislation introduced in the wake of to environmental criminal matters, other forms of state assistance could the Gulf spill seeks to expand the scope the impact of investigating and (if impact these resources as well. of restitution that may be imposed appropriate) prosecuting cases arising following a criminal conviction of an out of the Gulf spill is significant. As a means of comparison that may environmental crime. At present, a EPA recently touted the growth of or may not be an artifact of resource federal judge has the discretion to its Criminal Investigation Division to allocation related to the spill, we can impose restitution to an identifiable a ‘‘full’’ complement of 200 special compare the reports of cases coming victim, but not, for example, for harm agents.9 To put this into perspective, out of EPA Region 6 from 2009 to 2010. caused to natural resources.3 In 1996, the FBI has somewhere north of 13,000 In 2009, a total of eight matters involved the U.S. Senate attempted to revise special agents.10 While other agencies cases in Region 6.12 A review of 2010 the federal sentencing statutes to are involved in environmental crime indicates one. expand the scope of restitution in investigations, EPA is unquestionably criminal cases by allowing judges the lead agency in this area, and the As in any major case, the government to order restitution to communities commitment of numerous agents to the will have to decide just how much harmed by environmental crimes.4 That Gulf spill investigation inevitably raises investigation of the Gulf spill it attempt failed. The proposed post-spill questions about EPA’s ability to cover can afford. As one former Justice legislation would expand the scope of other matters. Department lawyer has observed, restitution by mandating that judges “A prosecutor is not obligated order restitution to victims of criminal The same resource questions existed to take every possible step in the violations of the Clean Water Act.5 The for the Environmental Crimes Section investigation of a suspected criminal bill does not propose to authorise the at DOJ. During the government’s offence. Rather, the prosecutor should order of restitution to communities as investigation and prosecution efforts consciously engage in an analysis a whole.6 after the March 1989 EXXON VALDEZ of proportionality in choosing which

© Gard AS, December 2013 28 investigative steps to pursue, and how Who’s in charge after a major Part of what is remarkable about these aggressively to pursue them”.13 The incident? agreements is that they are generally availability of resources is a legitimate Another issue receiving scant coverage the result of bilateral discussions consideration in determining the scope is the remarkable, and remarkably between two government agencies and extent of a government criminal confusing, number of agreements and do not reflect other MOUs that investigation.14 The underlying reason that address the federal government’s exist between these same agencies and for the shift of the Gulf spill case to inter-agency co-ordination following other agencies. To provide a shorthand the Criminal Division is not publicly a significant event such as the Gulf way of visualising the MOUs between known. Whatever the reason, moving spill. There is insufficient space here and among the federal agencies with sole responsibility for prosecuting the to address each memorandum of authority to investigate environment spill case to that division may allow the understanding that exists between and and safety matters, we have provided Department’s Environmental Crimes among the various agencies responding the illustration below. Section to continue to play a leading to the spill. Indeed, several MOUs were role in investigating and prosecuting created specifically to co-ordinate work other environmental crime matters involving the Gulf spill. around the country.

Federal Agencies with Memorandums of Understanding in Environmental and Safety Investigations

Agencies identified above (clockwise starting from top): Department of Labor, Occupational Safety and Health Administration; Department of Homeland Security, U.S. Coast Guard; National Transportation Safety Board; Chemical Safety Board; Department of Interior; Bureau of Ocean Energy Management, Regulation, and Enforcement; Department of Transportation; Environmental Protection Agency.

From the perspective of those who within the government because it can pollution enforcement and prosecution must represent entities and individuals result in a lack of clear lines of authority Over the last few years, governments who are the subject of such inquiries, and communication with regard to have increased their co-ordinated these MOUs create more questions issues such as evidence preservation efforts to investigate and prosecute than answers. If an individual or entity and forensic analyses. Without vessel cases. Although many are familiar is approached by one agency to doubt, as the government’s criminal with these developments as they provide information or to be asked for investigation of the Gulf spill moves have occurred, we have summarised an interview, it is often impossible to forward, increasing attention should be them below in an effort to provide an know whether the agency is the ‘‘lead’’ paid to whether and how its handling of overview of what we see as a growing agency, or whether it is operating in this case impacts other cases involving culture of international co-operation co-ordination with, or independently multiple agencies and parallel safety, to investigate and bring enforcement from, other agencies. This situation not civil, and criminal investigations. actions involving maritime vessel only creates issues for those outside the pollution. government, but also raises questions International co-operation in vessel

© Gard AS, December 2013 29 The Interpol Pollution Crime collection of evidence, and imposition guilty in federal court to charges of Working Group of penalties for offenders.23 making false statements, knowingly As is widely known, Interpol’s Pollution failing to fully and accurately maintain Crime Working Group is a consortium Maritime MOUs an oil record book, and knowingly of criminal investigators from Interpol’s Under the leadership of the IMO, discharging oily bilge waste into 188 member countries, which shares various MOUs have been established Pago Pago Harbor, American Samoa, information to develop new strategies between consortiums of port states to without using proper pollution to control global environmental crime.15 co-ordinate compliance inspections prevention equipment. A Coast Guard The Group includes various project- under Marpol 73/78. To date, MOUs inspection of the company’s ship M/V teams including the Clean Seas Project, have been signed covering all of SYOTA MARU on 17th August 2010 led by an officer of the Australian the world’s oceans: the Paris MOU revealed evidence of the violations. Maritime Safety Administration. covers Europe and the North Atlantic; The company was sentenced to pay The Group developed a manual the Tokyo MOU covers Asia and the a USD 750,000 criminal fine and USD on investigating vessel pollution Pacific; the Acuerdo de Viña del Mar 250,000 in community service payments and plans to develop and deliver a covers Latin America; the Caribbean for projects in American Samoa. The training course to international law MOU covers the Caribbean; the company was also placed on three enforcement officers using the manual Abuja MOU covers West and Central years’ probation. as a guide.16 In an effort to provide Africa; the Black Sea MOU covers the enforcement guidance, and publicise Black Sea region; the Mediterranean United States v. Cardiff Marine, Inc.31 shipping companies and ships that MOU covers the Mediterranean; the - Cardiff Marine, Inc., a Liberian- violate pollution law, the Clean Seas Indian Ocean MOU covers the Indian registered shipping company, was Project also maintains a Ship Pollution Ocean; and the Riyadh MOU covers six sentenced in a Baltimore federal court Prosecution Database that contains Persian Gulf states.24 As time passes, for a felony violation of the Act to information on completed prosecutions and enforcement efforts rise, these Prevent Pollution from Ships after the by various countries for the period 2001 documents are becoming increasingly company pleaded guilty to making to 2006.17 meaningful. For example, it appears false statements to the Coast Guard, that vessel pollution enforcement falsification of discharge records Aquapol training in the Arab countries that from the M/V CAPITOLA, and other Aquapol is a self-governing association operate under the Riyadh MOU acts of concealment.A Coast Guard of maritime and inland navigation- (Bahrain, Kuwait, Oman, Qatar, Saudi investigation of the company was related law enforcement authorities Arabia and UAE) has increased in launched on 3rd May 2010 after a crew from the member states of the recent years. While the Riyadh MOU member informed a clergyman, who European Union and Switzerland.18 was enacted in 2004,25 the increases was on board on a pastoral visit, about The organisation, founded in 2002 by in enforcement training suggest that “monkey business in the engine room” the Dutch, German and Belgian Water it may only be a matter of time before involving a “magic pipe.” The crew Police Forces, is an effort to improve these countries begin to step up member gave the clergyman a flash co-ordination of inland and maritime enforcement on vessels transiting their drive containing a video taken of the shipping-related law enforcement waters. ship’s engine room and asked him to in Europe through the exchange of alert the Coast Guard. The investigation good practice, joint training, joint An example of international co- revealed that the “magic pipe” was a international control operations, and operation to effectively and efficiently bypass hose that enabled the dumping joint legislation and lobbying efforts.19 prosecute vessel pollution can be of waste oil overboard. The company seen in United States v. Ionia Mgmt was sentenced to pay a USD 2.4 The North Sea Network S.A.26 In Ionia, the US Court of Appeals million fine and three years’ probation, The North Sea Network of Investigators for the Second Circuit upheld the during which time third-party auditors and Prosecutors (NSN), a group of conviction of the shipping company will administer an environmental coastal countries bordering the North Ionia Management S.A. for violations compliance plan for the company. Sea, works to enforce international of the Act to Prevent Pollution from rules and standards under the United Ships for failure to maintain an accurate United States v. Stanships, Inc., et Nations Convention on the Law of Oil Record Book for the M/T KRITON al.32 - Standships, Inc., Stanships, Inc., the Sea (UNCLOS), the International while in US waters. The crew of the M/T Standard Shipping, Inc., and Calmore Convention for the Prevention of KRITON, a 600-foot oil tanker managed Maritime, Ltd. pleaded guilty on 12th Pollution from Ships (MARPOL 73/78), by Ionia, routinely discharged oily April 2011 to violations of the Act to and the numerous regulations of the waste into the ocean through a “magic Prevent Pollution from Ships, Ports International Maritime Organization hose” at the direction of the ship’s and Waterways. Investigation into the (IMO).20 Because of the density of ship Chief Engineers.27 The crew also made defendants began on 29th November traffic and close proximity of the coastal false entries into the Oil Record Book 2010 after a crew member reported states, the NSN has facilitated joint to conceal the discharges and hid the to the Coast Guard that the ship M/V efforts to investigate and prosecute “magic hose” from US Coast Guard AMERICANA had a “magic pipe” cases crossing national borders.21 The inspectors. The Netherlands Royal that bypassed pollution controls to participating coastal states include Military Police provided the US Coast dump oily waste overboard. The crew Belgium, Denmark, France, Germany, Guard with evidence of illegal dumping deliberately pumped engine waste Ireland, the Netherlands, Norway, which helped secure the conviction overboard and created false Oil Sweden and the United Kingdom. The against the company for violations Record Books to conceal the illegal NSN was begun by Norway in 2002, and of the Act to Prevent Pollution from dumping. Efforts were made to hide facilitates the exchange of information Ships.28 the pipe when the ship was in port. between the member states regarding The defendants were also charged with legal and evidentiary requirements, as Vessel enforcement cases of failing to report a situation hazardous well as surveillance data.22 The NSN note29 to US waterways because the ship has created an international manual United States v. Koo’s Shipping entered the Mississippi River without a that offers guidance on the detection Company30 - Koo’s Shipping Company, fully-functioning generator and the crew of maritime oil pollution offences, a Taiwanese Corporation, pleaded was unable to power the ship. Under

© Gard AS, December 2013 30 the terms of the plea agreement all the company’s cargo ships that made Safety Act, and a misdemeanor violation defendants are banned from operating port calls in US cities. The ship’s chief of the Clean Water Act. Randall Dantin, in the United States for a period of five engineer directed the dumping of a co-owner of the company, also years. Defendants must also pay USD approximately 6,000 gallons of waste pleaded guilty to a separate charge 1 million in restitution, of which USD oil overboard through a bypass hose of obstruction of justice. DRD Towing 250,000 will be devoted to conservation that circumvented pollution prevention assigned employees to operate vessels and protection of wildlife in the area. equipment. Irika also received five without proper Coast Guard licensing, years’ probation, during which the paid captains to operate without a relief United States v. Dimitrios Grifakis33 - company is required to develop an captain, and created environmentally Dimitrios Grifakis pleaded guilty to enhanced environmental compliance hazardous conditions by negligently obstructing a federal Coast Guard plan covering all its ships, including any discharging oil. The company admitted investigation that was examining new vessels. that the M/V MEL OLIVER was pushing the use of a “magic pipe” to bypass a tanker barge of fuel oil when it crossed required pollution controls on the United States v. Avaz,36 United States the path of the M/T TINTOMARA M/V CAPITOLA. Grifakis admitted v. Mogultay,37 United States v. Atlas and caused a collision resulting in the he instructed subordinates to dump Ship Management Ltd.38 - Gunduz discharge of 282,686 gallons of fuel into oily waste overboard via the pipe Avaz, a Turkish citizen and the chief the Mississippi River. DRD Towing was between March 2009 and 3rd May 2010. engineer on the cargo ship M/V sentenced to two years’ probation and Grifakis obstructed the investigation AVENUE STAR, operated by Atlas Ship a USD 200,000 fine, while Dantin was into the dumping by falsifying the Management Ltd., was sentenced sentenced to 21 months in prison, two M/V CAPITOLA’s Oil Record Books to five years’ probation for failing to years of supervised release, and a USD and failing to produce Daily Sounding fully and accurately maintain an oil 50,000 fine. Records for the ship, which could have record book in violation of the Act helped pinpoint days when dumping to Prevent Pollution from Ships. Avaz United States v. The China Navigation occurred. Cardiff Marine, Inc., the failed to record illegal discharges Co. Pte. Ltd.42 - The China Navigation shipping company responsible for the of oil-contaminated waste from the Co. Pte. Ltd., a marine cargo vessels M/V CAPITOL, pleaded guilty on 3rd engine room of the ship that was operation, pleaded guilty to a felony February 2011 to violation of the Act transferred to a ballast storage tank, violation of the Act to Prevent Pollution to Prevent Pollution from Ships. The and then disposed of at sea as the from Ships based on its failure to company was fined USD 2.4 million and vessel travelled from Honduras to maintain an oil record book. The oil will serve three years’ probation. Tampa, Florida. Yavuz Mogultay, the record book failed to note that the second assistant engineer, was charged crew had discharged approximately United States v. Fleet Management separately for the use of a bypass hose 275 gallons of oil-contaminated waste Ltd.34 - Fleet Management Ltd., a Hong to discharge waste and the failure to collected by crew members after Kong-based ship management firm, record the discharges in the ship’s oil an on-board oil spill in violation of pleaded guilty to a criminal violation record book. Mogultay was sentenced the International Convention for the of the Oil Pollution Act of 1990, as well to five years’ probation. Atlas Ship Prevention of Pollution from Ships. as felony obstruction of justice and Management Ltd. separately pleaded Pursuant to the plea agreement, the false statement charges. The firm was guilty to making false statements and company agreed to pay a USD 75,000 ordered to pay USD 10 million and knowingly failing to accurately maintain fine, serve two years’ probation, sentenced to three years’ probation an oil record book. The company was implement an environmental compliance for its role in the COSCO BUSAN oil sentenced to three years’ probation and plan, and pay USD 25,000 to the spill and related cover-up after the ship a USD 800,000 fine. The company was Columbia River Estuarine Coastal Fund. struck the San Francisco Bay Bridge in also ordered to pay USD 100,000 to the November 2007. Fleet Management National Fish and Wildlife Foundation, United States v. Cooperative Success concealed ship records and falsified and implement an environmental Maritime S.A.43 - Cooperative Success and forged documents to influence compliance programme covering Maritime S.A., the operator of the the Coast Guard’s investigation. The inspection and audit of its ships that sail M/T CHEM FAROS, a cargo ship that collision killed at least 2,000 migratory into the United States. regularly transported cargo between birds including Brown Pelicans, Marbled foreign ports and the United States, Murrelets and Western Grebes. United States v. Aksay Denizcilik Ve pleaded guilty to violation of the Act Pursuant to the plea agreement, Fleet Ticaret A.S.39 - Aksay Denizcilik Ve to Prevent Pollution from Ships and Management was ordered to direct Ticaret A.S., a Turkish corporation that making false statements. The crew of USD 2 million of the USD 10 million operated the ship M/T KERIM, pleaded the M/T CHEM FAROS discharged penalty to fund marine environmental guilty to making a false statement and approximately 13,200 gallons of oil- projects in the San Francisco Bay. The failure to fully and accurately maintain contaminated waste into the ocean, firm was also ordered to implement an oil record book. Between 2006 and falsified entries in the oil record a comprehensive compliance plan to and 2009 officers and crew of the M/T book to conceal the amount of oil- heighten training and voyage planning KERIM, under the direction of Aksay, contaminated bilge waste that was for ships engaged in trade with the used a pipe to bypass the ship’s oil actually stored aboard the ship. The United States. pollution prevention equipment and company was sentenced to a USD discharge oil-contaminated waste 850,000 fine, of which USD 150,000 United States v. Irika Shipping S.A.35 - directly into the ocean. Aksay was was directed to the National Fish Irika Shipping S.A., a ship management sentenced to three years’ probation and Wildlife Foundation, five years’ corporation, pleaded guilty to felony and a USD 725,000 fine, and ordered probation, and the implementation obstruction of justice charges and to implement an environmental of an environmental compliance violation of the Act to Prevent Pollution compliance programme. programme. from Ships. Irika was ordered to pay more than USD 4 million in fines United States v. DRD Towing Co. LLC,40 United States v. Sikharulidze44 - Vaja and community service restitution United States v. Dantin41 - DRD Towing Sikharulidze, former chief engineer of for deliberately concealing vessel Co. LLC pleaded guilty to a felony the M/T CHEM FAROS, operated by pollution from the M/V IRANA, one of violation of the Ports and Waterways Cooperative Success Maritime S.A.,

© Gard AS, December 2013 31 pleaded guilty to violating the Act to pdf. Walter James, accessible at http://www. Prevent Pollution from Ships for failure 6 See id. environmentalblog.typepad.com. to properly maintain an oil record book 7 Id. 30 No. 1:11-cr-00034-GK-1 (D.D.C. recording disposal of contaminated 8 ‘‘Justice Department Sets Up Task guilty plea entered Mar. 31, 2011). waste. On at least one occasion, Force for Gulf of Mexico Oil Spill 31 No. 1:11-cr-00058-MJG (D. Md. guilty Sikharulidze directed subordinate Investigation’’(46 DEN A-11, 3/9/11). plea entered Mar. 17, 2011). crew members to bypass the ship’s 9 ‘‘Giles Says EPA Pursuing High-Impact 32 No. 2:11-cr-00057-CJB (E.D. La. oil-water separator, and pump oil- Cases, Adding Criminal Investigators to guilty plea entered April 12, 2011). contaminated waste directly overboard. Staff’’ (184 DEN A-7, 9/24/10). 33 No. 1:11-cr-00011-MJG (D.Md. guilty Approximately 13,200 gallons of oil- 10 See http://www2.fbi.gov/quickfacts. plea entered May 5, 2011). contaminated waste was discharged htm. 34 No. 3:08-cr-00160-SI (N.D. Cal. into the ocean. Sikharulidze received 11 The President’s proposed budget for sentencing Feb. 19, 2010). one year’s probation and seven days of FY2012 cuts, among other things, the 35 Nos. 1:10-cr-00403-JSM and 1:10-cr- home confinement for his conduct. EPA budget for ‘‘Forensic Support’’ by 00372-JSM (D. Md. sentencing Sept. 21, thousands of dollars - a pittance in the 2010). United States v. Dimitrios Dimitrakis45 deficit abyss, but potentially significant 36 No. 8:10-cr-00286-JSM (M.D. Fla. - Dimitrios Dimitrakis, chief engineer to EPA’s ability to provide functional sentencing Sept. 7, 2010). of the M/V NEW FORTUNE cargo support for investigations. See http:// 37 No. 8:10-cr-00264-JDW (M.D. Fla. ship, was sentenced to three years’ www.epa.gov/planandbudget/ sentencing Aug. 26, 2010). probation, and a USD 5,000 fine for annualplan/fy2012.html 38 No. 8:10-cr-00363-SDM (M.D. Fla. aiding and abetting the failure to 12 EPA Region 6 covers Arkansas, sentencing Dec. 2, 2010).32 No. 2:11-cr- maintain an oil record book. Dimitrakis Louisiana, New Mexico, Oklahoma, 00057-CJB (E.D. La. guilty plea entered routinely ordered his crew to bypass Texas and the areas covered by 66 April 12, 2011). the oil pollution prevention equipment Native American Tribes. 39 No. 8:10-cr-00116-RAL (M.D. Fla. and discharge oil-contaminated 13 See Rory K. Little, Proportionality as sentencing May 21, 2010). materials directly into the ocean an Ethical Precept for Prosecutors in 40 No. 2:10-cr-00191-ILRL (E.D. La. when entering US waters. Dimitrakis Their Investigative Role, 68 Fordham l. sentencing Jan. 19, 2011). concealed these discharges via false Rev. 723, 770 (1999). 41 No. 2:10-cr-00190-ILRL (E.D. La. entries into the ship’s oil record book. 14 See ABA Criminal Justice Standards sentencing Jan 19, 2011). Volodymyr Dombrovskyy, another on Prosecutorial Investigations, 42 No. 3:10-cr-05181-BHS (W.D. Wash. crew member, was sentenced to two 2.1(c)(vi), available at http://www. sentencing Mar. 22, 2010). years’ probation, and a USD 500 fine americanbar.org/groups/criminal_ 43 No. 4:10-cr-00035-D (E.D.N.C. for aiding and abetting the failure to justice/policy/standards.html. sentencing June 7, 2010). maintain an oil record book. Transmar 15 See Interpol, The Pollution Crime 44 No. 4:10-cr-00032-D (E.D.N.C. Shipping Co. S.A., the ship’s operator, Working Group, available at http://www. sentencing Aug. 17, 2010). was separately sentenced for failure interpol.int/Public/EnvironmentalCrime/ 45 No. 4:10-cr-00552-DLJ (N.D. Cal. to maintain an oil record book and Pollution/WorkingGroup.asp. sentencing Sept. 30, 2010). false statements made to a federal 16 Id. official, three years’ probation, a USD 17 Id. 750,000 fine, a USD 100,000 community 18 See Aquapol, International Police service payment to the National Fish Cooperation on the Water, available at and Wildlife Foundation, and was http://www.aquapol-police.com/. ordered to implement an environmental 19 Id. compliance programme. 20 See The North Sea Network of Investigators and Prosecutors, available at http://www.ospar. Footnotes org/content/content.asp?me 1 Portions of this article previously nu=00580623000000_000000_000000. appeared in: Steven P. Solow & Anne M. 21 Id. Carpenter, The State of Environmental 22 Id. Crime Enforcement: A Survey of 23 Id. Developments in 2010, Daily Env’t 24 See International Maritime Report (BNA) No. 50 DEN B-1 (Mar. 15, Organization, Port State Control, 2011). available at http://www.imo.org/ 2 National Commission on the BP OurWork/Safety/Implementation/ Deepwater Horizon Oil Spill and Pages/PortStateControl.aspx. Offshore Drilling, Report to the 25 See Riyadh Memorandum of President, Deep Water: The Gulf Oil Understanding on Port State Control, Disaster and the Future of Offshore available at http://www.riyadhmou.org/. Drilling, p. vii (January 2011), available 26 555 F.3d 303 (2d Cir. 2009). at http://www.oilspillcommission.gov/ 27 555 F.3d at 306. final-report. 28 See Press Release, U.S. Dep’t of 3 See 18 U.S.C. §§ 3553, 3663. Justice, Tanker Company Fined $4.9 4 Environmental Crimes and Million for Falsifying Records and Enforcement Act of 1996, S. 2096, 104th Obstruction of Justice (Dec. 14, 2007). Cong. (1996). 29 Like other sources, our data on 5 Environmental Crimes Enforcement environmental criminal cases is Act of 2011, S. 350, 112th Cong. (2011) probably incomplete. Our sources, (proposing to amend 18 U.S.C. § among others, include the websites of 3663A(c)(1)(A)). See http://www.gpo. EPA and DOJ, as well as BNA’s Daily gov/fdsys/pkg/BILLS-112s350is/pdf/ Environment Report, and the always BILLS-112s350is.pdf BILLS-112s350is. useful Environmental Crimes Blog of

The Second Circuit Court of Appeals international waters. The court ruled the engine room crew. Further, based confims US jurisdiction to criminally that because the failure to maintain the upon expert testimony put forward by prosecute ship operators for crew ORB occurs within US waters, the US as the government, the Second Circuit violations of MARPOL. port state has jurisdiction to prosecute held that the jury was entitled to find the company and the individuals and that the bypassing and false entries The Second Circuit Court of Appeals that there is no positive duty under were performed for the benefit of the has joined the Fifth Circuit Court of international law for the port state to company based on the extra time and Appeals in confirming that shipowners refer the matter to the flag state. expense involved in properly disposing and operators may be criminally of the oily waste water. prosecuted and held vicariously liable Vicarious corporate liability is here for entering US waters with false to stay Finally, the court rejected the argument entries in the Oil Record Book (ORB) The Second Circuit also considered made by amici that the government designed to hide discharges of waste arguments made by amici curiae4 that was required to prove within its case oil in violation of MARPOL. On 20th urged the court to review the standards that Ionia lacked effective policies and January 2009 a three-judge panel for corporate vicarious criminal liability. procedures to deter and detect the ruled in the case United States v. Ionia Vicarious liability of a corporation for criminal acts of its employees. The Management1 that the Act to Prevent acts of its agents or employees is well court held that the lack of an effective Pollution from Ships (APPS), the US known within the civil law under the environmental compliance plan is not version of the MARPOL Convention, rubric “respondeat superior”: let the an element of proof for the government “imposes a positive duty on the subject master answer. It is well established but instead an effective plan is a ships to ensure that their oil record within tort principles that the employer defence available to the defendant books are accurate (or at least not is responsible to pay compensation in showing that the crew member at knowingly inaccurate) upon entering when an employee’s negligence harms issue was not acting for the benefit of the ports or navigable waters of the another. This is so even when the the company and within the scope of United States”. employee has acted against corporate employment. policy and instructions, as long as the Ionia was the ship manager of the act leading to the injury can be said The Federal Appellate system in the tanker KRITON, which delivered oil to be within the employee’s scope United States is divided into twelve products to various US east coast ports. of employment. Amici attacked Circuits with each of the Circuit Courts At the trial the jury found that the the wholesale incorporation of the of Appeal responsible for interpreting engine room crew under the direction respondeat superior principle into the the federal law within the cases brought of the chief engineers routinely criminal law on the ground that APPS before it, subject only to review by the discharged waste oil into international did not provide for corporate vicarious Supreme Court.5 The Second and waters by bypassing the oily water liability and, absent specificity in the Fifth Circuits are considered to be separator and made entries in the ORB statute, criminal conviction requires leaders in matters of maritime law and to make it appear that the vessel was in some form of intent at least on the part their decisions are frequently followed compliance. The jury also determined of the corporate management. in the other Circuits deciding similar that senior engine room personnel questions. Thus, it is now without obstructed justice by directing junior The Ionia jury was instructed that “a doubt that the owner and operator crew members to lie to the Coast corporation may be held criminally of any vessel entering US waters with Guard and by destroying evidence. The liable for the acts of its agent done an inaccurate ORB are vulnerable company was convicted under the rule on behalf of and for the benefit of to criminal investigation and, if it is of vicarious criminal liability, meaning the corporation, and directly related shown that the entries were made for that there was no proof required that to the performance of the duties the purpose of hiding discharges in the company management was aware the employee has authority to violation of MARPOL, the owner and of any of the criminal activity on board perform”. As is the norm in this type operator will be subject to criminal the vessel. of case, the illegal discharges were in prosecution and vicarious liability for contravention of company policy and criminal acts of crew members resulting The Second Circuit followed the Fifth the management company was not in severe fines, onerous probation Circuit’s decision in United States v. aware of the illegal discharges or the terms and prolonged disruption of Jho2 in holding that the crime under false entries in the ORB. Indeed, as the their operations. Lack of knowledge APPS is the failure to “maintain” result of a prior conviction, Ionia had a of crew non-compliance is no defence. the ORB.3 Both courts found that court-approved compliance plan at the A jury may consider a company’s maintenance of the ORB implies a duty time of the alleged violations. compliance efforts but, in itself, those upon a foreign flag vessel to ensure efforts are not an absolute defence. that the entries are accurate and that The Second Circuit affirmed the jury’s Rather, the compliance efforts are this is a continuing duty that applies guilty verdict against the company facts that may be considered by the when the vessel calls at US ports. The because the operation of the engine jury in determining whether the crew MARPOL treaty provides for flag state room and record keeping were clearly was acting “to benefit” the company. jurisdiction for compliance within within the scope of employment for Compliance efforts are also relevant

© Gard AS, December 2013 33 and mitigating factors considered by In introducing the framework, ICS and understood and followed by personnel a court in determining the proper fine ISF acknowledge the prosecution of serving aboard their ships. While many after conviction. companies, particularly in the US, for ship operations can be sub-contracted, MARPOL violations and comment liability for proper performance remains Corporate responsibility for that “prosecuting authorities have with the owner and operator. Regular, environmental compliance requires identified the absence of a systematic documented on-board audits of a vigorous and proactive approach approach to identifying and managing shipboard environmental compliance For many years, Gard has been warning compliance with environmental with oversight by senior shore side members about the severe penalties requirements as a common failure”. management are an absolute necessity for violations of MARPOL through An effective compliance plan with for effective compliance efforts. circulars, Gard News articles and demonstrable crew training in proper Vigorous and proactive management of seminar presentations. This risk is not use of the pollution prevention shipboard environmental compliance just in the US but includes European equipment and company environmental will in most instances prevent practices port and flag states as well. Despite policy will, as the Second Circuit has leading to prosecution in the US and, in such warnings by Gard, other Clubs indicated in the Ionia decision, provide the event a crew member does violate and shipping associations, shipowners a defence to vicarious corporate company policy, will provide the owner and operators continue to be charged criminal liability in rebutting the and operator with the best defence for vicarious liability for record keeping contention that an illegal discharge available under APPS to corporate violations masking illegal discharges. and false record keeping were for the vicarious liability for the wrongful The US prosecutors offer a reward in “benefit” of the company and within actions. the form of a portion of the fine to crew the “scope of employment”. members who report violations. So- Further information called “whistleblower rewards” are now The guidance is relevant to preventing For more information about MARPOL well-known in the crewing community all forms of pollution but can be read in violations in the US readers should refer and an undeniable incentive to report conjunction with the “Shipping Industry to: wrongdoing not to the company but to Guidance on the Use of Oily Water the authorities. Gard has repeatedly Separators”, also published by ICS/ISF. Gard News articles: advised members that in order to Gard recommends both documents to – US law – Oil record book violations minimise risk they must implement a members. Both can be found at www. (issue No. 192); vigorous environmental compliance marisec.org/environmental-compliance. – The greening of the deep blue sea – programme and actively audit Corporate environmental compliance compliance aboard their vessels. Gard The MARPOL requirement that oily today (issue No. 191); recommends that members benchmark waste water be processed by an – US Coast Guard formal policy on their programme against the guidance oily water separator and discharges voluntary disclosure of MARPOL document prepared by the International properly recorded in an ORB were first violations (issue No. 189); Chamber of Shipping (ICS) and the implemented in 1983, more than 25 – Oily water separator bypass in the US International Shipping Federation (ISF) years ago. MARPOL is one of the most – The tables are turned (issue No. 189); “Industry Guidance on Environmental widely subscribed international treaties – ICS/ISF guidance on environmental Compliance – A Framework for with virtually all of the maritime nations compliance (issue No. 189); ensuring compliance with MARPOL”.6 as signatories. The risks of violation of – US Coast Guard new Oil Record The guidance document includes such the treaty requirements have been very Books (issue No. 188); topics as management responsibility, well publicised by the P&I Clubs as well – MARPOL Annex VI – New risks and corporate and individual responsibility, as other shipping organisations. No challenges for owners and charterers training, awareness and competence, prudent ship operator can send ships (issue No. 187); waste stream analysis and budget, to sea today without an environmental – Waste management – From oily water technical equipment, control devices, compliance plan that includes proper to plastics (issue No. 186); documentation, internal reporting, crew training and regular audits. – US law – MARPOL violations in the US external reporting and audit systems. (issue No. 184); While each company must compose It is important to remember that the – MARPOL Annex VI – Solving the low and execute its own environmental mere institution of a compliance plan sulphur issue (issue No. 184); compliance programme in conformity alone will not exonerate an owner/ – Recent changes in US regulations with its culture and needs, all operator from culpability for MARPOL/ (issue No. 182); programmes should address the APPS violations. The shipowner and – Oil and water don’t mix (issue No. components set out in the ICS/ISF operator must be proactive in ensuring 180); framework. that their environmental polices are

Footnotes 1 United States v. Ionia Management S.A., No. 07-5801-cr, 08-1387-cr (2d Cir. 2009), 2009 U.S. App. LEXIS 902 (decided Jan. 20, 2009); 2009 AMC 153. 2 United States v. Jho, 534 F.3d 398 (5th Cir. 2008). The Jho decision is discussed in the article “US law – Oil record book violations” in Gard News issue No. 192. 3 The Act to Prevent Pollution from Ships is intended to implement the MARPOL Convention but the requirement to “maintain” the ORB is not explicit in MARPOL. Rather, the MARPOL regulations refer to making full and complete entries and keeping the ORB for examination for at least three years following the last entry. See “Implications of the Jho Doctrine”, by Dennis Bryant, Senior Maritime Counsel, Holland and Knight, August 2008 at www. marinelink.com. 4 Amicus curiae (plural amici curiae) is a legal Latin term, literally translated as “friends of the court” and refers to someone who volunteers to advocate a position before a court even though they were not a party to the case itself. In the Ionia case a number of business and legal defence associations were amici, namely: Chamber of Commerce of the United States, Washington Legal Foundation, Association of Corporate Counsel, National Association of Criminal Defense Lawyers, National Association of Manufacturers and New York State Association of Criminal Defense Lawyers. 5 Review by the US Supreme Court is discretionary and relatively rare. 6 See article ”ICS/ISF guidance on environmental compliance” in Gard News issue No. 189.

© Gard AS, December 2013 34 – Pollution – Ships, crews and shore – US Environmental Protection Agency Risk of oil pollution versus vessel’s side management face ever-increasing (No. 16-08); safety (No. 06-01). fines and prison sentences (issue No. – US Coast Guard – Formal policy 175); on voluntary disclosure of MARPOL P&I Member Circulars: – Environmental crime – Myths and violations (No. 13-07); – International Convention for the reality (issue No. 167); – Environmental crime – Oil water Prevention of Pollution from Ships 73/78 – The United States Ocean Dumping discharges off the East Coast of Canada MARPOL – Oily Water Separators (No. Act (issue No. 159); (No. 14-02); 03/05). – Discharge of oil prohibited (issue No. – Environmental Crime – Myths and 152). Reality (No. 05-02); – Oily water separation and discharge: Loss Prevention Circulars: Discharge of oil prohibited (No. 07-01); – New Permit Requirements for Vessels – Oily water separation and discharge:

Gard News 189, ICS/ISF guidance February 2008/April 2008 on environmental compliance

ICS and ISF publish guidance for technical equipment, control devices, their own practices and determine ensuring compliance with MARPOL. documentation, internal reporting, any additional steps that may be external reporting and audit systems. needed to ensure compliance with The International Chamber of Shipping While each company must compose environmental protection obligations. (ICS) and the International Shipping and execute its own environmental The guidance is relevant to preventing Federation (ISF) have published a new compliance programme in conformity all forms of pollution but can be read in leaflet: “Shipping Industry Guidance with its culture and needs, all conjunction with the “Shipping Industry on Environmental Compliance – A programmes should address the Guidance on the Use of Oily Water framework for ensuring compliance components set out in the ICS/ISF Separators”, also published by ICS/ with MARPOL”. The framework is framework. ISF. Gard commends both documents intended to be used by shipowners and to members. Both can be downloaded operators as a template for review of In introducing the framework, ICS and at www.marisec.org/environmental- company environmental compliance ISF acknowledge the prosecution of compliance. programmes. The framework is companies, particularly in the United supported by BIMCO, Intertanko, States, for MARPOL violations and Intercargo, OCIMF and SIGTTO. comment that “prosecuting authorities have identified the absence of a The guidance document includes such systematic approach to identifying topics as management responsibility, and managing compliance with corporate and individual responsibility, environmental requirements as a training, awareness and competence, common failure”. The framework is a waste stream analysis and budget, tool for companies to use in reviewing

Gard News 180, Oil and water don’t mix November 2005/January 2006 By Captain Helge Oliversen, Project Manager, Norwegian Training Center, Manila

Introduction chemicals. In addition, MARPOL 73/78 or marine engine officers in charge of Everybody knows that oil and water requires water from engineering spaces waste oil management should not feed don’t mix. But in the maritime industry to pass through the oily water separator excessively oily water to the OWS. separating oil from water is not a simple (OWS) before discharge to meet the matter, although it is a very important requirement of the 15 ppm limit to The system of waste oil management is one. Any breach of MARPOL 73/78 the oil content of water that can be designed to separate oil from water in can have severe consequences for the discharged to the sea. A corollary to the the oily bilge holding tank so that the shipowner and the officers and crew requirement to separate oil from water water fed to the OWS will no longer involved. Failing to separate one from before discharge is the requirement for contain so much oil. However, knowing the other could pollute the world’s all vessels to maintain a sludge tank to from experience that this system is bodies of water and cost shipowners store oil wastes. Sludge generated by prone to malfunction due to human and responsible officers a lot of money the OWS must either be incinerated or negligence, NTC-M has designed a in fines, or even land them in jail.1 In pumped ashore. support sub-system called physical tonnage terms, the most important separation, composed of cascading pollutant resulting from shipping MARPOL 73/78 has six annexes. Annex tanks of differing elevations. Using the operations is oil. I details regulations for the prevention well-known fact that oil floats above of pollution by oil. A very important water, the cascading tanks capture The Norwegian Training Center – regulation under this Annex is the water that settles below each tank Manila requirement that every ship should have and forward the oilier portion to the (NTC-M), which was established in 1990 an Oil Record Book, which should have succeeding tanks. Only the water to provide relevant training to Filipino accurate and complete daily records of captured in this process is finally fed seafarers serving on its members’ ships, relevant machinery space operations. to the OWS for further filtration. In has joined with Hoegh Fleet Services Proper use of the Oil Record Book is this way, the effect of possible human to create a five-day course entitled emphasised in the course. Another negligence is reduced in the process “Bilge Water/Waste Oil Operational important regulation covered in the and the OWS is not taxed excessively. Management”. The course is supported course is the outcome of the 49th This will of course prolong the life of the with training material from Gard. session of the IMO Marine Environment OWS. Protection Committee (MEPC49). Contents of the course Conclusion The course is designed for marine deck Practical training and exercises The Bilge Water/Waste Oil Operational officers and marine engine officers and The course has six practical exercises Management Course has been warmly provides participants with an effective that take the participants through received by the industry since it was refresher on waste oil management. the stages of bilge water and waste introduced as a pilot course by NTC-M Aside from reminding them of the oil management. For this purpose, in 2004. Attendance has always been details of bilge water and waste oil a laboratory has been set up inside very good. Now that Bilge Water/Waste management, the course aims to the premises of NTC-M simulating all Oil Operational Management is offered heighten their awareness of the need the components that make up a bilge as a regular course, NTC-M hopes it will to be responsible officers, especially water/waste oil management system. be able to contribute to protecting the in dealing with waste matters that can The laboratory simulates a bilge environment from oil pollution, having a pollute the sea. This is in line with NTC- well where bilge water and waste oil positive impact on the human factor in M’s key objective to improve the human accumulate, an oily bilge holding tank ship operations. factor in ship operations. with a separated oil tank containing mostly oil and a bilge holding tank The contents of the course are as containing mostly water and an OWS follows: that filters oil from water down to less than 15 ppm (the permitted amount Theoretical upgrading and of oil in water that can be thrown awareness overboard), a separate oil tank, an The course covers applicable marine incinerator waste tank and a holding pollution laws and regulations tank to port facilities. The exercises extensively. Among the regulations is focus on the OWS systems and MARPOL 73/78. This is one of the most operation. The heart of the system – or, important global conventions for the should we say, kidney or liver – is the prevention of pollution from ships. It OWS, which takes care of filtering oil governs the design and equipment from water. As such, the course stresses of ships, establishes a system of that the OWS should not be overly certificates and inspection and requires taxed. As a person should not take states to provide reception facilities excessive levels of alcohol so as not to for the disposal of oily waste and destroy the liver, marine deck officers

Loss Prevention Circular Environmental Crime – No. 05-02 Myths and Reality

Prosecutions of shipowners and Since the MARPOL requirements have and provides jurisdiction in the federal crewmembers in the United States been in force and to save themselves criminal court over both the individuals criminal courts for environmental crimes time and trouble in dealing with involved and the company. have recently hit the headlines in both the less effective older units, some industry and general news media. The creative engineering crewmen have Myth: “The penalty for bypassing the purpose of this article is to explain the devised ways to circumvent the OWS OWS is a $5,000 administrative fine background for the spate of high profile or the monitoring equipment in order under MARPOL” criminal investigations and prosecutions to discharge oily water overboard. This is a dangerous half-truth. In as well as to explode the myths that According to government allegations the United States the crime charged may lead some in the industry to in the US investigations, this has been is presenting a false ORB and the wrongly conclude that they have little or done by either piping around the OWS maximum fine against the company no exposure for similar treatment. or flushing the oil content meter with under the US criminal sentencing seawater to push more water through guidelines is $500,000. This fine may The regulatory background the meter and fool it into registering be doubled if the violation resulted To put it in simple terms, the oil content at less than 15 ppm. This in financial gain for the company. For International Convention for the is not to suggest that many crewmen example, Carnival Cruise Line in a Prevention of Pollution from Ships fail to comply with environmental plea agreement recently accepted an (MARPOL 73/78) provides that oily requirements. But for those few that $18,000,000 fine for presenting false water discharge from bilges shall not do, the sanctions for the shipowner or ORBs on six of its ships. exceed 15 parts per million (ppm) operator can be devastating. unless the discharge is necessary for Additionally, crew involved may be securing the safety of the ship or saving Myths, Dangerous Half Truths and prosecuted individually and put in jail! life at sea. MARPOL 73/78 further Painful Reality The maximum penalty upon conviction requires ships to process oily water in We now turn to some widely held but for individuals is five years incarceration an oily water separator and to monitor incorrect assumptions about violation and $250,000 in fines. the discharge with detection and an of MARPOL regulations with respect to alarm system that shuts off discharge the current criminal prosecutions in the Myth: “The P & I Club will reimburse in the event it exceeds 15 ppm while United States for environmental crimes. the fine under its cover for pollution” triggering an alarm. Gard’s Protection and Indemnity cover, Myth: “Violation of MARPOL in like that of all Clubs in the International MARPOL 73/78 further requires the International Waters is of interest Group, is a named risk cover. The risks ship’s crew to maintain an Oil Record only to the Flag State.” covered are set out in Gard’s Statutes Book (ORB) and to record discharges, It is true that the convention and Rules. Gard’s Rule 38 – “Pollution” both those meeting the 15 ppm contemplates that enforcement actions expressly excludes fines. Gard’s Rule requirement and those exceeding it (for will be taken by the Flag state, that is, 47 – “Fines” covers fines and penalties example, in an emergency). Port State where the vessel is registered. This imposed upon a Member by any control authorities may inspect the does not mean, however, that the court tribunal or other authority of ORB. In the United States, the United authorities in the United States are competent jurisdiction for or in respect States Coast Guard (USCG) does port uninterested in policing worldwide of the accidental escape or discharge State inspections for compliance with violations of international pollution of oil. Intentionally bypassing the MARPOL 73/78. MARPOL 73/78 is laws. Read on. OWS or flushing the sensors and implemented in the various signatory pumping oily water overboard is not countries by domestic legislation. Myth: “The United States has no considered by the Association to be MARPOL 73/78 regulations call for jurisdiction to prosecute without accidental. administrative proceedings and fines pollution in U.S. waters.” and penalties for violation. It is the Wrong. Recent criminal prosecutions Gard’s pollution and fines rules were flag state that administers the penalty have not involved pollution of US clarified and narrowed in policy year provisions under domestic regulations. waters. MARPOL 73/78 requires 2000 in line with a model rule adopted that entries be made in the ORB for by the International Group of P & I Shipboard practice discharges. The ORB is routinely Clubs. Thus, under the current rules, Oily water that collects in the engine reviewed during port State inspections no Club in the International Group room bilges was often pumped conducted by the USCG. If the crew covers fines as a matter of right for overboard in international waters before has bypassed the OWS or flushed intentionally pumping oily water MARPOL 73/78 became effective in the sensors and discharged oily water containing 15 ppm overboard or for 1983. At the time of implementation, overboard but recorded the discharges falsification of an Oil Record Book. the technology for oily water separation as “clean” the company may be was less effective than it is today. The charged with violation of US law for A final word of Warning bilge tank capacity tended to be presenting a materially false document The USCG has intensified its focus on small and the OWS were inefficient in to a US authority. This is a crime under Oily Water Separators and Oil Record processing the oily water. general criminal law in the United States Books, specifically looking for violators.

© Gard AS, December 2013 37 The USCG inspections involve both requirements in the first place. That covered by Gard is the result of oily large operators and single ship means the company must have water separation, overboard discharge companies. USCG Inspectors aided by a well-monitored environmental and oil record book anomalies. As other state and federal agencies look compliance program including ship a result, Gard released two loss for evidence of bypass piping, including audits, upgrading of equipment as prevention circulars on environmental wear patterns indicating removal of required and training. If caught up in and safety concerns regarding oily fittings or even fresh painting to cover an investigation, the shipowner will water separation (Loss Prevention wear patterns. If there is suspicion of need to immediately obtain advice of Circular 05-01 and 06-01). Please see bypassing, the crew may be detained qualified criminal counsel. One of the the Gard website at for questioning under Grand Jury biggest mistakes that can be made www.gard.no for copies of these Subpoena, the ship records and is to destroy or conceal evidence in a circulars. equipment will likely be seized and criminal investigation for to do so will vessel detained. bring additional criminal charges of obstruction of justice. The only effective way to avoid investigation and prosecution is The single most frequent port State not to violate the MARPOL 73/78 detention deficiency item for vessels

Loss Prevention Circular No. 06-01 Oily water separation and discharge: Risk of oil pollution versus vessel’s safety

Introduction present circular contains a summary of course, but it should be noted As part of our overall loss prevention of that second article, which we hope that there is also an overriding issue activities, Gard Services regularly will assist Members and Clients in involved: the safety of the vessel in an monitors port State detentions from the staying vigilant in light of the potential emergency situation. In case of water Paris Memorandum of Understanding costs associated with an incident, ingress and flooding of the engine (MoU), Tokyo MoU and United States fines, port State detentions and the room or the cargo holds, the vessel Coast Guard (USCG). In 2000, there safety implications related to oily water needs a fully working and readily was a total of 131 detentions of ships separation and discharge. operational bilge pumping system. entered in the Gard P&I portfolio. Oily Therefore, the overboard connections water separation and discharge related Environmental and safety matters from the bilge pump should not be items were the single most frequent During condition surveys of vessels, blocked by locked hand wheels, blank deficiency cited. Similar results were the Association normally notes that flanges or by removed spool pipes. It also observed in the detention of Masters and Chief Engineers enforce should be noted that SOLAS, Chapter vessels entered in the Gard Marine a strict policy regarding pumping II-1, Regulation 21, as well as relevant portfolio for 2000 (147 detentions and of bilge water, in order to avoid any Class rules, require a vessel to be the second most cited deficiency). We oil spill. Port State control officers equipped with a bilge pumping system are not satisfied with these figures. inspect engine room pipelines and that should be operational under all As a result, we believe it is necessary oily water separating equipment to practical conditions. In case of a sudden to revisit this issue for Gard Services ensure compliance with the MARPOL flooding of the engine room, the bilge Members and Clients. regulations. Fines and detentions pumping system must be able to be are not popular. To guard against started without undue delay. The article “Discharge of oil accidentally pumping overboard engine prohibited”, which appeared in Gard room bilge water which has not been So is there a problem in complying with News issue No. 152 (December 1998/ cleaned, shipside valves are sometimes both MARPOL and SOLAS? Not really, February 1999) (also reproduced as chained and padlocked or lines are if one keeps in mind that the MARPOL Gard Loss Prevention Circular 07- even blind flanged, all in an effort to 73/78 regulations are meant for non- 01) warned against the implications reduce the risk of an oil spill. At times, emergency operational situations. In of pumping oil and oily bilge water such remedies are requested by port Annex I of MARPOL 73/78, Regulation overboard, and was followed by State control officers, and are willingly 9 deals with the control of oil discharge another article on the same topic in installed by the ship’s crew. and Regulation 10 covers methods for Gard News issue No. 155 (September prevention of oil pollution from ships 1999/November 1999), titled “Risk of oil All efforts to avoid polluting the seas within a special area, but Regulation 11 pollution versus vessel’s safety”. The and coastal areas are appreciated, provides exceptions from both, in the

Oily water separator (a) the discharge into the sea of oil or oily mixture necessary for the purpose of securing the safety of a ship or saving life at sea; or (b) the discharge into the sea of oil or oily mixture resulting from damage to a ship or its equipment: (i) provided that all reasonable precautions have been taken after the occurrence of the damage or discovery of the discharge for the purpose of preventing or minimising the discharge; and (ii) except if the owner or the master acted either with intent to cause damage, or recklessly and with knowledge that damage would probably result; or (c) the discharge into the sea of substances containing oil, approved by the Administration, when being used for the purpose of combating specific pollution incidents in order to minimise the damage from pollution. Any such discharge shall be subject to the approval of any Government in whose jurisdiction it is contemplated the discharge will occur.”

In view of Regulation 11, MARPOL and SOLAS are not in conflict with each other and it is important that all authorities inspecting a vessel for compliance with MARPOL understand this.

Blocking the overboard pipe from the main bilge pumps should never be done, as this would seriously affect the safety of the vessel and would be in conflict with SOLAS and Class Oily water separator. requirements. In the interest of the coastal States, at times port State control officers seem to pay more attention to the MARPOL regulations than to the corresponding SOLAS regulations. A conflict of interest may occur when the bilge pump of a vessel is also used for ballast water and in some cases even for emptying a sump tank. Oil remains in the pipeline may not be large in quantity, but will put harbour authorities on full alert if inadvertently pumped overboard with ballast water. In some such cases port State authorities have required blanks inserted in the pipeline or the locking of valve handles. This may secure against oil pollution, but as pointed out, may

Overboard line for cleaned bilge water from the oily water separator. The hand wheel has been chain locked by the vessel’s Chief Engineer at the request of port State control authorities. A seal has also been fitted to the chain.

On the other hand, there should be no excuse for pumping oil overboard through pumps serving a dual purpose. It should always be ensured that all pipelines, whether used for clean bilge or ballast water, are free from oil contamination prior to using the bilge/ ballast pumps for direct overboard discharge. Such verification should be included in the operational procedures.

It should also always be clear to a vessel’s crew that sludge tanks, waste oil tanks and oil drain tanks are not allowed to have any direct connection overboard (MARPOL 37/78 Annex I, Regulation 17(3)). and that the content of such tanks must be discharged to reception facilities ashore through the standard discharge connection required (MARPOL 37/78 Annex I, Regulation 19), if not disposed of in an incinerator on board. If required by harbour authorities, pipelines from such tanks may be closed off to prevent oil pollution, but not the overboard pipeline from the main bilge pump.

In case Members face conflicting requirements from various authorities concerning the issues addressed above, they should always consult the vessel’s Class Society, which has Overboard valve for main bilge/ballast line. The hand wheel has been fitted approved the vessel’s bilge pumping with a chain and padlock at the request of the port authorities. This is not system and normally has also issued the a good practice as the vessel's bilge pumping system is no longer readily International Oil Pollution Prevention operational. Certificate. In any case, all changes to a vessel’s bilge system should always be informed in advance to the vessel’s Class Society, for proper approval.

Gard News 157, The finer points of oil March/May 2000 pollution

Fines are monetary impositions made fine of a few thousand US dollars on addition to this wider scope, pollution by a competent court, tribunal or the Master.2 In the US prosecutions are fines have recently been the subject of authority in respect of breach of, often complicated and protracted,3 with a stricter attitude in many countries. or non-compliance with, any law or large amounts involved. In Italy a legal regulation. Whether the fine is referred peculiarity permits payment of what In 1997 Greece increased its to as administrative, civil or criminal, can best be described as a donation to maximum fine for polluting the marine all are penal in nature, irrespective of avoid prosecution. environment and breaching related the exact words used.1 A penalty is legislation to GRD 250 million (around generally defined as punishment for P&I COVER USD 738,400) in serious cases. an offence, but given the level of fines It is important to understand that and attitude to their defence in some the Association’s cover for fines is In September 1997 the UK increased countries, there is sometimes a feeling strictly controlled, and in addition to its maximum fine for the offence of that other motivations may exist. the limitations set out in the Statutes discharging an oily mixture into the sea and Rules,4 a Member’s conduct is, (which is unlimited if the case is referred Whilst a fine can also act as a necessary in each case, closely considered. to a higher court) five fold from GBP and important deterrent, fairness is Clearly, there is an important duty on 50,000. A recent case resulted in the sometimes brought into question any organisation not to condone or maximum level of GBP 250,000 being when it is apparent that certain cases encourage the breaking of laws, but imposed.6 are being made examples of, perhaps on the other hand, most pollution for political reasons and/or because incidents are not caused intentionally, In 1997 the US imposed punitive this is expected in an ever more the majority result from human error.5 damages of USD 5 billion in respect environmentally friendly world. Of of the EXXON VALDEZ spill (currently course, in some cases the authorities STRICTER ATTITUDE under appeal) and more recently take a fair and reasonable approach. Oil pollution fines are no longer limited penalties of USD 9.5 million for a spill This approach, however, varies to the offence of the spill itself, and off Rhode Island in January 1996. enormously, irrespective of the facts of as will be discussed below, in some a case. In a recent case, where there jurisdictions fines now exist for failed More often than not, the fine itself is was quite extensive oil pollution, a and/or late notification, and non only part of the actual cost involved. harbour master imposed an on-the-spot co-operation with the authorities. In Security demands to cover possible

Factual and accurate reporting is very important.

© Gard AS, December 2013 41 prosecutions are now commonplace, response efforts. For example, it is often even for the smallest of spills, and found that the amount of oil spilt is often owners are faced with non- underestimated. There is also a danger negotiable demands for cash security the authorities could infer that there is or bank guarantees. Such demands an attempt to cover up the true amount are particularly costly when they cause spilt. Care should also be taken to avoid the ship to be delayed. Delays can also making admissions of responsibility/ result from on board investigations by liability, particularly in circumstances the authorities, who have detention such as collisions or bunkering, where powers available under national laws the source of the spill may be uncertain. and relevant international conventions. There is also the cost of attending any CO-OPERATION legal proceedings, which may involve Whilst genuine disagreement with the crew witnesses and invariably lawyers. authorities may arise, for example, as If the court imposes a fine, the guilty to the source of the spill and response party may also be faced with having to methods employed, co-operation pay the costs of the authority bringing should be extended as much as the prosecution. One should also not possible. The authorities may also want forget the hidden cost of possible to investigate the cause of the spill and adverse publicity. again co-operation should be afforded. Depending on the circumstances it Some of this information should form Whilst the Association is always on hand may be advisable to arrange legal part of the vessel’s standard reporting to give advice, and where appropriate, representation for the owner and/ requirements. assistance, a general guide is outlined or Master/crew. Guidance should be (1) An estimation of the amount of oil below as to what should be borne in sought from the Association via the spilled. mind in terms of potential pollution local correspondent. (2) The type of oil spilled. fines and when a spill occurs or is (3) The date and time the spill occurred alleged to have originated from an The US Oil Pollution Act of 1990 (OPA or was first reported on board (and by owner’s vessel. 90)11 expressly provides for fines in whom). respect of the failure to co-operate, and (4) The position of the spill (e.g., NOTIFICATION in most other states one could expect latitude and longitude, berth, etc.). No matter how small the spill, the a larger fine in case of such failure. The (5) Details of whom the spill was notified applicable and designated coast state appointment of a marine surveyor or to, by whom, when and with what authorities must be notified at the spill expert (as the case warrants), with information. earliest opportunity.7 Failed or late local knowledge and contacts, will (6) A description of any slicks (e.g., reporting will often result in a larger likely be of assistance in resolving any direction of movement, length, breadth fine8 and polluters can no longer disagreement, but if this assistance and appearance) against time. expect not to be caught. Increased is not available it may be advisable (7) Details of any alleged/reported/ co-operation between states with (depending on the circumstances) to observed pollution damage. regard to surveillance9 and improved limit action to issuing a protest, so as to (8) Details of any risks of pollution “fingerprinting” techniques are just avoid hampering the response efforts. damage (e.g., to beaches, marinas, two of the factors involved in the etc.). increased number of prosecutions OWN INVESTIGATION AND (9) Details of response and clean-up being witnessed world-wide. The EVIDENCE measures. recent US case concerning the vessel The appointment of a surveyor/expert (10) Details of weather and tide/current. COMMAND illustrates the lengths the should be considered to assist in (11) Details of initial investigations into US authorities are now prepared to go investigating and gathering information source and cause. to seek justice. After fingerprinting the at the scene (such an appointment vessel’s oil to an illegal discharge in may be inevitable, for example, to If the source of the spill is not certain, San Francisco Bay in September 1998, explain technical aspects in court). properly labelled and sealed samples the vessel was pursued by a US aircraft Even if the spill is small, the cost of all oils on board and of the spilled and Coast Guard cutter and boarded involved is far outweighed by the risk oil should be retained for future in Panama. Penalties of USD 9.3 million of not obtaining contemporaneous comparative analysis. Depending on were subsequently imposed. evidence. Such evidence can be vital the circumstances, it may be advisable if it becomes necessary to challenge to have an independent surveyor obtain There is also the obligation on the evidence of the authorities and to these samples in the presence of the ships and offshore units to report, support any defences or mitigating state authority representative, so as to without delay, any observed event arguments available (see below). One avoid disputes regarding credibility. at sea involving a discharge of oil or will also appreciate that, following a Details of other possible spill sources the presence of oil.10 It should be spill, the Master and crew will likely in the vicinity may also be valuable and noted that some legislation permits have many other and often more a record should be made of the type, prosecution of both the Master and important things to do than collecting position, movements, and work of the owner for failure to notify. This should evidence. Inevitably, however, there object observed against time. be borne in mind particularly by will be occasions when a surveyor Masters who might assume that their can not attend before evidence may To support the information mentioned owners would be carrying out the be lost, particularly, for instance, above, it is important to retain relevant notification (and vice-versa). when the vessel spills at sea. In such documentary evidence, e.g., ullage/ circumstances the Master and his crew sounding and maintenance records. Factual and accurate reporting is have to act themselves (nothing should Photographic and/or video records will also very important, primarily so as to pre-empt safety and environmental also be of significant value. avoid misleading the authorities and/ concerns) and in view of this, the sort of or potentially hampering any spill information required is outlined below.

© Gard AS, December 2013 42 OIL RECORD BOOKS may be very difficult to overcome this size of the spill, the type of oil spilled, It is perhaps worth mentioning here at a later date. The same applies to the environmental sensitivity of the that on numerous occasions during the reports made pursuant to internal area, the effects of the spill (e.g., investigation into a spill, the vessel’s investigations into a pollution incident. environmental/property damage log and record books have been found Copies of such reports are often and economic impact), co-operation to be incomplete and/or wrong. Being requested by authorities to assist in with authorities, previous offences/ one of the first items to be inspected their investigations, and if these are spills, investigative efforts, steps taken by the authorities, the Oil Record not disclosed because they contain to prevent re-occurrence, financial Book (ORB),12 is a particular source potentially damaging information, hardship, response and clean-up of errors and omissions. This book adverse inferences may be drawn. measures, and whether a guilty or not is a requirement of the International guilty plea is made. Hopefully, there will Convention for the Prevention of THE PROSECUTION PROCESS be a number of these factors, which can Pollution from Ships (Marpol) 1973 (as If an owner is invited to an interview be relied upon as mitigation. Exposure amended), which most maritime states or to assist an authority with its may also be reduced, in cases where are parties to.13 Most of these states are investigations, or if a notification of a the owner and Master are prosecuted, aware that, under the convention, they prosecution is received, it is advisable if the authorities can be persuaded have the power to take penal action for to contact the Association and seek to drop their prosecution against the any failure to keep the Oil Record Book immediate legal advice. It may be Master.15 up to date and accurate. More often that the legislation under which the than not fines are imposed, sometimes prosecution is being brought is not To conclude, it is now the case that, against both the Master and owner, and applicable or that other more lenient with more fines being pursued, more in many states these are by no means legislation is applicable. As previously vigorously, and for increasing amounts, small.14 mentioned, defences are available, and an alleged polluter can no longer run in some cases action may be limited the risk of not being caught and/or LETTERS OF RESPONSIBILITY to issuing a formal warning - this was not being prepared for prosecution. Letters of responsibility should not be achieved in a recent case handled No matter how small the spill or how confused with letters of undertaking, by the Association in the UK and confident owners may be that they which are offered for the purpose the Member’s proper investigation, are not to blame, the above steps of security. A letter of responsibility co-operation and honesty were key should be considered. Whilst in some is usually sought to obtain at least factors. Fines can often be reduced if instances the authorities may appear an admission of liability. Letters of there are good arguments in mitigation, unconcerned, this does not mean they responsibility are becoming a usual and if claimed costs can be shown will not pursue a fine when the ship, or requirement of many authorities to be unreasonable - it has been her sister, next visits the port.  before releasing the ship/crew, and it known for some authorities to try and is advisable to consult the Association recover some costs which are arguably or its correspondents before any not directly attributable to the spill, signature is added. If the Association like for example the whole cost of a is not consulted, potentially damaging surveillance aircraft’s routine flight. admissions may be made. In some circumstances even the most innocent The amount of the fine usually depends remark can be misconstrued and it on a number of factors, such as the

1 See pages 442 and 443 of the Gard Handbook on P&I Insurance. 2 The case was featured in Gard News issue No. 154 in the article “P&I incidents - Bunkering - How not to do it”. 3 See for instance “P&I incidents - The criminal aspect of oil spills in the US” in Gard News issue No. 155. 4 Rule 47 has recently been amended and is effective as of 20th February 2000. Under paragraph 1c, the Association shall cover “...fines imposed upon the Member in respect of the accidental escape or discharge of oil or any other substance, provided that the Member is insured for pollution liability by the Association under Rule 38, and subject to the applicable limit of liability under the P&I entry in respect of oil pollution risk.” Under paragraph 2c the Association may, in its sole discretion, cover whole or in part “...any fine imposed not upon the Member but the master or Crew member of the Ship or on any other servant or agent of the Member or on any other party, provided that the Member has been compelled by law to pay or reimburse such a fine or that the Association determines that it was reasonable for the Member to have paid or reimbursed the same.” 5 The International Maritime Organization estimates that 90 per cent of pollution incidents are due to human error, the remaining 10 per cent generally considered to be due to some type of technical or mechanical fault. For further information see Gard’s Handbook on Marine Pollution, Second Edition, pages 255 onwards. 6 The fine was reduced on appeal to GBP 25,000. 7 This information should be contained in the vessel’s Shipboard Oil Pollution Emergency Plan (SOPEP) or equivalent emergency response documentation and checks should be made to ensure that the information is correct and up to date. 8 Section 4301 of the US Oil Pollution Act of 1990 expressly states that an organisation can be fined up to USD 500,000 and an individual up to USD 250,000 for such a failure. 9 Surveillance aircraft now use specialist radar equipment, which enables them to detect oily mixtures on the sea surface at night. 10 Article 4 of the Oil Pollution Preparedness, Response and Co-Operation Convention 1990. 11 Section 4301. 12 The ORB must be provided for ships over 400 GT and above and for oil tankers of 150 GT and above. The book has two parts: part I deals with machinery space operations and part II deals with cargo and ballast operations and need only be carried on oil tankers. The book lists various operations (e.g., the discharge of bilges), the details of which must be recorded against the signature of an officer. The Master also signs each completed page of the book. 13 The main part of Marpol 73/78, which includes the ORB requirements under Annex 1, has been accepted by 100 states, accounting for approximately 93 per cent of the world’s gross tonnage. For further information see Gard’s Handbook on Marine Pollution, Second Edition, pages 98 onwards. 14 It should be noted that Rule 47.2.b.vi of the Association’s Statutes and Rules excludes cover for fines resulting from the non-compliance with the provisions of Marpol. 15 The attitude of the UK authorities appears to be that a ship’s Master would usually only be prosecuted if the offence arose from the Master’s personal fault or negligence and if the Master was acting against the owner’s instructions.

Gard News 189, US Coast Guard formal policy February 2008/April 2008 on voluntary disclosure of MARPOL violations

A formal policy on voluntary disclosure otherwise meets the requirement of the flag administration must be notified of MARPOL violations has been issued USCG policy, the USCG may exercise immediately and a request for an by the United States Coast Guard. discretion not to recommend to the US investigation should be initiated”. Justice Department prosecution of the The United States Coast Guard (USCG) company. The policy does not apply if If the vessel trades to the United has issued a formal policy on voluntary there is a pattern of prior violations, or States, the vessel owner or operator disclosure which applies to MARPOL if the violation would likely have been may, in addition to the flag state, also violations that may result in prosecution discovered by the USCG. The full policy consider reporting the discovery and of owners and operators of foreign document can be found at www.uscg. the correction of any false entries in the flag vessels in the United States. The mil/foia/docs/CH-4%20Appendix%20V. oil record book to the USCG in order policy is similar to existing policies pdf. to comply with the voluntary disclosure of other US government agencies, policy. In deciding whether to report to including the US Justice Department, Recall that under US law foreign flag the USCG, prudence suggests foreign in describing the factors that will be shipowners and operators can be and flag owners and operators should considered in evaluating a violation often are prosecuted for entry into US seek immediate legal advice from a for possible criminal investigation or waters with a false oil record book that lawyer familiar with the USCG and prosecution. These policies require conceals discharges of oily wastes that Justice Department policy guidelines that companies have in place a have taken place outside US waters. and MARPOL criminal prosecutions in compliance management system to Discharges in violation of MARPOL general. prevent, detect and correct violations in international waters are violations of environmental regulations. The that are subject to the law of the flag Gard’s Loss Prevention Circular No. 13- “Shipping Industry Guidance on state but the United States does not 07, which can be found at www.gard.no, Environmental Compliance”, published have jurisdiction to prosecute foreign contains details of the policy. by ICS/ISF,1 would appear to address flag operators for the discharge itself all of the requirements for a compliance because the vessels were outside US management system as contemplated waters at the time of the discharge. 1 See article ” ICS/ISF guidance on by the USCG policy. According to the “Industry Guidance environmental compliance“ above. on Environmental Compliance”, If a company promptly and voluntarily “non-compliance with MARPOL discloses a violation to the USCG regulations should be reported to discovered within the company’s the vessel’s flag administration. In the environmental compliance plan, event of the discovery of evidence of including ship audits, and the disclosure intentional discharges of waste, the

Gard News 189, Oily water separator February 2008/April 2008 bypass in the US - The tables are turned

US Coast Guard prosecutes one of authorised the direct discharge (i.e., justice and making a false statement its own staff for alleged oily water not through the oily water separator) of in connection with the release of oily separator bypass. bilge waste overboard into Honolulu bilge water into Honolulu Harbour. If harbour. convicted, he faces a sentence of up For some time now the shipping to five years in prison on each count. It press has contained cautionary The individual in question was a is understood that the investigation is stories of the ferocity with which the Main Propulsion Assistant (MPA) – continuing and that, depending on its authorities in the US pursue shipping presumably an engineer – aboard a outcome, the MPA could face further companies, usually foreign companies USCG cutter. It seems that some of his charges from federal and the State of and their employees, for alleged oily shipmates complained (anonymously) Hawaii authorities, fines and/or lawsuits. water separator bypasses. Usually, that they had been ordered by the It seems that, as his employer, the Coast the accused is faced with a range of MPA to pump into the harbour Guard itself may also face charges, fines allegations, the main one often being approximately 2,000 gallons of bilge and/or lawsuits. the entry of false information in the waste without using the oily water vessel’s oil record book. If the alleged separator (OWS). In May 2006, the There are many who feel that the discharge overboard has taken place complaint was investigated by the US US authorities are over-zealous and outside US waters, the vessel can not authorities. They interviewed engineer punitive in their pursuit and treatment be prosecuted for that act under US colleagues of the MPA, who stated that of seafarers accused of bypassing law, but it can be prosecuted under they had taken part in the operation the OWS and it is not known whether MARPOL. Flag states are responsible described above. Evidence was also the MPA was taken from the vessel for prosecuting MARPOL violations. obtained that untreated bilge water in handcuffs and escorted by armed had been discharged overboard on ten officers, but it would, at least, appear However, the situation is different previous occasions, when the vessel was that they do not have one rule for their when the alleged discharge overboard off Central and South America. own people and one rule for everyone is said to have happened inside US else. waters. In such circumstances, the It is understood that the MPA initially full weight of the US legal system can denied the allegations, but later be brought to bear on the accused. confessed that he had been aware of Somewhat embarrassingly for the Coast what was going on, but had turned Guard, one of their own seafarers is a blind eye to it. The MPA has been facing allegations that he knew of and indicted on charges of obstruction of

Gard News 184, US law - MARPOL November 2006/January 2007 violations in the US

The Third Circuit Court of Appeals rules Mr Abrogar’s counsel appealed the that, as soon as a foreign-flagged vessel in favour of a seaman in a prosecution sentence on the ground that the district with a faulty Oil Record Book crosses for MARPOL violations. court had improperly enhanced the into US waters, an APPS violation has criminal penalty based on government’s occurred, even though the entries were On 18th August 2006 the United States assertion that a six-point enhancement made outside US waters. Court of Appeals for the Third Circuit should be applied for the acts of issued its decision in the case of United discharge that had occurred in The decision is important to seamen States of America v. Noel Abrogar.1 international waters. Mr Abrogar argued charged with or facing charges in the This was the first time an appellate on appeal that the enhancement should US for MARPOL violations. The decision court has considered the sentence of a not be applied since the discharges, must be followed by the district courts foreign seaman convicted of violations while clearly MARPOL violations, were in the Third Circuit and is persuasive of the Act to Prevent Pollution from not violations of US law. authority for the other federal courts.2 Ships (APPS), the United States’ version The Third Circuit decision should not be of the MARPOL Convention. In analysing the scope of MARPOL read as implying that seamen and non- and APPS, the court found that US flag shipowners can avoid penalties Mr Abrogar, a citizen of the Philippines, Congress did not make every violation simply by correctly recording illegal served as chief engineer aboard the of MARPOL by every person a crime discharges in the oil record book.3 Flag MAGELLAN PHOENIX, a Panamanian- under US law. To the contrary, under states do have jurisdiction to punish flag vessel. Mr Abrogar admitted by APPS “Congress and the Coast Guard MARPOL violations in international plea agreement that he knew that those created criminal liability for foreign waters and are increasingly likely under his command had on occasion vessels and personnel only for those to impose hefty fines for deliberate discharged oily water direct to the substantive violations of MARPOL that discharges. sea and he admitted he made false occur in US ports or waters. Stated entries in the vessel oil record book differently, a MARPOL violation is only 1 Case No: 06-125 (3d Cir.) decided 18th to conceal the violations. Following an offence under US law if that violation August 2006, not yet reported. The full the plea agreement a district court occurs within the boundaries of US text of the decision is available at www. judge sentenced Mr Abrogar to serve waters or within a US port.” ca3.uscourts.gov/opinarch/061215p. one year and a day in federal prison pdf. for failure to maintain an accurate oil The Third Circuit held that the district 2 There are 11 numbered federal record book, a crime under APPS. court could not consider the MARPOL appellate courts plus the District of violations that occurred outside US Columbia (Washington D.C.). The Third Those convicted in the federal courts of waters in its sentence calculation Circuit takes appeals from the district the United States are sentenced to fines because these were not offences under courts in Pennsylvania, New Jersey, and imprisonment according to Federal US law and the acts were not conduct Delaware and the US Virgin Islands. Sentencing Guidelines that assign relevant to Mr Abrogar’s failure to 3 Those vessels flying the US flag are points to certain types of conduct for maintain the oil record book while in subject to jurisdiction under APPS for the purpose of guiding the sentencing US waters. Hence the court determined violations within international waters as judges. Here the conduct that provided that the sentence as imposed was well as US ports and coastal waters. enhancement was “the ongoing, too harsh and sent the case back to continuous or repetitive discharge, the district court for re-sentencing. It release or emission of a pollutant into should, however, be noted that implied the environment”. in the court’s ruling is the recognition

Loss Prevention Circular Environmental crime - No. 14-02 Oily water discharge off the East Coast of Canada

Introduction violators caught discharging oily water tank through separation. If any The Government of Canada recently in Canadian territorial waters. equipment is not operating increased its commitment to the correctly, such information protection of wildlife and the Recommendations must be recorded and proper environment on the Canadian east Oily water separation related precautions taken to prevent coast through increased surveillance problems and associated fines can discharge. Oil Record Books are of vessels entering Canadian waters create significant problems for both routinely inspected by port State and illegally discharging oily water. seafarers and companies. Therefore, control authorities. Detention The discharge of oily water is of please consider the following of the vessel and/or fines may particular concern during the months of recommendations: result if the Oil Record Book is November to January when migratory incomplete or has been tampered birds, who are especially susceptible • Gard Service’ Protection and with. to these oily water discharges, are in Indemnity cover, like that of all Canadian east coast waters. Clubs in the International Group, For more information, guidance is a named risk cover. The risks and recommendations on oily water Recent incidents have shown that covered are set out in Gard separation related issues, please refer shipowners and ship managers P&I’s Statutes and Rules. Gard’s to Gard Services Loss Prevention should continue to take considerable Rule 38 – “Pollution” expressly Circular 05-02, Environmental Crimes— precautions to prevent non-accidental excludes pollution fines. Gard’s Myth or reality?, Loss Prevention discharges of oily water. Pollution fines Rule 47 – “Fines” covers fines Circular 06-01, Oily water separation for hundreds of thousands of Canadian and penalties imposed upon a and discharge: Risk of oil pollution dollars have been handed down. Member by any court, tribunal versus vessel’s safety, and Loss or other authority of competent Prevention Circular 07-01, Oily water The problem jurisdiction, for or in respect separation and discharge: Discharge of The illegal discharge of oily water in of the accidental escape or oil prohibited. For more information on non-compliance with MARPOL 73/78 discharge of oil. the impact of oil discharge in Canadian is a problem that continues to concern waters, please see the World Wildlife the maritime industry. The problem • The oily water separator installed Fund report “Seabirds and Atlantic tends to be particularly acute off of on board must be of an approved Canada’s Ship-Source Oil Pollution” at the coast of eastern Canada during type and function properly. the following website address: the months of November to January. www.wwf.ca/en/news_room/ Many vessels transit closer to shore to • The oil content meter, the pdf/02_09_24_seabirdsreport.pdf. take advantage of the ice covers that monitoring device and the alarm/ form during the winter. The discharge automatic-stopping device must of oil has had a significant impact on function correctly. migratory birds that transit through the area during the winter months. It • Reduce the oil leakages to the is estimated that as many as 300,000 bilges by collecting oil in drip seabirds are killed on the Canadian trays and gutters draining into Atlantic east coast annually. Such a waste oil tank. Ensure that the devastation has led the Canadian drain pipes from the gutters are authorities to focus their attention not clogged by deposits or rags. and resources on prevention of such It is, therefore, important that incidents and the prosecution of crew does not leave rags or other violators. material in drip trays and gutters.

Canadian response to this problem • Oil sludge from engine rooms The Canadian authorities have must not to be pumped enhanced their monitoring of vessels overboard. If not disposed of in through the use of surveillance and an incinerator, the oil must remain ship-traffic monitoring to catch on board until discharged to violators. This includes both air shore-based reception facilities. and sea surveillance, and satellite technology. For example, recent • Accurately record all information satellite technology such as RADARSAT required to be entered in the has improved marine surveillance by Oil Record Book. All handling the use of Synthetic Aperture Radar. of waste oil must be recorded, This radar can pierce cloud cover both including quantities sent for day and night. In addition, significant incineration to shoreside fines are being handed down to reception facilities, and to sludge

Gard News 176, Pollution - The hard line taken November 2004/January 2005 by the French criminal courts on oil discharge from ships By Oliver Purcell and Guillaume Brajeux, Holman Fenwick & Willan (Paris)

There is growing public interest in environmental issues in France.

There has recently been considerable outrage, but finally caused politicians to English Channel), Brest (for the Atlantic), press coverage of the attitude adopted take certain measures. and Marseille (for the Mediterranean), by French prosecutors in relation to who are now using all their powers, in oil discharge from ships, and reports New approach particular that of detaining ships. This of increasing fines ordered by French The recent changes in the law which has proved to be a much more effective criminal courts. have generated the most interest from way of securing the payment of fines, the press do not concern oil pollution and provides publicity intended both Introduction resulting from casualties (such as those to demonstrate to the public that Whilst the law has recently changed, mentioned above), but rather pollution government policy is being applied, and in particular has significantly resulting from the discharge of oil and to deter the shipping community increased the level of fines which can or oily residues from ships, whether from causing pollution in French waters. be awarded by the courts, the principal voluntary or accidental (but unrelated 2. Maximum fines have been change is probably in the attitude to a marine casualty). The French considerably increased. The categories adopted by French prosecutors, who authorities have been relatively slow in of persons who may be found liable to are now applying powers which they taking effective measures to deal with pay the fine have also been broadened have arguably always had. such pollution; they are in effect now to include ship operators and the trying to catch up for time previously “real” or effective owner or manager The change in attitude results lost. of a vessel; however, the courts have to from growing public interest in date not had to apply these changes, environmental issues, and from The manner of achieving this has been intended to facilitate payment of the increasing public discontent with twofold: fine, wherever a ship has been detained marine pollution. Recent casualties, 1. By tinkering with jurisdictional rules, and an owner has paid cash into court such as the ERIKA and the PRESTIGE, greater responsibility has been given in order to secure payment of the fine. have not only generated public to local prosecutors in Le Havre (for the

© Gard AS, December 2013 48 Power over EEZ through the system has an oil content Under article L218-28 of the French France’s power to exercise control over not exceeding 15ppm. Environment Code, reports prepared not only its territorial waters but also by certain sworn officers of the state, over its Exclusive Economic Zone (EEZ)1 Increased surveillance including Customs agents, constitute results both from the 1982 Convention Whilst some pollution cases have proof of the events related therein on the Law of the Sea and from occurred in the Mediterranean, the vast until such time as their contents are MARPOL Conventions. majority have arisen in the Atlantic, disproved. This provision in effect usually midway along a line drawn reverses the burden of proof which Pursuant to the Convention on the Law between Finisterre (in Spain) and normally applies in criminal matters; as of the Sea, a state has jurisdiction over Ouessant (in Brittany); this is one of a result of this provision, the accused both its territorial waters and its EEZ, for the principal routes for all sea traffic to has the burden of proving that the certain purposes. Pursuant to article 4(2) or from Northern Europe, and is well vessel was not polluting, rather than the of MARPOL: within France’s EEZ. This is the main reverse. “Any violation of the requirements area patrolled on a regular basis by of the present convention within French Customs aircraft, although Navy The prosecution may also rely on other the jurisdiction of any Party to the aircraft or other authorities also patrol evidence, for example that there were Convention shall be prohibited and the area, and have similar powers. no other vessels in the vicinity, that sanctions shall be established therefor discharge seemed to stop as soon as under the law of that party. The Customs officer or other authorities the Customs aircraft flew overhead, on board these aircraft will follow what or that the Oil Record Book is not Whenever such violation occurs, the they consider to be slicks or traces of properly kept (this list is obviously party shall either: oil. If they locate a vessel which they not exhaustive). Nevertheless, it is (a) cause proceedings to be taken in consider to be the cause or origin of essentially the official report prepared accordance with its law; or pollution, they will contact such vessel, by Customs, together with the (b) furnish to the Administration of the inform the master of the fact that his photographs taken, which form the ship such information and evidence as vessel appears to be discharging oil or main evidence on which French criminal may be in its possession that a violation oily residues, and seek information on courts have found vessels to be guilty has occurred.” (our emphasis) the vessel and her future destination. of breaches of the relevant MARPOL regulations. Thus pursuant to international Response conventions, the French courts and If a vessel is contacted or spots a The photographs taken are quite often criminal prosecution authorities are Customs or Navy aircraft in the vicinity, of poor or questionable quality; this entitled (and even obliged) to ensure a number of practical steps may be has not, however, prevented the French compliance with international rules on taken: courts from considering such evidence the prevention of oil pollution within – The master and chief engineer should to be sufficient for a finding of guilt. The their jurisdiction, which includes for check that the oily water separator reason for this is that the majority view these purposes France’s EEZ. equipment is functioning correctly; of experts who attended discussions – If the vessel is operating its oily which led to the signing of the Bonn Prohibition water separator, and this is functioning Agreement2 considered that residues The basic rule under Rule 9 of MARPOL properly (and thus discharge is less with less than 15ppm oil content would is as follows: than 15ppm), the vessel should not not be visible from the sky, whereas “... any discharge into the sea of oil stop discharging when the aircraft flies residues with an oil content in excess or oily mixtures from ships to which overhead; of 15ppm would be visible. This simple this Annex applies shall be prohibited – The master should respond but relatively arbitrary approach has except where all the following immediately to any VHF call; convinced a number of courts that conditions are satisfied: ... – The master should ask for a the evidence before them showed oil (b) from a ship of 400 gross tonnage thermographic image and/or for pollution, rather than simply showing and above ... samples of any alleged slick to be the trace left by the wake of a vessel or (i) the ship is not within a special area; taken; other natural phenomena such as the (ii) the ship is proceeding en route; – The master should encourage the effect of wind on the water’s surface. (iii) the oil content of the effluent does authorities to come on board at the not exceed 15 parts per million (ppm); next port of call; Detention and – Nothing should be modified in the Prosecutors have also now taken the (iv) the ship has in operation equipment engine room; initiative of ordering vessels suspected as required by Regulation 16 ...” – The owners or managers should by Customs officers to be polluting compile evidence that the vessel to deviate to the nearest French port. Regulation 10 of MARPOL specifies regularly uses discharging facilities in Pursuant to article L218-30 of the that, within special areas, any discharge ports; Environment Code, prosecutors have is prohibited; as far as France is – The owners or managers should this power, and may require payment concerned, these special areas are the arrange for a joint survey of the vessel into court (to secure payment of the Mediterranean and the English Channel with the authorities at the next port. future fine, the presence of the master and its approaches. at the criminal action and payment of Evidence any damages awarded to civil claimants) Outside special areas, only discharge The authorities will invariably also take before allowing the vessel to sail. The not exceeding 15ppm is authorised, photographs. These photographs, level of security required by prosecutors provided the ship is operating together with the official report drawn is often indicative of the level of fine equipment which complies with up by the officer on duty, will constitute which they may seek from the courts. Regulation 16; the latter is oil filtering the principal (and often exclusive) equipment (oily water separator) evidence upon which the prosecution Increased fines which will ensure that any oily mixture will rely to pursue a criminal action The “Perben 2” law,3 which came into discharged into the sea after passing against a master. force in March 2004, increased the

© Gard AS, December 2013 49 potential fine to EUR 1 million, or the practice will be for prosecutors to take Conclusion value of the vessel, or four times the the preventive measure of ordering It should be borne in mind that value of cargo on board and freight. a vessel into the nearest French port. President Chirac has made the fight To date, the maximum reported fine Failure to comply with such orders from against oil pollution one of the three ever ordered has amounted to EUR the French authorities exposes a master priorities of his presidency. The above 500,000; however, further increases can (and in certain circumstances owners) to changes in approach reflect this shift be expected. an additional fine. in policy, and ship owners or operators can expect that ever-increasing levels The new provisions have also extended Two additional points should be of fines will be sought by prosecutors. the categories of persons who may mentioned: Courts should, however, be encouraged be ordered to pay the fine, to include – We have considered above the most to take a more balanced or better an owner, operator, or the effective common cases, namely oil discharge informed view of all the evidence owner or manager of a vessel. Whilst within France’s EEZ, and the fines available; for the time being, however, the trend had been for owners to be which are payable. If discharge occurs acquittals remain rare. Caution must joined as co-accused, this practice may within France’s territorial waters, a therefore be exercised. disappear if prosecutors systematically foreign master will also face the risk of detain vessels to obtain security for imprisonment (French masters face this payment of the fine. In this respect, it risk even in France’s EEZ). should be remembered that a vessel – Other interested parties, such as may be detained as the instrument environmental associations, may join of the alleged offence, irrespective in the criminal action as civil claimants. of the person or entity which may The damages which they are usually subsequently be pursued. awarded remain for the time being relatively modest, but are likely to Whilst other methods of enforcement increase in the future. The court in are available once a judgment has been Marseille has very recently awarded rendered, it appears that the future EUR 18,000 to each such claimant.

1 200 nautical miles from base lines as defined by the 1982 United Nations Convention on the Law of the Sea, signed at Montego Bay. 2 Agreement for Cooperation in Dealing with Pollution of the North Sea by Oil and Other Harmful Substances, 1983. 3 A French law on organised crime and delinquency, named after the French justice minister, Dominique Perben.

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