M/T Pacific Ruby and the Oil Pollution Act and the Act to Prevent Pollution from Ships
Are the results the same when the action giving rise to the criminal charge takes place outside the territorial waters of the United States? It may seem so. On December 19, 2006, the United States Department of Justice (“DOJ”) announced that Overseas Shipholding Group Inc. (“OSG”) had agreed to plead guilty to thirty-three felony counts related to illegal dumping of waste oil, violations of the Clean Water Act/Oil Pollution Act and the Act to Prevent Pollution from Ships. As a part of its plea, OSG agreed to pay a $37,000,000.00 fine. According to the DOJ, OSG is a United States corporation headquartered in New York and is one of the largest publicly traded tanker companies in the world. The $37,000,000.00 penalty was allocated as $27,800,000.00 for the criminal fine and $9,200,000.00 for organizational community service payments which will fund various marine environmental projects across the United States. You can read the rest of the press release on the DOJ’s web site at www.usdoj.gov.
In its press release, the DOJ stated that OSG engaged in “deliberate vessel pollution from nine ships” and presented “false pollution log entries in three additional ships, in six U.S. ports around the nation.” The press release continued: “’OSG has engaged in repeated and deliberate pollution of our oceans,’ said Acting Associate Attorney General William Mercer. ‘What is more disturbing is that OSG’s management failed to uncover or stop this illegal activity after allegations were brought to the attention of management on several occasions and again after the initiation of the government’s investigation. This penalty has secured justice against OSG and will serve as a deterrent for all other companies who attempt to circumvent the law for their own financial gain and at the expense of the environment.’”
The DOJ press release indicated that the criminal violations continued on some ships during the three years in which OSG was under investigation and that OSG self-reported some violations for which the prosecutors credited OSG by imposing fewer charges and reducing the criminal fines sought. Also in the press release, the DOJ stated that prosecutors did not seek larger penalties because OSG cooperated during the investigation and because of compliance measures instituted by OSG before and during the investigation.
The government’s investigation was initiated after the Coast Guard in Boston received a referral from the Marine Safety Branch of Transport Canada and included the combined efforts of the United States Coast Guard (in several ports), the Coast Guard Investigative Service, the Coast Guard Office of Maritime and International Law, the Coast Guard Office of Investigations and Analysis, the Environmental Protection Agency Criminal Investigations Division and the Environmental Crimes Section of the DOJ and several United States Attorney’s Offices.
Here is what happened prior to the DOJ press release in a portion of the case in Beaumont, Texas, relating to the allegations of misconduct on the M/T Pacific Ruby. And this is NOT in the Doj’s press release. Judge Heartfield in the Eastern District of Texas, Beaumont Division entered an order dismissing a part of the indictment.
“Regarding penalties for violations of marine pollution laws, article 230(2) of UNCLOS provides as follows: MONETARY PENALTIES ONLY MAY BE IMPOSED WITH RESPECT TO VIOLATIONS OF NATIONAL LAWS AND REGULATIONS OR APPLICABLE INTERNATIONAL RULES AND STANDARDS FOR THE PREVENTION, REDUCTION AND CONTROL OF POLLUTION OF THE MARINE ENVIRONMENT, COMMITTED BY FOREIGN VESSELS IN THE TERRITORIAL SEA, EXCEPT IN THE CASE OF A WILFUL AND SERIOUS ACT OF POLLUTION IN THE TERRITORIAL SEA. THIRD UNITED NATIONS CONFERENCE ON THE LAW OF THE SEA, 21 I.L.M. 1245, 1315 (1982)(emphasis added).
The Court is of the opinion that long-standing principles of international law made specifically applicable to APPS by section 1912 require dismissal of the criminal charges alleging violation of the Coast Guard regulations. Here, the United States government is seeking to criminally prosecute a foreign flag ship for alleged violations of U.S. Coast Guard regulations that occurred aboard ship and outside U.S. waters. 33 C.F.R. § 151.25. Because the government has not charged defendants with an act of pollution in U.S. waters, the government may only pursue civil penalties for violations of Coast Guard regulations by foreign-flag ship personnel that occurred aboard the Pacific Ruby. UNCLOS art. 230(2). Maintenance of a criminal prosecution on these facts runs afoul of well-established law of the flag principles which seek to ensure uniformity, comity and reciprocity among sea-faring nations. It is for this reason that Counts 3 through 10 alleging violation of 33 C.F.R. § 151.25 and the portion of Count 1 alleging that defendants conspired to violate 33 C.F.R. § 151.25 must be dismissed.” United States v. Kun Yun Jho and Overseas Shipholding Group, Inc., Crim. Action No. 1:06-CR-65-TH, Memorandum Opinion and Order Adopting Reports and Recommendations as Modified Herein and Partially Granting Defendants’ Motions to Dismiss (12/04/06).
In an unrelated case, in pleadings filed in mid-December 2006, the DOJ noted that Judge Heartfield’s decision was on interlocutory appeal. And, on December 12, 2006, in another oil pollution case in Washington State, federal district judge Ron Leighton followed the Heartfield decision in declining to impose jail time on a Greek Chief Engineer, Ilias Ntais, accused of violating Section 1908(a) of the Act for Prevention of Pollution from Ships (APPS Act). See sentencing memos on file in United States v. Ntais, CR06-5661RBL, U.S.D.C., W.D. Wa., and judgment.
More later,
As always, feel free to call me or e-mail me with any questions at walter.james@jamespllc.com.
WDJiii