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8 Maritime Professional 2Q 2011 Blank Rome LLP’s Gregory Linsin and Jeanne Grasso explain the challenges and lay out a cogent solution. CURRENT TRENDS IN MARPOL ENFORCEMENT The United States has long been aggressively enforcing compliance with the International Convention for the Prevention of Pollution from Ships, as amended (“MAR- POL”), which is implemented in the United States by the Act to Prevent Pollution from Ships (“APPS”). Since the early 1990s, the effort has been directed at all types of registered and domestic tonnage – the full spectrum of waterborne com- merce. Those entities and individuals prosecuted for MAR- POL violations also span a wide spectrum of owners, opera- tors, technical managers, masters, engineers, shoreside per- sonnel and corporate officers. MARPOL prosecutions commonly involve bypasses of the oily water separator or discharges of sludge overboard rather than through incineration. Few of these prosecutions involve illegal discharges in U.S. waters – virtually all involve false entries in the Oil Record Book (“ORB”). Maintaining an inaccurate ORB while in domestic waters or presenting an inaccurate ORB to the U.S. Coast Guard is a crime and a basis for prosecution, along with post-incident conduct such as obstruction of justice or false statements made to investi- gators following commencement of the investigation. These efforts are often viewed by the rest of the world as heavy handed, as many believe that enforcement actions for record- keeping violations with respect to illegal discharges occurring in international waters should be the responsibility of the flag State. The United States government disagrees and has stated unequivocally that it will continue to enforce, even more aggressively, until the illegal discharges stop. The Department of Justice (“DOJ”) recently noted that 88 million gallons of oil are discharged illegally from vessels each year – more than eight times the amount spilled from the Exxon Valdez. Thus, until flag states increase serious enforce- ment of MARPOL compliance, the United States will likely continue to be the world’s MARPOL cop. Prosecutions continue unabated, with more than a dozen MARPOL cases prosecuted during the last 24 months, as companies fail to learn from the mistakes of others. And, the prosecutions are now yielding higher penalties, jail time and the banning of ships from United States ports. As an example of the DOJ’s persistence, Stanships Inc. and three related companies, collectively the owners and opera- tors of the M/V Americana, pled guilty again, in April of this year (Stanships pled guilty in a prior case in June 2010) to 32 felony counts for violations of APPS, the Ports and Waterways Safety Act and obstruction of justice. The com- panies will be fined $1 million and prohibited from trading to the United States during the five-year probationary period. The individual owning the companies is also banned from owning ships trading to the United States for five years. A whistleblower’s report to the Coast Guard, including cell phone photographs of the “magic pipe,” kicked off this inves- tigation, which involved illegal discharges of sludge and oily water and the failure to report a hazardous condition prior to a United States port call. In the past, it has been rare to ban ships from trading to the United States and this is the first time an owner has been banned. While whistleblowers have been part of the seascape in APPS prosecutions for years, more than 50% of the new cases stem from whistleblowers, probably because of the lucrative rewards DOJ is requesting and courts are awarding. This can amount to as much as 50% of any penalty paid for APPS vio- lations. Unfortunately – and because of the reward prospects, whistleblowers often ignore company policies and the ISM Code by reporting wrongdoing directly to the Coast Guard rather than through the chain of command or to the Designated Person Ashore. This serves to undermine interna- tional systems in place to deal with potential violations. The maritime industry has had ample notice of the aggres- siveness of the enforcement actions and the lucrative awards being given to whistleblowers. Industry must therefore under- stand the controlling laws and enforcement mechanisms and take aggressive steps to ensure compliance and reduce enforcement risks. This is particularly important in light of the recent Memorandum of Understanding between the Environmental Protection Agency (“EPA”) and the U.S. Coast Guard regarding enforcement of EPA’s Vessel General Permit, which includes numerous recordkeeping and other requirements. Insights Legal Beat MARPOL Enforcement in the United States By Gregory Linsin & Jeanne Grasso, Blank Rome LLP
