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March 11 2002

Ship manager fined, seafarers get bounty
Danish ship management company, D/S Progress, is to pay a $250,000 criminal fine for offenses that include conspiring to conceal a hazardous leak in the hull of an oil tanker that visited Baltimore, failing to report emergency discharges to save the ship and presenting false log books to the U.S. Coast Guard in order to disguise the leak, emergency discharges and other deliberate acts of dumping oil.

Announcing the penalty,Thomas M. DiBiagio, U.S. Attorney for Maryland and Thomas L. Sansonetti, Assistant Attorney General for the Justice Department Environment and Natural Resources Division, said that D/S Progress, a ship management company based in Copenhagen, Denmark, was responsible for the “Freja Jutlandic,” an oil tanker which first arrived in Baltimore on March 22, 2000.

Crew members, frightened that their lives were in danger, secretly slipped a note to Coast Guard inspectors alerting them to the presence of the hazardous leak.

Coast Guard officers found a steady stream of sea water flowing into the ship from a hole in the hull covered by a makeshift repair and required immediate repairs at a Baltimore shipyard where a portion of the ship’s hull was found to be a wafer-thin rust "cancer," according to documents filed in Court.

At a sentencing hearing in Baltimore on Friday, U.S. District Judge Benson E. Legg awarded the two crew members that wrote the note to the Coast Guard with one half of the $250,000 criminal fine from the now bankrupt corporate defendant under a bounty provision in the Act to Prevent Pollution from Ships.

The crew members will split half of a $250,000 surety bond that D/S Progress was forced to post by the Coast Guard at the time. This is the fifth instance in which a Court has granted an award under the statute’s bounty provision.

According to court papers, the ship’s Captain, currently a federal fugitive, asked officials at D/S Progress whether he should report the emergency repair to the hull to the Coast Guard as required by the Port and Waterways Safety Act. In a telex to the Captain found on the ship’s bridge, a shore-based manager in Copenhagen responsible for the ship’s safety wrote back: “the temporare [sic] repair shall not be reported to the coast guard in baltimore.”

"This so-called ship management firm was engaged in deliberate mismanagement and the intentional subversion of the rules designed to ensure vessel safety and protect our environment," said Sansonetti. “This case sounds a warning to the maritime community that there will be no safe harbor for those who intentionally pollute and recklessly endanger human life.”

"The Chesapeake Bay and the lives of those aboard this oil tanker were needlessly endangered,” said DiBiagio. "The aggressive enforcement of federal criminal environmental laws is a priority. This case demonstrates that this aggressive enforcement in necessary not only to protect the environment but also to protect people,” added DiBiagio.

In pronouncing the sentence, Judge Benson E. Legg emphasized “wanton disregard of the ship and owner for the safety of the crew and the international and U.S. law governing pollution.”

Prosecutors provided the Court with a video tape obtained from the Swedish Coast Guard showing the Freja Jutlandic dumping an oil slick in its wake for 30 nautical miles only a month before its voyage to Baltimore in March 2000.

In pleading guilty in October 2001, D/S Progress admitted that it sought to avoid the expense of maintaining a safe and seaworthy vessel. The shipping company also admitted that it used false Oil Record Books to conceal deliberate dumping of waste oil from the bilges and from cargo tanks using equipment and procedures to bypass required pollution prevention equipment and create the overall false impression that the vessel was being operated properly. The company had employees flush clean water on a sensor designed to detect oil and limit overboard discharges of oil.

Other defendants remaining under Indictment include K/S Chemical Transporter, the Danish owner of the Freja Jutlandic; Davor Maric, a resident of Croatia, the ship’s captain who was arrested in Baltimore in May 2000; Ryzard Pawlowski, a resident of Poland, the ship’s chief engineer; Jo Goksoyr, a shore-side superintendent and the ship’s “designated person” employed in Denmark by D/S Progress who is alleged in the Indictment to have sent the telex directing the leak not be reported to the Coast Guard; and Erik Moller, a vice president of D/S Progress who is alleged in the Indictment with ordering the dumping of approximately 25,000 gallons of fuel oil contaminated with water during a return voyage from Mexico to Baltimore in April 2000. An indictment represents charges brought by a grand jury and must be proved beyond a reasonable doubt by the United States in a jury trial. Defendants are presumed innocent until proven guilty.

The case was investigated by the Coast Guard Investigative Service with assistance from the Coast Guard, Activities Baltimore, Coast Guard Headquarters Marine Safety and Environmental Protection Division, Coast Guard MLC Atlantic Legal Office and Coast Guard Office of Maritime and International Law. Additional assistance was provided by the Baltimore Police and the Federal Bureau of Investigation