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April 16, 2004

Another guilty plea in Washington State

In yet another in a string of federal prosecutions in Washington State, U.S. District Court Judge Ronald B. Leighton has accepted the guilty plea of Greek operator MARMARAS NAVIGATION LTD. to a felony violation of the "Act to Prevent Pollution from Ships."

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

The MARMARAS NAVIGATION plea relates to improperly documenting the handling of oily waste aboard the marine vessel ("M/V") Agia Eirini.

Announcement of the plea was made by John McKay, U.S. Attorney for the Western District of Washington; Donald Sims, Special Agent in Charge of the Portland Area Office, Criminal Investigation Division of the United States Environmental Protection Agency; and Russell Barker, Special Agent in Charge of the Coast Guard Investigative Service.

MARMARAS pleaded guilty to a felony violation for failing to maintain proper records associated with the ship's handling of its waste oil.

If approved by the court, the plea agreement requires that MARMARAS pay a criminal fine of $200,000, develop and implement a comprehensive environmental compliance plan for its fleet of twenty-eight ships that call on United States ports, and serve three years on probation.

MARMARAS will deposit an additional $50,000 into an escrow account for the purpose of funding the development, implementation and monitoring of the compliance plan. Up to $100,000 of the fine may be allocated at sentencing to fund one or more projects for the benefit, preservation, and restoration of the environment and ecosystems along the coastline of Washington State.

MARMARAS is scheduled to be sentenced by United States District Judge Ronald B. Leighton in Tacoma on July 9, 2004.

The plea agreement and other court records show that U.S. Coast Guard inspectors boarded the M/V Agia Eirini on April 24, 2003, at the Port of Kalama, Washington, to conduct an annual port state control examination. During the course of the exam, Coast Guard personnel discovered a flexible hose fitted with flanges and chipped paint on valves, bolts and the vessel bulkhead in the vicinity of the Oil Water Separator and overboard discharge valve.

The inspectors noted that the vessel incinerator appeared incapable of burning all of the waste oil sludge produced by the vessel on a daily basis. Despite repeated efforts, the crew could not demonstrate that the incinerator could handle the amount of waste oil sludge produced by the vessel under normal working conditions.

Court records also show that the entries in the ship's Oil Record Book presented to the Coast Guard inspectors were not consistent with the inspectors' findings.

According to the Oil Record Book, engine room crew members operated the incinerator for about twenty hours a day nearly every day for the stated purpose of burning waste oil sludge.

The inspectors concluded that the incinerator could not operate for that long, nor could it burn all of waste oil sludge produced by the vessel. Thus, the engine room crew failed to maintain an accurate Oil Record Book in which the disposals of oil residue and overboard discharges and disposal of bilge water were fully recorded.

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