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January 31, 2009

$518,500 EPA penalties for export of SS Oceanic (ex SS Independence)

The U.S. Environmental Protection Agency has settled an administrative complaint against Global Shipping LLC and Global Marketing Systems, Inc., Cumberland. Md., for alleged illegal distribution and export of a PCB-containing ship--the SS Oceanic (the former S.S. Independence).

According to the Basel Action Network, which describes itself as a "toxic trade watchdog group," the two companies are controlled by "a world famous cash-buyer of obsolete ships, Mr. Anil Sharma.

In February of last year, Basel Action Network and the Save the Classic Liners Campaign tipped-off the EPA when it discovered that Global Marketing Systems, Inc. had taken ownership of the 1951-built SS Oceanic (former SS Independence) and had the liner towed out of San Francisco Bay with the intent of scrapping the vessel on the beaches of South Asia.

In a case that got major media attention and saw the Oceanic widely described as a "toxic ship," Basel Action Network demanded that the U.S. government take action to have the ship returned to a U.S. port. The EPA claimed it lacked the authority to have the ship recalled, but took legal action against GMS for violations of the Toxic Substances Control Act (TSCA) which prohibits the exportation of polychlorinated biphenyls (PCBs), a persistent toxic pollutant used in the paints, insulation and gasketry in older ships.

The two companies will pay a total of $518,500 to resolve the two Toxic Substances Control Act violations. Global Marketing Systems, Inc. will pay a penalty of $32,500 and Global Shipping LLC will pay a penalty of $486,000.

EPA says that Global Shipping LLC purchased and held the Oceanic, a cruise ship formerly named the SS Independence, for the purpose of export beginning on or about July 24, 2007 and continuing until the vessel left the United States on or about February 8, 2008. EPA alleged that the ship contained PCBs and that holding a vessel containing PCBs for purposes of export for disposal constitutes unauthorized distribution in commerce of PCBs.

"Companies need to ensure PCBs are removed from any ship being exported in order to protect public health and the environment from exposure to PCBs," said Jeff Scott, division director for waste programs in the EPA's Pacific Southwest region. "Federal law prohibits companies from exporting PCBs for disposal, including PCBs built into ship components, unless approval from EPA has been obtained."

On or about February 8, 2008, the ship was towed out of the territorial waters of the United States. EPA alleged that Global Shipping LLC and its affiliated company Global Marketing Systems, Inc. worked together to export the Oceanic for disposal outside the United States, a violation of federal law. The EPA was not informed by Global of its intention to export the ship for disposal.

After EPA initiated its enforcement action, Global submitted a new application to the Maritime Administration seeking approval to sell the vessel but changing the purpose of export from disposal to continued use of the vessel to accommodate labor workers in the Arabian Gulf area. However, under the Toxic Substances Control Act, EPA also regulates export for continued use of materials containing regulated levels of PCBs.

Vessels built before 1979, such as the Oceanic, may contain PCBs in various materials including cables, electrical equipment such as capacitors and transformers, gaskets and watertight seal material, and painted surfaces.


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