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March 16, 2009

Genmar unit fined $1 million

A federal judge in Corpus Christi, Texas, has sentenced General Maritime Management (Portugal) and two crewmembers of the motor tanker Genmar Defiance for making false statements to the U.S. Coast Guard and failing to maintain an accurate Oil Record Book as required by U.S. and international law, the Justice Department announced.

The court sentenced General Maritime Management (Portugal) LDA, late Friday, to pay a $1 million fine. In addition, the company was sentenced to serve five years of probation.

Among the conditions of the probation is that, if they reapply for employment, the company must rehire five whistleblowers who were awarded $250,000 between them for alerting the Coast Guard to the misconduct. General Maritime must also submit monthly reports, under oath, regarding compliance; and allow a court appointed official to perform three audits of each vessel and three audits of its shore side office during the probation period.

Violations of the terms of probation could result in one or more of the company's ships being banned from U.S. territorial waters during the term of the probation.

Chief Engineer Antonio Rodrigues was previously sentenced for the same violations on Feb. 10, 2009 to three months of confinement in a half-way house, a $500 fine, a special assessment of $200 and five years of probation. First Engineer Cavadas was likewise sentenced on Feb. 10, 2009 to six months of confinement in a half-way house, a $500 fine, a special assessment of $200 and five years of probation.

During the hearing, the court awarded $250,000 to the five whistleblowers to be divided on a proportional basis for their actions and cooperation.

The company and two crewmembers were found guilty on all counts by a jury on Nov. 25, 2008. The trial and sentencing were presided over by the Honorable Janis Graham Jack, U.S. District Judge for the Southern District of Texas.

The criminal convictions were related to events occurring on board the Genmar Defiance during a voyage to Corpus Christi in November 2007.

On Nov. 24, 2007, engine room crew members were directed by First Engineer Cavadas to assist in hooking-up a flexible hose between the ship's bilge pump and the overboard discharge valve bypassing the vessel's pollution prevention equipment -- its oil-water separator -- and allowing crewmembers to pump the contents of the bilge tank directly into the Straits of Florida and the Gulf of Mexico.

Further, on Nov. 26, 2007, one of the crew members working in the ship's engine room was ordered by First Engineer Cavadas and Chief Engineer Rodrigues to assist in connecting a hose from the vessel's fresh water supply to the oil content meter on the ship's oil-water separator. The connection allowed the engineers to "trick" the oil content meter and prevent it from shutting a valve that would re-circulate oily water to the bilge tank where it would be treated through the oil-water separator before being discharged overboard.

By tricking the oil content meter, the oily water was permitted to be discharged directly overboard in violation of international law.

Two engine room crewmen secretly photographed the illegal connection and provided the photographs to the Coast Guard during a boarding of the vessel on Nov. 28, 2007 while the Genmar Defiance was docked at the Valero refinery.

"This significant criminal fine along with the maximum term of probation requiring audits and regular reporting sends a strong signal that companies will be punished severely, will be required to prove to the court that they have learned their lesson and taken actual steps to reform their corporate practices and are complying with the law," said John C. Cruden, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division.


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