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September 28, 2006

Maersk to pay $500,000 fine in pollution case

The United States Attorney's Office for the Northern District of California says that the shipping company A.P. Moller-Maersk, A/S of Denmark pleaded guilty on September 26 to providing false documents to the U.S. Coast Guard during a routine inspection of one of its cargo ships, the M/V Jane Maers

The inspection was to ensure, among other things, compliance with the international MARPOL treaty, which limits oil pollution from ships.

Maersk owns and operates over 200 vessels worldwide, including tankers and cargo ships, and is considered to be one of the largest shipping companies in the world.

After accepting the guilty plea, U.S. District Judge Marilyn Hall Patel sentenced the company to pay the maximum fine of $500,000 and ordered it to follow an environmental compliance plan agreed to by the parties

"This prosecution stems from a national vessel pollution initiative aimed at stopping the discharge of waste oil from ships, a major source of pollution to ocean and inland waters," said U.S. Attorney Kevin V. Ryan. "In addition, this prosecution is a result of our focused effort to prosecute companies that provide false documents to authorities to avoid compliance. Companies need to understand that there are criminal consequences for attempting to deceive their regulators.."

The government's investigation began on May 25, 2004, when members of the U.S. Coast Guard Marine Safety Office discovered waste oil in the overboard piping of the M/V Jane Maersk during a routine inspection. Further investiga tion by the Coast Guard and U.S. Environmental Protection Agency's Criminal Investigation Division also uncovered evidence of false entries made in the Oil Record Book (ORB), a document required by MARPOL,

MARPOL and U.S. law limit the oil content of discharges from ships to not more than 15 parts per million. To ensure compliance, MARPOL requires that all transfers of sludge, oil contaminated bilge water, and overboard discharges of bilge water, be fully and accurately recorded in the ORB.

According to court documents, the false entries presented to the U.S. Coast Guard aboard the M/V Jane Maersk concerned the sh'p's incinerator, which is used in part to burn waste oil sludge generated on the ship.

Crew members on the M/V Jane Maersk knowingly overstated the hours of the incinerator's operation in the ORB to avoid further questioning by authorities regarding the proper operation of the incinerator.

Further investigation uncovered that not only were false entries made in the ORB regarding the incinerator aboard the M/V Jane Maersk, but that the practice occurred on at least one other Maersk vessel.

Maersk fully cooperated with the government's investigation from its inception and immediately performed a comprehensive training for their engineers to ensure compliance with environmental regulations.

The fine of $500,000 is the maximum a corporation can be ordered to pay for a violation of 18 U.S.C. Sec. 1001. In addition, the plea agreement, which was accepted by Judge Patel, requires Maersk to develop, fund, and implement a comprehensive, fleet-wide environmental compliance plan to ensure future compliance aboard=all of its vessels.

As part of the plan, Maersk will, among other things, designate a corporate compliance manager to oversee implementation of the plan, develop an environmental manual for all ships, fully train employees, and hire an outside environmental consultant who will conduct compliance audits of Maersk ships. The plan also applies to any ships that come under the ownership of Maersk.

"This agreement has resulted in a fleet-wide environmental compliance plan, which will help ensure the company's future compliance with oil pollution laws," said Wayne Nastri, the EPA's Administrator for the Pacific Southwest Region.

The plea agreement with Maersk occurs almost two months after the 2nd Engineer aboard the M/V Jane Maersk, Mr. Johnnie Nielsen, 35 of Copenhagen, Denmark, was sentenced to four months community confinement after pleading guilty to one count of destroying records, in violation of 18 U.S.C

In pleading guilty, Nielsen admitted to his role in concealing and later destroying key documents in anticipation of the pending Coast Guard inspection of the vessel M/V Jane Maersk. Nielsen further admitted that he had observed engineers on other Maersk vessels hidi ng the same key documents prior to a pending inspection.

Judge Patel stayed Mr. Nielsen's sentence pending the completion of the government's investigation of = Maersk.

Stacey Geis and Jim Keller are the Assistant U.S. Atto=rneys who prosecuted the case. The prosecution is the result of a 15 month investigation by the U.S. Coast Guard Investigative Services and the U.S. Environmental Protection Agency Criminal Investigation Division, with assistance from the Coast Guard Pacific JAG Office.

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