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Lawyer comments on M/V Ocean Hope oil discharge case

Owner and operator liable for crew’s wrongdoings even if they are acting for their own benefit.

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The following article is written by Matthew Johnston, an Associate at Lewis Brisbois Bisgaard & Smith LLP; he was commenting on the M/V Ocean Hope case where employers of crew involved in illegal oil discharge operations were convicted at nine U.S. counts over criminal liability.

On May 7, 2018, the Fourth Circuit in United States v. Oceanic Illsabe Limited affirmed the conviction and sentencing of a vessel owner and operator for violations of the Act to Prevent Pollution from Ships (APPS).

Appellants, the owner and operator of the M/V OCEAN HOPE (a Greek oceangoing cargo ship), were convicted of offenses related to illegal discharges of large quantities of oily pollutants from the vessel into the ocean. Appellants violated the APPS which was created to comply with MARPOL. The Act provides that foreign ships in the navigable waters of U.S. are subject to federal discharge requirements, and the Coast Guard can assert jurisdiction outside of the U.S. when a foreign ship fails to make complete and accurate entries in the Ship’s Oil Record Book, which must be updated “without delay.”

M/V OCEAN HOPE’s Engine Department was principally responsible for violating APPS, and also made false statements to the Coast Guard, obstructed justice and tampered with witnesses. The case involved pumping unprocessed bilge water into the ocean and the use of a “magic pipe” – a hose between the vessel’s sludge pump and an illegal onboard discharge valve on the storage tank, which ultimately draws the sludge into the ocean. One of the Engine Department’s crew videotaped and photographed the “magic pipe” arrangement.

The MV OCEAN HOPE’s owner and operator asserted that they were not vicariously criminally liable for any of the violations revealed by the Coast Guard, and that it was all the Engine Department crewmembers’ fault. They said that they had hired qualified crew that could reasonably be relied upon and the misconduct was unknown to owner and operator. However, the owner and operator were convicted on nine counts. The appellate court upheld the vicarious criminal liability noting that the Engine Department crew met the standard that “the employee or agent acted within the scope of the employment with the intent to benefit the corporation.” Those responsible were employed to carry out pollution prevention for the ship but consistently ordered subordinate crew to violate MARPOL and APPS along with various other criminal statutes and regulations. Further the owner and operator had knowledge of “multiple oddities” from weekly updates of the Oil Record Book.

The Court also noted that as long as “the corporate agent intends, at least in part, to benefit his employer, the entity can be criminally liable even if the agent was also acting for his own benefit.” The Court found that this standard was met when, for example, the supervisors of the Engine Department told the crew not to tell the Coast Guard investigators about illegal discharge, and in that way intended to prevent the Coast Guard from finding deficiencies onboard the M/V OCEAN HOPE which may cause the vessel to be detained or delayed.

This case underscored the serious nature of falsifying Oil Record Books and illegal discharges into the ocean. It also highlights the scope of the U.S.’s jurisdiction to protect the waters and enforce U.S. law. The full decision can be found here.

Manifold Times comment: Singapore shipping firm Hai Soon Ship Management, the sister firm of Singapore-based bunker tanker owner Hai Soon Diesel & Trading, was recently fined $1 million in regards to APPS.

Published: 16 July, 2018
 

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Winding up

Singapore: Director of Teras Lyza declares firm’s inability to continue business due to liabilities

Ramalingam S/O Ramalingam, director of Teras Lyza Pte Ltd, made and lodged with the Official Receiver a statutory declaration stating the firm cannot by reason of its liabilities continue its business.

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Barges, tugboats and bumboats operators and charterers Teras Lyza Pte Ltd director, Mr. Ramalingam S/O Ramalingam @ Kamal Deen Bin Abdullah, on Friday (16 February) made and lodged with the Official Receiver a statutory declaration, according to notices published on the Government Gazette on 26 February.

The statutory declaration by the director stated that:

  1. I am a director of the abovenamed company;
  2. The abovenamed company cannot by reason of its liabilities continue its business; and
  3. The meetings of the abovenamed company and of its creditors have been summoned for the 8th day of March 2024, being a date within one month of the date of this Statutory Declaration.

In another notice, Messrs. Ng Kian Kiat and Goh Wee Teck care of 8 Wilkie Road #03-08 Wilkie Edge Singapore 228095 have been appointed as joint and several Provisional Liquidators of the company on the 16 February.

In a third notice, a meeting of the creditors of the company will be held at 8 Wilkie Road #03-08 Wilkie Edge Singapore 228095 through an audio-visual conference on the 8 March 2024 at 2.30 pm for the purposes of:

  • receiving a statement of the Company’s affairs together with a list of creditors and the estimated amounts of their claims; 
  • appointing liquidators; 
  • appointing a committee of inspection of not more than 5 members, if thought fit; and 
  • any other business.

 

Photo credit: Benjamin child
Published: 27 February, 2024

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Sanctions

Russia’s largest shipping company Sovcomflot sanctioned by U.S. Treasury

In addition to designating Sovcomflot, OFAC is identifying 14 crude oil tankers as property in which Sovcomflot has an interest.

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Friday (23 February) placed Russia’s state-owned shipping company and fleet operator targeting Joint Stock Company Sovcomflot (Sovcomflot) under sanctions.

The development was to responsibly reduce Russia’s revenue from oil sales.

In addition to designating Sovcomflot, OFAC is identifying 14 crude oil tankers as property in which Sovcomflot has an interest.

“The price cap on Russian oil continues to serve its twin goals of limiting Kremlin profits while promoting stable energy markets,” said Deputy Secretary of the Treasury Wally Adeyemo.

“Today, we take the next step by targeting Russia’s largest state-owned shipping company and fleet operator, dealing a huge blow to their shadow operations. We are entering the next phase of increasing Russia’s costs in a responsible manner to mitigate risks.”

Concurrent with the designation of Sovcomflot, OFAC is also issuing a general license authorizing the offloading of crude oil (or other cargo) from these 14 vessels for a period of 45 days.

These vessels, all of which are beneficially owned by Sovcomflot, are:

  1. ANATOLY KOLODKIN (IMO 9610808)
  2. NS ANTARCTIC (IMO 9413559)
  3. NS LION (IMO 9339313)
  4. NS CONSUL (IMO 9341093)
  5. NS BURGAS (IMO 9411020)
  6. NS CAPTAIN (IMO 9341067)
  7. NS COLUMBUS (IMO 9312884)
  8. SAKHALIN ISLAND (IMO 9249128)
  9. NEVSKIY PROSPECT (IMO 9256054)
  10. GEORGY MASLOV (IMO 9610793)
  11. LITEYNY PROSPECT (IMO 9256078)
  12. KRYMSK (IMO 9270529)
  13. NS CREATION (IMO 9312896)
  14. NS BRAVO (IMO 9412359)

In addition, OFAC is issuing a general license authorizing transactions with all other Sovcomflot-owned vessels for the similar 45-day period.

Sovcomflot has also been sanctioned by Australia, Canada, New Zealand, and the United Kingdom (UK) and is under certain European Union (EU) restrictions.

 

Photo credit: tommao wang on Unsplash
Published: 27 February 2024

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Crime

Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

Vietnam Coast Guard said vessels were transporting various quantities of oil cargo: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

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Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

The Vietnam Coast Guard on Tuesday (20 February) said it seized a total of about 170,000 litres of unknown origin diesel oil in an operation. 

Patrol boats belonging to Coast Guard Region 4 Command detected two fishing boats – KG-91487- DR and KG-91602-TS – displaying several suspicious signs.

Initial investigations found all vessels without invoices and documents proving legal origin of the oil material.

The vessels were transporting various quantities of oil material: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

The authorities made records of administrative violations,and escorted the vessels to Fleet Port 422 in Phú Quốc city, Kiên Giang province for further investigations and handling in accordance with the law.

 

Photo credit: Vietnam Coast Guard
Published: 23 February, 2024

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