U.S. Fines Cargo Ship Operator $1 Million for Polluting Waters

U.S. Fines Cargo Ship Operator $1 Million for Polluting Waters
By Erica E. Phillips May 11, 2018 https://www.wsj.com/articles/u-s-fines-cargo-ship-operator-1-million-for...

Penalty for oily discharge from Japanese vessel is latest in crackdown on ‘magic pipes’ and other devices meant to avoid environmental rules

Some ship operators are still looking for ways to skirt an international ban on the release of oily waste into ocean waters, in some cases using a tool known as a “magic pipe” to bypass cleaning devices, despite a crackdown on the practice.

The U.S. Justice Department on Thursday said Japanese cargo-vessel company Nitta Kisen Kaisha Ltd. will pay a $1 million fine after admitting its engineers poured pollutants into waters off North Carolina and tried to cover up the operation with false paperwork. Prosecutors said the ship carrying industrial materials to the state discharged the oily waste through hidden hoses that the U.S. Coast Guard discovered during an inspection in May 2017.

Nitta and its chief engineer were placed on probation, and the firm was ordered along with the fine to implement a compliance plan that will be monitored for three years.

The conviction was the latest by federal authorities to bring criminal charges against shipping companies that violate the U.S. Act to Prevent Pollution from Ships, the domestic law enforcing International Maritime Organization conventions on ship pollution.

Last year, the U.S. fined Princess Cruise Lines Ltd. $40 million for using devices on five of its cruise ships to avoid time-consuming cleaning of oily waste and bilge water and then concealing the activity through falsified logs. It was the largest verdict of its kind against a ship operator, but that doesn’t appear to have deterred other companies from looking for ways to get around the restrictions.

Since the late 1990s, when the Justice Department first started prosecuting vessel owners for pollution crimes, 140 firms have been convicted and fined a total if about $472 million in criminal penalties. Joe Poux, a deputy chief in the department’s Environment and Natural Resources Division, said his office consistently prosecutes 10 to 15 cases a year. But the Coast Guard inspects only 5% to 10% of ships, Mr. Poux said, so many operators take their chances.

Violations are committed by every kind of ship, from fishing boats to the newest giant container vessels. “We’ve seen brand new ships, straight from the shipyards in China, doing this on their way over here,” Mr. Poux said. “There’s been no kind of ship we haven’t seen doing this.”

The oily discharge is a byproduct of engine and other onboard operations, and it gathers in the bottom, or bilge, of a ship along with water from condensation and other sources. Ship engineers are supposed to filter the oil from the water by passing the waste liquid through a separator, but the process takes time and requires constant monitoring by a crew member.

“There’s a natural inclination on the part of a shipping company to want to reduce cost and time as much as possible, and sometimes that does involve pumping stuff overboard that they shouldn’t,” said David Pettit, a senior attorney with the Natural Resources Defense Council. “The Coast Guard can’t be everywhere at once and their jurisdiction doesn’t extend to the middle of the ocean, so it’s a tough one to police.”

Steve Roberts, a claims director for ship insurer London Club, said in an email, “Prevention of pollution of the environment is something most shipowners take very seriously in my experience but it can prove challenging to follow the commitment of their crew to follow their procedures.”