Ship Management Firm Pleads Guilty and is Sentenced for Violating Federal Pollution Law

June 8, 2010 - WASHINGTON—Cooperative Success Maritime S.A., the operator of the M/T Chem Faros, a 21,145 gross-ton ocean-going cargo ship that regularly transported cargo between foreign ports and the United States, pleaded guilty and was sentenced today in federal court for violating the Act to Prevent Pollution from Ships (APPS), and to making material false statements, the Justice Department announced.

U.S. District Court Judge James C. Dever III for the Eastern District of North Carolina sentenced the company to pay a $850,000 penalty of which $150,000 will be paid to the congressionally-created National Fish and Wildlife Fund as a community service payment. The judge also sentenced the company to serve five years of probation, during which time they will implement an environmental compliance plan.

Federal and international law requires that all ships comply with pollution regulations requiring the proper disposal of oily waste water and sludge by passing the oily waste through an oil-water separator (OWS) aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires the ship’s crew to record accurately in an oil record book (ORB) each transfer or disposal of oily waste water and sludge. These laws are designed to prevent pollution of ocean waters.

During a regular inspection of the ship on March 29, 2010, in Morehead City, N.C., an oiler with the engine crew passed a note to a U.S. Coast Guard inspector. The handwritten note stated:

“GOOD MORNING SIR, I WOULD LIKE TO LET YOU KNOW THIS SHIP DISCHARGING BILGE ILEGALLY USING BY MAGIC PIPE, IF YOU WANT TO KNOW ILLEGAL PIPE THERE IN WORKSHOP FIVE METERS LONG WITH RUBBER. SIR, I HOPE IF YOU DON’T MIND. WE HAVE A SECURITY FOR OUR SAFETY.” (spelling and grammar errors in original).

The oiler informed a member of Coast Guard boarding team that the “magic pipe” was located in the workshop in the engine department. The subsequent investigation revealed that from September 2009, through March 2010, engine department crew members pumped oil-contaminated waste directly overboard by using the pipe that bypassed the OWS on several occasions, up to 10 times according to some crew members.

On March 18, 2010, the chief engineer, Vaja Sikharulidze, ordered the engine department crew members, through the second engineer, to bypass the OWS and discharge oil-contaminated bilge waste directly overboard. This resulted in approximately 13,200 gallons of oil-contaminated waste to be discharged into the ocean.

Sikharulidze has acknowledged making false entries in the oil record book to hide the true amount of oil-contaminated bilge waste that was stored in a certain tank aboard the ship. The chief engineer stated that in order to hide the by-pass of over 70 cubic meters, he had to enter incorrect information in the ORB preceding the discharge.

Sikharulidze further admitted that transfer entries in the ORB from on or about March 6, 2010, through March 17, 2010, were false. He indicated he was continuing the practice of false entries made by the prior chief engineer for that particular tank. He explained that the prior chief engineer indicated in the ORB that a particular bilge tank contained 24 cubic meters of waste when, in fact, it contained 60 to 65 cubic meter of waste. In order to avoid bringing attention to the false entries, the chief engineer continued the practice of making false entries. Last month, Sikharulidze, 59, pleaded guilty to violating the APPS.

“Today’s sentence appropriately punishes Cooperative Success for violating the law. The Justice Department working in a coordinated effort with our partner agencies will continue to prosecute companies that ignore maritime laws and ultimately harm the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

“Pollution prevention acts were put in place to protect our natural resources. It is disheartening when we see companies and individuals knowingly and purposely dumping oil-contaminated waste into those resources. We will take violations of these acts very seriously, in order to protect our natural resources for future generations,” stated George E. B. Holding, U.S. Attorney for the Eastern District of North Carolina.

“As a steward of the environment, the Coast Guard enforces compliance with applicable laws,” said Rear Adm. Wayne Justice, commander of the Coast Guard’s 5th District. “The criminal prosecution of violating companies is a significant deterrent for offending ships entering our ports. Cooperative efforts between state and federal agencies help preserve our natural resources, and protect those who rely on the marine environment for their livelihood.”

“The oceans must be protected from being used as dump sites for waste oil or other hazardous substances," said Maureen O’Mara, Special Agent-in-Charge of EPA’s criminal enforcement program in Atlanta. “This prosecution sends a clear message that companies that refuse to operate their vessels safely and lawfully and pollute our waters will be vigorously prosecuted.”

Investigation of this case was conducted by the U.S. Coast Guard and the Environmental Protection Agency with assistance from the FBI’s Computer Forensic Team. The case was jointly prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Eastern District of North Carolina.