OSG fined US $27, with US$10m more to come
MAJOR US-based tanker company Overseas Shipholding Group has pleaded guilty to a string of deliberate pollution offences and has been fined US$27m. Whistleblowers, 12 current and former OSG crew members, have been awarded US$437,500 each.
In addition to the fine, OSG was sentenced to serve a three-year term of probation during which it must implement and follow a stringent environmental compliance program that includes a court-appointed monitor and outside independent auditing of OSG ships trading worldwide. In January, OSG pleaded guilty to additional charges in Beaumont, Texas, and is awaiting sentencing in that case for which it has agreed to pay another $10 million. The total US$37m plea deal is the largest-ever involving deliberate vessel pollution.
The charges involving 12 OSG oil tankers range from June 2001 to March 2006 and include violations of the Clean Water Act as amended by the Oil Pollution Act of 1990, the Act to Prevent Pollution from Ships, conspiracy, false statements, and obstruction of justice. The offences came to light because crew members reported the illegal discharging of oily water.
According to papers filed in court, illegal discharges of sludge and oily waste were deliberately concealed through the use of false oil record books. Discharges were also concealed by other means such as by making discharges at night, painting flanges on overboard piping to hide marks caused by the use of bypass pipes, and hiding bypass equipment during port calls. In other instances, pollution prevention equipment known as an oily water separator was “tricked” by flushing a sensor designed to detect oil with fresh water during overboard discharges.
Prosecutors filed a sentencing memorandum with the court that on the one hand, highlighted the seriousness of OSG’s offences and also recognized the company for certain cooperative acts and remedial measures. In its filing, prosecutors told the court that, “the defendant’s criminal conduct did not involve a solitary violation that might be explained as a single instance of bad judgment or the acts of a rogue employee. The violations at issue in this case were so systemic, repetitive and longstanding that the criminal conduct amounted to a serious failure of corporate and shore-side management. Criminal violations continued on some ships during the three years in which OSG was under investigation, including six vessels on which OSG self-reported violations”. However prosecutors credited OSG’s self-disclosures, cooperation and compliance measures taken by proposing fewer charges and reduced criminal fines.