What Not to Do With OWS

8/3/2019 What Not to Do With OWS

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MARITIME ENVIRONMENTAL COMPLIANCEMARITIME ENVIRONMENTAL COMPLIANCE

Richard A. Udell*Senior Trial AttorneyEnvironmental Crimes SectionU.S. Department of Justice601 D Street, NW - #2008

Washington, D.C. [email protected]

NEW YORK SHIPPINGCONFERENCE

January 7, 2006New York City, NY

*The views expressed in this presentation are those of the author.


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Summary of U.S. EnforcementSummary of U.S. Enforcement

All types of commercial vesselsAll types of commercial vessels --

U.S. and foreign flag.U.S. and foreign flag.

Corporate: $133 million dollars inCorporate: $133 million dollars in

criminal fines since 1998.criminal fines since 1998.

Plus restitution, community servicePlus restitution, community serviceand probation with court supervisedand probation with court supervised

environmental compliance programs.environmental compliance programs.

Individual targets: 19 years ofIndividual targets: 19 years ofincarceration since 1998.incarceration since 1998.

Senior shipboard officers andSenior shipboard officers and

responsible shore side officials.responsible shore side officials.


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Crimes committed for financial motive.Crimes committed for financial motive.

Most cases involve deliberate discharges of tons of wasteMost cases involve deliberate discharges of tons of waste

oil, sludge and other pollutants.oil, sludge and other pollutants. Intentional bypassing of pollution preventionIntentional bypassing of pollution prevention

equipment and falsification of vessel records to deceiveequipment and falsification of vessel records to deceive

port authorities.port authorities. ConcealmentConcealment: discharges made at night, hiding of: discharges made at night, hiding of

bypass equipment, use of dispersants, tricking of OCM,bypass equipment, use of dispersants, tricking of OCM,

falsification of Oil Record Book and Tank Soundingfalsification of Oil Record Book and Tank SoundingLog, etc.Log, etc.

Most cases involve obstruction of justice (witnessMost cases involve obstruction of justice (witness

tampering, destruction of evidence, alteration oftampering, destruction of evidence, alteration ofdocuments, perjury).documents, perjury).

Summary of U.S. EnforcementSummary of U.S. EnforcementContinuedContinued


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DetectionDetection

RemoteRemote sensing.sensing.

Routine inspections.Routine inspections. Enhanced physical and recordEnhanced physical and record

inspections.inspections.

Targeting.Targeting. Marine casualty investigations.Marine casualty investigations.

Mystery SpillMystery Spill investigations.investigations.

Referrals from foreign countries.Referrals from foreign countries.

Whistleblower allegations.Whistleblower allegations.


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Prosecution GoalsProsecution Goals

Protect the environment.Protect the environment.

Assure accurate ship records andAssure accurate ship records andverbal statements to portverbal statements to port

authorities.authorities.

Deter future criminal conduct.Deter future criminal conduct. Punish deliberate and intentionalPunish deliberate and intentional

violations.violations.

Create an even playing fieldCreate an even playing field

where law abiding companies arewhere law abiding companies are

not disadvantaged.not disadvantaged.


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Each of these

vessels was ISMcertified and

had passed

Class, Flag and

Port Stateinspections.


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Bypass pipes and hoses found in aBypass pipes and hoses found in aUSCG inspection on May 16, 2005.USCG inspection on May 16, 2005.

Approximately 40 cubic meters ofApproximately 40 cubic meters ofsludge and a larger quantity of bilgesludge and a larger quantity of bilgewaste discharged in approximately 6waste discharged in approximately 6months.months.

Oil Record Book and a Sounding LogOil Record Book and a Sounding Logwere falsified to conceal dischargeswere falsified to conceal discharges

Crew members directed to lie to theCrew members directed to lie to theCoast Guard by senior ship engineersCoast Guard by senior ship engineers

and byand byshorshor--esideeside managers.managers. Documents concealed on the ship.Documents concealed on the ship.

Computer printer disabled, alarmComputer printer disabled, alarmprintout hidden, and false statementsprintout hidden, and false statements

made to USCG.made to USCG.

U.S. v. MSC Ship Management (Hong Kong) Ltd.U.S. v. MSC Ship Management (Hong Kong) Ltd.


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MSC ElenaMSC ElenaBypassBypass

Suction SideDischarge to Overboard Valve


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MSC Elena BypassMSC Elena Bypass


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MSC Elena OWS BypassMSC Elena OWS Bypass

Portable Welden Pump and Flexible Rubber Hose Used to Bypass the Oil Water Separator


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U.S. v. MSC Ship ManagementU.S. v. MSC Ship Management

SummarySummary

Corporate Defendant: MSC Ship Management (Hong Kong)Corporate Defendant: MSC Ship Management (Hong Kong)Ltd.Ltd.

Charges:Charges: Conspiracy, Obstruction, False Statements, and Act to PreventConspiracy, Obstruction, False Statements, and Act to PreventPollution from Ships.Pollution from Ships.

Criminal Fine:Criminal Fine: $10 million$10 million

Community Service:Community Service: $500,000$500,000

To National Fish & Wildlife Foundation to fund nonTo National Fish & Wildlife Foundation to fund non--profit organizations toprofit organizations toprovide environmental education to seafarers, including how to rprovide environmental education to seafarers, including how to reporteportenvironmental crimes to the U.S. Coast Guard.environmental crimes to the U.S. Coast Guard.

Probation: 5 years. Subject to the terms of an Environmental CProbation: 5 years. Subject to the terms of an Environmental ComplianceompliancePlan.Plan.

Individuals:Individuals: Chief Engineer: Pleaded guilty to charges of Conspiracy, ObstruChief Engineer: Pleaded guilty to charges of Conspiracy, Obstruction, Falsection, False

Statements and Act to Prevent Pollution from Ships.Statements and Act to Prevent Pollution from Ships.

Second Engineer: Pleaded guilty to charges of Act to Prevent PoSecond Engineer: Pleaded guilty to charges of Act to Prevent Pollution fromllution fromShips.Ships.


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Procedures to Achieve ComplianceProcedures to Achieve Compliance

Increase shoreIncrease shore--side accountability.side accountability.

Waste stream audit andWaste stream audit andminimization.minimization.

Upgrade best available technologyUpgrade best available technology(OWS, OCM, Incinerator, ODME,(OWS, OCM, Incinerator, ODME,MSDS, etc.).MSDS, etc.).

Flexible budget for environmentalFlexible budget for environmental

compliance.compliance. Establish formal written policies:Establish formal written policies:

Corporate compliance statement. Operational procedures regarding

storage, treatment and disposal of

each waste stream and testing, useand maintenance of equipment. Recordkeeping and log entry

requirements. Job position descriptions.

Rewards and punishment forcompliance/non-compliance.

Conduct Internal/External audits atConduct Internal/External audits atsea that are designed tosea that are designed to investigateinvestigatecompliance.compliance.

Operational testing of keyOperational testing of key

equipment while vessel is underwayequipment while vessel is underwayusing actual waste streams.using actual waste streams. Provide meaningful training.Provide meaningful training.

Develop direct communication withDevelop direct communication with

crew.crew.

Reward compliance and penalizeReward compliance and penalizenonnon--compliance.compliance.

Install control devices (e.g., tags,Install control devices (e.g., tags,seals and lock boxes) that will sendseals and lock boxes) that will send

a message to employees and providea message to employees and providea check on shipboard conduct.a check on shipboard conduct.

Verify:Verify: Enhanced physical inspections.

Operational tests.

Document analysis.

Crew certifications.

Address motives.Address motives.


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How to Encourage Internal ReportingHow to Encourage Internal Reporting

Establish clear environmental policies.Establish clear environmental policies.

Take measures to convince employees thatTake measures to convince employees thatowner/operator really wish to comply fullyowner/operator really wish to comply fully

with all applicable laws, includingwith all applicable laws, includingMARPOL.MARPOL.

Display top level commitment toDisplay top level commitment toenvironmental compliance.environmental compliance.

Establish direct and anonymous lines ofEstablish direct and anonymous lines ofcommunication to senior management withcommunication to senior management withregard to environmental and safety matters.regard to environmental and safety matters.

Zero tolerance for retaliation against thoseZero tolerance for retaliation against thosethat report violations.that report violations.

Zero tolerance for violators.Zero tolerance for violators. Reward employees who report violations.Reward employees who report violations.

Establish safety and environmentalEstablish safety and environmentalcompliance as positive factors in employeecompliance as positive factors in employee

evaluations.evaluations.


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Technical ApproachesTechnical ApproachesControl DevicesControl Devices

Uniquely numberedUniquely numberedenvironmental tags onenvironmental tags onflanges to preventflanges to preventunauthorizedunauthorized

bypassing.bypassing. Use of seals onUse of seals on

overboard valves andoverboard valves and

cross connections.cross connections. Placards.Placards. Surveillance cameras.Surveillance cameras.

Note: Control devices alone cannot guarantee compliance.Control devices alone cannot guarantee compliance.


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Technical ApproachesTechnical Approaches

Control DevicesControl Devices Use of tamper resistantUse of tamper resistant

recorder systems, alarms andrecorder systems, alarms andprintouts to verifyprintouts to verifyequipment operation, valveequipment operation, valveposition, flow, OWSposition, flow, OWS ppmppm,,incineration, position, etc.incineration, position, etc.

Lock boxes/cages onLock boxes/cages onmonitoring equipment.monitoring equipment. Interlocks to preventInterlocks to prevent

tricking of monitoringtricking of monitoring

equipment.equipment. Use of meters to recordUse of meters to record

equipment runequipment run--time andtime andvolume for all engine roomvolume for all engine room

pumps.pumps.Note: Control devices alone cannot guarantee compliance.Control devices alone cannot guarantee compliance.


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Technical ApproachesTechnical Approaches Installation of best available technologyInstallation of best available technology

(OWS, OCM, Incinerator, ODME, MSDS,(OWS, OCM, Incinerator, ODME, MSDS,etc.etc.

Upgrade related equipment to minimizeUpgrade related equipment to minimizewaste production.waste production.

PrePre--processing of waste (staged operations).processing of waste (staged operations).

Increase tank capacity for various wasteIncrease tank capacity for various wastestreams.streams. System modification to allow inSystem modification to allow in--port testingport testing

of treatment systems and development ofof treatment systems and development of

ClassClass--approved test procedures.approved test procedures. Sampling and testing of waste streams andSampling and testing of waste streams and

effluent to verify technology.effluent to verify technology.

Use of cleaning agents consistent withUse of cleaning agents consistent withequipment design and capability.equipment design and capability.


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Response Dictates OutcomesResponse Dictates Outcomes DOJ and EPA have existing voluntary disclosureDOJ and EPA have existing voluntary disclosure

programs that can lead to nonprograms that can lead to non--prosecution or leniency asprosecution or leniency asappropriate.appropriate.

A company under investigation may choose to:A company under investigation may choose to: Cooperate (including waive privilege and work productCooperate (including waive privilege and work product

doctrine and provide the government with facts from andoctrine and provide the government with facts from aninternal investigation).internal investigation).

Conduct a comprehensive internal investigation andConduct a comprehensive internal investigation and

determine root causes.determine root causes. Audit entire fleet and take prompt and effective remedialAudit entire fleet and take prompt and effective remedial

measures to achieve fleetmeasures to achieve fleet--wide compliance.wide compliance. Promptly and thoroughly produce requested records.Promptly and thoroughly produce requested records. Take disciplinary action taken against violators.Take disciplinary action taken against violators. Support seafarers.Support seafarers. Accept responsibility.Accept responsibility.

How a company responds to an investigation may beHow a company responds to an investigation may befactored into the outcome of the case, as well as helpfactored into the outcome of the case, as well as helpdetermine the companydetermine the companys future image.s future image.


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Why ?????Why ????? Why do senior engineers andWhy do senior engineers and

other crew members deliberatelyother crew members deliberately

risk their liberty, career andrisk their liberty, career and

companycompanys image?s image?

Why does a convicted companyWhy does a convicted company

continue to commit crimes whilecontinue to commit crimes while

on probation?on probation?

Why does a company underWhy does a company under

investigation continue to commitinvestigation continue to commit

crimes?crimes?

Why have senior engineersWhy have senior engineers

deliberately tricked newly installeddeliberately tricked newly installed

antianti--tricking equipment?tricking equipment?


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Why ???Why ??? ContinuedContinued..

Why do port engineers, class, ISMWhy do port engineers, class, ISMauditors and flag states not findauditors and flag states not findand/or not report evidence ofand/or not report evidence ofbypassing to the owner/operator or tobypassing to the owner/operator or to

port state authorities?port state authorities? Why do flag administrations not takeWhy do flag administrations not take

any action against ship, owner,any action against ship, owner,operator or crew members who haveoperator or crew members who have

been convicted of intentionalbeen convicted of intentionalMARPOL violations and deliberateMARPOL violations and deliberatefalsification of records?falsification of records?

Why have ISM auditors not recordedWhy have ISM auditors not recorded

major nonmajor non--conformities against ship,conformities against ship,owner, or operator after a criminalowner, or operator after a criminalconviction?conviction?

Why do Insurance Clubs pay criminalWhy do Insurance Clubs pay criminalcosts?costs?


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Lessons LearnedLessons Learned

Class, Flag State and Port State certifications do notClass, Flag State and Port State certifications do notalone provide assurance of compliance.alone provide assurance of compliance. Operator needs to minimize waste streams, know howOperator needs to minimize waste streams, know how

much waste is generated, establish correct proceduresmuch waste is generated, establish correct proceduresand budget.and budget.

Operator has ultimate responsibility for establishingOperator has ultimate responsibility for establishingcorporate compliance culturecorporate compliance cultureExperience shows manyExperience shows many

crew members engage in illegal conduct to benefitcrew members engage in illegal conduct to benefitemployer or to preserve job.employer or to preserve job. Control procedures and devices alone cannot guaranteeControl procedures and devices alone cannot guarantee

compliance.compliance.

Environmental crimes represent a management failure.Environmental crimes represent a management failure. Environmental nonEnvironmental non--compliance is usually an indicationcompliance is usually an indication

of other nonof other non--compliance and management deficiencies.compliance and management deficiencies.

Costs of nonCosts of non--compliance is going up.compliance is going up.


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MARITIME ENVIRONMENTALMARITIME ENVIRONMENTALCOMPLIANCECOMPLIANCE

Richard A. Udell*Senior Trial AttorneyEnvironmental Crimes SectionU.S. Department of Justice601 D Street, NW - #2008

Washington, D.C. [email protected]

NEW YORK SHIPPINGCONFERENCE

January 7, 2006New York City, NY

*The views expressed in this presentation are those of the author.