Since the tragic events of September 11th, pursuant to a directive of the Office of Homeland Security, the U.S. Coast Guard has undertaken a comprehensive program of boarding foreign flag-state vessels calling U.S. ports. As a result of the new heightened security measures, there has been a significant increase in the scrutiny in which vessels, and its records/logs, are being inspected. Such scrutiny, rightly or wrongly, has led to a rash of vessel and/or crew detentions, as well as criminal allegations and charges against vessel Owners, Operators, Managers, Officers and crew.
Additionally, we have learned that the U.S. Coast Guard has recently established various task forces, including ‘the Oily Water Separation Systems Task Force’ (OWSSTF), to examine a wide range of issues related to oily water separation equipment and its use on vessels in U.S. waters. Coast Guard personnel and other law enforcement personnel are scrutinizing the use and functionality of oily water separation systems more carefully than ever before, and U.S. and International authorities have made it clear that they have, and will continue to, seek jail sentences for Masters and Chief Engineers of ships committing pollution offenses. Many times, even if no pollution incident has occurred, the Coast Guard and U.S. prosecutors will commence a Grand Jury investigation seeking to prosecute suspected illegal activities (i.e. possibleMarpol violations, presentation of false records and/or obstruction of justice charges). It is now well know that the U.S. authorities have repeatedly successfully prosecuted various cruise operators, as well as commercial vessel operators, captains, and chief engineers of illegal by-passing of the oily water separation system and/or the presentation of an Oil Record Book containing “false entries.” Prosecutors have also successfully prosecuted vessel owners and operators for ‘obstructing justice.’ It is the goal of this paper to introduce key individuals in the maritime industry to ‘need to know’ information to be prepared to address this serious and alarming situation for vessels calling U.S. ports. Additionally, as more fully detailed below, we offer the most basic, yet essential, advice a lawyer can give: shipboard and shore-side personnel should seek the advice of counsel as soon as practical, and must always be truthful and forthright in their dealings with the U.S. authorities. Of course, it is extremely advisable that if the U.S. authorities undertake any onboard investigation, which goes beyond the scope of the ordinary port state control inspection, counsel should be engaged to protect the rights of the owners, managers, officers and crew. It is without question that an ounce of prevention, goes much further than a pound of cure.
U.S. Government’s Modus Operandi
Coast Guard investigators and prosecutors appear to have focused their efforts on alleged illegal by-passes of shipboard oily-water separation equipment through the use of flexible hoses and flanges. While, technically speaking, the U.S. has no jurisdiction over unauthorized discharges by foreign-flag vessels in international waters in violation of MARPOL, it does, indeed, have jurisdiction, and vehemently prosecutes, false Oil Record Book entries, obstruction of justice and witness tampering.
The Nature of Criminal Liability
A. Mens Rea
Historically, the U.S. courts have recognized that in order to be guilty of a crime, a person must have a criminal intent or mens rea. Thus, in order to be guilty of a crime, one needs to have acted with wrongful purpose, knowledge of a particular wrong, or in a reckless and/or willful manner. The basic notion running through the traditional criminal law was not to criminalize conduct absent a showing of evil intent or motive or that which would be traditionally considered a civil wrong, addressed by civil remedies. Most judicial interpretations of traditional general criminal statutes incorporated the concept of mens rea, even if not specifically provided for in the statute. The prescribed mental state necessary to trigger criminal liability varies from statute to statute. Following the traditional rule, one would expect that maritime criminal liability would be predicated upon the individual’s mental status for: willful or knowing conduct, criminal negligence, recklessness and willful ignorance.
Unfortunately, this basic concept of law and fairness relating to minimal intent requirements was abandoned in the application of statutes dealing with the public welfare, including environmental statutes. These “public welfare” statutes were initially concerned with the regulation and protection of the public from adulterated food and drugs. Thus, the courts reasoned that the public safety outweighed the traditional requirement of criminal intent. Such statutes originally came into being to protect the public from the dangerous hazards resulting from the industrial revolution.
Because environmental laws are specifically designed to protect the public safety and welfare, they have been construed by the courts in a manner which maximizes public protection. Consistent with this approach, some criminal environmental statutes, such as the Refuse Act, are based on the notion of strict liability, or impose criminal liability for failure to comply with environmental regulations even when the violator was unaware that his or her conduct violated a law or regulation. In addition, some statutes impose criminal liability upon an individual corporate officer based on his or her position of responsibility in the corporation. According to this public welfare theory, the only mental state required, if any, is that which is explicitly stated in the statute, as opposed to being incorporated through traditional criminal common law. The application of such statutes may result in criminal liability for conduct that would not rise to the level of criminal conduct in traditional criminal statutes.
B. Basic Elements of Criminal Liability
1. Negligence. In criminal law, there is a recognized distinction between criminal negligence and civil negligence. American courts dealing with common law criminal cases have held that the civil negligence standard of failure to use reasonable care is not enough to impose criminal liability. Rather, criminal negligence is required to impose criminal liability. A typical definition of criminal negligence is contained in the New York Penal Law:
A person acts with criminal negligence with respect to a result or circumstance when he fails to perceive a substantial and unjustifiablerisk that such result will occur or that such circumstance exists. The risk must be of such nature and degree that the failure to perceive constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.
Common sense dictates that these “substantial risk” and “gross deviation” requirements should apply to a maritime incident where a general criminal statute containing negligence as an element is charged. However, the courts have held that where negligence is included as an element in an environmental statute, proof of simple negligence alone is enough for conviction. As an example, the criminal negligence provisions of the Clean Water Act have been construed to require only proof of simple negligence rather than gross negligence to sustain a criminal conviction. Obviously, the proof required to establish simple negligence is much less than the proof required to sustain a charge of gross negligence, and a conviction under such statutes is almost a foregone conclusion. It is precisely because it is so easy for the prosecutors to obtain a conviction under these statutes, that the prosecutions of crewmembers and company officials has become so prevalent.
2. Recklessness. Reckless conduct demands a higher level of culpable conduct than negligence. In traditional criminal statutes, the seriousness of a crime will be greater when there is reckless conduct, as opposed to where there is only criminally negligent conduct. The definition of reckless conduct is:
[A] person acts recklessly with respect to a result or circumstance when he is aware of and consciously disregards a substantial and unjustifiable risk that such result will occur or that such circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of conduct that a reasonable person would observe in the situation.
While negligence is the failure to perceive a risk, recklessness is to perceive the risk but to consciously disregard it. Proving recklessness, even under the environmental statutes, is a more daunting task for prosecutors. As a result, while recklessness is a criminal charge that prosecutors pursue, convictions under this theory are more difficult to obtain. Criminal charges based on recklessness often times are used as bargaining chips to obtain guilty pleas of negligence which, in turn, lead to the imposition of fines, often times, significant in quantum.
3. Knowing Conduct. While the public welfare approach to crimes permits strict liability statutes, Congress has attempted to prevent the criminalization of innocent conduct by expressly including a knowledge element as part of the mens rea requirement in the majority of criminal environmental statutes. In order for criminal liability to attach in this class of offenses, the act must be committed ‘knowingly.’ An act is done knowingly if it is done intentionally or voluntarily. It is not necessary that the person be aware that the act is illegal. Also, there is a line of cases which hold that willful ignorance can be considered the equivalent of knowledge. This concept comes into play when there is evidence that a defendant, usually a supervisor, deliberately chooses to ignore what would have otherwise been obvious to him, or consciously avoids learning of illegal conduct.
4. Corporate Liability. It is an established principle in criminal law that a corporation can incur vicarious criminal liability for the actions of employees acting within the scope of their employment. Additionally, a corporation may have direct criminal liability for the acts of directors, officers or employees. Direct liability may be imposed if company policies or directions cause or contribute to the incident. For example, direct liability could result from shore-side personnel being aware of and/or condoning crew incompetence, or a failure to properly train the crews, or a failure to implement and monitor compliance programs or the failure to ignore shipboard practices such as impermissible overboard discharging of waste and/or oily water slops. Furthermore, corporate actions (depending upon privity, knowledge and/or control) can result in individual criminal liability for corporate officers as well as for the corporation.
In addition, a corporate officer may be held criminally liable for violation of an environmental statute, even if the officer did not participate in the illegal activity. Under the “Responsible Corporate Officer Doctrine”, criminal liability can be imposed on corporate officers if they were in a position to know about or prevent the criminal act, even if they did not actually commit the alleged crime. This doctrine is very harsh in that it can result in criminal liability being imposed on a corporate officer merely because of that officer’s position of responsibility, as opposed to any particular conduct on the officer’s part.
The Responsible Corporate Officer Doctrine should be of particular significance and concern to vessel operating and/or management personnel. Under this doctrine, if an officer or responsible individual at such companies actively engages in acts or omissions, which result in a spill incident or a criminal violation, that person and company can be charged with crimes under the various statutes. For instance, if an individual at the management company knowingly hires an incompetent master or crewmember who is responsible for an oil spill incident, that individual and his company are at risk for criminal prosecution. If an individual at the management company fails to comply with the ISM Code, or fails to implement systems to monitor the vessel personnel’s compliance with the ISM requirements, that individual and/or his company is at risk. If an individual at the vessel’s operating company knows, or should have known, of a defect in the vessel’s equipment which causes or exacerbates a pollution incident, that individual and/or his company is at risk of criminal prosecution.1
The fact that an owning, operating, or managing company and its personnel are located outside the United States should be of little comfort. United States prosecutors have displayed surprising ingenuity, doggedness and resilience in pursuing those responsible for criminal violations, even minor ones. Under the right circumstances, United States prosecutors can (and will) confiscate vessels to collect fines and penalties, charge and hold vessel personnel pending trial, charge owning, operating and/or management companies and responsible corporate officers with violations of environmental regulations, even if such individuals are outside the United States. It should be borne in mind that the United States is a signatory to a number of extradition treaties with other countries and, if necessary, prosecutors can invoke such treaties to bring a responsible individual to the United States to stand trial for violations of environmental criminal statutes.
Criminal Statutes and Sanctions
There is a broad array of criminal sanctions available to the U.S. government in the investigation and prosecution of cases involving a suspected criminal offense. Recently, as alluded to above, there have been an exorbitant number of investigations regarding alleged MARPOL and other environmental offenses. The United States treats such violations seriously, and has demonstrated that it will spare no expense in the investigation of such matters.
For your guidance, below please find a brief outline of a number of laws and statutes which U.S. Federal prosecutors generally have used in criminally charging vessel Owners, Operators, Managers, Officers or, in many circumstances, individual crewmembers.
A. The Act to Prevent Pollution from Ships (APPS)
The Act to Prevent Pollution from Ships, 33 U.S.C. §§ 1901-1911, adopts as U.S. law the provisions of the International Convention for the Prevention of Pollution from Ships (“MARPOL”). Various administration regulations have been promulgated by the Coast Guard to enforce the provisions of MARPOL and the APPS. See 33 C.F.R. pts. 151 and 155.
Under 33 U.S.C. § 1908(a), it is a class D felony to knowingly violate the provisions of MARPOL. A class D felony is punishable by up to 10 years imprisonment, and a fine of up to $250,000 for an individual, and $500,000 for a corporation, for each violation. 33 U.S.C. § 1809(a); 18 U.S. C. § 3559(a)(4); 18 U.S.C. § 3571 (b)(4); 18 U.S.C. § 3571(c)(3). A vessel violating a provision of MARPOL may be arrested and sold to satisfy any fine or penalty under the Act 33 U.S.C. § 1908(d).
The security being requested by Coast Guard officials and U.S. prosecutions for alleged MARPOL violations is a USD500,000 corporate surety bond, rather than the customary P&I Club issued Letter of Undertaking.
B. Security for Release of Vessels Under the Act to Prevent Pollution from Ships (APPS)
Under 33 U.S.C. § 1908(e), the United States may revoke the U.S. Customs clearance of a vessel and detain it where reasonable cause exists to believe that the ship, its owner, operator or person in charge may be subject to a fine or civil penalty for a MARPOL violation under the APPS.
C. The Clean Water Act
The Clean Water Act (CWA) 33 U.S.C. § 1251, et seq. prohibits the discharge of any pollutant by any person into navigable waters of the United States, 33 U.S.C. § 1311(a). A “knowing” violation of the Act is a felony. A “negligent” violation is a misdemeanor. The Act also prohibits the discharge of oil or hazardous substances into the navigable waters of the United States, or into the waters of the contiguous zone . . . in such quantities as may be harmful. 33 U.S.C. § 1321(b)(3). Failure to report a discharge is punishable by imprisonment of up to five years. 33 U.S.C. § 1321 (b)(5). The Clean Water Act also provides that the term “person” includes a “responsible corporate officer.” 33 U.S.C. § 1319 (c)(6), (see, discussion of Responsible Corporate Officer, below at paragraph 6).
D. The Rivers and Harbors Act
Under section 407 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 401, et seq., any discharge of refuse of any kind from a vessel into navigable waters of the United States is prohibited. A violation of the Act is a misdemeanor. 33 U.S.C. § 411. The courts have taken a broad view of what constitutes “refuse” under the Act, and the Act has been extended to a discharge of oil or petroleum. Violation of the Act is a strict liability offense which does not require proof of either intent of negligence. Accordingly, a person can be convicted of a misdemeanor violation under the Act based solely upon proof that the person placed a banned substance into navigable waters of the United States.
E. The False Statements Act
Under 18 U.S.C. § 1001, providing a false statement to the U.S. Government is illegal. To sustain a conviction for a violation of the Act, the Government must show: (1) that a statement or concealment was made; (2) the information was false; (3) the information was material; (4) the statement of concealment was made “knowingly and willfully;” and (5) the statement or concealment falls within the executive, legislative or judicial branch jurisdiction.
Falsity through concealment is found to exist where disclosure of the concealed information is required by a statute, government regulation, or form. Also, a false statement about, or concealment of any prohibited discharge satisfies both the Act to Prevent Pollution from Ships or the Clean Water Act, since both impose the duty to report. Likewise, a false entry in a vessel’s oil record book has been the grounds for numerous felony indictments.
F. Responsible Corporate Officer Doctrine
Under the “Responsible Corporate Officer Doctrine,” criminal liability for violations of environmental laws can be imposed on corporate managers or officers who were in a position to know about and prevent a violation, even if they did not actually commit the alleged crime. A person can be held liable as a responsible corporate officer based upon the persons’ ability or authority to influence the corporate conduct which constituted the violation. In the past, the United States has used this doctrine to convict high level officers of corporations, including presidents of corporations, for violations of environmental laws committed by lower-level employees.
Generally, there are three (3) requirements, which must be satisfied to impose liability under the doctrine. First, the individual must be in a position of responsibility, which allows the person to influence corporate policies or activities. Second, the person, by reason of his corporation position, could have prevented or corrected actions, which constituted the violation. Third, the individual’s actions or omissions facilitated the violation.
The Responsible Corporate Officer Doctrine has been applied in the context of violation of environmental laws. There is certainly a potential for individual criminal exposure for violations by corporate officials for violations of which they have knowledge and the authority to prevent. Knowledge of the facts can be inferred in many cases, requiring only that the government establish that the person had the authority and capacity to prevent the violation, and failed to do so.
G. Perjury/Providing False Information to Government Representatives
Criminal laws of the United States provide for severe penalties for providing false information to a government representative, and similarly, providing false testimony under oath to a Grand Jury. Similarly, influencing or attempting to influence the testimony of another, or destruction or alteration of evidence are viewed under United States law as extremely serious, and would result in extremely serious criminal consequences to any individual crewman or others involved in such activities.
H. Witness Tampering
U.S. authorities vigorously investigate and prosecute individuals and corporations suspected of tampering with witnesses in connection with an on-going investigation of pollution and/or illegal discharge incidents. Under 18 USC § 1512, anyone who knowingly uses intimidation or physical force, threatens, or corruptly persuades another person, or attempts to do so, or engages in misleading conduct toward another person with the intent to hinder, delay or prevent the communications to a law enforcement officer or a judge of the United States of information relating to the commission, or the possible commission, of a federal offense, shall be fined or imprisoned up to ten (10) years, or both.
If two or more persons conspire either to commit an offense against the United States, or the defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, pursuant to 18 USC § 371 each shall be fined or imprisoned up to five (5) years or both.
Recommendations for Owners/Operators/Managers and Shipboard personnel to avoid and
respond to U.S. authorities inspections and criminal investigations
- Owners/Operators/Managers and Shipboard personnel must, at all times, obey all international and U.S. environmental regulations;
- Owners/Operators/Managers and Shipboard personnel must ensure that company procedures and directives properly implement international and governmental regulations;
- Owners/Operators/Managers and Shipboard personnel must ensure that crews and employees are well trained, and that proper reporting procedures are developed;
- Owners/Operators/Managers and Shipboard personnel must avoid shortcuts and, most importantly, avoid ‘burying your head in the sand’ if you know, or should know, something that requires attention is not being attended to;
- Owners/Operators/Managers and Shipboard personnel must keep accurate records, but avoid the proverbial “CYA” memos;
- As a matter of practice and procedure, all flanges should be removed from any flexible hoses maintained on board vessels, so as to avoid creating wrongful suspicion of an illegal by-pass of the oily-water separation equipment;
- Blank-off any flanges located at or near the oily-water separating equipment and overboard discharge valves, which may exist as original or modified construction, but are not used as a matter of course;
- As a matter of policy, Owners/Operators/Managers and Shipboard personnel should implement a “no alcohol” policy while the vessel is in the United States waters. Nothing creates a bigger stir or potential for criminal prosecution, fines, penalties and loss of limitation of liability, than a spill incident resulting from the use of alcohol by a crew member.
- All entries in the Oil Record Book must be truthful, and in compliance with MARPOL requirements;
- All shipboard personnel must be truthful and forthcoming during all port state inspections;
- Owners/Operators/Managers must not attempt to influence officers and/or crew as to their discussions with the authorities, other than to insist that the officers and crew are honest and forthright with all authorities; and
- Legal assistance, including criminal counsel, must be engaged as soon as possible in order to assess the situation and provide advice to the Owner/Operators/Managers/
Officers and Crew, including engaging individual counsel for all officers and crew, as necessary and appropriate. No one on board a ship can or should be forced to speak to an investigating law enforcement officer if there is a possibility that the person may incriminate himself by doing so. As a matter of policy, shipowning companies, operators and/or managers should ensure that crews are not coerced by company officials to give statements to law enforcement officials on the scene. Each crewmember (and, indeed, any corporate personnel that is a target of a criminal investigation) is entitled to consult with counsel and to have counsel present when being interviewed by law enforcement officials.
For more information regarding any specific inquiries you may have concerning U.S. investigations and prosecutions of suspected Marpol violations, please contact George M. Chalos, Esq. of the U.S. law firm: Chalos & Co., P.C. (www.chaloslaw.com) at firstname.lastname@example.org or email@example.com.
- In the NORTH CAPE spill incident off the coast of Rhode Island, the owning company, its President and Operations Manager were charged, and pled guilty, to criminal violations of various environmental statutes on the grounds that they knew, or should have known, that the anchoring system on the oil carrying barge that ultimately ran aground was not working properly. In that case, while the President and Operations Manager avoided jail time, they were required to pay huge fines and to bear the stigma of a criminal conviction. The tug master was also charged and convicted, but he paid a substantially smaller fine. A similar corporate officer prosecution occurred as a result of the MORRIS J. BERMAN spill in Puerto Rico.