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Live from Posidonia

Issues of compliance, cost and competency in US waters

Issues of compliance, cost and competency in US waters
Transparency, training and accurate record keeping are key to avoiding US regulatory enforcement according to Jeanne Grasso, partner at Blank Rome LLP.

In 2013, 9,200 vessels called at US ports with 9,300 inspections carried out by port state control there resulting in 120 detentions, of which 18% were for marine pollution, Grasso told delegates gathered at the North American Marine Environment Protection Association's seminar at Posidonia in Athens.

For fuel switching and bunker issues within the North American emissions control area (ECA), procedures are in place for when things go wrong and owners are best being honest, Grasso explained.

Recalling a case where a ship had entered the ECA and forgotten to switch fuels, Grasso's advice to the ship was simple "Log it. Log it accurately. You shouldn't turn around, go back outside the ECA and switch, that is not in your best interest, log it accurately and transparently. I think in all the issues we deal with, where there's transparency and accuracy, I don't think I have ever seen that get a company in significant trouble."

A 20-year history of "magic pipe" cases dealing with illegal discharges in the US, often involving false record keeping, highlight the serous financial risk involved in cutting corners or forfeiting the integrity of onboard records.

In instances where port state control suspects significant malpractice, cases are forwarded to the Department of Justice for prosecution. Since 2008, 87 such cases have been forwarded and in 2013/2014 11 criminal prosecutions have led to more than $25m in fines, sentences totalling six months in prison for engineers and cases continue to be filed. The DOJ's Vessel Pollution Initiative has led to the handing out of 38 years in prison sentences and over $300m in fines.

Driving some of these cases is a rise in whistleblowing, backed by rewards for whistleblowers that can be up to half the value of fines imposed in the case. Often awards amount to between 25 and 30 times the annual salary of a crew member, with $17m awarded to 102 crew members to date.

The solution to avoid getting tangled up in such a case is not cheap, but is significantly cheaper that landing in court. A culture of compliance and a clear stance that "non-compliance is not for the benefit of the company" were Grasso's suggestions for tackling the issue, "consider rewarding internal reporting... anyone on board should emphasise compliance, and ensuring that the vessel gets the equipment and fixes it needs is naturally key."