George Gaitas, Attorney, CHALOS & Co Law Firm, suggested some hot tips for avoiding the MARPOL-APPS criminal enforcement trap during his presentation at the 2016 SAFETY4SEA Conference & Awards. As he explained, in light of a recent ruling, they obtained in the Fifth Circuit Court of Appeals holding that the Chief Engineer of a foreign vessel is not criminally liable for failing to accurately maintain the oil record book, much of the value of this good ruling is lost by policies and procedures in the SMS manuals of companies that state exactly the opposite. He argued that it is these policies and procedures that should be changed.
The policy of the United States Coast Guard to implement the Congressional mandate of the Act to Prevent Pollution from ships (APPS) 33 U.S.C. § § 1901-1915 with the strictest enforcement by any port-state, continues to keep us very busy in defending owners and managers of ships.
Because we engage and fight back on behalf of our clients, instead of routinely caving-in and entering guilty pleas, we have had a measure of success in shaping up the law which is by no means clear or fair.
A case in point is that in its eagerness to criminalize MARPOL – something that this Convention does not contemplate – the U.S. Coast Guard has written regulations which on occasion have been stretched to the breaking point by government prosecutors in order to obtain convictions. For example, the regulation under 33 C.F.R. § 151.25(j) was being used routinely as the predicate for criminal indictments of chief engineers, the owners of the vessel. and its managers. The regulation provides:
“The master or other person having charge of a ship required to keep an Oil Record Book shall be responsible for the maintenance of such record”
This regulation was at the core of the indictment of a Greek chief engineer of a Marshal Islands flagged vessel for violation of APPS. At the trial, after the close of the government’s case we moved to dismiss the charge and acquit the defendant. Our argument was a simple one. The chief engineer was neither the master nor a person in charge of the vessel, therefore he could not be held responsible for the maintenance of the oil record book for entries that he made while the ship was sailing outside the jurisdiction of the United States. His making of these allegedly false entries were acts committed on the high seas, outside of the jurisdiction of the United States. A state can criminally prosecute only for acts committed within its territorial jurisdiction. The judge denied the motion and the case went to the jury. They returned a guilty verdict.
We appealed the conviction to the Fifth Circuit Court of Appeals and we prevailed. The Court agreed with us and held.
“Chief engineers on foreign-flagged vessels cannot, however, be prosecuted simply for having previously failed to maintain an oil record book once a ship enters U.S. waters, since 33 C.F.R. § 151.25 assigns that duty explicitly and exclusively to the “master or other person having charge of the ship.” United States v. Fafalios, 817 F.3d 155, 162 (5th Cir. 2016)
The decision of the Court of Appeals in consonant with the relevant provisions of MARPOL as to who is responsible for the maintenance of the oil record book.
RESOLUTION MEPC.117(52), Regulation 17 provides in relevant part:
“4. Each operation described in paragraph 2 of this regulation shall be fully recorded without delay in the Oil Record Book Part I, so that all entries in the book appropriate to that operation are completed. Each completed operation shall be signed by the officer or officers in charge of the operations concerned and each completed page shall be signed by the master of ship.”
There is nothing in this regulation that requires the chief engineer to be responsible for maintaining the oil record book. But, in the end who is responsible for the maintenance of the oil record book when a ship is within a port state? This depends of the domestic laws of the port state. As matters now stand, the law at least in ports of Louisiana, Mississipi, and Texas (where the Fifth Circuit Court of Appeals has jurisdiction) and arguably in the rest of the United States does not make the chief engineer responsible for the maintenance of the oil record book.
Unfortunately, some safety management system manuals are written in such a way as to cancel out this good work. In several instances we have found that the policies and procedures they contain undo what we have accomplished for owners.
In recent cases we have had the government arguing in court that it is the company’s own policy that makes the chief engineer responsible and liable for failing to accurately maintain an accurate oil record book.
Take for example the following statements, respectively, from the Safety Manual and the Engine Manual of a vessel that got into APPS difficulties:
“The Oily Water Separator shall be operated only during daylight hours, under the direct responsibility of the Chief Engineer and in agreement with the Master”
“The Chief Engineer is responsible for ensuring that all engineering records are properly and accurately maintained at all times and for reporting to the office on a regular ad hoc basis”
The question is why? Why would anyone point to the Chief Engineer as the person onboard responsible for accurately maintaining all records? MARPOL does not require it. The Coast Guard regulations no longer require it? Why have such a policy then? The criminal responsibility of the company, in these prosecutions, is vicarious. i.e. to prevail against the company the government needs to show that the prohibited act (failing to maintain an accurate oil record book) was committed by the chief engineer in the course and scope of his employment. Such policies in ISM manuals are self-defeating in that they impose responsibilities on the chief engineer greater than those that MARPOL and the law impose. They define a scope of employment wider than what the law requires, and entangle the company in liabilities it should not have. It simply does not make any sense to invite fines ranging in the hundreds of thousands of dollars or even in the million-dollar range by unthinkingly adopting such policies and procedures.
My advice to chief engineers and their employers is simple don’t have onboard the vessel oil record books entirely written by the chief engineer in his hand – writing. The ORB is a shipboard record. It is plain that whoever from the engine department crew does the relevant transfer must also make the relevant entry and sign it.
Along similar lines, what we find extremely frustrating are cases in which the very foundation of the prosecution rests on uncontrolled documents -entirely outside the ship’s SMS that some officers or crewmembers insist on keeping. One of the worst offenders in this category is the engine room sounding log. We are not aware of any law or convention that requires a vessel to maintain such a sounding log. Nevertheless, we find chief engineers who persist in maintaining such documents that end up becoming a key ingredient in many a criminal prosecution under APPS.
Sounding logs play right into the hands of the Coast Guard and, eventually, the prosecutors who invariably find inconsistencies between their contents and those of the oil record book. These inconsistencies, the government argues, are proof that the entries in the oil record book are not truthful. Such “evidence” has led many owners to enter pleas of guilty to avoid payment of a much larger fine. Just in the last year I have seen 3 instances in which a sounding log was involved
You might ask, how do we keep track of oily water in the bilges and in the oily waste tank. The answer is simple. You don’t need such a record for any reason. Once you are informed, you are informed and you don’t need to keep statistics on how much engine room bilge you have on a daily basis. I have a strong suspicion that sounding logs in some instances are not accurately maintained on purpose. There is a large money reward for whistleblowers, who have an interest in maintaining an inaccurate sounding log as part of a scheme to implicate the ship in MARPOL violations.
The solution to this problem is simple. Prohibit the use onboard the vessel of any uncontrolled documents.
Other examples of non-controlled documents I have seen onboard vessels include two sets of engine logs, rough and smooth. If you check this against the relevant SMS manuals you often times see that there is no mention in the SMS of a smooth log. Yet it is part of the routine on a lot of ships. It must have its own rationale for some owners, but if you want to have these documents onboard your policies and procedures should provide for them.
Reverting to the Oil Record book, it is a good thing for the technical department that follows each vessel to monitor and see if oil record books are accurately maintained. An established periodic review and making sure that the job is done right may be helpful. However, you must be very careful what you write in your e-mails that give advice to the chief engineers concerned.
If your vessel is ever caught up in an APPS violation, what you thought was going to be private correspondence is no longer going to be private. The government will get the hard disk of the computer onboard that contains all of the e-mails exchanged with the company and they will be used as evidence against the company.
In a recent case a port engineer wanted to advise the chief engineer that a certain sounding figure in the ORB sounded too low to be true. He sent an e-mail to the ship stating so. The government, of course, argued to the jury that the owner was instructing the chief engineer to make false entries in the oil record book.
The lesson from all this is that no communication between the company and the vessel is private. All e-mail correspondence is discoverable or, worst, in a criminal case it will be seized and used as evidence against the company.
A MARPOL inspection in the midst of a port state control inspection should always be expected. We have often found that Chief Engineers and Masters don’t have a clue when a MARPOL related inspection is taking place, what to expect, and what they should do. The same is true with some shore-side safety management teams.
There is an excellent and comprehensive summary of what to expect and how to be prepared in a circular of Capt. M. B. Karr “ Guidance for the Enforcement of MARPOL Annex During Port State Control Examinations.” You can find it online at https://www.uscg.mil/hq/cg5/lgcncoe/docs/Annex%20I.pdf.I would strongly recommend it as required reading for all shore-side safety management people, all chief engineers and all masters. The Coast Guard follows it closely, and knowing what to expect can spare you of a lot of headaches.
Above text is an edited article of George Gaitas presentation during the 2016 SAFETY4SEA Conference & Awards
You may view his video presentation by clicking here
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
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George Gaitas, Attorney, CHALOS & Co Law Firm
George A. Gaitas was born and raised in Greece by a seafaring family, originating in the island of Andros with roots in Zakynthos and Crete. He received all of his higher education in the United States where he was first licensed to practice law (in Kansas).
Later, the allure of the sea brought him to Tulane University in New Orleans where he studied maritime law and earned his LL.M. After some years with a traditional maritime law firm in New Orleans, he returned to Greece and joined a privately owned shipping group as general counsel where he worked in all areas of the business in both the dry cargo and tanker sectors, accumulating considerable hands-on shipping experience.
George A. Gaitas practice is based at the Houston, Texas office of Chalos & Co. but has a nationwide / worldwide scope, in representing vessel owners in both contentious and transactional matters. George Gaitas is fluent in Greek and English, and has a working knowledge of French.
