Skip to main content

Car carrier company fined $1.5M

Crews reportedly used a ‘magical pipe’ to dump contaminated bilge water into Maryland waters

Crews reportedly used a ‘magical pipe’ to dump contaminated bilge water into Maryland waters

A New Orleans-based company that manages a fleet of huge car carrier ships that dock in Baltimore has been sentenced to pay a total of $1.5 million in fines and compensation after it admitted four of its ships routinely dumped “hundreds of thousands of gallons” of oil-contaminated bilge water into Maryland’s waters.

Federal investigators suspected the company’s ships of violating pollution laws when Pacific-Gulf Marine executives gave authorities the results of their internal investigation, according to the Department of Justice.

PGM’s investigation comprised “approximately 50 reports of interviews with various current and former employees who had worked aboard” the four ships, the government says in a press release. “The government was previously unaware of PGM’s internal investigation and did not request or require the disclosure,” according to papers filed in court. “Many of the interviews contained confessions, admissions or otherwise revealed incriminating information and evidence of illegal conduct relating to environmental violations,” according to documents filed in court.

The company admitted that it “failed to provide sufficient management resources and support to the ships, and also failed to exercise sufficient supervision and management controls to prevent or detect criminal violations by its employees,” the government press release says. “The motive for the criminal conduct was to save money,” according to papers filed in court.

Two former chief engineers of the car carrier Tanabata, one of the ships managed by PGM, have been indicted on federal environmental charges related to the case, the government says.

The investigation began Sept. 2, 2003, when the Coast Guard was inspecting Tanabata and a sister ship, Tellus, in Baltimore. During an inspection in March 2003 of a third PGM ship, Fidelio, a bypass pipe was found “laden with oil” and “hidden under the engine room floor,” the government says. During the September inspections, similar devices were found on the two ships in Baltimore but, as had the engineer in the earlier inspection, the engineers of Tellus and Tanabata denied any illegal conduct. The government later learned that the pipe, used to bypass the “oily water separator” — an anti-pollution device — was known aboard the Tanabata as “the magical pipe.” The government says that after the inspection, the ship’s chief engineer allegedly threw the pipe overboard.

U.S. District Judge William M. Nickerson accepted a plea agreement between the government and the shipping company that requires PGM to pay a $1 million criminal fine, $500,000 for community service and serve three years of probation under a court-approved “environmental compliance program.” Half of the $500,000 community service payment will fund environmental projects to improve, restore or study water quality in the Chesapeake Bay in Maryland, while the other half will fund environmental education for mariners at U.S. maritime schools, the government says.

“We will continue to prosecute companies who use our oceans as dumping grounds until those shipping companies clean up their acts,” says David M. Uhlmann, Chief of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division. “But this case also demonstrates that companies like PGM can help right their wrongs by cooperating with criminal investigators, and we are hopeful that others will follow PGM’s example by identifying misconduct within their organizations and voluntarily disclosing that information to law enforcement officials.”

PGM’s fine is far from the largest imposed against a shipping company. In United States v. MSC Ship Management Limited, the Hong Kong-based container ship company pleaded guilty in 2006 to conduct similar to that in the PGM case but also including conspiracy, obstruction of justice, destruction of evidence, false statements, and violating the Act to Prevent Pollution from Ships. The company was fined $10.5 million, “the largest fine in which a single vessel has been charged with deliberate pollution and the largest criminal fine paid in an environmental case in Massachusetts,” the government says.