Proposed law targets executives who knowingly sell or manufacture defective marine products
Company executives who knowingly sell or manufacture defective marine products could be sent to jail if a proposal to impose criminal penalties is passed by Congress this year.
The Coast Guard is working with legislators to develop a law that would crack down on irresponsible manufacturers. While there isn’t a widespread problem with defective boats, there have been a few cases in which manufacturers have failed to perform recalls or have resold recalled boats or parts, according to Phil Cappel, chief of the Coast Guard’s recreational boating product assurance office.
“Without penalties, it would be hard for us to take any action,” says Cappel.
An amendment in the Senate’s version of the Coast Guard Authorization Bill calls for up to a one-year jail term for directors, officers and executive employees who knowingly and willfully manufacture or offer for sale any recreational vessel that contains a defect of the vessel, equipment or component.
The National Marine Manufacturers Association, however, says that proposal is too broad and too vague. “This is really an extreme penalty, and it’s not based on any type of problem,” says Monita Fontaine, NMMA vice president of government relations. “It sets legal precedent that has not been adopted by any other manufacturing industry. … There is no other area of manufacturing in which an executive faces criminal prosecution.”
Fontaine says NMMA also objects to the term “executive,” which could include a large segment of marine industry employees. A salesperson, for example, might be held accountable for a defective yacht, yet a salesperson doesn’t have any control over the design and manufacture of the yacht, says Fontaine.
Cappel admits the language in the amendment is broad, and after lobbying efforts by the NMMA, the Coast Guard and legislators are striving to draft a new amendment that would direct criminal penalties only to those manufacturers who knowingly and willfully disregard recall notices. Federal officials say charging individuals is more effective than pressing charges against a company.
The Coast Guard Authorization Bill, which mainly addresses the agency’s budget, also would boost civil penalties from a maximum of $100,000 to $250,000. Fontaine says NMMA supports the monetary increase. The bill is expected to be passed this fall.
NMMA is urging those in the marine industry in particular to contact the bill’s conferees. A form letter is available at NMMA’s Boating Online Advocacy Tool Web site at www.nmma.org/government.