An estimated 88 million gallons of oil and oily wastewater is intentionally dumped in U.S. waters each year. Globaly, the problem is even more significant. Key to saving our oceans and ending this environmentally destructive practice are whistleblowers.
Unlike most fraud, illegal ocean dumping occurs at sea. There are no witnesses. And shipping companies have plenty of tricks to hide their crimes. Merchant seamen, however, are uniquely poised to observe and report these practices.
Those seamen and corporate insiders with knowledge of violations of the Act to Prevent Pollution from Ships (“APPS”) or the MARPOL Protocol can receive a whistleblower reward of up to 50% of the monies collected by prosecutors from the wrongdoers.
A recent Wall Street Journal carried a grim story for those in the shipping industry. According to the Journal, “none of the world’s biggest container shipping companies is likely to post a profit this year.” Some companies are going bankrupt while others are looking for partnerships and new cash infusions. Inevitably, when money is tight, some companies cut corners and dump oily waste at sea. Under the MARPOL treaty and Act to Prevent Pollution from Ships (APPS), dumping untreated oily waste or bilge water is a crime. Workers who report these violations, however, are entitled to large whistleblower awards.
In this post we will discuss how to report ocean pollution and how to collect a reward. A recent study showed the average oil pollution whistleblower reward was $409,000.00 (USD).
MARPOL Whistleblower Case Study
In 2016, ship operator, Angelakos (Hellas) S.A., and the vessel’s owner, Gallia Graeca Shipping Ltd., were found guilty of violating the Act to Prevent Pollution from Ships, falsification of official records and fraud. On October 21st, a U.S. District Court judge fined the companies $1.3 million.
At trial, evidence revealed that the cargo ship M/V Gallia Graeca travelled from China to Seattle in October 2015. During the voyage, the vessel’s pollution-control oil water separator wasn’t working. In fact, the separator hadn’t been serviced for months. An international treaty – MARPOL – requires vessels to treat bilge water before pumping it into the sea. A separator is used to keep any oil in the water from being pumped into the ocean.
On three different dates during the Gallia Graeca’s voyage, the vessel’s operator discharged overboard approximately 5,000 gallons of oily bilge water. Making matters worse, they falsified the ship’s log book and lied to Coast Guard officials during an inspection.
When an inspector asked to see test the separator, an engineer on the vessel rigged the equipment to make it appear that it was working properly.
Knowing that the vessel could be held for violating the Act to Prevent Pollution from Ships, the ship’s owner conspired with the operator to keep the Coast Guard from learning of the problems.
At sentencing, Judge John Coughenour said he hoped the sanctions “would resonate and cause other companies to pause when they think about creating a corporate culture that encourages deception.” In addition to the $1.3 million fine, Judge Coughenour also ordered a $200,000 community service payment to be shared between the National Fish and Wildlife Foundation and the National Parks Foundation. It is anticipated that some of the money will be used for beach cleanup in Washington State’s Olympic peninsula. (The case was prosecuted in Seattle.)
The two engineers who participated in the cover up were given short prison terms. Both are Greek nationals.
After the sentencing, Seattle’s United States Attorney said, “These companies promoted a culture of lies and lawlessness that left a trail of pollution in the Pacific Ocean. Knowing that the Coast Guard was going to do an inspection of their shipping vessel, corporate managers allowed the Chief Engineer to present falsified documents. The significant fines imposed in this case send a clear message that those who spoil our environment by putting their business interests ahead of our laws will be held responsible.”
If the Wall Street Journal grim economic forecast is correct, we expect several more companies and crews will try to cut corners by dumping waste at sea.
The owner and operator of the M/V M/V Gallia Graeca got off easy. A year later Princess Cruise Lines was fined $40 million. The crewman who reported that case received $1 million. More on that story later.
Dumping at Sea, MARPOL and Oil Pollution Whistleblower Awards
The Act to Prevent Pollution from Ships (APPS) is one of the very few criminal statutes that authorizes whistleblower awards. Enacted as part of the MARPOL treaty, APPS and similar laws in other countries prevent ships from discharging oily water into the ocean anywhere in the world.
Under the Act, a crew member that has inside information about illegal oily waste discharges can receive up to 50% of whatever the government collects. The anti-oil pollution group Marine Defenders claims that whistleblower tips are behind over half the successful oil dumping charges against big ships. Unfortunately, most pollution incidents are never reported.
According to the organization, 88 million gallons of oil and oily wastewater is intentionally dumped in U.S. waters each year. To put that number in perspective, that is almost 8 times as much oil as was spilled by the Exxon Valdez several years ago.
The United States passed the Act to Prevent Pollution from Ships in response to the MARPOL Treaty. Today 156 countries have signed the protocol. 99.4% of ships are today covered by the law.
The APPS law follows the Annex 1 of the MARPOL Treaty. Under subsection one of the annex, all ships weighing more than 400 gross tons must maintain an accurate Oil Record Book to document the movement of all oil brought onboard. The Oil Record Book helps crew members log and keep track of oily wastewater discharges.
Under US and international law, the operator of a vessel must account for every drop of oil. That is why the Oil Record Book is so important.
Savvy Coast Guard inspectors not only inspect the logbook but also question the ship’s engineers. They also test the oil separation equipment to make sure its working. If the equipment isn’t working inspectors will often measure holding tanks to ensure that untreated waste has not been discharged into the sea.
Part two prohibits waste oil or oily water from being dumped into the sea unless the ship is
en route and the mixture is passed through an Oily Water Separator that reduces the oil content to less than 15 parts per million of water.
Finally, section three prohibits the discharge of oily water within 50 miles of shore.
Many ship operators get hung up on the books and record section of the law. Just like Al Capone was put in jail because of tax evasion, bad books and records frequently trip up shipping companies.
Seeking the “Magic Pipe”
A “magic pipe” is not a drug term! It’ a uniquely maritime slang for a pipe or device used to bypass a ship’s oily water storage tank or oily water separator. We believe it was so named because it can make waste “magically” disappear.
Magic pipes are hard to find. There are many places on a ship to hide such a device. Frequently concerned crew members will slip a note to the Coast Guard tipping them off to the existence and whereabouts of a magic device.
Coast Guard Marine Safety Specialist James Kline told the nonprofit Marine Defenders organization,
“From my experience, the most common form of cheating with regards to illegally dumping oil over the side of a vessel is what we call a magic pipe. This magic pipe can be any kind of vessel that will transport oil directly from a holding tank or a bilge, right around the oily water separating equipment right into the ocean. It could be a flexible hose. It could be a hard pipe that they made and it’ll have oil coming out of it.
“It’s a very hard thing to find, the all elusive magic pipe.
“If I had a message for mariners out there of the world, with regards to oil pollution, it would be: ‘Don’t do it’. Be responsible. Treat our environment with respect. If you like prison go ahead and dump oil in the water. If you don’t like prison, don’t do it.”
MARPOL Oil Pollution Penalties
Violating MARPOL and the Act to Prevent Pollution from Ships is a class D felony. It’s impossible to put a corporation in jail but captains and engineers on ships have been known to get prison sentences for illegal dumping. (The maximum sentence for an individual is 6 years.)
Companies may not go to jail but they do pay fines. The law sets the fine at $200,000 per offense or double the gross gain or loss. Corporate defendants can be ordered order to pay $500,000 or twice the game.
Act to Prevent Pollution from Ships & Air Pollution
Much of the U.S. enforcement activity under MARPOL has been centered on water pollution but both MARPOL and the Act to Prevent Pollution from Ships (APPS) also applies to air pollution.
APPS applies to all U.S.-flagged vessels and to all vessels, regardless of flag when at a U.S. port or operating within U.S. waters. The law covers not only the discharge of oily waste but also noxious liquids substances, trash (plastics); and certain air pollutants.
Although the MARPOL treaty dates back to the 1970’s, it wasn’t until 2005 that the pollution protocols were extended to air pollution. Under the most recent treaty version, MARPOL Annex VI now has requirements that regulate air pollution being emitted by ships, including the emission of ozone-depleting substances, Nitrogen Oxides (NOx), Sulphur Oxides (SOx), and Volatile Organic Compounds (VOCs). There are also requirements for on vessel incinerators, fuel quality and for off-shore drilling rigs.
The law also requires ships to keep accurate records and prohibits disposal of plastics anywhere in the ocean.
APPS, Oil Pollution Whistleblower Rewards and MARPOL
Seamen, officers and engineers are eligible for awards. If you know of a ship illegally discharging pollutants into the water, you could earn the next award. U.S. law may also protect you from retaliation and can pay double lost wages and legal fees too. These recoveries are in addition to any award.
The law says “In the discretion of the Court, an amount equal to not more than ½ of such fine may be paid to the person giving information leading to conviction.”
Since the U.S. enacted the APPS, hundreds of vessel owners and operators have been successfully prosecuted. In the last 100 cases, courts have handed out $33 million in rewards.
Both the Coast Guard and Department of Justice have repeatedly said they will aggressively enforce MARPOL and protect our environment from illegal ocean dumping. A Justice Department spokesperson recently said, “The Department of Justice will continue to hold shipping companies like Cardiff accountable for breaking the laws that protect our oceans. Shippers who fail to record discharges of oily waste, discharge waste illegally, or try to cover up this unacceptable and illegal practice will be prosecuted.”
Whistleblowers can feel secure knowing that the Justice Department supports paying rewards to whistleblowers. “[T]he APPS whistleblower award provision serves a valuable law enforcement purpose. Deliberate violations of MARPOL and United States law are far too common. Criminal conduct that takes place within the small community of those living and working abroad a vessel is difficult to detect…. The availability of the APPS reward aptly reflects the realities of life at sea and the pollution of the oceans. Because the pollution takes place in the middle of the ocean and usually at night, the only people likely to know about the falsification of ship records used in ports are employees in the engine room.”
Interested in learning more about oil pollution whistleblower rewards, MARPOL and the Act to Prevent Pollution for Ships? Give us a call. Our whistleblower clients have received more than $100 million in award monies. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries are protected by the attorney – client privilege and kept confidential.
Worried that you are not eligible for an oil pollution whistleblower reward because of nationality or lack of a U.S. green card? Don’t be. Awards can be paid regardless of citizenship or residency.
By now, hopefully you know how important whistleblowers are in the fight against oil pollution and illegal ocean dumping. We will close with one more story… the largest MARPOL APPS fine in U.S. history.
Our story involves the Caribbean Princess. In December 2016, Princess Cruise Lines pleaded guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Owned by Carnival (the world’s cruise ship company), Princess agreed to responsibility and pay a $40 million fine – the largest-ever criminal penalty involving deliberate vessel pollution.
The case started with Chris Keays, a junior engineer who had just been hired by Princess. On his second cruise tour, Keays noticed two crewmembers hooking up a flexible hose to a tank containing untreated oily waste water.
Chris knew from his training that he was witnessing a “magic pipe” set up. He also knew it was a MARPOL violation. “When I actually saw for myself a practice that was so obviously illegal, I was hugely disappointed that this was happening with a blatant disregard for the protection of the seas and in defiance of the law.”
Keays was smart. He took pictures of the magic pipe on his cell phone. He also took pictures from the control panel showing what was going on with the ship’s oily water separator and storage tanks.
After he got to the next port, Chris resigned and alerted the authorities. “I could not continue serving as a licensed engineer onboard knowing that I could report it immediately to expose the practice and prevent it happening further… [S]o I maintained my moral standard by acting without hesitation in the next available port.”
The investigation that followed would ultimately reveal that Princess Cruise lines had a long history of APPS MARPOL violations.
According to a prepared statement from the Justice Department,
“The pollution in this case was the result of more than just bad actors on one ship. It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.
“Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
Once again, if you believe you are entitled to an APPS MARPOL oil pollution whistleblower reward, give us a call. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries are protected by the attorney – client privilege and kept confidential.
MahanyLaw – America’s Whistleblower Lawyers