PIL Sentenced to Pay $2.2 Million for Environmental Crimes

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February 26, 2013

Southern Lily 2 docking in Auckland.

A federal judge in Washington, D.C. this week sentenced the Singapore-based container shipping company, Pacific International Lines (PIL), to pay $2.2 million as part of a plea agreement stemming from illegal bilge water operations on one of its vessels.

PIL had previously pleaded guilty to three felony charges that it made false statements to the U.S. Coast Guard; violated the Act to Prevent Pollution from Ships by concealing illegal waste water operations and discharges in a falsified oil record book; and operating a vessel in U.S. waters without a functioning oil water separator.

According to the plea agreement, the company operated the vessel Southern Lily 2 in American Samoa and, on June 22, 2012, was boarded by the U.S. Coast Guard for a routine inspection. During the inspection the Coast Guard discovered that the ship’s oil water separator was not functioning. The Coast Guard later learned that the device had not been functioning for several months and, at the direction of the chief and second engineer, the oily waste water had been being discharged overboard in violation of international law. The illegal discharges and the fact that the oil water separator did not function was not entered in the ship’s oil record book as required by federal law.

“Today’s sentencing is a noteworthy success for the few federal law enforcement agencies charged with enforcing U.S. and international maritime laws protecting the oceans and natural marine resources both around the remote U.S. Pacific Islands and throughout the vast area of the South Pacific,” said Joshua J. Masterson, Special Agent-in-Charge of Coast Guard Investigative Service-Pacific Region. “This case, being the third of its kind since 2011, should send a clear message to those shipping companies and mariners who willfully cut corners and violate the laws enacted to protect the oceans as well as place a much needed spotlight on this region of the South Pacific.”

As part of the plea agreement, Pacific International Lines was also placed on probation for three years, during which time it must operate under the terms of a government-approved Environmental Compliance Plan that includes review by an independent auditor of any of Pacific International Lines ships—including the Southern Lily 2—that trade in the United States.

In addition to the $2 million criminal fine, the judge also ordered Pacific International Lines to pay $200,000 to support community service projects, which will be administered by the National Fish & Wildlife Foundation and the National Marine Sanctuary Foundation.

International and U.S. law prohibit the discharge of waste containing more than 15 parts per million oil and without treatment by an oil water separator and oil sensing equipment—a required pollution prevention device. The Act to Prevent Pollution from Ships also requires that all overboard discharges be recorded in an oil record book, which is subject to inspection by the Coast Guard. The waste oil may be incinerated on board the ship or offloaded in port for proper disposal.

In related prosecutions, the second engineer of the Southern Lily 2, Qing Cao, pleaded guilty to a felony information charging him with operating the Southern Lily 2 in Waters of the United States without a functioning oil water separator in violation of the Act to prevent Pollution from Ships. The court sentenced Cao to 36 months of probation and ordered Cao to leave the country immediately. As a condition of probation, Cao was also ordered to not work on any vessels that call at U.S. ports during the term of his probation.

This investigation was conducted by the Pacific Regional Office of the U.S. Coast Guard Investigative Service Honolulu, Hawaii, and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental Crimes Section.

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