Page 12: of Maritime Reporter Magazine (September 2004)

Government Update court held, though, that the false state- ment occurred when the oil record book was presented for Coast Guard examina- tion while the ship was in a U.S. port.

After losing the procedural motions, the cruise ship operator settled this criminal charge by payment of $9 million and, in the related case, by payment of SIS mil- lion. No other ship owner or operator has litigated an oil record book charge since those highly expensive events.

Under federal law, a false statement consists of (1) making a statement oral- ly or in writing; (2) when the statement is false or misleading; (3) the false or misleading information is material: (4) the statement or concealment was made knowingly; and (?) the statement was made to a federal official engaged in performance of his or her duty. Here, the statement was made in the oil record book, which the ship is required to maintain and is required to present to the

Coast Guard upon request when the ship is in U.S. waters. If the federal govern- ment can prove that the chief engineer or another senior person in the ship knew that one or more entries in the oil record book (which the person in charge of the operation is required to initial) is false and that the false entry was made know- ingly, then the company can be held criminally responsible. The individual making the false entry (generally the chief engineer) can also be held crimi- nally responsible.

Because the oil record book bears the initials of the person making each entry and the signature of the master, the doc- ument serves the purpose of a signed confession, for which there is almost no defense.

To minimize the likelihood that the chief engineer or another engineering officer on the ship improperly disposes of the waste oil, the company should take positive steps to ensure that the

OWS is operating properly and is well maintained. The chief engineer should be clearly informed (preferably in writ- ing) that his or her primary goal in this regard is to properly handle and dispose of waste oil and that the general admo- nition to minimize expenses does not apply to this goal. Also, personnel should be clearly advised of the require- ment that log and record entries are to be made contemporaneously with the event and are to be accurate.

A preferred method of accomplishing both tasks is for the company to institute a maritime compliance program.

Federal law provides that, if a company has a compliance program in place and a violation occurs regardless, the compa- ny will be entitled to a major reduction in sentence. One major cruise ship com- pany benefited from this provision when it was proven that some of its personnel had engaged in improper discharge of waste oil and falsification of the oil record book. Both the Department of

Justice and the Environmental

Protection Agency (EPA) have written policies providing that, in appropriate cases, they will forego criminal prosecu- tion for companies with compliance pro- grams. The EPA has exercised such for- bearance in the past, although not yet in a maritime context.

The bottom line is that, for a ship owner or operator to avoid handing the federal government a signed confession in the form of an oil record book with false entries, the owner or operator must impress upon its engineering officers that they are to properly maintain and operate the OWS and to make accurate and contemporaneous entries in the oil record book. The engineering officers, particularly the chief engineer, must be given every incentive to do the right thing and no incentive to do the wrong thing.

Thordon's Non-Metallic Bearings And No-Sheen Lubricant

Establish Thor-Lube As The Proven Alternative To

Oil Lubricated Stern Tube Bearings

The environmental goal for ship owners and managers has never been clearer! All sources of ship-based oil pollution must be evaluated and eliminated, and when it comes to eliminating stern tube oil,

Thordon Bearings is playing a key role. WT

Developed by Thordon Bearings, the .'*,» yjj- environmentally friendly Thor-Lube stern tube bearing system offers ship j| owners a proven alternative to oil

Lubricated stern tube bearings. The

Thor-Lube system consists of non- f ^ metallic Thordon XL bearings, TL3G [ ^^ biodegradable water-based lubricant and a lubricant circulation and monitoring package.

Approved by all major

Classification Societies, commercial acceptance of the Thor-Lube system continues to grow.

Contact us for a copy of our references and new Thor-Lube brochure. And... never worry again about environmental issues caused by an oil sheen from even a small amount of stern tube oil leakage.

Ml )R»ON

Thordon Bearings Inc. 3225 Mainway, Burlington, Ontario Canada L7M 1A6

Tel: 1.905.335.1440 • Fax: 1.905.335.4033 www.thordonbearings.com

Circle 304 on Reader Service Card 12 Maritime Reporter & Engineering News