Former US Coast Guard attorneys, P&I Club GARD senior claims executive and lawyer Sean Pribyl and Independent Marine Consulting consultant Andrew Norris, explain how best to handle an inspection and investigation
Over the past year, the US Department of Justice (DOJ) has continued to aggressively prosecute shipowners and operators of foreign-flag vessels calling at US ports for violations of the Act to Prevent Pollution from Ships (APPS), which is the US implementation of the Marpol convention. Fines of over US$1M are not unusual.
The US Coast Guard (USCG) has broad authority to subject foreign vessels to Port State Control (PSC) Inspections while in US jurisdictional waters. APPS investigations are different from routine PSC inspections; they are expanded investigations by the Coast Guard to further investigate whether environmental crimes have been committed by or onboard the vessel. APPS prosecutions are based on evidence gathered by the USCG while aboard a vessel. How does the Master, crew, and ship operator know whether the USCG is aboard to investigate a potential APPS violation?
APPS cases for foreign-flagged vessels typically begin as a port state control examination. If an irregularity is detected, an expanded exam (APPS investigation) is conducted. This expanded exam can include gathering witness statements and seizing any potentially relevant evidence.
Coast Guard Investigative Service (CGIS) special agents often assist in these APPS investigations. If a CGIS special agent shows up aboard your vessel, that is a sign that a criminal investigation is at least being contemplated. Be aware that the Coast Guard is not required to advise the company or its employees of the type of investigation it is conducting, or when a PSC exam has evolved to a criminal investigation.
Reports must be made to the Coast Guard in the event certain incidents, like marine casualties or oil spills, occur. This requires the mandatory disclosure of information that might later be used directly in an action against the vessel or its representatives, or lead to the discovery of further evidence that might be used in a civil or criminal action. Failure to report an oil spill or release of hazardous substances can lead to criminal prosecution and, upon conviction, a significant fine, imprisonment for up to five years, or both.
Beyond information that must be disclosed in mandatory reports, the USCG cannot ‘force’ the company or its employees to divulge any information through any means short of a subpoena. This means that any person being questioned by the Coast Guard during an investigation can decline to answer questions, although such steps may cause collateral delays to the inspection or departure clearance. If a statement is made or evidence produced, it is essential that the information conveyed is truthful, because many cases arising from APPS violations involve false statements or obstruction of justice charges.
“The USCG is not required to advise the company or its employees of the type of investigation it is conducting”
Any written or oral information the company or its representatives provide to the Coast Guard, as well as any hard evidence (logbooks, piping, pumps, etc.) provided to or seized by the Coast Guard, can be used by US authorities for any purpose, up to and including as evidence in a civil or criminal proceeding.
The company and any employee questioned during an investigation have the right to consult with an attorney and to have an attorney present during that questioning. Any reasonably experienced Coast Guard investigator will ask the attorney for the identity of the crewmembers, employees, or corporations he or she is representing. It may be a conflict of interest for an attorney retained by the operating company to represent crewmembers, since the interests of the various parties may conflict.
Some of these cases are prosecuted based on evidence provided by crew members as “whistle blowers,” meaning they are providing evidence of wrongdoing alleged to have been committed by other crew members. This means that there may be conflicts of interest not only between the shipowner and crew, but also between various crewmembers.
P&I Clubs in APPS cases have narrow cover for pollution fines that is limited to “accidental discharges”. This means that there is no cover as a matter of right for APPS violations arising from intentional bypassing of an oily water separator. This is the case even when the crewmember acted in contravention of company policy and without knowledge of the company management. That said, P&I Clubs do assist members by providing them information about lawyers who have a special competence in these types of cases.