September 21, 2024
Business

Tanker firm fined $37M for dumping Company illegally spilled sludge, oil in ocean off MDI

BOSTON – A New York-based oil tanker company that illegally dumped sludge and waste oil into the ocean in several states, including off Mount Desert Island, Maine, has been ordered to pay $37 million in fines and penalties, the largest amount ever for a deliberate ship pollution case.

The sentence, imposed Wednesday by Judge Reginald Lindsay in U.S. District Court in Massachusetts, includes $437,500 for each of 12 crew members who blew the whistle on Overseas Shipholding Group Inc.

The fines were part of a plea agreement reached in December by the company and federal prosecutors. OSG must pay $27 million for violations in Boston; Portland, Maine; Los Angeles; San Francisco and Wilmington, N.C.

Of the $27 million in fines, $7.4 million directly correlates to violations that occurred in Maine, according to court documents. The tanker company also must pay $2 million that will go toward unspecified government and nonprofit organizations in Maine engaged in marine environmental education and research.

OSG, one of the world’s largest publicly traded oil tanker companies, agreed to pay another $10 million in January after pleading guilty to additional charges in Beaumont, Texas. The sentence there has not yet been imposed.

The company admitted to systematically dumping hundreds of thousands of gallons of sludge and waste oil into the ocean and deliberately altering logbooks to conceal the illegal discharges.

The violations came to light after the whistle-blowers were outraged by the systematic dumping, prosecutors said. In one case, a fitter allegedly was threatened with firing if he did not make a bypass pipe to facilitate the polluting. He responded by keeping a secret record of the dates of the oil discharges, prosecutors said. Another whistle-blower, a second engineer, called a Coast Guard hot line to report that ship officers were “tricking” an oil sensor by flushing it with fresh water.

“There should be no tolerance for those who deliberately despoil the environment,” Lindsay said during the sentencing.

The charges covered a pattern of actions stretching over five years, from 2001 to 2006. Illegal discharges near Nantucket and Mount Desert Island occurred between August 2001 and October 2003, according to court documents.

OSG operations head Robert Johnston expressed regret on behalf of the company.

“What transpired is not in line with our company’s core values, and I want to assure you that we are working very hard to ensure this never happens again,” he said in a statement he read in court.

The plea agreements in Boston and Texas require OSG to serve probation for three years, during which a federal monitor and outside auditing group will track the shipper’s activities.

U.S. Attorney Michael Sullivan’s office said the money collected from OSG will be divided among the districts affected by the dumping. At least $9 million will be earmarked to fund marine environmental projects.


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