Magic Pipes

Pollution fines relating to the illegal discharge of oil contaminated bilge water continue to occur in the United States. Compliance programmes are commonplace and fines can be severe, often reaching several million dollars. In this article we look at the circumstances surrounding such claims, measures that may be taken to minimise the risk of them occurring and the potential implications for P&I cover.

Illegal Discharges

The US Act to Prevent Pollution from Ships (APPS) makes it a crime for any person to knowingly violate MARPOL. Violation can lead to the imposition of large financial penalties on shipowners, an Environmental Compliance Programme and crew members can face prison if found guilty of illegal actions.

The accumulation of bilge water in the machinery spaces of ships in service is inevitable. However, there is no excuse whatsoever to justify the illegal discharge of bilge water unless for the purpose of securing the safety of a ship or saving life at sea.

Unfortunatley, illegal discharges at sea do still occur and the US continues its robust position on prosecuting offenders.

Two repeated factors emerge when considering the details of recent pollution convictions as published by the US Department of Justice:

• The vessel’s bilge water processing equipment, such as the oily water separator
  (OWS), was bypassed leading to the illegal discharge of untreated bilge water
• Records, such as the Oil Record Book were found to be falsified.

Bypassing the OWS

The most common means of illegally bypassing the OWS is by the use of the ‘magic pipe’.

Magic pipes are usually temporary and flexible lengths of pipe/hose and are designed to be easily and quickly removed. The magic pipe may be a direct means of discharging the bilge holding tank (or even sludge tank) by bypassing the OWS, or there may be a direct discharge overboard from the bilge wells using a bilge pump. The more creative offenders may tap into other discharge systems such as the ballast pumps or sewage  fluent/greywater lines.

Looking for the Magic Pipe

The use or presence of a magic pipe may not be readily apparent. A vigilant inspector may detect them but bypass lines can be very difficult to identify as they may be positioned well away from the OWS and out of sight under the engine room floor-plates.

If the magic pipe has been removed prior to an inspection,  hen an inspector or surveyor may be alerted by disturbed paint coatings on flanges. Or conversely, if a fresh coat of paint is noticed on a flange this may be seen as an attempt to hide the evidence. Blanked flanges and T-pieces on the discharge pipes may also lead authorities to investigate deeper.

Preventing the use of the Magic Pipe

It should first be stressed that a vessel’s bilge system must not be changed or modified without class and/or administration approval and must be fully documented.

There are a number of preventative measures that can be considered to help stop the illegal use of magic pipes. These include the welding of beads on the pipe flanges or by drilling the flanges and fitting security seals through them.

The removal of suspicious looking T-piece connections or blanked flanges in the bilge system should deter any suspicions from inspecting authorities. This is particularly pertinent when looking at OWS discharge pipe-work; if portable hoses are found with mating connections that are compatible with the OWS discharge line connections then this could further arouse suspicions. 

Falsification of Records

As well as being a violation of MARPOL Annex I, and therefore a felony under US APPS, the
falsification of the Oil Record Book stands as a serious offence in itself and could fall under the destruction, alteration or falsification of records in Federal investigations as per US Code 18 USC § 1519 and statements or entries generally as per 18 USC § 1001.

The United States Coast Guard (USCG) will scrutinise the vessel’s Oil Record Book following a pollution incident or an allegation of illegal activity. They may also regularly inspect the Oil Record Book during port State inspections to determine compliance and to ensure that the vessel is not an environmental threat to US waters.

The veracity and reliability of the Oil Record Book can be assessed by checking for continuity in recorded bilge and sludge tank levels and comparing the relevant tank level changes against the times the OWS was in use. All changes in tank quantities should be accounted for and include processes where levels fall such as the boiling-off or the steaming of sludge tanks through heating.

Engine room alarm records may be checked for bilge high level alarms and the Oil Record Book then reviewed for a correlating entry related to the pumping operation. A further check that can be made by a reviewing party is to cross reference the present tank levels as recorded in the Oil Record Book with the actual levels at time of inspection.

It is easy to fall foul when maintaining the Oil Record Book, and port State authorities may interpret genuine mistakes as something more sinister. As such, the importance of this document cannot be overstated.

IMO Circular MEPC.1/Circ.736/Rev.2 Guidance for the Recording of Operations in the Oil Record Book Part I was issued in October 2011 and gives strict guidance on how the Oil Record Book should be completed.

Environmental Compliance Programs

As part of the plea bargain and terms of probation, an Environmental Compliance Plan (ECP) or Enhanced Environmental Compliance Plan (EECP) is regularly enforced on the shipowner by the United States authorities and is usually in addition to any financial penalties levied.

The ECP applies company-wide to both the vessels’ crews and the shore staff. Failure to comply with the ECP or allow access under the terms of the ECP can result in the modifying of the terms of probation or even lead to a company’s vessels being banned from calling at US ports.

A key purpose of the ECP is to introduce an Environmental Management System (EMS) which must be approved by the US authorities. This will include, inter alia, company environmental policy, objectives and targets, structure and responsibilities, operational controls, documentary controls, emergency procedures and training.

Additional measures with regard to shipboard systems and equipment that are above and beyond international legislation are often imposed. This could include the implementation of a tag system on flanges and valves, tamperproof controls on the oil content meter of the OWS or the removal of blank flanges on pipes that could present an opportunity to connect magic pipes.

Environmental Compliance Plans incur extra costs as well as increasing the administrative burdens and scope of maintenance programs for ship managers and crew. A high level of auditing is required under the ECP which requires the appointment of an external audit group and a separate third party auditor. It is usual for the shipowner to designate a Corporate Compliance Manager (CCM) and an Operational Compliance Officer (OCO) to manage the requirements of the ECP and to report to the US authorities.

Environmental Management

A number of methods can be employed to prevent illegal discharges and many of them will concern barriers and safeguards to physically prevent such activities from being carried out.

Likewise, regular checking and auditing of the Oil Record Book should identify errors in record-keeping.

These are of course vitally important, but another key aspect is the relationship between ship and shore staff. A culture of compliance must be developed and maintained whereupon the crew must not feel pressured into carrying out illicit acts for whatever reason.

The ship’s crew must believe that shore management is ‘on their side’ and all communications are unambiguous. The overriding culture at all levels of the organisation must be that environmental legislation must not be violated.

The last few years has seen the advent of the “whistle-blower” due to the high level of rewards on offer, which in the United States can be up to 50% of the imposed penalty.

A culture and formal mechanism should exist whereupon a concerned crew member can directly report to a senior member of shore management any concerns regarding potential pollution without fear of retribution.

INTERTANKO’s guidelines on whistleblowing policies are a useful source of further information.

Quite simply, the easiest way to help prevent illegal discharges is to simply take away the need to do so.

Further information on this subject can be found in North’s Loss Prevention briefing on Bilge Water Management & Pollution which can be downloaded here.

The Impact on P&I Cover
As detailed in North’s Circular of 2005 “International Convention for the Prevention of Pollution from Ships 73/78”, P&I Clubs in the International Group do not condone breaches of the MARPOL regulations. The Circular can be viewed on the Club’s website :
/media/63896/CC-2005-INTERNATIONAL-CONVENTION-FOR-THE-PREVENTION-OF-POLLUTION-FROM-SHIPS-7378.PDF

Other than in cases of purely accidental discharge, P&I cover for fines resulting from breaches of MARPOL Regulations is only available on a discretionary basis and the Member would be required to satisfy the Directors that they took reasonable steps to avoid or prevent the offence.

In the event of an allegation arising in the US, a criminal investigation may be based on a violation of US national pollution laws, falsified records, false statements made to the USCG, obstruction of justice (destruction of evidence) and conspiracy. Whilst these violations may lead to criminal or civil charges and fines under the relevant US Codes they do not provide the authorities with a right to obtain financial security for fines or penalties.

As a result, the US authorities have turned to enforcing APPS in order to gain security. Under APPS, the USCG has broad authority and discretion to impose both financial and non-financial conditions for the release of a detained vessel suspected to have violated MARPOL. Although APPS provides that the US authorities may refer the matter to the flag state concerned or deal with it themselves, if they choose the latter then the levels of fines, and therefore requested security, can be considerable.

So far as P&I cover is concerned, whilst proceedings are under way, North is unable to provide security (except in exchange for counter security in the form of cash or by bank guarantee) for any such alleged offences and if the Club is asked to assist with the funding of costs incurred in defending criminal or civil proceedings, additional security will be required.