In this month's blog, Chris Dyson, who is a senior partner and marine engineer and Brookes Bell, reports about pollution discharge. He says while some ship owners may believe a ‘tick box’ MARPOL Annex I risk management survey affords them a level of protection against prosecution, it would be short-sighted to underestimate the risks.
In today’s shipping industry, ship owners and operators cannot afford to pollute. No matter the size of the oil pollution discharge, and regardless of whether it is deliberate, inadvertent, or caused by poor risk management, all instances of oil pollution are liable for prosecution under MARPOL Annex I.
The majority of the shipping industry strives for compliance. However, reckless actions by a minority of ship owners and rogue crew, combined with industry-wide pressure to increase environmental standards, have triggered renewed efforts to secure increased levels of compliance. The industry as a whole is now closing in on polluters, with flag states, port, national and state authorities all developing new measures to identify and prosecute non-compliance.
Guilty until proven innocent
Once an allegation of a MARPOL Annex I breach is made, the onus is on the ship owner to prove their position. This is easier said than done, particularly because the quality of evidence required to convict a ship owner of a MARPOL Annex I breach is in stark contrast to the quality of evidence required to secure an acquittal. In practice this means that, while scant evidence is enough to bring a ship owner to court over a suspected MARPOL Annex I breach, the accused must present evidence to physically disprove the claims made against them in order to be exonerated. Put simply, the ship owner is often ‘guilty until proven innocent’.
For ship owners found to be non-compliant, the consequences are severe. They include: fines that can reach tens of millions of dollars, further loss of earnings due to vessel time spent off hire and considerable reputational damage. In addition, individuals implicated in a pollution incident face heavy personal fines and even imprisonment.
Furthermore, and perhaps most significant is that in the event of prosecution for intentional pollution discharge under MARPOL Annex I, P&I clubs have the option to walk away from the incident, leaving the ship owner and crew exposed to the considerable financial impact of prosecution. In such incidences, prosecution under MARPOL Annex I is potentially one of the most costly uninsured liabilities in today’s maritime industry.
Challenges for compliance
Despite widespread awareness of, and prosecution resulting from, MARPOL Annex I breaches, non-compliance continues. What’s more, preventing it remains a significant challenge for ship owners. This challenge is multifaceted. But from a ship owner’s perspective, there are three key scenarios that are especially difficult to overcome.
Firstly, cases of deliberate non-compliance by rogue crewmembers remain an all too common occurrence within the shipping industry, with surreptitious actions often carried out under the pretence that reducing quantities of waste liquids on board is easier using illicit means. One of the most prolific methods of non-compliance is the so-called ‘magic pipe’, which may involve a furtive change to a ship's oily water separator system, or other ship’s piping, allowing untreated waste liquids to be discharged directly overboard. In some cases, ship owners are complicit, while in others they are totally incredulous to the actions of their crew when non-compliance is discovered.
Secondly, even a non-polluting vessel may be investigated when operating in the vicinity of a polluting ship or by simply passing through a slick at sea.
Thirdly, it is entirely possible for ship owners to suffer some of the consequences of MARPOL Annex I breaches prior to a conviction. This is because, in the event of a suspected pollution discharge, the ship and its mariners can be detained and held for long periods while the incident is investigated.
Marrying correct policy with sound reporting
All this means that, even if a ship owner is following correct policy, there is a need to ensure sound reporting so that if questioned it is possible for ship owners to satisfy authorities beyond any doubt that a MARPOL Annex I breach has not taken place.
To achieve this, ship owners are increasingly turning to external consultancies for pre-emptive risk management counsel that assists in protecting them from MARPOL Annex I breach allegations. This risk management counsel, while widely available within the shipping industry, varies significantly in terms of quality and levels of service.
As a rule of thumb, when selecting risk management counsel, ship owners need to bear in mind that any risk management strategy is meaningless unless the evidence collected during assessments is sufficiently robust to categorically disprove MARPOL Annex I breach allegations.
In practice, this means that a risk management strategy should not only help ship owners maintain effective pre-emptive MARPOL Annex I anti-breach measures, it must also document and record the measures taken in sufficient detail to satisfy authorities in the event of a suspected pollution incident. For example, as well as physically restricting the ability to manipulate overboard valves, pipelines, the oily water separator and oil content monitor, sound risk management should also involve the verification of these preventative measures.
For accusations of intentional discharge, the need for robust policy and procedures with adequate measures for recordability and traceability is even more essential. For example, in cases where a rogue crew member has caused a breach, the incredulous ship owner must satisfy its P&I club that it has taken all reasonable measures to avoid intentional discharges, to increase the likelihood of maintaining insurance cover for the incident.
Taking a long term view
The possibility of pollution by oil, and allegations of MARPOL Annex I breaches, cannot be eliminated. However, the good news is that, with the right risk management strategy, this can be managed and reduced. To operate fleets with minimal oil pollution risk, ship owners should choose professional, honest and independent technical risk management counsel that delivers both the tools to maintain compliance and the documentation to prove that sound procedures are in place. While it may be hard to quantify the value of such in-depth risk management counsel in day-to-day operations, owners and operators must take a long term view, focusing not only on the cost of the counsel but also on the overall aim of MARPOL Annex I risk management, which is to protect businesses against a hugely costly and potentially uninsured risk.