United States v. Empire Bulkers Ltd., et al.
On September 4, 2024, the Court revoked the previous term of probation for Empire Bulkers Ltd., finding the company guilty of two probation violations. The court imposed enhanced supervision to include one additional year of probation (extending the four years of supervision to the maximum of five years), requiring additional ship audits during the fourth year, and annual office audits by the court appointed monitor/third-party auditor (CAM/TPA) that were not previously required.
In the first violation, the Court found that Empire had failed to promptly notify the Court Appointed Monitor of allegations of new MARPOL violations on another one of the company’ s ships. The Second Engineer of the M/V Panagiotis alleged that the Chief Engineer was involved in deliberate overboard discharges that violated MARPOL. The company’ s compliance manager and its attorney interviewed crew members and took statements but waited 14 days before Empire notified the CAM and DOJ. When it did so, it submitted information that sought to discredit the whistleblower. And, prior to notifying the CAM and DOJ, all those serving in the engine department, including the Chief Engineer and the whistleblower, were dismissed.
The CAM informed the Court that the defendant’ s delay and dismissal of the crew made it impossible to conduct an independent investigation. Under these circumstances, the Court held that the 14-day delay was not prompt as required by the Environmental Compliance Plan (ECP). The Marshall Islands registry, where the ship was flagged, subsequently determined that intentional overboard discharges of oil-contaminated bilge waste took place without the use of required pollution prevention equipment and that these improper discharges were not recorded in the ship’ s Oil Record Book, thus verifying the whistleblower’ s allegations.
In the second violation, Empire was convicted of changing its corporate organization and chain of command without notifying the Court’ s Monitor and without going through a required process of modifying the ECP. Specifically, the ECP required by the Court stipulated that the company must have a compliance manager that reported to the company’ s managing director. The position of managing director was eliminated without informing the Monitor, Office of Probation, or DOJ. The company’ s compliance manager now reports to a committee on which he sits with other mid-level managers rather than to the highest levels of Empire Bulkers which was intended to assure accountability.
In the underlying case, Empire Bulkers, the operator of the M/V Joanna, and Joanna Maritime Ltd., the owner, each pleaded guilty to violating the APPS and the Ports and Water Ways Safety Act (PWSA) (33 U.S.C. § 1908; 46 U.S.C. § 70036). The APPS violation involved overboard discharges of oil contaminated waste while bypassing the ship’ s Oily Water Separator (by inserting a piece of metal into the Oil Content Meter so that it only detected clean water instead of the actual discharge effluent). Crew members also falsified the Oil Record Book, a required log. The PWSA violation involved the failure to immediately report a hazardous condition that affected the safety of the ship and threatened U.S. ports and waters. The hazard was an active fuel oil leak in the ship’ s purifier room and disabling the fuel oil heater pressure relief valves, an essential safety feature designed to prevent catastrophic fires and explosions. Empire Bulkers, and the ship’ s operator were originally sentenced in January 2023 and ordered to pay a $2 million fine and complete a four-year term of probation subject to the terms of a government approved ECP that required independent inspections by a TPA and supervision by a CAM.