Ship's legal plight part of battle over dumping waste

The plight of a coal ship stuck in limbo at Portsmouth Marine Terminal may seem a strange anomaly to many local port watchers.
The Maltese-flagged vessel, the Antonis G. Pappadakis, and its roughly 20-member crew have been detained by the Coast Guard since mid-April over alleged environmental violations.
Late last month, Virginia Port Authority officials said any detention of a ship in the port is unusual.
"That's way out of the ordinary," said Joe Harris, a Port Authority spokesman.
Public records, however, and some legal experts suggest that the case unfolding in Hampton Roads is just another in a series of actions that the Coast Guard and the Department of Justice have been pursuing nationwide for years.
"It's a typical case, in a way," said Dave Dickman, a former Coast Guard attorney who now specializes in maritime law at a Washington firm.
He estimates that over the past two decades he has worked on as many as 25 cases involving vessels like the Pappadakis.
During that same period, the Coast Guard has been involved in several hundred of them, Dickman said.
Like most such cases, the eight-count indictment issued last week in Norfolk federal court pivots around something called a "magic pipe." The term is shorthand for a way of handling the discharge of oily bilge water - the runoff from machinery and other sources that accumulates in the bottom of ships. Such methods enable a ship to bypass environmental controls mandated by international and U.S. law.
The indictment names as defendants the ship's operator, Kassian Maritime Navigation Agency Ltd., a Liberian corporation with offices in Athens, Greece; Angelex Ltd., the Malta-based owner of the ship; and Lambros Katsipis, the ship's chief engineer.
The charges include conspiracy, falsification of records and obstruction of justice.
Clifford P. Case, a New York attorney who has written about magic-pipe cases, said the term probably originated from the way the systems made contaminated wastewater seem to disappear.
"It was magic because it made the problem 'go away' by dumping the water overboard as opposed to running it through the treatment system," he said.
Court records show that this is essentially what Coast Guard inspectors found on April 15, not long after they boarded the Pappadakis at Norfolk Southern Corp.'s Lamberts Point terminal, where it was being loaded with coal bound for Brazil.
The Coast Guard's visit to the ship was routine, a "Port State Control" examination that governments in ports all over the world conduct on ships to ensure compliance with environmental laws.
The ship had been inspected by the Coast Guard on July 26, 2012, and passed.
This time, however, inspectors got a surprise.
An engineer on the Pappadakis passed a note to one of the investigators that stated the crew had dumped oily bilge water overboard through the ship's sanitation system, court records say.
The same person, records show, gave a camera to another investigator with photos of an "arranged portable pump and hoses."
They were used to transfer the oily waste from the bilge holding tank to the ship's sanitation system, through which it was dumped, records state.
The crew member then showed one of the investigators where the pump and hoses were housed, inside the ship's steering-gear compartment room.
While the crew member may have been motivated by a concern for the environment, a whistle-blower provision in the federal "Act to Prevent Pollution from Ships" law could reap him a windfall, up to half of any civil or criminal fine that might result in the case.
Jackie Savitz, an executive at Oceana, a Washington-based nonprofit, acknowledges that the financial incentive must be considered when looking at such cases, but she points to the considerable risks taken by individuals as well.
"A whistle-blower is essentially taking his job, if not his life, into his hands," she said. "It's our law that says he can do this - we put it out there."
If the government were to look the other way when presented with the evidence a whistle-blower brings forward, the person "is out of luck in a big way," Savitz said.
A review of magic-pipe cases cited on the Justice Department's website shows that million-dollar fines are not unusual.
In March, two shipping firms based in Germany and Cyprus pleaded guilty to charges similar to those included in the Norfolk federal grand jury's indictment last week. They agreed to pay a $10.4 million penalty, according to the Justice Department's website.
International and U.S. laws require that oily water from a ship either be stored until it's moved to a waste facility onshore or discharged overboard after being processed through a system that filters out all but a trace of oil, according to court records.
The pollution-control equipment also includes an "oil content monitor," used to detect and prevent the discharge of bilge water with concentrations of oil in excess of 15 parts per million.
In magic-pipe cases, the cover-up can be worse than the "crime."
What gets ships and their crews in trouble is not so much the dumping of pollutants into the ocean, but their failure to follow exacting laws about the recording of a ship's discharges in an "oil-record book."
"Specifically, discharges of bilge water, sludge and oily mixtures must be fully recorded, without delay, in the Oil Record Book by the person in charge of the operations," court records state.
The criminal indictment last week broadens and shifts a court battle between the owner of the ship and the federal government that largely revolved around how much money the Coast Guard would accept from the ship owner as a bond before the vessel and its crew could sail from the port.
The government is appealing an order issued earlier this month by Senior U.S. District Judge Robert G. Doumar that would have freed the ship for a $1.5 million bond - half what the Coast Guard originally demanded.
The appeal in that case along with the pending criminal case raise questions about what happens next to the crew, the ship and its Brazil-bound cargo, a coal shipment that could be worth more than $12 million, according to one local estimate - or nearly double what the ship's owner says the vessel is worth.
Last year, Dickman published an article in a maritime-law publication about how courts have begun to push back on government's long-term detention of crew members.
"There have been situations in which a crew has been held for over a year," Dickman said, though he added it's usually a matter of months.
In a few cases, owners have ended up abandoning ships in port.
When that happens, Dickman said, everything and everyone ends up in court - the crew, cargo interests, creditors.
"It becomes a real mess."
Source: Virginian-Pilot