Class and Statutory News


Jan. 20 2015

Taking into account economic benefit of noncompliance and gravity of the violation, which may be adjusted

The United States (U.S.) Environmental Protection Agency (EPA) has published the following attached memorandum, which concerns North American and U.S. Caribbean Sea Emissions Control Areas (ECAs) penalty policy for violations by ships of the sulfur in fuel standard and related provisions.

Indeed, this document sets forth the U.S. EPA policy (penalty policy) for assessing civil penalties for violations of certain provisions of the Act to Prevent Pollution from Ships (APPS), 33 U.S.C. §1901 et. seq., which implements MARPOL Annex VI.

This policy is intended to be used by the U.S. EPA in calculating the penalty that the EPA will seek in settlement of enforcement actions for violations of certain provisions of the APPS.

Pursuant to section 1908(b) of APPS, the EPA may assess a civil penalty of $25,000 per violation, per day. Civil penalties must be calculated “taking into account the nature, circumstances, extent, and gravity of the prohibited acts committed and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and other matters as justice may require” (33 U.S.C. §1908(b)).

This policy is immediately effective with respect to all enforcement actions initiated after the date of the policy (i.e. 15/01/2015).

First, it describes how to achieve the goal of deterrence through a penalty that removes the economic benefit of noncompliance ((cost of ECA fuel - cost of non-ECA fuel) x amount of fuel), and reflects the gravity of the violation. Second, it discusses adjustment factors applied to obtain a fair and equitable penalty.

The gravity component includes the fuel sulfur violations and the record keeping violations.

Record keeping violations include:

:- Failure to maintain a current International Air Pollution Prevention Certificate (Annex VI, Regulations 6-9).

:- Failure to maintain a written procedure showing how the fuel change-over is to be done, allowing sufficient time for the fuel oil service system to be fully flushed of all fuel oils exceeding the applicable sulfur content (Annex VI, Regulation 14.6).

:- Failure to record in a log book the volume of the low sulfur fuel oils in each tank as well as the date, time, and position of the ship when any fuel oil change-over operation is completed prior to the entry into, or commenced after exit from, the U.S. portion of the ECAs (Annex VI, Regulation 14.6).

:- Failure to maintain bunker delivery notes for a period of three years after the fuel oil has been delivered onboard (Annex VI, Regulation 18.6).

:- Failure to maintain a representative sample of the fuel oil delivered to the ship for a period of twelve months from the time of delivery (Annex VI, Regulation 18.8.1).

The adjustment factors are:

:- Degree of willfulness or negligence;

:- Degree of cooperation;

:- History of noncompliance;

:- Litigation risk and other unique factors;

:- Ability to pay; and

:- Performance of a Supplemental Environmental Project (SEP).