Rajesh Joshi | LLOYD’S LIST
AWILCO, the private Oslo owner that beneficially owns the suezmax tanker Wilmina, is planning to challenge a US Coast Guard decision to ban the ship from US ports for up to three years as punishment for magic pipe violations.
For its part, the USCG’s ban on the 1997-built, 149,775 dwt Wilmina is a groundbreaking development in US magic pipe prosecutions.
It is understood to be the first such “administrative remedy” used against alleged violators of US pollution laws, instead of criminal prosecutions that usually cost owners millions of dollars and force crews to remain in the US for several months, with some of them potentially going to jail.
The criminal case against Wilmina is understood to have been dropped. The ship is already gone from US waters. The 12 crew members whom the USCG was seeking to detain indefinitely for the investigation, too, are gone.
Wilmina counsel Michael Chalos said the ban was triggered by shipowner Wilmina Shipping’s challenge against the USCG in federal court in Texas. The court ruled last week it did not have jurisdiction to decide the merits of the challenge, and so dismissed the complaint.
Mr Chalos said the ban was “particular to this case”, and does not imply a loosening of US policies towards alleged offenders. On the contrary, he said the legal machinery is becoming more draconian, with prosecutors requiring magic pipe crews to stay in the US indefinitely instead of the previous practice of three to six months.
This requirement was the underlying reason for the legal challenge by Wilmina Shipping, the one-ship owning entity controlled by Awilco.
A whistleblower told the USCG as the tanker arrived in Corpus Christi on May 4 that it was discharging bilge into the seas. A standard US investigation was started, based on alleged inconsistencies in the Oil Record Book.
As is now standard in such investigations, Wilmina Shipping was asked to post a $1.5m bond to secure release of the ship, and financially support 12 crew members who would stay back. The security agreement presented to the owner said these seafarers must stay behind indefinitely.
To release of the vessel and put a date on the crew’s release, the owner offered a counter-proposal of a $500,000 bond and 90 days detention. The USCG rejected this offer.
Wilmina Shipping then sued the USCG, something no owner in such a situation has done before. It alleged that the US statute that governs security agreements empowers the USCG to demand only a bond and cash security, not indefinite detention of crews.
The judge dismissed Wilmina Shipping’s complaint, on grounds that the owner had not exhausted “administrative remedies” available against the security agreement.
These remedies start with an appeal to the USCG district commander, working its way up to the commandant.
Mr Chalos said this is what the owner would now do, by first appealing the ban at agency level. However, he added: “We do not expect any relief, because we see this as a retaliatory action, and because the USCG is keen to try its new policy of administrative detentions as another potential penalty in addition to prosecutions.”
The USCG said: “[Actions by the tanker were] extremely serious deliberate offenses that require equally serious action. [The ban] is a result of our efforts to utilise the full range of available tools to ensure compliance with laws meant to protect the environment. Criminal prosecution is one such tool but administrative alternatives, such as banning certain ships, can be extremely effective.”
If Wilmina develops and implements an environmental compliance programme to the USCG’s satisfaction, the banned ship “may attempt to enter a US port after one year, but the conditions will stay in place for the full three years”, the USCG added.
Mr Chalos, meanwhile, insisted that indefinite detentions of crew and not the USCG’s attempt at administrative punishment was the main issue. He said Wilmina Shipping would be back in court to challenge the three-year ban if administrative appeals through the USCG hierarchy fail.
Awilco’s three-suezmax fleet is managed by affiliate Wilhelmsen Marine Services.