Reducing Exposure to Prosecution Under New MARPOL Requirements

In an article for the shipping industry magazine Bunkerspot, firm principal J. Stephen Simms outlines the steps bunker suppliers should take to reduce their exposure to prosecution under new MARPOL Annex VI requirements for supplying compliant fuel. As of January 1 2015, vessel charterers, owners and operators operating in emission control areas are required to use marine fuel with only 0.10% sulphur content.  Notably, marine fuel suppliers can no longer simply impose entirely on their customers the duty to ensure that the fuel is MARPOL compliant.  Rather, suppliers must affirmatively engage to assure that the fuel they sell is MARPOL compliant, or risk facing criminal prosecution or civil liability.  Bunker suppliers must also assure that they have insurance against the possibility that they may inadvertently supply fuel which is MARPOL noncompliant and be subject to prosecution.

Now, government prosecution for MARPOL violations is expected to extend beyond shipowners or charterers, and suppliers who provided the offending fuel should expect to be prosecuted.  The Act for Prevention of Pollution by Ships (APPS), the U.S. law for implementing MARPOL, provides that any vessel and its marine fuel tanks may be inspected at any port or terminal within the U.S. jurisdiction or anywhere if the Environmental Protection Agency or the U.S. Coast Guard has a reasonable belief that a violation occurred.  Civil penalties can be up to $25,000 for each violation and up to $5,000 for each false statement or representation. Violations can result in civil penalties up to $25,000 for each violation and up to $5,000 for each false statement or representation.  Additionally, vessels violating APPS may be liable in rem and subject to arrest for the amount of any criminal fine or administrative penalty in the U.S. District Court of any district in which the ship may be found.  In light of the fact that many ports lack readily available low sulphur fuel, the US Environmental Protection Agency provides for vessel owners and charters to file a ‘Fuel Oil Non-Ability Report’ (FONAR) voluntarily disclosing incidents where their vessels cannot obtain MARPOL compliant bunkers.  Nevertheless the FONAR does not excuse compliance with MARPOL requirements and could also result in liability of the vessel operator for making a false statement to the U.S. government if the fuel qualities are reported incorrectly.

In addition to familiarizing themselves with the new MARPOL requirements, bunker suppliers should exercise diligence and create a corporate culture which is proactive about MARPOL compliance.  For further information on specific steps bunker suppliers should take to ensure MARPOL compliance and guard against prosecution, a PDF version of the full article is available here.