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Marine Log

May 2, 2007

Justice subpoenas OSG vessel docs

OSG's problems with waste oil handling aren't over yet.

On March 21, the company was sentenced to pay record fines for violations of the Clean Water Act as amended by the Oil Pollution Act of 1990, the Act to Prevent Pollution from Ships, conspiracy, false statements, and obstruction of justice.

Additionally, OSG was sentenced to serve a three-year term of probation during which it must implement and follow a stringent environmental compliance program that includes a court-appointed monitor and outside independent auditing of OSG ships trading worldwide.

Now, in its most recent 10Q filing with the SEC, covering the quarter ended March 31, 2007,OSG reports:

"On March 2, 2007, the Company, acting in compliance with the terms of its existing management programs, self-reported to the U.S. Department of Justice allegations concerning the Company's handling of waste oils and maintenance of books and records on one of the Company's International Flag vessels. The Company and the U.S. Department of Justice are both investigating these allegations and the Company is cooperating with the Justice Department investigation. The Justice Department has issued a subpoena for documents concerning the vessel and requested that certain crew members testify before a grand jury. In accordance with Statement of Financial Accounting Standards No. 5, 'Contingent Liabilities,' the Company assessed the likelihood of incurring any liability as a result of the investigation. The investigation is preliminary and no charges against the Company have been filed. Accordingly, no loss accrual has been recorded."

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