DSD to pay $2.5 million, four of its engineers get prison terms

APRIL 11,2016 — Norwegian shipping company DSD Shipping (DSD) is to pay a total corporate penalty of $2.5 million as a result of convictions in Mobile, AL, for obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses and conspiring to commit these offenses.  

The company was ordered to pay $500,000 of the penalty to the Dauphin Island Sea Lab Foundation to fund marine research and enhance coastal habitats in the Gulf of Mexico and Mobile Bay.

In addition, DSD was placed on a three year term of probation and was ordered to implement an environmental compliance plan to ensure the company's vessels obey domestic and international environmental regulations in the future.

Three senior engineering officers employed by DSD to operate the M/T Stavanger Blossom were also sentenced.  Defendant Bo Gao, chief engineer of the vessel, and Xiaobing Chen, second engineer of the vessel, were both sentenced to six months imprisonment as a result of their conduct. Defendant Xin Zhong, fourth engineer of the vessel, was sentenced to two months imprisonment.  All three also face the loss of their marine engineering licenses and exclusion from employment in the merchant marine.  

A fourth DSD employee, Daniel Paul Dancu, pleaded guilty in October 2015, and will be sentenced on April 11, 2016.  

The U.S. Department of Justice says that evidence demonstrated at trial that DSD operated the M/T Stavanger Blossom, a 56,000 gross ton crude oil tanker, from 2010 to 2014 without an operable oily-water separator as required by law.  

On Jan. 29, 2010, an internal corporate memorandum written by a vessel engineer warned DSD that the pollution prevention equipment did not work.  The memo further warned that if the problem was not addressed, "some day, it might end up that someone is getting caught for polluting."  

However, rather than repair or replace the oily-water separator, says the Department of Justice,  DSD operated the vessel illegally for the next 57 months before the conduct was identified by U.S. Coast Guard inspectors in November 2014.  

As the testimony at trial revealed, DSD illegally discharged approximately 20,000 gallons of oil-contaminated waste water and plastic bags containing 270 gallons of sludge into the ocean during the last two-and-a-half months of the vessel's operation.The evidence also established that DSD lied about these activities by maintaining fictitious record books aboard the vessel. These records omitted the illegal discharges of oil and garbage and falsely claimed that pollution prevention equipment was used when it was not. Further, when the U.S. Coast Guard examined the ship, DSD's senior ship officers lied about the discharges and ordered their subordinates to do the same.

In court documents filed prior to sentencing, prosecutors informed the court that despite convictions for eight felony offenses, DSD continued to deny wrongdoing in Norwegian press accounts. Prosecutors also noted that previous deficiencies in the operation of pollution prevention equipment had been identified in other DSD vessels while they were in international ports.

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