Marine Log

August 17, 2006

Danaos to pay $500,000 fine

Danaos Shipping Co., Ltd., which is headquartered in Piraeus, Greece, pleaded guilty this week to illegally discharging oil into the Port of Long Beach from one of its ships and to obstructing a Coast Guard investigation into the oil leak.

Appearing in United States District Court, a representative of Danaos entered guilty pleas to two counts--a felony charge of obstruction of a Coast Guard investigation and a misdemeanor charge of negligently discharging oil.

The oil discharge came from the APL Guatemala. The 803-foot, Greek-flagged ship was anchored in the Port of Long Beach in July 2001 when it leaked oil from its sea chest. After the APL Guatemala's crew members observed an oily sheen near the vessel, the spill was reported to authorities, which prompted the Coast Guard to respond to the vessel and launch an investigation.

Soon after, the oil sheen visible on the water had dissipated and the Coast Guard left the area.

The next day, on the morning of July 3, 2001, APL Guatemala crew members observed fresh oil leaking from the starboard side of the vessel.

Instead of notifying the National Response Center, crew members poured detergent into the water in an attempt to disperse the oil and hide the spill.

That same morning, divers hired by Danaos inspected the ship and noticed oil actively flowing from the vessel.

One diver who observed oil actively flowing from the vent holes in the APL Guatemala's sea chest informed a Danaos official on board the ship.

The Danaos officials directed the diver to remove the oil from the sea chest and to falsely state on his report that he had only inspected valves, not investigate an oil spill.

Danaos pleaded guilty before United States District Judge Percy Anderson, who scheduled a sentencing hearing for October 23.

As part of a plea agreement, Danaos has agreed to be sentenced to a term of organizational probation of three years, to implement and fund an Environmental Management System/Compliance Plan, to commit no further violations of international agreements that prohibit oil discharges, and to pay full restitution to the victims of the offense, including the Coast Guard and U.S. Environmental Protection Agency.

Additionally, Danaos has agreed to to pay a criminal fine of $500,000, with $250,000 of that fine to be devoted to community service projects.

The community service money will go to the Santa Monica Mountains National Recreational Area ($50,000), the National Marine Fisheries Service ($100,000) and the Channel Islands National Marine Sanctuary ($100,000).

This case, which is the latest in a series of investigations into shipping vessels discharging oil into the ocean, is the result of an investigation by the United States Coast Guard and the United States Environmental Protection Agency, Criminal Investigation Divisio