Holy House Shipping AB, a Swedish corporation, was sentenced in U.S. District Court in Camden, N.J., to pay a $1 million fine, a special assessment of $400,000 in community service payments and serve three years of probation for failing to maintain an accurate oil record book in an attempt to conceal illegal discharges of oil-contaminated waste directly into the ocean from one of its ships, the Justice Department announced.

Under the terms of the plea agreement approved by U.S. District Judge Jerome B. Simandle, the $400,000 special assessment will go to the congressionally-established National Fish and Wildlife Foundation to be used for projects to restore and protect fragile marine habitats in New Jersey.

According to documents filed in the case, on Feb. 27, 2008, U.S. Coast Guard inspectors from Coast Guard Sector Delaware Bay boarded the M/V Snow Flower, a 568-foot, Cook Island flagged ocean-going ship, at the marine terminal in Gloucester, N.J., to conduct a routine inspection. Coast Guard inspectors reviewed the ship’s oil record book, a required log in which ship engineers must record all transfers and discharges of oil. Inspectors identified a number of discrepancies related to the capacity and use of the ship’s oil water separator. In addition, the inspectors identified a pipe that was believed to be used to discharge oil contaminated waste directly to the sea, bypassing the oil water separator.

Prior to the vessel entering the Gloucester Marine Terminal, crewmembers who worked in the Snow Flower’s Engine Room Department contacted members of the Coast Guard Sector Bay and reported that the ship’s chief engineer had ordered the discharge of oily water and oil sludge overboard on the vessel’s most recent voyage from Los Angeles to Chile and again on the return voyage to the United States. The crewmembers stated that the discharges were ordered in the Pacific and/or Atlantic Oceans and were accomplished by using a metal pipe connected to the vessel’s starboard bilge holding tanks. During today’s hearing, Judge Simandle ordered $375,000 be awarded to the two whistle blowers for their efforts.

The chief engineer, Igor Krajacic, pleaded guilty to failing to maintain an accurate record book on Nov. 3, 2008, and was sentenced on Jan. 16, 2009, to an $8,000 fine.

"Deliberate pollution from ocean-going ships is a continuing problem. Today’s fine sends the message that we will continue to prosecute those who ignore laws meant to protect the environment,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

As part of its probation, Holy House Shipping must implement an Environmental Management System/Compliance Plan (EMS) to ensure there is no future dumping from the ships it operates and manages that conduct business in U.S. ports. The company must hire a third-party auditor to ensure it is following all procedures identified in the EMS. The auditor will have access to all of the company’s ships and records. Additionally, each of the auditor’s reports will be sent to the Coast Guard, the probation office, the U.S. Attorney’s Office and the Justice Department’s Environmental Crimes Section, at the same time the report is sent to the company.