United States v Jho And Overseas Shipholding Group Inc.
An important decision from one of the United States’ leading appellate courts, the Fifth Circuit Court of Appeals (which covers Texas and Louisiana) recently upheld the right of the U.S. to prosecute a foreign-flagged ship owner (and its engineer) for falsification of an Oil Record Book (“ORB”), even when such falsification took place outside of U.S. ports or navigable waters, as a breach of the U.S. legal duty to maintain an ORB. It further held that international law did not prohibit such prosecution. The Second Circuit Court of Appeals is poised to issue its own decision on the same issue.
The Facts
The U.S. government obtained a tip from another engineer on the MIT “Pacific Ruby” about unlawful discharges and tampering with the vessel’s equipment. Following an initial Coast Guard inspection a subsequent inspection corroborated the tipster’s allegations.
Ten charges were brought against the vessel owner, OSG, and the vessel’s engineer. The trial court dismissed the eight counts of entering a U.S. port with a knowingly inaccurate oil record book, corresponding to eight separate visits and based on what it considered to be a limitation in U.S. law implementing MARPOL “in accordance with international law.” The trial court considered that the ORB violations had occurred aboard a “foreign flag ship” “outside U.S. waters” and that international law would be violated by prosecution of offenses in such circumstances, contrary to the U.S. implementing legislation of the Act To Prevent Pollution From Ships (“APPS”) stating that limitation.
The trial court also dismissed the charge of “conspiracy” as it related to the ORB offenses but declined to dismiss that charge to the extent it did not relate to the ORB or the separate charge of making false statements to the Coast Guard.
The Fifth Circuit’s Reversal
The Court of Appeals held at the outset that the trial court erred in construing the criminal conduct in respect of the ORB offenses as having occurred outside U.S. waters. It considered that such offenses “occurred entirely within the ports of the United States” on the eight occasions that the vessel entered them, irrespective of whether the alleged false ORB entries were made in international waters.
The court reasoned that to limit the U.S. Congress’ implementation of MARPOL solely to ORB’s entries while in U.S. waters or ports could permit the policy to prevent pollution at sea to be undermined. A foreign flag ship could “simply by falsifying all of its [ORB] information just before entry into a [U.S.] port or navigable waters” escape prosecution. The ORB “maintenance” duty requires that ORB entries even outside the U.S. ports/navigable waters be accurate or not knowingly inaccurate. The ORB charge was reinstated with the direction to the trial court to consider if each port call constituted a “distinct criminal act”.
Having held that APPS applies to ORB entries outside U.S. waters based on the maintenance obligation within them the court next considered the defendants’ argument that the U.S. had consented to surrender its jurisdiction where such prosecution is limited by international law. The trial court had relied on (1) the law of the flag doctrine and (2) the U.N. Convention on the Law of the Sea (“UNCLOS”). The Appeals Court found neither provided a limitation. The law of the flag doctrine should be limited to “ships on the high seas” and not govern when the vessel was in internal waters so that international law was not violated. Likewise, UNCLOS, to the extent it reflects (if at all) “customary international law” because the U.S. is not a signatory, did not require dismissal as the trial court erroneously found. To the contrary, the Fifth circuit considered that UNCLOS “broadens” port states’ powers to enforce marine pollution laws for violations “beyond those that occur in its ports”; “territorial sea or exclusive economic zone”.
Conclusion
The Fifth Circuit doubtless recognized that its ruling could be considered to extend U.S. criminal jurisdiction over violations of marine pollution laws outside its own territorial waters. Its conclusion that the ORB violations “occurred entirely within” U.S. ports, despite earlier acknowledging that to hold otherwise would permit “falsifications” to be made outside U.S. ports or navigable waters, appears to be an attempt to impose some limit on the U.S. acting as the “world’s policeman” in environmental matters: the alleged offense must still be within the United States’ jurisdiction. The bottom line is that the production or “maintenance” of the ORB with a false entry, irrespective of where or when it was made, is now a basis for prosecution, at least in the Fifth Circuit’s jurisdiction.
With thanks to Jeremy Harwood of Blank Rome LLP, New York, for preparing this article.
