Tune in and checkout Tradewinds' latest sustainability focused podcast episode on MARPOL detentions in the U.S.

In the latest episode of Green Seas, the sustainability-focused podcast by Tradewinds, Eric Priante Martin delves into the complex realm of international maritime pollution enforcement, highlighting the case of Denys Korotkiy. The Chief Engineer of the Liberian-flagged vessel "Donald" is currently detained in the U.S. for failing to document the disposal of oily bilge water correctly, an offense rooted in the International Convention for the Prevention of Pollution from Ships (MARPOL). This situation underscores the intricate challenges and debates surrounding jurisdiction and enforcement of pollution laws in international waters.

In the face of these legal complexities and the ongoing efforts of the U.S. government to prosecute violations of MARPOL, Shoreline presents a robust financial risk transfer tool through its MARPOL Detention Costs Insurance (MDCI). This innovative product is designed to mitigate the financial risks associated with detentions due to MARPOL violations, providing a safety net for shipowners and operators in a landscape marked by stringent environmental regulations and enforcement practices.

MDCI offers comprehensive coverage for various additional operational expenses, legal fees, and other costs related to the insured’s vessel and crew’s detention, offering peace of mind in an era where environmental compliance is not just mandatory but rigorously enforced. With the U.S. and other nations intensifying their crackdown on marine pollution, the need for such insurance solutions has never been more pressing.

Shoreline's MDCI stands out as a pioneering insurance product, tailored to address the unique challenges faced by the maritime industry in navigating the complexities of U.S. environmental regulations. It reflects a forward-thinking approach to risk management, ensuring that shipowners and operators are not only compliant with MARPOL regulations but also protected against the financial repercussions of potential legal challenges and enforcement actions.

Let’s take a look at the highlights from this podcast:

1. Denys Korotkiy's Detention at Lompoc: Chief Engineer Denys Korotkiy is detained at U.S. Penitentiary Lompoc for crimes related to the illegal disposal of oily bilge water from the Liberian-flagged ship, the Donald, highlighting a complex legal battle over pollution enforcement in international waters.

2. U.S. Prosecution of International Maritime Pollution: Korotkiy's case underscores a broader debate on the U.S.'s jurisdiction to prosecute foreign seafarers for pollution that occurs outside its waters, a practice challenged by some legal experts as a violation of the MARPOL convention.

3. The MARPOL Convention and U.S. Law: The MARPOL convention, aimed at preventing ship pollution, is at the heart of the legal argument, with U.S. laws requiring accurate maintenance of oil record books to track waste disposal, a standard that Korotkiy allegedly violated.

4. Evolution of U.S. Environmental Prosecutions: Starting with the Exxon Valdez spill in 1989, the U.S. has developed techniques for prosecuting marine pollution, initially focusing on territorial waters but later targeting documentation discrepancies in oil record books on vessels visiting U.S. ports.

5. The Role of Oil Record Books in Prosecutions: The U.S. leverages inaccuracies in oil record books as a means to prosecute illegal discharges by foreign vessels, a method upheld by courts but criticized for its broad interpretation on jurisdiction.

6. Critiques of the U.S. Approach: Critics argue the U.S.'s aggressive prosecution strategy, including detaining seafarers as witnesses and imposing fines on shipping companies, could be better handled by flag states, aligning with the principles of the MARPOL convention.

7. SkyTruth's Role in Detecting Oil Pollution: Nonprofit SkyTruth uses satellite data to identify oil discharges from ships, highlighting the persistent issue of marine pollution and the effectiveness of U.S. enforcement in keeping its waters relatively clean.

8. Whistleblower Protections and Incentives: U.S. laws incentivize crew members to report illegal pollution by offering rewards, a controversial approach that some argue undermines more straightforward reporting systems within the shipping industry.

9. Legal Battles and the Chevron Doctrine: The case's outcome could be influenced by the Supreme Court's stance on the Chevron doctrine, which grants federal agencies broad interpretative powers, with implications for environmental regulation and enforcement.

10. Challenges to Current Prosecution Practices: Despite the longstanding use of oil record book violations for prosecuting marine pollution, some argue for a more nuanced approach that differentiates between administrative, civil, and criminal enforcement, reflecting the shipping industry's advancements in environmental compliance.

The MARPOL Detention Costs Insurance (MDCI) product offered by Shoreline is designed to bridge the insurance gap left by the reservation of a shipowners’ P&I cover when facing criminal charges in the U.S.  Providing financial protection against the additional operational and legal costs arising from alleged violations of MARPOL. In cases like that of Denys Korotkiy, where seafarers are accused of violating environmental regulations such as improper disposal of oily bilge water and inaccuracies in the ship's oil record book, MDCI can serve as a critical financial safeguard.

• Legal Defense Costs: MDCI covers the legal expenses associated with the initial shipboard inspection needed to collect all available exculpatory evidence to defend the shipowner and crew against allegations of criminal wrongdoing. If Korotkiy's ship had been insured under such a policy, these legal fees would have been covered as would the ongoing costs of legal representation incurred by the ship’s crew detained as witnesses in the U.S.
•  Detention Costs: The insurance covers all additional operational costs incurred by the insured shipowner following the detention of the vessel and crew in the U.S., which can be significant. This includes all costs related to the maintenance of crew held in the U.S. including wages, accommodation, per diem living expense and the costs of repatriation. In situations where the U.S. authorities detain a ship for investigation, these costs can quickly mount up.
• Surety Bonds: If a surety bond needs to be posted for the ship's release, MDCI insureds have access to U.S. surety bond providers at discounted rates of surety premium. MDCI’s claims managers will ensure surety is posted quickly allowing the vessel to resume operations with minimal delay.
• Crew Repatriation: If crew members, are detained as witnesses, once released by the courts they will require repatriation, MDCI will cover these costs as well. This ensures that the vessel's operations are not unduly hampered for longer than necessary by the detention of key personnel.
• Consultancy and Survey Costs: In the aftermath of an alleged violation, shipowners will need to engage consultants or conduct surveys to prove compliance and/or to contest allegations of wrongdoing. MDCI can cover the costs of such professional services, aiding in the swift resolution of the alleged compliance issues
• Protecting Seafarers' Rights: Beyond financial aspects, having insurance like MDCI underscores the importance of protecting seafarers' rights and welfare. It recognizes the challenging conditions under which seafarers operate and offers a layer of financial protection against the outcomes of alleged non-compliance with international and U.S. regulatory obligations.
• Mitigating Operational Risks: By providing comprehensive coverage for a range of expenses associated with MARPOL violations, MDCI helps mitigate operational risks. It enables shipowners and operators to focus on compliance and operational efficiency, knowing they have financial protection against unforeseen legal and regulatory challenges.

In essence, while insurance products like MDCI cannot directly prevent legal actions or alter the outcome of judicial proceedings, they play a crucial role in managing the financial risks and implications associated with MARPOL compliance issues. For seafarers and shipowners alike, this can provide significant peace of mind and financial protection.

As the case of Korotkiy and others like it continue to spotlight the intricate dance between U.S law and international conventions, Shoreline's MDCI emerges as a crucial risk transfer tool in the arsenal of maritime stakeholders committed to sustainable operations and environmental stewardship.

For more information on Shoreline's MARPOL Detention Costs Insurance and how it can safeguard your operations against the uncertainties of MARPOL enforcement proceedings in the U.S. please visit our MDCI product page.