Mobile, Alabama – Norwegian shipping company DSD Shipping was sentenced to a $2.5 million penalty this week for years of illegally dumping oil-contaminated waste into the ocean and a subsequent cover-up, a case highlighting the ongoing struggle to enforce maritime environmental regulations. The sentencing, handed down in federal court, follows a November 2015 jury conviction on charges of obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses, and conspiracy.
Prosecutors presented evidence demonstrating that between 2010 and 2014, the M/T Stavanger Blossom, operated by DSD, sailed without a functioning oily-water separator – a crucial piece of equipment designed to prevent the discharge of oil-contaminated wastewater. An internal memo from a vessel engineer in January 2010 explicitly warned the company of the faulty equipment and the potential for illegal pollution, a warning that was blatantly disregarded for over five years. During the final two-and-a-half months of operation before being inspected by the U.S. Coast Guard in November 2014, the vessel illegally discharged approximately 20,000 gallons of oil-contaminated wastewater and 270 gallons of sludge in plastic bags.
Deliberate Deception
The scheme extended beyond the illegal discharges themselves. DSD actively falsified official record books – including oil and garbage logs routinely inspected by the Coast Guard – to conceal the pollution. Testimony revealed that senior ship officers not only maintained these fictitious records but also instructed subordinates to lie during Coast Guard inspections. This deliberate attempt to mislead authorities further compounded the severity of the offenses, leading to the obstruction of justice charges.
Individual Accountability
While the corporate penalty is substantial, the court also imposed prison sentences on three DSD engineering officers. Chief Engineer Bo Gao and Second Engineer Xiaobing Chen each received six months imprisonment, while Fourth Engineer Xin Zhong was sentenced to two months. All three face the revocation of their marine engineering licenses and are barred from future employment in the merchant marine. Daniel Paul Dancu previously pleaded guilty in September 2015 and received a five-day sentence. Prosecutors noted DSD’s continued denial of wrongdoing in Norwegian media despite the overwhelming evidence presented at trial, and highlighted previous pollution control deficiencies found on other DSD vessels.
Funds Directed to Environmental Restoration
As part of the sentencing, $500,000 of the $2.5 million penalty will be directed to the Dauphin Island Sea Lab Foundation to support marine research and coastal habitat enhancement in the Gulf of Mexico and Mobile Bay, aiming to mitigate some of the environmental damage caused by DSD’s actions. The company was also placed on a three-year probation period and is required to implement a comprehensive environmental compliance plan to ensure future adherence to both domestic and international environmental regulations.
A Warning to the Industry
The case underscores the EPA and Department of Justice’s commitment to aggressively prosecuting environmental crimes at sea. “We will continue to aggressively prosecute and hold accountable those shipping companies who flout the laws that protect our oceans and coastal waterways,” stated Assistant Attorney General John C. Cruden. The investigation involved a collaborative effort between the U.S. Coast Guard, the EPA’s Criminal Investigations Division, and the Coast Guard Investigative Service.
Key Facts
- Defendant: DSD Shipping
- Location: Mobile, Alabama
- Year: 2016
- Statutes Violated: 18 U.S.C. 371, 18 U.S.C. 1519(b), 33 U.S.C. 1908(a), 18 U.S.C. 1519, MARPOL Protocol – Prevention of Pollution from Ships (APPS)
- Penalty: $2.5 million corporate penalty, plus $500,000 directed to environmental restoration.
- Individual Sentences: Bo Gao & Xiaobing Chen – 6 months imprisonment; Xin Zhong – 2 months imprisonment.
- Illegal Discharge: Approximately 20,000 gallons of oil-contaminated wastewater and 270 gallons of sludge.
Source: EPA ECHO Enforcement Case Database
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