Sanford Ltd. May Face $3 Million Fine In Am. Samoa Case

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Company vessel dumped oil waste, engineer falsified documents

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Jan. 7, 2013) – The U.S. Justice Department has recommended that among other things, New Zealand based Sanford Ltd. be given a criminal penalty of $3 million with a portion of that money designated as community service to benefit the marine sanctuary in American Samoa, according to federal court documents.

A jury at the federal court in Washington D.C. last August convicted Sanford of dumping oil waste into U.S. waters outside American Samoa and falsifying records. The charges stem from the company’s fishing vessel San Nikunau’s visits to Pago Pago over the years. The company was convicted on six of the seven counts.

The jury also convicted James Pogue, a chief engineer on the San Nikunau, of falsification of records for stating that required pollution control prevention equipment had been used when it had not. He was also convicted of failure to maintain an accurate oil record book as required by U.S. anti-pollution law. He was acquitted on a conspiracy charge.

The defendants were originally scheduled for sentencing last November but that was continued to Jan. 11 this year.

Last week, the Justice Department filed its 18-page sentencing recommendation with the federal court:

The government argued that for at least ten years, Sanford Ltd. knowingly and routinely illegally discharged oil waste from San Nikunau and falsified the vessel’s Oil Record Book. During this time, Sanford Ltd. was able to sell its tuna from the San Nikunau in Pago Pago, American Samoa, and earn nearly $23 million.

"A significant sentence in this case will make clear that the United States takes its obligations under MARPOL seriously — and so should mariners and companies that own and operate ships," prosecutors argued. (MARPOL is the International Convention for the Prevention of Pollution from Ships and the U.S. is a signatory on the document.)

Additionally, a criminal penalty of $3 million will help to deter not only Sanford Ltd. from engaging in future criminal activity, but also other fishing companies calling on American Samoa.

The government contends that Sanford "clearly has the ability to pay" the $3 million considering its annual profits is about NZ$22 million per year (which equates to US$18 million). The government cited news reports from New Zealand on the annual profits.

Considering that the criminal activity on the San Nikunau was ongoing and continuous for nearly a decade, "it is reasonable that the fine disgorge some amount of profit from Sanford Ltd.," the government argued.

According to the government, Sanford has already set aside $3 million to pay the monetary penalty and is prepared to move on, according to its December 18, 2012 Annual Report.

"This fine is proportionate to the severity of the crimes of conviction," said prosecutors.

The Justice Department says that probation has been handed out before in similar cases and believes that Sanford should be given a probation period of five years, during which time Sanford be banned from operating any of its vessels in United States waters.

"A ban is appropriate because it punishes Sanford Ltd. because it cannot profit from commercial activity in the United States while at the same time deterring other shipping companies that desire to engage in commerce in the United States from violating MARPOL," the government argued.

After the first year of probation, Sanford Ltd. could be permitted to enter the waters of the United States if it implements an Environmental Compliance Plan (ECP) that is satisfactory to the Court, the government said.

The ECP requires the appointment of third party monitors and auditors to oversee and ensure Sanford Ltd. is in compliance with the terms of the ECP, MARPOL, and United States law.

The ECP also requires the creation of a detailed environmental management system along with the creation of a comprehensive training program for the employees of Sanford Ltd.

As a discretionary condition of probation, the government recommends that $500,000 of the monetary penalty be paid as community service to the National Sanctuaries Foundation for the preservation and benefit of the National Marine Sanctuary of American Samoa.

Federal prosecutors also said the government agrees with the Probation Office’s calculation of the overall offense level for Pogue.

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