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Gard News 202, May/July 2011

By Philip R. Lempriere and John D. Kimmerlein,
Keesal, Young & Logan, Seattle.

US Court of Appeals rules that crew's failure to report hazardous condition of vessel is a criminal act.



A recent decision by the United States Court of Appeals for the Sixth Circuit1  reinstated a jury verdict which found that a vessel crew's failure to immediately report a hazardous condition aboard their vessel to the United States Coast Guard (USCG) amounted to a knowing or wilful criminal violation of the Ports and Waterways Safety Act.   Owners and operators of vessels that operate in US waters should ensure that all of their crews and operations personnel are well aware of the requirement to immediately notify the USCG of any hazardous conditions or casualties.  General guidance is provided below, but members should refer to the applicable US regulations (Code of Federal Regulations, or C.F.R.) for the more precise definitions to determine if such notice or reports must be made in a given circumstance.

Regulations promulgated under the Ports and Waterways Safety Act require that any hazardous condition on board a vessel operating in US waters be immediately reported to the nearest USCG office:

"Whenever there is a hazardous condition either aboard a vessel or caused by a vessel or its operation, the owner, agent, master, operator, or person in charge shall immediately notify the nearest Coast Guard Sector Office or Group Office.  (Compliance with this section does not relieve responsibility for the written report required by 46 C.F.R. 4.05-10)".2 

The term "hazardous condition" is defined broadly, to include "any condition that may adversely affect the safety of any vessel":
"Hazardous condition means any condition that may adversely affect the safety of any vessel, bridge, structure, or shore area or the environmental quality of any port, harbor, or navigable waterway of the United States. It may, but need not, involve collision, allision, fire, explosion, grounding, leaking, damage, injury or illness of a person aboard, or manning-shortage".3 

The negligent failure to report a hazardous condition in violation of these regulations may be penalised with civil penalties.4 A wilful or knowing failure to make such reports may be prosecuted criminally as a Class D felony.  Criminal charges could be brought against the employee responsible for reporting such condition and his employer.5  In addition, a vessel used in the violation of such regulations may be subject to in rem liability.6

Canal Barge case
The Canal Barge  case7 involved criminal charges brought against the owners of a barge, its shoreside manager, and two employee tug boat captains for failure to immediately report a hazardous condition to the USCG.  The hazardous condition in question was a crack in the vessel's hull, from which some of the cargo of benzene leaked.  The captain on duty reported the crack and leak to the shoreside manager and ordered the crack be patched with soap.  The shoreside manager suggested more substantial (but not permanent) patching of the crack.  Another captain working on the tug became aware of the crack and the repairs.  No one reported the crack to the USCG until the patch failed while the barge was being handled by another tug boat company four days later.

The USCG brought three criminal charges against the barge owner, the shoreside manager, and both captains:  1. wilful failure to report the hazardous condition, 2. negligent failure to report the hazardous condition, and  3. conspiracy to violate the reporting requirement regulation.  The jury found all defendants guilty of wilful failure to report the hazardous condition, but acquitted the defendants of the negligence and the conspiracy charges.  The trial court subsequently acquitted the defendants on the ground that the failure to report took place in a different judicial district from the one in which charges were filed.

The Sixth Circuit overturned the acquittal, finding that the failure to immediately report a hazardous condition is a continuing violation, and therefore the charges could be brought in any district through which the barge passed before the USCG was notified.

Perhaps more importantly, the Sixth Circuit also ruled that the fact that the individual defendants were aware of the crack but failed to report it was sufficient evidence to support a finding that the crew had knowingly and wilfully failed to report the crack in the hull.   In support of this conclusion, the court noted the very hazardous nature of a benzene leak, the decades of maritime experience of each of the individual defendants, the fact that the company's vessel response plan required reporting a spill or threat of spill, the reporting training received by all of the company captains, and the failure of the tug crew to log the leak or the repairs.  The court held that these facts were sufficient to support the jury's finding that the failure to report was a knowing or wilful violation, rather than a simple mistake.

In addition, the court specifically ruled that such actions by the employees of the barge company supported a finding of criminal liability against the company. In addition to the factors discussed above, the court found that employees of the barge owner defendant

acted with the intent to benefit the company because reporting the leak immediately would have caused delays for offloading and repairs that would have cost the company time and money.  Such intent to benefit the company was sufficient to support the finding of guilt against it.

Reporting hazardous conditions and marine casualties
US regulations require that vessels notify the USCG immediately of hazardous conditions and certain marine casualties.  It is difficult to provide a concise summary of the types of conditions that must be reported because, as will be seen below, the regulations cover many different conditions.  In general, the "hazardous condition" notice requirements apply to a much broader range of conditions or casualties than the "marine casualty" notice and reporting requirements.

Hazardous condition notice requirements may be found at 33 C.F.R. 160.202, 204, and 215. Marine casualty notice and reporting requirements may be found at 46 C.F.R. 4.03-1, 4.05-1, 4.05-2, 4.05-5, 4.05-10, 4.01-3, and other C.F.R. sections cited therein.

Definition of reportable hazardous conditions 
The "hazardous condition" definition (as described above) is fairly concise, but broad in application.  A hazardous condition is defined to include "any condition that may adversely affect the safety" of a vessel, bridge, structure, shore area, or the environmental quality of any port, harbour or waterway.  It goes on to say that a hazardous condition may involve, but is not limited to, collision, allision, fire, explosion, grounding, leaking, damage, injury or illness of a person aboard, or manning-shortage.8

The scope of what constitutes a "hazardous condition" may be subject to widely different interpretations, even within the USCG.  This definition has not been meaningfully construed by any US court, and there are only a few examples of a court reaching a conclusion about what may or may not be a hazardous condition.  US courts have found that a crack in the hull of a tanker and barge is considered a hazardous condition, but dragging anchor in a remote anchorage or continuing a tow with a repaired tow wire have been considered not hazardous conditions.

The potential breadth of the USCG interpretation of the hazardous condition definition is illustrated by the circumstances of two recent USCG investigations.  One investigation involved a pin hole leak in the hull of a harbour craft that was known by the operator and monitored (and the very small amount of water ingress removed regularly) until it was repaired in an anticipated dry dock period.  The other was an extremely brief loss of steering control in the few seconds it took to switch steering gear motors when a fuse failed on the motor in use.  Neither of these conditions was immediately reported to the USCG.  The failure to immediately report both of these (and other similar instances) was raised by the USCG as possible violations when it investigated the vessel operator for a completely separate, more  serious incident (that was properly reported).  Both of these examples show that the USCG on occasion has taken an expansive view of what constitutes a "hazardous condition."

Definition of reportable marine casualty
The reportable marine casualty category is a finite subset of all marine casualties.  The marine casualty definition itself is arguably less broad than the hazardous condition definition, consisting of a more specific list of conditions and incidents.  But the marine casualty definition also includes the catch-all "[a]ny other circumstance that might affect or impair a vessel's seaworthiness, efficiency, or fitness for service or routes" which is also very broad and open to varied interpretation.  (See 46 C.F.R. 4.03-1 for the full definition of a marine casualty.)

However, the USCG marine casualty notice requirement only applies to certain listed marine casualties.  This subset is much more specifically and narrowly defined, resulting in fewer "casualties" that reach the notice threshold:
1. An unintended grounding, or an unintended strike of (allision with) a bridge;
2. An intended grounding, or an intended strike of a bridge, that creates a hazard to navigation, the environment, or the safety of a vessel, or that meets any criterion of paragraphs (a) (3) through (8);
3. A loss of main propulsion, primary steering, or any associated component or control system that reduces the manoeuvrability of the vessel;
4. An occurrence materially and adversely affecting the vessel's seaworthiness or fitness for service or route, including but not limited to fire, flooding, or failure of or damage to fixed fire-extinguishing systems, lifesaving equipment, auxiliary power-generating equipment, or bilge-pumping systems;
5. A loss of life;
6. An injury that requires professional medical treatment (treatment beyond first aid) and, if the person is engaged or employed on board a vessel in commercial service, that renders the individual unfit to perform his or her routine duties; or
7. An occurrence causing property damage in excess of USD 25,000, this damage including the cost of labour and material to restore the property to its condition before the occurrence, but not including the cost of salvage, cleaning, gas-freeing, drydocking, or demurrage.
8. An occurrence involving significant harm to the environment as defined in §4.03-65.9

The hazardous condition notice requirement has no dollar-value threshold, and includes more impacts or damage outside the vessel, such as a condition that "may adversely impact" the safety of structures, shore areas, or environmental quality.  The marine casualty notice and reporting requirement is generally focused on harm to the vessel and crew, with some exceptions, and larger value property damage and "significant" environmental harm.  In addition, a hazardous condition includes crew illness or under-manning, as well as injuries.  In contrast, the equivalent reportable marine casualty definition addresses only injury or loss of life.

When must notice be given to the USCG? 
Notice must be given "immediately" (hazardous condition) or "immediately after addressing safety concerns" (reportable marine casualty).10  Although theoretically possible, it seems unlikely that a vessel crew would be found in violation of the hazardous condition notice requirement if it made the report after addressing relevant safety concerns related to the hazardous condition.  Note that immediately notifying the USCG of a hazardous condition also satisfies the need to "immediately" notify it of a reportable marine casualty.

Where do these requirements apply?
The geographic scope of the hazardous condition notice requirement is also broader, applying to any vessel "bound for or departing from ports or places" in the US.11  It is debatable whether the USCG could enforce a requirement that a vessel on the high seas bound for or departing from the US must immediately notify the USCG of any hazardous condition.  However, any such hazardous condition certainly should be reported (as appropriate) in the relevant Notices of Arrival, and the USCG should be notified immediately of any such condition arising in US waters.

Marine casualty notice and reporting requirements apply to US vessels operating anywhere in the world, and to non-US vessels operating in US waters (generally within 12 miles of the US coast). In addition, non-US tank vessels operating in the Exclusive Economic Zone (generally within 200 miles of the US coast) must notify the USCG of certain casualties and conditions involving significant harm to the environment or material damage affecting the seaworthiness or efficiency of the vessel.12

Method of notice and reporting
The method for giving immediate notice is not described in either instance.  Hazardous condition notice must be given to "the nearest Coast Guard Sector Office or Group Office".  Immediate marine casualty notice must be given to "the nearest Sector Office, Marine Inspection Office, or Coast Guard Group Office".

All USCG Sector commands have 24-hour phone lines and also monitor VHF channel 16.  In significant emergency cases, such as collisions, fires, man overboard, or similar instances, calling the USCG on VHF channel 16 is the best method to ensure immediate and effective reporting.

Calling the USCG via phone would normally be preferable in less urgent cases, especially if the vessel has any privacy concerns or does not wish to broadcast its condition or casualty to all persons monitoring VHF channel 16.  The vessel can obtain the USCG Sector phone number from the local agent or by contacting the USCG on VHF channel 16 and asking for the appropriate phone number.

Content of notice
The regulations do not describe the required substance of the immediate hazardous condition notice.  However, the minimum notice requirements for a reportable marine casualty are described and are a good guideline for the minimum information that the vessel should be ready to discuss when making either "immediate" report.  These include the name and official number of the vessel involved, the name of the vessel's owner or agent, the nature and circumstances of the casualty, the location where it occurred, the nature and extent of injury to persons, and the damage to property.13  The person providing the required notice to the USCG should record the date, time, and substance of the notice, as well as the name(s) of USCG personnel they spoke with and the means by which they provided notice, including phone number, if applicable.

Written report of marine casualty
For any reportable marine casualty, the vessel must also provide a written report to the USCG within five days.14  This written report must be made on a "Report of Marine Accident, Injury, or Death" form (form CG 2692).  In certain circumstances, additional forms (CG 2692A-Barge Addendum or CG 2692B-Drug and Alcohol Testing) must also be provided to the USCG.  All of these forms are available from the USCG, and are also available online.  

If at all possible, vessel masters should refrain from providing written marine casualty reports to the USCG until they have had the opportunity to discuss the casualty and proposed report with their operations office and/or the local legal correspondent.  This is because factual mistakes in any such written report provided to the USCG may be misconstrued as purposeful false statements or obstruction, and may create further problems for the vessel, crew and operators, including possible criminal charges.

What can a vessel operator take away from this notice?
1. The USCG and the United States Department of Justice have the statutory authority to criminally charge individuals and companies for failure to immediately report hazardous conditions to the USCG when they believe the company or crew knowingly or wilfully failed to do so.
2. Vessel owners and operators must ensure that all of their crews and operations personnel are trained in the US reporting requirements, and that such requirements are made part of response plans and training audits.
3. Vessel owners and operators must reiterate with crews that they should err on the side of reporting if there is any question as to whether a particular circumstance should be reported.
4. Vessel owners and operators should try to foster good working relationships with the USCG office in the area of their operations so as to ease communications between the vessels and USCG.

Members should contact Gard if they have any questions about this notice, or US hazardous condition or marine casualty reporting requirements.

1U.S. v. Canal Barge Company, Sixth Circuit Court of Appeals, January 7, 2011.
2 33 C.F.R. 160.215.
3 33 C.F.R. 160.204.
4 33 U.S.C. § 1232(a).
5 33 U.S.C. § 1232(b). 
6 33 U.S.C. §  1232(c).
7U.S. v. Canal Barge Company, Sixth Circuit Court of Appeals, January 7, 2011.
8 33 C.F.R. 160.204.
9 46 C.F.R. 4.05-1.
10 33 C.F.R. 160.215, 46 C.F.R. 4.05-1.
11 33 C.F.R. 160.202. 
12 46 C.F.R. 4.03-1.
13 46 C.F.R. 4.05-5.
14 46 C.F.R. 4.05-1. 

Any comments to this article can be e-mailed to the Gard News Editorial Team.