Ship Operator Pleads Guilty and Sentenced to Pay $10 Million Related to Charges Arising from Ground

WASHINGTON (USDOJ) IMC Shipping Co. Pte. Ltd. (IMC), a Singapore corporation, pleaded guilty today in federal court in Alaska to a three-count information alleging two violations of the Refuse Act for the illegal discharge of oil and soy beans and one violation of the Migratory Bird Treaty Act for killing of thousands of migratory birds that resulted from the grounding of the M/V Selendang Ayu on Dec. 8, 2004 in the Alaska Maritime National Wildlife Refuge. IMC was subsequently sentenced to pay a criminal penalty of $10 million.

The grounding of the M/V Selendang Ayu spilled approximately 340,000 gallons of bunker fuel, as well as several thousands of tons of soy beans, into the Bering Sea in the Alaska Maritime National Wildlife Refuge in the Aleutian Islands resulting in the deaths of several thousand migratory birds.

The subsequent efforts by the U.S. Coast Guard to rescue the crew of the Selendang Ayu resulted in the loss of a U.S. Coast Guard helicopter at sea when it was struck during the storm by a 30 foot wave. Tragically, six of the Selendang Ayu crew members died in the crash. The National Transportation Safety Board has also conducted a casualty investigation.

According to the plea agreement, in December 2004, the M/V Selendang Ayu, operated by IMC, was traveling the Great Circle Route through the Aleutian chain in Alaska when it went aground near the north shore of Unalaska Island, west of Skan Bay in the Bering Sea. Unalaska Island is within the Alaska Maritime National Wildlife Refuge. On Dec. 6, 2004, the discovery of a crack in the engine’s number three cylinder liner led the crew to shut down the engine. The ship drifted for three days in high winds and heavy seas while the crew attempted to repair the engine. The crew was never able to restart the engine. On Dec. 8, 2004, the M/V Selendang Ayu ran aground on the north shore of Unalaska Island, Alaska west of Skan Bay.

The criminal penalty includes $4 million in community service, specifically, $3 million to conduct a risk assessment and related projects for the shipping hazards of the area where the M/V Selendang Ayu went aground near Unalaska Island, and $1 million for the Alaska Maritime National Wildlife Refuge, Aleutian Chain Unit where the ship went aground. IMC has also been sentenced to serve 3 years probation to include an audit of IMC’s maintenance program. The cost of the clean up of the spill was over $100 million.

The refuge where the ship went aground hosts the largest nesting population of seabirds in North America and is a significant site for migratory seabirds both nationally and internationally. The refuge’s primary functions are to facilitate scientific research regarding the health of the ocean and promote conservation of seabirds. As a result of the grounding of the Selendang Ayu, approximately 340,000 gallons of bunker oil spilled into the ocean killing migratory birds in numbers into the thousands, and oiling 20 miles of coastline and spilling thousands of metric tons of soy beans into the Bering Sea.

In connection with the entry of the guilty pleas, FBI Assistant Special Agent in Charge of the Anchorage Field Office, David Heller said, “The FBI takes very seriously our role in enforcing the nation’s environmental statutes and we greatly appreciate the close relationships we have with the agencies with whom we worked on the Selendang Ayu investigation. As future challenges arise, we look forward to the opportunity to continue to support our partner agencies in protecting the Alaskan people, economy, and environment.”

Regarding the criminal resolution, Stan Pruszenski, Special Agent in Charge, U.S. Fish and Wildlife Service, Office of Law Enforcement, Alaska said, “The Aleutian Islands and Unalaska are a region rich in wildlife diversity and critically important as migratory bird habitat. This area of the Alaska Maritime Refuge hosts seabird populations of both national and international significance. This resolution is a positive step toward restoration and future protection of this habitat. I am particularly encouraged by the allocation of monies to conduct a risk assessment to protect the wildlife and habitat in this busy shipping corridor.”

Granta Nakayama, the U.S. Environmental Protection Agency’s Assistant Administrator for Enforcement and Compliance Assurance said, “The defendant's actions led to the spill of 340,000 gallons of oil into the Alaska Maritime National Wildlife Refuge. Companies that gamble with safety and violate the laws that protect our environment will be prosecuted.”

The captain of the M/V Selendang Ayu, Kailash Bhushan Singh, previously pleaded guilty on April 1, 2005, to a charge of making a false statement during the casualty investigation regarding the time the engine was shut down prior to the grounding of the M/V Selendang Ayu. The plea agreement in this case addresses only IMC’s criminal culpability. The state and federal trustees are continuing to assess natural resource damages from the spill. This plea agreement does not limit any civil liability that IMC may have to any person or entity, including any federal, state or local government agency.

The case was prosecuted by Assistant U.S. Attorney Andrea (Aunnie) Steward, Assistant U.S. Attorney Kevin Feldis, Special U.S. Attorney Todd Mikolop, all of the U.S. Attorney’s Office in the District of Alaska together with Senior Trial Attorney Robert Anderson from the Environmental Crimes Section of the Department of Justice. The case was investigated jointly by the following agencies: U.S. Fish and Wildlife Service Office of Law Enforcement, the U.S. Environmental Protection Agency’s Criminal Investigation Division, the Federal Bureau of Investigations, and the U.S. Coast Guard.
 

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Selendang Ayu Settlement Reached (IMC Statement / Press Release)

Alaska, 22 August 2007 - IMC Shipping Co Pte Ltd, General Agent of the M/V Selendang Ayu, which grounded off Unalaska Island in the Aleutians during a fierce storm in December of 2004 and the United States Department of Justice have reached a settlement of federal charges arising from the accident and its aftermath. Under the terms of the settlement, IMC pleaded guilty to three strict liability, misdemeanor charges, i.e. two for violations of the Refuse Act and one from the Migratory Bird Treaty Act, relating to the discharge of oil and soy beans from the vessel, and killing migratory birds.

IMC's spokesman, James Lawrence, commenting on the settlement of the case said, IMC has worked closely and fully cooperated with the relevant authorities including the United States National Transportation Safety Board (NTSB) during their investigations. We regret the loss of six of our crew and the damage to marine life and to the land. We would like to thank the Alaska Department of Environmental Conservation, and the US Coast Guard for their rescue operations and efforts as part of the Unified Command. We are grateful for the efforts of the responders and the hundreds of men and women, who helped in the clean-up efforts. Finally, we want to thank the people of Unalaska community, and our friends and industry colleagues the world over for their support during the accident.

Clean up of the spill area took place over two summers and was declared complete on June 23, 2006 by the Unified Command. It represented the work of numerous companies, communities and government agencies.

The Selendang Ayu was en-route from Seattle to China in December 2004, transiting the Bering Sea when a crack in the number 3 cylinder liner was discovered. The NTSB report determined that the probable cause of the grounding of the Selendang Ayu was the development of this cylinder liner crack which required the crew to shut down the engine in order to isolate the number 3 cylinder. After isolating the cylinder, the crew could not manage to get the engine restarted. Under extreme conditions of strong winds and rough seas, the stricken vessel grounded and subsequently sank on the west coast of Unalaska Island.

The NTSB report underscored the lack of adequate salvage response resources in the Bering Sea and the Aleutian Islands. Until the lack of salvage resources is addressed, this area will remain at risk to the shipping industry.

Following the accident, IMC has since put in place an Aleutian Island Shipboard Emergency Plan for its fleet; a plan it hopes will become a model for the shipping industry.

Prior to leaving Seattle on the fateful voyage, the US Coast Guard had conducted a thorough inspection of the Selendang Ayu. Its investigators found no deficiencies aboard the vessel, and in fact were complimentary of its condition and upkeep.

Vessel records and crew testimony demonstrated that the crew had conducted a detailed maintenance check and thorough inspection of the main engine pistons and cylinders and that there were no known problems with the main engine, including its cylinder liners or piston rings, when the vessel departed Seattle for China.

At the time of the accident, there was no overdue maintenance as all recommended maintenance works and inspections had been carried out according to the schedule set forth in the manufacturer's recommendations. In addition, the vessel had a full complement of spare parts when it left Seattle.

IMC and the United States Department of Justice disagree as to whether improper maintenance and operation of the vessel could have led to the development of the cylinder liner crack. However, as part of the plea agreement, the company will willingly submit to future periodic reviews of engine maintenance and performance on vessels within the IMC fleet.

Under the terms of the plea agreement with the U.S. Department of Justice, IMC will be contributing $3 million dollars of the penalty to fund a risk assessment exercise of the navigational risks along the heavily transited Great Circle Route and another $1 million dollars of the penalty for the National Fish and Wildlife Foundation for funding projects for the Alaska National Marine Wildlife Refuge system.

IMC remains committed to the Aleutian Islands initiatives. It is a complex challenge that the Alaskan population, the U.S. Coast Guard and shipping industry must have a shared stake in ensuring the sea route is safe. IMC will continue to work with its industry partners and government agencies of the world to continuously explore best practices to improve safety and environmental protection.