Ship owners admit to releasing sludge

The Hong Kong owners of a Boston-bound container ship have agreed to pay the largest environmental fine in New England history, for pouring more than 40 tons of oil sludge into the Atlantic Ocean last year and then trying to cover up the crime.

In a federal plea agreement announced yesterday, MSC Ship Management Ltd. agreed to pay a $10.5 million fine and to plead guilty to federal charges of conspiracy, destruction of evidence, and making false statements stemming from the company's failure to properly dispose of waste oil from the ship's engines and machinery. The penalty eclipses a $9 million fine a New York company agreed to pay last year for causing a 2003 oil spill in Buzzards Bay.

In a routine inspection while the ship was in Boston Harbor this year, Coast Guard officials discovered doctored books and a hidden, illegal oil discharge system that drained directly to the sea.

The oil was dumped far away from Boston during several journeys that the MSC Elena made over a five-month period in 2004, federal prosecutors said.

''There was nothing accidental about this case," said US Attorney Michael J. Sullivan.

MSC Ship Management ''knowingly violated antipollution laws, intentionally dumping oil sludge and waste oil directly into the ocean and even went so far as to manufacture a so-called 'magic pipe' to accomplish the crime," Sullivan said.

Coast Guard officials say they believe the fine is the largest in the world against a company for intentional polluting from one ship.

The agency has discovered other bypass systems on container ships off the US coast in recent years, but Coast Guard officials and federal prosecutors said yesterday that the Elena case was of particular note because of crew members' and company officials' deception after they had been caught.

The chief engineer of the 663-foot Elena, Mani Singh, has agreed to plead guilty at a hearing scheduled for today.

The plea will involve charges related to the illegal dumping and the cover-up. The ship's second engineer, Aman Mahana, pleaded guilty this month to violating antipollution laws and to not keeping proper records and equipment to monitor discharged waste.

A lawyer for MSC Ship Management said last night that the crew members operated against company policy.

He also said that the company understands its responsibility. ''The company takes these matters very seriously," said Ronald Zdrojeski, the lawyer.

As on other large ships, engines and other machinery on the Elena produces vast amounts of waste oil that must be treated in an on-board system, stored for offloading later, or incinerated.

Crews are supposed to record the disposal of oil in a record book.

On the Elena, Coast Guard officials said, they noticed discrepancies with the oil record book and then found a disassembled steel ''magic pipe," which bypassed the treatment system and which let oily waste pour into the ocean.

The crew would apparently disassemble the pipe to avoid being caught and then reassemble it at sea, said Rear Admiral David Pekoske, commander of the First Coast Guard District.

Officials said yesterday that the pollution treatment system, which appeared to be working on the ship, can be expensive, and that the crew may have tried to save money by rigging the illegal pipe.

After the pipe was found, crew members denied that the ship was discharging oil and hid documents, prosecutors said.

Officials in Hong Kong also were reported to have participated: Engine room crew members were lined up and summoned into the captain's cabin to speak by telephone to two supervisors in Hong Kong, who allegedly urged them to stick to a false story. Eight crew members were then forced to stay in Boston for several weeks. while prosecutors built a case.

If the agreement is approved by a judge, $500,000 of the fine will be used in part to help seafarers learn how to report environmental crimes to the Coast Guard.