CPA eyes suit for 2 vessels that ran aground

The Commonwealth Ports Authority board is on the cusp of suing a company that owns two ships that ran aground in CNMI waters because nothing is being done yet by agencies that are responsible for the two vessels.

The two vessels—Lady Carolina and Miss Saipan—are owned by Saipan USA Fisheries Inc. that used to be tied up in a bankruptcy proceeding.

CPA Saipan port manager Christopher Tenorio told the board that divers who inspected the docks for damage in the wake of Typhoon Soudelor have recommended that the Delta dock be condemned, in part due to the proximity to the two grounded ships. Delta dock is located at the north end near the CPA building at the Port of Saipan.

Right now, Saipan Sea Ventures uses that dock but it is trying to find another location and vehicles, pedestrians, and vessels are not allowed in the area, according to Tenorio.

He hopes to meet with Saipan Sea Ventures sometime this week for a timeline on their plan to move out of the area.

“However, the two vessels are still out there,” Tenorio said.

CPA legal counsel Robert Torres said the U.S. Army Corps of Engineers and one other company have deemed the Delta dock as “not sound.”

“The advice is that it is structurally unsound so it is a risk,” Torres told board members. “We have to…commission a study on its condition and what has to be done and the cost for it. That will bring further issues into any possible plans due to ongoing interest of expansions of tenants.”

CPA officials noted that Lady Carolina is out in the reef area and isn’t under their jurisdiction but under the Department of Lands and Natural Resources. Miss Saipan is aground and is attached to the Delta dock—basically the ship’s front area is on top of the dock.

Salvage the ship, seek federal help

Torres explained to the CPA board the legalities surrounding the grounded vessels.

“CPA has no role over there. They had bankruptcy proceedings, but the bankruptcy judge and trustee dismissed the proceedings because there are not enough assets to pay the creditors,” Torres said.

CPA tried to ask the Federal Emergency Management Agency for public assistance in the removal of the vessel but “we haven’t heard back from FEMA,” he said.

Torres said if the vessel owners do not step up within the next week or two, CPA will have to file a complaint for the salvage of the vessels—to basically chop it up. He said the CNMI government could possibly join in the complaint, suing the owners of Lady Carolina and Miss Saipan and its creditors for the salvage of the vessels.

Saipan USA Fisheries has three secured creditors: the Commonwealth Development Authority, Independence Bank, and the First Hawaiian Bank.

CPA will also have to commission a salvor—one who salvages or assists in salvaging a ship or its cargo—“to chop up this vessel and remove it and somehow try and see to recover the cost of it,” Torres said.

If Saipan USA Fisheries or its three secured creditors don’t respond or don’t do anything about the vessels, a complaint may be filed for admiralty, he added.

Miss Saipan needs to be removed prior to the Delta dock repairs, because it is aground and cannot be moved or lifted up.

“If they don’t do that, then we have to undertake that to remove it. Hopefully the U.S. Coast Guard will look under the ‘Wreck Removal Act’ and it is a month after the storm and we haven’t seen any parties removing this vessel. We have to coordinate with DLNR and the AG’s office to bring suit if everything else fails,” Torres said.

CPA hopes they don’t have to do that because it’ll be a cost that CPA has to bear and that will be additional costs that will have to be borne by the wharfage fees and burden the community because CPA would have to maintain their debt service ratio.

Using Wreckage Removal Act

Saipan Tribune learned that the removal of the two vessels is not under CPA’s jurisdiction but under DLNR, as the Coast Guard has ordered the owners to clean out the vessels of all oil and possible pollutants. The owners have done so.

According to CPA, the local detachment for USCG said that once they were done with that, they have nothing further to do.

CPA didn’t quite agree with that and wrote to USCG that they do have jurisdiction under the “Wreck Removal Act.” The agency urged the Coast Guard to exercise its authority, saying they would run it up the chain of command of USCG. CPA has yet to hear from them.

When a vessel is grounded or sunk in navigable waters of the U.S., the law places certain strict duties on its owner. Both the USCG and U.S. Army Corps of Engineers are empowered to enforce these duties and find their authority in the Wreck Removal Act.

Section 409 also requires the owner to take immediate action to remove the wreck. If the owner does not undertake removal, the wreck may be considered abandoned. In that scenario, the U.S. government may undertake removal of the wreck and then seek reimbursement of its costs from the responsible owner.