In February 2008, Basel Action Network and the Save the Classic Liners Campaign tipped off the U.S. Environmental Protection Agency when they discovered that Global Marketing Systems, Inc. had taken ownership of the SS Oceanic, a cruise ship formerly named the SS Independence.

The company had the old passenger liner towed out of San Francisco Bay with the intent of scrapping the vessel on the beaches of South Asia.

Basel Action Network demanded that the federal government take action to have the ship returned to a U.S. port, but the EPA claimed the agency lacked the authority to have the ship recalled.

Still, the EPA took legal action against the company for violations of the Toxic Substances Control Act, the law which prohibits the export of polychlorinated biphenyls, or PCBs, persistent toxic pollutants used in the paints and insulation in older ships.

Today, the EPA announced it has settled an administrative complaint against Global Shipping LLC and Global Marketing Systems, Inc. for alleged illegal distribution and export of a ship containing PCBs. The companies will pay a total of $518,500 to resolve the two Toxic Substances Control Act violations.

"Companies need to ensure PCBs are removed from any ship being exported in order to protect public health and the environment from exposure to PCBs," said Jeff Scott, division director for waste programs in the EPA's Pacific Southwest region. "Federal law prohibits companies from exporting PCBs for disposal, including PCBs built into ship components, unless approval from EPA has been obtained."

"While the Oceanic wasn't recalled to the U.S., we're very happy that EPA took their job seriously and that one of the world's leading exporters and exploiters of the infamous shipbreaking beaches of South Asia has finally been held to account," said Jim Puckett, executive director of the Basel Action Network, which is based in Seattle.

"While half a million dollars is not much of a financial deterrent for such actors when a single ship can be worth well over $5 million in scrap steel, they are now on notice - another such export would be a "knowing and willful" criminal violation, and they could find themselves behind bars."

Soon after EPA initiated its enforcement action against the two companies, Global Marketing Systems requested a new application to the U.S. Maritime Administration seeking approval to sell the vessel but changing the purpose of export from disposal to continued use of the vessel to accommodate labor workers in the Arabian Gulf area.

Today, the whereabouts of the Oceanic remain unknown, but so far it has not been seen in the Asian ship breaking yards.

Every year some 700 sea vessels are brought to the once pristine beaches of Asia for scrapping. These beaches are now littered with machinery parts, oil rags and leaking barrels, the air is poisoned by open fires, the land and surrounding water are contaminated by asbestos, heavy metals, dioxins and other persistent organic pollutants. The workers are unprotected from toxic substances, explosions and falling steel.

Puckett says if U.S. government agencies continue to ignore each other's rules, ship dealers will continue to circumvent toxics laws and send toxic ships to Asia.

For example, a ship broker can suggest that the seller of a ship ask the Maritime Administration, MARAD, to change the flag of a ship from a U.S. flag to a "flag of convenience" and then make the transaction and export.

Because today's rules apply only to U.S. registered vessels, this creates a major loophole if MARAD allows such re-flagging without notifying EPA.

If the U.S. Coast Guard does not promulgate rules or adopt guidelines to refuse or delay "dead ship tow" permits until the necessary inquiries have been made with EPA, violations will continue.

"These old ships are often towed and have little value other than for scrap," said Puckett. "There has got to be greater cooperation between MARAD, the Coast Guard and EPA to provide an early warning system to prevent these toxic ships from slipping away."