SSA Marine: 1.6 Million Paid in Penalties and Fees

Crina Hoyer is the Executive Director of RE Sources for Sustainable Communities, a local nonprofit that promotes sustainable communities through recycling, education, advocacy, and conservation of natural resources.
Matt Krogh is the North Sound Baykeeper at RE Sources, working to make sure our local waterways are swimmable, fishable, and drinkable.

After a year-and-a-half legal battle, RE Sources for Sustainable Communities (RE Sources) has entered a settlement with SSA Marine-owned Pacific International Terminals (PIT) for their illegal fill of 1.2 acres of wetlands at Cherry Point, WA. The violations were part of a broader, unpermitted clearing-and-drilling project that resulted in the destruction of almost three acres of wetlands, the clearing of nine total acres, and degradation of a Native American archaeological site. In this article, we will address the settlement terms, what happened leading up to the illegal clearing, and what we have learned about SSA in the process.

There has been much speculation about how SSA Marine, a major multi-national company, could have started work without first getting the necessary permits. Every competent business in the building industry knows the importance of getting the right permits. Failing to do so can often cost you your budget, your project, or even your business.

We know this at RE Sources because we’re in that industry; part of what we do is to deconstruct and salvage buildings and, just like every other contractor, we make sure permits are in-hand before we begin the work, doing business while operating under the law. Multi-national corporations like SSA Marine, though, seem to expect to operate above the law to meet their bottom line.

It’s simply unfair to expect local small businesses to compete in an environment where large corporations can break with impunity the laws that the rest of us must follow. That’s just one of the many reasons we at RE Sources believe it is crucial to hold corporations like SSA accountable for their impacts. Part of holding them accountable is taking action when agencies fail, which is what led to our lawsuit in December, 2011. The few fines levied by the county and state, totaling just over $4,000, would in no way motivate a company as large as SSA to stop breaking the law.

The Settlement

In order to settle the case, SSA agreed to pay $1.6 million in penalties and fees, including a payment of $825,000 to the nonprofit Rose Foundation for restoration projects to benefit Puget Sound. This is among the largest penalties of its kind under the Clean Water Act. SSA is also required to set aside 2.9 acres of wetlands to help mitigate the damage they caused.

Aside from partial reimbursement for its direct expenses, RE Sources receives no money from the settlement. Pursuing this lawsuit ultimately came at a net loss for our organization, but the cost was worth the opportunity to hold SSA accountable to the law and to find out if their actions were a mistake, mismanagement, or malice.

According to the evidence uncovered during our investigation, this wasn’t a simple mistake.

1. In 2008, SSA Marine received administrative authorization from Whatcom County Planning and Development Services, based on their 1997 permit, to begin a geotechnical investigation at the site. In these original requests, SSA clearly specified boreholes to the west of Gulf Road, a north/south divider road that defined the east edge of the original, smaller GPT proposal.

Result: Limited permissions were given for operations west of Gulf Road.

2. In 2011, SSA wrote to Whatcom County announcing their intent to do geotechnical exploration that would include additional miles of road-clearing and dozens of boreholes to the east of Gulf Road — where the new, larger proposal’s main rail loop and coal dump would be located. Whatcom County informed them that the area in question was outside of the administrative permission from 2008.

Result: SSA had no administrative permission or permits for either road-clearing or boreholes east of Gulf Road.

3. In February of 2011, SSA submitted their GPT Archaeological Findings Report to the U.S. Army Corps of Engineers. This included surveys showing they knew locations of important Native American archaeological sites, including one that SSA’s contractors bulldozed and drilled during the unpermitted clearing. In the broader Project Information Document — also submitted in February, 2011 — SSA acknowledged the need for a plan to deal with any archaeological sites they may inadvertently uncover, and they agreed to have an archaeologist present during any ground work.

Result: SSA failed to develop an inadvertent discovery plan in advance of the clearing, and failed to have an archaeologist present as required.

4. In April and May of 2011, the Army Corps asked SSA if impacts to a key archaeological site could be avoided. The Corps required an environmental impact statement and a Clean Water Act permit, and required that Section 106 consultation — formal talks between the Corps, SSA, and tribes — take place before work began.

Result: SSA failed to apply for the appropriate Clean Water Act permit, which allowed them to dodge the requirement of consultation with the Lummi and Nooksack tribes.

5. In May of 2011, SSA continued to consult with the Army Corps and Ecology about permits necessary to build GPT. They toured the site at Cherry Point and were informed that further wetlands delineation would be needed to consider permits and mitigations.

Result: SSA failed to get multiple necessary permits and proceeded with work that damaged those same wetlands.

So, to sum up: SSA had years of exchanges about what permits they needed in order to proceed with any land-clearing projects. They knew where important wetlands and archaeological sites were, and they directed contractors to go ahead with clearing and drilling in precisely those places anyway.

The Spin

SSA’s vice president, Bob Watters, recently wrote in The Bellingham Herald that SSA thought they had the permits when they directed their subcontractor to begin work on clearing acres of valuable wetlands. This is either a lie or one

of the least-reassuring statements one could possibly hear from a multibillion-dollar, multinational corporation that is asking us to trust them. And SSA is asking us to trust them with the management of a dirty and dangerous coal port proposal, a proposal that sites in the middle of sensitive wetlands, a landscape sacred to the Lummi people, and our state-designated Cherry Point Aquatic Reserve.

Which answer do you prefer? That they did it on purpose? Or that they made a massive permitting error in advance of desecrating and degrading properties at Cherry Point? Either way, their actions illustrate that they can’t be trusted to make good on their promises to regulators, to labor unions, to local tribes, or to our community.

Our attorney, Richard Smith, highlighted this problem in his statements: “[SSA] acknowledged that they knew beforehand that permits or authorizations were required not only from the Army Corps, but also from Ecology and the county. They could offer no explanation for why they didn’t get these, except that following the law ‘fell through the cracks.’ Then, their own wetlands consultant testified that she was ‘appalled’ by the destruction [SSA] caused. What does this say about how they are likely to conduct themselves in building and running a huge coal terminal?”

Bob Watters of SSA also wrote in an op-ed on August 8th that they settled the suit almost as a courtesy, sparing the courts further trouble in dealing with RE Sources’ “nuisance suit.” The problem is that, after being caught in blatant violation of the Clean Water Act, the last thing SSA can pretend they care about is the law.

Supposedly-sophisticated companies like SSA have to navigate multiple regulatory agencies with multiple permitting requirements for nearly everything they do, build, operate, ship, transport or construct. Because the permits are such a fundamental piece of the work they do, one would expect them to employ experts to apply for and track these every step of the way. So how is it that a company that builds ports across the globe somehow failed to obtain permits before destroying wetlands, clearing roads, and drilling holes to gain geotechnical information? Because they were hoping no one would catch them.

The Truth: Why They Really Did It

Philip S. Lanterman, a leading national expert on large-scale construction project management, conducted an in-depth analysis of the evidence. He stated, “In my opinion, it is probable that [SSA] intentionally chose to proceed with the geotechnical investigation without necessary permits to obtain the expected economic benefit of securing the geotechnical information early in the project timeline, and [SSA] has actually received such benefit.”

Lanterman further found that “[SSA’s] efforts to ensure legal compliance of the geotechnical investigation were so far below the standard of care that, in my opinion, they evidence extreme recklessness as to legal compliance or, more likely, an intentional violation of the law.”

The motivation was almost certainly for profit. By acquiring key information early, SSA can get a jump-start on the project engineering. There’s a short window of time for coal to be profitable in the world markets, and SSA likely wanted to jump through that window as fast and as far as possible. Is this the kind of business we want to invite into our community?

The Whatcom County Council and a variety of state and federal agencies will, at some point, make a decision as to whether or not to approve permits for SSA’s coal terminal at Cherry Point. Each of those agencies — the state Department of Natural Resources, state Department of Ecology, Fish and Wildlife, and others — will be acting in the public’s interest, in the public trust.

We hope these decision-makers are paying attention to the one crystal-clear aspect of this case: that we can never, ever, trust SSA to look out for our community. They haven’t in the past, they aren’t in the present, and it’s hard to see how they would in the future.

SSA has demonstrated through its actions that they are willing to ignore, forget, or willingly violate environmental laws, even at the earliest stages of this project. When SSA can’t even comply with very basic permitting requirements, how can we trust them with the more complex protections necessary to defend human health, the Puget Sound, and the resources on which our community relies?

PS: Ari Steinberg, the guy who was in charge of this project when all of this occurred, still has his job. It seems like the guy who was at the helm when this whole debacle happened would have at least been demoted and, more realistically, would have been fired. Either the leaders at SSA Marine are more forgiving of multi-million dollar mistakes than the rest of us, or they are keeping Ari around because he’s proven that he is willing to do exactly what they ask of him.

About the Cherry Point Wetlands

SSA may try to downplay the impacts, but filling or degrading almost three acres of wetlands is a very real impact on a precious and vanishing resource. Back in 1993, the EPA opposed construction of the original Gateway Pacific Terminal (GPT) design because of its unacceptable impacts to 5.8 acres of wetlands.

Today’s GPT design? 162 acres of wetlands would be destroyed by GPT. We can see now why SSA sees the wetlands they’ve already destroyed to be unimportant — the amount is miniscule in comparison to the wetlands they plan to destroy in the future.

When considered in the context of their announced plans — to destroy 162 acres of wetlands in the process of building North America’s largest coal export terminal — it’s a little shocking that they even bothered trying to hide what they were doing illegally out at Cherry Point. But they did deliberately hide the entryways to the roads they cleared without a permit, as we discovered from one of their contractors during depositions. Why? Probably because they knew how hard it would be to get permits if they went through the legal channels. And it would be especially difficult if they had consulted with affected tribes as required by law.

About the Cherry Point Wetlands

SSA may try to downplay the impacts, but filling or degrading almost three acres of wetlands is a very real impact on a precious and vanishing resource. Back in 1993, the EPA opposed construction of the original Gateway Pacific Terminal (GPT) design because of its unacceptable impacts to 5.8 acres of wetlands.

Today’s GPT design? 162 acres of wetlands would be destroyed by GPT. We can see now why SSA sees the wetlands they’ve already destroyed to be unimportant — the amount is miniscule in comparison to the wetlands they plan to destroy in the future.

When considered in the context of their announced plans — to destroy 162 acres of wetlands in the process of building North America’s largest coal export terminal — it’s a little shocking that they even bothered trying to hide what they were doing illegally out at Cherry Point. But they did deliberately hide the entryways to the roads they cleared without a permit, as we discovered from one of their contractors during depositions. Why? Probably because they knew how hard it would be to get permits if they went through the legal channels. And it would be especially difficult if they had consulted with affected tribes as required by law.