Volume 3, issue #2 - 22-01-1998

Nov. 28, 1997 A top marine lawyer has warned that the day is fast approaching when the world will not be able to cope with the cost of cleaning up after major oil spills at sea.
Charles Hattersley, who heads the marine department at west country lawyers Foot & Bowden, says we have not seen the last environmental disaster resulting from major oil spills such as those from the Amoco Cadiz, Exxon Valdez and Sea Empress.
And he warns that unless more countries sign up to international conventions designed to provide member states with compensation for the effects of oil spills, the environmental and economic costs will spiral.
"As far as I am aware, only 10 countries have signed up to all conventions, if you include the one which came in to force in May 1996," he said. "There is a very substantial number of omissions, and in the event of a major casualty off the shores, for example, of China or South Africa, there would be no legal obligation to provide substantial compensation."
(The 10 countries are: Denmark, France, Germany, Japan, Mexico, Norway, Oman, Spain, Sweden and the UK.)
Speaking to the Royal Institute of Chartered Surveyors' Surveying at Sea seminar, Mr Hattersley suggested that more maritime nations should be forced to join "if the world is to cope commercially and sensibly with the inevitable fallout of these terrible incidents".
The compensation payments for damage caused by oil spills from laden tankers at sea are largely governed by two international agreements.
They are the 1969 International Convention on Civil Liability for Oil Pollution Damage (Civil Liability Convention) and the 1971 International Convention on the establishment of an International Fund for Compensation for Oil Pollution Damage (the Fund Convention).
About 75 states have signed the Civil Liability Convention, which according to Mr Hattersley, means that: "In the event of an incident within territorial or exclusive economic zone limits, the country will be a member state, and therefore liability to pay for the pollution will almost certainly follow."
The notable exception, he pointed out, is the United States. While that country aspires to be a trend-setter when it comes to adhering to international treaties, it has shown 'a remarkable reluctance' to adopt any oil pollution conventions.
The Civil Liability Convention is the primary agreement against which initial demand for payment is made. However, as Mr Hattersley made clear, it does not provide comprehensive cover: "It is only applicable to oil pollution damage resulting from persistent oil from laden tankers; it does not, therefore, cover spills of gasoline, light diesel oil, kerosene and so on, or from tankers in ballast."
Those who cannot obtain full compensation under the Civil Liability Convention can turn to the Fund Convention. One of its aims is to provide supplementary compensation.
All Fund Convention claims and payments are overseen by the IOPC (International Oil Pollution Compensation Fund). Many leading maritime countries have not signed up, however, and are not covered.
"I can understand why, for example, Switzerland has not signed the convention, but why countries such as China, Chile, New Zealand and South Africa - all of which have very long coastlines - and countries such as Singapore, Senegal, Belize and Egypt - which are heavily involved in commercial and shipping industries - have not signed, escapes me", said Mr Hattersley.
The limit of compensation for single incidents under IOPC is around British Pound 58 mm. Almost all claims fall within this limit. However, the trend is towards higher claims, and a group of 9 nations have agreed a new compensation limit per incident of about BP 135 mm.
Even so, costs are mounting, and the new limits might soon be outstripped by even higher claims.
In the Italian courts the case of the Haven (a Cyprus tanker) has so far notched up around BP 320 mm in claims. The Italian government alone is claiming the equivalent of BP 100 mm in clean-up costs.
Countries inside the system will continue to benefit from the compensation funds even if they do not cover all costs. Some countries will always remain outside the system, in which case, the question of what cost and whose cost will be determined by the application of statutory law applicable to the relevant country in whose territorial seas the incident has caused damage," he said.