Transcript Document

Houston Marine Insurance Seminar
2002
Pollution Basics
• Exposures
– OPA 90
– CERCLA
– State law
– Cargo owner’s contingent exposures
– Criminal and civil penalties
OPA 90 Definitions
 Act of god
 Gross ton- ITC verses GRT
 Owner and operator
– Means owner and operator
– Demise charterer
– Shipyards and boat dealers
 Tank vessel
OPA 90 Amendments
• Exclusions from definition of tank vessel
• Edible oils financial responsibility
• Offshore facility financial responsibility
• Interim payments
• Response vessel financial responsibility
• Clarification of liability in response
Additional OPA 90 Issues
 Act of war /terrorism
 Mobile offshore drilling unit (MODU)
 Carrying oil from an offshore facility
 Failure to cooperate
State Regulation
 Liability limits often greater than
federal limits
 Financial responsibility
requirements
 Response/contingency planning
State Regulation…continued
 Alaska
 California
 State law broader in scope
State Regulation…continued
 OPA 90 does not preempt state law in many areas of
regulation
 U.S. v. Locke (INTERTANKO)
– Supreme Court Decision
– Federal law controls equipment and operating
standards
– State standards OK for liability and financial
responsibility
– Bottom Line : States continue to pass new
requirements for financial responsibility,ballast
water, and in other environmental areas.
Criminal Liability
 Background
– Greater potential that environmental
violations will be treated criminally
– Statutory Basis for Liability
– OPA 90
– Migratory Bird Treaty Act
– Refuse Act
– Unseaworthyness
Ballast Water…continued
 Issue – non-indigenous aquatic species
– Federal act ineffective
– States have enacted mandatory ballast
water management programs
– Problematic statutory solutions
– Greywater regulations in Alaska
Incident Response
– Coverage conflicts among pollution, hull
and P & I and underwriters
– Salvage/wreck removal
– Firefighting
– Pollution
Ballast Water
 Should invasive species events be considered
“pollution?”
 Will industry react?
Criminal Liability
 One Example: Eklof Towing (1998)
– $9.5 million fine
– Fine and Probation for company president
and tug captain
– Collateral Consequences
– Lose Gov’t Contracts
– Onerous terms of Probation
Criminal Liability
 Other Examples
– Canadian Prosecution for Migratory Bird
Convention Act (2001)
– Other U.S. Prosecutions for Deliberate
Discharges or falsification of Log Books
Criminal Liability
 Miscellaneous issues
– No more insurance for fines?
– Financial guarantee system
– Effect of criminal investigation on
spill response efforts
Criminal Liability
 Solutions
– Legislative
– Educate Employees
– Identify Criminal Defense Counsel
– EPA / DOJ want compliance programs
– Choose Location of a Violation Carefully
Defense Fines and Penalties Endorsement
 Covers Certain fines under FWPCA, Refuse act
and MBTA.
 Legal Defense
 Public policy
Foreign Asset Control Act
 The Cuban Assets Control Regulations, 15 CFR Part
515
– issued by the U.S.Government on 8 July 1963 under
the Trading With the Enemy Act in response to
certain hostile actions by the Cuban government.
– Administered by the U.S.Treasury Department's
Office of Foreign Assets Control.
– www.ustreas.gov/ofac
– Goal of the sanctions is to isolate the Cuban
government economically and deprive it of U.S.
dollars.
Foreign Asset Control Act …Continued
– Criminal penalties for violating the sanctions
range up to 10 years in prison,$1,000,000 in
corporate fines,and $250,000 in individual
fines.Civil penalties up to $55,000 per violation
may also be imposed.
– ...No products,technology,or services may be
exported from the united states to Cuba, either
directly or through third countries,such as
Canada or Mexico.…Provision of consulting
services is also prohibited.
Cargo Owners








Alaska
California
Florida(contingent)
Maryland
New Jersey (contingent)
North Carolina
Oregon
Washington
Additional Endorsements
 Offloading
 Public vessels
 Derelict substance
 Marina coverage
 Storage ashore
Further Information
WWW.WQIS.COM