Transcript VESSEL POLLUTION AN INTERNATIONAL PERSPECTIVE

BY
CAPT. EDWARD WILMOT
GREAT AMERICAN INSURANCE
DEEPWATER
 Proposed – elimination of Limitation of Liability
 Proposed – doubling vessel statutory Pollution
Liability limits
 Proposed – elimination of DOHSA
LIMITATION OF LIABILITY ACT
 1851 – PURPOSE WAS TO ENCOURAGE GROWTH
OF AMERICAN SHIPPING
 LIMITS LIABILITY TO THE VALUE OF VESSEL AND
FREIGHT PENDING
 NEGLIGENCE OR UNSEAWORTHY STATE OF
VESSEL MUST BE BEYOND PRIVITY AND
KNOWLEDGE OF OWNER OR MASTER
 REALITY – LIMITATION DIFFICULT TO ACHIEVE
BUT IT ALLOWS NUMEROUS CASES TO BE
CONSOLIDATED INTO ONE JURISDICTION
DEATH ON THE HIGH SEAS ACT
 Jones Act and DOHSA do not allow for non-pecuniary
damages including loss of love and affection, predeath pain and suffering, punitive damage, mental
anguish, etc.
 On the other hand – Maritime workers are extremely
well protected by the Jones Act which has a low bar to
establish responsibility – extending coverage would
have a major impact on P&I rates
Pollution Statutory Limits
 Unlimited Liability – if you cannot quantify a loss –




you cannot insure it
Good case for increasing limits on Drilling – but need
to be careful not to drive out smaller operators
Vessel spills are quantifiable and limited by vessel size
Current methodology has worked well differentiating
by vessel type and size
To date – all spills have been addressed with in the
limits of insurance available
TWO COMPONENTS OF
ENVIRONMENTAL LEGISLATION
 COMPENSATION
 DETERRENCE
COMPENSATION
 Vessel may perish – Liability attaches to vessel “in rem”
 Damage caused by vessels carrying large quantities of






oil may exceed vessel value
Case in Point – Torrey Canyon - 1967
Cleanup in excess of $392M
No P&I cover for pollution
Total liability of $100 under a remote British law
Insurance Industryresponded by providing coverage
Shipping Industry responded – Topia, Scopia and
othercompensation regimes
Bunker convention
 In effect Nov. 2008
 Impacts dry cargo vessels over 1000 GRT
 Presently 27 signatory nations
 Blue card required if your vessel is registered in these
nations or trading there
 Panama is signatory
Nairobi International convention
on the Removal of Wrecks
 Adopted May 2007
 First set of uniform Intl. rues to ensure wrecks located
beyond the territorial sea are identified, marked and if
necessary, removed
 Still awaiting ratification by 10 states
 In the USA NOAA using research funds from the
NPTF to identify WW II wrecks
 States trying to force removal in Pollution incidents –
particularly west coast
Deterrence
 Traditionally the master deemed to be the alter ego of
the vessel due to the long voyages and poor
communication with owners
 Obviously now there is constant communication with
owners, managers, charterers
 These entities are now being enjoined into legal
actions
FRANCE
 Feb. 2004 – Loi Perben in effect
 Extends the concept of individual criminal liability for
pollution beyond the Master to owners, managers and
others
 Ships are being intercepted under this act, brought
into French ports on suspicion of pollution and face
fines and jail sentences even on flimsy evidence
ERIKA III Package and Directives
 Adopted Sept. 2005 – in effect as domestic law of EU
April 2007
 Stipulates sanctions against ship-owner, Master, cargo
owner, Classification society, or any other person for
even unintentional ship-source pollution – and makes
it a criminal offence if committed with intent –
negligently or recklessly
 Conveniently omits port authorities
 Unfortunately includes salvors – which may delay
response
CHINA
 Regulations of Prevention and control of Ship-Induced





pollution of the Marine environment
China Maritime Safety Authority- gov’t. body charged
with preventing and controlling pollution
Can detain offending ship – “Cofr” rules not yet
determined
Emergency Response plans
Compulsory insurance over 1000GRT
Fines - $1500-$75,000
USA
 Vessels and crews routinely seized and prosecuted
criminally and civilly under OPA
 DOJ utilizes threat of criminal prosecution to obtain
civil settlements
 Under OPA this extends to owners, directors,
managers and charterers
ON THE HORIZON
 HNS CONVENTION – Hazardous and Noxious
substances
 Created 1996 – not yet in effect
 Marpol Annex VI (due 2015 but in effect in USA &
Canada 2012) – Pre-empted by California