Shipowners face strict liability for oil pollution

Strict liability for oil pollution damage and the costs of oil pollution prevention measures is to be imposed for the first time on owners of ships other than laden oil tankers. The measure is being introduced via a Private Member's Bill with full support from the Government, which has also promised to explore how voluntary groups which assist in oil spill clean-ups may have their costs reimbursed.

The new liability provisions were inserted in the Merchant Shipping (Salvage and Pollution) Bill during Report stage in the House of Commons on 15 April. The Bill was introduced by David Harris (Con, St Ives), although it has been drafted by the Department of Transport (DTp).

In its original form, the Bill would only have implemented several international agreements on marine pollution. The most important of these provide for salvors to be reimbursed for the cost of operations which prevent or mitigate marine pollution even where there is little hope of rescuing a stricken ship, and raise the ceilings on compensation for oil pollution damage under two international funds (ENDS Report 229, pp 28-29 ).

A new clause introduced by Mr Harris at Report stage will amend the Merchant Shipping (Oil Pollution) Act 1971 and the Merchant Shipping Act 1988. The amendments provide that where, "as a result of any occurrence", oil is discharged from or escapes from a ship other than a laden oil tanker, the owner will be liable for any damage, for the cost of measures "reasonably taken" after the discharge or escape to prevent or minimise damage, and for any damage caused by those measures.

The amendments also provide that the owner will be liable for the costs of pollution prevention measures, and any damage these may cause, where they are taken to avert a "grave and imminent threat" of oil pollution.

The amendments go on to provide that a shipowner's liability for any "impairment of the environment" caused by an oil pollution incident will extend only to any resulting loss of profits and the cost of "reasonable measures of reinstatement actually taken or to be taken." Direct compensation for damage to the unowned environment is thus excluded.

Explaining the purpose of the amendments, Mr Harris pointed out that at present "there is a clear anomaly in the treatment of different kinds of vessels. Only owners of laden oil tankers are strictly liable for marine pollution from oil spillages, but other ships can also pose a threat of oil pollution."

Several such incidents have in fact occurred in recent months. The most serious followed the grounding of a Russian fish processing vessel off Lerwick harbour in the Shetlands last November. The DTp's Marine Pollution Control Unit removed 600 tonnes of fuel oil from the wreck at a cost of £650,000. Other incidents since February last year have involved 1,500, 22 and 20 tonnes of fuel oil. The new liability provisions would enable the MPCU to claim its expenses in recovering bunker fuel and taking steps to minimise the effects of a release from the owner.

Welcoming the amendments, Transport Minister Steven Norris commented that this is a case where there is an "overwhelming public interest" to justify the introduction of strict liability. Some 20-30 incidents around the UK coast each year may be subject to the new regime. Strict liability for spills of bunker fuels has already been introduced in Scandinavia, the Netherlands and the USA.

As at Committee stage, Labour's spokeswoman on shipping, Joan Walley, urged the Government to consider ways of assisting voluntary groups which rescue wildlife casualties and help with clean-up operations in the aftermath of oil spills. At present they cannot recover their costs if a liable party cannot be identified, and Ms Walley had proposed in Committee that the Government should take a discretionary power to reimburse their expenses.

Mr Norris had responded by arguing that such an arrangement would conflict with the "polluter pays" principle, and involve significant sums of public money. But by Report stage he had changed his tune.

It is not good practice, the Minister said, to allow organisations to make retrospective claims for costs without authorisation. "It is quite clear that, if we are to work in such circumstances, there must be notional authorisation in advance of the work. Almost of necessity, the work to be carried out cannot be described precisely, but we can at least set the contractual arrangements between the parties in a proper context."

So "while the general principle will be that charities will respond from resources raised by public subscription to the demands and challenges that such incidents present, that is not to say that the Government would not wish fully to discharge their own obligations and employ whatever agencies were appropriate."

There is thus a real possibility that wildlife charities will be able to claim compensation from the public purse if the work they carry out after an oil pollution incident is within a framework agreed in advance with the Government. Mr Norris was unable to give an explicit commitment to introduce such arrangements - perhaps because Treasury objections remain to be overcome - but promised to continue discussions on the issue as the Bill proceeds through Parliament.

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