Abstract
Maritime casualties can affect both human life and the protection of the environment. The United Nations Convention on the Law of Sea binds States to effectively exercise their jurisdiction and control in administrative, technical, and social matters over ships flying their flag, conforming to generally accepted international regulations, procedures, and practices. International rules related to maritime accidents are also found in a number of specific treaties adopted at either the world or the regional level and relating to both the prevention of accidents and compensation of damage if an accident has taken place. The paper focuses on the 2010 incident caused by the explosion of the Deepwater Horizon platform in the Gulf of Mexico.
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Notes
- 1.
Hereinafter, UNCLOS.
- 2.
The exception is pollution from dumping, which is defined as the deliberate disposal of wastes or other matters at sea.
- 3.
Namely the seabed subject to the regimes of maritime internal waters, the territorial sea and the continental shelf, as defined in the UNCLOS.
- 4.
On a serious incident that occurred in 1979 during offshore activities on the continental shelf of Mexico see Badenes Casino 2005, 65.
- 5.
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Deep Water, The Gulf Oil Disaster and the Future of Offshore Drilling, Recommendations, 2011, vi.
- 6.
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Deep Water, The Gulf Oil Disaster and the Future of Offshore Drilling, Report to the President, 2011, 115.
- 7.
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Recommendations op. cit. n. 5, vii.
- 8.
The GCCF does not pay claims brought by the government. The latter sends periodical bills to BP and other responsible parties and is reimbursed by them for response and recovery operations.
- 9.
‘The United States Department of Justice sent a letter to Feinberg [= the GCCF Claims Administrator] on September 17, 2010, urging expediency. In response, the Claims Facility noted that the large number of fraudulent and undocumented claims have slowed the process’ (ibid. 49).
- 10.
The District Judge has set the trial date in February 2012.
- 11.
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Recommendations op. cit. n. 5, vii.
- 12.
Ibid. viii.
- 13.
Ibid. 57.
- 14.
Ibid. 50. The American supertanker Exxon Valdez ran aground in 1989 in the waters off Alaska. .
- 15.
Ibid. 45.
- 16.
Ibid. 45.
- 17.
Ibid. 45.
- 18.
Ibid. 46.
- 19.
‘Legislative attempts to raise the cap and financial responsibility requirements to significantly higher levels have been met with the argument that these changes will cause insurance carriers to drop oil pollution coverage, leading to an exodus of small and independent companies from the offshore drilling market. The counter-argument is that oil companies should bear the social costs of their activities, and if those costs are too large or unpredictable to be insurable, then it is appropriate that these companies exit the market. There is legitimacy to aspects of both arguments. A company should not be able to cause billions of dollars of damage and walk away, simply because its operations contribute to the economy of the Gulf. Nor should smaller companies that can demonstrate the ability to drill safely and to pay for damages resulting from a large spill be forced out of the market. However, smaller companies that cannot demonstrate financial responsibility and meet risk requirements set and monitored by the Department of the Interior or a third party should not be allowed to make others pay for the costs of their accidents’. (ibid. 47).
- 20.
‘One option for keeping competent independents in the market is a mutual insurance pool. Under such an arrangement, individual companies engaged in offshore drilling would pay premiums into a pool, which would pay out damages caused by a company as a result of a spill. A possible downside is that the mutual pool could have the effect of undercutting incentives individual firms might otherwise have to improve safety practices—but this problem could be addressed, for example, by tying premium levels to the financial and safety risk posed by an individual company’s activities. This option would allow companies to demonstrate financial responsibility for the cost of spills, at least to the limit paid out by the pool’. (ibid. 47). .
- 21.
‘Another option would be to phase in increases in the liability cap and financial responsibility requirements, which would allow the insurance industry a period of adjustment. Although any increase in liability limits and financial responsibility requirements would test the capacity of the offshore drilling insurance market, over time such a change would almost certainly stimulate an increase in insurance capacity. A phased-in approach would allow Congress to re-assess any concerns about limited capacity in the insurance industry in light of actual experience’ (ibid. 47).
- 22.
‘Finally, regardless of how insurance is provided, smaller firms could be encouraged to partner with firms with greater financial resources. It should be noted that ‘joint ventures’ between larger and smaller companies already exist; thus a policy change may not be necessary to encourage such arrangements’ (ibid. 47).
- 23.
Ibid. 49.
- 24.
Foley 2001, 515. .
- 25.
However, ‘where the operator is a State Party, the operator shall not be required to maintain insurance or other financial security to cover its liability’ (Article 8 para 5).
- 26.
Hereinafter: Barcelona Conv.
- 27.
Hereinafter: Offshore Prot. The adoption of appropriate measures in this field is envisaged by Article 7 of the Barcelona Conv. The Offshore Protocol is the result of preparatory works which have lasted for several years and were carried out on the basis of a project drafted by the International Juridical Organization for Environment and Development (IJO), a non-governmental organization having its seat in Rome. See Treves 1978, 827; Sersic 1989, 161; Scovazzi 1995, 543.
- 28.
It is composed of a preamble and 32 articles, distributed in six sections relating to the following matters: General provisions; Authorization system; Wastes and harmful or noxious substances and materials; Safeguards; Co-operation; Final provisions. Seven annexes and an appendix complete the instrument.
- 29.
The activities to which the Protocol applies are defined in quite broad terms by Article 1.d: ‘(i) Activities of scientific research concerning the resources of the seabed and its subsoil; (ii) Exploration activities: Seismological activities; surveys of the seabed and its subsoil; sample taking; Exploration drilling; (iii) Exploitation activities: Establishment of an installation for the purpose of recovering resources, and activities connected therewith; Development drilling; Recovery, treatment and storage; Transportation to shore by pipeline and loading of ships; Maintenance, repair and other ancillary operations’.
- 30.
These obligations are to be understood in the sense that parties are bound to take the appropriate measures in order to ensure that the operators comply with the provisions of the Offshore Prot.
- 31.
According to Article 2 para 1, the Offshore Prot. applies to the seabed under any legal condition, be it the continental shelf or the seabed under the territorial sea or the internal maritime waters. The Parties may also extend its application to wetlands or coastal areas (Article 2 para 2). .
- 32.
Under Article 12 of the original 1976 text Barcelona Conv. ‘the Contracting Parties undertake to co-operate as soon as possible in the formulation and adoption of appropriate procedures for the determination of liability and compensation for damage resulting from the pollution of the marine environment deriving from violations of the provisions of this Convention and applicable protocols’. After the amendments of 2005, the corresponding Article 16 of the present Barcelona Conv. provides as follows: ‘The Contracting Parties undertake to cooperate in the formulation and adoption of appropriate rules and procedures for the determination of liability and compensation for damage resulting from pollution of the marine environment in the Mediterranean Sea Area’.
- 33.
ICJ Rep. 1969, para 85 of the judgment.
- 34.
The attitude of the European Union, at least as far as the European Commission and the European Parliament are concerned, has today changed (see infra Sect. 13.5).
- 35.
Scovazzi 2009, 183.
- 36.
The adjective ‘traditional’ simply means that there is no discussion that this kind of damage can be compensated under well established general principles of law, which have existed for hundreds, if not thousands, of years in the legislation of most countries.
- 37.
A similar approach is followed, inter alia, in the 1996 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, in the 1999 Protocol on Liability and Compensation for Damage Resulting from Transboundary Movements of Hazardous Wastes and their Disposal and in the 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage.
- 38.
The term ‘natural resources’ is defined as including ‘land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States (including the resources of the exclusive economic zone), any State or local government or Indian tribe, or any foreign government’ (s. 1001, 20).
- 39.
Official Journal of the European Union No L 143 of 30 April 2004.
- 40.
Interim losses are defined in the Directive as ‘losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological functions or provide services to other natural resources or to the public until the primary or complementary measures have taken effect. It does not consist of financial compensation to members of the public’. (Annex II, para 1, sub-para d).
- 41.
The Commission (decision 7 of 1991) allowed compensation for losses or expenses resulting from ‘(a) Abatement and prevention of environmental damage, including expenses directly relating to fighting oil fires and stemming the flow of oil in coastal and international waters; (b) Reasonable measures already taken to clean and restore the environment or future measures which can be documented as reasonably necessary to clean and restore the environment; (c) Reasonable monitoring and assessment of the environmental damage for the purposes of evaluating and abating the harm and restoring the environment; (d) Reasonable monitoring of public health and performing medical screenings for the purposes of investigation and combating increased health risks as a result of the environmental damage; and (e) Depletion of or damage to natural resources’.
- 42.
Doc. S/AC.26/2005/10 of 30 June 2005.
- 43.
Ibid. para 55.
- 44.
Ibid. para 56.
- 45.
Ibid. para 58.
- 46.
Ibid. para 80.
- 47.
Ibid. para 451.
- 48.
Sands 2003, 884.
- 49.
Under the Directive, operators who carry out certain dangerous activities, as listed in Annex III, are strictly liable (without fault) for environmental damage. Operators carrying out other occupational activities are liable for any fault-based damage they cause to nature. Operators may benefit directly from certain exceptions and defenses (for example force majeure, armed conflict, third party intervention) and defenses introduced via transposition (for example permit defense, state of the art defense). Operators have to take preventive action if there is an imminent threat of environmental damage. They are likewise under an obligation to remedy environmental damage once it has occurred and to bear the costs (polluter-pays principle). In specific cases where the operators fail to do so, or are not identifiable, or have invoked defenses, the competent authority may carry out the necessary preventive or remedial measures.
- 50.
Para 63. The Norwegian relevant legislation also includes the Petroleum Activities Act No. 72 of 29 November 1996.
- 51.
Article 14.
- 52.
Doc. COM(2010) 581 final of 12 October 2010.
- 53.
Ibid. 4.
- 54.
‘The competent authorities judged that the most difficult issues were the complex technical requirements linked to the economic evaluation of damaged resources/services and environmental remediation methods, as well as the lack of binding thresholds for key terms such as ‘significant damage’. However, Member States have started to develop guidelines and are building up their knowledge based on these questions’. (Ibid. 5).
- 55.
Ibid. 6.
- 56.
Ibid. 7.
- 57.
Ibid. 8.
- 58.
Ibid. 8. In particular ‘No financial security system, be it insurance, bank guarantee or a trust fund, will provide unlimited liability. Therefore, ceilings apply both to voluntary and mandatory financial security mechanisms. A ceiling for the financial guarantee could be introduced where the risk of damage occurring above that ceiling is considered as low, and depends on the location, type and size of the operation. Spain introduced ceilings to the liability cover their operators need of up to a maximum of € 5 million. In other countries ceilings are arranged between insurers and operators. Insurance companies can also introduce ceilings to the liabilities they wish to cover, subsequently setting limits to the premiums to be paid but also in the coverage that their guarantee provides. The previous ceilings apply when determining the maximum coverage of the policies. In practice, there are also reimbursement ceilings of ELD policies, which currently range between € 1 million and € 30 million’.
- 59.
Ibid. 10. On the Gulf of Mexico incident see supra Sect. 13.2.
- 60.
Ibid. 11.
- 61.
Preamble.
- 62.
Para 14.
- 63.
Para 14.
- 64.
Doc. COM(2010) 560 final of 12 October 2010.
- 65.
‘The number of offshore installations in the North East Atlantic alone exceeds 1,000. Furthermore, while installations in the Black and Baltic Seas still only amount to single digits, there are currently over 100 installations operating in EU waters in the Mediterranean and plans to start new exploration are reported in the Maltese and Cypriot sectors. Oil and gas exploration or production also takes place in the close vicinity of the EU, off the coasts of Algeria, Croatia, Egypt, Israel, Libya, Tunisia, Turkey and Ukraine’. (ibid. 2).
- 66.
‘The European offshore oil and gas industry has not been immune to severe accidents in the past, as the Piper Alpha and Alexander Kielland in the North Sea have shown. As a result, a number of European countries have introduced in recent years strict safety requirements and regulatory regimes. Yet the experience of the Deepwater Horizon needs to lead to sincere reflection also in Europe on whether the current regulatory frameworks and practices are adequate in terms of safety and emergency preparedness and response. Such a reflection is also warranted by the transformation of the European oil and gas industry in response to the progressive depletion of ‘easy’ oil and gas reservoirs. Exploration is moving towards more complex environments characterised by high pressure/high temperature reservoirs, deeper waters and/or extreme climatic conditions that may complicate the control of subsea installations and incident response. At the same time, production facilities in maturing fields are ageing and often taken over by specialist operators with smaller capital bases’. (ibid. 3).
- 67.
‘The EU has an interest in maintaining indigenous oil and gas production for security of energy supply reasons as well as for keeping jobs and business opportunities in the European economy. Whilst risks cannot be totally eliminated in most human activities, including in the offshore hydrocarbon industry, the safety and integrity of operations and assurances of maximum protection of European citizens and the environment must be guaranteed’. (ibid. 3).
- 68.
Ibid. 4.
- 69.
‘Improving the safety of citizens and the protection of the environment cannot rely on industry's discretionary initiative and self-regulation alone. The regulatory regime must ensure that industry complies with clear, robust and ambitious rules allowing only safe and sustainable operations. In addition, the regime must provide for a high level of transparency enabling the industry and public authorities to demonstrate to any interested party that activities that carry risks to life, environment or property are appropriately managed and controlled’. (ibid. 4).
- 70.
‘While international regimes for offshore oil and gas operations are either not fully developed or lack effective enforcement mechanisms, the situation in Europe is largely determined by provisions in the national legislation of individual Member States, as EU legislation either does not cover various relevant aspects of the sector or provides only performance minima. Provisions which apply to offshore activities are also often spread across different EU legislative measures. This results in licensing, operational safety and environmental protection regimes which vary from one Member State to the next. This heterogeneity complicates the understanding and management of health, safety and environmental risks in Europe and increases costs for companies. Importantly, it risks slowing down coordinated response to accidents affecting several Member States as technical standards, data formats and response procedures vary across Europe and within the same sea basin’. (ibid. 4).
- 71.
Ibid. 4.
- 72.
Ibid. 6.
- 73.
Ibid. 12.
- 74.
Doc. COM(2011) 688 final of 27 October 2011. According to the subsidiarity principle, the need for legislative action at the European Union level is explained as follows: ‘Companies operate and drilling rigs like Deepwater Horizon are being moved across borders but face very different regulatory regimes along the lines of national jurisdictions. Recent reactions of the Member States suggest, that without Union action these differences are going to exacerbate as countries mainly only in the most advanced regions individually plan improvements while international initiatives make very slow progress. Moreover, without Union action, existing difficulties for comparing industry performance and sharing of intelligence and incident data will remain. Action by Member States alone would be inadequate to achieve consistent protection (including liability for pollution) of the environment, a common good, a commitment of the Union and its Member States as per the Marine Strategy Framework Directive’. (ibid. 10). The instrument lastly quoted is Directive 2008/56/EC of 17 June 2008, establishing a framework for Community action in the field of marine environmental policy. .
- 75.
Ibid. 2.
- 76.
Ibid. 10.
- 77.
‘There are considerable disparities and fragmentation amongst Member States' laws and practices applying to offshore activities (e.g., licensing, liability provisions, equipment safety standards, public transparency and information sharing). This reflects the virtual absence of international law instruments and gaps in relevant Union law’. (ibid. 3).
- 78.
The others are to ‘1. Ensure a consistent use of best practices for major hazards control by oil and gas industry offshore operations potentially affecting Union waters or shores; 2. Implement best regulatory practices in all European jurisdictions with offshore oil and gas activities; 3. Strengthen Union's preparedness and response capacity to deal with emergencies potentially affecting Union citizens, economy or environment’. (ibid. 3).
- 79.
Ibid. 6.
- 80.
Ibid. 5.
- 81.
Article 7.
- 82.
Preambular para 48.
- 83.
Article 28 paras from 1 to 3.
- 84.
As regards the OPOL see infra Sect. 13.6.
- 85.
Paras from 69 to 79.
- 86.
Para 80.
- 87.
Para 83.
- 88.
The UNEP Guidelines are annexed to the Nusa Dua Declaration.
- 89.
‘The term “environmental damage” means an adverse or negative effect on the environment that: (a) Is measurable taking into account scientifically established baselines recognized by a public authority that take into account any other human-induced variation and natural variation; (b) Is significant, which is to be determined on the basis of factors such as: (i) Long-term or permanent change, to be understood as change that may not be redressed through natural recovery within a reasonable period of time; (ii) Extent of the qualitative or quantitative changes that adversely or negatively affect the environment; (iii) Reduction or loss of the ability of the environment to provide goods and services, either of a permanent nature or on a temporary basis; (iv) Extent of any adverse or negative effect or impact on human health; (v) Aesthetic, scientific and recreational value of parks, wilderness areas and other lands’. (Guideline 3.3).
- 90.
As explained in the commentary to the UNEP Guidelines, ‘in addition, as regards environmental damage, domestic legislation might acknowledge such loss as being an intrinsic part of any approach to comprehensive legislation on liability, response action and compensation for environmental damage. Should domestic legislation incorporate such a comprehensive focus, domestic law might also put in place an appropriate mechanism for the assessment or valuation of compensation as a result of the loss of the use of the natural resources concerned’. (doc. UNEP/GCSS.XI/INF/6/Add.2 of 19 January 2010, 2).
- 91.
Guideline 5 paras 1 and 2.
- 92.
Guideline 11 paras 1 and 2.
- 93.
‘Liability pursuant to guideline 5, para 1, may be limited in accordance with criteria established under any applicable domestic classification scheme for activities dangerous to the environment. (…) There should be no financial limit on liability arising under guideline 5, para 2’. (Guideline 10 paras 1 and 3).
- 94.
Guideline 10 para 2.
- 95.
See OSPRAG, Strengthening UK Prevention and Response—Final Report, September 2011.
- 96.
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Scovazzi, T. (2012). Maritime Accidents with Particular Emphasis on Liability and Compensation for Damage from the Exploitation of Mineral Resources of the Seabed. In: de Guttry, A., Gestri, M., Venturini, G. (eds) International Disaster Response Law. T.M.C. Asser Press, The Hague, The Netherlands. https://doi.org/10.1007/978-90-6704-882-8_13
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