International Environmental law

Oil Pollution and International Environmental Policy

Srinivas Atreya - 519

10/8/2011

Introduction

Environmental pollution is here to stay for good. The modern way of living has allowed the threat of

the occurrence of environmental pollution at anytime become more than ever before apparent and

part of our everyday routine. Consequent to the occurrence of environmental pollution, a liability

regime also arises. It is widely acknowledged that the globalization of environmental risk poses a

mounting challenge to policy makers and that, nevertheless, the rules of responsibility for harm

production remain underdeveloped. In spite of the negotiation and implementation of numerous

international environmental agreements, those agreements lack detailed provisions stipulating the

responsibility of state and non state actors for environmental damage. This lack relates to the

means of estimating the owed liability for environmental harm across national boundaries. While

multilateral environmental treaties stipulate that signatory parties should act in accordance with

the principle of state responsibility for environmental damage, the nature of liability and

compensation provisions are not prescribed1. Also, state practice worldwide reveals a widespread

reluctance to pursue environmental liability through inter-state claims and a preference for

increasing the importance of private liability attached to operators of risk- bearing activities as the

main mechanism for progressing environmental liability. This move towards a compensation

regime regarding liability for environmental damage, driven by private actors has made civil

liability treaties the preferred vehicle for rule development in this area2. This approach is more so

relevant in the case of international shipping and oil exploration which in its essence transcends

international borders. Also, relevant is the fact that these two activities are a major source of

concern for the environment and are major factors contributing to the depletion of the environment

especially of marine environments. The impact and effect of numerous shipping and oil rig

accidents over the past decades resulting in massive oil spills have had disastrous consequences

over marine ecology. In light of the recent Deepwater Horizon incident in the Gulf of Mexico has set

the alarm bells ringing and the need for a more stringent and effective international environmental

policy has been felt.

1 The 1972 Convention on International Liability for Damage Caused by Space Objects remains one of the few treaties with explicit state liability obligations – rules which supported a successful claim by Canada against the USSR for the clean-up of radioactive debris following the break-up of a Soviet satellite over Canadian territory in 1979 ; See, Mason, M., Transnational Compensation for Oil Pollution Damage: Examining Changing Spatiality’s of Environmental Liability, LSE Research Papers in Environmental and Spatial Analysis (RPESA), no. 69. Department of Geography and Environment, London School of Economics and Political Science, London, 2002, pp. 1-3.2 Mason, M., Transnational Compensation for Oil Pollution Damage: Examining Changing Spatiality’s of Environmental Liability, LSE Research Papers in Environmental and Spatial Analysis (RPESA), no. 69. Department of Geography and Environment, London School of Economics and Political Science, London, 2002, pp. 1-3.

To begin with, the environmental impact of shipping mainly includes greenhouse gas emissions and

oil pollution. While, Carbon dioxide emissions from shipping is currently estimated at 4 to 5 percent

of the global total, it is estimated by the International Maritime Organization (IMO) to rise by up to

72 percent by 2020 if no action is taken. Oil pollution is another major and possibly a far greater

concern from the shipping and petroleum industry for marine ecology and of all potential

environmental catastrophes, oil pollution is one of the most deadly to the environment and also one

of the most prevalent toxic substances in the oceans.3

Ever since the 19th century, there had the been concern of water pollution but the tremendous

increase in oil consumption after World War II brought the matter of oil pollution to the forefront.

The huge increase in exported oil was, and still is, carried mostly by sea.4 Petroleum is the most

transported base product in the world and it represents more than 35% of all the merchandises

carried by the sea. This is mainly due to the vast geographical distance between production and

reception places and the huge need of petroleum or its by-products for the economy and ordinary

life in every country. To understand the magnitude and extent of the industry, we can take into

context the European Union (EU) which imports 27% of the production of the world of which 90%

of this kind of trade is maritime, 70% of it being in the Atlantic Ocean. As a consequence, 1500 oil

tankers navigate European waters every year, although they are usually registered under a foreign

flag, Liberia, Panama, Bahamas or Malta being the most common5. Although the oceans have a huge

capacity for self-purification, it is being exceeded by a number of pollutants, especially oil.6 It is

estimated that thirty five million tons per year are deliberately or accidentally poured into the

oceans, half from land based sources, and most of the rest from shipping. The Baltic and

Mediterranean Seas are of special concern, being almost completely enclosed. As Dellapenna writes:

“One can look to the Mediterranean…despoiled by nearly every coastal state and despite high-

sounding agreements to protect the sea, continues to deteriorate with little being done to correct

the situation.”7

In his book “The Petroleum”, Daniel Yergin points out that the history of the oil industry was a

“history of greediness, money and power”, in this order. In fact, from an environmental perspective,

3 DOUGLAS BRUBAKER, MARINE POLLUTION AND INTERNATIONAL LAW—PRINCIPLES AND PRACTICE 11 (1993). See also John Vogler, THE GLOBAL COMMONS--A REGIME ANALYSIS 59 (1995) (maritime transport and dumping accounts for 10% each of total pollution of the seas).4 M’Gonigle and Zacher, supra n. 4 at 14.5 All of which are well known as “flag of convenience” States, which offer more permissive environmental, safety and / or labor laws to ship owners)6 ALEXANDRE KISS AND DINAH SHELTON, INTERNATIONAL ENVIRONMENTAL LAW 435 (2nd ed. 2000).7 Joseph W. Dellapenna, the Internet and Public International Law: Law in a Shrinking World: The Interaction of Science and Technology with International Law, 88 Ky. L.J. 809 at 849 (2000).

the result was an industry sector with none or very little care for the environment up to the 60’s.

While there seemed to be some improvement in the 70’s and 80’s, it was only in the 90’s that

industry started trying to incorporate the concept of “Sustainable Development”, however even

without a full understanding of what that really meant. All the same, regarding environmental

concerns, the oil industry just follows very familiar statements in the course of the economical

development, as any significant changes in behavior, mentality and legislation only occur, in an

effective way, after a major disaster illustrating the prevalence of the “a posteriori” logic. In essence,

The outcome as new environmental regulations, new operational procedures, environmental

consciousness, preparedness and response capacity, appear or are created promptly,

demonstrating that have always been achievable but latent, with no political or internal force to

prevail by themselves.

Effect of Oil Spills on the Environment

Oil pollution comes from a variety of sources the most common of which are vessel-based;

exploitation of the sea-bed; land-based pollution, and deliberate dumping; out of which vessel

based and offshore drilling or oil rigs contribute to the majority of the pollution and of which a third

of all pollution flows from offshore drilling. In 1973, it was estimated that three million tons of oil

went into the oceans from routine tanker operations, such as flushing out ballast water that is

pumped into the ship once the oil is off-loaded. Most of the oil from accidental discharge results

from structural failures, groundings, and collisions. While structural failures account for more

volume of oil, the discharges from groundings and collisions wreak more havoc, in that they usually

occur closer to shore. M’Gonigle wrote in 1973: “Interestingly, thirty percent of all collisions occur

in the very congested English Channel and another forty percent in the North Sea, Baltic Sea, and

other waters surrounding Western Europe.” Navigational errors accounted for the Torrey Canyon

and Argo Merchant incidents, two dramatic losses provoking great impetus to international efforts

to control oil pollution. However, the most recent Deepwater Horizon incident which was an

offshore drilling site happens to be the largest oil spill disaster in human history till date.

The affects of oil spills on humans are virtually unknown, and research has yet to prove lingering

effects on fish populations. It is admitted that knowledge of the effects of oil in the oceans is

“rudimentary and fragmentary.” However, there is clear evidence of other harm: “[o]f all the

adverse effects of oil pollution, the most pathetic is the destruction of wildlife and their habitats . . ..

It has been estimated that chronic oil pollution in the North Sea and North Atlantic alone kills a

staggering total of between 150,000 to 450,000 birds every year.” Just as devastating is the affect on

lower forms of life, closer to the bottom of the food chain. Studies have shown that a spill can kill

half of the phytoplankton and can disrupt entire populations of invertebrates, (snails, crabs, soft

shell clams), for six to eight years. Mangroves, nature’s coastal protector and a source of food for

invertebrates and vertebrates, are killed and do not recover from contact with oil. The resultant

damage to fishing and tourism cannot be discounted.

Depending on timing and location, even a relatively minor spill can cause significant harm to

individual organisms and entire populations. Oil spills can cause impacts over a range of time

scales, from days to years, or even decades for certain spills. Impacts are typically divided into acute

(short-term) and chronic (long-term) effects. Both types are part of a complicated and often

controversial equation that is addressed after an oil spill: ecosystem recovery.

Acute Impacts

Depending on the toxicity and concentration of the spill, acute exposure to oil spills can kill various

organisms and cause the following debilitating (but not necessarily lethal) effects. Birds, marine

mammals, bottom-dwelling and intertidal species, and organisms in their developmental stages—

e.g., fish eggs and larvae—are particularly vulnerable to oil spills. In addition to the impacts to

individual organisms, oil spills can lead to a disruption of the structure and function of the

ecosystem. Certain habitats—such as coral reefs, mangrove swamps and salt marshes—are

especially vulnerable, because the physical structure of the habitats depends upon living organisms.

These potential acute effects to individual organisms and marine ecosystems have been

“unambiguously established” by laboratory studies and well-studied spills, such as the Exxon

Valdez.

Chronic Impacts

Long-term, chronic exposure typically occurs from continuous oil releases—leaking pipelines,

offshore production discharges, and non-point sources (e.g., urban runoff). Although spills are

normally associated with acute impacts, some oil spills have also demonstrated chronic exposure

and effects. There is increasing evidence that chronic, low-level exposures to oil contaminants can

significantly affect the survival and reproductive success of marine birds and mammals. However,

because of the complexity of factors, including a longer time period and presence of other

pollutants, determining the precise effects on species and ecosystems due to chronic oil exposure in

a particular locale is difficult for scientists. As a result, studies involving chronic effects are often

met with debate and some controversy. Oil spills also result in economic costs in terms of Clean up,

rehabilitation of natural resources and community costs.

Experience in the past has shown that unfortunate catastrophic events in the case of ships are likely

to occur, based on the aging, single hull tanker theory. The litany of calamities include The Torrey

Canyon, off the coast of Cornwall, 1967; the Argo Merchant, off the coast of Massachusetts, 1976;8

the Amoco Cadiz, off the northern coast of France, 1978; the Burmah Agate, Texas, 1979; the Puerto

Rican, San Francisco, 1984, the Avenus, Louisiana, 1984; the Exxon Valdez, 1989; the Erica, 1999;

and more recently the Prestige, Spain, 2002. An intensifying factor to the likelihood of another spill

is the flag-of-convenience issue, the practice of ship owners assigning to their vessels the

nationality of a state with the least safety regulations. Statistics show that vessels registered in

“flag-of-convenience” states have some of the worst accident records.

Adding insult to injury is the fact that owners of these vessels could essentially become judgment-

proof. The International Convention on Civil Liability for Oil Pollution Damage, (CLC), defines the

“owner” as the “person or persons registered as the owner of a ship, or in the absence of

registration, the person or persons owning the ship.”9 The significance of this definition lies in the

fact that the “operator,” the charterer, is usually in more control of the vessel than is the owner,

effectively creating a “straw man to answer for major maritime pollution.”10

Development of Standards of International Law relating to Oil Pollution

International rules for the protection of the marine environment are established under regional and

global treaties, and other international acts, and the rules of customary law are reflected in these

acts and non biding soft law obligations. Early international efforts addressed discharges of oil, and

can be traced back to the 1926 Preliminary Conference on Oil Pollution of Navigable Waters, held in

Washington. The first treaty to address oil pollution of the sea was the 1954 International

8 Lawrence I. Kiern, Admiralty Law Institute Symposium: Damages in Maritime Cases: Article: Environmental Damages Under Federal Law, 72 Tul. L. Rev. 693, 707.9 Id. See also International Convention on Civil Liability for Oil Pollution Damage, 1992, concluded at London, 27 November 1992, Art. I, (3) reprinted in GURUSWAMY, ET.AL., SUPPLEMENT OF BASIC DOCUMENTS TO INTERNATIONAL ENVIRONMENTAL LAW AND WORLD ORDER 877 (1999).10 L.F.E. Goldie, Environmental Catastrophes and Flags of Convenience—Does the Present Law Pose Special Liability Issues?, 3 Pace Y. B. Int’l L. 63 (1991) reprinted in Lakshman D. Guruswamy, Sir Geoffrey W.R. Palmer, Burns H. Weston, Jonathan C. Carlson, INTERNATIONAL ENVIRONMENTAL LAW AND WORLD ORDER—A PROBLEM ORIENTED COURSEBOOK 628, (2ND ed. 1999); Cf. Patricia W. Birnie and Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 290-91, (1992) (arguing that flag states might have strict liability, but no state practice exists to test this conclusion).

Convention for the Prevention of Pollution of the Sea by Oil, based on a draft text from the 1926

Conference. In 1959, IMCO (now IMO) Assembly assumed responsibility of the 1954 Oil Pollution

Convention and many of the UN’s functions in relation to oil pollution. Subsequent international

efforts were triggered by major oil spills including the Torrey Canyon in 1967 and Amoco Cadiz in

1978, Exxon Valdez in 1989. These and other subsequent incidents including the Prestige in 2002,

led to the adoption under IMO auspices of the 1969 Intervention Convention, the 1969 (later 1992)

CLC and the 1971 (later 1992) Oil Pollution Fund Convention, and the various amendments to

MARPOL 73/78. Following the Torrey Canyon accident, the UN General Assembly gave increased

attention to the protection of the marine environment and in 1969 adopted a resolution ‘Promoting

Effective Measures for the Prevention and Control of Marine Pollution” in context with the 1972

Stockholm Conference where it revived harmful substances and wastes that might affect human

health and marine environment. In 1973, the International Convention for the Prevention of

Pollution for Ships or MARPOL 73 was adopted under the auspices if the IMO. Subsequently, in

1976, UNEP established its Regional Seas Programme, which gave rise to over 30 regional treaties.

In 1982, the international community adopted the United Nations Convention on the Law of Sea

(UNCLOS)

The United Nations Convention on the Law of the Sea (UNCLOS)

The United Nations Convention on the Law of the Sea (UNCLOS) is the resulting Treaty from the

Third United Nations Conference on Law of the Sea (1973-1982) and it is probably the most recent

major development in international law governing the oceans, providing new universal legal

controls for the management of marine natural resources and also the control of pollution.

Although the economic aspects clearly prevailed, the UNCLOS also includes rules about ships

pollution in Part XII of the Convention in order to establish the States duties by declaring their

respective competences, trying to find the right balance between the needs of marine environment

protection and the freedom of navigation principle, but finally surrendering to the second. This

Convention establishes the general obligation to protect and preserve the marine environment and

its first section also contains provisions regarding the sovereign right of States to exploit their

natural resources, as well as measures to prevent, reduce and control pollution of the marine

environment, and the duty not to transfer damage or hazards or transform one type of pollution

into another and to control the use of technologies and the introduction of alien or new species. The

second section deals with rules about global and regional co-operation such as notification of

damages or exchange of studies and research. And the third and fourth sections contain,

respectively, provisions for technical assistance and monitoring and environmental assessment. But

the most important rules for this purpose are inside the fifth and sixth sections. The fifth section

provides the basis for the international rules and national legislation to prevent, reduce and control

pollution of the marine environment. It covers different kinds of pollution, but only the one in

article 211 (“pollution from vessels”) has interest here. This article establishes the general right for

States to make agreements on international rules and standards to prevent, reduce and control

marine pollution from vessels. It distinguishes between the flag States, the port States and the

coastal States. The former “shall adopt laws and regulations for the prevention, reduction and

control of pollution of the marine environment from vessels flying their flag or of their registry.

Such laws and regulations shall at least have the same effect as that of generally accepted

international rules and standards established through the competent international organization or

general diplomatic conference”. It is important to notice that those national provisions can be more

severe, but not less than the international rules and standards, such as those from international

organizations like IMO or ITO. Secondly, the States which establish particular requirements in this

matter as a condition for the entry of foreign vessels into their ports or internal waters shall give

due publicity to such requirements and shall communicate them to the competent international

organization. Finally, coastal States may adopt laws, firstly in the exercise of their sovereignty

within their territorial sea, for the prevention, reduction and control of marine pollution from

foreign vessels, including vessels exercising the right of innocent passage (but without hampering

that passage); and secondly, regarding their economic exclusive zones, laws for the prevention,

reduction and control of pollution from vessels, conforming to and giving effect to generally

accepted international rules and standards established through the competent international

organization or general diplomatic conference. However, to improve the international rules and

standards considered inadequate for certain areas of their economic exclusive zones, coastal States

must follow the rules provided in paragraph 6 of this article. The sixth section provides the

enforcement rules and it also distinguishes among the flag, port and coastal States. Also relevant to

oil spills is Article 235 (Section 9) which establishes the responsibility and liability of the States for

the fulfillment of their international obligations concerning the protection and preservation of the

marine environment. They shall be liable in accordance with international law. But, as the Prestige

accident clearly showed, it is doubtful whether this system works well. The main problem is that

the highest responsibility still remains with the flag States (Bahamas, in the case of the Prestige) to

provide better rules regarding maritime trade safety, while the Treaty leaves the coastal States in a

weak position, not allowing them to take effective measures, even if they know in advance that the

vessel does not fulfill their legal requirements. And although the Annex VI of the Treaty establishes

the International Tribunal of the Law of the Sea (nowadays settled in Hamburg), no convenience

flag State (i.e. those whose low regulation standards benefit the ship owners) has been sued in this

Court until now. This is why member Governments of the IMO realized that more effective States’

port control could be conducted by signing regional agreements and consequently nowadays

several of them are in force. It is hoped that this network of regional agreements will improve the

control of the vessels, although only a percentage of vessels will be controlled by them, not every

MOU has the same level of demands and not every State has the technological capability to enforce

them.

The International Convention for the Prevention of Pollution from Ships (MARPOL).

In 1948 the UN proposed to create an International Consulting Maritime Organization (today

known as IMO). The resulting convention entered into force on the 17th of March 1958. But in 1954

the United Kingdom had also organized an International Conference on Maritime Pollution, which

finished with the adoption of the International Convention for the Prevention of Pollution of the Sea

by Oil (OILPOL). Thus, on account of the subsequent entry into force of the IMO Convention, the

administration of the OILPOL was transferred from the United Kingdom Government to the IMO.

But less than ten years later, on 1967, the tanker Torrey Canyon sank in the English Channel,

spilling 120,000 tons of oil into the sea, the worst ecological incident recorded up to that time. This

was the main reason for the IMO to convene a new international conference in 1973 (while also

amending the OILPOL), resulting in the International Convention for the Prevention of Pollution

from Ships (MARPOL), the main international Treaty regarding of pollution of the marine

environment by vessels so far. MARPOL is the result of the combination of two different Treaties

adopted by the IMO on 2 of November 1973 and on 17 of February 1978 respectively [12]. It

currently includes six technical Annexes, but only the first (‘Regulations for the Prevention of

Pollution by Oil’) has interest here. The MARPOL Annex I has subsequently been amended and

updated, usually as a consequence of new accidents, such as that of the Prestige, and its evolution

can be summarized as follows

The 1973 Convention applied the same oil discharged conditions established in the OILPOL,

allowing operational discharges when: a) the total quantity of oil which a tanker may

discharge in any ballast voyage whilst under way must not exceed 1/15,000 of the total

cargo carrying capacity of the vessel;

The rate at which oil may be discharged must not exceed 60 liters per mile travelled by the

ship; and

No discharge of any oil whatsoever must be made from the cargo spaces of a tanker within

50 miles of the nearest land. It also required that an oil record book be kept and that the

maximum quantity of oil allowed to be discharged be reduced.

The Convention also imposed the LOT (“load on top”) washing system for tankers and recognized

certain “special areas” so vulnerable to pollution that oil discharges are absolutely forbidden there.

The Protocol of 1978 made a number of changes. For example, segregated ballast tanks (SBT) are

required on all new tankers of 20,000 dwt and above (in the parent convention SBTs were only

required on new tankers of 70,000 dwt and above) and they must be placed in a protected location.

The 1978 Protocol also introduced the COW (“crude oil washing”), so that tanks are washed with

the cargo itself. Drainage and discharge arrangements were also modified and regulations for an

improved stripping system were required along with stricter criteria for the survey and

certification of ships. The 1992 amendments to Annex I made it mandatory for new oil tankers to

have double hulls and it brought in a phase-in schedule for existing tankers to fit double hulls,

revised in 2001 and 2003. Subsequent amendments were also made in 2004

Despite all the amendments adopted, the regulation philosophy of the MARPOL remains quite

controversial. Firstly, because it seems that new rules are only introduced after a new accident. And

secondly, though linked with the first, the MARPOL tries to find the right balance between interests

that are in essence contradictory, i.e. the economical and the environmental. This is the reason why

MARPOL rules have at times been rejected by both environmental groups and the maritime trade

sector. The main example of this situation is the regulation of the phasing out of single hull tankers.

While the former claimed for an acceleration of that phase following the European example, the

latter pointed at various possibly negative consequences of the new measures, as they feared the oil

supply would be endangered by the new rules and that the tanker rates would rise. Moreover, they

said some safe single hull tankers would be hit by the phase-out unnecessarily. Obviously, double

hull tankers can offer a greater protection of the environment in case of certain types of accidents,

but a double hull does not offer an absolute guarantee, because if the collision is serious it is

possible that both hulls will be punctured. And facing that kind of accident, apparently there are

technical reasons that would make it easier to salvage a single hull rather than a double hull vessel.

So we can conclude that the requirement of a double hull should not rule out the need for other

environmental protection measures. And this is the way that future reforms of the MARPOL should

follow and some of the Possibilities include the recognition of new “special areas”; improving the

vessel traffic monitoring and information system, particularly inside the EEZ; intensifying

inspections of all ships; traffic separation schemes; and improving the work conditions, skills and

abilities of the ship staff.

Exxon Valdez and the (United States) Oil Pollution Act, 1990

One of the great products of work holism in the history of environmental law

is David Oesting and Brian O’Neill’s triumph in securing a five billion dollar

punitive damage award in the wake of the spill of the Exxon Valdez . . . They

did not let their single mindedness block out their critical “aha!” moment: for

[them] it was the discovery of the five billion dollar figure—an average year’s

net profit for Exxon.

One of the most definitive moments in environmental policy change can be attributed, rather

unfortunately to the Exxon Valdez disaster which until recently was the largest oil spill in the world

and also one the largest ecological disasters of all time.

On March 24, 1989, the Exxon Valdez, an oil tanker owned by the Exxon Corporation, carrying over

53 million gallons of crude oil bound for Exxon’s West coast refineries ran aground on Bligh Reef in

Prince William Sound, Alaska spilling around 10.8 million gallons of crude oil, the oil eventually

covering 11,000 square miles of ocean and 1300 miles of shoreline. The scale of damage was

unprecedented as the oil spill immediately killed between 250,000 to 500,000 seabirds, more than

1,000 sea otters, 300 harbor seals, 250 bald eagles, 22 orca whales, and billions of herring and

salmon eggs and even Today, twenty years after the spill, 26,000 gallons of oil remain

contaminating roughly six kilometers of shoreline. Of the thirty-one natural resources identified by

the Natural Resources Trustee as affected by the spill, ten have recovered during the last 20 years,

fourteen are still recovering, two have made no progress toward recovery (herring and pigeon

guillemot), and five lack sufficient data to determine the extent of recovery.

Subsequently, five separate sets of lawsuits arose out of the Exxon Valdez Oil Spill. The First being,

Exxon Shipping pled guilty to negligent discharge of pollutants under Clean Water Act (CWA)

section 309 as well as criminal violations of the Refuse Act and the Migratory Bird Treaty Act

(MBTA under which Exxon was fined $150 million, the largest fine ever imposed for an

environmental crime. Second, the federal and state governments of the United States sued Exxon

Shipping and Exxon under CWA section 311 and the Comprehensive Environmental Response

Compensation and Liability Act section 107, to recover damages to natural resources for which the

governments are trustees. In settlement of those civil claims, Exxon agreed to pay $900 million

with annual payments stretched over a 10-year period. Third, within two years of the accident,

Exxon settled the claims of various fishermen and property owners for $ 303 million. Fourth, a

class action involving tort claims against Exxon, Captain Hazelwood, and others by commercial

fishermen, Native Americans, and property owners resulted in a $ 5 billion jury verdict against

Exxon. Finally, the Captain of the ship Capt. Hazelwood was prosecuted by the State of Alaska for

operating a vessel while under the influence of alcohol and negligent discharge of duties. In all

Exxon had so far paid approximately $3 billion for the spill: $2 billion for cleanup activities and

$900 million in a civil settlement for natural resource damages. In June 2006, parties filed for an

additional $92 million for damages per a reopener provision in the civil settlement. On June 25,

2008, the Supreme Court ruled on punitive damages, an issue that had been in the court system for

more than a decade. The Court awarded damages of $507 million (a 2006 ruling from the U.S. Court

of Appeals for the 9th Circuit had set the damages at $2.5 billion—a 50% reduction from the

original, 1994 ruling).

However, the most significant outcome of the disaster nevertheless was the enactment of the Oil

Pollution Act, 1990 by the United States Congress. The act was enacted with the intent to

strengthen the safety and environmental practices in the offshore energy exploration and

production business, to create a system of so-called “financial responsibility laws”, and to place

limitations on liability. The main elements of the Oil Pollution Act include;

A comprehensive federal liability scheme, addressing all discharges of oil to navigable

waters, the exclusive economic zone, and shorelines;

A single, unified federal fund, called the Oil Spill Liability Trust Fund, to pay for the cleanup

and other costs of federal oil spill response authorized at $1 billion, far higher than any of

the other funds previously authorized;

Stronger federal authority to order removal action or to conduct the removal action itself;

Drastically revised spill prevention control and countermeasure plan requirements for

onshore facilities, offshore facilities, and vessels;

Tougher criminal penalties;

Higher civil penalties for spills of oil and for spills of hazardous substances;

Tighter standards and reviews for licensing tank vessel personnel, and for equipment and

operations of tank vessels, including the requirement of double hulls;

Also, Recoverable damages are grouped in six categories which include

1. Natural resource damages;

2. Damages to real and personal property, including loss of use of such property;

3. Loss of subsistence use of natural resources;

4. Loss of tax and other revenues;

5. Loss of profits or earning capacity; and

6. Increased costs of public services.

While similar to the already existing International Conventions, The Oil Pollution Act, 1990 has by

far been the single most effective policy in terms of control and reduction of Oil pollution. The OPA

represents the latest refinement of the concept of compensation for ecological damage in American

law as it fundamentally broadened the scope in the form of liability and tightening of norms and

conditions making it a more effective tool to counter and prevent oil disasters and pollution. Recent

studies have indicated that subsequent to the enactment, there has been a considerable reduction

in the rate of oil spills in the American waters. Also, the enactment stirred amendments in the

MARPOL convention as it gained international acceptance. The OPA can be attributed as a prime

example of how national law can drive the development of international law.

The Prestige Disaster and the Refinement of EU Maritime Law

In November 2002, a twenty-six-year-old gross oil tanker ironically called “Prestige” in the course

of a voyage suffered structural damage in heavy seas for reasons that still remain uncertain and

drifted to within five miles of the Galician coast in Spain, where it began listing and leaking its heavy

fuel oil cargo. The requests done by the salvors to bring the ship into a place of refuge were refused

by the Spanish authorities, ordering her to be towed away from the coast. A few days later the

vessel finally broke in two 160 miles away from the west of Vigo (Spain) and sank in a depth of

about 3,500 meters of water, releasing, in total, more than 60,000 of its 77,000 tones cargo. The

west coast of Galicia (a region with an important fishing industry) was heavily contaminated and

the oil eventually moved into the Bay of Biscay affecting the north coast of Spain and the southwest

of France, as well as the north Portuguese coast. In the light of this disaster it seemed consequently

necessary to amend the main instruments of the European maritime safety policy (namely Erika I

and II), following the recommendations of the third package of legislative measures on maritime

safety in the E.U, designed to improve safety at sea, by improving on the Erika I & II packages, while

at the same time trying to strengthen the competitiveness of European flags. The following changes

were thus made;

More stringent conditions for Ship Inspection and Survey Organizations

Control of Ships into Community Ports

Phasing out the Single Hull Tankers

Vessels Traffic and Monitoring Information System.

Establishment of European Maritime Safety Association (EMSA) and Committee on Safe

Seas and the Prevention of Pollution from Ships (COSS)

The Deepwater Horizon disaster

The Deepwater Horizon disaster also known as the Gulf Oil Spill which occurred in the Gulf of

Mexico off the coast of Louisiana in April 2010 is the largest marine oil spill in the history of the

petroleum industry and also one of the largest ecological disasters ever. The spill occurred when

the ultra-deepwater, semi-submersible mobile offshore oil rig Deepwater Horizon which was

owned and operated by Transocean, a Switzerland-based offshore drilling contractor, and leased to

BP plc (BP), one of the world’s largest oil companies experienced an explosion and fire and sank in

the Gulf of Mexico. For nearly three months, oil gushed uncontrollably into the Gulf of Mexico and

by the time the well was capped in July 2010, the government estimates that 4.9 million barrels of

oil—more than 200 million gallons—had spewed from the well, coating migratory birds, destroying

pristine marshes, sullying beaches, and inflicting incalculable damage to the ecosystem of the Gulf.

The explosion and fire, which resulted in 11 fatalities and several injuries, occurred in spite of

specialized oil spill prevention equipment called a blowout preventer (BOP), designed to avert this

type of disaster. The amount of oil and gas escaping from the subsurface well is a matter of dispute,

but an interagency federal panel of scientists led by the U.S. Geological Survey estimated the spill’s

size in the range of 35,000-60,000 barrels of oil a day, making the incident one of the largest oil

spills in history. The spill caused extensive damage to marine and wildlife habitats and to the Gulf's

fishing and tourism industries. Skimmer ships, floating containment booms, anchored barriers,

sand-filled barricades along shorelines, and dispersants were used in an attempt to protect

hundreds of miles of beaches, wetlands, and estuaries from the spreading oil.

In January 2011 the White House oil spill commission released its final report on the causes of the

oil spill in which they blamed BP and its partners for making a series of cost-cutting decisions and

the lack of a system to ensure well safety. It was also concluded that the spill was not an isolated

incident caused by "rogue industry or government officials", but that "The root causes are systemic

and, absent significant reform in both industry practices and government policies, might well

recur". After its own internal probe, BP admitted that it made mistakes which led to the Gulf of

Mexico oil spill. In June 2010 BP set up a $20 billion fund to compensate victims of the oil spill. To

July 2011, the fund has paid $4.7 billion to 198,475 claimants and in all the fund has nearly 1

million claims and continues to receive thousands of claims each week.

In September 2011, the US government published its final investigative report on the accident. In

essence, that report states that the main cause was the defective cement job, and Halliburton, BP

and Transocean were are, in different ways, responsible for the accident.

In terms of Litigation, over 130 lawsuits relating to the spill had been filed against one or more of

BP, Transocean, Cameron International Corporation, and Halliburton Energy Services, of which

over 220 lawsuits were filed against BP alone. Because the spill has been largely lingering offshore,

the plaintiffs who can claim damages so far are mostly out-of-work fishers and tourist resorts that

are receiving cancellations. Specifically, the Justice Department brought a civil suit against BP and

eight other companies alleging Clean Water Act violations and seeking civil penalties, cleanup costs,

and damages. Yet civil lawsuits based on the Gulf oil spill are just the beginning as the Justice

Department will also bring criminal charges against BP, Transocean, and, in all likelihood,

Halliburton. The charges will include criminal violations of the Clean Water Act and the Migratory

Bird Treaty Act, two of the environmental crimes charged in the Exxon Valdez case. The charges are

to include manslaughter in violation of 18 U.S.C. 1112 or under a seldom-used law known as the

Seaman’s Manslaughter Statute to address the worker deaths. The Clean Water Act violations and

manslaughter charges would require the government to show at least negligence as a violation of

the Migratory Bird Treaty Act is a strict liability offense that was committed as soon as oil from the

spill coated migratory birds. The Justice Department also brought charges under the Marine

Mammal Protection Act, the Endangered Species Act, and the Outer Continental Shelf Lands Act to

highlight the oil spill’s effect on aquatic life.

BP also issued $40bn worth of lawsuits against rig owner Transocean, cementer Halliburton and

blowout preventer manufacturer Cameron as The oil firm alleged failed safety systems and

irresponsible behavior of contractors had led to the explosion, including claims that Halliburton

failed to properly use modeling software to analyze safe drilling conditions. However, the firms

deny the allegations.

The most significant and crucial aspect of the Gulf Oil Spill as it stands today is the approach the

court will take to decide the liability on. Of even more significance is the impact, the disaster and

decision of the court will have on policy making not just in the United States but in International

Law as well. The scale and magnitude of the Gulf Oil disaster marks a turning point in the future of

International Environmental policy making and impact.

Maritime Oil Pollution and Punitive Damages: An Argument in Favor of Punitive Damages for

Ecological Damage

Confrontation is anathema to the diplomatic world. Perhaps that is why there are so few

international environmental cases and only one where reparations were actually paid. Mediation,

Good Offices, Conciliation, and Inquiry are preferred methods of settling disputes. Obviously, the

question of punitive damages would not come up in those settings.

And just as there is no single instrument handling the international rules of state responsibility for

pollution, neither is there one tribunal. UNCLOS allows disputes to be resolved in more than one

way: the International Tribunal for the Law of the Sea (ITLOS); the ICJ; and arbitral tribunals,

including a special arbitral tribunal under Article 287. The World Trade Organization (WTO)

utilizes the Dispute Settlement Understanding (DSU), while many environmental treaties make no

provisions at all for disputes. A few, like UNCLOS, offer the option to use the ICJ or arbitration.

“This pattern is consistent with the view that international adjudication, based on rules of

international law, has too many disadvantages in an environmental context to be widely attractive

to states as a primary means of dispute settlement.” ICJ’s seven-member chamber established

specifically for hearing environmental cases has never been used, and ICJ’s jurisdiction in general is

based on consent.

It bears emphasizing that it is state actors that have access to these forums, and the disputes would

largely involve treaty compliance. Further, as already shown, “decisions to prosecute claims based

on state responsibility are taken only in rare circumstances and victims are often held hostage to

the politics of their own country.” The provision in UNCLOS that most approximates punitive

damages is Article 230, which allows criminal sanctions for willful and serious acts of pollution

within the territorial sea. Some scholars propose creating a regime of criminal penalties, in answer

to the weak nature of international environmental law. Similarly, the International Law

Commission has suggested that some environmental disasters are so serious as to warrant the

category of criminal behavior. Although this would not necessarily make available punitive

damages, the discussion of criminality points to private actors as the culprits. McLaughlin

advocates obtaining jurisdiction under the International Criminal Court, which would represent a

significant shift away from traditional international law. He calls the current condition of the law a

“crippling paradox,” where non-state actors, the source of the pollution, do not come under the

jurisdiction of any one of the states sharing in harm. In proposing the use of the ICC, he strongly

advocates the concept of “universal jurisdiction” that already exists over certain criminal behavior.

He admits that it will require “political will” of the states to make such a change in international

environmental law. This holds more relevance in the light of the Gulf Oil spill as any approach the

court takes will have a crucial role in the future of International environmental law and policy

making.

Thus, the choice of the paradigm of oil pollution prevention and enforcement becomes an obvious

one for study with regard to available punitive remedies. The possibility of another dramatic loss

looms on the future, and the legal community must search for ways to compensate the victims and,

at the same time, build deterrence into a globally-weak system of enforcement. In examining the

environmental laws of oil pollution, it is obvious that more needs to be done in creating a deterrent

regime of oil pollution prevention beyond that of international regulatory law. Using existing tools

of integration and convergence, international environmental law can be transformed into

international environmental consensus law, and the remedy of punitive damages for preventable

catastrophes could become available. As Brubaker states: “It appears in this area of international

law, concerns with providing real channels for economic relief for pollution damage, even

catastrophes, do not move States to take concrete action.” And as Plater said, “[w]e cannot expect

people to maximize the public good and minimize the public detriments of their activities on the

basis of altruism, which is why we have law.”11

11 Zygmunt J.B.Plater, Facing a time of Counter Revolution—The Kepone Incident and a Review of First Principles, 29 U. Rich. L. Rev. 657, 694.

Bibliography

Principles of International Environmental Law, 2nd ed. By PHILIPPE SANDS

Cheshire and North's Private International Law, 14th Ed.

Articles

Compensation for Non-Economic Ecological Damage under the International Oil Pollution

Regime: The Environmental Bottom line by Robert Stevenson, Queensland University

After the Spill is Gone: The Gulf of Mexico, Environmental Crime, and the Criminal Law by

David M. Uhlmann, Michigan Law Review

Who Should Pay for the Gulf Oil Spill? Liability and incentive issues raised the by Deepwater

Horizon incident By James Plumme

What we should learn from the BP Oil Spill by Jacqlyn Lopez, Environmental Law News Vol.

20 Is. 1

Oil Over Troubled Waters: Exxon Shipping Co. v. Baker and the Supreme Court's Determination

of Punitive Damages in Maritime Law; De Sousa, Tanya Paula

International Environmental Law: Preventing Oil Pollution by Ships by Michinel-Álvarez, M.

A., Department of Private Law. University of Vigo. ISSN:1579-4377

Oil Spills in U.S. Coastal Waters: Background, Governance, and Issues for Congress by Jonathan

L. Ramseur, Congressional Research Service

Deepwater Horizon Oil Spill Disaster: Risk, Recovery, and Insurance Implications by Rawle O.

King, Congressional Research Service

Environmental Pollution Liability and Insurance Law Ramifications in Light of the Deepwater

Horizon Oil Spill by Dr. Kyriaki Noussi