Oil Pollution Damage Payments Rise to Trillion Dollar Limit

LONDON, UK, December 15, 2004 (ENS) - Damage payments to victims of a maritime oil spill will be raised and capped at just over $1 trillion dollars if they are covered by a new supplementary fund to be created early next March. The legal protocol establishing the fund now has been ratified by enough countries to bring it into force, according to the International Maritime Organization (IMO).

Spain, which suffered an environmental disaster two years ago when the Prestige oil tanker spilled some 64,000 metric tons of oil off the country's Atlantic coast, on Friday became the eighth government to ratify the instrument.

Oil from the wreck of the Prestige reaches Spain's Atlantic coast. November 2002. (Photo courtesy WWF)

The payout for any single incident will be limited to 750 million Special Drawing Rights (SDRs), an amount in an International Monetary Fund basket of currencies equivalent to $1.152 trillion.

Without that supplement, the amount received by Japan for the 1997 Nakhodka oil tanker incident was US$397.1 million. France received the same amount for the 1999 Erika spill.

"With the entry into force of this Protocol, IMO has substantially enhanced the compensation available under the 1992 Convention," the agency said, referring to the Civil Liability Convention.

"The supplementary scheme introduced by the 2003 Protocol should therefore ensure, for the foreseeable future, that victims of oil pollution damage will be fully compensated for their losses," the IMO said.

The supplementary Fund will apply to oil spill damage in the territory of a Contracting State, including the Exclusive Economic Zone, which extends 200 nautical miles out to sea.

In the case of Spain, WWF, the global conservation organization, issued a report in November 2003 which found damage from the Prestige spill may last for more than a decade.

According to the report, damage to fishing and related economic sectors, tourism, and the natural heritage along 3,000 kilometers (2,000 miles) of coastline polluted by the spill will cost approximately €5 billion, with society at large paying 97.5 percent of it.

The Prestige in trouble off the coast of Spain. November 2002. (Photo courtesy Mohid)

The official flag state report on the sinking of the Prestige now has been published. One of the key recommendations of the Bahamas Maritime Authority is to clarify who has control of the ship at all times. The report states that there is a "vital need for clarity about who is in control during an emergency."

What happened, the report says, was that after the immediate response where ship and shore both took correct and proper action, things started to go awry when "messages from the shore authorities to the Master of the Prestige appear to assume that whoever sent a message had authority to give orders to the Master."

But that was never explained to the Master, although Spanish law does allow such orders to be given. Each shore authority which contacted the ship assumed that the Master should obey their every order, continues the report.

Despite this, the report praises the Master for attempting to comply with shore instructions, with shore surveyors, and for cooperating with shore authorities although he believed that many of the decisions being taken by the shore authorities were wrong.

These shore decisions included refusal of refuge, a demand to restart the main engine despite warnings of possible damage that action might cause to the hull, delays in providing extra help to secure towing lines.

"No evidence has been discovered during this investigation to substantiate the charge of [the Master] disobeying an order from any shore authority," concludes the report. He took all proper steps … he chose to stay on board to try and save his ship and try to minimise pollution … his actions subsequent to the remainder of the crew leaving were exemplary."

Days before the report was published it was announced that the vessel’s master will be allowed to return home from two years of enforced residence in Spain. He is accused of disobeying orders and helping to cause pollution, but not so far brought to trial.

"WWF urges the shipping nations - through the International Maritime Organization - to identify the world's most sensitive and vulnerable areas, with the aim of declaring them Particularly Sensitive Sea Areas," said Simon Cripps, director of WWF International's Endangered Sea Programme. "Such areas, in conjunction with stricter shipping regulations, will help reduce the impact of further oil and other spills."