Parth Prachi Shrivastava & Akanksha Goel*
On 25th July 2020, bulk carrier MV Wakashio (Japanese owned) sailing under the Panamanian flag went off-course and collided with the coral reef off the coast of Mauritius.[i] The said collision, on 5th August 2020, resulted in a leakage of approximately 1000-1500 tonnes of fuel oil into the Indian Ocean. This marine catastrophe adversely impacted the pristine coral lagoon, various important biodiversity sites, local fishermen community, and also the $1.6 billion Mauritian tourism industry. This leakage poses a potential threat to two protected marine systems including the Ile aux Aigrettes nature reserve and a wetland of international importance, Blue Bay Marine Park protected under the “Ramsar Convention, 1971”.[ii] All this makes it imperative to ascertain the liability and to provide compensation to the affected country. The following article deals with the niche laws in regards to compensation for oil spills under International Maritime Law and contends for a better and uniform law.
International Conventions Regulating Marine Pollution caused by Oil
Looking at the increasing cases of oil spillage and the lack of liability, international treaties, and conventions have been formulated. These international conventions have played an indispensable role in fixing the liability, providing adequate compensation to the victims, as well as decreasing the cases of marine pollution. The first treaty was the “International Convention for the Prevention of Pollution of the Sea by Oil, 1954”[iii] (hereafter referred to as OILPOL). This Convention aimed at prohibiting the discard of oil-based wastes within a specified distance from land as well as in the “special areas where the danger to the environment was especially acute.”[iv]
The Torrey Canyon accident (1967), which was the world’s biggest oil tanker disaster[v], paved the way for the “International Convention for the Prevention of Pollution from Ships”[vi] (hereafter referred to as MARPOL) in 1973. The OILPOL lost its significance after the aforementioned accident and hence MARPOL subsumed the same. MARPOL aims at preventing as well as minimizing pollution of the marine environment which has been covered under its 6 Annexes, mostly focusing upon special areas such as Regulations aiming at preventing oil pollution, pollution caused by noxious liquid substances and prevention of various other forms of pollution caused by ships. Annexure I of the Convention exclusively focuses on the prevention of oil pollution through operational and accidental discharges. Earlier, countries were hesitant to ratify the MARPOL, but it has proved to be one of the major international conventions aiming to prevent marine pollution.
The aforementioned Conventions largely aimed at preventing marine oil pollution but ignored the liability and funding aspect of the same. Therefore, the “International Convention on Civil Liability for Oil Pollution Damage”[vii](hereafter referred to as CLC) as well as the “International Convention in the establishment of an international fund for oil pollution damage”[viii], 1971 (hereafter referred to as FUND) were formulated to establish the rules for liability and compensation caused by such pollution.
The CLC aims at ensuring that the persons who suffer from oil pollution damage due to oil carrying ships get adequate compensation. The strict liability of these damages lies with the ship-owner responsible for causing the pollution. It also requires the ships carrying above “2,000 tons of oil to ensure the ships from oil pollution damage”[ix]. The 1992 protocol had established a maximum compensation amount to 135 million SDR[x] that would be payable from the International Oil Pollution Compensation Fund (IOPC) for a solitary incident. The IOPC aims at providing a one time supplementary compensation when the insurer and ship-owner do not have adequate funds to cover the damages.
The FUND, on the other hand, was established to provide compensation for circumstances that were not covered under the CLC such as the exceptions of CLC, or when the damage goes beyond the CLC liability. It also introduced the mandatory liability insurance by ship-owners and covered only cargo or bunkers which carry oil in bulk. Further to claim compensation, the vessel which is responsible for the damage should also be a party to the CLC as well as the FUND.
The most recent Convention dealing with oil pollution is the “International Convention on Civil Liability for Bunker Oil Pollution Damage”[xi] 2001 (hereafter referred as BUNKER), which aims at providing speedy compensation to the persons who have suffered due to oil spills caused via ship bunkers. It covers pollution damage only and applies to the “damage on territory inclusive of the territorial sea as well as the Exclusive Economic Zone.”[xii] The Convention is based on the CLC and requires the owner to have a mandatory insurance cover for the vessel, thereby providing direct action for a claim against the insurer.
Fixing the Liability
As mentioned above, the major conventions and laws dealing with oil spillage are IOPC and FUND. However, considering the Mauritius case, the situation is not the same. The laws regarding oil spillage differ on one niche issue, that is the type of ship carrying the oil. IOPC and FUND, which are extensively used for their comprehensive rules and regulations over the matters of oil spillage, are applied only in cases of ‘oil tankers’[xiii] and not ‘bunker ships’[xiv]. Hence, it is imperative for us to understand the difference between the two.
Oil tankers have been defined under Regulation 1 of Annexure I of MARPOL as “ships which carry oil in bulk quantities as their cargo”.[xv] The aforementioned definition is widely followed and accepted while ascertaining the type of oil carrying ship. However, the ship under consideration in the present case is a bunker ship, which is covered under the Bunkers Convention. The Preamble of the said Convention mentions that “effective measures must be taken to compensate for the damages caused by the discharge of bunker oil from ships“[xvi]. Bunkers Convention also defines the term ship under Art. 1(1) as “any seagoing vessel and seaborne craft”[xvii]. Hence, the liability in the present case can be ascertained under the Bunkers Convention only.
The Bunkers Convention under Art. 3 puts the liability on the ship-owner, which includes “owner, registered owner, bareboat charter, manager, and operator of the ship”[xviii]. The Convention imposes strict liability on the ship-owner as it mandates that even if a slight connection could be formed between the oil spill and pollution caused, the ship-owner will be liable to compensate. However, the same Convention does not impose absolute liability as it provides for exceptions to liability under Art. 6 of the convention.[xix] The said Article provides for the “Convention on Limitation of Liability for Maritime Claims, 1976”[xx] (hereafter referred as LLMC), and other national and international regimes to supersede the authority of Bunkers Convention in such cases. LLMC limits the amount of compensation available to a considerate level. In the present case, as the gross tonnage is 101,932, the amount is capped at $18 million which could have gone considerably up had Mauritius ratified the 1996 protocol. In that case, the amount could have gone up to $65 million.[xxi]
Mauritius could have been liable to demand damages amounting to $1 billion, if the ship would have been an oil tanker under IOPC, CLC, and FUND. The slight technicality of the law in this regard has rendered Mauritius with a weak claim for damages. The only means for Mauritius to demand damages for a better claim amounting up to $65 million would be to prove “that the spillage was caused due to the owner’s act or omission…”[xxii].
The reason behind the difference existing in the law in regards to oil spillage is that it presumes that the damage caused by oil pollution by an oil tanker is far more significant as compared to a bunker ship considering the capacity of oil both tanks might carry. This presumption, though prima-facie appears to be correct, is not true. As per the statement of Mr. Jan De Boer, Senior Legal Officer, International Maritime Organisation, “around 95% cases related to oil pollution are caused by bunker or bulk carriers and not by oil tankers”.[xxiii]This fact must be taken into consideration, and a reform convention shall be made to address the question of oil spillage with a more considerate and modern approach as the harm to the environment, and those affected might not be compensated with restricted claims under such technicalities. We recommend that:
- A uniform law concerning the issues of oil spillage should exclusively be carved out taking into consideration the legal as well as the environmental factors.
- The existing legal framework is myopic in nature with frivolous legal technicalities which often renders parties with injustice. Hence, the terms Oil Tankers and Bunker Ships should not be differentiated on the basis of their operations but on the capacity and quantity of oil they carry for the matters concerning oil spillage.
- Due to the multiplicity of treaties and conventions, it is cumbersome for concerned authorities to ascertain liability and to impose fines, as seen above where the Bunker Convention was applied but the liable amount was capped under LLMC. This demands for a separate convention dealing specifically with the amount of claims in varied cases.
- International Tribunal for the Law of the Sea (ITLOS) shall be made as the supreme authority having jurisdiction over such matters. As of now, ITLOS possesses jurisdiction over matters concerning the interpretation of the United Nations Conventions on the Law of the Sea (UNCLOS) and the matters in which any agreement has conferred jurisdiction on the Tribunal.
- In order to safeguard the environment, a specific arm under the ITLOS shall be formed with mandate to provide financial, technical, and logistic support to the states facing problems related to oil spillage.
About the Author
Parth Prachi Shrivastava & Akanksha Goel are third year students at Rajiv Gandhi National University of Law (RGNUL), Patiala, Punjab.
[i] Regina Asariotis and AnilaPremti, UNCTAD Transport and Trade Facilitation Newsletter N 87- third Quarter 2020, United Nations Conference on Trade and Development, https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2451, (last accessed Oct. 3, 2020)
[ii] Convention on Wetlands of International Importance especially as Waterfowl Habitat, Feb. 2, 1971, U.N.T.S 996 ( entered into force in 1975).
[iii]International Convention for the Prevention of Pollution of the Sea by Oil, opened for signature May 12, 1954, 1967 U..N.T.S. 4714 (entered into force Jul. 26, 1958).
[iv]International Maritime Organization, Oil Pollution Background, http://www.imo.org/en/OurWork/Environment/PollutionPrevention/OilPollution/Pages/Background.aspx (last accessed on Oct. 2, 2020).
[vi]International Convention for the Prevention of Pollution from Ships, Nov. 2, 1973, 12 I.L.M. 1319 (entered into force Oct. 2, 1983).
[vii]International Convention on Civil Liability for Oil Pollution Damage, Nov. 29, 1969, U.N.T.S. 973, (entered into force Jun. 19, 1975).
[viii]International Convention in the establishment of an international fund for oil pollution damage, Dec. 18, 1971, U.N.T.S. 1110, (entered into force on Oct. 16, 1978).
[ix]International Maritime Organization, International Convention on Civil Liability for Oil Pollution Damage (CLC)http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-on-Civil-Liability-for-Oil-Pollution-Damage-(CLC).aspx (last accessed on Oct. 2, 2020).
[x]International Maritime Organization, International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND), http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-on-the-Establishment-of-an-International-Fund-for-Compensation-for-Oil-Pollution-Damage-(FUND).aspx (last accessed Oct. 3, 2020).
[xi] Intentional Convention on Civil Liability for Bunker Oil Pollution Damage (BUNKER), Mar. 23, 2001 (enter into force Nov. 21, 2008).
[xii]International Maritime Organization, International Convention on Civil Liability for Bunker Oil Pollution Damage (BUNKER),http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-on-Civil-Liability-for-Bunker-Oil-Pollution-Damage-(BUNKER).aspx (last accessed Oct. 3, 2020).
[xiii]Infra Note xix.
[xiv]Infra Note xx.
[xv] International Convention for the Prevention of Pollution from Ships (MARPOL), Regulation 1(4).
[xvi]Supra Note xv.
[xvii] Art. 1(1), Supra Note xv.
[xviii] Art. 1(3), Supra Note xv.
[xix] Dr. Ling Zhu, Compensation issues under the Bunkers Convention, 7(1) WMU Jour. of Maritime Affairs, 303, April 2008, https://www.researchgate.net/publication/226476410_Compensation_issues_under_the_Bunkers_Convention.
[xx] Convention on limitation of liability for maritime claims, Nov. 19, 1976, U.N.T.S. 1456 (entered into force Dec.1, 1986.
[xxi]After Wakashio, is the Bunker Convention fit for purpose?, Clyde & Co, https://www.clydeco.com/en/insights/2020/08/after-wakashio,-is-the-bunker-convention-fit-for-p, (last accessed Oct. 4, 2020).
[xxii] Convention on Limitation of Liability for Maritime Claims, 1976, Art. 4
[xxiii]Who will pay for the Mauritius oil spill?, DW, https://www.dw.com/en/mauritius-oil-spill-compensation-pay/a-54725675, (last accessed Oct. 4, 2020)