1. BY CAPT. EDWARD WILMOT GREAT AMERICAN INSURANCE

2. DEEPWATER Proposed – elimination of Limitation of Liability Proposed – doubling vessel statutory Pollution Liability limits Proposed – elimination of DOHSA

3. LIMITATION OF LIABILITY ACT 1851 – PURPOSE WAS TO ENCOURAGE GROWTH OF AMERICAN SHIPPING LIMITS LIABILITY TO THE VALUE OF VESSEL AND FREIGHT PENDING NEGLIGENCE OR UNSEAWORTHY STATE OF VESSEL MUST BE BEYOND PRIVITY AND KNOWLEDGE OF OWNER OR MASTER REALITY – LIMITATION DIFFICULT TO ACHIEVE BUT IT ALLOWS NUMEROUS CASES TO BE CONSOLIDATED INTO ONE JURISDICTION

4. DEATH ON THE HIGH SEAS ACT Jones Act and DOHSA do not allow for non-pecuniary damages including loss of love and affection, pre- death pain and suffering, punitive damage, mental anguish, etc. On the other hand – Maritime workers are extremely well protected by the Jones Act which has a low bar to establish responsibility – extending coverage would have a major impact on P&I rates

5. Pollution Statutory Limits Unlimited Liability – if you cannot quantify a loss – you cannot insure it Good case for increasing limits on Drilling – but need to be careful not to drive out smaller operators Vessel spills are quantifiable and limited by vessel size Current methodology has worked well differentiating by vessel type and size To date – all spills have been addressed with in the limits of insurance available

6. TWO COMPONENTS OF ENVIRONMENTAL LEGISLATION COMPENSATION DETERRENCE

7. COMPENSATION Vessel may perish – Liability attaches to vessel “in rem” Damage caused by vessels carrying large quantities of oil may exceed vessel value Case in Point – Torrey Canyon - 1967 Cleanup in excess of $392M No P&I cover for pollution Total liability of $100 under a remote British law Insurance Industryresponded by providing coverage Shipping Industry responded – Topia, Scopia and othercompensation regimes

8. Bunker convention In effect Nov. 2008 Impacts dry cargo vessels over 1000 GRT Presently 27 signatory nations Blue card required if your vessel is registered in these nations or trading there Panama is signatory

9. Nairobi International convention on the Removal of Wrecks Adopted May 2007 First set of uniform Intl. rues to ensure wrecks located beyond the territorial sea are identified, marked and if necessary, removed Still awaiting ratification by 10 states In the USA NOAA using research funds from the NPTF to identify WW II wrecks States trying to force removal in Pollution incidents – particularly west coast

10. Deterrence Traditionally the master deemed to be the alter ego of the vessel due to the long voyages and poor communication with owners Obviously now there is constant communication with owners, managers, charterers These entities are now being enjoined into legal actions

11. FRANCE Feb. 2004 – Loi Perben in effect Extends the concept of individual criminal liability for pollution beyond the Master to owners, managers and others Ships are being intercepted under this act, brought into French ports on suspicion of pollution and face fines and jail sentences even on flimsy evidence

12. ERIKA III Package and Directives Adopted Sept. 2005 – in effect as domestic law of EU April 2007 Stipulates sanctions against ship-owner, Master, cargo owner, Classification society, or any other person for even unintentional ship-source pollution – and makes it a criminal offence if committed with intent – negligently or recklessly Conveniently omits port authorities Unfortunately includes salvors – which may delay response

13. CHINA Regulations of Prevention and control of Ship-Induced pollution of the Marine environment China Maritime Safety Authority- gov’t. body charged with preventing and controlling pollution Can detain offending ship – “Cofr” rules not yet determined Emergency Response plans Compulsory insurance over 1000GRT Fines - $1500-$75,000

14. USA Vessels and crews routinely seized and prosecuted criminally and civilly under OPA DOJ utilizes threat of criminal prosecution to obtain civil settlements Under OPA this extends to owners, directors, managers and charterers

15. ON THE HORIZON HNS CONVENTION – Hazardous and Noxious substances Created 1996 – not yet in effect Marpol Annex VI (due 2015 but in effect in USA & Canada 2012) – Pre-empted by California