1. POLLUTION FROM SHIPS Legal Developments and Handling of Incidents
Colin de la Rue
Stephen Askins
Ince & Co
January 2004

2. CIVIL LIABILITY AND COMPENSATION

3. INTERNATIONAL CONVENTIONS
Civil Liability Convention 1992 (CLC 92)
Fund Convention 1992

4. CLC 92 Strict liability on tanker owner for oil pollution damage
“Channelling” of liability to owner
Liability of insurer
Limitation of liability

5. FUND CONVENTION
International Oil Pollution Compensation Fund (IOPC Fund)
Damage not adequately compensated by shipowner

6. HANDLING OF INCIDENTS

7. POLLUTION Media Politicians Emotion Multiple claims
Misconceptions and mistrust
I want to focus on the interface between the legal and PR issues because there are many ways in which the problems can be made worse both by lawyers paying insufficient attention to publicity aspects, as well as by media consultants issuing statements without due regard for the legal implications. Today we will focus on the importance of being clear about the owner’s priorities, and on some of the ways in which legal and PR efforts can and should be combined in a common strategy to serve the main objectives.
From the viewpoint of the shipowner, his liabilities may be insured, but there may well be a risk of uninsured losses which are high on his agenda. In practice we have seen a wide variety of attitudes to reputation risks, ranging from a relative lack of concern on the part of some of the smaller or lower profile operators, to the top priority with which the oil majors seek to safeguard their public image. Arrest or detention of the ship involved in an incident may also have consequences for the shipowner which are not necessarily insured. The problems are often aggravated by public outrage or a sheer multiplicity of claims, with the result that a PR element may be involved in arranging her release.
Normally the Owners’ P&I Club is at one remove from the glare of publicity, but all insurers know that the ultimate cost of settling claims can easily be affected by public perceptions of the way in which the claims are being handled.

9. EXPOSURE Pollution claims Detention of ship/crew Reputation
I want to focus on the interface between the legal and PR issues because there are many ways in which the problems can be made worse both by lawyers paying insufficient attention to publicity aspects, as well as by media consultants issuing statements without due regard for the legal implications. Today we will focus on the importance of being clear about the owner’s priorities, and on some of the ways in which legal and PR efforts can and should be combined in a common strategy to serve the main objectives.
From the viewpoint of the shipowner, his liabilities may be insured, but there may well be a risk of uninsured losses which are high on his agenda. In practice we have seen a wide variety of attitudes to reputation risks, ranging from a relative lack of concern on the part of some of the smaller or lower profile operators, to the top priority with which the oil majors seek to safeguard their public image. Arrest or detention of the ship involved in an incident may also have consequences for the shipowner which are not necessarily insured. The problems are often aggravated by public outrage or a sheer multiplicity of claims, with the result that a PR element may be involved in arranging her release.
Normally the Owners’ P&I Club is at one remove from the glare of publicity, but all insurers know that the ultimate cost of settling claims can easily be affected by public perceptions of the way in which the claims are being handled.

10. WHAT IS BEING DONE TO COMPENSATE VICTIMS?
Contact with claimants
Explaining compensation arrangements
Interim payments
Making quick payments is not always easy
In practice one of the biggest problems is that compensation is not easily paid until, at least, claims have been filed. Claimants commonly take a good deal of time to calculate the loss they think they have suffered, and to gather together at least an initial batch of supporting documents.
To help them with this task a claims office has sometimes been set up in the location of the spill. This can speed up the process, but there are still many other problems to solve.
One of these concerns the extent to which claims are actually allowable. P&I Clubs have leeway to enter compromise settlements, but do not want to set adverse precedents which the industry has been resisting for years.
If a claim is agreed, or accepted as valid in principle, difficult decisions remain necessary about the proportion to be paid on an interim basis, taking into account the risk that the total might finally exceed liability limits and result in scaling down.
However, this is just the tip of an iceberg of technicalities which we do not have time for now. Suffice it to say that often it has been one of our major objectives to overcome as quickly as possible the many legal complexities involved in making interim payments, in order to boost the PR response and thereby mitigate some of the problems we have discussed.

11. Braer

12. Sea Empress

13. Nissos Amorgos
Settlements for 100% of approved amounts might have been paid long ago, but as it is, 2½ years after the spill, payments are still capped at 25%. This is all because of a few claims which appear to be highly speculative but are for vast sums of money. 48

14. Amorgos

15. TASMAN SPIRIT
Tasman Spirit

16. THE ERIKA, PRESTIGE AND PROPOSALS FOR CHANGE

17. COMPENSATION Review of Conventions IOPC Fund
Third Intersessional Working Group

20. COMPENSATION Shipowner’s liability Proposed extra incentives
higher limit
breaking limitation
liability of charterers

21. Amoco Cadiz

23. COMPENSATION
Keep it simple
Keep to original purpose

24. PREVENTION OF POLLUTION AND CRIMINAL LIABILITY

26. PREVENTION Proposals Post-Prestige
MARPOL amendments
Accelerated phase-out of single hull tankers
EU laws
Criminal liability

27. CRIMINAL LIABILITY Operational Discharges
MARPOL Annex I
Problems of enforcement

28. CRIMINAL LIABILITY Accidental Discharges
No liability for pollution resulting from damage to ship
Unless caused by
i) lack of response to incident, or
ii) deliberate or reckless misconduct

29. CRIMINAL LIABILITY EU Draft Directive
“Illegal” discharges
Covers accidental spills
Including spills excluded by MARPOL
Current position

30. CRIMINAL LIABILITY EU Draft Directive
Operational discharges
Enforcing existing laws

31. CRIMINAL LIABILITY EU Draft Directive
Accidental spills
Gross negligence
Safeguards

33. Dealing with the media The PR battle – is it still worth doing?
When The Worst Happens
Dealing with the media
The PR battle – is it still worth doing?

35. NUNCIA MAIS

36. IS IT STILL WORTH DEALING WITH THE MEDIA ?

37. JUPITER

38. ARGOMER 1

40. Prestige

43. The media spotlight

45. Alternative ways to deal with press
Say Nothing
Take positive steps to manage the media and public perception

47. NORDLAND

48. Prestige 13th November 2002

50. The Questions Most Asked During A Crisis
what happened?
who is to blame?
what are you doing?
does the vessel fly a ‘flag of convenience’?
Is the crew ‘third world’?
who owns the vessel?
compensation - who will pay?