Environment and pollution - an introduction

News & Insights 29 June 2018


Background

Liability for pollution is a relatively modern concern. Most laws in this field have come into being since the late 1960s following the first major tanker spill, the Torrey Canyon incident off the south coast of...

Background

Liability for pollution is a relatively modern concern. Most laws in this field have come into being since the late 1960s following the first major tanker spill, the Torrey Canyon incident off the south coast of England. It prompted the growth of major environmental pressure groups, and governments represented at the United Nations undertook a whole range of new environmental commitments. Subsequent oil pollution disasters such as the Amoco Cadiz off Brittany in 1978, the Exxon Valdez in Alaska in 1989 and, more recently, the Erika and Prestige incidents off Western Europe, have resulted in further legal changes and greater financial liability for pollution from ships.

Today, even minor pollution incidents commonly result in very significant financial losses for shipowners and their insurers, both in the form of compensation claims and criminal fines. A serious oil spill is a crisis that shipping executives fear more than any other casualty, not least because of the considerable publicity that is often generated by them.

Pollution liability regimes were the first to introduce compulsory insurance in the maritime sector along with rights of direct action against liability insurers.

Insurance against pollution liability risks is therefore a very important feature of club cover, not only to enable shipowners to comply with compulsory insurance requirements but also to protect them against some of their biggest potential exposures.

Oil pollution

Liability to pay compensation for oil pollution from ships is, in general, governed by the law and practice of the jurisdiction in which the pollution is suffered. In practice, there are two distinct sets of liability regimes, one international and the other exclusive to the United States.

Internationally, laws governing compensation for oil pollution from ships are based on one of two international regimes, the first applying to oil tankers and the second to bunker spills from other types of ships. These are the Civil Liability Conventions 1969 and 1992 (CLC) and International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the ‘Bunkers Convention’) respectively.

In the United States, this is governed by the Oil Pollution Act 1990 (OPA 90).

Pollution from ships

Pollution from ships has occurred principally as a result of maritime accidents and through operational discharges of waste materials from ships.

Regulations to prevent pollution from ships likewise fall into two broad categories:

  1. those concerned generally with ship safety standards and
  2. those dealing specifically with measures to prevent and control pollution.

Regulations concerned with ship safety standards have generally had safety of life as their main purpose, though protection of the environment and preservation of property are also recognised as important objectives. The primary international instrument in this area is the Safety of Life at Sea Convention, 1974 (SOLAS), together with the regulations and codes of practice which form part of its regime. However, much of SOLAS is not concerned with preventing pollution, so a detailed review of its provisions is beyond the scope of this text.

From a pollution perspective, the main regulation is the International Convention for the Prevention of Pollution from Ships (MARPOL). Much of MARPOL is concerned with the reduction of marine pollution resulting from discharges of waste materials, notably oily residues, but also garbage, sewage and smoke emissions. MARPOL also includes regulations designed to minimise the risk or extent of pollution from accidental causes, such as rules requiring the construction of tankers with double hulls, or restricting the use of single hull tankers for the carriage of heavy grades of oil.

Contact the pollution team

The club has considerable experience of handling pollution claims and provides comprehensive cover against the liabilities faced by members under the various pollution regimes. The claims teams are therefore very well equipped to assist members in a time of crisis.

More detailed information sheets have been created on specific environmental issues, all of which are available on the club website.

The information and commentary herein are not intended to amount to legal or technical advice to any person in general or about a specific case. Every effort is made to make them accurate and up to date. However, no responsibility is assumed for their accuracy nor for the views or opinions expressed, nor for any consequence of or reliance on them. You are advised to seek specific legal or technical advice from your usual advisers about any specific matter.

Categories: Cover Including Discretionary Claims, Pollution

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