INCIDENTS INVOLVING THE IOPC FUNDS 1992 FUND

Transcription

1 INTERNATIONAL OIL POLLUTION COMPENSATION FUNDS Agenda item: 3 IOPC/OCT15/3/7 Original: ENGLISH 25 August Fund Assembly 92AES Fund Executive Committee 92EC65 Supplementary Fund Assembly SA11 INCIDENTS INVOLVING THE IOPC FUNDS 1992 FUND INCIDENT IN ARGENTINA Note by the Secretariat Objective of document: Summary of the incident so far: To inform the 1992 Fund Executive Committee of the latest developments regarding this incident. Between 50 and 200 tonnes of oil impacted the shoreline in Caleta Córdova, Chubut Province, Argentina, on December A total of 5.7 kilometres of coastline is reported to have been affected. An investigation into the cause of the incident by the Federal Court of Comodoro Rivadavia (Criminal Section) reached a preliminary decision that the spill originated from the Presidente Arturo Umberto Illia (Presidente Illia). However, the shipowner and the insurer of the Presidente Illia contest liability. As Criminal court decisions are not binding on civil judges, the owner of the Presidente Illia will be entitled to prove, in any of the civil court proceedings, that the spill did not come from the Presidente Illia. The Presidente Illia was insured with the West of England Ship Owners Mutual Insurance Association (Luxembourg) (West of England Club). The limit of liability of the owner of the Presidente Illia under the 1992 Civil Liability Convention (1992 CLC) is estimated to be SDR. It seems likely that the total admissible damage caused by the spill will be within the shipowner s limit. Discussions were held between the 1992 Fund and the West of England Club and it was agreed that the shipowner and its insurer would pay claims for compensation assessed and approved in accordance with the principles laid down in the 1992 Civil Liability and Fund Conventions. If however it is finally established that the oil which impacted the coast did not come from the Presidente Illia but from another ship as defined in the 1992 CLC, the shipowner and the West of England Club would recover from the 1992 Fund the amounts of compensation paid. An action was brought by the owner of the Presidente Illia and the West of England Club against the 1992 Fund in order to protect their compensation rights against the 1992 Fund in case it was finally established that the spill originated from a tanker other than the Presidente Illia. The parties have agreed to stay the proceedings pending the resolution of the civil actions brought by claimants against the owner of the Presidente Illia and its insurer. In December 2010 the 1992 Fund brought an action in the Court of Buenos Aires against the owner of the San Julian, which was another possible source of the spill, and against its insurer, in order to protect its compensation rights.

2 IOPC/OCT15/3/7-2 - Recent developments: There is one outstanding civil action against the owner of the Presidente Illia and the West of England Club. The action by the owner of the Presidente Illia and the West of England Club pending against the 1992 Fund is also outstanding. It seems likely that the total admissible damage caused by the spill will be within the shipowner s limit. However, the 1992 Fund will have to keep monitoring the case until the issue of the liability of the owner of the Presidente Illia has been resolved in the civil courts. Action to be taken: 1992 Fund Executive Committee 1 Summary of incident Information to be noted. Ship The Criminal Court in Comodoro Rivadavia has reached a preliminary decision that the spill originated from the Presidente Arturo Umberto Illia (Presidente Illia) Date of incident 25/ Place of incident Argentina Cause of incident Spill probably occurred during deballasting Quantity of oil spilled Between 50 to 200 tonnes of crude oil Area affected Caleta Córdova, Chubut Province (Argentina) Flag State of ship Argentina Gross tonnage P&I insurer GT West of England Ship Owners Mutual Insurance Association (Luxembourg) (West of England Club) CLC Limit SDR (AR$306.6 million) <1> STOPIA/TOPIA applicable No CLC + Fund limit 203 million SDR (AR$2 586 million) Compensation Specific issues Legal proceedings All valid claims arising out of this incident have now been settled. The payments so far made by the West of England Club total AR$5 million ( ). The owner of the Presidente Illia and its insurer deny liability for the spill and the shipowner has requested the Court to bring the 1992 Fund into the proceedings. One action remains pending against the owner of the Presidente Illia and the West of England Club in the Federal Court of Comodoro Rivadavia (Civil Section). The 1992 Fund has not been formally notified of this action. An action was brought by the owner of the Presidente Illia and the West of England Club against the 1992 Fund in order to protect their compensation rights against the 1992 Fund in case it was finally established that the spill originated from a tanker other than the Presidente Illia. The 1992 Fund brought an action against the owner of the San Julian, another possible source of the spill, and against its insurer. <1> The exchange rate used in this document (as at 13 July 2015) is 1 = AR$ , 1 = US$ and 1 SDR = AR$

3 IOPC/OCT15/3/ Introduction The background information to this incident is provided in more detail at the Annex. 3 Claims for compensation Three hundred and thirty one claims for compensation for a total of AR$53.3 million ( 3.85 million) and US$ ( ) have been submitted. All valid claims arising out of this incident have now been settled. As at 10 August 2015 the payments made by the West of England Club totalled AR$5 million ( ). A number of claims can be considered as time-barred or have been rejected. 4 Criminal proceedings 4.1 An investigation into the cause of the incident was commenced by the Federal Court of Comodoro Rivadavia (Criminal Section). In connexion with the investigations, the Prefectura Naval (maritime authorities) inspected the Presidente Illia and a number of other vessels in the area. The Presidente Illia was detained. 4.2 The province of Chubut submitted a request for security for US$50 million to the Criminal Court of Comodoro Rivadavia. The Court dismissed the request for security on procedural grounds. 4.3 The Court investigated in particular the role of the shipowner s representative (Superintendente), the master and several other officers of the Presidente Illia, the operator of the loading buoy and the cargo inspector. 4.4 In March 2008 the Federal Court of Comodoro Rivadavia (Criminal Section) completed the investigatory phase of the proceedings by concluding that while the Presidente Illia was loading on 25 and 26 December 2007 at a loading buoy off Caleta Córdova, an unknown quantity of the oil that was being loaded had entered the ballast system due to a fault in the ballast line and had subsequently been spilled during the deballasting process. Five persons including the master, officers and crew were charged with a water pollution offence under Argentine environmental law, whilst the shipowner s representative (Superintendente) was charged under Argentine criminal law with having hidden information and evidence. 4.5 The defendants pleaded not guilty, leading to the opening of the trial phase. They applied to be put on probation <2> and the request was denied. This decision has been appealed and the file has been under the consideration of the Criminal Court of Appeals since February The shipowner and the insurer maintain that the Presidente Illia was unlikely to have caused the damage. They argue that any spill caused by the Presidente Illia was very minor and highly unlikely to have reached the coast and that the oil that had reached the coast must therefore have come from another source. 4.7 Taking into consideration that criminal court decisions are not binding on civil judges <3>, the owner of the Presidente Illia will be entitled to try and prove, in any of the civil court proceedings, that the spill did not come from the Presidente Illia. However, the findings in the criminal proceedings will have some bearing when the civil judge delivers her decision. <2> <3> The effect of being placed on probation can be to temporarily suspend the execution of a sentence for the period of probation. The Court may impose conditions on the offender which, if complied with, may result in the revocation of the original sentence. In the Federal Court of Comodoro Rivadavia there is just one federal judge who deals with both criminal and civil matters. Although civil and criminal actions proceed separately in the civil and criminal sections respectively, the cases are decided by the same judge.

4 IOPC/OCT15/3/ Civil proceedings Claim by the Province of Chubut 5.1 A legal action was brought in the Federal Court in Comodoro Rivadavia (Civil Section) by the Chubut Province against the master and the owner of the Presidente Illia claiming compensation for the damage caused by the incident, including environmental damage. The claim was not quantified, pending an assessment of damage to the environment. The shipowner submitted points of defence denying its liability for the spill and requested the Court to bring the 1992 Fund into the proceedings. The Court agreed to this request and the 1992 Fund was formally notified. The 1992 Fund, based on the investigations of its experts, submitted pleadings arguing that the most likely source of the spill was the Presidente Illia. However, in its pleadings the 1992 Fund also considered the possibility that the source of the spill could have been another ship, the San Julian, which was close to the area at the time of the incident. 5.2 In June 2014 the owner of the Presidente Ilia and its insurer reached an out-of-court settlement with the Chubut Province. As the claim was not related to pollution damage as defined in the Conventions, this settlement would not be counted against the ship s limitation under the 1992 CLC. Other claims 5.3 One action for losses of AR$ ( 2 541) in the fisheries sector remains pending against the owner of the Presidente Illia and the West of England Club in the Appeals Chamber of the Federal Court of Comodoro Rivadavia (Civil Section). Some 20 claims previously dismissed by want of prosecution have also joined this action. 5.4 A new claim has recently been filed against the owner of the Presidente Illia and the West of England Club in the Federal Court of Comodoro Rivadavia (Civil Section). No quantum of alleged loss has yet been put forward. The claimants had previously brought an action, which had been dismissed by the Court for want of prosecution. This suit is therefore not considered by the shipowner and the Club to have any merit. 5.5 All other claims have been dismissed for want of prosecution. Some claimants appealed that decision but so far the decisions have been upheld by the Court of Appeal. Judgement in one further case currently remains pending. 5.6 Action by the 1992 Fund against the owner of the San Julian In December 2010 the 1992 Fund brought an action in a Civil Court of Buenos Aires against the owner of the San Julian and its insurer in order to protect its compensation rights in case the Argentine courts were to find that the spilling vessel was not the Presidente Illia but the San Julian. The parties have agreed to stay the proceedings pending the resolution of the civil actions brought by claimants against the owner of the Presidente Illia and its insurer. 5.7 Action by the owner of the Presidente Illia against the 1992 Fund An action has also been brought by the owner of the Presidente Illia and the West of England Club against the 1992 Fund in Buenos Aires, in order to protect their compensation rights against the 1992 Fund in case it was finally established that the spill originated from a tanker other than the Presidente Illia. The parties have agreed to stay the proceedings pending the resolution of the civil actions brought by claimants against the owner of the Presidente Illia and its insurer.

5 IOPC/OCT15/3/ Director s considerations 6.1 An investigation into the cause of the incident by the Federal Court of Comodoro Rivadavia (Criminal Section) reached a preliminary decision that the spill originated from the Presidente Illia. However, the shipowner and the insurer of the Presidente Illia contest liability. 6.2 Taking into consideration that criminal court decisions are not binding on civil judges, the owner of the Presidente Illia will be entitled to prove, in any of the civil court proceedings, that the spill did not come from the Presidente Illia. There remains only one legal action against the owner of the Presidente Illia and the West of England Club (see paragraph 5.3 above). The legal action by the owner of the Presidente Illia and the West of England Club against the 1992 Fund (see paragraph 5.7 above) is also still outstanding. 6.3 Discussions were held between the 1992 Fund and the West of England Club. It was agreed that the shipowner and its insurer would pay claims for compensation assessed and approved in accordance with the principles set out in the 1992 Civil Liability and Fund Conventions. If however it is finally established that the oil which impacted the coast did not come from the Presidente Illia but from another ship as defined in the 1992 CLC, the owner of the Presidente Illia and the West of England Club would recover from the 1992 Fund the amounts of compensation paid. The West of England Club has paid all valid claimants. It seems likely that the total admissible damage caused by the spill will fall within the shipowner s limit. 6.4 Once the legal actions against the owner of the Presidente Illia and the West of England Club have been resolved, it will be for the shipowner and the Club to decide whether to pursue their legal action against the 1992 Fund. If that action was withdrawn, it would be possible to close this case without a resolution of the liability of the owner of the Presidente Illia. 6.5 If the 1992 Fund is eventually not liable to pay compensation, the Fund will withdraw its legal action against the owner of the San Julian and its insurer, brought in order to protect its compensation rights in case the Argentine courts were to find that the spilling vessel was not the Presidente Illia but the San Julian. 7 Action to be taken 1992 Fund Executive Committee The 1992 Fund Executive Committee is invited to take note of the information contained in this document. * * *

6 ANNEX BACKGROUND INFORMATION - INCIDENT IN ARGENTINA 1 Incident Following reports of oil at sea on 26 December 2007, the Argentine authorities undertook over-flights of the coastal area off Caleta Córdova, Chubut Province, Argentina, and reported a slick covering about 14 km2 and estimated to contain about tonnes of crude oil. Later the same day, a significant quantity of oil impacted the shoreline in Caleta Córdova. A total of 5.7 kilometres of coast was reported to have been affected. Several vessels were investigated as the possible source of the pollution, one of which was the Presidente Umberto Arturo Illia (Presidente Illia), which was engaged in cabotage trade around the Argentinean coast. It was suggested that the Presidente Illia could have caused a spill of oil whilst loading Escalante crude oil on 25 and 26 December 2007 at a loading buoy off Caleta Córdova. The owner of the Presidente Illia and its insurer contest liability and argue that the oil which impacted the coast must have come from another source. 2 Impact 2.1 Some 400 birds were reported to have died as a result of the spill. Animal welfare and environmental associations, together with some 250 volunteers, undertook bird rescue and rehabilitation. A bird recovery centre was set up in an abandoned poultry farm. 2.2 Local fishing activities were disrupted, although the operator of the loading buoy arranged for transport of the subsistence fishermen to alternative sites further along the coastline to enable them to continue their fishing operations. Nevertheless, the fisheries sector suffered economic losses. 2.3 The area affected by the spill was also used for recreational purposes which led to claims for losses in the tourism sector. 3 Response operations 3.1 Clean-up operations on the shoreline were undertaken from 27 December 2007 to 22 February 2008 by local contractors under the supervision of the local government. 3.2 Clean up was concentrated on the 1.5 kilometres of coastline most heavily oiled and involved the removal of some oiled beach substrate. Local environmental scientists advised against this measure and less intrusive methods of clean up were used thereafter. 3.3 Approximately 160 m3 of oily water and 900 m3 of oily debris were collected during the clean-up operations. 4 Applicability of the Conventions 4.1 At the time of the incident Argentina was a Party to the 1992 Civil Liability Convention (1992 CLC) and 1992 Fund Convention. 4.2 The Presidente Illia was insured for pollution liabilities with the West of England Ship Owners Mutual Insurance Association (Luxembourg) (West of England Club). 4.3 The limit of liability of the owner of the Presidente Illia under the 1992 CLC is estimated to be 24 million SDR. It is however unlikely that the total amount of the damage will exceed the shipowner s limit of liability, in which case the 1992 Fund would not be called upon to pay compensation. 4.4 The shipowner and his insurer maintain that the Presidente Illia did not cause the spill that impacted the coast. However, following discussions between the 1992 Fund and the West of England Club, it was agreed that the shipowner and his insurer would pay claims for compensation assessed and approved in accordance with the principles laid down in the 1992 Civil Liability and Fund IOPC/OCT15/3/7, Annex, Page 1

7 Conventions. It was agreed that if it is finally established that the oil which impacted the coast did not come from the Presidente Illia but from another source, the shipowner and the West of England Club would attempt to recover the amounts of compensation paid from the party responsible for the oil spill. It was also agreed that if it is proved that the oil spill must have come from a tanker other than the Presidente Illia but it remains unknown which one, a so-called mystery spill, the shipowner and the West of England Club would recover the amounts of compensation paid from the 1992 Fund. 5 Investigations into the cause of the incident 5.1 Soon after the spill the Argentine Coast Guard (Prefectura Naval) started an investigation into the incident. The Coast Guard inspected the Presidente Illia both in Caleta Córdova and in the port of discharge, Campana. These inspections revealed a fault in the ballast system and the presence of residues of crude oil in three ballast tanks. 5.2 A number of other vessels in the area were inspected by the Argentine Coast Guard but all were allowed to continue on their passage. 6 Claims for compensation 6.1 Three hundred and thirty-one claims for compensation for a total of AR$53.3 million and US$ have been submitted. All valid claims arising out of this incident have been settled. As at 31 October 2014 the payments made by the West of England Club totalled AR$5 million. A number of claims can be considered as time-barred or have been rejected. 7 Criminal proceedings 7.1 The 1992 Fund appointed an Argentine lawyer to follow the legal proceedings initiated as a result of this incident. 7.2 An investigation into the cause of the incident was commenced by the Federal Court of Comodoro Rivadavia (Criminal Section). Following a court order, the Presidente Illia was detained in Campana in January An inspection of the ship revealed a leak in the ballast line passing through Nº1 centre cargo tank. In a second inspection residues of crude oil were found in three ballast tanks. The Court investigated in particular the role of the shipowner s representative (Superintendente), the master and several other officers of the Presidente Illia, the operator of the loading buoy and the cargo inspector. 7.3 The province of Chubut submitted a request for security for US$50 million to the Criminal Court of Comodoro Rivadavia. The Court dismissed the request for security on procedural grounds. 7.4 In March 2008 the Federal Court (Criminal Section) rendered a preliminary decision where five persons including the master, officers and crew were charged with a water pollution offence under Argentine environment law, whilst the shipowner s representative (Superintendente) was charged under Argentine criminal law with having hidden information and evidence. 7.5 The Court considered that whilst the Presidente Illia was loading Escalante crude oil on 25 and 26 December 2007 at a loading buoy off Caleta Córdova, an unknown quantity of the oil that was being loaded had entered the ballast system due to a fault in the ballast line and had subsequently been spilled during the deballasting process. 7.6 The Court stated that its conclusions were supported by chemical analyses which show that remains of hydrocarbons were found in the ballast pipes, as well as in the pump of segregated ballast from the Presidente Illia, and that those remains matched the type of oil loaded at the loading buoy, and were also substantially similar to the samples taken on the shore in Caleta Córdova. When the authorities carried out their inspection and took samples upon the vessel s arrival at the port of discharge, they observed the dripping of hydrocarbon coming from the ballast-discharging pipe. Moreover, information contained in the relevant reports by the cargo inspector allegedly indicated that the IOPC/OCT15/3/7, Annex, Page 2

8 quantity received ashore at the discharge port was notably less than the quantity transferred to the ship at the loading port. 7.7 The accused parties appealed, having pleaded not guilty, thus leading to the opening of the trial phase. The accused parties applied to be put on probation <1>. The request was denied but the accused parties appealed against this decision. The file has been under the consideration of the Criminal Court of Appeals since February The shipowner and the insurer maintained that the Presidente Illia was unlikely to have caused the damage. They argued that any spill caused by the Presidente Illia was very minor and highly unlikely to have reached the coast and that the oil that had reached the coast must therefore have come from another source. The shipowner and the insurer also argued that anonymous oil spills are frequent in Caleta Córdova and questioned the validity of the analysis carried out by the laboratory appointed by the Court. 7.9 Taking into consideration that criminal court decisions are not binding on civil judges, the owner of the Presidente Illia will be entitled to try and prove, in any of the civil court proceedings, that the spill did not come from the Presidente Illia. However, the findings in the criminal proceedings will have a weight when the civil judge delivers a decision. 8 Civil proceedings 8.1 A legal action was brought in the Federal Court in Comodoro Rivadavia (Civil Section) by the Chubut Province against the master and the owner of the Presidente Illia claiming compensation for the damage caused by the incident, including damage to the environment. The claim was not quantified, pending an assessment of damage to the environment. The shipowner submitted points of defence denying his liability for the spill and requesting the Court to bring the 1992 Fund into the proceedings. The Court agreed to this request and the 1992 Fund was formally notified. The 1992 Fund, based on the investigations of its experts, submitted pleadings arguing that the most likely source of the spill was the Presidente Illia. However, in its pleadings the 1992 Fund also considered the possibility that the source of the spill could have been another ship, the San Julian, which was close to the area at the time of the incident. 8.2 In June 2014 the owner of the Presidente Ilia and its insurer reached an out-of-court settlement with the Chubut Province. As the claim was not related to pollution damage as defined in the Conventions, this settlement would not be counted against the ship s limitation under the 1992 CLC. 8.3 One action for losses of AR$ ( 2 600) in the fisheries sector remains pending against the owner of the Presidente Illia and the West of England Club in the Federal Court of Comodoro Rivadavia (Civil Section). The Fund has not been formally notified of this action. 8.4 All other claims have been dismissed for want of prosecution, although this decision is potentially subject to appeal by the claimants. 8.5 In December 2010 the 1992 Fund brought an action in a Civil Court of Buenos Aires against the owner of the San Julian and its insurer in order to protect its compensation rights in case the Argentine courts were to find that the spilling vessel was not the Presidente Illia but the San Julian. The parties have agreed to stay the proceedings pending the resolution of the civil actions brought by claimants against the owner of the Presidente Illia and its insurer. <1> The effect of being placed on probation can be to temporarily suspend the execution of a sentence for the period of probation. The Court may impose conditions on the offender which, if complied with, may result in the revocation of the original sentence. IOPC/OCT15/3/7, Annex, Page 3

9 8.6 An action was also brought by the owner of the Presidente Illia and the West of England Club against the 1992 Fund in Buenos Aires, in order to protect their compensation rights against the 1992 Fund in case it was finally established that the spill originated from a tanker other than the Presidente Illia. The parties agreed to stay the proceedings pending the resolution of the civil actions brought by claimants against the owner of the Presidente Illia and its insurer. IOPC/OCT15/3/7, Annex, Page 4