Despite a great reduction in the number of larger oil spills worldwide, numerous smaller, operational oil spills occur each year. The Britannia P&I Club warns to take into account even the small spill as it may not result in small claims.
The Club has been advised by Brazilian lawyers Siano & Martins Advogados Associados that it is important to treat a small spill carefully, even if initially it may appear logical to close the file after initial penalties have been paid to authorities and the clean up costs have been dealt with. There are several specific legal issues which create a problem for ship owners:
• Large civil public actions may be filed, alleging contamination of habitats or organisms and seeking substantial environmental damages. These may be further increased by the application of ’moral’ punitive damages, interest and inflation.
• Recent Brazilian Superior Court of Justice decisions have held that there is no time bar limitation for civil public actions (based on the long-term nature of the environmental damage)
• It may be possible for prosecutors to claim for damages to the environment without proving loss
This is enabled by the application of an exponential formula for the quantification of claims, produced by the São Paulo Environmental Authority: Value (US$) = k [10 (4.5 + x)] (commonly known as the CETESB formula). (K is the number of previous incidents for the party (being k =1 for a first-time spiller, k=2 if it is a second timer, and so on) and x considers the sum of five variables which are to be rated between 0.1 to 0.5: quantity spilled, vulnerability, toxicity, oil persistency, and organism mortality).
This seemingly arbitrary formula for calculating a loss is controversial. ITOPF has recently commented that; ‘the basic assumption of theoretical models that a release of oil will inevitably result in damage to environmental resources of a defined nature or scale is scientifically inaccurate… most notably, the formula does not give any consideration to clean-up conducted following an incident. Well managed clean-up operations invariably accelerate the rate of natural recovery of affected areas and, in doing so, help to mitigate the impact on the environment’
It is essential to base the defence of any such claim on solid evidence, properly preserved. The scientific assessment of material damages to the environment will be the best way to challenge presumed damages calculated by hypothetical mathematical models. Actions which may need to be undertaken include:
• finding out the potential source or sources of pollutants in the vicinity of the incident through field sampling;
• determining the scale and extent of any pollution release including the nature of any shoreline oiling and the habitats potentially impacted; and
• investigating the potential impact on local fisheries and tourism.
In conclusion, it is recommended that the above actions are considered even for smaller pollution incidents in Brazil. The costs of focused field surveys and sampling is generally quite modest and such actions may help to avoid liability and also to protect any potential rights of recovery against third parties for what are commonly very sizeable environmental damagerelated claims.
Source: The Britannia P&I Club