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3 rd AIDA Europe Conference Amsterdam, 26-27 May, 2011 26 th May 2011, Working Party Civil Liability TOPIC: “Should there be mandatory liability insurance covering marine pollution?”. Dr . Kyriaki Noussia, LL.M., Ph.D. noussia@gmail.com. 1. Introduction
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3rd AIDA Europe Conference Amsterdam, 26-27 May, 201126th May 2011, Working Party Civil LiabilityTOPIC:“Should there be mandatory liability insurance covering marine pollution?” Dr. Kyriaki Noussia, LL.M., Ph.D. noussia@gmail.com
1. Introduction Globalisation of environmental risk challenge to policy makers Rules of responsibility for environmental harm State practice For marine pollution liability: Doubtful if envir. liability rules = sufficient for compensation claims
2. The Environmental Pollution Liability Regime Marine pollution liability legal regime: developed via conventions, resolutions, codes that IMO enacted. 1973/78 International Convention for the Prevention of Pollution From Ships (MARPOL) International Convention on Civil Liability for Oil Pollution (CLC) 1992 International Convention on Establishment of International Fund for Compensation for Oil Pollution Damage (Fund) 1992
2. The Environmental Pollution Liability Regime (Ctd.) CLC & Fund Conventions: system of economic compensation for oil spill damage, measures to prevent oil pollution damage within territorial sea/ EEZ Strict marine pollution liability model of CLC & Fund (extended) • International Convention on Liability and Compensation for Damage in Connection with Carriage of Hazardous and Noxious Substances by Sea, (“HN”) 1996 • International Convention on Liability for Bunker Oil Pollution Damage (“BOPD”) 2001 HN & BOPD share environmental reinstatement provisions & scope of CLC 1992
2. The Environmental Pollution Liability Regime The EU Response EU recognises need for integrated approach envir. protection Main obstacle incommensurability of environmental goods EU original view marine pollution = international problem counted on M-S to ratify international conventions
3. Other Responses Montara Oil Spill – Timor Sea, Australia (Aug. 2009) Offshore Petroleum & Greenhouse Gas Storage Act 2006 (Cth) Deepwater Horizon Oil Spill (April 2010) • OPA 1990
3. Environmental Pollution Insurance Regime Categories of Recoverable Damage: • Damage for injury to / destruction of / loss of / or loss of use, of natural resources • Damage to real / personal property • Loss of “subsistence use” of natural resources • Loss of taxes, royalties, rents, fees, profits, or other revenues - due to injury, destruction or loss of real or personal property recoverable by the U.S.A., a state or a political subdivision
3. Environmental Pollution Insurance Regime (Ctd.) Categories of Recoverable Damage (Ctd.): • Damages equal to lost profits or impairment of earning capacity due to damage or destruction of real property, recoverable by any claimant • Damages for the net costs of providing increased or additional public services during or after removal activities
3. Environmental Pollution Insurance Regime (Ctd.) Possible Types of Insurance Coverage and Claims to Arise • first-party property (including “business interruption”) • loss of production income insurance coverage • “operator’s extra expenses” (for control of well) • D&O liability • event cancellation liability
3. Environmental Pollution Insurance Regime (Ctd.) Possible Types of Insurance Coverage and Claims to Arise • trade disruption • comprehensive general liability • physical damage • workers compensation
3. Environmental Pollution Insurance Regime (Ctd.) Possible Types of Insurance Coverage and Claims to Arise • employers liability • mitigation costs • specialty spill-related cleanup insurance • off-shore energy insurance (offshore physical damage, operator’s extra expense, excess liability)
3. Environmental Pollution Insurance Regime (Ctd.) Insurance key role – in ensuring pollution costs can be financed – in protecting related economic interests
4. Conclusions. Possible solution for better protection • shift financial risk burden to private interests benefiting from them establish mandatory liability insurance to avoid complex cross-border pollution litigation this will also help prevent selective forum shopping consequences hit interests involved Private interests • need actively be involved in allocation of financial burden of risks involved. Need for mandatory liability insurance covering marine pollution as it is unlikely to have it on a voluntary basis
