Pollution Basics • Exposures • OPA 90 • CERCLA • State law • Cargo owner’s contingent exposures • Criminal and civil penalties
OPA 90 Definitions • Act of god • Gross ton- ITC verses GRT • Owner and operator • Means owner and operator • Demise charterer • Shipyards and boat dealers • Tank vessel
OPA 90 Amendments • Exclusions from definition of tank vessel • Edible oils financial responsibility • Offshore facility financial responsibility • Interim payments • Response vessel financial responsibility • Clarification of liability in response
Additional OPA 90 Issues • Act of war /terrorism • Mobile offshore drilling unit (MODU) • Carrying oil from an offshore facility • Failure to cooperate
State Regulation • Liability limits often greater than federal limits • Financial responsibility requirements • Response/contingency planning
State Regulation…continued • Alaska • California • State law broader in scope
State Regulation…continued • OPA 90 does not preempt state law in many areas of regulation • U.S. v. Locke (INTERTANKO) • Supreme Court Decision • Federal law controls equipment and operating standards • State standards OK for liability and financial responsibility • Bottom Line : States continue to pass new requirements for financial responsibility,ballast water, and in other environmental areas.
Criminal Liability • Background • Greater potential that environmental violations will be treated criminally • Statutory Basis for Liability • OPA 90 • Migratory Bird Treaty Act • Refuse Act • Unseaworthyness
Ballast Water…continued • Issue – non-indigenous aquatic species • Federal act ineffective • States have enacted mandatory ballast water management programs • Problematic statutory solutions • Greywater regulations in Alaska
Incident Response • Coverage conflicts among pollution, hull and P & I and underwriters • Salvage/wreck removal • Firefighting • Pollution
Ballast Water • Should invasive species events be considered “pollution?” • Will industry react?
Criminal Liability • One Example: Eklof Towing (1998) • $9.5 million fine • Fine and Probation for company president and tug captain • Collateral Consequences • Lose Gov’t Contracts • Onerous terms of Probation
Criminal Liability • Other Examples • Canadian Prosecution for Migratory Bird Convention Act (2001) • Other U.S. Prosecutions for Deliberate Discharges or falsification of Log Books
Criminal Liability • Miscellaneous issues • No more insurance for fines? • Financial guarantee system • Effect of criminal investigation on spill response efforts
Criminal Liability • Solutions • Legislative • Educate Employees • Identify Criminal Defense Counsel • EPA / DOJ want compliance programs • Choose Location of a Violation Carefully
Defense Fines and Penalties Endorsement • Covers Certain fines under FWPCA, Refuse act and MBTA. • Legal Defense • Public policy
Foreign Asset Control Act • The Cuban Assets Control Regulations, 15 CFR Part 515 • issued by the U.S.Government on 8 July 1963 under the Trading With the Enemy Act in response to certain hostile actions by the Cuban government. • Administered by the U.S.Treasury Department's Office of Foreign Assets Control. • www.ustreas.gov/ofac • Goal of the sanctions is to isolate the Cuban government economically and deprive it of U.S. dollars.
Foreign Asset Control Act …Continued • Criminal penalties for violating the sanctions range up to 10 years in prison,$1,000,000 in corporate fines,and $250,000 in individual fines.Civil penalties up to $55,000 per violation may also be imposed. • ...No products,technology,or services may be exported from the united states to Cuba, either directly or through third countries,such as Canada or Mexico.…Provision of consulting services is also prohibited.
Cargo Owners • Alaska • California • Florida(contingent) • Maryland • New Jersey (contingent) • North Carolina • Oregon • Washington
Additional Endorsements • Offloading • Public vessels • Derelict substance • Marina coverage • Storage ashore
Further Information WWW.WQIS.COM