1. Houston Marine Insurance Seminar 2002
Bedrock of MEL is OIL POLLUTION Act of 1990.
Before going to latest developmetns review bedrock statute.OPA 90

2. Pollution Basics Exposures OPA 90 CERCLA State law
Cargo owner’s contingent exposures
Criminal and civil penalties
US Pollutiion Law developed over period of time. Prior to OPA 90 Laundry list of statutes

3. 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

4. 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

5. Additional OPA 90 Issues Act of war /terrorism
Mobile offshore drilling unit (MODU)
Carrying oil from an offshore facility
Failure to cooperate

6. Liability limits often greater than federal limits
State Regulation
Liability limits often greater than federal limits
Financial responsibility requirements
Response/contingency planning

7. State Regulation…continued
Alaska
California
State law broader in scope

8. 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.
With the ten year old opa in the background, this brings us to the current events

9. 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

10. 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
Moving into another area, ballast wate reguation. Confused atmoshere for vessel owners and operators

11. Incident Response
Coverage conflicts among pollution, hull and P & I and underwriters
Salvage/wreck removal
Firefighting
Pollution

12. Ballast Water
Should invasive species events be considered “pollution?”
Will industry react?
Moving into another area, ballast wate reguation. Confused atmoshere for vessel owners and operators

13. 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

14. Criminal Liability Other Examples
Canadian Prosecution for Migratory Bird Convention Act (2001)
Other U.S. Prosecutions for Deliberate Discharges or falsification of Log Books

15. Criminal Liability
Miscellaneous issues
No more insurance for fines?
Financial guarantee system
Effect of criminal investigation on spill response efforts

16. Criminal Liability Solutions Legislative Educate Employees
Identify Criminal Defense Counsel
EPA / DOJ want compliance programs
Choose Location of a Violation Carefully

17. Defense Fines and Penalties Endorsement
Covers Certain fines under FWPCA, Refuse act and MBTA.
Legal Defense
Public policy

18. 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.
Goal of the sanctions is to isolate the Cuban government economically and deprive it of U.S. dollars.

19. 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.

20. Cargo Owners Alaska California Florida(contingent) Maryland
New Jersey (contingent)
North Carolina
Oregon
Washington

21. Additional Endorsements
Offloading
Public vessels
Derelict substance
Marina coverage
Storage ashore

22. Further Information