Revisiting the Chinese Legislation on Compensation for Marine Ecological Damages: Lesson Learned from 2011 Bohai Oil Spill

Transcription

1 Revisiting the Chinese Legislation on Compensation for Marine Ecological Damages: Lesson Learned from 2011 Bohai Oil Spill Dr. Dan LIU, Associate Professor Shanghai University of Foreign Trade Hong Kong, June, 2012

2 Outline I. Oil spill in Bo Hai Bay in 2011 II. Legal framework of the compensation on marine ecological damages in China III. Legal issues regarding oil spill in Bo Hai Bay IV. Consideration and inspiration

3 I. Oil Spill in Ba hai Bay Background of the oil spill in Bo Hai Bay: Bohai spill started in the Penglai 19-3 oil field in early June and was brought to the attention of environmentalists and the media via microblogs on June 21. Penglai 19-3 oil field: a joint venture between CNOOC and the ConocoPhilips China (CPOC). CNOOC - 51% stake, CPOC - 49% and actually runs the field.

4 Recent oil spill accidents Comparison Gulf of Mexico Oil Spill Bohai Oil Spill Chevron leak in Brazil D/M/Y April 10, 2010 June 21, 2011 (estimated April 2011) Nov. 14, 2011 Drilling Company/Owne r BP(UK) ConocoPhilips (U.S) Chevron (U.S) Polluted areas 90, ooo square miles 6,200 square kilometers 918 square miles (2,379 sq. km) Volume of crude oil released 4.9 million barrels No data available yet Estimated more than 1,000 barrels Compensation $ 20 billion-fund; May exceed $ 100 billion RMB billion ($ 27 million, 1$=6.2RMB/Yuan) More than $ 100 million (Nov. 2012)

5 I. Bo Hai Oil Spill 2011

6 June 4th a visible oil sheen was found near Platform B of the Penglai 19-3 Oilfield June 17th platform C occurred a small accident June 21st micro-blog, the first to disclose the oil spill June 30th State Oceanic Administration started to investigate; CNOOC and ConocoPhillips did not give an official respond

7 July 1st ConocoPhillips China responded that emergency has been launched, the seepage point has been controlled July 3rd CNOOC said the range is relatively small, involving only 200 square meters July 5th State Oceanic Administration, news conference: the accident has been controlled, and the oil polluted 840 square kilometers

8 July 6th ConocoPhillips held a press conference in Beijing, CNOOC was regarded as a partner attending the meeting. According to ConocoPhillips introduction, the sheen clean-up was close to completion. July 30th State Oceanic Administration made ConocoPhillips to block the source of oil before August 31

9 August 7th new oil spill point was discovered in platform B of the Penglai 193 oil field, away from the last oil seepage point 10.8 meters. August 16th State Oceanic Administration issued a notice, hiring a legal service team to claim for the Bohai oil spill case August 19th ConocoPhillips, the first time to apologize, would bear the corresponding responsibility. August 20 ConocoPhillips China admitted: nine additional seepage points near Platform C of the Penglai 19-3 Oilfield.

10 August 24th ConocoPhillips held a media conference. The president Situ Rui apologized to the public, and promised to be responsible for the incident August 25th ConocoPhillips admitted 16 seepage points were found near platform C August 26th State Oceanic Administration issued a notice, urged the ConocoPhillips once again August 31st State Oceanic Administration was about to claim for damage

11 I. Oil Spill in Ba hai Bay Investigation Report of State Oceanic Administration (SOA), June : (1) Polluted areas: 6,200 square kilometers (nine times the size of Singapore), 870 square kilometers severely polluted. (2) Nature of the accident: very serious marine pollution accident caused by oil spill

12 I. Oil Spill in Ba hai Bay SOA official report, June 21, 2012: (2) Compensation: three parts i. Administrative penalty: 200, 000 RMB by CPOC ii. Loss in fishery industry -Mediation agreement reached between Ministry of Agriculture, CPOC, CNOOC and the governments of several provinces concerned -One billion was taken by CPOC and will be used for the loss of fishery resources, 100 million and 250 million allocated from the FUND will be used for restoration and conservation of fishery resources separately.

13 iii. Compensation for marine ecological damages, SOA Report Agreement reach on June 2012 between SOA on one side and CPOC and CNOOC on the other side. COPC and CNOOC will pay an aggregate amount of RMB billion, among which COPC will contribute RMB 1.09 billion to compensate for the marine ecological damage caused by the oil spill accident. In addition, CNOOC and COPC will each fund RMB 0.48 billion and RMB billion to resume the social responsibility for Bohai environmental protection used for ecological and environmental protection, reduction on oil pollutants discharge, habitat restoration of damaged marine ecological environment, monitoring and researching on oil spill impact on ecological environment.

14 II. Current Legal Framework in China 1. Domestic laws and regulations (1) Laws: Marine Environment Protection Law, Maritime Law, Maritime Procedural Law, Fishery Law, etc. (2) Regulations or measures proclaimed by the State Council or State Oceanic Administration: Regulations on The Administration of Environmental Protection in The Exploration and Development of offshore Petroleum, Administrative Regulations on the Prevention and Treatment of the Pollution and Damage to the Marine Environment by Marine Engineering Construction Projects, Regulations on Control Over-dumping of Wastes in The Ocean, Regulations on The Prevention Of Vessel- Induced Sea Pollution, Measures on the Regulation of the Oil Platform Abandonment, etc.

15 II. Current legal framework in China (3) Standards or Norms issued by the departments of the State Council SOA: Technical guidelines for ecological damage assessment on marine oil spill, etc. Ministry of Environmental Protection (MEP) (4) Local regulations Shang Dong Province: Interim Measures on the Management of Marine Ecological Damages and Loss Compensation (2010), Measures on the Assessment Method of Marine Ecological Damage and Loss Compensation (2010). Shang Dong becomes the first province to legislate on the compensation of marine ecological damages. Jiang Su Province: Art. 8, regional ecological reparation, in Regulations on the protection of marine environment of Jiang Su Province (implemented from 2007)

16 II. Current legal framework in China (5) Legal documents issued by the Supreme Court Summary of the Second National Working Conference on Foreign-related Commercial and Maritime Trials (2005) Regulation on the Trials of the Compensation on Oil Pollution Caused by Vessels (implemented from July 2011).

17 II. Current legal framework in China 2. The ratified International Conventions: 1969 Civil Liability Convention (CLC Convention 1969), China ratified on Jan, 1980; 1992 Protocol of the 1969 CLC Convention (CLC 1992), China ratified on Jan, 1999, enter into force from Jan 2000; 1992 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1992 Fund), only applied in Hong Kong; 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage, ratified on Dec 2008, enter into force on March 2009 in China.

18 I. Current legal framework in China 3. Comment: No systematic legal framework regarding the compensation for marine ecological damages; Co-existence of international conventions and domestic laws/regulations regarding the same matter; Precedent: Tasman Sea Oil Spill case

19 III. Legal issues regarding oil spill in Bo Hai Bay i. Defining marine ecological damage - Patmos, Antonio Gramsci, Haven etc., while few successful precedents in China - Marine Environmental Protection Law 1999 Article 95 (1) defines "pollution damage to the marine environment" as any direct or indirect introduction of substances or energy into the marine environment which results in deleterious effects such as harm to marine living resources, hazards to human health, hindrance to fishing and other legitimate operations at sea, impairment of the useful quality of sea water and degradation of environment quality. Art. 90, damages to marine ecosystems, not clear definition is further provided.

20 III. Legal issues regarding oil spill in Bo Hai Bay i. Defining marine ecological damage US OPA 1990, 33 U.S.C 2702: Art (b) (2), natural resources damages, damages for injury to, destruction of, loss of, or loss of use of, natural resources, including the reasonable costs of assessing the damage.

21 II. Legal issues regarding oil spill in Bo Hai Bay Tasman Sea Case Claims: Damages for marine environmental capacity, habitat restoration of damaged marine ecological environment, restoration of marine phytoplankton, restoration of marine species, researching and monitoring on oil impact Supported by the Court: researching and monitoring on oil impact Bo Hai Oil Spill Supported by the Agreement in 2012: ecological and environmental protection, reduction on oil pollutants discharge, habitat restoration of damaged marine ecological environment, monitoring and researching on oil spill impact on ecological environment

22 II. Legal issues regarding oil spill in Bo Hai Bay ii. Qualified Claimants for marine ecological damages 1. Art 90, Marine Environmental Protection Law (MEPL) 1999: -Section 1: whoever causes pollution damage to the marine environment shall remove the pollution and compensate the losses ; -Section 2: for damages to marine ecosystems department invested with power by the provisions of this law to conduct marine environmental supervision and administration shall, on behalf of the State, put forward compensation demand to those held responsible for the damages. 2. Who are these qualified claimants? Art 5 of MEPL, 3. In practice, overlapped claims for marine ecological damages may cause unnecessary problems.

23 ii. Qualified claimants a comparison Cases 1982 Dong Fang Hong Da Shi Claimants Department of environment protection and aquaculture departments 1997 Hai Cheng Fishery department 2002 Tasman Sea 2011 Bo Hai oil spill Department of environment protection and fishery department State Oceanic Administration

24 III. Legal issues regarding oil spill in Bo Hai Bay iii. Compensation regime for marine ecological damages: 1. Specification or guidelines: -Specification Method for the Calculation of Fishery Loss in Water Area 1996 (Ministry of Agriculture, Calculation Method 1996); -Specification Method for the Calculation of Fishery Loss 2008 (Standardization Administration of PR.C, Calculation Method 2008) -Technical guidelines for ecological damage assessment on marine oil spill (SOA, Technical Guidelines 2007) 2. Documents or legal interpretations: -Summary of the Second National Working Conference on Foreignrelated Commercial and Maritime Trials (2005) -Drawbacks

25 III. Legal issues regarding oil spill in Bo Hai Bay iv. Compensation limits and the evaluation criteria for the compensation 1. Art. 85 of Marine Environment Protection Law, in violation of the provisions of this law, undertakes to conduct offshore oil exploration and exploitation causing pollution damage to the marine environment, shall be warned by the competent State administrative department in charge of marine affairs and be fined not less than 20,000 RMB and no more than 200,000 RMB. Serious pollution, low cost (administration fine). 2. SOA Technical Guidelines 2007, used the experience of the U.S OPA 1990 as reference.

26 III. Consideration and inspiration, SCS Marine Environmental Protection, BP Statistical Review of World Energy 2012 Countries Oil reserves (thousa nd million tonnes) Share of world total Oil productio n (thousan d million barrels daily) Share of the world total Natural gas reserves (trillion cubic feet) Share of the world total Natural gas productio n (billion cubic metres) Share of the world total Malaysia % % % % Vietnam % % % % Indonesia o.6 0.2% % % % Thailand 0.1 <0.o5% % % % Brunei % % % % China 2 0.9% % % %

27 IV. Consideration and Inspiration i. Revising Marine Environment Protection Law (1999) ii. Fasten the process of establishing marine ecological reparation system iii. Perfection of the environmental public interest litigation iv. Establishment and perfection of the Oil Pollution Fund System

28 Thank you for your attention!