Subject: The Prestige, a single-hull oil tanker built 26 years ago, foundered on November 19, spilling thousands of tons of fuel into the sea. Faced with this new environmental disaster suffered by the coasts of Galicia, it is necessary to unravel the main legal and regulatory elements involved, from both a public and private international point of view, in order to assign liabilities and establish the bases for an effective policy that will prevent future wrecks of this kind.

Summary: From a technical and legal point of view or approach, this new case of maritime pollution caused by an oil spill brings to light the complex regulatory tangle involved in wrecks of this kind, and permits us to give an opinion regarding the supposed insufficiency of existing regulatory and technical means -at both national and European levels- for dealing with them. Given the objective circumstances that cry out for the adoption of much more severe control measures (every year, more than 50,000 ships sail past the Spanish coast, and the coast of Galicia in particular), legal research must be undertaken to try to project the conclusions already obtained in previous cases judged in Spanish courts onto this new environmental tragedy, to provide guidelines for efficient solutions and answers to the legal kaleidoscope of subjective and objective factors (both contractual and non-contractual) linked to the wreck of the Prestige, connected, as they are, to a large number of national legal codes, International Conventions and EU legislation.

Analysis: The Prestige, a 26-year old tanker, sailed from Lithuania with 77,000 tons of fuel oil. The ship was heading for Gibraltar “under orders”, that is, as is usual in this type of maritime traffic, it sailed with that destination, but expecting at any time to change it at the owner’s orders. This is a frequent practice, since the load may not be entirely sold when the tanker sets sail, and the final destination is determined by the purchasers. International oil trade intermediation is a business that is barely controlled, quick, agile, and involving numerous operators, with frequent changes of ownership of the transported load and contracts. At any rate, this case makes it possible to unravel the complex network of companies involved in this type of cargo: on the one hand, the Mare Shipping company (Liberia), was the registered owner of the ship; the Universe Maritime company (Greece), Mare Shipping’s management company and actually in charge of the tanker; thirdly, the Crown Resources company (Russia, UK, Switzerland), the company that chartered the tanker, belongs in turn to a Russian business or corporate conglomerate, the Alfa Group, based in Switzerland, and with offices in London and other places.

The numerous legal factors that are involved in this accident make it possible to analyze the option of civil proceedings as opposed to criminal proceedings (which are the ones initially followed, as occurred ten years ago in the case of the Aegean Sea), and evaluate in turn the effect of factors that are within the scope of Public International Law and Private International Law (different nationality of the parties, the use of a flag of convenience, or the adoption of control measures in ports, among others). Finally, this new environmental disaster reveals yet another additional complication: the interrelationship and interaction between the various International Conventions whose regulations affect this matter, in questions such as the limited liability of the owner, the quantification of the liability for oil pollution, and even the conventions and regulations that cover maritime cargo transport.

Unfortunate Precedents and Legal Lessons
Without attempting to make an exhaustive analysis of all environmental catastrophes derived from oil spills into the sea after the wreck of oil tankers off Spanish and European coasts, we find it is especially interesting to examine the final legal situation of some of the cases unfortunately best–known for their magnitude, to thus try to infer some preventive behavioral guidelines (for the future), and evaluate the legal iter that will be followed by the Prestige case.

The sadly infamous case of the Aegean Sea, an oil tanker that ran aground just off A Coruña carrying 80,000 tons of fuel, led to lawsuits being filed for an amount of more than 290 million euros, and were finally settled by an agreement between the owners, the insurers, and the Spanish State.

The Aegean Sea spilled over 70,000 tons of fuel in 1992, with very serious biological and environmental consequences, and a substantial legal component: the criminal procedures ended with a fine of 300,000 pesetas being levied against the captain of the wrecked ship, and a shared finding against the pilot service at the A Coruña harbor, which generated the pecuniary liability of the State.

The verdict, which found the captain guilty of criminal negligence and sentenced him to pay the above-mentioned fine, was accompanied by the establishment of the direct, civil, joint liability of the insurance company and the IOPCF (International Oil Pollution Compensation Fund ), and the recognition of the subsidiary liability of the ship’s owner, together with the above-mentioned allocation of liability to the State. Ten years after the wreck of the Greek ship Aegean Sea in A Coruña, during the current year 2002, the Official Register published the Royal Decree that authorizes the signature of agreements with the IOPCF for a total of 63.6 million euros, to take care of the payments to the victims, as a result of an inferred liability based on the abnormal operation of a public service, namely the work of the pilots in the A Coruña port, since they are public employees.

In sum, the finding of the direct liability of P&I and IOPCF, with the liability limits foreseen in the 1969 and 1971 Conventions (modified in 1992), and the subsidiary civil liability of the ship owner, also with the limits of the above-mentioned package of Conventions (CLC), was the result of the supremacy of international Conventions over the respective internal laws, though the case added a sentence against the Spanish Administration.

In the Prestige case there are no elements that can lead us to allocate pecuniary liability to a State, and therefore we must analyze the criminal legal iter that has been started, and evaluate its opportunity and adjustment to the accident.

Elements of Public International Law: can any State be subject to international liability for the wreck of the Prestige?
The answer, we must advise in advance, is negative, since there are no factors, despite the statements -more media-oriented than technical- made by political authorities and experts ever since the day of the accident, which could permit assigning direct or indirect liability to a State for the environmental catastrophe we are examining.

Considering the precedent of the Aegean Sea, it is evident that there are no objective elements in the current case that allow us to infer any factors leading to the pecuniary liability of either the Spanish State or any other government agency.

The fact that, as has been said, the initial destination of the wrecked ship was Gibraltar, which has no appropriate facilities for handling and refining oil and oil-derived products, does not generate a sufficient link to assign liability to the United Kingdom. We must remember that the current Community Directive does not specify what type of ships must be inspected, and in fact the Prestige already passed through Algeciras and Las Palmas in 1998, and the last inspection it underwent in Community waters was in Rotterdam, in 1999. The ship was inspected 18 months ago in China, and again six months ago, in Dubai, and in any case, we must insist that the final destination of the cargo is irrelevant for the purposes of allocating international liability.

Stating that the ship was going to visit the port of Gibraltar, and that this has allowed -and still allows- EU regulations on those matters to be circumvented, and that Spain reserves the right to take whatever actions it is entitled to for the breach of the tanker’s rules, thus generating added diplomatic tensions, has no legal basis whatsoever, since formally there has been no breach of mandatory inspection requirements.

It is true that the Gibraltar tax system attracts this type of “bargain market”, that is, trade in low quality products at an even lower price. We could decry unfair competition in that sense, but without any repercussions in the field of maritime safety as far as assigning liability is concerned.  Relating the tanker’s accident to tax evasion is neither reasonable nor legally defendable, and the key lies in a coordinated entry into force in all EU States of the measures that have already been adopted in directives which we shall detail later on.

Finally, the fight against flags of convenience also requires joint action, but we must not forget that the real rationale behind that fight is job-related, and not so much in the sphere of maritime safety.

Criminal versus Civil Procedures
The criminal proceedings begun in the Prestige case may become inadequate to determine the scope of the liabilities affected or involved, and may delay (as has happened in previous cases) the payment of the compensations established in the current International Conventions.

In principle, and as established therein, the cleanup of the coastline and the compensations would be paid for by the Prestige’s Protection Club (based in London), the owner of the cargo (the Crow Resource company), and the registered owner (Mare Shipping), who can in turn limit its liability.

In the context of the facts that finally led to the wreck, we must remember that the maritime authorities of the coastal States are authorized to order the mandatory towing of the ship or other measures, according to the International Convention Relating to Intervention on the High Seas, and can carry out any actions required to mitigate or prevent the danger from pollution by oil on their coasts.

The first court sentence adopted in the criminal proceedings has been to jail the ship’s  Captain, setting bail at three million euros. The forcefulness of this measure, considering that the ship had never been detained for safety reasons in any EU or American port, is a criminalization of the casualty that is not very recommendable from the point of view of the victims.

Furthermore, it is a complicated court case, long-lasting and with an uncertain sentence, and in which one can even question or have reservations about the scope of ius puniendi by the Spanish State: indeed, and according to the contents of Article 230 of the 1982 United Nations Convention on the Law of the Sea (ratified by Spain in 1997), States can only impose pecuniary penalties on foreign seamen involved in accidental oil spills in the territorial sea and the Exclusive Economic Zone, except in cases of intentional and serious acts of pollution in the territorial sea.

The intent of the Convention (which has hierarchical precedence in its application over internal Spanish laws) is clear, so it turns the materialization of that ius puniendi into a questionable factor that is not very operational from the point of view of repairing the damages and the expert evaluation of the factors that led to the casualty of the Prestige.

We must not forget that the above-mentioned International Conventions (CLC 92 and the Fund Convention 92) already foresee objective and automatic liability for damages, and a comprehensive compensation system whose immediate application is slowed down by criminal proceedings.

Applicable regulatory instruments: prevention and repair of environmental and private damages caused
The wreck of the Prestige requires a careful selection of the applicable regulation or regulations, because three large sets of regulations coincide in this case: internal Spanish legislation, international convention regulations, and, finally, Community Law rules.

The existence, in turn, of successive International Conventions on the same subject (for example, in the field of limiting liability) and the above-mentioned close interrelationship between Conventions complicates even further the analysis of the subjective and objective determination of the liability for oil pollution.

In the already cited Conventions such as the IOPCF or Civil Liability (CLC) there is a limit to the compensation set at 190 million euros, and in the latter (which focuses on the liability of the owner), the final amount is calculated according to factors such as the cargo and the weight of the ship.

The objective or goal of both Conventions is to complement each other, so that every single victim of pollution damage is compensated to the extent that he or she has not obtained full and adequate compensation, and always following the guidelines of the 1969 Convention, which includes the cost of the eventual preventive measures that are adopted.

In principle, the international clubs (Protection and Indemnity Club or the London Steamship Mutual) will initially take care of the compensations for the black tide caused by the Prestige, and afterwards it will be necessary to delve into the complex financial and legal tangle that surrounds the companies involved, to assign the respective liabilities, be they direct or subsidiary. With the above-mentioned hitch of the criminal proceedings that have been opened, the two aforementioned International Conventions (CLC and Fund, from 1992) automatically cover damages with funds from owners’ clubs and from countries that trade in oil, thus guaranteeing the repairs: the IOPCF and the clubs will set up offices on site, and will subsequently lodge their claims against those who are liable.

European Regulations
The preventive aspect against catastrophes such as those of the Prestige is currently reflected in various Community regulations, both in the field of international legal jurisdiction (Art.5.3 of the Brussels Regulation-I 44/2001, which refers to the courts of the place where the harmful event occurred or may occur), and in various Community directives that shall be examined below.

Some 700 ships are inspected in European ports every year, and once the package of Community Directives is transposed into the respective national codes and they come into force, it is estimated that up to 4,000 ships will be forced to undergo such inspections each year.

The current Community directive on port inspections, in force since 1997, establishes that ships that are dangerous due to their size, advanced age, flag of convenience, or single hull will be forbidden to sail in Community waters starting in 2005. The pending task continues to be that –given how close such ships sail to the coast– new, stricter rules are adopted in this key preventive aspect.

This current directive requires the competent port authorities to randomly inspect 25% of ships entering such ports, without taking into account how dangerous they are. There are two basic measures, already foreseen in the draft directives but still not in force, namely imposing strict regulations on ship classification societies (thus insisting on quality criteria and acceptance of liability), and forcing inspections to focus on the so-called garbage ships. After the tragedy of the tanker Erika (in December 1999, which took place in French waters off Brittany), the EU decided to adopt additional preventive measures, in two packages of directives, known as Erika I and Erika II.

Together with that second package of measures that have already been adopted by the Community authorities, foreseeing greater control of maritime traffic by the European Maritime Safety Agency (which in principle, unless its implementation is moved up, will be operational in August 2003), we must demand additional measures from a legal point of view, since such regulations may finally be simply circumvented by those ships, by not sailing into European ports.

The deadline for those three directives on maritime safety to be transposed or added to national legal codes expires in principle in July 2003 (for the first two) and in February 2004 (for the third one): the first two focus on the ship classification societies, in charge of inspections and allocating a ship to a specific category or function, and on the reinforcement of ship inspections in port, whereas the third directive regulates matters concerning ports of refuge, the mandatory installation of black boxes on board ships, and other measures that stress preventive aspects. At present, none of the fifteen Member States comply with the maritime safety regulations foreseen in those EU directives, but the climate of sensitivity that has been arisen after the latest catastrophe of the Prestige makes it likely there will be a coordinated political decision to shorten the above internal transposition periods.

Conclusions: it is necessary to reinforce preventive measures and the control of maritime traffic.

We must develop the full potential of international laws that are already in force; thus, and within the 200 miles of the Exclusive Economic Zone, the 1982 UN Convention on the Law of the Sea authorizes coastal countries to intervene in cases such as this one, in advance and preventively, because among others, Articles 204 and ff. establish the possibility of implementing environmental surveillance and assessment measures, as well as taking such action as needed to prevent, mitigate and control maritime pollution, even outside the territorial sea, as long as they are proportionate to the real or potential damage, and in order to protect their coasts or connected interests, including fishing. The 1969 Brussels Convention on intervention in case of accidents with maritime oil pollution recognizes identical faculties, even beyond 200 miles.

In sum, we face a new environmental catastrophe, and Spain should think about adopting unilateral preventive/protective measures, and request, in addition to the disbursement of Community funds, shorter deadlines for the entry into force of the above-mentioned measures, to guarantee efficient risk prevention.

The comparative example in US legislation is very revealing: the so-called Oil Pollution Act of 1990 established the unlimited civil liability of the owner for oil spills, mandatory double hulls for all ships entering US ports, and forbade single-hull ships from coming within 50 miles of its coasts, in addition to a requirement for putting in place contingency clean-up plans. The result of these regulations is conclusive: there has not been a single serious incident since they were adopted.

Only by implementing measures in this direction will we be able to stop the serious sequences of disasters such as that of the Prestige, and guarantee the necessary balance between the development of maritime traffic within and without the Community, and the adoption of effective prevention regulations for the future.

Juan José Álvarez Rubio
Professor of International Private Law.UPV/ EHU