Houston Marine Insurance Seminar 2002
description
Transcript of Houston Marine Insurance Seminar 2002
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Houston Marine Insurance SeminarHouston Marine Insurance Seminar20022002
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Pollution BasicsPollution Basics
• ExposuresExposures
– OPA 90OPA 90
– CERCLACERCLA
– State lawState law
– Cargo owner’s contingent exposuresCargo owner’s contingent exposures
– Criminal and civil penaltiesCriminal and civil penalties
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OPA 90 DefinitionsOPA 90 Definitions
Act of godAct of god Gross ton- ITC verses GRTGross ton- ITC verses GRT Owner and operatorOwner and operator
– Means owner and operatorMeans owner and operator– Demise chartererDemise charterer– Shipyards and boat dealersShipyards and boat dealers
Tank vesselTank vessel
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OPA 90 AmendmentsOPA 90 Amendments
• Exclusions from definition of tank vesselExclusions from definition of tank vessel
• Edible oils financial responsibilityEdible oils financial responsibility
• Offshore facility financial responsibilityOffshore facility financial responsibility
• Interim paymentsInterim payments
• Response vessel financial responsibilityResponse vessel financial responsibility
• Clarification of liability in responseClarification of liability in response
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Additional OPA 90 IssuesAdditional OPA 90 Issues
Act of war /terrorismAct of war /terrorism Mobile offshore drilling unit (MODU)Mobile offshore drilling unit (MODU) Carrying oil from an offshore facilityCarrying oil from an offshore facility Failure to cooperateFailure to cooperate
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State RegulationState Regulation
Liability limits often greater than Liability limits often greater than
federal limitsfederal limitsFinancial responsibility Financial responsibility
requirementsrequirementsResponse/contingency planning Response/contingency planning
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State Regulation…continuedState Regulation…continued
AlaskaAlaska CaliforniaCalifornia State law broader in scopeState law broader in scope
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State Regulation…continuedState Regulation…continued
OPA 90 does not preempt state law in many areas of OPA 90 does not preempt state law in many areas of regulationregulation
U.S. v. Locke (INTERTANKO)U.S. v. Locke (INTERTANKO)– Supreme Court Decision Supreme Court Decision – Federal law controls equipment and operating Federal law controls equipment and operating
standardsstandards– State standards OK for liability and financial State standards OK for liability and financial
responsibilityresponsibility– Bottom Line : States continue to pass new Bottom Line : States continue to pass new
requirements for financial responsibility,ballast water, requirements for financial responsibility,ballast water, and in other environmental areas.and in other environmental areas.
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Criminal Liability Criminal Liability
BackgroundBackground– Greater potential that environmental Greater potential that environmental
violations will be treated criminallyviolations will be treated criminally– Statutory Basis for LiabilityStatutory Basis for Liability–OPA 90OPA 90–Migratory Bird Treaty Act Migratory Bird Treaty Act –Refuse ActRefuse Act–UnseaworthynessUnseaworthyness
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Ballast Water…continuedBallast Water…continued
Issue – non-indigenous aquatic speciesIssue – non-indigenous aquatic species– Federal act ineffectiveFederal act ineffective– States have enacted mandatory ballast States have enacted mandatory ballast
water management programswater management programs– Problematic statutory solutions Problematic statutory solutions – Greywater regulations in AlaskaGreywater regulations in Alaska
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Incident ResponseIncident Response
–Coverage conflicts among pollution, hull Coverage conflicts among pollution, hull and P & I and underwritersand P & I and underwriters–Salvage/wreck removalSalvage/wreck removal–FirefightingFirefighting–PollutionPollution
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Ballast WaterBallast Water
Should invasive species events be considered Should invasive species events be considered “pollution?”“pollution?”
Will industry react?Will industry react?
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Criminal LiabilityCriminal Liability
One Example: Eklof Towing (1998)One Example: Eklof Towing (1998)– $9.5 million fine $9.5 million fine – Fine and Probation for company president Fine and Probation for company president
and tug captainand tug captain– Collateral ConsequencesCollateral Consequences–Lose Gov’t ContractsLose Gov’t Contracts–Onerous terms of ProbationOnerous terms of Probation
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Criminal Liability Criminal Liability
Other ExamplesOther Examples– Canadian Prosecution for Migratory Bird Canadian Prosecution for Migratory Bird
Convention Act (2001)Convention Act (2001)– Other U.S. Prosecutions for Deliberate Other U.S. Prosecutions for Deliberate
Discharges or falsification of Log BooksDischarges or falsification of Log Books
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Criminal Liability Criminal Liability
Miscellaneous issuesMiscellaneous issues– No more insurance for fines?No more insurance for fines?– Financial guarantee systemFinancial guarantee system– Effect of criminal investigation on Effect of criminal investigation on
spill response effortsspill response efforts
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Criminal Liability Criminal Liability
SolutionsSolutions– Legislative Legislative – Educate EmployeesEducate Employees– Identify Criminal Defense CounselIdentify Criminal Defense Counsel– EPA / DOJ want compliance programsEPA / DOJ want compliance programs– Choose Location of a Violation Carefully Choose Location of a Violation Carefully
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Defense Fines and Penalties Defense Fines and Penalties EndorsementEndorsement
Covers Certain fines under FWPCA, Refuse act Covers Certain fines under FWPCA, Refuse act and MBTA.and MBTA.
Legal DefenseLegal Defense Public policyPublic policy
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Foreign Asset Control ActForeign Asset Control Act
The Cuban Assets Control Regulations, 15 CFR Part The Cuban Assets Control Regulations, 15 CFR Part 515515– issued by the U.S.Government on 8 July 1963 under issued by the U.S.Government on 8 July 1963 under
the Trading With the Enemy Act in response to the Trading With the Enemy Act in response to certain hostile actions by the Cuban government.certain hostile actions by the Cuban government.
– Administered by the U.S.Treasury Department's Administered by the U.S.Treasury Department's Office of Foreign Assets Control.Office of Foreign Assets Control.–www.ustreas.gov/ofacwww.ustreas.gov/ofac
– Goal of the sanctions is to isolate the Cuban Goal of the sanctions is to isolate the Cuban government economically and deprive it of U.S. government economically and deprive it of U.S. dollars.dollars.
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Foreign Asset Control Act …ContinuedForeign Asset Control Act …Continued
– Criminal penalties for violating the sanctions Criminal penalties for violating the sanctions range up to 10 years in prison,$1,000,000 in range up to 10 years in prison,$1,000,000 in corporate fines,and $250,000 in individual corporate fines,and $250,000 in individual fines.Civil penalties up to $55,000 per violation fines.Civil penalties up to $55,000 per violation may also be imposed. may also be imposed.
– ......No products,technology,or services may be No products,technology,or services may be exported from the united states to Cuba, either exported from the united states to Cuba, either directly or through third countries,such as directly or through third countries,such as Canada or Mexico.…Provision of consulting Canada or Mexico.…Provision of consulting services is also prohibited.services is also prohibited.
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Cargo OwnersCargo Owners
AlaskaAlaska CaliforniaCalifornia Florida(contingent)Florida(contingent) MarylandMaryland New Jersey (contingent)New Jersey (contingent) North CarolinaNorth Carolina OregonOregon WashingtonWashington
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Additional EndorsementsAdditional Endorsements
OffloadingOffloading Public vesselsPublic vessels Derelict substanceDerelict substance Marina coverageMarina coverage Storage ashoreStorage ashore
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Further InformationFurther Information
WWW.WQIS.COMWWW.WQIS.COM