Oil Pollution Act

  • Date: May 06, 2011
  • Source: Admin
Webinar All Access Pass Subscription

OPA creates a $1 billion supplemental compensation Fund. It amends provisions of the Federal Water Pollution Control Act (FWPCA) concerning oil spills. It requires vessel and facility operators to file detailed oil spill response plans. OPA is actually a product of congressional debate for 20 years. Other laws also set up strict liability schemes.
Oil pollution liability and compensation
 OPA sets out liability for vessels and facilities. It defines standard of liability and enumerates compensable damages. It sets out provisions governing the functioning of the $1 billion Oil Spill Liability Trust Fund (OSLTF). It defines vessels, tank vessel, mobile offshore drilling units, facility, oil, person, owner or operator, responsible party, Q, incident, navigable waters, guarantor, exclusive economic zone, remove/removal among others. There are totally 37 definitions.
Elements of liability
Other laws do not affect the liability as under OPA and the liability is not limited to the value of  the property. Responsible party is liable for removal costs incurred by federal government, state government and Indian tribes.
 Compensable damages are defined for the following categories - natural resources, real and personal property, subsistence uses, revenues, profits and earning capacity, public services. Interest may also be recovered for claims not settled in time.
Natural resource damages
 Trustees of the natural resources are to assess damages, develop and implement plans for restoration, rehabilitation and replacement, and evaluate diminution of value.
  The National Oceanic and Atmospheric Administration (NOAA) published final regulations on Natural Resource Damage Assessments (NRDA) in 1994. The regulations set forth 3 components of damage assessment – pre-assessment phase restoration phase and restoration implementation.
  Defenses to liability
 3 complete defenses and one defense to particular claimant are possible. Complete defense is possible for an act of God, an act of war or an act/omission of a third party. Defense to claim of particular claimant is possible if the cause is the action or inaction of the claimant himself. If third parties are solely responsible for the incident, then they are held liable; employees or agents or contractors are not third parties.
Limits on liability
Liability of the responsible party is limited to the amount specified for the category. It may increase for acts of negligence, misconduct or violation of regulations. Liability limits for the categories may be reviewed/ adjusted by the President or the Congress.
 Foreign Claimant
Recovery by a foreign claimant is allowed and can be brought to a US court; no compensation must have been already recovered.
 Recovery by the responsible party
Recovery is allowed for the amount of the claim and recovery of the amount paid in excess of the claim is also allowed.
 Any person having a contribution in the incident can be brought action against. No party can be indemnified of the liability.
 Oil Spill Liability Trust Fund (OSLTF)
Previous funds established for similar purpose have been abolished and their funds have been transferred to the OSLTF. State funds have been preserved by OPA. OSLTF is funded by the tax on per barrel basis and can also borrow up to $1 billion from the treasury. The Internal Revenue Code (IRC) sets a $ 1 billion limit of spending per incident. Government and private uses of the fund have been specified and procedures have been established.
OPA sets up a notification and claims procedure. The OSLTF is used to compensate delayed or partial compensations by the responsible parties. The operator in-charge of the facility/ vessel is responsible for reporting an incident. Advertising regarding the claims is done by the private party if responsibility is accepted and by the government, if the responsibility is not accepted. Claims must be presented as per procedure and must be within a specified time period.
 Financial responsibility
Different responsibilities are set out for vessels and facilities. This must be demonstrated by sufficient evidence by the owner/guarantor of the vessel/facility by way of insurance, surety bond etc.
The person who compensates the removal/ damage costs subrogates the rights of the claimants. The fund is subrogated in respect to any claims settlements.
Litigation and jurisdiction
Resolution of claims is done in the order of first to responsible party, next to guarantor, last to the Fund. US federal courts have jurisdiction over all OPA cases. All actions must be undertaken within a specified (by OPA) time period.
 Relationship to other laws
No state or fed laws are preempted by OPA. Title II has amendments that allow transfer of funds from other previous laws to the OSLTF.
Title III concerns US participation in international conventions with respect to oil pollution liability and compensation. The House of Representatives were for the participation, but the Senate was not because international conventions were not as effective as that of the US.
Prevention and removal
Title IV concerns three measures to be taken for reducing oil spills from vessels and facilities - laws governing manning and operation of facilities, establishes a national planning and response system, increase in severity of civil and criminal penalties
OPA places a severe requirement on drivers and other related staff to be tested and cleared for drug and alcohol related regulations. The Coast Guard is entrusted with review of the standards of a foreign country regarding vessels that come to the US. The Coast Guard is to also consider additional factors regarding manning of vessels.
Significant marine casualties to the environment are to be reported. A licensed master or mate is to be additionally present with the pilot. Single hull tankers in some Northwest areas are to be accompanied with 2 tugs. More stringent requirements are placed for Prince William Sound, Alaska.
A number of studies are now required on the basis of which new regulations can be made. Tank vessels are now required to have a double hull, except those used to respond to oil spills or new vessels with capacity less than 5000 gross tons. Many other requirements are placed on the vessels.
Under OPA federal authorities have the responsibility of averting threats of oil spills and cleaning up those that occur. Activities are conducted according to the National Response System and the National Contingency Plan. OPA relies on private resources to mitigate or remove spills.
OPA gives federal government a wide range of alternatives to respond to a spill. States and local governments may only place additional requirements on the removal activities. Responder immunity is given to encourage prompt response by private parties - all subject to provisions as under the National Contingency Plan. OPA keeps the National Contingency Plan under the Clean Water Act and creates a new National Planning and Response System. The President is required to revise and republish the National Contingency Plan. Owners and operators are required to prepare response plans consistent with National Contingency Plan to remove discharges of oil. Plans must provide for the mobilization of resources in case of a spill under various circumstances and locations. Each vessel / facility must address a "worst case" discharge.
Under OPA amendments, violation of sec 311.b.3 of CWA is a criminal offense and not a civil one. Various penalties have been specified and prior conviction implies double penalties. Failure to notify also results in penalties. Criminal penalties are also provided for violation of vessel inspection, manning and operation requirements. Class I and class II (civil) penalties are also provided. OPA sets out a number of criteria for assessing level of civil penalties.
OPA sets forth the general requirements. Further definition and implementation is to be done by the Coast Guard.


Best Sellers
You Recently Viewed