Oil and Nigeria. Two new cases.

  1. In Federal Republic of Nigeria v MT Asteris (Charge FHC/L/239c/2015) the Federal High Court convicted a vessel and its crew of charges that included conspiracy to deal, dealing with, attempting to export and storing crude oil without lawful authority or a licence. The vessel had been arrested while drifting in Nigeria’s exclusive economic zone and Lloyds List data showed that the vessel had been trading in Nigeria. The vessel had 3,423.097 metric tons of petroleum products on board but no documents confirming their origin.
  2. Following Shell’s $55m settlement of an oil spill claim in the Bodo community in Nigeria, two new claims have been filed against Shell in the High Court by London solicitors, Leigh Day, in respect of spills in the Ogale and Bille communities.In the Ogale action, it is alleged that leaks are due to pipelines and infrastructure being several decades old and in a poor state of repair. In 2011 the United Nations Environmental Programme (UNEP) published an Environmental Assessment of Ogoniland which included extensive testing of the Ogale Community. UNEP’s recommended: (i) Emergency measures to provide adequate sources of drinking water to impacted households; (ii) Immediate steps to prevent existing contaminated sites from causing further pollution and; (iii) A substantial programme of clean up and decontamination of impacted sites. It is alleged that Shell has failed to comply with the recommendations of the UNEP Report and to clean up the sites polluted by their oil.In the Bille action it is alleged that creeks, mangroves and island communities have been devastated by oil leaks since the replacement of the Bille Section of the pipeline in 2010. The key issue in the claim will be whether Shell can be liable for failing to protect their pipelines from damage caused by third parties.On 2 March 2016 at the Technology and Construction Court, His Honour Judge Raeside QC, ruled that formal legal proceedings against Shell can now be served on Shell Nigeria (the Shell Petroleum Development Company of Nigeria Ltd) who will be joined to the English proceedings alongside Royal Dutch Shell plc.

When is the Fund not the Fund? Venezuela’s unsuccessful fishing expedition.

The 1971 IOPC Fund ceased to exist on 31 December 2014. The 1992 IOPC Fund, however, is still going strong. This fact was not lost on the Venezuelan fishermen’s union who lodged a claim in Venezuela in respect of damage sustained as a result of an oil spill in May 1997 from the tanker Plate Princess. In 2009 they obtained a judgment against the shipowner and also against ‘The International Fund for Compensation for Oil Pollution Damage’. In March 2015 Master Eastman made a Registration Order in respect of that judgment.

In Sindicato Unico de Pescadores del Municipio Miranda del Estado Zulia v. IOPC [2015] EWHC 2476 (QB); [2016] 1 Lloyd’s Rep Plus 2, Picken J has set aside the Registration Order. The 1992 Fund was not involved in an incident which occurred at a time when Venezuela, although a signatory to the 1992 Protocol, had yet to ratify, accept, approve or accede to it. The Venezuelan judgment could not be regarded as applying to the 1971 Fund Convention as amended by the 1992 Protocol. Even if the judgment had been against the 1992 Fund, there was no relevant exception to the 1992 Fund’s immunity under art. 5(1) of the International Oil Pollution Compensation Fund 1992 (Immunities and Privileges) Order 1996. The only possible exception, in art. 5(1)(b) “in respect of actions brought against the 1992 Fund in accordance with the provisions of the [1992] Convention” would not apply.

The Commission has spoken. No EU civil liability regime for offshore oil and gas operations.

The 2013 Offshore Safety Directive is the EU’s response to the ‘Deepwater Horizon’ incident in 2010. Although article 4(3) requires Member States to require the licensee to maintain sufficient capacity to meet their financial obligations resulting from liabilities for offshore oil and gas operations, and to put in place compensation procedures, the Directive does not address the question of civil liability in the event of pollution from an offshore installation. This remains to be dealt with by national laws. However, article 39 mandated the Commission to prepare three reports on liability: (1) on the “availability of financial security instruments, and on the handling of compensation claims, where appropriate, accompanied by proposals”; (2) on the “assessment of the effectiveness of the liability regimes in the Union in respect of the damage caused by offshore oil and gas operations”; (3) on “the appropriateness of bringing certain conduct leading to a major accident within the scope of Directive 2008/99/EC of the European Parliament and of the Council of 19 November 2008 on the protection of the environment through criminal law.”

On 14 September 2015 the Commission produced a single report on all three issues COM(2015) 422. It proposes no new EU legislation in these areas. With regard to financial security, although there were currently only two compensation mechanisms in the EEA, namely OPOL and Norway’s Oil Pollution Act 1998, the provisions in art. 4 of the OSD should lead to significant improvements. With regard to civil liability, it was not currently appropriate to broaden liability provisions through EU legislation, noting that in certain cases, the Brussels I and Rome II regulations would prevent differences in national regimes from disadvantaging claimants from other EU Member States. Also the financial security requirements of the OSD might lead some Member States to reappraise their existing liability regimes for offshore accidents. The Commission would be able to conclude on the need for further steps by the time of the OSD’s first implementation report in 2019. With regard to criminal liability, given the transposition deadline for the OSD of 19 July 2015, it was too early properly to assess whether EU criminal law measures were needed for achieving effective levels of offshore safety in the Union