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Vernon Rive on the legal ramifications of the Rena spill

Vernon Rive on the legal ramifications of the Rena spill

With the Rena’s oil all but salvaged, many might breathe a huge sigh of relief. But the saga is by no way over and if anything, it poses some serious questions around the laws, or lack thereof, that exist in New Zealand to deal wth such incidences. To get a little clarity on the matter, we posed a few questions to AUT’s senior lecturer in law, Vernon Rive.

What sort of frameworks do we have in New Zealand to deal, in a legal sense, with disasters like the Rena oil spill? 

The main statutes at play which are currently in force are the Marine Transportation Act 1994 (MTA) and the Resource Management Act 1991 (RMA). As well as statute law, there is the potential for common law – in particular, the torts of negligence and nuisance – to apply. So, there is a reasonably dense thicket of law which needs to be worked through before liability can be established. 

In relation to the Rena incident, the legislation which has, to date, been the subject of most of focus, is the MTA. This act is the main vehicle used by the New Zealand government for putting into place domestic law to reflect New Zealand’s agreed international obligations and commitments under various shipping and pollution conventions. Important features of the legislation are that it imposes liability on the owners, operators and insurers of vessels sailing in New Zealand waters for incidents such as oil spills. However, that liability is subject to fixed and stringent limits which essentially depend on a variable only remotely related to the level of environmental risk: gross vessel tonnage. In the case of the Rena, it seems as if the liability cap may top out at about $12 million if intent or recklessness against the owner cannot be established. It would be very difficult to prove intent or recklessness on the ship owner’s part. 

An interesting question arises as to how the liability and offence provisions of the RMA might apply in the circumstances. Under the RMA, it is an offence to discharge contaminants to the marine environment within the 12 nautical mile, or ‘territorial waters’ limit. The Rena grounded within that area. There are potentially much higher financial penalties under the RMA (fines of up to $300,000 for individuals, $600,000 for corporate entities). As well, there is the potential for ‘enforcement orders’ with no upper financial cap which might come into play in relation to clean up activities. 

However, there is a provision in the MTA which might get in the way of RMA civil liability – section 86(3)(d). It basically says that the liability provisions of the MTA work to the exclusion of liability under other acts or at common law, except in some limited circumstances. 

A related issue is whether criminal liability provisions in acts such as the RMA are limited by s86(3)(d) MTA, as well as whether an ‘enforcement order’ under the RMA (such as one requiring physical remedial works to be done) is captured by the exclusion. 

As far as I am aware, the interaction between the RMA and MTA in these sorts of circumstances has not been tested by the courts. On its face, s86(3)(d) MTA presents a problem for sheeting home RMA civil liability. But you would expect the ship operators, owners, their insurers (and lawyers for them all) to be poring over the sections of the statute and thinking about arguments available for and against the relatively low MTA caps to hold. 

Are there both domestic and international laws at play here? 

Absolutely. As mentioned previously, the MTA gives effect to various international conventions and protocols that New Zealand has signed up to. At a broad level, the RMA applies a number of principles of international environmental law to New Zealand’s domestic situation. The EEZ Bill is said – by the Government, at least – to implement New Zealand’s rights and obligations under the UN Convention for the Law of the Sea. So there is a very strong element of interplay between international and domestic law in the framework dealing with activities in the coastal areas around New Zealand. 

New Zealand is a party to a number of international conventions relating to pollution and losses from shipping incidents. They include the International Convention on Civil Liability for Oil Pollution Damage 1969 (CLC 1969) an important instrument, but one which is not directly applicable, because it does not apply to pollution from oil spills from container ships like the Rena (but is directed instead towards oil tankers). 

New Zealand is also party to the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC Convention 1976). This convention prescribes upper limits for ship owners’ liability which reflected international consensus as to a fair and workable regime in 1976. Of course, inflation has seriously eroded the value of the 1976 limits. So, in 1996, a Protocol to the LLMC Convention was developed which updated liability caps to reflect 1996 values. To give you an idea of the dollar amounts involved, the 1996 Protocol would have increased the upper limit for a claim in circumstances such as the Rena incident from about $12.1 million to around $29 million. 

In 2001, a convention was developed under the auspices of the International Maritime Organization with the aim of regulating (on an international basis) claims relating to pollution resulting from oil spills from ships other than bulk oil carriers - the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunker Convention). 

In 2007, the New Zealand Government sought public input on whether it should become a party to the 2001 Bunker Convention and the 1996 Protocol to the LLMC Convention 1976.  Following a select committee process, a recommendation was made New Zealand sign up to both documents. But, as has been commented widely upon in media reports, the Government has neither enacted domestic legislation to give effect to it, nor ratified the Convention. 

It seems that successive New Zealand Government’s have had this on their “to do list” for a number of years, but have had other policy and legislative priorities, and have simply not got around to it.

Do you think the Rena disaster will lead to a review of the present legal frameworks? What could be improved? 

In 1999, international maritime lawyer Edgar Gold remarked “...nothing focuses policy-makers’ and legislators’ attention more directly than a marine disaster…” 

Without the 1967 Torrey Canyon disaster there would probably have been no International Maritime Organisation. Canada's Shipping Act underwent a major revision after the 1971 Arrow disaster. A similar legislative review took place in France after the 1978 Amoco Cadiz event, in the United States after the Exxon Valdez, and in Australia after the Kirki and Iron Baron disasters. The list goes on. 

I think it is almost inevitable that the Rena disaster will result in a strengthening of legal frameworks in New Zealand concerning maritime pollution from a range of sources. 

For a start, I would expect the government to be taking urgent steps to be putting in place a domestic regime that will allow it to ratify the 2001 Bunker Convention and the 1996 Protocol to the LLMC Convention. It really is a ‘no-brainer’ that these instruments be ratified. No New Zealand government will want to be in the same position as this one if another event like this occurred. 

Perhaps the more interesting thing to watch will be how the Rena incident influences the course of the EEZ Bill in 2012, alongside government policy regarding exploitation of hydrocarbon resources in the New Zealand EEZ and Continental Shelf. The government’s recently released Energy Strategy makes it clear that it is interested in exploration and potential exploitation of what might be a rich resource in New Zealand’s vast EEZ. Of course, the Government has been dismissive of attempts to link the Rena event with proposals to investigate deep sea mining, but my instinct is that it will be hard pressed to maintain that distinction throughout the course of the general election, and then through select committee and in parliamentary debates. In short, I expect that we will see a strengthening of environmental protection provisions in the EEZ Bill before that legislation is passed, and that Rena will have been one of the key contributors to that step.