Black tide in Mauritius: liability and compensation according to the Bunker Convention

On the 25th of July 2020, the merchant ship Wakashio ran aground on the coral reef southeast of the tropical island of Mauritius in the Indian Ocean. The ship, a Japanese-owned but Panamanian-flagged freighter designed to carry unwrapped goods such as coal or wheat, was unloaded, but still carried around two hundred tons of diesel and 3,800 tons of heavy fuel oil. The boat was stuck for over a week before the first cracks appeared in the hull.

The accident happened almost in the same spot where the British sailboat (steel-hulled) Dalblair sank in 1902, while transporting coal to Mauritius. The remains of the hull, which still emerge from the surface of the water today, have become a sort of monument. Ironically and sadly, the wreck could have been a warning to the Wakashio.

The oil pollution incident is threatening an ecological catastrophe endangering corals, fish and other marine life already under threat from climate change[1]. Moreover, it risks bringing devastating consequences for the economy, food security, health and also for the tourism industry that was already suffering from the negative effects of COVID-19.

The Government of Mauritius on 7 August declared a state of environmental emergency and called for international help because its national oil spill contingency plan was not enough. Teams and equipment were sent from several countries, including France and Japan, as well as from international bodies, in particular the United Nations Development Program (UNDP) Mauritius and the International Tanker Owners Pollution Federation (ITOPF).

Assuming that their economy is based on the marine environment, the islanders are the most affected by ship accidents and oil spills. This is the reason why the environmental crisis underway in Mauritius is causing serious concern, as testifies the latest briefing “Mauritius oil spill highlights importance of adopting latest international legal instruments in the field”[2] written by Regina Asariotis and Anila Premti, from the United Nations conference on trade and development (UNCTAD).

The UN report recalls that «The seas and their use are regulated by numerous international conventions. But some have not been ratified by all the countries that could benefit from them, and others have yet to enter into force». This creates quite a few problems and a lot of confusion when oil spills occur, depending on the types of ships responsible for the pollution and if they have signed the existing conventions, not all parties have the same responsibility and can ask for compensation.

The problem that is that the different types of ships are subject to different international legal conventions. The report lined up all the recent and applicable legislation that should apply to the Mauritius oil spill “on the basis that, following the spill, liability and compensation will be key on two fronts: economic and environmental “[3].

Currently, the international regime on liability and compensation for oil pollution damage caused by persistent oil spills from oil tankers (IOPC-FUND regime) is incomplete and not effective. For example, it cannot be applied in the case of Mauritius in order to obtain protection, because the pan-flagged Japanese ship that sank is a bulk carrier, not an oil tanker.

“Bunker oil spills from ships other than tankers are covered by the International Convention on Civil Liability for Damage Caused by Oil Pollution of Bunkers”[4], which Mauritius, Panama and Japan have ratified. The Convention was written for an effective compensation available to people suffering damage from oil spills when transported as fuel in ship bunkers.

In the case of the shipwrecked MV Wakashio in Mauritius, the maximum compensation for economic losses and environmental restoration costs would be approximately 65.17 million dollars[5]. If an oil tanker had been wrecked, the International Oil Pollution Compensation Funds would have been applicable , which could have provided compensation of up to $ 286 million, more than 4 times the amount provided by the Bunkers Convention, and this for Mauritius could mean less financial aid to restore the environment and economic activity after the oil spill.

According to the Article 7.10 of the Bunker Convention, there is “a limited liability on the shipowner for pollution damage, associated with compulsory insurance and the applicant’s right of direct action against the insurer”. Exceptions to liability include cases where “the damage was wholly caused by the negligence or other wrongful acts of any government or other authority responsible for the maintenance of the lights or other navigational aids in the exercise of that function” (Art. 3.3).

Other exceptions, however, are provided not only by national regimes, but also by other international rules, such as those contained in the Convention on the limitation of liability for maritime claims[6] which provides even less protection depending on the dimensions (gross tonnage) of the ship. “Regarding the Mauritius oil spill, if the gross tonnage of the ship is 101.932 GT, any liability for the accident under the Bunker Convention would be limited to an aggregate maximum of approximately 46.19 million SDRs (approximately USD 65.17 million)”[7].

However, the final compensation for the oil spill in Mauritius will be calibrated on the basis of parameters that will be identified by the appropriate courts.

In conclusion, The UNCTAD Report of August 2020 underlines how dynamics that led to such a catastrophe remain unclear. However, one fact is certain: the accident in Mauritius stresses the importance of fast international legal instruments capable of responding to economic and environmental needs. Furthermore, clear guidelines are needed to identify not only the responsibility of those who committed the damage, but also the compensation in economic and environmental terms. The oil spills herald negative environmental and socio-economic consequences for developing countries. Sustainable Development Goal 14 invites us to protect life under water and this means minimizing pollution at any time possible, including taking all necessary precautions to manage environmental disasters when they occur.

[1] “Mauritius oil spill highlights importance of adopting latest international legal instruments in the field”, 14 August 2020, written by Regina Asariotis and Anila Premti. Article No. 58, UNCTAD Transport and Trade Facilitation Newsletter N.87 – Third Quarter 2020. https://www.ipcc.ch/sr15/chapter/spm/

[2] https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2451

[3]

[4] 2001,  International Convention on Civil Liability for Bunker Oil Pollution Damage  (Bunkers Convention)

[5] https://www.ipcc.ch/sr15/chapter/spm/

[6] LLMC, Convention on the limitation of liability for maritime claims of 1976, amended in 1996

[7] https://www.ipcc.ch/sr15/chapter/spm/