Environmental issues becoming ever-more significant post-collisions

In the fifth of HFW’s six-part series on a fictional collision between an autonomous container ship and a cargo ship in the Harwich Channel outside Felixstowe harbour, Dominic Johnson, partner, and Michael Ritter, senior associate, introduced by Gavin Vallely, partner, Melbourne office, discussed the environmental issues arising out of the collision, which today were often the most expensive consequences of a casualty.

Johnson noted that in this instance that the MASS was fully electric, with zero emissions, but observed that in the cases of wrecks a zero emission vessel brought with it additional problems. The legal requirements when it came to disposing of batteries were strict, particularly within the EU. They also have a tendency to overheat if they are not kept cool, thus increasing the danger of fire in the event of a casualty.

Ritter pointed out that in this scenario we knew that the bulk carrier suffered a significant leak. The Bunker Convention 2001 would apply. The Merchant Shipping Act also coming into play as the casualty was within English territorial waters.

Johnson said that, although many governments were often disappointed that their own legislation failed to cover liability on the part of the owners to the extent they expected, the blue-chip P&I companies and larger shipowners tended to pay for clean-up costs for reputational reasons, often taking control of the clean-up operation. “It would take a brave insurer to say ‘no, this is our liability limit according to the law as we see it'”, Johnson said.

Cases of relevance that were cited included the Ice Prince (sank in English Channel in January 2008, spilling cargo, fuel oil and diesel oil) and the Aegean Sea (oil spill December 1992 off the Galician Coast).

Johnson said that for the matter of intent and defining intent was important, albeit often complex.

Another envronmental complexity in this instance came from the spilled containers, some of which were damaged. Johnson said that there was nowhere near as much sophistication when it came to law as there was for oil spillage. The nature of liability limitation is relevant as to whether the container is found to be cargo debris or wreck debris.

Because many owners were choosing, for reasons of cost control and reputational management, to arrange the clean-up themselves, rather than leave it to governments and then dispute the bill in the courts. But Johnson could foresee a situation with a one-ship owner insured with a small insurer facing a requirement from an insurer to “deal with it yourself and then come for the money if you can”.

Looking to the future, Johnson anticipated that hull costs relating to large batteries (and the concomitant environmental clean-up costs) could raise interesting issues, not least as to whether the battery was part of the ship or part of the fuel. He recalled a Top Gear episode where Richard Hammond crashed a top-of-the-range electric car, and it burned for three days. Johnson thought it inevtiale that new regulations and directives would come into play for the range of new fuels that would be adopted as shipping moved towards the IMO’s tager of zero emissions by 2050.