OPA 90 Could Scare Carriers Into Discontinuing Service To U.S.

U.K. Chamber of Shipping, the punishing liability component of the U.S.

Oil Pollution Act of 1990 could lead some British carriers to discontinue service to the U.S.

In the event of a serious oil spill, the U.S. pollution act, passed in the wake of the Valdez disaster, increased liability eightfold to a minimum of $10 million. The act, moreover, allowed coastal states to keep intact their local laws exposing maritime companies to unlimited liability for damages caused by spills.

Also stated in the act is that carriers must obtain certification of financial responsibility from protection and indemnity clubs before they can call at American ports.

The U.K. chamber's director of shipping policy, Mark Brownrigg, said the immense risks associated with exposure to unlimited liability had made it difficult to obtain such certification and could eventually scare carriers away from serving the U.S. "Only the very largest companies can afford the costs associated with unlimited liability," he said. Since the act was first debated seriously, such threats have been made by such European carriers as Royal Dutch Shell Ltd., which has a huge fleet of tankers, and Maersk Line.

Other companies, however, have made it clear that the U.S. market is so lucrative that they will continue to serve the trade even though exposure to unlimited liability could be disastrous for the line.

Other stories from November 1991 issue

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First published in 1881 Maritime Reporter is the world's largest audited circulation publication serving the global maritime industry.