Page 16: of Maritime Reporter Magazine (May 1996)

NRDA Cooperation Overshadowed As Regs Face Court Challenge by Bridget A. Murphy, associate editor "We're happy to sit down with you and work out pre-spill protocols" was the message com- municated to The Baltic and International

Maritime Council (BIMCO) members by NOAA

General Counsel Terry Garcia on March 21 — marking the occasion of the first joint govern- ment/industry discussion on natural resource damage assessment (NRDA) since the reformed mandates took effect.

True to form, NOAA officials continued to insist that NRDA does not sanction arbitrary environmental price tags, but invokes pro- grams that will, over time, replace or restore the equivalency of baseline losses resulting from oil spills. "It is about fixing the resource," said NOAA Deputy Administrator Douglas K.

Hall, who added that companies have misun- derstood the NRDA process, confusing new reg- ulations with contingency valuation methods used after the Valdez incident and other spills in the Palos Verdes shelf off the California coast.

Maritime interests responded by repeating concerns regarding their perceptions of the leg- islation's clash with liability limitations under

OPA 90. Among those voicing concerns were the Water Quality Insurance Syndicate (WQIS), the North Cape insurance outfit, and the

American Institute of Marine Underwriters (AIMU).

Emerging from the discussion was the real- ization that a serious gap in understanding has

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Seattle, Washington 98101 USA fueled opposition to the regulations and has also left maritime interests, including shipown- ers, operators and insurance agencies, unpre- pared to work successfully within NOAA's legal framework should a spill incident arise. As stated by environmental law expert Thomas C.

Gricks, III, partner, Schnader, Harrison, Segal & Lewis, "A lot of the fear comes from the unknown. For the most part, these regulations are unknown because they've only been out a month or two."

Navigating The Legal Framework

With NRDA regulations still subject to final challenges, Mr. Gricks encouraged BIMCO members to become familiar with NOAA's regu- latory framework, in order to constructively criticize the legislation as well as to prepare to react in a way that will maximize benefits to their companies in the event of an incident. "Ensure that if an oil spill happens, you're in the best possible situation," advised the attor- ney.

He then proceeded to put forth guidelines for pre-incident planning, which included three key ideas, namely: identifying trustees; having

R.P. draft agreements or Memorandums of

Understanding ready for action in every case; and signing tiered contracts with spill respon- ders and consultants.

He recommended that R.Rs submit formal comments on draft restoration plans in the event of an incident, and added that companies should utilize the Administrative Record to suggest alternate methods of restoration.

Alluding to NRDA Section 990.27, Mr. Gricks said that "trustees are required to choose the most cost-effective measures" for restoring baseline conditions, and advised, "You have to be able to demonstrate that the alternative selected by the trustee is the wrong one."

He said that companies arranging from the start to direct and pay for restoration programs often save money in the long run, considering the cost of litigation combined with the expense of having a bureaucratic agency implement a plan. "Assume control and direct the process as early as possible ... In Superfund, we have found that you can cut costs by two-thirds if you do the work yourself," said Mr. Gricks.

Aiming For Cooperation

It is without question that the maritime industry will continue to hold the U.S. govern- ment accountable for legislation that some believe seriously lacks of a system of checks and balances. Aware of this circumstance, NOAA has enthusiastically extended an offer to work with maritime interests in the next few years in order to fine-tune NRDA legislation. According to Deputy Administrator Hall, the Department of Commerce is "committed to dialogue" with industry, and is currently working with the

American Petroleum Institute to answer con- cerns while protecting the rights of the public.

Ke assured BIMCO delegates, "there will be tangible benefits of restoration efforts," and added that the recent Rhode Island spill was a "very successful effort to demonstrate how this can work."

The NOAA administrator also stated that

U.S. federal control over the regulations has a stabilizing influence on the entire process, par- tially due to the fact that the federal govern- ment has experienced employees. He empha- sized that techniques for shoreline cleanup have been extensively studied since the late 1980s, and that NOAA has the ability to mobi- lize highly skilled technical teams within hours of an oil spill.

Beyond explaining that "the exercise is not to calculate damages," Mr. Garcia implored mar- itime interests to take advantage of NOAA's

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