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Poverty Times #3

The Prestige: business interests at odds with safety concerns

by Thomas Höfer

On 13 November 2002, in stormy weather, the 26 year old tanker Prestige, sailing with a Lebanese crew under Bahaman fl ag from the Baltic to Asia, sustained hull damage. The tanker was carrying 77,000 tonnes of heavy fuel oil. It began taking on water and started to drift towards the coast of Galicia. The Spanish authorities ordered the Prestige to leave Spanish waters and head beyond the 120- mile territorial limit. Once the ship had been pushed out onto the high seas, the Portuguese government sent a warship to prevent it from entering its waters.

After fi ve days of towing operations, 130 miles from the coastline of Spain and Portugal, the tanker split in half and sank. The two parts of the wreck now lie at a depth of 3.5 kilometres more than 200 kilometres off the coast.

The Prestige spilled 64,000 tonnes of oil, 60% more than initially estimated. The resulting pollution is thought to have killed 300,000 seabirds. It will take between two and 10 years for the affected ecosystems and resources to recover.

Damage to fi shing and related economic sectors, tourism, and the natural heritage along 3,000 kilometres of coastline polluted by the spill may cost approximately €5bn (€1bn confi rmed by the Spanish Government two years after the disaster), with society at large paying almost the full amount. It has directly affected some 30,000 people in fi shing and shellfi sh.

It is believed that a Greek shipping dynasty is behind the registered owner of the Prestige in Liberia, the Mare Shipping Incorporation, which only operates this tanker. It bought it in 2000. The transport itself was chartered by a Russian-owned Swiss company. Such situations, covering “hidden” interests under the fl ag and registration of some convenient administration, have become typical during the last few decades.

Experts from the US Bureau of Shipping had ordered dock work after fi nding cracks in the ship’s hull. Welding was carried out in China, and the ship was subsequently inspected three times in two years in China, Dubai and Saint Petersburg respectively. European ship-owners control 34% of the world’s fleet, but the majority of their ships are registered under fl ags of convenience, offering lower fees, less restrictive laws and access to low-wage crews. Although corporate globalisation is not a risk in itself, tanker law cannot be effectively enforced under such conditions.

People living on the coasts of shipping routes and relying on the natural environment pay the real price of spills. For the fi shermen, the Spanish authorities opened national funds and defined monthly income compensation. Credits totalling €100m were offered. If an oil tanker causes pollution, then compensation is available from the ship’s insurance and the International Oil Pollution Compensation (IOPC) Fund. According to Lloyd’s press offi ce, there is a likelihood of compensation amounting to about €7m for the ship, another €10m to €12m for the cargo and €20m to €25m for pollution damage liability paid by a Protection and Insurance Club. Over and above that, coverage based on the International Convention on Civil Liability for Oil Pollution Damage, the ‘Fund Convention’, is limited to about €180m. Compensation is intended for economic loss and clean-up costs. After the loss of the Erika, the IOPC fund limits were raised by 50%, but this measure only came into force on 1 November 2003. Any claimants will have to assess damages to shellfi sh grounds, marketing efforts and the travel trade over a period of years. Heavy fuel oil will stay in the area as fl oating tar for a while. International oil, insurance and salvage-related institutions studied the costs of oil spills outside US waters in the 1990s. While there is no clear relationship between spill volume and costs, the type of oil is crucial: light oil dissipates in rough seas, while heavy fuel oil stays in the marine environment and travels long distances. This was the case with the Prestige. A further impact on costs relates to repeated cleaning, and maintenance of the cleanup team and equipment. The type of coast and tide is an important factor too. Poor management and over-reacting to media pressure, rather than trained decisions by qualifi ed engineers, can escalate costs. All in all, the Prestige spill is well placed to become one of the most expensive oil spills outside the USA.

The tanker Prestige was a single-hulled vessel. Less than 50% of the world’s oil tanker fl eet – some 2,000 ships exceeding 80,000 tonnes – have single hulls. Double hulls are designed to contain the load after non-severe collisions. In 2001, after the Erika spill, nations represented on the International Maritime Organization (IMO) Marine Environmental Protection Committee decided to introduce a basic rule for taking single-hulled oil tankers out of service: single hull tankers with certain anti-pollution standards could continue operating until 2015 or until they completed 25 years’ service, whichever came fi rst. On the basis of these rules ships like the Prestige will have to be decommissioned over the next few years.

The wreck of the Prestige and its aftermath highlight the anarchic character of the shipping industry. This situation suits major corporations as it helps them avoid regulations and taxes. It is a further example of the confl ict between basic safety and pollution concerns and a system based on profi t and national considerations.

Major oil spills will recur as long as society continues to depend on petroleum and petroleum products to sustain its day-to-day activities. Oil tankers transport some 1,800m tonnes of crude oil around the world by sea each year. In most cases, the petroleum cargo is transported and delivered safely and securely to its destination without incident due to good preventive measures and instruments introduced over the years.

However, another problem is associated with the transports themselves. Every day ships empty some 2,600 tonnes of oil into the Mediterranean. The deliberate, illegal discharge of oil and fuel during washing of tanks or ballast-water exchange operations is a regular practice among oil tankers, cargo ships and cruise liners. In one year this adds up to the equivalent of 15 Prestiges. More attention needs to be paid to these creeping catastrophes as well.

The editorial team assembled this article, drawing largely on “Tanker Safety and Coastal Environment: Prestige, Erika, and what else?” by Dr. Thomas Höfer, an article fi rst published by Environmental Science and Pollution Research (ESPR – 10 [1] 2003).