The expenses connected to a pollution case, marine casualty or incident

The expenses connected to a pollution case, marine casualty or incident

This Newsletter is about the expenses connected to a pollution case, marine casualty or marine incident, for the initial response. Assuming that, for those non-urgent operations, the Owner/P&I will take control of the situation.

Regulation

Article 268 of the Spanish Act 2/2011 on Spanish Ports and Merchant Marine regulates SASEMAR’s (Coast Guard in Spain) purpose. Its paragraph 4 states that in pollution cases, marine casualties or marine incidents, a security might be requested by the competent Authorities in order to cover the expenses incurred by SASEMAR or any third party (private company) that participated in managing the pollution, casualty or incident. While the security is not posted, the vessel is detained.

When dealing with SASEMAR regarding the settlement of the above-mentioned expenses, the dispute is usually limited to the reasonability of the means deployed, actions taken, and the time devoted to deal with the emergency. The reason is double: i) SASEMAR’s tariffs are public , known beforehand, and ii) SASEMAR issues daily reports about its intervention in any particular case, detailing thoroughly any action taken.

Controversy

Problem arises in Spain when the Port Authorities involve private companies in the management of the incident, when SASEMAR has limited resources in the area or needs external support.

Common sense would lead us to think that the same Authority will monitor their intervention, supervising the actions taken and the means used, oversee their tariffs according to market prices, pay the expenses due and collect them from the liable party or the security.

Our experience says

Unfortunately, our experience in this kind of cases has taught us that practice is different. Not only because the competent Authority does not follow up private companies’ intervention (Authority is only focused on resolving the emergency asap), but also because when the time to pay comes, the Authority encourages the private company to address its claim directly against the Owner/P&I, as if it was an ordinary civil claim without nothing to do with the administration. We even faced a case in which the Authority threatened vessel’s interests to enforce the security to pay the private company without any previous proceedings where the parties could, at least, discuss the reasonability of the invoices based on supporting documentation.

At the end, having a security of a considerable amount put up in place makes (forces) Owner/P&I enter into negotiations with the third party.

The above practice is not only contrary to common sense but also contrary to our legal principles / regulations:

– The Administration has the duty to protect, preserve and restore the public domain. In a pollution case, for example, the Administration will request the liable party to restore the affected area. In the negative, the Administration will restore and seek reimbursement of the expenses against the liable party. If an urgent/immediate response is needed, the Administration acts first and then seeks reimbursement.

– If the pollution case, marine casualty or marine incident, gives raise to an administrative sanctioning proceedings, there is an specific regulation which states that a subsidiary proceedings has to be initiated in order to determine the exact compensation for damages. Compensation will include the costs and expenses incurred to manage the situation and restore the public domain.

Recommendations

In view of the above mentioned, our recommendations would be:

– Being proactive. Assume the lead in the operations if possible or work closely with SASEMAR and the relevant authority to monitor in firsthand the measures taken and influence their decisions to be efficient and cost-effective. If a private company is needed, it is better to be contracted by the Owner/P&I.

– If the operations have already been entrusted to a private company, appoint an expert to follow up their work.

– When facing a claim from a private company, invite them to re-address it to the competent Authority.

– Request the Authority to follow the path established for administrative sanctioning proceedings. 

For further information, please contact us.

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