Murky Waters

By WANG HAIRONG

Murky Waters

By WANG HAIRONG

The Bohai Bay oil spill brings China’s marine liability laws into focus

Scallop farmers in Laoting County in north China’s Hebei Province had been unaware a catastrophe was approaching their farms south of the Bohai Bay until late June when they found millions of young scallops dead.

“Half the shellfsh in the 7 million cages of scallops cultivated by 160 households in Laoting had already died and the majority of the remaining scallops were less than 1 centimeter in length,” Xinhua News Agency reported later.

Yang Jizhen, head of the Laoting Aquaculture Association, estimated local scallop farmers suffered a total loss of 350 million yuan ($54 million).

Fishermen suspected the scallops’ death was associated with oil contamination, saying it occurred after oil particles were observed in the area. “From mid to late June, slicks of oil were frequently seen on the seashore in Laoting,” Yang said.

Li Jiafeng, a local fsherman, told Xinhua News Agency the quality of scallops is mainly determined by the quality of the sea water. He said there had been no red tides or abnormal occurrences other than the oil slicks that could account for the loss of the shellfsh.

Soon, the fishermen’s guess was confrmed.

On July 5, the State Oceanic Administration (SOA) said it had received reports on two oil leaks from the Penglai 19-3 Oilfield in the Bohai Bay, the largest offshore oilfeld in China. The frst leak occurred on June 4, and another spill took place on June 17.

In partnership with the state-owned China National Offshore Oil Corp. (CNOOC), U.S. oil giant ConocoPhillips’ Chinese subsidiary operates the oilfeld.

Worse still, more leaks have been subsequently detected since the SOA made the accidents public.

The oil spill polluted about 4,240 square km of sea at its peak, according to the SOA.

Dried oil drops and oil belts have been detected in Liaoning, Hebei and Shandong provinces and Tianjin Municipality surrounding the Bohai Bay.

The SOA said on August 16 the countermeasures taken by ConocoPhillips China, such as deploying oil booms and easing pressure in the well, were provisional and would not effectively stem the risk of future spills.

Despite the Chinese Government’s requirement for it to clean up the oil spill before August 31, ConocoPhillips China said on August 20 nine additional leaks near Platform C had appeared, with about two liters of “materials” seeping out every day.

Struggling farmers

Li Shuqiang, a local fisherman who has been cultivating scallops for over a decade, is typical of the hundreds of farmers in Laoting who now fear for their livelihoods.

Li said the business has usually brought excellent returns. Last year he earned more than 70,000 yuan ($10,955) from scallops. This year he expanded his production. But, as a result of the oil contamination, he said he was unlikely to recover his investment and return the more than 1 million yuan ($156,500) he borrowed from friends and relatives.

GUO SHULEI

After the SOA announced the oil leaks from the Penglai 19-3 Oilfield, a joint investigation team was set up by the Laoting County Government to oversee aquatic production, oceanic administration and environmental protection. The team collected samples from the oil slicks in its offshore waters.

In early August, a document from Laoting County’s Information Offce said the oil particles collected by local investigators had been found to have originated from the Penglai 19-3 Oilfeld.

But the North Sea Branch of the SOA said on August 2 the oil particles in the samples collected from Laoting’s Laomigou area were fuel oil, rather than crude oil from the oil spill.

Laoting’s fishermen found the SOA’s test results unacceptable. The Laoting Aquaculture Association argued the mass death of scallops occurred around June 20, but the SOA’s tests were based on oil samples collected on July 27 and 28.

Yang, head of the association, said in summer the ocean current fows from Laoting in the direction of Hebei’s Qinhuangdao City and Liaoning’s Suizhong County where oil particles from the Penglai 19-3 Oilfeld had been found. “If the particles did not pass Laoting first, how did they get to the other two places?” Yang said.

“Moreover the SOA’s samples were taken from the Laomigou area, where there are only three scallop-raising households, while 97 percent of the scallop farmers are concentrated in the Langwokou area,” he said.

Fishermen in Laoting have decided to fle lawsuits against ConocoPhillips China at a local court.

Meng Xiaojuan, a lawyer from the Yingke Law Firm that represents 160 of scallop farming households in Laoting and neighboring Changli County, said the farmers’ losses were estimated at up to 1 million yuan each.

“The fishermen plan to sue ConocoPhillips China for compensation. Their main challenge will be to prove oil leaked from the Penglai 19-3 Oilfield caused the death of their scallops,” said Yang Yang, a project manager at Friend of Nature, a Beijing-based environmental NGO.

Compensation claims

The massive oil spill, however, has done damage to more than just fshermen’s livelihoods. Oil has contaminated a vast area of the Bohai Sea, doing considerable damage to its ecosystem.

“Because the Bohai Sea is a semienclosed sea where water circulation is poor, pollution here can do more harm than in an open sea,” said Guo Mingke, deputy chief of the SOA’s North Sea Branch.

The SOA said on August 16 it was going to sue ConocoPhillips China for the contamination wrought by oil seepage from its rigs and it had begun to recruit a legal team to pursue claims against the company.

“As the full extent of the damage is still to be assessed, the amount of compensation demanded has not yet been decided,” the SOA said.

China’s Marine Environmental Protection Law, which has been in force since April 2000, stipulates, in the case of damage caused by offshore oil spills, the polluter should be fined between 30,000 yuan ($4,695) and 200,000 yuan ($31,298).

But SOA offcials admit the paltry fne is insuffcient compensation for the damage caused by oil spills, as pollution to the marine environment usually affects a relatively large area, and often has a severe and lasting impact.

Last summer, British Petroleum (BP) set up a $20-billion compensation fund after the deepwater oil spill in the Gulf of Mexico. Hundreds of lawsuits have been fled against BP, including suits from families of the dead workers, business owners across the Gulf of Mexico and class-action lawsuits covering environmental damage.

China’s Marine Environmental Protection Law does state, in addition to fnes, oceanic authorities shall sue for damage to maritime ecology on behalf of the country, said Wang Bin, Deputy Director of the SOA’s Marine Environment Protection Department. “I believe that the amount of compensation will be much larger than 200,000 yuan,” he said.

Shandong has a local regulation specifying the maximum amount of compensation that can be demanded in cases of marine ecological damage is 200 million yuan ($31.29 million).

But there is no such law at the national level. “The Marine Environmental Protection Law has no clearly defned section covering marine ecological damage, which creates trouble for judicial departments,” said Liu Jiayi, a researcher with the SOA’s Institute for Ocean Development Strategy.

Although recent years have seen a number of oil spills take place off China’s coast, only in a few instances maritime authorities claimed compensation for marine ecological damages.

TheTasman Seacase was the frst one. On November 23, 2002, Maltese crude oil tankerTasman Seacollided with a Chinese vessel off the coast of Tianjin. Leaking oil from the tanker polluted the Bohai Sea.

The Tianjin Oceanic Bureau brought a lawsuit in the Tianjin Maritime Court, seeking compensation for damages to the marine environment caused by the spill. However, the damages awarded in the case were much less than the bureau had hoped.

A key factor behind the low damages was China’s inability to effectively evaluate and quantify losses to its marine environment. “As a result, the evidence presented was inadequate, and compensation was made for losses to environmental capacity, but not for other losses to marine ecology,”said Beijing-based lawyer Xia Jun.

“Quantifying marine ecological damages is a conundrum,” said the SOA’s Liu.

TheTasman Seacase prompted the SOA to publish the Guidelines for Evaluation of Environmental Losses Due to Maritime Oil Spills in 2007.

“Yet whether the document will be accepted in court and by defendants is still unknown,” Liu said.

Liu suggested China’s top legislature amend the Marine Environmental Protection Law as soon as possible.

He said liable parties should establish a special fund to cover the cost of pollution clean-up and control, as well as environmental restoration and management, in the event of an accident.

For ecological damage in cases where the victims and liable parties are not identifiable, Liu said any party engaging in economic activities at sea should be asked to pay insurance against damage to the ecological environment before beginning operations.

Civic efforts

Before the SOA announced its litigation plan, Jia Fangyi, a lawyer at Beijing’s Great Wall Law Firm, filed a lawsuit against ConocoPhillips China and CNOOC. He sent fles to maritime courts in Tianjin and Qingdao in Shandong and the Higher People’s Court of Hainan Province in south China.

Jia demanded the companies set up a compensation fund of 10 billion yuan ($1.56 billion) to tackle pollution and recover ecological damages.

Some environmental NGOs, such as the Beijing-based Friend of Nature, have also planned to fle lawsuits against ConocoPhillips China. But they were advised they did not have the legal standing to do so.

GUO SHELEI

“China’s Marine Environmental Protection Law stipulates departments overseeing the marine environment should claim compensation from liable parties on behalf of the country,” said Xiao Jianhua, a law professor at China University of Political Science and Law in Beijing.

According to the law, he said, organizations or individuals other than the marine authorities do not have the legal standing to initiate class-action litigations over the Bohai Bay oil spill.

“Class-action litigations filed by individuals or civic groups are seldom accepted by courts,” said Ma Yong, head of the Legal Affairs Department of the All-China Environment Federation, a Beijing-based NGO. Ma said most of the class-action lawsuits fled by his organization were rejected by courts on the grounds of improper legal standing.

But Jia said any citizen has the right to sue against damage to public interests, according to Article 3, 53 and 55 of the Civil Procedure Law of China.

Jia told the Beijing-basedProcuratorial Daily, “The Bohai Sea is the common asset of China’s 1.3 billion people. As one of them, of course I can fle a lawsuit against actions that have done damage to it.”

Dai Renwang, a professor of environmental law at China University of Political Science and Law, agrees with Jia. He said every citizen has a stake in state-owned ocean resources, so environmental NGOs and individuals can file class-action lawsuits over the Bohai Bay oil spill.

Wang Canfa, Executive Director of the Environment and Resources Law Society, also supports Jia. He said according to Article 6 of China’s Environmental Protection Law, any organization or individual has the right to expose and sue those damaging the environment.

GONG ZHIHONG

XING GUANGLI