Liability for Ship Source Oil Pollution
In Responsibilities and Liabilities for Commercial Activity in the Arctic: The Example of Greenland, edited by Vibe Ulfbeck, et al., Taylor and Francis, 2016
CEVIA Working Paper Series, Issue 1/2017, No. 9
26 Pages Posted: 27 Dec 2017
Date Written: December 20, 2017
When crude oil is extracted, it must somehow be transported from the drilling site to a refinery. Such transport can either be by pipeline or by ship when the drilling site is offshore. It is very unlikely that a refinery will be built in Greenland. With the Greenlandic geography in mind, it is self-evident that the transport of the crude oil must be made by ship (i.e. most likely by shuttle tanker), and indeed over quite a distance in waters that can often be harsh. The transport of the oil bears with it a risk of pollution that is separate and different from the risk of pollution from the actual oil extraction. Thus, a shuttle tanker may incur an incident which can lead to an oil spill. Given the size of shuttle tankers, such an oil spill can be massive and have devastating effects. The transport of the oil is an indispensable part of the whole enterprise of producing oil commercially. Therefore it is also regulated in the Greenlandic model licence for exploitation of oil and as such form part of the activities encompassed by the licence. At the same time, the tanker owner and operator will most often be a separate and independent entity which has nothing to do with the other activities under the licence (i.e. the actual oil extraction). Furthermore, in maritime law international regimes regarding liability for oil pollution from tankers have been developed and they do not deal with oil production activities at all, but rather with the liability of the tanker owner and operator. Consequently, an oil pollution stemming from a tanker transporting crude oil may be subject to rules on pollution set out in legislation regarding marine environment protection, in maritime law legislation, in mineral resources legislation and in regulation in the licence for exploitation of oil, the nature of which as a contract or an administrative act can be discussed.
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