Continued from yesterday
THE COMPENSATION IMBROGLIO: Whenever such a tragedy occurs, action is immediately initiated on minimising pollution damage through various means. The vessel’s owner and its insurer brought in a number of experts, salvage vessels and equipment to deal with it in the current context. The American P&I Club claimed to have spent around $36 million for this purpose and also paid out $1.6million to the KPT for their part in the containment and clean-up efforts.
What is most important, however, is that compensation should start flowing immediately to those who need it most, the ones whose livelihood is most affected by the spill. The American Club was cognisant of this as it signalled its immediate readiness to support the establishment of a legal framework to ensure its early disbursement. Following the spill, a list of 130 fishermen whose livelihood was disrupted was finalized jointly by SPA, IUCN, UNEP, WWF and UNDP. A large number of vendors plying their trade along this stretch of the coast were also adversely impacted. A high incidence of ailments was reported amongst picnickers as well as the residents of Shireen Jinnah Colony, Clifton and Seaview who were exposed to a high concentration of volatile organic compounds in the environment. To the best of my knowledge, none of them have been compensated so far. I have it on good authority that a P&I Club rep was actually going around with a cheque of $250,000 in his pocket searching for anyone honest and willing enough to disburse it to those most affected. The Edhi trust refused to accept this responsibility on the plea that their offices and persons would be literally torn apart by rampaging mobs. The biggest hurdle thus was the lack of an administrative and legal framework within whose ambit a fair disbursement was possible.
On their part, P&I Club normally tries to expedite the processing of claims, provided they are well-documented, reasonable and justifiable. Anyone who learns that the claims of an American franchise were promptly sanctioned while that of a local franchise further down the Clifton Coast was left unattended, would instantly cry foul. The fact of the matter is that while all business transactions and tax records of the former were properly documented, that of the latter wasn’t. Pakistan’s decision to turn down the P&I Club’s offer of compensation under the 1992 Civil Liability Convention as inadequate opened the floodgates for litigations and even criminal cases.
LITIGATIONS GALORE: Three claims were filed for damages in the Sindh High Court against the owners of the Tasman Spirit, one after the other: first by KPT for Rs 102.6 billion, second one by DHA for a whooping Rs 320.7 billion and a third by the Pakistan Fisherfolk Forum which claims to represent almost 22,000 Pakistani fishermen, for Rs 1.2 billion. As an afterthought, the Pakistan Navy also put in its own claim of a relatively modest Rs 372 million in 2007. The owners in turn filed a counter claim of $6.7 billion against the KPT for approximately the same amount as being collectively claimed against it. The ultimate recipient of the fuel cargo, National Refinery Ltd, settled out of court, having been duly compensated by the P&I Club.
Assimina Maritime Ltd, the owner of the Tasman Spirit, moved the Queen’s Bench Division (Commercial Court) in London under the Arbitration Act against the charterer i.e. the PNSC for breaching the safe berth warranty, meaning in effect that the port of Karachi was not as safe as it should have been, with the owner quantifying their losses at $6.6 billion. The court’s declaratory award announced in 2007 held that “the effective cause of the grounding was the failure of those responsible for the navigation of the vessel to give appropriate helm orders at the appropriate times”.
Another petition filed by the shuttle tanker Sea Angel was settled in the same court through a compensatory payment of $1 million by the vessel’s charterer Tsavliris Russ Ltd.
The underwriters had to pay $4.2 million as salvage charges and the general average contribution to the claim settlement agent WK Webster in London, with the Sindh High Court retaining an insurance guarantee of an equivalent amount. The consortium of the six local companies that had insured the ship’s cargo subsequently filed a claim of about $15 million against the owners on account of their negligence in plying an un-seaworthy vessel.
Conclusion: Beyond the arbitration cases decided upon at the London Commercial Court, the cases filed at the Sindh High Court show no sign of concluding anytime soon. Even if, through a stroke of good luck, all such cases are eventually decided upon in Pakistan’s favour, the problem is that the total amount available for disbursement (being kept by the Nazir of the Sindh High Court) is only around $11 million in all, which includes $2.2 million earned through the auction of the confiscated vessel Endeavour II. This is a far cry from the $47 million offered earlier by the P&I Club and an even further cry from the $5.5 billion being claimed by DHA and the $1.75 billion being claimed by KPT.
The incident exposed a number of internal weaknesses. For one thing, we weren’t prepared at all to handle such type of exigency in terms of expertise, equipment and coordination and lacked an adequate administrative, operational and legal framework. Eight years down the line, nothing much has changed. Having taken decisive action in detaining the crew members and the salvage master as well as the salvage vessels/equipment and filing our billion dollar claims, its business as usual. Pakistan has gone on to sign the CLC 92 Convention but is still dithering on signing the Fund Convention, which would make a much higher level of compensation immediately available. It seems that we are apparently banking on the non-recurrence of such a tragedy.
What Pakistan lost on the international maritime front in terms of prestige is immeasurable. Our treatment of the Tasman Spirit crew, which voluntarily stayed on with the ship after its grounding in order to assist in the salvage operation, won us no friends. The detention of the salvage master in particular, who arrived after the vessel broke in two, was a bit too much to digest. It became a bit too obvious that we were simply using the detainees as bargaining chips for securing a billion dollar plus compensatory settlement, instead of pursuing the course of negotiations and/or litigation in earnest. Instead of searching for scapegoats, our focus should have been on self-assessment and self-improvement so that we become much better prepared the next time around. Following the Exxon Valdez oil spill of March 1989, the US Congress immediately passed a comprehensive piece of legislation called the Oil Pollution Act of 1990 (DPA 90). Isn’t this something we should be focusing upon too? We need to draw the right lessons from this incident, which would enable us to obviate our obvious weaknesses and raise our preparedness and response levels.
The writer is a retired admiral and currently heading the National Centre for Maritime Policy and Research at Bahria University, Karachi.