The Mauritius Bunker Fuel Spill: Why It Is Doubly Bad for the Island

23/8/2020

On 25 July, a bulker Wakashio (flag – Panama, gross tonnage – 101932 gt) got stranded off the coast of Mauritius with almost 4,000 tons of bunkers on board. Around 1,000 tons of it leaked into one of the most pristine corners of the Indian Ocean from the ship that broke apart in the middle of August. Although the investigation is still ongoing, the government of Mauritius already put the blame for all losses (more than $500 m!) on the vessel’s Japanese operator Nagashiki Shipping and its liability insurer – Japan P&I Club. But will the claimants be able to recover that money?

Spills of bunker fuel are governed by the Bunker Convention 2001. Its Article 6 allows shipowners and insurers to limit their liability for damages and expenses arising out of a spill under the Limitation of Liability Convention (LLMC) 1976. Based on the vessel’s gross tonnage, the limit will be only $18 m! The situation would have been slightly better had Mauritius ratified the 1996 Protocol to the LLMC – then the limit would have increased up to $65 m.

Theoretically, limitation may be ‘broken’ – but only if the claimants show that the spill was caused intentionally or recklessly with knowledge that a spill may probably occur (Art. 4 LLMC 1976). It is extremely difficult to provein practice, and there have been almost no examples of limitation being successfully broken.

Paradoxically, the Mauritians affected by the spill would have been able to claim a substantially larger compensation if the vessel had carried oil – and not just bunker fuel.

Under the Civil Liability Convention (CLC) and the International Oil Pollution Compensation Fund Convention (FUND) 1992, the shipowner’s limit would have been around $91.65 m – while the IOPC Fund would have be liable for up to $324 m!

Regrettably, bunker spills still occur around the world with upsetting frequency – and this summer, a court in St. Petersburg decided the first Bunker Convention dispute in the history of Russia. Read expert commentaries from RUMLA’s team on this case and others in our next review of maritime law news №3 for August 2020.

This material and all other materials on RUMLA’s website are intended for general information purposes only and do not constitute legal advice.