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Sailing Towards an ‘Anticipatory and Absolute Liability’ Regime in Maritime Law




INTRODUCTION


In June 2021 ‘MV X-Press Pearl’ sank of the coast of Colombo, not far from the Indian coast, in rich fishing waters. Despite the UN stating that the sinking caused ‘significant damage to the planet’ the incident failed to make an imprint on our minds as opposed to a terrestrial chemical or oil leak. Maritime spills are not alien to India. In 2017 the Dawn Kanchipuram spilt oil of the coast of Ennore, causing harm to the marine ecosystem, affecting 35Km of coastline and leaving at least 100 Olive Ridley turtles dead. Yet, as with the public, for the legislative and executive organs of state in India, maritime environmental concerns have largely been as distant as the sea itself.


The blue economy contributes significantly to India’s growth. It contributes 1% to the GDP, 5% to agricultural GDP and the fisheries sector alone provides employment to 40 Million people directly and indirectly. Yet, despite the government investment in the blue economy, the potential of a man-made maritime disaster to bring down the blue economy in one swell swoop remains. The threat of a chemical or oil spill in the rich waters of the Indian Exclusive Economic Zone (EEZ) cannot be understated.


CONTEMPORARY MARITIME LIABILITY REGIME


Fortunately, or unfortunately, depending on one’s position, the Indian law governing maritime disasters is largely uniform with the international maritime regime. The international maritime regime governing maritime disasters – specifically, the ‘Convention on the Limitation of Liability of Maritime Claims of 1976’ (and its 1996 amending protocol) and ‘The Civil Liability Convention of 1969’ - has not kept up with the increase in the Gross Registered Tonnage (GRT). The liability regime hasn’t changed much since the 20th Century and the jurisprudence serving as the foundation of maritime liability law has been more or less consistent since the 18th century.


As it stands, international maritime liability law is governed by the rule of strict liability. However, liability can be assigned only if the pollution is caused in Indian territorial waters or the EEZ. Hence, even when pollution occurs in the high sea, adjacent to the EEZ, the vessel cannot be held liable for both direct and indirect harm caused. Spills, and the affected marine ecosystem, are by their very nature transboundary pollutants and resources respectively. Strictly enforcing a legal fiction of delimitation is irrational although ‘convenient’.


It appears that the importance given to shipping has kept away the implementation of ‘absolute liability’ and laws governing transboundary pollution from being adopted by the convention or municipal maritime laws of India. Lord Denning, in ‘Bramley Moore’ (1963) pronounced that maritime liability law “is not a matter of justice. It is a rule of public policy which has its origin in history and its justification in convenience”. His words remain true. However, it is a justification lost to the ages but a ‘convenience’ that remains even in the planet’s most desperate time.


Proponents of the current liability regime may argue that the number of oil spills have drastically decreased. This, however, cannot serve as an adequate defence of the current liability regime. Should fewer incidents translate into stagnant or laxer laws? Or are fewer incidents consolation for people and ecosystems detrimentally affected by spills? The answer to both these questions are in the negative. The international community must strive to not only reduce spills but also evolve adequate safeguards to secure financial compensation. Furthermore, efforts need to be continuously undertaken to ensure that an already stressed marine ecosystem is not subjected to further spills, big or small alike. It may also be pointed out that the ITOPF and UNCTAD data cited above covers only spills of 7 tonnes or more. These spills (greater than 7 tonnes) account for only 20% of all spills; the rest remain unaccounted for.


ADOPTING ABSOLUTE AND ANTICIPATORY LIABILITY


In M.C Mehta (1987) the Supreme court evolved the principle of absolute liability citing the anachronistic nature of the strict liability clause and the hazardous nature of the substances in question. There appears to be no reason why the Indian state should not give statutory backing to the principle at least with respect to vessels carrying hazardous goods such as oil and chemicals. This reluctance may be attributed to the need to promote maritime trade albeit at the cost of the environment. It has been argued that making maritime law stricter will stress the economies made by the shipping industry. This argument is a product of the 19th century when colonial powers, in particular Britain, sought to buttress their merchant navy to aid their colonial ambitions. Firstly, it may be pointed out that since 1987 despite the adoption of the absolute liability principle hazardous industries have not suffered adversely. On the contrary, it has led to the adoption of good practices and development of better technologies. Secondly, the increase in the number of vessels, the overall GRT, and the state of the marine ecosystem deserve to receive primary consideration.


Nevertheless, there is a strong case for the government to adopt the principle of ‘anticipatory liability’. This principle was originally introduced by the United States via the Oil Pollution Act of 1990 and also by the State of California following the Exxon Valdez Spill. Section 1016 of the Act mandates that potentially responsible parties provide evidence of being financially capable to “meet the maximum amount of liability to which the responsible party could be subjected to” while sailing in United States territorial waters and EEZ. At the very least it is a prudent innovation to ensure that the ‘Polluter Pays’ principle is not defeated by financial technicalities, and vessel operators incapable of being held to long established legal principles. The act was initially labelled as being excessive by insurance clubs and vessel owners, however, data from the United States shows that oil spills fell immediately by more than 10 times since the adoption of the act.


In India, the 249th standing committee report on transport, tourism and culture had noted that the ministry of shipping had opposed the inclusion of LLP’s from registering vessels as “the liability of the partners in case of loss will be limited.” In other words, they would be incapable of adhering to the polluters pay principle and the limits set by the relevant convention. However, like a LLP, a limited liability company or even an unlimited liability company too may be incapable of ensuring financial capability to fulfil its liability. It seems unclear as to what the differentiation achieved. Notwithstanding its own concerns, the government has now permitted LLPs to register vessels. In essence, the ability of a potential polluter to pay what is mandated by an international convention appears to be irrelevant while allowing a potential polluter to operate. It has been relegated to a post facto consideration.


SETTING PRIORITIES


Adopting an ‘absolute and anticipatory’ liability policy would be nothing short of heretical for the government and the maritime community in India. Institutional inertia at the international and national level must be overcome especially when it concerns a potential man-made environmental disaster. As to why an extremely polluting industry should not be subject to stricter norms is a question best left to the pundits. While the pundits confer, the international community must broaden the scope of liability arising from spills and include within it, in particular, damage caused to resources in the EEZ as a direct causation of pollution on the high seas.


For a start, the government must consider reintroducing the Merchant Shipping Bill 2016. Meanwhile, for the largely poor and marginal fishermen of India trying to make a living out of stressed waters, spills are directly and indirectly taking a toll on their livelihood and the nation’s food security. More often than not, policy changes nucleate around crises that are foreseeable; Do we really need our very own Exxon Valdez to make the inevitable obvious?

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