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Vision council votes for bylaw to demand more liability insurance from oil tankers, oppose pipeline expansion

May 2nd, 2012 · 79 Comments

Listening to Vancouver councillors talk this morning about the security measures needed for oil tankers in the harbour, you would never know there’s actually a port authority already ensuring this.

It was quite fascinating to listen to Kerry Jang say he doesn’t believe the current security measures, like having three tugs attached to any tanker, are really effective in any way and there could still be a terrible oil spill in the harbour.

Good thing those councillors are on top of everything.

Okay, snippy comments aside, this post is to note that council did indeed pass the motion put forward by Mayor Gregor Robertson to demand that tankers have more liability insurance than the current $1.33-billion that Canadian law currently makes them provide. It also passed a motion by Green Party Councillor Adrian Carr, asking for a report from staff and the Vancouver Economic Development Commission assessing the risk of increased tanker traffic.

I’m attaching my Globe story from Tuesday, where I noted that tankers are already required to carry insurance plus a contract with a local clean-up crew. Since then, there has been more clarity from city hall that the city’s motion is intended to add to what is already required.

By the way, that $1.33 billion number is the one generated by a researcher with the Living Oceans Society in 2010 (report here) as part of what seems to have been a general effort by environmental groups to oppose increased oil transport and drilling by focusing on the liability issue, particularly for Enbridge or Arctic projects. That number has then been used by a number of other environmental organizations.

Although Vancouver is not likely to see drilling in the harbour or tankers operating at the speed of an Exxon Valdez, that risk argument has been imported into the Vancouver debate.

I am trying to find out what people in the maritime-law industry think of that number and whether it’s accurate. There has been some fuzzy reporting in this area. Some environmental groups have claimed that the liability is actually capped at around $40 million. As it turns out, it’s only capped at that much by Canadian law if the industry and/or tanker is deemed to be not responsible for the spill. If they are, the cap goes much higher.

For those wondering why there is a cap at all, I’ve discovered through my forays online that it was put in place after the Exxon Valdez accident. There’s an article here explaining the concept behind it, which was to limit the liability of an individual company or tanker but provide more money from a kind of general industry pool.

Finally, in my still-incomplete research on this topic, I’ve been in touch with the president of the Canadian Maritime Law Association, Vancouver lawyer Chris Giaschi. He’s at a conference in New York but had this to say by email:

The city (and province) have no constitutional jurisdiction whatsoever. 

Only the feds can address this and it is, in large measure, already addressed in excruciating detail. 

There are multiple levels of compensation available. They begin with the shipowner. 

When that fund us exhausted there are two levels of international funds and then yet another level provided by the canadian ship source oil pollution fund(the "SSOPF"). 

The annual report of the ssopf always has a table setting the compensation available.


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