OIL POLLUTION ACT, 1990

On March 24, 1989, the ‘Exxon Valdez’ spilled over 11 million gallons of Alaskan crude oil in the water of Prince William Sound. The two most important lessons learned in the aftermath of the spill were:-

a) The United States lacked adequate resources, particularly Federal funds, to respond to spills.
b) The scope of damages compensable under Federal Law to those impacted by a spill was fairly narrow.

The Oil Pollution Act (OPA) 1990, thus came into being to address both the above deficiencies.

OPA-90 Purpose:

A) To establish the liability for the damage resulting from oil pollution.
B) To establish a fund for the payment of compensation for such damages.

Salient Features of OPA 90:

1. It works to avoid oil spills from vessels & enforces removal of spilled oil.
2. It defines responsible parties and assigns financial liability for the cost of cleanup and damage, and implements processes for measuring damages.
3. It specifies damages for which violators are liable and establishes a fund for damages, cleanup, and removal costs.
4. It provides greater environmental safeguards by setting new requirements for vessel construction (double hull tankers) and crew manning and licensing.
5. It requires specific operating procedures and mandatory contingency planning i.e. national contingency plan and Vessel Response Plan (VRP) with requirements for Qualified Individual (QI).
6. It enhances federal response capability and broadens enforcement authorities.
7. It broadens financial responsibility requirements, increases potential liabilities and increases penalties.
8. It encourages creation of new research and development programs.
9. It has been instrumental in bringing changes in the oil production, transportation, and distribution industries.

LIABILITY:

‘Responsible parties’ are liable for –

1. Removal costs incurred by the United States of by any person for acts taken up by the person in accordance with the National Contingency Plan.
2. Damage to natural resources, personal property, including cost of assessing the damage.
3. Revenue losses and reduction in profits and earning capacity.
4. Damage to public services, including the cost of providing increased or additional public services during or after removal activities.

Third Party Liability: If it is established that a discharge or threat of discharge is due to an act of a third party, the third party becomes the responsible party.

The responsible party can limit their liability in accordance with the provisions of the Act. The limitations are based on the gross tonnage of the vessel and whether it is a single hull or double hull ship.