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MARINE | California oil spills In association with Gard
California toughens up oil spill regime California has significantly increased the criminal penalties for oil spill-related offences. However, it is uncertain how the new regulations will play out in practice, and the biggest fines will likely be fewer than expected. Frank Gonynor, (left) Senior Claims Adviser Lawyer with Gard (North America) Inc. and Tonje Castberg, (below left) Senior Claims Adviser with Gard AS, analyse the implications If pollution occurs, the spill must be reported immediately and the responsible party’s failure to comply with orders given and measures required may also lead to fines.
The Marine Insurer Americas Edition | June 2021
The new statutory amendment to California’s marine oil pollution law came into effect in January 2021. With it, the civil fine penalty range was doubled from the previous $5,000-$500,000, to $10,000-$1m. More significantly, the second tier of fines that could be imposed if criminal charges are brought, was increased up to $1,000 per US gallon.
IT COULD HAVE BEEN WORSE Prior to the change, there were certainly attempts to lobby against the new legislation. For instance, a suggested provision that would have changed the California state Certificate of Financial Responsibility (COFR) limit from $1bn to $2bn, ended up being removed. There was also successful lobbying against the proposed increase of the criminal fine level, which had been proposed to go to $10,000 per US gallon. A gallon is about 3.8 liters, so even at $1,000 per gallon, the new legislation still has the potential to result in fines exceeding the $1bn limit of the International Group of P&I Clubs’ (IG) oil pollution cover. The Clubs advised their members that the $1bn limitation on cover for pollution, including fines, remains in effect.
FOUR LIMITING FACTORS There are several factors limiting exposure for fines above the $1bn P&I cover. For factors need to be focused on. First, the most common fines after a marine oil pollution incident are civil penalties and, while these have been doubled
