WATCHING THE WORLD WRY AGREEMENT ON OPA 90

Delegates at a tanker industry convention in London last week were eased into 3 days of debate with a few pithy observations on well documented issues.

"Over the last 20 years, tanker market rates have been insufficient to pay down new ships over the ships' lifetime," said Andreas Ugland, chairman of the International Association of Independent Tankers Owners, Oslo.

"The present market is lousy, since we have too much tonnage," continued Ugland. "The financial situation of many shipping companies is even worse."

No one disagreed with that.

Having warmed up the engines in safe waters, Ugland set the compass for the eye of the storm: the U.S. Oil Pollution Act of 1990 (OPA 90).

"The old principle of sharing responsibility for transportation between cargo owner and shipping company is not included in OPA, to the detriment of the environment," Ugland said. "This significantly reduces the incentive for charterers to choose the best operator and the best ship."

GREAT BLOW

Ugland said the U.S. government's decision to introduce OPA 90 rather than ratify International Maritime Organization protocols on pollution compensation was one of the greatest blows to IMO and responsible shipping.

"For a major country like the U.S. not to accept to work within the United Nations Organization's IMO, but to go their own way, is a very sad example for other countries."

Gerhard Kurz, with joint roles as president of Mobil Shipping & Transportation Co. and chairman of Oil Companies' International Marine Forum, was more philosophical.

"Like other shipowners we are finding difficulties in complying with OPA 90," said Kurz. "However, it is a law which must be lived with. We must all make sure we do not get in a situation where we become exposed to liability."

PACESETTER

"OPA 90 came as a shock to the tanker industry, but today I would say it is not as devastating as was originally perceived. The U.S. has been a pacesetter. Governments around the world are now tightening safety and pollution regulations, so OPA 90 no longer seems so isolated."

Frank Iarossi, chairman of the American Bureau of Shipping, said OPA 90 was also a milestone because federal government had relinquished control of maritime legislation to state government.

"State legislation was key to passing OPA 90. There is not even a requirement for consistency of legislation between states," Iarossi said.

"OPA 90 may give false hope to tanker charterers that they are free of liability. State courts may take an entirely different view of liability than OPA 90. At state level, plaintiffs will go for the deepest pockets. "

From the floor, Bill Gray, executive vice-president of Skaarup Oil Corp., said OPA 90 was an El Dorado for lawyers.

Once again, no one disagreed.