A recent judgment of the Land and Environment Court of New South Wales, Filipowski v Hemina Holdings SA; Filipowski v Rajagopalan (No 2)  NSWLEC 104 concerning the 'MSC Carla' (the 'MSC Carla' case), reinforces the need for owners and masters of ships to ensure proper maintenance, repair and rapid response to minimise the environmental impact of oil spills. Although only a relatively small spill by volume of oil (140 litres), the owner was fined A$150,000 which is similar to some of the penalties received by owners under the old penalty regime for far more significant oil spills.
This judgment follows the significant increase in penalties under the NSW Marine Pollution Act 1987 (NSW) (Act) for the discharge of oil or oily mixtures into State waters from A$220,00 to A$500,000 in the case of an individual and from A$1,100,000 to A$10,000,000 in the case of a body corporate1. These increases were to reflect the significance of the impacted environment and the potential scale of the problem, the insufficient deterrent of the effect of the former penalties and provide greater incentive for compliance with the Act2.
In the 'MSC Carla' case the owners Hemina Holdings SA and the Master of the ship, Captain Rajagopalan, were charged with the offence of contravening section 8 of the Marine Pollution Act in relation to a discharge of oil into State waters at Brotherson Dock, Botany Bay. Both the owner and Master pleaded guilty. The Master was not convicted and instead received a good behaviour of two years. The Court found that the amount of oil discharged was in the low range and the owner was fined $150,000.
Only three cases have been decided since the 2002 increase in penalties and these all involved oil spills of less than 50 litres. In Filipowski v Magnavia Schiffahrtsgellschaft 3 the amount of oil discharged was 30-40 litres. A penalty of $25,000, reduced from $40,000, in light of mitigating circumstance, was imposed. In Filipowski v Vopak Terminals Sydney Pty Ltd4 a penalty of $60,000 was imposed against the owner in respect of a spill of 40 litres. In Morrison v Defence Maritime Services Pty Ltd5 the owner was fined $35,000 and the Master $30,000 in respect of a spill of 5-15 litres.
The penalty in 'MSC Carla' was in the low range largely due to the early guilty plea, the quick response of the ship's Master to the incident, the relatively small volume of oil (140 litres) and the limited environmental impact. The potential for environmental damage from oil pollution have seen some significant penalties under the old NSW penalty regime and in other States where the volumes and environmental impact were more significant.
For example, in the 'Laura D'Amato'6 the owners were fined A$510,000 and the Chief Officer A$110,000 in respect of a spill of 294,000 litres as well as some A$4.9M in clean up and port authority costs. In the 'Golden Frontier'7 owners were fined A$135,000 and the Master A$54,000 in respect of a spill of 3,434 litres. In the 'MSC Viviana'8 owners were fined A$150,000 and the Master A$25,000 in respect of a spill of 180,237 litres.
In some earlier decisions, for example, Morrison v Che Mat9 in respect of a spill of 150 litres the Court fined the owner $50,000 and fined the Master $10,000. In Morrison v Ausmarine Fisheries10 more than 200 litres of oil escaped and a fine of $80,000 was imposed on the owner and $40,000 as against the chief engineer.
In the Queensland 'Pacific Quest'11 decision, owners were fined A$180,000 in respect of a spill of 9,300 litres off the Great Barrier Reef. In the Victorian case of 'ANL Pioneer'12, owners were fined over $A1,000,000 and the Master A$20,000 in respect of a spill at sea of 230 tonnes of contaminated ballast water which left a slick of some 12km off the coast of Victoria.
Facts of the 'MSC Carla' case
'MSC Carla' (Carla) docked at Brotherson Dock, Botany Bay on 10 January 2006. Oil was observed leaking from the Carla into State waters in contravention of section 8 of the Marine Pollution Act. The Master and owner pleaded guilty so the hearing concerned sentencing only. In sentencing the matters in dispute were the extent of the oil spill; whether the Master and the owner took all necessary measures to prevent, or in the alternative, abate or mitigate the extent of the oil spill; and prior to the offences, whether the maintenance of the Carla was adequate.
The Court accepted that the volume of the discharge was a total approximately 140 litres. It was also common ground between the parties that the cause of the oil discharge was a fatigue crack in the hull plating in the No 4 starboard fuel oil tank of the Carla.
In order to minimise the volume of the spill, the Master conducted soundings of fuel oil and ballast tanks together with stability calculations in anticipation of transferring 100 cubic tonnes of heavy fuel oil from the No. 4 starboard fuel oil tank to the No. 4 port fuel oil tank. The Master sought the approval and advice regarding the transfer from the agent's technical department in Hong Kong which was initially given. He was later told, after transferring only 3,500 litres that as the precise location of the leak was not yet known, a premature transfer may make the situation worse. The transfer was then suspended until divers could ascertain the location of the leak. The Master then contacted a diver in order that the leak could be found. However, the diver was unable to attend until 08:00 the following morning.
When an oil spill occurs, Masters must comply with the Shipboard Oil Pollution Emergency Plan (SOPEP). Regulation 26 of Annex I of the MARPOL Convention13 requires that oil tankers of 150 tonnes gross tonnage or more and all ships of 400 tonnes gross tonnage or more carry an approved SOPEP. The primary purpose of the SOPEP is to set in motion the necessary actions to stop and minimise the discharge of oil and its effects. In relation to hull leakage, section 3.1.5 of the SOPEP provides that measures must be immediately taken to close any manifold valves, sound emergency alarms and initiate emergency response procedures. The Master must inform the terminal personnel, locate the source of the leak and consider the use of a diver if necessary to locate the leak. The SOPEP also identifies measures which should be undertaken in the event that the exact location of a leak cannot be identified.
The Prosecution's case was that the decision to stop the transfer had the adverse consequence of allowing the oil to continue leaking until the divers identified the site of the leak. The defendants submitted that the Master had the crew immediately clean up the spill and ensured that proper soundings were taken. The oil pollution prevention team was activated and divers were called to conduct an inspection.
The Court found that the Master's conduct up until the point when the initial transfer was stopped was consistent with the SOPEP. The Court found that the Prosecutor had not established beyond a reasonable doubt that the master had acted recklessly or negligently and stated that the 'defendant's actions should not be judged with the benefit of hindsight that, now knowing the precise location of the leak.'14.
At the time of the oil spill Carla was considered seaworthy by DNV, a leading ship classification society. The Prosecution submitted that Carla would have loaded, carried and discharged hundreds of thousands of cargo containers in her 21 years of service. The Prosecution argued that more extensive inspections should be conducted at more frequent intervals than the minimum mandatory requirements of the classification societies and that inadequate maintenance and repair caused the structural failure which lead to the oil leak. The Court accepted this and found that the owner should have undertaken more maintenance to check the hull thickness around the fuel tanks given the Carla's age and length of service.
In relation to environmental harm, the evidence was that the area in which oil escaped was unlikely to have contained protected species although some mortality to intertidal organisms such as algae was likely and could potentially have affected plankton. Overall the impact on aquatic ecosystems, aquatic biological resources and protected species was considered to be small.
The decision reinforces the need for a strict adherence to the SOPEP and a quick response to minimise the environmental impact of an oil spill. Owners of ships should also closely monitor the maintenance and repair of ships and consider the regularity of inspection based on the ship's age and length of service.
1 The Marine Legislation Amendment (Marine Pollution) Act 2002 amended the Marine Pollution Act 1987 to incorporate higher penalties, which commenced on 1 November 2002.
2 The Hon. Ian MacDonald (Parliamentary Secretary) Marine Legislation Amendment (Marine Pollution) Bill Second Reading Speech, 24 September 2002.
3 Filipowski v Magnavia Schiffahrtsgellschaft  NSWLEC 404
4 Filipowski v Vopak Terminals Sydney Pty Ltd  NSWLEC 104
5 Morrison v Defence Maritime Services Pty Ltd  NSWLEC 118
6 Filipowski v Frateilli  NSWLEC 50
7 Filipowski v Bak  NSWLEC 498
8 Filipowski v Mediterranean Shipping Co SA  NSWLEC 159
9 Morrison v Che Mat (1997) 95 LGERA 212
10 Morrison v Ausmarine Fisheries (1995) 88 LGERA 442
11 R v Mattrim Marine, District Court of QLD, 20 June 2005
12 EPA v Reederei Suderelbe GmbH & Co Schiffarhts Kg (RSS), unreported, Melbourne Magistrates' Court, 20 December 2005
13 The Marine Pollution Act 1987 (NSW) incorporates into domestic legislation in NSW the International Convention for the Prevention of Pollution by Ships, commonly called the MARPOL Convention.
14 Filipowski v Hemina Holdings SA; Filipowski v Rajagopalan (No 2)  NSWLEC 104, at 110.
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