Legal Remedies for Marine Ecological Damage in China: As Illustrated by the Tasman Sea Oil Spills Case

Author:Xiaoqin Zhu - Lin Dong

This paper analyzes legal remedies for marine ecological damage as provided in Article 90, Section 2 of the Marine Environment Protection Law of the People’s Republic of China. In doing so, the paper examines the Tasman Sea Oil Spills Case, the first civil case in China to claim marine ecological damage involving foreign interests. The paper finds that many issues arise in practice due to... (see full summary)


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Xiaoqin Zhu: Professor of international law at the School of Law of Xiamen University, China. Ph.D(Xiamen)

Lin Dong: Ph.D. Candidate at the School of Oceanography and Environment, Xiamen Universtiy

I Introduction

China’s rapid economic development is the key to increasing number of activities to production output including marine transportation, oil exploration and exploitation, and marine fishery production. This has resulted in an increased risk of significant Page 392 accidental oil spills from ships. Additionally, with the rapidly growing consumption of oil, China has evolved into one of the largest importers of petroleum in recent years. In 2007, China imported nearly 200 million tons of petroleum.1 This enormous scale of petroleum import takes place mainly through ships entering through China such that the probability of oil spills occuring in China’s sea areas has and will continue to significantly increase.2 According to annual bulletins published by the Ministry of Environmental Protection on the environmental quality of China’ s offshore areas, there were 124 pollution accidents caused by ships along China’ s seaboard in 2006 and 107 similiar accidents in 2007. The total volume of oil leakage in 2006 was 1,216 tons including 5 accidents involving oil and chemical pollution with oil leakage volumes of more than 50 tons. In 2007, the total volume of oil leakage was nearly 900 tons, with 38 oil spills of more than 0.1 tons each and 5 oil spills with a volume of oil leakage of more than 50 tons.3 These frequent oil spills make the already worrying state of the ecological environment in China’ s seas even worse.

II Definition of Marine Ecological Damage

Scholars have not yet succeeded in reaching a consensus on a uniform definition of the term “ecological damage.”Nonetheless, there are a number of scholars attempting to give the term an academic definition. For example, Dr. Lahnstein Christian has argued that “ecological damage is material damage to nature, specifically to earth, water, air, climate, landscape, flora and the fauna living in them, and to the interaction between them. It is also conspicuous man-made damage to the ecosystem and its component parts.” 4

According to academic jargon used by legislators and scholars, both in China and elsewhere, “ecological damage,” “pure ecological damage,” “damage to the environment per se,” “environmental damage,” “pure environmental damage,” “impairment of the environment”and “natural resource damage”are often used without significant Page 393 differentiation.5 “Ecological damage”is frequently used by European scholars,6 while “natural resource damage” is the term often used in U.S. law and by American scholars. For example, the U.S. Oil Pollution Act of 1990 ( “OPA”)7 in Section 1002 (b)(2)(A) defines “natural resource damage” as “damages for injury to, destruction of, loss of, or loss of use of, natural resources, including the reasonable costs of assessing the damage.”

The terms “pure ecological damage,” “pure environmental damage”and “environmental damage” are usually used to refer to damage to the environment per se. Since environmental elements do not belong to any individual, after being defined as “pure” these damages do not include personal injury to victims or property damage.8 The term “marine environment” includes sea water, substances both dissolved and suspended in sea water, sediment and living organisms in the ocean. According to Article 95, Section 1 of the Marine Environment Protection Law of the People’s Republic of China (“MEPL”),9 “pollution damage to the marine environment”means any direct or indirect introduction of substances or energy into the marine environment which results in deleterious effects such as harm to marine living resources, hazards to human health, hindrance to fishing and other legitimate activities at sea, impairment of the useful quality of sea water and degradation of environmental quality. The authors believe that “harm to marine living resources,” “impairment of the useful quality of sea water”and “degradation of environmental quality”are specific damages to marine ecology.

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III Practical Confusion caused by Excessive Simplicity of Legislation

China has already established legal remedies for marine ecological damage. According to Article 90, Section 2 of the MEPL:

[F]or damages to marine ecosystems, marine fishery resources and marine protected areas which cause heavy losses to the State, the department invested with power by the provisions of this law to conduct marine environment supervision and administration shall, on behalf of the State, put forward compensation demand to those held responsible for the damages.

However, this provision is too simple to work well in practice with the result of a large amount of practical confusion.

The Tasman Sea Case illustrates this point. The Tasman Sea, a Maltese tanker carrying 80,000 tons of crude oil, collided with a Chinese ship, the Shunkai No.1, in Bohai Bay on November 23, 2002. This accident caused a crude oil leakage of about 200 tons resulting in heavy environmental pollution in the Bohai Sea areas and posed a huge threat to the marine ecological environment. The event led to an oil pollution compensation lawsuit which lasted for two years and involved 10 cases including more than 1,500 plaintiffs and 170 million RMB.10 It was the first claim against the insurers of foreign companies based on the International Convention on Civil Liability for Oil Pollution Damage(“CLC” )11 since China joined this Convention. It was also the first civil case of a legal nature lodged by China’s Oceanic Administrative Authority to claim marine ecological damages involving foreign interests. The case created a national precedent to preserve the rights and interests of the Chinese government regarding the marine ecology environment and, hence, attracted widespread media attention at the time.

After several trials, on December 30, 2004, two years after the accident, the Tianjin Maritime Court of China made the first trial judgment on the 10 cases related to the event.12 The defendants, the owner of Tasman Sea and the London Steam-Ship Owners Mutual Insurance Association LTD., were held jointly and severally liable for the plaintiff’s compensation to the Tianjin Oceanic Administration of nearly 10 million RMB (7.5 million RMB for the loss of marine environmental capacity and 2.5 million RMB for the cost of investigation, monitoring, evaluation and bio-restoration research).

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The defendants were also held liable to the plaintiff, the Tianjin Fisheries and Fishing Port Supervision and Administration Agency, for more than 15 million RMB for the loss of fishery resources as well as more than 17 million RMB in compensation for 1,490 fishermen for their losses and damages. The final amount of compensation in this claim was more than 42.09 million RMB.13 In the cases of Tianjin Oceanic Administration and Tianjin Fisheries and Fishing Port Supervision and Administration Agency, which dealt with the compensation for marine ecological damage, both the plaintiffs and the defendants did not accept the judgements of the lower court but also appealed to the Tianjin High Court. As of October 2009, those two cases are still ongoing and final judgements have not yet been reached.

Another example involved a Portuguese tanker in the Arteaga case. Fully loaded with crude oil, the Arteaga accidentally struck a rock formation while entering Dalian New Port on April 3, 2005. Due to the collision, the tanker began leaking huge amounts of crude oil, which resulted in heavy pollution to the marine environment. A total of 104 sea-water aquaculture enterprises and fishermen nearby were affected and the parties lodged a compensation lawsuit with a maximum claim of one billion RMB. In May 2009, after more than three years of hearings, the 104 sea-water aquaculture enterprises and fishermen reached reconciliation with the defendant.14 However, the marine ecological damage compensation lawsuit initiated by the Dalian Oceanic and Fishery Administration on behalf of the State is still awaiting the judgement of the Dalian Maritime Court.15

The frequency of oil pollution incidents is currently increasing in China’ s sea areas. It indicates that each case has the volume of oil leakage above one ton.

However, only a few lawsuits have resulted from such incidents. These lawsuits have often become long, drawn-out and unresolved cases. This phenomenon fully exposes the problem of the Chinese legal systems for compensation related to marine ecological damage. On the surface, the point of contention between parties to such lawsuits is the assessment of the value of marine ecology. However, there are also problems related to evidentiary procedures in civil lawsuits regarding compensation for marine ecological damage. In fact, it shows that China’s legal system related to compensation for marine ecological damage is not sound enough to carry out its purpose in practice. The problems, including the lack of relevant substantive law, such as the indeterminacy of the status of the litigant and the incompleteness of the measure of indemnity, lead to the severe consequence that nobody pays for marine ecologicalPage 396damage. As a result, the Chinese marine ecosystem...

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