Legal Business OIL POLLUTION IN SINGAPORE MEASURES TO BE TAKEN TO MINIMISE CIVIL & CRIMINAL LIABILITY

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1 Memoranda on legal and business issues and concerns for multiple industry and business communities OIL POLLUTION IN SINGAPORE MEASURES TO BE TAKEN TO MINIMISE CIVIL & CRIMINAL LIABILITY 1 Steven Chong SC Rajah & Tann 4 Battery Road #26-01 Bank of China Building Singapore Tel: Fax: eoasis@sg.rajahandtann.com Website:

2 Oil Pollution In Singapore Measures To Be Taken To Minimise Civil & Criminal Liability INTRODUCTION Singapore is the busiest port in the world. Every day, vessels of varying sizes, types and designs call at our port. There is therefore considerable traffic of vessels in our waterways, fairways and anchorages. With the volume of traffic, it is inevitable that oil spills, whether intentional or accidental will occur in our port waters by way of collisions, groundings and during bunkering operations. When oil pollution from a ship occurs in Singapore waters, the owner of the ship, master or agent will be exposed to various criminal sanctions and civil liabilities. These criminal sanctions and civil liabilities have to be borne in mind when deciding on the measures to be taken in response to the oil pollution. This paper begins by providing an overview of the measures that ought to be taken when a ship causes oil pollution in Singapore waters. It then highlights the statutory provisions in Singapore on the criminal sanctions and civil liabilities. It is evident that given the severe criminal liabilities one must always have an appropriate crisis management team that can be put together at short notice to manage oil spills, particularly if the spill is substantial. MEASURES TO BE TAKEN UPON OCCURRENCE OF OIL POLLUTION IN SINGAPORE Overview When faced with oil pollution from a ship in Singapore waters, the first act that the owner, master or agent must undertake is to inform its insurers of the spill and to appoint solicitors to represent the owner, master or agent, as the case may be, in question. The rational for this is that under Singapore law, a number of reports have to be prepared and submitted within a short time when there is an oil spill. Next, the owner, master or agent must make a report of the incident, which ought to be drafted or at least vetted by the appointed solicitors, to the Director / Deputy Director of Marine of the Martime and Port Authority of Singapore ( MPA ) or the Port Master without delay. 1 Such a report has to include the following information: (i) identity of the ship(s) involved; (ii) time, type and location of incident; 1 Regulation 6 of the Prevention of Pollution of the Sea (Reporting of Pollution Incidents) Regulations read with section 2(1) of the Prevention of Pollution of the Sea Act and section 4 of the Merchant Shipping Act. Page 1

3 (iii) quantity and type of oil or substance involved; and (iv) assistance or salvage measures required or being undertaken. The rationale for such a report is that the regulatory authorities are able to muster up significant resources to contain and / or clean-up the oil spill more efficiently than any insurer or private company. In this regard, they are also able to draw on the navy and the air force for assistance. Whilst having the authorities perform the clean-up operations does mean that higher costs may be incurred, the risks associated with oil pollution generally is minimised considerably. Thirdly, a suitable surveyor should be appointed to investigate the cause and extent of the oil pollution and to co-ordinate or liaise with the MPA on the clean-up operations. It is also necessary to obtain samples from the oil spill and from the ship s cargo and bunker tanks for subsequent analysis to determine the origin of the spill where there is some doubt whether the pollution emanated from the ship. Fourthly, the owner, master or agent must take appropriate steps to preserve records on board the ship if there is danger of the records being misplaced or destroyed. The purpose of the preservation is so that information from such records can be utilised subsequently to minimise the criminal sanctions and civil liabilities of the parties in default. Finally, it is imperative that appropriate media control be put in place. Oil spills generally attract considerable media interest given the detrimental environmental effects it can potentially have. It is also not unusual to portray the owner as someone who is not environmentally friendly. Media control is generally best effected by your solicitors, who, if necessary, will engage a Public Relations Officer to work with them. Establishment Of A Crisis Management Team In most major shipping organisations, there is usually a contingency plan to deal with maritime emergencies. The plan would invariably involve the establishment of a crisis management team. Apart from key senior personnel in the organisation, the team should usually include the following personnel: an appropriate expert; a competent and experienced surveyor; an experienced lawyer; and an able Public Relations Officer (who will work with the lawyers) to handle the members of the public and the press. Page 2

4 It is the responsibility of the crisis management team to handle the matters highlighted in the preceding section. Types Of Possible Claims The types of possible claims that could arise as a consequence of an oil pollution include: loss of life or personal injury and oil pollution damage; clean up cost and / or anti-pollution measures; salvage; wreck removal; and cargo claims. Types Of Legal Proceedings The types of possible legal proceedings that can be initiated as a direct consequence of an oil pollution include: civil proceedings; criminal proceedings; Marine Department / Police inquiry; Coroners inquiry; and Public Commission of Inquiry. Preservation Of Evidence Full and detailed statements should be recorded from all persons involved in the oil spill. This is necessary as the inquiry and / or legal proceedings may take place some time after the accident, in which event, the recollection of the witnesses may not be so accurate, Permission should be obtained from the owner to inspect the vessel. Inspection should take place before any repairs are effected. It is not uncommon for the owner to resist a request for inspection, in which event, it would be advisable to obtain an Order of Court to place a surveyor and / or other suitable expert onboard. Page 3

5 Documents should also be obtained to facilitate the investigation and / or inspection of the vessel. The most important document in this instance is the oil record book. Others will include the following: Deck and engine log entries; Bell books; Working chart; Course recorder print out; and Classification records. CRIMINAL SANCTIONS OR LIABILITIES The statute in Singapore imposing criminal sanctions for oil pollution from a ship in Singapore waters is the Prevention of Pollution of the Sea Act ( PPSA ). 2 Oil Pollution Offence The master, owner and agent of a ship are all (and not just one of them) guilty of an offence under section 7(1) of the PPSA if there is a discharge of oil or an oily mixture from the ship into Singapore waters. This is a strict liability offence, ie it is not based on fault. 3 Given that the offence is a strict liability offence, it would seem that the prosecutor will have a choice as to which of the three parties to prosecute in the event the offence is made out. The penalties that will be imposed on the offender upon conviction of such an offence is as follows: (a) (b) (c) a fine from S$1,000/ - up to S$1,000,000/-; or imprisonment for a term not exceeding 2 years; or both (a) and (b) above. In Jupiter Shipping Pte Ltd v Public Prosecutor, 4 the Chief Justice of Singapore held that upon conviction of the offence mentioned above and where there are no aggravating factors, the fine to be imposed should be about S$10,000/ -. Aggravating factors would exist where the case involves an offender: 2 Chapter Jupiter Shipping Pte Ltd v Public Prosecutor [1993] 2 SLR [1993] 2 SLR 69, 72 H. Page 4

6 with a series of previous convictions; who has committed the offence with complete disregard for any safeguard measures or even intentionally; or who has managed to create a devastatingly large oil slick resulting in the death of countless marine life. 5 The case of Jupiter Shipping Pte Ltd v Public Prosecutor involved a vessel HUDSON BAY which was anchored and receiving fuel oil from a bunker barge into one of her tanks. The fast pumping rate caused a sudden overflow of oil from the air vent of the tank onto the deck, and over the side of the vessel into the sea. The resulting oil slick measured about 300m by 5m in broken patches, covering an area of some 1,500 m 2. The cleaning up operations cost S$12,859/- and were paid by the agents of the vessel. Usually for accidental spill during bunkering operation, the prosecutor will only proceed against one of the parties. It is usually the agents since they are resident in Singapore, which will facilitate service of the proceedings. As agents tend to act for several shipowners, it is not advisable for the agent to be charged. The agent may have a previous conviction on behalf of another owner and even if you are the first time offender, you may receive an aggravated fine because the agent has a previous conviction which is completely unrelated to you. Consequently my approach is usually to make representation to the Attorney-General s Chamber for the owner to be charged instead of the agent and for the lawyer to accept service. Imprisonment for the abovementioned offence is rare. However, in a case involving the VLCC SONG SAN where the offence was committed deliberately, the master was sentenced to 3 months imprisonment and fined S$400,000/ -. The ship s owner and its agent were also fined S$400,000 each. Investigations by the MPA revealed that the officers of the VLCC had deliberately discharged oil refuse from the vessel into sea. The judge in this case said that the sentences imposed reflected the severity of the offences, which were committed in flagrant disregard of any concern for the environment. Under section 7(2) of the PPSA, a person is not guilty of an offence under section 7(1) of the PPSA if: (a) the discharge of oil or oily mixture from a ship was necessary to secure the safety of a ship or for saving life at sea; (b) there was an escape of oil or oily mixture from a ship due to damage (not intentional damage) to the ship or its equipment, and all reasonable precautions were taken, after the damage had occurred or discovery of the discharge of the oil or oily mixture, to prevent or minimise the escape of the oil or oily mixture; or 5 [1993] 2 SLR 69, 72 G. Page 5

7 (c) in the case of an oily mixture, if the discharge was to combat specific pollution incidents in order to minimise the damage from pollution and was approved by the MPA and, where the discharge occurred in another country s jurisdiction, was approved by the government of that country. Offence Of Failing To Report Actual / Potential Oil Pollution Under section 15 of the PPSA, the master of a ship has to without delay report any actual or probable discharge of any harmful substance (eg oil or oily mixture) from the ship into Singapore waters. The manner in which such a report is to be made is prescribed by the Prevention of Pollution of the Sea (Reporting of Pollution Incidents) Regulations. The onus is on the master in the first instance to make the report. It is a defence to the master if he proves he was unable to comply with the reporting requirements. 6 If the master is unable to make the report or the discharge occurs when the ship is being abandoned, the owner, charterer, manager or operator of the ship (or their agents) has to without delay make the requisite report. 7 The legislation does not spell out when the master is unable to comply with the reporting requirements, although it expressly provides that it is a defence to the owner, charterer, manager or operator to show that they neither knew nor suspected that the master was unable to comply with the reporting requirements. 8 It is also a defence to the owner, charterer, manager or operator if they show that they were not aware of a discharge having occurred. 9 A person who fails to make the report in question is guilty of an offence and liable on conviction for a fine of not more than S$5,000/-. 10 Oil Record Books Section 12 of the PPSA stipulates that oil record books are to be carried in all ships in Singapore waters. If such books are not carried, the owner, agent or master of the ship is guilty of an offence and is liable, on conviction, for a fine of not more than S$5,000/-. 11 Given that the MPA has the option of prosecuting either the owner, agent or master, it is not uncommon for the choice to be made on the basis of who is most accessible. Invariably, this would be the agent who will be located within Singapore. The agent, as it will commonly act as agent for more than on one ship, may potentially become saddled with a number of convictions. In Jupiter Shipping Pte Ltd v Public Prosecutor 12, the Court had held that a series of prior convictions is an aggravating factor which will call for a higher sentence to be imposed. As a matter of practice, therefore, I would make representation to the Attorney-General s Chambers to request that the owner be charged. 6 Section 15(2) of the PPSA. 7 Section 15(3) of the PPSA. 8 Section 15(5)(b) of the PPSA. 9 Section 15(5)(a) of the PPSA. 10 Section 15(4) of the PPSA. 11 Section 14(1) of the PPSA. 12 [1993] 2 SLR 69. Page 6

8 The Prevention of Pollution of the Sea (Oil) Regulations, 13 made pursuant to section 12 of the PPSA ( Regulations ) set out the information that is to be recorded in the oil record books. Failure to comply with the Regulations vis-à-vis the maintenance of the relevant particulars in the oil record books constitutes an offence on the part of both the owner and master of the ship. Upon conviction of such an offence, the owner and master are liable to a fine not exceeding S$5,000/ In the case involving the SONG SAN, the master was sentenced to one month imprisonment on each of the ten charges for failing to record oil operations in the vessel s oil record books. The owners were also fined a total of S$50,000 for the ten charges of not keeping proper oil record books. If any person makes an entry in any oil record book which he knows to be false or misleading in any material particular, he is guilty of an offence and liable on conviction to a fine not exceeding S$10,000/ - or to imprisonment for a term not exceeding 12 months or to both. 15 As may be observed from the preceding paragraphs, Singapore legislation imposes severe penalties on parties responsible for oil pollution from ships. In investigating oil pollution incidents, the Singapore authorities will resort to measures such as using satellite technology, engaging foreign experts and performing chemical tests to trace the source of oil spills. Singapore s strategic position makes it vulnerable to pollution. There is a need to keep our seas pollution free because of increasing marine and leisure activities. These measures taken by Singapore authorities display the importance placed in safeguarding these interests. CIVIL LIABILITIES There are three statutes that could govern civil liability in a case involving oil pollution from a ship in Singapore waters: (a) (b) PPSA; Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act ( MSOPA ); 16 and (c) Merchant Shipping Act ( MSA ). 17 Which statute applies depends on the facts of each case. This paper will deal with MSOPA first because it is more likely to be applicable, compared to the other two, in any given case. 13 ie Regulation 20 and Appendix III of the First Schedule to the Prevention of Pollution of the Sea (Oil) Regulations. 14 Section 14(2) of the PPSA. But see also Regulation 11 of the Regulations. 15 Section 14(3) of the PPSA. 16 Chapter Chapter 179. Page 7

9 Merchant Shipping (Civil Liability And Compensation For Oil) Pollution Act Owner s Liability Under section 3 of the MSOPA, the owner of a ship, from which there has been a discharge or escape of oil, is liable regardless of fault for: (a) damage in Singapore s territory caused by contamination due to such discharge or escape of oil; (b) (c) cost of any measures reasonably taken after the discharge or escape of oil to prevent or reduce the damage mentioned in (a) above; damage in Singapore s territory due to the measures mentioned in (b) above; (d) cost of any measures reasonably taken to prevent or reduce a grave and imminent threat of damage due to contamination that might result from the discharge or escape of oil; and (e) damage in Singapore s territory due to the measures mentioned in (d) above. The owner s liability under section 3 of the MSOPA for impairment of the environment only covers any resulting loss in profits and the costs of any reasonable reinstatement measures actually taken or to be taken. 18 The MSOPA applies to any ship: constructed or adapted for carrying oil in bulk as cargo; 19 constructed or adapted so that she is capable of carrying any other cargoes besides oil: while she is carrying oil in bulk as cargo; 20 and while she is on any voyage following the carriage of such oil, unless it is proved that no residues from the carriage of such oil remain in the ship. 21 The MSOPA provides that where there has been a discharge or escape of oil or a grave and imminent threat of damage due to contamination that might result from the discharge or escape of oil within the meaning of the MSOPA, the owner in question can only be held liable under section 18 Section 5(3) of the MSOPA. 19 Section 3(3) of the MSOPA. 20 Section 3(4)(a) of the MSOPA. 21 Section 3(4)(b) of the MSOPA. Page 8

10 3 of the MSOPA for any damage or cost referred to in that section. In other words, he cannot be held liable on any other basis for such damage or cost. 22 The Scottish decision of Landcatch Ltd v International Oil Pollution Compensation Fund 23 illustrates that not every loss or damage suffered by a claimant as a consequence of oil pollution is recoverable under the MSOPA. In this case, the claimants carried on the business of rearing salmon from eggs to smolt in freshwater conditions and selling them for growth to maturity in seawater conditions. As at January 1993, the claimants sold about 65% of their smolt to on-growers in Shetland. The claimants principal place of business was at Ormsary Argyll, about 500 km away from Shetland. On 5 January 1993, the tanker BRAER grounded off Shetland, resulting in the discharge or escape of huge quantities of crude and fuel oil. Due to the oil pollution, the government in the United Kingdom prohibited the preparation or supply of food from fishes from a certain area of the waters around Shetland. The claimants alleged that as a result of the prohibition, they suffered loss of sales in their smolt and additional rearing costs incurred in making special arrangements for on-growing smolt to maturity. They sought to recover such loss and costs under the English equivalent of the MSOPA. The Court held that such loss and costs constituted economic loss as a consequence of damage to property (ie the fish farms in the waters around Shetland) and were only recoverable where the claimants owned or had a possessory title to that property at the time when the loss or damage occurred. The Court refused to accept the claimants argument that the English equivalent of the MSOPA provided for indeterminate liability for oil pollution, and decided that recovery could only be permitted where there is the requisite proximity between the parties in question as laid down in the law of tort. Where The Owner Is Not Liable For Oil Pollution Damage Under The MSOPA Section 4 of the MSOPA provides that an owner is not liable under section 3 of the MSOPA if the discharge or escape of oil: resulted from an act of war, hostilities, civil war, insurrection or an exceptional, inevitable and irresistible natural phenomenon; was due to an act or omission by a person (who is not an employee or agent of the owner) with intent to do damage; or was due wholly to the negligence or wrongful act of a government or other authority in exercising its functions of maintaining lights or other navigation aids for the maintenance of which it was responsible. 22 Section 5(1) of the MSOPA. 23 [1998] 2 Ll.R Page 9

11 Liability Of Other Persons Under The MSOPA For Oil Pollution Damage Under the MSOPA, 24 the following persons are not liable for any damage or cost referred to in section 3 of the MSOPA unles s the damage or cost resulted from an act or omission by them either with intent to cause such damage or cost or recklessly or in the knowledge that such damage or cost would probably result: (a) a servant or agent of the owner of the ship; (b) (c) a person not falling within (a) above but employed or engaged in any capacity on board the ship or to perform any service for the ship; a charterer (including bareboat or demise), including his agent, of the ship; (d) an operator, including his agent, of the ship; (e) a manager, including his agent, of the ship; (f) (g) a salvor, including his agent; and a person, including his agent, taking any of the measures to prevent or reduce the damage referred to in section 3 of the MSOPA. Limitation Of Liability Under The MSOPA Where an owner is liable under section 3 of the MSOPA, he can limit such liability unless it is proved that the discharge or escape of oil or threat of contamination resulted from any act or omission by that owner either with intent to cause such damage or cost as mentioned in section 3 of the MSOPA or recklessly and in the knowledge that such damage or cost would probably result. 25 Under the MSOPA, 26 the limit of liability is based on the tonnage of a ship, such tonnage being her gross tonnage calculated in accordance with the International Convention on Tonnage Measurement of Ships For a ship of not exceeding 5,000 tons, the limitation amount is 3 million special drawing rights ( SDR ). For a ship exceeding 5,000 tons, the limitation amount is 3 million SDR plus 420 SDR for each ton in excess of 5,000 tons up to a maximum of 59.7 million SDR. 24 Section 5(2)(a) (f) of the MSOPA. 25 Section 6(1) and (4) of the MSOPA. 26 Section 6(2) and (5) of the MSOPA. Page 10

12 An owner has to apply to court to limit his liability under section 6 of the MSOPA. 27 After the court has determined the right to limit as well as the limit of liability, the court will direct the owner to make payment of the limitation amount in Singapore dollars into the Court or to the MPA. 28 The rate of conversion of SDR into Singapore dollars is the rate fixed by the International Monetary Fund ( IMF ): on the date of determination of the limit of liability by the court; or if no such rate has been fixed by the IMF on that day, on the last day before that day for which such a rate has been fixed. As fixed by the IMF at 10, one SDR is equivalent to S$ million SDR works out to about S$6.71 million million SDR works out to about S$ million. Arrest Or Detention Of Ship For Oil Pollution Damage Under the MSOPA, a claimant in respect of liability under section 3 of the MSOPA can arrest a ship or her sister ships for security for his claim. 29 The MPA can also detain a ship until security is provided if it has reasonable cause to believe that any oil has been discharged from the ship or a threat of contamination has arisen. 30 After the limitation amount referred to above has been paid into court, the court is to release any ship or property arrested in connection with a claim in respect of liability under section 3 of the MSOPA or any security furnished to prevent or obtain release from such an arrest. 31 Further, no judgment or decree for any such claim can be enforced, except for costs. 32 Claimant Can Proceed Against The Insurer The MSOPA permits a claimant to institute proceedings directly against the insurer. 33 The insurer has, in addition to the defences available to the owner under section 4 of the MSOPA, the defence that the discharge or escape of oil or threat of contamination was due to the wilful misconduct of the owner. 34 The insurer s liability is limited to the amount of the limitation fund under section 6 of the MSOPA, even where the owner is not entitled to limit liability Section 7(1) of the MSOPA. 28 Section 7(2) of the MSOPA. 29 Section 16(1) of the MSOPA. 30 Section 20(1) of the MSOPA. 31 Section 8(a) of the MSOPA. 32 Section 8(b) of the MSOPA. 33 Section 15(1) of the MSOPA. 34 Section 15(2) of the MSOPA. 35 Section 15(3) of the MSOPA. Page 11

13 Time-Bar The MSOPA stipulates that an action to enforce a claim for oil pollution liability has to be commenced within three years after the claim arose and not later than six years after the event resulting in the discharge or escape of oil or threat of contamination. 36 International Oil Pollution Compensation Fund The MSOPA gives the International Fund ( the Fund ), established by the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992, the legal capacity of an actual person who can sue and be sued. 37 In certain circumstances, a claimant can look to the Fund for compensation. The MSOPA provides that the Fund is liable where a claimant has not been able to obtain full compensation under section 3 of the MSOPA because: (a) the discharge or escape of oil, or threat of contamination: (i) resulted from an exceptional, inevitable and irresistible natural phenomenon; 38 (ii) (iii) was due wholly to an act or omission by another person (not an employee or agent of the owner) with intent to do damage; 39 or was due wholly to the negligence or wrongful act of a government or other authority in exercising its function of maintaining lights or other navigational aids for the maintenance of which it was responsible; 40 (b) (c) the owner or insurer cannot meet his obligations in full; 41 or the damage exceeds the limit of liability under section 6 of the MSOPA or section 136 of the MSA, as the case may be. 42 Under the MSOPA, the Fund is not liable if: (a) it proves that the oil pollution damage: (i) resulted from an act of war, hostilities, civil war or insurrection; 43 or 36 Section 12 of the MS OPA. 37 Section 24 of the MSOPA. 38 Section 27(1)(a)(i) of the MSOPA. 39 Section 27(1)(a)(ii) of the MSOPA. 40 Section 27(1)(a)(iii) of the MSOPA. 41 Section 27(1)(b) of the MSOPA. 42 Section 27(1)(c) of the MSOPA. Page 12

14 (ii) was caused by oil which has been discharged or escaped from a warship or other ship owned or operated by a State and used, at the time of the occurrence, only on government non-commercial service; 44 or (b) the claimant cannot prove that the damage resulted from an occurrence involving a ship identified by him, or involving two or more ships one of which is identified by him. 45 Also, under the MSOPA, the Fund is exonerated wholly or partly from liability to the claimant where it proves that the pollution damage resulted wholly or partly from: an act or omission with intent to cause damage by the claimant; 46 or the negligence of the claimant. 47 The MSOPA provides for limits to the Fund s liability. 48 For any one incident, the aggregate amount of compensation payable by the Fund and the amount of compensat ion actually paid under section 3 of the MSOPA for pollution damage shall not to exceed 135 million SDR. 49 Further, the aggregate amount of compensation payable by the Fund for pollution damage resulting from an exceptional, inevitable and irresistible nat ural phenomenon is not to exceed 135 million SDR. 50 If an incident occurs during a period when there are three Fund Convention countries in respect of which the combined quantity of oil imported or received in such countries during the preceding calendar year is 600 million tons or more, then the Fund s liability in the two instances mentioned in the preceding paragraph is increased to 200 million SDR. Under the MSOPA, the Fund is bound by any judgment against the owner or insurer in respect of their liability under section 3 of the MSOPA if the Fund is given notice of the proceedings in question. 51 In Singapore, an action against the Fund will not be entertained unless the action is commenced, or notice of proceedings against the owner or insurer is given, not later than 3 years after the claims against the Fund arose. 52 Further, no action to enforce a claim against the Fund is to be entertained in Singapore unless the action is commenced not later than six years after the occurrence resulting in the oil pollution or threat of contamination Section 27(6)(a)(i) of the MSOPA. 44 Section 27(6)(a)(ii) of the MSOPA. 45 Section 27(6)(b) of the MSOPA. 46 Section 27(7)(a) of the MSOPA. 47 Section 27(7)(b) of the MSOPA. 48 Section 28 of the MSOPA. 49 Section 28(1)(a) of the MSOPA. 50 Section 28(1)(b) of the MSOPA. 51 Section 29(2) of the MSOPA. 52 Section 30(1) of the MSOPA. 53 Section 30(3) of the MSOPA. Page 13

15 Prevention Of Pollution Of The Sea Act Owner s Liability Where the MSOPA is not applicable to the facts of a case, an owner of a ship can still be liable to the MPA for the costs of removing oil discharged from the ship under the PPSA. 54 The PPSA not only permits the Port Master to detain the ship until security has been provided for such costs, 55 but also permits the MPA to arrest the ship or her sister ships for claims regarding such costs. 56 Liability for clean-up costs under the PPSA is not subject to tonnage limitation under section 136 of the MSA. This was so decided by the Singapore High Court in the case of Ventura Navigation Inc v Port of Singapore Authority. 57 Merchant Shipping Act Owner s Liability Where the MSOPA does not apply, and a claim pertaining to oil pollution damage does not involve clean-up costs under the PPSA, an owner may still be able to limit liability under section 136(1) of the MSA. An example of such a situation would be where bunkers escape from a container ship which has run aground, and the resultant oil pollution causes damage to a fish farm. To be able to limit liability under section 136(1) of the MSA, the owner has to prove that the loss or damage arising from the oil pollution was not caused by any actual fault or privity on his part. The phrase actual fault or privity essentially refers to some form of fault or blameworthy conduct on the part of the owner or to which the owner consented or of which the owner had knowledge. Limitation under section 136(1) of the MSA is based on the tonnage of the offending ship. For a mechanically propelled ship, the limitation tonnage is its net tonnage with the addition, if any, of engine-room space deducted for the purpose of ascertaini ng net tonnage. For any other ship, the limitation tonnage shall be its net tonnage. It is not certain under Singapore law whether for mechanically propelled ships, the net tonnage should be the net tonnage measured under the 1969 Tonnage Convention or some other tonnage measurement system which requires deduction of engine-room space from gross tonnage to derive net tonnage. There has been no reported decision in Singapore on this issue. An unreported decision of the Registrar of the Singapore High Court in The Asean Unity in 1997 may lend some assistance in this regard. In this case, the Registrar decided that the vessel s limitation tonnage should be based on her net tonnage measured under the 1969 Tonnage Convention. There is no record of the Registrar s reasons for arriving at such a conclusion. Where the owner is entitled to limit liability under section 136(1) of the MSA, the following would apply: 54 Section 18 of the MSOPA. 55 Section 23(2) of the MSOPA. 56 Section 23(4) of the MSOPA. 57 [1989] 3 MLJ 349 of the MSOPA. Page 14

16 the limitation amount for loss of life or personal injury, with or without loss of or damage to property, is based on S$ per limitation ton of the offending ship; 58 and the limitation amount for loss of or damage to property, with or without loss of life or personal injury, is based on S$ per limitation ton of the offending ship. 59 CONCLUSION This paper has provided you with an overview of the measures that you should take when faced with an oil pollution in Singapore waters. It has also highlighted the key criminal and civil liabilities that arise when a ship causes oil pollution in Singapore waters. If you require any additional information on the issues raised in this paper, please do not hesitate to contact Steven Chong at DID Rajah & Tann is one of the largest law firms in Singapore. It is a full service firm and given its alliances, including US premier firm Weil, Gotshal & Manges, is able to tap into a number of countries. Rajah & Tann is firmly committed to the provision of high quality legal services. It places strong emphasis on promptness, accessibility and reliability in dealings with clients. At the same time, the firm strives towards a practical yet creative approach in dealing with business and commercial problems. The information contained in this newsletter is correct to the best of our knowledge and belief at the time of writing. Specific professional advice should be sought before any action is taken. In this regard, you may call the lawyer you normally deal with in Rajah & Tann or the Knowledge Management team at eoasis@sg.rajahandtann.com Rajah & Tann Knowledge Management. All rights reserved. 58 Section 136 (i) read with Merchant Shipping (Limitation of Liability) (Singapore Currency Equivalents) Order of 28 January Section 136 (ii) read with Merchant Shipping (Limitation of Liability) (Singapore Currency Equivalents) Order of 28 January Page 15