Compensation for Offshore Pollution: Ships and Platforms

.²⁹ Yet, a system devised to provide States with protection against high clean-up costs has developed into one which is meant to provide economic recompense to individuals and companies, eg engaged in fishing and tourism. Indeed, the level of economic claims has now grown so as to dwarf clean-up and reinstatement costs; that in turn has put pressure on the funds available.

ii. The Limitation Conundrum: Pollution Claims

If there is an offshore catastrophe, should there be any financial limit available to potential defendants? When members of the public read about BP making available compensation in the order of $20 billion after Deepwater Horizon, it might be easy for them to assume that almost unlimited sums will easily be available for disasters off their coasts. But BP is massively dependent on the US for commercial reasons, whatever its legal liability. The US was fortunate in a sense that it was Exxon which was involved in the Exxon Valdez disaster in Alaska in 1989. Political and national factors may also be involved. France was lucky that it was Total which was interested in the cargo in the Erika disaster off Brittany in 1999.³⁰ Australia was relieved that it was BHP Transport which was the demise charterer of the Iron Baron which grounded in 1995.³¹

The CLC/Fund system was a compromise, both between the shipping and oil industries themselves, but also for both of them with the international community. One of the components was that the shipowners would be able to limit their liabilities under the first tier; another was that the IOPC Fund would have a second tier limit (the total liability being aggregated).

The idea that shipowners can limit their liabilities is longstanding, regarded as essential by the shipping industry and P&I Clubs, but nevertheless controversial. That there should be an overall limit for the IOPC Fund’s liability is more understandable, as it is effectively funded by an international tax, but the continuing question has been the level at which to set the limits. Experience has shown that the limits become out of date through the effects of inflation, but also because environmental and economic loss claims have increased dramatically. The idea of a fund adequate to deal with localised clean-up has been supplanted by a desire to compensate whole industries affected over hundreds of kilometres. The scale of the Erika and Prestige disasters on tourist and fishing industries along the whole eastern Atlantic coast was immense. We have seen the real and imagined scale of losses claimed as a result of Deepwater Horizon. In Australia, a major tanker disaster off the Great Barrier Reef would have potentially huge financial implications for tourism and fishing.

These catastrophes exceed the normal bounds of what we might expect could be dealt with by a tort based compensation system; they are on the scale of great natural disasters like the 2011 floods in Queensland, or the 2009 storms in France (prior to Erika). The level of compensation required is immense, of a kind requiring a national response, but sometimes of international scale. Apart from the ‘good fortune’ of having a deep pocketed BP, can a national or international system produce an effective financial response, or must we accept that (as with floods and fires), some loss will lie where it falls?

The sums available for compensation under the CLC/Fund system have been progressively increased. After Erika and Prestige, the third tier ‘Supplementary Fund’ was created. In the context of the European experience the sums shown in Table 1 are only just about adequate – but they are securely available to claimants.

Table 1: CLC and Fund System Limits

The oil industry was concerned that the creation of the third tier (financed solely by those importing oil into Supplementary Fund States) had altered the industry balance between themselves and the shipowners. The Clubs then came up with two agreements STOPIA³³ and TOPIA³⁴ under which that balance was to be redressed, in particular by accepting minimum shipowner liabilities (eg for small tankers) of 20 million sdr (about £20 million). These agreements do not put any more money on the table. What they do illustrate is that potential defendants may sometimes accept obligations to the world at large³⁵ in circumstances where for whatever reason it is not possible to produce an international convention. At the very least these ‘voluntary’ schemes may offer interim protection to States where there are obstacles to national or international legislation. This may be relevant to the debate about compensation for oil rig catastrophes.

iii. Evaluation of the Oil Tanker Regime

Internationally the CLC/ Fund system has been a success in achieving international equity³⁶ and also uniformity; as at 1 July 2012 there were 106 State parties to both the CLC and Fund,³⁷ and 28 States party to the Supplementary Fund Protocol 2003. The big omission is the US which went its own way after Exxon Valdez and enacted its own Oil Pollution Act 1990. Its system means that it does not directly contribute to pollution claims in other States caused by ships en route to the US,³⁸ but it has managed to preserve certain US state laws providing for unlimited liability.³⁹ While I am an admirer of the international system, one must always ask dispassionately whether or not there is an alternative. What would happen if a developed state, such as Australia, took a unilateralist approach like the US? Could it create unlimited liabilities? In reality, states trying to operate outside of the IOPC system will have great difficulties in enforcing such liabilities. Shipowners will only maintain P&I cover to the CLC limits and the Fund Convention will not be applicable. It may be that special insurance arrangements can only be made for big players like the US and China.

iv. Ships and Offshore Platforms

The CLC and Fund system only applies to ‘ships’ as defined, ie oil tankers. It does not apply to liabilities arising from the blow out of oil and gas wells, or explosions on oil rigs or platforms. Rigs, including West Atlas and Deepwater Horizon, are not ‘constructed or adapted for the carriage of oil in bulk’. The reason is partly historical, because the CLC/ Fund system was designed to deal with the carriage of oil on ships at a time when offshore drilling did not have the importance it does today. The Clubs have traditionally only provided cover for ships, eg vessels involved in the carriage of cargo. With the advent of mobile offshore units (MOUs), including jack-up and semi-submersible rigs, the Clubs have offered limited ‘ship-like’ cover to their members. Thus, the Gard Club’s 2012 Rules cover crew liabilities and repatriation, collisions with other vessels and wreck removal. There is a policy limit of US$100m for losses arising ‘out of any one event’, but the Club specifically excludes cover for pollution from the well being drilled or worked, or from production operations (eg seepage or uncontrolled flows), or of any damage to the well itself.⁴⁰

The offshore industry has developed a whole series of floating units to receive, process and store resources extracted from the sea-bed. There has been considerable uncertainty about whether FPSOs (Floating Production Storage and Offloading vessels) or FSOs (Floating Storage and Offloading units) are ‘ships’ within the CLC/ Fund system. Some of these units may be converted tankers with the appearance of, and history of being, ships; others are purpose built and with no resemblance to ships. Resolution of this issue depends on whether FPSOs fall within the complex definition of ship in Article 1 of the CLC and is largely beyond this chapter. The view taken within the Assembly of the IOPC Fund since 1999 was that FPSOs are not CLC/Fund ‘ships’ when they are semi-permanently moored at a well head, but are when actually in transit with oil cargoes.⁴¹ A more recent legal opinion⁴² commissioned by the Funds has broadly confirmed this view, emphasising the importance of carriage of cargoes to the application of the liability provisions in the CLC/ Fund system.⁴³ The result of such reasoning is that the main international system for compensating for oil pollution would not be applicable to spills from units that could contain very large quantities of oil.⁴⁴ It is important to note that this conclusion of the IOPC Fund on the applicability of its own convention would not be binding on the courts of member States.⁴⁵ If such units are not within the CLC/ Fund system, then it would be necessary to consider how far ordinary principles of liability (and limitation) would then apply to such units.⁴⁶

C. Bunker Pollution from Ships

i. Liability Position

The 1992 CLC/Fund system applies its strict liability regime to pollution from the bunkers of oil tankers when they are carrying oil and in some circumstances when they are carrying bunkers on a ballast voyage.⁴⁷ There was no special liability regime for the bunkers of all the other ships operating in the world, eg container ships, passenger ships and bulk carriers – all of whose fuel could cause considerable pollution damage. The bulk carrier Pacific Adventurer spilled a relatively tiny amount of oil (270 tonnes) off the Queensland coast in Australia in 2009, but this alone gave rise to claims for over Au$30 million. Partly because of such uncertainty, some States, including Australia, enacted interim legislation⁴⁸ – with varying degrees of effectiveness.

However, by March 2001, the IMO agreed the International Convention on Civil Liability for Bunker Oil Pollution Damage (the Bunker Pollution Convention) 2001 which entered into force on 21 November 2008. The Convention creates strict liability, on the CLC model, of the ‘shipowner’. But ‘shipowner’ is here defined to include charterers and operators. This is because there is no second tier ‘fund’ (as with the IOPC Fund 1992). The registered shipowner (only) must have compulsory insurance for ships over 1000 gt. There is direct action against the insurer, and mutual recognition of judgments. The Bunker Pollution Convention affects huge numbers of ships and requires most which trade worldwide to have certificates; these certification requirements have been quite burdensome for States Parties.

ii. The Limitation Conundrum: Bunker Pollution

The main defect of the Bunker Pollution Convention is that it has no standalone limitation of liability provisions. This means that the ordinary regime of shipowners’ limitation of liability may apply. In the UK the applicable convention is the Convention on Limitation of Liability for Maritime Claims (LLMC) 1976, as amended by a Protocol of 1996.⁴⁹ This legislation is now directly relevant to bunker claims. It is not possible here to examine all the difficulties presented by this unhappy linkage of two conventions that are not precisely compatible.⁵⁰ Although there may be some State pollution prevention claims which may be without limit of liability, eg for bunker claims that involve ‘cargo removal’ costs, it seems that all economic loss claims will be limitable. The point here is that such claims will not have access to the whole of the normal limitation fund. In the event of a major casualty with many claimants, eg including cargo loss and collision damage, the fund would have to be shared rateably between the claimants. Table 2, below, shows some examples of the total sums available for ships of different sizes. For most small spills the sums may be enough; for larger spills they are already inadequate.

Table 2: LLMC 1996 Property Limits

A key feature of the LLMC limitation provisions is that it makes the appropriate limitation amounts application for ‘each distinct occasion’ on which liabilities may arise.53 Prior to the tonnage limitation system in the LLMC and its predecessor 1957 Convention,⁵⁴ the limiting event was the voyage. This meant that if there were two collisions in a voyage (eg on leaving Southampton and on arrival in Brisbane), there was only one limit. In effect, the LLMC was negotiated on the basis that in these circumstances there could be two limits; each would be a ‘distinct occasion’. That is clear enough, but is it possible to sub-divide a single casualty, so as to find separate acts of causative negligence giving rise to more than one ‘occasion’?⁵⁵ The effect might be to create several limits of liability out of what might appear to a commercial person as a single incident.

In a case of some international importance, Strong Wise Limited v Esso Australia Resources Pty Ltd,56 Rares J decided that in certain circumstances it is indeed possible to take such an approach. The decision is meticulously reasoned⁵⁷ but, unless it is treated as a rather special case on its own facts, it could at a stroke prove a way for claimants in effect to multiply the limits available to them. From a claimants’ perspective, one might say ‘so what?’ This would no doubt cause concern amongst the boards of the International Group of P&I Clubs; but apart from their discomfort, it could be said that an unduly wide application of the decision might rather undermine the highly sensitive and delicate international negotiations which take place periodically at the IMO to increase limits. There are many arguments against limitation of liability, but the ability of the Clubs to provide widespread cover is of great advantage to the international community. Their reliance on limitation may be overdone, but widespread attempts to circumvent it may ultimately have unintended consequences on the availability of insurance cover.⁵⁸

iii. Pacific Adventurer and Moves to Increase LLMC Limits

On 9 March 2009, the Hong Kong registered container ship Pacific Adventurer (18,391 gt) was near Brisbane when she lost 31 containers overboard in very heavy seas.59 The containers holed two of the ship’s bunker tanks, and about 270 tonnes of fuel oil leaked into the sea, polluting 38 miles of Queensland’s coastline. Clean-up operations from this fairly simple bunker incident took until 19 June.

The Pacific Adventurer incident occurred before the entry into force for Australia of the Bunker Pollution Convention. Claims for compensation therefore fell under the pre-existing law, requiring a complex enquiry into how far national federal or state law applied. It is these sorts of complications that international conventions can help to solve. The federal clean-up costs were recoverable under statutory provisions which were a limited precursor to the Bunker Pollution Convention,⁶⁰ while Queensland legislation⁶¹ gave its Government the right to claim discharge expenses from the owner or master. Individual claimants could claim under the same legislation⁶² for loss of or damage to their property, and costs or expenses in preventing or mitigating such loss or damage (including to the property of others). While this provision covered the clean-up expenses of voluntary organisations, it did not appear to extend to the economic loss claims of those from the fishing and tourism industries where their own property was not damaged. If that is right then, for example, claims for reduced income as a result of bans on fishing might need to be brought under the common law. It is now clear that the Bunker Pollution Convention would give extensive rights to such economic loss claimants.

In any event, in September 2009 the shipowners, Swire, established in the Federal Court an LLMC 1996 limitation fund of about Au$17.5 million (including interest).⁶³ The various claims were said to amount to some Au$30 million, but in August 2009 a settlement was announced between the Queensland Government and Swire whereby the latter would bring the amounts available up to Au$25 million. It might be observed that Swire is a large reputable organisation. It could presumably have chosen to stand on its limitation rights. Nevertheless, it is significant that in the settlement the Queensland and Australian Governments agreed to defer their claims (eg for clean-up) in favour of non-government claims. This is similar to the approach in the Braer and the Erika, taken by the British and French governments, when limits of liability were likely to affect individual claimants (ie potential voters!). It is paradoxical that such action (taken no doubt mainly for domestic political reasons) has produced a very different priority to that created by those who originally devised the marine pollution compensation regimes. For, ‘environmental’ claims, represented by State clean-up costs, are now being postponed to private commercial interests.⁶⁴

In the wake of the Pacific Adventurer, where claims exceeded the LLMC 1996 limits, Australia pressed at the IMO for an increase in the those limits using the LLMC’s (relatively) rapid amendment procedure.⁶⁵ Although at the IMO Legal Committee in April 2011, there was ‘wide agreement on the need to review the limits’,⁶⁶ there was obviously going to be less agreement on the extent of those limits. The Australian proposal,⁶⁷ backed by a detailed report by KPMG, would have used the maximum increase allowed under the LLMC 1996, ie 6 per cent pa compounded.⁶⁸ The main opposition to using the maximum increase came from Japan,⁶⁹ which proposed a more ‘modest’ increase on the basis that there had been inflation at 45 per cent between 1996–2010. The methodology adopted by Japan in calculating inflation (and its transparency) was the basis of strong criticism from Australia.⁷⁰ Nevertheless, the IMO Legal Committee on 19 April 2012, decided to adopt the Japanese proposal adjusted to 2012, which gave an increase of 51 per cent.⁷¹ These increases in limits will only come into force in April 2015.

The irony for Australia is that even with the limits increased by 51 per cent, the limit of liability for the Pacific Adventurer is now lower than it was in 2009.⁷² The reason is that in the period between 2009–12, the Australian dollar has increased in value dramatically. Such radical currency movements cannot fully be taken into account by an international system, but given that these limits may take another 20 years before they can be revised, it remains to be seen whether States will regard them as sufficient, particularly when it is borne in mind that the limits must also be shared with other claimants.

Like the UK, Australia has been a strong supporter of limitation of liability (eg in strict liability systems), and of international uniformity. For States such as Australia, unhappy with the LLMC 2012 limits, there is a policy option of denouncing the LLMC, but re-enacting many of its principles in national law outside of the convention. This would not necessarily be very radical. The LLMC 1976 and LLMC 1996 have not achieved the same sort of international acceptance as have the CLC and Fund Convention.⁷³ China, for example, has adopted limitation of liability principles in its national Maritime Code which are similar to the LLMC, although it is not a party. A denouncing State would be able to make modest changes to the LLMC scheme, while broadly keeping in conformity with it. One example would be to create a provision setting wholly stand-alone limits of liability for bunker pollution, while increasing the limits to the extent originally proposed by Australia. Indeed, it is arguable that this is what should have happened internationally. It is not simply that the LLMC 2012 limits of liability for bunker pollution might be too low to deal with incidents off sensitive costs, but that these limits may have to be shared with other claimants.

States considering denouncing the LLMC because of the risk of unmet bunker pollution claims should not naively think that if they enacted unlimited liability this would solve all of their problems. Under the Bunker Pollution Convention the insurers would not have a direct liability greater than the limit under the LLMC as amended.⁷⁴ A shipowner might have assets, but even if the ship does not sink the single shipowning company structure would effectively restrict what might be available.⁷⁵ Given that there is no international uniformity and a wide variety of limitation regimes already available, it seems unlikely that the Clubs or other insurers would restrict cover to a State which denounced the LLMC, but introduced its own principled limits. If there was a widespread series of denunciations, and in effect a move towards unlimited liability, the reaction of the Clubs might be to start imposing policy limits, eg based on the LLMC limits. International uniformity is a worthwhile goal, but the failure properly to create separate bunker pollution limits may well undermine that goal. It may become politically difficult to justify a regime which provides limits for such claims if there is a disaster which also involved a collision with an innocent passenger ship. Governments may have difficulty in explaining that not only are there limits for pollution claims, but also for personal injury and death claims. Limitation of liability for passenger claims, and the Athens Convention 2002, is another story.

D. Hazardous and Noxious Substances

i. HNS Convention 1996

For over 30 years, there has been a major gap in the law concerning liability for damage (including pollution damage) caused by the carriage of hazardous and noxious substances (HNS), eg bulk or packaged chemicals, LPG or LNG. The world has been very fortunate in recent times in avoiding a major chemical disaster at sea or in port. Imagine if the containers on the Pacific Adventurer had contained a highly toxic pesticide in concentrated form; or if there was a major leakage of toxic fumes from a ship in Sydney Harbour; or if there was an explosion at a port of an LNG or LPG carrier. In addition to pollution there could also be loss of life and potentially enormous economic losses if large scale evacuations had to take place in major cities.

In many countries, in the event of an HNS type disaster, liability would have to be determined by the ordinary law of tort or delict (eg negligence and nuisance in the common law world). Some states, such as Australia, have national legislation which may provide some protection for government clean-up costs and private claims.⁷⁶ However, those claims would be subject to the general limits of liability under the LLMC, which, as already noted, may be relatively low and subject to sharing with other claimants. As with the case of oil, before the CLC, there was no internationally recognised scheme of compulsory insurance and direct action against insurers to prevent defendants hiding behind single ship companies where HNS liabilities may be involved.

To meet this gap in the law the IMO produced the Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (the HNS Convention) 1996, but it is not yet in force. It was modelled on the CLC 1992 and Fund Convention 1992. In a single convention⁷⁷ it aimed to create a similar strict liability regime⁷⁸ for hazardous and noxious substances other than oil or bunkers, with compulsory insurance for the shipowner, and a second tier fund contributed to by HNS importers.

The HNS Convention 1996 would apply to bulk and packaged dangerous cargoes, but only those listed by reference to generic IMO categories. These include most harmful chemicals, but not all potentially noxious ones. In an incident such as that involving the containers of ammonium nitrate on the Pacific Adventurer it seems as if the cargo would have been covered,⁷⁹ probably as packaged cargo.⁸⁰ On 3 April 2010, the bulk carrier Shen Neng 1, carrying a cargo of 68,052t of coal, grounded on the Great Barrier Reef. She was eventually refloated, but if she had been totally lost the HNS Convention (if in force) would not have applied to any coal lost, as coal was excluded from the list of hazardous or noxious substances (along with iron ore, grain, bauxite, alumina and phosphate rock). As I understand the position, neither the Bunker Pollution Convention nor the HNS Convention would have provided compensation for reinstatement of the Great Barrier Reef caused by physical contact only, or for environmental impact assessments of damage caused by anti-fouling paint. Any liability for such losses would have to be sought in national law, but again subject to LLMC limits.⁸¹

It proved difficult after 1996 for States to be satisfied that the second tier HNS Fund (equivalent to that in the Fund Convention 1992) would actually be workable. This was partly because the chemical industry is much more diverse than the oil industry, thus creating potential difficulties in the compilation of records and the subsequent collection of financial contributions. In effect, there were fears that the second tier would not be financially viable. These practical concerns continued to delay entry into force of the HNS Convention 1996.

ii. HNS Convention 2010

In April 2010, the IMO agreed a Protocol to the HNS Convention 1996, aimed mainly at dealing with the practical problems about implementing the second tier fund. The ‘HNS Convention 2010’ will enter into force when two ratification criteria have been met: (a) at least 12 States, including four States each with not less than 2 million have ratified; and (b) the IMO has received information that those persons in such States who would be liable to contribute to the HNS Fund have received during the preceding calendar year a total quantity of at least 40 million tonnes of cargo (to contribute to the general HNS Fund).

Although the HNS Convention 2010 will supersede the HNS Convention 1996,⁸² the essential structure of the latter has been retained, but the liability scheme has changed slightly in the first tier (ie equivalent to the CLC). In essence, if there is damage caused by bulk HNS (eg chemicals from a parcel tanker), compensation would be sought first from the registered shipowner from a minimum of 10 million sdr (about £9.88 million) for a ship of 2000 tons, up to a limit of 100 million sdr (about £98 million). Where damage is caused by packaged HNS (eg in containers), or by both bulk HNS and packaged HNS, the liability of the shipowner is a minimum of 11.5 million sdr (about £11.3 million) for a ship of 2000 tons, up to a maximum 115 million sdr (about £113 million). Once this first tier limit is reached, compensation would be paid from the second tier, the HNS Fund, up to a maximum of 250 million sdr (about £246 million). This is the total amount available, aggregated with the first tier. The HNS Fund limit has not increased since 1996,⁸³ although as already discussed, the LLMC 1996 limits (agreed at the same diplomatic conference), have since been increased by 51 per cent.

As long ago as 2002, the EU had adopted a decision⁸⁴ requiring all EU Member States to take the necessary steps to ratify the HNS Convention within a reasonable time; this progress was interrupted by the debates about the second tier’s viability. Denmark became the first State to sign the HNS Protocol 2010 on 14 April 2011, and seven others also signed, subject to ratification or acceptance.⁸⁵ Despite the usual concerns about limitation of liability, it is my opinion that the amended HNS Convention should still be ratified by States such as the UK and Australia, thus adding to the suite of IMO liability conventions. Although States may face complaints from major importers about increased burdens, a Minister will be reluctant to stand in front of the cameras after a major chemical explosion in a port and say that his government has not quite got around to enacting an available convention. Maritime law only becomes sexy after the catastrophe. It might even be possible to consider interim national legislation designed to give effect to at least part of the HNS Convention scheme.⁸⁶

III. COMPENSATION FOR POLLUTION FROM OFFSHORE PLATFORMS

In the light of the experience with ships, it is appropriate to consider some possible solutions for liability in a Deepwater Horizon, or Montara, situation.

The Deepwater Horizon disaster involved the escape of hydrocarbons from the Macondo well in the Gulf of Mexico on 20 April 2010. There were explosions and fires on the Deepwater Horizon rig, resulting in loss of life and injury. In addition, there was widespread pollution involving the release of an estimated 4.9 billion barrels of oil over 87 days and compensation claims running into $billions, particularly concerning tourism and fishing.

The Montara incident on 21 August 2009, involved an uncontrolled blowout of oil and gas from the Montara Wellhead Platform, 250 km off the Australian coast. Oil and gas flowed into the Timor Sea for 10 weeks, possibly affecting 90,000 sq k. The amount leaked was up to 105,000 barrels (about 13,125 tonnes). There were unknown losses of gas and condensate. Gas leaks may involve more safety, than pollution, risks.⁸⁷

A. New Multilateral Convention on Offshore Liabilities?

i. 1977–2001 proposals

In 1977, the Comité Maritime International (CMI) adopted a Draft Convention on Offshore Mobile Craft (the Rio draft).⁸⁸ It was mainly designed to clarify how far existing maritime rules applied to structures that might not be considered as ships, rather than to deal with pollution disasters.⁸⁹ The draft was submitted to the Legal Committee of IMCO (as IMO then was), but was never adopted.⁹⁰

Contemporaneously with the CMI’s Rio draft, a more significant stand-alone convention was adopted in Europe, the Convention on Civil Liability for Oil Pollution Damage Resulting from Exploration and Exploitation of Seabed Mineral Resources 1977 (CLEE 1977). This was largely modelled on the CLC 1969 and provided for liability of the ‘operator’ of an offshore ‘installation’, subject to limits for each installation and each incident of 30 million sdr (£29 million), rising to 40 million sdr (£39 million)⁹¹ five years after the making of the Convention. To cover liability under the Convention, the operator was required to have ‘insurance or other financial security to such amount, of such type and on such terms’ as the ‘Controlling State’⁹² shall specify, provided that this would not be less than 22 million sdr (£22 million) rising to ‘not less than 35 million sdr’ (£34 million) after five years. With a prescience for current concerns, the Controlling State was allowed to exempt the operator wholly or in part from this requirement where pollution damage was wholly caused by an act of sabotage or terrorism.

CLEE 1977 was specifically restricted to States bordering the North Sea, the Baltic or the North Atlantic. It never entered into force, perhaps in part because of the creation from 1974 of the voluntary OPOL agreement⁹³ – which itself was presumably designed to pre-empt the convention. There is also a suggestion that some thought that the CLEE limits were too high by reference to the LLMC 1976 limits then applicable to ships. On my calculations, the 40 million sdr limit would have been equivalent to that for a ship of some 400,000gt – larger than virtually all but a handful of ULCC tankers currently in operation. Even so, the comparison does not seem wholly inappropriate. Moreover, CLEE gave the Controlling State the right to opt for unlimited liability, provided that this was not discriminatory.