Risk, Response and Reputation – new views on old challenges
Chris Morris – General Secretary, IPIECA[Slide 1] Good Morning Ladies and Gentlemen, and I have to start by thanking thePetroleum Association of Japan not only for their kind invitation to speak in front of
you today, but also for making such efficient arrangements to get me from the airport
to the podium in record time this morning; it is sobering to think that just a few hours
ago I was flying above the city.
[Slide 2] This speed at which our lives operate today is relevant to my remarks thismorning because while better communication and more efficient transport of bothhuman and material resources to where they are needed has become the norm, so
too has the spread of information and disinformation: it is often said that ‘a lie cantravel halfway round the world in the time it takes for the truth to get its trousers on’.
This in itself means that we have to take extra care to protect our reputation as anindustry and I will be giving my thoughts on that in a moment.
I want to start by introducing those of you who are not familiar with IPIECA to what
we do [Slide 3]. Our membership accounts for approximately 60% of all oil produced
and comprise of National and Multinational oil and gas companies and tradeassociations. The London secretariat is small - we are 8 in number - and focus in on
a number of global environmental and social issues, as you can see listed. To work
the issues we have working groups, made up from the membership - and I am
reassured that looking around the hall I see a fair number of those who sit on the
IPIECA oil spill working group[Slide 4] As you can see we have a good representation from industry around theworld as well as a wide range of associations. These range from PAJ here in Japan,
API in the United States, AIP in Australia, and SAPIA in South Africa. The roundelshows the various logos of organisations that also contribute to our OSWG. In
particular, it shows just how international we are and the fact that we have a wide
range of expertise bringing knowledge and experience to the group.
So where does the group concentrate its efforts? [Slide 5]. Well, the message has
been pretty consistent for a number of years and is essentially threefold:°°°We aim to promote sustainable contingency planning in coastal regions aroundthe world, whilst promoting the concept of Net Environmental Benefit Analysis, or
NEBA;
We encourage the use of the Tiered Response concept and I will discuss this ingreater detail later, andWe work with the IMO, ITOPF, the IOPC funds, and our contacts in-country tohelp national authorities understand the benefits of ratification of the international
conventions, principally the Oil Pollution Preparedness, Response, andCooperation Convention, the 1992 Civil Liability Convention, and the 1992 Fund
Convention.

We communicate this message through the Global Initiative – which is IPIECA’s joint
outreach program with the IMO, which brings together the main international groups
to promote effective planning & cooperation. All this is backed up by our ‘Report
Series’, along with networking at conferences and workshops world-wide[Slide 6] Our collaboration with the IMO and such organisations as ITOPF, started in
the mid 90’s with a series of staged seminars around the world. These enabled1

industry and government to come together and live a large spill scenario and witness
an effective ‘road- show’ as to how effective contingency planning might develop.
The culmination of this initiative was the ‘Working Together’ video or CD that has
been widely used to spread the message.
Turning to today’s presentation, let me congratulate the organisers on lining up aninteresting series of speakers for this year’s symposium. I note that we have several
speakers scheduled to speak about dispersants, and those of you who were at lastyear’s symposium will remember that Bill Lerch from ExxonMobil made several key
points on dispersant use. From IPIECA’s perspective, the use of Net Environmental
Benefit Analysis or ‘NEBA’ means that we must always consider the use of allavailable options in response to an oil spill, which should include the use ofdispersants where appropriate. [Slide 7]. Certainly, we should exercise caution
when it comes to the approval of dispersants for use in near-shore areas, but the test
methods used to gain approval must reflect the use of the dispersant in ‘real-life’
conditions.
I have some personal experience of the efficacy of dispersants from my time as crisis
preparedness manager at Texaco, when confronted with the ‘Sea Empress’ incident[Slide 8] where some seventy two and a half thousand tonnes of crude were released
into the waters off Milford Haven in Wales. While some oil did wash up on the
coastline, the use of dispersants prevented a disaster becoming an utter catastrophe.
Of particular interest and relevance to the Japanese situation, dispersants shortened
the time that was required for the mariculture industry to begin functioning again, andhad a significant effect in reducing damage claims. When one looks at the time
between the initial spill in February, and the reopening of the beaches at Easter time,
you begin to see the power of this approach.
Most of what I have to say today refers to actions and events that take place after theoil is in the water, but it is gratifying to note that the one area which is now gainingsome attention, is that of prevention.
While we must never relax our vigilance on the response side, IPIECA’s view is that
we should continue to focus our attention on proactive measures – including
prevention. The theme of this symposium is "New Dimensions in Oil Spill Response
after the Prestige", and that is very appropriate for IPIECA, because following
discussions at a recent IPIECA board meeting, IPIECA has initiated actions tostrengthen cross-communication between the various industry secretariats, such as
OCIMF, ITOPF, and OGP, with a view to ensuring that we as an industry are doing
everything we can to prevent a repeat of the Prestige incident, and that to thegreatest extent possible, the reputation of the industry is protected. At a recent
workshop at the IMO in London, the Director of the IMO Technical Cooperation
Division, Mr. David T. Edwards, invited industry to come forward with suitablepartnership proposals to be funded jointly with IMO, and we are actively working with
IMO and other stakeholders (such as the secretariats mentioned just now, as well as
INTERTANKO, the ICS, and the P&I Clubs) to produce a document clarifying our
responsibilities to the public and regulators alike.
Before moving on, let me put in an advertisement for the IPIECA ‘report series’ which
includes volumes specifically relating to both dispersants and to NEBA. These
reports [Slide 9] have all been translated in French, Spanish, and Russian, andseveral of them have been translated by PAJ into Japanese. IPIECA encourages
this process and we are of course ready to support you any way we can: we havefound that the easily readable report series, when translated into local languages canbe highly effective in persuading local regulators to take action on a particular topic.

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For 2004, we have several new IPIECA oil spill reports coming out, and I will bementioning these during the course of my presentation.
[Slide 10] I want to take this opportunity to remind ourselves about what is really
important in oil spill response and how, ultimately, Risk, Response Strategies, andReputation are intimately linked.
It is widely accepted that those countries and companies that have a properly
developed contingency plan are better prepared to deal with an oil spill emergency
than those that do not. The potential benefits of contingency planning include:[Slide 11]-

More effective and efficient response to an incident by using and developing
appropriate response strategies with the aim of reducing ecological, economic
and amenity damage and subsequent compensation claims
Clear reaffirmation of business/governmental environmental priorities
Improving the public and media understanding of industry’s efforts to be apositive force in the protection of the environment.

Amongst other things, this means getting the right resources to the right place in the
shortest possible time, but having said that, the majority of us in this room accept, I
believe, that mounting an effective response to an oil spill is not just about equipment.
We can all recount situations where there were warehouses stuffed full of equipment
but insufficient resources or planning to deploy them in a logical and effective manner.
Equally, many of us know that we can still get everything right, but despite our best
efforts the oil can still come ashore. When that happens, the efforts that we have put
into the response count for very little in the eyes of the public and the regulators.
Because of this we need to ensure that we put in place communications designed not
only to keep all stakeholders informed, but also protect our reputation at every stageof the spill. In fact, I would go so far as to argue that until we as oil spill response
practitioners can accept that risk to reputation should be considered alongside risk to
the environment and business and commercial risk, our response strategies areincomplete.
As we prepare our contingency plans therefore – and I am pleased to see that the
IPIECA volume on Contingency Planning has also been translated into Japanese[Slide 12] – we need to ensure, as companies, that [Slide 13]:-

We adopt a risk-based approach to identifying the maximum credible and most
likely case scenarios-

The contingency plans we adopt, whether corporate, national, or regional are
based on the tiered response concept-

We have measures in place to communicate to stakeholders and affected
communities and to protect our reputation-

That the plans are integrated with those who share the risk and who will
participate in the response such as national authorities and other industry
partners3National authorities in particular have a critical role to play in reducing risk, by
ensuring both that local legislative arrangements facilitate the application of bestpractice in oil spill response, but also that after the spill, the parties disadvantaged by
the spill have the ability to claim compensation under the comprehensive
arrangements that have been put in place for that purpose.
It is with concern therefore that we look at some countries with a history of shipping
casualties and find that they have not yet been able to ratify the most fundamental of
the Oil Pollution Preparedness, Response and Cooperation Convention, the OPRC.
[Slide 14]
In the wake of global concerns over Oil Pollution in the late 1980s, the IMO’s Marine
Environment Protection committee developed this Convention to provide aframework for international cooperation for combating major oil pollution incidents,
taking into account the experience gained within existing regional arrangements
dealing with these matters.
Likewise, there is financial relief available to those who have suffered as a result ofan Oil Spill if their country has ratified either or both of the 1992 Civil Liability or Fund
Conventions, yet many countries still have not ratified these conventions. In the past
one could have understood to some extent the reluctance of some small states to
ratify the Fund Convention, the costs of which are borne by oil receivers, however it
is unclear why the 1992 CLC – to which there is no cost attached in ratification – has
not been ratified when the benefits are potentially so great. Unfortunately, failure to
ratify at least the 1992 CLC can cause problems for all parties in the event of a major
spill since there will be great uncertainty over the availability of funds to pay for
prompt clean-up and to compensate victims such as fishermen.
The situation under recent revisions to the funds makes their ratification potentiallyeven more attractive, and I look forward to a presentation from the fund during this
symposium, which will clarify the details of the new arrangements.
In this regard, I am pleased to say that ITOPF and IPIECA have updated theirCompensation guide, [Slide 15] and there are a few advance copies here should you
be interested.
While many states have ratified these conventions, we need to redouble our efforts towork with governments in our sphere of influence to convince them of the benefits ofratification, and the fact that these systems are ultimately for their own financial
benefit and protection. Of course, states such as Japan and the United Kingdom
have fully ratified these conventions, however we should not underestimate ourability to encourage this process, particularly when these countries are on thereceiving end of bilateral aid - in the form of oil spill response equipment and training– from our respective governments.
We have a responsibility, wherever we go, to go that extra mile (or Kilometre if you
wish!) to impress upon authorities the need to ratify these conventions. The
usefulness of these oil spill assistance and compensation agreements is not limited
to those brokered by the IMO: there are local and regional equivalents such as Bonn
Agreement that work exceptionally well and I can speak from first hand experiencefrom the Sea Empress spill when the international support that we asked for was
given promptly and to great effect.
I explained at the beginning that one of IPIECA’s central beliefs stems from a Risk Based approach to the management of oil spills, and that has led us over the years
to firmly support the tiered response concept. [Slide 16]. The tiered response4

concept avoids unnecessary and inappropriate proliferation of oil spill response
resources. Above all, the flexibility of the tiered response approach should meet any
given spill risk in a suitable and cost effective manner. A new dimension is however
appearing inasmuch as when we look at the types of spill we encounter today
compared to 20 years ago we notice that there appears to have been a dramaticincrease in the proportion of significant chemical spills. [Slide 17]
Traditional oil spill response regimes do not cover chemical spills in marine
environments; marine chemical emergencies differ from oil spills because there is amuch larger variety of chemicals being transported and the consequences are moreunpredictable, because most airborne remote sensing systems, as they exist, are notsufficiently reliable to detect chemicals floating on the sea, and while models on drift
and dispersion of chemicals at sea are available, the consensus is that they are notyet reliable enough to be used in support of the decision-maker in actual incidents.
A marine chemical spill poses potentially severe dangers both for the naturalenvironment as well as responders; the consequences may be far more severe thanan oil spill. This has been acknowledged by the IMO in the development of the HNS
convention and of the HNS protocol to the OPRC convention, however uptake ofboth of these has been poor, and at this time neither has come into force. However,
hopefully this will change: many of you will know that at the end of last year the UK
published its formal public consultation paper on the national implementation of the
HNS Convention, and subject to a successful outcome of this consultation and theapproval of our Parliament, the intention is to ratify the HNS convention during 2004.
The consultation document initiates the first part a two-stage consultation process.
The document just issued sets out the proposal that the UK should now ratify, andthe principles to be applied in the national regulations to implement the Convention
into UK law. These follow the ‘model’ agreed at Ottawa and endorsed at the IMO
Legal committee. The second stage will be undertaken early this year and will focus
on the proposed national regulations and the proposed UK reporting system to meet
specific treaty obligations. This is a positive step, however in most countries, evenrelatively well-developed ones, there has been little progress in establishing a marine
chemical response capability. The situation is not helped by poor coordination of theknowledge base and a lack of an acknowledged authoritative publication thattranslates the scientific theory into practical advice that can be used by a responder.
IPIECA has therefore been working with the IMO and other stakeholders such as
CEFIC and ITOPF in a partnership approach to formulating guidelines on marine
chemical spills under the IMO Technical Cooperation Division partnership initiative.
This is a long-term project but we hope to have some interim results by 2005.
I have mentioned Risk, Response, and Ratification as several of the ‘R’s that we feelare important to Oil Spill Response efforts – but I would like to give you some more
‘R’s’ to consider:[Slide 18]
Restraint ! This symposium will take on board the lessons of the Prestige, and it is
the Prestige – and of course the Erika before it – that has driven much of the recent
thinking and legislation in Europe. However I would like to point to anotherphenomenon that was also in evidence in the Prestige incident, and that is theoccasional political intervention that hinders an effective response. I am not heretalking about the cross boundary issues that arise which limit the availability ofequipment and personnel – we have all seen a number of these high profile cases

5over the last ten years. What I am referring to is the fact that in many ways, we havebecome the victims of our own success.
We have over the years – helped by an ever more vocal community and NGO lobby– elevated oil spill issues and the importance of integrated national disastermanagement and planning to a point where it has attracted political attention. When
this happens, decisions start to be made on the basis of short-term political
expediency instead of on training, experience and professionalism. If there is alesson to be taken from this, it is that we need to include these ‘higher-level’
stakeholders in our network of contacts; we need to educate up the command chain
as well as down!
[Slide 19]
Responsibility! We have a responsibility to not only to ensure that our contingency
planning and Oil Spill Response network is in place but that it integrates, interfaces
and is supported by others. Our plans should extend not only to dealing with the oilon the water and washed up on the shoreline, but also to those other aspects of oil
spill response that perhaps aren’t always considered ‘our business’. One such
example of this is the need to put in place contingency plans for oiled wildlife
response.
Now I am not suggesting that we set ourselves up as oiled wildlife experts, but I put it
to you that it is certainly our job to assist those who are. Again, it is part and parcel
of integrating every aspect of our response with the stakeholders around us who canmake a difference. When we looked at the systems and standards in place for oiled
wildlife we found that there was a divergence of attitudes and opinions within the
fragmented wildlife responder community.
Again, as in the case of response to chemical spills, there is a poor coordination of
the available knowledge and a lack of an authoritative statement on good practicethat is widely available to responders. Again, IPIECA has bought its unique ability tomarshal divergent forces to bear and is sponsoring, along with other oil industry
members, a project to assemble experts in oiled wildlife contingency planning, which
will include, amongst others, representatives from the Sea Alarm Foundation, theInternational Fund for Animal Welfare and the International Bird Rescue Center.
The resulting output from this meeting will include yet another publication in the
IPIECA report series.
[Slide 20]
Another ‘R’ is Reasonableness!
We all have guidelines as to what a 'reasonable' response entails and for IPIECA, we
support that it is reasonable to apply the principle of NEBA. But who judges what isreasonable? Whether it is the regulators or the public they are more likely to accept
your assertion of what is reasonable, if they trust you, and trust the assertions you
are making. Which brings me to my final ‘R’ of the day because in my view, part ofestablishing that trust is building a good Reputation!
[Slide 21]
Reputation! There is an increasing trend to assume that Reputation is somethingthat can be ‘shaped’ or ‘managed’. While it is true that our Public Relations people
can highlight the many good things we do, as opposed to the very few unfortunate
bad things that can occasionally happen, I can assure you – true reputation issomething that can only be earned, and it is one of those qualities that takes years toearn and only moments to destroy.

6As a sector, we are not remembered for this……..
[Slide 22 build]
more often it is this…….
In my comments today, I have ranged from Risk to Reputation, and if there was one
slide that I wanted you to take away from the last half an hour, it is this, that while all
our strategies should in the first instance be based on Risk – where, if you like we
can get the biggest ‘bang for the buck’ or in oil spill response terms, engender thegreatest protection for the resources we apply, in all of our dealings we need to:[Slide 23]
°
°
°

°

Encourage Ratification of the appropriate conventions
Ensure our Response strategies are integrated, socially Responsible,
cost effective, use sound science and are defendable and Reasonable
Forge links that give governments confidence in our abilities as oil spill
response professionals, so that they can exercise Restraint in anational emergency, and ultimately:
Preserve or Enhance our Reputation.

Leaving you with that thought, I would once again like to thank the Petroleum
Association of Japan for inviting me here, and wish you fruitful deliberations over the
next two days.

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