The Incidence of Tanker Spills and Factors Affecting their Costby
Mr Richard H. Johnson*
ITOPF Limited

Introduction
The NAKHODKA and ERIKA oil spills in Japan and France respectively, and more
recently the PRESTIGE incident in Spain, have once again focused attention on thepotentially high cost of such events and the adequacy of the current international
compensation arrangements. As will be explained another speakers, this has led to a
proposal for a Supplementary Fund that would offer additional compensation to thatprovided under the enhanced limits of the 1992 Civil Liability Convention (CLC) andFund Convention that will come into effect in November 2003. Questions remain as
to the appropriate level of this Supplementary Fund and whether or not there is aneed for a more fundamental revision of the 1992 CLC, amongst other things toensure continued equitable sharing of the costs of compensation under theinternational regime between tanker owners (and their P&I Clubs) and oil receivers.
The aim of this paper is to provide some relevant facts on the incidence and causesof tanker spills, the cost of past events and the factors that can cause great variation
between the costs of individual incidents.

Incidence of Tanker Spills
As the two graphs below derived from the ITOPF database illustrate, much has beenachieved in the field of tanker spill prevention over the past two decades. It isbelieved that a whole range of factors, through the efforts of governments, intergovernmental organisations (eg IMO) and industry, have contributed to thedramatic improvement, that began long before double hulls became common.
35

Number of Spills >700 tonnes per Year
10 Year average

1970-79
24.2 spills per year
on average

30
25

1980-89
8.9 spills per year
on average

20
15

1990-99
7.3s per year
on average

10
5
0
1970

72

74

76

78

1980

82

84

86

88

1990

92

94

96

98

2000

Whilst the relatively small number of spills each year over 700 tonnes and theconsiderable annual variations preclude detailed statistical analysis, the overall trend* The views expressed in this discussion paper are those of the author and do notnecessarily represent those of ITOPF or of its Directors and Members.

2is clear. Thus, the average number of spills of this size each year in the 1980s and1990s was about one-third of that experienced in the 1970s. This is significant inrelation to compensation under the 1992 CLC and Fund Convention since, in generalterms, these larger spills (which historically make up about 3% of the total number oftanker spills) are the ones that give rise to the most expensive compensation
payments.
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1970-79
53.3 spills per year
on average

100
90

Number of Spills between 7 & 700 tonnes per Year
10 Year Average

80
70

1980-8935.5 spills per year
on average

60

1990-9927.7 spills per year
on average

50
40
30
20
10
0
1970

72

74

76

78

1980

82

84

86

88

1990

92

94

96

98

2000

The pattern of spill incidence over the past three decades is very similar for smaller
spills in the size range 7 – 700 tonnes (see above graph, for which data prior to 1974 islargely lacking), although not surprisingly the number of such events each year isgreater. The same applies to spills of less than 7 tonnes. Although the statistics relating
to this smallest size category are less reliable, the ITOPF database indicates that the
total number of spills less than 7 tonnes constitutes at least 85% of the total number oftanker spills of all sizes. It would be unusual for the costs of compensation resulting
from spills of less than 700 tonnes to exceed the applicable limit of the 1992 CLC,
although this is possible in the event of a ‘difficult’ oil spilt from a small tanker. It ishighly improbable, however, that compensation for established claims from thesesmaller spills would, in the foreseeable future, exceed the current 1992 Fund limit, letalone the 2003 increased limit.

Causes of Tanker Spills
Given the above, it is interesting to explore the causes of spills greater than 700
tonnes since these are the events that could conceivably result in claims against theSupplementary Fund.

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Collisions
28%

Loading / Discharging
6%

Groundings
34%

Other
12%

Hull failures
14%

Fires / Explosions
6%

Causes of spills > 700 tonnes, 1974-2001
It can be seen from the above pie chart that 62% of all the spills in this largest size
category have historically resulted from collisions and groundings. Another 20% of thespills greater than 700 tonnes have been caused by hull failures and fires/explosions.
It could possibly be argued that the increasing number of double-hulled tankers
might reduce the number of spills in this size category resulting from low energy
collisions and groundings. Similarly, other measures including enhanced ship
inspections and the ISM code, might have a beneficial effect. This could all help
reduce further the number of expensive claims against the 1992 Fund and,potentially, the Supplementary Fund. However, major spills are unpredictable eventsand any such predictions are likely to prove unreliable.

Collisions
23%

Other operations
4%
Bunkering
2%

Groundings
18%

Loading / Discharging
29%

Hull failures
7%
Other
15%

Fires / Explosions
2%

Causes of spills 7 - 700 tonnes, 1974-2001

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Loading / Discharging
35%

Other
29%

Fires / Explosions
2%

Hull failures
7%
Groundings
3%

Collisions
2%

Other Operations
15%

Bunkering
7%

Causes of spills < 7 tonnes, 1974-2001
By way of comparison, the above pie charts demonstrate that operational causes
become increasingly more significant as the size of spill decreases. Thus,
loading/discharging, bunkering or other operations constitute some 80% of all the
spills less than 7 tonnes where the cause is recorded. As previously noted, thesesmaller operational spills are unlikely to result in expensive compensation settlements.

STUDY OF THE COST OF OIL SPILLS, 1990 - 1999
For the purpose of a study conduct by the International Group of P&I Clubs and
ITOPF, data on the cost of clean-up and damage in 360 tanker spills occurringoutside the USA between 1990 and 1999 were obtained from individual P&I Clubs,
the IOPC Funds and Cristal Limited. All cost data was converted into US dollars
according to published exchange rates. In cases where not all claims had been
settled a "best estimate" was used. The resulting costs were incorporated into a
database which allowed various analyses to be carried out. The results of one suchanalysis, comparing the costs of individual incidents outside of the USA to the limits ofliability under the 1992 Civil Liability and Fund Conventions, and to the 50% increased
limits that will come into effect on 1 st November 2003, is shown below in graphic form.

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Cost of non-US tanker spills (1990-1999) in relation to
1992 and 2003 CLC and Fund limits
It is evident from the above graph that the estimated total cost of only two incidents
during the 10-year period covered by the study - the NAKHODKA and ERIKA exceeded the current limits of the 1992 Civil Liability and Fund Conventions, although
the NAKHODKA would have fallen below the 2003 increased limits. (The PRESTIGE
incident falls out of the study period though its costs are widely anticipated to begreater than the current 1992 Fund limit). The vast majority (95%) of the other 358
cases would have been fully compensated under the terms of the 1992 Civil Liability
Convention alone. This percentage increases to 96% if the 2003 increased limits areapplied. Raising the minimum amount of compensation for small tankers to, say, SDR
20 million (about US$26 million), as proposed voluntarily by the International Group of
P&I Clubs, would increase the percentage of CLC cases still further, to around 98%.
Interestingly, analysis of the total costs of all 360 incidents over the ten-year period
demonstrates that they would have been shared equally (51:49) between
shipowners under the 1992 CLC and by oil receivers under the 1992 Fund Convention.
If the ERIKA is removed from this analysis, the percentage becomes 59:41. The
additional removal of the NAKHODKA makes the percentage 71 CLC : 29 Fund,illustrating that one or two highly expensive incidents has a marked effect on thewhole pattern of cost distribution. This illustrates the impossibility of predicting future
cost sharing since it will depend upon whether or not another highly costly major spill
occurs and, if it does, whether or not it is in a State that is party to the 1992 Fund andSupplementary Fund.

6

Factors that Determine the Cost of Tanker Spills
Various technical factors, in combination, determine the cost of tanker spills, some of
the most important of which are summarized below.
Type of Oil
Of the various individual factors that determine the seriousness and therefore theultimate cost of an oil spill, one of the most important is the type of oil.
In general, light crude oils do not persist on the surface of the sea for any significant
time due to rapid evaporation of the volatile components and the ease with which
they disperse and dissipate naturally, especially in rough seas. This is well illustrated by
the BRAER incident in the Shetland Isles, UK in January 1993. A combination of lightcrude oil and severe weather conditions resulted in the entire cargo of 85,000 tonnes
being dispersed naturally with minimal shoreline contamination, even though thetanker was str anded on the coast. Clean-up costs in this case were therefore very
low, especially relative to the quantity of oil involved.
At the other end of the spectrum of oil types are heavy crudes and heavy fuel oils.
These oils are highly persistent when spilt and therefore have the potential to travel
great distances from the original spill location. As a consequence, the clean-up ofheavy oil spills can be extremely difficult, extend over large areas and be costly. Thisis illustrated by two of the most expensive tanker spills of all time - ERIKA andNAKHODKA in France and Japan, respectively. The PRESTIGE also spilled heavy fueloil and clean up costs are anticipated to be very high. All involved relatively small
amounts of oil (some 7,500 tonnes in the case of the NAKHODKA, and estimated
20,000 tonnes each for the ERIKA and PRESTIGE) spilled some distance from the coast,
maximising the opportunity for spreading and widespread coastal contamination.
The nature of the damage caused by a spill will also vary according to the type of oil.
Light crude oils may constitute a fire and explosion hazard if spilled in confined
situations, leading to a wide variety of third party claims due, for example, totemporary closure of port areas and nearby industry or temporar y evacuation of
local communities. Such oils also tend to be more toxic than heavier oils. This canlead to mortalities of marine plants and animals if high concentrations of oil enter thewater column through wave action and are not rapidly diluted by natural sea
movements. Similarly, such oils may bring about the tainting of edible fish, shellfish
and other marine products, as occurred in the BRAER where the main affected
product was high-value farmed salmon. All such effects will, however, usually behighly localised and short-lived as the toxic components are also the ones that
evaporate most rapidly. Fish and shellfish also rapidly lose the oil components thatcause taint once clean water conditions return.
Heavy crude, emulsified crude and heavy fuel oils, whilst generally of lower toxicity,
will constitute a threat to seabirds and other wildlife (for example on shorelines) that
become physically coated or smothered. Amenity areas, fishing gear, mariculture
facilities and other structures can also be contaminated, sometimes over very
extensive lengths of coastline due to the highly persistent nature of the oil. Further
problems can arise if the already high density of the heavy oil increases further (forexample due to the incorporation of sediment in coastal waters) to the extent that
residues sink. This can result in the prolonged contamination of the sea bed, forming

7
a reservoir for the fouling of bottom fishing gear and repeated re-oiling of cleaned
amenity areas as the sunken oil is remobilised after storms. All these problems canresult in large third party damage claims for economic loss, as illustrated by the spillsof heavy fuel oil cargo from the NAKHODKA and ERIKA.
Amount Spilled and Rate of Spillage
The amount of oil spilled is clearly an important factor in determining costs. Thus,
given no variation in other factors such as type of oil, location and economic
resources at risk, a 100,000 tonnes spill will result in far wider contamination, will
require a far more extensive clean-up response and cause greater damage than,say, a 10,000 tonnes spill. On the other hand, the three largest tanker spills of all time ATLANTIC EMPRESS off Tobago, West Indies in 1979 (287,000 tonnes), ABT SUMMER off
Angola in 1991 (260,000 tonnes) and CASTILLO DE BELLVER off South Africa in 1983
(252,000 tonnes) resulted in very low clean-up and damage costs because none of
the spilled oil contaminated coastlines.
The rate of spillage can be important. For example, the clean-up operation requiredin response to a single large release of oil may be considerable but may becompleted in a matter of weeks. The associated damage to marine resources andamenities may also be short-term. However, the same quantity of oil lost over several
months from a damaged vessel close to the coast may require the maintenance ofa major clean-up effort, repeated cleaning of amenity areas and long-term effects
on fishery resources and tourism.
Clean-up Response
As a general rule, considerable effort and money is devoted to trying to deal with oil
spills at sea, in a laudable attempt to prevent the damage and public outcry
associated with extensive pollution of inshore waters and shorelines. Unfortunately,
however, there are fundamental limitations on the effectiveness of the two maintechniques of containment and recovery, and chemically-enhanced dispersal. The
main limitation results from the fact that oil spilt on to the surface of the sea spreads
very rapidly and is soon spread over an area that is too great to be countered byavailable techniques. Added to this are the limitations on containment andcollection systems imposed by winds, waves and currents, and the problems posed
for the effective use of chemical dispersants by high viscosity oils and the rapid
formation of "mousse". I n a major spill these technical realities frequently mean that it
is impossible to prevent the contamination of coastal waters and resources. Thesefundamental limitations on at-sea response do not always deter those in charge from
deploying numerous oil recovery ships or dispersant spraying vessels and aircraft inorder to satisfy the criterion that they must be "seen to be doing something". In
extreme cases such a response may be continued for a long period, leading to
unnecessarily high clean-up costs for little or no benefit.
In contrast to offshore clean-up, which requires considerable amounts of expensive
equipment, vessels, aircraft and trained operators (often obtained from distantsources), shoreline clean-up usually relies on manual recovery methods and locallyavailable equipment. The main factor determining cost is therefore usually the extent
to which cleaning is required before the contaminated area will be considered
acceptable. The removal of bulk oil from a heavily contaminated shoreline isrelatively straightforward and can often be accomplished quickly, subject to thetype of shoreline (e.g. rock, sand, mud) and ease of access. The type and amount of
oil involved, the time of year, prevailing weather conditions (e.g. ice) and other8factors will also influence the ease with which bulk oil can be removed. However, as
the degree of contamination is progressively reduced more and more effort isrequired to effect a significant improvement. The operation therefore becomes oneof diminishing retur ns with costs escalating rapidly as the amount of remaining oil
decreases. The overall cost of shoreline clean-up therefore depends to a large
extent on when the operation is terminated.
There are well-established procedures that seek to balance environmental
sensitivities against socio-economic factors (e.g. fisheries, tourism) in order todetermine the most appropriate techniques and level of cleanliness on a site-by-sitebasis. However, those in charge of response operations frequently bow to pressure toadopt non-technical criteria to decide the nature and extent of a response. In such
instances the inappropriateness of cleaning certain types of shoreline will be ignored
and as many resources as possible deployed in an attempt to persuade politicians,
the media and public that everything possible is being done to deal with the
problem. The fact that the operations may be ineffective or more damaging to theenvironment than the oil is often not a persuasive argument. Equally, the requirementthat every trace of oil must be removed to assuage public anger is neither possible
nor environmentally sound.
Failure to adopt technical criteria for determining when the shoreline clean-up
operations should be terminated will invariably prolong the clean-up, increase theamount of material for disposal (a major problem now in most spills) and result in
exorbitant clean-up costs.
Effective spill combat demands a high level of pre-spill planning, as well as informed
and decisive leadership at the time of a spill so that a response consistent with thecontingency plan is initiated promptly. The individual or small command team incharge will need to be supported by experienced technical and scientific advisorsthat are part of a larger management team that looks after individual parts of theoperation, as well as logistic support, record keeping and financial control. These last
two aspects are vital in connection with cost recovery from other parties.
The provision of sufficient experienced and knowledgeable people to direct theclean-up response and to provide expert technical advice will be a specific problem
facing some government authorities and other groups. The infrequency of spills andthe regular reassignment of personnel in some organisations can mean that those
who are called upon to deal with a spill will have never seen one before and sohave to learn ‘on the job’. This is fine if they are willing to listen to advice from experts
so that due account is taken of the extensive experience and technical knowledge
that is available nationally or internationally. All too often this is not the case, withthose in charge preferring to learn their own lessons and thereby repeat the mistakesof past spills, leading to ineffective clean-up and unnecessary damage, both ofwhich can greatly increase the costs.
Location
The location of a spill will inevitably have a considerable bearing on the costs since itwill determine the requirement for and extent of the clean-up response, as well as
the degree of damage to the environment and economic resources. All oils, if theyremain at sea long enough, will dissipate through natural processes. When a tanker
spills oil far from the coast the response will therefore normally be confined to aerial
surveillance of the slick to monitor its movement and dissipation in order to checkthat the predictions are correct. The cost of responding to oil spills under these9circumstances can therefore be low, as was the case in the previously-mentioned
incidents of ATLANTIC EMPRESS, ABT SU MMER and CASTILLO DE BELLVER.
The physical characteristics of the spill site (e.g. prevailing winds, tidal range, currents,
water depth) as well as its distance from the coast are important since they have aconsiderable bearing on the feasibility of mounting both a clean-up response at sea
and a successful salvage operation. They will also help determine the extent ofcoastal contamination, which is one of the most important factors in determining
clean-up costs. The high cost of the shoreline clean-up in both the ERIKA andNAKHODKA incidents was due in large part to the extensive coastal impact (some400 km in the ERIKA and over 1,000 km in the NAKHODKA).
Socio-economic factors and resources at risk vary both within and between
countries. Some areas will be of high national or even international importance forfishing, mariculture, tourism and other industries, whereas others will only rank as
locally important. The sensitivity of these resources to oil pollution will also vary, often
depending upon the time of the year. Claims for compensation resulting fromphysical damage and economic loss can be very high and in many cases will
greatly exceed clean-up costs. Damage to the environment will also generateconcerns, possibly leading to post-spill studies and reinstatement measures.

CONCLUSIONS
1. Any predictions about the future incidence of major tanker spills and their causes
are likely to prove unreliable, although the phase out of older, single–hulled tankers,
as well as enhanced ship inspections and various other measures, are likely to prove
beneficial in maintaining the incidence of major tanker spills at a low level. This could
reduce the likelihood of expensive claims settlements that reach or exceed the 1992
Fund limit or the enhanced 2003 limit.
2. The sharing of the cost of compensation between tanker owners (and their P&I
Clubs) under the 1992 CLC and oil receivers under the 1992 Fund will depend to avery large extent upon whether or not one of more very expensive incidents occur inStates party to the 1992 Fund. The cost of such an incident(s) could balance the costof the numerous smaller incidents that are likely to continue to fall under the 1992
CLC alone, especially with the enhanced 2003 limits and proposed voluntary
increase in minimum limit for small tankers.
3. Various factors in combination will determine the actual costs of any particularincident, with type of oil, location of the spill and the characteristics of the affectedarea being the most important technical factors since they will influence the costs ofboth clean-up and damage. In the cases of the NAKHODKA, ERIKA and PRESTIGE,
fuel oil of a very persistent nature was spilled some distance from the shore leading
to extensive at sea operations, long lengths of coastal contamination and highassociated clean up costs.

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