PAJ OIL SPILL SYMPOSIUM 1995

“INTERNATIONAL COOPERATION AND CURRENT
SET-UP BY THE OIL INDUSTRY”
23-24 MARCH 1995
OIL SPILL RESPONSE ARRANGEMENTS IN MALAYSIA
byIr. Hussein Bin Rahmat
General Manager
Engineering & Safety Unit
National Petroleum Corporation(PETRONAS)
Kuala Lumpur Malaysia
ABSTRACT:The increasing incidence of oil spills in the Straits of Malacca and the South
China sea, has resulted in growing concern about Malaysia’s capability to respond to oil spills in
its water. This concern is compounded by the ever growing number of oil tankers plying theStraits of Malacca and the South China Seas, as well as the activities in exploration anddevelopment of offshore petroleum resources.
Various measures were taken by the Government to deal with the problem including areview of its National Oil Spill Contingency Plan (NOSCP), incorporating a coordinated and acost-effective response mechanism amongst the various government agencies.
The
incorporation of the Petroleum industry of Malaysia Mutual Aid Group (PIMMAG), which enables
pooling of spill response resources among the oil industry reflects the industry’s commitment tostrengthen the NOSCP.
Since mid-seventies, a number of regional efforts have been
constituted such as the Traffic Separation Scheme for Straits of Malacca, the Straits of Malacca
and Singapore Revolving Fund the Lombok-Macassar Oil Spill Contingency Plan, the Brunei Bay
Oil Spill Contingency Plan, the ASEAN Oil Spill Response Plan and the proposed ASCOPE Oil
Spill Contingency Plan.
The recent establishment of equipment stockpiles in Singapore by the East Asia
Response Ltd. (EARL), in respective ASEAN countries by the Japanese Government aids on Oil
Spill Response and Preparedness and in Singapore and Port Klang by the Petroleum Associationof Japan, further strengthen the national capability in combating oil spill.

INTRODUCTION
Malaysia, a maritime nation with a population of about 19 million. It has relatively longcoastline and maritime area of approximately 4500 km. and 592,630 sq. km. Geographically,
Malaysia is located between the Indian and the Pacific Oceans, at the centre of theASEAN(Association of South East Asian Nations)and shares her borders with all the group’s
member states (Figure1.). By virtue of its geographical location, the seas bordering Malaysia
namely the Straits of Malacca and the South China Seas serve as an important sea-lanes linking
the west to the Far East.
The Straits of Malacca is a shallow funnel-shaped waterway. its width varies from 3
nautical miles at its narrowest passage near Singapore island to 300 miles, near thenorthwestern entrance with depths generally less than 23 meters. Similar to the Dover Straits
the Straits of Malacca is also known to be one of the busiest sea-lanes in the world, withapproximately 400 oil tankers and cargo ships plying the Straits each day (Hashim, 1994). The
coastlines bordering the Straits also has terminal operations where crude oil and persistent oil
products are moved or transferred. Owing to its hazardous nature of the narrow and shallow
waterway, with congested entrance towards south, the Straits is exposed to threat of potential oil
spills from the thousand of oil tankers plying the Straits and from the terminal operations. The
most likely spill size ranges from 8000 barrels (bbls) from smaller tankers to some 80000 bbls
from large crude oil carriers. (PIMMAG, 1992). To date, Malaysia has experienced three major
incidents involving the grounding of two tankers, Showa Maru (1975) and Diego Silang (1976)
and the collision between Nagasaki Spirit and Ocean Blessing (1992).
The South China Seas, bordering the East Coast Peninsular Malaysia, Sabah andSarawak is no exception. The accelerated development and exploitation of Malaysia’s offshore
petroleum resources and those of its neighbours introduces similar risk as a result of the oil
exploration and production operation and a consequential increase in tanker traffic in and out of
the region(Figure.2). These potential spills arise from pipeline transport and transfer andshipment of crude oil as well as from blowouts. The most likely volume of spill from the tanker
scenario is 70000 bbls(PIMMAG 1992).
The vast maritime area is rich in resources which contributes significantly to the country’s
economy. The hydrocarbon extraction in the South China Seas, with a daily production of about
630000 bbls of crude oil and 1957 million standard cubic feet accounts for about 29% of thecountry’s revenue (Hashim Mohamad,1994).Another invaluable resource is fish which
contributes over 75% of animal protein supply to the local populace. Other than petroleum andgas, there are also other minerals such as tin, cobalt, magnesium, aluminium, nickel that may beof commercial volume with new extraction technology.
The coastal areas are covered with invaluable resources such as mangroves, coral reefs
and sandy beaches. Mangroves and coral reefs serve as nursery grounds for fish and othermarine organisms, thus supporting the fishing industry. The long stretch of beaches with allyear warm tropical climate not only support foreign but also local tourism and recreation.
The ever increasing traffic in the Straits of Malacca and the intensifying activities in the
exploration and development of offshore petroleum resources in the South China Seas has
resulted in increasing incidence of oil spills and form a major threat to the rich and fragile
ecosystem. Figure. 3 shows a yearly trend of oil spill incidents in Malaysian waters from 1975
to 1992 (Department of Environment, 1992). Any occurrence of oil spills in these areas could
result in significant environment impact and economic loss. With that extent of sensitivity, theGovernment has, since 1975 taken various measures to mitigate and combat oil spills throughthe development of National Oil Spill Contingency, upgrading of the oil industry oil spill response
capability and the enhancement of regional cooperation.

THE NATIONAL OIL SPILL CONTINGENCY PLAN
BackgroundIn the early seventies, when the threats of oil spills from thousand of oil tankers plying theStraits of Malacca became real, the Department of Environment (DOE) formulated its first oil spill
response plan in l975, then known as The National Oil Spill Contingency Plan for the Straits ofMalacca (SOMCP). In response to changing circumstances, DOE has revised and updated andimproved the Plan incorporating amongst others the search and rescue elements and information
on environmentally sensitive areas. With the intensified activities in the development of
Malaysia’s offshore petroleum resources and with increase in tanker traffic in the South China
Seas, the Government formulated another Oil Spill Contingency Plan for South China Seas
(SCSCP) in 1989. The SOMCP and the SCSCP were integrated and together they constitute a
National Oil Spill Contingency Plan (NOSCP).
Scope and Objectives
The NOSCP was formulated to cater for oil spill in Malaysian waters including the 200
nautical-mile Exclusive Economic Zone (EEZ) to meet the following objectives§

To provide a mechanism for coordinating response systems for effective containmentand recovery of oil;§
To enhance capability with the existing resources with respect to equipment andmanpower as well as training in combating oil spill; and§To alleviate or minimise potential adverse impacts to the environment arising from thespill.
Response arrangement
The NOSCP is activated on a three tiered response concept, based on the location of spill,quantity of spill and the response capability. The First Tier Response, is coordinated by local
authorities or local oil industry on operational spill either within port limits, oil terminal and depots
or oil exploration and production platforms. Usually, the magnitude of the spill is small and alocal oil spill contingency plan is activated, utilising the existing manpower and equipment.
As the spilled oil spread beyond the local area response capability, both in terms ofresources and mobilisation time, the second tiered response is coordinated, activating either the
SOMCP or the Area Operation Committees under the SCSCP, depending on the location of theincident. As shown in Figure. 4, there are four Area Operation Committees under the SCSCP,
two covering the East Coast of Peninsular Malaysia and one each for Sabah and Sarawak (DOE,
1994).
The third Tiered Response is coordinated to deal with major oil spills, where all theavailable government and industry resources are exhausted and where neighbouring countries’
assistance is needed. This tiered response is also activated when the spilled oil spreads out tothe neighbouring countries. A number of regional contingency plans and marine response
procedures will be activated depending on the geographical location and magnitude of the spills.

Each of the response level is inter- related to one another, and can be activatedsimultaneously depending on the resources capability, mobilisation time, quantity and location of
spills as mentioned above. Figure. 5 summarizes the sequence of Tiered Response of the
NOSCP (DOE, 1994).
Plan organisation
The NOSCP is coordinated by the National Oil Spill Control Committee. the Committee,
chaired by the Director-General of DOE, comprises related government agencies and oil industry
namely : DOE the Marine Department, Fisheries Department, Meteorological Services
Department, Custom and Excise Department, Immigration Department, Royal Malaysian Navy,
Royal Malaysian Air Force, Marine and Air Wing Police, Foreign Affairs Ministry, the National
Security Council, Maritime Enforcement and Coordination Centre, PETRONAS and thePetroleum industry of Malaysia Mutual Aid Group (PIMMAG).
The Committee has been given a mandate to advise the Area Coordinator and tocoordinate the various agencies involved in clean-up operation, air surveillance, procurementand deployment of equipment, movement of personnel and communication. The Committee,
through the Foreign Affairs Ministry, also coordinates with other neighbouring countries forassistance to expedite action with minimum red tape.
Other operational aspects of the NOSCPThe NOSCP also detailed various important operational procedures, amongst others
includes: the notification and reporting, spill investigation, security against liability,communication, sample collection, safety, public relations, claim, environmental and property
damages, use of dispersants salvage and transfer of cargo, temporary disposal of oily waste andtraining.
Recognising the need to make available financial support in an oil spill emergency, theGovernment established a National Trust Fund for Oil Spill Clean-Up. An allocation of 2 million
Ringgit Malaysia has been set aside to be used for making available emergency clean-up fundagainst spill of identified or unidentified source.

THE PETROLEUM INDUSTRY OF MALAYSIA MUTUAL AID GROUP (PIMMAG)Scope
The oil companies, led by PETRONAS in their effort to strengthen the national response
capability established a joint service company called the Petroleum Industry of Malaysia Mutual
Aid Group (PIMMAG). PIMMAG was incorporated as a non-profit service company limited byguarantee under the Companies Act 1965. The main purpose of PIMMAG is to establish an
adequate, coordinated and cost effective joint petroleum industry Tier 2 response capability forpotential oil spill emergencies arising from members’activities in Malaysian waters including the
EEZ. PIMMAG is being empowered to cooperate with and to integrate its effort with prevailinggovernmental efforts concerned with the control and clean-up of oil spills.
Membership and Contribution
PIMMAG is somewhat unique in that it caters to members from the whole spectrum of
petroleum industry activities, both upstream and downstream. The PIMMAG membershipcategories and financial contributions covers the diversity in size and nature of members’
operations. Any entity undertaking upstream and or downstream petroleum industry activities
including exploration, production, pipeline operation, terminal and storage operation, refining andbulk transportation is eligible for Ordinary Membership. There is also an Associate Membershipcategory for companies undertaking such activities on a temporary basis (mainly toaccommodate exploration activities). PIMMAG Members are expected to have appropriate Tier
1 Oil Spill Response (OSR) Capability in place in order to ensure effective mobilisation anddeployment of PIMMAG resources if required.
Such a diversified group of members does pose problems on cost allocating requirements.
Available formulae from similar organisations around the world were not able to satisfy theserequirements. As a result, PIMMAG has derived its own unique cost sharing method which istransparent and equitable depending on members’ oil spill exposure volume. the “oil spill
exposure volume”., which is the total yearly barrels of persistent oil produced and/or handled
through marine terminals expressed in KB/D. For exploration wells (which include wildcats andappraisal drilling), the oil spill exposure volume is deemed to be equivalent to 1 KB/D for each
exploration well spudded. Figure. 6 illustrates the oil spill exposure categories.
PIMMAG cost is classified under Administration Cost (cost of PIMMAG office), Capital
Cost (cost of assets) and on-going Operating Cost for maintenance and deployment availabilityof the shared OSR capability. The Administrative Cost is shared equally by all members (up to alimit of ten percent of the total operating cost). The Capital Cost and the Operating Cost is paidb the Ordinary members on oil spill exposure volume basis. The Ordinary Members Capital
contribution( less depreciation) is reflected in their "Membership Interest" account. Associate
Members pay a fee consisting of Administration Cost element and Operating and Capitaldepreciation cost element according to their oil spill exposure volume percentage, but do notcontribute to the capital requirements and consequently do not acquire "Membership Interest".
Figure. 7 illustrates the breakdown of cost contributions by members.
The actual cost of call-out and deployment of shared PIMMAG resources in response tooil spills, or training of members will be paid for by the specific member requesting the service.
PIMMAG shall also provide service to non-members upon request. Non-members however,shall pay higher call-out costs compared to members.

Structure and organisation
PIMMAG is governed by a Board of Directors comprising ordinary members with theoverall responsibility for ensuring the objectives of PIMMAG are achieved in an effective andefficient manner. The day to day management of PIMMAG is undertaken by a small group of
employees headed by a manager.
The Board of Directors appoints one or more service contractor(s) who act in a service
capacity only. The service contractor(s) provides maintenance and a small core of trained
manpower as well as specified logistical support to ensure ready deployability of PIMMAG
equipment where and when required. The service contractor(s) also provides training of
PIMMAG members.
Each member of PIMMAG has equal access to PIMMAG equipment in the event of an oil
spill and for training. In the event of an oil spill, the spiller shall request PIMMAG OSRassistance directly from the contractor, under the call out procedures. PIMMAG equipment
stockpiles will be located and managed at three areas, two in Peninsular Malaysia and one in
Sabah and Sarawak.
Liability and indemnity
A spiller is responsible for the management and control of the oil spill response required tocombat such a spill. All costs incurred by PIMMAG for such activities over and above the cost
necessary to ensure availability of the resources shall be borne by the spiller inclusive of all costs
incurred through other parties which provided assistance for the spill response when suchassistance is given at the spiller's request. PIMMAG rules include comprehensive liability andindemnity clauses protecting PIMMAG and its members against any and all liabilities that may
arise from the actual provision of OSR services.
Planned OSR Capability
In order to effectively respond to a Tier 2 oil spill at any location throughout Malaysia,
PIMMAG will have a total OSR Capability of about 200,000 bbls (Hussein Rahmat, 1994). The
planned OSR capability is acquired through pooling of existing OSR resources of members aswell as procuring additional resources where necessary. These OSR resources will bemobilised at three stockpile areas as mentioned above. Each stockpile area will enable
PIMMAG to mobilise the area resources within 12 to 24 hours. For larger spills which arebeyond the designated geographical area's capability, mobilisation of OSR resources of up to
50% from each of the other two locations will be made possible within 24 to 48 hours. PIMMAG
will also liaise with other oil spill response organisations.
Integration with NOSCP and Regional Contingency Plans
PIMMAG augments the national oil spill response capability and represent its members in
the National Oil Spill Control Committee (NOSCC). PIMMAG, without liability to its members,
give assistance to the NOSCC by providing necessary OSR resources in NOSCC's effort tocombat any oil spill.
PIMMAG also complements and provides assistance to other oil spill response plans
within the region such as the proposed ASEAN Oil Spill Response Action Plan (ASEAN-OSRAP),
Lombok-Maccasar Oil Spill Contingency Plan and the proposed ASCOPE Oil Spill Response Plan
through the NOSCP.

REGIONAL ARRANGEMENTS IN OIL SPILL RESPONSEAs environmental problems arising from oil spill rarely affect one nation alone, particularly
in coastal areas and the marine environment. In this respect, the needs for regional
cooperation to hold down hazards to the marine environment have been recognised by theGovernment since the early seventies. Amongst the important arrangements are the Traffic
Separation Scheme for the Straits of Malacca and the Straits of Malacca and Singapore
Revolving Fund and Regional Oil Spill Contingency Plans
Traffic Separation Scheme for the Straits of Malacca
The Scheme, endorsed by the International Maritime Organisation in 1977 adopted bythree littoral states namely Indonesia, Malaysia and Singapore is geared for the orderly flow ofvessels with an under keel clearance of at least 3.5 meters at all time during the passage throughthe Straits of Malacca to reduce the risk of collision in congested and converging areas (Tan,
1987). The Scheme which came into force in 1987, also provides for one-way routes for
opposing east-bound and west-bound traffic, at a constant speed of twelve knots to prevent inline collision.
The Straits of Malacca and Singapore Oil Spill Revolving Fund
The Memorandum of Understanding was signed in 1981 between the Governments ofIndonesia, Malaysia and Singapore on the one part and the Malacca Straits Council for theJapanese Non-Governmental Associations on the other part to established a revolving fund offour hundred million yen. The Fund enables the three littoral coastal states to take immediate
action either independently or jointly against any spill caused by ships whether accidental or
intentional.
Regional Contingency Plans
In mid eighties, Indonesia, Malaysia and the Philippines formulated the Lombok-Macassar
Oil Spill plan to mitigate and combat oil spill arising from vessel plying the straits. In early 1994,
Malaysia and Brunei Darulsallam also formulated the Bay of Brunei Oil Spill Contingency Plan.
The Plan complements the NOSCP and caters for oil spill in both the Malaysian and Brunei
waters.
In our continuing efforts to strengthened the regional capability in mitigating andcombating oil spill, in 1993, the six ASEAN countries including Malaysia has agreed to establish
the ASEAN Oil Spill Response Action Plan or in short ASEAN-OSRAP. The objective of the Plan
is to provide a mutual assistance from Member states in the event of a major spill incident which
exceeds the national response capability.
The ASEAN Council on Petroleum (ASCOPE) comprising national petroleum corporationsof ASEAN countries is looking into the possibility of forming the ASCOPE Oil Spill Contingency
Plan to provide support in terms of equipment stockpiles and manpower to member countries.
The proposed Plan shall complement the ASEAN-OSRAP. Figure. 8 shows the linkages of
Malaysia's National Oil Spill contingency Plan with other regional plans (DOE, 1994).

OTHER OIL SPILL RESPONSE ASSISTANCE
Oil Spill Response Preparedness and Response (OSPAR)

Japan, in her efforts to positively to meet the expectation of the OPRC 1990, promoted acooperative project on oil spill preparedness and response with the acronym OSPAR. The aimof OSPAR is to promoted international cooperation and improve regional response capabilities
for combating major oil spill incidents. the OSPAR project for ASEAN waters paved the way forthe development of an ASEAN Oil Spill information Network System and enhancement ofequipment stockpile bases at MUARA in Brunei Darusssalam, Balikpapan in Indonesia, Port
Kelang, Penang, Johore Bahru and Labuan in Malaysia, Manila, Cebu and Davao in thePhilippines, in the southern part of Thailand and Singapore. While the implementation of the
OSPAR project is not conditional upon the establishment of the ASEAN-OSRAP, it has been
instrumental in expediting the endorsement by member governments of the Memorandum ofUnderstanding on ASEAN-OSRAP.
Petroleum Association of Japan (PAJ)The Japan Ministry of international Trade and Industry through PAJ has also establishedequipment stockpiles in Singapore and Pork Kelang. It is understood that similar stockpiles arebeing planned in other locations of the ASEAN regions. In terms of size and deployability, thestockpiles are considered as part of the national oil spill resource, together with the equipment
available from local oil companies.
East Asia Response Limited (EARL)
East Asia Response limited (EARL) is considered as the primary regional oil spill
equipment resource, on the basis of its size and deployability. EARL was established in
Singapore in 1992 to provide prompt and efficient Tier 3 response to oil spill incidents in theStraits of Malacca and the areas in the Pacific Region.

CONCLUSION
In line with the growing concerns over the ever increasing traffic in the Straits of Malacca
and the rapid development in the exploration and exploitation of petroleum resources in theSouth China Seas, the Government and the oil industry is constantly reviewing and updating its
national oil spill response capability. The joint effort in sharing stock-piled equipment by
PIMMAG not only greatly enhance the National Oil Spill Contingency Plan, but also providing amore coordinated response action and ensuring a more cost effective mobilisation anddeployment of resources.
The IMO global programme for the protection of the marine environment and UNEP
regional seas programme contributed significantly to the development of contingency plans andcooperative measures which have enhanced oil spill response preparedness and capabilities in
Malaysia and other ASEAN nations. Assistance by Japan through the OSPAR and PAJ
programmes have promoted the establishment of new OSR centres and improved the existing
national capabilities. The key factor now is the availability of skill personnel. In this respect
training and exercises to improve deployment capability, communication and coordination are
areas that need priority attention.

BIOGRAPHY
Hussein Rahmat graduated as a mining engineer in 1962 from Camborne School ofmetalliferous mining, UK. He also has a M.S. in Petroleum Engineering and a MBA from
Stanford University.
He is currently the General Manager, Engineering & Safety Unit,
PETRONAS, who is responsible for providing groupwide stewardship of Technical management

System in areas of Health, Safety and Environment.

REFERENCES
1.
2.

3.

4.
5.

Department of Environment, 1994. Guidelines on the National Oil Spill Contincency
Plan, Fourth Revision.
Hashim T. Bin Mohamed T., 1994. Managing the National Maritime Area- The
Enforcement Cost. Paper presented at the Seminar organised by the Malaysia Instituteof Maritime Affairs. Kuala Lumpur, Malaysia.
Hussein Bin Rahmat, 1994. A Joint Industry Effort in to Oil Spill Response andPreparedness in Malaysia. Proceedings of the Second International Conference on
Health Safety and Environment. Society of Petroleum Engineering, Jakarta, Indonesia.
Petroleum Industry of Malaysia Mutual Aid Group (PIMMAG), 1992. Proposal on
the formation of PIMMAG.
Tan M. L. 1987. Oil Pollution Control Measures and Arrangements in Malaysia.
Meeting of Experts on the Control of Oil Pollution in the East Asian seas Region. United
Nations Environment Programme Bali Indonesia p28.

Figure 1 : Geographical location of Malaysia

Figure 2 : Oil &Gas Exploration and Production Areas of Malaysia

Figure 3 : Yearly trend of Oil Spill Incidents in Malaysian Waters from 1975-1992 (Courtesy : DOE, 1994)

Figure 4 : Elements of Oil Spill Contingency Plan (Courtesy : DOE, 1994)

Figure 5 :Flow Diagram for the activation of Tiered Response Team

Figure 6 :PIMMAG : Oil Spill Exposure Categories

Figure 7 :PIMMAG : Cost Contribution by Member

Figure 8 :Arrangement in Oil Spill Preparedness & Response at various levels of organisations