INTERNATIONAL REGULATION OF
INTENTIONAL DISCHARGES OF OIL INTO THE OCEAN:
Copyright: Ronald B. Mitchell
University of Oregon
28 June 1995
BACKGROUND: THE SOURCE OF THE PROBLEM
Tankers transport millions of metric tons of oil by sea every year.
Until the 1950's, after making a delivery, a tanker would fill some of
its cargo tanks with ballast water and would clean out the others with
sea water. The oil that remained clinging to the sides and bottoms of the
tanks would mix with water in these processes. Captains would discharge
the oil/water mixtures at sea prior to arrival in port. While the clingage
represents only some about 0.4% of the total cargo, for a single voyage
of an average tanker this translates into 400 tons of oil. Given the vast
volumes of oil transported by sea, tankers were discharging a million or
more metric tons of oil each year, creating a major pollution problem.
These intentional discharges account for twice as much oil entering the
ocean as from accidents like the Exxon Valdez but represent approximately
only 25% of oil pollution from all sources.
Discharges of crude oil can remain afloat over long distances. Therefore,
discharges made many miles offshore can later appear on beaches, posing
both environmental and aesthetic threats. Their most obvious environmental
impact, and the most frequent source of public concern, has been in the
deaths of seabirds. Beyond this, however, uncertainty revolves around the
extent of environmental harm. Some scientists contend that intentional
oil discharges have significant deleterious effects for fish, shellfish,
and other forms of marine life. Others argue that no evidence exists that
oil spills "have unalterably changed the world's oceans or marine
resources." While not as dramatic as a major tanker spill, oil on
resort beaches has been a continuing source of public complaints.
One may ask, why do tankers intentionally discharge oil at sea? As with
any industrial practice producing an environmental externality, captains
discharged oil at sea because it was the cheapest means of disposing of
a byproduct of oil transportation. This externality arose not only because
the pollution producers did not bear the environmental costs of the pollutant
but also because the benefits of altering the production process to recover
the waste oil did not outweigh the costs. The international nature of the
oil shipping industry made regulation of oil pollution more difficult than
it would have been otherwise, with those countries that had strong shipping
interests having little interest in regulating the oil transportation industry
and those countries with strong environmental interests having little ability
to regulate it.
The pressures of environmental non-governmental organizations and of the
public at large, especially the NGOs and publics in the United States and
the United Kingdom, have led to regulation of the ability of tankers to
discharge oil at sea. Since the 1950s, several different strategies have
been used to regulate them. The discussion that follows will briefly describe
the two major strategies currently in place. As you read through the descriptions,
be thinking about which of the two strategies would oil transporters be
most likely to comply with. What factors would lead you to expect more
compliance with Strategy #1, and what factors would lead you to expect
more compliance with Strategy #2?
STRATEGY #1: LIMITS ON DISCHARGES
Under the International Convention for the Prevention of Pollution
from Ships (known as MARPOL), any discharges a tanker captain makes must
stay within three separate limits. Within 50 mile coastal zones and in
specially-protected areas, captains can only discharge "clean ballast,"
defined as a discharge that "would produce no visible traces of oil
on the surface of the water." Outside these zones, captains must ensure
they do not discharge more than 60 liters of oil per mile. The final, and
most restrictive, limit prohibits captains from discharging more than 1/15,000th
of a tanker's cargo capacity on any single ballast voyage. Both of the
first two limits are enforced by aerial and naval surveillance programs.
In "clean ballast" cases, the courts of the detecting state can
prosecute the violation. In 60 liter per mile cases, the courts of the
tanker's flag state have prosecution jurisdiction. Violations of the 1/15,000th
limit can be detected by inspectors in oil exporting states: any tanker
arriving with clean tanks can be safely assumed to have violated the total
discharge limit and prosecuted in the detecting or flag state courts. If
properly complied with, however, this strategy would essentially completely
eliminate all oil pollution from tankers.
Oil companies and independent oil shipping companies have generally supported
adoption of these rules as the most economically efficient and appropriate
means for reducing oil pollution. Indeed, oil companies played major roles
in proposing and supporting these measures to replace earlier regulations
which they felt were impossible to comply with. Oil companies, in their
role as cargo owners, were especially supportive of the 1/15,000th limit
since it forced independent tanker owners to conserve and recycle oil that
would otherwise be dumped overboard. Industry also preferred these limits
as less costly than compulsory equipment requirements.
STRATEGY #2: REQUIRED INSTALLATION OF EQUIPMENT
MARPOL also specifically requires tankers to install equipment that
prevents tankers from using their cargo tanks for ballast, known as segregated
ballast tanks or SBT, and that uses crude oil rather than sea-water for
washing down tanks, known as crude oil washing or COW. Large tankers built
before 1980 must have one or the other of these technologies installed;
those built between 1980 and 1982 must have SBT installed; and those built
after 1982 must have both technologies installed.
Violations of the equipment standards could be detected by inspection in
any port as well as during initial construction. Detecting states could
prosecute such violations in court and could also detain ships found in
violation until they no longer "posed a threat to the marine environment."
These equipment rules were adopted over the objections of most shipping
states who saw them as creating an unwarranted expense since the discharge
standards could provide the same protection at less cost. The requirements
for SBT on all ships built after 1979 was considered especially onerous
since the additional equipment cost of $5 million per tanker provided no
economic benefits to the tanker owner; indeed, SBT added $1,500 to the
costs of each voyage while careful operational procedures could actually
save $17,000 per voyage due to the reduced loss of valuable oil. Agreement
to the requirements was reached largely as a way to avert adoption of the
U.S. proposal for the even more expensive double-hull technology.
Which of these two policy strategies would you expect to be successful?
What do you mean by success? Evaluate the two polices with respect to various
possible measures of success, such as negotiability, environmental protection,
verifiability, compliance, equity, economic efficiency, total costs, cost-effectiveness,
distribution of costs, etc. On what other bases should we compare the two
policies? Which criteria of success seem most important to you? Why?
Without reading Mitchell's article, develop an argument as to whether tankers
would be more likely to comply with the first or the second strategy. In
trying to predict the compliance level of these two strategies, consider
the following factors as either causes or at least good predictors of whether
compliance will be likely:
Will compliance be higher or lower with a strategy that:
industry supports or one that industry opposes?
has low compliance costs or one that has high compliance costs?
is easy to monitor and verify or one that is difficult to verify?
is easy to sanction detected violators or one that is hard to sanction
has many opportunities for violation or one that has few opportunities
nations are likely to enforce or one that nations are not likely to enforce?
Which strategy will countries have:
more incentives to monitor?
a greater ability to monitor?
more incentives to sanction?
a greater ability to sanction?
How do these factors help distinguish between the two strategies and allow
you to suggest which is most likely to exhibit a higher compliance rate?
Be sensitive to the fact that these factors may cut in different directions
and you should try to evaluate the net impact of all of them to make a
judgment of which strategy to choose.
Your answer should be no longer than 2 pages.