RMA may provide compensation

Rive says the sums involved in complying with Resource Management Act (RMA) enforcement orders may dwarf the amounts involved in fines for criminal offences.

“The news that the MV Rena’s captain and navigator could be fined just $10,000 for causing the country’s largest ever environmental disaster has attracted much attention,” he says.

“Why, when charged for operating vessel in such way that causes unnecessary danger or risk to persons or property, might the penalty be so lenient?” he says.

The charges that have been laid so far are under section 65 of the Maritime Transport Act 1994 (MTA), which carry, for individuals, maximum fine of just $10,000.

“Clearly this amount pales into insignificance compared with mounting clean-up costs and likely claims for compensation from range of public and private interests.”

Rive says that, at this stage, many of the fine details concerning how the incident occurred, and how the potentially complex contractual and insurance arrangements might interact with local New Zealand laws, are yet to be established.

“However, as the Prime Minister has indicated, the Government is not without legal remedies. There are other liability provisions within the MTA which potentially apply.

“There is also the small matter of the Resource Management Act 1991 (RMA). Ultimately, the RMA may prove much more powerful weapon in addressing liability for the environmental impacts from the spill.”

Rive says liability for pollution from incidents at sea under the MTA is generally ‘strict’ in the sense that intent or negligence does not need to be proven.

“But under the MTA, pollution liability is subject to liability caps unless intent or recklessness can be established.”

Detailed formulae for calculating upper limits of liability (essentially driven by gross vessel tonnages) are contained in the Act.

“In the case of the MV Rena spill, the liability limit under the MTA appears to be in the vicinity of NZ$14 million, sum which may, or may not, meet total clean-up costs and associated losses.

“However, because the grounding, and subsequent spills of oil and other contaminants took place within the territorial waters of New Zealand, the captain and others in charge of the vessel, together potentially with their employers or principals may still be charged for illegal discharges under the RMA.”

Offences under the RMA carry much higher maximum penalties than under the MTA, including fines up to $300,000 and imprisonment for up to two years.

Corporate entities are liable to fines up to $600,000.

“In addition, and significantly, there is wide scope for ‘enforcement orders’ under the RMA requiring action and/or payment of costs for clean-up.

“The public’s reluctance to accept anything less than the assumption of full financial responsibility for the clean-up was evident this week with the reaction to the $1 million pledge from the heads of Mediterranean Shipping Company.

“Many have argued that the offer is simply not enough; that public apology is also expected, together with much more substantial contribution towards the costs and losses that have resulted.”

Rive says the initial charges under the MTA are likely to be no more than the opening skirmishes of much more fierce and drawn-out legal battle.

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