Members are invited to note recent action by the ICS and the International Group of P&I Clubs in relation to recently passed legislation affecting fines and penalties for oil spills in Californian waters. 

Members are advised that, in cooperation with the International Group of P&I Clubs, the ICS has recently intervened at short notice in the process for passing a new bill in the State of California. 

The bill, entitled AB 3214 Oil and Gas: oil spills, fines and penalties (AB 3214), sought two significant changes to existing Californian law related to oil spill fines and penalties: 

1) a doubling of existing fines and penalties for oils spills that result from negligence, and; 

2) the imposition of a new fine of $1,000 per gallon of oil spilled in excess of 1,000 gallons for those same spills.

These penalties would be in addition to liability for third party claims for losses and damages that would also arise. Although it is understood that AB 3214 was proposed largely in response to two previous oil pipeline incidents, it applies to ship sourced oil pollution. It will therefore subject vessel operators trading to California to possible fines in the event of a ship sourced oil pollution incident that are so high as to make them potentially uninsurable. In addition, the wording of AB 3214 suggests that individuals may also be the subject of such fines and that this could include the Master and other crew members involved in accidental pollution incidents that occur in Californian waters.

The legislative process was already quite advanced when the ICS was alerted to this development in that the state legislative bodies had approved the draft and the bill was simply awaiting the Governor’s signature upon which, the bill would become state law. 

In view of the urgency, the ICS secretariat cooperated with the International Group of P&I Clubs to send a letter to the governor of California, expressing the industry’s strong concern and urging him to veto the bill. The ICS secretariat also engaged with the international seafarers’ union to seek support, but due to the short time in which to properly consider the matter before the bill was due to be finalised, they were unable to assist.

Although the letter secured a two-day delay to the bill’s passing for the Governor to consider the new submission, ultimately he was not persuaded to exercise his veto as requested, and it was signed on 24 September. 

The new law will come into effect on 1 January 2021. A copy of the final bill as passed is attached at Annex A. 

We have been made to understand that the ICS will now further discuss the matter with the International Group of P&I Clubs and consider what further steps can be taken in cooperation with other concerned stakeholders.