Despite shipping industry concerns, new legislation affecting fines and penalties for oil spills is set to enter force in California State waters next year. The new Californian bill, entitled “AB 3214 Oil and Gas: oil spills, fines and penalties” (AB 3214), introduces two significant changes to existing Californian law related to oil spill fines and penalties. The new legislation will mean a doubling of existing fines and penalties for oils spills that result from negligence, and 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 will be in addition to liability for third party claims for losses and damages that would also arise.
Despite the legislation being prompted in response to two previous oil pipeline incidents, it applies to also apply to ship sourced oil pollution. According to comments by the Hong Kong Shipowners Association, the legislation will subject vessel operators trading to California to possible ship sourced oil pollution fines 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 this could include the Master and other crew members involved in accidental pollution incidents that occur in Californian waters.
The new law will come into effect on 1 January 2021. The International Chamber of Shipping (ICS) and the International Group of P&I Clubs (IG) raised the issue with the State Governor, setting out the shipping industry concerns. They will now further discuss steps which can be taken in cooperation with other concerned stakeholders.