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private insurance community. The committee expects this subsection to have a similar effect upon the pollution coverage available to offshore facilities. Currently, in the absence of such a requirement, some offshore operators do not have insurance coverage for oil spill liability. As financial responsibility is now to be required, the capacity of the insurance market in this area will necessarily increase. Whereas a standard commercial insurance policy covering pollution from offshore facilities currently contains a $22 million limit, such coverage might now expand to $45-50 million.

Direct action by a claimant on the fund is allowed against the surety, insurer, or other person providing financial responsibility for an owner or operator. Thus, a claimant or the fund can seek compensation directly from an insurer, for example, if an owner or operator refuses to meet his liability requirements or does not provide compensation for any other reason. Section 311 of the Federal Water Pollution Control Act, which established the key precedent for oil spill liability legislation, contains a similar direct action provision.

A fine of up to $25,000 is to be imposed upon anyone who violates the provisions of this section or any regulations issued pursuant to it.

The President is to increase the liability limits and corresponding financial responsibility requirements annually, equal to the annual percentage increase in the wholesale price index. The intent of this provision is to prevent the liability limits and financial responsibility requirements from becoming obsolete as inflation pushes up the costs of oil spills as well as the limits of insurance policies. The Water Pollution Control Act establishes liability limits of $100 per gross ton or $14 million for vessels in 1970, when insurance policies were generally limited to about $14 million. Since that time, insurance coverage has expanded to a current level of $25 million, although the $14 million limit remains fixed in the law. The committee helieves that this provision will avoid such discrepancies by escalating liability limits and financial responsibility requirements along with inflation. The wholesale price index was selected, after advice from the General Accounting Office, as a reasonable indicator of inflation particularly in relation to spill cleanup costs and damages.

The committee was concerned that an owner or operator should not be required to tie up large amounts of capital hy having to doubly insure, with both a State and the Federal Government, as to any possible discharge. Therefore, subsection (f) of this section provides that if an owner or operator of an offshore facility or vessel provides evidence of financial responsibility to the Federal Government under this section, he cannot be required to provide similar evidence for the same facility or vessel to any State government. States are required to accept evidence of compliance with the Federal requirement as satisfactory compliance with their State-level financial responsibility requirement for the same facility or vessel. Section 312.Trustee of Natural Resources

The Secretary or an authorized representative of any State is to act as trustee of the natural resources. This provision enables Federal or State governments to make claims on behalf of the public for damages to natural resources. The section stipulates that compensation received is to be used to restore, rehabilitate, or acquire the equivalent of the damaged resources. Consistent with section 307 of this title, such compensation may only be used for acquisition purposes if restoration and rehabilitation of the damaged or destroyed resources is impossible or can only be undertaken with a low possibility of a significant amount of success. Section 313.-Claims Procedure

This section establishes the procedures by which claimants can recover for cleanup costs and damages. In general, the claimant is to seek payment from the owner or operator or his insurer. If liability is denied, or if no settlement can be reached in 60 days, the claimant can seek payment from the fund. Any amounts paid to the claimant from the fund can be recovered, up to the liability limits and with the liability exceptions, from the owner and operator.

The Secretary of Transportation is directed to prescribe and periodically amend regulations for the filing, processing, settlement, and adjudication of claims for cleanup costs and damages caused by oil discharge from offshore facilities and vessels.

The section specifically describes the step-by-step procedure for resolution and payment of claims. Once a discharge is alleged, the Secretary is to promptly notify the owner and operator of an offshore facility or vessel, which allegedly discharged oil, of such allegation. The owner or operator may deny the allegation or deny liability for damages within 5 days of receiving notification from the Secretary. If such denial is in dispute, the owner and operator may seek administrative adjudication, and then judicial review, and the claimant may seek payment from the fund and allow the fund to proceed against the alleged violator, up to the limits of liability.

If the owner and operator does not deny the allegation of a spill or liability for damages, the owner and operator or the person providing financial responsibility is required to advertise in any area where damages may occur the procedures under which claims may be presented to them. It is expected that such advertisement will involve, as appropriate, advertisements in local newspapers, announcements on local radio and television programs, and posters in public buildings such as the post office and town hall. The text of such advertisements is to be published by the Secretary in the Federal Register. If the owner, operator, or person providing financial responsibility does not advertise as required, the Secretary is directed to do so at the expense of the owner, operator, or person providing financial responsibility.

If the owner or operator has denied an allegation of a spill or liability for damages, the Secretary is required to advertise the procedures under which claims may be presented to him for payment by the fund. Advertising is expected to be as suggested above, including publication in the Federal Register. Advertisement must begin within 15 days after the Secretary receives notification of an oil discharge. It is to continue for at least 30 days, and to be repeated at least once each quarter for the following 5 years.

5 All claims must be presented, whether to the owner, operator, person providing financial responsibility, or the Secretary, within 1 year after the damages are discovered and within 5 years after the advertising is commenced. In the case of damages caused by chronic, low

level discharges of oil, when there might be no advertisement, claims must be presented within 1 year after the damages are discovered. All damage claims are to be on one form if such claims are presented to the Secretary for payment by the Fund. The form may be amended to include new claims as they are discovered. However, damages which are known or reasonably should be known are deemed waived if they are not included in the claim when compensation is made.

If the owner and operator does not deny liability, all claims must be presented first to the owner and operator and/or to the person providing financial responsibility. The recipient of the claim request must inform the Secretary of Transportation of the claim and the claimants of his rights under this Title.

Claimants can present claims directly to the Secretary if an owner or operator or insurer: (1) has denied an allegation of a discharge or liability for damages; (2) submits a written offer for settlement which is rejected by the claimant; or (3) has not settled the claim by agreement with the claimant within 60 days. The 60-day period begins from the date on which the claim was presented or on which advertising was commenced, whichever was later. Such non-settled claims are to be transmitted to the Secretary, together with any supporting documents within two days after a request from the claimant. Such claims are then considered to be presented to the Secretary for payment by the Fund.

The purpose of this provision is to provide for expeditious settlement of claims if the claimant is not obtaining satisfaction from the owner, operator, or person providing financial responsibility. The owner, operator, or person providing financial responsibility, is to notify the claimant of his rights, which includes the right to reject an offer.

The Secretary is to utilize the facilities and services of private insurance and claims-adjusting organizations in administering this section, and may contract to pay compensation for such facilities

and services. Such contract need not comply with section 3709 of the Revised Statutes if the Secretary shows that advertising is not reasonably practicable. The Secretary must approve payment of any claim exceeding $100,000, or two or more claims from the same claimant exceeding $200,000. Such approval is to be ministerial in nature and does not call for discretionary judgments on the part of the Secretary. The Secretary is only to use Federal personnel to administer this section in extraordinary circumstances in which private organizations' services and facilities are inadequate, whether for lack of sufficient expertise, lack of sufficient personnel or materials, or other reasons.

In any dispute involving a claim that had been presented to the Secretary for payment by the fund, the claimant can submit the matter to the Secretary for adjudication if the Secretary has denied liability for a claim, or if he has not settled the claim by agreement with the claimant within 90 days. The 90-day period begins when the claim is presented to the Secretary for payment or when advertising was commenced, whichever occurred later. This provision does not provide for the settlement of claims, but for the adjudication of matters in dispute.

The owner, operator, or person providing financial responsibility may submit the following matters in dispute for adjudication: (1) Å denial of an allegation of a spill or of liability for damages; (2) an objection to unlimited liability for damages because of gross negligence, willful misconduct, or failure to comply with applicable regulations; and (3) the amount of any payment, whether made or proposed, by the fund if such payment may be recovered from the owner, , operator, or person providing financial responsibility.

Disputes submitted to the Secretary of Transportation are to be referred to a hearing examiner, appointed under section 3105 of title 5 of the United States Code. The examiner is required to adjudicate the case promptly and render a decision in accordance with section 554 of title 5 of the code. The hearing examiner can administer oaths and subpoena the attendance and testimony of witnesses and the production of books, records, and other pertinent evidence for the purposes of any hearing. The hearing is to take place in the judicial district within which the disputed matter occurred. If the disputed matter occurred within two or more districts, the hearing can take place in any of the affected districts. If it occurred outside of any district, the hearing should take place in the nearest district.

If the hearing examiner's decision is not submitted for judicial review, the fund must promptly disburse the award. The Secretary cannot review the hearing examiner's decision. Section 314.-Judicial Review

Anyone who suffers legal wrong or who is adversely affected or aggrieved by the decision of a hearing examiner can seek judicial review of the hearing examiner's decision within 60 days after it is made. Judicial review may be sought either in the United States Court of Appeals for the circuit in which the damage occurred (or, if it occurred outside of any circuit, in the Court of Appeals for the nearest circuit), or in the Court of Appeals for the District of Columbia.

Reasonable attorneys' fees and court costs are to be awarded to the claimant if the discharger or the fund seeks judicial review and the hearing examiner's decision is affirmed. Section 315.-Class Actions

The Attorney General can act on behalf of any group of damaged citizens which the Secretary finds will be more adequately represented as a class than as individuals. Payments to the group are to be distributed to all of its members, except for reasonable costs incurred by the Attorney General. Such class suits filed by the Attorney General can not be taken against the fund or other Federal agency.

Any member of a group can initiate a class action suit if the Attorney General cannot or does not do so within 90 days after an oil discharge. Failure of the Attorney General to bring a class action suit should not affect or prejudice any class action suit brought by a member of the class. If a class includes more than 1,000 members, the requirement for public notice established by rule 23 (c) (2) of the Federal Rules of Civil Procedure will be fulfilled by publishing notice of the class action in the Federal Register and in local newspapers serving the damaged parties. Section 316.- Representation

This section provides for representation of the fund for claims under this title. The Secretary is to request the Attorney General ini

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tially to represent the fund. If the Attorney General does not notify the Secretary that he will institute court actions or otherwise represent the fund within "a reasonable time”, the Secretary is directed to appoint attorneys to do so. Section 317.-Jurisdiction and Venue

Original jurisdiction for all controversies arising under this title is to be in the U.S. district courts. The Federal district courts are to have original jurisdiction regardless of the citzenship of the parties or the amount in controversy. Venue shall lie in the district where the damage occurred (or, if the damaged occurred outside of a district, in the nearest district), or in the district where the defendant resides, may be found, or has its principal office. The fund is designated a resident of the District of Columbia for the purposes of this section. Section 318.-Access to Records

This section provides for the maintenance of records and for Government access to them. Everyone responsible for contributing to the fund must keep records and furnish information which the Secretary calls for in regulations. The fund is to collect fees pursuant to this title at such times and such manner as the Secretary prescribes in regulations.

The Secretary is to have access to any books, documents, papers, and records of any person responsible for contributing to the fund. The Secretary is granted access to such information for the purposes of regularly examining and auditing the collection of fees.

The Comptroller General is to also have access to the books, documents, papers, records, and other information of any person required to contribute to the fund, and of the fund. Section 319.-Public Access to Information

The public is to be allowed to inspect and reproduce any communication, document, report, or information transmitted between any Federal official and any person regarding liability and compensation for damages resulting from an oil discharge covered by this title. Exempted from this public disclosure requirement is any information covered by subsection (b) of section 522 of title 5 of the U.S. Code, and any information which is otherwise legally protected from public disclosure. Section 320.Annual Report

Section 320 requires the Secretary of Transportation to submit an annual report to Congress within 6 months after the end of each fiscal year. The report is to include information regarding the administration of the fund during the fiscal year just completed, a summary of the management and enforcement activities of the fund, and recommendations for legislative amendments to this title. Such amendments are to be designed to improve the management of the fund or the administration of the liability provisions of this title. Section 321.-Authorization of Appropriations

Section 321 authorizes appropriations for the implementation of this title. Administrative funds of $10 million for the first fiscal year,

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