Prestige oil spill compensation under attack

Posted: 14 May 2003

As reports come in that oil from the Prestige oil spill is now being washed up on the beaches of the French Riviera, compensation payments announced on May 9 have been condemned as "a grim joke" by the environment pressure group Friends of the Earth.

The ageing, single-hulled tanker Prestige sank on November 13,2002, with a cargo of 77,000 tonnes of heavy fuel oil, much of which has now washed onto the coast of Spain, Portugal andFrance.

The London-based International Oil Pollution Compensation Fund, financed largely through levies on the oil industry, has agreed to pay no more than £107 million (150 million euros) forclean-up and compensation. The IOPC fund is believed to total no more than £122 million (171 million euros).

The Spanish Government has estimated cleanup costs so far at £200 million (280 million euro). To this must be added the economic losses tothe Spanish fishing industry, the tourist trade and others. The IOPC itself has estimated total losses at £716 million (1 billion euros).

Friends of the Earth exposed the complex web of ownership behind the Prestige and its cargo (See: Prestige report). The ship was registered in the Bahamas, but owned by a branch of the troubled Greek shipping dynasty the Coulouthros family. The oil was owned by traders Crown Resources, a subsidiary of the giant Russian conglomerate Alfa Group. Neither Alfa nor the ship owners are believed to have offered any direct compensation for the Prestige disaster.

"This level of compensation is a grim joke" said Friends of the Earth International Vice-Chair TonyJuniper. The Prestige disaster is one of the worst oil spills in European history. But both theshipping and oil industries hide behind a complex web of offshore companies and surrogates. This might have been designed specifically to avoid having to meet the real costs of theirpolluting activities.

"Hundreds of miles of coastline, much precious wildlife, and the economic future of tens of thousands of people have all been blighted by this disaster. The need for new international law to make companies accountable or the environmental cost of their behaviour has never been greater."

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