The government’s proposed marine protection rules are expected to slash oil spill protection for third parties – making it harder for fishing and tourism operators to get an insurance payout in the event of a spill.
The new Marine Protection Rules, proposed by Associate Minister for Transport Julie Anne Genter, indicate that offshore installations and tankers with more than 2,000 tonnes of oil are not required to be insured for third-party claims of lost profits in case of an oil spill.
This means third parties such as fishing and tourism operators can still apply for a claim for lost profits but installation owners might have to pay out of pocket as they are not required to be insured for these claims.
“Oil installation owners will need to obtain insurance to cover the significant risks created by their operations. These policies ... will not necessarily cover claims for pure economic loss,” Genter said, as reported by Newsroom.
Genter said third parties can still “claim against the oil installation for pure economic losses” under the Maritime Transport Act 1994 (MTA) but did not explain how they would do it if the oil installation went bankrupt.
Amanda Larsson, climate and energy campaigner at Greenpeace New Zealand, commented that it’s possible for installation owners to go bankrupt after a major oil spill.
“Offshore operators are almost always going to become insolvent in the event of a major spill, which is why these insurance requirements exist,” she said.
“It seems ludicrous that you would rely on these offshore operators to be liable for third party profits without insurance but then require insurance for other aspects. The two industries that would be most affected by an oil spill are tourism and fisheries and the bulk of the effects on them financially will be for lost profits and not being able to carry out their business activities as usual.”
