The Shetland Oil Disaster: Taxpayers may have to foot part of clean-up bill

TAXPAYERS and environmental groups could end up paying part of the cost of cleaning up despite ministerial assertions that the polluter would foot the bill, lawyers warned yesterday.

They said John MacGregor, the Secretary of State for Transport, was only partly right when he said that the owners of the Braer would pay for the operation.

About pounds 52m will be made available as compensation for damage caused by the oil spill. If the costs rise above this ceiling, they are likely to fall upon local people, environmental groups and the Government, the lawyers said.

The initial bills will be met by the International Oil Pollution Compensation Fund, which will recompense anyone who can prove they have been directly affected by the disaster, regardless of whether the ship-owners are shown to be at fault or not. Thus, salmon farmers whose fish die because of the oil should be paid compensation. It should also refund the authorities for costs incurred in cleaning up the beaches and rocks around Shetland.

But under the 1969 Civil Liability Convention, which has been incorporated into UK law, there is a limit on the amount of money available from the compensation fund. In this case, the ceiling will be set at about dollars 80m, according to Dr Ian White, managing director of the International Tanker Owners' Pollution Federation.

He said the costs of the clean- up were unlikely to exceed this limit, a point disputed by many environmentalists. They draw parallels with the Exxon Valdez spill in Alaska, where the bill ran to between pounds 1.32bn and pounds 1.98bn.

Ironically, Britain was among a number of countries which decided to increase the compensation fund in November, but this agreement has yet to be given legal force in the UK.

At present, if the dollars 80m limit is exceeded, the only way of extracting money from the ship-owners or managers would be through legal action. This would be highly complex, expensive and uncertain of success, lawyers said.

The Braer is insured to the extent of pounds 466m, but this money would be paid only if it could be proved that its owners knew the vessel was likely to break down before sending it to sea, Dr White said.

Yesterday, Greenpeace said the the limit on the compensation fund should be removed, as happened in the US after the Exxon Valdez disaster. 'You have to hit them in the pocket,' a spokeswoman said.

Environmentalists are also concerned at other aspects of the compensation scheme. The costs, for instance, of monitoring wild- life in the wake of the disaster will not be met. Neither will the long- term costs of working to restore the environment. Yesterday, the Royal Society for the Protection of Birds said: 'We are concerned that the 'polluter pays' principle should be carried through right down the line.'

The tourist industry in Shetland could also find itself out of pocket. What happens, for instance, to hoteliers whose bookings drop off next year? Lawyers said some might receive compensation but others would not. Professor Robert Grime, director of the Institute of Maritime Law at Southampton University, said the fund was 'designed to deal with people who lose directly'.