#19
Maritime Oil Pollution and Punitive Damages: Advocating International
Environmental Consensus Law
The jury was taken to Prince William Sound to observe the results of Exxon’s
cleanup efforts, six years after the Exxon Valdez ran aground at Bligh Reef:1
What struck some of these jurors was the absence of wildlife. “The entire
day I never saw one bird flying around or anything else,” says Janette
Garrison. “No otters. I mean, we spend a lot of time in Homer, and I am so
used to seeing otters.” And hearing the call of birds overhead. Those birds
previously had been so abundant. Now the skies were clear, but the only
sound was that of the surf and of their own boots on the gravel. It is
estimated that more than three hundred thousand murres, a local bird, had
perished in the spill.”2
Rendering one of the largest punitive damage awards in history, the jury
calculated the damage at $5 billion before the award was modified on appeal. 3 With the
continued availability of punitive damages in U.S. courts, the likelihood of similar
verdicts increases daily with the aging of the world’s single hull tanker fleet. 4 But are
such remedies possible with regard to disasters in other waters? In 2002, The Prestige, a
1
Theodore Eisenberg, Engle v. R.J. Reynolds Tobacco Co.: Lessons in State Class Actions, Punitive
Damages, and Jury decision-making Damage Awards in Perspective: Behind the Headline-Grabbing
Awards in Exxon Valdez and Engle, 36 Wake Forest L. Rev. 1129, 1143 (2001). See also Elizabeth R.
Millard, Anatomy of an Oil Spill: The Exxon Valdez and the Oil Pollution Act of 1990, 18 Seton Hall
Legis. J. 331, 340-41 (1993). See generally In re the Exxon Valdez, No. A89-0095-CV, 236 F. Supp. 2d
1043 (2002).
2
DAVID LEBEDOFF, CLEANING UP: THE STORY BEHIND THE BIGGEST LEGAL BONANZA OF OUR TIME,
292 (1997), quoted in Eisenberg, supra n. 1.
3
In re Exxon Valdez, No. A89-0095-CV, 1995 U.S. Dist. LEXIS 12952 (D. Alaska Jan. 27, 1995), aff’d. in
part, vacated in part, Nos. 97-35191, 97-35192, 97-35193, 97-35235, 2001 WL 1359852 (9th Cir. Nov. 7,
2001).
4
R. MICHAEL M’GONIGLE AND MARK W. ZACHER, POLLUTION, POLITICS, AND INTERNATIONAL LAW—
TANKERS AT SEA 20 (1979).
1
single-hulled tanker, sank 130 miles off the coast of Spain, releasing over 12,000 tons of
oil into the Atlantic Ocean and causing an estimated €1 billion in damage.5 Punitive
damages, considered against public policy, are not generally available in civil law
countries, not even in private, international commercial arbitration.6 Given that
compensatory damages often under-compensate,7 and offer little toward deterrence,8 it is
fair to ask whether a system of punitive remedies should not be available internationally.
This article will explore the background of punitive damages and other punitive
regulatory remedies in the United States, and examine the international legal and
regulatory scheme in the rest of the world with regard to maritime oil pollution. It will
become apparent that by applying integration9 and convergence10 principles to current
law, a new source of international law can be created, “international environmental
consensus law.”11 By creating an avenue to the remedy of punitive damages, practitioners
5
Richard J. Ferris, Jr., Meg Caldwell, Kevin T. Haroff, Nicole L. Leonard, and Gwen Parker, International
Environmental Law, 38 INT’L LAW.487 (2003). See also Lloyd’s List Int’l, Issue # 58798, 1 (Nov 29,
2004). See also Les Echo, Financial Times Information Lmtd. (FECH), May 9, 2003, at 1.
6
John Y. Gotanda, Awarding Punitive Damages in International Commercial Arbitrations in the Wake of
Mastrobuono v. Shearson Lehman Hutton, Inc., 38 Harv. Int’l L.J.59, 62 (1997).
7
DOUGLAS LAYCOCK, MODERN AMERICAN REMEDIES—CASES AND MATERIALS 728, (3rd ed. 2002)
(discussing Posner’s rational for punitive damages).
8
Neal Shover and Aaron S. Routh, Environmental Crime, in CRIME AND JUSTICE—A REVIEW OF
RESEARCH 321, 353 (Michael Tonry, ed., vol. 32, 2005).
9
See generally Richard J. Lazarus, Meeting the Demands of Integration in the Evolution of Environmental
Law: Reforming Environmental Criminal Law, 83 Geo. L.J. 2407 (1995).
10
See generally Linda S. Mullenix, Reuschlein Lecture, Lessons from Abroad: Complexity and
Convergence, 46 Vill. L. Rev. 1 (2001).
11
In re “Agent Orange” Product Liability Litigation, 580 F. Supp. 690, 713 (1984) (Chief Justice,
Weinstein, E.D.N.Y., discussing lack of precedent and the need for a national consensus law:
That neither New York nor, as far as we have ascertained, any state has had a case such
as this one before us does not permit our throwing up our hands and refusing to decide
the question. Perhaps it would have been better if certification rules permitted posing the
conflicts question to the more than half-a-hundred jurisdictions involved. But no such
procedure is presently in place . . .. In the meantime, this court must ascertain the living
state law as best it can. The “evolutionary growth” of the law of conflicts means that each
“litigant, whether in the federal or the state courts, has a right that his case shall be a part
of this evolution – a live cell in the tree of justice . . ..”(citing Corbin, The Laws of the
Several States, 50 Yale L.J. 762, 776 (1941))
2
can hurdle the political obstacles common to international claims,12 bolstering protections
of the “soft law” approach to treaties.13 The proposed paradigm could be engaged beyond
maritime oil disasters, to other environmental catastrophes where punitive damages are
warranted.
Choosing Oil Pollution as the Paradigm
Of all potential environmental catastrophes, oil pollution is one of the most deadly
to the environment, and is one of the most prevalent toxic substances in the oceans.14
While diplomatic efforts are strongly focusing on this problem through a G8 Action Plan,
more must be done.15 There has been concern about water pollution since the 19th
century, but the tremendous increase in oil consumption after World War II brought the
....
For the reasons noted, it is likely that each of the states would look to a federal or a
national consensus law of manufacturer’s liability, government contract defense and
punitive damages. What is the nature of the national consensus or federal law is a subject
for another memorandum.
Id.); See also DAVID H. VERNON, LOUISE WEINBERG, WILLIAM L. REYNOLDS, WILLIAM M. RICHMAN,
CONFLICT OF LAWS: CASES, MATERIALS AND PROBLEMS 683, (Rev. 2nd ed. 2003) “In a 1991 study on
enterprise liability for personal injury, the American Law Institute recommended the application of
“national consensus” state law in mass tort cases.” Id; Cf. Theodor Schilling, Constitutionalization of
General International Law—An Answer to Globalization? Some Structural Aspects (Abstract at
www.nyulawglobal.org/fellowsscholars/documents/GFFS05SchillingAbstract.pdf. (March 18, 2005)
(“international consensus law”).
12
See generally M’Gonigle and Zacher, supra note 4. See also Guruswamy, supra n. 39 at 337 (seeing a
dearth of procedural or secondary rules that enable the recovery of damages in international environmental
law).
13
P.K. RAO, INTERNATIONAL ENVIRONMENTAL LAW AND ECONOMICS 302-03, (2002) (arguing that the
“soft law” of environmental treaties “requires only vague commitments.” Id.).
14
DOUGLAS BRUBAKER, MARINE POLLUTION AND INTERNATIONAL LAW—PRINCIPLES AND PRACTICE 11
(1993). See also John Vogler, THE GLOBAL COMMONS--A REGIME ANALYSIS 59 (1995) (maritime
transport and dumping accounts for 10% each of total pollution of the seas).
15
Ferris, et. al., supra note 5 at 487. Members of the G8 are Germany, Canada, the United States, France,
Italy, Japan, the United Kingdom, and Russia. The European Union participates as an observer. The
meeting of June, 2003:
As a first step, the group agreed to accelerate the phasing out of single hulled tankers and further
agreed to accelerate the adoption of guidelines on places of refuge for vessels in distress,
increase compensation funds for victims of oil pollution, and improve the training of seafarers,
including the imposition of mandatory minimum qualifications.
Id at n. 71.
3
matter of oil pollution to the forefront. The huge increase in exported oil was, and still is,
carried mostly by sea.16 Although the oceans have a huge capacity for self-purification, it
is being exceeded by a number of pollutants, especially oil.17 It is estimated that thirty
five million tons per year are deliberately or accidentally poured into the oceans, half
from land based sources, and most of the rest from shipping.18 The Baltic and
Mediterranean Seas are of special concern, being almost completely enclosed. 19 As
Dellapenna writes: “One can look to the Mediterranean…despoiled by nearly every
coastal state and despite high-sounding agreements to protect the sea, continues to
deteriorate with little being done to correct the situation.”20
Oil pollution comes from a variety of sources: vessel-based; exploitation of the
sea-bed; land-based pollution, and deliberate dumping.21 A third of all pollution flows
from offshore drilling.22 In 1973, it was estimated that three million tons of oil went into
the oceans from routine tanker operations, such as flushing out ballast water that is
pumped into the ship once the oil is off-loaded.23 Most of the oil from accidental
discharge results from structural failures, groundings, and collisions. While structural
failures account for more volume of oil, the discharges from groundings and collisions
wreak more havoc, in that they usually occur closer to shore. M’Gonigle wrote in 1973:
“Interestingly, thirty per-cent of all collisions occur in the very congested English
Channel and another forty per-cent in the North Sea, Baltic Sea, and other waters
M’Gonigle and Zacher, supra n. 4 at 14.
ALEXANDRE KISS AND DINAH SHELTON, INTERNATIONAL ENVIRONMENTAL LAW 435 (2nd ed. 2000).
18
Brubaker, supra n. 14 at 34.
19
Kiss and Shelton, supra n.17 at 436.
20
Joseph W. Dellapenna, The Internet and Public International Law: Law in a Shrinking World: The
Interaction of Science and Technology with International Law, 88 Ky. L.J. 809 at 849 (2000).
21
Kiss and Shelton, supra n.17 at 437.
22
Id. at 436.
23
M’Gonigle and Zacher, supra n. 4 at 20.
16
17
4
surrounding Western Europe.”24 Navigational errors accounted for the Torrey Canyon
and Argo Merchant incidents,25 two dramatic losses provoking great impetus to
international efforts to control oil pollution.26
Some discussion of the science of oil’s effects on the environment is required, in
order to understand verdicts such as in Exxon Valdez. M’Gonigle explains:
There are four general types of oil most likely to be discharged
from vessels: crude oil, Bunker C fuel oil, diesel fuel oil, and light
petroleum products (gasoline, kerosene). Of these, diesel fuel oil has been
described as the worst in terms of toxicity, although light petroleum
products also are considered very toxic . . .. Bunker C and viscous crude
oils are noted for their smothering effects on organisms in inter-tidal areas,
and they can poison organisms at sea that come into contact with the oil
soon after the spill.27
The affects on humans are virtually unknown,28 and research has yet to prove
lingering effects on fish populations.29 It is admitted that knowledge of the effects of oil
in the oceans is “rudimentary and fragmentary.”30 However, there is clear evidence of
other harm: “[o]f all the adverse effects of oil pollution, the most pathetic is the
destruction of wildlife and their habitats . . .. It has been estimated that chronic oil
pollution in the North Sea and North Atlantic alone kills a staggering total of between
150,000 to 450,000 birds every year.”31 Just as devastating is the affect on lower forms of
life, closer to the bottom of the food chain. Studies have shown that a spill can kill half of
the phytoplankton and can disrupt entire populations of invertebrates, (snails, crabs, soft
shell clams), for six to eight years. Mangroves, nature’s coastal protector and a source of
24
Id.
Id.
26
Id. at 6.
27
Id. at 31-33.
28
Brubaker, supra n. 14 at 12.
29
M’Gonigle, supra n.4 at 35.
30
Brubaker, supra n. 14 at 32.
31
Id. at 34.
25
5
food for invertebrates and vertebrates, are killed and do not recover from contact with
oil.32 The resultant damage to fishing and tourism cannot be discounted.
Experience in the last century has shown that these unfortunate catastrophic
events are likely to occur, based on the aging, single hull tanker theory. Witness the
following litany of calamities: The Torrey Canyon, off the coast of Cornwall, 1967;33 the
Argo Merchant, off the coast of Massachusetts, 1976;34 the Amoco Cadiz, off the northern
coast of France, 1978; the Burmah Agate, Texas, 1979; the Puerto Rican, San Francisco,
1984, the Avenus, Louisiana, 1984; the Exxon Valdez, 1989;35 the Erica, 1999; and now
the Prestige, Spain, 2002. An intensifying factor to the likelihood of another spill is the
flag-of-convenience issue, the practice of ship owners assigning to their vessels the
nationality of a state with the least safety regulations. Statistics show that vessels
registered in “flag-of-convenience” states have some of the worst accident records.36 The
problem is described succinctly by Goldie:
…[A]s the world’s giant tanker fleet continues to age, more and
more ships become less and less safe. This development is the inevitable
consequence of tanker economics. As ships age, they tend to become the
property of less scrupulous owners, who, in order to glean their profits,
make cuts in their ship’s maintenance and so in their environmental
protection costs. Thus, in order to earn a precarious living, these vessels
will increasingly become menaces on the high seas, creating disasters
afloat and on the shoreline. Hence, the privilege of registering ships under
permissive flags-of-convenience will increasingly create more severe
problems . . .”37
32
Id. at 31.
M’Gonigle, supra n. 4 at 144.
34
Lawrence I. Kiern, Admiralty Law Institute Symposium: Damages in Maritime Cases: Article:
Environmental Damages Under Federal Law, 72 Tul. L. Rev. 693, 707.
35
Millard, supra n. 1 at n. 3.
36
M’Gonigle, supra n. 4 at 20.
37
L.F.E. Goldie, Environmental Catastrophes and Flags of Convenience—Does the Present Law Pose
Special Liability Issues?, 3 Pace Y. B. Int’l L. 63 (1991) reprinted in Lakshman D. Guruswamy, Sir
Geoffrey W.R. Palmer, Burns H. Weston, Jonathan C. Carlson, INTERNATIONAL ENVIRONMENTAL LAW
AND WORLD ORDER—A PROBLEM ORIENTED COURSEBOOK at 628, (2ND ed. 1999).
33
6
Adding insult to injury is the fact that owners of these vessels could essentially
become judgment-proof. The International Convention on Civil Liability for Oil
Pollution Damage, (CLC), defines the “owner” as the “person or persons registered as the
owner of a ship, or in the absence of registration, the person or persons owning the
ship.”38 The significance of this definition lies in the fact that the “operator,” the
charterer, is usually in more control of the vessel than is the owner, effectively creating a
“straw man to answer for major maritime pollution.”39
Thus, the choice of the paradigm of oil pollution prevention and enforcement
becomes an obvious one for study with regard to available punitive remedies. The
possibility of another dramatic loss looms on the future, and the legal community must
search for ways to compensate the victims and, at the same time, build deterrence into a
globally-weak system of enforcement.40 As Brubaker states: “It appears in this area of
international law, concerns with providing real channels for economic relief for pollution
damage, even catastrophes, do not move States to take concrete action.”41 And as Plater
38
Id. See also International Convention on Civil Liability for Oil Pollution Damage, 1992, concluded at
London, 27 November 1992, Art. I, (3) reprinted in GURUSWAMY, ET.AL., SUPPLEMENT OF BASIC
DOCUMENTS TO INTERNATIONAL ENVIRONMENTAL LAW AND WORLD ORDER 877 (1999).
39
L.F.E. Goldie, Environmental Catastrophes and Flags of Convenience—Does the Present Law Pose
Special Liability Issues?, 3 Pace Y. B. Int’l L. 63 (1991) reprinted in Lakshman D. Guruswamy, Sir
Geoffrey W.R. Palmer, Burns H. Weston, Jonathan C. Carlson, INTERNATIONAL ENVIRONMENTAL LAW
AND WORLD ORDER—A PROBLEM ORIENTED COURSEBOOK 628, (2ND ed. 1999); Cf. Patricia W. Birnie and
Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 290-91, (1992) (arguing that flag states
might have strict liability, but no state practice exists to test this conclusion).
40
Cf. Mullenix, supra n. 10 at 3:
History has demonstrated that the judicial system lacks the forecasting powers to anticipate new
problems . . . the most famous illustration of the judicial system’s failure to anticipate new
problems is the rule drafters’ failure in the early 1960s to anticipate modern mass tort litigation .
. . what problems will emerge in the next millennium that are not currently foreseeable?”
Id. at 3-4.
41
Brubaker, supra n. 14 at 166.
7
said, “[w]e cannot expect people to maximize the public good and minimize the public
detriments of their activities on the basis of altruism, which is why we have law.”42
The Remedy of Punitive Damages
One of the great products of work holism in the history of
environmental law is David Oesting and Brian O’Neill’s triumph in
securing a five billion dollar punitive damage award in the wake of the
spill of the Exxon Valdez . . . They did not let their single mindedness
block out their critical “aha!” moment: for [them] it was the discovery of
the five billion dollar figure—an average year’s net profit for Exxon.43
Loved and scorned at the same time, punitive damages in the United States are
here to stay. That is, as long as they meet the Due Process standard of State Farm v.
Campbell, a single digit ratio between punitive and compensatory damages. 44 Punitive
damages, also known as exemplary damages, are a punitive, civil remedy45 having roots
in English common law, and even earlier.46 Punitive damages are historically separate
from compensatory or nominal awards, “levied to punish and deter certain conduct, . . .
awarded only when one party’s misconduct was willful or malicious.” 47 They were first
awarded in dignitary torts, some scholars theorize, as a way for the court to explain
substantial verdicts.48 Posner sees multiple rationales for the awarding of punitive
damages: actual damages under-compensate; not all torts are detected; and the criminal
42
Zygmunt J.B.Plater, Facing a time of Counter Revolution—The Kepone Incident and a Review of First
Principles, 29 U. Rich. L. Rev. 657, 694.
43
William H. Rodgers, Jr., The Most Creative Moments in the History of Environmental Law: The Who’s,
39 Washburn L.J. 1, 25-26 (1999).
44
State Farm Ins. Co. v. Campbell and Barneck, Sp. Admin, 538 U.S. 408, 425 (2003). (the court further
limits punitive damages to the particular claim at hand, and thus cannot be based on general company
practice in all states).
45
Laycock, supra n. 7 at 5.
46
Id. at 719-21 (citing Grimshaw v. Ford Motor Co., 119 Cal. App. 3d 757 (1981). See also Gotanda, supra
n. 6 at 61-62. “These damages date back to the Code of Hammurabi, which provided that if a person stole
an animal from the temple, that person would have to repay the temple thirtyfold.” Id.
47
Gotanda, supra n. 6 at 62-63.
48
Laycock, supra n. 7 at 727.
8
justice system is overloaded.49 Some see punitive damages as the answer to the
limitations of the economic harm rule, (limiting damages to those suffering physical
impact to the person or property only),50 which can adversely impact the availability of a
cause of action to potential plaintiffs in an environmental case.
As indicated previously, punitive damages are not available in civil law legal
systems.51 Because of this, “trade usage thus weighs against arbitral awards of punitive
damages” internationally.52 In the United States, the availability of punitive damages
varies with state law, but is not unusual when the matter is framed as toxic tort
litigation.53 In addition, the Excessive Fines Clause of the 8th Amendment has been held
not to apply to punitive damages awards, ameliorated nonetheless by State Farm’s Due
Process parameters.54
In the environmental law area, the standard of evidence is “clear and
convincing,”55 often for behavior that is particularly egregious with regard to compliance
with safety standards. A “defiant attitude,” toward environmental regulations, in
49
Id. at 728.
Laycock, supra n. 7 at 116-17.
51
Mullenix, supra n. 10 at 7. (many complex litigation cases settle without punitive damages, for this and
other reasons: “In essence, then, the element of punitive damages has effectively been leeched from
American complex litigation.” Id. at 24.).
52
Gotanda, supra n. 6 at 66.
53
James R. May, Control of Toxic Substances: Fashioning Procedural and Substantive Due Process
Arguments in Toxic and other Tort Actions involving Punitive Damages after Pacific Mutual Life Ins.Co. v.
Haslip, 22 Envtl. L. 573, 582-83 (1992). See also Janet S. Kole, Alan Klein, Sean P. Wajert, and
Christopher M. Roe, Toxic Tort Litigation: Theories of Liability and Damages, in ENVIRONMENTAL
LITIGATION 139 (2nd ed. 1999). “Many states direct juries to determine the amount of punitive damages by
considering the character of the defendant’s act, the nature and extent of harm to the plaintiff, and the
defendant’s wealth. The third factor is generally justified by the notion that it takes more to punish a rich
person than a poor one.” Id.
54
Hershel J. Richman, Alan Klein, and Janet S. Kole, Toxic Tort Litigation: Theories of Liability and
Damages, in ENVIRONMENTAL LITIGATION, ABA SECTION OF LITIGATION 113 (Janet S. Kole, Larry D.
Espole, Eds. 1991) (citing Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S.
257 (1989)). See also State Farm Ins. Co. v. Campbell and Barneck, Sp. Admin, 538 U.S. 408, 425 (2003);
In re Exxon Valdez, No. A89-0095-CV, 1995 U.S. Dist. LEXIS 12952 (D. Alaska Jan. 27, 1995), aff’d. in
part, vacated in part, Nos. 97-35191, 97-35192, 97-35193, 97-35235, 2001 WL 1359852 (9th Cir. Nov. 7,
2001); BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996).
55
Laycock, supra n. 7 at 734.
50
9
particular, has been held to justify an award of punitive damages. 56 The Doralee court
said, “Exemplary damages are intended to inject an additional factor into the cost-benefit
calculations of companies who might otherwise find it fiscally prudent to disregard the
threat of liability. To function effectively, the award must be “of sufficient substance to
‘smart’” . . . the offender.”57 Because of this, the critical evidence of wealth is
admissible.58
This discussion now arrives at the economic impact of such awards. Is there an
impact, and who should decide the economic issue, the judiciary or the legislature? The
procedure known as remittitur is available to protect from unduly harsh awards, 59 and
where the trial judge refuses to make a subtraction, appeals can be pursued. State Farm,
Exxon, and BMW are famous examples.60 Advocates of environmental protection
naturally desire that this procedure be used sparingly, fearing loss of an important tool in
environmental law which “[forces] potential polluters to take the environmental impact of
their activity into account.”61 It is on the issue of economic impact versus environmental
damage that law and economics scholars and environmentalists lock horns:
56
Diana Garcia, Remittitur in Environmental Cases: Developing a Standard of Review by Federal Courts,
16 B.C. Envtl. Aff. L. Rev. 119, 142, citing Dayton Malleable, 11 Envtl. L. Rev. at 21030-31; See also
Doralee Estates, Inc. v. Cities Service Oil Co., 569 F. 2d 716 (1977); See also Plater, supra n. 42 at 667
citing Pruitt, et. al. v. Allied Chemical Corp., 523 F. Supp. 975 (1981) (Pruitt would have brought criminal
charges today, author believes. Id. at 691-692).
57
Doralee, 569 F. 2d 716 at 723.
58
In Re Exxon, 236 F. Supp. 2d 1043. Cf. Zazu Designs v. L’Oreal, S.A., 979 F. 2d 499 (1997) (Judge
Easterbrook argued that corporations are not wealthy in the sense that individuals are; that corporate wealth
belongs to shareholders) cited in Laycock, supra n. 7 at 736-37; See also Eisenberg, supra n.1 at 1146. “To
promote scholarship to shape legal doctrine, Exxon, stung in the first world of punitive damages by a multibillion dollar award, funded impressive scholarship to try to shape perceptions about the sober mass of
punitive damages awards . . . and uses that scholarship to attack the punitive damages system.” Id.
59
Garcia, supra n. 56 at n. 1. “Remittitur has been defined as: “The procedural process by which a verdict
of the jury is diminished by subtraction.” BLACK’S LAW DICTIONARY 1164 (5th ed. 1979).” Id.
60
State Farm Ins. Co. v. Campbell and Barneck, Sp. Admin, 538 U.S. 408, 425 (2003);
61
Garcia, supra n. 56 at 146.
10
For environmentalists, the concept of justice is inextricably bound
to environmental protection. . [they] believe economists generally lack
appreciation for the gravity of environmental degradation.
....
As a result economists and environmentalists often keep their
distance from one another.
....
One reason environmentalists reject the use of cost-benefit analysis
is because it must “reduce all concerns to cash.”
....
Because they consider environmental protection as a moral
imperative, environmentalists often consider costs to be “an irrelevant
distraction at best, or a harmful exercise at worst”62
The classic cost-benefit analysis comes into play with regard to assessing the risk
for catastrophic potentiality, creating what some see as a lose-lose situation for risk
managers.63 The American Law Institute’s position is that “[a]n enterprise should be
liable for punitive damages only when there is clear and convincing evidence of reckless
disregard for the safety of others in the decision made by management officials or other
senior personnel.”64 It is interesting to note that in the Torrey Canyon incident, the cost of
the ship and cargo was estimated at ₤14.24 million, while the cost of prevention and
control would have been ₤7.7 million.65
62
M. Neil Browne, Kathleen Maloy, and Jessica Pici, The Struggle for the Self in Environmental Law: The
Conversation Between Economists and Environmentalists, 18 UCLA J. Envtl. L.& Pol’y 335, 344-50
(2000-2001).
63
See generally W. Kip Viscusi, Symposium: Punitive Damages: The Social Costs of Punitive Damages
Against Corporations in Environmental and Safety Torts, 87 Geo. L.J. 285 (the Challenger incident
illustrates the difficulty in estimating risk) (research for the article supported in part by a grant from the
Exxon Corporation).
64
Id. at 310. See also AMERICAN LAW INSTITUTE, ENTERPRISE RESPONSIBILITY FOR PERSONAL INJURY:
REPORTERS’ STUDY (1991). See also Plater, supra n. 42 at 671. Regarding the Exxon Valdez: “From the
State of Alaska Oil Spill Commission’s study of the disaster, it became clear that the Exxon Valdez disaster
was not the quirk result of a captain with a drinking problem, but a completely foreseeable result of a series
of industry decisions . . ..” Id. (author cites the reduced crew from 36 to 16 men; professional loading crew
also let go, forcing the crew of the Exxon Valdez to work without sufficient sleep, and the single hull of the
tanker).
65
M’Gonigle, supra n. 4 at 144.
11
However, there would be no “Catch-22” if corporations would do a cost-benefit
analysis and institute the necessary precautions within reason. It is when they make the
decision not to, that the analysis itself becomes evidence of egregious behavior
warranting punishment.66 This is just one of the reasons that some scholars criticize the
punitive damage remedy, arguing that it ultimately chills innovation and is against
consumers’ interests; that it causes “concrete harm,” and “taints the integrity of our
judicial system.”67 Further, the fact that a corporation is in regulatory compliance is not
a defense to punitive damages.68
However, some scholars assert that there is no cause for concern with regard to
economic disruption potentially caused by punitive damage awards.69 “All credible
sources suggest that punitive damage awards are rare, and that they are especially rare in
the visible areas of product liability and medical malpractice. And when punitive
damages are awarded, they tend to correlate strongly with the level of compensatory
damages.”70 Eisenberg describes what he sees as a difference in perception and reality in
the awarding of punitive damages:
Two worlds of punitive damages exist. One world occupies the
headlines. It is the world that includes the Florida tobacco litigation . . .the
Exxon Valdez oil spill, BMW . . . and the McDonalds coffee case. The
other is the hidden world of punitive damages that does not make the
headlines. It is a world of rare, modest awards and of reduced or reversed
large awards. Readers of substantial numbers of punitive damages cases
find that the decision to award punitive damages is almost always a sound
one.71
66
Viscusi, supra n. 63. See also Laycock, supra n. 7 at 729. (the jury in Grimshaw v. Ford Motor Co.
found the cost-benefit analysis reprehensible).
67
Viscusi, supra n. 63 at 335.
68
Id.
69
Theodore Eisenberg, Responses: Measuring the Deterrent Effect of Punitive Damages, 87 Geo. L.J. 347
(1998). See also Laycock, supra n.7 at 735. “Data does not support the view that large punitive damage
awards have become routine.” Id.
70
Eisenberg, supra n. 69 at 348.
71
Eisenberg, supra n.1 at 1130-31.
12
Eisenberg further makes the point that the legal system has little experience with cases
having damages in the magnitude of Exxon Valdez. Thus, the billion-dollar award is
probably not a “radical departure from the usual relation between harm and punitive
awards.”72
One final issue with regard to the remedy of punitive damages and environmental
claims concerns insurance. It is against public policy to insure against punitive damage
awards, since the purpose is to impact the defendant financially.73
Integration in the Domestic Regulatory Scheme
Historically, claims for environmental damage were pursued under traditional
common law causes of action, trespass and nuisance.74 Today, however, a claim could be
pursued under several causes of action simultaneously: negligence, negligence per se,
nuisance,
trespass,
strict
liability
for
abnormally
dangerous
activities,
and
statutory/regulatory causes of action.75 This is known as “integration.”76 Evidence of
integration can be seen in that state and federal regulatory programs do not preempt
72
Id. at 1146.
Eric M. Holmes, Applicability of Liability Insurance Coverage to Private Pollution Suits: Do We Insure
Pollution?, 40 Tenn. L. Rev. 377, __. See also In Re Fernald, No. C-1-85-149, 1989 U.S. Dist. LEXIS
17761 (court bars government from paying punitive damages from U.S. Treasury; government contractor
must indemnify).
74
Janet S. Kole, Alan Klein, Sean P. Wajert, and Christopher M. Roe, Toxic Tort Litigation: Theories of
Liability and Damages, in ENVIRONMENTAL LITIGATION 108-120 (2nd ed. 1999).
75
Id.
76
Richard J. Lazarus, Meeting the Demands of Integration in the Evolution of Environmental Law:
Reforming Environmental Criminal Law, 83 Geo. L.J. 2407, 2415 (1995). Integration is defined as:
. . . the evolutionary process within any one discrete area of law. It involves an initial
period of confrontation between one body of law’s assumptions, values, and goals and
those underlying other intersecting areas of law. Confrontation is followed by
accommodation and reconciliation as the two areas of law interact and inform each other
in a process of mutual evolution.
73
13
lawsuits by private citizens against tortfeasors under common law causes of action.77
Similarly, punitive damage claims are not barred from environmental claims based on
violations of federal regulatory programs.78 As with the liability system, punitive damage
claims are not considered as disruptive of state or federal regulatory schemes. 79 To
complete the integration picture, it must be noted that state law and maritime operate
together: “. . . [S]tate law is alive and well in admiralty. State law is habitually adopted in
maritime cases to flesh out federal rules of decision.”80
Thus, tort law has transformed itself to meet the challenges of environmental
protection. “The result has been the emergence of an entirely new area of law referred to
as “environmental torts” as well as the modification of previously long standing tort
doctrines such as nuisance law, causation, and limitation periods.”81 Lazarus artfully
observes: “. . .environmental laws reflect the complexities of the ecosystem itself.”82
Rodgers echoes this thought: “[e]nvironmental law has always been a seething world of
paradigm shifts. Those paradigm shifts are exemplified by various statutory models.”83
But statutory schemes alone are not sufficient with regard to environmental protection,84
painfully obvious in the international arena.
77
Jeffrey J. Rachlinshki, Regulating in Foresight vs. Judging Liability in Hindsight: The Case of Tobacco,
33 Ga. L. Rev. 813, 820 (1999).
78
Id. at 840. See generally Millard, supra n. 1; See also South Port Marine v. Gulf Oil and Boston Towing,
56 F. Supp. 2d 104 (1999) (OPA allows for “a wide variety of lawsuits and remedies.” Id. at n.12); N.
Carolina Shellfish Growers Ass’n v. Holly Ridge Assoc’s, 278 F. Supp. 2d 654 (2003) (Fed. R. Civ. P. 68
does not foreclose private suits under the CWA); Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947)
(historic police powers of the state, cited by Laycock, supra n. 7 at 622); Clausen Oysters v. M/V New
Carissa, 171 F. Supp. 2d 1127 (2001).
79
Id. at 840-41. (CERCLA and the CWA allow for punitive damage claims).
80
Laycock, supra n. 7 at 620. See also Lawrence I. Kiern, Admiralty Law Institute Symposium: Damages in
Maritime Cases: Article: Environmental Damages under Federal Law, 72 Tul. L. Rev. 693, 706 (1997).
81
Lazarus, supra n. 76 at 2416.
82
Id. at 2429.
83
Rodgers, supra n. 43 at 22-23.
84
See generally Keith N. Hylton, When Should We Prefer Tort Law to Environmental Regulation?, 41
Washburn L.J. 515.
14
Before addressing the international realm of environmental law, a short discussion
of the history of oil pollution regulation and its punitive aspects are necessary for a
thorough discussion of punitive damages. The early years of oil pollution regulation in
the United States eerily mirror the weak nature of international enforcement today. 85
However, a combination of tragic maritime accidents and the poor condition of the
nation’s waters finally led to an energized environmental movement in the 1970s, passing
legislative reform.86 The Water Quality Improvement Act created a regime for oil spill
liability and compensation for vessels,87 followed by the Federal Water Pollution Control
Act Amendments of 1972.88
Later came additional important regulatory safeguards
providing causes of action for oil pollution, including the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), also known as the Superfund
85
Lawrence I. Kiern, Admiralty Law Institute Symposium: Damages in Maritime Cases: Article:
Environmental Damages under Federal Law, 72 Tul. L. Rev. 693, 706 (1997):
Congressional action to regulate pollution of the nation’s waters began timidly and
expanded only modestly and incrementally through much of this century. Congress first
enacted legislation, the New York Harbor Act, in 1886 to reduce pollution damages
caused by vessels to the nation’s waters. That same year coincided with the launch of the
first true oil tanker, the Gluckhauf, bringing for the first time the threat of a large-scale
spill to American waters. Congress soon extended the principles of the New York Harbor
Act to the nation by enacting the Rivers and Harbors Act of 1899. (. . . known as the
Refuse Act.) However, the new legislation only provided for a criminal misdemeanor,
and it did not establish a statutory right of recovery for the damages caused by the
pollution. Moreover, the statute was designed largely to bar obstructions to navigation,
not to prevent pollution or clean it up. . . Similarly, the Oil Pollution Act of 1924 did not
prove effective in preventing pollution of the nation’s waters. It provided penalties only
for the discharge of oil into the nation’s coastal waters, but made exceptions for
emergencies, unavoidable accidents, and collisions. Moreover, it provided for limited
regulations designed to protect public health and navigation, but not private parties or the
environment. Id.
86
Id. at 708 to 710.
Pub. L. No. 91-224, 84 Sat. 91 (1970), superseded by Pub. L. No. 92-500, 88 Stat. 816 (1972) (codified
as amended in scattered sections of 33 U.S.C. (1994)); See also Kiern, supra n. 85 at 708, n.78.
88
Pub. L. No. 92-500, 88 Stat. 816 (codified as amended in scattered sections of 33 U.S.C. (1994)). See
also Kiern, supra n. 85 at 708, n.79 and 709 (for other oil pollution-related statutes expanding the scope of
eligible claimants and damages).
87
15
Law;89 the Resource Conservation and Recovery Act (RCRA); 90 and the Oil Pollution
Act of 1990 (OPA).91 These were used by the U.S. Environmental Protection Agency
(EPA) to force parties to clean up hazardous substances, and contained punitive damages
and daily fines for failure to comply with clean up orders “without sufficient cause.”92
The Superfund Law has been described as “strict and unforgiving,” resulting in
“hundreds of billions of dollars of hazardous waste cleanup liabilities . . . rotating
through the U.S. legal system.”93 Fines under OPA resemble those of CERCLA:
“$25,000 per day of violation or an amount of up to $1,000 per barrel of oil . . .,” whereas
“gross negligence or willful misconduct increases the penalty ceilings to $100,000 per
day and $3,000 per barrel.”94 Not to be outdone, RCRA carries “civil penalties of
$25,000 per day per violation, criminal penalties for unlawful treatment of hazardous
wastes up to $50,000 per day per violation and imprisonment of up to two years, and
criminal penalties for knowing endangerment that include fines of up to $1,000,000 and
prison terms of up to fifteen years.”95 However, even with penalties such as these, some
doubt the deterrence effect of statutory penalties exceeds that of tort law.96
89
42 U.S.C. § 9601-9675 (1988). See also Eisenberg, supra n. 69 at 354.
42 U.S.C. § 6901
91
33 U.S.C. § 2701; See also Janet S. Kole and Stephanie Nye, eds., ENVIRONMENTAL LITIGATION, (2nd
ed., ABA 1999).
92
J. Wylie Donald, Defending Against Daily Fines and Punitive Damages under CERCLA: The Meaning of
“Without Sufficient Cause,” 19 Colum. J. Envtl. L. 185 (1994) Donald notes that CERCLA § 9607(c) (3)
provides that:
“[I]f any person who is liable for a release or threat of release of a hazardous substance
fails without sufficient cause to properly provide (sic) removal or remedial action upon
order of the President . . ., such person may be liable to the United States for punitive
damages in an amount at least equal to, and not more than three times, the amount of any
costs incurred by the Fund as a result of such failure to take proper action. Id. at 186.
93
William H. Rodgers, Jr., Environmental Law 58 (1994) quoted in Eisenberg, supra n. 69 at 354.
94
Eisenberg, supra n. 69 at 354 (citing 33 U.S.C. ?1321(b)(7)(A) and 33 U.S.C. ?1321(b)(7)(D) (1994)).
95
Id. at 356 (citing 42 U.S.C. ?6928(a)(3), (c), (d), (e) and (g) (1986)).
96
See generally Hylton, supra n. 84.
90
16
One legal scholar argues for greater integration of environmental law with criminal
law.97 Prof. Lazarus, having a unique perspective due to the fact that much of his career
inside the federal system, believes that the integration needed in applying regulatory
penalties is so lacking that it invites allegations of government abuse. 98 The problem is
that criminal prosecution requires “absolute duties” and clear criminal standards, whereas
tort law is better positioned to handle “relative duties.”99
The significance of Lazarus’s argument in general is not the issue of criminality,
but that environmental law can, and should evolve, through integration with criminal law.
Advocating that environmental law integrate with other areas seems to be a popular topic
among legal scholars, an indication of how avant-garde environmental law really is.100
Lazarus evaluated environmental law’s stage of maturity in 1995: “Environmentalism has
prompted evolutionary waves throughout this nation’s laws and is now increasingly
reaching towards the international domain.”101 This portent ten years ago has become a
reality in international environmental law, as this discussion will illustrate. The remainder
of this article will now proceed from integration to the international realm of
environmental law, and will conclude with what one might say is the international
version of integration: convergence.
97
Lazarus, supra n. 76 at 2419.
Id. at 2419. (Lazarus served in various capacities from a Justice Department lawyer to that of Asst. to the
U.S. Solicitor General).
99
Id. at 2444.
100
Borrowing a favorite phrase of Kirk Junker, professor of international environmental law at Duquesne
University School of Law.
101
Lazarus, supra n. 76 at 2529.
98
17
Introducing International Environmental Law
It is interesting to note that in the 1970 edition of Von Glahn’s Law Among
Nations, written in 1965, there was no chapter on international environmental law.102
Now, not only is there a body of international environmental law, it seems to have taken a
journey through the “hard law” of custom and treaties to the “soft law” of newly formed
norms,103 and, having found this lacking, and is now searching for solutions holding the
promise of fiercer enforcement and punishment. The problems of enforcing international
environmental law are like any other issue in international law; complicated by issues of
state sovereignty and politics, but compounded by the issue of trade; a kind of law-andeconomics debate on a grand scale. Environmentalists frame the debate as whether an
activity meets the requisites of “sustainable development”104 and whether continued
economic growth is even a realistic option.105
The three major sources of international law as recognized by Article 38 of the
Statute of the International Court of Justice (ICJ) are international conventions (treaties);
international custom, as evidence of a general practice accepted as law; and general
principles of law recognized by civilized nations.106 Judicial decisions and writings of
highly qualified publicists are considered secondary sources of law. 107 Thus, decisions of
102
GERARD VON GLAHN, LAW AMONG NATIONS (2d ed., 1970).
Rao, supra n. 13, 136-38.
104
Agenda 21. Approved by the U.N. CONFERENCE ON ENVIRONMENT AND DEVELOPMENT (UNCED) at
Rio De Janeiro, 13 June 1992. U.N. Doc. A/CONF. 151/26 (vols. I, II, & III) (1992); reprinted in part in
Guruswamy, supra n. 38 at 187. See also William L. Andreen, Environmental Law and International
Assistance: The Challenge of Strengthening Environmental Law in the Developing World, 25 Colum. J.
Envtl. L. 17 at 20.
105
Andreen, supra n. 104 at n. 41. See also Browne, supra n. 62. See also Kiss and Shelton, supra n. 17 at
20. “[The] emphasis on free trade in goods and services in the economic system raises problems of
competitive disadvantages and opposition to trade barriers resulting from environmental protection.” Id.
106
Statute of the International Court of Justice. Concluded at San Francisco, 26 June 1945. Entered into
force, 24 October 1945. 1976 Y.B.U.N. 1052, 59 Stat. 1031, T.S. No. 993; reprinted in Guruswamy, supra
n. 38 at 36.
107
Id.
103
18
the ICJ are not binding except on those parties and those matters of the particular case. 108
The traditional subjects of international law were states,109 as opposed to private actors
such as individuals, corporations, inter-governmental organizations (IGOs) and nongovernmental organizations (NGOs). However, with increased globalization110 and power
of transnational corporations and other groups, non-state actors are taking on increasing
roles in the international legal arena.111
With regard to the search for punitive damages for oil pollution in international
law, the discussion could well end with the statement made above that punitive damages
are generally unavailable in international law, being considered against public policy in
civil law countries.112 However, it is worthwhile to at least survey the regulatory scheme
internationally. Doing so reveals the potentialities, or lack thereof, of punitive damages in
the international arena. Once the lay of the land is known, integration and convergence
strategies can be applied.
Positivists would advocate that the discussion should begin with treaties, and
perhaps end there too.113 One not familiar with the workings of treaties would assume
that a written law, signed with pomp and circumstance, would be the final word in
international law. The problem is that they ultimately hold an element of choice, their
power being derived completely from the will of sovereign states to abide by treaty
law.114 However, the principle of pacta sunt servanda115 keeps signing nations somewhat
108
Id. at 39 (Article 59).
Von Glahn, supra n. 102 at 134-37.
110
Stephan Hobe, The Era of Globalisation as a Challenge to International Law, 40 Duq. L. Rev. 655
(2002).
111
Id. at 657.
112
Gotanda, supra n. 6.
113
Kiss and Shelton, supra n. 17 at 23.
114
Id.
109
19
in check, and political pressure can be brought to bear for states that violate their
provisions.116 Even so, scholars have named the practice of signing a treaty and then not
complying with the provisions as “free-ridership” in the area of environmental law:117
Various trade measures contained in some international agreements are
either too weak in their specifications or in their implementation, or both.
Besides, measures to ensure compliance with these provisions do not
normally attract any sanctions or penalties for non-complying parties. This
tends to perpetuate regimes of free-ridership rather than responsible
environmental partnership. To bring about such a partnership,
considerable additional clarifications are required of the existing soft laws
and binding hard laws. The GATT/WTO regime remains the most
important international trade regime, but its integration of environmental
factors in trade activities is still very feeble.118
An even greater buffer between enforcement and compliance is that in traditional
international law, because only states have official standing, a wrongful act must be
attributed to a state for state responsibility to arise.119 The obligation is thus described:
“[t]he state must first exercise “due diligence” to prevent conduct which, if the state were
the actor, would breach international obligations.”120 Then do issues of causation and
damages arise. However, before a state will become involved, it is generally accepted that
local remedies must be exhausted.121 Even so, it is said that “[t]he field of oil pollution is
governed by treaties.”122
“ Latin, agreements must be kept,” BLACK’S LAW DICTIONARY 1133 (7th ed. 1999); See also Rao, supra
n. 13 at 163 ( Article 27 of the 1969 Vienna Convention on the Law of Treaties: “A party may not invoke
the provisions of its internal law as justification for its failure to perform a treaty.”, VIENNA CONVENTION
ON THE LAW OF TREATIES, concluded at Vienna 23 May 1969, entered into force, 27 January 1988, 1156
U.N.T.S. 331), reprinted in Guruswamy, supra n. 38 at 60.
116
Rao, supra n. 13 at 263.
117
Id. at 294.
118
Id.
119
Guruswamy, supra n. 39 at 340.
120
Brian D. Smith, STATE RESPONSIBILITY AND THE MARINE ENVIRONMENT: THE RULES OF DECISION 34,
36-43, (1988) reprinted in Guruswamy, supra n. 39 at 366.
121
Guruswamy, supra n. 39 at 340. See also Articles 5-10 to the International Law Commission’s Draft on
State Responsibility, INTERNATIONAL LAW COMMISSION DRAFT ARTICLES ON STATE RESPONSIBILITY,
Adopted by the International Law Commission on 12 July 1996, Report of the International Law
Commission on the Work of Its Forty-eighth Session. U.N. Doc. A/51/10 and Corr. 1, Pp. 125-151;
115
20
Even though tankers had been in existence for quite some time, the first treaty
designed to prevent oil pollution, the International Convention for the Prevention of Oil
Pollution, (OILPOL), was not signed until 1954. This has since been superseded by the
Protocol of 1978 Relative to the International Convention for the Prevention of Pollution
from Ships, (MARPOL).123 MARPOL is considered one of the most effective regulatory
treaties, operating on a basis of permits.124 Other vessel-source pollution is handled under
the auspices of the 1958 Convention on the High Seas125 and the 1958 Convention on the
Territorial Sea and Contiguous Zone.126 Land-based oil pollution in the North Sea and
Barents Sea is governed by the Paris Convention, having provisions where contracting
parties are able to settle disputes among themselves.127 The 1958 Continental Shelf
Convention has a global reach and also applies to offshore installations.128 However, it is
reprinted in Guruswamy, supra n. 38, 86. See also C.F. Amerasinghe, LOCAL REMEDIES IN INTERNATIONAL
LAW 359-361 (1990), reprinted in Guruswamy, supra n. 39 at 371 (local remedies rule can be excused if
there is no reasonable recourse, including administrative remedies; author Ian Brownlie cites Finnish Ships
Arbitration, (1934), RIAA iii 1479 and Norwegian Loans Case, ICJ Reports 157-39, Fitzmaurize, 37 B.Y.
(1961) 59-64. Id.).
122
Guruswamy, supra n. 39 at 343.
123
Vogler, supra n. 14 at 62. (OILPOL: THE INTERNATIONAL CONVENTION FOR THE PREVENTION OF OIL
POLLUTION, (1954); MARPOL 73/78: PROTOCOL OF 1978 RELATING TO THE INTERNATIONAL CONVENTION
FOR THE PREVENTION OF POLLUTION FROM SHIPS, 1973. Concluded at London, 17 February, 1978. Entered
into force 2 October 1983. I.M.C.O. Doc TSPP/CONF/11, 1341 U.N.T.S. 3; reprinted in Guruswamy,
supra n. 38, 647.
124
Brubaker, supra n. 14 at 62.
125
Id. at 117-131; 1958 Convention on the High Seas: CONVENTION ON THE HIGH SEAS. Concluded at
Geneva, 29 April 1958. Entered into force, 30 September 1962. 450 U.N.T.S. 82, 13 U.S.T 2312, T.I.A.S.
No. 5200; reprinted in Guruswamy, supra n. 38 at 595.
126
Brubaker, supra n. 14 at 117-131. Convention on the Territorial Sea: Convention on the Territorial Sea
and Contiguous Zone. Concluded at Geneva, 29 April 1958. Entered into force, 10 September 1964. 516
U.N.T.S. 205, 15 U.S.T. 1606, T.I.A.S. No. 5639; reprinted in Guruswamy, supra n. 38 at 605.
127
Brubaker, supra n. 14 at 99; The Paris Convention: Convention: CONVENTION FOR THE PREVENTION OF
MARINE POLLUTION FROM LAND-BASED SOURCES, concluded at Paris, 4 June 1974. Entered into force, 6
May 1978; reprinted in Guruswamy, supra n. 38 at 707.
128
Brubaker, supra n. 14 at 90-91; The 1958 Continental Shelf Convention: 499 U.N.T.S. 311 (1964).
21
considered that “both the sources of pollution and continental shelf seabed pollution is
lacking internal control in most of the world.”129
The 1967 Torrey Canyon tanker incident publicized the obstacles inherent in
resolving complex issues of liability and claims of marine oil pollution. The answer came
with the International Maritime Consultative Organization (IMCO), now IMO,
(International Maritime Organization),130 which drafted two conventions: one for civil
liability for oil pollution and the other for oil pollution casualties on the high seas.131
IMO’s function was to “pass recommendations, convene conferences, draw up
conventions, and facilitated consultations among member states.”132 They were then
replaced by another convention creating an internal fund for compensation for oil
pollution damage, followed by the Convention on the Prevention of Marine Pollution by
Dumping of Wastes and Other Matter.133 Tanker incidents continued to occur,134 and in
1982, UNCLOS came into being (U.N. Convention on the Law of the Sea).135 UNCLOS
is described as “innovative,” a codification of customary law of the sea, (to be described
further below), and was considered in Agenda 21 as the main source of maritime
pollution law.136 It had the effect of taking some of the flag-states’ “monopoly on
129
Id. at 108. (for various other miscellaneous conventions that could apply, see 100-165, for an excellent
summary).
130
Kiss and Shelton, supra n. 17 at 438-39. See also M’Gonigle, supra n. 4. (IMCO was under ECOSOC).
131
Kiss and Shelton, supra n. 17 at 438-39.
132
M’Gonigle, supra n. 4 at 240.
133
Kiss and Shelton, supra n. 17 at 439-39. See also CONVENTION ON THE PREVENTION OF MARINE
POLLUTION BY DUMPING OF WASTES AND OTHER MATTER. Concluded at Washington, 29 December 1972.
Entered into force, 30 August 1975. 1046 U.N.T.S. 120, 26 U.S.T. 2403, T.I.A.S. No. 8165; reprinted in
Guruswamy, supra n. 38 at 638.
134
Brubaker, supra n. 14 at 26. (chart of tanker spills).
135
UNITED NATIONS CONVENTION ON THE LAW OF THE SEA. Concluded at Montego Bay, 10 December
1982. Entered into force, 16 November 1994. U.N. Doc. A/CONF.62/122; reprinted in Guruswamy, supra
n. 38 at 748.
136
M’Gonigle, supra n. 4 at 249; Kiss and Shelton, supra n. 17 at 440. See also Guruswamy, supra n. 39 at
342 (UNCLOS “is emerging as a constitution of the oceans”Id.); (Agenda 21 was an action plan developed
at UNCED, 1992. Id. at 326)
22
jurisdiction” away, taking over most of the powers of inspection, investigation, and
prosecution of oil spills.137 Then came the International Convention on Civil Liability for
Oil Pollution Damage138 and the International Convention on the Establishment of an
International Fund for Compensation for Oil Pollution Damage, in 1992.139
These are the principal international treaties. The oil industry supplemented them
with private systems for clean up costs.140 These and other regional treaties did not make
the states more responsible; they transferred strict liability to the owner, corporate or
otherwise, of the vessel.141 The good news is that this “Polluter Pays Principle”142 is an
expression of integration; a way of strengthening diplomatic efforts to combat oil
pollution. The bad news is that in reality, states will not litigate on the basis of state
responsibility for political reasons.143 In addition, strict liability limits damages
recoverable to basically actual damages.144
M’Gonigle, supra n. 4 at 201.
INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR OIL POLLUTION DAMAGE, 1992. Concluded at
London, 27 November 1992. Entered into force 30 May 1996, reprinted in Guruswamy, supra n. 38 at 877.
139
International Convention on the Establishment of an International Fund for Compensation for Oil
Pollution Damage, 1992. Concluded at London, 27 November 1992. Entered into force, 30 May 1996;
reprinted in Guruswamy, supra n. 38 at 889.
140
Brubaker, supra n.14 at 159-60. (TOVALOP, CRISTAL, LOT, COW).
141
Guruswamy, supra n. 39 at 343. See also M’Gonigle, supra n. 4 at 194. See also INTERNATIONAL LAW
COMMISSION DRAFT ARTICLES ON INTERNATIONAL LIABILITY FOR INJURIOUS CONSEQUENCES ARISING
OUT OF ACTS NOT PROHIBITED BY INTERNATIONAL LAW. ADOPTED BY THE INTERNATIONAL LAW
COMMISSION, 30 May 1989. Report of the International Law Commission on the Work of Its Forty-First
Session, U.N. GAOR, 44th Sess., Supp. No. 10, at 222, U.N. Doc. A/44/10 (1989); reprinted in
Guruswamy, supra n. 38 at 81; strict liability: “Liability that does not depend on actual negligence or intent
to harm but that is based on the breach of an absolute duty to make something safe.” BLACK’S LAW
DICTIONARY 926 (7th ed. 1999).
142
Birnie and Boyle, supra n. 39 at 292. “OECD’s (Organisation for Economic Co-operation and
Development) Polluter Pays Principle is intended to ensure that the costs of dealing with pollution are not
borne by public authorities but are directed to the polluter.”Id.; (Polluter Pays Principle was first stated in
the 1972 OECD Recommendation of the Council on Guiding Principles Concerning International
Economic Aspects of Environment Policies—See Rao, supra n. 13 at 277).
143
Id. at 345-46 (citing the Mines de Potasse d’Alsace case). (unrelated to oil pollution, but a particularly
obvious case of a state refusing to pursue claims is the Chernobyl incident; also see the Sandoz Fire, in
Guruswamy, supra n. 39 at 337 and 345).
144
Patricia W. Birnie & Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 150-54 (1992),
reprinted in Guruswamy, supra n. 39 at 374.
137
138
23
Further, if states are to act as proxy for individuals, they must make the decision
to assert claims for them, and this is just not happening. 145 The Trail Smelter Case stands
virtually alone in environmental law where a state pursued a claim and reparations were
paid.146 As Birnie and Boyle put it: “In environmental disputes, states will be primarily be
concerned with preventing anticipated injury in breach of obligations, securing adequate
guarantees against repetition, or obtaining compensation for environmental injury. It must
be remembered that restitution of the environment may often be impossible,
impracticable, or not economically justifiable.”147 Thus, “compliance mechanisms as a
complete substitute for adversarial processes” are not useful.148
The type of remedies available under the regime of treaty law sound quaint when
compared to the prospect of obtaining punitive damages:
Generally, awards available for damages include monetary compensation
for actual injury or damage suffered, restitution, monetary compensation
for non-material damage, and satisfaction, which includes apologies,
ceremonial honours, or a Court declaration. Possible defenses include
extinctive prescription, acquiescence and waiver…assumption of risk and
contributory negligence, force-majeure applying to acts of war and to
insurrection and civil war, military necessity at times in particular
contexts, and self defense including collective and defense of third states.
. ..149
145
Brubaker, supra n. 14 at 63; See generally Peggy Rodgers Kalas, International Environmental Dispute
Resolution and the Need for Access by Non-State Entities, 12 Colo. J. Int’l Envtl. L. & Pol’y 191 (2001).
See also Dinah Shelton, The ILC’s State Responsibility Articles: Right Wrongs: Reparations in the Articles
on State Responsibility, 96 A..J.I.L 833, 834 (2002).
. . .[T]he virtual absence of interstate cases in subject areas such as human rights and
environmental law suggest that the rules on reparations are more likely to be invoked in
proceedings involving non-state actors, where reparations may be essential to the lives or
livelihoods of those injured. Id.
146
Shelton, supra n. 145 at 854-55 (citing The Trail Smelter Case, (U.S./Can.), 3 R.I.A.A. 1905, 1931
(1938, 1941)).
147
Patricia W. Birnie and Alan E. Boyle, International Law and the Environment, 150-54 (1992), reprinted
in Guruswamy, supra n. 39 at 372.
148
Shelton, supra n. 145 at 856. Cf. Keith N. Hylton, When Should We Prefer Tort Law to Environmental
Regulation?, 41 Washburn L.J. 515.
Brubaker, supra n. 14 at 60-61. “The area of liability and compensation [in international law] is
characterized by customary law provisions.”Id. at 60.
149
24
Even the wording in UNCLOS, heralded as a fine achievement in international
law, is weak and indefinite with regard to reparations: “[states must] ensure that recourse
is available in accordance with their legal systems for prompt and adequate compensation
and other relief in respect of damage caused by pollution of the marine environment by
natural or juridical persons under their jurisdiction.”150 As in American regulatory law,
the next best thing to punitive damages in the treaty regime is a fine. 151 The nations at the
1962 Conference on Oil Pollution balked at setting target levels for fines, only requiring
them to be “adequate in severity.”152 Worse then feeble penalties, states do not appear to
be enforcing the sanctions they do have.153
Thus, Shelton describes the remedies in international law as kind of an
afterthought.154 Further, the system is vague and confusing: “. . .the various and
potentially conflicting aims of compensatory justice, deterrence, and punishment that
could provide a coherent basis for developing detailed rules are largely unexamined . . .
This gap leaves open the question of why and to what extent reparations should be
afforded.”155 The result is a deleterious effect on deterrence.156
The systemic failures of traditional environmental law threaten to impact any
claim made for environmental pollution. The political nature of treaties, the problem of
“free-ridership,” and the fact of state sovereignty is a framework that works against
150
Article 235(2), UNCLOS, supra n. 134. (the reader is invited to examine the afore-mentioned
instruments for wording that is any stronger).
151
See generally Ronald B. Mitchell, INTENTIONAL OIL POLLUTION AT SEA—ENVIRONMENTAL POLICY
AND TREATY COMPLIANCE (1994).
152
Id. at 167. (citing Article VI(2) OILPOL 54/62.
153
Id. 323.
154
Shelton, supra n. 145 at 836.
155
Id. at 837.
156
Patricia W. Birnie and Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 150-54 (1992),
reprinted in Guruswamy, supra n. 39 at 372-73.
25
obtaining reparations. The reparations themselves are limited by a strict liability regime.
Because we cannot simply “wish away state sovereignty,”157 the complexities of the
environment and the laws surrounding it must be leveraged to create a new, more
effective procedure for the pursuit of damages.
Obstacles to Adjudicating Private Environmental Claims
Confrontation is anathema to the diplomatic world. Perhaps that is why there are
so few international environmental cases, and only one where reparations were actually
paid.158 Mediation, Good Offices, Conciliation, and Inquiry are preferred methods of
settling disputes.159 Obviously, the question of punitive damages would not come up in
those settings.
And just as there is no single instrument handling the international rules of state
responsibility for pollution,160 neither is there one tribunal.161 UNCLOS allows disputes
to be resolved in more than one way: the International Tribunal for the Law of the Sea
(ITLOS); the ICJ; and arbitral tribunals, including a special arbitral tribunal under Article
287.162 The World Trade Organization (WTO) utilizes the Dispute Settlement
Understanding (DSU),163 while many environmental treaties make no provisions at all for
157
Robert McLaughlin, Improving Compliance: Making Non-State Actors Responsible for Environmental
Crimes, 11 Colo. J. Invtl. L. & Pol’y 377, 401. (the World Bank’s project in Brazil is often cited as an
environmentally “unsound project” which private parties were unable to block).
158
Kiss and Shelton, supra n. 17 at 600 (Trail Smelter Case)(Trail Smelter was only a compromis; not a
verdict.) See also Editors of the Harvard Law Review, Trends in International Environmental Law 19-28,
(1992), reprinted in Guruswamy, supra n. 39 at 349.
159
Patricia W. Binrnie & Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 179-86 (1992),
reprinted in Guruswamy, supra n. 39 at 200.
160
Kiss and Shelton, supra n. 17 at 606-07.
161
Editors of the Harvard Law Review, Trends in International Environmental Law 19-28, (1992),
reprinted in Guruswamy, supra n. 39 at 349, ( “. . . [n]o operational system for adjudicating liability has
emerged. The ICJ has heard only one dispute of note, The Nuclear Tests Case.” Id.)
162
Kiss and Shelton, supra n. 17 at 603.
163
Id. at 605.
26
disputes.164 A few, like UNCLOS, offer the option to use the ICJ or arbitration.165 “This
pattern is consistent with the view that international adjudication, based on rules of
international law, has too many disadvantages in an environmental context to be widely
attractive to states as a primary means of dispute settlement.”166 ICJ’s seven-member
chamber established specifically for hearing environmental cases has never been used,167
and ICJ’s jurisdiction in general is based on consent.168
It bears emphasizing that it is state actors that have access to these forums, and
the disputes would largely involve treaty compliance.169 Further, as already shown,
“decisions to prosecute claims based on state responsibility are taken only in rare
circumstances and victims are often held hostage to the politics of their own country.”170
The provision in UNCLOS that most approximates punitive damages is Article
230, which allows criminal sanctions for willful and serious acts of pollution within the
territorial sea.171 Some scholars propose creating a regime of criminal penalties, in
answer to the weak nature of international environmental law.172 Similarly, the
International Law Commission has suggested that some environmental disasters are so
serious as to warrant the category of criminal behavior.173 Although this would not
164
Patricia W. Birnie & Alan E. Boyle, INTERNATIONAL LAW AND THE ENVIRONMENT 179-86 (1992)
reprinted in Guruswamy, supra n. 39 at 197.
165
Id.
166
Id.
167
Kiss and Shelton, supra n. 17 at 601.
168
Article 36, STATUTE OF THE INTERNATIONAL COURT OF JUSTICE. Concluded at San Francisco, 26 June
1945. Entered into force, 24 October 1945. 1976 Y.B.U.N. 1052, 59 Stat. 1031, T.S. No. 993; reprinted in
Guruswamy, supra n. 38 at 30.
169
Kiss and Shelton, supra n. 17 at 447. (UNCLOS “identifies three states competent to exercise
jurisdiction over matters of marine pollution: flag states; port states, and coastal states.” Id.).
170
Guruswamy, supra n. 39 at 342.
171
Id. at 450.
172
Neal Shover and Aaron S. Routhe, Environmental Crime, in CRIME AND JUSTICE—A REVIEW OF
RESEARCH 321, 353 (Michael Tonry, Ed., Vol. 32 2005).
173
Kiss and Shelton, supra n. 17 at 606. See also THE DRAFT CODE OF CRIMES AGAINST THE PEACE AND
SECURITY OF MANKIND, First adopted by the U.N. Law Commission, 4 December 1954. G.A. Res. 46/405,
27
necessarily make available punitive damages, the discussion of criminality points to
private actors as the culprits.174 McLaughlin advocates obtaining jurisdiction under the
International Criminal Court, which would represent a significant shift away from
traditional international law.175 He calls the current condition of the law a “crippling
paradox,” where non-state actors, the source of the pollution, do not come under the
jurisdiction of any one of the states sharing in harm.176 In proposing the use of the ICC,
he strongly advocates the concept of “universal jurisdiction” that already exists over
certain criminal behavior.177 He admits that it will require “political will” of the states to
make such a change in international environmental law.178
Integration and Convergence
Thus, there exists a vacuum in international environmental law with regard to
effective, private recourse for punitive damages. If one believes that the most effective
deterrence is found in such damages, and that “[i]t is in the interest of all nations that the
environment be protected from irreparable harm,”179 then it is the obligation of the legal
community to formulate existing law, custom and principle into an effective regime for
pursuing such damages. As authors James Hickey and Vern Walker assert, “[t]he global
community needs a more specific rule of restraint adaptable to a wide range of new
environmental circumstances, rather than isolated agreements that share only a general
U.N. GAOR, 46th Sess., Supp. No. 10 at 198, U.N. Doc. A/46/405 (1991); reprinted in Guruswamy, supra
n. 38 at 1378.
174
See generally McLaughlin, supra n. 157.
175
Id.
176
Id. at 387.
177
Id. at 390.
178
Id. at 409.
179
Natalie Bridgeman, Human Rights Litigation Under the ATCA as a Proxy for Environmental Claims, 6
Yale H.R. & Dev. L.J. 1 at 41(2003).
28
preference for pollution prevention.”180 Something more is needed to discourage the
“race to the bottom,”181 where nations forum-shop for favorable flags-of-convenience.
Since the United States squarely supports the rendering of punitive damages, it is
logical to consider how U.S. courts can be utilized for international environmental goals
of punishment and deterrence. Natalie Bridgeman argues quite convincingly, in Human
Rights Litigation Under the ATCA as a Proxy for Environmental Claims,182 that the Alien
Tort Claims Act (ATCA) can be utilized with regard to pursuing foreign environmental
claims.183 Since integration has become an accepted concept in U.S. domestic law, it begs
the question why we cannot grant greater access to foreign claims in the name of
environmental protection. In this way, U.S. domestic law could converge effectively with
international regimes, promoting the various jus cogens of environmentalism that are
already recognized in American jurisprudence.184 In this way, the remedy of punitive
damages could become available to the rest of the world.
Bridgeman’s detailed analysis is beyond the scope of this paper. However, it
deserves a brief explanation. ATCA was a creation of the Judiciary Act of 1789, and had
originally been used for the slave trade, war crimes and piracy. 185 Using this in the 1995
landmark case, Kadic v. Karadzic,186 the court held that ATCA applies to violations of
180
James Hickey, Jr. and Vern R. Walker, Refining the Precautionary Principle in International
Environmental Law, 14 Va. Envtl. L.J. 423, 426 (1995).
181
Peggy Rodgers Kalas, International Environmental Dispute Resolution and the Need for Access by NonState Entities, 12 Colo. J. Int’l. Envtl. L. & Pol.’y 191, 195 (2001).
182
Bridgeman, supra n. 179.
183
Alien Tort Claims Act, 28 U.S.C. 1350 (1994). “The district courts shall have original jurisdiction of
any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the
United States.” Id.
184
Restatement (Third) The Foreign Relations Law of the United States, Part VI, The Law of the
Environment.
185
Bridgeman, supra n. 179 at 8.
186
70 F. 3d 232 (1995).
29
customary international law by non-state actors.187 The key, however, is to have the
acceptance of international environmental customary law as customary law. This should
not be such a leap, as several authors agree that UNCLOS, for example, has become
customary law.188 The courts are not yet in agreement on this point, and she asserts three
alternative theories under which foreign claims may be pursued. However, she concludes
that the avenue through ATCA seems the clearest.189
Most importantly, she notes, “compensatory and punitive damages have been
awarded in numerous ATCA cases, but few of the plaintiffs have collected on the
judgments.”190 This is more to do with the type of claim, and the seeking of enforcement
abroad, than it does with any conclusion that they are not supported in our courts. As
Bridgeman writes, it would be quite a different story with corporations enjoying the
protection of our laws, than it might be a war criminal, who “[is] essentially estopped
from having further contacts with the United States.”191
The doctrine of forum non-conveniens presents yet another obstacle to effective
use of ATCA. Some believe that it is only a matter of time before U.S. courts begin to see
the value of access to our forum, and will allow egregious cases of environmental
damage to be heard.192 Ironically, in the flight from the political environment of
international law, the law arrives at what is essentially a political fight in the United
States, framed in terms of duty and morality: “The United States’ duties as a member of
187
Bridgeman, supra n. 179 at 8.
Davor Vidas, The Antarctic Treaty System and the Law of the Sea: A New Dimension Introduced by the
Protocol, in GOVERNING THE ANTARCTIC: THE EFFECTIVENESS AND LEGITIMACY OF THE ANTARCTIC
TREATY SYSTEM, 61, reprinted in Guruswamy, supra n. 39 at 415.
189
Bridgeman, supra n. 179 at 2.
190
Id. at 38.
191
Id. at 39.
192
See generally, Kalas, supra n. 145. See also Katherine Lee Boyd, The Inconvenience of Victims:
Abolishing Forum Non Conveniens in U.S. Human Rights Litigation, 39 Va. J. Int’l. 41, 82 (1998).
188
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the international community also override convenience considerations. Particularly given
the United States’ sparse record in ratifying human rights treaties, the U.S. has a
compelling interest in enforcing customary international legal standards in its domestic
courts.”193
Scholars recognize that there is evidence of convergence in the area of punitive
damages, apart from environmental law.194 Although pessimistic as to punitive damages,
Mullenix recognizes the converging nature of law today: “The globalization of legal
practice will have other consequences. As complex legal problems transcend national
borders, American procedural law may well converge with the adjective law of civil law
systems. The pronounced differences between Anglo-American procedure and civil law
countries may fade or merge as each system learns from the experiences of the other.”195
The doctrines of Monism and Dualism in international law could one day become almost
irrelevant.196 With the “globalization of justice,” the deterrent tool of punitive damages
could become available, and in the area of oil pollution prevention, nothing could be
more welcome to environmentalists. As Watters so eloquently describes it,
“Environmental law is a dynamic force in convergence and an important
prism though which to examine the larger process of globalization. The
international dialogue regarding globalization is well served by increasing
focus on common interests, including shared approaches to environmental
law. By consciously working together to shape convergence, nations have
the opportunity to influence each other and profoundly alter environmental
law. Through cooperation, convergence raises the prospect for new realms
193
Katherine Lee Boyd, The Inconvenience of Victims: Abolishing Forum Non Conveniens in U.S. Human
Rights Litigation, 39 Va. J. Int’l. 41, 82 (1998).
194
Mullenix, supra n. 5 at 12.
195
Id. at 4.
196
Ian Brownlie, PRINCIPLES OF PUBLIC INTERNATIONAL LAW, ASSERTING that Monism is “supreme even
within the municipal sphere,” reprinted in Guruswamy, supra n. 39 at 207- 208.
31
of protection for the environment at the national, regional, and
international level.197
Thus, there is hope for an “international consensus law” that could put teeth into
the current well meaning but frail oil pollution regime that operates internationally. By
borrowing from the United States some of its best self, i.e. its concern for the
environment; its willingness to punish egregious behavior; its courts, the world as a
whole could profit for generations to come. Through the application of ATCA, one our
oldest laws, to an area of law that can only be described as avant-garde, a new system of
environmental protection could evolve.
Moreover, why should this evolution not occur? As Hobe has written, “[I]t will
always remain the function of the state to transport values from the domestic order to the
supra-national and international legal orders, as well as to be open to input from the
international legal orders to the domestic scene.”198 In examining the environmental laws
of oil pollution, it is obvious that more needs to be done in creating a deterrent regime of
oil pollution prevention beyond that of international regulatory law. Using existing tools
of integration and convergence, international environmental law can be transformed into
international environmental consensus law, and the remedy of punitive damages for
preventable catastrophes could become available.
197
Lawrence Watters, BOOK REVIEW: Understanding the Framework: Convergence and Environmental
Law in an International and Comparative Context. A Book Review—PROTECTING OUR ENVIRONMENT:
GERMAN PERSPECTIVES ON A GLOBAL CHALLENGE, 14 Geo. Int’l Envtl. L. Rev. 151, 177.
198
Stephan Hobe, The Era of Globalisation as a Challenge to International Law, 40 Duq. L. Rev. 655
(2002).
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