Oriental Mindoro oil spill

Princess Empress not insured for $1 billion; only $284 million for compensation – DOJ official

Isagani de Castro Jr.

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Princess Empress not insured for $1 billion; only $284 million for compensation – DOJ official

FOUND. The MT Empress Princess found in the waters of Naujan, Oriental Mindoro, on March 21, 2023.

Philippine Coast Guard

As of April 26, damage to fisheries and losses suffered by fisherfolk has reached P3.8 billion, roughly one-fourth of the maximum coverage, with oil still leaking from MT Princess Empress

MANILA, Philippines – The Philippines can only get $284 million or roughly P15.7 billion, not $1 billion or P55.56 billion, from the insurers of MT Princess Empress and from the International Oil Pollution Compensation Funds (IOPC), a government official said on Wednesday, April 26. 

In an interview with the ABS-CBN News Channel, Justice Undersecretary Raul Vasquez disclosed this amount following a meeting on Tuesday with director Gaute Sivertsen, head of the IOPC, an international organization whose mandate is to assist member states that suffer from oil spills.  

“The maximum coverage for the oil spill, based on the IOPC, is only up to 203 million SDR [Special Drawing Rights] or US$284 million. It’s not $1 billion, as earlier mentioned and floated around,” Vasquez said. 

Following the sinking of MT Princess Empress on February 28, the owner of MT Princess Empress, RDC Reield Marine Services, told the Maritime Industry Authority (MARINA) that it was insured for $1 billion or P55.56 billion.  

This amount was also mentioned in a Senate hearing on the oil spill on March 14 or two weeks after the sinking. Several senators then expressed the view that RDC may not be able to claim insurance because MT Princess Empress sailed without a valid permit, but this fear turned out to be unfounded.

MT Princess Empress is insured by the Shipowners’ Club, and a claims caravan has started distributing and collecting insurance claims forms from affected fisherfolk and other people who have suffered economic losses since the sinking on February 28. This process is expected to take months.

Vasquez said all persons and entities affected by the oil spill can claim insurance. These include government agencies like the Coast Guard that are doing cleanup operations. 

He said the Philippines is not qualified for the maximum coverage of $1 billion because it is not yet a signatory to the Supplementary Fund, an international convention meant to provide additional funds for member states in case the maximum coverage provided by an earlier convention, the 1992 Fund, is breached. 

As of April 26, almost a month after the sinking of MT Princess Empress, total damage to agriculture has reached P3.8 billion, according to the National Disaster Risk Reduction Management Council (NDRRMC). This is almost one-fourth of the P15.7 billion ($284 million) available from the insurer and the IOPC.

Source: National Disaster Risk Reduction Management Council Situational Report on the Mindoro oil spill, as of April 26, 2023

Since the government has imposed fishing and diving bans in many areas in Oriental Mindoro, fisherfolk and tourism enterprises continue to suffer from economic losses, and the damage is expected to rise in the coming months. The environmental damage may also spread, depending on the weather.

Environment Undersecretary Jonas Leones also said last week that they couldn’t provide an accurate assessment of the damage since MT Princess Empress was still spilling oil. 

Vasquez said around 300,000 liters of Industrial Fuel Oil (IFO) could still be in the tanks and valves of the oil tanker, but this estimate was done first of week of April, when two Remotely Operated Vehicles (ROVs) – one from Japan and one from the United States Navy – attempted to bag the leaks. Those ROVs left Mindoro on April 5 and April 7, respectively.

Vasquez said the fact that the ship was still 400 meters in the sea off Naujan, Oriental Mindoro, means that it continues to spill, although perhaps at a slower rate. 

Writ of kalikasan

Meantime, Vasquez said the government intends to file a writ of kalikasan with the Supreme Court to compel those liable to immediately act on the pollution damage, considering that it is a “continuing disaster.” 

Those likely to be included in this special writ are the shipowner and even regulatory officials who approved MT Princess Empress’ permits, he said.

He expressed hopes that the damage to the environment could still be restored, and that the spill would not further affect the biodiverse Verde Island Passage nor reach the Tubbataha Reefs, a world heritage site.

Vasquez said they asked for and got a commitment from the IOPC and the insurers of MT Princess Empress to siphon the remaining oil on the ship to prevent further damage. There’s been no word, however, on when that will happen.

MT Princess Empress left the private port SL Harbor Terminal early morning on February 28 with around 900,000 liters of industrial fuel oil or IFO. It had engine trouble, encountered strong winds and rough seas, and sank off Naujan, Oriental Mindoro, later that day. It spilled most of the black oil it was carrying in the succeeding days. – Rappler.com

$1 = P55.56

Claims for oil spill damages seen to exceed Princess Empress’ insurance

Claims for oil spill damages seen to exceed Princess Empress’ insurance

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Isagani de Castro Jr.

Before he joined Rappler as senior desk editor, Isagani de Castro Jr. was longest-serving editor in chief of ABS-CBN News online. He had reported for the investigative magazine Newsbreak, Asahi Shimbun Manila, and Business Day. He has written chapters for books on politics, international relations, and civil society.