MT Princess Empress charterer not liable but should've assessed shipping firm

MANILA, Philippines – The charterer of the MT Princess Empress is not liable for the oil pollution damage from the sunken vessel, but it should have undertaken “due diligence” of the company it contracted to transport over 800,000 liters of industrial fuel oil, a regulatory official said.

In an interview on ANC Headstart on Friday, March 17, Maritime Industry Authority (MARINA) spokesperson Sharon Aledo said that under the Oil Pollution Compensation Act of 2007, the charterer is not liable for pollution damage.

However, when asked by host Karen Davila whether it’s the charterer’s job to check the records and background of the shipping company it hired to transport its cargo, Aledo replied, “They should have exercised due diligence in this regard.”

Rappler reported on March 13 that SL Harbor Bulk Terminal Corporation, a subsidiary of San Miguel Shipping and Lighterage Corporation, chartered RDC Reield Marine Services (RDC), owner of MT Princess Empress, to ship 900,000 liters of industrial fuel oil, also called “black oil” which is considered toxic.

MT Princess Empress left SL Harbor Terminal, a private port operated by SL Harbor Bulk Terminal Corporation, in the early morning of February 28, but capsized and sank off Oriental Mindoro later that day.

When Davila asked Aledo to confirm Rappler’s story that the San Miguel Shipping subsidiary was the charterer, the MARINA legal chief reiterated what she had told Rappler in an email interview, that MARINA was only informed by RDC that MT Princess Empress left SL Harbor Terminal.

“I lament the ongoing problem of our affected communities, but MARINA is in no position to determine the liability of the carrier. We only received direct information from the shipowners’ representatives that the loading port was SL Harbor Bulk Terminal Corp in Limay, Bataan,” she said.

“We’ve received no records of any charter contracts or any document as these are not requirements for an amendment of the Certificate of Public Convenience (CPC) of the shipowner,” Aledo added.

Rappler has asked the camp of conglomerate San Miguel Corporation (SMC) several times to confirm or deny this information, but it has yet to respond as of posting. Rappler applied to participate in SMC’s analysts’ public briefing on Thursday, March 16, hoping to get information from the conglomerate, but the application was not approved.

This writer has also challenged San Miguel Corporation president Ramon Ang, the Philippines’ 9th richest individual, to show his “malasakit” or concern for the more than 30,000 families or over 100,000 people affected by the oil spill in Mindoro, Palawan, and Antique, but he has yet to respond to this call. The conglomerate trumpets “malasakit” as one of its core values.

The Philippine Stock Exchange, where SMC shares are publicly traded along with its other listed companies – Petron Corporation, San Miguel Food and Beverage, Ginebra San Miguel – has apparently not asked the conglomerate to comment on reports that one of its subsidiaries, although not listed, chartered the sunken oil tanker. SMC has not made any disclosures on this as of posting. Petron, however, has issued a statement denying ownership of the industrial fuel oil of MT Princess Empress.

Is a ship made of scrap allowed?

The responsibility of the charterer of MT Princess Empress in the oil spill could become a major issue in light of information that has emerged about the shipowner, following the disaster.

A Senate hearing on Tuesday, March 14, discovered that RDC’s license to operate MT Princess Empress was invalid, making MT Princess Empress a “colorum” or unlicensed vessel that should not have been allowed to sail. Aledo, on Friday, said that RDC should be held liable for this, but that this will be determined after due process.

On Thursday, March 16, Justice Secretary Jesus Crispin Remulla disclosed that MT Princess Empress was not brand new as the company reported, and that it was made out of scrap materials. He also said it has been rebuilt at least twice – modified to be a liquefied petroleum gas carrier and an oil tanker.

RDC declared MT Princess Empress to be a new tanker that it acquired in 2022.

In the Friday ANC Headstart interview, Aledo said the use of recycled materials to make a cargo vessel is allowed by MARINA, which is mandated to ensure that ships are safe for people and the environment.

“[Metal] Plates, for instance, and machineries, may be reused to form a new ship. We have policies in MARINA to that effect. So it doesn’t necessarily follow that plates, for instance, and other machineries are reused, they are made out scrap…or the ship would be made out of scrap materials,” she said.

Despite the MT Princess Empress being made out of such materials, Aledo said its “safety records” were in order. However, she added that MARINA was already undertaking investigations on whether its regional personnel were remiss in their enforcement duties.

“As far as MARINA is concerned, we’re already conducting an administrative inquiry even on private parties – the shipowner, the naval architects involved in the construction [of the ship], the marine surveyors, we’ve also summoned the classification society…,” she said.

Philippine Coast Guard spokesman Armand Balilo, in previous interviews, said MT Princess Empress was not overloaded despite carrying over 800,000 liters of oil, based on its capacity.

Verde Island under threat

The oil tanker is submerged around 300 meters off Oriental Mindoro, and the province is expected to be the worst hit by the oil spill based on simulation done by the UP Marine Science Institute (UP MSI). The biodiverse Verde Island Passage (VIP) is under threat.

“Due to the weakening Amihan, some of the oil may flow northwards towards other areas of the Verde Island Passage by March 16, affecting coastal areas of Calapan, Verde Island, and some parts of Batangas. The oil spill threatens the global center of marine biodiversity located in the Verde Island Passage (VIP),” the UP MSI said.

“The VIP is the body of water between Batangas and Mindoro and it has the highest concentration of coastal fishes, corals, crustaceans, mollusks, seagrasses, and mangroves. The VIP is also home to endangered and threatened species including the critically endangered hawksbill turtle, whale sharks, manta rays, dugongs, humphead wrasses, giant groupers, and giant clams.”