An assessment of the Mauritius Oil Spill that happened 3 months ago reveals the extent of the damage and how the insurance claims can mount upto $10 Billion, says an article published in Forbes.
Three months ago, a major oil spill by Japanese-owned vessel, The Wakashio, unleashed between 210,000 and 300,000 gallons of heavy fuel oil into Mauritius’ coral lagoons in the Indian Ocean.
Last week, some of the remaining oil that was salvaged from the Wakashio is believed to have leaked from storage tanks in the capital city into surrounding grassland close to an internationally-protected rare Ramsar bird wetlands sanctuary of the Terre Rouge Estuary. The oil had been purchased by Japanese giant, Mitsui OSK Lines, from suppliers in Singapore.
Oil associated with Wakashio leaked from newly built storage tanks close to a Ramsar protected bird sanctuary on 12 November
It now turns out that Mauritius’ claims for damages caused by the August oil spill could top $10 billion.
This would come at a much-needed time as the Indian Ocean island nation is likely considering a bailout from the IMF in order to meet its financial obligations following the oil spill.
A Landmark Environmental Case
Because of the nature of the Wakashio oil spill and the way the response was handled, it could become a landmark environmental test case that could change international shipping and environmental law. Arctic nations are particularly interested in the outcome from the Mauritius oil spill as the International Maritime Organization is currently reviewing pollution laws around Heavy Fuel Oil in environmentally sensitive areas such as the Arctic following strong criticism of the international shipping regulator.
3 Tiers of Insurance Cover
There are three tiers of insurance that cover each ship on the ocean, to cover each and every pollution incident or harm caused by shipping
At the heart of the case is whether a particular international ship pollution law known as the ‘2001 Bunker Fuel Convention,’ could lead to strict liability with unlimited limitation, i.e., no limits to what damages could be awarded to Mauritius.
Such claims would then have to be paid out from the multi-billion dollar claims sharing agreement, which is essential a large reinsurance scheme involving 80 reinsurance companies that cover global shipping and involves 20 of the world’s top 25 reinsurance firms, whose assets are over half a trillion dollars.
The high level of reinsurance cover is purchased by the International Group of P&I Clubs, based in London and which the Japan P&I Club is a member of.
Deteriorating Conditions
Mauritius is facing a sharply deteriorating economic, social and political situation, precipitating by a domestic political impasse over disputed elections and COVID-19 lockdowns. The true extent of the economic crisis facing Mauritius was only revealed in recent reports by the World Bank, the IMF, local financial firms and in statements by the Mauritian Finance Minister on October 23. This places Mauritius as one of Africa’s worst performers during the COVID-19 lockdowns, with credit rating agency Moody’s already warning investors by downgrading Mauritius’ credit rating outlook from ‘Stable’ to ‘Negative’ in April. Moody’s next update to the hard-fought Baa rating will be eagerly watched.
The Wakashio oil spill has nudged Mauritius over the economic edge, creating a macroeconomic impact on the economy with the $15 billion island economy expected to shrink by $2.1 billion this year, $500 million worse than expected since June (14.2% decline relative to 11% decline in June according to the IMF and the Mauritius Commercial Bank). A large part of this worsening situation is directly attributable to the impact of the Wakashio. Mauritius has seen the sharpest decline in GDP relative to comparable tourism-dependent countries like Seychelles and Rwanda. This is reflected in other sectors too, with industrial production plunging over 40% compared to last year according to the World Bank in its October 2020 Africa Pulse economic outlook.
Mauritius’ economic growth rate has now also become structurally weaker, being the only comparable country in Sub-Saharan Africa to have a negative Q1 and even weaker Q2 in 2020 – by far the weakest in Africa and double that of Seychelles’ decline. Tourism accounts for 23.8% of Mauritius’ GDP, when supporting businesses such as holiday car rentals, restaurants and informal beach hawkers are taken into account, which is 22% of the country’s employment and 35% of its exports and all-important foreign currency earnings.
Mauritius has seen its debt and Government[+]
WORLD BANK / AFRICA PULSE OCT 2020
The growth in Mauritius’ debt was the third worst across Africa during the coronavirus pandemic, according to the World Bank. However, the IMF believe the figures to be even worse than stated by the Government with the Budget Deficit being as high as 11.7% of GDP according to the IMF’s World Economic Outlook of October 2020 (table B9 of the Statistical Appendix). The discrepancy is due to a highly controversial measure taken by the Government of Mauritius to deplete the $2 billion of reserves (13% of GDP) from the Central Bank, which is believed is being used to balance the budget and support several large business interests in Mauritius. Mauritius’ national airline, Air Mauritius which was the fourth largest airline in Africa, was placed in administration earlier this year. The decision to deplete the reserves of the Central Bank earned the Government a rebuke from the IMF, which called it a measure of ‘last resort.’ This has now led to a controversial $300 million line of credit from the Government of India announced on November 8. This is seen as yet another controversial move by India to intervene in the domestic affairs of Mauritius, especially with strong concerns continuing to be expressed over the use of Indian Naval Officers to oversee the Mauritian Coastguard.
The poorer performance of Mauritius compared with comparable countries in Africa, is in a large part due to the effect of the Wakashio oil spill and the poorly handled response.
Such an insurance payout for the Wakashio would be over three times the size of the Mauritius Government’s usual Annual Budget of around $3 billion a year.
Four questions for Mauritius
In order to advance its claims within the three year window allowed following a bunker fuel spill, Mauritius needs to decide on three questions:
- What is the damage?
A formal Natural Resources Damage Assessment (NRDA) is needed to assess the dollar amount of damages. This relies on extensive data collection such as the oil fingerprinting of hundreds of oil samples taken every day (to see how the oil behaves in the ocean), dolphin and whale necropsies and a range of other evidence to show the human health, environmental and economic impact of the oil spill. The world’s leading experts in how to handle major oil spills, such as U.S. Department of Interior Official Rick Dawson, have been calling for this since August 15. What advice was the international organizations (including the UN’s IMO, ITOPF and the Japanese Government) providing at the time to authorities in Mauritius?
- What evidence is being collected to support this?
There are particular protocols for how evidence should be collected, especially oil samples. There should be hundreds of samples collected by now from along the 125 square kilometers of coral lagoon that has been sectioned off, in order to assess how the oil is behaving in the ocean. There are also concerns that ‘alternative facts’ are being collected on the island by the polluting entity and political elites embarrassed about their response to the oil spill, to present a narrative that the oil spill has had a less damaging impact. This is why the presence of independent and internationally recognized scientists are so important in any major oil spill response.
- What legal regime will be used to pursue claims for damages?
This will be determined by understanding the nature of the damage caused in Mauritius (i.e., oil damage, salvage damage, chemical damage if there were substances more than just oil that was powering the vessel). Given the complexity of this case, it is not just a straight forward oil spill, as the wreck has been scraping the reefs of Mauritius, causing additional destruction directly attributable to the salvage operation. The rear stern of the vessel will now not be removed until after the cyclone season at the end of February. This is a large-scale industrial incident – not one that was caused by an ‘Act of God’ from bad weather or the actions of a rogue ‘drunk’ captain (with no evidence that this was ever the case). Both leading insurer Lloyds and the Pope called for an ‘ethical response’ rather than ‘arcane’ legal arguments from the shipping industry. Indeed, several loopholes have already been identified with the Bunker Fuel Convention for Mauritius to now explore. So the choice of laws to pursue will be an important one for Mauritius’ legal team to assess.
- Who is liable?
After the initial $10 million payout by the vessel insurer (Japan P&I Club in the Wakashio’s case), the ship insurance industry is well funded for losses up to $8 billion under a re-insurance scheme called the International Group Agreement (IG Agreement for short), which the vessel insurer, Japan P&I Club is a member of. Beyond this, a third tier of reinsurance kicks in for really large claims as the Wakashio oil spill is likely to be.
SERVICES, AON SECURITIES
This is covered by 80 reinsurance companies, including 20 of the 25 largest reinsurance companies in the world like Swiss Re, Munich Re, Berkshire Hathaway, Lloyds, Allianz, whose cumulative revenues last year was over $250 billion. The assets held by these reinsurance companies are over half a trillion dollars ($605 billion). So the initial insurance payout to Mauritius should be straightforward once the damages have been accurately assessed and evidence submitted.
What then follows from the re-insurance companies is a complex set of litigation by the re-insurance industry to assess what portion of this liability lies with the vessel owner, the operator, the crew operations, the clean-up companies (who were overseen by the Japan P&I Club), the salvors, the IMO, ITOPF, as well as other actors present on the ground in Mauritius and who actively influenced decisions in the country leading up to and responding to the incident. This third part should not concern Mauritius as it will need to be resolved over many years in various Courts once the reinsurance payment has been made to Mauritius.
Understanding reinsurance in the shipping industry
A short video produced by the International Group of P&I Clubs explains how shipping reinsurance works.
Let’s explore each question in turn.
Damage estimated in the billions of dollars
Already, the damage from the oil spill is estimated in the billions of dollars. In a major oil spill, it is important to disaggregate each aspect of harm that has been caused to the environment, human health and economy of the country.
- Wakashio scraped along Mauritius’ reefs for over 1 km
Satellite analysis by global analytics firm, Windward reveal that the Wakashio scraped along Mauritius’ South Eastern barrier reef for over 1 kilometer between July 25 and August 15, when the vessel split in two. The pathway of the Wakashio over these 21 days are highlighted in red above.
This caused direct damage to the coral reefs by scraping along the ancient coral structure, and whose damage will need to be addressed under one set of international laws covering damage by a vessel.
The rear of the vessel (the stern) remains on Mauritius’ reefs, and a new team of salvors confirmed that the soonest they can remove the stern will be by mid-February, after the Southern Indian Ocean’s cyclone season. This means there will likely be more damage between now and mid-February, such as grinding of the corals from the stern and the mooring anchors and chains that are trying to keep the stern in place. This has already been reported by Japanese Government officials on September 4.
- Sediment from the reef inhibiting marine life
The sediment dislodged from the scraping of the coral reef can be seen from space (and highlighted in yellow above). Satellite and on the ground analysis reveals that the sediment has extended for dozens of square miles. Japanese scientists revealed on September 4 that visibility of the reefs had been reduced by 75% over 1.5 kilometers away from the impact site (from 20 meters to less than 3 meters). This sediment has remained as a fog within the calmer waters of Mauritius’ coral lagoons, with coral sediment particles suspended in the water, blocking the sunlight.
Mauritius’ coral reefs depend on access to sunlight for growth due to photosynthesis. This sediment would have impacted the growth of the coral at a crucial time of the year. This would also have impacted a wide variety of marine life dependent on the crystal clear waters of Mauritius’ coral lagoons.
The coral reefs of Mauritius were in the critical once a year reproduction phase, and footage of this year’s reproduction event in early November show this was clearly impacted by the Wakashio events this year.
So the damage from the suspended sediment will need to be addressed by another set of international laws and detailed scientific assessment. This is why there are questions whether the Government of Japan has sent the right specialists to Mauritius to help the country, or are trying to protect their own corporate interests.
- Chemical impact on marine life
Laboratory analysis of the fish around the lagoon reveal that they have high concentrations of cancer-causing PAH chemicals. These chemicals are highly toxic and an indicator of marine life that are stressed with the presence of chemicals from the oil spill. They can only be assessed through the collection of hundreds of specimens and active tracking of the PAH levels within each. There may need to be tests to assess other chemicals too, such as BPAs, if plastics was being mixed with the fuel.
The unexplained deaths of 52 whale and dolphins add to the chemical cocktail mystery, with over half of the necropsies revealing oil within the whales and dolphins as a contributing factor to their death. Given that the whales and dolphins do not swim within the lagoon, this implies the extent of the oil spill damage was a lot more extensive than was initially revealed and extended well beyond the lagoon.
The location of the whales for which the necropsies were performed have not been revealed, which prevents a drift analysis from being conducted that can paint a fuller picture of the extent of the chemical impact of the oil spill on marine life.
Thousands of dead sea creatures were also found at low tide at an island five miles from the Wakashio crash site, Ilot Brocus, with results from laboratory analysis not yet being released. The impact of the chemicals from the oil on marine life is covered by yet another set of international and domestic laws.
- Impact of the leaked Ballast Water
The Wakashio would have carrying almost 200,000 tons of ballast water. Ballast Water carry biological contaminants from different parts of the world that could be highly toxic. As vessels have become larger (doubling in the last decade), the risks of Ballast Water pollution have significantly increased.
These risks include marine diseases and invasive species. The IMO introduced new laws to govern the treatment of Ballast Water to prevent such biological pollution. Given the sensitivity of Mauritius’ reef systems, it would be important to track the presence of marine diseases and microorganisms that may have been released into the waters of Mauritius, and could grow to become a persistent biological risk with time.
- Tar balls from the oil
In addition to the chemicals from the oil which is often invisible, there is the visible parts of the oil.
This black substance seen compacted into the sand of the beaches and drenched around the roots of the mangroves forests, and are known as ‘tar balls.’ With the Mauritius oil spill, these tar balls would also have been trapped among the important seagrass communities and coral reefs of the lagoon. It is unclear the extent of the scientific surveying of the tar balls around the seagrass and coral habitats.
Satellite analysis reveals the likely location of the tar balls from where the highest concentrations of oil was (marked grey in the map above). On the ground evidence gathering of the tar balls (with accurate cataloguing and proof of provenance) should quickly determine where the tar balls are likely to have ended up. Again, there are questions whether Japan has the relevant scientific expertise to conduct this form of analysis. They have still not opened up the discussion in Mauritius to collaborate with leading ocean science centers in the U.S., U.K., France, Australia or Canada.
This physical damage as a direct result of the oil is covered by another set of international maritime pollution laws.
- Mishandled cleanup
One of the most controversial aspects of the oil spill response was how the clean up was (and is still) being handled. It was conducted in deep secrecy and without any independent oversight.
Almost 200 workers (mainly displaced fishermen) are still involved with cleaning the visible oil tar balls from around the roots of the mangroves. They are on short term contracts by the cleanup companies, Le Floch Depollution and Polyeco until mid-January, and funded by Japan P&I Club, a quarter of whose board are made up of executives from Mitsui OSK Lines.
Adequate health protection would need to be provided for these workers due to the extremely toxic effects of the oil on human health.
Since the clean up operation has begun, harmful algae blooms have been identified in several locations around Mauritius, raising fears that experimental chemical or biological agents were used in Mauritius, which could now cause even greater damage to the coral environment. Most notably, this was around Blue Bay Marine Park on September 5, Le Morne on September 20, and thousands of dead sea creatures were also found on September 27 on Ilot Brocus, five miles from the Wakashio’s grounding. In steps taken to hide the impact of the cleanup operations, large areas of Mauritius’ coast are now being cordoned as restricted, with strict police patrols to prevent any further independent evidence gathering.
There will need to be careful cataloguing and independent monitoring of the cleanup techniques being used (including any chemical or biological agents added to Mauritius’ sensitive marine environment), otherwise this may open risks of negligence by those responsible for funding and overseeing the cleanup operation.
Again, another set of domestic and international laws will cover this aspect of damages, as well as the conduct of the cleanup companies involved.
- Human health impact
The town of Mahebourg has a population of 15,000 and another 15,000 live along the 36 kilometers of coastline where PAH chemicals have been detected in marine life (from Le Bouchon through to Palmar just North of Isle aux Cerfs), a subsection of which is highlighted in blue above. Another 5000 volunteers, including members of Mauritius’ Special Mobile Force’ was heavily involved with the initial deployment of oil spill booms and there are 200 workers on short-term contracts funded by the vessel insurer, Japan P&I Club, who were directly exposed to the oil.
This means there are at least 35,200 who have had direct exposure to the oil, whether inhaling the chemical fumes in the air, in the water or by directly assisting the cleanup. This does not include many more who may have consumed contaminated seafood or seawater (and where the toxins can be detected using a variety of tests).
In a recent health survey by local NGO, Rezistans ek Alternativ, of the 2500 residents surveyed, 2400 of them are reporting health symptoms from the oil spill, i.e., 96% of those exposed.
A comprehensive health monitoring program will be needed along the entire South East coast of Mauritius for years to come, to understand how this type of ship oil is impacting human health. It is well studied that oil spills lead to higher rates of cancer, organ failure and are endocrine disruptors, impacting reproductive and other critical bodily organs.
Another set of laws would cover damages to human health from the oil spill.
- Sunken tugboat and front section of the Wakashio
In addition to the direct scraping of the Wakashio on Mauritius’ reefs (and ongoing scraping of the rear stern of the Wakashio), there were two sinkings associated with the Wakashio.
Deliberate sinking of the bow of Wakashio
The first was the 300 meter long bow of the Wakashio. This was controversially sunk, potentially in breach of several international laws. A full assessment of the chemical and hull risk had to have been carried out prior to the sinking for the scuttling not to have been in breach of at least six international laws. The location of the sinking is in the center of the main channel that will take debris to the coast of Mauritius as well as Mauritius’ sister island of Reunion, which is a French and European Union territory.
Understanding what was on the vessel and how the vessel was constructed will give scientists the information needed to assess the damage and impact of the sunken bow for decades to come.
Renown ocean scientist, Dr Sylvia Earle, has called for the wreck to be drawn up from the ocean floor and taken to a scrapyard under the 2007 Nairobi Wreck Removal Convention (an international law), that both Panama and Japan are parties to. Imagery of the sinking show that the bow was able to be floated and towed for several days. This means that the bow could have safely been towed to a ship-breaking yard or placed on a vessel carrier. There will be close scrutiny of who authorized the sinking to be carried out, and as the two vessel involved were by Boskalis’ Smit Salvage, the Boka Expedition and Boka Summit, both of which were Malta flagged (who are also party to these international laws), there will be questions about their role in the sinking.
A close up of videos taken of the sinking also reveal several loose items falling into the ocean just before the bow was finally submerged, raising even more questions about how thorough the operation was to ensure the safety of the vessel. 52 whales and dolphins started appearing dead along the coast of Mauritius within a day of the sinking of the front section of the Wakashio, raising even more questions about what chemicals could have been on board, and how the toxicity was being assessed when the decision was taken to sink the vessel.
Sinking of the Sir Gaetan tugboat with loss of life
The second area of damages extends to the sinking of the Wakashio salvage support vessel, the Sir Gaetan, with the loss of four lives. The insurer, Japan P&I Club was responsible for the overall salvage and oil spill clean up operation. They would then have been responsible for any other vessels contracted for the cleanup and salvage response operation, as the Sir Gaetan¸ would have been.
The Sir Gaetan sunk on August 31 following instructions to tow an oil salvage barge, the L’Ami Constant from the location of the Wakashio, back to capital city Port Louis. The bigger question for insurers to assess is why was the Sir Gaetan even needed in the first place for the salvage operation of the Wakashio, and who assessed the sea-worthiness of the Sir Gaetan to perform the tasks requested, before the vessel was engaged. The heartbreak and struggles of the families who have been left behind are highlighted in interviews in the local media, such as the interview in Mauritius’ Sunday Times on November 22 by Mariam Bheenick, the wife of the missing captain of the Sir Gaetan tugboat.
All of these damages are covered under another set of maritime laws around wrecks, safety and salvage operations.
Two additional factors make this an expensive oil spill
In addition to the damage assessment and existing laws, there are two additional factors with the Wakashio that make this oil spill particularly unique.
An experimental fuel
The Wakashio was using an experimental fuel called VLSFO. This was fuel purchased by Mitsui OSK Lines in Singapore just prior to the vessel embarking on its journey. Because of the secrecy surrounding this fuel, there may have been actions taken to prevent a comprehensive evidence-gathering effort.
If that is the case, this may attract the attention of international environmental NGOs and law enforcement officials into the conduct of each party in responding to the oil spill and evidence gathering in Mauritius.
A disputed election
Mauritius is undergoing a similar situation to the U.S. where there was uncertainty surrounding the election outcome in the immediate aftermath of the vote. Following a close victory of the incumbent, there was widespread allegations of electoral fraud, and multiple cases were presented to Mauritius’ court systems (and will eventually be heard in the British Courts, given the Constitution of Mauritius having the U.K. Privy Council as the highest court of appeal). This was unprecedented for Mauritius.
This is relevant because if the Government of Mauritius was found not to have been legitimately elected, many of the decisions and liability taken by the large corporate actors in Mauritius will be under even more scrutiny and much of the liability may pass to them of advice given and actions taken, knowing they were operating in a country in the midst of a disputed election. It would not be adequate for these corporate actors to hide behind the decision of a Government who would have been found not to have any legal standing. Decisions taken by political nominees compared with career civil servants would leave the oil spill responders particularly exposed. The Chair of the National Crisis Committee in Mauritius was the Prime Minister of Mauritius, Pravind Jugnauth, whose Government’s election was being reviewed at the time of the oil spill.
Japan has had an embassy in Mauritius since 2017, and would have been aware of the uncertainty surrounding this election. Until now, neither the Japanese Government nor the large Japanese corporate presence (the largest of which is by Mitsui OSK Lines with 32 executives on the island), have consulted with the Leader of the Opposition of Mauritius, Dr Arvin Boolell a former Minister of Foreign Affairs, or the former President of Mauritius, Dr Ameenah Gurib-Fakim, Mauritius’ leading biodiversity scientist both of whom are internationally renown.
This would have been the first step needed to ensure the response to an oil spill that triggered a State of National Environmental Emergency and macroeconomic impact, had full cross-party support. It has been over 100 days since the oil spill, and the conduct of all international parties in Mauritius will need to be reviewed.
Other embassies in the country are clearly aware of the domestic political situation.
In response to questions from Forbes, the European Union Ambassador to Mauritius, Vincent Degert, said on November 13, that “The EU followed with attention the electoral process and the implementation of recommendations formulated by national and international observers, the UN and the Mauritian Electoral Commissioner.”
He went on to say, “In general, the EU agrees that it is important that the filed judicial cases are heard swiftly, for the sake of democratic legitimacy. It is therefore unfortunate that the Covid-19 pandemic has impacted since March the courts’ ability to function adequately; this also resulted in an important backlog.”
The EU Ambassador also expressed a firm intent to ensure human rights and the rule of law are respected in Mauritius.
“I had the opportunity to discuss these matters a few weeks ago with the Chief Judge, who confirmed that it was a priority for the judiciary to address the judicial reviews. Indeed, you will have observed that cases are currently being judged and decisions rendered. Please rest assured of the EU remains fully committed to the principle of democracy promotion worldwide. EU cooperation with partner countries is guided by support for the consolidation of democracy, the rule of law and promotion of human rights in the framework of a regular and structured dialogue with institutional counterparts and civil society.”
A spokesperson for the British High Commission said in response to questions from Forbes on November 13, “The elections took place last year on 7 November 2019 and that petitions were entered by various parties to challenge the results. Most of these challenges remain unresolved at the moment.”
In terms of the delays to the judicial process, which had been complicated by the Covid-19 lockdowns in March, the British High Commissioner spokesperson went on to say, “The fact that opposition candidates are able to enter petitions to challenge results is a very good sign that democratic institutions work in Mauritius, but it is not for us to provide a judgement on the length of time taken by the courts.”
So this is a situation being actively monitored by major Governments around the world, and cannot be a defense in any insurance claim to place all the responsibility on the shoulders of Mauritian authorities who may be ruled not to have been legitimately elected, and which was known at the time of the grounding of the Wakashio.
Over 100,000 protestors have been estimated to have marched in several rallies in Mauritius calling for the judicial hearings into the election to be accelerated, and also at the response to the oil spill.
Translating damage into a loss calculation
In order to move from damage assessment to loss calculation, it will be important to translate the damage to human, environmental, economic and cultural loss into an economic calculation.
Some of the losses from the oil spill and damage listed above could include:
Human Health (over $3 billion)
The health cost of the 35,200 people directly exposed to the fuel (the 15,000 from the town of Mahebourg; the 15,000 who live in the surrounding villages along the 36 kilometers of coastline and 125 square kilometers of coral lagoon where chemicals from the oil spill has already been detected; the 5000 initial front line volunteer and police Special Mobile Force responders; and the 200 engaged in the clean up operation) could be $3 billion alone, with around $5,500 of health monitoring and treatment a year per person for the next 15 years (equivalent to $15 a day per person). The health outcomes from exposure to this oil is serious and could cause cancer and failure of key bodily organs (such as reproductive organs, heart, lungs, and the brain, as well as psychological impacts). In response to the Wakashio oil spill, articles in The Lancet and The World Health Organization have issued strict warnings about the serious medium to long term consequences of exposure to this oil.
Given that the coral reefs form a critical part of the coastal protection for the entire East Coast of Mauritius, and there is now evidence that the spawning of this coral have been impacted by the oil. The value of land assets along the 36 kilometers of coastline of Mauritius is in excess of $4 billion. Should there be an egress in the corals that lead to a long term degradation of the Eastern Coastal protection of Mauritius, the polluting entity will need to be responsible for the restoration of the healthy and protective reef or equivalent for long term coastal erosion. Otherwise they face economic damage claims for the loss of property value or investment required into restoring and monitoring the natural coastal protection along this important coast of Mauritius, including the impact of changing ocean current patterns in the lagoons and consequential coastal erosion as a result of the oil spill.
Scientists are already concerned about the porosity of the coral rocks in the coral lagoon being impacted with the oil. The porosity of coral atolls mean they are more susceptible to acidic heavy oil getting in and causing accelerated chemical erosion that break down these structures even faster. Since the oil spill, there have been no independent scientific reports from internationally respected organizations on the impact of this experimental fuel on Mauritius’ coral structures, even though some of the world’s best marine scientists had offered their assistance. The cost to Mauritius will be enormous to rehabilitate this environment over the long term, and will need to be recovered through insurance as economic damage caused to Mauritius’ natural coastal infrastructure.
Tourism losses (over $3 billion)
Tourism in Mauritius represents 24% of the economy, or around $3.6 billion a year (both directly through hotel and hostel rentals but also the secondary sector critical to supplying hotels with food, restaurants, taxi services, watersports operations). Over 10% of Mauritius’ coastline was directly impacted by the oil spill (36km of 330km), and over 30% of Mauritius’ healthy coral reef systems has evidence of fish being contaminated with toxins from the oil (PAH chemicals). This means an impact of between $360 million and $1.1 billion a year on tourism revenues alone. The rehabilitation will need to be monitored for at least ten years to understand the impact on the environment as much of this oil has leached deep into the sand, coastal and coral sediment (there are traces of oil in Alaska from the Exxon Valdez oil spill more than 30 years later).
Biodiversity loss (over $1 billion)
The environmental impact could be even greater as the oil spill occurred in a network of highly protected nature reserves containing some of the world’s most endangered birds, corals, reptiles and plants. These nature reserves include some of the last remaining specimens of plants and animals in the world and were being carefully nurtured by independent environmental groups, such as the Mauritian Wildlife Foundation. Attempting to appeal to emotions for what the value of a last remaining species should be, would be a legal error, under current maritime insurance laws. There are laws being debated about how to price in ecocide (defined as an industrial accident that destroys nature and potentially makes a species extinct), but a clearer path is through the commercial models for the value of the biodiversity, which are linked to economic contracts (i.e., bio-prospecting or the bio-economy). These could put estimates at another $1 billion of value being lost to changes to commercially valuable organisms in the natural environment due to the oil spill. Some of these organisms from the marine environment were being explored as potential coronavirus treatments, and Silicon Valley synthetic biology companies have been offering assistance to Mauritius to assist before these organisms disappear forever (even if some of these are microscopic bacteria).
Historic and cultural rehabilitation (over $200 million)
The location of the oil spill contains some of the most important historic maritime sites in the country. According to research being conducted by Stanford University’s Stefania Manfio and local marine archeologist, Dr. Yann von Armin, there are 1200 important historic wrecks around Mauritius. Grand Port was the location of an important shipbuilding center under the Dutch. Many of these wrecks that defined the identify of Mauritius was directly in the path of the oil spill. To date, the location of 800 have been found, fifty have been individually identified and seven excavated archeologically.
For example, the wreck in 1821 of Le Coureur in South East Mauritius was illegally carrying 100 slaves from Zanzibar. It is an important part of Mauritius anti-slavery heritage and marks the true ending of slavery on the island, ten years after Britain won control from the French. The wreck site at Pointe aux Feuilles is just five miles from the Wakashio wreck and where the dead dolphins and whales were found. Images of the Le Coureur wreck can be viewed here. The wreck itself was only just discovered in 2004, and was still being studied. Satellites show that the region was drenched in oil, causing untold damage to the two hundred year old iconic wreck that formed a critical part of Mauritius’ history.
There are also the wrecks of two famous vessels sunk in the defining 1810 Naval Victory that marked the change of ownership of Mauritius from French to British control (Napoleon’s only naval victory against the Nelson and marked on the Arc de Triomphe in Paris). These were the HMS Magicienne and the HMS Sirius. In addition, the location is important as the first landing of European settlers (a location known as Dutch Landing) and the first capital city of Mauritius (Vieux Grand Port), in addition to a range of cemeteries and religious locations along the coast that form a critical part of the historic and cultural heritage of the island.
It has been seen as incredibly insensitive by the vessel insurers and the company with the largest presence in Mauritius, Japan P&I Club and Mitsui OSK Lines, not to have acknowledged and ensure the cultural preservation of these iconic parts of Mauritius’ anti-slavery heritage from damage caused by the experimental fuel placed on the Wakashio.
Satellites reveal large portions of these areas have been drenched in oil, and the clean up operations by Japan P&I Club, Le Floch Depollution and Polyeco did not sufficiently consult with independent experts prior to beginning operations, as the former President of Mauritius and renown biodiversity expert, Dr Ameenah Fakim-Gurib continues to point out in international media appearances.
An oil spill of this scale and nature in some of the most sensitive sites in a country require unanimous consultation with all major leaders representing all communities, before any operation could begin. It was also particularly concerning that some of the actions of those responsible for the cleanup operations could have led to spikes of Harmful Algae Blooms within weeks of the oil spill and clean up operation, raising questions about exactly what type of clean up techniques were being used, and who authorized this. Everything would need to be properly documented (with evidence that this plan was faithfully followed), otherwise that in itself is negligence.
At the centerpiece of the Blue Bay Marine Park was the 1000 year old Brain Coral that was the largest in the Indian Ocean. It is 7 meters across in diameter and one of the main attractions for the Blue Bay Marine Park, and why the park was created in the first place. These records have been submitted with the United Nations.
Since the oil spill, there has been significant concern about the health of the 100 year old Brain Coral at the center of Blue Bay Marine Park, and scientists from Japan have still not yet shared imagery of the coral (that can easily be viewed via glass bottom boat) to confirm the status of the specimen following the oil spill. Given the importance of tourism to Blue Bay Marine Park, there is a dollar value associated with nursing the Blue Bay Brain Coral back to health again.
Other losses
A wide-ranging inquiry will be needed to fully quantify some of the other economic losses that were encountered in Mauritius as a direct result of the Wakashio grounding and oil spill. This includes the impact on tourism support services (e.g., taxi drivers who have lost revenue, food suppliers), fishing losses, including to fish processing businesses. The inquiry will also need to cover decisions around the salvage operation of the Wakashio, that was the responsibility of vessel insurer, Japan P&I Club.
For example, why was there a need for Mauritius to have sent one of its Mauritius Port Authority tugboats, the Sir Gaetan, to support the salvage operation, leading to the loss of four Mauritian lives on August 31. This should have been the responsibility of the insurer and its appointed salvage team, Dutch giant, Boskalis-owned Smit Salvage, who should have had a clear plan of operation, including suitable resources available.
Where is the International Group of P&I Clubs?
Tabulating these economic and health losses reveal the scale of impact that the oil spill has had on Mauritius, and which would need to be assessed in Courts in London and by the International Group of P&I Clubs (under the International Group Agreement), as this far exceeds the payable amount by one insurer – in this case, Japan P&I Club.
With the extent of the damage continuing to grow in Mauritius as the full magnitude of the oil spill becomes apparent, there is likely to be an assessment by the International Group of P&I Clubs.
It is unclear whether they are planning a site visit to Mauritius.
What is clear is that there needs to be an ethical response to reflect the extent of harm caused to the environment by one of the shipping industry’s mega ships. These ethics have sorely been lacking from the response and the shipping industry so far.
The global shipping industry were warned for years about the risk of these large super-sized vessels, and have continued ignore these warnings. The fight for reparations from the Wakashio is not just a stand for justice in Mauritius, but is also a stand against what is seen as unregulated growth of the global shipping industry.
In response, the global shipping and insurance industry can attempt to take a traditional, defensive position to win every legal argument with an army of expensive lawyers. Or it can recognize the winds of change blowing through the global economy and be on the right side of history.
Parallels With a Slave Ship Incident
Around two hundred years ago, another shipwreck marked the change of one era to the next as the world’s values shifted. The French schooner, Le Coureur , sunk off the coast of Mauritius illegally carrying 100 slaves from Zanzibar. It was the last major slave ship sinking off the coast of Mauritius and marked the end of slavery, which was formally abolished 13 years later across the British Empire.
In an era where the world is battling a global climate crisis, there is an opportunity for the global shipping industry to say ‘never again’ and make the Wakashio the last major shipwreck that involves fossil-fuel driven ship.
Now that would be a legacy worthy of the history books, and a fitting end for the Wakashio.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Forbes
