CONGRESSIONAL RECORD -- SENATE
October 8, 1969
Page 29048
Mr. STEVENS. . . . I know the chairman of the subcommittee would like to comment on this matter, but first I ask unanimous consent that the amendment we have offered show that it is cosponsored by Senators MCGOVERN, MONDALE, HUGHES, WILLIAMS of New Jersey, YOUNG of North Dakota, YOUNG of Ohio, and SMITH of Illinois, who have joined the Senator from Massachusetts and me.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. MANSFIELD. Mr. President, will the Senator yield?
Mr. STEVENS. I yield first to the majority leader.
Mr. MANSFIELD. Mr. President, I ask unanimous consent that I may be included as a cosponsor of the proposal by the Senator from Alaska.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I have, as the Senator from Alaska has indicated, discussed this matter with him. May I say at the outset that I sympathize completely with the Senator's objectives, and I compliment the distinguished Senator from Alaska and the distinguished Senator from Massachusetts for developing the facts relative to this situation and bringing them to the attention of the Senate, first at the time this amendment was introduced last spring and then this morning. I think this part of the record is important.
I point out that when the amendment was submitted last spring, on May 20, the committee had already completed its hearings on S. 7, and, indeed, we had already embarked on executive sessions, which stretched from March until late June, undertaking to work out the provisions of the bill which are now pending before us.
We entertained the hope at that time that before this session was ended, we would get to additional hearings on the problems of financing waste treatment plants. So last spring we indicated to the Senator from Alaska that, in connection with those hearings which we hoped to hold, we would have hearings on his amendment, with a view to developing a viable solution to the problem.
Unfortunately, other developments in connection with the funding of waste treatment plants have taken place or are underway in Congress this year. I have high hopes that, with the assistance of the able and distinguished Senator from Louisiana, the funding level can be raised through the appropriations process. For that reason, and in order to submit our efforts on the appropriations process this year, we did not get into the questions of alternative means of funding waste treatment plants; and as a consequence, we have not gotten to hearings on the Senator's proposal.
But because of the obvious merit and urgency of the problem, I have agreed with the Senator to take his amendment to conference, if the Senate approves, for the purpose of bringing it to the attention of the House of Representatives as well as the Senate. I would not predict what the conference result may be, but at the very least, I think, by this procedure we can alert the House of Representatives to the urgency of the problem and lay the basis for further and perhaps more effective consideration by our committee later on.
So I am willing to take this amendment on that basis.
Mr. STEVENS. I thank the Senator for his comments. I am sure that the Senator from Massachusetts and I understand the problem that is involved in the committee's consideration, and we are grateful to the chairman for his comments and his appreciation of the problem and his willingness to work with us to try to solve it.
The PRESIDING OFFICER. The question is on agreeing to the amendment to the substitute committee amendment.
The amendment was agreed to.
The PRESIDING OFFICER. The committee amendment in the nature of a substitute is open to further amendment.
Mr. MUSKIE. Mr. President, yesterday there was some discussion of the oil pollution liability section of S. 7; and in view of the comments made on the insurability of the liabilities set forth in the bill, I should like to briefly to discuss the considerations which led the committee to conclude that the reverse burden of proof-limited negligence concept would not adequately protect the U.S. Government in the event of a catastrophic oil spill.
These provisions in the legislation, Mr. President, sparked a great deal of controversy. A number of representations have been made to members of the Committee on Public Works and other Senators by representatives of the British insurance industry, the international merchant marine, and the American merchant marine, recommending the adoption of negligence liability, with limits of $100 per gross ton or $10 million, whichever is lesser.
I should like briefly to discuss why this concept, which was included in the House passed bill, was not accepted.
The Committee on Public Works did not ignore the need to protect the ability of the United States to transport oil by vessel. It was for precisely this reason that the committee established the limitation of liability at $125 per gross ton, or $14 million, whichever is lesser, for any oil spill which was not the result of negligence or a willful act. It was also for this reason that the committee provided certain exceptions suggested, I might say, by the industry, which, if proved by the owner or operator of the discharging vessel, would relieve the vessel from liability.
In other words, if the owner cleans up the spill and is later able to prove that the discharge was caused solely by one of the four exceptions which the committee included in the bill, the U.S. Government will reimburse the owner for his costs up to $14 million.
Mr. President, I think it is important, at this point, to suggest some facts relative to the risks which are involved from this kind of spill and discuss the relationship of liability to those risks.
The House bill would limit the liability of a vessel owner or operator to $100 per gross ton or $10,000,000, whichever is lesser. That bill would provide that, regardless of how willful or how negligent the discharge happened to be, the innocent beach owner, the innocent boatowner, or the innocent commercial fisherman would have to pay those cleanup costs in excess of $100 per gross ton of the discharging vessel even though that beach owner, that fisherman, that boatowner had absolutely no responsibility for the spill.
Mr. President, this approach would greatly reduce the capacity of the United States to collect cleanup costs for the discharge of oil from a major supertanker. Today, $100 per gross ton would provide maximum liability coverage for a 100,000-gross-ton vessel. However, we are approaching the era of the supertanker. The recent success of the tanker Manhattan in breaching the Northwest Passage for commercial purposes will cause construction of immense supertankers which will transport oil from Alaska's north slope to the east coast of the United States. Already one oil company has ordered two supertankers to move oil from the north slope of Alaska to California.
If the committee's figures are accurate and they were almost all supplied by the oil companies and the insurance industry, a disaster on the order of the Torrey Canyon, in which the vessel was lost, cost approximately $118 per gross ton to clean up based on the settlement figures.
If a 200,000 gross ton tanker were to break up off the coast of the United States and if the cost of cleanup were to be only $118 per gross ton, the cost to the United States would be $23.6 million.
Under H.R. 4148, the United States would be out of pocket $13.6 million even if negligence was proved. Under the legislation proposed by the committee the major oil company which will own that supertanker would be liable for the entire cost of cleanup if the U.S. Government were able to prove negligence. If that discharge occurred without fault on the part of the discharging vessel, the oil company would be liable for a maximum of $14 million. If the oil company owning the vessel could prove that the discharge was solely the result of an act of God, an act of war, an act of third party or an act of U.S. Government negligence there will be no liability whatsoever. In fact, if the oil company which owned the vessel cleaned up the spill and later, proved that the discharge was a result of one of the exceptions that oil company could be reimbursed by the United States for the cost of cleanup.
Mr. President, in a matter of equity as between the discharging vessel and the American public, I have to choose for the American public. I firmly adhere to the position taken by the committee that the negligence on the part of anyone involved in the operation of the vessel should remove liability limits and the cost of cleanup should be borne by the vessel, not the innocent beach owner, fisherman or boat owner.
I ask unanimous consent that there be included in the RECORD at this point a letter commenting on the liability provisions of S. 7, from Allan I. Mendelsohn.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
WASHINGTON, D.C.,
September 26, 1969.
Senator EDMUND S. MUSKIE,
Old Senate Office Building,
Washington, D.C.
DEAR SENATOR MUSKIE: In a recent New York Times article, George Horne described several of the current efforts by the British marine underwriters, joined by the American shipowners, to oppose your legislation revising and modernizing the archaic limitations of liability that have up to the present time protected foreign and U.S. flag tanker owners in the event of oil spills causing extensive pollution damage to the beaches and sea coasts of this country.
As a former treaty negotiator for the United States Government on this and similar limitation subjects and as former Chairman of the joint United States Government-industry committee on international maritime law, I believe I might be of some help to you in presenting the other and public side of this controversy.
The British marine insurers, together with the American flag shipowners, have traditionally and consistently opposed every effort, domestic as well as international, to raise the archaic United States limitations of shipowner liability up to realistic amounts. It is scandalous that, by reason of the limitations of liability enacted by the United States Congress in 1851, a Torrey Canyon disaster occurring off the coast of Miami or Cape Cod would result in no recoveries for the American citizens whose fishing, wildlife, hotel and beachfront interests are seriously damaged.
It is even more scandalous that if the 1851 limitation law, as amended in 1936, is applied to the survivors of the 90 victims of the 1965 Yarmouth Castle disaster, no survivor would recover more than $2,700 per victim.
Yet, each time some effort is made to modernize these limits, the marine insurers and the shipowners join together in opposition. As is the case with your bill, one of their usual arguments is that the capacity of the insurance market is incapable of meeting the risks that could be involved if high limits are adopted. In short, the marine insurance market does not have enough money or enough avenues by which this money can be obtained.
But this argument is plainly inadequate. I do not believe it is necessary, in this respect, again to point your attention to the many inconsistencies that appeared in the testimony of the British insurers on the several occasions they testified before your Committee. In an article to be published in next month's issue of the George Washington University Law Review, I describe and analyze these inconsistencies in some detail, pointing up how their testimony changed in each of the successive hearings held by the House Committees and your Subcommittee. Suffice it to say now, however, that each time they appeared, market capacity seemed to shrink and costs seemed to increase finally to the point even of doubling for halved limits.
For my part, I have no doubt whatever that if your bill were to pass with no limitations of liability much less the limitations now proposed in your bill, the marine insurance industry would find the necessary market capacity within at most a 6 month period -- if only to be able to continue today's lucrative oil tanker trade. One need only mention, in this respect, that when limitations of liability for international airline crashes were raised in 1966 from $8,300 to $75,000, the international aviation insurance market discovered the capacity almost overnight even though prior to the event they too had argued, like the marine underwriters today, that the capacity was not there. In domestic aviation, where there are no limitations of liability the U.S. airlines are presently gearing up for potential liability, with the new 747 jumbo jets, of upwards of $100 million per aircraft per accident. Yet the British marine underwriters can argue that their market cannot absorb even a limit as low as $15 million.
Moreover, one questions the role of the oil companies in this controversy. It is a fact that 7 major American oil companies own almost half of the total tanker tonnage operating under the American flag. It is also a fact that the 7 oil companies operating the largest amounts of American flag tanker tonnage also happen to be among the 9 oil companies enjoying the largest allocations under this country's oil import quota system. It is still further a fact that the oil companies and tanker owners have realized immense savings with the introduction of the giant tankers ranging anywhere from 200,000 to 500,000 dead weight tons. A 200,000 ton tanker alone can carry upwards of roughly 55,000,000 gallons of crude oil. Certainly, with the profits realized through these automated and, indeed, subsidized (by way of the import quota system) operations, oil should and must be expected to pay its way by assuring that the insurance market capacity is in fact adequate. For if the oil tanker and oil industry do not pay their way, that way will necessarily be paid through lower, inadequate recoveries by private American citizens who fall victim to future pollution disasters.
To be sure, I am not enamored of all the provisions of your bill. For example, I fail to see why, if there is to be a limit at all, there should be any exceptions to liability. Under modern legal principles, such as exist in international air law today, a limitation may be accorded to the carrier but only in return for that carrier's accepting absolute liability. If a carrier can avoid liability by proving, for example, that the accident resulted not from his fault but rather from acts of God, war, or third parties (the present exceptions in your bill), then, failing such proof, he should be entitled to no limitations of liability and thus be liable for damages in full. This latter situation prevails today in domestic United States aviation. Yet, in your bill, the carrier enjoys the exceptions but still has a limited liabilty. Moreover, even if absolute liability is adopted, I fail to see any persuasive reason why an overall ceiling must be included. It is enough to provide only a per ton limit and, indeed, I might add that this was the system that appeared in your Committee Print No. 3. To change that system by incorporating an overall ceiling of $10 million or $14 million does no more than protect the largest tanker owners who presumably need this protection the least.
Moreover, the most significant failing of your bill is that it covers only clean-up costs of government and does not at all change the repressive 1851 limitations as they apply to suits by private citizens. I realize, of course, that this failing is not of your doing and that you, together with the members of your Committee, would have preferred to have broadened the bill but were unable to under the circumstances.
But with all these defects in the bill, it still remains the first major and long overdue breakthrough in this country's maritime limitation law. If the British insurers, the oil industry, and the American shipowners succeed, by imposing their groundless apprehensions on you, in blocking the passage of even this first step of progress, I fear for the consequences to the American public in all of the future steps of progress that are so necessary in our maritime limitation law.
It is for these reasons and despite its defects that I vigorously support your bill and offer you my assistance in any way towards its enactment. The only compromise that should be acceptable – and one that I would personally prefer -- is an unbreakable limit (notwithstanding negligence or willful misconduct) of $150 per ton, no overall limit, and a system of absolute liability with only one exception, namely, the unique case where the Government itself causes or contributes to the causing of the accident. Adoption of such a system would be fully in accord with modem tort law principles which predicate liability not on grounds of fault or negligence but on ability to absorb and distribute risk.
Perhaps in view of the present circumstances, the various concerned industries might be more prone to accept this proposed compromise system than the one presently in your bill. If so, this system, with all of its legal and practical advantages in offering certainty and avoiding litigation, should be adopted. But if not, your bill is the next best alternative and, despite the objections traditionally heard from the insurers and shipowners, it should be enacted forthwith. Sincerely yours,
ALLAN I.. MENDELSOHN.
Mr. BAKER. Mr. President, I fully concur with the distinguished chairman of the subcommittee in his description of the liability provisions of S. 7; particularly the position that in the final analysis the provisions of S. 7 establish the principle that as between the public and an owner or operator, the owner or operator shall bear expenses associated with cleanup.
I would like to add only a few points. A paramount concern of the committee is a desire to apply a uniform standard of liability. To do so it was necessary to adopt an approach that would enable the relevant courts to decide issues of liability with as little reference as possible to State law.
Consequently, the committee adopted a standard of liability that would give complete and sufficient guidance to the Federal courts in deciding basic issues. The only deviation from this pattern is where an exception is made from limitation of liability where the United States can prove negligence. In considering an allegation by the United States of such negligence, the Federal court, of course, would refer to relevant State law.
The basic liability standard, however, avoids immediate reference to State law by adopting liability in the nature of absolute liability, then providing exceptions from this liability where an owner or operator can prove that a particular discharge was caused solely by an act of war, act of God, or negligent act of the Government or the act of a third party. It is hoped that the exceptions are sufficiently clear in the bill so that, along with the report language, a Federal court will be able to decide the issue of liability with a minimum reference to State law and thus achieve as close to a uniformly applied standard as is possible.
The bill defines an act of God to mean an act occasioned exclusively by violence of nature without the interference of human agency. This does not mean, therefore, a common law or statutory definition of act of God that exists under State law. This language provides a higher standard, and one that means a violent act of nature that could not have been avoided by the exercise of foresight and prudence. In the words of the testimony of the American Petroleum Institute this would include an event such as an earthquake or tidal wave in an area without any prerecorded history of such event.
The remaining exceptions are clear on their face and should enable a Federal district or other court to determine all issues with little reference to State law.
S. 7 has been written to avoid a full range of controversy that is inherent in any reference in a statute to burden of proof or prima facie case. The record should show that there is no such thing as a simple reversal of the burden of proof and as responsible legislators we should avoid such a procedural trap.
If we used language of burden of proof we could not describe what burden we are talking about for such matters are properly matters of State law. To use such language, therefore, would raise the same problems we are attempting to avoid in refraining from using negligence as the basic test of liability.
Burden of proof is a variously defined concept. It can mean the burden of going forward with the proof, or the burden which disappears with any proof to the contrary or one that requires substantial proof to overcome the presumption, or even an irrebuttable presumption.
If we get into the procedural aspects of presumptions and reversal thereof, it seems to me we have sown the seeds of very extensive litigation.
That there is in fact the manner in which burden of proof language would be interpreted let me quote from a brief filed by the Maritime Law Association on this very point:
Further, the liabilities imposed by the two bills are comparable neither in theory nor application.
The prima facie case established in Section 17(e) (2) of H.R. 4148 would be satisfied by proving that one's acts or omissions did not proximately cause the damage. This initial burden of evidence being satisfied, the plaintiff Government, as other plaintiffs, would properly proceed with its burden of proof as to the proximate cause of a spill.
It is exactly this procedural quagmire we seek to avoid in S. 7.
Mr. President, a question has been raised concerning the applicability of cleanup liability provisions to facilities to receive supertankers currently being designed and constructed beyond 3 miles of the coast of the United States.
It is my understanding, and I think shared by members of the Committee on Public Works that to the extent liability is not established by other provisions of law the liability established by this act shall apply if any essential part of such facility, such as a pipeline, passes through the navigable waters of the United States. Under the definition of on or offshore facilities of section 12 (a) (11) a facility includes "related appurtenances." As used in that definition "related appurtenances" should not be interpreted as meaning only those appurtenances occurring in the navigable waters but to include all essential parts of a particular facility no matter where located. Therefore, a terminal facility beyond 3 miles that has the pipeline or other necessary part passing through the navigable waters can be included in the liability provisions of S. 7.