Government claims for Petron oil spill rejected

September 15th, 2007 by Site Administrator

AFTER paying Petron Corp. for the money it spent cleaning up the oil spill near Guimaras Island last year, the International Oil Pollution Compensation Fund (IOPCF) rejected claims for the Philippine government’s “cash-for-work” program. The same fund also asked the Coast Guard to explain why its claim is bigger than that of the petroleum company.

In a report, the fund said that although some of its delegates praised the efforts of the regional Department of Social Welfare and Development (DSWD) for the said cash-for-work program, the cost was not admissible for reimbursement since the measure was not related to the clean-up operation of the oil spill nor for preventive measures for future oil spill.

The regional DSWD asked to be reimbursed by P2 million, which it said was spent on 1,000 families over a period of five to seven days last year. Its program centered on improvements on roads and drainage, food production and community cleaning.

The cash-for-work program was the original idea of Petron, 45 percent of which is owned by the government, which it implemented immediately after the oil spill to give the affected residents some income instead of handing them dole-outs as a result of the incident.

“The executive committee (of IOPCF) agreed with the director’s conclusion that the DSWD claim in respect of the ‘cash for work’ program was not admissible and should be rejected,” the June 12 IOPCF report said.

The fund, however, reimbursed DSWD some P2.8 million for the cost of providing relief assistance to P5,400 households of the affected areas for the project that the agency carried out in December 2006, or some four months after the oil spill in August 11, 2006.

On the other hand, the fund has asked the Coast Guard to justify its claim of P439.8 million, which was higher than the claim of Petron, as a result of its response to the oil spill incident.

“The [PCG’s] claim did not have sufficient supporting information to allow the Club [Shipowners’ Mutual Protection and Indemnity Association [Luxembourg]] and the Fund to carry out an assessment. The Club and the Fund have written to the Coastguard requesting detailed supporting information in respect of their claim,” the report said.

Incidentally, the fund approved to reimburse Petron some P118 million, down from the listed firm’s original claim of P196 million, for the cost of shoreline cleanup. The entire amount has been paid for by the Fund after the Shipowners’ Club declared that the company did not commit any negligence that caused the pollution.

As of May, the fund has disbursed a total of $3.7 million for the oil spill, a significant amount went to Petron, some P169 million for the claims of some 22,323 affected fisher folks from five municipalities of Guimaras Island, and other expenses such the underwater survey, the cost of the boom to contain the oil, among others.

MT Solar 1, owned by Sunshine Maritime Development Corp., sank some 10 nautical miles south of Guimaras Island last year carrying 2,081 tons of industrial fuel oil owned by Petron.

The incident was the first involving a vessel entered in the Small Tanker Oil Pollution Indemnification Agreement 2006, under which the shipowner, Sunshine Maritime, voluntarily agreed to increase the limitation amount applicable to the vessel under the 1992 Civil Liability Convention to £15.8 million (or about $32.1 million). (VG Cabuag. Business Mirror, September 14-15, 2007)