ConocoPhillips subsidiary fined for oil pollution

    Updated : 2015-11-09

ConocoPhillips China and China National Offshore Oil Corporation were sued by 21 fishermen for offshore oil pollution. The Tianjin maritime court ruled on Oct 30, 2015 that ConocoPhillips China be held accountable for relevant losses.

Penglai oilfield 19-3's B and C platforms experienced oil spill accidents on June 4 and 17, 2011, polluting some areas of the Bohai Sea. The oilfield was a joint program between the two companies. ConocoPhillips was the operator when the accidents occurred.

On Aug 18, 2011, authorities formed an investigation team. A report was unveiled on June 21, 2012, ruling that the oil spills polluted a 6,200-square-kilometer area around the oilfield, that ConocoPhillips had violated the prescribed development plan, was remiss in management, and had not taken necessary precautionary measures. It concluded that ConocoPhillips should take full responsibility for the accidents.

The Ministry of Agriculture and the State Oceanic Administration negotiated with ConocoPhillips on compensation after the accidents and reached a 1-billion-yuan compensation agreement with ConocoPhillips on Jan 25, 2015 and a 1.7-billion-yuan compensation agreement with CNOOC on April 26. A total of 731.5 million yuan went to the affected fishermen in Hebei and Liaoning provinces. By the end of 2012, most of the victims (about 4,500 fishermen) had received compensation.

The 21 fishermen had not been involved in the government-coordinated compensation and sued the two companies on December 7, 2011. The Tianjin maritime court took the case on Dec 30, 2011.

The court held a two-day public hearing during Dec 9-10, 2014 and focused on 39 pieces of evidence out of the 315 submitted by both sides. All parties made submissions.

The court found that the fishermen were affected by the oil spills and their rights should be protected. ConocoPhillips should take responsibility for compensation. CNOOC was not an oilfield operator and didn’t control pollution sources, so it didn’t have to compensate for loss. The oil concentrations found in the sea areas near the fishermen's aquiculture area substantiated their claims. The court ordered ConocoPhillips to pay compensation of about 1.68 million yuan.

The ruling suggests that any private industry production and operations should abide by law and that Chinese and foreign companies are equal before the law. They have a responsibility to protect and restore the environment and to pay compensation for proved loss to others.