US$44.4m settlement over San Francisco Bay oil spill

PUBLISHED : Wednesday, 21 September, 2011, 12:00am
UPDATED : Wednesday, 21 September, 2011, 12:00am


A Hong Kong ship management company and the owner of a container ship will pay US$44.4 million to settle environmental penalties and claims over one of the largest marine oil spills in California.

The Cosco Busan spewed more than 200,000 litres of fuel oil into San Francisco Bay when it hit part of the San Francisco-Oakland Bay Bridge amid heavy fog in November 2007.

Fleet Management and ship owner Regal Stone agreed to pay the penalties after a deal with the US Department of Justice and other regulatory authorities. The pact had yet to be approved by a federal court.

Under the deal, about US$32 million of the compensation package will be earmarked for environmental projects, including the restoration of bird, fish and other habitats damaged by the spill.

Fleet managing director Kishore Rajvanshy confirmed that a formal settlement had been proposed covering all civil claims brought by government bodies.

'When approved, the settlement will resolve all remaining claims, including claims for damage to natural resources and response costs which were brought by various agencies within the US federal, California state, and local county and city governments,' Rajvanshy said.

He said the penalties and claims would be paid by the ship's insurers.

Despite being named Cosco Busan the ship was chartered to South Korea's Hanjin Shipping and there was no direct connection to China Ocean Shipping (Group), the mainland's largest shipping company.

Oil from the spill affected more than 160 kilometres of shoreline and killed more than 6,800 birds.

Fleet Management, which was owned Hong Kong-headquartered commodities group Noble before being sold last March, had already been fined US$10 million after pleading guilty to criminal charges, including that the ship's crew, employed by Fleet, falsified documents following the bridge collision.

John Cota, the San Francisco Bay pilot that was overseeing the navigation of the ship, was jailed for 10 months after pleading guilty in March 2009 to federal water-pollution charges.