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. Last Updated: 07/27/2016

Spill Highlights Oil Firm's Obligations




LONDON -- The oil spill polluting French beaches should be a wake-up call to oil companies to sharpen environmental practices and repair an arrogant and insensitive image, analysts say.


The loss of the 25-year-old tanker Erika, which broke in two in early December, has highlighted companies' responsibilities in ensuring the ships they use are up to the job, shipping and environmental sources say.


French major TotalFina has pledged 40 million francs ($6.3 million) in emergency cleanup funds and will pay about 400 million francs to pump remaining cargo from the wreck.


But both environmentalists and industry watchers said this was a belated reaction as heavy fuel oil hit Atlantic beaches two weeks after the sinking of the Maltese-registered ship.


"This spill serves to focus people's attention on the environmental costs of oil," Greenpeace International oil campaigner Paul Horsman said.


"It is another example of the irresponsibility of the oil industry in trying to operate as cheaply as possible," he said.


One way firms can improve the handling of environmental crises is to cultivate relationships with every sector of society to build mutual advantage, British-American company BP Amoco says.


"There is still a caricature of who we are and what we do," chairman John Browne said of the oil industry as a whole.


"In that caricature the industry is dirty, old-fashioned, arrogant and unprincipled. For many people we are no more than a necessary evil," he said in a speech in September.


TotalFina chairman Thierry Desmarest won few friends by reminding critics Dec. 22 that the tanker's breakup could not legally be blamed on his firm. TotalFina pinned responsibility on Italian ship owner Panship Management.


Embarrassed in the face of rising public anger, the company two days later promised to help clean up the mess.


A more intractable problem for the oil companies may be overcapacity in shipping.


"The competitive nature of the industry's shipping market forces tanker owners to cut corners with existing ships," former oilman Jeremy Leggett writes in a book called "The Carbon War."


Environmentalists argue substandard ships would not be sailing if oil companies did not cut costs by using them. That argument is backed by the tanker owners' organization, Intertanko.


"Everybody in the chain must take responsibility," Intertanko managing director Dagfinn Lunde said. He stressed that until an inquiry was held into the reasons why the Erika broke up, it was not possible to conclude that it was a poor vessel.


"But there can only be two reasons, or a combination of them, why a ship breaks up - structural deficiencies and bad maintenance or wrong loading."


Lunde said charterers' responsibility should be linked to shared financial liability, as is the case in six U.S. states.