Possibly the most costly mistake for companies that transport petroleum and chemicals is the failure to fully understand potential liability for an oil spill. A company that does not understand its legal position may respond to an incident that is not its responsibility, or fail to respond to an incident that is. It may wrongly assume that international conventions (such as the CLC 92) apply, and fail to protect against the liability it will bear if they do not. This failure to understand and manage liability risks has created notorious oil spill headlines in recent months, as companies and corporate officers find themselves prosecuted for actions they thought were innocent - or even helpful - and under laws they never expected to apply.

This paper will consider, through concrete examples provided by oil spill lawyers from all over the world, how this legal liability can arise and particularly how parties who do not expect to be responsible for a spill can become so through well-meaning actions and incomplete understanding of international conventions. This paper will then suggest a variety of practical steps companies can take to manage the risk, including: vetting, contingency planning for non-shipowners, tabletop exercises, liability analyses, and education within the corporate structure.

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