COPC, CNOOC to face lawsuit for oil leak

China Daily, July 9, 2011

Penglai 19-3 oilfield in Bohai Bay

Eleven environmental protection groups on Friday vowed to file a joint lawsuit against the companies responsible for the oil leak in Bohai Bay.

The public interest litigation, which will be submitted to the courts next week, could result in ConocoPhillips China (COPC) and China National Offshore Oil Corporation (CNOOC) being ordered to pay compensation.

"Before the litigation, we'll be sending them a formal letter on Monday that demands the two companies organize or assist environmental protection groups to go to the scene of the spill and check the cleanup process and the pollution situation," said Feng Yongfeng, founder of Green Beagle, one of the 11 NGOs.

He said that on Thursday the groups sent a joint letter to stock exchanges in Hong Kong and New York calling for an investigation into whether the companies failed to disclose information in a timely fashion.

The oil leak was first detected on June 4, but COPC and CNOOC remained silent until the spill was exposed to the public by the media late in the month.

The 11 organizations also sent an open letter to COPC and CNOOC on Monday calling for an apology for not immediately disclosing the specifics of the incident.

Public interest litigations are aimed at protecting communities and private individuals, and can be filed on behalf of victims by a third party.

"The victims of this marine pollution are immeasurable and it's almost impossible for any one person to file a case, so public interest litigation is necessary," said lawyer Wang Haijun at Beijing Deheheng Law Firm, which is acting for the environmental groups.

According to the first regional regulation on ecological compensation for marine pollution in Shandong province released in 2010, ecological compensation is set at 10 million yuan ($1.54 million) for every 0.5 sq km of seawater affected and 200 million yuan for every 10 sq km.

The leak from the Penglai 19-3 oilfield in Bohai Bay, operated by COPC, had polluted an area of more than 840 sq km as of Monday, according to statistics from the State Oceanic Administration on Tuesday.

Any compensation resulting from the litigation will be used to restore the marine environment and compensate possible victims, said Wang.

Although a fishing moratorium began on June 1 in Bohai Bay, the oil leak will influence the growth of fish, causing long-term impacts to fisheries and the environment, an unnamed official from Changdao county's oceanic and fishery bureau told Economic Herald on Friday.

However, the groups first need to get their case heard, said lawyer Wang, who added: "We're not even sure the court will accept our case with 11 NGOs as the plaintiffs."

A spokesman for COPC declined to comment on the planned litigation, saying the company has yet to receive any document or request from the groups.

An insider at CNOOC, meanwhile, told China Daily on Friday that they will react according to the detailed requirements in the formal letter when they receive it.

Wang Bin, deputy director of marine protection at the State Oceanic Administration, said at a briefing on Tuesday that the ecological compensation is under discussion.

However, despite that briefing and another held by the two companies on Wednesday, one month after the incident, no estimates on the amount of oil spilled and an exact explanation on how the leak happened have yet been given.

Lu Bo, deputy general manager of the CNOOC, said his company has made every effort to aid the cleanup since June 4 and plans to release further details of the incident after investigations with COPC, Xinhua News Agency reported on Friday.

Facing so much criticism over transparency, he said CNOOC will reflect on the way it has dealt with the situation.

However, Jiang Yongzhi, Beijing-based spokesman for Hong Kong-listed CNOOC, told Xinhua that a listed company is answerable to its investors and only when all facts are clear can it release the information to the public.