Simon Potter and BPC in their public statements consistently use the specific wording “required insurance”. The required level of insurance in the Bahamas may be insufficient to adequately respond to an oil spill at the Perseverance 1 well site. The Judicial Review in part is to determine whether or not the Government of the Bahamas, in providing Oil Exploration Licenses, performed its due diligence to determine what level of insurance would be sufficient.
Will the insurers pay?
Lloyd’s of London insured Transocean, the former owners of the Deepwater Horizon Oil Rig. In 2013 BP struggled to get them to pay $700 mn dollars toward the BP Oil Disaster. BP was named as an additional insured. Transocean in a separate contract said they would be responsible for pollution above the water’s surface, because the oil spill originated underwater, they said it was not their responsibility.
Insurance Business America Nov 25 2013
Are the oil drilling insurance requirements actually sufficient to restore the critical habitats that will be impacted?
In the United States “Lease holders of a covered offshore facility (COF) must demonstrate a minimum amount of oil spill financial responsibility (OSFR) of $35 million per 35,000 barrels of “worst case oil-spill discharge” up to a maximum of $150 million for COF located in the Outer Continental Shelf (OCS) and $10 million in state waters. OSFR can be demonstrated in various ways including surety bonds, guarantees, letters of credit, and in some cases self insurance, but the most common method is by means of an insurance certificate.”
Rawle O. King. Deepwater Horizon Oil Spill Disaster: Risk, Recovery and Insurance Implications, July 12, 2010. Congressional Research Service
These limitations were demonstrated to be woefully inadequate for the DeepWater Horizon Oil Spill Disaster.
Can the insurance be activated in time to mobilize the required number of boats and other oil spill cleanup resources to prevent impact? Generally, no. Insurance in these cases is not for the response to an oil spill. The resources need to be adequate, and near to the oil spill location, which they are not. The insurance prevents the company from going bankrupt. It does not prevent the damage which can leave a legacy of economic, health and social issues.
How will the oil drilling insurance treat the loss of the Bahamian Crab industry in Andros for 20 to 30 years after an oil spill?
It took 3 months for the Deep Water Horizon Oil Spill Disaster to be capped at the well head. We do not know how long it will take for the cleanup because it is still ongoing. What is the limitation on how long the cleanup activities will be supported by the insurance companies?
What is the value that our government put on our culture?
When the insurance settlement is complete, which portion goes to the government administrations which wrote and signed the contract?
Which portion goes to the administration that provided the environmental authorizations?
Which portion of the insurance benefits ultimately go to supporting fishermen to convert their families to another industry?
Which portion of the insurance benefits will support study and treatment of new forms of Cancer in island communities that use fish and seafood from the creeks of Andros?
These are simply questions. and that is essentially what a Judicial Review is about. having questions answered.