The Role of Environmental Civil Liability in Regulation of Marine Oil Pollution in Norway

Abstract

Awareness of domestic and international environmental issues has long been high in Norway. As far as marine oil pollution is concerned, Norway is exposed to coastal water pollution arising from such strategically important sectors as the petroleum industry and oil transportation. This paper is an attempt to make a positive economic analysis of environmental civil liability for marine oil pollution in these two sectors. In the theoretical part of this paper (section 2) the standard model of law and economics is presented. It seems that theory provides no clear cut answer to what liability regime is most efficient. In case of environmental pollution, and in particular marine oil pollution, theory states that strict liability is preferable to negligence because it provides the parties whose influence on risk reduction is more important with proper incentives to take precaution and limit the activity in order to eliminate the accident risk. The empirical part of the paper (section 3) provides analysis of current environmental legislation in Norway, namely the Maritime Code and the Petroleum Act. Addressing the main question of the paper one can definitely say that the legislation bears the stamp of economic reasoning. The discussion of the basic environmental principles (the polluter pays principle and the precautionary principle) in section 3.3 shows that the legal rules analyzed in 3.2 are quite useful in interpreting the principles’ provisions which lack precision. It is demonstrated that once both principles are implemented legal rules do not become superfluous. On the contrary, they make the principles’ provisions more concrete. Upon the whole, the paper proves that economic reasoning turns out to be a powerful tool in explaining legal rules and environmental principles though economic theory is not always supportive of these instruments.