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2/2014 Management of and responsibilities for oil spills from vessels in the Gulf of Finland in vessels from spills oil 2/2014 for Management of and responsibilities Performance audit report Management of and responsibilities for oil spills from vessels in the Gulf of Finland NATIONAL AUDIT OFFICE OF FINLAND ANTINKATU 1, P.O.BOX 1119, FI-00101 HELSINKI TEL. +358 9 4321, FAX +358 9 432 5820, WWW.VTV.FI National Audit Office of Finland Translation of performance audit report 2/2014 Performance audit report Management of and responsibilities for oil spills from vessels in the Gulf of Finland Edita Prima Oy Helsinki 2014 Translation of performance audit report 2/2014 of the National Audit Office Registry no. 183/54/2011 As part of its audit plan, the National Audit Office has conducted an audit on the management of and responsibilities for oil spills from vessels in the Gulf of Finland. The audit has been carried out in accordance with the performance audit guidelines issued by the National Audit Office. Based on the audit, the National Audit Office has issued an audit report, which will be submitted to the Ministry of the Environment. Copies of the report will also be submitted to the Parliamentary Audit Committee, Ministry of Finance and the Government financial controller's function. Before the audit report was issued, the following parties had the opportunity to check that the report does not contain any factual errors and to give their views concerning the opinions of the National Audit Office presented in the report: Ministry of the Environment, Finnish Oil Pollution Compensation Fund, Finnish Environment Institute, Centre for Economic Development, Transport and the Environment for Uusimaa, Centre for Economic Development, Transport and the Environment for Southeast Finland, Ministry of Transport and Communications, Finnish Transport Agency, Finnish Transport Safety Agency, Ministry of the Interior, Finnish Border Guard, Ministry of Employment and the Economy, National Emergency Supply Agency and the Ministry of Finance. In the audit follow-up, the National Audit Office will examine, which measures have been taken on the basis of the opinions contained in the audit report. The follow-up will take place in 2016. Helsinki, 7 March 2014 Jarmo Soukainen, Senior Director for Performance Audit Markku Turtiainen, Performance Audit Counsellor The audit was conducted by: Markku Turtiainen, Performance Audit Counsellor Vivi Niemenmaa, Principal Performance Auditor Audit steering and quality assurance: Arto Seppovaara, Director for Performance Audit Administrative sectors responsible for the audited activities: Ministry of the Environment Ministry of Transport and Communications Ministry of the Interior Keywords: oil spill response, shipping safety, management of oil waste from vessels, state responsibilities, liabilities Contents Main findings and opinions of the National Audit Office 9 1 Background to the audit 19 2 Audit framework 25 2.1 Description of the audited subject: system of managing oil spills from vessels 25 2.1.1 Overall management system 25 2.1.2 Main provisions of the management system 26 2.1.3 National actors 26 2.1.4 International actors 31 2.1.5 System for compensating for oil spills from vessels and funding of oil spill response preparedness 32 2.2 Geographic scope, audit questions, audit criteria, methods and material 36 3 Audit findings 39 3.1 The Gulf of Finland is a challenging environment for shipping and oil spill response 39 3.2 Prevention of oil spills and risk management 41 3.2.1 Oil spill response is part of the maritime safety policy 41 3.2.2 Pilotage and vessel inspections help to prevent accidents 42 3.2.3 Systems steering vessel traffic are a cost-effective way of reducing accidents 46 3.2.4 Aerial surveillance is technologically up to date and functions in a cost-effective manner 53 3.2.5 There is room for improvement in the preparation and content of the oil spill response plans 55 3.2.6 SÖKÖ projects have created operating models for coastal oil spill response and waste management but they have not been tested in practice 61 3.2.7 Cooperation between maritime authorities is functioning smoothly but there is friction between state-owned companies and the authorities 63 3.2.8 Finnish Environmental Institute develops oil spill response training 66 3.3 First response 67 3.3.1 In Finland's oil spill response strategy, priority is given to off- shore response 67 3.3.2 The preparedness of Estonia, Russia and EMSA are also relevant in off-shore response 71 3.3.3 The focus of purchases is shifting towards equipment used in the area between the archipelago and the open sea. 72 3.3.4 Purchasing a new oil spill response vessel is not always the most cost-effective option 79 3.3.5 There are no grounds for changing the existing stationing of the multi-purpose vessels 80 3.3.6 Oil spill response exercises are held on a regular basis 82 3.3.7 Oil spill response is well-organised and properly managed. However, SYKE has limited personnel resources 84 3.3.8 BORIS situation awareness system has been developed to support response operations 91 3.3.9 Research information on the risk management of oil spills from vessels is not relayed to the authorities in an effective manner 92 3.3.10 There is a need for response technology for winter conditions 94 3.4 Oil spill recovery 99 3.4.1 Municipalities have only limited resources for oil spill recovery. 99 3.4.2 Volunteers are an important resource 100 3.5 Management of oil waste from vessels 103 3.5.1 A major oil spill from a vessel generates large amounts of waste 103 3.5.2 Responsibilities in waste management are not clear 105 3.5.3 There are no concrete plans on the transport of oil waste from vessels 106 3.5.4 There are no adequate plans for the intermediate storage of oil waste 109 3.5.5 Mobile thermal desorption units would be quickest way to treat oil waste 110 3.5.6 Costs depend on the way in which oil waste from vessels is sorted 114 3.5.7 Legal provisions do not clearly differentiate between environmental clean-up and restoration procedures 115 3.6 Finnish Oil Pollution Compensation Fund 117 3.6.1 The fund has provided guarantees for purchases of oil spill response equipment and maintenance of response preparedness 117 3.6.2 Consideration has been given to the broadening of the financing base of the Finnish Oil Pollution Compensation Fund though the matter has not been discussed thoroughly enough. 120 3.6.3 The steering and activities of the Finnish Oil Pollution Compensation Fund could be improved 123 3.7 Overall costs and liability for damages in an oil spill from a vessel 127 3.7.1 The total costs of an oil spill can be high 127 3.7.2 International compensation system does not cover all costs 132 3.7.3 Municipalities do not have enough information on how to file claims 137 3.7.4 In major oil spills from vessels, help would also have to be sought from supplementary state budgets 139 Appendices 142 Sources 148 Main findings and opinions of the National Audit Office Management of and responsibilities for oil spills from vessels in the Gulf of Finland The volume of oil tanker traffic in the Gulf of Finland has increased in recent years, as Russia has built new oil ports in the far reaches of the sea area. It is estimated that the volume of oil shipments in the Gulf of Finland will increase from the current 160 million tonnes to 170–200 million tonnes in 2020. This coincides with a growth in other types of maritime transport, in particular passenger services between Helsinki and Tallinn. In the circumstances, there is a high risk of a major oil spill from a vessel, especially since the Gulf of Finland poses a number of challenges as an environment for shipping. The state may end up funding the costs of a major oil spill from a vessel, at least on a temporary basis. The hidden risk lies in that all costs of oil spill response and damages may not be recovered, and ultimately the state may be left to foot the bill. At worst, a major oil spill may result in costs amounting to billions of euros. The main question on which the audit focused was the following: Is the system for managing oil spills from vessels in the Gulf of Finland efficient? The system for managing off-shore oil spills from vessels comprises a number of actors. The Ministry of the Environment is in charge of the general steering, monitoring and development of actions to combat oil and chemical spills from vessels. The principal authority in charge of combating oil spills from vessels is the Finnish Environment Institute, which directs the off-shore oil spill response efforts and appoints the person in charge of them. The Finnish Defence Forces and the Finnish Border Guard also take part in combating oil spills from vessels. Coastal and archipelago oil spill response is within the remit of the rescue services in the relevant area whereas the local authorities are responsible for oil spill recovery and the management of vessel oil waste in their areas. Shipping safety and vessel traffic control as part of the oil spill management system are within the remit of the Ministry of Transport and Communications. The Finnish Transport Agency's Vehicle Traffic Service is a key actor in the prevention of oil spills from vessels. The Finnish Transport Safety Agency supervises ship safety, which plays a major role 9 in preventing shipping accidents.

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