Chinese Fishermen Sue ConocoPhilips Over Spill

    
Wall Street Journal, July 4, 2012

 

By JAMES T. AREDDY

SHANGHAI—A group of Chinese fishermen filed suit against ConocoPhillips Inc.COP -1.23% in the U.S. over an oil spill in China last year, potentially reviving legal challenges months after the company signaled they were largely settled.

The suit, filed in a Houston federal court on Monday, was filed by 30 fishermen and blames ConocoPhillips for the spills around offshore production platforms the U.S. company operates in north China's Bohai Bay. The suit doesn't specify monetary damages being sought but states each of the fishermen suffered at least $50,000 in losses associated with the spill. A Beijing-based lawyer who has advised the fisherman, Jia Fangyi, said Wednesday the plaintiff list and the amounts may grow.

In a statement, ConocoPhillips said, "The company has yet to be served with this lawsuit, but based upon reports of the claims, they are not appropriate for U.S. courts and should be dismissed."

In past statements, ConocoPhillips has expressed its remorse about the incident. It has also downplayed the environmental damage, by noting much of the oil and drilling fluids that leaked were quickly captured.

The case could mark a fresh headache for ConocoPhillips over the Bohai spill. In April, ConocoPhillips said it agreed with Chinese authorities to resolve "all pending governmental claims" with payments totaling $191 million.

The plaintiff group isn't seeking damages against China National Offshore Oil Corp., a Chinese company known as Cnooc that owns 51% of the field. ConocoPhillips owns a 49% stake and operates the field. Cnooc agreed to pay $76 million for its part of the settlements.

The field, one of China's largest offshore production bases and known as Peng Lai 19-3, hasn't produced for around a year due to the accident.

The suit was filed in ConocoPhillips's hometown of Houston because the company made decisions on how to operate the field from there, according to the lawsuit. The suit cites an estimate by a Chinese research institute that the spill amounted to 50,000 metric tons, or more than 100 times what it says was disclosed by the U.S. company.

Chunks of the lawsuit are devoted to criticizing Chinese judicial, regulatory and environmental institutions, for instance by alleging the fishermen were misled by Chinese oceanic regulators and ignored by Chinese courts. It says the settlement this year by ConocoPhillips with Chinese authorities doesn't help this group of fishermen.

"This suit is the only chance a group of fishermen has to get justice for the devastating effect on their lives of a series of massive oil spills," said the suit, which added, "plaintiffs enter this American court only because the Chinese government has blocked access to its own court system."

 
 
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