Victor Kgomoeswana
Somebody must get tough on Mitsui OSK Lines (MOL), the Japanese company that operates MV Wakashio, for the oil spill that threatens the floundering livelihood of Mauritius.
MOL operates the ship that hit a coral reef in Mauritius on July 25, on behalf of an associate company of Nagashiki Shipping Company Ltd Mauritius, one of Africa’s most prosperous countries, relies 75% on the services industry - with (marine) tourism and fishing-related activities at the heart of its revenue mix and its journey to being Africa’s most attractive and easiest place to do business.
Mauritius estimated the contribution of tourism last year at 63billion rupees (nearly R30bn), with Covid-19-induced losses of foreign exchange in June and last month already at 12billion rupees. MOL/Nagashiki has more questions to answer than simply saying it feels “its responsibility acutely and intends to take steps towards assessing compensation” for spilling about 1000 tons of oil, according to a Reuters report.
The AU, especially its powerful member states like South Africa, ought to not fall into the trap of accepting the first offer of settlement from Nagashiki. Why?
Nagashiki is not a small company. Large multinational corporations have sleek lawyers who specialise in first evading liability or dropping it to the bare minimum in instances of this nature. When a multinational talks settlement even before the oil spill has been cleaned, look out. It might be aware that the liability is bound to be much higher than it is offering. Bear in mind that when BP spilled oil in the Gulf of Mexico in April 2010’s Deepwater Horizon incident, it ended up paying $18.7bn in fines in 2015, while the cost of the accident in penalties, clean-up and others exceeded $60bn.
Nagashiki should be praised for emptying the rest of the 4000 tons of oil from the MV Wakashio, averting a worse disaster, but there are too many red flags still. The first is that MOL might be a repeat offender; another ship it operated sank in the Indian Ocean in 2013, while in 2006 its crude oil tanker was damaged while trying to rescue the crew of another ship. The second is that a report in the Japan Times states that Nagashiki operates “740 vessels around the world”, including the MV Wakashio. If this ship “had passed its latest annual inspection in March without any problems, according to Japan’s ClassNK inspection body”, why was it sailing under a Panama flag of convenience (FOC)?
Wikipedia defines FOC “as business practice whereby a ship’s owners register a merchant ship in a ship register of a country other than that of the ship’s owners (in this case, Japan)”. It even traces the origin of this practice to the 1920s, when companies in the same business as MOL wanted to serve alcohol (illicitly) to passengers during the Prohibition era in the US.
Why would a company whose ship has passed inspection standards in its home country (Japan) deploy the MV Wakashio under the identity of another country, especially Panama, if not to cut corners? Ships operating under a FOC sometimes engage in illegal activities like environmental degradation and illegal fishing, which was how Somali piracy came about.
The corrective and restorative action in this case must be to ensure that this Wakashio oil spill was not part of another, bigger ploy to undermine Africa’s economic, environmental and cultural heritage.
* Victor Kgomoeswana is author of Africa is Open for Business, media commentator and public speaker on African business affairs.