Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 7)
[2021] FCA 237
•19 March 2021
FEDERAL COURT OF AUSTRALIA
Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 7) [2021] FCA 237
File number: NSD 1245 of 2016 Judge: YATES J Date of judgment: 19 March 2021 Catchwords: REPRESENTATIVE PROCEEDINGS – common law negligence – oil spill from an oil well within the offshore area of the Territory of Ashmore and Cartier Islands – where the respondent was the holder of a petroleum production licence for an area covering the Montara oil field where the well was located – where the respondent had the responsibility to exercise control over the suspension and operation of the well – whether oil from the spill reached the coastal areas of the Regencies of Kupang and Rote in Indonesia – whether oil from the spill caused or materially contributed to the death and loss of seaweed crops in those areas – where the applicant and Group Members are seaweed farmers – whether the respondent owed the applicant and Group Members a duty of care – whether the respondent breached its duty of care – whether the applicant has established that he suffered loss and damage – assessment of the applicant’s damages Legislation: Environment Protection and Biodiversity Conservation Act 1999 (Cth)
Federal Court of Australia Act 1976 (Cth)
Offshore Petroleum Act 2006 (Cth)
Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) s 569
Petroleum (Submerged Lands) (Management of the Environment) Regulations 1999 (Cth) reg 14(8)
Limitation Act 1981 (NT) s 44
Cases cited: Bryan v Maloney (1995) 182 CLR 609
Caltex Refineries (QLD) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649
Chapman v Hearse (1961) 106 CLR 112
Fink v Fink (1946) 74 CLR 127
Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft [2018] FCAFC 183; 267 FCR 428
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 16) [2017] WASC 340
Perre v Apand Pty Ltd [1999] HCA 36; 198 CLR 180
Place (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; 196 ALR 257
Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 3) [2017] FCA 1272
Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 6) [2019] FCA 1853
Shirt v Wyong Shire Council [1978] 1 NSWLR 631
The Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64
The Council of Wyong Shire v Shirt (1980) 146 CLR 40
Date of hearing: 17 to 19, 24 to 28 June 2019
1, 8, 9, 11 July 2019
21 to 25, 28 to 30 October 2019
2, 3, 5, 6, 11 to 13 December 2019Registry: New South Wales Division: General Division National Practice Area: Other Federal Jurisdiction Category: Catchwords Number of paragraphs: 1171 Counsel for the Applicant: Mr J Sexton SC with Ms V Bosnjak and Ms Z Hillman Solicitor for the Applicant: Maurice Blackburn Counsel for the Respondent: Mr C Scerri QC with Mr J Arnott and Mr A Barraclough Solicitor for the Respondent: Allens
Table of Corrections 27 October 2021 In the last sentence of paragraph 865, the word “modelling” has been inserted after “Dr Hubbert’s”. ORDERS
NSD 1245 of 2016 BETWEEN: DANIEL ARISTABULUS SANDA
Applicant
AND: PTTEP AUSTRALASIA (ASHMORE CARTIER) PTY LTD (ACN 004 210 164)
Respondent
JUDGE:
YATES J
DATE OF ORDER:
19 MARCH 2021
THE COURT ORDERS THAT:
1.The proceeding be listed for the purpose of receiving further submissions on Common Questions 3 and 4 referred to in the reasons for judgment published today, and on the question of interest up to judgment in relation to the damages to be awarded to the applicant, if that question is in dispute.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
INTRODUCTION
[1]
HOW THE MONTARA OIL SPILL OCCURRED
[8]
THE OSCP
[38]
CHEMICAL COMPOSITION: AN OVERVIEW OF THE CHEMICAL COMPOSITION AND PHYSICAL PROPERTIES OF FRESH AND WEATHERED MONTARA OIL
[56]
THE ROTE/KUPANG REGION OF INDONESIA
[78]
ASPECTS OF THE SEAWEED INDUSTRY IN INDONESIA
[85]
THE CONDUCT OF THE HEARING
[103]
The lay evidence
[104]
The expert evidence
[106]
The applicant’s expert evidence
[108]
The respondent’s expert evidence
[132]
THE LAY EVIDENCE
[144]
The applicant’s evidence
[144]
The applicant’s education and life before seaweed farming
[145]
Seaweed farming
[149]
The applicant’s business practices
[158]
The oil
[160]
After the oil
[164]
The effect of the oil in 2009 on the applicant’s life and income
[167]
Cross-examination
[168]
The evidence of other seaweed farmers, village heads and other lay observers
[171]
THE VOLUME OF OIL SPILLED
[251]
Introduction
[251]
Oil volume flow rate calculation
[255]
Professor Wereley’s analysis and calculations
[255]
Criticism of Professor Wereley’s analysis and calculations
[263]
Professor Wereley’s response
[276]
The Joint Report on Volume
[288]
Material balance calculation
[304]
DISPERSANTS
[322]
SATELLITE IMAGERY
[364]
THE OIL SPILL TRAJECTORY MODELLING EVIDENCE
[423]
Introduction
[423]
Dr Hubbert’s modelling
[438]
Dr French-McCay’s modelling
[450]
Criticism of Dr Hubbert’s modelling
[472]
Dr Hubbert’s response
[491]
Criticism of Dr French-McCay’s modelling
[505]
THE MODELLING OF OCEAN CURRENTS
[509]
Introduction
[509]
Ocean circulation in the Timor Sea region: the ITF
[513]
Professor Ivey’s modelling
[534]
Professor Ivey’s criticism of GCOM3D
[536]
Dr Hubbert’s response
[541]
Dr Hubbert’s criticism of SUNTANS
[542]
Dr Sprintall’s criticism of SUNTANS
[548]
THE JOINT REPORT ON CURRENTS
[549]
Methodology
[552]
Data
[584]
Model predictions
[590]
TRACKING BUOY DATA
[602]
LAGRANGIAN COHERENT STRUCTURES
[616]
GIS MAPPING
[618]
FINDINGS AND CONCLUSIONS ON TRAJECTORY MODELLING
[622]
THE WEATHERING OF MONTARA OIL
[678]
Introduction
[678]
The Leeder Reports
[684]
Dr Stout’s analyses
[692]
Criticisms of Dr Stout’s long-term weathering study
[715]
Dr Stout’s response
[722]
Conclusions on Dr Stout’s long-term weathering study
[728]
THE LEMIGAS ANALYSES
[736]
Conclusion
[748]
THE SIBERT SAMPLE
[751]
EXPERT COMMENTARY ON THE LAY OBSERVATIONS OF OIL
[763]
Professor Ball’s evidence
[763]
Dr Fingas’ evidence
[770]
Dr Taylor’s evidence
[775]
Dr Maki’s evidence
[798]
Professor Ball’s response
[803]
Dr Fingas’ response
[811]
Dr Thorhaug’s evidence
[813]
DID MONTARA OIL REACH THE ROTE/KUPANG REGION?
[814]
The applicant’s submissions
[814]
The respondent’s submissions
[822]
Conclusion
[828]
TOXICOLOGY EVIDENCE
[869]
Introduction
[869]
Adhesion
[874]
PAHs in the wax-enriched fraction
[892]
The Microtox test
[897]
The Toxic Units Model
[907]
Brown kelp as a surrogate for red seaweed
[936]
The relevance of other oil spill studies and the persistence of spilled oil
[950]
The opinions of the experts: summary
[966]
Other explanations for seaweed death and damage
[976]
Natural oil seeps
[977]
Ship traffic
[981]
Coral spawning
[984]
Ice-ice, sea temperatures, and climate change
[990]
Ocean acidification
[1003]
DID MONTARA OIL CAUSE OR MATERIALLY CONTRIBUTE TO THE LOSS OF SEAWEED IN THE ROTE/KUPANG REGION?
[1008]
DID A DUTY OF CARE EXIST?
[1020]
WAS THE DUTY OF CARE BREACHED?
[1044]
WERE THE APPLICANT’S SEAWEED CROPS DAMAGED BY MONTARA OIL?
[1051]
DAMAGES
[1052]
Introduction
[1052]
The calculation of actual production and profit
[1060]
2008
[1062]
2009
[1081]
2010
[1089]
2011
[1093]
2012
[1100]
2013
[1121]
2014
[1129]
Estimate
[1136]
Projected production and profit
[1139]
The calculation of loss
[1159]
ANSWERS TO THE COMMON QUESTIONS
[1163]
CONCLUSION AND DISPOSITION
[1171]
SCHEDULE A
SCHEDULE B
SCHEDULE C
YATES J:
INTRODUCTION
This proceeding is a representative proceeding brought under Pt IVA of the Federal Court of Australia Act 1976 (Cth). It concerns alleged damage to seaweed farming activities in Indonesia. This damage is said to have occurred from an oil spill at the Montara oil field operated by the respondent, PTTEP Australasia (Ashmore Cartier) Pty Ltd.
In early 2009, the respondent set about suspending an oil well, referred to as the H1 Well, in the oil field. There were certain failures in this process which led, in August 2009, to a well blowout and the uncontrolled spill of hydrocarbons from the well, which remained unabated for more than 10 weeks.
The applicant’s case is that the respondent owed him and the Group Members a duty of care in respect of the suspension and operation of the H1 Well, and that it breached that duty. He says that oil from the blowout reached certain areas in Indonesia, including the southern coastal area of Rote, an island where he lives and carries on his occupation as a seaweed farmer. He alleges that the oil killed, and caused a drop in the production of, his seaweed crop and the seaweed crops of the Group Members.
The cause of action on which the applicant relies is common law negligence. He claims damages. He commenced this proceeding after the expiration of the applicable limitation period. On 15 November 2017, the Court made an order pursuant to s 44 of the Limitation Act (NT) 1981 extending the limitation period in respect of his claim: Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 3) [2017] FCA 1272. At the present time, the limitation period has not been extended in respect of any Group Member.
The respondent denies liability. It accepts that it was negligent in suspending and operating the H1Well, but it contends that it did not owe the alleged duty of care to the applicant or the Group Members. Further, it contends that even if a duty of care was owed and breached, the evidence before the Court does not establish that any oil spilled from the H1 Well reached the areas in Indonesia, which the applicant specified in Schedule 1 to the further amended statement of claim as areas that were reached by the oil. It also contends that, even if any of the spilled oil reached any of those areas, it would not have been in a concentration or form that would have been toxic to the seaweed crops in place at that time. Finally, it contends that the applicant’s claim of loss is not supported.
The applicant originally pleaded and advanced a case that dispersants applied to the oil at the time of the spill also reached Indonesian waters and killed, and caused a loss in the production of, the seaweed crops. In the course of oral closing submissions, the applicant made clear that he no longer advances that case.
For the reasons that follow, I am satisfied that the respondent owed a duty of care to the applicant and the Group Members, and that it breached that duty. I am satisfied that oil spilled from the H1 Well blowout reached certain areas of Indonesia (which areas are in a region conveniently described as the Rote/Kupang region), including the area where the applicant grows his seaweed crop. I am satisfied that this oil caused or materially contributed to the death and loss of his crop. I am satisfied that, although difficult to assess, and although attended with uncertainty, the applicant’s loss can be calculated, and that he is entitled to an award of damages.
HOW THE MONTARA OIL SPILL OCCURRED
The Montara oil field is located within the offshore area of the Territory of Ashmore and Cartier Islands, approximately 250 km northwest of the Western Australian coast and approximately 700 km from Darwin, within Australian territorial waters in the Timor Sea. It is about 100 km from Cartier Island and 150 km from the Ashmore Reef, within an area characterised by significant oil and gas reserves known as the Bonaparte Basin.
In September 2003, the respondent (which at the time was known by the name Coogee Resources (Ashmore Cartier) Pty Ltd) acquired the retention lease for the Montara oil field. Between September 2003 and August 2009, it developed the field for oil production. As part of this process, it engaged Atlas Drilling (S) Pte Ltd (Atlas) in early 2009 to drill four production wells (referred to in these reasons as the H1 Well, the H2 Well, the H3 Well and the H4 Well), as well as a gas injection well. The H1 Well is the oil well with which this proceeding is concerned.
The procedure for drilling the H1 Well was as follows. A drilling rig (here, the West Atlas rig operated by Atlas) was moved to the position at which the well was to be constructed. A drill from the rig was used to bore a hole into the sea bed, to access the hydrocarbon reservoir from which oil was to be produced. A steel pipe casing (being lengths of steel pipe joined together, usually by screws, and often referred to as the casing string) of a slightly smaller diameter than the resulting hole was inserted into the hole. In the H1 Well, the first casing string was 13 3/8” in diameter (the 13 3/8” casing string). Cement was pumped into the lowermost joints of the 13 3/8” casing string to form a casing shoe. The cement occupied the joints, and the bottom part of the area between the hole that had been bored and the casing string (the annulus). A narrower hole was drilled through the cement in the casing shoe and further into the sea bed, and a second casing string was inserted into the hole to create a new casing string of narrower diameter. In the H1 Well, this second casing string was 9 5/8” in diameter (the 9 5/8” casing string).
As at 18 January 2009, the respondent intended to suspend the H1 Well. The suspension of an oil well involves a process of capping (that is, effectively “plugging”) the well to prevent the release of hydrocarbons, pending later completion of the work required for actual production of oil through the well. The respondent intended to suspend the well by using cement in the 9 5/8” casing shoe as the primary control barrier, and a shallow set cement plug from 160 m to 115 m as the secondary control barrier.
However, at some point between January and March 2009, the respondent determined to use a pressure-containing anti-corrosion cap (PCCC) on each of the casing strings as the secondary control barrier rather than the concrete plug. This decision was made notwithstanding the fact that the manufacturer of the PCCCs, which the respondent proposed to use, did not intend that PCCCs be used as a barrier against the uncontrolled release of hydrocarbons and did not design the PCCCs for that purpose; there was no practicably available test that could verify the internal pressure-containing capability of a PCCC; and, unlike other forms of secondary barriers (including concrete plugs), PCCCs were required to be removed prior to a casing string being tied back to a wellhead platform. “Tying back” a casing string involves adding more casing string to extend the well back up to the mezzanine deck on the wellhead platform. The fact that the PCCCs were required to be removed meant that no secondary barriers would be in place during the tying back process.
On 6 March 2009, the respondent applied to the Director of Energy, Department of Regional Development, Primary Industry, Fisheries and Resources of the Northern Territory (Director of Energy), who holds the responsibilities of the Designated Authority under the Offshore Petroleum Act 2006 (Cth) and the Petroleum (Submerged Lands) (Management of Well Operations) Regulations 2004 (Cth) in respect of the area within which the Montara oil field is located, for approval to suspend the H1 Well, on the basis that the planned suspension would occur in two stages. The first was to involve the cementing and pressure testing of the 9 5/8” casing string, followed by the installation of a PCCC on that casing string. The second was to involve the installation of a second PCCC on the 13 3/8” casing string. The Director of Energy gave the respondent preliminary approval for suspension of the H1 Well in response to this suspension application.
On 12 March 2009, the respondent made a further application to the Director of Energy for approval to suspend the H1 Well. Also on that day, the respondent issued a formal change control order to Atlas, which specified that the shallow set cement plug which had been proposed to be used as a well control barrier in the process of suspending the H1 Well was to be replaced by PCCCs on each of the casing strings.
On 13 March 2009, the Director of Energy granted the respondent approval to suspend the H1 Well consistently with the applications it had lodged on 6 and 12 March 2009.
Between 2 and 7 March 2009, the H1 Well was drilled to a depth of approximately 3,796 m, with a total vertical depth of approximately 2,654 m.
At this time, the foot of the 9 5/8” casing string was in the reservoir for the well, at a point that was 3 m above the point where oil and water came into contact. The 9 5/8” casing string shoe was in a horizontal position. The effect of this arrangement was that the casing string provided a potential pathway for hydrocarbons to enter the H1 Well.
On 7 March 2009, the respondent installed a float collar. This comprised two float valves, which were to act as one way valves to allow cement to be pumped beneath the float collar without the cement returning up the casing string, to create the cement shoe that was intended to be the primary barrier controlling the release of hydrocarbons from the H1 Well. The float collar made provision for two plugs (a bottom plug and top plug) which were intended to lock, following the pumping of cement into the 9 5/8” casing string shoe, to create a seal within that casing string. The respondent then pumped cement into the 9 5/8” casing string shoe. The cement travelled through the end of the 9 5/8” casing string and up into the annulus of that casing string. Some of the cement remained in the casing string to fill the space between the float valves. This cement formed the cement shoe. Following the pumping of the cement, approximately 9.25 barrels (bbl) of displacement fluid (consisting of inhibited seawater) were pumped into the 9 5/8” casing string for the purpose of pressure testing. The pressure in the casing string was held at 4,000 psi for approximately 10 minutes.
It is convenient at this point to note that when a casing string shoe is cemented, two forms of cement are usually used in concert: lead cement, which is pumped into the casing string first, followed by tail cement, which has a higher density and thickening time than the lead cement.
In the case of the H1 Well, the respondent’s Well Construction Standards provided that, in cementing the 9 5/8” casing string shoe, tail cement be placed within the annulus outside the casing string to a height of 100 m above the top of the hydrocarbon reservoir. However, in this case the respondent determined to place tail cement within the annulus to a height of only 69 m above the top of the hydrocarbon reservoir. To achieve this, the required volume of tail cement was 199 bbl. In addition, when cementing the shoe, the respondent incorrectly pumped only 132 bbl of tail cement, causing the cement to reach a height of only 61 m below the top of the hydrocarbon reservoir. As a result of this failure, hydrocarbons in the reservoir for the H1 Well were permitted to leach into the annulus outside the 9 5/8” casing string and compromised the integrity of the cement shoe.
At around 2.40 pm on 7 March 2009, the pressure in the 9 5/8” casing string was released and 16.5 bbl of fluid were returned up the casing string, comprising the 9.25 bbl of displacement fluid which had been pumped into the casing string and approximately 7.25 bbl of fluid consisting of a combination of cement and leached hydrocarbons. This return of fluid indicated that both the float valves in the 9 5/8” casing string shoe and the plugs in that shoe had failed.
At around 2.45 pm on 7 March 2009, the 16.5 bbl of fluid which had been returned from the 9 5/8” casing string were pumped back into that casing string. The casing string was then closed while the cement set. The effect of pumping the returned fluid back into the 9 5/8” casing string was that approximately 9.25 bbl of inhibited seawater and approximately 7.25 bbl of cement and leached hydrocarbons were forced beneath the float collar within the 9 5/8” casing string, thereby displacing cement from the 9 5/8” casing string shoe. This caused a situation known as “wet shoe”, meaning that the areas within the casing string shoe that should have consisted of cement were partly cement and partly other material, including inhibited seawater and leached hydrocarbons. The displaced cement was forced into the annulus of the 9 5/8” casing string. The top and bottom plugs in the 9 5/8” casing string shoe did not lock. The cement shoe was then subjected to pressure at 1,350 psi while the cement set.
Later on 7 March 2009, the respondent was provided with a report that set out the events that had occurred during the course of the attempt to install the cement shoe. Further reports detailing the process of the cement shoe installation were prepared by the Day Drilling Supervisor and provided to the respondent. No further testing or assessment of the cement shoe was undertaken by the respondent or any other person on its behalf.
It is clear that the respondent was informed of the process by which the cement shoe had been installed on 7 March 2009. The respondent knew, or ought to have known, that the cement shoe lacked integrity and could not be relied upon to control the release of hydrocarbons from the H1 Well. Despite this, from the period March 2009 to August 2009, the respondent relied on the cement shoe as an effective primary control barrier against the release of hydrocarbons from the H1 Well.
In addition to the cement shoe, the respondent’s application to suspend the H1 Well was approved, as I have said, on the basis that it put in place a secondary control barrier, being the installation of one PCCC on the 9 5/8” casing string and one PCCC on the 13 3/8” casing string.
Sometime in March 2009, presumably after 12 March 2009, the respondent determined not to install a PCCC on the 13 3/8” casing string. Following the installation of the cement shoe on the H1 Well as described above, the respondent removed the upper section of the 9 5/8” casing string and installed a PCCC on that casing string. That PCCC was not tested or verified in situ. The respondent also removed the upper section of the 13 3/8” casing string, but did not install a PCCC on the remaining casing string.Nevertheless, during the period March 2009 until August 2009, the respondent relied on the PCCC installed on the 9 5/8” casing string as an effective secondary control barrier against the release of hydrocarbons from the H1 Well.
The “overbalancing” of fluid in a casing string, in which the hydrostatic pressure of the fluid in the casing string is greater than the pressure of the hydrocarbon reservoir (with an appropriate safety margin), may be used as a control barrier against the uncontrolled release of hydrocarbons.
During the period from March to August 2009, the fluid used in the 9 5/8” casing string consisted of seawater, the normal pressure of which is 1.02 – 1.03 sg. The pore pressure within the hydrocarbon reservoir for the H1 Well was 1.04 sg. As a result, the H1 Well was not overbalanced and was not capable of providing a pressure-based barrier to the release of hydrocarbons from the reservoir. Further, neither the respondent nor any person on its behalf had tested or monitored the pressure of the fluid inside the 9 5/8” casing string, and the fluid inside the casing string had not been verified as being in overbalance. Nevertheless, the respondent mistakenly relied on the fluid inside the 9 5/8” casing string as an effective barrier against the release of hydrocarbons from the reservoir.
In sum, in suspending the H1 Well in March 2009, the respondent relied upon three control barriers to prevent the uncontrolled release of hydrocarbons from the reservoir under the well: the cement shoe; the PCCCs; and the fluid inside the 9 5/8” casing string. None of these control barriers had been tested. Each of them was deficient. One had not even been installed (the PCCC which was to have been installed on the 13 3/8” casing string).
On 21 April 2009, the West Atlas rig left the Montara oil field.
Around 7 July 2009, the respondent applied to the Director of Energy for approval of its drilling program in respect of the Montara oil field. Among other things, the application included a diagram which indicated that PCCCs had been installed on both the 9 5/8” casing string and the 13 3/8” casing string. The application was approved on 13 July 2009.
On 19 August 2009, the West Atlas rig returned to the Montara oil field to allow the respondent to tie back the casing strings for each of the five wells (the H1 Well, the H2 Well, the H3 Well, the H4 Well and the gas injection well), so as to complete the wells to the point of production.
At around 4.30 am on 20 August 2009, the West Atlas rig moved over the H1 Well. Upon examination by the respondent, it was discovered that the PCCC for the 13 3/8” casing string had not been installed, and as a result the inner threads of the uppermost portion of that casing string had rusted or corroded. In order to tie the corroded casing string back to the Montara wellhead platform, it was necessary for the threads on that casing string to be cleaned, which necessitated the removal of the PCCC on the 9 5/8” casing string. The removal took place at around 11.30 am on 20 August 2009. It was determined by the respondent that the PCCC should not be reinstalled. The PCCC was correspondingly not immediately re-installed, as it should have been. At this point, the only remaining control barrier against the release of hydrocarbons from the H1 Well reservoir was the cement shoe.
At around 5.00 pm on 20 August 2009, the West Atlas rig left the H1 Well.
At approximately 5.30 am on 21 August 2009, the cement shoe at the H1 Well failed and there was a release of hydrocarbons from the H1 Well, the volume of which the respondent estimated to be between 40 and 60 bbl. At around 7.23 am on 21 August 2009 there was a further, larger release of hydrocarbons from the H1 Well.
In response to the two releases of hydrocarbons from the H1 Well (together, the Montara oil spill), the respondent and Atlas evacuated 69 personnel from the West Atlas rig and the Montara wellhead platform.
The uncontrolled release of hydrocarbons from the H1 Well flowed for a period in excess of 10 weeks from August 2009 until around 3 November 2009. The volume of oil released into the environment from the wellhead is a contested question about which a large body of evidence was adduced. I will return to the question of volume later in these reasons.
THE OSCP
The development of the Montara oil field required approval under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act). This approval was given on 3 September 2003. It was a condition of the approval that the respondent submit an oil spill contingency plan detailing the strategy that the respondent had in place to mitigate the environmental effects of any hydrocarbon spills.
On 5 June 2009, the Assistant Secretary of the Environmental Assessment Branch of the Department of the Environment and Water Resources approved an oil spill contingency plan submitted by the respondent on 19 May 2009 (the OSCP). The OSCP was a revision (Version 5, dated 1 April 2009) of earlier plans that the respondent had prepared.
At the time, the Australian regulatory framework did not prescribe the contents of oil spill contingency plans. The Petroleum (Submerged Lands) (Management of the Environment) Regulations 1999 (Cth) simply required the maintenance of an up-to-date emergency response manual that included an oil spill contingency plan: reg 14(8).
The respondent adduced evidence through Dr Elliott Taylor, an expert in (amongst other things) oil spill contingency planning and response, that the OSCP was, as at August 2009, reasonable, functional and comprehensive, and both met and exceeded planning requirements specified in Australia at the time. Dr Taylor also said that the OSCP was aligned with generally accepted oil field practices, with best international practices for offshore oil spill contingency plans in place at the time, and with Australia’s National Plan to Combat Pollution of the Sea by Oil and Other Noxious Substances (the National Plan). The National Plan has operated since 1973 and is managed by the Australian Maritime Safety Authority (AMSA). It is the national integrated government and industry consultative framework regarding marine pollution preparedness and the response to the threat posed to the marine environment by oil and chemical spills.
The respondent relied on the OSCP to support its case that it did not owe a duty of care to the applicant and Group Members. I will discuss that case in a later section of these reasons. For present purposes, I draw attention to the fact that the OSCP provided oil trajectory information. This information included oil trajectory modelling.
A fundamental aspect of oil spill contingency planning is the assessment of the risks posed by various uncontrolled spill scenarios. Oil spill response planners use a hazard assessment to identify potential spill sources and the volumes of oil related to each source for a particular operation. A worst-case spill scenario is typically used to assess the potential area of influence of a major spill through oil spill trajectory modelling. In practice, this modelling typically assumes little or no intervention to contain, collect or treat the spilled oil, other than eventually stopping the spill at its source. Put another way, the modelling assumes that the spilled oil is subjected to natural environmental processes only. Dr Taylor’s evidence was that no oil spill contingency plan is expected to identify all potential spill scenarios or outcomes. Rather, the plan is intended to ensure that mechanisms for a scalable response are in place.
The OSCP was prepared in the context of the National Plan, which classifies oil spills according to a three-tiered system. As described by Dr Taylor, Tier 1 is for spills of less than 10 m3. Typically, this might be a spill in the course of ship transfer or bunkering at a jetty or mooring. Tier 2 is for spills of 10 to 1000 m3. Typically, this might involve shipping incidents in ports, pipeline failures or nearshore exploration or production. Tier 3 is for spills greater than 1000 m3. This is regarded as a major incident, typically involving tankers or vessels with large bunker oil volumes. Such incidents might also include, for example, collisions or vessel loss, or well blowout.
The National Plan itself is not directed to specific spill sources or volumes for tiered response planning purposes. In short, any spill over 1000 m3 would be considered a Tier 3 incident. Indeed, in respect of designed spill size, the National Plan provides (Section 1, para 1.6):
1.6The National Plan is established to respond to oil spills of any size in Australian waters. For planning and operational reasons and based on the experience of spills in Australia and international criteria, a designed spill size of 21,000 tonnes [approximately 24,000m3] exists. This has been determined by National Plan stakeholders taking into account current ship type and equipment holdings and is endorsed by the Australian Transport Council … as the appropriate level for which to plan equipment and other resource requirements. Additionally, arrangement are in place to augment this capacity from overseas equipment stockpiles should any incident exceed Australia’s resource capability.
A report dated 4 April 2003, which was prepared by URS Australia Pty Ltd to provide preliminary information in relation to the drilling of the H1, H2 and H3 Wells, as required under the EPBC Act (the URS Report), states (at 6.4.2.4):
6.4.2.4 Well control
With current technology, the risk of a well blowout is considered low. There are elaborate monitoring systems to detect potential blowouts and such events can occur only if all of the monitoring systems fail and if the casing, wellhead or blow-out preventers (BOPs) fail catastrophically. The occurrence of such circumstances has been greatly reduced by improved back-up systems. The risk is further reduced when knowledge of the underlying stratigraphy and formation pressures is available as a result of previous drilling nearby. Such knowledge is available to Newfield through the drilling results of previous wells in the vicinity of the Licence Area and this knowledge has been used in designing the drilling programme.
No shallow gas has been encountered in previous drilling.
Loss of well control could potentially result in substantial release of hydrocarbons to the environment. However, modern techniques have reduced the possibility of a blow-out to a minimal level and a blow-out has never occurred in all of the wells drilled off the Western Australian coast. A blow-out can occur only in the extremely unlikely event that all systems fail and warning signs are ignored. The probability of a blow-out is minimised by:
•testing the BOP before starting the operation and regularly during the operation;
•pressure testing of casing strings;
•continuous monitoring for abnormal pressure during drilling; and
•providing mandatory training for the drill crew in safety procedures.
Should a blow-out occur, the volume spilled will depend on the permeability of the producing formation, the thickness of the encountered producing interval, the viscosity of the oil, the number and type of obstructions in the well hole, and the time taken to regain control and seal off the well bore. Drilling of directional ‘interception’ or relief wells to stop the flow can be undertaken, but this is considered the last resort as this operation can take several weeks to complete.
Data collected by the WA MPR on offshore exploratory and production drilling in Western Australia show that no significant oil spills have been associated with a total of over 400 offshore wells drilled to date. No major oil spill from offshore drilling operations has been known to occur in Australia.
In almost 30 years of operation, the oil and gas industry in Australia has drilled over 1,500 exploration and development wells and produced over 3,500 million barrels (556,500 ML) of oil. During this same period, the total amount of oil spilled to the marine environment from all offshore oil exploration and production activities has been estimated to be less than 1000 barrels (159,000 L), with the majority of these spills occurring during production activities (Volkman et al. 1994).
Six blow-outs have occurred in Australia, of which three occured during exploration drilling. All six were gas blow-outs and none resulted in an oil spill. There have been no blow-outs in Australia since 1984, which is evidence of the technological and procedural improvements that have occurred over the last two decades.
These statistics led the Independent Scientific Review of the Environmental Effects of the Australian Oil Industry (Swan et al. 1994) to conclude: “there is minimal oil spill threat caused by Australian explorers”.
Dr Taylor relied on the URS Report to understand the sources of information used in developing the OSCP. He accepted the results and information presented in the report as being “professionally complete and correct”.
As is clear from the above quote, the URS Report proceeded on the basis that the risk of a well blowout would be “low”. Indeed, in a later part of the report, URS concluded that such an event would be “rare”. On the other hand, URS concluded that spills from the transfer of produced crude oil from a floating production, storage and offloading (FPSO) vessel would be the main source of spills in oil production operations.
Proceeding on this basis, the OSCP posited the maximum realistic spill event (i.e., the worst-case scenario) to be the total loss of crude oil from one wing tank of the Montara Venture FPSO, representing 15,000 m3 of Montara crude oil spilled over a period of 12 hours. The OSCP included trajectory modelling which investigated such a spill over seven days. In his evidence, Dr Taylor pointed out that this assumed spill volume was much larger than the spill records from blowouts registered in Australia over the preceding decades.
The results of the modelling illustrated the probability that spills may be transported to different locations around the well. At para 2.3.4, the OSCP stated:
…
The results of the surface slick modelling indicated that spills of oil from Montara are unlikely to impact on the nearest shorelines (Hibernia Reef, Ashmore Reef and Cartier Islands). The shorelines of Australia, Timor and the Indonesian Islands were all predicted to be at no risk whatsoever.
During winter the overall tendency for oil spills is to move in a south-westerly direction driven by a combination of prevailing winds and the tides. The ebb and flood of the tide through this area is in a north-south direction whilst during winter the dominant prevailing winds vary from northeast to east. The combination of these two forces, together with the tendency for surface currents to bend to the left of the wind direction as a result of coriolis forcing, produces this result.
During summer the tendency is in the opposite direction, to the north-northeast. Again this result is due to the direction of the ebb tide (approximately north) and the prevailing southwest and westerly winds. The steering of surface currents to the left of the wind is also a factor. During this period (and possibly the transition months) the wind and current forcing resulted in a predominant movement of oil slicks to the north, towards the chain of seamounts to the north of Montara. Investigation of the behaviour of oil components entrained or in solution however showed that there is negligible risk of sub-surface oil impacting on these seamounts, which are at least 10 m below the surface and the closest some 30 km away.
Although not professing to have personal experience with the model used, Dr Taylor said that the model’s approach, and the data sets for wind and currents, and the oil properties and weathering characteristics, used in the model, were well-defined and consistent with best practice in 2009. Later, after referring to AMSA’s technical guidelines for preparing contingency plans for marine and coastal facilities (published in January 2015), Dr Taylor said that the modelling was “consistent with best practices today” for oil trajectory, weathering and mass balance projections. He said that the OSCP’s prediction that the shorelines of Australia, Timor and the Indonesian Island were “at no risk whatsoever” from oil impact, was “consistent with best practice in planning at the time of the Montara oil spill”. Dr Taylor then expressed the conclusion that:
67… a reasonable oil field operator would not have expected or foreseen an oil spill incident with the potential to harm residents of [Nusa Tenggara Timur] given the characteristics of the oil in the production field and analysis of oil weathering and trajectories forecast for the assumed reasonable worst-case spill incident at the time.
I point out, for later reference, that the modelling on which the OSCP was based was carried out by Global Environment Modelling Systems Pty Ltd (GEMS) using GCOM3D, a three-dimensional hydrodynamic model which was used to model the ocean currents, and the GEMS spill model called OILTRAK3D. The modelling was undertaken by Dr Graeme Hubbert, who was called by the applicant to give evidence on trajectory modelling and ocean currents.
It is convenient at this stage to also refer to modelling carried out by the respondent in 2011 and revisited in 2013. It looked at a 77 day period (a “loss of well control” spill) of 84,966 m3 (534,380 bbl) with a variable flow rate peaking at 3,802 m3 per day (23,912 bbl/day) down to 690 m3/day (4,340 bbl/day). The modelling was completed for three distinct seasons, defined by the unique prevailing wind and general current conditions. The modelling predicted a 90% probability of oil making shoreline contact >10 g/m2 with Rote, for all seasons. The report of this modelling described this scenario as “credible”.
The applicant relied on this modelling to support his case that the respondent owed him and the Group Members a duty of care. On the question of foreseeability, he submitted that the modelling showed information that was available to the respondent in 2009, had it taken steps to access that information at that time. The applicant submitted that the modelling undertaken for the OSCP in 2009 simply looked at the outcome of the loss of oil from a vessel wing tank. However, this was a risk which could only have arisen at some time in the future, when the H1 Well was in production. According to the applicant, the real risk, at the relevant time, was of a well blowout, given the “egregious incompetence” with which the respondent purported to temporarily seal the well.
According to the applicant, the OSCP in 2009 simply “failed to grapple” with the risks attached to the work the respondent was in fact undertaking. In cross-examination, Dr Taylor accepted that his opinion that a reasonable oil field operator would not have expected or foreseen an oil spill incident with potential harm to residents of NTT was based on the history of operations in the area, not on the particular facts leading to the blowout of the H1 Well.
CHEMICAL COMPOSITION: AN OVERVIEW OF THE CHEMICAL COMPOSITION AND PHYSICAL PROPERTIES OF FRESH AND WEATHERED MONTARA OIL
No-one knows the chemical composition of fresh (meaning, not weathered) crude oil taken from the H1 Well (Montara-1 oil). No samples of Montara-1 oil were studied or were available to be studied prior to the spill. After the spill, the H1 Well was plugged and abandoned, making it impossible to obtain any sample. Similarly, no-one knows the physical properties of Montara-1 oil. However, two other oils from the Montara field were available for study—fresh oil from the H2 Well (Montara-2 oil) and fresh oil from the H3 Well (Montara-3 oil). Montara-3 oil was collected in 2002 and analysed by Intertek and Leeder Consulting. Montara-2 oil was collected in 2017, for the purposes of this case, and analysed by Dr Scott Stout, who was called by the respondent to give expert evidence. The experts on this topic—Dr Stout, and Professor Ball and Dr Fingas (who were called by the applicant)—agreed that Montara-2 oil and Montara-3 oil can be taken as suitable surrogates for Montara-1 oil.
There is no dispute about the chemical composition of Montara-2 oil or, in relevant respects, its physical properties, which are summarised in the following tables:
Summary of the Chemical Composition of the fresh Montara-H2 oil Chemical Composition Value Units Bulk Composition Saturates 76 wt% Aromatics 21 wt% Resins (NSO) 2.4 wt% Asphaltenes 0.30 wt% Detailed Composition Total SHC1 250,000 μg/g Total PIANO2 133,000 μg/g Total PAHs3 43,600 μg/g Total Petroleum Hydrocarbons (TPH) 839,000 μg/g 1Saturated Hydrocarbons (n-alkanes and targeted isoprenoids, C9-C40)
2Volatiles (paraffins, isoparaffins, aromatics, naphthenes, and olefins)
3Polycyclic aromatic hydrocarbons; total of 50 PAH analytes
Summary of the Physical Properties of the fresh Montara-H2 oil Physical Property Value Units Specific Gravity (15.6ºC) 0.8502 unitless API Gravity (15.6ºC) 34.9 º Density (15.6ºC) 0.8494 g/mL Wax Content 13.7 wt% Interfacial Tension 70.58 mN/m Pour Point 24 ºC
The following table provides a comparison between the two surrogates—Montara-2 oil and Montara-3 oil. Although differences exist between the values for the properties listed in the table, the relevant experts agreed that, overall, these oils are generally comparable to each other. Further, based on the apparent continuity, structure and character of the Montara field’s oil reservoir, the relevant experts agreed that there is no geologic basis to expect significant differences between the crude oil produced from different wells in the Montara field:
Comparison of Chemical and Physical Properties of Surrogate Montara crude oils
Description
Montara-H2
(2017)(Dr Stout)
Montara-3
(2002)(Leeder Consulting/
Intertek)Units
Pour Point 24 27 ºC Wax Content 13.7 11.3 wt% API Gravity 34.9 34.8 o Density@ 15.6 oC 0.8494 *ND g/ml Density@ 15 oC *ND 0.8506 g/ml Specific Gravity @ 15.6 oC 0.8502 0.8510 unitless Total BTEX 28,200 32,900 μg g-1 Total PAHs 43,600 *ND μg g-1 Total Saturates 76.1 58.1 wt% Total Aromatics 21.3 26.9 wt% Total Resins 2.4 *ND wt% Total Asphaltenes 0.30 0.98 wt% *ND—not determined
In light of the above discussion, it is convenient to refer to Montara-1 oil, Montara-2 oil and Montara-3 oil as, simply, Montara oil unless it is necessary to distinguish between the three oils.
The chemical composition and physical properties of crude oil can be affected by weathering. The processes involved include evaporation, aerosolization, dissolution, biodegradation, photochemical oxidation (also called photo-oxidation), and wax-agglomeration and separation.
Evaporation is the volatilization of oil components into the atmosphere. Aerosolization is a specific type of evaporation caused by injection of the oil into the air prior to it reaching the sea surface.
Biodegradation is the breakdown of oil components by microorganisms in the environment. Photochemical oxidation or photo-oxidation is the breakdown of oil components due to chemical reactions caused by exposure to sunlight.
Wax agglomeration and separation is the precipitation of waxy components in the oil to form wax-rich aggregates and their subsequent separation from the liquid oil. This is an atypical, but not unprecedented, weathering process. It affects “high wax” oils, such as Montara oil.
Emulsification is another weathering process in which oil and water become mixed to form emulsions. The experts agreed that this process, albeit common, was unlikely to have affected the spilled Montara-1 oil because of its low asphaltene and resin content. The experts agreed that reports at the time of the spill of “emulsified slicks”, and “emulsions” or “possible emulsions”, were not true emulsions but were, more likely, wax-enriched oils formed by the wax-agglomeration process.
These weathering processes occur mostly concurrently and would have had a collective (not individual) effect on the spilled Montara-1 oil.
The experts on this topic were asked to consider, in conclave, the effect of the weathering processes on the visual appearance, wax content, pour point, viscosity, smell, toxicity and adhesiveness of this oil. Their observations and conclusions were based, in part, on field-collected samples of weathered Montara-1 oil analysed by Leeder Consulting at the time of the spill.
As to visual appearance, the experts agreed (based on photographs and sample descriptions given at the time of the spill) that, as the oil weathered, it generally became lighter in colour (brown to orange to yellow to khaki) and formed white waxy particles. As waxy aggregates formed and became increasingly abundant, the oil may have appeared to be more viscous, which is a possible explanation for the field descriptions of the floating oil, made at the time of the spill, as “emulsified slicks” or “emulsions”.
The experts agreed that the overall wax content of the spilled oil increased through a combination of the conventional weathering processes and the wax agglomeration and separation process referred to above. Analysis of 13 field-collected samples taken at the time of the spill showed that the wax content of the weathered oil ranged from 13% to 79%.
The experts agreed that the pour point of the spilled oil (the lowest temperature that oil will flow when it is cooled) increased through a combination of the conventional weathering processes and the wax agglomeration and separation process. Analysis of the 13 field-collected samples showed that the pour point of the weathered oil ranged from 30°C to 51°C. This is an increase in the pour point of Montara-2 oil and Montara-3 oil. The experts agreed that the higher pour points of the field-collected samples indicate that, at night-time temperatures, most of the weathered spilled oil would have been solid and that highly-weathered oil and wax-rich aggregates with elevated pour points would have remained as solids at daytime temperatures.
There was some disagreement between the experts as to whether the data on viscosity obtained from 11 field-collected samples taken at the time of the spill were reliable. It is not necessary to engage with that debate because, despite that uncertainty, the experts agreed that it was their expectation that the viscosity of the spilled oil would have increased through a combination of the conventional weathering processes and the wax agglomeration and separation process.
The experts were sceptical that the intensity or nature of the spilled oil’s smell could be reliably described as having changed due to weathering. Certainly, there was no data available to them to evaluate this qualitative property, which they considered to be highly subjective to the individual describing the smell and, therefore, an unreliable means to assess the weathering of oil.
The evidence does not disclose that there was any investigation undertaken of the toxicity of the Montara oil at the time of the spill. However, the experts agreed that the concentrations of compounds that are typically associated with aquatic toxicity—the monoaromatic hydrocarbons benzene, toluene, ethylbenzene and xylene (BTEX), polycyclic aromatic hydrocarbons (PAHs) and total aromatic hydrocarbons—were measured in multiple field-collected samples at the time of the spill. None of the samples contained detectable BTEX. All samples showed reduced concentrations of PAHs and total aromatic hydrocarbons with increasing % weight (mass) loss (a proxy for weathering). They concluded that it was likely that the toxicity of the spilled oil decreased through a combination of the conventional weathering processes and the wax agglomeration and separation process. Notwithstanding this agreement, there was substantial debate about the significance of this decreased toxicity, particularly in relation to seaweed grown in the Rote/Kupang region of Indonesia in 2009 and subsequent years. I will deal with that topic in later sections of these reasons.
The relevant experts disagreed on whether the adhesiveness of the spilled Montara oil (here, its ability to adhere to biological material) would increase with weathering. Professor Ball and Dr Fingas contended that adhesiveness would increase with weathering. Dr Stout contended that there was no reliable or relevant data that addressed this topic. Once again, I will deal with that topic, but only to the extent that it is necessary to do so, in a later section of these reasons.
Based on qualitative observations in respect of 64 field-collected samples at the time of the spill, the experts agreed that the spilled Montara oil experienced varying degrees of weathering or wax-enrichment. Evaporation was clearly the most important weathering process that initially affected the oil after its release. Water-washing, biodegradation and photo-oxidation further caused a progressive loss of non-volatile aromatics (PAHs). Weathering and concurrent wax agglomeration and separation formed increasingly wax-rich residues that contained long-chain n-alkanes, but little else. Biodegradation did affect floating oils, but probably only in sheens (not slicks).
The relevant experts also agreed that quantitative observations of field-collected samples showed that BTEX was rapidly and completely lost from the spilled oil that was sampled. The % weight (mass) loss (once again, a proxy for weathering) showed losses ranging from 4% to 92%, with the highest loss being to the wax-rich residues (88% to 92%). Total aromatic hydrocarbons (>C7 to C35) and total PAHs were substantially reduced in the floating oils, such that the wax-rich residues contained 1.6% of total aromatic hydrocarbons and no detectable total PAHs (i.e., >50 mg/kg-1 or 50 ppm). The total aromatic hydrocarbons that persisted in the most highly-weathered wax-rich residue that was studied were exclusively comprised of larger aromatic hydrocarbons in the C16 to C35 (mostly C21 to C35) carbon range.
The significance of these observations will have greater meaning when I deal in more detail with the respective cases that were advanced on the topic of the toxicity of oil in relation to seaweed. I simply note, for present purposes, that BTEX and the PAHs are the chemicals commonly associated with aquatic toxicity.
It is convenient to record at this juncture that a number of observations made at the time of the spill—including by seaweed farmers and other observers in the Rote/Kupang region in late 2009—concerned the presence of foam. The relevant experts agreed that observations of foam in the sea does not indicate the presence of oil or an oil dispersant, but does not preclude their presence. Dr Stout pointed out that four foam samples collected from the Ashmore Reef area during the spill, which were analysed by Leeder Consulting, contained either predominantly or exclusively chemicals derived from naturally-occurring biological material(s). Two samples contained some hydrocarbons that indicated the presence of small but varying amounts of highly-weathered oil or wax.
THE ROTE/KUPANG REGION OF INDONESIA
Nusa Tenggara Timur (NTT) is one of 34 provinces of Indonesia. It is located in the Coral Triangle region of South East Asia, north of Australia. It comprises 21 regencies (or districts) and the regency-level city of Kupang. Two of the regencies, known as the Regency of Kupang and the Regency of Rote Ndao, are the focus of this proceeding. For convenience, I will refer to them as comprising the Rote/Kupang region.
The Regency of Kupang is located in the western-most region of West Timor on Timor Island. It includes an island just off the coast of West Timor called Semau.
The Regency of Rote Ndao comprises a main island (Rote) located to the south-west of Kupang, and a number of adjacent, smaller islands.
The Rote/Kupang region is located approximately 500 km north-west of the Australian coast, and approximately 240 km north-west of the Montara oil field.Schedule A to these reasons reproduces part of a hydrographic chart which includes this region. Rote and West Timor are located between (approximately) latitude 11˚0’0”S and 9˚0’0”S and longitude 122˚0’0”E and 125˚0’0”E. The Montara oil field is located between (approximately) latitude 12˚0’0”S and 13˚0’0”S and longitude 124˚0’0”E and 125˚0’0”E. The coast of Western Australia is visible in the south-east corner of the chart.
As in other areas of Indonesia, the inhabitants of the Rote/Kupang region are subject to several levels of government. The national Indonesian government is based some distance away in Jakarta, and administers the various provincial governments, including that of NTT. Each regency in NTT, known in Bahasa Indonesia as a “kabupaten”, is headed by an elected regent known as a “bupati”. Each regency contains a number of sub-districts, known as “kecamatan”. These, in turn, contain a number of villages, known as “desa”. Villages can also be divided into sub-villages, known as “dusun”.
Rote and its two main adjacent islands Rote Ndao and Rote Nuse comprise about 60 villages. The Regency of Kupang comprises about 21 villages. The island of Semau comprises about 14 villages, and Kupang Barat, on mainland Timor, comprises about seven villages.
As I have noted, in his further amended statement of claim the applicant claims that oil spilled from the H1 Well reached 81 villages located in the Rote/Kupang region. A map plotting the location of the villages, which were identified by the lay witnesses, who gave oral evidence, as being the location of their places of residence, is reproduced in Schedule B to these reasons. In the course of the hearing, this map was given the identifier SAN.941.001.0191.
ASPECTS OF THE SEAWEED INDUSTRY IN INDONESIA
Seaweeds, also known as macroalgae, are multi-cellular photosynthetic organisms. They range from microscopic in size to tens of metres in length. While they are not technically plants, they perform the same ecological role in coastal marine systems as plants do in terrestrial systems. They are classified into four major taxonomic groups characterised by their typical colours, which are red, brown, green and blue-green algae. This proceeding concerns, principally, several species of red algae.
The metabolic processes of a seaweed are conducted through the surface of its entire body (thallus). Gas exchanges at the thallus enable seaweeds to generate energy through photosynthesis and conduct cellular respiration and metabolism. Seaweeds also absorb essential nutrients through the thallus. Reproduction in red algae also typically occurs by way of the thallus, which at certain phases during the life of the seaweed will produce microscopic gametes and spores. Once formed, the spores in particular are capable of growing into new seaweeds without the need for fertilisation.
Three types of seaweed are cultivated in the Rote/Kupang region, each of which are species of red algae. Specifically, the three species, which are collectively referred to as the eucheumatoid seaweeds, are Kappaphycus alvarezii, commercially referred to as cottonii; Kappaphycus striatum, commercially referred to as sakol; and Eucheuma denticulatum, commercially referred to as spinosum or espinosum. Cottonii and sakol are the two species which are predominantly grown in the region and represent almost all of the seaweed produced there, with very little spinosum grown by comparison. Even though classified as red algae (or red seaweed), cottonii and sakol can, in fact, exhibit various colours.
Natural stocks of both Kappaphycus and Eucheuma seaweeds occur throughout the Indo-Pacific region, between approximately 20° north and south of the equator. Kappaphycus tends to grow in the wild as solitary plants scattered widely through sea grass beds. For this reason, they were difficult to harvest for mass production until commercial farming of vegetative cultivars was developed.
Commercial farming of eucheumatoid seaweeds is mostly undertaken between 10° north and south of the equator, which contains the coastal areas of winter sea-temperature isoclines between 21°C and 24°C. These are the optimal temperatures for growth. The primary centres for commercial production are located in the Philippines and Indonesia, which fall within this geographic area.
Commercial tropical farming of cottonii and sakol commenced in the Philippines in 1974. Farming of espinosum commenced around the same time, but production volumes were only around 20% of the production volumes of the two Kappaphycus seaweeds. The Philippines enjoyed a monopoly on production until 1986, when Indonesia commenced commercial farming.
By 2006, Indonesia was the world’s leading producer of eucheumatoid seaweeds. The rapid growth in the domestic seaweed industry was due to a range of factors, including: the area is typhoon free; the seasonality and incidence of disease are minimal; the area is stable legally; farmers have clear tenure rights over farm sites; infrastructure and shipping facilities are adequate; and business essentials are available.
Many Indonesian coastal regions, including the Rote/Kupang region, rate well on these features. Generally, they are good for seaweed cultivation all year round and enjoy a competitive advantage over the northerly regions of the Philippines, which suffer from periodic typhoons, and the southerly regions of the Philippines, which face recurring armed insurrections that inhibit the conduct of seaweed businesses.
Over the past decade, Indonesia has emerged as the global “alpha” source of tropical seaweeds, meaning that it is the world’s dominant source of raw, dried seaweeds (RDS) and can conceivably supply the entire global RDS demand (around half of which is generated by processors in China). By way of example, following Typhoon Haiyan (also known as Super Typhoon Yolanda) in November 2013, spinosum production in the Philippines was virtually wiped out, causing a global shortage which was filled by Indonesian producers within several months. The most recent production data was collected in 2013. It indicates that Indonesia produced 61% of global seaweed production, which is around 300,000 wet tonnes, worth approximately US$40 million, per month. In the course of giving his evidence about the seaweed industry in Indonesia, Dr Iain Neish, who was called by the applicant, estimated that this production would have risen to well over 70% by 2019, on the basis that the industry in Indonesia continues to grow and the industry in the Philippines continues to decline.
The NTT province, including the Rote/Kupang region, is viewed by the industry as a region with underdeveloped potential. Dr Neish said that, as at 2018, it was not considered as a reliable, year-round seaweed source, but the region has contributed to building Indonesia’s position as an alpha tropical seaweed supplier.He said that the seaweed industry in the Rote/Kupang region had developed to the point of widespread successful farming by 2009, but this was followed by a sudden crop failure throughout the region. There had been persistent efforts to re-establish farming, which eventually recovered over a number of years.
The agronomic process of seaweed farming in the Rote/Kupang region is remarkably simple. It essentially involves attaching a fragment of seaweed to a line and suspending it in the water to grow. A seaweed farm will comprise several of these long lines, made from ropes, strings or strappings, which may be “hung” in the sea using a variety of configurations. Generally, empty plastic water bottles are attached at intervals to act as floats.
As I have mentioned above, seaweeds are able to reproduce following the production of spores from the thallus, without a fertilisation step. This feature of seaweeds enables seaweed farmers to “seed” new crops periodically using seaweed fragments from the previous crop. The seeding process usually results in three-to-five-fold growth in around six weeks, which is the usual length of the seaweed growing cycle. Dr Neish accepted in cross-examination that it was a possible “untested hypothesis” that this approach to propagation of seaweed could create a lack of genetic variation in the crop over time. However, he disagreed that this would cause the extinction of a particular variety of seaweed in a given area.
After the six-week growing cycle is complete, the seaweeds are harvested and dried. The most common drying technique in the Kupang/Rote region is the use of drying platforms known as “para-para”. These are constructed from bamboo strips, which make a platform frame which is covered in fine netting and on which the seaweed is laid for two to three days to dry. The dried seaweed is then sacked or baled. Dr Neish deposed that this was an excellent drying technique. It meant that seaweeds from the Rote/Kupang region are generally clean and well-dried. For this reason, RDS from the region tended to fetch prices on the “high side of the Indonesian price range”. RDS is then usually sold to carrageenan processors to be made into carrageenan for industrial use.
Carrageenan (a hydrocolloid) is used as a thickening and emulsifying agent, primarily as a food ingredient. Its principal use is in meat packing, in which it is injected with brine into ham and other meats to keep them moist. It is also used in dairy products, for example to suspend cocoa in chocolate milk and to prevent ice crystal formation and impart a creamy texture in ice creams, and in jelly desserts. It is also used in pet food. The carrageenan derived from cottonii and sakol is called kappa carrageenan. The carrageenan derived from spinosum is called iota carrageenan.
Carrageenan production occurs predominantly in China, but there are also processors domestically in Indonesia and the Philippines, as well as in Europe.
RDS is sold for approximately US$1 to US$2 per kg. Carrageenan is sold for approximately US$10 to US$15 per kg. Indonesian export volumes of RDS (comprising 90% cottonii and 10% spinosum) grew from around 30,000 tons (worth around US$20 million) to over 100,000 tons (worth around US$110 million) between 2000 and 2008.
Qualitative research undertaken by Dr Neish suggests that the seaweed farming industry has provided local Indonesian residents with a major addition to their income. Seaweed is a cash crop for farmers. It can be undertaken at minimal cost. There is a ready market. Dr Neish estimates that an average seaweed farmer in the Rote/Kupang region is able to produce around 500 kg of dry Kappaphycus seaweed each month, which is generally sold for between US$4,000 and US$8,000. Seaweed farmers generally report that the income per unit effort they gain from seaweed farming is several multiples greater than income available from other sources. Indeed, few other economic choices are available. Other livelihood options in the Rote/Kupang region have tended to remain static or have declined since the development of seaweed farming. Seaweed farming thus provides an extremely important livelihood for the villagers in these areas. Dr Neish estimated that more than half the households in the region rely exclusively on seaweed farming to earn an income.
Dr Neish expressed the opinion that unprecedented high cottonii and sakol prices in 2018 were attracting seaweed farmers in the Rote/Kupang region to “have another go” at seaweed farming, despite their difficulties during and after the crop failure events of 2009.
THE CONDUCT OF THE HEARING
The hearing of this proceeding was conducted in two broad phases. The first phase involved the taking of lay evidence from seaweed farmers in the Rote/Kupang region and other lay observers, including from that region. The second phase involved the taking of extensive expert evidence from experts across a broad range of disciplines.
The lay evidence
The applicant read the following affidavits of deponents who were cross-examined:
·Daniel Sanda, made on 18 August 2018;
·Silwanus Aplugi, made on 20 August 2018;
·Gustaf Lay, made on 23 August 2018;
·Gabriel Mboeik, made on 25 July 2018;
·Axel Pierre Chalvet, made on 21 August 2017;
·Adrian Sibert, made on 30 August 2018;
·Nikodemus Ndun, made on 12 October 2017;
·Lot Martinus Heu, made on 12 October 2017;
·Semin Polin, made on 15 September 2016;
·Yohan Lima, made on 13 October 2016;
·Dominggus Liman, made on 17 October 2016;
·Abner Yopi Pallo, made on 16 September 2016;
·Zadrak Patolla-Ballo, made on 26 September 2016;
·Petrus Ndolu, made on 3 April 2017;
·Abdul Rasyid Aitio, made on 23 March 2017;
·Mica Erwin Johanis Penna, made on 23 March 2017;
·Taftinus Taek, made on 22 March 2017;
·Semuel Messakh, made on 9 February 2017; and
·Yardin Adoni Lari Aplugi, made on 5 April 2017.
The applicant read the following affidavits of deponents who were not required for cross-examination:
·John Guiney, made on 29 September 2017;
·John Gregory Rogers, made on 30 September 2017;
·Simon Mustoe, made on 10 August 2018;
·Ghislaine Llewellyn, made on 30 August 2018;
·Ghislaine Llewellyn, made on 28 March 2019;
·James Watson, made on 30 August 2018;
·Matt Smith, made on 15 March 2019;
·Bartolo La Macchia, made on 5 March 2019;
·Antony La Macchia, made on 15 March 2019;
·Lorens Hendrik, made on 26 September 2016;
·Daud Nenokeba, made on 26 September 2016;
·Watson Sodi Mbuik, made on 17 February 2017;
·Jermias Manafe, made on 20 March 2017;
·Melkianus Mola, made on 20 March 2017;
·Marselinus Mesah, made on 3 April 2017;
·Johan Mooy, made on 2 April 2017;
·Anton Matasina, made on 8 March 2017;
·Ogus Tananggau, made on 23 March 2017;
·Resa Rehans Fatu, made on 5 April 2017;
·Thomas Dethan, made on 5 April 2017;
·Nathan Kearnes, made on 3 May 2019;
·Nathan Kearnes, made on 26 November 2019;
·Lewis Hamilton, made on 6 May 2019; and
·Lewis Hamilton, made on 18 November 2019.
The expert evidence
The expert evidence presented in this proceeding was extensive. It was, by and large, organised according to a number of topics, most of which are reflected in the structure of these reasons. The topics on which expert evidence was called were Satellite Imagery, Dispersants, Currents, Trajectory Modelling, Chemical Composition of Oil, Toxicology, Volume, Observations of Oil, Oil Spill Contingency Planning and the Seaweed Industry in Indonesia.
With the exception of Observations, Contingency Planning and the Seaweed Industry in Indonesia, expert conclaves were held in respect of each of these topics, and each resulted in a joint expert report prepared by the participating witnesses. The experts who participated in each conclave gave their oral evidence concurrently. Professor Steinberg did not participate in the Toxicology conclave. He gave his evidence and was cross-examined in the traditional manner. Dr Neish was the only expert witness who gave evidence on the Seaweed Industry in Indonesia. Dr Taylor was the only expert witness who gave evidence on Contingency Planning. Although there was no conclave on the topic of Observations, evidence was given concurrently on that topic by Professor Ball, Dr Fingas, Dr Taylor and Dr Maki.
The applicant’s expert evidence
The applicant called expert evidence from the following witnesses.
Professor Andrew Ball. Professor Ball is a Distinguished Professor who holds a PhD in microbiology and has taught and researched in environmental microbiology for 33 years. His research focusses on the interaction between pollutants in the environment and the natural microbial community; in particular, the ability of microorganisms to biodegrade petroleum hydrocarbons. Professor Ball presented five reports dealing with the topics of Chemical Composition, Toxicology and Observations, and participated in the Chemical Composition and Toxicology conclaves.
Dr Mervin Fingas. Dr Fingas is a scientist who holds a PhD in environmental sciences, Masters degrees in chemistry and business and has published over 950 papers, over 150 of which relate to oil spill properties and behaviour, over 100 of which relate to oil analysis, over 80 of which relate to dispersants, over 70 of which relate to oil fingerprinting and many which relate to oil or chemical toxicity. He has worked in oil spills for over 45 years, including the Deepwater Horizon spill in the Gulf of Mexico, has established a laboratory at Environment Canada to study and develop measurement techniques for oil spill behaviour, and has served on two US National Academy of Sciences committees relating to oil properties and behaviour. Dr Fingas presented six reports, one of which was revised, dealing with the topics of Chemical Composition, Dispersants, Toxicology and Observations, and participated in the Chemical Composition, Toxicology and Dispersants conclaves.
The respondent criticised Dr Fingas’ evidence. It noted that Dr Fingas had given evidence on “a host of topics”. It submitted that, in many respects, his evidence was “unsatisfactory, and should not be accepted on any contested issue”. The respondent appeared to advance two principal reasons for making this submission.
The first concerns Dr Fingas’ evidence in relation to analyses carried out by LEMIGAS, an Indonesian governmental oil and gas research organisation. The respondent’s criticism appears to be based on no more than the fact that Dr Fingas disagreed with the respondent’s own witness, Dr Stout, on what the LEMIGAS analyses revealed. In coming to his view about those analyses, Dr Fingas applied a regression analysis (discussed below) and argued that the CEN 15522 – 2 Protocol used by Dr Stout was “relatively new”—a proposition with which the respondent disagrees.
The second reason concerns Dr Fingas’ evidence in relation to dispersants. In giving that evidence, Dr Fingas disagreed with Dr Coehlo, who was called by the respondent, as to the interpretation of certain entries in AMSA logs concerning the effectiveness of dispersants that had been applied to the spilled oil. The authors of the entries were not called to give evidence.
Dr Fingas interpreted the entries as recording the percentage of oil targetted with dispersant (i.e., the percentage of oil “hit” with the dispersant). Dr Coehlo interpreted the entries as recording the percentage of oil removed from the sea surface by the dispersant.
Dr Fingas repeated his interpretation in oral evidence. He later developed this by saying that the percentage referred to in the entries was the percentage of oil that the operators targeted, which they felt would be dispersed by the dispersant.
When cross-examining counsel suggested to Dr Fingas that this was a fanciful reading of the relevant entries, he disagreed. He explained his interpretation as follows:
I’m sorry. I disagree. Because – simply because the length of time that it would take for a dispersant to actually work and for the oil to disappear from sight and which you could say was actually dispersed is too long for them to lay around in the vessel without going on to the next slick.
When it was put to Dr Fingas that he did not honestly believe the interpretation he had given and that, by this answer, he was attempting to make the evidence fit with his views about dispersant effectiveness, he said:
That is incorrect, because I have talked to operators in the past and this is how they’re taught. They’re taught to recognise the signs after dispersant has been applied that it may disperse or will not disperse. And so that is the percentage and very rough percentage that they will report.
In closing submissions, the respondent submitted that Dr Fingas had either given dishonest answers on this topic or was so biased in his views about dispersant effectiveness that he was unable to read the log entries objectively and rationally.
I do not accept that submission. I do not think that Dr Fingas gave his evidence on this topic, or on any other topic, dishonestly. He explained his interpretation of the log entries. I do not think that his explanation was fanciful, although his interpretation of the log entries is not one that I would adopt. I think that Dr Coehlo’s interpretation is to be preferred. However, Dr Fingas is not to be criticised for expressing a different view to Dr Coehlo on the interpretation of an operational document of which neither he nor Dr Coehlo was the author; nor is he to be criticised for expressing a different view to Dr Stout in relation to what the LEMIGRAS analyses reveal. Indeed, a feature of this case has been the remarkable number of disagreements between experts on the many issues that were canvassed across the broad range of topics considered in the evidence. I do not accept that, on the topics he addressed, Dr Fingas’ evidence was unsatisfactory. I reject the respondent’s broad submission that Dr Fingas’ evidence should not be accepted on any contested issue.
Dr Erich Gundlach. Dr Gundlach is a coastal geologist who has over 40 years’ experience related to oil spill assessments and the application of imagery and aerial photographs to determine spill location and shoreline impacts, and works extensively with oil spill models. His experience includes the Metula spill in the Strait of Magellan, the Amoco Cadiz spill in France, the Ixtoc 1 spill in the Gulf of Mexico, the Exxon Valdez spill in Alaska, the Gulf War spills in Kuwait and Saudi Arabia and the Deepwater Horizon spill in the Gulf of Mexico. Dr Gundlach presented three reports dealing with the topics of Satellite Imagery and Trajectory Modelling, and participated in the conclaves which took place on both of those topics.
Dr Graeme Hubbert. Dr Hubbert is a physical oceanographer who holds a PhD in physics and has worked in oceanography since 1981, during which time he has spent 17 years in government research institutes, including the Bureau of Meteorology (BoM), where he developed the first Australian 3D ocean model for environmental studies. In 1993, he established a consulting company called Global Environmental Modelling and Monitoring Systems Pty Ltd (GEMMS, previously referred to by the acronym GEMS), which has worked with the US Navy and, for the past 20 years, AMSA to develop ocean modelling systems applied mainly to search and rescue operations and environmental impact studies. Dr Hubbert presented two reports dealing with the topics of Trajectory Modelling and Currents, and participated in the conclaves which took place on both of those topics.
Dr John Luick. Dr Luick is a physical oceanographer who holds a PhD in that field and works as a consultant through Austides Consulting, which specialises in marine environmental consulting and marine software development, which he established and operates. He also holds appointments as an Honorary Senior Lecturer at Flinders University, a Visiting Scientist with the South Australian Research and Development Institute, and an Expert Adviser at Tridel Engineering (Dubai). He has over 30 years’ experience in oceanographic research and consulting. Dr Luick presented one report dealing with the topics of Trajectory Modelling and Currents, and participated in the conclaves which took place on both of those topics.
Dr Iain Charles Neish. Dr Neish is a marine biologist and businessman who holds a PhD in zoology and has worked with seaweeds and seaweed farmers in aquaculture systems since 1965. Dr Neish has extensive experience in seaweed value chains and the development of seaweed aquaculture agronomy systems on every continent except Antarctica. Over the past 41 years, he has been involved with the seaweed industry in South East Asia, and has been particularly involved in that industry in Indonesia since 1986, during which time Dr Neish played a role in industry development for the carrageenan industry and other seaweed industry diversification and development ventures. Since 2008, Dr Neish has also participated in surveys and value chain analyses that have included engagement with hundreds of active seaweed farmers in Indonesia. Dr Neish is currently undertaking seaweed industry development ventures as a Research and Development Advisor to PT Sumber Tanaman Samudra, a seaweed farming company, and as a Director of PT Sea Six Energy Indonesia, a seaweed processing company. A more comprehensive summary of Dr Neish’s qualifications may be found in Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 6) [2019] FCA 1853 (at [4] – [9]), which dealt with various objections which were made to his expert report. Dr Neish presented one report dealing with the topic of the Seaweed Industry in Indonesia, and did not participate in any conclave.
Name of witness Semin Rachmat Polin Affidavit details Sworn on 15 September 2016; Bahasa version MFI-10 Transcript XN: T415-418; XXN: T419-438; RXN: T438 Location of village RT/006, Desa Kuanheun, Kupang Barat (Map MFI-9)
Oil timing Late September 2009. Nature of observations The witness observed big (about 5m), medium and small (about 10cm) circles of oil on the surface of the water in his field of seaweed. The oil was many colours like a rainbow. After touching them, the witness’ body was oily and slippery. This lasted for 5-7 days. In the following days the seaweed detached from the ropes; died and washed away. The witness did not see anything else in the water.
In Form V2 annexed to his affidavit, the witness deposed that there was oil on the surface of the water and the seaweed fell off the ropes. There was black on the ropes and the oil was as far as the eye could see. The oil lasted until December.Effect on seaweed farming In 2008, the witness produced 1,600 kg of sakol seaweed.
In 2009, the witness experienced good growth of sakol until the end of September. The seaweed became diseased and detached from the ropes.
In 2010, the witness tried to produce seaweed but it did not grow. The witness did not grow seaweed in 2011.
In Form V2 annexed to his affidavit, the witness deposed that the farmers at his village grew sakol seaweed. In 2007, the quality of the crop was good and it grew well. In 2008, the weather conditions were not quite as favourable: it was a late start but a very good crop. In March 2009, the quality of the crop looked good but failed miserably in September. In 2010, the seaweed was sick with white spots, and although the farmers tried to grow it, it failed. In 2011, the seaweed was still sick and of poor quality. In 2012, the seaweed was slightly better but still covered with white spots and breaking up; nothing like before 2009. In 2013, the seaweed was slowly improving but still sick with white spots. Some seaweed would stay on the ropes but would not grow. In 2014, there was a steady improvement but the seaweed was still growing slowly.
Name of witness Johan P Lima Affidavit details Sworn on 13 October 2016. Transcript XN: T440-441. Location of village 008, Regency Semau South, Kupang (Map MFI-11)
Oil timing September 2009. Nature of observations On the surface of the water there were thick blocks coloured grey-ish or black-ish and oily. If touched, it felt slippery and made the skin itchy. The seaweed was limp.
Effect on seaweed farming —
Name of witness Dominggus Liman Affidavit details Sworn on 17 October 2016. Transcript XN: T442-445. Location of village Neighbourhood 6/3, Akle Semau, Kupang Regency (Map MFI-12)
Oil timing August/September 2009. Nature of observations The oil looked like a rainbow and there were blocks that were black-ish or grey-ish in colour. They felt like oil.
The seaweed became limp and detached.Effect on seaweed farming Seaweed growth was good from January 2009 to August/September 2009. At that time, they detached. The witness had never seen that happen before. The seaweed did not recover in 2009. The witness tried to regrow seaweed in 2010 and it failed.
Name of witness Zadrak Patolla-Ballo Affidavit details Sworn on 26 September 2016. Transcript XN: T450-453; XXN: T453-460. Location of village Desa Letbaun RT 007/004, Semau, Kupang (MFI 13)
Oil timing End of August 2009. Nature of observations There was oil, like kerosene on the surface of the ocean. There were lots of fish all dead along the beach. The oil smelt like lubricating oil, and very rotten. Many seaweed farmers got skin problems, and after eating the dead fish got irritated lips.
The seaweed had oil all over it. It was about 500m away from the beach. When the witness tried to clean his seaweed by rubbing it, it fell off because it had turned light grey/white. It was soft to the touch.
Over the next few days all the seaweed became mushy/sticky and fell off, broken off in little pieces and there were only a few big pieces left.Effect on seaweed farming The witness had grown seaweed since 2002. The witness deposed that the type of seaweed grown was sakol, but in XXN agreed that it was cottonii (T459:24-26).
In 2009, the seaweed was destroyed. It did not recover during 2009. In 2010, it was still damaged and the yield was very small in comparison to 2007 and 2008.
In Form V2 annexed to his affidavit, the witness deposed that in 2007, the production and quality was ‘good’. In 2008, it was ‘extremely high’. In early 2009, it was good but the end of the year was very bad. In 2010, production was ‘low (half drop)’ and the quality was also bad. In 2011, production was ‘a bit low’ and the farmers attempted to grow sakol seaweed. In 2011, both sakol and cottonii varieties were grown. Sakol appeared to be more robust in poor conditions.
Name of witness Abner Yopi Pallo Affidavit details Sworn on 16 September 2016. Transcript XN: T460-463; XXN: T463-465. Location of village RT03, RW02, Batuinan, Semau, Kupang (MFI 14)
Oil timing October 2009 Nature of observations When the witness arrived at the beach, there was foam on top of the surface of the water. It shined like the colour of the rainbow. It smelt very rotten and felt shiny and slippery, and where it touched the skin it made it itchy.
The seaweed was dirty with the foam which had stuck to the seaweed. On the second day, the seaweed seemed weak and after several days it became damaged and fell off the ropes. That had never happened before.
The foam was still visible in 2010 by some villagers near Letbaun Village, but not in Batuinan.Effect on seaweed farming At the beginning of 2009, the witness’ seaweed and production was very good. In October 2009, it became weak and was destroyed. It did not recover in 2009.
In Form V2 annexed to his affidavit, the witness deposed that seaweed farming began in the village in 2007, using cottonii. The seaweed thrived at that time, and increased in 2008. In early 2009 the quality and production was as excellent as 2008, but around September and October production decreased dramatically. In 2010, seaweed quality and production was extremely decreased. Harvests failed and the seaweed fell off the rope, falling off only 2-3 days after it was tied on. In 2011, the farmers began to grow sakol, but production did not increase. Seaweed production continued to decrease from year to year and has remained low.
Name of witness Petrus Ndolu Affidavit details Sworn on 3 April 2017; Bahasa version MFI-17. Transcript XN: T468-473; XXN: T473-484. Location of village Baadale, Lobalain, Rote (seaweed farm in Nuse) (Map MFI-16)
Oil timing October 2009 Nature of observations The witness was at Nuse, where he farmed. The sea was the colour of a rainbow and there were dead fish floating on top of the ocean. There were chocolatey brown balls floating on top of the seaweed, which were oily to touch.
The seaweed had wilted and gone yellow. It turned mushy and white in colour. The witness picked up his seaweed and tried to clean it, and his hands became oily. The seaweed stalks broke off. After the witness went home from the beach, his skin felt itchy.
In November 2009 the witness boated to Baah, and the water on the way there was also the colour of a rainbow and there were balls floating on the water.
In XXN, it was put to the witness that the timing of the oil was August 2009, and that Form V2 annexed to his affidavit did not record any observations of rainbow colours or brown balls in the water, instead setting out that the seaweed was ‘white, spotty and mushy’ and fell to the seabed when it was touched.Effect on seaweed farming Before the oil came, the seaweed growth in 2009 was very good. Between October and December 2009 the seaweed did not grow well any more. There was just a small harvest.
In Form V2 annexed to his affidavit, the witness deposed that seaweed (both cottonii and sakol) was grown in Baadale from 2002. Cottonii was the preferred variety. There were usually four harvests each year.
2008 was the best year for Baadale in seaweed production. More cottonii was grown than sakol, but both crops were the healthiest they had ever been. The conditions were excellent and crops grew quickly.
In 2009, there were two good harvests (May and July) but two were ruined (September and November).
In 2010, the villagers attempted one harvest but the seed could not grow. The villagers stopped growing seaweed because of ‘bad production and quality’.
Name of witness Abdul Rasyid Aitio Affidavit details Sworn on 23 March 2017. Transcript XN: T485-488; XXN: T488-492. Location of village Papela, East Rote, Rote Ndao (farming also near Daiama village; about an hour from Papela by motorbike) Oil timing End of September 2009. Nature of observations The oil was brown and was like wax. It felt like oil and stuck to the witness’ hand. In the beginning, the seaweed felt okay because it had only just been covered in oil. Afterwards, it was soft or mushy.
At Daiama, there were circular clumps of oil (of varying sizes, some less than a metre across, some as big as a table or cars; four or five metres across) floating in the water and when the sun shone on it, it looked like a rainbow. The seaweed was soft there and there were white bits on the end/white spots. It dropped from the ropes. The witness had never seen anything like that in the water before.Effect on seaweed farming The witness began seaweed farming in 2000, near Papela and also near Daiama.
In the beginning of 2009, the seaweed grew well. By the end of 2009, it was not good anymore, because there was oil that stuck to the seaweed. The seaweed did not recover in 2009. The witness did not grow seaweed in 2010, because it did not grow anymore. The witness’ child also grew seaweed and his plot had the same problem as the witness’ plot.
Name of witness Mica Erwin Johanis Penna Affidavit details Sworn on 23 March 2017; Bahasa version MFI-19. Transcript XN: T492-496; XXN: T496-510. Location of village Matasio, RT07, RW04, Matili dusun, Rote Ndao. Seaweed farm located near Sotimori (about 30km away) (Map MFI-18)
Oil timing September 2009. Nature of
observationsThe witness went to the beach and saw oil spilt about his seaweed. There was something in the water and on the shore that looked like light brown waxy grease. He could smell oil very strongly and the seaweed was covered in oil.
The seaweed became mushy and soft and changed colour (to a pale colour) and then it died. When the witness cleaned his seaweed, the surface of the water looked like a rainbow. When he touched the seaweed, his hand felt oily and later it was itchy. The oil was everywhere, and it was in clumps as big as a fist. The sea felt like it was covered in oil and was a light brown colour. On the surface, there was wild seaweed that had died and small fish (as big as a finger) that were dead. At low tide, the coral and the rocks felt oily. This had never happened before.
Effect on seaweed farming The witness began seaweed farming in 2007.
At the beginning of 2009, the seaweed was good. At the end the growth was not good. The seaweed did not recover in 2009.
In 2010, the villagers planted new seedlings but they did not grow. The witness himself did not plant anything new, but had been told by others that their crops did not grow.
Name of witness Taftinus Taek Affidavit details Sworn on 22 March 2017. Transcript XN: T511-513; XXN: T513-518; RXN: T518. Location of village Dodaek village, Rote (Map MFI-20)
Oil timing September 2009. Nature of observations The witness saw clumps of wax that were brown in colour near the location of his seaweed (approx. 30m from the beach). The next day, there was also the smell of kerosene and there were clumps stuck to the seaweed. Not long after, the seaweed became weak and mushy and yellow and after about a week it died. The witness also saw dead fish and squid. Effect on seaweed farming The witness began seaweed farming in 2002.
From January to June 2009, the seaweed had good growth. In September it died. It did not recover in 2009.
In 2010, the witness planted seaweed, but the yield was not as maximal as in 2008.
In Form V2 annexed to his affidavit, the witness deposed that the Dodaek villagers farmed sakol seaweed and there were typically three harvests: April, September and at the end of the year, and seed for the new year would be collected in June.
2008 was the ‘golden year’ of seaweed farming. In 2009, there was only a successful harvest in April. There was normal growth until September. The farmers tried to dry their ropes, but it did not work.
In 2010, the production and quality of the seaweed was still very poor. The farmers cleaned their ropes but the disease remained.
In 2011, the conditions were the same but the farmers continued to grow seaweed. In 2011 and 2012 there was an increase in production but it was still nowhere near as good as 2008.
Name of witness Semuel Messakh Affidavit details Sworn on 9 February 2017. Transcript XN: T518-520; XXN: T520-532; T533-534; RXN: T532-533. Location of village Landu (small island off Rote Ndau) (Map MFI-21).
Oil timing September 2009. Nature of observations The witness saw oil on the surface, and a red colour and a blue colour, and it was on the sand. When it was close, it stuck to his hands and feet. Other seaweed farmers said that it made their skin itchy. There was oil on the mangroves and it smelt like diesel fuel. There were some dead dolphins on the seashore.
The seaweed was damaged, with white spots. It fell off the ropes and was carried away by the current. This had never happened before.
In Form V2 annexed to his affidavit, the witness deposed that Landu villagers saw the seaweed turn white and become soft. Some had a red covering on it, and the seaweed stopped growing and fell from the ropes.Effect on seaweed farming The seaweed was damaged in September 2009 but growth was good before then in 2009. The seaweed did not get better in 2009.
The witness did not grow seaweed in 2010.
In Form V2 annexed to his affidavit, the witness deposed that Landu people started farming seaweed (cottonii) in 2002.
In 2008, the seaweed grew well and there were 5-6 harvests. In 2009, seaweed did not grow well; there were only 3 successful harvests and production declined around September.
2010 was a bad year to grow seaweed. The harvest was not the same as 2007/2008. Farmers tried scraping and drying their ropes, but the result was the same.
In 2011, many farmers gave up planting seaweed. In 2012, the farmers started growing sakol, which grew better than cottonii (although some of it still turned white). The production was higher than in 2011.
Name of witness Yardin Adoni Lari Aplugi Affidavit details Sworn on 5 April 2017. Transcript XN: T535-537; XXN: T537-549. Location of village Anarae, Ndao, Nuse, Rote (Map MFI-22).
Oil timing September/October 2009. Nature of observations There was a clump on top of the water. It felt like oil. On the first day, the seaweed was still good and fresh. That changed on the second and third days: the seaweed had sediment stuck to it and spots on it, and became damaged. It felt like oil to the touch. From the fourth day onwards, it became white and mushy and came off the ropes. This had never been seen before.
Effect on seaweed farming The witness began seaweed farming in 1997 (although in XXN he conceded that it is possible that there was no seaweed farming until 2005 and his memory was imprecise and vague).
At the beginning of 2009, his seaweed was very good but in September/October it became damaged. The seaweed did not recover in 2009.
The farmers tried to grow seaweed again in 2010 but it did not grow.
Name of witness Nikodemus Ndun Affidavit details Sworn on 12 October 2017. Transcript XN: T557-560; XXN: T560-569 Location of village Nemberala (buys seaweed from Nemberala, Sedeoen, Oelolot, dusun Aduoen, Boni and sometimes Oeseli and Boa)
Oil timing — Nature of observations — Effect on seaweed farming In 2008, the witness was able to buy approximately six to seven trucks of seaweed each month, but the highest month was ten trucks (each truck being 6,000-8,000 kg when full).
In January 2009, the witness was able to buy approximately six trucks of seaweed.
In June 2009, the witness was able to buy approximately five to six trucks of seaweed.
At the end of 2009, there was only one truck or a bit more of seaweed available to buy.
In 2010, there was only approximately 4,000-5,000 kg of seaweed available to buy each month. It was difficult to buy seaweed and it was poor quality. It had many soft and white pieces when it was harvested and the branches were broken and small. 2010 was the worst year the witness had had for seaweed trading.
Name of witness Lot Martinus Heu Affidavit details Sworn on 12 October 2017. Transcript XN: T570-572; XXN: T572-575. Location of village RT5, RT4, Nemberala (farms at Nemberala and buys seaweed from Oeseli, Oenggaut and Oelolot)
Oil timing September 2009. Nature of observations — Effect on seaweed farming Before the oil, the seaweed grew well. It stopped growing when the oil came in 2009 and did not recover.
In 2010, the witness did not grow seaweed again.
After the oil came in 2009, the witness was unable to find seaweed farmers with seaweed to sell to him. In 2010, the witness was only able to find a little seaweed to buy.
The witness deposes in his affidavit that he became a seaweed farmer (cottonii) in 1999 and expanded his farms up until 2007. He stopped farming in 2009 after the oil arrived and the seaweed stopped growing and it was hard to find seed. He saw that other farmers’ crops were growing poorly. 2008 was the best year for growing seaweed.
He also deposed that the seaweed had been very bad in 2010. He began as a trader in 2011 and business was slow because the crops were still struggling. It was difficult to buy much seaweed but better than in 2010 (it took about a month to fill a truck). The volume picked up a little more in 2012 (one truck per month quite regularly), and 2013 was better again (four or five trucks per month). 2014 was a good year (two truckloads every week and often more). In 2015, it was difficult to buy because other traders were offering better prices (around five truckloads per month). In 2017 the witness was able to sell around two truckloads per month.
Name of witness Thomas Dethan Affidavit details Sworn on 5 April 2017. Transcript — Location of village Nuse, Ndao Nuse, Rote Ndao. Oil timing Around October 2009. Nature of observations There was a layer of oil slick in the water near the witness’ seaweed plot. When the morning light hit it and the sea was calm it had a rainbow colour on it. The witness had never seen it in the water. There were many small to medium sized dead fish, sea cucumber and sea urchins washed ashore on the beach and some in the water.
The top of the witness’ seaweed turned white and started to break apart and feel mushy. It could fall off easily when waves hit it. Only the stem was attached to the ropes when they were taken away.
The farmers tried to grow seaweed again but it did not grow.Effect on seaweed farming —
Name of witness Resa Rehans Fatu Affidavit details Sworn on 5 April 2017. Transcript — Location of village Mbalilendeki, Ndao Nuse, Rote Ndau. Oil timing Around the end of 2009. Nature of
observationsThere was yellow oil on the sea surface. It looked like a rainbow when exposed by the sun. It formed in clumps and spread around the seaweed plots. It smelt like oil.
When it contacted the seaweed, the seaweed turned spotty and white, then mushy and fell off the ropes. There were dead fish floating on the surface of the ocean and washed onshore. When the seaweed farmers came from the water they were itchy and developed a rash.
Effect on seaweed farming —
Name of witness Yermias Manafe Affidavit details Sworn on 20 March 2017. Transcript — Location of village Sonimanu, Pantai Baru, Rote Oil timing 2009. (Maybe September to October – after Indonesian Independence Day).
Nature of observations The oil came into the waters in Sonimanu’s seaweed area near Pukuafu. The seawater had a rainbow colour and there were dead fish around the sea shore. It was apparent that it affected the seaweed. All the seaweed became soft and its colour turned pale and white. It took less than a week for the seaweed to fall onto the seabed after the witness saw the oil. Effect on seaweed farming —
Name of witness Anton Frans Alfonsus Matasina Affidavit details Sworn on 8 March 2017. Transcript — Location of village Lifuleo, Landuleko, Rote Ndau Oil timing Around the end of 2009. (September 2009). Nature of observations Oil came into the waters near Lifuleo and the water around the witness’ seaweed plot turned reddish in colour. There were many dead fish in the water and washed up on the shore. The water smelt like kerosene. The witness had 45 ropes of seaweed ready to harvest but it all fell off to the seabed. It was soft with white spots. The witness thought it was a disease but had never seen anything like it before. All the crops died and washed away. The witness had itchy skin with a rash after going into the water.
Effect on seaweed farming —
Name of witness Watson Sodi Mbuik Affidavit details Sworn on 17 February 2017. Transcript — Location of village Kolobolon, Lobalain, Rote Oil timing Around October 2009. Nature of observations The sea surface became oily and had rainbow colour. In the short time after, the seaweed became worse and had white spots on it. It was soft and white and fell easily to the seabed. All the crops died. The seaweed harvested later was sick and of poor quality.
Effect on seaweed farming —
Name of witness Marselinus Mesah Affidavit details Sworn on 3 April 2017. Transcript — Location of village Oenggae, Pantai Baru, Rote Oil timing Late 2009 Nature of
observationsMany farmers complained their seaweed was dying on the ropes. There was something strange on the sea surface particularly in the morning and sunset time. The seawater looked oily and shining and its colour turned milky brown. There were dead fish on the sea shore. The seaweed became white and mushy like porridge. The crops died and washed away in the tides.
Effect on seaweed farming —
Name of witness Melkianus Mola Affidavit details Sworn on 20 March 2017. Transcript — Location of village Oebau, Pantai Baru, Rote Oil timing Around October 2009. Nature of
observationsThe oil came into the waters near Oebau’s seaweed farming area near Pukuafu in 2009. The sea surface looked different: it had shiny and rainbow colours on it. Not long after, the witness’ seaweed turned soft and easily fell off the ropes and washed away. There were dead fish floating in the water and some washed ashore. The witness got itchy skin and a rash after he went into the water. The oil stayed for around a month, maybe more.
Effect on seaweed farming The seaweed crop was good and healthy before the oil arrived, but it died in just a few days.
Name of witness Johan Mooy Affidavit details Sworn on 2 April 2017. Transcript — Location of village Batutua, Rote Barat Daya, Rote Ndau Oil timing 2009. Nature of observations The oil came to water near Nusamanuk. There was foam on the sea surface, rainbow in colour. The clump of foam was part of a ‘sleek’ expanding many lengths. The sleek stayed for some time. There were dead fish on the seashore and the seaweed died. The seaweed turned pale, mushy and fell from the ropes. After farming in the deep sea, the witness’ skin felt itchy. Effect on seaweed farming —
Name of witness Daud Nenokeba Affidavit details Sworn on 26 September 2016. Transcript — Location of village Desa Uiasa, RT003/RW002, Kupang Oil timing Around October 2009. Nature of observations Oil came into the waters and the sea surface looked different. It had shiny colour and rainbow colours. The sea breeze smelled like diesel fuel. There were dead fish ashore in small amounts. The seaweed became sick and afterward it would not grow. Effect on seaweed farming —
Name of witness Ogus Tananggau Affidavit details Sworn on 23 March 2017. Transcript — Location of village Sotimori, Landau Leko, Rote Ndau Oil timing September 2009. Nature of observations A thin layer of oil was visible on the sea surface. There were rainbow colours in the sunlight. There was an orange waxy material on the beach. Fish and other sea creatures were found dead and washed up to shore.
Within a week, the seaweed turned pale and mushy and washed off the ropes. It tasted oily and the witness was sick when he ate it. When the villagers ate the seaweed and fish, they got diarrhoea. Contact with the oil in the water made their skin itchy.Effect on seaweed farming —
Name of witness Lorens Hendrik Affidavit details Sworn on 26 September 2016. Transcript — Location of village Desa Hansisi RT006/RW002, Semau, Kupang Oil timing Around September/October 2009. Nature of observations The witness saw something strange on the sea surface. It looked like waste from berthed ships – there were lumps in part, a little bit waxy with some black colour. When the current changed, it looked like leaked oil spread across the sea. There was something that smelled unusual. The witness was not sure if it was oil or not.
Soon after, the seaweed went white and soft. It died and washed away and then became difficult to grow like it was sick.Effect on seaweed farming —
Name of witness Axel Pierre Bruno Marcel Chalvet Affidavit details Sworn on 21 August 2017. Transcript XN: T580-584; XXN: T584-594; RXN: T594 Location of village Boa, Rote Island
Oil timing Sometime before the rainy season – around October/November 2009. Nature of
observationsThe witness observed that near his home there was a big mound of waxy, white, greasy substance floating all over the ocean. It looked like a very large river, of a width of a couple of hundred metres. It was moving with the wind. The white substance was accumulating in little whirlpools all over the beach on the sand, making clumps. It felt like greasy wax with salt/scales in it to the touch. The witness had not seen anything like it before.
Over the next few days, that substance was coming and going, sometimes in big and sometimes lesser quantities. This continued for a couple of weeks. The witness sometimes went into the water during that time, and had to wash himself quite a bit when he did.
The witness also described his observations about 7-10km south of Ndana Island, where he fished. There was lots of grease/wax floating around. His boat got really dirty.
He also described his observations at Kite Beach (quite a bit of a waxy substance around there which accumulated on the beach) and Oenggaut Beach (pools of wax, but less on the beach and more in the water).
The witness moors his boat in Oeseli harbour and usually it was difficult to get in and out because there was seaweed everywhere, but at the end of 2009 it was no longer difficult because there was no seaweed.
During XXN, it was put to the witness that a contemporaneous document that described a white/yellow foamy substance (emails drafted by the witness’ mother) were more accurate than his recollection of a waxy/greasy substance but the witness rejected those assertions (T593:27-30).Effect on seaweed farming —
Name of witness John Gregory Rogers Affidavit details Sworn on 30 September 2017. Transcript — Location of village Nemberala, Rote Oil timing October/November 2009. Nature of observations There were brown masses floating on the surface of the sea. These masses were about four metres across. They were substantial enough to have collected debris from the water, including rubbish. The witness saw these masses on four or five separate occasions over a few weeks. The witness also observed a large dead fish (probably a groper) on one of these occasions, near Do’o Island.
When kite boarding in October 2009, the witness noticed a black gummy substance sticking to his feet and his board. The black substance was almost everywhere along Kite Beach. It was difficult to get the substance off both skin and boards.
The witness does not recollect seeing the substance on the sand, but experienced it almost every time he went into the water in 2010 and 2011. He does not recall it after 2011.Effect on seaweed farming —
Name of witness John Douglas James Guiney Affidavit details Sworn on 29 September 2017. Transcript — Location of village Nemberala, Rote
Oil timing October 2009. Nature of observations There was a significant level of pollution in the waters near Nemberala in 2009. In October 2009, the witness observed a black gummy substance sticking to his kite board equipment at Kite Beach. The substance was greasy and slippery. It was present at least until November 2009 (when the witness left Nemberala) and some of the substance was still observable when the witness returned in late April or May 2010.
There was also a white foamy waxy substance on the logs and sticks at the beach, and on the seaweed ropes at Nemberala, with black waxy lumps mixed into it. When the witness lay on the sand, there were greasy oily marks on his clothes. There were also black greasy marks on hisclothes after he went surfing. The witness deposed that he knew the substance was oil, because he had seen something similar in Wellington, NZ.
Effect on seaweed farming —
Name of witness Bartolo La Macchia Affidavit details Affirmed on 5 March 2019. Transcript — Location of village Kupang Oil timing Late August/early September 2009. Nature of observations The witness’ son observed something he thought was oil in the water 90nm SSE of Kupang (Fantome Shoals fishing area). The same oily substance was observed by the witness’ son 60-70nm east of Fantome (Mangola Shoals fishing area). All of the scampi and lobster the witness’ son fished in that area was ruined.
7-10 days later, the witness smelt oil in Tenau harbour and there was a sheen all over the water that stretched south and north to Kupang Bay. The witness was told other people had also seen oil in Kupang.Effect on seaweed farming —
Name of witness Antony La Macchia Affidavit details Sworn on 15 March 2009. Transcript — Location Kupang (the witness went fishing south east in the ocean and lived at Kelapa Lima) Oil timing Late August/early September 2009. Nature of observations There was a disturbance on the surface of the ocean at Fantome Shoal and rainbow colours on the water. It looked like diesel had been dropped onto the ocean. It was all around the witness’ boat on the water, spread as far as he could see. There was a strong smell of diesel. It was overpowering and gave the witness a headache. The fish catch in that area was contaminated. The fish were covered in a shiny substance that smelt strongly of oil. The catch could not be cleaned, because the water was dirty.
A friend of the witness said he was travelling through oil in Australian waters, south of Ashmore reef, and had done so for 24 hours (subject to s 136 limitation).
At Mangola Shoal, there was a smell of diesel and there was more oil at Mangola Shoal than Fantome Shoal. There were parts of the surface of the ocean that had the appearance of rainbow colours and there were puddles of thicker oil of a pale brown, muddy colour with pale brown lumps. Where the boat moved through the oil, it became creamy and foamy as if it had been mixed with milk. It made the witness think it formed an emulsion. Parts of the oil that did not become foamy were about 1cm thick on the surface of the ocean. The appearance of the oil in the water was not consistent – some it just looked dirty but it was clear something was not right/abnormal.
After leaving the Mangola Shoal, the witness continued to see patches of brown oil and sheen. After steaming for 6-7 hours (about 100km) north-west to Kupang the witness saw clean water. The witness did not notice anything unusual at Kupang port.
A week after the witness was fishing, he noticed the smell of oil near his home. He could see an oily sheen in streaks on the surface of the water in Tenau harbour. It was visible there at least a few days. Within a week or so of smelling the oil, the seaweed farms in the harbour were no longer there. They appeared to have ceased operating.Effect on seaweed farming —
Name of witness Ghislaine Llewellyn Affidavit details First affidavit sworn on 30 August 2018; Second affidavit sworn
28 March 2019.Transcript — Location of village — Oil timing Survey undertaken 26-28 September 2009. Nature of
observationsOn the expedition boat on 27 September 2009, the witness observed a foul, strong, chemical smell in the air and felt a burning sensation at the back of her throat. There were patches and windrows of oil on the surface of the water. The characteristics varied in different areas. Samples of a waxy substance were collected. At times, there was a heavy blanket of oil on the surface of the water as far as the eye could see. It smelled like standing on the forecourt of a petrol station.
The report annexed to the witness’ first affidavit provides detailed records of observations of the area around the oil spill and marine life encountered in the area.
The witness’ second affidavit attaches a range of photographs.Effect on seaweed farming —
Name of witness Simon Herbert Mustoe Affidavit details Affirmed on 10 August 2018. Transcript — Location of village — Oil timing Survey undertaken 26-28 September 2009. Nature of
observationsThe report annexed to the witness’ affidavit records the following observations (in addition to detailed information of the condition of the ocean and marine life).
Oil sheen was encountered patchily and there were some concentrated lines of waxy particles. There was a pungent smell of oil which gave observers dry throats and a bad taste in the back of their mouths. Nearer the well head there was a thick layer of oil like a soft yellow crust accompanied by a moderately heavy oil sheen and a strong oil smell.
Surface oil could readily be detected by extended patches of continuous glassy water, particles of white waxy residue and, in areas of moderate to high sheen thickness, the strong smell and presence of the soft yellow crust of unweathered wax with volatiles. Oil sheen was present for the majority of the three days of the survey. Oil sheen was found at distances beyond 70Nm from the well head.Effect on seaweed farming —
Name of witness Matthew Smith Affidavit details Affirmed 15 March 2019. Transcript — Location of village — Oil timing Deployed as an aerial observer in September and October 2009. Nature of observations One of the tasks of the witness was to identify the extremity of the oil and sheen. This was difficult because it did not form a clean unbroken line on the water surface. The oil and sheen was difficult to detect at times because it was variable in appearance.
It was possible to detect water vessels’ tracks as they cut through sheen and waxy films on the water.
Mud maps prepared by the witness reflect areas where observations of the oil were of: (a) a metallic/reflective substance; (b) orange/brown or yellow strings of substance in various concentrations; and (c) unconfirmed substance similar in appearance to brown/yellow strings.
Very detailed reports of observations of sorties undertaken during September and October 2009 are annexed to the witness’ affidavit.Effect on seaweed farming —
Name of witness James Watson Affidavit details Sworn on 30 August 2018. Transcript — Location of village — Oil timing Survey undertaken between 25 September 2009 and 4 October 2009. Nature of observations 44% of transects surveyed were in waters visibly affected by oil. There was high biodiversity in the areas of the oil spill. Some dead/dying species were observed in affected waters, including a Common Noddy, a Horned Sea Snake and 17 adult birds. Response to the oil slick was species-specific.
The oil was more prominent in transects north of the Montara oil well.
Detailed observations of fauna are recorded the in the report annexed to the witness’ affidavit.Effect on seaweed farming —
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