- The judgment of the Federal Court in the Montara oil spill class action is the first environmental class action to be brought against an Australian company for loss suffered by foreign claimants due to cross-border pollution.
- The case provides a reminder that common sense underpins an approach to questions of causation; and predicted outcomes from models, however ‘sophisticated’, need not be preferred to lay observers’ evidence, even in matters of considerable factual and scientific complexity.
The recent judgment of the Federal Court in a cross border environmental class action regarding the 2009 Montara oil spill in the Timor Sea is a reminder that common sense underpins an approach to questions of causation.Predicted outcomes from models, however sophisticated the model, need not be preferred to lay observers’ evidence, however humble the observers (Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd (No 7)  FCA 237).
The central question in the proceedings was whether the Montara oil spill was the cause of the catastrophic damage to the claimant Indonesian seaweed farmers’ crops located along the coastal areas of the Rote/Kupang region, approximately 240 kilometres to the north west of the Montara oil field.
In an emphatic judgment Justice David Yates found that Montara oil reached the region in 2009 and caused the widespread damage to the seaweed. After considering the extensive pool of observation and other evidence before the Court, his Honour found: ‘We will never know the precise mechanism(s) or pathway(s) by which the crops died … But the fact that:
(a) Montara oil from the H1 Well blowout reached the coastal areas of Rote/Kupang; (b) the crops located where the oil was observed died shortly after the oil arrived; (c) this coincident event was widespread in the Rote/Kupang region; and (d) there is no other plausible explanation for this widespread loss, combine to establish the causal connection between the presence of the oil and crop death. The obvious cannot be ignored’ (at ).
His Honour’s 330-page judgment traverses the factual and scientific issues, making new findings about the oil spill and its environmental impact. In the opinion of the authors, the judgment should provide a strong basis for the positive resolution of the case, being the first environmental class action to be brought against an Australian company for cross border pollution-related loss suffered by foreign claimants.
The class action by Indonesian seaweed farmers
On 21 August 2009, a major blowout at the Montara wellhead platform caused oil and gas to flow unabated into the Timor Sea for over 10 weeks in what was to become the worst oil spill in Australia’s offshore petroleum industry history.
The class action, a tort claim seeking damages for negligence, was commenced in the Federal Court by Daniel Sanda on behalf of a closed class of 15,482 Indonesian seaweed farmers against the operator of the Well, PTTEP Australasia (Ashmore Cartier) Pty Ltd (‘PTTEPAA’), a wholly owned subsidiary of the Thai oil and gas giant PTT Exploration and Production Public Company Limited.