THE GOVERNMENT DOES NOT HAVE MUCH CHOICE BUT to take over the salvage operations for the sunken MV Princess of the Stars because the vessel?s insurance coverage is limited to passengers and cargo and does not extend to ship damage, Sen. Manuel Roxas said.
Roxas said the government should act fast to prevent the shipwreck from causing any more damage to the environment because of its dangerous cargo of fuel and pesticide.
It should not wait any more for the shipowner, Sulpicio Lines, to take action, the senator said.
Roxas said that while Sulpicio was not compelled to purchase such insurance under the law because it was mainly a passenger and not a cargo liner, it should have obtained the insurance out of prudence considering its long history of disasters dating back to the sinking of the MV Doña Paz in 1987, considered the worst civilian maritime disaster in history in terms of lives lost (more than 4,000).
The senator said this could be the reason why it was taking Sulpicio such a long time to salvage its sunken ship. He recalled the well-funded salvage operations for the capsized Solar I that caused the Guimaras oil spill in 2006.
?This is one of the regulation loopholes that we hope to plug in the Senate investigation,? said Roxas.
The Oriental Assurance Corp., Sulpicio?s insurer, said the estimated 800 people on board the Princess of the Stars were covered by an accident insurance policy with the firm.
?Yes, passengers of Sulpicio Lines are insured by us, and we guarantee the payment of claims,? said Luz Cotoco, executive vice president of Oriental Assurance.
She said Oriental Assurance was financially healthy and capable of servicing all claims.
Cotoco declined to give the amount of insurance coverage for each passenger, saying Sulpicio Lines has asked that all insurance-related queries be directed to the shipping company.
An industry source said, however, that Oriental Assurance would pay P200,000 per passenger, or a total of about P160 million, to cover the estimated 800 people on board the sunken ship.
The source said Sulpicio Lines also has a P350-million marine hull insurance policy with Oriental Assurance that covers the cost of the ship.
But the owner of a rival shipping firm said that insuring the passengers and the vessel was not enough.
He said Sulpicio should have gotten, aside from accident insurance coverage for its passengers, a protective and indemnity insurance (P&I).
All responsible shipping firms know that getting P&I is absolutely necessary in the shipping business, the source said.
P&I is a form of a third-party liability insurance. It covers the cost of cleaning up possible oil spills and messes resulting from a shipwreck. P&I also covers the cost of the damage when a ship collides with another, or causes damage to other assets.
P&I is like the CTPL [comprehensive third-party liability] for cars, the rival shipowner said.
He said Sulpicio tried but failed to get P&I coverage three years ago, because no insurance company wanted to provide cover, knowing that Sulpicio?s ships were not in perfect condition.
Oriental Assurance said Sulpicio did not have a P&I policy with the firm.
Denis Cabucos, chief of the licensing division of the Insurance Commission, said he knew that Sulpicio has accident insurance coverage for its passengers but was not aware if it had P&I coverage.
Cabucos explained that insurance companies are not required to provide the Insurance Commission with a list of their policy holders.
But he said the commission would act on any insurance-related complaints received by its public assistance division.
Vicente Suazo, administrator of the Maritime Industry Authority, confirmed that Sulpicio did not have P&I insurance. But he said P&I coverage was not required by law.
?What is more important is accident insurance coverage for passengers. That is the one required by law [Republic Act No. 9295],? Suazo said in a phone interview.
He said it was arguable whether P&I was indispensable for shipping companies, but Sulpico Lines did not break the law by not having one.
