Seaweed farmer wins damages over oil spill

·3-min read

The company behind one of Australia's largest oil spills has been found liable for damaging the livelihoods of thousands of Indonesian seaweed farmers.

The Federal Court on Friday afternoon ruled the operator of the Montara Wellhead Platform, about 700 kilometres west of Darwin, breached its duty of care to the farmers after untested, deficient barriers were used to cap its H1 Well in 2009.

Oil and gas spilled uncontrollably from the well into the Timor Sea for 74 days, damaging seaweed farms off Timor and an island further south.

Class action lead applicant Daniel Sanda, who lived on about $2000 a year before taking up seaweed farming on Rote Island, had calculated the oil spill cost him 739 million Indonesian rupiah ($A67,000) in profits over six years.

"I am satisfied that this oil caused or materially contributed to the death and loss of (Mr Sanda's) crop," Justice David Yates said.

"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."

The oil company, PTTEP Australasia, accepted it was negligent in suspending and operating the well but contended it didn't owe a duty of care to the farmers.

Even if that duty of care was owed and breached, it said there wasn't any evidence the oil reached the areas, let alone that oil was in a form that would be toxic to the seaweed crops.

It told Australian Maritime Safety Authority in August 2009 that about 200 to 400 barrels of oil was spilling per day, revising that to the higher figure at trial.

But Justice Yates found the rate was 920 barrels per day "as a minimum" and was likely being discharged at an uncontrolled rate exceeding 2500 barrels per day.

PTTEP had shown in its oil spill contingency plan that it was concerned as to whether oil spilled at the H1 Well could reach shorelines in Australia, Timor and Indonesia and harm the marine ecosystems there, he said.

While the modelling showed no impacts, it was not dealing with an uncontrolled well blowout arising from a failure to properly suspend the well, the judge said.

"The possibility of impacts to those shorelines and harm to the marine ecosystem carried with it the possibility of harm to those businesses or enterprises that depended on the commercial exploitation of that ecosystem, including in relation to seaweed," the judge said.

"I am satisfied, therefore, that the foreseeability of that risk of harm arising from the respondent's actual acts or omissions is established and that the respondent breached its duty of care to the applicant and the Group Members.

"No other consideration has been raised which militates against a finding of breach."

Justice Yates ruled Mr Sanda should be awarded 253 million Indonesian rupiah, having applied a discount of 40 per cent due to uncertainty in Mr Sanda's exact income and found that no income loss occurred in 2013.

The question of whether interest is paid on that figure will be answered at a later date.

What compensation other seaweed farmers receive will also be decided at a later time.

PTTEP said it was disappointed in the outcome and emphasised group members' claims must be determined separately.

"PTTEP is carefully considering the judgment and the available avenues of appeal," a spokesman said