On 3 August 2016 Maurice Blackburn filed a class action in the Federal Court of Australia arising out of a major blowout at the Montara Wellhead Platform. Under the class action, compensation is sought for financial loss and property damage suffered by Indonesian seaweed farmers alleged to have been caused by the Montara Wellhead Platform oil spill.
Important notice to Group Members
On 19 March and 25 October 2021, Justice Yates handed down two judgments in the Montara oil spill class action in favour of Indonesian seaweed farmers. The judgments are available at the following links:
The parties attended a Court-ordered mediation in September 2022. Following negotiation, in November 2022, the parties agreed to settle the proceeding for AUD $192.5 million including legal costs and litigation funding commission. The proposed settlement has been agreed on a no admission of liability basis. On 23 February and 3 March 2023, the Court approved the settlement and deductions for legal costs, funding commission and funding expenses. In approving the settlement, the Court said:
“the proposed settlement sum of $192,500,000 appears likely to exceed the current value of the remaining [seaweed farmer] claims, together with costs to date and the costs of the distribution of the settlement sum.”
The settlement approval judgments are available at the following links:
- The 23 February 2023 settlement approval judgment is available here
- The 3 March 2023 settlement distribution judgment is available here
The Court has made orders for the tender of the role of Claims Administrator, who will manage the distribution of the settlement and payment of compensation to group members. The Court has appointed an independent referee to conduct the tender process and consider any tenders received. By 16 June 2023, the referee must submit a report to the Court setting out their view on which tender would provide the most just, fair and reasonable distribution of the settlement. Sometime thereafter, the Court will appoint a Claims Administrator to distribute the settlement.
The class action is brought against the company that operated the Montara Wellhead Platform, PTTEP Australasia (Ashmore Cartier) Pty Ltd (‘PTTEPAA’), a subsidiary of PTT Exploration and Production Public Company Limited.
The lead applicant in the class action is Mr Daniel Sanda, a seaweed farmer from Rote Island, Indonesia, who alleges that his seaweed crops were destroyed by oil from the Montara Wellhead Platform reaching the coastal waters of his island. Mr Sanda brings the action on behalf of approximately 15,000 seaweed farmers whose crops were destroyed in similar circumstances.
The action is being funded by Harbour Fund II, L.P.
What was the Montara oil spill?
The Montara Wellhead Platform is located in Australian waters approximately 685 kilometres west of Darwin, 630 kilometres northeast of Broome, 250 kilometres southeast of Indonesia, and within the offshore area of the Territory of Ashmore and Cartier Islands.
On 21 August 2009, a blowout occurred at the H1 Well, causing the uncontrolled release of oil and gas into the Timor Sea for 74 days until 3 November 2009. Despite PTTEPAA’s estimation that the volume of oil leaked was just 400 barrels per day, Geoscience Australia estimated that the blowout could have been 2,000 barrels of oil per day. The modest estimate of Geoscience Australia would equate to a total volume of around 148,000 barrels, or 23,532,000 litres.
The Montara oil spill was one of the largest in Australian history. 184,000 litres of oil-dispersing chemicals were used in the clean-up effort. Of the six different chemicals applied, two are known to increase oil’s toxicity to marine life.
Seaweed farming in Nusa Tenggara Timur, Indonesia
Nusa Tenggara Timur (NTT) is one of 34 provinces on the Indonesian archipelago. Historically, NTT has been one of Indonesia’s poorest provinces. However, from around the year 2000, seaweed farming developed as a profitable alternative to traditional fishing and agriculture, promising to greatly improve the economy and quality of life in NTT. Seaweed was even termed ‘green gold’, such was the improvement in the standard of living as a result of its cultivation. In the years prior to the Montara oil spill, Indonesians in NTT who had previously been subsistence farmers found themselves able to send their children to university in Jakarta and Bali, construct homes, and buy expensive items such as cars and motorboats.
In September and October 2009, seaweed farmers in NTT began to observe oil in and around their farms. Soon after, entire crops were destroyed, including the cuttings farmers would have used to plant the next harvest. Farmers persisted in their attempts to grow seaweed but many have still not reached the level of production that they enjoyed prior to the oil spill.
The Commission of Inquiry
In 2010 the Commonwealth Government held a Commission of Inquiry into the spill. The Commission described the most likely causes of the blowout as arising from ‘systematic’ errors of a ‘more deep seated kind’. The Commission concluded that PTTEPAA’s actions did not come within a ‘bull’s roar’ of sensible oilfield practice.
The Commission said further, “[t]he Blowout was not a reflection of one unfortunate incident, or of bad luck,” instead “[PTTEP AA’s] systems and processes were so deficient and its key personnel so lacking in basic competence, that the Blowout can properly be said to have been an event waiting to occur.” It further noted that “PTTEPAA did not seek to properly inform itself as to the circumstances and the causes of the Blowout. The information that it provided to the regulators was consequently incomplete and apt to mislead.”
The Commission recommended that the then-Minister for Resources and Energy, Martin Ferguson, review PTTEPAA’s operating licence at the Montara Oilfield. The Minister declined to issue a ‘show cause’ notice, which may have resulted in the cancellation of PTTEPAA’s licence. PTTEPAA ultimately pleaded guilty to four breaches of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) and was fined $510,000. However, PTTEPAA continues to operate at Montara to this day.
Status of the case
The Montara Class Action was filed in the Federal Court of Australia on 3 August 2016. A Further Amended Statement of Claim and Further Amended Originating Application were filed on 28 July 2017. On 14 August 2017, an Amended Defence was filed by PTTEPAA.
On 20 October 2016 a hearing was held before Justice Griffiths. The hearing concerned a procedural question as to whether group members in the class action had “commenced” a proceeding for the purpose of section 44 of the Limitation Act (NT) and therefore requested an extension of the limitation period pursuant to that Act. On 24 January 2017 Justice Griffiths handed down his judgment in favour of group members in the proceeding.
On 1 August 2017 a hearing was held before Justice Yates. The hearing concerned Mr Sanda’s application to extend his limitation period in the proceeding so that he could continue with his claim in the Federal Court. On 15 November 2017 judgment was given in favour of Mr Sanda. This means that Mr Sanda can continue with his claim against PTTEPAA.
Between 17 June and 13 December 2019 a number of hearings were held at the Federal Court, Sydney. Justice Yates heard from Mr Sanda and other local seaweed farmers, as well as a range of experts, about the alleged arrival of oil from the Montara oil spill in the Rote Ndao and Kupang regions, and the ensuing impact on the seaweed farming community. Mr Sanda presented evidence from leading experts in oceanography, satellite imagery analysis, chemistry and toxicology, in support of his case.
On 19 March and 25 October 2021, Justice Yates handed down two judgments in the Montara oil spill class action in favour of Indonesian seaweed farmers. Justice Yates found that the oil company owed a duty of care to Mr Sanda and the Group Members and that the company breached that duty of care when its suspension of the oil well went disastrously wrong in 2009 causing in excess of 2,500 barrels per day to pour into the Timor sea for 74 days, which led to the killing of seaweed crops in Indonesia. His Honour found that the oil reached the coastal waters surrounding the islands of Rote, Ndana, Ndao, Do’o, Nuse, and Semau, and around the south-western peninsula of Kupang, and Kupang’s westernmost coastal waters extending up to Kelapa Lima (the Relevant Region).
The judgments mean that Mr Daniel Sanda, the class representative, has been awarded compensation of 252,997,200 IDR plus interest that will amount to 163 million IDR, making Mr Sanda’s total compensation 416,289,624 IDR. His Honour also found the oil caused damage to seaweed and/or to its production at a number of locations where evidence was provided. He did not make a finding that oil caused damage to all parts of the Relevant Region, but he said that it was “more likely than not” that the oil caused damage to seaweed and/or to its production “at a great many other locations” in that region. Justice Yates did not make any findings in relation to how much compensation is owed to other seaweed farmers.
In September 2022, the parties attended a Court-ordered mediation. Following negotiation, in November 2022, the parties agreed to settle the proceeding for AUD $192.5 million including legal costs and litigation funding commission. The proposed settlement has been agreed on a no admission of liability basis. The Court will consider whether to approve the proposed settlement on 23 February 2023.
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