US railroad regulator sets hearing on liability for chemical spills

12 December 2011 18:28  [Source: ICIS news]

WASHINGTON (ICIS)--US railroad regulators said on Monday they will hold a public hearing on whether Union Pacific may require chemical manufacturers to compensate the rail carrier for hazardous substance accidents not caused by the railroad.

The US Surface Transportation Board (STB) said it will accept comment on the issue from any member of the public as well as from rail carriers and chemical shippers.

Three hearings will be held early in 2012, the board said, including final arguments to be made on 26 March.

Earlier this year, Union Pacific (UP) asked the board to decide whether the railroad’s freight charges – formally called tariff provisions – may require shippers of toxic inhalant hazardous commodities (TIH cargoes) to compensate UP for any costs or damages related to a hazardous cargo accident for which the rail operator was not responsible.

As the board explained in announcing the hearings, if the UP tariff provision were endorsed by STB, shippers would be required “to indemnify UP against liabilities resulting from the negligence or fault of shippers themselves, the negligence or fault of third parties, or from acts of God”.

That would include liabilities for any spill resulting from a failure or defect in the shipper’s equipment, such as a tank car, or an accident during the loading, sealing or securing of shipper equipment.

The UP requirement, if approved by the board, also would require TIH cargo shippers to compensate the rail operator for any fines, penalties or lawsuits resulting from alleged or actual violation of laws or regulations if the violation was not attributable to the railroad.

In addition to UP, Norfolk Southern Railway (NSR) and the Canadian Pacific Railway (CP) have joined in the petition for resolution of the matter.

US chemicals manufacturers argued in filings earlier this year that, if approved by the board, the UP petition would create an arbitrary policy on liability of the sort that the board had earlier refused in a separate case.

Shippers also argued that they cannot be held liable for accidents that occur when their equipment and cargoes are under the exclusive control of rail operators. Chemical makers also contend that it would be difficult for them to get liability insurance against rail accidents when their cargoes are out of their control.

The board said in order to resolve these and other issues, it would take evidence and argument from anyone interested in the matter.

Those wishing to comment on the UP petition should file notice of their intent to participate no later than 27 December.

By: Joe Kamalick
+1 713 525 2653

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