Exxon Mobil Corp. (XOM)’s New Zealand unit isn’t liable for the cost of cleaning up waterfront land it leased in Auckland partly because the country has no laws to deal with the issue, a judge ruled.
The Auckland Waterfront Development Agency, which is undertaking New Zealand’s biggest urban revitalization project, sought NZ$10 million ($8.3 million) from Mobil Oil New Zealand Ltd. to pay for the cost of the clean up in the area known as Wynyard Quarter, according to the ruling.
Mobil Oil operated a bulk fuel storage and distribution center at the site since the 1950s, leaving the properties “heavily contaminated” when it ceased operations in 2011, the judge said. The contamination was caused by Mobil’s own operations as well as what was left by previous oil company tenants and what had spread from neighbors, such as a 1.8 million liter spill of jet fuel by a Royal Dutch Shell Plc (RDSA) unit in 1986, the judge said.
“Unlike a number of other countries, New Zealand has no specific legislation dealing with liability for historic contaminated sites,” High Court Justice Sarah Katz wrote in the Feb. 7 decision, posted on the court’s website today.
Mobil acted reasonably, leaving the property in a condition suitable to be taken over by another industrial tenant, Katz said.
When it signed the last lease in 1985, “there was no realistic possibility of the land being used for commercial or residential purposes,” the judge wrote. “It was not until a further plan change became operative in 2010 that there were concrete provisions to develop the Wynyard Quarter.”
The area is now being developed to include a mix of residential, retail and commercial uses, while retaining existing marine and fishing industry uses, the judge said.
The case is between Auckland Waterfront Development Agency Ltd. and Mobil Oil New Zealand Ltd. 2014-NZHC-84. High Court of New Zealand (Auckland).
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