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Cedric Stephens | Rio Cobre oil spill risk and opportunity

Diana McCaulay describes herself as an environmental activist and the founder of the Jamaica Environment Trust. This sketch is incomplete. She is also a well-known author and once worked in the insurance industry.

Her August 21, 2022 newspaper article, ‘In search of Rio Cobre’, gave me valuable insights into the December 13, 2023, Gleaner piece ‘Mystery Rio Cobre oil spill sparks concern: Fishers distressed by yet another disaster’, written by Ruddy Mathison.

McCaulay’s field and desk research about this river began soon after what she said was “a devastating fish kill on July 30-31, due to an effluent release from the bauxite-alumina refinery at Ewarton, St Catherine”.

The Rio Cobre ecosystem is “an extraordinarily complex freshwater system. It supplies between 30 and 40 per cent of the fresh water for Spanish Town and St Catherine. 150,000 people rely on it for fresh water. Water is either extracted for various human uses or is a recipient of waste from industry and agriculture. The river begins in the Vale of Lluidas as a small stream known as Murmuring Brook. It rises as a spring from the limestone in the western section of the vale, flows across it, and sinks north of a bridge over the rocks and sand of the Great Gully. Murmuring Brook then rises at Riverhead, west of Ewarton, in a huge cave, and there it becomes the Black River. The Pedro River flows from west to east underground to join the Black River, which flows easterly to join the Pleasant Farm Gully at Jericho, (where) it becomes the Rio Cobre,” she wrote.

Potential impact

Her word picture of the Rio Cobre ecosystem and the community organisation president’s and residents’ comments about the distress caused by the recent oil spill and its potential impact on the lives and livelihoods changed my perceptions about that disaster – from abstract to real life. Disaster is defined in the Disaster Risk Management Act 2013 as “an event or other calamity, whether caused by an act of God or otherwise”, which results or threatens to result in loss or damage to property or the environment; or results from events such as fire, earthquake, accident, an act of terrorism, storm, hurricane, pollution, disease, earthquake, drought and flood.

I cannot recall seeing anything from the local non-life insurance industry that suggests they offer products that protects the environment or offers coverage against pollution. Earthquake, hurricane, fire, flood, terrorism, etc, yes, but no pollution. Why not? Pollution is not limited to our rivers. Is this another example of market dysfunction?

The Rio Cobre is not the only river that suffers from pollution by the actions of corporate and other interests. In 2019, I wrote the following: “J. Wray & Nephew Limited, JWN, a subsidiary of The Campari Group, was sued in December 2015 for US$23 million by fish farmers, Algix Jamaica Limited. The latter alleged that effluent from JWN’s sugar-producing farm in St Elizabeth was released into the Black River and caused damage to their property. The three-year legal fight was settled for US$1.2 million. The bulk of the payout was covered by the parent company’s insurance and therefore had minimal impact on JWN’s earnings.”

Legally liable

The important point is that the courts held the polluters legally liable because their actions damaged the property of third parties, and financial resources were available to pay the court award and legal expenses. This was a teaching moment for the National Environment and Planning Agency. Did they learn anything from this case?

Multinational companies operating in Jamaica, from my experience, typically understand environmental risks. Environmental impairment liability, or EIL insurance, invariably forms part of their protection package. Unfortunately, these types of risks are often not on the radars of locally owned companies or our insurance industry.

McCaulay ended her piece about the Rio Cobre this way: “We have been using and abusing the Rio Cobre (and other) ecosystems without care or understanding for centuries. It is time we found a way to use the gifts of our (intellect), rivers, and groundwater – to use the language of the Charter of Rights and Freedoms – (to protect) our ecological heritage, without destroying it.”

Insurers can, with a little imagination, help to protect the country’s ecological heritage. They can do so by selling a pollution safety inspection service, along with pollution liability insurance, to entities that are exposed to these risks and require a NEPA permit.

Regular inspections by trained and independent professionals would help to reduce the frequency of pollution events that have been affecting the Black River, Rio Cobre, and other locations.

The proposed model is not new. Boiler and machinery insurance coverage emerged in 1866 as an add-on to the safety inspections during a period of rapid mechanisation. There were hundreds of boiler explosions during the early days of that new technology. Hundreds of persons were killed and injured.

Insurance historians believe that the safety inspections and the advice offered during the inspections helped to reduce the frequency of explosions and improve the safety environment in which the high-pressure vessels operated.

Does the recent Rio Cobre oil spill create business opportunities for insurers? Time will tell.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: or

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