The Prestige disaster shows the need for government regulation.
Twenty million barrels of oil have sunk miles beneath the Atlantic Ocean, creating a timebomb that could go off anytime just off a pristine Spanish coastline. The Liberian-registered and Bahamian-flagged oil tanker MV Prestige somehow had developed a giant, gaping 50 meter gash amidships on her starboard side as she sailed through stormy conditions north of the Iberian peninsula. To say she was seaworthy when she set from port would simply be laughable. After a few days of listing and leaking two million barrels of oil, she broke up and sank. (*) (†) (‡) Ibidem has excellent coverage. (§) Obviously, neither Liberia nor the Bahamas troubled themselves with assessing the vessel. Their willingness to put their mark on a ship is inhibited by nothing but greed. Though I am not a lawyer, the private owners and lessors are probably now on the hook for very significant damages as fishing industries and wildlife areas are ruined. They knew the risks going in, and must have known that she wasn’t safe, but still chose the MV Prestige for their shipping business.
This is a textbook case where the free market has broken down and massive externalities—costs to parties not associated with the business transaction itself—must be borne by people who had nothing at stake and everything to lose. Regulation is called for. Something must done be at an international level to further ship safety, particularly that of oil tankers.