The International Regime for Compensation for Tanker Oil Spills
Working Group on Integrated Maritime Policy 24 March 2011
Måns JacobssonFormer Director,International Oil Pollution Compensation Funds
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International Compensation Regimes
1969 Civil Liability Convention1971 Fund Convention
• 1971 Fund
Old Regime
1992 Civil Liability Convention1992 Fund Convention
• 1992 Fund
2003 Supplementary Fund Protocol
• Supplementary Fund
New Regime
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International Treaties
• 1992 Civil Liability Convention123 States Parties
• 1992 Fund Convention105 States Parties
• 2003 Protocol to 1992 Fund Convention27 States Parties
1971 Fund Convention ceased to be in force on 24 may 2002
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1992 Conventions Apply to
• Pollution damage caused by• Spills of persistent oil from laden tankers• Bunker spills from unladen tankers with oil residues from previous voyage on board
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The Three Tier System3
Supplementary Fund Protocol Supplementary Fund Oil receivers after
sea transport
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1992 Fund Convention 1992 Fund Oil receivers after
sea transport
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1992 Civil Liability Convention Shipowners Insurers
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Main Features under Civil Liability Convention
• Strict liability of registered owner
• Limitation of liability
• Compulsory insurance
1992 Civil Liability ConventionLimits of Shipowner’s Liability
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GT SDR US $
5000 4 510 000 7 114 164
Per additional GTup to 140 000 631 995
GT 140 000 89 770 000 141 604 993
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The Fund Conventions
Applies:
• Shipowner exempt
• Shipowner financially incapable of meeting his obligations
• Damage exceeds the shipowner’s liability limit
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Shipowner exempt:• Damage resulted from an act of war,
hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or
• Damage was wholly caused intentionally by a third party, or
• Damage was wholly caused by negligence of public authorities in maintaining navigational aids.
Fund exempt:• Damage resulted from an act of war,
hostilities, civil war or insurrection
Exemptions
Jurisdiction and Enforcement of Judgements
• Courts in the State where damage occurred have exclusive jurisdiction
• Judgements rendered by courts competent under the 1992 Conventions or Supplementary Fund Protocol to be recognised and enforced in all States Parties
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Maximum Amount of Compensation
1992 CLC/Fund Conventions203 million SDR (US$ 320 million)
2003 Supplementary Fund Protocol750 million SDR (US$ 1 170 million)
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Limits Laid Down in the Conventions
0
200
400
600
800
1 000
1 200
0 20 40 60 80 100 120 140 160
$ (Millions)
Units of tonnage of ship(In thousands of units)
1992 CLC
1992 Fund
Supplementary Fund
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Structure of 1992 Fund
Assembly
ExecutiveCommittee
Secretariat
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Who Contributes to the Fund?
• Persons receiving >150 000 tonnes of contributing oil/year after sea transport
• Contributing oil = crude oil and heavy fuel oil
• Contributions decided by Fund Assembly
• Oil receivers pay, not governments
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1992 Fund: General Fund Contributions
Netherlands 7%
Rep. of Korea 8%
Italy 9%
Japan 17%
Others 26%
Spain 4%
Singapore 5%
Canada 5%United
Kingdom 5% India 7%France 7%
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Supplementary Fund
• Supplementary Fund established in March 2005
• Maximum compensation 750 million SDR (US$ 1 180 million), including amounts payable under 1992 Conventions
• Contributions to Supplementary Fund payable by oil receivers in Member States of that Fund
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Main Types of Damage
• Property damage
• Costs of clean-up operations and preventive measures
• Losses in fishery, mariculture and tourism:
• Environmental damage
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Property Damage
• Cleaning costs including costs of material and manpower
• Replacement
• Diminution of value
• Loss / damage caused by clean–up operations
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Common Problems as Regards at Sea Response
• Excessive use of aircraft for surveillance
• Excessive use of oil recovery vessels
• Failure to recognise limitations of response techniques
• Failure to monitor/control operations
Hebei Spirit, December 2007
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Common Problems as Regards Shoreline Clean-up
• Excessive use of manpower & equipment
• Excessive volumes of oil waste collected
• Failure to monitor/control operations
• Failure to consider net environmental and economic benefits of actions
Hebei Spirit, December 2007
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Admissibility Criteria for Costs of Clean-up and Preventive Measures
• Expense must actually be incurred
• Expense must be linked directly to the contamination
• Response measures should be reasonable and justifiable
• The costs incurred, and the relationship between these costs and the benefits derived or expected must also be reasonable
• Reasonableness is an objective technical criterion, not a political one
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Impact on Fishing and Mariculture
• Damage to fishing gear and consequential economic losses
• Contamination of mariculture facilities (fish cages, shellfish rafts, onshore tanks and ponds)
• Contamination of captive stocks (tainting, mortality)
• Fishing and harvesting bans
• Supply shortages may affect related industries
• Market effects
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Economic Loss
• To qualify for compensation there must be a sufficiently close link of causation between the contamination and the loss
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Environmental Damage
Admissible claims:
• Economic losses which can be quantified in monetary terms
• Costs of reasonable measures to reinstate contaminated environment
• No compensation paid for claims based on an abstract quantification of damage using theoretical models
• No punitive damages
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Reinstatement of the environment
• Clean-up
• Sand replacement following clean-up
• Replanting of mangrove saplings
• Replanting of marsh vegetation
In order to qualify for compensation:
• Measures should accelerate natural recovery process
• Measures should not cause further damage
• Measures should not degrade other habitats or adversely effect other natural economic resources
• Measures should be technically feasible
• Costs should not be disproportionate to extent and duration of damage and the likely benefits
Environmental Damage
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Uniform Application of the Conventions
• Essential for the functioning of the regime
• Equal treatment of claimants
• Development of international law
• United Nations Convention on the Law of the Sea Article 235
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Conclusions
• The international compensation regime under 1992 Conventions has in general worked well
• Continuous increase in Member States
• 140 incidents in 32 years
• US$ 950 million paid to victims
• Used as model in other fields
• Reviewed to ensure it meets the needs of society in the 21st century