Dr T H Moller

Technical Team Manager

INTERNATIONAL TANKER OWNERS POLLUTION FEDERATION

www.itopf.comITOPF

STATUS OF THE INTERNATIONAL

COMPENSATION CONVENTIONS

STATUS OF THE INTERNATIONAL

COMPENSATION CONVENTIONS

Role of ITOPF

How CLC & FC operate

Benefits of the Conventions

Measures to improve Conventions

Performance record : Future outlook

ITOPF MEMBERSHIP

4,500 tanker owner Members

8,000 tankers of 194 million GT

Other ship owner Associates

310 million GT of non-tanker tonnage

P&I Clubs arrange ITOPF entries & pay dues

RESPONSE TO MARINE OIL SPILLS

Promoting an effective response to oil spills

Advising ship owners, P&I Clubs, IOPC Funds,

spill response community & victims

Technical advice on merits of claims

Attended 450 spills in 70 countries since 1972,

including 150 bunker spills from non-tankers

INTERNATIONAL COMPENSATION CONVENTIONS

CIVIL LIABILITY CONVENTION

(1992 CLC)

The International Convention on Civil Liability for Oil Pollution Damage, 1992

The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992

FUND CONVENTION

(administered by1992 Fund)

Supplementary Layer of Compensation

Primary Layer of Compensation

FUND CONVENTION

CIVIL LIABILITY

CONVENTION

1992 Fund

Oil Cargo Receivers

Tanker Owner

Insurance(P&I Club)

COMPENSATION CONVENTIONS a two-tier system

CLC 92 & Fund 92 CLC 92 only

Parties to Civil Liability and Fund Conventions at 1 December 2001

CLC 69 onlyCLC 69 & Fund 71

1992 CLC : STRICT LIABILITY~ RIGHT TO LIMIT LIABILITY

Registered owner liable, regardless of fault with very few exceptions (e.g. act of war)

Required to have insurance and certificate

Enables direct action against insurer

Right to limit lost if damage resulted from personal act or omission of owner done with intent or recklessly and with knowledge that damage would occur

CHANNELLING OF LIABILITY

Claims ‘channelled’ to registered owner

Servants, agents, any charterer, manager, operator, salvors or responders protected from claims for pollution damage

Unless damage resulted from their personal act or omission done with intent or recklessly with knowledge that damage would occur (same test as for owner)

Recourse actions not prevented

COMPENSATION LIMITS

Liability of tanker owner / P&I Club (in SDR) based on gross tonnage of tanker

~US$ 4 million for tanker of < 5,000 GT to ~US$ 77 million for tanker of > 140,000 GT

1992 Fund limit ~ US$174 million, including 1992 CLC

EC CONCERNS

Inadequate limits of liability

Inappropriate balance between responsibilities of different players & their exposure to liability

Shipowner’s ‘unbreakable’ limitation rights

No incentive on industry to use ships of high quality

Inadequate cover for environmental damage

INCREASE OF LIMITS

Post-ERIKA, 50% increases of CLC and Fund agreed by IMO Legal Committee October 2000

Under special terms in Conventions (tacit amendment procedure) new limits enter into force 1 November 2003, unless >25% object

CLC limits become:-

~US$ 6 million for tanker of < 5,000 GT to

~US$ 116 million for tanker of > 140,000 GT

1992 Fund limit ~ US$ 261 million (incl. CLC)

current CLC

current FC

current CLC

CLC + 50%

current FC

FC + 50%

current CLC

CLC + 50%

current FC

FC + 50%ERIKA

NAKHODKAHAVEN

IOPC FUND RESPONSE

Response to EC and other concerns

1992 Fund Intersessional Working Group on operation of CLC and Fund

Consideration of issues could lead to fundamental revision of Conventions

WG met in March and June and reported to Fund Assembly in October 2001

Input by industry observer associations

MAXIMUM LIMITS

Difference of opinion on need to increase limits beyond 2003 levels

Agreement to Protocol establishing an ‘opt-in’ Supplementary Fund (‘third tier’)

Only apply in States that ratify Protocol

Operation of 1992 Conventions unaffected

Maximum limit to be decided by Diplomatic Conference, probably in 2003

BALANCE OF RESPONSIBILITIES

Purpose of CLC & FC to provide compensation, not to be punitive

Victims indifferent to source of compensation

Preserve existing balance of measures to facilitate compensation

Industry supportive of Supplementary Fund

To maintain equitable sharing, P&I Clubs have proposed voluntary increase in small ships limit in States party to Supplementary Fund

ENVIRONMENTAL DAMAGE

Continued strong opposition to use of ‘theoretical models’ as outside of definition of ‘Pollution Damage’ in Conventions

Emphasis remains on actual restoration/ reinstatement of damaged resources

Encouragement of innovative measures and post-spill studies - must be ‘reasonable’

Little enthusiasm for expanding provisions to allow acquisition of equivalent components to those damaged or destroyed

COMPENSATION CONVENTIONSthe record : the future

Successful formula adopted by 74 countries: >2,000 CLC cases & >100 FC cases settled

IOPCF WG’s mandate extended to consider:– shipowners’ right to limit (CLC 69 test?)– limit of liability under 1992 CLC– channelling (exposure of charterer to claims?)– environmental damage

Fundamental changes to 1992 CLC and Fund would require further Protocol

CLC 92 & Fund 92 CLC 92 only

Parties to Civil Liability and Fund Conventions at 1 December 2001

CLC 69 onlyCLC 69 & Fund 71