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INTERNATIONALOIL POLLUTION
COMPENSATION FUND
ANNUAL REPORT1988
©Jii O
N 1F
fflH
Y
INT
RN
AT
ION
AL ©
H=
CO
MP
EN
SA
©IN
TH
E C
ALÏ4R
Y
International Oil P
ollution Com
pensation Fund
4 Albert E
mbankm
entrond on
SE
l 7SR
United K
ingdomT
elephone: 01-582 2606T
elefax:01-587 3210
Telex: 23588 IM
OLD
N G
TU
UJL
Page
iIntroduction
5
2M
embership of the IO
PC
Fund
6
3C
ontacts with G
overnments
9
4R
elations with International O
rganisations and Interested Circles
i O
5C
onferences and Sem
inars1
1
6T
he 1 984 Protocols to the C
ivil Liability Convention
and the Fund C
onvention1 3
7A
ssembly and E
xecutive Com
mittee
1 3
7.111th S
ession of the Assem
bFy
14
7.220th S
ession of the Executive C
omm
ittee1 7
7.321st S
ession of the Executive C
omm
ittee17
8T
he Secretariat
79
Accounts of the IO
PC
Fund
1 8
1 0C
ontributions1 9
11Investm
ent of Funds
22
1 2S
ettlement of C
laims
2312.1
General Inform
ation23
12.2Incidents D
ealt with by the IO
PC
Fund during 1988
25T
AN
IO25
E[K
OM
AR
UN
°131
KO
SH
UN
MA
RU
N°1
31
PA
lMO
S32
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37B
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DY
WA
RIA
38O
UE
D G
UE
TE
RIN
I41
TH
UN
TA
NK
541
AN
TO
NIO
GR
AM
SC
I (Second lncident(
43S
OU
TH
ER
N E
AG
LE44
ELH
AN
I45
AK
AR
I45
HIN
OD
E M
AR
U N
°146
A'v\A
ZZ
ON
E47
TA
JYO
MA
RU
N°1 3
50K
AS
UG
AM
AR
UN
°150
13M
ajor Developm
ents during the Period 1978-1988
51
13.1D
ecisions Taken by the A
ssembly and the E
xecutive Com
mittee
51
Increase of the Maxim
um Liability of the IO
PC
Fund
51
Replacem
ent of Instruments E
numerated in
Article 5.3 of the F
und Convention
52
(C)
Interpretation of the Notion of 'P
ollution Dam
age"52
(dlC
onversion of (gold) francs into National C
urrencies53
Page
Interpretation of the Notion of R
eceived'in A
rticle 10 of the Fund C
onvention53
Notion of "P
ersistent Oil"
53S
hipowner's R
ight to Limitation of Liability
54E
stablishment of Lim
itation fund54
Procedures for D
ealing with C
laims against
the IOP
C F
und54
Notification of Incidents to the IO
PC
Fund
54R
evision of the Civil Liability C
onvention and
the Fund C
onvention55
13.2T
he IOP
C F
und's Monitoring of O
il Com
bating Operations
5613.3
Claim
s Settlem
ent Procedures
5613.4
Adm
issibilityof Claim
s58
Notion of "P
ollution Dam
age"58
Costs for C
leanwp O
perations and Preventive M
easures58
clD
amage Io P
roperty59
Additional C
osts and Fixed C
osts59
Salvage O
perations60
Loss of Earnings
60D
amage to the M
arine Environm
ent61
13.5S
ome Incidents D
ealt with by the IO
PC
Fund in P
revious Years
62A
NT
ON
IO G
RA
MS
CI (F
irst Incident)62
MIY
AM
AR
UN
°864
TA
RP
EN
BE
K65
ME
BA
RU
ZA
KI W
AR
U N
°565
SH
OW
A W
RU
66JO
SE
MA
R11
66G
LOB
E A
SIM
I67
FU
KU
TO
KU
MA
RU
N°8
68S
HIN
KA
I MA
RU
N°3
68R
OS
E G
AR
DE
N M
AR
U69
14C
oncluding Rem
arks70
Annexes
IS
tructure of the IOP
C F
und71
JIIncom
e and Expenditure A
ccount - General F
und72
IllIncom
e and Expenditure A
ccount - TA
NIO
Ma(or C
Jaims F
und73
IVB
alance Sheet of the IO
PC
Fund
74V
Contributing O
il Received in the T
erritories of
Contracting S
tates in the Calendar Y
ear 1 98775
VI
Sum
mary of Incidents
76
iIÑ
©T
M©
The International O
il Pollution C
ompensation F
und IIOP
C F
undl was set up in
October 1 978 for the purpose of providing com
pensation for oil pollution damage resulting
from spills of persistent oil from
laden tankers.T
his Annual R
eport for the calendar year
1988 covers the activities of the IOP
C F
und during its tenth year of operation.S
ince the
organisation has been in existence for ten years, the Report includes a résum
é of the malar
developments over the years.
Com
pensation for damage caused by oil spills from
laden tankers is governed byIw
o international conventions, the 1969 International Convention on C
ivil Liability for Oil
Pollution D
amage (C
ivil Liability Convention) and the 1971 International C
onvention on theE
stablishment of an International F
und for Com
pensation for Oil P
ollution Dam
age (Fund
Convention).
These C
onventions were elaborated under the auspices of the International
Maritim
e Organization lIM
Ol as a result of the T
OR
RE
Y C
AN
YO
N incident off the E
nglishcoast in M
arch 1967 which caused oil pollution dam
age of an extent previously unknown.
This incident m
ade the world aw
are of the need for international regimes of liability and
compensation for oil pollution dam
age.
The C
ivil bability Convention governs the liability of shipow
ners for ail pollutiondam
age.T
his Convention lays dow
n the principle of strict liability for shipowners and
creates a system of com
pulsory liability insurance.T
he shipowner is norm
ally entitled tolim
it his liability to an amount w
hich is linked to the tannage of his ship.T
he Convention
entered into force in 1975.A
s at 31 Decem
ber 1988, 62 States w
ere Party to this
Convention.
The F
und Convention, w
hich is supplementary to the C
ivil Liability Convention,
establishes a regime for com
pensation ta victims w
hen the compensation under the C
ivilLiability C
onvention is inadequate. The IO
PC
Fund w
as set up under the Fund C
onvention,w
hen the Convention entered into farce on 16 O
ctober 1978.T
he IOP
C F
und is aw
orldwide inter-governm
ental organisation established for the purpose of administering the
regime of com
pensation created by the Fund C
onvention.B
y becoming P
arty to the Fund
Convention, a S
tate becomes a M
ember of the IO
PC
Fund.
The organisation has its
headquarters in London.D
etails of the IOP
C F
und's organs (the Assem
bly, the Executive
Com
mittee and the S
ecretariatl are given in Annex I.
The m
ain functions of the IOP
C F
und are ta provide supplementary com
pensation tathose w
ho cannot obtain full compensation for ail pollution dam
age under the Civil Liability
Convention, and ta indem
nify shipowners for a portion of their liability under that
Convention. T
he compensation payable by the IO
PC
Fund in respect of any one incident
is limited to 60 m
illion Special D
rawing R
ights (corresponding to45 m
illion or US
$81m
illion), including the sum actually paid by the shipow
ner or his insurer under the Civil
Liability Convention.
5
©
At the tim
e of the entry into force of the Fund C
onvention,1 4 S
tates were P
arry tothe C
onvention.S
ince then, there has been a constant growth in the num
ber of Mem
berS
tates.A
t the end of 1983, ie after five years, there were 28 M
ember S
tates.A
s at31 D
ecember 1 988, 40 S
tates were M
embers of the IO
PC
Fund.
Three S
tates became M
embers of the IO
PC
Fund during 1988.
The F
undC
onvention entered into force for the Republic of C
ôte d'ivoire on 3 January 1988, for theR
epuHic of S
eychelles on 11 July 1988 and for the State of Q
atar on 31 August 1988.
The developm
ent of the IOP
C F
und's mem
bership is illustrated in the folFow
inggraph.
MR
IP O
ID
©P
C tU
t\IH
EN
TR
Y1978
19791980
19811982
INT
O
FO
RC
EY
EA
R E
ND
o
-<I-
<I
19831984
1985 z-¿
19861987
1988
10 -
o
As at 3 1
Decem
ber 1988, the following 40 S
tates were M
embers of the
IOP
C F
und:
Algeria
Baham
as
Benin
Carneroon
Côte dIvoire
Denm
ark
Fili
Finland
France
Gabon
Germ
any, Federal R
epublic ofG
hanaG
reeceIceland
ndonesiaItaly
Japan
Kuw
aitLiberia
MaldivesT
he geographical distribution of Mem
ber States is show
n on the map reproduced
on page 8.
On the basis of the inform
ation available to the Funds S
ecretariat,it
is expected
that several States w
ill loin the IOP
C F
und in the near future.In C
anada, Ireland, Morocco
and Vanuatu, the P
arliaments hove approved the F
und Convention and the necessary
implem
enting legislation, and these States w
ill soon deposit their instruments of accession to
the Convention.
Legislation implem
enting the Fund C
onvention is in an advanced stage inB
elgium, C
yprus, the Germ
an Dem
ocratic Republic and S
audi Arabia. M
any other States
are also considering acceding to the Fund C
onvention.
The A
ssembly of the IO
PC
Fund has over the years granted observer status to a
number of non-C
ontracting States.
As at 31 D
ecember 1988, the follow
ing States have
observer status:
7
Monaco
Netherlands
Nigeria
Norw
ay0m
o nP
apua New
Guinea
Poland
Portugal
Qatar
Seychelles
Spain
Sri Lanka
Sw
eden
Syrian A
rab Republic
Tunisia
Tuvalu
Union of S
oviet Socialist R
epublics
United A
rab Em
iratesU
nited Kingdom
Yugoslavia
Argenti ria
Germ
an Dem
ocratic Republic
Belgium
Ireland
Brazil
Mexico
Canada
Sw
itzerland
Chile
United S
tates of Am
erica
China
Venezuela
Cyprus
Members States of the IOPC Fund as at 3 1 December 1 988
3©
©
The IO
PC
Fund and its S
ecretariat have always benefited from
strong support fromthe G
overnments of M
ember S
tates.D
ue to the spirit of co-operation shown by these
Governm
ents, it has been possible to resolve rapidly most problem
s which have arisen.
Over the years, the D
irector has visited a number of M
ember S
tates.T
hese visits
have contributed to the establishment of valuable personal contacts betw
een the IOP
C F
undS
ecretariat and officials within the national adm
inistrations dealing with F
und matters.
During 1988, the D
irector visited seven Mem
ber States - F
inland, France, G
abon, Greece,
Indonesia, Italy and Monaco
for discussions with governm
ent officials on the Fund
Convention and the operations of the IO
PC
Fund.
In this context, it is appropriate to note the importance of the special relationship that
the IOP
C F
und has with the G
overnment of the U
nited Kingdom
as the Host G
overnment.
The generous financial support given by the U
nited Kingdom
Governm
ent, in the form of the
payment of a m
ajor part of the rent and certain other costs for the IOP
C F
und's offices, hasreduced the cost of adm
inistering the IOP
C F
und.T
he United K
ingdom G
overnment has
also in many other respects given the IO
PC
Fund valuable assistance and advice, from
time
to time.S
ince the establishment of the IO
PC
Fund, the S
ecretariat has made great efforts to
increase the number of M
ember S
tates.T
he Assem
bly has emphasised on several
occasions the importance of an increased m
embership.
To this end, the S
ecretariat hastried ta convey as m
uch information as possible about the C
ivil Liability Convention and the
Fund C
onvention to governments and representatives of industry.
In 1988 alone, theD
irector went to A
ustralia, Cyprus, M
alaysia, New
Zealand, S
ingapore, Thailand, T
rinidadand T
obago and Venezuela for discussions on the C
ivil Liability Convention and the F
undC
onvention with governm
ent officials in these States.
The Legal O
fficer visited Jamaica in
1988 for the same purpose.
The D
irector and the Legal Officer usually have discussions w
ith government
representatives of both Mem
ber and non-Mem
ber States in connection w
ith meetings w
ithin1M
O.
In 1988, such discussions were held in particular during the sessions of the 1M
OC
ouncil.The IO
PC
Fund S
ecretariat has, on request, assisted several non-Mem
ber States in
the elaboration of the national legislation necessary for the implem
entation of the Civil
Liability Convention and the F
und Convention.9
qllÏll
zSE
hLR
E1rL
CIR
U.
The operation of the IO
PC
Fund has been greatly F
acilitated by close co-operationw
ith many international inter-governm
ental organisations. The assistance and support given
by 1MO
to the IOP
C F
und is of special importance. T
his support was crucial during the first
years, but still after ten years this close link with 1M
O is of great value to the IO
PC
Fund.
The co-operation betw
een 1MO
and the IOP
C F
und is governed by a special agreement,
signed in1 979.
Co-operation w
ith other organisations within the U
nited Nations system
,as w
ell as with inter-governm
ental organisations outside that system, has also been of great
value to the IOP
C F
und.
The U
nited Nations and 1M
O are alw
ays invited to be represented as observers atthe sessions of the A
ssembly and the E
xecutive Com
mittee.
The A
ssembly has granted
observer status to the United N
ations Environm
ent Program
me (U
NE
P) and to tw
o inter-governm
ental organisations, the European E
conomic C
omm
unity (EE
C) and the International
Institute for the Unification of P
rivate Law IU
NID
RO
IT).
Over the years the IO
PC
Fund has m
aintained close co-operation with a num
ber ofinternational non-governm
ental organisations and other non-governmental bodies.
The
following
ii
international non-governmental organisations have observer status w
ith theIO
PC
Fund:
Advisory C
omm
ittee on Pollution of the S
ea (AC
OP
S)
Baltic and International M
aritime C
onference (BIM
CO
IC
omité M
aritime International IC
MII
Cristal Ltd
Friends of the E
arth International IFO
EI)
International Association of Independent T
anker Ow
ners (INT
ER
TA
NK
O)
International Cham
ber of Shipping (IC
S)
International Group of P
& I C
lubsInternational T
anker Ow
ners Pollution F
ederation Ltd (ITO
PF
)
International Union for the C
onservation of Nature and N
atural Resources IIU
CN
IO
il Com
panies International Marine F
orum (O
CIM
FI
The co-operation betw
een the IOP
C F
und and the P &
IC
lubs is of specialim
portance. This ca-operation is based on tw
o Mem
oranda of Understanding, one signed
in 1980 by the International Group of P
& I C
lubs and the IOP
C F
und, the other signed in1 985 by the Japan S
hip Ow
ners' Mutual P
rotection and Indemnity A
ssociation ((PIA
) andthe F
und. This co-operation is not only in the interest of the IO
PC
Fund and the C
lubs butalso in the interest of claim
ants, since it contributes to the speedy settlement of claim
s.
10
The International T
anker Ow
ners Pollution F
ederation Ltd )ITO
PF
) is usually calledupon by the IO
PC
Fund to provide technical expertise w
ith regard to oil pollution incidents;hO
PE
s assistance is crucial, os the IOP
C F
und does not hove such expertise within its
Secretariat.
Co-operation w
ith shipowners is facilitated by contacts w
ith the InternationalC
hamber of S
hipping and INT
ER
TA
NK
O.
There is also close co-operation betw
een the IOP
C F
und and oil industry interestsrepresented by the O
il Com
panies International Marine F
orum IO
CIM
F) and by C
ristal Ltd,w
hich operates the voluntary compensation schem
e set up by the oilindustry.
The co-
operation between the IO
PC
Fund and C
ristal will be even m
ore important in the future, in
view of the fact that a link w
as created in1 987 betw
een the system of com
pensationgoverned by the international C
onventions and the voluntary industry schemes IT
OV
ALO
Pand C
RIS
TA
L) as a result of the revision of the voluntary schemes in
1 987.
During recent years, valuable contacts have been established w
ith non-governm
ental organisations representing environmental interests.
tC
ON
FE
N1
LIDT
he Director and the Legal O
fficer have over the years given lectures at seminars,
conferences and workshops on liability and com
pensation for oil pollution damage and the
operations of the IOP
C F
und.
During 1988, the D
irector lectured at a sub-regional seminar for W
est and Central
Africa, held in Libreville G
aben) with participants from
i 6 States.
In connection with his
visits to Greece, Indonesia and M
alaysia, the Director gave lectures on the com
pensationsystem
under the Conventions to representatives of public authorities and interested circles in
these countries. The D
irector also made a presentation of the IO
PC
Fund to m
embers of the
French M
aritime Law
Association in P
arisF
rance).H
e gave lectures on liability andcom
pensation for oil pollution damage to the students of the W
orld Maritim
e University
n
Malm
ö (Sw
eden).T
he Director lectured at a P
acific Regional W
orkshop on Oil S
pillR
esponse, held in Brisbane )A
ustralia), and at a seminar on the Legal A
spects of a Ma)or
Tanker S
pill, held in Caracas V
enezuela).
The Legal O
fficer lectured on oilpollution liability at a training course on oil
pollution combating )M
ED
IPO
L 881, which w
as organised by the Regional O
il Com
batingC
entre for the Mediterranean S
ea (RO
CC
) in Valletta (M
alta), and at a workshop in P
uertoR
ico on Oil S
pill Contingency P
lans for the Caribbean region, w
ith participants from1 5
States.
In addition, the Legal Officer gave lectures on liability and com
pensation for oilpollution dam
age at a seminar on m
arine pollution combating system
s, held in Tokyo
(japan), with participants from
i O countries in the E
ast and South C
hina Sea region, and at
a regional seminar on M
AR
PO
L 73/78 for the South E
ast Asian countries, held in
Singapore.
11
Mii B
redholtC
hairman of the A
ssembly
Ji H
Session of the A
ssembly
October 1988
12
[©O
C©
]ÏT
©iS
7ML ]U
Zi
AN
D T
ftJLE
©V
In1 984 a D
iplomatic C
onference held in London adopted two P
rotocols to amend
the Civil Liability C
onvention and the Fund C
onvention, respectively.T
hese Protocols
provide higher limits of com
pensation and a wider scope of application than the
Conventions in their original versions.
The P
rotocol to the Civil Liability C
onvention has been ratified by the Federal
Republic of G
ermany, F
rance, Peru and S
outh Africa.
The F
ederal Republic of G
ermany
and France have becom
e Party also to the P
rotocol to the Fund C
onvention.In the U
nited
Kingdom
, Parliam
ent has approved legislation implem
enting the Protocols, and it
is
expected that the United K
ingdom w
ill soon ratify both Protocols.
In the United S
tates of
Am
erica, the Protocols and the necessary im
plementing legislation are being considered by
Congress.
Several other S
tates, eg Denm
ark, Finland, the N
etherlands, Norw
ay andS
weden, have begun preparing legislation enabling them
to ratify the Protocols.
ltis not
possible to make any prediction as to w
hen the1 984 P
rotocols will com
e into force.
7LS
SE
MB
LY A
ND
XE
CW
VE
©kA
ITT
EE
The A
ssembly, the suprem
e organ of the IOP
C F
und, is composed of representatives
of all Mem
ber States.
Sessions of the A
ssembly are held every year, norm
ally in October.
Mr J B
redholt IDenm
arkl has held the post of Chairm
an of the Assem
bly since theestablishm
ent of the IOP
C F
und in 1978.
The E
xecutive Com
mittee is com
posed of one third of the Mem
ber States but of not
more than 15 S
tates.T
he main function of the C
omm
ittee isto approve settlem
ents of
claims against the IO
PC
Fund, to the extent that the D
irector is not authorised to make such
settlements.
The E
xecutive Com
mittee elected in 1979 as its
first Chairm
an Professor
H T
anikawa U
apanl, who chaired the first four sessions of the C
omm
ittee from 1979 to
1981. He w
as succeeded by Mr P
Novia (Italyl w
ho held this post from 1981 to 1982.
Mn
Perrett lU
nited Kingdom
l chaired the Com
mittee from
1982 to 1983, Mr H
Muttilainen
Finland) from
1983 to 1984 and Mr W
Sturm
s INetherlands) from
1984 to 1985.P
rofessor Tanikaw
a again held the post of Chairm
an from 1985 to 1987.
Since the
Com
mittee's 1 9th session in O
ctober 1 987, the post has for the second time been held by
Mr N
ovia.
13
l'fI©
[t'f1 © 1?}iio
[oDy
14
The A
ssembly held its 11th session from
19 to 21 October 1988. M
r J Bredholt
(Denm
ark) was re-elected C
hairman of the A
ssembly.
The m
ai01 decisions taken at this session were as follow
s.
(a)T
he Assem
bly took note of the opinion given in the External A
uditor's Report on the
Financial S
tatements of the IO
PC
Fund and approved the accounts for the financial
period 1 January to 31 Decem
ber 1987.
lb)T
he Assem
bly adopted the budget appropriations for 1989 with an adm
inistrativeexpenditure totalling 2446 840.
)c(T
he Assem
bly decided that an amount of 213.9 m
illion of the balance on theT
AN
IO m
a)or claims fund should be reim
bursed pro rata, on 1F
ebruary 1989, tothe persons w
ho had made contributions to that m
a)or claims fund, and that any
amount in excess of 213.9 m
illion should be transferred to the general fund.In
addition, the Assem
bly decided that each contributor should be given the option tochoose w
hether the amount to w
hich he was entitled should be repaid to him
, orw
hether the amount should be credited to his account w
ith the IOP
C F
und for set-offagainst annual contributions that w
ould be levied in subsequent years.
(d(T
he working capital of the IO
PC
Fund w
as increased by the Assem
bly from22 m
illion to 24 million.
The A
ssembly decided to levy 1988 annual contributions in the am
ount of22 900 000 for the general fund and in the am
ount of 290 000 for the JAN
ma(or
claims fund, to be paid by 1 F
ebruary 1 989.
The follow
ing States w
ere elected mem
bers of the Executive C
omm
ittee to holdoffice until the end of the next regular session of the A
ssembly:
Baham
asLiberia
France
Nigeria
Greece
Sri Lanka
IndonesiaS
weden
ItalyT
unisia
JapanU
nion of Soviet S
ocialist Republics
Kuw
aitU
nited Kingdom
Professor H
Tanikaw
a
First C
hairman of the E
xecutive Com
mittee
Mr P
Novia
Present C
hairman of the E
xecutive Com
mittee
15
Dr R
H C
antenD
irector i 9781 984
Mr M
jacobssonD
irector from 1985
lo
17
The A
ssembly adopted a R
esolution in which M
ember S
tates were urged, inter alia,
to submit their reports on contributing oil
receipts at the time and in the m
annerprescribed in the IO
PC
Funds Internal R
egulations. The A
ssembly drew
the attentionof M
ember S
tates to the fact that they should ensure that those persons who receive
less than1 50 000 tonnes of contributing oil
in the calendar year are reported,if
they are liable to pay contributions pursuant to the special provisions on associatedpersons in the F
und Convention.
A request for observer status from
the Republic of C
yprus was approved by the
Assem
bly.
©f?
©G
ii ©
The E
xecutive Com
mittee held its 20th session from
1 7 to1 9 O
ctober 1988 underthe chairm
anship of Mr P
Novia Iltalyl.
The E
xecutive Com
mittee w
as informed of the situation in respect of the settlem
ent of
claims arising out of pollution incidents involving the IO
PC
Fund.
Inparticular, the
Com
mittee discussed the developm
ents that had taken place in the TA
NIO
, PA
lMO
S and
AN
TO
NIO
GR
AM
SC
I cases.T
he Com
mittee also evaluated the experience gained from
the TA
NIO
case, the most im
portant incident in which the IO
PC
Fund has been involved.
7sfr
esn ©{ the E
xecutive mm
eA
t its 2 1 st session, held on 21 October 1 988, the E
xecutive Com
mittee re-elected
Mr P
Novia (Italy) as its C
hairman.
TH
E S
EC
RE
TA
RIA
T
The S
ecretariat is headed by a Director w
ho is the legal representative of theorganisation.
The S
ecretariat administers the IO
PC
Fund and, in
particular, deals with
claims for com
pensation.
At its
ist session, in Novem
ber 1978, the Assem
bly appointed Dr R
einhardH
Ganten (F
ederal Republic of G
ermany) as D
irector from 16 D
ecember 1978. D
r Ganten
held this post until 3 i Decem
ber i 984 and thus steered the organisation through its first sixyears.
In October
i 984, the Assem
bly appointed Mr M
âns Jacobsson (Sw
eden) to thepost of D
irector for the period1 january 1 985 - 31 D
ecember 1989.
The S
ecretariat has at present seven staff mem
bers: the Directoç the Legal O
fficer,the F
inance/Personnel O
fficer, three Secretaries and a M
essenger. The present structure of
the Secretariat w
as in the main established in
1 98 1.O
nly one new post has been created
since then, that of a Messenger in 1983.
At the tim
e of the establishment of the IO
PC
Fund, the A
ssembly decided that the
organisation should have a small S
ecretariat and that it should use outside experts for thefulfilm
ent of tasks which could not be carried out by the perm
anent staff mem
bers.E
xperience has shown that the solution adopted, ie that of a sm
all Secretariat, w
as a goodone.
lt has been possible to carry out the operation of the IOP
C F
und at a very low cost.
Consultants, such as law
yers, surveyors and other technical expetts, are used by the IOP
CF
und, mainly in connection w
ith incidents in which the F
und has been involved.
CC
©JT
©E
TH
IOP
C
The accounts of the IO
PC
Fund for the financial period
1 January to 3 1D
ecember
1987 were approved by the A
ssembly at its
i ith session in October 1988.
The Incom
e and Expenditure A
ccounts for the period1 January to 3 1
Decem
ber
1987 are shown in A
nnexes Il and Ill fo this Report.
Regarding the general fund (A
nnex Il),the m
ajor part of the income in 1987
consisted of annual contributions (21 799 359 out of a tota] income of 22 089 31 3). A
considerable amount (2257 553) w
as derived from interest on the investm
ent of the IOP
CF
unds assets.T
he administrative expenditure w
as 2282 854, about1 6%
less than the
budgetary appropriations.E
xpenditure on minor claim
s was 2276 5 1 1.
An excess of
income over expenditure of 21 528 419 w
as recorded for the financial period 1987, andthis am
ount was added to the accum
ulated surplus from previous years, bringing the surplus
to 23 1 39 227. This latter am
ount includes the working capital of 22 m
illion.
In respect of the TA
NIO
major claim
s fund (Annex Ill), an am
ount of 29 537 856w
as recovered as a result of an out-of-court settlement in a recourse action w
hich the IOP
CF
und had taken in France.
There w
ere no payments of com
pensation in1 987 from
theT
AN
IO m
ajor claims fund.
The ba]ance sheet of the IO
PC
Fund as at 31 D
ecember 1987 is show
n inA
nnex IV to this R
eport. As at that date, the IO
PC
Fund's contingent liabilities w
ith respectto pollution incidents w
ere estimated at $16 340 720.
The accounts of the IO
PC
Fund for the financial period
1 January to 3 1D
ecember
1988 will be subm
itted in the spring of 1989 to the External A
uditor for an audit opinion,
18
and will be presented to the A
ssembly for approval at its
i 2th session, in October 1 989.
These accounts w
ill then be reproduced in the Report on the A
ctivities of the IOP
C F
und forthe calendar year 1989.
Since the establishm
ent of the IOP
C F
und in1 978, the accounts have been audited
by the Com
ptroller and Auditor G
eneral of the United K
ingdom.
rn ©1
The IO
PC
Fund is financed by contributions paid by any person w
ho has receivedm
ore than1 50 000 tonnes of crude ¿
il or heavy fuel oil ("contributing oil') in a Mem
berS
tate after carriage by sea in the relevant calendar year. The levy of contributions is based
on reports on oil receipts in respect of individual contributors submitted by G
overnments of
Mem
ber States.
The contributions are paid by the individual contributors directly to the
IOP
C F
und. The G
overnments have no responsibility for these paym
ents, unless they havevoluntarily accepted such responsibility.
There are initial and annual contributions.
Initial contributions are payable when a
State becom
es a Mem
ber of the IOP
C F
und on the basis of a fixed amount per tonne of
contributing oil received the year preceding that in which the F
und Convention entered into
force for that State.
This am
ount was fixed by the A
ssembly at 0.04718 (gold) francs per
tonne 10.003145 SD
R, w
hich at 30 Decem
ber 1988 corresponded to0.002339).
Annual contributions are levied to m
eet the anticipated payments of com
pensation andindem
nification by the IOP
C F
und and the administrative expenses of the F
und during thecom
ing year.
At its 10th session, in O
ctober 1987, the Assem
bly decided to levy 1987 annualcontributions in the am
ount of p800 000 for the general fund and in the amount of
400 000 for the BR
AD
Y M
AR
IA m
a)or claims fund, to be paid by 1
February 1988. T
heam
ount payable by each contributor per tonne of contributing oil received was
0.0010154 in respect of the general fund, based on the quantities of oil received in1986, and p0.0005 193 in respect of the B
RA
DY
WA
RIA
major claim
s fund, based onthe quantities received in 1985 (the year before the incident).
Only a sm
all amount of
these contributions remains unpaid.
The A
ssembly decided at
its11th session,
in October 1988, to raise
2 900 000 for the 1988 annual contributions to the general fund and90 000 for the
1988 annual contributions to the JAN
major claim
s fund, to be paid by 1F
ebruary 1989.O
nly a small part of these contributions had been received by 31 D
ecember 1 988.
19
In respect of contributions levied for previous years, the situation must be considered
very satisfactory, since only very small am
ounts are in arrears.O
n 31 Decem
ber 1988,only an am
ount of 241 500 was outstanding, representing less than 0.1%
of thecontributions assessed for all previous years.
These figures show
that contributors fulfil their
obligations to pay contributions in a manner w
hich greatly facilitates the operation of theIO
PC
Fund. T
he Director has never had to resort to taking legal action against a defaulting
contributor.A
t its11th session, the A
ssembly again expressed its
satisfaction with the
positive response of contributors regarding the payment of contributions.
The paym
ents made by the IO
PC
Fund in respect of claim
s for compensation for oil
pollution damage vary considerably from
year to year. As a result, the level of contributions
to the Fund varies from
one year to anotheç as illustrated in the following table w
hich setsout the contributions levied during the period 1979-1988. A
s can be seen from the table,
the level of contributions has been low, except in respect of 1980 and 1983 w
henconsiderable am
ounts were levied for the first A
NT
ON
IO G
RA
MS
CI incident and for the
TA
NIO
incident, respectively.
If contributions levied in respect of a major claim
s fund are not totally used for thepaym
ents made by the IO
PC
Fund in respect of the particular incident for w
hich they were
levied, the balance is repaid to the contributors.T
hus, reimbursem
ent was m
ade in 1982
of 2750 000 remaining in the A
NT
ON
IO G
RA
MS
CI m
ajor claims fund (levied in
i 980(and in 1986 of 2700 000 rem
aining in the ON
DIN
A/F
UK
UT
OK
U M
AR
U N
°8 major
claims fund (levied in 1983(.
Sim
ilarly, an amount of 213.9 m
illion of the balance on theT
AN
IO m
ajor claims fund w
ill be reimbursed on
1F
ebruary 1 989 to the persons who paid
1983 contributions to that major claim
s fund.In this case, the high balance resulted from
the recovery of an important am
ount in recourse proceedings.
20
Year
General F
undM
ajor Claim
s Funds
Total Levy
22
2
1979750000
0750000
1980800000
920000010000000
1981500000
0500000
1982600000
260000860000
19831 000000
23 10600024 106000
19840
00
19851 500000
01 500000
19861 800000
01 800000
1987800000
4000001 200000
19882900000
900002990000
The quantities of contributing oil received in 1987 in M
ember S
tates are given nA
nnex V to this report.
The share of the annual contributions to the general fund paid by contributors in
each Mem
ber State has varied over the years. In particulac the shares paid by contributors
in States w
hich were M
embers w
hen the IOP
C F
und was established in
1 978 have beenreduced, os a result of m
ore States joining the F
und.T
his development is show
n by thefofow
ing charts.
un©
ribt©
2]
JAP
AN
140.51%l
FR
AN
CE
115.50%l
UN
ITE
DK
ING
DO
M 112.12%
l
ITA
LY Ilt.46%
l
FE
DE
RA
L RE
PU
BLIC
OF
GE
RM
AN
Y (7.51 %
(
BA
H,A
MS
13.91%I
I'll'S
WE
DE
N 12.71%
I
111IN
DO
NE
SIA
I2.00%I
OT
HE
RS
I4.28%I
22
7/
E111111
JAP
AN
27.61%)
ITA
LY (15.78%
)
FR
AN
CE
(J 0.95%)
NE
TH
ER
LAN
DS
(10.39%)
UN
ITE
D K
ING
DO
M 9.14%
)
SP
AIN
(6.47%)
US
SR
(3.16%)
FE
DE
RA
L RE
PU
BLIC
OF
GE
RM
AN
Y (2.56%
)
SW
ED
EN
(2.30%)
GR
EE
CE
(2.23%)
OT
HE
RS
(9.41%)
r
In accordance with the IO
PC
Fund's nternal R
egu)ations, the Director invests funds
which are not required for the short-term
operation of the IOP
C F
und.T
he investments are
made m
oin)y in Pounds S
terling. The assets are placed on term
deposit.
During 1988, investm
ents were m
ade with severa) )eading London banks.
Apart
from investm
ents p)aced overnight ti)) the next business day, the investments w
ere made at
interest rates varying from 8.75%
pa to1 3.03125%
pa, with an average of 9.5%
. Interestdue in 1988 on the investm
ents amounted to 21 452 000, on an average capita) of
216.4 md ion.
The yie)d on the investm
ents has over the years been mare than sufficient to cover
the OP
C F
und's administrative expenditure.
As at 31 D
ecember 1988, the IO
PC
Fund's portfo)io of investm
ents totafed217 077 158.
This am
ount was m
ade up of the assets of the IOP
C F
und and the Staff
Provident F
und. Of the IO
PC
Fund's assets, the T
AN
IO m
a)or daims fund alone accounted
for 213.8 mifion.
On 1
February 1989, an am
ount of 21 3.9 million of the T
AN
IO m
ajor claims fund
will be distributed to the contributors.
To the extent that the contributors prefer to have their
shares of the surplus credited to their respective accounts with the IO
PC
Fund, the credit
balances will be invested on behalf of the contributors, and the am
ounts invested will not be
considered as part of the IOP
C F
und's assets.
2 UT
©11V
'jii
E2C
o]nform
c©iis
Every year there are num
erous spills of oil from tankers around the w
orld. There are
no reliable statistics as to the total number of spills.
The IO
PC
Fund is m
ainly interested inspills involving the escape or discharge of substantial quantities, since such spills are m
orelikely to result in claim
s against the Fund.
It should be noted that approximately 85%
oF all spills occur during routine ship
operations, mainly in port, such as loading and discharging; these tw
o latter categoriesalone account for 72%
of allspills.
Most of the spills that occur during these routine
operations are relatively small; over 92%
cause spills of less than 50 barrels (7 tonnes). On
the other hand, whilst accidents such as collisions and groundings represent less than
1 0%
of all spill incidents, over 78% of these result in spills of over 50 barrels and 25%
in spills ofover 5 000 barrels (700 tonnes).
The graph on the follow
ing page shows the num
ber of major oil spills from
tankersduring the 15 year period ending 1988 (source hO
PE
).
The graph show
s that there has been a marked reduction in the num
ber of major oil
spills lie spills of more than 5 000 barrelsl during the period 1974-1988.
lt appears thatthe follow
ing factors have contributed to this improvem
ent.F
irstly, since the oil crisis in the
beginning of thei 980s less oil has been transported by tanker than previously.
Secondly,
oil tankers are today operating under less time pressure both on the high seas and in port.
Thirdly, the international conventions elaborated under the auspices of 1M
O (M
AR
PO
L,S
OfA
S and C
OLR
EG
721 have come into force and have contributed to safer shipping.
Finally, there is today a m
uch greater awareness of the im
portance of preventing oilpollution from
ships than in the 1970's.
Since its establishm
ent in October 1 978 the IO
PC
Fund has, up to 31 D
ecember
1988, been involved in the settlement of claim
s arising out of 37 incidents.20 of these
incidents occurred in Japan, whereas
1 3 incidents, leading in general to much larger
claims, took place in E
uropean waters, one in Indonesia, one in A
lgeria and two in the
Persian G
ulf.T
he total amount of com
pensation and indemnification paid by the IO
PC
Fund to date is 237 m
illion.
23
i ©5©
© D
L Z3k©
UT
1© Ï©
2:4030
Cf)
-J-Jo-Cf)
u-ouJcíz
10-
D
No
II
I
't.o
aO
(Nco
N.
NN
coW
coco
W
2:O
oo
C>
oo
2:
YE
AR
The 37 incidents in w
hich the IOP
C F
und has been involved have been distributedover the years as follow
s:
The case involving by far the largest claim
s against the IOR
C F
und was the T
AN
IOincident (F
RA
NC
E, 19801, in respect of w
hich the IOP
C F
und paid 218.3 million to
claimants.
Malor paym
ents were also m
ade in respect of the following incidents:
AN
TO
NIO
GR
AM
SC
I ISw
eden, 19791 29.3 million, O
ND
INA
(Federal R
epublic ofG
ermany,
1 9821 23.0 million, F
UK
UT
OK
U M
AR
U N
°8 Uapan, 19821 21 .
im
illion, JAN
lDen m
ark,1 9851 2800 000, and B
RA
DY
MA
RIA
(Federal R
epublic of Germ
any, 1986121.1 m
illion.
24
19794
19842
19805
19854
19813
19864
19824
19875
19833
19883
During 1988 three incidents occurred w
hich may give rise to claim
s forcom
pensation and indemnification against the IO
PC
Fund, nam
ely the AM
AZ
ZO
NE
incident, which occurred off the coast of B
rittany IFrance), and the T
AIY
O M
AR
U N
°13 andthe K
AS
UG
A tvM
,RU
N°1 incidents, w
hich took place in Japanese waters.
In addition, the
IOP
C F
und was in
1 988 informed of tw
o incidents which occurred in Japan during
1 987,
viz the SO
UT
HE
RN
EA
GLE
and the HIN
OD
E M
AR
U N
°1 incidents.
In addition to these five new incidents, there are, as at 3 1
Decem
ber 1988, sixincidents in respect of w
hich final settlements have not yet been reached, nam
ely: theK
OS
HU
N M
AR
U N
°1lin respect of w
hich only a recourse claim is outstandingl, the
PA
lMO
S, O
UE
D G
UE
TE
RIN
I, TH
UN
TA
NK
5 and AK
AR
I incidents, as well as the second
AN
TO
NIO
GR
AM
SC
I incident.
This R
eport gives details relating to incidents which the IO
PC
Fund has dealt w
ith in
1988.T
he conversion of foreign currencies into Pound S
terlingis as at 31 D
ecember
1 988, except for those claims in respect of w
hich payments have been m
ade; with regard
to the latter, convdrsion is made at the rate of exchange on the date of paym
ent.
Annex V
I contains a summ
ary of all incidents with w
hich the IOP
C F
und has dealtover the years, and in respect of w
hich the Fund has paid com
pensation or indemnification,
or in respect of which it
is possible that such payments w
ill be made by the F
und.It also
includes some other incidents in w
hich the IOP
C F
und was involved but in respect of w
hichthe F
und in the end was not called upon to m
ake any payments.
12.2 ncides Dealt w
fth b them
d duthig988
TA
N O
(France, 7 M
arch 1980)T
he legal action which the IO
PC
Fund, together w
ith the French G
overnment, had
taken in France against the ow
ner of the TA
NIO
and other third parties was settled out of
court in Decem
ber 1987.F
inal payments w
ere made to claim
ants during 1988.T
here
are no outstanding issues arising out of this incident.In view
of the importance of this case,
it is appropriate to recapitulate its malar aspects.
Tha H
ncideT
he Malagasy tanker T
AN
IO (1 8 048 G
RT
), carrying 26 000 tonnes of N°6 fuel
oil, broke amidship in heavy w
eather conditions off the coast of Brittany
Francel.
The
master and seven other crew
mem
bers were killed as a result of the incident.
About
1 3 500 tonnes of cargo oil spilled from the w
reck.M
ore than 200 kilometres of the
Brittany coast w
ere polluted by the spilt oil; the Channel Islands w
ere also affected.T
he
stern section, with about 7 500 tonnes of cargo aboard, rem
ained afloat and was tow
edto the port of Le H
avre. The bow
section, with about 5 000 tonnes of cargo oil on board,
25
sank fo a depth of 90 metres.
The oil contained in the sunken bow
section had to bepum
ped out in order to prevent further pollution from the w
reck.T
he pumping operation
lasted1 6 m
onths.
Boom
s were deployed at various locations along the coast.
How
eveç because ofthe nature of the coastline, the extrem
ely large tidal range 18 metres) and the severity of the
weather at the tim
e of the accident, many of the w
orst affected areas along the coast couldnot be boom
ed effectively.P
lastic sheeting was used to cover sea defences, prom
enadesand other m
an-made structures w
hich might have becom
e oiled during the forthcoming high
tides.T
he local authorities had the benefit of using national resources and relied heavilyupon the arm
y to provide the necessary manpow
er for the clean-up operations.A
dditionalpersonnel cam
e from the C
ivil Defence, the fire service, local governm
ent, comm
ercialcontractors and farm
ers.
The first phase of the clean-up required the rem
oval of the bulk oil.T
his was done
by using pumps, heavy earth m
oving equipment leg bulldozers) and m
ere shovels.T
he
removal w
as followed by the cleaning of the rocks in the tourist areas. T
he basic approachadopted w
as to wash the oil off the rocks using m
edium pressure hot-w
ater washing
machines or high pressure cold w
ater )ets.
Ckm
s Setfiement
Claim
s for compensation w
ere submitted by nearly
1 00 claimants, totalling F
Fr527
million )48 m
illion).T
he claim subm
itted by the French G
overnment accounted for m
orethan 90%
of that amount.
This claim
related to expenses for pumping the oil from
thesunken bow
section, costs of clean-up operations and compensation paid by the
Governm
ent to private persons.C
laims from
local authorities related to costs of clean-upw
ork, road repairs, beach restoration and the loss of earnings of municipal cam
ping sites.P
rivate persons submitted claim
s for loss of earnings.T
he shipowner's P
& I
insurer, the
United K
ingdom M
utual Steam
ship Assurance A
ssociation Berm
uda) Limited the U
K C
lub),claim
ed for expenses incurred in surveying the sunken fore section and in carrying out aprovisional sealing of holes in the w
reck.
After long and difficult negotiations, the D
irector reached agreement on the am
ountof each of the claim
s, except one.T
he total accepted by the IOP
C F
und amounted to
approximately F
Fr348 m
illion )32 million).
No agreem
ent was reached in respect of one claim
which had been presented in
1 980 by an association of French fisherm
en, in the amount of F
fr500 000 )45 000),w
ithout any explanation or documentation in support of the claim
.A
fter lengthy discussionsbetw
een the Director and the law
yer representing the claimant, the claim
was w
ithdrawn in
March 1988.
lt should be noted that the amounts claim
ed against the IOP
C F
und by many of the
claimants exceeded those at w
hich settlements w
ere made.
For exam
ple, the French
26
Governm
ent had assessed its total damage at F
Fr489 820 401, w
hereas in the settlement
between the IO
PC
Fund and the F
rench Governm
ent an amount of only F
Fr326 921 937
was accepted by the F
und.H
owever, the agreem
ents on the amounts betw
een the 1OP
CF
und and the various claimants w
ere reached For the purpose of distributing the m
oneyavailable under the F
und Convention, in the interest of a speedy settlem
ent, without
prejudice to each claimant's right to claim
beyond the amount accepted by the IO
PC
Fund
against the owner of the T
AN
IO and other third parties.
Pcym
ents to vktims
The lim
it of the shipowner's liability under the C
ivil Liability Convention w
asF
Fr1 1
833 718 121 .1m
illion).T
he UK
Club established the lim
itation fund under thatC
onvention in April
1 980 by paying this amount to the C
ourt inB
rest.T
he Court
appointed a liquidator of the limitation fund, w
ho invested the amount deposited by the
Club.
In Septem
ber 1 984, the liquidator of the limitation fund m
ade a First distribution of
the fund, amounting to F
Fr19 147 973 21.7 m
illion).A
n amount w
as reserved for thefinal distribution of the fund, since not all claim
s had been settled by the time of the first
payment. A
second distribution of FF
r98 937 was m
ade in March
J 987 to some of the
cia ima n ts.
The lim
itation fund was earning interest at m
arket rate until1
March 1988.
The
total amount of interest earned w
as FF
r1 0 979 1 89. After a sm
all amount had been paid
from the lim
itation fund in respect of fees and costs, the aggregate amount available for
payment to claim
ants was F
Fr22 605 357 122.1 m
illion).
The final distribution of the lim
itation fund took place in May 1988, w
hen anam
ount of FF
r3 358 446 (2300 000) was paid to claim
ants.
The exact am
ount to be paid by the IOP
C F
und could not be established until thefinal distribution of the lim
itation fund had taken place.P
art payments w
ere made by the
IOP
C F
und in the period 1983-1985, totalling FF
r221 201 452 1218.2 millionl.
Of this
amount, F
Fr2O
8 million w
as paid to the French G
overnment, F
Fr5.5 m
illion to localauthorities in F
rance, FF
r4.7 million to the U
K C
lub and FF
r2.8 million to private claim
antsin F
rance.
Pursuant to the F
und Convention, the aggregate am
ount of compensation payable
by the IOP
C F
und in respect of this incident was 675 m
illiongold) francs less the sum
actually paid under the Civil Liability C
onvention for pollution damage )F
Fr22 605 3571.
The F
und Convention does not specify the date on w
hich the conversion into nationalcurrency should be m
ade of the amount expressed in IgoldI francs.
lt was decided that the
method of conversion laid dow
n in the IOP
C F
und's Internal Regulations should be applied
lie that 15 IgoldI francs are equal toi
SD
R; cf section
1 3.1 dl below), and that the
relevant date was the day of the constitution of the lim
itation fund.A
pplying this method,
the amount of 675 m
illion Igoldi francs corresponded to FF
r244 746 000.
27
The total am
ount of compensation payable by the IO
PC
Fund in respect of this
incident was, therefore, F
Fr222 140 643.
In view of the
part payments w
hich had beenm
ade by the IOP
C F
und in the period 1983-1985, the remaining am
ount payable by theIO
PC
Fund to claim
ants was F
Fr939 191. T
his amount w
as paid in October 1988.
The claim
ants received payments from
the IOP
C F
und corresponding to 63.85% of
the amount of their respective claim
s as accepted by the Fund.
In addition, the payments
from the shipow
ners limitation fund represented 6.46%
of the established claims.
Consequently, the regim
e of compensation created by the C
ivil Liability Convention and the
Fund C
onvention gave each claimant com
pensation corresponding to approximately
70.3% of his agreed claim
.
Legd A©
n Anst the S
hp©w
ner cindther
Pcirties
In1 983, the IO
PC
Fund took legal action in the C
ourt of Brest against the follow
ingpersons for the purpose of recovering the am
ounts paid by the Fund to the claim
ants:
IalT
he registered owner of the T
AN
IO at the tim
e of the incident;
lb)T
he Italian shipyard which repaired the T
AN
IO in 1979;
Ic)T
he charterer of the TA
NIO
at the time of the incident;
Id)T
he company having sub-chartered the vessel and being responsible for the
managem
ent of the TA
N IO
at the time of the incident;
le)T
he company responsible for the control of the repairs carried out by the shipyard
and the technical managem
ent of the TA
NIO
at the time of the incident;
If)T
he classification society which m
onitored the repairs to the TA
NIO
in 1979; and
1g)T
he UK
Club, in its capacity as insurer of the civil liability of certain defendants.
The F
rench Governm
ent comm
enced proceedings against the same defendants for
the purpose of obtaining compensation for that part of its
total claim w
hich was not
compensated by the shipow
ners limitation fund and the IO
PC
Fund.
The IO
PC
Fund claim
ed in subrogation an amount of F
Fr221 201 452, being the
aggregate it had paid to all claimants up to 1985. T
he French G
overnment claim
ed anam
ount of FF
r2Ó1 737 874, being the am
ount at which the F
rench Governm
ent hadassessed its dam
age minus the am
ounts paid to it from the lim
itation fund and by the IOP
CF
und.T
he IOP
C F
und and the French G
overnment co-operated closely in their respective
legal actions and submitted oint pleadings.
28
In addition, 29 local authorities in France and som
e 50 private claimants took legal
action against the above-mentioned defendants.
Investigations into the cause of the incident were carried out by an E
xpertisejudiciaire ordered by the C
ourt.T
he Expertise concluded that the initial fracture w
hichbroke the T
AN
IO originated in the vicinity of fram
e 1 31 in wing tank nbó. A
s for the causeof the initial fracture, the E
xpertise maintained that there w
ere three causes that contributedto the disaster, viz insufficient reduction of speed to allow
for bad weather, defective cargo
loading at the time of the disaster and on previous voyages, and defects in the replacem
entcarried out by the shipyard of the bottom
structure in f06 wing tank of the T
AN
IO.
The grounds on w
hich the actions taken by the OP
C F
und and the French
Governm
ent against the various defendants were based can be briefly sum
marised as
follows. T
he registered owner of the T
AN
IO had failed to put the ship in a seaw
orthy andnavigable state. T
he failure of the owner to organise a proper m
echanism of control of the
quality of the extensive repairs carried out by the shipyard constituted a personal fault on thepart of the ow
ner, who w
as therefore not entitled to limit his liability under the C
ivil LiabilityC
onvention.T
he shipyard had not carried out the repairs to the TA
NIO
in a properm
anner.T
he company responsible for the technical m
anagement of the T
AN
IO had not
exercised due diligence in the supervision of the repair work at the shipyard and in
checking the results thereof.T
he charterer had failed to supervise the execution of therepair w
ork properly.In addition, the charterer bad an obligation to put the ship in a
seaworthy condition.
The classification society did not fulfil
its obligation to check thequality of the repair w
ork at the shipyard properly. The sub-chartereç being responsible for
the operations of the TA
NIO
, had an obligation to ensure that the crew w
as competent and
properly trained.T
he sub-charterer had failed to ensure that the master of the T
AN
IO w
asproperly instructed concerning cargo distribution.
The U
K C
lub was sued as insurer of the
charterer and the sub-charterer.
The defendants m
aintained that the actions against them w
ere ill-founded andshould, therefore, be relected.
The oral hearing w
as scheduled to take place in the Court of B
rest in October
1 987.lt w
as expected that the Court w
ould then decide the question of liability, whereas
the amount of the dam
ages, if any, would be dealt w
ith at a later stage.
After very com
plex and difficult negotiations, agreement on the m
ain elements of a
possible out-of-court settlement w
as reached at the beginning of October 1 987 betw
eenthe D
irector of the IOP
C F
und and the French G
overnment, on one side, and the
defendants, on the other side.T
he proposed out-of-court settlement w
as approved by theE
xecutive Com
mittee in O
ctober 1 987 and by the French authorities in N
ovember 1 987.
29
The settlem
ent was signed on 1 5 D
ecember 1987 in P
aris.U
nder the settlement,
the owner of the T
AN
IO and the U
K C
lub paid, on behalf of all defendants, a total amount
of US
350 million to the IO
PC
Fund and the F
rench State, less the shipow
ners limitation
amount under the C
ivil Liabilfty Convention, F
Fr1 1
833 718 (US
$1 931 0901, the totalam
ount payable being US
$48 068 910.T
his payment represented full and final
compensation from
all the defendants in respect of all claims by the IO
PC
Fund and the
French S
tate arising out of this incident, including interest and costs.T
he settlement w
as
without prejudice to the positions taken by the parties as to the question of liability.
On 15 D
ecember 1987, an am
ount of US
S17 480 029 (29 537 8561 w
aspaid to the IO
PC
Fund and an am
ount of US
S30 588 882 (approxim
ately 216.7 millionj
to the French G
overnment.
The apportionm
ent between the IO
PC
Fund and the F
renchG
overnment of the am
ount recovered was m
ade in accordance with an agreem
ent reachedbetw
een them in
1 984.
As already m
entioned, the total amount paid by the IO
PC
Fund to claim
ants was
FF
r222 140 643, corresponding to approximately 218.3 m
illion at the rate of exchangew
hen the respective payments w
ere made.
By this settlem
ent, the IOP
C F
und thusrecovered m
ore than half the amount paid by it in com
pensation.
This out-of-court settlem
ent did not cover the local authorities in France and the
private claimants w
ho had also instituted legal proceedings against the above-mentioned
defendants.H
owever, o separate out-of-court settlem
ent was reached
n March
1 988
between the local authorities and the private claim
ants, on one side, and all thedefendants, on the other.
keimbursem
eno C
oiTh1buors
In1983, the A
ssembly decided to levy annual contributions in the am
ount of$20 m
illion for the payment of com
pensation in respect of claims subm
itted in connectionw
ith the TA
NIO
incident.O
ut of this amount, a total of approxim
ately 218.3 million w
aspaid in com
pensation.In addition, the IO
PC
Fund incurred fees and other costs totalling
$482 000. The total paym
ents made by the IO
PC
Fund in respect of this incident w
ere218,8 m
illion.
The am
ount recovered as a result of the out-of-court settlement w
as credited ta theT
AN
IO m
ajor claims fund, in w
hich there was already a reserve of about $3 m
illion.T
he
assets of this major claim
s fund were invested and had yielded, over the years,
$2.5 million.
As a result there w
as a considerable balance on this fund, all payments ta
claimants having been m
ade and all expenses paid.lt w
as estimated that the balance
would am
ount to 21 3 942 21 3 on1
February 1989.
As already m
entioned, theA
ssembly decided that an am
ount of 213.9 million of this balance should be reim
bursed,ori
1F
ebruary 1 989, to the contributors who paid
1 983 contributions to the TA
NIO
malor
claims fund.
30
V[©
ilW B
1°i(Japan, 13A
ugust 1983)T
he Japanese tanker EIK
O M
AR
U N
°1 (999 GR
Il, loaded with 2 459 tonnes of
heavy fuel oil, collided with the P
anamanian cargo ship C
AV
ALR
Y 14 827 G
RIl in dense
fog off Karakuw
azaki, Miyagi, Japan.
About 357 tonnes of cargo oil spilled from
thefractured starboard tank.
Because of the storm
y weather due to an approaching typhoon,
the spilt oil moved tow
ards the coast and polluted areas with extensive fishery activities.
In 1984 the CR
C F
und paid compensation am
ounting to Y24 735 109
1276 7221, representing the amount of agreed claim
s minus the shipow
ners liability underthe C
ivil Liability Convention of Y
39 445 920.Indem
nification of the owner of the E
IKO
WR
U N
°1, in the amount of Y
9 861 480 1232 018), was paid in 1985.
The official investigation into the cause of the incident led to the conclusion that the
incident was caused by im
proper navigation on the part of both vessels.T
he IOP
C F
undstarted negotiations w
ith the owner of the C
AV
ALR
Y w
ith a view to recovering part of the
amount paid by the IO
PC
Fund. A
greement w
as reached between the C
AV
ALR
Y interests
and the EIK
O M
AR
U N
°1 interests, including the CR
C F
und, on an apportionment of
liability at 41:59 in favour of the CA
VA
LRY
interests. The am
ount recovered from the ow
nerof the C
AV
ALR
Y for pollution dam
age was Y
28 million, of w
hich the IOR
C F
und receivedY
14 843 7461264 8201 in February 1988.
KO
NL M
iLW°l
(Japan, 5 March 1985)
The Japanese tanker K
OS
HU
N M
AR
U N
°1 168 GR
TI, carrying 100 tonnes of
heavy fuel oil, collided with the coa carrier R
YO
ZA
N W
AR
U 12 569 G
RIl off H
aneda,T
okyo Bay, Japan. T
he KO
SH
UN
MA
RU
N°1 sank w
ith the exception of her bow section.
Approxim
ately 80 tonnes of oil leaked from the sunken tanker and spread rapidly across the
bay.
Claim
s for clean-up costs were agreed in the am
ount of Y28 020 909.
In
Septem
ber 1985, the ICP
C F
und paid Y26 1 24 589 1281 51 21, representing the total
agreed amount of the clean-up costs m
inus the owner's liability of Y
l 896 320.
According to the findings of the Y
okohama M
arine Court, part of the blam
e for thecoF
lision fell on the RY
OZ
AN
MA
RU
.T
he IOP
C F
und has started negotiations with the
owner of that vessel w
ith a view to recovering part of the am
ount paid in compensation by
the IOR
C F
und.
Indemnification of the shipow
ner amounting to Y
474 080 (23 0001 has not yetbeen paid.
31
AT
M*
(Italy, 2 1 March 1985)
The lm
cdentT
he Greek tanker P
AT
MO
S (51 627 O
RT
), carrying 83 689 tonnes of crude oil,collided w
ith the Spanish tanker C
AS
TILLO
DE
MO
NT
EA
RA
GO
N (92 289 O
RT
), which
was in ballast, off the coast of C
alabria in the Straits of M
essina, Italy.F
ire broke out on
the main deck of the P
AT
MO
S and spread to the accom
modation and w
heelhouse. Three
crew m
embers died, and
the crew had to abandon ship.
The ship w
as damaged in
the hull.D
ue to strong winds and currents, the P
AT
MO
S drifted onto a beach by a village
on the Sicilian coast.
The ship w
as refloated and tugs were used to control
itin the
Straits of M
essina.T
ugs were also used to com
bat the fire, which w
as extinguished within
two days of the collision. T
he PA
TM
OS
was then tow
ed to the port of Messina and m
ooredat the S
ME
B shipyard, w
here the oil was discharged.
Approxim
ately 700 tonnes of oil escaped from the P
AT
MO
S. M
ost of the spilt oildrifted on the surface of the sea and dispersed naturally.
Only a few
tonnes of oil came
ashore on the Sicilian coast.
The Italian authorities undertook extensive m
easures in order
to contain the spilt oil and to prevent it from polluting the S
icilian and Calabrian coasts.
Dispersants w
ere used in large quantities.
The ow
ner of the PA
TM
OS
and the owners insurer, the U
K C
lub, established alim
itation fund with the C
ourt of Messina.
The C
ourt fixed the limitation am
ount atLIti 3 263 703 650 25.6 m
illion),T
he IOP
C F
und was notified of the lim
itationproceedings in accordance w
ith Article 7.6 of the F
und Convention.
Claim
s and Negotiations w
ith Claim
antsC
laims w
ere lodged against the limitation fund, totalling L1t76
11 2 040 216(232 m
illion).
There w
ere 30 claims that clearly related to costs of clean-up operations or to
preventive measures as defined ¡n the C
ivil Liabilfty Convention, totalling approxim
atelyL1t14 000 m
illion (25.9 million).
In many cases, the am
ounts claimed w
ere unreasonable.
In February 1 986, all but tw
o claims in this category had, after very difficult negotiations,
been reduced by the plaintiffs to amounts w
hich were considered reasonable by the
Director.
In February
1 986, these claims w
ere settled at a total of Llt4 140 1 89 659(21.8 m
illion).
Tw
elve claims totalling about L1t40 000 m
illion (216.9 million) related to costs of
operations which,
in the Directors view
, would norm
ally be considered as salvageoperations and related m
easures. The D
irector took the position that these 1 2 claims did not
relate to operations which had the prevention of pollution as their prim
ary purpose.F
or this
reason, he rejected these claims. A
s a result of the discussions with the
claimants, Iw
o of
the claims w
ere withdraw
n.
32
PA
lMO
S Incident - T
he tanker aground on the Sicilian coast
First A
NT
ON
IO G
RA
MS
CI Incident -
Clean-up in the S
tockholm archipelago
33
A claim
of Ut20 000 m
illion28.4 m
illionl,later reduced to U
tS 000 m
illion
122.1m
illion), was subm
itted by the Italian Governm
ent for damage to the m
arineenvironm
ent.T
he Italian Governm
ent did not provide any documentation indicating the
kind of damage w
hich had allegedly been caused or the basis on which the am
ountclaim
ed had been calculated.T
he IOP
C F
und Assem
bly had in 1980 unanimously
adopted a Resolution stating that the assessm
ent of compensation to be paid by the IO
PC
Fund is not to be m
ade on the basis of an abstract quantification of damage calculated in
accordance with theoretical m
odelscf section
1 3.4(gl belowl.
In view of the position
taken by the Assem
bly, the Director relected this claim
.
At its
1 6th session, the Executive C
omm
ittee endorsed the position taken by theD
irector in respect of the claims relating to salvage operations and dam
age to the marine
environ ment.
vhe
By decision of 1 8 F
ebruary 1 986, the Court of first instance in M
essina included inthe list of adm
issible claims l'stato passivol the claim
s in respect of which settlem
ents hadbeen reached, in the am
ounts thus agreed. With regard to the tw
o claims relating to clean-
up operations in respect of which no agreem
ent had been reached onthe quantum
, the
Court adm
itted them in am
ounts very much low
er than those claimed.
The C
ourt rejected
the claims w
hich had been opposed by the IOR
C F
und and the UK
Club. T
he total amount
accepted by the Court w
as L1t4 267 31 2 659 121 .8 million I.
©f5©
i©O
InItaly, oppositions to the decision of a court on the adm
issibility of claims in
limitation proceedings m
ay be lodged with the sam
e court.In the P
AlM
OS
case,oppositions w
ere lodged by seven of the ten claimants w
hose claims had been rejected on
the grounds that the measures had not been taken for the purpose of preventing pollution.
The Italian G
overnment also lodged an opposition in respect of the claim
concerningdam
age to the environment.
The C
ourt rendered its judgement in respect of the oppositions on 30 july
1 986.
With regard to the claim
s relating to salvage operations, the Court m
ade a generalstatem
ent to the effect that salvage operations could not be considered as preventivem
easures, since the primary purpose of such operations w
as thatof rescuing ship and
cargo; this applied even if the operations had the further effect of preventingpollution. O
n
the basis of this position of principle, the Court rejected som
e of these claims and accepted
some in reduced am
outs. The C
ourt rejected the claim by the
Italian Governm
ent relating
to damage to the m
arine environment.
The aggregate am
ount of the claims as accepted by the C
ourt of first instance was
LItS 797 263 479 22.5 m
illionl.
34
¿ppe
cedhsA
ppeals against the udgement of 30 july 1986 w
ere lodged with the C
ourt ofA
ppeal in Messina by six claim
ants, including the Italian Governm
ent, whose claim
s hadbeen w
holly or partly rejected in opposition.T
hese claims totalled approxim
atelyL1t29 000 m
illion (21 2.3 million(.
The U
K C
lub and the CR
C F
und lodged appealsagainst the judgem
ent in respect of two claim
s, one by the SM
EB
shipyard and one which
had been accepted with only a sm
all reduction in amount.
Apart from
two out-of-court settlem
ents, there was very little progress in the appeal
proceedings during 1988. The m
ain hearing in the Court of A
ppeal is expected to takeplace in early 1989, and the judgem
ent would then be rendered in the spring of 1989.
OfC
©ue S
olniioret
athsg IpsoeiD P
rooedngsE
sso (the owner of the cargo on board the P
AT
MO
S), w
hose claim had been totally
rejectedby the C
ourt offirst
instance,claim
edin
appeala
totalof
Llt22 628 039 202 (29.6 million(. C
ne item of this claim
, amounting to LIti 3 280 m
illion(25.6 m
illion(, related to a salvage reward due by E
sso to the salvors in subrogation of thelatter.
In January 1988, an out-of-court settlement w
as reached in respect of Esso's claim
between E
sso, on one side, and the owner of the P
AlM
OS
and the UK
Club, on the other
side.U
nder the settlement, E
sso's claim w
as accepted by the shipowner and the U
K C
lubfor a total am
ount of L1t4 939 742 171 (22.1 million(, inclusive of interest, devaluation and
costs.U
nder the settlement, no paym
ent was m
ade in respect of the salvage reward.
In
the record of the court hearing at which the settlem
ent was approved, it w
as stated thatE
sso waived its claim
in respect of remuneration for salvage.
The D
irector was kept inform
ed of the negotiations that led to the settlement.
After
having considered in particular the fact that the item relating to salvage w
as not accepted,the D
irector came to the conclusion that the settlem
ent was reasonable.
The D
irectortherefore approved the settlem
ent on behalf of the IOP
C F
und.In F
ebruary 1988, theC
ourt of Appeal in M
essina admitted in the list of accepted claim
s Esso's claim
for theam
ount agreed.
The settlem
ent in respect of Esso's claim
also covered SM
EB
's claim, w
hich hadpreviously been settled betw
een Esso and S
ME
B at L1t4 050 m
illion (21.7 million); the
amount originally claim
ed by SM
EB
was LIt6 347 595 386 (22.7 m
illion).
In Novem
ber 1988, a further out-of-court settlement w
as reached in respect of aclaim
submitted by the ow
ner of a Libyan vessel who had claim
ed compensation for loss
resulting from that vessel having to be m
oved from S
ME
B's shipyard to a shipyard in
Palerm
o in order to leave room for the P
AT
MO
S at S
ME
B's jefty.
The total am
ount claimed
was LIt227 964 163 (296 5001. T
he Court of first instance upheld this claim
in principle,but w
ith a small reduction in am
ount to L1t200 million (285 000). T
his claim w
as settled atLIti 65 m
illion (270 000). The settlem
ent was approved by the C
ourt of Appeal.
35
Oustanthn C
k&m
s in Appe&
rceedhsA
s mentioned above, the Italian G
overnment had appealed against the decision of
the Court of first instance relecting the G
overnments claim
in respect of damage to the
marine environm
ent.T
he Italian Governm
ent had maintained that the dam
age was a
violation of the right of sovereignty over the territorial sea of the State of Italy.
The C
ourt offirst instance stated that this right w
as not one of ownership and could not be violated by
acts comm
itted by private sublects.In addition, the C
ourt declared that the State had not
suffered any loss of profit nor incurred any costs as a result of the alleged damage to the
territorial waters, or the fauna or flora.
The S
tate had, therefore, not suffered any economic
loss.T
he Court also drew
attention to the above-mentioned R
esolution adopted by theIO
PC
Fund A
ssembly. F
or these reasons the Court rejected this claim
.
In the appeal proceedings the Italian Governm
ent has taken the position that thisclaim
relates to actual damage to the m
arine environment and to actual econom
ic losssuffered by the tourist industry and fisherm
en.F
or this reason, the Italian Governm
ent hasm
aintained that the claim is not in contravention of the interpretation of the definition of
'pollution damage" adopted by the A
ssembly in that R
esolution.
At its 20th session, the E
xecutive Com
mittee reiterated the IO
PC
Fund's position that
a claimant w
as entitledto compensation under the C
ivil Liability Convention and the F
undC
onvention only if he had suffered quantifiable economic loss.
In view of the position of
the Italian Governm
ent that this claim relates to actual dam
age to the marine environm
ent,
the Com
mittee referred to the interpretation of the definition of "pollution dam
age' laid down
in the Resolution. C
oncerning the economic loss w
hich had allegedly been suffered by thetourist industry and fisherm
en, the Com
mittee expressed the opinion that com
pensation inrespect of such dam
age could only be claimed by the individual person having suffered the
damage w
ho, in addition, had to prove the amount of the econom
ic loss sustained.
In addition to the Italian Governm
ent's claim, there are three claim
s subject toappeal proceedings, totalling approxim
ately L1t690 million (f290 000).
Present
uoneyardh'ìg
the Cm
The aggregate am
ount of the claims accepted by the C
ourts is L1t9 61 8 3 1 8 650(4. 1
million).
The rejected claim
s maintained in the appeal proceedings total
L1t5 688 288 884 )2.4 million). T
he total amount of the claim
s against the limitation fund
is thus L1t15 306 607 534 (ó.4 million).
As already m
entioned, the limitation am
ount isLIti 3 263 703 650.
DU
ring1 986, the U
K C
lub made paym
ents for the claims in respect of w
hich thedecision of the C
ourt had become final.
Further paym
ents were m
ade by the UK
Club
during 1988, following the out-of-court settlem
ents in respect of the claims subm
itted by Esso
and the Libyan shipownec respectively. T
he total amount paid to claim
ants by the UK
Club
stands at L1t9 436 31 8 650 (4.0 million).
36
Legal proceedings concerning Iiabilfty and compensation for dam
age arising out ofthe collision betw
een the PA
lMO
S and the C
AS
TILLO
DE
MO
NT
EA
RA
GO
N w
ere initiatedin the C
ourt of Genoa. A
fter a settlement had been reached betw
een the two shipow
nersand related interests, the legal actions w
ere withdraw
n.
The question as to w
hether the IOP
C F
und should institute recourse proceedingsagainst the ow
ner of the CA
ST
ILLO D
E M
ON
TE
AR
AG
ON
will be exam
ined when it
is
established whether the IO
PC
Fund w
ill be called upon to pay any compensation under the
Fund C
onvention.
JAN
(Denm
ark, 2 August 1985)
The tanker JA
N (1 400 G
RIl, registered in the F
ederal Republic of G
ermany,
collided with a fixed navigational light at the entrance to the port of A
alborg on the easterncoast of Jutland in D
enmark.
The JA
N w
as carrying 3 000 tonnes of heavy fueloil.
Approxim
ately 300 tonnes of oil escaped into the sea as a result of the collision.
More than
1 00 tonnes of oil came ashore on the south coast of the island of Laese,
which is situated betw
een Jutland and Sw
eden, and polluted approximately ten kilom
etresof the coast.
The polluted area consisted partly of sandy beaches and partly of salt
marshes of great im
portance to large populations of migrating birds. A
small quantfty of oil
also polluted the coast ofJufland and the island of Hirsholm
ene.
Operations to clean the polluted areas w
ere carried out by the Danish authorities.
The m
alar part of the clean-up operations was com
pleted within a few
weeks of the
incident, whereas in som
e sensitive areas these operations continued until October 1985.
The M
aritime and C
omm
ercial Court of C
openhagen established the limit of the
owner's liability at 157 936 S
DR
(DK
r1 576 170, corresponding to 2127 0001.U
nder
Danish law
, an extra amount should be added to cover interest and costs, and the C
ourtfixed the lim
itation fund at DK
r2 million 12161 0001. T
he limitation fund w
as established bythe shipow
ner's P &
I insurer (the Skuld C
lub) by means of a letter of guarantee.
The D
anish Governm
ent presented a claim in respect of the clean-up operations
totalling DK
r1 1 805 021 (2950 000) in July 1986.
In April
1 987, agreement w
as reached between the D
anish Governm
ent, on theone side, and the IO
EC
Fund and the S
kuld Club, on the other side, regarding a num
ber ofitem
s of this claim. T
hese items totalled D
Kr3 307 044 12265 000). A
t the request of theD
anish Governm
ent, the IOP
C F
und and the Skuld C
lub agreed to make paym
ents inrespect of the accepted item
s.
37
The m
ain outstanding items of the G
overnment's claim
related to the tariffs appliedin respect of oil com
bating vessels owned by public authorities w
hich took part in theoperations at sea and to the rates for personnel of G
overnment agencies used for clean-up
operations. These item
s partly related to 'fixed costs', ie costs which w
ould have arisen forthe D
anish authorities even if the incident had not occurred, as opposed to "additionalcosts', ie expenses incurred solely as a result of the incident and w
hich would not have
arisen had the incident and the operations relating thereto not taken place.T
he Director
based his approach on the position taken by the Assem
bly in respect of such costs, as set
out in section1 3.4ldl below
.In particular, the D
irector insisted that only those expensesw
hich corresponded closely to the clean-up period in question and which did not include
remote overhead charges should be com
pensated.
Final negotiations in respect of the outstanding item
s were held in S
eptember 1988.
The am
ounts originally claimed had been calculated on the basis of guidelines issued by
the Danish M
inistry of Finance.
The D
irector was, nevertheless, unable to accept the
amounts claim
ed in respect of a number of item
s.In view
of the arguments put forw
ard bythe D
irector during the negotiations, the Danish G
overnment agreed to reduce its claim
inrespect of a num
ber of items to am
ounts which the D
irector considered reasonable.
The D
anish Governm
ent's claims w
as settled at a total of DK
r1 1020 462
12890 0001, inclusive of DK
r1 014 088 1282 0001 in interest.T
he IOP
C F
und made the
final payment to the D
anish Governm
ent in Septem
ber 1988.
Claim
s submitted by five private persons w
ere accepted infull by the IO
PC
Fund
and the Skuld C
lub.P
ayments totalling D
Kr53 007 (24 3001 w
ere made by the S
kuldC
lub in April 1986 and S
eptember 1987. A
claim presented by the M
unicipality ofLaesø
, amounting to D
Kr24 1 26 121 9501, w
as also approved, and this sum w
as paid bythe S
kuld Club in S
eptember 1987.
Indemnification of the shipow
ner, amounting to D
Kr394 043 (232 478), w
as paidto the S
kuld Club in O
ctober 1988.
The paym
ents made by the IO
PC
Fund in respect of this incident including feesl
total 2838 000.
(Federal R
epublic of Germ
any, 3 January / 986)T
he Panam
anian tanker BR
AD
Y M
AR
IA (996 G
RIl w
as proceeding up the River
Elbe, south of the entrance to the K
iel Canal, w
ith a cargo of 2 000 tonnes of heavy fueloil.
The dry cargo ship W
AY
LINK
13 453 GR
TI, registered in G
ibraltar, which w
asproceeding dow
n the river, suddenly turned to port across the river and hit the port forward
bow of the B
RA
DY
MA
RIA
.A
pproximately 200 tonnes of cargo oil escaped from
theB
RA
DY
MA
RIA
into the river as a result of the collision.T
he spilt oil contaminated a large
area on both banks of the River E
lbe and the River O
ste, as well as near-by islands,
necessitating extensive clean-up operations.
38
A claim
for compensation for clean-up costs totalling D
M3 637 430 (21 .1
million)
was subm
itted on behalf of the Federal G
overnment, the Länder of S
chleswig-H
olstein andN
iedersachsen and some local authorities.
This claim
was settled at a total am
ount ofD
M3 544 054, including interest. D
M3 219 425 121 105 926) w
as paid by the IOP
CF
und to the Germ
an authorities in 1986 and 1987. The lim
itation fund established for theB
RA
DY
MR
IA, am
ounting to DM
324 629 together with interest of D
M1 882), w
as alsopaid to the authorities.
Tw
o private claimants had subm
itted claims relating to the cleaning of polluted
vessels, totalling DM
1 419. In 1987, these claims w
ere settled at DM
1 086 )2340).
The official investigation into the cause of the incident show
ed that the pilot of theW
AY
LINK
was m
ainly to blame for the collision, since he gave a w
rong order to thehelm
sman of the W
AY
LINK
, causing the vessel to cross the course of the on-coming B
RA
DY
WR
IA.A
limitation fund for the W
AY
LINK
was established at the D
istrict Court of H
amburg.
The lim
itation amount w
as fixed at DM
440 1 85 12140 000).
The IO
PC
Fund took legal action in the C
ourt in Ham
burg against the owner of the
WA
YLIN
K, challenging his right to lim
it his liability.A
fter careful examination of the m
atter,
and in consultation with the C
RC
Fund's G
erman law
yeç the Director decided in January
1 988 to withdraw
this action, since it was considered unlikely that the IO
PC
Fund w
ouldbe able to deprive the ow
ner of the WA
YLE
NK
of the right of limitation by proving fault or
privity on his part.
The IO
RC
Fund claim
ed in subrogation against the WA
YLIN
K lim
itation fund theaggregate am
ount paid by it to the Germ
an authorities and the other claimants, ie
DM
3 220 511 (21 006 000) plus interest and costs.T
he other claims against this
limitation fund related to dam
age caused to the hull of the BR
AD
Y M
AR
IA (D
M1 .6 m
illion)and loss suffered by the ow
ner of the cargo of that vessel DM
329 000).
The liquidator of the W
AY
LINK
limitation fund rendered his decision concerning the
claims in A
ugust 1988.H
e approved the IOP
C F
und's claim at a total am
ount ofD
M3 244 422 21 .0 m
illion).T
he other claims w
ere accepted for a total amount of
DM
1 185 559 2370 000).T
he position taken by the liquidator was endorsed by the
Court.
In Novem
ber 1988, the IOR
C F
und recovered an amount of D
M333 027
12105 355).
After the recovery from
the WA
YLIN
K lim
itation fund, the cost to the IOR
C F
und ofthis incident including fees) total 21
1 08 272.
39
TA
NIO
Incident - Polluted rocks on the coast of B
rittany
TA
NJO
Incident - Clean-up operations in B
rittany
40
©U
Tik1I
(Algeria, 18 D
ecember 1986)
The A
lgerian tanker OU
ED
GU
ET
ER
INI (1 576 G
RIl w
as ur)oading bitumen in the
port of Algiers, w
hen part of the cargo was spilled onto the deck of the vessel.
From
there,som
e bitumen escaped info the w
ater in the port area.
There w
as no pollution damage in the port itself.
How
ever, a considerable quantityof bitum
en lapproximately
1 5 tonnesl entered the sea-water intake of a pow
er station,necessitating a shut-dow
n of the station for a short period of time. S
ome equipm
ent at thepow
er station was polluted and had ta be cleaned.
The ow
ner of the power station (S
ON
ELG
AZ
) brought legal action in the Court of
Algiers against the U
K C
lub (the shipowner's P
& I
insurer) and the IOP
C F
und. The C
ourtfixed the lim
itation amount of the shipow
ners liability at1
1 75 064 Algerian D
inars12100 000).
The lim
itation fund was constituted by the U
K C
lub by means of a bank
guarantee.
SO
NE
LGA
Z has subm
itted a claim totalling 5 278 525 A
lgerian Dinars
(2460 000) relating ta damage to equipm
ent in the power station, costs of cleaning som
eequipm
ent and loss of profit as a result of the closure of the station. A claim
has also beensubm
itted by the owner of the O
UE
D G
UE
TE
RIN
I in the amount of 5 650 A
lgerian Dinars
(2490) in respect of costs for clean-up operations.
In the court proceedings, the UK
Club has m
aintained that the shipowneí should be
exonerated from liability in respect of this incident, in accordance w
ith Article 111.2(b) of the
Civil Liability C
onvention. The C
lub has argued that the damage w
as wholly caused by
anact or om
ission done with intent to cause dam
age by a third party, ie the operator of the oilterm
inal where the unloading took place, since the operator bad continued ta discharge oil
in spite of the grave risk caused by the location of this terminal near the w
ater intake of thepow
er station, evidenced by similar incidents in the past. T
he IOP
C F
und has rejected thisdefence on the ground that the circum
stances in this case could not be consideredas being
covered by Article 111.2(b). T
he Court proceedings are still in
a preliminary stage.
The IO
PC
Fund and the U
K C
lub are assessing the claims w
ith the assistance ofexternal experts.
Negotiations w
ith the claimants are expected ta take place in early
1989.TH
UzK
5(S
weden, 2 1 D
ecember /986)
The S
wedish vessel T
HU
NT
AN
K 5 (2 866 G
RI), carrying 5 024 tonnes of heavy
fuel oil, ran aground in very bad weather outside G
ävle, on the east coast of Sw
eden, 200kilom
etres north of Stockholm
.T
he tanker was severely dam
aged, and there was a
considerable risk that the ship would break up.
How
ever, after about half the cargo hadbeen transferred to another vessel, the T
HU
NT
AN
K 5 w
as refloated. Mast of the rem
aining
41
cargo was then transferred to the other vessel, and the T
HU
NT
AN
K 5 w
astow
ed to a safe
port.It w
as estimated that
1 50-200 tonnes of oil escaped as a result of the incident.
Due to the difficult w
eather conditions with ice and snow
, clean-up operations were
postponed until the beginning of April
1 987.B
y then the oil had affected various areasalong a 1 50 kilom
etre stretch of coast around Gävle, including a num
ber of small islands.
The polluted areas w
ere very difficult to clean, since they consisted mainly of stones and
rough rocks, which had to be scraped m
anually.T
he oil which rem
ained was then
removed by hot w
ater washing or high pressure steam
washing. T
he clean-up operationson the coast w
ere mainly com
pleted in late Septem
ber 1 987.
A sm
all quantfty of oil - estimated at 20-40 tonnes - w
as found on the sea bed at adepth of betw
een 8 and 1 6 metres, close to w
here the vessel had grounded. Since it w
asfeared that the sunken oil m
ight resurface and pollute the coast, attempts w
ere made by the
Sw
edish Coast G
uard in April and M
ay 1 987 to collect this oil,firstly by divers w
orking
manually and, later, by hydraulic pum
ping.In view
of the very high costs and the small
quantities of oil collected, the Sw
edish authorities called off these operations a few days
later.In A
ugust 1987, parts of the sunken oil resurfaced.T
he Coast G
uard had by then
developed new equipm
ent for recovery of this oil, and the operations were resum
ed. These
operations, which w
ere more successful than the earlier attem
pts, were com
pleted at the
end of August 1987.
The official investigation into the cause of the incident show
ed that the groundingw
as due to an error by the master of the T
HU
NT
AN
K 5 in the navigation
of the ship.
The S
wedish G
overnment took legal action against the ow
ner of the TH
UN
TA
NK
5
in the City C
ourt of Stockholm
.T
he aggregate amount of the dam
age was provisionally
indicated at SK
r27 million 122.4 m
illionl.T
he IOP
C F
und was notified of the action in
accordance with A
rticle 7.6 of the Fund C
onvention.
The C
ourt established the limit of the shipow
ner's liability at SK
r2 741 74612250 000).
Under S
wedish law
, an extra amount should be added to cover interest and
costs, and the Court fixed that additional am
ount at SK
r700 000 1265 0001.T
he
limitation fund w
as constituted by the shipowner's insurer Ithe S
kuld ClubI by m
eans of aletter of guarantee.
The S
wedish G
overnment subm
itted its claim in July 1988, ot an aggregate am
ount
of SK
r24 992 884 122.3 millionl.
This claim
covers the operations of the Sw
edish Coast
Guard and the on-shore operations undertaken by the m
unicipalities concerned. The IO
PC
Fund and the S
kuld Club are exam
ining the claim, w
ith the assistance of a local surveyor.T
he Fund has requested further inform
ation on o number of item
s.lt
is expected thatnegotiations w
ith the Sw
edish Governm
ent will be held in early spring of 1 989.
42
Claim
s totalling SK
iS 1 469 l4 650) w
ere submitted by seven fisherm
en and two
other private claimants.
They relate to com
pensation for destroyed equipment, costs of
cleaning polluted equipment and loss of earnings due to polluted catches.
All these claim
s
were accepted by the IO
PC
Fund and the S
kuld Club, after som
e reductions, at anaggregate am
ount of SK
r49 361 194 450).T
he claims w
ere paid by the Skuld C
lub,seven of them
in Decem
ber 1987, one in February 1988 and one in A
ugust 1 988.
AT
©©
R 8uI99
(Second Unddent)
(Finland, 6 F
ebruary 1987)W
hile on a voyage from V
entspils inLatvia IU
SS
R), the U
SS
R tanker A
NT
ON
IOG
RA
MS
CI 127 706 G
RIl, loaded w
ith 38 445 tonnes of crude oil, grounded near Borgá
on the south coast of Finland.
lt is estimated that 600-700 tonnes of the cargo escaped as
a result of this incident.
Oil com
bating vessels were sent to the area on 9 F
ebruary1 987.
Under the
prevailing icy weather conditions,
it was extrem
ely difficult to recover the spilt oil.O
perations for this purpose were carried out by the F
innish Authorities during F
ebruary andM
arch, but they had to be suspended several times, due to w
eather conditions. At the end
of May, on-shore clean-up operations w
ere carried out on the Finnish coast, east of the
grounding site.
In May, a U
SS
R oil com
bating vessel was deployed in S
oviet territorial andinternational w
aters, off the coast of Estonia, in an attem
pt to recover films of oil from
thew
ater surface.T
his operation was abandoned after a few
days, due to a deterioration inthe w
eather conditions and an assessment that the oil film
s were too thin for the effective use
of this equipment.
lt was reported that som
e 40 tonnes of oil were recovered during this
period.
According to the results of the official F
innish investigation into the cause of theincident, the grounding w
as due to a misunderstanding betw
een the master of the
AN
TO
NIO
GR
AM
SC
I and the pilot.
A lim
itation fund amounting to R
bIs2 431 854 (92.2 million) w
as established with
the Court in R
iga (US
SR
) on behalf of the owner of the A
NT
ON
IO G
RA
MS
CI, for the
purpose of limiting his liability under the C
ivil Liability Convention.
Since the U
SS
R w
as not a Contracting P
arty ta the Fund C
onvention on the date ofthe incident, pollution dam
age in the US
SR
, including measures taken to prevent or m
inimise
pollution damage in the U
SS
R, is not covered by the F
und Convention. H
owever, claim
s inrespect of pollution dam
age in the US
SR
will be com
pensated under the Civil Liability
Convention and w
ill compete w
ith claims in respect of pollution dam
age in Finland for the
amount available in the lim
itation fund set up under that Convention.
For this reason, the
amount of com
pensation paid under the Civil Liability C
onvention fou pollution damage in
the US
SR
may be of im
portance in establishing the extent of the IOP
C F
unds obligation topay com
pensation for pollution damage in F
inland.
43
In April 1988, a claim
totalling Rbls2 31 2 864 122. 1
million) w
as submitted to the
owner of the A
NT
ON
IO G
RA
MS
CI by the U
SS
R authorities, w
hilst a claim am
ounting toF
M22 124 415 122.9 m
illion) was m
ade by the Finnish authorities against the IO
PC
Fund
as well as against the ow
ner of the AN
TO
NIO
GR
Nv\S
CI.
ltis possible that the F
innish
authorities will subm
it further claims. C
laims from
fishermen in F
inland are expected.
A prelim
inary examination of the claim
s presented so far has been made by the
IOP
C F
und in co-operation with the shipow
ner's insurer (the UK
Club). T
he IOP
C F
und and
the Club have requested m
ore information from
the Finnish and U
SS
R authorities, but this
information has not yet been received.
The claim
submitted by the U
SS
R authorities includes an am
ount of Rbls7l 2 200
2650 000) relating to environmental dam
age.T
his amount has been arrived at by the
application of a certain formula,
n accordance with S
oviet legislation, under which the
assessment of the dam
age is linked to the quantfty of the oil collected in the US
SR
territorialw
aters. This part of the claim
was discussed by the E
xecutive Com
mittee in O
ctober 1988.R
eferring to the Resolution on this subject adopted by the A
ssembly in 1980 (cf section
i 3.4)g) below), the E
xecutive Com
mittee expressed its objection to this claim
.In the view
of the Com
mittee, claim
s of this kind were not adm
issible under the Civil Liability
Convention, because the claim
ant had not suffered any quantifiable economic loss.
The
Executive C
omm
ittee considered thatt w
as likely that, since the adoption of that Resolution,
some M
ember S
tates had refrained from subm
itting claims relating to
damage to the m
arine
environment, in view
of the interpretation of the notion of "pollution damage" adopted by
the Assem
bly.T
he Executive C
omm
ittee instructed the Director to negotiate w
ith the US
SR
authorities on the basis of this Resolution.
It should be noted that a similar claim
was m
ade
by the US
SR
authorities in a US
SR
Court in connection w
ith the first AN
TO
NIO
GR
AM
SC
Iincident w
hich took place in February 1979 cf section
1 3.5 below).
OU
ThP
N lzíG
LLlapan,
1 SJune 1987)
The P
anamanian tanker S
OU
TH
ER
N E
AG
LE (4 461 G
RT
), carrying 3 000 tonnesof lubricating oil, collided w
ith the Liberian vessel GO
OD
FA
ITH
(91 87 G
RT
) off Sada
Misaki on the w
estern coast of Shikoku, Japan. A
s a result of the collision, the SO
UT
HE
RN
EA
GLE
sustained damage in one of the fuel tanks arid spilled approxim
ately 1 5 tonnes of
bunker oil into the sea.
Claim
s have been submitted for clean-up costs in the am
ount of37 1 89 390
12165 400) and for fishery damage in the am
ount of 94 800 000 12420 000).
The lim
itation amount of the S
OU
TH
ER
N E
AG
LE is
93 874 528 (2415 0001.
The IO
PC
Fund w
as notified of this incident by the shipowner's insurer in N
ovember
1988.T
he IOP
C F
und has not yet been able to examine the claim
s, since the claimdocum
ents have not been submitted to the F
und.
44
LL 1=
(Indonesia, 22 July 1987)
The Libyan tanker E
L HA
NI (81 412 C
R11, bound for the R
epubfc of Korea, ran
aground outside Singapore in Indonesian territorial w
aters. The grounding caused fractures
in the hull. Approxim
ately 3 000 tonnes of crude oil escaped as a result of the incident. Aarge part of the spilt oil spread into S
ingapore territorial waters, and the S
ingaporeauthorities undertook extensive clean-up operations.
Considerable quantities of oil drifted
out to sea. Som
e oil may have stayed w
ithin Indonesian territorial waters. T
here was also
a risk that some pollution dam
age would be caused in M
alaysia.A
fter the fractures in thehull of the E
L HA
NI had been provisionally repaired, the vessel resum
ed her voyage to theR
epublic of Korea, w
here further leakage of oil occurred.
Since S
ingapore, Malaysia and the R
epublic of Korea are not P
arties to the Fund
Convention, pollution dam
age in these countries, including measures taken to prevent or
minim
ise pollution damage there, is not com
pensated under that Convention.
In August 1987, the Indonesian authorities inform
ed the IOP
C F
und that the incidenthad caused pollution dam
age in Indonesia and that they would claim
compensation from
the IOP
C F
und. No inform
ation was given as to the nature and extent of the dam
age. The
Indonesian authorities requested urgent advance payment from
the IOP
C F
und ofU
S $242 800 (2135 000) to enable them
to carry out an assessment of the dam
age. The
Director inform
ed the authorities that the IOP
C F
und would pay com
pensation only if theaggregate am
ount of the damage in the S
tates involved in the incident were to exceed the
limitation am
ount of the shipowners' liability.
Since the extent of the pollution dam
agecaused in Indonesia could not be established at that stage, the D
irector informed the
Indonesian authorities that the IOP
C F
und could not make any paym
ent in response to theirrequest.C
laims have been m
ade against the shipowner in respect of pollution dam
age inIndonesia, S
ingapore and the Republic of K
orea. The lim
itation amount of the shipow
ner'sliability under the C
ivil Liability Convention is estim
ated at approximately 27.9 m
illion.In
view of this high figure, the IO
PC
Fund w
ill not be called upon to pay any compensation as
a result of this incident.
AK
AR
I(U
nited Arab E
mirates, 25 A
ugust 1987)W
hile outside Dubai (U
nited Arab E
mirates), the P
anamanian coastal tanker A
KA
RI
(1 345 CR
1) had a switchboard fire resulting in a loss of electrical pow
er and of the use ofthe m
ain engines.T
he ship took in water and w
as towed tow
ards the port of Jebel Ali,
where she w
as refused entry. The A
KA
RI w
as then towed along the coast. S
ince the vesselw
as listing badly, she was beached to the east of the port of Jebel A
li with tug assistance.
Approxim
ately 1 000 tonnes of her cargo of heavy fuel oil escaped before the AK
AR
I was
refloated. The rem
aining cargo was then transferred to another vessel, and the A
KA
RI w
astow
ed back to the port of jebel Ali.
45
It was estim
ated that 25-30 kilometres of the coast w
ere polluted as a result of the
incident.C
lean-up operations at sea were undertaken by the D
ubal Petroleum
Com
pany
and the Coast G
uard.B
ooms w
ere deployed to protect the water intakes of a pow
er
station and on aluminium
plant.B
oth plants provide desalinated water for D
ubai, andsom
e contamination w
hich required clean-up inside the plants was
reported.H
owever, no
contamination of desalinated w
ater occurred and the plants remained operational.
On-
shore clean-up was undertaken by the local authorities and continued over a period of
some five w
eeks.C
ertain anti-pollution measures w
ere undertaken by the company w
hich
salvaged the AK
AR
I.
Claim
s for clean-up costs, totalling approximately U
S 5394 000 2215 000), have
been submitted to the shipow
ner's P &
Iinsurer by several private claim
ants and local
authorities.lt
is expected that further claims w
ill be presented. No claim
s have yet been
submitted to the com
petent court.
No lim
itation fund has been established, so far.T
he limitation am
ount of theshipow
ner's liability under the Civil Liability C
onvention is estimated at approxim
ately2115000.
The IO
PC
Fund has held several m
eetings with representatives of the P
& I C
lub and
the shipowner to discuss the legal problem
s involved. These discussions have not resulted in
any agreement on the issues raised by the incident.
5JLJ fko
(Japan,1 8 D
ecember 1987)
The japanese coastal tanker H
INO
DE
MA
RU
N°1
19 GR
T), carrying a cargo of
heavy fuel oilspilled approxim
ately 25 tonnes of cargo oil into the sea in the port ofY
awataham
a on the western coast of S
hikoku [Japan). The cause of the incident appears to
be a mishandling of a cargo hose by the crew
.
Clean-up operations w
ere carried out in the port by private contractors. As a result
of this incident several fishing vessels were polluted and had to be cleaned.
Claim
s for
these operations totalling Y3 301 225 1214 000) w
ere submitted to the shipow
ner andpaid in full by him
.lt is unlikely that further claim
s will be subm
itted.
The lim
itation amount of the H
INO
DE
MA
RU
N°1
is estimated at approxim
ately
480 000 22 1001.
The IO
PC
Fund w
as notified of this incident in Novem
ber 1988. The IO
PC
Fund
has not yet been able to examine the claim
s, since the claim docum
ents have not beensubm
itted to the Fund.
46
(Fronce, 3 1 January 1988)
During the night of 30 to 31 January 1988, the Italian tanker A
MA
ZZ
ON
E118 325 O
RT
) was dam
aged in a severe storm off the w
est coast of Brittany (F
rance). The
vessel was on a voyage from
Ubya to A
ntwerp )B
elgiuml, carrying about 30 000 tonnes of
heavy fuel oil.S
everal covers were lost from
the butterworth holes (access points for tank
washingl of tw
o cargo tanks and, as a result, approximately 2 000 tonnes of the cargo
escaped, displaced by sea-water entering the open holes. O
ver the following three to four
weeks, oil cam
e ashore in patches along 450-500 kilometres of coastline, affecting four
Departm
ents in France (F
inistère, Côtes-du-N
ord, Manche and C
alvados) and the Channel
Islands (Jersey and Guernsey).
lt was not possible to com
bat the oil at sea due to severe weather conditions and
the nature of the oil, which w
as not amenable to dispersants.
After the w
eather hadm
oderated, the Navy attem
pted to recover oil off the coast of Finistère, but these attem
ptsw
ere later abandoned as they proved to be ineffective.
In order to cope with the w
idespread pollution onshore, the French national oil spill
contingency plan, "PLA
N P
OLA
AA
R', w
as activated in Finistère, in C
ôtes-du-Nord and on the
Cherbourg P
eninsula.In the C
alvados area of Norm
andy, the level of pollution was not
considered sufficiently severe to merit activating P
LAN
PaLM
AR
, and the clean-up was
handled on a local basis.T
he clean-up operations were carried out by personnel draw
nfrom
the local fire brigades, the Arm
y, the Civil D
efence and the Ministry of P
ublic Works
supported by the local authorities.
N
Oloo
200300
kilometres47
Guernsey
Côtes- . u -N
o rd
AM
AZ
ZO
NE
ncident - Beach clean-up operations
AM
AZ
ZO
NE
ncident - Collection of oily debris
48
In Finistère boom
s were deployed to protect the m
ouths of the three main rivers.
For
the most part, the shore w
as cleaned manually. 'In som
e areas specialised equipment w
asused to clean oiled cobbles. M
ost of the clean-up was com
pleted by the end of February,
but the cobble cleaning continued into March. In
Côtes-du-N
ord, the malar river estuaries
were boom
ed. The north and east coasts w
ere affected by the oil, the length of patchilyoiled coast totalling about
1 20 kilometres.
The coast w
as cleaned over a period ofapproxim
ately two w
eeks.A
s for the Cherbourg P
eninsula,it
is estimated that 200-300
tonnes of balls of oiled weed cam
e ashore along approximately 60 kilom
etres of coast.C
lean-up operations started on1 2 F
ebruary and continued until the beginning of March
1988. More than 3 000m
3 of oil mixed w
ith sand, stones and weed w
ere collected,using a com
bination of manual and m
echanical techniques. On the C
alvados coast ofN
ormandy, the oil w
as scattered along about 45 kilometres of the coast.
Clean-up
operations were finalised by 5 M
arch 1988.
Throughout the affected area, m
ariculture, comm
ercial fisheries, important
recreational beaches and holiday resorts are widespread.
Despite this and the length of
coast affected,it
is the opinion of the IOP
C F
und's experts that the impact on these
comm
ercial resources and the marine environm
ent in general was m
inimal.
As for the island of G
uernsey, five to ten kilometres of coast w
ere contaminated.
About 500m
3 of oily debris were collected.
In Jersey approximately
1 5 kilometres of coast
were contam
inated with w
eed mixed w
ith oil.A
total of some 65m
3 of oily waste w
ascollected.A
t a very early stage,it w
as considered likely that the IOP
C F
und would be
involved in. the settlement of the claim
s arising out of this incident.F
or this reason, theD
irector and the Legal Officer visited B
rittany on 8 and 9 February 1 988, at the invitation
of the French M
inister of the Sea.
Discussions w
ere held on this occasion between the
IOP
C F
und and the French authorities w
ith respect to the organisation of the clean-upoperations, the problem
s arising in connection with com
bating the oil, and the procedurefor presenting claim
s.
The C
omm
ercial Court of A
ntwerp (B
elgiuml appointed a legal expert w
ith the taskof establishing the cause of the incident. A
n investigating udge l"iuge d'instruction") in Paris
appointed two technical experts, for the sam
e purpose.
The lim
itation amount w
as provisionally fixed by the Court in
Brest at
FF
r13 612 749 )1 242 000). The lim
itation fund was constituted on 12 F
ebruary 1988in the C
ourt by the shipowner's insurer
the Standard C
lub) by payment of the above-
mentioned am
ount into the Court.
After the instrum
ents on the tonnage measurem
ent hadbeen exam
ined,it w
as established that the limitation am
ount should be increased toF
Fr1 3 860 396 (21 265 000), but the C
ourt has not yet taken any decision in this regard.
49
A claim
has been submitted by the D
epartment of C
ôtes-du-Nord for an am
ount ofF
Fr978 853 (290 000).
No claim
s have so far been received from the F
renchG
overnment or the other local authorities in F
rance involved in this incident.
Claim
s for clean-up costs were subm
itted by the authoritiesin Jersey and in
Guernsey in the am
ounts of 21] 380 and 210 013, respectively.T
hese claims w
ere
accepted by the IOP
C F
und and the Standard C
lub in the amounts claim
ed.
Claim
s submitted by tw
o French fisherm
en, totalling FF
r59 393 (25 400), were
accepted by the IOP
C F
und and the Standard C
lub. The claim
s were paid by the C
lub inthe autum
n of 1988. Further claim
s have been submitted by tw
o French fisherm
en, totallingF
Fr49 598 (24 500), and by a private organisation for the cost of cleaning oiled sea-birds
in the amount of F
Fr5O
327 (24 600). These claim
s are being examined by the IO
PC
Fund and the S
tandard Club.
TA
]Y©
LflJ fo3(Japan,
I 2 March 1988)
While heavy fuel oil w
as being transferred from one cargo tank of the Japanese
tanker TA
IYO
WR
U N
°13 186 GR
Il to another in the Port of Y
okohama, part of the cargo
escaped into the sea, due to a mistake by the crew
in handling the valves.lt
is estimated
that about six tonnes of heavy fuel oil escaped as a result of this incident.C
lean-up
operations were im
mediately undertaken by the shipow
ner who deployed several oil
combating vessels supplied by contractors. T
he clean-up operations were com
pleted within
four days of the incident.
Claim
s for clean-up costs, totalling10 21 2 210 (245 000), w
ere submitted to the
shipowner and the IO
PC
Fund by three private claim
ants.In A
ugust 1988, the Director
agreed to settle these claims at Y
8 611 685 (238 000).lt
is unlikely that any further
claims w
ill be submitted.
The lim
itation proceedings have not yet started.T
he shipowner's lim
itation amount
under the Civil Liability C
onvention is estimated at
2 476 800 (211 000).T
he
indemnification of the shipow
ner will am
ount to approximately 619 200 (22 750).
KA
UG
A M
AR
L) N°
(Japan, 10 Decem
ber 1988)W
hile carrying approximately 1
1 00 tonnes of heavy fuel oil along the west coast
of Japan, the Japanese coastal tanker KA
SU
GA
MA
RU
N°1 (480 G
RT
) capsized and sankin storm
y weather off K
yoga Misaki of the K
yoto Prefecture.
The sunken tankeç lying at a depth of approxim
ately 250 metres, has since been
leaking continually.S
everal vessels and helicopters were deployed by the Japanese
Maritim
e Safety A
gency and private contractors for surveillance and clean-up operations atsea. T
he operations were frequently suspended due fo the difficult w
eather conditions.T
he
oil, which had spread north-eastw
ards, appears to have come ashore in som
e places.
50
The shipow
ner has been investigating possible methods of stopping the leakage of
oil from the sunken vessel.
How
eveç it was difficult to carry out any operations for this
purpose under the weather conditions prevailing in D
ecember.
Extensive fishing activities are carried out by local fisherm
en in the area around thesite of the incident. T
herefore, there is a considerable risk of serious damage to fisheries.
The lim
itation amount of the K
AS
UG
A W
RU
N°1
is estimated at approxim
ately1 2.8 m
illion (56 600). The total costs of the clean-up operations w
ill greatly exceed thelim
itation amount.
Tr W
51
©3©
E
©o©
©©
L[oDsy C
o]Co
' 510
f©ts
(a)N
C5\S
L © 1F
HI
V3L510 LU
Lí0dLTY
© 1IN
Fi l©
lFO
IL[U
nder the Fund C
onvention, the aggregate amount of com
pensation payable by theIO
PC
Fund in respect of any one incident w
as originally limited to 450 m
illion (gold) francslequivalent to 30 m
illion SD
R(.
How
ever, in the Convention the A
ssembly w
as given theauthority to increase the m
aximum
amount of the IO
PC
Fund's liability, provided that this
maxim
um should not exceed 900 m
illion francs 160 million S
DR
). Any decision to increase
the maxim
um am
ount required a three-fourths majority of the M
ember S
tates present at them
eeting at the time of the vote.
n April 1979, the A
ssembly considered a proposal to increase tH
e maxim
umam
ount of the IOP
C F
und's liability to 900 million francs.
This proposal did not receive the
required ma(ority and w
as thus rejected.Instead, how
ever, the Assem
bly decided toincrease the m
aximum
amount to 675 m
illion francs (45 million S
DR
(.
In October 1 986, the A
ssembly unanim
ously decided to increase the aggregateam
ount of compensation payable by the IO
PC
Fund to 787 500 000 (gold) francs
(corresponding to 52.5 million S
DR
) for incidents which occurred after 30 N
ovember
1986, and further to 900 million (gold) francs corresponding to 60 m
illion SD
R) for
incidents occurring after 30 Novem
ber 1 987.T
he maxim
um am
ount of compensation
payable by the IOP
C F
und in respect of any one incident is consequently 60 million S
DR
,w
hich corresponds to approximately
45 million (on the basis of the value of the S
DR
on30 D
ecember 1988), including any am
ount actually paid by the shipowner or his insurer
under the Civil Liability C
bnvention.
52
()f8LC
/IVI\8L1T
©fitJIU
0'11SLV
,LTLH
I0 t1T
tOI
3 ©1N
L PLU
JL1[0 C©
T©
fT
he IOP
C F
und indemnifies the shipow
nec under certain conditions, for part of hisliability under the C
ivil Liability Convention. H
oweveç according to A
rticle 5.3 of the Fund
Convention, the IO
PC
Fund m
ay be exonerated, wholly or partially, from
its obligation topay indem
nification to the shipowner br his insurer) if the IO
PC
Fund proves that, as a result
of the actual Fault or privily of the ow
ner, the ship in question did not comply w
ith therequirem
ents laid down in the four instrum
ents listed in that Article and that the incident or
the damage w
as caused wholly or partially by such non-com
pliance. The purpose of this
provision is to encourage shipowners, by m
eans of indirect financial inducement, to m
aketheir ships conform
to the requirements of these four instrum
ents, thereby reducing the risk of
oil pollution incidents.
Under the F
und Convention, the above-m
entioned instruments m
ay be replaced bynew
instruments if so decided by the A
ssembly. T
he Assem
bly has applied this replacement
procedure a number of tim
es, and the present list enumerates the follow
ing instruments:
(i)the International C
onvention for the Prevention of P
ollution from S
hips,1 973, as
modified by the P
rotocol of 1978 relating thereto (MA
RP
OL 73/781, and as
amended by R
esolution ME
PC
. 14120) adopted by the Marine E
nvironment
Protection C
omm
ittee of the International Maritim
e Organization on 7 S
eptember
1984;
1H)
the International Convention for the S
afety of Life at Sea,
1 974, as modified by the
Protocol of
1 978 relating thereto ISO
LAS
74/781 and as amended by R
esolutionsM
SC
. i (XLV
I and MS
C.6)48) adopted by the M
aritime S
afety Com
mittee of the
International Maritim
e Organization on 20 N
ovember 1981 and 1/June 1983,
respectively;
(Hi)
the International Convention on Load Lines,
1 966; and
(iv)the C
onvention on the International Regulations for P
reventing Collisions at S
ea,1972 (C
OLR
EG
72).
(c)IN
TE
RP
RE
TA
TIO
N O
F T
HE
NO
TIO
N O
F 'P
OLLU
TIO
N D
AM
AG
E"
The A
ssembly acid the E
xecutive Com
mittee have taken decisions relating to the
interpretation of the definition of "pollution damage" laid dow
n in the Civil
Liability
Convention.
In1980, the A
ssembly adopted an im
portant resolution dealing with the
admissibility of claim
s for non-economic environm
ental damage.
The E
xecutive Com
mittee has over the years taken a num
ber of important decisions
on the admissibility of claim
s for compensation. T
hese decisions have related, inter alio, to
cloims F
or environmental dam
age, salaries for personnel permanently em
ployed by publicauthorities, tariffs for ships ow
ned by public bodies which have been used for cleanup
operations, loss of earnings suffered by fishermen and hoteliers, and the relationship
between salvage and preventive m
easures.
The decisions relating to the notion of 'pollution dam
age" are dealt with in detail in
section 13.4 below.
CO
"ER
SIO
N 0F
(GO
LD) F
AC
S IN
TO
NA
TO
NA
L CU
NC
ES
The am
ounts inthe C
ivil Liability Convention, as w
ell as those in the Fund
Convention, are expressed in (gold) F
rancs )Poincaré francs).
In1 976, P
rotocols were
adopted to amend the C
onventions. Under the P
rotocols, the (gold) franc was replaced as
the monetary unit by the S
pecial Draw
ing Right (S
DR
) of the International Monetary F
und.O
ne SD
R w
as then considered equal to1 5 (gold) francs.
The value in S
DR
is convertedinto national currency by referring to its m
arket exchange value.
The 1976 P
rotocol to the Civil Liability C
onvention entered into Force in
1 98 1but
has been ratified by only a limited num
ber of States.
The 1976 P
rotocol to the Fund
Convention has not yet com
e into force.
In 1979, the Assem
bly adopted an interpretation of the provisions in the Fund
Convention dealing w
ith (gold) francs under which the am
ount determined in francs shall be
converted into SD
Rs on the basis that 1 5 francs are equal to one S
DR
. The num
ber of SD
Rs
thus Found shall be converted into national currency in accordance w
ith the method of
evaluation applied by the International Monetary F
und.
In1 980, the A
ssembly discussed the problem
s caused by the lack of uniformity in
Mem
ber States regarding the m
ethods of converting the (gold) franc into nationalcurrencies. T
he Assem
bly adopted a Resolution in w
hich it urged Governm
ents of Mem
berS
tates to ensure that their national laws w
ere brought into line with the m
ethod of conversionadopted by the A
ssembly in
1 979.
TT
T©
f OIP
U=
{ll L]©1f©
f1 OP
"8CP
t!IL0" f1Ï1C
IL©
OIP
mm
P1U
J©C
ontributions to the IOP
C F
und are levied on any person who has received crude or
heavy fuel oil ("contributing oil") in a Contracting S
tate after carriage by sea.In 1980, the
Assem
bly examined the circum
stances under which contributing oil should be considered as
having been "received", in accordance with the relevant article of the F
und Convention, and
it approved an interpretation of the notion of "received".
0TO
OP
PE
LUIP
3f8L1T O
LT
he Civil Liability C
onvention and the Fund C
onvention only apply to spills ofpersistent oil.
How
ever, the Conventions do not contain any definition of "persistent oil".
In
1 98 1, the IOP
C fund elaborated "A
Non-technical G
uide to the Nature and D
efinition of
53
Persistent O
il.It w
as decided by the Assem
bly that this non-technical guide should serve as
a guideline for the Director w
hen dealing with claim
s against the IOP
CF
und.
()S
HIP
OW
L°'S R
IGH
T T
OL
llITA
TIO
fk ©F
LIAB
ILITY
Under the C
ivil Liability Convention, the shipow
ner is not entitled to limit his liability
if the incident occurred as a result of the personal fault ('the actual fault or privity') of theow
ner.
In one case involving the IOP
C F
und, the SH
INK
AI M
AR
U N
°3 case (Japan,1983), the incident had occurred entirely as a result of the negligence of the m
aster.S
ince
the master w
as also the owner of the vessel, the question arose as to w
hether theow
ner/master w
as entitled to limit his liability under the C
ivil Liability Convention. T
heE
xecutive Com
mittee decided that the ow
ner/master w
as entitled to limit his liability since
the negligent act was com
mitted in his capacity as a m
aster.
(h)L
=U
\flT ©
VW
© flJ'k!ll
In order to be entitled to limit his liability, the shipow
ner must establish a lim
itationfund by depositing the lim
itation amount w
ith a court or by furnishing the court with o
guarantee for that amount.
In the SH
INK
AI M
AR
U N
°3 case mentioned above, w
here the limitation am
ount ofthe shipow
ner's liability was very low
l'1 .9 million or
l8 000), the shipowner's P
& I
insurer requested that the requirement to establish the lim
itation fund should be waived.
The
Executive C
omm
ittee agreed that,in view
of the disproportionately high legal costs thatw
ould be incurred in establishing the limitation fund com
pared with the lim
itation amount
under the Civil Liability C
onvention, the IOP
C F
und could in this case, as an exception, pay
compensation w
ithout the limitation fund being established.
The E
xecutive Com
mittee
emphasised, how
ever, that the IOP
C F
und normally required the establishm
ent of alim
itation fund and that this requirement could be w
aived only in exceptional cases like the
SH
INK
AI W
\AR
U N
°3 case.li w
ould, in any case, be for the Executive C
omm
ittee todecide if the exceptional circum
stances of a case allowed the IO
PC
Fund to pay
compensation w
ithout the prior establishment of the lim
itation fund.
()O
CE
DU
OR
iL9W
fT1 C
LAfl
T=
FU
ND
The E
xecutive Com
mittee has developed procedures for dealing w
ith claims against
the IOP
C F
und. These procedures are described in section
1 3.3 below.
In1 982, the E
xecutive Com
mittee adopted a C
laims M
anual in which basic
information w
as given on how to present a claim
against the Fund.
(j)©
CzT
fl© ©
II1T '©
Th
fl©LC
J
In1 986, the A
ssembly discussed the difficulties resulting from
the IOP
C F
und's not
being informed im
mediately of new
incidents in which
it may becom
e involved.T
he
54
Assem
bly expressed the opinion that it would be in the interests of all parties concerned that
the IOP
C F
und should be informed prom
ptly of all such incidents.F
or this reason, the
Assem
bly drew the attention of G
overnments of M
ember S
tates and other parties concerned(such as the authorities responsible for clean-up operations, shipow
ners and P &
I Clubsl to
the importance of the IO
PC
Fund's being inform
ed as soon as possible of any new incident
in respect of which it w
ould have to pay compensation or indem
nification, or in respect ofw
hich there was a real possibihty that the IO
PC
Fund m
ight have to make such paym
ents.
(fc)ft.t?f8f©
ff ©F
Tf=
1Lc11't!II. LtzfD
U3Y
©ft©
1ft11=
118 R111=
1LD
In1 979, the A
ssembly adopted a R
esolution in which it requested 1M
O to consider
the desirability of revising the Civil Liability C
onvention and the Fund C
onvention, examining
inparticular the adequacy of the lim
its laid down by the tw
o Conventions.
In the
Resolution, reference w
as made to the problem
caused by the very low lim
its applicable tosm
all tankers.
Extensive preparatory w
ork for a revision of the Conventions w
as carried out within
1MO
during the period 198 1-1983.
The IO
PC
Fund, through its D
irectoç participated actively in the preparatory work
which led up to the adoption of the P
rotocols, as well as in the discussions at the
1 984
Diplom
atic Conference.
In particular, the deliberations of the Diplom
atic Conference
concerning the notion of "pollution damage" w
ere based on the experience of the IOP
CF
und in the settlement of claim
s.
The D
iplomatic C
onference adopted a Resolution in w
hich, inter alio,it requested
the Assem
bly of the IOP
C F
und to authorise and instruct the Director to perform
duties under
the Fund C
onvention as revised by the1 984 P
rotocol, in addition to his duties under the1971 F
und Convention, and to m
ake certain preparations for the entry into force of theP
rotocol.In 1985, the Director inform
ed the Assem
bly that be did not consider it necessaryfor the A
ssembly to take any decision at that tim
e in respect of the parts of the Resolution
dealing with the preparations for the entry into force of the P
rotocol to the Fund C
onvention,since the entry into force w
as not expected to take place in the near future.T
he Assem
bly
agreed that the Director should provide inform
ation to States w
hich so desire on the systemthat w
ould be established by the Civil Liability C
onvention and the Fund C
onvention asam
ended by the 1 984 Protocols.
Furtherm
ore, it was agreed that the D
irector should assist
States, on request, in their procedures for ratification of the P
rotocols, provided that suchactivities w
ould not hamper the IO
PC
Fund's S
ecretariat in carrying out its duties under the
1971 Fund C
onvention.
55
1C
o©
©M
OD
©co1rs3
It¡s im
portant that the IOR
C F
und follows closely any operations in connection w
ithoil spills w
hich may lead to claim
s against the Fund, and the F
und has developed certainprocedures for this purpose.
The C
RC
Fund is norm
ally informed prom
ptly of any oil pollution incident in a Fund
Mem
ber State w
hich will or m
ay lead to the Fund's being called upon to pay
compensation.
If, on the basis of the information available, the D
irector considers that theF
und may becom
e involved in the settlement of claim
s, he will follow
the developments as
closely as possible and make contacts at an early stage w
ith the competent authorities in
the State concerned.
The D
irector normally appoints a surveyor w
ho is given the task ofm
onitoring the response operations and of advising him at a later stage as to the
reasonableness of the claims for com
pensation submitted to the F
und.
In dealing with oil pollution incidents, the IO
FC
Fund co-operates closely w
ith theshipow
ner's liability insureç which in practically all cases is a P
& I
Club cf section 4
above).E
xperts are normally em
ployed jointly by the R &
I Club and the IO
PC
Fund to
survey incidents and the clean-up operations. In most cases, the staff of hO
PE
are used forsurveying purposes.
The surveyors appointed by the IO
PC
Fund endeavour to attend the site of a spill as
early as possible. They w
ill monitor the clean-up operations and report to the D
irector andto the P
& I C
lub concerned on the manner in w
hich the operations are carried out. They
will also advise authorities dealing w
ith the spill response on the best methods of preventive
measures or clean-up operations, to the extent that such advice is requested or w
elcomed.
The surveyors w
ill discuss with the com
petent authorities the procedures that have to beobserved in order to facilitate the presentation of claim
s against the P &
I Club and the
IOP
C F
und.F
inally, the surveyors will be able to advise the authorities w
hether certainm
easures taken or to be taken may later be regarded by the IO
PC
Fund as not being
reasonable.T
his provides an opportunity to discuss the merits of certain m
easures beforethey are actually taken.
Such discussions m
ay make it possible to avoid later disputes on
the question of the recovery of expenses incurred as a result of these measures.
iC
o1EIS
Over the years, the IO
PC
Fund has developed procedures for dealing w
ith claims
for compensation and indem
nification.
In order to obtain compensation, a claim
ant must show
that his claim is justified and
meets the criteria laid dow
n in the Civil Liability C
onvention and the Fund C
onvention. To
this end, the claimant is required to prove his claim
by producing supporting
56
documentation, such as explanatory notes, invoices and receipts.
The C
laims M
anualissued by the IO
PC
Fund gives guidance in respect of the presentation of claim
s.B
earingin m
ind that the IOP
C F
und's functionis
to provide compensation to victim
s of pollutiondam
age as quickly as possible, the Director is alw
ays ready to discuss with individual
claimants w
hich is the best way to present their claim
s.
As soon as the claim
documents have been subm
itted, the claims are exam
ined bythe IO
PC
Fund, n close co-operation w
ith the P &
I Club involved.
For the exam
ination ofthe docum
ents and assessment of the dam
age sustained, the IOP
C F
und normally em
ploysthe services of surveyors and other experts.
In respect of legal issues, the Fund seeks the
advice of lawyers in the country w
here the damage w
as caused; in most cases law
yers areem
ployed jointly by the IOP
C F
und and the P &
I Club.
The D
irector is authorised to settle the claims and pay com
pensationif
the
aggregate amount to be paid by the IO
PC
Fund in respect of the claim
s arising out of agiven incident does not exceed 1.67 m
illion SD
R 21 .25 m
illion or US
52.25 million),
In
addition, the Director has authority to settle claim
s for indemnification of the shipow
ner up tothe sam
e amount. F
or incidents leading to larger claims, the D
irector needs the approval ofthe E
xecutive Com
mittee for any settlem
ent.
If agreement has been reached betw
een the IOP
C F
und and a claimant as to the
majority of the item
s of a claim, but further investigation
is considered necessary with
respect to the remaining item
s, the Director m
ay make paym
ent as regards the agreeditem
s.T
he Director is also authorised, in certain circum
stances and within certain lim
its, tom
ake provisional payments of com
pensation before a claim is settled, if this is necessary to
mitigate undue financial hardship to the victim
.
These factors - the use of experienced surveyors and law
yers, the co-operation with
the P &
IC
lubs and the Director's authority to m
ake relatively high payments w
ithout theprior approval of the E
xecutive Com
mittee - enable the IO
PC
Fund to settle claim
s and paycom
pensation in a relatively short period of time.
How
ever, the time needed for the
settlement of claim
s is almost entirely dependent on the quality of the docum
entationsubm
itted.In cases w
here the claims are w
ell documented, it
is often possible to reach asettlem
ent within a few
months of the presentation of the docum
entation.If, how
ever, thedocum
entation isinsufficient,
it takes a considerable time before a settlem
ent can bereached, since protracted correspondence betw
een the IOP
C F
und and the claimants w
illbe necessary.
Except in respect of one incident,
it has so far always been possible to reach
agreement betw
een the IOP
C F
und and the claimants on the am
ount of their claims, thereby
avoiding protracted and costly court proceedings. Som
etimes such agreem
ents have beenreached only after lengthy and difficult negotiations, but the claim
ants have generallyunderstood that the IO
PC
Fund accepts reasonable claim
s and is not merely trying to
reduce the amounts claim
ed.
57
[My o fD
]U
(es)T
© ©
P©
LWT
©W
AG
'A
claim can be accepted by the IO
PC
Fund only to the extent that the claim
meets
the criteria laid down in the C
ivil Liability Convention and the F
und Convention.
In the
Conventions, 'pollution dam
age' is defined as loss or damage caused outside the ship
carrying oil by contamination resulting from
the escape or discharge of oil from the ship.
The notion of 'pollution dam
age" includes the costs of preventive measures and further loss
or damage caused by preventive m
easures."P
reventive measures" are defined as any
reasonable measures taken after an incident has occurred to prevent or m
inimise pollution
damage.T
he definition of "pollution damage" in the C
onventions ¡s not very clear.H
oweveç
the IOP
C F
und has developed certain principles as to the admissibility of claim
s.T
he
Assem
bly and the Executive C
omm
ittee have taken a number of im
portant decisions in thisregard. T
hese principles have also been developed by the Director in his negotiations w
ith
claimants.
The settlem
ents made by the D
irector and the principles upon which these
settlements have been based have either been explicitly approved by the E
xecutiveC
omm
ittee, or have been reported to and endorsed by the Com
mittee.
The A
ssembly has expressed the opinion that a uniform
interpretation of thedefinition of "pollution dam
age" is essential for the functioning of the regime of
compensation established by the C
onventions.lt
is believed that such a uniforminterpretation by F
und Mem
ber States is prom
oted if the positions taken by the Fund in this
respect are made w
idely known. F
or this reason it has been considered appropriate to setout in this A
nnual Report in general term
s the policy of the IOP
C F
und as regards theadm
issibility of claims, as developed over ten years.
In view of the com
plexity of this issue,
it has not been possible to include a detailed analysis of the position taken by the Fund on
various kinds of claims. T
he presentation is thus limited to questions of principle.
lt must be
emphasised that, taking into account these principles, each irdividual claim
has to beassessed on the basis of all the elem
ents of the particular case.
(fe)C
OST
S FOR
CL
EA
N-U
P OPE
RA
TO
NS A
ND
PRE
VN
TV
ME
AU
RT
he IOP
C F
und compensates costs incurred for clean-up operations at sea and on
the beach. As for operations at sea, the costs m
ay relate to the deployment of vessels, the
salaries of crew, the use of boom
s and the spraying of dispersants.In respect of on-shore
clean-up, the operations may result in m
alar casts for personnel, equipment, absorbents etc.
The notion of pollution dam
age includes casts of "preventive measures", ie m
easurestaken to prevent or m
inimise pollution dam
age. Such m
easures may result in expenses for
the sealing of fractures in a grounded vessel ta prevent ail from escaping. M
easures may
have ta be taken to prevent oil which has escaped fram
a ship from reaching the coast, eg
by placing booms along the coast w
hich is threatened.D
ispersants may be used at sea to
combat the oil.
Costs for such operations are in principle considered as costs of preventive
58
measures.
lt must be em
phasised, however, that the definition oniy covers costs of
"reasonable" measures.
Claim
s relating to the costs of material and equipm
ent used in connection with
clean-up operations and preventive measures are accepted by the IO
PC
Fund as adm
issible
under the Conventions.
In respect of material purchased specifically for the incident in
question, deductions are made for any rem
aining value that the material or equipm
ent may
have after the termination of the operations.
If material or equipm
ent used in connectionw
ith a specific incident had been purchased and stored for contingency purposes beforethe incident occurred, com
pensation is granted for a reasonable part of their purchaseprice.
The cost of cleaning, repairing and replacing m
aterial and equipment used for the
operations is accepted by the IOP
C F
und.
The clean-up after an oil spill often results in considerable quantities of oil and oily
debris being collected.R
easonable costs for disposing of the collected material are
compensated by the IO
PC
Fund.
()A
MA
IO P
RO
T'
Pollution incidents often result
in damage to property: the oil m
ay contaminate
fishing boats, fishing geac yachts, beaches, piers and embankm
ents.T
he IOP
C F
und
accepts costs for cleaning polluted properlyIf the polluted property leg fishing gear)
cannot be cleaned, the IOP
C F
und compensates the cost of replacem
ent, sublect todeductions for w
ear and tear.
Measures taken to com
bat an oilspill m
ay cause damage to roads, piers and
embankm
ents necessitating repairs, and reasonable costs far such repairs are accepted bythe IO
PC
Fund.
(d)A
DH
TB
ON
AL C
OM
S A
ND
FX
D C
OS
TS
In several cases involving the IOP
C F
und, the question has arisen as to theadm
issibility of claims from
a Governm
ent or from other public bodies relating to certain
costs which w
ould have arisen for the public authorities even if the incident had notoccurred l"fixed costs"), as opposed to "additional costs", ie expenses incurred by the publicauthorities as a result of the incident and w
hich would not have arisen had the incident and
the operations relating thereto not taken place. This question has been discussed in respect
of personnel permanently em
ployed by public authorities; costs for overtime allow
ances,extra allow
ances for heavy duties and travel costs would be additional costs, w
hereas thenorm
al salaries of such personnel would be fixed costs.
This question has also arisen in
respect of certain costs for operating vessels owned by public authorities and used for
clean-up operations.
The adm
issibility of claims for fixed and additional costs w
as discussed within the
IOP
C F
und in1 981 by an Inteosessiorial W
orking Group set up by the A
ssembly.
The
Working G
roup agreed that additional costs were alw
ays recoverable under the Civil
59
Liability Convention and the F
und Convention, but the G
roup could not reach unanimity on
the question of the admissibility of fixed costs.
Most delegations agreed that a reasonable
proportion of fixed costs should be recoverable, since it was in the interests not only of the
particular State but also of the IO
PC
Fund that a S
tate maintained a response force in order
to be able to respond quickly and cheaply in the event of a spill.If the clean-up operations
were left entirely to private firm
s, this would exclude fixed costs from
the bill to the IOP
CF
und but it would m
ean, in the Working G
roup's view, that the additional costs w
ould bem
uch higher, possibly even higher than if the clean-up operations had been carried out byS
tate employees w
ith fixed costs included in the bill.T
he Working G
roup agreed that inthe calculation of the relevant fixed costs only those expenses w
hich correspond closely tothe clean-up period in question and w
hich do not include remote overhead charges should
be included.T
he Assem
bly took note of the report of the Working G
roup and generallyendorsed the results of the W
orking Group's discussions.
Since 198 1
there have been many claim
s against the IOP
C F
und including items
which fall w
ithin the concept of 'fixed costs" as defined above.In
his negotiations with
claimants, the D
irector has based his approach on the position taken by the Working
Group. T
he Director's decisions in respect of individual claim
s have been endorsed by theE
xecutive Com
mittee.
Inparticular, the C
omm
ittee has reiterated the view that only those
expenses which relate closely to the clean-up period in question and w
hich do not includerem
ote overhead charges should be compensated.
In October 1988, the A
ssembly
stressed the necessity of a restrictive approach to fixed costs.
(e)S
AIIM
©L°siU
©ft8
n the PA
TM
OS
case lltaly,1985), the IO
PC
Fund exam
ined the question ds tow
hether and to what extent salvage operations fall w
ithin the definition pollution damage
laid down in the C
ivil Liability Convention, ie w
hether such operations could be consideredas preventive m
easures as defined in that Convention.
The E
xecutive Com
mittee took the
position that operations could be considered as falling within the definition of 'preventive
measures" only if the prim
ary purpose was to prevent pollution dam
age; if the operationsprim
arily had another purpose, such as salvaging hull or cargo, the operations would not
be covered by this definition.
The position taken by the E
xecutive Com
mittee w
as endorsed by the Italian Court of
first instance. The C
ourt stated that salvage operations could not be considered aspreventive m
easures, since the primary purpose of such operations w
as that of rescuing ship
and cargo; this applied even if the operations had the further effect of preventing pollution.T
he claimants w
hose claims had been rejected lodged appeals against this judgem
ent, butthe appeals w
ere later withdraw
n.
()L©
©l
AtU
8IO
wners or users of property w
hich has been contaminated as a result of an oil spill
may suffer losses.
For instance, a fisherm
an whose fishing gear has been polluted m
ay loseearnings during the period w
hen he is prevented from fishing, pending the cleaning of the
60
polluted gear or the purchase of new equipm
ent. Most legal system
s recognise in principleclaim
s for compensation of this kind.
The IO
PC
Fund also accepts claim
s for loss ofearnings in such cases.
Persons w
hose property has not been polluted may nevertheless suffer econom
ic lossas a result of oil pollution incidents.
If a certain area of the sea is heavily polluted, fishingm
ay be altogether impossible in that area for a certain period of tim
e, which m
ay causeeconom
ic loss to fishermen for w
hom there is no possibility of fishing elsew
here.H
oteliers
and restaurateurs may lose incom
e if tourists do not come to the area because the beaches
have become polluted.
In most jurisdictions there has been a great reluctance to recognise
claims in such cases, for fear of the far-reaching consequences that the acceptance of such
claims w
ould have.n m
ost countries, a claim for com
pensation is generally accepted onlyif it relates to dam
age to a defined and recognised right (eg a right of property or a right ofpossession). D
amage suffered by som
eone as a result of loss of use of the environment due
to pollution is normally not considered as dam
age to an individual's recognised right in thissense.
How
ever, in recent years there has been a development in m
any countries towards
a less restrictive approach.
Claim
s in this latter category have often been submitted to the IO
PC
Fund.
The
Executive C
omm
ittee has agreed to compensate econom
ic loss suffered by persons who
depend directly on earnings from coastal or sea related activities, eg loss of earnings
suffered by fishermen or by hoteliers and restaurateurs at sea-side resorts.
The IO
PC
Fund's experience show
s that it is often difficult to establish the amount of
the loss sustained in such cases. The loss suffered by the claim
ant may, for instance, have
to be established through comparisons w
ith the claimant's incom
e during a comparable
period in the years preceding the incident.
(g)D
AM
AG
E T
O T
HE
MA
RIN
E E
NV
OLM
EN
TT
he question of admissibility of claim
s for compensation for dam
age to the marine
environment w
as dealt with by the IO
PC
Fund for the first tim
e in connection with the first
AN
TO
NIO
GR
AtV
\SC
I incident which occurred in the U
SS
R in 1979 lcf section 13.5
below).
In that case, a claim of an abstract nature for com
pensation for ecologicaldam
age was m
ade by the Governm
ent of the US
SR
to the Soviet C
ourts.T
he amount
claimed had been calculated according to a m
athematical form
ula laid down in the U
SS
Rlegislation.
In view of this claim
, the Assem
bly unanimously adopted in 1980 a R
esolutionstating that "the assessm
ent of compensation to be paid by the International O
il Pollution
Com
pensation Fund is not to be m
ade on the basis of an abstract quantification of damage
calculated in accordance with theoretical m
odels'.
Follow
ing the adoption of this Resolution, a W
orking Group set up by the A
ssembly
examined the question as to w
hether and, if so, to what extent a claim
for environmental
damage w
as admissible under the C
ivil Liability Convention and the F
und Convention. T
heW
orking Group agreed that com
pensation could be granted only if a claimant w
ho has a
61
egal right to claim under national law
had suffered quantifiable economic loss.
The
position taken by the Working G
roup was endorsed by the A
ssembly in
1 98 L
In the second AN
TO
NIO
GR
AM
SC
I case (US
SR
, 19871, the US
SR
authoritiessubm
itted a claim relating to environm
ental damage, sim
ilar to the claim subm
itted in the
previous case.R
eferring to the 1980 Resolution, the E
xecutive Com
mittee in 1988
expressed its oblection to this claim (cf section
1 2.2 above(.
The sam
e question arose in the PA
TM
OS
case (Italy,1 985(, in w
hich the ItalianG
overnment m
ade a claim for com
pensation for damage to the m
arine environment w
ithoutspecifying the kind of dam
age which had allegedly been caused, nor giving any
explanation of the basis on which the am
ount claimed liad been calculated. T
he Executive
Com
mittee took the view
that this claim should be opposed by the IO
PC
Fund, in
accordance with the above-m
entioned Resolution.
The claim
was relected by the Italian
Court of first instance. T
he Italian Governm
ent Has appealed against this judgem
ent, andthe case is pending in the C
ourt of Appeal (cf section 12.2 above(.
lt should be noted in this context that the1 984 P
rotocol to the Civil Liability
Convention contains an am
ended wording of the definition of "pollution dam
age".A
proviso was added to the effect that com
pensation for impairm
ent of the environment (other
than loss of profit from such im
pairment( should be lim
ited to costs of reasonable measures
of reinstatement actually undertaken or to be undertaken. T
he new w
ording of the definitionw
as not in any way intended to w
iden the concept. The D
iplomatic
Conference based its
deliberations on tile policy of the IOP
C F
und and the principles developed by the IOP
CF
und Assem
bly and Executive C
omm
ittee as regords the admissibility of claim
s and theinterpretation of the definition of "pollution dam
age" as woided in the original text of the
Convention. T
he Diplom
atic Conference adopted the m
odified wording of this definition in
order to codify the interpretation of tile definition as developed by the IOP
C F
und.
5 Some H
Lrudents
Dealt w
ithy
IOP
CG
["LV©
M'8.
cìîooIrs
i©O
AM
LSC
i1 (8t?4ea)
(Sw
eden, 27 February 1979)
The U
SS
R tanker A
NT
ON
IO G
RA
MS
CI (27 694 G
RT
( grounded in the Baltic S
eaoff V
entspils (US
SR
(, causing a spill of about 5 500 tonnes of crude oil.S
ix weeks iater a
slick of oil mixed w
ith ice reached the Sw
edish archipelago near Stockholm
.T
he oil
polluted 4 000 islands in the archipelago whicH
represents an important natural resource in
terms of am
enities, fisheries and wildlife as w
ell as a popular tourist area.T
he Sw
edish
authorities carried out extensive clean-up operations.P
ollution damage w
as cuso caused to
the Aland islands in F
inland and to the coasts of Estonia and LaM
a in ihe US
SR
.
62
Oloo
200300
kilometres
At the tim
e of this incident, Sw
eden was P
ony both to the Civil Liabilfty C
onventionand to the F
und Convention, the U
SS
R w
as Party to only the C
ivil Liability Convention and
Finland w
as not Party to either of these C
onventions.C
ompensation from
the IOP
C F
undw
as, therefore, only available in respect of pollution damage in S
weden.
The S
wedish G
overnment claim
ed compensation from
the shipowner and the O
PC
Fund in the C
ity Court of S
tockholm for expenses resulting from
the clean-up operations,totalling S
Kr1 1 2 m
illion10 m
illion).T
he US
SR
authorities submitted claim
s totallingR
b1s48 million )44 m
illionl to the Court in R
iga IUS
SR
). Out of this am
ount, Rb1s47 m
illionrelated to ecological dam
age. The ow
ner of the AN
TO
NIO
GR
AM
SC
I established alim
itation fund under the Civil Liability C
onvention in the Court of R
iga for an amount of
Rbls2 431 854 (2.2 m
illionl.
The settlem
ent negotiations beiween the S
wedish G
overnment and the IO
PC
Fund
brought to light several questions of principle. The D
irector considered that not all expensesincurred for the clean-up operations w
ere necessary.In addition, he considered that certain
items should be deducted since they, in his view
, did not relate to extra costs incurred onlybecause of this incident.
Agreem
ent was reached on a com
promise, w
hereby the claimsubm
itted by the Sw
edish Governm
ent was settled at S
Kr93 m
illion (28.4 million).
In
appreciation of the rapid settlement of its claim
, the Governm
ent of Sw
eden waived part of
its claim for interest to w
hich is was entitled under S
wedish law
.
63
NF
IIILAN
D
A land
Stockholm
.E
stoniaUS
SR
SW
ED
EN
Ventspi ls
Latvia
As a result of this incident, the A
ssembly set up an Inter-sessional \tV
orking Group to
consider the IOP
C F
unds general policy in respect of the admissibility of claim
s lcf section13.4(d) above).
Although the IO
PC
Fund w
ould not pay compensation for dam
age in the US
SR
, theclaim
submitted by the U
SS
R authorities w
as of great interest to the IOP
C F
und sinceit
competed w
ith the claim subm
itted by the Sw
edish Governm
ent for the amount available in
the limitation fund.
For this reason the E
xecutive Com
mittee w
as concerned in respect of the
claim m
ade by the US
SR
authorities relating to environmental dam
age.T
he amount of
damage w
as calculated, in accordance with a U
SS
R statute, at a rate of 2 R
oubles percubic m
etre of polluted water (estim
ated according to the quantity of oil spilt).T
he
Executive C
omm
ittee considered that such a claim w
as not covered by the notion ofpollution dam
age' as defined in the Civil Liability C
onvention and the Fund C
onvention.In
the view of the C
omm
ittee, claims should be based on quantifiable losses w
hich can beattributed to a particular incident.
The position of the IO
PC
Fund in respect of this claim
was m
ade clear to the US
SR
authorities. How
ever, the Executive C
omm
ittee did not see anypossibility of raising ob)ections in court proceedings against the ow
ner or the claimant. T
hedeliberations in the E
xecutive Com
mittee concerning this claim
led to the adoption of theIO
PC
Fund R
esolution referred to in section1 3.4)gl above.
An agreem
ent was reached betw
een the Sw
edish Governm
ent arid the owner of
the AN
TO
NIO
GR
AM
SC
I regarding the distribution of the limitation fund established in the
Court in R
iga. Under this agreem
ent, the Sw
edish Governm
ent received an amount of
SK
r3 992 283 equalling RblsóO
7 9001. The rem
aining part of the limitation am
ount was
paid to the authorities in the US
SR
. The distribution w
as made in proportion to the am
ountof the claim
s submitted by the S
wedish G
overnment and the U
SS
R authorities, respectively.
This A
greement w
as approved by the Executive C
omm
ittee of the IOP
C F
und and by theC
ourt.
ilYA
fAfW
N"8
(Japan, 22 March 1979)
The first incident involving the IO
PC
Fund in Japan occurred w
hen the Japanesetanker M
IYA
WR
U N
°8 collided with a m
otor vessel in the Inland Sea, causing pollution to
important fishing areas.
Com
pensation was paid for clean-up operations, as w
ell as forfisherm
en's loss of earnings resulting from the suspension of fishery activities during the
clean-up operations.T
he total amount paid by the IO
PC
Fund as a result of this incident
was
150 million 12325 0001.
The claim
s settlement procedure developed in this case, in close co-operation w
iththe Japanese P
& I
Club, served as a m
odel for the IOP
C F
und's handling of other incidentsoccurring not only in Japanese w
aters but also elsewhere.
64
TP
NK
(United K
ingdom, 2 1 June / 979)
Having collided w
ith a British R
oyal Fleet auxiliary ship in the E
nglish channel, thetanker T
AR
PE
NB
EK
loaded with about
1600 tonnes of lubricating oil capsized.
The
damaged tanker w
as towed to a sheltered bay w
here the cargo oil was pum
ped out of theship by the shipow
ner.T
he United K
ingdom G
overnment and local authorities carried out
various measures to prevent a possible spill of oil w
hich could have caused damage to
beaches or the marine environm
ent.
The U
nited Kingdom
Governm
ent, the local authorities and the owner of the
TA
RP
EN
BE
K instituted legal proceedings, seeking a total of 21.7 m
illion in compensation
from the IO
PC
Fund.
The lim
itation amount of the shipow
ner's liability under the Civil
Liability Convention w
as 264 356.
The settlem
ent of the claims in this case becam
e complicated due to a dispute as to
whether there w
as any spill of persistent oil as a result of the incident.T
here were also
different opinions on the interpretation of the relevant United K
ingdom legislation and the
Civil Liability and F
und Conventions.
The D
irector maintained that the IO
PC
Fund w
asliable to pay com
pensation only if there had been a spill of persistent oil as a result of theincident.B
ased on investigations by the IOP
C F
und's surveyors, the Director w
as of theopinion that there w
as not sufficient evidence that any persistent oil had been spilled.C
onsequently, he relected any liability on the part of the IOP
C F
und.
The am
ount of compensation to be paid by the IO
PC
Fund,
if any, dependedlargely on the apportionm
ent of liability between the T
AR
PE
NB
EK
and the other shipinvolved in the collision.
The investigation w
hich was carried out show
ed that the othervessel w
as more to blam
e for the collision. A distribution of liability of 75:25 w
as agreedbetw
een the hull insurers.
In the negotiations with the claim
ants, the Director took into account the uncertainty
that existed as to the legal situation.A
ll claims against the IO
PC
Fund w
ere settled at atotal am
ount of 2363 550 linclusive of interestl.
MA
JWZ
A(J M
AR
U N
°5(Japan, 8 D
ecember 1979)
The M
EB
AR
UZ
AK
I WA
RU
N°5 case involved a Japanese tanker of only 19 G
R1
carrying lust 30 tonnes of heavy fuel oil when she sank in the Inland S
ea ljapanl.T
he
claims for cleam
up operations and fishery damage w
ere settled at yi im
illion 1250 0001.T
he malor part of this am
ount was paid by the IO
PC
Fund, as the lim
it of the shipowner's
liability was only
845 480 123 7401.
65
This incident illustrates the consequences of the C
ivil Liability Convention not
providing a minim
um lim
itation amount for sm
all tankers.In fact, the IO
PC
Fund has paid
compensation to third parties in respect of
1 2 incidents in Japon involving vessels of less
than 200 GR
T.
In five of these cases, the payments m
ade by the IOP
C F
und were below
10 million 1240 0001.
During its discussion of this incident, the E
xecutive Com
mittee expressed concern
about the absence of a minim
um liability for sm
all vessels and the consequential low level of
their liability.T
he Director w
as therefore requested to investigate the possibility ofconcluding an agreem
ent with shipow
ners under which they w
ould not claimindem
nification under Article 5 of the F
und Convention and w
ould accept a minim
umliability for sm
all ships.H
owever, the D
irector's approach to shipowners and insurers
received a negative response.In their replies, reference w
as made to the revision of the
Civil Liability C
onvention and the Fund C
onvention which w
as then taking place.Indeed,
when the
1 984 Protocol to the C
ivil Liability Convention w
as adopted, it introduced am
inimum
liability of 3 million S
DR
for ships not exceeding 5 000 units of tonnage.
OW
A M
AR
U(Japan, 9 January 1980)T
he Japanese tanker SH
OW
A M
AR
U (199 G
RT
), carrying 500 tonnes of heavy fueloil, collided w
ith a chemical tanker in the N
aruto Straits (Japan).
About 1 00 tonnes of the
cargo escaped.
The costs of clean-up operations am
ounted to only1
im
illion (225 000).H
owever, over 3 000 nets n an im
portant seaweed farm
ing area were polluted, requiring
cleaning or replacement, and fisherm
en lost earnings because polluted seaweed could not
be sold.T
he fishery claims of
l84 million w
ere eventually agreed at 'l00 million
12225 000).T
he loss of income w
as assessed on the basis of a comparison of the
harvests of polluted farms w
ith those of unaffected adlacent farms; records of previous years
were also exam
ined. Despite difficult negotiations of these com
plex claims, com
pensationw
as paid by the IOP
C F
und within four m
onths of the incident.
J©L
MztttT
I(S
weden, 7January 198 1)
The grounding of the U
SS
R tanker JO
SE
MA
RT
I in a narrow channel on the S
wedish
east coast brought about lengthy legal actions in the Sw
edish courts between the claim
antsand the shipow
ner.
The S
wedish G
overnment, w
hich had paid the costs of the clean-up operations inthe S
tockholm archipelago, took action in the S
tockholm C
ity Court against the ow
ner of theJO
SE
MA
R11, w
ho constituted a limitation fund of S
Kr23.8 m
illion (22.2 million) under the
Civil Liability C
onvention.In this action, the ow
ner of the JOS
E t'M
RT
I maintained that he
had no liability for the pollution damage because the incident w
as wholly caused by the
negligence of the Sw
edish Governm
ent in the maintenance of navigational aids
66
(cf Article 111.2(c) of the C
ivil Liabilfttì Convention).
Secondly, the ow
ner argued that if the
Court w
ere not to accept that the damage w
as wholly caused by such negligence, he
should nevertheless be wholly exonerated from
liability to the Sw
edish Governm
ent on thegrounds of contributory negligence, due to lack of m
aintenance of navigational aids, or thatthe com
pensation should be substantially reduced (Article 111.3).
Inits judgem
ent in May 1 985, the C
ity Court held that the incident w
as caused bynegligence attributable to the shipow
ner.lt w
as recognised by the Court that there w
as acertain negligence on the part of the S
wedish authorities in the m
aintenance of navigationalaids and that this negligence had contributed to the incident.
How
ever, since thisnegligence w
as considered relatively minor, the C
ourt awarded the G
overnment full
compensation for the pollution dam
age.
The case w
as taken to the Court of A
ppeal in Stockholm
.T
he Court of A
ppealconfirm
ed the position taken by the City C
ourt that the incident was caused by negligence
attributable to the shipowner, ie an error com
mitted by the pilot of the vessel.
The C
ourt of
Appeal rejected the argum
ent advanced by the owner of the JO
SE
MA
R11 that he should be
exonerated from liability because the pilot should be considered as being covered by the
notion of navigational aids.C
ontrary to the City C
ourt, the Court of A
ppeal held that theshipow
ner had not proved any negligence on the part of the Sw
edish Governm
ent in them
aintenance of navigational aids or any negligence by any public official.T
he Court of
Appeal upheld the judgem
ent of the City C
ourt, obliging the shipowner to pay full
compensation to the S
wedish G
overnment for the pollution dam
age arising out of theincident.T
he judgement of the C
ourt of Appeal becam
e final, after the Suprem
e Court
rejected an application by the shipowner for a review
of the case.
Since the lim
itation amount exceeded the aggregate am
ount of the principal of theclaim
s, the IOP
C F
und was not called upon to pay any com
pensation as a result of thisincident.
LOltE
it8íI(U
SS
R, 22 N
ovember 1981)
The tanker G
LOB
E A
SIM
I ran aground and broke up near the port of Klaipeda
(US
SR
).S
everal thousand tonnes of hea'y fuel oil spilled into the port and later drifted outto sea. C
laims for com
pensation for pollution damage in the U
SS
R totalling R
bls8l 3 million
(2745 million( w
ere made against the shipow
ner. The m
ajor part of this amount related to
environmental dam
age.
At the tim
e of the incident, the US
SR
was not P
arty to the Fund C
onvention but onlyto the C
ivil Liability Convention. T
here was consequently no pollution dam
age in any Fund
Mem
ber State and the IO
PC
Fund w
as, therefore, not called upon to pay anycom
pensation as a result of this incident. How
ever, since the GLO
BE
AS
IMI w
as registered
67
in Gibraltaç je ¡n a S
tate Party to the F
und Convention (the U
nited Kingdom
l, and thedam
age was caused in a S
tate Party to the C
ivil Liability Convention, the IO
PC
Fund paid
indemnification to the shipow
ner in the amount of R
b1s337 581 12326 509) (cf Article 3.2
of the Fund C
onventionl.
(Japan, 3 ApriI 1982)
Of the incidents in Japan in w
hich the IOP
C F
und has been involved, theF
UK
UT
OK
U M
AR
U N
°8 incident caused the most extensive pollution dam
age. As a result
of a navigational error on the part of the Japanese tanker FU
KU
TO
KU
MA
RU
N°8, this
tanker collided with a gravel carrier in T
achibana Bay, T
okushima. 85 tonnes of heavy fuel
oil spilled from a dam
aged port tank and spread over an area used for intensive fishing.T
he major part of the extensive cleanw
p operations were com
pleted within ten days, but
some operations continued for a m
onth.T
he cost of these operations was settled at
2 1 2 million (2940 0001.
The spilt oil caused extensive fishery dam
age.T
he pollution forced fishermen to
suspend operations for a week, as the areas in w
hich their fishing activities normally w
erecarried out had been polluted or because oiled nets and equipm
ent needed cleaning orreplacem
ent.In m
any cases, catches had to be abandoned since they had become oiled.
Som
e fish farmers lost incom
e because the pollution prevented or delayed their activitiesduring a particularly im
portant period of the year. A num
ber of seaweed farm
s became
heavily polluted resulting in loss of earnings for the fishermen concerned.
The claim
s for fishery damage totalled
657 million (22.9 m
illion).A
lthough the
negotiations with claim
ants were very com
plicated, the claims w
ere finally settled at a totalof
172 million (2760 000), and com
pensation was paid w
ithin ten months of the
incident.SHIN
KA
I MA
RU
N°3
(lapon, 2 1 June 1983)T
he SH
INK
AI M
AR
U N
°3 incident, which occurred in the port of Ichikaw
a (japanl,highlighted som
e of the problems w
hich may arise as a result of a relatively sm
all incident.
The lim
it of the owner's liability under the C
ivil Liability Convention w
as only1 .9 m
illion (28 000).In view
of the disproportionately high legal costs which w
ouldhave been incurred in establishing the lim
itation fund,in com
parison with the lim
itationam
ount, the Executive C
omm
ittee decided that,in this case, the IO
PC
Fund should
exceptionally pay compensation w
ithout the prior establishment of the lim
itation fund(cf section
1 3. 1(h) above(.
This incident occurred as a result of the negligence of the m
aster of the tanker who
was also the ow
ner of the vessel. The question arose as to w
hether the owner/m
aster was
entitled to limit his liability under the C
ivil Liability Convention.
The E
xecutive Com
mittee
68
decided that the owner/m
aster was entitled to lim
it his liability since the negligent act was
comm
itted in his capacity as master of the vessel.
Under A
rticle 4.3 of the Fund C
onvention, the IOP
C F
und may be w
holly orpartially exonerated from
its obligation to pay compensation to o person w
ho sufferedpollution dam
age, if the damage w
as caused by the negligence of that person.T
he
question arose as to whether the ow
ner/master could,
n this case, recover his expenses for
voluntary measures to m
inimize pollution dam
age. The C
omm
ittee decided that the claimfor expenses voluntarily incurred by the ow
ner/master for the taking of preventive m
easuresshould be accepted by the IO
PC
Fund.
RO
SE
GA
RD
EN
MA
RU
(United A
rab Em
irates, 26 Decem
ber 1 985)T
he RO
SE
GA
RD
EN
MA
RU
incident occurred on 26 Decem
ber 1985 in the Um
mA
l Qaiw
ain Municipality, in the U
nited Arab E
mirates, w
hen a leak of oil from a sea valve
of this vessel allegedly polluted the coast, lagoon and island of the Em
irates.lt w
as notuntil
1 8 February 1 986 that the IO
PC
Fund w
as informed of the incident.
During the period before the IO
PC
Fund w
as notified, the Um
m A
l Qaiw
ainM
unicipality had sued the operator of the RO
SE
GA
RD
EN
MA
RU
for compensation for any
damage already sustained and for any dam
age which m
ight arise in the future.In
its
judgement rendered in January 1 986, the C
ourt ordered the operator to pay Dh2 m
illion12300 0001 to the M
unicipality, this amount to be increased if the dam
age were
aggravated.T
he judgement contained no reference to the C
ivil Liability Convention or to
the question of limitation of liability, and no indication w
as given of how the dam
ages were
calculated.T
he operator was also ordered to deposit D
h im
illion (21 50 0001 as aprecaution, to be paid to the M
unicipality sublect to the consent of the Court. T
he operatorappealed against the judgem
ent, but the right of appeal was denied.
The operator negotiated an agreem
ent with the authorities of the E
mirates, under
which the am
ount of compensation w
as reduced from D
h3 million to D
h 1 .5 million
12225 0001.T
hese negotiations were carried out w
ithout the involvement of the IO
PC
Fund.
The IO
PC
Fund becam
e involved when the shipow
ner's R &
Iinsurer presented a
claim against the IO
EC
Fund for the am
ount paid to victims m
inus the estimated lim
itationam
ount applicable to the ship.A
s the IOR
C F
und had not been notified of the courtproceedings in accordance w
ith Article 7.6 of the F
und Convention, the D
irector informed
the P &
IC
lub that the judgement w
as not binding on the IOR
C F
und.T
here were also
many points w
here the IOP
C F
und requested more inform
ation, such as the factual basis ofthe claim
and the reasonableness of the assessment of the dam
ages.
Follow
ing discussions between the IO
PC
Fund and the P
& I C
lub, the latter decidednot to pursue its claim
against the IOP
C F
und since, inits view
, the small am
ount of the
69
70
claim did not m
ake the investigation and discussion of so many aspects of the case an
economic proposition.
TC
ON
c'1kñR
K
The system
of compensation created by the C
ivil Liability Convention and the F
und
Convention represented an innovation in international law
.lt w
as, therefore, impossible to
foresee how this system
would function.
In October 1988, the A
ssembly discussed the
experience gained from ten years of operating this system
. The A
ssembly considered that
the system hod proved to be a viable one.
The A
ssembly noted that under the regim
e of
compensation adm
inistered by the IOP
C F
und,it w
as possible to compensate victim
s of oil
pollution damage rapidly and at low
cost.
The IO
PC
Fund has also been able to play an im
portant role in the development of
international law in the field of liability and com
pensation for oil pollution damage. O
fparticular im
portance are the decisions taken by the Assem
bly and the Executive C
omm
itteeconcerning the interpretation of the definition of
pollution damage".
As stated by the
Assem
bly, a uniform interpretation of that definition
is essential for the functioning of theregim
e of compensation established by the C
onventions. This is so, since receivers of oil in
one OP
C F
und Mem
ber State contribute to the paym
ent of compensation
for oil pollution
damage suffered in other M
ember S
tates.
As already m
entioned, the1 984 P
rotocols to the Civil Liability C
onvention and the
Fund C
onvention are not in force.T
he regime of com
pensation established by the present
Conventions nevertheless provides a cover F
or oil pollution damage w
hich is adequate,except in very rare cases.
The tw
o Conventions together m
ake available a cover which
corresponds to45 m
illion (US
S81 m
illion) per incident.In fact, on a global basis, there
have been only a couple of cases where the aggregate am
ount of pollution damage
approached or exceeded this amount.
For this reason,
itis
likely that practically allincidents in IO
PC
Fund M
ember S
tates involving laden tankers will be adequately dealt w
ith
under the Conventions for a num
ber of years to come.
NLW
© ©
?
AS
SE
MB
LY
Com
posed 0f 0It Mem
ber States
Chairm
an:M
n Bredholt
(Denm
ark)
Vice-C
hairmen:
Professor H
Tanikaw
aapan(
Mr A
Al-Y
agout(K
uwait)
EX
EC
UT
IVE
CO
MM
IHE
E
(OP
C F
UN
D S
EC
RE
TA
RIA
T
©fkers
Mr M
JacobssonD
irector
Mr K
Wada
Legal Officer
Mr S
O N
teF
inance/Personnel O
fficer
AU
DIT
OR
S
Com
ptroller and Auditor G
eneralU
nited Kingdom
71
2©h gee©
ra21 st
Chairm
an:M
r P N
oviaC
hairman:
Mr P
Novia
(Italy)(Italy)
Vice-C
hairman:
Mr H
Muttilainen
Vice-C
hairman:
Mr G
Candappa
(Fin and)
(Sri Lanka)
Finland
ItalyB
ahamas
Nigeria
France
Kuw
aitF
ranceS
ri Lanka
Germ
any, Federal
Netherlands
Greece
Sw
eden
Republic of
Poland
IndonesiaT
unisia
Ghana
Tunisia
ItalyU
nion of Soviet
Greece
United K
ingdomJapan
Socialist R
epublics
IndonesiaK
uwait
United K
ingdom
Liberia
Annua] C
ontributions 1 9861 799 359
Add adjustm
ent to Prior Y
ears Assessm
ents
558
1 799917
Miscellaneous Incom
e23 163
Interest on Overdue C
ontributions8 680
Interest on Investments
257 553289 396
MM
©©
t©n©
MC
°
INC
OM
E A
ND
EX
PE
ND
ITU
RE
AC
CO
UN
T F
OR
TH
EF
INA
NC
IAL P
ER
OD
1 JAN
UA
RY
- 31 DE
CE
MB
ER
1987
72
2089313
Secrekiidei
serùes
Unliquidated O
bligations25719
Liquidated Obligations
257 1 35
282 854
General C
laims
276511559365
1 529 948E
xchange Adjustm
ent1 529
Excess of Incom
e over Expenditure
1 528 419
CO
]El
3ft3o1
INC
OM
E A
ND
EX
PE
ND
TU
RE
AC
CO
UN
TF
OR
TH
E P
ER
IOD
EN
DE
D 3 1 D
EC
EM
BE
R 1 987
Miscellaneous
9 537 856
Interest on Investments
2802219818077
73
EX
PE
N IT
ULE
Fees &
Travel C
osts77 241
Excess of Incom
e over Expenditure
9 740 836
BaH
nce bought forward horn
1 9862 995 485
Balance as at 31 D
ecember 1987
1 2 736 321
ANNEXBalance eet of the ÇtL rnbe U
16173488
Note 2 In addition to the assets shown in this statement, investment in equipment,
furniture, office machines, supplies and library books as at 3 J December 1987amounted at cost price ta 241 778 net of VAT.
ASSETS
Cash at Banks and in Hand
V V
15691 771
Contributions Outstanding:Annual Contributions 1982 418Annual Contributions 1 983 1 483Annual Contributions 1 985 5515Annua] Contributions 1986 19 148Major Claims Fund
Ondina/Fukutoku Maru 4 592 31 156
Due from Major Claims Fund Brady Maria 434 374
VAT Recoverable 8 942
Misceljaneous Receivable 4 593
Interest an Overdue Contributions:
General Fund 1 445Major Claims Funds:
Ondina/hukutoku Maru 77Ta n io 1 130 2 652
V V
Accumulated SurpFus from General Fund
Prior Years 1 610 808Add Surplus 1987 1528419
LIABILITIES
Due to Staff Provident Fund
Accounts Payable
Unliquidated Obligations19861987
Prepaid Contributions
Genera] FundMabí Claims Fund
Brady Maria
Contributors Account
Due to Major Claims Fund Tania
16173488
Note 1 There are contingent liabilities in respect of incidents which areestimated to amount to 16 340 720. Those liabilities which matsrewillunder the Fund Convention, be met from contributions assessed by theAssembly.
2 42625719 28 145
93 379
3 139 227
89 206
33 137
49408 142787
4665
12736321
©M
8S ©
©7©
Co1
©lK
M0 ©
75
codar Y®
coisI
As reported at 3 1 D
ecember 1 988
Corm
chs ôte4eO
(tonnes)%
m
Japan219037779
27.54Italy
125 151 59115.74
France
86 868 00010.92
Netherlands
82415 96010.36
United K
ingdom72525611
9.12S
pain51 351 010
6.46U
nion of Soviet S
ocialist Republics
25 060 2813.15
Germ
any, Federal R
epubFic of
20 341 5622.56
Sw
eden18233789
2.29G
reece17657003
2.22F
inland12 489 653
1 .57
Portugal
10083 8211.27
Yugoslavia
9 889 8981 .24
Norw
ay9441 607
1.19
Baham
as8 355 963
1 .05
Indonesia8 176 046
1 .03
Denm
ark6331 607
0.80S
yrian Arab R
epublic2 784 616
0.36T
unisia2 363 108
0.30S
ri Lanka1 778 852
0.22C
arnerean1 496964
0.19N
igeria1 284 634
0.16G
hana903047
0.11
Poland
580 0210.07
Gaben
420 0990.05
Papua N
ew G
uineo231 639
0.03Iceland
OO
Kuw
aitO
O
Maldives
OO
Monaco
OO
Om
anO
O
Seychelles
OO
Tuvalu
OO
Algeria <
1>B
enin <1>
Côte d'ivoire
Fiji <
1>Liberia <
1>Q
atar <1>
United A
rab Em
irates <1>
795 254 161100.00
<1>
No report
Remarks
V5 438 909recovered by way
of recourse
V9893 196recovered by way
of recourse
Because of recourse
against same insurer no
compensation paid by
IOPC Fund
N
ANNEXSummary © ddents
f31 December 1988)
Cause of Incident ClaimsVessel Gross Tonnage Date & Place & Quantity of Compensation & Indemnification
1Fb9 State) ICLC Liobilityl of Incident Oil Spilled ltonnesf
ANTONIO 27694 GRI 27.2.79 Grounding Clean-up costs of
GRAMSCI105581
Rbls2 431 584 off Ventspils,
USSR
5 500) Swedish authoriyes
Interest
SKr89 0577176 649 440
paid
paid
Total SKr9S 707 157
MIYA MARU N$ 997 GRT 22.3.79 Collision Clean-up costs V 108 589 104 paidhopan) V37 710 340 Bisan Seto,
japonf540) Fishery damage
Indemnification
31 521 4789 427 585
paid
paidTotal f049538 167
TARPENBEK 999 ORT 21.6.79 Collision UK Government 9175 000 paid)FRG) 964 356 off Selsey not knownl Nature Conservancy Council 1 400 paid
Bill, UK Local authorities 7 f50 paid
Owner's clean-up costs 1 80 000 paidTotal 9363 550
MEBARUZAKI Ì9GRT 8.1 2.79 Sinking Clean-up costs V7 477481 paidMARU N5Oapanl
f045 480 Mebaru Port,
jo pon
110f Fishery damage
Indemnification
2710854211 370
paid
paidTotal f00399705
SHOWA MARU 199 ORT 9.1.80 Collision Clean-up costs VIO 408 369 paidfapanl f0 123 140 Naruto Strait,
ja pan
f100) Fishery damage
Indemnification
92 696 5052 030 785
paid
paidTotal f005135659
UNSEI MARU 99 ORT 9.1.80 Collision Owner's clean-up costs Vo 903 46f estimatedha pa n) f0 143 f 80 off Akune
Port, japon
feo information
but less than
140 tonnesl
TANIO 8048 GRT 7.3.80 Breaking French Government FFr208 736 142 paid
fMadogascarl FFrI 833 718 off Brittany,
Fiance
13 500) . French ocal authorities
Private claimants
5 689 0252961 290
paid
paid
Port Autonome du Havre 74 444 poi4
UK P & I Club 4679 742 paid
Total FFr222 140643
FURENAS 999 GRI 3.6.80 Collision Clean-up costs:
{Swedenl SKr612 443 Oresund,
Sweden
1200f - Swedish authorities
- Swedish private claimants
SKr2 911 637276 050
paid
paid
Sub-total SKr3 1 87 687
Clean-up costs:
- Danish authorities DKr4O8 633 paid
- Danish private claimants 9 956 paid
Sub-total DKr41 8 589
Indemnification SKr1 53 111 paid
HOSEI MARU 983 GRT 21.8.80 Collision Clean-up casts 163 051 598 paid
hopan) 35 765 920 off Miyagi,
Japan
(2701 Fishery damage
Indemnification
50 271 2678 941 480
paid
paid
Total 222 264 345
JOSE MARTI 27706 ORT 7.1.81 Grounding Clean-up casts
(USSR) SKr23 844 593 off Dalarö (1 0001 of Swedish authorities SKrl 9 296 000 claimed
Sweden 4 Private claimants 1 065 000 claimed
Total SKr2O 361 000
SUMA MARU N1 1 199 GRT 21.11.81 Grounding Owners clean-up casts V6 426 857 paid
baponl fL7 396 340 off Koratsu,
Japan
(10f Indemnification 1 849 085 paid
Toral 8 275 942
GLOBE ASIMI 12404 CR1 22. f 1.81 Grounding Indemnification US $467 953 paidlGibraltar( RbIsl 350 324 Klaipeda,
USSR
estimated at
more than
1 6 000 tannes)
ONDINA 3f 030 GRT 3.3.82 Discharge al Clean-up casts:
(Netherlands) DM10 080 383lincluding
Hamburg,
FRG
cargo oil
estimated
Owner
Authorities
DM1 1 30301142 163
paid
paid
interest) 200-300 tannes) Total DM1 t 345 174
US $17 480 028recovered by way of recourse;
total payment equalled limit of
compensation available
under Fund Convention
SKr449 961
recovered by way
or recourse
Vl 8 221 905recovered by way
of recourse
Total damage less than owners
liability. Owners defence that
he rhauld be exonerated fram
liability elected by final
udgement in Sweden.
No third party
claims made
No damage in
Member State
Couse of Incident Claims
Vessel
Flag State)
Gross Tonnage
CLC Liability)
Dole & Place
of Incident
& Quantity ofOil Spilled (tonnes)
Compensation & Indemnification Remarks
SHIOTA MARU N°2 16 GRT 31,3,82 Grounding Clean-up costs 46 524 524 paid
hopan) ty6 304 300 Takasbima (20f Fishery damage 24571 190 poid
Island, Japan Indemnification 576 075 paid
Total 72 671 789
FUKUTOKU MARU N°8 499 GO 3.4.82 Collision Clean-up costs h200 476 274 paid
hopan) 20 844 440 Tachibono (851 Fishery damage 163 255 481 paid
Bay, Japan Indemnification 5 211 11 0 paid
Total 368 942 865
KIFUKU MARU N°35 107 ORT 1.12.82 Sinking Indemnificahon 598 181 paid Total damage less than
hopan) h4 271 560 Ishinomaki,
Japan
(33) owner's liability
SHINKAI MARU N°3 48 GRT 21.6.83 Discharge of Clean-up casts yi 005 160 paid
baponl 1 880 940 Ichikawa,
Japan
carga oil
13.5)
Indemnification 470 235 paid
Total yi 475 395
EIKO MARU N°1 999 GRT 13.8.83 Collision Clean-up casis Y23 193 525 paid 14 843 746
hopan) 39 445 920 Karakuwazaki,
Japan
(357f Fishery damage
Indemnification
1 541 584
9 861 480
paid
paid
recovered by
way of recourse
Total y34 596 589
KOEI MARU N°3 82 GRT 22.12.83 Collision Clean-up casts y 8 010269 paid 8 994 083
hopan) hO 091 660 Nagoya,
Japan
(49) Fishery damage
Indemnification
8971 979772 915
paid
paid
recovered by
way of recourse
Total hO7 755 163
TSUNEHISA 38 GRT 26.8.84 Sinking Cleanup costs 16 610 200 paid
MARU N°8hopan)
V964 800 Osaka,
Japan
30) Indemnification 241 200 paid
Total V16 851 400
KOHO MARU N°3 199 GRT 5.11.84 Grounding Clean-up casts H68 609 674 paid
)(apan( hO 385 920 Hiroshima (20) Fishery damage 25502 144 paid
Japan Indemnification 1 346 480 paid
Tata) ty95 458 298
KOSHUN MARU Nl 68 GRT 5385 Coiision Clean-up costs 26 24589 paid
(Japan) Sfl 896 320 Tokyo Bay,
jopan
(80)
Indemnification 474 080 not yet paid
PATMOS 51 627GRT 21.3.85 Collision Preventive measures
IGreecel Ltl 3 263 703 650 Straits of 1700) and clean-up costs
Messina,
Italy
(including salvage)
Damage to marine
1156 049 076 053 claimed
environment 5 ODO 000 000 claimed
Total LItól 049076053
JAN 1 400 GRT 2.8.85 Grounding Danish authorities DKr9 378 528 paid
IFRGI DKrl 576 170 Aalborg,
Denmark
(300) Municipality
Private claimants
24 12653 007
paid
paid
Indemnification 394 043 paid
Total DKr9 849 704
ROSE GARDEN 2621 GET 26.12.85 Discharge of oil P & I Club
MARU(Panama)
US $364 182estimate)
Umm Al Qoiwain,
UAE
lunknownl in subrogation US $44 204 claimed
BRADY MARIA 996 GET 3.1.86 Collision German authorities DM3 219425 paid
IPanarnal DM324 629 Elbe Estuary,
PEG
12001 Private claimants 1 086 paid
Total DM3 220 511
TAKE MARU N6 83 GET 9.1.86 Discharge of oil Indemnification 104 987 paid
(Japanl f'3 876 800 Sakai-Senboku 10.1)
Port, Japan
OUED 1 576 GET 18.12.86 Discharge of ail Power station Dm5 278 525 claimed
GUETERINI
lAlgerial
Din 1 175 064 Algiers,
Algeria
estimated 15) Owner's clean-up costs 5 650 claimed
Total Dm5 284 175
lndemndication Dm293 766 not yet paid
THUNTANK 5 2 866 GRT 21.12.86 Grounding Swedish authorities SKr24 992 884 claimed
Sweden) SKr2 741 746 Gövle,
Sweden
150-200) Private claimants 49361 paid
Total SKr25 042 245
Indemnification 110685 437 not yet paid
ANTONIO 27706 GET 6.2.87 Grounding Finnish authorities FM22 124 415 claimed
GRAMSCI
)USSRI
Rbls2 431 854 Borgà,
Finland
1600-700)
USSR authorities Rbls2 31 2 864 claimed
Recourse claim by IOPC Fund
pending
Most claims settled;
L1t9 436 3 1 8 650
paid by P & I insurer; court
proceedings in progress
against IOPC Fund.
Claim against IOPC Fund
withdrawn
DM333 027recovered by
way of recourse
Total damage
less than
owners liability
SKr49 361 paid
by P & I insurer
Further claims
may be submitted
Remorks
Claim not
pursued
Ferther claims
may be submitted
FFr59 392 paid by P & I
insurer; further claims will be
submined
Claims not yet
submitted
Noten
t Amounts are ven in natienel currencies; the relevenr cenversten retes es er 30 December 1988 aseos Fellews2 Dir 11.4713 2 LIt 2362,00
DKr 12.4100 P 226,00FM 7,5168 SKr 11.0800FEr 10.9575 SSS 1.8090DM 3.2075 RbIs 1.0911
2 Cl e E cept wh I rs d ai d p d th m r h w I e B g t 1h IOPCF d Tb I f rs t f t nr t t b B t d d t g h t th h I e rh rs t pr d by ih
Cause of Incident Claims
Vessel Gross Tonnage Dote & Place & Quantity of Compensotion & lrrdemnification
(Flog Slate) )CLC Liability) of Incident Oil Spilled (tonnes)
SOUTHERN EAGLE 4461 GRT 156.87 Collision Clean-up costs Y37 89390 claimed
Uapanl 93 874 528 Soda Misaki,
Japon
115) Fishery damage 94 800 000 claimed
Total l31 989390
Indemnification 23 468 632 nat yet paid
EL HANI 81 412 ORT 22.7.87 Gíoendtng Indonesian authorities:
(Libyal 27900000 Indonesio (3 000) request for advance payment US $242 800 claimed
(estimatel
AKARI 1 345 ORT 25,8,87 Fire Clean-up costs US $394 000 claimed
(Panama) 2115000(estimate)
Dubai,
UAE
(1 000)
HINODE MARU N1 19 ORT 18.12.87 Mishandling of Clean-up costs )3 271 225 claimed
hopan) 480 000lestimate)
Yawatahama,
Japan
carga
(25)
Fishery doma,qe 30000 claimed
Total 3 301 225
Indemnification V 1 20 000 not yet paid
AM.A.ZZONE 18 325 GRT 31.1.88 Storm damage French local authorities FFu978 853 claimed
(Italyl FFr1 3 860 396 Brittany,
France
to tanks
2 0001
French private claimants
French private claimants
99 92559 392
claimed
paid
Total FFr1 138 170
Channel Islands authorities 221 393 agreed
TAIY'O MARU N13 86 GRT 12.3.88 Discharge Private claimants YB 611 685 agreed
Uapan) V2 476 800 Port of (6)
Yokohama,
Japan
Indemnification V619 200 nat yet paid
KASUGA MARU N1 480 ORT f 0. 12.88 Sinking
hopan) Y 12 800 000(estimate)
Kyoga Misaki,
Ja pa n
(1 100)