Måns Jacobsson
Former Director,
International Oil Pollution
Compensation Funds
The International Regime for Compensation
for Tanker Oil Spills
Working Group on Integrated Maritime Policy
24 March 2011
International Compensation Regimes
Old Regime
1969 Civil Liability Convention
1971 Fund Convention
• 1971 Fund
New Regime
1992 Civil Liability Convention
1992 Fund Convention
• 1992 Fund
2003 Supplementary Fund Protocol
• Supplementary Fund
1
International Treaties
•
1992 Civil Liability Convention
123 States Parties
•
1992 Fund Convention
105 States Parties
•
2003 Protocol to 1992 Fund Convention
27 States Parties
1971 Fund Convention ceased to be in force on 24 may 2002
2
1992 Conventions Apply to
•
Pollution damage caused by
•
Spills of persistent oil from laden tankers
•
Bunker spills from unladen tankers with oil residues from previous voyage on board
3
The Three Tier System
3
Supplementary
Fund Protocol
Supplementary Fund
Oil receivers after
sea transport
1992 Fund
Oil receivers after
sea transport
Shipowners
Insurers
2
1992 Fund
Convention
1
1992 Civil Liability
Convention
4
Main Features under Civil Liability Convention
•
•
•
Strict liability of registered owner
Limitation of liability
Compulsory insurance
5
1992 Civil Liability Convention
Limits of Shipowner’s Liability
GT
SDR
US $
 5000
4 510 000
7 114 164
Per additional GT
up to 140 000
631
995
GT  140 000
89 770 000
141 604 993
6
The Fund Conventions
Applies:
•
•
•
Shipowner exempt
Shipowner financially incapable of meeting his obligations
Damage exceeds the shipowner’s liability limit
7
Exemptions
Shipowner exempt:
•
•
•
Damage resulted from an act of war,
hostilities, civil war, insurrection or a natural
phenomenon of an exceptional, inevitable
and irresistible character, or
Fund exempt:
•
Damage resulted from an act of war,
hostilities, civil war or insurrection
Damage was wholly caused intentionally by
a third party, or
Damage was wholly caused by negligence
of public authorities in maintaining
navigational aids.
8
Jurisdiction and Enforcement of Judgements
• Courts in the State where damage occurred have exclusive jurisdiction
• Judgements rendered by courts competent under the 1992 Conventions or
Supplementary Fund Protocol to be recognised and enforced in all States
Parties
Maximum Amount of Compensation
1992 CLC/Fund Conventions
203 million SDR (US$ 320 million)
2003 Supplementary Fund Protocol
750 million SDR (US$ 1 170 million)
10
Limits Laid Down in the Conventions
1992 CLC
$ (Millions)
1992 Fund
1 200
Supplementary Fund
1 000
800
600
400
200
0
0
20
40
60
80
100
120
140
160
Units of tonnage of ship
(In thousands of units)
11
Structure of 1992 Fund
Assembly
Executive
Committee
Secretariat
12
Who Contributes to the Fund?
•
•
•
•
Persons receiving >150 000 tonnes of contributing oil/year after sea transport
Contributing oil = crude oil and heavy fuel oil
Contributions decided by Fund Assembly
Oil receivers pay, not governments
13
1992 Fund: General Fund Contributions
Japan 17%
Others 26%
Italy 9%
Spain 4%
Rep. of Korea
8%
Singapore 5%
Canada 5%
United
Kingdom 5%
Netherlands 7%
India 7%
France 7%
14
Supplementary Fund
•
•
•
Supplementary Fund established in March 2005
Maximum compensation 750 million SDR (US$ 1 180 million), including amounts
payable under 1992 Conventions
Contributions to Supplementary Fund payable by oil receivers in Member States of that
Fund
15
Main Types of Damage
•
•
•
•
Property damage
Costs of clean-up operations and preventive measures
Losses in fishery, mariculture and tourism:
Environmental damage
16
Property Damage
•
•
•
•
Cleaning costs including costs of material and manpower
Replacement
Diminution of value
Loss / damage caused by clean–up operations
17
Common Problems as Regards at Sea Response
•
•
•
•
Excessive use of aircraft
for surveillance
Excessive use of oil
recovery vessels
Failure to recognise
limitations of response
techniques
Failure to monitor/control
operations
Hebei Spirit, December 2007
18
Common Problems as Regards Shoreline Clean-up
•
•
•
•
Excessive use of
manpower & equipment
Excessive volumes of oil
waste collected
Failure to monitor/control
operations
Failure to consider net
environmental and
economic benefits of
actions
Hebei Spirit, December 2007
19
Admissibility Criteria for Costs of Clean-up and
Preventive Measures
•
•
•
•
•
Expense must actually be incurred
Expense must be linked directly to the contamination
Response measures should be reasonable and justifiable
The costs incurred, and the relationship between these costs and the benefits
derived or expected must also be reasonable
Reasonableness is an objective technical criterion, not a political one
20
Impact on Fishing and Mariculture
•
•
•
•
•
•
Damage to fishing gear and consequential economic losses
Contamination of mariculture facilities (fish cages, shellfish rafts, onshore tanks and
ponds)
Contamination of captive stocks (tainting, mortality)
Fishing and harvesting bans
Supply shortages may affect related industries
Market effects
21
Economic Loss
•
To qualify for
compensation there must
be a sufficiently close link
of causation between the
contamination and the
loss
22
Environmental Damage
Admissible claims:
•
•
•
•
Economic losses which
can be quantified in
monetary terms
Costs of reasonable
measures to reinstate
contaminated environment
No compensation paid for
claims based on an
abstract quantification of
damage using theoretical
models
No punitive damages
23
Environmental Damage
Reinstatement of the environment
•
•
•
•
Clean-up
In order to qualify for compensation:
Sand replacement following clean-up
•
Replanting of mangrove saplings
Replanting of marsh vegetation
•
•
•
•
Measures should accelerate natural
recovery process
Measures should not cause further damage
Measures should not degrade other habitats
or adversely effect other natural economic
resources
Measures should be technically feasible
Costs should not be disproportionate to
extent and duration of damage and the likely
benefits
24
Uniform Application of the Conventions
•
•
•
•
Essential for the functioning of the regime
Equal treatment of claimants
Development of international law
United Nations Convention on the Law of the Sea Article 235
25
Conclusions
•
•
•
•
•
•
The international compensation regime under 1992 Conventions has in
general worked well
Continuous increase in Member States
140 incidents in 32 years
US$ 950 million paid to victims
Used as model in other fields
Reviewed to ensure it meets the needs of society in the 21st century
26