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Effective 1
November 2003, the limits of liability and compensation under the 1992 Civil
Liability Convention (CLC) and the 1992 Fund Convention (FC) has been
increased by some 50.37 per cent, resulting in a total of some US$291
million being available for each incident.
The new limit issued by the International Maritime Organisation followed the
result of some major incidents in the 1990s - the Nakhodka in Japan and the
Erika in France - prompting a number of countries to consider that the
limits of liability and compensation under the 1992 CLC and the 1992 FC were
inadequate.
The ship owner is normally entitled to limit his liability to an amount,
which is linked to the tonnage of the ship.
The 1992 CLC Protocol has been ratified by 93 countries, representing 91.54
per cent of world merchant shipping tonnage.
The 1992 Fund Protocol has been ratified by 86 states, representing 87.18
per cent of world merchant shipping tonnage.
Malaysia is the member of the 1969 Civil Liability Convention.
In October 2000, the legal Committee of the International Maritime
Organization considered a proposal by a number of states to increase the
limits of liability and compensation under the 1992 CLC and the 1992 FC by
using the special procedure laid down in the conventions.
The IPOC fund committee met end of last month adopted two resolutions
increasing the limits contained in the conventions by some 50.37 per cent.
The amendments entered into force on 1 November 2003.
The CLC makes the ship owner strictly liable for damage suffered as a result
of a pollution incident and the amendments raise the limits payable to 89.77
million Special Drawing Rights (SDR) or approximately US$127 million for a
ship over 140,000 gross tonnage, up from 59.7 million SDR (US$85 million)
established in the 1992 Protocol.
The IOPC Fund amendments raise the maximum amount of compensation payable
from the IOPC Fund for a single incident, including the limit established
under the CLC amendments, to 203 million SDR (US$289 million), up from 135
million SDR (US$192 million).
However, if three states contributing to the fund receive more than 600
million tonnes of oil per annum, the maximum amount is raised to 300.74
million SDR (US$428 million), up from 200 million SDR (US$285million).
While the CLC regulates the ship owner's liability, the fund is made up of
contributions from oil importers. The principle is that if an accident at
sea results in pollution damage, which exceeds the compensation available
under the CLC, the fund will be available to pay an additional amount.
In this way, the regime established by the two treaties ensures that the
burden of compensation is spread more evenly between ship owner and cargo
interests.
The amendment to the 1992 FC will bring the total amount available under the
1992 conventions for incidents occurring from 1 November 2003 to 203 million
SDR (US$291 million).
In addition to that the IMO adopted a protocol establishing an international
oil pollution compensation supplementary fund in its May 2003 sitting.
The additional compensation is likely to be available in future for victims
of oil pollution from oil tanker accidents, following the adoption of a
Protocol establishing an International Oil Pollution Compensation
Supplementary Fund.
The aim of the Supplementary Fund is to supplement the compensation
available under the 1992 Civil Liability and Fund Conventions with an
additional third tier of compensation.
Membership of the Supplementary Fund is optional and any state, which is a
member of the 1992 Fund, may join the Supplementary Fund.
The total amount of compensation payable for any one incident will be 750
million SDR (just over US$1 000 million), including the amount payable under
the existing Civil Liability and Fund Conventions.
The Protocol will enter into force three months after it has been ratified
by at least eight states, which have received a combined total of 450
million tons of contributing oil in a calendar year. The supplementary fund
will only pay compensation for pollution damage in states, which are members
of the supplementary fund for incidents, which occur after the Protocol has
entered into force. |
