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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. Måns Jacobsson Former Director, International Oil Pollution Compensation Funds. International Compensation Regimes. 1969 Civil Liability Convention 1971 Fund Convention

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Måns Jacobsson Former Director, International Oil Pollution Compensation Funds

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  1. The International Regime for Compensation for Tanker Oil Spills Working Group on Integrated Maritime Policy 24 March 2011 MånsJacobsson Former Director,International Oil Pollution Compensation Funds

  2. International Compensation Regimes 1969 Civil Liability Convention1971 Fund Convention • 1971 Fund Old Regime New Regime 1992 Civil Liability Convention1992 Fund Convention • 1992 Fund 2003 Supplementary Fund Protocol • Supplementary Fund

  3. International Treaties • 1992 Civil Liability Convention123 States Parties • 1992 Fund Convention105 States Parties • 2003 Protocol to 1992 Fund Convention27 States Parties 1971 Fund Convention ceased to be in force on 24 may 2002

  4. 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

  5. The Three Tier System 3 Supplementary Fund Oil receivers aftersea transport Supplementary Fund Protocol 2 1992 Fund Oil receivers aftersea transport 1992 Fund Convention 1 Shipowners Insurers 1992 Civil Liability Convention

  6. Main Features under Civil Liability Convention • Strict liability of registered owner • Limitation of liability • Compulsory insurance

  7. 1992 Civil Liability ConventionLimits of Shipowner’s Liability

  8. The Fund Conventions Applies: • Shipowner exempt • Shipowner financially incapable of meeting his obligations • Damage exceeds the shipowner’s liability limit

  9. Exemptions Shipowner exempt: Fundexempt: Damage resulted from an act of war, hostilities, civil war or insurrection • Damage resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or • Damage was wholly caused intentionally by a third party, or • Damage was wholly caused by negligence of public authorities in maintaining navigational aids.

  10. 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

  11. Maximum Amount of Compensation 1992 CLC/Fund Conventions203 million SDR (US$ 320 million) 2003 Supplementary Fund Protocol750 million SDR (US$ 1 170 million)

  12. Limits Laid Down in the Conventions

  13. Structure of 1992 Fund Assembly ExecutiveCommittee Secretariat

  14. 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

  15. 1992 Fund: General Fund Contributions

  16. 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

  17. Main Types of Damage • Property damage • Costs of clean-up operations and preventive measures • Losses in fishery, mariculture and tourism: • Environmental damage

  18. Property Damage • Cleaning costs including costs of material and manpower • Replacement • Diminution of value • Loss / damage caused by clean–up operations

  19. 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

  20. 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

  21. 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

  22. 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

  23. Economic Loss • To qualify for compensation there must be a sufficiently close link of causation between the contamination and the loss

  24. 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

  25. Environmental Damage Reinstatement of the environment In order to qualify for compensation: Measures should accelerate natural recovery process Measures should not cause further damage Measures should not degrade other habitats or adversely effect other natural economic resources Measures should be technically feasible Costs should not be disproportionate to extent and duration of damage and the likely benefits • Clean-up • Sand replacement following clean-up • Replanting of mangrove saplings • Replanting of marsh vegetation

  26. 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

  27. 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

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