maritime pollution by ship

Maritime Pollution by ShipsA Guide to the International Conventions Applicable

to an Incident Involving Pollution by a Ship

www.htd-law.com

Shipping At A Glance Guide: 5

Hill Taylor Dickinson2nd Edition, July 2003

Whilst care has been taken in the preparation of this guide, the matters referred to herein are subject to change and no liability or responsibilityis accepted by anyone for any errors or omissions that may exist in it.

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ContentsSection: Page No.

Introduction 2

A Preventing pollution from ships

I - MARPOL 73/78 3

II - SOLAS 74/78 4

B Response to an incident involving pollution or risk of pollution

I - Intervention Convention 1969 5

II - Intervention Protocol 1973 5

III - OPRC Convention 1990 6

IV - OPRC-HNS Protocol 2000 7

C Compensation for damage suffered as a result of pollution from ships

I - Civil Liability Convention 1969 7

II - Civil Liability Convention Protocol 1976 7

III - Fund Convention 1971 7

IV - Fund Convention Protocol 1976 7

V - Civil Liability Convention 1992 7

VI - Fund Convention 1992 8

VII - Fund Convention 1992 Protocol of 2003 9

VIII - Bunker Convention 2001 10

IX - Hazardous & Noxious Substances Convention 1996 11

X - Nuclear Convention 1971 11

Table I Member States of the Conventions relating to pollution from ships 12

Table II Pollution Liability Conventions Summary of Provisions 18

Figure I Compensation Limits Under the Pollution Liability Conventions 22

Marine Pollution by Ships

2Introduction

History has shown that the environmental, political, financial and legal consequences of a pollution

incident at sea can be enormous. Ships carrying ever larger quantities of oil (and more recently gas,

chemicals and other hazardous and noxious substances) and the casualties that followed, together

with the increased awareness of the need to protect the environment, have been the impetus for

the international community (under the auspices of the International Maritime Organisation) to

conclude international treaties relating to marine pollution from ships. These fall into three

broad categories:

A. Preventing pollution from ships

B. Response to an incident involving pollution or risk of pollution

C. Compensation for damage suffered as a result of pollution from ships

Table I of this guide lists the principal maritime States and the pollution related International

Conventions to which each is a party. The general obligation upon States to adopt laws and

regulations for the prevention, reduction and control of marine pollution from ships arises from

the United Nations Convention on the Law of the Sea, 1982 (UNCLOS 82).

In this guide the pollution related Conventions are grouped in the above categories and looked at

in overview in the sections that follow. Category A - Preventing pollution from ships, is a vast and

highly technical subject to which full justice cannot be done in a guide such as this. It is touched

upon only briefly with the emphasis being placed upon the latter two categories, B and C. These are

the aspects that take on particular importance following a major pollution incident. This guide

only considers international pollution related Conventions. The definitive source of law to be

referred to in a particular pollution related incident, is the national law of the State(s) affected by

the incident. If a State is a party to any of the pollution Conventions, it is the national law of that

State which implements them, sometimes introducing variations from the Convention provisions.

Where a State is not a party to a pollution Convention which would otherwise be relevant to a

particular incident, or the incident does not fall within the applicable criteria of any particular

Convention, recourse must again be made to national law to ascertain what legal regime applies.

Whilst the United States Oil Pollution Act 1990 (OPA 90) is an extremely important marine pollution

development, it is a national law and so falls outside the scope of this guide.

This guide is not concerned with criminal liability. The International Conventions are often used as

the basis for criminal liability (for example, failure to comply with the requirements of MARPOL),

but it is national law that determines the applicable sanctions.

3Marine Pollution by Ships

A. Preventing pollution from ships

I. MARPOL 73/78 - International Convention for the Prevention of Pollution from Ships, 1973 as

modified by the Protocol of 1978 - entered into force (including Annex I) on 2nd October 1983.

MARPOL 73/78 applies to ships registered in a contracting State and places obligations

upon the State to prohibit and apply sanctions for violations of its provisions. It covers

certification, detection of violations and enforcement against any ship of a contracting

State, reporting of pollution incidents, investigation and communication of information.

The detailed provisions of MARPOL are set out in the six Annexes. Annexes I and II are

obligatory for contracting States but Annexes III to VI are optional. The Annexes set out

detailed provisions relating to such matters as: application; survey and inspection;

certificates; technical measures for controlling operational pollution including geographical

and quantitative restrictions on operational discharges, retention on board and shore

reception facilities, ship construction, equipment and procedures; minimising pollution

from damaged ships; emergency plans; and record books. The Annexes cover:

Annex I Regulations for the Prevention of Pollution by Oil

Annex II Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk

- entered into force on 6th April 1987

Annex III Regulations for the Prevention of Pollution by Harmful Substances Carried

by Sea in Packaged Form - entered into force on 1st July 1992

Annex IV Regulations for the Prevention of Pollution by Sewage from Ships

- enters into force on 27 September 2003

Annex V Regulations for the Prevention of Pollution by Garbage from Ships

- entered into force on 31st December 1988

Annex VI Regulations for the Prevention of Air Pollution by Ships - adopted by a

Protocol to MARPOL 73/78 in September 1997 - not yet in force

4II. SOLAS 74/78 - International Convention for the Safety of Life at Sea, 1974 as modified by

the Protocol of 1978 - entered into force on 25th May 1980 and the Protocol on 1st May 1981.

SOLAS covers general provisions and detailed technical requirements related to safety of

life, and therefore ships, at sea. Safer ships will, over time, cause less pollution. Provisions

relate to: stability, ship construction; machinery; fire regulations; radio communications;

procedures; certification; and inspection. SOLAS includes detailed provisions applicable to

oil tankers.

SOLAS Chapter VII (Carriage of dangerous goods) deals with carriage of dangerous goods

in packaged form or in solid bulk form and applies mandatory provisions in respect of:

ships carrying dangerous chemicals in bulk (IBC Code)

ships carrying liquefied gases in bulk (IGC Code) (also mandatory under MARPOL)

ships carrying irradiated nuclear fuels, plutonium and high level radio active waste

(INF Code) - became mandatory on 1st January 2001

the International Maritime Dangerous Goods Code (IMDG Code) - becomes mandatory on

1st January 2004 but contracting States may apply the Code voluntarily from 1st January 2003

SOLAS Chapter IX makes mandatory the application of the International Management

Code for the Safe Operation of Ships and for Pollution Prevention (the International Safety

Management or ISM Code). Safety management systems must be run on those ships to

which ISM applies. This includes establishing an environmental protection policy and

having instructions and procedures to ensure protection of the environment in compliance

with international and Flag State legislation - since 1st July 2002 the ISM Code has applied

to all categories of internationally trading commercial ships.


B. Response to an incident involving pollution or risk of pollution

I. Intervention Convention 1969 - International Convention Relating to Intervention on the

High Seas in cases of Oil Pollution Casualties, 1969 - entered into force on 6th May 1975.

Permits (but does not oblige) contracting States to take such measures on the high seas

as are reasonably necessary and proportionate to prevent, mitigate or eliminate grave and

imminent danger to their coastline or related interests from pollution or threat of

pollution of the sea by oil, following a maritime casualty which results in material damage

or imminent threat of material damage to a ship or cargo.

Applies to sea-going vessels and floating craft of any type whatsoever except warships or

government owned non-commercial vessels and vessels engaged in sea bed exploration

or exploitation. Oil means crude, diesel, fuel and lubricating oil.

Except in cases of extreme urgency, before taking any measures, a contracting State must

consult with other States affected by the measures and notify all known interests likely to

be affected. Before any measure is taken, the contracting State may consult with

independent experts chosen from a list maintained by IMO.

Any contracting State which by taking measures in contravention of the Convention

provisions causes damage to others, is obliged to pay compensation to the extent of the

damage caused by measures which exceed those reasonably necessary to achieve the

aims set out in the Convention. The Convention provides for arbitration of disputes.

II. Intervention Protocol 1973 - Protocol Relating to Intervention on the High Seas in Cases of

Pollution by Substances other than Oil, 1973 - entered into force on 30th March 1983.

Same provisions as Intervention 69 but covers relevant pollution or threat of pollution

by substances other than oil. These are substances as listed in the Annex to the

convention (broadly various oil based substances and liquid gases when carried in bulk,

noxious substance and radioactive substances) and other substances liable to create

hazards to human health or marine life, amenities or resources.

6III. OPRC Convention 1990 - International Convention on Oil Pollution Preparedness, Response

and Co-operation, 1990 - entered into force 13th May 1995.

Obliges contracting States to, individually or jointly, take all appropriate measures to

prepare for and respond to an oil pollution incident.

Oil means petroleum in any form including crude oil, fuel oil, sludge, oil refuse and

refined products. An oil pollution incident is an occurrence which results or may result

in a discharge of oil which poses a threat to the environment, or to the coastline or related

interests which requires emergency action or other immediate response.

All ships (includes vessels and floating craft of any type whatsoever) of a contracting

State must have shipboard oil pollution emergency plans. Offshore units, sea ports and

oil handling facilities require similar plans but these must be co-ordinated with a national

system for responding promptly and effectively to an incident.

The national system must, as a minimum, include: a national contingency plan; designation

of a competent national authority; a contact point for reports; and an authority entitled

to act on behalf of the State to request or render assistance. Additionally, whether

individually or with other States, a contracting State must establish: minimum levels of

pre-positioned oil spill combating equipment; a programme of response exercises; detailed

response plans; and a mechanism to co-ordinate response. Each contracting State is to

provide relevant information to IMO who are responsible for collating and disseminating

that information.

Contracting States are obliged to require their own Flag State ships to report to the

nearest coastal State all incidents involving sighting of oil or discharge of oil, whether

from their ship or otherwise. Similar obligations apply in relation to offshore units, sea

ports, oil handling facilities and civil aircraft.

The Convention encourages co-operation between States in regard to: requesting and

rendering assistance; research and development; technical co-operation; and training.

It also sets out provisions for financing international assistance.


IV. OPRC-HNS Protocol 2000 - Protocol on Preparedness, Response and Co-operation to

Pollution Incidents by Hazardous and Noxious Substances, 2000 - not yet in force

Follows the principles of OPRC 90 and extends the scope of the convention to cover

pollution incidents involving hazardous and noxious substances.

C. Compensation for damage suffered as a result of pollution from ships

I. Civil Liability Convention 1969 - International Convention on Civil Liability for Oil Pollution

Damage, 1969 - entered into force on 19th June 1975.

II. Civil Liability Convention Protocol 1976 - Protocol to International Convention on Civil

Liability for Oil Pollution Damage, 1976 - entered into force on 8th April 1981.

III. Fund Convention 1971 - International Convention on the Establishment of an International

Fund for Compensation for Oil Pollution Damage, 1971 - entered into force 16th October

1978, ceased to be in force 24th May 2002.

IV. Fund Convention Protocol 1976 - Protocol to International Convention on the Establishment

of an International Fund for Compensation for Oil Pollution Damage, 1976 - entered into

force on 22nd November 1994, ceased to be in force 24th May 2002.

V. Civil Liability Convention 1992 - International Convention on Civil Liability for Oil Pollution

Damage, 1992 - entered into force on 30th May 1996

IMOs Legal Committee adopted an amendment in October 2000 to revise limits of

compensation upwards by about 50% - expected to enter into force on 1st November 2003.

8VI. Fund Convention 1992 - International Convention on the Establishment of an International

Fund for Compensation for Oil Pollution Damage, 1992 - entered into force on 30th May 1996.

IMOs Legal Committee adopted an amendment in October 2000 to revise limits of

compensation upwards by about 50% - expected to enter into force on 1st November 2003.

Historically, the problems faced by persons seeking to recover compensation for damage

suffered as a result of a pollution incident at sea have been:

Who to claim against

Where to bring a claim

The burden of having to prove fault

Inability of the party at fault to pay compensation particularly if the shipowners

main asset, the ship, has been lost

The above conventions address these problems in a double layer system of compensation.

The first layer, the CLC conventions, provide for strict liability of the shipowner (but see

defences referred to in Table II), up to an amount determined by the size of the ship

involved, subject to a fixed ceiling. Shipowners liabilities must be insured and claimants

are able to proceed directly against the insurer (usually the ships P&I club). Claims are

brought in the jurisdiction where the damage is suffered.

Where claimants are unable to claim against the shipowner under the CLC Conventions

(see defences referred to in Table II) or the shipowners limit of liability under the CLC

Conventions is not sufficient to satisfy all claims, a further layer of compensation is

available under the Fund Conventions, payable by the International Oil Pollution

Compensation (IOPC) Funds. These Funds are financed through contributions made by the

oil importers of contracting States.

Following the introduction of CLC 92 and Fund 92, contracting States of the Original

Conventions (CLC 69 and Fund 71) were encouraged to denounce membership in favour of

the new Conventions. Owing to the diminishing number of members, Fund 71 ceased to be

in force on 24th May 2002. No new claims can be made against the 1971 Fund in respect

of incidents occurring after 24th May 2002. After claims that arose from incidents

occurring before that date have been resolved, the 1971 Fund will be wound up. Claimants

in States which remain contracted only to CLC 69 will no longer have access to a second

layer of compensation.


A summary of the pollution compensation convention provisions is set out in Table II.

Fund 71 and Fund Protocol 1976 are not included as they no longer apply to incidents

occurring after 24th May 2002. Figure I is a diagrammatic representation of the maximum

limits of compensation available under the conventions.

CLC Protocol 76 amended the unit of account in CLC 69 from the Gold Franc to the Special

Drawing Right (SDR). At the time of publication of this guide (June 2003) SDR 1.00 is

equivalent to about US$ 1.42.

CLC and Fund 92 (often referred to as protocols to the original CLC and Fund conventions)

are related conventions. A Party to Fund 92 must also be a Party to CLC 92 but not vice versa.

In October 2000, the Legal Committee of the IMO adopted amendments to raise the limits

of compensation available under CLC 92 and Fund 92 by about 50 percent. These

amendments are expected to enter into force on 1st November 2003.

VII. Fund Convention 1992 - Protocol of 2003 - Protocol of 2003 to the International

Convention on the Establishment of an International Fund for Compensation for Oil

Pollution Damage, 1992 - not yet in force.

At a Diplomatic Conference held in May 2003, IMO adopted an optional Protocol to Fund

92 which, once it enters into force, will establish a Supplementary Fund to provide

compensation over and above that available under CLC 92 and Fund 92 (i.e. a third layer

of compensation).

Compensation will only be available from the Supplementary Fund in those States that

ratify the Protocol and only to the extent that established pollution damage claims are not

compensated fully under Fund 92 because the total pollution damage exceeds, or there is

a risk that it will exceed, the limit available under Fund 92 in respect of any one incident.

A summary of the Convention provisions is included in Table II.

The Supplementary Fund is financed solely through contributions made by oil importers

in contracting States. Where the amount of contributing oil received in a contracting

State is less than the deemed minimum receipt of 1 million tons, the contracting State

assumes the obligation to contribute in respect of the shortfall.

An underlying principle of the pollution compensation regimes has always been that the

cost should be shared equally between the oil industry and the shipping industry. Up until

10

now, the CLC and Fund Conventions have broadly achieved that aim. It is recognised that

the adoption of Fund Protocol 2003 is likely to upset that balance as only the oil industry

contribute to the Supplementary Fund. An IOPC Working Group is assessing the adequacy

of the international compensation system including this aspect. There are two principle

proposals before the Working Group aimed at redressing the balance:

Shipowners organisations and the International Group of P&I clubs propose a voluntary

increase in the limits of liability for small ships under CLC 92. This would only apply in

those States that ratify Fund Protocol 2003 and would increase the minimum liability of a

shipowner from SDR 4.51 million (minimum limit applying from 1st November 2003) to

a proposed SDR 20 million (US$ 28.4 million).

The Oil Industry propose amending CLC 92 to abandon tonnage related limitation in favour

of a fixed limitation figure for all ships of SDR 90 million (US$ 127.8 million). The oil

industry argues that ship size is not related to the amount of damage that can be caused

ERIKA and PRESTIGE are examples of relatively small ships causing massive damage.

At a meeting in February 2003, the Working Group agreed to review all the proposals once the

Director of the IOPC Funds had undertaken an independent study of the costs of past spills to see

how the burden had been shared in the past and how this would be affected by the various proposals.

VIII. Bunker Convention 2001 - International Convention on Civil Liability for Bunker Oil

Pollution Damage, 2001 - not yet in force.

Pollution damage caused by bunkers is excluded from HNS 96 and only covered by the CLC and

Fund Conventions in limited circumstances (under CLC 69 when the ship is also carrying oil in

bulk as cargo and under CLC 92 when the ship is capable of carrying oil in bulk as cargo).

Bunker 2001 operates independently of the other pollution liability regimes although it

incorporates many of the principles found in CLC 92 and HNS 96. It applies to all ships

whose bunkers cause pollution damage (other than those covered by CLC) in the territory,

territorial waters or EEZ of a contracting State.

Bunker pollution damage claims must be brought in the contracting State where the

pollution damage occurs. Rather than separate layers of compensation being available to

satisfy bunker pollution damage claims exclusively, such claims rank equally with all

other third party claims against the shipowner (e.g. collision damage claims). The shipowner

(as defined) retains the right to limit liability against all claims arising on any distinct

occasion under the national or international limitation regime applying in the State

11


(e.g. 1976 Convention on Limitation of Liability for Maritime Claims - LLMC 76). Shipowners

may not be able to limit against some categories of bunker pollution claims - e.g. non-

physical damage claims such as economic loss arising from business disruption.

The shipowner must have insurance or other financial security to cover his liabilities

under Bunker 2001 but only up to the limit determined under the applicable national or

international limitation regime (but which need not exceed the limit determined under

LLMC 76 as amended). Claimants can claim directly against the insurer who has the same

defences as the shipowner. A summary of the convention provisions is included in Table II.

IX. Hazardous & Noxious Substances Convention 1996 - International Convention on Liability and

Compensation for Damage in Connection with the Carriage of Hazardous and Noxious

Substances by Sea, 1996 - not yet in force.

A summary of the provisions of this convention are also set out in Table II. It incorporates

the strict liability, layered compensation principles of both the CLC and Fund

conventions, including compulsory insurance and the right of claimants to proceed

directly against the insurer. The Convention applies to damage caused by hazardous

and noxious substances but excludes pollution damage caused by oil as defined in the

CLC Conventions.

X. Nuclear Convention 1971 - Convention Relating to Civil Liability in the Field of Maritime

Carriage of Nuclear Materials, 1971 - entered into force on 15th July 1975.

Liability for nuclear accidents generally, is covered by a number of international conventions

including the Paris Convention on Third Party Liability in the Field of Nuclear Energy, 1960

(Paris Nuclear 60) and the Vienna Convention on Civil Liability for Nuclear Damage, 1963

(Vienna Nuclear 63). Under these conventions the person liable to compensate for damage

caused by nuclear materials during carriage (including personal injury, loss of life and

property damage) is the operator of either the nuclear installation from where the

material originated or to where it was destined (as determined by the Conventions).

Nuclear 71 confirms that where damage is caused by nuclear materials and the operator

of a nuclear installation would be liable under the Paris or Vienna Conventions or similar

national laws, any other person who might otherwise incur liability under international

Conventions or national laws in the field of maritime carriage are exonerated from such

liability (e.g. the owner of the ship carrying such material), except where such person has

caused the damage by an act or omission done with intent to cause damage.

Table I Member States of the Conventions relating to pollution from ships

Albania

Algeria

Andorra

Angola

Antigua & Barbuda

Argentina

Armenia

Australia

Austria

Azerbaijan

Bahamas

Bahrain

Bangladesh

Barbados

Belarus

Belgium

Belize

Benin

Bolivia

Bosnia & Herzegovina

Brazil

Brunei Darussalam

Bulgaria

Cambodia

Cameroon

Canada

MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71

A - Preventing Pollution from ShipsB - Response to anIncident involvingRisk of Pollution

C - Compensation for Damage suffered by Pollution from Ships

12

Cape Verde

Chile

China

Colombia

Comoros

Congo

Congo (Dem. Rep. Of)

Cook Islands

Costa Rica

Croatia

Cuba

Cyprus

Czech Republic

Denmark

Djibouti

Dominica

Dominican Republic

Ecuador

Egypt

El Salvador

Equatorial Guinea

Eritrea

Estonia

Ethiopia

Fiji

Finland

France

Gabon

Gambia

Georgia

Germany

Ghana

MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71




13

1 1

5 5

MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71


C - Compensation for Damage suffered byPollution from Ships

Greece

Grenada

Guatemala

Guinea

Guinea-Bissau

Guyana

Haiti

Honduras

Hong Kong, China

Hungary

Iceland

India

Indonesia

Iran

Iraq

Ireland

Israel

Italy

Ivory Coast

Jamaica

Japan

Jordan

Kazakhstan

Kenya

Kiribati

Korea (North)

Korea (Dem. Rep. of)

Kuwait

Latvia

Lebanon

Lesotho

Liberia

14

2

6

2


MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71



Libya

Lithuania

Luxembourg

Madagascar

Malawi

Malaysia

Maldives

Malta

Marshall Islands

Mauritania

Mauritius

Mexico

Moldova (Rep. Of)

Monaco

Mongolia

Morocco

Mozambique

Myanmar

Namibia

Nauru

Netherlands

New Zealand

Nicaragua

Nigeria

Norway

Oman

Pakistan

Palau

Panama

Papua New Guinea

Peru

Philippines

15

4 4

Poland

Portugal

Qatar

Romania

Russian Federation

Samoa

Sao Tome & Principe

Saudi Arabia

Senegal

Seychelles

Sierra Leone

Singapore

Slovakia

Slovenia

Solomon Islands

Somalia

South Africa

Spain

Sri Lanka

St Kitts and Nevis

St Lucia

St.Vinc'nt & Gren'dines

Sudan

Suriname

Sweden

Switzerland

Syrian Arab Republic

Tanzania (Untd. Rep. Of)

Thailand

Togo

Tonga

Trinidad & Tobago

MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71



16

6

3 3


MAR

POL

73/7

8

MAR

POL

Anne

x II

I

MAR

POL

Anne

x IV

MAR

POL

Anne

x V

MAR

POL

Anne

x VI

SOLA

S 74

SOLA

S Pr

otoc

ol 7

8

Inte

rven

tion

69

Inte

rven

tion

73

OP

RC 9

0

OP

RC-H

NS

2000

CLC

69

CLC

Prot

ocol

76

Fund

71*

Fund

Pro

toco

l 76

*

CLC

92

Fund

92

Fund

Pro

toco

l 03

Bu

nke

r 20

01

HN

S 96

Nuc

lear

71



Tunisia

Turkey

Tuvalu

Ukraine

United Arab Emirates

United Kingdom

United States

Uruguay

Vanuatu

Venezuela

Vietnam

Yemen

Yugoslavia

Key -

- In force

1 - Enters into force 7 August 2003

2 - Enters into force 2 October 2003

3 - Enters into force 19 November 2003

4 - Enters into force 18 December 2003

5 - Enters into force 3 February 2004

6 - Provisional

* - Fund 71 and Fund Protocol 76 ceased to be in force on 24th May 2002

17

Table II Pollution Liability Conventions- Summary

CLC 69(entered intoforce on 19th

June 1975)

Applicable Claims

Loss or damagecaused bycontaminationresulting fromescape ordischarge of'oil' from the'ship', whereversuch escape ordischarge occurs;the cost ofpreventativemeasures andfurther loss ordamage causedby such measures- Art I.6; Art III.1

CLC Protocol 76(entered intoforce on 8thApril 1981)


May 1996)

Fund 92(entered intoforce on 30th

May 1996)

Fund Protocol 03(not yet in force)

HNS 96(not yet in force)

As per CLC 92 tothe extent thatclaims have not been fullycompensatedunder CLC 92because: noliability arisesunder CLC 92;owner isincapable ofmeeting hisobligationsunder CLC 92;or damageexceeds owner'sCLC 92 limit ofliability - Art 4.1

As per Fund 92to the extentthat establishedclaims have notbeen fullycompensatedunder Fund 92because totalpollution damageexceeds, or isexpected toexceed, the Fund92 limit - Art 4.1

"As per CLC 69except 'oil'replaced by'bunker oil' - Art 1.9Claims fallingwithin the scopeof CLC 92 areexcluded - Art4.1"

HNS damage:loss of life orpersonal injuryeven on carryingship; loss ordamage toproperty or theenvironment;cost ofpreventativemeasures andloss or damageresulting fromsuch measures.Excluded:contract ofcarriage claims;those subject toCLC; radioactivematerial claims -Art 1.6, 4.1 & 4.3

Territorial Apllication

Pollution damagecaused in theterritory andterritorial sea of a contractingState andpreventativemeasures (inpractice wherevertaken) - Art II

As per CLC 69 but additionally:pollutiondamage causedin the exclusiveeconomic zoneof a contractingstate andpreventativemeasureswherever taken -Art II

As per CLC 92 - Art 3



18

Bunker 2001(not yet in force)

Liability Convention

As per CLC 69

All claims withinthe territory andterritorial sea ofa contractingState;contamination ofthe environmentwithin the EEZ; damage,other thancontamination ofthe environment,wherever causedif ship isregistered in acontracting State;preventativemeasureswherever taken -Art 3


ApplicableSubstances

'Oil' defined as - Persistent oilsuch as crudeoil, fuel oil,heavy diesel oil,lubricating oiland whale oil,whether carriedas cargo orbunkers - Art I.5

As per CLC 69except appliesonly topersistenthydrocarbonmineral oil(excludes whale oil) - Art I.5

As per CLC 92 - Art 1.2



'Bunker oil'defined as anyhydrocarbonmineral oilincludinglubricating oil,used orintended to beused for theoperation orpropulsion ofthe ship, andany residues ofsuch oil - Art 5.1

Hazardous &noxioussubstances are:bulk liquidcargoes of: oil ornoxioussubstances (perMARPOL);dangerous (IBCCode); liquifiedgases (IGC Code);flashpoint 60Cor less. Ifcovered by IMDGCode: solid bulk(BC Code) &packagedcargoes - Art 1.5

ApplicableShips

Any sea-goingvessel or sea-borne craftactually carrying'oil' in bulk ascargo - Art I.1.Does not applyto warships andGovernmentowned oroperated non-commercialships - Art XI


"Any sea-goingvessel and sea-borne craft, of any typewhatsoever - Art 1.1. Does not applyto warships andGovernmentowned non-commercialships unlessspecificallydeclared bycontracting State- Art 4.2 & 4.3"

"Any sea-goingvessel and sea-borne craft, of any typewhatsoever - Art 1.1. Does not applyto warships and Governmentowned non-commercialships unlessspecificallydeclared bycontracting State- Art 4.4 & 4.5"

LiableParty

The InternationalOil PollutionCompensationFund 1992 (IOPC92 Fund) - Art2.1; Art 4.1

The InternationalOil PollutionCompensationSupplementaryFund 2003 (TheSupplementaryFund) Art 4.1

The shipowner -defined as theowner, includingregisteredowner, bareboatcharterer,manager andoperator of theship, liablejointly andseverally - Art 1.3, Art 3.1,Art 3.2. Where two ormore shipsinvolved, as perCLC 69 - Art 5

The owner - Art7.1, 1.3 or ifdamage resultsfrom an incidentinvolving two ormore shipscarrying HNS,the owners of allships jointly &severally fordamage notreasonablyseperable - Art 8and/or TheInternationalHNS Fund (HNSFund) - Art 13

Any sea-goingvessel or sea-borne craftcapable ofcarrying oil inbulk as cargo.Combinationcarriers musthave a bulk oilcargo on boardor residues - Art I.1. Doesnot apply towarships andGovernmentowned oroperated non-commercialships - Art XI

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May 1996)


May 1996)





The owner(person(s)registered as theowner of theship) - Art III.1;Art I.2 & I.3 or,if pollutiondamage resultsfrom an incidentinvolving two ormore ships, theowners of allships are liablejointly andseverally ifdamage is notreasonablyseparable - Art IV

Owner's limit ofliability is 2,000francs per ton ofthe ship'stonnage up to amaximum of 210million francs -Art V.1

Owner's limit ofliability is 3million SDRs forships notexceeding 5,000gross tons; forlarger ships anadditional 420SDRs per ton inexcess thereof,up to amaximum limitof 59.7 millionSDRs - Art V.1Amended limitsapply as of 1stNovember 2003 -see remarks

Maximumobligation of theIOPC 92 Fund foran incident is 135 million SDRsless the totalcompensationactually paidunder CLC 92 fordamage withinthe scope ofFund 92. Thiscan increase to200 million SDRsif certainconditions exist -Art 4.4.Amended limitsapply as of 1stNovember 2003- see remarks

Maximumobligation of theSupplementaryFund for anincident is 750million SDRs less the totalcompensationactually paidunder CLC 92and Fund 92within the scopeof Fund Protocol03 - Art 4.2

No limits set bythe Convention.The Conventiondoes not affectthe right of theshipowner andprovider ofinsurance orother financialsecurity to limittheir liability forbunker relatedclaims that fallwithin anyapplicable nationalor internationallimitation regimee.g. Conventionon Limitation ofLiability forMaritime Claims1976 (LLMC 76) - Art 6

Owner's limit ofliability is 10million SDRs forships up to2,000 tons,1,500 SDRs foreach extra tonup to 50,000tons and 360SDRs for eachton thereafter upto a maximumof 100 millionSDRs - Art 9.HNS Fund'smaximumobligation is 250million SDRs - Art 14.5

Limits ofLiability/Obligation

CLC 69 limitsamended to 133SDRs per ton upto maximum 14million SDR

Restrictionson claims

Claims againstowner allowedonly under theconvention, inthe jurisdictionwhere damageoccurs. Noclaims allowedagainst owner'sservants oragents,otherwise claimsagainst thirdpartiesunrestricted,including claimsby owner - ArtIII.4; Art IX

As per CLC 69.Additionally, noclaims allowedagainst the ship'spilot, charterer,manager oroperator or anypersonperformingsalvageoperations ortakingpreventativemeasures, unlessthe damageresulted fromtheir personalact or omission -Art III.4

Claims againstthe IOPC 92Fund can onlybe brought inthe appropriatejurisdiction forclaims againstthe owner underCLC 92 - Art 9.The IOPC 92Fund is notrestricted on itsright of recourseor subrogationagainst thirdparties - Art 11.2

Claims againstthe IOPC 92 Fundare consideredclaims againstthe SupplementaryFund. Claims canonly be brought inthe jurisdictionestablished forclaims againstthe owner underCLC 92. If not acontracting Stateto Fund Protocol03 any otherappropriatejurisdiction forclaims under CLC92 or in the State of theSupplementaryFund headquarters- Art 7

Claims againstshipownerallowed onlyunder theconvention, inthe jurisdictionwhere damageoccurs - Art 3.5,Art 9.1. Right toclaim againstthird parties (e.g. shipowner'sservants oragents, pilots, orpersonsperformingsalvageoperations)unrestricted,including claimsby shipowner -Art 3.6.

Claims againstowner restrictedas per CLC 92except can bebrought in otherjurisdictions ifthe damagearisesexclusivelyoutside theterritory orterritorial sea ofa contractingState - Art38.1/2. HNSFund is liable tothe extentclaims notrecovered fromowners - Art14.1

20


June 1975)



May 1996)


May 1996)





Defences As per CLC 69 Damage causedby: act of war orinsurrection; actor omissiondone with intentto cause damageby personsufferingdamage or fromtheir negligence;claimant cannotprove thatdamage resultedfrom incidentinvolving one ormore ships - Art4.2 & 4.3

No specificdefences. Claims must be establishedclaims - eitherrecognised bythe IOPC 92 Fundor accepted by acompetent Courtas binding uponthe IOPC 92Fund - Art 1.8

As per CLC 69 - Art 3.3, Art 3.4

Owner'sdefences as perCLC 69 plus:damage causedor lack ofinsurance as aresult ofshippers failureto declare HNSand neither theowner nor hisservants oragents knew orought to haveknown of HNS -Art 7. HNS Funddefences similarto Fund 92 - Art 14.3

Caused by: actof war orinsurrection or exceptionalnaturalphenomenon;damage whollydue tointentional actor omission bythird party;damage whollyor partially dueto intentionalact or omissionor negligence of personsuffering damage;negligentmaintenance ofnavigational aids- Art III.2 & III.3

Basis ofShipsTonnage

Net tonnageplus propellingpower allowanceor, if not possibleto measure onthat basis, 40%of the weight (inlong tons) of oilwhich the shipis capable ofcarrying - Art V.10

Gross tonnagecalculated inaccordance withthe 1969TonnageConvention - Art V.10

As per CLC 92 Not Applicable Determined byany applicablenational orinternationallimitation ofliability regime



Loss ofright to limit

Owner notentitled tolimit liability if the incidentoccurred as aresult of theactual fault orprivity of theowner - Art V.2

Owner notentitled to limitliability if damageresulted fromhis personal act or omission,committed withintent to causesuch damage, orrecklessly andwith knowledgethat such damagewould probablyresult - Art V.2

The limit of theIOPC 92 Fund'sobligation isabsolute.

The limit of theSupplementaryFunds obligationis absolute

Determined byany applicablenational orinternationallimitation ofliability regime

"As per CLC 92for the owner - Art 9.2.

The limit of theHNS Fund'sobligation isabsolute"

Limitation of action

Claims must bebrought within 3 years of thedate when thedamage occurredand in no caseafter 6 yearsfrom the date of the incidentwhich causedthe damage- Art VIII

As per CLC 69 As per CLC 69 As per CLC 69 - Art 8

No limitationspecified. Inpractice as perCLC 69

Claims must bebrought, or thefund notified, asapplicable, within3 years of the datewhen the personsuffering thedamage knew orought reasonablyto have knownof the damage,but in no caselater than 10 yearsfrom the date ofthe incident -Art 37

Remarks The owner of aship registeredin a contractingState andcarrying morethan 2000 longtons of oil inbulk as cargomust haveinsurance orother financialsecurity up tothe limit ofliability underthe Convention -Art VII.1

Compulsoryinsurance orother financialsecurity requiredas per CLC 69-----------------------As of 1stNovember 2003,Owner's limits ofliability amendedas follows:- 3 million SDRs

becomes 4,510,000 SDRs;

- 420 SDRs becomes631 SDRs;

- 59.7 million SDRs becomes 89,770,000 SDRs"

As of 1stNovember 2003,Maximumobligations ofthe IOPC Fund92 amended asfollows:- 135 million

SDRs becomes 203,000,000 SDRs;

- 200 million SDRs becomes 300,740,000 SDRs

Once Fund Protocol03 enters intoforce, ship ownersobligations underCLC 92 likely tobe increased. An IOPC WorkingParty is consideringproposals

The registeredowner of a shipgreater than1,000 GRT andregistered in acontracting Statemust haveinsurance orother financialsecurity in anamount equal tothe limit ofliability underany applicablenational orinternationallimitation ofliability regimebut need notexceed the limitunder LLMC 76as amended - Art 7

"A contractingState may exemptships of less than200 GRT whichonly carry HNSin packaged form& do not engagein internationaltrade.Neighbouringcontracting Statesmay also exemptships in the abovecategory whilstengaged onvoyages betweenthose States - Art5. Owner musthave insuranceor other financialsecurity ifactually carryingHNS - Art 12"

21


June 1975)



May 1996)


May 1996)





22

Figure I Compensation Limits Under the Pollution Liability Conventions

1,000

900

800

700

600

500

400

300

200

100

0

750

700

650

600

550

500

450

400

350

300

250

200

150

100

50

00 20 40 60 80 100 120 140 160

Supplementary Fund

Fund 92 Amended Nov 2003

Fund 92

Fund 71

CLC 92 Amended Nov 2003

CLC 92

CLC 69

SDR

(000

,000

s)

US$

(000

,000

s)

GRT (000s)

(At time of publication (June 2003) SDR 1.00 = US$ 1.42)


23

Notes

Other At A Glance guides:

Shipping

1 Cargo Conventions

2 International Ship Registration Requirements

3 Limitation of Liability

4 ISM Code - What if...

5 Marine Pollution by Ships

6 Arrest Regimes

7 Maritime Liens

8 SCOPIC - Who does what

Dispute Resolution

1 The Arbitration Act

2 The English Civil Procedure Rules

3 Mediation - An Introduction to Users

Insurance and Reinsurance

1 Institute Time Clauses - Hulls

2 International Hull Clauses

Private Client

1 Wills and Enduring Powers of Attorney

2 Trusts

Commercial Property

1 Investment Property

Middle East

1 Establishing a Business in the Free Trade Zones of Dubai

2 Legal Aspects of Doing Business in the UAE

Our offices in London, Middle East and Greece will be pleased to supply copies of any of the above

At A Glance guides.

24

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