INTERTANKOATHENS TANKER EVENT

THE REGULATORY ENVIRONMENT

Jonathan HareSkuld

Colin de la RueInce & CoApril 2005

OIL POLLUTION FROM TANKERS - COMPENSATION

INTERNATIONAL CONVENTIONS

Civil Liability and Fund Conventions 1992 – 86 states

INTERNATIONAL CONVENTIONS

Civil Liability and Fund Conventions 1992 – 86 states

CLC 92 alone – 9 states

INTERNATIONAL CONVENTIONS

Civil Liability and Fund Conventions 1992 – 86 states

CLC 92 alone – 9 states CLC 69 – 45 states

INTERNATIONAL CONVENTIONS

Civil Liability and Fund Conventions 1992 – 86 states

CLC 92 alone – 9 states CLC 69 – 45 states

Total 140 states

COMPENSATION LIMITS UNDER CLC 92 AND FC 92

Fund limit now 203m SDR (approx US$300m)

COMPENSATION LIMITS UNDER CLC 92 AND FC 92

Fund limit now 203m SDR (approx US$300m)

Owner’s limit - Max limit nearly 90m SDR (approx

US$130m) Min limit for small ships

0 5,000 140,000

FC Nov 2003

3m

135m

FC

CLC Nov 2003

CLC

GT

203m

135m

90m

60m

Stage One 50% INCREASE IN CONVENTION LIMITS

4.5m

203m

SDR

Stage two - SUPPLEMENTARY FUND

Raises total compensation to 750m SDR

Optional third tier – only in Protocol states

Funded by levies on oil receipts

REVIEW OF REGIME

IOPC Fund Working Group Apportionment of

compensation Substandard ships

REVIEW OF REGIME

P&I Clubs & apportionment STOPIA

minimum contribution SDR 20 m. in force from 3 March 2005 a binding agreement TOPIA as an alternative

REVIEW OF REGIME

P&I Clubs & substandard ships

OECD Report International Group

response

REVIEW OF REGIMEProposals by International Group include: a common checklist to be completed by

underwriters harmonised criteria for targeting ships to

be surveyed the establishment of a database a double retention for a Club which

insures a ship which another Group Club has declined to insure on the grounds of the unfit condition of the ship.

REVIEW OF REGIME

Proposal - IMO Working Group

consolidation of surveys improved sharing of information collaboration by all interested parties

” chain of responsibility”

REVIEW OF REGIME 9th Meeting of IOPC Fund Working

Group in March - inconclusive

Fund Assembly in October 2005

The danger of fragmentation

REVIEW OF REGIME“The success of the current regime has been due in part to a satisfactory balance being struck between political and technical factors, and this balance needs to be kept if the regime is to maintain its widespread appeal.…A marginal decision to proceed with a revision is a recipe for fragmenting the system”

REVIEW OF REGIME

Compensation not punishment

DESIRING to adopt uniform international rules and procedures for determining questions of liability and providing adequate compensation in such cases…….

PREVENTION OF POLLUTION AND

CRIMINAL LIABILITY

PROPOSALS POST-ERIKA and PRESTIGE

MARPOL amendments Accelerated phase-out of

single hull tankers EU laws

Criminal liability

CRIMINAL LIABILITYMARPOL

Operational discharges and accidental pollution

CRIMINAL LIABILITYOperational Discharges

Lack of reception facilities Deliberate discharges permissible

within strict controls Distance from land Rate of discharge and degree of

dilution Special areas

CRIMINAL LIABILITYAccidental Discharges

Casualties: spills resulting from damage to ship or equipment

Other pollution: Accidents in handling cargo or

bunkers Leakages (e.g. due to wear and tear)

CRIMINAL LIABILITYAccidental Discharges

P&I Cover: ”the accidental escape or

discharge of oil or any other polluting substance”

CRIMINAL LIABILITYNon-accidental Discharges discretionary cover proviso that the member took all

reasonable steps to prevent the infringement giving rise to the fine

insurability

CRIMINAL LIABILITYMARPOL

Strict liability for: Operational discharges in breach of

controls (even if breach accidental) Accidental spills other than

casualties

CRIMINAL LIABILITYMARPOL

No liability for pollution resulting from damage to ship

Unless caused by i) lack of response to incident, or ii) deliberate or reckless

misconduct

CRIMINAL LIABILITYEU Directive

Illegal discharges Test of serious negligence Relationship with MARPOL

effect within and beyond territorial seas

EU DIRECTIVELegal and industry concerns

Test of liability for accidental spills is subjective and unsuitable

PRESTIGE

Master detained 2 years (83 days in jail)

PRESTIGEBMA Report

No clear cause of damage No evidence of wrongdoing Ship ordered to sea without

regard to her condition Treatment of master

criticised

Tasman Spirit

EU DIRECTIVELegal and industry concerns

Test of liability for accidental spills is subjective and unsuitable contrary to accepted global

regime

THE FUTURE

Global or regional laws? Effective in preventing

pollution? Balance of political and

technical factors?