Lloyd's Maritime and Commercial Law Quarterly
LIABILITY AND COMPENSATION FOR POLLUTION DAMAGE CAUSED BY SHIPS REVISITED—REPORT ON AN IMPORTANT INTERNATIONAL CONFERENCE
A. H. E. Popp *
1. Introduction
In May 1984 an important conference was held under the auspices of the International Maritime Organization (IMO) to amend the 1969 Convention on Civil Liability for Oil Pollution Damage (the Civil Liability Convention) and the 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (the Fund Convention)1. The conference had for consideration two draft Protocols prepared by the Legal Committee of IMO2.
Basically, the Civil Liability Convention imposes strict liability on the shipowner of a laden tanker for pollution damage caused by the escape or discharge of oil. The shipowner’s liability is limited to approximately U.S. $132 for each ton of the ship’s tonnage, with an aggregate amount of approximately $14 million per incident3. Additionally, the convention creates an obligation on the owner of a ship carrying more than 2,000 tons of oil in bulk as cargo to provide insurance coverage which would permit claims for pollution damage to be brought directly against the the insurer.
Compensation offered by the Civil Liability Convention is supplemented by compensation from the International Fund set up under the Fund Convention. The maximum compensation payable by the Fund is approximately $47 million including the amount recoverable from the shipowner4. Additionally, the Fund provides the shipowner with an indemnity for that amount of compensation that he must pay under the Civil Liability Convention that:
- “(a) is in excess of an amount equivalent to 1,500 francs for each ton of the ship’s tonnage or of an amount of 125 million francs, whichever is the less, and
- (b) is not in excess of an amount equivalent to 2,000 francs for each ton of the said tonnage or an amount of 210 million francs, whichever is the less”5.
* General Counsel, Legal Services, Department of Transport, Ottawa, Canada. The writer acted as alternative representative of the Canadian Delegation to the Conference under the auspices of the International Maritime Organization (IMO). The views expressed in the report, however, are those of the author and do not necessarily reflect those of the Canadian Government.
1 For a text of the conventions, see Singh, International Maritime Law Conventions (1983) (hereafter Singh), Vol. 3, at pp. 2454 and 2495, respectively.
2 IMO Docs LEG/CONF. 6/4 and 6/5, respectively. A draft instrument having to do with liability and compensation in connection with the maritime transport of noxious and hazardous substances was also submitted to the conference but was not proceeded with after one week of negotions revealed fundamental differences of opinion which could not be resolved in the time available. See IMO Doc. LEG/CONF. 6/3.
3 The convention originally read in Poincare gold francs. By a Protocol adopted in 1976 the unit of account was changed to special drawing rights (SDR) of the International Monetary Fund (IMF). For the text of the Protocol, see Singh (supra, fn. 1), Vol. 3, at p. 2489. As of 18th January 1985, 1 SDR equalled U.S.$1.02604.
4 This convention still reads in Poincare gold francs. The Protocol amending the unit of account, likewise adopted in 1976, has not entered into force. For the text of the Protocol, see Singh (supra, fn. 1), at p. 2517.
5 Article 5 of the Fund Convention. Converted to U.S. dollars, 1,500 francs represents approximately $99; 125 million francs represents approximately $8.5 million, 2,000 francs represents approximately $132 and 210 million francs represents approximately $14 million.
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