Increases in Compensation for Oil Pollution Damage

Until recent years the compensation regimes established by the 1969 International Convention on Civil Liability for Oil Pollution Damage (CLC) and 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution (Fund Convention) and their 1992 Protocols had successfully compensated claims arising in respect of oil pollution damage to which they applied. However, following two major oil pollution incidents – the Nakhodka in 1997 off Japan and the Erika off the coast of France in 1999 – there is concern that claims may exceed the compensation available under these regimes and, accordingly, increasing the levels of compensation has become a pressing issue.

Amendments approved in October 2000 increase the compensation limits under the 1992 Protocol to the CLC by just over 50%. The amendments were introduced pursuant to existing CLC provisions designed to deal with inflation, rather than as result of any fundamental change. The increased levels come into force on November 2003 unless before that date objections are received from one quarter of contracting states.

The table below sets out the compensation levels currently payable under the 1992 Protocol and those which will apply once the amendments come into force:

Vessel Gross Tonnage	Limit of Liability under 1992 Protocol	Limit of Liability under Amendments to 1992 Protocol
Not Exceeding 5,000	3 million SDR (US$ 3.85 million)	4.51 million SDR (US$ 5.79 million)
5,000 to 140,000	3 million SDR (US$ 3.85 million) plus 420 SDR (US$ 539) for each additional gross tonne over 5,000	4.51 million SDR (US$ 5.79 million) plus 631 SDR (US$ 810) for each additional gross tonne over 5,000
Over 140,000	59.7 million SDR (US$ 76.6 million)	89.77 million SDR (US$ 115 million )

(1 SDR = 1.28302 US$ as at 10.10.01. Source: International Monetary Fund)

There are currently 73 contracting states to the 1992 CLC Protocol. There are, however, still more than 50 contracting states to the original 1969 CLC which imposes a maximum level of liability of only 14 million SDR (US$ 18 million) . At a Diplomatic Conference of September 2000 dealing with the revision of the winding up of the 1971 Fund (see below) IMO member states were urged to adopt the 1992 CLC Protocol.

The new amendments as per RESOLUTION LEG.1(82)  may be found at

http://www.imo.org/blast/blastDataHelper.asp?data_id=15849&filename=LEG1(82).pdf

The 1992 Protocol may be viewed at

http://www.admiraltylawguide.com/conven/protocivilpol1992.html