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Liability and Compensation for Oil and HNS Pollution Incidents

Over the years, the IMO has put in place a comprehensive set of regulations covering liability and compensation for damage caused by oil transported by ship, through which the shipping industry (in conjunction with oil importers) provides automatic cover of up to US$1 billion for any single incident, regardless of fault. This tiered system of compensation includes the International Convention on Civil Liability for Oil Pollution Damage (CLC) and the International Oil Pollution Compensation (IOPC) Funds, including the 2003 Supplementary Fund, which collectively provide more coverage than ever before to those affected by oil spills.
The International Convention on Civil Liability for Bunker Oil Pollution Damage entered into force in November 2007, extending the liability and compensation regimes to damage caused by spills of oil when carried as fuel in ships’ bunkers.
The International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996, once in force, will serve to complete this framework by establishing a regime to cover spills involving hazardous and noxious substances. A Protocol aimed addressing the issues that were widely viewed as barriers to ratification of Convention was adopted in April 2010, with the hope that this would accelerate the entry into force of the Convention, providing the much-needed compensation scheme for spills involving HNS.

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