IMO raises compensation limits for oil pollution disasters
Legal Committee - 82nd session 16-20 October 2000
The Legal Committee
of IMO has adopted amendments to raise by 50 percent the limits of compensation
payable to victims of pollution by oil from oil tankers.
The amendments to the 1992 Protocol of the International Convention on Civil
Liability for Oil Pollution Damage (CLC Convention) and to the 1992
Protocol of the International Convention on the Establishment of an International
Fund for Compensation for Oil Pollution Damage (IOPC Fund) are expected to enter
into force on 1 November 2003, unless objections from one quarter of contracting
States are received before then.
The CLC Convention makes the shipowner strictly liable for damage suffered
as a result of a pollution incident and the amendments raise the limits payable
to 89.77 million Special Drawing Rights (SDR) (approximately US$115 million)
for a ship over 140,000 gross tonnage, up from 59.7 million SDR (US$76.5 million)
established in the 1992 Protocol.
The IOPC Fund amendments raise the maximum amount of compensation payable from
the IOPC Fund for a single incident, including the limit established under the
CLC amendments, to 203 million SDR (US$260 million), up from 135 million SDR
(US$173 million). However, if three States contributing to the Fund receive
more than 600 million tonnes of oil per annum, the maximum amount is raised
to 300,740,000 SDR (US$386 million), up from 200 million SDR (US$256 million).
While the Civil Liability Convention regulates the shipowner's liability, the
Fund is made up of contributions from oil importers. The principle is that if
an accident at sea results in pollution damage which exceeds the compensation
available under the Civil Liability Convention, the Fund will be available to
pay an additional amount. In this way, the regime established by the two treaties
ensures that the burden of compensation is spread more evenly between shipowner
and cargo interests.
The adoption of the increased limits comes in the wake of two major incidents
- the Nakhodka in 1997 off Japan and the Erika disaster off the
coast of France in December 1999.
The compensation limits set by the 2000 amendments entering into force in 2003
are as follows:
the 1992 Protocol, the limit was 3 million SDR (US$3.8 million)
the 1992 Protocol, the limit was 3 million SDR (US$3.8 million) plus 420 SDR
(US$537.6) for each additional gross tonne)
(Under the 1992 Protocol, the limit was 59.7 million SDR (US$76.5 million)
IOPC funds and IMO
Although the IOPC Funds were established under Conventions adopted under the
auspices of IMO, they are independent legal entities.
Unlike IMO, the IOPC Funds are not United Nations agencies and are not part
of the UN system. They are intergovernmental organisations outside the United
Nations, but follow procedures which are similar to those of the United Nations.
To become a member of the 1992 Fund, a State must accede to the 1992 Protocols
to the Civil Liability Convention and the Fund Convention by depositing a formal
instrument of accession with the Secretary-General of IMO. These Conventions
should be incorporated into the national law of the State concerned.
Further information can be found on the IOPC Funds website at www.iopcfund.org
Drawing Rights Conversion Rates
The daily conversion rates for Special Drawing Rights (SDR) can be found on
the International Monetary Fund website at www.imf.org under "IMF Finances".
Legal Committee issues:
Protocol to the Athens Convention relating to the
The Committee agreed that a draft protocol to the Athens Convention would be
ready for consideration by a diplomatic conference to be convened during the
biennium 2002-2003 and decided to recommend to the Council of IMO that allowance
be made for a diplomatic conference during the 20022003 biennium to adopt
the draft protocol.
Representatives of observer delegations from the shipping and insurance industries
were unanimous in their support for this decision, noting the need to adopt
the draft protocol as soon as possible, in order to reaffirm IMOs global
role in the development of such conventions and to avoid unilateral action by
States leading to the adoption of different regional or national schemes.
The Athens Convention of 1974 makes a carrier liable for damage or loss suffered
by a passenger if an incident causing damage occurs during the course of the
carriage and is due to fault or neglect of the carrier. Liability can be limited
so long as the carrier did not act recklessly or with intent to cause damage.
The draft Protocol introduces, among other things, the requirement of compulsory
insurance for passenger claims, and proposes changes to the purely fault-based
liability system which is a feature of the 1974 Convention.
A Protocol to the 1974 Convention to raise the limits of liability in the Convention
was adopted in 1990, but this Protocol is not yet in force.
convention on wreck removal
The Committee decided that no recommendation should be made to the Council for
the convening of a Diplomatic Conference to adopt the proposed Wreck Removal
Convention (WRC) during the next biennium. It agreed instead to devote more
time to this agenda item in forthcoming Committee sessions to enable a draft
treaty to be ready for consideration by a Diplomatic Conference during the 2004-2005
The WRC is intended to provide international rules on the rights and obligations
of States and shipowners in dealing with wrecks and drifting or sunken cargo
which may pose a hazard to navigation and/or pose a threat to the marine environment.
The draft Convention is intended to clarify rights and obligations regarding
the identification, reporting, locating and removal of hazardous wrecks, in
particular those found beyond territorial waters.
draft Convention covers:
The Correspondence Group on the draft WRC reported that positive progress had
been made on a number of aspects of a scaled-down version of the draft convention.
However, there were differing views on some issues, in particular as regards
leaving certain matters to be regulated by national legislation. Key issues
for future discussion include the need to agree on definitions such as "wreck",
"preventive measures" and "hazard"; reporting on wrecks;
and financial liability for locating, marking and removing wrecks.
The work of the Correspondence Group has been suspended pending consideration
by the Legal Committee of certain key issues such as financial security.
of the HNS Convention
The United Kingdom invited delegations to attend a one-day meeting on 16 March
2001 to review implementation of the International Convention on Liability and
Compensation for Damage in Connection with the Carriage of Hazardous and Noxious
Substances (HNS) by Sea 1996.
The Convention, when it enters into force, will make it possible for compensation
to be paid to victims of accidents involving hazardous and noxious substances,
such as chemicals.
The Convention to date has one contracting party (Russian Federation) and will
enter into force 18 months after the following conditions have been fulfilled:
The Committee reviewed work by a Correspondence Group in developing information
which might be of assistance to potential claimants and contributors to the
HNS Fund. The work includes the development of a guide to enactment of the HNS
Convention which would give assistance to States interested in ratifying or
acceding to the Convention as well as to potential claimants and to contributors
to the HNS Fund, whilst providing outline guidance to relevant industries on
how the regime is expected to function.