Conference agrees to early winding up of 1971 oil pollution compensation fund
to the 1971 International Convention on the Establishment of an International
Fund for Compensation for Oil Pollution Damage (IOPC Fund) have signed a Protocol
allowing for the early winding-up of the 1971 Fund, which was established to
provide compensation to victims of oil pollution from ships carrying oil as
The 2000 Protocol was signed on 27 September following a Diplomatic Conference
held from 25 to 27 September.
The 1971 Fund is being replaced by a 1992 Fund which has higher limits on the
amount of compensation payable by the Fund, made up of contributions from Contracting
From 16 May 1998, Members of the 1992 Fund ceased to be Members of the 1971
Fund Convention due to a mechanism in the Protocol which established the 1992
Fund allowing for compulsory denunciation of the "old" regime. However,
with the departure of these States, the total quantity of contributing oil on
the basis of which contributions to the Fund are assessed has been dramatically
reduced. The effect of this reduction in the contributions base is two-fold.
In the first place, a considerably increased financial burden will fall on the
contributors in those States which remain Members of the 1971 Fund if a major
oil spill occurs in any of those States, since the contributors will be legally
responsible for the funding of the total amount of compensation due from the
In addition, as long as the 1971 Fund remains in existence, the concern remains
that it will face a situation in which an incident occurs where the 1971 Fund
has an obligation to pay compensation to victims, but where there are no contributors
in any of the remaining Member States.
In such a situation, if a tanker spill should occur, the remaining 1971 Fund
Member States would not have the financial protection which they would expect
under the provisions of the 1971 Fund Convention.
Under Article 43.1 of the 1971 Convention, the 1971 Fund ceases to exist when
the number of Contracting States falls below three. In order to allow the Convention
to terminate sooner, the Conference agreed to amend Article 43.1 so that the
Convention ceases to be in force:
whichever is earlier.
The 2000 Protocol will be brought into force by the tacit acceptance procedure,
whereby it is deemed to have been accepted six months from the date of its adoption
unless objections are received by not less than one-third of the Contracting
The 1971 Fund Convention currently has 40 Contracting States, representing 13.3
percent of world merchant shipping tonnage. Twelve of these 40 will cease to
be 1971 Fund Member States by July 2001.
The 1992 Fund currently has 61 Contracting States, representing 85.7 percent
of world merchant shipping tonnage.
The Conference also adopted a Resolution "on the winding-up of the 1971
International Oil Pollution Compensation Fund", which urges Contracting
States which have not already done so, to denounce the International Convention
on Civil Liability for Oil Pollution Damage, 1969 and the 1971 Fund Convention
and to become Parties to the International Convention on Civil Liability for
Oil Pollution Damage, 1992 and the International Convention on the Establishment
of an International Fund for Compensation for Oil Pollution Damage, 1992.
The Conference was attended by representatives of 24 Contracting States to the
International Convention on the Establishment of an International Fund for Compensation
for Oil Pollution Damage, 1971 as well as by representatives of 23 Member States
of IMO as observers and representatives from one associate Member of IMO.
Funds and the CLC Convention
Compensation payable by the IOPC Fund is additional to compensation payable
under the 1992 Protocol to the 1969 International Convention on Civil Liability
for Oil Pollution Damage (1992 CLC Convention). The CLC Convention
regulates the strict liability of the shipowner for damage suffered as a
result of a pollution incident. Limits in the 1969 CLC Convention were raised
by a 1992 Protocol, adopted at the same time as the 1992 Fund Protocol.
While the Civil Liability Convention puts the onus on the shipowner, the Fund
is made up of contributions from oil importers. The idea 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 will be spread more evenly between shipowner and
The maximum amount of compensation payable from the Fund for a single incident,
including the limit established under the 1992 CLC Protocol, is 135 million
SDR (about US$182 million).
IOPC funds and IMO
Although the 1971 and 1992 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 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