Compensation for victims of oil spills to be widened
The current international compensation regime covering oil spills does not include bunker oil spills from vessels other than tankers. This situation is set to change with the entry into force on November 21 of the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (the 'Bunkers Convention'), an international treaty adopted under the auspices of the International Maritime Organisation covering liability and compensation for pollution damage caused by bunker spillage from general cargo vessels. The rationale behind this Convention is two pronged: it has been developed as a further preventive measure for the reduction and control of pollution of the marine environment as well as a mechanism for compensation for damage caused by such pollution within the territories of states parties to the Convention.
The introduction of the international compensation regime via the enactment of the 1969 International Convention on Civil Liability for Oil Pollution Damage (the CLC) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (the Fund Convention), (subsequently amended by the 1992 Protocols), represented an unprecedented development in the international legislative arena. This was due to the fact that the intention behind this regime was that of setting up a concrete structure of compensation for victims of oil pollution damage caused by the escape of persistent oil from laden tankers whether that oil was being carried as cargo or as bunkers for the tankers' own consumption.
The CLC and the Fund Convention applied a two-tier approach in ensuring adequate redress for victims of oil spills - the ship owner would be liable up to a limit stipulated under the CLC depending on the tonnage of the ship while any claims in excess of this limit would be charged to a Fund set up and injected with contributions by the major oil importers. A supplemental third tier in the shape of a 2003 Protocol to the Fund Convention that entered into force on March 3, 2005 stretched the total amount of compensation payable for any one incident under the CLC/Fund regime to approximately $1,000 million (from a previous maximum amount in the region of $386 million).
This regime also included two exceptions to the traditional tenet under the law of tort that a person is liable for damage caused through his fault. Firstly the ship owner was, bar specified exceptions, subject to "strict liability" i.e. there was no need for a claimant to prove the fault of the ship owner in order to advance a successful claim under the CLC. Secondly this strict liability was coupled with and balanced by the notion of limitation of liability - the ship owner's liability would be liable only to a maximum amount stipulated by law. Malta acceded to the 1992 CLC and Fund Conventions by virtue of the Oil Pollution (Liability and Compensation) Act of 1999 as subsequently amended.
The Bunkers Convention is modelled on the CLC in terms of content other than the immediate subject matter given that the Bunkers Convention applies to all vessels other than tankers covered by the CLC. Its entry into force will make the ship owner, defined broadly so as to include the owner, registered owner, bareboat charterer, manager and operator of a ship, liable to pay compensation for pollution damage (including the costs of preventative measures) caused by the escape or discharge of bunker oil from a ship in the territory, including the territorial sea, of a State Party, as well as in its exclusive economic zone, or if a State Party has not established one, in an equivalent area.
When the Bunker Convention is in force ships over 1,000 gross tonnes registered in a State Party to the Convention will be required to carry on board a certificate certifying that the ship has insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime.
In all cases, this amount should not exceed an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the 1996 Protocol. Since Malta incorporated the 1976 Convention as amended by the Protocol by virtue of the Limitation of Liability for Maritime Claims Regulations 2004, the limitation amount will be equal to the limits prescribed by the limitation regime specified therein. Thus, the Bunker Convention, as opposed to the CLC/Fund regime, does not have a fund to support the victims of pollution where the limits of liability are insufficient. Furthermore, bunker pollution damage claimants will effectively have to prove their claims against any available limitation fund alongside other property claims arising from the same incident.
A further implication of the Bunker Convention is that a ship over 1,000 gross tonnes that is not in possession of the aforementioned insurance certificate confirming compliance with the said convention shall not be allowed to use the ports or offshore facilities in the territorial sea of a State Party. On the other hand, a State Party shall not permit a ship under its flag to operate at any time unless such a certificate is in place.
It is certainly hoped that the Bunker Convention will, in filling in the present legislative lacunae, prove to be an effective complement to the international compensation framework promulgated by the International Maritime Organisation in its pursuance of cleaner seas and safer oceans.
Dr Vassallo is an associate within the Marine Litigation Department at Fenech and Fenech Advocates.
The introduction of the international compensation regime via the enactment of the 1969 International Convention on Civil Liability for Oil Pollution Damage (the CLC) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (the Fund Convention), (subsequently amended by the 1992 Protocols), represented an unprecedented development in the international legislative arena. This was due to the fact that the intention behind this regime was that of setting up a concrete structure of compensation for victims of oil pollution damage caused by the escape of persistent oil from laden tankers whether that oil was being carried as cargo or as bunkers for the tankers' own consumption.
The CLC and the Fund Convention applied a two-tier approach in ensuring adequate redress for victims of oil spills - the ship owner would be liable up to a limit stipulated under the CLC depending on the tonnage of the ship while any claims in excess of this limit would be charged to a Fund set up and injected with contributions by the major oil importers. A supplemental third tier in the shape of a 2003 Protocol to the Fund Convention that entered into force on March 3, 2005 stretched the total amount of compensation payable for any one incident under the CLC/Fund regime to approximately $1,000 million (from a previous maximum amount in the region of $386 million).
This regime also included two exceptions to the traditional tenet under the law of tort that a person is liable for damage caused through his fault. Firstly the ship owner was, bar specified exceptions, subject to "strict liability" i.e. there was no need for a claimant to prove the fault of the ship owner in order to advance a successful claim under the CLC. Secondly this strict liability was coupled with and balanced by the notion of limitation of liability - the ship owner's liability would be liable only to a maximum amount stipulated by law. Malta acceded to the 1992 CLC and Fund Conventions by virtue of the Oil Pollution (Liability and Compensation) Act of 1999 as subsequently amended.
The Bunkers Convention is modelled on the CLC in terms of content other than the immediate subject matter given that the Bunkers Convention applies to all vessels other than tankers covered by the CLC. Its entry into force will make the ship owner, defined broadly so as to include the owner, registered owner, bareboat charterer, manager and operator of a ship, liable to pay compensation for pollution damage (including the costs of preventative measures) caused by the escape or discharge of bunker oil from a ship in the territory, including the territorial sea, of a State Party, as well as in its exclusive economic zone, or if a State Party has not established one, in an equivalent area.
When the Bunker Convention is in force ships over 1,000 gross tonnes registered in a State Party to the Convention will be required to carry on board a certificate certifying that the ship has insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime.
In all cases, this amount should not exceed an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the 1996 Protocol. Since Malta incorporated the 1976 Convention as amended by the Protocol by virtue of the Limitation of Liability for Maritime Claims Regulations 2004, the limitation amount will be equal to the limits prescribed by the limitation regime specified therein. Thus, the Bunker Convention, as opposed to the CLC/Fund regime, does not have a fund to support the victims of pollution where the limits of liability are insufficient. Furthermore, bunker pollution damage claimants will effectively have to prove their claims against any available limitation fund alongside other property claims arising from the same incident.
A further implication of the Bunker Convention is that a ship over 1,000 gross tonnes that is not in possession of the aforementioned insurance certificate confirming compliance with the said convention shall not be allowed to use the ports or offshore facilities in the territorial sea of a State Party. On the other hand, a State Party shall not permit a ship under its flag to operate at any time unless such a certificate is in place.
It is certainly hoped that the Bunker Convention will, in filling in the present legislative lacunae, prove to be an effective complement to the international compensation framework promulgated by the International Maritime Organisation in its pursuance of cleaner seas and safer oceans.
Dr Vassallo is an associate within the Marine Litigation Department at Fenech and Fenech Advocates.
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