Call for consistency in application of oil spill compensation provisions

Overview

A call for the consistent application of the Civil Liability Convention (CLC) and Fund Conventions was made when the governing bodies of the International Oil Pollution Compensation (IOPC) Funds met in London on 24 and 25 April. BIMCO was represented as an observer delegation.

A paper, co-sponsored by the International Chamber of Shipping (ICS) and the International Group of P&I Clubs, set out concerns that national courts were not necessarily applying the conventions’ provisions as intended, particularly in relation to channelling of claims and limitation rights. A study should therefore be undertaken to develop a common understanding of the application of the conventions, encourage more widespread ratification of the Supplementary Fund Protocol and, for states not already party, promote acceptance of the 1992 CLC and Fund Convention.

During a full discussion when many delegations took the floor, several speakers pointed out that because the conventions conferred decision-making powers on national courts, their decisions must be respected. The majority view, with supportive interventions from BIMCO, Intertanko and the International Union of Marine Insurance (IUMI), was sympathetic to the concerns expressed by industry. However, France expressed strong criticism about the absence of prior consultation and reasons behind the proposal, while Spain questioned the Funds’ capacity to engage in such legal interpretation. 

Suggestions for taking the project ahead included establishing a Working Group or a Consultation Group, referral to the IMO Legal Committee and, potentially controversial, amending the conventions.  However, there was no consensus on the approach to be taken.

The Chairman therefore recommended that the Director of the IOPC Funds should be requested to prepare a paper setting out the options put forward for consideration at the next session in October. The majority of delegations accepted the proposal.

Discussions between the Fund, the European Maritime Safety Agency (EMSA) and the International Group of P&I Clubs have resulted in a formula for assessing hire rates for the use of EMSA’s oil spill response vessels, equipment and dispersants. The agreement, set out in a Memorandum of Understanding (MOU), was put forward for approval. The agreement deals with rates payable and takes effect only when contractual terms have been concluded for use of response equipment. The rates are also without prejudice to proving that use of the pollution response assets meets the admissibility criteria in the 1992 Fund Claims Manual. The MOU was approved and the Director authorised to sign the agreement on behalf of the IOPC Funds.

It was reported that the agreement between the Funds and the International Group of P&I Clubs for making interim payments had been signed on 21 December 2016.

Following amendments noted at the Funds’ session in October 2016, the International Group of P&I Clubs had issued updated versions of the Small Tanker Oil Pollution Indemnification Agreement (STOPIA) 2006 (as amended 2017) and the Tanker Oil Pollution Indemnification Agreement (TOPIA) 2006 (as amended 2017). 

Time constraints meant that discussions expected to result in approval of Guidelines for Presenting Claims for Environmental Damage could not be concluded. The Chairman noted that this was not a time-critical issue. Inter-sessional work would continue and the Guidelines would be put forward for adoption at the next session.

Progress was noted towards implementation of the HNS Convention and Protocol. Norway had recently become the first State to ratify the Protocol and other states were actively working on the necessary procedures to give effect to the provisions. It was also reported that the European Council had formally adopted decisions authorising EU Member States to ratify or accede to the 2010 HNS Convention.

A number of continuing incidents were reviewed including the Prestige and the Hebei Spirit.  In the context of a marine fuel oil spill from the Trident Star in August 2016, it was agreed that the new procedures for making interim payments would be invoked. 

The session also dealt with a number of administrative matters including the Funds’ working capital provisions, financial regulations, the functioning of the audit body and amendments to staff rules.

The IOPC Funds will meet again in October.

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