Term Paper: Marine Pollution Law

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[. . .] However, this Convention strictly refers to the ship-owner and does not exclude claims of any type directed to any other person, other than the owner, which is considered liable for the production of the accident. Still, agents of the owner, in the widest sense, are protected by the 1992 Civil Liability Convention, which means that a victim cannot file a claim against servants, pilots, charterers, mangers or operators of the ship, or persons conducting salvage operations or taking preventive measures.

The compensation payable by the Fund is also limited to an aggregate amount of 203 million by SDR per accident, which also includes the sum the ship-owner or insurer are obliged to pay under the 1992 Civil Liability Convention

The governing body of the 1992 Fund is the Assembly, which is composed of representatives of all the member states. Its session are held only once a year, and its attributions include taking of all important decision, as the Assembly is the supreme organ of the Fund. Settlements of claims is handed by the Executive Committee, a body elected by the Assembly and composed of 15 Member States.

Both funds, the 1992 Fund and the 1971 Fund, are managed by a Secretariat based in London, which comprises 26 functionaries.

How the 1992 Fund is financed.

All monetary values are calculated in Special Drawing Rights, which is the official unit of the International Monetary Fund. Resources of the 1992 Fund are composed of annual contribution levied in order to meet anticipated payments of compensation and administrative expenses for the following year. The criteria on which the contributions are based regards the quantity of crude oil and heavy fuel oil a legal entity from a state which is party to the 1992 Fund Convention receives by sea transport. Anyone which receives more than 150,000 tonnes in a calendar year using this way has the obligation to pay a contribution, i.e. A specified amount per each tonne of oil received. The Assembly decided the size of the contribution that need to be levied in one year

Payment is a direct process, which involves only the contributor and the 1992 Fund. Member states are not liable in any way for any non-performance of payment obligations by its national contributors, unless it specifically accepts this responsibility.

The Fund functions mainly based on the contributions of the Japanese oil industry, which contributes more than 20% of the total amount. Next comes Italy with 11% and the Republic Korea, the Netherlands, France, United Kingdom, Singapore, Spain, Germany, Canada, Australia and Norway.

For a period of time, there were two regimes regarding international liability and compensation for oil pollution damage functioning in parallel: one was imposed by the 1969 Civil Liability Convention and the 1971 Fund Convention, and the other by the 1992 analogue Conventions. As the 1992 Conventions entered into force in 1996, the old Conventions were denounced by several member states. More and more states joined the new 1992 Fund, thereby decreasing the importance of the 1971 Fund and its corresponding regime.

The method that was chosen in order to terminate the 1971 Fund Convention was to hold a Diplomatic Conference in September 2000, which adopted a Protocol which the 1971 Fund Convention would cease to be in force on the date whereon the number of member states fell below 25, or one year from the date on which the Assembly, or any other mandatory body, noted that the total amount of contributing oil received in the remaining member states had fallen below 100 million tonnes. The original Convention required for the number of member states to fell under three, which was very unlikely, despite the increasing number or denunciations; that is the reason for which The Diplomatic Conference in 2000 was summoned.

The date on which the 1971 Fund Conventions ceased to produce effects was May the 24th, 2002, as the number of member states fell bellow twenty-five, as a result of mass denunciations. After that date the Convention produces no more effects, although compensation for claims arising from incidents that took place during the time the 1971 Fund Convention was in force are still being paid by the Fund. The Fund shall be wound-up after all claims have been paid, which is a process expected to last several years.

Settlement of claims.

The total amount paid by the IOPC Funds as a result of compensation for oil pollution damages rises to $700 million, corresponding to the 125 incident wherein the IOPC Fund was involved since it was founded, in 1978.

The way usually taken in order to settle the disputes was amicable, and law suits were generally avoided. However, there were a few cases when the intervention of the courts was required in order to set the matters straight.

A few accidents make up for most of the amount which was used to compensate the victims: Aegean Sea (Spain) $49 million, Braer (United Kingdom) $73 million, Sea Empress (United Kingdom) $49 million, Nadhodka (Japan) $179 million and Erika (France) $54 million.

Admissibility of claims for compensation lays down a set of criteria which have to be met in order for a claimant to be paid compensation. The claim needs to be justified and proved by producing supporting documents of any kind (explanatory notes, receipts, invoices etc. TO simplify the process the Fund provides the claimants with a Claims Manual and with Claims Forms that need to be filled out by the victim of the accident. Based on these pieces of information, the Fund establishes whether a claimant should receive compensation and the exact amount that particular person is entitled to get. The manual was published in order to help the public understand the procedure and contains general information about claims' presentation and conditions of admissibility.

The conditions set by the 1992 Fund Convention include proving that the claim seeks reimbursement for an expense that has actually incurred and that there was a causal relation between the oil spilling accident and the expense. Also, the claimant has to prove that the purposes for which the expense was made were reasonable.

The experience of the IOPC Funds when it comes to analysis of the criteria laid down for the admissibility of compensation, is quite considerable. Settlement of claims founds itself on the definition of "pollution damage," which has is "damage caused by contamination." The examination of the criteria for the admissibility of claims for compensation, under the 1969 Civil Liability Convention, the 1971 Civil Liability Convention and the 1992 Protocols, was thoroughly performed in 1994 by a working group of the 1971 Fund. This examination was concluded by a Report, which now forms the basis for the 1992 Fund's policy on the criteria for admissibility of claims. The Report was endorsed by the Assembly of the 1971 Fund and was adopted by way of a Resolution by the Assembly of the 1992 Fund.

The uniform interpretation of the definition of "pollution damage" was considered by both the 1971 and the 1992 Fund Assemblies essential for the adequate operation of the regime of compensations established under the two Conventions. Not only the problem of whether a claim should be admitted or not, but also the assessment of the actual loss or damage is considered by the IOPC Funds. Since the Funds function under the provisions of international law, one member state's oil industry is bound to pay for the clean-up operations incurred and the eventual economic losses suffered by residents of another member state. In order to avoid tensions, the uniformity of interpretation of the definition is paramount. The risk of conflicts arising between member states and the possibility of collapse of the international compensation system makes the need for consistency even more pressing.

Each claim is analyzed by the 1992 Fund separately and in concrete, on the basis of the particular circumstances in which the damage was incurred. Although the criteria of admissibility of claims cannot be overlooked, due to the different nature of various incidents, a certain flexibility is allowed, which enables the Funds to present solutions to new types of situations and claims. Amicable settlement of claims is the preferred policy of the Fund, which tries to avoid as much as possible lawsuits.

All claims subjected to a decision on their admissibility and which present interest to all member states are mentioned in the IOPC Fund's Annual Report.

The Adequacy of The International Compensation Regime

Since the accidents have become more and more important and dangerous, a need for raising the maximum amount for compensation appeared. The Legal Committee of the IMO adopted in October 2000, under special procedure, two resolutions whereby the compensation limits provided by the 1992 Civil Liability Convention and the 1992 Fund Convention was increased by more than half. These amendments entered into force on November 1st, 2003.

This modification to the 1992 Fund Convention made the total amount available under the 1992 Conventions rise to 203 million… [END OF PREVIEW]

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