NATIONAL CONTINGENCY PLAN FOR MARINE POLLUTION FROM SHIPPING AND OFFSHORE INSTALLATIONS [ Previous ] [ Contents ] [ Next ] APPENDIX M LIABILITY & COMPENSATION FOR POLLUTION DAMAGE M.2 This appendix gives a brief description of the ways that those involved in clean up operations can later recover their costs. However, its purpose is not to provide definitive legal advice. M.3 The ease with which responders can obtain compensation depends upon the type and source of pollutant involved. Currently, there are five distinct cases:
M.4 This appendix describes each case in more detail below. M.5 DfT’s Shipping Policy (telephone 0207 944 5452 or 5444) can provide additional information on liability and compensation for pollution from ships. The Offshore Pollution Liability Association Limited (telephone 0208 786 3640) can provide additional information regarding offshore installations. If they are uncertain about the rules on liability and compensation that apply in a specific case, claimants should seek their own legal advice. Pollution caused by persistent oil carried in tankers
M.7 The former convention deals with the liability of tanker owners. The second convention establishes the IOPC Fund and the protocol establishes the Supplementary Fund. The Merchant Shipping Act 1995 implements the Civil Liability and IOPC Fund Conventions in the UK49. The UK acceded to the Supplementary Protocol on 8 June 2006; it will enter into force in the UK on 8 September 2006 (see M.23). M.8 Under the regime, the tanker owner is strictly liable for the costs of reasonable clean up operations. Strict liability means that the claimant need not prove fault to obtain compensation. The tanker owner may escape liability only if they can prove that one of a limited number of exceptional circumstances (for example, an act of war) caused the damage. Amount of compensation currently available M.10 The IOPC Fund is an intergovernmental organisation. It generally pays compensation to supplement that available from the tanker owner. In some rare cases, however, the Fund may meet all claims (for example, if the claimant cannot identify the tanker owner, or if the tanker owner has no insurance cover and is insolvent). The maximum amount of compensation available from the tanker owner and the IOPC Fund together is about £164 million. M.11 Oil pollution incidents do not only result in claims for clean up costs. There are also claims for economic losses (for example, those sustained by the fishing industry). If the total of all valid claims exceeds the total amount of compensation available, all claimants receive an equal percentage of their claims. Concerns in the early stages of an incident that this situation might arise can result in the IOPC Fund making initial payments at less than 100% of eligible claims. The Fund makes top up adjustments as the claims position becomes clearer. However, this situation is only likely to arise following major oil spills. Types of clean up and emergency response claims covered M.13 Admissible claims for clean up operations include the cost of personnel and the hire or purchase of equipment and materials. The cost of cleaning and repairing clean up equipment and of replacing materials consumed during the operation is also admissible. However, if the responders bought the equipment used for a particular spill, insurers and the IOPC Fund make deductions for the residual value. M.14 Special rules apply where public authorities clean up an oil spill using permanently employed personnel, or ships, vehicles and equipment that they own. In these circumstances, only the additional costs incurred by those authorities would normally be an admissible claim. Additional costs means expenses that arise solely because of the response to the incident and that the responders would not have incurred had the incident and related operations not taken place. M.15 An area of potential dispute is the extent to which authorities may also claim for fixed costs (that is, costs which would have arisen even if the incident had not occurred). These may include normal salaries for permanently employed personnel, capital costs of ships and other equipment, and the costs of maintaining specialised clean up resources on permanent standby under contract. Insurers and the IOPC Fund normally pay compensation for a reasonable proportion of such fixed costs. However, the costs must correspond closely to the clean up period in question and not include remote overhead charges. M.16 Compensation may be available for the costs of environmental advice. If the aim of the advice is to assist the clean up operation (for example, by helping to identify the most appropriate response techniques in given circumstances), its costs in general qualify for compensation. However, the costs of general environmental monitoring or longer-term studies to determine the impact of a spill do not normally qualify for compensation. The only exception is when such studies concern damage that clearly falls within the definition of “pollution damage” used in the Civil Liability and Fund Conventions. Because of this distinction, it is important that those involved in the environmental aspects of a spill keep careful records that distinguish between operational activities and scientific studies. Anybody contemplating undertaking a scientific study should seek advice on the admissibility of a claim for its costs at an early stage. M.17 Compensation is also available in cases where there is no oil spill, if there is a grave and imminent threat that pollution damage might occur. For example, the costs of mobilising clean up resources to the site of a tanker aground on a rocky coastline in bad weather would normally be admissible, even if a successful salvage operation subsequently prevents any oil spilling. Operation of the international oil pollution compensation fund (IOPC Fund) M.19 States Parties meeting within the Assembly or Executive Committee approve the settlements of claims against the IOPC Fund. Where claims do not give rise to new points of principle and relatively small amounts are involved, however, the Director can settle claims entirely without prior approval. The secretariat of the IOPC Fund co-operates closely with the P&I club involved in an incident in handling claims and, for example, in appointing joint experts. M.20 The IOPC Fund has developed a series of criteria for establishing whether claims are eligible for compensation. In relation to clean up operations, the fact that a government or other public body decides to take certain measures does not automatically mean that the Fund will reimburse the cost of those measures. The essential criterion is the reasonableness of the measures, based on an assessment of the facts available at the time of the decision to take them. The Fund does not accept claims if the claimant could have foreseen that the measures taken would be ineffective in the particular circumstances of the incident. On the other hand, the fact that the measures prove to be ineffective is not in itself a reason to reject a claim for the costs incurred. M.21 More generally, the following criteria would apply:
M.22 The IOPC Fund’s claims manual summarises its criteria in more detail. This manual, and a general information booklet, are available from: International Oil Pollution Compensation Fund Tel:020 7592 7100 E-mail:info@iopcfund.org Supplementary Fund Protocol M.24 The UK acceded to the Supplementary Fund Protocol on 8 June 2006 and it will enter into force in the UK three months from that date. The Protocol will therefore apply to persistent oil spills from tankers occurring on or after 8 September 2006. Small Tanker Owners Indemnification Agreement Pollution caused by persistent oil carried in ships other than tankers M.27 The UK has national legislation to make owners of ships other than those to which the Civil Liability Convention applies strictly liable for pollution damage caused by persistent oil52. Claimants do not have to prove that the shipowner was at fault. M.28 Unlike tanker owners, other shipowners may limit their liability to amounts determined in accordance with the Convention on Limitation of Liability for Maritime Claims 197653 as amended by its Protocol of 1996. They are not currently obliged to maintain liability insurance but the compulsory insurance requirements of the Bunkers Convention will apply to ship owners of vessels with a gross tonnage greater than 1,000 when that instrument enters into force. Pollution caused by pollutants other than persistent oil M.30 When in force this Convention will mirror the oil pollution compensation regime with strict liability for shipowners backed up by compulsory insurance to a given limit depending on the tonnage of the vessels in question. The Convention also establishes the HNS Fund which will provide additional compensation, paid for by receivers of hazardous and noxious substances in States Parties, when the total costs exceed the shipowner's limit of liability. The total amount of compensation available through the HNS Convention will be around £203 million (SDR 250 million). M.31 The UK has signed the HNS Convention and the implementing powers are contained in the 1997 Merchant Shipping and Maritime Security Act. The UK is working towards ratification of the HNS Convention but it is not expected to enter into force in the near future. In the meantime, the ordinary rules of civil common law continue to apply to liability and compensation for pollution damage caused by substances other than persistent oil carried on ships. Pollution caused by offshore installations M.33 OPOL administers the provisions of the “Offshore Pollution Liability Agreement”, under which participating oil companies who are operators accept strict liability for pollution damage54 and remedial measures55 up to a maximum amount per incident. There is a periodical review of the amount of compensation available to take account of changes in risk and inflation. The amount is currently US $120 million per incident, and US $240 million in the aggregate. M.34 Operators under the OPOL Agreement must provide evidence of financial responsibility for the US$120 million per incident and US$240 million in the aggregate in order to meet their obligations to claimants, but the Agreement does not preclude claimants from seeking redress in the Courts for losses incurred. If an operator fails to meet his obligations to claimants under the Agreement, then the remaining operators have agreed to guarantee payment of claims up to the maximum amount of US$120 million. M.35 The OPOL Agreement covers not only fixed installations and pipelines but also production facilities such as Floating Production Storage and Offloading vessels (FPSOs) and Floating Storage Units (FSUs) while being used in the production process, as well as when temporarily removed from their normal station for any reason whatsoever. M.36 For an information booklet on OPOL, you should contact: Offshore Pollution Liability Association Limited Tel:020 8786 3640 Email: opol@compuserve.com Pollution from an unidentified source
|
