THE CIVIL LIABILITY CONVENTIONS (CLC) OF 1969 AND 1992, AND THE FUND CONVENTIONS (FC) OF 1971 AND 1992IntroductionThe International Maritime Organisation has established a regime which governs compensationfor oil pollution damage caused by spills from oil tankers. The framework for the regime wasoriginally the 1969 International Convention on Civil Liability for Oil Pollution Damage (1969Civil Liability Convention). The 1969 Civil Liability Convention was amended in 1992 and theamended Convention is known as the 1992 Civil Liability Convention.

Ships

CLC 1969 applies only to ships which areactually carrying oil in bulk as cargo, i.e. ladentankers. Spills of bunkers from tankers duringballast voyages are therefore not covered bythe 1969 Convention, nor are spills of bunkeroil from ships other than tankers.

Article I(1) of the Convention defines ship asany seagoing vessel and any seaborne craftof any type whatsoever, actually carrying oil inbulk as cargo. Thus, dry cargo ships, river andlake vessels and seaborne offshoreinstallations are excluded from the definitionof a ship in the Convention.

Spills from tankers in ballast or bunker spillsfrom ships other than tankers are not covered.The provisions of the 1969 Convention do notapply to warships or other ships owned oroperated by a State and used, for the timebeing, only on government non-commercialservice (Article XI(1)).

Pollution damages

CLC 1969 applies to loss or damage causedoutside the ship carrying oil by contaminationresulting from the escape or discharge of oilfrom the ship, wherever such escape ordischarge may occur. Pollution damagesinclude the costs of preventive measures andfurther loss or damage caused by preventivemeasures (Article I(6)).

Preventive measures

CLC 1969 applies only to damage caused ormeasures taken after an incident has occurredin which oil has escaped or been discharged.

The 1969 and 1992 Civil Liability Conventionsgovern the liability of shipowners for oilpollution damage by laying down theprinciple of strict liability and creating asystem of compulsory liability insurance. The shipowner is normally entitled to limithis liability to an amount which is linked tothe tonnage of his ship.

The International Oil Pollution CompensationFunds (IOPC Funds) provide financialcompensation for oil pollution damage thatoccurs in Member States resulting from spillsof persistent oil from tankers. The 1971 and1992 Funds were established by the 1971and 1992 Fund Conventions (FC 1971 and FC1992), respectively. The Fund Conventionswere adopted as supplementary to therelevant Civil Liability Conventions in order toprovide compensation up to a fixed limit perincident in cases where the amount payableby the shipowner or his insurer wasinsufficient to provide full compensation tothe victims of oil pollution damage. A higherlimit is available to Member States that havealso joined the Supplementary Fund, whichwas established in 2003 by a Protocol to FC 1992.

CLC 1969

The International Convention on CivilLiability for Oil Pollution Damage 1969 wasadopted on 29 November 1969 and cameinto force on 19 June 1975.

The geographical scope of the ConventionThe geographical scope of the Convention isdefined by Article II:

This Convention shall apply exclusively topollution damage caused on the territoryincluding the territorial sea of a ContractingState and to preventive measures taken toprevent or minimise such damage.

Thus, it appears that the only criterion isterritorial; the domicile, residence ornationality of the shipowner or the flag stateof the vessel is not relevant.

If pollution is caused by oil discharged from aship on the shores of State A (a party to theConvention) and State B (is not a party to theConvention) the Convention will apply onlyto the damages that occurred on the shoresof State A.

Owner

Claims for pollution damage under CLC 1969can be made only against the registeredowner of the tanker concerned.

According to Article I(3) of the Conventionowner means the person or personsregistered as the owner of the ship or, in theabsence of registration, the person orpersons owning the ship.

Victims claiming compensation outside thisConvention can bring their actions againstpersons other than the owner. However, theConvention prohibits claims against theservants or agents of the owner (Article III(4)).The owner is entitled to take recourse actionagainst third parties in accordance withnational law.

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The Convention therefore does not apply tothreat removal measures, i.e. preventivemeasures which are so successful that thereis no actual spill of oil from the tankerinvolved.

Preventive measures are defined by ArticleI(7) as any reasonable measures taken by anyperson after an incident has occurred toprevent or minimize pollution damage.

The Convention will apply to reasonablepreventive measures taken anywhere in State A irrespective of the nationality of theperson who took such measures. As Article IIlimits the application of the Convention tothe territory of a Contracting State, if thepreventive action is taken outside theterritorial sea of a Contracting State it is notcovered by the convention.

Oil

Article I(5) defines oil as any persistent oilsuch as crude oil, fuel oil, heavy diesel oil,lubricating oil and whale oil, whether carriedon board a ship as cargo or in the bunkers ofsuch a ship.

Incident

CLC 1969 applies to oil pollution caused byoil discharged from a ship as a result of anincident. Incident is defined by Article I(8) asany occurrence or series of occurrenceshaving the same origin, which causespollution damage.

Liability

CLC 1969 imposes strict liability for oilpollution damage. The Convention placesliability only on the owner of the ship (ArticleIII(1)). The shipowners liability does notdepend on his residence or on the State inwhich the ship is registered.

Article III(4) provides that No claim forcompensation for pollution damage shall bemade against the owner otherwise than inaccordance with this Convention. No claim forpollution damage under this Convention orotherwise may be made against the servantsor agents of the owner. Thus, it appears that ifan incident is covered by the Convention it isnot possible to bring an action against theowner under general principles of law.

Consequently, if the pollution damagesuffered is exempted by the Convention, therewill be no remedy against the shipowner.

Under the 1969 Convention no claim forpollution damage may be made against theservants and agents of the owner (ArticleIII(4)). The article does not mention salvors orcharterers, thus implying that claims againstsalvors or charterers may only be broughtunder the principles of national law.

Pollutants

Article I(5) defines oil as any persistent oilsuch as crude oil, fuel oil, heavy diesel oil,lubricating oil and whale oil, whether carriedon board a ship as cargo or in the bunkers ofsuch a ship.

The definition does not make it clear whetherslop or bilge oils are included.

The Convention does not define persistent.

Dirty ballast is not covered under theConvention.

Polluting substances other than oil such ashazardous or noxious chemicals are alsoexcluded.

Joint and several liability

In the case of a collision where both shipsspill oil, the spill of oil from each ship is anincident. When oil has escaped or beendischarged from two or more ships, andpollution damage results, the owners of allships concerned, unless exonerated underArticle III, are jointly and severally liable for allsuch damage which is not reasonablyseparable (Article IV).

Limitation of liability

The shipowner is entitled to limit his liabilityin respect of any one incident to anaggregate amount of 2,000 francs for eachton of the ships tonnage. However, theConvention also provides that this aggregateamount shall not in any event exceed 210 million francs (Article V(1)).

Article V(3) of the Convention provides thatin order to limit his liability under Article V(1),the shipowner shall constitute a fund for the

total sum representing the limit of his liabilitywith the Court or other competent authorityof any one of the Contracting States in whichaction is brought under Article IX. The fundcan be constituted either by depositing thesum or by producing a bank guarantee orother guarantee, acceptable under thelegislation of the Contracting State where thefund is constituted. The insurer or otherperson providing financial security areentitled to constitute a fund on the sameconditions and having the same effect as if itwere constituted by the owner (Article V(11)).

Loss of right to limit liability

The shipowner may be deprived of the rightto limit his liability if a claimant proves thatthe incident occurred as a result of thepersonal fault (the actual fault or privity) ofthe owner (Article V(2)).

Compulsory insurance

Ships carrying more than 2,000 tons of oil inbulk as cargo are required to maintaininsurance or other financial security, such asthe guarantee of a bank or a certificatedelivered by an international compensationfund, in the sums fixed by applying the limits ofliability prescribed in Article V(1). TheConvention, therefore, does not requirecompulsory insurance for any higher amountthan the maximum sum representing theshipowners limitation of liability (Article VII(1)).

Certificate of insurance

According to Article VII(2) a certificateattesting that insurance or other financialsecurity is in force in accordance with theprovisions of the 1969 Convention shall beissued to each ship. The Convention providesthat the certificate shall be issued or certifiedby the appropriate authority of the State ofthe ships registry after determining that therequirements of paragraph 1 of this Articlehave been complied with.

The obligation to maintain a financialsecurity certificate also applies to ships whichare registered in a non-Contracting State butwish to trade to a Contracting State. Statesparties must ensure that all ships in their ports,wherever registered, must be insured orsecured in accordance with the requirementsof the Convention (Article VII(11)).

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Insurers rights and responsibilities

Article VII(8) of the Convention provides thatdirect action may be brought against theinsurer or other person providing financialsecurity for the owners liability for pollutiondamage. The insurer may limit its liability to theamount provided by Article V(1) and its right tolimit is absolute. In other words, even if theowner loses his right to limit liability, the insurermay still be entitled to do so. The insurer mayalso avail itself of the defences (other than thebankruptcy or winding up of the owner) whichthe owner himself would have been entitled toinvoke. If the pollution resulted from the wilfulmisconduct of the owner, the insurer may availitself of such defence as well. But the insurermay not avail itself of any other defence whichit might have been entitled to invoke inproceedings brought by the owner against it.

Exemptions

Article III(2) regulates the circumstanceswhere no liability for pollution damage willattach to the owner. In order to exempthimself from liability, the owner will have toprove that the damage:

a) resulted from an act of war, hostilities, civilwar, insurrection or a natural phenomenon ofan exceptional, inevitable and irresistiblecharacter, or

b) was wholly caused by an act or omissiondone with intent to cause damage by a thirdparty, or

c) was wholly caused by the negligence orother wrongful act of any Government orother authority responsible for themaintenance of lights or other navigationalaids in the exercise of that function.

Moreover, if the owner proves that thepollution damage resulted wholly or partiallyfrom an act or omission done with intent tocause damage by the person who sufferedthe damage or from the negligence of thatperson, the owner may be exonerated whollyor partially from his liability to such person(Article III(3)).

Time bar

The Convention provides a three-year timebar period for claims to be brought according

to the provisions of the Convention. Suchperiod starts from the date when the damageoccurred (Article VIII).

The Convention also states that in no case shall an action be brought after six years fromthe date of the incident which caused thedamage. In case the incident consists of aseries of occurrences, the six years periodruns from the date of the first suchoccurrence (Article VIII).

The Protocol of 1976

The Protocol (of 1976) to the InternationalConvention on Civil Liability for Oil Pollution Damage, 1969 was adopted on 19 November 1976 and came into force on 8 April 1981. The Protocol provided a newunit of account to calculate the limitation ofliability. The Poincar franc used under the1969 Convention was replaced by themethod based on the Special Drawing Rights(SDR) as used by the International MonetaryFund (IMF). Accordingly, the limit of liabilityfor the shipowner was fixed at the amount of133 units of account for each ton of the shipstonnage. The Protocol also provided that themaximum aggregate limit should not in anyevent exceed 14 million units of account.

The 1976 Protocol also took intoconsideration that, because some countriesmight not be members of the IMF, their lawswould not permit the use of the SDR. TheProtocol therefore provides for an alternativemonetary unit based, as before, on gold. A Contracting State which is not a member of the IMF and whose law does not permitthe application of SDR is entitled to declarethat the limits of liability to be applied in itsterritory will, in respect of any one incident,be an aggregate of 2,000 monetary units foreach ton of the ship's tonnage provided thatthis aggregate amount shall not in any eventexceed 210 million monetary units. TheProtocol provided that the monetary unitreferred to in this paragraph corresponded tosixty-five and a half milligrammes of gold ofmillesimal fineness nine hundred. TheProtocol further added that the conversion ofthese amounts into the national currencyshould be made according to the law of theState concerned.

The Protocol of 1984

The Protocol of 1984 to amend CLC 1969was adopted on 25 May 1984. Its aim was toincrease limits of liability but it graduallybecame clear that the requirement of entryinto force (12 months after being acceptedby 10 States, including six with tanker fleetsof at least 1 million gross tons) would not bemet. The 1984 Protocol was thereforesuperseded by the 1992 version.

The Protocol of 1992

The Protocol of 1992 to CLC 1969 wasadopted on 27 November 1992 and cameinto force on 30 May 1996.

The consolidated text of the CLC 1969 asmodified by the 1992 Protocol is referred toas the 1992 Civil Liability Convention (CLC1992). The main features of the 1969 and1992 Conventions are the same, but CLC1992 differs especially in the amounts bywhich a shipowner may limit his liability.

CLC 1992 governs the liability of shipownersfor oil pollution damage. As with CLC 1969,under the 1992 Protocol, the registeredshipowner has strict liability for pollutiondamage caused by the escape or dischargeof persistent oil from his ship. The shipowneris therefore liable for such damage even inthe absence of fault on his part.

With effect from 16 May 1998, Parties to the1992 Protocol ceased to be Parties to theCLC 1969 due to a mechanism forcompulsory denunciation of the old regime.However, for the time being, the two regimes are coexisting, since there are still a number of States that are Party to the CLC 1969 and have not yet ratified the 1992 regime.

The geographical scope of the Convention

The 1992 protocol widened the scope of theConvention to cover pollution damagecaused in the exclusive economic zone (EEZ)or equivalent area of a State Party.

Owner

As with CLC 1969, any claims for pollutiondamage under CLC 1992 can be made onlyagainst the registered owner of the shipconcerned. This does not, in principle,

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preclude victims from claimingcompensation outside the Conventions frompersons other than the shipowner.

CLC 1992 prohibits claims against theservants or agents of the shipowner,members of the crew, pilots, charterers(including bareboat charterers), managers oroperators of the ship, or any person carryingout salvage operations or taking preventivemeasures, unless the pollution damageresulted from the personal act or omission ofthe person concerned. The act(s) oromission(s) must have been committed withintent to cause such damage, or recklesslyand with knowledge that such damagewould probably result (Article III(4)).

The owner of a ship at the time of anincident, or, where the incident consists of aseries of occurrences, at the time of the firstsuch occurrence, is liable for any pollutiondamage caused by the ship as a result of theincident (Article III(1)).

Pollution damage

Article I(6) of the 1992 Convention coverspollution damage resulting from the escapeor discharge of oil from the ship. In the caseof environmental damage (other than loss ofprofit from impairment of the environment),compensation is restricted to costs actuallyincurred or incurred for reasonable measuresto reinstate the contaminated environment.

CLC 1992 also includes measures, wherevertaken, to prevent or minimise pollutiondamage in the territory, territorial sea or EEZor equivalent area of a State Party to theConvention (preventive measures). Expensesincurred for preventive measures arerecoverable even when no spill of oil occurs,provided that there was a grave andimminent threat of pollution damage.

Ships

Article I(1) of CLC 1992 extended itsapplication to cover spills from seagoingvessels constructed or adapted for thecarriage of oil in bulk as cargo, provided that

a ship capable of carrying oil and othercargoes is only regarded as a ship when it isactually carrying oil in bulk as cargo andduring any voyage following such carriage unless it is proved that it has no residues ofsuch carriage of oil on board.

Thus CLC 1992 covers spills of cargo and/orbunker oil from laden, and in some casesunladen, seagoing vessels constructed oradapted to carry oil in bulk as cargo (but notto dry cargo ships).

This means that, if pollution damage iscaused by bunker oil being carried and usedfor the operation or propulsion of the tanker,the incident should be covered by the CLC1992, not the Bunker Convention (theInternational Convention on Civil Liability forBunker Oil Pollution Damage (BOPC), 2001).

Oil

The definition of oil has been slightlymodified by CLC 1992. Oil is defined here asany persistent hydrocarbon mineral oil suchas crude oil, fuel oil, heavy diesel oil andlubricating oil, whether carried on board aship as cargo or in the bunkers of such a ship.

Damage caused by non-persistent oil, such asgasoline, light diesel oil and kerosene istherefore not covered by CLC 1992.

Strict liability

The owner of a tanker has strict liability forpollution damage caused by oil spilled fromhis tanker as a result of an incident. Theowner is only exempt from liability under CLC1992 if he succeeds in proving that:

a) the damage resulted from an act of war or a grave natural disaster; or

b) the damage was wholly caused by an actor omission done with the intent to causedamage (sabotage) by a third party; or

c) the damage was wholly caused by thenegligence of public authorities inmaintaining lights or other navigational aids.

Limitation of liability

Under CLC 1992, the owner of a ship isentitled to limit his liability, in respect of anyone incident, to an aggregate amountcalculated as follows:

for a ship not exceeding 5,000 gross tonnage:3 million SDR

for a ship 5,000 to 140,000 gross tonnage: 3 million SDR plus 420 SDR for eachadditional unit of tonnage

for a ship over 140,000 gross tonnage: 59.7 million SDR

Loss of right to limit liability

Under the 1992 Protocol, a shipowner cannotlimit liability if it is proved that the pollutiondamage resulted from the shipowner'spersonal act or omission, committed with theintent to cause such damage, or recklesslyand with knowledge that such damagewould probably result.

Compulsory insurance

For ships carrying more than 2,000 tonnes ofoil as cargo in bulk, the shipowner is obligedto maintain insurance to cover his liabilitiesunder CLC 1992. Claimants have a right ofdirect action against the insurer.

The 1992 Protocol allows for States Party toissue certificates to ships registered in Stateswhich are not party to the 1992 Protocol. Ashipowner can therefore obtain certificatesto both CLC 1969 and 1992 even when theship is registered in a country which has notyet ratified the 1992 Protocol.

Time bar

Claims that are not brought within threeyears from the date when the damageoccurred will be extinguished. In no caseshall an action be brought more than sixyears from the date of the incident whichcaused the damage (Article VIII).

Where this incident consists of a series ofoccurrences, the six years period shall runfrom the date of the first such occurrence.

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The 2000 amendments

Amendments to the CLC 1992 limitationamounts were adopted on 18 October 2000.The amendments entered into force on 1 November 2003 (under tacit acceptance).The 2000 amendments increasedcompensation limits as set out in the 1992Protocol as follows:

for a ship not exceeding 5,000 gross tonnage: 4.51 million SDR

for a ship 5,000 to 140,000 gross tonnage: 4.51 million SDR plus 631 SDR for eachadditional gross tonne over 5,000

for a ship over 140,000 gross tonnage: 89.77 million SDR

The Fund Conventions

Three intergovernmental organisationsprovide compensation for oil pollutiondamage resulting from spills of persistent oilfrom tankers. These are the 1971 Fund, the1992 Fund and the Supplementary Fund. Allthree Funds are separate legal entities, butthey are administered by a joint Secretariat.Only States can become Members.

Anyone who has suffered pollution damage(including clean up costs) in a Member Statecan claim from the IOPC Funds. This includesindividuals, companies, local authorities oreven States themselves.

As at 31 March 2011, 123 States had ratifiedCLC 1992 and 105 States had ratified FC 1992Fund Convention. The States Parties are listedin the Annex.

1971 Fund

The International Oil Pollution CompensationFund 1971 (the 1971 Fund) was set up underFC 1971. The 1971 Fund was established toprovide compensation for pollution damageto the extent that the protection afforded bythe CLC 1969 is inadequate (Article 2(1)(a)). In order to fill this function the FundConvention provided that the Fund payscompensation to any person sufferingpollution damage, if such person has beenunable to obtain full and adequate

compensation for the damage under theterms of the CLC 1969 (Article 4(1)). Thisprovision covers circumstances where:

a) no liability for the damage arose under theLiability Convention;

b) the owner liable for the damage under theLiability Convention was financially incapableof meeting his obligations in full and anyfinancial security that may have beenprovided (under Article VII of thatConvention) did not cover or was insufficientto satisfy the claims for compensation for thedamage;

c) the damage exceeded the owners liabilityas limited under CLC 1969.

In other words, under FC 1971, victims of oilpollution damage may be compensatedbeyond the level of the shipowners liability.The Funds obligations, however, arethemselves limited to 30 million SDR for anyone incident. In effect, therefore, the Fundsmaximum liability for each incident is limitedto 16 million SDR per incident.

The Fund, however, is required to pay thewhole amount of compensation if there is noshipowner liable, or the shipowner liable isunable to meet his liability. Therefore,including the amounts actually to be paid bythe shipowner or his insurer under CLC 1969,the Fund would be liable up to a maximumof 60 million SDR.

The Funds obligation to pay compensationis confined to pollution damage suffered inthe territories (including the territorial sea)of Contracting States. The Fund is alsoobliged to pay compensation in respect ofmeasures taken by a Contracting Stateoutside its territory.

Another of the Funds aims is to provide reliefto shipowners in respect of the additionalfinancial burden imposed on them by theCLC 1969, such relief being subject toconditions designed to ensure compliancewith safety at sea and other conventions. Inthis respect, the Fund is obliged to indemnify

the shipowner (or his insurer) for a portion ofthe shipowner's liability under the CivilLiability Convention. This portion isequivalent to 100 SDR per tonne or 8.3million SDR, whichever is the lesser. There isno obligation to indemnify the owner if thedamage was caused by the shipownerswilful misconduct or if the accident wascaused, even partially, because the ship didnot comply with certain internationalconventions.

In time, however, the compensation limits ofthe 1971 Fund became too low to cover thecost of oil spills. Accordingly, States that wereMembers of the 1971 Fund were given theright to accede to a new 1992 FundConvention with higher levels ofcompensation. Following a number ofdenunciations, FC 1971 ceased to be in forceon 24 May 2002. The 1971 Fund will, however,continue to deal with a number of incidentsthat occurred in 1971 Fund States before thatdate. Since FC 1971 is no longer in force, thereare no longer any 1971 Fund Member States.

The 1971 Fund was funded by contributionsfrom receivers of crude oil or heavy fuel oil inMember States that had been transported bysea. More information about contributions isincluded in the commentary below on the1992 Fund.

The Protocol of 1976

As with CLC 1969, the FC 1971 originallyapplied the account of Poincar franc. Thiswas modified to the Special Drawing Right bythe 1976 Protocol. The Protocol was adoptedon 19 November 1976 and came into forceon 22 November 1994.

The Protocol of 1984

This Protocol was adopted on 25 May 1984 to raise the limits of liability contained in theconvention and thereby enable greatercompensation to be paid to victims of oilpollution incidents. However, as with the1984 Civil Liability Convention Protocol, itbecame clear that the Protocol would neversecure the number of acceptances requiredfor entry into force. Accordingly, it wassuperseded by the 1992 version.

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FC 1971 ceased to be in force on 24 May 2002and does not apply to incidents occurringafter that date. However, before the 1971Fund can be wound up, all pending claimsmust be settled and paid and any remainingassets distributed to contributors.

1992 Fund Convention

The International Convention on theEstablishment of an International Fund ForCompensation For Oil Pollution Damage,1992 (FC 1992) was adopted on 27 November 1992 and came into force on30 May 1996. FC 1992 is supplementary tothe CLC 1992. It establishes a regime forcompensation where the provisions underCLC 1992 are not available or are inadequate.

The International Oil Pollution CompensationFund, 1992 (1992 Fund) was set up under FC1992. By becoming Party to FC 1992, a Stateautomatically becomes a Member of the1992 Fund. The 1992 Fund is financed bycontributions levied on any person who hasreceived:

more than 150,000 tonnes of crude oil orheavy fuel oil

in any one calendar year

where that oil has been transported by sea, and

received into a 1992 Fund Member State.

The 1992 Fund pays compensation where:

the damage exceeds the limit of the shipowners liability under the CLC 1992,

the shipowner is exempt from liability under the CLC 1992,

the shipowner is financially incapable of meeting his obligations in full under the CLC 1992, and the insurance is insufficient to pay valid compensation claims.

The 1992 Fund does not pay compensationwhere:

a) the damage occurred in a State that wasnot a Member of the 1992 Fund; or

b) the pollution damage resulted from an actof war or was caused by a spill from awarship; or

c) the claimant cannot prove that thedamage resulted from an incident involvingone or more ships as defined (i.e. a seagoingvessel or seaborne craft of any typewhatsoever constructed or adapted for thecarriage of oil in bulk as cargo).

Pollution damage

The 1992 Fund pays for what is defined aspollution damage. Pollution damage coversthe cost of clean up operations and propertydamage, as well as claims for consequentialloss and pure economic loss. For example,fishermen whose nets have become pollutedare entitled to compensation for cleaning orreplacing nets, and compensation for loss ofincome while they are unable to fish. Hotelowners at seaside resorts are entitled tocompensation for loss of tourism incomeresulting from an oil spill. Compensation isalso paid for measures taken to prevent orminimise pollution.

Compensation for environmental damage(other than economic loss resulting fromimpairment of the environment) is restrictedto costs for reasonable measures to reinstatethe contaminated environment. Claims fordamage to the ecosystem are not admissible.

Compensation payable under FC 1992

The compensation payable by the 1992 Fundunder FC 1992 for any one incident occurringbefore 1 November 2003 is limited to 135 million SDR, including the sum actuallypaid by the shipowner or his insurer underCLC 1992.

Adoption of Amendments of the Limits ofCompensation in the Protocol of 1992 toAmend the International Convention on theEstablishment of an International Fund forCompensation for Oil Pollution Damage,1971 (the 2000 Protocol) increased the limitto the maximum amount payable by the1992 Fund to 203 million SDR for any oneincident occurring on or after 1 November2003, including the sum actually paid by theshipowner or his insurer. The 203 million SDRlimit is applicable irrespective of the size ofthe ship.

These amendments were adopted in October2000 and entered into force on 1 November2003. However, if three States contributing tothe Fund receive more than 600 milliontonnes of oil per annum, the maximumamount will be raised to 300.74 million SDR.

Financing the Fund

The Fund is financed by contributions fromany entity which receives, in a calendar year,in excess of 150,000 tonnes of crude oil orheavy fuel oil (contributing oil) in ports orterminal installations in a Member State, aftercarriage by sea (Article X(1)). The levy ofcontributions is based on reports of oilreceipts in respect of individual contributors,which are submitted to the Secretariat byGovernments of Member States.

States do not normally pay any contributions.A State, however, can choose to pay thecontributions instead of the individualreceivers if it wishes.

The decision on the total amount required istaken by the Assembly. This amount isdivided by the total quantity of contributingoil received in the Member States. This givesan amount per tonne of oil received. Thequantity of oil received by each contributor ismultiplied by the amount per tonne to arriveat the amount in pounds sterling which hasto be paid by that contributor.

If there are no entities in a State that receivemore than 150,000 tonnes of contributing oilin a year, the State will have financialprotection for oil spills at no cost at all.

The level of contributions varies each year,depending on the amounts of compensationwhich the 1992 Fund has to pay. Thatdepends on the incidents which haveoccurred and the amounts that have had tobe paid in compensation.

Oil exporters do not pay contributions.

A company that receives oil temporarily intoa storage facility on behalf of another still hasto pay contributions. It is the first physicalreceiver of the oil in a Member State that isliable to pay contributions, provided that theoil has previously been transported by sea. It does not matter whether the oil is receivedon behalf of another company.

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Third tier: Supplementary Fund

The International Oil Pollution CompensationSupplementary Fund (the SupplementaryFund) was established by the Protocol of2003 to FC 1992. The Protocol was adopted inMay 2003 and provides a third tier ofcompensation. The Supplementary Fund wasestablished to pay compensation to anyperson suffering pollution damage if thatperson has been unable to obtain full andadequate compensation for an establishedclaim for such damage under the terms of FC1992. This may be because the total damageexceeds, or there is a risk that it will exceed,the applicable limit of compensation laiddown in article 4, paragraph 4, of FC 1992 inrespect of any one incident (Article IV(1)).

The Supplementary Fund applies to damagein the territory, including the territorial sea, of a Contracting State and in the exclusiveeconomic zone of a Contracting State.

Membership of the Supplementary Fund isoptional and is open to any State which is aMember of the 1992 Fund. The maximumamount payable for any one incident is 750 million SDR, including the amountpayable under the 1992 Conventions. TheSupplementary Fund Protocol entered intoforce on 3 March 2005 and applies toincidents occurring on or after that date.

The Supplementary Fund is financed in asimilar way to the 1992 Fund. The FundSecretariat estimates the amount requiredfor the following year for compensationpayments and administrative costs.

Maximum amount payable under the Conventions

Gross CLC 1969 1971 Fund 1992 Civil Liability 1992 Fund Supplementary tonnage Convention* Convention Convention* Fund*

SDR SDR SDR SDR SDR

5,000 0.6m 60m 4.51m** 203m** 750m

25,000 3.3m 60m 17.1m 203m 750m

50,000 6.6m 60m 32.9m 203m 750m

100,000 13.3m 60m 64.4m 203m 750m

117,000 14.0m 60m 75.1m 203m 750m

140,000 14.0m 60m 89.6m 203m 750m

160,000 14.0m 60m 89.77m 203m 750m

* Including the amounts actually paid by the shipowner or his insurer under the applicable Civil Liability Convention.

** After the amendments with the 2000 Protocol.

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Contributions to the Funds

1992 Fund

Contributing oil received in the calendar year 2008 in the territories of

States which were Members of the 1992 Fund on 31 December 2009 is

listed below (as reported by 31 December 2009).

Member State Contributing oil % of total

(tonnes)

Japan 255,144,426 17.13%

Italy 129,334,221 8.68%

India 126,405,239 8.49%

Republic of Korea 119,568,421 8.03%

Netherlands 110,103,026 7.39%

France 98,359,780 6.60%

Singapore 92,190,163 6.19%

United Kingdom 73,071,850 4.91%

Canada 70,544,358 4.74%

Spain 63,471,950 4.26%

Germany 38,722,135 2.60%

Malaysia 29,425,638 1.98%

Sweden 26,860,650 1.80%

Australia 26,838,918 1.80%

Greece 23,653,163 1.59%

Turkey 23,166,454 1.56%

Argentina 15,156,816 1.02%

Norway 14,928,387 1.00%

Portugal 13,954,163 0.94%

Israel 13,575,759 0.91%

Bahamas 13,152,176 0.88%

Finland 12,853,273 0.86%

Philippines 10,578,120 0.71%

Lithuania 9,068,258 0.61%

Mexico 7,637,482 0.51%

Bulgaria 7,251,283 0.49%

China (HKSAR) 6,527,050 0.44%

Belgium 6,025,580 0.40%

Denmark 5,880,182 0.39%

Morocco 5,542,564 0.37%

New Zealand 4,954,636 0.33%

Trinidad and Tobago 4,777,756 0.32%

Panama 4,206,452 0.28%

Ireland 3,827,464 0.26%

Tunisia 3,393,344 0.23%

Croatia 2,969,892 0.20%

Malta 2,804,359 0.19%

Jamaica 2,439,757 0.16%

Uruguay 2,432,401 0.16%

Sri Lanka 2,084,431 0.14%

Poland 1,822,474 0.12%

Cameroon 1,386,685 0.09%

Cyprus 1,208,944 0.08%

Estonia 863,612 0.06%

Algeria 655,929 0.04%

Colombia 289,075 0.02%

Barbados 248,663 0.02%

Liberia 218,622 0.01%

Total 1,489,575,981 100.00%

The Supplementary Fund

Member State Contributing oil % of total

(tonnes)

Japan 255,144,426 27.79%

Italy 129,334,221 14.09%

Netherlands 110,103,026 11.99%

France 98,359,780 10.71%

United Kingdom 73,071,850 7.96%

Spain 63,471,950 6.91%

Germany 38,722,135 4.22%

Sweden 26,860,650 2.93%

Australia 26,838,918 2.92%

Greece 23,653,163 2.58%

Norway 14,928,387 1.63%

Portugal 13,954,163 1.52%

Finland 12,853,273 1.40%

Lithuania 9,068,258 0.99%

Belgium 6,025,580 0.66%

Denmark 5,880,182 0.64%

Ireland 3,827,464 0.42%

Croatia 2,969,892 0.32%

Poland 1,822,474 0.20%

Estonia 863,612 0.09%

Barbados 248,663 0.03%

Latvia 0 0.00%

Slovenia 0 0.00%

Total 918,002,067 100.00%

States Parties to the 1992 Civil Liability

Convention but not the 1992 Fund Convention

As at 31 March 2011

States Parties 18 States

States Parties to the 1969 Civil Liability

Convention As at 31 March 2011

States Parties 37 States

States Parties to both the 1992 Civil Liability

Convention and the 1992 Fund Convention

As at 31 March 2011

Total 105 States

1992 Fund Member States which are Party to

the Supplementary Fund Protocol

As at 31 March 2011

Supplementary Fund Member States 27 States

Australia Japan

Barbados Latvia

Belgium Lithuania

Canada Morocco

Croatia Netherlands

Denmark Norway

Estonia Poland

Finland Portugal

France Republic of Korea

Germany Slovenia

Greece Spain

Hungary Sweden

Ireland United Kingdom

Italy

NUMBER 3 JUNE 2011 1 9

Azerbaijan

Benin

Brazil

Cambodia

Chile

Costa Rica

Cte dIvoire

Dominican Republic

Ecuador

Egypt

El Salvador

Equatorial Guinea

Gambia

Georgia

Ghana

Guatemala

Guyana

Honduras

Indonesia

Jordan

Kazakhstan

Kuwait

Lebanon

Libyan Arab

Jamahiriya

Maldives

Mauritania

Mongolia

Nicaragua

Peru

Saint Kitts and Nevis

Sao Tome and Principe

Saudi Arabia

Senegal

Serbia

Syrian Arab Republic

Turkmenistan

United Arab Emirates

Albania

Algeria

Angola

Antigua and Barbuda

Argentina

Australia

Bahamas

Bahrain

Barbados

Belgium

Belize

Benin

Brunei Darussalam

Bulgaria

Cambodia

Cameroon

Canada

Cape Verde

China (HKSAR)

Colombia

Comoros

Congo

Cook Islands

Croatia

Cyprus

Denmark

Djibouti

Dominica

Dominican Republic

Ecuador

Estonia

Fiji

Finland

France

Gabon

Georgia

Germany

Ghana

Greece

Grenada

Guinea

Hungary

Iceland

India

Ireland

Islamic Republic of Iran

Israel

Italy

Jamaica

Japan

Kenya

Kiribati

Latvia

Liberia

Lithuania

Luxembourg

Madagascar

Malaysia

Maldives

Malta

Marshall Islands

Mauritius

Mexico

Monaco

Morocco

Mozambique

Namibia

Netherlands

New Zealand

Nigeria

Norway

Oman

Panama

Papua New Guinea

Philippines

Poland

Portugal

Qatar

Republic of Korea

Russian Federation

Saint Kitts and Nevis

Saint Lucia

Saint Vincent and the

Grenadines

Samoa

Seychelles

Sierra Leone

Singapore

Slovenia

South Africa

Spain

Sri Lanka

Sweden

Switzerland

Syrian Arab Republic

Tonga

Trinidad and Tobago

Tunisia

Turkey

Tuvalu

United Arab Emirates

United Kingdom

United Republic of

Tanzania

Uruguay

Vanuatu

Venezuela

Azerbaijan

Chile

China

Egypt

El Salvador

Indonesia

Kuwait

Lebanon

Mongolia

Pakistan

Peru

Republic of Moldova

Romania

Saudi Arabia

Solomon Islands

Ukraine

Vietnam

Yemen