completed its passage through the House of Commons today.
Shipping minister David Jamieson announced that from 1
pollution from tankers such as the Braer and Sea Empress is set to
rise by just over 50 per cent.
Coastal communities, local businesses and many others who incur costs
and losses as a result of oil spills will be able to claim up to
£180m from the International Oil Pollution Compensation Fund ('the
1992 Fund'). The new regime will give greater financial protection,
faster settlements and reduce the risk of claims not being paid in
Moves to increase the level of compensation available were first
proposed by the UK in 2000, and were subsequently agreed by eighty
five states at the International Maritime Organization (IMO) in 2000.
The two conventions which govern the oil pollution compensation
regime require a three year period to complete the process to
increase the limit.
Mr Jamieson said:
'The government has worked hard for this increase and I'm delighted
that at last we are able to provide coastal communities with much
stronger financial protection against damaging oil tanker spills.
'The compensation regime will be now be able to respond much better
to clean-up costs and the economic losses that can arise out of a
major oil tanker disaster and ensure that claimants have a better
prospect of being paid quicker and in full.
'It is worth reflecting that this new overall limit of compensation
is 330% more than was available to meet the claims generated by the
Braer in Shetland in 1993 and the Sea Empress in South Wales in 1996.
'This increase in compensation is an important first step in the
current review of liability for pollution from oil tankers.'
1. The increase to the limits of compensation available under t he
Civil Liability Convention (CLC) and the IOPC Fund Convention were
agreed at the International Maritime Organization (IMO) in April 2000
under the 'tacit acceptance' procedure provided in the 1992 Protocols
to the CLC and Fund Conventions which govern the regime.
2. The regime provides compensation for oil pollution damage
resulting from spills of persistent oil carried in bulk as cargo by
3. On the basis of the amendments, the amount which the 1992 CLC and
Fund regime can use to provide compensation for any single oil spill
from a tanker has risen from about £120m to approximately £180m
with effect from October 2003.
4. For the purposes of the 1992 Civil Liability Convention and the
1992 Fund Convention, compensation limits are calculated in Special
Drawing Rights of the International Monetary Fund - ie amounts are,
in effect, made up of a 'basket' of currencies.
5. Since the 1992 regime came into force in mid-1996, the maximum
amount which the 1992 Fund has been able to pay in respect of any one
oil spill has been 135 million Special Drawing Rights (at the current
exchange rate, equivalent to approximately £120m). The
amendments to the 1992 CLC and the 1992 Fund Convention, have
increased the maximum amount for any one oil spill to 203 million
Special Drawing Rights (ie approximately £180m). These
amendments have increased by 50.36% the limits of liability for both
ship owners and cargo interests.
6. Since this increase was agreed we have seen significant damage
arise from the Prestige incident. In a further move to address the
need to overhaul the compensation regime the IMO adopted a Protocol
to the Fund Convention in May this year to provide an optional
additional layer of compensation to the present regime through a
supplementary fund to the IOPC Fund. Once in force this will allow
for claims up to an overall total of 750 million SDRs for those
states which opt into the Supplementary Fund. A working group that
has been set up by the IOPC Fund developed this Protocol as part of
an ongoing review of the CLC and Fund conventions.
The 1992 International Convention on Civil Liability for Oil
Pollution Damage (1992 Civil Liability Convention) and the 1992
International Convention on the Establishment of an International
Fund for Compensation for Oil Pollution Damage (1992 Fund