Abstract
China has adopted a domestic approach to the compensation fund for ship-induced oil pollution damage by establishing the Chinese Ship-induced Oil Pollution Compensation (CSOPC) Fund. After almost 10 years of practice, there are still opinions and questions regarding the rationality of China’s domestic approach. This study reassesses China’s domestic approach by a two-dimensional analysis of the current position and potential developments of the CSOPC Fund’s functions in pollution governance and victim compensation. At the present stage, the goal of adequate compensation to victims is not well achieved by the CSOPC Fund when compared to its other goal of ensuring a better oil pollution emergency reaction. Given that the International Oil Pollution Compensation (IOPC) Fund is unlikely to contribute much to pollution governance, and the current inadequacy and defects of the CSOPC Fund can be improved gradually, it is suggested that China should continue its domestic approach with necessary improvements. Using the CSOPC Fund’s practice as a case study, this research intends to explore the pollution governance side of the compensation fund that has not yet been fully addressed, demonstrating the key value of the domestic fund compared to the IOPC Fund.
Highlights
The international civil liability regime for marine oil pollution is recognized as a typical “smart mix”: the compensation is provided on the one hand via the liability of the tanker owner based on the 1969 International Convention on Civil Liability for Oil Pollution Damage and its 1984 and 1992 Protocols and on the other hand via the oil receivers through the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage and its 1992 Protocol (Faure and Wang, 2019)
The other is to adopt a combination of the international and domestic regime, an example of which is Canada—while being a contracting party to the 1992 Fund Convention, it retains its domestic Ship-Source Oil Pollution Fund providing financial protection for the situations not covered by the present international regime, as well as additional compensation for oil spills from laden tankers covered by the international conventions
The major reason for China’s choice of domestic approach on a compensation fund for ship-induced oil pollution damage is largely explained by Hu (2005, 164): after it transitioned to an oil importing country in 1993, China believed that the acceptance of the International Oil Pollution Compensation (IOPC) Fund would lead to more cost than benefit since Chinese oil importers would have to make a significant contribution to the organization
Summary
The international civil liability regime for marine oil pollution is recognized as a typical “smart mix”: the compensation is provided on the one hand via the (limited) liability of the tanker owner based on the 1969 International Convention on Civil Liability for Oil Pollution Damage (hereinafter, CLC) and its 1984 and 1992 Protocols (the amended CLC is known as the 1992 CLC, hereinafter, 1992 CLC) and on the other hand via the oil receivers through the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (ceased to be enforced on May 24, 2002) and its 1992 Protocol Some previous studies have reported that for countries with a high risk of exposure to oil spills like China, it is better to join the IOPC Fund from the perspective of sharing both the risks and financial losses (Dong et al, 2015; Hao, 2019) In this regard, after almost 10 years of practice, it is still imperative to reassess whether China’s domestic approach concerning the ship-induced oil pollution compensation fund is reasonable by identifying the key characteristics and challenges of the CSOPC Fund. Such a reassessment is needed for further policymaking and the mechanism perfection of China’s practice regarding the compensation fund and can set a good example to demonstrate the key considerations in making the path choice between the domestic or international compensation fund for pollution damage
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
