THE INTERNATIONAL COMPENSATION SYSTEM IN A PERIOD OF TRANSFORMATION

Abstract

ABSTRACT Two international treaties elaborated under the auspices of the International Maritime Organization (IMO)—the 1969 International Convention on Civil Liability for Oil Pollution Damage (1969 Civil Liability Convention) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1971 Fund Convention)—established the international regime of compensation. These Conventions were revised by Protocols in 1992, and the revised Conventions, known as the 1992 Conventions, are intended to replace the original ones. The Civil Liability Conventions govern the liability of the shipowner, whereas the Fund Conventions provide for supplementary compensation through two intergovernmental organizations, the International Oil Pollution Compensation Funds, financed by a levy on oil receipts in Member nations. A number of nations has ratified the 1992 Conventions and denounced the original 1969/1971 Conventions, but a number of other nations has not yet done so. After the denunciation by a number of nations whose oil industries are major contributors to the system, the old regime soon will be reaching a point where it is no longer financially viable. It is therefore important that the 1971 Fund Convention be terminated as soon as possible. It is likely that the maximum amount of compensation available under the 1992 Conventions (at present some US$180 million) will increase to some US$270 million as of November 1, 2003. In view of the experience of recent major incidents, the question has been raised as to whether the 1992 Conventions should be reassessed to ensure that the international regime continues to meet the needs of society.