CLC & FUND CONVENTION

CLC

AFTER THE DISASTER ON TORREY CANYON IN 1967, THE INTERNATIONAL COMMUNITY REALISED THAT THOSE WHO SUFFER LOSS OR DAMAGE DUE TO OIL POLLUTION FROM SHIPS MAY NOT ALWAYS BE ABLE TO RECEIVE COMPENSATION FROM THE OWNER OF THE OFFENDING SHIP BECAUSE THE OWNER MAY BE IN A COUNTRY FAR OFF OR MAY NOT HAVE SUFFICIENT FUNDS TO MEET ALL THE CLAIMS OR FOR ANY OTHER REASON. THEREFORE THE CLC CONVENTION WAS BROUGHT INTO FORCE. THE OBJECTIVES OF THE CONVENTION ARE:

1.      ENSURE ADEQUATE COMPENSATION IS AVAILABLE TO PERSONS WHO SUFFER LOSSES FROM OIL POLLUTION EVEN IF THE OWNER IS UNABLE TO PAY THE SAME.

2.      ADOPT UNIFORM INTERNATIONAL RULES AND PROCEDURES TO DETERMINE CIVIL LIABILITY ETC FOR LOSSES DUE TO OIL POLLUTION FROM SHIPS.  (CIVIL LIABILITY MEANS RESPONSIBILITY TO COMPENSATION BY MONEY AND NOT ANY CRIMINAL LIABILITY FOR WHICH MASTER / THOSE RESPONSIBLE FOR MAY BE PENALISED BY FINES OR IMPRISONMENT ETC.

3.      TO ENCOURAGE GOVERNMENTS AND OTHERS TO FEEL CONFIDENT IN TAKING EARLY ACTIONS IN CONTAINING / MINIMISING THE ADVERSE EFFECTS OF OIL POLLUTION.

THE CLC CONVENTION APPLIES TO ALL OIL TANKERS IN SITUATIONS WHERE POLLUTION RESULTS FROM THEM IN TERRITORIAL SEAS OR EXCLUSIVE ECONOMIC ZONES. IT DOES NOT APPLY TO WAR SHIPS AND TO STATE-OWNED SHIPS PROVIDED THESE SHIPS ARE NOT ENGAGED IN COMMERCIAL OPERATIONS.

IT ALSO APPLIES TO POLLUTION OCCURRED BY BUNKERS FROM OIL TANKERS ONLY. THE TWO MOST IMPORTANT ASPECTS OF THE CONVENTION ARE:

1.      IN ALL CASES OF DAMAGE THE TANKER OWNER IS LIABLE TO PAY IRRESPECTIVE OF WHOSE FAULT IT IS EXCEPT IN THE FOLLOWING CASES:

1.      ACT OF GOD,

2.      ACT OF WAR OR SABOTAGE,

3.      WHEN THE RELEVANT GOVERNMENT AUTHORITY HAVE NOT ACTED RESPONSIBLY IN MAINTAINING THE LIGHTS, SHAPES OR THE DEPTH OF WATER UNDER ITS JURISDICTION.

2.      EVERY TANKER OWNER IS SUPPOSED TO MAINTAIN A COMPULSORY INSURANCE COVER TO COVER HIS LIABILITIES UNDER THE CLC.

LIABILITY

THE LIMITS OF LIABILITY ARE AS FOLLOWS:

FOR Eg. IF THE CLAIMS ARE OF 210 MN SDR (SPECIAL DRAWING RIGHTS), FOR A VESSEL OF MORE THAN 1,40,000 GRT THEN THE FIRST 89.7 MN SDR IS PAID BY THE SHIP OWNER i.e. BY THE P & I CLUB. UPTO THE 2^ND TIER, IT WILL BE PAID FROM THE FUND AND THE REST WILL BE INCURRED AS LOSS SHARING BASIS.

INSURANCE CERTIFICATE AS REQUIRED BY CLC

EVERY TANKER OF 2000 GRT AND ABOVE IS SUPPOSED TO MAINTAIN A COMPULSORY INSURANCE COVER TO COVER HIS LIABILITIES UNDER THE CLC.

1.      THE FLAG STATE SHALL ISSUE A CERTIFICATE TO EACH SHIP AFTER SHE HAS COMPLIED WITH THE CONDITION OF PROVIDING A FINANCIAL COVER. THE CERTIFICATE SHALL BE CARRIED ONBOARD, IT SHALL SHOW THE NAME OF THE INSURER AND SHALL BE ACCEPTED AND RECOGNISED BY ALL COUNTRIES WHO ARE MEMBERS TO THE CLC CONVENTION.

2.      THE LIABILITY INSURER (MEANING THE P & I CLUB) USUALLY PROVIDES A PROOF OF THE INSURANCE POLICY. ON THE BASIS OF THIS THE FLAG STATE ISSUES A “CERTIFICATE OF CIVIL LIABILITY FOR OIL POLLUTION DAMAGE”.

3.      THE CERTIFICATE SHALL NOT BE VALID BEYOND THE VALIDITY OF THE INSURANCE POLICY.

4.      ANY ONE WHO SUFFERS LOSS CAN SUE THE SHIP OWNER OR EVEN THE INSURER WITHIN 3 YEARS OF THE DAMAGE. EVEN IF THE OWNER GOES INTO LIQUIDATION THE INSURER CONTINUES TO BE LIABLE TO THOSE WHO HAVE SUFFERED A LOSS.

CHANGES BROUGHT ABOUT BY 1992 PROTOCOL:

1.      THE PROTOCOL EXTENDED THE CONVENTION TO COVER SPILLS FROM OIL TANKERS, SO AS TO APPLY TO BOTH LADEN AND UNLADEN VOYAGES, INCLUDING SPILL FROM BUNKER OIL FROM SUCH TANKERS.

2.      THE SCOPE OF THE CONVENTION WAS INCREASED TO COVER THE EEZ ALSO,

3.      THE COMPENSATION LIMITS REMAINED UNCHANGED,

4.      THE ENVIRONMENTAL DAMAGE COMPENSATION LIMITED TO COSTS INCURRED FOR REASONABLE MEASURES TO REINSTATE THE CONTAMINATED ENVIRONMENT,

5.      IT ALSO ALLOWS EXPENSES INCURRED FOR PREVENTIVE MEASURES TO BE RECOVERED EVEN WHEN NO SPILL HAS OCCURRED, PROVIDED THERE WAS GRAVE AND IMMINENT DANGER OF POLLUTION DAMAGE.

6.      A SHIPOWNER CANNOT LIMIT LIABILITY IF IT IS PROVED THAT THE POLLUTION DAMAGE OCCURRED DUE TO THE SHIPOWNERS PERSONNEL ACT OR OMMISION, COMMITTED WITH THE INTENTION TO CAUSE DAMAGE.

OCTOBER 2000 AMMENDMENTS TO CLC:

AFTER THE SINKING OF THE OIL TANKER ERIKA OFF THE COAST OF FRANCE, THE IMO PROPOSED HIGHER LIMITS TO LIABILITY UNDER THIS CONVENTION. IN OCTOBER 2002 THE, THE AMMENDMENTS TO CLC GIVING NEW LIMITS WAS ADOPTED.

THE NEW LIMITS ARE AS DESCRIBED ABOVE.

FUND

THE FUND CONVENTION WAS ADOPTED IN 1971 IN ORDER TO PROVIDE COMPENSATION FOR LOSSES DUE TO OIL POLLUTION DAMAGE WHEN THE CLAIMS EXCEED THE CLC LIMIT. ALL THE COUNTRIES IN THE WORLD WHICH IMPORT MORE THAN 1,50,000 MT OF OIL PER YEAR HAVE TO CONTRIBUTE TO THE FUND AS AND WHEN REQUIRED. THE FUND MAKES SURE THAT LOSSES DUE TO OIL POLLUTION ARE BORNE NOT ONLY BY THE SHIPPING INDUSTRY BUT ALSO BY THE CARGO-INTERESTS. THE FUND IS MANAGED AS AN INDEPENDENT ENTITY WHICH IS MANAGED IN LONDON BY A SECRETERIAT.

THE LIMITS OF LIABILITY ARE AS STATED ABOVE.

THE CLC AND FUND CONVENTIONS APPLIES FOR VESSELS REGISTERED IN THE COUNTRIES WHICH ARE MEMBER STATES AND ALSO IF AN INCIDENT OCCURS IN A COUNTRY WHICH IS A MEMBER STATE. THE CONTRIBUTORS ARE ONLY THE OIL INPORTING COUNTRIES AND NOT OIL EXPORTING COUNTRIES, THUS A STATE LIKE JAPAN PAYS SUCH A BIG CONTRIBUTION EVERY YEAR WHILE SAUDI ARABIA DOES NOT PAY A SINGLE PENNY.