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Slide 12 of 39
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Part 6 of the Marine Liabilities Act implements the 1992 International Convention on Civil Liability for Oil Pollution Damage (the CLC or Civil Liability Convention) and the 1992 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (the IOPC or Fund Convention). Both conventions apply to oil tankers and to persistent oil carried in bulk. Canadian modifications to the conventions extend the principles to all types of oil.
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The 1992 Civil Liability Convention makes the ship owner strictly liable for oil pollution damage and creates a system of compulsory liability insurance. The ship owner is, however, generally entitled to limit his liability to an amount determined by the tonnage of his ship.
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The 1992 Fund Convention was established “to provide compensation for pollution damage to the extent that the protection afforded by the 1992 Liability convention is inadequate”. The Fund is supplementary to the Liability Convention and is financed by contributions from member states. The maximum amount payable by the Fund is currently about $270 million and is set to increase to about $400 million by November of 2003.
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The Ship Source Oil Pollution Fund (SOPF) is established by s. 77 of the Marine liabilities Act. It is supplementary to the Fund Convention. In the event the limits of the Civil Liability and Fund Conventions are inadequate, the SOPF provides $135 million of additional compensation. SOPF can also be a claim of first resort. Claims for oil pollution damage can be made direct against SOPF in the circumstances prescribed in sections 84 and 85. If SOPF pays the claims it becomes subrogated to the rights of the claimant and can attempt to recover the payment from the ship owner.
