Notes on INTERNATIONAL CONVENTION ON THE ESTABLISHMENT OF AN INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE

ADOPTED --- 1971 ENTRY INTO FORCE --- 16-10-1978 PROTOCOLS --- Adopted --- 19-11-1976 ; In force --- 22-11-1994 Adopted --- 27-11-1992 ; In force --- 30-05-1996 APPLICATION • • It applies to any oil pollution damage, including preventive measures taken to minimise such damage, caused in the exclusive economic zone of a contracting State. It does not apply to a war ship and any other ship owned or operated by a State and used only on government non-commercial service.

DEFINITIONS Ship --- Oil tanker which is actually carrying bulk oil cargo or oil residues of previous cargo. Oil --- Any persistent hydrocarbon mineral oil cargo and bunkers. Fund --- International oil pollution compensation fund 1992. Pollution damage --- Damage caused due to the escape or discharge of oil outside the ship, provided that compensation payable shall be limited to the following costs : • Reasonable measures taken for re-instatement of the environment. • Preventive measures taken to reduce or mitigate pollution. • Loss of profit incurred by any party due to such damage. COMPENSATION The Fund shall pay compensation to any person suffering pollution damage if such a person has not been able to obtain full and adequate compensation under the CLC convention, because of any of the following reasons : • No liability for the damage arises under the CLC convention. • The owner is financially not capable of meeting his obligation and the insurance cover available is not sufficient to satisfy all claims. • The damage exceeds the owner’s liability under the CLC convention. EXEMPTION The Fund shall not be liable for pollution damage if it is due to any of the following acts : • War, hostilities, civil war or insurrection. • Sabotage by a third party. (The Fund shall not be liable for damage claim of this party but shall still be liable for claims from the other parties) LIMITS OF LIABILITY

Amount to be contributed by each oil-importing person of each State shall be proportionately divided by the Assembly of the Fund. If the total claims exceed the limits stated above then the amount payable shall be distributed amongst the claimants in proportion to their claims. can be increased to 200 million Units of Account. AMENDMENT OF LIMITATION AMOUNT Procedure for amendment shall be as follows : • At least one-quarter of the contracting States may submit a proposal to IMO who shall circulate the same to all the States. The payment shall be made in the local currency in accordance with the method of valuation of the SDR as applied by IMF. then all rights for such claims are extinguished. In any case no action can be brought 6 years after the date of the incident. STATUTORY LIMIT If action for compensation is not brought within 3 years of the date of the pollution incident. Unit of Account is Special Drawing Right (SDR) as defined by the International Monetary Fund (IMF) and applicable to those States who are members of the IMF. inevitable and irresistible character. as decided by the Assembly of the Fund. CONTRIBUTION TO THE FUND • • Annual contribution shall be made by all person importing crude and fuel oil within a contracting State which has received more than 150000 tons of such oil in a calendar year. it shall pay an interest on the balance amount due. to make the appropriate contribution to the Fund. The State shall be responsible for the persons importing such oil within its territory. • • ORGANISATION OF FUND The Fund shall be controlled by an Assembly consisting of all States who are party to this Convention.• • • • • • • Maximum 135 million Units of Account which includes the amount actually paid under the CLC convention. . AMENDMENT OF CONVENTION This convention can be amended by a conference convened by IMO at the request of not less than one-third of the contracting States. In special circumstances the amount stated in both the above paras. If a State defaults in making the payment. Maximum 135 million Units of Account exclusively payable by the Fund. Compensation claims shall be settled in the same court as for the CLC convention. There shall be a secretariat headed by the Director. after taking into account the annual budget of the expenditure and income of the Fund and the total amount of such oil received by each State. if the damage was due to a natural phenomena of exceptional.

All contracting States are bound by the amendment unless they denounce the 1992 Protocol at least 6 months before the amendment enters into force. All States shall be entitled to participate in the proceedings of the committee. .• • • • • • • At least 6 months after the circulation. the proposal shall be submitted to the legal committee of the IMO for consideration and adoption. calculated on compound basis from 1501-1993. unless within this period at least one-quarter of the contracting States communicate to IMO that they do not accept the amendment. provided that at least half of the contracting States are present. The adopted amendment shall be notified by IMO to all the contracting States and it shall be deemed to have been accepted at the end of a period of 18 months. Amendment shall be adopted by a majority of two-third of the contracting States present and voting. • Three times of the original limit. Original limit may be increased by the above amendment procedure by a maximum amount as follows : • 6% of the original amount per year. The amendment shall enter into force 18 months after it is accepted as stated above.

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