International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992, as amended by its Protocol of 2020 and its Supplementary Protocol of 2003 (the Fund Convention)
International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992, as amended by its Protocol of 2000 and its Supplementary Protocol of 2003 (the Fund Convention)
As indicated in the introduction to the CLC 1969, one of the conditions for accepting the primary liability of the owner on a strict basis had been that a limit to such liability should be fixed and then the balance of the damages caused by pollution should be borne by the cargo owner through the adoption of an international compensation scheme based upon the existence of an international fund.1
A draft of the Convention was prepared by the Legal Committee of IMCO2 and was submitted to the Conference convened by the Assembly of IMCO from 29 November to 18 December 1971, by which the Convention was adopted. The basic structure of such draft was as follows:3
(i) linkage with the CLC: the States may become parties to the Fund Convention if they are parties to the CLC: its art. 37 provides that the Convention is open for signature by the States which have signed or which accede to the CLC and by any State represented at the Conference;
(ii) the establishment of an International Fund for compensation of pollution damage to be recognised as a legal person;
(iii) its purpose to be twofold: (a) partial relief of the owner, under certain conditions; and (b) compensation of the victims when damages exceed the owner’s liability;
(iv) a global limit on the aggregate amount of compensation payable by the Fund;
(v) assumption of the obligation of guarantor in respect of part of the owner’s liability;
(vi) jurisdiction for actions against the Fund;
(vii) criteria for contributions to the Fund by Contracting States;
(viii) functions of the Assembly, Executive Committee and Secretary.
The Convention, as adopted on 18 December 1971, follows the general lines of the draft. It contains rules on the compensation and indemnification of the victims, on the relief to the owner, on contributions by Contracting States and on the organisation and administration of the Fund.
Its linkage with the CLC is stated in the following subtitle of the Convention attached to the Final Act of the Conference of 1971:
(Supplementary to the International Convention on Civil Liability for Oil Pollution Damage, 1969)
and from the following considerations in its Preamble:
Considering that the International Convention of 29 November 1969, on Civil Liability for Oil Pollution Damage, by providing a regime for compensation for pollution damage in Contracting States and for the costs of measures, wherever taken to prevent or minimize such damage, represents a considerable progress towards the achievement of the aim, CONSIDERING HOWEVER that this regime does not afford full compensation for victims of oil pollution damage in all cases while it imposes an additional financial burden to shipowners, CONSIDERING FURTHER that the economic consequences of oil pollution damage resulting from the escape or discharge of oil carried in bulk at sea by ships should not exclusively be borne by the shipping industry but should in part be borne by the oil cargo interests.
The linkage appears also from its art. 2(1) which describes the aims of the Convention as follows:
(a) to provide compensation for pollution damage to the extent that the protection afforded by the Liability Convention is inadequate;
(b) to give relief to shipowners in respect of the additional financial burden imposed on them by the Liability Convention, such relief being subject to conditions designed to ensure compliance with safety at sea and other conventions;
(c) to give effect to the related purposes set out in this Convention.