Following the adoption of a protocol at the International Maritime Organization (IMO) conference in May 2003, the International Oil Pollution Compensation Fund (IOPC Fund) may soon be able to offer as much as USD 1 billion per oil tanker accident to victims of oil pollution.
The current compensation fund, the 1992 Fund, offers a maximum of $286 million per oil spill incident. While the newly-proposed fund, known as the Supplementary Fund, would not replace the 1992 Fund, it could make available an additional maximum amount of $770 million per incident. This additional sum would make it possible in most cases to pay compensation at 100 % of the amount of damage agreed to between the IOPC Fund and the victim. In many previous cases, due to lack of funding, payment has not always coincided with the estimated oil spill incident damage.
The new protocol will come into effect three months after its ratification by eight nations that have received 450 million tonnes of contributing oil in a calendar year. The 1992 Fund currently has a membership of 81 nations. Contributions to the IOPC Funds are levied from entities in member nations that receive more than 150,000 tonnes of crude or heavy fuel oil in a year via sea transport. Typically, member nations do not pay into the fund themselves.
The IOPC Fund pays for what is defined as "pollution damage". This covers the cost of clean-up operations and property damage, as well as claims for consequential loss and "pure economic loss". For example, fishermen whose nets have become polluted are entitled to compensation for cleaning or replacing nets, and compensation for loss of income while they are unable to fish. Hotel owners at seaside resorts are entitled to compensation for loss of tourism income resulting from an oil spill. Compensation is also paid for measures taken to prevent or minimize pollution.
Further information regarding the IOPC Fund can be found at the fund's Website, www.iopcfund.org.