The new international regime of liability and compensation for oil pollution damage : status and trends

The new international legal regime of liability and compensation for oil pollution damage under the 1992 Conventions mainly consists of one definition, two tiers of compensation scheme and three principles. Firstly, one definition—pollution damage. This definition is the basis of criteria of determining the admissibility of claims under both CLC and Fund Convention. Secondly, two tiers: the shipowners’ liability under CLC and the supplementary IOPC Fund. Strict liability, higher liability limits and compulsory insurance form the basic principles of the regime. Recent developments in pollution compensation systems have two-sided effects on the new regime. On one hand, termination of the voluntary industry compensation schemes and compulsory denunciation of the 1969 and 1971 Conventions have strengthened and promoted the uniformity and universality of the new regime. On the other hand, the adoption and implementation of the OPA in the US has dramatically eroded the universality of the international regime. While the inconsistency of legislation and practice of some Member States of the CLC and Fund Conventions may have some negative affects on the implementation of the international regime it may also contribute to its gradual improvement. The recent proposal to increase the limits of the maximum compensation amounts available under the 1992 Conventions shows the inadequacy in the new regime and the necessity for improvement. The HNS Convention is a succession and development of the pollution liability and compensation regime. Its successful implementation in the future may have a reaction effect on the oil pollution regime and promote its further development. Although the new regime has played an important role in marine environmental protection it has some deficiencies and needs to be improved. From a long-term point of view, improvement or reform of the regime should be emphasized on the following major aspects: to reform the contribution and compensation system of the Fund with a view to re-apportioning various interests involved; to revise the definition of pollution damage in the 1992 Conventions in order to re-define the scope and criteria of compensation; to use successful experiences of pollution liability and compensation systems for reference in the reform of the oil pollution regime; to create a third tier of compensation scheme to supplement the existing international system