The international conventions related to ship pollution damage and now applicable in the shipping industry are mainly the 1992 Civil Liability Convention, the 1992 Fund Convention, the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 and the 2010 HNS Convention. Understanding the differences and interrelation between them can be important to handling claims for ship pollution damage in legal and practical scenarios. By introducing basics of the four conventions and analyzing their specific roles, this article intends to help clarify the international ship pollution damage compensatory regime.

 I.    Basics

1.   The 1992 Civil Liability Convention (1992 CLC)

As the result of the incident of grounding and oil pollution of the vessel Torrey Canyon in 1967, CLC Convention was adopted in 1969 by the Inter-government Maritime Consultative Organization (IMCO) then to properly compensate victims of such incidents. It was later amended by the Protocol of 1976, 1984, 1992 and the 2000 Amendments. The Protocol of 1976 replaced the Poincaré franc with the Special Drawing Rights (SDR) for the applicable unit of account. The Protocol of 1984 never came into effect under strict entry-into-force conditions and was superseded by the 1992 Protocol, which constitutes the most widely applicable regime nowadays. Amendments to the protocol was adopted in 2000 by the IMO to raise the compensation limits to up to 89.77 million SDR. As of September 2020, 141 countries have become Party to the 1992 CLC and China acceded to it in 1999.

2.   The 1992 Fund Convention (1992 FUND)

Compensation under the 1992 CLC was sometimes inadequate to the victims and financially challenging to shipowners in the event of a serious oil pollution incident. Consequently in 1971, the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage was adopted by the IMCO then as supplementary to the 1992 CLC, allocating part of the liabilities to cargo interests. It was later amended by the Protocol of 1976, 1984, 1992, 2003 and the 2000 Amendments.

Amendments to the convention were almost synchronized with those to the CLC Convention since both require considerations on relationship of the established compensation limits if any amendment to the amount is proposed. As was the case with the CLC Convention, Protocols to the 1971 Convention were adopted in 1976 and 1984, but were superseded by the 1992 Protocol, which is the most applicable regime now and the amended convention is known as the 1992 FUND.

The Amendments 2000 were adopted by the IMO to raise the maximum amount of compensation payable from the International Oil Pollution Compensation (IOPC) Fund. As of September 2020, 118 states have become Party to the 1992 FUND and Hong Kong China was one of them.

The 2003 Protocol established an International Oil Pollution Compensation Supplementary Fund, which aims to supplement the compensation available under the 1992 Civil Liability and Fund Conventions with an additional, third tier of compensation. The total amount of compensation payable for any one incident will be limited to a combined total of 750 million SDR. The Protocol was not compulsory to Contracting Parties to the 1992 FUND and 32 states have become member as of September 2020.

3.   The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (2001 BUNKER)

The 1992 CLC and 1992 FUND are applicable to bulk oil cargos and do not address ship oil pollutions. With the increase in number of ships and capacity of tankers, damage to the environment has become increasingly urgent a problem in the event of an oil pollution incident. The 2001 Bunker Convention was then adopted by the IMO and as of September 2020, there have been 99 Contracting Parties with China being one of them.

4.   The 2010 HNS Convention (2010 HNS)

With the compensation regime for oil pollution damages under above international conventions gradually established, marine pollution caused by hazardous and noxious substances became an issue of international concern. The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), adopted by the IMO in 1996, was not in force and superseded by 2010 Protocol, which also is not yet in force. As of September 2020, only 5 states acceded to the 2010 HNS, excluding China.

II.    Comparison

The four conventions are similar in content framework with consistency found in wording of certain articles. The table below is prepared to compare the differences between them.

III.    Interdependence

The 1992 CLC and the 1992 Fund jointly constitute an adequate and effective compensation regime to ensure that victims of oil pollution incidents caused by ships carrying bulk oil cargoes are provided. Specifically, the 1992 CLC establishes the shipowner’s liability as the first tier of compensation, while the Fund Convention provides the victims with a second tier of compensation from the cargo interests with the supplementary fund establishing a third tier of compensation.

According to Article 4(1) of the 2001 Bunker, the Convention is a supplement to the 1992 CLC and is applicable to pollution damage caused by shipborne fuel oil outside of the 1992 CLC. In other words, where the pollution damage to which the 1992 CLC applies, the bunker convention shall not apply. Notice that it is the 1992 CLC that apply to pollution damage caused by ships carrying bulk oil as cargo.

With the oil pollution compensation regimes gradually established, 2010 HNS establishes a two-tier system for compensation to be paid in the event of accidents at sea involving noxious and hazardous substances, clarifying liabilities of shipowners and cargo interests. Considering the major pollution done after the Sanchi incident, it has become even more imperative than ever for the convention to enter into force.

IV.    Conclusion

With protection of marine environment attached with increasing importance by the international community, the IMO has been making continuous efforts to make the ocean cleaner and make navigation safer by formulating and improving these conventions. The compensation regime has established a relatively complete legal system in international maritime legislation that balances the pollution of the marine environment caused by ships. Studying the international conventions and legislation on compensation for ship pollution damage is of great benefit to the establishment and improvement of a regime of our own.