Cargo Ships Oil Pollution

 

Oil pollution caused by cargo ships was not a matter of serious international concern until the mid-1950s. The issue gained attention when an international conference was held in 1954 to discuss the prevention of oil pollution in the sea. However, it was not until the catastrophic MT Torrey Canyon incident in 1967 that a sense of urgency for international action arose. The MT Torrey Canyon was an LR2 Suezmax class oil tanker, boasting a colossal cargo capacity of 118,285 long tons of crude oil. Tragically, she met her untimely demise when she ran aground along the picturesque western coast of Cornwall, United Kingdom on 18th March 1967, unleashing an unprecedented environmental catastrophe. Notably, the SS Torrey Canyon had the dubious distinction of being the largest vessel to have ever been wrecked at the time of the incident. Since then, oil pollution has been a significant global challenge. The extent of the damage caused by a single oil spill from a vessel was demonstrated by the incident, highlighting the magnitude of the problem. Today’s environmentally conscious society puts increasing pressure on governments to take action to address the harm caused by such oil spills.

There exist three primary international conventions aimed at addressing oil pollution caused by cargo ships:

1- The International Convention for the Prevention of Pollution from Ships 1973. (MARPOL 1973 and its 1978 Protocol)

2- The 1969 International Convention on Civil Liability for Oil Pollution Damage (CLC) was subsequently enhanced by the 1992 convention

3- The 1971 International Convention on the Establishment of an International Fund for Oil Pollution Damage (Fund Convention) was similarly enhanced by the 1992 convention

Additionally, we shall briefly contemplate upon two voluntary accords that were solely implemented by the oil and tanker industries’ initiatives but were subsequently terminated following the release of the 1992 Protocol to the CLC (International Convention on Civil Liability for Oil Pollution Damage); it can be contended that the voluntary agreements served as a precursor to the 1992 Protocol. The two voluntary agreements:

1- TOVALOP (The Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution Damage)
2- CRISTAL (The Contract regarding an Interim Supplement to Tanker Liability for Oil Pollution Damage)

Cargo Ships Oil Pollution Problem

Oil pollution has remained a paramount concern ever since the MT Torrey Canyon disaster. In March 1978, a decade after the aforementioned tragedy, the significantly larger MT Amoco Cadiz spilled its crude oil onto the shores of Brittany due to complications with its steering gear. This occurred when the vessel was only 13 miles away from the French coast, just prior to its entry into the traffic routing system in the English Channel, bound northeast. A few weeks subsequent to the MT Amoco Cadiz incident, the MT Eleni V encountered a collision with another vessel off the eastern coast of England, causing it to split in half and disgorge a significant portion of its oil cargo, polluting the English coastline.

Oil Pollution Act 1990 (OPA90)

The catastrophic discharge of over 10 million gallons of crude oil from the MT Exxon Valdez in 1989 was undoubtedly the catalyst that prompted the United States Congress to pass the Oil Pollution Act of 1990 (OPA90), which was enacted independently of any international conventions.

The MT Braer incident, which resulted in the spillage of its oil cargo on the shores of the Shetland Islands in 1993, prompted the Donaldson Inquiry into the prevention of pollution from merchant shipping. The inquiry ultimately produced a report titled “Safer Ships, Cleaner Seas”. The MT Sea Empress ran aground off the coast of West Wales in 1997, spilling over 72,000 tonnes of oil. Following the incident, the Sea Empress Environmental Evaluation Committee was established to evaluate the clean-up operation. The committee advocated for coastal councils to be granted legal responsibility for shore clean-up operations and made a similar recommendation to Lord Donaldson’s previous proposal, which unfortunately was never implemented.

Additional recommendations and measures were implemented at the time, including the Government’s procurement of three emergency towing tugs stationed in the Strait of Dover, the Minches off northwest Scotland, and the Western Approaches off Scotland to assist distressed ships. However, these tugs were only put on standby between October and March, drawing criticism from environmentalists who believe that the standby should be in place year-round. The Royal Society for the Protection of Birds also accused the government of dragging their feet on suggestions for the creation of marine environment high-risk areas around the coast. These high-risk areas, which would impose stricter regulations on shipping and other activities, were a crucial recommendation of the Lord Donaldson Inquiry.

International Convention on Civil Liability for Oil Pollution 1992 (CLC)

The MT Torrey Canyon disaster of 1967, which posed a significant threat of pollution to the United Kingdom’s coastline on an unprecedented scale, raised awareness not only in Britain but also around the world about the lack of facilities available to handle such a crisis. The absence of an international agreement establishing liability and appropriate compensation for affected parties was also brought to the forefront. As a result, it was not a coincidence that the International Convention on Civil Liability for Oil Pollution (CLC) was introduced in 1969, although it did not take effect until 1975 after the minimum number of states required by the Convention had ratified or adopted it.

The International Convention on Civil Liability for Oil Pollution 1969 (CLC), which was established in Brussels, imposed liabilities on shipowners. These liabilities were comprehensive enough to reflect the gravity of the global pollution situation, but not so extreme as to render them virtually uninsurable, thereby defeating their purpose. Liability was defined as strict, meaning that it was not dependent on fault, and applied in cases where persistent oil was discharged into coastal waters, causing damage to third-party property.

The United Kingdom adopted the International Convention on Civil Liability for Oil Pollution 1969 (CLC) by the Merchant Shipping Oil Pollution Act 1971.

The International Convention on the Establishment of an International Fund for Oil Pollution Damage 1971 (Fund Convention) and the International Convention on Civil Liability for Oil Pollution 1969 (CLC) were both founded on the notion that the expenses resulting from a major oil spill should be shared between the shipowner and the oil company (cargo owner). It is important to acknowledge that a substantial portion of the world’s tankers are either directly or indirectly owned by oil companies, and the remaining independent fleets exist primarily because the oil companies require them. Unlike dry cargo vessels, tankers are limited to transporting only one commodity and cannot switch to others, such as from fertilizers to steel, as bulk carriers can in response to changes in the market. The original regulations were supplemented in 1992 by new Conventions, namely the 1992 Civil Liability Convention (CLC) and 1992 Fund Convention. The Fund conventions also established the International Oil Pollution Compensation Funds (IOPC 1992), an intergovernmental organization responsible for administering the compensation regime.

The 1992 Civil Liability Convention and 1992 Fund Convention are limited in scope to “persistent oil” and explicitly exclude light oils, such as gasoline, light diesel, or kerosene. Additionally, these conventions only apply to tankers and not to bunkers carried on dry cargo ships. In accordance with the 1992 convention, compensation is available for expenses associated with successfully taking measures against a “grave and imminent threat of pollution” and managing actual pollution.

 

Purpose of the International Convention on Civil Liability for Oil Pollution 1992 (CLC)

The main objective of the Convention is to establish an international framework with a consistent basis of liability for:

1- Damage is done by pollution caused by the escape or discharge of oil and
2- Cost of measures taken reasonably to mitigate such damage

The International Convention on Civil Liability for Oil Pollution Damage (CLC), by design, does not encompass the expenses incurred in preventing oil leaks, even if no such incident has taken place. Please note that this was never intended to be within the ambit of CLC’s coverage. The International Convention on Civil Liability for Oil Pollution Damage (CLC) is exclusively designed to cover the liabilities of seagoing ship owners, and not of any charterers, regardless of their type. Its provisions are only applicable when ships are transporting oil as cargo, and do not extend to situations where there is a discharge or escape of oil used as bunker fuel during a ballast voyage. However, it does apply to incidents of a bunker ‘spill’ if the ship involved is laden with cargo at the time.

The Shipowner’s Liability under One of the most noteworthy aspects of the Convention pertains to this provision. The 1976 (London) Convention on Limitation of Liability does not cover damages that arise from oil pollution. This kind of claim has always been regarded as a unique maritime issue, likely due to the peculiar nature of the damage and the vast scale of some pollution incidents. The provisions for limitation under the International Convention on Civil Liability for Oil Pollution Damage (CLC) are outlined in Article V.

The liability under the International Convention on Civil Liability for Oil Pollution Damage (CLC) is strict, however, there are certain defined exceptions to this strict liability. In other words, the situation falls under the category of ‘strict liability’, but not ‘absolute strict liability’, where no defense would be admissible. As discussed earlier, the defendant being sued must establish that they fall within one of the set-out defenses. Under the the International Convention on Civil Liability for Oil Pollution Damage (CLC), if the discharge or escape of oil from the ship in question is solely due to any one of the following reasons, then the shipowner may evade liability:

1- Act of God (an exceptional phenomenon of nature beyond the possibility of human prevention)
2- Act of war or hostilities
3- International act or omission of some third party
4- Negligent act or piece of wrongdoing by any government

Shipowners Limitation of Liability 

One of the most noteworthy aspects of the Convention pertains to this provision. The 1976 (London) Convention on Limitation of Liability does not cover damages that arise from oil pollution. This kind of claim has always been regarded as a unique maritime issue, likely due to the peculiar nature of the damage and the vast scale of some pollution incidents. The provisions for limitation under the International Convention on Civil Liability for Oil Pollution 1992 (CLC) are outlined in Article V.

The International Convention on Civil Liability for Oil Pollution 1992 (CLC) (Article V) stipulates that a shipowner shall be entitled to limit his liability under the Convention in respect of any one incident. There are maximum but very high limits of liability depending on vessel size:         

Under 5,000 GT – 3 million SDR
5,000 to 140,000 GT – 3 million SDR plus 420 SDR per GT 
Over 140,000 GT 59.7 million SDR 

There is a simplified procedure for increasing the limits under the International Convention on Civil Liability for Oil Pollution 1992 (CLC).

If the incident arises due to the shipowner’s deliberate intention or actual recklessness, then the limitation of liability will be forfeited.

It is mandatory for all tankers carrying more than 2,000 tonnes of persistent oil as cargo to have a certificate on board as proof of appropriate insurance coverage.

What is Certificate of Financial Responsibility (COFR)?

Certificate of Financial Responsibility (COFR) 

The United States has not signed the Conventions and instead has enacted its own law called The Oil Pollution Act 1990 (OPA90), which aims to achieve similar ends, albeit with potentially higher penalties in some cases. Any vessel entering the waters of the United States is required to have a Certificate of Financial Responsibility (COFR) issued by its insurers.

According to English law, when referring to a ship’s tonnage under the International Convention on Civil Liability for Oil Pollution 1992 (CLC) (Article V), it means the Registered Tonnage (RT) plus the deduction for engine room space. However, under the 1984 Protocol, the ship’s tonnage is determined as the gross tonnage (GT), which is calculated in accordance with the tonnage measurement regulations in Annex 1 of the International Convention on Tonnage Measurement of Ships 1969.

The Scope of the International Convention on Civil Liability for Oil Pollution 1992 (CLC)

The Convention’s main focus is on territorial jurisdiction. This implies that it is crucial to identify the territory that has been impacted by the pollution. If the pollution has affected the territorial waters of a country that has ratified the Convention, i.e., a contracting state, then the Convention becomes applicable. The exact location of the spill or discharge is not a relevant factor. To determine whether the International Convention on Civil Liability for Oil Pollution 1992 (CLC) is applicable, other considerations include whether the vessel flying the flag of a contracting state or using ports or offshore terminals, or territorial waters of a contracting state, is involved in the spill or discharge.

International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention)

The primary aim of the International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention) is to create a fund that can compensate individuals who have suffered from oil pollution damage but were unable to obtain full reimbursement under the provisions of the International Convention on Civil Liability for Oil Pollution 1992 (CLC). Another objective of this convention is to allow ship owners to seek reimbursement for the expenses they have incurred while engaging in voluntary cleaning-up operations, which may exceed the limits imposed by the International Convention on Civil Liability for Oil Pollution 1992 (CLC).

The first objective is especially significant given that the International Convention on Civil Liability for Oil Pollution 1992 (CLC) has not been adopted universally. Consequently, there are regions where the CLC may not be relevant in situations involving pollution. In such instances, the International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention) becomes necessary and takes over where the International Convention on Civil Liability for Oil Pollution 1992 (CLC) falls short.

The original Fund Convention, also known as the International Convention on the Establishment of an International Fund for Oil Pollution Damage, was adopted in 1971. However, it only came into effect in 1978 after fulfilling a condition precedent. This condition stipulated that eight states needed to ratify its provisions and that the parties who would be responsible for contributing to the fund had received a minimum of 740 million tons of contributing oil in the preceding calendar year.

 

Application of the International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention)

Similar to the International Convention on Civil Liability for Oil Pollution 1992 (CLC), the International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention) only applies when the vessel involved in the incident is carrying persistent oil in bulk as cargo at the time of the incident. However, it is important to note that the spilled oil, which causes pollution, can be either cargo or bunkers.

Contributions to the Fund

The funds are generated through contributions made by crude and fuel oil importers who are residents of states that have accepted the Convention. The contribution made by each importer is determined by the amount of annual tonnage of oil they receive. It is important to note that the oil must have been transported via sea to the importing country. Any person who has received a total quantity exceeding 150,000 tons in the previous calendar year must make contributions. An Assembly, which is established under the International Convention on the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention Article 4), has the authority to evaluate contributions based on a fixed amount per ton of ‘contributing’ oil received by the party responsible for contributing. Additionally, the Assembly is entrusted with the responsibility of ensuring that there are sufficient liquid funds available by creating a budget that estimates income and expenses (Article 12).

What Compensation and Indemnity is covered by the Fund Convention?

The funds are designated to compensate individuals who were unable to receive complete and adequate compensation under the International Convention on Civil Liability for Oil Pollution 1992 (CLC) for the following reasons:

1. Liability for damage does not arise under the International Convention on Civil Liability for Oil Pollution 1992 (CLC).
2. The shipowner is liable under the International Convention on Civil Liability for Oil Pollution 1992 (CLC) and is financially incapable of meeting their obligations in full. Additionally, any financial security or guarantees they may have provided, in accordance with CLC, are insufficient to fully compensate for the damage caused by the incident.
3. The damage or loss suffered exceeds the maximum liability of the tanker owner under the International Convention on Civil Liability for Oil Pollution 1992 (CLC). In this context, damage includes expenses reasonably incurred or sacrifices made to minimize pollution damage.

When is the Fund exempt from any liabilities?

1- If the claimant is unable to prove that the source of the spillage was a ship or ships.
2- If the damage results wholly or partially from an intentional or negligent act of the claimant.
3- If the pollution damage is the direct result of an act of war or hostilities, civil war, or insurrection.
4- If the oil has escaped from a warship or a vessel on government service as opposed to commercial service.

The termination of legal proceedings against the Fund

According to the Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention Article 6), any legal action regarding damages must be initiated within three years of the occurrence of the incident, failing which, the claimant’s rights shall be deemed to have been forfeited. This stipulation applies to both those affected by pollution and tanker owners seeking compensation under Article 5. Furthermore, no legal action may be instituted after the lapse of six years from the date of the incident that resulted in the damages. 

The Establishment of an International Fund for Oil Pollution Damage 1992 (Fund Convention Article 6(2)) guarantees the right of a tanker owner or their guarantor to seek compensation from the Fund until six months have passed since they became aware of any legal action brought against them under the International Convention on Civil Liability for Oil Pollution 1992 (CLC).

Cargo Ship Oil Pollution and Common Law Liability (Trespass)

When deliberating on the issue of oil pollution in relation to international agreements and the corresponding legislation, it is important to remember that liability for pollution may also arise under Common Law. In essence, pollution denotes an unwarranted interference with the enjoyment or possession of a property, be it land or sea. Common Law liability for pollution may arise under one or more of the following torts: trespass, public nuisance, private nuisance, or negligence. However, if a claimant intends to sue under Common Law in relation to oil pollution, it may be quite challenging to prove the elements of the relevant tort.

MT Esso Bernicia (1978) Case

The MT Esso Bernicia (1978) case presents a fascinating pollution scenario that emerged under the auspices of the TOVALOP (The Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution Damage) regime. This instance illuminates the complications that may arise with regard to oil spills and clean-up measures and their corresponding consequences. Additionally, this case underscores some of the obstacles imposed by fundamental concepts in English law, particularly the notion of “Pure Economic Loss”. In English law, it is challenging, if not impossible, to make a claim for pure economic loss when the financial loss is not dependent on some physical damage, owing to policy reasons. It is crucial to keep in mind that legal concepts are not self-contained and that when analyzing a subject such as oil pollution and the distinct regulations that apply to it, one must not neglect the potential applicability of other legal principles. In a real court or arbitration scenario, even if the primary matter under consideration is something like oil pollution or salvage, it is highly probable that some fundamental Common Law principles will also be relevant and applicable.

In the case of MT Esso Bernicia (1978), the MT Esso Bernicia tanker, while in ballast, collided with the jetty at the Sullom Voe terminal in the Shetland Islands, resulting in the spillage of 1,174 tons of bunker oil. The unfortunate incident had an adverse impact on the sheep grazing on the foreshore, and the terminal’s operator, BP, incurred substantial expenses in their efforts to clean up the mess.

After paying around £500,000 to crofters for the harm caused to their sheep and over £3.5 million to BP for cleaning up the spill, MT Esso Bernicia brought a legal action to recover these expenses. The company also sought £170,000 or more in damages for its own losses, which included the value of the lost bunker oil, vessel repairs, and consequential losses. The defendant, in this case, was Hall Russell & Company (Shipyard), one of three tugs that were assisting in berthing the MT Esso Bernicia when a coupling blow-out triggered a fire, leading to the tugboat abandoning its efforts and resulting in the previously mentioned damages.

The House of Lords had no issue with Esso’s claims for damages related to the damage sustained by the MT Esso Bernicia, the loss of oil, and consequential losses. It was also held that Esso could potentially claim the amount it was legally obligated to pay the owner of the jetty for the collision, based on Scottish law, which differs from English law. However, the other claims made by the owners of MT Esso Bernicia were dismissed in the lower courts, and their appeal on these claims was unsuccessful.

Esso attempted to argue that their payments to the crofters and BP constituted a loss to themselves. However, the difficulty with this argument was that the loss was purely economic. Although the physical damage caused to the sheep and terminal was real, it was not damage to Esso itself. Esso’s payments were due to the physical damage caused to the sheep and terminal and were made in accordance with the TOVALOP (The Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution Damage) agreement. Therefore, their loss was economic in nature, as the money they paid out for the damage to the sheep and terminal was not a direct result of physical damage to themselves.

This ruling aligns perfectly with the principles of the Law of Tort. If a plaintiff has suffered economic loss and property damage in the same incident, the fact that they have also sustained property damage does not necessarily support their claim for economic loss unless the economic loss is a direct consequence of the property damage, rather than simply being an additional loss.

Given this, one may wonder why Esso was permitted to claim the sum they were legally obliged to pay the owner of the jetty for the collision. This payment was not a direct result of the damage to the ship, but rather a consequence of the damage to the jetty, despite the likelihood that the two harms occurred together. The House of Lords arrived at an ambiguous ruling, indicating that this formed a basis for a claim in tort rather than a claim for release within the Scottish legal context. Nevertheless, two points should be emphasized:

1. Esso’s payment to the jetty owner helped to decrease the defendant’s liability because the jetty owner would have been obligated to credit Hall Russell & Company (Shipyard) for any funds received from Esso.
2. Additionally, the payment made by Esso to the jetty owner was not voluntary, but rather required by Statute.

Under English law, one could argue that this scenario would give rise to a claim for a “quasi-contractual indemnity” or what is known as “restitution” and “unjust enrichment”. However, regardless of the legal concepts applied, Esso was able to successfully recover this payment.

Despite this, the question arises as to why Esso was unable to make similar claims for the other amounts on the same basis. The House of Lords stated that Esso’s payment:

1. Did not release the defendant from their liability to the crofters and BP.
2. Were voluntary, rather than required by law.

Regarding the first point, it is highly unlikely that any court would order Hall Russell & Company (Shipyard) to make a payment of damages to a party who had already received compensation for the harm they suffered.

Likewise, it is not entirely accurate to refer to Esso’s payment under TOVALOP (The Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution Damage) as “voluntary.” Although the agreement itself is entered into voluntarily, once it is established, it becomes legally binding. Furthermore, the payment made to BP was enforced through an arbitration award, which is legally binding and enforceable.

It is important to note that under the Merchant Shipping Oil Pollution Act, which incorporates the International Convention on Civil Liability for Oil Pollution (CLC), a tanker owner is solely responsible for paying for pollution damage resulting from oil, but only if the oil in question is carried as cargo. In the MT Esso Bernicia case, however, the vessel was transporting ballast and the oil that spilled was bunker oil.

International Tanker Owners Pollution Federation (ITOPF) 

The International Tanker Owners Pollution Federation (ITOPF) is a non-profit organization based in London, involved in all aspects of preparing for and responding to oil spills from tankers. The organization’s history can be traced back to 1968, following the MT Torrey Canyon incident. ITOPF was established to administer the voluntary compensation agreement, TOVALOP (The Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution Damage), which ensured that those affected by oil spills received adequate and prompt compensation. However, TOVALOP came to an end on February 20th, 1997, resulting in changes to the organization’s membership and funding arrangements.

Currently, the International Tanker Owners Pollution Federation (ITOPF) dedicates a significant amount of resources to a broad range of technical services, with the most crucial being their response to oil spills. ITOPF’s response team is always on standby to assist with marine oil spills globally. Typically, this service is rendered on behalf of their tanker-owner members and their oil pollution insurers, usually one of the P&I Clubs. They may also offer assistance at the request of governments or international agencies, such as the International Oil Pollution Compensation Fund. Other services provided by ITOPF include damage assessment, contingency planning, training, and information. The Federation maintains a vast library, and numerous databases, and generates technical publications and videos.

 

International Convention For The Prevention Of Pollution From Ships 1973 (MARPOL 1973 and 1978 Protocol)

The International Maritime Organization (IMO), a United Nations agency, developed MARPOL in response to the growing concern that existing regulations on oil pollution prevention were insufficient, given the ever-increasing size of oil carriers and the quantity of oil and liquid chemicals being transported by sea. MARPOL, or the International Convention for the Prevention of Pollution from Ships, was designed to address this issue. The MARPOL convention was initially enacted into English law through Section 20 of the Merchant Shipping Act 1979 in the United Kingdom. The Convention was adopted by a minimum of 15 states (which was attained by October 1983), and consequently, implementation was carried out in the United Kingdom through the Merchant Shipping Prevention of Oil Pollution Order 1983.

Some of the principal features of MARPOL include:

1. A prohibition on the discharge of oil or oily mixtures from ships into the sea, with certain exceptions.
2. Mandatory requirements for ships to be equipped with an oil filtering system, to maintain an oil record book, and to conduct regular inspections to prevent oil pollution.
3. Guidelines for the reception of oily waste, garbage, sewage, and other harmful substances generated on board ships.
4. Limitations on emissions of harmful substances such as sulfur oxides and nitrogen oxides from ships, with designated emission control areas.
5. Regulations for the transportation of harmful substances such as chemicals, liquefied gases, and noxious liquids in bulk.

The MARPOL 1973 mandates the implementation of Crude Oil Washing (COW), which entails the utilization of high-pressure crude oil jets for the purpose of tank cleaning. This practice yields favorable results, as it significantly diminishes the amount of oil left on board post-discharge, thereby mitigating the risk of pollution. Vessels that are newly constructed to transport crude oil and have a capacity exceeding 20,000 DWT (Deadweight Tonnage) are obligated to be equipped with both Segregated Ballast Tanks (SBT) and Crude Oil Washing (COW). Additionally, extant crude oil carriers with a DWT of 40,000 or more must have either Segregated Ballast Tanks (SBT) or Crude Oil Washing (COW) installed.

According to MARPOL 1973, newly constructed tankers with a weight of 80,000 DWT or more are required to be outfitted with Segregated Ballast Tanks (SBTs). This allows the vessel’s captain to take on seawater after discharging the cargo, thereby ensuring stability, strength, and maneuverability. The introduction of SBTs was intended to prevent the discharge of contaminated ballast water into the ocean, a common occurrence when ballast water cargo is transported in tanks, which leads to the mixing of oil and water. Another key provision of MARPOL 1973 pertains to vessels with a Gross Register Tonnage (GRT) of 400 or greater, which are required to have oil-from-water separation equipment or a filtering system installed. Furthermore, any ship that exceeds 10,000 GRT must be equipped with an oil discharge monitoring and control system.

1978 Protocol

Following a surge in tanker accidents during the mid-1970s, a conference on tanker safety and pollution prevention was convened in 1978. This resulted in the establishment of a Protocol that mandated the installation of Segregated Ballast Tanks (SBTs) on newly constructed tankers with a deadweight tonnage of 20,000 or more. Additionally, the SBTs must be strategically positioned to protect the cargo tanks from damage in the event of a collision or grounding.

The 1978 Protocol imposes rigorous regulations concerning inspection and certification, aimed at reinforcing and enforcing the 1973 Convention. This includes conducting periodic surveys at intervals of no more than five years, as well as an initial survey prior to the ship’s commissioning, or, in the case of existing vessels, before they can be issued an International Oil Pollution Prevention Certificate.

Tankers that operate solely between designated ports that have sufficient reception facilities for the convenient transfer of tank washings and ballast water to onshore facilities may be exempt from complying with the requirements for Crude Oil Washing (COW), Segregated Ballast Tanks (SBTs), or Clean Ballast Tanks (CBTs). However, this exemption only applies if the tanker trades exclusively within national boundaries or areas that are designated and defined by the Convention.

Under MARPOL, governments of contracting countries are required to furnish adequate reception facilities for oily residues within twelve months of the Convention’s entry into force, which was in October of 1983. Such facilities must be provided at designated ports falling under the following categories:

1. Ports where tankers have just completed a short sea passage after loading crude oil.
2. Ports where more than 1,000 tons of non-crude oil is loaded per day.
3. Ports with tank cleaning or repair facilities.
4. Ports that handle tankers equipped with sludge tanks.
5. All ports that handle oily bilges.
6. All ports that handle bulk cargo, for oil residues.

It should be noted that there are no provisions for sanctions to be imposed on tanker owners who are adversely affected by a contracting country’s failure to adhere to the aforementioned requirements.

Non-Compliance Penalties

Each contracting State is responsible for establishing penalties within its legal system for non-compliance with the Convention’s provisions. Article 4 (4) stipulates that contracting States must apply penalties that are severe enough to deter violators of the Convention. In English law, criminal sanctions are typically imposed to regulate an individual’s relationship with the State in cases where their behavior is deemed harmful to the community’s safety and well-being. If a breach of these rules occurs, the individual is automatically subject to criminal prosecution. The sanctions and terminology used in criminal cases differ significantly from those used in civil cases, where the focus is on compensating the injured party. The primary aim of criminal liability sanctions is to punish the wrongdoer, act as a deterrent to potential offenders, or offer retribution to society. Section 20 of the Merchant Shipping Act 1979 prescribes a fine and/or imprisonment as penalties for any breaches of the Convention.

Amendments to MARPOL (Annex 1 Regulation 13G)

In 1999, MT Erika, en route from Rotterdam to Italy, broke apart in a storm off the French coast, resulting in the spillage of approximately 14,000 tonnes of its 37,000-tonne heavy fuel oil cargo. Heavy fuel oil can be an even more hazardous pollutant than crude oil due to its viscous and adhesive properties, which makes it difficult to clean up. The spillage had a devastating impact on the coast of Brittany, severely polluting not only recreational beaches but also shellfish stocks that were a vital source of income for the area.

The casualty involving MT Erika triggered a significant international response, with various entities being blamed for the incident, including the shipowners (who were a one-ship company), the French charterers (TotalFina), the flag state (Malta), the ship’s classification society (Registro Italiana), and even the International Association of Classification Societies (IACS), whose purpose is to monitor their member societies. Ultimately, the role of the classification society was deemed to be the most responsible by many. The incident also raised concerns about the effectiveness of Port State Control, particularly among members of the European Union. As a result, the EU considered adopting unilateral anti-pollution regulations, modeled after the United States Oil Pollution Act of 1990 (OPA90).

The International Maritime Organization (IMO) members rose to the occasion and addressed the concerns by revising Regulation 13G of Annex I of MARPOL at their 45th meeting in October 2000. The revised MARPOL regulation was adopted on 27th April 2001, with an effective date of 1st October 2002. Under the latest revised convention, all single-hulled tankers, with a few exceptions, must be replaced by double-hulled tankers by the year 2015. This deadline is commonly referred to as the “drop-dead phase-out date” within the industry. To mitigate the impact, a phase-out schedule was implemented, beginning in 2003, which required tankers built before 1973 to be scrapped. Subsequently, in 2004, tankers constructed in 1974 and 1975 were required to be decommissioned, and so on until all single-hull tankers are retired by 2015.

   

Compulsory Ship Insurance

Insurance is a crucial factor in the shipping industry, particularly concerning oil pollution. According to English law, shipowners are obligated to obtain mandatory insurance coverage for oil pollution. The Merchant Shipping (Oil Pollution) Act 1971, which includes the International Convention on Civil Liability for Oil Pollution Damage (CLC), specifically addresses the issue of mandatory insurance. Article VII of the International Convention on Civil Liability for Oil Pollution Damage (CLC) stipulates that the owner of a vessel registered in a contracting State, such as the United Kingdom, that carries over 2,000 tons of oil in bulk as cargo must maintain insurance or other financial security. This may include bank guarantees or certificates issued by an international compensation fund, to cover their liability for pollution damage under the Convention. The amount of insurance required is determined by applying the prescribed limits of liability, as outlined in Article 5, paragraph 1 of the Convention.

English law now provides clearer guidelines on the regulations that must be followed through the Oil Pollution (Compulsory Insurance) Regulations 1981 (SI 1981). These regulations specify the mandatory insurance requirements to be followed to comply with the law.

Third-party risks associated with oil pollution fall under the purview of the shipowners’ Mutual Insurance Associations, commonly known as P&I Clubs (Protection and Indemnity Clubs). These associations act as third-party liability underwriters, providing coverage for damages, costs, and expenses related to oil pollution, including clean-up costs. The P&I Clubs Protection and Indemnity Clubs) issue the required guarantee for CLC-required insurance coverage for oil cargo-carrying tankers, commonly referred to as the Blue Card. This certificate confirms that the vessel in question has a liability insurance policy in force, covering the International Convention on Civil Liability for Oil Pollution Damage (CLC) liabilities.

In addition to the P&I Clubs Protection and Indemnity Clubs), there is also a separate Mini Club established to specifically address oil pollution risks, with exclusive membership for tanker owners. This club is known as the International Tanker Indemnity Association Ltd. (ITIA).

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How did MARPOL come about? What is MARPOL?

MARPOL, short for the International Convention for the Prevention of Pollution from Ships, came about as a result of growing international concern for the impact of shipping activities on the marine environment. The primary objective of MARPOL is to minimize pollution from ships, including oil spills, harmful substances carried in bulk, sewage, garbage, and air pollution.

The origins of MARPOL can be traced back to a series of international conferences and agreements, starting with the 1954 International Convention for the Prevention of Pollution of the Sea by Oil (OILPOL). OILPOL aimed to address the issue of oil pollution caused by the growing maritime oil transportation industry.

In the 1960s and 1970s, there were several high-profile oil spills, such as the Torrey Canyon disaster in 1967 and the Amoco Cadiz spill in 1978, which intensified global awareness of the environmental risks associated with maritime transportation. In response, the International Maritime Organization (IMO) started working on a more comprehensive convention that would address a wider range of pollutants.

The result was the 1973 International Convention for the Prevention of Pollution from Ships. However, it was not until 1978, when a Protocol was added, that the convention came into effect. The combined convention and protocol are known as MARPOL 73/78.

MARPOL consists of six technical annexes, each addressing a different aspect of pollution:

1. Annex I – Regulations for the Prevention of Pollution by Oil
2. Annex II – Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk
3. Annex III – Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form
4. Annex IV – Prevention of Pollution by Sewage from Ships
5. Annex V – Prevention of Pollution by Garbage from Ships
6. Annex VI – Prevention of Air Pollution from Ships

MARPOL is an evolving convention, with amendments made over the years to address emerging concerns and to adopt new technologies and practices to reduce pollution from ships. The convention has been widely adopted and has played a significant role in reducing pollution from shipping activities worldwide.

Since its inception, MARPOL has made substantial progress in reducing the pollution caused by shipping activities. The convention has been ratified by the majority of maritime nations, and its regulations have been incorporated into national laws and regulations, making it an essential aspect of the international maritime framework.

Over the years, various amendments and updates have been made to MARPOL to keep up with technological advancements, new environmental challenges, and increased understanding of the impacts of pollution on the marine environment. Some notable amendments include:

1. The 1992 amendments to Annex I, which introduced the requirement for double-hull design in oil tankers to reduce the risk of oil spills in the event of an accident.
2. The 2004 Ballast Water Management Convention, which addressed the issue of invasive species carried in ships’ ballast water and aimed to prevent their introduction to non-native ecosystems.
3. The 2005 amendment to Annex VI, which established more stringent controls on air pollution from ships, including limits on sulfur oxide (SOx) and nitrogen oxide (NOx) emissions, as well as the introduction of Emission Control Areas (ECAs) in designated sea areas with stricter emission standards.
4. The 2011 Energy Efficiency Design Index (EEDI) for new ships, which aimed to reduce greenhouse gas emissions by setting minimum energy efficiency standards for different ship types and sizes.

In addition to the formal amendments, the IMO has also issued numerous guidelines and circulars to provide detailed guidance on the implementation and enforcement of MARPOL regulations. These guidelines assist flag states, port states, shipowners, and other stakeholders in understanding their responsibilities and ensuring compliance with the convention.

Despite the progress made by MARPOL, there are still ongoing challenges in effectively reducing pollution from ships. Some of these challenges include inconsistent enforcement by flag states, the lack of adequate port reception facilities for waste disposal, and the need for continuous improvement in pollution prevention technologies.

To address these issues and maintain the effectiveness of MARPOL, the IMO continues to work on new regulations, guidelines, and initiatives. These efforts, combined with the commitment of the maritime industry and the cooperation of member states, are crucial in protecting the marine environment and ensuring the sustainable development of the shipping sector.

When did TOVALOP and CRISTAL cease to operate, and why?

TOVALOP (Tanker Owners’ Voluntary Agreement Concerning Liability for Oil Pollution) and CRISTAL (Contract Regarding an Interim Supplement to Tanker Liability for Oil Pollution) were voluntary agreements created by the International Tanker Owners Pollution Federation (ITOPF) to address the liability and compensation issues related to oil pollution caused by tanker accidents. TOVALOP was established in 1969, while CRISTAL came into existence in 1971.

Both TOVALOP and CRISTAL ceased to operate on August 20, 1996. The primary reason for their termination was the development and entry into force of two international conventions that provided a comprehensive legal framework for addressing liability and compensation related to oil pollution: the International Convention on Civil Liability for Oil Pollution Damage (CLC) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND).

The CLC, adopted in 1969 and amended in 1992, established a strict liability regime for shipowners, making them responsible for any pollution damage caused by their tankers. The FUND, adopted in 1971 and also amended in 1992, created a supplementary compensation system, funded by oil importers, to provide additional compensation when the amount available under the CLC was insufficient to cover the full extent of the damages.

The entry into force of the amended CLC and FUND conventions in 1996 made the TOVALOP and CRISTAL agreements redundant. These conventions provided a more robust and legally binding framework for addressing liability and compensation for oil pollution incidents, making voluntary schemes unnecessary. Consequently, TOVALOP and CRISTAL were terminated on August 20, 1996.

What is the name of the federation which was originally responsible for TOVALOP?

The federation was originally responsible for TOVALOP (Tanker Owners’ Voluntary Agreement concerning Liability for Oil Pollution) is the International Tanker Owners Pollution Federation (ITOPF). The ITOPF is a non-profit organization established in 1968, dedicated to providing expert advice and guidance on effective responses to marine oil and chemical spills, as well as promoting best practices in the shipping industry to minimize the risk of pollution.

What are the names of the three international conventions dealing with oil pollution? 

1. International Convention for the Prevention of Pollution from Ships (MARPOL): This convention, adopted in 1973 and modified by a Protocol in 1978, aims to minimize pollution from ships, including oil spills. Annex I of MARPOL specifically addresses regulations for the prevention of pollution by oil from operational and accidental discharges.
2. International Convention on Civil Liability for Oil Pollution Damage (CLC): Adopted in 1969 and amended in 1992, this convention establishes a strict liability regime for shipowners, making them responsible for any pollution damage caused by their oil-carrying vessels. The CLC ensures that adequate compensation is available for victims of oil pollution incidents and requires shipowners to maintain insurance or other financial security to cover their liability.
3. International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND): Adopted in 1971 and amended in 1992, this convention created a supplementary compensation system, funded by oil importers, to provide additional compensation when the amount available under the CLC is insufficient to cover the full extent of damages caused by oil pollution incidents.

These three conventions form a comprehensive framework for the prevention, liability, and compensation related to oil pollution from ships, helping to protect the marine environment and ensuring that parties affected by oil spills have access to adequate financial resources for remediation and compensation.

What is the scope of the CLC, the purpose of the 1969 Convention and the effect of the 1992 Protocol?

The International Convention on Civil Liability for Oil Pollution Damage (CLC) was established to create a legal framework that addresses liability and compensation for oil pollution damage resulting from spills of persistent oil from tankers.

Scope of the CLC: The CLC applies to pollution damage caused by persistent oil spills from tankers in the territory, territorial sea, and the exclusive economic zone (EEZ) of the contracting states. The scope covers not only the costs of cleaning up the oil spill but also the damages caused to the environment, including economic losses due to pollution.

Purpose of the 1969 Convention: The primary purpose of the 1969 CLC was to ensure that adequate and prompt compensation would be available for victims of oil pollution incidents. To achieve this, the convention established a strict liability regime for shipowners, making them responsible for any pollution damage caused by their oil-carrying vessels. The convention also required shipowners to maintain insurance or other financial security to cover their liability.

Effect of the 1992 Protocol: The 1992 Protocol significantly amended and updated the original 1969 CLC, expanding and strengthening the compensation and liability regime. Some of the main effects of the 1992 Protocol include:

1. Increased liability limits: The 1992 Protocol raised the limits of shipowners’ liability based on the gross tonnage of their vessels. This meant that more compensation would be available for victims of oil pollution incidents.
2. Wider application: The 1992 Protocol extended the application of the CLC to include the EEZ of contracting states, in addition to their territorial seas and internal waters.
3. Introduction of compulsory insurance: The 1992 Protocol made it mandatory for shipowners to maintain insurance or other financial security to cover their liability for oil pollution damage. It also introduced the concept of “direct action,” allowing claimants to take legal action directly against the insurer or the person providing financial security for the shipowner’s liability.
4. Stricter criteria for exoneration: The 1992 Protocol made it more difficult for shipowners to limit their liability by proving that the pollution damage resulted from an act of war, natural phenomena, or the negligence of a third party.

The 1992 Protocol to the CLC significantly improved the compensation and liability regime for oil pollution incidents, ensuring that more resources would be available for remediation, compensation, and recovery following oil spills from tankers.

What is the role and function of MARPOL? 

Role and function of MARPOL:

MARPOL, short for the International Convention for the Prevention of Pollution from Ships, is an international treaty aimed at minimizing pollution from ships, including oil spills, harmful substances carried in bulk, sewage, garbage, and air pollution. Its primary role and function are to establish regulatory standards and best practices to prevent and control pollution caused by shipping activities. The convention applies to ships of all types and sizes, including tankers, cargo ships, and passenger vessels.

MARPOL comprises six technical annexes, each addressing a different aspect of pollution prevention:

1. Annex I – Regulations for the Prevention of Pollution by Oil
2. Annex II – Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk
3. Annex III – Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form
4. Annex IV – Prevention of Pollution by Sewage from Ships
5. Annex V – Prevention of Pollution by Garbage from Ships
6. Annex VI – Prevention of Air Pollution from Ships

What is the latest MARPOL Annex?

The latest annex to the MARPOL Convention is Annex VI, which was adopted in 1997 and entered into force on May 19, 2005. Annex VI focuses on the prevention of air pollution from ships and establishes regulations to control emissions of harmful pollutants such as sulfur oxides (SOx), nitrogen oxides (NOx), and volatile organic compounds (VOCs), as well as the emission of ozone-depleting substances and greenhouse gases.

Annex VI also introduces the concept of Emission Control Areas (ECAs), which are designated sea areas with more stringent emission standards, requiring ships to use cleaner fuels or implement emission reduction technologies to meet the stricter requirements.

MARPOL, through its various annexes, plays a critical role in protecting the marine environment and promoting sustainable shipping practices by setting international standards and regulations for pollution prevention and control.