Certificate of Financial Responsibility

Under CLC, if the escape or discharge of oil from the offending ship is due solely to any one of the following causes, then the shipowner may escape liability: An act of war or hostilities. An act of God, being an exceptional phenomenon of nature beyond the possibility of human prevention. An international act or omission of some third party. A negligent act or piece of wrongdoing by any government. This provision of the Convention is perhaps one of its most significant. The 1976 (London) Convention on Limitation of Liability does not include within its scope damages resulting from oil pollution. Oil pollution has always been treated as a ‘one off’ sort of maritime claim, perhaps because of the strange nature of the damage and perhaps because of the vastness of some pollution incidents. Limitation under CLC is provided for in Article V. Under Article V the owner of a ship 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 ship 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 1992 CLC. If the incident occurs as a result of the owners actual recklessness or intent the limitation of liability is forfeit. All tankers carrying more than 2,000 tonnes of persistent oil as cargo must carry a certificate on board attesting that appropriate insurance cover is carried. The United States is not a signatory to the Conventions.  Instead it relies on its own enactment The Oil Pollution Act 1990, (OPA90), which achieves the same ends although with similar although potentially higher penalties under some circumstances. Vessels entering US waters must carry a “Certificate of Financial Responsibility” (COFR) issued by their insurers.