- A second tier of compensation is available under the 1992 Fund Convention for pollution damage suffered in a Contracting State to that Convention. However, only Contracting States to the 1992 CLC may accede to the 1992 Fund Convention.
- The 1992 Fund Convention complements the 1992 CLC and provides compensation where the protection afforded under the 1992 CLC is unavailable or inadequate.
- In summary, the 1992 Fund Convention:
• established the 1992 IOPC Fund
• sets out the circumstances where compensation is available from the 1992 IOPC Fund
• specifies a limited set of circumstances where the 1992 IOPC Fund will be exempt from liability
• fixes a monetary cap on the liability of the 1992 IOPC Fund
• sets out rules as to jurisdiction and time limitation
• details the system of contributions that finances the 1992 IOPC Fund. - The 1992 IOPC Fund provides compensation in circumstances where (a) no liability for pollution damage arises under the 1992 CLC (b) the shipowner is financially incapable of meeting his obligations in full and his insurance is insufficient to satisfy such claims (c) the damage exceeds the amount of the shipowner’s limited liability under the 1992 CLC. Expenses reasonably incurred or sacrifices reasonably made by the shipowner to prevent pollution damage are also recoverable from the 1992 IOPC Fund.
- The 1992 IOPC Fund will not provide compensation for pollution damage that occurred in a non-Contracting State. There are also limited circumstances in which the Fund will not be liable, for example, where the pollution damage resulted from an act of war, or where the claimant cannot prove that the pollution damage resulted from an incident involving one or more ships, as defined in the Convention.However, if the claimant can prove that the oil
which caused the pollution damage originated from a ship, the 1992 IOPC Fund will be obliged to compensate the claimant, even where the ship cannot be identified. Contributory negligence of the claimant may also discharge the 1992 IOPC Fund wholly or partially from providing compensation. - The liability of the 1992 IOPC Fund is currently limited to the aggregate sum of 203 million SDR in respect of any one incident. This amount includes any compensation actually paid by or on behalf of a shipowner under the 1992 CLC. Pollution damage caused by a natural disaster – for which a shipowner may not be liable under the 1992 CLC – would also be compensated by the 1992 IOPC Fund, up to the limit of 203 million SDR. Where the total amount of claims exceeds the total amount of compensation available under the 1992 Conventions, the compensation paid to each claimant will be reduced proportionately.
- The 1992 IOPC Fund is made up of annual contributions from any person in a Contracting State (including Government authorities, State-owned companies or private companies) who receives more than 150,000 metric tonnes (mt) of “contributing oil” in any calendar year.The oil must be carried by sea to the ports or terminal installations in that State to be considered as “contributing oil”. Contracting States must report to the 1992 IOPC Fund those persons who are liable to contribute to the Fund (i.e. persons receiving more than 150.000 mt of oil annually and the relevant quantities of oil received), in order for contribution amounts to be calculated. Annual contributions are levied by the 1992 IOPC Fund, and each contributor will be required to pay a specified amount per tonne of “contributing oil” received through a system of deferred invoicing, whereby part of the annual contributions levied for a given calendar year are invoiced later in the year, in case this proves to be necessary, i.e. if Compensation payments need to be made.
