- The 2003 Supplementary Fund Protocol provides for a third tier of compensation in cases where the protection afforded under the 1992 CLC and the 1992 Fund Convention is inadequate. Only Contracting States to the 1992 CLC and 1992 Fund Convention may ratify or accede to the 2003 Supplementary Fund Protocol.
- The 2003 Protocol:
• established the Supplementary IOPC Fund
• sets out the circumstances where compensation is available from the Supplementary IOPC Fund
• fixes a monetary cap on the liability of the Supplementary IOPC Fund
• outlines circumstances where the Supplementary IOPC Fund may temporarily or permanently deny liability
• sets out rules as to jurisdiction and time limitation
• details the system of contributions that finances the Supplementary IOPC Fund. - The Supplementary IOPC Fund will only provide compensation for pollution damage suffered in a Contracting State to the 2003 Supplementary Fund Protocol and covers only “established claims”. These are claims that are recognised by the 1992 IOPC Fund, but exceed the relevant limit of compensation payable under the 1992 Fund Convention in respect of the relevant oil pollution incident.
- The total amount of compensation available from the Supplementary IOPC Fund in respect of any one incident is limited to 750 million SDR, inclusive of any compensation actually received under the 1992 Conventions, which, as noted above, is limited to an aggregate amount of 203 million SDR. A significant benefit of the Supplementary IOPC Fund is that there should rarely be any need to reduce compensation payments proportionately between claimants. The extensively higher limits of liability should enable all claimants to receive 100% compensation.
- As the Supplementary IOPC Fund is only available for established claims, the 2003 Supplementary Fund Protocol does not envisage any further exemptions from liability. Compensation may be temporarily or permanently denied however, where a Contracting State has not fulfilled its reporting obligations under the Protocol.
- Annual contributions to the Supplementary IOPC Fund are required from oil importers on the same basis as contributions to the 1992 IOPC Fund. The contribution system differs however in one respect, as, for the purposes of assessing contributions, Contracting States are deemed to receive at least 1 million mt of “contributing oil” each year. Where the aggregate amount of “contributing oil” received in a Contracting State is less than 1 million mt, the Contracting State is required to pay contributions for a quantity of “contributing oil” corresponding to the difference between the aggregate quantity of actual contracting oil receipts reported in respect of that State, and 1 million mt. The Supplementary IOPC Fund has not yet been required to provide compensation, and as a result, contributions by Contracting States have been needed to cover administrative costs only, and are therefore nominal.
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