Page 81 - claims information pack ebook_e

Guidelines for presenting claims in the tourism sector

introduction

1. Introduction to the International Oil Pollution

Compensation Funds

What are the IOPC Funds? How is money raised to pay

1.1 The International Oil Pollution Compensation compensation?
Funds (IOPC Funds) are two intergovernmental 1.4 The owner of a tanker is usually insured
organisations (the 1992 Fund and the with what is known as a Protection and
Supplementary Fund) which provide Indemnity Association, or P&I Club. The
4 compensation for oil pollution damage P&I Clubs insure the majority of tankers
resulting from spills of persistent oil from operating in international trade. A smaller
tankers. The 1971 Fund was the original number of tankers, often operating solely
Fund but does not provide compensation in domestic markets, are insured by
for incidents occurring after May 2002. commercial insurers. The tanker owner is

1.2 The International Oil Pollution Compensation generally covered against damages caused
Fund 1992 (which, in this booklet, is called by oil pollution through this insurance up to
‘the 1992 Fund’) is the newer Fund and is a certain amount of money. It is this money
composed of States which have agreed to that is used initially to pay compensation
two Conventions (the 1992 Civil Liability after an oil spill.
Convention (1992 CLC) and the 1992 Fund 1.5 When the amount available from the tanker
Convention) which cover the payment of owner’s insurance is not enough to cover
compensation to people, businesses or the total cost of the pollution incident,
organisations that suffer losses due to compensation is paid by the 1992 Fund.
pollution caused by persistent heavy oil (not The 1992 Fund is financed mainly by oil
gasoline or other light oils) from tankers. The companies in Member States, according to
Supplementary Fund provides an additional the quantity of oil transported by sea that
tier of compensation to victims in States which they receive. All companies which receive
are Party to the Supplementary Fund Protocol. more than 150 000 tonnes of oil by sea in
The details of how these different Conventions any year must contribute to the 1992 Fund.
work are complex. More information on the
Conventions can be found in the 1992 Fund When does the 1992 Fund come into play?
Claims Manual and on the IOPC Funds’ website. 1.6 The owner of the tanker from which the oil
What does the 1992 Fund do? was spilled is responsible for paying for

1.3 The aim of the 1992 Fund is to provide the damage caused, usually through his
compensation for losses resulting from insurer or P&I Club. However, he can limit the
a pollution incident involving a tanker, so maximum amount he has to pay (according
that the claimant is returned to the same to the size of the tanker) under one of the
economic position in which he/she would two relevant Conventions. Once this amount
have been if the oil spill had not happened. has been paid, the 1992 Fund is responsible
Ideally, the compensation should exactly for any extra payments. Often the owner’s
balance the loss. insurance is enough to cover all the costs