Oil Pollution Compensation Fund raised to 1 billion euros

The full assembly of the International Maritime Organization (IMO) agreed Friday in London to raise the Oil Pollution Compensation Fund to 1 billion euros, up from the current 175 million euros.

May 16, 2003

2 min read

By an OGJ correspondent

PARIS, May 16 -- The full assembly of the International Maritime Organization (IMO) agreed Friday in London to raise the Oil Pollution Compensation Fund to 1 billion euros, up from the current 175 million euros. IMO, the United Nations' agency responsible for improving maritime safety and preventing pollution worldwide, oversees the OPCF to which 90 nations contribute.

The decision came after a week of discussion strongly influenced by the pressure of public opinion and especially by the European Union, which threatened to set up its own compensation fund in case of failure. All EU countries bordering the Atlantic Ocean and the Mediterranean Sea supported the EU position, as did Malta and Cyprus, which are not yet EU members. Japan also agreed after much diplomatic negotiation.

The increased fund could become effective in 2004 at the earliest. However, it will not benefit victims of either the Erika oil spill off Brittany that occurred in December 1999 or the Prestige oil spill last November off Galicia, Spain, that soiled the shores of Spain, France, and Portugal. The Prestige spill cleanup is still under way. Prestige, registered in the Bahamas, belonged to a Liberian company.

The fund is expected to increase to 260 million euros from 175 million euros Nov.1, but that will not cover actual damages incurred in those spills. Total SA (formerly TotalFinaElf SA), who lost crude oil in the Erika spill, earlier said it paid 1.2 billion francs for cleaning the Brittany coastline, removing oil from the tanker, and treating the recovered waste (OGJ Online, Nov. 8, 2001).

Victims of the spill said 22 months after the accident that OPCF, which had 183 million euros in hand at that time, had accepted claims totaling only 37 million euros and paid 23.9 million, although 3,637 entities sought an aggregate 131.5 million euros (OGJ Online, Oct. 17, 2001).

The oil companies want ship owners' insurance coverage to be increased as well. For both Erika and Prestige, insurance coverage covered only a small amount of the final cost.

Negotiations have already begun within the framework of the IMO.