INTERNATIONAL OIL POLLUTION COMPENSATION (IOPC) FUNDS MEETING AT IMO 21 – 25 October 2013

The IOPC 1192 Fund comprising its Administrative Council and Executive Committee, the Supplementary Fund Assembly and 1971 Administrative Council met at IMO from Monday 21 through Friday 25 October 2013. A number of items on the agenda were taken up with matters important to IOPC Funds’ internal functioning such as financial reporting, financial policies and procedures, secretariat and administrative matters, treaty matters and audit matters; the various papers submitted to the meeting on these subjects and others can be found on the website www.iopcfund.org/document services which is now available in English, French and Spanish. Points of interest to InterManager emanating from the meeting are as follows:

• OVERVIEW – REPORT BY THE DIRECTOR.

With respect to compensation matters, the Director drew the governing bodies’ attention to a new incident involving the 1992 Fund, namely the involvement of NESA R3 which had occurred in Oman. He also mentioned the incident involving the HAEKUP PACIFIC and HEBEI Spirit in the Republic of Korea, PRESTIGE off the coast of Spain, VOLGONEFT 139 in the Russian Federation and NISSOS AMORGOS in Venezuela. The IOPC Secretariat is carrying out work in cooperation with IMO on the promotion of the entry into force of the 2010 Hazardous and Noxious Substances (HNS) Protocol, further information on which can be found at: www.hnsconvention.org. The Director pointed out that on this, the occasion of the 35th anniversary, 113 States have ratified the 1992 Fund Convention and 30 States the Supplementary Fund Protocol, making it clear that the international liability and compensation regime remains popular and is working well.

• INCIDENTS INVOLVING THE 1971 IOPC FUND.
VISTABELLA. Following the reversal of an award to the Fund for €1,289,483 plus interest and costs by the Court of Appeal in Trinidad and Tobago, final leave to appeal to the Privy Council has been granted to the Fund and the hearing is expected to take place in June 2014.
ILIAD. It seems unlikely that the final adjudicated amount will exceed the limitation sum of €4.4 million, which in any event is time-barred vis à vis the 1971 Fund. However, the hearing at the Court of Nafplion scheduled for November 2013 will nevertheless be monitored.

NISSOS AMORGAS. Essentially, in March 2011 the Maracaibo Criminal Court of Appeal upheld the previous judgement of the Criminal Court of First Instance rejecting the shipowner’s request to limit liability and asserting that if would be for the shipowner and his insurer to obtain reimbursement of the amount paid in compensation to the Venezuelan State from the 1971 Fund. This was further upheld in a final judgement by the Supreme Court (Criminal Section) in May 2013 but since judgement was not against the 1971 Fund, the Fund can only pay compensation based on a legal obligation to do so, which, in this case, did not exist. Thus the 1971 Fund Administrative Council, whilst expressing sympathy for the shipowner and the Club (GARD) in this case, deemed that reimbursement was not appropriate, despite an intervention by the IG to the effect that it would have to give serious consideration as to how the decision would affect discussions taking place with the Director on the funding of interim payments.

PLATE PRINCESS. In 1997, two fishermen’s trade unions, FETRAPESCA and Puerto Miranda Union presented claims in the Civil Court of Caracas against the shipowner and the master of the PLATE PRINCESS. Formal notification to the 1971 Fund took place in 2005, thus time-barring both claims. Notwithstanding this not-so-minor detail, the Maritime Court of First Instance issued a judgement against the Fund which was subsequently confirmed in a final judgement by the Supreme Court. To cut a long story short, the Maritime Court of First Instance issued an order to embargo any assets held by the Fund (1971 or 1992 or both, not specified) on contributions owed to the Fund by PDVSA (Petroleos de Venezuela SA), Venezuela’s State-owned oil company. The quantum of assets embargoed, is double the amount awarded against the 1971 Fund plus 30%.

• INCIDENTS INVOLVING THE 1992 FUND.
ERIKA. Only one action remains pending against the 1992 Fund with a total amount claimed of €87,467.

PRESTIGE. The Master and the Chief Engineer of PRESTIGE, also the civil servant involved in the decision not to allow the ship into a place or refuge, stool trial in Spain for criminal liability. The Court decision is expected in November 2013 and is expected to announce not only the criminal liabilities arising from the incident, but also the distribution of the limitation fund and the compensation due. Meanwhile in France, actions by 121 claimants remain pending with claims amounting to a total of €79.1 million. Also, France brought a legal action against 3 companies in the group of ABS, the classification society that certified PRESTIGE and which was opposed by ABS under a claim of sovereign immunity just as the BAHAMAS (the flag State of PRESTIGE) would also be. Such proceedings have been stayed pending the outcome of the criminal proceedings in Spain.

SOLAR 1. As at 5 August 2013, some 32,466 claims had been received and assessed and £14.3 million paid in respect of 26,870 claims. The amount paid in compensation has been reimbursed by the Shipowners’ Club to the 1992 Fund in accordance with the Small Tanker Oil Pollution Indemnification Agreement (STOPIA) 2006. Three other actions concerning legal proceedings by (1) The Philippine Coastguard, (2) 967 fisherfolk, and (3) a group of municipal employees, are still in the process of resolution but are not unduly worrying.

VOLGONEFT 139. All private claimants were paid in full following a Court ruling, also interim payments were made to 3 governments, with pro-rata deductions to cover the ‘insurance gap’.

HEBEI SPIRIT. 128,389 claims were assessed at a total of KRW 198.7 billion, out of which 87,336 claims have been rejected. The shipowner’s insurer, SKULD, also made payments totally KRW 172 billion. However, the Limitation Court assessed the damages arising at a total of KRW 736 billion which judgement the 1992 Fund is appealing in respect of 63,163 claims where there are matters of principle involved. Meanwhile, it was decided to maintain the level of payments at 35% of the established losses, subject to review at the next session of the 1992 Fund Executive Committee.

KING DARWIN. The damage caused by a small operational spill in Dalhousie, Canada was within the 1992 CLC limit and the final claim by a dredging company was settled by Steamship Mutual in June 2013, thus enabling the incident to be closed.

REDFFERM. In March 2009 at Tin Can Island, Lagos, Nigeria, the barge REDFFERM sank following a transhipment operation from the tanker MT CONCEP, spilling an unknown quantity / residue of cargo of low pour fuel oil (LPFO) into the water which then impacted upon the neighbouring Tin Can Island area. The barge was subsequently raised by a crane barge. Clean-up operations were conducted by various agencies and the IPOC Fund Secretariat was informed of the incident in January 2012. Claims relating to the spill against the 1992 Fund were then lodged by the 102 communities allegedly affected and in January 2013, the losses allegedly incurred by 63 communities were revised by them sharply upwards. In addition following the report of a Marine Board of Inquiry presented to the Secretariat in April 2013, the Lagos State Government presented an eye-watering claim on behalf of individuals, committees and itself.
In response to questions posed by the Nigerian delegation to the April 2013 session of the 1992
Fund Executive Committee, it was decided that:
(1) There was no evidence of the REDFFERM barge having been built as a sea-going vessel in accordance with relevant classification regulations, rather it is certified for use in the inland waters of Nigeria only.
(2) REDFFERM was not built to class specifications and was constructed without plan approval, nor was there any evidence to prove that REDFFERM sailed at sea.
(3) Whilst it was acknowledged that there was a spill on 30 March 2009, the extent, contamination and effect upon the communities was hard to determine.
(4) No supporting evidence had been submitted in respect of claims made, also they substantially exceeded the average income and losses of fishermen within the Lagos area, based on other publicly available documentation.
Given such arguments, the Director was instructed not to make payment of compensation to the claimants in respect of this incident.

JS AMAZING. The tanker JS AMAZING spilled an unknown quantity of low pour fuel oil into the Warri River, Delta State, Nigeria in June 2009; the 1992 Fund was subsequently informed of the incident in May 2011. Five sets of legal proceedings have been commenced:
i. NOSDRA (Nigerian Oil Spill Detection and Response Agency) against PPMC (Pipelines and Product Marketing Company Limited);
ii. Some communities against the shipowner;
iii. By the shipowner for recovery of damage to the ship;
iv. By 248 communities for compensation; and
v. By claimants to arrest the JS AMAZING.
Given a very large number of unresolved issues, not least the delay between the incident occurring and the 1992 Fund receiving notification of same making it difficult for claimants to prove their losses or establish a link of causation between the damage and the contamination, the Director recommended to the Executive Committee that he should not be instructed to make payment of compensation to claimants in respect of this issue. However the Secretariat will examine fresh evidence recently submitted by the Nigerian delegation and report to the Executive Committee at its next session.

ALFA 1. The tanker ALFA 1 hit the submerged wreck of the CITY OF MYKONOS whilst crossing Elefsis Bay, near Piraeus, Greece on 5 March 2012, and sank resulting in the death of the Master. The Council concluded that the sinking, abandonment of the vessel by her crew, total loss of cargo and death of the Master, constituted a maritime accident due to the fault of the Master of the vessel. The Director was of the view that in the event the ALFA 1 was not carrying more than 2,000 tonnes of persistent mineral oil, primary responsibility for any pollution damage rested with the shipowner who would be entitled to limit his liability to 4.51 million SDR. A contradiction was noted in the terms of the insurance policy and the certificate (Blue Card) issued to the Greek State by the shipowner’s insurer because the policy was limited to €2 million and stated that only non-persistent mineral oils would be covered, contrary to the Blue Card provided to the Piraeus Central Port which stated that an insurance policy was in place complying with Article VII of the 1992 CLC ‘where and when applicable’. This contradiction between the insurer’s policy and the Blue Card is currently under detailed legal investigation.

HAEKUP PACIFIC. In April 2013, the Secretariat was notified of a collision which took place in April 2010 between the 1087 GT asphalt carrier HAEKUP PACIFIC and ZHENG HANG resulting in HAEKUP PACIFIC’s sinking in 90 metres depth off Yeosu, Republic of Korea. Shortly after sinking, a small spill of some 200 litres of oil was cleaned-up and preventive measures introduced by the local coastguard for which the UK P&I Club paid US$ 136,000. An environmental impact assessment concluded that the asphalt cargo would solidify and that the MDO would evaporate away quickly if it leaked out, also any IFO spilled would drift away from the Korean coast under the influence of prevailing winds and a strong current. In early May 2010, the Korean authorities nonetheless issued orders to the shipowner requesting that the wreck be removed with the cargo and bunkers remaining on board but since then, no steps have been taken to enforce an unwise removal, although the order remains in force as it has yet to be officially revoked.

NESA R3. On 19 June 2013, the 856 GT tanker NESA R3, carrying 840 tonnes of bitumen, sank off the port of Mina Sultan Qabous, Oman and the Master of the vessel tragically lost his life whilst trying to save his ship. Pollution was caused to 40 kilometres of the coast of Oman for which two clean-up claims have already been settled by the Fund as it is unlikely that the shipowner will be able to cover the full extent of the damages arising. It is estimated that about 5,000 litres of diesel oil and 1,500 litres of other lubricants remained on board in addition to some 500 tonnes of solidified bitumen. Oman regards the remaining bunker fuels and lubricants as potentially hazardous pollutants which will need to be removed from the wreck although removal of the wreck itself or its cargo is not being considered. The 1992 Fund Executive Committee authorised the Director of make payments of compensation in respect of admissible losses arising out of the NESA R3 incident and to claim reimbursement from the shipowner.
• REPORT ON THE SECOND MEETING OF THE SEVENTH INTERSESSIONAL WORKING GROUP.
The Chairman of the WG pointed out that, following lengthy discussions in respect of the definition of ‘ship’, agreement had been reached on three of the five questions asked of the Group at its first meeting. In the continued absence of agreement on the remaining two questions, a Consultation Group was approved which will meet for the first time on Monday 28 October 2013 ahead of next year’s meeting of the Working Group, with the aim of reaching a convergence of opinions. In addition, revised Terms of Reference for the Working Group were approved, enabling it to continue its work and hold further meetings as required. The questions to be addressed are:
(1) Do FSOs and FSUs fall within the definition of ‘ship’ within Article I.1 of the 1992 CLC? ; and
(2) Should the 1992 Fund Assembly confirm its decision, taken in October 2006, that oil discharged into ‘permanently or semi-permanently’ anchored vessels engaged in STS oil transfer operations qualify as contributing oil for the purposes of Article 10.1 of the 1992 Fund Convention?
• THE ROLE OF MEMBER STATES.
There was a majority view that at present, no change is required to the Claims’ Manual. A list of experts will be held privately by the Director with a list of qualifications and company names. Also guidelines to help Member States submit claims for clean-up operations will be available by Spring 2014. The need to assess claims early was acknowledged, even if a government is standing last in the queue for compensation.
• RELOCATION OF THE IOPC FUNDS’ OFFICES.
The lease on the current premises at Portland House, Bressenden Place, London expires in March 2015, thus new premises are currently being sourced and evaluated.
• WINDING UP OF THE 1971 FUND.
Following a protracted debate on whether to wind up the 1971 Fund or not, the 1971 Fund Administrative Council decided:
a) to instruct the Director, with a view to dissolve the 1971 Fund at its 2014 session, to resolve as many of the outstanding incidents with respect to: VISTABELLA, AEGEAN SEA, ILIAD and NISSOS AMORGOS;
b) that the 1971 Fund had no legal obligation to reimburse the GARD Club any amount paid as a consequence of the judgement by the Supreme Court of Venezuela in respect of NISSOS AMORGOS;
c) that the claim submitted by Venezuela before its Supreme Court in respect of NISSOS AMORGOS was time-barred vis à vis the 1971 Fund and not admissible for compensation and to discontinue the defence of the 1971 Fund before the courts;
d) that the claims submitted by 3 fish processors in relation to NISSOS AMORGOS had not been proven, therefore not to pay any compensation in respect of this claim and to discontinue the defence of the 1971 Fund before the courts;
e) that, in respect of PLATE PRINCESS, no loss has been proven by FETRAPESCA and to discontinue the defence of the 1971 Fund before the courts;
f) to oppose enforcement of the PLATE PRINCESS judgements;
g) to contact the Russian authorities requesting their assistance in collecting outstanding contributions from 2 contributors in the Russian Federation; and
h) that the 1971 Fund Consultation Group has finished its work, thus it can be dissolved.
• PREPARATION FOR THE ENTRY INTO FORCE OF THE 2010 HNS PROTOCOL .
The number of States that have signed the 2010 HNS Protocol remains at eight. A number of workshops organised jointly by the IMO and 1992 Fund Secretariat have taken place and a similar three-day training course will be held in Malaysia between 4 and 7 November 2013. DENMARK stated that, as one of the eight signatories to the 2010 HNS Protocol, it has adopted legislation requiring HNS receivers in the country to report contributing cargoes starting in January 2014. The option to download the HNS lists in electronic format is now available on the HNS Finder page of the HNS Convention website enabling potential receivers to quickly cross-check substances.

Captain Paddy McKnight END

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