Q. Difference between persistent and non-persistent?

Persistent Oil is expected to persist due to its greater proportion of non-volatile

components and its high viscosity.

Persistent oil includes Crude oil, fuel oil, heavy diesel oil and lubricating oil.

Non-Persistent Oil contains greater proportion of volatile components so it

evaporates quickly and causes much less damage to the marine environment.

Non-persistent oil includes gasoline, light diesel oil and kerosene.

Bunker Spill Scenario

CLC 69 CLC 92 Bunker convention
Only spills within Expanded Up to EEZ Up to EEZ
territorial sea covered.
Bunker Spills from laden Covered for both laden and All ship carrying bunkers
ships only un-laden tankers. for propulsion
Only covered when tankers carrying both Laden and unladen
carrying persistent oil as persistent and non-persistent carrying any type of
cargo not when carrying oil as cargo, provided that if cargo
non-persistent oil (eg. the vessel is concerned is
aviation fuel) constructed or adapted to
carry cargoes of persistent oil
Only cover if bunkers spilt is persistent oil Both persistent and non -
president
CLC – Civil Liability Convention
India is party to CLC 1992, Fund 1992 but not party to supplementary fund

The convention applies to all sea going vessel carrying persistent oil in bulk as
cargo.

CLC 92 “oil” definition means any persistent hydrocarbon mineral oil such as
Crude oil, fuel oil, heavy diesel oil and lubricating oil whether carried onboard ship
as cargo (or) in bunkers of such a ship.

Applies to Oil tankers > 2000 gt (only persistent oil)

Exemption from liability: Act of god, Act of war, Third party sabotage,
Governmental Negligence.

Strict liability (Compulsory Insurance) – Even if the ship owner was not at fault.

CLC tankers must carry onboard a CLC certificate which effectively gives
claimants a right of direct action against the insurer.

Ships registered in CLC 1992 states need only to obtain 1992 CLC certificate from
the flag state. This should be sufficient evidence of insurance even when calling
ports in 1969 CLC state.

However ships flying the flag of 1969 CLC state will need to obtain a 1969 CLC
certificate from their flag state and 1992 CLC certificate from any 1992 CLC state.

The amount of compensation for which the shipowner is liable under CLC ‘92 is
limited based on the gross tonnage of the vessel (not the size of the spill).

CLC’92 prohibits claims against the members of crew, the pilot, charterers
(including bareboat charterer), manager or operator of the ship or any person
carrying out salvage unless the pollution damage resulted from their willful
misconduct
1992 Fund Convention (2ND TIER)

The Fund Convention provides a second tier of compensation for spills of

persistent oil from tankers, paid by receivers of oil in countries that have signed the
convention.
Any member state who imports > 1, 50,000 tonnes per annum will have to
contribute towards fund.

Maximum compensation payable by the 1992 FUND is 203 million SDR.

This amount includes the sum paid by the ship owner under 1992 CLC.

The fund is managed by an independent director appointed by IMO.

Ship’s Tonnage CLC 1992 limit

Ship < 5000 gt 4.51 million SDR
Ship between 5000 and 1,40,000 gt 4.51 million SDR + 631 SDR / gt
Ships > 1,40,000 gt 89.77 million SDR

IOPC - Supplementary Fund 2003 (3RD TIER)

Any member state who imports > 1 million tonnes per annum will have to
contribute towards supplementary fund (Available on an optional basis only to
those countries that have adopted the 1992 fund)

Maximum compensation payable by the Supplementary Fund is 750 million SDR.

Inclusive of amount paid under CLC ‘92 and Fund ‘92
Bunker Convention 2001

India is party to the Bunker convention, Nairobi convention

Bunker convention entered into force in 2008.

Strict liability (compulsory insurance) - even if ship owner was not at fault
Applies to all ships carrying bunker oil > 1000 gt (both persistent & non-persistent
oil)

Exemption from liability: Act of god, Act of war, Third party sabotage,
Governmental Negligence.

The ship owner is liable to pay compensation for collision damage (including the
cost of preventive measures) caused in the territorial sea of the state party as well
as its EEZ and to preventive measures taken in order to prevent or minimize such
damage.

The Convention provides that for compulsory insurance purposes liability under
Certificates shall not exceed the limits calculated in accordance with the
Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976), as
amended

Q. Who is liable under BC for pollution damage?

A. Shipowner (including the registered owner, bareboat charterer, manager and
operator).

Q. Which ships are required to have BC certificate of insurance (BC

certificate)?
A. All ships over 1000 gt registered in a State party or entering or leaving a port in
the territory of a State party
Q. What is the difference between a “BC blue card” and a “BC certificate”?
A. A “BC blue card” is issued by an insurer evidencing that there is in place
insurance meeting the liability requirements of the Bunkers Convention. A “BC
certificate” is issued by a State party attesting that such insurance is in force. A
ship over 1000 gt must have on board a “BC certificate” when flying the flag of a
State party or trade to a State party. Without a “BC blue card”, States will not
issue a “BC certificate”.

Q. Who is required to obtain a BC certificate of insurance?

A. The registered owner of a ship.

Q. My ship flies the flag of a non BC country – do I have to obtain a BC

certificate for her?
A. Yes, if she will call or may call at a port of a State, party to the Bunker
Convention.

Q. How to apply for a BC certificate?

A. You will need a BC “blue card” from the Club which should be submitted to the
relevant authority of the flag State, if a party to the BC or to another State party if
the flag State is not a party to the BC.

Q. Should oil tankers carry Bunker convention certificate?

All CLC tankers are required to maintain a bunker certificate as well as a CLC
certificate onboard since there is no exclusion under the Bunker convention for
CLC tankers, from carrying such a certificate.

Although pollution damage from the bunkers of a CLC tanker would be covered
under the CLC, in extremely rare situations where the tanker is unladen and with
no residue of the persistent oil cargo onboard.
Also it is possible for tanker to carry oil not covered by the CLC definition of oil
(e.g. non-persistent oil (or) lubricating oil used in the operation of the ship)
(IMO circular No. 3145)
 Q. Why do I have to have the underlying War risks insurance? What is the
required limit of that policy?

The bunker convention does not exclude liabilities arising from the war risk.
So, the clubs issuing blue cards become exposed to liabilities which they normally
do not cover.
 There is no exclusion in the convention for terrorism (though act of war is
excluded)
 Terrorism is excluded from standard P&I cover.

P&I club will only issue blue card if they receive a undertaking from owners that
they have and will maintain war risk cover with standard terms with separate limit
for P&I liability.

Nairobi Convention (Wreck Removal Convention)

On 14th April 2015 the Nairobi International Convention on the removal of wrecks
(WRC) will enter in to force.

The Convention provides a strict liability, compensation and compulsory insurance

regime for States affected by a maritime casualty.

The registered owner of the ship will be liable for locating, marking and removing
a wreck deemed to be a hazard in a state’s territorial sea including its EEZ.

Q. Which ships are required to have wreck removal certificate of insurance

(WRC certificate)?

All ships over 300 gt registered in a State party or entering or leaving a port in the
territory of a State party up to (EEZ) of member states.
“Wreck” following upon a maritime casualty, means:

(a) a sunken or stranded ship; or (b) any part of a sunken or stranded ship,
including any object that is or has been on board such a ship; or (c) any object that
is lost at sea from a ship and that is stranded, sunken or adrift at sea; or (d) a ship
that is about, or may reasonably be expected, to sink or to strand, where effective
measures to assist the ship or any property in danger are not already being taken

“Hazard” means any condition or threat that: (a) poses a danger or impediment to
navigation; or (b) may reasonably be expected to result in major harmful
consequences to the marine environment, or damage to the coastline or related
interests of one or more States.

The Convention provides that for compulsory insurance purposes liability under
Certificates shall not exceed the limits calculated in accordance with the
Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976), as
amended
 OPA 90 CLC 92

Ships
All vessels >300 gt or more must have Oil tankers >2000 gt must have an
an COFR CLC’92 certificate

Certificate Certificate Of Financial Responsibility CLC certificate issued by flag state

(COFR) issued by USCG NFPC (National against P&I blue card
Pollution Fund Center) against P&I club
certificate of entry

Liable parties
Registered owner, operator, bareboat only registered shipowner owner
charterer

Exemptions

Act of war , Act of God, Act of a third Act of war, Act of God, Act of a third
party party, Government Negligence

Loss of defense RP loses defense if he fails to 1)report a No

spill 2)cooperate in response 3)follow
USCG orders

GEOGRAPHIC Apply to spills or threats of spills Apply to Spills or threats of spills

AREA occurring within EEZ occurring within EEZ of a contracting
State.

Scope of All types of vessel, all types of oils Oil tanker constructed for carrying
application persistent oil in bulk as cargo or as
bunker.

No preemption over State law (see CLC preempts other law: no claim for
chart on States laws for details on compensation for pollution damage may
Relationship with be made against the owner otherwise
liability levels)
other law than in accordance with the CLC.
 CLC ‘69 CLC ‘92 Bunker Convention

any sea-going vessel Any sea-going vessel Any seagoing vessel and
Ship and any seaborne craft and seaborne craft of seaborne craft, of any type
of any type whatsoever, any type whatsoever whatsoever.
actually carrying oil in constructed or
bulk as cargo adapted for the
carriage of oil in bulk
as cargo, provided
unless it is proved
that it has no residues
of such carriage of oil
in bulk aboard.

Oil Oil: any persistent oil Oil: any persistent Bunker oil: any hydrocarbon
such as crude oil, fuel hydrocarbon mineral mineral oil, including lubricating
oil, heavy diesel oil, oil such as crude oil, oil, used or intended to be used
lubricating oil and whale fuel oil, heavy diesel for the operation or propulsion
oil, whether carried on oil and lubricating oil, of the ship, and any residues of
board a ship as cargo or whether carried on such oil
in the bunkers of such a board a ship as cargo
ship or in the bunkers of
such a ship

Geographic scope Up to Territorial sea Up to EEZ Up to EEZ

Liable parties Registered Ship Owner Registered Ship Owner, Operator, Manager &
Owner Bareboat charterer

Basis of liability Strict Strict Strict, joint and several

Exemptions Act of God, Act of war, Same Same

Third party sabotage,
Governmental
negligence

Compulsory For registered owner of Same as CLC 69 For registered owner of ship
Insurance ship carrying more than with tonnage greater than
2,000 tons of oil in bulk 1,000 gross tons
as cargo
TOPIA: (Tanker Oil Pollution Indemnification Agreement)

TOPIA is an agreement between supplementary fund members and the owners of

oil tankers which provides that the tanker owner will indemnify 50% of the
compensation paid by 1992 Fund.

In practice such a payment is made by the shipowner’s P& I Club.

TOPIA covers incident only in supplementary fund member states.

STOPIA: (Small Tanker Oil Pollution Indemnification Agreement)

STOPIA is an agreement between the 1992 Fund members and the owners of the
oil tankers of 29,548 gt or less, the purpose of which is to increase the minimum
limit of liability under CLC ‘92 to 20 million SDR.

STOPIA covers incident only in 1992 Fund member states.

TOPIA AND STOPIA applies to all tanker owners entered in to a P&I club of
International group.

IOPC:

The International Oil Pollution Compensation (IOPC) Funds are two intergovernmental
organizations (the 1992 Fund and the Supplementary Fund) which provide compensation for
oil pollution damage resulting from spills of persistent oil from tankers.

IOPC 1992 Fund Convention and the Supplementary Fund Protocol require that all
Member States report to the Director of the Funds each year the name and address
of any company or entity in that State which is liable to pay contributions to the
1992 Fund and/or to the Supplementary Fund, as well as the quantity of
contributing oil received by each of these companies and entities in the preceding
year.

Indi imported 190 million tonne and contributed about 14% to the IOPC 1992
Fund