Compensation for oil pollution damage: China versus the international regime

Asia Pacific Journal of Environmental Law

Volumn 9, Issue 1, 2005, Pages 11-37

  Faure, Michael G ^a,b   Wang, Hui ^c  

^a MAASTRICHT UNIVERSITY   (Netherlands)

^b MAASTRICHT UNIVERSITY   (Netherlands)

^c UNIVERSITY OF LEUVEN   (Belgium)

Author keywords

Civil liability; Compensation fund; Compulsory insurance; Financial caps; Marine pollution

Indexed keywords

OIL;

ARTICLE; CHINA; COMPENSATION; ECOLOGY; ENVIRONMENTAL IMPACT; INSURANCE; INTERNATIONAL COOPERATION; LAW; LEGAL LIABILITY; OFFSHORE OIL INDUSTRY; POLICY; PRIORITY JOURNAL; SEA POLLUTION;

EID: 32044466904     PISSN: 13852140     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (74)

1. Since the financial caps are the main focus of our article, we do not address other aspects of the conventions. For information on those other aspects we refer the reader to the literature listed in the footnotes.
2. The CLC was adopted on 29 November 1969. Its formal goal was to ensure that adequate compensation is available to persons who suffer oil pollution damage resulting from maritime casualties involving oil-carrying ships. For a comment on this convention see inter alia D. Abecassis "IMO and Liability for Oil Pollution from Ships: a Retrospective" (1983) Lloyds Maritime and Commercial Law Quarterly 45-46;
3. Edward Brans Liability for Damage to Public Natural Resources. Standing, Damage and Damage Assessment (Kluwer Law International, The Hague: 2001) 315-316;
4. Michael Faure and Wang Hui "The International Regimes for the Compensation of Oil Pollution Damage: Are they Effective?" (2003) Review of European Community & International Environmental Law 242-253;
5. Edward Gold Handbook on Marine Pollution (Gard, Arendal: 1985) 44-47;
6. Oya Ozçayirz Liability for Oil Pollution and Collisions (London, Lloyds of London Press: 1998) 211-218.
7. See Xia Chen Limitation of Liability for Maritime Claims. A Study of US Law, Chinese Law and International Conventions (Kluwer Law International, The Hague: 2001) 140;
8. see Mans Jacobsson "The International Conventions on Liability and Compensation for Oil Pollution Damage and the Activities of the International Oil Pollution Compensation Fund" in Colin De La Rue (ed) Liability for Damage to the Marine Environment (Lloyds of London Press, London: 1993) 41.
9. The content of this certificate is fixed in Art. VII.2 of the Convention. For further details see Gold, note 2 at 45
10. Chen, note 3 at 141.
11. See also Ozçayirz, note 2 at 215-217.
12. See K. Le Couviour "Responsabilité pour Pollutions Majeures Résultant du Transport Maritime d'hydrocarbures. Après l'Erika, le Prestige ... L'impératif de Responsabilisation" (2002) La Semaine Juridique 18 December at 2271.
13. See Le Couviour, note 5 at 2271.
14. These financial limits were therefore seriously criticised from an economic perspective. See for example Michael Faure and David Grimeaud "Financial Assurance Issues of Environmental Liability" in Michael Faure (ed) Deterrence, Insurability and Compensation in Environmental Liability (Springer, Vienna: 2003) 194-260.
15. See Chen, note 3 at 142-143 at 5.
16. See also Jacobsson, note 3 at 39-56
17. Brans, note 2 at 317-318.
18. See Reinhard Ganten "Setting up the Organization" The IOPC Funds' 25 Years of Compensating Victims of Oil Pollution Incidents (International Oil Pollution Compensation Funds) at 60.
19. See Abecassis, note 2 at 47;
20. Jan Bongaerts and Aline Debièvre "Insurance for Civil Liability for Marine Oil Pollution Damages" (1987) The Geneva Papers on Risk and Insurance 148;
21. Gold, note 2 at 115.
22. See M. Joransson "The 1984 and 1992 Protocols to the Civil Liability Convention 1969 and the Fund Convention 1971" in Colin De La Rue (ed) Liability for Damage to the Marine Environment (Lloyds of London Press, London: 1993) 71-82.
23. See Xia. Chen, note 3 at 141.
24. For more historical background to the negotiation of the 1984 Protocols and the change of the US attitude, see Wu Chao Pollution from the Carriage of Oil by Sea: Liability and Compensation (Kluwer Law International, London: 1996) 215-273.
25. For an excellent overview of the contents and importance of the 1992 Protocols see Edward Brans "Liability for Ecological Damage under the 1992 Protocols to the Civil Liability Convention and the Fund Convention, and the Oil Pollution Act of 1990" (1994) Tijdschrift voor Milieuaansprakelijkheid 61-67 and 85-91
26. Brans, note 2 at 344-360.
27. As of 1 March 2004, there are 44 States who are parties to the 1969 CLC, while 92 States are parties to the 1992 CLC. These statistics are available from the website of the IOPC Fund .
28. Agustin Blanco-Bazan "The Erika Casualty, Legal Issues from the IMO View" presented at the Liability Workshop, IUMI 2000 Conference held in London on 10-13 September 2000.
29. Under Art. 43.1 of the 1971 Fund Convention, it would have ceased to be in force when the number of Member States fell below three. Although many States denounced the 1971 Fund Convention, it was unlikely that the number of Member States would fall below three in the foreseeable future. Due to this reason, at the September 2000 Diplomatic Conference a Protocol was adopted to modify the termination conditions for the 1971 Fund. The modified Protocol stated that the 1971 Fund would cease to be in force on the date on which the number of Member States fell below 25, or 12 months following the date on which the Assembly (or any other body acting on its behalf) noted that the total quantity of contributing oil received in the remaining Member States had fallen below 100 million tonnes. As the number of Member States fell below 25 on 24 May 2002, the 1971 Fund Convention ceased to be in force from that day.
30. See, concerning the consequences for further (European) action towards the prevention of oil spills, C. Roche "Après l'Erika: la Prevention de la Pollution des Mers par le Renforcement de la Sécurité Maritime en Europe (Erika I)" (2002/3) Revue Juridique de l'Environnement 373-392.
31. See also Le Couviour, note 5 at 2269-2272.
32. Just to point out some examples of Europe's activity in this domain, see for example Directive 2001/150/EC of 19 December 2001 amending Council Directive 94/57/EC on common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations, OJ L19/9 of 22 January 2002, Council Decision of 19 December 2002 authorising the Member States in the interest of the community, to sign, ratify or accede to the international convention on civil liability for tanker oil pollution damage, 2000 (the Tankers Convention) OJ L256/7 of 25 September 2002 and Directive 2002/84/EC of the European Parliament and of the Council of 5 November 2002 amending the directives on maritime safety and prevention of oil pollution from ships, OJ L324/53 of 29 November 2002, just to mention a few of the European initiatives that were published in 2002; but one could point to many other initiatives showing European activism in this domain.
33. See in this respect, COM (2000) 802 final, the Communication from the Commission to the European Parliament and the Council on a second set of Community measures on maritime safety following the sinking of the oil tanker Erika, Brussels, 6 December 2000, 51-83; and the amended proposal for a regulation of the European Parliament and of the Council on the Establishment of a Fund for the Compensation of Oil Pollution Damage in European Waters and Related Measures, OJ C227 E/487 of 24 September 2002.
34. See G.J. Van der Ziel "De Olieramp met de 'Prestige"' (2003) Tijdschrift voor Milieuaansprakelijkheid 7.
35. Ibid.
36. Ibid.
37. COM (2002) 681 final, Communication from the Commission to the European Parliament and the Council on improving safety at sea in response to the Prestige accident, Brussels, 6 December 2002.
38. COM (2003) 534 final of 8 September 2003.
39. Ibid.
40. See C. White "The Voluntary Oil Spill Compensation Agreements - TOVALOP and CRISTAL" in Colin De La Rue (ed) Liability for Damage to the Marine Environment (Lloyds of London Press, London: 1993) 57-70.
41. See Bongaerts and Debièvre, note 10 at 147-148;
42. Gold, note 2 at 25-26.
43. CRISTAL was considered an important precedent in the literature since it showed that the oil industry could, under pressure of public opinion, take responsibility for oil pollution damage (see Gold, note 2 at 26).
44. See Gold, note 2 at 117.
45. According to the statistics in Lloyd's List Maritime Asia, China imported 91.12 million tonnes of crude oil in 2003, an increase of 23 million tonnes, or 31.3 per cent over 2002. However, the current estimate is that only 15 per cent of imports are lifted in Chinese vessels ((2004) Spring Lloyd's List Maritime Asia at 19).
46. Maritime Code of the People's Republic of China was adopted at the 28th Meeting of the Standing Committee of the 7th National People's Congress on 7 November 1992 and effective as of 1 July 1993. An English translation of this Maritime Code was published in 2000 through the Foreign Languages Press, Beijing.
47. Yu Xiaohan "Case on Limitation of Liability for Oil Pollution Damage Compensation" Guangzhou Maritime Court Cases 24 March 2003.
48. Art.268 (1) of the Chinese Maritime Code reads: "If any international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those contained in this Code, the provisions of the relevant international treaty shall apply, unless the provisions are those on which the People's Republic of China has announced reservations."
49. Zhao Lujun "Legal Issues in Marine Oil Pollution" International Seminar on Compensation Regime for Ship-Source Pollution Damage, Shanghai, June 2001. (Original text in Chinese: Hai Shang You Wu Chu Li Zhong De Ruo Gan Fa Lu Wen Ti).
50. See Yu Xiaohan, note 33.
51. For an overview of China's practice in the law of the sea, see Jeanette Greenfield China's Practice in the Law of the Sea (Clarendon Press, Oxford: 1992).
52. (2004) Spring Lloyd's List Maritime Asia at 19.
53. Chapter XI of the Chinese Maritime Code contains provisions on Limitation of Liability for Maritime Claims. In Art. 208, it is specifically provided that the provisions of this Chapter shall not be applicable to "Claims for oil pollution damage under the International Convention on Civil Liability for Oil Pollution Damage to which the People's Republic of China is a party". Hence, if the CLC applies it has priority.
54. See Chen, note 3 at 148.
55. Research conducted by the Institute of Scientific Research under the Ministry of Communications in Beijing. This was also highlighted at a seminar on compensation regime for ship-source marine pollution damage organised by the Shanghai Maritime Safety Administration in June 2001.
56. This was also the main topic at the seminar mentioned in note 36.
57. See, on the procedure to assess the damage to the marine environment in China, Wang Mao Shen, Liu Shu Jian and Shen Man Tang "The Normal Procedure of Assessment of Damage to the Marine Environment in Chinese Judicial Practice" in Colin De La Rue (ed) Liability for Damage to the Marine Environment (Lloyds of London Press, London: 1993) 29-31.
58. For a discussion of the Chinese position see also Chen, note 3 at 148-149.
59. Since the case is still pending at the Tianjin Maritime Court, the relevant information remains confidential. Source of information: International Tanker Owner Pollution Federation (ITOPF).
60. Lao Hui (from the Environment Protection Centre of the Ministry of Communication) "On China Oil Pollution Compensation System" International Seminar on Compensation Regime for Ship-Source Marine Pollution Damage, Shanghai, June 2001. (Original text in Chinese: Guan Yu Wo Guo You Wu Sun Hai Pei Chang Zhi Du Wen Ti).
61. Ibid, at 11.
62. Liu Hong and Zhou Zhengming "Setting up the Chinese Characteristic Compensation System for Oil Pollution Damage from Vessels" International Seminar on Compensation Regime for Ship-Source Marine Pollution Damage, Shanghai, June 2001. (Original text in Chinese, Jian Li You Zhong Guo Te Se de Chuan Bo You Wu Sun Hai Pei Chang Ji Zhi).
63. (1999) GHFSHIZI, No. 85 Guangzhou Maritime Court.
64. Yu Xiaohan "Oil Pollution Liability of Colliding Vessels in China" (2001) Lloyd's Maritime and Commercial Law Quarterly 19-23.
65. That change was mainly necessary to change the currency from the old point carré franc to the special drawing rights (SDR) as used by the International Monetary Fund (IMF).
66. We have elaborated these issues further in Faure and Wang, note 2 at 249-250.
67. Liu Hong and Zhou Zhengming Establishing a Chinese Compensation Mechanism for Ship Oil Pollution (Institute of Scientific Research under the Ministry of Communications, Beijing: 2002).
68. For a summary of this criticism with respect to the fact that environmental damage is insufficiently covered under the international regime see Brans, note 3 at 344-360,
69. Michael Faure and Wang Hui "The International Regimes for the Compensation of Oil Pollution Damage: Are they Effective?" (2003) Review of European Community & International Environmental Law 249-251
70. Shanghai, as the biggest coastal port in China, has, together with the Shanghai Branch of People's Insurance Company of China, worked out a method to provide insurance for small oil carriers of less than 200dwt within Shanghai port. In accordance with the tonnages of oil carriers, various levels of insurance values and compensation limits apply. It is progress, however, it is not effective when small cabotage oil carriers from other ports are involved.
71. OJ C227E/487 of 24 September 2002.
72. For an overview of regional solutions see Gold, note 2 at 40-44.
73. See also M. Harjono and E. Leemans "Vervuilen loont. Organisatie van internationale scheepvaart stimuleert milieuvervuiling op zee" in (2003/ 2) Justitiële verkenningen (criminaliteit op zee) 68-69.