Compensation

There are different compensation schemes for the damage caused by oil pollution from oil tankers, most notably the Civil Liability Convention (CLC) and the Fund Convention. The extent to which oiled wildlife response can be compensated for is assessed on a case-by-case basis and the CLC and Fund Conventions provide the necessary guidance to make this assessment. The capture, cleaning and rehabilitation of wildlife and also wildlife impact assessment are activities that can be compensated for.

The international oil pollution compensation regime

The International Oil Pollution Compensation Regime can be divided into three categories:

The key organisations with regard to compensation issues are:

Protection and Indemnity Clubs (P&I Clubs)

Protection an Indemnity Clubs are the first source of compensation for oil spill damages on behalf of any of its ship owner members under the International Convention on Civil Liability for Oil Pollution Damage (Civil Liability Convention or CLC).

The International Oil Pollution Compensation Funds (IOPC)

The International Oil Pollution Compensation Funds (IOPC Funds) are two intergovernmental organisations (the 1992 Fund and the Supplementary Fund) which provide compensation for oil pollution damage resulting from spills of persistent oil from tankers. Under this compensation regime the owner of a tanker is liable to pay compensation up to a certain limit for oil pollution damage following an escape of persistent oil from his ship. If the amount available from the 1992 Fund does not cover all the admissible claims, additional compensation may be available from the 1992 Fund. Supplementary Fund, if the State is a Member of that Fund as well.

The IOPC Funds are financed by levies on certain types of oil carried by sea. The levies are paid by entities which receive oil after sea transport, not by States. Anyone who has suffered pollution damage in a Member State may make a claim against the IOPC Funds for compensation. Information on the types of claims which are admissible is available in the Claims Manual

International Tanker Owners Pollution Federation (ITOPF)

The International Tank Owners Pollution Federation's role in damage assessment and claims analysis is one of providing advice on the technical merit of claims to those bodies which will pay the compensation (e.g. the Protection and Indemnity (P&I) Clubs and the International Oil Pollution Compensation Funds).  These bodies, not ITOPF, ultimately decide whether or not a particular claim should be paid since many factors, other than purely technical considerations, may influence the final decision.
Under the terms of the international compensation conventions, oil spill response measures are required to be "reasonable", if they are to qualify for compensation ("reasonable" is generally understood to mean, in the context of clean-up, that the measures were justified on the basis of an objective technical evaluation of the situation at the time the decision was taken). 

The Hazardous and Noxious Substances Convention (HNS Convention)

The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (the HNS Convention) has not yet come into force. When ratified by at least 12 nations (eight countries have ratified as of 2015) the HNS Convention will establish a method by which “damage caused by the carriage by sea of hazardous and noxious substances” can be compensated. This Convention will be managed like other IMO Funds. As of 2012, seven countries had signed on.

Coverage will include any damage caused by hazardous or noxious substances in the territory, territorial sea or exclusive economic zone of any country that is party to the convention. Transport of the HNS to and from the ship will not covered by the convention. Wildlife, although not specifically mentioned, falls under the scope of 'measures to prevent and minimise damage to the environment.

The HNS fund will be financed by contributions from those parties receiving HNS which has been transported by sea to ports and terminals of Member States. Four separate accounts will be maintained, one each for general (bulk solids and other HNS), oil, LPG, and LNG.