Overview of the Compensation and Liability Regimes Under the International Oil Pollution Compensation Fund (IOPC)

This paper focuses on the cost recovery issues arising through the operation of the International Oil Pollution Compensation Fund (IOPC) and administrative matters which arose following the Braer and Sea Empress oil tanker pollution incidents in the UK. Each of these oil spills brought very different problems.Any major oil spill will have prolonged economic and social consequences for the communities affected. Membership of the International Oil Pollution Compensation Fund (IOPC Fund) will do much to soften the impact as regards economic damage. However, the operation of the Fund brings difficulties which may not have been considered by the administration prior to the spill. Some of the difficulties are foreseeable.It covers details of the international compensation and liability regimes, it considers a number of administrative consequences and highlights seven lessons that have been learned in the UK in the light of recent experience. These lessons are:

• ?Claims may not be paid quickly or in full.
• ?Claimants will need advice and government involvement.
• ?Action by the government may be needed to complement the IOPC Fund.
• ?Governments have to balance their obligations as a member state with the needs of claimants.
• ?It is better for claimants to keep matters out of court for as long as possible.
• ?Administrative consequences will continue for a long time after the oil has been cleared from the shoreline.
• ?Each major oil spill brings different cost recovery problems and will also bring demands ‘to learn the lessons’.

In much the same way as contingency plans are regularly tested, each state party to the regime would be wise, from time to time, to think through the likely scenarios so as to better prepare themselves in the light of experiences elsewhere. The United Kingdom has had rather more experience in recent years than it would have wished!