About
Subject to certain limited exceptions, the registered owner of a vessel will be strictly liable for oil pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil from oil tankers. The 1992 Protocol also widened the scope of the Convention to cover pollution damage caused in the exclusive economic zone (EEZ) of a contracting state.
The ship-owner may limit its liability in respect of any one incident. The limitation of liability shall be calculated based on the ship's tonnage. However, where there is a personal act or omission committed with the intent to cause such damage, or a reckless act or omission committed with knowledge that such damage would probably result on part of the ship-owner, the ship-owner may not limit their liability.
In some jurisdictions, courts have interpreted the right to limit liability pursuant to the CLC to not be applicable in situations where the Master of the vessel was considered to have acted recklessly with knowledge of the damage that would probably result.
This led the IMO General Assembly to pass resolutions concerning the correct interpretation of the CLC. It was inter alia resolved that:
- the level of culpability required should be analogous to wilful misconduct, i.e. higher than gross negligence,
- this should correlate with the level needed to lose insurance coverage, or deprive the ship-owner of the right to be indemnified under their marine insurance policy, and
- the conduct of parties other than the ship-owner, for instance the master, crew or servants of the ship-owner, should not be considered.
In sum, this resolution from the IMO means that the possibility to break the ship-owners right to limit liability under the CLC is very limited.
The CLC provides for a compulsory liability insurance regime for ships carrying more than 2,000 tons of oil as cargo. Such ships shall at all times carry a certificate attesting that the registered owner maintains insurance or other financial security sufficient to cover the maximum liability for one oil spill. Such certificate is issued by the appropriate authority (e.g. the Norwegian Maritime Authority for Norwegian registered ships) of a contracting state upon application by the ship-owner, who should present a Blue Card issued by the P&I Club as evidence of insurance coverage.
Another key provision is the requirement for direct action, which allows for a claim for compensation for pollution damage to be brought directly against an insurer.
Who does it impact?
- The Convention applies to all seagoing vessels constructed for the carriage and actually carrying oil in bulk as cargo.
- Only ships carrying more than 2,000 tons of oil are required to maintain insurance in respect of oil pollution damage.
Status: In force
The CLC was originally adopted in 1969 and entered into force in 1975.
The CLC was amended by way of the 1992 Protocol, which was adopted on 27 November 1992 and entered into force on 30 May 1996.
Relation to other initiatives and regulations
- Developed under the auspices of the International Maritime Organization (IMO).
- The Bunker Convention is modelled on the CLC. Note that the Bunker Convention does not apply in circumstances where the CLC applies. Thus, any vessel already subject to the CLC will not be affected by the Bunker Convention.
Participants
There are more than 140 states parties to the CLC.
A list of all signatories can be found here.
The US is not a signatory to the CLC, due to its national legislation (in particular the Oil Pollution Act of 1990) having been considered sufficient.
Thommessen's comments
The most practical implication of the CLC is that the registered owner of a vessel carrying more than 2,000 tons of oil as cargo must ensure to maintain compulsory insurance and to at all times carry an attesting certificate on board the ship.
Ships trading to countries that are party to the CLC and/or the Bunker Convention must provide evidence of insurance covering the liability of the registered owner. Ships sailing without having the required insurance and/or attesting certificate runs the risk of being detained by local authorities.