Volume 6, Number 1, Page 4

The International Convention on Civil Liability for Oil Pollution Damage

By Joaquin Goncalves

The danger of shipping-related pollution was recently illustrated in Venezuela by several oil spills resulting in natural disasters. Along with similar disasters in the past, this has provided a stimulus for the Venezuelan government to enforce safety standards applicable to shipping. As outlined below, Venezuela is a signatory of the International Convention on Civil Liability for Oil Pollution, which it has now resolved to enforce more effectively.

Venezuela is a signatory of the International Convention on Civil Liability for Oil Pollution Damage (the “Convention”), published in its Special Official Gazette No. 4,340 of November 28, 1991.

The Convention addresses liability issues related to oil pollution from oil tankers; it does not establish a universal regime for all types of cargo or all types of ships. According to the Convention, a “ship” is defined as any sea-going vessel built or adapted for the purpose of carrying oil in bulk. However, a vessel capable of carrying oil shall be considered a ship only when it is actually carrying oil in bulk or has large quantities of oil residue aboard.

The Convention provides for strict but limited liability for pollution damages caused by spills from vessels carrying oil in bulk. This liability applies not to the ship operator or to the cargo owner, but rather to the ship owner, who alone is responsible for the ship’s safe operation and seaworthiness.

The Convention provides for strict rather than absolute liability. That is, the owner is not liable if he/she can prove that an incident resulted from war, hostilities, insurrection or natural phenomena which are of an inevitable, or irresistible nature, or was caused intentionally by any governmental authority or other authority in charge of navigational lights or other aids, or was wholly caused by the intentional actions of a third party or the negligence of those responsible for navigational aids.

Under the Convention, claims of oil pollution may only proceed against the owner of the ship. According to the Convention, an owner is defined as the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons who own the ship.

However, in the case of a state-owned ship operated by a company registered in said state as the ship’s operator, the “owner” shall mean that company.

Therefore, no claim for compensation for pollution damage may be filed against: (i) the servants or agents of the owner or members of the crew; (ii) the pilot or any other person who, without being a member of the crew, performs services for the ship; (iii) any charter operator or manager of the ship; (iv) any person performing salvage operations with the consent of the owner or on the instructions of a competent public authority; or (v) any person taking preventive measures.

The owner is entitled in most cases to limit his liability (according to a formula related to the tonnage of the ship) to a specific overall total. In order to have the right to limit liability, the ship owner must deposit a sum equal to the amount of his liability with the court; this sum will be distributed to claimants in proportion to the amounts they claim. The limits of liability, for each occurrence, are calculated as follows: (i) 3 million “account units” for ships not exceeding 5,000 tons; and (ii) for ships over 5,000 tons, 420 account units for each additional ton.

The “account unit” refers to the Special Drawing Right, as defined by the International Monetary Fund. These amounts are converted into the currency of the country where the action is brought, on the basis of the value of that currency (in reference to the Special Drawing Right) on the date the owner constitutes the fund to be distributed to the claimants.

However, the owner cannot limit his/her liability under the Convention if it can be proven that the pollution damages resulted from his/her personal acts or omissions, committed with the intent to cause such damage or recklessly and with knowledge that such damages could result.

The Convention defines “pollution damage” as “loss or damage caused outside the ship” occurring on the territorial seas or territory of a contracting party. It expressly includes the cost of preventive measures, additional costs, a proportion of fixed costs incurred by public authorities in maintaining pollution response capability, direct economic loss, and damage to property.

The Convention does not apply to warships or other ships owned or operated by a state and used, at that time, for solely non-commercial governmental service. When pollution damage occurs as a result of an incident involving two or more ships occurs, the owners of all the ships involved are jointly and severally liable for all damages which are not reasonably divisible.

Finally, the right to compensation under the Convention is limited to actions brought within three years of the date the damage occurred.

Joaquín Goncalves is an attorney with Baker & McKenzie in Caracas