THE MERCHANT SHIPPING (CIVIL LIABILITY AND COMPENSATION FOR OIL POLLUTION) ACT 1998

MC No.10 of 1998

05-12-1998

  1. The International Convention on Civil Liability for Oil Pollution Damage 1969 (CLC 69) together with the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (Fund 71), set out the international rules and procedure for dealing with liability and compensation for oil pollution damage. The Conventions provide for the sharing of the costs of compensation between the shipowners and cargo interests. Compensation is initially paid by the owner, whom the CLC 69 makes strictly liable for oil pollution damage. Since CLC 69 also generally provides for limitation of the owner's liability, additional compensation is available, if needed, from the International Oil Pollution Compensation Fund (the 1971 Fund), established under Fund 71. The Fund is financed by contributions from importers and receivers of oil.
  2. Singapore has been a party to CLC 69 since 1981. The 1981 Merchant Shipping (Oil Pollution) Act gave effect to CLC 69.
  3. CLC 69 and Fund 71 are inadequate to meet current levels of claims. In 1992, the IMO adopted two Protocols to amend CLC 69 and Fund 71. The Protocols i.e. the International Convention on Civil Liability for Oil Pollution Damage 1992 (CLC 92) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage in 1992 (Fund 92) raised the level of compensation that victims of oil pollution can claim as a result of an oil pollution from ships. Under CLC 92, the limit of compensation has been raised from about 14 million special drawing rights (SDR) (S$33 million) (in CLC 69) to about 59.7 million SDR($139 million). Under Fund 92, the limit of compensation has been raised from about S$139 million (in Fund 71) to about 200 million SDR (S$465 million).
  4. The Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act 1998 gives effect to the Protocols. Singapore acceded to CLC 92 and Fund 92 on 18 Sep 97 and 31 Dec 97 respectively. CLC 92 came into force for Singapore on 18 Sep 98. Fund 92 will come into force for Singapore on 31 Dec 98. The new Act replaces the 1981 Act. The Marine Circular to Shipowners No. 6 of 1998 and press releases issued on 20 Sep 97 and 5 Jan 98 drew the attention of the shipowners, maritime community, oil companies, traders and receivers to these Conventions.
  5. Besides the higher compensation available to oil pollution victims which has been mentioned, there are the following differences between the old Act, which implements CLC 69, and the new Act which implements CLC 92 and Fund 92:
    1. Under Section 6 of the new Act, owners of ships not exceeding 5,000 tons can limit their liability to a fixed sum of 3 million SDR (about S$7 million).
    2. Under Section 3 of the new Act, expenses incurred for preventive measures are recoverable even where no spill of oil occurs, provided that there was a grave and imminent threat of pollution damage.
    3. Provisions of the new Act apply to pollution damage both in the territory (including the territorial sea) and the exclusive economic zone (EEZ) of Singapore.
    4. Provisions of the new Act apply to spills from sea-going vessels constructed or adapted to carry oil in bulk as cargo, whether laden or unladen and apply to spills of bunker oil from such ships.
  6. In giving effect to Fund 92, Section 25 (4) of the new Act requires contributions to be paid to the 1992 International Oil Pollution Compensation Fund as follows:

    "The Person liable to pay contribution is:

    1. In the case of oil which is being imported into Singapore, the importer; and
    2. Otherwise, the person by whom the oil is received.

    A person shall not be liable to make contributions in respect of the oil imported or received by him in any year if the oil so imported or received in the year does not exceed 150,000 tonnes."

    The major oil companies, oil traders and oil storage companies in Singapore will contribute to the 1992 Fund. The amount to be paid each year will depend on the number and size of oil spills in the States party to the Fund 92, the amount of claim that exceeds the limit of the CLC 92, the cost and expenses of the administration of the 1992 Fund in the relevant year and any deficit from operations in preceding years. The amount of contribution is to be fixed by the 1992 Fund. The 1992 Fund, shall, subject to certain prescribed limits, be liable to any person who is unable to obtain full compensation for oil pollution damage from the shipowner or his insurer if, inter alia, the shipowner is incapable of meeting the claim or the claim exceeds the limitation fund of the owner established under Section 7 of the Act.

  7. Section 40 of the Act provides that CLC 69 shall cease to have effect for Singapore on 31 Dec 98. This means that all CLC 69 certificates previously issued by the Shipping Division, MPA will be considered invalid from 31 Dec 98. Shipowners are therefore requested to return their CLC 69 certificates to the Shipping Division for cancellation.
  8. Any enquiries relating to this circular may be directed to Ms. Emily Sihab at Tel: 3756227 or Mr. Chandru S R at Tel: 3756217.


LEE SENG KONG
DIRECTOR OF MARINE
MARITIME AND PORT AUTHORITY OF SINGAPORE

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