ICS, along with Bimco and Intertanko, will mount a defence of the fund at an IOPCF meeting next week highlighting the outstanding claims not covered by the 1992 Fund, ICS argues that to wind up the 1971 fund would be breach of the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution.
Moreover, the move would will affect P&I clubs’ confidence in the 1992 fund, and reduce their willingness to pay out in the future, says ICS secretary general Peter Hinchliffe: “Because of the failure to address outstanding claims, the P&I Clubs may no longer be willing to continue their current practice of making advance interim payments, following pollution incidents, in excess of the shipowners’ limitation amounts (under the IMO Civil Liability Convention) if it is thought that these excess payments may not be compensated by the 1992 Fund in the future.
“This could cause delay in providing compensation, potentially resulting in significant hardship for claimants when they could already be in difficult circumstances."
The decision may put the future of the the IMO Civil Liability (CLC) regime, whereby costs are divided between shipowners and cargo owners as a “quick and efficient means of compensating pollution victims”, in jeopardy, Hinchliffe argued: “We wish to avoid jeopardising the future operation of the IMO regime. The decision to wind up the 1971 Fund before claims have been settled also appears to contravene the IMO Fund Convention. We therefore hope that governments will do the right thing and reverse this unfortunate decision.”
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