clc-convention-92

Let me tell you a story.

A ship loaded a cargo of crude oil from Mina-Al-Ahmadi and was bound for Wales. On the way, it got aground outside territorial waters of any country.

119000 T of crude oil spilled and found its way on the coastal waters of two countries, UK and France. Millions of Dollars were spent for clean up operation.

Apart from the money required for clean up operation, there were number of people who lost their source of income.

For example, fishermen could no more go for fishing. People who earn their living from tourism, were also hit by this incident.

Apart from all this there is damage to the ecology which no one can measure in monetary values.

Now who would pay for all these damages ?

Ship owners ? The incident did not take place in the territorial waters of any country. Even if it did take place, the local laws for these cases are never so detailed to easily recover the money from ship owners.

Now even if ship owner had to pay the money, the money may be so big that a ship owner could loose entire business because of one incident.

What is the solution then ? CLC convention aims to bring a solution to this situation.

In fact the story I told you above is the real story of the vessel “Torrey Canyon”.

CLC convention was the result of the incident of grounding and oil pollution of the vessel “Torrey Canyon“.

bbc-on-torrey-canyon-incident

And there have been many incidents of oil pollution before and after Torrey Canyon.

largest-oil-spill-of-the-world

Let us see how CLC convention is helping to solve the problem of paying for the damages and at the same time not burdening the ship owners.

CLC convention

CLC convention first came into existence in 1969 and was called CLC 69. This convention was later amended in 1992. CLC 92 was amended in the year 2000 to increase the amount of compensation. We will discuss the latest amended convention i.e. amended CLC 1992.

CLC is the short form for “International Convention on Civil Liability for Oil Pollution Damage”.

As the name suggests, it is the convention that determines the liability of the parties in case of oil pollution damages.

CLC convention can be summarised in four points

  • Ship owner is liable for the oil spills originating from his ship
  • There are very few exceptions to this liability to the ship owners in case of oil spills from their ships
  • There is a maximum limit of liability set out in CLC according to the tonnage of the ship. This limit will not be applicable if owner is at fault
  • It is compulsory for the ship owners to take insurance to cover his liability in case of oil pollution from his ships

clc 92 summary

These four points summarises the whole CLC 92 convention in brief. Let us now discuss this convention in little detail.

1. When would CLC convention apply ?

The applicability of any convention is the most important thing. After all if a convention is not applicable in some situation then all other articles of the convention would not apply.

This is the reason that the article detailing the application of a convention is one of the initial article of any convention.

So let us see when and how CLC convention apply.

Type of oil

First thing we should know that CLC deals with oil pollution only. Which kind of oils ? It deals with pollutions from persistant oil only.

Persistent oils, as the name suggest are the one that persists longer in the environment.  Whereas Non-persistent oils either evaporate easily or disperse easily.

The pollution from persistant oil is more serious when compared to non-persistant oils. Persistant oils require more resources and money for clean up operation.

So the CLC convention applies to the pollution of persistent oils.

For example in July 2011, an abandoned oil tanker was found an aground in Mumbai’s Juhu beach. The vessel was abandoned near to Oman. The ship had drifted and got aground in Mumbai’s Juhu beach.

pavit-on-the-coast-of-mumbai-juhu-beach-clc-92

Indian authorities filed a claim of 1.8 Millions US dollars for the various works like towage and removal of oil.

The claim was rejected because the oil carried by the ship during previous voyage was MGO which is non-persistant oil.

Area of application

The area to which CLC convention would apply is covered under annex II of the convention. The CLC convention applies to any pollution incident that occurred either in the

  • Territory and Territorial waters of a contracting state. In simple words territorials waters is the area of 12 NM rasius from the baseline of the contracting state.
  • Exclusive economic zone (EEZ) of the contracting state. In simple words EEZ is the area of 200NM radius from the baseline of the contracting state.

clc-92-applicable-to

The CLC 92 does not cover the pollution incidents in the high seas. High seas pollutions were not included in the CLC convention because the pollution in high seas were considered to cause lesser damages.

Damages because of pollution incident

Even though the CLC convention deals with the pollution incidents, damage can be much more than the pollution itself.

The compensation and liability of the owner of the polluting ship does not limit to the pollution alone.

Damages include physical injury, psychological conditions and loss of income resulting from the pollution. CLC convention covers the expenses for all of these damages.

2. Who need to pay in case of pollution incident

Oil pollution incidents are costly affairs. It requires great amount of money to clean oil spills and somebody need to pay for it.

As I said, one of the principle of the CLC convention is that ship owner is liable for pollutions from their ships. And as such, in most of the cases it would be ship owner who need to pay for it.

In any case, as per article III, para 4, no claim can be made against

  • the servants or agents of the owners or crew members. If you read the footer of the emails sent by the ship management employees, it would read “as agents to the owners only”. This is to stress upon the point that they are acting on behalf of owners as agents.
  • pilot, charterers, a person performing salvage or a person taking preventive actions

liability-of-oil-pollution

So it does not matter if the ship is on bareboat charter or is being handled by a ship management company, the claim can only be made against the owner of the ship.

3. How much ship owner need to pay in case of a pollution incident

Let us talk about the money part of the CLC convention. We can talk about the money part by talking about how much ship owner would pay in case of a pollution incident.

This can be covered in 3 situations

1. Ship owners need not pay anything if he proves that

  • Pollution resulted from the act of war or natural phenomenon of exceptional, inevitable or irresistible nature. One example of natural phenomenon could include the pollution if a tanker gets aground because of tsunami.
  • Pollution resulted because a third party delibrately wanted to cause the damage to the ship
  • Pollution resulted because of negligence of government or other authority who failed to maintain the lights or other navigational aid.

exemption-to-ship-owner-as-per-clc-92

While the first point may not be difficult to prove, other two points are more difficult to prove. This means that ship owners have hardly any exception to the liability. In almost all the cases of oil pollution, ship owners need to pay the money.

2. Ship owner need to pay the full amount whatever damages are claimed by various claimants if it is proved that

  • damages were the result of acts of ship owner committed with the intent to cause this damage
  • damages were because of the acts of ship owners who knew that his acts would result in these damages

limitation-of-liability-not-apply-clc-92

For example if the ship was trading with an expired trading certificate, ship owner would need to pay for the all the damages.

3. If a ship owner do not fall in above two categories, his liability in any one pollution incident would be limited to

  • 4,510,000 SDR for vessels up to 5000 GRT
  • For vessels over 5000 GRT, the maximum liability will be 4,510,000 SDR + 631 SDR per additional GRT above 5000 GRT. So for a vessel with 10000 GRT, maximum liability would be  SDR 7,665,000 (4,510,000 + 631 x 5000)
  • Maximum liability in any case will not be more than SDR 89,770,000

liability-limit-as-per-clc-92

 

Question is why limit the liability of the ship owners ? For example if the vessel got aground because ship’s crew did not keep a good watch and damages are in billions, why owners is required to pay only fraction of it ?

The answer lies in the principle of shipping business. If there is no limit of liability on ship owner, they need to pay for more insurance. Because of this, they would charge more freight and thus oil price would be higher.

Limit on ship owner’s liability brings a balance between paying for the damages and not over-burdening the ship owners.

4. What a ship owner need to do to ensure that his ships are not arrested by the claimant

In the case of Torrey canyon incident, the claimant arrested a sister ship of the owners in Singapore. The ship could only be released upon payment of USD 3 millions to the claimants.

This was the times before the CLC convention.

But to take the advantage of CLC convention and to ensure that his ships are not arrested after a pollution incident, a ship owner need to constitute a fund equal to his liability as per CLC convention.

The idea here is that, after the investigation if ship owner is liable to pay the amount equal to his limit of liability, the claimant need not be chasing the ship owners for money.

The money should already be in the possession of the court.

The fund can be constituted by

  • depositing the sum or
  • producing the bank gauranttee or
  • any other way acceptable to the contracting state where fund need to be constituted.

5. Where the action for compensation can be brought

Again in the case of Torrey Canyon, the pollution resulted in the territorial waters of UK and France. This could be very common situation in the present scenario too.

So where the action for compensation can be brought against the ship owner ?

As per article IX of CLC 92, action can be brought in any of the country that was affected by the pollution.

Article X also states that the judgment given by the court in which action is brought will have to be recognised by other states.

6. Insurance required as per CLC 92

As per article VII of CLC 92, all ships that carry more than 2000 T of oil as cargo need to maintain insurance equal to the ship owner’s liability as per CLC 92.

This certificate is issued by the flag of the ship after the ship owner provides proof of the insurance to the flag.

cicil-liability-certificate-clc

The insurance cover (proof of insurance) is called the blue card. This blue card need to be provided to the flag along with the application for issuance of this certificate.

blue-card

The certificate is usually valid for the period of one year from 20th of February of each year.

The CLC certificate also plays one important benefit both for ship owners and the claimant. The claim for the pollution damage can be brought directly against the insurer or person providing the financial security.

Conclusion

Each year close to 11000 Billion ton-mile of oil is transported through sea. Even though oil spill incidents have reduced drastically in recent year, shipping industry need to be ready for all th eventualities.

CLC convention is one such step. It not only defines the liability in case of oil pollution incident but also limits this liability to encourage the oil trade.

The question you may ask is who would pay for the amount spent over and above the ship owner’s liability. This amount is paid under the Fund convention which I will cover in future post.

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Capt Rajeev Jassal

About Capt Rajeev Jassal

Capt. Rajeev Jassal has sailed for over 19 years mainly on crude oil, product and chemical tankers. He holds MBA in shipping & Logistics degree from London. He has done extensive research on quantitatively measuring Safety culture onboard and safety climate ashore which he believes is the most important element for safer shipping.

48 Comments

Abhimanyu
Abhimanyu
Sep 12, 2016

great blog, informative and precise !

Rajeev Jassal
Rajeev Jassal
Sep 13, 2016

Happy to hear that Abhimanyu..

Harry Bose
Harry Bose
Apr 9, 2017

Highly commendable, just wonderfully explained, clearly and simpily. This coming from a Lecturer with 17 years experience in teaching in Kolkata and an Ex Dufferin Cadet 1967-69 Batch. Keep it up. Thank you.

Rajeev Jassal
Rajeev Jassal
Apr 11, 2017

So happy to receive a positive comment from you Sir.. Thanks.

ericdelacruzlucenia
ericdelacruzlucenia
Sep 12, 2016

i'm grateful for this shared info that is benefits marlaw students

Rajeev Jassal
Rajeev Jassal
Sep 13, 2016

Glad you found it useful Eric..

Karthik
Karthik
Sep 13, 2016

Crisp & neat content..easy to understand. Thanks a lot

Rajeev Jassal
Rajeev Jassal
Sep 14, 2016

Happy to hear that Karthik..

basu
basu
Sep 14, 2016

nice to read all ur blogs for chief engineer exams sir... waiting for fund an supplementary fund as well..

Rajeev Jassal
Rajeev Jassal
Sep 15, 2016

Thank you Basu.. I will write on Fund convention soon..

Abhishek Som
Abhishek Som
Sep 14, 2016

Your explanation on CLC was quite informative and easy to understand, especially from exam point of view. Waiting eagerly for more on Fund Convention from you.

Rajeev Jassal
Rajeev Jassal
Sep 15, 2016

Thank you Abhishek.. Will write on Fund convention soon..

Leo Martin
Leo Martin
Oct 26, 2016

Gentle reminder on FUND convention explanation.

Rajeev Jassal
Rajeev Jassal
Oct 28, 2016

Thanks Leo..Fund convention is the next topic I am writing on..

abhishek som
abhishek som
Feb 4, 2017

sir i have a query, tanker in ballast and pollution is from bunker oil. then weather liablity will be limited as per CLC 92 or as per Bunker convention?.

Rajeev Jassal
Rajeev Jassal
Mar 13, 2017

CLC 69 did not cover bunker oil pollution and pollution from tankers in ballast but the CLC 92 amendments included the pollution from bunker oils and also for tanker in ballast. So yes, CLC 92 would cover bunker oil pollutions too.

laxman prasad
laxman prasad
Sep 14, 2016

very very informative thanks a lot sir

Rajeev Jassal
Rajeev Jassal
Sep 15, 2016

Glad you liked it Laxman..

anuj
anuj
Sep 15, 2016

thanks a lot sir for the information. Is CLC convention applicable for a tanker carrying persistent oil as bunker during her loaded voyage and the pollution is caused by her bunker oil only?

Rajeev Jassal
Rajeev Jassal
Sep 15, 2016

CLC 69 did not cover bunker oil pollution and pollution from tankers in ballast but the CLC 92 amendments included the pollution from bunker oils and also for tanker in ballast. So yes, CLC 92 would cover bunker oil pollutions too.

Vijeesh kumar
Vijeesh kumar
Sep 28, 2016

Good article.....had no idea before about clc...plz include marpol and ILL in your future posts

Rajeev Jassal
Rajeev Jassal
Sep 28, 2016

Glad you liked it Vijeesh..

Pradeep saxena
Pradeep saxena
Sep 30, 2016

Very nicely explained sir very easy to understand salvage and clc

Rajeev Jassal
Rajeev Jassal
Oct 2, 2016

Happy to hear that Pradeep..

ALI OZCAN
ALI OZCAN
Oct 4, 2016

Very helpfull blog...thanx

Rajeev Jassal
Rajeev Jassal
Oct 16, 2016

Glad you found it helpful Ali..

pradeep
pradeep
Nov 12, 2016

Sir can u explain the time limit of 3years and 6years in case of clc .why there are two separate time given (3years from damage or 6 years from incident)

Rajeev Jassal
Rajeev Jassal
Nov 17, 2016

3 years is the normal time frame. 6 years limit is allowed in exceptional circumstances. For example if the impact of an incident is over a longer period.

LYNDON FERNANDES
LYNDON FERNANDES
Jul 7, 2017

Sir, first and foremost well explained. my question is in the 3 year normal time period, I being a claimant i have raised a claim, against this ship which has polluted my beach, for a certain amount, and i have used those funds for the clean up operation,now in the 4 year i have realised that the coral reef which i had not noticed before was also damaged, so can i make a claim again? since i'm still falling under the 6 years claim period.

Hamoon
Hamoon
Dec 13, 2016

perfect , your blog is my source for my exams . thanks captain

Rajeev Jassal
Rajeev Jassal
Dec 15, 2016

Glad you found it useful Hamoon..

Manish singh
Manish singh
Jan 4, 2017

Sir ur blogs are excellent source of information and you have an exceptional talent to explain things in a very simple manner. Plz keep up the gud work for others. Thank you

Rajeev Jassal
Rajeev Jassal
Jan 13, 2017

Glad you liked it Manish.. You guys reading it makes all the efforts worthwhile..

Ritesh Rawat
Ritesh Rawat
Mar 11, 2017

Good and infromative article.I have a question here.Can you please explain that in case of pollution from bunker tanks of an oil tanker in ballast(assuming it to be a persistent oil e.g HFO) ,which convention will apply?CLC or Bunker convention?

Rajeev Jassal
Rajeev Jassal
Mar 13, 2017

CLC 69 did not cover bunker oil pollution and pollution from tankers in ballast but the CLC 92 amendments included the pollution from bunker oils and also for tanker in ballast. So yes, CLC 92 would cover bunker oil pollutions too.

Rajeewa Wickramahewage
Rajeewa Wickramahewage
Mar 26, 2017

It is very great article. thnks

Rajeev Jassal
Rajeev Jassal
Mar 28, 2017

Thanks Rajeewa..

ASHUTOSH KUMAR
ASHUTOSH KUMAR
Apr 8, 2017

bunker spill in usa water limit of liablity pay under what convention

Rajeev Jassal
Rajeev Jassal
Apr 11, 2017

USA have not ratified CLC convention. They have their own regulation (OPA) which requires the ship owners to maintain financial security (COFR) for oil spills in US waters.

Anant Batra
Anant Batra
Jun 16, 2017

Good day sir, kindly advice if as per COFR also P&I will be the insurer for claim settlement and how much is the limit of liability. Thanks for dedicating your time on all of this sir.

PRITAM
PRITAM
May 13, 2017

Very nicely explained in lame language sir.....keep it up ur nyc work.

Rajeev Jassal
Rajeev Jassal
May 15, 2017

Glad you liked it Pritam..

sudhansu pandey
sudhansu pandey
May 14, 2017

beautifully explained....thanks a lot sir

Rajeev Jassal
Rajeev Jassal
May 15, 2017

Thank you for being a Reader Sudhansu..

Anant Batra
Anant Batra
Jun 16, 2017

Good day sir,

Shashi Kant
Shashi Kant
Jun 22, 2017

Great explanation sir, Very informative, way of presentation is very impressive, Language is simple and easy to understand, It makes curiosity to learn more and generates interest.

Rajeev Jassal
Rajeev Jassal
Jun 23, 2017

Glad you found it useful Shashi...

Satkar
Satkar
20 hours ago

Always a pleasure to read your articles, Sir. Could you please share your views on how a country or a coastal state goes about recovering damages when they're not a party to a convention such as CLC Oil or Bunker as the case was with India in the famous Chitra incident. Also please share your views on recent Dawn Kanchipuram and BW Maple incident. Who pays for the spill and why ? What's India's remedy for Bunker spills ?

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