Plea for oil spill compensation fund turned down

A plea for a new multi-million pound fund to compensate coastal communities in Scotland and across Europe for environmental damage from oil spills has been rejected by an international body.

At a meeting in London last week, the 114-nation International Oil Pollution Compensation Funds (IOPCF) refused to back a bid led by a Shetland councillor representing over 150 coastal and island communities from 28 countries.

Jonathan Wills, an independent councillor from Bressay in Shetland, argued that a new fund was needed because compensation for the damage that oil pollution does to nature was rarely paid. He was speaking on behalf of the Conference of Peripheral Maritime Regions.

IOPCF delegates, however, disagreed. “Whilst the issues raised provided food for thought, there was no support for the proposal to consider creating an additional fund for claims for environmental damage,” concluded the official record of last week’s meeting (see below).

Wills was disappointed that delegates didn’t back his bid, but encouraged by the feedback he had received. “Victims of marine oil pollution often have to wait years for compensation and then may only receive less than two thirds of what they are due,” he said.

“Compensation for environmental damage is even harder to get. The IOPCF have the money but the rules on applying for environmental damage compensation are very strict and complicated. So in practice such payments are hardly ever made.”

He pointed out that a recent ruling by the Spanish Supreme Court on the Prestige oil disaster in 2002 was expected to lead to claims for multi-billion pound damages. “This has sparked a crisis in the insurance industry as insurers now face the prospect of very large and unpredictable costs,” he said.

“That is why we asked the IOPCF to begin talks about establishing a new fund specifically to cover environmental, as distinct from economic, damages from pollution.”

Victims of marine oil pollution often have to wait years for compensation and then may only receive less than two thirds of what they are due Jonathan Wills, Conference of Peripheral Maritime Regions

Coastal communities may now write to the IOPCF asking for the rules governing applications for environmental damage to be simplified and loosened. “We will consider an approach to the International Maritime Organisation if we consider that a new international convention is necessary,” Wills added.

“The meeting in London did agree on one of our points: this issue will not go away.”

In his speech to IOPCF last week Wills described his plea as a respectful suggestion for further discussion to resolve uncertainties. “Please note that this is not an aggressive demand from self-righteous, self-appointed eco-warriors,” he said.

Victoria Turner, the spokeswoman for IOPCF, confirmed that Wills’s proposal had not been supported. “We would point out that one of the main reasons for the rejection of the proposal is that the international regime applicable to oil spills from tankers already covers claims for environmental damage, including clean-up operations and measures to reinstate the environment,” she said.

The minute of last week’s meeting quoted several delegations making the same point. “The creation of an additional fund would be a complicated and unnecessary duplication,” it said.

The shipping and insurance industries are understood to have concerns about Will’s proposal. But the International Chamber of Shipping declined to be quoted, and the International Group of Protection & Indemnity Clubs, which includes insurance companies, did not respond to a request to comment.

Extract of the Record of Decisions of the October 2016 meetings of the IOPCF’s governing bodies

A version of this article was published in the Sunday Herald on 23 October 2016.

Photo thanks to Luis Miguel Bugallo Sánchez, GFDL or CC-BY-SA-3.0, via Wikimedia Commons.

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