Summary of 30 years of compensating victims of oil pollution from ships
Impacts of the 2018 modifications to the Marine Liability Act on the Fund
Legislative amendments to the Marine Liability Act (MLA) to modernize the Fund came into force in December 2018. They:
- Removed the Fund’s per-incident liability cap, meaning compensation for claimants is now unlimited;
- If the Fund is ever emptied, the Consolidated Revenue Fund may provide temporary replenishment;
- Added a new simplified and fast-tracked process for most claims up to $35,000;
- Made available emergency funding up to $10 million to Fisheries and Oceans Canada in the event of a major oil spill;
- If the initial funds are exhausted, additional funding can be provided up to $50 million;
- Clarified that certain forms of economic loss (including loss of revenue) are compensable;
- Expanded the Fund’s liability when Fisheries and Oceans Canada takes preventive measures before a “grave and imminent threat” of oil pollution damage arises.
- Modernized the levy (fee per tonne, inactive since 1976) that can be charged to oil importers and exporters;
- Administrative monetary penalties have been created for contraventions of these provisions.
The Chaulk Determination
The Ship-source Oil Pollution Fund (SOPF) recently paid out its largest claim ever, for an incident involving the sinking of the tugboat Chaulk Determination, which had occurred on December 26, 2014, at the wharf of the Port of Trois-Rivières, Quebec. At the time, the vessel was leaking fuel oil into the St. Lawrence River. (For more details regarding the incident, click here.
On December 9, 2016, the Canadian Coast Guard (CCG) filed a claim, on behalf of the Department of Fisheries and Oceans (DFO), in the amount of $4,585,963.68 with the Administrator, pursuant to the Marine Liability Act, for costs and expenses incurred responding to the pollution incident of the Chaulk Determination.
An assessment of the claim was carried out, and on July 18, 2018, the Administrator made a global offer to the CCG, of $4,200,576.18 (including interest).
The CCG accepted the offer on September 17, 2018 and payment was made on September 19, 2018.
The largest indemnification paid in Canada for a single incident was paid out by the International Oil Pollution Compensation Funds (IOPC Funds), for the Rio Orinoco. This tanker incident occurred in Canadian waters on October 16, 1990, on the west coast of Anticosti Island. The IOPC Funds paid out a total amount of some $11.8 M for claims totalling over $12.3 M from the Canadian Coast Guard, Environment Canada and the Department of Fisheries and Oceans.
SOPF Claims Manual
The last version of the SOPF Claims Manual was issued in 2014. It focuses on claims for clean-up costs and preventative measures.
In the recent past, the Fund has received a number of claims and queries, which were not covered by the claims manual. We are therefore planning to issue a new version of the claims manual, along the following lines:
- The claims manual would be structured as forms, one for each type of claim or damage.
- The use of these forms would not be mandatory, but they could be used as a checklist of the key elements that will be needed for the assessment of claims by the Administrator’s Office.
- The forms would be accompanied by some guidance text. The International Oil Pollution Compensation Funds Example Claim Form could be used as an inspiration: https://www.iopcfunds.org/uploads/tx_iopcpublications/IOPC_Claims_Form__ENGLISH_2018_WEB_01.pdf
If you wish to receive a draft copy of the new version when it is ready to be circulated to stakeholders for comments, please contact email@example.com
Please note that, as a side project, the Administrator’s Office is also compiling and updating its claims management policies and assessment practices with the view to posting them on SOPF’s website.