Fund Liability Content

Background

The Canadian regime addresses all ships, other than tankers covered under the international regime.

It does not apply, however, to drilling activities insofar as an escape or discharge of oil emanates from those activities.

Nor does it apply to a floating storage unit, or floating production storage units, unless the unit is carrying oil as a cargo on a voyage to or from a port or terminal outside an offshore oil field.

The SOPF’s liability for matters related to oil pollution is covered under section 101 of the Marine Liability Act.

Basically, the Fund is available to pay claims for oil pollution damage, or anticipated damage, on any Canadian inland and coastal waters including the Exclusive Economic Zone of Canada.

The Ship-source Oil Pollution Fund is available for compensation if all reasonable steps have been taken to recover compensation from the shipowner and those steps have been unsuccessful, if the shipowner is able to raise any one of the statutory defences, if the claim for compensation exceeds the shipowner’s limit of liability, if the shipowner is financially incapable of meeting his obligations or if the cause of the oil pollution damage is unknown, a situation commonly referred to as “mystery spill”.

The maximum liability of the SOPF for all claims from one oil spill in April 2016, for example, was $168,656,700. The maximum liability of the SOPF is indexed annually to the Canadian Consumer Price Index.