SHIP-SOURCE OIL POLLUTION FUND
The Administrator's Annual Report
2003-2004
Canada Photo courte ) of EnYironment anada ee ection 3.24.
Published by the Administrator Ship-source Oil Pollution Fund 1h 90 Elgin Street, 8 Floor Ottawa, Ontario, Canada KIA 0 5
Tel: (613) 990-5807 (613) 991- 1726 Fax: (613) 990-5423 Ship-Source Oil Pollution Fund
The Administrator's Annual Report
2003-2004
Canada
The Honomable Jean Lapiene, P.C., M.P. Minister of Transport Ottawa, Ontario KlAO 5
Dear Mr. Lapiene:
It is an honom to submit the Annual Report fo r the Ship-source Oil Pollution Fund fo r the fiscal year ending March 31, 2004, to be laid before each House of Parliament, in accordance with Section 100 of the Marine Liability Act.
Your incerely,
Kenneth A. Maclnni , QC The Administrator of the Ship- ource Oil Pollution Fund
Table of Contents
. . ' . ' ...... Adminis .. t ra t or s c ommunique . . 1
Summary ...... v
1. Responsibilites and Duties of the Administrator ...... I
2. The Canadian Compensation Regime ...... 3
3. Canadian Oil Spill Incidents
3.1 Haralam.bos (1996) ...... 7
3.2 Gordon C. Leitch (1999) ...... : ...... 9
3.3 Sam Won Ho (1999) ...... 9
3.4 Mystery Oil Sp ill-Port Cartier, Quebec (2000) ...... 10
3.5 Skaubryn (2000) ...... 11 3.6 Miles and Sea (2002) ...... 12
3. 7 Katsheshuk (2002) ...... 13 3.8 Mystery Oil Sp ill-Hopedale, Newfoundland and Labrador (2002) ...... 14
3. 9 Kung Fu (2002) ...... 14
3. 10 Jolie Vie (2002) ...... 15
3.11 Stellanova/Canadian Prospector (2002) ...... 16
3. 12 FV 1995-05 (2002) ...... 16
3. 13 First Lady (2002) ...... 16 3.14 Silver Eagle (2003) ...... 17
3. 15 Northern Light V (2003) ...... 18
3. 16 ThreeK 's (2003) ...... 18
3. 17 CCGS Hudson (2003) ...... 19
3. 18 Maersk Gabarus (2003) ...... 19
3. 19 Caribou (2003) ...... 19
3.20 Retreiver (2003) ...... 19
3.21 CCGC Cumella (2003) ...... 20
3.22 Sandpiper (2003) ...... 20
3.23 Vandalism Incident, Shippegan, New Brunswick (2003) ...... 20
3.24 Shinei Man1 #85(2003) ...... 21
3.25 Safari Sp irit (2003) ...... 21
3.26 Beaufo rt Sp irit (2003) ...... 22
3.27 Pender Lady (2003) ...... 22 3.28 Mac Asphalt 40 1 (2003) ...... 23
3.29 Silent Provider (2003) ...... 24
3.30 Silver Seas (2003) ...... 24
3. 31 Gil/king (2003) ...... 24
3.32 Mystery Sp ill, Grenville Channel, British Colombia (2003) ...... 25
3.33 Ma ry Todd (2003) ...... 25 3.34 Submerged Drums, Goose Bay, Newfoundland and Labrador (2003) ...... 26 3.35 Black Dragon (Heung Ryong) (2003) ...... 26
3.36 Transporter No. 5 (2003) ...... 27
3.37 Bedfo rd Basin, Nova Scotia (2003) ...... 27
3.38 John Boy (2003) ...... 27
3.39 Leota B (2003) ...... 28 3.40 My stery pill, Bassin Loui e, Quebec (2003) ...... 28
3.41 My stery pill, Trois-Riviere, Quebec {2003) ...... 28 3.42 Kaien (2004) ...... 29
3.43 An comb (2004) ...... 29
3.44 Oiled Bird -Placentia Bay, Newfoundland and Labrador (2004) ...... 30
3.45 Anna M (2004) ...... 30
3.46 Other Incident (2003-2004) ...... 31
4. Challenges and Opportun ities
4. 1 Qua i-Criminal Liability fo r Environmental Offence in Canada
- Propo ed Change ...... 33
4.2 Civil Liability fo r Environmental Damage in Canada ...... 34
4.3 Environmental Damage Fund (EDF)- En ironment Canada ...... 35
4.4 Environmental Camage Fund (EDF)- ational Work hop ...... 35
4.5 Fine Increa e for Environmental Offe n e in Canada ...... 36
4.6 [nternational Recognition of Canada' EDF...... 36
4.7 Environm nt Damage A e ment and Re toration in anada ...... 37
4. Prevention and Re pon e Mea ure in anada ...... 38
4.8.1 Oiled Wildlife I ue ...... 38
4 ..2 World Wildlife Fund anada (WWF- anada) ...... 39
4 ..3 Pr ention of Oiled Wildlife-POW Proj ct...... 39
4 . .4 Port Reception Facilitie fo r Oily a te...... 40
4. .5 a tiona] rial ur ei llance Program P) ...... 41
4 ..6 at llite Te hnology to Dete t Oil Pollution ...... 4 1
4.9 hange to the 1992 International Regime- Impact on OPF ...... 42
4.9. 1 Increa e in omp n ation Limit ...... 42 · 4.9.2 upplementary Fund- "Optional Third Tier ...... 43
4.10 Flag tate and Port tate ontrol ...... 44 4. 11 The Polluter Pay ...... 44
5. Outreach Initiatives
5. 1 General ...... 47
5.2 Regional Environmental Emergenc Team (REET) ...... 47
5.3 ewfoundland and Labrador En ironmental Indu try ociation (NEIA) . ...49 5.4 Canadian Marine Ad i ory Council ational)......
5.5 Canadian Marine Ad i ory Council (Arctic)...... 51
5.6 Regional Advi ory Council on Oil pill Re pon e ...... 52
5.7 Respon e Organization and CCG Equipment Facilitie ...... 53
5.8 Rendez-Vous 2004 - Quebec ...... 54
5.8. 1 Segmentation de Rives ...... 55
5.8.2 Programme d'action Communautaires ...... 55 5.8.3 Centre de documentation de recherche et d'experimentation sur les pollutions accidentelles de eaux.
(Cedres - France) ...... , ...... 55
5.8.4 Sante Communautaire ...... 55
5.8.5 Conseil consultatif regional ...... 56 5.8.6 Programme National d'exercices...... 56 5.8.7 Genie Web ...... 56 5.8.8 Union Quebecoise de rehabilitation des oiseaux de proie ...... 56 5.8.9 RADARSAT : Yves Crevier - Agence Spatiale Canadienne ...... 56 5.8.10 Intervention dans Jes glaces ...... 57 5.8.11 Spillview ...... 57
5.9 InternationalConf erence on Marine Resource Damage Assessment (MARE-DASM)- Liability and Compensation ...... 57 5.10 HNS Conespondence Group - Special Meeting ...... 58 5.11 International Oil Spill Conference (IOSC 2003) ...... 59 5.12 Tran port Canada Marine Safety Investigator's Course ...... 59 5.13 Canadian Maritime Law Association ...... 60
6. SOPF Liabilities to the International Funds
6.1 1969 CLC and 1971 IOPC ...... 61 6.2 1992 CLC and 1992 IOPC ...... 61 6.3 Canadian Contributions ...... 62
7. Financial Summary - SOPF ...... 63
Appendix A: The International Compensation Regime ...... 65
Appendix B: The 1971 IOPC Fund - Administrative Council and Assembly
Sessions ...... 69
Appendix C: The 1992 IOPC Fund - Executive Committee and Assembly Sessions ...... 73
Appendix D: Changes Introduced by the 1992 Protocols ...... 83
Appendix E: Contracting States to both the 1992 Protocol to the Civil Liaibility Convention and the 1992 Protocol to the IOPC Fund Convention as at
December 3, 2003 ...... 85
Abbreviations of Proper Names used in this Report
ABS American Bureau of Shipping ALERT Atlantic Emergency Response Team AMOP Arctic Marine Oil spill Program CCG Canadian Cost Guard CEDRE Centre of Documentation, Research and Experimentation on Accidental Water Pollution CEPA Canadian Environmental Protection Act CLC Civil Liability Convention CMAC Canadian Marine Advisory Council CMr Comite Maritime Law International CMLA Canadian Maritime Law Association COPE Compensation for Oil Pollution in European Waters CPA Canada Port Authority CSA Canadian Shipp ing Act cso Combined Sewer Outfalls cws Canadian Wildlife Service DFO Department ofFi heries and Oceans DNV Det orske Veritas DWT Deadweight Tonnage EC European Commission ECA REG Eastem Canada Vessel Traffic Service Regulations ECRC Eastern Canada Response Corporation EEZ Exclusive Economic Zone ER Emergency Respon e EPA Environmental Protection Agency EU European Union FTPSO Floating Production, torage and Offl oading Unit FSU Floating torage Unit GT Gro Tonnage HNS Hazardou and oxiou Sub tance reo s Intemational Commi ion on hipping res Intemational Chamber of Shipping rMO Intemational Maritime Organization IOPC Intemational Oil Pollution Compen ation Fund ISM rntemational afety Management Code ITOPF Intemational Tanker Owner Pollution Federation LLMC Limitation of Liability fo r Maritime Claim LOU Letter of Undertaking MARPOL Marine Pollution MCTS Marine Communication Traffic Services MEPC Marine Environment Protection Committee MLA Ma rine Liability Act MOU Memorandum ofUnderstanding MPC.F Maritime Pollution Claims Fund MSC Maritime Safety Committee MT Motor Tanker MV Motor Vessel NASP National Aerial Surveillance Program OAA National Oceanic and Atmosphere Administration NRDA Natural Resource Damage Assessment NTCL Northem Transp01iation Company Limited OBO Ore/Bulk/Oil OCIMF Oil Companies Intemational Marine Forum OPA Oil Pollution Act OPA 90 Oil Pollution Act 1990 (US) OSRL Oil Spill Response Ltd P&l Club Protection and Indemnity (Marine In urance) As ociation PPM Part per Million PTMS Point Tupper Marine Service Limited REET Regional Environmental Emergency Team RINA The Italian Classification Society RO Respon e Organization SAR Search and Re cue SDR pecial Drawing Right * SITREP Situation Report SIMEC Societe d'Intervention Maritime, E t du Canada SO LAS InternationalConven tion fo r the afety of Life at Sea SOPF hip- ource Oil Pollution Fund TC Tran port Canada TCMS Tran port anada Maine aflty TSB Tran portation afety Board UK United Kingdom us United tate USCG United tate Coa t Guard VPA Vancou er Port uthority VPC Vancou er Port orporation WCMRC We tern Canada Marine Re pon e Corporation
* The value of the DR at April !, 2004, wa approximately 1.948 12. Thi actual value is reflected in Figure 1 in Appendix D. El ewhere in the report, fo r convenience, calculation are ba ed on the SDR ha ing a nominal value of 2.
. t Ship-source Oil Pollution Fund
Administrator's Communique
Canada has shown considerable fo resight over the years in fa shioning a unique well-functioning domestic compensation regime.
I am pleased to report that the Ship-source Oil Pollution Fund (SOPF) grew to some $ 330.7 million in March 31, 2004 from some $ 280.5 million on March 31, 1999. This was achieved after paying out of the Fund all operating costs and expenses, all private and Govemment claims for Canadian incidents and all Canadian contributions to the International Fund.
The Canadian Compensation Regime
Canada's national Fund, the SOPF, is liable to pay claims fo r oil pollution damage or anticipated damage at any place in Canada, or in Canadian waters including the exclusive economic zone, caused by the discharge of oil from a ship.
In addition, Canada is a Contracting State in an international compensation reg1me that mutualize the risk of pollution (per istent oil) from sea-going tanker .
The SOPF i intended to pay claim regarding oil pill from hips of all classes - it is not limited to sea-going tanker .
The type of oil covered by the SOPF is also greater than under the International Civil Liability and Fund Convention . It i not limited to per i tent oil and includes petroleum, fuel oil, sludge, oil refu e and oil mixed with wa te .
The SOPF is at o available to provide additional compen ation (a third layer) in the event that compen ation under the 1992 Civil Liability Convention (CLC) and the 1992 IOPC Fund Convention, with re pect to pi ll in Canada from oil tankers, is insufficient to meet all e tabli bed claim fo r compen ation. (See Figure l, Appendix D.)
During the fiscal year commencing April 1, 2004, the maxtmum liability of the SOPF IS approximately 144 million fo r all claim from one oil pill.
The classes of claims fo r which the SOPF may be liable include the fo llowing:
• Claims fo r oil pollution damage;
• Claims fo r co t and expen e of oil pill clean-up, preventive mea ures and monitoring; and
• Claims fo r oil pollution damage and clean-up co t where the cause of the oil pollution damage is unknown and the Administrator of the SOPF ha been unable to establish that the occurrence that gave ri e to the damage was not caused by a hip.
A widely defined class of per ons in the Canadian fishing industry may claim fo r loss of income caused by an oil spill from a ship.
The Administrator's Annual Report 2003-2004 hip-source Oil Pollution Fund
The current tatutory claim regime, on the principle that the polluter pays ( ubject to limitation of liability) ha a it "four cornerstones":
1. All co ts and expen e must be reasonable; 2. All clean-up measure taken mu t be rea onable measure ; 3. All cost and expen e must have been actually incuiTed; 4. All claim mu t be investigated and a e ed by an independent authority (the Admini trator).
The Rule of Law
The Admini trator mu t act in accordance with the law governing the operation of the SOPF - not arbitrarily nor in deference to externalpol icie contrary to Canadian Law.
The Admini trator i the Canadian official who direct payment of dome tic claim and authorize payment of anadian contribution to the International Fund from the OPF.
The Admini trator i wholly accountable to Parliament fo r all payment out of the OPF.
A Successful Year
Thi Annual Report e idence a bu y ignificant and ucce fulyear.
During the current year we handled 57 acti e incident file . Particularly, I 5 Canadian claim totaling orne 3.4 million were ettled fo r orne 2.7milli on plu intere t ( ection 3).
The SOPF continue to pay con iderable contribution to the International Fund: 4. million thi year, and a total of ome 3 .2 million ince 19 9.
With the 50 percent ri e in compen ation le el effi cti o mber 2003 the potential liability of the SOPF to the International Fund ba increa ed ignificantly ( ee Figure 1, ppendix D).
Derelict Vessels
The Pender Lady pollution incident, at ection 3.27 herein, al o rai e the pectre of enous personal injury and loss of life cau ed by the capsizing or inking of uch ve el .
Derelict vessels come to our attention at various place , e pecially on the we t coast of Canada.
From the Administrator's view, while there are mandated obligations on govemment to ensure the safety of ves els and the people in them, it is essential that these rules and regulations be strictly applied in all cases to preclude unnecessary dangers to both the environment and persons.
The Adminish·ator's Annual Report 2003-2004 11 Ship-source Oil Pollution Fund
We are advised that the CCG and Transport Canada, as a first step, have initiated the development of a formalized "standard operating procedure" (SOP) fo r incidents involving derelict vessels.
Environmental Loss
Environmental damage law in Canada is developing.
On May 6, 2004, the Canadian Minister of Environment tabled new legislation (Bill C-34) to amend the Migratory Birds Convention Act (1994) and the Canadian Environmental Protection Act (1999).
In June, 2004, the Supreme Court of Canada issued a decision on natural resource damage evaluation which touched on the notion of compensation fo r non-pecuniary loss (sections 4 and 5 have more on this topic) in the matter of British Columbia v Canadian Forest Products Ltd., 2004
SCC 38, file number 29266. The link following provides access to this deci 1011: http://wwvv.lexum.umonh·eal.ca/csc-scc/en/rec/hhnV2004scc038.wpd.hhnl
Illegal Discharge of Oily Waste at Sea
Section 4-Challenge and Opportunities - starts off with Bill C-34 introduced in Parliament on May 6, 2004. Some legal expert ay that Canadian law and practice may profoundly change if and when the bill pa se , particularly relating to pollution from a ship in tran it in Canada's exclu ive economic zone.
Outreach
We continue to deepen our understanding of the per pective of variou stakeholders m the Canadian regime, national and international. ome insight are highlighted in ection 5.
Our Thanks
We acknowledge the a i tance recei ed from per on in both the private and public sector as well as the International Fund. We are particularly pleased with the cooperation of Canadian shipowner , the oil indu try, and the Canadian Maritime Law Association.
In closing, we are grateful fo r the upport received, the challenges, successe and also the problems experienced this year which had to be addre sed
We welcome any sugge tion on how we can improve SOPF ervtces.
The Administrator's Annual Report 2003-2004 m hip- ource Oil Pollution Fund
The Administrator's Annual Report 2003-2004 1v Ship-source Oil Pollution Fund
Summary
This annual report covers the fi scal year ended March 31, 2004. It describes Canada's domestic compensation regime. First, Canada's national Fund, the SOPF, covers ships of all classes, as well as persistent and non-persistent oil and mystery spills. In addition, Canada is a Contracting State in an international compensation regime that mutualizes the risk of pollution (persistent oil) from sea-going tankers.
The financial status of the SOPF is reported, including claim settlements in Canada and the amount of payments by the SOPF to the international Funds. Dming the year, Canadian claims totaling approximately 3,378,395.26 before interest were settled and paid in the aggregate amount of 2,693,40 1.01 plus interest of 89,149.58. In addition, various outstanding claims made by the CCG since April 2000 for administrative costs, refened to in section 4.9 of the Admini trator 's 2002-2003 Annual Report, were settled and paid in the aggregate amount of 5,370.81. The Admini trator recovered, from third parties liable, approximately $ 86,53 1.82 respecting payments made out of the SOPF to some claimants. This year the Administrator paid the amount of $ 4,836,1 08.49 out of the SOPF to the 1992 IOPC Fund for incidents outside of Canada. As at March 31, 2004, the balance in the SOPF was $ 330,734,143.74.
The SOPF is liable to pay claims fo r oil pollution damage or anticipated damage at any place in Canada, or in Canadian waters including the exclusive economic zone of Canada, cau ed by the discharge of oil from a hip. Commencing April 1, 2004, the maximum liability of the SOPF for all claims from one oil pill i 143,599,686.20.
Dming the new fiscal year, the Minister of Transport has the tatutory power to impo e a levy fo r the SOPF of 43.06 cent per metric tonne of "contributing oil" imported into or hipped from a place in Canada in bulk a cargo on a hip. The levy is indexed to the con umer price index annually. o uch levy (MPCF/SOPF) ha been impo ed ince 1976.
Since 1989, the international IOPC Fund have received approximately 38.2 million out of the SOPF. Canada i currently a Contracting tate to the 1992 international oil pollution compensation regime. A uch, our national Fund, the OPF, continue to have potential ignificant future liabilitie to the IOPC Fund fo r fo reign incident .
Thi report outline the tatus of oil pollution incident brought to the attention of the Administrator. The incident ection indicate claim that have been ettled, including claims that are in various tage of advancement. The cutTent tatus of recovery actions by the Administrator again t hipowner i al o noted in the incident ection.
During the fi scal year, the Admini trator responded to all enqumes about compensation entitlement and investigated all claim resulting from oil pollution. The length of time taken to process the re pective claim regarding identified ships depended on the completenes of the supporting documentation.
The Administrator continues his outreach initiatives by actively participating in conferences, seminar and workshops. He met with management personnel in federal departments, government agencie , and organizations of the marine industry.
The Administrator's Annual Report 2003-2004 v hip- ource Oil Pollution Fund
The e outreach initiative included:
• Attending meeting with senior repre entative of Fi herie and Ocean and nvironment Canada.
• ttending e ion of the Canadian Marine Ad vi ory ouncil' national conference held in Ottawa. • Attending the Canadian Marine dvi ory ouncil ( orthern CMAC) held in Quebec, Quebec. • Vi iting the facilitie of the ECRC Re pon e Organization in t. John's, ewfoundland .
• Participating in the Atlantic Regional Environmental Emergency Team meeting held m Halifax, ova Scotia. • Participating in an oil pill wa te management work hop ho ted by the ewfoundland and Labrador Environmental Indu try A ociation held in t. John' ewfoundland. • Participating in the Regional Ad i ory Council on Oil pill Re pon e held in St. John' ewfoundland. • Vi iting the Canadian oa t Guard ' n ironment re pon e equipment facility in t. John' , ewfoundland. • Participating at the econd ympo ium of Emergency Re pon e in the arine En ironment in Quebec, Quebec. • Attending a pecial con ultati meeting of the IMO Legal ommittee Hazardou and oxtou ub tance orre pondence Group held in Ottawa. • Attending an International Oil pill onfir nc held in ancou r, Briti h olumbia . • Participating in the Tran port anada atl ty our e in Otta\ a. (The dmini trator made a pre entation on th civil liability r quirement fo r the OPF).
• Attending the Canadian Maritime Law ociation e uti e committ e meeting in Ottawa.
• Attending a onference on re ent de elopm nt in relation to marine oil poll ution ho ted by the Faculty ofLaw, McGill Uni er ity, ontreal.
• Participating in the International M RE-D onference ho ted by the aritime In titute and Faculty of Law at Ghent Uni er ity, Belgium.
The central theme of ection 4 - I ue and hallenge - i the protection of the marine environment. Thi ection highlight propo ed change to the anadian marine pollution law .
On May 6, 2004, the governmentintroduced legi lation (Bill C-34) to amend th MigratOJ) Birds Convention Act, 1994, and the Canadian Environmental Protection Act, 1999. The e amendment would expand the application of both of the e Act and facilitate their a ailability to upport prosecutions in addition to, and perhap in lieu of, the more traditional Canada Shipp ing Act regime. The amendment introduced by Bill C-34 are ummarized in ection 4. When the proposed amendment are made to the Migratory Birds Convention Act, 1994, the Act will contain, inter alia, a prohibition again t any hip, or per on, di charging any ub tance harmful to migratory bird in waters frequented by migratory birds. Maximum fine on conviction will be increased to $300,000 on summary conviction or $1 million on indictment.
The Administrator's Annual Report 2003-2004 v1 Ship-source Oil Pollution Fund
Hansard (May 7, 2004) records that when the Honourable David Anderson, Minister of the Environment, tabled Bill C-34 he made the fo llowing observation during his speech to the House of Commons:
"There are probably none among us here who do not remember the Exxon Valdez disaster in the northeast Pacific and the horrifyingpict ures of dead fish, birds , seals and other marine life that had no chance against this thick oil on top of the water.
"What many here may not know is that more marine birds are killed every year by the oil discharged from ships on our east and west coasts than were killed by the entire Exxon Valdez disaster. These seabirds are killed by the chronic oil pollution in the ocean that comes fr om the discharge of oily waste from the bilges or ballast tanks of ships. And no, these ships are not supposed to dump this waste into the oceans. It is already against the law. But they do it and the impact is huge ".
ate: As a result of the di olution of Parliament on May 23, 2004, the proposed legislation "died on the order paper". It is expected that Bill-34 will be re-introduced in the next session of Pari iament.
Included in the text of this report are update on variou i sues surrounding the illegal discharge at ea of ship-generated oily waste. The que tion of marine waste- reception facilities in Canadian port i also addres ed. The Administrator clo ely fo llow the progress on these issues, because of the problem of my tery oil spills and the resulting chronic problem of oiled seabirds, particularly in ea ternCanada.
The ongoing work by Environment Canada officials to e tablish a national framework for implementing an environmental damage a e ment protocol is highlighted. Since Treasury Board approved the Environmental Damage Fund, per onnel in Environment Canada have organized and ho ted eminar and work hop to develop a nationally con istent approach to handle environmental issue .
The report al o outlines how compensation fo r environmental damages is handled diffe rently under the MLA, the 1992 CLC, the 1992 IOPC Fund Convention, and the US OPA 90.
Change to the 1992 international compen ation regime and the impact on the SOPF are explained. On ovember 1, 2003, the 1992 IOPC regime increa ed its liability and compensation limitation amount by 50.37 per cent fo r each oil tanker pill incident. Currently, under the 1992 Civil Liability and the 1992 IOPC Fund Conventions there is approximately $395 million of coverage. Con equently, in Canada, the aggregate amount of fu nd available to cover an oil tanker spill i now approximately 539 million, including the SOPF.
There is a report on the "optional" third tier of compensation now available to 1992 IOPC Fund Contracting State - which wa adopted in May 2003. From the Canadian perspective the "optional" third tier rai e particular issues and challenge . Some ay there is no demonstrable need in Canada for compen ation levels beyond the current 1992 IOPC regime limits already available with the recent increases effective ovember 1, 2003. Currently all required contributions to IOPC Funds, respecting qualified oil receipt in Canada by Canadian companies, are paid from Canada's national Fund, the SOPF - an account in the accounts of Canada. It is noted that whether or not Canada becomes a Contracting State to thi "optional" third tier - in addition to being a 1992 IOPC Fund Contracting State - i fo r Cabinet to decide. We are advised
The Administrator's Annual Report 2003-2004 v11 hip- ource Oil Pollution Fund that prior to any uch propo al going to abinet there would be broad con ultations with the public and private ector , particularly anadian marine intere t .
During the year the Admini trator, a a member of the anadian delegation, attended and r ported on the xecutive ommittee and the A embly e ion of the international Funds held at IMO headquarter in London. Excerpt from hi report on the e proceeding are contained in ppendice B and C.
The Administrator's A1mual Report 2003-2004 vm Ship-source Oil Pollution Fund
1. Responsibilities and Duties of the Administrator
The Administrator, appointed by the Governor-in-Council:
• Holds office dming good behaviour and, as an independent authority, must investigate and assess all claims filed against the Ship-source Oil Pollution Fund (SOPF), subject to appeal to the Federal Comt of Canada;
• Offers compensation to claimants fo r whatever portion of the claim the Administrator finds to be established and, where a claimant accepts an offer, the Administrator directs payment to the claimant out of the SOPF;
• Prepares an annual report on the operations of the SOPF, which is laid before Parliament by the Minister of Transport;
• Has the powers of a Commissioner under Part 1 of the Inquiries Act;
• May take recourse action against third parties to recover the amount paid from the SOPF to a claimant and may al o take action to obtain security, either prior to or after receiving a claim;
• Become a party by tatute to any proceedings commenced by a claimant against the owner of a hip, its in urer, or the International Oil Pollution Compen ation (IOPC) Fund , a the case may be;
• Ha the re pon ibility under the Ma rine Liability Act {MLA) to direct payment out of the SOPF for all Canadian Contribution to the IOPC Funds ( uch contribution are based on oil receipt in Canada reported by the Administrator to the Director of the IOPC Funds); and
• Participate in the Canadian Interdepartmental Committee and joins the Canadian delegation to meeting of the Executive Committee and the A embly of the IOPC Funds.
The Administrator's Annual Report 2003-2004 1 hip- ource Oil Pollution Fund
The Administrator's Annual Report 2003-2004 2 Ship-source Oil Pollution Fund
2. The Canadian Compensation Regime
The SOPF came into force on April 24, 1989, by amendments to the CSA. The SOPF succeeded the Maritime Pollution Claims Fund (MPCF), which had existed since 1973. In 1989, the accumulated amount of$149,61 8,850.24 in the MPCF was h·ansferred to the SOPF.
Effective August 8, 2001, the SOPF is governed by Part 6 of the Marine Liability Act (MLA) Statutes of Canada, 2001, chapter 6.
The SOPF is a special account established in the accounts of Canada upon which interest is presently credited monthly by the Minister of Finance.
A levy of 15 cents per tonne was imposed form February 15, 1972, until September 1, 1976, during that period a total of $34,866,459.88 was collected and credited to the MPCF from 65 contributors. Payers into the MPCF included oil companies, power generating authorities, pulp and paper manufacturers, chemical plants and other heavy industries.
During the fiscal year commencing April 1, 2004, the Minister of Transport has the statutory power to impose a levy of 43.06 cents per metric tonne of "contributing oil" imported into or hipped from a place in Canada in bulk a cargo on a hip. The levy i indexed annually to the consumer price index.
o levy has been impo ed ince 1976.
The SOPF is liable to pay claim fo r oil pollution damage or anticipated damage at any place in Canada, or in Canadian water including the exclu ive economic zone of Canada, caused by the di charge of oil from a hip.
The SOPF i intended to pay claim regarding oil pill from all classes of ships. The SOPF is not limited to ea-going tanker or per i tent oil a i the 1992 IOPC Fund.
The SOPF is al o intended to be available to provide additional compen ation (a third layer) in the event that funds under the 1992 Civil Liability Convention (CLC) and the 1992 IOPC Fund Convention, with re pect to spill in Canada from oil tankers, are in ufficient to meet all e tabli hed claim for com pen ation (See Figure 1, Appendix D).
During the fi cal year commencing April 1, 2004, the maximum liability of the SOPF IS 143,599,686.20 fo r all claim from one oil pill. Thi amount i indexed annually.
The classe of claims for which the SOPF may be liable include the following:
• Claims for oil pollution damage;
• Claims for costs and expense of oil spill clean-up including the cost of preventative measure ; and
• Claims for oil pollution damage and clean-up co ts where the identity of the ship that caused the discharge cannot be established (mystery spills).
A widely defined class of persons in the Canadian fi hing industry may claim for loss of income caused by an oil spill from a hip.
The Administrator's Annual Report 2003-2004 3 hip-source Oil Pollution Fund
The pre ent tatutory claim regime of Part 6 of the MLA, on the principle that the polluter hould pay, ha a it corner tone :
• All co t and expen e must be rea onable;
• All clean-up measure taken mu t be rea onable mea ure ; and • All co t and expen e mu t have actually been incurred .
SOPF: A Fund of Last Resort
The MLA make the hipowner trictly liable fo r oil pollution damage cau ed by hi hip, and fo r co t and expen e incurred by the Mini ter of Fi herie and Ocean and any other per on in Canada fo r clean-up and preventive mea ure .
A provid d in the ML A, in the fir t in tance, a claimant can take action again t a hipowner. The Admini trator of th OPF i a party by tatute to any litigation in the Canadian courts commenced by a claimant again t a hipowner, it guarantor, or the 1992 IOPC Fund. In uch event, the extent of the OPF' liability a a Ia t re ort i tipulated in ection 4 MLA .
The Admini trator al o ha the power and authority to participate in any ettlement of uch litigation, and may make payment out of the OPF a may be required by the terrn of the ettlement.
A re pon e organization (RO) a defin d in the CSA ha no dir ct claim again t the OPF, but it can a ert a claim fo r un ati fi d co t and expen e aft r e hau ting it right of reco ery again t
the hipown r.
SOPF: A Fund of First Resort
The OPF can al o b a fund of fir t r ort fo r claimant , including the rown.
provided in ection 5 ML A, any per on rna filea !aim ,. ith the dmini trator of the OPF re pecting oil pollution lo or damage or co t and xpen e , with one exception. An RO, e tabli bed under the C 'A,ha no direct !aim again t the OPF.
The Admini trator, a an independent authority, ha a duty to in e tigate and a e claim filed against the OPF. For the e purpo e , he ha the power to ummon witne e and obtain document .
The Admini trator may either make an offer of compen ation or decline the claim. An un ati fied claimant may appeal the Admini trator' deci ion to the Federal Court of Canada within 60 day .
When the Admini trator pays a claim, he i ubrogated to the right of the claimant and is obligated to take all reasonable measures to recover the amount of compen ation paid to claimants from the shipowner or any other person liable. As a consequence, the Administrator is
empowered to commence an action in rem against the hip (or against the proceed of sale, if the ship has been sold) to obtain ecurity to protect the SOPF in the event that no other ecurity is provided. The Administrator is entitled to obtain security either prior to or afterre ceiving a claim,
The Administrator's Atmual Report 2003-2004 4 Ship-source Oil Pollution Fund but the action can only be continued after the Administrator has paid claims and has become subrogated to the rights of the claimant.
A indicated above, the Administrator has a duty to take reasonable measures to recover from the owner of the ship, the IOPC Fund, or any other person, the compensation paid to claimants from the SOPF. This includes the right to prove a claim against the Shipowner's Limitations Fund set up under the 1992 CLC.
The Administrator's Annual Report 2003-2004 5 /I\ / . ':I \.
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CANADA Ship-source Oil Pollution Fund
3. Canadian Oil Spill Incidents
During any particular year the SOPF receives many reports of oil pollution incidents from a variety of sources, including individuals who wish to be advised if they are entitled under the CSA/MLA, to be considered as potential claimants as a result of oil pollution damage they have suffered. Many of the incidents have not yet, or will not be, the subject of a claim. Such incidents are not investigated by the Administrator. The inf01mation herein is that provided to him. The Administrator is aware that many more oil pollution incidents are reported nationally. Many of those reported are very minor (sheens). Other involved greater quantities of oil but are not brought to the attention of the Administrator because they were satisfactorily dealt with at the local level, including acceptance of financial responsibility by the polluter.
During the cunent year, the SOPF handled 57 active incident fi les. Of these, 47 are reported on in this section because they involved either claims to the SOPF or were of specific interest because of the circum tances sunounding them.
Location of incident are indicated on map oppo ite.
3.1 Haralambos (1996)
On February 27, 1997, the Administrator on ovember 19 and ovember 25, 1996, received a claim from the Crown to recover the re pectively. These spills had involved the CCG co t and expen e , tated to amount to 63,078 gro ton Cypriot flag bulk carrier 73,483.00, incurred in the clean-up of oil Haralambos. The hip had come into the fo und on the beaches of the lower t. harbour on ovember 18, and the next day Lawrence River, outh-we t of Port Cartier, there wa an oil pill. The ship had then gone Quebec. The claim wa pre ented a a my tery out to anchor off Port Cartier awaiting cargo, spill. and had come back in again on ovember 25, when the econd pill of oil occuLTed. It wa The oil had been found coming a hore on the fo und that one of the top ide water balla t beache on December 3, 1996, by re idents of tank had a COLTO ion hole through to a fuel the mall community of Riviere Pentecote, tank, which accounted for the loss of oil. The who informed the authorities. Official arrived hipowner undertook to pay for the cost of the and confirmed the pollution. Contractor were clean-up within the harbour. On ovember engaged and commenced work on December 30, 1996, the Haralambos ailed for Iran. 5, 1996; the task was completed to the satisfaction of the authorities on December 9, In the course of his inve tigation, the TCMS 1996. It is reported that 103 bane Is of oi I and urveyor took oil samples, and al o compared oily material were collected fo r di po al. the re ult with the analysis of the oil sub equently fo und on the beaches at Riviere The Administrator inve tigated the Pentecote. It wa fo und that oil from the circum tances of the oil and fo und that TCMS harbour matched the oil from the beaches. had thoroughly inve tigated two oil spills Accordingly, on December 4, 1997, the within Port Cartier Harbour that had occuned Administrator fo rwarded the claim to
The Administrator's Annual Report 2003-2004 7 hip-source Oil Pollution Fund repre entatives of the hip' P&l Club m fu rther 7,396.09, plu interest of $1,61 1.41. anada fo r direct payment to the rown. On the question of taxe , these had been incorrectly calculated in the Crown' original On May 22, 199 , coun e1 fo r the P&I Club claim and the Administrator agreed to consider replied to the Admini trator denying liability this fi nal outstanding amount on being of the M V. Haralambos fo r the claim, tating pre ented with the correct calculation. The that without more concrete evidence, they Crown having ubmitted correct tax cannot recommend that the ship accept calculation to the amount of 3,374.70, the re pon ibility fo r this pollution. Admini trator on May 9, 2000 directed the payment of thi amount to the Crown plus On ovember 17, 1998, the Administrator intere t of 773.05. authorized an interim payment to the Crown of 75 per cent of it claim, amounting to Repre entative of the ship-owner have raised 55,1 1 2.25, plu intere t of $6,874.94. The que tion regarding the mo t recent oil Admini trator continued hi inve tigation to analy i and the trajectory tudy re ult . obtain furtherevi dence regarding the claim. However, they did agree to an exten ion of time fo r commencing a court action. A fu rther analy i of oil ample wa made, D i cu ion continue between the thi time a direct compari on of a sample taken Admini trator, coun el fo r the partie , and from the beach at Riviere Pentecote with principal repre enting the hip-owner, in the ample from the Haralambos ' contaminated hope of concluding thi oil pollution wing tank. Dated February 23, 1999, the compen ation reco ety claim. analysi concluded that the e ample were "very imilar". To fu rther a e the The Haralambo returned to Canada in May probability of the Haralambo , while off Port 2000. The Admini trator obtained a Letter of Cartier, being the origin of the oil a hind ca t Undertaking (LOU) fo r 125,000.00. trajectory tudy wa carried out on behalf of the SOPF by the In titut Maurice-Lamontagne ub equently, the dmini trator commenced of Mont-Joli, Quebec. Dated Augu t 23, 1999, an action again t the hip in the Federal Court, in summary the hind ca t report fo und: to which a defen e wa filed.
• that if a hip off Port artier relea ed In the meantime, on o ember 3, 2000, it wa oil on ovember 19, 1996, the oil reported that the Haralambos had been would have pa ed out into the Gulf; purcha ed by Chine e principal fo r breaking • on the other hand, if a hip off Port up. Cartier relea ed oil on ovember 25, 1996, the condition were uch that oil On December 19, 2001, the dmini trator was could have traveled to the general area required to attend an Examination for of the beache involved in the incident. Di covery by the defendant' cotm el.
An agreement on quantum had been reached Offe r and counter-offe r have been made with the Crown, which reduced their claim by between coun el fo r both parties, but by year $1,975.89. On March 28, 2000, the end, an out of-court settlement had not yet Administrator arranged to pay the outstanding been achieved and the Administrator in tructed balance of the Crown's claim, less taxes, a his counsel to proceed to trial.
The Administrator's Annual Report 2003-2004 8 Ship-source Oil Pollution Fund
3.2 Gordon C. Leitch (1999)
The Gordon C. Leitch is a 19,160 gross ton A pretrial teleconference between the Canadian Great Lake vessel and, on March 23, various parties and Mr. Justice Hugesson 1999, she was berthed at an iron ore facility in was held on October 15, 2003 at which Havre-Saint-Pierre, Quebec, on the lower north future actions and target dates were set. shore of the St. Lawrence River. When moving the vessel she was caught by the strong wind A further teleconference was held on and hit a dolphin, cracking the hull and November 27, 2003 at which deadlines were releasing an estimated 49 tonnes of heavy fuel set for the production of written oil. The owners directed the clean up with representations with a hearing to be held on conh·actors, under CCG guidance and making January 14, 2004. use of CCG material and equipment. This hearing took place as scheduled before The CCG reported that their costs and Mr. Justice Hugesson who made it clear that expenses of 233,065.00 were paid by the liability of the SOPF under Section 84 of the owners. Armed with thi knowledge of MLA, could not be contemplated now because settlement the Administrator's Annual Report the conditions precedent had not yet been (2000 - 2001) noted that he had clo ed hi case atisfied. He also indicated that a claim under file on the incident. Section 88 could exi t against the SOPF, but even there, the claim would be proscribed On March 22, 2002, counsel for the Conseil ince no claim was fi led within the three years des Innus de Ekuanitshit et tou les membres from the mishap. de la Band Indienne de Ekuansitshit, filed an action in the Federal Court of Canada again t It is under tood that settlement negotiation the owners of the Gordon C Leitch, and other between the plaintiff and the shipowner are and the IOPC Fund. The action claimed the continuing at year-end. um of 539,558.72 for tated damages fo r the local Indian Band due to the Gordon C Leitch incident.
The IOPC Fund ha been removed a a defendant in the action and the OPF i now a party by tatute to the action.
3.3 Sam Won Ho (1999)
This ve el was originally a South Korean CCG advi ed that the claim had been revised freezer fi shing trawler and had been old to to 96,856.92 . new owners and berthed in Long Harbour, ewfoundland, where he was being converted The claim was investigated by the to a barge. Admini trator to verify the establi hed and non-establi hed items. An all-inclusive offe r of On April 12, 1999, the ve el sank at its berth settlement wa made in the amount of with resulting oil pollution. The CCG $80,000.00, which wa accepted by the CCG. responded to the spill and incurred stated cost Payment was directed on March 3, 2000. and expenses in the amount of 99,878.55, which amount was claimed from the SOPF on December 29, 1999. On March 2, 2000, the
The Administrator's Annual Report 2003-2004 9 hip-source Oil Pollution Fund
The Admini trator con idering what The Admini trator arranged fo r the OPF to rea onable option exi t regarding co t have an ob erver at the trial fo r the alleged recovery of the monie paid. infringement of the Fi heries Act. The trial tarted on Augu t 23, 200 l, and continued at ft hould be noted that this vessel wa involved various date , the late t being held on March in a previou pollution incident at Long 18, 2004 at which clo ing arguments by the Harbour in July 1997, which re ulted in a Crown and Defen e were heard. With these claim to the OPF, reported in the 1997-98 concluded, Mr. Justice William re erved nnual Report under the name of Sin Wan Ho . judgment until June 4, 2004 at which time he will give a written deci ion in the matter. It appear that two individuals were a ociated with owner hip of the craft, together with a The Admini trator intend to continue limited company. All three partie have denied fo llowing the pro ecution. Coun el for the liability. On January 5, 2001, EC had laid OPF filed a tatement of Claim in the Federal charge again t all three parties involving the Court of Canada on April 8, 2002, again t the relea e of oil pollution, connected with thi three partie claiming the recovery of incident, pur uant to ection 36(3) of the 117 384.47 plu intere t. The OPF ffida it Federal Fi herie Act. of Document wa wornon October 31, 2002.
There wa further pollution from thi wreck on At year end the dmini trator await the April 24, 2000 and a claim from the rown on outcome of the abo e qua i-criminal trial and behalf of the G in the amount of 45, 09. 19 the determination of owner hip there o that he wa recei ed on Decemb r 6, 2000. Thi claim may proceed with hi ci it action for co t was a e ed and the e tabli hed amount of reco ery. 36,084.47 plu intere t of 2,343.53 wa paid on February 7, 200 I.
3.4 Mystery Oil Spill - Port Cartier, Quebec (2000)
The CCG i ued a itrep ad i ing that oil exp n e of the clean up. It wa tated that pollution wa fo und in the water between the T M al o required a LO from the hip to Greek flag 81,120 gro ton bulk carrier co er any po ible fi ne. The Anangel Anangel Sp lendour, and the quay, along ide at Sp lendour denied that he wa the origin ofthe Port Cartier, Quebec, on May 12, 2000, and oil and ailed on Ma 15, 2000. extending ome 200 meter ahead. There were two other ve el mo ement within the On January 31, 200 l, the dm ini trator harbour over a imilar period a the di covery recei d a claim from the Crown on behalf of of the oil pill. the CCG to recover their co t and expen e , tated to amount to 4,076.0 . The claim was Port Cartier i a private harbour of the being a e ed, howe er, an offer of ettlement Compagnie miniere Quebec Cartier (CMQC). wa withheld pending re ult of the The port authorities took charge of the clean inve tigation into the origin of the pill. up, in the pre ence of the CCG. The TCMS took oil samples. The oil resembled fuel oil In the meantime, coun el fo r CMQC ubmitted and the quantity spilled was estimated at a claim on behalf of that port company, approximately 900 liters. amounting to 249,137.3 1, tated to have been incurred by them cleaning-up the oil pollution CMQC obtained a LOU from counsel fo r the in this incident. The claim was received by the Anangel Sp lendour to cover the costs and Administrator on April 30, 2001. On July 27,
The Administrator's Annual Report 2003-2004 10 Ship-source Oil Pollution Fund
2001, a further claim was received from Following a lengthy investigation by the counsel for CMQC amounting to an additional SOPF, CCG, TCMS and Environment Quebec, $10,878.08, stated to be for the recovery of the Administrator was not satisfied that the their legal fees in connection with this occunence was not caused by a ship. incident. These legal expenses were rejected. Accordingly, settlements were made with The Administrator wrote to CMQC's counsel CMQC in the amount of $242,427.45 together on November 28, 2001, with a list of questions with interest of $42,335.13 and CCG in the which had arisen in his investigation and amount of $3,776.05 together with interest of assessment of the claims. Replies to these $638.82. Both payments were made. questions were received on March 22, 2002, and at the same time conected a stated enor in Following further analysis of the oil samples one of the invoices submitted in the claim, the Administrator i proceeding with a cost increasing the claim by a further $1,746.63. recovery action against the ship-owner. A Statement of Claim has been prepared and the A key issue in thi case was whether or not the ship-owner's lawyer has advised that he is oil came from a shore-based operation. It was authorized to accept service. reported that over a similar time frame to the incident, Environment Quebec wa The Administrator awaits further investigating a source of contamination developments. coming from ashore in Port Cartier.
3.5 Skaubryn (2000)
The SOPF received a report that there was an • advi ing that the VPA was submitting oil pill at Seaboard Terminal, orth it claim, together with that of the Vancouver, Briti h Columbia, the pill being CCG, directly to the shipowner fo und late evening ugu t 3, 2000. Two hip (Skaub1yn); were berthed at the terminal, the Skaugran and • reque ting that, in the meantime, the the Skaub1yn. Admini trator hold the VPA claim again t the OPF for this incident, in Early on Augu t 4, 2000, the VPA responded abeyance. to the pill and tasked local contractor for clean up. Later that forenoon the VPA On ugu t 2, 2001, the Administrator replied determined the pill wa ufficiently large to to VPA, agreeing to hold the claim in abeyance transfer overall re ponsibility for the clean-up but noting that he re erved all hi right . to the CCG. The TCMS, CCG and EC investigated the circum tance of the origin of The CCG Claim tatus Report dated the spill. December 3 l, 2001, noted that the Crown presented a claim totaling 87,521.98 to the The VPA ubmitted a claim to the SOPF for its hipowner on August 20, 200 l. respon e to the above incident on August 4, 2000, which was received on March 14, 2001, The shipowner's P&I Club declined to accept amounting to $13,007.72. the claim of both the VPA and CCG. Accordingly both the e entities made a claim On July 20, 2001, VPA counsel wrote to the to the SOPF as noted hereunder: Administrator: VPA: The Authority, by letter of July 17, 2002, reinstated its claim on the SOPF.
The Administrator's Annual Report 2003-2004 11 hip- ource Oil Pollution Fund
The dmini trator replied to VPA on August identify the pollution and fo r prosecution 2, 2002 advi ing that he had a e ed the claim purpo e . and offe red I 0, 09.93 plus interest a ettlement. Thi of fe r wa accepted by VPA on The co t of the e analy e , 2,335.35, wa ugu t 20, 2002 and on August 26, 2002 the included in the G claim but wa di allowed dmini trator confirmed the offer in the becau e under the MLA it wa not a direct amount of $10,809.93 plu intere t of component of the clean-up activity. I ,502. 2 fo r a total payment of 12,3 1 2.75. The VPA provided an executed Relea e and The Admini trator did however agree to pay Subrogation Agreement in favour of the thi amount eparately on the ground that dmini trator and payment was made on acce to the ample and analy i would be of eptember J 7 2002. importance in ub equent co t recovery action fo r all the monie paid out of the Fund a a CCC: A claim from C G in the amount of re ult of the incident. Payment of 2,335.35 74,525.79 wa received by the OPF on July wa therefore made to the CCG on March 7, 2, 2002. 2003.
The Admini trator wrote to CG on October tatement of claim wa fi led again t the 9, 2002 ad vi ing of hi preliminary a e ment hip-owner in July 2003, fo r reco ery of and fi nding and invited G to comment on compen ation paid, including a well claim the e prior to a fi nal offe r of ettlement being r ported at 3.12 - 3.19 in the dmini trator' made. The CG replied on October 30, 2002 nnual Report 2002 -2003. Thi wa amended with more information and again on February and r -filed on eptember 3, 2003. 21, 2003 with additional comment . tatement of Defen e on behalf of the hip- owner wa fit don ptember 4, 2003. On February 27, 2003 th Admini trator made an offe r of ettlement to the C G in the ttlem nt di u ion were then occurring amount of 55, 04.25 plu inter t which wa and on ar h 5, 2004 the hip-owner made an accepted that ame day. offer of ttlem nt in the amount of 76 03 1. 2 which wa ac ept d by the dmini trator. On March 6, 2003 the dmini trator beque dated arch 26, 2004 fo r thi amount authorized payment by lnterdepartm ntal ' a r cei ed by OPF Coun el and
ettlement otification 111 the amount of ub quently forwarded to the dmini trator. $55,804.25 plu inter t of 7,914. 2 fo r a total of 63,71 9.07. It i noted that th claim r ported at 3.17 of th 2002 -2003 nnual report, Sih er Bullit, wa During the pill re pon e oil ample were rejected a not pro en and the dmini trator taken from variou location including the ha clo ed hi fit on thi incident. hip. The e were analyzed by En ironment Canada fo r CCG and TCM to po ibly
3.6 Miles and Sea (2002)
Details of the vessel and locality will be fo und Sea was again reported to be inking and in the 200 1 -2002 Annual Report at ection pilling oil in Lion Head harbour. The CCG 3.22. On March 15, 2002, it was reported that responded, found oil coming from the sunken this vessel had been involved in another hull and contacted the owner. The owner aid incident, similar to the previous one on March he was unable to take responsibility for the 18, 2001. On March 15, 2002, the Miles and re pon e.
The Administrator's Annual Report 2003-2004 12 Ship-source Oil Pollution Fund
The CCG contracted for the containment and The Administrator wrote back to CCG. He clean up of the oil. It was estimated that the reminded CCG that although the 1993 Miles and Sea contained 15 to 25 liters of lube amendments to Part XVI of the CSA gave the oil and 3,500 liters of diesel fuel. The vessel Crown, (for the first time), the right to make a had sunk in a Small Craft Harbour, owned by claim on the SOPF as a first resort, it conferred DFO, but leased to the local municipality. The no special status on the claims filed by the DFO was concerned about the vessel Crown as compared to those from other remaining sunk in Crown property. claimants. The Crown, like all claimants must provide evidence substantiating its claims. His The CCG submitted a claim for their costs and letter made reference to paragraph 86( 1 )(b) expenses to the Adminish·ator on March 27, and ub-section 86(2) of the MLA and his 2003 in the amount of$33,1 13.06. powers under the Inquiries Act in investigating and assessing claims. On March 31, 2003 the Administrator advised the CCG that particular further documentation On October 6, 2003 CCG fo rwarded the would be required for some of the items balance of the documentation requested. claimed so that a full and proper assessment of the claim could be made. The claim was then assessed and an offer of settlement was made to CCG on October 24, Some of the requested documentation was 2003 in the amount of 30,973.67. CCG's forwarded on June 11, 2003. The acceptance of this offe r was received on Admini trator was advised that he could November 18, 2003. Payment of $30,973.67 review the entire CCG fi le at the Regional plus intere t of $2,724.40 was authorized by Office in Samia, Ontario. the Admini trator.
The dmini trator has closed his fi le.
3.7 Katsheshuk (Z002)
This wa a further eriou ca ualty reported pollution. Led by a CCG icebreaker fo r during the year 2002. The ve el wa a 2,674 a i tance through the ice, the tow commenced gro ton Canadian trawler, engaged in hrimp the ame day. Due to adverse weather fo recast fi hing. Late evening March 17, 2002, the the tug and tow heltered fi rst in Conception ve sel reported that he wa on fire and being Bay and then in Trinity Bay, ewfoundland, abandoned by the crew, ome 80 nautical mile fo r March 28 and 29, 2002. E of Belle I le, off the north coa t of ewfoundland. The ves el was in 90% ice at On March 30, 2002, it was reported that the the time. The crew wa all afely re cued. It hulk had developed a 30-degree list, which wa tated that there wa approximately wa teadily increasing. Under tow by the 430,000 liter of diesel fuel on board. Atlantic Map le the tug and tow proceeded eastward . Shortly afterwards on March 30, On March 25, 2002, legal coun el fo r the 2002, it was reported that the Katsheshuk had Crown advi ed the owners that, under CEPA unk in the Atlantic some 6 miles NNW of 1999, the hulk could not be unk either within Cape St. Francis, Newfoundland. A large oil or without the EEZ without a Canadian penn it. slick wa ob erved.
The owners contracted with tug owners to tow There was considerable concern by authorities the hulk and the tug Atlantic Map le arrived on as it was stated that, possibly, up to 10 million site on March 26, 2002. There was no sign of seabirds could be in the area over the next
The Administrator's Annual Report 2003-2004 13 hip-source Oil Pollution Fund month. There was al o concern r garding the The Admini trator ha fo llowed developments opening of the crab fi hery locally in ornetwo in the case and wa advi ed on March 24, 2004 week time and the po ible oiling of the that the hip-owner had agreed to reimbur e beacl1e u ed by caplin. the G.
The G incurred co t of 86,6 14.4 1 were The Administrator ha clo ed hi fi le. ubmitted to the hipowner on February I 0, 2003.
3.8 Mystery Spill, Hopedale, Newfoundland and Labrador (2002)
On July 9, 2002 it wa reported that 6 fi bing In a report dated Augu t 21, 2002 it wa tated v el berthed at the wharf in Hopedale had that analy i of the oil hawed it to be a experienced oil pollution that wa com111g mixture of die el and bunker fuel from the eabed . An RCMP officer inve tigated the pill and it wa reported that The Admini trator engaged local coun el and a there wa a 45 gallon drum on the bottom in marine urveyor in regard to the ongo1ng about I 0- 15 fe t of water and ome l 0- 15 fe et in e tigation a to the drum' origin. from the edge of the wharf. It appeared that th drum wa relea ing what looked like a thick In thi ca e it appear that the liability of the black oil. OPF depend on wheth r the cau e of the oil pollution damage i unknown and if the The re ponded to the incident dmini trator i unable to e tabli h that the r covered from the water occurrence that ga ri e to the damage wa content taken on Jul 13, not cau ed b a hip.
laim in the amount of _I ,69 .16 wa The dmini trator concurred that the mad by th G on July 7 2003 fo r their recov r d drum hould be tran ported in an co t and in r ponding to thi over pack drum by coa tal hip to t. John fo r incid nt. fwther in e tigation. In tigation to date indicate that ther wa a In the m antime information wa pa d to the nited tate ir Force ba e and DE Line affected fi hermen on making a claim to the tation at Hop dal from 1951 to 196 and OPF hould thi be required. archi ed photograph how oil drum both on the harbour ice to mark an aircraft runway and al o tacked on the wharf.
The dmini trator' in e tigation continu
3.9 Kung Fu (2002)
This 38 foot length pleasure craft sank at her 1500 liters of die el oil fuel on board and ome berth at the fi sherman's wharf in Le ofthi wa relea ed into the harbour. Escoumins, Quebec dming the early morning hours of July 16, 2002. The vessel had some
The Administrator's Annual Report 2003-2004 14 Ship-source Oil Pollution Fund
Later that moming, daylight, the CCG placed a $3,899.75. The CCG explained that there had containment boom around the vessel and been an error in the previous claim total engaged a contractor to clean-up the spill. because direct CCG personnel costs were inadve1tently omitted. Re-floating of the vessel and clean-up was completed by evening and the fo llowing day, The Administrator investigated and assessed July 17, 2002, the Kung Fu was towed to the claim and made an offer of settlement of Riviere-du-Loup fo r repairs. $3,899.75 plus appropriate interest.
The CCG Claim Status Report dated Acceptance of this offe r by the CCG was December 31, 2002, notes that the Crown received on November 5, 2003 and payment of presented a claim totaling 2, 782.08 to the 3,899.75 plus interest of $262.91 was ship-owner on Augu t 27, 2002. authorized that same day.
The ship-owner did not respond to the CCG The Administrator is investigating the and accordingly a claim was made to the SOPF possibility of cost recovery from the shipowner on October 1, 2003 in the amount of but has closed his incident fi !e.
3.10 Jolie Vie (2002)
Thi 34 foot cabin cruiser ran aground in Following a preliminary investigation into the Bedwell Bay, Briti h Columbia during the fa cts the Administrator, through his Vancouver early hours of ugu t 10, 2002. The fo ur coun el, attempted to have the ship-owner person on board, including two children, were meet hi obligation under the MLA and make re cued by the CCG Deep Co e lifeboat. direct payment to TCMS.
The vessel ustained underwater damage to her Thi wa un uccessful and therefore the bow and wa partially ubmerged by the tern. Admini trator made the necessary applications She had on board an unknown quantity of to the Federal Court of Canada on May 5, 2003 die el fuel. and a1Te ted the ve sel.
The owner had contracted a plea ure craft The hip-owner wa fu lly informed as to the salvage company to refloat the ve el. The proceeding and the potential implication of TCMS duty officer re ponded to the incident this action. and arranged to have the We t Coa t Re pon e Organization mobilized and rig a containment The TCMS claim was investigated and boom around the ve el. The hip-owner wa a e ed by the Administrator and an offe r of advised that he would be liable fo r the incun·ed ettlement wa made on July 9, 2003 in the costs. amount of 3,479.53. Thi wa accepted and payment of thi um and 86.37 in interest was By late afternoon, the vessel had been re authorized on July 30, 2003. floated and towed to a local marina where it wa lifted fromthe water and placed a hore. With the ves el till under arre t SOPF Coun el conducted exten ive communications Effo rts by TCMS to recover the co ts of the with the ship-owner by way of correspondence Response Organization from the ship-owner and telephone with a view to recovering the were of no avail and on February 20, 2003 the monies paid out to TCMS. Agreement was Admini trator received a claim from the reached in early September 2003 that the hip TCMS in the amount of 5,551 .22. owner would repay the amount of $2250.00 by
The Administrator's Annual Report 2003-2004 15 hip-source Oil Pollution Fund mean of monthly cheque . The fir t of these The dministrator await fu rther in the amount of 500.00 wa received and development . depo ited to the credit of the OPF on eptember 22, 2003.
No further payment have been received and the ve el i till tored a hore and under arre t.
3.1 1 Stellanova/Canadian Prospector (2002)
The Canadian Pro pector, a Great Lake bulk clean-up. The Kahnawake Fire Department carrier wa in colli ion with the Dutch flag al o re ponded. Clean-up wa effected by the Steflanova in the t. Lawr nee eaway off morning of October 13 2002 and both hip Lachine, Queb c on October 12, 2002. Both were able to proceed to port. hip uffered bow damage in the colli ion but there wa no oil pollution at the time. A Letter of ndertaking naming the OPF wa obtained to co er the incurred co t of clean Sub equently th ternof the tel/anova wung up. and came into contact with the eaway board and damaged her rudder y tem which relea ed o claim ha e been recei ed in re pect of thi hydraulic oil into the water. Th hip' crew incident and tt t und r tood that the matter deployed the hip' on-board containment wa ettled b the hip-owner. boom to minimize the pread of oil and called upon it contracted re pon e organization fo r The dmini trator ha clo ed hi fi le.
3.12 FV 1995-05 (2002)
Thi ve I wa being maneuvered off the end I in ay _003 when the of the lipway in Cartwright, ewfoundland on gone. December 11, 2002 wh n it ' a hoi d by ic and ank in 30 fe et of water. Th re wa a light o furth r r port or claim ha e been relea e of oil but it wa impo ible to rai e the r d in re pect of thi in ident. ve el becau e of the ice. orbent pad were deployed at the time and the owner wa to The dmini trator ha clo ed hi fi le.
3.13 First Lady (2002)
Thi 9 m. plea ure craft dragged it anchor the remaining water from the interior of the during a torm and ran aground in Boat el and towed it to the In titute of Ocean Harbour, outh of anaimo, Briti h Columbia Science (10 ) in idney, Briti h Columbia. on December 25, 2002. The vessel had laid An unknown quantity of die el oil remained over to one side during the tide cycle and on-board. caused it to flood and spill oil. The fo llowing day CCG arrived on scene and hired a local A Letter of Undertaking wa reque ted from contractor to pull the vessel from the shore and the owner by the CCG on December 27, 2002 re-set the anchor. The CCGC Skua pumped out with a deadline ofrespon e of January 2, 2003.
The Administrator's Annual Report 2003-2004 16 Ship-source Oil Pollution Fund
The following day an invoice was faxed to the bids were received by February 17, 2003 and owner by CCG to co er the costs and expenses the highest bidder was notified and an incuned. agreement of sale document was prepared. On February 21, 2003 the successful bidder made On December 30, 2002 the First Lady was payment, was provided a bill of sale and took seemed at lOS Port Bay, lifted from the water possession of the vessel. and stored on the travel lift. It is understood that the payment did not cover Payment had not been made by January 21, the full cost of the CCG involvement and on 2003 and a letter of "intent to sell" was sent January 7, 2004 the SOPF received a claim ia regi tered mail to the owner. This was from the CCG in the amount of $2,539. 15. returned two days later marked "moved, This was fo r the balance of their costs that had address unknown" and attempts to contact the now been recovered by the sale of the vessel. owner by telephone were unsuccessful. The Administrator investigated and assessed On January 24, 2003 CCG obtained a new the claim and on March 2, 2004 made an offe r address for the vessel owner but was advi ed of settlement to the CCG in the amount of by the Ladysmith RCMP to remain off the 2,3 16.38. This offer was increased to vessel until further notified. The following day 2,390.51 to take into account further a new "letter of intent to sell" wa ent to the repre entations by the CCG which was owner by registered mail but again without accepted. Payment of this amount together success. with interest of $83.15 was authorized on March 17, 2004. The CCG took over the ve el on February 5, 2003 pur uant to the CSA and initiated action The dmini trator has closed his fi le. to sell the ve el to recover it co t . Three
3.14 Silver Eagle (2003)
This fishingve set had broken too e from her A mechanic working on the ve el's engine mooring line on January 25, 2003 during had pumped the bilge and cau ed an oil heen severe weather and ran aground in Cum hewa in the harbour on February 6, 2003 which was Inlet, Briti h Columbia. The ve el wa lying contained by an ab orbent boom. This wa not on her ide and there wa lo of oil. The hip attended to in a correct manner and the owner wa attempting to alvage the ve el. fo llowing day the CCG Auxiliary Unit 64 The area i home to a fi h hatchery and fi h deployed a containment boom and removed pens. the ab orbent boom.
The ship-owner did not re pond appropriately. CCG effort to have the ship-owner cover the The CCG then took over the operation on respon e costs were un uccessful. January 30, 2003. A contracted salvage team arrived on ite February 1, 2003 and by the On February 17, 2003 the Administrator fo llowing day had re-floated the ve el, engaged coun el to contact the insurers to cleaned both it and the grounding area. The obtain a letter of undertaking (LOU) in fa vour ve set was towed to Queen Charlotte City on of the SOPF and the Crown. February 3, 2003 and berthed at the Small Craft Harbour. A Statement of Claim by the Crown in the amount of $103,458.84 wa filedin the Federal Court on November 27, 2003 naming the ship-
The Administrator's Annual Report 2003-2004 17 hip-source Oil Pollution Fund owner and all other interested in the hip a At year end the dmini trator await fu rther defendant . The Admini trator wa al o named development . a a Party by tatute and filed hi tatement of Defence on December 17, 2003.
3.15 Northern Light V (2003)
On February 3, 2003 it wa reported that this The ve el wa towed to Lady mith on ve el, a converted cable layer of 634 GT wa February 22, 2003 and boomed off. The CCG abandoned and li ting at anchor in Bayne began oliciting bid fo r oil remo al and ound, Briti h olumbia. breaking up of the ve el ince it wa not po ible to dump the e el. The CCG Two day later the ve el wa in pected by contractor had pumped off ea ily acce ible oil C G, T M and the Provincial Mini try of on arri al at Lady mith. Aquaculture Food and Fi herie . The hull wa found to b badly ru ted with ign of evere contract wa i ued on March 2 2003 by wa tage at the draft I vel with an unknown the G and work began on oil remo al from quantity of oil and oth r unknown chemical the ve el and remo al of oil contaminated onboard. material.
Bayn ound i aid to be a principal hellfih The OPF recei ed a claim from the C G on and fi herie habitat and of gr at conom1c January 16, 2004 in th amount of 257,3 7.65 importance to Briti h olumbia. to o er the o t and expen e in ol ed in re ponding to the incid nt. The CCG located the owner and attempt d to deliver a Removal otice I tter by r gi ter d Th dmini trator in tigated and a e ed mai I which the owner refu ed to ac ept. the claim and on ar h 9, 2004 made an offe r Accordingly th C G b gan to con ider th of ttl m nt fo r th whol amount of the a ailable option and a detailed in pection and laim which wa accepted b the C G on urvey of the el wa carried out by the arch II, 2004.
CCG and a nautical ur eyor acting on b half of the dmini trator on February 14, 200 . On March 16 2004 the d mini tra tor authorized pa ment of 257 7.6 together It wa concluded that the e el wa in with int r t of 12,534.14. imminent danger of inking becau e of the condition of the hull and therefor po ed a The dmini trator ha clo ed hi file. considerable threat of oil pollution.
3.16 Three K's (2003)
Thi fi shing ves el the dock at On April 2, 2003 the Admini trator poke with Pocologan Harbour, ew Brun wick, on a repre entati e of the local clam digger and March 23, 2003 with a ub equent release of pro ided ad ice regarding compen ation for oil causing a light heen ar ound the ve el lo of income a a result of the clo ure either which could not be cleaned up. The owner by the hip-owner or the SOPF. made arrangements to raise the ve sel. A a precautionary measure EC temporarily closed the local clam bed.
The Administrator's Annual Report 2003-2004 18 Ship-source Oil Pollution Fund
There being no claim made to the SOPF closed his file. regarding this incident, the Administrator has
3.17 CCGS Hudson (2003)
While berthed at Halifax, ova Scotia on CCG Emergency Response personnel who March 16, 2003, there was work being done on recovered some contaminated pads that had one of the ship's hydraulic cranes. As a result been carried away from the ship by the tide. of a valve problem approximately 10 liters of hydraulic oil was spilt into the harbour. There being no claims resulting from this incident, the Administrator has closed his file. The ship's crew commenced the clean-up using ab orbent pads and was later assisted by
3.18 Maersk Gabarus (2003)
The tug Maersk Gabaru wa refueling at the hull and the contents of the affected tanks were Imperoil dock in Halifax Harbour on April 9, transferred to prevent further loss. The vessel 2003 when the Master noticed oil bubbling up was later moved to another berth fo r repair alongside. Re-fueling wa immediately work to be done. topped and a boom placed around the ves el. Small boats were used to break up the lick There were no claim made fo r this incident and a diver was engaged to inspect the hull. It and the Admini trator has closed his fi le. was reported that there wa a fracture in the
3.19 Caribou (2003)
This Marine Atlantic Ferry had a pill of A imilar mall pill occuned on June 13, 2003 hydraulic oil from a loading ramp on April 16, which wa again cleaned up quickly. 2003 while berthed at the ydney, ova Scotia terminal. The spill wa immediately cleaned up There being no claims arising from these by ferry per onnel. occurrence , the Administrator has closed his file.
3.20 Retreiver (2003)
This Panamanian Flag Ve el was taking fuel The area wa boomed off and a contractor was from a tank truck while berthed at Pier 28 1n engaged by the hip to carry out a clean-up to Halifax, ova Scotia on April 17, 2003. the ati fa ction of the CCG and EC. TCMS al o investigated the circumstances of the spill. The ves el 's fuel tank overflowed from a vent pipe on deck and thence into the harbour. There being no claims received, the Some 300 liters of diesel oil were pilt. Administrator has closed hi file.
The Administrator's Annual Report 2003-2004 19 hip-, ource Oil Pollution Fund
3.21 CCGC Comella (2003)
Thi a t Guard cutter wa berthed at the pill wa immediately cleaned up with aint John, w Brun wick CG Ba e on ab orbent pad by the crew. pril 20, 2003 when there wa a minor piJJ of die el oil during a re-fueling operation. The o claim have been received and the Admini trator ha clo ed hi fi le.
3.22 Sandpiper (2003)
Thi ve el i an old dredge and wa berthed at their re pon which wa the di u ed Pacific Cannery Dock in te e ton inve tigated ed by the Harbour, Briti h Columbia. The hip and it dmini trator. equipment had been arre ted in December 200 I and were the ubject of an action in the An offer of ettlement wa made to SH Federal Court for matter other than pollution. whi h wa accepted and payment of 1,517.93 plu intere t of 524.25 wa authorized on July During the night of April 17, 2003, the 16, 2003. andpiper ank at her berth and oil v a re lea ed into the water. The teve ton Harbour Gi en the totality of information pro ided by uthority ( H ), wa notified and the the H ' ith their claim the ta k of fo llowing morning clean up comm need with in e tigation and a e ment ' a made the a i tance of the C G. The hip-0\ ner had traight fon ard. been notified of the occurr nee by the H but hawed re luctance to become a ti ely in ol ed On January 29, 2004 a claim ' a recei ed in the clean-up at thi time. from G in the amount of _0, 151.97 for their o t and pen e in re ponding to the The CCG took o r the I anup on pril 25, incident. Effort to re o er the e monie from 2003 iz a Re pon e Ord r dated that day. the hip-o' n r had elicited no re pon e. Effort by the CCG to g t the hip- ' ner invol ed were to no practical a ail at thi Th dmini trator in e tigated and a e ed point. the claim and made an off r of ettlement on ar h 4, 2004. On May 7, 2003 the hip-o' ner and a al age crew were on it and preparing to rai e the Pa ment of 20,151.97 plu intere t of dredge. Thi wa accompli h d on Ma 12, 31.3 ' a authorized on March 16, 2004. 2003. The dmini trator ha clo ed hi fi le. The SH ubmitted a claim to th OPF on July 9, 2003 in the amount of I ,5 7.53 for
3.23 Vandalism Incident, Shippegan, New Brunswick (2003)
In 2003 change were made by DFO to the and native band and re ulted in the outbreak allowable catche in the crab fi hery, the of violence on May 2, 2003 when orne 100 quota were reduced and at the ame time, crab trap " ere et on fire on the ' harf. more individual license to fish were granted. This cau ed ume t among the local fi hermen
The Administrator's Annual Report 2003-2004 20 Ship-source Oil Pollution Fund
The next day three fishingvessels and the local relation to the application of the Marine DFO office were set on fi re during a Liability Act. demonstration on the waterfront. Another vessel belonging to the Big Cove native band Sub-section 51( 1) of the Act holds the ship was also burned as well as a privately owned owner strictly liable for oil pollution damage fi h plant and warehouse; the fi shing vessel caused by his vessel but paragraph 51(3 )(b) sub equently sank and released oil into the provides the ship-owner with a defence against water. this liability where the pollution " was wholly caused by an act or omission of a third party Police, Firefighters and CCG personnel were with intent to cause damage". on scene but were unable to fully respond becau e of the tense ituation. This provision may have applied to this incident to relieve the ship-owner from Some oil pollution occurred from the sunken statutory liability under subsection 51(1) had ves el and from the wharf area but no cleanup there been any significant oil pollution that was possible at that time. It wa later required cleanup. evertheless the application determined that there was no further pollution of paragraph (b) of section 84 would have threat from the sunken ve sel and that the fire made the SOPF potentially liable for the and natural dispersion had clean ed the area. payment of costs and expenses incurred in remedying the ituation. o claims were received in regard to this incident but it did rai e con ideration m The Administrator has closed his fi le.
3.24 Shinei Maru #85 (2003)
Thi 379 gross ton Japanese flag fi bing ve el 2 tug and taken to a berth In Halifax fo r had ailed from Halifax, S Harbour during further in pection and repair. the evening of May 3, 2002 and at 2300 hour local time ran aground on the rock at A Letter of Undertaking in fa vour of the CCG Portugue e Co e. She u tained damage to her and the OPF wa issued by the P&I Club fore-peak tank and an e timated 35 tonne of coun el on May 12, 2003 to cover the response die el fuel were lo t. co t . It is under tood that the CCG co t and expen e totaled ome $18,000.00 and at year The CCG, TCMS and hip-owner' Re pon e end a settlement had been agreed between the Organization re ponded and the ve el wa hip-owner and CCG. boomed off. The remainder of the oil on board was lightered off a a precautionary mea ure o other claim being made to the SOPF, the and the ve el wa then pulled off the rock by Administrator has closed hi file.
3.25 Safari Spirit (2003)
This 23 1 gro s ton crui e yacht wa on a The CCG and the ship' Response voyage to Ala ka when, on May 8, 2003, he Organization re ponded to the incident; the grounded in Kisameet Bay, Briti h Columbia fuel tank vents were plugged to prevent fu rther and sub equently ank with the lo of orne lo and the area was boomed off. diesel fuel. The 10 passengers and 6 crew were Personnel from the Re pon e Organization afely taken off the ve sel before she ank. cleaned up the oil in the containment boom and preparations for salvage began. On May
The Administrator's Annual Report 2003-2004 21 hip- ource Oil Pollution Fund
15, 2003 the vc el wa rai ed and The hip owner reimbur ed the fo r it ub equently towed to hearwater fo r re pon e cost and, there being no other nece ary repair . claim , the dmini trator ha clo ed hi file.
3.26 Beaufort Spirit (2003)
It wa reported to the C that thi ve el wa Admini trator engaged a urveyor to advi e leaking oil into the water of the him on the condition of the ve el. Hi ation Marina at Lantzville, anoo e Bay, in pection on January 28, 2004 re ealed that Briti h olumbia on May II, 2003. The next the ve I wa a non-operable floating derelict day the CG and T MS met with the owner to and that there wa a can iderable ri k of oil in pect the e el which wa an old riveted pollution particularly if he ank at her con truction tee! tug built in about the late mooring . The tug had meantime been 1940 and in poor condition. urrounded by an oil containment boom.
The owner wa advi ed to plug the leak which By February 6, 2004 all the oil drum , can he did with a metal plate and rubber ga ket and and propan tank had been remo ed from the wa at o in tructed by the G to do further el by th G contractor who had al o work on the e el' tank and bilge to en ure pumped oily water from the hull. that ther wa no futurethr eat of pollution. G effort to obtain a Letter of ndertaking On January 20, 2004 the G recei ed a from the hip owner, or fo r him to take action fu rther report that th I wa in a tat of on hi own to r ol e th ituation during thi di repair and at ri k of leaking oil into th period were to no a ail. marine environment. Th ne t day the e I wa tow d to Lad mith and in p ct d b ft r recei ing eral bid , the G elected G who d i covered on board a a contra tor to demoli h/break up the e el container/tank with I 000 gallon of oil and and r ol e th r maining pollution problem. om 25 pail that w r leaking oil onto the deck of the e el. Th el wa at o B year nd th I had b n broken up and b ginning to li t. di po ed of and the dmini trator await fu rther d lopment On January 22, 2004 th took o er th incident iz a Re pon e
3.27 Pender Lady (2003)
The CCG receiv d a report on June 23, 2003 The next da , June 24, 2003, CCG r pon e that thi ve el wa inking and li ting to port. per onnel were on cene and the e el were It wa determined that the Pender Lady wa an boom d off. The tern of the Pender Lady had old Briti h Columbia Ferry, built in 1923, and unk in the early morning hour and later that together with another old fe rry named Sam on day had completely unk and relea ed oil into IV, wa moored at aden Harbour on the n01th the water. end of the Queen Charlotte Islands, Briti h Columbia and used as a fi bing lodge with The owner had pointed out to the CCG that the paying guests. These gue t were afely taken ve el had, at some time in the pa t, been ashore by the CCGC Arrow Post and stuffed full of fo am plastic block below tran p01ted to Masset. decks, pre umably to add buoyancy and
The Administrator's Annual Report 2003-2004 22 Ship-source Oil Pollution Fund maintain the esse! afloat. Pumps, including The CCG submitted a claim to the SOPF dated those of the Arrow Post, had been unable to February 11, 2004 for their costs and expenses reduce the flooding which indicated a non in responding to the incident, in the amount of watertight hull condition. $2,101,017.72.
It is noted that the vessel was, at the time of The Administrator investigated and assessed the incident, till on the Canadian Ship the claim and on March 31, 2004 made an Registry but had not apparently been subjected offer of settlement which was accepted by the to TCMS inspection and safety surveys for a CCG that same day. On April 1, 2004, considerable time. payment of $1,659,663.06, which included interest was authorized. It was ascertained by the CCG that the owner did not have insurance and was apparently The Administrator has closed his case fi le but financially incapable of responding to the is reviewing the possibility of cost recovery incident. The CCG took over the incident and from the ship-owner. engaged a contractor. The Administrator engaged his own marine surveyor to advise ote: This case shows the threat to the him on the operation. It was discovered that environment and the economic losses caused the Samson IV was in the same condition as the by derelict vessels. In this year and the Pender Lady, even down to the foam block previous year payments from the SOPF for buoyancy. re pecting such ves el exceeded some 2.8 million dollars. It wa decided that the only way to rectify the pollution problem was to totally demolish both In this ca e the derelict vessel also had paying ve el and di pose of them a recoverable gue t aboard. In uch cases it may only be a crap or by burningonshore and this was done. matter of time before there is serious personal At the arne time, work crew were recovering injury or lo of life caused by the capsizing or oil from the water a it wa relea ed and al o inking of uch ves els. cleaning up the horeline a nece ary. The Administrator is of the view that, while It i appreciated that the work on the th r ar mandated obligation of government involved con iderable hazard to the re pon e to en ure the afety of ve sel and the people worker becau e of the condition of the on board them, it i es entia! that these rules ves el . All work wa completed by the end of and regulations be trictly applied in all cases Augu t 2003. to prevent unnecessary dangers to both the environment and per ons.
3.28 Mac Asphalt 401 (2003)
On June 20, 2003 at 0130 hour thi 3366 The hip-owner ' Response Organization was gros ton barge was loading a phalt at the Sun called in and recovery operations u ing Oil dock near Samia, Ontario, when there was vacuum trucks and diver commenced at 0500 an overflow from the barge' tank . Sunoco hour . The CCG wa also in attendance to and the barge crew took immediate action and monitor the operation and conduct a shoreline the area was boomed off to prevent preading a e ment. of the asphalt, however much of it ank to the bottom. By June 25, 2003 all pollution had been cleaned up and a video of the river bottom
The Administrator's Annual Report 2003-2004 23 hip-source Oil Pollution Fund confirmed that no v1 ible deposit of a phalt o claims have been received in re pect of thi remained. incident and the Administrator ha closed hi file.
3.29 Silent Provider (2003)
Thi 73 gro ton fi bing ve el wa off Petit di per ed naturally. Both of the fuel tank were d Grat harbour ova cotia on June 25, 2003 recovered after the grounding and brought to when there wa a fi re on board, likely from a Petit de Grat. propane tank explo ion. The two crew member aboard were re cued after having The hip-owner and hi P&l Club had abandoned the ve el in a life raft. The ve el re ponded to the incident and were al o burntto the waterline and e entually grounded arranging to remove a much of the ve el and on Heath Head. machinery a po ible from the grounding ite.
There were two die el fu I tank on board, and o claim ha e been recei ed by the OPF mo t, if not all, the oil wa con umed in the and the dmini trator ha clo ed hi file. fi re. Trace of oil h en on the water were
3.30 Silver Seas (2003)
Thi fi hing ve el wa being refuel d at The fuel company accepted re pon ibil ity of L'Archeveque Harbour, ova cotia on July th incident and ngaged a contractor to deploy 17, 2003 when the tank truck dri er put th containm nt boom and clean-up the pill. fuel ho e into th wrong pipe. a re ult ome 00 liter of fuel went directly into the e I' Th ar a wa ati factoril I aned up by the bilg and the automatic bilg pump cut in and afternoonof Jul I , 2003. pumped ome 0 to I 00 liter of oil into the harbour b fo re it wa noti d. o claim ha ing been recei ed, the dmini trator ha clo ed hi file.
3.31 Gillking (2003)
On ugu t 12, 2003 thi 1942 built wooden to remo e and di po e tug ank at the wharf at Bamfield, Briti h contract wa let to th ucce Columbia with a re ultant relea e of die el oil Augu t 27, 2003. in the water. The CCG Bamfield liD boat re ponded to the incident, boomed off the area The e el wa rai ed on eptember 4, 2003 and commenced u ing ab orbent pad to clean and prepared for towing to Lady mith. Thi up the relea ed oil. occurred on September , 2003 and the Gillking wa at the contractor' yard the next The ship-owner was contacted by CCG but day when work tarted on the di posal of the proved unable or unwilling to accept ve el. respon ibility. ccordingly, a Response Order wa obtained and CCG engaged a local The remaining oil and oily machinery wa contractor on a daily basis to effect clean up. removed from the tug and by October 30, 2003 Divers were also hired to plug the fuel tank the vessel had been broken up and disposed of vents. In the meantime the CCG obtained bids in a landfill ite.
The Administrator's Annual Report 2003-2004 24 Ship-source Oil Pollution Fund
On January 27, 2004 a claim was received On March 9, 2004 an offer of settlement by the from the CCG in the amount of $144,344.47 Administrator was accepted by the CCG. for their cost and expenses in responding to Payment of $132,406.27 plus interest of the incident. $3,003.46 was authorized on March 17, 2004.
The Administrator requested further The Administrator has closed his case fi le but information from the CCG on March 5, 2004, at year end was investigating the likelihood of to assist him in the investigation and successfulcost recovery action against the ship assessment of the claim. owner.
3.32 Mystery Spill, Grenville Channel, British Columbia (2003)
On September 20, 2003, the United States Anangements were made by the CCG to have Coast Guard Cutter "Maple" was transiting the area surveyed by a remote control Grenville Channel, BC and reported that they underwater vehicle and on October 30, 2003 had seen an oil slick off Lowe Inlet. The an old wreck was located with oil escaping incident was investigated by the CCGS Tanu from cracks in the hull. At the same time, clean and samples of the oil were obtained on up crews were working to remedy the September 23, 2003. It was reported that these horeline contamination. By the middle of sample were similar to crude oil in odor and ovember, divers had plugged areas of the consistency but that there was no apparent wreck's hull that were breached to stop the source and clean up was not required. escape of oil.
In early October, a commercial airline pilot Inve tigations by the CCG indicate that the reported that he had een further pollution in ource may be that of the Brigadier General the area that wa "quite thick". M. G. Zalin ki, a United States Army Tran portation Corps vessel that was wrecked CCG responded and ent per onnel to the ite on September 20, 1946. which wa in a very remote area and not easily acces ible. The pre ence of the lick wa At year-end the CCG i till working on confirmed and orne 3 mile of horeline had po itively identifying the wreck, re ponding to been impacted. Again, no ource was fo und oil leakage a nece ary and working on a plan and the CCG uspected that the oil could be to remove all oil from the wreck. urfacing from an old wreck. The dmini trator await developments.
3.33 Mary Todd (2003)
This seine fi bing vessel sank off the The Mary Todd was taken to the shipyard at Fisherman' Wharf in Tsehum Harbour, Mitchell I land and lifted from the water British Columbia on October 5, 2003 with thereby eliminating the threat of future oil resulting oil pollution. The CCG re ponded pollution. It i understood that the CCG has and ascertained that the owner was unable to submitted a bill for its costs and expenses to respond to the incident. The ve sel was the ship owner and is also in discu ions with boomed off by the CCG and wa raised by a the insurance company of Small Craft CCG Contractor on October 6, 2003. Harbours.
The Administrator's A1mual Report 2003-2004 25 hip-source Oil Pollution Fund
The admini trator await de elopment .
3.34 Submerged Drums, Goose Bay, Newfoundland and Labrador (2003)
The G wa informed on Augu t 27, 2003 tran fo rmer hou i ng wa fo und 111 the a me that a recreational diver had reported that he condition. had ob erved 6 drum on the harbour bottom at the overnment Wharf which were emitting The next day another teel drum wa located mall amount of oil. and it too fe ll apart with no pollution. The di er then located a large pile of unken The G re ponded and olicited bid from a creo oted log which, when probed relea ed a local diving contractor to remove the drum heen of oil to the urface. Thi wa the only from the eabed. A contract wa awarded and ource of oil located and G have indicated di ing operation comm need on eptember that there will be no claim ubmitted to the 17, 2003. Three drum were locat d partially OPF in iew of the ource. co ered in ilt and they fe ll apatt a the di er handled them. There wa no oil relea ed. The dmini trator ha clo ed hi file.
3.35 Black Dragon, (Heung Ryong) (2003)
Thi wa an old hine flag fi hing effo rt o t two day to conduct the ome 120 fe t in length in ol ed in lift wer un uc e fu l and it wa apparent that muggling of ill gal immigrant t the e t the 200 ton capa it lifting derrick wa not oa t at the end of 1999 and had been eized ufficient. I o the e el wa fi rml tuck in by the authoriti and ti d up at Port lb rni, th ry oft mud bottom. Briti h olumbia. Th Black Dragon had been
old by rown t to a R f oci ty fo r Hea 1 r quipment wa on ite o ember 2 , ev ntual recr ational di ing acti itie but wa 2003 and al ag preparation b gan. The lat r re old by the o iety to a pri at owner. e el v a rai ed with great diffi culty on D c mb r 5, 2003 and o r th next two day 0 r th en uing year the el had been water and mud wa pumped out of the e el moored at e eral location and wa in a and om hull repair made in preparation fo r dilapidated condition. he e entually end d up th tow to Lady mith fo r di po al. moored to a D D a y buo in Mayne Ba and e eral fe deral and pro incial ag nci had On De ember 9, 2003 while under tow and in voiced concem on the o erall ituation. a po ition off John tone Reef the e el ank again. It i under tood that the CCG will not On October 26, 2003 the e el ank in about undettake ft.utheraction r garding thi inking. 120 fe et of water and wa boomed off by the CCG Bamfield lifeboat crew. Effo rt by the On February 3, 2004 a claim wa received CCG to get the owner to re pond to the from the CCG in the amount of $72 ,797.28 to incident and the re ultant oil pollution were to cover the co t and expen e incuned fo r their no avail. re pon e to the incident.
The CCG then engaged a contractor to raise The circum tance of thi occurrence involved the vessel and work commenced on ovember con iderable in e tigation and a sessment by 7, 2003. The Administrator had engaged his the Admini trator and on March 30, 2004 he own marine urveyor to attend on site. Initial made an offe r of ettlement which was
The Administrator's Atmual Report 2003-2004 26 Ship-source Oil Pollution Fund accepted by the CCG that same day. Payment The Administrator has closed his claim filebut of 568,749.63 plus interest of 8,897.00 was is considering the possibility of cost recovery also authorized on that date in fu ll and final from the ship-owner. ettlement.
3.36 Transporter No.5 (2003)
On October 27, 2003 in the early morning with the CCG in a monitoring role. Spill hours, the orth Fraser River, British cleanup and salvage operations continued over Columbia Harbour Patrol reported that the the next fe w days. The barge was removed on rock barge Transporter o. 5 had overturned November 3, 2003 and the cleanup of oil onto the derrick tied up at McDonald Slough contaminated areas was completed on incuning heavy damage to both and resulting November 5, 2003. in oil pollution. No claims have been received fo r this incident The barge owner, Vancouver Pile Driving, was and the Administrator has closed his file. contacted and contracted with the local re pon e organization to rectify the situation
3.37 Bedford Basin, Nova Scotia (2003)
On October 25, 2003 a private citizen reported the owner' in urance company was involved to the CCG that oil was leaking from a sunken and had engaged a salvage contractor. By plea ure crui er at the head of Bedford Ba in, ovember 5, 2003 the boat had been recovered ova Scotia adjacent to DeWolfe Park. The and placed ashore for dispo al. All pollution caller indicated that the ve sel had unk during had be n cleaned up. Hurricane Juan on September 29, 2003. There being no claim , the Admini trator has The CCG and EC re ponded and a certained clo ed hi file. that the oil in que tion wa diesel fuel and that
3.38 John Boy (2003)
On ovember 25, 2003 thi fi bing ve el, contractor wa engaged and remedial work secured adjacent to the lipway at the north undertaken uch that the vessel was righted end of Lockeport Harbour, ova cotia, and the ource of poll ution removed on tipped over and wa awa h cau ing oil ovember 26, 2003. Cleanup of the area pollution. wa completed by noon of that day.
The CCG attempted to contact the owner but The CCG made a claim to the SOPF which it became apparent that he could not provide was received on January 30, 2004 in the a re ponse due to hi ab ence from amount of 24,133.30 to cover its co t and Lockeport and that he had no insurance. expen es.
There were lobster car in the area so that it was necessary for the CCG to take action. A
The Administrator's Annual Report 2003-2004 27 hip-source Oil Pollution Fund
cumentation wa reque ted Payment of 22,018.74 plus interest of from the and Admini trator completed 293.28 was authorized on March I 7, 2004. hi a e ment of th claim and made an ffe r of ettlement on March 2, 2004. The Admini trator ha clo ed hi incident fi le but i con idering the pro pects of The C made fu rther repre entation on effecting co t recovery. March 5, 2004 in re p ct to their claim and a revi ed offe r wa made on March 9, 2004 which wa accepted.
3.39 Leota B (2003)
On December 2, 2003 thi fi hing ve el wa becau e of the proximity of the Canada tied up at Head Harbour, Campobello I land, border. The owner made arrangement to lift ew Brun wick, when becau e of bad the ve el and thi wa completed on weather, he wa blown under the wharf, December 5, 2003. uffe r d damag and ank. he had on board about 160 gallon of die el fu I, ome ofwhich The oil that wa lo t wa pu hed out to ea by e caped. the tide and di per ed naturally.
The hip-owner notified the G/DFO and o claim aro e from thi incident and the al o other local lob ter fi herm n of the dmini trator ha clo d hi fi le. occurrence. The CG al o notified the G
3.40 Mystery Spill, Bassin Louise, Port of Quebec (2003)
On May 14, 2003 the wa ad i ed of an which the dmini trator in e tigated and oil lick in Ba in Loui e, Port of Quebec of a e ed a a my tery pill under the ML . unknown origin. Following in tigation a contractor wa engaged and the oil wa n offe r of ttl m nt a mad on March 4, cleaned up that ame day. 2004 and accepted on arch 11, 2004. Payment of I ,6 . 3 plu intere t of 67.72 The CCG and the Quebec Port uthority could wa authorized on March 16, 2004. fi nd no land-ba d ource fo r th pill. The dmini trator ha clo d hi fi le. On February 3, 2004 th CG made a claim of l ,685.83 fo r the co t and exp n in ol ed
3.41 Mystery Spill, Trois- Rivieres, Quebec (2003)
An oil lick wa discovered at the tug ba in, The CCG made a claim to the OPF on Section 15, in the Port of Trois-Riviere , on February 3, 2004 in the amount of 12,364.77 Augu t 5, 2003. o source could be found fo r for th cl anup cost . the lick. The claim wa a sessed by the Admini trator The CCG engaged a contractor and the oil wa as a mystery spill and an offe r of ettlement cleaned up by the early hours of the next day wa made on March 4, 2004. This was using vacuum trucks. accepted on March 11, 2004 and payment of
The Administrator's Annual Repmi 2003-2004 28 Ship-source Oil Pollution Fund
12,364.77 plu interest of $382.85 was made The Administrator has closed his file. on March 17, 2004.
3.42 Kaien (2003)
This 50 foot long ex-fish packing vessel was engaged and the vessel was raised on January moored to the pilings at Slack Point, 15, 2004 and taken to the contactor's yard for Ladysmith Harbour, British Columbia when, decontamination and disposal. This work on January 7, 2004 she partially sank, lying on commenced on the fo llowing Monday and was her side and leaking oil. She was righted by the completed on January 26, 2004. owner with the unsolicited aid of neighbors and a local marine contractor. A claim dated February 13, 2004 was made by the CCG to the SOPF in the amount of Sometime during the night of January 13/14, $12,067.88 for their incurred costs and 2004 the vessel sank completely. There was expen e fo r the incident. some oil pollution and the area around the vessel was boomed off. The Administrator investigated and assessed the claim and made an offe r of ettlement on The Administrator engaged a Marine Surveyor March 5, 2004 which was revised fo llowing to report back to him on the various aspects of further information submitted by CCG fo ur the incident and the proposed response. days later. Thi revised offer was accepted and on March 16, 2004 payment of $12,067.88 The ship-owner wa contacted by the CCG a plu intere t of 99.67 was authorized. to his intention but he advi ed that he had no money to deal with the ituation and turned the The Admini trator has closed hi fi le. vessel o er to the CCG. A contractor wa
3.43 Anscomb (2004)
Tbi ve set served a a pro incially owned On January 23, 2004 the CCG took over the ferry on Kootenay Lake, Briti h Columbia lead agency tatu from WLAP. With the bulk until April 2003 when he wa old to a private of the work completed the contractor was owner who had intention of u ing her fo r a tood down on January 28, 2004 and the work variety of endeavors, one of which wa an off- of incinerating contaminated debris, oiled bore ca ino/re taurant. ab orbent pad and boom maintenance was conducted by CCG per onnel. It had been On January 11, 2004 the ve el ank in deep determined that alvage of the unken vessel water with re ulting oil pollution. was not fea ible. Work wa terminated on February 2, 2003, there being no recoverable The Provincial Ministry of Water, Air and oil at the ite. Land Protection (WLAP) a umed lead agency statu and provided the initial cleanup On March 11, 2003 the CCG submitted a claim procedures and hired a contractor ince the in the amount of $29,753.68 fo r their costs and owner did not indicate any action to provide a expenses. This was asse sed by the response. Work was done on cleaning up oil Administrator and an offe r of ettlement made surfacing from the sunken ve set, recovering on March 24, 2004 which was accepted. contaminated debris and shoreline cleanup. Payment of $24,3 16.40 plus interest of $195.23 as authorized on March 25, 2004.
The Administrator's Annual Report 2003-2004 29 hip-source Oil Pollution Fund
On March 25, 2004 a claim of $23,024.54 wa March 26, 2004. Payment of $22,524.54 plu made by the Provincial WLAP fo r their co t interest of 250.09 wa authorized. and expen e a ociated with the initial incident re pon e. Th i wa a e ed and an The Admini trator has clo ed hi fi le but i offe r of ettlement made and accepted on con idering the likelihood of effecting co t recovery from the owner.
3.44 Oiled Birds - Placentia Bay, Newfoundland and Labrador (2004)
On March 22, 2004 a private citizen reported ote: lncident uch a thi continually to the CCG Traffic Centre that there were oiled empha ize the problem of hip dumping oily bird in the area of t. Bride . Re pon e bilge water and tank wa hing into the off:hore per onnel were immediately ent to the area by and the importance of aerial urveillance by C G. mean of aircraft and atellite to catch offender , a well a the matter of on- hore The next day further report were received and ba ed wa te oil reception facilitie . the CG conducted ur ey of Placentia Bay, t. Mary' Bay and to a le er extent It i noted that early in the pring of 2004
Trepa ey Bay. Dead bird and live oiled bird 1111 ter nder on introduced amendment to were recovered ov r the next fe w day a a the MigratOJ)' Bird Convention Act, (1994) re ult of continuing b ach urvey and aerial and th Canadian Environmental Act, ( 1999)
urveillance by G h I icopt r. in th Hou e of ommon which, when pa ed, will greatly enhance the rigorou Federal n ironment Mini ter Da id nd ron pro ecution of offi nder . ee al o ection 4. 1 al o participated in a ur eillance flight on of thi report. Mar h 5, 2004 to a e th ituation. The work of th orking Group on Oil At the culmination of the in ident on Mar h Pollution of the a t oa t of anada 16, 2004 no ource had b en fo und fo r the oil continu on th Pr ntion of Oiled Wildlife and the recovered bird ount \ a 2 dead and (POW) proje t that wa detailed in ection 5.2 55 live oiled bird which had b en taken to the of th dmini trator' 2002-2003 nnual rehabilitation c ntr at hip o e fo r the r port and in ection 4. .3 of thi report. nece ary cleaning and tr atment prior to their relea e.
3.45 Anna M (2004)
On March 26, 2004 the CCG wa advi ed that e el and the owner hired a contractor to this fi hing ves el had truck a rock and unk al age the e el. at the inner ide of Venn Pa , Prince Rupert, British Columbia. At year end the Administrator await development . The CCG responded and boomed off the vessel. Divers plugged off the vents in the
The Administrator's Annual Report 2003-2004 30 Ship-source Oil Pollution Fund
3.46 Other Incidents (2003-2004)
Incidents occurred during the year that had no and highlight ongoing problems that they are direct impact, nor did they place any liability, reported as under noted. upon the SOPF but are of sufficient interest
Irving Whale
Following the sinking of this oil barge in 1970 ote: This type of post incident remedial there was extensive oil pollution on the shores action, in this case of an ongoing nature, years bordering the Gulf of St. Lawrence and in after the initial cleanup emphasizes the need particular those of the Isles de Ia Madeleine. fo r proper and correct disposal of recovered Full details of the incident are contained in the contaminated material fo llowing an oil spill Administrators Annual Reports from 1991- and that the methodology used be selected to 1992 until 1999-2000. take into account all of the fa ctors involved both at the time and in the future. In re pect of the cleanup on the I le de Ia Madeleine, contaminated beach material was The work undertaken by the Newfoundland placed in large heavy duty plastic bags and and Labrador Environmental Industry these were then buried in the back- bore and A ociation EIA), CCG Regional Advi ory dunes that make up much of the i land Councils and CMAC will help in resolving the topography. Over the year wind ero ion and problem. The Administrator attended sessions shifting of the dune ha on many occa ion of the e bodies during the year (see section unco ered these dumps expo ing the 5.3) contaminated material and nece sitating the CCG to take action and prevent further Proper dispo al i attainable and it is noted that contamination. many thou and of tons of oil contaminated material were buried at specially prepared and The late t uch occurrence were on June 25 con tructed landfill ites in ova Scotia and ovember 28, 2003 when the CCG fo llowing the breakup and inking of the oil recovered a total of 647 bag of contaminated tanker Arrow in 1970 and that there have been material and tran ported them to the Quebec no report of any ub equent leaching mainland fo r di po al by incineration. problem .
It i under tood that a ite re toration plan i to be implemented during the ummer of 2004.
Rouge River - Sewer outfalls, Detroit, USA
The Admini trator's 2002-2003 Annual The incidence of uch spills is epitomized by Report, ection 4.2.2, outlined the problem of the history of tho e originating from the pill occurring from torm water and outfall ituated in the Rouge River that combined sewage outfall , particularly when there are heavy rain or run off in the pring.
The Administrator's Annual Report 2003-2004 31 hip-source Oil Pollution Fund migrate to the Detroit River and thu po e a There wa a pill of oil fr om the outfalls on threat to the anadian bore. April 2, 2002 that again nece sitated clean up of the Ontario horeline by the G. Jn this A noted in the above citation there was, in instance the clean up co t of some 1. I 4 ugu t of 1994 a pill of fa t from a rendering million were recovered from the U G. plant in Dearborn, Michigan, that impacted the horeline at Amber tburg, 0 , the CCG See at o reference to the anada/United State cleaned up the pill. o t recovery could not Joint Contingency Plan at ection 3.47 of the be claimed from the OPF becau e the pill Admini trator' 2002-2003 Annual Report. wa not oil nor wa it from a hip ource but recovery of 346,000.00 wa obtained from The late t pill in thi area occurred on April 2, the United tate fund. 2004 but wa contained in the Rouge River and did not cro into Canadian water and On May 31, 1998 there wa a pill of primarily impact the horeline. ewage with orne oil content which impacted the Canadian hore at Fighting I land, Ontario. The C G expended orne 112 500.00 fo r the nece ary clean up and once more no recovery could be obtained from the OPF for the rea on outlined above. ee ection 3.2 and 4.2.2 of the Admini trator' 2002-2003 Annual Repott.
The Administrator's Annual Report 2003-2004 32 Ship-source Oil Pollution Fund
4. Challenges and Opportunities
4.1 Quasi-Criminal Liability for Environmental Offences in Canada -Proposed Changes
On May 6, 2004, the Honourable David Anderson, Minister of the Environment, tabled new legislation (Bill C-34) to amend the Migratory Birds Convention Act (1994) and the Canadian Environmental Protection Act (1999).
When enacted Bill C-34 will amend the Migratory Birds Convention Act I994 to:
(a) State that the Act applies in the exclusive economic zone of Canada;
(b) Protect migratory birds fr om the ef fects caused by deposits of harmfu l substances, such as oil, in the exclusive economic zone of Canada; (c) State that the Act app lies to vessels and their owners and operators; (d) Subject masters, chief engineers, owner and operators of vessels and directors and officers of c01porations to a duty of care to ensure compliance with the Act and regulations; (e) Expand the enforcement powers to include orders to direct and detain vessels fo und to be in contravention of that Act or its regulation ; (f) Expand the jurisdiction of Canadian courts to include the exclusive economic zone of Canada;
(g) Increase penalties; and
(h) Permit courts to impo e additional punishment in the fo rm of orders covering matters such as environmental audits, community ervice and the creation of scholarships fo r students enrolled in environmental studies.
Thi enactment will also amend the Canadian Environmental Protection Act, I999 to:
(a) Protect the marine environment from the •vrongfid activitie of ship a well as per on ; (b) Include prohibitions concerning the disposal and incineration of ub lances at sea by ship ; (c) Include regulation-making authority to deal with disposal of sub tance during the normal operation of ship , aircraft , platormsf and other structures; (d) Expand the enforcement powers to include orders to direct ship fo und to be in contravention of that Act or it regulations; (e) Subject owners of ships and director and officers of corporations that own ships to a duty of care to ensure that hips comply with the provisions of that Act and its regulations concerning disposal at sea and with orders and directions made under that Act; and
(f) Expand the jurisdiction of Canadian court to include the exclusive economic zone of Canada.
The Administrator's Annual Report 2003-2004 33 hip-source Oil Pollution Fund
When the amendment to the MigraiOJy Birds Convention Act 1994 are enacted the maximum fi ne on conviction of the per on or hip charged with an offence will increase to 300,000 on ummary conviction or l million on indictment. There will be provision fo r imprisonment of indi idual who are convicted.
Maximum fine under pre ent Canadian Environmental Protection Act, 1999 are l million on indictment and 300,000 on ummary conviction. There i pre ent provi ion fo r impri onment of individual . The e are not propo ed to be amended by Bill-34.
"Amending the e es ential pieces of environmental legi lation will complement the Canada Shipping Act (200 1) and allow fo r more cooperative enforcement action ," aid Mr. Ander on. "We are providing the judicial y tem with the tool to pro ecute offender and to enable fine that appropriately reflectthe damage cau ed to the government".
ote: A a re ult of the Di olution of Parliament on May 23, 2004, the propo ed legi lation "died on the order paper". It i expected that Bill-34 will be re-introduced in the next e ion of Pari iament.
4.2 Civil Liability for Environmental Damage in Canada
ompen ation for nvironmental damage i handled diffe rently under the Canadian Marine Liability Act (ML ), the 1992 L , the 1992 lOP Fund Convention, and the OP .
The 1992 LC and the 1992 IOPC Fund on ention, in their definition pro ide that "pollution damage" mean [in part] "(a) Ia or da mage cau ed out ide the ship by contamination re ulting from the e cape or di charge of oil from the hip, where1 er uch e cape or di charge may occur, provided that compen a/ion fo r impairment of the environment other than Ia of profit from uch impairment hall be limited to co I of reasonable mea ure of reinstatement actually undertaken or to be undertaken ... "
In Canada the ML (the OPF Fund go eming tatute) define "oil pollution damage" a : " ... in relation to any hip, mean Ia or damage out ide the hip cau ed by contamination re ullingfrom the di charge of oil from the hip. "
The MLA pro ide : "the owner of a hip i liable fo r oil pollution damage from the hip. "
The MLA fu rther pro id : "/foil pollution damage from a ship re ult in impairment to the environment, the owner of the ship i liable fo r the cos/ of rea onable mea ure of rein lalemenl actually undertaken or to be undertaken. "
In the United States, OPA 90 provides for payment of natural r ource damage claim from the Oil Spill Liability Trust Fund. Only designated Trustee may ubmit natural resource damages. Under the US regulations the trustee may consider a plan to re tore and rehabilitate or acquire the equivalent of the damaged natural re ource.
The Administrator's Annual Report 2003-2004 34 Ship-source Oil Pollution Fund
The technically ju tified reasonable cost for reinstatement/restoration measures, for which comp nsation is available under the 1992 CLC and the 1992 IOPC Fund Convention, might equate to primary restoration under the US NRDA regulations. However, the further measure of OPA RDA is:
• The diminution in value of those natural resomces pending restoration, plus • The reasonable cost of assessing those damages .
The 1992 CLC and the 1992 IOPC Fund Convention do not, by their definition of pollution damage, cover this latter sort of compensation provided by the NRDA regulations or other theoretically based asses ments of environmental damage.
ote: A list of fe deral legislation and regulations dealing with various aspects of marine pollution in Canada i contained in ection 5.2 of this report.
4.3 Environmental Damages Fund (EDF) - Environment Canada
In 1995, Environment Canada obtained the approval of the Treasury Board to create a special purpo e account - Environmental Damage Fund (EDF) - to manage compensation fo r damages to the environment re ulting from pollution incident . The EDF was establi bed to erve as a special holding or trust account to manage funds received as compensation fo r environment damage. The funds may come in the form of court orders, awards, out-of-court settlements, · voluntary payment and other awards provided by variou international ! iabi lity fund .
When an environmental offe n e i pro ecuted, or a ettlement i being negotiated out of court, crown and defen e lawyers can recommend that the penalty include a monetary award to restore environmental damage. Since the Treasury Board approved the EDF, Environment Canada official haveorg anized and ho ted eminar and work hop to discuss a national approach to handle environmental i ue .
4.4 Environmental Damages Fund (EDF) - National Workshop
In December 2002, Environment Canada held an EDF national work hop in Gatineau, Quebec. At the conference, Harry Wruck Q.C. (Senior Genera l Counsel, Department of Ju tice,Vancouver) pre ented a comprehen ive overview of fe deral legislation used in environmental ca e . He remarked that the exi ting piece provide the courts flexibility in sentencing. However, one of the problem i that courts and even crown counsel are not always familiar with the EDF. Consequently, the Department of Justice personnel need to inform other within the legal community about the potential u e of the fund. As government officials, pro ecutors, judges and defense counsel become more fa miliar with respect to thi fund it may ee more use.
At the workshop the Admini trator expressed his view that information alone is not enough to enhance judicial awareness about the role of the EDF in environmental restoration efforts. He noted that the environmental perspective must be translated into language that is appreciated by someone with a legal background. If government authorities hope to per uade judges to direct awards to the EDF, it is essential to have well prepared cases with convincing evidence The Administrator expressed the view that Environment Canada may benefitfr om the secondment of
The Administrator's Annual Report 2003-2004 35 hip- ource Oil Pollution Fund a Department of Ju tice lawyer, or other dedicated coun el, to provide legal advice on the preparation of en ironment ca e . uch dedicated coun el could effe ctively brief attorney of the rown when they are preparing to pre ent a ca e in court fo r a restoration award. The prosecution mu t give judge the ba i to ju tify increa ed fi nes and award to the EDF. Thi can be pur ued through the development of nvironmental Damage A se ment ( DA) that may increa e judicial awarene of damage to the marine environment.
4.5 Fines Increase fo r Environmental Offenses in Canada
Between 1998 and 200 1 approximately 325,000.00 wa accumulated in the EDF. A major part of that contribution i compo ed of proceed obtained through charge filed under the Canadian Environmental Protection Act and ection 32, 35 and 36(3) of the Fisherie Act.
A governmentof ficial , pro ecutor , judge and defence coun el become more aware of the EDF it may become more utilized. For example, on February 25, 2002 a ova cotia court impo ed anada' highe t ever fi ne - 125,000 - for pollution of coa tal water that are a haven to thou and of eabird . ln thi ca e, the Philippine - regi tered hip Baltic Confidence wa charged fo r dumping at lea t 850 liter of oil-mixed bilge water in December 1999, about 15 kilometer outhwe t of Halifax. 1n pleading guilty to the offe nc , lawyer fo r Prime Orient Maritime of Manila aid the company agreed to a penalty of 0,000 and a contribution of 45,000 to anada' En ironmental Damage Fund. The Baltic Confidence incid nt wa the fir t time that a hipping firm paid into the DF.
A ucc fu l aerial ur eillance mi ion occurred in arch 2002, when a fi her patrol aircraft potted an oil lick about 120 kilometer outhea t of Halifax. Th lick wa reported to be 40 kilometer long and 15 meter wide. The oil trail d dir ctl a tern of the fo reign-regi tered bulk carrier L Atlas. ub equently ·harg w re laid and, aft r an agr m nt wa reached between defence lawyer and fe deral Ju tice Departm nt official , a o a cotia pro incial ourt judge impo ed a fine 125,000 on o ember 25, 2002. Th fi ne includ a 50,000 a ment that will go to the EDF toward d aling with en ironmental damage au ed b marine pollution.
4.6 International Recognition of Canada's EDF
The Canadian approach ha obtained international recognition. t the ar h 200 1 e ion of the Third Inter- e ional Working Group of the 1992 IOPC Fund, lTOPF pre ent d it iew on compen ation fo r environmental damage under the international 1992 i il Liability and Fund Convention . In it paper (92 F D/WGR.3/5/2 ) ITOPF refer to other approache by the U A and development in the European Commi ion. ITOPF al o commented on the new (1995) Environmental Damage Fund (EDF) managed by En ironment Canada:
"The Environmental Damage Fund erve a a pecial trust account to manage monies that are received as a result of court order , awards , out-o-court ettlement , voluntaJ)J f payments and, so it is stated, compensation provided through international liabilif) regimes. Th e Canadian Courts are apparently able to use various Federal law to direct money to the Fund, including the Canadian Environmental Protection Act, Migrat01y Birds Convention Act, the Canada Wildlife Act, the Fisherie Act and the Canada Shipping Act. Th e Environment Damages Fund is used to remediate damage to the environment, including a sessment or research and de velopment work required to
The Administrator's Annual Report 2003-2004 36 Ship-source Oil Pollution Fund
support such re !oration efforts. Whilst monies received may not always be used to restore the damaged area in respect of which they were received, it is a requirement that any projects have to be in the region/community where the incident occurred. Th is initiative is seen as both an effective economic dis incentive fo r illegal activities and as a means of providing compensation fo r environmental damage. "
4.7 Environment Damage Assessments and Restoration in Canada
Following on the EDF there are now persons in Canada who are developing natural resource valuation methodologies to quantify damages to the environment for the purpose of obtaining funding for restoration.
The enforcement of environmental laws and regulations is done primarily through a system of fine relating to the diffe rent pieces of legislation applicable in Canada. It is stated that the h·aditional problem associated with this technique i the lack of accepted methods to match costs with the damage that had occuJTed. Judge have used the deterrence criterion in sentencing fo r environmental offences. Environment Canada i developing a new approach - Environmental Damage A essment or EDA - toward quantifying such costs.
The Atlantic Region of Environment Canada i currently developing a framework to guide the various activities associated with the three primary components of the EDA: assessing damage to the natural environment; valuing thi damage; and initiating project aimed at restoring the damage which has been caused.
The initial trigger fo r implementing as essment activities occur when an incident is reported or observed. Once damage ha been mea ured, there i a need to place a value on the lo ses or environmental impact . The Atlantic Region i developing models and protocols for conducting this type of economic valuation. Re toring the damage caused by a pill or relea e i an integral component of the EDA proces . The intent i to replace the damaged ecosy tern components, or enhance natural recovery.
The EDF i intended to fund environmental re toration projects after completion of an EDA. At thi point in the development of a framework fo r general fund criteria and project requirements, all project proposal submitted to Environment Canada fo r funding from the EDF hould satisfy the fo llowing general requirement :
• Satisfyall conditions pecifiedby the cou1i ;
• Build on partner hip with takeholder in achieving common goal /objectives regarding remediation and restoration of damage to the natural environment;
• Satisfyevaluati on/technical review criteria;
• Be cost effective in achieving goal , objective and deliverables;
• Recipients must process the necessary knowledge and skills required to undertake the project;
• Have broad community upp01i;
• Be approved by the Regional Director General.
The Administrator's Annual Report 2003-2004 37 hip-source Oil Pollution Fund ln the meantime, it i acknowledged that the framework fo r establi hing a national plan fo r implementing an en ironmental damage a e ment and re toration proce remain a a work in progre .
Due to the infancy of the 0 proce in anada, it i clearly at a tage in it hi tory where confl ict merge b tween the theoretical a pect developed by it creator and it u e by judge . The development of the DF by Environment Canada may be a trong influence on judge to call upon ED for environmental offence . The impact, if any, of uch development on the tatutory ci il liability of the OPF for oil pollution damage from a hip which re ult in impediment to the environment remain to be een .
Additional information about anada' nvironmental Damage Fund, and the current fram work fo r the g neral fu nd and proj ct requirement are de cribed in OPF dmini trator' nnual R port 2001 -2002 and 2002-2003, re pecti ely, at ection 4. 1.1.
4.8 Prevention and Response Measures in Canada
4.8.1 Oiled Wildlife 1 ue
The Admini trator fir t r port d on the i u of oiled eabird in hi OPF nnual Report 199 - 1999. That report noted that in 1997 and 199 era! my t 1y oil pill had occurred in Placentia Bay, wfoundland, r ulting in claim from th rown to reco er co t and e pen e for the cl aning of li oil d bird taken to a r habilitation ntr fo r tr atm nt. In one incident, the oa t Guard re ord d that approximat ly 2,700 oil d dead bird had been oil cted. In another ca , it wa di co er d that om of the affected bird w r a t rn Harl quin duck , and it ha be n e timat d that ther ar CUlT ntl I than 300 u h bird I ft in th world. ci ntific tudie how that thou and of bird di ach year a a r ult fth ill gal di harge of oily wa te at ea.
In ub equ nt year , the dmini trator report d on the i u of illegal di charge at ea of hip generated oily wa te. Th di harge ar oft n from hip ma hiner bilg that accumulate oily wa te. ome hip deliberately dump th mi of wat rand oil wa t from ngine-room bilge while tran iting the comm rcial marine traffi lane off the outh coa t of wfoundland. hemical analy i ha indi at d that approximat I 90 p r ent of th oil fo und on the fe ather of dead bird originat from hip ' ma hinery pa e . o t ar , th dmini trator r port the pre ence of my tery oil pill fo und on po d hor lin , principal! on the ea tern eaboard. The e pill are oft n a on iderable e pen to th publi pur from cl an-up claim paid by the OPF. The OPF cannot r co er pa m nt mad fo r cl aning up the e m tery pill - the identity of the pollut r i unknown.
In March 2004, the Canadian oa t Guard informed the dmini trator about a m tery oil pill that had killed bird along the outh coa t of ' fo undland. The CG Marine Communication Traffic Centre received a report on March 4 that "during the day an additional 32 dead oiled bird " were turnedin to the rehabilitation centre at hip Co e, Plac ntia Bay. A number of li e oiled bird were being cleaned and re ponding well to rehabilitation treatment.
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4.8.2 World Wildlife Fund Canada (WWF - Canada)
In September 2002, WWF - Canada launched a report, Seabirds and Atlantic Canada 's Ship source Oil Pollution. The report highlights the extent of the problem in Atlantic Canada and list measure to help stop illegal dumping.
The WWF's rep011 urges the federal govemment to adopt the following reconm1endations:
• Stronger legal deterrence. Imposed fines, including minimum fines, must be increased to clearly reflect the fu ll extent of the crimes under both shipping and environmental law;
• Improved surveillance and evidence-gathering technologies. Satellite and aircraft surveillance need to be enhanced to better detect oil dumping. Mandatory on-board transponders and oil jlnge1printing of all ves els in Canadian waters would fa cilitate surveillance, enforcement and the prevention of pollution;
• Strict waste accounting. Shippers must account fo r all produced waste oil or fa ce illegal dumping charge . Falsification of records should result in fr aud chatges; • Implement a ship accreditation system. Th is system would be fo r hippers who promote and adopt be t environment practices and have clean environmental records ;
• Protect and monitor en itive area . The Canadian government should seek an International Ma ritime Organi::ation (IMO) de ignation of Particularly Sensitive Sea Areas (PSSA) fo r offs hore area where eabirds are most vulnerable.
In a new relea e on May 7, 2004, WWF - Canada commended the Federal Minister of the En ironment fo r tabling new legi lation, which will allow Canada to more fo rcefully protect its marine environment from pollution. The WWF - Canada ha been ignificantly involved in supporting re earch, rai ing awarene about thi important con er ation i ue and advocating fo r its re olution.
4.8.3 Prevention of Oiled Wildlife - POW Project
In the pa s everal year , per onnel in the ewfoundland Region of DFO/CCG have taken the initiative to addres the chronic problem of oiled ea bird off the province' outh coa t and the Avalon Penin ula. Their project i called the Prevention of Oiled Wildlife (POW). The participants of the working group repre ent the federal and provincial governments, the offshore oil indu try, oil refinerie , hipowner , environmentali t and other intere ted groups.
The finding ofthe working group indicate that, based on available information and counts of the number of dead eabirds that drift a bore, a minimum of 60,000 to I 00,000 are killed each winter sea on. The e estimate are con idered very con ervative. Wildlife tudie conducted by Environment Canada, Memorial Univer ity and the CCG during the winter of 200 I indicate a higher mortality. Bird exposed to oil in the commercial traffic lanes - up to 35 miles off the coa t - could be as high as 300,000. There is evidence that the problem exists on a year round basi . It is most evere between December and March becau e it is estimated that ten million birds migrate to the area during winter.
The Administrator's Annual Report 2003-2004 39 hip-source Oil Pollution Fund
The P W working group ha been making progre s report to the anadian Marine dvisory ouncil, through the tanding ommittee on the nvironment, at it emi-annual meetings in ttawa. Th recommendation contained in Pha e III of the POW report, included:
• Environment Canada, Transport anada, and Fi herie and Oceans/Canada Coo t Guard cooperate regionally and nationally to enforce Canada ' laws and regulation addressing illegal hip source oil pollution by concluding and implementing app ropriate operational agreements a oon a po ible;
• Environment Canada and Transport Canada determine the adequacy of [reception} fa cilities in anada vvithin their respective mandates;
• Funding hould be increa ed fo r dedicated aerial urveillance and enforcement by re pective government department and that agreement hould be encouraged among government department to maximize efficiency of re ource . Th e potential limit of remote sen ing technology hould be examined in thi regard; • Public awarene activitie continue in partner hip with the hipping indu tr; and other relevant takeholder ;
• Examine >Vith the hipping indu II)' and other relevant takeholder incentive to encourage ound practice and deterrent to illegal di charge;
• Re pon ible government department , with the hipping indu try and non-government partner , hould work together to implement applicable recommendation of the Phase 111 report of the POW project.
The tanding ommittee on the ndor ed the recommendation a put fo rward by the working group at the o ember 2003.
4.8.4 Por·t Reception Facilitie For Onl Wa te
The provi ion of ad quate and co t- fb ti e marin a te reception facilitie nece ary fo r hip to ha an opp01tunity to di charg oil wa t legitimate( \ hit in port.
t the international le el, the [MO ha r gulation fo r the pre ention of pollution b oil. Annex I of MARPOL 73/7 require, among oth r thing , that ad quate wa t r ception facilitie be made available. anada i a ignatory to M RPOL 7317 .
Currently, Tran port Canada Marine afet (T M ) authoritie are addre ing the adequacy of reception facilitie . TCM report that a fo cu group tudying the i ue fo und that facilitie at oil terminal were adequat . TCM i de loping a n w databa e of facilitie throughout Canada, o that all port authoritie may be able to update their own infom1ation.
It is generally acknowledged that from an economic and practical tandpoint, all Canadian port reception fa cilitie have to be adequate and conveniently located to meet the ne d of the ship without cau ing undue delay. The fa cilitie mu tal o be affordable fo r all cia e of hip . There must be more incentive fo r the ship to retain oily bilge water and re idue on board for di posal in port, rather than dumping it at sea.
The Administrator intend to fo llow clo ely the progress on these i ues, becau e of the problem of chronic mystery oil pills particularly in eastem Canada.
The Administrator's Annual Report 2003-2004 40 Ship-source Oil Pollution Fund
4.8.5 National Aerial Surveillance Program (NASP)
Federal government departments and agencies are using available resources to combat oil pollution caused by passing ships. Until recently the Depatiment of Fisheries and Oceans (i.e., CCG) was the principal agency responsible for the direction and the coordination of the National Aerial Smveillance Program (NASP). On December 12, 2003, the federal government announced that responsibility for the NASP was transfened from the Department of Fisheries and Oceans to Transport Canada (i.e., TCMS). Transport Canada is, therefore, now responsible for the overall direction and coordination of the ASP.
Currently, aerial mveillance is conducted through the use of three diffe rent aircraft.Two of these are owned and operated by Transport Canada's Aircraft Services Directorate. The third is a contracted aircraft owned and operated by Provincial Airlines Limited. The ational Defense Aurora patrol aircraft al o provides surveillance. Specialized video and still cameras, computerized reporting software, remote sensing and communication instruments are fitted and utilized in various methods of detection on each of the aircraft. The computerized imaging equipment records vessel di charge and pollution sightings.
The three aircraftutil ized by the TCMS are:
• A de Havilland Twin Otter aircraft is located in Vancouver. This aircraft patrols Vancouver Island's Inner Pa sage, the Strait of Juan de Fuca and the We t Coast tanker exclusion zone, as well a the Queen Charlotte Islands;
• A de Havilland Da h - 8 aircraft is located in Ottawa. Thi aircraft patrols the Great Lakes, the St. Lawrence River, and the Gulf of t. Lawrence, Cabot Strait and the coa t of Nova Scotia, including the Bay of Fundy;
• A Beechcraft King Air 200 i located in t. John' . Thi aircraft i contracted fo r fisheries patrol off the coa t of ewfoundland. It i a! o multi-ta ked or conducts dedicated oil pollution urveillance flight .
4.8.6 Satellite Technology to Detect Oil Pollution
The atellite urveillance project called Integrated atellite Targeting of Polluter (!STOP) i an initiative undertaken by Canadian government department and agencie . It i de igned to e aluate the u efulne of atellite imagery from Canada' RADARSAT- l, a an aid in marine oil pill detection off the Canadian ea t coa t. It i a collaborative effort between the monitoring and enforcement agencies respon ible fo r control of illegal pollution activities and space technology organization - that is, Environment Canada, Canadian Coa t Guard, Transport Canada and the Department of ational Defence and with the Canadian pace Agency and RADARSAT International.
After evaluating the atellite imagery, an aircraft may be directed to "ground truth" an apparent oil slick from ships at ea. Research i ongoing to refinete chniques. The launch of RADARSAT- 2 in 2005 i expected to help further identify oil pollution. The Administrator under tands that satellite imagery has not yet been u ed as evidence in Canadian courts in oil pollution ca es.
In September 2002, an oil spill wa spotted by RADARSAT off the coast of ewfoundland. A Canadian Coast Guard surveillance aircraft later confirmed the spill. The Bahamian-registered
The Administrator's Annual Report 2003-2004 41 hip-source Oil Po//ution Fund
Tecam ea was charged fo r allegedly creating an oil lick, but the rown ub equently dropped all charge again t the hip.
r information on the high-profile Tecam Sea incident ee the OPF dmini trator' Annual Report 2002-2003 at ection 4.2.5.
4.9 Changes to the 1992 International Regi me - Impact on SOPF
4.9. 1 lncrea e in Compensation Limits
From 1989 to May 29, 1999, Canada wa a ontracting tate to the 1969 Civil Liability onvention and the 1971 JOP Fund Convention. The compen ation limit fo r each incident wa approximately 120 million. The e onvention applied to pollution damage uffe red in the territory - including the territorial ea - of a tate Party to the re pective con ention by pill of p r i tent oil from oil ta11ker .
On May 29, 1999, Canada became a ontracting tate to the 1992 i it Liability Con ention and the 1992 lOP Fund on ention. The comp n ation limit per incident increa ed to approximately 270 million. nder the 1992 i it Liability and the 1992 lOP Fund on ention, the geographical cope i wid r with the co er extended to pollution damage cau ed in the exclu i e conomic zone, or qui alent area of a Contracting tate.
On ov mber I, 2003 the limit of liability and comp n ation und r the 1992 L and 1992 lOP Fund onvention increa d by 50.37 per cent. The e increa e were adopted by the IMO legal commit! pur uant to rticle 15 and 33 of th 1992 L and the 1992 Fund Con ention re p cti ely. The increa e which r ult d in a total of appro imatel 395 million (a at pril 1, 2004) of co rage per incident fo r oil tanker pill i noted under Figure 1, ppendix D.
To illu trate (u ing a nominal alue of 2.00 to one DR), a a re ult of th amendment to the 1992 CLC th incr a ed limit of the hipowner' liability fo r incid nt cau ed by oil tanker on or after o emb r I, 2003, ar a fo llow :
(a) For a hip not xc eding 5,000 unit of gro tonnag , 4, I 0,000 DR (approximately 9 million); (b) For a hip with a tonnage between 5,000 and 140,000 unit of gro tonnage, 4,5 1 0,000 DR (approximately 9 million) Q..l.!:!§. 63 1 DR ( I ,262) fo r each additional unit of tonnage, and (c) For a hip of 140,000 unit of tonnage or o r, 9,770,000 DR (approximately 179.5 million).
A of April 1, 2004, the limit of liability of the SOPF i approximately 144 million fo r each incident. This amount is a ailable to cover oil pill in Canada from hip of all eta e -not just tanker - and not only persi tent mineral oil. A a re ult of the increa e in the limit of compensation fo r oil pollution damage under the 1992 CLC, the 1992 IOPC Fund and the domestic SOPF, the aggregate compensation available for an oil tanker pill in Canada i approximately $539 million.
The above-noted increase are unrelated to any amount of compen ation available under the Supplementary Fund - "optional" third tier, referred to fo llowing.
The Administrator's Annual Report 2003-2004 42 Ship-source Oil Pollution Fund
4.9.2 Supplementary Fund - "Optional" Third Tier
The Diplomatic Conference convened by IMO in London during the week of May 12, 2003, adopted a Protocol creating the International Oil Pollution Compensation Supplementary Fund. The most important elements of the Protocol include:
• The aggregate maximum amount of compensation available will be 750 million SDR per incident, consisting of the 1992 CLC; the 1992 Fund Convention and the Supplementary Fund. This amount represents about C 1.5 billion as compared to the current amount of C 395 million (effective ovember 2003). • The minimum receipt of one million tons of contributing oil is deemed to be received in each Conh·acting State to the Supplementary Fund. This is a new feature designed to deal with those States that normally ubmit nil reports and, therefore, make no contributions.
• The amount of annual contribution payable by a single Contracting State will be capped at 20% of the aggregate amount of annual contribution . As a result, the annual contributions payable by all other Contracting States will be increa ed pro rata to ensure that the total amount of contributions payable by all persons liable to contribute to the Supplementary Fund, in re pect of the calendar year, will reach the total amount of contributions decided by the Assembly.
• The e capping provi ion hall remain in effect until the total quantity of contributing oil received in all Contracting States ha reached one billion tons annually, or until a period of 10 years after the date of entry into force of the Supplementary Fund has elapsed, whichever occurs earlier.
• The Protocol hall enter into fo rce three month fo llowing the date that at lea t eight states have signed the Protocol without re er ation or depo ited in truments of ratification, etc., and the total quantity of at lea t 450 million ton of contributing oil ha been received by those tate in the preceding calendar year.
• The Protocol hall cease to be in fo rce when the numb r of Contracting State fa ll below e en or the total quantity of contributing oil recei ed fa ll below 350 million ton , whichever occur earlier.
The new Protocol i open for ignature by ontracting tate of the 1992 IOPC Fund, from July 31, 2003 to July 30, 2004. Pre umably, European Union countrie will adopt the third tier by becoming Contracting State to the Protocol. It appear , however, that most other Contracting States to the 1992 regime, ave Japan, will not adopt the third ti r. Most of these other Contracting tate will continue with the 1992 CLC and the 1992 IOPC Fund Convention, which has had compen ation limit increa ed a de cribed herein.
From the Admini trator' view the Supplementary Fund ("optional" third tier) may prove to be both a practical alternative - and an effective IMO re pon e-to a European COPE Fund.
From the Canadian perspective the "optional" third tier raises particular issues and challenges. Some say there i no demon trable need fo r compensation levels beyond the IOPC limit already available with the increa e in compensation limits. However, the que tion of whether or not Canada should become a Contracting State to any IOPC optional third tier is for Cabinet to decide. If uch is propo ed it would undoubtedly be preceded by broad consultations with governmentdepartments, agencies and Canadian indu tries.
The Administrator's Annual Report 2003-2004 43 hip-source Oil Pollution Fund
For additional information about the upplementary und - IOP "optional" third tier, see the OPF dmini trator' Annual Report 2000-2001 and 200 1 -2002 at ection 4.5.3 and 4.6.2, re pe tively.
4. 10 Flag State and Port State Control
The fl ag tate i the tate of the fl ag that the hip flie . When a ovemment accept an IMO onvention it agree to make it part of it own national law and to enforce it ju t like any other law. The problem with flag tate implementation i that ome countrie lack experti e, experience and re ource to do thi properly.
Pre relea e i ued by the ecretariat of the Pari Memorandum of Under tanding on Port State Control contain the fo llowing note to editor :
Port State Control i a check on vi iling fo reign hip to ee that they comply with international rule on afe ty, pollution prevention and eafarer living and ·working condition . It i a mean of enforcing compliance where the owner and flag Stale have fa iled in their re pon ibility to implement or en ure compliance. The port State can require defect to be put right, and de tain the hip fo r thi purpo e, if neces ary. It is therefo re a! o a port State ' defence again f ''i iting ub tandard hipp ing.
Regional Port fate ontrol wa initial d in I 9 2 ll'hen fo urteen European countrie agreed to co-ordinate their port tate in pection effo rt under a volunfal)' agreement known a the Pari Memorandum of Under tanding on Port State Control (Pari MOU). urrent member hip include 13 E countrie plu Canada, Croatia, Iceland, Poland, onvay and the Ru ian Federation, Th e European Commi ion, although not a signafOI)'to the Pari MOU, i a/ o a member of th Committee.
Under the agreement each count1y undertake to in peel 2 5% of individual fo reign flagged hip vi iting their port , to pool in pection information and harmoni::::e procedure . The co-ordinated effo rt r ult in in pection coverage of 90 °/o to 1 00°/o of individual hip vi iting the region.
The Pari MO U ha been a blueprint fo r the introduction of regional regime of port Stale control in the A ia Pacific Rim (Tokyo 10U), Latin America (T i_a del Mm), the Mediterranean, Caribbean and other emerging regional pori Stale control regime . Canada and Ru ia are member of both the Pari and the Tokyo MO U.
For more information about th Pari MOU on Port tate Control ee the Intern t Web ite: www.pansmou.org
4.1 1 The PolJuter Pays
Section 51 MLA makes the shipowner trictly liable fo r oil pollution damage cau ed by hi ship and fo r cost and expenses incuJTed fo r clean-up and preventive measure .
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provided in the MLA, in the first instance, a claimant can take action against a shipowner. The Admini trator of the SOPF is a party by statute to any litigation in the Canadian courts commenced by a claimant against the shipowner, its guarantor, or the 1992 IOPC Fund. In such e ent, the extent of the SOPF's liability as a last resott is stipulated in section 84 MLA.
The SOPF can also be a fund of firstresott for claimants under section 85 MLA .
On settling and paying such a section 85 claim, the Administrator is, to the extent of the payment to the claimant, subrogated to the claimant's rights, and subsection 87(3) (d) requires that the " ...Administ rator shall take all reasonable measures to recover the amount of payment to the claimant fromthe owner of the ship, the International Fund or any person liable .... "
In thi process, the Administrator has to handle the claim twice, firstly with the claimant, then with the shipowner/person liable in a recovery action.
The Administrator notes that, as normal, in the cases of several incidents the claimant, primarily the CCG has, during the fi cal year, elected to fi rst claim directly against the responsible shipowner. Sometimes thi leads to claimants negotiating and settling their claim with the polluter' directly, with or without SOPF intervention as may be nece sary. Other times the shipowner i not f01thcomingand the claimant mu t resort to the SOPF.
In the interest of expediting satisfactory claim and recovery settlement the Administrator encourages such direct claim action by claimant where appropriate .
. B.: In reality, the notion that the polluter pay is subject to the important caveat that the shipowner i entitled to limit hi liability. The hipowner i deprived of the right to limit his liability only if it i proved that the pollution damage re ulted from the hipowner's personal act or omission, conunitted with the intent to cau e uch damage, or reckles ly and with knowledge that uch damage would probably re ult. Thi new te t makes it practically impos ible to break the hipowner' right to limit liability.
The Administrator's Annual Report 2003-2004 45 hip-source Oil Pollution Fund
The Administrator's Annual Report 2003-2004 46 Ship-source Oil Pollution Fund
5. Outreach Initiatives
5.1 General
The Adminish·ator continues with outreach initiatives with a view to enhancing his understanding of the perspective of the parties interested in Canada's ship-source oil pollution response and compen ation regime. In Canada, these include citizens, ROs, DFO/CCG, TC, EC, CMAC, CMLA, the marine industry, other fe deral and provincial government agencies and departments, and various non-governmental organizations.
On the international scene discussions were held with representatives of various organizations, including ITOPF, OCIMF, CEDRE, MARE-DASM, P&I Clubs, USCG, US Dept. of Commerce OAA), US Dept. oflnterior and the US EPA.
5.2 Regional Environmental Emergency Team (REET)
The Administrator pa1iicipated actively in the Atlantic Regional Environmental Emergency Team (REET) meetings held in Halifax, ova Scotia, on ovember 26 and 27, 2003.
Mr. Roger Percy (Environment Canada) chaired the meetings and approximately 140 people were in attendance. They repre ented fe deral and provincial departments and agencies, the response organizations, port authoritie , environmental association , the media, the Canadian offshore petroleum board , the oil indu try and other non-gov rnment organizations intere ted in the marine environment.
The meeting in Halifax celebrated the 30111 anniver ary of the Atlantic Regional Environmental Emergencie Team. It featured per pective on oil pill incident , technology, counter-measures, le on learned, and cri i communication during the thirty year of the Atlantic REET's exi tence. Several work hop were offered prior to the REET meeting, namely:
• A Shoreline Cleanup and e sment Technique ( CAT) Cour e, led by Dr. Ed Owen , Owen Coa tal Consultant
• An Oil Spill Di per ant Cour e: Di per ant Planning and Re pon e on Canada' Ea t Coast, led by Dr. Ken Trudel, SL Ro Environmental Research
• A Hazardou Material Per anal Protective Equipment Cour e, led by Dr. Merv Fingus, Environment Canada.
By way of background, the REET organization is comprised of repre entative from fe deral, provincial, first nations, municipal and other agencie , a nece ary. Environment Canada, a the federal authority for environmental advice during a pollution incident, normally chairs REET. This body is respon ible fo r providing con olidated environment and scientific information during the course of respon e operations. The contingency plans of REET contain a basic framework to ensure that all partners work together efficiently. The e plan are also integrated with the emergency plans of other government departments. REET provide the CCG and/or the polluter's On-Scene Commander with advice respecting weather foreca t. In addition, information is made available on the physical operating environment, spill movement and trajectory fo recast. This as i tance by REET to the On-Scene Commander during an incident can
The Administrator's Annual Report 2003-2004 47 hip-. ource Oil Pollution Fund make a major diffe rence in the re pon e to the incident. R ·T may approve the u e of chemical di per ion and other horeline treatment.
There were everal pre entation on marine legi lation and enforcement power within the boundari of the 12-mile territorial ea and the 200-mile exclu i e economic zone.
Profe or Phillip aunder (Dalhou ie Law chool) reviewed the juri diction over hip- ource pollution under the United ation Convention on the Law of the ea ( CLO 1982). He poke about the tructure of zone namely, the territorial ea, the contiguou zone, and the exclu ive economic zone. He provided an outline of the relevant juri dictional entitlement within the zone by both coa tal tate and fl ag tate .
Profe or aunder explained that the Law of the ea create general dutie applicable aero ariou zone including inter alia an obligation to protect and pre erve the marine environment, an obligation of flag tate to en ure ve el ' compliance with international tandard and law adopted in conformity with them, and an obligation of the e fl ag tate to in e tigate iolation . In hi ummary, Profe or aunder explained that the CLO 19 2 regime i not one of unlimited coa tal tat power . Th re are re triction on enforcement power in the exclu ive conomic zone and e en in the territorial ea. On th other hand there i increa ed recognition of p01t tate enforcement.
cily trickland ( t wart McKel ey tirling cale ) pre ented a further per pecti eon coa tal tate juri diction over hip- ourc pollution. he pok about how international law concerning hip- ource marine pollution pertain to anada. he ummarized that wh n Canada ha ub cribed to international convention pertaining to hip- ourc marine pollution, anada i bound by th t rn1 of am a incorporated into anadian law. trickland explained that with regard to anadian dom tic legi lation, th r i a proliferation of fe deral legi lation and regulation dealing with ariou a pect of marine pollution. Thi legi lation includ the:
• Canada hipping ct • anadian Environm ntal Prot ction ct, 1999 • Fi herie ct • Migratory Bird on ntion t, 1994 • rcti Pollution Pr ntion • Oc an • ewfoundland tlantic ccord Impl m ntation ct • anada- o a otia Off:hore Petroleum Re ource ccord Implementation ct • Canada Water ct • ational Energy Board ct • Canada Marine Act • Fi hing and Recreational Harbom Act • Marine Liability Act • Other tatue having a limited role in the regulation of marin pollution a well a some provincial tatues purpOtiing to apply to th offshore or otherwi e.
Which piece of legislation will apply to any gi en marine pollution incident or potential incident will depend upon everal fa ctors including:
• The location of the pill or discharge; • The object from which the pollution has escaped;
The Administrator's Annual Report 2003-2004 48 Ship-source Oil Pollution Fund
• The activity the object was engaged in at the time of the discharge; • The type of pollutant.
5.3 Newfoundland and Labrador Environmental Industry Association (NEIA)
The Administrator participated actively in an oil spill waste management workshop hosted by EIA in St. John's on ovember 20 and 21, 2003. The workshop focussed on the handling of oily waste from marine spills. The European experience in response to the Prestige incident highlighted once again that oil spill waste management is a critical component of an effective response strategy. EIA representatives had visited Spain for first-hand observations of the cleanup operations, and for discussions in Europe with various entities involved. The handling and di posal of accumulated waste oil materials present significant challenges for government and industries to find olutions to environmental concerns, reduce cleanup costs and address liabilities.
The Administrator participated a a panel member of a session on the responsibility, liability and long-term management and effects of ship-source oil spills. Other panel members were Ms. Cecily Strickland, Solicitor (Stewart McKelvey Stirlings Scales) and Mr. Christopher MacKrill, Claim Executive, Gard Service AS P&I Club. This session addressed the liabilities of a responsible party in an oil spill ituation, the role of protection and indemnity in urers, and the role of the Ship-source Oil Pollution Fund and the IOPC Fund in a ship- ource oil pollution incident.
The panel outlined the complex and overlapping Canadian legislative regime, which prohibits polluting or de truction of the marine environment. The presenters described the obligations of shipowner and other to pre ent, prepare fo r, and re pond to oil spills. The role of a protection and indemnity insurer regarding hip- ource oil pollution ri k and re pon es to spills were di cus ed, including coverage. Thi di cu ion encompa ed liabilitie , lo e , damages, costs and expen e of third partie when they are cau ed, or incun-ed, in con equence of the di charge, or e cape of oil from the in ured ve el. AI o covered were the co ts of measures rea onably taken to avoid or minimize the pollution and pollution damage.
The Administrator a\ o poke about the origin and current operation of the Ship-source Oil Pollution Fund and the IOPC Fund fo r compen ation fo r pollution damage. He explained the heads of claim , and the claim handling proce including inve tigation, assessment, payments and recoverie .
The issue of waste handling and di po at wa a central theme during the e discussions. It i understood that Environment Canada and the Province of ewfoundland and Labrador are collaborating on an initiative to take the fi r t steps in implementing wa te handling procedures fo r oil spill incident . The organizing committee of NEIA fe els that olid recommendation resulting from the oil spill waste management conference proceedings will contribute to this inter governmental initiative.
The Administrator's Annual Report 2003-2004 49 hip-source Oil Pollution Fund
5.4 Canadian Marine Advisory Council (National)
The anadian Marine Advi ory ouncil ( MA ) held meeting in Ottawa from May 5 to 8 and o mber 3 to 6, 2003. The Admini trator and con ultant attended some of the e meeting . The dmini trator fo llow with great intere t the ongoing di cu ion and fi nding of the Standing ommittee on the nvironment. Of particular intere t to the Admini trator is the im portant information provided by the tanding ommittee about the chronic problem of oiled wildlife cau ed by the illegal di charge of oily machinery wa te at ea. Other item of intere t are the u e of atellite imagery from RADARSAT to complement the ational erial urveillance program, and the recommendation of the Shipping Federation of Canada addre ing illegal di charge .
The tanding Committee di cu ed the i ue of oiled eabird cau ed by marine oil pollution. The Working Group on Marine Oil Pollution noted that the hip ource Marine Pollution Action Plan and the Interdepartmental Memorandum of Under tanding Oil Pollution remain before the Mini trie ofTran port, Fi herie and Ocean and Environment anada.
The Working Group on Marine Oil Pollution wa given a pre entation on the current progre of the Integrated atellite Tracking of Polluter (I TOP) u ing R D R T. They were al o inform d about a rial urveillance activitie in other countrie and a ailable ur eillance technologie . Under the TSTOP project, R D R T imagery i u ed to direct aircraft to u piciou anomalie . urr ntly, turnaround time to interpret imag ry and direct aircraft i about I to 1.5 hour . From thi , three out of ten anomalie ha e been confirmed by aircraft to be oil pollution from hip . Ongoing work to refine technique and the launch of R D R T-2 anticipated in 2005 are expect d to lead to fu rther impro ement in id ntifying oil pollution. It wa indicated that at llite imagery ha not et b en u ed a idence in oil pollution ca e in anadian cou1i .
The Working Group di u ed ariou i ue including multita king aircraft, ad anced aerial ur eillance n or y t m , the po ibilit of baring R D R T imagery for managing fi herie activitie and oft:hore oil op ration , and at llite ba d p ctrometry.
The Canadian oa t Guard pro ided an o er iew of currently a ailable ur eillance equipment and other r mote en ing te hnologie in fifteen European countri , and in the United tate and Au tralia. pparently, th e countrie ha e equipped their ur eillance aircraft with ide Looking Airborne Radar ( L R). The L R can id ntify oil during day or night operation . L R i acknowledged int rnationally a the mo t important piece of airborne equipment fo r oil detection. The Canadian urveillance aircraft are not fitted with the L R equipment. The Coa t Guard i , however, eeking approval and funding to upgrad it remote en ing equipment.
The tanding Committee on the En ironment endor ed the iew that the :fl deral go emment explore opportunitie to improv marine pollution urveillance in Canada. Thi include the refinement of RADAR AT, acquiring aerial ur eillance en or technology, and increasing flight hour and coverage.
Transport Canada reported on a recent ucce fu l pro ecution of an oil relea e in the Port of Halifax by the M V. Cala Palamo . Following the initial report after the hip' departure, Transport Canada requested assi tance from Cuban authoritie who ampled oily bilges from the ship and sent the samples to Canada. Environment Canada analy i detennined a high probability of a match to oil fo und in the port and from nearby oiled bird .
The Administrator's Annual Report 2003-2004 50 Ship-source Oil Pollution Fund
On June 23, 2003, the Cola Palomas pleaded guilty in Nova Scotia Provincial Court to charges related to the illegal discharge of waste atid failure to notify authorities. The vessel was fined 100,000.00. Transport Canada said that this was the largest fine for a spill that occurred in a port.
On April 3, 2003, the ship's P&I Club paid the Canadian Coast Guard $80,000.00 in full and final settlement for clean-up costs and expenses.
ote: For further information on the Cola Palomas incident see the SOPF Administrator's Annual Report 2002-2003 at section 3.42.
The Standing Committee on the Environment received an update on the Prevention of Oiled Wildlife project undertaken by the Newfoundland Region of DFO/CCG, which was implemented to address the chronic problem of oiled eabirds off the Province's south coast and Avalon Peninsula. It was noted that beach surveys have increased and public awareness material has been developed, including radio announcements. The Coast Guard i conducting an oil spill risk asse ment for the southern coast of ewfoundland. Also, Environment Canada is examining the available data to support a po sible proposal to the International Maritime Organization to establish a Particularly Sensitive Sea Area on the East Coast.
ote: For additional information about the Prevention of Oiled Wildlife Project see the SOPF Administrator's Annual report 2002-2003 at section 5.2.
5.5 Canadian Marine Advisory Council (Arctic)
The Admini trator attended the Canadian Marine Advi ory Council - orthern (CMAC - orthern) meetings in Quebec City on April 15 and 16, 2003. He wa al o invited to participate in the CMAC meeting held in Hay River in the fa ll. The participant at the e meetings represent fe deral and territorial go ernment and a range of operator from the northern marine shipping industry. Di cu ion are co-chaired by repre entative of Fi herie and Oceans, CCG Central and Arctic Region, and Tran poti Canada' Prairi and orthern Region.
At the CMAC orthern meeting the CCG provide an update on the implementation on the Arctic Re pon e trategy. The trategy wa fo nmllated in 1999 after an extensive consultation process with other fe deral department , the territorial governments, and commercial marine transportation indu trie . The trategy i de igned to ensure that an effective re ponse capability is in place to re pond to marine pollution incident in the Canadian Arctic, becau e under the pre ent y tem there i no certified Re ponse Organization (RO) for waters north of 60° latihtde.
In the Canadian Arctic, hipowner do not need to have a contractual arrangement with a certified RO fo r oil pill clean-up. Con equently, the CCG has overall re pon ibilitie for preparednes and respon e in all Canadian Arctic waters.
During the CMAC meeting in Quebec City, discussion on re-assessment of the current Arctic Respon e Strategy focu ed on several aspects: Fir t, the requirements fo r strong community based dialogue and active stakeholder participation across the northern territories in the process for developing an Arctic marine oil pill contingency plan. The plan must clearly define the role and responsibility of each organization that may be called upon. Second, there are particular areas of risk that may exceed the existing respon e equipment cache located throughout the Arctic.
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urrcntly, plan are to ca cade in equipment a may be needed during an incident. Discussion en ued about the advantage of having equipment containerized at outhern depot and always ready fo r tran potiation otih.
The dmini trator under tand from attending the orthern MAC meeting that pre ently the entral and rctic Region (C G) ha lo t some of the momentum fo r thi program, since it inception in 1999. A a re ult of thi ituation, the Region' En ironmental Re pon e Branch report that it will undertake an in-depth review of the Ar ctic Respon e trategy and the implementation trategy early in the fi cal year 2003-2004. Thi review i intended to erve a an a e ment of the plan ' theory again t the reality of implementation. It i expected that the recommendation of the review will provide new guideline , and adju tment to the current implementation trategy.
At the MA meeting held in Hay River on o ember 1 and 19 2003, the i ue wa further di cu ed. The oa t guard reported that it ha completed it national contingency plan , and that it i providing fu rther on- ite training opportunitie fo r communitie throughout the Arctic. Patiner hip are acknowledged a a key component fo r a long-tem1 u tainable re pon e y tern.
It i clearly recognized that in an e ent of a ignificant oil pill in the rctic, it will be challenging to deliver appropriate equipm nt on a timely ba i from large torage ite outh of 60 degree .
5.6 Regional Advisory Council on Oil Spill Response
The dmini trator attended th wfoundland and Labrador Regional d i ory Council (RAC) public meeting held December ", 2003 in t. John' .
The RA on oil pill re pon e are e tabli hed under the Canada hipping Act to ad i e and make recommendation to the Mini t r of Fi h rie and c an . urrently, there i a RAC in each of th ix DFO/ G region . Th e oun il ar appointed b , and r port to the ommi ioner of the anadian oa t Guard. ach i ompri d of a rna imum of e en member . G n ral 111 eting are held emi-annuall and upplemented b teleconference a required. There i al oat lea t one fo rmal ad tii ed public meeting p r ear. The primary role of the RAC i to pro ide ad ice on pecific regional i ue that affect pollution pre ention and the level of oil pill prepar dne and r pon e. Th R gional ouncil repre ent the communitie and local intere t potentially affected by an oil pill in a geographic area.
Di cu sions during the meeting in t. John' included:
• An overview of the Canadian Oil pill Re pon e Regime; • Coastal Zone Management; • Pre entation and di cu ion panel on the Pre tige incid nt off the coa t of Spain; • The Ship-source Oil Pollution Fund.
Mr. Larry Crann, CCG ewfoundland Region, gave a presentation on hi vi it to the ite of the Prestige incident. The purpose of the mission was to observe the clean-up operations at sea.
The Administrator's Annual Report 2003-2004 52 Ship-source Oil Pollution Fund
He aiTi ed in La Rochelle, France on January 13, 2003, and embarked a Norwegian offshore upply vessel Far Scout and depa1ied the next day for fi ve days of open sea recovery operations in the Bay of Biscay. This major offshore oil recovery operation during the Prestige incident was conducted by ve sel from Spain, Belgium, Denmark, France, Germany, Italy, The Netherlands, Norway, Portugal and the United Kingdom. The response, which was probably the biggest international effort of its kind ever mounted, was hampered by severe weather and by the inability of those vessels that lacked cargo-heating capability to discharge recovered oil. The open sea recovery operation reportedly removed almost 50,000 tonnes of oil-water mixtme. As so often in major spills, disposal of recovered oil and contaminated material posed a major problem.
Mr. Crann summarized the main observations and lessons leamed dming his mission as follows:
• The oil involved was heavy fuel oil and a challenge to recover; • Heated tanks onboard the recovery vessels are needed; • Vessels must be able to decant the recovered water overboard; • Dedicated oil recovery tanks on board ship and on shore are needed to receive the recovered oil; • Acce to a refineryto recycle the recovered heavy oil i important; • Trained crews are required to operate the specialized recovery equipment;
• All recovery equipment mu t be of a type able to recover heavy fuel oi I type; • ot all skimmers were suited fo r recovery of the heavy fuel oil;
• The type of recovery equipment i important;
• Transfer pump and other equipment on shore must be able to handle heavy fuel oil when offloading the recovery ve el .
The bigge t le on teamed from this incident i that countrie hould identify places of refuge fo r lightering operation for a ve el in trouble.
The Admini trator inf01med the participant about ome of the unique fe ature of the SOPF and re ponded to que tions. He mentioned that the public meetings of the RAC are excellent opportunitie to explain the compen ation regime to players and citizen alike. The RAC i an appropriate forum, becau e many people do not know about the Canadian and International Funds. He noted, a! o, hi impre ion that there i much con tructive independent thinking in ewfoundland and Labrador on environmental protection, which i e entia] fo r sustainable development.
5. 7 Response Organizations and CCG Equipment Facilities
While attending the meeting of the Regional Advisory Council in St. John's on Oil Spill Response the Administrator visited the ECRC facility in Donovan's Industrial Park. The ECRC depot has a high response capability at the Tier 3 level (2,500 tonne ) within 18 hours after notification of an oil spill. It compri es a mix of specialized oil spill response equipment to meet the capability fo r which it is certified. The inventory includes booms, skimmers, boats, sea-trucks, containment barges and other storage tanks fo r recovered waste oil. There i also a large amount
The Administrator's Annual Report 2003-2004 53 hip-. ource Oil Pollution Fund of h r line clean-up equipment and mobile command communication unit . The personnel of the R entre work clo ely with fe deral, provincial, local authoritie and variou sectors of the oil indu try.
The dmini trator at o vi ited the CG's environment re pon e equipment torage facility in t. John' that maintain a large stockpile of clean-up equipment and containment barge and auxiliary equipment to contain and recover oil at sea or from beache .
The quipment u ed in offshore operation by CCG per onnel i by and large, tandardized aero s th country. Thi tandardization reduce training requirement . It provide fo r deployment of re ource to react to pill anywhere in anada.
The Admini trator i intere ted in continuing the ongoing co-operation and relation hip with the Re pon e Organization and the oa t Guard in all region of Canada. He fully appreciate that their re pective role and re pon ibilitie regarding oil pill pollution prevention preparedne and re pon e are e entiat part of Canada' national y tem for protection of the marine environment.
ote: For addition information about the Re pon e Organization 111 anada ee the OPF Admini ti·ator' Am1ual Report 200 I -2002 at ection 5.4.
5.8 Rendez-vous 2004 - Quebec
The Admini trator prepared a pre entation which wa delivered at the econd ympo 1um on mergency R pon e in the Marine En ironm nt h ld in Qu b c ity on pril 6 and 7, 2004.
The purpo of the conference organized by the Queb region of the anadian oa t Guard wa to exchange know! dg about t chnologi in en ironmental int rvention and to re iew health ri k r lated to ariou type of oil pill . I o, ca e tudie were di cu ed with th 130 people in attendance. The participant r pre ented tl deral and pro incial in titution , a ell a the private ector. They were from ent rpri p cializing in th handling of hydrocarbon , hipowner maritime law firm , and voluntary group .
The Admini trator' pre entation co ered th creation and principal element of Canada' hip- ource Oil Pollution Fund. The pre entation addre ed the role of the OPF in re pect to oil pill from all eta e of hip operating in Canadian water , including the t. Lawrence Ri er y tem and other interior lakes and waterway . He explained that the re pon ibilitie and dutie of the Admini trator include the authority to offe r compen ation to claimant fo r whate er portion of a claim the Admini trator find to be e tabli hed and, where a claimant accept an offer, the Admini trator direct payment to th claimant out of the OPF. E ery claim fo r compen ation i a ses ed thoroughly on the ba i of the ubmitted documentation and upp01tinge idence.
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Other pre entations are ummarized fo llowing:
5.8.1 Segmentation des Rives: Sonia Lafo rest - Environnement Canada Vincent Martin - Societe d'intervention maritime pour l'est du Canada (SIMEC)
These speakers explained the methodology they cunently use to facilitate a survey of a shoreline impacted by oil. The surveys provide infonnation on the physical fe atures of the shoreline as well as the types of coasts, tides, and limits of accessibility. This sort of data greatly assists in operational planning by speeding-up the decision-making process and mobilization of resources, patticularly in sensitive areas.
5.8.2 Programme d'actions communautaires: Eve Deshaies - Securite civile du Quebec Lucie Page - Garde cotiere canadienne
The e representatives of the Quebec Civil Security and the Canadian Coast Guard spoke about their joint partner hip program for community action during an oil spill incident. Its purpose is to establish administrative and operational processes fo r communities situated on riverbanks and horeline . The objective of the Program of Community Action is to promote the principles of integrated management practice at the municipal, provincial, fe deral and indu try levels when deploying volunteer for horeline cleanup.
5.8.3 Centre de documentation de recherche et d'experimentation sur les pollutions accidentelles des eaux (Cedt·e-France): Christophe Rousseau - Directeur-adjoint du Cedre
M. Christophe Rou eau, Deputy Admini trator, from the centre de documentation de recherche et d'experimentation ur le pollution accidentelle de eaux (CEDRE) in France, spoke about the activitie of CEDRE. Thi quasi-governmental organization i well known in France fo r its experti e on oil pill at ea. Over the year , France ha experienced many incidents of oil pollution along it coastline. More recently, the oil pill from the inking of the tanker Erika and Prestige have re ulted in CEDRE making major contribution to improve techniques u ed fo r prevention and recovery, including waste management and di posal.
5.8.4 Sante Communautaire: Pierre Lainesse - Ministere de Ia sante publique du Quebec Dr. Marc Rhainds - Ministere de Ia sante publique du Quebec
Dr. Marc Rhainds explained that the board of public health of Quebec i interested in the risks related to petroleum products. He talked about the toxicity of oil, its by-products and bad effects on human health from toxic vapors. The expo ure to oil products is in general a serious issue of public health. He explained that one must not under e timate the importance of this issue and apply all rules concerning afety in case of an oil spill.
The Administrator's Annual Report 2003-2004 55 hip-source Oil Pollution Fund
5.8.5 Con eil consultatif regional: Marc Hudon, President du Conseil
Mr. Hudon explained the role of the Regional Advisory ouncil (RA ) fir t e tabli bed in I 995. uch ouncil make recommendation to the Mini ter of Fi herie and Ocean and report to the ommis ioner of the anadian Coast Guard on issues related to the regime and the trategy of preparation fo r environmental intervention. The purpose of e tabli hing the e council wa to improve the effectivenes of emergency re pon e in the marine environment.
5.8.6 Programme national d'exercices: Lucie Vezina - Garde d>tiere canadienne Vincent Martin - SIMEC Marcel Ricard - DDH En ironnement
These pre enter de cribed the national training program developed jointly by the Canadian Coa t Guard and industry to provide training fo r emergency re pon e per onnel. They explained that the purpo e of the program i to tandardize training method and improve the efficiency of clean-up operation . AI o, it a i ts in the development of emergency plan and other important a pect of intervention during an oil pill incident.
5.8.7 Genie Web: Claude Ri et - En ironnement Canada
Mr. Rivet explained that Genie Web i a computerized program developed and u ed by Environment Canada and it partn r to identify the en iti ar a of a region touched by hydrocarbon . lt i a tool fo r management of en ironmental information. The purpo e of the y tern i to optimize re ource during an incid nt and to g t a global iew of the en ironmental prioritie .
5.8.8 Union Quebecoise de rehabilitation de oi eaux de proie (UQROP): Martin Lavoie - UQROP
Mr. Lavoie xplained that · QROP inter ene In emergenc ituation in order to afeguard certain bird affected by the impact of an incident and to prot ct endangered pecie . The organization i charged with the management of the per onnel and the e tabli hment of the infrastructure in the fi Jd during an incident. In Quebec there are e en r gional c ntre fo r rehabilitation of fa una: olleg McGill a te- nne de B II ue, Ia fa culte de medecine veterinaire de St-Hyacinthe, le FAPAQ a icolet, Pare anada au Cap Toum1ente, !'in titut Maurice Lamontagne a Ste-Flavie, au centre a ept-lle et Pare Canada a Forillon. The futur challenge of UQROP con ist in creating permanent infra tructure along with pecialized manpower at the veterinary chool of t-Hyacinthe.
5.8.9 RADARS AT : Yves Crevier - Agence spatiale canadienne
Mr. Crevier explained that RADARSAT is used to monitor Canadian water and as i t in the detection of illegal oil spills. At the ame time, it should be a deterrent against intentional pollution of the marine environment.
The Administrator's Annual Report 2003-2004 56 Ship-source Oil Pollution Fund
5.8. 10 Intervention dans les glaces: Pierre Samson - Societe d'intervention maritime pour I' est du Canada (SIMEC)
Mr. Samson explained that SIMEC is a specialized organization in environmental intervention and cleanup of the shorelines. SIMEC (ECRC) is one of Canada's Response Organizations. Mr. Samson addressed particular problems associated with oil spills in ice -covered waters. He outlined the best procedures used to recover oil in such conditions.
5.8.1 1 Spillview : Martin Blouin - Garde cotiere canadienne
Mr. Blouin explained that the Canadian Coast Guard in collaboration with the University of Quebec in Rimouski and Maurice Lamontagne Institute of Fisheries and Oceans Canada, has developed a software program fo r modeling the potential driftand h·ajectory of an oil spill.
5.9 International Conference on Marine Resource Damage Assessment (MARE- DASM) - Liability and Compensation
The Administrator wa invited to participate in the International MARE-DASM Conference hosted by the Maritime In titute and Faculty of Law at Ghent University, Belgium, on June 12 and 13, 2003.
The various pre entations and workshops during the international conference addressed issues, such as:
• Trade off between ecologic and ocio-economic factors in the Belgian part of the orth Sea; • Ecological damage and the law; • International and regional fund fo r pollution damage.
The Admini trator pre ented a paper on the SOPF and on cun-ent developments in environmental damage a e ment (EDA) in Canada. He informed the conference that l971 amendment to the Canada Shipp ing Act (C A) enacted into law one of the fir t national comprehensive regime fo r oil pill liability in the we tern world. This new legislation included the creation of Canada's first national Fund - the Maritime Pollution Claim Fund (MPCF). Thi Canadian law predated the entry into force of the 1969 Civil Liability Convention by more than fo ur years and the 1971 Fund Convention by more than even year . Sub equently the OPF wa created on April 24, 1989, by amendments to the CSA. It succeeded the MPCF. The current statutory claim regime is found in the Marine Liability Act (MLA) S.C. 2001, c.6. The MLA, which came into force on Augu t 8, 2001, continues the regime that wa previously fo und in the CSA.
The Administrator discussed the role of the Administrator of the SOPF re pecting oil spills (including per istent and non-persistent oils) from hip of all classes operating in Canadian waters, including Canada' EEZ. His presentation al o included an outline of the current limits of liability and compensation fo r oil tanker pill in Canada. The organization and etup of the SOPF and its relationship with the International Funds were addre ed.
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nique fe ature of anada' national Fund ( OPF) include the paying of claims regarding spill of per i tent and non-persi tent oil from hip of all cia e,a well a my tery pill .
The dmini trator referred to ignificant development in environmental damage as es ment (ED ) taking place in anada. The Atlantic Region of Environment anada i currently at the fo refront of the e development . DA i important in promoting judicial award to Environment anada' pecial Environmental Damage Fund fo r violation of qua i-criminal fe deral legi lation. uch legi lation includes the A' Pollution Prevention Regulation the Canadian Environmental Protection Act (CEPA), the Fi heries Act and the Migratory Bird Convention Act, etc.
With re pect to the eparate topic of civil liability for environmental damage, the Admini trator noted that it i mooted by ome in anada that the definition of oil pollution damage in the MLA appear ufficiently broad to allow the Admini trator of the OPF to entetiain hip- ource claim for environmental damage for a lo not tied to ome identifiable economic con equence. In re pon e, other argue that in light of the particular tatutory provi ion re pecting liability fo r the co t of rea onable mea ure of rein tatement actually undertaken or to be undertaken, it is quite clear that the a ment of compen ation made on the ba i of an ab tract quantification of damage calculated in accordance with theoretical model i not pro ided for under the OPF' governing tatute.
o far, neither the Canadian court nor the dmini trator of the OPF ha e con idered the meaning of oil pollution damage in the goveming tatute in thi on text.
5.10 HNS Correspondence Group - Special Meeting
The dmini trator attended a pecial con ultati e meeting of the H orre pondence Group held in Ottawa from Jun 3 to 5, 2003. Th purpo e of the meeting wa to addre i ue previou ly id ntified a requiring re olution b fo re th oming into fo re of the HN Convention and to complete th core work of th roup.
Th e ion wa attended by r pre entati of fifte n ontracting tat of the International Oil Pollution ompen ation Fund . A number of theme were di cu ed, namely:
• Inter-r lation hip between th H on ention and ariou maritime liability con ntion ;
• Shipowner 'in urance and liability i ue ;
• Definitionof recei rand HN on ention reporting requirement ;
• IOPC Fund databa e and the Korean databa e reporting y tern, and
• Progre s on implementation, and promotion of the HN Convention.
The Eight Ses ion of the 1992 IOPC A embly held in October 2003 noted that a report on the Ottawa pecial meeting had been made to the IMO Legal Committee. The paper ubmitted to the meeting are available on the Corre pondence Group' Website at: http:/ifolk.uio.no/erikro/WWW HNS/hns.html
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5.11 International Oil Spill Conference (IOSC 2003)
The Admini trator attended the "International Oil Spill Conference" held in Vancouver from April 6 to 11, 2003. The IOSC 2003 was co-sponsored by the Canadian Coast Guard and Environment Canada. The central theme fo r the conference was "Prevention, Preparedness, Response, and Restoration-Perspectives for a Cleaner Environment".
The conference provided an international fo rum for participants to discuss thoughtful and outstanding per pective on various dimensions of oil spills. One of the sessions was dedicated to Financial Issues. The International Tanker Owners Pollution Federation Limited presented a paper on the "Factors that Determine the Costs of Oil Sp ills ". The authors examined, inter alia, the technical factor that in combination give rise to a great variation between the cost of individual incidents. They note that it is inappropriate to make cost comparisons between fundamentally different oil spill events by reference to a single parameter, such as the total amount of oil spilled. It is also evident that there is no relationship between spill cost and the size of the tanker from which the oil originated. Some of the most expensive spills have been caused by relatively mall tankers.
The paper concludes that poor management can result in the mistakes of previous spills being repeated, leading to additional damage to the environment and economic resources and excessive co ts.
The conference provided an international forum fo r participants from many countries to discuss thoughtful and out tanding perspective on various dimensions of oil spill . In addition, hundreds of exhibits of material , equipment and ervice from US and fo reign companies, institutions and government agencie in olved in the manufacture, sale and u e of products of the oil industry were on di play in the conference trade exhibition.
The IOSC give the dmini trator the opportunity to continue hi contact with takeholder .
5.12 Transport Canada Marine Safety Investigators' Course
The Admini trator participated in the Transport Canada Marine Safety, TCMS, Inve tigators Cour e (Level II) held in Ottawa during the week of ovember 17, 2003. The Level II Marine lnve tigator's cour e fo r marine in pector appointed under the Canada Shipp ing Act grew out of di cu ion with the then Regional Director, TCMS, Pacific Region, Captain W.J. ash, now chairman of the Board of Steam hip In pection, Transport Canada. In light of incidents, the course tarted off a a Pacific Region initiative and then was incorporated in the National Training Program of Tran port Canada. The course was developed by the course pre enters: Captain Gavin Brown, TCMS, and legal coun el Mr. K. Joseph Spear , LL.B., a Vancouver lawyer and a local agent for the Department of Justice Canada, who i under contract to deliver the course to Transport Canada.
The cour e ha been conducted a total of five times in Vancouver, Ottawa and Halifax. The course faculty consists of legal coun el, Mr. John Young, DOJ/TC, Captain Gavin Brown, TCMS, and Mr. Joseph Spears, Spear & Company, Vancouver.
It is an intense one-week program with a mock trial that gives the attendee a realistic approach to the investigation of regulatory offences. The attendees are required to develop a pro ecution brief.
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ariou pcaker are invited to attend. The mock trial i conducted in a Federal ourt of anada courtroom. The cour e give the attendee and marine in pector a reali tic grounding in the in estigation of regulatory offence under the Canada Shipp ing Act and other applicable legi lation, including public afety violation and pollution offence .
The attendee learn how to take an alleged violation of a regulatory offence from the initial inve tigation to the preparation of a brief to be u ed by a Crown pro ecutor, and how to tetify in a court of law. Thi i achieved using real ca e example . The cour e ha had input from a variety of coun el from the Department of Ju tice.
The dmini trator previou ly poke at the cour e in Halifax - he wa re-invited to do the arne in Vancouver. At the cour e held in Ottawa, in ovember 2003, the Admini trator poke about the civil liability evidence requirement for the SOPF, a compared to the burden of proof in pro ecution under the qua i-criminal Oil Pollution Regulation made pur uant to the Canada hipping Act. The Admini trator reminded the participant that although the burden of proof i different b tween a qua i-criminal pro ecution and a civil law uit regarding an oil pill from a hip, the underlying fact neverthele remain the arne. He noted that TCM official may often be fi r t at the cene of an incident and regardle of the ucce of any ari ing pro ecution under the Oil Pollution Regulation , the e idenc of attending TC official may be aluable to the dmini trator in hi ci il action again t the hipowner fo r reco ery of compen ation paid out of the OPF re pecting the arneoil pill.
peaking to the civil liability of hipowner fo r oil pill , the dmini trator noted that ubject to the hipown r' right to limit liability the int nt of Part 6 of the MLA i : the polluter should pay. It i , therefore, important that government departm nt in truct official to act in a timely manner to obtain ati factory e idence to id ntifythe our e of a pill. Thi e idence may only be a ailable at the time of the incid nt. uch e idence i e entia! fo r the dmini trator to reco er payment made out of the OPF (part of the ac ount of anada) from the re pon ible party, in accordanc with the tatutory chem . Oth rwi , th in id nt b come a my tery pill - by default - and the dmini trator i unable to reco er from th polluter pa ment made out of the Fund.
The Admini trator would like to e pre hi appr ciation to enior official in Tran port Canada and the Department of Ju tice for their fore ight in tabli hing thi u fulcour e and continuing to recognize it importance.
5. 13 Canadian Maritime Law Association
The Admini trator attended the Executive ommittee of the anadian Maritime Law A oc1atJon (CMLA) held in conjunction with a meeting with government official in Ottawa on April 2, 2004. He a! o participated in a conferenc ho ted by the Faculty of Law, McGill Uni er ity, on April 4, 2003. The one-day conference at McGill dealt with recent development in relation to marine oil pollution. It wa held in a ociation with the A ociation of Maritime Arbitrators of Canada and the Canadian Maritime Law A ociation.
The Admini trator value his contacts with the CMLA and continue to dialogue with member .
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6. SOPF Liabilities to the International Funds
6.1 1969 CLC and 1971 IOPC
Canada first became a Contracting State to the International Conventions on May 24, 1989. These two Conventions were the 1969 International Convention on Civil Liability for Oil Pollution Damage ( 1969 CLC) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1971 IOPC Fund Convention).
Some of the major incidents involving the 1971 IOPC Fund since 1989 include Haven (Italy 1991) Aegean Sea (Spain, 1992), Braer (UK, 1992), Sea Prince (Republic of Korea, 1995), Sea Empress (UK, 1996), Nakhodka (Japan, 1997), and the Nissos Amorgos (Venezuela, 1997).
The SOPF now has contingent liabilities in the 1971 IOPC Fund for oil spill incidents prior to May 29, 1999. The SOPF will pay these as they mature. It has no responsibility fo r any adminish·ative co ts after that date.
6.2 1992 CLC and the 1992 IOPC
On May 29, 1999, Canada acceded to the 1992 CLC and the 1992 IOPC Fund Convention. These two Conventions apply only to spill of per i tent oil from ea-going tankers.
The 1992 IOPC Fund As embly decides the total amount that should be levied each year to meet general operating expenses and anticipated compensation payment in major incidents. The required levy i calculated by the IOPC Secretariat. The SOPF receive an invoice from the 1992 IOPC Fund ba ed on the calculated levy multiplied by the total amount of Canada's "contributing oil".
Under the MLA (SOPF) regulation the reporting of imported and coastal movements of "contributing oil" i mandatory by per on receiving more than 150,000 tonnes during the prevwu calendar year.
Report must be received by the SOPF no later than February 28 of the year fo llowing such receipt. In early January of each year the Admini trator write to each potential respondent explaining the proces and providing the nece ary reporting fo rm. All the completed forms are
then proce ed to arrive at the con olidated national figure that i , in tum, reported to the 1992 IOPC Fund. Currently there are 10 respondent who report. They repre ent organization in the oil (refining and tran - hipment operations) and power generation industries.
The Erika incident (France, 1999) provided the SOPF with its first test of the 1992 IOPC regime, where compen ation payable reached the 1992 IOPC limits. The SOPF payment to date to the 1992 IOPC Fund for the Erika incident amount to approximately $1 1.2 million.
The SOPF payments to the 1992 IOPC Fund for the Prestige incident may amount to approximately $11 million.
The SOPF is also liable to pay ongoing contributions to the 1992 IOPC Fund's General Fund and fo r other 1992 IOPC Fund major incidents happening after May 29, 1999. However, Canada will
The Administrator's Annual Report 2003-2004 61 hip-source Oil Pollution Fund
ha e no re pon ibility to the 1992 Fund fo r any incident or admini trative co t prior to May 29, 1999.
ince 19 9, the OPF ba paid the lOPC Funds approximately 38 million, a li ted in the table below.
6.3 Canadian Contributions to the International Funds
Thi how the "call" nature of the IOP Fund . Contribution and Ievie are driven by claim , and how they are a e ed.
Paid from the OPF Fi cal Year ($)
1 989/90 207,207.99 1 990/91 49,161.2 1 99 1 /92 1,7 5 47 .65 1992/93 714,1 0.4 1 993/94 4,927,555.76 1994/95 2,903,695.55 1995/96 2,527,05 .41 1996/97 1,111 2 .20 1997/9 5,141,693.01 199 /99 902,4 .15 1999/00 273, 07.10 2000/01 6,6 7 ,696. 71 2001 /02 2, 97,244.45 2002/03 3,2 1 9,969. 17 2003/04 �.836. I 0 .49
$38.185.1 73.40 Total
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7. Financial Summary
Ship-source Oil Pollution Fund of Canada (SOPF)
Income
Balance fo tward from March 31, 2003 $325,963,269.85 Interest credited (April 1, 2003 - March 31, 2004) 12,8 1 7,450.84
Recoveries of settlements - MLA section 87 86,53 1.82
Total Income $338,867,252.51
Expenditure
Pur uant to MLA ections 81 and 82, the fo llowing wa paid out of the SOPF:
Admini trator fe es $97,625.00 Legal services 120,637.02 Professional services 106,5 17.28 Secretarial erv1ces 50,885.43 Travel 29,502.47 Printing 15,774.00 Occupancy 70,959.00 Ho pitality expen es 202.96 Offi ce expen e 16 975.72 Total expen e 509,078.88 509,078.88
Pursuant to MLA ections 85-87, the Admini trator paid fo r Canadian claims: 2,787,92 1.40
Pursuant to MLAse ction 76, the Administrator paid to the 1992 International Fund: 4,836,108.49
Total expenditure from the SOPF $8,133,108.77
Balance in SOPF as at March 31, 2004 $330,734,1 43.74
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Appendix A: The International Compensation Regime
The International Oil Pollution Compensation Fund 1992 - IOPC - is an intergovernmental organisation established by States.
The International Conventions
The present international regime of compensation for damage caused by oil pollution from oil tankers i based on two international Conventions adopted in 1992 under the auspices of the International Maritime Organisation (IMO), a specialized agency of the United Nations. These Conventions are the 1992 Civil Liability Convention and the 1992 Fund Convention. The IOPC Fund 1992 established under the 1992 Fund Convention fo llows an earlier Fund created under the 1971 Fund Convention, which till exists but is in the process of being wound up.
The conventions have been implemented into the national law of the States, which have become parties to them.
Canada is a Contracting State in the cwTent international regime.
The CLC
The 1969 and the 1992 CLC govern liability of oil tanker owners fo r oil pollution damage. The shipowner i normally entitled to limit hi liability to an amount that is linked to the tonnage of hi ship. The ource of compen ation money comes from in urance (P&I Club).
Figure 1, Appendix D, how the limit ofliability.
Under the 1969 CLC, the hipowner is deprived of the right to limit his liability if the incident occurred a a re ult of the owner' actual fa ult or privity. Jurisprudence provides reasonable pro pect for breaking the hipowner' right to limit liability under this test.
Under the 1992 CLC, claim for pollution damage can be made only against the registered owner of the tanker or hi in urer. The hipowner i deprived of hi right to limit his liability only if it is proved that the pollution damage resulted from the shipowner's per onal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably re ult. Thi new te t make it practically impossible to break the shipowner' right to limit liability. The shipowner's limit of liability i higher in the 1992 CLC than in the 1969 CLC.
The IOPC Fund Conventions
Under the IOPC Fund Conventions, which mutualize the risk of oil pollution from tanker , the IOPC Funds pay a supplementary layer of compensation to victim of oil pollution damage in the IOPC Fund - Contracting States that cannot obtain fu ll compensation for the damage under the applicable CLC. The 1971 and the 1992 Fund Conventions are supplementary to the 1969 CLC and the 1992 CLC respectively. The source of the money is the levies on oil receivers in
The Administrator's Annual Report 2003-2004 65 hip-. ource Oil Pollution Fund
ontacting tate , collected re pectively. anada the exception, where the PF pays all anadian contribution to the IOP .
The compen ation payable by the I 97 I lOP Fund fo r any one incident i limited to 60 million pecial Drawing Right ( DR) (about $120 million), including the sum actually paid by the hipowner or hi in urer under the I 969 CLC. Effective ovember I, 2003, the maximum amount payable by the 1992 IOPC Fund for any one incident i 203 million ( DR) (about 395 million), including the urn actually paid by the hipowner or hi in urer and any urn paid by the 1971 Fund.
Figure l, Appendix D, how compen ation available from the 1992 lOP Fund.
Contracting States
Contracting tate a of December 31, 2003, to the 1992 protocol are li ted in ppendix E.
Principal Changes
In the 1992 CL and the 1992 lOP Fund on ention, the underlying principle remain. The principal change introduced by the 1992 Protocol are hown in ppendix D.
Damage covered by the Conventions
ny per on or company which ha uffe r d pollution damage in a ontracting tate of the IOPC Fund 1992 cau ed by oil tran p rted b hip can claim compen ation from the hipowner, hi in urer and the Fund. Thi applie to indi idual , bu in e , local communitie or tate .
To be entitled to compen ation, the damage mu t r ult from pollution and ha e cau ed a quantifiable economic lo . The claimant mu t ub tantiate the amount of hi lo or damage by producing accounting record or other appropriat idenc .
An oil pollution incident can gi e ri e to claim fo r damage of mainly fo ur type :
• Property damage;
• Costs of clean-up at ea or on hore;
• Economic lo e by fi herman or tho e ngaged in mariculture;
• Economic lo es in the touri m ector.
Claims a sessment i carried out according to the criteria laid down by the representative of the Governments of Contracting State . The e criteria are set out in the IOPC Fund 1992's claims manual, which is a practical guide to the presentation of claim fo r compen ation.
In a number of major cases, the IOPC Fund and the shipowner' in urer have jointly e tablished local claims office in the country where the oil spill occurred to fa cilitate the handling of the large number of claims.
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D pending on the nature of the claims, the IOPC Fund 1992 uses experts in the different fieldsto a i t in the assessment of claims.
Structure of the IOPC Fund 1992
The Assembly and Executive Committee are composed of Contracting States.
The IOPC Fund 1992, whose headquarters is in London, is governed by an Assembly composed of representatives of all the Contracting States. The Assembly holds an ordinary session every year. It elects an Executive Committee made up of 15 Contracting States. The main function of the Executive Committee is to approve the settlement of claims fo r compensation.
Organizations connected with the maritime transport of oil, such as those representing the shipowners, marine insurers and the oil industry, as well as environmental organizations, are represented as ob ervers at the IOPC Fund 1992's meetings.
The Assembly appoints a Director, who is responsible for the operations of the IOPC Fund 1992. The Executive Committee ha given the Director extensive authority to take decisions regarding settlement of claims.
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Appendix B: The 1971 IOPC Fund - Administrative Council and Assembly Sessions
The 11th Administrative Council - July 8, 2003
The eleventh session of the Administrative Council of the 1971 IOPC Fund was held under the chai1manship of the Acting Chaim1an, Mr. John Wren (United Kingdom). The Administrative Council met to consider the level of payments in respect of the Nissos Amorgos incident.
Nissos Amorgos (1997)
The Greek tanker Nissos Amorgos (50,563 gross tons) laden with 75,000 tonnes of Venezuelan crude grounded in the Maracaibo Channel in the Gulf of Venezuela. An estimated 3,600 tonnes of crude oil were spilled.
In March 200 1 the Administrative Council had increased the level of payments to 40 per cent of the loss or damage actually sustained by each claimant. It also authorized the Director to increase the level of payments up to 70 per cent, when the Fund's total exposure fe ll below US $100 million.
During the Admini h·ative Council's consideration on July 8, 2003, it was noted that the Director had not been able to increa e the level of payments since the Fund's total expo ure had not fa llen below US 100 million and no legal actions had been withdrawn. In view of the exceptional circum tances of the incident and, in particular, the economic ituation of the Venezuelan fisherman, the Admini trative Council decided to increase the 1971 Fund's level of payments from 40 per cent to 65 per cent of the loss sustained by each claimant, as proposed by the Director.
The 12th Administrative Council - October 20 to 24, 2003
Captain R. Malik (Malay ia) chaired the twelfth ession of the Administrative Council, which dealt with the agenda item , including:
Financial Statements and Auditor's Report
The Administrative Council noted that the external auditor had provided an unqualified audit opinion of the 2002 fi nancial statements. The Council approved the account of the 1971 IOPC Fund for the financial period January 1 to December 31, 2002.
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Non-Submission of Oil Reports
Many delegation expre ed their very eriou concern regarding the non- ubmi ion of oil report by a number of tate . It wa empha ized that the non- ubmi ion of oil reports was a violation of tate ' treaty obligation under the 1971 Fund onvention. The oun cil in tructed the Director to pur ue hi effo rt to obtain out tanding oil report .
Incidents Involving the 1971 JOPC Fund
Aegean Sea (1992)
The Greek OBO Aegean Sea (51 ,80 I gro ton ) grounded off the coa t of northwe t Spain. The hip wa loaded with approximately 80,000 tonne of crude oil. fter a major fire onboard the hip wa declared a total lo . Exten ive clean-up operation were carried out at ea and on hore.
The Admini trative ouncil noted that the payment of compen ation made by the 1971 Fund in re pect of thi incident totalled £33 0 6 019.
Sea Empre (1996)
Th Liberian tanker ea Empre (77,356 gro ton ) laden with I 30,000 tonne of crude oil ran aground in the approa he to Milford Ha en, outhwe t Wal . n e timated 73 000 tonne of oil were relea d a a re ult of the incident.
The Admini trative ouncil noted with ati fa ction the r cent re ult of mediation and approved the propo d ttlement, under which the Milford Ha en Port uthority' in urer would pay the 197 I Fund £20 million in fu ll and final ttl ment. Th ouncil noted with ati faction that all out tanding i u in r lation to the ea Empre incident had been re ol ed.
Alambra (2000)
The Matte e regi tered tanker Alambra (75,366 gro ton ) wa loading a cargo of heavy fuel oil in the Port of Muuga, Tallinn (E tonia), when an alleged 250 tonne of cargo e caped from a crack in the hip bottom hell plating.
The Council recalled that, in the context of legal action , the que tion had ari en a to whether the 1969 Civil Liability Con ention and the 1971 Fund Con ention had been correctly implemented into E tonian national law.
ote: For more information about the Alambra incident ee the OPF Admini trator' Annual Report 2002-2003 at Appendix B.
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th The 13 Administrative Council - February 24, 26 and 27, 2004
Mr. John Wren, Acting Chairman, (United Kingdom) chaired the thirteenth session of the Administrative Council. The agenda included:
Incidents involving the 1971 IOPC Fund
Sea Empress (1996)
The Council noted that the agreed settlement amount of £20 million had been paid to the 1971 Fund in late December 2003.
Nissos Amorgos (1997)
The Council recalled that a number of delegations had expressed concerns that the level of payment would remain at 65% fo r a considerable period of time unless a solution could be found to the outstanding claims. It al o noted that fe ar had been expressed that, unless a solution was found, the issos Amorgos incident could prevent the 1971 Fund being wound-up.
The Administrative Council instructed the Director to approach, as a matter of urgency, the Venezuelan authorities and other interested parties to search for a global solution within the framework of the Conventions of all outstanding significant issues.
The Venezuelan delegation tated that it had listened carefully to the views expressed by delegations and pointed out that it had never been the intention of the Government of the Republic of Venezuela or it national courts to act against the 1971 Fund, but it was inevitable that the Fund would become involved in the legal process. That delegation nevertheless stated that the Republic of Venezuela would do its part to try and reach an amicable global solution so a to avoid the need fo r further litigation.
Lessons to be learned from the Nakhodka Incident
The Council took note in particular of the Japanese delegation's proposal to unify the format of the claim documents other than the a e ment report , and to modify the fo m1at in the Claims Manual to fa cilitate the under tanding of the documents and the prompt claims handling. The Council also took note of the proposal to supplement the Claims Manual with examples of actual assessments to en ure uniformity in the a sessments and as ist victim in the presentation of their claims.
The Director was invited to submit a document to a future session of the Administrative Council with detailed proposals on how the Funds could implement the recommendations made by the Japanese delegation, fo r example through improvements in their internal procedures and changes to the next edition of the Claims Manual.
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Appendix C: The 1992 IOPC Fund - Executive Committee and Assembly Sessions
The Executive Committee of the 1992 IOPC Fund held four sessions during the year. The 215\ nd 22 , 23'd, and 24111 sessions were held under the chairmanship of Mr. J. Rysanek (Canada).
The 1 51 session of the Administrative Council, Acting on behalf of the i" Extraordinary Session of the Assembly, and the 81h Session of the Assembly were held under the chairmanship of Mr. W. Oosterveen (Netherlands).
The 21st Executive Committee - May 7 to 9, 2003
Incidents Involving the 1992 IOPC Fund
Erika (1999)
The Maltese tanker Erika (19,666 gross tons) broke in two in the Bay of Biscay, France, on December 12, 1999. The tanker was carrying a cargo of 31,000 tonnes of heavy fuel oil. Approximately 19,800 tonnes of oil spilled as the ship ank.
The Executive Committee noted that the Director had decided on April 25, 2003, to increase the level of payments to 100 per cent of the amount of the loss or damage actually sustained by the re pective claimants, a a e ed by the 1992 Fund and the Steamship Mutual or decided by the French courts in final judgment. The French delegation informed the Committee that French authoritie would consult with the Fund in order to proceed with the settlement of the French Government's claim, provided that sufficient fund remained after all the outstanding claims by private claimants had been ettled and paid.
Prestige (2002)
On ovember 19, 2002, the Bahamas registered tanker Prestige (42,820 gross tons) broke in two and sank 170 nautical mile we t of Cape Finistere on the northwest coa t of Spain. The tanker wa loaded with approximately 77,000 tonnes of heavy fuel oil. An unknown quantity of oil was relea ed when the ship broke in half.
The Executive Committee noted that the preliminary estimates fo r the total amount of claims give a global figure of approximately £709 million. This amount exceeds the amount of compensation available under the 1992 Conventions, approximately £1 12 million.
The Committee decided that the 1992 Fund's payments should, fo r the time being, be limited to 15 per cent of the loss or damage actually sustained by the respective claimants, a assessed by the experts engaged by the Fund and the London Club.
ote: For additional information about the Prestige incident see the SOPF Administrator's Annual report 2002-2003 at section 4.4 and at Appendix C, respectively.
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The 1st Session of the Administrative Council - May 8 and 9, 2003 (Acting on behalf of the i11 Extraordinary Session of the Assembly)
Le y of Contributions
Th Admini trative ounc il noted that a Major laim Fund would need to be e tabli hed fo r the Pre tige incident, ince the 1992 Fund's payment in re pect of that incident would exceed 4 million DR payable from the General Fund. The Council con idered the po sible sources of funding fo r the Prestige Major !aim Fund.
The Admini trative ouncil decided, a propo ed by the Director, that payment of compen ation and expen e re lating to the Prestige incident, over and above 4 million DR payable from the General Fund, hould fo r the period up to I March 2004 be financed by loan from the 1992 Fund akhodka Major Claim Fund and, if required and po ible from the General Fund or the Erika Major laim Fund. It wa noted that uch loan would be repaid with intere t in accordance with e tabli hed practice.
Pt·eparation fo r the Entry into Force of the H Con ention
The Admini trati e Council recognized that th deci ion a to the location of the HN Fund would be taken by the HN Fund embly. The ouncil in tructed the Director to continue the preparatory work on the a umption that the H Fund would ha e a joint ecretariat with the lOP Fund and would be ba ed in London. It wa recognized that the HN ould be a eparate legal entity. The oun il accordingly in tructed the Dir ctor to tud the i ue further and ubmit drafttext for preliminary examination b the 1992 Fund embly at a future e ion.
Claims Relating to Subsistence Fi hing
The Admini trati e ouncil noted that claim fo r compen ation in re pect of mall- cale fi hing activitie , including ub i tence fi hing, w r rar ly upport d b e idence a to normal level of income again t which to a e claim . In order to a i t the 1992 Fund in dealing with uch claim the Director had engaged a firm of fi he1y p ciali t to prepare Technical Guideline on method of a e ing lo e in fi h ri , aquacultur and proc ing ctor wh re e idence wa likely to be limited or totally lacking. It wa noted that the Techni al Guideline were aimed primarily at the claim taff of the Fund' ecr tariat and the hipowner in urer a well a their expert working in the field and local claim office taff. The ouncil took note of the Table of Content of the propo ed Technical Guideline and noted the were not intended to replace the Claim Manual, although like the Manual, the Guideline had no legal tanding.
Report of the Third lntersessional Working Group (Fifth Meeting)
The report of the third inter essional Working Group's fifth meeting, held in February 2003, wa introduced by the Group's Chairman, Mr. Alfred Popp QC (Canada).
The Administrative Council took note of the Working Group's report and con idered the text of a draft Resolution on the interpretation and application of the 1992 Conventions prepared by the
The Administrator's Annual Report 2003-2004 74 Ship-source Oil Pollution Fund
orking Group. The Council approved the Resolution on the interpretation and application of the 1992 Ci il Liability Convention and the 1992 Fund Convention (1992 Fund Resolution N°8).
ote: The text of the Resolution is contained in the SOPF Administrator's Annual Report 2002- 2003 at Appendix I.
d The 22n Executive Committee - October 20 to 24, 2003
Incidents Involving the 1992 IOPC Fund
Incident in Sweden (2000)
During late September and early October 2000 per istent oil landed on the shores of the two islands to the north of Gotland in the Baltic Sea and on several islands in the Stockholm archipelago. The Swedi h Coast Guard, the Swedish Re cue Service Agency and local authorities undertook clean-up operations.
The Executive Committee noted that in September 2003 the Swedish Government had taken legal action against the shipowner and his insurer maintaining that the oil in question originated from the Alambra and claiming compen ation of (£400 000) fo r clean-up costs. The Government had al o taken legal action against the 1992 Fund a a protective measure to prevent its claim against the Fund becoming time barred, invoking the liability of the 1992 Fund to compensate the Governmentif neither the shipowner nor the insurer were to be held liable to pay compensation.
In order to recover from the Fund the claimant must prove that damage resulted from a convention "ship".
Erika (1999)
The Executive Committee recalled that on April 25, 2003, the Director had decided to increase the Fund's level of payments from 80% to 100% of the amount of damage actually sustained by the respective claimant .
The Executive Committee decided to authorize the Director to make payments in respect of the French Government's claim to the extent that he con idered there was sufficient margin between the total amount of compen ation available and the Fund's exposure to other claim .
ote: For additional information about the Erika incident see the SOPF Administrator's Annual Report 2001 -2002 and 2002-2003, at Appendix C.
Prestige (2002)
The Executive Committee held a general discussion on the proposal by the Spanish delegation that the 1992 Fund should make advance payments "on account" to the Spanish Government, and to the Governments of other affected States. Consideration was made whether to authorize the
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Director to make a payment in exce s of the 15 per cent level decided in May 2003, subject to term and condition to protect the 1992 Fund again t overpayment.
me delegation a ked fo r clarification of the legal ba i of the propo al. They expres ed a pr fe renc fo r the method fo llowed in ome previou ma jor incident in the United Kingdom, the Republic of Korea and France. In the e incident the government had agreed to tand Ia t with re pect to th ir own claim . The Executive ommittee decided to refer the i ue to the 1992 Fund embly.
Victoriya (2003)
The Ru ian tanker Victoriya (2,003 gro s ton ) uffered a fire and explo ion at the Octyabyr k tem1inal near yzran on the Volga River, Ru ian Federation. A ignificant quantity of crude oil wa pilled into the river.
The Executive ommittee noted that the incident had taken place on the olga Ri er, ome I ,300 km inland from the Ca pian ea and the ea of zo , which gave ri e to the que tion of whether the 1992 Convention applied to pollution damage ari ing from incident occurring in inland water , including non-tidal reache of river . Mo t delegation , while noting the unu ual nature of the incident with re pect to it location in the upper reache of a ri er, neverthele , con idered that the 1992 onvention w re applicabl ince the Victoriya wa a ea-going ve el and the pollution damage had be n cau ed in the territory of a ontracting tate.
The Committee decided that the 1992 i il Liability on ntion and the 1992 Fund on ention applied to the Victoriya incid nt. lt authori ed th Director to ttle claim ari ing from the incident.
The gth Session of the Assembly - October 20 to 24, 2003
Report of the Director
The Director tated that the 1971 Fund on ntion had ntered into fo rce on October 16, 1978 and that it wa the 25111 anni er ary of the 1971 Fund that wa b ing celebrated during the week's e ion of the Fund' governing bodi . H took the opportunity to comment on the achievement of the IOPC Fund in it 25 ear of e i ten e, and the ignificant de elopment of the international compen ation regim during thi time.
Budget for 2004 and Assessment of Contributions to the General Fund
The As embly adopted the budget for 2004 for the admini trati expen e for the joint Secretariat with a total of £3 292 250.
The Assembly decided to levy contributions to the General Fund fo r a total of £7 million, with the entire levy due for payment by March 1, 2004.
ote: Normally all Canadian conh·ibutions to the General Fund are paid from the SOPF.
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Assessment of Contributions to Major Claims Funds
In order to enable the 1992 Fund to make payments of claims fo r compensations arising out of the Erika and Prestige incidents, the Assembly decided to raise 2003 contributions to the Erika Major Claims Fund of £5.5 million and to the Prestige Major Claims Fund of £110 million. The Assembly also decided that £75 million of the levy to the Prestige Major Claims fund should be due for payment by 1 March 2004, and that the entire levy to the Erika Major Fund and the balance levy to the Prestige Major Claims Fund (£35 million) should be deferred.
ote: The Canadian contributions to the extent invoiced shall be paid from the SOPF.
Financial Statements and Auditor's Report on Opinion and Audit Body's Report
The Assembly noted that the External Auditors had welcomed the establishment of the Audit Body for the two Organizations and considered that it was a significant initiative in the governanceand financial management of the Funds' operation.
The External Auditor provided an unqualified audit opinion of the 2002 Financial Statements. The Assembly approved the accounts of the 1992 Fund for the financial period January 1 to December 31,2002.
ote: For infonnation about the composition and mandate of the IOPC Fund's Audit Body see the SOPF Administrator's Annual Report 2002-2003 at Appendix C and Appendix G, respectively.
Election of Members of the Executive Committee
In accordance with the 1992 Fund Re olution °5, the Assembly elected the fo llowing States as member of the Executive Committee to hold office until the end of the next regular session of the Assembly:
Eligible under paragraph (a) Eligi ble under paragraph (b)
Canada Australia France Cameroon Germany Greece India Grenada Japan Marshall Islands etherlands Poland Singapore Sweden United Arab Emirates
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Report on the Establishment of a Supplementary Fund
The A embly took note of the information regarding the International Conference on the e tabli hment of a upplementary fu nd for compen ation fo r oil pollution damage, which was held under the au pice of IMO from May 12 to 16, 2003.
It wa noted that it wa po sible that the Protocol would enter into fo rce during 2004 and that the firt e ion of the upplementary Fund A embly might therefore have to be held during that year.
The Director was in tructed to ba e the preparatory work on the a umption that the upplementary Fund would have it Headquarter in London, and that the 1992 Fund and the Supplementary Fund would be admini tered by a joint ecretariat headed by a ingle Director.
ote: For infonnation about the upplementary Fund ee ection 4.9.2 ofthi report.
Report of the Executive Committee on its 19111 - 22"d Se ion
Prestige Incident
The Chairman of the Executive Committe inform d the embly about the debate that had occurred during it 22"d e ion on the ubmi ion by the pani h Go ernment for advance payment "on account" for claim with re p t to th Pre tige incid nt.
The Committee had been unabl to obtain a olution to cone rn rai ed by thi propo at. Therefore, the Committee decided to defer the i ue to the embly.
The A embly, taking into account th e c ptional circum tance of the Pre tige incident, decided a fo llow :
(a) The A embly authori::ed the Director, ubject to a general a e men! bJ the Director of the total of the admi ible damage in Sp ain ari ing from the Pre tige incident, to make a payment of the balance between 1 5�oof the a e ed amount of the claim ubmitted on 2 October 2003
and 15% of that claim a ubmitted (1 5% of 3 3. 7 million = '5 7 555 000) and a/ o ubject to the Government of Sp ain providing a guarani e from a financial in titution, not from the Sp anish State, ·which would have the financial tanding laid down in the 1992 Fund 's Internal Jnve tment Guideline o a to protect the 1992 Fund against an ove1payment ituation;
(b) The Assembly decided that such a guarantee hould cover the difference between 15% of the assessed amount of the claim ubmitted on 2 October 2003 and 15% of that claim as
submitted (1 5% of €3 83. 7 million = €5 7 555 000). Further, it was decided that the terms and condition of the guarantee should be to the atisfaction of the Director;
(c) Th e Assembly instructed the Director to provide fu ll information on assessments and payments under paragraph (a) and to provide explanations when required by any Member State;
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(d) The Assembly decided that the Executive Committee should review, at its next session, payments made under paragraph (a) . It was also decided that if the payment amount was reduced by the Executive Committee, the difference should be repaid;
(e) It was fu rther decided that if any other State having suffered losses relating to the Prestige incident were to seek the same solution fo r payments on the same terms, such a request should be submitted to the Executive Committee.
The Third Intersessional Working Group (Sixth Meeting)
The sixth meeting of the Working Group, to be held on October 23, 2003, was cancelled due to insufficient time being available during the October 2003 sessions of the IOPC Funds' governing bodies.
The seventh meeting of the Working Group was scheduled for the week of23 Febmary 2004.
The 23rd Executive Committee - October 24, 2003
The Executive Committee elected Mr. J. Rysanek (Canada) as chairman and Mr. V. Schofisch (Germany) as Vice-Chairman to hold office until the end of the next regular session of the Assembly.
The 24th Executive Committee - February 23, 24 and 27, 2004
Incidents Involving the 1992 IOPC Fund
Erika (1999)
In December 2003, the Commercial Court in Lorient rendered judgments in respect of fo ur claims in the tourism and fisheries sectors relating to "pure economic lo " which had been rej ected by the shipowner, Steam hip Mutual and the 1992 Fund.
These claims had been rejected by the 1992 Fund since, in the Fund's view, they did not fulfill the criteria fo r admissibility laid down by the Fund' governingbodies.
The Court stated that it was not bound by the criteria for admissibility laid down by the 1992 Fund.
In the three other judgments the Commercial Court in Lorient made the same statement as above in respect of the criteria to be applied under French law and, stating that it was not bound by the Fund's criteria.
Considering the importance of this issue fo r the proper functioning of the compensation regime based on the 1992 Conventions, the Executive Committee decided that the 1992 Fund should pursue the appeals against all fo ur judgments.
The Administrator's Annual Report 2003-2004 79 hip-source Oil Pollution Fund
By way of contrast, the Committee noted that in a judgment dated January 29, 2004, rendered by the Civil CoUit (Tribunal de Grande In tance) in ante , in respect of claims by the owner of the two hotels in ante fo r pure economic loss, that Court had rejected the claims in the light of the Fund' criteria, on the grounds that the claimants had not shown a link of cau ation between the alleged losses and the oil poll ution cau ed by the Erika incident.
Zeinab (2001)
The Georgian-registered vessel Zeinab, carrying about 1,500 tonne of fuel oil, ank off Dubai, United Arab Emirates, resulting in the loss of 400 tonne of fuel oil and the sub equent pollution of the coastal areas.
The Committee noted that the Director had con idered that it would not be meaningful fo r the IOPC Fund to pursue recour e action again t the hipowner. Indication are that the hipowner may be living in Iraq. It was con idered it would be extremely difficultto pursue recour e action for legal and practical rea ons.
ote: For additional information about the Zeinab incident ee the SOPF Admini trator' Annual Report 2001 -2002 at Appendix C.
Prestige (2002)
The Executive Committee noted that the contract to remove the remaining oil from the Prestige had been igned between the pani h government and Rep ol YPF and that the work, which wa due to take place between May and October 2004, wa expected to be completed fo r a total cost of €99.3 million.
The Committee also noted that, ba ed on the figure gi en by the pani h, French and Portuguese Governments, the total costs of the incident could be e timated in the region of £718 and £774 million.
The Committee decided to maintain the cunent level of payment at 15 percent of the lo or damage suffe red by the respective claimant .
Slops (2000)
The Greek-registered waste oil reception facility Slop (10,815 gros ton ) su tained a fire and explosion on June 15, 2000, while at anchor in the port of Piraeu , Greece. The Slops wa laden with 5,000 tonnes of oily water of which 1,000 to 2,000 tonnes wa believed to be oil. A substantial quantity of the oil wa spilled cau ing extensive shoreline pollution.
The Committee took note of a judgment rendered on February 16, 2004, whereby the Court of Appeal had ovetturned the judgment of the Court of firstin stance. The Court of Appeal had held that the Slops did not meet the criteria required by the Conventions and, therefore, could not be considered a "ship". It was noted that as a result of this judgment the claims against the Fund had been rejected.
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ote: For additional information about the Slops ' incident see the SOPF Administrator's Annual Report 2002 - 2003 at Appendix C.
Future Sessions
The Committee decided to hold its 25th Session on May 24, 2004, and its normal autumn session during the week of October 18, 2004.
The Third Intersessional Working Group (Seventh Meeting)
The seventh meeting of the Third Intersessional Working Group was held from February 24 to 27, 2004, under the Chairmanship of Mr. Alfred Popp QC (Canada). The Working Group continued an exchange of views concerning the need to review the international compensation reg1me.
Some of the issues under consideration by the Working Group include:
Study of the Costs of Spills
The Working Group had requested the Director to undertake an independent study of the costs of past oil spills in relation to the past, cunent and future limitation amounts of the compensation Conventions. Preliminary analysis of the raw data submitted by P & I Clubs of the International Group had indicated that considerable further analysis would be required before it could be used to provide useful statistics. The Director was of the view that the study would not be completed until May 2004 at the earliest.
The Working Group decided that, while the completion of the costs study should not hinder its di cussion on the revision of the 1992 Civil Liability Conventions, any decisions by the Group should be on a provisional basis pending the outcome of the study.
Shipowners' Liability and Related Issues
Level of Shipowners' Limitation Amount
With regard to the level of shipowners' limitation amount and its relationship with the compensation funded by oil receivers, the Chairman noted that the Working Group had to consider six options, which in principle were as fo llows:
(1) Th e traditional revision of the limits in the 1992 Civil Liability Convention by increasing the small ship minimum and the steepness of the slope of the SDR/tonnage line fo r larger ships (A ustralia et al.);
(2) Th e sharing of the liability under the present Liability Convention between shipowners and oil receivers (A ustralia et al);
(3) Raising the limit of liability of the shipowner under the Civil Liability Convention and the introduction of a third tier cargo liability (Italy) ;
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(4) increa e in the limit under the 1992 Civil Liability Convention and the 1992 Fund Convention (OCiMF) ;
(5) increase of the shipowners ' liability to a flat amount, independent of the ship 's tonnage, and/o r a sharing of the contributions to the Supplementmy Fund between the shipowner and the oil receivers (OCIMF) ;
(6) Adju tment of the haring of the financial burden between shipowners and cargo interests by means of voluntary solutions (international Group of P& i Clubs).
In summing up the debate, the Chairman noted that while there was trong upport fo r maintaining a imple and workable international compen ation regime, the Working Group was divided on whether or not to amend the provision relating to the hipowner ' liability, which wa at the heart of any deci ion to revi e the regime. He tated that he believed the debate had created sufficient momentum to keep the que tion of hipowner ' liability under review for the next meeting of the Working Group in May 2004 when, hopefully, the re ult of the Director' tudy of the costs of oil spills would be available.
Substandard Transportation of Oil
In summing up the di cu ion on ub tandard tran portation of oil and the right of the hipowner to limit liability, the Chairman noted that orne delegation had expre ed a willingnes to explore further the possibility of linking the i ue within the legal framework of the compen ation of Convention and an intere t in the outcome of the tudy being caiTied out by OECD. He noted that other delegation remain keptical about linking compen ation with afety i ue and had expressed the view that the complication that thi could create could undermine what wa a simple and effective regime, thereby lowing down compen ation payment . He refeiTed to the problems rai ed by the International Group of P&I Club relating to the haring of information on hip inspections and ugge ted that Government might be able to give a i tance in thi regard. The Chairman stated that the document pre ented needed reworking for the next meeting of the Working Group.
ote: For additional inforn1ation about Per pecti e on ub tandard Ship and the Re is ion of the Civil Liability and IOPC Fund Convention , ee the SOPF Admini trator' Annual Report 2002- 2003 at Section 4.6.3 and Appendix C (Third Inter es ional Working Group -fifth meeting) respectively.
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Appendix D:
Changes Introduced by the 1992 Protocols
• A special limit of liability fo r owners of small vessels and a substantial increase in the limitation amount. The limit is approximately $8.79 million for a ship not exceeding 5,000 units of gross tonnage, increasing on a linear scale to approximately $174.88 million for ships of 140,000 units of tmmage or over, using the value the SDR at April 1, 2004.
• An increase in the maximum compensation payable by the 1992 IOPC Fund to $395.47 million, including the compensation payable by the shipowner under the 1992 CLC up to its limit of liability. This includes the compensation levels increase of approximately 50% on ovember 1, 2003 - see section 4.9.1 herein.
• A simplified procedure fo r increasing the limitation amounts in the two Conventions by majority decision taken by the Contracting States to the Conventions.
• An extended geographical scope of application of the Conventions to include the exclusive economic zone or equivalent area of a Contracting State.
• Pollution damage caused by spills of bunker oil and by cargo residues from unladen tankers on any voyage aftercarr ying a cargo are covered.
• Expenses incurred fo r preventative measures are recoverable even when no spill of oil occurs, provided that there was a grave and imminent danger of pollution damage.
• A new definition of pollution damage retaining the basic wording of the 1969 CLC and 1971 IOPC Fund Convention with the addition of a phrase to clarify that, fo r environmental damage, only cost incurred fo r reasonable measures actually undertaken to restore the contaminated environment are included in the concept of pollution damage.
• Under the 1969 CLC the shipowner cannot limit liability if the incident occurred as a result of the owner's actual fa ult or privity. Under the 1992 CLC, however, the shipowner is deprived of this right only if it is proved that the pollution damage resulted from the shipowner's personal act or omission, committed with the intent to cause such damage or recklessly and with knowledge that such damage would probably result.
• Claims fo r pollution damage under the CLC can be made only against the registered owner of the ship concerned. This does not preclude victims from claiming compensation outside the CLC from persons other than the owner. However, the 1969 CLC prohibits claims against the servants or agents of the owner. The 1992 CLC does the same, but also prohibits claims against the pilot, the charterer (including a bareboat charterer) manager or operator of the ship, or any person carrying out salvage operations or taking preventive measures.
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Current Limits of Liability and Compensation fo r Oil Tanker Spills in Canada ' 1 l Based on the value of the SDR at Apri l 1, 2004
$600 -
SOPF $539.068 million
(Include amounts available under the I 992 IOPC Fund and 1992 CLC) $500-
$400- 1992 IOPC Fund $ 395.468 million
(include amount available under I 992 CLC)
'-Go") 0 "' c $300- -.� �
$200- 1992 CLC 174.883 million
Plus $ I 229.26 for each additional ton from 5,000 to 140,000 $100-
0 20 40 60 80 100 120 140 160
Vessel Size--Thousands of Tons ( 1992 CLC Gross Tonnage) (I) The value of the SDR at April I, 2004, was approximately 1.948 12. This actual value is reflected in Figure I above and in Appendix D. Elsewhere in the report, for convenience, calculations may be based on the DR having a nominal value of $2.
Figure 1 Figure I shows the current limits of liability and compensation available under the 1992 CLC, the 1992 lOPC Fund Con vention, and the SOPF for oil spills from oil tankers in Canada, including the territorial sea and the exclusive economic zone. Because of the SOPF, Canada has an extra cover over and above that available under the international Conven tions. N.B. The above aggregate amount available under the 1992 CLC and the 1992 JOPC Fw1d is 395.468 million effective November I, 2003. The SOPF amount of some $143.60 million on top of that, re ults in 539.07 million being available now fo r a tanker spill in Canada - without reference to proposed IOPC '"optional" Supplementary Fund.
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Appendix E:
Contracting States to both the 1992 Protocol to the Civil Liability Convention and the 1992 Protocol to the IOPC Fund Convention as at 31 December 2003
84 States fo r which Fund Protocol is in Force (and therefore Contracting States of the 1992 IOPC Fund) Algeria France Papua New Guinea Angola Gabon Philippines Antigua and Barbuda Georgia Poland Argentina Germany Portugal Aush·alia Greece Qatar Bahamas Grenada Republic ofKorea Bahrain Guinea Russian Federation Barbados Iceland Saint Vincent and the Belgium India Grenadines Belize Ireland Samoa Brunei Darussalam Italy Seychelles Cambodia Jamaica Sierra Leone Cameroon Japan Singapore Canada Kenya Slovenia China (Hong Kong Special Latvia Spain Administrative Region) Liberia Sri Lanka Columbia Lithuania Sweden Comoros Madagascar Tanzania Congo Malta Tonga Croatia Marshall Islands Trinidad and Tobago Cyprus Mauritius Tunisia Denmark Mexico Turkey Dj ibouti Monaco United Arab Emirates Dominica Morocco United Kingdom Dominican Republic Mozambique Uruguay Fiji amibia Vanuatu Finland etherlands Venezuela ew Zealand 1gena orway Oman Panama
2 States that have deposited Instruments of Accession, but fo r which the IOPC Fund Protocol does not enter into fo rce until date indicated Ghana 3 February 2004 Cape Verde I 4 July 2004
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