International Oil Pollution Compensation Funds (IOPC Funds)
The International Oil Pollution Compensation Funds (IOPC Funds) provide financial compensation for oil pollution damage that occurs in Member States, resulting from spills of persistent oil from tankers. The history of the IOPC Funds began with the oil spill from the Torrey Canyon, which ran aground near the Scilly Isles in 1967, fouling UK and French coastlines. This incident exposed a number of serious shortcomings, in particular the absence of an international agreement on liability and compensation in the event of such a spill. It led the international community to establish, under the auspices of the International Maritime Organization (IMO), a regime for compensation for victims of oil pollution. Since their establishment, the 1992 Fund and the preceding 1971 Fund have been involved in 149 incidents of varying sizes all over the world.
The framework for the regime was the 1969 International Convention on Civil Liability for Oil Pollution Damage (1969 Civil Liability Convention) and the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution (1971 Fund Convention). Over time, it became clear that the amount of compensation available for major incidents needed to be increased and the scope of the regime widened. This resulted in two further instruments, known as the 1992 Civil Liability Convention and the 1992 Fund Convention. Following the Erika and Prestige incidents, a third instrument, the Protocol to the 1992 Fund Convention (Supplementary Fund Protocol), was adopted in 2003, providing additional compensation over and above that available under the 1992 Fund Convention for pollution damage in the States that become Parties to the Protocol.
The IOPC Funds are financed by contributions paid by entities that receive certain types of oil by sea transport. These contributions are based on the amount of oil received in the relevant calendar year, and cover expected claims, together with the costs of administering the Funds.
In the great majority of cases, all claims have been settled out of court. The Alfa I is the first incident taking place in a Member State of the Supplementary Fund. It is however very unlikely that the incident will exceed the limit under the 1992 Fund Convention.