Oil Pollution Compensation Act Notes

CHAPTER 3: OIL POLLUTION COMPENSATION ACT
INTRODUCTION
Oil Demand
Oil supplies around 34% of the
worlds energy needs. It is often
referred to as fossil fuel because
the oil is extracted from built-up
organic material and fossil remains
that over time, breaks down into
hydrocarbons. Oil is mostly used as
transportation fuel but is also found
in many other products like
fertilizers, makeup, paints, and
fabrics.
The Philippines, in recognizing the
dire necessity for oil as a
developing country and its
response to the 1970s oil crises,
created the Philippine National Oil
Company in 1973. The universal
demand for oil, and its availability
to handful parts of the world
prompted the movement of oil from
state to state through the
importation of oil products.
As the need for oil is imperative
and cannot be abandoned, for
purposes of preserving the
environment, multilateral efforts
have been made to prevent and in
case of occurrences, minimize the
effects of marine accidents such as
oil spills. One of which is the
International Convention in the
Establishment of an International
Fund for Compensation for Oil
Pollution Damage.
1992 PROTOCOL
The 1969 Civil Liability Convention

provided a useful mechanism for
ensuring the payment of
compensation for oil pollution
damage but it failed to deal
satisfactorily with all the legal,
financial and other questions raised
during the conference.
Eventually, protocols to the 1971
convention including the 1976 and
1984 protocols were superseded by
the 1992 protocol. The main
purpose of the Protocol was to
modify the entry into force
requirements and increase
compensation amounts. The 1992
Protocol established a separate,
1992 International Oil Pollution
Compensation Fund, known as the
1992 Fund, which is managed in
London by a Secretariat.
OIL POLLUTION COMPENSATION
ACT OF 2007
In 2007, then President Gloria
Macapagal-Arroyo signed Republic
Act No. 9483 otherwise known as
the Oil Pollution Compensation Act
of 2007 as a means of adopting
internationally accepted measures
which impose strict liability for oil
Pollution Damage and to ensure
prompt and adequate
compensation of persons who
suffer such damage. This act
adopts and implements the
provisions of the 1992 International
Convention on the Establishment of
an International Fund for

Compensation for Oil Pollution
Damage (Sec. 2, RA 9483).
Application
The law is applicable only to
Pollution Damage caused in
Philippine territory, including its
territorial sea and its exclusive
economic zone, and preventive
measures, wherever taken, to
prevent or minimize such damage.
One of the salient features of the

law is the constitution of a Fund.
The owner shall be required to
constitute a fund for the total sum
representing the limit of his liability
with the Maritime Industry
Authority to cover Incidents
causing Pollution Damage. The law
strategically indicated the
constitution of such fund as a
condition precedent in the
application of the limited liability
provided in Section 10.
Polluter Pays Principle

The same principle is embodied in
the law particularly in Section 6 of
RA 9483 which provides that the
Owner of the Ship at the time of an
Incident shall be liable of the
incident and theses involves a wide
array of damages all of which he
may be brought to account.
How is it constituted?
The fund can be constituted by
depositing the sum or by producing
a bank guarantee or other financial
guarantee acceptable under the
existing laws and considered to be
adequate by the Department of
Transportation and
Communications.
Exceptions
No liability is attached for acts
which are beyond the control of the
owner or are considered inevitable
such as acts of war, hostilities or a
natural phenomenon of an
exceptional, inevitable and
irresistible character, and other
acts not imputable to the
negligence or fault of the owners.
The law does not also extend
liability against the employees of
the ship including the crew and
captain as provided in Section 8 of
the same act.
Insurance
The Maritime Industry Authority
(MARINA), pursuant to the law,
requires all owners to maintain an
annual insurance or other financial
security for pollution damage in the
sums fixed by applying the limits of
liability under Section 10 of RA
9483.
CONSTITUTION OF A FUND
The following are Acceptable Bank

or Financial Security:
1. Insurance Cover
2. Other financial security
3. Bank Guarantee
4. Certificate delivered by an
International Compensation Fund

5. Surety Contract from an
Insurance Company
6. Certificate of Cover issued by an
international protection and
indemnity club
7. Other similar securities or
guarantees
DUTIES and FUNCTIONS
Department of Transportation
and Communications (DOTC)
The DOTC shall have the power to
formulate policies for the planning
and implementation of a
comprehensive program for the
maintenance of an efficient system
requiring the maintenance of
compulsory insurance or other
financial security and certification
attesting to the existence of such
coverage; investigation for claims
for compensation arising from this
Act; and system of administration
of the Oil Pollution Management
Fund.
Marine Industry Authority

(MARINA)
The MARINA shall have the power
and authority to
1. Assist the PCG in the design,
review, revision, as
necessary, of the claims
manual as required by the
Act and this IRR in
coordination with the
relevant agency/ies; require
owners to maintain
compulsory insurance or
other financial security (Rule
VI, Section 1);
2. Issue a certificate attesting

that an insurance cover or
other financial security is in
force in accordance with the
Act and this IRR; administer
the OPMF (Rule X, Section 1);
3. Conduct research,
enforcement and monitoring
activities for the effective
implementation of this Act;
Submit periodic reports to
DOTC on CLC certificates
issued by MARINA and
financial reports relative to
the administration of the
OPMF;
4. Monitor cases filed with the
RTC for the recovery of
claims for pollution damage;
Perform such other functions
necessary to implement the
provisions of the Act and this
IRR; issue administrative
Regulations, as may be
necessary to carry out the
provisions of theAct and this
IRR.
Philippine Coast Guard (PCG)
The PCG shall have the power and
authority to inspect the CLC
certificates of ships entering and
voyaging within the Philippine
territorial waters in accordance
with the exercise of its port state
control functions provided that
such inspection shall not cause
undue delay to the ships.
Philippine Ports Authority
(PPA)

They shall have the authority to
deny port services to ships and
prevent loading and unloading of
cargo by ship without required CLC

Certificates.

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CHAPTER 3: OIL POLLUTION COMPENSATION ACT

The 1969 Civil Liability Convention

CHAPTER 3: OIL POLLUTION COMPENSATION ACT

One of the salient features of the

Polluter Pays Principle

The following are Acceptable Bank

CHAPTER 3: OIL POLLUTION COMPENSATION ACT

Marine Industry Authority

2. Issue a certificate attesting

CHAPTER 3: OIL POLLUTION COMPENSATION ACT

cargo by ship without required CLC

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