PAJ Oil Spill Workshop 2018
Tokyo, Japan

Recent incident involving the IOPC Funds- Agia Zoni II Jose Maura
Director28 November 2018

Outline of the regime
Scope of the Conventions
A uniform international rules.
Provides compensation to:• victims of ‘pollution damage(including preventive measures)’caused by ‘persistent oil’ from‘ships (tankers)’

Applies to:• territory, territorial waters andExclusive Economic Zone (orequivalent) of Member States
Source KOMOSHow the regime works
Three Tier system

Paying organisation/Compensation regime

Source ofcompensation
Oil receivers inSupplementary FundStates Parties

Supplementary FundContribution

Third Tier

1992 Fund Convention

Second Tier

Insurance
Premium

Insurer (P&I Clubs)
1992 Civil Liability Convention
First Tier

Claimants

Shipowners

Contribution

Payment

1992 FundOil receivers in1992 Fund
States Parties

Supplementary Fund Protocol

Member States Map
November 2018

1992 Fund Convention (115 Member States)
1992 Civil Liability Convention (137)

Supplementary Fund (32)1969 Civil Liability Convention (34)1992 Civil Liability Convention
First Tier – the shipowner

Main features• Strict liability of registeredshipowner (channelling of liabilityto shipowner)• Limitation of liability based on thegross tonnage of the ship
• Shipowners required to havecompulsory third party insurance
and certificate• Direct action against insurer• Exclusive jurisdiction where thedamage occurred• Few exceptions to liability

Model form of theCLC certificate

1992 Fund Convention
Second Tier – the 1992 Fund
The 1992 Fund
• Pays compensation when:− damage exceeds shipowner’s liability
under the 1992 CLC− shipowner financially incapable ofmeeting their obligations− no liability under the 1992 CLC• Maximum compensation SDR 203 million,including CLC• Contributions from oil receivers inState Parties to the 1992 Fund Convention
Source KOMOS• Very limited exceptions− damage resulted from an act of war,
damage caused by a State ship− claimant cannot prove that damage
resulted from incident involving ship(s)Supplementary Fund Protocol
Third Tier – the Supplementary FundThe Supplementary Fund:• Pays compensation when damage
exceeds, or there is a risk that it will
exceed, the applicable limit under1992 Fund• Maximum compensation
SDR 750 million, including amounts
payable under 1992 Conventions• Contributions from oil receivers in State
Parties to Supplementary Fund Protocol• Minimum contribution: 1 million tonnesof contributing oil are deemed to bereceived in each State Party

The regime in figures
Liability limits under the Conventions

USD 1.06 billion (£795 million)

USD 287 million (£215 million)
USD 126.9 million (£95 million)*Exchange rates as at 9 July 2018

The IOPC Funds
The basics• Administer the 1992 Fund Convention and Supplementary FundProtocol• Consists of Assemblies, Executive Committee and the Secretariat• Establish criteria for admissibility of claims• Assess claims and pay compensation to victims when applicable• Receive oil reports and contributions

How the IOPC Funds work?
Organigram
IOPC Funds Governing Bodies
1992 Fund
ExecutiveCommittee

1992 FundAssembly

Supplementary
Fund Assembly

In Member States

Fund Lawyers
TechnicalExperts
Local Claims
HandlingOffice

Audit Body

Director
Secretariat

Director
Mr José Maura

Oversight

Investment
Advisory
Body
Advisory

Admissible claims
Types of claims

Admissibility of claims
Basic principles

Existing criteria: Claims Manual• Objective criteria• Reasonableness• Relationship between costs andbenefits

Political/social considerations are outside
the scope of the Conventions

Management of an incidentRole of the IOPC Funds’ Secretariat• Cooperation between 1992 Fund and theP&I Clubs:- Joint experts- Joint assessments- Joint costs- Setting up of a joint claims handling office• Meetings with authorities, the public andthe media• Meeting with claimants• Regular visits to affected sites• Reports to 1992 Fund ExecutiveCommittee

Management of an incident
Role of the governing bodies
1992 Fund’s Executive Committee:• Gives instructions in respect of the handling of claims• Authorises to make settlements of claims• Decides on the level of payment• Decides on the admissibility of particular claims raising
new questions of principle

Who contributes to the Funds?
Contributors• Oil cargo interests are our contributors: ‘persons’ who receive more than
150 000 tonnes of contributing oil per year after sea transport• In the 114 Member States of the 1992 Fund, there were approximately
230 contributors in 2017.
• In the 31 Member States of the Supplementary Fund, there wereapproximately 140 contributors in 2017, including 7 States.

Calculating the levy per tonne
2018 Levies
Oil Year Total Levy ÷Total oil (tonnes) =Levy pertonne (£)

1992 Fund
General Fund 20182017

5 900 000

1 586 303 134

0.0037193

Volgoneft 139(Reimbursement)

2006(3 675 000)

1 513 731 871(0.0024278)

Alfa I MCF

2011

1 675 000

1 545 786 311

0.0010836

Agia Zoni II MCF

2016

10 000 000

1 546 400 431

0.0064666

Agia Zoni II MCF(Deferred levy)

2016

16 000 000

1 546 400 431

0.0103466

Contributions
From Member States’ oil industry
1992 Fund (2016)

10 States represent 74% of contributions
Supplementary Fund (2016)

10 States represent 85% of contributing oil received

What we have paid
1978 – 2018

Supplementary Fund

• No incident• No compensation paid

The 1992 Fund

• Has been involved in 45 incidents• Paid about £349 million in compensation

The 1971 Fund

• Was involved in 107 incidents• Paid about £331 million in compensation
and/or indemnification

Total• Incidents: 150• Paid about £680 million in compensation
and/or indemnification
Figures as at 30 September 2018

Functions of the Secretariat
Engagement with Member States
In the event of an incident, cooperation andfrequent communication are essential
between the affected State and theSecretariat.
Attendance at sessions of the governing bodies
by Member States is vital to the functioning ofthe organisation.
Contacts must be established long before aspill to ensure Conventions are implementedand victims are protected.
The Secretariat establishes and maintains goodcommunication with Member States byengaging in various activities (workshops,conferences, visits, meetings etc.).

Functions of the Secretariat
Information services, online

www.iopcfunds.org
Available in all three working languagesof the Funds: English, French & Spanish
Interactive features allows users toeasily find the latest information on• Incidents (both open and closed)• Member and non-Member States• Claims and compensation
Meeting documents (past and present)
available to search and download from
Document Services portal

Functions of the Secretariat
Publications

Available to download orin hard copy upon request

Agia Zoni II
The incident
Ship

Agia Zoni II

Date of incident

10 September 2017

Place of incident

Saronic Gulf, Greece

Cause of incident

Sinking—circumstances under investigation(calm weather conditions, only 2 crew members on board)
Unknown but estimated to be in the region of 700 metres³

Quantity of oil spilledAgia Zoni II
Vessel details
Agia Zoni II

Source MarineTraffic.com

Gross Tonnage
Built
CLC Limit

Double-hulled tanker,
Greek-flagged
1 597 GT1972€5.41 million

Oil on board at time of incident

AmountHeavy fuel oil 380 cSt high sulphur

1 946.094 mt

Heavy fuel oil 180 cSt

247.768 mt

Marine gas oil (MGO)

369.118 mt

Approximately 15 mt of bunkers (MGO), 300 litres of lubricants and
200–300 litres of chemicals
Approximate total quantity of oil cargo/bunkers/chemical on board

2 580 mtAgia Zoni II—Details of incidentImpact of the incidentAffected areas
Aerial views

Agia Zoni II
Response operations—onshore••••20–25 km of coastline affected
Large numbers of personnel (~400) employed
Large quantities of booms (> 9 km) & sorbents used
Use of manual & mechanical methods – issues withsunken oil• Onshore clean-up operation finished by the end of2017

Source IOPC Funds

Source IOPC Funds

Agia Zoni II
Response operations—at the wreck
10 September 2017: Salvor commenced operations underLloyds Open Form (LOF) salvage agreement
15 September 2017: LOF terminatedSalvor contracted head of clean-up contractor
2 claims submitted at wreck site for €16.95 million
Claims recently assessedGovernment intervention
Wreck removal
29 September 2017: Greek State orderedowner to lift wreck within 30 days
13 October 2017: Greek State ordered salvor
to lift wreck at no cost to Greek State
29 November 2017: wreck lifted

At time of lifting wreck, some oil released
and re-polluted previously cleaned beaches
Wreck towed to salvor’s shipyard
Oil removal operations from engine room
subsequently undertaken

P&I insurance details
Lodestar Marine Limited• Fixed premium provider but with significant financial backing.
– Policy limit:€5 million– Policy covers:(1) oil pollution liabilities, and(2) wreck removal• No hull insurance in place• Limitation fund established by Lodestar Marine Limited inOctober 2017 for €5.41 million• Under Greek law, Greek Government has a direct right of action
against the insurer for wreck removal costs

1992 Fund activities
Early on-site visits
The 1992 Fund Secretariat:• met with Greek authorities
shortly after the incident;• visited the affected areas
many times; and• monitored developments

1992 Fund engaged experts in clean-up,
tourism and fisheries industries, who:
• went on-site soon after the incident;• conducted daily surveys; and• attended meeting with authorities
and claimants

Source IOPC Funds

Source IOPC Funds

Management of claims
Claims Submission OfficeOpening of a Claims Submission Office on 2 November 2017
• Staffed by manager and assistant• Assist claimants and their claims for compensation• Assist the Secretariat with the management of the claims• 130+ claimants / representatives visited the office

Source IOPC Funds

Before and After
Athens Riviera—shoreline returned to normal

Before and After
Salamina islandBefore and After
Salamina island and Piraiki

Claims submitted as at October 2018
ClaimedApproved

Paid by Fund

No.

Amount (€)

No.

Amount (€)

No.

Amount (€)

Clean-up

23

74.04 million

79.90 million

69.89 million

Environmental
Monitoring

494 927

390 587

390 587

Fisheries(incl. wholesalers)

77

2.47 million

114 754

114 754

Property

87751 482

25 75225 752

Tourism403.21 million

7176 391

127 093Other

190 000

00.00

00.00

Total232

80.65 million

2010.18 million

1210.03 million

Claim Category

Director’s concerns• Investigation into the cause of incident is still ongoing• Still early to determine the overall cost of the incident• Insurance of €5 million by Lodestar Marine Limited
appears insufficient• 1992 Fund Assembly has approved levies:–––€26 million in 2018 – paid
€10 million in 2019 – invoiced€16 million in 2019 – deferred• Incident raises a number of issues:–––

Reliability of some insurers
Local regulations applicable to old tankers
Is the CLC/Fund system there to deal with these types of incidents?

www.iopcfunds.org@IOPCFunds