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THlRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regulnr Sessioii 
SENATE 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
EXPLANATORY NOTE 
With the growing global awareness on the dangers of pollution posed by the worldwide 
carriage of oil in bulk, the “1992 Civil Liability Convention” (CLC) and the “1992 Fund 
Convention” (FUND) were adopted in London on November 27, 1992. The two (2) conventions 
provide a regime for compensation’ for pollution damage and for the cost of recovery measiires, 
whenever taken, to prevent or minimize such damage. 
In consonance with the relevant provisions of the Constitution, to wit: 
Sec. 16, Article 11. The state shall protect and advance the right of the people to a 
balanced and 1iealtlifLil ecology in accord with the rhythm and harmony of nature. 
Sec, 2, Article XII. x x x. The State shall protect the nation’s marine wealth in its 
archipelagic waters, territorial seas, and exclusive economic zone x x x. 
Sec. 7, Article XIII. The State shall protect the rights of subsistence fishermen, 
especially local fishermen, especially local communities, to the preferential use of the 
communal marine and fishing resources, both inland and offshore. x x x The State shall 
also protect, develop and conserve such resources. x x x., 
the Philippine Senate ratified the 1992 Protocols to the CLC and Fund Conventions in 1997. 
However, to date, we have yet to enact an implementing legislation to fully comply with our 
obligations to the conventions and to benefit therefrom. 
For this reason, approval of this bill is earnestly sought, 
& 
MANUEL B. 
LLAR, JR. 
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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. ‘
7
 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
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AN ACT PROVIDING FOR THE IMPLEMENTATION OF THE PROVISIONS OF THE 
1992 INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR OIL 
POLLUTION DAMAGE AND THE 1992 INTERNATIONAL CONVENTION ON THE 
ESTABLISHMENT OF AN INTERNATIONAL FUND FOR COMPENSATION FOR 
OIL, POLLUTION DAMAGE, PROVIDING PENALTIES FOR VIOLATION THEREOF, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
Chapter I. - General Provisions 
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Section 1. Short Title. - This Act shall be known as the “Oil Pollution Compeiisation 
Act.” 
Sec. 2. Declaration of Policy. - The State, in the protection of its marine wealth in its 
archipelagic waters, territorial sea, and exclusive economic zone, adopts internationally accepted 
measures which impose strict liability for oil pollution damage and ensure prompt and adequate 
compensation for persons who suffer such damage. This Act adopts and iinplements the 
provisions of the 1992 International Convention on Civil Liability for Oil Pollution Damage and 
the I992 International Convention on the Establishment of an International Fund for 
Coinpensation for Oil Pollution Damage. 
Sec. 3. Definition of Terms. - For the purpose of this Act: 
(a) “1992 Civil Liability Convention” means the 1992 International Convention on Civil 
Liability for Oil Pollution Damage; 
(b) “1992 Fund Convention” means the 1992 International Convention on the 
Establislinient of an International F~iiid for Compensation for Oil Pollution Damage; 
(c) “Authority” means Maritime Industry Authority; 
(d) “PCG” means Philippine Coast Guard; 
(e) -9-PA” meaz: Philippines-Ports Authority; 
(0 “Affiliate Corporation” means corporation that is owned or subject to common 
corporate control by another corporation, and operated as part of the latter’s business; 


(g) “Contributing Oil” means crude oil and fuel oil as herein defined: 
(1) “Crude Oil” means any liquid hydrocarbon mixture occurring naturally in the 
earth whether or not treated to render it suitable for transportation. It also includes 
crude oils from which certain distillate fractions have been removed (which 
sometimes referred to as “topped crudes”) or to which certain distillate fractions 
have been added (sometimes referred to as “spiked” or “reconstituted” crudes); 
and 
(2) “Fuel Oil” means heavy distillates or residues from crude oil or blends of such 
materials intended for use as fuel for the production of heat or power of a quality 
equivalent to the “American Society for Testing and Materials Specification for 
Number Four Fuel Oil (Designation D 396-69)” or heavier; 
(h) “Incident” means any occurrence or series of occurrences having the same origin, 
which causes pollution damage or creates a grave and imminent threat of causing such damage; 
provided tM-a series ZToccurrences shall be treated as having occurred on the date of the first 
such occurrence; 
(i) “Oil” means any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy 
diesel oil, and lubricating oil, whether carried on board a ship as cargo or in bunkers of such a 
ship; 
(j) “Owner” means the person or persons registered as the owner of the ship or, in the 
absence of registration, the person or persons owning the ship. However in case of a ship owned 
by a State and operated by a company which in that State is registered as the ship’s operator, 
“owner” shall mean such company; 
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(k) “Person” means any individual or partnership or any public or private body, whether 
corporate or not, including a State or Government or its constituent subdivisions; 
(1) “Pollution Damage” means: 
(1) Loss or damage caused outside the ship by contamination resulting from the 
escape or discharge of oil from the ship, wherever such escape or discharge may 
occur, provided that compensation for impairment of the environment other tha11 
loss of profit from such impairment shall be limited to costs of reasonable 
measures of reinstatement actually undertaken or to be undertaken; and 
(2) The costs of preventive measures and further loss or damage caused by preventive 
measure; 
(m)“Preventive Measures” means any reasonable measures taken by any person after an 
incident has occurred to prevent or minimize pollution damage; 
(11) “Ship” means any sea-going vessel and sea-borne craft of any type whatsoever 
constructed or adapted for the carriage of oil in bulk as cargo; Provided, that a ship capable of 
carrying oil and other cargoes shall be regarded as a ship only when it is actually carrying oil in 


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bulk as cargo and during any voyage following such carriage unless it is proved that it has no 
residues of such carriage of oil in bulk aboard; 
(0) “State of the ship’s registry” means in relation to registered ships, the State of 
registration of the ship, and in relation to unregistered ships, the State whose flag the ship is 
flying; 
(p) “Subsidiary Corporation” means a corporation in which control, in the form of 
ownership of majority shares, is in another corporation, called the parent corporation. 
Sec. 4. Incoiyoration of the 1992 Civil Liability Convention and 1992 Fund Convention. 
- Subject to the provisions of this Act, the 1992 Civil Liability Convention and 1992 Fund 
Convention shall foim part of the law of the Republic of the Philippines. 
Sec. 5. Scope of Application. - This law shall apply exclusively to pollution damage 
caused in Philippine territory, including its territorial sea and its exclusive economic zone, and to 
preventive measures, wherever taken, to prevent or minimize such damage. 
Chapter 11. - Strict Liability For Oil Pollution Damage 
Sec. 6. Liability on Pollution Damage. - The owner of a ship at the time of an incident, 
or where t k  incident Ghsists of a series of occurrences, at the time of the first such occurrence, 
shall be liable for any pollution damage caused by the ship as a result of the incident. 
Such damages shall include but not be limited to: 
(a) Reasonable expenses actually incurred in clean-up operations at sea or on shore; 
(b) Reasonable expenses of preventive measures and further loss or damage caused by 
preventive measures; 
(c) Loss, or loss of earnings suffered by owners or users of property contaminated or 
damaged as a direct result of an incident; 
(d) Pure economic loss, or loss of earnings sustained by persons whose property has not 
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been polluted as a direct result of an incident; 
(e) Damage to human health or loss of life as a direct result of the incident; and 
(0 Eiivironmental damages and other reasonable measures of environmental restoration. 
Sec. 7. Exempting Circumstances. - No liability as stated in the immediately preceding 
section shall attach to the owner or his insurer if he proves that the damage: 
(a) resulted from an act of war, hostilities, civil war insurrection or a natural phenomenon 
of an exceptional, inevitable and irresistible character; 
(b) was wholly caused by an act or omission done with intent to cause damage by third 
party; and 
(c) was wholly caused by the negligence or other wrongful act of the government or its 
enforcement agencies responsible for the maintenance of lights or other navigational aids in the 
exercise of that fimction. 


If the owner proves that the pollution damage resulted wholly or pai-tially either from an 
act or omission done with intent to cause damage by the person who suffered the damage or from 
the negligence of that person, the owner may be exonerated wholly or partially from his liability 
to sucli person. 
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Sec. 8. Persons Exempted from Claims for Compensation for Pollution Damage. - No 
claim for compensation for pollution damage under this Act may be made against: 
(a) The servants or agents of the owner or the members of the crew; 
(b) The pilot or any other person who, without being a member of the crew, performs 
services for the ship; 
(c) Any charterer - howsoever described, including a bareboat charterer - manager or 
operator of the ship; 
(d) Any person performing salvage operations with the consent of the owner or on the 
instructions of a competent public authority; 
(e) Any person talting preventive measures; and 
(f) All servants or agents of persons mentioned in paragraphs (c), (d) and (e), 
unless the damage resulted from their personal act or omission, committed with the intent to 
cause such damage, or recltlessly and with Itnowledge that such damage would probably result. 
Provided, that nothing in this act shall prejudice any right of recourse of the owner against third 
parties. 
Sec. 9. Joint and Several Liability. - When an incident involving two or more ships 
occurs andjollution damage results therefrom, the owners of all the ships concerned, unless 
exonerated under Section 7, shall be jointly and severally liable for all such damage which is not 
reasonably separable, without prejudice, however, to the right of recourse of any of such owners 
to proceed against each other or third parties. 
Chapter 111. - System of Limitation of Liability 
Sec. 10. Liinitation of Liability - The owner of a ship shall be entitled to limit his 
liability under this Act with respect to a particular incident to a total amount calculated as 
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(a) 3 million units of account for a ship not exceeding 5,000 units of tonnage; 
(b) For a ship with a tonnage in excess thereof, for each unit of tonnage, 420 units of 
account for each unit in addition to the amount mentioned in par. (a). 
Provided, however, that this aggregate amount shall not, in any event, exceed 59.7 
million units of account. 
The limited liability under this section may not be availed of by the owner if it has been 
established that such pollution damage resulted from his personal act or omission, committed 


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with intent to cause such damage, or recklessly and with knowledge that such damage would 
probably result. 
The ‘‘unit of account” referred to in this section is the Special Drawing Right defined by 
the International Monetary Fund which shall be converted into national currency on the basis of 
the value of the currency by reference to the Special Drawing Right on the date that the Fund is 
constituted under Sec. 11 of this Act. 
Sec. 11. Corzstitution of a Fund. - For the purpose of availing himself of the benefit of 
liiiiitation provided for under Section 10 of this Act, the owner of ship registered’ in’ the 
Philippines shall be required to conistitute a f h d  for the total sum representing the limit of his 
liability with the Authority to cover incidents causing oil pollution damage, and against wliich a 
claim for pollution damage may directly be brought. 
The fund can be constituted by depositing the sum or by producing a bank guarantee or 
other fiiiancial guarantee acceptable under existing laws and considered to be adequate by the 
Authority. 
Chapter IV. - System of Compulsory Insurance and Certification 
Sec. 12. Maintennnce of Coi~~pdsoiy 
Insurance or other Financinl Security. - All owners 
of ships registered in the Philippines shall be required by the Authority to maintain insurance or 
other financial security for pollution damage in the sums fixed by applying the limits of liability 
under Sec. 10 of this Act. 
Sec. 13. Issuance of a Certificate. - A certificate attesting that insurance or other 
financial security is in force in accordance with the provisions of this Act shall be issued to each 
ship carrying more than 2,000 tons of oil in bulk as cargo by the Authority after it has 
determined that the requirements of ithe preceding section have been complied with. With respect 
to a ship not registered-bi a convention-member state, such certificate may be issued or certified 
by the Authority. This certificate shall be in the form established by the 1992 Civil Liability 
Convention and shall contain the following particulars: 
(a) Name of ship and port of registration; 
(b) Name and principal place of business of the owner; 
(c) Type of security; 
(d) Name and principal place of business of the insurer or other person giving security 
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and, where appropriate, place of business where the insurance or security is established; and 
(e) Validity period of the certificate which shall not be longer than the period of validity 
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of the insurance or other financial security. 
Sec. 14. Enforcement. - Ship carrying more than 2,000 tons of oil in bulk as cargo shall 
not be allowed entry into Philippine territory or its exclusive economic zone without a valid 
certificate of insuraiice or financial security for oil pollution damage required by this Act. For 


this purpose, the PPA or any port authority shall deny port services to said ship without such 
certificate. 
If awy-such shif7-is- found within the said territory or zone without such certificate, said 
ship shall be prevented from loading or unloading its cargo until it is able to produce the 
appropriate insurance or financial security duly certified by the state of its registry if such 
country is a convention-member state, otherwise, issued or certified by the Authority or any 
convention-member State. 
The owner and master of the ship referred to in the immediately preceding paragraph 
shall be liable to the fines set forth in this Act. Such ship shall be prevented froin leaving unless 
the appropriate fines shall have been paid to the ftdl satisfaction of the Authority. 
The PCG shall conduct inspections of certificates of ships entering the territory of the 
Philippines, or, in the case of ships registered in the Philippines, voyaging within the said 
territory, provided, that such inspections shall not cause undue delay to the ships. 
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Chapter V. - Contribution to the International Oil Pollution Compensation Fund 
Sec. 15. Contributions to the International Oil Pollution Compensation Fund. - Any 
person who has received inore than one liundred fifty thousand (1 50,000) tons of contributing oil 
in a calendar year in all ports or tenninal installations in the Philippines through carriage by sea, 
shall pay contributions to the Intematioiial Oil Pollution Compensation Fund (IOPC) in 
accordance with the provisions of the 1992 Fund Convention. 
A person shall be deemed to have received contributing oil, for contribution purposes, if 
he received the same: 
(a) From another country; or 
(b) From another port or teiininal installation within the Philippines, notwithstanding that 
it had already been previously received by him. 
Where the quantity of contributing oil received by any person in the Philippines in a 
calendar year, when aggregated with the quantity of contributing oil received in the Philippines 
in that yew=-by its su3sidiary or affiliate corporation, exceeds one hundred fifty thousand 
(1 50,000) tons, said person, iiicludiiig its subsidiaries, shall pay contributions in respect of the 
actual quantity received by each, notwithstanding that the actual quantity received by each did 
not exceed 150,000 tons. 
Sec. 16. Reporting of Contributing Oil. - Any person who, in a calendar year, has 
received in the territory of the Philippines contributing oil, as defined in this Act, shall, not later 
than 1 Febi-uary of the following year, report to the Authority the quantity of such oil received. 
The Authority, through the Department of Foreign Affairs, shalI communicate the data at a time 
and in the manner prescribed by the 1992 Fund Convention. 
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Chapter VI. - Action for Compensation 
Sec. 17. Action for Conzpensntion. - An action for compensation on account of pollution 
damage resulting from the incident which occurred in the territory may be brought before the 
Authority against the following persons: 
(a) owner of the polluting ship; or 
(b)-H;tsurer or omer person providing financial security of the said owner's liability for 
pollution. 
Such action shall be filed within three (3) years of the date on which the damage 
occurred, but not later than six (6) years of the date of the incident. 
For this purpose, the Authority shall promulgate the procedure for the adjudication or 
settlemen1 of claims and for the execution of the same. 
Sec. 18. Acljudicntion or Settlement of Claims. - The Authority shall decide claims for 
compensation, or certify the comproinise agreement by the parties within a reasonable period. 
Where the fund under the 1992 Civil Liability Convention is insufficient to satisfy the 
clainis of those who are entitled to compensation, the amount of compensation of each claimant 
shall be distributed pro rata. 
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Where compensation was not obtained or satisfied under the 1992 Civil Liability 
Convention, the claimant may seek compensation under the 1992 Fund Convention. 
The 
Authority shall fLmish the 1992 Fund Convention with its certified decision, together with 
pertinent docuinents, on a claim for pollution damages. 
The decision of Authority shall be final and executory. 
Sec. 19. Intervention by the IOPC Fund. - The 1992 Fund may intervene as a party to any 
legal proceedings instituted against the owner of a ship or his guarantor under Article IX of the 
1992 Civil Liability Convention. 
Chapter VII. - Penalty Provisions 
Sec. 20. Violations of the Act. - The following acts shall be considered violations of the 
Act and the persons responsible shall suffer the corresponding fines: 
(i) Aiiy person who fails to institute or maintain insurance of other financial security required 
under Sec. 12 of this Act; 
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(a) n i p s  of 500gross tons (GT) and below - Two Hundred Thousand Pesos 
(P200,000.00); 
(b) Ships of 501 to 1,000 GT 
- Five Hundred Thousand Pesos 
(P500,OOO.OO); 
(c) Ships of 1,001 to 5,000 GT 
(d) Ships of 5,001 to 10,000 GT 
- One Million Pesos (P 1,000,000.00); 
- Five Million Pesos (P5,000,000.00); 


(e) Ships of 10,001 to 20,000 GT 
(f) Ships of 20,001 GT and above 
- Ten Million Pesos (P10,000,000.00); and 
- Fifteen Million Pesos (PI 5,000,000.00). 
(ii) The owner and the inaster of a ship who operate a ship without maintaining on board a 
certificate of insurance required under Section 12 of this Act; 
(a) First Violation 
(b) Second Violatioii - One Million Pesos (P1,000,000.00); and 
(c) Third Violation 
- Five Hundred Thousand Pesos (P500,OOO.OO); 
- One Million and Five Hundred Thousand Pesos (P1,500,000.00). 
(iii) Any person required under Sec. 15 of this Act to contribute to the International Oil 
Pollution Compensation Fund but nevertheless fails to comply therewith after due notice by the 
Authority; 
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(a) First Violatioii 
(b) Second Violation - Four Million Pesos (P4,000,000.00); and 
(c) Third Violation 
- Three Million Pesos (P3,000,000.00); 
- Five Million Pesos (P5,000,000.00). 
(iv) Failure to Subinit Report of Contributing Oil. - Any person required under Sec. 16 of this 
Act to submit repoi-t of contributing oil but notwithstanding 10-day notice thereto, fails to 
coiiiply therewith; 
(a) First Violation 
(b) Second Violation 
(c) Third 
Violation 
-I One Million 
and Five Hundred Thousand’ Pesos 
- Five Hundred Thousand Pesos (P500,OOO.OO); 
- One Million Pesos (P 1,000,000.00); and 
(P1,500,000.00). 
(v) Any person who knowingly provides false information to the Authority, PCG or PPA and 
any other port authority on any matters required under this Act shall be punished by a fine of not 
less than One Million Pesos (P1,000,000.00) but not exceeding Three Million Pesos 
(P3,000,000.00). 
The fines prescribed in this section and other sections of this Chapter shall be increased 
by at least ten percent (1 0%) every three (3) years to compensate for inflation and to maintain the 
deterrent fhction of such fines. 
Sec. 21. Irzstitutionnl Mechnnism - The Authority shall be the lead implementing agency 
unless otherwise provided in this Act. 
Chapter VIII. - Final Provisions 
Sec. 22. Oil Pollution Mciizngeinent Fund. - An Oil Pollution Management Fund to be 
administered by the Authority is hereby established. Said fund shall be constituted from the 
following sources: 
(a) -.- - Fines iniposed pursuant to this Act, from donations, endowments and grants in the 
foniis of contributions; and 


(b) 
Amounts specifically appropriated for Oil Pollution Fund under the annual 
General Appropriations Act. 
The established f h d  shall finance the following activities: 
(a) Containment, removal, and clean-up operations of the PCG in oil pollution cases; and 
(b) Research, enforcement and monitoring and capability building of relevant agencies 
such as the PCG, Authority and PPA of the Department of Transportation and Communication, 
Department of Environment and Natural Resources, and Department of Energy; Provided 
however, that eighty percent (80%) of the fund shall be maintained annually for the activities set 
forth under item (a) of this paragraph. 
SEC. 23. Appropriations. - The lieads of the concerned agencies shall immediately 
include in their programs the implementation of this Act, the funding of which shall be included 
in the Aiinual General Appropriations Act. 
Sec. 24. Implementing Rules and Regulations. The Authority, in coordination with other 
concerned agencies and- sectors, shall, within six (6) months after the effectivity of this Act, 
proinulgate rules and regulations for the effective implementation of this Act. A manual 
providing for the procedures concerning the enforcement of claims under this Act shall, likewise, 
be developed within the said period. 
The said rules and regulations and manual shall be published in a newspaper of general 
circulation also within the said period. 
Sec. 25. Separability Clause. In the event that any provisions of this Act is declared 
uiicoiistitutioiial, the validity of the remainder shall not be affected thereby 
Sec. 26. Repealing Clause. All laws, decrees, rules and regulations and executive orders 
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contrary to or inconsistent with this ‘Act are hereby repealed or modified accordingly. 
Sec. 27. Effectivity Clause. This Act shall take effect after the completion of its 
publication made once a week for three (3) consecutive weeks in at least two (2) newspapers of 
general circulation. 
Approved,