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THIRTEENTH CONGRESS OF THE REPUBLIC) 
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OF THE PHILIPPINES 
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Third Regular Session 
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S. No. 
(In substitution Senate Bill Nos. 47, 137, 737, 1267, 1932, and 2032 and House Bill No. 4363, 
o consideration Senate Bill Nos. 36, 736, 1056, and 1802, Proposed Senate Resolution 
takinp 
N
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545, 548 and 552, and the Privilege Speech of Sen. Franklin M. Drilon, and the 
interpellations thereon, delivered on 23 August 2006, entitled: "An Ecological Time Bomb) 
Prepared jointly by the Committees on Environment and Natural Resources, Public Services, and Finance, 
with Senators Flavier, L. Ejercito Estrada, Villar, Angara, Santiago, Cayetano, J. Ejercito Estrada, Revilla, 
Madrigal, Drilon and Arroyo as authors thereof 
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 VIOLATIONS THEREOF. AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: 
CHAPTER I 
GENERAL PROVISIONS 
SEC. 1. Short Title. - This Act shall be known as the "Oil Pollution Compensation Act 
of 2006" 
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 implements 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. 
SEC. 3. Definition of Terms. - For the purpose of this Act: 
(a) "1992 Civil Liability Convention" means the 1992 International Convention on 
(b) "1992 Fund Convention" means the 1992 International Convention on the 
Establishment of an International Fund for Compensation for Oil Pollution 
Damage; 
Civil Liability for Oil Pollution Damage; 
(c) "MARINA means Maritime Industry Authority; 
(d) "PCG" means Philippine Coast Guard; 
(e) "PPA means Philippine Ports Authority; 
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(9 "Affiliate Corporation" means a corporation that is owned or subject to common 
corporate control by another corporation and operated as part of the latter's 
business; 
(9) "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, That a series of occurrences 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 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; 
(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, 
(I) "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 than 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; 
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(m)"Preventive Measures" means any reasonable measures taken by any person 
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(n) "Ship" means any sea-going vessel and sea-home craft of any type whatsoever 
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constructed or adapted for the carriage of Oil in bulk as cargo: Provided, That a 
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Ship capable of carrying Oil and other cargoes shall be regarded as a Ship only 
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when it is actually carrying Oil in bulk as cargo and during any voyage following 
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such carriage unless it is proved that it has no residues of such carriage of Oil in 
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bulk aboard; 
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(0) "State of the Ship's registry" means in relation to registered Ships, the State of 
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registration of the Ship and in relation to unregistered Ships, the State whose flag 
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the Ship is flying; and 
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(p) "Subsidiary Corporation" means a corporation in which control, in the form of 
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ownership of majority shares, is in another corporation, called the parent 
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corporation. 
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SEC. 4. Incorporation of the 1992 Civil Liability Convention and 1992 Fund 
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Convention. - Subject to the provisions of this Act, the 1992 Civil Liability Convention and 
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1992 Fund Convention and their subsequent amendments shall form part of the law of the 
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Republic of the Philippines. 
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CHAPTER II 
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them; 
after an Incident has occurred to prevent or minimize Pollution Damage; 
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. 
STRICT LIABILITY FOR OIL POLLUTION DAMAGE 
SEC 6. Liabi/ify on Pollution Damage. - The Owner of the Ship at the time of an 
Incident, or where the Incident consists 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 limited to: 
(a) Reasonable expenses actually incurred in clean-up operations at sea or on 
(b) Reasonable expenses of Preventive Measures and further loss or damage 
(c) Consequential 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 although the 
property contaminated or damaged as a direct result of an Incident does not belong to 
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(e) Damage to human health or loss of life as a direct result of the Incident, including 
expenses for rehabilitation and recuperation, Provided, costs of studies or diagnoses to 
determine the long-term damage shall also be included; and 
(9 Environmental damages and other reasonable measures of environmental 
restoration. 
(9) Cost of studies to conduct research to determine the long-term damage on 
SEC. 7. Exempting Circumstances - No liability as stated in the immediately 
(a) Resulted from an act of war, hostilities, civil war, insurrection or a natural 
human health and the environment. 
preceding section shall attach to the Owner or his insurer if he proves that the damage: 
phenomenon of an exceptional, inevitable and irresistible character; 
(b) Was wholly caused by an act or omission done with intent to cause damage by 
(c) Was wholly caused bythe negligence or other wrongful act of the government or 
other enforcement agencies responsible for the maintenance of lights or other navigational 
aids in the exercise of that function. If the Owner proves that the Pollution Damage resulted 
wholly or partially 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 he 
exonerated wholly or partially from his liability to such person. 
No claim for compensation for Pollution Damage under this Act may be made against: 
third party; and 
SEC. 8. Persons Exempted from Claims for Compensation for Pollution Damage. - 
(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 
(c) Any charterer, howsoever described, including a bareboat charterer, manager or 
(d) Any person performing salvage operations with the consent of the Owner or on 
services for the Ship; 
operator of the Ship; 
the instructions of a competent public authority; 
(e) Any person taking Preventive Measures; and 
(9 All servants or agents of persons mentioned in paragraphs (c), (d) and (e) hereof, 
unless the damage resulted from their personal act or omission, committed with the intent 
to cause such damage, or committed recklessly and with knowledge 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 and Pollution Damage results therefrom, the Owners of all the Ships concerned, 
unless exonerated under Section 7 hereof, shall be jointly and severally liable for all such 
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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. I O .  Limitation ofLiability- The Owner shall be entitled to limit his liability under 
(a) Three million (3,000,000) units of account for a Ship not exceeding five thousand 
(b) For a Ship with a tonnage in excess thereof, for each unit of tonnage, four 
hundred twenty (420) units of account for each unit in addition to the amount mentioned in 
paragraph (a): Provided, however, That this aggregate amount shall not, in any event, 
exceeds 59.7 million units of account: Provided, further, That the limit of liability of the 
Owner as aforementioned shall be subject to adjustment according to subsequent 
amendments to the 1992 Civil Liability Convention. 
this Act with respect to a particular Incident to a total amount calculated as follows: 
(5,000) units of tonnage; 
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 with intent to cause such damage, or committed recklessly and with knowledge 
that such damage would probably result. 
The "unit of account" referred to in this Section is the Special Drawing Right (SDR) 
as defined by the International Monetary Fund as set forth in the 1992 Civil Liability 
Convention. The said amount shall be converted into national currency on the basis of the 
value of the currency by reference to the SDR on the date that the fund is constituted under 
Section 11 of this Act. 
The SDR is an international reserve asset, created by the IMF in 1969 to 
supplement the existing official reserves of member countries. SDRs are allocated to 
member countries in proportion to their IMF quotas. The SDR also serves as the unit of 
account of the IMF and some other international organizations. Its value is based on a 
basket of key international currencies. 
SEC. 11, Constitution of a Fund. - For the purpose of availing himself of the benefit 
of limitation provided for under Section 10 of this Act following the occurrence of a 
particular Incident, the Owner shall be required to constitute a fund for the total sum 
representing the limit of his liability with the Maritime Industry Authority (MARINA) to cover 
Incidents causing Pollution Damage, Provided, that any claim for compensation from 
.Pollution Damage shall be brought directly to the Regional Trial Courts (RTC). 
The fund can be constituted by depositing the sum or by producing a bank 
guarantee or other financial guarantee acceptable under existing laws and considered to be 
adequate by the Department of Transportation and Communications (DOTC). 
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CHAPTER IV 
SYSTEM OF COMPULSORY INSURANCE AND CERTIFICATION 
SEC. 12. Maintenance of Compulsory Insurance cIr Ofher Financial Security. - All 
Owners shall be required annually by the MARINA to maintain insurance or other financial 
security for Pollution Damage in the sums fixed by applying the limits of liability under 
Section I O  of this Act. 
SEC. 13. Issuance of a Certificate. - A certificate attesting that an insurance or any 
other financial security is in force in accordance with the provisions of this Act shall be 
issued to each Ship carrying more than two thousand (2,000) tons of Oil in bulk as cargo by 
the MARINA. With respect to a Ship not registered in a convention-member State, such 
certificate may be issued or certified by the MARINA. 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 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 of the insurance or other financial security. 
SEC. 14. Enforcement. - Ship carrying more than two thousand (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 insurance or financial security for Pollution Damage 
required by this Act. 
For this purpose, the PPA or any other port authorities shall deny port services to 
said Ship without such certificate. 
If any such Ship 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 MARINA 
or any convention-member State. 
The Owner and master of the Ship referred to in the immediately preceding 
paragraph shall be jointly and severally liable to the fines set forth in this Act. Such Ship 
shall be prevented from leaving unless the appropriate fines shall have been paid to the full 
satisfaction of the MARINA. 
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. Confribufions fo the lnternafional Oil Pollufion Compensafion Fund. - Any 
person who has received more than one hundred fifty thousand (150,000) tons of 
contributing Oil in a calendar year in all ports or terminal installations in the Philippines 
through carriage by sea, shall pay contributions to the International Oil Pollution 
Compensation (IOPC) Fund in accordance with the provisions of the I992 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 terminal installation within the Philippines, notwithstanding 
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 year by its subsidiary or affiliate corporation, exceeds one hundred fifty 
thousand (150,000) 
tons, said person, including 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 one hundred fifty thousand (150,000) tons. 
SEC 16. Reporfing 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 February 1 of the following year, report to the Department of Energy (DOE) the 
quantity of such Oil received. DOE, through the Department of Foreign Affairs, shall 
communicate the data at a time and in the manner prescribed by the 1992 Fund 
Convention. 
that it had already been previously received by him. 
CHAPTER VI 
ACTION FOR COMPENSATION 
SEC. 17. Action for Compensation. - An action for compensation on account of 
Pollution Damage resulting from the Incident which occurred in the territory may be brought 
before the RTC against the following persons: 
(a) Owner of the polluting Ship; or 
(b) Insurer or other person providing financial security of the said Owner's liability for 
pollution. 
For this purpose, foreign corporation, partnership, association or individual, whether 
or not licensed to transact business in the Philippines by any appropriate government 
agencies, providing such insurance or financial security for Pollution Damage shall be 
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considered transacting or doing business in the Philippint !s arid shall be subject to the 
jurisdiction of the regular judicial courts of the country. 
Such action shall be filed within three years of tht? date on which the damage 
The PCG shall investigate, motu proprio or through written undertaking of a 
complainant, any Incident, claim for compensation or violation of this Act, and shall 
forthwith file appropriate action with the RTC. 
It shall likewise provide the complainant necessary technical evidence or any 
assistance, whether or not testimonial or documentary, insofar as the claim for 
compensation or violation of this Act is concerned. 
occurred, but not later than six years of the date of the lncideiit. 
Filing' of the action under this section shall only require payment of filing fees 
equivalent to ten per centum (10%) of the regular rates established therefore by the 
Supreme Court of the Philippines. However, indigent plairitil'fs shall be exempt from 
payment of docket and other lawful fees, and of transcripts of stenographic notes which the 
court may order to be furnished him. The amount of the docket and other lawful fees which 
the indigent was exempted from paying shall be a lien on any judgment rendered in the 
case favorable to the indigent, unless the court otherwise provides. 
SEC. 18. Adjudication or Settlement of Claims. - The RTC shall decide claims for 
compensation or certify the compromise agreement by the parties within a reasonable 
period. 
Where compensation was not obtained or satisfied under the 1992 Civil Liability 
Convention, the claimant may seek compensation under the 1992 Fund Convention. The 
RTC shall furnish the IOPC Fund with its certified decision, together with pertinent 
documents, on a claim for Pollution Damages. 
Where the fund under the 1992 Civil Liability Convention is insufficient to satisfy the 
claims of those who are entitled to compensation, the amount of Compensation of each 
claimant shall be distributed pro rata. 
SEC. 19. Intervention by the / O f  C Fund. - The IOPC 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 VI1 
PENALTY PROVISIONS 
SEC. 20. Violation of the Act. - The following acts shall be considered violations of 
the Act and the persons responsible shall suffer the corresponding fines: 
(a) Any person who fails to institute or maintain insurance or other financial 
security required under Section 12 of this Act: 
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fifty thousand pesos (P250,OOO.OO); 
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pesos (P500,OOO.OO); 
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(1) Ships of 500 gross tons (GRT) and below - not less than One 
hundred thousand pesos (P100,OOO.OO) but not more than Two hundred 
(2) Ships of above 500 to 1,000 GRT - not less than Two hundred fifty 
thousand pesos (P250,OOO.OO) but not more than Five hundred thousand 
(3) Ships of above 1,000 to 5,000 GRT - not less than Five hundred 
thousand pesos (P500,OOO.OO) but not more than One million pesos 
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(PI ,000,000.00); 
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(4) Ships of above 5,000 to 10,000 GRT - not less than One million 
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pesos 
(Pl,OOO,OOO.OO) 
but not more than 
Five million pesos 
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(P5,000,000.00); 
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(5) Ships of above 10,000 to 20,000 GRT - not less than Five million 
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pesos 
(P5,000,000.00) but not more than Ten 
million pesos 
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(PlO,OOO,OOO.OO); and 
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(6) Ships of above 20,000 GRT - not less than Ten million pesos 
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(P?O,OOO,OOO.OO) 
but 
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Fifteen 
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pesos 
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(PI 5,000,000.00). 
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(3) Third violation - One million five hundred thousand pesos 
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(PI ,500,000.00). 
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(PI ,500,000.00). 
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(b) The Owner and the master of a Ship who operate a Ship without maintaining on 
board a certificate of insurance required under Section 13 of this Act: 
(1) First violation - Five hundred thousand pesos (P500,OOO.OO); 
(2) Second violation - One million pesos (Pl,OOO,OOO.OO); and 
(c) Any person required under Section 15 of this Act to contribute to the IOPC Fund 
but nevertheless fails to comply therewith after due notice by the MARINA: 
(1) First violation - Three million pesos (P3,000,000.00); 
(2) Second violation - Four million pesos (P4,000,000.00); and 
(3) Third violation -Five million pesos (P5,000,000.00). 
(d) Failure to Submit Report of Contributing Oil. -Any person required under Section 
16 of this Act to submit report of contributing Oil and notwithstanding IO-day notice thereto, 
(1) First violation - Five hundred thousand pesos (P500,OOO.OO); 
(2) Second violation - One million pesos (PI ,000,000.00); and 
(3) Third violation - One million and five hundred thousand pesos 
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(d) Any person who shall refuse, obstruct, or hamper the entry of the duly authorized 
representatives of the Department or any person authorized under this Act aboard any Ship 
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or establishment pursuant to this Act shall be liable to pay a fine not exceeding One 
hundred thousand pesos (PI 00,000.00); 
(e) Any Ship apprehended for violation of this Act may be subjected to detention. 
The fines prescribed in this Section and other sections of this Chapter shall be 
increased by at least ten percent (10%) every three years to compensate for inflation and to 
maintain the deterrent function of such fines. 
SEC. 21. lnsfifufional Mechanism. - The DOTC shall be the lead implementing 
agency unless otherwise provided in this Act. 
CHAPTER Vlll 
FINAL PROVISIONS 
SEC. 22. Oil Pollution Management Fund. - An Oil Pollution Management Fund 
(OPMF) to be administered by the MARINA is hereby established. Said Fund shall be 
constituted from: 
(a) Contributions of Owners and operators of tankers and barges hauling Oil and/or 
petroleum products in Philippine waterways and coast wise shipping routes. During 
its first year of existence, the Fund shall be constituted by an impost of ten centavos 
(1Oc) per liter for every delivery or transshipment of Oil made by tanker barges and 
tanker haulers. For the succeeding fiscal years, the amount of contribution shall be 
jointly determined by Marina, other concerned government agencies, and 
representatives from the Owners of tankers barges, tankers haulers, and Ship 
hauling Oil and/or petroleum products. In determining the amount of contribution, the 
purposes for which the fund was set up shall always be considered; and 
(b) Fines imposed pursuant to this Act, grants, donations, endowment from various 
sources, domestic or foreign, and amounts specifically appropriated for OPMF under 
the annual General Appropriations Act. 
The Fund shall be used to finance the following activities: 
(a) Immediate containment, removal and clean-up operations of the PCG in all Oil 
(b) Research, enforcement and monitoring activities of relevant agencies such as 
the PCG, MARINA and PPA, and other ports authority of the DOTC, Environmental 
Management Bureau of the DENR, and the DOE: Provided, That ninety percent (90%) of 
the.Fund shall be maintained annually for the activities set forth under item (a) of this 
paragraph: Provided, further, That any amounts specifically appropriated for said Fund 
under the General Appropriations Act shall be used exclusively for the activities set forth 
under item (a) of this paragraph. 
except for the compensation of those involved in clean-up operations. 
pollution cases, whether covered by this Act or not; and 
In no case, however, shall the Fund be used for personal services expenditures 
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Provided, that amounts advanced to a responding entity or claimant shall be 
considered as advances in case of final adjudicationlaward by the RTC under section 18 
and shall be reimbursed to the Fund. 
SEC. 23. Appropriations. - The Secretary of the DOTC shall include in the 
Department's program the implementation of this Act, the funding of which shall be included 
in the annual General Appropriations Act. 
SEC. 24. lmplemenfing Rules and Regulations. - The DOTC, in coordination with 
other concerned agencies and sectors, shall, within three months after the effectivity of this 
Act, promulgate 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. 
unconstitutional, the validity of the remainder shall not be affected thereby. 
SEC. 25. Separability Clause. - In the event that any provision of this Act is declared 
SEC. 26. Repealing Clause. - All laws, decrees, rules and regulations and executive 
orders contrary to or inconsistent with this Act are hereby repealed or modified accordingly. 
SEC. 27. Effectivity Clause. - This Act shall take effect afler the completion of its 
publication made once a week for three consecutive weeks in at least two newspapers of 
general circulation. 
Approved, 
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