TI IR 
ENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
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S E N A T E  
S. B. NO. 
Introduced by SENATOR EDCARDO J. ANCARA 
EX P LAN AT0 RY NOTE 
Awareness in protecting international as well as territorial waters is and should 
rightly be an increasing global concern, especially since on our end, Philippines is 
tagged as one of the countries with the highest incidence of oil spills. Research results 
are unequivocal: even if oil exposure is not immediately lethal, it can cause long-term 
harm. 
Year 1997, the Philippine Senate ratified the International Convention on Civil 
Liability for Oil Pollution Damage (or the 1969 Liability Convention) and the 
International Convention on the Establishment of an International Fund for 
Compensation for Oil Pollution Damage which were adopted in Brussels, 29 
November 1969 and London, 27 November 1992, respectively. But while these two 
provide a system of compensation for oil pollution damage and for the cost of 
recovery measures, whenever taken, to prevent or minimize such damage, an 
implementing legislation has yet to be enacted by Congress pursuant to the two 
conventions. 
Thus, this measure is introduced. The millions of tons of oil that quietly end up 
in our waters every year, both from accidental and occupational oil pollution, the 
immense growth in maritime transport of oil and the size of tankers, the increasing 
amount of chemicals being carried in the sea and the mounting concern for the 
world's environment, all these taken together, emphasize the need for the immediate 
approval of this bill. 
P 
EDGA 
tp?a 
D O ]  /& 
A 
Senator 
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THIRTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
~~ 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT ESTABLISHING AN INTERNATIONAL COMPENSATION FUND FOR 
OIL POLLUTlON DAMAGE, PROVIDING PENALTIES THEREOF, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
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CHAPTER 1. 
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GENERAL PROVISIONS 
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Section 1. Short Title. - This Act shall be known as the “Oil Pollution Liability 
and Compensation Act (OPA) of 2005” 
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Section 2. Declaration of Policy. - The State, in the protection of its marine 
wealth in its archipelagic waters, territorial sea, and exclusive economic zone, adopts 
the internationally accepted principles of international law, 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 on the Establishment of an international Fund for Compensation 
for Oil Pollution Damage. 
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Section 3. Definition. For purposes of this Act: 
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(a) “Act of God” means an unanticipated grave natural disaster or other natural 
phenomenon of an exceptional, inevitable, and irresistible character the effects 
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of which could not have been prevented or avoided by the exercise of due 
care or foresight; 
(b) 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; 
(c) “Claim” means a request, made in writing for a sum certain, for compensation 
for damages or removal costs resulting from an incident; 
(d) “Contributing 0il”means crude oil and fuel as herein defined: 
1. “Crude Oil” means any liquid by 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 quality equivalent to the American Society for Testing and Materials 
Specification for Number Four Fuel Oil (Designation D 396-69)”or heavier 
e) “Discharge” means any emission (other than natural seepage), intentional or 
unintentional, and includes, but is not limited to, spilling, leaking, pumping, 
pouring, emitting, emptying, or dumping; 
f) “Exclusive Economic Zone” refers to the seazone extending 200 nautical miles 
from the Philippine coast over which has special rights over the exploration 
and use of marine resources; 
g) “Fund” means the International Oil Pollution Compensation Fund; 
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: 
i) “MARINA” is the Maritime Industry Authority; 
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j) WiPmeans any persistent hydrocarbon mineral oil such as crude oil, fuel oil, 
board a ship as 
heavy diesel oil, and lubricating oil, whether carried on 
cargo or in bunkers of such a ship; 
k) ’/Oil Pollution Compensation Board” or. Board means the arbitration panel 
created and empowered by this Act to any dispute arising between the ship 
owner and claimants on matter covered by this Act. 
I) “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; 
m) /‘PCC” is the Philippine Coast Guard; 
n) [‘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. 
(0) fl /‘Preventive Measures” means any reasonable measures taken by any person 
after an incident has occurred to prevent or minimize pollution damage; 
$!) ’(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 on 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; 
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“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; AND 
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crM “Subsidiary Corporation’ means a corporation in which control, 
in 
the form of ownership of majority shares, as in another corporation, called the 
parent corporation. 
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Section 
4. 
Scope. 
- 
This 
law 
shall , 
apply 
exclusively 
to 
pollution damage as herein defined occurring within Philippine territory including its 
territorial sea and its exclusive economic zone, and to preventive measures, wherever 
taken to prevent or minimize such damage. 
STRICT 
CHAPTER I1 
IABILITY FOR OIL POLLUTION DAMAGE 
Section 5. fiabilify on Oil Pollution Damage. - The owner of a ship at the time 
of an incident, or where the incident consists of a series of occurrences, at the time of 
such first occurrence, shall be liable for any pollution damage caused by the ship as a 
result of the incident. 
Oil pollution damages shall include, but not be limited to the following: 
(a) Reasonable expenses actually incurred in clean-up operations at sea or on 
shore; 
(b) Reasonable 
expenses 
of 
preventive 
measures 
undertaken 
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and further loss or damage caused thereby; 
(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 
been 
polluted 
as 
a 
direct result of an incident; 
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(e) Damage to 
human health or 
loss 
of 
life as 
a direct 
result 
of the incident; and 
(0 Environmental 
damages 
and 
other 
reasonable 
measures 
of 
environmental restoration. 
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Section 6. Exempting Circumstances. - No liability, as enumerated in Section 
5 hereof, shall accrue to the owner or his insurer if he/ she proves that the damage: 
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(a) Resulted from an act of God; 
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(b) Resulted from an act of war, hostilities, civil war, insurrection; 
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(c) Was wholly caused by an act or omission done with intent to cause 
damage by a third party; and 
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(d) Was wholly caused by the negligence or other wrongful act of the 
government or other agencies responsible for the maintenance of lights or 
other navigational aids in the exercise of that function. 
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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 be 
exonerated wholly or partially from his liability to such person. 
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made against the following: 
Section 7. Persons Exempted from Claims for Compensation for Pollution 
Damage. - No claim for compensation on pollution damage under this Act shall be 
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(a) The servants or agents of the owner or members of the crew; 
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(b) The pilot or any other person who, without being a member of the crew, 
performs services for the ship; 
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ship; 
(c) Any charterer, including a bareboat charterer, manager or operator of the 
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(d) Any person performing salvage operation with the consent of the owner or 
on the instructions of a competent public authority; 
(e) Any person taking 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 recklessly and with knowledge 
that such damage would probably result. Nothing in this Act shall 
prejudice any right of recourse of (he owner against third parties. 
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parties. 
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Section 8. 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, 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 
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1s 
CHAPTER 111 
BENEFIT OF LIMITATION ON LIABILITY 
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calculated as follows: 
Section 9. Limitation 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 
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(a) Three Million (3,000,000) units of account for a ship not exceeding five 
thousand (5,000) units of tonnage; and 
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2s 
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3.0 
(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 the immediately preceding paragraph: 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 of a ship as aforementioned shall be subject to adjustment according 


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1992 Fund Convention. 
to subsequent amendments of the 1992 Civil Liability Convention and 
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The limited liability under this Section may not be availed of 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 recklessly and with 
knowledge that such damage would probably result. 
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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 Section 1 l o f  this Act. 
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Section IO. Constitution of a Fund. - For the purpose of availing the benefit of 
limitations on liability as provided in Section 9, the owner of a ship shall constitute a 
fund for the total sum representing the limit of his liability with the Board. 
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adequate by the Board. 
The fund can be constituted by depositing the sum or by producing a bank 
guarantee or other financial guarantee acceptable under existing laws considered 
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been compiled with. 
Section 11. 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 
MARINA after a determination that the requirements of the preceding section have 
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particulars. 
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 Liability Convention and shall contain the following 
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a. Name of ship and port of registration; 
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b. Name and principal place of business of the owner; 
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C. Type of security; 
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security is established; and 
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 
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e. Validity period of the certificate which shall not be longer than the period 
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of 
validity 
of 
the 
insurance 
or 
other 
financial 
security. 
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Section 12. Znforcement. - Any 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 (EEZ) without a valid certificate of insurance or financial 
security for oil pollution damage required under this Act. For this purpose, the PPA 
shall deny port services to said ship absent such certificate. 
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If any 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. 
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Indemnity Club. 
The owner and master of the ship shall be jointly and severally liable for 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 Protection and 
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to ships. 
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 
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CHAPTER IV 
CONTRIBUTION TO THE INTERNATIONAL 
OIL POLLUTION COMPENSATION FUND 
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Section 13. Payment of Contributions to the International Oil Pollution 
Compensation Fund. - Any person who has received more than one hundred fifty 
thousand (1 50,000) 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 
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International Oil Pollution Compensation Fund (IOPC) in accordance with the 
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provisions of the 1992 Fund Convention. 
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A person shall be deemed to have received contributing oil, for contribution 
purposes, if he received the same: 
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(a) From another country; or 
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(b) From another port or terminal installation within the Philippines, 
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notwithstanding that it had been previously received by him. 
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Where the quantity of contributing oil received by any person in the 
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Philippines in a calendar year, when aggregated with the quantity of contributing oil 
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received in the Philippines in that year by its subsidiary or affiliate corporation, 
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exceeds one hundred fifty thousand (150,000) tons, said person, including its 
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subsidiaries, shall pay contributions in respect of the actual quantity received by each 
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notwithstanding that the actual quantity received by each did not exceed one 
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hundred fifty thousand (1 50,000) tons. 
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Convention. 
Section 14. Report of Confriboting 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 February of the following year, report to the PCC the quantity of 
such oil received. Likewise the PCC, through the Department of Foreign Affairs, shall 
communicate the data at a time and in the manner prescribed by the1992 Fund 
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CHAPTER V 
COMPENSATION FOR OIL POLLUTION DAMAGE 
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Section 15. Action for Compensation. - An action for compensation on 
account of pollution damage resulting from the incident which occurred in the 
territory may be brought against the following persons: 
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(a) Owner of the polluting ship; 
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(b) Insurer or other person providing financial security of the said owner’s 
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liability for pollution. 
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(c) Foreign corporations, partnerships, associations and individuals whether 
licensed or not,to transact business in the Philippines. 
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Such action shall be filed within three (3) years from the date on which the 
damage occurred, but not later than six (6) years from the date of the incident. 
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Section 16. 
Adjudication and Settlement of Claims. - Any action for 
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compensation shall be brought directly against the owner of the ship pursuant to the 
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principle of strict liability for pollution damage. Should a dispute arise with respect to 
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amount of the claim, the patties shall be required to arbitrate before tile Board. 
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shall act as chairman. 
Section 17. Creation and Composition of the Board. - There is hereby created 
an Oil Pollution Compensation Board which shall be composed of (1) representative 
from the insurance industry, one (1) from the Office of the Secretary of the 
Department of Transportation and Communications and one (1) from the PCG who 
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immediately executory pending appeal. 
The Board shall have the power to promulgate its rules and regulations for the 
speedy, efficient, inexpensive, and just compensation of claims consistent with the 
principle of strict liability for pollution damage. The parties shall be bound by the 
decision of the Board which shall be final and executory unless appealed to the Court 
of Appeals within fifteen (15) days from receipt thereof. The decision shall be 
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Section 18. Presentation of Claim with the International Oil Pollution 
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Compensation Club ( IQPC) 
Fund. - Claims in excess of the liability of the ship 
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owner shall be brought before the IOPC Fund. 
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Liability Convention. 
The 1992 Fund may intervene as party to any legal proceedings instituted 
against the owner of a ship or his guarantor under Artiicle IX of the 1992 Civil 
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CHAPTER VI. 
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PENALTY PROVISIONS 
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Section 79. Violations of the Act. -The following shall constitute as violations 
of this Act and the persons responsible shall suffer the corresponding fines: 
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(i) Any person who fails to institute or maintain insurance of other financial 
security required under Section 13 of this Act: 
a) Ships 
of 
500 
gross 
tons 
(GT) and 
below - Two 
Hundred 
Thousand Pesos (P200,OOO.OO); 
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b) Ships of 501 to 1,000 GT - Five Hundred Thousand Pesos (P500,OOO); 
c) Ships of 1,001 to 5,000 GT - One Million Pesos (P 1,000,000); 
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d) Ships of 5,001 to 10,000 GT - Five Million Pesos (P 5,000,000); 
e) Ships of 10,001 to 20,000 GT -Ten Million Pesos (P 10,000,000); 
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f) Ships of 20,001 GT and above - Five Million, Pesos (P 5,000,000). 
(ii) 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: 
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a) 1" Violation - Five Hundred Thousand Pesos (P500,OOO); 
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b) 2"d Violation- One Million Pesos (Pl,000,000); and 
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c) 3'd Violation - One Million and Five Hundred Thousand Pesos 
(PI ,500,000). 
(iii) Any person required under Section 15 of this Act to contribute to the 
International Oil Pollution Compensation Fund but nevertheless fails to 
comply therewith after due notice by the PCG: 
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a) Is' Violation -Three Million Pesos (P3,000,000); 
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b) 2"d Violation - Four Million Pesos (P4,000,000); 
c) 3rd Violation - Five Million Pesos (P5,000,000) 
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(iv) Failure to Submit Report of Contributing Oil.- Any person required under 
Section 15 of this Act to submit report of contributing oil but notwithstanding 
IO-day notice thereto, fails to comply therewith: 
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(a) 1" Violation - Five Hundred Thousand Pesos (P500,OOO); 
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(b) 2"d Violation - One Million Pesos (Pl,OOO,OOO); 
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(c) 3d Violation - One Million and Five Hundred Thousand Pesos 
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(PI ,500,000). 
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(v) Any person who knowingly provides false information to the Authority, or 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 (Pl,OOO,OOO.OO) 
but not exceeding Three Million Pesos (P3,000,000.00). 
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In addition to the penalties above prescribed, the implementing rules and 
regulations of this Act shall provide such reasonable administrative penalties as may 
be necessary for the effective implementation of this Act. 
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The fines prescribed in this section and other sections of this Chapter shall be 
increased by at least ten percent (10%) every three (3) years to compensate for 
inflation and to maintain the deterrent function of such fines. 
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Section 20. lnsfifufional Mechanism. - The PCG, in consultation/ coordination 
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with the appropriate government agency/ office, shall perform the following 
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functions, to wit: 
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(a) Scientific and Technical Aspects 
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1. Provide technical expertise to assess / verify damages; 
2. Provide baseline/ pre-spill information; 
3. Monitor coastal areas affected; 
4. Provide methods for assessing damaged resources; and 
5. Provide methods for restoring damaged resources. 
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(b) Administrative Aspect. To properly administer the Fund, the PCG shall: 
1. Represent the Philippines’ claims to both 1992 Civil Liability 
Convention and 1992 Fund Convention; 
2. Perform the task of a lead coordinator in matters relating to oil spill 
response; 
3. Coordinate with claimants and the Secretariat of both Conventions; and 
4. Document costs incurred as a result of the response operations. 
(c) Economic Aspect: 
1 .  Make available valuation of coastal resources and direct and indirect 
se TV i ces; 
2. Provide appropriate methods for estimating damages; and 
3. Provide accurate methods for estimating restoration cost and benefits. 
(d) Legal Aspect 
1. Provide scope of damage for which compensation can be assessed; 
2. Provide allowable methods for estimating damages. 
CHAPTER VII. 
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FINAL PROVISIONS 
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Section 21. Appropriations. The heads of the concerned agencies shall 
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immediately include in their programs the implementation of this Act, the funding of 
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which shall be included in the Annual General Appropriations Act. 
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Section ,22. Implementing Rules and Regulations. The PCG, in coordination 
with other concerned government agencies and relevant sectors, shall, within six (6) 
months after the affectivity of this Act, promulgate the rules and regulations for the 
effective implementation of this Act. 
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A claim manual providing for the procedure concerning the presentation of 
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claims 
after 
this 
Act 
shall 
likewise 
be 
made 
and 
distributed. 
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The said rules and regulations and manual shall be published in a newspaper of 
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general circulation within the said period. 
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affected thereby. 
Section 23. §eparabi/ity Clause. If any provision of this Act or an application 
thereof to any person or circumstance is held to be invalid, the other provisions of this 
Act, and the application of such provision to other persons or circumstances, shall not be 
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Section 24.. Repealing Clause. - All laws, executive orders, rules and 
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regulations contrary to or inconsistent with this Act are hereby repealed or modified 
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accordingly. 
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Section 25. EfTecfivify Clause. - This Act shall take effect within fifteen (15) 
days following the completion of its full publication in the Official Gazette or in at 
least two (2) newspapers of general circulation, whichever comes first. 
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Approved, 
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