What is the scope of the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage?
The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund Convention) is a legally binding agreement between states to create and manage an international fund to pay compensation for oil pollution damage resulting from marine oil pollution incidents. This Fund Convention, ratified by the United States in November 2002, is recognized and enforced under the laws of the United States and Virginia. The Fund Convention sets out the scope of the International Fund, which is currently limited to damage caused by spills of persistent oil, which is defined as oil that has a half-life of 15 days or more in marine waters. This Fund is intended to provide compensation for pollution damage to the environment and the property of third parties, as well as for financial losses suffered by coastal states as a result of a marine oil pollution incident. The Fund Convention also establishes the rules for the assessment and payment of compensation for oil pollution incidents. The maximum amount of compensation payable is capped by a Pollution Damage limitation, currently set at 1,200 million Special Drawing Rights (SDRs), which is equal to approximately 1.4 billion US dollars. The Fund Convention also sets out a procedure for countries to make claims for compensation from the Fund. Overall, the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, ratified by the United States and Virginia, sets out the scope, rules and procedures for the International Fund for Compensation for Oil Pollution Damage. This Fund provides a means for states to receive compensation for damage caused by marine oil pollution incidents.
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