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Saturday, April 21, 2018

THE SECOND WAVE OF ERIKA-PROPOSALS PRESENTED BY THE EUROPEAN COMMISSION

The main elements of the European Commission’s ‘second wave’ of post-Erika proposals were officially revealed in Brussels last week.

The package contained no big surprises compared to what was already known through INTERTANKO’s regular contacts with the EU institutions.  As reported earlier, however, the main elements of this second package will consist of :

1/  A proposal for a revised monitoring (VTS) and reporting system for vessels transporting hazardous and polluting cargoes in EU waters.  Whereas the existing European mechanisms for monitoring and traffic management have a limited geographical scope, are concentrated on the principal areas of traffic convergence and without real bearing on the events likely to occur beyond radar or radio coverage, the Commission envisages a better integrated, more harmonised and electronically based system.

2/  A proposal for the establishment of a European Safety Agency that should provide the Commission and the Member States with technical support to apply and update the Community legislation, to control its implementation and to measure its effectiveness. More precisely, the Agency should be :

  • inspecting, in situ, the conditions under which the Port State control is carried out by the Member States
  • gathering data and operating databases on safety at sea (and in particular developing EQUASIS)
  • tasks involving the monitoring of shipping and the management of information relating to sea traffic
  • assessing and auditing the classification societies
  • being involved in or coordinating activities relating to investigations following an accident at sea

 3/ A proposal regarding liability and compensation

The Commission will propose a major overhaul – as far as possible within the context of the IMO - of the existing international system for oil spill compensation (CLC/IOPC) in order to address perceived deficiencies in the system such as inadequacy of the limits for liability and compensation (the Commission is still referring to EUR 1 billion as an appropriate level), and what is seen as an imbalance between the responsibilities of the various players involved in the transport of oil at sea and their exposure to liability, producing few incentives for the players to ensure that oil is only carried on board tankers of an impeccable quality. The Commission particularly points at such as:

  • the right of shipowners to limit their liability is practically unbreakable;
  • neither the nature of the spilled oil nor its impact on the biological environment as such are reflected in the liability;
  • the liability is channelled to the registered shipowner only. The regime accordingly protects a number of other players (including operators, managers, charterers), who may well exercise as much control over the transport as the registered owner of the ship;
  • additional compensation claims outside the regime are not allowed.

 The first concern is considered the most pressing one, as it is the one most directly concerned with the adequate compensation of victims of an oil spill. In order to remedy this, the Commission proposes to complement the existing international two-tier regime through the creation of a European ‘third-tier’ fund, which would compensate internationally eligible claims relating to oil spills in European waters which exceed the limit of the IOPC Fund. The European Fund would thus ‘top up’ the deficit of the IOPC Fund in cases where claims that have been deemed to be eligible under the latter regime have not been fully compensated due to insufficient resources. Compensation from the European fund would thus be based on the same principles and rules as the current IOPC Fund system, but subject to a ceiling which is deemed to be sufficient for any foreseeable disaster. As explained in the Communication on the safety of seaborne oil trade, an overall ceiling of EUR 1 billion would provide the necessary safeguards. This fund would be financed by European oil receivers according to procedures similar to those of contributions to the IOPC Fund. This European Fund is intended to provide an interim guarantee for European citizens that they will be adequately compensated, until the levels of the international regime are set at a sufficiently high level. By its nature it would only be activated once a spill that exceeds, or is likely to exceed, the IOPC limit has occurred in EU waters.

Whereas the European “third layer” is proposed as an “immediate” stop-gap measure, the Commission proposes to deal with the other listed deficiencies within the context of the IMO alone.

HEARINGS ON THE 16 AND 17 OCTOBER - THE INITIAL REACTIONS

Hearings on the new proposals were held by the Commission with industry bodies such as INTERTANKO on Monday 16 October and with EU member state’s representatives on the 17 October.  At the first meeting INTERTANKO voiced basic support for the Commission proposals on a reporting system and the concept of a Maritime safety authority.  On the main point – the liability question – INTERTANKO and all other shipping organisations have so far taken the view that all changes (including a higher level of compensation) must be dealt with within the context of the IMO. We understand that the initial reactions from EU Member States were much the same.

The Commission will now finalise its proposals and present them in full before the Council of Transport Ministers in December.  That will also be the moment when the real and official debate in the Council, Parliament and with industries will start.