Tanker operators wants deferment of Oil Pollution Compensation Act

Tanker operators as well as oil companies are seeking the deferment of the implementation of Republic Act 9483 or the Oil Pollution Compensation Act until a new law is passed.

The stakeholders, led by the Philippine Petroleum Sea Transport Association (Philpesta), Association of Tankers Owners of the Philippines (Atophil), and the ‘big 3′ oil firms Shell, Chevron (Caltex) and Petron, claimed that the law was poorly crafted and stand to increase prices not only shipping rates but also oil prices down to the basic commodities. RA 9483, on the other hand, seeks to implement the 1992 Civil Liability Convention (CLC) and the 1992 International Oil Pollution Fund (IOPF) Convention.

The law requires tanker operators to contribute P0.1 0 centavos of their freight rates to the oil pollution fund for every liter for every delivery. It likewise obligates oil firms to contribute to the IOPF once150,000tons of oil is delivered to them.

In a joint position paper, the group said they are not totally opposing the law itself as it likewise establishes vital aspects in the tanker operations but the non-consultation with them could be the missing piece of the puzzle to craft a good law beneficial to the state and the operators themselves.

It added that the law only subject Philippine-flag vessels but silent on whether international vessels that will spill oil on Philippine waters will be castigated using the same law. “The law should not only target Philippine-flag vessels.

The law should subject all oil-carrying vessels including international tankers and should not choose on which to punish. It also does not implement the CLC and the IOPC conventions as provided for in its title but merely provides a domestic regime for oil pollution compensation;’ the group explained in their paper, which they presented during their first consultation meeting with the Maritime Industry Authority (Marina) and the Department of Transportation and Communication (DOTC) on the implementing guidelines of the act.

“Instead, if the government wants a separate law to cover oil pollution made by vessels on Philippine waters, should have completely adopted the full International Maritime Organization (IMO) convention on maritime pollution instead of choosing only certain provisions of the convention,” the group stressed, adding that that failure only exposes the country to liability for not properly implementing its treaty obligations.

“The 10-centavo contribution is also a pass-on cost on our part. It is not us that will suffer but the end users as they have to pay not only high price of oil but eventually transportation and the cost of basic commodities;’ the group added. The group explained that their current insurance coverage such as the Protection and Indemnity (P&I) Club of London and the IOPF are enough to cover for any liability of the ship owner during incidents.

Based on average, the P&l coverage of a member-tanker could be access once all measures locally are exhausted. In the P&l coverage, the member is entitled to an average of 4.5 million standard drawing rights (SDR) multiplied by $1.3 per one SDR or approximately P1 to P1.5 billion aside from the same amount a member could draw from the IOPF after spending the said amount to cover its liabilities. Records, on the other hand, showed that 99% of tankers operating in the local trade are members of the P&l club and the lOPF.

“We think this is enough and no need for a domesticated law on oil pollution;’ the group stressed. Earlier, the Marina expressed the same opinion that the existing P&l coverage of almost all big-time vessel operators in the country is enough to cover liabilities related to maritime pollution. It added that the new law is only a redundancy to existing international laws, which even local tanker operators follow to the dot.

To date, the Marina, which is the fund manager, is fast tracking hearings on the guidelines of the act and expects to come out of it by the end of the month.

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