The International Oil Pollution Compensation (IOPC) Funds has agreed to work with the Shipowners’ Club on meeting mounting claims from a tanker spill off the Philippines.
At a recent IOPC Funds meeting, it was agreed that claims resulting from the sinking of the 1,143-dwt Princess Empress (built 2022) are likely to exceed the shipowner’s limitation of liability agreed under international conventions.
“The 1992 Fund Executive Committee decided to authorise the director to make payments in respect of losses arising out of this incident. The committee also authorised him to sign an agreement on interim payments with the club, which would apply retrospectively,” the London-based IOPC Funds said after its meeting.
In March, the Princess Empress sank in poor weather off Oriental Mindoro in the Philippines with 800,000 litres of fuel oil as cargo onboard. The wreck lies at a depth of 400 metres.
The subsequent oil spill led to a ban on local fishing and polluted coastlines, including environmentally sensitive areas.
In TV coverage of a government hearing into the incident, the owner of the tanker, RDC Reield Marine Services, said it paid $22,000 in premium for the vessel’s insurance cover.
The protection and indemnity policy for the tanker, which covers claims related to third-party damage, was placed with the Shipowners’ Club, a member of the International Group of P&I Clubs.
The owner insisted that the ship is new and not, as has been widely reported, an old vessel that has been rebuilt.
Frizie Tee, vice president of RDC Reield Marine Services, told the hearing: “We sincerely apologise to the communities, the local and national government and the agencies. Elements beyond human control such as weather disturbance in the area resulted in this unfortunate event.”
Around 41,000 families have been reported affected by the spill and Philippine Peso 611m ($10.8m) has been paid out in livelihood support so far.
The Shipowners’ Club and the IOPC Funds have established several joint claims offices in the region.
The estimated cost of environmental damage has been put at Peso 9.4bn.
The initial insurance costs of the incident will be met by the Shipowners’ Club, but costs over $10m will be placed with the International Group’s claims pool.
Sums that exceed the shipowner’s limitation under the 1992 Civil Liability Convention and the 2006 Small Tanker Oil Pollution Indemnification Agreement are met by the IOPC Funds.
The IOPC’s oil compensation fund is made up of contributions from a levy on international oil exports.
