Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

OIL SPILL IN SINGAPORE UNDERINSURED

Reprints

LONDON-Singapore is likely to get only about $13 million in compensation even though the cost to clean up its worst-ever oil spill may hit $100 million.

The pollution came from the spill of more than 25,000 tons of crude oil at sea after an Oct. 15 collision between two tankers.

All the spillage came from the smaller of the two, the Cyprus-registered Evoikos, which had punctures to three tanks when the Thai-registered tanker Orapin Global rammed it broadside. The Orapin Global was empty at the time of the accident. Singapore has arrested the captains of both tankers.

The Maritime Port Authority of Singapore has said it warned the Orapin Global about 15 minutes before the collision that it was in the wrong shipping lane.

The Evoikos is entered with the U.K. P&I Club, a protection and indemnity mutual that covers the vessel for third-party damage, including oil pollution.

Local officials in Singapore estimate cleanup costs at $100 million, but under the terms of the Civil Liability Convention of 1969, which governs terms of compensation for maritime oil spills, Singapore is unlikely to receive more than $13 million.

Singapore has ratified the CLC but not protocols added in 1992 that would have considerably increased its compensation entitlement. Nor is Singapore a member of the International Oil Pollution Compensation Fund, financed by major oil importers. Membership would have considerably increased its entitlement.

Singapore can receive compensation under only the first of the convention's two-tier system. Compensation at this level is governed by the size of the polluting vessel, which in the case of the Evoikos means Singapore is entitled to about $13 million. Details on how Singapore's compensation will be calculated were unavailable last week.

Had Singapore signed the CLC's 1992 protocols and the IOPC Fund, the ship's size would not have mattered; Singapore would have been entitled to total compensation of some $180 million.

The CLC was established by the International Maritime Organization, a London-based agency of the United Nations, to simplify third-party compensation for oil spills. Previously it had been time-consuming and complex for a country to win compensation for pollution caused by a vessel owned in one country and registered in another, neither of which might be connected to the country suffering the damage.

Last week, cleanup crews were trying to keep the oil from spreading to neighboring Malaysia and Indonesia. Both are signatories of the CLC and the IOPC Fund, entitling them to combined compensation up to around $80 million.

Neither country signed the protocols that the CLC added in 1992, which would have further increased their entitlement.