Ship Oil Pollution Compensation Legal System

Oil pollution from ships (including tankers and bunkers) has arrested internationaland internal attention along with the boom of modern technology and shipping.Environment protection and pollution control have been hot topics practically andtheoretically. Researches on pollution prevention presently include two ways. One is thepublic law tradition, i.e. to demonstrate the power of a state to take measures to preventpollution and to impose sanctions against the party who caused the pollution; The other isthe private law tradition, which emphasizes the compensation for oil pollution damagerelying on CLC and FUND etc. The stress of this dissertation is on the private law tradition.In my view, the compensation system for oil pollution damage from ships is just a branch ofthe laws of compensation for damage and bears the general characters of the said laws, alsobears certain comparability structurally with the said laws. At the same time, theconstitutional elements of the compensation system for oil pollution damage from shipsdiffer from those of the civil liability for common tort. Such differences are very importantfor the compensation system for oil pollution damage from ships.There are about 200,000 Chinese characters totally in this dissertation, including abrief introduction and seven other parts. Chapter 1 categorizes existing legislation frameson the compensation for oil pollution damage from ships. International community had notrealized the importance of setting up compensation system for oil pollution damage fromships until the pollution of"Torrey Canyon" in the year of 1967 although the U.S.A and theU.K launched into establishing convention on the marine environmental protection in 1930s.Ever since then, International Maritime Organization (IMO, the former IntergovernmentalMaritime Consultative Organization, IMCO) has played a very important role on thelegislation of the laws on the compensation for oil pollution damage from ships. After morethan half a century's endeavor, a set of relatively perfect legal mechanism, including CLC,FUND, HNS, and BUNKER, has been established. Mean time, some internationalconventions, such as TOVALOP69, CRISTAL, CMI Guidelines on Oil Pollution Damage,IOPC FUND Claim Manual, have been formed. In a comparative law perspective, the systems of America, Canada, and U.K on the compensation for oil pollution damage fromships are the typical forms: America has not entered into related international conventionson the compensation for oil pollution damage yet although it has a well-rounded OPA(USOil Pollution Act); Canada is one of the earliest countries who govern oil pollution fromships by statute law, moreover, it takes a dual mode of international fund and internal fundfor compensation for oil pollution damage; As to U.K, its Merchant Shipping Act is theexample of some countries of Commonwealth of Nations. Today, both internationalconventions and the laws of foreign countries stipulate the main items such as liabilitysubject, compensation scope, excuses, limitation of liability, statutory liability insurance,fund system, and so on. In my view, through more than half a century's endeavor, aninternational level of a set of relatively perfect legal mechanism on the compensation for oilpollution damage has been established. This said mechanism put up the followingcharacters: (1) the trend of international compensation system for oil pollution damage isunification. (2) the basic international legal frame on the compensation system for oilpollution damage has been established.(3)international legislation puts up new forms as theimportant supplement to international conventions. (4) the liability limit on thecompensation for oil pollution damage seems higher and higher. Comparatively, thecompensation system for oil pollution damage in China is far from perfect, although relatedarticles and clauses of The General Provisions of Civil Law, The Maritime Law, TheEnvironmental Protection Law, and The Marine Environmental Protection Law constitutethe basic content of Chinese compensation system for oil pollution damage. The mainshortages read as follows: (1) some of the laws, say, The Environmental Protection Law,that govern oil pollution damage bear the nature of administrative regulations, that meansdealing with the civil affairs according to administrative regulations so that the victim couldnot get sufficient compensation. (2) the content of the articles and clauses of some relatedlaws and civil law provisions, such as The Maritime Law, The Marine EnvironmentalProtection Law, is so general and vague on the compensation for oil pollution damage fromships that it is nearly impossible to apply these articles, clauses, and provisions to deal withthe cases concerning oil pollution.(3) some necessary content on the compensation systemis lacked. (4) some provisions are unreasonable. So it is really necessary to rethink and reconstruct Chinese compensation legal system on the ground of having analyzed thecompensation system on oil pollution damage.Chapter 2 probes into the subjects in the legal relation of the compensation system onoil pollution damage from ships. In my view, the said subjects include the subject sharesright and the subject bears liability (including the subject bears duty). The subject sharesright is the victim of the oil pollution from ships. As to the property and bodily damage, thesubject shares right refers to the unit or person who shares the right of ownership,administration or management, or the natural person bodily harmed. Here, a noticeablequestion is that which government department should lodge a complaint and claim forcompensation on behalf of the country is controversial under the public ownership ofmeans of production, and judicatory practice differs from each other. In my view, afteranalyzing the functions and power of different departments, the department initiating thecomplaint should be confirmed according to the water area where the pollution caused andthe compensation scope. The subject bears duty is mainly the owner of the ship that causedthe pollution. In the U.S.A, it also includes the manager of a ship and the renter of a bareboat, and on some special conditions it even includes the third person. In order to ensure thevictim get sufficient compensation, related international conventions set up statutoryliability insurance system and fund system according to the nature of oil pollution fromships. An insurer or an assuror or the fund, despite not being the offender of the oilpollution, is still one of the subjects of liability in the legal relation of compensation on oilpollution damage from ships. There is no special compensation law on oil pollution damagefrom ships in China, and no particular regulation on the compensation subject. Althoughrelated laws and regulations prescribe "should" set up statutory liability insurance systemand fund system, no such systems have been set up so far. So, how to learn frominternational conventions and foreign laws to define the compensation subjects reasonablyis an important task for Chinese legislation.Chapter 3 discusses the subjective state of the offender in the legal relation ofcompensation on oil pollution damage from ships. Here, the author learns from the newidea that we should band together the mode of tort with concrete forms of liability whileanalyzing the principles of imputation. In my view, the principle of imputation in Chinese civil judicatory practice takes a dual structure mode: fault liability and no fault liability(absolute or strict without either intent or negligence, or strict liability). As regards thecompensation on oil pollution damage from ships, the compensation in Chinese law meansmonetary compensation; additionally, oil pollution from ships is dangerous, thereby, theprinciple of imputation on oil pollution damage from ships is no fault liability. Such aprinciple of imputation aims not to punish the offender, but to distribute social damage.Although the offender bears a kind of strict liability, it is still possible for the offender to beexempted from the compensation duty on the grounds of certain excuses.Chapter 4 presents a careful argument for the scope of compensation for oil pollutiondamage from ships. As an important part of the compensation system on oil pollutiondamage from ships, the scope of compensation concerns whether the victim could becompensated sufficiently and whether the subject of duty bears the burden of compensationsuitably; it also concerns who the offender ship(s) is(are),what kinds of oil pollution it is,where the pollution happens and influences, and what kind of damage could becompensated. So, it includes the kinds of ships and oil, the area, and the scope ofcompensation the law should apply to. The main content of related internationalconventions, foreign laws is consistent on the kinds of ships and oil, the area, and the scopeof compensation with that of Chinese law, but not consistent on how to confirm the materialdamage, especially concerning pure economic damage. For example, pure economicdamage is not admitted in CLC69,yet pure economic damage is regulated as an item ofcompensation in FUND71 and CMI Guidelines on Oil Pollution Damage. It is aninternational trend to provide compensation to a certain extent for pure economic damage.Surely, some countries are active while some ones not.There is no regnlation on pure economic damage in existing Chinese law. Thisdissertation argues that compensation for pure economic damage should at least beadmitted in Chinese law while dealing with oil pollution cases concerning a foreign country.To admit pure economic damage is of benefit to compensate a Chinese victim while oilpollution is from a foreign ship in China sea. Yes, such a regulation would make it possiblefor a Chinese ship to bear the burden of compensation for pure economic damage if it hascaused oil pollution in foreign sea by the polluted country according to the equivalence principle. But it should be mentioned that even pure economic damage is not admitted inChinese law, it is also possible for the said Chinese ship to bear the burden of compensationaccording to the principle that the law of the place where an infringement is convicted ifpure economic damage is admitted in the said foreign country. To admit pure economicdamage will not make Chinese ships bear additional burden, because: (1) the subjects whobear the burden of compensation includes not only the owner of the ship, but also the selleror the buyer of oil, the insurer, and the fund in the compensation system for oil pollutiondamage from ships. (2) do not admit pure economic damage in cases involved no foreigncountries. As regards the scope of pure economic damage, it mainly includes (1) thebusiness of fishing, aquiculture and the like; (2) the trade of hotel, catering, shopping,seashore entertainment, raveling and the like; (3) undertaking salt field, power plant, andlike service that producing or cooling through water transportation. We should rememberthat what the compensation for pure economic damage aims at is not the event of pollution,but the pollution itself. So the relation between the pollution and the damage should beanalyzed reasonablely. A claim for compensation that only on the ground that "no oil spilt,no damage suffered" should not be accepted by a court, The relation between the pollutionand the damage should be analyzed reasonablely according to: (1) the distance between thepollution and the business of the claimer; (2) the extent the claimer depending on thepolluted resources to undertake his business; (3) the possibility for the claimer to resort toother resources.Chapter 5 analyzes the limitation of liability of the compensation system for oilpollution damage from ships. The characteristic of the limitation of liability system is that itbreaks the principle of sum compensation in ordinary tort law in order to provide asafeguard mechanism for the development of shipping undertaking. This system sets alimitation to the number of compensation, i.e. to define the burden of compensation of theowner of the ship under a certain quantum. It should be mentioned that the said quantum ofcompensation is getting higher and higher along with more and more oil pollution suffered.The system of the limitation of liability takes a dual mode in Chinese law. i.e. CLC isapplicable to the case of oil pollution concerning a foreign country; The Maritime Law andThe Regulation on The Limitation of Liability for Ships with A Gross Tonnage Not Exceeding 300 Tons And Those Engaging in Transport Services between The Ports of ThePeople's Republic of China As Well As Those for Other Coastal Works are applicable to thecase of oil pollution concerning no foreign countries.There is no special oil pollution law in China, related compensation system could befound in The General Provisions of Civil Law, The Environmental Protection Law, TheMarine Environmental Protection Law, and so on; In addition, China has joined someinternational conventions such as CLC92, Convention on Limitation of Liabilityfor Maritime Claims, 1976 and so on. These conventions could be used for reference whilehearing cases of oil pollution damage from ships in China. Yet, compared with relatedinternational conventions, Chinese law is so general and vague that it is hard to be applied.So, could international conventions be applied directly to deal with cases of oil pollutiondamage in Chinese court? This is the topic of Chapter 6. In my view, it is a questionconcerning the relation between international laws and internal laws. So I probe into therelation of the legal effect between international laws and internal laws first, and thenanalyze the applying of treaties. My conclusion is that while deating with cases ofcompensation for oil pollution from ships, the 11th chapter of The Maritime Law isapplicable to resolve the problem of limitation liability that involving no foreign countries;The General Provisions of Civil Law and The Marine Environmental Protection Law areapplicable to resolve other problems; as to the cases involved foreign countries,international conventions should be applicable while no regulations could be found inChinese laws or the Chinese regulations are not consistent with international conventions.Finally, I present my own strategy in order to perfect Chinese compensation systemfor oil pollution damage from ships. As above-mentioned, The General Provisions of CivilLaw, The Maritime Law, and The Marine Environmental Protection Law constitute thelegal frame of Chinese compensation system for oil pollution damage from ships, confirmthe main content of the said compensation system, e.g. the regulations on the oil kindscausing compensation liability for oil pollution damage, the limitation of liability to someoil pollution damage, the limitation period for lawsuit, and the rough scope ofcompensation, etc. But compared with the international conventions which China hasjoined and related foreign laws, the lack of Chinese laws is also obvious, e.g. dealing with the civil affairs according to administrative regulations, some necessary content on thecompensation system is lacked, the content of some regulations is so general and vague thatit is nearly impossible to apply to deal with the related cases. So, it is necessary for Chinato reconstruct and perfect her compensation system for oil pollution damage from shipsafter learning from related international Conventions and band together with Chinesecharacteristics. While doing so, we should abide by the principle of environment protectionand pollution prevention, consult related international conventions with due regard to thedevelopment of shipping undertaking. This dissertation displays three modes of perfection:to make a unified "Compensation Act of Environment Damage"; to make a special "OilPollution Act" or "Act(Ordinance/rules and regulations) of Compensation Liability for OilPollution Damage from Ships"; and to mend existing "The Maritime Law" and bring intorelated compensation system for oil pollution damage from ships. I prefer to the third way.The contributions of this dissertation are as follows. Firstly, this paper presents alogical system consisting with the logic of traditional civil law on the research of thecompensation system for oil pollution damage from ships. Although there are certaindifferences between the said compensation system and the compensation system forordinary tort, the compensation system for oil pollution damage is still one part of the civillaw domain and must correspond with the logic and structure of civil law research. ScienceCLC and FUND having played very important roles in the compensation system for oilpollution damage from ships, most of existing research findings almost just copies thearrangement of international conventions. The lack of such arrangement consists in playingdown the logical relation between concrete systems. The author tries to overcome suchshortcomings through following the traditional arrangement of compensation system fordamage, and analyzes the compensation liability for oil pollution damage from ships in theperspective of constitution elements. Secondly, this paper makes an empirical researchinstead of a pure analytic one. During my research, I have ever been to some related organs(e.g. marine bureau, maritime court, etc.) to do some investigation. This makes meunderstand the tonnage of Chinese ships and some other tough problems in dealing withdisputes concerning oil pollution damage from ships. The research on the system of liabilitysubject, limitation liability, and the applying of related laws is grounded upon such empirical work. Thirdly, this paper makes a comprehensive and systemic research on thesubject of compensation for oil pollution damage from ships. The focuses of existingresearch findings are mostly on the discussion of the liability subject, i.e. who on earthshould bear the burden of compensation, the owner of the ship alone? Should the managerof the ship and the renter included? I think it is also important to research the scope of thesubject who shares the right of being compensated. Recent years, the confirmation of thescope of the subject who shares the right of being compensated is the main dispute of thehearings in Chinese court. It is well known that the social system of China is the publicownership of means of production. According to Chinese constitutional law, naturalresources all belong to the country. It is the function and power of the State Council tomanage and supervise these resources. So it is usually controversial that what department ofthe government is powerful to initiate a complaint for compensation on behalf of thecountry. Fourthly, this paper takes an approach of argumentation instead of comparison toprobe into the subjective state of the subject who bears the burden of compensation. Theconclusion is that strict liability should be adopted in Chinese law. Existing researchfindings have also drawn the conclusion of strict liability, but their reason is just because ofthe like regulations in international conventions and foreign laws. The hidden logic is thatChinese law should follow along with foreign laws. On the contrary, this paper, learningfrom the new idea that we should band together the mode of tort with concrete forms ofliability while analyzing the principles of imputation, points out that the compensation inChinese law means monetary compensation; additionally oil pollution from ships isdangerous, thereby, the principle of imputation on oil pollution damage from ships is nofault liability. Fifthly, differing from existing trend of focusing on whether a certain kind ofdamage should be compensated, such as whether pure economic damage should be withinthe scope of compensation, this paper insists that the questions such as who the offendership(s) is(are),what kinds of oil pollution it is, where the pollution happens and influences,and what kind of damage could be compensated and so on, should be discussed, too. So, thekinds of ships, the kinds of oil, and the area where the compensation law should apply toshould be dealt with as the components of the compensation law, not just as some concepts.The regulations on "ship", "oil "in Chinese law differ from those in the related international conventions. So how to link upthese regulations should be taken seriously while perfectingChinese compensation legal system for oil pollution damage from ships. Lastly, this paperbands together Chinese law with foreign laws. China has joined related internationalconventions, and Chinese law is still far from perfect. Could international conventions beapplied directly to deal with cases of oil pollution damage in Chinese court? This is aquestion concerning the legal effects of international laws and Chinese laws. So I probe intothe relation of the legal effect between international laws and internal laws first, and thenanalyze the applying of treaties in China. My conclusion is that while dealing with cases ofcompensation for oil pollution from ships, the 11th chapter of The Maritime Law isapplicable to resolve the problem of limitation liability that involving no foreign countries;The General Provisions of Civil Law and The Marine Environmental Protection Law areapplicable to resolve other problems; as to the cases involved foreign countries,international conventions should be applicable while no regulations could be found inChinese laws where the Chinese regulations are not consistent with internationalconventions.