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Problems and prospects for the development of the compensation mechanism for oil pollution damage in China

Problems and prospects for the development of the compensation mechanism for oil pollution damage in China

Ya, Li (2015) Problems and prospects for the development of the compensation mechanism for oil pollution damage in China. MPhil thesis, University of Greenwich.

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Abstract

The increasing seaborne transport of oil constitutes a growing pollution risk to the seas and oceans. Large spills of oil from vessel’s sources in small areas have caused considerable environmental and economic concerns. Therefore, most public attention is focused on these accidents. Although the record of the tanker industry has improved dramatically in recent years, there are still occurrences when the press and television screens are dominated by pictures of a stricken tanker releasing oil into the sea and the accompanying pictures of oiled flora and fauna (plant and wildlife). Addressing the global issue of oil pollution damage to the ocean environment is a challenge faced by all human beings.

Research conducted by the International Tanker Owners Pollution Federation Limited (hereinafter referred to as ‘ITOPF’) has shown that, in recent years, almost all continents have suffered severe damage due to oil spilling from vessels source. In response, the international community has negotiated a series of conventions on the oil pollution prevention. The most important international conventions focussed on oil pollution damage from vessels sources are the International Convention on Civil Liability for Oil Pollution Damage 1969 (hereinafter referred to as ‘CLC 1969’) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (hereinafter referred to as ‘Fund Convention 1971’). Although the international community, exemplified by the International Maritime Organization (hereinafter referred to as ‘IMO’), has amended these two international conventions many times, after repeatedly facing large and disastrous oil pollution accidents, the current financing mechanisms under these international conventions seemed still inadequate to provide compensation for the victims of oil pollution damage.

The problem of oil pollution is not limited to Europe and United States of America. With increasing demand for oil in Asia, the seaborne oil trade has soared in Asia as well. This is mainly because of the increased demand for oil in Japan and China. With its fast developing economy over the last two decades, China has turned from an oil exporter to an oil importer since 1993. The increased demand for oil transport has made most Asian states vulnerable to oil spills.

China acceded to the ‘CLC 1969’ and the 1976 Protocol on January 30th, 1980. The latter entered into force in China on April 29th, 1980. The ‘CLC 1992’ had been in effect in China since January 5th, 2000. However, owing to lack of specialized municipal laws governing the oil pollution accidents in China, Chinese oil pollution trials are still facing severe challenges in the judicial field. This situation has led to much more confusion on the application of laws in Chinese maritime courts. The most obvious features are that different maritime courts in China invoke different municipal laws or regulations in adjudicating fairly similar oil pollution cases.

China is a participant in the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (hereinafter referred to as ‘Fund Convention 1971’) and 1992. Due to historical and political reasons, however, the ‘Fund Convention 1971’ and 1992 are only applicable to the Hong Kong Special Administrative Region (hereinafter referred to as ‘Hong Kong SAR’). They do not cover the Chinese mainland so far. In the new revised Marine Environment Protection Law of P.R.C 2000 (hereinafter referred to as ‘MEPL 2000’), which became effective since April 1st 2000 in China and a scheme of joint liability between ship-owners and cargo industries has been set up. However, although the Regulations on Administration of Prevention and Control of Pollution to the Marine Environment by Vessel came into force from March 1st, 2010, and the Regulations on Levy and Usage Management Relating to Vessels Sources Oil Pollution Compensation Fund came into force from July 1st 2012 as well, claimants in China who suffer oil pollution damage from vessels sources still find it is very difficult to receive adequate compensation or indemnities from a compensation or indemnification fund. The fundamental reason probably is that the Chinese oil pollution liability regime which lacks specific provisions and implementing rules and therefore cannot really play an effective role in China today.

This thesis first examines international conventions including the ‘International Convention on Civil Liability for Oil Pollution Damage’, the ‘International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage’ and the ‘Oil Pollution Act 1990’ in USA. A historical review illuminates how liability without ‘fault’ and the oil owner contribution compensation fund developed into its current state and questions whether its existence is still justified in today’s law. And then, the study compares current international and regional oil pollution regimes in other jurisdictions by using the comparative methodology. The study seeks to get a clear view of what lessons can China draw from international conventions and ‘Oil Pollution Act 1990’ of United States of America, and how? This study also emphatically analyses the Chinese legislation on oil pollution and examines the civil liability and compensation in Chinese legal system. Current Chinese laws in oil pollution damage are rather primitive and are so far based on very few judicial decisions. This is totally incompatible with the recent rapid increase of economy and maritime litigants in China. The study of problems of current Chinese law on the civil liability and compensation regime for oil pollution damage highlights the pitfalls that might arise for litigants and indicates where the law should be amended and try to find problems with the current legislation and compensation regime for oil pollution damage in China.

The research draws conclusions on the comparative studies of oil pollution compensation in different legal systems and puts forward proposals for the remodelling of Chinese law of oil pollution compensation with a view to making it compatible with the rest of the world. As the increasingly involved in the world economy and international trade, China needs to make its legal system ever more open to the rest of the world. It is a matter of urgency for China to remodel some areas of its current maritime and environmental laws and establish a national compensation regime so as to be in line with international commercial practices and customs. This will reduce legal cost for both Chinese and foreign litigants and bring about certainty and consistency in court decisions and attempt to identify what avenues are open to enable the reform of oil pollution compensation in Chinese oil pollution laws.

Item Type: Thesis (MPhil)
Uncontrolled Keywords: oil pollution; environmental damage; compensation; China
Subjects: H Social Sciences > HD Industries. Land use. Labor
Faculty / Department / Research Group: Faculty of Architecture, Computing & Humanities > Department of History, Politics & Social Sciences > Greenwich Maritime Centre
Last Modified: 27 Mar 2017 09:44
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/13954

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