Vol. 137, No. 40 — October 4, 2003

Order Amending the Limits of Liability Set Out in Subsection 54(1) of the Marine Liability Act

Statutory Authority

Marine Liability Act

Sponsoring Department

Department of Transport

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

This pre-publication notice concerns amendments to the limits of liability for shipowners as set out in subsection 54(1) of the Marine Liability Act and provided for by Order in Council in subsection 54(5). The current requirement to increase the limits of liability corresponds with the revision in the limits of liability in the International Convention on Civil Liability for Oil Pollution Damage 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992, which are due to come into force internationally on November 1, 2003.

These two Conventions provide a two-tier system of liability for compensating claimants for oil pollution damages caused by tankers. The first tier establishes the limits of liability for owners of oil tankers, the second, the limits of compensation for the International Oil Pollution Compensation Fund (IOPCF). Canada has ratified both these Conventions and applies the limits contained within them to any oil pollution claims in Canadian waters through provisions in the Marine Liability Act, subsection 54(1), in the case of shipowners, and subsection 75, in the case of the International Fund.

An additional tier of compensation is also provided in Canada by the Ship-Source Oil Pollution Fund (SOPF), an independent domestic compensation fund in the form of a Special Account in the Consolidated Revenue Fund. The SOPF provides a 3rd tier of compensation, once funds have been exhausted from the shipowner and the IOPC Fund.

Although coverage under this system has been deemed to be comprehensive for several years, recent oil pollution incidents such as the sinking of the tanker Erika off the coast of France in 1999, and, more recently, the Prestige incident off the coast of Spain, have resulted in total claims well above the current international limits and have prompted calls for an increase in these limits.

The Order specifically increases the limits of liability of the shipowner in the Marine Liability Act from a current maximum limit of $59,700,000 Special Drawing Rights (SDR) units of account (approximately $120 CDN million) to 89,770,000 SDR units of account (approximately $180 CDN million). These new limits will correspond with the international limits set out in the International Convention on Civil Liability for Oil Pollution Damage 1992, and will ensure that Canadian claimants obtain compensation at the same level as claimants in other states party to this international Convention.

Alternatives

There are no alternatives.

Benefits and Costs

Benefits

The new limits will bring increased protection for claimants seeking compensation from damages from oil pollution spills in Canada and aligns the Canadian compensatory system with the international one.

Costs

The new limits of liability could result in increased amounts of compensation payable to claimants by the shipowner, depending on the nature and size of the spill and the damages caused by it.

Consultation

The adoption of the new limits within the International Convention on Civil Liability for Oil Pollution Damage 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage took place in London under the auspices of the London-based International Maritime Organization's (IMO) Legal Committee in October 2000.

In Canada, this initiative was preceded by discussions with affected industry associations and other relevant external stakeholders as part of the development of the Canadian position for the October 2000 session of the IMO's Legal Committee.

Compliance and Enforcement

There are no compliance or enforcement considerations for the Order.

Contact

For more information, please contact Jerry Rysanek, Director, International Marine Policy and Liability, Department of Transport, at (613) 998-0708.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 54(5) of the Marine Liability Act (see footnote a) , proposes to make the annexed Order Amending the Limits of Liability Set Out in Subsection 54(1) of the Marine Liability Act.

Interested persons may make representations to the Minister of Transport with respect to the proposed Order within 15 days after the date of publication of this notice. All such representations must be in writing and cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Jerry Rysanek, Director, International Marine Policy and Liability, Transport Canada, Place de Ville, Tower C, 25^th Floor, 330 Sparks Street, Ottawa, Ontario K1A 0N5. (fax: (613) 998-1845; e-mail: rysanej@tc.gc.ca)

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, October 2, 2003

EILEEN BOYD
Assistant Clerk of the Privy Council

ORDER AMENDING THE LIMITS OF LIABILITY SET OUT IN SUBSECTION 54(1) OF THE MARINE LIABILITY ACT

AMENDMENT

1. Paragraphs 54(1)(a) and (b) of the Marine Liability Act (see footnote 1)  are replaced by the following:

(a) if the ship has a tonnage of not more than 5,000 tons, 4,510,000 units of account; and

(b) if the ship has a tonnage of more than 5,000 tons, 4,510,000 units of account for the first 5,000 tons and 631 units of account for each additional ton, not exceeding 89,770,000 units of account in the aggregate.

COMING INTO FORCE

2. This Order comes into force on November 1, 2003.

[40-1-o]

Footnote a 

S.C. 2001, c. 6

Footnote 1 

S.C. 2001, c. 6

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with hypertext language (HTML). Its content is very similar except for the footnotes, the symbols and the tables.

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