Oct 31: Compensation for pollution damage caused by spills from oil tankers is governed by an international regime elaborated under the auspices of the International Maritime Organization (IMO).
8‘Pollution damage’ is defined as loss or damage caused by contamination. In the case of environmental damage (other than loss of profit from impairment of the environment) compensation is restricted to costs actually incurred or to be incurred for reasonable measures to reinstate the contaminated environment.
8The notion of pollution damage includes measures, wherever taken, to prevent or minimise pollution damage in the territory, territorial sea or EEZ.
8The point to note is that expenses incurred for preventive measures are recoverable even when no spill of oil occurs, provided that there was a grave and imminent threat of pollution damage.
8The owner of a tanker has strict liability (i.e. the owner is liable also in the absence of fault) for pollution damage caused by oil spilled from its tanker as a result of an incident.
8The owner is exempt from liability only under rare circumstances.
8Indian ship owners need to keep all this in mind.
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