Select Committee on European Scrutiny Fortieth Report


4. COMPENSATION FUND FOR OIL POLLUTION DAMAGE IN EUROPEAN WATERS


(a)
(21943)
14595/00
COM(00) 802


Commission Communication on a second set of Community measures on maritime safety following the sinking of the oil tanker Erika.

(i) Draft Directive establishing a Community monitoring, control and information system for maritime traffic;

(ii) Draft Regulation on the establishment of a fund for compensation for oil pollution damage in European waters and related measures;

(iii) Draft Regulation establishing a European Maritime Safety Agency.

(b)
(23625)
10477/02
COM(02) 313


Amended draft Regulation on the establishment of a fund for compensation for oil pollution damage in European waters and related measures.


Legal base:Articles 80(2) and 175(1) EC; co-decision; qualified majority voting
Document originated:(b) 12 June 2002
Deposited in Parliament: (b) 8 July 2002
Department:Transport
Basis of consideration: EM of 18 July 2002
Previous Committee Report: (a) HC 28-viii (2000-01), paragraph 8 (14 March 2001), HC 152-i (2001-02), paragraph 19 (18 July 2001), HC 152-ix (2001-02), paragraph 5 (5 December 2001) and HC 152-xix (2001-02), paragraph 7 (13 February 2002)
To be discussed in Council: No date set
Committee's assessment:Politically important
Committee's decision:(a)(i) and (iii) Cleared (decision reported on 5 December 2001) (a)(ii) and (b) not cleared


Background

  4.1  Although the framework for international action on maritime safety is provided by the International Maritime Organisation (IMO), the Community has in more recent years taken action in this area where IMO standards were lacking or deemed inadequate. In particular, the Erika oil tanker disaster in December 1999 off the Brittany coast prompted the European Parliament and the Council to call on the Commission to review the maritime safety regime for oil tankers.

  4.2  As a result, the Commission produced in March 2000 a Communication[7] on the safety of seaborne oil trade, which included three legislative proposals dealing with enforcement in respect of shipping using Community ports and sailing in the waters under the jurisdiction of the Member States; common rules and standards for ship inspection and survey organisations; and the accelerated phasing-in of double hull or equivalent design requirements for single hull oil tankers. This was followed in December 2000 by document (a), comprising proposals dealing with the establishment of a Community monitoring, control and information system for maritime traffic; the establishment of a compensation fund for oil pollution damage in European waters; and the setting up of a European Maritime Safety Agency (EMSA).

  4.3  All these proposals have since been cleared, with the exception of that dealing with the establishment of a compensation fund. The latter arose because the Commission believes that the existing marine compensation regime under the 1992 Protocols to the Civil Liability Convention (CLC) and International Oil Pollution Compensation (IOPC) Fund Convention does not set the maximum compensation limit at a sufficiently high level, and fails either to discourage those involved in sea transport from deliberately taking risks, or to provide incentives for the supply and use of quality ships for transporting oil. It therefore proposed in part (ii) of document (a) a Regulation to establish a fund for Oil Pollution in European waters (the COPE fund), which would provide top-up compensation for claimants, subject to a ceiling of euro1,000 million. The fund would be financed by European oil receivers, but would only be activated once a spill which exceeded, or threatened to exceed, the international limits had occurred in Community waters.

  4.4  In his letters of 16 November 2001 and 8 February 2002, the Parliamentary Under-Secretary of State at the former Department of Transport, Local Government and the Regions (Mr David Jamieson) said that a working group of the IOPC Fund had produced the text of a draft Protocol, which had been referred to the Legal Committee of the International Maritime Organisation for consideration at its session in April 2002, with the recommendation that a Diplomatic Conference should be convened at the earliest opportunity, which it was hoped would be early in 2003. In view of this, there was at present very little appetite for a purely Community regional arrangement, but the Commission's proposal had not yet been withdrawn, and indeed the European Parliament had proposed a number of amendments to it. However, he also said that the Commission was unlikely to seek to make further progress on the proposal until after the Diplomatic Conference, and that, if the outcome met the aspirations of the Member States and the Commission, it was likely that the proposal would then be withdrawn.

  4.5  In our Report of 13 February 2002, we said that, since the Commission's proposal was still on the table, we thought it would be prudent to continue to withhold clearance until the outcome of the wider international discussions was clearer. We therefore asked the Minister to continue to keep us informed of any further developments, particularly in relation to the planned Diplomatic Conference.

  • Document (b)

  4.6  Following the European Parliament's first reading of the proposal in June 2001, the Commission has now produced (document (b)) an amended proposal to take on board a number of the Parliament's amendments, and this has been the subject of a further Explanatory Memorandum of 18 July 2002 from the Minister. The most significant of the amendments proposed by the Commission:

  • would provide that, until an International Supplementary Fund Protocol was fully operational, a European Fund should be established to compensate claimants who have been unable to obtain full compensation: the Minister says that the UK would not wish to see the COPE fund set up as an interim measure as this would be likely to reduce the impetus towards bringing the International Supplementary Fund into effect;

  • would delegate the daily management of the COPE Fund to the European Maritime Safety Agency (EMSA), a course which the UK opposes, on the grounds that it would be a distraction from the proposed primary functions of the Agency, which would also be unlikely to have any relevant practical experience: the UK's preference would be for any such fund to run under the existing arrangements for the IOPC Fund, which would alleviate any possibility of inconsistencies in the treatment of claims and reduce the administrative burden;

    

  • appear to envisage that the fund might extend at some later stage beyond compensation for oil pollution to cover incidents involving hazardous and noxious substances: the Minister says that, whilst the UK is encouraging other states, particularly those within the Community, to become parties to the Hazardous and Noxious Substances (HNS) Convention, it believes that a Regulation covering both the COPE and NHS Funds would be impractical, since different industries are involved.

  4.7  The Minister reiterates that the Government will continue to press the Commission to produce a full assessment of the economic effects of its proposals for the setting up of a COPE Fund, but that this should only be done if further progress is made. He adds that, in view of the good progress being made to add a Supplementary Fund under the international regime, there seems very little appetite among Member States for a separate regional arrangement. He therefore considers it unlikely that the debate will be given any time under the current Presidency or the next one, and that the Commission is unlikely to press ahead with the issue before the Supplementary Fund Diplomatic Conference in May 2003. He also thinks that, if the Commission considers that the compensation limits meet the needs of the Community, the COPE Fund Regulation will be withdrawn.

Conclusion

  4.8  We are grateful to the Minister for this further information, which suggests that, at least so far as the Commission is concerned, the idea of a Community fund in this area is still alive. In view of this, and notwithstanding the Minister's comments about the likelihood of action being taken in the wider international forum, we think it wise at this stage simply to note the position, but to continue to hold this document, and the outstanding part of the earlier document, under scrutiny.





7  (21146) 7245/00; see HC 23-xviii (1999-2000), paragraph 5 (17 May 2000), HC 23-xxiii (1999-2000), paragraph 5 (28 June 2000), HC 23-xxix (1999-2000), paragraph 6 (15 November 2000), and HC 28-viii (2000-01), paragraph 12 (14 March 2001). Back


 
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