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Reforms to Canada’s Ship-Source Oil Pollution Fund - Subscriber Access Only

By BCShippingNews 18 July 2017

As part of Canada’s Ocean Protection Plan (OPP), the Federal Government has an-nounced plans to amend elements of the Ship-Source Oil Pollution Fund (SSOPF) with a focus on ensuring adequate compensation is available and the SSOPF remains solvent. As it stands, tankers carry 80 million tonnes of oil annually from Canadian coasts, and with the Kinder Morgan pipeline expansion project, this number appears likely to grow, so these amendments could be quite significant in the future.

Background of the SSOPF

The SSOPF can be traced back to the grounding and sinking of the SS Arrow, a Liberian flagged tanker on Cerberus Rock in Nova Scotia on February 4, 1970. Efforts to free her failed and she eventually broke in two, spilling about two-thirds of her cargo. In the end, 8,000 tonnes of oil was spilled and 190 miles of shoreline affected. An inquiry revealed her depth sounder had not been operational for two months, her autogyro compass had a permanent error of three degrees west and her radar had failed.

In response to the Arrow incident, the Maritime Pollution Claims Fund (MPCF), the predecessor, regime, was created with the principal elements being:

Strict liability of ship owners;

Limiting of ship owner liability in certain circumstances in exchange for strict liability;

Creation of the MPCF for claims in excess of a ship owner’s limitation of liability; and

Minister of Transport authority over any ship/cargo discharging or likely to discharge oil.