S'pore tanker owners face oil spill cost hike
S'pore tanker owners face oil spill cost hike
SINGAPORE (Reuter): Singapore tanker owners face oil spill
compensation bills at more than four times the present rate after
the city state's maritime authority said on Saturday it had
signed a tough international pollution protocol.
Indemnity limits for oil spills were raised to 59.7 million
special drawing rights (SDR) or about Singapore $118 million
(US$78.15 million), from their previous limit of 14 million SDR
(S$28 million).
The value of SDRs is based on a currency basket with specific
weightings of major traded currencies.
The Maritime and Port Authority of Singapore (MPA) said in a
statement the hike, effective from September 18, 1998, followed
its signing of the 1992 protocol of the International Convention
on Civil Liability for Oil Pollution Damage, 1969.
The convention was drawn up in 1969, setting the 14 million
SDR level.
"Singapore has reaffirmed its position of responsibility in
ensuring that Singapore-registered oil tankers are covered by
insurance for a higher limit of compensation," MPA said.
Singapore first signed the International Maritime Organization
(IMO)-backed convention in 1981.
As the city state has been positioning itself as Asia's
maritime hub, shipping and insurance analysts were predicting it
would have to take a leading role in the region and sign the 1992
protocol, adopted by the IMO in May 1996.
The protocol places strict liability for pollution damage
caused by oil spills and requires shipowners to take out
liability insurances to cover the exposure.
It makes signatories responsible for policing visiting tankers
to ensure that they meet the higher insurance limits.
It also allows easier clearance in foreign ports for ships
registered in countries which are signatories to the protocol.
Signing the protocol was seen as another tough step in
Singapore's campaign to become the regional maritime hub.
In January, a Singapore court jailed a tanker captain for six
months and fined him S$400,000 after a harbor oil spill polluted
extensive beach and water areas.
Insurance sources said the previous limit of S$28 million had
been inadequate for some time, bearing in mind the devastating
exposure Singapore faces to oil pollution. Singapore is one of
the world's busiest ports and a major oil refinery center, with
capacity of 1.26 million barrels per day.
Analysts said a major oil spill would wreak havoc in limited
waters around Singapore's port, disrupting marine activities.
It would also have a significant impact on the country's
tourist industry. Visitors to Singapore spend an estimated S$3.0
billion in the tropical island republic every year, said the
Singapore Tourist Promotion Board.