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    Panama Ratifies the Bunker Fuel Pollution Liability Convention

    By Keith R | January 17, 2009

    Topics: Marine/Coastal Issues | No Comments »

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    On 14 January Panama’s National Assembly ratified the International Convention on Civil Liability for Bunker Oil Pollution Damage (“Bunker Convention”). The Convention, negotiated under International Maritime Organization (IMO) auspices, was adopted in 2001 but did not come into force until last November.  Until Panama ratified, the only Latin American and Caribbean (LAC) nations that had done so were Antigua and Barbuda, the Bahamas, Jamaica and St. Vincent and the Grenadines.

    The Convention aims to ensure adequate, prompt, and effective compensation when damage is caused by spills of oil carried as fuel in ships’ bunkers (“bunker fuel”). The Convention only covers the pollution damage caused by such spills, defined by the Convention to mean:

    The Convention requires the registered ship owner to maintain compulsory insurance cover and allows a claim for compensation for pollution damage to be brought directly against an insurer. Ships over 1,000 gross tonnage must maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime, but in all cases, not exceeding an amount calculated in accordance with the 1976 Convention on Limitation of Liability for Maritime Claims (as amended).  The Convention sets the limits in terms of the International Monetary Fund’s (IMF) basket of major currencies known as Special Drawing Rights (SDRs), so that it readjusts according to market conditions.

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