MANILA, Philippines – The head of an international organization assisting the Philippines in the Mindoro oil spill response and in processing insurance claims is visiting the country. 

The Philippine Coast Guard on Monday posted photos of the visit Sunday, April 23, of Gaute Sivertsen, director of the International Oil Pollution Compensation Funds (IOPC), in Caluya, Antique, one of the areas affected by the oil spill from the sunken MT Princess Empress. He also went to see the pollution damage in Sitio Sabang in barangay Tinogboc, Semirara Island, also in Antique.  

Sivertsen was accompanied by Ana Cuesta, one of the claims managers of IOPC. The IOPC handles the claims assessments and payments for victims of oil spills. 

The Coast Guard is the head of the unified incident team for the country’s oil spill response and played host to the visiting IOPC officials.

Oriental Mindoro Governor Humerlito “Bonz” Dolor announced last week that Sivertsen would also be visiting the province, the ground zero of the oil spill. 

Victims of the oil spill began the insurance claims process last month in the provincial capitol, Calapan. A new claims collection center was opened on April 14 in barangay Banilad in the town of Pinamalayan. A mobile team is also collecting claims in barangay Masaguing in the town of Naujan. 

Sivertsen is scheduled to meet with the Department of Justice (DOJ) officials this week. The DOJ is the lead agency on the filing of complaints against the shipowner, RDC Reield Marine Services.  

During the Senate hearing on the oil spill on March 14, a couple of senators expressed fears that the shipowner would not be able to claim insurance since it was operating without a valid permit. That has turned out to be unfounded, and the insurance claims process began on March 31 in Calapan City.

Days after the sinking of the oil tanker on February 28, the IOPC expressed sorrow over the incident.

“The IOPC Funds has been following news of the incident currently affecting the Philippines, involving the tanker MT Princess Empress, and is very sorry to see the resulting oil spill,” it said. “The organisation is liaising with the insurer of the ship and has contacted the delegation of the Philippines to IOPC Funds meetings to establish the latest situation.”

A Philippine delegation met with Sivertsen in London on March 15 and provided information about the Mindoro oil spill.

The IOPC said Sivertsen “gave an overview of the general claims process in cases where the 1992 Fund Convention applies.”

IOPC_Funds_Film_EN – 2022 – FINAL from IOPC Funds on Vimeo.

“The IOPC Funds are financed by contributions paid by entities that receive certain types of oil by sea transport. These contributions are based on the amount of oil received in the relevant calendar year, and cover expected claims, together with the costs of administering the Funds,” the IOPC says on its website.

Sivertsen, a Norwegian, began his 5-year term as IPOC director in January 2022. 

Why there’s money for compensation

Lawyer Valeriano Del Rosario, the local representative of the insurer of MT Princess Empress, explained last month that the “mechanism for compensation” in the Mindoro oil spill is based on two international conventions. 

These are the International Convention on Civil Liability Convention for Oil Pollution Damage or CLC, and the 1992 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage or 1992 Fund.

The CLC was “adopted to ensure that adequate compensation is available to persons who suffer oil pollution damage resulting from maritime casualties involving oil-carrying ships.” 

The Philippines signed both the CLC convention and the 1992 Fund convention on July 7, 1997, and it entered into force a year later. These conventions have been incorporated in the Oil Pollution Compensation Act of 2007, which was passed a year after the Guimaras oil spill in 2006.

The CLC is the “first level of compensation by owners [of the vessel], and that insurance comes under the P&I insurance cover of the owners of MT Princess Empress.” The 1992 fund, Del Rosario said, “covers the amount in excess of what is covered by the CLC.” 

Even before the start of claims processing last month, compensation for victims of the oil spill was already expected to exceed the civil liability cover provided by the Shipowners’ P&I Club, the insurer of MT Princess Empress. 

The IOPC said last March 30 that given the extensive damage from the oil spill, the civil liability insurance would likely be not enough.

“Cleanup and response operations are ongoing. Given the latest information reported, claims relating to this incident may exceed the limit of liability of the insurer under the 1992 CLC. It is possible that the 1992 Fund will therefore be called upon to pay compensation,” the IOPC said.

Under the 1992 CLC, shipowners are held strictly liable for oil pollution damages up to a limit, which is based on the tonnage of their ship. The shipowner is also obligated to maintain insurance to cover its liability under the 1992 CLC.

When civil claims exceed the amount for which a shipowner is liable, more funds can be drummed up from the 1992 Fund. Up to around $270.2 million can be tapped from the 1992 Fund to cover the rest of the claims, an amount which already includes that paid by the shipowner and the insurer, the IOPC said. The 1992 Fund is financed by payments collected from oil and shipping entities in member-states that receive more than 150,000 tons of crude oil or heavy fuel oil in a year.

As of April 24, the total damage to the country’s agriculture and fisheries has reached P3.8 billion, with over 24,000 fisherfolk affected by fishing bans and damaged fishing grounds, according to the National Disaster Risk Reduction and Management Council. A total of 40,897 families or nearly 200,000 persons in three regions – Mimaropa, Calabarzon, and in Western Visayas – have been affected by the oil spill.  

MT Princess Empress left the private port SL Harbor Terminal early morning on February 28 with 800,000 liters of industrial fuel oil or IFO. It had engine trouble, encountered strong winds and rough seas and sank off Naujan, Oriental Mindoro later that day. It spilled most of the black oil it was carrying in the succeeding days, prompting fishing and diving bans in large parts of the province. – with Lance Yu, Rappler.com