CLC 1992: civil liability for oil pollution damage

Background: from Torrey Canyon 1967 to CLC 1992

The modern oil pollution liability regime is a direct response to the Torrey Canyon casualty of 18 March 1967, when the Liberian flag tanker grounded on the Seven Stones reef off Cornwall and discharged approximately 119,000 tonnes of Kuwait crude into the western approaches of the English Channel. The United Kingdom and France faced an unprecedented coastal cleanup with no clear forum or substantive legal basis for recovering costs. The shipowner’s recoverable assets were limited to the wreck and a small bunker stem; the cargo owner refused liability; and traditional fault-based maritime tort rules required the coastal States to prove negligence in a foreign court. The casualty exposed three structural gaps: absence of a liability convention specific to oil pollution, absence of a compulsory insurance requirement, and absence of a supplementary compensation fund for losses exceeding the shipowner’s capacity to pay.

The IMO (then IMCO) responded with two parallel diplomatic conferences. The first produced the Civil Liability Convention 1969 (CLC 1969), opened for signature on 29 November 1969 and entered into force on 19 June 1975. The second produced the Fund Convention 1971, providing supplementary compensation financed by oil receivers in importing States. Together the two instruments established the two-tier polluter-pays architecture that survives in modernised form to the present day. The 1969/1971 regime proved inadequate within fifteen years: limits were expressed in Poincaré gold francs, calibrated to 1969 vessel sizes and pollution costs, and the incident record quickly outpaced them.

Original CLC 1969 and the 1976 Protocol

CLC 1969 introduced four operative principles that the 1992 Protocol preserved with minor textual changes. Strict liability of the registered shipowner removed the requirement to prove negligence. Channelling directed all causes of action exclusively at that owner, protecting the master, crew, pilot, salvor, and charterer from parallel tort actions. The right to limit liability allowed the owner to constitute a fund in court calculated by reference to the ship’s tonnage. Compulsory insurance for tankers carrying over 2,000 tons of persistent oil cargo created the first true regime of mandatory third-party financial security in maritime law.

The 1976 Protocol to CLC 1969 was a technical amendment that replaced the Poincaré gold franc with the Special Drawing Right (SDR) of the International Monetary Fund. The 1976 Protocol entered into force on 8 April 1981. It didn’t raise the substantive limits, only the unit of account.

A series of major incidents in the 1970s and early 1980s demonstrated that the original limits were one to two orders of magnitude below actual coastal damage costs. Amoco Cadiz in 1978 (approximately 223,000 tonnes off Brittany) drew US-court litigation because France claimed only partial CLC coverage. Tanio in 1980 and Patmos in 1985 added to the loss record. Each incident widened the gap between capped recovery and documented damage costs.

1984 Protocol failed to enter into force

The 1984 Protocol was the first attempt at a substantive liability increase. It would have raised the per-ton limit and the cap, expanded the geographical scope to include the EEZ explicitly, and broadened the definition of pollution damage to cover environmental impairment with reasonable reinstatement costs. The Protocol required ratification by States representing a specified share of world tanker tonnage, including at least six States with not less than one million units of gross tanker tonnage.

The United States, whose oil import tonnage was decisive for the entry-into-force formula, declined to ratify after the Exxon Valdez spill of 24 March 1989 (approximately 37,000 tonnes of Alaska North Slope crude in Prince William Sound) catalysed a domestic political preference for the unlimited-liability framework that became the Oil Pollution Act 1990 (OPA 90). With the United States out, the 1984 Protocol couldn’t reach its tonnage threshold and never entered into force.

1992 Protocol entry into force 1996

The IMO redrafted the Protocol with a relaxed entry-into-force formula that didn’t require US adherence. The 1992 Protocol was adopted at a diplomatic conference on 27 November 1992 and required ratification by ten States including four with at least one million units of gross tanker tonnage. The threshold was reached in 1995 and the Protocol entered into force on 30 May 1996. For the small number of States that remained party only to the 1969 text, the older limits applied until those States ratified the 1992 Protocol or denounced the 1969 Convention. Compulsory denunciation of CLC 1969 was triggered by accession to CLC 1992 from 16 May 1998, and as of 2026 the 1969 regime is essentially extinct.

The 1992 Protocol made four substantive changes from CLC 1969. It raised the limits of liability by approximately 50 percent. It broadened the geographical scope to expressly cover the exclusive economic zone out to 200 nautical miles. It expanded the definition of pollution damage to include the costs of reasonable measures of reinstatement of the impaired environment. It clarified the definition of ship to include unladen tankers on a ballast voyage immediately following the carriage of persistent oil, closing a loophole that had excluded tank-residue spills.

Scope: persistent oil cargo from oil tankers

CLC 1992 applies to pollution damage caused by the escape or discharge of persistent oil from a ship constructed or adapted for the carriage of oil in bulk as cargo. Persistent oil is hydrocarbon mineral oil with a high specific gravity: specifically crude oil, fuel oil, heavy diesel oil, and lubricating oil. Non-persistent products such as gasoline, light diesel, kerosene, naphtha, and gas oil are excluded; spills of those products fall under general national tort law.

The persistent/non-persistent boundary is defined operationally by physical-chemical properties: persistent oil is oil that doesn’t dissipate naturally to the atmosphere within hours and that forms a long-lived surface slick or shoreline residue. This boundary matters operationally because a VLCC-class condensate tanker carrying 111,000 tonnes of a non-persistent product falls outside the Convention entirely.

The Convention covers cargo persistent oil and bunkers carried in cargo tanks of a tanker. Bunkers carried only in dedicated bunker tanks of a non-tanker (a bulk carrier, container ship, ferry, or general cargo vessel) are governed by the separate International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the Bunkers Convention 2001), which entered into force on 21 November 2008 and uses LLMC limits rather than the CLC sliding scale. CLC 1992 applies to a laden tanker carrying persistent oil cargo and to an unladen tanker on the ballast voyage immediately following such carriage where oil residues remain in the cargo tanks.

The Convention covers pollution damage in the territory (including the territorial sea) and the exclusive economic zone of a State Party. Damage on the high seas outside any EEZ is not covered. Damage in the territory of a non-Party State is not covered, even if the spilling vessel was from a Party State.

Strict liability of the registered shipowner

Article III(1) of CLC 1992 imposes liability on the owner of the ship at the time of the incident for any pollution damage caused by oil that has escaped or been discharged from the ship. Owner for CLC purposes is the registered owner, defined in Article I(3) as the person registered as the owner of the ship in the ship’s flag State register. Where a ship is owned by a State and operated by a company registered in that State as operator, the operator is the relevant owner. The bareboat charterer is not the CLC owner; the registered owner remains the defendant of record even on a long-term bareboat charter.

The liability is strict: the claimant need not prove fault or negligence. Causation between the discharge and the pollution damage must still be established, and the damage must fall within the Convention’s geographical scope, but the claimant doesn’t need to show that the owner or any servant failed to exercise reasonable care. The strict liability rule is the operative compromise of the regime: in exchange for accepting liability without fault, the owner receives the benefits of channelling and limitation.

Channelling principle: claims directed at owner only

Article III(4) is the channelling provision. No claim for pollution damage may be made against the servants or agents of the owner, the crew, the pilot, the charterer (including a bareboat charterer), the manager or operator, any person performing salvage operations with the consent of the owner or on the instructions of a competent authority, or any person taking preventive measures. Claims under CLC 1992 are channelled exclusively to the registered owner.

The channelling rule doesn’t bar criminal prosecution of officers under national law for offences such as gross negligence; it bars civil claims for pollution damage under the Convention. A complainant State, a claimant municipality, or a private fisheries cooperative cannot sue the cargo owner, the time charterer, or the salvage company for the pollution damage. The single defendant is the registered owner, and the single fund is the limitation fund constituted by that owner under Article V. This concentrates responsibility on the entity required to carry CLC insurance.

The channelling rule does not apply where the damage resulted from the personal act or omission of the person concerned, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. This is the same wilful misconduct carve-out used in the LLMC and the Athens Convention. The European courts in the Erika litigation and the Spanish courts in the Prestige litigation explored the threshold without ultimately breaking the channelling rule on the civil side.

Limitation of liability: SDR per gross ton, 2003 amendments

Article V allows the registered owner to limit liability by constituting a fund in a court of a State Party for the aggregate amount of liability in respect of any one incident. The limit is computed on a sliding scale by reference to the ship’s gross tonnage under the tonnage measurement framework of the Tonnage Convention 1969. The original 1992 limits were 3,000,000 SDR for ships up to 5,000 GT, plus 420 SDR per additional unit of tonnage, capped at 59,700,000 SDR.

The 2003 amendments, adopted under the IMO tacit acceptance procedure on 18 October 2000 and entered into force on 1 November 2003, raised all three values by approximately 50 percent:

The current cap of 89,770,000 SDR for a ship above approximately 140,000 GT corresponds at recent SDR rates to approximately USD 119 million. Below the cap, every additional gross ton between 5,000 GT and 140,000 GT contributes 631 SDR to the limit. A 100,000 GT VLCC has a limit of 4,510,000 + 631 × 95,000 = 64,455,000 SDR (about USD 86 million at recent rates).

The right to limit is lost under Article V(2) where pollution damage resulted from the personal act or omission of the owner, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. The wilful-misconduct test matches the channelling carve-out standard, and the burden sits with the claimant. In the operating life of CLC 1992 to 2026, no national court of final instance has broken limitation against an owner that constituted a fund.

Limitation tiers: current SDR scale

USD equivalents are illustrative at a rate of approximately 1.33 USD per SDR; the applicable conversion is the IMF daily SDR rate on the date the limitation fund is constituted.

Seven defences under Article III

Article III(2) and III(3) provide a closed list of defences to the strict liability of the owner. The owner is exonerated entirely if the damage:

1. Resulted from an act of war, hostilities, civil war, insurrection, or a natural phenomenon of an exceptional, inevitable, and irresistible character (the act of God and act of war defences combined).
2. Was wholly caused by an act or omission done with intent to cause damage by a third party (deliberate third-party act, e.g. terrorism aimed at the ship from outside).
3. Was wholly caused by the negligence or other wrongful act of any Government or other authority responsible for the maintenance of lights or other navigational aids in the exercise of that function.

These three are complete defences that defeat liability altogether. Article III(3) provides a fourth, partial defence: if the owner proves that pollution damage resulted wholly or partially either from an act or omission done with intent to cause damage by the person who suffered the damage or from the negligence of that person, the owner may be exonerated wholly or partially from liability to that claimant. This is a contributory-negligence rule applied per claimant.

In practice the defences are narrowly construed. The act of God defence requires the natural phenomenon to be exceptional, inevitable, and irresistible in the cumulative sense, which excludes ordinary heavy weather, ordinary fog, and ordinary tidal events. The navigational aids defence requires the negligence to have been the whole cause of the damage; partial fault is insufficient. The third-party intent defence requires intent specifically to cause damage rather than mere reckless conduct.

The list of defences in Article III is sometimes described as seven by counting the sub-categories of paragraph 2 separately, then adding the third-party-intent and authority-negligence defences. Whether one counts three, five, or seven, the operative point is the same: the list is closed, defences not in Article III are not available, and the fact that the owner exercised reasonable care is not a defence to the strict liability rule.

Certificate of insurance: Blue Card and P&I Clubs

Article VII requires the registered owner of a ship registered in a State Party and carrying more than 2,000 tonnes of persistent oil cargo in bulk to maintain insurance or other financial security in the sums fixed by the limits in Article V. The State of registry must issue a Certificate of Insurance (the CLC Certificate) attesting that insurance or security is in force, and the certificate must be carried on board the ship.

Insurance is in practice provided by Protection and Indemnity Clubs in the International Group of P&I Clubs (the IG), which collectively cover approximately 90 percent of world ocean-going tonnage by entry. The IG Clubs issue a standardised Blue Card to the flag State certifying that the ship has CLC cover up to the Article V limits. The flag State then issues the State certificate based on the Blue Card. The Blue Card is a standardised document recognised by all major flag States and forms the documentary backbone of the global oil pollution insurance system.

A foreign tanker entering a port or terminal in a State Party must produce a CLC Certificate on demand. Port State Control authorities verify the certificate during routine inspections. A tanker without a valid certificate may be refused entry, detained, or required to leave port. Article VII(11) requires States Party to deny entry to any tanker over 2,000 tonnes of persistent oil cargo lacking a valid certificate. The direct action clause at Article VII(8) allows a claimant to bring proceedings directly against the insurer up to the certificate amount, without first obtaining judgment against the owner.

Compulsory insurance threshold: greater than 2,000 t persistent oil cargo

The 2,000-tonne threshold is the cargo carrying capacity actually loaded for the voyage, not the certificated cargo capacity. A tanker certificated for 100,000 tonnes but carrying only 1,500 tonnes of persistent oil on a given voyage isn’t strictly required to carry the CLC Certificate for that voyage. In practice every tanker above the small product-tanker class carries a CLC Certificate at all times because the administrative cost of switching insurance arrangements voyage-by-voyage exceeds the marginal premium of full-time cover.

The 2,000-tonne threshold dates from 1969 when much of the world coastal-trading fleet operated below that size. As the persistent-oil trade has consolidated into VLCCs, Suezmaxes, and Aframaxes, the threshold has lost most of its practical relevance: a modern crude tanker carries 80,000 to 320,000 tonnes of cargo. The threshold remains relevant for small product tankers and for the residual coastal trade in heavy fuel oil between regional terminals.

Relationship to IOPC Fund 1992 (second tier)

The International Oil Pollution Compensation Fund 1992 (Fund 1992) is the second tier of compensation. It’s established by the 1992 Fund Convention (the 1992 Protocol to the 1971 Fund Convention), which entered into force on 30 May 1996 alongside CLC 1992. Fund 1992 is financed by annual contributions levied on entities receiving more than 150,000 tonnes of contributing oil per year by sea in the territory of a Member State. Contributions are paid by oil receivers, not by shipowners.

The Fund pays compensation for pollution damage in a Member State to the extent that protection under CLC 1992 is inadequate: where the shipowner is exonerated under one of the Article III defences, where the shipowner is financially incapable of meeting the obligation and the insurance is insufficient, or where damage exceeds the shipowner’s CLC limit.

The combined CLC 1992 and Fund 1992 limit for a single incident is 203,000,000 SDR (approximately USD 270 million). If CLC 1992 contributes 50 million SDR, Fund 1992 will pay up to 153 million SDR; if CLC contributes the maximum 89.77 million SDR, Fund 1992 will pay up to approximately 113 million SDR. The Fund Convention 1992 operates as a separate legal entity with its own Assembly, Executive Committee, and Director, headquartered in London.

Relationship to Supplementary Fund 2003 (third tier)

The Supplementary Fund Protocol 2003 is an optional third tier for States Party to the 1992 Fund Convention that elect to ratify the Supplementary Protocol. It entered into force on 3 March 2005 and operates above the 1992 Fund layer, bringing the total combined cap for a single incident to 750,000,000 SDR (approximately USD 1 billion). Membership is optional; as of 2026 approximately 33 States are Party, including most EU coastal States, Japan, the Republic of Korea, and several others. The Supplementary Fund is financed by contributions from oil receivers in Supplementary Fund States only.

The three-tier structure functions as a vertical waterfall:

The shipowner pays first up to the CLC limit. If pollution damage exceeds that limit, Fund 1992 pays the next layer up to the 203 million SDR combined total. If damage exceeds 203 million SDR and the incident occurred in a Supplementary Fund State, the Supplementary Fund covers the next layer up to 750 million SDR combined. Damage above 750 million SDR in a Supplementary Fund State, or above 203 million SDR in a State that isn’t a Supplementary Fund member, is uncovered under the international regime and falls to national law or the flag State.

Major cases: Erika 1999, Prestige 2002, Hebei Spirit 2007, Sanchi 2018

Erika 1999

The Maltese-flag tanker Erika broke in two off the Bay of Biscay on 12 December 1999 and discharged approximately 20,000 tonnes of heavy fuel oil onto approximately 400 km of French Atlantic coast. Total damage was assessed at over EUR 1 billion including environmental reinstatement, fisheries losses, tourism losses, and cleanup costs. The CLC 1992 limit for the Erika (37,283 GT) was about EUR 13 million under the pre-2003 limits then in force. Fund 1992 paid up to its then-combined limit of 135 million SDR (about EUR 184 million combined with the CLC payout). The shortfall against EUR 1 billion of damage was the political catalyst for both the 2003 Supplementary Fund Protocol and the EU Erika I, II, and III packages of regional safety legislation.

French criminal proceedings against the cargo owner Total were litigated separately under French environmental law. The French Court of Cassation in 2012 confirmed the concept of prejudice écologique (ecological prejudice) as a head of recoverable damage in French civil law, a development that has since been codified in the French Civil Code at Articles 1246-1252.

Prestige 2002

The Bahamas-flag single-hull tanker Prestige broke up and sank approximately 130 nautical miles west of Galicia on 19 November 2002 and discharged approximately 63,000 tonnes of heavy fuel oil onto Spanish, Portuguese, and French coasts. Total damage was assessed at over EUR 1 billion. The Prestige was 81,564 GT, giving a CLC limit of about EUR 22 million under the pre-2003 limits. Fund 1992 paid up to its 135 million SDR combined limit (approximately EUR 171 million in total recovery under the international regime).

The Spanish Supreme Court in 2016 confirmed the master’s criminal liability for environmental offences and assessed damages of over EUR 1.5 billion against the master, the shipowner, and the P&I Club. The case is the leading authority for the operation of the direct action clause under CLC 1992 Article VII(8), which allows a claimant to bring proceedings directly against the insurer up to the certificate amount. The Spanish courts’ decision to pursue the full loss through criminal proceedings in parallel with the CLC civil regime, rather than accepting the international cap, remains controversial in the maritime law community.

Hebei Spirit 2007

The Hong Kong-flag VLCC Hebei Spirit was struck while at anchor by a drifting crane barge under tow off Daesan, Republic of Korea, on 7 December 2007, discharging approximately 10,900 tonnes of crude oil. The Korean Supreme Court confirmed in 2009 that the registered shipowner of the Hebei Spirit was strictly liable under CLC 1992 even though the proximate cause was the negligence of the tow operator, on the ground that the deliberate-third-party-act defence in Article III(2)(b) was not satisfied: the tug crew had been negligent, not acting with intent to cause damage. The case clarified that Korean courts read the third-party-intent defence narrowly. The Korean government supplemented Fund 1992 payments with a domestic special compensation scheme.

Sanchi 2018

The Panama-flag suezmax tanker Sanchi collided with the bulk carrier CF Crystal in the East China Sea on 6 January 2018, caught fire, and sank on 14 January with the loss of all 32 crew. The Sanchi was carrying approximately 111,000 tonnes of natural gas condensate, a non-persistent ultra-light hydrocarbon. The cargo therefore fell outside the scope of CLC 1992, even though the damage to the marine environment was severe. The Sanchi case illustrates the persistent/non-persistent boundary and has fed discussion of whether CLC should be extended to non-persistent oils carried at scale by VLCC-class condensate tankers. As of 2026, the IMO has not adopted any amendment to extend CLC coverage to condensate cargoes.

EU shadow-fleet insurance verification 2023-2025

The post-2022 sanctions regime against Russian crude oil sales above the G7 price cap, and the parallel sanctions on Iranian crude exports, gave rise to a shadow fleet of older tankers operating outside the IG P&I Club system. Estimates as of 2025 place the shadow fleet at 600 to 1,400 tankers, many trading via ship-to-ship transfers in the Black Sea, the Bosporus approaches, the Aegean, the Strait of Malacca, the Lakshadweep approaches, and the Baltic.

Many of these vessels carry CLC Certificates issued on the basis of non-IG P&I cover from regional Russian or Indian insurers whose claims-paying ability and reinsurance backing are uncertain. The European Commission in 2023-2025 introduced enhanced Port State Control verification of CLC Certificates, sharing of insurer watchlists among coastal States, and restrictions on access to EU ports and ship-to-ship services for tankers identified as engaged in price-cap-evading trade.

The IMO MEPC 81 in 2024 adopted a resolution calling on flag States to deny CLC Certificates to operators with no verifiable insurance backing. Coastal States in the Baltic, the North Sea, and the Mediterranean have begun systematically declining entry to tankers without IG P&I cover where the alternative cover can’t be substantiated.

The practical question for any future Erika-class casualty involving a shadow-fleet tanker is whether the CLC Certificate is honoured by the underlying insurer, and whether the casualty’s damages will fall back on Fund 1992 and the Supplementary Fund as the de facto first-payer regime. This stress on the polluter-pays architecture is the single most important contemporary policy issue in the CLC 1992 framework.

Constitution of the limitation fund and claimant access

When an incident occurs, the registered owner who wishes to limit liability under Article V must constitute a limitation fund in a court or other competent authority in one of the States Party where the incident occurred, where preventive measures were taken, or where the ship is registered. The fund is constituted by depositing the sum specified in Article V (calculated on the GT scale) or by providing an acceptable bank guarantee or other security. Once the fund is constituted in one State, courts in all other States Party must bar any attachment or arrest of the owner’s assets for CLC claims arising from the same incident.

The fund is distributed among claimants in proportion to their admitted claims. Claims must be filed with the fund within the limitation period: under Article VIII of CLC 1992, the limitation period is three years from the date when the damage occurred, and in no case more than six years from the date of the incident which caused the damage. Claims filed after those periods are time-barred. The three-year period runs separately for each person who suffered damage, measured from when that person knew or should have known of the damage, but it can’t extend past the six-year outer limit from the incident date.

Claimants entitled to compensation from the fund include: coastal States and municipalities for cleanup costs, public authorities that undertook preventive measures, private landowners and businesses for property damage and economic loss attributable to the pollution, fishing communities for loss of catch, and aquaculture operators for losses to farmed stock. Environmental reinstatement costs up to a reasonable level are recoverable as pollution damage since the 1992 Protocol amendments. Speculative or remote economic loss is not recoverable: the standard applied by IOPC Funds is whether the claimant can demonstrate that the loss arose from contamination of a resource they had a right to use or a demonstrated dependency on.

Where the fund is insufficient to meet all admitted claims in full, each claimant receives a pro-rata share. This pro-rating is the practical reason why Fund 1992 exists: in cases like the Erika and Prestige, the CLC fund was exhausted within weeks and the balance of recovery came from Fund 1992.

Comparison with US OPA 90

The United States is not a party to CLC 1992 or Fund 1992. The US regime is the Oil Pollution Act 1990 (OPA 90), enacted following the Exxon Valdez spill of 1989. OPA 90 imposes strict liability on responsible parties for oil pollution damage in US waters and creates the Oil Spill Liability Trust Fund funded by a per-barrel levy on petroleum.

Four differences from CLC 1992 are worth mapping precisely. First, caps: OPA 90 has nominal caps that are routinely broken for any meaningful incident – the responsible party loses the cap for gross negligence, wilful misconduct, violation of an applicable Federal safety or construction regulation, or failure to report the incident. That threshold is far lower than CLC 1992’s wilful-misconduct standard, making the OPA 90 cap a soft floor rather than a hard ceiling. Second, channelling: OPA 90 has none; claimants can pursue the operator, the demise charterer, the cargo owner where applicable, and other parties in the chain. Third, State law: OPA 90 expressly does not pre-empt State law remedies; many US States carry their own strict-liability oil pollution statutes with separate rules and unlimited liability. Fourth, insurance: OPA 90 requires Certificates of Financial Responsibility (COFRs) for vessels carrying oil into US waters; the IG P&I Clubs historically declined to issue COFRs because of unlimited-liability exposure, and a separate market of specialist COFR insurers emerged.

The dual-regime reality means that a Suezmax tanker carrying Mexican crude to a US Gulf refinery operates under OPA 90 in US waters and under CLC 1992 in any other coastal State on its route. P&I Clubs price the two exposures separately.

Per-state ratification status

CLC 1992 is in force for approximately 150 States as of 2026, covering roughly 97 percent of world tanker tonnage by the IOPC Funds’ assessments. The 1992 Fund Convention is in force for approximately 115 States. The 2003 Supplementary Fund Protocol is in force for approximately 33 States including France, Germany, Greece, Ireland, Italy, Japan, the Republic of Korea, the Netherlands, Norway, Portugal, Spain, and the United Kingdom.

Notable non-parties to CLC 1992 include the United States (OPA 90 regime), several landlocked States for which the Convention has limited operational relevance, and a handful of small island and developing coastal States. Most major flag States including Liberia, Marshall Islands, Panama, Singapore, Hong Kong (China), Malta, the Bahamas, and Greece are Party. Most major coastal States including all EU members, China, India, Japan, the Republic of Korea, Australia, Canada, the Russian Federation, and the Gulf Cooperation Council members are Party. The practical effect is that any tanker casualty in the EEZ of a Party State engages the Convention regardless of the flag of the tanker, provided the tanker isn’t a US-flag tanker calling at a US port (in which case OPA 90 governs).

Relationship to the LLMC and Bunkers Convention

CLC 1992 occupies a distinct space alongside two related liability conventions. The LLMC 1976/1996 (Convention on Limitation of Maritime Claims) provides a general limitation fund for maritime claims including wreck removal, personal injury, and cargo damage, but is explicitly displaced by CLC 1992 for oil pollution damage from tankers: Article V(7) of CLC states that the provisions of the Convention displace any other limitation regimes applicable to the owner in respect of CLC-covered pollution damage. An owner that constitutes a CLC limitation fund cannot additionally invoke LLMC to cap the same pollution loss.

The Bunkers Convention 2001 fills the gap for non-tanker vessels and for tanker bunker spills not covered by CLC. Where a container ship or bulk carrier causes a bunker spill, the Bunkers Convention applies and the shipowner limits under the LLMC scale. The same split applies to a tanker: a persistent cargo spill engages CLC; a bunker-only spill on an unladen tanker not on the immediate post-cargo ballast voyage engages the Bunkers Convention and LLMC. Owners of tankers carrying persistent cargo and carrying persistent bunkers are typically covered for both exposures under a single P&I entry, with the Club issuing both the CLC Blue Card and the Bunkers Convention Blue Card as a package.

Operational compliance steps for tanker operators

Article VII compliance requires an ordered sequence of steps before a voyage. The registered owner must confirm the P&I Club entry is current and covers the expected cargo quantity in excess of 2,000 tonnes of persistent oil. The Club issues the Blue Card directly to the flag State administration on request; the Blue Card must state the ship’s name, flag, IMO number, the owner’s name and address, the type of insurance, the dates of validity, and the insurer’s statement that cover meets Article V limits. The flag State then issues the CLC Certificate based on the Blue Card, specifying the identical information plus the issuing State. The certificate is carried on board in the original.

For a tanker operated under a bareboat charter, the registered owner’s identity is what matters: the certificate is issued in the registered owner’s name, not the bareboat charterer’s. A change of registered owner mid-voyage (through a sale) triggers an immediate obligation to secure a replacement certificate in the new owner’s name before the ship enters any port of a State Party. Most tanker sale-and-purchase contracts include a condition that the CLC Certificate is transferred or re-issued as part of delivery. Failure to carry a valid certificate is a detainable deficiency under Port State Control regimes in the Paris MOU, Tokyo MOU, and US Coast Guard NVIC frameworks.

Interaction with MARPOL Annex I and the prevention/liability split

CLC 1992 is entirely separate from MARPOL Annex I in legal character: MARPOL Annex I is public-law pollution prevention administered by flag States and port States, while CLC 1992 is private-law civil liability channelled to the registered owner. A ship can comply fully with MARPOL Annex I’s equipment and operational discharge rules and still be liable under CLC 1992 for an accidental spill. The two instruments are complementary, not overlapping.

The practical linkage is enforcement: Port State Control officers conducting a MARPOL Annex I inspection under MARPOL Annex I Regulation 17 and Regulation 12 will simultaneously verify the CLC Certificate as part of the statutory certificates check. A deficiency in either the MARPOL compliance record or the CLC Certificate can result in detention. The SOPEP (Shipboard Oil Pollution Emergency Plan) required under MARPOL Annex I Regulation 37 is the shipboard response document; CLC 1992 governs the financial liability for the pollution damage that arises if the SOPEP response fails to contain the spill.

Where a tanker causes both a cargo spill and a bunker spill in the same incident, the CLC covers the persistent cargo oil and the bunkers in the cargo tanks. Bunkers in dedicated bunker tanks that aren’t cargo tanks are separately governed by the Bunkers Convention. In practice the CLC certificate covers the larger exposure; the Bunkers Convention exposure for a VLCC-class bunker quantity (typically 3,000 to 5,000 tonnes of HFO) represents a secondary but non-trivial liability.

Crude oil washing operations under MARPOL Annex I Regulation 33 generate oil residues that remain in the cargo tanks. When such residues escape during a subsequent ballast voyage, CLC 1992 applies (the immediately-following-ballast-voyage rule). This means a tanker master operating under the COW programme must be aware that the residue quantity left in the tanks after COW affects the ship’s CLC exposure on the return voyage.

Calculating the SDR limit: practical steps

The CLC oil pollution compensation limit calculator at ShipCalculators.com applies the three-tier scale. The input is the ship’s certificated gross tonnage from the International Tonnage Certificate (1969). The output is the limit in SDR, convertible to a local currency at the IMF daily rate.

Three common errors in the calculation deserve notice. First, applying the formula to deadweight rather than GT: a 320,000 DWT VLCC has a GT of approximately 160,000, not 320,000. The CLC ceiling of 89.77 million SDR applies at 140,000 GT, which most VLCCs exceed; using DWT instead of GT would suggest a far larger limit than the Convention actually provides. Second, forgetting that the scale caps at 140,000 GT regardless of actual GT: a 200,000 GT ULCC and a 145,000 GT Suezmax both have the same CLC ceiling of 89,770,000 SDR. Third, converting SDR to currency at the date of the incident rather than at the date the limitation fund is constituted: Article V(9) specifies that the SDR value is the conversion rate in force on the date of constitution of the fund, which can be months after the incident and can differ materially from the incident-date rate.

The IMO CLC calculator at ShipCalculators.com also computes the limit and shows the Fund 1992 and Supplementary Fund top-up layers for context.

Limitations

CLC 1992 addresses tanker-borne persistent oil pollution but leaves several material gaps. Non-persistent oils are outside its scope regardless of cargo volume: the Sanchi 2018 condensate spill and the routine light-product spills from small product tankers engage only national tort law. Damage on the high seas beyond any State Party’s EEZ is outside the Convention regardless of severity. Damage in non-Party coastal States is outside the Convention even if the tanker is registered in a Party State.

The limitation cap creates an unavoidable disconnect between insured liability and actual damage potential in major casualties. A 300,000 DWT ULCC carrying 280,000 tonnes of crude oil has an 89.77 million SDR CLC cap and a maximum combined three-tier recovery of 750 million SDR in Supplementary Fund States. The Erika (20,000 tonnes, EUR 1 billion in assessed damage) and Prestige (63,000 tonnes, over EUR 1 billion) both exceeded the international regime’s total recovery under the then-current limits, and the Supplementary Fund’s 750 million SDR combined cap would be inadequate for a major VLCC casualty in a densely populated coastal zone.

The shadow fleet problem as of 2025 introduces a new structural vulnerability: where the CLC Certificate is backed by an insurer of uncertain solvency, the polluter-pays principle fails at Tier 1 and the burden shifts to Fund 1992 and the Supplementary Fund. The international regime has no mechanism to compel a flag State to revoke CLC Certificates backed by inadequate insurers, beyond the political pressure exercised through IMO resolutions like MEPC 81 (2024).

The Convention also doesn’t cover wreck removal costs or cargo salvage costs as such – those are governed by the Nairobi Wreck Removal Convention 2007 and LLMC, respectively. A major tanker sinking generates costs under multiple concurrent legal regimes, each with its own limit and its own claimant class.

See also

• MARPOL Annex I oil pollution prevention
• MARPOL Annex I Regulation 37 SOPEP
• MARPOL Annex I Regulation 28 damage stability
• Fund Convention 1992
• Bunkers Convention 2001
• LLMC 1976/1996
• PSSA Western European Waters
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