What Is The Implementation Of PPP In The Compensation System

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3.1.1 Implementation Mechanisms
Implementation of PPP in the liability and compensation regime is seen through adequate reference to mechanisms such as compulsory insurance and compensation funds whereby a ship owner is required to constitute a fund with the Court for the total limit of his liability to avail the benefit of limitation , and maintain compulsory insurance certified by the appropriate State authority for any ship carrying more than 2,000 tons of oil .

3.1.2 Loss of Right to Limit Liability
There is very narrow scope for a ship owner to be exonerated from strict liability. It requires proof that damage resulted from war or was wholly caused by an intentional act or omission of a third party or by negligence of an authority
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The Small Tanker Oil Pollution Indemnification Fund (STOPIA) was established to raise maximum amount of compensation payable for small ships and the Tanker Oil Pollution Indemnification Agreement (TOPIA) was established to indemnify the supplementary fund 50% of the compensation amount it pays in event of an oil pollution accident.

Considering the costs of some of the biggest oil spills in history, the SF holds adequate funds to deal with oil spills of high magnitudes; till date no incident has required compensation from the SF . The liability and compensation provisions of the CLC and FC satisfy the main components the PPP by allowing the victims impartial access to remedies and allocating costs of pollution damage, emergency response and clean up to the polluters .

The abovementioned factors show that the Conventions have come a far way in achieving a perfect balance in burden sharing among the shipping and oil industries, adapting the ‘polluter pays’ theory to the extent feasible. Disturbing this balance for the few incidents where admissible claims exceeded the limits under the 1992 CLC and FC would mean disturbing a widely accepted, well-tested and successful system operating on an international level .

An interesting view is raised by Chao Wu in his paper on threats to the International Convention System; he questions the fairness in expecting the transporter and cargo owners to bear all the costs
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