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What is the international compensation mechanism for oil pollution damage from ships?
Study on Compensation Mechanism for Oil Pollution Damage of Ships in China;

In order to solve the embarrassment behind "polluter pays", the international common practice is to establish compulsory insurance for tanker owners as the first level of protection, and oil pollution fund compensation funded by oil shippers as the second level of protection to ensure pollution victims (including pollution removal units, seafood farmers, tour operators, etc.). ) get enough compensation. The latter, the compensation fund, mainly has three modes of operation:

The first is the international oil pollution fund model. The fund was established in the 1970s, and the oil companies of the contracting countries paid their contributions according to the annual maritime oil transportation volume, and compensated the ships of the member countries for oil pollution damage. So far, more than 100 countries have joined the fund. In China, this model only applies to the Hong Kong Special Administrative Region.

The second is the American model. The United States did not participate in the international oil pollution fund, but established the National Oil Pollution Fund Center (NPFC) and the Oil Spill Liability Trust Fund (OSLTF) by enacting the oil pollution law, and the domestic oil pollution fund was as high as 1 100 million US dollars. The operation characterized by high insurance, high contribution and high compensation is similar to the international compensation mechanism in mode, but it requires higher responsibility of shipowners.

The third is the Canadian model. As the first country in the world to establish a compensation mechanism for oil pollution damage through domestic legislation, Canada joined the international oil pollution fund on the one hand, and made up for the lack of compensation from the international oil pollution fund by establishing a domestic oil pollution fund on the other hand, the latter was mainly funded by oil companies. In the event of an oil spill, the domestic oil pollution foundation will first pay the cleaning fee and part of the compensation, and then recover from the shipowner and the international oil pollution fund in accordance with international conventions.

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