Page 44: of Maritime Reporter Magazine (December 1994)

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OPA 90 UPDATE:

COFRs — Tanker Industry

Deadline Is Near by Michael Minogue, Director, Environmental Crisis Management

On July 1, 1994 the U.S. Coast

Guard (USCG) issued its interim final rule (IFR) pertaining to Cer- tificates of Financial Responsibility (COFRs) under OPA 90. Unfortu- nately for vessel owners and their insurers, the International Group of P&I Clubs, the IFR more or less mirrored the USCG's proposed

COFR rule of September 1991. In short, it requires that the vessel's oil pollution liability insurer act as a

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FAX: (310) 495-1045 guarantor under the certificate.

The International Group of Pd

Clubs, maintaining their origin position, have refused to act as su< guarantors. Accordingly, the ce tificates cannot be obtained by e\ dencing the P&I Clubs as the ii surer. However, the P&I Clubs ha^ indicated that they would contini to provide their Members with sue coverage, albeit without the require certification.

OPA 90 COFRs have raised th minimum limits of financial respor sibility a vessel owner is required t evidence. A tank vessel (regardles of whether it is carrying an oil carg or not) must have certification c $1,200 per grt or $10 million, which ever is greater, for pollution plu $300/grt or $5 million, whichever i greater, for CERCLA (Comprehen sive Environmental Response, Com pensation, and Liability Act). Non tank vessels must be certified fo: $600/grt or $500,000 whichever ii greater for oil pollution plus fo;

CERCLA, $300/grt or $5 million whichever is greater when carrying hazardous substances as cargo oi $300/grt or $500,000, whichever is greater when not carrying such haz- ardous cargoes.

In essence then, any tanker in excess of 6,500 grt must have finan- cial responsibility equal to $1,500/ grt. Any non-tank vessel over 5,500 grt engaged in carrying hazardous cargoes would have to evidence fi- nancial responsibility for $900/grt.

The amount of such certification need only be equal to the maximum

OPA 90 limit for the largest vessel in a fleet or group of vessels. For instance, if a vessel owner has six tankers and three non-tankers in his fleet with the largest tanker being 10,000 grt and the largest non-tanker being 100,000 grt, then the amount of the certificate that would cover all nine vessels would have to be $90 million (100,000 grt x

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Circle 54 on Reader Service Card

Circle 253 on Reader Service Card

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