ever widening claims of national jurisdiction for the ostensible purpose of pollution control in international waters.

Keeping in mind these considerations, I would like now to explore the background of the Brussels Convention, to summarize its provisions, and to discuss in a general way the relationship between the Convention and the provisions of the 1970 Water Quality Improvement Act (Public Law 91-224).

BACKGROUND

The Torrey Canyon disaster of 1967 focused the attention of the international maritime community and, indeed, of the world on the hazards to the environment created by the expanding volume of petroleum shipped on the world's oceans and by the use of larger tankers to accommodate these shipments. As a result, IMCO began serious consideration of the general area of marine pollution in an effort to prevent and minimize pollution damage and to establish adequate provisions for compensation of injured victims in cases where damage does occur. In the area of civil liability, IMCO recognized the necessity of establishing a uniform and equitable regime to govern compensation. The Governments represented in IMCO, including the United States, believed that without a uniform regime there could be no assurance that adequate compensation would in fact be available.

With the support of the international community, IMCO moved expeditiously, preparing draft conventions and calling an International Legal Conference in Brussels in 1969 to consider the question of marine pollution damage.

The details of the negotiations during that conference are contained in the U.S. delegation report submitted to the Secretary of State on December 30, 1969. A copy of this report has been made available to the subcommittee.

THE EFFECT OF THE CONVENTION

Without an effective international regime, the burden of oil pollution falls on the coastal state and its citizens. This burden is more properly and rightfully borne by those who engage in and benefit from the maritime transport of oil. At the Brussels Conference, there was general agreement that one of the main objectives was to design a workable international system to transfer the economic burden of oil pollution damage from the coastal state and its citizens to those who engage in and benefit from the shipment of oil. Their efforts resulted in the Brussels Civil Liability Convention. The heart of the convention is a regime of strict liability, enforced by a scheme of effective financial responsibility, with high limits of liability. Let me summarize these provisions.

(1) Strict Liability on the Vessel

The first element of the convention is the establishment of strict liability on the vessel carrying oil. This approach appears to be the most likely to achieve the two primary objectives of the United States: (a) to eliminate or reduce pollution damage, and (b) to provide a convenient and efficient method for compensating victims when damage does

occur. The assignment of liability to the vessel and the fact that the liability is strict, contribute to both these objectives.

Placing the liability on the vessel will encourage the vessel owner to make every effort to prevent oil spills. Since he has custody of the oil during the risk period, and he is the only person who can control the activities of the captain and crew and the maintenance of the vessel, it is desirable that the tanker owner himself bear the economic burden when his vessel is involved in an oil pollution incident. Moreover, marine insurers will insist that insured owners take all possible precautions.

Placing the liability on the vessel will also make the victim's task of obtaining compensation easier. The ownership of an oil cargo is usually divided and in fact can change during a voyage. It would be difficult and perhaps impossible for a victim to trace the cargo owner at the time of the damage and to pursue him in the courts. The diversity of ownership also makes it difficult to enforce a financial responsibility system based on cargo liability.

The fact that liability is strict should motivate vessel owners to take positive action to improve the safety of their operation. In many cases. the failure to take certain actions might not be considered negligent, and thus liability limited to negligence would produce no incentive to institute preventive measures in the tanker industry.

Strict liability will also benefit the victim. He will know automatically against whom to proceed. In cases involving the negligence of third parties, for example in collision cases, the victim may proceed directly against the tanker owner or his insurer without waiting for an eventual determination of responsibility between the tanker and the third party.

Because we believed that strict liability on the vessel was the best method of achieving our objectives, the United States strongly supported this position during the conference, and that position ultimately prevailed.

I have been referring up to this point to strict liability, which I use to indicate nonfault liability, subject to some limited defenses. I should note here that the convention provides for only three defenses on the part of the shipowner:

(a) The damage was caused by an act of war or a natural phenomenon of exception, inevitable, and irresistible character, that is, an act of God;

(b) The damage was wholly caused by an act or omission done with intent to cause damage by a third party; or

(c) The damage was wholly caused by negligence or other unlawful act of any government or other authority responsible for the maintenance of light or other navigational aids in the exercise of that function. In all cases, the vessel owner bears the burden of proof. The convention does not allow exoneration in cases where damage was caused by the negligence of a third party, although it does preserve the rights of the vessel owner to proceed against such third party.

(2) Financial Responsibility

The second significant aspect of the convention is that it requires tanker vessels to maintain proof of financial responsibility, and to carry a certificate attesting thereto as a condition for entry into ports

of contracting parties. The proof of financial responsibility assures that legal rights under the convention will be translated into economic compensation and that the victim will not be at the mercy of the vessel owner's solvency.

The convention also provides for direct action against the insurer or other provider of financial security and entitles such person to invoke only the defenses available to the vessel owner, in addition to the defense that the damage occurred from the willful misconduct of the owner himself.

When the convention comes into force and the international certificate system is operating, most tankers traveling in or near our waters will be covered by insurance, whether or not they enter U.S. ports or are otherwise subject to the jurisdiction of U.S. laws. This will be of significant benefit. For example, petroleum shipments from Venezuela to Canada travel in the waters adjacent to our territorial seas and could cause damage within those waters. In the absence of an international agreement, we could not under U.S. law effectively require tankers in the Venezuelan-Canadian trade to comply with U.S. financial responsibility requirements.

The coverage of these vessels by the certificate system will insure that money is available to pay compensation. This assurance gains added significance in light of the provisions of the convention which guarantee that the provider of the financial security will in fact be accessable to our courts. I will discuss the effect of liability limits in a minute, but I would first like to point out one feature of the limitation provision that will in effect provide this guarantee. Under the convention, jurisdiction will lie in the courts of any country in which polluton damage occurs. Whenever a suit is brought in such a court, the vessel owner or the person providing financial security, must deposit a sum equal to the limit of his potential liability with the court: if he fails to do so, he cannot claim the benefit of the limit. Under the scheme of the convention, the incentive to claim the benefit of the limitation should insure that funds will be available whenever a court has assumed jursidiction.

I might mention at this point that the certificate can only produce. results for the victim if insurance is in fact available. For this reason, the realities of the marine insurance industry play a role that cannot be ignored. As soon as we start talking about marine insurance, we automatically think in terms of limitations on liability, and this brings me to the third point.

(3) Limitation of Liability

The convention provides for a limit of $34 per gross registered ton with a maximum of $14 million. This sum will represent an exclusive fund for recovery against a tanker for civil damage sustained by governments and private parties for cleanup costs and for damage to property. The limit does not apply to actions against third parties or to actions against nontankers and does not govern any criminal penalties which may be imposed under national law.

The limits provided for in the convention are twice those provided by the 1957 Brussels Convention on Civil Liability. The doubling of the limits and the imposition of strict liabiity represent a significant. forward step on the part of international maritime liability law. Although it could be argued that these limits are not adequate to cover

all the potential damage that could result from a catastrophic mishap, our past experience indicates that they are ample to cover the likely incidents of oil pollution.

In fixing liability limits, the conference considered not only the extent of the predictable damage, but also the availability of insurance to cover the liability. Without insurance, there can be no guarantee that funds will be available to victims. Many delegates at Brussels were concerned that uninsurable liability might produce a multitude of oneship corporations, greatly reducing the possibility of recovery. Victims would then have to rely on U.S. courts to "pierce the corporate veil," a risky proposition at best. Additionally, a certification system could function effectively only if insurance was available.

I might add that the United States was directly instrumental in negotiating limits of liability as high as those which ultimately emerged, and without yielding on the principle of strict liability.

RELATIONSHIP TO 1970 ACT

The convention represents an international attempt to achieve essentially the same objectives as those sought on a national basis by the Water Quality Improvement Act of 1970. The goal of both is to prevent or minimize pollution damage and to compensate the victims of damage when an oil spill occurs. There are, however, some differences in approach and also some differences of a technical nature, so that the act will have to be amended in some places in order to make it consistent with the convention.

Let me indicate a few of the differences between the act and the convention.

1. Vessels Covered

The application of the convention is limited to vessels actually carrying oil in bulk as cargo and does not cover dry cargo vessels. The act covers all vessels. This difference should not create any problems since the act will continue to apply to dry cargo vessels after the Convention is in force.

2. Limits of Liability

The convention limits liability to $134 per ton, while the act provides for a limit of only $100 per ton. Thus, the convention would increase the liability in the case of tankers of 140,000 gross registered tons or less, and the act would have to be amended to provide for this increased liability.

3. Claims

The convention provides an exclusive remedy for the payment of both governmental and private claims, while the act covers only Government cleanup costs. It might of course be argued that the act is more favorable from the standpoint of private claimants, since it does not preclude their right of action against the vessel without limitation. I think this argument is defective. First of all, without the convention the private claimant's right to recover against the vessel is limited by 46 U.S.C. 183 to the salvage value of the vessel after the incident occurs, which of course may well be zero. Moreover, the private right

of action which the act preserves may in fact be a right without a remedy, particularly with respect to foreign flag vessels. The private claimant may be entirely unable to reach assets of the foreign owner; even if assets are available, however, it seems unreasonably burdensome to expect a private litigant to engage in a difficult and expensive search for these assets. Additionally, although private claims under the Convention will be paid out of the same $14 million fund available for governmental claims, we believe that Government cleanup costs will rarely if ever even approach the $14 million figure. A significant sum of money should remain available after cleanup costs for the payment of private claims. Moreover, as cleanup technology becomes more efficient and developed, we expect costs will go down. Under these circumstances, I believe the convention creates a remedy for private claimants which does not exist in the absence of international agreement and which in most instances will be adequate to cover the damage.

4. Area of Applicability

The convention expands the area in which a right of compensation may be enforced. The act applies only to damage resulting from a spill within the territorial waters or contiguous zone of the United States, while the convention applies to a spill occurring anywhere on the high seas resulting in damage to U.S. territory or territorial waters. Thus, under the act, there is no effective remedy against a vessel responsible for a spill occurring more than 12 miles from the coast of the United States.

5. Nature of Liability

The liability of the convention is more strict than that embodied in the act. The act provides a defense for acts of third parties, while the Convention does not. This means that if a small tugboat or fishing vessel collides with a tanker in the fog, and the fault lies entirely with the smaller vessel, the tanker is not liable under the act while he would be liable under the convention. In my opinion, the availability of a third-party-act defense brings us back to the old concept of liability based on negligence; it is no longer strict liability.

6. Civil Action

The convention permits direct action by a claimant against an insurer, and provides that the insurer will not be able to plead any defenses that he may have against the owner other than that the damage resulted from the willful misconduct of the owner himself. The act on the other hand allows the insurer to plead against the claimant all defenses that he would have against the owner.

Let me summarize a few points. The adoption of the strict liability standard and the financial responsibility provision will afford coastal interests in the United States greater protection than is currently available under U.S. law. The ratification of this international agreement will allow U.S. citizens to recover damages against vessels responsible for oil spills beyond the jurisdiction of the United States. And the convention limits the defenses available to an insurer in a direct action suit by a damaged claimant.