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Legal Update

Thailand Anchors Down its Oil Pollution Liability Laws

3 February 2010
Mayer Brown Legal Update


The Thai Cabinet has approved a draft law governing civil liability for oil pollution from shipping. The draft seeks to implement international maritime standards and establish firm policies to deal with the catastrophic effects of oil spills.

Full Update

The Draft Act on Civil Liability for Oil Pollution Damage ("Draft") was approved by the Thai Cabinet in December 2009. It is modelled on the provisions of the International Convention on Civil Liability for Oil Pollution Damage 1969 ("CLC"), which Thailand intends to ratify once all necessary arrangements are completed.

The Draft, like the CLC, establishes a framework to address the multifarious effects caused by oil spills and provide appropriate redress to injured parties. At the same time it also enables ship owners to limit their liability in accordance with internationally accepted precepts.

By setting the parameters of liability for oil pollution damage, the Draft ensures certainty and predictability in the law for all parties.

Key provisions of the Draft include the following:

  • Applies to any vessel wishing to dock in Thai waters carrying persistent oil as its cargo, including crude oil, bunker oil, heavy diesel and lubricating oil
  • Imposes strict liability on ship owners to pay compensation
  • Special defences are available in extenuating circumstances, such as war, natural disaster, fault of third party and negligence of responsible government agency, e.g. lighthouse authority, but the burden is on the ship owner to prove that such defence should apply
  • Damage includes both environmental and socio-economic harm caused in the area
  • Insurance is mandatory for vessels carrying more than 2000 gross tonnes of persistent oil, evidence of which must be surrendered on demand by the Thai Maritime Department
  • Ship owners may limit their liability in respect of claims according to the amount of persistent oil they carry
  • Claims may be initiated directly against the insurer
  • The prescription period is three years from the date of damage or injury, or six years from the actual incident

The Draft clearly defines and guarantees justice to environmental groups, fishing, aquaculture and tourism industries, as well as local residents affected by oil spills. At first glance, it seems to impose heavier burdens on oil-carrying vessels. However, it will in fact serve to protect ship owners by identifying the scope of their rights and duties and capping their liabilities.

For inquiries related to this Client Alert, please contact:

Apichart Phankeasorn ( )

Anon Bovanant ( )

Learn more about our Bangkok office, Environmental and Shipping practices.

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