Small Tanker Oil Pollution Indemnification Agreement (STOPIA) – No.2

25 February 2005 No.04-016
Further to our previous circular No.04-012 of 29 November 2004 on the captioned, we would like to inform the Members of the implementation of the Small Tanker Oil Pollution Indemnification Agreement (STOPIA) on 3 March 2005 as follows.

1.The Supplementary Fund Protocol to come into force

On 3 March 2005, the Supplementary Fund Protocol will come into force in Denmark, Finland, France, Germany, Ireland, Japan, Norway and Spain. A number of other States are expected shortly to ratify the Protocol.

The Protocol was adopted in May 2003 in order to provide an additional layer of compensation for oil pollution damage to which the 1992 Civil Liability Convention (CLC 92) and/or 1992 Fund Convention (FC 92) apply.

2.The implementation of the STOPIA scheme
The STOPIA scheme will enter into effect simultaneously with the entry-into-force of the Protocol.

In 2001, at the time when the Supplementary Fund Protocol was being drawn up, the Boards of all International P&I Group (IG) Clubs agreed to put in place a mechanism for increasing the minimum limit of shipowner liability under CLC 92 to:-


  • Demonstrate the support of shipowners for the compensation scheme established by CLC 92 /FC 92.
  • Demonstrate the commitment of shipowners to the notion of sharing. This was in recognition of the potentially increased burden on contributing oil receivers under the proposed third tier of compensation through the Supplementary Fund Protocol.
  • Avoid the necessity of amending the Conventions.
In order to implement the STOPIA scheme, the following two agreements were drawn up.

3.STOPIA agreement

A copy of STOPIA is attached as Annex 1. As explained in our previous circular No.04-012, the main features of STOPIA are: -

  • The limits of liability under CLC 92 for tankers of 29,548 GT or less will be voluntarily increased to SDR 20 million in the event of oil spills affecting a State where the Supplementary Fund Protocol is in effect.
  • Shipowners shall indemnify the 1992 Fund in respect of the Fund's liability for the difference between the shipowner's limit of liability under CLC 92 and SDR 20 million.
  • The Clubs reserve the right to withdraw the scheme if and when any material change to the provisions regarding tankers' liability is made.

4.Additional provisions for the Memorandum of Understanding (MoU) between the IG Clubs and the 1992 Fund
A copy of the MoU amendment is attached as Annex 2. This agreement (currently awaiting the approval of the 1992 Fund Assembly) takes the form of additional provisions to be inserted into the MoU which has been in existence between the 1992 Fund and the IG Clubs for many years. Under these new provisions, the Clubs undertake to provide cover against the liabilities, incurred by their Members, to indemnify the 1992 Fund in accordance with STOPIA and to give the 1992 Fund the right of Direct Action against the insuring Club in respect of those liabilities. The Clubs also undertake to provide for automatic entry of relevant vessels in STOPIA as a condition of pollution cover and to advise the Fund of the names of all such vessels.
5.STOPIA participation and Club coverage
Ocean-going vessels (Mutual Members)
With effect from 3 March 2005, the STOPIA Special Clause of our Club will have the effect of entering in the STOPIA scheme fully mutual members who are owners of tankers of 29, 548GT or less, and which may carry persistent oil in bulk as cargo. A Member's liability to indemnify the 1992 Fund under STOPIA will be insured by our Club in accordance with our Rules and any terms as set out in the Certificate of Entry. 

Japanese coastal vessels (Naiko Class Members)
As suggested in our previous circular No.04-012, it has been decided that Japanese coastal tankers in our Club's Naiko Class, which are not reinsured through the IG Pooling arrangements, are not the "Relevant Ships" as defined by STOPIA, but may be deemed to be a Relevant Ship by written agreement with the Member. Although Naiko Class Members are not required to be automatically entered in STOPIA, we earnestly hope that as many Naiko Class Members as possible will support the intent and purpose of the scheme and participate in STOPIA.

6.Recommended STOPIA Charterparty Clause
It is likely that charterers will require relevant tanker owners to warrant their participation in STOPIA under the terms of chartererparties. A recommended clause for inserting into charterparties is attached as Annex 3.

Text of STOPIA Agreement
 Additional Provisions for the MoU between the Clubs and the 1992 Fund
 Recommended STOPIA Charterparty Clause
 The graph showing between the relationship of the amount of compensation available under CLC92 / FC92 / Supplementary Fund / STOPIA and ship's tonnage