Photo: Jouko Pirttijärvi
The Finnish Oil Pollution Compensation Fund is managed by the Ministry of the Environment. It is used to reimburse the costs of oil spills and oil spill response on land and at sea, when the cause of the incident is unknown or the culpable party is unable to pay the compensation in question. The fund may also be used to reimburse for the costs of remedying oil-contaminated land.
The Finnish Oil Pollution Compensation Fund is a secondary source of compensation for oil damage and the costs of responding to such damage. The compensation granted from the fund must be repaid by the party that caused the oil spill, or by another responsible party.
Compensation for regions, municipalities and the state, paid by the Finnish Oil Pollution Compensation Fund
Regional rescue services are entitled to compensation from the fund for expenses due to the acquisition of oil response equipment, to the maintenance of oil spill prevention response preparedness and to training. The Finnish Oil Pollution Compensation Fund usually reimburses 50 to 90 per cent of the acquisition costs of oil spill response boats. Regional rescue services and municipalities may also be granted discretionary compensation, for example for costs associated with the acquisition of storage premises for their oil spill response equipment.
The state may be granted discretionary compensation for costs incurred by the acquisition of equipment in responding to oil accidents caused by vessels, and for the costs of maintaining response preparedness.
Compensation decisions are made by the board of management of the Finnish Oil Pollution Compensation Fund
The board of the Finnish Oil Pollution Compensation Fund makes decisions concerning compensation paid from the fund. The board is appointed by the Government for a three-year period. The board includes a representative of the Ministry of the Interior, the Ministry of Finance, the Ministry of the Environment, from a nature and environmental conservation organisation, the oil sector and the Association of Finnish Local and Regional Authorities. The chair of the board is impartial and does not represent any interested parties in connection with oil accidents.
Income and expenditure of the Finnish Oil Pollution Compensation Fund
The Finnish Oil Pollution Compensation Fund is not included in the state budget. Its operations are funded through the accumulated oil protection fees and transfers from the state budget.
The oil protection fee is collected for oil which is either imported or transferred through Finland. If oil is transported by a vessel whose cargo section is not completely double-hulled, a double oil protection fee is collected.
Under the state budget, part of the accumulated oil waste duty may be transferred to the Finnish Oil Pollution Compensation Fund, to be used in offsetting costs caused by the remediation of old oil-polluted land areas. An average of 2–3 million euros have been transferred to the fund each year.
Use of the Finnish Oil Pollution Compensation Fund
The Finnish Oil Pollution Compensation Fund grants some 8 million euros in compensation each year. This figure roughly corresponds to the annual accumulation of the oil protection fee and oil waste duty transferred from the state budget. A fixed-term increase in the oil waste duty entered into force at the beginning of 2010. As a result, the fund’s income and the compensation paid on its basis also increased.
International Oil Pollution Compensation Fund
Compensation for oil spills caused by oil tankers in Finnish territorial waters is granted by the International Oil Pollution Compensation Fund (1992) and its Supplementary Fund in cases where compensation cannot be recovered from the party responsible for the oil spill, or where the damage surpasses the liability limit of the vessel owner.
Merja Huhtala, Legal Adviser, tel. +358 295 250 088, email@example.com