C,oVERNMENTAL MARITIME JLTATIVE ORGANIZATION

CONFERENCE ON TBJ!l llETABLlSHMENT

IMCO

OF All IlflIERNATIONAL C~ION FUm) FOR OIL POLLUl'ION DAMAGE. 1971

Comm! ttee ot the Whole

LEG/CONF.2/C.l/SR.14 13 April 1973 Original. ENGLISH

StlMML\RY RECOlID OF 'l'RE FOORrEENTB MEm'ING

Chairman.

held at the Palaia dea CongrGa, Brussels, on Wednea~, 8 December 1971, at ,.00 p.e.

Ii Mr. W. MOLLER (Switzerland)

Executive Seoretaryl Mr. T.A. MENSAII (000)

A list ot pe.rtiopanta is g.bFen in LEG/CONF.2/INF.1/Rev.1

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LJOO./OONF.2/0.l/SR.14

l!9a. 4sanAA i teo. & - Consideration of dmf't artioles and ,

:related proposals on the establ1ahoent of an internat1..onal ooopensaUon fund for oil pollution dacaee (oontinued)

'-' - ., -LEG/CONF.2/C.l/SR.14

AGENDA ITEM 4 - CONSIDERATION OF D~ .tJ1rICLllE AND RELATllID PROP03!l.LS ON TJlE Fl3TABLISllMl'lNT OF llN DlTERN'!l.TIONLL COMPENSm'ION FUND FOR OIL POLLt71'ION DAMt..GE (Lm/CONF.2/' and AM.l, LEG/COO'. 2/C .1;\oJP .1-37) (oontinued)

~1~le 10 (oontinued)

Mr. ISSA (Egypt), uplo.in1ng his delegation's vote on !l.rtiole 10, said

that it ho.d abstained beoaUSf.t it felt SClOe oonoern o.bout the embigui ty of the

tam "te:min1l.l. installations" in sub-po.ro.graph 1(80). In Sotle ports oil was

disoharsed, pumped throush pipelines and, later, loaded into other tankers whioh

sailed to their final destinations. In his Qountry, some 011 was disoharged

in the Port of Suez, piped to Alexa:nc1ria,' 8Zl4 t.llen transferred to tankers to

be transported by sea to ports in Europe. His delegation wondered whether

such oil orossing Egyptian terri tory would be oonsidered to be" oontribut.1.ng

oil under the terms of the Convention and whether oontributions would be levied

upon ita seoond time when it was received in the European ports.

Hia delegation oonsidered that suoh oil should be exempt from oontributionl'.l

and would like to Bee the inolusion, after paragraph 1 of Artiole 10, of a

provision to that effect. As it was a matter of vital importanoe to his

o~untxy, he would, meonwhile, like to ho.ve an indioative vote on the prinoiple

of the exemption of suoh 011 f:ror.l oontributions.

The CRA.I.RMAN said that, tmfortunatel.y, be oould not put that propoaal to

the vote 0.8 no amendment to that effeot had been submitted in writing. The

vote on Artiole 10 ho.d been oonoluded at the previous meeting.

l-Tr. ISSA (Egypt) atdd that he would raise the question o.gnin when the

artiole was xeooneidered at the Plenary Meeting.

Arlicle 11

The CHAIRMAN se..:ld it seemed to him that the French proposal to amend the

wording of paragraph 1 of Article 11 (LEG/CONF.2/, Add.l, page ,0) \me, in

re.cli ty , 0. sub-ooendrlent to the Un! ted Kingdom proposal 111 LEG/CON]'. 2/0 .1/l.-1P • 36, as it oritioized thl"!' SDme terms. He, the1'61'ore, proposed that the Committee

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LEG/CONF.2/C.l/SR.14

should first oonsider the more re.dioal Un! ted K:l.na4om proposcU to repls.oe

p~phs 1 and 2 by n single pa.ro.gmpb and then, acoording to the result of

the voting upon it, prooeed to a oonsideration ot the Frenoh amendment.

It Was po decided_

Mr. McNEILL (me) said that, aooording to dro.f't Artiole 11, the sum needed

nt the Fund's inception would be 75· Dillion franos. On the basls of the omount

of oil oarriea in the 1mmed1atel~ previous years, it oould be estimated thAt for

the year 1973-74, when it was hoped the Convention would oome into toroe, the

amount would be a.bout 1,600 cil1ion ton(~. If initinl oontributions were

caloula.ted. on the basis 01' 0.05 frano for enoh ton of oont1i.but!ng oil,

npprox1l!!ately the same 8'l.1m c t 75 million tranos would be reached. ,In his

delegation's view, toot would be a s1t:1pler ws;y of arr1~ at the some result

os provided tar in the droit text. With the eliD1nation of paragraph 2, toot

aicpler provision would obviate the need for the Assanbly to detexmine the

in! tiol oontributions by n fixed dote and would simplify the entry into toroe

prooedure for 0. Stll.te, as referred to in the Note to LEG/CONF.2/C.l,t\lP.36 (page 2).

Mr. NORDENSON, Ro.pporteur, said that the differenoes between the dratt

t.ert end the United IrJ.ngdoo propostll were slight. Acoording to the initial

draft, it would be for the Aesembl~ to deoide upon th~ sue per ton after the

entry into foroe of the Convention while, oooord1ng to the United Kingdoo

amendoent, the present Conferenoe would deoida onoe and tor all on the suo per

ton, whioh was to tom the basie 01' the in! tiol oontributions, on the bnsis at the aoount at oil IlOving in the world nt the present dey. If the matt; ,r were

lett to the llsDetlbly tit would base its deoision on the tlovement of oontrlbvt1ng

oil in the year preoeding that of the entry into force at the Convention. As

it was not known when the Convention would enter into foroe, oiroUl:lStanoes

cisht bY' then ho.ve olu:l.nBed and the suo the ASSGI:lbly arrived nt, oa.loulo.ted o.s

provided tor in parag;ra.ph 2, o.1sht not be the SQQe os one deoided nt the present

tine. Thus, more ne:x1bili~ wns provided by the text o.s it stood.

Mr. HIBSCH (Franoe) so.id he felt it would be Prer.:lll.ture to quote ll. figure

nt this sttl.ge.

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LEG/CONF.2/0.l/SR.14

Mr. McNEILL (UK) said that the figure in his delegation f s proposed m:lGncklen.t

bad been oalculated on the basis ot seaborne 01l,est1oated for 1973. The

differenoe tor the p1"9VioUB or aubsGquenb yeers would be seall and would only

affect the tigure of 75 Dillion by 1 million either way. Moreover, the figure

ot 75 o1llion was only an est1cate.

Mr. P.ElRlUlXIS (Greece), supported by Ur.. FORD (USA), scid. he tavoured. the

United Kifl8doo maendment, but felt that there should. be a paragra.ph 2 enabling

the Asseobly to :review the tigure in case the total aohieved was found tc be­

either inadequate or excesaive. He was, therefore, prepared to vote for the

United Kingdom 8l!lendx::umt, with the reservntion that there should be a

paragraph 2 on those lines.

~e C:a:AIRMAN said he oonsidered. that that was a substantial point and should

be put forward os n fomal proposlll.

Mr. PHILIP (Denr:w.rk) pointed out that delegatee had only just reoeived the

United Kin8doo ooendmcnt. He thouabt thnt the Greek delego.tion should be given

tiDe to submit ito proposlll. Perhnps there oould be 0. ,.ote on the prinoiple

ot the possibility of the sum being revised by the ~aaecbly.

The CB't .. IRMi\N a.sked the United Kingdom representative whether, if his

delego.tion r 0 amendment wo.s o.ooepted, he would o.g.ree to a. sub-&lCmdment on the

lines proposed by the Greek representative.

liZ'. EERRY (UK) sa.id tho.t, as ta.r os he oould see at the IJOoent, the Greek

proposlll would sioply oea.n an inoreose of tho tigure ot 75 o1llion in dmf't

paragraph 2. His delesat10n hod not envisaged the esta.bliShment of 0. large

sun os the in! tinl oop! tlll of the Fund. However, it had. no strong feelin8s

ago.1nst the Greek proposlll, but would 11ke title to think it over.

Mr. HIBSCH (Franoe) sa.id thn.t the ooments raised by the Greek repreeentntive

ind10nted that the :point was a delioote one and reinforced his oonviotion th.lt

it would be prefGrable not to fix a figure a.t the present Conference. Hie

delego.t1on would, therefore, vote ngnirst the United Kingdoo lIClendJ:::lent a.nd

possible Greek sub-a.mendJ:lent.

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LEG/CONF.2/C.1/SR.14

The OH.llIRMl1N invited the Cooci ttoe to vote on the United Kingd01'!l proposed

omendtlent in LOO/CONF. 2/C .1,/wP. ~6.

1'he United Kingdom ,OJ.:lendI:lent \ros. x:ejeoted by; 11 vot.s to 9. witp

14 Abstentions.

Mr. HIRSCH (Fmnoe) soid tho.t the point of his Governoent' s proposal in

LEG/OONF.2/3/Add.1, p. 30, was to l'Ullte olear the distribution of responsibilities

QS between the State and the ootual oontributors in the system.

Mr. GOB (SilljUpore) said that, o.ooording to dmft lirtiole 10, oontributions

to the Fund were to be po.1d by those receiving oil, but Artiole 11 suggested

that States would be tItlld.l18 the oontributions. He tlSked for olarifioation as

to whether it was 'Proposed toot Sto.tes should po.y and then oolleot the money

from oil-reoeivina' oocpanies or whether the Fund would oollect oontributions

direotly from those receiving oil.

~1r. nORDENSON, Ro.pporteur, so.1d that, aooording to the dro.ft before the

COIlClittee, all oontributions wou"!"d be po.id by those persons reoeiving oil o.nd

there would be no obli8Q.tion on the Sto.te. One o.rtio1e, however, (l.rtiole 14)

rrovided toot a State oould i tsolf voluntarily D.SS1J1l6 the obligations inposed

upon those persons. After further oonsidemtion, he WtlS of the opinion that

the Frenoh amendment WtlS nerely a l:1tltter of drafting and tronsltl.tion, whioh

oould be left to the Drafting CODDi ttee.

The CHt..IRMlI.N naked the :F:oonoh represOl1ttl.tive whether he o.greed.

Mr. HIRSCH (Franoe) onswe%'f9d in the o.££1mative, tl.dd.1ng tho.t he oti11

oonsidered toot. the French version W8B olearer.

It WS dgoided to lotl.ve the wording of po.ro.mph 1 to the D;!:.'!fMM CoI!llIl.1. tteo.

l-1r. ISSA (Egypt) so.1d tho.t J\.rtio1e 11, paroeraPh 1, referred to oontributions

being btl.sed for each person on "eooh ton of oontributing oil received by hiI:l". As in oonnmon with .li.rtiole 10, he a.go.1n wondered how the oontributions would

be oaloulated in the onse of a State receiving oil ond then exporting it to

another Sto.te.

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LEG/CONF.2/C.l/SR.14

Mr. NORDENSON, Rapporteur, said that, when the draft text he.d. been prepared,

it had been assumed that there would alwqa be fao11i ties available to asoertain

and reoord the quantit1 of oil reoeived. irrespeotive of Whether it was to be

re-exported or not.

Mr. ISSA (Egypt) said that, a8 far as he could see, there would, then, be

a duplioation of oontributions, with two states p~ for the same oil.

The CHAIRMAN oalled for a vote on Artiole 11 as a whole, with the proviso

that the question whether the word in square braokets in paragraph 2 should be

"two" or "three", should be deoided upon in oonnexion with the Final Clauses.

"~th t,AAt proviso, Artiole 11 wa!!! approved by 33 vote! to Aone,

with 3 abstentions.

kUola 12

The CHAlliMIIN (b:aw a.ttenUon 1;0 the fact that oertain wU~'dl:J and figures

VIa:!." enolosed in square hraokets and to the proposed amendments to the artiole.

The alternAtive text referred to in footnote 13 was sponsored by the FrenOh

delegatio! A proposal by the Federnl Republio of Germany was set out in

LEG/CONF.2/3, page 65, while the Itnlion delegation sponsored the proposoJ. for

the additional paragraphs figuring in footnote 14. The first question to be

deoided was whether the Conferenoe should work on the basis of the first draft

text or of the Fronoh alternative in footnote 13.

Mr. HIBSCH (France) said that the alternative text oontained 0. precise

method of acCiountonoy to whioh his delegation was bound. In fact the

contributions oalled for would result from docestio 1egiolation, whioh would

itself be bound by international legislation. As the oontributions were,

therel'ore, of a publio nature, oontrol must be as effeotive as possible. In

his delegation's view, it was essentiel to be Q.ble, o.t the beginning and end

of ea.oh year, to a.ooouut e:xnotly for wery penny of the Fund. There should be

on cunuol reviow. ~he olternative text would also fit in more easily with the

jt'l:tmoh system of law. It provided l'or the possibility of adapting appropriately

the resources and obligntions ot the Fund in the least oostly manner possibie.

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LEG/CONF.2/C.1/SR.14

The Frenoh delega.t!on did not olaim tho.t the alterno.tive text would solve

every' problEllI1 or tho.t the first version wo.s c. bc.d one. But, in view of the

resp0nElibil1 ties vis-o...vis /lUthori ties and ptlrlioments, the BystEllI1 1 t ws

proposing, whioh wo.s well mown and tmd.1.tionel, was the one with t.he grea.test

ohance of raising the least number of objeotions in most oountries.

The ClIAIRMAN osked the Comm1 ttee whether it would prefer to oonsider ~

Artiole 12 on the basis of the French tllterno.tive tart (LEG/CONF.2/3/Add.l, p.37)

or of the original text.

Mr. VONAU (Polond) soid that his delego.tion S1Jtpported the Frenoh text for

the Artiole.

Mr. BRIGSTOCKE (Ult) sc.id his delegc.tion would prefer the origincl. text.

Its provisions were designed to simplify the adJ::dru.strc.tj on of the Fund by

eliminating the need to alloonta payments in the Ol~e of acoll 01£1.100 to the

year in whioh the relevont inoident ooourred. The Fr.enoh n1 temD.tivo would

remove that advontaga o.nd would oo.use odd! tiont'll. cUffioul ty and expense in

o.dnin1stration.

Mr. POUI.SSON (Norw~) endorsed the United Kingdon stond for the SOLle rec.sons.

rfr. MAKOVSKY (USSR) o.skoa whether, under the :h'enoh lllterna-tive text, the

cotltributions of a State would be used only for pD;yment of oompenso.tion in the

oose of inoiden'ts ooourring subsequent to its o.dhs:sion to the oonvention.

Mr. HIRSCH (Fronoe), in anawer, said that in M.s opinion the provision

referred to by the United Kingdon woo 11kely in ti;::le to give rise to even Dore

rroblems tlum would the aystOtl advooc.ted by Frt:ll109. Seoondly, the Frenoh. systeo

would present no Otlbsxro.sscent ~~n so far o.s the settleoent of olcdme was oonoerned,

irrespeotive of when the relevont inoident ooourred. The budget would be

established o.nnually but there would be opportunity throughout the year for

revising olloostioLs in the lisbt of the resources avnilable.

It WAS deoided b:x; 17 vot@s to 5. with 18 abstentions, to bOose

£gnsidero.tion of A;1191e 12 on tbe 2riginol text AP oontained in

~\1fkfmt LEGlcONF.213.

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LEG/CONF.2/C.l/SR.14

In response to 0. request by UrI MllICOVSKY (USSR) t Mr. NORDENSON, Rnpporteur,

explained tho.t Artiole 12 dealt exolusively with the question of annual

oontributions to tho Fund, namoly, oontributions designed firstly to supplecent,

if so required, the wo~ oo.pitol oonstituted by the 1n1tiol oontributions,

seoondly, to oover ndministro.tive expenses for the relQVQllt year, and. thirdly,

to DQet cbligo.tions ariSing during the year in respeot to indemnifioo.tion of

owners or insurers or ooopenso.tion of ~lotiIls. The bo.sio prinoiple \U1.derlying

the provisions we toot no party rooei ving oil in the terri tory of (L Contmoting

Sta.te should be lio.ble to con'tribute towards olo.iI:ls o.r:Lsing out of an inoident

thAt ooourred prior. to the oountry wha~ethe oil wns reoeived beooming 0. party

to the Convention. Since 0. Sto.te eight o.dhere to the Convention in the interin

between an hoident and tho oa.ll on the Jrund to disburse indemnifioation or

oompensation in respeot thereof, the quostion hod a.risen as to the liabi l.i ty of

Dn oil reoeiver in suoh a. Sta.te. In that regard, it hod been oonsidered

a.ppropria.te, in order to facilitate o.doinistrotion of the Fund, to differentio.te

between oo.jor ,o.nd minor inoident.s os the source of olaims. In the oo.se of 0.

minor inoident involving aoounts below 0. level to be Q8T6ed upon, oontributions

"ould be po.yo.ble by o.ll oil .reoeivers liable to oontribute to the Fund in the

yeo:r in question, even though their oountries ot origin mght not hnve been

parties to the oonvention ot the tioe of its ooourrenoe. On tho other hand, in

the oose of a. mjor inoident enta.!ling obligations on the Fund o.bove thnt level,

oontributions would be oo.de only by those reoeivers whose oountries were parties

to the oonvention o.t the time of the incident. The borderline to be drown

between the two oo.tegoriee of lnoident wa.s of course on a.rbit:rory one, but the

j}1CO Legal. Cor:.;.ni ttee and Working Group hod OODe to the oonolusion tho.t

15 million franoe would be a fo.ir otlO\U1.t to be specified for the purpose.

r1r. HhlCOV};lCY (USSR), toonldllg the Ro.pporteur, enid he wo.s so.tisfied with

the explanation given.

Po.ragra.ph 1

Mr. BRIGSTOCKE (UK) naked for the ~pporteurrs oO!lT.lents on the follOlnng

two pointe. The prinoiple that the State should not be lio.ble for dacoges in

- 10 -

respeot to on inoident ooourring prior to 1 to beooD!ng porty to the oonvention

was not stated explioitly anywhere in the droit oonvention. Perhaps that gnp

oould be filled under the trOllDitionol provisions. Seoondly, he wonde:red who.t

the posi tlon would be under Artiole 12 in the oo"'J(;l of 0. spillage oausing c1oI::l.oges

in on aoount between 14 million ond 16 mllion frenos spread over two yeo.ra. In

the firs+ yenr liability for oontributions to neet suoh damoge would be o.asessed

under the Dinor inoident prooedure o.nd for the seoond yeor under the oojor

inoident prooedure. The text before the Coocittee did not oover suoh 0. oo.se.

Mr. NORDENSON, Ro.pporteur, agreed that the prinoiple in question ""lS not

explicitly stated; howeve~t', it eoerged indireotly frOIl the tart of

.artioles 10, 11 and 12. l't would be for the Conferenoe to deoide whether o.ny

explioit stateoent should "be included.

r1r. HALDER (0000'), speaking at the invitation of the Chairtlllll, said thnt

his organization oonsidered 15 o1llion franos to be 0. logioal and reasonable

o.nount at whioh to drAW the line between Dinor and I:Ill.jor incidents. The Batle

figure had been used for the purpose of presenting 1nto~DOtion to the Conference

end the table oonto.ined on PllgaS 22 end 23 of doouoent LEG/CONF. 2/INF. 3 shOlofOO

the effeot of suoh prov~.sion in respect to various types of clllin.

It was deciged that the sgUll.re braokets enoloelnR the figure of

15 Dillion franos in Bub-parographs l(i)(b) ond (0) should be reooved.

Mr. HIRSCH (Franoe) explained that his delego.t!on's o.bssnce of objeotion

wo.o not to be taken as indicnting o.pprovol of that deoision •

. 'Pg.rp.gra.ph 2

The CH1\.l1lNAN 1nvi ted OOIJrlents on the question of the do.te to be inserted

in the third line of po.ro.grnph 2.

Mr. NORDENSON, Rapporteur, enid that the point to be deoided wo.e the

length of tiDe ns frOD 1 JOllWlr,Y' of each yeo.r tho.t would be oonaido:red approprio.te

to enable the Fund Adoinistration to Ascertain the quantity of oil Doved in the

preoeding yeor. He had no suggestion to onke in the cotter.

-11-

Mr. WJlLDER (OCll1F), spellldng nt the invi to.tion of the Chllimo.n, ao.id thnt

'Wlder the 011 indWftry'S vol'Wltnry sohwe the dnte for that purpoae waa set o.B

1 April, i.e. three oonths after the end of the finanoial year.

Mr. KERRY (UK) suggested that the phmse in square bra.okets reeding

"not later tharl. (date) of the relevant ;rear" should be deleted. entirely. ~ being

too rigid 0. fomula. In praotioe, the non-o.rrivo.l of intomo.tion by any do.te

fixed would n.eoesso.rily Doan defement of o.ot!oJ') until it oould be obtaJ.ned.

Mr. PERruucIS (G.r:eeoe) supported that proposo.l. If 0. do.te lmd to be inserted,

he would prefer 1 July rather thlln 1 April, ns the requireoent in oost oountries,

inoluding his own, wns that ooopany o.ooO".mts for the preoeding f1ntmOiol yeo.r

should be o.ut1.!ted not lnter tho.n 30 June.

The Uni t~~d Kingdon Proposol WEI o.pproved.

Mr. iU1OROSO (Ito.1y) thoU(5ht there wos need for 1noluding sone indioo.tion

to the effeot thnt the reoeipt of infoma.tion in good tiDe wns vitoJ for the

effeotive working of the Fund •

.t.1X'9«Ji'P:Pbs 4 and 5

l1r. li'.F!.lIm'.A (Federal Republio of Ge:a:1llJ:'1Y'), introducing the proposo.l subnitted

bY' bis Governc.ent to have po.rng.rnphs 4 ond 5 replo.oed by a new porogz'Ooph 4.

explaJ.ned the reasons underlying thnt proposal o.B set out in

doouoent LEG/CooF. 2/3. pages 65-67. 'l'he three eletlent.s in the proposal were

linked together nnd the whole was designed to c.e.ke the syoteo for the p~ent

of oontributions less oonplioo.ted.

Mr. I<ENNEDY (Co.no.d.a) supported the proposed ao.endr:l.ent, e.s being oonoise

and to the point in placing responsibility fo~ the oolleotion of oontributions

on the Direotor, "-' '. . arson usuo.!ly responsible in toot catter, and also

el!n1na.ting the use ... tlSS prooedure of proo!ssory notes or bonds. In the event

of the Gernc.n proposal being rejeoted, hie delego.t1on intended to subo! t nn

ooendoent to po.ro.gro.ph 4 on the lo.st point.

The CR!i.1.:HMAN noted that the French delGgt1.tion oleo intended to su.boit an

aoendoent t( the Artic.le.

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LEG/CONF.2/C.l/Sn.14

z.h'. BERRY (UK) said his delegnt10n preferred the orig.i.n£U. text of the two

pa.:rogra.phs. There would appoor to be no need for lirlitin8 the Assetlbly's

disoretion in the ootter of POV'tlent of oontributions. The exercise of such

disoretion would not affeot the rea.dy o.vn1la.bili ty of funds for the ooopensa.tion

of viotims sinoe, in any oa.se of tamporory shorto.ge, it would a.lways be- open

to the Fund to borrow IlOnq.

JlTT. PERRAKIS (Greeoe) said he shared tha.t view. The Direotor should not

be put in the position of having to refuse a. request for defercent of p~ent

of oontributions.

Mr. OOTID (US/l) also supported the Un! ted Kil'l8doo sta.nd.

llfr. FRANTA (Federol Republio of Ge:t'tlllllY) said he would withdraw his

Governcent's propoao1.

The CHAllID~ invited coccents on the question of the nucber of ~ left

for insertion in pnro.e;:rllph 4.

Mr. NORDENSON, Rapporteur, expla.!ned that the underlying idea. was to

provide a oleor rule as to the aoount of tiDe to be avo..11able to oontributors

for pn;yment of oontributions a.tter notifioation. However, if the rule oonoerning.

itIoediate po.;yoent of a portion of the o.nnuol oontribution la.1d down by the

first sentenoe of pa.mgrnph 4 was aooepta.ble, 1 t mght be eqUll.l.ly o.ooepto.ble to

delete the provision for tl specifio period in oonnex1on ,'11th pO\YDent of the

remoJ.:n1ng portion.

Mr. PERRtJaS (Greeoe) thought thtlt the word "iJ::JI::IeditJ.tely" wos too o.bsolute.

lIo would prefer 0. phn\se such a.a tltlS soon os fea.sible".

~~. PHILIP (Dencurk) did not see any objeotion to deterc1n1ng 0 fixed tiDe

licit for the poycent of 0. oontribution; it should be pOBoible for the Fund

to give severol weeks' o.dvonoe notioe of when po.yI:lQnt would be required,

l1r. ESCORIAZA (Spo.in) suggested that the phra.se "wi thin C.;; do.ys" should

be deleted, sinoe it wo.e to be ossuced tha.t 011 Sto.tes would poy their

oontributions o.s soon 0.0 possible.

.. 13 -

Mr. lllHI'J.1E (L1beria) soid rlOst uebers of the COtJDittee se6llled ~ tho.t

the provision should not be oouched in tems that were too orbi t:mr;r. The

probleo was essentially one of drafting, and he woe sure that it ~ould be left

to the Drafting Com! ttee . to find 0. s:ltis.f'o.otor;y wordinB.

Mr. KERRY (UK) pointed out thot the phrose "or in part" !n the lo.st sentence

of the pnragmph sefJOed to 1r:Iply tho.t the person Uable oould, if he ohose, po.y

only 0. soo.ll fraction of the oontribution. The phrase Disht give rise to

oisunderstand1ng and would best be deleted.

Mr. NORDENSON, Rnpporteur, silid tho.t the ideo. behind the wording hIld been

to indioo.te toot 0. promissory' note J!l1sbt be oo.l1ed up in sepa.rate parts, mther

thlln tlS tl whole. Transfers of ourretlOy were in o.ny oo.se subjeot to delO\)"Ei, and

the phrase "wi thin £. . .:J <"..aye" was intended to Dllke provision for such delO3B.

He suggested tho.t the solution c.!ght be to add at the end of the last sentenoe

the words "and without undue delay".

Mr. lCElNNEDY (Cn:no.da) thought tho.t there Wo.s no need to require that a

prooissory note should be issued to the Fund in respeot of unpo.id portions of

~nnuol oontributions. Onoe a Contrnoting Sto.te had received notifioation fron

the Direotor tha.t payrlent was due, it would be expected to pay wi thin a oertain

period of t1I!le. After tho.t period had ela.psed, the Director would be able to

issue a second notifioo.tion. To require 0. p:ra::tiSBOry note ws unneoessar;y o.nd

would overburden the o.dJ::liniatro.tion of the Fund.

The CHAIm1AN drew the Cotll!li tte9'* D attentlon to the Italian proposal

oontained in footnote 14.

Mr. l.MOROSO (Italy) soid that the probleo of guo.ra."'ltees had been disoussed

at length in the Legal Cocc.ittee of 000. SOrle had held that gua.rontees were

unneoesso.ry and would entoil additional expenditure for the oil ooopa.niesl others,

noto.bly the Frenoh delegation, held that they were essential. His ow delegtl.tion,

whilo agreeing tho.t unneoessary expenditure should be a.voided, wished the

Convention to include provision for gunrantees, subject to possible execption by

the 1I.sseobly. He was ooooerned that those who had honoured their obligo.tions

- 14 -

LEG/CONF.2/C.1/SR.14

in respect of oontdbutions should not have to be penolized beoo.use others hod

failed to meet those obligations. He hoped toot his proposal. would reoeive

support, but it 1 t did not he would not press it.

Mr. HIliSCH (Fro.noe) soid his delegntion oonsidered the question of gunra,ntees

Q very !D.portMt one. It should not be neoesSQry', in order to oooply with the

provisions of the Convention to inoreo.se some I:l9Clbers t oontributions beoQuse

other mecbers had defQulted. Sinoe ~le Fund bore Q publio responsibility it

should be strinsent in the oondi tions whioh it iI:Iposed on its meobers, thQt WO.8

a. servioe to be rendered to the oil industry Qnd to oil oonsuoers, whioh together

had to bBQ.1' the inoreased burden 1oposed by the 1969 Convention.

It had been objeoted that 0. system ot sunrantees would be too oostly, but

he wc.s oonvinoed that it would be possible to find on eoonomool fomW.n.. It

ho.d also been argued thQt to require sua.rantees would oo.st unneoessnry o.spersions

on the solvenoy of the oil oocpanies and on their desire to honour their

undertcld.ngs; however, every profession ho.d its weaker oeobers, ond the

possibility had to be faoed that n case of default D1gbt arise.

lIi th regard to the Italian proposal that oertain oontributors D.ight be

execpted frac the obliga~ion to provide a guarantee, it had been objected that

it \fould be very diffioult to deoide whioh oontributors to exeopt. lIowever,

precedents alrea.dy existed in the il:1portant field of oredit insuronce, and theoe

indioated that the difticul ty was not as greo.~ o.s eight be supposed. He Eruggested

thnt in view of the grant 1mportnnoe of the question the CotlDi ttee should

postpone n deoision on it until the following ~.

Mr. WHITE (Liberia) did not think: the Fund Convention should includo a.:ny

mandntory requirement for guarnnteee. In the unlikely event of n oontributor

fol.ling behind in his po.ytlents the Direotor of the Fund would olwo.ys be nble to

require n gua:r.o.l'l:tee. In reply to a question froo the French representa.tive, he

said that the Liberian nnd Conadia.n delecntions were oonsidering suboitting 0.

proposal to delete the lo.st sentenoe of paro.grnph 4.

Mr. BRIGSTOCKE (UK) thought the existing text should be retained. A systeo

of gunranteee would Dean oonsiderable oosts for oontributors. not only beoo.use

- 15 -

LOO/CONF. 2/0 .1/SR.l4

of the prooess ot obta1n1ng the guarontees, but because 0. lio.blli ty of that

nature would have to be inoluded in 0. ooopanyis o.ooounto, thus affeoting ita

liquidity. The work of checking the guorontees would be on unjustifio.ble

burden on the Fund, and 1 t would not be right to expeot the Assembly to

disorimino.te between oontributors by exempting sooe and not others frae the

gunrontee requirement.

His oppoa! tion to the oonoept of gut.l.1"Ontees relo.ted only, however, to

£.rtiole 12, he oight hold 0. different view in regord to Artiole 13, whioh dGo.! t

with the subjeot of a.rreo.rs.

Mr. POULSSON (Norwtl\Y) shored the United Kingdom objections to the lto.!ian

proposo.!. He preferred the existing dro.f't.

Mr. MEDCRf.Pl' (0000') speoking o.t the invitation of the Cm1:rmo.n, sa.id he

too would prefer the text unohanged.

Mr. f.JlOROSO (Ito.!y) so.id that in view of the nrB'UIlents that had been

advonoed he would wi thdro.w his proposo.l.

The CHA~~ suggested that further oonsideration of Artiole 12 should be

deferred until the Frenoh and Ca%lll.d1an ot1endments had been oiroulo.ted.

l,t woo so o.g.reecl.

ftrtiole 15

Mr. :KERRY (UK) in answer to 0 question froD the Singapore representative,

said that the suggestion code by his delegation for 0. proviSion aimed to prevent

disolosure of oonfidential infoDCo.tion would be oore oppropriotely oontained in

0. sepnro.te artiole.

Mr. HIRSCH (France) pointed out that there wne 0. joint Frelloh/OSSR proposal

now before the Sub-CoI:md:ttee on Orgo.rdzation and .lldm1nietrntion which mght ho.ve

0. beo.ring on the artiole now Ultder considemtion. He trusted tho.t if 0. vote

were token on Article 15 that would not i1:lply toot no further proposo.ls relating

to thnt artiole oould be oonsidered.

-.16 -

LEG/CaNF.2/C.1/SR.14

The CHlJRMAN said toot tMt wns hie irlterpreto.tion of the poe! tion. He

oalled for a vote on Artiole 15.

Art:l,ole l~ If.M mmmest bl 36 vote! iY2: ,fovo\Uj. none

n.gpJ.nst. niP po abet2At !olW.

The meeUng rose at 6.00 p,m.