Compensation from shipowner’s insurance demanded

Compensation for damage caused by a massive oil spill from a wrecked Russian tanker should be paid out of the shipowner’s insurance and not by the government, Home Affairs Minister Katsuhiko Shirakawa said Feb. 4.

“It should be paid in principle out of the shipowner’s insurance,” Shirakawa said at a news conference, referring to calls from municipalities along the Sea of Japan for the government to compensate them for the damage. “They are counting on the Home Affairs Ministry, but they should in principle collect the bill from whoever is obliged to pay it,” he said.

Shirakawa held out the possibility, however, of his ministry doing something for the municipalities hit by the oil spill if they are unable to collect any compensation. “We’ll take measures if they can’t do it,” he said.

Although the total damage caused by the oil spill has yet to be determined, the Petroleum Association of Japan, an oil industry body, estimates it will reach at least the 23 billion yen maximum that can be paid under an international convention on oil pollution damage. The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damages requires signatory countries to make payments in proportion to the amount of oil they deal in. Because Japan deals in 25 percent of the member countries’ total amount, Japanese oil companies and importers are liable for some 6 billion yen in compensation for the oil disaster, according to the association.