Acceptance of the international compensation regime for tanker oil pollution – And its implications for China Bingying Dong a , Ling Zhu b , Kevin Li c , Meifeng Luo b,n a IMC-Frank Tsao Maritime Library and R&D Center, The Hong Kong Polytechnic University, Hong Kong b Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hong Kong c Department of International Logistics, Chung-Ang University, South Korea article info Article history: Received 5 November 2014 Received in revised form 28 July 2015 Accepted 2 August 2015 Available online 25 August 2015 Keywords: International compensation regime Tanker oil pollution Fuzzy-set Qualitative Comparative Analysis Ordered Probit China’s approach abstract The international compensation regime for tanker oil pollution has been successful in providing ade- quate and prompt compensation to pollution victims in its member states. Nevertheless, the attitudes of different countries toward acceptance of this regime have varied considerably. This paper aims to explain three main factors in the acceptance of the regime, including: (1) The level of economic development; (2) the risk of exposure to tanker oil spills; and (3) the financial burden associated with adherence to the International Oil Pollution Compensation Fund (IOPC). Using both fuzzy-set Qualitative Comparative Analysis and an Ordered Probit model, this study found two patterns causing upper-middle and high income countries to have a high acceptance level: (a) Those facing a medium risk of oil spills and having a low financial burden; and (b) those facing a high risk of oil spills. The study reveals that, for a country with a high risk of exposure to tanker oil spills, such as China, with its improvement in economic status it is far better for it to join the IOPC Fund, so as to provide better protection both for potential pollution victims and for the marine environment. The results of this study can also be applied to other countries that are considering whether or not to accept the international compensation regime for tanker oil pollution. & 2015 Elsevier Ltd. All rights reserved. 1. Introduction Currently, the international compensation regime for tanker oil pollution damage follows a three-tier structure based on a series of international conventions and their amendments (see Table 1). In the first tier, strict liability is imposed on the owner of a tanker causing oil pollution. This liability, guaranteed by the shipowner’s liability insurer, is limited according to ship tonnage. Any pollution damages over such a limit is protected in the second tier by the International Oil Pollution Compensation Fund (IOPC), which is financed by levies imposed on oil receivers according to the 1992 Fund Convention. Currently, the maximum level of second tier compensation is 203 million Special Drawing Rights (SDR). 1 Be- yond such limit, it is possible for the third tier of protection to be drawn from the 2003 Supplementary Fund Convention, which expands the upper limit of compensation by up to 750 million SDR. This three-tier compensation regime that shares the financial burden between shipowners and oil receivers has been deemed successful in protecting pollution victims [1]. Its success can be seen in its worldwide ratification. So far, 114 countries have rati- fied the 1992 Fund Convention. Among them, 30 have also acceded to the 2003 Supplementary Fund Convention. However, not all countries are exhibiting the same attitude towards its acceptance. The geographical location of the five groups of countries classified by the ratification of these conventions is shown in Fig. 1. From this it is clear that there are still a large number of countries that have very low acceptance levels (i.e., a group numbering less than 3). For certain countries, such as the USA, the low participation rate is due to a high limit under their national compensation re- gime. Also, many coastal states that have a high risk of tanker oil spill incidents and low national compensation limits do not have a high acceptance level (i.e., they have not acceded to the conven- tions in tiers 2 and 3). Therefore, if a major oil pollution incident does occur, there is a danger that pollution victims in these countries will not be able to obtain sufficient compensation. Faced with such a high degree of variation in the acceptance level of the compensation regime, it is instructive to investigate the major factors that promote a high acceptance level. Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/marpol Marine Policy http://dx.doi.org/10.1016/j.marpol.2015.08.001 0308-597X/& 2015 Elsevier Ltd. All rights reserved. n Corresponding author. E-mail address: Meifeng.Luo@polyu.edu.hk (M. Luo). 1 1 SDR ¼US$ 1.529 as at 12 August 2014, according to the website of the In- ternational Monetary Fund. Marine Policy 61 (2015) 179–186