publication . Preprint . 2005

Hedging Strategies and the Financing of the 1992 International Oil Pollution Compensation Fund.

André SCHMITT; Sandrine SPAETER;
Open Access
  • Published: 01 Jan 2005
Abstract
The maritime oil transport is regulated by the 1992 Civil Liability Convention for Oil Damage and the 1992 Oil Pollution Compensation Fund. In this compensation regime, contributions of oil firms are based on the aggregate risk of the Fund and are assessed each time an oil spill is registered. In this paper, we present the main characteristics of such a compensation regime and we explain why oil firms would benefit from a reorga- nization of the financing of the Fund by introducing appropriate hedging mechanisms. As standard insurance is shown to be too limited for the coverage of oil spills, we high- light the arguments that justify the introduction of financia...
Subjects
free text keywords: Oil spill, IOPC Fund, risk management, insurance, financial hedging., jel:D80, jel:G22, jel:K32, jel:Q25

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