Challenges and Opportunities 2009-2010

The fiscal year ending March 31, 2010, has proved to be a busy one. The core business of the SOPF, namely, the assessment and payment of claims submitted to it for pollution damage arising out of oil spills caused by ships, has proceeded at a steady pace. It remains the policy of the Fund that such claims should be dealt with on a timely basis. The aim is to facilitate the payment of claims so as to minimize the financial hardships of those who have suffered the consequences of such spills. The Administrator is also cognizant of the fact that the underlying principle of the governing legislation, the Marine Liability Act (MLA), is that the polluter should pay such compensation. Consequently, wherever possible, all reasonable measures must be taken to recover amounts paid out of the SOPF from the shipowner or any other party that may be responsible. The prompt investigation and payment of established claims thus remains the major challenge of the Administrator and his limited staff.

With the able assistance of the marine consultant engaged by the SOPF, as well as legal counsel across the country, these objectives have been largely met.Where delays in the payment of compensation have been experienced, it is often because inadequate or incomplete documentation has been filed in support of the claim. Also, sadly, most claims submitted directly to the SOPF, involve ships that are derelict or abandoned and the owners have either disappeared or have no attachable assets, rendering the recovery of compensation impossible. In those instances where spills have been caused by ships with responsible shipowners, backed by proper insurance, compensation has often been achieved without recourse to the SOPF. In past reports, the Administrator has routinely referred to the problem of abandoned and derelict vessels. Those vessels remain an ongoing challenge for both the SOPF and for national, provincial and local governments. The Administrator remains open to discussion on managing this problem.

In previous Annual Reports, particularly the last one, the Administrator referred to the challenge posed by the significant increase in its administrative work load resulting from efforts to comply with government legislation and policies aimed at greater transparency and accountability.With the passage of Bill C-7 and its entry into force as Chapter 21 of the Statutes of Canada, 2009, some of these requirements have become compulsory. It may be recalled that the SOPF is a very small agency, staffed entirely by non-public sector personnel. Whereas in larger government departments and agencies, compliance with these requirements is often achieved by dedicated staff, this is not possible at the SOPF, given its size, so that it must rely to a large extent on consultants to do this work. To ensure that the SOPF meets all its legal obligations, while not unduly expanding its staff, remains a significant challenge.

As many of these aforementioned problems are common to other small agencies, the Administrator is a regular attendee at meetings of the Heads of Federal Agencies Association; the objective being to learn as much as possible about how other small agencies are dealing with these matters. The Administrator has also involved his Office BusinessManager in meetings organized for the benefit of these agencies with the aim of cultivating networks and contacts. The Administrator is particularly interested to learn about instances of shared services between government departments and agencies, which he believes may be an effective way to deal with ever growing administrative costs. Additionally, this would ensure that its staff requirements, and attendant costs, do not grow out of proportion to the costs associated with its core business of investigating and paying established claims.

Over the years, the SOPF has received generous support from Transport Canada, notably in accounting and financial services.However,more help is needed. The transformation of its filing system, dictated by the SOPF’s compliance with the Access to Information (ATIP) and Privacy Act, has now been achieved. However, this work will remain incomplete until the SOPF also has access to the common information management database that is currently used by the federal government. This application is an essential tool to implement a file retirement policy, identify relevant files according to time limitation periods, as well as help streamline any ATIP requests that may be filed with the Fund. Discussions are underway with Transport Canada to extend this application to the SOPF.Although the SOPF could purchase this much needed software on its own, it would prove extremely costly. Hopefully with the assistance of Transport Canada this exorbitant cost can be avoided.

In previous Annual Reports, the Administrator has referred to staffing problems resulting from the need for more staff, as well as the need for some degree of permanence in staffing arrangements. Total reliance on temp agencies to meet its staff requirements is no longer entirely satisfactory so the SOPF has been resorting to longer term contracts with key staff. This poses additional administrative burdens on the Fund in the realm of pay and benefits, which it is ill-equipped to deal with, since it lacks the necessary experience. The SOPF is too small to justify dedicated staff to deal with this aspect of its administration. In this instance, too, the Administrator is looking to Transport Canada for advice and assistance.

As mentioned above, the amendments to the MLA, contained in Chapter 21 of the Statutes of Canada, 2009, have come into force as of January 2, 2010. It is the belief of the Administrator that these amendments will not significantly alter the claims handling procedures of the SOPF. In addition, they contain provisions relating to governance of the SOPF.Much of what is stipulated in these provisions has already been implemented by the SOPF administration on a voluntary basis. They do, also, provide for a special examination to be carried out once every five years to determine that proper systems and practices are in place regarding financial accounting and control, the aim being to ensure that the assets and the resources of the Fund are properly safeguarded and efficiently managed. In anticipation of such a special examination, the Administrator, with the help of his Office BusinessManager and auditors is reviewing all practices and procedures to ensure that the SOPF is run efficiently and cost effectively.

For the past two years, the Administrator has been on notice that the SOPF will have to move from its current location in the Lorne Building, 90 Elgin Street, in Ottawa. The process of finding a new location has been an arduous one.With the assistance of PublicWorks and Government Services and with the advice and assistance of Transport Canada, a new location as been found that meets with government guidelines and directives. The actual move, which should be completed in May, will result in a significant increase in the work load of SOPF staff. Every effort will be made to ensure that the move is accomplished with as little disruption of the core work of the Fund to investigate and pay established claims.

The Administrator, assisted by the marine consultant of the SOPF, pursues an active outreach program. The aim is to make Canadians aware of the facilities that the SOPF provides and the role that it plays in the Canadian regime of liability and compensation for ship-source oil pollution damage. In addition to attending conferences and seminars to keep abreast of technical and legal developments in the field of marine pollution, the Administrator also fosters regular contacts with government departments and agencies and major stakeholders. In line with government directives, the SOPF has developed a website which theAdministrator sees as a vital outreach tool. The challenge over the coming months will be to bring the website fully up to date in light of recent amendments to the governing law, as referred to above.

Last but not least, the work on an up-to-date claims manual remains incomplete, mainly because the Administrator has not been able to tackle this work, given the limited resources at his disposal and other priorities over which he has no control. Once the move has been accomplished, however, the Administrator hopes to tackle this project.While government claimants against the SOPF are well aware of its practices and procedures with respect to the submission of claims, in recent years there have been a number of claims from non-governmental claimants, sometimes for the first time, where access to an up to date claims manual would be useful. Again, the Administrator sees the claims manual, in addition to the website, as a useful outreach tool.