The International Oil Pollution Compensation Funds provide compensation for oil pollution damage resulting from spills from tankers. In their existing form, the funds were created by an intergovernmental agreement signed in 1992, shortly after the American Oil Pollution Act (OPA) of 1990 was passed in the wake of the Exxon Valdez incident. As of January 2, 2007, 98 States had ratified this agreement.

The IOPC Funds provide further compensation for oil pollution victims in its member states when shipowner compensation fails to cover the full cost of the damage.

For example, in the case of the Erika, the shipowner's liability—which is calculated according to the vessel’s tonnage is limited under international Conventions to €13 million.

The ceiling on IOPC compensation was raised from €185 million to €274 million on November 1, 2003. The Supplementary Fund came into force on March 3, 2005 and increased the maximum amount of compensation for accidents occurring in member states’* waters to about €900 million.

*As at January 23, 2007, the Supplementary Fund had 20 members. Barbados, Belgium, Croatia, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Latvia, Lithuania,  The Netherlands, Norway, Portugal, Slovenia, Spain, Sweden, United-Kingdom,