States Urged to Ratify Compensation Regime for Hazardous and Noxious Cargoes

 

The International Convention on Liability and compensation for Damage in Connection with the Carriage of Hazardous and Noxious substances by Sea, 2010 (2010 HNS Convention), when in force, will provide a regime of liability and compensation for damage caused by HNS cargoes transported by sea, complementing existing regimes already in force for the transport of oil as cargo, bunker oil used for the operation and propulsion of ships, the removal of hazardous wrecks and claims for death of or personal injury to passengers, or for damage to their luggage, on ships.

 

“The HNS Convention recognizes that accidents can and do happen and it is the last piece in the puzzle needed to ensure that those who have suffered damage caused by HNS cargoes carried on board ships have access to a comprehensive and international liability and compensation regime,” said IMO Secretary-General Kitack Lim. “The number of ships carrying HNS cargoes is growing steadily with more than 200 million tonnes of chemicals traded annually by tankers. I urge all States to consider acceding to the HNS 2010 treaty as soon as possible, in order to bring it into force.” 

 

Entry into force requires accession by at least 12 States, meeting certain criteria in relation to tonnage and reporting annually the quantity of HNS cargo received in a State. There are as yet no contracting States to the 2010 HNS Convention. However, progress towards the Convention’s entry into force has gathered pace over the past year, with a number of States preparing the necessary implementing legislation. 

 

 Together with the IOPC Funds and ITOPF, IMO has produced a six-page brochure that explains to States the purpose and benefit of the HNS Convention and encourages IMO Member States to take the next steps to ratify or accede to the Convention. 

 

The development of the brochure was achieved collaboratively through an IMO Correspondence Group and its production was funded through a donation made to IMO by the Government of Canada.  

 

It is the first in a series of tools to be developed in collaboration with IMO Member States, the purpose of which is to make ratification a priority and to assist government administrations in their internal promotion of the Convention. It also highlights the potential risk to claimants if there is currently no liability and compensation regime in force.

 

IMO measures relating to the prevention of accidents that involve HNS cargoes are already in force, including ship design, operations and safety on board as well as safety of loading and unloading operations. There is also a protocol covering preparedness and response to shipping accidents involving hazardous substances.

 

The 2010 HNS Convention can deliver the uniform and comprehensive regime needed to provide compensation for costs, including clean-up and restoring the environment, in the event of an incident involving HNS cargoes. 

 

Total compensation available under the Convention is capped at 250 million Special Drawing Rights (SDR) of the International Monetary Fund (approximately USD $380 million at current exchange rates) per event. Shipowners are held strictly liable up to a maximum limit of liability established by the Convention for the cost of an HNS incident. 

 

Registered owners of ships carrying HNS cargoes, have to maintain insurance that is State certified. The HNS Fund pays compensation once shipowner’s liability is exhausted and is financed through contributions paid post incident by receivers of HNS cargoes. The HNS Fund is administered by States and contributions will be based on the actual need for compensation.

 

HNS covered by the Convention include: oils; other liquid substances defined as noxious or dangerous; liquefied gases; liquid substances with a flashpoint not exceeding 60˚C; dangerous, hazardous and harmful materials and substances carried in packaged form or in containers; and solid bulk materials defined as possessing chemical hazards.

 

The HNS Convention establishes the principle that the ‘polluter pays’ by ensuring that the shipping and HNS industries provide compensation for those who have suffered loss or damage resulting from an HNS incident.