THE INTERNATIONAL REGIMEFOR OIL POLLUTION DAMAGEandTHE HNS CONVENTION

Nobuhiro Tsuyuki
Legal Counsel
International Oil Pollution Compensation Funds
21 February 2008
1Contents

1 International Regime on Liability andCompensation for Oil Pollution Damage
2 The HNS Convention and HNS Focus Group21

International Regime on Liability andCompensation for Oil Pollution Damage
1992 CIVIL LIABILITY CONVENTION (CLC) 121 Contracting States; 116 States Parties
1992 FUND CONVENTION (FC) 102 Contracting States; 99 States Parties
2003 PROTOCOL TO 1992 FUND CONVENTION
 21 Contracting States; 20 States Parties(As at 5 February 2008)

1971 Fund Convention ceased to be in force on
24 May 2002
3THE THREE-TIER SYSTEM
3rd tier

2nd tier

1st tier

Oil receivers
after seatransport

Supplementary
Fund Protocol

Supplementary
FundOil receivers
after seatransport

1992 FundConvention

1992 FundShipowners

1992 Civil Liability
Convention

Insurers
42

1992 CONVENTIONS APPLY TO:
 Pollution damage
 Spills of persistent oil from tankers
 Territory, territorial waters and EEZ or equivalent Preventive measures
 Bunker spills from unladen tankers
 ‘Mystery spills’ from a tanker
5MAIN TYPES OF CLAIM
 Clean-up operations and preventive measures
 Property damage
 Losses in fishery, mariculture and tourism
sectors:
Consequential lossPure economic loss
 Environmental damage; limited to costs ofreasonable measures of reinstatement actually
undertaken or to be undertaken
63

1ST TIER
1992 CIVIL LIABILITY CONVENTION
 Strict liability of registered shipowner (Art. III) Limitation of liability (Art. V) Shipowners may lose right of limitation(Art. V, 2)
 Compulsory insurance (Art. VII)

7

1992 CLC – LIMITS OF SHIPOWNER’S LIABILITY

GTSDR

US $

≤ 50004 510 000

7 093 000

Per additional GT
up to 140 000

631992GT ≥ 140 000

89 770 000

141 200 000

Exchange rate as of 8 February 2008
84

2ND TIER
THE 1992 FUND CONVENTION
 Provides compensation for pollution damage to theextent that the compensation available under the1992 CLC is inadequate Creates an intergovernmental organisation:
the IOPC Fund
 Maximum compensation 203 million SDR(US$319 million)

9LIMITS LAID DOWN IN THE CONVENTIONS
1,200

1,000

$ (m illio n s )

800

600

4002000020

1992 CLC

406080100
Units of tonnage of ship (1 000 units)

1992 Fund120140160

Supplementary Fund

105

WHO CONTRIBUTES TO THE FUND?
(Art. 10)
 Person receiving > 150 000 tons ofcontributing oil /year after sea transport Contributing oil = crude oil and heavy fuel oil Contributions decided by Fund Assembly Oil receivers pay, not governments

11

1992 Fund
General Fund contributions 2006
Japan
18%

Others
22%

Italy
10%

United Kingdom
4%
Spain
5%

Republic of Korea
8%Singapore
5%
Canada6%
France7%India
8%
Netherlands
7%

126

3RD TIER
SUPPLEMENTARY FUND
 Supplementary Fund Protocol
Entry into force in March 2005 Maximum compensation 750 million SDR(US$1 180 million), including amounts payable under1992 Conventions
 Contributions to Supplementary Fund payable by oil
receivers in States Parties to Protocol
13

Supplementary Fund
General Fund contributions 2006
Others 5%
Portugal 2%
Norway 3%

Japan 20%

Sweden 3%
United Kingdom 3%

Germany 6%

Spain 9%Italy 19%

France 15%
Netherlands 15%

147

STOPIA 2006
 Applies to pollution damage in 1992 Fund
Member States Voluntary increase to 20 million SDR of limitation
amount for ships up to 29,548 gross tonnage
 1992 Fund remains liable to pay compensation
to claimants over 4.51 million SDR
 1992 Fund will be indemnified by the shipownerfor difference between CLC limit and 20 millionSDR
15TOPIA 2006
 Applies to pollution damage in Supplementary
Fund Member States
 Supplementary Fund will continue to pay
compensation to claimants in accordance withSupplementary Fund Protocol
 Shipowner will indemnify the Supplementary
Fund for 50% of the compensation it has paid
to claimants
168

THE HNS CONVENTIONandHNS Focus Group

17THE HNS CONVENTION
 International Convention on Liability and Compensation
for Damage in Connection with the Carriage ofHazardous and Noxious Substances by Sea, 1996
 Provide compensation for damage resulting from themaritime transport of hazardous and noxious
substances (HNS)189

DEVELOPMENT OF THE HNS CONVENTION
1984 Diplomatic Conference failed to agree
original HNS Convention
1996 HNS Convention agreed at a Diplomatic
Conference organised by the IMO
1997- Work on implementation of the Convention
2007 HNS Focus Group set up to revise theConvention
19THE TWO-TIER SYSTEM

2nd tier(HNS Convention)

HNS receivers
after sea transportContribution

HNS Fund1st tier
Shipowners

Compulsory insurance

Insurers

2010DEFINITION OF HNS(Art. 1.5)
“Hazardous and noxious substances” (HNS) means:(a) any substances, materials and articles carried on
board a ship as cargo, referred to in (i) to (vii) below:
and(b) residues from the previous carriage in bulk ofsubstances referred to in (a) (i) to (iii) and (v) to (vii)
above.

21

BULK HNS AND PACKAGED HNS(Art. 1.5)
Bulk HNS(i) Oils(ii) Liquids(iii) Liquids(v) Gases(vi) Liquids(vii)Solids

Annex I Appendix I of MARPOL 73/78
Annex II Appendix II of MARPOL 73/78Chapter 17 of IBC Code
Chapter 19 of IGC Codeflashpoint not exceeding 60°C
Appendix B of BC of BC Code, if also
covered by IMDG Code in packaged form

Packaged HNS(iv) IMDG Code2211

DAMAGES COVERED BY THE CONVENTION(Art.1.6)
 Loss of life or personal injury on board or outside
the ship carrying the HNS
 Loss of or damage to property outside the ship
 Economic losses resulting from contamination ofthe environment;
eg. in the fishing, mariculture and tourism sectors
 Costs of preventive measures;eg. clean-up operations at sea and onshore Costs of reasonable measures of reinstatement ofthe environment
23THE CONVENTION DOES NOT COVER(Art.4.3)

 Pollution damage caused by persistent oil(already covered by CLC/Fund regime) Damage caused by radioactive substances

24

12

COMPENSATION LIMITS SHIPOWNER
 ships ≤ 2 000 GT - 10 million SDR(US$15.7 million)rising to ships ≥ 100 000 GT - 100 million SDR(US$157 million)
 HNS FUND
 maximum of 250 million SDR (US$393 million)(including amount paid by shipowner/insurer)

25

LIMITS LAID DOWN IN THE CONVENTIONS(Art9.1, Art.14.5)(million SDR)
300

250

200150100500020406080100120140160

Tonnage of ship ('000 GT)
Shipowner/Insurer

HNS Fund2613COMPARISON WITH CLC/FC SYSTEM
 Covers very wide range of substances in bothbulk and packaged form
 Not just pollution damage but other types ofclaims, eg. death and personal injury
 Contribution system much more complicated27

COMPARISON OF LIMITS(million SDR)

HNS
Convention

CLC/FundSupp. Fund

Shipowner minimum

104.5-

Shipowner maximum

10089.8-

Fund250203750
2814

FINANCING OF THE HNS FUND
(Art.18, Art.19)
 HNS Fund financed by contributions based on
quantities of contributing cargo received in StateParties after sea transport Both initial and annual contributions
 General accountAt least 2 (up to 5) sectors: Bulk solids, Other HNS Separate accounts
Up to 3 Separate Accounts: Oil, LNG, LPG
29

WHO CONTRIBUTE THE HNS FUND?
(Art.1.4, Art.19)
The person liable to pay contributions to the HNS Fund, Persistent oil:Any persons liable to contribute to the 1992 Fund
 LNG:
Any persons who held title to an LNG cargo
immediately prior to discharge
 All other types of HNS:The receiver as defined in Article 1.4
30

15DEFINITION OF RECEIVER(Art.1.4)
 the physical receiveror
 if the physical receiver is acting as an agent
for another who is subject to the jurisdictionof any State Party, the principal, if the agent
discloses the principal to the HNS Fund

31

CONDITIONS for ENTRY INTO FORCE(Art.46)
18 months after ratification by at least 12 states,
subject to: 4 States each having ships with a total tonnage ofat least 2 million GTand 40 million tonnes of contributing cargo (bulk solidsand other HNS, not oil, LNG or LPG) received inthese States in previous calendar year
32

16

CURRENT STATUS
 8 States have ratified the Convention
Angola, Cyprus, Morocco, the Russian Federation
Saint Kitts and Nevis, Samoa, Slovenia, Tonga

 Only 2 of these States (Cyprus and Slovenia)
have submitted reports on contributing cargo
 The Convention has not entered into force

33

WORK CARRIED OUT BY THE IOPC FUNDS HNS Contributing Cargo Calculator (HNS CCCC)- CD-ROM- website www.hnscccc.org
 Guide to the Implementation of the HNS Convention
 Workshops (June 2005 and May 2006)
 HNS Brochure HNS Convention website - www.hnsconvention.org
 HNS Focus Group34

17

HNS FOCUS GROUP
 October 2007: Set up by 1992 Fund Assembly Aim: Facilitating the entry into force of the HNSC
 Mandate to develop draft Protocol to resolve
three main issues:
Contributions to the LNG AccountThe concept of “receiver”
Non-submission of contributing cargo reports
 Not a wholesale revision of the HNS Convention
35

TIMEFRAME FOR WORK
18 Jan. 2008: Policy proposals to be submitted by States
15 Feb. 2008: Draft Protocol to be developed by
Chairman of Focus Group, IOPC Funds and IMO
Mar. 2008: First meeting of HNS Focus Group
Jun. 2008: Approval of Protocol by 1992 Fund Assembly
Oct. 2008: Legal Committee of the IMO
2009?: Diplomatic Conference
3618

CONTRIBUTIONS TO THE LNG ACCOUNT(Art.19.1(b))
 LNG Account:
Person liable for contributions is“person who ..., immediately prior to its discharge,
held title to an LNG cargo discharged in a port orterminal of that State”
 Issue:
Person liable for contributions may not be subject tojurisdiction of a State Party and therefore payment ofcontributions cannot be enforced
 Policy proposal submitted by States:
Change to standard definition of receiver37

THE CONCEPT OF “RECEIVER”(Art.1.4)
 Issue:
Definition of receiver creates administrative burden
for reporting Packaged HNS Policy proposal submitted by States:
 Packaged HNS to be covered for compensationby the HNS Fund but not liable for contributions
 Increase in shipowner’s limit to balance extra
contributions by receivers of bulk goods

38

19

NON-SUBMISSION OFCONTRIBUTING CARGO REPORTS(Art.43)
 Issue:
Only 2 out of 8 States have submitted reports butclaimants in those States would still be eligible forcompensation
 Policy proposal submitted by States: Deny compensation to claims in States which havenot submitted reports (cf. Supplementary Fund)(*Exception for claims for death or personal injury)
 Consider excluding States which have notsubmitted reports
39

Conclusion
The International Regime for Oil Pollution Damage
 The regime of the 1992 Conventions has in general worked well
 Used as model in other Conventions

The HNS Convention The HNS Focus Group was set up to facilitate the entry into

force of the HNS Convention

 Draft protocol to resolve the issues of the HNS Convention will
be discussed at the HNS Focus GroupInformation
IOPC Funds website: www.iopcfund.org
4020