Communication from the Commission to the European Parliament pursuant to the second subparagraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive on the civil liability and financial guarantees of shipowners (Text with EEA relevance)
Date: 2008-12-09
Institutions: European Commission
Subjects: civil liability, environmental liability, law of the sea, maritime safety, penalty, polluter pays principle, pollution control measures, pollution from ships

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.12.2008 
COM(2008)846 final 

2005/0242 (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to the second subparagraph of Article 251(2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive on the civil liability and 
financial guarantees of shipowners 

(Text with EEA relevance) 

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2005/0242 (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to the second subparagraph of Article 251(2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Directive on the civil liability and 
financial guarantees of shipowners 

(Text with EEA relevance) 

1. 

BACKGROUND 

Date on which the proposal was sent to the European Parliament 
and to the Council (document COM(2005) 593 final – 2005/0242 
COD): 

Date of the opinion of the Committee of the Regions: 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

30.1.2006 

15.6.2006 

13.9.2006 

Date of the opinion of the European Parliament at first reading: 

29.3.2007 

Date of transmission of the amended proposal: 

Date of adoption of the common position: 

24.10.2007 

9.12.2008 

2. 

PURPOSE OF THE COMMISSION'S PROPOSAL 

The proposal, presented as part of the third maritime safety package, aims to ensure that there 
is  a  minimum  set  of  rules  common  to  all  Member  States  governing  civil  liability  and 
insurance for shipowners and to define the basis for rules to make operators more accountable 
and guarantee compensation for damages. 

The proposal contains the following measures: 

–  ratification  by  all  the  Member  States  of  the  Convention  of  the  International  Maritime 
Organisation  (IMO)  on  the  Limitation  of  Liability  for  Maritime  Claims  (1996  version) 
(hereinafter ‘LLMC 1996’). LLMC 1996 basically provides for two things:  

–  it enshrines the principle of the limitation of liability by fixing at a relatively high 
level the threshold beyond which shipowners lose their right to limit their liability 
(‘reckless personal act or omission’),  

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–  it  lays  down  limits  of  liability  that  are  sufficiently  high  to  guarantee  adequate 
compensation  to  victims  in  most  cases  (these  limits  are  three  times  higher  than 
those set out in the previous Convention: LLMC 1976); 

–  the incorporation of the Convention into Community law, with an amendment, compatible 
with the Convention, reducing the threshold beyond which the owners of ships flying the 
flag of a non-contracting State lose their right to limit their liability (‘gross negligence’); 

–  establishment of a system of obligatory civil liability insurance for shipowners: 

–  cover equivalent to double the ceilings laid down in LLMC 1996, 

–  verification  by  the  Member  States  that  insurance  has  been  taken  out,  with  the 

issue of certificates that are mutually recognised throughout Europe, 

–  notification  by  the  captain  of  a  ship  that  certificates  are  being  carried  on  board 
when  the  ship  enters  a  maritime  area  under  the  jurisdiction  of  a  Member  State 
(notification requirement to cover ships in transit), 

–  direct action by the victim against the insurer; 

–  the proposal also makes binding a Resolution of the IMO and the ILO on financial security 

certificates for abandonment of seafarers. 

This system is designed inter alia to provide an immediate holding response to the enduring 
difficulties  in  implementing  a  number  of  IMO  Conventions  still  in  abeyance  that  aim  in 
particular to make insurance for certain types of damage caused by these ships obligatory. 

3. 

COMMENTS ON THE COMMON POSITION 

The Commission’s initial ambitions, supported by the European Parliament in its opinion at 
first reading, were considerably curtailed by the Council. The common position retains only 
part of the initial proposal.  

–  The following amendments have been made: 

–  the  title  ‘Directive  on  the  civil  liability  and  financial  guarantees  of  shipowners’ 
has been superseded by a new title ‘Directive on the insurance of shipowners for 
maritime claims’; 

–  the  requirement  to  ratify  LLMC  1996  has  been  deleted,  the  Member  States 
undertaking in a parallel declaration to ratify it by 1 January 2012 (together with 
the  other  relevant  Conventions);  the  provision  on  the  incorporation  of  the 
Convention into Community law has also been deleted; 

–  the provisions on the abandonment of seafarers have been deleted; 

–  the provisions on Community checks to ensure that insurance has been taken out 

have been deleted; 

–  the  provision  requiring  notification  of  the  insurance  certificate  on  entry  into 

maritime areas under the jurisdiction of Member States has been deleted; 

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–  the provisions on direct action against insurers have been deleted. 

–  The following has been retained: 

–  the  requirement  for  all  ships  flying  the  flag  of  a  Member  State  (throughout  the 
world)  and  for  all  ships  entering  a  maritime  area  under  the  jurisdiction  of  a 
Member State to have insurance cover; 

–  the cover must correspond to the ceilings set out in LLMC 1996; 

–  the proof of insurance will be provided by a commercial insurance certificate; 

–  whether or not the ship is carrying an insurance certificate can be verified during 

an inspection under the Port State Control Directive; 

–  where the ship is not carrying a certificate, it may be detained or even expelled, 
without  prejudice  to  any  financial  penalties  to  be  determined  by  each  Member 
State; 

–  the date of entry into force of the Directive is postponed until 1 January 2012, the 
date by which the Member States (by means of the declaration referred to above) 
undertake all to have ratified LLMC 1996. 

Despite the deletions made by the Council, the common position retains a number of points of 
substance.  Insurance  is  not  currently  obligatory  for  ships;  the  requirement  laid  down  in  the 
Directive that all ships, irrespective of where they are registered, must have insurance at the 
level  of  the  ceilings  set  out  in  LLMC  1996,  i.e.  at  levels  three  times  higher  than  those 
provided for in the previous Convention, sends out a strong signal to citizens and operators. It 
should  be  pointed  out  that  only  a  small  percentage  (20%)  of  global  tonnage  operates  under 
flags subject to this level of limitation. Furthermore, not all ships are necessarily insured. 

4. 

CONCLUSIONS 

The Commission notes that the Council, after having expressed its opposition on principle to 
the proposal at its meeting in April 2008, was finally able unanimously to adopt a common 
position on a text that brings added value. 

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