INTERNATIONAL MARITIME ORGANIZATION

E
IMO

TECHNICAL GROUP OF THE MEPC ON

OPRC-HNS
9th session
Agenda item 3

MEPC/OPRC-HNS/TG 9/3/7
26 May 2009
ENGLISH ONLY

MANUAL AND GUIDANCE DOCUMENTS

Manual on Chemical Pollution to address legal and administrative aspects
of HNS incidents
Submitted by Canada and the Institute of Marine Engineering, Science
and Technology (IMarEST)
SUMMARY
Executive summary:

This document sets out a first draft of the proposed Section III of the
Manual on chemical pollution to address legal and administrative
aspects of HNS incidents

Strategic direction:

7.1

High-level action:

7.1.2

Planned output:

7.1.2.9

Action to be taken:

Paragraph 7

Related documents:

MEPC 54/24, MEPC 54/WP.1; MEPC 57/WP.1; MEPC 58/WP.1 and

MEPC/OPRC-HNS/TG 7/3/3

Introduction
1
At its fourth session, the OPRC-HNS Technical Group considered, for the first time, the
development of a Manual on Chemical Pollution to address legal and administrative aspects of
HNS incidents, as set out in the work programme of the Technical Group (MEPC 54/WP.1,
annex 2). At MEPC 54, it was agreed that the inclusion of a new section into the Manual on
Chemical Pollution series was required and the Committee approved the addition of this work
item to the work programme of the Technical Group (MEPC 54/24).
2
At its fifth and sixth sessions, the Technical Group undertook an evaluation of available
materials and considered the requirements and format for the development of a new section of
the Manual on Chemical Pollution. A proposal to develop this manual was put forward based on
the need to develop materials to assist countries in the implementation of the Protocol on
For reasons of economy, this document is printed in a limited number. Delegates are
kindly asked to bring their copies to meetings and not to request additional copies.

I:\MEPC\OPRC-HNS\TG\9\3-7.DOC

MEPC/OPRC-HNS/TG 9/3/7

-2-

Preparedness Response and Co-operation to Pollution Incidents by Hazardous and Noxious

Substances (OPRC-HNS Protocol 2000), which entered into force in June 2007.
3
The Group, at its seventh session, carried out an in-depth review of a draft text of the
Manual on legal and administrative aspects of HNS, as submitted by the United States
(MEPC/OPRC-HNS/TG 7/3/3). During the course of its deliberations on the matter and, having
noted the recent developments with the HNS Convention, the Group concluded that it would
proceed with the development of those portions of the Manual that did not have any bearing on
the HNS Convention. It would then await the outcome on the deliberations by the
Legal Committee on the future Protocol to the HNS Convention, before proceeding on the
portions directly related to the Convention. It concluded by establishing a correspondence group,
led by Canada, to progress this work in the intersessional period (MEPC 57/WP.1).
4
At its eighth session, the Group considered an initial outline and proposed a path forward
for the development and finalization of the Manual, as proposed by the correspondence group
and agreed that it be re-established under the leadership of Canada to prepare an initial revised
draft of the Manual for submission to TG 9 and to monitor developments with regard to the
development of a Protocol to the HNS Convention, in particular, on those aspects that would
have a direct impact on the final content of the Manual and report back to TG 9, accordingly
(MEPC 58/WP.1).
Current status
5
In developing the current draft Manual, as set out at annex, consideration was given to the
structure and content of the Manual on Oil Pollution Section V: Administrative aspects of oil
pollution response.
6
Part III of the draft addressing liability and compensation for marine pollution incidents
involving HNS has not, at this point, been reviewed or revised. Further development and
finalization of this section of the Manual are being placed in abeyance pending the outcome of
the anticipated 2010 Diplomatic Conference, which is expected to adopt a Protocol to the
HNS Convention that will address many of the current barriers to ratification and
implementation.
Action requested of the Technical Group
7
Taking into consideration the progress of this task and the information provided, the
Technical Group is invited to:
.1

review the proposed draft of the Manual on Chemical Pollution to address legal
and administrative aspects of HNS incidents, set out at annex;

.2

consider the recommendation of the correspondence group to title this part of the
Manual as Section III rather than follow the oil pollution manual and title it
similarly as Section V;

.3

give guidance as to the level of detail to be given in Part II of the Manual, with
respect to the implementation of all the requirements of the OPRC-HNS Protocol 2000;

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-3.4

.5

MEPC/OPRC-HNS/TG 9/3/7

provide, in particular, specific guidance on:

.1

Part VI Chapter 1, by providing the titles and details of applicable

reference materials relating to HNS that administrators and legal staff
would find of assistance in furthering knowledge or as a source of
clarification on some aspect of handling HNS incidents; and

.2

Part VI Chapter 2, by providing copies of relevant forms and templates

of documents that would assist administrators in dealing with HNS
incidents; and

provide any other comments and expertise on matters requiring further

development.
***

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MEPC/OPRC-HNS/TG 9/3/7
ANNEX
DRAFT MANUAL ON CHEMICAL POLLUTION TO ADDRESS LEGAL AND
ADMINISTRATIVE ASPECTS OF HNS INCIDENTS

I:\MEPC\OPRC-HNS\TG\9\3-7.DOC

DRAFT
Proposed Section for the Manual on Chemical Pollution, Section III
Legal and Administrative Framework for the ManagementAspects of
Hazardous and Noxious Substances (HNS) IncidentsResponse
Foreword
The Marine Environment Protection Committee (MEPC), at its fifty fourth session, agreed that
inclusion of a section to address legal and administrative aspects of HNS incidents was required.
The requirement for such a section was based on the need to develop materials to assist countries
in the implementation of the Protocol on Preparedness, Response and Co-operation to Pollution
Incidents by Hazardous and Noxious Substances (OPRC-HNS Protocol 2000) which), which
entered into force in June 2007.
There are substantial differences in the legal and administrative frameworks for the management
of HNS and oil response, not the least of which include: the lack of international instruments
addressing HNS, which exist for oil; the often substantial differences in behaviour between HNS
and oil products when released into the marine environment; and the different industries which
produce, transport and storehandling and transporting HNS and oil in the marine environment.
There are, nevertheless, substantial similarities in other areas such as in many of the roles and
functions of entities whichentities, which could be involved in an HNS response and its
aftermath. This section was therefore prepared to compliment complement the Manual on Oil
Pollution Section V: Administrative aspects of oil pollution response of the IMO. Taking this
into account, it is suggested that the Technical Group development of the proposed text as a
Section in the Manual on chemical pollution series, just as oil-related administrative aspects are
included in the Manual on oil pollution series.
These are three principle documents in dealing with HNS, these are the OPRC-HNS Protocol of
2000, the HNS Liability and Compensation Convention of 1996 and the Manual on Chemical
Pollution.
The Manual on Chemical Pollution currently consists of threetwo sections:
Section I
Section II
Section III

Problem Assessment and Response Arrangements

Search and Recovery of Packaged Goods Lost at Sea
Legal and Administrative Aspects of HNS Incidents

A seris of sections on the Manual on Oil Pollution consists of five sections:

Section I
Prevention
Section II
Contingency Planning
Section III Salvage
Section IV
Combating Oil Spill
Section V
Administrative Aspects of Oil Pollution Response
Section VI
IMO Guidelines for Sampling and Identification of Oil Spill

L:\MED\POLLRES\OPRC-HNS TechGrp Info\9-TG 9 Working file\3-7Annex.doc

Contents

Introduction

Part I Entities Potentially Involved in an HNS Pollution Emergency

Chapter 1 The Ship Owner
Chapter 2 The Ship Operator
Chapter 3 The Master
Chapter 4 The Cargo Owner
Chapter 5 The Flag State
Chapter 6 The Coastal State
Chapter 7 The Salvor
Chapter 8 The Liability Insurer
Chapter 9 The HNS Responder
Chapter 10- The Port Authority
Chapter 11- The Pilot
Chapter 12- Custom

Part II Protocol on Preparedness, Response and Co-operation to Pollution Incidents by

Hazardous and Noxious Substances 2000

Part III- Liability and Compensation Regarding Marine Pollution Incidents Involving HNS
Chapter 1 Introduction
Chapter 2 Ratification and Entry into Force
Chapter 3 Purpose of the HNS Convention
Chapter 4 Substances Covered by the HNS Convention
Chapter 5 Damage at Sea
Chapter 6 Two Tier Structure to HNS Convention
Chapter 7 Liability of the Ship Owner
Chapter 8 Vessel Insurance
Chapter 9 Insurance Certificate
Chapter 10 Payment of Compensation
Chapter 11 Subrogation and Recourse
Chapter 12 Claims for Compensation and Scope of Application
Section 1 Presenting a Claim
Section 2 Limitation on Claims
Chapter 13 HNS Fund
Section 1 Contributions to HNS Fund
Section 2 Fund Liability Limits
Section 3 HNS Fund Accounts
Chapter 14 Competent Courts
Chapter 15 Reasonable Costs

Part IVII International Conventions, Codes and Guidelines Involving HNS

Chapter 1 Introduction
Chapter 2 Protocol on Preparedness, Response and Co-operation to Pollution Incidents
by Hazardous and Noxious Substances 2000
Chapter 23 International Conventions Governing the Carriage of Chemicals by Ship
Chapter 34 International Convention for the Prevention of Marine Pollution from Ships
Section 1 Introduction
Section 2 Annex II
Section 3 Annex III
Chapter 45 Protocol on Liability and Compensation for Damage Resulting from
Transboundary Movements of Hazardous Wastes and their Disposal
Chapter 56 Convention on Limitation of Liability for Maritime Claims
Chapter 67 Convention on the Prevention of Marine Pollution by Dumping of Wastes
and Other Matter
Chapter 78 Resolution A.898(21) Guidelines on Ship Owners Responsibilities in
Respect of Maritime Claims
Chapter 89 Convention on Civil Liability for Damage Caused During Carriage of
Dangerous Goods by Road, Rail and Inland Navigation Vessels
Chapter 910 Prevention of Transboundary Harm from Hazardous Activities
Chapter 101 The International Convention on Salvage
Chapter 112 The International Convention for the Safety of Life at Sea (SOLAS)
Chapter 123 Prevention of Pollution by Harmful Substances Carried by Sea in
Packaged
FForm
Part IV International Codes and Guidelines Involving HNS
Chapter 1 Introduction
Chapter 13 2 The International Safety Management Code (IMO Assembly
resolution A.741(18)
Chapter 143 GESAMP Evaluation of Hazardous Substances Working Group
and Hazard Profiles List
Chapter 154 IMO International Codes Covering the Carriage, Design, Construction,
Equipment, and Operation of Ships Carrying Chemicals in Bulk and/or Packaged Form
Chapter 165 International Code for the Construction of Equipment of Ships Carrying
Dangerous Chemicals in Bulk
Chapter 176 International Code for the Construction of Equipment of Ships Carrying
Liquefied Gases in Bulk
Chapter 187 International Maritime Dangerous Goods Code
Chapter 198 IMO Manual on Chemical Pollution
Part V Industry Other Agreements Involving HNS
Chapter 1 Introduction
Chapter 2 Small Tanker Oil Pollution Indemnification Agreements (STOPIA)
Chapter 3 Tanker Oil Pollution Indemnification Agreement (TOPIA)
Chapter 2- Regional Agreements
Chapter 3- INF

Part VI Reference documents

Chapter 1 : Sources of further information (e.g. UNEP Orange Book)
Chapter 2: form or document templates (e.g. Lloyds Open Form)

Glossary
The following glossary provides explanations of various instruments and abbreviated expressions
used in this Manual that may be helpful to the user:
Athens Convention

The 1974 Athens Convention relating to the carriage of

passengers and their luggage by sea, as amended by the 2002
Protocol thereto

BC Code

Code of Safe Practice for Solid Bulk Cargos

BCH Code

Code for the Construction and Equipment of Ships Carrying

Dangerous Chemicals in Bulk (predecessor of the IBC ode)

1969 Civil Liability Convention International Convention on Civil Liability for Oil Pollution
1969
Damage, 1969
1992 Civil Liability Convention International Convention on Civil Liability for Oil Pollution
Damage, 1969, as amended by the Protocol of 1992 relating
1992
thereto
CLC Certificate

Certificate of Insurance or Other Financial Security in

respect of Civil Liability for Oil Pollution Damage

EEZ

Exclusive Economic Zone

EGC Code

Code for Existing Ships Carrying Liquefied Gases in Bulk

FPSO

Floating Production Storage and Offloading

FSU

Floating Storage Unit

Funds

International Oil Pollution Compensation Funds

1971 Fund Convention 1971

International Convention on the Establishment of an

International Fund for Compensation for Oil Pollution
Damage, 1971

1992 Fund Convention 1992

International Convention on the Establishment of an

International Fund for Compensation for Oil Pollution
Damage, 1971, as amended by the Protocol of 1992 relating
thereto

GESAMP

Group of Experts on the Scientific Aspects of Marine

Environmental Protection

GHS

United Nations Globally Harmonized

Classification and Labelling of Chemicals

HNS

Hazardous and Noxious Substance

HNS Convention 1996

The International Convention on Liability and Compensation

for Damage in Connection with the Carriage of Hazardous
and Noxious Substances by Sea, 1996 (HNS Convention)

System

of

HNS Fund

The International Hazardous and Noxious Substances Fund

i.e., the organization set up under the HNS Convention

IBC Code

International Code for the Construction and Equipment of

Ships Carrying Dangerous Chemicals in Bulk (liquid)

IGC Code

International Gas Carrier Code

IMDG Code

International Maritime Dangerous Goods Code

INF Code

International Code for the Safe Carriage of Packaged

Irradiated Nuclear Fuel, Plutonium and High-Level
Radioactive Waste on Board Ships

1969
1969

Intervention

Convention International Convention relating to Intervention on the High

Seas in Cases of Oil Pollution Casualties, 1969

1973 Intervention Protocol 1973

Protocol relating to Intervention on the High Seas in Cases of

Pollution by Substances Other Than Oil, 1973

IOPC Funds

International Oil Pollution Compensation Funds

IOPC Funds

The International Oil Pollution Compensation Funds,

i.ei.e., the 1971 Fund, the 1992 Fund and the Supplementary
Fund

IOPC Fund 1971 (1971 Fund)

The International Oil Pollution Compensation Fund 1971,

i.e., the organization set up under the 1971 Fund Convention

IOPC Fund 1992(1992 Fund)

The International Oil Pollution Compensation Fund 1992,

i.e., the organization set up under the 1992 Fund Convention

ISM Code

International Management Code for the Safe Operation of

Ships and for Pollution Prevention

ISU

International Salvage Union

ITOPF

International Tanker Owners Pollution Federation Limited

1966 LL 1966

International Convention on Load Lines, 1966

LLMC 1976

Convention on Limitation of Liability for Maritime Claims,

1976

LNG

Liquefied Natural Gas

LOF 2000

Lloyds Standard Form of Salvage Agreement, 2000

LPG

Liquefied Petroleum Gas

MARPOL

International Convention for the Prevention of Pollution

from Ships, 1973, as amended by the Protocol of 1978
relating thereto

MEPC

The Marine Environment Protection Committee (MEPC) is

IMOs senior technical body on marine pollution related
matters.

MHB

Materials Hazardous only in Bulk

NLS

Noxious Liquid Substance

OPRC 1990

International Convention on Oil Pollution Preparedness,

Response and Co-operation, 1990

OPRC-HNS Protocol

The Protocol on Preparedness, Response and Co-operation to

pollution Incidents by Hazardous and Noxious Substances,
2000
Protection and Indemnity Club

P&I Club
1910 Salvage Convention 1910

Convention for the Unification of Certain Rules of Law

relating to Assistance and Salvage at Sea, 1910

1989 Salvage Convention 1989

International Convention on Salvage, 1989

SCOPIC

Special Compensation P&I Club - A Supplementary Clause

to the Lloyds Form Salvage Agreement No cure No pay

SDR

Special Drawing Right. The US dollar equivalents of SDRs

vary according to the current exchange rates

SMPEP

Shipboard Marine Pollution Emergency Plan

SMS

Safety Management System

SOLAS 1974

International Convention for the Safety of Life at Sea, 1974

SOPEP

Shipboard Oil Pollution Emergency Plan

1978 SOLAS Protocol 1978

Protocol of 1978 relating to SOLAS 1974

2004 SOLAS 2004

International Convention for the Safety of Life at Sea.

Consolidated version

STOPIA

Small Tanker Oil Pollution Indemnification Agreement

STCW 1978

International Convention on Standards of Training,

Certification and Watchkeeping for Seafarers, 1978

Supplementary Fund Protocol

Protocol of 2003 to the International Convention on the

Establishment of an International Fund for Compensation for
Oil Pollution Damage, 1992

Supplementary Fund

The
International
Oil
Pollution
Compensation
Supplementary Fund, i.e., the organization set up under the
Supplementary Fund Protocol

TOPIA

Tanker Oil Pollution Indemnification Agreement

UNCLOS

United Nations Convention on the Law of the Sea, 1982

Introduction
1
This section of the Manual on Chemical Pollution is intended to provide the reader, in
particular on-scene commanders, lead agencies and others involved in the management of
Hazardous and Noxious Substance (HNS) pollution response, with an appreciation of the various
interests involved in an HNS pollution emergency and its aftermath, as well as a general review
of the international legal regimes which are under development regarding limitation of liability
and compensation for HNS pollution damage. This section is not intended to provide an
authorized or definitive commentary on the legal relationships between the various entities
involved in an HNS pollution emergency or an interpretation of relevant international
conventions.
The International Convention on Oil Pollution Preparedness, Response and
2
Co-operation, 1990 (OPRC Convention) in concert with the Protocol on Preparedness, Response
and Co-operation to Pollution Incidents by Hazardous and Noxious Substances, 2000
(OPRC-HNS Convention), defines current international convention requirements with regard to
HNS pollution response.
3
Hazardous and Noxious Substances (HNS) are defined by reference to lists of substances
previously identified and included in various IMO Conventions and Codes. These include liquid
substances defined as noxious or dangerous; liquefied gases; liquid substances with a flashpoint
not exceeding 60C; dangerous, hazardous and harmful materials and substances carried in
packaged form; and solid bulk materials defined as possessing chemical hazards. However, for
the OPRC-HNS Protocol, the definition excludes oil, since oil and oil-related pollution matters
are dealt with under the OPRC Convention.
4
Like the OPRC Convention, the OPRC-HNS Protocol aims to provide a global
framework for international co-operation in combating major incidents or threats of marine
pollution. Parties to the Protocol are required to establish measures for dealing with pollution
incidents, either nationally or in co-operation with other countries. Ships will be required to carry
a shipboard pollution emergency plan to deal specifically with incidents involving HNS.
5
The Protocol also requires ships, seaports and HNS handling facilities within port, where
there exist risks of HNS pollution into the sea, to maintain HNS Pollution Contingency Plans.
The seaports and HNS handling facilities are also required to establish a minimum level of
pre-positioned equipment for responding to pollution incidents.
In addition, in 1984 IMO convened a conference to consider a new instrument dealing
6
with compensation for accidents involving hazardous and noxious substances (HNS) but the
issues complexity delayed further work until 1996. The result of that effort was the
International Convention on Liability and Compensation for Damage in Connection with the
Carriage of Hazardous and Noxious Substances (HNS) by Sea 1996 which will make it possible
for up to 250 million SDR to be paid out to victims of disasters involving HNS (such as
chemicals). The HNS Convention was adopted by a Diplomatic Conference held in May 1996
under the auspices of the International Maritime Organization (IMO). The Convention aims to
ensure adequate, prompt and effective compensation for damage to persons and property, costs of
clean-up and reinstatement measures and economic losses caused by the maritime transport of
hazardous and noxious substances (HNS).
Hazardous and Noxious Substance is defined, in the OPRC-HNS Protocol, as any substance
other than oil which, if introduced into the marine environment is likely to create hazards to
human health, to harm living resources and marine life, to damage amenities or to interfere with
other legitimate uses of the sea7

Table 1: IMDG Classes of Substances and examples of each class.

Class
Number

Description

Examples

Explosives

Trinitrotoluene (TNT)

Gases

Acetylene

Flammable liquids

Ethyl Alcohol

Flammable solids,
self reactive substances,
water reactive substances

Calcium Carbide

Oxidising substances

Sodium Chlorate

Toxic and infectious

substances

Sodium Cyanide

Radioactive substances

Radium

Corrosives

Caustic Soda

Misc. dangerous substances

Polychlorinated
biphenyls

It should be noted Tthe definition of HNS in the compensation and liability convention is largely
based on lists of individual substances that have been previously identified in a number of Codes
designed to ensure maritime safety and prevention of pollution, these can in a number of cases
differ from the definition of HNS covered by the OPRC-HNS Protocol.
It should be noted that the response to HNS can be significantly different to the response to
marine oil spills; in the equipment used, the fate and effect of the HNS involved, the capability
and skills of the responders and strategies employed for a safe containment, recovery and
remediation of the incident.
The safety of personnel must be of the highest priority since a small amount of HNS has the
capability to cause a significant number of fatalities and/or cause long term environmental
damage in comparison to an oil spill.
With the growth of transmodal shipping there is the opportunity for a single shipping incident to
have a fire and/or a release on board the vessel involving HNS bulk cargo, ISO tank containers,
Ro-Ro vehicles and packaged cargo in containers together with a discharge of bunkers, eg the
Jolly Rubinio. In such an instance these will be dealt with in accordance with the appropriate
convention.

Classification
There are two major types of classification. One regulates transportation and the other provides
information on the behaviour of spilled products in the environment.
1-Classification on transportation

The Globally Harmonized System for Classification and Labelling of Chemicals (GHS) of the
United Nations (1992 Conference on Environment and Development) established classification
and hazard communication criteria (labelling and SDS) related to the intrinsic properties of the
chemical elements and compounds and their mixtures for all types of transportation.
For marine transportation of chemical products, the SOLAS and MARPOL 73/78 (Annex II and
III) conventions define the rules established by the IMO with the IBC Code for bulk liquids, the
IGC Code for bulk gases, the BC Code for bulk solids and the IMDG Code for hazardous
material being carried in package-form.
2-Classification on the behaviour of products
This type of classification relates to the behaviour of chemical compounds and their mixtures
when they spill into the environment and therefore become pollutants. They are divided into:
- classifications based on the physiochemical behaviour of products such as the Standard
European Behaviour Classification (SEBC) that helps to determine the short-term behaviour of
products spilled in seawater and to determine whether the products are gaseous, evaporative,
buoyant, soluble, sinkable and sub groups;
- classifications based on the biological behaviour of spilled products, the hazards to human
health and their impact on the environment. The risk profiles established by the Group of Experts
on the Scientific Aspect of Marine Environmental Protection (GESAMP) that define the notion
of marine pollutant are very useful.
There are strong links between the different classifications listed.

Part I
Roles and functions of eEntities which could be Potentially Involved in an HNS Pollution
Emergency and its aftermath
Chapter 1 Ship Owner
1.1

General rights and obligations

1.1.1 There may be a great diversity ofe ownership or possessory interests in a ship. The main
ones thatwhich a coastal State is likely to encounter in a marine pollution emergency are: the ship
owner, bareboat charterer, and manager or operator. The role of the shipowner is mainly
discussed here. The phrase shipowner is use throughout, although, In in some cases a ship may
be owned by more than one entity in equal or unequal shares. In such cases, there is usually an
agreement between the different various owners that one of them will take operational decisions
on behalf of all of them, and joint ownership only becomes of particular interest when recovery
of damages is sought.
1.1.2 Unless there is a bareboat charterer or manager of the ship, the ship owner is normally the
entity responsible for the operation of the ship, and the master will be the agent of the ship owner
for that purpose, at least until direct contact is established between the coastal State and the ship
owner.
1.1.3 The interests within the ship are to a considerable extent protected under international law
to a considerable extent. Not only is there freedom of navigation on the high seas, but ships are
also entitled to the right of innocent passage through the territorial sea. These rights of the ship
are, however, affected where a marine pollution emergency occurs which that threatens to or
actually causes damage to the coastal State or its territorial sea, so that the coastal State may, in
accordance with international law and its own internal law, take steps which interfere with those
freedoms.
1.1.4 The first concern of the ship owner in a marine pollution emergency will be to see that the
ship and all the life thereon is preserved, and that as much as possible of the cargo, which he has
contractually undertaken to deliver to the destination named in the bill of lading, is so delivered.
He is therefore concerned to about the protection of both his proprietary interest in the ship and
his contractual obligations concerning the cargo. If the ship is aground, he will want to arrange
for it to resume its voyage as soon as practicable, and this will rightly be the primary focus of his
immediate concern, rather than the effect of the polluting substance upon to the sea or coast, of
polluting substances which may have escaped or for which there may be threatening to escape.
Because he may be liable to pay compensation for pollution caused, the ship owner can be
expected, either through the master or directly from his officehowever, to liaise with all others
who are directly concerned with the position of the ship in the emergency, either through the
master or directly from his office..
1.1.5

1.1.5 In addition to the general rights and obligations concerning the operation of the
ship, the ship owner may have certain specific obligations concerning:
.1
(a) a document that is required and to be developed and carried on board for HNS
pollution preparedness and response;
.2
(b) notification of the HNS marine pollution emergency to the nearest coastal
State; (c)
.3
HNS pollution response and clean-up; and (d)
.4
compensation.

1.2

Shipboard MarineOil Pollution Emergency Plan

1.2.1 One of the salient documents required to be carried on board for HNS pollution
preparedness and response is a Shipboard MarineHNS Pollution Incident Emergency Plan.
1.2.2 Regulation 26 of Annex I of MARPOL 73/78 requires that oil tankers of 150 tons gross
tonnage or more and all ships of 400 tons gross tonnage or more carry an approved shipboard oil
pollution plan (SOPEP). The International Convention on Oil Pollution Preparedness, Response
and Co-operation, 1990, also requires such a plan for certain ships.
1.2.23 On 13 March 2000, IMOs Marine Environment Protection Committee (MEPC) adopted
an amendment to MARPOL that added a new regulation 16 to Annex II. The new provision
requires that, from 1 January 2003, a ship that is certified for the carriage of a noxious liquid
substance (NLS) in bulk must carry on board a contingency plan for the procedures to be
followed in the event of a spill or a probable spill of NLS, including procedures for notifying the
coastal state in whose waters the spill occurs. This plan is called a Shipboard Marine Pollution
Emergency Plan for Noxious Liquid Substances. This Annex II requirement is, in principle, the
same as that of regulation 26 of MARPOL Annex I, which already requires all ships carrying oil
in bulk, either as cargo or bunkers, to have a contingency plan, sometimes referred to as a
SOPEP, describing procedures to be followed in the event of an oil spill.
1.2.34 Because of the similarity between the two requirements, IMO recognized that ships
certified for NLS but also carrying oil either as cargo or bunkers would need to have both plans
on board, and agreed that the two could be combined into a single plan called simply a Shipboard
Marine Pollution Emergency Plan (SMPEP).
1.2.45 When IMO created the requirements for the SMPEP, it was felt appropriate to incorporate
some of the additional measures into the requirements for new Shipboard Oil Pollution
Emergency Plans. Therefore, a new model for a SOPEP has also been created, although any ship
that already has a SOPEP which has been approved by its administrationSOPEP, which has been
approved by its administration, need not revise that plan. In effect, therefore, only new SOPEPs,
probably for new ships or perhaps where a change of owner or registration has occurred, will be
required to incorporate the new measures.
1.2.56 The latter should be combined with a SOPEP, since most of their contents are the same
and the combined plan is more practical than two separate ones in case of an emergency. To
make it clear that the plan is a combined one, it should be referred to as a shipboard marine
pollution emergency plan (SMPEP).
1.2.67 From 14 June 2007, ships flying the flag of a Party to the OPRC-HNS Protocol must
carry a pollution emergency plan to deal specifically with incidents involving hazardous and
noxious substances. The new requirement is one of a list of measures included in the Protocol on
Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious
Substances (OPRC-HNS Protocol), of 2000, which entered into force on 14 June 2007.
1.2.78 The Shipboard Marine Pollution Emergency Plan (SMPEP), as required under
MARPOL for ships carrying oil and noxious liquid substances, should satisfy requirements for a
Pollution Incident Emergency Plan under the OPRC-HNS Protocol in Member States. Ships
will be required to carry a shipboard pollution emergency plan to deal specifically with incidents
involving HNS, which are defined as any substance other than oil which, if introduced into the
marine environment is likely to create hazards to human health, to harm living resources and
marine life, to damage amenities or to interfere with other legitimate uses of the sea.
1.2.89 The Guidelines for the Development of Shipboard Marine Pollution Emergency Plans
have been developed by IMO to help Administrations and ship owners meet these requirements.

Specimen formats are included. The Shipboard Marine Pollution Emergency Plans includes
Guidelines for the development of Shipboard Oil Pollution Emergency Plans (SOPEP)
(resolution MEPC.54(32), as amended by resolution MEPC.86(44) and Guidelines for the
development of Shipboard Marine Pollution Emergency Plans for Oil and/or Noxious Liquid
Substances (resolution MEPC.85(44)). In addition, MEPC.6/CIRC.8 (ANNEX 2 for SOPEP)
List of National Operational Contact Points Responsible for the Receipt, Transmission and
Processing of Urgent Reports on Incidents involving Harmful Substances, Including Oil from
Ships to Coastal States may be helpful. This information enables compliance with Regulation 26
of Annex 1 of MARPOL 73/78 which, inter alia, requires that shipboard oil pollution emergency
plans (SOPEP) shall contain a list of authorities or persons to be contacted in the event of an oil
pollution incident.
1.2.910
The International Management Code for the Safe Operation of Ships and for
Pollution Prevention (ISM Code), made mandatory on 1 July 1998 by amendments to the
International Convention for the Safety of Life at Sea, 1974 (SOLAS 1974) also may assist. The
purpose of this Code is to provide an international standard for the safe management and
operation of ships and for pollution prevention. The objectives of the Code are to ensure safety
at sea, prevention of human injury or loss of life, and avoidance of damage to the environment, in
particular, to the marine environment, and to property. Under the Code every Company should
develop, implement and maintain a Safety Management System (SMS) which includes the
following functional requirements:
.1

a safety and environmental protection policy;

.2

instructions and procedures to ensure safe operation of ships and protection of the
environment in compliance with relevant international and flag State legislation;

.3

defined levels of authority and lines of communication between, and amongst,

shore and shipboard personnel;

.4

procedures for reporting accidents and non-conformities with the provisions of

this Code;

.5

procedures to prepare for and respond to emergency situations; and

.6

procedures for internal audits and management reviews.

1.2.101
The Code requires a link between the company and those on board, every
company, as appropriate, should designate a person or persons ashore having direct access to the
highest level of management. The responsibility and authority of the designated person or
persons should include monitoring the safety and pollution prevention aspects of the operation of
each ship and to ensure that adequate resources and shore based support are applied, as required.
The Code requires the establishment of procedures for the preparation of plans and instructions
for key shipboard operations concerning the safety of the ship and the prevention of pollution.
The various tasks involved should be defined and assigned to qualified personnel. The Code also
requires the establishment of procedures to identify, describe and respond to potential emergency
shipboard situations; program for drills and exercises to prepare for emergency actions and
measures ensuring that the Companys organization can respond at any time to hazards, accidents
and to that ship. In the ISM Code, the Company means the owner of the ship or any other
organization or person such as the manager, or the bareboat charterer, who has assumed the
responsibility for operation of the ship from the ship owner and who, on assuming such
responsibility, has agreed to take over all duties and responsibility imposed by the Code
(regulation IX/1 of SOLAS 1974 and paragraph 1.1.2 of the ISM Code).

1.3

Notification

1.3.1 The ship owner may be obliged by an applicable regulation (under the law of the flag
State or of the coastal State, either or both of which may derive from international conventions to
which these States are party) to notify the nearest coastal State of the HNS marine pollution
emergency which has arisen. Normally this obligation will fall upon the master of the ship, but if
the ship has been abandoned, or if the masters report is incomplete, then the obligation on the
owner, charterer, manager or operator [article 42)] to make a report may arise. The obligation to
report, which Parties to MARPOL undertake to implement in their internal law for ships
registered in their territory, is contained in Protocol I of MARPOL 1973 Convention, together
with Assembly resolution A.851 (20), as well as Article 4 of OPRC 1990.
1.4

Pollution Response and Clean-up

1.4.1 The obligation of a ship owner to take HNS pollution response and clean-up measures
depends upon the law of the State where the pollution occurs.
1.4.2 The International Convention on Salvage, 1989 (1989 Salvage Convention), may also
apply if a salvage contract is entered into. The 1989 Salvage Convention entered into force
on 14 July 1996.
1.4.3 It is understood that under most insurance contracts and under the general principles of
many systems of insurance law, even though the ship owner is insured, the ship owner should act
as a prudent person without insurance. Therefore, the ship owner should act within his or her
capabilities so as to minimize potential risks. The clause in the insurance contract which
enshrines this principlecontract, which enshrines this principle, is often called the sue and
labour clause. A ship owner should not act in a manner that increases the risks whichrisks,
which the insurer has underwritten. Therefore coastal States should find the ship owner cooperative in agreeing to any measures the coastal State wishes to put in place which would have
the effect of reducing risks, thus reducing the ship owners ultimate potential liability. In any
event, whatever response and clean-up assistance the ship owner is able to muster, the ship owner
should normally have available the resources, the technical advice and services of the liability
underwriter (usually a P&I Club). In practice, the liability underwriter is usually very closely
involved.
1.4.4 Under article 8(2) of the 1989 Salvage Convention, which entered into force
on 14 July 1996, the owner is under a duty to the salvor to co-operate fully with him during the
course of the salvage operations and, in so doing, to exercise due care to prevent or minimize
damage to the environment.
1.4.5 These contractual obligations, if they apply, are owed to different people the first, to the
liability underwriter, and the second, to the salvor. None are owed to the coastal State, although
the coastal State may well become involved in the owners implementation of them.
1.4.6 The ship owner may also incur legal obligations to the coastal State whose waters are
being polluted. These legal obligations can conflict with the ship owners contractual obligations.
In these cases, it is very important to clarify who will pay the costs involved for any response
action required by the coastal States.

Chapter 2 The Ship Operator

2.1
The ship may be owned by one entity, such as a bank or other financial institution, and
leased or bareboat chartered to another entity. This is a common method of financing, whereby
the shipping company which wants to use the ship has the possession of it but the bare legal
ownership resides in the institution which puts up the money for its purchase. The relationship
between the ship owner and the lessee or bareboat charterer is governed by a contract of lease or
bareboat charter. It should be noted that the bareboat charterer will be required to comply with
the requirements of the ISM Code.
2.2
It is the bareboat charterer who has the possession of the whole ship, and it is therefore he
who is responsible for the commercial and operational management of the ship, and not the ship
owner. Thus, where this type of arrangement is in operation, the master will not be the agent of
the ship owner but the agent of the bareboat charterer, so that for most purposes one can
interchange bareboat charterer for ship owner. The notable exception concerns the liability of the
ship owner under the 1992 Civil Liability Conventions, which cannot be directly assumed by any
other person. The bareboat charterer will seek any right of limitation which he may have under
the relevant law, such as the Convention on Limitation of Liability for Maritime Claims, 1976
(LLMC 1976).
2.3
It should be noted that the 1989 Salvage Convention places an obligation on the owner to
co-operate with a salvor and in so doing to exercise due care to prevent or minimize damage to
the environment. The 1989 Salvage Convention does not define owner, and so it is left to each
State Party to define it in its own legislation. Such legislation may or may not provide that a
bareboat charterer shall be in the same position as an owner in this respect.
2.4
Another common arrangement is the appointment of ship managers or operators who run
the day-to-day non-commercial ships operation. Managers would normally be responsible for
providing the ship with officers and crew and ensuring that the ship is maintained and insured.
Operators have a similar, but lesser, role. In each case the ship owner (or bareboat charterer)
retains commercial control of the ship and takes the commercial risks and benefits of its
operation, deciding whether to trade the ship directly for his own benefit or to charter the ship
out. Where there is a manager or operator who employs the master, the master will still be the
agent of the ship owner (or bareboat charterer) for purposes of dealing with the operation of the
ship and for salvage purposes. However, the master will additionally represent his employer, and
his act or neglect may make his employer liable for compensation. Managers and operators
usually enjoy the same rights to limit their liability as ship owners and bareboat charterers.
Chapter 3 The Master
3.1
The master is the officer aboard ship entrusted with the prosecution of maritime
operations. The Master is responsible for the safety of the ship, the cargo and all personnel
aboard, and he will take such action as he can to achieve this as soon as the incident giving rise to
the emergency occurs. He will give priority to saving life. His responsibility and authority are
further described in the ISM Code.
3.2
If the ship is in distress, the master will be responsible for ensuring that a distress signal is
sent and, under regulation V/33(2) of SOLAS 2004, he has the right to requisition any ship with
which he is in contact and which he considers best able to render him assistance, whereupon the
master of the requisitioned ship must proceed with all speed to the assistance of the distressed
ship. In addition, under article 10 of the International Convention on Salvage 1989 (1989
Salvage Convention), every master is bound to render assistance to any person found in danger of
being lost at sea, so far as he can do so without serious danger to his ship and persons thereon.

3.3
The master is usually the person responsible for making notification to the nearest coastal
State of the incident giving rise to the marine pollution
3.4
The master is in most, if not all, systems of law the agent of the ship owner in the
navigation and shipboard management of the ship. Where the cargo is in danger, he is usually
also deemed the agent of the cargo owner insofar as any action to save the cargo is taken. Coastal
States may therefore deal with the master in confidence that his word will bind the ship owner
and cargo owner insofar as the security of ship and cargo are concerned when their owners are
themselves not in contact with the coastal State.
3.5
The agency of the master is the legal basis for the law of salvage. Therefore, the master is
able to reach agreement with a salvor himself. The master will send out distress calls as
appropriate after the incident occurs, and he will call specifically for tugs if that is what he needs.
Even if he does not call specifically for tugs, any salvage tug in the vicinity hearing a distress
message is likely to try to contact the ship and may proceed in its direction on speculation. The
salvage tug will attempt to secure an agreement for its services with the master. This would
usually be on the basis of a Lloyds Open Form, but if the situation permits, the master will
usually attempt to negotiate a form of daily hire contract with the tug operator.
3.6
Under article 6(2) of the 1989 Salvage Convention, the authority of the master to
conclude a contract for salvage operations with a salvor on behalf of the owners of the ship and
the cargo is given effect in the laws of all States Parties thereto. There is also a new dimension to
his legal responsibilities: under article 8(2), the master is under a duty to the salvor to co-operate
fully with him during the course of the salvage operations and, in so doing, to exercise care to
prevent or minimize damage to the environment.
3.7
In a HNS marine pollution emergency, a master will often attempt to be in direct contact
with his ship owners office once the emergency has arisen, so that the shore side management
may become involved in the decisions which are apparently being made by the master alone.
However, it is worth noting that, whether the master is in contact with his shore side office or
not, his decisions on the protection of the marine environment should not be unduly influenced
by instructions given by his shore side office, taking into account that the protection of the
marine environment must be the masters prime concern in all situations which arise and that
economic and other pressures on the master should not at any time interfere with the decisions he
must take in that regard.
3.8
It was for this reason, therefore, that the IMO Assembly adopted resolution A.443(XI), in
November 1979, on decisions of the shipmaster with regard to maritime safety and marine
environment protection after the Amoco Cadiz incident in 1978. The resolution invites
Governments to take necessary steps to safeguard the master in the proper discharge of his
responsibilities in regard to maritime safety and the protection of the marine environment by
ensuring that:
.1

the shipmaster is not constrained by the ship owner, charterer or any other person
from taking in this respect any decision which, in the professional judgment of the
shipmaster, is necessary; and

.2

the shipmaster is protected by appropriate provisions, including the right of

appeal, contained in, inter alia, national legislation, collective agreements or
contracts of employment, from unjustifiable dismissal or other unjustifiable action
by the ship owner, charterer or any other person as a consequence of the proper
exercise of his professional judgment.

3.9
Since that time several new resolutions have been introduced which provides additional
guidance, notably Assembly resolution A.949(23) adopted in December 2003, which provides
guidelines on places of refuge for ships in need of assistance and Assembly resolution A.987(24),
adopted in December 2005, providing guidance on the fair treatment of seafarers in the event of a
maritime accident. It should also be noted that when a marine pollution emergency has arisen, the
masters considerable responsibility may very well lie heavily upon him and the pressure on him
may be very great. He may very well feel personally responsible for what has happened. In
many cases, an inquiry may follow which could result in his licence being suspended or revoked.
In an HNS incident there may be considerable danger in staying aboard ship. It is important that
anyone dealing with the master during or in the immediate aftermath of the marine pollution
emergency is aware of these possibilities and acts accordingly.
Chapter 4 The Cargo Owner
4.1
The owner of the cargo at the time of the HNS marine pollution emergency will not
necessarily be either the shipper or the consignee, for the ownership may have changed hands
once or more than once since the ship sailed. Initially, therefore, it may not be easy to establish
who owns the cargo, although the chain of enquiry will start with the shipper named in the bill of
lading, a copy of which will be retained on board by the master. Bulk HNS cargoes tend to be
owned by a single entity, or perhaps by a few different entities. Packaged HNS cargoes, on the
other hand, are more likely to be owned by a greater variety of different entities.
4.2
The individual cargo owner would not normally be liable to compensate any person
suffering pollution damage, and certainly there is no international legal regime which makes
provision for the liability of the cargo owner for such damage. Once the HNS cargo owner
becomes aware of the marine pollution emergency, his interest will lie mainly in ensuring that as
much as possible of his cargo is actually delivered to the port of destination. This is the task
which has been delegated to the ship owner, and, under the bill of lading or other contract
governing the carriage of the cargo by sea (such as a charter-party), this responsibility will
remain with the ship owner throughout the marine pollution emergency unless and until the ship
owner abandons the voyage. For this reason the cargo owner does not normally feature
prominently in a marine pollution emergency.
4.3
The cargo owners interest extends also to a liability to contribute in general average and
salvage. In respect of both of these liabilities, he will normally be insured by the cargo
underwriter. Since the cargo owner (or the cargo underwriter, using the right of subrogation) will
look primarily to the ship owner for compensation for any loss or contamination of the cargo, it
can be readily appreciated that the interests of the ship owner and the cargo owner are somewhat
in tension.
4.4
The cargo owners knowledge of the nature of the cargo will vary enormously according
to the type of entity concerned. If the cargo owner is an end-user of the type of cargo involved,
he may very well have technical staffs that are familiar with the behavioural characteristics of the
cargo, which is almost invariably the source of the marine pollution emergency. Therefore the
cargo owner may be someone to whom the coastal State or even the ship owner may turn for
advice about the cargo and how to handle it in the emergency. If the cargo owner is a trading
company which does not use the cargo itself, such technical expertise is less likely to be available
from that source and it may have to be sought from the manufacturer of the cargo or from an
industry body.
4.5
One particular aspect, where cargo owners have become involved in the marine pollution
emergency, concerns the lightering of the stricken ship. It is not uncommon for the cargo owner
particularly an end-user to assist in the identification of a suitable lightering ship to be hired for
the job.

4.6
Under article 8(2) of the 1989 Salvage Convention, if a salvage contract to which that
Convention applies is entered into, the owner of any property in danger including the cargo
owner and the owner of freight at risk is under a duty to the salvor to co-operate fully with him
during the course of the salvage operations and, in so doing, to exercise care to prevent or
minimize damage to the environment.
Chapter 5 The Flag State
5.1
The major effects of the flag States role are felt to take place before the marine pollution
emergency, for it is the flag State which is responsible for enacting and enforcing all design and
equipment standards, all safety standards, and all crew certification and training; issuing
certificates provided for by international conventions; setting minimum staffing levels and
standards relating to the prevention of collisions and the prevention of pollution; and exercising
jurisdiction and control over the ship while it is on the high seas. However, there are obligations
on a flag State after a marine casualty has occurred.
5.2
Under article 12 of MARPOL 1973 Convention, the flag State is obliged to discover the
facts of a casualty in which one of its ships has been involved if the casualty has produced a
major deleterious effect upon the marine environment, so that it can determine whether any
change in the regulatory regime is necessary. Most States with sizeable fleets have made
provisions for conducting an investigation when there is loss of life, and, under regulation 1/21 of
SOLAS 1974 and article 23 of LL 1966, a flag State must undertake to conduct an investigation
of any casualty when it judges that such an investigation may assist in determining what changes
in SOLAS 1974 and LL 1966, might be desirable. Apart from SOLAS 1974, LL 1966 and
MARPOL, no other international conventions currently in force make extensive provisions for
the holding of marine investigations.
5.3
Under article 94(7) of the United Nations Convention on the Law of the Sea, 1982
(UNCLOS), which entered into force on 16 November 1994, the flag State is under a duty to
hold an inquiry into every marine casualty, including where there has been serious damage to
ships or installations of another State or to the marine environment, and the other State involved
is to co-operate in such an inquiry.
5.4
Under article 5(3) of the MARPOL 1973 Convention, the flag State is entitled to receive
notification if any other State Party denies the ship entry to its ports or offshore terminals or takes
any action against the ship for the reason that it does not comply with MARPOL.
5.5
Under article 6 of MARPOL 1973 Convention, the flag State must co-operate with other
Parties in the detection of violations and the enforcement of the provisions of the Convention; if
presented with evidence of a violation, the flag State must investigate the matter and, if satisfied
that there is sufficient available evidence for proceedings to be brought for a violation, it must
instigate such proceedings. Similar provisions exist in regulation 1/19 of SOLAS 1974 as
modified by the 1978 SOLAS Protocol, article 21 of LL 1966 and article X of the International
Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978
(STCW 1978). Where a coastal State presents a flag State with evidence of a violation, it may
contact the flag State with regard to the flag State investigation, and offer assistance with oral or
written evidence at any flag State legal proceedings.
5.6
SOLAS 1974 was amended in May 1994 at a SOLAS Conference to add a new
chapter IX to the Convention which is designed to make mandatory the ISM Code, which was
adopted by the IMO Assembly in November 1993 by resolution A.741(18). The ISM Code takes
into account that the most important means of preventing maritime casualties and pollution of the
sea from ships is to design, construct, equip and maintain ships and to operate them with properly
trained crews in compliance with international conventions and standards relating to maritime

safety and pollution prevention. The Code provides an international standard for the safe
management and operation of ships and for pollution prevention (see Appendix 1 of the Code).
5.7
Chapter IX of SOLAS 1974 applies to ships, regardless of the date of construction, as
follows:
.1

passenger ships including passenger high-speed craft, not later than 1 July 1998;

.2

oil tankers, chemical tankers, gas carriers, bulk carriers and cargo high-speed craft
of 500 gross tonnage and upwards, not later than 1 July 1998; and

.3

other cargo ships and mobile offshore drilling units of 500 gross tonnage and
upwards, not later than 1 July 2002.

Chapter 6 The Coastal State

6.1
Parties to the OPRC-HNS Protocol are required to establish measures for dealing with
pollution incidents by HNS and more specifically the following is required from them:
.1

national and regional systems for preparedness and response: Parties are required
to establish national systems for responding effectively to pollution incidents and
to establish a national contingency plan for preparedness and response. In
addition, Parties are required, either individually or through co-operation, to
establish equipment stockpiles, training and response exercise programs and to
co-operate in the field of information exchange;

.2

emergency plans and reporting: Ships carrying hazardous and noxious liquid
substances are required to carry a shipboard pollution emergency plan to deal
specifically with incidents involving HNS; and

.3

enhancement of international co-operation in pollution response, technical

co operation and assistance, co-operation in R&D and information services.

6.2
Whether a coastal State is a Party to the HNS Protocol 2000 or not, in general, the
different roles of the coastal States various competent authorities will be defined in its
constitution and in its marine pollution contingency plan. These plans vary from State to State,
and the considerations which should be taken into account in preparing them should include
those contained in this document. Here the roles and functions of the coastal State authorities
will be discussed as one national authority to deal with the marine pollution emergency, and
referred to as the coastal State.
6.3
When faced with a marine pollution emergency, the coastal State must look both to its
international rights and duties and to its national position. Insofar as the former are concerned,
every State has a general duty under customary international law to warn other States of a marine
pollution threat of which it becomes aware and which is likely to affect them, and this is
reinforced by article 8(3) of MARPOL 1973 Convention, which requires States to notify the flag
State and any other State which may be affected.
6.4
Article 5 of OPRC 1990 is to similar effect. Principle 21 of the 1972 Declaration of the
United Nations Conference on the Human Environment went so far as to say that:
States have, in accordance with the Charter of the United Nations and the principles of
international law ... the responsibility to ensure that activities within their jurisdiction and
control do not cause damage to the environment of other States or of areas beyond the
limits of national jurisdiction.

6.5
In addition, articles 194(2) and 198 of UNCLOS contain a specific obligation to notify
other States which the coastal State deems likely to be affected. Therefore, once a marine
pollution emergency is actually within the jurisdiction and control of a coastal State, the coastal
State must consider the likely effect on other States and take the appropriate action, which, at the
bare minimum, is to notify those likely to be affected.
6.6
Such general obligations may have been given greater precision in an intergovernmental
regional agreement which commits the groups of States who are Party thereto to co-operate in
responding to major incidents of marine pollution which are likely to affect more than one State.
If a coastal State is a Party to one of these, then its provisions should be implemented. Under
such an agreement, a coastal State is usually under a duty to report marine pollution incidents to
neighbouring States which may be affected, to take the necessary response actions, and to
monitor the situation. Other Parties to the agreement are usually obliged to use their best
endeavours to respond to requests for assistance which may be made by the coastal State affected
and to co-operate in pollution response action. Any regional mutual aid centre which may have
been established pursuant to such a regional agreement will be able to assist States Parties in the
task of implementing such an agreement in the actual marine pollution emergency, primarily by
providing technical advice and liaising with other sources of assistance. There may also be a list
of equipment stockpiles established by oil companies or groups of countries which a coastal State
may be able to use.
6.7
If the coastal State chooses to focus its attention on its own response to the marine
pollution emergency, then one question which may arise is the extent to which the coastal State
may take action against the wishes of the master or other parties who have interests in the ship or
cargo. Ideally, the coastal State will have considered the international law position on
intervention in conjunction with the preparation of its contingency plan before the marine
pollution emergency arises, and will have enacted legislation or made other satisfactory provision
for the taking of appropriate steps when an emergency arises. Some coastal States have chosen to
establish marine pollution emergency funds whichfunds, which provide for some independence
in these decisions.
6.8
The International Convention relating to Intervention on the High Seas in Cases of Oil
Pollution Casualties, 1969 (1969 Intervention Convention), which gives more precisely defines
the rights existing under customary international law. The 1969 Intervention Convention deals
only with rights to intervene on the high seas with regard to oil but may be invoked since
maritime disasters involving the release of HNS often also include the release of bunker or other
oils. The Convention does not address territorial waters, since the position on internal waters is a
matter purely for the domestic law of the coastal State. However, under customary international
law the position in territorial waters is similar to that adopted in the 1969 Intervention
Convention.
6.9
The 1969 Intervention Convention permits the coastal State to intervene on the high seas
against the wishes of the owner of the ship and the cargo to the extent necessary to prevent,
mitigate or eliminate grave and imminent danger to the coastline or related interests from
pollution or the threat of pollution of the sea, following upon a maritime casualty, which may
reasonably be expected to result in major harmful consequences. The measures taken must be
proportionate to the damage actual or threatened, and if they exceed this the coastal State must
pay compensation to those who have suffered thereby. Also, the right to intervene must be
preceded by due consultation with States or persons whose interests are affected, except in cases
of extreme urgency.
6.10 The related interests in protection of which intervention is possible include tourism,
fishing and other marine resources and wildlife, so that intervention under this Convention is

possible on purely environmental grounds. IMO maintains a list of experts under the 1969
Intervention Convention who may be called upon for consultation in such an emergency.
6.11 One option for intervention by a coastal State is the requirement for salvage services to be
accepted or provided, or even to undertake them itself. There are certain practical problems in
implementing such an imposed requirement where the responsible Parties are unwilling to take
action. However, articles 5 and 9 of the 1989 Salvage Convention recognize that States may wish
to control or provide such services themselves by providing that nothing in the Convention shall
affect provisions whichprovisions, which the coastal State may have made in this respect.
However, salvors carrying out such services under the control of a public authority are still
entitled to avail themselves of the Conventions rights and remedies.
6.12 In fact it is relatively unusual for the coastal State to exercise the right to intervene or to
control salvage operations. The coastal State has an absolute right in international law to deny a
ship entry to any of its ports or offshore installations, and very often this is the only thing the
coastal State will want to do that causes disagreement. In most cases, co-operation between the
master and the coastal State achieves all that is necessary, and the coastal States task of
co-ordinatingcoordinating and arranging all the pollution response and clean-up actions under its
contingency plan is not hindered by the ship or cargo interests.
6.13 Under article 11 of the 1989 Salvage Convention, Parties to the Convention have to take
into account the need for co-operation between salvors and others when regulating or deciding
upon salvage matters, such as admittance into ports of ships in distress or the provision of
facilities to salvors, so that operations to save life or property in danger, as well as preventing
damage to the environment, are taken into account.
6.14 Extending port State control to operational requirements is seen as an important way of
improving the efficiency with which international safety and anti-pollution treaties are
implemented.
6.15 Therefore, a number of IMO conventions contain provisions for port State control
inspections, but previously these have been limited primarily to certification and the physical
condition of the ship and its equipment. However, regulation 8A(11) of Annex I of the MARPOL
1973 Convention, which entered into force on 3 March 1996, makes it possible for ships to be
inspected when in the ports of other Parties to MARPOL to ensure that crews are able to carry
out essential shipboard procedures relating to marine pollution prevention. The procedures for
the control of operational requirements relating to the safety of ships and pollution prevention are
contained in Assembly resolutions A.787(19) which refers to Procedures for port State control
and A.882(21) l which refers to the amendment to the procedures for port State control.
Chapter 7 The Salvors
7.1

Professional Salvors

7.1
The majority of professional salvors are members of the International Salvage Union
(ISU). This organization represents some 57 salvage companies based in 30 different countries
around the world. Some of these salvage companies have tugs and other salvage equipment at a
number of different ports and areas throughout the world and a few of the companies have
salvage tugs stationed at various strategic locations. There are also a number of salvage tugs
maintained at salvage stations in certain coastal States as a result of long term contracts entered
into between their owners and the maritime authorities in those States.
When a salvage company is engaged to assist a marine casualty they will be able to bring
expertise to the task which is unique to the marine industry. Their business is not without risks,
and frequently the skills and efforts of salvage officers have saved ships and their cargoes from

extreme situations. Some companies have the ability to mobilize equipment, either from their
own resources or from elsewhere, together with expert personnel at very short notice.
7.2
The number of salvage tugs in operation has significantly decreased over the years, and
those that remain are frequently engaged in commercial ocean towage. However, salvage of
casualties is still normally undertaken on traditional no cure no pay terms, whereby, if
successful, the tug owner/salvage company will earn a reward based upon a number of factors,
including the risks from which the property was saved, the time occupied in the services, the
dangers to the salvors property and personnel, the value of the salved property, the skills shown
by the salvors and the expenses incurred by them in rendering the services. The 1989 Salvage
Convention entered into force on 14 July 1996 enshrining these principles and introducing
substantial changes to the salvage industry with respect to the protection of the environment and
adequate incentives for those providing salvage services.
7.3
On a traditional no cure no pay basis, if no property is saved, the salvor receives no
reward for his efforts. This basis of working obviously carries with it considerable financial risk,
and a salvor therefore expects to be rewarded far more generously than on normal commercial
terms. The 1989 Salvage Convention stipulates that the reward shall be fixed with a view to
encouraging salvage operations, taking into account the following criteria without regard to the
order in which they are presented... (1(a) to (j) of article 13 or the 1989 Salvage Convention).
Statistical data collected and published by the ISU has shown that the average revenue from
salvage services carried out under no cure no pay terms since 1978 has averaged just under
8% of the property values salved. However, on a traditional no cure no pay basis, the award
cannot exceed the value of the property salved.
7.4
Salvage services rendered under other forms of commercial contract, i.e., Daily Rate or
Lump Sum, Towage Contract do not call for elaboration here. Professional salvors will not
normally work on such a basis for normal salvage services. If a non-salvage commercial contract
is utilized, there will have been negotiation between the parties, who may include the coastal
State. No special limiting considerations are therefore relevant to marine pollution emergencies
in such a case. Salvage services rendered under no cure no pay terms do, however, under
article 13(b)b give rise to important considerations for the handling of a marine pollution
emergency.
7.5
The contract that salvors normally offer to the master and/or owners of a ship involved in
a marine casualty is Lloyds Standard Form of Salvage Agreement, a contract subject to English
law. This form of salvage agreement celebrated its centenary in 2008 and the current edition,
LOF 2000, incorporates the provisions of the 1989 Salvage Convention which were enacted into
English law in 1995. The services to be provided to the casualty are set out in Clause A of LOF
2000. The contractors basic obligation is to use their best endeavours to salve the property,
(ship, cargo, bunkers and freight), and take the property to a designated location, or in the
absence of an agreement, to a place of safety. The Agreement provides for arbitration in London
before one of the panel of Lloyds salvage arbitrators, who are all lawyers experienced in marine
salvage claims.
7.6
It was the 1980 edition of Lloyds Form, which first introduced an obligation on the
salvor to prevent the escape of oil whilst performing the salvage services. Subsequently the 1989
Salvage Convention introduced a definition of damage to the environment as substantial
physical damage to human health or to marine life or resources in coastal or inland waters or
areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major
incidents (see article 1(d) of the 1989 Salvage Convention). In reality, salvors have always made
considerable efforts during any salvage operations to avoid or minimize pollution damage and to
co-operate with national and/or local authorities.

7.7

7.7

LOF 90, LOF 95 and the latest edition, LOF 2000, all incorporate the obligation imposed
upon the salvor under the 1989 Salvage Convention that whilst performing the salvage
services the Contractors shall also use their best endeavours to prevent or minimize
damage to the environment.
7.1.1 The majority of professional salvors are members of the International Salvage
Union (ISU). This organization represents some 52 companies based in 30 different
countries around the world. The salvage companies have tugs and other salvage
equipment at a number of different ports and areas throughout the world and some of the
companies have salvage tugs stationed at various strategic locations. Some salvage tugs
are being maintained at salvage stations in certain coastal States as a result of
arrangements made between their owners and other commercial interests or the
authorities in those States. When a salvage company is engaged to assist a marine
casualty they will be able to bring expertise to the task which is unique to the marine
industry. Their business is not without risks, and frequently the skills and efforts of
salvage officers have saved ships and their cargoes from extreme situations. Some
companies have the ability to mobilize equipment, either from their own resources or
from elsewhere, together with expert personnel at very short notice.

7.1.2 The number of salvage tugs in operation has significantly decreased in recent years, and
those that remain are frequently engaged in ocean towage of rigs, barges, etc., on commercial
terms. However, salvage of casualties is still normally undertaken on traditional no cure no
pay terms, whereby, if successful, the tug owner/salvage company will earn a reward based
upon a number of factors, including the risks from which the property was saved, the time
occupied in the services, the dangers to the salvors property and personnel, the value of the
salved property, the skills shown by the salvors and the expenses incurred by them in rendering
the services. The 1989 Salvage Convention entered into force on 14 July 1996 enshrining these
principles and introducing substantial changes to the salvage industry with respect to the
protection of the environment and adequate incentives for those providing salvage services.
7.1.3 On a traditional no cure no pay basis, if no property is saved, the salvor receives no
reward for his efforts. This basis of working obviously carries with it considerable financial risk,
and a salvor therefore expects to be rewarded far more generously than on normal commercial
terms. The 1989 Salvage Convention stipulates that the reward shall be fixed with a view to
encouraging salvage operations, taking into account the following criteria without regard to the
order in which they are presented... (1(a) to (j) of article 13 or the 1989 Salvage Convention).
Statistical data collected and published by the ISU have shown that the average revenue from
salvage services carried out under no cure no pay terms has averaged just over 6% of the
property values salved. However, on a traditional no cure no pay basis, the award cannot
exceed the value of the property salved.
7.1.4 Salvage services rendered under other forms of commercial contract, i.e., Daily Rate or
Lump Sum, Towage Contract do not call for elaboration here. Professional salvors will not
normally work on such a basis for normal salvage services. If a non-salvage commercial contract
is utilized, there will have been negotiation between the parties, who may include the coastal
State. No special limiting considerations are therefore relevant to marine pollution emergency in
such a case. Salvage services rendered under no cure no pay terms do, however, under
article 13(b)b give rise to important considerations for the handling of a marine pollution
emergency.
7.1.5 The contract that salvors normally offer to the master and/or owners of a ship involved in
a marine casualty is the current version of Lloyds Standard Form of Salvage agreement. This
form was issued by Lloyds following the enactment of the 1989 Salvage Convention into
English law on 14 July 1996. The services to be provided to the casualty are set out in Clause A
of LOF 2000. The contractors basic obligation is to use their best endeavours to salve the
property and take property to a designated location or in the absence of an agreement to a place
of safety. The Agreement is governed under Clause J by English law and provides for arbitration

in London before one of the panel of Lloyds salvage arbitrators, who are all lawyers experienced
in marine salvage claims.
7.1.6 LOF 1995 extended an obligation upon the Contractor originally contained in the 1980
edition of Lloyds Form, which was to prevent or minimize damage to the environment. The
1989 Salvage Convention defines damage to the environment as substantial physical damage
to human health or to marine life or resources in coastal or inland waters or areas adjacent
thereto, caused by pollution, contamination, fire, explosion or similar major incidents (see
article 1(d) of the 1989 Salvage Convention). In reality, salvors have always made considerable
efforts during any salvage operations to avoid pollution and to co-operate with national and/or
local authorities.
7.1.7 LOF 2000 extends an obligation upon the Contractor set out under Clause B to protect the
environment, namely: Environmental Protection: While performing the salvage services the
Contractors shall also use their best endeavours to prevent or minimize damage to the
environment.
7.1.8 On occasion, professional salvors may need to engage the services of other companies to
assist them in the provision of salvage services to the casualty. No company can expect to have
all the ships, other floating plant, equipment and personnel immediately available at the site of a
casualty. In such situations the salvage company will sometimes need to sub-contract assistance
from other organizations. These sub-contracted services may range from the provision of
additional tugs, crane vessels, anti-pollution ships and equipment through to lightering ships.
Some of these units could be entitled to a salvage award in their own right. However, where a
professional salvor has been engaged, he can be expected to organize such assistance on terms
which will not lead to a proliferation of salvage claims. This may involve utilizing, for example,
the ISU Sub-Contract Award Sharing Agreement, or other daily rate or lump sum terms.
7.8
Salvors were provided with an incentive to provide salvage services for low value high
risk operations such that they would be recompensed in the event of successfully preventing or
minimizing damage to the environment by a Special Compensation being incorporated into the
Lloyds Open Form, this provided for the payment of salvage expenses even if the property itself
was not saved. However, because security was not demanded of the owner until after the salvage
was completed, because of the lack of clarity on the definition of coastal, areas adjacent
thereto, substantial and the threat of damage to the environment many awards under this
clause were subject to extensive litigation while these points were argued and the amount of the
award was assessed. Salvors became discouraged and were reluctant to provide salvage services
in low reward operations. A simpler and more effective system was required to remove these
anomalies.
7.9
The answer was the introduction of the Special Compensation P&I Clause (SCOPIC) on
1 August 1999. This clause, which is supplementary to any Lloyds Form of Salvage Agreement
No Cure No Pay removed the need for the salvor to prove there was a threat of damage to the
environment and provided the salvor with the incentive that security was placed by the Owners
within two working days of the SCOPIC Clause being invoked and established a means of
assessing his reward by means of a set tariff of rates for equipment and personnel.
7.10 On occasion, professional salvors may need to engage the services of other companies to
assist them in the provision of salvage services to the casualty. No company can expect to have
all the ships, other floating plant, equipment and personnel immediately available at the site of a
casualty. In such situations the salvage company will sometimes need to sub-contract assistance
from other organizations. These sub-contracted services may range from the provision of
additional tugs, crane vessels, anti-pollution ships and equipment through to lightering ships.
Some of these units could be entitled to a salvage award in their own right. However, where a

professional salvor has been engaged, he can be expected to organize such assistance on terms
which will not lead to a proliferation of salvage claims. This may involve utilizing, for example,
the ISU Sub-Contract Award Sharing Agreement, or other daily rate or lump sum terms.

7.2

The International Convention on Salvage, 1989

7.2.1 The main purposes of the Salvage Convention 1989 are to review the international rules
contained in the 1910 Salvage Convention, ensure that those who undertake salvage operations
are provided with sufficient incentive and to reflect the interests of environmental protection in
the way salvage contracts work.
7.2.2 The Convention applies whenever judicial or arbitration proceedings relating to matters
dealt with in the Convention are brought in a State Party (see article 2). It applies to all types of
salvage operations in navigable waters or in any other waters whatsoever except to those relating
to fixed or floating platforms or mobile offshore drilling units which are actually on location and
ships that are entitled to sovereign immunity (unless such immunity is waived). It applies to any
ship or craft or any structure capable of navigation and property not permanently and
intentionally attached to the shoreline. Because of the wide definition of damage to the
environment (article 1), its environmental protection provisions apply not just to damage to
marine flora and fauna, but also to human health, and the cause may be pollution, contamination,
fire, explosion or any similar major incidents.
7.2.3 The 1989 Salvage Convention defines damage to the environment as substantial
physical damage to human health or to marine life or resources in coastal or inland waters or
areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major
incidents (see article 1(d) of the 1989 Salvage Convention). In reality, salvors have always
made considerable efforts during any salvage operations to avoid pollution and to co-operate
with national and/ or local authorities.
7.2.4 The parties to a salvage contract can vary the provisions of the Convention in their
contract, but they cannot vary the duties to prevent or minimize damage to the environment
which the Convention contains. These duties are, therefore, applicable whenever the Convention
applies to a salvage operation, even if the other provisions have been varied by the contract.
7.2.5 The main obligations of a salvor, which are owed not to the coastal State but to the
owners of the ship and property in danger require the salvor to not only carry out the salvage
operations with due care, but in doing this, he must exercise due care to prevent or minimize
damage to the environment. In this way, due care to protect the environment becomes a legal
duty in all of the salvage operations to which the Convention applies, and it cannot be varied by
the contract. In return, article 13(1) grants to the salvor the right to have the skill he has exercised
and the efforts he has made in preventing or minimizing damage to the environment taken into
account when the reward for successful or partly successful salvage is fixed. Also, the risk of
liability he has run (which would include liability for damage to the environment) may also be
taken into account. However, salvage services accepted on article 13 of the Salvage
Convention 1989 with Lloyds Open Form are based on the principle of no cure no pay and
the property must be delivered to Owners in order for an award to be made, notwithstanding the
provisions of article 14.
7.2.6 However, if, despite his due care, the salvage operations were not successful, or if they
were only partly successful, or if the value of the successfully salved ship, cargo and freight at
risk was low, it would be possible for the salvor to have spent considerable sums in fulfilling his
duty to protect the environment, which are not recouped, let alone rewarded. The salvor has an
incentive to provide salvage services in the event of low value high risk operations where there is
threat of damage to the environment. It is done with a provision for the salvor to be awarded
special compensation equivalent to his out of pocket expenses in certain circumstances where the

salvor has actually prevented or minimized damage to the environment. There are two other
preconditions to the award of this special compensation:
.1

the salvor must have carried out salvage operations in respect of a ship which by
itself or its cargo threatened damage to the environment; and

.2

the amount of any reward earned (article 13) must be less than the amount of
special compensation assessed (article 14).

7.2.7 The Convention therefore envisages that, in every case where the ship or cargo actually
threaten damage to the environment, two calculations will be carried out: the reward to be fixed
under article 13 and the special compensation to be fixed under article 14. If the article 13 reward
figure exceeds the figure for special compensation, then in fact only the reward is payable. If the
special compensation figure under article 14 exceeds the reward figure, then the reward is topped
up to the level of the special compensation figure (see article 14(4)). The salvor does not get paid
twice, but his environmental efforts can lead to the enhancement of the total remuneration he
receives from the salvage services he performs.
7.2.8 The Special Compensation under article 14 varies according to the circumstances. If there
was a threat of damage to the environment, but in fact the salvor did not by his salvage
operations prevent or minimize such damage, then the special compensation figure is equal to his
reasonably incurred out-of-pocket expenses plus a fair rate for equipment and personnel actually
and reasonably used in the salvage operations (which we shall call below the salvage
expenses). If, on the other hand, his salvage operations did prevent or minimize damage to the
environment, then the special compensation figure may be increased up to 30% of the salvage
expenses. Where exceptional service has been rendered, the special compensation may be
increased still more, but in no case shall the total increase be more than 100% of the expenses
incurred by the salvor.
7.2.9 If the salvor is negligent, both the reward and the special compensation figures may be
reduced. If he is not negligent, at worst he may end up merely with his salvage expenses
reimbursed if there was a threat to the environment. He must therefore do his job with the care
and skill for which the salvage industry is noted before he earns a good remuneration. He must
also carefully consider the location of the casualty in relation to the definition of damage to the
environment, as, if the casualty is not within or close to coastal or inland waters or areas
adjacent thereto, then the Special Compensation provisions of article 14 may not apply. In this
event, the salvor could be back to the traditional no cure no pay provisions.
7.2.10 The article 14 Special Compensation was introduced to provide salvors with an incentive
to provide salvage services for low value high risk operations such that they would be
recompensed in the event of successfully preventing or minimizing damage to the environment.
It was incorporated into Lloyds Open Form and provided for the payment of salvage expenses
even if the property itself was not saved. However, because security was not demanded of the
owner until after the salvage was completed, because of the lack of clarity on the definition of
coastal, areas adjacent thereto, substantial and the threat of damage to the environment
many article 14 awards were subject to extensive litigation while these points were argued and
the amount of the award was assessed. Salvors became discouraged and were reluctant to provide
salvage services in low reward operations. A simpler and more effective system was required to
remove these anomalies.
7.2.11 The answer to Special Compensation under article 14 was the introduction of the Special
Compensation P&I Clause (SCOPIC) on 1 August 1999, included in appendix 7. This clause,
which is supplementary to any Lloyds Form of Salvage Agreement No Cure No Pay that
incorporates the provisions of article 14, removed the need for the salvor to prove there was a

threat of damage to the environment. This provided the salvor with the incentive that security
was placed by the Owners within two working days of the SCOPIC Clause being invoked and
established a means of assessing his reward by means of a set tariff of rates for equipment and
personnel.
Chapter 8 The Liability Insurer
8.1
The third-party liabilities of the ship owner, and often of charterers, will generally be
covered by mutual insurance associations called Protection and Indemnity Associations.
8.2
A P&I Club is an association of ship owner members and is usually incorporated as a
company limited by guarantee, and is governed by a board, appointed by the members.
The day-to-day management is often carried out by a separate partnership or management
company. The association insures its members against their third-party liabilities on terms
specified in the P&I Clubs Rules, and it raises the funds to enable it to do so by calling up the
necessary sums from its members. After taking a certain measure of the risk itself, a Club will
usually arrange reinsurance.
8.23 These associations are normally referred to as P&I Clubs, the word Club being used to
denote their nature as mutual associations of ship owners. Approximately 92% of the worlds
ocean-going tonnage is entered in one of the thirteen P&I Clubs that comprise the International
Group of P&I Clubs (see Appendix 4 for a list of members of the International Group). Vessels
not entered with International Group Clubs are, by and large, entered with non-Group P&I
insurers.
8.34 Some discussion of the structure of P&I Clubs is relevant here, as this helps to account
for the particular character of these organizations, which affects the way they are able to interact
with coastal States in a marine pollution emergency.
8.5

Examples of coverage offered by a P&I Club are:

(.1)

personal injury to or illness or loss of life of crew members and passengers, and
loss of their effects;

(.2)

one fourth of collision liability;

(.3)

excess collision liability, including payments in excess of the limit of the hull
policies and items of claim excluded from policies such as oil pollution, dock
damage, wreck removal and loss of life, personal injury and illness;

(.4)

pollution liabilities (including oil pollution);

(.5)

other claims for damage to property, including damage to other ships and their
cargoes without collision, and dock damage;

(.6)

towage contract liabilities;

(.7)

removal of the wreck of an entered ship; and

(.8)

liabilities for loss or damage to cargo and other property on board an entered ship.

8.46 It should be borne in mind that aA P&I Club covers only the ship owners legal liabilities
in the sense of damage or compensation which the owner is legally obliged to pay to others,

together with certain other losses, costs and expenses, which are specified in the terms of the
insurance given to ship owners.
8.5
A P&I Clubs is an association of shipowner members and is usually incorporated as a
company limited by guarantee, and is governed by a board, appointed by a separate partnership
or management company. The association insures its members against their third-party liabilities
in terms specified in the P&I Clubs Rules, and it raises the funds to enable it to do so by calling
up the necessary sums from its members. After taking a certain measure of the risk itself, a Club
will usually arrange reinsurance.
8.67 Clubs in the International Group of P&I Clubs co-ordinate, through the Group Pool
system, the sharing between member clubs of losses in excess of individual club retentions and
the purchase of collective insurance and reinsurance for the Group clubs. Cover for ship owner
members for oil pollution is limited to US$1.05 billion while the cover for non-oil pollution is
considerably more (currently in excess of UN$5 billion). To provide the very high levels of
coverage which they do, the Group Clubs are dependent on their pooling arrangement whereby
claims in excess of each clubs retained risk (currently fixed at US$7 million) are pooled and
shared between the clubs in their respective pooling proportions up to US$50 millioncertain
limits. This pooling arrangement is underpinned by a reinsurance program, which is the largest
marine insurance placement in the world. This layered program, which is renewed annually,
protects the Group Clubs for claims exposures from US$50 million up to a combined limit of
US$3.05 billion (for pollution- US$1billion). Cover for chartered entries are different and is
provided up to a maximum limit of approximately US$350 million (including reinsurance).
8.78 It should, however, be noted that, in practice, the coverage of the maximum amount does
not apply except where the ship owner loses his right to limitation of liability. As already
mentioned, since the P&I Clubs cover only the legal liabilities of their members, and members
are often entitled to limit their liability under various international conventions or national law,
the insurance cover is often, in practice, restricted to the limitation amount applicable to the ship.
The limits of liability are based on specific units of account, i.e., Special Drawing Rights (SDRs),
the US dollar equivalents of which vary depending upon the current exchange rate.
As already mentioned, since the P&I Clubs cover only the legal liabilities of their
8.9
members, and members are often entitled to limit their liability under various international
conventions or national law, the insurance cover is often, in practice, restricted to the limitation
amount applicable to the ship.
8.810 Because the insurance offered has always been related to liabilities, P&I Clubs have
traditionally had legal expertise amongst their management and claims handling staff. In the case
of a marine pollution emergency, many legal experts with whom a coastal State would have to
deal will not only be qualified lawyers but they will generally have experience in the handling of
pollution claims in many parts of the world. By contrast, the officials of the coastal State may be
dealing with a marine pollution emergency for the very first time.
8.911 The main job of the claims handler in a marine pollution emergency is to handle all
claims against their members and to authorize payment of the valid ones. Under the terms of the
insurance, the Club will normally have the right to take over the handling of all claims above a
certain amount and, because of this the Club will usually get involved in decisions which affect
the eventual size of a claim right from the beginning, even before any formal claim is raised. In a
marine pollution emergency, the coastal State may find that very early on the most important
person it is dealing with is not the ship owner himself but his P&I Club.
8.102 Where a ship is covered by a Certificate of Insurance or Other Financial Security in
respect of Civil Liability for Oil Pollution Damage (CLC Certificate) it should not normally be

necessary to arrest a ship, but where a ship has been arrested, for whatever reason, a P&I Club
may put up financial security to ensure the release of the ship. This is commonly done by the
claimant accepting a letter of undertaking from the P&I Club itself. The ship owner may need
help with removing the crew from the ship, or with repatriating them, or the master or other
officer may need help with local officials who are holding them against the payment of a possible
fine. The Group clubs maintain a network of local correspondents in over 680 ports around the
world who are able to assist ship owner members and the clubs within dealing with problems
arising in or around these ports 24 hours a day, 365 days a year.
8.13 In an oil pollution case the P&I Clubs have a very close relationship with the
International Tanker Owners Pollution Federation Limited (ITOPF). ITOPF will be called in by
the ship owner or his P&I Club in almost every case of any size involving oil pollution, so that
now it probably has more experience in the practical aspects of response and clean-up, and in
deciding upon the reasonableness of actions taken, than any other organization. It is, therefore,
able to advise the P&I Club and the shipowner on the type and extent of oil pollution which has
occurred, what effect it is likely to have under different scenarios, what needs to be done to abate
or prevent the effects, and the most efficient way in carrying out this advice. This advice is also
available to the coastal State, should it ask for it, and in many cases the coastal State has asked
ITOPF to help arrange and co-ordinate the pollution response and clean-up. If the oil pollution
affects a State Party to the International Convention on the Establishment of an International
Fund for Compensation for Oil Pollution Damage 1971 or 1992 (1971 or 1992 Fund
Convention), there is also close co-operation between the P&I Clubs concerned and the
International Oil Pollution Compensation Funds 1971 and 1992 (IOPC Funds). This co-operation
usually extends to the appointment of joint technical experts, including those from ITOPF.
8.114 The P&I Club will also be involved in the decision concerning a possible lightering of the
ship, since the owners of the lightering ship will usually demand a complete indemnity from the
ship owner against any liabilities which they may incur as a result of undertaking the lightering,
and the ship owner will want to ensure that his P&I Club will be insuring his liability under that
indemnity. If the ship is a wreck and needs to be removed, then again the P&I Club will be
involved, since wreck removal is one of the risks which they insure.
8.15 When the time comes for claims to be presented to the ship owner or others responsible,
except in a small case, it will normally be the P&I Club which is the entity with which the
claimant will have to deal- in fact, under the 1969 and 1992 Civil Liability Conventions, the P&I
Club normally provides the certificate of insurance on which the ships CLC Certificate is based.
HNS Convention. Not only will the P&I Club negotiate claims with the claimant directly or
through local lawyers or agents. However, if legal proceedings begin, it will usually be the P&I
Club which takes the decisions concerning how the claim is defended. In all claims, the P&I
Clubs aim to provide a service to their members, and part of that service is to ensure that only
provable, valid claims are actually paid. Claims which are unreasonable will normally be
vigorously resisted with all the considerable expertise of the Club; equally, well-presented, valid
claims are normally paid as soon as possible.

Chapter 9 HNS Responder

9.1
The safety of personnel must be of the highest priority since a small amount of HNS has
the capability to cause a significant number of fatalities and /or long term health risk to
responders in comparison to responding to an oil spill.
9.2
Responding to an HNS incident requires different equipment and response strategies to be
utilized, this means that all personnel responding to an HNS incident must have the necessary
level of capability and skills appropriate for dealing with the incident.

9.3
Where possible responders should have attended and successfully completed a recognized
course in responding to HNS incidents, the IMO HNS courses for Managers and Responders give
a useful introduction to HNS response but are purely an introduction and do not bestow upon the
individual a level of competence to handle an HNS incident.
9.4
It is the Responders employers responsibility to ensure that the responder, supervisor
and / or Manager involved in dealing with an HNS incident have the appropriate training,
personal protective equipment and equipment fit for the purpose intended and appropriate for the
specific HNS incident they are attending.
9.5
It is essential that a written Safety Risk Assessment of the HNS incident is undertaken,
that the response strategy is agreed by the On Scene Coordinator /Commander (OSC) and the
response team, and a safety briefing in line with the risk assessment findings is given to, and
understood by, the responders before any operations commence.
9.6

Full documentation records of the response operations, preferably with photographs

should be kept, these will useful for claims reference after the incident has been
completed, such claims may be a considerable time after the event and memories at this
time maybe inaccurate.

Chapter 10 The Port Authority

10.1 Port authorities have general duties and powers. So long as the harbour is open to general
users, they have a duty to take reasonable care to ensure that all who navigate it can do so
without danger to life or property.
10.2 Ports have a duty of care to conserve and promote the safe use of the harbour and an
obligation to ensure the efficiency, economy and safety of their operations for all the services and
facilities provided. 10.3
Port authorities should act in ways which promote the maintenance,
operations and improvement of the port area and need to provide users with adequate information
about port conditions.
10.4 In addition to their general duties and powers, port authorities can have specific powers,
such as the power to direct vessels, to provide pilotage, to provide aids to navigation and
maintain them, to prevent dangers from wrecks and obstructions and to safely manage dangerous
vessels, hazardous substances and any port pollution.
10.5 Port Authorities should ensure they have an effective Safety Management System (SMS)
in place, which identifies all those powers, policies and procedures which deliver safety, during
normal operations and especially in times of an emergency. The SMS will be based on a formal
assessment of hazards and risk. The Ports SMS should be monitored, exercised and reviewed on
a regular basis, and ideally an independent external audit carried out also on a regular basis.
10.6 Port Authorities should ensue they have an effective Counter Pollution Response Plan
(CPRP) in place, which identifies all those powers, policies and procedures which reduce the risk
of pollution within the Port and especially in times of a potential and / or actual pollution
incident. The CPRP will be based on a formal assessment of hazards and risk. For all ports that
handle HNS it is essential that there is a section dealing with the risks and handling of an HNS
incident. The Ports CPRP should be monitored, exercised and reviewed on a regular basis, and
ideally an independent external audit carried out also on a regular basis.

10.7 Ports should publish their contingency plans and performance assessments in fulfilling
their obligations on a regular basis.
10.8 Ports operating within special protection areas or have sites of a sensitive environmental
nature will have to take account of the requirements of the management plan of the designated
area; this may mean extra precautionary measures to prevent pollution and accidents involving
HNS.
10.9 A port has the power to appoint a harbour master who is accountable for the safety of
operations within the harbour; the state or the port may have or impose specific rules or
regulations through which the harbour masters powers are exercised.

Chapter 11 - The Pilot

11.1 Pilotage services must be available and provided, if required, in the interests of safety and
the effective transiting of shipping in and out of a Port or through a designated seaway.
11.2 Pilots will need to be appropriately qualified and trained to the satisfaction of the port or
state administration that governs their appointment. This will normally involve a combination of
sea faring experience and local knowledge, although it is local knowledge which is
fundamentally important.
11.3 Pilots can be employed directly by the port authority, be self employed, supplied by the
State or employed by a third party that contracts the Pilots services to the Ship Owner and / or
the Ships Master, but all will have a primary role in port safety.
11.4 Pilots will have a responsibility to consult harbour users on passage planning and to
report any defects they encounter on the ship to National Port State Control Authorities.
11.5 In Ports that regularly have HNS transiting the port, it would be usefully for the Pilot to
have an understanding of handling HNS as a preparatory measure for in times of an HNS
incident threatening the vessel he is piloting.
11.6 Pilots act in an advisory capacity and it is the master of the ship who has ultimate control
and responsibility for the vessel.

Chapter 12- Custom

Any goods entering or leaving a port are subject to a customs declaration. The customs
authorities will no doubt have the ships bill of lading or manifest, if it is for HNS. If a ship
carrying HNS is a pollution threat to a coastal state where it is not scheduled to stop, the network
established by the World Customs Organization can provide access to information on its cargo.

Part II
OPRC-HNS Protocol on Preparedness, Response and Co-operation to Pollution Incidents
by Hazardous and Noxious Substances, 2000 (OPRC-HNS Protocol)

2.1
This IMO Protocol (OPRC-HNS Protocol) is based on the International Convention on
Oil Pollution Preparedness, Response and Co-operation (OPRC, 1990), which is designed to help
Governments respond to major oil pollution incidents. The OPRC Convention and the OPRCHNS Protocol are designed to facilitate international co-operation and mutual assistance in
preparing for and responding to a major pollution incident and to encourage contracting States to
develop and maintain an adequate capability to deal with pollution emergencies.
2.2
The OPRC-HNS Protocol entered into force on 14 June 2007 and deals specifically with
preparedness and response to marine pollution at coastal state level. Like the 1990 OPRC
Convention for oil, it aims to provide a global framework for international co-operation in
responding to major incidents or threats of marine pollution. It expands the scope of the OPRC
Convention to apply in whole or in part, to pollution incidents by hazardous and noxious
substances other than oil.
2.3
Parties to the OPRC-HNS Protocol are required to establish measures for dealing with
HNS pollution incidents and specifically the following is required;
.1

National and Regional systems for preparedness and response: Parties are required
to establish national systems for responding effectively to HNS pollution incidents
and to establish a national contingency plan for preparedness and response to HNS
incidents. In addition, Parties are required, either individually or through cooperation, to establish equipment stockpiles of applicable equipment to handle
HNS incidents, HNS training and response exercise programs and to co-operate in
the field of information exchange;

.2

Emergency plans and Reporting systems: Ships carrying hazardous and noxious
liquid substances are required to carry a shipboard marine pollution emergency
plan to deal specifically with incidents involving HNS; and

.3

the enhancement of international co-operation in pollution response, technical

co-operation and assistance, co-operation in R&D and information services.

2.4
For the purposes of the OPRC-HNS Protocol 2000, a Hazardous and Noxious Substance
is defined as any substance other than oil which, if introduced into the marine environment is
likely to create hazards to human health, to harm living resources and marine life, to damage
amenities or to interfere with other legitimate uses of the sea. It should be noted that the
definition of an HNS as defined by the OPRC-HNS Protocol 2000 differs widely from the
definition of an HNS under the International Convention on Liability and Compensation for
Damage in Connection with the Carriage of Hazardous and Noxious Substances (HNS) by sea,
otherwise known as the HNS Convention.
2.5
The OPRC-HNS Protocol 2000 will ensure that ships carrying hazardous and noxious
liquid substances are covered by preparedness and response regimes similar to those already in
existence for oil incidents. Under the OPRC-HNS Protocol and MARPOL requirements ships
are required to carry a shipboard marine pollution emergency plan to deal specifically with
incidents involving HNS, which are defined as any substance other than oil which, if introduced
into the marine environment is likely to create hazards to human health, to harm living resources
and marine life, to damage amenities or to interfere with other legitimate uses of the sea.

2.6

In 1996, IMO adopted the International Convention on Liability and Compensation for
Damage in Connection with the Carriage of Hazardous and Noxious Substances (HNS)
by sea, which provides for a compensation and liability regime for incidents involving
these substances (it has not yet entered into force and currently under modification
review). Liability and compensation regimes for oil pollution incidents are covered by
the 1992 Protocols to the International Convention on Civil Liability for Oil Pollution
Damage, 1969 and the International Convention on the Establishment of an International
Fund for Compensation for Oil Pollution Damage, 1971.

Material Provided by NZ to be included as Part II OPRC-HNS Protocol:

Proposed information to be developed for States considering becoming Party to the
Protocol (to be incorporated into the guidance document on chemical pollution to address
legal and administrative aspects of HNS incidents)
(Notes in italics describe suggested information to be included under each heading.)
1

Introduction
1.1 Brief description of the OPRC-HNS Protocol and how it works 1
1.2 Entry into force information 1
1

If this guidance material is to be published as a separate Part to the guidance document

on legal and administrative aspects, this information could potentially be copied from
Chapter 2 of that guidance document.
1.3 Objective of this manual 2
2

The Protocol contains a number of obligations that States Party must fulfil, including
Flag State responsibilities, national systems for preparedness and response, international
co-operation and financial systems. This document details these obligations and outlines
the systems and processes that will need to be established to fulfil these obligations.
Additionally, the document provides some options for putting these systems and processes
into place.
1.4 Definitions used in the manual
2

Obligations
2.1

Who will be Affected and Application 3

Becoming party to the Protocol imposes a number of Flag State and Coastal State
obligations as well as requirements for vessel owners and port and shore facilities that
handle HNS. These obligations are detailed in the following sections (Note should the
structure of the document include a breakdown by those who are affected? See also the
notes re Additional Information at the end of this Annex).
Parties must meet all of the requirements of the Protocol and the Annex. Parties must take
measures to prepare for an HNS pollution incident. This section should define what vessels
are not covered by the Protocol and the requirement to ensure that these vessels act
consistently with the Protocol as far as reasonable and practical. (Article 1)
2.2
4

Emergency plans and reporting 4

Ships, not including FPSOs or FSUs, flagged to Parties to the protocol and port facilities
handling HNS must have emergency response plans that include HNS incidents The Party

must ensure that reporting procedures for incidents on vessels are followed, including
notification by the authorities of that Party to other States that may be affected by the
incident. (Article 3)
2.3

National systems for preparedness and response 5

Requirement for pre-positioned equipment, exercise and training program, response

plans, communications capabilities and response coordination and cooperation with
industry, port authorities etc., ensuring current information on response capabilities and
responsibilities is provided to the Organization. (Article 4)
2.3

International obligations 6 7 8 9

Where the incident justifies it Parties will cooperate and provide assistance to other
Parties upon request. Parties must also implement financial and administrative measures to
allow and expedite arrival, use and departure of equipment, cargo and personnel involved
in the response. Additionally Parties should endeavour to set up documents agreements for
preparedness and response with other Parties and make these available to the
Organization. (Articles 5 and 8)
7

Parties to the Protocol are required to co-operate and share information on R&D into
HNS and identify if there is a need for links with international research institutions.
Parties also should co-operate in supporting proposals for international symposia on HNS
response developments as well as supporting and encouraging appropriate proposals to
develop international standards. (Article 6)
8

Parties will undertake to directly, or through the Organization, assist other Parties who
request assistance in training, ensuring availability of technology, equipment and facilities,
measures and arrangements for response preparedness and during incidents and in
initiating joint R&D programmes. (Article 7)
9

Parties will work within the Organization to evaluate the effectiveness of the Protocol
(Article 11)
2.5

Becoming Party to the Protocol and subsequent amendments 10

10

To become Party, States must undertake the appropriate process for signature,
ratification, accession etc., States will also need to define application where more than one
system of law exists in the State, and take account of the relevant entry into force
provisions. (Articles 12 -17)
2.6

Reimbursement of costs of assistance 11

11

Where a State requests assistance of another Party to respond to an incident they may
need to reimburse the fair and reasonable costs incurred by the assisting Party unless there
has been a prior arrangement otherwise. (Annex)
3

Means of meeting obligations under the Protocol

3.1
12

Application 12

Parties will need to establish a means, such as a regulation, that will ensure Stateflagged naval and government vessels that carry HNS have shipboard emergency plans that
cover procedures for HNS incidents. These plans should as far as possible be consistent
with the plans that are required by non government vessels. Some means of determining
compliance with the requirement, such as inspection or audit, should also be established.

Requirements for vessels and shore facilities to have approved emergency plans (see notes
at end of annex.
Parties must establish a 24 hour response capability including personnel, information,
equipment and procedures to conduct a response. This may be done through internal
systems or arrangements with other parties. More details on what is required to develop a
national system for preparedness is included in Section 3.2.
Emergency plans and reporting 13

3.2
13

Parties will need regulations in place to require ships flagged to that State to have in
place an on-board pollution incident emergency plan that covers HNS incidents. Parties
will also need systems to ensure compliance with this requirement. Include some details of
what such plans should include such as reporting procedures. Parties may also decide to
require incident emergency plans for FPSOs and FSUs, although this is not required under
the Protocol.
Parties will need regulations in place to require ports and HNS handling facilities to have
site emergency response plans that include HNS incidents, and have systems to ensure
compliance by these facilities with the requirements.
Procedures will need to be established and documented to ensure that the relevant State
authorities notify other States who may be affected by an HNS incident. For example,
neighbouring coastal States may be at risk from pollution impacts to their waters or
coastlines.
National systems for preparedness and response 14

3.3
14

Identify components that will need to be established through a national system and,
where necessary, provide detail of what should be covered in these components. Some of
this may simply refer to other publications and information sources. Examples of detail to
include:
-

3.4

Identifying national agencies that should be involved in response and defining the
role and responsibilities of these agencies as well as how they will interact and
communicate during an incident
Contents of a national response plan
Incident command structures
Conducting exercises and auditing/testing of the response system
Training of people involved in HNS response
Options for establishing international agreements for assistance during incidents.
Establishing financial systems to cover the costs of the response and, where
appropriate claiming costs from another party.
International obligations

15

15

Parties should have systems in place whereby they are represented at the Organization
and be willing to work with the Organization to facilitate training and access to
appropriate resources by Parties that require technical assistance. In addition, where
possible Parties should seek ways to participate in international co-operation to pass on
information about research and development, and facilitate transfer of technologies.
Where possible, Parties should seek to establish bilateral or multilateral to facilitate
international co-operation and support during incidents. In practice this is likely to take
the form of an extension of existing international agreements on oil spill response.
3.5

Becoming Party to the Protocol and subsequent amendments

16

16

Describe the processes by which can become Party and the Entry into Force provisions.
Also detail the implications of amendments to the Protocol and the process by which
Parties can participate in developing and approving amendments, and subsequently
accepting and becoming Party to the amendments. Include briefly the process of
denunciation. (This should be able to come quite directly from the Protocol text itself.)
3.6

Reimbursement of costs of assistance

17

17

Issues around bilateral and multilateral agreements for co-operation on HNS response
and considering cost requirements of establishing and maintaining a response system and
fulfilling their other obligations under the protocol and how these will be funded. Some
mention could be made here of the HNS Convention or other liability instruments.
Parties should also ensure that they have clarified the reimbursement process for assisting
other Parties with a response and be aware that if they intervene without a specific request
or agreement they may be unable to claim reimbursement of costs incurred, although
reimbursement may later be negotiated. In order to calculate costs of assistance, Parties
will need to have systems and standards in place such as a schedule for use of equipment
and appropriate financial accounting systems to record costs.
Additional information that could be included
Note: Including the information listed below may be unnecessary if the purpose of the document
is simply to inform States about their obligations and the systems they will need to have in place.
Marine Administration Responsibilities 18
Eg. What the administration should do, what could be delegated, whom to delegate to.
18

Note: Going into detail about areas such as delegation of responsibilities may be over
prescriptive.
Duties of Ship Owners 19
Duties of Port Authorities 19
19

Note: Unless ship owners and ports are among the intended audience for this document,
detailing their responsibilities could be superfluous, unless this information is intended to
allow the State Administration to advise on this aspect.

Part III

(Need to be reviewed by Legal Committee)

Liability and compensation regarding marine pollution incidents involving HNS

International Convention on Liability and Compensation for Damage in Connection with
the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention, 1996)
Chapter 1 Introduction
1.1
In 1984 IMO convened a conference to consider a new instrument dealing with
compensation for accidents involving hazardous and noxious substances (HNS) but the issues
complexity delayed further work until 1996. The result of that effort was the International
Convention on Liability and Compensation for Damage in Connection with the Carriage of
Hazardous and Noxious Substances (HNS) by Sea 1996 which will make it possible for up
to 250 million SDR to be paid out to victims of disasters involving HNS (such as chemicals).
1.2
The HNS Convention was adopted by a Diplomatic Conference held in May 1996 under
the auspices of the International Maritime Organization (IMO). The Convention aims to ensure
adequate, prompt and effective compensation for damage to persons and property, costs of
clean-up and reinstatement measures and economic losses caused by the maritime transport of
hazardous a nd noxious substances (HNS).
Chapter 2 Ratification and Entry into Force
2.1
The HNS Convention has not yet entered into force. The HNS Convention will enter into
force 18 months after ratification by at least 12 States, subject to the following conditions: in the
previous calendar year a total of at least 40 million tonnes of cargo consisting of bulk solids and
other HNS liable for contributions to the general account was received in States which have
ratified the Convention; and four of these States each have ships with a total tonnage of at
least 2 million GT.
2.2
All signatories will have to ratify the Convention before they are legally required to
comply with it. Any State that wishes to be bound by the Convention, but has not signed it, will
have to accede to the Convention.
Chapter 3 Purpose of the HNS Convention
3.1
The Convention was designed recognizing the dangers posed by the worldwide carriage
by sea of hazardous and noxious substances, and the need to ensure that adequate, prompt and
effective compensation is available to persons who suffer damage caused by incidents in
connection with the carriage by sea of such substances, as well as the benefit of adopting
uniform international rules and procedures for determining questions of liability and
compensation in respect of such damage. In addition, the Convention considers that the
economic consequences of damage caused by the carriage by sea of hazardous and noxious
substances should be shared by the shipping industry and the cargo interests involved.
3.2

3.2
The HNS Convention is based upon the two-tier systems developed for oil
pollution compensation under the CLC and Fund Conventions. However, given the
nature of impacts from an HNS pollution incident, the HNS Convention goes further by
not only covering pollution damage, but also risks of fire and explosion, including loss of
life or personal injury as well as loss of or damage to property outside of the ship. It also
covers loss or damage by contamination of the environment, costs of preventative
measures and further loss or damage caused by them.

Chapter 4 Substances Covered by the HNS Convention

4.1
The Convention defines Hazardous and noxious substances (HNS) as any substances,
materials and articles carried on board a ship as cargo, which includes oils carried in bulk listed
in appendix I of Annex I to the International Convention for the Prevention of Pollution from
Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended; noxious liquid
substances carried in bulk referred to in appendix II of Annex II to the International Convention
for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating
thereto, as amended, and those substances and mixtures provisionally categorized as falling in
pollution category A, B, C or D in accordance with regulation 3(4) of the said Annex II;
dangerous liquid substances carried in bulk listed in chapter 17 of the International Code for the
Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk, 1983, as
amended, and the dangerous products for which the preliminary suitable conditions for the
carriage have been prescribed by the Administration and port administrations involved in
accordance with paragraph 1.1.3 of the Code; dangerous, hazardous and harmful substances,
materials and articles in packaged form covered by the International Maritime Dangerous Goods
Code, as amended; liquefied gases as listed in chapter 19 of the International Code for the
Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, 1983, as amended, and
the products for which preliminary suitable conditions for the carriage have been prescribed by
the Administration and port administrations involved in accordance with paragraph 1.1.6 of the
Code; liquid substances carried in bulk with a flashpoint not exceeding 60C (measured by a
closed cup test); and solid bulk materials possessing chemical hazards covered by appendix B of
the Code of Safe Practice for Solid Bulk Cargoes, as amended, to the extent that these substances
are also subject to the provisions of the International Maritime Dangerous Goods Code when
carried in packaged form. This also includes residues from the previous carriage in bulk of
substances described above.
4.2
The definition of HNS is largely based on lists of individual substances that have been
previously identified in a number of Codes designed to ensure maritime safety and prevention of
pollution. Many substances are covered under more than one section of the definition. There is
considerable overlap between the three different definitions of liquid HNS, and some liquefied
gases are also covered by the definition of dangerous liquid substances under the IBC Code.
HNS are very varied and include both bulk cargoes and packaged goods. Bulk cargoes can be
solids, liquids including oils or liquefied gases. The number of substances included is very large.
The IMDG Code, for example, lists hundreds of materials which can be dangerous when shipped
in packaged form. In practice, however the number of HNS that are shipped in significant
quantities are relatively small. Bulk solids are included if they are covered by appendix B of the
BC Code, i.e., they possess chemical hazards, and if they are also subject to the provisions of the
IMDG Code when carried in packaged form. This means that many of the major bulk solids are
excluded since they either do not possess chemical hazards (e.g., iron ore, grain, bauxite and
alumina, phosphate rock, cement and some fertilizers) or they are classified as materials
hazardous only in bulk (MHB) (e.g., coal, reduced iron and woodchip). Bulk solids that are
covered include some fertilizers, sodium and potassium nitrates, sulfur and some types of
fishmeal. Bulk liquids are included if they present safety, pollution or explosion hazards and
include organic chemicals (e.g., methanol, xylenes and styrene), inorganic chemicals
(e.g., sulfuric acid, phosphoric acid and caustic soda) and vegetable and animal oils and fats
(e.g., palm oil, soybean oil and tallow). Both persistent and non-persistent oils of petroleum
origin are also included, although the Convention only covers non-pollution damage caused by
persistent oil, as explained below. Bulk liquids that are not covered include potable alcohol and
molasses. All liquefied gases which are transported in bulk are included, such as liquefied
natural gas (LNG), liquefied petroleum gas (LPG), ammonia, ethylene, butadiene, ethane and
propylene. Packaged goods are included if they are covered by the IMDG Code, which
comprises a very wide range of chemicals although many of these are only carried in small
quantities.

4.3
HNS include bulk solids, liquids including oils, liquefied gases such as liquefied natural
gases (LNG) and liquefied petroleum gases (LPG), and packaged substances. Some bulk solids
such as coal and iron ore are excluded because of the low hazards they present. Loss or damage
caused by non-persistent oil is covered as is non-pollution damage caused by persistent oil.
Pollution damage caused by persistent oil is excluded since such damage is already covered by
the existing regime on liability and compensation for oil pollution from tankers, i.e., the 1992
Civil Liability Convention, the 1992 Fund Convention and the Supplementary Fund Protocol.
Loss or damage caused by radioactive materials is also excluded.
4.4
The Convention includes a database of all substances qualifying as HNS and covered by
the relevant IMO Conventions and Codes. The database has been developed using data,
including flashpoints where appropriate, on substances that are listed as covered or not covered
by the various Codes and Conventions on which the definition of HNS is based. The database
therefore contains data on all substances that are commonly transported by sea. The database will
be updated regularly to reflect any changes in the lists of substances under these Codes and
Conventions. The database contains information as to whether or not a substance qualifies as
HNS under the Convention.
4.5
The Convention coverage definition refers to substances carried in bulk as well as in
packaged form. Whether a substance qualifies as HNS may therefore depend on whether it is
carried in bulk or packaged form. The database holds data on substances carried in bulk
separately from data on substances in packaged form and so there may be two records for a
particular substance, one in respect of carriage in bulk and one in respect of carriage in packaged
form.
4.6
All substances that fall within the definition of HNS are covered by the HNS Convention
in respect of compensation for damage resulting from incidents with the following exceptions:
.1

the Convention does not apply to pollution damage caused by persistent oil, since
such damage is already covered by the existing regime for pollution damage
caused by oil spills from tankers, i.e., the Civil Liability and Fund Conventions;
and

.2

the Convention does not apply to damage caused by radioactive materials.

4.7
Receivers of all substances that fall within the definition of HNS are liable to pay
contributions if the quantities they receive are above certain thresholds. However, some
substances or groups of substances have been selected for special treatment so that the hazards
they represent can be reflected in the contributions levied. Oils, LNG and LPG will each have
either their own separate account or their own sector within the general account. Bulk solids will
also have a separate sector within the general account.
Chapter 5 Damage at Sea
5.1
The Convention addresses any incident which means any occurrence or series of
occurrences having the same origin, which causes damage or creates a grave and imminent threat
of causing damage.
5.2
Damage means (a) loss of life or personal injury on board or outside the ship carrying
the hazardous and noxious substances caused by those substances; (b) loss of or damage to
property outside the ship carrying the hazardous and noxious substances caused by those
substances; (c) loss or damage by contamination of the environment caused by the hazardous
and noxious substances, provided that compensation for impairment of the environment other
than loss of profit from such impairment shall be limited to costs of reasonable measures of

reinstatement actually undertaken or to be undertaken; and (d) the costs of preventive measures
and further loss or damage caused by preventive measures.
5.3
The Convention addresses carriage by sea which means the period from the time when
the hazardous and noxious substances enter any part of the ships equipment, on loading, to the
time they cease to be present in any part of the ships equipment, on discharge. If no ships
equipment is used, the period begins and ends respectively when the hazardous and noxious
substances cross the ships rail. This will include loading at terminals which means any site
for the storage of hazardous and noxious substances received from waterborne transportation,
including any facility situated offshore and linked by pipeline or otherwise to such site.
5.4
The Convention applies to claims, other than claims arising out of any contract for the
carriage of goods and passengers, for damage arising from the carriage of hazardous and noxious
substances by sea. Where it is not reasonably possible to separate damage caused by the
hazardous and noxious substances from that caused by other factors, all such damage is deemed
to be caused by the hazardous and noxious substances. However, the Convention does not apply
to pollution damage as defined in the International Convention on Civil Liability for Oil
Pollution Damage, 1969, as amended, whether or not compensation is payable in respect of it
under that Convention; and to damage caused by a radioactive material of class 7 either in the
International Maritime Dangerous Goods Code, as amended, or in appendix B of the Code of
Safe Practice for Solid Bulk Cargoes, as amended.
5.5
Ship is defined as any seagoing vessel and seaborne craft, of any type whatsoever.
However, a State may declare that the Convention does not apply to ships, which do not
exceed 200 GT and which carry HNS only in packaged form, while they are engaged on voyages
between ports or facilities of that State. Cargo carried on such ships does not qualify as
contributing cargo. Under the Convention, neighbouring States may agree to extend their
declarations to cover voyages between them. Further, the HNS Convention does not apply to
warships, naval auxiliary or other ships owned or operated by a State and used, for the time
being, only on Government non-commercial service, unless a State makes an appropriate
declaration to the contrary . HNS carried on such ships therefore does not qualify as contributing
cargo unless a State has made such a declaration.
5.6
Contributing cargo under the Convention means any hazardous and noxious substances
which are carried by sea as cargo to a port or terminal in the territory of a State Party and
discharged in that State. Cargo in transit which is transferred directly, or through a port or
terminal, from one ship to another, either wholly or in part, in the course of carriage from the
port or terminal of original loading to the port or terminal of final destination shall be considered
as contributing cargo only in respect of receipt at the final destination.
Chapter 6 Two Tier Structure of HNS Convention
6.1
The HNS Convention establishes a two tier compensation regime. The first tier is
provided by the individual ship owner and his insurer and the second tier by the International
Hazardous and Noxious Substances Fund (HNS Fund), contributed to by receivers of HNS after
sea transport in all States Parties to the Convention.
6.2
Compensation under the Convention is by Unit of account which means the Special
Drawing Right as defined by the International Monetary Fund. The amounts due under the
Convention are converted into national currency on the basis of the value of that currency by
reference to the Special Drawing Right on the date of the constitution of the Fund. The value of
the national currency, in terms of the Special Drawing Right, of a State Party which is a member
of the International Monetary Fund, are calculated in accordance with the method of valuation
applied by the International Monetary Fund in effect on the date in question for its operations

and transactions. The value of the national currency, in terms of the Special Drawing Right, of a
State Party which is not a member of the International Monetary Fund, shall be calculated in a
manner determined by that State.
6.3
While the provisions of the Convention do not apply to warships, naval auxiliary or other
ships owned or operated by a State and used, for the time being, only on Government
non-commercial service, a State Party may decide to apply this Convention to its warships or
other vessels by notifying the Secretary-General of IMO and specifying the terms and conditions
of such application. With respect to ships owned by a State Party and used for commercial
purposes, each State is subject to suit in the proper jurisdictions as noted in the Convention and
must waive all defences based on its status as a sovereign State.
6.4
This Convention applies to any damage caused in the territory, including the territorial
sea, of a State Party; to damage by contamination of the environment caused in the exclusive
economic zone of a State Party, established in accordance with international law, or, if a State
Party has not established such a zone, in an area beyond and adjacent to the territorial sea of that
State determined by that State in accordance with international law and extending not more
than 200 nautical miles from the baselines from which the breadth of its territorial sea is
measured; to damage, other than damage by contamination of the environment, caused outside
the territory, including the territorial sea, of any State, if this damage has been caused by a
substance carried on board a ship registered in a State Party or, in the case of an unregistered
ship, on board a ship entitled to fly the flag of a State Party; and preventive measures, wherever
taken.
6.5
The Convention also provides for the optional exclusion from the application of the
Convention to ships satisfying certain criteria. This allows a State, when ratifying the
Convention, to exclude voyages involving small ships which may face relatively high insurance
premiums in relation to their revenue earning capacity. These criteria, contained in Article 5 of
the Convention, are:
.1

the ships tonnage must not exceed 200 gross tons;

.2

the ships must carry HNS only in packaged form, not in bulk; and

.3

the ships must be engaged only in domestic voyages.

6.6
Two neighbouring States can also agree to exclude voyages between those States from
the scope of the Convention, providing the ships comply with the tonnage not
exceeding 200 gross tons and the carriage of HNS only in packaged form. Any such declaration
may be made or withdrawn by notification to the Secretary General of the IMO. Cargos carried
on board ships covered by such a declaration are not considered to be cargo contributing to the
HNS Fund.
6.7
The HNS Fund is not liable for any damage caused by HNS carried by a ship to which
the Convention does not apply, following such a declaration if the damage occurred in the
territorial sea, or the EEZ, of the State which has made the declaration.
Chapter 7 Liability of the Ship Owner
7.1
Under the Convention an owner is the person or persons registered as the owner of the
ship or, in the absence of registration, the person or persons owning the ship. However, in the
case of a ship owned by a State and operated by a company which in that State is registered as
the ships operator, owner shall mean such company.
7.2
A receiver means either (a) the person who physically receives contributing cargo
discharged in the ports and terminals of a State Party; provided that if at the time of receipt the

person who physically receives the cargo acts as an agent for another who is subject to the
jurisdiction of any State Party, then the principal shall be deemed to be the receiver, if the agent
discloses the principal to the HNS Fund; or (b) the person in the State Party who in accordance
with the national law of that State Party is deemed to be the receiver of contributing cargo
discharged in the ports and terminals of a State Party, provided that the total contributing cargo
received according to such national law is substantially the same as that which would have been
received under (a).
7.3
Under the HNS Convention the ship owner is held to be strictly liable for damage caused,
unless the circumstances fall within one of the stated exceptions set out in the defences available
to the ship owner. Strict liability means that the liability is not dependent on the fault of the
owner or any other person. The fact that damage has been caused by substances on board the
ship is sufficient to establish the ship owners liability. The ship owner is normally entitled to
limit his liability under the Convention to an amount calculated on the basis of the units of
tonnage of the ship, as follows:
.1

ten million SDR for a ship not exceeding 2, 000 units of tonnage; and

.2

for a ship in excess of 2,000 units of tonnage the shipowner is entitled to limit his
liability to 10 million SDR plus for each unit of tonnage
from 2,001 to 50,000 units of tonnage, 1,500 SDR and for each unit of tonnage in
excess of 50, 000 units of tonnage, 360 SDR.

7.4
The aggregate amount of the ship owners liability shall not exceed 100 million SDR. In
order to be able to limit liability the ship owner must establish a limitation fund, in accordance
with the determined limit, with a competent court. This is so as to ensure that the limitation
amount is actually available for the payment of compensation. Once a limitation fund has been
established, no other assets of the owner may be seized, i.e., legally arrested. Any assets that
had been seized before the fund was established must be released. Any other person also
providing financial security also has the right to institute a limitation fund, i.e., the ship owners
insurer.
7.5
When the limitation fund is distributed the court will set aside a sufficient sum in order to
protect the ship owner against paying more than the applicable limit of liability. This is necessary
if the distribution takes place before the expiry of the time bar period as the ship owner may still
be liable for compensation payments for damage in a State not party to the Convention. This
defence is also available to other persons who may be compelled to pay compensation. If a ship
owner invokes one of the defences available to him/her, compensation would still be available
from the HNS Fund in many cases.
7.6
Liability is channelled to the ship owner and shall not be attached to other persons
connected with the operation of the ship, unless the damage resulted from their own fault. The
aim is to prevent unnecessary litigation. Since the ship owner is strictly liable for damage and is
required to maintain insurance or other financial security, the interests of claimants are
subsequently protected.
7.7
The ship owner will be denied the right to limitation of liability if it is proved that the
damage resulted from the ship owners personal act or omission committed either with intent, or
recklessly, and with knowledge that damage would probably result, as a result of the owners
personal act or omission. This is only the case in the event of an act or omission by the ship
owner, not in the event of an act or omission by the master or crew of the ship. One possible
example of such an act could be that a ship owner knowingly allows a ship to sail in such an
unseaworthy condition that an accident is likely to occur.

7.8
The HNS Convention provides defences for the ship owner to be exempted from liability
in certain cases. No liability shall attach to the owner if the owner proves that:
.1

the damage resulted from an act of war, hostilities, civil war, insurrection or a
natural phenomenon of an exceptional, inevitable and irresistible character;

.2

the damage was wholly caused by an act or omission done with the intent to cause
damage by a third party;

.3

the damage was wholly caused by the negligence or other wrongful act of any
Government or other authority responsible for the maintenance of lights or other
navigational aids in the exercise of that function; or

.4

the failure of the shipper or any other person to furnish information concerning
the hazardous and noxious nature of the substances shipped either has caused the
damage, wholly or partly; or has led the owner not to obtain insurance; provided
that neither the owner, nor its servants or agents knew or ought reasonably to have
known of the hazardous and noxious nature of the substances shipped.

7.9
This last provision applies only if someone had failed to give the ship owner the relevant
information, or if the ship owner had not obtained the necessary insurance cover as a
consequence of this failure to provide information. If the ship owner invokes one of these
defences and is not held liable, compensation may still be available from the HNS Fund.
7.10 Generally the owner at the time of an incident is be liable for damage caused by any
hazardous and noxious substances in connection with their carriage by sea on board the ship,
provided that if an incident consists of a series of occurrences having the same origin the liability
attaches to the owner at the time of the first of such occurrences. Claims in respect of death or
personal injury have priority over other claims save to the extent that the aggregate of such
claims exceeds two thirds of the total amount established.
7.11 No claim for compensation may be made against the following, unless the damage
resulted from their personal act or omission, committed with intent to cause such damage, or
recklessly and with knowledge that such damage would probably result:
.1

the servants or agents of the owner or members of the crew;

.2

the pilot or any other person who, without being a member of the crew, performs
services for the ship;

.3

any charterer (including a bareboat charterer), manager or operator of the ship;

.4

any person performing salvage operations with the consent of the owner or on the
instructions of a competent public authority;

.5

any person taking preventive measures; and

.6

all servants or agents of a charterer, manager or operator of a ship, salvor, or those

taking preventive measures.

7.12 While no claim for compensation for damage against the owner can be made other than
in accordance with this Convention, nothing in this Convention shall prejudice any existing right
of recourse of the owner against any third party, including, but not limited to, the shipper or the
receiver of the substance causing the damage, or other persons.

7.13 Whenever damage has resulted from an incident involving two or more ships each of
which is carrying hazardous and noxious substances, each owner is liable for the damage. The
owners will be jointly and severally liable for all such damage which is not reasonably separable,
although the owners are entitled to the limits of liability under the Convention.
7.14 The HNS Convention provides for the joint and several liabilities of all the ship owners
involved if an incident occurs involving two or more ships carrying HNS substances, unless they
are able to avail themselves of the defences provided under Article 7 of the Convention. Each
ship owner is able to invoke a separate limit of liability. The number of ships involved in the
incident governed by the HNS Convention will determine the overall amount available to
claimants.
7.15 The owner of a ship is entitled to several different limits of liability under this
Convention with respect to certain conditions. However, the owner is not be entitled to limit
liability under this Convention if it is proved that the damage resulted from the personal act or
omission of the owner, committed with the intent to cause such damage, or recklessly and with
knowledge that such damage would probably result.
Chapter 8 Vessel Insurance
8.1
The HNS Convention requires ship owners to provide evidence of insurance cover upon
entry into port of any State that is party to the Convention by production of a certificate. This is
necessary regardless of whether the State of the ships registry party to the Convention. The
responsibility for issuing insurance certificates will fall upon the States of the ships registry.
Initially, however, many ships may be registered in States that are not party to the HNS
Convention and the burden of issuing the certificates will fall on a few State Parties). This is the
same arrangement that is followed under the International Convention on Civil Liability for Oil
Pollution Damage (CLC) regime. Ships registered in States not parties to the HNS Convention
will be able to seek certificates from States that are party to the HNS Convention as long as they
can satisfy the insurance requirements.
8.2
Actions for compensation can be brought directly against the insurer or person providing
financial security. In such a case, the insurer will enjoy the defences that the owner would have
had, including the right to limit liability, even in circumstances where the owner is not allowed to
limit liability. The insurer also has an added defence if the damage resulted from the willful
misconduct of the ship owner. If the ship owners defences are upheld by the court the entire
costs of the incident would, in many cases, fall on the HNS Fund.
8.3
The Convention deals with the requirement for the ship owner to have compulsory
insurance to cover his liability for damage under the HNS Convention. The owner of a ship is
required to register in a State Party to the Convention and actually carry HNS to maintain
insurance or other financial security, such as the guarantee of a bank or similar financial
institution, to cover his liability for damage under the Convention. If insurance or other financial
security is not maintained in respect of a ship owned by a State Party, the ship must instead carry
a compulsory insurance certificate issued by the appropriate authority of the State of the ships
registry stating that the ship is owned by that State and that the ships liability for damage under
the Convention is covered.
8.4
The Convention requires that a compulsory insurance certificate be issued to each ship
after the appropriate authority of a State Party has determined that the insurance or other
financial security required is in place. For a ship registered in a State Party, the certificate shall
be issued or certified by the appropriate authority of that State; for a ship not registered in a State
Party, the certificate may be issued or certified by the appropriate authority of any State Party.

8.5
In order to be valid, an insurance or other financial security must fulfill certain conditions.
The compulsory insurance certificates issued to ship carrying HNS also are required, under the
Convention to contain the following particulars:
.1

name of the ship, distinctive number or letters and port of registry;

.2

name and principal place of business of the owner;

.3

IMO ship identification number;

.4

type and duration of security;

.5

name and principal place of business of insurer or other person giving security and,
where appropriate, place of business where the insurance or security is established;
and

.6

period of validity of certificate, which shall not be longer than the period of validity
of the insurance or other security.

8.6
The Convention requires each State Party to ensure, under its national law that such
insurance or other security is in force in respect of any ship, wherever registered, entering or
leaving a port in its territory, or arriving at or leaving an offshore facility in its territorial sea.
The Convention further requires that a State shall not permit a ship under its flag which requires
a compulsory insurance certificate to trade unless such a certificate has been issued.
8.7
A State Party may also issue certificates to a ship registered in a State not party to the
Convention, but is under no obligation to do so. Certification must be sought from the
appropriate administration of a State Party if the vessel is registered in a state that is not a Party
to the HNS Convention. States Parties are required to respect any certificate issued by another
State Party. Each State Party must organize a system to monitor that ships which are required to
maintain insurance actually comply with the requirements. The implementation measures are
likely to include:

8.8

.1

a legal basis in national law for the insurance requirement (typically an act of
parliament);

.2

penal sanctions against the master and the ship owner for non-compliance;

.3

designation of a public or private body to perform checks on behalf of the State

Party;

.4

inspection procedures, most likely based on random checks; and

.5

control procedures.

Control procedures are based on the following:

.1

running registers of cargo ships registered in the State in question against the
national register of HNS certificates issued;

.2

checking whether there is an HNS certificate on board when carrying out port
state control of foreign vessels or similar control of national vessels;

.3

checking whether an HNS certificate has been issued when considering vessels
for port state control if information about HNS certificates is available in the
database used for such screening;

.4

requiring cargo ships to give details of their HNS certificate when they (as is
common practice) identify themselves when approaching the coastline; and

.5

requiring cargo ships to give details of their HNS certificate when they give
notice to the authorities or the harbor master that there are dangerous goods on
board.

8.9
Most cargo ships would need an HNS insurance certificate from time to time. Such ships
are permanently covered by insurance when their owners are members of a P&I Club. States may
consider whether (by national law) all ships with a cargo certificate should be required by
national law to maintain HNS certificates permanently, thereby avoiding the difficulty for the
competent authorities of determining whether or not there actually is HNS on board.
Alternatively, a State may establish in national law that it is for the ship owner to prove that there
is no HNS on board.
8.10 The owner of a ship registered in a State Party and actually carrying hazardous and
noxious substances is required to maintain insurance or other financial security, such as the
guarantee of a bank or similar financial institution, in the sums fixed by applying the limits of
liability to cover liability for damage under this Convention. A compulsory insurance certificate
attesting that insurance or other financial security is in force must be issued to each ship. With
respect to a ship registered in a State Party such compulsory insurance certificate must be issued
or certified by the appropriate authority of the State of the ships registry; with respect to a ship
not registered in a State Party it may be issued or certified by the appropriate authority of any
State Party. This compulsory insurance certificate must contain the name of the ship, distinctive
number or letters and port of registry; the name and principal place of business of the owner; the
IMO ship identification number; the type and duration of security; the name and principal place
of business of insurer or other person giving security and, where appropriate, place of business
where the insurance or security is established; and the period of validity of certificate, which
shall not be longer than the period of validity of the insurance or other security.
8.11 The compulsory insurance certificate must be carried on board the ship and a copy shall
be deposited with the authorities who keep the record of the ships registry or, if the ship is not
registered in a State Party, with the authority of the State issuing or certifying the certificate.
Compulsory insurance certificates issued or certified under the authority of a State Party shall be
accepted by other States Parties for the purposes of this Convention and shall be regarded by
other States Parties as having the same force as compulsory insurance certificates issued or
certified by them even if issued or certified in respect of a ship not registered in a State Party.
A State Party may at any time request consultation with the issuing or certifying State should it
believe that the insurer or guarantor named in the compulsory insurance certificate is not
financially capable of meeting the obligations imposed by this Convention.
Chapter 9 Insurance Certificates
9.1
Each State Party must designate an authority, e.g., the maritime directorate, coastguard
agency or another private or public body, to issue insurance certificates on behalf of that State
Party. A State must decide whether or not to issue certificates to foreign vessels, and whether or
not there should be any fees or charges for the certificates.
9.2
There are no requirements in international law as to how the decisions relating to the
issue of certificates are to be made. National law may require that rules are adopted by certain
authorities, e.g., the parliament. In any events, it is important that the rules are communicated to
foreign applicants if certificates are issued to foreign ships.

9.3
One copy of the certificate must be forwarded to the authorities that keep the register of
ships registered in a State Party. Because States Parties generally issue certificates in respect of
their own vessels, this means that the issuing authority may be obliged to forward the certificate
to another authority within the same state. The issuing authorities should in any events keep a
copy.
9.4
It is for the applicant to prove that the requirements for issuing a certificate are fulfilled.
The main part of the application for a certificate is a proof of insurance issued by an insurer
confirming that the insurer undertakes the obligations of the insurer under the HNS Convention.
9.5

However, the issuing authority may wish to consider the following:

.1

does the undertaking cover all obligations required by the HNS Convention?
A State may require an express statement to this effect. If such a statement is
given, it does not matter whether the insurer is a liability insurer or another kind
of insurer;

.2

does the insurer have the financial capability necessary for his undertaking? If in
doubt, a State may require a statement to this effect from the relevant authorities
in the state in which the insurer has its main office; and

.3

will the insurer have sufficient funds available in a State Party when a claim is
made? A judgment under the HNS Convention rendered by a court in one State
Party is enforceable in any other State Party (Article 40), but not necessarily
elsewhere.

Chapter 10 Payment of Compensation

10.1 The HNS Funds main aim is to provide compensation to the extent that the compensation
provided by the ship owner, or the ship owners insurer or guarantor, is deficient or not available.
10.2 The HNS Fund normally becomes involved when the total costs of an incident exceed the
ship owners liability, i.e., the Fund pays top up compensation when the ship owner, or his
insurer cannot meet in full the damage arising from an incident. In the first instance it will be the
ship owner or his insurer who will be strictly liable to pay compensation following an incident
involving HNS. The ship owner is normally entitled to limit his liability to an amount calculated
on the basis of the ships tonnage.
10.3 If the compensation available from the ship owner or his insurer is insufficient,
supplementary payments will be made, up to certain limits, by the HNS Fund. The HNS Fund
will pay compensation in excess of the ship owners liability, but with a limit of 250 million SDR
which includes the amount actually paid by the ship owner or his insurer. HNS cargo receivers in
States party to the Convention will provide the funding for the second tier of compensation, in
the form of levies after the incident has occurred.
10.4 The involvement of both tiers in compensation payments will not create any special
complications for claimants. Claims will be submitted to the HNS Fund and, providing the
claimants can substantiate their losses, and the claimants meet the criteria for admissibility,
claimants should receive compensation from the ship owners insurer or the Fund. If the total
amount of the admissible claims is less than the maximum amount available, then all claims will
be paid in full. Persons receiving compensation under the HNS Convention are subject to the
fiscal legislation of the State where they are taxable.
10.5 The Convention provides for claims for loss of life and personal injury to have a certain
priority over other claims. Up to two thirds of the available compensation limit is reserved for
such claims, similarly to the Convention on Limitation of Liability for Maritime Claims, 1976

(LLMC '76). However, unlike LLMC '76, if there are no claims for loss of life and personal
injury, under the HNS Convention the total amount of compensation is available for payment of
claims for other types of damage.
10.6 If the total amount of the admissible claims exceeds the maximum amount available for
compensation, and subject to the priority given to claims for loss of life or personal injury, the
amount available is distributed among claimants in proportion to their established claims. All
claimants will then receive an equal proportion of their established claims.
10.7 If the particular ship causing the damage cannot be identified, a claimant need only prove
that there is a reasonable probability that the damage resulted from an incident involving one or
more ships, in order to be entitled to compensation from the HNS Fund. The Fund is exempt
from liability, in whole or in part, to a particular claimant if it can prove that the damage was
caused by the negligence or deliberate act or omission by the person who suffered the damage.
This does not apply to any parties undertaking reasonable measures after an incident has occurred
to prevent or minimize damage.
10.8

The HNS Fund shall also pay compensation, if:

.1

the damage resulted from a natural phenomenon of an exceptional inevitable and

irresistible character;

.2

the owner liable for the damage is financially incapable; or

.3

preventive measures to minimize a potential risk were taken by the ship owner.

Chapter 11 Subrogation and Recourse

11.1 In order to ensure that compensation is paid quickly to victims of incidents, (so as to
minimize financial hardship), the HNS Fund may pay compensation and thereby acquire the
rights, by subrogation that the claimants would have enjoyed against the ship owner, or the ship
owners guarantor, in order to obtain compensation. This will ensure the prompt payment of
compensation from the Fund, even before the ship owners limitation fund has been established,
without the Fund losing the right to recover from the ship owner, or the ship owners guarantor.
However, the Fund is not prevented from exercising rights of recourse or subrogations against
other persons than the ship owner and the ship owners guarantor, for example persons who have
failed to furnish information concerning the nature of the substances shipped. The Convention
also provides for similar rights of subrogation for States Parties (or agencies) which have paid
compensation for damage.
Chapter 12 Claims for Compensation and Scope of Application
12.1 The Convention will apply to any damage caused in a State Partys territorial waters and
to damage caused in the Exclusive Economic Zone (EEZ) of a State Party, or if such a zone has
not been established, in an equivalent area. Any damage caused by ships registered in, or entitled
to fly, the flag of a State Party is covered wherever it occurs, unless the damage occurs in the
territory or the territorial sea of a State not party to the Convention. Compensation is also payable
for the costs of preventive measures, wherever taken. Because anyone who has suffered
pollution damage, as defined under the Convention, in a State Party to the HNS Convention, may
make a claim for compensation, claimants may be individuals, partnerships, companies, private
organizations or public bodies, including States or local authorities.
12.2 The HNS Convention covers incidents involving the carriage of hazardous and noxious
substances by sea by any sea-going craft of any type whatsoever. However, the HNS Convention

does not cover damage caused by the polluting qualities of persistent oil, which is already
covered under the existing international regime established by the 1992 CLC, and the 1992 Fund
Convention. Non-contamination risks (fire, explosion, etc.) only are covered in respect of
persistent oil.
12.3 Also, the HNS Convention does not deal with liability and compensation for damage
caused during the transport of HNS to or from a ship. The definition of carriage by sea clarifies
in which circumstances the HNS Convention will apply:
the period of time from the time when the hazardous and noxious substances enter any
part of the ships equipment, on loading, to the time they cease to be present in any part of
the ships equipment, on discharge. If no ships equipment is used, the period begins and
ends respectively when the hazardous and noxious substances cross the ships rail.
Section 1 Presenting a Claim
1.2
Formally, claims for compensation should be submitted to the ship owner liable for the
damage, or directly against his insurer, if the claim does not exceed the ship owners liability.
The insurer will normally be one of the Protection and Indemnity Associations (P&I Clubs)
which insure the third party liabilities of ship owners.
1.3
To obtain compensation from the HNS Fund, claimants should, in the first instance,
submit their claims directly to the Fund at its designated headquarters address. Full supporting
documentation should be submitted either to the ship owner/P&I Club or to the HNS Fund. In
some cases, claims may be channelled through the office of a local surveyor designated by the
HNS Fund and the P&I Club. Claimants should in such cases submit their claims to that office,
for forwarding to the HNS Fund and the P&I Club for decision. If an incident gives rise to a
large number of claims, the HNS Fund and the P&I Club may, jointly, set up a local claims office
so that claims may be processed more easily. Claimants should then submit their claims to that
local claims office. All claims are referred to the P&I Club and to the HNS Fund for decision on
their admissibility. Admissibility of claims cannot be decided by designated local surveyors nor
by local claims offices.
1.4
Claims against the HNS Fund should be made in writing. An invoice or other relevant
supporting documentation must substantiate each item of a claim. It is the responsibility of
claimants to submit evidence supporting their claims. Each claim should contain, at least, the
following basic information:
.1

the name and address of the claimant, and any representative;

.2

the identity of the ship involved in the incident;

.3

the date, place and specific details of the incident, if known to the claimant, unless
this information is already available to the HNS Fund;

.4

the type of pollution damage sustained; and

.5

the amount of compensation claimed.

Section 2 Limitation on Claims

2.1
The HNS Convention contains provisions for the limitation of actions, also known as
time-bar provisions. Claimants should submit their claims as soon as possible after the damage
has occurred. Rights to compensation expire three years after the date when the claimant knew,
or ought reasonably to have known, of the damage and, as regards claims against the ship owner,
of the ship owners identity. In order to avoid losing their rights to compensation, all claimants

must lodge their clams in the appropriate court before the expiry of the three-year time-bar
period. Furthermore, no action may be brought later than ten years from the date of the incident
that caused the damage. Where the incident consists of several occurrences, the ten-year period
runs from the last of these. All outstanding claims will have to be lodged in the appropriate court
prior to the time bar applying to the incident.
2.2
As the time bar date approaches it is probable that the HNS Fund Secretariat will provide
advice to claimants. The government of the Member State concerned may also play a role in
advising claimants of how to protect their claims from becoming time barred. The practice of the
IOPC Funds has been to seek to continue to negotiate admissible claims with claimants after their
rights have been secured by their lodging claims in court. The HNS Fund is likely to follow the
same practice.
Chapter 13 HNS Fund
13.1 The Convention established an International Hazardous and Noxious Substances Fund
(HNS Fund) to provide compensation for damage in connection with the carriage of hazardous
and noxious substances by sea, to the extent that the protection afforded by chapter II is
inadequate or not available; and carry out the administration of the Fund. The HNS Fund must
pay compensation to any person suffering damage if such person has been unable to obtain full
and adequate compensation for the damage because no liability for the damage arises; because
the owner liable for the damage is financially incapable of meeting the obligations under this
Convention and any financial security does not cover or is insufficient to satisfy the claims for
compensation for damage; or because the damage exceeds the owners liability. Expenses
reasonably incurred or sacrifices reasonably made by the owner voluntarily to prevent or
minimize damage shall be treated as damage for the purposes of this article.
13.2 Under the Convention, the International Hazardous and Noxious Substances Fund (HNS
Fund) will be established when the Convention enters into force with the primary aim of
providing compensation for damage caused by HNS to the extent that the protection available
from the ship owner and his insurer under Article 14 of the Convention is inadequate or not
available.
13.3 The HNS Convention will establish a new compensation fund modelled on the existing
International Oil Pollution Compensation Fund (IOPC) Fund. The HNS Fund will complement
the IOPC Fund regime by covering pollution damage arising from non-persistent oils and
damage from fire, explosion or other hazards for all oils carried as cargo by sea. It will also cover
a wide range of claims arising from incidents involving other types of dangerous and polluting
cargoes carried by ship.
13.4 The Fund will be governed by an Assembly, composed of all Member States. Its first
session will be convened by the Secretary-General of IMO to be held not more than thirty days
after the entry into force of the HNS Convention.
13.5 In a Resolution of the Conference which adopted the International Convention on
Liability and Compensation for Damage in Connection with the Carriage of Hazardous and
Noxious Substances by Sea, 1996 (HNS Convention), the Assembly of the International Oil
Pollution Compensation Fund 1992 (1992 Fund) was invited to assign to the Director of the 1992
Fund, in addition to his functions under the 1992 Fund Convention, the administrative tasks
necessary for setting up the International Hazardous and Noxious Substances Fund (HNS Fund)
in accordance with the HNS Convention.
13.6 The Assembly shall consist of all States Parties to the HNS Convention. Under normal
circumstances the Assembly will meet once a year. The Assembly has a number of functions.

The Assembly will decide on the settlement of claims as against the HNS Fund. It will keep the
implementation of the Convention under review (every five years) and review the internal and
financial regulations of the HNS Fund. This will enable it to assess whether the contributing
system is working effectively and fairly. The Assembly will determine the amount of any levies
needed and adopt the annual budget. The Assembly is also required to consider, and approve as
necessary, any recommendations from the Director regarding the application of the Convention
in respect of contributing cargo. There is no specific requirement however, under the Convention
for the Director to make such recommendations, although the Director does have a range of
responsibilities relating to the operation of the HNS Fund.
13.7 For the purpose of the consideration of claims for compensation the Assembly shall
establish a Claims Committee. This is based on the established practice under the Fund
Convention whereby the majority of claims are handled by the Director; where claims involve
new issues of principle the Director submits those claims to a Committee made up of certain
States Parties elected by the Assembly.
13.8 The Assembly also has the task of admitting as observers States not parties to the
Convention and, intergovernmental and international non-governmental organizations enabling
them to attend meetings to contribute to debates on matters of policy, if appropriate. In addition
to its main task of paying compensation, the HNS Fund also has the related tasks of:
.1

assisting States Parties to find necessary expertise to prevent or mitigate damage

caused by incidents within the scope of the Convention; and

.2

providing credit facilities for preventive measures.

13.9 The HNS Fund shall be recognized as a legal person in each State Party and States must
recognize the Director as the legal representative of the HNS Fund. This provision will allow the
HNS Fund to operate in a similar manner to the IOPC Fund established by the Fund Convention.
13.10 The HNS Fund is required to meet any expenses incurred in the operation of the Fund by
a State Party, other than its representation at meetings of the Fund Bodies. The HNS Fund is
exempt in all States Parties from direct and indirect taxation, custom dues (except for duties,
taxes, or dues that merely constitute payment for public utility services). In order to ensure that
companies cannot avoid the payment of contributions, the HNS Fund would take account of
contributing cargo receipts spread among associated companies.
13.11 It should be noted that there will be some important differences in the way the HNS Fund
will operate compared to the 1992 Fund. The 1992 Fund only deals with claims for pollution
damage, whereas the HNS Fund will have to deal with a wider range of potential claims,
e.g., death and personal injury. The system for contributions to the HNS Fund is more
complicated than that for contributions to the 1992 Fund.
13.12 The Assembly will establish a Committee on Claims for Compensation (similar to
the 1992 Funds Executive Committee) with at least 7 and not more than 15 members. The
Assembly shall endeavor to secure an equitable geographical distribution of members on the
Committee and to ensure that the Member States are appropriately represented.
13.13 The HNS Fund will have a joint Secretariat with the IOPC Funds. This will enable the
HNS Fund to benefit from the experience of the IOPC Funds and would reduce the
administrative costs for both the IOPC Funds and the HNS Funds. The decision as to the
location of the Fund will be taken by the Assembly. In the interim, however, the Council has
instructed the Director of the 1992 Fund to continue the preparatory work for the time being on
the assumption that the HNS Fund would have a joint Secretariat with the IOPC Funds and
would be based in London.

Section 1 Contributions to the HNS Fund

1.1
Compensation payments made by the HNS Fund will be financed by levies on receivers
of HNS. Levies will be in proportion to the quantities of hazardous and noxious substances
received each year. This is a concept similar to that under the Fund Conventions, where receivers
of oil above a minimum threshold pay contributions.
1.2
The HNS Fund will only have one type of contributions which will cover both
administrative expenses and claims for compensation. The HNS Fund will be financed by
contributions based on the quantities of contributing cargo received in the territory of a Member
State of the HNS Fund after sea transport with both initial and annual contributions which will be
made to (1) a general account and (2) to the separate accounts. The regulations in the
Convention are designed to distribute contributions amongst the sectors of the general account
according to the relative risks presented by each sector, calculated as the weighted arithmetic
average of the ratio of established claims to the volume of contributing cargo for each sector over
the previous ten years.
1.3
The general account and the separate accounts will be available to compensate damage
caused by HNS covered by the respective account, i.e., there will be no cross-subsidization. The
Assembly will decide the total amounts of contributions to be levied to each of these accounts.
The distribution between the sectors of the general account of contributions for the compensation
of damage will be calculated according to the Convention. The Assembly decides on the
distribution of contributions for administrative costs between the sectors of the general account
and the separate accounts.
1.4
The Assembly may suspend the operation of any of the separate accounts if the relevant
quantities of contributing cargo in the preceding calendar year fall below these amounts, or if the
total unpaid contributions to that account exceed 10% of the most recent levy to that account.
Any contributions that are due to a separate account that has been suspended will be paid into the
general account and any relevant claims will be met from this account. Any decision to suspend
or re-instate the operation of an account requires a two-thirds majority at the Assembly.
Section 2 Fund Liability Limits
2.1
The HNS Fund has no obligation to compensate if damage resulted from an act of war,
hostilities, civil war or insurrection or was caused by hazardous and noxious substances which
had escaped or been discharged from a warship or other ship owned or operated by a State and
used, at the time of the incident, only on Government non-commercial service; or if the claimant
cannot prove that there is a reasonable probability that the damage resulted from an incident
involving one or more ships.

2.2
If the HNS Fund proves that the damage resulted wholly or partly either from an act or
omission done with intent to cause damage by the person who suffered the damage or from the
negligence of that person, the HNS Fund may be exonerated wholly or partially from its
obligation to pay compensation to such person. Generally, the aggregate amount of
compensation payable by the HNS Fund in respect to an incident is limited, so as not
exceed 250 million units of account. Interest accrued will not be taken into account for the
computation of the maximum compensation payable by the HNS Fund.
Section 3 HNS Fund Accounts
3.1
The HNS Fund will have up to four accounts and be divided into sectors for oil as defined
as defined in the Convention (oil account); liquefied natural gases of light hydrocarbons with
methane as the main constituent (LNG) (LNG account); and liquefied petroleum gases of light
hydrocarbons with propane and butane as the main constituents (LPG) (LPG account). Each
account will only meet claims resulting from incidents involving the respective cargoes,
i.e., there will be no cross-subsidization. Contributions by individual receivers to the separate
accounts will be in proportion to the quantities of HNS received.
3.2
The general account will have at least two sectors: one for bulk solids and one for other
HNS; and up to five, if the operation of one or more of the three separate accounts is postponed.
The following consideration of chemical seaborne trade highlights some of the hazards presented
by the products falling solely within the general account:
.1

several organics are flammable, whereas only few present a risk to the marine
environment;

.2

inorganics mainly shipped in bulk are neither flammable nor polluting, but are
corrosive. Preventive measures to be taken after an incident are very limited as
they are immediately diluted when released; and

.3

environmental pollution is the main hazard of vegetable or animal oils and fats.

3.3
Annual contributions to the general account and to each separate account shall be levied
only as required to make payments by the account in question. Annual contributions will be
determined by the Assembly designated by the Convention and calculated on the basis of the
units of contributing cargo received or, in respect of cargoes discharged during the preceding
calendar year or such other year as the Assembly may decide. The Assembly shall decide the
total amount of annual contributions to be levied to the general account and to each separate
account. Following that decision the Director of the Fund will identify the amount of the annual
contribution to each account, on the basis of a fixed sum for each unit of contributing cargo
reported in respect of the person during the preceding calendar year or such other year as the
Assembly may decide. The Assembly may also levy annual contributions for administrative costs
and decide on the distribution of such costs between the sectors of the general account and the
separate accounts.
3.4
Rights to compensation under the Convention are extinguished unless an action is brought
within three years from the date when the person suffering the damage knew or ought reasonably
to have known of the damage and of the identity of the owner. In no case may an action be
brought later than ten years from the date of the incident which caused the damage. Where the
incident consists of a series of occurrences, the ten-year period runs from the date of the last of
such occurrences.
Chapter 14 Competent Courts

14.1 Claimants can only take legal action in a court in the State Party in whose territory or
waters the damage occurred. In this context waters means the territorial sea4 or the Exclusive
Economic Zone (EEZ)5, or an equivalent area, of a State Party. This also applies to legal actions
against any provider of insurance or financial security for the owners liability, i.e., normally the
ship owners insurer. Different rules apply if damage other than pollution damage to the
environment occurs beyond the territorial seas of States Parties. In this case, the location of the
competent court may depend upon the flag or ownership or the location of the ship owners
limitation fund.
14.2 Actions against the HNS Fund for compensation must be brought only before a court
having jurisdiction over the owner who is liable for damage caused by the relevant incident or
before a court in a State Party which would have been competent if an owner had been liable.
Where an action for compensation for damage has been brought, such court has exclusive
jurisdiction over any action against the HNS Fund for compensation. These State Parties ensure
that the HNS Fund has the right to intervene as a party to any legal proceedings instituted in
accordance with this Convention before a competent court of that State against the owner or the
owners guarantor and that absent that right the Fund is not bound by any settlement.
14.3 Where damage by contamination is caused exclusively beyond the territory and territorial
sea of a State Party, legal action may only be brought in the competent courts of the following
States:
.1

the State Party where the ship is registered, or for an unregistered ship, the State
whose flag the ship is entitled to fly;

.2

the State Party where the ship owner has his habitual place of residence or
principal place of business; or

.3

the State Party where the ship owners limitation fund has been established.

14.4 Legal action taken against the HNS Fund should be brought before the same court as
actions taken against the ship owner. However, if the ship owner is exempted from liability, or
for another reason no ship owner is liable, legal action taken against the Fund must be brought in
a court which would have been competent had the ship owner been liable. Where an incident has
occurred and the ship involved has not been identified, legal action may be brought against the
HNS Fund only in States Parties where damage has occurred. Where legal action is being taken
against both the ship owner and the HNS Fund, the court where action has been taken against the
ship owner has exclusive jurisdiction over legal action against the Fund. Where a legal action has
been brought against the ship owner in a State Party, each party to the proceedings shall be
entitled to notify the HNS Fund of the proceedings.
14.5 Each State Party has an obligation under the HNS Convention to recognize and enforce
the judgments given by courts in other States Parties, with certain specified exceptions, namely:
where the judgment was obtained by fraud; or where the defendant was not given reasonable
notice and a fair opportunity to present the case. This obligation to recognize and enforce
judgments applies to judgments against the HNS Fund as well as to those against the ship owner.
Chapter 15 Reasonable Costs
15.1 Another main role of the coastal State is in obtaining compensation for pollution damage.
The coastal State needs to keep two aspects of compensation constantly in mind as it decides its
response.
15.2

First, the possibility of cost recovery needs to be balanced against other important factors,

such as the expectations of the local population and the need to preserve the environment for its
own sake. In general, the coastal State will only recover costs of response measures that were
reasonable in the circumstances. Claims for the costs of measures to prevent or minimize
pollution damage are assessed on the basis of objective criteria. The fact that a government or
other public body decides to take certain measures does not in itself mean that the measures are
reasonable for the purpose of compensation under the Conventions. The technical reasonableness
is assessed on the basis of the facts available at the time of the decision to take the measures.
However, those in charge of the operations should continually reappraise their decisions in the
light of developments and technical advice. Claims for costs of response measures are not
accepted when it could have been foreseen that the measures taken would be ineffective, for
example if techniques for sinkers or floaters were used when the HNS readily dissolved or if
booms or snares were deployed with no regard to their ineffectiveness in fast flowing waters
with sinkers present. On the other hand, the fact that the measures proved to be ineffective is
not in itself a reason for rejection of a claim.
15.3 The costs incurred, and the relationship between those costs and the benefits derived or
expected, should be reasonable. For example, a high degree of cleaning, beyond removal, of
exposed rocky shores inaccessible to the public is rarely justified, since natural cleaning through
natural biodegradation is likely to be more effective. On the other hand, thorough cleaning is
usually necessary in the case of a public amenity beach, particularly immediately prior to or
during the holiday season. Account is taken of the particular circumstances of an incident.
15.4 Costs of reasonable aerial surveillance operations to establish the extent of pollution
at sea and on shorelines and to identify resources vulnerable to contamination are accepted.
Where several organizations are involved in the response to an incident, aerial surveillance
should be properly co-ordinated to avoid duplication of effort.
15.5 Claims for costs of clean-up operations may include the cost of personnel and the hire or
purchase of equipment and materials. Claims for the costs of equipment placed on standby, but
not actually deployed, are assessed at a lower rate to reflect the reduced wear on the equipment.
Reasonable costs of cleaning and repairing clean-up equipment and of replacing materials
consumed during clean-up operations are accepted. In the assessment of claims for the cost of
equipment purchased for a particular spill, deductions will be made to take into account the
remaining value of the equipment if it is suitable for use in future incidents or for some other
purpose. If a public authority, as part of its contingency planning, has purchased and maintained
materials or equipment so that they are immediately available to respond should an HNS
release occur, compensation is paid for a reasonable part of the purchase price of the items
actually used. This is usually based on a daily rate that is calculated in such a way that the
capital cost of the item is recovered over its expected useful working life, plus a proportion of
the costs of storing and maintaining the equipment. A reasonable element of profit would also be
included if the equipment were owned by a private contractor.

15.6 Reasonable costs for storing and disposing of the collected material are accepted. If the
claimant has received any extra income following the sale recovered HNS product, these
proceeds would normally be deducted from any compensation to be paid.
15.7 Clean-up operations are often carried out by public authorities or quasi-public
bodies using permanently employed personnel or vessels and vehicles owned by such
authorities or bodies. Compensation is paid for reasonable additional costs incurred by such
organizations, that is, expenses that arise solely as a result of the incident and which would not
have been incurred had the incident and related operations not taken place.
15.8 Compensation is also paid for a reasonable proportion of so-called fixed costs incurred by
public authorities and quasi-public bodies, that is, costs which would have arisen for the
authorities or bodies even if the incident had not occurred, such as normal salaries for
permanently employed personnel. However, in order to qualify for compensation, such costs
must correspond closely to the clean-up period in question and should not include remote
overhead charges.
15.9 Salvage operations may in some cases include an element of preventive measures. If the
primary purpose of such operations is to prevent pollution damage, the costs incurred qualify in
principle for compensation under the 1992 Conventions. However, if salvage operations have
another purpose, such as saving the ship and/or the cargo, the costs incurred are not accepted
under the Conventions. If the operations are undertaken for the purpose of both preventing
pollution and saving the ship and/or the cargo, but it is not possible to establish with any certainty
the primary purpose, the costs are apportioned between pollution prevention and salvage.
The assessment of claims for the costs of preventive measures associated with salvage is not
made on the basis of the criteria applied for determining salvage awards, but the compensation is
limited to costs, including a reasonable element of profit.
15.10 A discussion of what types of damage qualify for compensation under the international
regime is beyond the scope of this publication. However, in addition to costs of clean-up and
preventive measures, compensation is also available for the following types of claims:
.1

property damage;

.2

economic losses by fishermen or those engaged in mariculture;

.3

economic losses in the tourism sector; and

.4

costs for reinstatement of the environment.

15.11 The speed with which claims are settled depends on how long it takes for claimants to
provide the information required. It is advisable to contact those bodies likely to be involved in
paying compensation (and their technical advisers) as soon as possible after an incident to discuss
the presentation of claims.
15.12 Claimants should submit their claims as soon as possible after the damage has occurred.

Part IVII
International Conventions, Codes and Guidelines Involving HNS
(need to be verified by Legal committee)
Chapter 1 Introduction
1.1
The international framework regulating the transport of HNS at sea is derived from the
following legal instruments, including Codes and whichGuidelines, which have been developed
within the framework of the International Maritime Organization (IMO).
Chapter 2 IMO regulatory framework covering the preparedness and response to marine
pollution incidents involving HNS - Protocol on Preparedness, Response and Co-operation
to Pollution Incidents by Hazardous and Noxious Substances, 2000 (OPRC-HNS Protocol)
2.1
This IMO Protocol (OPRC-HNS Protocol) is based on the International Convention on
Oil Pollution Preparedness, Response and Co-operation (OPRC, 1990), which is designed to help
Governments respond to major oil pollution incidents. The OPRC Convention and the
OPRCHNS Protocol are designed to facilitate international co-operation and mutual assistance in
preparing for and responding to a major pollution incident and to encourage contracting States to
develop and maintain an adequate capability to deal with pollution emergencies.
2.2
The OPRC-HNS Protocol will enter into force on 14 June 2007 and deals specifically
with preparedness and response to marine pollution at coastal state level. Like the 1990 OPRC
Convention for oil, it aims to provide a global framework for international co-operation in
responding to major incidents or threats of marine pollution. It expands the scope of the OPRC
Convention to apply in whole or in part, to pollution incidents by hazardous and noxious
substances other than oil.
2.3
Parties to the OPR-HNS Protocol are required to establish measures for dealing with
pollution incidents by HNS and more specifically the following is required from them:
.1

national and regional systems for preparedness and response: Parties are required
to establish national systems for responding effectively to pollution incidents and
to establish a national contingency plan for preparedness and response. In
addition, Parties are required, either individually or through co-operation, to
establish equipment stockpiles, training and response exercise programs and to
co-operate in the field of information exchange;

.2

emergency plans and reporting: Ships carrying hazardous and noxious liquid
substances are required to carry a shipboard pollution emergency plan to deal
specifically with incidents involving HNS; and

.3

enhancement of international co-operation in pollution response, technical

co-operation and assistance, co-operation in R&D and information services.

2.4
For the purposes of the HNS Protocol, a Hazardous and Noxious Substance is defined as
any substance other than oil which, if introduced into the marine environment is likely to create
hazards to human health, to harm living resources and marine life, to damage amenities or to
interfere with other legitimate uses of the sea. It should be noted that the definition of an HNS as
defined by the OPRC-HNS Protocol 2000 differs widely from the definition of an HNS under the
International Convention on Liability and Compensation for Damage in Connection with the
Carriage of Hazardous and Noxious Substances (HNS) by sea, otherwise knows as the HNS
Convention.

2.5
The HNS Protocol will ensure that ships carrying hazardous and noxious liquid
substances are covered by preparedness and response regimes similar to those already in
existence for oil incidents. Under the Protocol and MARPOL requirements ships are required to
carry a shipboard pollution emergency plan to deal specifically with incidents involving HNS,
which are defined as any substance other than oil which, if introduced into the marine
environment is likely to create hazards to human health, to harm living resources and marine life,
to damage amenities or to interfere with other legitimate uses of the sea.
2.6
In 1996, IMO adopted the International Convention on Liability and Compensation for
Damage in Connection with the Carriage of Hazardous and Noxious Substances (HNS) by sea,
which provides for a compensation and liability regime for incidents involving these substances
(it has not yet entered into force). Liability and compensation regimes for oil pollution incidents
are covered by the 1992 Protocols to the International Convention on Civil Liability for Oil
Pollution Damage, 1969 and the International Convention on the Establishment of an
International Fund for Compensation for Oil Pollution Damage, 1971.
Chapter 23 International Conventions governing the carriage of chemicals by ship
International Convention for the Safety of Life at Sea (SOLAS, 1974), as amended
23.1 Chapter VII of SOLAS covers the carriage of dangerous goods, and more specifically the
carriage of dangerous goods in:
.1

packaged form (part A). This part includes provisions for the classification,
packing, marking, labellinglabeling and placarding, documentation and stowage
of dangerous goods. This chapter makes mandatory the International Maritime
Dangerous Goods (IMDG) Code, developed by IMO, which is constantly updated
to accommodate new dangerous goods and to supplement or revise existing
provisions; and

.2

solid form in bulk (part A1). This part covers the documentation, stowage and
segregation requirements for these goods and requires reporting of incidents
involving such goods.

Chapter 34 International Convention for the Prevention of Marine Pollution from

Ships, 1973, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78
Section 1 Introduction
34.1.1 The MARPOL Convention is the main international convention covering prevention of
pollution of the marine environment by ships from operational or accidental causes. It is a
combination of two treaties adopted in 1973 and 1978 respectively and updated by amendments
through the years. The International Convention for the Prevention of Pollution from Ships
(MARPOL) was adopted on 2 November 1973 at IMO and covered pollution by oil, chemicals,
harmfuland harmful substances in packaged form, sewage and garbage. The Protocol of 1978
relating to the 1973 International Convention for the Prevention of Pollution from Ships (1978
MARPOL Protocol) was adopted at a Conference on Tanker Safety and Pollution Prevention in
February 1978 held in response to a spate of tanker accidents in 1976-1977. The combined
instrument is referred to as the International Convention for the Prevention of Marine Pollution
from Ships, 1973, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78), and it
entered into force on 2 October 1983 (Annexes I and II).
34.1.2 The Convention includes regulations aimed at preventing and minimizing pollution from
ships - both accidental pollution and that from routine operations - and currently includes six
technical Annexes:

Annex I
Annex II

Regulations for the Prevention of Pollution by Oil

Regulations for the Control of Pollution by Noxious Liquid Substances
in Bulk
Prevention of Pollution by Harmful Substances Carried by Sea in Packaged
Form
Prevention of Pollution by Sewage from Ships
Prevention of Pollution by Garbage from Ships
Prevention of Airof Air Pollution from Ships (entry into force 19 May
2005)

Annex III
Annex IV
Annex V
Annex VI

34.1.3 States Parties must accept Annexes I and II, but the other Annexes are voluntary.
The 1978 MARPOL Protocol allowed States to become Party to the Convention by first
implementing Annex I (oil), as it was decided that Annex II (chemicals) would not become
binding until three years after the Protocol entered into force. This gave States time to overcome
technical problems in Annex II, which for some had been a major obstacle in ratifying the
Convention.
Section 2 Annex II
34.2.1 MARPOL Annex II includes regulations for the control of pollution by noxious liquid
substances in bulk. This mandatory technical annex details the discharge criteria and measures
for the control of pollution by noxious liquid substances carried in bulk. MARPOL Annex II
grades noxious liquid substances carried in bulk into categories graded according to the hazard
they present to marine resources, human health or amenities.
34.2.3 Annex II details the discharge criteria and measures for the control of pollution by
noxious liquid substances carried in bulk. Some 250 substances were evaluated and included in
the list appended to the Convention. The discharge of their residues is allowed only to reception
facilities until certain concentrations and conditions (which vary with the category of substances)
are complied with. No discharge of residues containing noxious substances is permitted
within 12 miles of the nearest land.
34.2.4 According to the revised MARPOL Annex II (which entered into force
on 1 January 2007) the new four-category categorization system for noxious and liquid
substances carried in bulk is as follows:
Category

Description

Category X

Noxious Liquid Substances which, if discharged into the sea from tank
cleaning or deballasting operations, are deemed to present a major hazard to
either marine resources or human health and, therefore, justify the
prohibition of discharge into the marine environment.

Category Y

Category Z

Other
Substances

Noxious Liquid Substances which, if discharged in the sea from tank

cleaning or deballasting operations, are deemed to present a hazard to either
marine resources or human health or cause harm to amenities or other
legitimate uses of the sea and therefore justify a limitation on the quality and
quantity of the discharge into the marine environment.
Noxious Liquid Substances which, if discharged into the sea form tank
cleaning or deballasting operations, are deemed to present a minor hazard to
either marine resources or human health and, therefore, justify less stringent
restrictions on the quality and quantity of the discharge into the marine
environment.
Substances which have been evaluated and found to fall outside Category X,
Y or Z because they are considered to present no harm to marine resources,
human health, amenities or other legitimate uses of the sea when discharged
into the sea from tank cleaning of deballasting operations. The discharges
of bilge or ballast water or other residues or mixtures containing these
substances are not subject to any requirements of MARPOL Annex II.

34.2.5 The revised annex includes a number of other significant changes. Improvements in ship
technology,technology; such as efficient stripping techniques, has made possible significantly
lower permitted discharge levels of certain products whichproducts, which have been
incorporated into Annex II. For ships constructed on or after 1 January 2007 the maximum
permitted residue in the tank and its associated piping left after discharge will be set at a
maximum of 75 litres for products in categories X, Y and Z - compared with previous limits
which set a maximum of 100 or 300 litres, depending on the product category.
34.2.6 Carriage of chemicals in bulk is covered by regulations in SOLAS chapter VII - Carriage
of dangerous goods and MARPOL Annex II - Regulations for the Control of Pollution by
Noxious Liquid Substances in Bulk. Both Conventions require chemical tankers built
after 1 July 1986 to comply with the International Bulk Chemical Code (IBC Code), which gives
international standards for the safe transport by sea in bulk of liquid dangerous chemicals, by
prescribing the design and construction standards of ships involved in such transport and the
equipment they should carry so as to minimize the risks to the ship, its crew and to the
environment, having regard to the nature of the products carried. The basic philosophy is one of
ship types related to the hazards of the products covered by the Codes. Each of the products may
have one or more hazard properties which include flammability, toxicity, corrosivity and
reactivity.
34.2.7 Consequential amendments to the International Bulk Chemical Code (IBC Code) were
also adopted in October 2004, reflecting the changes to MARPOL Annex II. The amendments
incorporate revisions to the categorization of certain products relating to their properties as
potential marine pollutants as well as revisions to ship type and carriage requirements following
their evaluation by the Evaluation of Hazardous Substances Working Group. Ships constructed
after 1986 carrying substances identified in chapter 17 of the IBC Code must follow the
requirements for design, construction, equipment and operation of ships contained in the Code.
34.2.8 The IBC Code lists chemicals and their hazards and gives both the ship type required to
carry that product as well as the environmental hazard rating. Chemical tankers constructed
before 1 July 1986 should comply with the requirements of the Code for the Construction and
Equipment of Ships Carrying Dangerous Chemicals in Bulk (BCH Code) the predecessor of the
IBC Code.

Section 3 Annex III

34.3.1 Prevention of pollution by harmful substances in packaged form is the first of the
Conventions optional annexes. States ratifying the Convention must accept Annexes I and II but
can choose not to accept the other three hence they have taken much longer to enter into force.
Annex III contains general requirements for the issuing of detailed standards on packing,
marking, labellinglabeling, documentation, stowage, quantity limitations, exceptions and
notifications for preventing pollution by harmful substances.
34.3.2 MARPOL Annex III includes regulations for the prevention of pollution by harmful
substances in packaged form and includes general requirements for the issuing of detailed
standards on packing, marking, labellinglabeling, documentation, stowage, quantity limitations,
exceptions and notifications for preventing pollution by harmful substances. The International
Maritime Dangerous Goods (IMDG) Code has, since 1991, included marine pollutants. For the
purpose of Annex III, harmful substances are those identified as marine pollutants in the
IMDG Code.
Chapter 45 Protocol on Liability and Compensation for Damage Resulting from
Transboundary Movements of Hazardous Wastes and Their Disposal
45.1 Also known as the Basel Protocol on Liability and Compensation, the Convention was
adopted on10 December 1999. The Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and their Disposal (the Convention) provides that the
Parties shall co-operate with a view to adopting, as soon as practicable, a protocol setting out
appropriate rules and procedures in the field of liability and compensation for damage resulting
from the transboundary movement and disposal of hazardous wastes and other wastes.
The Protocol talks began in 1993 in response to the concerns of developing countries about their
lack of funds and technologies for coping with illegal dumping or accidental spills.
45.2 The objective of the Protocol is to provide for a comprehensive regime for liability and
for adequate and prompt compensation for damage resulting from the transboundary movement
of hazardous wastes and other wastes and their disposal including illegal traffic in those wastes.
The Protocol addresses who is financially responsible in the event of an incident. Each phase of a
transboundary movement, from the point at which the wastes are loaded on the means of
transport to their export, international transit, import, and final disposal, is considered.
45.3 On 10 December 1999, the Basel Protocol on Liability and Compensation for Damage
resulting from Transboundary Movements of Hazardous Wastes and their Disposal (the
Protocol) was adopted by the fifth meeting of the Conference of the Parties. The Protocol is
intended to respond to the concerns of developing countries about the lack of funds and
technologies for coping with illegal dumping or accidental spills and its objective is to provide
for a comprehensive regime for liability as well as adequate and prompt compensation for
damage resulting from the transboundary movement of hazardous wastes and other wastes,
including incidents occurring during illegal traffic in those wastes.
45.4 The Protocol applies to damage due to an incident occurring during a transboundary
movement of hazardous wastes and other wastes and their disposal, including illegal traffic, from
the point where the wastes are loaded on the means of transport in an area under the national
jurisdiction of a State of export until the time at which the notification of the completion of
disposal of the wastes has occurred.
45.5 The exporter of waste is strictly liable for damage until the disposer has taken possession
of the waste. Thereafter the disposer is strictly liable for damage. Those who are strictly liable
under the Protocol, i.e., exporters and disposers, have to establish insurance, bonds or other
financial guarantees covering their liability.

45.6 Under the Protocol the State of export must ensure that wastes are taken back where there
has been illegal traffic because of the conduct of the exporter or generator. A claim made
pursuant to the Protocol must be brought within ten years from the date of the incident, or within
five years from the date the claimant knew or ought reasonably to have known of the damage,
provided that this is no more than ten years from the date of the incident.
45.7 Claim damages include loss of life or personal injury; loss of or damage to property other
than property held by the person liable in accordance with the present Protocol; loss of income
directly deriving from an economic interest in any use of the environment, incurred as a result of
impairment of the environment, taking into account savings and costs; the costs of measures of
reinstatement of the impaired environment, limited to the costs of measures actually taken or to
be undertaken; and the costs of preventive measures, including any loss or damage caused by
such measures, to the extent that the damage arises out of or results from hazardous properties of
the wastes involved in the transboundary movement and disposal of hazardous wastes and other
wastes subject to the Convention.
45.8 The person of an incident shall be liable for damage until the disposer has taken
possession of the hazardous wastes and other wastes. Thereafter the disposer shall be liable for
damage. If the State of export is the notifier or if no notification has taken place, the exporter
shall be liable for damage until the disposer has taken possession of the hazardous wastes and
other wastes. Any person shall be liable for damage caused or contributed to by his lack of
compliance with the provisions implementing the Convention or by his wrongful intentional,
reckless or negligent acts or omissions. No liability pertains if the damage was the result of an
act of armed conflict, hostilities, civil war or insurrection; the result of a natural phenomenon of
exceptional, inevitable, unforeseeable and irresistible character; wholly the result of compliance
with a compulsory measure of a public authority of the State where the damage occurred; or
wholly the result of the wrongful intentional conduct of a third party, including the person who
suffered the damage. If two or more persons are liable according to this Article, the claimant
shall have the right to seek full compensation for the damage from any or all of the persons
liable.
Chapter 56 Convention on Limitation of Liability for Maritime Claims, 1976
56.1 The Convention on Limitation of Liability for Maritime Claims establishes certain
uniform rules relating to the limitation of liability for maritime claims as well as limits the
liability of a ship owner, including liability in an action brought against the vessel itself. An
insurer of liability for claims subject to limitation in accordance with the rules of this Convention
is also covered.
56.2 The claims subject to limitation of liability include claims in respect of loss of life or
personal injury or loss of or damage to property (including damage to harbour works, basins and
waterways and aids to navigation), occurring on board or in direct connection with the operation
of the ship or with salvage operations, and consequential resulting loss; claims; claims in respect
of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage; claims in
respect of other loss resulting from infringement of rights other than contractual rights, occurring
in direct connection with the operation of the ship or salvage operations; claims in respect of the
raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded
or abandoned, including anything that is or has been on board such ship; claims in respect of the
removal, destruction or the rendering harmless of the cargo of the ship; and claims of others not
the liable party regarding measures taken in order to avert or minimize loss and further loss
caused by such measures.
56.3 The rules of this Convention do not apply to: claims for salvage or contribution in general
average; claims; claims for oil pollution damage within the meaning of the International

Convention on Civil Liability for Oil Pollution Damage, dated 29 November 1969 or of any
amendment or Protocol thereto which is in force; claims subject to any international convention
or national legislation governing or prohibiting limitation of liability for nuclear damage; claims
against the ship owner of a nuclear ship for nuclear damage; or claims by servants of the ship
owner or salvor whose duties are connected with the ship or the salvage operations, if under the
contract of service the ship owner or salvor is not entitled to limit his liability or to limit his
liability to an amount greater than that provided for in the Convention.
56.4 A person liable shall not be entitled to limit his liability if it is proved that the loss
resulted from his personal act or omission, committed with the intent to cause such loss, or
recklessly and with knowledge that such loss would probably result.
56.5 Where a person entitled to limitation of liability under the rules of this Convention has a
claim against the claimant arising out of the same occurrence, their respective claims shall be set
off against each other and the provisions of this Convention shall only apply to the balance, if
any.
56.6 Specifically calculated limits of liability for claims arising on any distinct occasion shall
be calculated under the Convention based on the type of damage and ship tonnage. Such
computations are done in the form of Special Drawing Rights as defined by the International
Monetary Fund.
6.57 The limits of liability apply to the aggregate of all claims which arise on any distinct
occasion: (a) against the person or persons responsible; or (b) against the ship owner of a ship
rendering salvage services from that ship and the salvor or salvors operating from such ship and
any person for whose act, neglect or default he or they are responsible; or (c) against the salvor
or salvors who are not operating from a ship or who are operating solely on the ship to, or in
respect of which, the salvage services are rendered and any person for whose act, neglect or
default he or they are responsible.
56.8 The limits of liability apply to the aggregate of all claims which may arise on any distinct
occasion against the person or persons in respect of the ship and any person for whose act,
neglect or default he or they are responsible.
56.9 Limitation of liability may be invoked although a fund has not been constituted.
However, a State Party may provide in its national law that, where an action is brought in its
Courts to enforce a claim subject to limitation, a person liable may only invoke the right to limit
liability if a limitation fund has been constituted in accordance with the provisions of this
Convention or is constituted when the right to limit liability is invoked.
56.10 Any person alleged to be liable may constitute a fund with competent authority in any
State Party in which legal proceedings are instituted in respect of claims subject to limitation.
The fund shall be constituted as are applicable to claims for which that person may be liable,
together with interest thereon from the date of the occurrence giving rise to the liability until the
date of the constitution of the fund. Any fund thus constituted shall be available only for the
payment of claims in respect of which limitation of liability can be invoked. A fund may be
constituted, either by depositing the sum, or by producing a guarantee acceptable under the
legislation of the State Party where the fund is constituted and considered to be adequate by the
Court or other competent authority.
56.11 The fund will be distributed among the claimants in proportion to their established claims
against the fund. If, before the fund is distributed, the person liable, or his insurer, has settled a
claim against the fund such person shall, up to the amount he has paid, acquire by subrogation
the rights which the person so compensated would have enjoyed under this Convention.

56.12 Where a limitation fund has been constituted, any person making a claim against the fund
shall be barred from exercising any right in respect of such claim against any other assets of a
person by or on behalf of whom the fund has been constituted. After a limitation fund has been
constituted, any ship, security or other property which is arrested or attached for a claim raised
against the fundproperty, which is arrested or attached for a claim raised against the fund, may be
released by order of the Court or other competent authority. Such release shall always be ordered
if the limitation fund has been constituted:
.1

at the port where the occurrence took place, or, if it took place out of port, at the
first port of call thereafter;

.2

at the port of disembarkation in respect of claims for loss of life or personal

injury;

.3

at the port of discharge in respect of damage to cargo; or

.4

in the State where the arrest is made.

56.13 The Convention applies whenever any person seeks to limit his liability before the Court
of a State Party or seeks to procure the release of a ship or other property or the discharge of any
security given within the jurisdiction of any such State. Nevertheless, each State Party may
exclude wholly or partially from the application of this Convention any person who does not
reside in or does not have his principal place of business in a State Party or any ship in relation to
which the right of limitation is invoked or whose release is sought and which does not at the time
specified above fly the flag of a State Party. Certain vessels on the internal waters of a nation
may be excluded, as are platforms and other special use floating structures.
Chapter 67 Convention on the Prevention of Marine Pollution by Dumping of Wastes and
Other Matter
67.1 The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other
Matter was drawn up at the Inter-Governmental Conference on the Dumping of Wastes at Sea,
held in London from 30 October to 10 November 1972.
67.2 The Convention reflects concern that the marine environment and the living organisms
which it supports are of vital importance to humanity, and all people have an interest in assuring
that it is so managed that its quality and resources are not impaired; that the capacity of the sea to
assimilate wastes and render them harmless, and its ability to regenerate natural resources, is not
unlimited; and; and that States have the sovereign right to exploit their own resources pursuant
to their own environmental policies, and the responsibility to ensure that activities within their
jurisdiction or control do not cause damage to the environment of other States or of areas beyond
the limits of national jurisdiction.
67.3 The Convention recognizes that marine pollution originates in many sources, such as
dumping and discharges through the atmosphere, rivers, estuaries, outfalls and pipelines, and that
it is important that States use the best practicable means to prevent such pollution and develop
products and processes which will reduce the amount of harmful wastes to be disposed of.
67.4 Conventions Contracting Parties seek effective control of all sources of pollution of the
marine environment, and pledge themselves especially to take all practicable steps to prevent the
pollution of the sea by the dumping of waste and other matter that is liable to create hazards to
human health, to harm living resources and marine life, to damage amenities or to interfere with
other legitimate uses of the sea.

67.5 Dumping means any deliberate disposal at sea of wastes or other matter from vessels,
aircraft, platforms or other man-made structures at sea and any deliberate disposal at sea of
vessels, aircraft, platforms or other man-made structures at sea. It does not include the disposal
at sea of wastes or other matter incidental to, or derived from the normal operations of vessels,
aircraft, platforms or other man-made structures at sea and their equipment, other than wastes or
other matter transported by or to vessels, aircraft, platforms or other man-made structures at sea,
operating for the purpose of disposal of such matter or derived from the treatment of such wastes
or other matter on such vessels, air-craft, platforms or structures. Nor does it include placement
of matter for a purpose other than the mere disposal thereof, provided that such placement is not
contrary to the aims of this Convention.
67.6 The disposal of wastes or other matter directly arising from, or related to the exploration,
exploitation and associated off-shore processing of sea-bed mineral resources are not covered by
the provisions of this Convention.
67.7 The Convention prohibits the dumping of any wastes or other matter in whatever form or
condition except:
.1

the dumping of wastes or other matter listed in Annex I is prohibited;

.2

the dumping of waste or other matter listed in Annex II requires a prior special
permit; and

.3

the dumping of all other wastes or matter requires a prior general permit, which
permit will be issued only after careful consideration of factors, including prior
studies of the characteristic of the dumping site.

67.8 The Convention provisions do not apply when it is necessary to secure the safety of
human life or of vessels, aircraft, platforms or other man-made structures at sea in cases of
force majeure caused by stress of weather, or in any case which constitutes a danger to human
life or a real threat to vessels, aircraft, platforms or other man-made structures at sea, if dumping
appears to be the only way of averting the threat and if there is every probability that the damage
consequent upon such dumping will be less than would otherwise occur. Such dumping shall be
so conducted as to minimize the likelihood of damage to human or marine life. These instances
must be reported under the Convention.
Chapter 78 Resolution A.898(A.898 (21) adopted on 25 November 1999 Guidelines on
Ship Owners Responsibilities in Respect of Maritime Claims
78.1 This resolution provides guidelines to recommend minimum international standards for
the responsibilities of ship owners in respect of maritime claims, and seeks to discourage the
operation of sub-standard and inadequately insured ships, or the situation in which ship owners
do not have effective insurance cover, or another effective form of financial security so that
eligible claimants may not obtain prompt and adequate compensation,
78.2 The guidelines on ship owners responsibilities in respect of maritime claims address
cargo claims in respect of loss of, damage to, or delay in the delivery of cargo carried by sea and
address insurance which with or without deductibles, includes, for example, indemnity insurance
of the type currently provided by members of the International Group of P&I Clubs, and other
effective forms of insurance (including self-insurance) and financial security offering similar
conditions of cover. The guidelines are written within recognition of the International
Convention on Limitation of Liability for Maritime Claims 1976.
78.3 Ship owners are urged to comply with the guidelines in respect of all seagoing ships of at
least 300 gross tonnage. Ship owners are also encouraged to comply with the Guidelines in
respect of ships of less than 300 gross tonnages. The guidelines do not apply to any warship,

naval auxiliary, or other ship owned or operated by a State and used, for the time being, only on
government non-commercial service, unless that State decides otherwise.
78.4 Under the guidelines ship owners should ensure that liability for relevant claims up to the
limits of liability are covered by insurance. If, however, the ship owner is entitled to invoke a
limit of liability lower than that set by Convention, the insurance need only respond up to that
lower limit. The insurance need respond only if the ship owners liability has been established at
law; and the ship owner has complied with all the conditions of cover prescribed under the
insurance contract.
78.5 The guidelines also recommend that ship owners ensure that their ships have on board a
certificate issued by the insurer. Where more than one insurer provides cover for relevant claims,
a single certificate confirming the identity of the main liability insurer is sufficient. As a
minimum, the certificate should include: the name of the ship; the ships IMO number; the name
of the insurer; the place of business of the insurer; the name of the assured and co-assured, if
known; and an attestation that the insurance meets the recommended standards set out in the
guidelines regarding the risks covered by that insurer.
Chapter 89 Convention on Civil Liability for Damage caused during Carriage of
Dangerous Goods by Road, Rail and Inland Navigation Vessels (CRTD)
(Geneva, 10 October 1989)
89.1 This Convention which is structured similarly to that of the HNS Convention is
concerned with the carriage of dangerous goods and seeks to apply international technical
standards aimed at securing safety during such carriage and to establish uniform rules ensuring
adequate and speedy compensation for damage caused during carriage of dangerous goods by
road, rail and inland navigation vessels,
89.2 The focus of the Convention is the carriage by inland navigation vessel of dangerous
goods on board a ship. Accordingly, ship means any vessel or craft, not being a sea-going ship
or sea-borne craft, of any type whatsoever. Vehicle means a road vehicle, a railway wagon or
a ship. Where several vehicles are coupled together to form a train, the train is regarded as a
single vehicle.
89.3 This Convention shall apply to claims, other than claims arising out of any contract for
the carriage of goods or passengers, for damage caused during carriage of dangerous goods by
road, rail or inland navigation vessel. Carriage of dangerous goods by road, rail or inland
navigation vessel includes the period from the beginning of the process of loading the goods onto
the vehicle for carriage until the end of the process of unloading the goods.
89.4 The carrier at the time of an incident shall be liable for damage caused by any dangerous
goods during their carriage by road, rail or inland navigation vessel. If an incident consists of a
series of occurrences having the same origin, the liability shall attach to the carrier at the time of
the first of such occurrences. If two or more persons are liable as a carrier under this Convention,
they shall be jointly and severally liable. No liability shall attach to the carrier if he proves that:
the damage resulted from an act of war, hostilities, civil war, insurrection or a natural
phenomenon of an exceptional, inevitable and irresistible character; or the damage was wholly
caused by an act or omission with the intent to cause damage by a third party; or the consignor or
any other person failed to meet his obligation to inform him of the dangerous nature of the goods,
and that neither he nor his servants or agents knew or ought to have known of their nature.
89.5 The liability of the road carrier and of the rail carrier under this Convention for claims
arising from any one incident is limited. The carrier may constitute a fund with the court or other
competent authority of any one of the States Parties.

89.6 The carriers liability shall be covered by insurance or other financial security, such as a
bank guarantee, if the dangerous goods are carried in the territory of a State Party. The insurance
or other financial security shall cover the entire period of the carriers liability under this
Convention in the sums fixed by applying the limits of liability prescribed in article 9 and shall
cover the liability of the person named in the certificate as carrier or, if that person is not the
carrier as defined in article 1, paragraph 8, of such person as does incur liability under this
Convention.
89.7 Each State Party shall designate one or several competent authorities to issue or approve
certificates attesting that carriers have a valid insurance or other financial security in accordance
with the provisions of this Convention. The certificate shall be issued or approved by the
competent authority: of the State of registration in respect of a carrier whose vehicle is registered
in a State Party; or of the State Party where the carrier has his principal place of business or, if he
has none, his habitual residence, if the vehicle is not registered. The certificate shall contain the
following particulars: the number of the certificate; the; the type of, and the particulars
identifying, the road vehicle or ship; the; the name of the carrier and his principal place of
business or, if he has none, his habitual residence; the type of security; the name and principal
place of business of the insurer or other person providing security; the period of validity of the
certificate which shall not be longer than the period of validity of the insurance or other security.
89.8 Any claim for compensation under articles 5 or 6 may be brought directly against the
insurer or other person providing financial security for the carriers liability or, in the case of a
road vehicle to which the green card system applies, against the insurer or the green card bureau
of the State where the incident occurred.
89.9 Rights of compensation under this Convention shall be extinguished unless an action is
brought within three years from the date at which the person suffering the damage knew or ought
reasonably to have known of the damage and of the identity of the carrier. The period may be
extended if the parties so agree after the incident. In no case, however, shall an action be brought
after ten years from the date of the incident whichincident, which caused the damage.
Chapter 910 Prevention of Transboundary Harm from Hazardous Activities 2001
910.1 The United Nations General Assembly is provided with the authority to initiate studies
and make recommendations for the purpose of encouraging the progressive development of
international law and its codification, consonant with the Rio Declaration on Environment and
Development of 13 June 1992.
109.2 Prevention of transboundary harm arising from hazardous activities is an objective well
emphasized by principle 2 of the Rio Declaration902 and confirmed by the International Court of
Justice in its advisory opinion of 8 July 1996 on the Legality of the Use by a State of Nuclear
Weapons in Armed Conflict as now forming part of the corpus of international law.
109.3 The scope of the articles is limited to activities not prohibited by international law and
which involve a risk of causing significant transboundary harm through their physical
consequences and further limits the scope of the articles to those activities carried out in the
territory or otherwise under the jurisdiction or control of a State.
109.4 The agreement sets out the general context, in which the topic of prevention is elaborated
keeping in view the mandate given to the Commission to codify and develop international law.
Activities covered under the present topic of prevention require States to engage in co-operation
and accommodation in their mutual interest. States are free to formulate necessary policies to
develop their natural resources and to carry out or authorize activities in response to the needs of
their populations. In so doing, however, States have to ensure that such activities are carried out

taking into account the interests of other States and therefore the freedom they have within their
own jurisdiction is not unlimited.
109.5 The prevention of transboundary harm from hazardous activities should also be seen in
the context of the general principles incorporated in the Rio Declaration and other considerations
that emphasize the close inter-relationship between issues of environment and development.
109.6 Any activity which involves the risk of causing significant transboundary harm through
the physical consequences is within the scope of the articles. Different types of activities could be
envisaged under this category. As the title of the proposed articles indicates any hazardous and
by inference any ultra-hazardous activity which involves a risk of significant transboundary harm
is covered. An ultra-hazardous activity is perceived to be an activity with a danger that is rarely
expected to materialize but might assume, on that rare occasion grave (more than significant,
serious or substantial) proportions.
109.7 The concept of prevention has assumed great significance and topicality. The emphasis
upon the duty to prevent as opposed to the obligation to repair, remedy or compensate has several
important aspects. Prevention should be a preferred policy because compensation in case of harm
often cannot restore the situation prevailing prior to the event or accident. Discharge of the duty
of prevention or due diligence is all the more required as knowledge regarding the operation of
hazardous activities, materials used and the process of managing them and the risks involved is
steadily growing. From a legal point of view, the enhanced ability to trace the chain of causation,
i.e., the physical link between the cause (activity) and the effect (harm), and even the several
intermediate links in such a chain of causation, makes it also imperative for operators of
hazardous activities to take all steps necessary to prevent harm. In any event, prevention as a
policy is better than cure.
109.8 The issue of prevention, therefore, has rightly been stressed by the Experts Group on
Environmental Law of the World Commission on Environment and Development. Article 10
recommended by the Group in respect of transboundary natural resources and environmental
interferences thus reads: .States shall, without prejudice to the principles laid down in articles 11
and 12, prevent or abate any transboundary environmental interference or a significant risk
thereof which causes substantial harm i.e., harm which is not minor or insignificant. It must be
further noted that the well-established principle of prevention was highlighted in the arbitral
award in the Trail Smelter case and was reiterated not only in principle 21 of the Stockholm
Declaration905 and principle 2 of the Rio Declaration but also in General Assembly
resolution 2995 (XXVII) of 15 December 1972 on co-operation between States in the field of the
environment. This principle is also reflected in principle 3 of the 1978 draft Principles of
Conduct in the Field of the Environment for the Guidance of States in the Conservation and
Harmonious Utilization of Natural Resources Shared by Two or More States, which provided
that States must avoid to the maximum extent possible and reduce to the minimum extent
possible the adverse environmental effects beyond its jurisdiction.
109.9 The articles deal with the concept of prevention in the context of authorization and
regulation of hazardous activities whichactivities, which pose a significant risk of transboundary
harm. Prevention in this sense, as a procedure or as a duty, deals with the phase prior to the
situation where significant harm or damage might actually occur, requiring States concerned to
invoke remedial or compensatory measures, which often involve issues concerning liability.
109.10 Under the agreement the State of origin shall take all appropriate measures to prevent
significant transboundary harm or at any event to minimize the risk. States concerned shall
co-operate in good faith and, as necessary, seek the assistance of one or more competent
international organizations in preventing significant transboundary harm or at any event in
minimizing the risk. States concerned shall take the necessary legislative, administrative or other

action, including the establishment of suitable monitoring mechanisms to implement the

provisions of the present articles.
109.11 The State of origin shall require its prior authorization for: any activity within the scope
of the present articles carried out in its territory or otherwise under its jurisdiction or control; any
major change in an activity; any plan to change an activity which may transform it into one
falling within the scope of the articles.
109.12 Any decision in respect of the authorization of an activity within the scope of the present
articles shall, in particular, be based on an assessment of the possible transboundary harm caused
by that activity, including any environmental impact assessment.
109.13 If the assessment indicates a risk of causing significant transboundary harm, the State of
origin shall provide the State likely to be affected with timely notification of the risk and the
assessment and shall transmit to it the available technical and all other relevant information on
which the assessment is based.
109.14 The States concerned shall enter into consultations, at the request of any of them, with a
view to achieving acceptable solutions regarding measures to be adopted in order to prevent
significant transboundary harm or at any event to minimize the risk thereof. The States concerned
shall agree, at the commencement of such consultations, on a reasonable time frame for the
consultations. If the consultations fail to produce an agreed solution, the State of origin shall
nevertheless take into account the interests of the State likely to be affected in case it decides to
authorize the activity to be pursued, without prejudice to the rights of any State likely to be
affected. The States concerned shall take into account all relevant factors and circumstances,
including: the degree of risk of significant transboundary harm and of the availability of means of
preventing such harm, or minimizing the risk thereof or repairing the harm; the importance of the
activity, taking into account its overall advantages of a social, economic and technical character
for the State of origin in relation to the potential harm for the State likely to be affected; the risk
of significant harm to the environment and the availability of means of preventing such harm, or
minimizing the risk thereof or restoring the environment; the degree to which the State of origin
and, as appropriate, the State likely to be affected are prepared to contribute to the costs of
prevention; the economic viability of the activity in relation to the costs of prevention and to the
possibility of carrying out the activity elsewhere or by other means or replacing it with an
alternative activity; the standards of prevention which the State likely to be affected applies to the
same or comparable activities and the standards applied in comparable regional or international
practice.
109.15 States of origin and receipt must share information and provide notification necessary to
achieve the ends of this agreement. Data and information vital to the national security of the
State of origin or to the protection of industrial secrets or concerning intellectual property may be
withheld, but the State of origin shall co-operate in good faith with the State likely to be affected
in providing as much information as possible under the circumstances.
109.16 The State of origin shall develop contingency plans for responding to emergencies, in
co-operation, where appropriate, with the State likely to be affected and competent international
organizations. The State of origin shall, without delay and by the most expeditious means, at its
disposal, notify the State likely to be affected of an emergency concerning an activity within the
scope of the present articles and provide it with all relevant and available information.
109.17 Suggestions have been made at different stages of the evolution of the present articles to
specify a list of activities in an annex to the present articles with an option to make additions or
deletions to such a list in the future as appropriate. States could also be given the option to add or
delete items to the list whichlist, which they may include in any national legislation aimed at
implementing the obligations of prevention. However, specification of a list of activities in an
annex could create problems. Any such list of activities is likely to be under inclusion and could

become quickly dated from time to time in the light of fast evolving technology. Further, except
for certain ultra-hazardous activities whichactivities, which are mostly the subject of special
regulation, e.g., in the nuclear field or in the context of activities in outer space, the risk that
flows from an activity is primarily a function of the particular application, the specific context
and the manner of operation. It is felt that a generic list could not capture these elements. It is
always open to States to specify activities coming within the scope of the articles in any regional
or bilateral agreements or to do so in their national legislation regulating such activities and
implementing obligations of prevention.
109.18 Dispute resolution is within the context of a United Nations Secretary-General appointed
Chairperson international commission represented by the parties to the dispute.
Chapter 101 The International Convention On Salvage, IMO 1989
11.1 The International Convention on Salvage sought to determining by agreement uniform
international rules regarding salvage operations, recognize the increased concern for the
protection of the environment, and address international rules presently contained in the
Convention for the Unification of Certain Rules of Law relating to Assistance and Salvage at
Sea, done at Brussels, 23 September 1910. The Convention recognized the major contribution
which efficient and timely salvage operations can make to the safety of vessels and other
property in danger and to the protection of the environment and sought to establish adequate
incentives are available to persons who undertake salvage operations in respect of vessels and
other property in danger.
11.2 Under the Convention salvage operation meant any act or activity undertaken to assist a
vessel or any other property in danger in navigable waters or in any other waters whatsoever.
Damage to the environment meant substantial physical damage to human health or to marine life
or resources in coastal or inland waters or areas adjacent thereto, caused by pollution,
contamination, fire, explosion or similar major incidents.
11.3 The Convention did not apply to fixed or floating platforms or to mobile offshore drilling
units when such platforms or units are on location engaged in the exploration, exploitation or
production of sea-bed mineral resources. Nor did the Convention apply to warships or other
non-commercial vessels owned or operated by a State and entitled, at the time of salvage
operations, to sovereign immunity under generally recognized principles of international law
unless that State decides otherwise.
11.4 The Convention did apply to any salvage operation save to the extent that a contract
otherwise provided expressly or by implication. The Convention recognized that the master has
the authority to conclude contracts for salvage operations on behalf of the owner of the vessel
and the master or the owner of the vessel have the authority to conclude such contracts on behalf
of the owner of the property on board the vessel. Such a contract could be annulled or modified
if: the contract had been entered into under undue influence or the influence of danger and its
terms are inequitable; or the payment under the contract was excessively large or small for the
services actually rendered.
11.5 The Convention recognized that the salvor owed a duty to the owner of the vessel or other
property in danger: to carry out the salvage operations with due care; to exercise due care to
prevent or minimize damage to the environment; to seek assistance from other salvors; and to
accept the intervention of other salvors when reasonably requested to do so by the owner or
master of the vessel or other property in danger. Theses obligations provided that the amount of
his reward shall not be prejudiced should it be found that such a request was unreasonable.

11.6 Under the Convention the owner and master of the vessel or the owner of other property
in danger owed a duty to the salvor: to exercise due care to prevent or minimize damage to the
environment; and to co-operate fully with him during the course of the salvage operations; and
when the vessel or other property has been brought to a place of safety, to accept redelivery when
reasonably requested by the salvor to do so.
11.7 Under the Convention salvage operations which have had a useful result give right to a
reward. Except as otherwise provided, no payment is due under this Convention if the salvage
operations have had no useful result. The reward is be fixed with a view to encouraging salvage
operations, taking into account the following criteria without regard to the order in which they
are presented below: the salved value of the vessel and other property; the skill and efforts of the
salvors in preventing or minimizing damage to the environment; the measure of success obtained
by the salvor; the nature and degree of the danger; the time used and expenses and losses
incurred by the salvors; the skill and efforts of the salvors in salving the vessel, other property
and life; the risk of liability and other risks run by the salvors or their equipment; the promptness
of the services rendered; the availability and use of vessels or other equipment intended for
salvage operations; and the state of readiness and efficiency of the salvors equipment and the
value thereof.
11.8 If the salvor has carried out salvage operations in respect of a vessel which by itself or its
cargo threatened damage to the environment and has failed to earn a reward under the
Convention at least equivalent to the special compensation assessable, he shall be entitled to
special compensation from the owner of that vessel equivalent to his expenses. If the salvor by
his salvage operations has prevented or minimized damage to the environment, the special
compensation payable by the owner to the salvor may be increased up to a maximum of 30% of
the expenses incurred by the salvor. However, if it deems it fair and just to do so a review
tribunal may increase such special compensation further, but in no event shall the total increase
be more than 100% of the expenses incurred by the salvor. Salvors expenses means the
out-of-pocket expenses reasonably incurred by the salvor in the salvage operation and a fair rate
for equipment and personnel actually and reasonably used in the salvage operation.
10.1 The main purpose of the Salvage Convention 1989 was to review the international rules
contained in the 1910 Salvage Convention, to ensure that those who undertake salvage operations
are provided with sufficient incentive and to reflect the interests of environmental protection in
the way salvage contracts work.
10.2 The Convention applies whenever judicial or arbitration proceedings relating to matters
dealt with in the Convention are brought in a State Party (see article 2). It applies to all types of
salvage operations in navigable waters or in any other waters whatsoever except to those relating
to fixed or floating platforms or mobile offshore drilling units which are actually on location and
ships that are entitled to sovereign immunity (unless such immunity is waived). It applies to any
ship or craft or any structure capable of navigation and property not permanently and
intentionally attached to the shoreline. Because of the wide definition of damage to the
environment (article 1), its environmental protection provisions apply not just to damage to
marine flora and fauna, but also to human health, and the cause may be pollution, contamination,
fire, explosion or any similar major incidents.
10.3 The parties to a salvage contract can vary the provisions of the Convention in their
contract, but they cannot vary the duties to prevent or minimize damage to the environment
which the Convention contains. These duties are, therefore, applicable whenever the Convention
applies to a salvage operation, even if the other provisions have been varied by the contract.
10.4 The main obligations of a salvor, which are owed not to the coastal State but to the
owners of the ship and property in danger, require the salvor to not only carry out the salvage
operations with due care, but in doing this, he must exercise due care to prevent or minimize
damage to the environment. In this way, due care to protect the environment becomes a legal

duty in all of the salvage operations to which the Convention applies, and it cannot be varied by
the contract. In return, article 13(1) grants to the salvor the right to have the skill he has exercised
and the efforts he has made in preventing or minimizing damage to the environment taken into
account when the reward for successful or partly successful salvage is fixed. Also, the risk of
liability he has run (which would include liability for damage to the environment) may also be
taken into account. However, salvage services accepted on article 13 of the Salvage
Convention 1989 with Lloyds Open Form are based on the principle of no cure no pay and
the property must be delivered to Owners in order for an award to be made, notwithstanding the
provisions of article 14.
10.5 However, if, despite his due care, the salvage operations were not successful, or if they
were only partly successful, or if the value of the successfully salved ship, cargo and freight at
risk was low, it would be possible for the salvor to have spent considerable sums in fulfilling his
duty to protect the environment, which are not recouped, let alone rewarded. The salvor has an
incentive to provide salvage services in the event of low value high risk operations where there is
threat of damage to the environment. This is achieved by a provision for the salvor to be awarded
special compensation equivalent to his out of pocket expenses in circumstances where the salvor
has actually prevented or minimized damage to the environment. There are two other
preconditions to the award of this special compensation:
.1

the salvor must have carried out salvage operations in respect of a ship which by
itself or its cargo threatened damage to the environment; and

.2

the amount of any reward earned (article 13) must be less than the amount of
special compensation assessed (article 14).

10.6 The Convention therefore envisages that, in every case where the ship or cargo actually
threaten damage to the environment, two calculations will be carried out: the reward to be fixed
under article 13 and the special compensation to be fixed under article 14. If the article 13 reward
figure exceeds the figure for special compensation, then in fact only the reward is payable. If the
special compensation figure under article 14 exceeds the reward figure, then the reward is topped
up to the level of the special compensation figure (see article 14(4)). The salvor does not get paid
twice, but his environmental efforts can lead to the enhancement of the total remuneration he
receives from the salvage services he performs.
10.7 The Special Compensation under article 14 varies according to the circumstances. If there
was a threat of damage to the environment, but in fact the salvor did not by his salvage
operations prevent or minimize such damage, then the special compensation figure is equal to his
reasonably incurred out-of-pocket expenses plus a fair rate for equipment and personnel actually
and reasonably used in the salvage operations (which we shall call below the salvage
expenses). If, on the other hand, his salvage operations did prevent or minimize damage to the
environment, then the special compensation figure may be increased by up to 30% of the salvage
expenses. Where exceptional service has been rendered, the special compensation may be
increased still more, but in no case shall the total increase be more than 100% of the expenses
incurred by the salvor.
10.8 If the salvor is negligent, both the reward and the special compensation figures may be
reduced. If he is not negligent, at worst he may end up merely with his salvage expenses
reimbursed if there was a threat to the environment. He must therefore do his job with the care
and skill for which the salvage industry is noted before he earns a good remuneration. He must
also carefully consider the location of the casualty in relation to the definition of damage to the
environment, as, if the casualty is not within or close to coastal or inland waters or areas
adjacent thereto, then the Special Compensation provisions of article 14 may not apply. In this
event, the salvor could be back to the traditional no cure no pay provisions.

10.9 The article 14 Special Compensation was introduced to provide salvors with an incentive
to provide salvage services for low value high risk operations such that they would be
recompensed in the event of successfully preventing or minimizing damage to the environment.
It was incorporated into Lloyds Open Form and provided for the payment of salvage expenses
even if the property itself was not saved. However, because security was not demanded of the
owner until after the salvage was completed, because of the lack of clarity on the definition of
coastal, areas adjacent thereto, substantial and the threat of damage to the environment
many article 14 awards were subject to extensive litigation while these points were argued and
the amount of the award was assessed. Salvors became discouraged and were reluctant to provide
salvage services in low reward operations. A simpler and more effective system was required to
remove these anomalies.
10.10 The answer to the problems arising from Special Compensation under article 14 was a
commercial solution which was the introduction of the Special Compensation P&I Club Clause,
(SCOPIC), on 1 August 1999, (included in appendix 7). The latest edition of the SCOPIC Clause
is SCOPIC 2007. This clause, which is supplementary to any Lloyds Form of Salvage
Agreement No Cure No Pay that incorporates the provisions of article 14, removed the need
for the salvor to prove there was a threat of damage to the environment. SCOPIC also provides
the salvor with the incentive that security for any SCOPIC claim will be provided to the salvor by
the Shipowners within two working days of the SCOPIC Clause being invoked, and SCOPIC
established a means of assessing the reward by means of a set tariff of rates for equipment and
personnel.
7.2.11 For the salvor to get the benefit of the SCOPIC Clause he must incorporate same into his
Lloyds Form, and in LOF 2000 this is done by ticking the appropriate box. Thereafter the salvor
must give written notice to the shipowner that he is invoking the provisions of the SCOPIC
Clause. If the salvor does not invoke the clause it will not come into effect, and he will also lose
any possibility of claiming under Article 14 (Special Compensation) of the 1989 Convention.
Any compensation payable under the SCOPIC Clause is assessed only from the time it is
invoked.
7.2.12 If the traditional award under Article 13 exceeds the amount due under the SCOPIC
Clause, then there is a penalty discount. 25% of the amount by which the Article 13 Award
exceeds the SCOPIC remuneration is deducted from the Article 13 Award. This is to discourage
salvors from routinely invoking SCOPIC. As with Article 14 Special Compensation, SCOPIC
remuneration is only payable to the extent that it exceeds the Article 13 Award.
7.3

Environmental Salvage
7.3.1 For some time the salvage industry has been advocating that the time has come
when a separate award should be made to a salvor, in addition to the award for saving
property, for the salvors actions in preventing or minimizing damage to the environment.
Marine property insurers support this view, as they resent the fact that at present any
Article 13 Award contains some considerations for the actions and expenses incurred by a
salvor in protecting the environment, and this is something they do not insure. A
shipownerss liability insurers, normally his P&I Club, insure liabilities for pollution
damage.
7.3.2 The salvage industry is concerned that in many marine casualties the environment
is now the primary consideration, after safety of life. Frequently salvors are required by a
coastal state to take actions that are based upon protection of the environment, rather than
the saving of the property. The salvage industry considers that the traditional reward
mechanism does not allow for a proper reward to reflect the actions taken by a salvor in
preventing or minimizing damage to the environment. Equally the property insurers
would like to see future awards for the salvage of property being confined to that subject,

and no longer including some unknown element for preventing or minimizing damage to
the environment.
7.3.3 This is a complex matter that is now the subject of discussions between the
various interests; Salvors, Property Insurers, Shipowners and P&I Clubs. It is hoped that
a conclusion on the way ahead will be reached within 2009.

Chapter 112 International Convention for the Safety of Life at Sea (SOLAS), 1974
1211.1 The SOLAS Convention in its successive forms is generally regarded as the most
important of all international treaties concerning the safety of merchant ships. The first version
was adopted in 1914, in response to the Titanic disaster, the second in 1929, the third in 1948,
and the fourth in 1960. As a result the 1974 Convention has been updated and amended on
numerous occasions. The Convention in force today is sometimes referred to as SOLAS, 1974, as
amended.
1211.2 The main objective of the SOLAS Convention is to specify minimum standards for the
construction, equipment and operation of ships, compatible with their safety. Flag States are
responsible for ensuring that ships under their flag comply with its requirements, and a number of
certificates are prescribed in the Convention as proof that this has been done. Control provisions
also allow Contracting Governments to inspect ships of other Contracting States if there are clear
grounds for believing that the ship and its equipment do not substantially comply with the
requirements of the Convention this procedure is known as port State control.
1211.3 The current SOLAS Convention includes Articles setting out general obligations,
amendment procedure and so on, followed by an Annex divided into 12 chapters as follows:
Chapter I-1
Chapter II-1
Chapter II-2
Chapter III
Chapter IV
Chapter V
Chapter VI
Chapter VII
Chapter VIII
Chapter IX
Chapter X
Chapter XI-1
Chapter XI-2
Chapter XII

General Provisions
Construction
Fire protection, fire detection and fire extinction
Life-saving appliances and arrangements
Radiocommunications
Safety of navigation
Carriage of Cargoes
Carriage of dangerous goods
Nuclear ships
Management for the Safe Operation of Ships
Safety measures for high-speed craft
Special measures to enhance maritime safety
Special measures to enhance maritime security
Additional safety measures for bulk carriers

1211.4 For purposes of HNS interest the most significant chapters are the following:
1211.4.1
Chapter II-2 Fire protection, fire detection and fire extinction. The chapter
includes detailed fire safety provisions for all ships and specific measures for passenger ships,
cargo ships and tankers. They include the following principles: division of the ship into main
and vertical zones by thermal and structural boundaries; separation of accommodation spaces

from the remainder of the ship by thermal and structural boundaries; restricted use of
combustible materials; detection of any fire in the zone of origin; containment and extinction of
any fire in the space of origin; protection of the means of escape or of access for fire-fighting
purposes; ready availability of fire-extinguishing appliances; minimization of the possibility of
ignition of flammable cargo vapour.
1211.4.2
Chapter VI Carriage of Cargoes. The chapter covers all types of cargo (except
liquids and gases in bulk) which, owing to their particular hazards to ships or persons on board,
may require special precautions. The regulations include requirements for stowage and securing
of cargo or cargo units (such as containers). The chapter requires cargo ships carrying grain to
comply with the International Grain Code.
1211.4.3
Chapter VII Carriage of dangerous goods. The regulations are contained in
subordinate parts:
.1

part A Carriage of dangerous goods in packaged form includes provisions for

the classification, packing, marking, labellinglabeling and placarding,
documentation and stowage of dangerous goods. Contracting Governments are
required to issue instructions at the national level and the chapter makes
mandatory the International Maritime Dangerous Goods (IMDG) Code, developed
by IMO, which is constantly updated to accommodate new dangerous goods and
to supplement or revise existing provisions;

.2

part A-1 Carriage of dangerous goods in solid form in bulk covers the
documentation, stowage and segregation requirements for these goods and
requires reporting of incidents involving such goods;

.3

part B covers Construction and equipment of ships carrying dangerous liquid

chemicals in bulk and requires chemical tankers built after 1 July 1986 to comply
with the International Bulk Chemical Code (IBC Code);

.4

part C covers Construction and equipment of ships carrying liquefied gases in

bulk and gas carriers constructed after 1 July 1986 to comply with the
requirements of the International Gas Carrier Code (IGC Code); and

.5

part D includes special requirements for the carriage of packaged irradiated

nuclear fuel, plutonium and high-level radioactive wastes on board ships and
requires ships carrying such products to comply with the International Code for
the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and High-Level
Radioactive Wastes on Board Ships (INF Code).

1211.4.4
The chapter requires carriage of dangerous goods to be in compliance with the
relevant provisions of the International Maritime Dangerous Goods Code (IMDG Code). The
IMDG Code was first adopted by IMO in 1965 and has been kept up to date by regular
amendments, including those needed to keep it in line with United Nations Recommendations on
the Transport of Dangerous Goods which sets the basic requirements for all the transport modes.
1211.4.5
Chapter XII Additional safety measures for bulk carriers. The chapter includes
structural requirements for bulk carriers over 150 metres in length.
1211.5 A number of amendments have been made to SOLAS affecting HNS transportation.
These are summarized below.
1211.6 In 1981 amendments to chapters II-2 rearranged to take into account strengthened fire
safety requirements for cargo ships and passenger ships. The revised chapter II-2 incorporated

the requirements of resolution A.327(A.327 (IX) Recommendation concerning fire safety

requirements for cargo ships, which included 21 regulations based on the principles of:
separation of accommodation spaces from the remainder of the ship by thermal and structural
boundaries; protection of means of escape; early detection, containment or extinction of any fire;
and restricted use of combustible materials. Other amendments to chapter II-2 related to
provisions for halogenated hydrocarbon extinguishing systems, special requirements for ships
carrying dangerous goods, and a new regulation 62 on inert gas systems.
1211.7 In 1983 amendments to chapter VII extended its application to chemical tankers and
liquefied gas carriers by making reference to two new Codes, the International Code for the
Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code) and
the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in
Bulk (IGC Code). Both apply to ships built on or after 1 July 1986.
1211.8 In December 1992 three codes were amended. Amendments to the International Code for
the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code)
and the International Code for the Construction and Equipment of Ships Carrying Liquefied
Gases in Bulk (IGC Code) entered into force on 1 July 1994 and affect ships built after that date.
Amendments to the Code for the Construction and Equipment of Ships Carrying Dangerous
Chemicals in Bulk (BCH Code) entered into force on 1 July 1994. The Code is voluntary and
applies to existing ships.
1211.9 In May 1994 amendments by Conference established chapter IX: Management for the
Safe Operation of Ships. This new chapter to the Convention was designed to make mandatory
the International Safety Management Code, which was adopted by IMO in November 1993
(Assembly resolution A.741(18)). The amendments introducing the new chapter IX entered into
force on 1 July 1998. The chapter applies to passenger ships and tankers from that date and to
cargo ships and mobile drilling units of 500 gross tonnage and above from 1 July 2002. The
Code establishes safety management objectives whichobjectives, which are:
.1

to provide for safe practices in ship operation and a safe working environment;

.2

to establish safeguards against all identified risks; and

.3

to continuously improve safety management skills of personnel, including

preparing for emergencies.

1211.10
The Code requires a safety management system (SMS) to be established by the
Company, which is defined as the ship owner or any person, such as the manager or bareboat
charterer, who has assumed responsibility for operating the ship.
1211.11
The company is then required to establish and implement a policy for achieving
these objectives. This includes providing the necessary resources and shore-based support. Every
company is expected to designate a person or persons ashore having direct access to the highest
level of management. The procedures required by the ISM Code should be documented and
compiled in a Safety Management Manual, a copy of which should be kept on board.
1211.12
In addition a new chapter XI: Special Measures to Enhance Safety entered into
force on 1 January 1996. At Regulation 2 it extends to bulk carriers aged five years and above,
the enhanced program of surveys applicable to tankers under MARPOL 73/78. The enhanced
surveys should be carried out during the periodical, annual and intermediate surveys prescribed
by the MARPOL and SOLAS Conventions. The related guidelines on enhanced surveys pay
special attention to corrosion. Coatings and tank corrosion prevention systems must be
thoroughly checked and measurements must also be carried out to check the thickness of plates.

In November 1997 Conference amendments adopted a Protocol adding a new

1211.13
chapter XII to the Convention entitled Additional Safety Measures for Bulk Carriers. The
regulations dealt with carriage of cargoes with a density of 1,000 kg/m3 and their capacity to
withstand flooding of any one cargo hold, taking into account dynamic effects resulting from
presence of water in the hold.
1211.14
In May 1999 amendments were made to chapter VII to make the International
Code for the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and High-Level
Radioactive Wastes on Board Ships (INF Code) mandatory. The INF Code sets out how the
material covered by the Code should be carried, including specifications for ships. The material
covered by the Code includes:
.1

irradiated nuclear fuel material containing uranium, thorium and/or plutonium

isotopes which has been used to maintain a self-sustaining nuclear chain reaction;

.2

plutonium the resultant mixture of isotopes of that material extracted from

irradiated nuclear fuel from reprocessing; and

.3

high-level radioactive wastes liquid wastes resulting from the operation of the
first stage extraction system or the concentrated wastes from subsequent
extraction stages, in a facility for reprocessing irradiated fuel, or solids into which
such liquid wastes have been converted.

1211.15
The INF Code applies to all ships regardless of the date of construction and size,
including cargo ships of less than 500 gross tonnage, engaged in the carriage of INF cargo. The
INF Code does not apply to warships, naval auxiliary or other ships used only on government
non-commercial service, although Administrations are expected to ensure such ships are in
compliance with the Code.
In June 2001 amendments to chapter VII Carriage of Dangerous Goods and to
1211.16
the International Code for the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and
High-Level Radioactive Wastes on Board Ships (INF Code) were made to align them with
Amendment 30 to the International Maritime Dangerous Goods (IMDG) Code.
In May 2002 amendments to chapter SOLAS VII (Carriage of Dangerous Goods)
1211.17
made the International Maritime Dangerous Goods Code (IMDG Code) mandatory and separated
requirements for packaged goods and goods in solid form in bulk into two Parts A and A-1. The
IMDG Code was adopted in a mandatory form. However, some provisions were made
recommendatory. In practice, this means that from the legal point of view, the whole of the
IMDG Code is made mandatory, but provisions of recommendatory nature are editorially
expressed in the Code (e.g., using the word should instead of shall) to clarify their status.
1211.18
The mandatory IMDG Code incorporates certain changes relating to specific
products, as well as relevant elements of the amendments to the UN Recommendations on the
Transport of Dangerous Goods, Model Regulations adopted by the UN Committee of Experts on
the Transport of Dangerous Goods at its twenty-first session in Geneva from 4 to 13 December
2000.
1211.19
In January 2005 certain amendments to the International Maritime Dangerous
Goods (IMDG) Code update several sections of the Code relating to the carriage of dangerous
goods and also include a new chapter 1.4 on Security Provisions intended to address the security
of dangerous goods being transported by sea.
1211.20
December 2004 amendments to chapter XII (Additional safety measures for bulk
carriers) incorporated revisions to some regulations and new requirements relating to double-side

skin bulk carriers. The amendments include the addition of a new regulation 14 on restrictions
from sailing with any hold empty and requirements for double-side skin construction as an
optional alternative to single-side skin construction. The option of double-side skin construction
will apply to new bulk carriers of 150m in length and over, carrying solid bulk cargoes having a
density of 1,000 kg/m3 and above.
1211.21
In May 2006 amendments to chapter II-2 Fire protection included changes
relating to Regulation 9 Containment of fire, so as to include a requirement for water-mist
nozzles which should be tested and approved in accordance with the guidelines approved by the
Organization; and in Regulation 15 Arrangements for oil fuel, lubricating oil and other
flammable oils, new text relating to the application of the regulation to ships constructed on or
after 1 February 1992 and on or after 1 July 1998.
Chapter 123 Prevention of Pollution by Harmful Substances Carried by Sea in Packaged
Form
1312.1 Regulations for the Prevention of Pollution by Harmful Substances Carried by Sea in
Packaged Form are contained in Annex III of MARPOL 73/78. The Marine Environment
Protection Committee (MEPC) at its fifty-fifth session in October 2006 adopted the revised
MARPOL Annex III Regulations for the prevention of pollution by harmful substances carried
by sea in packaged form. The Annex has been revised to harmonize the regulations with the
criteria for defining marine pollutants which have been adopted by the UN Transport of
Dangerous Goods (TDG) Sub-Committee, based on the United Nations Globally Harmonized
System of Classification and LabellingLabeling of Chemicals (GHS).
1312.2 The regulations were developed in order to identify marine pollutants so that they could
be packed and stowed on board ship in such a way as to minimize accidental pollution as well as
to aid recovery by using clear marks to distinguish them from other (less harmful) cargoes. The
regulations require the issuing of detailed standards on packaging, marking, labelling,
documentation, stowage, quantity limitations, exceptions and notifications, for preventing or
minimizing pollution by harmful substances.
1312.3 The rules on discharging harmful goods are straightforward: Jettisoning of harmful
substances carried in packaged form shall be prohibited, except where necessary for the purpose
of securing the safety of the ship or saving life at sea. The Annex states that appropriate
measures based on the physical, chemical and biological properties of harmful substances shall
be taken to regulate the washing of leakages overboard, provided that compliance with such
measures would not impair the safety of the ship and persons on board. (MARPOL Annex III,
Regulation 7(1))
1312.4 The Annex applies to all ships carrying harmful substances in packaged form, or in
freight containers, portable tanks or road and rail tank wagons. However, implementation of the
Annex was initially hampered by the lack of a clear definition of harmful substances carried in
packaged form. This was remedied by amendments to the International Maritime Dangerous
Goods Code (IMDG Code) to include marine pollutants.
1312.5 The IMDG Code was first adopted by IMO in 1965 and lists hundreds of specific
dangerous goods together with detailed advice on storage, packaging and transportation. The
amendments extending the Code to cover marine pollutants, which entered into force in 1991,
added the identifier marine pollutant to all substances classed as such. All packages containing
marine pollutants must be marked with a standard marine pollutant mark.
1312.6 Annex III of MARPOL was also amended at the same time, to make it clear that harmful
substances are those substances which are identified as marine pollutants in the International

Maritime Dangerous Goods Code (IMDG Code). (Regulation 1). Annex III is optional so that
States who sign up to MARPOL 73/78 Annexes I and II are not required to adopt the Annex at
the same time. Annex III received sufficient ratifications by 1991 and entered into force
on 1 July 1992.

Part IV
International Codes and Guidelines Involving HNS
Chapter 1 Introduction
1.1
The international framework regulating the transport of HNS at sea is supplemented by
international codes and guidelines the following legal instruments, which have been developed
within the framework of the International Maritime Organization (IMO).
Chapter 132 The International
resolution A.741(18)) 1993

Safety

Management

Code

(IMO

Assembly

213.1 Concerned with regulations and guidelines concerning maritime safety and the prevention
and control of marine pollution from ships, the ISMC followed a history of IMO intervention in
the area of marine pollution. IMO resolution A.680(17), regarding management and operation
of ships to develop, implement and assess safety and pollution prevention management. This
resolution was revoked with passage of the ISMC. IMO resolution A.596(15), addressing
shipboard and shore-based management for the safe operation of ships and for the prevention of
marine pollution. IMO resolution A.441(XI), sought states to ensure that the owner of a ship
which flies the flag of that State provides such State with the current information necessary to
enable it to identify and contact the person responsible for matters relating to maritime safety and
the protection of the marine environment. IMO resolution A.443(XI), requested Governments
take the steps to safeguard the shipmaster in the proper discharge of his responsibilities in regard
to maritime safety and the protection of the marine environment.
132.2 The Code sought to establish high standards of safety and environmental protection and
sought to prevent maritime casualties and pollution of the sea from ships is to design, construct,
equip and maintain ships and to operate them with properly trained crews in compliance with
international conventions and standards relating to maritime safety and pollution prevention.
This was to be done in consonance with the International Convention for the Safety of Life at Sea
(SOLAS) 1974, which made compliance with the Code mandatory.
132.3 The purpose of this Code is to provide an international standard for the safe management
and operation of ships and for pollution prevention. Recognizing that no two shipping
companies or ship owners are the same, and that ships operate under a wide range of different
conditions, the Code is based on general principles and objectives. The Code is expressed in
broad terms so that it can have a widespread application. Clearly, different levels of management,
whether shore-based or at sea, will require varying levels of knowledge and awareness of the
items outlined.
132.4 The objectives of the Code are to ensure safety at sea, prevention of human injury or loss
of life, and avoidance of damage to the environment, in particular, to the marine environment,
and to property. Safety management objectives of the Company must provide for safe practices
in ship operation and a safe working environment; establish safeguards against all identified
risks; and continuously improve safety management skills of personnel ashore and aboard ships,
including preparing for emergencies related both to safety and environmental protection.
132.5 Functional requirements for a Safety Management System (SMS) include a Safety
Management System (SMS) which includes the following functional requirements: a safety and
environmental protection policy; instructions and procedures to ensure safe operation of ships
and protection of the environment in compliance with relevant international and flag State
legislation; defined levels of authority and lines of communication between, and amongst, shore
and shipboard personnel; procedures for reporting accidents and non-conformities with the

provisions of this Code; procedures to prepare for and respond to emergency situations;
and procedures for internal audits and management reviews.
132.6 To ensure the safe operation of each ship and to provide a link between the company and
those on board, every company, as appropriate, should designate a person or persons ashore
having direct access to the highest level of management. The responsibility and authority of the
designated person or persons should include monitoring the safety and pollution prevention
aspects of the operation of each ship and to ensure that adequate resources and shore based
support are applied, as required.
132.7 The Company should establish procedures for the preparation of plans and instructions
for key shipboard operations concerning the safety of the ship and the prevention of pollution.
The various tasks involved should be defined and assigned to qualified personnel. The SMS
should include procedures ensuring that non-conformities, accidents and hazardous situations are
reported to the Company, investigated and analysed with the objective of improving safety and
pollution prevention.
Chapter 3 14 GESAMP Evaluation of Hazardous Substances Working Group and Hazard
Profiles List
143.1 Alongside the revision of Annex II, the marine pollution hazards of thousands of
chemicals have been evaluated by the Evaluation of Hazardous Substances Working Group,
giving a resultant GESAMP Hazard Profile which indexes the substance according to its
bio-accumulation; bio-degradation; acute toxicity; chronic toxicity; long-term health effects; and
effects on marine wildlife and on benthic habitats.
Chapter 4 15 IMO International Codes covering the carriage, design, construction,
equipment and operation of ships carrying chemicals in bulk and/or packaged form
154.1 The purpose of these codes is to provide an international standard for the safe transport by
sea of certain hazardous and noxious substances, by prescribing the design and construction
standards of ships involved in such transport and the equipment they should carry so as to
minimize the risk to the ship, its crew and to the environment, having regard to the nature of the
products involved. The basic philosophy is one of ship types related to the hazards of the
products covered by these codes, each of which may have one or more hazard properties.
154.2 Severe maritime incidents could lead to cargo tank damage and uncontrolled release of
the product. The requirements in the codes are intended to minimize these risks as far as is
practicable, based upon present knowledge and technology.
Chapter 165 International Code for the Construction of Equipment of Ships carrying
Dangerous Chemicals in Bulk (IBC Code)
165.1 The IBC Code gives international standards for the safe transport by sea in bulk of liquid
dangerous chemicals, by prescribing the design and construction standards of ships involved in
such transport and the equipment they should carry so as to minimize the risks to the ship, its
crew and to the environment, having regard to the nature of the products carried.
165.2 The IBC Code lists chemicals and their hazards and gives both the ship type required to
carry that product as well as the environmental hazard rating. Each of the products may have one
or more hazard properties which include flammability, toxicity, corrosivity and reactivity.
Chemical tankers built after 1 July 1986 are required to comply with the IBC Code. Chemical
tankers constructed before 1 July 1986 should comply with the requirements of the Code for the
Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (BCH Code) the
predecessor of the IBC Code.

Chapter 176 International Code for the Construction of Equipment of Ships carrying
Liquefied Gases in Bulk (IGC Code)
176.1 The IGC Code applies to gas carriers constructed on or after 1st July 1986. Gas carriers
constructed before 1st July 1986 have to comply with the requirements of the Code for the
Construction and Equipment of Ships carrying Liquefied Gases in Bulk (GC Code) or Code for
Existing Ships carrying Liquefied Gases in Bulk (EGC Code). The IGC Code is kept under
review, taking into account experience and technological development.
Chapter 7 18 International Maritime Dangerous Goods Code (IMDG Code)
187.1 The IMDG Code was developed as a uniform international code for the transport of
dangerous packaged goods by sea covering such matters as packing, container traffic and
stowage, with particular reference to the segregation of incompatible substances. The IMDG
Code contains regulations for dangerous goods and marine pollutants.
187.2 Chemicals which are carried packaged form or in solid form or in bulk are regulated by
Part A of SOLAS chapter VII Carriage of dangerous goods which includes provisions for the
classification, packing, marking, labelling and placarding, documentation and stowage of
dangerous goods.
187.3 Contracting Governments are required to issue instructions at the national level and the
chapter refers to International Maritime Dangerous Goods (IMDG) Code, developed by IMO,
which is constantly updated to accommodate new dangerous goods and to supplement or revise
existing provisions.
187.4 The IMDG Code was developed as a uniform international code for the transport of
dangerous goods by sea covering such matters as packing, container traffic and stowage, with
particular reference to the segregation of incompatible substances. The IMDG Code includes
products considered to be marine pollutants.
Chapter 8 19 IMO Manual on Chemical Pollution
198.1 IMO has developed early on a Manual on Chemical Pollution which currently consists of
two sections, in order to provide guidance to governments in the field of chemical pollution
response:
.1

section 1 Problem Assessment and Response Arrangements (1999): It aims to

provide guidance to governments on how to assess the hazards associated with the
spill of HNS (other than oil) and on ways of setting up response organizations;
and

.2

section 2 Search and Recovery of Packaged Goods Lost at Sea (1991): It aims to
assist governments during decision-making regarding search and recovery of
packaged goods lost at sea, so that an appropriate and safe response can be made.
Section 2 of the IMO Chemical Pollution Manual should be read in conjunction
with section 1.

Chapter 20 - The International Convention on Salvage, 1989

20.1 The main purposes of the Salvage Convention 1989 are to review the international rules
contained in the 1910 Salvage Convention, ensure that those who undertake salvage operations

are provided with sufficient incentive and to reflect the interests of environmental protection in
the way salvage contracts work.
20.2 The Convention applies whenever judicial or arbitration proceedings relating to matters
dealt with in the Convention are brought in a State Party (see article 2). It applies to all types of
salvage operations in navigable waters or in any other waters whatsoever except to those relating
to fixed or floating platforms or mobile offshore drilling units which are actually on location and
ships that are entitled to sovereign immunity (unless such immunity is waived). It applies to any
ship or craft or any structure capable of navigation and property not permanently and
intentionally attached to the shoreline. Because of the wide definition of damage to the
environment (article 1), its environmental protection provisions apply not just to damage to
marine flora and fauna, but also to human health, and the cause may be pollution, contamination,
fire, explosion or any similar major incidents.
20.3 The 1989 Salvage Convention defines damage to the environment as substantial
physical damage to human health or to marine life or resources in coastal or inland waters or
areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major
incidents (see article 1(d) of the 1989 Salvage Convention). In reality, salvors have always
made considerable efforts during any salvage operations to avoid pollution and to co-operate
with national and/ or local authorities.
20.4 The parties to a salvage contract can vary the provisions of the Convention in their
contract, but they cannot vary the duties to prevent or minimize damage to the environment
which the Convention contains. These duties are, therefore, applicable whenever the Convention
applies to a salvage operation, even if the other provisions have been varied by the contract.
20.5 The main obligations of a salvor, which are owed not to the coastal State but to the
owners of the ship and property in danger require the salvor to not only carry out the salvage
operations with due care, but in doing this, he must exercise due care to prevent or minimize
damage to the environment. In this way, due care to protect the environment becomes a legal
duty in all of the salvage operations to which the Convention applies, and it cannot be varied by
the contract. In return, article 13(1) grants to the salvor the right to have the skill he has exercised
and the efforts he has made in preventing or minimizing damage to the environment taken into
account when the reward for successful or partly successful salvage is fixed. Also, the risk of
liability he has run (which would include liability for damage to the environment) may also be
taken into account. However, salvage services accepted on article 13 of the Salvage
Convention 1989 with Lloyds Open Form are based on the principle of no cure no pay and
the property must be delivered to Owners in order for an award to be made, notwithstanding the
provisions of article 14.
20.6 However, if, despite his due care, the salvage operations were not successful, or if they
were only partly successful, or if the value of the successfully salved ship, cargo and freight at
risk was low, it would be possible for the salvor to have spent considerable sums in fulfilling his
duty to protect the environment, which are not recouped, let alone rewarded. The salvor has an
incentive to provide salvage services in the event of low value high risk operations where there is
threat of damage to the environment. It is done with a provision for the salvor to be awarded
special compensation equivalent to his out of pocket expenses in certain circumstances where the
salvor has actually prevented or minimized damage to the environment. There are two other
preconditions to the award of this special compensation:
.1

the salvor must have carried out salvage operations in respect of a ship which by
itself or its cargo threatened damage to the environment; and

.2

the amount of any reward earned (article 13) must be less than the amount of
special compensation assessed (article 14).

20.7 The Convention therefore envisages that, in every case where the ship or cargo actually
threaten damage to the environment, two calculations will be carried out: the reward to be fixed
under article 13 and the special compensation to be fixed under article 14. If the article 13 reward
figure exceeds the figure for special compensation, then in fact only the reward is payable. If the
special compensation figure under article 14 exceeds the reward figure, then the reward is topped
up to the level of the special compensation figure (see article 14(4)). The salvor does not get paid
twice, but his environmental efforts can lead to the enhancement of the total remuneration he
receives from the salvage services he performs.
20.8 The Special Compensation under article 14 varies according to the circumstances. If there
was a threat of damage to the environment, but in fact the salvor did not by his salvage
operations prevent or minimize such damage, then the special compensation figure is equal to his
reasonably incurred out-of-pocket expenses plus a fair rate for equipment and personnel actually
and reasonably used in the salvage operations (which we shall call below the salvage
expenses). If, on the other hand, his salvage operations did prevent or minimize damage to the
environment, then the special compensation figure may be increased up to 30% of the salvage
expenses. Where exceptional service has been rendered, the special compensation may be
increased still more, but in no case shall the total increase be more than 100% of the expenses
incurred by the salvor.
20.9 If the salvor is negligent, both the reward and the special compensation figures may be
reduced. If he is not negligent, at worst he may end up merely with his salvage expenses
reimbursed if there was a threat to the environment. He must therefore do his job with the care
and skill for which the salvage industry is noted before he earns a good remuneration. He must
also carefully consider the location of the casualty in relation to the definition of damage to the
environment, as, if the casualty is not within or close to coastal or inland waters or areas
adjacent thereto, then the Special Compensation provisions of article 14 may not apply. In this
event, the salvor could be back to the traditional no cure no pay provisions.
20.10 The article 14 Special Compensation was introduced to provide salvors with an incentive
to provide salvage services for low value high risk operations such that they would be
recompensed in the event of successfully preventing or minimizing damage to the environment.
It was incorporated into Lloyds Open Form and provided for the payment of salvage expenses
even if the property itself was not saved. However, because security was not demanded of the
owner until after the salvage was completed, because of the lack of clarity on the definition of
coastal, areas adjacent thereto, substantial and the threat of damage to the environment
many article 14 awards were subject to extensive litigation while these points were argued and
the amount of the award was assessed. Salvors became discouraged and were reluctant to provide
salvage services in low reward operations. A simpler and more effective system was required to
remove these anomalies.
20.11 The answer to Special Compensation under article 14 was the introduction of the Special
Compensation P&I Clause (SCOPIC) on 1 August 1999, included in appendix 7. This clause,
which is supplementary to any Lloyds Form of Salvage Agreement No Cure No Pay that
incorporates the provisions of article 14, removed the need for the salvor to prove there was a
threat of damage to the environment. This provided the salvor with the incentive that security
was placed by the Owners within two working days of the SCOPIC Clause being invoked and
established a means of assessing his reward by means of a set tariff of rates for equipment and
personnel.

Part V
Industry Other Conventions and Agreements Involving HNS
IMO to develop further
Chapter 1 Introduction
1.1
The international framework regulating the transport of HNS at sea also includes industry
based agreements. To be develop further
Chapter 2 Small Tanker Oil Pollution Indemnification Agreement (STOPIA) 2006
2.1
The Agreement establishes STOPIA 2006, the object of which is to provide a mechanism
for Ship owners to pay an increased contribution to the funding of the international system of
compensation for oil pollution from ships, as established by the 1992 Civil Liability Convention
(CLC 92), the 1992 Fund Convention and the 2003 Supplementary Fund Protocol.
2.2
The Parties to this Agreement recognize the success of the international system of
compensation for oil pollution from ships established by the 1992 Civil Liability and Fund
Conventions, and they are aware that it may need to be revised or supplemented from time to
time in order to ensure that it continues to meet the needs of society. A Protocol has been
adopted to supplement the 1992 Fund Convention by providing for additional compensation to be
available from a Supplementary Fund for Pollution Damage in States which opt to accede to the
Protocol. The Parties wish to encourage the widest possible ratification of the Protocol, with a
view to facilitating the continuance of the existing compensation system in its current form (but
as supplemented by the Protocol). In consideration of the potential additional burden imposed by
the Protocol on receivers of oil, the ship owners have agreed to establish a process whereby
tankers below a specified tonnage will indemnify the International Oil Pollution Compensation
Fund 1992 (the 1992 Fund) for a portion of its liability to pay compensation under the 1992
Fund Convention for Pollution Damage caused by such tankers.
2.3
The Scheme reflects the desire of ship owners to support efforts to ensure the continuing
success of this international system. It also reflects the commitment they gave to the Assembly of
the International Oil Pollution Compensation Fund 1992 (the 1992 Fund), at its 10th Session in
October 2005, to put in place binding contractual schemes to ensure that the overall costs of
claims falling within this system are shared approximately equally with oil receivers.
STOPIA 2006, together with the Tanker Oil Pollution Indemnification Agreement
(TOPIA) 2006, is designed to achieve this. It is also intended to encourage widest possible
ratification of the Supplementary Fund Protocol, and has been drawn up in recognition of the
potential additional burden imposed by the Protocol on receivers of oil.
2.4
STOPIA 2006 provides for ship owners to make payments to the 1992 Fund which are
designed to adjust the financial effect of the limitation of liability provisions in CLC 92. The
Scheme reflects the fact that CLC 92 provides for the liability limit of the ship owner to be
calculated by reference to the tonnage of the ship, subject to a minimum limit of SDR 4.51
million for ships of 5,000 gross tons or less. Given that the 1992 Fund pays compensation where
claims exceed the CLC 92 limit, incidents involving small tankers may result in the 1992 Fund
bearing a relatively high proportion of the compensation payable, and paying compensation in a
larger number of incidents than would be the case if the minimum limit under CLC 92 were
higher.

2.5
Against this background the Scheme provides for the owner of a ship involved in an oil
pollution incident to reimburse the 1992 Fund for any compensation it pays as a result of the
ships liability limit under CLC 92 being less than SDR 20 million. That amount is equivalent to
the liability limit under CLC 92 for a ship of 29,548 gross tons. STOPIA 2006 therefore
reapportions the ultimate cost of oil spills involving ships up to that size.
2.6
The Scheme is established by a legally binding Agreement between the owners of ships in
this category which are insured against oil pollution risks by P&I Clubs in the International
Group. In all but rare cases, ships of this description will automatically be entered in the Scheme
as a condition of Club cover. Their owners will be parties to the Agreement and are referred to as
Participating Owners.
2.7
As the Scheme is contractual it does not affect the legal position under the 1992
Conventions, and the victims of oil spills continue to enjoy their existing rights against the 1992
Fund. For this reason the Scheme provides for the owner of the ship involved in an incident to
pay indemnification to the 1992 Fund, rather than to pay extra sums directly to claimants.
Although the 1992 Fund is not a party to STOPIA 2006 the Agreement is intended to confer
legally enforceable rights on the 1992 Fund, and it expressly provides that the 1992 Fund may
bring proceedings in its own name in respect of any claim under the Scheme. The Scheme is
governed by English law, and English legislation enables legally enforceable rights to be
conferred in this manner.
2.8
Insurers are not parties to the Agreement, but all Clubs in the International Group have
amended their Rules to provide ship owners with cover against liability to pay Indemnification
under STOPIA 2006. The Clubs are also authorized under the Scheme to enter into ancillary
arrangements enabling the 1992 Fund to enjoy a right of direct action against the relevant Club in
respect of any claim under the Scheme. It is envisaged that these and other terms supporting the
operation of the Scheme will be agreed between the 1992 Fund and the International Group of
P&I Clubs.
2.9
Whilst the above are the main features of the Scheme, its twelve clauses address
numerous matters of detail. Clause I sets out various definitions, most of which are intended to
dovetail with the terminology and provisions of the relevant international conventions. Clauses II
and III contain general provisions relating to the Scheme and provide for it to apply to Relevant
Ships. Apart from a relatively small category of ships mentioned below, all tankers will be
Relevant Ships if they are of 29,548 tons or less and are insured by an International Group Club.
The Scheme provides that the owner of any such ship shall become a party to the Agreement
when made a party by his Club in accordance with its Rules, and normally this will result in him
automatically becoming a party as a condition of cover against oil pollution risks. The
Agreement also provides for any Relevant Ship which he owns to be entered automatically in the
Scheme.
2.10 An exception to these arrangements relates to ships which are insured by an International
Group Club but are not reinsured through the Groups Pooling arrangements. A ship in this
category is not automatically entered in the Scheme, but may nonetheless be deemed to be a
Relevant Ship (and be entered in the Scheme) by written agreement between the owner and his
Club. are expected to be entered in STOPIA 2006.

2.11 Clause IV sets out the precise circumstances in which the Participating Owner of a
Relevant Ship is liable to pay Indemnification to the 1992 Fund, and it includes detailed
provisions affecting the calculation of the precise amount payable. The clause also contains
provisions to prevent any recourse claim being prejudiced by a technical argument that
Indemnification has reduced the loss for which the 1992 Fund may claim recovery. For these
reasons it is stipulated that Indemnification does not accrue until notice is given that no recourse
(or further recourse) proceedings are contemplated, and in the meantime the 1992 Fund is
entitled to receive payment or payments on account equal to the amount of Indemnification
which it expects to fall due. Such payments are to be made at the same time as payment of the
levies on contributors to the 1992 Fund.
2.12 Clause V deals in more detail with recourse against third parties. Credit is to be given to
the Participating Owner for any sums recovered, but the 1992 Fund retains an absolute discretion
as to the commencement, conduct and any settlement of such proceedings. Any recoveries made
from third parties are to be apportioned top down, i.e., the ship owner benefits from them only
after the 1992 Fund has recouped amounts for which it is liable in excess of the Indemnification.
2.13 Clause VI contains time bar provisions designed to dovetail with the 1992 Conventions
(and to allow the 1992 Fund a further 12 months in which to claim Indemnification after the
expiry of the time period for claims against it under the 1992 Fund Convention).
2.14 Clause VII deals with amendment of the Scheme and enables changes to be made by the
International Group acting as agent for all Participating Owners. No amendment is to have
retrospective effect, and the Clubs have agreed to consult with the 1992 Fund in good time prior
to any decision to amend the Scheme.
2.15 Clause VIII provides for a review to be carried out after ten years, and thereafter at
five year intervals, in consultation with the 1992 Fund, the Supplementary Fund and
representatives of oil receivers, to establish the approximate proportions in which the overall cost
of oil pollution claims under the international compensation system has been borne respectively
by ship owners and by oil receivers, and provides for measures which may be taken (including
possible amendments of STOPIA 2006) for the purpose of maintaining an approximately equal
apportionment.
Chapter 3 Tanker Oil Pollution Indemnification Agreement (TOPIA) 2006
3.1
The Agreement provides a mechanism for ship owners to pay an increased contribution to
the funding of the international system of compensation for oil pollution from ships, as
established by the 1992 Civil Liability Convention (CLC 92), the 1992 Fund Convention and
the 2003 Supplementary Fund Protocol.
3.2
Ship owners recognize the success of the international system of compensation for oil
pollution from ships established by the 1992 Civil Liability and Fund Conventions, and they are
aware that it may need to be revised or supplemented from time to time in order to ensure that it
continues to meet the needs of society. A Protocol has been adopted to supplement the 1992
Fund Convention by providing for additional compensation to be available from a Supplementary
Fund for Pollution Damage in States which opt to accede to the Protocol. However, in
consideration of the potential additional burden imposed by the Protocol on receivers of oil, the
ship owners participant in this Agreement have agreed to establish the scheme set out herein,
whereby the Participating Owners of tankers will indemnify the Supplementary Fund for 50% of
its liability to pay compensation under the Protocol for Pollution Damage. This indemnity is
restricted in respect of Pollution Damage caused by terrorist risks, in recognition of the
restrictions on cover against such risks in liability insurance available to ship owners.

3.3
The Scheme reflects the desire of ship owners to support efforts to ensure the continuing
success of this international system. It also reflects the commitment they gave to the Assembly of
the International Oil Pollution Compensation Fund 1992, at its 10th Session in October 2005, to
put in place binding contractual schemes to ensure that the overall costs of claims falling within
this system are shared approximately equally with oil receivers. TOPIA, together with the Small
Tanker Oil Pollution Indemnification Agreement (STOPIA) 2006, is designed to achieve this. It
is also intended to encourage widest possible ratification of the Supplementary Fund Protocol,
and has been drawn up in recognition of the potential additional burden imposed by the Protocol
on receivers of oil.
3.4
TOPIA provides for ship owners to indemnify the Supplementary Fund for 50% of the
compensation it pays under the Protocol for Pollution Damage caused by tankers in Protocol
States.
3.5
The Scheme is established by a legally binding Agreement between the owners of tankers
which are insured against oil pollution risks by P&I Clubs in the International Group. In all but a
relatively small number of cases, ships of this description will automatically be entered in the
Scheme as a condition of Club cover. Their owners will be parties to the Agreement and are
referred to as Participating Owners. As the Scheme is contractual it does not affect the legal
position under the 1992 Conventions and Protocol, and the victims of oil spills continue to enjoy
their existing rights against the 1992 Fund and Supplementary Fund. For this reason the Scheme
provides for the owner of the ship involved in an incident to pay Indemnification to the
Supplementary Fund, rather than to pay extra sums directly to claimants.
3.6
Although the Supplementary Fund is not a party to TOPIA, the Agreement is intended to
confer legally enforceable rights on the Supplementary Fund, and it expressly provides that the
Supplementary Fund may bring proceedings in its own name in respect of any claim under the
Scheme. The Scheme is governed by English law, and English legislation enables legally
enforceable rights to be conferred in this manner.
3.7
Insurers are not parties to the Agreement, but all Clubs in the International Group have
amended (or agreed to amend) their Rules to provide ship owners with cover against liability to
pay Indemnification under TOPIA. The Clubs are also authorized under the Scheme to enter into
ancillary arrangements enabling the Supplementary Fund to enjoy a right of direct action against
the relevant Club in respect of any claim under the Scheme. It is envisaged that these and other
terms supporting the operation of the Scheme will be agreed between the Supplementary Fund
and the International Group of P&I Clubs.
3.8
Whilst the above are the main features of the Scheme, its twelve clauses address
numerous matters of detail. Clause I sets out various definitions, most of which are intended to
dovetail with the terminology and provisions of the relevant international conventions. Clauses II
and III contain general provisions relating to the Scheme and provide for it to apply to Relevant
Ships. Apart from a relatively small category of ships mentioned below, all tankers will be
Relevant Ships if they are insured by an International Group Club. The Scheme provides that the
owner of any such ship shall become a party to the Agreement when made a party by his Club in
accordance with its Rules, and normally this will result in him automatically becoming a party as
a condition of cover against oil pollution risks. The Agreement also provides for any Relevant
Ship which he owns to be entered automatically in the Scheme.
3.9
Clause IV sets out the precise circumstances in which the Participating Owner is liable to
pay Indemnification to the Supplementary Fund, and it includes detailed provisions affecting the
calculation of the precise amount payable. The clause also contains provisions to prevent any
recourse claim being prejudiced by a technical argument that Indemnification has reduced the
loss for which the Supplementary Fund may claim recovery. For these reasons it is stipulated that

Indemnification does not accrue until notice is given that no recourse (or further recourse)
proceedings are contemplated, and in the meantime the Supplementary Fund is entitled to receive
payment or payments on account equal to the amount of Indemnification which it expects to fall
due. Such payments are to be made at the same time as payment of the levies on contributors to
the Supplementary Fund. Clause IV also stipulates that Indemnification shall be payable for
Pollution Damage caused by terrorist risks only to the extent, if any, that such amounts are
covered by any insurance or reinsurance in force at the time of the Incident. This is due to the
restrictions ship owners face in obtaining liability insurance cover for risks of this type.
3.10 Clause V deals in more detail with recourse against third parties. Credit is to be given to
the Participating Owner for any sums recovered, but the Supplementary Fund retains an absolute
discretion as to the commencement, conduct and any settlement of such proceedings.
3.11 Clause VI contains time bar provisions designed to dovetail with the 1992 Conventions
(and to allow the Supplementary Fund a further 12 months in which to claim Indemnification
after the time period for claims against it under the Supplementary Fund Protocol).
3.12 Clause VII deals with amendment of the Scheme and enables changes to be made by the
International Group acting as agent for all Participating Owners. No amendment is to have
retrospective effect, and the Clubs have agreed to consult with the Supplementary Fund in good
time prior to any decision to amend the Scheme.
3.13 Clause VIII provides for a review to be carried out after ten years, and thereafter at five
year intervals, in consultation with the 1992 Fund, the Supplementary Fund and representatives
of oil receivers, to establish the approximate proportions in which the overall cost of oil pollution
claims under the international compensation system has been borne respectively by ship owners
and by oil receivers, and provides for measures which may be taken (including possible
amendments of TOPIA) for the purpose of maintaining an approximately equal apportionment.
Chapter 2 Regional Agreements
Chapter 3- INF

Part VI
Reference documents

(TG to provide further comments)

Chapter 1 : Sources of further information (e.g. UNEP Orange Book)

Chapter 2: Form or document templates (e.g. Lloyds Open Form)

6.2
__________