Canada and Turkey Ratify Polluter Pays Convention
Canada and Turkey deposited their instruments of ratification to the 2010 Protocol to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention) on Monday.
When in force, the treaty will provide a regime of liability and compensation for damage caused by HNS cargoes transported by sea, including oil and chemicals. The treaty covers pollution damage, the risks of fire and explosion, including loss of life or personal injury, as well as loss of or damage to property.
It establishes the principle that the polluter pays by ensuring that the shipping and HNS industries provide compensation for those who have suffered loss or damage resulting from an HNS incident. An HNS Fund will be established, to pay compensation once shipowner's liability is exhausted. This Fund will be financed through contributions paid post incident by receivers of HNS cargoes.
Entry into force of the treaty requires accession by at least 12 States, meeting certain criteria in relation to tonnage and reporting annually the quantity of HNS cargo received in a State. The treaty requires a total quantity of at least 40 million tons of cargo contributing to the general account to have been received in the preceding calendar year.
The treaty has now been ratified by three States, Canada, Norway and Turkey. The total quantity of contributing cargo has reached 28.7 million tons, or nearly 72 percent of that required for entry into force.
The Convention aims to deliver the uniform and comprehensive regime needed to provide compensation for costs, including clean-up and restoring the environment, in the event of an incident involving HNS cargoes. The treaty complements existing regimes already in force for the transport of oil as cargo, bunker oil used for the operation and propulsion of ships, the removal of hazardous wrecks and claims for death of or personal injury to passengers, or for damage to their luggage, on ships.
Total compensation available under the HNS Convention is capped at 250 million Special Drawing Rights (SDR) of the International Monetary Fund (approximately $360 million at current exchange rates) per event. Shipowners are held strictly liable up to a maximum limit of liability established by the Convention for the cost of an HNS incident. Registered owners of ships carrying HNS cargoes have to maintain insurance that is State certified. The HNS Fund pays compensation once shipowner's liability is exhausted and is financed through contributions paid post incident by receivers of HNS cargoes.
The HNS Fund is administered by States and contributions will be based on the actual need for compensation.
HNS covered by the Convention include: oils; other liquid substances defined as noxious or dangerous; liquefied gases; liquid substances with a flashpoint not exceeding 60˚C; dangerous, hazardous and harmful materials and substances carried in packaged form or in containers; and solid bulk materials defined as possessing chemical hazards.