Friday, April 15, 2011

Danes Show The Way On Compensation For Pollution From Shipping Hazardous Freight

Denmark First to Ratify IMO Convention
Shipping News Feature

UK – DENMARK – WORLDWIDE – Denmark is the first country to step forward and sign, subject to ratification, the Protocol of 2010 to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS) 1996. Once again the international shipping community at Government level has been considered by many to be extremely slow to accept its responsibility for pollution caused by the carriage of freight known to be dangerous to the environment and this represents a real step forward for the industry.

Mr. Kasper Høeg-Jensen, Minister Counsellor, Royal Danish Embassy, London, signed the HNS Protocol 2010 on behalf of Denmark at International Maritime Organization (IMO) Headquarters on 14 April 2011.The 2010 Protocol, which was adopted at a conference held in 2010 to address practical problems that had prevented many States from ratifying the original 1996 Convention, will enter into force eighteen months after the date subject to certain conditions*. It is to be hoped that there will now be a queue of countries waiting to sign up.

The HNS Convention was adopted in 1996 to make it possible for prompt and adequate compensation to be paid out to victims of accidents involving HNS, such as chemicals. The Convention covers not only pollution damage but also the risks of fire and explosion, including loss of life or personal injury as well as loss of or damage to property.

HNS are defined by reference to lists of substances included in various IMO Conventions and Codes including a variety of oils, liquid substances defined as noxious or dangerous, liquefied gases plus numerous other classified items familiar to many readers. The Convention also covers residues left by the previous carriage of HNS, other than those carried in packaged form. This means containers, or indeed even the holds of vessels, contaminated by a previous cargo and returning to await cleaning, are covered by the protocol.

Ship owners will still be the first to pay up however for any such incidents, under the 2010 Protocol, if damage is caused by bulk HNS, compensation would first be sought from the ship owner, up to a maximum limit of 100 million Special Drawing Rights (SDR)**. Where damage is caused by packaged HNS, or by both bulk HNS and packaged HNS, the maximum liability for the ship owner is 115 million SDR. Once this limit is reached, compensation would be paid from a second tier, the HNS Fund, up to a maximum of 250 million SDR (including compensation paid under the first tier).

The two conditions referred to are:

A) at least twelve States, including four States each with not less than 2 million units of gross tonnage, have expressed their consent to be bound by it.

B) the Secretary-General has received information properly accorded that such States have received during the preceding calendar year a total quantity of at least 40 million tonnes of cargo contributing to the general account.

** The SDR is an international reserve asset, created by the International Monetary Fund (IMF) in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDR’s can be exchanged for freely usable currencies.

Photo: IMO Secretary-General Efthimios E. Mitropoulos looks on as Mr. Kasper Høeg-Jensen, Minister Counsellor, Royal Danish Embassy, London, signs the HNS Protocol 2010 on behalf of Denmark