Items of interest for IBIA members from the IMO legal committee

Items of interest for IBIA members from the IMO legal committee

Hello IBIA member. This is your IMO Representative reporting from the 105th session of the IMO’s Legal Committee (LEG 105), which met from 23-25 April, 2018 – to keep you informed on issues that may have an impact on bunker industry stakeholders, especially if you carry bunkers on your ship either as cargo or as fuel.

The last missing link in the global framework of liability and compensation conventions now looks like it may enter into force within the next few years. During LEG 105, 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, 1996 (2010 HNS Convention).

This was a significant step toward bringing it into force as they boosted the number of signatories to three (Norway was the first) and these three account for nearly 72% of the total quantity of contributing cargo required (40 million tonnes) in order for the instrument to enter into force.

IMO Secretary-General Kitack Lim welcomed the two deposits, noting that the 2010 Protocol now needed only nine more States to achieve entry into force. Several IMO member States declared their intention ratify the HNS Protocol within the next year or two during LEG 105.

When in force, the treaty will provide a regime of liability and compensation for damage caused by HNS cargoes transported by sea, similar in nature to those already covered by international liability and compensation regimes for oil as cargo under the International Convention on Civil Liability for Oil Pollution Damage (CLC Convention) and the associated International Oil Pollution Compensation Funds (IOPC Funds), and for bunker fuel held in ship’s tanks under the under the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention).

The HNS Convention covers over 2,000 types of substances such as chemicals, refined oil, acids, fertilizers, alcohols, LNG and LPG. It seems to overlap with what is covered by the IOPC Funds, but may come into play for bunker tankers that carry large quantities of products that are not “contributing oil” as per the IOPC Fund definition, such as gas oil, lubricating oil, marine diesel and a range of other chemicals some bunker tankers may be involved in transporting, such as catalytic cycle oil, gas oil blend stocks and catalytic cracker feedstock, to mention some.

As with the other liability compensation schemes, the HNS Convention 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 the shipowner’s liability is exhausted. This Fund will be financed through contributions paid post incident by receivers of HNS cargoes.

The HNS Protocol is fully developed and now just needs sufficient ratifications to enter into force. If you want to get on the front-foot to understand it, we recommend you visit this IMO webpage:

We have also learnt that Norway has started a project to develop a fully automated digital solution for issuing electronic CLC and Bunkers certificates.

LEG 105 was informed that these certificates were currently issued manually and that the process was both time-consuming and required a high degree of accuracy.

The proposed digital solution involves a machine-to-machine validation where the process of issuing and signing certificates is digital. This also means that the communication between the insurers and the flag State will be digital and largely automated. The electronic certificates would be issued in accordance with the Guidelines for the use of electronic certificates already established by the IMO (FAL.5/Circ.39/Rev.2).

The main benefits of digitalisation, Norway said, was that it reduces work load, reduces the risk of human errors, and we will no longer have a situation where ships are carrying outdated certificates. With digitalisation, issuance of new certificates can be done in minutes and all relevant parties can be informed at once.

Comments made in plenary were supportive with a handful of States saying they believe digitalisation can save a lot of time and resources for industry and issuing authorities – hence reducing their administrative burden.

LEG also agreed to add two so-called “new outputs” to its work programme, which in layman’s terms means adding a new item to the Committee’s agenda and invite submissions to move the work forward toward a successful conclusion.

One of these new agenda items will be called “Measures to prevent unlawful practices associated with the fraudulent registration and fraudulent registries of ships” – which will be in the 2018-2019 biennial agenda of the Legal Committee, with a target completion year of 2021.

The other new agenda item will be called “Regulatory scoping exercise and gap analysis of conventions emanating from the Legal Committee with respect to Maritime Autonomous Surface Ships (MASS)” – which will be in the biennial agenda of the Legal Committee and the provisional agenda for LEG 106, with a target completion year of 2022.

Report by Unni Einemo

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