Norway is First to Ratify Compensation Regime for Hazardous Cargoes - Global Trade Magazine
  May 22nd, 2017 | Written by

Norway is First to Ratify Compensation Regime for Hazardous Cargoes

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  • HNS Fund is administered by states with contributions based on the actual need for compensation.
  • The HNS Convention establishes the principle that the polluter pays.
  • Entry into force of the HNS treaty requires accession by at least 12 states.

Norway became the first signatory to a key compensation treaty covering the transport of hazardous and noxious substances (HNS) by ship.

The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 2010 (2010 HNS Convention), when in force, will provide a regime of liability and compensation for damage caused by HNS cargoes transported by sea, complementing 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.

Dilek Ayhan, State Secretary in the Norwegian Ministry of Trade, Industry and Fisheries, handed over the instrument of ratification of the 2010 HNS Protocol to IMO Secretary-General Kitack Lim during a meeting at International Maritime Organization headquarters in London.

Norway also provided, as required by the treaty, data on the total quantities of contributing cargo liable for contributions received in Norway during the preceding calendar year.

Lim warmly welcomed the ratification by Norway and encouraged other states to follow suit.

“The HNS Convention is the last piece in the puzzle needed to ensure that those who have suffered damage caused by HNS cargoes carried on board ships have access to a comprehensive and international liability and compensation regime,” said Lim. “The number of ships carrying HNS cargoes is growing steadily with more than 200 million tons of chemicals traded annually by tankers and we have to recognize that accidents can and do happen. I urge all states to follow the example set by Norway and consider acceding to the HNS 2010 treaty as soon as possible, in order to bring it into force.”

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.

IMO measures relating to the prevention of accidents that involve HNS cargoes are already in force, including ship design, operations and safety on board as well as safety of loading and unloading operations. There is also a protocol covering preparedness and response to shipping accidents involving hazardous substances.

The 2010 HNS 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. Total compensation available under the convention is capped at 250 million Special Drawing Rights (SDR) of the International Monetary Fund (approximately $340 million) 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.

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.

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