Liability and Compensation for the Maritime Transport of Hazardous and Noxious Substances

PDF Format

Table of Contents

• Outline
• Background
• HNS Protocol – What it is
• HNS Protocol – Shipowners’ Liability
• HNS Fund
• HNS Protocol – Available Compensation
• Current Status in Canada
• Canadian Implementation and Ratification
• Stakeholder Positions
• Next Steps

Outline

• Background
• The 2010 Hazardous and Noxious Substances (HNS) Protocol
• Canadian implementation and ratification
• Next steps

Background

• 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, 1996
• Original Convention adopted by the International Maritime Organization (IMO) in 1996, Canada a signatory
• Shared liability regime between shipowners and receivers of HNS (cargo owners).
• Protocol adopted by the IMO on April 30, 2010

HNS Protocol – What it is

• What is covered: By reference to existing codes and agreements adopted by IMO for safe handling and
• Who: All sea-going ships carrying HNS to, from, within Contracting State
• Where: Territory, territorial sea and Exclusive Economic Zone (EEZ – 200 miles)
• Damages Covered: loss of life and personal injury (onboard and outside of ship), property (including evacuation costs) and pollution damage to the environment (including cost of preventative measures)

HNS Protocol – Shipowners’ Liability

• Tier 1 of the coverage in 2010 HNS Protocol
• Strict liability
• Compulsory insurance
  • Approved insurers and state certification
  • Direct action by claimants against insurer
• Limits of liability per incident:
  • Bulk HNS: maximum approx. $200 million
  • Packaged HNS: maximum approx. $230 million

HNS Fund

• Tier 2 of the coverage under the 2010 HNS Protocol
• Modeled on the International Oil Pollution Compensation Fund
• HNS Fund will pay compensation post-incident when shipowners’ liability is insufficient to cover costs of damages
• Contributions to HNS Fund paid by receivers of HNS in state parties
• Bulk HNS to pay contributions, subject to annual thresholds – includes chemicals, liquefied petroleum gas and liquefied natural gas

HNS Protocol – Available Compensation

Example
Chemical Spill - Bulk Carrier

Current Status in Canada

Lower limits of liability for shipowners:

Ship Size	Current Limits	HNS Protocol Bulk	HNS Protocol Packaged
<2,000 GRT	$2 million	$20 million	$23 million
30,000 GRT	$24.4 million	$104 million	$119.6 million
100,000 GRT	$61 million	$200 million	$230 million

• No compulsory insurance and direct action for claimants
• No HNS Fund to supplement shipowners’ liability

Canadian Implementation and Ratification

• Transport Canada Discussion Paper for stakeholder consultations (published October 2010)
• Amendments to the Marine Liability Act are required to implement and ratify HNS Protocol in Canada
• One year of reporting on HNS received in Canada also required prior to ratification

Stakeholder Positions

• Broad support for Canada’s implementation and ratification of 2010 HNS Protocol
• Avoids duplication in a global and shared regime
• Provides certainty to shipowners and cargo owners of liability and levels of compensation
• Polluter-pay principle

Next Steps

• Canada signed 2010 HNS Protocol, subject to ratification, on October 25, 2011
• Tabling of Protocol in Parliament
• Next step is the introduction of amendments to the Marine Liability Act

Contact:
François Marier
Manager of Policy Development, International Marine Policy
Transport Canada
Tel: 613-993-4895
Email: francois.marier@tc.gc.ca

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