Estonia ratifies compensation regime for hazardous and noxious cargoes: IMO

Estonia has become the latest country to accede to a key IMO compensation treaty covering the maritime transport of hazardous and noxious substances (HNS) by ship.

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, and 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. An HNS Fund will be established, to pay compensation once a 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

As required by the treaty, Estonia provided data on the total quantities of liable contributing cargo. 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 tonnes of cargo contributing to the general account to have been received in the preceding calendar year.

On 10 January Estonia deposited the instrument of accession 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). 

The treaty has now six Contracting States;the Convention is significantly closer to its entry into force. 

The treaty has now six Contracting States (Canada, Denmark, Estonia, Norway, South Africa and Turkey). Four of these States each have more than 2 million units of gross tonnage. With the present six Contracting States, the 2010 HNS Protocol needs only six more States to ratify or accede to it plus the required contributing cargo, thus the Convention is significantly closer to its entry into force. 

HNS Convention

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.

The treaty complements existing liability and compensation 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.

Compensation available under the convention

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