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18 February 2015
The Nairobi International Convention on the Removal of Wrecks will enter into force on April 14 2015 following ratification by Denmark, which on April 14 2014 became the 10th country to ratify it.
The International Maritime Organisation (IMO) adopted the convention on May 18 2007. The convention fills a gap in the existing international legal framework by providing the first set of uniform international rules aimed at ensuring the prompt and effective removal of wrecks. Owners will now be required to take out compulsory liability insurance and strict liability will be imposed on an owner for the costs of locating, marking and removing a wreck. Authorities will also be permitted to commence direct action against an owner's liability insurer.
So far, 16 states have ratified the convention, including Denmark, Germany, India and the United Kingdom. Several countries, including Norway, are also expected to ratify the convention.
The Wreck Removal Convention is the latest in a series of liability and compensation conventions emanating from the IMO and modelled on the Convention on Civil Liability for Oil Pollution Damage of 1992.
The geographical area of application of the convention is the 200 nautical mile exclusive economic zone of a contracting state. States have limited legislative and enforcement jurisdiction in their exclusive economic zones and may order the removal of wrecks from their exclusive economic zone only if there is specific legal basis under applicable public international law, such as the United Nations Convention on the Law of the Sea 1982 or the International Convention relating to Intervention on the High Seas in Cases of Oil Pollution Casualties 1969, as amended. Under these conventions, broadly speaking, the authorities may order wreck removal or intervene if there is an imminent and serious risk of pollution, but have limited powers to claim compensation for costs related to the intervention. The Wreck Removal Convention provides firmer legal basis for both ordering wreck removal and for claiming compensation.
A state may opt to extend the application of the Wreck Removal Convention to its territorial waters, where the state has full jurisdiction. Norway argued that the state territories should be included in the area of application, since most wrecks constituting a hazard are located in territorial waters. The opt-in solution was the compromise reached in the negotiations. Bulgaria, Denmark and the United Kingdom are among the states that have opted to extend the application to their territorial waters.
The convention adopts a wide definition of 'ships', which includes seagoing vessels of any type – for example, cargo ships, tankers, drilling vessels, floating production, storage and offloading units, floating storage and offloading vessels and floating platforms. The convention does not apply to floating platforms on location which are engaged in the exploration, exploitation and production of seabed mineral resources; however, it will apply to such floating platforms being towed to and from the field.
The convention imposes a duty on the master and the operator of a ship to report without delay if the ship is involved in a maritime casualty resulting in a wreck. The state is obliged to locate the wreck and determine whether the wreck poses a hazard to navigation or the marine environment. If the wreck is determined to be a hazard, the state shall ensure that all reasonable steps are taken to mark it by using the international system of buoys and publish the location of the wreck through notices to seafarers. The owner will be obliged to remove the wreck. The owner will be free to contract with any salvor or wreck removal contractor of its choosing, but the state may issue a wreck removal order where it imposes conditions for removal or may intervene during the removal to the extent necessary to ensure that the removal proceeds in a manner that is consistent with safety and environmental protection considerations.
If the owner does not remove the wreck within a deadline set by the state or cannot be contacted, or the circumstances require immediate action, the state may remove the wreck by the most practical and expeditious means available.
The convention imposes strict liability (without regard to fault) on the registered owner for costs of locating, marking and removing the wreck – provided that the costs are reasonable and in proportion to the hazard. Liability is subject to the ordinary defences found in the IMO liability and compensation conventions, including that the maritime casualty causing the wreck:
The latter would include a failure by the state to take adequate steps to mark the wreck and this causes another casualty.
An owner will be entitled to limit its liability pursuant to any applicable limitation of liability regime, including the International Convention on Limitation of Liability for Maritime Claims 1976, as amended by the 1996 Protocol. Many countries have exercised the option under the 1996 Protocol to implement higher limitation of liability limits (or unlimited liability) for wreck removal. These higher limits (or the absence of limits) will apply to liability imposed on an owner under the convention.
The convention requires owners of ships of 300 gross registered tonnage and above to maintain insurance to cover their liability under the convention, provided that the ship is:
The insurance shall at a minimum cover an amount equal to the limits of liability under the national or international limitation regime, but not exceeding the limits under the 1996 Protocol. Wreck removal is already covered by protection and indemnity (P&I) insurance and therefore insurance cover under the convention is likely to be covered by P&I clubs. Each ship shall carry an insurance certificate in an approved format issued or certified by a state party on the basis of a so-called 'blue card'. Any claim arising under the convention may be brought directly against the insurer. In practice, the claimant will normally be the national or local pollution or coastal authorities. In many countries the claimant is entitled under local law to commence direct action against the liability insurer in certain circumstances for claims related to wreck removal. However, the convention will bring uniformity and clarity, and will further expand the right to commence direct action.
For further information on this topic please contact Morton Lund Mathisen, Herman Steen or Beate Fiskerstrand at Wikborg Rein by telephone (+47 22 82 75 00), fax (+47 22 82 75 01) or email (email@example.com, firstname.lastname@example.org or email@example.com). The Wikborg Rein website can be accessed at www.wr.no.
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