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19 March 2008
Existing international liability and compensation regimes covering oil spills do not include bunker oil spills from vessels other than tankers. This significant gap is set to be closed with the entry into force on November 21 2008 of the Bunkers Convention,(1) which was adopted by the International Maritime Organization in 2001. The convention was ratified by Norway on December 5 2007. Provisions in the Norwegian Maritime Code incorporating the convention will enter into force on the same day that the convention enters into force internationally.
The convention is modelled on the Civil Liability Convention.(2) Key features include:
The ‘shipowner’ is defined as being the registered owner, bareboat charterer, manager and operator of the ship, whose liability is joint and several. The definition is much broader than in the Civil Liability Convention, under which strict liability attaches only to the registered owner. The Bunkers Convention’s liability and compensation regime applies to ‘pollution damage’, which means loss or damage caused outside the ship by contamination resulting from the escape or discharge of bunker oil from the ship, as well as the costs of preventive measures and further loss or damage caused by preventive measures.
Shipowners’ and insurers’ liability under the Bunkers Convention is subject to any applicable national or international limitation regime, such as the 1976 Convention on Limitation of Liability for Maritime Claims, as amended by the 1996 Protocol. Under the 1996 Protocol, states were allowed to reserve the right to exempt certain claims from limitation of liability - for example, claims in respect of the raising and removal of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been onboard. Norway has reserved this right and has established higher limitation amounts for these claims, which apply to the discharge of bunkers from a grounded vessel and the cleaning of oil spills on beaches. When proposing the legislation implementing the Bunkers Convention, the Norwegian government assumed that the higher limitation amounts would still apply for such claims, but that the compulsory insurance would not cover liability in excess of the ordinary 1996 Protocol limits. However, the protection and indemnity insurance would usually cover the excess liability.
Compulsory Insurance and Direct Action
When the Bunkers Convention enters into force, the registered owner of a ship with over 1,000 gross tonnage which is registered in a state that is party to the convention must maintain and carry onboard a certificate certifying adequate insurance (or other financial security) to cover the registered owner’s liability for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime, but not exceeding an amount calculated in accordance with the 1996 Protocol. In practice, the protection and indemnity club will provide the necessary insurance cover. Any claim for compensation for pollution damage may be brought directly against the insurer (or other person providing financial security) for the registered owner’s liability for pollution damage. Because bareboat charterers, managers and operators, together with the registered owner and the insurer, risk being held jointly and severally liable under the convention, they must ensure that they are co-insured under the registered owner’s protection and indemnity insurance.
Issuance of Certificates and Enforcement
The government has recently circulated a proposal for public consultation regarding a regulation incorporating the convention’s provisions concerning: (i) the certificate's form, content, issuance and validity; and (ii) national rules for the enforcement of the obligation to maintain insurance and to carry onboard an insurance certificate. Under the proposed regulation, the required certificate must be onboard Norwegian ships and also foreign ships calling or leaving a port or other loading or discharging place in Norway or within the Norwegian continental shelf. This will also apply to state-owned ships, except for warships and other ships which are owned and used exclusively for non-commercial purposes. The required certificate will be issued by the Norwegian Maritime Directorate upon receipt of an application containing evidence of adequate insurance. For ships registered in another state party to the convention, it will be sufficient to have onboard a certificate issued or certified by the appropriate authority in that state. Other foreign ships must have a certificate issued or confirmed by the directorate or the appropriate authority in another state that is party to the convention. The directorate will have the authority to prevent ships which do not have the required certificate from calling or leaving a port or other loading or discharging place in Norway or within the Norwegian continental shelf, or to instruct ships to be discharged or moved.
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