14 October 2011

The Wreck Removal Convention - a new liability and compensation regime:

The convention will enter into force 12 months after ratification by 10 states


On May 18 2007 the International Maritime Organisation (IMO) adopted the Nairobi International Convention on the Removal of Wrecks. 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 wrecked ships.

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. Several countries are currently considering ratification of the convention.

The 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 1992.

Scope of application

The geographical area of application of the convention is the exclusive economic zone of any state where the state has only limited legislative and enforcement jurisdiction.

States 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, the authorities may, broadly speaking, order wreck removal if there is an imminent and serious risk of pollution, but a state has only limited powers to claim compensation for costs related to the removal of the wreck.

The Wreck Removal Convention provides a firmer legal basis for both ordering wreck removal and claiming compensation. A state may opt to extend the application of the convention to its territorial waters, where the state has full jurisdiction.

The convention adopts a wide definition of 'ships', which includes seagoing vessels of any type, such as cargo ships, tankers, drilling vessels, floating production, storage and offloading units, floating storage and offloading vessels and floating platforms. However, the convention does not apply to floating platforms on location and engaged in the exploration, exploitation and production of seabed mineral resources, although it will apply to such floating platforms being towed to and from the field.

Reporting, locating, marking and removing wrecks

The convention imposes a duty on the master and the operator of the ship to report without delay when a ship has been 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 a hazard, the state shall ensure that all reasonable steps are taken to mark the wreck by using the international system of buoys and publish the location of the wreck through notices to seafarers.

The registered owner will also be under an obligation to remove the wreck. The state may impose conditions for such removal or intervene during the removal to the extent necessary to ensure that the removal proceeds in a manner that is consistent with considerations of safety and protection of the marine environment.

If the owner does not remove the wreck within a deadline set by the state, the owner cannot be contacted or the circumstances require immediate action, the state may remove the wreck by the most practical and expeditious means available.

Liability of the owner

The convention imposes strict liability (without regard to fault) on the registered owner for the costs of locating, marking and removing the wreck, provided that these 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:

       resulted from an act of war, hostilities, civil war etc;
       was wholly caused by an act or omission done with the intent to cause damage by a third party; or
       was wholly caused by the negligence or other wrongful act of any government or authority responsible for the maintenance of lights or other navigational aids in the exercise of that function.

Limitation of liability

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 for wreck removal. These higher limits will apply to liability imposed on an owner under the convention.

Compulsory insurance and direct action

The convention requires the owner of ships of 300 gross register tonnage and above to maintain insurance to cover its liability under the convention, provided that the ship is flying the flag of a state party or is entering or leaving a port in its territory, or arriving at or leaving from an offshore facility in its territorial waters. 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.

Each ship shall carry an insurance certificate in an approved format.

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.

Entry into force

The convention will enter into force 12 months after ratification by 10 states. So far, 3 states have ratified the convention. Several countries are currently considering ratification. It is expected that sufficient states will ratify the convention for it to enter into force during the next two years.

Source: Safety4sea (Sourced from International Law Office). 25 August 2011

No comments: