In 1996, a new legal regulator emerged on the international scene regarding the consequences of pollution from ships carrying hazardous and noxious substances. This article analyses the articles of the 2010 Convention on Pollution by Noxious Substances, describing the prerequisites for its entry into force, as well as as finding a compromise solution for entry into it by states that control sufficient tonnage of ships, which nevertheless try by all means to slow down the process of its ratification The author has analysed the provisions of the Convention on Pollution by Hazardous and Noxious Substances 2010 as well as domestic judicial practice for the resolution of disputes arising in connection with marine pollution by hazardous and noxious substances.

The number of ships carrying HNS cargoes is growing steadily with more than 200 million tonnes of chemicals traded annually by tankers and we have to recognize that accidents can and do happen. I urge all States to follow the example set by Norway and consider acceding to the HNS 2010 treaty as soon as possible, in order to bring it into force.

Kitak Lim,

Secretary-General of the International Maritime Organisation

Pollution of the marine ocean by oil and chemicals has serious consequences for the ecosystem, as oil and chemicals not only destroy its flora and fauna, changing the food chain links of the marine ecosystem, but also significantly affect human health and global climate change. In the last 50–60 years, an entirely new array of regulatory legal acts has developed to control environmental pollution processes¹. Such regulators include, for example, the Convention for the Prevention of Oil Pollution of the Sea 1954, the International Convention for Intervention on the High Seas in Cases of Accidents Resulting in Oil Pollution 1969, the International Convention for the Prevention of Pollution from Ships (MARPOL) 1978 and others.

However, the annual increase in the total volume of cargo transported by sea, including the growing segment of containerised and packaged cargo, which UNCTAD estimates to grow by 3.2 % to 11 billion tonnes in 2022², coupled with a 12 per cent increase between 2003 and 2022 in the amount of chemicals entering the world’s oceans³, shows that the global community has still not addressed the problem of harmful substances polluting the world’s oceans from both practical and legal perspectives. At the same time, harmful and poisonous substances on board ships can cause damage to both shipowners and the environment. For example, in February 2004, the Norwegian tanker BOW MARINER, carrying 11,000 tonnes of ethanol, exploded and sank in the vicinity of the east coast of the United States, killing 21 members of the ship’s crew and exposing the chemicals being transported to the ocean⁴ . Subsequently, the increasing number of accidents at sea involving the transport of harmful and toxic substances would lead Norway to be among the first countries to ratify the 2010 Convention on Hazardous and Noxious Substances Pollution⁵.

In 1996, the International Maritime Organisation adopted the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (the “1996 Convention”), which sought to establish the liability of carriers and shipowners for costs associated with spill incidents involving substances, although different in nature from oil, that are nonetheless destructive to the ecosystem.

However, the 1996 Convention did not enter into force due to the provisions of Article 46(1)(a) of the 1996 Convention, whereby “at least twelve States, including four States, each of which has a fleet of at least 2 million gross tonnage, have expressed their consent to be bound by the Convention”⁶. In addition, discussions also revolved around the 1996 Convention’s compensation for damage and fund provisions, which were largely modelled on the 1992 International Oil Pollution Compensation Fund and provided for a two-tier system expressing the joint liability of the shipowner (first tier) and traders (second tier)⁷. However, the chosen fund model did not fulfil the purpose of the Convention because, unlike the 1992 Convention 1992, where liability and the fund regulated only oil accidents, the Convention of 1996 was to regulate relations related to trade in hazardous and noxious substances, under which some 6,000 types of cargoes were covered⁸. In other words, the unclear regulation of liability and compensation for pollution by harmful substances, together with the lack of consensus in the international arena on the mechanism of operation of the Convention as a whole, were the reasons for the need to amend the 1996 Convention.

A new attempt to bring the Hazardous and Noxious Substances Pollution Convention into force was the adoption of its Protocol in 2010, resulting in the Hazardous and Noxious Substances Pollution Convention, 2010 (hereinafter “the 2010 Convention”). It also had a high barrier to entry into force in the form of a requirement for ratification or accession by at least 15 states, which together must control at least 50% of the world’s ship tonnage. In 2017, the Convention was ratified by Norway, followed by Canada, Turkey, Denmark, South African Republic, whose combined ship tonnage was less than 40% of the world’s tonnage, which was insufficient for the Convention to enter into force. It is therefore still necessary for the threshold of States Parties to be met. The Convention will enter into force 18 months after 12 States have ratified it, 4 of which will have to have at least 2 million ships with a total tonnage of 2 million tonnes.

Thus, on the international arena there is a prospect of a new valid legal regulator with regard to the consequences of pollution from ships carrying harmful and toxic substances. Further on we will discuss the content of the articles of the 2010 Convention on Pollution by Hazardous and Noxious Substances, description of the prerequisites for its entry into force and the search for a compromise solution for accession of states controlling sufficient tonnage of ships. In addition, the author also analysed the judicial practice of the Russian Federation concerning the enforcement of the provisions of the Code of Merchant Shipping in disputes arising from pollution by harmful substances.

International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 2010: Main Provisions

The purpose of the 2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea is to protect the marine environment and to provide adequate, prompt and effective compensation for damage to persons and property, to recover the costs of clean-up and remediation measures, and to compensate for economic loss resulting from the maritime transport of hazardous and noxious substances⁹.

Although the 1996 Hazardous and Noxious Substances Pollution Convention is based on the same principles as the successful 1969 Convention on Civil Liability for Oil Pollution Damage and the 1992 International Oil Pollution Compensation Fund that regulate oil spills from tankers: for example, not extending the provisions of the conventions to warships, public non-commercial vessels, providing adequate insurance for possible damage caused by an oil spill or discharge, or providing other financial security¹⁰. Nevertheless, the carriage of harmful and poisonous substances is much more complex than the trade in persistent oils, and the Legal Committee of the International Maritime Organization has encountered problems that were not addressed in the earlier oil pollution conventions¹¹ . This thesis explains the differences in the content of a number of articles between the Convention on Civil Liability for Oil Pollution Damage, the 1996 Convention and the 2010 Convention, which will be analysed later in this article.

The main content of the 1996 Convention is built around the definition of the concepts: “hazardous and noxious substances”, “shipowner”, “injured person”, “damage”, etc.¹² It establishes the general liability of the shipowner for damage caused by the carriage of hazardous substances, and designates maximum amounts, limiting liability to caps that depend on the type of ship, the size of its cargo capacity. In general, the maximum amount of compensation is up to 250 million estimated Special Drawing Rights units per occurrence¹³. However, for vessels with a cargo capacity of less than 5,000 tonnes, the maximum amount of compensation may be reduced to 100 million Special Drawing Rights. In addition, in some cases, the maximum amount of compensation may be increased to 750 million Special Drawing Rights if the incident resulted in massive pollution of the marine environment.

The Convention provides for no-fault (strict) liability of the shipowner by granting him various exemptions¹⁴. In particular, on the basis of the provisions of Art. 7(2) of the 2010 Convention, the shipowner is exempted from liability if the damage is caused by acts of war, public disturbances or natural phenomena of an exceptional, inevitable and unavoidable character. Exemption is also provided for cases of damage caused as a result of wilful acts of third parties, acts of public authorities and for situations when the shipper failed to provide information to the shipowner about harmful cargoes, which the latter did not know and should not have known. Article 8 of the 2010 Convention also establishes the joint and several liability of two or more shipowners, each of whose ships carries dangerous substances, provided that both ships were involved in the incident and the entire damage cannot be reasonably divided between them.

The 2010 Convention also sets time limits for claiming compensation and describes two levels of insurance for the shipowner: the first level is covered by compulsory insurance for shipowners who will be able to limit their liability, it is compulsory for all ships carrying hazardous and noxious substances. Articles 9, 10 of the 2010 Convention set the minimum amount of insurance per ship at level 1 of insurance is 100 million special rights (about 130 million USD¹⁵). The second tier is used when the sum insured does not cover the incident or is insufficient to meet the claim, the compensation of the second tier will be paid from a special fund. The second tier is optional and non-mandatory, but may be provided for by the national legislation of the convention’s member countries. The maximum amount of insurance per vessel is 250 million special rights (about 325 million USD¹⁶). The formation of an additional level of insurance can be done in different ways, depending on national legislation. For example, in some countries, an additional level of insurance may be provided through an additional premium payment to be made by shipowners. In other countries, the additional level of insurance may be provided from public funds or from a fund created from shipowners’ contributions.

The Compensation Fund, established by Art. 13 of the 2010 Convention, provides for compensation in cases where either the damage exceeds the owner’s limit of liability, or the owner and its insurer are financially unable to cover its share of liability, or the owner is exempted from liability under the 2010 Convention¹⁷. At the same time, the 2010 Convention specifies the maximum amount of compensation a shipowner may pay, depending on the amount of damage, and expands the range of persons entitled to compensation to include environmental organisations and public authorities¹⁸.

In addition, the 2010 Convention provides for sanctions for states that do not comply with the obligation to report on the importation of relevant dangerous and noxious goods in the form of exclusion from participation in the compensation fund until their reports are updated¹⁹. This means that, in the event of accidents, no payment from the additional level of the compensation fund is available for vessels flying the flag of sanctioned States.

The text describes a procedure for the prompt and efficient processing of compensation claims and requires States parties to provide cargo reports together with testimony to guarantee compliance with the requirements of the Convention. The substantive jurisdiction of legal claims against the Convention Fund is closely related to the substantive jurisdiction of claims against the owner and its insurer. Article 39.1 of the 2010 Convention provides that actions against the Fund are admissible only if the court of a Contracting State is the competent court for the action against the shipowner. At the same time, there is no choice of jurisdiction to hear disputes in respect of claims against the Fund if a claim against the shipowner is already pending before the competent court. In that case, the same court has exclusive jurisdiction over claims against the Fund for the same damage²⁰.

Also of interest is the modification by the 2010 Protocol of the provisions of the 1996 Convention regarding the reporting of imports of consignments and their packaging. Article 21 of the 2010 Convention requires the actual consignee of the consignments to report the import of the products and contribute to the fund on the same basis as carriers of all other shipments of harmful and hazardous substances. This obligation can be contractually shifted to another party, but if that party fails to fulfil the obligation, the actual consignee must ultimately pay the contribution²¹. The 2010 Convention provides an exemption from contributions to the fund for shipments in packaged form. As a result of this provision, recipients of all other cargoes will pay contributions to cover damage caused by packaged cargoes. To compensate for this, the first level of compensation to shipowners has been increased by 15 % for incidents involving packed cargo.

The 2010 Hazardous and Noxious Substances Pollution Convention: prospects for entry into force

There is little doubt that the 2010 Convention on Pollution by Noxious Substances was adopted to strengthen international measures to prevent pollution of the marine environment and to provide compensation for damage caused by such pollution. According to the content of the 2010 Convention, States Parties are obliged to take measures to prevent pollution of the marine environment resulting from the discharge of harmful substances from ships, and to provide compensation for damage caused by such pollution²².

As illustrated above, the 2010 Convention, as a legal regulator, provides for measures to prevent pollution of the marine environment from the escape of harmful substances from ships, including requirements for ship design and equipment, crew training and ship control, and also contains provisions on the liability of shipowners and Contracting States as control measures for the implementation of its provisions and sanctions for breaches of those provisions.

The prerequisites for an international regime based on the proven system of international compensation conventions have begun to emerge. A detailed procedure for the administration of the insurance fund will eventually bring control directly under the authority of those States that are members of the Convention, thereby greatly enhancing its effectiveness. Among other things, national legal regimes have already been provided with a model of regulatory designs for harmful substances for incorporation into domestic codes of merchant shipping.

With regard to the process of incorporating the provisions of the 2010 Convention into national legislation, which began as early as the drafting and negotiation of the text of the Convention in 1996, a number of legal orders have borrowed the provisions without change, such as the Russian Federation or Norway. In 1996, a number of legal orders have borrowed the provisions without modification, such as the Russian Federation or Norway. Other legal orders have adapted the provisions of the Convention according to their regional legislation. For example, the UK (prior to the Brexit procedure) made a reservation to Art. 39.7 of the 2010 Convention on the three-year period for notifying the Fund of compensation claims: UK law provides that Art. 39.7 of the 2010 Convention, which refers to the three-year notification period, will not apply in the UK to any claim that falls within the scope of EC Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil matters²³. Thus, in relation to the operation of the 2010 Convention provision in EU Member States, notice would not be sufficient and a claim would have to be brought against the Fund to avoid the three-year time limit.

From a practical point of view, the 2010 Convention cannot solve the problem of marine pollution by hazardous substances and poisons completely, as the problem is linked to various factors: including the influence of large industrial monopolists, the rapid development of agriculture, the dumping of waste and other sources of pollution into the world’s oceans. To address the problem of marine pollution by harmful substances, it is still necessary to take integrated measures at the international, national and regional levels, taking into account the diversity of types of cargo transported by sea. Moreover, the 2010 Convention requires significant expenditures on the part of States Parties to implement and monitor its provisions. Not all States Parties can provide sufficient funding to fulfil their obligations. The 2010 Convention also fails to provide sufficient measures to combat harmful marine pollution. For example, it does not set strict limits on the use of certain substances that may be harmful to the marine environment²⁴.

Despite a number of challenges associated with the entry into force of the 2010 Convention, it will nevertheless contribute to the strengthening of international co-operation and coherence in the protection of the marine environment and the control of harmful substances. This will improve the state of the marine environment and ensure the sustainable development of the global community.

Analysis of domestic judicial practice on marine pollution by harmful substances. Prospects of the 2010 Convention on Pollution by Hazardous and Noxious Substances on the territory of the Russian Federation

Since 1999, the Russian law has actually incorporated the norms of the 1996 Convention, since the Code of Merchant Shipping of the Russian Federation of 30.04.1999 No. 81-FZ (hereinafter – the “MSC RF”), adopted in that year, contained, among other things, Chapter 19, devoted to liability for damage in connection with the maritime transport of hazardous and harmful substances. This chapter is very close in its content to the 1996 Convention.

Nevertheless, despite its presence in the Russian legal order for more than twenty years, Chapter 19 of the MSC RF has not distinguished itself in the domestic judicial practice. Just over thirty judicial acts in which courts refer to the norms of Chapter 19 are publicly available. Of these, only a few judgements directly address the issues of shipowners’ liability for damage caused in connection with the carriage of hazardous and harmful substances. Besides, certain practice has been developed in the issues of shipowner’s liability insurance under this Chapter²⁵.

The majority of judicial acts resolving disputes on bringing the shipowner to liability on the basis of Chapter 19 of the MSC RF are not distinguished by judicial law-making and disclosure of the provisions of Chapter 19 of the MSC RF, but focus only on direct resolution of factual issues on bringing the shipowner to liability²⁶. In these decisions, in addition to applying the norms of Chapter 19, shipowners are also held liable using the norms of environmental legislation and Chapter 59 of the Civil Code of the Russian Federation, dedicated to liability for non-contractual damage.

Of particular interest is the legal position of the Arbitration Court of the North-West District, reflected in the ruling of 23.12.2022²⁷. In this case, the shipowner engaged a refuelling vessel to perform unloading operations and agreed fueling and concluded a bunkering contract. In the course of bunkering operations there was a fuel spill into the port water area. To clean up the spill, the shipowner engaged a company that carried out water pollution treatment and paid for its services in full. The shipowner then filed a claim for reimbursement of losses in the form of expenses for the payment for the services of cleaning the water area from pollution against the company that performed bunkering of the vessel, since, according to the plaintiff, the bunkererer is also liable in connection with the spill. The plaintiff’s legal position underlying the claim was based on the fact that both the bunkering vessel and the vessel being fuelled were involved in causing the damage. According to Article 336.4 of the MSC RF, this allows both shipowners to be recognised as joint defendants if the pollution damage cannot be reasonably divided between them. In its turn, this would allow the plaintiff, as a shipowner who compensated for the damage in full, to claim half of the debt from the second shipowner by way of recourse on the basis of subparagraph 2, paragraph 2, article 325 of the Civil Code of the Russian Federation.

The courts of three instances sided with the defendant in this case, rejecting the claim. In particular, the courts correlated the rules of Chapter 19.1 of the MSC RF, which deals with liability for damage caused by bunker fuel pollution, with the rules of Chapter 19 of the MSC RF, which regulates similar legal relations. The norms of Article 330 of Chapter 19 of the MSC RF provide for joint and several liability of the owners of the vessels involved in causing damage only if dangerous and harmful substances are transported by both vessels. In turn, Art. 336.4 of Chapter 19.1 of the MSC RF did not contain any such condition requiring that fuel be transported or at least found on the two vessels involved in the incident. Moreover, according to the evidence presented in the case, at the time of the incident the fuel was only on the plaintiff’s vessel²⁸. It is also noteworthy that in addition to applying Russian law, the courts also used the provisions of the International Convention for the Prevention of Pollution from Ships (MARPOL) of 1973, which is not a common practice in the Russian legal order.

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Thus, the 2010 Convention on Marine Pollution by Hazardous and Noxious Substances should enter into force to protect the marine environment and prevent the pollution of the world’s oceans by harmful substances, as well as to provide compensation for damage caused by such pollution. While it has the potential to improve the international fight against harmful marine pollution, its impact and effectiveness remain dependent on the participation of a sufficient number of States and their willingness to comply with the provisions of the 2010 Convention.

On the territory of the Russian Federation, the enactment of the Convention on Marine Pollution by Hazardous and Noxious Substances of 2010 also seems important, because despite the small number of disputes under Chapter 19 of the MSC RF, there is nevertheless a need to bring to uniformity the existing judicial practice, to develop enforcement mechanisms, as well as the emergence of an enacted legal regulator for the effective resolution of disputes arising from spills of harmful and toxic substances at sea. ■

Notes