Danish efforts bear fruit: Clear regulations on liability and compensation for accidents involving hazardous goods 

United Nations’ International Maritime Organization (IMO) has adopted new regulations on compensation in connection with accidents at sea where hazardous and polluting substances can cause comprehensive damage that may affect, among other things, the marine environment. Hereby a decisive decision has been made to ensure broad support for a Convention the intention of which is to improve the victims’ possibilities of being compensated.

In this way, a solution has been found to the problems that have meant that the so-called HNS Convention from 1996 has never entered into force. The intention behind the HNS Convention was, precisely, to create a clear international set of regulations that should become effective in case of pollution accidents. Unfortunately, it was hard to meet the requirements of the Convention and, consequently, a number of countries never acceded to it.

Denmark has played a very active part in the work made to get the new regulations in place. The Danish Maritime Authority, which has negotiated on behalf of Denmark, presented the decisive proposal for a solution to the issue on payment for packaged goods. This proposal is among those now adopted.

Deputy Director-General Birgit Sølling Olsen, who was also one of the Vice-Chairmen of the Conference in the light of the Danish efforts, states:

"I’m very satisfied with the result, which ensures that now the victims of an HNS accident get a compensation system similar to that which has functioned well for many years in connection with the victims of oil pollution."

Facts
The IMO hosted an International Diplomatic Conference in London on 26-30 April 2010. The Conference adopted a Protocol to the HNS Convention from 1996. The Convention deals with liability and compensation for damage in connection with the carriage of hazardous and noxious substances by sea (HNS substances).

HNS substances are a number of substances including chemicals known from the household, fertilizers and substances used in the chemical industry.

The compensation scheme of the Convention is two-fold. First of all, ships carrying HNS substances must take out liability insurance. Secondly, an international HNS Fund will be established to cover claims exceeding the shipowners’ liability limit. Importers of HNS substances carried in bulk are to contribute to the Fund. This is similar to the scheme known from the carriage of heavy oil.

The new regulations take account of countries that have not ratified the Convention because they found that it was administratively difficult – not least as regards the administration of imports of special substances carried in packaged form by sea. This meant that some countries had problems ensuring that the importers of such substances also made payments to the International HNS Compensation Fund. As a consequence, these importers are now exempted from paying to the Fund. Instead the shipowner’s liability for ships carrying HNS substances in packaged form is increased, and the other HNS importers must also help cover damage caused by these substances.

In connection with each individual accident, it is possible to cover damages for a total of 250 million Special Drawing Rights, SDR, equivalent to about DKK 2.1 billion.