The Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea

The Ministry of Transport and Communications has circulated for public commenting proposals for acts under which Finland would adopt the Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention). The adoption of the Convention would increase shipowners' liability for the carriage of hazardous and noxious substances by sea and ensure that persons suffering damages are compensated more promptly and effectively.

The HNS Convention contains provisions on liability and compensation related to the carriage of hazardous and noxious substances by sea. The basic principle of the Convention is that strict liability for any damage is primarily carried by the owner of the ship, who is required to maintain insurance to cover this liability. The owner's liability under the Convention has a maximum limit, however. The HNS Convention follows the same principles as, for example, international conventions on oil pollution damage.

The owner's liability is complemented by the international HNS Fund to be established under the Convention. The purpose of this fund is to provide compensation for any damage to the extent that the maximum limit of the owner's liability is inadequate to compensate for it. The operation of the Fund is to be financed through contributions collected from receivers of hazardous and noxious substances operating in the State Parties.

The adoption of the Convention would increase the owner's liability in case of damage. Currently, liability is fault based, and the maximum amounts are considerably lower than those set in the Convention. Through the HNS Fund, the receivers of hazardous and noxious substances in the State Parties would also participate in compensating for the damage in situations where the owner's liability would be inadequate to do so.

The duty to pay contributions would concern some 20 receivers of hazardous substances in Finland.

The Ministry of Transport and Communications circulated the draft amendment to the Maritime Act and draft acts bringing the HNS Convention into force for public commenting on 13 May 2019.

What next?

Statements on the legislative amendments and the proposal for adopting the Convention can be submitted until 7 June 2019. Statements may be submitted by all organisations and citizens at www.lausuntopalvelu.fi. After the round of statements, the legislative drafting will be continued by public officials.

The Ministry will monitor the international situation of State Parties adopting and acceding to the Convention. Finland only intends to deposit its instrument of accession after a number of major countries receiving hazardous substances have accepted the Convention. This would ensure that the contributions would not be an excessive burden for Finnish companies in case of an accident.

The HNS Convention is a treaty negotiated in the International Maritime Organization (IMO) and partly within the EU's competence. Where possible, EU Member States should adopt the Convention no later than 6 May 2021. The Convention will enter into force once at least twelve states have expressed their consent to be bound by it.

Inquiries:

Tiina Ranne, Senior Ministerial Adviser, tel. +358 295 34 2004

Sini Wirén, Director of Unit, tel.  +358 295 34 2532, Twitter @WirenSini

Lausuntopalvelu.fi: Lausuntopyyntö -Hallituksen esitysluonnos HNS-yleissopimuksen hyväksymisestä (LVM/1087/03/2013) (in Finnish)
EU: Council decisions on authorising the Member States to ratify the Convention (2017/769)
EU: Council decisions on authorising the Member States to ratify the Convention (2017/7670)
The Hazardous and Noxious Substances Convention
IMO: HNS Convention implementation