IMO adopts bunkers convention

The last significant gap in the international regime for compensating victims of oil spills from ships is set to be closed with the adoption by IMO of a new convention on liability and compensation for pollution from ships' bunkers. A diplomatic conference held from 19-23 March 2001 at IMO headquarters in London reached agreement on the details of the convention, which will enter into force one year after the criteria enshrined in Article 14 of the Convention have been met.

The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, will establish a liability and compensation regime for spills of oil, when carried as fuel in ships' bunkers. Current regimes covering oil spills do not include bunker oil spills from vessels other than tankers.

Commenting on the successful outcome of the conference, IMO Secretary-General Mr. William A. O’Neil said, "The adoption of a bunkers convention completes the task initiated by the Legal Committee when it was established by IMO more than 30 years ago- namely, the adoption of a comprehensive set of unified international rules governing the award of prompt and effective compensation to all victims of ship-sourced pollution."

He added, "With the adoption of this Convention the Organization has now put in place all the elements of a liability and compensation regime for damage caused by the sea carriage of oils and other hazardous and noxious substances. This is a major contribution towards the protection of the environment, which will benefit coastal States and all other victims of pollution caused by bunker oil spills. The confidence of the international community in IMO’s ability to anticipate and develop regulatory standards for global maritime needs will undoubtedly be enhanced by the adoption of this treaty."

Mr O’Neil went on to stress the importance of swift ratification and implementation of the Convention. He said, "The work of IMO and its Membership on this subject will not stop with the signing of the Final Act of the Conference. Our efforts should turn immediately to the task of bringing the Convention into force at the earliest possible date, and to arranging for its implementation."

The Conference was attended by delegations of 70 IMO Member States and one Associate Member (Hong Kong, China). A delegation from Benin attended as an observer. Observers from non-governmental organizations and inter-governmental organizations also attended.

The bunkers convention, which provides a free-standing instrument covering pollution damage only, is modelled on the International Convention on Civil Liability for Oil Pollution Damage, 1969 (CLC). A key requirement of both is the need for the registered owner of a vessel to maintain compulsory insurance cover. Another key provision in the bunkers convention is the requirement for direct action, which would allow a claim for compensation for pollution damage to be brought directly against an insurer.

Application and entry into force

The new Convention applies to ships over 1,000 gross tonnage. It will enter into force one year after the date on which 18 States, including five States each with ships whose combined gross tonnage is not less than 1 million gt have either signed it without reservation as to ratification, acceptance or approval or have deposited instruments of ratification, acceptance, approval or accession with the IMO Secretary-General.

The bunkers convention also includes articles on:

The resolution also urges all States to initiate action without awaiting the entry into force of the Convention.

Resolution on protection for persons taking measures to prevent or minimize the effects of oil pollution – the resolution urges States, when implementing the Convention, to consider the need to introduce legal provision for protection for persons taking measures to prevent or minimize the effects of bunker oil pollution. It recommends that persons taking reasonable measures to prevent or minimize the effects of oil pollution be exempt from liability unless the liability in question resulted from their personal act or omission, committed with the intent to cause damage, or recklessly and with knowledge that such damage would probably result. It also recommends that States consider the relevant provisions of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996, as a model for their legislation.

Background - Development of the bunkers convention

The idea of a regime covering pollution from ships’ bunkers was first mooted during discussions on the 1992 Protocols to the 1969 CLC and the 1971 IOPC (FUND). However, it was felt that to include bunkers in those instruments would complicate matters since there was a clear difference between oil carried as cargo and bunker fuel oil.

In 1994, Australia submitted a paper to the 38th session of IMO’s Marine Environment Protection Committee (MEPC) proposing the development of a regime for liability and compensation for damage in the event of damage caused by oil from ships' bunkers.

The MEPC requested the Legal Committee to give the matter due consideration and the Legal Committee’s 73rd session in 1995 agreed to include the matter in its work programme.

The idea had also been raised in the Legal Committee during negotiations on the development of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), which was eventually adopted in 1996. Bunkers were left out of this Convention, but with the firm understanding of several delegations that a bunkers convention would be developed at the earliest possible opportunity thereafter.

The need for a bunkers convention was highlighted in 1996 in a joint submission to the 75th session of the Legal Committee by Australia, Canada, Finland, Norway, South Africa, Sweden and the United Kingdom. It referred to the UK P&I Club’s Analysis of Major Claims 1993 which had stated that "...half of the total number of pollution claims arose from incidents involving ships not carrying oil cargo."

Furthermore, Oil Spill Intelligence Report data confirmed that even for larger spills the number of non-tanker vessel spills was significantly greater than the number of tanker spills. Dealing with bunker spills from non-tankers was made more difficult by the lack of a liability and compensation regime, while the nature of fuel oil itself made spills of such oils more difficult - and more costly - to clean up.

It has been estimated that, on average, the amount of bunkers carried in non-tankers is around 14 million tonnes at any given time - compared with approximately 130 million tonnes of oil is carried as cargo on the world’s seas. Some bulk carriers and container ships carry more oil as bunkers than coastal tankers carry as cargo.

Liability and Compensation Conventions adopted by IMO

  • International Convention on Civil Liability for Oil Pollution Damage (CLC), 1969

  • International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND), 1971

  • Convention relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material (NUCLEAR), 1971

  • Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (PAL), 1974

  • Convention on Limitation of Liability for Maritime Claims (LLMC), 1976

  • International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), 1996

  • International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001.