The HNS Convention [As Modified by the 2010 HNS protocol](see full pdf format)
The HNS
Convention
HNS FUND
SHIPOWNER
Tonnage of ship (x 1 000 units)
SDR (millions)
The HNS Convention
The International Convention on Liability and Compensation for Damage
in Connection with the Carriage of Hazardous and Noxious Substances by
Sea, 1996 (HNS Convention) aims to ensure adequate, prompt and effective
compensation for damage to persons and property, costs of clean up and
reinstatement measures and economic losses resulting from the maritime
transport of hazardous and noxious substances (HNS).
The legal framework
The HNS Convention was adopted by an International Conference organised by the
International Maritime Organization (IMO) in London in May 1996 and is based on
the highly successful model of the Civil Liability and Fund Conventions which cover
pollution damage caused by spills of persistent oil from tankers. As with the original oil
pollution compensation regime, the HNS Convention will establish a two-tier system for
compensation to be paid in the event of accidents at sea, in this case, involving hazardous
and noxious substances, such as chemicals.
Tier one will be covered by compulsory insurance taken out by shipowners, who would be
able to limit their liability. In those cases where the insurance does not cover an incident, or is
insuffi cient to satisfy the claim, a second tier of compensation will be paid from a Fund, made
up of contributions from the receivers of HNS. Contributions will be calculated according to
the amount of HNS received in each Member State in the preceding calendar year.
By 2009, the HNS Convention had still not entered into force, due to an insuffi cient
number of ratifi cations. A second International Conference, held in April 2010, adopted
a Protocol to the HNS Convention (2010 HNS Protocol), that was designed to address
practical problems that had prevented many States from ratifying the original Convention.
Once the 2010 HNS Protocol enters into force, the 1996 Convention, as amended by the
2010 Protocol, will be called: “the International Convention on Liability and Compensation
for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea,
2010” (2010 HNS Convention).
What are Hazardous and Noxious Substances (HNS)?
The defi nition of HNS set out in the HNS Convention is based on lists of individual
substances identifi ed in a number of IMO Conventions and Codes, designed to ensure
maritime safety and prevention of pollution. HNS represent a wide array of chemical
substances of varying properties and hazards, which include both bulk cargoes and packaged
goods. Bulk cargoes can be solids, liquids, including both persistent and non-persistent
oils, and liquefi ed gases, such as liquefi ed natural gas (LNG) or liquefi ed petroleum gas
(LPG). Low hazard substances, such as coal and iron, are generally excluded from the HNS
Convention. There are a large number of substances covered by the Convention, such as,
the International Maritime Dangerous Goods Code (IMDG Code), which represents only
one of the Codes covered by the Convention and lists hundreds of substances which can be
dangerous when shipped in packaged form.
How much compensation will
be available?
Where damage is caused by HNS in bulk, the
shipowner will normally be able to limit his
fi nancial liability to an amount between
10 million and 100 million Special Drawing
Rights (SDR) of the International Monetary
Fund (approximately USD 15 million to
USD 150 million)*, depending on the gross
tonnage of the ship. Where damage is caused by
packaged HNS, the maximum liability for the
shipowner is SDR 115 million (approximately
USD 175 million). The HNS Fund will provide
an additional tier of compensation up to a
maximum of SDR 250 million (approximately
USD 380 million), including any amount paid
by the shipowner and his insurer.
* The unit of account in the treaty instrument is the Special Drawing
Right (SDR) as defi ned by the International Monetary Fund. Conversion
of currencies has been made on the basis of the rates at 1 September 2010
(on that day 1 SDR = £0.983971 or US$1.514720).
What types of damage will be covered by the HNS Convention?
The HNS Convention covers damage in the territory or territorial sea of a State Party to the
Convention. It also covers pollution damage in the exclusive economic zone (EEZ), or equivalent
area, of a Member State and damage (other than pollution damage) caused by HNS carried on
board ships registered in the flag of the Member State outside the territorial sea of any State.
The following types of damage will be covered:
• Loss of life or personal injury on board or outside the ship carrying the HNS
• Loss of or damage to property outside the ship
• Economic losses resulting from contamination, e.g. in the fishing, mariculture and
tourism sectors
• Costs of preventive measures, e.g. clean-up operations at sea and onshore
• Costs of reasonable measures of reinstatement of the environment
The HNS Convention does not apply to oil pollution damage from tankers, as defined
in the International Convention on Civil Liability for Oil Pollution Damage, nor for loss
or damage, as covered by the Bunkers Convention. Loss or damage caused by radioactive
materials is also excluded.
Claims under the HNS Convention will be assessed according to criteria that will be
established by the Governments of HNS Fund Member States.
The shipowner
Under the HNS Convention, the shipowner will have strict liability for any damage caused by
HNS, i.e. the shipowner will be liable even without fault on the part of the ship or its crew. The
shipowner will be obliged to maintain insurance to cover his liabilities under the Convention.
This insurance will normally be provided by protection and indemnity (P&I) insurers.
The HNS Fund
The HNS Fund will be established once the HNS Convention enters into force. States
which ratify the 2010 HNS Protocol will become Members of the HNS Fund. The HNS
Fund will provide the second tier of compensation and will be administered by a Secretariat
and headed by a Director.
The HNS Fund is expected to function similarly to the International Oil Pollution
Compensation Funds (IOPC Funds) and will be governed by an Assembly composed
of Government representatives from its Member States. The HNS Fund will also have a
Committee to address claims for compensation, which will be similar to the IOPC Fund’s
Executive Committee.
Financing of the HNS Fund
The HNS Fund will be financed by contributions paid by receivers of HNS, or titleholders
for LNG cargo in some cases, that have been transported by sea to the ports and terminals of
Member States.
The HNS Fund will have up to four accounts, with separate accounts for oil, LNG and LPG
and a general account for bulk solids and other HNS. However, until the quantities of HNS
received in all States Parties reach the established thresholds, as shown in the table overleaf,
all accounts will be managed out of the general account.
Contributions by individual receivers to the separate accounts and sectors will be in
proportion to the quantities of HNS received, provided that the quantities are above the
established thresholds.
Whereas the total contributions to the general account will be divided amongst the sectors,
according to the level of claims in each sector, the separate accounts will only meet claims
resulting from incidents involving the respective cargoes, i.e. there will be no cross-subsidisation.
As part of the changes agreed in the 2010 HNS Protocol, packaged goods will no longer be
considered as contributing cargo to the HNS Fund. However, compensation for incidents
involving packaged HNS will continue to be covered under the general account.
Cover: © Cedre
Inner:
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INTERNATIONAL OIL POLLUTION COMPENSATION FUNDS
Portland House
Bressenden Place
London SW1E 5PN
United Kingdom
TELEPHoNE: +44 (0)20 7592 7100
TELEfax: +44 (0)20 7592 7111
E-maiL: info@iopcfund.org
WEBSiTE: www.iopcfund.org
The role of the IOPC Funds
The IOPC Funds are responsible for implementing the provisions of the Fund Conventions.
Given the Organisations’ long experience in managing the oil pollution compensation system
and, as requested by the International Conference that adopted the HNS Convention, the
IOPC Funds’ Secretariat has been tasked with assisting the IMO Secretariat in setting up the
HNS Fund and with making preparations for the first session of the HNS Assembly.
Entry into force of the HNS Convention
The 2010 HNS Protocol will enter into force 18 months after the date on which it is ratified
by at least twelve States, including four States each with not less than 2 million units of gross
tonnage, and having received during the preceding calendar year a total quantity of at least
40 million tonnes of cargo that would be contributing to the general account.
Reporting requirements
Even before the HNS Convention enters into force, States are obliged when they ratify the
Convention, and annually thereafter, to report the total quantities of contributing cargo,
for each account and sector, which were received in that State in the preceding year. Failing
to comply with the reporting requirements could lead to a suspension of the status of a
Contracting State or to withholding of compensation in relation to the State concerned.
Further information
Further information on the HNS Convention and the 2010 HNS Protocol can be found at
www.hnsconvention.org.
Establishment Contributions to
of account account/sector
General account 40 million tonnes*
• Bulk solids 20 000 tonnes
• Other HNS No minimum quantity 20 000 tonnes
Separate accounts
(or Sectors within the general account)
Oil account 350 million tonnes
• Persistent oil 150 000 tonnes
• Non-persistent oil 20 000 tonnes
LNG account 20 million tonnes No minimum quantity
LPG account 15 million tonnes 20 000 tonnes
*Condition for entry into force
HNS Protocol, April 2010
International Level National Level
Timeline: from adoption
to entry into force
Open for signature
1st November 2010
to 31st October 2011
The HNS Convention will
come into force 18 months
following the date when
12 States have ratified
– Four of which with not less than
2 million units of gross tonnage
– The volume of contributing
cargo for the general account must
be of at least 40 million tonnes
HNS Protocol enters into force
Member State
Develop National Legislation
Regulatory Authorities’ Approval
Implementation into National Law
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