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2008 November 27   15:05

Bunker Convention comes into effect

The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 came into effect last Friday. The Convention was adopted to ensure that adequate, prompt, and effective compensation is available to persons who suffer damage caused by spills of oil, when carried as fuel in ships' bunkers. The Convention applies to damage caused on the territory, including the territorial sea, and in exclusive economic zones of States Parties.

The convention is modelled on the International Convention on Civil Liability for Oil Pollution Damage, 1969. As with that convention, a key requirement in the bunkers convention is the need for the registered owner of a vessel to maintain compulsory insurance coverage.

Another key provision is the requirement for direct action - this would allow a claim for compensation for pollution damage to be brought directly against an insurer. The Convention requires ships over 1,000 gross tonnage to maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage.

The US Coast Guard has issued a statement highlighting that that the country is neither a signatory nor party to the Convention, and “has no present intention of ratifying this” instrument. The statement continues: “As such, the U.S. cannot issue certificates relating to the bunker convention, not will the US enforce the convention on foreign ships visiting the US.”

But it adds with regard to compliance: “Some states party to the Bunkers Convention have agreed to issue State Convention certificates to ships registered in non-State parties irrespective of whether they are calling at a port in their territory or arriving at or leaving an offshore facility in their territorial waters. U.S. ships that operate in the territorial seas of party states may apply for a bunker convention certificate from those participating states. Alternatively, US ships operators may also coordinate with their International Group of P&I Clubs to obtain a certificate.” Other organisations can provide a certificate. US-based Water Quality Insurance Syndicate (WQIS) says it has been preparing for this event since 2007 when the last of the required 18 member states adopted the Convention. WQIS ads that it is authorised by the majority of the flag states to provide the certification of financial guarantee that vessels need to produce. The required certificate is provided without charge to WQIS policyholders.

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