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

Entry into force of Bunker Convention

The International Convention on Civil Liability for Bunker Oil Pollution 2001 (the Bunker Convention) will enter into force in State Parties on 21st November 2008.

Entry into force of Bunker Convention

On 21st November 2007 Sierra Leone became the last of the required 18 states to adopt the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunker Convention), 2001. Other nations that have adopted the treaty are: Bahamas, Bulgaria, Croatia, Cyprus, Estonia, Germany, Greece, Hungary, Iceland, Jamaica, Latvia, Lithuania, Luxembourg, Marshall Islands, Norway, Poland, Samoa, Singapore, Slovenia, Spain, Tonga and United Kingdom.

Entry into force of Bunker Convention

The Bunker Convention brings pollution from bunker spills within an international regime of liability, limitation and mandatory insurance that complements the regime that has been in place for many years with respect to spills of persistent oils from tankers, the International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC). While the CLC has always applied to bunker spills from tankers subject to it, until the entry into force of the Bunker Convention, bunker spills from dry cargo and other types of ships are subject only to national regimes.

Entry into force of Bunker Convention

The United States is not signatory to the CLC and its national legislation, the Oil Pollution Act of 1990 (OPA90) was written to include bunker spills from virtually all ships. The adoption of the Bunker Convention brings signatory countries closer to the regime applicable in the United States.

Scope of application
This Convention shall apply exclusively: (a) To pollution damage caused: (i) in the territory, including the territorial sea, of a State Party, and (ii) in the exclusive economic zone of a State Party, established in accordance with international law, or, if a State Party has not established such a zone, in an area beyond and adjacent to the territorial sea of that State determined by that State in accordance with international law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured; (b) To preventive measures, wherever taken, to prevent or minimize such damage.

Exclusions
This Convention shall not apply to: warships, naval auxiliary or other ships owned or operated by a State and used, for the time being, only on Government non-commercial service.

Comparison of the Bunker Convention with the CLC

CLC applies to bunker spills from tankers subject to it. The Bunker Convention does not apply in circumstances where the CLC applies, so there is no overlap between the two and any vessel already subject to the CLC will not be affected by the Bunker Convention. The Bunker Convention applies to any sea-going vessel and seaborne craft, of any type whatsoever, which is carrying "bunker oil", defined as any hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil. Unlike the CLC, the Bunker Convention is not limited to persistent fuel oils and will apply to any mineral oil used to operate the ship, including lighter marine diesel.

What is P&I Insurance?

P&I stands for Protection and Indemnity. P&I is insurance in respect of third party liabilities and expenses arising from owning ships or operating ships as principals. The risks typically covered by P&I Clubs are described in more detail under Insurance Cover. It is not hull insurance, war risk insurance, loss of profit/freight insurance, detention insurance, strike insurance or uninsured legal expenses (Defence) cover.

Issue of Blue Cards

Following consideration by the ruling bodies of the various members of the International Group of P&I Clubs (IG), it has been agreed that the IG Clubs will issue the required Bunker Convention Blue Cards to enable signatory states to issue certificates from August 2008.

Issue of Blue Cards

To comply with the Bunker Convention requirements the Blue Card will need to state: the name of the ship, the ships distinctive number or letters (or call sign), the port of registry, the IMO number and the name and full address of the principal place of business of the registered owner. Blue Cards will only be issued in the name of the owner. They will not be issued in the name of the operators, managers or bareboat charterers.

Issue of Blue Card

It is therefore necessary that all Members requesting Blue Cards ensure that they have in place P&I war risks cover on standard terms with a separate limit for P&I liabilities. Members should also contact their primary war risks underwriters to notify them of the assignment of rights/recovery under the policy.

Certification and Pooling of Liability under Certificates

The Bunker Convention imposes the requirement to arrange compulsory insurance or financial security on the registered owner of a ship of more than 1000 GT. The liability provisions apply to ships of less that 1000 GT, but these smaller ships are not required to have insurance. The registered owner is required to obtain the cover for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime, but in all cases not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.

Certification and Pooling of Liability under Certificates

The insurance provider is subject to direct action which is intended to do away with pay to be paid provisions within P&I insurance. Where a ship is registered in a state party to the Bunker Convention, a State Certificate must be obtained from the appropriate state authority. Ships registered in non-signatory states will need to obtain a certificate from a state that is a party.

Certification and Pooling of Liability under Certificates

The certificate shall be in the form of the model set out in the conventions annex and shall contain the following particulars:
(a) name of ship, distinctive number or letters and port of registry; (b) name and principal place of business of the registered owner; (c) IMO ship identification number; (d) type and duration of security; (e) name and principal place of business of insurer or other person giving security and, where appropriate, place of business where the insurer or security provider is established; (f) period of validity of the certificate, which shall not be longer than the period of validity of the insurance or other security. The certificates need to be in English, French or Spanish, or the text should be translated into one of these languages.

State Certification
Ships registered in State Parties: Need only obtain a State certificate from that State. Ships registered in nonState Parties: Must obtain a State issued certificate from a State Party to the Convention.

State Certification
Until Panama finalizes the formal process of ratifying the Bunker Convention, this Administration has undersigned an agreement with Cook Islands, whereby the Cook Islands will issue a Certificate of Insurance or other Financial Security in Respect of Civil Liability for Bunker Oil Pollution Damage to vessels flying the Panamanian flag.
*Please refer to MMC 180

Definitions
1. "Ship" means any seagoing vessel and seaborne craft, of any type whatsoever. 2. "Person" means any individual or partnership or any public or private body, whether corporate or not, including a State or any of its constituent subdivisions. 3. "Shipowner" means the owner, including the registered owner, bareboat charterer, manager and operator of the ship. 4. "Registered owner" means the person or persons registered as the owner of the ship or, in the absence of registration, the person or persons owning the ship. However, in the case of a ship owned by a State and operated by a company which in that State is registered as the ships operator, "registered owner" shall mean such company. .

Definitions
5. "Bunker oil" means any hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil. 6. "Civil Liability Convention" means the International Convention on Civil Liability for Oil Pollution Damage, 1992, as amended. 7. "Preventive measures" means any reasonable measures taken by any person after an incident has occurred to prevent or minimize pollution damage. 8. "Incident" means any occurrence or series of occurrences having the same origin, which causes pollution damage or creates a grave and imminent threat of causing such damage.

Definitions
9. "Pollution damage" means: (a) loss or damage caused outside the ship by contamination resulting from the escape or discharge of bunker oil from the ship, wherever such escape or discharge may occur, provided that compensation for impairment of the environment other than loss of profit from such impairment shall be limited to costs of reasonable measures of reinstatement actuall undertaken or to be undertaken; and (b) the costs of preventive measures and further loss or damage caused by preventive measures.

Definitions
10. "State of the ship's registry" means, in relation to a registered ship, the State of registration of the ship and, in relation to an unregistered ship, the State whose flag the ship is entitled to fly. 11. "Gross tonnage" means gross tonnage calculated in accordance with the tonnage measurement regulations contained in Annex 1 of the International Convention on Tonnage Measurement of Ships, 19691. 12. "Organization" means the International Maritime Organization. 13. "Secretary-General" means the Secretary-General of the Organization.

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