IMO MANUALS AND GUIDANCE DOCUMENTS. Note by the Secretariat

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1 INTERNATIONAL MARITIME ORGANIZATION E IMO TECHNICAL GROUP OF THE MEPC ON OPRC-HNS 5th session Agenda item 3 MEPC/OPRC-HNS/TG 5/3/2 24 July 2006 ENGLISH ONLY MANUALS AND GUIDANCE DOCUMENTS Manual on Oil Pollution Section V: Administrative aspects of Oil Pollution Response Note by the Secretariat Executive summary: Action to be taken: Paragraph 9 Related documents: SUMMARY The present document provides suggested revisions to the Manual on Oil Pollution - Section V: Administrative aspects of Oil Pollution Response, as received from ISU and IOPC Fund, and also including modifications by the Secretariat, needed to compile a final draft revision to the manual. MEPC 54/WP.1; MEPC/OPRC-HNS/TG 3/8/2 and MEPC/OPRC- HNS/TG 4/3/3 Background 1 At its third session, the OPRC-HNS Technical Group considered a document submitted by the United Kingdom proposing a review of the 1998 edition of the Manual on Oil Pollution, Section V Administrative Aspects of Oil Pollution (MEPC/OPRC-HNS/TG 3/8/2), providing specific recommendations on the main areas of focus for updating the manual. 2 The detailed review revealed that the nature of the changes fell into five specific areas:.1 verification of referencing of IMO instruments and related statements, to ensure that these were still accurate and reflected the most recent amendments;.2 chapter 7 on salvage required a substantial rewrite to ensure it was up to date and several other references related to salvage issues needed to be checked to ensure that they were current and accurate;.3 Part II on liability and compensation required a rewrite to ensure it was current, taking into account recent modifications to the international compensation regime; I:\MEPC\OPRC-HNS\TG\5\3-2.doc For reasons of economy, this document is printed in a limited number. Delegates are kindly asked to bring their copies to meetings and not to request additional copies.

2 MEPC/OPRC-HNS/TG 5/3/ the section addressing OPRC-related issues should be reviewed and expanded recognizing its importance within the context of the manual; and.5 the reference section needed review and any new references should be added to the existing list. 3 The Group, recognizing that certain sections of the manual, in particular, chapter 7 of Part I on Salvage and Part II on Compensation for oil pollution damage, required expertise that did not exist within the Technical Group, invited representatives of the International Salvage Union (ISU) and the International Oil Pollution Compensation Funds (IOPC), who were present at the meeting. 4 Following some discussion on the specific details and requirement for the revision, and agreement by ISU and the IOPC, the Group requested:.1 the Secretariat to co-ordinate the overall revision process and specifically to verify the references to IMO instruments and to rewrite the section on OPRC;.2 the ISU, based on their stated agreement to do so, to take on the revision of the elements related to salvage and, in particular, to rewrite chapter 7;.3 the IOPC to rewrite the section on liability and compensation; and.4 the Technical Group members to forward appropriate references for inclusion in the reference section of the manual. Current status 5 During the intersessional period the Secretariat co-ordinated the overall revision process, as requested by TG 4, with ISU undertaking the revision of those portions of the manual which specifically address salvage issues, the IOPC revising the sections of the manual related to oil pollution compensation and the Secretariat updating the section on the OPRC Convention with a view to better profiling it within the manual. A full verification of the references to IMO instruments and guidelines identified in the manual is still needed. 6 The Secretariat seeks guidance from the Technical Group on where best to include the revised section on the OPRC Convention within the manual. As Part I of the manual specifically addresses Roles and functions of entities which could be involved in an oil pollution emergency and its aftermath and Part II addresses Part II Compensation for oil pollution damage, a profile on the OPRC does not easily fit in either section as a stand-alone piece. 7 The Secretariat approached the Technical Group by during the intersessional period, requesting it to forward appropriate references for inclusion in the reference section of the new manual, as requested. However, no references were forthcoming. 8 Due to the format in which the manual is currently available, i.e. pdf only, the changes have not been incorporated to the actual text. Instead, the original manual has been included as annex 1 and the proposed amendments, as outlined in paragraph 1, have been included in annex 2. I:\MEPC\OPRC-HNS\TG\5\3-2.doc

3 - 3 - MEPC/OPRC-HNS/TG 5/3/2 Action requested of the Technical Group 9 The Technical Group is invited to:.1 approve the revised sections of the manual as prepared by ISU, the IOPC and the Secretariat respectively;.2 provide guidance on placement of the new text on the OPRC within the manual; and.3 instruct the Secretariat to verify and update all references to IMO instruments and integrate the revised text into a finalized draft and to submit a final draft of the manual for approval at TG 6, with a view to its submission and approval by the Committee at MEPC 56. *** I:\MEPC\OPRC-HNS\TG\5\3-2.doc

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5 MEPC/OPRC-HNS/TG 5/3/2 ANNEX 1 Manual on Oil Pollution Section V: Administrative aspects of Oil Pollution Response I:\MEPC\OPRC-HNS\TG\5\3-2.doc

6 Section V MANUAL ON OIL POLLUTION ADMINISTRATIVE ASPECTS OF OIL POLLUTION RESPONSE 1998 Edition B INTERNATIONAL MARITIME ORGANIZATION London, 1998

7 First published in 1998 by the INTERNATIONAL MARITIME ORGANIZATION 4 Albert Embankment, London SE1 7SR Printed in the United Kingdom by Halstan & Co. Ltd., Amersham, Bucks ISBN IMO PUBLICATION Sales number: I572E Copyright # International Maritime Organization 1998 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without prior permission in writing from the International Maritime Organization.

8 Foreword The Marine Environment Protection Committee (MEPC), at its thirtythird session, agreed that a new section V of the IMO Manual on Oil Pollution, dealing with administrative aspects and, in particular, with the roles and functions of entities which could be involved in an oil pollution emergency and its aftermath, should be developed. The text of this section was approved and authorized for publication by the MEPC at its thirty-sixth session. The Manual on Oil Pollution consists of five sections: Section I Prevention (out of print; revision under consideration) Section II Contingency Planning (revised edition published in 1995) Section III Salvage (revised edition published in 1997) Section IV Combating Oil Spills (published in 1988; revision under consideration) Section V Administrative Aspects of Oil Pollution Response (this publication) TheMEPCwishestoexpressitsappreciationtothemanyexpertswho assisted in the preparation of the text and contributed tables and diagrams; in particular, to the International Oil Pollution Compensation Funds, the International Tanker Owners Pollution Federation Limited, the International Salvage Union and the International Group of P&I Clubs. A series of sections of the Manual on Chemical Pollution are currently in the course of preparation and some of them have already been published: Section 1 Problem Assessment and Response Arrangements (1987 edition; currently under review) Section 2 Search and Recovery of Packaged Goods Lost at Sea (1991 edition) iii

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10 Contents Abbreviations... vii Introduction... 1 Part I Roles and functions of entities which could be involved in an oil pollution emergency and its aftermath Chapter 1 The shipowner 1.1 Generalrightsandobligations ShipboardOilPollutionEmergencyPlan Notification Pollutionresponseandclean-up... 5 Chapter2 Theshipoperator... 6 Chapter3 Themaster... 7 Chapter4 Thecargoowner... 9 Chapter5 TheflagState Chapter6 ThecoastalState Chapter 7 The salvors 7.1 Professionalsalvors The International Convention on Salvage, Chapter8 Theliabilityunderwriter Part II Compensation for oil pollution damage Chapter9 Outline Chapter 10 The 1969 Civil Liability Convention and the 1971 Fund Convention Chapter 11 The 1992 Civil Liability Convention and the 1992 Fund Convention Chapter12 Recoveryofcompensation Chapter 13 Guidelines for facilitation of response to anoilpollutionincident References Appendices Appendix 1 Chapter IX of SOLAS 1974 and Assembly resolution A.741(18) Appendix 2 Protocol I of MARPOL 73/78 and Assembly resolution A.851(20) Appendix 3 Lloyd s Standard Form of Salvage Agreement, v

11 Contents Appendix4 InternationalGroupofP&IClubs Appendix 5 Extracts from IOPC Funds ClaimsManual(5thedition) Appendix 6 Resolution A.869(20): Guidelines for facilitation of response to an oil pollution incident pursuant to article 7 and annex of the International Convention on Oil Pollution Preparedness, Response and Co-operation, vi

12 Abbreviations The following explanations of abbreviated expressions used in this Manual may be helpful to the user: 1969 Civil Liability Convention International Convention on Civil Liability for Oil Pollution Damage, Civil Liability Convention International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended by the Protocol of 1992 relating thereto CLC Certificate Certificate of Insurance or Other Financial Security in respect of Civil Liability for Oil Pollution Damage CRISTAL Contract regarding a Supplement to Tanker Liability for Oil Pollution Funds International Oil Pollution Compensation Funds 1971 Fund Convention InternationalConventionontheEstablishmentof an International Fund for Compensation for Oil Pollution Damage, Fund Convention InternationalConventionontheEstablishmentof an International Fund for Compensation for Oil Pollution Damage, 1971, as amended by the Protocol of 1992 relating thereto 1969 Intervention Convention International Convention relating to Intervention on the High Seas in Cases of Oil Pollution Casualties, Intervention Protocol Protocol relating to Intervention on the High Seas in Cases of Pollution by Substances Other Than Oil, 1973 IOPC Funds International Oil Pollution Compensation Funds ISM Code International Management Code for the Safe Operation of Ships and for Pollution Prevention ISU International Salvage Union ITOPF LL 1966 LLMC 1976 LOF 1995 International Tanker Owners Pollution Federation Limited InternationalConventiononLoadLines,1966 Convention on Limitation of Liability for Maritime Claims, 1976 Lloyd s Standard Form of Salvage Agreement vii

13 Abbreviations MARPOL 73/78 International Convention for the Prevention of Pollution from Ships, 1973, as amended by the Protocol of 1978 relating thereto OPRC 1990 International Convention on Oil Pollution Preparedness, Response and Co-operation, Salvage Convention Convention for the Unification of Certain Rules of Law relating to Assistance and Salvage at Sea, Salvage Convention International Convention on Salvage, 1989 SDR Special Drawing Right. The US dollar equivalents of SDRs vary according to the current exchange rates. The rate for the present publication is 1 SDR = US$ (31 December 1997). SOLAS 1974 International Convention for the Safety of Life at Sea, SOLAS Protocol Protocol of 1978 relating to SOLAS 1974 STCW 1978 TOVALOP UNCLOS International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978 Tanker Owners Voluntary Agreement concerning Liability for Oil Pollution United Nations Convention on the Law of the Sea, 1982 viii

14 Introduction This section of the Manual on Oil Pollution is intended to provide the reader, in particular on-scene commanders, lead agencies and others involved in the management of oil pollution response, with an appreciation of the various interests involved in an oil pollution emergency and its aftermath, as well as a general review of the international legal regimes governing limitation of liability and compensation for oil pollution damage. This section is not intended to provide an authorized or definitive commentary on the legal relationships between the various entities involved in an oil poll-ution emergency or an interpretation of relevant international conventions. The reference section includes sources of more comprehensive information on these subjects, and the reader is encouraged to make use of them if more detailed information is required. 1

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16 Part I Roles and functions of entities which could be involved in an oil pollution emergency and its aftermath Chapter 1 The shipowner 1.1 General rights and obligations There may be a great diversity of ownership or possessory interests in a ship. The main ones which a coastal State is likely to encounter in a marine pollution emergency are:the shipowner, bareboat charterer, and manager or operator. The role of the shipowner is mainly discussed here. The phrase shipowner is used here, although of course in some cases a ship may be owned by more than one entity in equal or unequal shares. In such cases, there is usually an agreement between the different owners that one of them will take operational decisions on behalf of all of them, and joint ownership only becomes of particular interest when recovery of damages is sought Unless there is a bareboat charterer or manager of the ship, the shipowner is normally the entity responsible for the operation of the ship, and the master will be the agent of the shipowner for that purpose, at least until direct contact is established between the coastal State and the shipowner. For this reason the role of the master is discussed separately in chapter The interests in the ship are protected under international law to a considerable extent. Not only is there freedom of navigation on the high seas,* but ships are entitled to the right of innocent passage through the territorial sea. These rights of the ship are, however, affected where a marine pollution emergency occurs which threatens or actually causes damage to the coastal State or its territorial sea, so that the coastal State may, in accordance with international law and its own internal law, take steps which interfere with those freedoms. This is dealt with further in chapter 6 under the rights of the coastal State The first concern of the shipowner in a marine pollution emergency will be to see that the ship and all the life thereon is preserved, and that as much as possible of the cargo, which he has contractually undertaken to deliver to the destination named in the bill of lading, is so delivered. He is therefore concerned to protect both his proprietary interest in the ship and his contractual obligations concerning the cargo. If the ship is aground, he * In this context, high seas means beyond territorial waters. 3

17 Manual on Oil Pollution V: Administrative aspects will want to arrange for it to resume its voyage as soon as practicable, and this will rightly be the primary focus of his immediate concern, rather than the effect upon the sea or coast of polluting substances which may have escaped or may be threatening to escape. Because he may be liable to pay compensation for pollution caused, the shipowner can be expected, however, either through the master or directly from his office, to liaise with all others who are directly concerned with the position of the ship in the emergency In addition to the general rights and obligations concerning the operation of the ship, the shipowner may have certain specific obligations concerning:(a) a document to be developed and carried on board for oil pollution preparedness and response; (b) notification of the marine pollution emergency to the nearest coastal State; (c) pollution response and clean-up; and (d) compensation. 1.2 Shipboard Oil Pollution Emergency Plan One of the salient documents required to be developed and carried on board for oil pollution preparedness and response is a Shipboard Oil Pollution Emergency Plan. Since 4 April 1993, every oil tanker of 150 gross tonnage and above and every ship other than a tanker of 400 gross tonnage and above have had to carry on board such a Plan approved by the flag State. In the case of ships built before 4 April 1993, this requirement shall apply from 4 April 1995 (regulation 26 of Annex I of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78),* and article 3 of the International Convention on Oil Pollution Preparedness, Response and Co-operation, 1990 (OPRC 1990), { which entered into force on 13 May 1995). Such a Plan shall be in accordance with the Guidelines for the development of Shipboard Oil Pollution Emergency Plans developed by IMO. { The Plan shall consist of: (a) the procedure to be followed by the master or other persons to report an oil pollution incident; (b) the list of authorities or persons to be contacted in the event of an oil pollution incident; and (c) a detailed description of the action to be taken immediately by persons on board to reduce or control the discharge of oil following the incident The International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code), } which will be made mandatory on 1 July 1998 by amendments to the International Conven- * Refer to IMO sales publication number IMO-520E. { Refer to IMO sales publication number IMO-550E. { Refer to IMO sales publication number IMO-586E. } Refer to IMO sales publications IMO-186E and IMO-117E. 4

18 Part I, chapter 1 tion for the Safety of Life at Sea, 1974 (SOLAS 1974),* also requires emergency preparedness, i.e., the Company should establish procedures to identify, describe and respond to potential emergency shipboard situations. In the ISM Code, the Company means the owner of the ship or any other organization or person such as the manager, or the bareboat charterer, who has assumed the responsibility for operation of the ship from the shipowner and who, on assuming such responsibility, has agreed to take over all duties and responsibility imposed by the Code (regulation IX/1 of SOLAS 1974 and paragraph of the ISM Code). Please refer to more detailed information in paragraph 5.6 of this Manual. Also refer to the new chapter IX of SOLAS 1974 and the ISM Code as set out in appendix Notification The shipowner may be obliged by an applicable regulation (under the law of the flag State or of the coastal State, either or both of which may derive from international conventions to which these States are party) to notify the nearest coastal State of the marine pollution emergency which has arisen. Normally this obligation will fall upon the master of the ship, but if the ship has been abandoned, or if the master s report is incomplete, then the obligation on the shipowner to make a report may arise. The obligation to report, which Parties to MARPOL 73/78 undertake to implement in their internal law for ships registered in their territory, is contained in Protocol I of that Convention. The text of Protocol I of MARPOL 73/78, together with Assembly resolution A.648(16), is set out for convenience in appendix 2. Article 4 of OPRC 1990 is to similar effect. 1.4 Pollution response and clean-up The obligation of a shipowner to take pollution response and cleanup measures depends upon the law of the State where the pollution occurs. The shipowner s obligation to pay for such measures may be governed by the 1969 or 1992 International Convention on Civil Liability for Oil Pollution Damage (1969 or 1992 Civil Liability Convention), if the ship is registered in a State which is party to those Conventions. These Conventions require a shipowner to maintain insurance to cover his liability for pollution and other third-party liabilities under the Conventions. The International Convention on Salvage, 1989 (1989 Salvage Convention), { may also apply if a salvage contract is entered into. The 1989 Salvage Convention entered into force on 14 July Under most insurance contracts, and indeed under the general principles of many systems of insurance law, even though he is insured, the shipowner must act as a prudent person without insurance, and therefore he must act within his capabilities so as to minimize his * Refer to IMO sales publication number IMO-110E. { Refer to IMO sales publication number IMO-450E. 5

19 Manual on Oil Pollution V: Administrative aspects potential liabilities. The clause in the insurance contract which enshrines this principle is often called the sue and labour clause. The principle is simple:a shipowner should not be allowed to so act that the liabilities which the insurer has underwritten will be increased if an alternative course of action is open to him. Therefore coastal States should find the shipowner very co-operative in any efforts the coastal State wants to make which would have the effect of reducing the shipowner s ultimate potential liability, although in the past there have been some cases where this has not been so. Often, disagreement arises when there is a conflict between the shipowner s desire to minimize liability and the coastal State s desired action. In any event, whatever response and clean-up assistance the shipowner is able to muster, he will normally have behind him the resources, the technical advice and services of his liability underwriter (usually a P & I Club). In practice, the liability underwriter is usually very closely involved, and so this is further discussed in chapter Under article 8(2) of the 1989 Salvage Convention, which entered into force on 14 July 1996, the owner is under a duty to the salvor to cooperate fully with him during the course of the salvage operations and, in so doing, to exercise due care to prevent or minimize damage to the environment These contractual obligations, if they apply, are owed to different people the first, to the liability underwriter, and the second, to the salvor. None are owed to the coastal State, although the coastal State may well become involved in the owner s implementation of them The shipowner also incurs legal obligations to the coastal State whose waters are being polluted. These legal obligations can conflict with the shipowner s contractual obligations. In these cases, it is very important to clarify who will pay the costs involved for any response action required by the coastal States. Chapter 2 The ship operator 2.1 The ship may be owned by one entity, such as a bank or other financial institution, and leased or bareboat chartered to another entity. This is a common method of financing, whereby the shipping company which wants to use the ship has the possession of it but the bare legal ownership resides in the institution which puts up the money for its purchase. The relationship between the shipowner and the lessee or bareboat charterer is governed by a contract of lease or bareboat charter for our purposes there is no significant difference, so we shall refer to the bareboat charterer below. In this connection, it should be noted that the bareboat charterer will be required to comply with the requirements of the ISM Code (see paragraphs and 5.6). 2.2 It is the bareboat charterer who has the possession of the whole ship, and it is therefore he who is responsible for the commercial and operational management of the ship, and not the shipowner. Thus, where this type of arrangement is in operation, the master will not be the agent of 6

20 Part I, chapters 2, 3 the shipowner but the agent of the bareboat charterer, and the latter will fulfill all of the roles and functions which were discussed above under paragraph 1.1, so that for most purposes one can read bareboat charterer for shipowner. 2.3 The notable exception concerns the liability of the shipowner under the 1969 and 1992 Civil Liability Conventions, which cannot be directly assumed by any other person. 2.4 In any event, the bareboat charterer would wish to avail himself of any right of limitation which he may have under the relevant law, such as the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC 1976)* (see paragraph 9.2). 2.5 It should be noted that the 1989 Salvage Convention places an obligation on the owner to co-operate with a salvor and in so doing to exercise due care to prevent or minimize damage to the environment. The 1989 Salvage Convention does not define owner, and so it is left to each State Party to define it in its own legislation. Such legislation may or may not provide that a bareboat charterer shall be in the same position as an owner in this respect. 2.6 Another common arrangement which may complicate the picture still further on the side of the interests in the ship is the appointment of ship managers or operators who run the day-to-day non-commercial side of the ship s operation. Managers would normally be responsible for providing the ship with officers and crew and ensuring that the ship is maintained and insured. Operators have a similar, but lesser, role. In each case the shipowner (or bareboat charterer, as the case may be) retains commercial control of the ship and takes the commercial risks and benefits of its operation, deciding whether to trade the ship directly for his own benefit or to charter the ship out. Where there is a manager or operator (who employs the master), the master will still be the agent of the shipowner or bareboat charterer (as the case may be) for purposes of dealing with the operation of the ship and for salvage purposes. However, the master will additionally represent his employer, and his act or neglect may make his employer liable for compensation. Managers and operators usually enjoy the same rights to limit their liability as shipowners and bareboat charterers. Chapter 3 The master 3.1 The master is the officer aboard ship entrusted with the prosecution of the entire maritime adventure. He is, therefore, responsible for the safety of the ship, the cargo and all personnel aboard, and he will take such action as he can to achieve this as soon as the incident giving rise to * Refer to IMO sales publication number IMO-444E. 7

21 Manual on Oil Pollution V: Administrative aspects the emergency occurs. He will give priority to saving life. His responsibility and authority are further described in the ISM Code (see paragraph 5.6 of this manual and the ISM Code, the latter of which appears in appendix 1). 3.2 If the ship is in distress, the master will be responsible to see that a distress signal is sent, and he may, under regulation V/10(b) of SOLAS 1974, requisition any ship with which he is in contact and which he considers best able to render him assistance, whereupon the master of the requisitioned ship must proceed with all speed to the assistance of the distressed ship. In addition, under article 11 of the Convention for the Unification of Certain Rules of Law relating to Assistance and Salvage at Sea, 1910 (1910 Salvage Convention), every master is bound to render assistance to any person found in danger of being lost at sea, so far as he can do so without serious danger to his ship and persons thereon. Article 10 of the 1989 Salvage Convention is to similar effect. 3.3 The master is usually the person responsible for making notification to the nearest coastal State of the incident giving rise to the marine pollution emergency (see paragraph and appendix 2 for details). 3.4 The master is in most, if not all, systems of law the agent of the shipowner in the navigation and shipboard management of the ship. Where the cargo is in danger, he is usually also deemed the agent of the cargo owner insofar as any action to save the cargo is taken. Coastal States may therefore deal with the master in confidence that his word will bind the shipowner and cargo owner insofar as the security of ship and cargo are concerned when their owners are themselves not in contact with the coastal State. 3.5 The agency of the master is the legal basis for the law of salvage. The role of salvors is discussed in chapter 7, but here it may be noted that the master is therefore able to reach agreement with a salvor himself. The master will send out distress calls as appropriate after the incident occurs, and he will call specifically for tugs if that is what he needs. Even if he does not call specifically for tugs, any salvage tug in the vicinity hearing a distress message is likely to try to contact the ship and may proceed in its direction on speculation. The salvage tug will attempt to secure an agreement for its services with the master. 3.6 Under article 6(2) of the 1989 Salvage Convention, the authority of the master to conclude a contract for salvage operations with a salvor on behalf of the owners of the ship and the cargo is given effect in the laws of all States Parties thereto. There is also a new dimension to his legal responsibilities:under article 8(2), the master is under a duty to the salvor to co-operate fully with him during the course of the salvage operations and, in so doing, to exercise care to prevent or minimize damage to the environment. 3.7 Now that telecommunications are sophisticated, in a marine pollution emergency, a master will often attempt to be in direct contact with his shipowner s office once the emergency has arisen, so that the 8

22 Part I, chapter 4 shoreside management may become involved in the decisions which are apparently being made by the master alone. However, it is worth noting that, whether the master is in contact with his shoreside office or not, his decisions on the protection of the marine environment should not be unduly influenced by instructions given by his shoreside office, taking into account that the protection of the marine environment must be the master s prime concern in all situations which arise and that economic and other pressures on the master should not at any time interfere with the decisions he must take in that regard. 3.8 It was for this reason, therefore, that the IMO Assembly adopted resolution A.443(XI), in November 1979, on decisions of the shipmaster with regard to maritime safety and marine environment protection after the Amoco Cadiz incident in The resolution invites Governments to take necessary steps to safeguard the master in the proper discharge of his responsibilities in regard to maritime safety and the protection of the marine environment by ensuring that: (a) [t]he shipmaster is not constrained by the shipowner, charterer or any other person from taking in this respect any decision which, in the professional judgement of the shipmaster, is necessary; and, (b) [t]he shipmaster is protected by appropriate provisions, including the right of appeal, contained in, inter alia, national legislation, collective agreements or contracts of employment, from unjustifiable dismissal or other unjustifiable action by the shipowner, charterer or any other person as a consequence of the proper exercise of his professional judgement. 3.9 It should also be noted that when the marine pollution emergency has arisen, the master s considerable responsibility may very well lie heavily upon him and the pressure on him may be very great. He may very well feel personally responsible for what has happened. In many cases, an inquiry may follow which could result in his licence being suspended or revoked. There may be considerable danger in staying aboard ship. It is important that anyone dealing with the master during or in the immediate aftermath of the marine pollution emergency is aware of these possibilities and acts accordingly. Chapter 4 The cargo owner 4.1 The owner of the cargo at the time of the marine pollution emergency will not necessarily be either the shipper or the consignee, for the ownership may have changed hands once or more than once since the ship sailed. Initially, therefore, it may not be easy to establish who owns the cargo, although the chain of enquiry will start with the shipper named in the bill of lading, a copy of which will be retained on board by the master. Bulk cargoes tend to be owned by a single entity, or perhaps by a few different entities. Packaged cargoes, on the other hand, are more likely to be owned by a greater variety of different entities. 9

23 Manual on Oil Pollution V: Administrative aspects 4.2 While cargo interests collectively are the ones who contribute to the two international funds outlined in part II, chapters 10 and 11, the individual cargo owner would not normally be liable to compensate any person suffering pollution damage, and certainly there is no international legal regime which makes provision for the liability of the cargo owner for such damage. However, that does not mean that the identity of the cargo owner will be irrelevant to the question of compensation. 4.3 Once the cargo owner becomes aware of the marine pollution emergency, his interest will lie mainly in ensuring that as much as possible of his cargo is actually delivered to the port of destination. This is the task which has been delegated to the shipowner, and, under the bill of lading or other contract governing the carriage of the cargo by sea (such as a charter-party), this responsibility will remain with the shipowner throughout the marine pollution emergency unless and until the shipowner abandons the voyage. For this reason the cargo owner does not normally feature much in the dramatis personae of a marine pollution emergency. 4.4 The cargo owner s interest extends also to a liability to contribute in general average and salvage:in respect of both of these liabilities, he will normally be insured by the cargo underwriter. Since the cargo owner (or the cargo underwriter, using the right of subrogation) will look primarily to the shipowner for compensation for any loss or contamination of the cargo, it can be readily appreciated that the interests of the shipowner and the cargo owner are somewhat in tension. 4.5 The cargo owner s knowledge of the nature of the cargo will vary enormously according to the type of entity concerned. If the cargo owner is an end-user of the type of cargo involved, he may very well have technical people on his staff who are familiar with the behavioural characteristics of the cargo, which is almost invariably the source of the marine pollution emergency (the main exception being the escape of marine fuel oil or marine diesel used as bunkers). Therefore the cargo owner may be someone to whom the coastal State or even the shipowner may turn for advice about the cargo and how to handle it in the emergency. If the cargo owner is a trading company which does not use the cargo itself, such technical expertise is less likely to be available from that source and it may have to be sought from the manufacturer of the cargo or from an industry body. One particular aspect where cargo owners have become involved in the marine pollution emergency concerns the lightering of the stricken ship. It is not uncommon for the cargo owner particularly an end-user to assist in the identification of a suitable lightering ship to be hired for the job. 4.6 Under article 8(2) of the 1989 Salvage Convention, if a salvage contract to which that Convention applies is entered into, the owner of any property in danger including the cargo owner and the owner of freight at 10

24 Part I, chapter 5 risk is under a duty to the salvor to co-operate fully with him during the course of the salvage operations and, in so doing, to exercise care to prevent or minimize damage to the environment. Chapter 5 The flag State 5.1 The major effects of the flag State s role are felt to take place before the marine pollution emergency, for it is the flag State which is responsible for:enacting and enforcing all design and equipment standards, all safety standards, and all crew certification and training; issuing certificates provided for by international conventions; setting minimum staffing levels and standards relating to the prevention of collisions and the prevention of pollution; and exercising jurisdiction and control over the ship while it is on the high seas. However, there are obligations on a flag State after a marine casualty has occurred. 5.2 Under article 12 of MARPOL 73/78, the flag State is obliged to discover the facts of a casualty in which one of its ships has been involved if the casualty has produced a major deleterious effect upon the marine environment, so that it can determine whether any change in the regulatory regime is necessary. In addition, most States with sizeable fleets have made provision for holding a marine inquiry when there is serious loss of life, and, under regulation I/21 of SOLAS 1974, a flag State must hold such an inquiry when it judges that such an investigation may assist in determining what changes in the SOLAS 1974 regulations might be desirable. Apart from SOLAS 1974 as modified by the Protocol of 1978 relating thereto (1978 SOLAS Protocol), the International Convention on Load Lines, 1966 (LL 1966),* and MARPOL 73/78, no other international conventions currently in force make extensive provisions for the holding of marine inquiries. 5.3 Under article 94(7) of the United Nations Convention on the Law of the Sea, 1982 (UNCLOS), which entered into force on 16 November 1994, the flag State is under a more extensive duty to hold a marine inquiry, including where there has been serious damage to ships or installations of another State or to the marine environment, and the other State involved shall co-operate in such an inquiry. 5.4 Under article 5(3) of MARPOL 73/78, the flag State is entitled to receive notification if any other State Party denies the ship entry to its ports or offshore terminals or takes any action against the ship for the reason that it does not comply with MARPOL 73/ Under article 6 of MARPOL 73/78, the flag State must co-operate with other Parties in the detection of violations and the enforcement of the provisions of the Convention; if presented with evidence of a violation, the flag State must investigate the matter and, if satisfied that there is sufficient available evidence for proceedings to be brought for a violation, it * Refer to IMO sales publication number IMO-710E. 11

25 Manual on Oil Pollution V: Administrative aspects must instigate such proceedings. Similar, but less detailed, provisions exist in regulation I/19 of SOLAS 1974 as modified by the 1978 SOLAS Protocol, article 21 of LL 1966 and article X of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978 (STCW 1978). Where a coastal State presents a flag State with evidence of a violation, it can always contact the flag State to see what is the outcome of the investigation which the flag State conducts, and to offer assistance in every way with the presentation of oral or written evidence at any subsequent legal proceedings which the flag State may bring. 5.6 SOLAS 1974 was amended in May 1994 at a SOLAS Conference to add a new chapter IX to the Convention which is designed to make mandatory the ISM Code, which was adopted by IMO in November 1993 by Assembly resolution A.741(18). The ISM Code takes into account that the most important means of preventing maritime casualties and pollution of the sea from ships is to design, construct, equip and maintain ships and to operate them with properly trained crews in compliance with international conventions and standards relating to maritime safety and pollution prevention. The Code provides an international standard for the safe management and operation of ships and for pollution prevention (see appendix 1). The amendments will enter into force under tacit acceptance on 1 July 1998 (unless rejected in the meantime by one third of Contracting Governments or by Contracting Governments whose combined merchant fleets make up at least 50% of world tonnage). 5.7 The new chapter IX of SOLAS 1974 applies to ships, regardless of the date of construction, as follows: (1) passenger ships including passenger high-speed craft, not later than 1 July 1998; (2) oil tankers, chemical tankers, gas carriers, bulk carriers and cargo high-speed craft of 500 gross tonnage and upwards, not later than 1 July 1998; and (3) other cargo ships and mobile offshore drilling units of 500 gross tonnage and upwards, not later than 1 July Chapter 6 The coastal State 6.1 Within OPRC 1990, salient features are stipulated in article 6 (National and regional systems for preparedness and response) and article 7 (International co-operation in pollution response). Specifically, under article 6, each Party shall: (a) establish a national system for responding promptly and effectively to oil pollution incidents which has, as a minimum, developed a national contingency plan and designated national authorities and operational focal points responsible for oil pollution preparedness and response, reporting and handling requests for assistance; 12

26 Part I, chapter 6 (b) within its capabilities either individually or through bilateral or multilateral co-operation and, as appropriate, in co-operation with the oil and shipping industries and other relevant entities, establish a minimum level of pre-positioned oil spill response equipment, proportionate to the risk involved, and programmes for its use; and (c) commit to co-operate and render assistance to Parties that request assistance to deal with oil pollution incidents, subject to capability and availability of relevant resources. 6.2 Whether a coastal State is a Party to OPRC 1990 or not, in general, the different roles of the coastal State s various competent authorities will be defined in its constitution and in its marine pollution contingency plan. These plans vary from State to State, and the considerations which should be taken into account in preparing them should include those contained in this document. Elaboration of the process of drawing up such a plan is covered by other documents, such as section II of the Manual on Oil Pollution, Contingency Planning.* Therefore, here the roles and functions of the various competent authorities of a coastal State will be discussed as if there was but one national authority to deal with the marine pollution emergency, and this will simply be referred to as the coastal State. 6.3 When faced with a marine pollution emergency, the coastal State must look both to its international rights and duties and to its national position. Insofar as the former are concerned, every State has a general duty under customary international law to warn other States of a marine pollution threat of which it becomes aware and which is likely to affect them, and this is reinforced by article 8(3) of MARPOL 73/78, which requires States to notify the flag State and any other State which may be affected. Article 5 of OPRC 1990 is to similar effect. Principle 21 of the 1972 Declaration of the United Nations Conference on the Human Environment went so far as to say that States have, in accordance with the Charter of the United Nations and the principles of international law... the responsibility to ensure that activities within their jurisdiction and control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction. (Articles 194(2) and 198 of UNCLOS contain a specific obligation to notify other States which the coastal State deems likely to be affected.) Therefore, once a marine pollution emergency is actually within the jurisdiction and control of a coastal State, the coastal State must consider the likely effect on other States and take the appropriate action, which, at the bare minimum, is to notify those likely to be affected and keep them informed. * Refer to IMO sales publication number IMO-560E. 13

27 Manual on Oil Pollution V: Administrative aspects 6.4 Such general obligations may have been given greater precision in an inter-governmental regional agreement which commits the groups of States who are Party thereto to co-operate in responding to major incidents of marine pollution which are likely to affect more than one State. If a coastal State is a Party to one of these, then its provisions should be implemented. Under such an agreement, a coastal State is usually under a duty to report marine pollution incidents to neighbouring States which may be affected, to take the necessary response actions, and to monitor the situation. Other Parties to the agreement are usually obliged to use their best endeavours to respond to requests for assistance which may be made by the coastal State affected and to co-operate in pollution response action. Any regional mutual aid centre which may have been established pursuant to such a regional agreement will be able to assist States Parties in the task of implementing such an agreement in the actual marine pollution emergency, primarily by providing technical advice and liaising with other sources of assistance. There may also be a list of equipment stockpiles established by oil companies or groups of countries which a coastal State may be able to use. 6.5 If the coastal State chooses to focus its attention on its own response to the marine pollution emergency, then one question which may arise is the extent to which the coastal State may take action against the wishes of the master or other parties who have interests in the ship or cargo. Ideally, the coastal State will have considered the international law position on intervention in conjunction with the preparation of its contingency plan before the marine pollution emergency arises, and will have enacted legislation or made other satisfactory provision for the taking of appropriate steps when an emergency arises. Some coastal States have chosen to establish marine pollution emergency funds which provide for some independence in these decisions. 6.6 A detailed analysis of the international law on the right to intervene is outside the scope of this document, but mention should be made of the International Convention relating to Intervention on the High Seas in Cases of Oil Pollution Casualties, 1969 (1969 Intervention Convention),* which gives greater precision to rights existing under customary international law. The 1969 Intervention Convention deals only with rights to intervene on the high seas, and does not cover the position in territorial waters (the position in internal waters being a matter purely for the domestic law of the coastal State). Under customary international law, however, the position in territorial waters is similar to that adopted in the 1969 Intervention Convention. * Refer to IMO sales publication number IMO-402E. Also, a relevant protocol extended the coverage of the Convention to include substances other than oil (Protocol relating to Intervention on the High seas in Cases of Pollution by Substances Other Than Oil, 1973 (1973 Intervention Protocol)). Description of this Protocol is beyond the scope of the present publication. 14

28 Part I, chapter The 1969 Intervention Convention permits the coastal State to intervene on the high seas against the wishes of the owner of the ship and the cargo to the extent necessary to prevent, mitigate or eliminate grave and imminent danger to the coastline or related interests from pollution or the threat of pollution of the sea, following upon a maritime casualty, which may reasonably be expected to result in major harmful consequences. The measures taken must be proportionate to the damage actual or threatened, and if they exceed this the coastal State must pay compensation to those who have suffered thereby. Also, the right to intervene must be preceded by due consultation with States or persons whose interests are affected, except in cases of extreme urgency. 6.8 The related interests in protection of which intervention is possible include tourism, fishing and other marine resources and wildlife, so that intervention under this Convention is possible on purely environmental grounds. IMO maintains a list of experts under the 1969 Intervention Convention who may be called upon for consultation in such an emergency. 6.9 One of the possible options for intervention which a coastal State has is to require salvage services to be accepted or provided, or even to undertake them itself. There are certain practical problems in implementing such an imposed requirement where the responsible Parties are unwilling to take action. However, articles 5 and 9 of the 1989 Salvage Convention recognize that States may wish to control or provide such services themselves by providing that nothing in the Convention shall affect provisions which the coastal State may have made in this respect (although salvors carrying out such services under the control of a public authority are still entitled to avail themselves of the Convention s rights and remedies) In fact it is relatively unusual that the coastal State will need to exercise its rights to intervene or to control salvage operations. The coastal State has an absolute right in international law to deny a ship entry to any of its ports or offshore installations, and very often this is the only thing the coastal State will want to do that causes disagreement. In most cases, co-operation between the master and the coastal State achieves all that is necessary, and the coastal State s task of co-ordinating and arranging all the pollution response and clean-up actions under its contingency plan is not hindered by the ship or cargo interests Under article 11 of the 1989 Salvage Convention, Parties to the Convention have to take into account the need for co-operation between salvors and others when regulating or deciding upon salvage matters, such as admittance into ports of ships in distress or the provision of facilities to salvors, so that operations to save life or property in danger, as well as preventing damage to the environment, are taken into account After a marine pollution emergency is over, a marine inquiry is often held. Co-operation between flag States in the holding of marine inquiries has already been mentioned in chapter 5. 15

29 Manual on Oil Pollution V: Administrative aspects 6.13 One administrative aspect of port State which is of interest to a coastal State is worthy of discussion in this chapter. A number of IMO conventions contain provisions for port State control inspections, but previously these have been limited primarily to certification and the physical condition of the ship and its equipment. However, new regulation 8A of Annex I of MARPOL 73/78, which entered into force on 3 March 1996, makes it possible for ships to be inspected when in the ports of other Parties to MARPOL 73/78 to ensure that crews are able to carry out essential shipboard procedures relating to marine pollution prevention. The procedures for the control of operational requirements relating to the safety of ships and pollution prevention are contained in Assembly resolution A.787(19).* 6.14 Extending port State control to operational requirements is seen as an important way of improving the efficiency with which international safety and anti-pollution treaties are implemented. Chapter 7 The salvors 7.1 Professional salvors The majority of professional salvors are members of the International Salvage Union (ISU). This organization represents some 43 companies based in 32 different countries around the world. The salvage companies have tugs and other salvage equipment at a number of different ports and areas throughout the world and some of the companies have salvage tugs stationed at various strategic locations. Some salvage tugs are being maintained at salvage stations in certain coastal States as a result of arrangements made between their owners and other commercial interests or the authorities in those States. When a salvage company is engaged to assist a marine casualty they will be able to bring specialist expertise to the task which is unique to the marine industry. Their business is not without risks, and frequently the skills and efforts of salvage officers have saved ships and their cargoes from extreme situations. Some companies have the ability to mobilize equipment, either from their own resources or from elsewhere, together with expert personnel at very short notice The number of salvage tugs in operation has significantly decreased in recent years, and those that remain are frequently engaged in ocean towage of rigs, barges, etc., on commercial terms. However, salvage of casualties is still normally undertaken on traditional no cure no pay terms, whereby, if successful, the tugowner/salvage company will earn a reward based upon a number of factors, including the risks from which the property was saved, the time occupied in the services, the dangers to the salvor s property and personnel, the value of the salved property, the skills shown by the salvors and the expenses incurred by them in * Refer to Assembly resolution A.787(19), Procedures for port State control; see IMO sales publication number IMO-650E. 16

30 Part I, chapter 7 rendering the services. The 1910 Salvage Convention enshrines these principles and forms the basis of salvage law of the States Party thereto. When the 1989 Salvage Convention entered into force on 14 July 1996, it replaced the 1910 Salvage Convention, thereby introducing substantial changes to the salvage industry On a traditional no cure no pay basis, if no property is saved, the salvor receives no reward for his efforts. This basis of working obviously carries with it considerable financial risk, and a salvor therefore expects to be rewarded far more generously than on normal commercial terms. Indeed, the 1989 Salvage Convention stipulates that the reward shall be fixed with a view to encouraging salvage operations, taking into account the following criteria without regard to the order in which they are presented... (see paragraphs 1(a) to (j) of article 13 of the 1989 Salvage Convention). Statistical data collected and published by ISU have shown that the revenue from over 2,000 salvage services carried out between 1978 and 1992 under no cure no pay terms has averaged just over 6% of the property values salved. To achieve any such average there are obviously awards at either end of the scale; however, on a traditional no cure no pay basis, the award cannot exceed the value of the property salved Salvage services rendered under other forms of commercial contract, i.e., Daily Rate or Lump Sum, do not call for elaboration here. Professional salvors will not normally work on such a basis for normal salvage services. If a non-salvage commercial contract is utilized, there will have been negotiation between the parties, who may include the coastal State. No special limiting considerations are therefore relevant to a marine pollution emergency in such a case. Salvage services rendered under no cure no pay terms do, however, give rise to important considerations for the handling of a marine pollution emergency The contract that salvors will normally offer to the master and/or owners of a ship involved in a marine casualty will be the current version of Lloyd s Standard Form of Salvage Agreement (LOF 1995). This form, reproduced in appendix 3, was issued by Lloyd s following the enactment of the 1989 Salvage Convention into English law on 1 January The services to be provided to the casualty are set out in clause 1(a) of LOF 1995, namely: The Contractor (salvor) shall use his best endeavours:(i) to salve the [ship to be named] and/or her cargo freight bunkers stores and any other property thereon and take them to [place to be named] or to such other place as may hereafter be agreed either place to be deemed a place of safety or if no such place is named or agreed to a place of safety and (ii) while performing the salvage services to prevent or minimize damage to the environment. The Agreement is governed under clause 1(g) by English law and provides for arbitration in London before one of the panel of Lloyd s salvage arbitrators, who are all lawyers experienced in marine salvage claims. 17

31 Manual on Oil Pollution V: Administrative aspects LOF 1995 extends an obligation upon the Contractor originally contained in the 1980 edition of Lloyd s Form, which was to prevent the escape of oil from the ship and/or her cargo bunkers and stores. For the first time the Contractor is bound to prevent or minimize damage to the environment. The 1989 Salvage Convention defines damage to the environment as substantial physical damage to human health or to marine life or resources in coastal or inland waters or areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major incidents (see article 1(d) of the 1989 Salvage Convention). In reality, salvors have always made considerable efforts during any salvage operations to avoid pollution and to co-operate with national and/or local authorities It is important to recall that a salvage agreement, be it LOF 1995 or some other form of agreement, is normally entered into between the salvage company and the master of the ship involved in a casualty as agent for the owners of the ship, cargo, bunkers and stores. The coastal State is not a party, and usually is not involved in the negotiations. Salvage is a voluntary arrangement and cannot be imposed on unwilling parties. A coastal State wishing to place a ship under a duty to accept salvage services may, in certain cases, do so under its law (see chapter 6), but implementing this, if one or both parties is unwilling, may prove to be difficult On occasions, professional salvors may need to engage the services of other companies to assist them in the provision of salvage services to the casualty. It will be appreciated that no company can expect to have all the ships, other floating plant, equipment and personnel immediately available at the site of a casualty. In such situations the salvage company will sometimes need to sub-contract assistance from other organizations. This may range from the provision of additional tugs or anti-pollution ships through to lightering ships. Some of these units could be entitled to a salvage award in their own right; however, where a professional salvor has been engaged, he can be expected to organize such assistance on terms which will not lead to a proliferation of salvage claims. This may involve utilizing, for example, the ISU Sub-Contract Award Sharing Agreement, or other daily rate or lump sum terms. 7.2 The International Convention on Salvage, One of the main purposes of the Convention is to reflect the interests of environmental protection in the way salvage contracts work. In this regard it should be noted that LOF 1995 now incorporates the 1989 Salvage Convention The Convention applies whenever judicial or arbitration proceedings relating to matters dealt with in the Convention are brought in a State Party (see article 2). It applies to all types of salvage operations except those relating to fixed or floating platforms, mobile offshore drilling units which are actually on location and ships that are entitled to sovereign immunity 18

32 Part I, chapter 7 (unless such immunity is waived). It applies to almost all types of ship and, in particular, it applies to the salvage of ships carrying all types of environmentally hazardous cargo, whether carried in bulk or in packages. It also applies to unladen ships which themselves present a threat of pollution. Because of the wide definition of damage to the environment in article 1, its environmental protection provisions apply not just to damage to flora and fauna, but also to human health, and the cause may be pollution, contamination, fire, explosion or any similar major incident By article 6, the parties to a salvage contract can, if they wish, vary the provisions of the Convention in their contract, but they cannot vary the duties to prevent or minimize damage to the environment which the Convention contains. These duties are, therefore, applicable whenever the Convention applies to a salvage operation, even if the other provisions have been varied by the contract The main obligations of a salvor, which are owed not to the coastal State but to the owners of the ship and property in danger, are contained in article 8(1). The salvor must not only carry out the salvage operations with due care, but in doing this, he must exercise due care to prevent or minimize damage to the environment. In this way, due care to protect the environment becomes a legal duty in all of the salvage operations to which the Convention applies, and it cannot be varied by the contract. In return, article 13(1) grants to the salvor the right to have the skill he has exercised and the efforts he has made in preventing or minimizing damage to the environment taken into account when the reward for successful or partly successful salvage is fixed. Also, the risk of liability he has run (which would include liability for damage to the environment) may also be taken into account However, if, despite his due care, the salvage operations were not successful, or if they were only partly successful, or if the value of the successfully salved ship, cargo and freight at risk was low, it would be possible for the salvor to have spent considerable sums in fulfilling his duty to protect the environment which are not recouped, let alone rewarded. Article 14 deals with this situation and intends to give the salvor an incentive to salve any ship, whatever the value of her hull, cargo and freight at risk and however environmentally dangerous the situation may be. It does this by making provision for the salvor to be awarded special compensation, in certain circumstances. There are two preconditions to the award of this special compensation: (a) the salvor must have carried out salvage operations in respect of a ship which by itself or its cargo threatened damage to the environment, and (b) the amount of any reward he has earned under article 13 must be less than the amount of special compensation assessed under article

33 Manual on Oil Pollution V: Administrative aspects The Convention therefore envisages that, in every case where the ship or cargo threatens damage to the environment, two calculations will be carried out:the reward to be fixed under article 13 and the special compensation to be fixed under article 14. If the reward figure exceeds the figure for special compensation, then in fact only the reward is payable. If the special compensation figure exceeds the reward figure, then the reward is topped up to the level of the special compensation figure (see article 14(4)). The salvor does not get paid twice, but his environmental efforts can lead to the enhancement of the total remuneration he receives from the salvage services he performs The special compensation varies according to the circumstances. If there was a threat of damage to the environment, but in fact the salvor did not by his salvage operations prevent or minimize such damage, then the special compensation figure is equal to his reasonably incurred out-ofpocket expenses plus a fair rate for equipment and personnel reasonably used in the salvage operations (which we shall call below the salvage expenses ). If, on the other hand, his salvage operations did prevent or minimize damage to the environment, then the special compensation figure may be increased up to 30% of the salvage expenses. Where exceptional service has been rendered, the special compensation may be increased still more, but in no case shall the total increase be more than 100% of the expenses incurred by the salvor There is a lot at stake for the salvor under these and related provisions. If he is negligent, both the reward and the special compensation figures may be reduced. If he is not negligent, at worst he may end up merely with his salvage expenses reimbursed if there was a threat to the environment. He must therefore do his job with the care and skill for which the salvage industry is noted before he earns a good remuneration. He must also carefully consider the location of the casualty in relation to the definition of damage to the environment, as, if the casualty is not within or close to coastal or inland waters or areas adjacent thereto, then the special compensation provisions of article 14 may not apply. In this event, the salvor could be back to the traditional no cure no pay scenario. Chapter 8 The liability underwriter 8.1 The third-party liabilities of the shipowner, and of any bareboat charterer, manager or operator of the ship, will generally be covered by mutual insurance associations called Protection and Indemnity Associations which together cover over 90% of the world s ocean-going shipping. These associations are normally referred to as P&I Clubs, the word Club being used to denote their nature as mutual associations of shipowners. Some discussion of the structure of P&I Clubs is relevant here, as this helps to account for the particular character of these organizations, which affects the way they are able to interact with coastal States in a marine pollution emergency. 8.2 Examples of coverage offered by a P&I Club are: 20

34 Part I, chapter 8 (1) personal injury to or illness or loss of life of crew members and passengers, and loss of their effects; (2) one fourth of collision liability; (3) excess collision liability, including payments in excess of the limit of the hull policies and items of claim excluded from policies such as oil pollution, dock damage, wreck removal and loss of life, personal injury and illness; (4) oil pollution liabilities; (5) other claims for damage to property, including damage to other ships and their cargoes without collision, and dock damage; (6) towage contract liabilities; (7) removal of the wreck of an entered ship; and (8) liabilities for loss or damage to cargo and other property on board an entered ship. 8.3 It should be borne in mind that a P&I Club covers only the shipowner s legal liabilities in the sense of damage or compensation which the owner is legally obliged to pay to others, together with certain other losses, costs and expenses which are specified in the terms of the insurance given to shipowners. 8.4 A P&I Club is an association of shipowners and others with similar interests in ships. The association is usually incorporated as a company limited by guarantee, and is governed by a board, appointed by the members. The day-to-day management is often carried out by a separate partnership or management company. The association insures its members against their third-party liabilities on terms specified in the P&I Club s Rules, and it raises the funds to enable it to do so by calling up the necessary sums from its members. After taking a certain measure of the risk itself, a Club will usually arrange reinsurance, first by a pooling arrangement with other P&I Clubs for a certain amount, and then on the open market. The largest P&I Clubs are members of the International Group of P&I Clubs, a list of whose members appears in appendix 4. Except in the case of oil pollution risks, once a claim reaches the limit of reinsurance it is further pooled with other P& I Clubs. Therefore, unique among insurance contracts, P& I Clubs currently offer unlimited cover for all risks except oil pollution risks. The availability of cover for oil pollution risks varies from year to year according to what the reinsurance market will bear. As an example, for the year noon GMT on 20 February 1995 to noon GMT on 20 February 1996, this limit was US$500 million. 8.5 It should, however, be noted that, in practice, the coverage of the maximum amount does not apply except where the shipowner loses his right to limitation of liability. As already mentioned, since the P&I Clubs cover only the legal liabilities of their members, and members are normally entitled to limit their liability under various international conventions or national law, the insurance cover is mostly, in practice, restricted to the limitation amount applicable to the ship. In oil pollution cases, the 21

35 Manual on Oil Pollution V: Administrative aspects insurance cover is normally limited in accordance with the site of the ship, up to a maximum of 14 million Special Drawing Rights (SDRs) (US$18.9 million) pursuant to the 1969 Civil Liability Convention, or 59.7 million SDRs (US$80.6 million) pursuant to the 1992 Civil Liability Convention.* 8.6 Because the insurance offered has always been related to liabilities, P& I Clubs have traditionally had legal expertise amongst their management. In the case of a marine pollution emergency, many legal experts with whom a coastal State would have to deal will not only be qualified lawyers but they will generally have experience in the handling of pollution claims (mainly oil pollution claims) in many parts of the world. By contrast, the officials of the coastal State may be dealing with a marine pollution emergency for the very first time. 8.7 The main job of the liability underwriter in a marine pollution emergency is to handle all claims against their members and to pay the valid ones. Under the terms of the insurance, the underwriter will normally have the right to take over the handling of all claims above a certain amount and, because of this, the underwriter will usually get involved in decisions which affect the eventual size of a claim right from the beginning, even before any formal claim is raised. For this and for other reasons, in a marine pollution emergency, the coastal State may find that very early on the most important person it is dealing with is not the shipowner himself but his liability underwriter. In the text which follows, the liability underwriter is assumed to be a P&I Club, since P&I Clubs account for the vast majority of all shipowners pollution liability insurance world-wide, either directly or by way of reinsurance. 8.8 Where a ship is covered by a Certificate of Insurance or Other Financial Security in respect of Civil Liability for Oil Pollution Damage (CLC Certificate) it should not normally be necessary to arrest a ship, but where a ship has been arrested, for whatever reason, a P&I Club may put up financial security to ensure the release of the ship. This is commonly done by the claimant accepting a letter of undertaking from the P&I Club itself. The shipowner may need help with removing the crew from the ship, or with repatriating them, or the master or other officer may need help with local officials who are holding them against the payment of a possible fine. The P&I Clubs have legal and other representatives in many ports all over the world and, either directly or through them, are able to provide such assistance. 8.9 In an oil pollution case the P&I Clubs have a very close relationship with the International Tanker Owners Pollution Federation Limited (ITOPF). ITOPF will be called in by the shipowner or his P& I Club in almost every case of any size involving oil pollution, so that now it probably has more experience in the practical aspects of response and clean-up, and * The limits of liability indicated throughout this document are based on specific units of account, i.e., Special Drawing Rights (SDRs), the US dollar equivalents of which vary depending upon the current exchange rate. The rate of conversion for the purposes of the present publication is 1 SDR = US$ (31 December 1997). 22

36 Part I, chapter 8 in deciding upon the reasonableness of actions taken, than any other organization. It is, therefore, able to advise the P&I Club and the shipowner on the type and extent of oil pollution which has occurred, what effect it is likely to have under different scenarios, what needs to be done to abate or prevent the effects, and the most efficient way in carrying out this advice. This advice is also available to the coastal State, should it ask for it, and in many cases the coastal State has asked ITOPF to help arrange and co-ordinate the pollution response and clean-up. If the oil pollution affects a State Party to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 or 1992 (1971 or 1992 Fund Convention), there is also close co-operation between the P& I Clubs concerned and the International Oil Pollution Compensation Funds 1971 and 1992 (IOPC Funds) (see chapter 10). This co-operation usually extends to the appointment of joint technical experts, including those from ITOPF The P&I Club will also be involved in the decision concerning a possible lightering of the ship, since the owners of the lightering ship will usually demand a complete indemnity from the shipowner against any liabilities which they may incur as a result of undertaking the lightering, and the shipowner will want to ensure that his P&I Club will be insuring his liability under that indemnity. If the ship is a wreck and needs to be removed, then again the P&I Club will be involved, since wreck removal is one of the risks which they insure When the time comes for claims to be presented to the shipowner or others responsible, except in a small case, it will normally be the P&I Club which is the entity with which the claimant will have to deal in fact, under the 1969 and 1992 Civil Liability Conventions, the P& I Club normally provides the certificate of insurance on which the ship s CLC Certificate is based. In oil pollution cases, the IOPC Funds may also become involved (see chapter 10). Not only will the P&I Club negotiate claims with the claimant (directly or through local lawyers or agents), but, if legal proceedings are commenced, it will usually be the P&I Club which takes the decisions concerning how the claim is defended. In all claims, the P&I Clubs aim to provide a service to their members, and part of that service is to ensure that only provable, valid claims are actually paid. Claims which are unreasonable will normally be vigorously resisted with all the considerable expertise of the Club; equally, well-presented, valid claims are normally paid as soon as possible. Considerations relating to making a claim are discussed further in chapter

37

38 Part II Compensation for oil pollution damage Chapter 9 Outline 9.1 The law relating to compensation for oil pollution damage and the cost of measures to prevent such damage is a highly technical one, and a summary of all of the relevant provisions and principles is beyond the scope of this Manual. However, States and others need to bear in mind the question of cost recovery when deciding what measures to take in a marine pollution emergency. It should be noted that the discussion in this part II concerns, for the most part, liability and compensation regimes derived from international conventions. 9.2 It was the Torrey Canyon incident in 1967 which provided a major stimulus for the development of four international regimes two voluntary agreements and two international conventions through which compensation for clean-up costs and pollution damage was made available following spills of persistent oil from tankers. The two voluntary regimes were the Tanker Owners Voluntary Agreement concerning Liability for Oil Pollution (TOVALOP) and the Contract regarding a Supplement to Tanker Liability for Oil Pollution (CRISTAL). Although originally conceived only as interim arrangements, the two voluntary agreements co-existed for more than 25 years with the two international conventions on liability, which were developed under the auspices of IMO, viz. the 1969 Civil Liability Convention and the 1971 Fund Convention. However, it was decided in November 1995 by the industries concerned that there was no longer a need for TOVALOP and CRISTAL, and the two voluntary agreements were terminated on 20 February Details on these two expired agreements are, therefore, beyond the scope of this Manual. 9.3 The international system of liability and compensation created by the conventions is unique in the field of environmental pollution. Of particular importance is the fact that the regime applies regardless of whether or not the tanker causing the spill was at fault. Claimants can therefore receive compensation promptly, without the need for lengthy and costly litigation. This also ensures that Government authorities can take actions to prevent or minimize pollution damage in the knowledge that, as long as their actions are reasonable for the circumstances, the costs they incur will normally be reimbursed. 9.4 Further details on each of the international conventions on liability and compensation are provided in chapters 10 and

39 Manual on Oil Pollution V: Administrative aspects Chapter 10 The 1969 Civil Liability Convention and the 1971 Fund Convention 10.1 Under the 1969 Civil Liability Convention, the registered owner of a tanker is strictly liable (i.e., liable also in the absence of fault) for pollution damage caused by an escape or discharge of oil from the tanker, including measures to prevent or minimize such damage. This strict liability is, however, subject to certain defences The scope of application of the Conventions has the following main limitations. The Conventions apply only when the oil concerned is persistent, for example, crude oil, fuel oil, heavy diesel oil, lubricating oil, or whale oil. The Conventions are limited to damage caused in the territory of Contracting States and to measures (wherever taken) to prevent or minimize such damage. These Conventions apply only to ships which are actually carrying oil in bulk as cargo, i.e., normally laden tankers. Spills from tankers during ballast voyages are therefore not covered by this Convention, nor are spills of bunker oil from ships other than tankers The shipowner also has certain defences. The shipowner is not liable at all if he can prove the damage (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or (b) was wholly caused by an act or omission done with intent to cause damage by a third party, or (c) was wholly caused by the negligence or other wrongful act of any Government or other authority responsible for the maintenance of lights or other navigational aids in the exercise of that function Unless the pollution damage was caused as a result of the actual fault or privity of the shipowner, the shipowner is entitled to limit his liability under the 1969 Civil Liability Convention to 133 SDRs (US$179) per limitation ton of the tanker or 14 million SDRs (US$18.9 million), whichever is the less. These amounts, when expressed in local currency, vary from time to time in accordance with exchange rates Any tanker carrying more than 2,000 tonnes of persistent oil in bulk as cargo must be insured against the liability arising under the 1969 Civil Liability Convention. This cover is normally provided by a P&I Club or other insurer Additional compensation may be obtainable from the International Oil Pollution Compensation Fund 1971 (1971 Fund) if the affected State is a Party to the 1971 Fund Convention in certain cases when the shipowner is exempt from liability or if the shipowner s limit is exceeded The 1971 Fund was set up pursuant to the 1971 Fund Convention.* The 1971 Fund will compensate those who have suffered oil pollution damage in the territory, including the territorial sea, of a Contracting State to the 1971 Fund Convention. Also, the costs of measures to * Refer to IMO sales publication number IMO-420B. 26

40 Part II, chapter 10 prevent or minimize such damage, wherever taken, are compensable under the 1971 Fund Convention. The compensation is available to the extent that a claimant has been unable to obtain compensation from the shipowner (and his insurer) under the 1969 Civil Liability Convention. This is usually because the damage exceeds the owner s liability under the 1969 Civil Liability Convention, but can also be because the owner is financially incapable of meeting his obligations under that Convention or because the owner can invoke one of the defences under that Convention The exceptions and defences of the 1971 Fund are similar to, but less restricted than, those available to the shipowner under the 1969 Civil Liability Convention. The 1971 Fund will compensate victims in the following cases not covered by the 1969 Civil Liability Convention where the damage: (a) resulted from a natural phenomenon of an exceptional, inevitable and irresistible character; (b) was wholly caused by an act or omission done with intent to cause damage by a third party; or, (c) was wholly caused by the negligence or other wrongful act of any Government or another authority responsible for the maintenance of lights or other navigational aids in the exercise of that function. The maximum amount payable by the 1971 Fund for one incident is 60 million SDRs (US$81.0 million). The amount of compensation available under the 1971 Fund Convention is unrelated to the size of the tanker and is inclusive of any compensation actually paid by the shipowner or his insurer under the 1969 Civil Liability Convention. Where the amount of established claims against the 1971 Fund exceeds the aggregate amount of compensation payable, the amount available shall be distributed in such a manner that the proportion between any established claim and the amount of compensation actually recovered by the claimant under the 1969 Civil Liability Convention and the 1971 Fund Convention is the same for all claimants The owner of a ship registered in or flying the flag of a State Party to the 1971 Fund Convention is indemnified by the 1971 Fund for a part of the total amount of his liability under the 1969 Civil Liability Convention. The maximum indemnification payable by the 1971 Fund to the shipowner is 33 SDRs (US$45) for each ton of the ship s limitation tonnage (gross tonnage minus net tonnage plus capacity of engine-room space); for ships over 83,333 tons, the indemnification is somewhat higher, with a maximum of 5,667,000 SDRs (US$7.6 million) for ships over 105,000 tons The 1971 Fund is administered by a Secretariat which has its headquarters in London, in the building of the International Maritime Organization. The Secretariat also administers the 1992 Fund (see paragraph 11.3). 27

41 Manual on Oil Pollution V: Administrative aspects Chapter 11 The 1992 Civil Liability Convention and the 1992 Fund Convention 11.1 An international conference held in London in 1984 adopted two Protocols amending the 1969 Civil Liability Convention and the 1971 Fund Convention. These Protocols provide significantly higher limits of compensation and a wider scope of application than the Conventions in their original version It became clear in 1990 that these 1984 Protocols would not come into force in the foreseeable future. As a result, an International Conference was held in 1992 under the auspices of IMO which adopted two new Protocols to amend the 1969 Civil Liability Convention and the 1971 Fund Convention. The two Protocols are entitled the Protocol of 1992 to amend the International Convention on Civil Liability for Oil Pollution Damage, 1969, and the Protocol of 1992 to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. The 1992 Protocols have the same substantive provisions as the 1984 Protocols, but have different entryinto-force provisions. The Conventions as amended by the Protocols are known as the 1992 Civil Liability Convention and the 1992 Fund Convention.* 11.3 The 1992 Civil Liability Convention and the 1992 Fund Convention, the latter of which is supplementary to the former, entered into force on 30 May The International Oil Pollution Compensation Fund 1992 (1992 Fund) was established under the 1992 Fund Convention, upon its entry into force, for the purpose of administering the regime of compensation created by the Convention. The 1992 Fund is administered jointly with the 1971 Fund (see paragraph 10.10) The main differences between the new regime (1992 Civil Liability Convention and 1992 Fund Convention) and the old regime (1969 Civil Liability Convention and 1971 Fund Convention) are as follows: (1) special liability limit for owners of small ships and a substantial increase of the limitation amounts:the limits under the 1992 Civil Liability Convention are: (a) for a ship not exceeding 5,000 units of tonnage, 3 million SDRs (US$4.1 million); (b) for a ship with a tonnage between 5,000 and 140,000 units of tonnage, 3 million SDRs plus 420 SDRs (US$567) for each additional unit of tonnage; and (c) for a ship exceeding 140,000 units of tonnage, 59.7 million SDRs (US$80.6 million); * Refer to IMO sales publication number IMO-473E. 28

42 Part II, chapters 11, 12 (2) an increase in the limit of compensation payable by the 1992 Fund to 135 million SDRs (US$182.2 million), including the compensation payable by the shipowner under the 1992 Civil Liability Convention; (3) a simplified procedure for increasing the limitation amounts in the two Conventions; (4) the shipowner is no longer indemnified by the Fund for part of his liability under the 1969 Civil Liability Convention (see paragraph 10.9); (5) extended geographical scope of application of the Conventions beyond the territorial seas to include the exclusive economic zone established under UNCLOS; (6) pollution damage caused by spills of persistent oil from unladen tankers covered, including spills of cargo or bunker oil from both laden and unladen tankers; (7) expenses incurred for preventive measures are recoverable even when no spill of oil occurs, provided that there was a grave and imminent threat of pollution damage (the 1969/1971 Conventions apply only to damage caused or measures taken after an incident has occurred in which oil has escaped or been discharged); and (8) a new definition of pollution damage, retaining the basic wording of the present definition with the addition of a phrase to clarify that, with regard to environmental damage, only costs incurred for reasonable measures to reinstate the contaminated environment are included in the concept of pollution damage The 1992 Fund Convention provided a mechanism for the compulsory denunciation of the 1969 Civil Liability Convention and the 1971 Fund Convention. The requirements for compulsory denunciation were fulfilled on 15 November As a result, the States which had deposited instruments of ratification, acceptance, approval or accession in respect of the 1992 Fund Convention were obliged to deposit instruments of denunciation of the 1969 Civil Liability Convention and the 1971 Fund Convention by 15 May These denunciations will take effect on 15 May From 16 May 1998, it will no longer be possible for a State to belong to both regimes. Chapter 12 Recovery of compensation 12.1 Another main role of the coastal State comes in obtaining compensation for pollution damage. The coastal State needs to keep two aspects of compensation constantly in mind as it decides its response First, the possibility of recovery needs to be balanced against other important factors, such as the expectations of the local population and the need to preserve the environment for its own sake. In general, the coastal State will only be able to recover the costs of response measures which 29

43 Manual on Oil Pollution V: Administrative aspects were considered reasonable in the circumstances. Claims for measures to prevent or minimize pollution damage are assessed on the basis of objective criteria. The fact that a Government or other public body decides to take certain measures does not in itself mean that the measures are reasonable for the purpose of the Conventions. The technical reasonableness is assessed on the basis of the facts available at the time of the decision to take the measures. However, those in charge of the operations should continually reappraise their decisions in the light of developments and further technical advice. The fact that the response measures turned out to be ineffective or the decision was shown to be incorrect with the benefit of hindsight are not reasons in themselves for disallowing a claim for the costs involved. A claim may be rejected, however, if it could have been foreseen that the measures would be ineffective but they were instigated nevertheless, because, for example, it was considered necessary to be seen to be doing something. In addition, if far more resources than necessary for the circumstances are mobilized, the full cost of such mobilization may not be considered reasonable by those responsible for compensation A discussion of what types of damage qualify for compensation under the various national and international legal regimes is beyond the scope of this publication. However, in the case of persistent oil spills covered by the international regimes, compensation is normally available to Governments and public and private bodies for reasonable clean-up costs. Compensation is also available for damage to property and on certain conditions for economic loss caused by the spill. The types of claims which are normally covered are: (1) measures to prevent or minimize pollution e.g., deploying booms to protect fish farms; (2) clean-up operations at sea and on the shore; (3) disposal of recovered oil and oily debris; (4) the cleaning or replacement of damaged property (e.g., fishing nets); (5) economic loss suffered as a result of contamination by those who depend directly on earnings from coastal or sea-related activities (e.g., fishermen) Compensation is also available under the regimes for reasonable costs actually incurred in reinstating damaged environments, but not for environmental damage based on a purely notional basis. Attempts have been made in the past to use theoretical methods for calculating damage to the environment, which in 1980 prompted the Assembly of the 1971 Fund to pass a resolution which states that the assessment of compensation by the 1971 Fund is not to be made on the basis of an abstract quantification of damage calculated in accordance with theoretical models. This policy was codified in the new definition of pollution damage contained in the 1992 Protocols (see paragraph 11.4(8)). 30

44 Part II, chapter In order to obtain compensation, a claimant must be able to show that he has suffered an economic loss as a result of the contamination and the amount of this loss. It is essential that comprehensive records are kept detailing all operations and expenditures resulting from the incident. Daily worksheets should be compiled by supervisory personnel to record the operations in progress, the equipment in use, where and how it is being used, the number of personnel employed, how and where they are deployed and the materials consumed. Recording such information is facilitated by using standard worksheets, which should be designed to suit the particular circumstances of the spill and the response organization in the country concerned Major expenditures are often incurred for the use of aircraft, ships, specialized equipment, heavy machines, trucks and personnel. Some of these resources may be Government-owned whereas others may be the subject of contractual arrangements. Detailed records should be kept of actual time employed on clean-up and for what purpose. The appointment of a financial controller to the response team may be valuable to ensure that adequate records are kept and the expenditure is controlled The most difficult claims to prove are those for economic loss other than damage to property. Such losses are usually suffered not by the coastal State itself but by individuals or businesses in the State. In claims of this nature, comparative figures for earnings in previous periods and during the period when economic loss was suffered must be presented. A comparison will be made with similar areas outside the area affected by the spill. This involves a great deal of documentation. The claimant must show that the loss was caused by contamination The speed with which claims are settled depends largely on how long it takes for claimants to provide the information required. It is advisable to contact those bodies likely to be involved in paying compensation (and their technical advisers) as soon as possible after the incident to discuss the presentation of claims Claimants should submit their claims as soon as possible after the damage has occurred. If a formal claim cannot be made shortly after an incident, the IOPC Funds would appreciate being notified as soon as possible of the claimant s intention to present a claim at a later stage. Claimants will ultimately lose their right to compensation from the shipowner/insurer and the 1971/1992 Funds unless they bring court action against the shipowner/insurer and the 1971/1992 Funds within three years of the date on which the damage occurred. Although the damage may occur sometime after an incident took place, court action must in any case be brought within six years of the date of the incident. Claimants are recommended to seek legal advice on the formal requirements of court actions, to avoid their claims being time-barred. 31

45 Manual on Oil Pollution V: Administrative aspects The IOPC Funds are closely and actively involved in claims assessment, and, pursuant to an agreement with the International Group of P&I Clubs, claims are handled jointly by the IOPC Funds and the Club involved. Very often the technical assistance of ITOPF will be called upon. The result is that normally claimants need present their claims only once It is important that Governments inform the IOPC Funds promptly of any incidents in respect of which the Funds will have to pay compensation or in respect of which there is a real possibility that the Funds might have to make such payments If there is a reasonable likelihood that the IOPC Funds will be involved, potential claimants should consult with the Funds and their technical experts at the earliest possible time, especially in respect of any major items of expenditure. The objective of the IOPC Funds is to compensate the victims of pollution under the terms set out in the 1971 Fund Convention and the 1992 Fund Convention; the Funds therefore regard themselves as providing an international public service, and their claims handling is conducted accordingly. Extracts from the IOPC Funds Claims Manual (5th edition, December 1996) are presented in appendix 5 of this publication. Chapter 13 Guidelines for facilitation of response to oil pollution incidents 13.1 The previous chapter outlined the procedures that have to be considered for being able to recover compensation for the costs incurred in responding to an oil spill and any resulting pollution damage. Part of a response operation could involve the use of resources brought into a State from another country. While the costs associated with such outside assistance may be recovered under existing liability and compensation regimes the manner in which such resources are accessed requires careful planning At the first intersessional meeting of the OPRC Working Group in March 1993, countries set out to have IMO develop operational guidelines and recommendations on the means by which States should give effect to article 7(3) of the OPRC Convention dealing with facilitation of response to an oil pollution incident Article 7 of the OPRC Convention, International co-operation in pollution response, inter alia, stipulates the following: (3) In accordance with international agreements, each Party shall take necessary legal or administrative measures to facilitate: (a) the arrival and utilization in and departure from its territory of ships, aircraft and other modes of transport engaged in responding to an oil pollution incident or transporting personnel, cargoes, materials and equipment required to deal with such an incident; and 32

46 Part II, chapter 13 (b) the expeditious movement into, through, and out of its territory of such personnel, cargoes, materials and equipment referred to in paragraph (a) Following careful deliberation on this issue during the thirty-fourth, thirty-seventh and thirty-eighth sessions of the Marine Environment Protection Committee, the Committee forwarded to the twentieth Assembly of IMO a resolution, which was approved (resolution A.869(20)), to provide guidance for States in implementing the aforementioned article of the Convention. This Assembly resolution is presented in appendix 6 of this publication. 33

47

48 References 1 Bates, J.H. and Benson, C.J. Marine Environment Law. Loose-leaf, Lloyd s Shipping Law Library. London, Lloyd s of London Press, (ISBN ). 2 Bernaerts, A. Bernaerts Guide to the Law ofthe Sea. Coulsdon, Fairplay Publications, (ISBN ). 3 Binney, B.F. Protecting the environment with salvage law:risks, rewards and the 1989 Salvage Convention. Washington Law Review 65: , Birnie, P. and Boyle, A. International Law and the Environment. Oxford, Oxford University Press, (ISBN ). 5 Brubaker, D. Marine Pollution and International Law: Principles and Practice. London, Belhaven Press, (ISBN ). 6 Churchill, R. and Lowe, A. Law ofthe Sea. 2nd ed. Manchester, Manchester University Press, (ISBN ). 7 de la Rue, Colin (Ince & Co.) and CMI. Liability for Damage to the Marine Environment. General Editor:Colin de la Rue (Partner, Ince & Co.). Published in association with the CMI. London, Lloyd s of London Press, (ISBN ). 8 Darling, G. and Smith, C. LOF 90 and the New Salvage Convention. London, Lloyd s of London Press, (ISBN ). 9 de Rouw, A.C.J. Emergency response to maritime pollution incidents:legal aspects. In:Couper, A. and Gold, E. (Eds.) The Marine Environment and Sustainable Development: Law, Policy and Science Proceedings ofthe Law ofthe Sea Institute 25th Annual Conference, Malmö, 6 9 August Honolulu, The Law of the Sea Institute, pp Drel, M.I. Liability for damage resulting from the transport of hazardous cargoes by sea. In:Couper, A. and Gold, E. (Eds.) The Marine Environment and Sustainable Development: Law, Policy and Science Proceedings ofthe Law ofthe Sea Institute 25th Annual Conference, Malmö, 6 9 August Honolulu, The Law of the Sea Institute, pp Drewry Shipping Consultants. Marine Pollution and Safer Ships: Implications for the Tanker Industry. London, Drewry Shipping Consultants Ltd, Dudley, J.R., Scott, B.J. and Gold, E. Towards Safer Ships and Cleaner Seas: A Handbook for Modern Tankship Operations. Arendal, Assuranceforeningen Gard, (ISBN ). 35

49 Manual on Oil Pollution V: Administrative aspects 13 Griggs, P. and Williams, R. (Ince & Co., Solicitors). Limitation of Liability for Maritime Claims. 2nd ed. London, Lloyd s of London Press, (ISBN ). 14 Gold. E. (Ed.). Maritime Affairs: A World Handbook. 2nd ed. Harlow, Longman Group UK Ltd, (ISBN ). 15 Hazelwood, S.J. P& I Clubs: Law and Practice. 2nd ed. London, Lloyd s of London Press, (ISBN ). 16 Hill, C. Maritime Law. 4th ed. London, Lloyd s of London Press, (ISBN ). 17 International Oil Pollution Compensation Funds (IOPCF). - Claims Manual. 5th ed. London, IOPCF, General Information on Liability and Compensation for Oil Pollution Damage. London, IOPCF, International Tanker Owners Pollution Federation Ltd (ITOPF). TOVALOP & CRISTAL: A Guide to Oil Spill Compensation. 2nd ed. London, ITOPF, Kindt, J.M. Marine Pollution and the Law ofthe Sea. New York, William S. Hein & Co., vols. (ISBN ). 20 Luddeke, C. Marine Claims. London, Lloyd s of London Press, (ISBN ). 21 Mensah, T.A. et al. The protection of the marine environment:flag State and port State policies. In:Couper, A. and Gold, E. (Eds.) The Marine Environment and Sustainable Development: Law, Policy and Science Proceedings ofthe Law ofthe Sea Institute 25th Annual Conference, Malmö, 6 9 August Honolulu, The Law of the Sea Institute, pp O Connell, D.P. International Law ofthe Sea. 2 vols. Oxford, Oxford University Press, Vol. 1, 1983 (ISBN X); Vol. 2, (ISBN ). 23 Sasamura, Y. Prevention and control of marine pollution from ships. In:Couper, A. and Gold, E. (Eds.), The Marine Environment and Sustainable Development: Law, Policy and Science Proceedings of the Law ofthe Sea Institute 25th Annual Conference, Malmö, 6 9 August Honolulu, The Law of the Sea Institute, pp Smith, B.D. State Responsibility and the Marine Environment: The Rules ofdecision. Oxford, Oxford University Press, (ISBN ). 25 Vincenzini, E. International Salvage Law. London, Lloyd s of London Press, (ISBN ). 36

50 References 26 Bureau Veritas. Ship Safety Handbook. 3rd ed. London, Lloyd s of London Press, (ISBN ). 27 London, International Maritime Organization (IMO): - SOLAS (Consolidated edition, 1997) SOLAS Amendments SOLAS Amendments International Safety Management Code (ISM Code) (1994 edition). - International Convention relating to Intervention on the High Seas in Cases ofoil Pollution Casualties (Intervention), 1969 (1977 edition). - International Convention on Civil Liability for Oil Pollution Damage (CLC), 1969 (1977 edition). - International Conference on Liability and Compensation for Damage in connexion with the Carriage ofcertain Substances by Sea, 1984 (1985 edition). - Official Records of the International Conference on Liability and Compensation for Damage in connexion with the Carriage of Certain Substances by Sea, 1984, and the International Conference on the Revision of the 1969 Civil Liability Convention and the 1971 Fund Convention, 1992 (1993 edition). - Civil Liability for Oil Pollution Damage International Conference on Salvage, 1989 (1989 edition). - MARPOL 73/78 (Consolidated edition, 1997) MARPOL Amendments MARPOL How to Do It (1993 edition). - Provisions concerning the Reporting ofincidents Involving Harmful Substances under MARPOL 73/78 (1990 edition). - International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC), 1990 (1991 edition). - Guidelines for the Development of Shipboard Oil Pollution Emergency Plans (1992 edition). - Ship Safety and Pollution Prevention: Ship Management and Port State Control. - STCW 95: International Convention on Standards oftraining, Certification and Watchkeeping for Seafarers, 1978, and STCW Code (1996 edition). 37

51 Manual on Oil Pollution V: Administrative aspects Directory of publishers Assuranceforeningen Gard, P.O. Box 1563 Myrene, 4801 Norway. Belhaven Press, P.O. Box 87, Osney Mead, Oxford OX2, United Kingdom. Drewry Shipping Consultants Ltd, 11 Heron Quay, London E14 4JF, United Kingdom. Fairplay Publications Ltd, P.O. Box 96, Coulsdon, Surrey CR5 2TE, United Kingdom. International Maritime Organization, 4 Albert Embankment, London SE1 7SR, United Kingdom. International Oil Pollution Compensation Funds (IOPCF), 4 Albert Embankment, London SE1 7SR, United Kingdom. International Tanker Owners Pollution Federation Ltd (ITOPF), Staple Hall, Stonehouse Court, Houndsditch, London EC3A 7AX, United Kingdom. The Law of the Sea Institute, University of Hawaii at Manoa, 2515 Dole Street, Honolulu, HI 96822, United States. Lloyd s of London Press, 27 Swinton Street, London WC1X 9NW, United Kingdom. Longman Group UK Ltd, Westgate House, The High, Harlow, Essex CM20 1YR, United Kingdom. Manchester University Press, Oxford Road, Manchester M13 9PL, United Kingdom. Oxford University Press, Walton Street, Oxford OX2 6DP, United Kingdom. William S. Hein & Co. Inc., 1285 Main Street, Buffalo, NY 14209, United States. 38

52 Appendix 1 SOLAS 1974 Chapter IX MANAGEMENT FOR THE SAFE OPERATION OF SHIPS Regulation 1 Definitions For the purpose of this chapter, unless expressly provided otherwise: 1 International Safety Management (ISM) Code means the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by the Organization by resolution A.741(18), as may be amended by the Organization, provided that such amendments are adopted, brought into force and take effect in accordance with the provisions or article VIII of the present Convention concerning the amendment procedures applicable to the annex other than chapter I. 2 Company means the owner of the ship or any other organization or person such as the manager, or the bareboat charterer, who has assumed the responsibility for operation of the ship from the owner of the ship and who on assuming such responsibility has agreed to take over all the duties and responsibilities imposed by the International Safety Management Code. 3 Oil tanker means an oil tanker as defined in regulation II-1/ Chemical tanker means a chemical tanker as defined in regulation VII/ Gas carrier means a gas carrier as defined in regulation VII/ Bulk carrier means a ship which is constructed generally with single deck, top-side tanks and hopper side tanks in cargo spaces, and is intended primarily to carry dry cargo in bulk, and includes such types as ore carriers and combination carriers. 7 Mobile offshore drilling unit (MODU) means a vessel capable of engaging in drilling operations for the exploration for or exploitation of resources beneath the sea-bed such as liquid or gaseous hydrocarbons, sulphur or salt. 8 High-speed craft means a craft as defined in regulation X/1.2. Note:Chapter IX was accepted on 1 January 1998, by the tacit acceptance procedure, and will enter into force on 1 July

53 Manual on Oil Pollution V: Administrative aspects Regulation 2 Application 1 This chapter applies to ships, regardless of the date of construction, as follows:.1 passenger ships including passenger high-speed craft, not later than 1 July 1998;.2 oil tankers, chemical tankers, gas carriers, bulk carriers and cargo high-speed craft of 500 gross tonnage and upwards, not later than 1 July 1998; and.3 other cargo ships and mobile offshore drilling units of 500 gross tonnage and upwards, not later than 1 July This chapter does not apply to government-operated ships used for non-commercial purposes. Regulation 3 Safety management requirements 1 The company and the ship shall comply with the requirements of the International Safety Management Code. 2 The ship shall be operated by a company holding a Document of Compliance referred to in regulation 4. Regulation 4 Certification 1 A Document of Compliance shall be issued to every company which complies with the requirements of the International Safety Management Code. This document shall be issued by the Administration, by an organization recognized by the Administration, or at the request of the Administration by another Contracting Government. 2 A copy of the Document of Compliance shall be kept on board the ship in order that the master can produce it on request for verification. 3 A Certificate, called a Safety Management Certificate, shall be issued to every ship by the Administration or an organization recognized by the Administration. The Administration or organization recognized by it shall, before issuing the Safety Management Certificate, verify that the company and its shipboard management operate in accordance with the approved safety-management system. Regulation 5 Maintenance ofconditions The safety-management system shall be maintained in accordance with the provisions of the International Safety Management Code. 40

54 Appendix 1 Regulation 6 Verification and control 1 The Administration, another Contracting Government at the request of the Administration or an organization recognized by the Administration shall periodically verify the proper functioning of the ship s safety-management system. 2 Subject to the provisions of paragraph 3 of this regulation, a ship required to hold a certificate issued pursuant to the provisions of regulation 4.3 shall be subject to control in accordance with the provisions of regulation XI/4. For this purpose such certificate shall be treated as a certificate issued under regulation I/12 or I/13. 3 In cases of change of flag State or company, special transitional arrangements shall be made in accordance with the guidelines developed by the Organization.* Resolution A.741(18) Adopted on 4 November 1993 INTERNATIONAL MANAGEMENT CODE FOR THE SAFE OPERATION OF SHIPS AND FOR POLLUTION PREVENTION (INTERNATIONAL SAFETY MANAGEMENT (ISM) CODE) THE ASSEMBLY, RECALLING Article 15(j) of the Convention on the International Maritime Organization concerning the functions of the Assembly in relation to regulations and guidelines concerning maritime safety and the prevention and control of marine pollution from ships, RECALLING ALSO resolution A.680(17), by which it invited Member Governments to encourage those responsible for the management and operation of ships to take appropriate steps to develop, implement and assess safety and pollution-prevention management in accordance with the IMO Guidelines on Management for the Safe Operation of Ships and for Pollution Prevention, RECALLING ALSO resolution A.596(15), by which it requested the Maritime Safety Committee to develop, as a matter of urgency, guidelines, wherever relevant, concerning shipboard and shore-based management, and its decision to include in the work programme of the Maritime Safety * Refer to the Guidelines on the implementation of the ISM Code by Administrations, adopted by the Organization by Assembly resolution A.788(19) (refer to IMO sales publication number IMO-117E). 41

55 Manual on Oil Pollution V: Administrative aspects Committee and the Marine Environment Protection Committee an item on shipboard and shore-based management for the safe operation of ships and for the prevention of marine pollution, respectively, RECALLING FURTHER resolution A.441(XI), by which it invited every State to take the necessary steps to ensure that the owner of a ship which flies the flag of that State provides such State with the current information necessary to enable it to identify and contact the person contracted or otherwise entrusted by the owner to discharge his responsibilities for that ship in regard to matters relating to maritime safety and the protection of the marine environment, RECALLING FURTHER resolution A.443(XI), by which it invited Governments to take the necessary steps to safeguard the shipmaster in the proper discharge of his responsibilities in regard to maritime safety and the protection of the marine environment, RECOGNIZING the need for appropriate organization of management to enable it to respond to the need of those on board ships to achieve and maintain high standards of safety and environmental protection, RECOGNIZING ALSO that the most important means of preventing maritime casualties and pollution of the sea from ships is to design, construct, equip and maintain ships and to operate them with properly trained crews in compliance with international conventions and standards relating to maritime safety and pollution prevention, NOTING that the Maritime Safety Committee is developing requirements for adoption by Contracting Governments to the International Convention for the Safety of Life at Sea (SOLAS), 1974, which will make compliance with the Code referred to in operative paragraph 1 mandatory, CONSIDERING that the early implementation of that Code would greatly assist in improving safety at sea and protection of the marine environment, NOTING FURTHER that the Maritime Safety Committee and the Marine Environment Protection Committee have reviewed resolution A.680(17) and the Guidelines annexed thereto in developing the Code, HAVING CONSIDERED the recommendations made by the Maritime Safety Committee at its sixty-second session and by the Marine Environment Protection Committee at its thirty-fourth session, 1. ADOPTS the International Management Code for the Safe Operation of Ships and for Pollution Prevention (International Safety Management (ISM) Code), set out in the annex to the present resolution; 2. STRONGLY URGES Governments to implement the ISM Code on a national basis, giving priority to passenger ships, tankers, gas carriers, bulk carriers and mobile offshore units which are flying their flags, as soon as possible but not later than 1 June 1998, pending development of the mandatory applications of the Code; 3. REQUESTS Governments to inform the Maritime Safety Committee and the Marine Environment Protection Committee of the action they have taken in implementing the ISM Code; 42

56 Appendix 1 4. REQUESTS the Maritime Safety Committee and the Marine Environment Protection Committee to develop guidelines for the implementation of the ISM Code; 5 REQUESTS ALSO the Maritime Safety Committee and the Marine Environment Protection Committee to keep the Code and its associated guidelines under review and to amend them as necessary; 6. REVOKES resolution A.680(17). Annex INTERNATIONAL SAFETY MANAGEMENT (ISM) CODE Safety and pollution-prevention management requirements Preamble 1 The purpose of this Code is to provide an international standard for the safe management and operation of ships and for pollution prevention. 2 The Assembly adopted resolution A.443(XI), by which it invited all Governments to take the necessary steps to safeguard the shipmaster in the proper discharge of his responsibilities with regard to maritime safety and the protection of the marine environment. 3 The Assembly also adopted resolution A.680(17), by which it further recognized the need for appropriate organization of management to enable it to respond to the need of those on board ships to achieve and maintain high standards of safety and environmental protection. 4 Recognizing that no two shipping companies or shipowners are the same, and that ships operate under a wide range of different conditions, the Code is based on general principles and objectives. 5 The Code is expressed in broad terms so that it can have a widespread application. Clearly, different levels of management, whether shorebased or at sea, will require varying levels of knowledge and awareness of the items outlined. 6 The cornerstone of good safety management is commitment from the top. In matters of safety and pollution prevention it is the commitment, competence, attitudes and motivation of individuals at all levels that determines the end result. 43

57 Manual on Oil Pollution V: Administrative aspects 1 General 1.1 Definitions International Safety Management (ISM) Code means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the Assembly, as may be amended by the Organization Company means the owner of the ship or any other organization or person such as the manager, or the bareboat charterer, who has assumed the responsibility for operation of the ship from the shipowner and who, on assuming such responsibility, has agreed to take over all duties and responsibility imposed by the Code Administration means the Government of the State whose flag the ship is entitled to fly. 1.2 Objectives The objectives of the Code are to ensure safety at sea, prevention of human injury or loss of life, and avoidance of damage to the environment, in particular to the marine environment and to property Safety-management objectives of the Company should, inter alia:.1 provide for safe practices in ship operation and a safe working environment;.2 establish safeguards against all identified risks; and.3 continuously improve safety-management skills of personnel ashore and aboard ships, including preparing for emergencies related both to safety and environmental protection The safety-management system should ensure:.1 compliance with mandatory rules and regulations; and.2 that applicable codes, guidelines and standards recommended by the Organization, Administrations, classification societies and maritime industry organizations are taken into account. 1.3 Application The requirements of this Code may be applied to all ships. 1.4 Functional requirements for a safety-management system Every Company should develop, implement and maintain a safety-management system (SMS) which includes the following functional requirements:.1 a safety and environmental protection policy;.2 instructions and procedures to ensure safe operation of ships and protection of the environment in compliance with relevant international and flag State legislation; 44

58 Appendix 1.3 defined levels of authority and lines of communication between, and amongst, shore and shipboard personnel;.4 procedures for reporting accidents and non-conformities with the provisions of this Code;.5 procedures to prepare for and respond to emergency situations; and.6 procedures for internal audits and management reviews. 2 Safety and environmental protection policy 2.1 The Company should establish a safety and environmental-protection policy which describes how the objectives given in paragraph 1.2 will be achieved. 2.2 The Company should ensure that the policy is implemented and maintained at all levels of the organization both, ship-based and shorebased. 3 Company responsibilities and authority 3.1 If the entity who is responsible for the operation of the ship is other than the owner, the owner must report the full name and details of such entity to the Administration. 3.2 The Company should define and document the responsibility, authority and interrelation of all personnel who manage, perform and verify work relating to and affecting safety and pollution prevention. 3.3 The Company is responsible for ensuring that adequate resources and shore-based support are provided to enable the designated person or persons to carry out their functions. 4 Designated person(s) To ensure the safe operation of each ship and to provide a link between the Company and those on board, every Company, as appropriate, should designate a person or persons ashore having direct access to the highest level of management. The responsibility and authority of the designated person or persons should include monitoring the safety and pollutionprevention aspects of the operation of each ship and ensuring that adequate resources and shore-based support are applied, as required. 5 Master s responsibility and authority 5.1 The Company should clearly define and document the master s responsibility with regard to:.1 implementing the safety and environmental-protection policy of the Company;.2 motivating the crew in the observation of that policy; 45

59 Manual on Oil Pollution V: Administrative aspects.3 issuing appropriate orders and instructions in a clear and simple manner;.4 verifying that specified requirements are observed; and.5 reviewing the SMS and reporting its deficiencies to the shorebased management. 5.2 The Company should ensure that the SMS operating on board the ship contains a clear statement emphasizing the master s authority. The Company should establish in the SMS that the master has the overriding authority and the responsibility to make decisions with respect to safety and pollution prevention and to request the Company s assistance as may be necessary. 6 Resources and personnel 6.1 The Company should ensure that the master is:.1 properly qualified for command;.2 fully conversant with the Company s SMS; and.3 given the necessary support so that the master s duties can be safely performed. 6.2 The Company should ensure that each ship is manned with qualified, certificated and medically fit seafarers in accordance with national and international requirements. 6.3 The Company should establish procedures to ensure that new personnel and personnel transferred to new assignments related to safety and protection of the environment are given proper familiarization with their duties. Instructions which are essential to be provided prior to sailing should be identified, documented and given. 6.4 The Company should ensure that all personnel involved in the Company s SMS have an adequate understanding of relevant rules, regulations, codes and guidelines. 6.5 The Company should establish and maintain procedures for identifying any training which may be required in support of the SMS and ensure that such training is provided for all personnel concerned. 6.6 The Company should establish procedures by which the ship s personnel receive relevant information on the SMS in a working language or languages understood by them. 6.7 The Company should ensure that the ship s personnel are able to communicate effectively in the execution of their duties related to the SMS. 46

60 Appendix 1 7Development of plans for shipboard operations The Company should establish procedures for the preparation of plans and instructions for key shipboard operations concerning the safety of the ship and the prevention of pollution. The various tasks involved should be defined and assigned to qualified personnel. 8 Emergency preparedness 8.1 The Company should establish procedures to identify, describe and respond to potential emergency shipboard situations. 8.2 The Company should establish programmes for drills and exercises to prepare for emergency actions. 8.3 The SMS should provide for measures ensuring that the Company s organization can respond at any time to hazards, accidents and emergency situations involving its ships. 9 Reports and analysis of non-conformities, accidents and hazardous occurrences 9.1 The SMS should include procedures ensuring that non-conformities, accidents and hazardous situations are reported to the Company, investigated and analysed with the objective of improving safety and pollution prevention. 9.2 The Company should establish procedures for the implementation of corrective action. 10 Maintenance of the ship and equipment 10.1 The Company should establish procedures to ensure that the ship is maintained in conformity with the provisions of the relevant rules and regulations and with any additional requirements which may be established by the Company In meeting these requirements the Company should ensure that:.1 inspections are held at appropriate intervals;.2 any non-conformity is reported, with its possible cause, if known;.3 appropriate corrective action is taken; and.4 records of these activities are maintained The Company should establish procedures in its SMS to identify equipment and technical systems the sudden operational failure of which may result in hazardous situations. The SMS should provide for specific measures aimed at promoting the reliability of such equipment or systems. These measures should include the regular testing of stand-by arrangements and equipment or technical systems that are not in continuous use. 47

61 Manual on Oil Pollution V: Administrative aspects 10.4 The inspections mentioned in 10.2 as well as the measures referred to in 10.3 should be integrated into the ship s operational maintenance routine. 11 Documentation 11.1 The Company should establish and maintain procedures to control all documents and data which are relevant to the SMS The Company should ensure that:.1 valid documents are available at all relevant locations;.2 changes to documents are reviewed and approved by authorized personnel; and.3 obsolete documents are promptly removed The documents used to describe and implement the SMS may be referred to as the Safety Management Manual. Documentation should be kept in a form that the Company considers most effective. Each ship should carry on board all documentation relevant to that ship. 12 Company verification, review and evaluation 12.1 The Company should carry out internal safety audits to verify whether safety and pollution-prevention activities comply with the SMS The Company should periodically evaluate the efficiency of and, when needed, review the SMS in accordance with procedures established by the Company The audits and possible corrective actions should be carried out in accordance with documented procedures Personnel carrying out audits should be independent of the areas being audited unless this is impracticable due to the size and the nature of the Company The results of the audits and reviews should be brought to the attention of all personnel having responsibility in the area involved The management personnel responsible for the area involved should take timely corrective action on deficiencies found. 13 Certification, verification and control 13.1 The ship should be operated by a Company which is issued a document of compliance relevant to that ship A document of compliance should be issued for every Company complying with the requirements of the ISM Code by the Administration, by an organization recognized by the Administration or by the Government of the country, acting on behalf of the Administration in which the 48

62 Appendix 1 Company has chosen to conduct its business. This document should be accepted as evidence that the Company is capable of complying with the requirements of the Code A copy of such a document should be placed on board in order that the master, if so asked, may produce it for the verification of the Administration or organizations recognized by it A certificate, called a Safety Management Certificate, should be issued to a ship by the Administration or organization recognized by the Administration. The Administration should, when issuing the certificate, verify that the Company and its shipboard management operate in accordance with the approved SMS The Administration or an organization recognized by the Administration should periodically verify the proper functioning of the ship s SMS as approved. 49

63 Manual on Oil Pollution V: Administrative aspects Appendix 2 Resolution A.851(20) Adopted on 27 November 1997 GENERAL PRINCIPLES FOR SHIP REPORTING SYSTEMS AND SHIP REPORTING REQUIREMENTS, INCLUDING GUIDELINES FOR REPORTING INCIDENTS INVOLVING DANGEROUS GOODS, HARMFUL SUBSTANCES AND/OR MARINE POLLUTANTS THE ASSEMBLY, RECALLING Article 15(j) of the Convention on the International Maritime Organization concerning the functions of the Assembly in relation to regulations and guidelines concerning maritime safety and the prevention and control of marine pollution from ships, RECALLING ALSO resolution 3 of the International Conference on Maritime Search and Rescue, 1979, on the need for an internationally agreed format and procedure for ship reporting systems, CONSIDERING that current national ship reporting systems may use different procedures and reporting formats, REALIZING that such different procedures and reporting formats could cause confusion to masters of ships moving from one area to another covered by different ship reporting systems, BELIEVING that such confusion could be alleviated if ship reporting systems and reporting requirements were to comply as far as practicable with relevant general principles and if reports were made in accordance with a standard format and procedures, RECALLING the General Principles for Ship Reporting Systems and Ship Reporting Requirements, Including Guidelines for reporting Incidents Involving Dangerous Goods, Harmful Substances and/or Marine Pollutants, adopted by resolution A.648(16), RECOGNIZING that States Parties to the International Convention relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (1969) and the Protocol relating to Intervention on the High Seas in Cases of Marine Pollution by Substances Other Than Oil (1973) may take such measures on the high seas as may be necessary to prevent, mitigate or eliminate grave and imminent danger to their coastline or related interests from pollution or threat of pollution of the sea by oil and substances other 50

64 Appendix 2 than oil following upon a maritime casualty or acts related to such a casualty, which may reasonably be expected to result in major harmful consequences, RECOGNIZING ALSO the need for coastal States to be informed by the master of an assisting ship, or of a ship undertaking salvage, of particulars of the incident and of action taken, RECOGNIZING FURTHER that an incident involving damage, failure or breakdown of the ship, its machinery or equipment could give rise to a significant threat of pollution to coastlines or related interests, HAVING CONSIDERED the recommendation made by the Maritime Safety Committee at its sixty-seventh session and by the Marine Environment Protection Committee at its thirty-ninth session, 1. ADOPTS the General Principles for Ship Reporting Systems and Ship Reporting Requirements, Including Guidelines for Reporting Incidents Involving Dangerous Goods, Harmful Substances and/or Marine Pollutants set out in the annex to the present resolution; 2. URGES Governments to ensure that ship reporting systems and reporting requirements comply as closely as possible with the general principles specified in the annex to the present resolution; 3. URGES ALSO Governments to bring the reporting format and procedures to the notice of shipowners and seafarers as well as of the designated authorities concerned; 4. RECOMMENDS Governments and States Parties to MARPOL 73/78 to implement the Guidelines, in accordance with paragraph (2) of article V of Protocol I thereof; 5. REVOKES resolution A.648(16). Annex GENERAL PRINCIPLES FOR SHIP REPORTING SYSTEMS AND SHIP REPORTING REQUIREMENTS, INCLUDING GUIDELINES FOR REPORTING INCIDENTS INVOLVING DANGEROUS GOODS, HARMFUL SUBSTANCES AND/OR MARINE POLLUTANTS 1 General principles 1.1 Ship reporting systems and reporting requirements are used to provide, gather or exchange information through radio reports. The information is used to provide data for many purposes, including search and rescue, vessel traffic services, weather forecasting and prevention of marine pollution. Ship reporting systems and reporting requirements should, as far as practicable, comply with the following general principles: 51

65 Manual on Oil Pollution V: Administrative aspects.1 reports should contain only information essential to achieve the objectives of the reporting system;.2 reports should be simple and use the standard international ship reporting format and procedures; where language difficulties may exist, the languages used should include English, using where possible the Standard Marine Navigational Vocabulary, or alternatively the International Code of Signals. The standard reporting format and procedures to be used are given in the appendix to this annex;.3 the number of reports should be kept to a minimum;.4 no charge should be made for communication of reports;.5 safety- or pollution-related reports should be made without delay; however, the time and place of making non-urgent reports should be sufficiently flexible to avoid interference with essential navigational duties;.6 information obtained from the system should be made available to other systems when required for distress, safety and pollution prevention purposes;.7 basic information (ship s particulars, on-board facilities and equipment, etc.) should be reported once, be retained in the system and be updated by the ship when changes occur in the basic information reported;.8 the purpose of the system should be clearly defined;.9 Governments establishing a ship reporting system should notify mariners of full details of the requirements to be met and the procedures to be followed. Details of types of ships and areas of applicability, of times and geographical positions for submitting reports, of shore establishments responsible for operation of the system and of the services provided should be clearly specified. Chartlets depicting boundaries of the system and providing other necessary information should be made available to mariners;.10 the establishment and operation of a ship reporting system should take into account:.10.1 international as well as national responsibilities and requirements;.10.2 the cost to ship operators and responsible authorities;.10.3 navigational hazards;.10.4 existing and proposed aids to safety; and.10.5 the need for early and continuing consultation with interested parties, including a sufficient period to allow for trial, familiarization and assessment to ensure 52

66 Appendix 2 satisfactory operation and to allow necessary changes to be made to the system;.11 Governments should ensure that shore establishments responsible for operation of the system are manned by properly trained persons;.12 Governments should consider the interrelationship between ship reporting systems and other systems;.13 ship reporting systems should preferably use a single operating radio frequency; where additional frequencies are necessary, the number of frequencies should be restricted to the minimum required for the effective operation of the system;.14 information provided by the system to ships should be restricted to that necessary for the proper operation of the system and for safety;.15 ship reporting systems and requirements should provide for special reports from ships concerning defects or deficiencies with respect to their hull, machinery, equipment or manning, or concerning other limitations which could adversely affect navigation and for special reports concerning incidents of actual or probable marine pollution;.16 Governments should issue instructions to their shore establishments responsible for the operation of ship reporting systems to ensure that any reports involving pollution, actual or probable, are relayed without delay to the officer or agency nominated to receive and process such reports, and to ensure that such an officer or agency relays these reports without delay to the flag State of the ship involved and to any other State which may be affected;.17 States which are affected or likely to be affected by pollution incidents and which may require information relevant to the incident should take into account the circumstances in which the master is placed, and should endeavour to limit their requests for additional information; and.18 the appendix to this annex does not apply to danger messages referred to under regulation V/2 of the 1974 SOLAS Convention, as amended. The present practice of transmitting such messages should remain unchanged. 53

67 Manual on Oil Pollution V: Administrative aspects 2 Guidelines for reporting incidents involving dangerous goods 2.1 The intent of these Guidelines and those contained in the appendix is to enable coastal States and other interested parties to be informed, without delay, when any incident occurs involving the loss, or likely loss, overboard of packaged dangerous goods into the sea. 2.2 Reports should be transmitted to the nearest coastal State. When the ship is within or near an area for which a ship reporting system has been established, reports should be transmitted to the designated shore station of that system. 3 Guidelines for reporting incidents involving harmful substances and/or marine pollutants 3.1 The intent of these Guidelines and those contained in the appendix is to enable coastal States and other interested parties to be informed, without delay, of any incident giving rise to pollution, or threat of pollution, of the marine environment, as well as of assistance and salvage measures, so that appropriate action may be taken. 3.2 In accordance with article V(1) of Protocol I of MARPOL 73/78, a report shall be made to the nearest coastal State. 3.3 Whenever a ship is engaged in or requested to engage in an operation to render assistance to or undertake salvage of a ship involved in an incident referred to in subparagraph 1(a) or (b) of article II of Protocol I of MARPOL 73/78, as amended, the master of the former ship should report, without delay, the particulars of the action undertaken or planned. The coastal States should also be kept informed of developments. 3.4 The probability of a discharge resulting from damage to the ship or its equipment is a reason for making a report. Appendix 1 Procedures Reports should be sent as follows: Sailing plan (SP) Before or as near as possible to the time of departure from a port within a reporting system or when entering the area covered by a system. Position report (PR) When necessary to ensure effective operation of the system. Deviation report (DR) When the ship s position varies significantly from the position that would have been predicted from previous reports, when changing the reported route, or as decided by the master. 54

68 Appendix 2 Final report (FR) Dangerous goods report (DG) Harmful substances report (HS) Marine pollutants report (MP) Any other report On arrival at destination and when leaving the area covered by a system. When an incident takes place involving the loss or likely loss overboard of packaged dangerous goods, including those in freight containers, portable tanks, road and rail vehicles and shipborne barges, into the sea. When an incident takes place involving the discharge or probable discharge of oil (Annex I of MARPOL 73/78) or noxious liquid substances in bulk (Annex II of MARPOL 73/78). In the case of loss or likely loss overboard of harmful substances in packaged form, including those in freight containers, portable tanks, road and rail vehicles and shipborne barges, identified in the International Maritime Dangerous Goods Code as marine pollutants (Annex III of MARPOL 73/78). Any other report should be made in accordance with the system procedures as notified in accordance with of the General Principles. 2 Standard reporting format and procedures 2.1 Sections of the ship reporting format which are inappropriate should be omitted from the report. 2.2 Where language difficulties may exist, the languages used should include English, using where possible the Standard Marine Navigational Vocabulary. Alternatively, the International Code of Signals may be used to send detailed information. When the International Code is used, the appropriate indicator should be inserted in the text, after the alphabetical index. 2.3 For route information, latitude and longitude should be given for each turn point, expressed as in C in the list below, together with type of intended track between these points, for example RL (rhumb line), GC (great circle) or coastal, or, in the case of a coastal sailing, the estimated date and time of passing significant points expressed by a six-digit group as in B in the list below. 55

69 Manual on Oil Pollution V: Administrative aspects Telegraphy Telephone Function Information required (alternative) Name of system (e.g. AMVER/AUSREP/ MAREP/ECAREG/ Name of system (e.g. AMVER/ AUSREP/MAREP/ System identifier Ship reporting system or nearest appropriate coast radio station JASREP) ECAREG/JASREP) State in full Type of report Type of report: SP Sailing plan PRPosition report DRDeviation report FRFinal report DG Dangerous goods report HS Harmful substances report MP Marine pollutants report Give in full Any other report A Ship (alpha) Ship Name, call sign or ship station identity, and flag B C D E F G H I J K L M Time (bravo) Position (charlie) Position (delta) Course (echo) Speed (foxtrot) Departed (golf) Entry (hotel) Destination and ETA (india) Pilot (juliet) Exit (kilo) Route (lima) Radiocommunications (mike) Date and time of event Position Position True course Speed in knots and tenths of knots Port of departure Date, time and point of entry into system Destination and expected time of arrival Pilot Date, time and point of exit from system or arrival at the ship s destination Route information Radiocommunications A six-digit group giving day of month (first two digits), hours and minutes (last four digits). If other than UTC, state time zone used A four-digit group giving latitude in degrees and minutes suffixed with N (north) or S (south) and a fivedigit group giving longitude in degrees and minutes suffixed with E (east) or W (west); or True bearing (first three digits) and distance (state distance) in nautical miles from a clearly identified landmark (state landmark) A three-digit group A three-digit group Name of last port of call Entry time expressed as in B and entry position expressed as in C or D Name of port and date/time group expressed as in B State whether a deep-sea or local pilot is on board Exit time expressed as in B and exit position expressed as in C or D Intended track State in full names of stations/ frequencies guarded 56

70 Appendix 2 N O P Telegraphy Telephone (alternative) Next report (november) Draught (oscar) Cargo (papa) Function Time of next report Maximum present static draught in metres Cargo on board Information required Date/time group expressed as in B Four-digit group giving metres and centimetres Cargo and brief details of any dangerous cargoes as well as harmful substances and gases that could endanger persons or the environment (See detailed reporting requirements) Q Defect, damage, deficiency, limitations (quebec) Defects/damage/ deficiencies/other limitations Brief details of defects, damage, deficiencies or other limitations (See detailed reporting requirements) RPollution/dangerous goods lost overboard (romeo) S T U V Weather (sierra) Agent (tango) Size and type (uniform) Medic (victor) Description of pollution or dangerous goods lost overboard Weather conditions Ship s representative and/or owner Ship size and type Medical personnel W Persons (whiskey) Total number of persons on board X Remarks Miscellaneous (x-ray) Brief details of type of pollution (oil, chemicals, etc.) or dangerous goods lost overboard; position expressed as in C or D (See detailed reporting requirements) Brief details of weather and sea conditions prevailing Details of name and particulars of ship s representative or owner or both for provision of information (See detailed reporting requirements) Details of length, breadth, tonnage, and type, etc., as required Doctor, physician s assistant, nurse, personnel without medical training State number Any other information including, as appropriate, brief details of incident and of other ships involved either in incident, assistance or salvage (See detailed reporting requirements) Y Relay (yankee) Request to delay Content of report report to another system, e.g. AMVER, AUSREP, JASREP, MAREP, etc. Z End of report (zulu) End of report No further information required 57

71 Manual on Oil Pollution V: Administrative aspects 3 Guidelines for detailed reporting requirements 3.1 Dangerous goods reports (DG) Primary reports should contain items A, B, C (or D), M, Q, R, S, T, U, X of the standard reporting format; details for R should be as follows: R 1 Correct technical name or names of goods. 2 UN Number or Numbers. 3 IMO hazard class or classes. 4 Names of manufacturers of goods when known, or consignee or consignor. 5 Types of packages, including identification marks. Specify whether portable tank or tank vehicle, or whether vehicle or freight container or other cargo transport unit containing packages. Include official registration marks and numbers assigned to the unit. 6 An estimate of the quantity and likely condition of the goods. 7 Whether lost goods floated or sank. 8 Whether loss is continuing. 9 Cause of loss If the condition of the ship is such that there is danger of further loss of packaged dangerous goods into the sea, items P and Q of the standard reporting format should be reported; details for P should be as follows: P 1 Correct technical name or names of goods. 2 UN Number or Numbers. 3 IMO hazard class or classes. 4 Names of manufacturers of goods when known, or consignee or consignor. 5 Types of packages, including identification marks. Specify whether portable tank or tank vehicle, or whether vehicle or freight container or other cargo transport unit containing packages. Include official registration marks and numbers assigned to the unit. 6 An estimate of the quantity and likely condition of the goods Particulars not immediately available should be inserted in a supplementary message or messages. 3.2 Harmful substances reports (HS) In the case of actual discharge, primary HS reports should contain items A, B, C (or D), E, F, L, M, N, Q, R, S, T, U, X of the standard reporting format. In the case of probable discharge (see 3.4), item P should also be included. Details for P, Q, R, T and X should be as follows: 58

72 Appendix 2 P 1 Type of oil or the correct technical name of the noxious liquid substances on board. 2 UN Number or Numbers. 3 Pollution category (A, B, C or D), for noxious liquid substances. 4 Names of manufacturers of substances, if appropriate, when known, or consignee or consignor. 5 Quantity. Q 1 Condition of the ship, as relevant. 2 Ability to transfer cargo/ballast/fuel. R 1 Type of oil or the correct technical name of the noxious liquid discharged into the sea. 2 UN Number or Numbers. 3 Pollution category (A, B, C or D), for noxious liquid substances. 4 Names of manufacturers of substances, if appropriate, when known, or consignee or consignor. 5 An estimate of the quantity of the substances. 6 Whether lost substances floated or sank. 7 Whether loss is continuing. 8 Cause of loss. 9 Estimate of the movement of the discharge or lost substances, giving current conditions if known. 10 Estimate of the surface area of the spill, if possible. T 1 Name, address, telex and telephone number of the ship s owner and representative (charterer, manager or operator of the ship or their agent). X 1 Action being taken with regard to the discharge and the movement of the ship. 2 Assistance or salvage efforts which have been requested or which have been provided by others. 3 The master of an assisting or salvaging ship should report the particulars of the action undertaken or planned After the transmission of the information referred to above in the initial report, as much as possible of the information essential for the protection of the marine environment as is appropriate to the incident should be reported in a supplementary report as soon as possible. That information should include items P, Q, R, S and X. 59

73 Manual on Oil Pollution V: Administrative aspects The master of any ship engaged in or requested to engage in an operation to render assistance or undertake salvage should report, as far as practicable, items A, B, C (or D), E, F, L, M, N, P, Q, R, S, T, U, X of the standard reporting format. The master should also keep the coastal State informed of developments. 3.3 Marine pollutants reports (MP) In the case of actual discharge, primary MP reports should contain items A, B, C (or D), M, Q, R, S, T, U, X of the standard reporting format. In the case of probable discharge (see 3.4), item P should also be included. Details for P, Q, R, T and X should be as follows: P 1 Correct technical name or names of goods. 2 UN Number or Numbers. 3 IMO hazard class or classes. 4 Names of manufacturers of goods when known, or consignee or consignor. 5 Types of packages, including identification marks. Specify whether portable tank or tank vehicle, or whether vehicle or freight container or other cargo transport unit containing packages. Include official registration marks and numbers assigned to the unit. 6 An estimate of the quantity and likely condition of the goods. Q 1 Condition of the ship, as relevant. 2 Ability to transfer cargo/ballast/fuel. R 1 Correct technical name or names of goods. 2 UN Number or Numbers. 3 IMO hazard class or classes. 4 Names of manufacturers of goods, when known, or consignee or consignor. 5 Types of packages, including identification marks. Specify whether portable tank or tank vehicle, or whether vehicle or freight container or other cargo transport unit containing packages. Include official registration marks and numbers assigned to the unit. 6 An estimate of the quantity and likely condition of the goods. 7 Whether lost goods floated or sank. 8 Whether loss is continuing. 9 Cause of loss. T 1 Name, address, telex and telephone number of the ship s owner and representative (charterer, manager or operator of the ship or their agent). 60

74 Appendix 2 X 1 Action being taken with regard to the discharge and movement of the ship. 2 Assistance or salvage efforts which have been requested or which have been provided by others. 3 The master of an assisting or salvaging ship should report the particulars of the action undertaken or planned After the transmission of the information referred to above in the initial report, as much as possible of the information essential for the protection of the marine environment as is appropriate to the incident should be reported. That information should include items P, Q, R, S and X The master of any ship engaged in or requested to engage in an operation to render assistance or undertake salvage should report, as far as practicable, items A, B, C (or D), M, P, Q, R, S, T, U, X of the standard reporting format. The master should also keep the coastal State informed of developments. 3.4 Probability ofdischarge The probability of a discharge resulting from damage to the ship or its equipment is a reason for making a report. In judging whether there is such a probability and whether the report should be made, the following factors, among others, should be taken into account:.1 the nature of the damage, failure or breakdown of the ship, machinery or equipment; and.2 sea and wind state and also traffic density in the area at the time and place of the incident It is recognized that it would be impracticable to lay down precise definitions of all types of incidents involving probable discharge which would warrant an obligation to report. Nevertheless, as a general guideline the master of the ship should make reports in cases of:.1 damage, failure or breakdown which affects the safety of ships; examples of such incidents are collision, grounding, fire, explosion, structural failure, flooding, cargo shifting; and.2 failure or breakdown of machinery or equipment which results in impairment of the safety of navigation; examples of such incidents are failure or breakdown of steering gear, propulsion plant, electrical generating system, essential shipborne navigational aids. 61

75 Manual on Oil Pollution V: Administrative aspects MARPOL 73/78, AS AMENDED Protocol I Provisions concerning Reports on Incidents Involving Harmful Substances (in accordance with article 8* ofthe MARPOL Convention) Article I Duty to report (1) The master or other person having charge of any ship involved in an incident referred to in article II of this Protocol shall report the particulars of such incident without delay and to the fullest extent possible in accordance with the provisions of this Protocol. (2) In the event of the ship referred to in paragraph (1) of this article being abandoned, or in the event of a report from such a ship being incomplete or unobtainable, the owner, charterer, manager or operator of the ship, or their agent shall, to the fullest extent possible, assume the obligations placed upon the master under the provisions of this Protocol. Article II When to make reports (1) { The report shall be made when an incident involves: (a) a discharge above the permitted level or probable discharge of oil or of noxious liquid substances carried in bulk for whatever reason including those for the purpose of securing the safety of the ship or for saving life at sea; or * Article 8 (of MARPOL 73/78):Reports on incidents involving harmful substances: (1) A report of an incident shall be made without delay to the fullest extent possible in accordance with the provisions of Protocol I to the present Convention. (2) Each Party to the Convention shall: (a) make all the arrangements necessary for an appropriate officer or agency to receive and process all reports on incidents; and (b) notify the Organization with complete details of such arrangements for circulation to other Parties and Member States of the Organization. (3) Whenever a Party receives a report under the provisions of the present article, that Party shall relay the report without delay to: (a) the Administration of the ship involved; and (b) any other State which may be affected. (4) Each Party to the Convention undertakes to issue instructions to its maritime inspection vessels and aircraft and to other appropriate services, to report to its authorities any incident referred to in Protocol I to the present Convention. That Party shall, if it considers it appropriate, report accordingly to the Organization and to any other Party concerned. { Article II(1) incorporates the amendments adopted by the MEPC at its thirty-eighth session by resolution MEPC.68(38), which entered into force on 1 January

76 Appendix 2 (b) a discharge or probable discharge of harmful substances in packaged form, including those in freight containers, portable tanks, road and rail vehicles and shipborne barges; or (c) damage, failure or breakdown of a ship 15 metres in length or above which: (i) affects the safety of the ship; including but not limited to collision, grounding, fire, explosion, structural failure, flooding and cargo shifting; or (ii) results in impairment of the safety of navigation; including but not limited to failure or breakdown of steering gear, propulsion plant, electrical generating system, and essential navigational aids; or (d) a discharge during the operation of the ship of oil or noxious liquid substances in excess of the quantity or instantaneous rate permitted under the present Convention. (2) For the purposes of this Protocol: (a) Oil referred to in subparagraph (1)(a) of this article means oil as defined in regulation 1(1) of Annex I of the Convention. (b) Noxious liquid substances referred to in subparagraph (1)(a) of this article means noxious liquid substances as defined in regulation 1(6) of Annex II of the Convention. (c) Harmful substances in packaged form referred to in subparagraph (1)(b) of this article means substances which are identified as marine pollutants in the International Maritime Dangerous Goods Code (IMDG Code). Article III Contents of report Reports shall in any case include: (a) identity of ships involved; (b) time, type and location of incident; (c) quantity and type of harmful substance involved; (d) assistance and salvage measures. Article IV Supplementary report Any person who is obliged under the provisions of this Protocol to send a report shall, when possible: 63

77 Manual on Oil Pollution V: Administrative aspects (a) supplement the initial report, as necessary, and provide information concerning further developments; and (b) comply as fully as possible with requests from affected States for additional information. Article V Reporting procedures (1) Reports shall be made by the fastest telecommunications channels available with the highest possible priority to the nearest coastal State. (2) In order to implement the provisions of this Protocol, Parties to the present Convention shall issue, or cause to be issued, regulations or instructions on the procedures to be followed in reporting incidents involving harmful substances, based on guidelines developed by the Organization. 64

78 Appendix 3 Appendix 3 Lloyd s Standard Form of Salvage Agreement,

79 Manual on Oil Pollution V: Administrative aspects 66

80 Appendix 3 67

81 Manual on Oil Pollution V: Administrative aspects 68