Convention on Liability and Compensation for Damage in Connection with Carriage of Hazardous and Noxious Substance by Sea, 2010

NCOP Economic and Business Development

16 August 2016
Chairperson: Mr B Nthebe (ANC; North West)
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Meeting Summary

The Department of Transport requested the Committee to approve the ratification of the Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances (HNS) by Sea, 2010, which aimed to ensure adequate, prompt and effective compensation for damage to persons and property.

The HNS Fund was modelled on similar fund regimes, such as the International Oil Pollution Compensation (IOPC) Fund. Compensation payments made by the HNS Fund would be financed by contributions levied on persons who had received, in a calendar year, contributing cargoes after sea transport in a member state, in quantities above the thresholds laid down in the HNS Convention.

The compensation covered loss of life or personal injury, loss of or damage to property outside the ship carrying HNS, and economic losses, costs of preventive measures, clean-up and reasonable measures of reinstatement of the environment, damage caused outside the territory and the territorial sea of any state, and damage caused by HNS in the territory (including territorial sea) of a state party.

Members asked whether the country was well equipped, protected and capacitated to deal with the Convention. They also stressed the need for other SADC countries to ratify it, as this would protect the country from pollution in future.

The Committee approved the ratification of the Convention, and also adopted the minutes of its meetings on 10 and 11 May, with minor amendments.

Meeting report

Briefing by the Department of Transport

Mr Dumisani Ntuli, Acting Chief Director: Maritime Policy, Department of Transport (DoT), said the purpose of the presentation was to request the Committee to approve the ratification of the Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances (HNS) by Sea, 2010.

The HNS Convention had been adopted in May 1996 under the International Maritime Organization (IMO), and had been amended by a Protocol in 2010. It aimed to ensure adequate, prompt and effective compensation for damage to persons and property. HNS cargoes in this Convention included bulk solids, liquids (including persistent and non-persistent oils), liquefied gases such as liquefied petroleum gases, and liquefied natural gases and packaged substances. Some bulk solids, such as coal and iron ore, oil pollution damage from tankers, damage from bunker fuel oil, and damage caused by radioactive materials were, however, excluded.

The Convention established a two-tier regime in a single treaty to provide compensation for loss or damage to persons, property and the environment arising from the carriage of HNS by sea. The first-tier of compensation was paid by the ship owner or his/her insurer. The second tier of compensation was paid by the HNS Fund when the ship owner’s liability was insufficient to cover the cost of damage, was exonerated from liability, or was financially unable to meet his/her obligations.

The HNS Fund was modelled on similar fund regimes, such as the International Oil Pollution Compensation (IOPC) Fund. It was administered by a secretariat, headed by a director.

Compensation payments made by the HNS Fund would be financed by contributions levied on persons who had received, in a calendar year, contributing cargoes after sea transport in a member state, in quantities above the thresholds laid down in the HNS Convention. For each contributor, the levies would be in proportion to the quantities of the HNS received by that person each year. Cargoes in transit were not considered to be contributing cargo unless they were imported, consumed or transformed.

HNS Fund’s Compensation payments would be made post event, and the compensation may be spread over several years in the case of a major incident.

The compensation covered loss of life or personal injury, loss of or damage to property outside the ship carrying HNS, and economic losses, costs of preventive measures, clean-up and reasonable measures of reinstatement of the environment, damage caused outside the territory and the territorial sea of any state, and damage caused by HNS in the territory (including territorial sea) of a state party.

South Africa was a state party to Conventions dealing with prevention of oil pollution from ships, and not to pollution emanating from other sources, such as HNS.

South Africa was a state party to the International Convention for the Prevention of Pollution from Ships (MARPOL), the Civil Liability Convention (CLC) and the IOPC Fund, and these Conventions have been domesticated.

It was recommended that the Select Committee on Economic and Business Development approve the ratification of this Convention.

Discussion

Mr W Faber (DA; Northern Cape) thanked the Department for their presentation, and noted that the issue of oil spillage used to be on its own. He then asked if it would now fall under the HNS Convention.

Mr E Makue (ANC; Gauteng) asked if the country was well protected in terms of any other spillage that was not covered in the Convention. Was the government well capacitated to monitor and ensure that this protocol would be adhered to? If not, how could this capacity be built or improved?

Ms M Dikgale (ANC; Limpopo) wanted to know how the Convention worked, and asked if it could be applied to the road transport being used in Limpopo, for example.

Mr Makue asked the position of other Southern African Development Community (SADC) countries on this Protocol -- in particular Angola, Namibia and Mozambique.

Mr Faber sought clarity on clause 5.3 of the Convention.

Mr S Mthimunye (ANC; Mpumalanga) asked about the ‘contributions levied on persons who have received, in a calendar year…’ Were member states liable to contribute to this fund, and if so, how much was it per financial year?

Mr Ntuli, referring to whether oil spillage was covered by the Convention, answered that any pollution caused by oil spillage was covered by the IOPC. South Africa had ratified the IOPC Fund in 2005, and this covered any incident of oil pollution. This Convention looked mainly at HNS cargoes. The HNS Fund was structured along the same lines as the IOPC Fund, to which the country was a party.

Regarding the capacity of the country to monitor and ensure that this protocol would be adhered to, SA was not a party to the Convention yet. The first obligation for the country was to domesticate and subsequently develop appropriate laws. SA had historic capacity, because the HNS Fund was similar to the IOPC Fund, which it had already ratified.

It was not the state that paid the contributions, but the importers of cargoes. The methodology used by SA was that the oil importers would provide oil import reports to South African Revenue Services (SARS) and they would be forwarded to the IOPC Secretariat, on the basis of which they would generate invoices to the country. The oil importers would be billed by SARS for the amount they should pay, and South Africa would then pay to IOPC Fund Secretariat. This was the methodology, but it would depend on whether the country wanted to adopt this method or develop a new one. The Department advised the country to adopt this method. If this method was adopted, all that was required of South Africa was to inspect the vessels coming into the country’s ports to confirm whether they were HNS compliant, i.e. whether they had an HNS insurance certificate. It would also put an obligation on the owners of cargoes to make sure that carriers of their cargoes were HNS compliant.

On the position of other SADC countries, he said that they always tiik their cue from South Africa. None of them had ratified the Treaty. It was a new Treaty which took long to ratify.

With regard to road transport, what ended up on the road must have passed through the port if it was an import. The treaty did not cover other modes of HNS transportation.

‘Contributions levied on persons who have received, in a calendar year…’ meant importers of HNS cargoes, and they were liable to pay the levies to the HNS Fund.

Mr Sipho Dibakwane, Transport Policy Analyst, DoT, said all road operators were expected to be registered and adhere to the rules of what to carry, and the quantity to carry. There was a fine if one failed to adhere to the rules.

Mr Ntuli referred to the exclusive economic zones, said that the ocean was divided into four zones. The first was from the beach up to 200 miles, beyond that was the territorial sea with rights and limitations, the next was the continental zone with certain rights, and the last was the open sea.

Mr Makue said that there were plans by Transnet to provide repair facilities on both the east and west coasts of South Africa. What would happen when a ship was stranded at sea and wished to make use of the repair facilities while it was heavily leaking oil? What was the assurance that this would not put the country on a disadvantage?

The chairperson asked if there was capacity building going on.

Mr Ntuli said the country was in the process of writing a comprehensive maritime policy. This policy would ensure certainty moving forward.

The repair facilities were mainly an opportunity by the country to attract ship repair business, and the country would not be disadvantaged. The Department had a standby oil pollution patrol that ensured that potential ship casualties were detected in time. It had been able to deal with oil pollution incidents in the past. It had also partnered with the Department of Environment to discuss future measures to combat oil pollution, so that in any event the country would be well protected.

Ms Dikgale moved acceptance of the ratification, and Mr Makue seconded.

Mr Makue recommended that the Department should develop a comprehensive policy. It should work with other countries in the SADC region to ratify the Convention, because any pollution from Angola, for example, would affect some parts of this country. The Department should also inform the Committee of its meeting, to help them with their oversight visits.

Adoption of minutes

Mr Makue moved that the minutes of the meeting of 10 May 2016 be adopted. This was seconded by Ms Dikgale, with amendments.

Ms Dikgale moved that the minutes of the meeting of 11 May 2016 be adopted, and this was seconded by the Mr Mthimunye.

Adoption of the third term Committee schedule was proposed by Ms Dikgale, seconded by Mr Faber, and adopted by the Committee.

The meeting was adjourned.
 

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