In Marine Insurance P&I Club News 08/05/2017
While the number of oil spills has declined in recent years, there is a higher incidence of what experts call the “new pollution,” which needs to be tackled, and is also a business opportunity for marine insurance companies, sources said during Singapore Maritime Week late April.
According to industry estimates, maritime oil spills at the beginning of this decade averaged 2.5/year, down from 24.5 in the 1970s, 7.8/year in the 1990s and 3.3/year in the 2000s.
“Oil spills are decreasing while the non-oil related pollution incidents are on the rise,” a senior insurance executive said at one of the seminars during Singapore Maritime Week.
According to data from The International Tanker Owners Pollution Federation, or ITOPF, there are currently more non-tanker pollution related incidents in international waters than those related to tankers.
This is resulting in a changing role for the ITOPF, which is now attending to more incidents relating to ships that are not tankers.
Of the incidents attended by ITOPF over 2000-2014, a little of a third related to tankers, while 23% were of bulk carriers and 18% of containers.
Established in 1968, ITOPF has been providing its key service of emergency response to tanker owners since the 1970s. From 1999, this service was formally extended to the owners of other types of ship as well.
While many companies plan for spills of oil and chemicals, there are instances when containers or bulk carriers spill cargoes into the sea.
In 2013, a massive spill of molasses from a faulty pipe in the Honolulu Harbor killed thousands of fishes. The load was originally meant for a Matson container ship.
Last year, India’s National Green Tribunal, or NGT, imposed a heavy fine on the Delta Marine Shipping Company and Adani Enterprises Ltd. for causing damage to the marine environment.
This was in response to a petition after the sinking of Delta carrier MV RAK around 20 nautical miles off the coast of Mumbai while carrying over 60,000 mt of coal for Adani in 2011.
The vessel also contained around 290 mt fuel oil and 50 mt gasoil, on its voyage from Indonesia to Dahej in India’s Gujarat province.
According to maritime insurance professionals, instances of non-oil tanker spills in the past include a livestock carrier spill and a Brazilian dam collapse.
“The good part is that insurance covers are available for such risks of incidents which cause pollution,” said a Norway-based insurance executive involved in underwriting such covers.
The covers provide for liabilities, costs and expenses arising in consequence of the discharge or escape from a ship of oil or any other substance or the threat of such discharge, the executive said.
The fines imposed by a court or tribunal are also covered or are excluded, depending on the rules under which the insurance is taken, the executive added.
Transportation of hazardous and noxius substances, or HNS, by sea are governed by various regulations of the International Maritime Organization, or IMO, which is a specialized agency of the United Nations.
The organization is pushing hard for member states to ratify the HNS Convention of 2010, which covers the liability and compensation for damage in connection with the carriage of such substances by sea under the ‘polluter pays’ principle.
Last month, Norway became the first country to ratify the convention.
“The HNS Convention is the last piece in the puzzle needed to ensure that those who have suffered damage caused by HNS cargoes carried on board ships have access to a comprehensive and international liability and compensation regime,” IMO Secretary General Kitack Lim said in a statement after Norway’s ratification.
The number of ships carrying HNS cargoes is growing steadily with more than 200 million mt of chemicals traded annually by tankers and “we have to recognize that accidents can and do happen,” Lim said.
Entry into force of the convention requires ratification by at least 12 member countries, meeting certain criteria in relation to tonnage and reporting annually the quantity of HNS cargo received in that country.
Maritime insurance executives point out that the HNS Convention covers not only liquid substances carried in tankers but also hazardous and harmful materials and substances carried in packaged form or in containers and solid bulk materials defined as possessing chemical hazards.
It depends on the context and even an earlier protocol of IMO has given specific definition of the HNS, they said.
The evolution of the containers’ shipping segment has also resulted in a spate of incidents which if covered under insurance will keep ship owners in good stead, sources said.
“Container-based pollution implies that whatever they carry can be spilt into the sea,” the same Norway-based underwriter said.
Source: Platts
