IMPORTANCE OF MARPOL, LIABILITY & COMPENSATION CONVENTIONS IN THE CARIBBEAN Cayman Maritime Conference 2017 Grand Cayman Marriott Beach Resort. May 2, 2017
CONTENTS 1. INTRODUCTION 2. INTERNATIONAL FRAMEWORK GOVERNING VESSEL SOURCE POLLUTION 3. STATUS OF AND CHALLENGES TO IMPLEMENTATION 4. IMPORTANCE OF IMPLEMENTATION OF MARPOL, ETAL: 5. CONCLUSION
The peoples of the Caribbean are defined by the Sea whose shores they inhabit. In the rich diversity of cultures and nations making up the region, the one uniting factor is the marine ecosystem on which each ultimately depends. If that ecosystem is under threat, so are the livelihoods of millions of people. The economic activity of the Caribbean is based to a very great extent on the bounty of the Sea and the natural beauty which attracts visitors from around the world which in turn require the healthy functioning of complex physical and biological processes. The coral reefs and the seagrass beds, the white sand beaches and the fish shoals of the open ocean: these are natural capital assets whose loss or degradation has huge implications for the development of the region. (Professor John Agard, expert, Caribbean Sea Commission, University of the West Indies)
Shipping indispensable to Caribbean States By virtue of geographic location, experience heavier shipping traffic than warranted by trade alone A number of global shipping routes pass through the Caribbean via the Panama Canal A network of feeder ships also operate in the region supporting intra-regional trade
Figure 1: Ship traffic through the WCR
Between 2007/2008 average of 108,118 vessels movement recorded in Caribbean Ship types operating within the region: General cargo 33,777 Tanker - 18,817 Passenger - 13,813 Passing through the region via Panama Canal in 2011 Dry bulk - 25% Container 25% Tanker - 18%
Main pressures associated with shipping: Pollution by oil and hazardous or toxic substances from incidental, operational and illegal discharges; Air pollution through emissions and particulate matter from engine exhaust gases and cargo tanks which may be carried over long distances; Discharge of operational wastes from ships, including raw sewage and garbage (litter); Release of toxic chemicals used in anti-fouling paints and leaching of heavy metals from anodes; The introduction of non-indigenous organisms through ships ballast water and associated sediments, and fouling of ships hulls; Pollution and physical impact through loss of ships and cargo; and
MARPOL 73/78 Civil Liability Convention Fund 1992 Bunker Convention HNS OPRC
Annexes I and II which covers prevention of pollution from oil and noxious liquid substances carried in bulk respectively, are compulsory Annex III Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form Annex IV - Prevention of Pollution by Sewage from Ships Annex V - Prevention of Pollution by Garbage from Ships; and Annex VI - Prevention of Air Pollution from Ships.
It governs the design and equipment of ships Establishes a system of safety inspections and Requires states to provide reception facilities for ship generated wastes
Torrey Canyon tanker disaster which spilled over 31 million gallons of oil resulting in severe damage to natural resources and massive financial and economic costs. The key characteristics are: strict liability imposed on the registered owner of the ship coupled with limitation of liability channelling of liability compulsory insurance, and direct action against the insurer.
Supplementary to the CLC Represents a second tier of compensation Spreads liability Compensation for those suffering damage from oil pollution where CLC insufficient or unobtainable Supplementary Fund 2003
Adequate, prompt and effective compensation Damage suffered from spills of bunkers Covers damage on the territory including territorial sea and EEZ Does not cover Damaged caused by tankers Military/state owned ships used for non commercial purposes Ships > 1000GT to maintain insurance or other financial security
Modelled off the CLC and Fund Provides victim compensation for wide range substances Covers damage from spills, including risks of fire and explosion Recoverable loss include loss of life and personal injury and economic loss Tiered system Strict liability and Requirement for compulsory insurance
Table 3: Status of Ratification of Marine Pollution Conventions
WCISW REPORT: Lack or insufficiency of appropriate expertise on MARPOL 73/78 Low priority given to maritime legislation Procedure for drafting legislation centralized Weaknesses of maritime administrations Legal and administrative infrastructure required Resource constraints and challenged waste management capabilities
Prevention, Restoration & Compensation - MARPOL and Liability and Compensation Instruments Consequences of failure to Implement What we are protecting Socio - Economic Impacts
Stringent discharge criteria Waste reception facilities
Reduced exposure to accidental pollution from oil, hazardous and noxious substances Atlantic Empress Vista Bella
Regulate and control illegal discharges Enhanced ability to adapt to climate change Emissions from ships 2.2% of global in 2012 Caribbean contains over half the world SIDS More vulnerable to sea level rise
Regulate and control illegal discharges Enhanced ability to adapt to climate change Emissions from ships 2.2% of global in 2012 Caribbean contains over half the world SIDS More vulnerable to sea level rise
Reduced pollution from: sewage Garbage Oil, hazardous and noxious substances Caribbean as Special Area Annex V Waste reception facilities Cost Burdened domestic waste management system
Authority to require ships to carry the necessary liability insurance Tiered Compensation regime CLC - U$120 million Fund 1992-273 Supp. Fund 2003-1 billion
1992 Fund - contribution from importers 2003 Supplementary Fund: Deemed to have imported at least 1 million MT Authorities will need to contribute if actual MT below 1 million
Table 2: CARICOM States Contributing to the IOPC Fund in 2014
Points to note: CLC based on size of ship. Could be inadequate for small ships. Fund is irrespective of size ship Possible to benefit from Fund 92 even if no contribution made by state because imports of oil below 150,000 MT threshold Fund still provide compensation even if not possible to identify ship which cause damage However, without legislation may not receive any compensation, even if contributing!
Region a haven for sub-standard ships Increased exposure to Oil pollution and other hazardous and noxious substances Illegal discharges estimated that 5% to 15% of all large vessels discharge oil waste in sea Caribbean Princess fined US$40 million for dumping oily wastes in the sea Inability to access funding mechanisms available
Heavy reliance on the marine environment: Tourism Fisheries recreation
Employment 5% of labour force GDP Direct - US$393 million Indirect - US$ 1 billion
Ineffective implementation of MARPOL makes region a haven for sub standard shipping Lack of legislation hamper ability to enforce The inadequate and non-implementation of the CLC and the IOPC conventions creates vulnerability for region Region faces constraints in providing adequate PRF Cost Waste management
These challenges are formidable BUT.can the Region: Afford to lose its tourism income which accounts for some 14% of its GDP and impact over 2 million jobs? Survive the decimation of its fish stock which put some 5% of its collective work force out of employment and jeopardize its food security?