The UAE recently approved the accession to the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (the ‘Bunker Convention’), which has entered into force in the territory of the UAE on 23rd June 2021.
This is another step showing the dedication of the UAE to implement the IMO’s Liability and Compensation Regime and thus falling in line with other major maritime hub’s and to further international trade by Sea.
Below we will provide a brief explanation of the Bunker Convention, the implementation process and what this means for shipowners when calling UAE Ports.
1- What is “Bunker”?
According to the Preamble of the Bunker Convention, “Bunker Oil” is defined as “any hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil”.
The definition of Bunker Oil shall not be mixed with the oil definition under the Convention on Civil Liability for Oil Pollution Damage, 1969 (‘1969 Convention’). According to the 1969 Convention, ‘Oil’ means any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy diesel oil and lubricating oil, whether carried on board a ship as cargo or in the bunkers of such a ship.
2- What is the scope of the application of the Bunker Convention?
The Convention was adopted to ensure that adequate, prompt and effective compensation is available to parties who suffer damage caused by spills of oil when carried as fuel in ships’ bunkers.
In general, the Bunker Convention governs:
a- Loss or damage occurred out of the contamination caused by bunker oil; and
b- The costs of preventative measures are taken to prevent or minimize such damage.
3- What are the current national/international laws applicable to bunker pollution accidents in the UAE?
– For Bunker Oil pollution incidents, the UAE Courts will apply Federal Law No. 24 of 1999 for the protection and development of the environment (the ‘Environmental Law’), which does not provide full/ entire protection.
– For Oil pollution incidents, the UAE Courts will refer to the 1969 Convention, in addition to the Environmental law (where it is applicable).
4- Will the UAE benefit from ratifying the Bunker Oil Convention and the 1996 Protocol as amended?
The Bunker Convention imposes strict liability on the part of vessel owners and their insurers for losses caused by oil spills, which means there is no need to prove responsibility for the pollution, only that the pollution emanated from the vessel.
So far, there was no specified law applicable for damages caused by Bunker Oil Pollution, and the insurer was able to defer all liability to the shipowner, who unfortunately has often managed to walk away.
Hence, once the Contest of the Convention has been implemented in UAE laws, there will be legal security.
Also, the UAE will benefit from higher limits provided by the LLMC 1996 Protocol as amended since the UAE has become a member of the LLMC Protocol 1996 on 10th November 2020.
5- What are the types of vessels to which the Bunker Oil Convention is applicable?
The Bunker Convention applies to vessels carrying bunkers not covered by the CLC and IOPC Fund Conventions.
Consequently, if more than one party was potentially involved in causing the pollution, there would be joint and several liabilities if the original source was from the stricken vessel (Article 3 of the Bunker Convention).
6- What types of compensation may be payable by the shipowner or the insurer?
The Indemnity under the Convention extends to:
a- Impairment of the environment, which shall be limited to costs of reasonable measures of reinstatement undertaken or to be undertaken.
b- Loss of profit from such impairment; and
c- The cost of preventive measures and further loss or damage caused by preventive measures.
7- Are there any exclusions to the regime established by the Bunker Convention?
Article 3 of the Convention provides for possible defenses for shipowners to avoid liability for bunker oil pollution. According to Article 3, Para. 3, the shipowner should prove that:
a- The damage resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character; or
b- The damage was wholly caused by an act or omission done with the intent to cause damage by a third party; or
c- The damage 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.
Moreover, Article 3, para. 4 provides that the shipowner may be exonerated wholly or partially from liability towards a person who suffers damage resulted wholly or partially either from an act or omission that has been done with intent to cause damage by the person who suffered the damage or from the negligence of that person.
8- What are the required certificates and the formalities required for both UAE and foreign-flagged vessels?
From 23rd June 2021, the Bunker Convention regime is applicable in the UAE, and vessels thus need to carry a Bunker Certificate.
a- All UAE flagged vessels, including oil tankers over 1,000 gross tonnage, are required to obtain the Bunker Convention Certificate issued by the Federal Maritime Authority of UAE (previous Federal Transport Authority), under the auspices of the Ministry of Energy & Infrastructure.
It is important to note that the FMA will issue the certificate only upon presenting a valid blue card issued by an IG Club!
b- From 23rd June 2021, in order to enter UAE waters, all foreign-flagged vessels must hold a valid Bunker Convention Certificate issued by its flag or a flag which is a member-state to the Bunker Convention.
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