China's oil pollution laws are well worth
watching
Ship owners and operators trading in Chinese waters
face an extensive set of new legal and regulatory requirements governing their
roles and responsibilities in oil pollution incidents.
China's Prevention and Control of Marine Pollution
from Ships Regulation was implemented on 1st March 2010. It dovetails with the
Marine Environment Protection Law of the People's Republic of China, laying
down the principles and outlining the country's marine pollution legal system.
However, the detailed requirements under the Regulation have yet to be
revealed.
Chinese ministries have other supplementary
regulations in the pipeline, such as the management and funding of a ship oil
pollution compensation fund. A judicial guidance rule on compensation for oil
pollution damage and limitation of liability, which would supplement the
existing limitation of liability regime in the China Maritime Code, is being
drafted by the Supreme Court.
Owners and operators wishing to keep a watching brief
on developments to assess their impact when requirements emerge can refer to
the UK P&I Club's July Legal Briefing. Helen Huang, Claims Executive in the
UK Club's Hong Kong office, has reviewed the Regulation's main provisions and
summarised key articles, with the support of Legal Director Chao Wu.
These cover a range of pollution-related incidents
involving spillage of oil, oily mixture and other poisonous hazardous
substances from ships or from ship-related operations. They encompass discharge
and reception of oil pollutants; dumping waste; oil pollution response planning
and clean-up arrangements; reporting and emergency handling of pollution
incidents; investigation and compensation; supervision of loading, lightening
and discharging of polluting hazardous cargoes; and penalties for
contravention.
Ship-induced pollution incidents are classified as
extremely severe, very severe, severe and general, depending on the amount of
oil spilled and the direct economic loss to those affected by the pollution.
Owners and operators have emergency response plans in place to prevent and
control pollution incidents. Existing Shipboard Oil Pollution Emergency Plans
(SOPEPs), as required by MARPOL, are understood to suffice.
A compulsory insurance regime for all ships (except
those less than 1,000 gt and not carrying oil cargoes) will cover claims
arising from oil pollution damage. This should provide the implementing
legislation which will give effect to the insurance provisions of the 2001
Bunkers Convention and the 1992 International Convention on Civil Liability for
Oil Pollution Damage (CLC), both of them ratified by China.
A domestic Ship Oil Pollution Compensation Fund is to
be funded by contributions from receivers of persistent oil cargoes which have
been transported by sea to a Chinese port. This new fund reflects the fact that
China is not a State party to the 1992 International Convention on the
Establishment of an International Fund for Compensation for Oil Pollution
Damage (IOPC Fund), although the latter does apply to the Hong Kong Special
Administrative Region.
Chinese domestic coastal trading ships used to carry
little or no liability insurance. Collisions sometimes led to claims being
directed against ocean-going vessels which were insured. Compulsory insurance
for domestic coastal trading ships over 1,000 gt or carrying oil in bulk and
the establishment of a domestic compensation fund will be welcomed by both
claimants and operators of oceangoing vessels.
Ships carrying polluting and hazardous cargoes in bulk
and other ships above 10,000 gt must pre-contract with an approved Chinese oil
spill response organisation (OSRO) before entering into a Chinese port. A list
of approved OSROs has yet to be published.
Oil tankers' liability limitation is the same as the
scheme provided in 1992 CLC. Other ships may limit liability in accordance with
the Chinese Maritime Code. According to the Regulation, clean up costs incurred
by the Maritime Safety Administration should be compensated in priority to
other claimants. This may conflict with the CLC and the Bunkers Convention
which lays down that all admissible claims are to be treated equally and
without priority for government claims.
The Regulation makes no reference to direct action
against insurers. As per PRC Special Maritime Procedure Law, oil pollution
damage claims may be brought directly against the insurers or other persons
providing financial security for owners' liability. This means compulsory
liability insurers for oil pollution damage can be sued directly under Chinese
law and the CLC and Bunkers Convention.
Currently, the MSA issues CLC certificates and Bunker
certificates for Chinese flag ships against blue cards from the P&I clubs.
The Maritime Safety Administration will enforce the
Regulation and supervise and manage the prevention and control of marine
pollution by ships and relevant ship operations in internal and territorial
waters, the contiguous zones, the Chinese exclusive economic zone and
continental shelf, and all other sea areas under PRC jurisdiction.
The Maritime Safety Administration will enforce the
Regulation and supervise and manage the prevention and control of marine
pollution by ships and relevant ship operations in internal and territorial
waters, the contiguous zones, the Chinese exclusive economic zone and
continental shelf, and all other sea areas under PRC jurisdiction. The briefing
warns that while the Regulation sets up the general framework of Chinese oil
pollution law, "it cannot resolve all issues initially. There are difficult
long term questions, such as the title to sue, the admissibility of
compensation claims, methods of investigation and burden of proof, which remain
to be clarified, either by supplementary regulations or rules of judicial
practice."
" The UK P&I Club's Legal briefing 'Chinese
Marine Pollution Law' follows four advisory circulars since November 2009.
Materials can be downloaded from
www.ukpandi.com/ukpandi/resource.nsf/Files/150710LegalBrief/$FILE/150710LegalBrief.pdf
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