After Wakashio, Is The Bunker Convention Fit For Purpose?

• Published date: 18 August 2020
• Subject Matter: Environment, Environmental Law, Clean Air / Pollution
• Law Firm: Clyde & Co
• Author: Clyde & Co LLP

What has happened in the Indian Ocean provides confirmation that increased payouts cannot come soon enough, and governments of coastal states should enact any available increased limits in their own jurisdiction without delay.

As the ecological and environmental disaster that has resulted from the grounding of Wakashio unfolds in Mauritius, questions are already being raised as to how this could have happened.

But thoughts will ultimately turn towards compensation for those who are cleaning up the mess and have suffered the consequences of pollution from the vessel's bunkers.

The owners have been quoted as saying that they will respond 'in good faith' to any damages 'in accordance with applicable law'. However, this may not be as comforting as it first seems.

As Wakashio is not a laden tanker, the well-established compensation regime under the Civil Liability Convention 1992 ' as topped up if required by the IOPC Fund Convention 1992 ' will not apply, and any compensation claims seem likely to be dealt with under the 2001 Bunker Convention.

The Bunker Convention applies to vessels carrying bunkers not covered by the CLC and IOPC Fund Conventions.

It provides for mandatory third-party insurance cover, and allows claims of third parties for clean-up expenses and other losses caused by pollution from bunkers to be made directly against the insurers.

The convention also imposes strict liability on the part of the vessel owners and their insurers for such losses, which means there is no need to prove responsibility for the pollution, only that the pollution emanated from the vessel.

Consequently, if more than one party was potentially involved in causing the pollution, there would be joint and several liability if the original source was from the stricken vessel (Article 3 of the convention).

The owners of the vessel are, under Article 6 of the convention, entitled to limit their liability in accordance with the Convention for Limitation of Liability for Maritime Claims 1976 or as amended.

Many countries have now enacted the 1996 Protocol, which significantly increases the limitation fund that was originally applied in the 1976 Limitation Convention.

The limit is based on the gross tonnage of the vessel, which in this case appears to be 101,932 tonnes.

That means that currently under the 1976 Limitation Convention the limit for third-party claims including costs of prevention and clean up following the grounding of Wakashio would be around $18m, whereas under...