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HNS Convention to Enter Into Force in November 2027
The global maritime liability regime for ships carrying hazardous and noxious substances is set for a major change when the HNS Convention enters into force on 29 November 2027, introducing a uniform international system for liability, compulsory insurance and compensation following HNS incidents at sea.
The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea will cover a broad range of cargoes, including certain oils, chemicals, liquefied gases and packaged dangerous goods.
BIMCO has welcomed the long-awaited development, describing the Convention as an important addition to the existing international liability regimes covering oil pollution and other maritime risks.
HNS Convention Creates a Uniform Liability Framework
At present, incidents involving hazardous and noxious substances can fall under different national laws, regional regulations and general maritime limitation regimes.
The HNS Convention is designed to provide a more consistent international framework.
Once it enters into force, the regime will introduce strict shipowner liability, compulsory insurance or other financial security, and access to an international compensation fund.
This framework is intended to provide clearer arrangements for compensation when hazardous or noxious substances carried by sea cause damage.
Unlike regimes focused primarily on oil pollution, the scope of HNS-related damage is considerably broader.
Covered incidents may involve pollution, fire, explosion, toxicity, personal injury and property damage.
Two-Tier Compensation System Provides Up to 250 Million SDR
A central feature of the HNS Convention is its two-tier compensation structure.
The first tier places liability on the registered shipowner, backed by compulsory insurance or another form of financial security.
If the compensation available under the shipowner's liability is insufficient, or compensation is otherwise unavailable, a second tier can be provided through the HNS Fund.
Combined compensation available under the Convention may reach 250 million Special Drawing Rights (SDR) per incident.
The system therefore establishes both a direct shipowner liability mechanism and an additional international compensation layer for qualifying incidents.
Chemicals, Gases and Packaged Dangerous Goods Are Covered
The Convention applies to a wide range of hazardous and noxious substances transported as cargo by sea.
Depending on their classification and how they are carried, these can include certain oils, bulk chemicals, liquefied gases and packaged dangerous goods.
Accurate cargo information and classification will therefore become particularly important when determining whether cargo falls within the HNS regime and what requirements apply.
The Convention will be especially relevant to vessels carrying covered substances to or from ports located in States that are parties to the Convention.
Thousands of Ships Could Face Certification Requirements
The regulatory impact could extend across a large part of the international fleet.
There is no general minimum vessel tonnage threshold for the regime, meaning certification requirements could potentially apply to a broad range of ships involved in relevant trades.
Industry bodies have estimated that tens of thousands of vessels could require certificates before the Convention takes effect.
For shipowners and operators, preparations will therefore involve more than simply reviewing liability limits.
Insurance arrangements, vessel certification, cargo documentation and trading patterns may all need to be assessed before November 2027.
Shipowners and Charterers Should Prepare for New Requirements
The period before implementation will be important for shipowners, operators, charterers and other companies involved in the carriage of hazardous and noxious substances.
Businesses will need to understand how the Convention interacts with existing insurance arrangements and whether vessels engaged in relevant trades require new certification.
Charterparty and contractual arrangements may also require attention as responsibilities connected with cargo information, insurance and HNS compliance become clearer.
For companies involved in dangerous goods transportation, accurate identification and documentation of cargo will remain particularly important because application of the regime depends partly on the classification of the substances being transported.
BIMCO said it is monitoring developments surrounding implementation, certification, insurance arrangements and potential contractual implications and plans to provide further guidance as practical details become clearer.
HNS Convention Brings Major Change to Maritime Liability
The entry into force of the HNS Convention on 29 November 2027 will fill a significant gap in the international maritime liability framework.
By combining strict shipowner liability, compulsory financial security and the HNS Fund, the regime will establish a more structured approach to compensation following incidents involving hazardous and noxious cargoes.
With potentially tens of thousands of vessels affected, shipowners, operators, charterers and cargo interests have more than a year to assess certification, insurance, documentation and contractual requirements before the new regime takes effect.
