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Zovko, I --- "The International Liability and Compensation Regimes Relating to Vessel-Sourced Pollution Damage to the Southern Ocean Marine Environment: Overcoming Inertness in International Law" [2005] NZYbkIntLaw 11; (2005) 2 New Zealand Yearbook of International Law 281


Ivana Zovko[*]

I. Introduction

Between 1991 and 2004, at least thirty-three pollution disasters involving tanker ships occurred across the globe, with compensation claims for environmental damage amounting to billions of US$. This is evident on the example of the three largest disasters in the past fifteen years, shown in diagram 1.

Already the busiest shipping ports are suffering from heavy transport congestion[1] while the world merchant fleet and sea-borne trade continue to grow steadily.[2] The number of substandard and aging vessels remain alarmingly high,[3] as does the percentage of the world fleet on open registry - 47.2 percent at the end of 2002.[4] Now more than ever, there is a need to address the problem of vessel-sourced pollution with a comprehensive regulatory response of global proportions.

The international community and the maritime transport industry continuously strive to resolve the present day and future environmental concerns in maritime traffic, however the main contributors to the frequency of vessel-sourced pollution remain without an adequate resolution. This article will address the foremost two of these contentious issues:

• lack and inadequacy of international liability and compensation regimes relating to vessel-sourced pollution damage;
• problems in implementation and enforcement of, and compliance with, international maritime treaty law referring to environmental liability.

To begin with, the quantitative and qualitative difference between the treaties regulating pollution prevention as opposed to those establishing or referring to reparation is overwhelming in the international maritime law domain. States remain unwilling and unable to compromise on the issues of liability and compensation despite the statistics indicating the enormous clean up costs pursuant to ship-sourced pollution. In reality, the only comprehensive and effective reparation regime concerning vessel-sourced pollution in place is the one referring to incidents involving ships carrying persistent oil as cargo.[4] This is due to the magnitude and multitude of financial interests involved in the sea-borne carriage of oil,[5] and the strength of the oil and shipping industry lobbies. Several other treaties establishing reparation regimes have been negotiated, but are not yet in force, nor are they as comprehensive as the regime in place for tanker oil pollution.[6]

Moreover, unlike damage to persons or property pursuant to pollution, pure environmental damage[7] is often overlooked in environmental liability regimes. Harm to the environment is either excluded from the definition of compensable environmental damage altogether, or considerably limited in scope. In addition, none of the international maritime treaties envisages compensation for the costs of clean up and restoration of pure environmental damage inflicted to areas beyond national jurisdiction, in particular the high seas.[8] Effectively, vessels polluting the high seas marine environment are not subject to any international or domestic fine or sanction.

Furthermore, even when there exists a consensus concerning a particular maritime rule or regulation, the treaty development and enforcement process is unreasonably slow, often taking between 5 - 8 years between the adoption of a treaty and its coming into force.[9] States are also battling the problems of defiant shipowners and operators who seem to benefit from non-compliance with environmental regulations as the costs of fines rarely outweigh the compliance costs.

Finally, a comprehensive regulatory framework insuring reparation for vessel-sourced pollution damage is imperative in marine regions of specific oceanographic or ecological conditions such as the Southern Ocean, where any environmental damage may be potentially irreparable, hence the costs of clean up and restoration are almost un-quantifiable. Accordingly, the Southern Ocean[10] was chosen as a case study for this article since it is representative of both national maritime zones and the high seas, as well as being governed under global, regional and national environmental regimes. Namely, apart from the relevant general treaty law, the Southern Ocean enjoys protection from marine pollution under a number of regional instruments - the Antarctic Treaty[11] and the 1991 Environmental Protocol to the Antarctic Treaty[12] specifically.

This article outlines and reviews the present international and regional regimes dealing with liability and compensation in relation to vessel-sourced pollution damage in the Southern Ocean. It also examines the relationship and potential hierarchy between the various international instruments regulating marine pollution in the said region, in particular the interaction between the Environmental Protocol to the AT and global treaties. Finally, this article probes the causes for slowness and lack of proactive response in international treaty making, treaty implementation and enforcement processes. Special emphasis is placed on the problem of the overall lack of an international regime for the reparation of marine pollution damage on the high seas.

II. Vessel-Sourced Marine Pollution of the Southern Ocean

A. Marine Pollution Caused by Ships

Marine pollution has come to be one of the central issues in international environmental protection and preservation of the world’s ocean and sea areas.

The most authoritative definition of the pollution of the marine environment is the one established in the 1982 Law of the Sea Convention (UNCLOS):[13]

The introduction by man, directly or indirectly, of substances or energy into the marine environment, including estuaries, which results or is likely to result in such deleterious effects as harm to living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the sea, impairment of quality for use of sea water and reduction of amenities.[14]

Marine pollution incidents caused by ships are commonly defined as:[15]

an event involving the actual or probably discharge into to the sea of a harmful substance, or effluents containing such a substance.

Vessel-sourced pollution includes both accidental spills and intentional discharges. The most serious immediate consequences of pollution are still associated with the spillage of oil pursuant to marine transport. However, contrary to the general opinion, it is not the accidental spillage of oil from tanker ships that poses the greatest threat of ecological harm: [16]

the illegal discharge of oil into the sea through routine operations is equal to over eight times the Exxon Valdez oil spill or over 48 times the 1997 Nakhodka spill off the coast of Japan - every year.

Apart from oil, transport of various hazardous substances carried in packaged forms, or noxious liquid chemicals carried in bulk, also have the potential for environmental catastrophes. The International Maritime Organisation (IMO) warns that over fifty percent of goods carried in dry cargo ships, including chemical tankers, are potentially dangerous.[17] Moreover, sea-borne accidents involving radioactive matter, though rare, still occur. They may be pursuant to the carriage of radioactive waste and/or radioactive matter on board vessels, or the sinking of nuclear powered ships or man-made space objects.[18]

Finally, it is only in the past fifteen years that a regulatory response was initiated to tackle the long-time proven detrimental effects of:

• dumping of sewage and garbage from ships, in particular plastic;[19]
• introducing of non-native organisms into pristine marine environments through ships’ ballast waters release;[20]
• harmful substances used as anti-fouling systems for ships’ hulls.[2]

These pollutants are less “interesting” to the maritime transport industry and States, given that their effects on the environment are not necessarily instant. They are not easily detectible, and more importantly they do not involve large financial risks such as those intrinsic to transport of crude oil or petroleum products.

B. The Southern Ocean

All of the above categories of marine pollution may potentially occur in a pristine marine environment such as that of the Southern Ocean. Even more so, given the severity of the polar climate and the sensitivity of its physical environment, dumping of sewage and garbage, air pollution and noise pollution[2] originating from ships pose a greater environmental threat in the Southern Ocean than they ordinarily would. Regulating vessel-sourced pollution in this region is further complicated by the harsh polar conditions which only allow for clean up operations to be undertaken during the five month long summer season (November - March). The vastness of the Southern Ocean makes it almost impossible to patrol and detect pollution and polluters.[22] Consequently, costs of clean up and reinstatement of the affected marine environment would prove to be much higher than with regard to an incident of similar proportions in other marine areas.[23]

The Southern Ocean has become particularly prone to sea-borne pollution in the past 15 years considering the boom in the polar tourism industry[24] and the growing number of un-seaworthy illegal fishing vessels in the region.[25] Moreover, a notable number of these fishing and tourism vessels are registered with States of open registry, or flag-States unknown.[26] This implies lower standards of safety of shipping, disregard for environmental precaution, and unavoidable problems in international adjudication often requiring “piercing the corporate veil.”[2] In addition, a team of independent scientists has recently determined that one of the most environmentally dangerous scenarios in the Southern Ocean involves a ship sinking, breaking up and releasing its bunkers (ship’s fuel) or cargo fuel in a particularly sensitive marine area.[2]

However, the danger from marine spills in the Southern Ocean does not come from their frequency, but from the severity of the potential impact on the marine environment. Only a few serious pollution incidents caused by sea-going vessels have occurred in the Southern Ocean, mostly involving supply and tourist vessels, or pollution from an unknown origin.[28] The most notable oil pollution incident is the sinking of the Argentinean supply and tourist vessel Bahia Paraiso which spilled some 830,000 litres of diesel fuel and lubricants in 1989.[29] Claims relating to this incident amounted to US$ 3.3 million for the initial costs of clean up, totalling US$ 9 million for all claims - initial and secondary clean up, mitigation and reinstatement of the affected marine environment.[30] That being said, many tourist vessels have found themselves in distress in the Southern Ocean due to rough seas, pack ice, icebergs or mechanical malfunctioning, though luckily no oil, or other pollutants have thus far been reportedly spilled from them.[31] Moreover, there exists no accurate data as to the number of fishing vessels involved in illegal discharges of oil or other pollutants given the widespread IUU fishing in the region.[32]

III. International Liability and Compensation Regimes Referring TO VESSEL-SOURCED POLLUTION

International law of marine pollution draws from all of the traditional sources of international environmental law:

a) Legally binding instruments:

Treaty law

Customary international law

General principles of civilised nations

Judicial decisions

Writings of eminent publicists

b) International soft law:

Given the broadness of the topic, this article will solely review international treaty law without prejudice to the importance of other international rules on liability and responsibility relating to vessel-sourced pollution. Apart from global treaty law for environmental governance of the Southern ocean, regional instruments will also be considered. National environmental laws of the Southern Ocean coastal States will not be included in this overview as this would go well beyond the limits of this article.

However, before commencing with a treaty law analysis, it is necessary to review the various regimes competing for environmental governance of the Southern Ocean, and the contemporary regulatory chaos subsequent to the unresolved legal status of this region.

A. The Southern Ocean - Matters of Jurisdiction, Sovereignty and Regulation

1. The Legal Status of the Southern Ocean

The preliminary question to consider with regard to any legal claim for compensation for vessel-sourced pollution damage is to identify the legal status of the marine region where the pollution incident or its effects occurred. Indeed, it is the identification of this status that ultimately determines the applicability thereto of various regulatory instruments, as well as being a pre-requisite for resolving conflict of laws matters in the process of adjudication of marine pollution torts. For instance, international treaties concerning vessel-sourced marine pollution predominantly envisage only the possibility of reparation for pure environmental damage when it affects the marine environment of a sovereign State, and not the high seas.[33] Therefore, it is imperative to define the sovereign status of each section of the Southern Ocean.

The Southern Ocean is currently divided by the 60º south parallel into two politically and administratively diverse regions:

• Antarctic Southern Ocean - southwards of latitude 60ºS;
• Sub-Antarctic Southern Ocean - north of latitude 60ºS as far as the Antarctic Convergence. [34]

The controversy lies in the Antarctic Southern Ocean given that the legitimacy of the claims to territorial and maritime sovereignty in this region is contested by all States other than the claimant States themselves.[35 ]As a result, the claimants hold that the Antarctic Southern Ocean incorporates coastal State maritime zones, while the rest of the international community deems this entire area the high seas. This polarity of opinions was transformed into a constructive disagreement in the Antarctic Treaty (AT) that guarantees the inviolability of the already asserted claims to sovereignty, while at the same time allowing the non-claimant States parties to oppose the said claims.[36] The AT therefore successfully facilitates a forum for political dialogue between two fundamentally opposed groups of States, eventually yielding a network of legal instruments assimilated into a regional legal regime - the Antarctic Treaty System (ATS).[37] Conversely, claims to sovereignty in the sub-Antarctic Southern Ocean are not disputed, hence this region does not suffer jurisdictional uncertainties characteristic to the area south of latitude 60º S.[38]

In light of the above, the current network of applicable legal regimes to the Southern Ocean follows the dual interpretation of the validity of the Antarctic claims, as well as the division into the sub-Antarctic and Antarctic regions. The outcome is the matrix portrayed in diagram 2.

As long as the legal status of the Antarctic Southern Ocean remains ambiguous, it will be impossible to determine the plurality of environmental instruments applicable thereto, as this will be left to the discretion of the relevant judicial and administrative bodies.

2. Uniform Regulation of the Southern Ocean

Currently, three international legal regimes overlap and interact in the Southern Ocean:

• ATS as the regional source of law;
• General international law and;
• Domestic laws of the Antarctic and sub-Antarctic claimant States.

The ATS agreements as well as certain global treaties envisage special environmental regulation solely with regard to the marine area south of latitude 60°S which represents a fraction of the geographically and ecologically uniform entity of the Southern Ocean.[39] One must note that the 60° south parallel is a political boundary denoting the scope of application of the Antarctic Treaty. The Southern Ocean in scientific terms includes both the sub-Antarctic and Antarctic regions extending from the Antarctic continent as far north as the Antarctic Convergence. Given that the Antarctic Convergence is an unsettled natural line, the coordinates of the Convergence as set under the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR)[40] are commonly employed. Subsequently, though the present partition of the Southern Ocean cannot be ignored, uniform environmental regulation of this whole ocean area should remain a prerogative.

‘The CCAMLR boundary more closely aligns with the Antarctic ecosystem than other Antarctic agreements, an aspect that is particularly important to conservation considerations.’[41]

B. International Treaty Law Analysis

The following treaty law analysis reviews global and regional multilateral agreements that establish liability and compensation regimes or refer to issues of liability and compensation in relation to marine environmental damage caused by ships to the Southern Ocean.[42] This overview of global treaty law will follow the standard categorisation of transboundary “vessel-sourced pollution”:[43]

• Oil when carried as cargo and bunker oil pollution;[44]
• Hazardous substances;
• Carriage of hazardous waste;
• Carriage of noxious liquid substances in bulk and harmful substances in packaged form;
• Pollution from radioactive matter;
• Discharge of sewage and garbage;
• Release of ballast water and sediments;[45]
• Harmful anti-fouling systems.

Dumping of waste at sea[46] as well as atmospheric pollution[47] are special types of marine pollution falling outside the notion of vessel-sourced pollution and will not be considered at this point.[48] Similarly, the focus is placed on liability of private entities, hence the legal framework for the invocation of State responsibility will not be examined.

The analysis below includes determining whether a treaty:

• Regulates vessel-sourced pollution;
• Envisages reparation for pure environmental damage;
• Allows for compensation of pure environmental damage on the high seas.

It further seeks to identify treaty rules specifically referring to liability and compensation, including any of the following:

• Liability of private entities - civil, quasi-penal, and criminal;
• Standard of liability;
• Compensable pure environmental damage;
• Limitations and exemptions from liability;
• Time limits for court action;
• Rules on international civil procedure and conflict of laws (applicable law, adjudicative jurisdiction, enforcement and recognition of foreign judgements and orders).

1. Framework Conventions

The principal framework for the development of international liability and compensation regimes for marine pollution from ships is provided for in the treaties regulating vessel-sourced pollution and the law of the sea as general categories - MARPOL and UNCLOS respectively. UNCLOS is often referred to as the constitution for the oceans and seas as it attempts to regulate the totality of issues concerning all marine areas, including marine pollution.[49] The fundamental rules in relation to the prevention of marine pollution from ships are laid down in Annexes I - VI to MARPOL. Moreover, MARPOL Annexes I, II, V and VI implement the system of “special areas” developed by the IMO by introducing especially stringent environmental standards concerning the safety of shipping and discharge of pollutants in areas of particular oceanographical and ecological conditions, or traffic related circumstances.[50] The Antarctic Southern Ocean has already been designated as a special area under Annexes I, II and V. [51]

Neither MARPOL nor UNCLOS envisage substantive rules on environmental liability and compensation relating to vessel-sourced pollution, but they call for their establishment under other international agreements and domestic law.[52] The greatest contribution of these two treaties to the development of the law of marine environmental liability lies in the fact that they provide a platform for compelling State parties to develop effective domestic environmental liability regimes with the possibility of the invocation of State responsibility when such regimes are not in place.

In addition, one must not overlook the work of the International Law Commission (ILC) on the topic of ‘International liability for injurious consequences arising out of acts not prohibited by international law’. The first segment of this project has been finalised in 2001 with the adoption of ‘Draft Articles on the Prevention of Transboundary Harm from Hazardous Activities’.[53] These Draft Articles impose obligations on States with regard to prevention of transboundary harm from hazardous activities not prohibited under international law. The ILC has also undertaken to develop rules on international liability for injurious consequences caused by the above activities. These are still in early stages of preparation.[54] Nonetheless, it can already be asserted that the future ILC rules on international liability, as do the Draft Articles on the Prevention of Transboundary Harm, will only envisage liability and compensation for environmental damage to another State’s territory, and not the high seas. [55] Furthermore, the ILC solely attributes liability in relation to environmental damage resulting from hazardous activities involving a foreseeable risk of causing transboudary environmental harm.[56] Given that the vast area of the Southern Ocean bears the high seas status, and most of the pollution incidents in this region will be the result of unpredictable weather and harsh polar climate, ILC Articles on international liability will hold little relevance as means of insuring compensation for marine pollution damage to the Southern Ocean.

2. Global Treaties

(a) Oil pollution

Matters of liability and compensation for oil pollution coming from ships are governed under three international instruments: the 1992 Liability Convention;[5] the 1992 Fund Convention;[5] and the 2001 Bunkers Convention.[5]

(i) Oil when carried as cargo

The 1992 Liability and Fund Conventions[5] propose a comprehensive multi-tiered reparation regime in relation to loss or damage pursuant to discharge or escape of oil from laden and non-laden tankers, including spills of bunker oil from such ships.[58] The 1992 Liability Convention represents the first tier, while the second and the third tier of this regime are provided for in the 1992 Fund Convention and its Protocols.

Both Conventions have the same scope of application as they apply to pollution incidents wherever they may occur, including the high seas.[59] Compensable pure environmental damage pursuant to pollution[60] is restricted to impairment of the environment of the territorial sea (TS) and the exclusive economic zone (EEZ), or the equivalent maritime area,[61] therefore no remedies are envisaged for contamination of the high seas marine environment.[62]

Moreover, compensation for the impairment of the environment is limited to the costs of reasonable measures of reinstatement actually undertaken or to be undertaken, and the costs of preventive measures and further loss or damage caused by preventive measures.[63] Both claims regarding reinstatement and those concerning preventive measures are limited by the vague condition of “reasonableness”. The International Oil Pollution Compensation (IOPC) Funds 1992 and 1971[64] have overcome this problem by coming forth with uniform interpretation of the terms “pollution damage” and “reasonableness” in the 1971 and 1992 Fund Claims Manuals developed to facilitate processing of claims for compensation brought against either of the two Funds.[65] According to the 1992 Fund Claims Manual, compensable pollution damage comprises - costs of clean-up operations on shore and at sea; costs of any damage pursuant to the undertaken clean up operations; disposal of collected material such as oily residues; costs of environmental studies and environmental damage - reinstatement of damaged environment quo ante.[66]

Furthermore, the shipowner is identified as the primary liable party in the 1992 Liability Convention, representing the first tier of the liability regime. Shipowner’s liability is to be strict and limited in proportion with the tonnage of his ship. Should there be more ships involved in a pollution incident, the shipowners involved will be liable jointly and severally.[67] In addition, the Convention requires owners of vessels over 2000 GT to maintain insurance as a collateral of any potential liability.[68]

The second tier to the regime is the IOPC Fund established under the 1992 Fund Convention, which activates when adequate compensation is not available under the 1992 Liability Convention.[69] Amount of compensation available under the 1992 Fund considerably exceeds that set with regard to shipowner’s liability. Contributions to the 1992 Fund come from any person[70] who has received in one calendar year more than 150,000 tonnes of crude oil and fuel oil[71] in a State Party to the 1992 Fund Convention.[72] The 1992 Fund may also be exempt from paying compensation under specific circumstances.[73]

In 2005 a third tier will be added to this compensation scheme with the coming into force of the Protocol to the 1992 Fund Convention that establishes an ‘International Oil Pollution Compensation Supplementary Fund’.[74] The Supplementary Fund is to be financed through the contributions of oil receivers under the same criteria as set by the 1992 Fund Convention. Additionally, a minimum contribution from a member State is required when the minimum aggregate quantity of contributing oil received in that State is less than 1 million tonnes.[75] The minimum contribution provision is an important breakthrough in the current system in which member States receiving less than the minimum prescribed quantity of oil per year were exempt from contributions toward the 1992 Fund, but were still able to benefit from the compensation scheme. Moreover, the Supplementary Fund more than doubled the level of compensation available.

Table 3 demonstrates the progression of the three-tiered compensation regime by comparison of the maximum amounts available at each tier.

As for time limits for court action, claims have to be brought against the shipowner and its insurers, and/or the 1992 Fund and its insurers, no later than three years after the date on which the damage occurred, or after maximum 6 years since the date of the incident.[76] Jurisdiction to decide claims against the shipowner is attributed to the courts of the States parties in the territory of which the pollution incident occurred.[77] Actions against the Fund are to be brought before the courts having jurisdiction to hear claims against the shipowner.[78] Recognition and enforcement of judgments is guaranteed in all States parties once a judgment becomes final.[79]

The final contentious matter characteristic of the 1992 Liability Convention is nominating environmental disasters as one of the available exemptions from shipowner’s liability. Exemption on the basis of ‘damage resulting from a natural phenomenon of an exceptional, inevitable and irresistible character’[80] is inappropriate in view of the Southern Ocean given that its harsh climate, unpredictable weather and the presence of ice formations are bound to be the main contributors to the majority of the sea-borne environmental emergencies occurring in this region.

Finally, one must again be reminded that the elaborate regime such as the above one may well not apply to a large portion of the Southern Ocean given that it does not cover environmental damage per se to the high seas. It would be interesting to observe whether States parties to the 1992 Liability and Fund Conventions, many of which are also members to the ATS agreements,[81] would seek an ad hoc solution should a grave pollution incident involving a tanker ship occur in the Southern Ocean high seas, this possibly also including maritime zones of the Antarctic Claimant States. However, it is a highly unlikely scenario that a tanker ship would indeed choose to use the Drake Passage and sail the rough seas of the polar south, so it would be inappropriate to speculate at this point as to the outcome of such a situation.

(ii) Bunker oil

The 2001 Bunkers Convention is concerned with pollution resulting from the escape or discharge of bunker oil, without prejudice to oil pollution incidents falling under the jurisdiction of the 1992 Liability and Fund Conventions.[8] Much of its scope of application is tailored after the 1992 Liability Convention, so it does not envisage compensation for pure environmental damage on the high seas,[8] and solely allows for compensation of reasonable measures of reinstatement and the preventive measures when impairment of the environment is compensable. [83]

Bunkers Convention only purports one tier of liability - strict liability of the shipowner. However, it expands the notion of shipowner as the primary liability party beyond the person of the registered owner of the vessel so as to include the bareboat charterer, manager and operator of the ship.[84] In the case of more than one person being liable, liability is to be joint and several.[85] Liability is limited according to the amounts set in the LLMC Convention and its Protocol.[86] Shipowner may be exempt from liability under the same circumstances as set in the 1992 Liability Convention.[87] Bunkers Convention also requires compulsory insurance in relation to ships over 1000 GT.[88] The right of compensation under the Convention extinguishes three years from when the damage occurred, and six years from the date of the pollution incident.[89] Courts of the States parties in the territory of which pollution damage was caused, or preventive measures have been taken, would have jurisdiction to entertain claims concerning bunker oil pollution incidents.[9] The Convention also insures recognition and enforcement of final judgments in all States parties.[9]

(iii) Other treaties regulating pollution by oil

Apart from the abovementioned treaties, a number of other international agreements and supplementary legal instruments have been negotiated with regard to oil pollution. However, none of them establish liability and compensation regimes. These are:

• International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties[9]
• International Convention on Oil Pollution Preparedness, Response and Co‑operation[91]
• Annex I to MARPOL[92]

(b) Pollution by hazardous substances

(i) Noxious liquid substances in bulk and harmful substances in packaged form

Several legal instruments regulate pollution in connection with the carriage of hazardous and noxious substances (HNS):

• 1996 HNS Convention[93]
• 2000 Protocol on Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious Substances [OPRC-HNS Protocol][94]
• Annex II to MARPOL[95]
• Annex III to MARPOL[96]
• International Convention for the Safety of Life at Sea [SOLAS][97]

Apart from the HNS Convention, none of the above-nominated instruments refers to liability and compensation. The HNS Convention establishes an elaborate reparation regime concerning pollution damage incidental to marine carriage of noxious liquid substances in bulk and harmful substances in packaged form. Specifically, the HNS Convention applies to oil, without prejudice to oil spills falling under the 1992 Liability and Fund Conventions; noxious and dangerous liquid substances; liquefied gasses; liquefied substances with a flash point not exceeding 60ºC; dangerous, hazardous and harmful materials and substances carried in packaged form and solid bulk materials with chemical hazards.[98] Convention also governs pollution by residues pursuant to carriage of any of the above HNS, apart from those in packaged form.[99] Similar to the language of the oil pollution conventions, the HNS Convention explicitly excludes from the notion of compensable pollution damage environmental harm to the high seas marine environment.[100]

Liability for pollution damage includes loss or damage by contamination of the environment wherever it may occur, also comprising risks of fire and explosion, loss of life or personal injury, loss of or damage to property and costs of prevention measures and further loss pursuant thereto.[101]

Moreover, the Convention’s two tiered compensation system was modelled after the 1992 Liability and Fund Conventions. Primary liability lies with the person or persons registered as the owner of the ship.[102] Shipowner’s liability is strict, and limited in the manner outlined in table 4, with the maximum amount payable by the shipowner per incident reaching 100 million Special Drawing Rights (SDR), which is approximately 154 million US dollars.[103]

The Convention introduces a system of compulsory insurance and insurance certificates so as to strengthen shipowner’s liability.[104] Shipowner may also be exempt from liability under specific circumstances, including for “natural phenomenon of an exceptional, inevitable and irresistible character.”[105]

The second tier to the regime is the HNS Fund funded by contributions levied on persons in the States parties who receive more than 20,000 tonnes of specified HNS cargo per calendar year.[106] Compensation is available under the Fund only:[107] when liability does not arise for the shipowner; when the damage exceeds shipowner’s liability; and/or when the shipowner is unable to meet the financial obligations arising from his liability, or the compulsory insurance and certificates he holds are insufficient.

In any of the above instances, compensation would be available under the HNS Fund up to the maximum of 250 million SDR per incident (US$ 386.31 million), almost tripling the amount a shipowner may be required to compensate (US$ 154 million).

The time limit for filing a court action against either the shipowner or the HNS Fund is extended in comparison to the oil pollution conventions, with the maximum being set at 10 years from the date of the pollution incident.[108] Rights to compensation against the Fund or the shipowner will extinguish within three years from when the person suffering the damage knew or ought to have known of the damage and the identity of the polluter.[109]

The Convention separately regulates matters of jurisdiction in case of actions brought against or by the Fund, and claims against the shipowner. An important novelty is the specifically defined jurisdiction of courts in respect of actions against the shipowner when an incident caused damage outside the territory of a States party.[110] For all other damage, courts of the State party where the damage occurs may entertain jurisdiction.[111] Actions against the Fund may be brought before the courts competent to hear cases against the shipowner.[112] The Convention also guarantees recognition and enforcement of final judgements in all States parties when the judgment is reached in accordance with the Convention.[113]

(ii) Hazardous waste

The Basel Convention provides for a framework for the development of a comprehensive liability and redress regime set up in its 1999 Basel Liability Protocol.[114] This Protocol specifically aims to insure adequate and prompt compensation for damage resulting from the transboundary movement of hazardous wastes and other wastes and their disposal including illegal traffic of such waste.[115]

Liability may be strict and fault based. Strict liability is attributed to a number of actors involved in the process of transport and disposal of hazardous waste at the various stages of the process. Accordingly, under specific circumstances strictly liable may be the notifier,[116] the exporter [117] and the importer[118] during the period before the waste comes into possession of a disposer, and the disposer[119] is liable thereafter. Among others, exemption from liability is possible for the above persons in case of a natural disaster of “exceptional, inevitable, unforeseeable and irresistible character”, as was the case with other liability conventions.[120] Strictly liable persons are defined separately in the process of re-importing of wastes. [121]

Unlike strict liability, any person may be liable for damage that the said person caused or contributed to by non-compliance with the Basel Convention or by wrongful, intentional, reckless or negligent acts or omissions.[122]

While fault based liability is unlimited, liability of persons defined in the Protocol as potentially strictly liable, may be limited in different classes as illustrated in table 5, depending on the size of the shipment and using the measurement “unit of account”.[123]

Liability is further strengthened by compelling persons strictly liable under the Protocol to keep insurance and other financial guarantees during the period of liability.[124] As for court action, time limits are set at 10 years from the date of the incident, and 5 years from the date the claimant knew or ought to have known of the damage.[125] The Protocol also nominates the law of the forum as the applicable law where matters of substance or procedure are not governed under the Protocol.[126] Jurisdiction over court actions concerning incidents covered by the Basel Convention is attributed to the courts of the contracting party where damage or incident occurred, or where the defendant has his habitual residence or his principal place of business.[127] Finally, the Protocol also calls for mutual recognition and enforcement of final judgments in any contracting party.[128]

(iii) Radioactive matter

Only two treaties refer to issues of liability and compensation for vessel-sourced pollution by radioactive matter: the 1962 Nuclear Ships Convention;[129] and the 1971 Nuclear Convention.[130]

Carriage of nuclear material[131]
The 1999 International Code for the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and High-Level Radioactive Wastes on Board Ships[132] is the central treaty regulating certain aspects of carriage of ultra-hazardous nuclear material by sea. It does not refer to issues of liability and compensation at all. Another treaty to consider is the 1971 Nuclear Convention.[133] This international agreement solely defines categories of persons who will be exonerated from liability for nuclear incidents in the field of maritime carriage of nuclear material. Specifically, the Convention exonerates any operator of a nuclear installation who is liable for such damage under either the 1960 Paris Convention on Third Party Liability,[134] the Vienna Convention on Civil Liability for Nuclear Damage,[135] or under national law.[136]
• Nuclear-powered ships
The 1962 Nuclear Ships Convention applies to ships equipped with a nuclear power plant. It regulates loss or damage which:[137]

[a]rises out of or results from the radioactive properties or a combination of radioactive properties with toxic explosive or other hazardous properties of nuclear fuel or of radioactive products or waste.

While it is aimed at prescribing liability in relation to loss of life and personal injury, the Convention does envisage liability also for any other loss, damage or expense to the extent that the applicable national law so provides.[138] This opens the possibility that in some instances the Convention may provide a platform for attributing liability for pure environmental damage. Moreover, no limits were established as to the place of the incident or its effects, therefore environmental damage to the high seas marine environment may also be covered.

Absolute and exclusive liability is to be attributed to the operator of a nuclear ship for an incident involving nuclear fuel or radioactive products or waste produced in such a ship.[139] Some defences and exemptions from liability are also envisaged therein.[140] The maximum limit for liability was set at 1,500 million francs per incident, exclusive of certain expenses.[141] The Convention requires the operator to maintain insurance and a guarantee by the licensing State. A complex set of time limits for claiming liability of the operator is also envisaged - 10 years from the date of the incident, with the possibility of prolonging it if the operator’s insurance permits; 20 years since the theft or abandonment of the fuel, radioactive products or waste; and three years under the domestic law from when a claimant knew or ought to have known of the damage or the person liable.[142] The Convention also nominates courts of competent jurisdiction to entertain cases arising thereunder.[143] However, this is when one has to stop with examining this treaty given that in most likelihood it will never come into force, as it has not thus far - 43 years since its negotiations. The most probable cause for this is that it submits to its liability regime nuclear powered warships.

• Others
As for other treaties in the domain of damage pursuant to activities related to nuclear matter, the 1963 Vienna Convention does not cover nuclear damage caused by ships whether in the sense of sea-born carriage of radioactive matter,[144] or a ship operating by means of nuclear power.[145] Both cases are expressly excluded from the definition of “nuclear installations” identified in the Convention as the primary source of nuclear damage.[146] Similarly, the 1960 Paris Convention also does not regulate liability for damage pursuant to nuclear powered ships or the carriage of nuclear material,[147] thus it is not relevant to this discussion.

(c) Pollution from sewage and garbage

Discharge of sewage from ships at sea is primarily regulated under Annex IV to MARPOL,[148] while Annex V to MARPOL establishes a regime for the prevention of marine pollution by garbage.[149] Neither Annex IV nor V contains provisions on liability and compensation whatsoever.

(d) Pollution by ballast water and sediments and by harmful anti-fouling systems

The 2004 Ballast Water Convention[150] aims to help prevent and minimise the significant and harmful changes in the marine environment by transfer of harmful aquatic organisms and pathogens through the control and management of ships’ ballast water and sediments.[151] Prevention of environmental harm from anti-fouling systems is regulated under the Anti-fouling Convention.[152] Both treaties focus on the many complex technical aspects of the marine pollution originating from the two respective sources described therein, completely omitting rules on liability and compensation. Moreover, neither of the two Conventions has to date come into force.

(e) Other relevant treaties

Another important maritime treaty to consider is the 1976 LLMC Convention and its 1996 Protocol.[153] The Convention establishes uniform rules on limitation of liability for maritime claims as a general category, thus possibly including claims for environmental damage pursuant to vessel-sourced pollution. Neither the Convention or its Protocol explicitly addresses limitation of liability for environmental damage per se, however such possibility is open through extensive interpretation of what the Convention defines as ‘[c]laims in respect of other loss resulting from infringement of rights other than contractual rights occurring in connection with the operation of the ship.’[154]

The provisions of the Convention do not apply to:[155]

• Claims in relation to oil spills falling under the 1969 CLC, including the 1992 Liability and Fund Conventions;
• Claims against the shipowner of a nuclear powered ship for nuclear damage, or with regard to any other nuclear damage subject to other conventions of limitation of liability;
• Claims for salvage or contribution in general average;
• Claims by servants of the shipowner and salvor;
• Claims subject to any international or domestic instruments that prohibits limitation of liability.

The limits set in the 1976 LLMC Convention are for example employed in the Bunkers Convention as limits of liability of the shipowner.[156] The contribution of this Convention to the network of international liability and compensation regimes is one of technical and supplementary nature.

3. Regional Instruments

Antarctic Treaty System (ATS) is the regional regime in place for environmental governance of the Antarctic continent and the Southern Ocean south of latitude 60°S, the so-called Antarctic Treaty Area (ATA). As the pillar of the ATS, the 1961 Antarctic Treaty (AT) establishes postulates for peaceful governance of the Antarctic region, in particular its dedication to scientific research and primacy of environmental concerns over any beneficial use.[157] However, a comprehensive set of environmental rules and regulations specifically tailored for the ATA was developed in 1991 in the form of Environmental Protocol to the AT.[158] Annexes I,[159] III,[160] and IV[161] to the Protocol specifically regulate various aspects of vessel-sourced pollution of the Southern Ocean marine environment and the Antarctic continent.[162] However, neither the Environmental Protocol nor its current Annexes refer to matters of liability and compensation in relation to environmental damage, though art 16 of the Protocol explicitly calls for the establishment of an environmental liability regime thereunder. Such an “Antarctic environmental liability regime” is currently being negotiated in the form of Annex VI to the Protocol.[163]

(a) Annex or annexes on environmental liability - an anatomy of negotiations

It has already been over ten years since the matter of environmental liability was placed on the agenda of the Antarctic Treaty Consultative Meetings (ATCM), and a consensus has not been reached as yet. The negotiations were characterised by the clash between two contradicting approaches which polarised the negotiating States[164] - the comprehensive environmental liability regime versus a limited approach focusing on liability with respect to environmental emergencies. The two approaches were materialised in two main opposing proposals for an Annex on environmental liability - the comprehensive version as envisaged in the Chairman’s Eight Offering produced by Wolfrum in 1998 and the 1996 US Proposal on liability for emergency response actions.[165] A breakthrough in the negotiating process came with the proposal for a “third way” by the latest and the contemporary chair of the ‘Working Group on Liability’, MacKay. MacKay was seeking to fuse the solutions laid down in the 1996 and the 1998 Proposals. However, his 2003 and 2004 Proposals are evidently closer in scope to the US limited approach, as they solely address liability in relation to environmental emergencies.[166] This is understandable considering that the priority at this stage of the negotiations is to reach any type of consensus. MacKay maintains that the idea of a comprehensive liability regime is not relinquished, but simply postponed.[167]

(b) The 2004 Chairman’s Draft - “Liability Arising from Environmental Emergencies” [1]

The 2004 Draft of Annex VI regulates compensation for costs of response actions in case of environmental emergencies taking place in the ATA. Liability is established with regard to reimbursement of costs of emergency response actions undertaken by parties other than the operator who had the obligation to perform the response actions initially. The Draft Annex proposes strict liability of the operator for costs of response actions that had been taken or will be undertaken in the future. Operator’s liability is further strengthened by the obligation to hold insurance or other financial guarantee. Exemptions from liability are also envisaged.

Moreover, the compensation regime purports to be two tiered, the first instance being the operator, and the second tier being a fund to be maintained and administered by the Antarctic Treaty Secretariat.[1] Compensation would be available from the Fund in cases when the identity of the operator is unknown, or when the operator is exempted from liability, unable to cover liability, or when costs exceed the adequate limit of liability. Limitation of operator’s liability is also foreseen, and is to be established in line with the limits set in the 1992 CLC with regard to ships carrying oil as cargo, and the LLMC for all other maritime claims, as long as the ships involved have insurance cover pursuant to a Certificate of Entry issued in accordance with the IMO guidelines. For all other vessels currently suggested minimum limits on compensation are 10 million US$ per environmental emergency. Furthermore, court actions are to be brought against the operator before the courts of the State party where he/she is incorporated or has his or her principal place of business or habitual place of residence. In case of a State operator, any outstanding matters arising under the Annex, including claims for compensation, are to be resolved in accordance with the dispute resolution procedures established under the Environmental Protocol.[169] The proposed time limit for raising claims is three years from when the claimant knew or must have known of the identity of the operator, and in no case longer than 15 years after the commencement of the response action.

(c) Problems in regional regulation of vessel-sourced pollution

Several characteristics inherent in the very nature of the ATS, in particular in the context of vessel-soured pollution, question its effectiveness in the domain of marine pollution prevention. The ATS is restricted in the following manner:

• Scope of application limited to the Antarctic Treaty Area (ATA);
• Limited number of States parties;[170]
• Exclusion of third States;
• Uncertain future given that its status quo maintaining policy concerning the Antarctic claims is threatened by the assertive demonstrations of sovereignty of the Antarctic claimant States, such as:
- Australia’s proclamation of an EEZ off the coast of the Australian Antarctic Territory (AAT) in 1994;
- Australia’s submission of an extended Continental Shelf claim before the Commission on the Limits of the Continental Shelf (CLCS) with respect to all of its land territory, including the Antarctic continent and off-lying islands;[171]
- Legal action brought before the Federal Court of Australia in October 2004 against a Japanese company under Australian domestic law[172] and international law for whaling in the Australian Whale Sanctuary located in the EEZ adjacent to the AAT. [173]
• None of the largest open registry States are currently parties to the AT and/or the Protocol, hence any liability regime established under the ATS would not be applicable to almost 50% of world fleet flying the flags of open registry States.[174]

All of the above listed circumstances suggest that however comprehensive an environmental liability regime established under Annex or Annexes to the Environmental Protocol may be, there exists a need for a more global set of rules on reparation to be developed.

IV. Treaty Parallelism South of the 60° South Parallel -
Battle Of Regimes

This article has established that the unresolved sovereign status of the Antarctic Southern Ocean hinders the application of the majority of global legal instruments in this region.[175] Furthermore, concerns were also expressed as to the adequacy of labelling the ATS the central source of marine environmental law for this region. However, this discussion would not be complete without reviewing the nature of interaction between the various global and regional legal instruments regulating the Southern Ocean. Clearly, a subject-matter overlap exists between various global treaties dealing with marine pollution issues and the Environmental Protocol, in particular its Annex IV on prevention of marine pollution. Before examining this legal relationship, one must characterise the ATS agreements as a source of international law. The particular issue to consider is whether the Environmental Protocol and other Antarctic agreements can, apart from being binding on their States parties, create rights and obligations for third States[176] either by having acquired customary law status, or by the AT having been deemed an “objective regime”.[177] If the Environmental Protocol were to indeed become universally binding for all third States and the international community as a whole, its relationship with global treaty law would be considerably different than as an ordinary treaty law instrument. However, this discussion will focus on examining the phenomenon of treaty parallelism, since a debate on the third party effects of the ATS raises controversial issues that go beyond the limits of this article.[178]

A. Environmental Protocol and Global Treaty Law

Defining the relationship between global and regional treaties governing the same subject matter inevitably poses the question of whether there exists a hierarchy of legal sources in the international domain. Conflicting poles of thought surround this issue, though the presumption seems to be against the possibility of hierarchically organising sources of international law in treaties themselves, but also treaties and international custom.[179] This brief assessment will limit itself to the possible implications of the treaty parallelism in the domain of marine environmental governance of the Southern Ocean.

As a general rule, a treaty will apply between its parties, and in accordance with the area of application defined within. Some issues however arise when the same subject matter is governed under different treaties that also predominantly share the same States parties. This is the case of the Environmental Protocol and a number of global treaties regulating vessel-sourced marine pollution. However, the relevance of harmonisation of overlapping treaties was recognised prior to the negotiations of the Protocol, in Recommendation XV-4 on the Prevention, Control and Response to Marine Pollution adopted in 1989 at the XV ATCM in Paris.[1] This Recommendation encourages the AT Consultative Parties to take measures within their competence necessary to ensure compliance by all their vessels engaged in or supporting Antarctic operations with the relevant provisions of a number of specifically nominated IMO Conventions. These include the London Dumping Convention and MARPOL.[1] This Recommendation also calls onto the AT Consultative Parties to become parties to the IMO Conventions enumerated therein.[181] It therefore promotes a collective basis for the application of international maritime law in the Antarctic Southern Ocean by engaging all parties to the AT.

For the most part, the Environmental Protocol adopted the principles established in Recommendation XV-4, but it solely explicitly defined its relationship with MARPOL, and no other IMO convention. Moreover, the Protocol ignored the issue of liability and compensation altogether as it did not acknowledge any of the global treaties dealing with reparation for marine pollution damage, nor did it envisage any new rules on liability and compensation.[182] Consequently, no conflict presently exists between global and regional treaties in the domain of reparation for pure environmental damage in the Antarctic Southern Ocean since no regional environmental liability regime exists, and the global treaties are predominantly not applicable due to the unresolved legal status of this region. Still, the relevant global treaties may arguably apply when implemented in the domestic laws of the Antarctic claimants and when the claimants extend application of them to their respective Antarctic territories. [183]

Nonetheless, some commentary must be given to the relationship between the Environmental Protocol and MARPOL as a model for any future regulation of an overlap between the Protocol and global treaty law. This is relevant in the context of marine environmental liability given the prospect of an Annex on environmental liability to the Protocol being negotiated. The Protocol explicitly refers to MARPOL in article 14 of Annex IV asserting that ‘nothing shall derogate from the specific rights and obligations under MARPOL of States parties to both MARPOL and the Annex’. This provision must be interpreted in light of the Vienna Convention on the Law of Treaties that lays down rules for the relationship between treaties that regulate the same subject matter. Article 14 corresponds to article 30(2) of the Vienna Convention which asserts that ‘a treaty that specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail.’ Consequently, as a general rule, should the applicable provisions of these two treaties be in conflict, MARPOL would prevail. However, this is not an absolute contention[184], and will apply differently to various States parties to both agreements. In cases where only a number of States parties to MARPOL are also parties to the Environmental Protocol, ‘[i]n cases where only a number of States parties to MARPOL are also parties to the Environmental Protocol, the treaty to which both States are parties governs their mutual rights and obligations.’[185] Accordingly, for States solely parties to the Environmental Protocol, the Protocol will have the priority.[186] Article 13 of the Protocol should also be considered as it calls for all States parties to continuously review provisions of Annex IV following ‘any amendments or new regulations adopted under MARPOL 73/78.’ In this sense, even contracting parties that are not parties to MARPOL are implicitly bound by it to an extent. However, should any interstate dispute arise concerning vessel-sourced pollution incidents in the Southern Ocean, application of MARPOL or the Environmental Protocol’s dispute settlement procedures will depend on the characterisation of a particular dispute as falling under one or the other agreement. [187]

V. Inertness in International Law:
Negotiations, Enforcement and Compliance

Fundamental reasons for the lack of comprehensive international rules for insuring adequate and prompt compensation for environmental damage should be sought in the processes of the development, ratification and enforcement of multilateral environmental agreements (MEAs).

A. Treaty-Making for the Marine Environment

The first hurdle to overcome in international marine environmental law-making is the lack of will of maritime States and the relevant industries to develop rules on liability and compensation. This issue is closely related to the initial choice of institutional modes and approaches employed in treaty making, in particular the choice between the hard law and soft law character of obligations contained within the MEAs.[188] Presently, the majority of the MEAs lack any stronger compliance mechanisms, or rules on liability and redress. The same is evident with regard to maritime treaties regulating vessel-sourced pollution, where only nine treaties refer to liability and compensation for pollution damage with four of these not yet in force. More importantly, the four treaties in question regulate the most potentially dangerous activities for the marine environment - carriage of hazardous wastes, bunker oil pollution, nuclear ships operation, and the carriage of hazardous and noxious substances. [189]

On the other hand, the reluctance of States to adhere to liability and compensation regimes does not also imply lack of resolve to contribute towards compensation. This was evidenced in the Antarctic environmental liability debate and the sinking of Bahia Paraiso in the Southern Ocean. Specifically, joint emergency response action in relation to the Bahia Paraiso pollution incident was undertaken, and the clean up performed and paid for by countries other than the flag-State.[190] No action was subsequently taken against the flag-State in question. Therefore, States are willing to financially contribute towards the compensation of environmental damage outside the context of liability. Even the ILC in its work on the topic of international liability for transboundary harm embraces the “soft” terminology by using the expression “allocation of loss” rather than resorting solely to concepts of liability and responsibility.

This is not surprising given that States will always prefer to establish domestic environmental liability regimes in place of the international ones, where no consensus is necessary. However, considering the number of FOC countries, and the continued non-compliance by shipowners, one must question the appropriateness of a domestic solution. In particular, flag-States appear to be lacking the capability and resolve to address the problem of vessel-sourced pollution by establishing comprehensive and effective domestic liability and compensation regimes. The problem of inadequate domestic regimes was specifically addressed in the OECD Report on non-compliance in international law of marine pollution.[191] The report emphasises that non-compliance with environmental regulations is still profitable for the shipowner and operator as ‘nearly half of vessels inspected [by port authorities] violate at least one aspect of the international environmental rules concerning the stowage and disposal of oil.’[192]

The level of fines available under domestic laws are simply not high enough to have a deterrent effect. Subsequently, development of international rules and regulations on liability and compensation must remain a prerogative.

B. Implementation and Enforcement

Another problem contributing to the lack of international mechanisms insuring compensation for vessel-sourced pollution damage is the unnecessarily long period between the negotiations of maritime treaties and their ratification.[193] These delays are often attributable to the slow domestic administrative procedures which can be the result of a change in diplomatic representatives responsible for a particular treaty, or because a more pressing issue has taken priority in the relevant governmental department. Moreover, States often wait for one another to ratify a treaty, carefully choosing the time frame for it to come into force. Smaller States rely on the guidance of strong maritime States and FOC countries.

Further issues arise when domestic legal systems do not correspond with the adopted international rules and regulations. This problem is particularly evident among developing countries as they often sign or adhere to treaties without having the funds or the know-how to implement and enforce them. For example, a treaty such as the Ballast Water Convention is particularly technically demanding and difficult to translate into domestic maritime and admiralty laws, and even more so to impose on operators and shipowners.[194] This problem could be minimised with greater co-operation between the developing States and international bodies capable of providing the necessary support such as the IMO Technical and Co-operation Committee and various departments within UNEP. These problems in adopting and enforcing technically demanding treaties are not exclusive to developing States, but affect the whole of the maritime industry. Unsurprisingly, such treaties do not establish comprehensive multi-tiered liability and compensation regimes, given that they are expensive to perform even in their regulatory and preventive segments.

VI. Conclusion

This article illustrates the apparent need for further developments in the area of international maritime law concerning reparation for marine environmental damage per se and pollution damage on the high seas in particular. The present system of international liability and compensation regimes in relation to vessel-sourced pollution suffers many shortcomings:

• Overall lack of regulatory response to a number of categories of pollution incidents;
• Inadequacy of the international agreements currently in force;
• Delayed coming into force of the negotiated treaties.

In the specific example of the Southern Ocean, this is further aggravated by the unresolved sovereign status of the area south of the 60° south parallel that hinders the application of the relevant global treaties to this region. Further consideration also needs to be given to future interactions between the relevant global and the ATS treaty law. This article has identified a number of objectives that ought to be integrated in any present and future marine environmental legal instruments or policy documents tailored for the Southern Ocean. These include advocating:

• Uniform environmental governance for the whole of the Southern Ocean;
• Development of technical infrastructure necessary to implement the IMO marine pollution conventions;
• Adapting the application of global treaty law to the specific political and jurisdictional context of the Antarctic Southern Ocean;
• Development of a comprehensive Antarctic environmental liability regime;
• Better co-operation between the ATS and the IMO, UNEP, as well as other intergovernmental organisations and NGOs dealing with marine pollution issues.

Finally, apart from the obvious need to fill the regulatory loopholes in global, regional and domestic legal systems, the greatest test for international law on liability and compensation for marine pollution damage remains finding the best approach in international law making so as to insure compliance. The challenge here does not lie in the right choice between a comprehensive and narrow approach to developing environmental liability regimes. The aim is to produce international agreements relevant in substance and comprising strong compliance mechanism, but at the same time being enforceable.


Table 1

Selected Major Oil Spills

Vessel / year
of incident
EXXON VALDEZ (1989, Alaska)
(1999 France)
(2002 Spain)
Clean up costs
$US 2.5 billion
$US 4 million
$US 400.6 million
(without Portugal)
Claims in total
$US 9.5 billion
Over $US 185 million
$US 1 billion and 287 million (IOPC Fund’s projections)
Amount of
oil spilt
37, 000 tonnes of crude oil
20, 000 tonnes of heavy fuel oil
25, 000 tonnes of heavy fuel

Figures adopted from the International Oil Pollution Funds Annual Report 2003.[195]

Table 2

Matrix of the Legal Regimes Potentially Governing the Southern Ocean

Maritime areas adjacent to the Antarctic continent and off-lying islands
Sovereignty and jurisdiction of the Antarctic claimants
The high seas regime
(The whole of the Antarctic Southern Ocean is considered the high seas apart from arguably maritime zones of the sub-Antarctic coastal States extending into the region south of
latitude 60° S.)
Maritime areas subject to over-lapping claims
(UK, Arg. and Chile)
Undetermined / Sovereignty and jurisdiction of the UK recognised by Aus, NZ, France and Norway
Maritime areas adjacent to the
unclaimed sector of Antarctica.
The high seas regime
Maritime zones of
the sub-Antarctic coastal States
extending into the
Antarctic Southern Ocean.
Undetermined ( Sub-Antarctic coastal States are also Antarctic States save South Africa)
Maritime areas beyond the claimed
coastal States’ maritime zones
The high seas regime, the Area
Sub-Antarctic coastal
States’ sovereignty and
Sub-Antarctic Southern Ocean
Maritime areas adjacent to the
sub-Antarctic islands
Sub-Antarctic coastal States’
sovereignty and jurisdiction
Sub-Antarctic coastal States’ sovereignty and jurisdiction
Maritime areas
subject to overlapping claims
of the UK and Argentina
Maritime areas beyond the claimed
coastal States’ maritime zones
The high seas regime, the Area
The high seas regime, the Area

Table 3

Compensation Limits Available under the International Regime of Liability and Compensation for Pollution Damage Caused by Oil Spills from Tankers Occurring after 1 November 2003[196]

Shipowner’s liability
Ship: <5 000 Gt[197]
4 510 000 SDR[198] (US$ 6.96 million)
5 000 - 140 000 Gt
4 510 000 SDR (US$ 6.96 million)
631 SDR (US$ 975) for each additional unit of tonnage

140 000 Gt or over
89 770 000 SDR (US$ 138.71 million)
1992 IOPC Fund
(including maximum payable by shipowner)
203 million SDR (US$ 314 million)
Supplementary Fund
(only for incidents after 3 March 2005)
Additional 547 million SDR (US$ 845 million)
MAXIMUM per incident
(including amounts paid by the 1992 Fund and the shipowner)
750 million SDR (US$ 1, 159 million)

Table 4

Financial Limits for Shipowner’s Liability under the HNS Regime[199]

Ships < 2000 Gt
10 million SDR (US$ 15.4 million)
Ships: 2001 Gt –50 000 GT
10 million SDR + 1 500 SDR (US$ 2317.86) per each addition unit of tonnage over 2000
Ships: 50 000 Gt and over
(10 million SDR+ 1 500 SDR per each addition unit of tonnage over 2000)
360 SDR (US$ 556) for each additional unit of tonnage over 50 000 GT
MAXIMUM per incident
100 million SDR (US$ 154 million)

Table 5

Financial Limits for Liability under the Basel Liability Protocol

Units of shipment
Unit of account (SDR)
Transport of
hazardous wastes
(Minimum limits)
Up to 5 tonnes
1 million SDR (US$ 1.54 million)
Up to 25 tonnes
2 million SDR (US$ 3.09 million)
Up to 50 tonnes
4 million SDR (US$ 6.18 million)
Up to 1 000 tonnes
6 million SDR (US$ 9.27 million)
Up to 10 000 tonnes
10 million SDR (US$ 15.4 million)
Over 10 000 tonnes
1 000 SDR for each additional tonne
Up to max. 30 million SDR (US$ 46.4 million)
Disposal operations
Minimum per incident
2 million SDR (US$ 3.09 million)

[*] PhD Candidate, Faculty of Law, University of Sydney, Australia; LLB (Hons), Faculty of Law, University of Zagreb, Croatia. This article builds on the visits to the UNEP DEPI, Nairobi, Kenya and an internship with the IMO, London in autumn 2004. This author would like to particularly thank Ms Elizabeth Mrema for UNEP for her insightful comments and guidance, Professor Don Rothwell, Mr Alex Conte, the anonymous referees, Mr Brendan O'Mahoney for his patience in proof reading, and finally my parents Vesna and Ivan Zovko for their unreserved support.

[1] Among such US ports are Los Angeles and Long Beach. Report by the US Department of State, United States Transportation congestion: a government perspective (Report prepared for the Organisation for Economic Co-operation and Development’s (OECD’s) Workshop on Maritime Transport, Paris, 4-5 November 2004). Available from OECD <> at 10 November 2004.

[2] The world merchant fleet amounted to 840.4 million deadweight tonnes (dwt) at the beginning of 2004. Institute of Shipping Economics and Logistics (ISL), (2004) 48 Shipping Statistics and Market Review 2003 (SSMR). World sea-borne trade topped 9 billion tonnes in 2002. World Trade Organisation (WTO) 2004 World Trade Report, Exploring the linkage between the domestic policy environment and international trade, 116. Available from <> at 25 December 2004.

[3] 28.1 percent of the total dwt of the world merchant fleet is over 20 years old, with 23.5 years average in that category. Report by United Nations Conference on Trade and Development (UNCTAD) Secretariat, 2003 Review of Maritime Transport, UNCTAD/RMT/2003.

[4] Countries that offer their maritime flag registration to owners from another country are considered “flag of convenience (FOC) countries”, also referred to as “open-registry countries”. This usually involves offering “easy” registration, low or non-existent taxes, and barely any restrictions on the nationality of crew. Some of the largest FOC countries are Panama, Bahamas, Liberia, Cyprus, Malta. 2003 UNCTAD Review of Maritime Transport, above n 3.

4 The two elemental treaties formulating this regime are the 1969 CLC and 1971 Fund Convention. International Convention on Civil Liability for Oil Pollution Damage [1969 CLC], concluded at Brussels on 29 November 1969, 973 UNTS 3 (in force 19 June 1975), as amended by Protocols of 1976, 1984, and 1992, as well as the 2000 amendments. The 1969 CLC as amended by the 1992 Protocol is referred to as the ‘1992 Liability Convention’. Protocol of 1992 to amend the International Convention on Civil Liability for Oil Pollution Damage 1969, adopted 27 November 1992, 2 ATS 1996 (in force 30 May 1996). International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage [1971 Fund Convention], adopted at Brussels on 18 December 1971, 1110 UNTS 57 (in force 16 October 1978), amended by Protocols of 1976, 1984, 1992, 2000, 2003 [Supplementary Fund Protocol], as well as the 2000 Amendments. The 1992 Protocol replaces the 1971 Convention, creating the ‘1992 Fund Convention’. Protocol of 1992 to Amend the International Convention on the Establishment of an International Fund for Compensation for Oil pollution Damage 1971, adopted 27 November 1992, 2 ATS 1996 (in force 30 May 1996).

[5] In 2002, seaborne shipments of crude oil reached 1.65 billion tonnes, and of petroleum products 479 million tonnes. UNCTAD Review of Maritime Transport, above n 3, 9-10.

[6] Convention on the Liability of Operators of Nuclear Ships [1962 Nuclear Ships Convention], adopted at Brussels on 25 May 1962, 57 AJIL 268 (1963) (not in force); Convention Relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material [1971 Nuclear Convention], adopted at Brussels on 17 December 1971, 974 UNTS 255 (in force 15 July 1975); International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea [HNS Convention], adopted at London on 3 May 1996, 35 ILM 1406 (not in force); Basel Protocol on Liability and Compensation for Damage Resulting from Transboundary Movements of Hazardous Wastes and Their Disposal, [Basel Liability Protocol], adopted at Basel on 10 December 1999, UNEP/CHW.1//WG.1/9/2 (not in force); and International Convention on Civil Liability for Bunker Oil Pollution Damage [Bunkers Convention], adopted at London on 3 March 2001, IMO document: LEG/CONF 12/19 of 27 March 2001 ( not in force).

[7] “Pure environmental damage”, also referred to as “environmental damage per se”, is commonly differentiated from any damage to persons or property pursuant to pollution incidents. While no official or legal definition of this type of environmental damage exists, perhaps the best interpretation of it was offered by the United Nations Environment Programme (UNEP) describing it as ‘[a] measurable adverse impact on the quality of particular environment or any of its components including its use and non-use values and its ability to support and sustain an acceptable quality of life and a viable ecological balance.’ Definition offered by UNEP ‘Working Group of Experts on Liability and Compensation for Environmental Damage Arising from Military Activities’ in Alexandre Timoshenko (ed), Liability and Compensation for Environmental Damage, Compilation of Documents (UNEP Publication, Nairobi, 1998), 9.

[8] Treaties predominantly explicitly cover environmental damage per se to the territorial sea, the exclusive economic zone (EEZ), or the equivalent area. HNS Convention, article 3(c); Bunkers Convention, article 2(a); 1992 Liability Convention, article 2(a); 1992 Fund Convention, article 3(a); and Basel Liability Protocol, article 3(3a).

[9] See paper by Kristian R Fuglesang as per the International Association of Independent Tanker Owners (INTERTANCO), The need for speedier ratification of international conventions (Paper prepared for the OECD’s Workshop on Maritime Transport, Paris 4-5 November 2004): <,2340,en_2649_34367_33943141

_1_1_1_1,00.html> at 5 December 2004.

[10] Southern Ocean for the purposes of this article denotes a marine region extending from the Antarctic continent in the south as far north as the Antarctic Convergence. The World Bank, The World Conservation Union (IUCN), Great Barrier Reef Marine Park Authority, (1995) 1 A Global Representative System of Marine Protected Areas: Antarctic, Arctic, Mediterranean, Northwest Atlantic, Northeast Atlantic and Baltic, 45-49.

[11] The Antarctic Treaty [AT], adopted at Washington on 1 December 1959, 402 UNTS 71 (in force 23 June 1961).

[12] Protocol on Environmental Protection to the Antarctic Treaty [Environmental Protocol], adopted at Madrid on 4 October 1991, ATS 1998 No. 6 (in force 14 January 1998).

[13] United Nations Convention on the Law of the Sea [UNCLOS], concluded at Montego Bay on 10 December 1982, 1833 UNTS 3 ( in force 16 November 1994).

[14] UNCLOS, article 2(4).

[15] International Convention for the Prevention of Pollution from Ships [MARPOL], adopted at London on 2 November 1973, 12 ILM 1319 (1973) (not intended to enter into force without the 1978 Protocol); Protocol of 1978 relating to the International Convention for the Prevention of Pollution from Ships 1973, adopted at London on 17 February 1978, 1340 UNTS 61 (in force 2 October 1983). MARPOL, article 2(6). When defining vessel-sourced pollution, one must bear in mind that the term vessel and ship are used interchangeably, both denoting ‘[a] vessel of any type whatsoever operating in the marine environment and including hydrofoil boats, air-cushion vehicles, submersibles, floating craft and fixed or floating platforms’. MARPOL, article 2(4). For more information on various types of ships see K Van Dokkum, Ship Knowledge, A Modern Encyclopedia (2004).

[16] Report by the OECD’s Maritime Transport Committee (2003) Costs saving from Non-Compliance with International Environmental Regulations in the Maritime Sector 4. Available from <> at 20 December 2004.

[17] IMO leaflet on Preventing Marine Pollution, March 1998. Available from <> at 20 December 2004.

[18] In the context of ship-sourced pollution, such like accidents include the sinking of the nuclear submarine K-141 “Kursk” in the Barens Sea in 2000; and the 1997 incident involving surface vessel “MSC Carla” carrying packages containing radioactive matter. See International Atomic Energy Agency (IAEA) Inventory of accidents and losses at sea involving radioactive material (2001, Vienna), IAEA - TECDOC - 1242.

[19] MARPOL, Annex IV - Prevention of Pollution by Sewage from Ships (in force 27 September 2003). MARPOL, Annex V - Prevention of Pollution by Garbage from Ships (in force 31 December 1988).

[20] Ballast water denotes ‘…water with its suspended matter taken on board a ship to control trim, list, draught, stability or stresses of the ship.’ International Convention for the Control and Management of Ships’ Ballast Water and Sediments [Ballast Water Convention],

adopted at London on 13 February [2]004, IMO document(s): Final Act BWM/CONF/37; article 1(2) (not in force). ‘Sediments means matter settled out of ballast water within a ship’. Ballast Water Convention, article 1(11).

23 International Convention on the Control of Harmful Anti-Fouling Systems [Anti –fouling Convention], establishes a set of rules for reducing or eliminating adverse effects on the marine environment caused by ‘a coating, paint, surface treatment, surface, or device that is used on a ship to control or prevent attachment of unwanted organisms.’ Anti-fouling Convention, adopted at London on 5 October 2001, IMO Doc. Final Act AFS/CONF 25 and Resolutions 1,2,3,4 (E/F/S); Convention AFS/CONF/26 (E/F/S), article 2(2) (not in force).

21 Noise pollution has been identified as an emerging threat in the Antarctic and the Southern Ocean in the aftermath of the legal proceedings in the US concerning the effects of the Low Frequency Active Sonars (LFAS) on marine wildlife, and the 1999 recognition of the International Whaling Commission (IWC) of the effects of anthropogenic noise on whales. See Report by Antarctic and Southern Ocean Coalition (ASOC) Marine Acoustic Technology and the Antarctic Environment, Available from <

asset/MediaItems/ml_377774981018519_IP%20xx%204c%20ASOC%20marine%20acoustics%200522final.doc> at 2 October 2004.

[22] The Southern Ocean comprises the southern waters of the Indian, Pacific and Atlantic oceans making up for 22% of the total world marine areas. The sea ice surrounding the Antarctic during winter months reaches as far as 54° South Latitude encompassing 20 million square kilometres, with the waves up to twenty-three metres high. C C Joyner, Antarctica and the Law of the Sea (1992), 15-22.

[23] According to the COMNAP estimates, the “worst case scenario” of an environmental emergency, including a marine one, would amount to the minimum of US$ 10 million for costs of clean up and restoration, notwithstanding the fact that some environmental damage may be irreparable, and thus unquantifiable. Council of Managers of National Antarctic Programmes (COMNAP), “Worst Case” & “Less than Worst Case” Environmental scenarios, doc. XXV ATCM/ WP25 (2002) Poland, 19.

[24] 19,369 passengers landed in the Antarctic on commercially organised tour vessels, sailing vessels and yachts in 2003/2004 season, hence 46% increase from the 2002-2003 season. For comparison, the total number of tourists in 1992/93 season was 6704. This however only includes vessels registered with the International Association of Antarctica Tour Operators (IAATO), with estimates that some additional 3,793 tourists sailed south of latitude 60°S on independently operated vessels during the 2003/2004 season. An Antarctic tourism season generally lasts from November until March the following year. IAATO Overview of Antarctic Tourism – 2003-2004 Antarctic Season doc. XXVI ATCM/ IP 63 (2003) Madrid.

[25] The problem of Illegal, Unregulated and Unreported (IUU) fishing is widespread in the Southern Ocean. The Australian Antarctic Division (AAD) approximates that ‘[t]he total IUU catch of toothfish over the past six years is almost equal to the total catch by legal fishers (80,960 tonnes and 83,696 tonnes respectively), and worth about A$1 billion in wholesale value.’ AAD website <> at 12 November 2004.

[26] While no exact figures are available, United Nations Food and Agriculture Organisation (FAO) projects on the basis of several example open registry States such as Belize, that the number of fishing vessels on open registers continues to increase. See Lloyd’s Maritime Information Services 1997 and Lloyd’s Register - Fairplay Ltd. World Fleet Statistics 2001 reproduced in the FAO Report The State of World Fisheries and Aquaculture 2002, available from <> at 1 January 2005. As for the Antarctic tourism vessels, the IAATO operated vessels are often flagged by flags of the open-registry States such as Bahamas, Liberia, Bermuda and Barbados. Though not much data is available concerning the majority of non-IAATO member tourism vessels, two such ships, Marco Polo and Discovery, both large cruise ships with the capacity of 650 and 800 passengers respectively, are on open registers - Bahamas and Bermuda respectively. IAATO Overview of Antarctic Tourism, above n 26.

[2]9 In general terms “piercing the corporate veil” would mean to prove that a corporation exists merely as a controlled front for an individual or management group, so that in a lawsuit the individual defendants can be held liable for damages for actions primarily attributable to the corporation. This usually involves courts piercing ‘the parent-subsidiary or corporation-shareholder relationship to find the parent or the shareholder liable for the acts of the corporation.’ B E Raquet and R J Romsdahl, ‘Piercing The Corporate Veil Under The Oil Pollution Act Of 1990’ (1993) 5 University of San Francisco Maritime Law Journal 369, 372.

27 COMNAP Report 2002, above n 25.

[28] Incidents involving sinking vessels in the Southern Ocean south of latitude 60°S: Gotland II (1981); Southern Quest (1986); Nella Dan (1987); Bahia Paraiso (1989). COMNAP Report 2002, above n 25. R D Simpson, S D A Smith and A R Pople, ‘The effect of a spillage of Diesel fuel on a rocky shore in the Sub-Antarctic region (Macquarie Island)’ (1995) 31 Marine Pollution Bulletin 367-371.

[29] P A Penhale, J Coosen and E R Marschoff, ‘The Bahia Paraiso: A case study in environmental impact, remediation and monitoring’ in B Battaglia, J Valencia and D W H Walton (eds), Antarctic Communities, Species, Structure and Survival (1997), 437-444.

[30] COMNAP Report 2002, above n 25, 13.

[31] Yacht Spirit of Sydney damaged by being beset in pack ice in 2001; tourist vessel Bremen with 164 passengers on board and weighing 6,752 tonnes was damaged by a large wave in 2002. Antarctic Non-Government Activity News (ANAN), 40- 02 (31 January 2001); ANAN 42 -02. (28 February 2001). ANAN available from <

goingsouth/tourism/News/default.asp> at January 2005. According to the IAATO, 11 incidents involving its member ships have occurred since 1991, with no environmental consequences. IAATO’s Information paper An Assessment of Environmental Emergencies Arising from Activities in Antarctica available from <

xii_enviro_assessment.html> at 2 December 2005.

[32] The only reported incident involving oil pollution from a fishing vessel was the sinking of a South African flagged longliner “Sudur Havid” in June 1998. Karl-Hermann Kock, ‘The direct influence of fishing and fishery-related activities on non-target species in the Southern Ocean with particular emphasis on longline fishing and its impact on albatrosses and petrels – a review’ (2001) 11 Reviews in Fish Biology and Fisheries 31-56, 34. Kock identifies various categories of material entering marine environment from the fishing vessels that may be harmful to the marine wild-life: beach litter and floating marine debris; ingestion of and entanglement in plastic material; plastic package bands from bait boxes and fishing nets; the impact of bottom trawling on benthic communities. Ibid, 35-38.

[33] List of relevant treaties, above n 9.

[34] Definition adopted from P Vigni, ‘Antarctic Maritime Claims: Frozen Sovereignty and the Law of the Sea’ in A G Oude Elferink and D R Rothwell (eds), The Law of the Sea and Polar Marine Delimitation and Jurisdiction (2001), 86. Antarctic convergence is a divide between the cold Antarctic waters and the warmer more northerly waters. A Global Representative System of Marine Protected Areas, above n 11, 45.

[35 ]Seven States hold territorial and maritime claims south of latitude 60º S: Australia, Argentina, Chile, France, New Zealand, Norway and the UK [hereinafter Antarctic claimants]. Moreover, the claims of Argentina, UK and Chile overlap.

[36] The AT, article IV.

[37] The term ATS was introduced for the first time in 1973 by Roberto Guyer, an Argentine scholar and diplomat.

[38] However, a number of sub-Antarctic islands, South Georgia, South Sandwich and Shag Rocks islands specifically, are subject to overlapping claims of Argentina and the UK.

[39] The Southern Ocean south of latitude 60ºS has already been designated a special area under Annexes I, II and V of MARPOL. Annex I - Regulations for the Prevention of pollution by oil (came into force with MARPOL 73/78 on 2 October 1983), effective for the Antarctic special area as of 17/03/92; Annex II - Regulations for the Control of Pollution by Noxious Liquid Substances in bulk (in force 6 April 1987), effective for the Antarctic special area as of 01/07/94; Annex V - effective for the Antarctic special area as of 17/03/92. Above n 20. Moreover, Basel Convention on the Control of Transboundary Movements of Hazardous Wastes [Basel Convention] in its article 4(6) explicitly prohibits export of hazardous wastes or other wastes for disposal within the area south of the 60° south parallel. Basel Convention, adopted at Basel on 22 March 1989, 1673 UNTS 57 (in force 5 May 1992).

[40] CCAMLR, concluded at Canberra on 20 May 1980, 1329 UNTS 47 (in force 7 April 1982), article I(4). Exact co-ordinates of the Southern Ocean defined as the CCAMLR application area available from CCAMLR < > at 2 January 2005.

[41] A Global Representative System of Marine Protected Areas, above n 11, 45.

[42] For a study of the international liability and compensation regimes in relation to environmental damage as a general category see UNEP Division of Environmental Policy Implementation, ‘Environmental liability and compensation regimes: A Review’ (2003).

[43] Categorisation adopted from J H Bates and C J W Benson (eds), Marine Environment Law (Lloyd’s of London, 1993-2000), Loose-leaf, [1.03].

[44] Bunker oil denotes hydrocarbon mineral oil, including lubricating oil used for the operation or propulsion of the ship, and any residues of such oil. Bunkers Convention, article 1(5).

[45] During the negotiations of the Ballast Water Convention the question was raised whether environmental damage pursuant to ballast water release should be classified as pollution at all in light of article 196 of UNCLOS which separately regulates ‘…the intentional or accidental introduction of species, alien or new, to a particular part of the marine environment, which may cause significant and harmful changes thereto’. However, for the purposes of this paper ballast water will be considered a pollutant.

[46] Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter [London Dumping Convention], adopted at London on 29 December 1972, 1046 UNTS 120, (in force 30 August 1975); and Protocol of 1996 to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, adopted 7 November 1972, 36 ILM 1 (1996) (not in force).

[47] MARPOL, Annex VI - Prevention of Air Pollution from Ships, adopted on 26 September 1997 (will enter into force 19 May 2005). IMO, Marine Pollution Conventions <> at 1 December 2003. There is no special international treaty relating to the prevention of air pollution from ships.

[48] Robin R Churchill and Alan V Lowe, The Law of the Sea (1988), 363-367.

[49] UNCLOS, Part XII - Protection and Preservation of the Marine Environment.

[50] IMO’s system of special areas established in the Guidelines for the designation of special areas under MARPOL 73/78 and Guidelines for the identification and Designation of Particularly Sensitive Sea Areas, IMO A.22/ Res 927, adopted on 29 November 2001, IMO Assembly, 22nd session (15 January 2002), [2.1].

[51] Above n 42.

[52] MARPOL, article 4. UNCLOS, article 217.

[53] 2001 Draft Articles on the Prevention of transboundary Harm form Hazardous Activities, reproduced in the Report of the International Law Commission (ILC) on the work of its 53rd session, Official Records of the General Assembly, Fifty-sixth Session, Supplement No. 10 (A/56/10) chp.V.E.1.

[54] The latest comprehensive proposals concerning this topic put forth by the Working Group are available in the 2003 Report of the International Law Commission on the work of its 55th session, Official Records of the General Assembly, Fifty-eight Session, Supplement No. 10 (A/58/10), Chapter VI (The International Liability For Injurious Consequences Arising Out Of Acts Not Prohibited By International Law (International Liability In Case Of Loss From Transboundary Harm Arising Out Of Hazardous Activities).

[55] Commentary to the Draft Articles on Prevention of Transboundary Harm (articles 1 and 2), ibid, 380-390.

[56] Ibid.

60 Above n [5].

61 Above n 5.

62 Above n 7.

57 The 1971 Fund Convention ceased to be in force on 24 May 2002, and is replaced by the 1992 Fund Convention. Though 1969 CLC still has some 45 States parties as at 1 December 2004, their number is decreasing. This article will focus on the regimes established under the 1992 Liability and Fund Conventions.

[58] ‘Oil means any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy diesel oil, lubricating oil, whether carried on board a ship as cargo or in the bunkers of such a ship.’ 1992 Liability Convention, article 1(5). 1992 Fund Convention, article 1(2). On the definition of ships covered by the Convention - 1992 Liability Convention, article 1(1); and 1992 Fund Convention, article 1(2).

[59] 1992 Liability Convention, article 1(6a); 1992 Fund Convention, article 1(2).

[60] The 1992 Liability and Fund Conventions refer to pure environmental damage as the impairment of the environment. 1992 Liability Convention, article 1(6a); 1992 Fund Convention, article 1(2).

[61] The equivalent area to the EEZ is defined as an ‘[a]rea beyond and adjacent to the territorial sea of that State determined by that State in accordance with international law and extending not more than 200 nautical miles from the baselines from which the breadth of its territorial sea is measured.’ 1992 Liability Convention, article 2(a); 1992 Fund Convention, article 3(a).

[62] Compensation is also available for measures taken to prevent and minimise pollution damage in the abovementioned coastal State areas wherever they may be taken. 1992 Liability Convention, article 2(b); 1992 Fund Convention, article 3(b).

[63] 1992 Liability Convention, article 1, 6(a), (b); Fund Convention, article 1(2).

[64] The IOPC Funds 1971 and 1992 are two intergovernmental organisations administering and putting into force the liability and compensation regimes established under the 1971 Fund and 1992 Fund Conventions, and their subsequent Amendments and Protocols.

[65] Both the 1992 and 1971 Fund Claims Manuals are available online from <> at 1 January 2005. The 1992 Fund Claims Manual suggests that with regard to compensation for impairment of the environment ‘[t]he aim of any reasonable measures of reinstatement should be to bring the damaged site back to the same ecological state that would have existed had the oil spill not occurred, or at least as close to it as possible (that is to re-establish a biological community in which the organisms characteristic of that community at the time of the incident are present and are functioning normally).’ IOPC 1992 Fund Claims Manual (November 2002), 30.

[66] 1992 Fund Claims Manual, ibid, 17-21, 29-34.

[67] 1992 Liability Convention, article 4.

[68] Ibid, article 7.

[69] 1992 Fund Convention, article 4(1).

[70] ‘Person means any individual or partnership or any public or private body, whether corporate or not, including a State or any of its constituent subdivisions’. Ibid, article 1(2).

[71] Ibid, article 1(3).

[72] Ibid, article 10.

[73] Ibid, article 4(2).

[74] Hereinafter Supplementary Fund. The Supplementary Fund was established as an independent intergovernmental organisation under the Protocol of 2003 to the 1992 Fund Convention. Protocol Of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 (2003 Protocol), done at London on 16 May 2003, will enter into force on the 3 March 2005. Full text of the Protocol available from <> at 1 January 2005.

[75] 2003 Supplementary Protocol, article 14.

[76] 1992 Fund Convention, article 6 and 7(6). 1992 Liability Convention, article 8.

[77] 1992 Liability Convention, article 9.

[78] 1992 Fund Convention, article 7.

[79] A final judgment is one no longer subject to ordinary forms of review. Other two conditions for enforceability are that the judgment ought not to have been obtained by fraud and that the defendant must have been given reasonable notice and fair opportunity to present his case. 1992 Liability Convention, article 10(1); and 1992 Fund Convention, article 8.

[80] 1992 Liability Convention, article 3(2a).

[81] Australia, France, UK, Argentina, Chile, Norway, New Zealand, Russia, Japan and others. About the status of ratification of the above treaties and their protocols <> and <>, at 4 December 2004.

[8]9 Bunkers Convention, article 4(a).

82 Ibid, article 2(a).

[83] Ibid, article 1(9a), (9b). Bunkers Convention also allows for compensation of preventive measures wherever they may have been undertaken. Ibid, article 2(b).

[84] Ibid, article 1(3).

[85] Ibid, article 3(2).

[86] Ibid, article 6. Convention on Limitation of Liability for Maritime Claims [LLMC], adopted at London on 19 November 1976, 1456 UNTS 221 (in force 1 December 1986). Protocol of 1996 to amend the Convention on Limitation of Liability for Maritime Claims, 1976 [LLMC PROT 1996], adopted 2 May 1996, IMO document(s):LEG/CONF.10/8 of 9 May 1996 ( not in force). Reprinted in Comité Maritime International, Handbook of Maritime Conventions (mill ed 2001), doc 5-7.

[87] Bunkers Convention, article 3(a).

[88] Ibid, article 7.

[89] Ibid, article 8.

[9]7 Ibid, article 9.

98 Ibid, article 10.

90 1969 Intervention Convention, adopted at Brussels on 29 November 1969, 970 UNTS 211 (in force 6 May 1975).

[91] OPRC 1990, adopted at London on 30 November 1990, 1891 UNTS 51 (in force 13 May 1995).

[92] Above n 42.

[93] Above n 7.

[94] OPRC-HNS Protocol, adopted on 14 March 2000, IMO document(s): HNS-OPRC/CONF/11/Rev 1 of 15 March 2000 (not in force).

[95] Above n 42.

[96] MARPOL, Annex III - Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form ( in force 1 July 1992).

[97] SOLAS, concluded at London on 1 November 1974, 1355 UNTS 341, Chapter VII (in force on 25 May 1980), Chapter VII - carriage of dangerous goods.

[98] A full list of the HNS may be found in MARPOL, appendix I to ANNEX I; appendix II to Annex II, and a number of international codes. HNS Convention, article 1(5).

[99] HNS Convention, article 1(5b). The Convention excludes from its scope of application damage caused by radioactive cargo. Article 4(3b).

[100] HNS Convention will apply exclusively to ‘damage, other than damage by contamination of the environment , caused outside the territory, including the territorial sea, of any State’. Ibid, article 3(c).

[101] HNS Convention, article 1(6).

[102] Another novel element is the exemption from liability on the grounds of the shipper withholding information concerning the hazardous and noxious nature of the cargo. Ibid, article 7.

[103] Ibid, article 9(1). “SDR” - Special Drawing Right is a monetary measurement used in maritime law that can be translated into all national currencies. The daily conversion rates are available from the International Monetary Fund’s (IMF’s) website. The conversion rate adopted for the purpose of this article is as determined by the IMF on 6 December 2004: 1 SDR = US$ 1.545240.Available from

<>, at 4 December 2004.

[104] Ibid, article 12.

[105] Ibid, article 7(2).

[106] Ibid, article 18. One of the outstanding issues concerning the HNS Fund is how to identify persons obligated to contribute towards the Fund, as well as the small number of the potential contributors.

[107] The HNS Convention, article 14(1).

[108] Ibid, article 37(3).

[109] Ibid, article 37(1), (2).

[110] Jurisdiction is attributed to courts of the flag-State; courts of the State Party where the shipowner is a resident or had his principal place of business, and as the last resort courts of the State Party where a fund has been constituted by the jointly and severally liable owners. Ibid, article 38(2).

[111] Ibid, article 38(1).

[112] Ibid, article 39.

[113] Ibid, article 40. The conditions for a judgment to be final and enforceable in accordance with the HNS Convention are mirrored from the 1992 Liability Convention, article 10.

[114] Basel Convention, above n 42.

[115] Basel Liability Protocol, article 1. Protocol adopts terminology and the general scope of application from the Basel Convention as its supplementary mechanism. Basel Liability Protocol, article 2(1).

[116] The notifier may denote the person obligated to notify the States concerned of any proposed transboundary movement of hazardous wastes or other wastes. It is liable under the Protocol until the disposer takes possession of the waste. Basel Liability Protocol, article 4(1).

[117] Exporter is liable in case the notifier is the State of export, and only until the disposer takes possession. Ibid. ‘“Exporter” means any person under the jurisdiction of the State of export who arranges for hazardous wastes or other wastes to be exported’. Basel Convention, article 2(15).

[118] Basel Protocol, article 4(2). ‘“Importer” means any person under the jurisdiction of the State of import who arranges for hazardous wastes or other wastes to be imported’. Basel Convention, article 2(16).

[119] ‘“Disposer” means any person to whom hazardous wastes or other wastes are shipped and who carries out the disposal of such wastes’. Basel Convention, article 2(19).

[120] Basel Liability Protocol, article 4(5b). Exemptions do not apply to persons liable during the re-import of wastes.

[121] Persons liable are the re-importer and notifier as defined in article 4 (3), (4) of the Basel Liability Protocol.

[122] Ibid, article 5.

[123] Ibid, article 12 and Annex B to the Protocol. H Bocken, E de Kezel and K Bernauw, ‘Consultant's Study on financial limits of liability under the Protocol’, available from <> at 1 December 2004.

[124] Basel Liability Protocol, article 14.

[125] Ibid, article 13.

[126] Ibid, article 19.

[127] Ibid, article 17.

[128] Ibid, article 21.

[129] Above n 7.

[130] Ibid.

[131] For the full account of the present regulatory regime see Jon M Van Dyke, ‘The Legal Regime Governing Sea Transport of Ultrahazardous Radioactive Materials’ (2002) 33 Ocean Development and International Law, 77-108.

[132] INF Code, adopted 27 May 1999, SD 47, 77 (SD4712) (in force 1 January 2001), Annex to SOLAS, above n 107.

[133] Above n 7. Also see Code of Practice on the International Tranboundary Movement of Radioactive Waste, (adopted by the General Conference of the International Atomic Energy Agency), on 21 September 1990, (XXXIV)/RRES/530), 30 ILM 557 (1991).

[134] Convention on Civil Liability for Nuclear Damage [1963 Vienna Convention], adopted at Vienna on 21 May 1963, 1063 UNTS 265 (in force 12 November 1977). Protocol to Amend the 1963 Vienna Convention on Civil Liability for Nuclear Damage 36 ILM 1454 (not in force).

[135] Convention on Third Party Liability in the Field of Nuclear Energy [1960 Paris Convention] concluded at Paris on 29 July 1960, 956 UNTS 251 (in force 1 April 1968) as amended by Additional Protocol of 28 January 1964, and Protocol of 1982.

[136] 1972 Liability Convention, article 2.

[137] 1962 Nuclear Ships Convention, article 1(7).

[138] Ibid.

[139] Ibid, article 2.

[140] Ibid, article 2(5), (6), article 8.

[141] Ibid, article 3. The Convention asserts that franc as the unit of account equals fifty-five and one half milligrams of gold of millesimal fineness nine hundred. Ibid, article 3(4).

[142] Ibid, article 5.

[143] Ibid, article 10.

[144] 1963 Vienna Convention, article 1(1.J.iii).

[145] Ibid, article 1(1.j.i).

[146] Ibid, article 1(1.k).

[147] 1960 Paris Convention, article 1(ai). Similarly, the following international instruments referring to nuclear incidents are not applicable in the context of vessel-sourced pollution of the marine environment: Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention [1988 Joint Protocol], adopted at Vienna on 21 September 1988, 1672 UNTS 293 (in force 27 April 1992); and Convention on Supplementary Compensation for Nuclear Damage, adopted at Vienna on 2 September 1997, 36 ILM 1473 (1997) (not in force). The later Convention applies to nuclear damage from nuclear installations as defined under the 1960 Paris and 1963 Vienna Conventions.

[148] Above n 20.

[149] Ibid.

[150] Above n 21.

[151] Ballast Water Convention, article 2(1).

[152] Above n 22.

[153] Above n 94.

[154] LLMC Convention, article 2(1c).

[155] LLMC Convention, article 3.

[156] Bunkers Convention, article 6.

[157] The AT, articles 1 and 2.

[158]Above n 13.

[159] Environmental Protocol, Annex I - Environmental Impact Assessment.

[160] Ibid, Annex III - Waste Disposal and Waste Management.

[161] Ibid, Annex IV - Prevention of Marine Pollution.

[162] Annex II on the Conservation of the Antarctic Flora and Fauna does not apply to emergencies relating to the protection of the environment. Ibid, Annex II, article 2(1).

[163] The final 2004 version - Chairman's Draft Of Annex VI to the Protocol on Environmental Protection to the Antarctic Treaty ‘Liability Arising From Environmental Emergencies’, doc. XXVII ATCM/WP 6 (2004) Cape Town [hereinafter 2004 Chairman’s Draft]. Other important drafts include: The Proposal of the US Delegation ‘Annex VI to the Protocol on Environmental Protection to the Antarctic Treaty, Liability for Emergency Response Action’ (April 1996) [hereinafter US Proposal] and the 1998 ‘The Chairman’s Final Offering’ proposed by the ATCM Group of experts on liability. Both the 1996 and 1998 proposals are reproduced in Liability - Report of the Group of Experts, doc. XXII ATCM/WP 1 (1998) Lima.

[164] The term negotiating States refers to the Antarctic Treaty parties with the right to vote at the Annual meetings - the Antarctic Treaty Consultative Meetings (ATCM). Those parties are named the Antarctic Treaty Consultative Parties (ATCPs).

[165] Above n 173.

[166] The 2004 Chairman’s Draft, above n 176. New Zealand’s Chairman’s Draft of Annex VI to the Protocol on Environmental Protection to the Antarctic Treaty, doc. XXVI ATCM/ WP 33, (2003) Madrid [hereinafter 2003 Chairman’s Draft].

[167] The Preamble of the 2003 Draft Annex as put forth by MacKay records the desire of the Parties to ‘promote environmental protection… by mandating certain steps concerning prevention of damage, contingency planning and liability, with a view of further steps being taken in these areas in the future by the Parties’. 2003 Chairman’s Draft, ibid.

[1]77 Above n 173. Given the draft stage of this document, an account will be given of the various proposals put forth within, rather than offering an article to article analysis.

168 Secretariat is the permanent body of the ATS. It began its operations on the 1 September 2004. It was established by Measure 1: Secretariat of the Antarctic Treaty, doc. XXVI ATCM/ Measure 1 (2003) Madrid. Measure 1 will enter into effect when the 27 Consultative Parties who adopted the measure at the 26th ATCM in Madrid have completed their national approval procedures. Until then, the Measure is provisionally applied under Decision 2 (2003) also adopted at the XXVI ATCM.

[169] Environmental Protocol, articles 18-20.

[170] Fourty-five States are parties to the Antarctic Treaty, 27 out of the 45 have the Consultative status. 30 States are parties to the Environmental Protocol. Moreover, all of the 27 Consultative Parties are parties to the Environmental Protocol, plus 3 non-Consultative Parties. Yearbook of International Co-operation on Environment <> at 5 December 2003.

[171] Australia submitted its claim on 16 November 2004. Documents available from United Nations, DOLAOS </> at 25 May 2004. UNCLOS, Annex II, article IV.

[172] Australian Environmental Protection and Biodiversity Conservation Act [EPBC Act]. No.91, 1999.

[173] Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2004] FCA 1510.

[174] UNCTAD Report, above n 3.

[175] Donald R Rothwell, ‘Global environmental protection instruments’ in Davor Vidas (ed), Protecting the polar marine environment (2000) 57, 77.

[176] Third State or third party is a synonym for a State not a party to a treaty. The Vienna Convention on the Law of Treaties [Vienna Convention], signed at Vienna 23 May 1969, 1155 UNTS 331 (in force 27 January 1980), article 2(h).

[177] Objective regimes are generally defined as ‘obligations and rights valid erga omnes’. M Ragazzi, The Concept of International Obligations Erga Omnes (1997), 37. Third party effects can also be produced by individual treaty provisions if the conditions set in the Vienna Convention on the Law of Treaties are met. Vienna Convention, articles 34-36.

[178] For a full account as to the ongoing debate concerning this issue that has polarised legal scholarship see B Simma, ‘The Antarctic Treaty as a Treaty Providing for an “Objective Regime”’ (1986) 19 (2) Cornell International Law Journal 189; A Wyrozumska, ‘Erga Tertios Effect of the Antarctic Treaty’ (1993) Antarctic and Southern Ocean law and policy occasional paper 6; S P Subedi, ‘The Doctrine of Objective Regimes in International Law and the Competence of the United Nations to Impose Territorial or Peace Settlements on States’ (1994) 37 German International Law Review 162; U Nussbaum, ‘Legal Status of Antarctic Off-Shore Areas’ (1993) Antarctic and Southern Ocean law and policy occasional paper 6; E Klein, Statusverträge in Völkerrecht (Berlin 1980); B Simma, From Bilateralism to Community Interest in International Law (1994); F M Auburn, Antarctic law and Politics (1982), 117-118; R Wolfrum, Die Internationalisierung staatsfreier Raume (The Internationalisation of stateless areas) (1984); and J J Charney, ‘The Antarctic System and Customary International Law’ in Francesco Francioni and Tullio Scovazzi (eds), International Law for Antarctica (1987).

[179] For two different perspectives on the relations between treaties and customary international law see P Sands, ‘Sustainable Development: Treaty, Custom , and the Cross-fertilization of international law’ in A Boyle and D Freestone (eds), International law and Sustainable Development (1999), 39. V Lowe, ‘The Politics of Law-Making: Are the Method and Character of Norm Creation Changing?’ in M Byers (ed), The role of Law in International politics: Essays in International Relations and International Law 207-226. Sands debates against hierarchy, while Lowe promotes priority of treaty over custom. Also see Seidl-Hohenveldern, ‘Hierarchy of treaties’ in J Klabbers and R Lefeber (eds), Essays on the Law of Treaties: A Collection of Essays in Honour of Bert Vierdag (1998).

[1]90 ‘Human impact on the Antarctic environment. Prevention, control and response to marine pollution’, Recommendation XV-4, ATCM XV (1989) Paris, available in J A Heap

Handbook of the Antarctic Treaty System (7th ed, 1990), section 2.2.2. See discussion in F Orrego Vicuna, ‘The Legitimacy of the Protocol on Environmental Protection to the Antarctic Treaty’ in Olav Schram Stokke and Davor Vidas (eds), Governing the Antarctic: The Effectiveness and legitimacy of the Antarctic Treaty System (1996) 268, 280-287.

180 Recommendation XV-4, article 2.

[181] Ibid, article 4.

[182] Conversely, at the 1981 Buenos Aires ATCM, Argentina for example emphasised the need to adapt the application of the 1954 International Convention for the Prevention of Pollution of the Sea by Oil (OILPOL) to the Antarctic eco-system. This was never followed up. Vicuna, above n 191, 282.

[183] For a list of Australian statutes that extend the application of CLC and Fund Conventions with their Protocols, MARPOL, CLMC and other IMO treaties to the Australian Antarctic Territory and maritime zones of the sub-Antarctic islands see S B Kaye, D R Rothwell and S Dando, The Laws of the Australian Antarctic Territory, (Antarctic and Southern Ocean Law and Policy Occasional Papers, 1999).

[184] Article 30(3) of the Vienna Convention asserts that if the earlier treaty had not been suspended or terminated in operation, and if all of the parties to an earlier treaty are also parties to the later one, the earlier treaty will have the effect ‘to the extent that its provisions are compatible with those of the later treaty.’

[185] The Vienna Convention, article 30(4 b).

[186] Ibid.

[187] Neither MARPOL nor the Environmental Protocol contain a provision such as article 288 (2) of UNCLOS that explicitly extends the application of their jurisdictional clauses onto disputes falling under treaties other than MARPOL/the Environmental Protocol.

[188] ‘[T]here are norms of various degrees of cogency, persuasiveness, and consensus which are incorporated in agreements between States but do not create enforceable rights and duties.’ R R Baxter, ‘International Law in Her Infinite Variety’ (1980) 29 International and Comparative Law Quarterly 549. On the soft law instruments in the international environmental law see C M Chinkin, ‘Challenge of Soft Law: Development and Change in International Law’ (1989) 38 International and Comparative Law Quarterly 850.

[189] 2001 Bunkers Convention, 1999 Basel Liability Protocol, 1996 HNS Convention and the 1962 Nuclear Ships Convention.

[190] Flag-State was Argentina, while the response action was undertaken by US, Chile, Korea and Spain, and the secondary clean up was performed by the Netherlands.

[191] Above n 17.

[192] Ibid.

[193] See INTERTANCO Report, above n 10.

[194] The Convention’s Annex on Regulations for the Control and Management of Ships’ Ballast Water and Sediments consisting of five parts, containing overall 25 regulations further elaborated in numerous individual articles.

[195] Available from <> at 4 November 2004; International Tanker Owners Pollution Federation Limited (ITOPF) <> at 4 November 2004. Where currency conversion was performed from Euros into US dollars, the exchange rate used was 1 Euro = 1.287400 US$ as advertised by the International Monetary Fund on 4 November 2004 (available from

[196] Different compensation limits are set for pollution incidents occurring before

1 November 2003. An altogether different system applies to incidents subject to the 1969 CLC and 1971 Fund Conventions. The figures in Table 1 are adopted from the 1992 Fund and Liability Conventions and their amendments as at 6 December 2004: above n 8.

[197] Gt = gross tonnage.
[198] The conversion rate SDR - US$ adopted for this table is as determined by the IMF on
6 December 2004: 1 SDR = US$ 1.545240: above n 112.

[199] Gt = gross tonnage. The conversion rate SDR - US$ as in Table 3. The data outlined in Table IV is adopted from the HNS Convention.

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