Maritime compliance: HNS Convention Set to Enter into Force in November 2027

(www.MaritimeCyprus.com) The international maritime regime for liability and compensation following marine casualties is preparing for its most significant structural evolution in decades. On 29 November 2027, the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (the HNS Convention / 2010 HNS Protocol) will officially enter into force globally.

Long regarded as the missing cornerstone of the international maritime liability framework, the HNS Convention closes a critical gap alongside existing international regimes, such as the Civil Liability and Fund Conventions for oil pollution damage and the Bunker Convention.

Closing the Gap in Global Maritime Liability

Historically, incidents involving hazardous and noxious substances (HNS) have been subject to a patchwork of domestic laws, regional regulations, and general global limitation regimes (such as LLMC 1996). This fragmented landscape created significant uncertainty for claimants, shipowners, and insurers alike regarding liability limits, actionable damage categories, and compensation availability.

Once in force, the HNS Convention establishes a unified, strict liability regime paired with compulsory insurance and an international backup fund.

Scope of Application: Cargoes and Covered Damage

Unlike traditional oil pollution conventions, which focus primarily on persistent crude and heavy fuel oils, the HNS Convention applies to a vast and diverse spectrum of substances carried as cargo by sea, whether in bulk or packaged form.

Covered Cargoes

• Bulk Liquids: Chemical cargoes, liquefied natural gas (LNG), liquefied petroleum gas (LPG), and persistent/non-persistent oils.

• Solid Bulk Cargoes: Bulk solids possessing chemical hazards (e.g., materials covered by the IMSBC Code).

• Packaged Goods: Dangerous goods in freight containers, portable tanks, or dangerous packaged form falling under the IMDG Code.

Covered Damage

The definition of damage under the Convention is exceptionally broad. Beyond environmental remediation and clean-up costs, the regime covers:

• Loss of life or personal injury on board or outside the ship.

• Loss of or damage to property outside the ship.

• Economic loss arising from impairment of the environment (e.g., loss of income in fisheries or tourism).

• Preventive measures and further loss or damage caused by preventive measures.

The Two-Tier Compensation Architecture

The Convention guarantees financial protection up to 250 million Special Drawing Rights (SDR) per incident (approximately $335 million USD) through a two-tiered structure:

1. Tier 1 (Shipowner Liability): The registered shipowner is strictly liable for damage up to a specified limit determined by the ship's gross tonnage (capped at 115 million SDR for the largest vessels). Owners must maintain compulsory insurance or other financial security and carry an official State Certificate attesting to this coverage.

2. Tier 2 (The International HNS Fund): If damage exceeds the shipowner’s Tier 1 limit, or if the owner is financially incapable of meeting their obligations, the international HNS Fund steps in to provide secondary compensation up to the maximum cap of 250 million SDR. The Fund is financed by post-incident contributions levied on receivers or entities in Contracting States who receive threshold quantities of HNS cargo annually.

Key Operational Impacts for Industry Stakeholders

With the November 2027 enforcement date established, shipowners, managers, charterers, and cargo interests face a distinct set of operational and contractual preparation requirements:

1. Widespread Certification Requirements

There is no general minimum vessel tonnage threshold under the Convention for ships carrying HNS cargoes. Consequently, mandatory insurance and flag-state certification requirements will apply not only to large chemical tankers and gas carriers, but also to container vessels, general cargo ships, and feeder vessels transporting packaged dangerous goods. Industry estimates indicate that tens of thousands of vessels worldwide will require HNS State Certificates prior to entry into force.

2. Cargo Reporting and Import Obligations

Contracting States must establish reporting mechanisms to track HNS receipts. Cargo receivers importing contributing HNS goods past statutory thresholds (e.g., 20,000 tonnes of general HNS cargo or specific thresholds for LNG/LPG) will face direct reporting and contribution obligations to the HNS Fund.

3. Contractual and Charterparty Adjustments

Charterparties, bills of lading, and commercial agreements will need to be reviewed to ensure clear allocation of responsibilities regarding HNS cargo declarations, accuracy of Dangerous Goods Manifests, and compliance with certification requirements.

Looking Ahead to November 2027

The entry into force of the HNS Convention marks a critical milestone in international maritime law, completing the global safety net for marine pollution and casualty compensation. Between now and November 2027, ship managers, charterers, insurers (P&I Clubs), and flag administrations must coordinate closely to streamline certificate issuance, verify cargo reporting protocols, and update risk management practices.