The 2010 HNS Convention: Key Provisions and What Shipowners Need to Know
The International Maritime Organization (IMO) has confirmed that the 2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (the 2010 HNS Convention) will enter into force on 29 November 2027.
The Convention's entry into force follows the fulfilment of the required ratification criteria, including ratification by at least 12 States, including four States each with not less than two million gross tonnes of shipping and representing collectively more than 40 million tonnes of contributing cargo received during the preceding calendar year.
For shipowners, operators, charterers and insurers, the Convention introduces a new international liability and compensation regime for incidents involving hazardous and noxious substances (HNS) carried by sea. It also establishes compulsory insurance requirements similar to those that already exist under other IMO liability conventions.
Background
The original HNS Convention was adopted in 1996 but never entered into force. In 2010, a Protocol was adopted to address practical implementation issues. Together, the 1996 Convention and the 2010 Protocol form the 2010 HNS Convention.
The Convention is intended to provide adequate, prompt and effective compensation for loss or damage arising from the carriage of hazardous and noxious substances.
Unlike the Civil Liability Convention (CLC), which is limited to persistent oil pollution from tankers, the HNS Convention has a much broader scope. It covers not only pollution damage but also losses arising from other risks associated with HNS cargoes, including personal injury, fire and explosion.
Which States have ratified the Convention?
The following States have deposited instruments of ratification at time of writing:
- Belgium
- Canada
- Denmark
- Estonia
- France
- Germany
- Kingdom of the Netherlands
- Norway
- Slovakia
- South Africa
- Sweden
- Türkiye
- Finland
Which ships does the Convention apply to?
The Convention applies to all seagoing ships carrying HNS as cargo, regardless of size, unless specifically exempted.
It excludes:
- warships;
- ships owned or operated by a State and used exclusively for non-commercial government service; and
- where a State has chosen to exercise the option available under the Convention, ships of 200 gross tonnage or less carrying only packaged HNS on domestic voyages.
At present, only Canada and Sweden have exercised this exemption.
Because there is no general minimum tonnage threshold, a significant number of vessels-including relatively small ships-will require an HNS Convention Certificate from November 2027.
Ships registered in non-Contracting States will also require certificates when trading to Contracting States. This means arrangements will need to be made with Contracting States well in advance to ensure certificates can be issued.
The Convention applies only while HNS is being carried by sea. Liability begins when the cargo passes the ship's rail (or enters the ship's loading equipment) during loading and ends when it passes the ship's rail (or leaves the ship's equipment) during discharge. Damage occurring during inland transport to or from the vessel falls outside the Convention.
What is considered HNS?
The Convention defines hazardous and noxious substances by reference to substances listed under various existing IMO conventions and codes. The definition includes both bulk and packaged cargoes.
To assist industry, the HNS Secretariat has developed an HNS Finder tool (please see here) which allows users to determine whether a particular substance falls within the Convention.
It is important to note that the Convention does not apply to:
- radioactive material; or
- plastic pellets or “nurdles”, which are currently not classified as HNS because they are not included as such within the relevant IMO instruments.
Where does the Convention apply?
The Convention applies to:
- damage occurring within the territory or territorial sea of a State Party;
- pollution damage occurring within the exclusive economic zone (EEZ), or equivalent maritime area, of a State Party; and
- damage other than pollution damage caused outside the territorial sea of any State where the HNS was carried on board a ship registered in a State Party.
What types of damage are covered?
The Convention provides compensation for:
- loss of life and personal injury occurring on board or outside the ship;
- loss of or damage to property outside the ship;
- environmental contamination;
- consequential economic losses, including losses suffered by the fishing and tourism industries; and
- the costs of reasonable preventive measures together with any further loss or damage caused by those measures.
The Convention does not apply to pollution damage caused by persistent oil carried as cargo on tankers, as this remains covered by the 1992 Civil Liability Convention and IOPC Fund regime.
However, it does apply to non-pollution damage from persistent oil carried as cargo on tankers, such as fire or explosion, involving persistent oil cargoes.
HNS used as fuel
The Convention applies only to HNS carried as cargo.
It does not cover incidents involving hazardous substances used as the ship's own fuel or propulsion system, including alternative fuels such as ammonia, methanol, LNG or LPG.
Liability for incidents involving HNS bunkers will therefore continue to depend upon applicable domestic law until an international liability regime is developed. The International Group of P&I Clubs is currently working with IMO Member States on proposals for such a regime.
Shipowner liability
The Convention imposes strict liability on the registered owner of the ship which spills the cargo (and the registered owner alone; like CLC, other parties such as Master and crew, managers, operators, charterers or salvors are not liable under the Convention).
This means that, following an HNS incident, the shipowner is liable for compensation regardless of fault unless one of the limited statutory defences applies.
The owner is not liable where the damage resulted entirely from:
- war, hostilities, civil war, insurrection or an exceptional, inevitable and irresistible natural phenomenon;
- an intentional act of a third party;
- negligence by a government authority responsible for navigational aids; or
- the failure of the shipper or another person to provide information about the hazardous nature of the cargo, provided the owner neither knew nor ought reasonably to have known of the cargo's hazardous characteristics.
These defences closely mirror those found in other IMO liability conventions.
Limitation of liability
Shipowners are entitled to limit their liability based upon the gross tonnage of the vessel.
Different limitation amounts apply depending on whether the incident involves bulk HNS or packaged HNS, reflecting the different funding arrangements established under the Convention.
Bulk HNS
- 10 million SDR for ships up to 2,000 GT;
- plus 1,500 SDR for each tonne from 2,001 to 50,000 GT;
- plus 360 SDR for each tonne above 50,000 GT;
- subject to an overall maximum of 100 million SDR.
Packaged HNS
The higher limits also apply where damage is caused by both packaged and bulk HNS, or where the source cannot be determined.
- 11.5 million SDR for ships up to 2,000 GT;
- plus 1,725 SDR for each tonne from 2,001 to 50,000 GT;
- plus 414 SDR for each tonne above 50,000 GT;
- subject to an overall maximum of 115 million SDR.
As under other IMO limitation conventions, the owner's right to limit liability can only be broken where it is proved that the damage resulted from the owner's personal act or omission committed either intentionally or recklessly and with knowledge that damage would probably result. This is a deliberately high threshold and is consistent with the unified interpretation adopted by the IMO Legal Committee.
It is worth noting that Article 18 of the Convention on Limitation of Liability for Maritime Claims (LLMC) was amended to allow States “at any time” to exclude claims for damage within the meaning of the HNS Convention. It is clear that this was meant to ensure that an owner’s entitlement to limit liability for HNS claims should be governed by the HNS Convention - not by the LLMC where the State has ratified both Conventions. At time of writing, not all State Parties to the HNS Convention have applied this reservation. It is assumed that they will do so prior to the entry into force of the Convention in November 2027. If they do not, the Court in the relevant jurisdiction will need to consider which regime applies.
The HNS Fund
The 2010 HNS Convention establishes a two-tier compensation regime. In addition to the shipowner's liability, it creates the HNS Fund, which provides a second layer of compensation where claims exceed the shipowner's limitation amount or where the shipowner is financially unable to meet its obligations.
A State that becomes a party to the 2010 HNS Protocol automatically becomes a Member of the HNS Fund established under the Convention. The Fund will operate in a similar manner to the International Oil Pollution Compensation (IOPC) Funds established under the 1992 Civil Liability Convention (CLC) and Fund Convention. As with the IOPC regime, the HNS Fund is financed by contributions from receivers of specified bulk HNS cargoes in Contracting States, rather than by shipowners.
Where compensation payable exceeds the shipowner's limitation amount, the HNS Fund may provide additional compensation so that the total compensation available for a single incident, including the shipowner's contribution, is up to 250 million Special Drawing Rights (SDR), subject to the terms and limits of the Convention.
This two-tier structure is intended to ensure that claimants have access to a substantially higher level of compensation than would be available from the shipowner alone, while sharing the financial burden between the shipping industry and the cargo interests that benefit from the carriage of hazardous and noxious substances.
Compulsory insurance
The Convention introduces a compulsory insurance regime based on the well-established model used under other IMO liability conventions.
Owners of ships registered in a State Party and carrying HNS cargoes must maintain insurance or other approved financial security sufficient to cover their liability under the Convention.
Ships must carry an HNS Convention Certificate confirming that the required insurance is in place.
Certificates are issued by the ship's flag State where it is a Party to the Convention. For ships registered in non-Contracting States, certificates may be issued by a State Party once it is satisfied that the necessary insurance or financial security has been provided.
Evidence of insurance will ordinarily take the form of a Blue Card issued by the insurer, confirming that cover is in place and recognising the Convention's right of direct action against the insurer.
Time limits for claims
Claims under the Convention are subject to two limitation periods.
Actions must be commenced within three years from the date on which the claimant knew, or ought reasonably to have known, of the damage.
In any event, no claim may be brought more than ten years after the incident giving rise to the damage.
Preparing for entry into force
With the Convention due to enter into force on 29 November 2027, shipowners and insurers should begin preparing now.
Owners should identify vessels that will require HNS Convention Certificates, review trading patterns involving Contracting States, and ensure appropriate insurance arrangements are in place. Given the potentially large number of ships requiring certification - including vessels registered in non-Contracting States-early engagement with flag administrations, insurers and financial security providers is likely to be essential.