The international maritime regime for liability and compensation following incidents involving hazardous and noxious substances is set to change when the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea enters into force on 29 November 2027.
At BIMCO, we welcome this long-awaited development, which will establish a more uniform international framework for compensation where damage is caused by hazardous and noxious substances carried by sea. The Convention has often been described as the missing major element in the global maritime liability system, sitting alongside existing regimes for oil pollution and other maritime risks.
At present, incidents involving such substances may be dealt with under a combination of national law, regional rules and general limitation regimes. Once in force, the Convention will introduce a more structured system based on strict shipowner liability, compulsory insurance and access to an international compensation fund.
The Convention applies to a wide range of hazardous and noxious substances carried as cargo by sea. These may include certain oils, chemicals, liquefied gases and packaged dangerous goods. Damage covered by the regime can extend beyond pollution to include fire, explosion, toxicity, personal injury and property damage.
A key feature of the system is its two-tier compensation structure. The first tier is the registered owner’s liability, supported by insurance or other financial security. The second tier is the HNS Fund, which may provide additional compensation where the owner’s liability is insufficient or compensation is otherwise unavailable. The total compensation available under the Convention may reach 250 million SDR per incident.
The regime will be especially relevant for ships carrying hazardous and noxious substances to or from ports in States that are party to the Convention. There is no general minimum tonnage threshold, meaning the certification requirements may apply to a broad range of vessels. Industry bodies have estimated that tens of thousands of ships could require certificates before the Convention takes effect.
For shipowners, operators, charterers and others involved in relevant trades, the period before November 2027 will be important for understanding how the new requirements may affect documentation, insurance and trading arrangements. The Convention also underlines the importance of accurate cargo information, as the treatment of hazardous and noxious substances depends on their classification and the circumstances in which they are carried.
BIMCO is following developments relating to implementation, certification, insurance arrangements and the potential implications for contracts and clauses. We will provide members with further guidance as practical details become clearer.
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