Session 2010-11

wreck removal convention Bill

as brought from the House of Commons on 21st March 2011 [HL Bill 59 ]

Explanatory Notes

WRECK REMOVAL CONVENTION BILL

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EXPLANATORY NOTES

INTRODUCTION

1. These explanatory notes relate to the Wreck Removal Convention Bill as brought from the House of Commons on 21 st March 2011 . They have been pr ovided by the Department for Transport with the consent of Baroness Stowell of Beeston the member in charge of the Bill, in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament .

2. The se notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

BACKGROUND AND SUMMARY

3. The Nairobi International Convention for the Removal of Wrecks (ICRW) was adopted by the International Maritime Organisation (IMO) in May 2007. The IMO is the United Nations specialised agency with responsibility for safety and security at sea and prevention of marine pollution from ships. The text of the ICRW is included in the Schedule to the Bill.

4. The ICRW will enter into force twelve months following the date on which ten member states either have signed it without reservation as to ratification, acceptance or approval, or have deposited instruments of ratification, acceptance, approval, or accession with the IMO Secretary General. It will apply only to wrecks that occur after its entry into force. It is anticipated the Bill will commence when the Convention enters into force.

5. The Bill provides measures to enable the United K ingdom to ratify and implement the ICRW in the U nited Kingdom ’s domestic law by the insertion of new sections (255A to 255 U ) and a Schedule (11ZA) into the M erchant S hipping A ct 1995.

OVER ALL STRUCTURE OF THE BILL

6. The Bill has the following t wo clauses and a Schedule :

2.

1 Wreck Removal Convention

2 Short title and commencement

Schedule (text of the ICRW)

COMMENTARY ON CLAUSES

Clause 1 : Wreck Removal Convention

7. Clause 1 inserts Part 9A, new sections 255A to 255 U, and new Schedule 11ZA into the Merchant Shipping Act 1995 (the Act). Therefore the following refers to new sections of the Act. These new sections implement the I CRW , providing for the marking and removal of wrecks in the Convention area and recovery of the costs of so doing.

Section 255A "The Wrecks Convention"

8. This new section defines " the Wrecks Convention" itself and a " Wreck Convention State ". It also inserts new Schedule 11ZA, which sets out the text of the Wrecks Convention.

Section 255B – Wreck reports

9. This new section require s the master and the operator of a ship registered in the U nited Kingdom to report an accident , which results in the ship, or any part of the ship or cargo becoming wreck, without delay to the member s tate in whose Convention area it falls. Therefore if the wreck is located in the U nited K ingdom ’s Convention area it must be reported to the Secretary of State; if the wreck is located in another s tate’s Convention area then the wreck must be reported to the g overnment of t hat s tate .

10. The new section requires the information to be reported to include that required under paragraph 2 of Article 5 of the Wrecks Convention , which may be summarised as the location , the wreck’s type, size and construction , the damage , details of the cargo and details of all oil on board .

11. The new section makes it an offence for the master and operator of a U nited Kingdom ship not to report a wreck. If neither reports, then each is to be guilty of an offence. If one has reported it, the other is no longer under a duty to report it. The offence is to be punishable by a fine, to a maximum of £50,000 on summary conviction , or to no maximum on conviction on indictment (no maximum).

Section 255C – Locating and m arking wrecks

12. This new section a p plies where an accident occurs in the United Kingdom ’s Convention area. This new section imposes a duty on the Secretary of State to ensure that the U nited Kingdom complies with its obligations under Articles 7 (location) and 8 (marking) of the ICRW . In discharging this duty, the Secretary of State may direct a general lighthouse authority, harbour authority or conservancy authority to take steps he or she specifies to locate and mark the wreck. Such a written direction must be complied with.

13. This new section provides that for the purposes of new s ection 255C(3 ) and ( 4) and , where a direction is given, section 253 of the Act, a general lighthouse authority’s area will include any area that is both adjacent to the area specified in relation to the authority under section 193(1) of the Act and within the United Kingdom’s Convention area .

14. This new section specifies that any direction may require an authority to exercise or not exercise a power granted it under section 252 or 253.

Section 255D – Removal by registered owner

15. This new section applies in respect of a wreck in the U nited Kingdom ’s Convention area which the Secretary of State has determined to be a hazard. The Secretary of State must take all reasonable steps to give the registered owner notice in writing (a "wreck removal notice") to comply with the obligations imposed upon the owner by the ICRW both to arrange for the removal of the wreck and to provide evidence that they have sufficient insurance to cover their liability under the ICRW , as required by paragraph 2 and 3 of Article 9 of the ICRW .

16. The wreck removal notice must include the timescale for removal and inform the registered owner of the other matters set out in paragraph 6(b) and (c) of Article 9 of t he ICRW .

17. A registered owner who does not comply with a wreck removal notice without reasonable excuse is guilty of an offence. The offence is to be punishable by a fine, to a maximum of £50,000, on summary conviction , or to no maximum on conviction on indictment .

Section 255 E Imposition of condi tions about removal

18. This new section a pplies if the Secretary of State has given a registered owner a w reck r emoval n otice. The Secretary of State m a y impose conditions in the w reck r emoval n otice in accordance with paragraph 4 of Article 9 of the ICRW , to ensure removal is consistent with s afety or protection of the marine environment .

19. A registered owner who does not comply with a condition under this section without reasonable excuse is guilty of an offence. The offence is to be punishable by fines, on summary conviction to a maximum of £50,000, or to no maximum on conviction on indictment .

Section 255 F – Removal in d efault

20. This new section enables the Secretary of State to remove a wreck in the United Kingdom’s Convention area in the circumstances set out in paragraph 7 (registered owner does not meet deadline or is uncontactable) or 8 (immediate action is needed) of Article 9 of the ICRW . Alternatively the Secretary of State may direct a general lighthouse authority, harbour authority or conservancy authority in writing to undertake the removal. A direction may only be given to an authority in relation to wrecks within that authority’s area. If the Secretary of State issues a direction then this direction must be complied with .

Section 255 G Liability for costs

21. This new section concerns liability for costs that have been incurred in the locating, marking or removal of any wreck within the U nited K ingdom ’s Convention a rea.

22. These costs may be recovered directly from the sh ipowner (and so, if section 255 P applies, directly from the shipowner’s insurer) unless the owner ( or insurer ) proves that any of the exceptions provided for under paragraph 1(a), (b) or (c) of Article 10 of the ICRW are applicable, or the liability is in conflict with other Conventions detailed under A rticle 11(1) of the ICRW or such other provisions that the Secretary of State may specify by order. An order made under this section is to be subject to the affirmative resolution procedure.

23. Where two ships are involved and costs cannot reasonably be separated, the registered owner’s liability is to be joint and several.

24. The right to limit liability under section 185 (limitation of liability for marine claims ), which gives effect to the Convention on Liability for Marine Claims, is preserved.

Section 255 H – Limitation period

25. Claims under new section 255 G for recovery of costs associated with locating, marking or removing a wreck are subject to a time limit. The claim must be brought within 6 years of the accident or, if sooner, within 3 years from the date on which a wreck removal notice was issued under new section 255D.

Section 255 I Expenses of general lighthouse authorities

26. This new section provides for unrecovered costs incurred by g eneral l ighthouse a uthorities (GLAs ) in complying with directio ns under new sections 255C and 255 F of the Act to be reimbursed from the General Lighthouse Fund (GLF) and provides for the application of s ection 213 of the Act . Section 213 requires payments out of the GLF to have been allowed as part of a GLA’s establishment expenses or approved by the Secretary of State . Each GLA must submit an estimate of expenses in respect of lighthouses, buoys and beacon s . I n an emergency a GLA may incur expenses without waiting for approval , but the GLA must submit a full account expense s as soon as possible after wards .

Section 255J – Wreck removal insurance

27. This new section covers the compulsory insurance and state certification requirements. Any ship of 300 gross tonnage and above may not enter or leav e a United Kingdom port or offshore installation unless it has insurance or other security compatible with Article 12 of the ICRW ("wreck removal insurance") and carr ies a wreck removal insurance certificate confirming that such insurance or other security is in place.

28. The wreck removal insurance certificate of a ship registered in a Wrecks Convention State must have been issued by that s tate. The Secretary of State will issue the certificate for a U nited Kingdom flagged ship and may issue a certific ate for a ship registered in a s tate which has not ratified the Convention.

Section 255K – Failure to insure

29. This new section provides that if a ship enters or leaves (or attempts to enter or leave) a port or offshore installation in the U nited K ingdom without the required certificate attesting that insurance is in place, the master and operator will commit an offence. The offence is to be punishable by a fine, to a maximum of £50,000, on summary conviction , or to no maximum on conviction on indictment .

Section 255L – Detention of ships

30. This new section makes provision for a vessel to be detained if either the insurance or wreck removal insurance certifica tion requirements are not complied with. Section 284 of the Act already provides for the enforcement of any detention under the Act.

Section 255 M – Production of certificates

31. This new section requires the master of the ship to ensure the wreck removal insurance c ertificate is carried on board, and to produce it when requested . Failure to comply is an offence liable on summary conviction to a fine not exceeding level 5 on the standard scale (currently £5000 ) .

Section 255 N – Issue of certificates

32. This new section requires the Secretary of State to issue a wreck removal insurance certificate for a U nited Kingdom ship on application by the registered owner if he or she is satisfied that the insurance in place will cover the liability under the Wrecks Convention . H owever , if the Secretary of State is not satisfied that this is the case then he or she can refuse to issue a certificate . The Registrar General of Shipping and Seam e n will be sent a copy of the certificate. The Secretary of State may also issue a certificate f or a ship registered in a State which is not party to the Wrecks Convention .

Section 255 O – Cancellation of certificates

33. This new section allows the Secretary of State to make regulations enabling a certificate issued under section 255N to be cancelled and requiring a person to deliver up a cancelled certificate . If the certificate is not given up then this clause introduces an offence where the fine upon conviction w ill not exceed level 4 on the standard scale (currently £2500 ) .

Section 255 P – Third parties’ rights against insurers

34. This new section provi des that a person who is entitled to recover costs from a shipowner under section 255G has the right of direct action against th at shipowner’s wreck removal insurer s .

35. The insurer s are allowed to limit their liability in the same manner and extent as that of the shipowner, and claim defences which would be available to the shipowner. In addition the insurer s may limit liability where the shipowner is not entitled to limit his liability under the International Convention on Limitation of Liability for Maritime Claims (LLMC) 1976 and the 1996 Protocol (i.e. where the loss resulted from the shipowner's personal act or omission, committed with the intent to cause such loss, or recklessly and with the knowledge that such loss would probably result).

36. The insurer s also have an additional defence if the incident was due to the wilful misconduct of the shipowner.

37. Similar provisions are contained in section 165 of the Act in relation to the International Convention on Civil Liability for Oil Pollution Damage 1992 .

Section 255 Q – Electronic certificates

38. This new s ection allows, under A rticle 12 (13) of the ICRW , for the use of electronic insurance certificates, which would mean ships not being require d to have an actual certificate of insurance when entering or leaving a port or arriving or leaving an offshore facility, if the Secretary of State has informed the Secretary-General of the International Maritime Organisation that the United Kingdom maintains records in an electr onic format, accessible to all s tate p arties, attesting to th e existence of the certificate.

39. Should the Secretary of State decide at some time to allow electronic certificates then appropriate changes to Part 9A inserted by this Bill may be made by order, subject to the affirmative resolution procedure.

Section 255 R – Interpretation

40. This new section provides that the expressions used in Part 9A are to be construed in accordance with Article 1 of the ICRW, which contains the ICRW ’s definitions. It adds the further definitions necessary for the purpose of Part 9A ( defini ti ons of "accident", "insurer", "wreck removal insurance", "wreck removal insurance certificate", "wreck removal notice", "the Wrecks Convention" and "Wrecks Convention State").

41. It requires the Secreatry of State to take into account the matters in Article 6 of the Convention when determining whether a wreck is a hazard.

42. The Secretary of State is also required to make an order describing the United Kingdom’s Convention area. The ICRW provides in Article 1 that that area is to be the Exclusive Economic Zone (EEZ) as established in accordance with international law, but if such a zone does not exist, a Party State may declare a zone of equivalent size. T he United Kingdom does not yet ha ve an EEZ but if one is designated in accordance with section 41 of the Marine and Coastal access Act 2009 before the provisions come in to force , that will be the Convention area . Otherwise it is proposed to declare a Convention area based on the Pollution Control Zone which is prescribed by the Merchant Shipping (Prevention of Pollution) (Limits) Regulations 1996 (S.I .1996/2128) ) . It is also proposed that the U nited Kingdom ’s Convention a rea should include the U nited Kingdom ’s territory and territorial sea, in exercise of the option in t he ICRW.

Section 255 S – Government ships

43. This new section provides for the extent to which the new Part 9A applies to ships used by s tates . Warships and ships being used by a s tate for non-commercial purposes only will be excluded from the clauses under Part 9A , unless a s tate notifies the Secretary-General of the IMO that the ICRW is to apply (article 4 paragraph 3) The offence of not having insurance in section 255K does not apply to an ‘exempt ship’ , which must have a certificate showing that it is owned by the s tate and that the insurance liabilities will be met. A company registered in a s tate as the operator of a ship owned the s tate is treated as the registered owner under Part 9A.

Section 255T – Power to amend

44. This new section provides an order making power under which the Secretary of State m ay amend Part 9A if the ICRW is amended . Orders made under this power are to be subject to affirmative resolution procedure as they involve amendment of primary legislation .

Clause 2 Short title and commencement

45. This clause provides that the short title of the Bill i s the W reck Removal Convention Act 2011 and also provides f or the commencement of the Act by an order made by the Secretary of State .

The Schedule

46. Th e Schedule sets out new Schedule 11ZA to the Merchant Shipping Act 1995. It contains the full text of the Wreck Removal Convention.

TERRITORIAL EXTENT AND APPLICATION

47. The Bill , which does not contain any provisions falling within the terms of the Sewel C onvention , will extend to England and Wales , Scotland and Northern Ireland . If necessary the Bill’s provisions may be later extended to United Kingdom ’s Crown Dependencies or Overseas Territories by an Order made under section 315 of the Merchant Shipping Act 1995.

FINANCIAL EFFECTS AND EFFECTS OF THE BILL ON PUBLIC SECTOR MANPOWER

48. In the U nited Kingdom , bodies such as local authorities, the MCA (the Mari time and Coastguard Agency, an executive agency of the Department for Transport) , General Lighthouse Authorities, Harbour and Conservancy Authorities are currently involved in responding to wreck incident s. These bodies bear , initially, all of the costs associated with the locating, marking and removal of wrecks. C ost recovery var ies from zero to full recovery, with an average of 70% of costs recovered .

49. The Bill would give legal force to the provisions of the Convention and put t he responsibility for the removal of a wreck with the shipowner. The shipowner would be required to follow written directions from the State for the removal of the wreck. Failure to follow this direction, or where the hazard posed by the wreck is particularly severe, would allow the UK authorities to remove the wreck and obtain reimbursement from the shipo wner and the insurance company.

50. Implementation of the Convention would make it easier for authorities in the a ffected s tate to recover from the shipowner or their insurers the costs associated with the locating, marking and removal of a wreck. It is expected that the cost benefit to the s tate would be positive.

51. The MCA would be responsible for the issue and inspection of State Certificates verifying that adequate insurance is in place. The MCA would charge for the issue of certificate s to cover administration and at 201 1 prices this is expected to be £16. The inspection regime would be part of the current Port State Control role they undertake and would not be an additional manpower burden.

SUMMARY OF IMPACT ASSESSMENT

52. An Impact Assessment has been published on the Department for Transport website, at www.dft.gov.uk/pgr/shippingports/shipping . The sectors wh ich may incur costs under this legislation are the register ed shipowners and shipping companies. However compliance costs will be insignificant compared with the potential benefits to the taxpayer s of the United Kingdom .

53. The Bill will produce significant non-monetarised benefits in safety improvements , both in harbours and at sea , which in turn will potentially lead to the avoidance of accidents and benefits in dealing with their aftermath both financially and environmentally.

COMMENCEMENT

54. The provisions in the Bill will be brought into force by O rder made by the Secretary of State. It is anticipated that will be when t he Convention comes into force.

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