Web alert: definition of "Ship" under Article I (1) of the 1992 Civil Liability Convention (CLC) – Final Report of the Seventh Intersessional Working Group (IOPC) published on 11 September 2015
News & Insights 24 September 2015
The seventh intersessional Working Group was set up in order to review and assess, among other issues, whether FSOs and FSUs (floating storage and offloading units) can be classified as ‘ship’ under Article I (1) of the 1992 CLC.
The final report of the IOPC’s Seventh Intersessional Working Group was published on 11 September 2015. The seventh intersessional Working Group was set up in order to review and assess, among other issues, whether FSOs and FSUs (floating storage and offloading units) can be classified as ‘ship’ under Article I (1) of the 1992 CLC. The uncertainties which surround FSOs and FSUs have been an ongoing problem for many years. The Working Group was requested to produce a report of its recommendations regarding a consistent assessment of the definition of ‘ship’ under Article I (1) of the 1992 CLC. The final report presents a set of recommendations to the 1992 Fund Assembly based on previous meetings held between Member States/country delegates. The 1992 Fund Assembly is now responsible to decide whether to accept such recommendations and whether to formally call on the Secretariat to create a guidance document which would reflect the final decisions of the Working Group. This guidance document would in turn be assessed and evaluated by the 1992 Fund governing bodies in spring 2016.
Do FSOs/FSUs fall within the definition of ‘ship?’
Categorising whether FSOs and FSUs fall within the definition of ‘ship’ under the 1992 CLC has been a grey area over the past 15 years. Many arguments have followed to solve this long-standing issue. To begin with, the definition of a ‘ship’ under the 1992 CLC reads as follows:
“…any sea-going vessel and seaborne craft of any type whatsoever constructed or adapted for the carriage of oil in bulk as cargo, provided that a ship capable of carrying oil and other cargoes shall be regarded as a ship only when it is actually carrying oil in bulk as cargo and during any voyage following such carriage unless it is proved that it has no residues of such carriage of oil in bulk aboard”.
It has been argued by some that the terminology used, ‘constructed or adapted for the carriage of oil’, provides a limit to the term ‘ship’ to those that are actually fit for the carriage of oil. Under this pretext, FSOs and FSUs may have the potential to satisfy this requirement provided they are able to carry oil in bulk.
Against this background, this issue was highlighted in the Second Intersessional Working Group’s Report (29 July 1999) which also analysed whether FPSOs/FSOs (termed as offshore crafts) fell under the definition of a ‘ship’ and concluded the following:
“(i) Offshore craft should be regarded as ‘ships’ under the 1992 Conventions only when they carry oil as cargo on a voyage to or from or terminal outside the oil field in which they normally operate.
(ii) Offshore craft would fall outside the scope of the 1992 Conventions when they leave an offshore oil field for operational reasons or simply to avoid bad weather”.
What has the Working Group recommended relating to the definition ‘ship’?
The hybrid approach (a twofold approach which is described below) was gradually formed during the meetings of the Working Group. The hybrid approach is a method designed and supported by various Member States/country delegates in order to differentiate vessels which fall within or outside the definition of ‘ship’ under the 1992 CLC by relying on agreed examples of vessels where possible and to then use “the maritime transport chain test” as an “interpretive tool” to address circumstances where it is difficult to determine whether the structure is a ‘ship’ or not. Thus, the Working Group’s overall view in considering whether the vessel falls within or out of the definition of ‘ship’ is to use the hybrid approach in order to ascertain such ambiguous matters.
When making such an assessment, the Working Group has recommended the 1992 Fund Assembly the following:
- To reach an agreement of “a non-exhaustive, indicative list which illustrates examples of vessels which clearly fall within or outside the definition of ‘ship’ under Article I (1) of the 1992 CLC, incorporating the comments agreed by the Working Group” (first part of the hybrid approach – the proposed list can be found on the right);
- To embrace the notion of “the maritime transport chain, as an interpretive tool” in order to address situations where it is unclear as to whether a vessel falls within the definition of ‘ship’ on a case-by-case basis (second part of the hybrid approach).
The maritime transport chain was initially proposed by the Spanish delegation and was later improved by the Australian delegation. The Working Group has also suggested that the 1992 Fund Assembly thoroughly analyse the question of when the maritime transport chain begins and when it ends.
The Working Group’s final report exhibited a comprehensive review of what needs to be addressed. The 1992 Fund Assembly is now required to make the following two decisions:
- Whether to accept the Working Group’s recommendations as described above;
- Whether to order the Secretariat to create a guidance document representing the Working Group’s final decisions.
The Working Group has recommended that the guidance document comprise, among other things: (i) a non-exhaustive list of examples of vessels which fall within or outside the definition of ship under Article I (1) of the 1992 CLC and (ii) an approved set of terms of when the maritime transport chain begins and when it ends. This guidance would be introduced to the 1992 Fund governing bodies for their careful investigation in spring 2016.
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