Download The Practicalities of HNS Reporting Requirements David Baker UK

National HNS Reporting
Requirements
David Baker
UK
Some practicalities - the UK experience to
date
Convention Requirements
Article 21 – requires Contracting State to identify
persons liable
Article 43 – requires that when ratifying the
Contacting State submits to the IMO details of
quantities of HNS in preceding year
The national legislation should :
 Provide
for introduction of the reporting
system prior to ratification
 identify the principal receivers and (as
applicable) physical receivers, the different
HNS receipts and the quantities
 provide a means to determine annual
fluctuations, eg set a national threshold
Industry concerns
 “The
financial obligations will prove a costly
burden on storage companies”
 “Storage companies are generally just third parties
with no responsibility for carriage by sea”
 ”Most HNS stored will come from non states
parties or will be destined for such states”
 “Liable companies will fragment to avoid financial
obligation”
Further industry concerns
 Practicalities
of passing on the financial
obligations to principal receivers
 Lack of contracts with principal receivers, eg port
authorities
 Liability when the principal receiver is not located
in a contracting state
Various scenarios
 The
following scenarios focus especially on the
financial responsibilities when HNS is handled
through intermediaries
 which
raises the most complexities under the
Convention
Scenarios
CARGO
PHYSICAL
RECEIVER
DESIGNATED
PRINCIPLE
Receiver based in
a State Party
Principle based
in a State Party
Receiver based in
a State Party
Principle based
in a non-State
Party
LIABILITY
Principle is liable
HNS
HNS
Agent is liable
Scenarios continued...
CARGO
PHYSICAL
RECEIVER
DESIGNATED
PRINCIPLE
Receiver based
in a State Party
Principle based
in any State
Receiver based
in a non-State
Party
Principle based
in any State
LIABILITY
Owner of LNG
prior to
discharge is
liable
LNG
HNS
Convention
does not apply:
No liability
Final Scenario
The physical receiver of HNS in a contracting state
is unable to identify the principal receiver, eg a
port authority without a contract:
 The
physical receiver becomes liable
In practise
 Storage
companies should be able to pass on the
liability and, if necessary, apply liability on the
principal receiver by contract
 The liability only arises when the HNS is received
from ships in a contracting state
 The level of liability will arise only after incidents
 The shipowner’s level of liability should cover
many incidents – a minimum of 10 million SDR
Practicalities of reporting
It will be necessary for national rules to apply :
 a statutory obligation to report on the initial
or intermediate receivers as well as the
obligation on the principal receivers to pay
levies
 This will provide the ‘audit trail’ to monitor
transhipments and to apply the financial
obligations on the ultimate receiver
Summary
The state will have to:
 determine the national regulations best suited to
the trading pattern,
 provide a practical regulatory system which will
ensure equity and certainty of meeting its reporting
obligations, and
 ensure the Fund is able to raise levies against the
appropriate receivers
Summary (continued)
Finally, the state should consider:
 Applying
the simplest practical definition of
‘receiver’ to avoid prolonged audit trails
 Implementing a statutory reporting system with
lower threshold than those set in the Convention.