• Nairobi International Convention on the Removal of Wrecks
  • January 8, 2016 | Authors: Dionysios Rossi; Graham Walker
  • Law Firm: Borden Ladner Gervais LLP - Vancouver Office
  • In June 2015, Transport Canada released a discussion paper (the "2015 Discussion Paper") regarding the possible development of a regulatory regime to comprehensively address the hazards associated with shipwrecks, including the potential Canadian adoption of the Nairobi International Convention on the Removal of Wrecks, 2007 (the "Nairobi Convention") and the development of further rules to augment the Nairobi Convention in the Canadian context.

    The Nairobi Convention, to which Canada is not a party, was adopted by the IMO in May 2007 and came into force for State Parties on April 14, 2015. Transport Canada had previously released a discussion paper in April 2010 requesting input on whether Canada should ratify the Nairobi Convention and apply its provisions to Canada's internal waters and territorial sea. The responses to that discussion paper were generally favourable, so the 2015 Discussion Paper posits that any proposed regime would be based on the Nairobi Convention.

    In Canada, the "hazards" that can arise from a shipwreck are governed by at least eight federal laws. For instance, the Navigation Protection Act, RSC 1985, c N-22 requires that the owner of an obstruction, including a wreck take certain reporting and removal actions and they can be ordered to secure, remove or destroy the obstruction by the Minister of Transport. Under the CSA, 2001, if the Minister of Fisheries and Oceans has reasonable grounds to believe that a vessel, including a wreck, is discharging or is likely to discharge a pollutant, he or she may take mitigation measures to repair, remedy, minimize or prevent pollution damage, as well as order any person or vessel to take such measures. Further, the MLA provides strict liability and compensation regimes for all pollution damages from any oil spills and for costs and expenses incurred by the Minister of Fisheries and Oceans or of any person in Canada. The MLA does not create a specific liability regime for shipwrecks and there is no requirement for shipowners to have marine insurance related to shipwrecks.

    The 2015 Discussion Paper notes that in order to comprehensively address the hazards associated with shipwrecks, the proposed regime would have to extend the application of the Nairobi Convention to more vessels (e.g. non-seagoing vessels such as the Great Lakes fleet), extend certain provisions beyond what exists in the Nairobi Convention (e.g., compulsory insurance), and consider unique provisions for other circumstances not covered by the Nairobi Convention (e.g. liability for removal of towed objects).

    The proposed regime outlined in the 2015 Discussion Paper would impose strict liability on shipowners by requiring that they remove or remediate, at their own expense, any commercial vessels and pleasure craft that become hazardous wrecks. To ensure that shipowners have the necessary financial resources to meet this obligation, the proposed regime would require all Canadian ships and all foreign ships that call at Canadian ports that are 300 gross tons and above to maintain insurance or financial security for wreck removal or remediation in accordance with Article 12 of the Nairobi Convention. The Discussion Paper also proposes that the insurance policies would need to allow for a direct action against the insurer for claims related to wreck removal and remediation, though insurers' liability would be limited to the amount of liability under the LLMC. This would prohibit or render ineffective standard "pay to be paid" clauses that usually require the shipowner to pay any claim before being indemnified by the insurer.

    In the event that the owners fail to take appropriate action or where the situation requires immediate action, the proposed regime would allow Canadian authorities to facilitate the removal or remediation of a hazardous wreck. The Nairobi Convention provides a broad definition of "hazard," which includes conditions or threats to navigation, the marine environment, or "damage to the coastline or related interests" of one or more State Parties. Among other things, these "related interests" extend to the health of coastal populations and the "wellbeing of the area concerned, including conservation of marine living resources and of wildlife."

    The 2015 Discussion Paper also proposes that a number of violations and offenses be created and be subject to either administrative monetary penalties or fines upon summary conviction depending on their severity. Under the proposed regime, a vessel and its owners, operator and/or master could be charged and liable for the penalty and vessels could be detained at a Canadian port or subject to other restrictions.

    The proposed regime would apply to vessels whether or not they are registered, listed, or licensed under the CSA, 2001, but would not apply retroactively to wrecks in existence prior to its coming into force.