The Arctic Guidelines only lay down general recommendations for accommodation standards on board ships in Arctic waters. All personnel accommodations, public spaces and equipment installed in them are to be designed and arranged to protect the occupants from unfavourable environmental conditions and to minimize risk of injury during normal (including ice transiting or ice breaking) operations and emergency conditions (Chapters 4.1 and 4.2). In the event of an emergency and/or of extended ice entrapment, ships (Polar Classes 1 to 5) are to have sufficiently available and reliable facilities in order to maintain a life sustaining environment. General reference is made to maintaining ventilation in working areas, and provisions are included for personal and group safety kits and protective clothing kits.
Outside STCW or the ILO standards (ILO 180, 1996 and MLC, 2006), there do not appear to be any special requirements for minimum hours of rest or maximum hours of work and safe manning despite navigation under what could be regarded as especially hazardous conditions. The general minimum requirements for seafarers working on a ship relating to conditions of employment, accommodation, recreational facilities, food and catering, health protection, medical care, welfare and social security protection as set out in the MLC, 2006 and the predecessor ILO conventions (Appendix A), are also applicable to seafarers involved in Arctic navigation (in international and domestic national waters) for states party to these conventions.
There is a longstanding tradition to provide assistance to persons in distress at sea, observed by both coastal state authorities and other ships in the vicinity of the persons in need of rescue. This duty is frequently legislated by maritime states as a requirement for ships flying their flags. The SAR Convention provides a system for the rescue of persons at sea and cooperation among states for this purpose. The IMO has established thirteen major search and rescue areas around the world, within which coastal states have designated search and rescue regions. The SAR Convention requires parties to establish rescue coordination centres and sub-centres, to establish ship position reporting systems and to expedite the entry of rescue units from other states into their territorial waters. Arctic state parties to the SAR Convention must ensure that rescue resources are available in the Arctic area under their jurisdiction during the shipping season and should cooperate with each other as required.
To facilitate maritime safety communications, the IMO adopted the Global Maritime Distress and Safety System (GMDSS). It is mandatory for all SOLAS Convention parties’ cargo ships of 300 gross tons or greater and all passenger ships on international voyages. The Arctic is considered as Sea Area A4 for GMDSS purposes. Some Arctic coastal states are responsible for coordination of one or more navigational areas, known as NAVAREAs, within the World Wide Navigation Service (Table 5). NAVAREAs are navigational areas within the World Wide Navigational Service designated for the issue of navigational warnings and related maritime safety information within the GMDSS. Recently, the IMO’s Sub-Committee on Communications and Search and Rescue (COMSAR) endorsed the creation of Arctic NAVAREAs up to 90 degrees North (Figure 3) proposed by a joint IMO/IHO/WMO group and approved by the MSC (IMO COMSAR, 2007; IMO MSC, 2007). Further, coastal states are responsible for the promulgation of maritime safety information in navigable waters within those areas. METAREA (meteorological information) Issuing Service providers in Canada, Norway and the Russian Federation were identified, with the United States and Denmark agreeing to be Preparation Service providers for designated areas (IMO COMSAR, 2008). METAREAs are meteorological areas corresponding to the NAVAREAs defined by the IMO. The new areas should be fully operational 24/7, bearing in mind that portions of the NAVAREAs will not be navigable during certain times of the year. Discussions are now underway with commercial satellite service providers concerning transmission and monitoring of warnings (IMO COMSAR, 2008).
Marine Environmental Rules and Standards
Onboard Waste Management and Operational Ship-Source Pollution
Over the past five decades the management and discharge of operational wastes on board ships has been a major global concern for the international community (Gold, 2006). As part of their normal operations ships generate a wide variety of wastes including waste oil, oily water from tanker operations, waste engine oil, noxious liquid substances, sewage and garbage, generally resulting in pollution of the coastal and marine environment. The old habit of direct discharge into the marine environment is long gone, as onboard waste management is now a regulated activity.
The impact of ship-source pollution may be exacerbated in semi-enclosed seas like the Arctic Ocean. Geography imposes hydrological limitations, in effect trapping the wastes, including non-biodegradable wastes in the region’s marine environment for decades. The presence of ice and very cold temperatures for much of the year are likely to contribute to long-term presence of ship waste discharged in the Arctic. It is therefore imperative that emphasis is placed on prevention of ship-source pollution (Vidas, 2000; National Research Council, 2001) and proper waste reception (DNV, 2006).
Adopted under the auspices of the IMO, the International Convention on the Prevention of Pollution from Ships, better known as MARPOL 73/78, establishes a system of international standards for onboard multi-waste management and eventual discharge (MARPOL, 1973/78; IMO, 2002). MARPOL can be expected to play an important role in the protection of the Arctic marine environment. Mandatory technical rules and procedures of MARPOL are found in the six annexes which respectively deal with the prevention and control of pollution by oil (I), noxious liquid substances (II), harmful substances in packaged form (III), sewage from ships (IV), garbage from ships (V), and air pollution from ships (VI). MARPOL does not totally prohibit the discharge of wastes in the marine environment, a point worth noting when considering the protection needs of the sensitive Arctic marine environment.
Not all state parties to MARPOL are necessarily parties to all the annexes. When a state becomes a party to MARPOL, it effectively becomes a party to both the convention and the first two annexes, whereas the other annexes are optional. Non-party states to one or more of Annexes III to VI (see Appendix D) consequently are not required to enforce the standards of the latter annexes to their ships.
Perhaps the most significant annex for the protection of the Arctic environment is Annex I. Annex I requires that the oily ballast discharge by an oil tanker must occur more than 50 nautical miles from the nearest land and must not exceed 30 litres per nautical mile. The total quantity of oil discharged must not exceed not exceed 1/15,000 of the cargo carrying capacity (for old tankers) and 1/30,000 of total cargo carried (for new tankers) irrespective of whether the oil is persistent or non-persistent. An oil record book has to be maintained to record all movement of cargo oil and residues from loading to discharging, and including tank-to-tank transfer operations on board. Annex I also establishes a 15 ppm discharge limitation on oily bilge water from oil tankers, as well as from other ships.
A major concern with the oil trade is single-hull tankers. Amendments to MARPOL in 1992 introduced a mandatory requirement of double hulls for new oil tankers and a phase-out period for existing single-hull tankers. The phase-in period was further expedited through 2003 amendments. Other revisions to Annex I establish higher standards for new ships including double bottoms for pump rooms and accidental oil outflow performance to provide better protection against oil pollution in cases of strandings and collisions. Also of interest to the Arctic is the proposal of Norway, on behalf of the 28th Consultative Meeting of the Antarctic Treaty in 2005, to amend MARPOL 73/78 Annex 1 to introduce a prohibition on the carriage of heavy grade oil as cargo and fuel oil in the Antarctic Area (IMO MEPC 54, 2006). This proposal has raised concerns on the part of the International Council of Cruise Lines (IMO MEPC 56, 2007a).
Annex IV sets out sewage regulations that apply to ships of 400 gross tonnage or more, or ships that are certified to carry more than 15 persons. Sewage may be discharged at a distance of more than three nautical miles from the nearest land when a ship has an approved treatment system and the sewage discharged is comminuted and disinfected. Sewage which is not comminuted and disinfected may be discharged at a distance of more than 12 nautical miles from the nearest land if the ship is proceeding at not less than 4 knots and the discharge is not instantaneous but at a moderate rate. Coastal states may impose less stringent sewage discharge limits. For example, the Canadian Arctic Shipping Pollution Prevention Regulations (ASPPR) permit the discharge of sewage, defined as “human or animal waste generated on board ship and includes wastes from water closets, urinals or hospital facilities handling fecal material,” without regard to distance from land (Canada, 1978a, Reg. 26).
Annex V, while prohibiting the disposal of plastics into sea, still allows ships to discharge some garbage generated by normal operations of a ship and depending on the distance from land. For example, ships are allowed to dispose of packing materials more than 25 miles offshore, and paper, rags, glass, metal and bottles if beyond 12 miles. All ships of 400 gross tonnage and above, and every ship certified to carry 15 persons or more, must keep a garbage record book and record all disposal and incineration operations. A garbage management plan is also required. IMO guidelines for the implementation of Annex V urge that a preference be given to disposal of garbage at shore reception facilities. IMO is presently undertaking a comprehensive review of Annex V and recommendations for further action can be expected.
Annex VI, which sets limits on sulphur oxide and nitrogen oxide emissions from ship exhaust and prohibits deliberate emissions of ozone depleting substances, is also undergoing major review. The current Annex includes a global cap of 4.5% m/m on the sulphur content of fuel oil, while in special sulphur oxide emission control areas (SECAs) the sulphur content must not exceed1.5% m/m. The MEPC at its 57th Session (31 March – 4 April 2008) approved with a view to circulating for subsequent adoption at its 58th Session in October 2008 draft amendments to Annex VI which would impose stricter air pollution standards, including a phased reduction in sulphur content of any fuel oil used on board ships (IMO MEPC 57/21, 2008).
The IMO is also actively considering ways to reduce greenhouse gas emissions from sulphur. The MEPC at its 57th Session decided to re-establish the Intersessional Correspondence Group on Greenhouse Emissions from Ships with a mandate to further consider possible control measures with a final report to be presented to the MEPC’s 59th Session (IMO MEPC 57/21, 2008).
Where the general ship discharge rules set out under the various annexes are not sufficient for the protection of sensitive areas, MARPOL Annexes I, II and V provide for the designation of special areas by the IMO. Special area is defined as “… a sea area where for recognized technical reasons in relation to its oceanographic and ecological conditions and to the particular character of its traffic, the adoption of special mandatory methods for the prevention of sea pollution by oil, noxious liquid substances, or garbage, as applicable, is required” (IMO Special Area Guidelines, 2002). The Antarctic area (defined as south of 60o latitude) is designated as a special area under Annexes I, II and V. The effect of special area designation is a higher standard for discharges. Thus, in the Antarctic area an Annex I amendment made in 2004 (Regulation 15, in force on 1 January 2007) prohibits any discharge into the sea of oil or oily mixtures from any ship. This zero oil discharge standard, which applies to all ships irrespective of tonnage while in Antarctic waters, is higher than for other special areas such as the Baltic.
Special area designation entails an amendment to the relevant MARPOL 73/78 annex. A major condition for the designation of special areas is an undertaking by regional coastal states in the special area designated to provide reception facilities in their ports for the wastes concerned. For example for the purposes of Annex I, Mediterranean, Black Sea and Baltic Sea states undertook to “ensure that all oil loading terminal and repair ports within the special area are provided with facilities adequate for the reception and treatment of all the dirty ballast water and tank washing water from oil tankers” and for those ports to “be provided with reception facilities for other residues and oily mixtures from ships” (MARPOL 1973/78, Annex I, Reg. 10 (7)(a)(i) and Reg. 12). These facilities must have the capacity to ensure there is no undue delay. The special area designation does not take effect until the states in the special area inform the IMO that the port reception facilities are in fact established. This has been a concern in some marine regions, where the establishment of port reception facilities did not occur until many years after the special area designation occurred (Chircop, 2005). Should MARPOL 73/78 special area designation be considered for Arctic waters, it will be important for Arctic states to consider what reception facilities may need to be developed in their ports to ensure compliance with the designation.
The Arctic may satisfy at least the first two conditions for special area designation, namely oceanographic and ecological, if not also ship traffic conditions, as set out in the IMO Guidelines for the Designation of Special Areas under MARPOL 73/78 (IMO Special Area Guidelines, 2002). The physical conditions of the Arctic, such as restricted hydrology and ice conditions, “may cause the concentration of harmful substances in the waters or sediments of the area.” The ecological conditions in the Arctic include both marine and non-marine species (e.g., polar bears, birds), habitats, migratory routes, and fragile coastal and marine ecosystems. In addition, the indigenous peoples of the Arctic depend on the land and resources of the region for cultural reasons and subsistence and would require alternative sources of livelihood should their resource base be impaired. With regard to ship traffic conditions, it would need to be demonstrated that “
The sea area is used by ships to an extent that the discharge of harmful substances by ships when operating in accordance with the requirements of MARPOL 73/78 for areas other than special areas would be unacceptable in the light of the existing oceanographic and ecological conditions in the area.” Although at this time ship transits through the Arctic Ocean are relatively few, it is arguable that the threat is not posed by numbers as much as by the nature of the threat, for example the potential discharge of oil or oily waste as may be permitted by MARPOL in an environment that is very sensitive to even the smallest of discharges (AMAP, 2007, 9).
The IMO Arctic Guidelines play a potentially important role in complementing MARPOL. The Guidelines recognize the lack of repair and waste reception facilities, communications limitations, unique navigational and environmental hazards and limited response capabilities in Arctic ice-covered waters (IMO Arctic Guidelines, 2002, Chapter 16.1.1). In effect, in many parts of the Arctic a ship is likely to find itself on its own with limited prospects of timely assistance when in need.
The London Convention 1972 and its 1996 Protocol govern ocean dumping from ships and of ships in the Arctic. “Ocean dumping” refers to wastes and other matter loaded for dumping. It excludes wastes from normal ship operations. The London Convention takes a permissive approach to ocean dumping and just about anything may be dumped except those wastes listed on a “black list” pursuant to a national ocean dumping permit. The 1996 Protocol adopts a precautionary approach whereby only wastes listed on a global “safe list,” such as dredged material, fish wastes, organic wastes of natural origin, and ships from which hazardous materials have been removed, may be disposed of subject to a waste assessment audit and a national permit (VanderZwaag & Daniels 2008).
Contingency Planning for Accidental Oil Pollution
The sensitivity of the Arctic to pollution from oil and other hazardous substances underscores the need for preventive measures to avoid accidents and incidents that could release such substances into the marine environment. At this time there does not appear to be a capability anywhere for the effective removal of hydrocarbon pollutants from ice-infested waters, although some experiments have taken place. The Arctic Oil and Gas Assessment 2007 concluded that oil spills are the largest threat to the marine environment (AMAP, 2007, 24). In addition to international regulations aimed at preventing pollution from indiscriminate waste discharges, poor ballast waters management and oil transport, the IMO has adopted an instrument aimed at promoting international cooperation in contingency planning and response. The International Convention on Oil Pollution Preparedness, Response and Co-operation is in force, and all Arctic states are parties (OPRC Convention, 1990). In 2000 a protocol on hazardous and noxious substances (HNS) was adopted and entered into force in 2007 (OPRC/HNS Protocol, 2000). These instruments are particularly relevant for Arctic shipping, where incidents may occur in remote locations and coastal state assistance might not be readily available.
OPRC state parties are required to establish measures for dealing with oil and HNS pollution incidents, either nationally or in co-operation with other countries. Ships and offshore installations within the jurisdiction of Arctic state parties must have onboard oil pollution emergency plans (SOPEP), including a plan for responding to ice damage, which are to be coordinated with national response systems for prompt and effective response. There should be a written procedure to effect damage repair and mitigate pollution. Crews should be exercised in damage control and materials for this purpose should be on board. Ships have a duty to report pollution incidents to coastal authorities. OPRC also calls for the establishment of stockpiles of oil spill combating equipment, the holding of oil spill combating exercises and the development of detailed plans for dealing with pollution incidents. State parties have a duty to provide assistance to other states in pollution emergency situations.
The Arctic Council established the Emergency Prevention Preparedness and Response (EPPR) Working Group to provide a forum for regional governments and indigenous peoples (Permanent Participants) to cooperate in dealing with environmental threats from accidental pollution. Operating under the lead country principle, the specific objectives of the EPPR are to:
• Improve prevention measures aimed at reducing accidents in the Arctic, including source control management programs,
• Improve emergency preparedness programs at local, national, regional and international levels to ensure they are commensurate with the level of risk that exists, including arrangements for mutual assistance, and
• Improve response capabilities so that they are commensurate with existing threats (Transport Canada, 2007).
While the EPPR is consistent with the expectations for cooperation under the OPRC, it is not a response agency and has served as a forum for exchange of information and conducting projects. The EPPR Working Group has noted the need to increase communication within the Oil Pollution Preparedness, Response and Cooperation (OPRC)/OPRC-HNS Technical Group (under IMO) and to share information in such areas as dispersant application, waste removal and treatment, in-situ burn up, and spill response in ice and snow conditions (EPPR, 2007).
Several Arctic states have joint contingency planning arrangements. They include, among others, the Canada/United States Joint Marine Pollution Contingency Plan, most recently revised in 2003 and having as Annex 4, CANUSNORTH for the Beaufort Sea area (Canada/United States, 2003), and the Canada/Denmark Agreement for Marine Environmental Cooperation (Canada/Denmark,1983), which includes annexes for responding to shipping and offshore hydrocarbon spills (Environment Canada, 2006).
Anti-fouling Systems
Ships use anti-fouling systems to prevent algae and molluscs, or other marine organisms, from attaching themselves to the hull below the waterline, thereby slowing down the ship and increasing fuel consumption. These anti-fouling systems can be any coating, paint, surface treatment, surface or device that is used on a ship to control or prevent attachment of unwanted marine organisms. One of the most common systems used, anti-fouling paint, contains substances that can harm human health and marine species. Tributylin (TBT), an active ingredient in certain anti-fouling paints, is considered to be the most toxic human-introduced substance in the marine environment. It became widely available in Canada and the United States by the 1960s and in other countries in the 1970s. In addition to its concentration in hotspots such as ports and harbours, and in semi-enclosed seas such as the Baltic, it has also been traced in ocean-going highly migratory species, suggesting continued contamination in the open ocean.
TBT contamination is arguably of potential concern for the Arctic waters and species. It has been traced and monitored in Iceland’s sub-Arctic waters and in the harbour porpoises on the west coast of Greenland (IMO MEPC, 2006).
In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-Fouling Systems on Ships to combat use of TBT (AFS Convention, 2001). The Convention entered into force on 17 September 2008. Although several Arctic Council members regulate TBT use, only Denmark, Norway and Sweden are parties to the Convention. As of 1 January 2008, the European Union introduced a complete ban on the use of TBT-based paints, both on EU ships and ships visiting European ports (EC, 2003). The IMO has suggested that anti-fouling paints are not necessary for icebreakers in deep polar waters as ice action scrapes off fouling organisms (IMO MEPC 55, 2006), but it should be noted that most vessels in polar waters are not icebreakers.
Ballast Water Management
The majority of the world’s ships carry some form of “ballast” to ensure ship stability and structural integrity, particularly, when they are not fully laden with cargo. Since the late 1800s ballast has taken the form of sea-water pumped aboard (taken up) in a ship’s ballast water tanks when cargo is unloaded in port and discharged in the next port when new cargo is loaded (or en route when the ship’s safety and structural integrity requires this adjustment). This means that port or near coastal water from one place in the world is transferred by a ship throughout the world (Dudley et al., 1994; Gold, 2006).
UNCLOS recognizes that international trade using ships has resulted in the movement of “alien species” (living organisms and pathogens) attaching either to ships’ hulls or equipment (hull fouling) and in ships’ ballast water (McConnell, 2003; Doelle et. al., 2007). Both UNCLOS (Art. 96(1)) and the 1992 Convention on Biological Diversity (CBD) call on parties to prevent or control marine alien species (Art. 8(h)).
The movement of these organisms can displace local marine species (e.g., the zebra mussel in the Great Lakes and the comb jellyfish in the Black Sea) or create a risk to human health (e.g., introduction of cholera, red tide). The economic, human and eco-security impact of the introduction of invasive marine species through ballast water has been identified as “... one of the four greatest threats to the world’s oceans” (Global Ballast Water Management Program, n.d.).
The IMO has responded to this issue through a series of resolutions and, more recently, with the 2004 International Convention for the Control and Management of Ships’ Ballast Water and Sediments (Ballast Water Convention). Although many coastal and port states have adopted national laws or regulations to implement the resolutions and to protect their coastlines from this threat, the Ballast Water Convention, is not yet in force. To date, the Ballast Water Convention has been ratified by only sixteen countries representing 14.24 per cent of the world tonnage (IMO, 2008b). At present, except for national legislation and the binding preventative international obligations under UNCLOS and the CBD, the IMO resolutions on ballast water management remain the (non-binding) applicable international regulatory regime.
The Ballast Water Convention details technical standards and requirements for the control and management of ships’ ballast water and sediments. The major goal of the Convention is to shift ballast water management from exchange to treatment by 2016 for all ships. Ships are to maintain on board a ballast water management plan (BWMP) specific to the requirements of that ship depending upon the year of construction and to record ballast water operations in the ships’ ballast water record book. Ballast water exchange (discharge port/coastal water and take up new water) is to be conducted at least 200 nautical miles from the nearest land and in water which is at least 200 metres in depth. In cases where the ship is unable to do this, the exchange can be conducted in areas at least 50 nautical miles from the nearest land and where the depth of the water is at least 200 metres. However, if the parameters of distance and depth cannot be met, the port state can designate areas, in consultation with adjacent or other states, where a ship could conduct the exchange. The Convention also establishes standards for ballast water exchange methods and ballast water performance standards, i.e., concentration of viable organisms in the ballast water discharged.
Since ballast water exchange can have serious repercussions for the safety of ships, the Ballast Water Convention provides that a ship need not comply with these requirements if the master reasonably decides that such exchange would threaten the safety or stability of the ship, its crew, or its passengers either due to adverse weather, ship design or stress, equipment failure, or any other extraordinary condition. Article 13 of the Convention provides that parties with a common interest in protecting the environment, human health, property and resources in a given geographical area, particularly those parties bordering enclosed and semi-enclosed seas, can establish regional agreements consistent with the Convention.
Ballast water discharges could pose serious challenges to the ecologically fragile and biodiversity rich Arctic marine environment. However, in Arctic waters it may in fact be the case that species from southerly latitudes are unlikely to survive if discharged in northern waters. In addition, the nature of voyages (cargo laden or in ballast) that would occur in Arctic waters is uncertain.
Despite these unknowns, it should be noted that the IMO recently adopted (13 July 2007) Guidelines for Ballast Water Exchange in the Antarctic Treaty Area (IMO MEPC 56, 2007b). These Guidelines provide international guidance on the implementation of Article 13 of the Ballast Water Convention on how ballast water is to be managed in regions of extreme cold with fragile ecosystems. The Guidelines provide an interim measure for all ships entering the Antarctic Treaty area before the Convention comes into force. Ships with ballast tanks entering the Antarctic waters should prepare a ballast water management plan taking into account the problems of ballast water exchange in cold environments and in Antarctic conditions. In addition, the Guidelines recommend exchange well before entering the Antarctic area. Importantly, the Guidelines address specific concerns for ships sailing in both Arctic and Antarctic waters, proposing special measures with respect to sediment in ballast tanks (para. 9) and the discharge of ballast water from Antarctic waters into Arctic and sub-Arctic waters (para.7).
The mix of national and international waters in the Arctic poses special challenges in managing ballast water and sediments. As noted recently, the Arctic may be an area with significant wealth in marine genetic resources (DFAIT, 2007). Ballast water discharges by ships in the Arctic pose not only complex environmental issues but, more importantly, raise serious issues of safety (e.g., the waters in the ballast tanks may need constant heating as the waters could turn into ice, jeopardizing the stability of the ship). Moreover, as weather conditions constantly change, there could be very little predictability regarding decisions over ballasting and de-ballasting.
The Ballast Water Convention does not take into consideration the harsh environmental conditions of the Arctic that mandate special treatment and concern for safety. Among the Arctic Council member states, Canada has a comprehensive set of regulations for ballast water discharge (Canada, 2006). However, these are applicable only to areas that fall within its jurisdiction. Even the Canadian regulations may prove inadequate to meet the challenges posed by the Arctic, particularly in the context of safety. For instance, the contingency provisions under the Regulations mandate that even in the event of a ship facing difficulties in complying with the regulation or its BWMP, the ship is required to take direction from Transport Canada regarding the discharge of ballast water. Questions may arise regarding the efficacy of this consultation, particularly when a ship is caught up in rough weather and where split second decisions would have to be made in the best interests of the ship and its crew. This position stands in sharp contrast to the U.S. regulations wherein considerable discretion is provided to the master, operator, or person-in-charge of a vessel in determining the safety exemption. Norway, a party to the Ballast Water Convention, would also have responsibilities with respect to ships flying its flag.
Particularly Sensitive Sea Areas
Since the early 1990s, several marine areas have received special protection from the IMO because of their particular sensitivity to international shipping through designation as particularly sensitive sea areas (PSSAs). A PSSA is a marine area “that needs special protection through action by IMO because of its significance for recognized ecological, socio-economic, or scientific attributes where such attributes may be vulnerable to damage by international shipping activities” (IMO PSSA Guidelines, 2005). Special protection consists of appropriate protective measures such as areas to be avoided, traffic re-routing and separation schemes, mandatory ship reporting and prohibited discharges. It is possible for special area designation under MARPOL 73/78 to be one such measure. In exceptional situations, special mandatory measures may be adopted under UNCLOS Article 211(6), although this has not yet occurred. These measures raise the standard of protection for PSSAs and may be enforced by proponent coastal states once designated. Using the authority provided by its own mandate, the IMO has developed Guidelines for the Identification and Designation of Particularly Sensitive Sea Areas, most recently revised in 2005.
An increase, perhaps even a marginal increase, in shipping in the Arctic, could result in a significant threat to this particularly fragile environment. The PSSAs designated to date include diverse sensitive environments such as the Great Barrier Reef and the Torres Strait, the Sabana-Camaguey Archipelago in northern Cuba, Western European Waters and the Baltic Sea. Areas eligible for such designation need to satisfy requirements grouped under (1) ecological, (2) social, cultural and economic, and (3) scientific and educational criteria. Only one criterion within any of these requirements need be satisfied. However, the threat from international shipping must be demonstrated. The IMO designates a PSSA following a proposal by one or more states and its consideration by MEPC and the Sub-Committee on the Safety of Navigation, if a safety measure is proposed. Decisions are based on the proposed area’s environmental conditions, demonstrated vulnerability to international shipping, and the availability of measures within the IMO’s competence.
If the conditions and criteria set out above are satisfied in a given area of the Arctic, that area may be eligible for PSSA designation. However, experience with the Western European and Baltic PSSAs suggests that it would be important to secure consensus among Arctic states before proceeding with a PSSA proposal. The Russian Federation opposed the Baltic PSSA and, as a result, Russian waters have been excluded from that PSSA. Further, and as noted earlier in this chapter, Article 234 of UNCLOS permits coastal states in ice-covered areas to adopt and enforce non-discriminatory laws and regulations to combat vessel-source pollution in their EEZs, and this is without the need to seek prior IMO approval. This provision may be read as complementary to PSSA designation in that it provides enforcement authority. At the same time, Article 234 powers may be exercised to achieve the same effect of a PSSA, without having one designated.
For a sensitive marine area to be protected from a threat posed by international shipping, there is also the option of obtaining measures under SOLAS without necessarily involving the designation of a PSSA. An IMO member state, or a group of cooperating member states, may take the initiative to propose the establishment of a routeing system. Regulation 10 of Chapter V of SOLAS provides for the adoption of ships' routeing systems which can be made mandatory or recommendatory for all ships or certain classes of ships or ships carrying a particular cargo. These include recommended routes (including recommended tracks), routeing system, traffic separation scheme (including traffic lanes, separation zone or line and established direction of traffic flow), roundabout, inshore traffic zone, two-way route, deep-water route, precautionary area (requiring special care in navigation), area to be avoided, and no anchoring area (IMO, 2008c). The purpose of these measures is to provide for safe passage. However, routeing measures may also be proposed for the protection of the marine environment, for example to reduce the risk of pollution in heavily trafficked areas. For example, by limiting the access to ships in an area to be avoided, the potential for ship discharges may be minimised. SOLAS Regulation 11 further provides for mandatory ship reporting systems for all ships, or certain categories of ships, or ships carrying particular cargoes. These may include entry and exit reports, passage plan reports, intermediate reports and defect reports. The proponent states would then be in a position to provide ships with information (e.g., navigational warnings) and procedures to be followed. There are useful examples of routeing and reporting measures adopted in northern waters which could be useful examples for the Arctic, such as the traffic separation scheme in Prince William Sound, Baltic (measures prior to PSSA designation), recommended routes joining traffic separation schemes off the coast of Norway, two way routes off the coast of Iceland, and mandatory ship reporting systems off the coast of Greenland (IMO, 2008c).
Places of Refuge for Ships in Need of Assistance
As international shipping increases in the Arctic, it should be expected that there will be a probable concomitant increase in the frequency of incidents involving ships in need of assistance. This probable increase can be expected to occur even in the best of scenarios where only modern Polar Class ships with highly competent crews navigate the harsh conditions of the Arctic. Experience shows that stress of weather, equipment failure, human error or some other unforeseen factor can adversely affect the performance and consequent safety of the best of ships. Tradition and necessity have led to the observance by the international community of a long-standing humanitarian custom to provide assistance to ships that request it. Injured or sick crew may need to be airlifted or the ship itself may need temporary refuge before proceeding on its maritime adventure. Where search and rescue is called for, the SAR Convention provides the necessary legal framework. However, this custom has been subjected to international scrutiny in relation to situations where provision of assistance to a ship, most especially when refuge in sheltered coastal waters such as a port or a bay, is requested (Chircop & Linden, 2006, 1-31). The casualties of the Erika and Prestige highlight the difficulty a national or port authority faces when confronted by a ship requesting assistance when its condition poses major safety and environmental threats to the coastal state.
In 2003, the IMO adopted Guidelines on Places of Refuge for Ships in Need of Assistance to assist decision-making in these situations (IMO Refuge Guidelines, 2003). Although not mandatory, the Guidelines provide a risk assessment framework for masters and salvors on site with the ship, and coastal state authorities whose permission is requested for the ship in need of assistance to enter a place of refuge in sheltered waters. In the European Union, the European Commission has gone farther in developing a legal framework that not only includes a duty to assist, but also a duty to designate places of refuge in member states (EC, 2002). Canada and the United States have had a longstanding practice of granting refuge on humanitarian grounds and on a case-by-case basis. As will be seen below, Canada adopted a National Places of Refuge Contingency Plan (PORCP), which establishes a national framework and approach with associated regional measures (Transport Canada, 2007b). In the United States, in 2007 the U.S. Coast Guard adopted a new internal policy for places of refuge (United States, 2007). An important condition is that the ship in need of assistance has a certificate of financial responsibility under the U.S. Oil Pollution Act of 1990 or an acceptable letter of undertaking, but that standard coverage under the CLC Convention would not be recognized. However, the parties concerned would coordinate with the U.S. National Pollution Funds Centre and servicing legal office to arrange for acceptable coverage to enable port entry.
In the Arctic marine environment, ships in need of a place of refuge encounter considerable challenges. Elsewhere where places of refuge have been designated or offered to a ship in distress, there is either help at hand (e.g., salvage) or a standby response capability in the place of refuge or vicinity. Most of the sections of the actual and potential international navigation routes in the Arctic are remote and over long distances, implying that salvage or any coastal state assistance is likely not to be timely, if at all available. Also, with ice cover in sheltered areas to be expected even in the summer navigation months, the identification of a reasonably located safe place for a ship can be difficult. Consequently, there are likely to be significant practical difficulties to be encountered in finding and supporting suitable places of refuge for ships in the Arctic. Suitable locations for ships requiring shelter to make repairs in the Canadian or Russian Arctic might be difficult to designate in advance due to the changes in ice conditions depending on the season. Even with optimum conditions, a sudden wind change could move ice into an otherwise sheltered location. However, a ship in need of assistance would contact the coastal state’s marine administration through vessel traffic services and it would be hoped that that state’s Maritime Assistance Service, as recommended by IMO, would designate a location and provide assistance if requested (IMO MAS, 2004). To facilitate the provision of a place of refuge by national authorities, the International Group of Protection & Indemnity (P & I) Clubs informed the IMO of a new cover to be provided to ports for some of the risks they undertake in providing refuge (IMO LEG, 2004).
Wreck Removal
The most recent international convention adopted by the IMO that has the potential to contribute to the governance of shipping in the Arctic is the Nairobi International Convention on the Removal of Wrecks, 2007 (Wreck Removal, 2007). Clearly, it is too soon for the convention to be in force and at the time of writing none of the Arctic states are parties. The purpose of this instrument is to provide state parties with the legal basis, beyond their territorial seas (and within their territory or territorial seas at their option), to remove, or have removed, shipwrecks that may have the potential to adversely affect human safety, goods and property at sea, and the marine environment. Wrecks can pose significant danger to the safety of navigation, human lives and the marine environment. Shipowners are made responsible for locating, marking and removing ships; they are financially liable. Insurance is required and the possibility of direct action against the insurer is also provided. Shipowners normally purchase cover for these risk from the P & I Club (Gold, 2002).
The Role of Ports in International Maritime Law
Enforcement Through Port State Control
Most marine regions around the world are now covered by a global network of memorandums of understanding (MOU) on port state control. At this time, the marine regions covered by MOUs include: Paris MOU (Europe and North Atlantic), Tokyo MOU (Asia and the Pacific), Viña del Mar MOU (Latin America), Cartagena MOU (Caribbean), Abuja MOU (West and Central Africa), Black Sea MOU, Valletta MOU (Mediterranean), Goa MOU (Indian Ocean), and Riyadh MOU (Arab States of the Gulf). Although the United States administers its own port state control system, it has cooperating observer status with the Paris MOU. These agreements among national maritime authorities provide a systemic approach to the inspection of ships visiting their ports to ensure compliance with international standards established by conventions listed in the individual MOU (Gold, 2006). The enforced conventions include SOLAS, COLREGS, MARPOL 73/78, and STCW, among others. In the case of suspected violations of COLREGS Rule 10 (traffic separation schemes) and MARPOL, an authority may gather evidence at the request of another authority. The principal responsibility to implement and enforce international shipping standards belongs to the flag state. However, each national authority applies the instruments listed in the MOU that are in force and to which its state is a party in relation to ships visiting its ports. Inspecting states ensure that ships of states that are not parties to the instruments enforced under the MOU are not given any more favourable treatment than the ships of states that are parties to such instruments. A port state control inspector can require a ship to rectify a deficiency before departing the port and in the worst cases can detain the inspected ship.
The Paris MOU is potentially relevant for ships navigating within the Arctic Circle (Paris MOU, 1982). Members are the maritime authorities and coastal states of the North Atlantic basin in North America and Europe. The maritime authorities of the Arctic Council states, including Canada, but not the United States, are parties to the Paris MOU. The Tokyo MOU, which is the only other arrangement involving states adjacent to the Arctic Circle, limits the area of application to the Asia-Pacific region. The maritime authorities of Canada and Russian Federation are parties, but the U.S. maritime authority is only an observer to the Tokyo MOU. The Paris MOU refers to the ports of member authorities and does not appear to have any other geographical restriction, including ports of member authorities located within the Arctic Circle.
At this time only Canada and the Russian Federation appear to have national safety and environmental standards specifically designed for navigation in the Arctic, separately from international standards adopted under the auspices of the IMO, including the Arctic Guidelines. The Russian Federation employs a ship inspection system for the purpose of passage through the Northern Sea Route. Canada requires that ships comply with the Arctic Waters Pollution Prevention Act (AWPPA) (Canada, 1970) construction and other standards before they can navigate in Arctic waters, and are inspected for this purpose.
A potential issue for Arctic Council states and the international maritime community generally whose ships would be inspected with respect to their polarworthiness under SOLAS is the potentially multiple standards that apply, i.e., the Arctic Guidelines (including the IACS Unified Requirements), Canadian AWPPA standards and the Russian Federation standards, and the instruments enforced under the Paris MOU on Port State Control. As international shipping in the Arctic grows and new ports are developed within the Arctic Circle, it may be necessary for the maritime authorities of Arctic states to consider whether they should coordinate port state control enforcement efforts through a new dedicated MOU, or whether existing MOUs are sufficient to enforce the higher regulatory standards applicable to the Arctic. Effective port state control would need to enforce compulsory rules (Jensen, 2008).
Ports and Maritime Security
In 2002, about a year after the 9/11 terrorist attacks in the United States, the IMO introduced the International Ship and Port Facilities Code (ISPS) as a mandatory instrument and linked to the SOLAS Convention (IMO ISPS Code, 2002). The Code applies to all commercial vessels over 500 gross tons engaged in international trade and, should a contracting party so decides, also to ships not engaged on international voyages that serve ships arriving or departing on an international voyage (IMO ISPS Code, 2002, Reg. 3.2). Mobile offshore drilling units are also included. For the first time, an IMO instrument applies on land. The ISPS Code requires ports and terminals, public and private, within or outside ports, to be secure. The Code decrees levels of security for ships and ports. Ships may be required to provide notice and information that may be requested by the maritime authorities of the host state (SOLAS, 1974, Chap. XI-2, Reg. 9). Canada and the United States have advance notice of arrival requirements for ships that depend on the duration of the voyage. For voyages longer than ninety-six hours, the notice must be given ninety-six hours in advance (United States, 2002; Canada, 2004, s. 221).
Security plans for ships are prepared for approval by flag states, ship and company security officers are appointed, as are security officers for ports, and port plans prepared and approved. Certificates are issued to ships, companies and ports, and security plans are subject to periodic audit. On 1 July 2004, the ISPS Code came into force and was quickly implemented worldwide. This was followed by introduction of regulatory regimes, methods of identification for seafarers and port workers, security audit processes, and intelligence gathering equipment and procedures.
In the Arctic, a risk assessment should be conducted for ports as well as ship-loading docks wherever located and at oil and gas transfer facilities, followed by adoption of security plans, in order to comply with the ISPS Code. Ships engaged in cargo operations, support services, or cruises in the Arctic will have to comply with the ISPS Code and cooperate with port and terminal security. In areas under their jurisdiction, Arctic coastal states should have ship control procedures in place, as well as intelligence gathering for the Arctic domain and a secure system of assessing threats and sharing intelligence with law enforcement agencies.
PART III: INTERNATIONAL PRIVATE MARITIME LAW FRAMEWORK
Introduction
The shipping industry exists to transport people and to trade products for business and profit. To be successful in the Arctic shipping business, shipowners must interact with a variety of other commercial parties, whether the source of their earnings, such as cargo owners and cruise passengers, or the suppliers of essential shipping services, like insurers and salvors. In each case, shipowners engage with their customers or suppliers by private contracts. As private arrangements, these contracts are regulated by private or civil law, typically of national origin. Since ships move between different countries, their owners’ contracts can be subjected to a variety of different national jurisdictions and laws. The resulting confusion has impelled the international community to harmonize the relevant national laws in some areas by the conclusion of international private law conventions that establish uniform contractual regimes. These are the
principal topics of explanation in this Part. The international public law of the sea, described in Parts I and II, is not aimed at the regulation of the private commercial relationships being discussed here. Even so, since it governs the conduct of ships and their owners, it must be taken into account to the extent that it inevitably influences both the conclusion and performance of maritime commerce. In addition, Part III includes discussion of the international conventions that establish the means to acquire compensation and remedies for claimants that suffer loss or injury as a result of the breach of the international public laws for the protection of the oceans from ship-sourced pollution (Appendix D).
Carriage of Goods and Passengers by Sea
The movement of goods and passengers by sea is regulated by the terms of the carriage contract with the carrier. Fundamentally, this is a voluntary arrangement which both sides have freedom to negotiate and conclude. In principle, it is not regulated by international public law because it is a private arrangement between the parties. Thus the international customs and practices of the shipping, cruise and merchant communities are more likely to govern the Arctic movement of goods and passengers than international maritime law.
Nonetheless, public law of the sea may influence the carriage contract in two ways. First, the carrier must ensure that its ship meets all the public law standards for human safety and environmental protection (e.g., SOLAS, MARPOL 73/78 and STCW). These standards are likely to be written or read into carriage contracts, unless special terms about them are concluded. Secondly, the carriage of passengers, the carriage of goods under bills of lading and the shipment of dangerous goods have raised sufficient concern to attract public intervention through international treaties containing minimum mandatory rules of carriage, which are incorporated in the parties’ carriage contracts (Appendix D).
The essence of a contract of sea carriage is an agreement for safe transport and delivery by ship in exchange for payment of freight, hire or passage. In addition to specifying the voyage, the contract will allocate between the parties the risks and responsibilities of the transit. In general, the kinds of risks are the same for all marine transport. The carrier must provide a seaworthy ship for the voyage which must be prosecuted without deviation or delay and with due care for the cargo or passengers. For example, the ship should be adequately crewed, equipped and waterproof whether the voyage is through tropical or polar seas. However, the specific risks are particular to each voyage and the carrier is obliged to prepare against reasonably foreseeable risks. Thus for the carriage of a perishable cargo into the Arctic, a carrier must supply a ship that is both seaworthy (i.e., watertight) and sufficiently heated.
A carriage contract is likely to contain a multitude of specific clauses designed to cover all foreseeable contingencies of the particular voyage. Given the repetitious nature of many international trade deliveries and cruise destinations, it is no surprise that international shipping organizations and traders’ associations have developed standardized clauses for particular trades, cargoes and routes and organized them into blank forms of contracts. In some areas, international conventions also impose standard terms. There are three general international contractual frameworks governing Arctic sea carriage relationships: 1) bulk goods in general cargo or tramp ships, 2) packaged merchandise on northern supply and liner services, and 3) passengers on cruise ships.
Bulk Goods in General Cargo or Tramp Ships
A key reason for marine transportation in Arctic waters is to remove extracted natural resources. Typically, petroleum and minerals are moved in bulk in tankers and ore carriers that tramp (sail) around the world from port to port. Natural gas is similarly transported but in dedicated liquefied natural gas (LNG) carriers. The contracts of carriage of such trade are known as charter parties, which are not governed directly by any international laws. Such international “regulation” as exists consists of widely used and generally accepted standard terms of trade set by industry bodies like BIMCO and INTERTANKO. Given the long experience of shipping to ice-bound ports around the Arctic, these organizations have devised voluntary “ice clauses” for inclusion in individual charter parties (e.g., BIMCO Ice Clauses). These clauses allow for the contingency of changing ice conditions by giving the carrier liberty to deviate from the contracted carriage to avoid, for instance, sending the ship to a destination that becomes icebound or leaving it in a loading port as ice moves in.
More recently, member societies of IACS have introduced winterization guidelines for navigation in cold climates, e.g., Det Norske Veritas (DNV) Guidelines (DNV, 2006) and American Bureau of Shipping (ABS) Guidelines (ABS, 2006). These guidelines set out standards of ship preparedness for Arctic shipping and thereby indirectly affect the standard of care for the goods on board. For example, DNV Guidelines for winterization require cargo oil lines to be located under deck and cargo valves to be protected from icing. When these guidelines are regarded as best practice in the industry for shipowners, they set the expected minimum standard of reasonable care for cargo.
Similarly, the IMO’s Arctic Guidelines and the Arctic Council’s Guidelines for Transfer of Refined Oil and Oil Products in Arctic Waters (TROOP Guidelines) (Arctic Council, 2004) may also affect the carriage of cargo. In addition, the public international maritime law that mandates standards for ships may also indirectly influence the standard of care in a carriage contract. Likewise, mandatory national legislation about Arctic shipping, which typically but not exclusively falls upon the shipowner, may also affect a voluntarily concluded contract of carriage such as a charter party. For example, under the Canadian AWPPA where weather, ice or sea conditions require, a pollution prevention officer may order a ship away from a shipping safety control zone, with consequent deviation and delay in delivery of its cargo as contracted.
Packaged Merchandise on Northern Supply and Liner Services
The re-supply of northern communities and work sites, everything from industrial tools and machinery parts to food and personal items, are transported on shipping services along an ordered route of delivery. As ice conditions diminish in the future, transportation of merchandise between Europe and Asia along the Northern Sea Route by liner shipping services may be expected. Such packaged, crated and containerized items are carried under contracts represented by bills of lading and sea waybills. This kind of maritime trade is regulated internationally. Several sets of competing international rules now exist, but their mode of operation and regulatory function are the same. Subscribing countries must legislate the rules domestically so that they are mandatorily incorporated into the carriage contracts. These rules set out the minimum responsibilities of the carrier towards the cargo and its owner in return for a limited maximum liability in the event of breach of the contract.
Established in 1924, the Hague Rules received wide application until modern shipping and cargo handling methods rendered their allocation of risks and responsibilities between the carrier and cargo owner somewhat dated. The Hague Rules were amended to some countries satisfaction by the Visby and Special Drawing Right (SDR) Protocols in 1968 and 1979 (Hague-Visby Rules, 1968/79), while other states chose to replace them with a new set named the Hamburg Rules in 1978 (Hamburg Rules, 1978). In 1980 a further set, modelled on the Hamburg Rules but designed for the burgeoning multimodal movement of goods that resulted from the container revolution, was concluded by the Multimodal Convention (Multimodal Rules, 1980). This growing confusion of international regulations has led the United Nation Commission on International Trade Law (UNCITRAL) to prepare prospectively for possible conclusion in 2008 a wholly new uniform set of rules (UNCITRAL Draft Convention). The pattern of ratification of the international carriage conventions by the Arctic states is set out in Appendix D. However, ratification of an instrument per se is not determinative of the support or otherwise to a particular instrument. For example, although not a party, Canada has implemented through the Marine Liability Act the Athens Convention and the Hague-Visby Rules.
Each set of rules has to solve the same problem, namely balancing the risks of sea transport and maritime trade in an internationally acceptable way. As with bulk cargo, the carrier must provide a suitable ship in which to load, carry and care for the cargo to its destination. The various sets of rules differ in the standards of conduct expected of the carrier, the scope of application of the rules and the limits of liability for their breach. These are variations in details, not principles. The Hague-Visby Rules, or some variant of them, are the most widely applied international regulations at present. These rules apply in the Arctic just the same as in any other ocean area. As with bulk cargo transport, practical standards appropriate for sailing in Arctic waters (e.g., the IMO Arctic Guidelines, the DNV and ABS Guidelines, the Arctic Council’s TROOP Guidelines and the Nunavut Conditions), concerning seaworthiness of the ship in ice conditions and care of the cargo in cold climates, influence the operation of the rules.
In general, the Hague-Visby Rules require the carrier to load, handle, stow, carry, safe-keep, care for and discharge the cargo (Art. II). The carrier must ensure that the ship is seaworthy and cargoworthy and is properly equipped, supplied and crewed (Art. III(1)). It must also complete the voyage without unreasonable deviation or delay (Art. IV(4)) and must protect the cargo until discharge at its destination (Art. III(2)). There are provisions for exceptions for intervening events and actions by persons beyond the carrier’s control, in addition to the notable exclusion of liability for the negligence of the master and crew in the navigation of the ship (Art. IV(2)). These rules are mandatory minimum terms of the carriage contract (Art. III(8)). However, the carrier is free to agree to undertake greater responsibilities towards the cargo (Art. V). In the event of breach of its duties, the carrier is liable for a specified compensation to the cargo owner. No limitation of liability is applicable if the carrier has acted wilfully or recklessly in disregard for the cargo (Art. IV(5)).
Beyond paying the agreed cost of transportation, the cargo owner’s chief duty is not to ship dangerous goods without adequately forewarning the carrier of their hazardous nature. Whether the cargo owner does so or not, the carrier is entitled to discharge or destroy a cargo that poses a risk at any stage of the voyage and to hold the cargo owner liable for all damage caused by it (Art. III(6)). What constitutes a dangerous cargo, and how such a cargo must be treated, is determined in the first instance under the IMDG Code, but because new chemicals and other hazardous products are continually being produced, these are constantly evolving. Further, in instances of containerized cargo, the safety of the containers themselves is regulated by the International Convention for Safe Containers (CSC, 1972).
Passengers on Cruise Ships
The growing interest in eco-tourism in the Arctic is rapidly increasing the number of cruise ships making excursions in polar seas. The commercial carriage of passengers by sea, whether on ferries or cruise ships, is internationally regulated by the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974 and its protocols of 1976 and 1990 (not yet in force) (Athens, 1974/76/90). (A further protocol was concluded in 2002 but it is also not yet into force: when it is, the consolidated treaty will be known as the Athens Convention, 2002). The safety of everyone on board, whether crew, cruise company employees or fare paying passengers, is the responsibility of the carrier and is regulated by SOLAS. The Athens Convention governs the terms of the passengers’ contract of carriage with the carrier, providing minimum conditions subject to specified exceptions and limits of liability.
The Athens Convention states straightforwardly that the carrier is responsible for any personal injury to passengers and loss or damage to their luggage that occurs as a result of the fault or negligence of the carrier or its employees (Art. 3). If the injury or loss is incurred as a result of shipwreck, collision, stranding, explosion, fire or defect in the ship (collectively called “shipping incidents”), the carrier is presumed to be at fault unless it can affirmatively prove it was not (Art. 3(2)). (Under the Athens Convention 2002, Art. 3, the carrier will be held strictly liable for shipping incidents unless it proves they resulted from acts of war, hostilities, civil war, insurrection, exceptional natural phenomena, or the wilful acts of third parties.) In other circumstances, the injured passenger must prove the carrier or one of its employees was negligent in a way that caused the claimed loss. Thus, for example, the failure of the master to give passengers an appropriate warning before a potentially dangerous manoeuvre to avoid ice would constitute negligence giving rise to a claim if passengers could demonstrate they were injured as a consequence of the manoeuvre.
The Athens Convention does not, however, spell out the criteria of negligence. Negligence acquires its meaning from accepted international shipping practices, particularly amongst cruise ship operators, e.g., Association of Arctic Expedition Cruise Operators Guidelines (AECO, 2007), and from SOLAS as well as other binding shipping safety rules such as IMO’s Life Saving Appliances Code (IMO LSA, 2003). The IMO LSA sets out the minimum kinds and operability of personal life saving equipment on board a passenger ship. However, industry standards and international guidelines may not be sufficient as they may not be up to date or adequately reflect special shipping situations. For example, the IMO LSA calls for personal life saving appliances (e.g., lifeboats, liferafts, rescue boats and life jackets) to be operational in temperatures ranging from +40oC down to -15oC, which is likely inadequate given the low temperatures in the Arctic.
The Athens Convention also protects carriers by imposing controversial limits on the compensation payable by them for breach of their duties. Under the Athens Convention 2002, contracting states will be allowed to set their own higher or unlimited ceilings of compensation (Art. 7). Injured claimants can exceed the prescribed limits only if they can prove the carrier’s default was done wilfully or recklessly with the expectation that injury would probably result (Athens, 1974/76/90, Art. 13). However, the compulsory insurance requirements and a direct right of action against the liability insurers for injured claimants that will arise under the Athens Convention 2002 should offer passengers greater assurance of actual receipt of compensation (Art. 4bis).
Marine Insurance
There is no international convention on marine insurance. A business and private law matter, marine insurance tends to be legislated at the national level (e.g., Canada and Russian Federation) and, occasionally, at a sub-national level (e.g., United States). Insurance practices are driven by insurance markets, the major providers being located in London, New York, Oslo and Tokyo. Of particular significance for Arctic shipping is protection and indemnity insurance, offered through P & I Clubs, with the major clubs being based in Japan, Norway, Sweden, United Kingdom and United States, and represented by the International Group of P& I Clubs (Table 6). Until recently, Russian Federation shipping in the Arctic tended to be insured under state schemes (Schelkanov & Vasilyev, 2006; Smirnov & Stepanov, 2006). With the exception of Russian Northern Sea Route experience, there is only limited knowledge and research on the
marine insurance aspects of Arctic shipping (Gold et al., 1996; Gold et al., 1997; Musin, 1998; Ragner, 2000; Gold & Wright, 2006; Schelkanov & Vasilyev, 2006; Smirnov & Stepanov, 2006).
Marine insurance is an essential service to international shipping. It is generally conceded that without marine insurance, international commercial navigation in the Arctic would not be economically or environmentally viable (Gold & Wright, 2006). Marine insurance allows shipowners and carriers generally to take on the risk of trading on Arctic routes and liabilities imposed by statute, for example those arising from oil pollution damage. Shippers and consignees would also want to protect their cargoes. Throughout the long history of marine insurance, marine underwriters, although conservative, have not been averse to risk exposure. What has enabled them to take on the risk and charge an appropriate premium is the specialized knowledge they and the assureds possess to enable them to assess the risk so as to be able to quantify it and consider the extent, conditions and price of coverage.
Today, although most of the risks associated with shipping are well known and understood by insurers and assureds alike, the risks associated with polar navigation are still not fully known or understood. Marine insurance tends to follow the commercial nature of the venture rather then lead it. Underwriters often base their underwriting premiums on a historical loss record. It is a competitive market. For the most part, and although significant knowledge has been generated in relation to the Northern Sea Route, most of the Arctic is still perceived as an unknown quantity or a marine frontier. As a result, the provision of insurance for Arctic shipping tends to be on a case-by-case basis, expensive and also requiring self-insurance (Gold & Wright, 2006). Underwriters normally charge a surcharge in the range of 25 percent with respect to hull
and machinery and cargo insurance. However, at this time there do not appear to be discernible insurance market patterns for Arctic shipping, partly because of the paucity or specialized nature of activities to date (Gold & Wright, 2006). On the Northern Sea Route, it has been noted that “marine underwriters are willing to assume the risks involved provided that sufficient support for the vessels operating on this route is assured” (Gold & Wright, 2006).